ACTING Auditor-General Rheah Kujinga, has blamed poor oversight by directors of State-owned entities for gross mismanagement within the public institutions.
In a report for the financial year ended December 31, 2022, on State-owned enterprises (SoEs) and parastatals released this week, Kujinga flagged weak oversight.
“I continue to appreciate efforts made by the government in the form of statutory/structural reforms, inter alia, enactment of the Public Entities Corporate Governance Act [Chapter 10:31] and establishment of the Corporate Governance Unit in the Office of the President and Cabinet, that have contributed to reduction in entities without boards,” she said.
“However, the boards need to pay attention to matters raised so as to improve transparency and accountability by strengthening their internal audit units.”
She added: “In this report are instances of weak oversight over internal controls as evidenced by unsupported expenditure, non- alignment of accounting policies and processes with reporting framework (accounting standards), non- acquittal of travel and subsistence allowances, inadequate controls on fuel management, non-performance of bank reconciliations and non-compliance with tax laws and regulations.”
Kujinga raised concerns over flouting of tender procedures where government entities paid for undelivered goods.
“The enactment of the Public Procurement and Disposal of Public Assets Act [Chapter 22:23] brought an improvement in ensuring transparency in procurement of goods and services by public entities as well as ensuring fair, honest, cost effective and competitive procurement and disposal of assets,” Kujinga said.
“However, 20 issues relating to procurement of goods and services were noted and most of the issues relate to non-delivery of goods paid for.”
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In the 2019 to 2021 annual reports, the Auditor-General raised 206 audit findings and 92 were addressed, 60 were partially addressed and 54 were not addressed.
Kujinga revealed that there were serious irregularities in the management of public funds in the report on appropriation accounts and fund accounts.
She said most ministries, departments and agencies had a net under spending mainly due to low revenue inflows which affected the achievement of some programme targets and service delivery by the affected ministries and commissions.
“There were several entities with variances between figures in the financial statements, returns and corresponding, related accounting records.
“In some cases, monthly reconciliations were not being done while in other cases there was no evidence that efforts were being made to clear the variances noted.
“This resulted in errors remaining undetected and not cleared thereby making it difficult to validate the correctness of the figures reported.”
In terms of management of public resources, the report revealed that Unallocated Reserves transfers to line ministries amounting to $194,853,258,615 were disbursed above the approved budget provision of $7,629,100,000.
This resulted in unauthorised excess expenditure of $87,224,158,615. Treasury was still to regularise the excess expenditure at the time of audit on May 16, 2022.
