EAC asks for more money, despite low absorption
Saturday September 10 2016
(Clockwise) Fishermen struggle to make a catch in a hyacinth infested Lake Victoria. A vessel gets stuck on the lake — it took three days to free it. Residents manually remove the hyacinth to try and clear part of the lake. EAC’s Lake Victoria Basin Commission is mandated to deal with the weed but the institution is now accused of financial impropriety. PHOTOS | FILE
The East African Community is not spending a third of the money it receives, despite the Secretariat’s complaints about underfunding.
The Community has consistently complained about inadequate financing and has been pushing the Council of Ministers to come up with sustainable funding mechanisms.
One of the options that was discussed by the Council of Ministers sitting in Arusha on September 5, include a hybrid of a levy and equal contribution by partner states with a commitment to increase the Community’s budget.
The levy is expected to increase the Community’s financing, while the option of equal contribution is meant to retain the principles of equity, solidarity and equality as included in the Treaty.
But even as the Council of Ministers considers these options, an accountability report by the EAC Audit and Risk Committee found that institutions and projects of the Community, whose budget for the 2014/15 financial year was $125.6 million, only spent $81.4 million.
The report, which was discussed by East African Legislative Assembly (EALA) on September 2, found that the money spent represents just 65 per cent of what had been budgeted.
Having utilised just 27 per cent of the total budget allocated, the African Peace and Security Architecture was one of the worst performing projects, despite the Community being a region with a large number of peace and security challenges.
These challenges include the conflict in Burundi and the effects of conflicts in the Democratic Republic of Congo (DRC), Somalia and South Sudan, which have turned East Africa into one of the biggest refugee hosting regions in the world.
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A report by the Audit and Risk Committee says the Community’s budget is funded about 40 per cent by partner states and 60 per cent by donors but the Secretariat had failed to use the money at its disposal.
The report also notes that many of the Community’s projects and programmes suffer from under-absorption of their budgetary allocations, and that the Community requires proper budgetary planning, coherence and consistency in the budgeting process.
The Community also suffers from poor financial management, including the fact that transactions on the general ledger were adjusted over a thousand times after submission of financial statements.
Institutions of the EAC are also accused of irregularly advancing money to staff and not being transparent in procurement. Highlighted in the report is the Kisumu-based Lake Victoria Commission (LVBC), mostly funded by donors.
At $13.4 million, LVBC is the third-best funded EAC project after the Secretariat and EALA yet is one of those cited for underperformance and irregular payments to staff.
But EAC Secretary-General Liberat Mfumukeko says these challenges are being addressed and that the EAC’s financial management will improve in the next few months. He highlighted the move to reduce travel days for staff and the number of workshop days, as some of the key reforms being implemented.
“With these reforms, the Secretariat is due to save about $6 million a few months from now,” said Mr Mfumukeko.
READ: EAC Secretary General prioritises financial management, targets ‘tangible results’
On procurement, he said the Community is improving, citing assessments previously done by the European Union that returned poorer scores. But the procurement manual has since been updated.
“Last month, the EU assessment passed a positive result,” he said, adding that the problems of the EAC’s institutions were being dealt with.
But according to EAC Secretariat spokesperson Richard Owora Othieno, the budget’s underperformance is not because of poor planning, but because of partner states’ failure to contribute money on time. However, the Audit and Risk Committee said this tendency had declined during the financial year under review.
Remissions from partner states in the financial year 2014/15 improved to 67 per cent compared with less than 35 per cent in the previous years. The Inter-University Council of East Africa, which has failed to collect arrears from partner states was the exception.