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Accountants’ oversight body in questionable deals

Skeletons have started to tumble out of the Botswana Accountancy Oversight Authority (BAOA) closet, as the newly established regulator tasked with reviewing the public sector audits is embroiled in corruption and flouting of procurement procedures practices, Weekend Post has been informed.

 
According to highly placed sources within BAOA, this came to light recently when there was a tender in relation to partitioning of their new offices at Central Business District (CBD). It is understood that the said tender was flouted resulting in other companies querying the outcomes of the tendering processes. This is believed to have brought into question whether BAOA is complying with set tendering processes. Further, it came to light that the organisation was operating without a procurement officer. According to an immaculate source close to developments, this has resulted in tenders being awarded willy-nilly.

“Everyone who wants a tender is allocated willy-nilly. An Information Technologist (IT specialist) is currently acting as a stop gap procurement officer. And it appears they are not ready to hire a qualified procurement officer as they may be benefiting out of the deal,” the source told this publication.   She also added: “there are also many unanswered questions hovering of how the tender of partitioning the new office was handled. “It is understood that, as such the same companies which are linked to the authority’s executives are dominant in providing services such as catering to the organization from time to time.

However when queried about the concern, BAOA Chief Executive Officer (CEO) Duncan Majinda downplayed the scenario saying they came up with Procurement and Tender procedures approved by the Board and vetted by PPADB and the procedures are being followed.  “Any non-compliance is enforced accordingly through the normal enforcement procedures of the Authority.” The office is undergoing a new partitioning exercise which has been dragging on for months now; meanwhile the organization is occupying another office and paying high rental fees.

In essence, this means the authority is paying rental for both offices, the one they are occupying at Finance Park and the one under renovation at the CBD. According to sources, the CBD office is BAOA’s new office and they should have already moved in by now. According to the minutes of the last recent meeting the organisation held, passed to this publication, the Director of Finance and Administration reported that the Authority had been occupying the current offices (in Finance Park) for the past four and a half years despite having endured problems such as being stuck in lifts; air conditioners not working and awful rest room smells.

“He reported that the current lease would be coming to an end in December 2017 but with the approval of the Board, the Authority has been able to secure a place in the CBD, behind Masa hotel for its new offices. He stated that if everything goes according to plan some employees would be moving by mid-June 2017 and that by end of June 2017 all employees would have vacated the current premises.” The BAOA CEO played his cards close to his chest when questioned about the costly exercise while falling short of confirming it.

Although they have been renting both buildings for long now, he said that BAOA is only renting only one office at Finance Park but that “we will be moving to Central Business District (CBD) at the end of September 2017”. He added that “the offices at CBD are being prepared for occupation.  As the new building does not belong to BAOA, the costs of partitioning being incurred are a capital cost intended to bring the office to the condition that it can be occupied. Because of the requirements of the City Council and the tendering processes involved this takes a bit of time.”    

Information further reaching Weekend Post suggests that the authority has also been spending irresponsibly by “leasing” a printer for close to 4 years which raises questions of financial management and acumen. The Toshiba printer is estimated to cost P58 000 – the amount that they easily surpassed while they were hiring it. At the moment this publication can confirm that the authority has since bought a new printer last week replacing the one which has been rented, despite costs already incurred while leasing the Toshiba printer.

When justifying the spending, Majinda said a decision to lease or rent any asset in an organization is a function of many variables including availability of funds at the time to make a cash purchase. “Most organizations prefer leasing to outright purchase so it is not a bad thing to lease,” he said.For BAOA, Majinda revealed that with cash savings from the past, it has become possible to acquire some assets for cash this year. “It is important to clarify at this stage that the Authority reviews its business decisions all the time to ensure their continued relevance and business suitability.”

