TI-Rw launched findings from the analysis of causes of weaknesses identified in Districts PFM by the Auditor General's Report

Despite all the efforts and investment done by the GoR in order to improve PFM in all levels, it has been noticed however that PFM at the district and City of Kigali level still remains a challenge. The 2012-13 financial year analysis of district expenditures showed 107.241.260.111 Frws worth of expenditure weaknesses, of which 95% fell for non-budgetary agencies as unrecorded or wrongly booked expenditures. This was just recently confirmed again when the Auditor general reports for the financial year ended 30th June 2014 was published before MPs at Parliament on May 12th, 2015.

Even if the extent of expenditure related weaknesses becomes apparent, the factors leading to errors and misconduct are less clear. In that context, Transparency International Rwanda (TI-Rw) analyzes the findings from the Auditor General’s Reports to better understand the challenges encountered by the budget managers of those institutions which lead to PFM weaknesses as pointed out by Auditor General Reports.

On 10th December 2015, TI-Rw launched findings from the analysis made on the expenditure related and non-expenditure weaknesses in PFM and their causes as highlighted by the AG in his report of the financial year ending June 2014 for all 30 districts and the City of Kigali. The study yielded the following findings:

  1. Again, NBAs were the major cause of financial weaknesses in districts, representing 98.4 % of the total expenditure related weaknesses.
  2. In other expenditure related weaknesses, wasteful and unsupported expenditures have slightly increased compared to 2012/13.
  3. In non-expenditure related weaknesses, non-respect of laws and procedures and posting errors have declined, whereas poor bookkeeping has increased.
  4. The main causes for expenditure related weaknesses in NBAs are linked to systemic factors such as the absence of accountants or professional skills in accountancy, absence of IFMIS/ SEAS in schools and hospitals, etc.
  5. Expenditures with overstatement of payments were mainly due to the fact that districts are understaffed especially in the department of finance.
  6. Most wasteful expenditures were due to expenses related to the fines and penalties as a result of court cases which districts lost. There are also unplanned situations which require the use of public funds without complying with the existing procurement process.
  7. The study showed that the non-respect of laws and procedures can be reasonably addressed if the staff involved in procurement and finance of districts make their mind up in complying with the existing laws and procedures.
  8. Posting errors are linked to the lack of capacity in bookkeeping and lack of internal checking of accounting records.
  9. Districts have performed well in terms of implementing the AG recommendations with an average of 66%. However, six districts achieved only an implementation rate below 60%.
  10. The majority of recommendations from last year’s analysis have not been implemented, especially in regards to NBAs. No additional training was conducted, the auditing of NBAs has not been strengthened, SEAS and IFMIS have not been rolled out for some NBAs. As a result, financial weaknesses in NBAs have not significantly decreased this year.

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