Govt lax in recovering debt

Source: Govt lax in recovering debt | The Financial Gazette July 20, 2017

GOVERNMENT is owed over $91 million by debtors due to failure by ministries and their funds to collect debts from clients and employees, a report by the auditor general has said.
In a remark on revenue collection and debt management contained in the auditor general’s report for the financial year to December 31, 2016, the auditor general said a number of ministries and their fund accounts needed to put more effort to recover amounts due to government.

The report said uncollected amounts have been accruing for the past seven years.
“During the 2015 period, I reported lack of efficient accounting systems and inadequate effort to collect amounts due from clients and employees totalling $48 871 240. During the period under review, the debtors increased by 87 percent to $91 409 864. The bulk of the amount has remained uncollected for long periods ranging from one to seven years,” said Mildred Chiri in her audit report.

She noted that the “collectability of the amounts that were over seven years outstanding was in doubt”.
The laxity is so glaring that, for example, some former senior officers in the Ministry of Finance and Economic Development left the civil service without repaying loans amounting to $583 835 and no one has ever bothered to recover the money.

The $583 835 is only three percent of the $18 068 044 the Finance Ministry is owed.
The Ministry of Health and Child Care’s health services fund is owed $23 634 749, the bulk being related to health service providers.

Other ministries and government departments not making effort to recover amounts due from debtors include the Public Service Commission ($10 094 245); Ministry of Mines and Mining Development ($6 244 026); Ministry of Local Government, Public Works and National Housing ($6 005 010); and Ministry of Small and Medium Enterprises and Co-operative Development ($3 075 000).

Chiri warned: “Without resources being effectively pooled together, service delivery can be compromised. For example, service delivery at health institutions was adversely affected by obsolete hospital equipment; inadequate funding for the procurement of new equipment and medicines; unavailability of alternative water sources to service the hospitals and space to install new equipment received; and unavailability of specialised personnel. Revenue leakages remain a challenge and require receivers of revenue to put in place controls to guard against the leakages.”