Public entities are increasingly spending billions of taxpayers’ money on idle assets, according to the new Auditor-General’s report.
This is one of the highlights of the 2015/16 AG report, which was presented by the Auditor-General Obadiah Biraro to a joint session of both chambers of Parliament yesterday.
The annual report, a culmination of 147 audits conducted in 139 entities – that used up to 85 per cent of the 2015/16 National Budget – shows that public entities were in possession of idle assets worth Rwf15.2 billion – some unused for years.
The figure is nearly twice as much as the value of idle assets found in public entities the previous year (Rwf7.9 billion).
“There’s an increasing trend of idle assets procured by public entities. During the audits, 92 cases of idle assets, worth Rwf15 billion were noted, compared to Rwf7 billion in last annual report (2014/15),” Biraro told Parliament.
The AG said his office established that 50 per cent of idle assets, worth Rwf5.8 billion, reported in previous annual report were still idle at the time of the latest audits, decrying the growing reluctance among officials to implement his office’s recommendations.
Most of these cases, the report says, are attributed to lack of proper needs assessment to inform their procurement.
“The result is procurement of items which were not required or procured before availability of the required buildings in which to install the equipment, while, in other cases, there were no proper maintenance plans to enable timely fixing of any breakdowns and repairs,” the report says.
Value for money
While the report generally points to a slight improvement in book-keeping across public entities, it raises concerns over growing cases of lack of value for money in public spending – in some cases due to persistent weaknesses in contract management.
The issue of idle assets, the report says, is more pronounced in the health, energy and water, agriculture, and education sectors, as well as districts.
It lists the top 20 entities and projects with majority of idle assets as Water and Sanitation Corporation (WASAC), University of Rwanda, Workforce Development Authority (WDA), Rwanda Correctional Service (RCS), Rwanda Agriculture Board (RAB), Rwanda Energy Group (REG)/Energy Utility Corporation Ltd (EUCL), Rwanda Education Board (REB) and the Ministry of Health.
The list also includes Ngororero, Rusizi, Kayonza, Nyamasheke, Rutsiro and Gatsibo districts, as well as several projects namely; WDA/SDP, REG/EARP, RDB/RCIPRW, MINAGRI/KWAMP, MINISANTE/Decentralisation programme, and RTDA/TSDP.
In the health sector, for instance, the ministry distributed idle medical equipment to different hospitals and health centres across the country worth Rwf2 billion.
It also cites health posts rehabilitated by the Ministry of Health, at a tune of Rwf16 million, and an incinerator at Mageragere in Kigali, worth Rwf736 million, that are not in use, as well as a CT Scan and oxygen plant at CHUB which were not functional.
At the Rwanda Biomedical Centre, equipment procured under RBC-SPIU for medicine quality control laboratory, worth Rwf666 million, was not yet in use after a long period of time, while laboratory equipment, worth Rwf9 million, distributed to Bugeshi and Nyundo health centres, were also still idle.
The report further cites telemedicine facilities, worth Rwf190 million, that lay idle.
In the agriculture sector, the AG discovered nearly Rwf2 billion worth of idle assets, including agricultural machinery, equipment and motorcycles.
At RAB, a hatchery system, worth Rwf71 million, is not operational due to lack of permanent power supply, while motorcycles worth Rwf92 million also lay idle in Kabuye workshop for almost one year.
The report says that agricultural machineries (potato harvesters for power tillers, walking type rice transplanters and combine harvester), worth Rwf50 million, that lay idle for almost seven years were in the process of being auctioned by the time of the latest audit.
Furthermore, the report cites cases of undistributed seeds, worth Rwf314 million, which were found rotting in RAB stores.
A seeds processing plant valued at Rwf226 million was also not operational at RAB due to the absence of spare parts, it says.
Procured under the Livestock Infrastructure Support Programme (LISP) scheme, equipment for milk collection centres at Mukarange, Ngarama, Rwimiyaga and Karushunga, worth Rwf88 million, were idle for two years, the AG report adds.
It also puts the spotlight on Kirehe Community-Based Watershed Management Project (KWAMP), under which a dam worth Rwf1 billion, was set up in Mahama Sector but had been idle for almost four years.
“At the time of the audit in September 2016, there was no water in the dam for the irrigation, reason being lack of precipitation,” the report says, adding that, in 2014, the provisional handover of the dam was done without testing it since it had no water in it.
The AG also pointed at Rwf43 million worth of agricultural materials (recycling and water pumps, fan tray and fire hose reel) procured by the National Agriculture Exports Board (NAEB), which lay idle for two years.
Energy and water
In the energy and water sector, the report cites unutilised items worth Rwf1.1 billion, that were obsolete, dormant or slow moving at WASAC. Two compact water treatment plants of 100m3/h capacity each, worth Rwf1.7 billion, installed at Cyondo in Nyagatare District, were also idle for one year, it adds.
Under the National Rural Drinking Water Supply and Sanitation Programme (PNEAR), ECOSAN type sanitation blocks worth Rwf45 million constructed in different schools in Musanze District had not been used for four years, it adds.
At Rwanda Energy Group, the report says, there was a case of unutilised stock items worth Rwf1.5 billion, which were obsolete, dormant and slow moving, thus idle stock.
At Energy Development Corporation Limited (EDCL, the report says there were water tanks meant for Karisimbi geothermal drilling project, valued at Rwf2.7 billion that lay idle for three years.
