17 February 2013

Rwanda: MPs Call for Tough Action Against Funds Mismanagement

Last week, the parliament's public accounts committee (PAC) presented its analysis of the auditor general's report for the year ended on June 30, 2011 to the chamber of deputies.

The analysis indicates that embezzlement of funds has increased to Frw 627 million compared to Frw 81 in the previous year (2009/2010). It also showed that government ministries and other public institutions have spent at least Frw 5.9 billion without supporting documents.

Problematic agencies include RDB, Orinfor, NUR, Rwanda Civil Aviation Authority (RCAA), National Agricultural Export Board (NAEB) and King Faysal Hospital.

According to PAC's chairman Juvenal Nkusi, the AG can barely audit half of the over 350 Rwanda government agencies. He blamed officials who are always absent when the audit is ongoing, but are very quick to complain when the report is out.

Nkusi said that the Integrated Finance Management System (IFMS) used by government agencies is causing repeated inconsistencies in finances as officials are still unfamiliar with it. Only 11 government agencies out of 121 audited have clean records. The clean ones include Minecofin, Minagri, Minirena, Western Province, and RSSB. "This means that 91% of the audited institutions are doubtful in managing public funds," said PAC's chair.

During PAC hearings, 27 common malpractices were found in government agencies, with Minecofin and Minagri having committed 0. "The biggest culprit is Gasabo district with 27 on 27 malpractices, followed by Kigali city with 26, Gakenke district has 23 while Minaloc and Mineduc have 16 and 12 respectively," Nkusi said.

Predominant malpractices are the use of forged documents, omitted debts to contractors, debts without supporting documents, penalties due to delay in paying taxes, etc. "Some government agencies are giving contracts to contractors who have not provided any of the required bidding documents," Nkusi stated.

PAC found that the government has Frw 5.9 billion and US$ 119,980 of debts to contractors which were not declared during the 2010/11 audit. "Orinfor tops the list with Frw 3.619 billion, followed by NAEB with Frw 2.3 billion. For Orinfor there are no documents showing who is supposed to be paid," reads the PAC report.

King Faysal Hospital gave contracts worth Frw 913 million to contractors with no bid documents presented. "This is insane," Nkusi fumed.

"People who stole cement, nails and iron sheets from 9-YBE and 12-YBE construction works were prosecuted for 'dishonesty' instead of a crime like theft."

Mineduc, too, was in the MPs sights. "People who stole cement, nails and iron sheets from 9-YBE and 12-YBE construction works were prosecuted for 'dishonesty' instead of a crime like theft," said PAC's chairman, adding that this resulted in a reduced sentence.

Nkusi said that Orinfor and Onatracom are both "ongoing concerns," meaning they work at a loss. "The latter can barely raise revenue to pay even the net salaries of its employees," he observed.

PAC recommended performance audits for all the government agencies and individual staff to ensure that they are up to the mandates given to them. It also proposed a monthly review of government contracts to ensure tenders are awarded according to legal guidelines.

The committee also ordered Mineduc to submit a detailed performance report on the One-Laptop-Per-Child project (OPLC) within 3 months. "We have noticed some irregularities and we want to ensure that the program served its purpose," Nkusi explained.

Specialized court

MPs Theobald Mporanyi and Henriette Mukamurangwa proposed that a special court be set up to fight corruption and mismanagement. "We must come up with tough measures for these institutions disrespecting the AG. I propose a special court for the embezzlement of public funds," Mukamurangwa said.

For Theobald Mporanyi, Rwanda should adopt the Singaporean way of fighting corruption and embezzlement. "Rwanda must set up a special court - this is the tough solution for this problem. Otherwise we are wasting time."

However, speaker Rose Mukantabana requested that the idea is put on hold until government officials are questioned concerning the challenges met in recovering public funds and fighting embezzlement. "We voted a law which gives the prosecution more powers in this regard, we have to wait and see if it gives results. Other options will be considered if the above doesn't work," the speaker said.

Lawmakers also proposed that PAC be given judicial and police powers to be able to detain corrupt officials and refer them for immediate prosecution, and a constitutional amendment to classify cases of misuse of public funds among crimes with no expiration period like Genocide crimes.

Recruitment procedures questioned

One of the explanations for this dire state might be that, as PAC noticed, people employed in public finance management at different levels often have insufficient professional skills.

"When you say that your staff members are holders of a master's degree, you have to tell us where they got them. What are their professional skills?" asked MP Emmanuel Mudidi.

PAC's vice-chairman Evode Kalima proposed that the public service commission (PSC) be audited to assess the recruitment procedures. "You notice that individuals who have been responsible for mismanagement have often been transferred to other institutions," stated Jean-Thierry Karemera, demanding an explanation from the government. "It's scandalous."

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