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Kenewendo wants P1 billion FNB student fund audited

Specially Elected Member of Parliament, Bogolo Kenewendo has requested the Ministry of Tertiary Education, Research Science and Technology to conduct an audit on the suspicions Students Allowance Disbursement Account, operated by the First National Bank Botswana (FNBB).

From 2006 until 2017, the Ministry of Education and Skills Development, which has since been split into two, has failed to reconcile the Student Allowance Disbursement Account periodically, raising fears of losing public funds due to unaccountability. In its latest report, for 2015-2016 accounts, the PAC indicates that there is evidence that despite the large sums of money involved, there was no follow up on the part of the ministry officials to ensure that the monthly remittances to the bank are fully accounted for through periodic returns by the bank and reconciliations of those returns.



Government sponsored students in local tertiary institutions are paid their stipends through FNBB, one of the country’s leading commercial banks.  The procedure is that the funds are advanced to the bank monthly on the basis that after disbursements, the bank would submit a return of how the funds had been disbursed on a monthly basis.

“There were clear indications that the Accounting Officer had lost control of these accounts. For example, as at 31st March 2016, the account for these transactions had a balance of P1 122 852 010 and another related had a balance of P1 099 078 632, for which there were no explanations from the Accounting Officer,” states the report.

Kenewendo, who is also a member of the PAC this week in parliament pushed for details on the suspicious account with regards as to how long the FNBB has had a contract of disbursing allowances to Government sponsored students; the cost associated with the contract as well as the length of the contract and date for renewal.

The youngest MP also wanted to know the FNBB’s value proposition that led to them winning the tender; the system put in place to reconcile the remittances from the FNB Students’ Allowances Disbursements Account; the frequency of the accounts’ reconciliation; and
whether there have been any discrepancies with the account in the last five years. “If there was no reconciliation prior to this year, would we see an audit of the previous years because FNB has been running this account since 2006?” Kenewendo enquired.

According to Assistant Minister of Tertiary Education, Fidelis Molao, the contract of disbursing allowances to Government sponsored students was started in 2006 and all banks were invited for expression of interest for the student services and only FNBB responded, consequently it was awarded the contract. Since then, it has been renewed for FNBB until an invitation to tender was re-done in 2015. The current contract of disbursing allowances to Government sponsored students by the First National Bank Botswana came into effect on the 1st of January 2016.

“A tender was issued in 2015 and all the major banks in Botswana responded, there was an evaluation and FNB got the contract. So, it is due to come to an end very soon. We want to believe that another contract notice would be issued and have all the banks locally respond and then evaluation would be done and whoever wins would win the tender,” said Molao. Ministry of Tertiary Education is paying P99 000. 00 per month for the services of registering and opening students’ accounts under the appropriate account category and issuing students with ATM cards.

The length of the contract is for 36 months and is expected to terminate on the 31st December 2018 and can be considered for renewal. Prior to 2006, Standard Chartered was the service provider. “FNBB were the least costly and they also met all the required tender specifications,” Molao told parliament.

The Assistant Minister revealed to parliament that, following the realisation that the ministry had not been closely monitoring the account, a team of employees were set up to carry out the monthly reconciliation of the student allowances disbursement account. “The team ensures that they reconcile the funds requested and paid into the students account with the funds actually paid to the individual students. The aim is to ensure that unclaimed funds for whatever reason are paid back into the Government expenditure account rather than being left in the bank account,” he said.

“The reconciliation ensures that the bank account has a zero balance after each month’s payments. This will mean that the funds requested have been used for what they were requested for.” Molao said the accounts’ reconciliation was done on monthly basis, since this financial year (2017/2018). “It is not possible to indicate if any discrepancies occurred in the account in the last five years. This is because the reconciliation process for the account started in April this financial year,” he said, noting that the team is working on the financial years going backwards.

FNBB CHARGES STUDENTS SERVICE FEES   

Kenewendo has also questioned the payment of P99 000.00 per month to FNBB given the fact that the bank has been charging  students service fees, despite the Assistant Minister contending that the bank was not suppose to do so. “You [Asst Min Molao] said there are no service charges to these accounts. Students are paying for every transaction; maintenance costs every month. They are paying P1.00 per transaction from this account. Why are we saying there are no service charges? Why do we pay P99 000.00 if these costs remain transferred to the students?” questioned Kenewendo.

Kenewendo said the anomaly should be corrected to save students from paying the services fees, as the government is already paying that to FNBB. Molao expressed ignorance to the fact that students are charged for every transaction they make, promising that the ministry would follow up the issue and get it sorted, if there is that need.

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