Treasury says compliance among government ministries, departments and agencies (MDAs) in submission of monthly expenditure returns has gone down, prompting reduced monthly funding allocations.
In a communiqué dated September 20 2016 which The Nation has seen and signed by Secretary to the Treasury Ronald Mangani, a meeting held earlier on the day the letter was written agreed to release lower than allocated funding to the affected MDAs.
Reads in part Mangani’s communication: “In line with the foregoing, the general public is further informed that the Government Cash Management Committee [GCMC] meeting of 20th September 2016 resolved that funding for the month of September 2016 should only be made to the MDAs that submitted their August 2016 reports by the set deadline.
“Therefore, MDAs that did not submit the returns will be provided lower funding than indicated in their cash flows based on the criteria that was earlier communicated.”
Further, the communiqué indicates that the ministry received 156 reports from all MDAs, excluding subvented organisations, out of the expected total of 209 reports. This represented an overall compliance rate of 74.6 percent.
The compliance level for subvented organisations has also gone down to 47.4 percent from an average of 95.7 percent for 2015/16 financial year, according to the report.
Wrote Mangani: “The GCMC is not intended to punish MDAs or derail their activities, but to ensure adherence to the provisions of the law.”
In an interview yesterday, Ministry of Finance and Economic Planning and Development spokesperson Nations Msowoya could not indicate how much was at stake, saying the information was not for public consumption.
He said: “The decision has come about because this is part of [the provisions of] Public Finance Management Act that every controlling officer is required to submit to the Treasury within 14 days of the end of the month, a monthly summary of financial transactions in the format specified by the Secretary to the Treasury.”
Section 84(3) of the Public Finance Management Act requires controlling officers to submit the expenditure returns before getting their next tranche of funding.
In January 2016, Treasury revived monthly expenditure reports which were suspended following the introduction of Integrated Financial Management and Information System (Ifmis), government’s electronic payment system.
But after Cashgate—the plunder of public resources that forensic auditors say could have drained as much as K577 billion between 2009 and 2014 or around 30 percent of the national budget during the period—confidence in the system collapsed when its ease to fraudulent manipulation was discovered.