District accounting officers should take heed in implementing recommendations of the Auditor General (AG) to close gaps in public finance management.

This is one of the recommendations by the Transparency International Rwanda in a report on the causes of financial and non-financial weaknesses identified in the Auditor General’s Reports about Decentralised Entities for the financial year ending June 30, released on Thursday in Kigali.

The report cited a number of flaws in public finance management, attributing it to laxity by districts in the implementation of AG’s recommendations.

"District management should include of AG recommendations in Imihigo (performance contracts), especially in districts which implemented less than 60 per cent of AG recommendations,” reads part of the report.

 The executive director of Transparency International Rwanda Apollinaire Mupiganyi, noted that implementation of the AG’s  recommendations—by districts—will go a long  way  in  addressing  issues  raised  in  audit  reports  over the years.

"District budget managers and administrations must implement the recommendations by the Auditor General if we need a positive change in management of state finance,” said Mupiganyi.

Mupiganyi called on district internal auditors to strengthen the existing internal control systems, design a checklist to be used for each payment and ensure thorough implementation.

The AG’s report for the financial year ending 2014, indicates that out of total of 1,423 recommendations, only 819 were implemented at 58 per cent while the remaining 604 (42 per cent) were not fully implemented.

The majority of those not implemented were for Government business enterprises, boards and districts, according to the reports.

 "The main challenge remains with boards and government business enterprises and local government agencies, which have persistently failed to implement the majority of  audit recommendations,” reads the AG report in part.

The report further indicates that level of implementation of AG recommendations for the year ending 2014, was below to that   achieved   in   the   previous   year. 

"While   entities implemented 60 per cent   of   all recommendations made during follow up in last year’s audits (2012-2013), this percentage declined to 58 this year (2013-2014),” the report reads. 

However, Patrick Habimana, the deputy Auditor General noted that regardless of gaps in management of public finances, there is evident good-will from budget managers and other Government officials to ensure accountability of taxpayer’s money.

Habimana said all public agencies are keenly following up on the implementation of audit  recommendations  to  improve  systems  of  internal control  and  strengthen  public  financial  management.

Special investigations

Meanwhile, Transparency International indicated that, Non-Budget Agencies (NBAs) were the major cause of financial weaknesses in districts, representing 98.4 per cent of the total expenditure related weaknesses.

There were unrecorded transactions, especially in NBAs, amounting to Rwf101 billion. This represents the 98.44 per cent of expenditure related weaknesses, according to TI report.

The main causes in NBA expenditure weaknesses are linked to systemic factors such as absence of accountants or professional skills in accountancy, absence of IFMIS in schools and hospitals, according to TI-Rwanda.

The watchdog  recommended that there should be, "a detailed research on NBA financial weaknesses, their causes, context, should be commissioned. This would lead to concrete policy actions to reduce the huge volume of financial weaknesses.

 Non budget agencies are off-budget entities typically designed to deliver subsidised public services, not included in the regular budget, but funded through separate agencies.

They include health centres, secondary schools, and a few subsidised tertiary institutions.