Addis Fortune (Addis Ababa)

Ethiopia: Deviations in Public Purchasing Prove Problematic Once More

Stern measures have been demanded to ensure that the problems are not exasperated further

Purchases deviating from established procedures in 43 public institutions have accounted for a total of 165.9 million Br, the Federal Auditor General's report to Parliament on public institutions during the 2012/13 fiscal year indicated.

The 54-page-long report presented to MPs on Tuesday, April 22, 2014, during the Parliament's 25th regular session indicated that Bahir Dar University's 32 million Br has stood out of the 43 public institutions that deviated from the government procurement procedure. Jimma University trails behind Bahir Dar with 19.3 million Br of purchases during the stated period.

As has been the case in the previous two fiscal years, higher education institutions are yet again listed under repeat offenders in the report, which took half a day, only after the Parliament approved a draft proclamation.

The deviations include purchases conducted without tenders and in absence of pro forma invoices, according to Gemechu Dubisso, the Auditor General.

"Stern penalties ought to be given to stave off the ever-increasing deviations from established rules of procurement procedures," Gemechu told MPs while presenting the report. "Failure to take measures will result in even worse embezzlements."

Although the government procurement procedure stipulates that a public institution could resort to limited or internal tender only when two open external tenders have failed to attract enough bidders or the desired quality of products. Some of the institutions conducted limited tender without first attempting the external tender method, the report said.

A number of higher learning institutions have also been included in the list of public institutions that have exceeded their budgets. The total deviation in 30 public institutions has amounted to 380 million Br. The largest of them, says the report, is Wollo University's 44.2 million Br. This is closely followed by Mekelle University's 40.6 million Br. Other institutions included in the group are the Kaliti branch of the Ethiopian Revenues & Customs Authority (ERCA), which went 96 million Br beyond its budget.

Unaccounted expenses in three institutions have amounted to 22.3 million Br, the report also indicated.

Cash balance discrepancy totalling 997,412.79 Br has been reported in three institutions, namely, Debre Markos University, Alage Agricultural Technique & Vocational Training College and Bahir Dar University.

The auditing conducted by Gemechu's office in 132 federal public institutions indicated that 96 of the institutions had unused budgets totalling 2.23 billion Br. Bahir Dar University leads the group with 213 million Br whereas Jigjiga University stood second with 119.9 million Br. Some of the institutions with the highest figures include the Ministry of Water & Energy (MoWE), Woldia University, St. Paul's Hospital, the Ministry of Urban Development, Housing & Construction (MoUDHC) and the Ministry of Industry (MoI).

Outstanding payments amounting to 326.7 million Br has been reported during this period. This amount should have been collected through the ERCA and its five branches, the report said. Outstanding tax, interest payment and penalties from these institutions amounted to 286.9 million Br. These, added to 39.9 million Br in outstanding payments from four other institutions, have resulted in the total figure of 326.7 million Br.

Elected from Gimbo constituency of Keffa Zone in the South Region, Ashebir Woldegiorgis (MD), the only independent voice in the 547-member Parliament, asked Gemechu if he disagreed with him that impunity is creeping into the minds of many public institution officials. There are problems, Gemechu said, but not to the extent of becoming a dominant trend.

"There were problems." He admitted, although he did not share Ashebir's views that impunity has reached such levels.

"Let me add that some officials are easily tricked by irresponsible internal auditors," he said.

Girma Seifu (MP-MEDREK), who chairs the Budget & Finance Affairs Standing Committee in the Parliament, told Fortune that the Committee has repeatedly aired the deviations to the executive, expecting that stern measures would be taken.

"But none came," he grumbled. "Most government and public institution officials do not seem to be bothered by such reports, confident that nothing would happen to them."

He asked Prime Minister Hailemariam Desalegn on Thursday what his government would do with the report of the Auditor General, to which Hailemariam simply answered that his government would support the office in its endeavours to identify and expose malpractices.

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