Finance PS explains audit worries
The Bank of Namibia was asked to assist by taking over the settlement of accounts in order to ease staffing requirements at the ministry.
Jana-Mari Smith - Finance ministry officials met with a parliamentary standing committee on public accounts last week to offer insight into a number of questions raised by performance reports for the financial years 2012 to 2015 issued by the auditor-general’s office
The three people representing the ministry, led by permanent secretary Ericah Shafudah, were asked to shed light on a number of issues of concern.
These included a major finding by the auditors that a recommendation to structure the debt office in line with international best practices had not been implemented to date.
Moreover, the committee asked that the ministry respond to an audit finding that “there is a lack of a clear and comprehensive legislative framework specifically on public debt management which inhibits the ministry’s ability to effectively manage public debt”.
Shafudah explained that due to costing concerns, the ministry decided to delegate some of the functions that would be addressed through a restructuring to staff members already employed at the ministry.
Moreover, the Bank of Namibia was asked to assist by taking over the settlement of accounts in order to ease staffing requirements at the ministry.
She said while staff members had been slightly “overloaded” as a result of tasks delegated to them, and the ministry would in the long term consider looking at an increase of staff to conform to the auditor-general’s restructuring recommendation, at the moment such a restructuring would be too expensive.
Legislative concerns
In regard to the legislative concerns, Shafudah said the current State Finance Act was clear on the management of public debt.
She added that regulations and operating guidelines added another level of control.
The standing committee’s chairperson, Mike Kavekotora, said the crux of the matter to which the auditors were referring was fact that the current law lacked enforcement tools and asked how the ministry was addressing this concern.
Shafudah said the revision of the public finance bill was under way and would cater for all aspects not clearly addressed in the current law. She said the bill was in an advanced stage.
Lack of cooperation
The third committee question revolved around the limited involvement by the National Planning Commission (NPC) when it came to public debt management, as per the auditors.
The performance report had noted that “failure to prioritise national projects to be funded may result in projects being funded that do not contribute towards the achievement of the national development goals.”
Shafudah explained that the ministry and the NPC worked together as per the NPC’s mandate, which was to appraise and recommend projects or programmes submitted to the institution by various government organs.
She said if the NPC did not approve a project or programme, the ministry complied and did not pursue it.
She said as such there was collaboration and cooperation but admitted that in terms of debt management more involvement from the NPC was needed and legislative or regulatory changes could assist with that.
Online system
The fourth question was based on the auditor-general’s finding that the ministry had not used an online system, the Commonwealth Secretariat-Debt Recording and Management System, to its full capacity and that training on the system was not comprehensive enough.
This, the auditors found, made the oversight and control of public debt ineffective.
According to Shafudah and the deputy director of cash and debt management at the ministry, Marten Ashikoto, the system had limited capacities and was developed mainly for recording foreign debt.
Despite its limitations, including the inability to link the system to other systems used by the ministry and other financial institutions, the ministry had customised additional functionalities, including the recording of domestic debt, she said.
Shafudah and her team were also asked to respond to the auditor-general’s finding that risk assessment was not done on monitoring and assessing foreign debt transactions and no risk assessment documents could be provided to the auditors.
Shafudah said despite this finding, in her view the risk management team was “doing very well” despite some challenges, and the ministry had “prudently borrowed”.
The three people representing the ministry, led by permanent secretary Ericah Shafudah, were asked to shed light on a number of issues of concern.
These included a major finding by the auditors that a recommendation to structure the debt office in line with international best practices had not been implemented to date.
Moreover, the committee asked that the ministry respond to an audit finding that “there is a lack of a clear and comprehensive legislative framework specifically on public debt management which inhibits the ministry’s ability to effectively manage public debt”.
Shafudah explained that due to costing concerns, the ministry decided to delegate some of the functions that would be addressed through a restructuring to staff members already employed at the ministry.
Moreover, the Bank of Namibia was asked to assist by taking over the settlement of accounts in order to ease staffing requirements at the ministry.
She said while staff members had been slightly “overloaded” as a result of tasks delegated to them, and the ministry would in the long term consider looking at an increase of staff to conform to the auditor-general’s restructuring recommendation, at the moment such a restructuring would be too expensive.
Legislative concerns
In regard to the legislative concerns, Shafudah said the current State Finance Act was clear on the management of public debt.
She added that regulations and operating guidelines added another level of control.
The standing committee’s chairperson, Mike Kavekotora, said the crux of the matter to which the auditors were referring was fact that the current law lacked enforcement tools and asked how the ministry was addressing this concern.
Shafudah said the revision of the public finance bill was under way and would cater for all aspects not clearly addressed in the current law. She said the bill was in an advanced stage.
Lack of cooperation
The third committee question revolved around the limited involvement by the National Planning Commission (NPC) when it came to public debt management, as per the auditors.
The performance report had noted that “failure to prioritise national projects to be funded may result in projects being funded that do not contribute towards the achievement of the national development goals.”
Shafudah explained that the ministry and the NPC worked together as per the NPC’s mandate, which was to appraise and recommend projects or programmes submitted to the institution by various government organs.
She said if the NPC did not approve a project or programme, the ministry complied and did not pursue it.
She said as such there was collaboration and cooperation but admitted that in terms of debt management more involvement from the NPC was needed and legislative or regulatory changes could assist with that.
Online system
The fourth question was based on the auditor-general’s finding that the ministry had not used an online system, the Commonwealth Secretariat-Debt Recording and Management System, to its full capacity and that training on the system was not comprehensive enough.
This, the auditors found, made the oversight and control of public debt ineffective.
According to Shafudah and the deputy director of cash and debt management at the ministry, Marten Ashikoto, the system had limited capacities and was developed mainly for recording foreign debt.
Despite its limitations, including the inability to link the system to other systems used by the ministry and other financial institutions, the ministry had customised additional functionalities, including the recording of domestic debt, she said.
Shafudah and her team were also asked to respond to the auditor-general’s finding that risk assessment was not done on monitoring and assessing foreign debt transactions and no risk assessment documents could be provided to the auditors.
Shafudah said despite this finding, in her view the risk management team was “doing very well” despite some challenges, and the ministry had “prudently borrowed”.
Kommentaar
Republikein
Geen kommentaar is op hierdie artikel gelaat nie