Finance chief issues warning on P10 billion special funds
By Alfred Masokola
The decision by government to transfer management of special funds from Ministry of Finance and Economic Management to individual ministries and departments could have been ill-advised according to Permanent Secretary in the Ministry of Finance, Solomon Sekwakwa.
Despite Minister of Finance Kenneth Matambo assuring parliament in February this year that public assets and special funds under the custody of government are safe, his right hand man holds an altogether different view. Sekwakwa told the Public Accounts Committee (PAC) this week that exposing government funds to too many hands to handle renders them unsafe and prone to abuse by those at the helm.
"There more number of people accounting for these funds, the bigger the risk. It will be better to reduce the risk by limiting people responsible for these funds," Sekwakwa advised. "I prefer a situation where only one pula is stolen by one person accountable, compared to having many people accountable stealing one pulas (each), which means the risk is increased."
The finance chief, despite being the custodian of Public Finance Management said he was not involved in the transactions relating to National Petroleum Fund, because the NPF fund order provides that accounting officers at the responsible ministry [Ministry of Minerals, Green Technology and Energy] have full authority.
Sekwakwa revealed to the PAC that had the Directorate on Intelligence and Security Services (DISS) spent the money on what it initially requested for, it would have been proper. He however contended that the purchase of security related equipments was contrary to the NPF fund order. The PAC was informed that as per the current laws governing different funds, projects carried out in line with specific mandates of the funds are not supposed to be approved by parliament unlike those planned from the consolidate fund.
Sekwakwa said this anomaly was created by parliament and can only be changed by parliament through legislative instruments to better manage the funds. He also recommended government to be cautions not to create more special funds, contending that already there are too many funds. The finance PS told the committee that already there are over 30 [33] Special funds, with over P10 billion worth of funds. Four Special Funds were managed by Private Fund managers valued at P1, 8 billion as at March 31st 2017, Matambo revealed to parliament earlier this year.
Legislators, both in the ruling and in opposing ranks have been growing worried about the special funds and their accountability since the NPF financial scandal entered the public domain. In February this year, when debating the Budget for the year under review (2017/18), Specially Elected legislator Bogolo Kenewendo said the minister of finance was not in control of the special funds, which created accountability concern because of too many loopholes.
"The Vocational Training Levy does not appear in the government accounts but it appears as a problematic item in the Auditor's report. That is problematic because it shows the loopholes in our public finance system and they need to be closed because they bring questions to the credibility of the system that we have been celebrating over the years," she contended. "I think as a recommendation, we need to tighten these systems and ensure that all the withdrawals are supervised and authorised by ministry in charge of our public finances."
Kenewendo, who has since been appointed Minister of Investment, Trade and Industry, shared the view with Sekwakwa that some of these special funds should be reviewed, and if they are no longer relevant, government should take a decision to close them.
The law provides that if the need for a Special Fund is fulfilled or ceases to exist and in the opinion of the Minister there is no likelihood that any objects for which the Fund could be lawfully used will arise in the future the Minister may, by order, dissolve the Fund and the moneys remaining in such Fund shall thereupon be paid into and form part of the Consolidated Fund.
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