Matambo reviews special funds

  • NPF Saga forced Matambo’s hand
  • All funds transferred to Government Remittance Account
  • Some Funds to be dissolved
  • Accounting officers to be charged for gross mismanagement

Gazette Reporter

Forced into action by the ‘rot’ exposed at the National Petroleum Fund (NPF), government will urgently review all Special Funds in a quest to improve their management, Minister of Finance and Economic Development Kenneth Matambo revealed.
Briefing the national assembly last Friday, Matambo said as the overall custodian of the country’s public finances, his ministry is concerned over some Special Funds’ non-compliance to the Public Finance Management Act in their administration, with breaches including the use of funds for unintended purposes, unexplained delays in submission or non-submission of audited accounts, and investment of surplus funds without the input of the Office of Accountant General as required by the Public Finance Management Act. Further, he said certain sections in some Fund Orders are not very clear, leading to distorted interpretations.
“This has resulted in some designated Fund Administrators using their discretion in utilising monies held under such Funds,” he said.
Currently, the petroleum services industry is in shambles after over P250 million was mismanaged from the National Petroleum Fund (NPF) account. Prominent fund manager Bakang Seretse and former Director at the Department of Energy Kenneth Kerekang and Botho Leburu are currently facing money laundering charges over the NPF saga. Recently, it emerged further that prominent Botswana Democratic Party (BDP) figure Fish Pabalinga has been benefitting from the Alcohol Levy.
The Minister said government recently adopted additional measures to ensure that these Funds continue to serve the purpose for which they were established. Cabinet recently approved for increased capacity within the Office of the Accountant General to monitor the management of Special Funds. A Unit has been established under the Office of the Accountant General. This Unit will ensure that there is compliance with the Public Finance Management Act. It will also embark on the review of existing Fund Orders, in consultation with the relevant Administrators, with a view to aligning the old Fund Orders established under the previous Finance and Audit Act, with the new Public Finance Management Act.
Further, Matambo said with immediate effect, his Ministry will transfer all funds held under Special Funds into the Government Remittance Account to be managed as part of the Government cash balances held at the Bank of Botswana (BoB). He said the move will ensure that Government closely monitors the use of these Funds, thereby ensuring compliance with both the Public Finance Management Act and the Fund Orders.
With immediate effect, Matambo also said government has ceased to pay interest on Special Funds monies managed as part of the Government cash balances, save for those managed on behalf of third parties, such as the Guardian Fund. Money in some of these Funds belongs to the Government, and therefore, it is not prudent for Government to pay itself interest.
In consultation with administrators of the various Funds, Matambo said his ministry will be undertaking a wholesome review of Special Fund Orders in line with provisions of the Public Finance Management Act, as well as ensure consistency with domestic Anti-Money Laundering and Counter Financing of Terrorism laws and standards.
“This will not only ensure compliance but the security of these resources as well. The review may lead to dissolution of some of the Funds, where considered appropriate,” he stated.
There are thirty-four (34) Special Funds of various types. Of these, thirty (30) transact through and are monitored by the Ministry of Finance and Economic Development through the Office of Accountant General, while four (4) were managed by various Fund Managers, with their deposits held with commercial banks and or Fund Managers.