ARMED FORCES RENT E8M CARS FOR UNREST

MBABANE – The use of private vehicles by security forces during the political unrest has come at a huge cost to government.

Principal Secretary (PS) in the Ministry of Public Works and Transport, Thulani Mkhaliphi has revealed to the Auditor General (AG), Timothy Matsebula, that an amount of E8 342 237.64 was spent in respect of renting the vehicles for the country’s ‘armed forces’ to intervene during the unrest. In late June and early July 2021, the Kingdom of Eswatini experienced unprecedented civil unrest, that resulted in dozens of deaths and hundreds of injuries. The unrest was marked by violence, looting, arson and large-scale destruction of public and private property.

Overwhelmed

The situation overwhelmed the police force, and the army had to come out of the barracks to assist, something that caused international uproar as the country was labeled a military State. A number of private vehicles were seen being driven around by members of the State security forces in the midst of the unrest. Social media captured a number of private registered companies that were used by members of the State security forces during this period. These vehicles, as has now been revealed, were rented under the Central Transport Administration (CTA). This is said to have seen the ministry overspending by as much as 642 per cent on this one budget item. The function of the CTA is to purchase, maintain and dispose of government vehicles and other related equipment, as well as to provide fuel for government vehicles.

Hire

It also provides vehicles on short- term hire to government ministries and departments. Matsebula, the AG, has questioned the value for money accrued from this expenditure, which he said was exorbitant. Also, he said the PS failed to provide justification for the exorbitant expenditure.
This is information contained in the Financial Audit Report on the Consolidated Government Accounts of the Kingdom of Eswatini for the financial year ended March 31, 2022. The report was tabled in Parliament on Friday as part of the documents accompanying the Appropriation Bill of 2023, during the budget speech that was delivered by Minister of Finance Neal Rijkenberg. After being tabled, the AG’s report will now be scrutinised by the Public Accounts Committee (PAC) where all those implicated and seen as having a case to answer will be called to account for their actions.

Exorbitant

Matsebula said he warned the PS, who is the ministry’s controlling officer, that they had incurred an exorbitant expenditure in respect of rentals, amounting to the E8.3 million under the CTA. He said this resulted in an unappropriated over-expenditure of E7 217 237.64 (642 per cent), since the appropriated budget was E1. 5 million and the released budget was E1 125 000, in the fiscal year ended March 31, 2022. The AG said he advised the controlling officer that in all procurement activities, value for money and competitive prices should be opted in the use of public funds, and should ensure that wasteful and fruitless expenditure was avoided at all cost. “In response, the controlling officer concurred with my audit observation and explained that the over expenditure was due to private car hire for armed forces for intervention during unrest.

“He further disclosed that CTA has started procuring vehicles for the forces with the vehicle replacement budget and that this will drastically reduce the need for private car hire,” Matsebula states in his report. He said the response of the controlling officer was noted; however, evidence to this claim was not provided to him, to justify that the exorbitant expenditure for rentals was only due to private car hire for armed forces, and he did not give any value for money justification for the option to hire at such high cost.

Concern

The AG noted that this was the second time in as many financial years that he is raising the same concern of exorbitant expenditure in respect of vehicles rentals in the ministry, as during the financial year ended March 31, 2021 he uncovered that an amount of E18 919 074.10 had been spent for the same purpose instead of procuring new vehicles since there was an adequate budget. He said he advised that the ministry should cease incurring un-appropriated expenditure and should find the best balance between ‘rentals spending with no properties ownership’ and ‘buying to own the properties’ in line with the costs, benefits and risks, and consider ‘value for money’.

“Value for money is one of the key considerations of any decision involving the use of public funds across government, as it is supported by the ‘Five Case’ Model of Decision Making. The Five Case Model is a decision making tool used by developed governments to make informed strategic, economic, commercial, financial and management decisions,” Matsebula said.

Value for money

In terms of ‘value for money’, the AG said, he did not think that the costs of these rentals shall be sustainable and affordable in the foreseeable future, due to the declining trend in the government’s revenue streams, and funding may not be available to sustain the rental option. The AG, in the previous audit, warned that the rental decision was a violation of Section 401 of the Financial and Accounting Instruction, which states that; “Money must not be spent merely because it has been authorised by Parliament. Controlling officers should encourage economy by the careful distribution of funds.”
Matsebula said he was concerned about the fact that the ministry opted to spend E18 919 074.10 on cars rentals instead of procuring new vehicles with the value equivalent to the leasing price.

Leasing

He said he was not aware of any constraints by government to the ministry for procuring the cars other than leasing them, and the justifications on why the controlling officer opted to hire vehicles, as some of them incurred extra costs, damages costs and exceeded the authorised kilometres, which increased the prices even more and drained more of the public funds. Further, he said he was not aware of whether the option to buy new vehicles was weighed against the option to rent them. He said this would enable the ministry to identify the best balance of cost, benefits and risks, and consider value for money. While in the latest audit the companies from which the vehicles were rented have not been mentioned, the previous audit listed four car rental entities. These were; African Car Hire, Capital Car Hire, Continum Investments and Woodford Car Hire.

Supporting

Three of these companies (African Car Hire, Capital Car Hire, Continum Investments) were found to have rented out the vehicles without any supporting documents. It was also discovered that there were overpayments of invoices amounting to E66 891.45 made to Woodford Car Hire and Capital Car Hire. These were payments made without proper calculations of the attached invoices. The AG drew the attention of the controlling officer, that there were no supporting documents (payment vouchers) for the expenditure amounting to E10 276 594.58 to fully authenticate the payment made, thus limiting his audit scope.

The non-provision of documentary evidence on the payments made to the car hire companies, the AG said, was a clear concealment of evidence that the expenditure may not have been utilised for the described purpose. He said this act by the ministry was a tactic, deliberately exercised to conceal any possibilities of embezzlement or misappropriation of public funds that he may discover on the supporting documentation.

Implemented

He further stated that he was deprived the right to have access to all information and documentation so that he could advise on improvements that should be implemented for the betterment of the operations. This occurrence, he added, was in contravention of Section 802 of the Financial and Accounting Instructions which states that all vouchers must contain full particulars in respect of the payment made to enable the voucher to be checked and paid without reference to any other document; and highlighted that supporting documents must be secured to the voucher.
He said he advised the controlling officer to provide the Office of the Auditor General with the outstanding documents and always adhere to Section 802 of the Financial and Accounting Instructions.

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