Strong issues of Nepotism and favouritism at BAOA

While Minister of Finance and Economic Planning Kenneth Matambo appointed the Chief Executive Officer (CEO) Majinda to the lucrative post, other Executives’ portfolios are said to be marred with controversies of allegations of nepotism and favouritism.
In the web of nepotism and preferential treatment of staff members, it is alleged that the CEO is a long time friend to the Director of Finance and Administration, Limited Nkani. The IT Manager, who acts as a procurement officer, is also said to be linked to one of the senior managers and that they have previously worked together before joining BAOA.

Insiders say three Accountants were poached from Delloitte, and most of the staff employed are also said to be having a background of association (with each other) somehow. “The CEO and PA to CEO as well as an Accountant are all from Botswana Institute of Chartered Accountants (BICA),” the source highlighted.      

Ex-DIS officer bullying staff members

An ex Directorate of Intelligence and Security Services (DISS) officer who is now a Human Resource Manager at the BAOA (names withheld), is said to be maltreating staff members. It is understood that she comes with cases hanging on her head from her previous employer, DISS. “In the web of associates she also came to BAOA through the Director of Finance and Administration.” While at DIS, sources at the BAOA said she left many cases unresolved involving millions as back pays for staff. “She intimidates staff members. She boasts of how she hires and fires staff members,” the source alleged.  

That notwithstanding, Majinda told this publication that the authority is not aware of any nepotism and favouritism in human resource issues. “The Authority condemns such practices in the strongest possible sense and if it exists, as you allege, it would be uprooted at the earliest notification,” he emphasized.  

Salary structure questionable

According insiders, there is also no salary structure and the top executive management gets lucrative salaries while the lower band gets very low salaries. In terms of the salaries, some staff members with Association of Accounting Technicians (AAT) qualification are said to be getting less than an employee with Association of Chartered Certified Accountants (ACCA).  In addition salary bands of drivers are said to be almost equivalent to qualified accountants who are employed on temporary basis.

However the BAOA CEO said they have gone through an elaborate salary grading exercise approved by experts (Tsa Badiri) and based on the Hay Grading System.  Every position at BAOA, he added, has been graded and hay points have been attached which determine the positioning of individuals based on their skills and expertise. “All entrants are scrutinized and placed accordingly in their respective grades and promotions then follow in the normal course of events.” According to Majinda the Authority is a parastatal and as such complies with Government policy on salaries and wages.

“The Authority’s salary structure is tagged to the Government salaries and was appropriately approved. Allowances are paid when applicable and no staff is disadvantaged. A salary structure is, therefore, available and applies to all members of staff,” he explained.  

Anti-media tactics at organisation

The Public Relations Unit is said to be placed under the auspices of the HR department and not as an independent entity – an anomaly which staff also make an issue with. The authority is said to have censored the staff members from engaging with the media or leaking information that may help the organisation with governance and transparency issues. To buttress the speculation, this week upon Weekend Post inquiries on the state of affairs at the organisation, the management moved swiftly to induce staff members to sign Secrecy forms to compel them not to leak information.

The secrecy clause which has also been passed to this publication states that: “all information obtained during the course of employment with the Authority is confidential, and the strictest secrecy shall be observed by a staff member in regard to confidential information acquired during the course of his duties. A staff member shall not communicate or allow being communicated to any un-authorized person, any information made available to them in their capacity as staff members of the authority unless instructed to do so by the authority’s management, or a court of law.”

It continues: “any breach in terms of this section shall be treated as a serious offence and a staff member concerned is liable for dismissal without notice (summary dismissal), and in addition may be charged with an offence in terms of the Employment Act.” In addition, following this publication’s inquiries (which they later responded to), the organization also re-scheduled a planned staff meeting at the eleventh hour which was to address some staff grievances.

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DIS blasted for cruelty – UN report

26th July 2022
DIS BOSS: Magosi

Botswana has made improvements on preventing and ending arbitrary deprivation of liberty, but significant challenges remain in further developing and implementing a legal framework, the UN Working Group on Arbitrary Detention said at the end of a visit recently.

