Back to Index
PAC faced with shambolic public finances
Southern African Parliamentary Support Trust
July 05, 2012
View this article
on the SAPST website
The Public Accounts
Committee (PAC) of Parliament
last week held a workshop to review audited reports from the Comptroller
and Auditor General (C&AG). What came out clearly from the workshop
is that Zimbabwe’s public finances are in shambolic state,
and that public officials have not been held to account for their
actions. In fact, it is business as usual in ministries and parastatals,
judging by the recurrence of the same issues in the various Auditor
that the PAC reviewed include the 2009 audit report, the 2010 audit
report, two state enterprises and parastatal reports for 2009 and
2010, special report on service delivery by the Zimbabwe National
Road Administration, value-for-money audit for the management of
HIV care and treatment programme and another value-for-money audit
on deforestation in peri-urban and resettlement areas. These reports
have been tabled in Parliament, which means they have become public
documents. The role of the PAC is to review and analyse these reports
and report its findings and recommendations to the House for debate.
What is highly
depressing from the audit reports is that between 2009 and 2010,
the situation of non-compliance with generally accepted accounting
standards and provisions of Zimbabwe’s public finance management
laws and regulations actually worsened when one would have expected
measures to be taken to address findings in the C&AG’s
previous audit reports. For example, the percentage of state enterprises
and parastatals without fully constituted boards of directors increased
from 43 % in 2009 to 50 % in2010. What this means is that there
is no one to provide oversight on the work of management of these
state enterprises. The result is that the parastatal becomes extremely
vulnerable to looting and enrichment of the pockets of those closely
connected to the enterprise.
in state enterprises and parastatals are very weak or non-existent.
The C&AG found out that the majority of the parastatals did
not carry out internal audit functions, risk assessments were not
performed, proper reconciliations not carried out and that there
was clear lack of segregation of duties. In addition, asset management
was very poor. An updated asset register was not maintained while
physical asset verification was not performed. Surely, assets such
as vehicles can be abused or disappear without properly maintained
assets. What is depressing is that this is the same situation that
prevailed in previous years, meaning that our Parliament has not
done enough to make the culprits accountable for their actions.
ZINARA is one
of the poorest parastatal when it comes to financial management.
The parastatal has revenue collected on its behalf by the Zimbabwe
Revenue Authority; fuel utility NOCZIM, local authorities and Vehicle
Inspection Department. Despite this decentralised means of revenue
collection, the administration has no primary record-keeping mechanism
to ensure the completeness and accuracy of revenue from the revenue
collectors. This is because bank reconciliations are performed from
the bank statements and no cash books are maintained. The 10 % administration
fees deducted by ZIMRA cannot be verified while revenue banked is
not compared against receipts or source documents. Reconciliations
are not performed on remittances from the collectors and no follow
ups are made on outstanding remittances. From these findings, it
is very clear that the potential for abuse and theft of revenue
is very high.
the financial situation is gloomy. The number of line ministries
not submitting financial statements to the Accountant General in
the Ministry of Finance increased between 2009 and 2010, while those
engaged in unauthorized expenditure increased from two to five.
Failure to submit financial statements is a violation of several
provisions of the Public Finance Management Act. Unauthorised expenditure
means those ministries would have violated Section 103 of the Constitution
which requires that all expenditures be authorized by Parliament.
To make matters worse, a whopping 40 % of the ministries could not
provide adequate supporting documentation of expenditures such as
invoices and goods received notes.
reason cited for poor financial management in ministries is the
continued breakdown of the public finance management system for
the past four years. While the Accountant General’s Office
says the system is now being upgraded and reconfigured, they do
not explain why it has taken that long to fix the system. The PAC
should also question ministries why they do not maintain back-up
accounting manual systems to deal with the problem.
Given the serious
nature of mismanagement of public funds and assets in ministries
and parastatals, Parliament through the Public Accounts Committee
must recommend strong measures to bring sanity in the public sector.
Heads should roll in those ministries and parastatals singled out
by the Auditor General for mismanaging public resources. We cannot
continue to have the same accounting officers being moved from one
ministry to the next when it has been proved beyond any reasonable
doubt that they have poorly performed and acted unlawfully. These
accounting officers and heads of parastatals should appear before
the PAC and explain their unlawful actions.
The PAC must
fully acquaint itself with provisions of the Public Finance Management
Act and demand that the necessary penalties be invoked for non-compliance.
The Minister of Finance should quickly gazette the Public Finance
Management Act regulations in order to enforce the Public Finance
Management Act. The minister should be quizzed on why it is taking
ages for the regulations to be gazetted more than two years after
the Act came into force.
And when the
PAC has presented its report to the House, it must demand response
from the relevant ministers within a reasonable period. It has become
the norm that reports will be presented and debated, but then gathers
dust. The PAC must closely monitor implementation of its recommendations
and question non-implementation of agreed actions. We need a PAC
with teeth and not one that will simply go through the motions.
Please credit www.kubatana.net if you make use of material from this website.
This work is licensed under a Creative Commons License unless stated otherwise.