More than P10bn in 33 Special Funds at risk
Goitsemodimo Kaelo | Friday May 4, 2018 18:00
Special Funds, under the Finance and Audit Act, are established by orders passed through the Finance Ministry as public revenues for specific purposes. With many of the funds dating back decades, public officers have battled to properly account for the revenues and expenditure, as more funds have been requested by ministries and passed through the Finance Ministry.
The latest Auditor General’s report released last Friday lists at least 22 Special Funds, but excludes other major ones such as the Youth Development Fund and a few others funded through special levies such as the wheat levy. The Finance Ministry this week revealed that there are actually 33 Special Funds with a cumulative balance of more than P10 billion.
Scrutiny on the management of the Funds has grown since it emerged that P230 million had been drawn from the National Petroleum Fund last year to fund an intelligence agency request, that later changed into a case of alleged money laundering.
On Wednesday, Finance Ministry permanent secretary, Solomon Sekwakwa told a special meeting of the Public Accounts Committee (PAC) that he had personally been to Cabinet twice asking for its intervention on the issue of ballooning Special Funds.
“There are just too many Special Funds and this creates loopholes in the public finance management system,” he said.
“It makes the accountability of several government special accounts elusive.
“I went to Cabinet twice in the past and we advised that the Special Funds were a hassle as they were just too many. “They don’t (even) appear in government finance statistics.” Sekwakwa said the troubles of managing Special Funds had spread “the risk all over” the public finance management system, a situation he described as “unpleasant”. “We don’t want that situation. We want the revenue coming under the Consolidated Funds, but currently it is not happening. “We have advised government on these Funds in the past but government continues to create more Special Funds.
“We are currently trying to review the laws looking at the governance of these Funds with a view to constraining them.” Sekwakwa said many instances had been noted where line ministries, which manage some of Special Funds, use the money for their ministerial projects and later return to compete for funding with national priorities in the national budget. This particular type of abuse was noted by the Auditor General, Pulane Letebele in her latest report released on Friday and covering the 2016/17 financial year.
The Auditor General pointed out numerous acts of diversion, abuse and failure to account across Special Funds, involving millions of pula. Under the Tourism Industry Training Fund which collects levy from tourist enterprises for skills training for citizens, Letebele found that P10 million and P600,000 had been drawn in the 2016/17 financial year as loans to the Botswana Tourism Organisation (BTO) and the Ministry respectively. An advance of P314,000 was given from the Fund to BTO for the purchase of 23 tablets and pens for 23 members of the Fund Management Committee, even though the Committee only had seven members. Under the Road Traffic Fines Fund, the Auditor General queried the truthfulness of an alleged expenditure amounting to P3.5 million on five Land Rovers to patrol the Central Kgalagadi Game Reserve on “traffic duty”.
“In this instance, it is questionable whether the five Land Rovers would be used on road-traffic-related duties in that area in view of the paucity of vehicular traffic.” Under the Cattle Export Levy Fund, vouchers for payments worth P4.8 million were missing out of the P6.9 million said to have been spent from the Fund. At the Export Credit Re-Insurance Fund, expenditure from the Fund of P586,835 comprised P538,809 of management fees, in a year in which the Fund’s interest income fell to P452,625 from P1.6 million. Letebele also expressed concern with several Funds where accounting officers did not provide statements for assessment.