Wednesday, July 21, 2010

(TALKZIMBABWE) Biti violated Public Finance Management Act


Biti violated Public Finance Management Act
By: By John Makamure
Posted: Wednesday, July 21, 2010 2:43 am

THE Public Finance Management Bill was assented to by President Mugabe on March 25, 2010. Presidential assent and gazetting of the Act means it can now be enforced.

This progressive piece of legislation was pioneered by Finance Minister Tendai Biti and extensively debated in both the House of Assembly and Senate before being submitted to the President for assent.

The Budget, Finance and Investment Promotion Portfolio Committee of Parliament and many civic society organisations advocating strong accountability in the use of public resources, hailed the minister for coming up with legislation that complied with the basic tenets of good law.

They saw the legislation as going a long way in revolutionising public finance management in Zimbabwe.

The Budget Committee of Parliament mostly welcomed the Public Finance Management Act for promoting more meaningful participation by Parliament in the budget process.

This came after Parliament had for many years been clamouring for a revamped budget process from formulation to implementation.

As part of parliamentary reforms initiated by Parliament itself with the support of development partners, several workshops and meetings were convened to try and define a much more credible and meaningful role for Parliament in the budget process.

The main concern was that for a long time Parliament merely existed to rubber-stamp the budget when the Appropriation and Finance Bills were tabled before the House.

Parliament would then wait for the next budget without any meaningful attempts made to monitor execution of the budget that the MPs would have passed.

The new Public Finance Management Act has provisions to try and strengthen the role of Parliament in the implementation of the budget.

Section 33 requires every ministry accounting officer to "submit quarterly financial statements and reports for submission by the Minister to the appropriate parliamentary portfolio committee within 60 days of the end of the respective quarter".

The same section requires the Accountant General in the Ministry of Finance to prepare consolidated quarterly financial statements and submit such statements to the ministry secretary for presentation by the minister to the House of Assembly and to the appropriate portfolio committee within 60 days of the end of the respective quarter.

Section 34 deals with monthly reporting. It says "every accounting officer shall submit monthly financial statements and reports for submission by the Minister to the appropriate parliamentary portfolio committee within 30 days of the respective month".

In the same section, the Accountant General shall prepare consolidated monthly financial statements and shall submit such statements to the Accountant General who shall publish them in the Government Gazette, within 30 days of the next succeeding month.

Gazetting of the monthly statements is a transparent way to allow public scrutiny of what is happening to public resources.

What is very disappointing is that halfway into the financial year, no single report has been submitted before a portfolio committee apart from the Mid-Term Fiscal Policy review statement presented to Parliament on Wednesday last week.

This is a serious violation of the Public Finance Management Act. According to the Act, the first quarter reports (January to March 2010) should have been submitted before portfolio committees and the House of Assembly by the end of May 2010. By now, we should also have seen about five monthly reports having already been submitted before parliamentary portfolio committees.

The Budget, Finance and Investment Promotion Portfolio Committee pointed out this anomaly during its report to the House last Thursday. The Minister did not bother to respond to this significant violation of the laws that he pioneered and should enforce.

The Mid-Term Fiscal statement last week cannot be a substitute for the monthly and quarterly reports as required by the law.

In any case, that statement did not have detailed and adequate information to allow the various portfolio committees to be able to monitor closely the deployment of public resources and implementation of Government programmes, and whether or not set targets are being realised.

What it basically means is that Parliament is still unable to participate meaningfully in the budget process despite the existence of statutes that empowers it to do so.

Just like many other laws enacted, the Public Finance Management Act faces the danger of remaining on paper without being enforced. The Minister must therefore do justice to Zimbabweans by ensuring that the necessary information is submitted before portfolio committees without any further delay.

There are on-going programmes by the Administration of Parliament to enhance the capacity of committees to thoroughly scrutinise these reports and make informed debate in the House. However, the committees cannot undertake this thorough scrutiny without detailed, relevant and timely submission of information on budget performance.

There is an idea in Parliament to establish a professional and independent Parliamentary Budget Office to further enhance the capacity within the institution to deal with complex budgetary matters. This Office, set up by Act of Parliament, can only function effectively if it is furnished with the requisite budgetary information.

The idea behind regular reporting to portfolio committees is that you promote some form of current audit of public expenditures and not only rely on ex-post audit done by the Comptroller and Auditor General. Ex-post is after the event and will do very little to correct in a timely manner the weaknesses identified.

All stakeholders view the national budget as the most important policy statement made by the Executive in the course of the year. It reflects the fundamental values underlying national policy. It outlines the Government’s views of the socio-economic state of the nation.

It is a declaration of the Government’s fiscal, financial and economic objectives and reflects its social and economic priorities.

The budget further provides a valuable measure of the government’s future intentions and past performance.

It is therefore very important for Minister Biti to remember that the budget is a critically important document in ensuring transparency, accountability, responsibility and good governance.

He must therefore allow Parliament's responsibility on fiscal matters to go beyond Budget approval, but rather extend to formulation, tracking and holding the Executive to account.

Giving Parliament a single day to debate a major statement such as what happened with the Mid-Term Fiscal statement is a mockery of the role of the institution in budgetary oversight.

In that regard, Parliamentary procedures should provide adequate oversight parameters that include accountability mechanisms focused on budget formulation, effective money flows, budget implementation and monitoring.

Behaviour that treats Parliament as a rubber-stamping institution on key matters such as use of public resources should now be a thing of the past. We would like to see enhanced citizen participation in economic decision-making through their elected representatives.

Enforcing provisions of the Public Finance Management Act will go a long way in realising this objective.

__________________________
John Makamure is the Executive Director of the Southern African Parliamentary Support Trust. He can be contacted at johnma@sapst.org



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