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AUDITOR General ‘Mathabo Makenete is concerned by the continued failure of government officials to comply with public financial management laws and regulations.
Ms Makenete, who was appointed auditor-general in March 2023, has just published her maiden audit report on the Consolidated Financial Statements of the Government of Lesotho for the year ended 31st of March 2022.
The report was tabled in the National Assembly on 22 May 2024 for consideration by the Public Accounts Committee (PAC).
In the report Ms Makenete makes scathing findings about the failure of the government’s Chief Accounting Officers to adhere to the prescripts of the country’s Public Financial Management and Accountability (PFMA) Act and other financial rules and regulations. As a result, resources that should be utilised for service delivery to benefit the public are sometimes needlessly lost.
Ms Makenete (MM) sat down for an exclusive wide-ranging interview with the Lesotho Times’ Bongiwe Zihlangu and Mohloai Mpesi at her official suite at the Government Complex to discuss her report and review her first year in office.
Excerpts:
LT: It has been over a year now since you last granted the Lesotho Times an exclusive interview. Here we meet again. Thank you very much for having us. You have just published your maiden Audit Report on the Consolidated Financial Statements of the Government of Lesotho for the year ended on the 31st of March 2022. How has the journey been thus far?
Makenete: The journey has been challenging but worthwhile because you know, when you step into a new environment, you are initially surprised at the way things are being done. Then you come to understand how and why they are done that way.
So, it has been a good one year. We made a lot of progress. We have had a lot of new things that we have put on the table to try and uplift the status of the office of the Auditor General.
When I first arrived here, the office was working… and of course there have been Auditors General before me. But you know when you look at how things have been done, you think that maybe things should be done in a different way. Plan better, introduce information technology (IT) systems since it was one of the areas that were deficient. There was literally no IT structure and we tried to make improvements in that area.
This has been a good journey, which resulted in the publishing of our first report, which we have just issued for the year ended 31st of March 2022.
It was much delayed, for which we apologise. I think we have come up with a good product. We took time to understand how certain issues have been presented previously. We tried to improve the way we were reporting to make our report more reader friendly.
So, we have tried to describe the findings that we made in a much simpler manner. We have outlined what the rules or policies were saying, then conditions that we found, the risks or impacts and then we made recommendations.
On top of that we have also decided to have a simplified English version of this report as well as a Sesotho version so that these reports can be more accessible to the public. That helps the public understand them better, ask questions and be better placed to relate to the issues that the Auditor General is putting on the table.
I think we could have gone faster but you know, when you are trying to do things better, you are going back and forth, trying to make sure that you have covered all the necessary ground.
LT: What challenges did you come across when you were compiling this report?
Makenete: The first challenge was the late submission of the financial statements from the Ministry of Finance and Development Planning.
Then along the line when we thought we were at the stage of completing the report, in an effort by the office of the Accountant General (‘Malehlohonolo Mahase) to try and unravel some of the huge differences that were outlined in previous auditor-general reports, they then submitted new information, which was substantial, and we took more time to try and understand the new submissions, how they could be used… to say they have established where the differences had occurred in the past.
That took us a bit of time. In fact, they had submitted a lot more information than we were able to handle because we were already running behind time. We decided that we would take the rest of the information into the new year.
It was a matter of late and additional submissions, then along the way we would arrange to have an exit meetings where we would explain the findings and receive responses from the Accountant General. But those meetings took a little bit of time because they (Accountant General’s Office) were busy. So, we experienced delays there. Even up to the time when we were supposed to have the final report signed, there were still some delays that we experienced.
LT: What were your major concerns when auditing the government books, particularly concerning the utilisation of public funds?
Makenete: What seems to be prevalent across the ministries is poor regard for the financial regulations in totality. The Chief Accounting Officers, I think I have to lay the blame with them. Chief Accounting Officers and responsible officers do not comply with the treasury regulations and Public Financial Management and Accountability (PFMA) Act.
In a nutshell, there is poor adherence to internal rules and regulations and internal controls. We see a lot of misdemeanours in the management of the public finances because it looks like there are no checks and balances.
There is poor accountability to the extent that where transactions have occurred, they are not put through to finality. We lack reconciliation of our various books of records. That leaves a gap for errors and omissions if they are not addressed on time. Then we end up with problems that at the end of the day, we cannot account for what had happened.
So, I think our biggest challenge with the financial systems of the government, is improper management of the finances because there is no adherence to rules and treasury regulations by responsible officers.
LT: Now, what about where the government allocates funds for people centred projects, but such projects never get off the ground while the public continues to suffer? What would you say about poor service delivery perpetuated by poor management of finances?
Makenete: What seems to be the problem is that there is a need identified and funds are made available, but unfortunately what is not put in place at the right time, are the prerequisites to ensure that those funds can be used to address that need.
A project can be agreed to, but you would find that the prerequisites for that projects to take off are not there. Funds will be allocated, but then there are delays in implementation. This is caused by the fact that maybe the staff are not there or it is perhaps the absence of the management committees.
What it then says is that the implementation of that project is delayed, whereas that project was going to serve a purpose. The purpose is not met but funds have been allocated. The funds that could have been used to create employment opportunities.
The challenge is that they don’t put in place the prerequisites first, but funds come and at the end of the day, they are not used because they don’t know where to start.