Head of the delegation, Elina Steinerte, appreciated the transparency of Botswana for opening her doors to them. Having had full and unimpeded access and visited 19 places of deprivation of liberty and confidentiality interviewing over 100 persons deprived of their liberty.

She mentioned “We commend Botswana for its openness in inviting the Working Group to conduct this visit which is the first visit of the Working Group to the Southern African region in over a decade. This is a further extension of the commitment to uphold international human rights obligations undertaken by Botswana through its ratification of international human rights treaties.”

Another good act Botswana has been praised for is the remission of sentences. Steinerte echoed that the Prisons Act grants remission of one third of the sentence to anyone who has been imprisoned for more than one month unless the person has been sentenced to life imprisonment or detained at the President’s Pleasure or if the remission would result in the discharge of any prisoner before serving a term of imprisonment of one month.

On the other side; The Group received testimonies about the police using excessive force, including beatings, electrocution, and suffocation of suspects to extract confessions. Of which when the suspects raised the matter with the magistrates, medical examinations would be ordered but often not carried out and the consideration of cases would proceed.

“The Group recall that any such treatment may amount to torture and ill-treatment absolutely prohibited in international law and also lead to arbitrary detention. Judicial authorities must ensure that the Government has met its obligation of demonstrating that confessions were given without coercion, including through any direct or indirect physical or undue psychological pressure. Judges should consider inadmissible any statement obtained through torture or ill-treatment and should order prompt and effective investigations into such allegations,” said Steinerte.

One of the group’s main concern was the DIS held suspects for over 48 hours for interviews. Established under the Intelligence and Security Service Act, the Directorate of Intelligence and Security (DIS) has powers to arrest with or without a warrant.

The group said the “DIS usually requests individuals to come in for an interview and has no powers to detain anyone beyond 48 hours; any overnight detention would take place in regular police stations.”

The Group was able to visit the DIS facilities in Sebele and received numerous testimonies from persons who have been taken there for interviewing, making it evident that individuals can be detained in the facility even if the detention does not last more than few hours.

Moreover, while arrest without a warrant is permissible only when there is a reasonable suspicion of a crime being committed, the evidence received indicates that arrests without a warrant are a rule rather than an exception, in contravention to article 9 of the Covenant.

Even short periods of detention constitute deprivation of liberty when a person is not free to leave at will and in all those instances when safeguards against arbitrary detention are violated, also such short periods may amount to arbitrary deprivation of liberty.

The group also learned of instances when persons were taken to DIS for interviewing without being given the possibility to notify their next of kin and that while individuals are allowed to consult their lawyers prior to being interviewed, lawyers are not allowed to be present during the interviews.

The UN Working Group on Arbitrary Detention mentioned they will continue engaging in the constructive dialogue with the Government of Botswana over the following months while they determine their final conclusions in relation to the country visit.

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Stan Chart halts civil servants property loan facility

26th July 2022
Stan-Chart

Standard Chartered Bank Botswana (SCBB) has informed the government that it will not be accepting new loan applications for the Government Employees Motor Vehicle and Residential Property Advance Scheme (GEMVAS and LAMVAS) facility.

This emerges in a correspondence between Acting Permanent Secretary in the Ministry of Finance Boniface Mphetlhe and some government departments. In a letter he wrote recently to government departments informing them of the decision, Mphetlhe indicated that the Ministry received a request from the Bank to consider reviewing GEMVAS and LAMVAS agreement.

He said: “In summary SCBB requested the following; Government should consider reviewing GEMVAS and LAMVAS interest rate from prime plus 0.5% to prime plus 2%.” The Bank indicated that the review should be both for existing GEMVAS and LAMVAS clients and potential customers going forward.

Mphetlhe said the Bank informed the Ministry that the current GEMVAS and LAMVAS interest rate structure results into them making losses, “as the cost of loa disbursements is higher that their end collections.”

