Auditor General (AG), Pulane Letebele is a man really concerned by the way monies in 25 government special funds are being used. He observes that the money is spent recklessly on un-intended purposes ultimately leading to the abuse of reserves which could have supported the intended ailments.
Among the list of the abused Funds is the National Electrification Fund (NEF) of 2010 which has not been reconciled as per the order of the Auditor General from the previous year. In the year under review, the failure to submit the accounts within the prescribed time limits had persisted. “I consider this state of affairs highly unsatisfactory as it denies the Public Accounts Committee (PAC) the opportunity to examine the audited accounts of the Fund on a timely basis, in accordance with the requirements of the Standing Orders of the National Assembly,” the concerned Auditor General laments.
Section 12 of the Fund, according to Letebele, provides that the accounts of the Fund shall within 3 months after the end of the financial year, be audited by an independent auditor appointed by the Fund Management Committee; and further that not later than six months after the close of the financial year, those accounts shall be submitted to the AG office- this never happened.
For the third year running, the Auditor General says accounts of the National Petroleum Fund (NPF) have not been submitted to his office, as the appointed auditor. “The Department of Energy Affairs, by letter dated September 2018, said they were in the process of finalizing the financial statements for the year ended 31 March 2018, and that they hoped to complete by October 2018. At the time of writing this report, the accounts had still not been submitted,” AG said. NPF made headlines last year when P250 million was taken from the fund for a parallel activities, even up to now the monies are yet to be fully paid back.
Tobacco and Tobacco Products Fund (TTPF) is another Fund used in a similar fashion and this concerns Letebele, who has since confronted the relevant authorities on the matter. The major points raised in the management letter related to; “The use of Fund money on the treatment of ailments which were unrelated to the purposes of the Fund, such as medical charges for oncology, neurology, cardiology and fractures.”
Further to the issue, the Permanent Secretary in the Ministry of Health and Wellness, Ruth Maphorisa has been asked about the delays in the appointment of the Tobacco and Tobacco Products Levy Implementation Committee during the period under review. The Committee is responsible for overseeing the administration and management of the Fund.
In the year under review the major expenditure for the National Disaster Relief Fund (NDRF) was for the purchase of tents to the value of P5 234 780. Out of this amount, supporting documents for transactions to the tune of P2 326 700 could not be produced for verification purposes. “Consequently, this expenditure is unvouched,” the Auditor General said.
“The over-arching findings related to lack of proper accounting and accounting records, resulting in poor monitoring of the issues of these items. There was no system of follow up on tents issued to beneficiaries which would ensure the retrieval into stock of tents that were no longer required. Proper management of these requisites would suggest that purchases at any time should take account of the existing items in stock available for use”.
The Road Traffic Fines Fund (RTFF) of 2009 with specific purpose of purchasing and maintaining traffic-offence-detecting devices and for complementing law enforcement measures of curbing road traffic offences is also giving the Auditor General sleepless nights. In the year under review the fines collected totaled P95 621 813.
A heavy portion of these funds in the reserve have been applied to the general purposes of the Police Service beyond those contemplated in the Fund Order. “As I have repeatedly commented in the past, in my view, the Fund has become an additional or alternative source of funding for the recurrent expenditures of the Botswana Police Service. A number of vehicles were purchased from the Fund for the Transport and Telecommunications Branch, instead of using P32 057 580 appropriated for this purpose in the recurrent expenditure estimates, out of which only P1 387 301 had been used,” observes Letebele.
Public Debt Service Fund (PDSF) had accumulated P2 231 596 465 representing the value of investments made from the Fund. P900 566 097 as loans was made to the BCL liquidator, which could not be verified by reference to the loan agreement spelling out the terms of the loans. Botswana Meat Commission (BMC) also got a loan amounting to P354 000 000 from the fund. “In the case of loans made from the public revenues, Government has issued a directive that they be converted to equity, because of the Commission’s continued liquidity constraints”.
Botswana Development Corporation has also gotten a share of P189 500 000 which was not clearly stated in the statement. “The loan amount to the Corporation for the construction of the GICC project is P189 500 000, and not P89 500 000 as reflected in the Statement” highlights the AG. Consequently, the AG says the statement shows an outstanding balance of P58 039 319 as at 31 March 2018, instead of P158 131 191 as per the loan repayment schedule as on that date.
Government is currently sitting on 4 400 vacant posts that remain unfilled in the civil service. This is notwithstanding the high unemployment rate in Botswana which has been exacerbated by the recent outbreak of the deadly COVID-19 pandemic.
