Thursday, February 9, 2023
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BusinessGov't to cut cost across all agencies

Gov’t to cut cost across all agencies

Ministry of Finance & Economic Cooperation (MoFEC) ordered federal budgetary institutions to submit their budget reduction action plans by the early weeks of September 2017, following the issuance of a new directive which orders federal agencies to cut all unnecessary expenses.

“So far none of the offices have submitted their action plan,” said Haji Ibbsa, communication director of the Ministry.

A letter issued by Abrham Tekeset (PhD), Minister of Finance and Economic Cooperation, circulated to federal offices stressed on a need to reduce expenses and be cautious of the way the federal agencies utilize their budget. The letter sent to the agencies stated that every budgetary offices is required to fill a form which has to clearly indicate its action plan on how to reduce unnecessary cost.

The directive listed a number of activities and purchase practices which they should take into consideration.

Upon a decision by the council of ministers, MoFEC has been instructed to identify ways to minimize expenses and ensure effective and cost wise utilization of the country’s budget.

In this regard, the directive gave a strict order to the government offices to give more emphasis to the program budgeting system. In addition, they were given a notice to focus on minimizing cost while implementing the system.

Concerning the program budget system, the directive prohibited budget shifts and request of additional budget which is not in line with the annual goal of the program budget submitted to the ministry.

In addition to this, the directive listed around 19 different purchase activities under recurrent expenditure that should be taken into consideration by the federal offices while using their budget.

In this respect, as far as over time payment to public servants is concerned the payment has to be approved by the Ministry of Public Service and Human Resource. It also noted that such payments are been manipulated in some agencies like public universities costing the tax payers their hard-earned resources.

Those payments at universities have to rectified, reads the directive.

The directive has also puts a strict embargo on unnecessary foreign travel by staff members of government agencies. The Prime Minister’s Office has now the mandate to approve such travels as it sees fit.

The other item on the prohibition list is the procurement of promotional materials such as printed paper, note books, pens, calendar, agendas, and yearbooks and so on. Yet again, common user items like stationeries are also among the things whose consumption has to be reduced significantly.

In return, they are now given the option to focus on information systems which is being used by every government institution.

Moreover, government offices are also allowed to serve only water and coffee while hosting workshops, seminars and different meeting during the budget years. It is also forbidden to purchase t-shirts, bags and cultural dresses which has become a common practice across government institutions.

In the same token, the offices are not allowed to advertise themselves via mass media and/or sponsor different events. Not only that, government agencies and public universities are not allowed to give a donation to any organization or individual other than physically impaired university students.

As far as capital expenditure is concerned, budgetary offices are not allowed to execute projects which were not included in the budget.

The offices are also required to have a strict project management system to ensure the efficiency, proper execution and cost effectiveness of government projects.

This particular directive came just after the government started to crackdown on corruption resulting in the arrest of a number officials and business people in the country. In most of the case, the accused are either implicated with construction projects or public procurements contracts.

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