Lack of transparency partly to blame for thefts – ZICA

Lack of transparency partly to blame for thefts – ZICA
Written by Chiwoyu Sinyangwe
Sunday, June 28, 2009 4:40:14 PM

LACK of full transparency and weak internal audit control systems are partly to blame for the recent reported cases of thefts of huge public funds, Zambia Institute of Chartered Accounts (ZICA) Chief Executive Officer Hapenga Kabeta has observed.
And Kabeta has said ZICA is currently calling for mandatory employment of qualified accountants in all government ministries who should be at director level and report directly to the Permanent Secretary.

In interview on Friday during the accountant forum called to engage accountants from the public sector on the appreciation of International Public Sector Accounting Standards (IPSAS), Kabeta said internal audit controls in the ministries needed to be strengthened.

He said while there we were qualified accountants in the lower and higher levels of the government ministries, there was a deficit in qualified manpower at middle management level which was so critical as it made “things happen.”

“Lack of full transparency in the government's accounting system could be blamed but there are a number of facets. While external auditors are important, internal auditors within the ministry, on quarterly basis, are supposed to report what is happening by carrying out continuous systems review controls. Therefore, we want to believe that once the position of internal auditor is strengthened in government, it will go a long way in ensuring that public resources are protected,” he said.

Kabeta explained the weakness in the current setup of internal controls in the government.

“The internal audit committee in the ministries becomes a reporting point for the internal auditor not the controlling officers. Because when he is auditing, he is auditing the permanent secretary and the whole ministry to see how well they are complying with various procedures and control systems that have been put in place to safeguard the public resources,” he said.

“So, once he gets such report, the internal auditor must report to this audit committee in the ministry and subject to what they find, the audit committee will not report to the permanent secretary, they can inform the permanent secretary to give answers to clarify certain issues but otherwise they are supposed to report to the Secretary to The Treasury.”

The government ministries has in recent past been rocked by widespread revelations of alleged theft of huge public resources with the current investigations involving the K27 billion at the Ministry of Health being the most prominent.

Most stakeholders, however, contend that the problem is widespread in all ministries.

And Kabeta said ZICA strongly proposed that the position of accountants in the ministries be strengthened.

“The accountant is well below. He reports to the head human resource and administration and some of those people in those positions have no clue of accounting and financial management other than just a rudimentary interpretation of what obtains in the financial issues,” Kabeta said.

“Our position as a professional institute, we want at ministerial level, to upgrade the status of accountants so that each ministry has a director of finance - person who will report directly to the controlling officer…but when the person is very junior, ni yes bwana, yes bwana and will not be able to say anything.”

Kabeta also said there was need to make accountants in the public sector to have an appreciation of IPSAS, saying the move would encourage the government to become more transparent in the way they spend public funds.

“ IPSAS compels government because it demands for full disclosure. There is need for transparency, accountability, and need for good governance in the whole process and obviously integrity because the more you disclose, you realise that there is nothing you want to hide from the public eye,” said Kabeta.

“Under IPSAS, there is need to fully comply. There are two types, you may have cash-based IPSAS or they may be accrual-based IPSAS. So our view is that right now, the government's accounting system is using cash-based IPSAS, we think that is partial disclosure of information. So when there is accrual-based IPSAS, there is a lot of information that will tend to be disclosed to the members of the public.”