…As Calle admits people are ‘getting away with murder’
By Hilary Mare
FINANCE Minister Calle Schlettwein has affirmed that Government will not shy away from invoking sections 11 and 17 of the State Finance Act which allows it to recover losses from accounting officers and other authorities if they are found to have violated the budget and have caused damage to the state via over committing the budget.
This comes after revelations that in this financial year there has been an over commitment of up to N$800 million which Government has not budgeted for.
If the state triggers this clause, those responsible for this over commitment – which are mostly and perennially accounting officers -may be asked to pay back the N$800 million provided the act caused loss and damage to the state.
“It is a matter of grave concern to note that contracts and resulting invoices to the tune of N$800 million have been committed over and above what has been appropriated in this year’s budget, most of which are contracts in the road sector. From both the Appropriation Acts and State Finance Act point of view, such over-committing of the National Budget … is not only illegal, but an act of complete lack of financial discipline. We shall not shy away from invoking sections 11 and 17 of the State Finance Act, which provide for the recovering losses caused to the State by contravening the law.
“We have learnt of contractual awards made by public enterprises such as the Roads Authority, which are over and above the budgetary provisions, thus committing the Government to payments not budgeted for. At the same time, spending overtures such as those for entertainment parties are being incurred by the same institution, while the need to cut non-priority spending to free up money for settling contractor invoices go unattended. This is an urgent matter which needs to be attended to from an accountability and governance point of view, “explained Schlettwein in a Confidente inquiry.
Although the Minster noted that over commitment of state resources is not directly aligned to damage and losses, the commitment of issue is now under tight scrutiny from his office.
“We admit people have been getting away with murder,” added the minister.
Meanwhile, the Government has also crafted out a strateg y for funding the outstanding invoices to date. The activities for implementing the strategy and the processing for some of the invoices have already kicked off at an accelerated pace in addition to ongoing budget income-based payment of invoices.
“For the invoices which fall within the revised budget expenditure ceilings, these will continue to be funded with budget income in line with the revenue flow and the borrowing plan. Noting that the bulk of the invoices are from the road sector, the Road Fund Administration, through Government-wide coordination, has also stepped up efforts to accelerate the payment of some of the invoices from the road sector, in addition to the projects funded under its budget (executed by the Roads Authority).
“As such, the RFA has already started with the payment of invoices of up to N$318 million from its accumulated cash reserves. This amount would rise to as much as N$450 million with appropriate adjustment on the non-priority or uncommitted expenditure on Roads Authority budget that is financed by RFA. The amount to be released from the RFA does not completely deplete the reserves of the fund and it is done within the provisions of the Road Fund Administration Act which provides for the defrayal of expenditure in the road sector,” explained Schlettwein.
The minister last week took time to also address concerns raised by the Construction Industries Federation of Namibia in its press statement of last week. The industry estimated that total unpaid invoices to date for its members amount to about N$1 billion, most of which arise from the road sector.
“The Government is conscious of the hardship, cash flow challenges and the economy-wide adverse impacts emanating from the economic downturn and resulting in delayed payments for all service providers. Hence our response to conceive a time-bound plan and commence with accelerated invoice settlement process.
“We have had consultation with the Construction Industries Federation at which Government has communicated its plans for meeting the payments. Immediate settling of some of the invoices through the Road Fund Administration and continued payments over the budget year have already commenced and are a reflection of honouring the payment plans in the spirit of our consultation. However, the demand by the Federation for Government to pay by the 15 December 2016 as announced in the Federation’s Press Statement is, however, contrary to the consultative spirit within which the Government and the Construction Federation Industries have engaged,” he said.
Confidente. Lifting the Lid. Copyright © 2015