Home»News»Investigations»Who is responsible for State funds?

Who is responsible for State funds?

0
Shares
Pinterest WhatsApp
  • BoB, OAG in blame game
  • BAOA, BICA tight lipped
  • Unreconciled accounts contravene financial laws

KEABETSWE NEWEL, LAWRENCE SERETSE

Bank of Botswana (BoB), the Office of the Accountant General (OAG) and the Ministry of Finance and Economic Development are pointing fingers at each other when it comes to accounting for the billions of Pula in Government Remittances Account held at the Bank.

This publication has established however that decisions are made by three officers, Permanent Secretary in the Ministry of Finance Solomon Sekwakwa, Sib Nath Sengupta, the Accountant General and Bank of Botswana Governor Moses Pelaelo.

When payments are done, an instruction comes from the Ministry PS, Sekwakwa, to the Accountant General, Sengupta, who then instructs the Governor Pelaelo at the bank to transact.

Between the Ministry, OAG and the BoB, reconciliation should be done, because the three institutions headed by their accounting officers issue instructions and eventually effect transactions. Bank of Botswana, through its mouthpiece Dr. Seamogano Mosanako says their duty is only to transact as per the instructions of the government. “We do not have the authority to question government transactions or ask any questions,” she said.

On the other hand, Sengupta, the Accountant General says she is not the accounting officer in this case. In an interview with The Botswana Gazette, she said her duty is to ‘consolidate all government accounts’ before passing them to the Auditor General for audit. In her view, Permanent Secretaries in respective Ministries are the accounting officers for their Ministries and are responsible for the reconciliation of accounts. The Accountant General further admitted that there are pending issues of reconciliation, adding that reconciliation simply means matching transactions that have been done with their sources. Asked on the role she plays in reconciliation of accounts, Sengupta said they do what she called front line reconciliation, whereby she gets bank statements from the Bank of Botswana to see if the accounts authorized from her office match the statement.

As for the final reconciliation which shows the origins of the monies, destinations as well as what the money was buying or paying for, it remains the responsibility of the PS at Ministry of Finance. An email was sent to the PS, Sekwakwa last week Wednesday and was yet to be responded to. His mobile phone also rang unanswered, as he was said to have been at a meeting at Debswana, Jwaneng.

The Botswana Gazette asked Sengupta that by having unaccounted funds running as far back as 2011 or 2005, are they not in contravention to International Accounting and Financial Reporting Standards.

She said it is normal practice, a response which seems to go against concerns by the Auditor General that the accounts should be investigated. However, the accounting practice, according to a very senior independent chartered accountant who prefers anonymity, is in contravention with Botswana’s Financial Reporting Act of 2010 and the Accountants Act of 2010 which are supposed to be enforced by oversight authorities, the Botswana Accountants Oversight Authority (BAOA) and the Botswana Institute of Chartered Accountants (BICA) which have also turned a blind eye.

According to the senior accountant, accountants at the BoB, Ministry as well as Office of the Accountant General are by law supposed to be chartered accountants who comply with the Financial Reporting Act of 2010, and should be a member of the Botswana Institute of Chartered Accountants (BICA) and thus professionally comply with the Accountants Act of 2010.

The accounting expert said accounting law is such that accounts are reconciled and released as per each fiscal period or financial year, which then should be audited and declared compliant. If there are queries as is the case of the Auditor General then the accounts are said to be qualified in accounting terms.

According to Section 52 of the Financial Reporting Act, enforced through BAOA, the authority if compelled to adopt, issue, and keep up-to-date financial reporting standards for public interest entities (PIE), and ensure that they are consistent with the International Financial Reporting Standards and interpretations issued by the International Accounting Standards Board. By having unreconciled accounts dating as far back as 2011, these accounts are in contravention to this Act, according to the accountant. He said when bank statements are not monitored and reconciled; the potential for undetected loss is high.

“Not all employees or accounting firms are honest. This is how some employees are able to embezzle millions of Pula over time. Timely reconciliation statement helps prevent losses and identify flaws in the system,” he said.

This publication engaged Duncan Majinda, Chief Executive Officer (CEO) at BAOA to elaborate the accounting standards on whether it is international best practice to have accounts unreconciled for so many years. It also sought to establish effects of failure to reconcile and whether or not the un-reconciled government accounts do not contravene the Financial Reporting Act. He said he will not respond because the matter is a subject of dispute as judged by rebuttals from officials. “If I respond to you, I may be taken to be on the side of either your media house or of the government officials,” he recused himself from shedding light.

The matter also directly affects BICA, which registers and regulates chartered Accountants. The Accountants Act clearly states that “failing to disclose a material fact known to him or her, which is not disclosed in the financial statements, but disclosure of which is necessary for the financial statements to show a true and fair view is professional misconduct, which is punishable.”

By failing to account and provide proof of transactions, be it in receipts or proof of assets over a period between 2011 and 2018 accountants at Bank of Botswana and the Accountant General and the Ministry of Finance remain in contravention of the accounting practice. Public Relations Manager at BICA Oupa Gaofise referred this publication to BAOA, saying it is the superior regulator.

Previous post

The Dark Money Funding Botswana Politics

Next post

BPOPF hikes stake to 73 % in Mascom