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State Entities Mishandling Millions in Retained Fees Charged for Public Services - Minister Biti

To increase accountability and ensure that public funds support budget objectives, FM Biti said the government departments in question must submit 2009 financial statements by the end of February 2011

Zimbabwean Finance Minister Tendai Biti in his recent budget statement said some 75 government departments are withholding millions of dollars in fees from the Treasury and some have not filed financial statements to relevant authorities for seven years.

Such departments, he said, include the Office of the Registrar General and other state entities that collect fees for public services and retain them under Section 18 of the Public Finance Management Act. Biti proposed in his statement to oblige such departments to submit financial statements for audit by February 2011.

Of the 75 entities allowed to retain funds, 66 retain 100 percent of revenues collected while the other nine retain agreed levels ranging from five percent to 40 percent.

Biti said proper accounting for such retained resources remains a challenge as most of the departments are not submitting financial statements.

“Only 17 have so far submitted their 2009 financial statements for audit with the rest having been last audited between 2003 and 2007," Biti said. He said an analysis of the expenditure patterns of such funds indicates gross abuse by most departments.

To increase accountability as to public resources and ensure that public funds support budget objectives, he said the government departments in question must prepare and submit 2009 financial statements by the end of February for audit. Failure to do so, warned the finance minister, would result in cancelation of retention rights.

Economist Eric Bloch said the departments are supposed to submit statements to their internal auditors before they go to the national comptroller and auditor general.

Bloch told reporter Gibbs Dube that the finance minister is likely to hire private auditors to scrutinize departmental finances as state auditors are in short supply.

Elsewhere, the 2011 budget Biti unveiled last week contains innovative initiatives for funding small entrepreneurs, including ventures launched by women.

The minister proposes a US$15 million microfinance revolving fund to provide funding to low-income groups unable to access capital through the banking sector.

The Commercial Bank of Zimbabwe and the Arab Bank for Economic Development in Africa will put in US$10 million while Harare will contribute US$5 million.

Hyperinflation in the closing years of this decade forced the closure of most Zimbabwean micro-finance institutions - their number fell from 1,800 to just 27 in 2008.

Economic commentator Bekithemba Mhlanga said government should tightly monitor disbursement of such micro-loans.

To give women a boost, Biti proposes to allocate US$2.5 million for income-generating projects and gender awareness campaigns.

The fund, to be run by the Ministry of Women’s Affairs, is for women-owned projects including poultry raising, cross border trading and brick making.

Beauty Kerr, chairwoman of the Bulawayo branch of the Movement for Democratic Change formation headed by Deputy Prime Minister Arthur Mutambara, said such funds should have close oversight so they are not abused by politicians seeking votes.