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Catch 22: The audit report vs. the static predicament

Catch 22: The audit report vs. the static predicament

Ten missing cars and more than two billion birr unaccounted for. Lost, undocumented, misused, and damaged public properties. These were just some of the shocking facts revealed in the report of Gemechu Dubiso, Auditor General, on Tuesday in a presentation to Parliament. The concerns raised by Gemechu and the fact that it is getting from bad to worse had MPs irritated. Subsequently, MPs called for swift action, reports Yonas Abiye.

Once again, the audit report of the Office of the Auditor General has revealed that no significant progress has been made by federal government offices in budget utilization, financial regularities and performances from the previous years.

The newly released report highlighted similar financial frauds, misused budgets the repeated similar wrongdoings and illegal expenses. The core findings of the Auditor General were presented before the House of People’s Representatives (HPR) on Tuesday this week. The report was revealed after having assessed the Financial Appropriateness Audit, Performance Audit and Protection of Basic Services (PBS) in federal government offices.

Even worse, the latest report, more or less, has exposed that the last budget year has seen worsening financial flaws among budget recipient government offices.

Despite strong recommendations and suggesting possible corrective mechanism in the past few years, Gemechu Dubiso, the Auditor General, told the House that instead of shifting from the misconduct, the malpractices and wrongdoings of most of the federal government offices are perpetuating. According to the Auditor General, the fraudulent practices were observed both in the financial and performance audits.

Predominantly, the report singled out the Ethiopian Revenues and Customs Authority (ERCA) and some ten public universities as the worst public institutions which were found to be poorly executing their duties. The report indicated that the aforementioned institutions were engaged in massive financial irregularities. Unaccounted money, improper utilization of budget, excess expending of public money, granting unjustified contractual agreements, poor property management and so on were some of the wrongdoings.

The overall audit report immediately stirred anger among Members of Parliament (MPs) against the entire executive branch of the government. They also called for serious measures to be taken on the responsible heads of institutions and individuals on the basis of each audit findings.

After examining the report, the MPs were shocked by the findings and did not shy away from voicing their frustration.

Just like last year, Gemechu’s 55-page report presented to the House has come with similar findings whereby names and institutions that were mentioned in last year’s report were again included in this year’s report. According to the report, no improvement was made and has even worsened.

According to Gemechu, one area that has seen some level of progress—when compared to the previous year—was that most institutions have shown encouraging commitments to close their accounts and present their audit reports as per the schedule that was set.

Similar to what has been observed in the last two or more years, public universities and some institutions including those at a ministerial level have been accused of unaccounted money. According to the Auditor General, a sum of some 2.08 billion birr was unaccounted for. In that regard, the institutions that were found to have unaccounted finance include Public Procurement and Disposal Service (342.2 million birr), the Ministry of Education (315.1 million birr), the National Electoral Board of Ethiopia (172.2 million birr), the Ministry of Defense (139.25 million birr), Debre Markos University (138.5 million birr), Wolaita Sodo University (85.9 million birr), Haromaya University (60 million birr) and the Ethiopian Revenues and Customs Authority (67.2 million birr) among others.

In addition, some 174 million birr was without ledger in four institutions. Similarly, the audit report revealed that a sum of 118 million birr was uncollected by some 34 offices and 15 branches of  ERCA while one unspecified office failed to collect USD 221,930 from students through tax, duty and other revenues.

Making things worse, ERCA has also failed to collect over 689.7 million birr from direct tax and other forms of tax, according to the findings.

With regards to providing income statement, the audit finding has revealed that six institutions that collect revenue and have it checked and registered by the Ministry of Finance and Economic Cooperation (MoFEC)—as required by law—have not included some 76.7 million birr.

Elsewhere, some 221.8 million birr was also identified by the Auditor General to have been registered without proper documentation. Meanwhile, 56 institutions and four branch offices have been found to have made payments amounting to 61.4 million birr without any regulation and directive.

