08 Jul 2018

Government will with immediate transfer all monies under special funds into the Government Remittances Account held at the Bank of Botswana, says Minister of Finance and Economic Development Mr Kenneth Matambo.

Presenting a statement in Parliament Friday, Minister Matambo said the move would ensure that government closely monitored the use of such funds thereby ensuring compliance with both the Public Finance Management Act and the Fund Order.

As the overall custodian of the country's public finances, Mr Matambo said his ministry was concerned about the management of several of the special funds citing non-compliance to the act in the administration of the funds with breaches including the use of funds for unintended purpose as one of the key concerns.

The National Petroleum Fund case, he said, had emphasised the need for urgent review of the special funds and improvement in their management adding that as a result of the case, government had adopted additional measures to ensure the funds continued to serve the purposes for which they were established.

Minister Matambo revealed that cabinet had approved specific measures to strengthen financial management of special funds including increased capacity of the Accountant General to monitor their management by those designated as administrators.

“A unit has been established under the office of the Accountant General to ensure that there is compliance with the Public Finance  Management Act and also embark on the review of existing Fund Orders in consultation with the relevant administrators with a view to aligning the old Fund Orders established under the previous Finance and Audit Act,” he said.

He said the ministry would, in consultation with the various fund administrators, undertake a wholesome review of Special Fund Orders in line with Public Finance Management Act provisions as well as ensure consistency with domestic anti-money laundering and counter financing of terrorism laws and standards.

The minister said where there was non-compliance with the statute establishing the special fund or where there was proof of gross mismanagement, the ministry would exercise its powers and re-designate another public officer to take over the administration of the fund.

In addition, Minister Matambo said government had with immediate effect ceased to pay interest on special funds money managed as part of government cash balances save for those administered on behalf of third parties such as the Guardian Fund.

“Money in some of these funds belongs to government and therefore it is not prudent for government to pay itself interest,” he said.

He explained that the establishment of special funds by government was guided by Section 117 of the Constitution of Botswana and Section 37(1) of the Public Finance Management Act of 2011.

Quoting the act, Mr Matambo defined a special fund as “any fund of public revenues established by any written law for some specific purpose or any trust fund held by government and any fund created by the minister in exercise of powers conferred upon him by Section 38”. BOPA