4 June 2017

Ethiopia: Audit Gaps Surge, Parliament Condemns Itself

With an audit gap of 3.7 billion Br, public universities were a hot topic of discussion

The Auditor General, in its latest report, revealed illegitimate transactions close to 20 billion Br in 158 federal institutions during the past fiscal year - over twice that of the gap seen in 2014/15. This was announced when the Auditor General presented its report of government institutions to the Parliament on May 30, 2017.

The 57-page brief summary report highlighted unnecessary expenditures, unaccounted expenses, uncollected revenues and overuses of the budget by the institutions.

In the report, Gemechu Dubiso, the Auditor General, said that 53 institutions had serious audit gaps last year, an increase from 37 in 2014/15. He also indicated most of the institutions were unable to explain why so much money was inappropriately spent.

"This shows how the situation is getting worse and worse every year," said one of the parliamentarians, referring to the successive reports. "Although the number of institutions which have shown improvements has increased from 66 to 73, the illegitimate transactions by the reduced institutions is more tremendous."

Gemechu connects the severity of the audit gap with the issue of accountability in the federal institutions.

"There is a serious lack of accountability," said Gemechu. "Most of them tend to work against the law of the land."

With an audit gap of 3.7 billion Br, public universities continued to be a hot topic of discussion during the presentation of the report to the parliament. This year, the gap observed in all public universities is twice that of the previous fiscal year. Moreover, the gaps observed in 27 universities were that of severe.

"No improvement was observed in the case of public universities as no measure was taken on them in the previous year," said Gemechu.

Among the public universities, Addis Ababa University (AAU) took the lead with an audit gap of 1.2 billion Br. It is followed by Addis Abeba Science & Technology University (AASTU) and the University of Gonder with audit gaps of 472 million Br and 126 million Br, respectively.

"They are not willing to take corrective measures," said Gemechu. "The problem starts with the Ministry of Education, the regulatory body of these institutions, as it does not control their operations effectively."

Observing big gaps in the report of universities is not a new phenomenon in Ethiopia.

Two months ago, the Standing Committee on Public Expenditures Administration & Regulation warned AAU after the Auditor General found 1.5 billion Br of inappropriate transactions in the year of 2014/15.

The report was announced in a year when a new directive was set regarding the penalties that high government officials and employees would face if they are found to have been part of any audit irregularities. The penalty varies depending on the severity of the gaps.

Prior to the directive, high officials would receive only warnings regarding the failure to present their audit reports. But now they will also face fines on a sliding scale, depending on their rank.

Nevertheless, Gemechu says the outcome of the directive is yet to be seen since it was released after the Auditor General set the 2015/16 audit report.

Moreover, unlike the previous year, the reaction from the Parliament was different as members were trying to put the blame on themselves. The report, drilled with a substantial amount of adverse opinions, has been praised by overwhelmed parliamentarians for its bold moves.

One parliamentarian even went as far as suggesting that the Auditor General is the only government institution living up to all the responsibilities it was delegated.

"The Auditor General is handing us bullets," said one of the members of parliament (MPs). "But, we have failed to take actions accordingly."

Until Speaker of the House, Abadula Gemeda, stopped the repetition of the self-blaming, MPs criticised the House for being ignorant of consistent reports from the Auditor General.

"Anyone who worked against the law must be asked," Gemechu commented.

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