Govt Ministries Systematically Flouting Spending Rules: Auditor General

By Nan Lwin Hnin Pwint 2 February 2015

RANGOON — Government ministries increasingly flouted financial regulations during the second half of the 2013-14 financial year, the Office of the Auditor General has revealed, and lawmakers say that legislative reform is urgently needed to enforce existing public spending requirements issued by the Ministry of Finance.

There were 799 documented breaches of financial rules by government ministries between April 2013 and March 2014, more than double the 301 breaches from the 2012-13 financial year, said Maung Toe, the Union Parliament secretary of the Public Accounts Committee, quoting a report from the Auditor General during a parliamentary session on Jan 30. Twice as many breaches occurred in the last six months of the financial year as in the period between April and September 2013.

Common breaches included ministries overstating project costs in budget submissions and retaining the balance, overstating staffing levels and retaining salaries, and depositing surplus finances into private banking institutions rather than returning them to government coffers. The Auditor General’s report said that ministries currently owe the Union government at least 751 million kyats (US$730,000) from unspent outlays.

The audit accounts for just under two thirds of the 18 trillion kyats (US$17.49 billion) of total expenditure across all Union government ministries during the 2013-14 financial year, as legal restrictions prevent the Auditor General from scrutinizing to military expenditure, and the report said there were logistical difficulties auditing the accounts of departments in border and remote areas.

The Public Accounts Committee has laid blame for the breaches on a widespread lack of understanding of the current tendering system used for government outsourcing and procurement, and said that parliamentary committees were failing to exercise an effective level of accountability over their ministries.

The Ministry of Livestock, Fisheries and Rural Development alone violated financial rules more than 90 times in the last six months of the financial year, according to Maung Toe.

Lawmakers have lamented the lack of a public finance law to penalize ministries that did not abide by spending rules, stating that ministries were not respecting the legal framework for public spending established by the Ministry of Finance.

“Not only ministries, but even township level departments are asking for development finances and never complete their projects,” said Lower House lawmaker Moe Zaw Hein. “The parliament must take actions to ensure existing laws are respected and obeyed.”

Parliament Speaker Shwe Mann has sought input on measures to control ministry spending and lawmakers are set to discuss the issue in Monday’s session of parliament.