13 February 2013

Rwanda: Districts Have to Stop Repeating Same Mistakes in Funds Management - Transparency

Transparency International Rwandan Chapter (TI-Rw) in partnership with the German Cooperation (GIZ) has presented its analysis of the auditor general's report of the year ended June 30, 2011, with a focus on districts as budget institutions with, since decentralization, big amounts of public funds to manage.

"Public funds must be used in a transparent manner as a way to enhance efficiency of district spending," said Marie-Immaculée Ingabire, the head of TI-Rw. "Public accountability is a key pillar of good governance and sustainable development, so for the benefit of all Rwandans we have to analyze the AG's report and point out who is mismanaging public funds."

Among the key findings of the analysis is that no district had entirely a clean audit with Musanze, Nyaruguru and Ruhango districts being clean on expenditure-related complaints.

The overall amount of complaints (both expenditure-related and non-expenditure-related) is Frw 70,393,299,441. "We cannot accept such a high level of mismanagement public funds," said Ingabire.

An amount of Frw 21 billion (expenditure related) was lost or mismanaged in 27 districts as a result of embezzlement, procedural errors and so on, while Frw 48 billion (non-expenditure-related) for 30 districts went missing from posting errors, wrong financial statements, poor book keeping and non-respect of laws and procedures.

The best district in public funds management, according to TI-Rw, is Karongi which mismanaged Frw 383 million and the worst is Rubavu with Frw 6.2 billion.

According to TI-Rw, there are recurring mistakes due to which every year, amounts of public funds are mismanaged. These are poor filing (missing supporting documents), unrecorded transactions for non-budget agencies, bank reconciliation done wrongly, double recording of transactions, posting errors, wrong financial statements and non-respect of procedure.

"Districts' management staff has to ensure that, for any payment, all supporting documents are available, and those documents should be kept for future audit reference," said Apollinaire Mupiganyi, the executive director at TI-Rw.

He added that districts have to strengthen their internal verification systems on bank accounts, put in place proper systems of stock management. "They have also to review the budget execution and investigate differences, plan well before issuing tender documents, etc."

Transparency International Rwanda also recommends that the ministry of finance and economic planning and other ministries provide districts with guidelines on how to spend the budget at the same time as the budget is approved by the parliament. "This would solve the issue of using funds were they were not allocated," Mupiganyi explained. "There should also be a comparative analysis of the budget law and audit law for harmonization."

TI-Rw also points out that, in emergencies such as natural disasters, district staff cannot always comply with all regulations. "The government should provide supporting documents and the AG should accept them even if they don't fully comply with normal procedures," Mupiganyi suggested.

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