In what appears to be a deliberate scheme to shield themselves from public scrutiny yet they spend taxpayers money, some key agencies are using hired private auditors and ignoring the country’s Auditor General of state finances.
The Auditor General is by law mandated to review the books of accounts of the government that covers all revenue and expenditure. As part of that role, any entity in which the state has invested taxpayer’s money, the AG is supposed to have unfettered access to its accounts and operations at any time the AG pleases. The Auditor General Obadia Biraro in turn submits annual state audits to Parliament.
However, 24 entities have simply looked the other way when the financial year ends, yet they should be sending their accounts books to the AG without him asking. Together, these entities are worth a combined Rwf 2,263,333,800,608 (or about $2.3bn or more than 20% of the country’s GDP).
Among those agencies is Ngali Holdings Ltd whose existence has been quietly questioned by many officials, but among the publicly known roles it holds is that it collects some taxes on behalf of the tax body, the Rwanda Revenue Authority (RRA). It also has contracts to collect taxes for districts from their local businesses.
Another agency on the list that has refused to submit to audit is the Agaciro Corporate Trust Ltd, which is registered as an investment arm of the Agaciro Development Fund, the national wealth sovereign fund. As of end 2019, it had collected or received a total of over Rwf 200bn from Rwandans.
King Faisal Hospital, the country’s elite referral hospital, has also not been filing its financial statements to the Auditor General.
There are also other entities as outlined in the list below, some of which are not easily identifiable to the ordinary Rwandan.
Commenting about the entities’ refusal to file their books of accounts, the AG in his report to Parliament in June, wrote: “None submission of financial statements to the Auditor General is a non-compliance with the laws and regulations of which the principle of transparency and accountability may be undermined.”
“All companies in which the Government has invested its funds, [Finance Ministry] should ensure that their financial statements are submitted to the Auditor General for audit.”
See list of concerned entities
Without giving access to the AG, the media and general public has no way of accessing accounts and operations of these companies. Some of these entities like the Rwanda Social Security Board (RSSB) and the National Bank of Rwanda, do hold annual press conferences where they give general statements about their performance.
However, those press conferences are meant to paint themselves as doing a perfect job. They don’t give specifics about all their investments including tenders and contractors. The processes through which their decisions are done, are also not known. All these are details the national Auditor General would have accessed and shared with Parliament.
It is also important to note that MPs get a redacted version of the Auditor General’s data reaching, sometimes, up to 1,500 pages. The data outline specifics like tenders and contractors, is not given to Parliament.
The AG publishes on its website a summary of about 200 pages, which is the one the media gets. The Chronicles has been able to access the full cache of data submitted to Parliamentarians.
In response, the Finance and Economic Planning Ministry (MINECOFIN) told the AG that it will “continue to remind” those concerned entities of the obligation to send their books to the state auditor.
The full statement from the Finance Ministry reads: “Clear procedures have been provided by MINECOFIN through the comprehensive standard operation procedure framework for Government controlled companies (CSOPF) of January 2019. MINECOFIN will continue to remind board members and companies to comply with Government regulations.”
As if that isn’t bad enough, some of these entities are going ahead to hire international audit firms at exorbitant amounts to look at their books of accounts. The Chronicles obtained the full list of those state entities and the firms they hired.
The entities went even further. Instead of handing those privately audited statements to the Auditor General of taxpayers’ money, they are sending them solely to the finance ministry. In addition, the Auditor General was not informed about the hiring process.
“Hiring of audit firm without the involving Auditor General is a non-compliance with [the] law in force that may undermine the principle of transparency and accountability,” writes the helpless AG, in submission to Parliament, which also has little it can do.
“All companies in which Government invested its funds should ensure that the Auditor General is involved in every step of audit as prescribed in the [laws in place].”
See list of entities and private firms hired
The finance ministry, which releases taxpayers money to these companies told the Auditor General in a written submission reading as follows:
The Comprehensive standard operation procedure framework for Government controlled companies (CSOPF) of January 2019 issued by MINECOFIN in pg. 26 to 27 states clearly that The Auditor General shall be the Auditor of all Government controlled Companies. The manual further states that, it shall be the duty of the Board of Directors of the company to inform the Auditor General that they intend to appoint the Auditor General as the External Auditor etc.
This practice has been reminded in the financial reporting procedures addressed to all State-Owned companies however, some of those companies indicate that since RRA requires that financial statements for purposes be audited by external auditors approved by RRA and that Office of Auditor General is not included in the list provided by RRA; those end up engaging external auditors. [….] MINECOFN will continue to remind board members and companies to comply with requirement.
With having access to books of accounts, for entities like RSSB, it means the nation may never know what happened behind closed doors when a decision was made to build the Vision City estate where unconfirmed reports have pointed to questionable expenditures.