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P65 million rent deal back to haunt Trade Ministry

Permanent Secretary in the Ministry of Investment, Trade and Industry (MITI), Peggy Serame came under fire this week over failure to act on the instruction of the  Public Accounts Committee (PAC) regarding the acquisition and rent of Ministry’s headquarter buildings.  

The ministry is accused of flouting procurement rules by bypassing Public Procurement and Assets Disposal Board (PPADB) and ignoring the latter’s guidelines.

When the matter resurfaced at the ongoing PAC deliberations, the permanent secretary, Serame had to answer to the Committee as to why she had failed to instigate an investigation into the matter, as was instructed by the PAC last year.

PAC learnt this week that Serame had not made any effort to investigate the acquisition of her ministry’s offices, prompting the PAC members to consider instituting own investigations on the matter to identify key players in the authorisation of the deal.

The acquisition of the office, the PAC learnt, was done without following the procurement rules which limit Ministerial Tender Committees (MTC) from adjudicating any tender beyond its threshold of P25 million. The MTI headquarters building was acquired on lease basis at the tune of P65 million.

MTI moved into the building in 2013, at the time when Dorcas Makgato was at its helm. Makgato is now Health Minister. The office is located at the Central Business District (CBD), where the Ministry of Trade currently operates.

The accounting officer, Serame told PAC that the ministry did not launch a probe into the matter because she was of the view that PAC did not expect her to be the one looking into the matter. However PAC member Dithapelo Keorapetse stated that Serame, as accounting officer, was liable to do such and report back to the PAC.

According to the PPADB Act, public procurements beyond the limits of the MTCs are sent to PPADB for adjudication which has the right to approve or reject them based on the factors prevailing.

PAC also established that the acquisition of the office space was done without an invitation to tender, raising eyes bows on how the ministry was able to identify the building without expressions of interest from property owners.

PAC members doubt DCEC role

Biggie Butale, Member of Parliament for Tati West and committee member questioned the involvement of Directorate on Corruption and Economic Crime (DCEC) as he remarked their coming on board under the pretext of investigating was a bluff while in fact they are trying to deploy delaying tactics and conceal the matter.

“I am sorry to say this as a member of the ruling party. We are not children, we can see, we know what the DCEC is doing,” he stated.

“Why is it that we see in the accounting officer’s report that the DCEC only came on board in February this year? Unless P65 million means nothing to you, the PAC cannot just allow this matter to go through without answers.”

DCEC has found itself at odds with parliament over investigations, with the former accusing the latter of interfering in its investigations. MPs on the other hand are of the view that DCEC is compromised, and cannot investigate scandals involving ministries, ministers in particular.

MP for Selebi Phikwe West, Keorapetse had wanted for the accounting officer to reveal the name(s) of people who authorised the procurement which violated the rules.

“We want to know why and who took this decision? You [accounting officer] are obviously privy to such information and you are trying to protect the person responsible,” he said.

Keorapetse was also of the view that the purported investigation launched by the DCEC should not deter PAC from probing and requesting to be furnished with the required information.

“We are not going to stop and hope that DCEC will investigate the matter, otherwise we will just be here doing nothing while everyone who asks is referred to DCEC,” he said.

Ignatius Moswaane, MP for Francistown West was convinced that there is criminal activity surrounding the procurement of the office in question and requested that the accounting officer, who was ordered to re-appear before the committee with explanations, to bring all documents necessary which led to procurement of the office building.

Moswaane said the accounting officer’s decision not to act on the matter following recommendation by PAC to do so in the last sitting, is a clear sign that accounting officers are taking for granted the PAC as an oversight institution.

It is becoming common that ministries procure office space without following proper procurement rules. In 2011, Ministry of Defence, Justice and Security also went ahead to procurer office space without authorisation of neither MTC nor PPADB. PAC went on to recommend rescission of the decision and an investigation into the matter.

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Government sitting on 4 400 vacant posts

14th September 2020
(DPSM) Director Goitseone Naledi Mosalakatane

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.

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FNBB projects deeper 50 basis point cut for Q4 2020

14th September 2020
Steven Bogatsu

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.

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Food suppliers give Gov’t headache – report

14th September 2020
Food suppliers give Gov’t headache

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.

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