Transparency International Rwanda (TI-RW) has urged districts to recruit experienced staff for Non-Budget Agencies (NBAs) to fix weaknesses in public finance management.
The call was made Wednesday as the anti-corruption watchdog unveiled its latest analysis of the Auditor General’s report of June 30, 2016.
The NBAs are entities such as schools, health facilities and grassroots administrative organs which do not get direct budget allotments from the central government but rather through district funding.
Ensuring close collaboration between district staff and councilors and providing training to relevant staff on accounting software, contract management as well as laws and procedures are some of the recommendations from the watchdog.
“The NBAs and districts should work closely and reconcile the discrepancies between the grant and transfers from district to subsidiary entities,” said Apollinaire Mupiganyi, the executive-director of Transparency International Rwanda.
Mupiganyi noted that unsupported expenditure almost doubled mainly due to cases in public procurement and in investments made by districts.
“District councilors should find an avenue of resolving the issues of shares subscribed for commitment to the province investment corporation, which is among the important contributors of unsupported expenditure,” he added.
He said cooperation between districts and the tax collector is also crucial to allow the former access to the database of taxpayers and thus reduce weaknesses in revenue collection, mostly originating from insufficient information on local tax collection.
The watchdog called for swift completion of the process to transfer the management of the Community Based Health Insurance (Mutuelle de Santé) from districts to Rwanda Social Security Board.
This, they said, should be addressed to reduce weaknesses related to poor bookkeeping as some bank accounts were not handed over to the security board and are still managed by districts.
Idle assets or funds, he said, became a big issue for the financial year under review and, as such, districts should make every effort to improve their planning and ensure that feasibility studies are available before tenders are issued, especially those for public works.
TI-RW’s fifth edition of analysis of the Office of the Auditor General’s audit reports of all districts and the City of Kigali takes into account the audit of reports of the fiscal year 2015-16.
The report indicates that the total amount of all expenditure weaknesses has more than tripled, from Rwf27.26 billion in the financial year 2014-15 to 99.57 billion in the fiscal year 2015-16.
“That’s a staggering increase of 245 per cent. In the same period, districts’ expenditure increased by 12.4 per cent,” he said.
Increase in expenditure related weaknesses is due to unsupported expenditure, he said.
Four per cent of these weaknesses, the analysis showed, are related to expenditures, such as unsupported, wasteful, fraudulent or overstated expenditures. The others – 96 per cent – comprise non-expenditure related weaknesses such as poor bookkeeping.
Cross-cutting issues affecting districts’ public finance management include irregularities in public procurement amounting to Rwf24.4 billion. The latter is reported to have been almost six times as much as in the previous financial year.
Mupiganyi said almost 45 per cent – Rwf10.87 billion – of the total amount of procurement related losses are due to irregularities in public tenders. More than half of these – Rwf5.51 billion –are due to tenders awarded outside the district procurement plan.
Another 15 per cent is related to serious delays in construction of grassroots public infrastructure whereby Mupiganyi pointed to cases of construction works amounting to Rwf14.39 billion being delayed, and projects amounting to Rwf582 million having been entirely abandoned before completion.
The Chairperson of the Parliament’s Public Accounts Committee, MP Juvenal Nkusi, stressed that all public institutions must collaborate to ensure that lost taxpayers’ money is recovered and that reporting on public finance management should be specific on culprits unlike in the past when emphasis was put on “collective responsibility”.
“One thing is very clear; none of the entities and people implicated has ever come forward and said that what is in the Auditor General’s report is false,” he noted.