BIZweek n°335 25 mar 2021
BIZweek n°335 25 mar 2021
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  • Parution : n°335 de 25 mar 2021

  • Périodicité : hebdomadaire

  • Editeur : Capital Publications Ltd

  • Format : (260 x 370) mm

  • Nombre de pages : 8

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  • Dans ce numéro : report d'audit du gouvernement de Maurice.

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VENDREDI 26 MARS 2021 BIZWEEK ÉDITION 335 LA TOUR AUDIT REPORT 2019-2020 « Most of the shortcomings highlighted in this Report are similar to those reported in previous years » The National Audit Office’s observations for financial year 2019-20 are mainly in the areas of financial reporting, procurement management, contract management, assets management, enforcement of laws and regulations, and value for money audit In last year’s overview, the Director of Audit of the National Audit Office (NAO) mentioned that the Finance and Audit Act was amended in August 2018, to provide for Ministries and Government Departments to include in their Annual Report on Performance a statement showing an implementation plan for remedial action and for preventing the recurrence of the shortcomings, including wastage of public funds referred to in the Report of the Director of Audit. However, his audit has revealed that as of 31 January 2021, only 40 per cent of Ministries/Departments had submitted their Annual Reports on Performance for the financial years 2018-19 and 2019-20. « In so far as the Annual Report on Performance is concerned, the Ministry of Finance, Economic Planning and Development should play a more active role in enforcing compliance by Ministries and Departments », says MrC.Ramooah, Director of Audit. Also, as of 19 February 2021, 46 Statutory Bodies had not yet submitted a total of 145 financial statements to the NAO for audit purposes, of which 102 relate to financial years prior to 2019-20. Also, 174 financial statements in respect of 74 Statutory Bodies had been certified by NAO but have not yet been laid before the National Assembly. Lapses in Procurement Management The main objective of public procurement is to acquire goods and services and to undertake works that are required by Government for delivery of its services to the citizens in the most economic, efficient and effective manner, whilst adhering to the principles of good governance. Lapses were noted in the procurement of medical equipment and supplies in the context of the COVID-19 pandemic. These lapses included absence of proper documentation at the different stages of the emergency procurement process, non-compliance with the legal requirements and inadequate assessment of fairness and reasonableness of prices quoted by suppliers. As a result, there was inadequate assurance that the principles of value for money and transparency had been adhered to. For example, at the Ministry of Health and Wellness (MOHW), proper records on emergency procurement as required under Directive 44 of the Procurement Policy Office were not kept. The absence of documentation flouted the principles of good governance, in particular transparency in the management of public funds. Medical disposables to the tune of Rs 850 million were purchased from private companies which had no previous dealings with the MOHW in such goods. The average prices paid for some medical disposables wereup to 67 times higher than the last price paid for. Lapses were also noted in the normal procurement proceedings of Ministries and Departments. For instance, the contract for the « Safe City Project » for some Rs 16 billion was awarded directly to a private company on an operating lease model for a 20-year period. No evidence was produced to NAO to the effect that an assessment was made to ascertain the fairness of the lease payments made by the Police Service under the contract, and thus that the procurement was undertaken in the most economical manner. Deficiencies in Contract Management Deficiencies were noted in the management of contracts. These included : Abnormally long delays in the completion of projects, and in some cases, for years. Non-verification of authenticity of Performance and Advance Payment securities. Wrong determination of rent payable. Unavailability of contract records. Significant sums are spent on capital projects, and hence, the need for proper planning and close monitoring of capital projects at the level of Ministries/Departments is again emphasized. Project delays have become a recurring feature in several Ministries/Departments. For instance, at the National Development Unit (NDU), out of 434 works orders issued during the financial year 2018-19, there were delays in 155 cases, of which 21 were still ongoing as of October 2020, including urgent drain works which were awarded under emergency procurement. Project Delays ranging from 16 to 575 days were noted at the Ministry of Education, Tertiary Education, Science and Technology in respect of projects for maintenance, repairs and rehabilitation of buildings. At the NDU, the authenticity of Performance and Advance Payment Securities submitted by a Contractor was not verified. As a consequence of which Government had to forego some Rs 64.7 million representing value of faked securities that were not enforceable. At the Ministry of Environment and Sustainable Development (Solid Waste Management Division), documents in respect of 13 contracts for which payments for 2019-20 totalled Rs 574.2 million, were not made available for audit. Only copies of a few pages showing the prices were available in files. The contracts were for the provision of services relating to operation of the landfilland the five transfer stations, and cleaning of public beaches. Non-Compliance with Legislations and Non- Enforcement of Rules Compliance with rules and regulations is one of the pre-requisites for good governance. As such, it is essential that Ministries and Departments comply with rules and regulations. Cases of non-compliance were noted. For example, in spite of the alarming number of fatal road accidents involving auto/motor cycles, the requirement for roadworthiness tests for auto cycles under the Road Traffic Regulations 2016 was not enforced by the Ministry of Land Transport and Light Rail. Value for Money not obtained Value for money was not obtained from various projects undertaken or expenditure incurred by Government. For example : Human Resource Management Information System (HRMIS) Project11 E-Judiciary Project School Net II Project for Secondary Schools Land Administration, Valuation and Information Management System (LAVIMS) Rental of Office space by the Ministry of