He said it also requested that the loan tenure for the residential property loans to be increased from 20 to 25 years and the loan tenure for new motor vehicles loans to be increased from 60 months to 72 months.

Mphetlhe indicated that the Bank’s request has been duly forwarded to the Directorate of Public Service Management for consideration, since GEMVAS and LAMVAS is a Condition of Service Scheme. He saidthe Bank did also inform the Ministry that if the matter is not resolved by the 6th June, 2022, they would cease receipt of new GEMVAS and LAMVAS loan applications.

“A follow up virtual meeting was held to discuss their resolution and SCB did confirm that they will not be accepting any new loans from GEMVAS and LAMVAS. The decision includes top-up advances,” said Mphetlhe. He advised civil servants to consider applying for loans from other banks.

In a letter addressed to the Ministry, SCBB Chief Executive Officer Mpho Masupe informed theministry that, “Reference is made to your letter dated 18th March 2022 wherein the Ministry had indicated that feedback to our proposal on the above subject is being sought.”

In thesame letter dated 10 May 2022, Masupe stated that the Bank was requesting for an update on the Ministry’s engagements with the relevant stakeholder (Directorate of Public Service Management) and provide an indicative timeline for conclusion.

He said the “SCBB informs the Ministry of its intention to cease issuance of new loans to applicants from 6th June 2022 in absence of any feedback on the matter and closure of the discussions between the two parties.”  Previously, Masupe had also had requested the Ministry to consider a review of clause 3 of the agreement which speaks to the interest rate charged on the facilities.

Masupe indicated in the letter dated 21 December 2021 that although all the Banks in the market had signed a similar agreement, subject to amendments that each may have requested. “We would like to suggest that our review be considered individually as opposed to being an industry position as we are cognisant of the requirements of section 25 of the Competition Act of 2018 which discourages fixing of pricing set for consumers,” he said.

He added that,“In this way,clients would still have the opportunity to shop around for more favourable pricing and the other Banks, may if they wish to, similarly, individually approach your office for a review of their pricing to the extent that they deem suitable for their respective organisations.”

Masupe also stated that: “On the issue of our request for the revision of the Interest Rate, we kindly request for an increase from the current rate of prime plus 0.5% to prime plus 2%, with no other increases during the loan period.” The Bank CEO said the rationale for the request to review pricing is due to the current construct of the GEMVAS scheme which is currently structured in a way that is resulting in the Bank making a loss.

“The greater part of the GEMVAS portfolio is the mortgage boo which constitutes 40% of the Bank’s total mortgage portfolio,” said Masupe. He saidthe losses that the Bank is incurring are as a result of the legacy pricing of prime plus 0% as the 1995 agreement which a slight increase in the August 2018 agreement to prime plus 0.5%.

“With this pricing, the GEMVAS portfolio has not been profitable to the Bank, causing distress and impeding its ability to continue to support government employees to buy houses and cars. The portfolio is currently priced at 5.25%,” he said.  Masupe said the performance of both the GEMVAS home loan and auto loan portfolios in terms of profitability have become unsustainable for the Bank.

Healso said, when the agreement was signed in August 2018, the prime lending rate was 6.75% which made the pricing in effect at the time sufficient from a profitable perspective. “It has since dropped by a total 1.5%. The funds that are loaned to customers are sourced at a high rate, which now leaves the Bank with marginal profits on the portfolio before factoring in other operational expenses associated with administration of the scheme and after sales care of the portfolio,” said the CEO.

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Botswana ranked 129 in female MPs representation

26th July 2022
Minister of Finance & Economic Development Peggy Serame

The Global Gender Gap Index, a report published by the World Economic Forum annually, has indicated that Botswana is among countries that fare badly when it comes to representation of women in legislative bodies.

The latest Global Gender Gap Index, published last week, benchmarks the current state and evolution of gender parity across four key dimensions (Economic Participation and Opportunity, Educational Attainment, Health and Survival, and Political Empowerment). It is the longest-standing index which tracks progress towards closing these gaps over time since its inception in 2006.

