The Parliamentary Public Accounts Committee (PAC) has called on public institutions to allow their internal auditors to work independently.

The MPs said most loopholes in accountability exist because the auditors are not independent enough to question the chief budget managers and heads of organisations on various procurement undertakings.

The issue of the auditors independence came up as officials from the Ministry of Finance and Economic Planning were appearing before PAC, yesterday, to explain the implementation of resolutions adopted by the Plenary during the analysis of the Auditor General’s report which covered the fiscal year that ended in June 2013.

After a month long tour across the country to inspect the compliance rate of the recommendations, PAC is scrutinising their implementation.

Théoneste Karenzi, PAC deputy chairperson, said their findings showed that the internal auditors are not respected by the budget managers and heads of respective organisations.

"We talked to many Internal Auditors who told us that they work out of fear of being victimised for their reports; some work under the watchful eyes of their superiors and are not fully independent,” Karenzi said.

"The government should explore ways of making internal auditors more independent, so that they work without fear of being victimised by their superiors; without fear of being sacked. Internal audits are very vital to financial management,” he added.

Despite earlier claims of improvement in accountability, 68 per cent of public entities still had issues to address in various areas, including fundamental accounting, corporate governance, financial management, contract management and value for money.

Some of them had not implemented many of the audit recommendations made in the previous audit.

In local governments, there are concerns of inadequate follow up and lack of accountability for funds managed by the Non-Budget Agencies. The entities that include the administrative sector, VUP, and community-based health insurance, Mutuelle de santé, at district level, district pharmacies, and public schools, did not prepare budget execution reports to track utilisation of funds totaling Rwf 175 billion. 

The funds were ultimately omitted from fund balances presented in the state consolidated financial statements, the report said. 

According to the Auditor-General’s report: "The main concerns related to the persistent weaknesses in preparation of financial statements and many errors noted during the audits; the high level of wasteful, unauthorised and irregular expenditure totaling Rwf3.2 billion.”

The report also indicated an increase in cases of fraudulent transactions, where more than Rwf1 billion went missing in 2011, while persistent weaknesses were reported in management of government assets that resulted in stolen assets worth Rwf 660 million and idle assets not in use worth Rwf1.1 billion.

The report that covers the period between August 2012 and June 2013, also indicated that more than Rwf23 billion was lost in poor contract management procedures, while nine contracts, worth Rwf908 million, were abandoned by contractors.

Kampeta Sayinzoga, the permanent secretary at the Ministry of Finance and Economic Planning, acknowledged the lack of full independence for internal auditors, but said efforts had been made to improve the situation.

Kampeta’s comments were echoed by the government’s Accountant General, Patrick Shyaka, who said that: "Previously, internal auditors reported to chief budget managers, now they report to the internal audit committee, which has given them lee way to work independently.

"This gives them the freedom to feel that they work in a group, not as individuals, not to be harassed anymore,” said Shyaka.

However, he explained that not all accountability gaps should be blamed on lack of Internal Auditors’ independence, but also on their low capacities as well as that of procurement officers and accountants.