Auditor General Alexis Kamuhire, on Tuesday, May 6, presented to Parliament his report on public finance management and use for the fiscal year ended June 30, 2024. The report showed that the number of public entities that obtained clean audit opinion on value for money rose by 7 percentage points to 66 per cent in 2024 from 59 per cent in 2023. In an exclusive interview with The New Times’ Emmanuel Ntirenganya, on Thursday, May 8, Kamuhire talked about the impact of his office’s work, key takeaways from his report, and the focus of his future public finance management check – with a focus on realisation of value for money, which refers to cost-effectiveness and efficiency in resource utilisation. ALSO READ: Public entities delivering 'value for money' rose by 7% in 2024 - AG report Here are the excerpts; Why did some public entities register great improvement while others lag behind, and what are the underlying factors for that performance? Generally, most of the public entities performed well. Those that did not perform well had adverse opinion, and adverse opinion on financial statement was only 2 per cent. There were a few entities that got adverse opinion for preparation of financial statement. And also, in compliance with laws and regulations, it was 2 per cent, few institutions. With regard to the use of public resources, entities that got adverse opinion were 4 per cent. Generally, most of the entities performed well. In local government, it was the first time that we see local government or district, except one, getting unqualified opinion in financial statement. Also, getting unqualified opinion on compliance with laws, 14 of them got unqualified opinion. We see a great improvement in local government, but other public entities also are getting unqualified opinion. That shows that, Rwanda, we are improving our public financial management in general. ALSO READ: Unlawful public expenditures fall by 25% How are the internal deterrent mechanisms, like internal audit teams, tender and procurement committees in public entities, performing in terms of helping achieve effective public finance management? We have entity in charge of procurement, that is RPPA [Rwanda Public Procurement Authority]; but also, the ministry of finance responsible for internal audit function in the country. We audited tenders that were given by public institutions, through compliance audit. That's why we are seeing improvement in compliance, because entities scored 75 per cent in compliance. The first aspect we check is the compliance with procurement laws. So, there were no major deviations from the procedure in terms of procurement. Regarding the internal audit, we don't have major findings that show that the internal auditors are not doing their job. But of course, the score was 75 per cent, we need to have 100 per cent. I think entities should improve in areas of procurement, because there are some gaps in the procurement, especially regarding giving reports, making proper tender evaluations, and avoiding delays in the procurement processes. Those internal mechanisms that the government has put in place, to me, are working, but of course we need to continue improving that area. What's being done or what's planned to be done to achieve greater results in realising value for money? On value for money also, the score was 66 per cent in 2024 from 59 per cent 2023. So, there is a slight improvement, which is a 7 per cent increase. The other 34 per cent remaining [not yet attained] is in areas we mentioned regarding contract management, project management, and also service delivery. These are the areas we see that government entities should put more effort to realise the value of the investment that we are making. When it comes to financial reporting, institutions have a chance during the audit process to correct their financial statements in case they made errors. If we deem it fit, we give them a clean audit opinion. But on compliance with laws, the moment we break the law, we don't comply. For us to know that you have corrected yourself, it will be next year when we come back to see if you did not comply with the law, and that you have not repeated the same mistake. In terms of value for money, it goes with many aspects including planning, budget execution, and project implementation. So, this takes time to improve and involves many key players to make changes. That's why we are having 66 per cent. We hope that with such improvement that we saw in the past, possibly in the next years we will see other improvements. ALSO READ: Value of idle government assets halved in 2024, say auditors What is being done or should be done to ensure the recommendations of Auditor General are fully executed to achieve the intended results? Normally, when we are doing the audit, we discuss the recommendations with heads of public entities. We agree on the recommendation to implement. Our expectation is to see these recommendations implemented when we come back. So, having 60 per cent, it's an area that can be improved. There are some recommendations that may take years to be implemented. For those ones, if we see something was done but not 100 per cent, we give what we call partial implementation. If we see nothing was done, we say nothing was done and those are under the 25 per cent which we reported as recommendations not implemented. Our expectation is to continue trying to push for implementation of the recommendations. Let's hope, possibly, in coming years this percentage will increase because everyone has a responsibility to implement these recommendations. It is even the law that public entities must implement Auditor General's recommendations. And, the beauty of implementing recommendations, the moment you implement them, it is very hard to go back. When you implement them, we see development, we achieve more. Our wish is to have that percentage increasing. What's the correlation between the implementation of recommendations and achieving a clean audit opinion? Actually, there is a link. If you implement our recommendations, you have a chance of getting an unqualified opinion because if we see everything was done as expected, we don't have anything to recommend to you. That means you have done a great job as expected, you get an unqualified opinion in financial reporting, in compliance with laws, but also unqualified conclusions in value for money. So, there is correlation. It is therefore very important to pay attention to these recommendations and implement them. Considering that the work of the Auditor General has been there for years, what has been the impact in this regard? If we go with statistics in terms of impact, today we are talking about 94 per cent [of public entities receiving clean audit opinion on financial statements], but in the last four years we are talking about 57 per cent. It means we were not transparent enough in reporting, but this time we are more transparent. If you are transparent in reporting, you do some good job in complying with laws and regulations. And what we see in the financial