New State Finance Act

panacea to corruption?

A former member of the Public Accounts Committee has called for the urgent tabling of the new State Finance Bill in order to guard against corruption, wasteful expenditure and mismanaging of public funds.
Johan de Waal, the former chairman of the opposition party, DTA, believes that if authorities are serious about fighting corruption and wasteful expenditure, a new State Finance Act that will bring penalty clauses for Accounting Officers that do not adhere to the established rules on public expenditure, should be implemented without delay.
He said: “The new bill should be tabled in Parliament this year. Whenever the new State Finance Act prohibits Accounting Officers from certain actions like unauthorised expenditure, the opening of unauthorised bank accounts or ignoring Treasury Instructions, the Act should have appropriate penalty clauses so that Accounting Officers that do not adhere to the rules can be punished for their wrong doing.”
The former MP said it is also essential for audit reports from the Auditor General to be published on time and in line with the time-lines prescribed in the current State Finance Act adding that such audit reports are the only mechanism available for the public to judge the effectiveness of the financial management of government ministries, offices and agencies as well as regional and local governments.
“The new State Finance Act should thus strengthen these time-lines and ensure, by way of penalty clauses, that Accounting Officers adhere to these time-lines,” he said. Further, de Waal said, all audit reports should be tabled in Parliament before the tabling of the next budget in the National Assembly although he concedes that audit reports will always be one year late.
“In other words audit reports for the financial year ending 31 March 2012 must be tabled in Parliament before the tabling of the budget for the financial year 2013/2014. This will enable Members of Parliament, and the public, to judge the effectiveness of the financial management of entities before they approve or reject their next budget.”
As analogue, de Waal said if the law says you are not allowed to drive faster than 60kph in an urban area and you are caught driving 100kph, but nothing happens to you, people will drive faster and faster.
“Therefore if you make a rule to protect the safety of drivers, passengers and pedestrians you must enforce that rule by way of penalties.”
“Similarly if you make a rule to protect the taxpayer and the general public against corruption, wasteful expenditure and mismanaging of public funds you must enforce that rule by way of penalties. If not, some Accounting Officers will become more and more reckless with disastrous consequences.”
According to de Waal, the initiative to draft a new State Finance Act came from the Ministry of Finance, however when the Public Accounts Committee realised that there are no penalty clauses in the current act, “we drafted a number of proposals to the MOF to correct the situation in the new Act.”
Aldrin Manyando, the Public Relations Officer in the Ministry of Finance says the new State Finance Act is still in the consultation phase. He says the process is taking too long because many stakeholders need to be involved. He added that there is no time frame for the finalisation of the consultations but as soon as they are complete , the Bill will be tabled in parliament.