Maravi

Kanyama calls for tight risk management processes

Kanyama calls for tight risk management processes
Written by Kabanda Chulu
Monday, May 18, 2009 4:05:23 PM

LUSAKA economist Chibamba Kanyama has challenged the government to quickly institute tight risk management processes, saying the continued misuse of public funds by government workers will affect donor funding for most national projects.

"Tight risk management processes are needed in public finance management since the internal audit departments have proved inadequate to handle this high level corruption because the current systems are not systematic and have not adequately identified new sources of financial risk," Kanyama said.

"It is also a signal of failure by public officials to fully account for their actions in the management of public resources and the danger is that this potential failure to manage fraud will in the long run affect donor support for most national projects."

Kanyama said the existing processes in public finance management had proved inadequate as they placed too much emphasis on ex-post structures of accountability and not on the ex-ante process, which are about the prevention is better than cure' approach.

"The offices of the Office of Auditor General, the Public Accounts Committee of Parliament and the Anti-Corruption Commission cannot adequately combat fraud because they only come in after the event has happened. As a result, these institutions can do very little in reducing exposure to corruption and theft," Kanyama said.

"It is important that emphasis should equally be placed into processes of risk management because as we have witnessed in the past few years, arrests and convictions of corrupt officials have done little to reduce incidences of corruption and fraud in public offices."

He said the Office of the Auditor General has a consolidated report on such incidences and areas of exposure to risk.

"However, without formal structures, processes, culture and strategies in risk management, the country will continue to lose colossal amounts of money through theft by public servant and some sources of risk in the management of public finance have surfaced in the procurement systems, diversion of project funds as well as unretired imprest," said Kanyama.

"My advice to public officials, controlling officers and ministers is to thoroughly orient themselves in risk management processes by engaging the Institute of Directors of Zambia and any other competent professional bodies to come up with broad and ministry-specific risk management and governance manuals that were aligned to new challenges of financial management and accountability."

Labels: CHIBAMBA KANYAMA, GOVERNANCE, INSTITUTE OF DIRECTORS OF ZAMBIA

posted by MrK @ 3:07 PM