Cash flow planning is not done properly. They would say they need so many millions and at the end of the day, they don’t use the millions requested. The usage level is very low.
LT: When you compare the environment here (Auditor General’s office) and your previous work at the Central Bank of Lesotho (CBL), what would you say in terms of the systems? Would you say the systems here allow you to spread your wings to do your work efficiently?
Makenete: The two environments are, unfortunately, very different. The CBL was a very controlled environment because if it does things wrong, the whole economy is going to be in a mess.
The Central Bank could not afford to make mistakes, it is an environment whereby management committees look into various aspects of the economy, just so that one person doesn’t make a decision which is going to affect the whole economy.
It (CBL) works through a lot of policies and regulations that govern the financial sector, which makes it easier for them to do the right thing because they are controlled.
When you come here (Auditor General’s office) you would find that okay, the rules and regulations are there but the implementation is not up to scratch.
People can take chances with not implementing because the repercussions will not be felt as much as if in the Central Bank. If there was non-compliance to the financial regulations, the impact would immediately be felt.
So, it is different because, while the rules are there in government, there is no consequence management in place. There is that laxity which makes the two institutions different.
The infrastructure at the Central Bank is so advanced and everything is there for them technologically. This side you are struggling, no internet, no telephones. As we are sitting here, there is no telephone in the office of Auditor General. Everybody is on their personal mobile phones. For me to call my deputy, I have to do it from my cellular phone. There is no internal office telecommunication system here.
You can see now we are depending a lot on people’s own gadgets. The infrastructure is sadly lagging on the side of government. I have been here for about a year and three or four months, and since we are located on the fourth floor, the lift has not been working since February last year. So, everything is not attended to.
The magnitude in which things are not going right in the government or the Auditor General’s office is so big.
LT: Last year you stressed the importance of the Office of the Auditor General being autonomous. The lack of autonomy then was your major concern. What have you been doing to drive and achieve that space?
Makenete: It was a major concern, and it still is. We are continuously making noise about it. We are talking about it to relevant bodies, the Public Accounts Committee is one of them. We are where we are really trying to impress upon them to help with the recommendations in the Omnibus Bill in terms of the independence of the Office of the Auditor General…..
We have also presented a Cabinet request to have the Audit Act amended to strengthen the independence of the office. The Cabinet approved, we are now finalising the drafting instructions to the office of the parliamentary council. We have taken a few steps in that direction, and we are continuing because we really feel that we need to do more. We feel that government needs to do more to make this office more autonomous.
We were greatly disappointed when we had been asked by the ministry of finance to prepare a strategic operational plan to draw our budget against that plan. We made such a heroic attempt to put the plan in place and budget according to that plan.
But when our budget was released, we just got the same allocation we have been receiving for the last three years. That was despite all explanations, and despite the plan that had been made, to say where do we need to make improvements, to make this office a little more independent?
So, we still have a long way to go. Financial autonomy of this office is critical. We have been saying over time that our reach in terms of the audit universe, if we must audit 100 percent, then we must have enough resources. Now, we are only at about 15 to 17 percent of the coverage that we are supposed to audit.
If we still do not get the support of the Ministry of Finance and Development Planning to say, the Auditor General’s Office must be given the funds that will allow them to extend their reach to all ministries, statutory bodies, agencies as well as projects, then it won’t be an ideal situation.
Yes, our independence is still a problem but, I am just hoping that sooner rather than later, the powers that be, will realise that without giving this office the independence that it needs, the government will not succeed.
It is through the reports from the Office of the Auditor General that they can see where things are not going right. They need to grant us that independence so that we can assist government.
If they gave the Auditor General 100 percent of the money they are allocating (for our office), I am sure they will realise far more savings. They will realise much more service delivery than is currently being done, because we will be able to go out and say the funds allocated to undertake a certain project have not been utilised and explain why?
LT: We all have a vision and things that we would love to have achieved at a certain point in our lives. You are in this office; this is a very significant office to the country and its economy. What would you like to achieve before your term as Auditor-General ends?
Makenete: The one thing that I want to achieve is the professionalisation of the office. We have staff who have been working here for the longest time. However, we feel that we can have staff who are professionally recognised.
A lot of our staff have diploma, certificates, bachelor’s degrees etc, but they are not professionally recognised by the Lesotho Institute of Accountants (LIA).
Yes, we are working under our code of conduct and ethics and have signed oaths of secrecy. But if in the scope of our work something goes wrong, we are not in a position to have the Lesotho Institute of Accountants take action, to say certain auditors did not exercise professional conduct, or did not do their work as expected, as a result they are liable to face some consequences.
Before I leave, I want to have enrolled about 80 percent of our staff as professional accountants and auditors, to be professionally registered. For that to happen they must upgrade their skills.
We are trying to build our skills…We have identified a number of agencies that can help us in the professionalisation initiative, so that we can enrol the staff there, so that we can come to be registered under the Lesotho Institute of Accountants.
That is the major objective for me, that by the end of two to three years of my remaining term, we should have obtained professionalisation of our staff so that even when they go out to the audits, they go with some semblance of authority.
When they are still feeling insecure because they don’t have professional qualifications, it doesn’t give them the necessary clout that they should have.
If they are in a system where they are professionally recognised, I think it will enable them to do their work with much more confidence.
