By PHILLIMON MHLANGA
PARLIAMENT has approved the government’s spending between January and July amounting to billions of dollars amid revelations that Treasury wants MPs to condone unauthorised spending incurred during former President Robert Mugabe’s rule, Business Timescan report.
Ministry of Finance officials have been preaching that the government was now living within its means. But Auditor General Mildred Chiri lifted the lid on irregular or wasteful government expenditure this year.
According to analysts, the government has a record of unauthorised expenditure. In fact, by failing to adhere to the approved budget, it violates the Public Finance Management Act.
This could have caused the government to lose billions of dollars due to laxity in Treasury internal control systems, delinquency and the lack of compliance with the Act. Therefore, public funds have not been properly accounted for.
The violation of the Appropriation Act and the Public Finance Management Act means there could be rampant abuse of public funds in government.
Finance Minister Mthuli Ncube told Business Times that the government’s irregular spending between January and July this year, amounting to billions of dollars, were sneaked into the now approved ZWL$10.85bn Supplementary Budget announced on 1 August.
“For 2019, everything is sorted out through the Supplementary Budget. We included [the unapproved expenditure] in the Supplementary Budget. So, it means all unapproved expenditure between January and July 2019 has since received condonation, approved by Parliament. As I speak we have got all the approvals and we are now up to date on that,” Ncube told Business Times.
The government has been incurring budget overruns worth billions each year since 2014 under former President Mugabe, without Parliament’s approval. The government and the Treasury accounting system have been in shambles, meaning billions of tax payers’ money could have been looted without trace.
Ncube hinted that he was contemplating to seek another condonation from Parliament for the period between 2014 and 2018. Mugabe was in power up to November 2017.
President Emerson Mnangagwa took over from him in November 2017.
“We are having a look at 2014 – 2018,” Ncube said. “I am sure you appreciate it’s a mechanical process, but I will seek another condonation from Parliament for these unapproved budgets that happened before I came in as finance minister.
The Parliamentary Public Accounts Committee, chaired by the MDC legislator Tendai Biti, expressed disquiet over the budget overshoot, saying the government had a record of running two budgets at the same time: one that is authorised by Parliament and a parallel one which is unauthorised.
According to Biti: “The government runs two budgets. The first one is approved formally by Parliament after presentation by the Finance Minister in November each year. But there is this other parallel budget which we don’t approve. Money goes out through the Ministry of Finance, to make it worse, without supporting documents. It now shocks me and the Committee [PAC]. I think we need helmets and shock absorbers because it’s a horror story.”
Biti went on: “We only get to know about it through [Mildred] Chiri’s audit reports and it involves billions of dollars used without approval. When the gatekeeper has become the gatecrasher, you need to pray. This is pure abuse of tax payers’ funds and regrettably it’s a tragedy. It’s a narrative of state failure.”
He said there were so many vulnerabilities in government, including weak legal environment, weak internal audit, and the issuance of Treasury Bills now being used as an instrument of avoiding parliamentary scrutiny.
“If the Auditor General gives her reports, there is no mechanism to follow up. Reports as far back as 2014 show irregularities, but there is still recurrence today of the same problem. The Ministry of Finance disturbs me. There are several instances of non-compliance, yet it’s the godfather. Since 2014, you find that there are warrants issued, no financial statements prepared. Every Tom and Jack can borrow, and then later force the government to adopt that debt. There is non-compliance with the law,” Biti said.
Biti singled out the Reserve Bank of Zimbabwe as the big culprit as “the issuance of TBs is now an instrument to avoid parliamentary scrutiny”. This week, Biti had a big fight with the RBZ governor, John Mangudya, in Parliament over TBs.
Biti said the TBs were a source of vulnerability. But Minister Ncube told Business Times that Parliament does not “necessarily need to approve the issuance of TBs [because] when they approve the national budget, they will be partially approving TBs, which the government uses to deal with deficits and other business.”
Economist John Robertson said: “There is no danger of raising money for working capital through TBs, but it’s bad to fund budget deficits. It’s bad for the government to issue new TBs to deal with deficits. The problem with TBs is that when you lend at 15%, that rate of return is too low compared to the hyperinflation rate.”
