21 March 2019

Rwanda: Senate Tightens Oversight on Government Agencies

The Senate will, every year, follow up on public institutions to ensure they honour their commitments to have clean audits of public finances in order to achieve value for money.

The resolution is contained in a report by the Senatorial Standing Committee on Economic Development and Finance.

The senators are keen to ensure that finical statements for public institutions are accurate and comply with the laws that govern public finance management.

The increased scrutiny was prompted by the AG's reports for the past three years, which revealed sustained accounting flaws in public institutions.

Jacqueline Muhongayire, the Committee's Chairperson pointed out that from January 15 to 23 this year, they met with officials from 12 public institutions, including boards and government parastatals, which have sustained poor accounting practices and management.

They include University of Rwanda (UR), Workforce Development Authority (WDA), Rwanda Education Board (REB), Rwanda Agriculture Board (RAB) and National Agricultural Export Development Board (NAEB).

Others are Rwanda Revenue Authority (RRA), Rwanda Social Security Board (RSSB), Rwanda Development Board (RDB), Water and Sanitation Authority (WASAC), Rwanda Energy Group (REG) Rwanda Transport Development Agency (RTDA), Rwanda Biomedical Centre (RBC).

"As the AG indicated, these bodies use the largest part - about 60 per cent - of the national budget," Muhongayire said.

The issues

In general, she said, it was realised that the recurrent mistakes are common to all the institutions in question. She cited mistakes such as not giving enough importance to the annual recommendations made by the AG, lack of strategic plan, poor planning, unreliable and mixed-up accounting records, and poorly designed feasibility studies for projects.

Other inefficiencies are lack of ICT to help improve financial management, unlawful procurement procedures, breach of contacts, entrepreneurs who delay project completion or abandon projects and delays in paying contractors.

Three of them - RRA, RBC and RDB, made a step and got a financial statement clean audit in 2016/2017, meaning that its operating budget was properly used.

However, they all fell short on the basis of performance and compliance with the accounting laws

Among the challenges government agencies face is the skills shortage, especially qualified accountants.

"You realise that in general, no firm got a clean audit for compliance with the law, and there is a huge gap in regards to value for money," she said.

Commitments

During the meetings, 10 of the institutions in question committed to get clean audits starting with the next financial year (2019/2020), while two of them requested three years for them to build their capacities to be able to get such a status.

She said that the institutions made commitments, before the Senate, to redress the situation by filling the identified gaps for them to get a clean audit.

Some of the reforms that they adopted, she said, are fully implementing the AG's recommendations, using ICT to expedite and advance data collection and record keeping, comply with the law in terms of public tenders, effective strategic plans, as well as employ certified public accountants for budget.

"The resolution that the senate has approved is intended to help those establishments achieve the clean audit. While talking with the leaders of those institutions, it was observed that something had touched their consciousness, that they seem to have willingness to attain that level," said Senate President Bernard Makuza.

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