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Ministries face deadline as axe looms over P6bn Special Funds

Safety net: MPs have previously criticised the diversion of national disaster funds to the DIS
The Ministry of Finance and Economic Development has given ministries until the end of this month to justify the existence of Special Funds under their control, amidst reports that the billions these hold are being abused and diverted.

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 Fund Orders have been requested by ministries and passed through the finance ministry.

The Fund Orders specify what the funds will be used for and where their monies will be sourced, all of this to be overseen by management committees who are supposed to meet quarterly to prepare reports and also submit annual financial statements.

As at August, various ministries controlled 41 Special Funds holding P6 billion and ranging from uses such as motor vehicle accidents, tobacco and alcohol use, tourism training and others. The Funds are resourced with levies from various activities and they by-pass government’s main coffers, straight into accounts held by the ministries. Scrutiny on the management of the Funds has grown since it emerged that P230 million had been drawn from the National Petroleum Fund in 2017 to fund an intelligence agency request that later changed into an ongoing case of alleged money laundering.

The diversion of millions in 2007-2008 to establish the Directorate of Intelligence and Security was also widely condemned by Parliament, while each year the Auditor has noted rampant misuse of Fund Orders by various ministries.

On Monday, senior finance ministry officials said ministries had been given until the end of September to respond to its queries on the use and management of various Special Funds, pending a rationalisation of the funds.

“We are looking at the financial records of these funds because we are responsible for making sure that ministries keep these records,” deputy accountant general, Kealeboga Molelowatladi told members of the Public Accounts Committee (PAC). “It is a requirement that two months after the end of the financial year, the financial statements of these Special Funds must be submitted to the Auditor General but most of them have not been doing that. “For this financial year,

we are still doing the roll call because most have not submitted their financials.”

Finance ministry permanent secretary, Wilfred Mandlebe said while the review would result in the dissolution of some Special Funds, others such as the Guardian Fund would of necessity have to be retained.

“The review is to correct and hold people accountable,” he told legislators in the PAC.

“Once we have reviewed the Fund Orders, everyone will know that two months after the end of the financial year, they must submit.”

Former finance permanent secretary, Solomon Sekwakwa previously told a special meeting of the PAC, that the proliferation of Special Funds was a headache to the ministry.

“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.”  The Auditor General, meanwhile, has annually pointed out numerous acts of diversion, abuse and failure to account across Special Funds, involving millions of pula.

Previously, under the Tourism Industry Training Fund which collects levy from tourist enterprises for skills training for citizens, the Auditor General found that P10 million and P600,000 had been drawn in the 2016-2017 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’.

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.


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