Is every official & institution in TPLF’s Ethiopia thief & corrupt? So seem to put question marks the Auditor-General’s finds!

17 Jun

Posted by The Ethiopia Observatory (TEO)

In his speech to parliament to report budget performance of the TPLF administration for the year 2014/15, Auditor-General Gemechu Dubiso pointed out:

    “የ2006 በጀት ዓመት ሂሳብ በወቅቱ መዝጋት ያልቻሉ መ/ቤቶች ከጠቅላላው ከ52% በላይ ናቸው፡፡ ይህ መሻሻል ሲገባው እየባሰበት የመጣው የባለበጀት መ/ቤቶች ሂሳብን በወቅቱ ዘግቶ ለኦዲት ያለማቅረብ ጉዲይ በአንክሮ ሊታይና ተገቢው ህጋዊ እርምጃ መውሰድን የሚያሻው ጉዲይ ነው፡፡…

    … ከመንግሥት ግንባታዎች ጋር በተያያዘ በተለያዩ ምክንያቶች በወቅቱና በተያዘሊቸው በጀት ያለመጠናቀቅ ችግር፤ መፌትሔ ሣያገኙ ለረጅም ወራትና ዓመታት ጭምር የግንባታ ሂደታቸው የቆሙ ፕሮጄክቶችና የሚገናቡ ፕሮጄክቶች ጥራት አፊጣኝ እርምጃ የሚያሻው በመሆኑ ትኩረት ተሰጥቶ ሊፈታ ይገባል…

    በወጪ የተመዘገቡት ሂሳቦች በፊይናንስ አስተዳደር አዋጅና ደንብ መሰረት በአግባቡ የተፈጸሙ፤ እንዱሁም መ/ቤቶቹ ላገኙት አገልግልት የተፈጸመ መሆኑን ለማጣራት ኦዱት ሲደረግ፡ በ11 መ/ቤቶች ለተለያዩ ግንባታና ግዢዎች ብር 28,175,126.27 እና በ16 መ/ቤቶች ደግሞ በውሎ አበልና ለሌሎች ክፍያዎች ብር 4,897,884.43 በጠቅላላው ብር 33,073,010.70 በብልጫ ተከፍሎ ተገኝቷል፡፡

    …በብልጫ የተከለው ሂሳብም በግዢ ሂደት ዝቅተኛ ዋጋ ያቀረቡ እያለ ያለበቂ ምክንያት ከፍተኛ ዋጋ ካቀረቡት ዴርጅቶች ግዢ በመፈጸም፤ በዴጋሚ ወጪ በማዳረግ ወይም ከተገባው ውል ውጭ በመክፈል፣ ከውሎ አበል ተመን በላይ በመክፈል፣ እንዱሁም ለትርፌ ሰዓት፤ ለተለየያ ጥቅማ ጥቅም እና ለመኖሪያ ቤት አበል ከተተመነው በሊይ በብልጫ የተከፈለ መሆኑ የሚለት ይገኙበታል፡፡ ሊከፈል ከሚገባው በላይ ወጪ ማድረግ የመንግስት ሃብት ለብክነት የሚዲርግና ለሙስናም በር የሚከፍት ይሆናል፡፡”
    ≈≈≈≈≈≈≈≈≈≈

    “The latest report by the Auditor General has also shown that the executive has spent billions without following the appropriate rules of the game. So much remains unaccounted for that it has become all the more difficult to distinguish money spent on the right thing from money siphoned off illegally.

    ….As it stands, the nation’s budgeting system does not provide the legislature clear, measurable and accountable targets to check the performance of the executive. Hence, the whole debate over the report of the OAG has been limited to accounting principles….

    There is no established linkage between budgeting and deliverables in Ethiopia. The entire budgeting process is guided by subjective assumptions. And in all cases, the assumptions are macro in nature. They are not sufficiently detailed to be used as instruments of oversight.”
    – Addis Fortune

 


 
Addis Fortune Editorial

Transition to Performance-based Budgeting Essential to Fiscal Accountability

Incessant animosity defines the relationship between the Office of the Auditor General (OAG) and the executive branch of the government, now under the watchful eyes of Prime Minister Hailemariam Desalegn. The nexus was no different during the time of the late Meles Zenawi. There even was a time that the late premier derided the OAG as an institution that commits mistakes, “not even a junior accountant would entertain.”

Times have changed, as has the leadership structure within the ruling EPRDF, but not the relationship between the OAG and the executive. The latest report by the Auditor General has also shown that the executive has spent billions without following the appropriate rules of the game. So much remains unaccounted for that it has become all the more difficult to distinguish money spent on the right thing from money siphoned off illegally.

For yet another round, the spoilage seems to reside in the club of flourishing public higher education institutions. Various ministries, agencies and authorities have also been implicated in the finding. Reading through the report leaves one with a sense that something systemic is missing. It seems as though laxity has become the new normal in the executive branch of the government.

