Acting Urgently On Auditor General’s Report

The scathing annual report the Federal Auditor General submitted to Parliament on Tuesday is a topical agenda we feel merits a serious deliberation.

A 54-page analysis of its audit findings into the accounts of ministries and other agencies of the federal government for the 2012-2013 fiscal year, the report addresses a raft of issues of critical concern. A report which contains recommendations Parliament should act on posthaste, it highlights several shortcomings that have been rolling over for years if not decades now.

One troubling matter the concluding part of the Federal Auditor General’s report says needs to be tackled both administratively and legally is the failure of the institutions funded by budgetary appropriation to close their accounts on time and submit an audit report on it. It particularly urged Parliament itself and the Ministry of Finance and Economic Development (MoFED) to take prompt measures to rectify the problem.

The report contains some shocking number:1.5 billion birr in receivable accounts, 2.5 billion birr unutilized budget and unsubstantiated expenditures amounting to 785 million birr during the reporting period. Its section on accounts receivable also revealed that over 877 million birr was not reconciled by 77 federal government agencies including major ministries and state-owned higher learning institutions.

The report points out that if accounts receivable are not reconciled or collected on time in accordance with the law, they are less likely to be settled and transformed into capital. It also identified, for the purpose of immediate action by Parliament, procedural gaps attending accounts receivable which it said open the door for financial mismanagement. Accordingly, it underscored that the institutions at fault must either collect or reconcile receivable monies in compliance with the applicable financial regulations and directives.

Regarding expenditures not indicated in expenditure reports, an audit to determine whether institutions entitled to utilize internally generated revenues actually indicate such expenditure to MoFED found that three government agencies alone neglected to make mention of over 35.6 million birr expenditure they incurred from self-generated revenue streams.

Moreover, the institutions which did incorporate in their revenue reports the self-generated revenue they made use of chose not to report the expenditure. Stating that these and numerous other grave irregularities have not been dealt with despite the fact that they were brought to the attention of Parliament in previous occasions, the Auditor General called on the latter to take the appropriate corrective measures.

There seems to be no solution to the perennial budget deficit and liquid cash mismanagement afflicting the country’s governmental agencies which run on the budget Parliament allots to them. This topic was broached years ago at a parliamentary session former Prime Minister Meles Zenawi attended to explain the position of his administration on a report the Auditor General Tuesday presented then.

It’s to be recalled that the Auditor General’s accusation of mismanagement of the budget subsidy the federal government allocates to regional governments prompted an acerbic retort by the then premiere.

It was only the previous year that Parliament flexed its muscle after its inaction over successive reports that brought to light financial irregularities in government agencies, reprimanding the heads of the agencies culpable of financial mismanagement over the misdeeds of the institutions and calling on pressure to be exerted on the prime minister with a view to force these institutions to mend the errors of their ways.

Some Members of Parliament even went as far as suggesting that the said institutions be denied budgetary appropriation should they not put their books in order. What is Parliament contemplating to do now?

Aside from affirming the existence of financial malfeasance that it says has been going on for long despite repeated warnings, the Auditor General’s report further proposed for swift measures to be taken as regards the mismanagement of government properties as well as government-funded construction projects which are blighted by cost overrun and schedule slippage or have been totally suspended. Why hasn’t Parliament held those responsible to account?

The findings of the Auditor General’s report unmistakably demonstrate that with the exception of a few properly managed institutions, the operation of the majority of government agencies is messy. The inability of the entities that ought to have ensured that this did not occur by enforcing transparency and accountability is entailing a misuse and in worst cases a loss of the country’s resources.

Government agencies which do not discharge their obligations in accordance with government financial administration legislations in force need to be brought to heel. Though this process was reportedly due to get under way from the start of the current Ethiopian year, the problem has in fact worsened.

Why didn’t Parliament act on the warning it issued? What guarantee is there that the mismanagement of the country’s resources will not be tolerated and prosecuted to the fullest extent of the law?

The Auditor General has thrown the ball into the court of the Legislature and the Executive by exhorting them to bring to justice those guilty of financial mismanagement in ministries and federal government agencies. How can violations of financial administration laws be tolerated by the responsible organs?

Isn’t this disregard for the rule of law, transparency and accountability tantamount to being complicit in actions which open the door for corruption and other illicit practices, which occasion a loss of the national wealth? We certainly believe so.

Source : The Reporter

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