When Friends and relatives wish them compliments of the new season, Minister of Finance and Development Planning, Baledzi Gaolathe, and his assistant, Duncan Mlazie, will sigh with relief that a cruel year is finally behind them.
A number of leaks from the Public Accounts Committee have revealed that some MPs’ private doubts are closer to the media’s dark portrait of the Ministry of Finance and Development Planning : a complicated ministry, part deceitful and part incompetent, with ministers who sleep on the job.
For sometime, the ministry officials have been getting their figures wrong, have been making wrong budget forecasts and allocating money to wrong projects. It may be just a series of blunders. It could be something worse.
For example, the Ministry of Finance has been sending one set of figures to parliament to approve as the national budget and then constructing another budget, which they force on government departments behind the back of legislators.
Earlier this year, heads of government departments told the Public Accounts Committee (PAC) how they had relied on the national budget to plan their year only to discover that they had been sold a dummy.
In a bid to reconcile the “cheat sheets” that had been approved by parliament with the alternative budget that they later constructed, ministry officials issued a withdrawal warrant, cutting back allocations that had been authorized by parliament.
What happened next suggests that their apparent fancy footwork did not fully grasp how easily things could go wrong. Administrators of the Old Age Pension woke up one morning to find that they did not have money to go around all registered beneficiaries.
The then Botswana Defense Force Commander, Lt Gen Matshwenyego Fisher, found himself with no money to pay his officers. Although his vote of close to P631 million for BDF officers’ salaries had been approved by parliament, he only received P603 million from the ministry, which was P28 million short.
Weeks of agonizing and trying to play around with the new figures ended in a letter signed by Fisher, addressed to the Ministry of Finance querying the curious budget cut. The exchange of letters that followed between Fisher and the ministry offers a glimpse of the goings on behind the drab three story walls of the Ministry of Finance and Development Planning.
A savingram signed by Permanent Secretary in the Ministry of Finance and Development Planning, Serwalo Tumelo, and addressed to the Botswana Defence Force states, “ We appreciate your explanation that the BDF hardly has vacant posts and therefore the 4 percent to 5 percent reduction in personal emoluments for 2003/2004 to absorb the 5 percent vacancy rate slack in government should not be applicable to the BDF.
However, we wish to point out that the major reason for the reduction was to reduce the forecast budget deficit. It was just a coincidence that the percentage reduction was about the same as the vacancy rate in government.
In this regard, the explanation we have given to the ministries was essentially that such cuts were unlikely to impact negatively on their service delivery given that they have always carried a vacancy rate of that magnitude from year to year.
Therefore, the reduction would still have been effected due to budget constraints even in the absence of vacancies.
Against the foregoing, we want to prevail on the BDF to see reason regarding the reduction of their personal emoluments by 4, 5 percent or P27.8 million. We urge you to consider this cut in the context of the total budget of the force and explore possibilities of virements.
You will recall that we went through a painful process in reconstructing the 2003/04 budget against the clear instruction from Cabinet that the Honourable Minister of Finance and Development Planning should not bring to Cabinet yet another deficit budget. It is in this context that we implore your indulgence.
The window of supplementaries to top up is always a possibility. However, we loathe considering it at this stage as there are no prospects in sight for any improvement in our revenue source.”
As it turned out, although the projected outturn showed under expenditure, the BDF, however, found itself saddled with an unauthorized over expenditure on personal emoluments.
In a report released in April, the Public Accounts Committee observed that “ across the board budgetary adjustments, whether on the basis of a projected escalation or prevailing vacancy rates as well as supplementaries, always indicate serious problems in the budgetary process of a system.”
The PAC further railed against the “unauthorized expenditure in an attempt to avoid budget deficit. It is even worse for the legislature to be used through supplementaries to sustain a philosophy agreed by the Executive, but not shared with Parliament.
This trend occasions the tendency to ignore contractual obligations and it underrates the sanctity of personal emoluments as well as special expenditure allocations for the simple reason of balancing the budget.
“ It is the considered opinion of the PAC that cabinet would not approve a budget which cuts salaries of employed personnel and in this case the Botswana Defence Force and old age pensioners just because it does not want to run a deficit budget.”
The ministry of finance’s preoccupation with balancing the budget fits in with their pattern of padding the numbers on the revenue column of the national budget, creating an impression that government has enough money to undertake all planned projects.
In its budget estimates for the year, the ministry Budget Division overstated the revenue figures by 300 million. The Budget Division added P150 million to the credit side of the budget saying it was money that would be collected from the Ministry of Education cost recovery exercise.
As it turned out, not a single Thebe was raised under the exercise. There is no shreded of evidence to suggest that the figure was realizable because Cabinet had not even approved the cost recovery exercise.
The Budget division inflated the budget revenue by a further P50 million saying it was the money that would be raised from the Ministry of Local Government cost recovery exercise. Again, no money was realized under the exercise. There was still no reason to expect the recovery because the exercise had not been approved by Cabinet.
The ministry added another P50 million on the revenue side of the budget saying the money would be recovered from the Ministry of Transport cost recovery. As with other instances no money was ever collected.
Conspiracy theorists are, however, reading a hidden agenda in the parallel budget. They simply join the dots and a sinister outline: That the ministry is involved in deceit in an attempt to paint a rosy picture of the economy. Doubts over the integrity of Botswana’s national budget are not helped by a series of apparent mistakes committed by the budget division recently.
Although the outlines of the tale have become part of the corridors lore, what has not been disclosed are the full details?
The Parliament Finance and Estimates Committee recently turned back a request by the ministry to buy a new presidential jet because of budgeting blunders. A report released by the committee recently exposed poor financial budgeting and flouting of stated rules by the ministry.
Former Minister of Finance and Development Planning, Ponatshego Kediklilwe, two weeks ago suggested that the ministry may be using outdated data and asked the current minister if this was not exposing investors to risks of making wrong decisions based on wrong data.