In addition to that, over 834 million birr was spent by Haromaya, Hawassa and Axum universities for construction purposes yet the contractors and consultants were not legally licensed. The audit report has also revealed that the Ethiopian Revenues and Customs Authority has failed to collect some 1.03 billion birr.

Regarding expenditure, the audit report has revealed that 24 government offices have registered expenditure amounting to 221.8 million birr without providing legitimate documentation. Out of the 24, the main ones are the Ministry of Education (95.5 million birr), Hawassa University (6.4 million birr), the National Electoral Board of Ethiopia (10 million birr), Arba Minch University (8.6 million birr), Mizan Tepi University (5.1 million birr) and Wolo University (4.6 million birr).

In addition, government offices had used more 746.2 million in excess of the budget they were allowed to utilize.

The report also includes details regarding public property management and in that regard, the report has revealed that there were lost, undocumented, misused and damaged public properties both in cash and in-kind.

One case, which amused MPs, is that of 10 vehicles, which belong to the Institute of Biodiversity. The Auditor General was able to confirm that the 10 vehicles have been registered but the whereabouts of the vehicles is not known.

What astonished the MPs is that the case of the missing vehicles came a week after they were told by the Minister of Urban Development and Housing that over 80 condominium blocks were missing.

“Today, we are being told that the whereabouts of 10 vehicles is unknown. Yesterday, we were told that 80 condominium buildings have disappeared. What should we expect to hear tomorrow? I wonder if we will be told that a newly constructed road has vanished,” Dubie Jilo, MP, said. After Dubie—the former long-serving technical director of the Ethiopia Athletics Federation—made that remark his fellow MPs burst into laughter.

“Now, it is time to confront each official in the executive branch,” Mulu Gebregziabher, another MP said, while throwing her stern criticism and utter disappointment with regards to the findings of the audit report.

“This no longer tolerable and those responsible will not get away with it. There is nothing worse and more disappointing than what we are seeing now,” she said.

“Some of the institutions keep blaming the Imperial and Derg regimes for the unaccounted public money. That is no longer acceptable. We should not keep on listening to the rotten excuses,” another soft-spoken but serious MP, Teshome Eshetu, said.

“Of course, some bad practices might have been inherited form previous regimes; however, using that as an excuse year in, year out is a major problem. If that dirt is going to be kept without coming to a lasting solution, the current leadership is doing nothing other than keeping the dirt,” he said, citing a particular finding which indicated that some institutions were not able to do enough to write-off the long-lasting cases of unaccounted money or make any effort to close the matter in any possible way.

Responding to questions asked by MPs, Gemechu said that the major problem of the Ethiopian Revenues and Customs Authority is failure to collect the stated amount of money. And that, according to Gemechu, is because the Authority was not able to apply modern technology that enables it to be more efficient. “Other individuals like hackers use sophisticated technology and are ahead of the Authority,” Gemechu said.

Gemechu further indicated that the Authority was able to collect taxes from some 12 thousands customers using sales register machines yet there are over 80,000 taxpayers who are believed to use sales register machines but are not being properly taxed.

Gemechu further proposed a couple of ideas to address the repeated mistakes committed by universities.

“The universities must only be academic institutions. They should not be involved in procurement or any other related tasks. An independent institution, whose main task would be purchasing goods, should be established. Otherwise, there should be a separate department at the Ministry of Education whose only task would be purchasing items on behalf of the universities,” Gemechu said.

“We don’t need too much or extra budget to establish either the separate institution or the department. The budget this office requires cannot be greater that what the universities are wasting inappropriately,” he said.

After examining the report of the Auditor General, chairman of Government Expenditure Administration and Control Affairs Standing Committee, Mesfin Chernet (Amb.), presented a written motion prepared by the Committee. The motion entirely focuses on taking action on officials whose office is found in serious violation of the laws, is repeatedly failing and is negligent.

The chairman also called on the House and executive bodies to take a swift action and hold audited institutions accountable as per the findings of the audit report.

In its last year’s report, the Office of the Auditor General had found that billions of birr have been spent inappropriately or have remained uncollected, citing this as a recurring challenge to the governmental organizations and institutions in the country.