Public Service and Administrative and Institutional Reforms (MPSAIR). Deficiencies in Asset Management Asset management is critical in any business environment and more so in the public sector as assets are vital for the delivery of essential services and for economic activity. Deficiencies were noted in the management of assets by Ministries and Departments. For example, at the five regional hospitals, as of 18 October 2020, there were some 4,820 patients waiting for an echography examination. The long waiting list was due to frequent breakdowns or non-acquisition of medical equipment. There were also cases where there were long delays in getting appointments for other examinations, such as endoscopy, angiography and lithotripsy due to non-availability of medical equipment. At the Ministry of Ocean Economy, Marine Resources, Fisheries and Shipping, some Rs 59 million were spent for the acquisition of patrol boats and vessels over the period July 2016 to June 2020. However, out of the 20 patrol/speed boats available at the fisheries posts, onlyeight were operational. The rescue boat, lifeboat with davits and fisheries support vessel, acquired to provide practical training, were not being used due to damage and lack of proper maintenance. Thus, control and surveillance activities were affected. The top roof of the National Laboratories Complex of the Ministry of Environment, Solid Waste Management and Climate Change, located at Réduit, is leaking since several years. The Forensic Science Laboratory, being at the top floor, has equipment worth some Rs 150 million that are highly exposed to risks of being damaged. One item of equipment worth some Rs 1 million was damaged beyond repairs in 2018 due to water leakage. Concluding Remarks The above shortcomings had a significant impact on public finances, resources and service delivery, and revealed weaknesses in financial governance. « Most of the shortcomings highlighted in this Report are similar to those reported in previous years. I therefore reiterate what I highlighted in my report last year. Those charged with the governance of Ministries and Government Departments should exercise due care and diligence, as wellas foresight to ensure that government operations are conducted efficiently and effectively with a view to ensuring that expected outcomes are achieved. It is of vital importance that Ministries and Government Departments implement effective measures to enhance governance and controls on the use of public funds and ensure that lapses do not recur », concludes the Director of Audit for the year 2019-2020. Financial Highlights Government expenditure in 2019-20 totalled Rs 189.6 billion compared to an original appropriation of Rs 178.8 billion. Expenditure included mainly Compensation of Employees (Rs 31.0 billion), Social Benefits (Rs 41.9 billion), Government Debt Servicing (Rs 36.6 billion), Grants to Parastatal Bodies/Local Authorities/Rodrigues Regional Assembly (Rs 24.5 billion), and Acquisition of Non-Financial Assets (Rs 7.5 billion). As for revenue, the total amount collected was Rs 103.9 billion compared to the original estimate of Rs 121.7 billion. The major source of Government revenue was from taxes which totalled some Rs 91.8 billion. Public Sector Debt (PSD) has increased from Rs 320.6 billion as at 30 June 2019 to Rs 381.8 billion as at 30 June 2020, representing an increase of 19 per cent. PSD as a percentage of Gross Domestic Product (GDP), has increased from 65.3 per cent (gross basis) to 83.4 per cent (gross basis). The Public Debt Management Act was amended through the COVID-19 (Miscellaneous Provisions) Act 2020 to provide for the removal of the PSD ceiling of 65 per cent of GDP. Total outstanding balance of loans made by Government to statutory bodies, private bodies and other bodies, mainly to finance capital projects, has reached Rs 11.5 billion as at 30 June 2020, representing an increase of 8 per cent over the amount outstanding as at 30 June 2019 of Rs 10.6 billion. Loans, interests and penalties due but not yet paid to Government amounted to some Rs 4.1 billion, representing an increase of 23 per cent over the previous year. Arrears of revenue have reached Rs 14.5 billion, representing a 10 per cent increase over the previous year. Arrears of the Mauritius Revenue Authority represented 61 per cent of total arrears of Government. 4 Cont’d on page 5
VENDREDI 26 MARS 2021 BIZWEEK ÉDITION 335 REFUBLIC OF MAURITIUS NATIONAL AUDIT OFFICE REPORT OF THE DIRECTOR OF AUDIT ON THE ACCOUNTS OF THE GOVERNMENT ACTA PUBLICA Constraints Faced by the National Audit Office For the 2019-20 audit, the National Audit Office (NAO) had to deal with some significant challenges. TIME CONSTRAINT The lockdown in the country due to the COVID-19 pandemic had a negative impact on NAO’s annual audit calendar. Audit of the accounts of Statutory Bodies and Local Authorities, and consequently, that of Ministries and Departments started some two months later than initially planned. The Finance and Audit Act requires the Accountant- General to submit annual financial statements to my office, for the purpose of audit, within six months after the end of the financial year to which the financial statements relate. Although the accounts of the government for 2019-20 were closed on 10 August 2020, the main financial statements were submitted to my office on the last day, that is, 31 December 2020. RESOURCE CONSTRAINT NAO had to operate at approximately 75 per cent capacity in terms of human resources, mainly due to unfilled vacancies. In the 2020-21 budget, funds were obtained for only 13 vacant posts against 40 vacancies reported, due to financial constraints invoked by the Ministry of Finance, Economic Planning and Development (MoFEDP). At the time of this report, 37 of the 40 vacant posts at the NAO have not been filled. Due to resource and time constraints, my officers had to toil hard to meet FOR THE FINANCIAL YEAR 2019-20 deadlines, in particular to complete the 2019-20 audit on time with a view to respecting the statutory deadline for the submission of this Audit Report. ACCESS TO RECORDS NAO also had to deal with situations where NAO officerseither could not have access to records or such access was simply denied. For example, for the audit of the Ministry of Health and Wellness, important files could not be provided as they had been secured by the Independent Commission Against Corruption in the context of an investigation. Another example is the case of the Police Service that invoked a confidentiality clause in a contract to restrict access to records and information to NAO officers. 5

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