Government through the Ministry of Finance and Economic Development has accumulated over P2 billion through its 12 Special Funds that collect levies.
As at 2nd July 2021, the 12 Special Funds had a balance of P2 178 247 894, this is according to the Minister of Finance Peggy Serame.
Serame told Parliament in response to a question raised by Leader of Opposition, Dumelang Saleshando where he asked the Minister to state all the special funds that collect levies that are not ultimately deposited to the consolidated funds; as well as the balance held in each of the funds; and when each of the funds was last audited and whether the audit was clean or qualified. Serame is of the view that the funds have been utilized in line with the purpose stated in the Fund Orders.
Serame also confirmed that there were some instances where Special Funds were utilized for activities that are not related to the purpose stated in the Fund Orders. She gave an example for the financial years 2015/16 and 2016/17, where the National Road Safety Fund was used on renovations of the Department of Road Transport and Safety offices, which is not in line with the purpose of the Fund. She added that in the year ended 31st March 2018 the audit report 3 revealed that the Tobacco and Tobacco Products Levy Fund was used on the treatment of ailments which were unrelated to the purposes of the Fund, such as medical charges for oncology, neurology, cardiology and fractures.
“Some of the reasons for the breaches were due to the vague or ambiguous provisions in some of the Fund Orders, which led to different interpretations, and thus leaving room for Accounting Officers to use their discretion in spending the monies held under such Funds,” said Serame.
She further stated that the Special Funds audit report is submitted to the National Assembly as part of the Report of the Auditor General on the Accounts of the Botswana Government (Annual Statements of Accounts). She added the latest audits and opinion issued on these Special Funds is as indicated available. According to Serame, all the audited Funds were unqualified, save for the Levy on Alcoholic Beverages Fund, which was consistently given a qualified audit opinion due to limitation on access of records. She stated that the Auditor General has indicated that most Funds’ audits for the year ended 31st March 2020 have been completed and the audit report is yet to be submitted.
“From July 2018, my Ministry has been undertaking a comprehensive review of all the Fund Orders to identify gaps and made necessary amendments to align the receipts, disbursements and investments of the Funds with the provisions of the Public Finance Management Act,” said Serame.
She is of the view that the review of all fund orders was also necessary to bring the Fund Orders in line with the Anti-Money Laundering (AML) and Counter Financing of Terrorism (CFT) standards geared towards combating any threats to the integrity of the international financial system. She stated that the review process has been completed and to date, 10 of the 12 draft revised Fund Orders are with the Attorney General Chambers (AGC) for issuance of the Statutory Instruments, while two (2), being the Cattle Export Levy and the Human Resource Development Fund draft Orders have been submitted to the respective Ministries to address issues raised by the AGC.
“I expect full compliance across all Special Funds by 31st March 2022, as their disbursements will be much more streamlined with no or less discretion on the part of the Fund Administrators,” Serame told Parliament.