26 April 2014

Ethiopia: No Changes Made On Serious Accounting Flaws in Govt Offices

The Federal Auditor General's recent report to the House of Peoples' Representatives indicated that over 4.5 billion birr from last year's budget found in

the official records of nine government organizations were flawed due to uncollected revenue, unaccounted for expenditure, exaggerated procurement and failure of utilization of allocated budget.

According to the latest report presented to the House on Tuesday, close to 1.5 billion birr had not been collected while it was found that around 785 billion birr was spent unlawfully either by existing financial documentations or other forms of information from the spending organizations. Similarly, the report made clear that over 2.3 billion birr had been identified as not being implemented for the intended purposes that had been approved by Ministry of Finance and Economic Development (MoFED).

The annual report presented to the House by Gemechu Dubisso, auditor general, expressed concerns over the existence of such types of unaccounted for expenditure in the official government system in the past and budget utilization that had not been improved despite the recommendation that was suggested in the same reported period in the previous year. And, oftentimes, government offices at ministerial level such as the Ministry of Defense (MoD), Ministry of Foreign Affairs (MoFA), Ministry of Industry (MoI) as well as Ministry of Water, Irrigation and Energy (MoWIE) along with higher educational institutions had been primarily mentioned in relation to unaccounted for expenditures and unlawful utilization of the budgeting system.

Meanwhile, 77 offices are found to have arrears of receivables amounting to 877,045,264.30 birr, specifically, the office of Agriculture and Technical Vocational and Educational Training Coordination under Ministry of Agriculture, Ministry of Foreign Affairs (MoFA), Ministry of Education, Ministry of Defence, Gonder University, Debre Birhan University, and Government Procurements and Property Disposal Service are listed in order of the their accounts.

It has been found that some 1.3 billion birr had been mismanaged in five government offices during the audit period. Public universities, notably Jimma, Semera, Wollo, Bahr Dar and Jigjiga, were among the major government institutions the report found serious shortcomings with regarding cash.

Contrary to the expected improvement in most offices, according to the report, the continuing exasperated problem of failing to finalize and close their audit accounts on the due date needed serious revisions and proper legal actions.

"Even though the relevant action has been taken from our side, it still desperately needs the attention and immediate actions, whether from the House or MoFED," Gemechu told MPs.

The report that presented the national budget performance of the 2012/13 budget year was carried out by the Federal office of Auditor General along with Audit Investigation Corporation and authorized private Audit firms. Out of the planned 140 federal government institutions targeted for auditing, according to the report, it was able to audit 138 institutions that accounts for 98.57 percent of its plan. Despite the offices effort, only two intuitions, the Ethiopian National Theater and the Agricultural Transformation Agency (ATA), had not been audited. The National Theater was not able to finalize its 2012/13 budget while the ATA did not utilize the budget it received from MoFED and did not prepare its budget documents.

"Though there is no remaining audit tasks that rolled over from the previous year, we are in a good position to pursue the auditing responsibility in almost all government offices that eventually gave us the opportunity to identify procedural gaps," Gemechu said. "Still, frequent and similar defects which could have been resolved continue to exist this year too. Since we are still weak to resolve these challenges, this reminds us as to how much we should pay attention to our future work.

"All in all, like in the previous few years, there are still challenges that have been prolonged from previous years, such as collecting revenues and expenditure accountings, procurements without rules and regulations, frequent problems with regard to government revenue collections, domestic revenue and utilization of government property. These should be given proper attention and corrective measures by all concerned bodies," the Auditor General said.

In some instances, also, payments had been made more than once for a product that had been paid for already, not to mention the exaggerated and unlawful allowance payment to employees.

Though the cooperation during auditing activity showed progress, Gemechis told the House, "Lack of cooperation remained to be an impeding challenge among various offices such as unwillingness of providing office facility and documents had been hindering the required auditing tasks and finalizing it in due time".

The report also urged the need for desperate attention to be paid by the government with regard to construction activities of various projects which are behind schedule, were not in progress and were suspended.


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