PAC tasks Local Govt ministry over unconsolidated revenues

The parliamentary Public Accounts Committee (PAC) yesterday asked the Ministry of Local Government to explain how they intend to iron out issues of Non-Budget Agencies (NBAs). NBAs are off-budget entities typically designed to deliver subsidised public services. They are not included in the Treasury but funded through separate agencies. They include health centres, secondary schools and a few subsidised tertiary institutions. According to the 2012/2013 Auditor-General’s report, there were concerns in local governments of inadequate follow up and lack of accountability for funds managed by the agencies. “The entities did not prepare budget execution reports to track utilisation of funds,” the report reads in part. The agencies generated Rwf175 billion in revenues while their annual expenditure stood at Rwf163 billion. The finances were not incorporated in financial statements of districts, and, ultimately, omitted from fund balances presented in the state consolidated financial statements. “We need proper understanding of why this is happening and what is the way forward. We cannot afford to keep working like this,” said MP Theoneste Karenzi. The Minister for Local Government, Francis Kaboneka, said government had first considered public interests by financing NBAs without considering consolidation of their income to the Treasury. However, there were new measures in place to audit them, he added. “Easy-to-use software will be helpful in improving accountability and audit of funds from non-budget agencies. These issues will be sorted out sooner than later,” Kaboneka said. According to the minister, the “smart” accounting software had been installed in 14 of the 30 districts. “The exercise is still ongoing. Besides, not all districts are doing badly in terms of accountability,” he added. Available reports indicate that districts generate annual revenue to the National Treasury, ranging from Rwf200 million to Rwf7 billion. However, MPs say single software should not be an ultimate conclusion to ensuring accountability, but rather focus on supporting measures of improving capacity of public finance managers, as well as having internal auditors in NBAs. “More numbers of well trained public finance managers are needed too,” said Juvenal Nkusi, the PAC chairperson. PAC committee chatting during the session.(Timothy Kisambira) Nkusi added that NBAs should improve their financial audit to contribute part of their revenue to the Treasury. Kaboneka revealed that public finance management programme incorporated in the Ministry of Finance and Economic Planning would facilitate the capacity of district budget managers for better accountability. “This and other upcoming programmes will ensure clean audits and improve accountability for state finance, while ensuring good service delivery,” he said. Kaboneka was until July a Member of Parliament before he was elected minister. Slow pace of rehabilitation Meanwhile, the minister said the ministry was “disappointed” by the slow pace of rehabilitation and construction of Genocide survivors’ housing units. “it is sad that we haven’t built houses for all the (vulnerable) survivors of the 1994 Genocide against the Tutsi. The exercise has had a number of challenges, including, expropriation, poor construction works and some contractors abandoning their work. However we are on the right track, so far,” Kaboneka said. According to the AG, FARG’s (Genocide Survivors Fund) 2012/2013 budget framework had intended to renovate 3,306 housing units for Genocide survivors but only 350 were renovated countrywide. “The slow pace of rehabilitation and construction of FARG houses has resulted in some beneficiaries living in incomplete houses due to lack of alternative shelter,” reads the AG report.Kaboneka said the exercise of supporting Genocide survivors had been costly. “They require 100 per cent funding, but we are optimistic that the new company we have contracted to build houses for survivors will do a better job and on time,” Kaboneka said. The government intends to stop supporting FARG by 2019, but this would depend on the number of remaining beneficiaries of education support.

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PAC tasks Local Govt ministry over unconsolidated revenues