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Precious thebes still slip through gov’t fingers

Ndaba Gaolathe..PIC PHATSIMO KAPENG
 
Ndaba Gaolathe..PIC PHATSIMO KAPENG

At the Veterinary Services Department, a former employee “promised to pay back” P230,442 stolen between 2010 and 2014. The former employee has been making the same promise over the years.

The latest troubling glimpse into the state of public finances is contained in the Accountant General's latest statement of government accounts, released last week. The report covers the financial year to March 2023 and indicates the continuation of many lapses in public finance oversight noted in previous statements.

According to the report, in the years prior to March 2023, at least P15.4 million was reported as lost to fraud, theft, burglaries and other activities in the civil service, with only about P941,000 recovered. In the year to March 2023, about P300,000 was lost without any recovery.

Many of the cases are typical of the process of arrears and losses in the public finance system involving civil servants. When read together, reports by the Auditor General and the Accountant General indicate that theft and property losses within the system are identified and investigated slowly, and when discovered, the process of recovering the funds ultimately owed to taxpayers is even slower.

The Accountant General’s report shows that many of the cases of loss of public funds at the hands of civil servants involve “systemic fraud”, indicating organised, premeditated criminal activity spread over a period of time.

Typically, the public finance system attempts to recover the losses by garnishing the officer’s salary, his/her terminal benefits, or, in the worst case scenario, by prosecution and the deputy sheriff’s route. In many cases, however, the amounts officers repay are set at bare minimums, or the losses exceed what can be recovered from terminal benefits or the deputy sheriff route.

According to the Accountant General, as at March 2023, the government was owed P141.8 million in arrears, compared to P144.3 million as at March 2022. During the year to March 2023, public finance authorities recovered P4.2 million, up from P3.5 million in the year to March 2022.

In the year to March 2023, new arrears noted that year were pegged at P2.7 million, compared to P7.8 million for the year to March 2022.

The latest figures provide a snapshot of the challenges public finance authorities have been facing in ensuring that the government receives each thebe it should receive and uses it optimally. While the figures suggest sub-optimal collection, management and recovery, the numbers also reflect the challenges citizens have been experiencing in an under-performing economy over the last decade.

According to the Accountant General, as at March 2023, P89 million was owed to the government as school fees for primary school learners at public institutions. Within that financial year, a total of P1.4 million was written off, likely due to low recoverability.

Primary school learners at public institutions in urban areas pay up to P100 per term, while those in rural areas pay P50, amounts which, while heavily subsidised, are apparently proving difficult for some parents.

The latest Accountant General’s numbers come as citizens struggle under a heavier burden, due to the reduction in VAT zero-rated items and a confluence of pressures, including higher fuel prices and the outbreak of Foot and Mouth Disease.

Finance Minister Ndaba Gaolathe has pledged to prioritise public finance efficiency, after requesting that legislators approve bolder spending in the past two financial years. Responding to debates on the 2026-27 budget in February, Gaolathe announced that an “Efficiency in Process Initiative” was being implemented in public finances.

“Where inefficiencies are identified, corrective measures will be implemented decisively,” he said. “Through the Efficiency in Process Initiative, we will continue to rigorously monitor expenditure patterns and assess the efficiency and effectiveness of spending. “Given the current fiscal pressures, the government will intensify cost containment as well as strengthen procurement practices, limit non-essential travel and enforce prudent.”