A new report scrutinizing Botswana’s budget has fallen short of describing the budgetary document as a fraudulent paper due to its plethora of shortcomings that are failing to meet international standards, a document seen by the The Telegraph shows.
The document titled: “2020 Public Expenditure and Financial Accountability (PEFA) Assessment Report” also found that this is not helped by among others that audits from government line ministries and their departments conducted by the Auditor General “tend to focus on performance pf internal controls and directly on service delivery.”
The document which was compiled by the country’s Ministry of Finance and Development Planning and its stakeholders at European Union Commission, International Monetary Fund, World and the Governments of France, Norway, Switzerland and the United Kingdom says there are concerns that the initial annual budget and budget ceilings are developed without reference or guidance from an annual cash flow forecast.
The PEFA programme was founded as a partnership by the European Union Commission, International Monetary Fund, World and the Governments of France, Norway, Switzerland and the United Kingdom in 2001.
The PEFA secretariat stated that the quality assurance process followed in the production of the current Botswana report satisfies the requirements of the PEFA secretariat based in Washington, America.
It says the deviations from the actual revue in comparison to the approval revenue indicates volatility in the global market and uncertainty in the mining and other sectors.
The continuous under budgeting of revenue has a direct impact on the provision of services throughout Government of Botswana, it say.
The report says that there are some weaknesses identified in public investment project adding that relevance and impact of public investment projects including Pubic Private Partnerships (PPPs0 is not highlighted during the annual budget process. It says of the investment projects from such arrangements did not have adequate project planning and monitoring which ultimately led to cost overruns and delays.
The report also found that the Botswana Government uses several methods to relay information to stakeholders and the public. It says the Botswana Government met three out of the basis elements of public access to fiscal information. The more frequent methods used relay fiscal information include conducting public forums, upholding the information to the Ministry of Finance’s website and print copies and available in Government stores and national libraries. Unfortunately most copies are not free and carry a nominal price.
In addition, the report says, the timing and release of budget execution reports are often delayed and are available for external use only. The report shows that the annual budget is mainly developed by economic and functional classification. Unfortunately, the alignment of resource to economic classification does not meet the standard of service delivery to the public.
The report says there is no association between end-of-year-performance and budget outturns. This makes it difficult, the report says, it difficult to trace accountability as the project level. The authors of the report observed that performance audits are conducted by the auditor general. However, they noted that, the audits tend to focus on performance pf internal controls and directly on service delivery. Some large government project, the document says did not have evidence of rigorous cost-benefit analysis. The lack of data on investment projects, the reports says, contributes to inadequately informed decision-making.
The report found that some growth of public corporations continued to contribute to the Government’s fiscal costs and possible contingent liabilities. If not effectively managed, the report says, PCs activities could contribute to the erosion of the Government’s fiscal space and discipline.
Similarly, the document says, there is a semi-annual or year-end reports that outline performance achieved for service delivery in relation to the executed budget.
The report says that while government tracks and monitors liabilities and initial assets and age usage are recorded non-financial assets and depreciation are not adequately reported.
The report says the Government keeps a tight grip on annual spending in accordance with the provisions of its financial rules and regulations.
The reports says there are no procedure for tracking or monitoring expenditure arrears adding that very little effort has taken place to identify expenditure arrears.
Most budget entities tend to operate within their allocated resources. However, there are instances of overspending by MDAS. This leads to budget adjustments via the supplementary budget request route or through the virement request process.
Medium –term projections play a critical role in depicting the future fiscal outlook for governments.
However, the report says, there are concerns that the medium-term frameworks are not being used effectively to set up parameters for the budget and to guide the government in its decision-making process. Furthermore, revenue forecasting constantly underperforms and is not reliable. This could ultimately impede fiscal relevance and discipline.
The report says State Owned Enterprises (SOEs) performances are weak and relay a great deal on transfers from the Government to support some of their daily operations. It shows that there are uncertainties surrounding the future return on investment with SOEs.
It says that this this leads to a growing fiscal concern of the Government that may impact future fiscal discipline.
The report says most Ministry and Department Agencies (MDAs) have developed strategic plans centred around and in support of NDP11. The report notes that the strategic plans are used as a guiding principle to efficient and effective service delivery. However, the report shows, strategic plans have not been appropriately defined due to the absence of program association with service delivery strategies and performance outcomes.
The report shows that there is no performance measurement information to track and there is no indication that cost analysis was conducted.
In addition, there are no narratives in the annual budget documents to outline how the allocation of resources support service delivery units.
It shows that there was no evidence that indicated cost benefit analysis of service delivery was factored in the medium-term frameworks. With the lack of cost analysis of services and the absence of key performance evaluations in budget documentations, the report says, the decision to allocate resources across MDAs and other entities is not based on substantiated information and cost justifications.
“In addition, there are no indicative planning figures used in the budget preparation/development process. The budget allocation to subnational governments is usually based on how much resources are available at the time of the budget formulation,” the document says.
It states that this poses a threat a threat to the medium-term outlook. Therefore, the document says, the link between the medium-term framework in expenditure budgeting, indicative planning mechanisms and MDAs strategic planning is fractured and not fully developed to support a strategic location of resources
Adjustments to the annual budget, through the supplementary or virements requires are kept minimum, the report says.
“However, there is limited evidence regarding whether budget resources are used efficiently when delivering services to the public. There is sufficient quantitative or quantitative data collected to determine if services are delivered as planned and whether those services lead to value for money opportunities for the Government. There is a lack of program evaluation and data on resources available at the service delivery unity,” the report reads in part.
It says this lack of performance information undermines accountability for service delivery. The absence of performance information, identified at the MDAs level, hinders operational efficiency.
The report also shows that revenue predictions appears to be a major challenge. It says the annual budget documentation does not detail policy priority decisions and the resources allocated to those decisions. It says it is hard to trach the changes of the proposed annual budget from the previous years approved budget. The budget documentation does not explain the reasons for the variations the report says adding that there are no detailed statements or narratives to explain the numbers.
“There is no structure process for reviewing execution against budget, recording variances and identifying mitigation for risks under or overspend. MDAs dot monitor outrun, but they do by requesting live reports for specific accounts rather than using the poster reporting packs. There is clear need to establish a robust framework for monitoring at parliamentary level l in MAD. There is limited information on the election and approval of investment projects during the budget process,” the report found.
