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Accountant General blasts government’s financial mismanagement

Business

Kananelo Boloetse

The Accountant General, ‘Malehlohonolo Mahase, has raised serious concerns about the growing disregard and undermining of public financial laws, highlighting a troubling trend that threatens the integrity of government operations and exposes the state to significant avoidable losses.

“There is lax by those responsible to comply with the Public Financial Laws,” Mahase stated in her report, part of the Consolidated Financial Statements of the Government of Lesotho for the year ending March 31, 2022.

The consolidated financial statements were tabled in parliament by Finance and Development Minister, Dr. Retšelitsoe Matlanyane, this week.

Mahase’s report paints a stark picture of financial mismanagement and regulatory non-compliance. She pointed out that the illegal hiring of staff on a temporary basis is a significant issue.

“Lately, there seems to be a lot of temporary appointment of personnel across the government that exceed six months contrary to Public Service Regulations, 2008,” Mahase said.

She stated that according to these regulations, temporary employment cannot exceed six months. However, she highlighted instances where ministries engaged temporary officers for up to three years without proper authorisation.

“Contract appointments are expected to be done by the Public Service Commission, or through their delegated authority. The contract appointments are also done for a special skill,” Mahase explained.

Yet, ministries have been bypassing this process, leading to illegal appointments and a substantial financial burden on the government.

“It should be noted that the officers are engaged illegally, and there is a high outflow of cash for terminal benefits for the officers every three years. The drawbacks of these engagements are increased wage bill and short-termism which results in loss of institutional memory,” Mahase detailed.

Mahase further criticised Chief Accounting Officers (CAOs) for their persistent delays in submitting financial reports, noting that this issue continues to hamper effective financial oversight.

“The submissions were done from July 2022 to the week of August 2022. CAOs must start to own the preparation of the reports for their spending units so that they are able to account for their budgets and the level of service delivery,” Mahase urged.

She disclosed that the ministries of social development, communications, science and technology, and trade and industry were the last to submit, with the Ministry of Foreign Affairs providing an incomplete report due to missing records from the Lesotho Embassy in Japan and Johannesburg.

“Late submissions and incomplete records prohibit the Financial Reporting Team from adequately scrutinising the submission. This is the key factor that hinders improvement on the quality and timely reporting of the Annual Financial Statements,” Mahase said, highlighting the systemic inefficiencies that plague the government’s financial reporting mechanisms.

In another revelation, Mahase disclosed an outstanding penalty amount of M7,534,699 for officers who violated binding agreements, failing to serve the government for the stipulated period of post-study leave.

“It seems officers leave the service before the stipulated five years. This amount has been accumulating for many years. It seems also that there is no enforcement for this provision by the relevant ministries together with the Ministry of Public Service,” she said.

Mahase also disclosed a troubling financial anomaly involving the Ministry of Forestry.

“There is cash amounting to USD 7,000 that has been held for a while now at the Ministry of Forestry. The cash is purported to be a grant from the Japan International Cooperation Agency for the rehabilitation of Ha Koali Forest Reserve in Quthing,” Mahase revealed.

“I requested details of the grant per the advice from the Financial Intelligence Unit because it is abnormal that external assistance can be sent from one country to another in cash form through an officer. There has not been any response from the Ministry of Forestry. Some critical issues have to be cleared to ensure that the grant meets all the requirements of the Anti-Money Laundering legal framework,” she added.

On a rare positive note, Mahase expressed her gratitude to the First National Bank (FNB) for saving the government M5.2 million.

Alarmingly, she disclosed that the Ministry of Health, through the Queen Mamohato Memorial Hospital (QMMH), was about to pay a supplier M5.2 million.

“The bank did the due diligence and found out that the supplier was not a registered vendor of the software that was supplied or to be supplied,” she said.

“They also did a background check on the profile of the supplier and were not convinced that the supplier does not have any digital footprint and could not be able to deliver the required service, therefore the payment was stopped with the help of the bank,” she added.

In conclusion, Mahase acknowledged improvements in the consolidated financial statements over previous years but stressed that sustaining these gains and further enhancing financial reporting quality require the continued cooperation of CAOs, finance officers, and other departments within the Ministry of Finance.

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