RAA says govt was in budget deficit for 245 days in 2014 FY

The untimely release of grants and also seasonal revenue collection has ensured that the government has to constantly take short term loans to meet its expenditure.

The Royal Audit Authority (RAA) in its annual audit of the ‘Annual Financial Statement of the Government till the fiscal year of 30th June 2014’ found that the government’s Consolidated Account had been in a negative balance for 245 days for the financial year ending in June 2014.

It says that the government continues to depend on short term borrowings in the form of Treasury Bills, Ways and Means Advances and Overdraft facilities from the Central Bank.

For resorting to the above short term borrowings, the government had to end up making interest payment to the tune of Nu 58.738 mn.

Instances were also observed whereby the redemption or payback of T-Bills was made by availing Ways and Means Advances which also indicated lack of cash management by the government.

While the government was short of cash on one hand on the other hand it was found that there was abnormal delay in surrendering closing funds balances or unused money amounting to Nu 125.16 mn by various agencies. The agencies took 30 days to as high as 200 days to surrender this unused money. The RAA says this showed lack of automated control over payments to be made to the Department of Public Accounts (DPA).

The DPA also delayed in depositing the surrendered cash into the government budgetary fund account further distressing the government’s consolidated account.

The report says the automated control with respect to linkage between approved budget and releases had failed to function and so in some cases cash releases for current and capital expenditure were more than the approved budget.

The RAA has said that the amount withdrawn as per the cash book is less than that of the amount shown in the bank amounting to a difference of Nu 1.113 bn. The DPA has submitted that such differences were due to the cash book but the RAA has said the matter requires further review by the MoF.

The report also said that the employee’s contribution of the general provident fund as per receipts and payments statement from the payroll module indicated huge variation in the amounts reported. Further, the number of payroll using the payroll module revealed inconsistent number of employees.

The RAA also reviewed the current status of the earlier years audit findings and recommendations. Of the 17 findings in the 2011-2012 FY seven recommendations were implemented, eight were partially implemented and one is yet to be implemented. Of the nine findings in the 2012-2013 FY all were only partially implemented.