Just before the burst of COVID-19, official data released by Statistics Botswana in January 2020, indicate that unemployment in Botswana has increased from 17.6 percent three years ago to 20.7 percent. “Unemployment rate went up by 3.1 percentage between the two periods, from 17.6 to 20.7 percent,” statistics point out.
Leading commercial bank, First National Bank Botswana (FNBB), expects the central bank to sharpen its monetary policy knife and cut the Bank Rate twice in the last quarter of 2020.
The bank expects a 25 basis point (bps) in the beginning of the last quarter, which is next month, and another shed by the same bps in December, making a total of 50 bps cut in the last quarter. According to the bank’s researchers, the central bank is now holding on to 4.25 percent for the time being pending for more informed data on the economic climate.
An audit of the accounts and records for the supply of food rations to the institutions in the Northern Region for the financial year-ended 31 March 2019 was carried out. According to Auditor General’s report and observations, there are weaknesses and shortcomings that were somehow addressed to the Accounting Officer for comments.
Auditor General, Pulane Letebele indicated on the report that, across all depots in the region that there had been instances where food items were short for periods ranging from 1 to 7 months in the institutions for a variety of reasons, including absence of regular contracts and supplier failures. The success of this programme is dependent on regular and reliable availability of the supplies to achieve its objective, the report said.
There would be instances where food items were returned from the feeding centers to the depots for reasons of spoilage or any other cause. In these cases, instances had been noted where these returns were not supported by any documentation, which could lead to these items being lost without trace.
The report further stressed that large quantities of various food items valued at over P772 thousand from different depots were damaged by rodents, and written off.Included in the write off were 13 538 (340ml) cartons of milk valued at P75 745. In this connection, the Auditor General says it is important that the warehouses be maintained to a standard where they would not be infested by rodents and other pests.
Still in the Northern region, the report noted that there is an outstanding matter relating to the supply of stewed steak (283×3.1kg cans) to the Maun depot which was allegedly defective. The steak had been supplied by Botswana Meat Commission to the depot in November 2016.
In March 2017 part of the consignment was reported to the supplier as defective, and was to be replaced. Even as there was no agreement reached between the parties regarding replacement, in 51 October 2018 the items in question were disposed of by destruction. This disposal represented a loss as the whole consignment had been paid for, according to the report.
“In my view, the loss resulted directly from failure by the depot managers to deal with the matter immediately upon receipt of the consignment and detection of the defects. Audit inspections during visits to Selibe Phikwe, Maun, Shakawe, Ghanzi and Francistown depots had raised a number of observations on points of detail related to the maintenance of records, reconciliations of stocks and related matters, which I drew to the attention of the Accounting Officer for comments,” Letebele said in her report.
In the Southern region, a scrutiny of the records for the control of stocks of food items in the Southern Region had indicated intermittent shortages of the various items, principally Tsabana, Malutu, Sunflower Oil and Milk which was mainly due to absence of subsisting contracts for the supply of these items.
“The contract for the supply of Tsabana to all depots expired in September 2018 and was not replaced by a substantive contract. The supplier contracts for these stocks should be so managed that the expiry of one contract is immediately followed by the commencement of the next.”
Suppliers who had been contracted to supply foodstuffs had failed to do so and no timely action had been taken to redress the situation to ensure continuity of supply of the food items, the report noted.
In one case, the report highlighted that the supplier was to manufacture and supply 1 136 metric tonnes of Malutu for a 4-months period from March 2019 to June 2019, but had been unable to honour the obligation. The situation was relieved by inter-depot transfers, at additional cost in transportation and subsistence expenses.
In another case, the contract was for the supply of Sunflower Oil to Mabutsane, where the supplier had also failed to deliver. Examination of the Molepolole depot Food Issues Register had indicated a number of instances where food items consigned to the various feeding centres had been returned for a variety of reasons, including food item available; no storage space; and in other cases the whole consignments were returned, and reasons not stated.
This is an indication of lack of proper management and monitoring of the affairs of the depot, which could result in losses from frequent movements of the food items concerned.The maintenance of accounting records in the region, typically in Letlhakeng, Tsabong, and Mabutsane was less than satisfactory, according to Auditor General’s report.
In these depots a number of instances had been noted where receipts and issues had not been recorded over long periods, resulting in incorrect balances reflected in the accounting records. This is a serious weakness which could lead to or result in losses without trace or detection, and is a contravention of Supplies Regulations and Procedures, Letebele said.
Similarly, consignments of a total of 892 bags of Malutu and 3 bags of beans from Tsabong depot to different feeding centres had not been received in those centres, and are considered lost. These are also not reflected in the Statement of Losses in the Annual Statements of Accounts for the same periods.