Penal code: The dawn of due diligence

Minister Uwizeyimana at a past event. (File)

The new penal code that came into effect just over a week ago, heralds the dawn of due diligence in public institutions, cooperatives and companies.

Article 88 stipulates that “public institutions, companies, cooperatives, public or private entities or organisations with legal personality are held liable for offences committed on their behalf by their organs or representatives.

“The criminal liability is established when the offenders have acted by virtue of the following: 1. Power of representation; 2. Decision-making power; 3. Power of supervision.

The criminal liability of public institutions, companies, cooperatives, public or private entities or organisations with legal personality does not exclude the criminal liability of their representatives, those who hold leadership posts within them or their co-offenders and accomplices.”  

The Auditor General’s annual reports have  indicated that Government may not be realising value for money due to persistent cases of delayed and abandoned contracts in public entities, cases of idle assets and cases of government projects and facilities which are underutilised or operating below capacity.

This has, and continues to, cost Abanyarwanda trillions that could have been of immense benefit.

It was also noted in the report that there was a need to “set clear performance indicators, including both service delivery and financial management indicators, and regularly monitor performance to build a high performance culture. Where identified adequate training should be provided to staff to enhance their abilities to deliver.”

Given that projects are approved and monitored by people in leadership posts, they should be held accountable if they fail to ensure that they are completed within agreed time and cost. This will require their active participation in the development of effective performance indicators.

Those in charge of procurement should be held similarly accountable to ensure good value for money.

The penal code does not exempt those that are reckless, negligent or careless from being held criminally liable. Hence, due diligence will have to be a constant companion of leaders in public and private enterprises, government boards, districts and district hospitals.

 Failure to be diligent and ensure that they perform their work responsibly could lead to imprisonment up to 10 years.

The Auditor General also identified weaknesses in his audit of district hospitals including a failure by the boards of directors to review financial reports and budget execution, and a failure to monitor the implementation of external and internal auditor’s recommendations.

This appears to be boards missing in inaction, since they are not fulfilling their primary responsibility and exhibiting wanton negligence.

Well, they should be reminded that a punishable offence can be committed as a result of their negligence and heed to the call of due diligence in performing their duties. Those that are incompetent or negligent should decline offers to become members of boards because the consequences of their inaction could end up being a decade in prison.

The people of Rwanda deserve the effective management of their public funds and want corporate governance in public and private institutions to be strengthened. After all, private institutions have been facilitated by public funds that develop the indispensable social and physical infrastructure.

“Adequate oversight is required to hold management to account, demand results and to build a high performance, results-oriented culture amongst their staff in order for the organisations to deliver on the mandate and agreed performance targets.” This will result in greater profitability for the enterprises and prosperity for the people, a win-win situation.

There have been instances of leaders of cooperatives misallocating funds, meant for the members, to further their private projects, and private contractors who do not pay their employees for work done. 

This reckless and selfish approach to managing the funds and energy of others will be curtailed when the perpetrators are held accountable and forced to return what they have misappropriated and compensate those that they owe.

Article 83 states that “criminal liability is incurred by the offender, his/her co-offender or accomplices….” Article 34 affirms that “if a penalty is imposed in a criminal case, the court must order the restitution of embezzled, stolen or fraudulently obtained property.”

Therefore, unscrupulous leaders and greedy private contractors should beware that the path they tread only leads to perdition. They should realise, before they are forced to, that it is much more profitable to be diligent in your commitments to fellow beings.

 

The writer is a commentator based in Kigali.

The views expressed in this article are of the author.

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