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Gov’t Special Funds abused – Auditor General

Publishing Date : 20 May, 2019


Auditor General (AG), Pulane Letebele is a man really concerned by the way monies in 25 government special funds are being used. He observes that the money is spent recklessly on un-intended purposes ultimately leading to the abuse of reserves which could have supported the intended ailments.  

Among the list of the abused Funds is the National Electrification Fund (NEF) of 2010 which has not been reconciled as per the order of the Auditor General from the previous year.  In the year under review, the failure to submit the accounts within the prescribed time limits had persisted. “I consider this state of affairs highly unsatisfactory as it denies the Public Accounts Committee (PAC) the opportunity to examine the audited accounts of the Fund on a timely basis, in accordance with the requirements of the Standing Orders of the National Assembly,” the concerned Auditor General laments.

Section 12 of the Fund, according to Letebele, provides that the accounts of the Fund shall within 3 months after the end of the financial year, be audited by an independent auditor appointed by the Fund Management Committee; and further that not later than six months after the close of the financial year, those accounts shall be submitted to the AG office- this never happened.

For the third year running, the Auditor General says accounts of the National Petroleum Fund (NPF) have not been submitted to his office, as the appointed auditor. “The Department of Energy Affairs, by letter dated September 2018, said they were in the process of finalizing the financial statements for the year ended 31 March 2018, and that they hoped to complete by October 2018.  At the time of writing this report, the accounts had still not been submitted,” AG said. NPF made headlines last year when P250 million was taken from the fund for a parallel activities, even up to now the monies are yet to be fully paid back.

Tobacco and Tobacco Products Fund (TTPF) is another Fund used in a similar fashion and this concerns Letebele, who has since confronted the relevant authorities on the matter. The major points raised in the management letter related to; “The use of Fund money on the treatment of ailments which were unrelated to the purposes of the Fund, such as medical charges for oncology, neurology, cardiology and fractures.”  

Further to the issue, the Permanent Secretary in the Ministry of Health and Wellness, Ruth Maphorisa has been asked about the delays in the appointment of the Tobacco and Tobacco Products Levy Implementation Committee during the period under review.  The Committee is responsible for overseeing the administration and management of the Fund.

In the year under review the major expenditure for the National Disaster Relief Fund (NDRF) was for the purchase of tents to the value of P5 234 780.  Out of this amount, supporting documents for transactions to the tune of P2 326 700 could not be produced for verification purposes. “Consequently, this expenditure is unvouched,” the Auditor General said.

“The over-arching findings related to lack of proper accounting and accounting records, resulting in poor monitoring of the issues of these items. There was no system of follow up on tents issued to beneficiaries which would ensure the retrieval into stock of tents that were no longer required.  Proper management of these requisites would suggest that purchases at any time should take account of the existing items in stock available for use”.

The Road Traffic Fines Fund (RTFF) of 2009 with specific purpose of purchasing and maintaining traffic-offence-detecting devices and for complementing law enforcement measures of curbing road traffic offences is also giving the Auditor General sleepless nights. In the year under review the fines collected totaled P95 621 813.

A heavy portion of these funds in the reserve have been applied to the general purposes of the Police Service beyond those contemplated in the Fund Order. “As I have repeatedly commented in the past, in my view, the Fund has become an additional or alternative source of funding for the recurrent expenditures of the Botswana Police Service. A number of vehicles were purchased from the Fund for the Transport and Telecommunications Branch, instead of using P32 057 580 appropriated for this purpose in the recurrent expenditure estimates, out of which only P1 387 301 had been used,” observes Letebele.

Public Debt Service Fund (PDSF) had accumulated P2 231 596 465 representing the value of investments made from the Fund. P900 566 097 as loans was made to the BCL liquidator, which could not be verified by reference to the loan agreement spelling out the terms of the loans. Botswana Meat Commission (BMC) also got a loan amounting to P354 000 000 from the fund. “In the case of loans made from the public revenues, Government has issued a directive that they be converted to equity, because of the Commission’s continued liquidity constraints”.

Botswana Development Corporation has also gotten a share of P189 500 000 which was not clearly stated in the statement. “The loan amount to the Corporation for the construction of the GICC project is P189 500 000, and not P89 500 000 as reflected in the Statement” highlights the AG.  Consequently, the AG says the statement shows an outstanding balance of P58 039 319 as at 31 March 2018, instead of P158 131 191 as per the loan repayment schedule as on that date.    



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