Government departments continue to score low in corporate governance as they fail to adhere to the basic rules and regulations stipulated by the law and public accounts procedure manuals.
A new report by the auditor general (AG) Mildred Chiri notes that many government departments have been found wanting.
“Governance weaknesses were observed in areas of internal control, record-keeping, diversion of resources from fund accounts to parent ministries, reconciliation of sub-paymaster general accounts…, late submission of fund accounts and management of government property and resources,” said Chiri in the report.
The 2014 report notes that some ministries were not reconciling differences between figures in the sub-paymaster general accounts and the public finance management system.
The AG has highlighted the same concern over the years, saying the current audit revealed that the problem had not been addressed. Forty eight percent of 27 audited ministries were found to have failed to do the reconciliations.
Last year, said Chiri, treasury paid about $180 million to service providers as direct payments through ministries, but “most of the direct payments to service providers were not supported by invoices and receipts”. The failure to raise invoices, said the AG, might compromise the accuracy of the expenditure figures.
Some ministries did not keep full financial records as required to foster accountability and transparency and failed to submit departmental assets certificates.
“In some instances, the master assets registers and property registers were not being updated as most of the procured assets were not included in the registers. Furthermore, some fund’s assets were not revalued after the dollarisation of the economy and as a result the value of the assets was not included in the financial statements,” noted the report.
Most of the departments did not maintain proper accounting records such as receipts, payment vouchers, goods-received vouchers, cash books and ledgers. In other cases, departments were not using the required accounting officer’s instructions manual that guides officers when preparing the accounts.
The majority of ministries failed to set up audit committees as required by Section 84 (1) of the Public Finance Management Act (Chapter 22:19) and did not have risk management policies in place. As a result of weak internal control systems, some ministries lost amounts of money ranging between $23,000 and $204,000.
$95 million outstanding
Ministries owe some $95m to government due to weaknesses in debt recovery – a 90 percent jump from the previous year, said the AG. The debts came in the form of outstanding travel and subsistence advances and revenue from rentals, survey fees and surcharges, in addition to investments locked in financial institutions and loans advanced to local authorities.
Some of the debts have been outstanding since 2009. “If these amounts had been recovered, they would have gone a long way in funding government operations and programmes. There is a risk that government may fail to recover these amounts and may end up writing off some of the debts,” said the AG.
As in previous years, some ministries procured goods and services that were never delivered, indicating that the departments could have inflated expenditure.
“The audit revealed that most of the ministries were not taking corrective action on the issues of irregularities raised in previous year audits hence some of the weaknesses remained unresolved or were recurring yearly,” said the AG.