4.6.8 Absence of Assets Register for the Fund
Accounting Officer’s Instruction clearly states the need for assets under the Fund to be recorded in an asset register clearly marked with the name of Fund. The Audit observed that the Fund was not maintaining a separate register from its parent Ministry. As a result, the assets belonging to the Traffic and Legislation Fund could not be identified and verified form those of the Ministry.
The Permanent Secretary informed the Committee that there were administrative lapses and the Ministry now maintains a separate asset register for the Fund.
4.6.8.1 The Committee recommends that the Ministry should, by 31st August 2017, submit to Parliament an asset register for the Fund.
4.6.9 Failure to maintain ledger accounts for depreciation
Audit observed that the Fund did not maintain ledger accounts for depreciation. As a result, the rates applied in the calculation of depreciation were different from those provided in the accounting officer’s instructions resulting in a net understatement of depreciation in the 2013 financial statement by $77 676. The Permanent Secretary informed the Committee that the ledger accounts for depreciation were now in place and that correct rates were now being used.
4.6.9.1 The Committee recommends that the Ministry submit to Parliament the ledger accounts for depreciation by 31st August 2017.
5.0 CONCLUSION
The Committee draws a general observation that the Ministry has no separate accounting units within its structure to oversee the administration of each of the four Funds under its purview, save for, the Central Vehicle Registry. This arrangement is the main source of the numerous challenges and inefficiencies confronting these Funds. There is one Chief Accountant responsible for the administration of these Funds in addition to the Appropriation Account. Consequently, the state of governance in the administration of the Funds leaves a lot to be desired. The Constitutions are very clear on the need for Management Committees to oversee the day to day administration of these Funds, but this has been ignored and there are no consequences for such non adherence to the regulations. These have to be constituted as a matter of urgency.
The attitude of the Permanent Secretary as the Accounting Officer in respect to audit issues makes a mockery of the Office of the Auditor General. This has been displayed in the manner he has responded to audit observations which did not tackle the issues at hand. The PFMA is very clear on the need to cooperate with auditors in the process of executing their constitutional mandate. To say the least, the Permanent Secretary had shown disregard for the work of the Audit office as similar issues are raised year after year without corrective action being taken. He had also shown disregard for laid down policies and procedures as he was not apologetic for violating Constitutions of Funds under the Ministry.
He had further shown disregard for the Treasury in failing to seek approval for operating outside the regulations when situations demanded so. The Permanent Secretary displayed a lax attitude even when he responded to questions put to him by the Committee. The Committee gave stern warning to the Permanent Secretary to reflect on his conduct and ensure that he provides that assurance that he is properly managing public funds in line with laid down policies and procedures.
Lastly, as observed in other Ministries, Funds are generally poorly managed by Ministries when compared to Appropriation funds as demonstrated by the Ministry of Transport and Infrastructural Development. Going forward, Treasury should direct that all revenue collected under various funds be deposited into the Consolidated Fund before it can be disbursed to Fund Administrators to ensure proper utilisation. I thank you.
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