statement, and we are able to trace them on the field, already we see improvement in our lives. If I see money that was spent on the road in the books of account, go to the field, I see exactly that the road is there and it was constructed. Already we are able to use that road, we are able to reduce the time of travelling, it is an improvement in our lives. If I see money that was budgeted for construction of schools, written in the books of account, and I go to the field, I see exactly the school is there and students are there in that class, already we are getting unqualified opinion in value for money, because the money that we see in the books of account has been properly used by the citizens. If I see money here in the books of account that we are going to build a hospital, and I go to the field, I see exactly the hospital is there. It is already value for one. So, it is something that goes together. We don't see financial statement alone, we also see the value. You will also see the other aspect of compliance increasing from 69 in 2023 to 75 per cent in 2024 – for compliance with laws and regulations – and from 59 to 66 per cent for realisation of value for money. So, those aspects go together, the more we comply with financial reporting, the more we comply with laws and regulations, the more we see value. And that value goes back to the citizens in general. Regarding fraudulent use of money, like wasting expenditure, is there any impact that has been registered so far? If you look at the previous three years; in 2021, we had a wasteful expenditure that was Rwf3.5 billion. In 2022, wasteful expenditure was Rwf6.4 billion. In 2023, wasteful expenditures reduced to Rwf2.5 billion. This year [2024], we reported Rwf2 billion. So, we see a decrease in terms of money that we are losing. We don't want to continue losing this money. Our expectation is to have zero, not to have Rwf2 billion being lost. But also, more importantly, if you read the report that we submitted to Parliament, there was an element of money that was recovered through preventive approach. We reported this year [2024] Rwf9.2 billion that was recovered through contract management. It is a new approach [preventive audit] that we brought. We don't want to continue reporting the money that was lost when we were there. So, Rwf9.2 billion was recovered by the institutions. It's not the Auditor General who recovered this money, but it is the institution that recovered this money through our audit; through our methodology that we call preventive approach. This money was put in a contract, but if we examine this contract, we saw some duplications and these duplications were taking money. We see money that was paid for the work that was not there, but the chance of recovering this money was still there because the contract was still running. We saw the money that was put in the contract, but if we try to see what this money is going to do on the field, we failed to correlate the money with what we are going to see on the field. So, we are telling our colleagues and heads of entities that if you don't see value of this amount that we put in this contract, you better not pay this money. It is good that they have accepted our recommendations. When we went back, we had a conversation with them. They told us they haven't paid this money and we asked for evidence; we realised that this money was not paid. It is a good approach. We hope that this approach will save more money. Instead of continuing saying that two billion was lost and recovering it will take more time and even require you to go through court process, that takes time. But if you see losses are likely to happen and you prevent them right from the time that you saw it; it’s a good approach. ALSO READ: ‘Preventive audits’ could save billions of Rwandan francs lost in public projects Given the good impact of a preventive audit approach, what are the plans to scale up this auditing system? Already the approach is embedded in our procedures. We will continue to do it. We have even hired experts to do that job. Even where we see the process to be complex, our engineers can help. Most of this money was saved through construction contracts. Our engineers are capable to detect those mistakes. We also have other auditors with special skills in all sectors, being agriculture, being in IT [information technology], being in environment, we have experts in those areas. But we also want our colleagues, heads of institutions to be very vigilant in this area to check on their contracts, to see whether what is written in the contract is what they are going to get on the field. If we work together, I hope that culture will change. This year [2024] we have also reported close to Rwf1 billion that is likely to be recovered. Next year, when we go back to those institutions, we will be checking if this money was recovered. There are concerns among the public that despite the Auditor General exposing public finance mismanagement cases, the impact on holding those responsible for such cases is not really adequate. I am not sure whether the statement is correct. I may disagree with them, because if there was no impact, we couldn't register 94 per cent. If there was no impact, we couldn't register 75 per cent. And I saw many entities that were in red, according to our report, those who [were] having adverse opinion, now they are getting better opinion. More entities have moved from adverse to unqualified opinion. Already that is an impact. If people want to see impact on the lives of people being sacked, being jailed, that is not my job. It is other people's job. For me, what I see is these numbers, I see numbers improving and wish to have them continue improving until we get 100 per cent. What are the key takeaways of your 2024 report? One is to register good improvement in financial reporting, improvement in the compliance with laws,and a slight improvement in the value for money. That one we see a good trend. It's not yet 100 per cent, but at least we should recognise what we have already achieved. The second takeaway is to improve our contract and project management. There is room for improvement to ensure that the projects that we have today are implemented on time, also [ensuring that] contracts that we sign with different suppliers and contractors are implemented without delays. The third takeaway is service delivery. If you see that report, there are elements of service delivery that need to be improved across all sectors. We must give service to people without a single delay. People should get what they deserve. For future focus, we are trying to improve the audit by increasing the number of performance audits. Because a performance audit shows you where you have a gap in utilisation of resources, in being efficient, at the same time in achieving what you want. It shows you where the gap is and what needs to be done. This year we did 18 performance audits. Next year, we shall do the same number or increase in different areas. But we shall also touch each sector of our socio-economic life.
