AG WINS FIRST ROUND AGAINST PARASTATALS

LOBAMBA - Had it been a football match, the score would have been 1-0 in favour of the Auditor General Timothy Matsebula, against certain parastatals.

This manifested itself at the House of Assembly yesterday where Members of Parliament (MPs) adopted and passed a recommendation he made that parastatals that did not submit audited financial statements should have their subventions withheld until they complied.

The AG falls under the Ministry of Finance.
Making it easy for the MPs to rule in favour of the AG is a recommendation contained in the Report of the Finance Portfolio Committee on the debate of the ministry’s Annual Performance Report for the Financial Year 2019/2020 and the Budget Estimates for the Financial Year 2020/2021.

Fastrack

The recommendation reads, ‘Subventions for parastatals in breach of the Public Enterprise Unit Act be put under Head 60, pending their appearance before the Public Accounts Committee (PAC), which is ready to fastrack their appearance’.

During the sitting yesterday, the issue of the parastatals was brought to the fore when Lobamba Lomdzala MP Marwick Khumalo submitted that the Royal Eswatini National Airways Corporation should not be given its subvention since it was listed as one of the parastatals that had not furnished the AG’s Office with its audited financial statements for the previous financial year.

This was during the adoption and passing of the Report of the Ministry of Public Works and Transport Portfolio Committee on the debate of the ministry’s Annual Performance Report and Budget Estimates for the Financial Year 2020/2021.
“Let the subvention be withheld until the parastatal appears before the PAC. This will send a strong message that we are sensitive to parastatals that do not bring audited financial statements. It will also show that we support and respect the work of the AG,” Khumalo submitted.

Minister of Public Works and Transport Chief Ndlaluhlaza Ndwandwe pleaded with the MPs to at least give the parastatals until the end of March to submit the audited financial statements.

Ndwandwe justified his plea by arguing that the subventions would be made available in April when the next financial year commences and that he was adamant that the parastatals would have complied.
However, his pleas fell on deaf ears.

Prime Minister Ambrose Mandvulo Dlamini also tried to reason with the MPs by calmly submitting that the MPs should at least consider that some of the elements of the AG’s recommendations should be considered.

However, the Speaker quickly made him aware that he was out of order as it was not the time to debate.
MP Khumalo stood up to emphasize that the law had to be followed and respected at all times.

“The Royal Eswatini National Airways Corporation failed to submit its audited financial statements. The parastatal did not account for around E300 million so its allocation for the next financial year should be put on Head 60,” he said. Khumalo said it was good that Chief Ndlaluhlaza had said that the parastatals would have submitted by end of March.

“This will be to their advantage to act quickly and submit the financial statements before the financial year begins in April,” he submitted.
Khumalo was supported by Motshane MP Robert Magongo.

Battle

However, it seemed like Khumalo had lost the battle when the Speaker allowed that the MPs should vote in order to determine those who were in favour of putting the Royal Eswatini National Airways Corporation budget under Head 60. About 14 MPs supported the recommendation while 31,who were joined by Cabinet ministers, voted against it. This meant that the recommendation had not succeeded.

It was Ndzingeni MP Lutfo Dlamini who seemingly revived the issue when he submitted that it should be clearly stated if the House was determined to work with the AG. The Ndzingeni MP submitted that the House adopted the recommendation in the report of the Ministry of Finance.

This because the report of the Ministry of Finance had earlier been adopted and passed together with others which the MPs felt did not have issues. Khumalo, as expected, stood up to support him.
The Speaker then intervened by explaining that indeed, the Finance Ministry report, which contained the AG’s report, had been adopted and passed.

“It states clearly that allocations for parastatals that did not comply should be put in Head 60. As the House, we have adopted that recommendation,” the Speaker said.

In jest, MP Lutfo requested the Speaker to even name the parastatals for purposes of having them recorded on the Hansard.
In the end, it became obvious that MPs had won. This is despite some efforts which were made by both the PM and Minister of Finance Neal Rijkenberg.
This took place when the House was going through the Committee of Supply stage of the Appropriation Bill, 2020 (Bill No.01 of 2020).
This is the stage where the Speaker leads the House in either passing or rejecting the allocated budget for each of the departments listed.
Minister Rijkenberg brought it to the attention of the House that some of implicated parastatals eventually submitted their audited financial statements and advised that such should be considered.
Advised
The minister advised that the House should first look at the list and determine which ones had submitted so that they did not find themselves having their allocations put under Head 60. On the other hand, the PM submitted that the House should perhaps be given clarity on whether the audited financial statements had reached the PEU Office and what would be the way forward. The PM was of the view that it should be clear as to how long the allocations for the affected parastatals would be kept under Head 60, especially after they complied.
Again, the Speaker minced no words saying all the parastatals would be expected to appear before the PAC.
“Do not disturb me, let us continue working. The parastatals should come and explain,” he said. During a press briefing last month, the AG suggested that government should withhold subventions for public enterprises that do not submit audited financial statements.
According to the AG’s Report on the Consolidated Government Accounts for the Financial Year Ended March 31, 2019, about 11 public enterprises had, at the time the report was compiled and tabled, not been compliant in terms of submitting their audited financial statements.
So serious was the issue that one of them, the Eswatini National Trust Commission (ENTC) ,was alleged to have last submitted its audited financial statements in 2016.
Support
In his report, the AG stated that each year government, through its ministries, provided financial support to its public enterprises in the form of subvention, to implement capital investments.He said he observed that in addition to the initial capital investments, government transferred an amount of E1 409 355 886 to support its public enterprises in the financial year ended March 31, 2019 but that an amount of E824 968 703 was not audited.
He mentioned in his report that some public enterprises did not submit the audited financial statements as required by the Public Enterprises Monitoring and Control Act, something which he said indicated that the subventions they received were not accounted for.
At the time, the public enterprises which made the list of those that did not submit their financial statements included the Eswatini Water and Agricultural Development Enterprise (ESWADE), University of Eswatini (UNESWA), Eswatini Christian Medical University (ECMU) and Southern Africa Nazarene University (SANU), among others.
It should be noted that it was not mentioned during the sitting yesterday as to which ones had eventually submitted their statements.

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