This year, the Global Gender Gap Index benchmarked 146 countries. Of these, a subset of 102 countries have been represented in every edition of the index since 2006, further providing a large constant sample for time series analysis.

Botswana ranks number 66 overall (out of 146 countries), with good rankings in most of the pillars. Botswana ranks 1st in Health and Survival, 7th in the Economic Participation and Opportunity, 22nd in Educational Attainment, and 129th in Political Empowerment.

The Global Gender Gap Index measures scores on a 0 to 100 scale and scores can be interpreted as the distance covered towards parity (i.e. the percentage of the gender gap that has been closed). The cross-country comparisons aim to support the identification of the most effective policies to close gender gaps.

The Economic Participation and Opportunity sub-index contains three concepts: the participation gap, the remuneration gap and the advancement gap. The participation gap is captured using the difference between women and men in labour-force participation rates. The remuneration gap is captured through a hard data indicator (ratio of estimated female-to-male earned income) and a qualitative indicator gathered through the World Economic Forum’s annual Executive Opinion Survey (wage equality for similar work).

Finally, the gap between the advancement of women and men is captured through two hard data statistics (the ratio of women to men among legislators, senior officials and managers, and the ratio of women to men among technical and professional workers).

The Educational Attainment sub-index captures the gap between women’s and men’s current access to education through the enrolment ratios of women to men in primary-, secondary- and tertiary-level education. A longer-term view of the country’s ability to educate women and men in equal numbers is captured through the ratio of women’s literacy rate to men’s literacy rate.

Health and Survival sub-index provides an overview of the differences between women’s and men’s health using two indicators. The first is the sex ratio at birth, which aims specifically to capture the phenomenon of “missing women”, prevalent in countries with a strong son preference. Second, the index uses the gap between women’s and men’s healthy life expectancy.

This measure provides an estimate of the number of years that women and men can expect to live in good health by accounting for the years lost to violence, disease, malnutrition and other factors.
Political Empowerment sub-index measures the gap between men and women at the highest level of political decision-making through the ratio of women to men in ministerial positions and the ratio of women to men in parliamentary positions. In addition, the reported included the ratio of women to men in terms of years in executive office (prime minister or president) for the last 50 years.

In the last general elections, only three women won elections, compared to 54 males. The three women are; Nnaniki Makwinja (Lentsweletau-Mmopane), Talita Monnakgotla (Kgalagadi North), and Anna Mokgethi (Gaborone Bonnington North). Four women were elected through Specially Elected dispensation; Peggy Serame, Dr Unity Dow, Phildah Kereng and Beauty Manake. All female MPs — save Dow, who resigned — are members of the executive.

Overall, Botswana has 63 seats, all 57 elected by the electorates, and six elected by parliament. Early this year, Botswana Democratic Party (BDP) secretary general and Gaborone North MP, Mpho Balopi, successfully moved a motion in parliament calling for increment of elective seats from 57 to 61. Balopi contented that population growth demands the country respond by increasing the number of MPs.

In Africa, Botswana play second fiddle to countries like Rwanda, Namibia, South Africa, Burundi, and Zimbabwe who have better representation of women, with Rwanda being the only country with more than 50 percent of women in parliament.

The low number of women in parliament is attributed to Botswana’s current, electoral system, First-Past-the-Post. During the 9th parliament, then MP for Mahalapye East tabled a motion in parliament in which she sort to increase the number of Specially Elected MPs in parliament to augment female representation in the National Assembly.

The motion was opposed famously, by then Specially Elected MP, Botsalo Ntuane, who said the citizens were not in favour of such a move since it dilute democracy, instead suggesting the Botswana should switch to Proportional-Representation-System. Botswana is currently undergoing Constitutional Review process, with the commission, appointed in December, expected to deliver the report to President Mokgweetsi Masisi by September this year.

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