Ministry of Finance, Economic Planning and Development says it is banking on twin solutions to be implemented this fiscal year to curb funds abuse amid concerns of continued financial mismanagement.
The twin solutions are the review of the Public Finance Management Act (PFMA) to introduce hefty penalties for law breakers and the implementation of the new “watertight” Integrated Financial Management Information System (Ifmis).
The PFMA has been weak over the years and despite violating it, most public servants have been going scot free as they have been transferred from one working station to another while Ifmis remains weak and prone to abuse.
In an interview, Secretary to the Treasury Cliff Chiunda said that the review of the Act is at an advanced stage and is expected to be presented in Parliament in June this year.
While describing the PFMA as the most important law, Chiunda said those found violating it will face harsh consequences as the review is stiffening penalties.
He said: “We had Cashgate in 2013, which revealed public finance management weaknesses, which is why we are reviewing the Act and also Ifmis to go live by July 1 this year.
“In the current PFMA, it is difficult for the Secretary to the Treasury to enforce sanctions to non-compliant controlling officers, heads of parastatals and chief executive officers. So, we are revising penalties and finding best solutions of meting them out.”
In an interview, Parliament’s Budget and Finance Committee chairperson Sosten Gwengwe commended Treasury for the progress it is making in ensuring the review of the Act is finalised, presented and passed in Parliament and installing new Ifmis to enforce financial management.
He said: “As a committee, we feel that the Public Finance Management Act is the best tool for dealing with corruption, fraud and mismanagement of public resources.
“It is good that Treasury is emphasising on toughening the law to punish culprits, changing penalties and legal improvements to flush out those who have been hiding behind the law while committing a lot of impunities in government.”
Gwengwe expressed hope that Ifmis will go live on July 1 this year, observing that the Secretary to the Treasury and the Accountant General have in separate instances told the committee similar sentiments.
According to Treasury, the review of the Act is being aligned to the Public Procurement and Disposal of Assets Act and the Public Audit Act.
Between April and September 2013, Ifmis was abused, resulting in the loss of K24 billion public funds dubbed Cashgate, according to a forensic audit by British firm Baker Tilly. The audit established that the money was siphoned from public coffers through dubious payments, inflated invoices and goods or services not supplied.