In education sector, the report says various equipment, materials, software, tractors and motorcycles worth Rwf1.2 billion were found idle at REB, University of Rwanda and WDA. The report says the AG office could not establish the value of some of the materials.
At WDA, the report says, there were idle equipment, valued at Rwf446 million, at Remera Hospitality Centre, IPRC-South and vocational and technical centres; a steel bender machine at Rwabuye VTC; and housekeeping rooms equipment.
Some of this equipment had been lying idle for three years, the report says.
Under the Skills Development Project (SDP), various equipment purchased by WDA for Remera Hospitality Centre, carpentry machine for Gishari Integrated School, electric gas cookers for IPRC-South, worth Rwf604 million, were idle and not installed, the AG report adds.
At the University of Rwanda, TV production studio equipment worth Rwf122 million had not been installed for about 15 months.
The report also says that REB had distributed 583 XO laptops (one laptop per child/OLPC), worth Rwf100 million, to different schools that were unused.
Twelve IT applications at UR, REB and RBC were either idle or not achieving their intended purpose, the AG said.
The report further exposes billions of Rwandan Francs worth of transactions and projects that resulted in idle assets in different districts.
Unsupported, wasteful spending
Meanwhile, the AG report says unsupported expenditure during the 2015/16 fiscal year totaled to about Rwf7 billion, while partially supported expenditure amounted to Rwf7.4 billion.
The report says that 24 of contracts, worth Rwf13 billion, were abandoned with contractors disappearing after they had been paid Rwf5.62 billion.
It cites WASAC, REG (EDCL), RBC, RTDA, WDA, UR, RAB, MINAGRI and MINISANTE as well as Rusizi, Bugesera, Muhanga, Nyamasheke, Rutsiro and Rubavu districts among the entities with most delayed or abandoned contracts during the period under review.
The unsupported expenditure was incurred mainly by 12 entities, including REG, WASAC, University of Rwanda, Post-Harvest and Agribusiness Support Project (PASP), Ministry of Health (Decentralisation services), and University Teaching Hospital of Butare (CHUB).
Others include Gatsibo, Gicumbi and Musanze districts.
Overall, the report says, the level of wasteful expenditure resulting from diversion of public resources and unsupported transactions had marginally reduced from Rwf18 billion in 2014/15 to Rwf17 billion in 2015/16.
Under the aspect of wasteful expenditure (which amounted to Rwf1.6 billion), most of the expenditure was incurred by University of Rwanda (Rwf240 million), NAEB (Rwf178 million), G4CTAP/MINICOM (Rwf177 million), CHUB (Rwf111.6 million), REG (Rwf88 million), and RAB (Rwf56 million), the report says.
It shows that 14 districts also incurred wasteful expenditure amounting to Rwf227 million. Most of the wasteful expenditure was incurred on court fines and claims for damages, it explains.
Accountability red flags
The Auditor-General’s report also cites cases of fraud, revealing that over Rwf900 million was yet to be recovered at the time of the audits.
More than Rwf300 million in stolen assets was also yet to be recovered, while public entities were yet to recover more than Rwf224 million in funds used for personal gain and not accounted for.
The report says that Rwf1 billion worth of materials had been diverted and not reached the intended beneficiaries by the time of the audits, while public entities had paid ineligible staff benefits and allowances worth Rwf700 million.
University of Rwanda and WDA incurred unauthorised expenditure worth Rwf590 million in top up allowances and salary increments paid to staff, the report shows.
Of the Rwf906 million lost in fraudulent expenditure, over Rwf835 million was attributable to four entities, namely WDA, University of Rwanda (UR), RBC and REG/EARP project, it adds.
The report also cites a case at University of Rwanda, where Rwf170 million in consultancy fees was paid by the Ministry of Health to a wrong payee and into a wrong bank account.
“The payee on the payment instructions from the Ministry of Health was different from that on the invoices received from the University of Rwanda,” the report says, adding that Police had taken up the matter.
The AG findings also point to continued irregularities in public procurement, and raise red flags over wanting accountability practices at Government Business Enterprises (GBEs) and Boards.
“Generally, assets managed by these entities are at risk of loss due to lack of requisite accountability,” AG Biraro warned.
They include WASAC, REG (EUCL and EDCL), RAB, RDB, REB, RBC, RTDA, WDA, UR, RGB, RRA, RURA, RCS and NAEB.
He also expressed concerns over accountability for EWSA assets after the institution morphed into separate entities.
“Since the handover of assets of former EWSA to REG and WASAC, management of these entities did not prepare any reconciliation between fixed assets received and those allocated to them as per the Prime Minister’s Order. There is no proper accountability for all EWSA assets after separation,” the AG said.
Idle district assets
Out of 78 reported cases of idle assets, districts had 19 idle assets with value worth Rwf2 billion.
These are mainly IT equipment, unutilised administrative buildings
- Gatsibo district: a guest house and related assets worth Rwf1 billion were not yet put in use for almost one year.
- Nyamasheke district: a Mortuary Block at Kibogora hospital worth Rwf50 million was not put in use for six months.
- Gicumbi district: veterinary laboratory and equipment worth Rwf78 million not put in use since November 12, 2008
- Kayonza district: administrative building worth Rwf802 million was idle
- Ngororero: A cassava plant worth Rwf768 million has been idle since 2012. This is mainly due to machines supplied which were not meeting the standards
- Rusizi: a dairy plant worth Rwf23 million and a brickyard worth Rwf79 million were not put to use by the district.
- Rutsiro: Greenhouse not put to use
- Gakenke: An administrative block not put to use since 2006.
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