A complete understanding of the problem is not possible without taking the legislature into the picture, though. After all, the OAG is answerable to the parliament. Considering the constitutional power the legislature has over the executive, then, the OAG is placed in what could be considered an authoritative position to call the executive to account. If anything, it is the practical power the legislature dispenses, that defines the power conferred on the OAG.

As far as the power dynamics in the political sphere goes, the legislature appears to be weaker than the executive. In a way, the personality of Meles, who stayed on the throne for over two decades, as president during the transitional times and as prime minister thereafter, has swayed the whole balance in the direction of the executive. This situation has been exacerbated with the complete control of the legislature by the EPRDFites since 2010.

Consequent to the electoral dominance of the EPRDFites, which is set to continue for five more years, the traditional system of checks and balances have been sidelined by partisan loyalty. Even in cases where it looked like it existed, such as the grilling of some ministers by the special committees of the federal parliament, it never went outside of the centralised democracy principles of the EPRDF. It therefore could be said that the real practice of checks and balances never existed.

In a way, then, the amazing disclosures of the OAG are not news within the political space, at least not for the Members of Parliament (MPs). Apparently, the report is considered to be a procedural document with no significant weight in policymaking. Had that been otherwise, the parliament would have enacted strict fiscal disciplinary laws that could have helped to avoid the recurring problems.

It would, however, be naive to reduce the whole debate to the politics of things. There is a considerable technical aspect to it and this relates to the budgeting process in the country. As it stands, the nation’s budgeting system does not provide the legislature clear, measurable and accountable targets to check the performance of the executive. Hence, the whole debate over the report of the OAG has been limited to accounting principles.

Unfortunately, this debate has been helping all the wrongdoers. They are often seen arguing against the reports of the OAG by detaching their subpar spending standards from their core responsibilities. As much as it has become common to see a president of a university that awards hundreds of students with various types of degrees in Accounting giving lame excuses for the lack of established accounting standards in his institution, it is customary to see an official, be it a minister or a director general of a public agency, attributing accounting problems to contractual issues. In both cases, the intention is to dissociate practice from deliverables.

Essentially, it is the budgeting system that allows such dissociation. There is no established linkage between budgeting and deliverables in Ethiopia. The entire budgeting process is guided by subjective assumptions. And in all cases, the assumptions are macro in nature. They are not sufficiently detailed to be used as instruments of oversight.

This continues to be the case even if the budgeting process has been progressively changed from the longstanding line item budgeting system to the programme budgeting system. The transition, implemented largely in response to concerns from donors, may have reduced the magnitude of inefficiency, but it has not brought linkage between deliverables and spending. What it brought was just the patching of line item expenditure into programme themes.

If anything, the spending lines of the state became fuzzy. With programme impacts not taken into account, budgetary commitments may continue to be made without any identifiable impact. It is also challenging to identify inefficiency.

As the budgeting process involves so many subjectivities, there is little chance for regulators to bring the executive to account. There is also a huge chance for the latter to hide its inefficiencies under some illusive performance. It is easy to see the extent to which the whole issue can be complicated by partisan politics.

Indeed, having a political system in which effective checks and balances between units of government are the norm, is essential. This entails having a system that is sufficiently representative, and having a vibrant market of ideas. With a functional market of ideas and adequate representation of the varied interests of the public, then, the principle of checks and balances will be the rule of the game.

But correcting the politics of budgetary oversight is not a panacea. The situation rather demands functional technical instruments to be in place. In the practice of performance-based budgeting, each unit of spending is associated with a unit of deliverables. This is the best available instrument of fiscal accountability. In many democratic countries be they in the West or in the East, performance-based budgeting is used to optimise the developmental value of each unit of spending.

The good thing about this kind of budgeting, as opposed to line item or programme budgeting, is that performance can be accounted for against planned deliverables. It also enables the legislature to incentivise or disincentivize units of the executive. This kind of budgeting practice also brings inefficiencies to light.

Of course, the system has its own disadvantages. A major challenge in implementing such a budgeting system would be to develop the expertise needed to craft it. It would not be easy for Ethiopian policymakers to master the process. Another challenge may be the rigidity of the system that hinders shifts in budgetary commitments between agencies.

Yet, the cost of meeting these challenges is by no means comparable to the cost the nation is paying for inefficiency and accounting malpractices. Therefore, it may be time for policymakers, and MPs, to consider the possibility of shifting the budgeting practice to a performance-based one. Through this kind of budgeting practice, a clear linkage between budgeting and deliverables can be established, and hence the executive can be accountable for each of them.

In light of the latest revelation from the OAG, having a legislature with both the political and technical empowerment to dispose its oversight responsibility is crucial.
 

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