Federal Auditor Calls For Recovery Of Mismanaged Funds

Advocates for strong financial audits before stock market entry

A report from the Office of the Auditor General reveals that government offices only managed to return 11 percent of the 443 million birr they had been instructed to return to federal coffers following last year’s audit results.

It was among the findings revealed by Auditor General Meseret Damte during her annual report to Parliament conducted earlier this week. Meseret said that although she was encouraged by actions taken against those who have abused public resources over the last three years, there is still a need to push to recover more mismanaged taxpayer money.

The 60-page report presented to MPs uncovered gaps over the auditing period, including financial activities that violate finance rules and regulations, uncollected money reported as collected, revenue records that lack substantiation, and revenue records with contested income and accuracy, as well as damages compensation recorded as revenue while not being paid.

The audit report for the 2022/2023 fiscal year included 162 government-budgeted offices, which only managed to return 48 million birr of the 443 million birr they had been instructed to as a result of the preceding year’s audit report.

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The report shows over 14 billion birr in receivables that has remained unpaid for 10 years or longer, 514 million birr in unreconciled payments, and unsubstantiated expenditures of 363 million birr across 15 institutions. The report also reveals 19.4 billion in uncollected revenues from taxes and customs duties at the Ministry of Revenue and the Customs Commission.

The report also highlights oversights and irregularities in procurement processes without government purchase directives and regulations amounted to close to four billion birr collectively at the Immigration and Citizenship Service, Ministry of Revenue, Water and Energy Ministry, Federal Police Commission, and the Ethiopian Police University, among others.

According to the audit report, the Ministry of Mines, despite existing for 50 years, is yet to produce a mining development policy. The Ministry also managed to collect just USD 1.2 billion of the USD 4.2 billion it had targeted between 2017/18 and 2023.

Meseret emphasized that delays in 13 public projects incurred 16.6 billion birr in additional expenditures, while state-owned enterprises failed to collect a sum of 12 billion birr in the three years leading up to 2023.

During a press conference on Friday, the Auditor General stressed the importance of strong financial audits for companies before they enter the upcoming capital market to prevent mismanagement and ensure financial accountability. She observed that the Capital Market Authority has inconsistent financial statements and urged officials to establish standardized financial reporting.

To address these issues, the Office of the Auditor General has committed to providing training on the capital market’s financial statements and operations so as to build strong internal auditors.

“Without exaggeration, I can say it is the Auditor General that stands in an independent, strong institutional position with no external imposition or involvement in our auditing work,” said Meseret.

However, she mentioned the many challenges that the over 489 auditors under her face in performing their duties with a daily per diem of 300 birr meant to cover three meals and accommodation sometimes in areas that are considered risky for travel.