The East African Legislative Assembly in November 7th debated and rejected the Report of the Committee on Accounts on the EAC Audited Financial Statements for the Year ended 30th June 2017.
The report, which was presented by the Chair of the Committee on Accounts, Hon Dr Jumanne Ngwaru Maghembe, covers the Audited Financial Statements of the EAC organs, projects and programmes for the year ended 30th June 2017.
In June this year, the East African Community has tabled a $99,770,716 Budget estimates for the Financial Year 2018/19 which was less than the approved budget for 2017/18 by $10 million.
The report also attributes the overall financial position of the Community as reasonably healthy, with sufficient liquid assets to meet its maturing liabilities as and when due. The Community, the report states, had a budget of USD 106,494,898 in the Financial Year ending June 30th, 2017 and the actual expenditure totaled to USD 66,358,844 hence an overall budget performance of 62%.
The report also covers the Lake Victoria Basin Commission (LVBC), Lake Victoria Environmental Management Project II (LVEMP II), Lake Victoria Basin-Partnership Fund, Inter University Council for East Africa (IUCEA), Lake Victoria Fisheries Organization (LVFO) and the Civil Aviation Safety and Security Oversight Agency (CASSOA).
The Report however states that EAC Institutions, projects and programmes across board have a challenge of low budget absorption. It therefore calls for proper budgetary planning, coherency and consistency in the budgeting process.
Irregularities sited in the report
During the debate, a statement from EALA noted, members stated several irregularities were noted in recruitment and award of short-term contracts. Similarly, many procurement processes in the EAC Organs and Institutions contravene procurement procedures.
Non-implementation of previous Audit recommendations: The Members noted non-implementation of previous Audit recommendations and no quarterly reports were provided to the Assembly as was recommended.
According to an audit that was debated and adopted by EALA in June this year attributed the overall financial position of the Community as reasonably healthy, with sufficient liquid assets to meet its maturing liabilities as and when due.
The Community, the report states, had a budget of USD 112,233,039 in the Financial Year ending June 30th, 2016 and the actual expenditure totaled to USD 59,664,208 hence an overall budget performance of 65%.
Reallocation of funds within EAC budget:
The Report further calls for regular reallocation of funds within its current budget. “The Committee recommends to the Assembly to urge the Council of Ministers to ensure that Management of EAC ceases abrogating the Treaty of the EAC and its Financial Rules and Regulations by ensuring that future reallocations are approved by the Assembly”, a section of the report states.
Low Delivery of service
The Committee further observes that a number of Organs and Institutions of the EAC had unspent funds at the end of the budget year. The Committee noted that this led to planned activities not being implemented and consequently low delivery service.
In order to ensure proper management of EAC projects and programmes, the Assembly further called for EAC Management to adopt a well-coordinated budget formation mechanism that will ensure that budgeted resources are utilized in the implementation of planned activities.
It also observed need for timely remittance of the VAT receivables across the Partner States by the revenue collection bodies saying such delay is uncalled for. Staffing matters also take centre stage in the report with findings alluding to the fact that majority of the EAC institutions are grossly understaffed leading to non-segregation of duties and a corresponding violation of staff rules and regulations.
The Committee therefore recommends to the Assembly to urge the Council of Ministers to ensure that all the positions at EAC are properly filled as per the staffing structures. Other challenges include poor execution of contracts, weak compliance and verification systems of goods and services procured and weak disciplinary mechanisms to reprimand staff at the EAC among others.
Members rejected the Report before the Speaker guided that the report be referred back to the committee on Accounts and should come back with actionable recommendations.