Appointed as Director of Audit last May, Dharamraj Paligadu is not mincing words. In his first report, submitted on Tuesday April 2nd, to the National Assembly, he highlights dozens of shortcomings and observes a lax attitude that costs taxpayers billions of rupees.
He believes that financial management is too amateurish and argues that performance management needs to be improved.
“To improve accountability in the public sector, financial management must be professionalized and the performance management system must be enhanced,” declares Dharamraj Paligadu, the Audit Director, in his foreword.
“As the Audit Director, it is my duty to provide the National Assembly and the general public with information on the value for money in essential services provided to citizens, as the government spends billions of rupees each year on these services,” he explains.
And his first observation: “Despite spending about Rs 178 billion for the financial year 2022-2023, there are delays in the implementation of essential service projects that have harmed the population.”
He cites two examples to illustrate his point. The first concerns the vast number of drainage projects that have yet to materialize.
“Eighty-six percent of the drainage projects entrusted to the National Development Unit have not been implemented during the financial year 2022-2023,” he denounces.
The second example cited is the Internet Connectivity Project, which “has yet to be implemented in secondary schools despite being initiated a long time ago.”
The Audit Director draws the attention of the National Assembly and those in charge of public sector governance to the fact that an analysis of the main conclusions for the financial year 2022-2023 “has revealed that inadequate accountability mechanisms at various levels within ministries and government departments are the root cause of the recurrent problems reported over the past three financial years.” 83% of ministries do not comply with the law.
The Audit Director notes that more than three-quarters of ministries are in breach of the law.
“As of January 12, 2024, 83% of ministries and government departments have not complied with Article 4B of the Finance and Audit Act regarding the submission of their performance reports within the legal deadlines, while 57% of the Key Performance Indicators (KPIs) set have not been met,” he reproaches.
Over the past three financial years, the National Audit Bureau has repeatedly flagged the following issues, among others, within ministries and government departments: Weaknesses in expenditure control, Deficiencies in project management, Failures in procurement management, Deficiencies in asset management, Non-compliance with applicable laws.
33% of issues flagged in the previous report resolved. The Director of Audit not only uncovered problems in various ministries and government departments, but also tracked 168 issues raised in last year’s audit report, for the fiscal year 2021-22.
As of February 2024, “approximately 33% had been resolved at the ministry and government department level, leaving 67% partially resolved or unresolved.” Even worse, “issues highlighted in previous years were again observed in the fiscal year 2022-23.
An analysis of the findings revealed that the underlying causes of these recurring problems are inadequate accountability mechanisms and monitoring systems at various levels in ministries and government departments.” From his perspective, action must be taken urgently.
Summary of key audit findings and reform proposals, In his report, the Director of Audit draws five major conclusions:
- Inadequacy of the existing legal framework for effective control mechanisms over Rs 28.2 billion in subsidies granted to parastatal bodies, local authorities, and the Rodrigues Regional Assembly for the fiscal year 2022-23.
- Significant delays in the implementation of projects related to the provision of essential services, impacting citizens’ lives.
- Inadequate monitoring at the ministry and government department level on the implementation of investment projects by other public sector entities under their authority, leading to project delays and poor contract management.
- Limitation of the National Audit Bureau’s audit scope to ascertain whether public funds paid to private entities are used for purposes approved by the National Assembly.
- The audit committee did not meet its objectives and the risk management framework was not developed.
Three reform proposals:
In addition to the findings, Dharamraj Paligadu, Director of Audit, outlines three major reform proposals that he considers essential to improving project and government finance management.
- Ministries and government departments should prepare their annual report, including financial statements prepared in accordance with International Public Sector Accounting Standards (IPSAS) and a performance report, to be submitted to the National Assembly.
- The professionalization of financial management in ministries and government departments.
- The development of a code of good governance for ministries and government departments that will enhance trust in public administration.
In his report, the Director of Audit further emphasizes that “a focus on good governance can help public sector organizations improve their performance while meeting the public’s demanding accountability standards. However, governance should not be perceived as merely a narrow compliance requirement, but rather there must be commitment from all officials.”
Source: Defi Media
