From an employee who claimed to have been on the road for 200 days in the year to air tickets issued to destinations different from meeting venues, an internal audit has raised questions about financial mismanagement in the East African Community Secretariat.

The audit, which found that as much as $10 million could have been misused or mismanaged, comes as the Arusha-based regional body struggles to raise money from member states and donors to meet its budget.

In response to the findings, the new Speaker of the East African Legislative Assembly, Dan Kidega, has called for closer political supervision of the EAC Secretariat by the Council of Ministers.

“The ministers need to improve on their political supervision of Community affairs from Arusha and not from the partner states as they are doing,” Mr Kidega told The EastAfrican. “There is a need to have the Council moved to Arusha to perform their functions as earlier proposed by EALA members and the policies at the EAC need to improve.”

The audit found that the EAC Secretariat overspent on some activities without seeking approval from the Council of Ministers. The most notable over-expenditure was on international air tickets and per diems, which were 300 per cent of the budgeted amount.

The audit report published by the EALA budget committee found that the Secretariat spent $3.47 million on air travel, or about 10 per cent of its total expenditure. It also found several anomalies, including tickets issued without authorisation or to the wrong people, and tickets issued to destinations different from those on the authorisation forms.

READ: Excessive use of cash seen at EAC

In addition, staff members destined for the same meeting and travelling from the same location had different routings; duplication of tickets, as well as the purchase of very expensive tickets that were out of range for the given routes. There were also several incidents of unused tickets paid for by the Secretariat.

The audit noted excessive payment of per diems, with some staff receiving up to 200 nights a year. Some of the meetings were purely administrative, such as evaluation of bids, and did not warrant holding meetings outside the EAC premises.

Although all expenditures were properly authorised, the payments appeared to be excessive, given that a year has 250 working days and staff also have to undertake desk work at their stations, in addition to 30 days of annual leave. Such cases of unnecessary or irregular travel could have cost the Secretariat about $1.04 million, the audit found.

EAC Secretary-General Richard Sezibera had not responded to an interview request by press time. In its management response to the audit findings, the EAC Secretariat noted that most events and travel plans are co-ordinated by the respective ministries of EAC affairs in the partner states. Where tickets are issued and not used, the Secretariat said, it normally seeks refunds from its air-ticketing agents.

However, Speaker Kidega told The EastAfrican the EAC needs to invest in video-conferencing technology to reduce travel and associated costs.

EALA member Abubakar Ogle told this newspaper the audit findings indicate weaknesses in budgetary controls at the Secretariat that undermine the intentions of the paying member states and donors.

“There is a need for better accountability, transparency and value for money,” he said.

The audit also found anomalies in payments made to staff members in lieu of leave, payments to contractors without supporting documents, expenditures on tenders and prequalification, contracts awarded in meetings without quorum, unaccounted-for staff advances, allowances to staff, the construction project of the EAC headquarters in Arusha, procurements as well as irregular payment of value added tax.

A total of $35,651 was paid to officers in lieu of leave without evidence of approval, in contravention of EAC rules, and outside budgetary allocations.

READ: Report exposes wanton misuse of funds at EAC

The Secretariat was also found to have paid $36,557 to a hotel in Arusha in rent for office space, more than a year after the tenancy agreement had expired and without its being renewed.

Where work was outsourced, the audit found that the Secretariat sometimes disregarded the advice of the hired experts. For instance, Crown Agent was paid $40,854 to shortlist candidates for 12 jobs at the EAC.

The firm submitted a report containing a summary of all applications received, a list of qualified candidates, and a recommendation on which qualified candidates the Secretariat should consider for the final interviews.

However, the EAC went ahead and interviewed six candidates who had been disqualified by the consultant, and paid for their travel expenses.

The EAC Secretariat, according to the report, advanced $384,834 to staff at the close of the financial year for activities that were to be undertaken in the subsequent year but were irregularly captured in the books as expenditure for the year under review, contrary to the accrual basis of accounting that was adopted by the Community.

Auditors found several instances of unauthorised rolling over of budgets due to laxity and irregularities in the management of EAC funds.

For example, a meeting of stakeholders over the design of the Arusha-Voi road meant to take place in the 2011/12 financial year at a cost of $47,400 was pushed forward without authorisation from the Council of Ministers. And when the meeting was eventually held, in 2012/13, the cost jumped to $70,600 due to higher rates of subsistence allowance that were then applied.

“The new activity budget was never approved, the requesting officer also acted as the budget officer and confirmed availability of the budget,” notes the report.

No records

In cases of advances for meetings and conferences both within and outside Arusha, the audit noted that most accountability records lacked relevant information such as invitations, attendance registers, and officials nominated to attend. As a result, the audit noted, the same persons keep attending most of the meetings and, in addition, minutes and resolutions were often not filed.

The audit findings will raise questions about the financial controls and management within the EAC at a time the Secretariat is trying to grow contributions from partner states and donors.

Mr Kidega told The EastAfrican that although the audit report has been presented to the House, no recommendations on the misuse of the funds have been made because the Council of Ministers asked to go through the concerns raised and take action where necessary before their (EALA) next sitting scheduled for March 15-27 in Bujumbura.

The Council of Ministers will be meeting mid this month before the EAC Summit scheduled for February 20 but it is not known whether the ministers will discuss the issue or will agree to meet for a special meeting to discuss the misuse of money at the Secretariat.