The 2018 Auditor General’s report has painted a gloomy picture of government’s spending showing not accounted for funds, irregular public expenditure abandoned, and delayed contracts highlighted as the main culprits.
According to the report, Rwf 17,412,794,231 (Shs72,581,493,385) is not reflected in the books of accounts for the public parastatals’ audits.
The office of the Auditor General audited 173 public entities and projects, which comprise 142 budget agencies and projects, 5 Government Business Enterprises and 26 District Hospitals.
The report captures the state of finances for the financial year which ended 30/06/2018.
Auditor General Biraro Obadiah tabled his report on Monday afternoon before Parliament, saying the 173 public entities audited represent 86.6 per cent to which the national budget is allocated.
Based on the audits conducted, the Auditor General told Parliament that compared to previous financial years, there has been a “slight improvement since the entities which obtained unqualified opinions increased by 3 per cent compared to previous year.”
The increase in number of entities obtaining unqualified audit opinion on financial statements means that those entities are progressively embracing appropriate financial management practices.
He however, noted that the number of public entities which obtained adverse opinion is still high.
“Unqualified audit opinions made up 33 per cent, qualified opinions made up 34 per cent while adverse opinions made up 33 per cent,” he said.
The report further explains that 74 per cent of the unqualified opinions were from projects. Projects also contributed approximately 49 per cent of the qualified opinions. Districts and City of Kigali made up approximately 51 per cent of the Adverse opinion.
The report reveals government has lost over Rwf270 billion in abandoned assets, contracts and delayed contracts.
Abandoned or delayed contracts the report mentions the rehabilitation of Nyagatare– Rwempasha–Kizing
The construction of Gisenyi modern market that has stalled for over five years.
At the Workforce Development Authority (WDA), a project to enroll students in hospitality institute is also delayed because construction of its campus in Remera was not completed as it was expected in the last fiscal year.
In particular Nyagatare district,
Meanwhile the University of Rwanda was also cited as institution with major idle infrastructure, an ICT center that was built in partnership with the Korean Development Agency-Koica is not serving its purpose.
Also cited was the uncoordinated relocation of students to other campuses.
The Rusizi dairy plant constructed in Giheke sector, Rusizi district is also idle after completion.
government also has lost billions in court battles against contractors who either abandoned contracts or connived with public officials in the embezzlement of public funds the report says.
The delayed and abandoned contracts mainly comprised of energy and water projects managed by Energy, Development Corporation Limited (EDCL) and WASAC – the Water and Sanitation Corporation.
Other contracts with significant delays were noted for building projects belonging to Workforce Development Authority and districts.
According to the report, public funds amounting to over Rwf 5.6 billion were either wasted or swindled in the 2017-2018 fiscal year.
Biraro said that the audits reached cross-cutting findings of irregular expenditure.
The irregular expenditures were in the form of unsupported expenditure, partially supported expenditure, wasteful expenditure, unauthorised expenditure and funds diverted or fraudulently utilised.
The figures for irregular expenditures in the AG’s report for 2018 show that there has been a 68 per cent decline in irregular expenditure from Rwf17.6 billion in 2016 to Rwf5.68 billion in 2018, respectively.
“This is indicative of an improvement in our PFM (Public Financial Management) systems and controls when it comes to recording and accounting for expenditure,” the Auditor General said.
The focus for the AG’s audits in 2018 was again on high risk entities and those that implement programmes that impact on the lives of Rwandan citizens.
An example of those entities are the three biggest Government Business Entreprises (GBEs) that include energy giant REG Holding (which comprises EUCL and EDCL), the pension fund, Rwanda Social Security Board (RSSB), and the water and sanitation cooperation, WASAC.
The audits also targeted nine government boards whose mandates impact citizens’ lives most, such as the Rwanda Agricultural Board (RAB) among others.
Auditor General faulted Rwanda Social Security Board (RSSB) for failure to do a proper follow-up in its different undertakings during the audit period which was costing both the government and workers alike.
The report will be reviewed by the Parliamentary Public Accounts Committee (PAC) and the feedback will be presented to both chambers of parliament for the action.
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