Top budget managers put to task to end loss of funds in public contracts

Chief budget managers in public institutions should hone their skills and improve vigilance to ensure proper management of government contracts and prevent loss of public funds.
Kalihangabo speaks during the meeting in Kigali yesterday. Timothy Kisambira.
Kalihangabo speaks during the meeting in Kigali yesterday. Timothy Kisambira.

Chief budget managers in public institutions should hone their skills and improve vigilance to ensure proper management of government contracts and prevent loss of public funds.

The message was delivered yesterday by officials from the Ministry of Justice to over 40 chief budget managers from public institutions and districts (mostly permanent secretaries at ministries and district executive secretaries).

Participants follow proceedings. Timothy Kisambira 

They were hosted by the ministry to a workshop in Kigali that looked at how to best manage public contracts and recover state funds lost in poor management of the contracts.

The Minister for Justice and Attorney General, Johnston Busingye, warned the officials that the era of embezzling and mismanaging public funds is gone and encouraged them to nurture the culture of integrity.

“We want to be smart people with a good habit of efficiently managing public resources,” he said, explaining that Rwanda will soon make embezzlement of public funds a capital crime just the same way killing a person is.

As Busingye rooted for proper management of public funds, he said integrity is the key to making the country financially self-reliant and asked everyone to join in the fight against poor management of public resources.

“Let’s work together because no one can win this fight alone. Good management of public funds has enormous benefits,” the minister said.
The Permanent Secretary at the Ministry of Justice, Isabelle Kalihangabo, shared tips on how to successfully issue contracts for public works, including being diligent in checking documents and assessing contract applicants, as well as checking their performance guarantees and certificates of good completion.

“A public servant who is aware of or who is given information regarding the loss of state property or the loss that the state may suffer is required to take all necessary action to stop the loss,” she said.

Kalihangabo added that budget managers also need to adopt the practice of regularly recording their communications with contractors since documents on how they communicated can serve as important evidence in case of disagreements.

“When due diligence is well done, you can’t give a someone who is not qualified,” she said.

Contract management

Kalihangabo said the ministry organised the workshop because poor contract management skills among different managers is an issue that needs to be resolved.

Between 2013/14 and 2015/16 financial years, 98 contracts, worth Rwf95.67 billion, were either abandoned or significantly delayed, according to the AG’s report 2015/16.

Some 24 of those contracts, worth Rwf13.39 billion, were abandoned and contractors disappeared after receiving payments of Rwf5.62 billion.

“Our next step is to recover this money. Someone has to foot this bill. We have rules and regulations about how lost government funds are recovered,” Kalihangabo warned.

“We are going to ask you to follow up on those who caused these losses to pay back.”

The abandoned contracts were mostly in the areas of infrastructure, including water, energy and roads, health and agriculture.

With only half of about Rwf3 billion that the Government has won over the last four years against those who abused its funds already recovered, the government’s attorneys and legal advisors are under pressure to recover the remaining funds and prevent any further losses in the future.

Participants at the meeting indicated different challenges to the proper management of public contracts, including a complicated legal framework that guides recovery of lost public funds.

The Director-General of Special Guarantee Fund (SGF), Dr Joseph Nzabonikuza, wondered whether the Government can help facilitate the process to recover lost public resources.

“Are there new laws in the offing to make it easy for the Government to maybe force those who owe it money to pay up?” he asked.

Henry Kakooza, the Rwamagana District executive secretary, said the Government should train its own experts such as engineers to ensure that they have a better understanding of their field as they advise on how to handle contracts for public works.

“There is a challenge of engineers who are not qualified. There are things that need to be done at the policy level. Engineers need to be further trained so they can upgrade their skills,” he said.

The City of Kigali executive secretary, Didier Sagashya, agreed that training of experts is needed and advised that professional indemnity mechanisms are needed to ensure that private consultants’ mistakes are paid for by their own insurance.

“We are often accountable for consultants’ mistakes when we shouldn’t,” he said, recommending that the country encourages a mechanism for professional indemnity guarantees to cater for mishandled works by contractors.

The Government’s 14th National Leadership Retreat, held earlier this year, recommended streamlining how public contracts with private operators are drafted and managed, a resolution that has put Government’s lawyers and the Justice ministry under pressure to sort the matter out.