The 2011
Director of Audit’s Report shows that wastage
and unnecessary expenditures have continued unabated. It
is unacceptable that at a moment where everyone was bearing the brunt of the
continuing global and the consequent local slowdown, the Ministry of Finance
(MOF) was profligate with taxpayers’ money doling out some Rs 21 million rupees
in overtime over the last three fiscal years
plus the avoidable expenditures on
the Service to Mauritius and Capacity Building schemes and on the recruitment
of IT specialists , draughtsmen, family welfare officers, you name it, as
economic analysts. It is not surprising that overtime has become a recurring
feature at MOF. The Ministry of Finance is supposed to be a role model for
others, an example in terms of “ efficiency
and effectiveness” of expenditures.
Other Ministries are frequently required to provide justifications for their hard-earned
overtime figures or for the new personnel being recruited. The mindset changes
when the same logic is expected to be applied to them.
Such
overtime is inconceivable from a mega-ministry that has merged three cadres-
the Finance Management Analysts of the ex-Management Audit Bureau, Economists
of the ex-Ministry of Economic Development (MED) and Budget Analysts of the
Ministry of Finance (MOF). Pre -2006,
before the merger, there were less than 20 economist and analysts working on
the Budget and on the Medium-Term Expenditure Framework/Programme Based
Budgeting (MTEF/PBB). With the merger of two ministries and the ex-Management
Audit Bureau, there are some 100 economists, analysts and accountants involved
in the budget exercise. Moreover many of these officers have been earning over
generous budget and responsibility allowances - to the extent of Rs 100,000-for
budget work which is one of their main duties. The Rs 21 million overtime plus the millions
distributed generously through allowances cannot be justified given that MOF has had an overly budgetary focus over
the past years and had been completely absent on planning and policy making, on
reform strategies, on issues of national importance and on sectoral analyses to
support growth. There is no research, analysis and evaluation work that is presently
being carried out -which had been the core activities of the earlier MEPD- the
very core competencies that our taxpayers can rely upon to resolve our national
problems and challenges.
Strengthening
of Planning
The 2011 Director of
Audit’s Report also notes that it “ would
like to see a strengthening of the economic planning process. ... it is only
when the work on strategic planning feeds into the development of the MTEF/PBB
that the process improves, otherwise
it might boil down only to an incremental accounting exercise” . The National
Audit Office (NAO) recommends a “revamping
the planning function and... ensuring that issues are raised and discussed at
the technical levels in advance in order to facilitate the work of
policy-making”. ” Where the NAO got it wrong is on the 10 year
Economic and Social Transformation Plan (ESTP). The ESTP is a non-starter. The
planning dialogue of MOF with line ministries has not cleared things; there is
ample confusion and uncertainty about the vision, the policy
orientations/strategies and the Plan. Preliminary data and relevant information
have not been collected scientifically and analysed comprehensively on a
sector-wise basis for the whole economy. What the NAO is looking for in the “ production of detailed analyses of the
existing policies and their costs, as well as a review of other policy options
that may enable government to achieve policy objectives more effectively ”
is a body like the National Strategic
Transformation Commission (NSTC)- a full-fledged Planning Unit that can carry out in-depth
holistic analyses at both micro and macro levels and chart out a forward
looking dynamic vision of the country responding to the aspirations of its
people- not a mere assemblage of inputs
from different quarters that are then presented as a new vision but a work that requires constant re-thinking and
analysis, reflection and research, demanding greater coherence and coordination
across sectors in the formulation and implementation of comprehensive and integrated medium to long term policies and programmes.
Programme-Based Budgeting (PBB): Some Improvements.
The
2011 Director of Audit’s Report acknowledges that “budget management and process have significantly
improved since the introduction of Programme-Based Budgeting (PBB) in Mauritius.”
The Report also hints on some possible areas of improvement. There are some crucial
improvements that are badly needed now so that the PBB does not remain a mere theoretical
tool failing to deliver in terms of enhancing fiscal discipline, bringing
efficiency gains and promoting good governance in a more outcome-oriented
public sector. The first step is to have
good policies that can only result from proper analysis. Review sectoral
policies and formulate 3-year strategic plans that are used as planning and
management tools while ensuring that proper economic analysis of programmes and
projects lead to the prioritization and the costing of programmes. This will
form the basis of the policy rationales behind the ceilings and allow for
greater acceptance of the ceilings by ministry policy makers.
No significant budgetary reforms are likely
to succeed unless a robust and functioning accounting, reporting, monitoring , evaluation
and implementation facilitator/delivering system is in place. And the
second step is to upgrade the system of evaluation of projects and programs
which is quite weak in many ministries. Evaluation generally takes the form of
financial audits. Few examples of engineering and quality control assessments
for major capital projects exist. Similarly, there are rare examples of cost
effectiveness studies. The Project Plan Committee (PPC) unfortunately does not
foot the bill. Attempting performance audit without agreed
performance benchmarks and proper systems to record and track and evaluate
performance is equally unlikely to be effective. These are some of the basics that
must be satisfied for the PBB to be effective- “real” performance and policy-based
budgeting - a PBB that secures delivery of government’s major domestic policy
priorities.
No need to shoot the
messenger
Instead of shooting the messenger,
we believe that the whole system of checks and controls- especially the internal
control units, the audit committees, the Public Accounts Committee and the
Public Finance Management legislation- can
be improved to become really effective. The Internal Audit reports are forwarded
to MOF. Management, including MOF, is
required to prepare an action plan on agreed recommendations and the timing of
their implementations. The 2011 PUBLIC EXPENDITURE AND FINANCIAL ACCOUNTABILITY
(PEFA) ASSESSMENT had noted that there was no formal follow-up and monitoring
of recommendations made by internal audit. The Office of Public Sector
Governance (OPSG), in the Prime Minister’s office monitors the implementation
of the recommendations of the Director of audit report. As for the Public Accounts Committee, it holds
hearings with accounting officers to answer related to the annual audit report.
Minutes of the meetings of these hearings have been taken but no reports of the
proceedings have been issued and no recommendations have been made.
But the system can be improved by (i) strengthening internal audit unit which will require establishing and
specifying its functions and its reporting lines, (ii) reintroducing well designed audit committees
with mandates and well defined operational procedures: membership (external
independent members, qualifications), number of members, appointment process,
appointment of chairperson, fees, number of meetings, (iii) introducing
Information Technology facilities and methodologies to perform internal audit,
and (iv) increase training and mentoring opportunities for junior staff in the internal
audit unit focusing on advancing their qualification and also at further
improving the quality of internal audit work. (v) providing the resources , including where
appropriate technical support and allowances to PAC and ensuring that the
proceedings of the PAC are held in
public and (vi) furthering reform of Public Financial Management with
appropriate sequencing for the introduction of greater accountability in
Ministries and departments.
