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Financial management

Comments / {{hitsCtrl.values.hits}} Views / Wednesday, 15 November 2017 00:00

The Government is made up of hundreds of institutions, departments and ministries that are essentially tasked with managing public assets but clear oversight is often missing, resulting in public funds being mismanaged or going astray.  

The Public Accounts Committee (PAC) of Parliament, in its latest report released this week, has found that one-third of institutions evaluated by the committee had failed to comply with relevant rules and regulations in 2015. 

The report was the most comprehensive complied by the PAC in decades. Accordingly, out of the 842 institutions investigated by the committee only 58 or 7% complied with 90% of guidelines. One of the main issues with regard to the ministries called before the committee, PAC found, was that updated fixed assets registers and computer software and accessories registers of ministries were weak and needed to be properly maintained. 

Fixed asset registers basically keep track of fixed assets of an institution and if records are not kept they can easily result in mismanagement or be lost due to corruption. Fixed asset registers of 28 out of 50 ministries that existed in 2015 had not been duly updated while 65% of total ministries (32 institutions) were not maintaining updated registers of Computer Software and Accessories. 

In addition, the annual performance reports of 24 ministries (49%) for the 2015 financial year had not been submitted to Parliament. The report also reveals that 44% of special spending units of the Government had not maintained fixed assets registers while 14 of the Special Spending Unit (74%) had failed to submit annual performance reports to Parliament within the given timeframe. 

A total of 19 government departments (20%) had not established audit and management committees and conducted a minimum of three meetings. 

The report also observed that 61 departments out of the total number evaluated (64%) had not properly maintained fixed asset registers. Nine departments out of the total had not even opened a Fixed Assets Register. Concerning ministries, departments and special spending units at the provincial level, the report disclosed that 143 institutions (56%) had failed to maintain fixed assets registers while 107 institutions had not submitted annual action plans for 2015.

The PAC report gives an idea of how poorly financial management and accountability is maintained at institutions that are entrusted with public funds. Many of these institutions and departments are also tasked with providing essential services and approvals to the public making the system inefficient and convoluted. 

Making this pervasive system coherent and competent is a colossal task for the Government, especially as competent maintenance of public funds is key to improving regulatory frameworks, collecting taxes and targeting social welfare programs.  Responsibility is the first place to start with the heads of institutions and their accountants held accountable for the improper maintenance of accounts. Improved management is essential as significant amounts of public money are used to employ over a million state workers who ideally should be dedicated to doing their jobs. 

Reducing the number of institutions and implementing stronger laws would be the next round of reform. For the public even a stronger focus on the larger ministries and their institutions would be welcomed.  

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