Call for transparency and accountability in Public Finance Management grows louder
On Wednesday 3 April 2019, the Zimbabwe Coalition on Debt and Development (ZIMCODD) convened a Public Finance Management Reform (PFM) Indaba in Mutare aimed at advancing the legislative and institutional reforms for public finance management in Zimbabwe through increased interaction amongst members of parliament, councillors, mayors, government representatives, opinion leaders and civil society. The stakeholders specifically interrogated the current Public Finance Management Act [Chapter 22:19] of 2009 in relation to Chapter 17 of the Constitution of Zimbabwe Amendment No. 20 of 2013 which outlines PFM guidelines. The PFM Reform Indaba which was an icebreaker for a chain of indabas to be conducted in different regions of the country comes after the realisation that public finance management in Zimbabwe is characterised by public resource leakages, lack of transparency and accountability and corruption.
The participants, who bemoaned the mismanagement of public finance and the high rate of corruption in the country, recommended the alignment of the Public Finance Management Act to the Constitution starting with incorporating the principles of public finance management outlined in the Constitution and cross-referencing the PFM Act with the Public Procurement and Disposal of Public Assets Act [Chapter 22:23] of 2017 and the Public Debt Management Act [Chapter 22:21] of 2015 and other relevant statutes.
Key highlights from the Indaba
•The PFM Act must be amended to give citizens enough time to contribute meaningfully to local and national budget formulation processes;
•The PFM Act should incorporate comprehensive PFM principles including prudence, equity, economic use of resources, effectiveness, and being pro- marginalised groups as enshrined in the Constitution of Zimbabwe;
•Section 7 of the PFM Act should be amended to allow the Minister to manage national revenue in consultation with Parliament;
•Section 2 of the PFM Act should be amended to allow for parliamentary approval before writing off loans extended to finance fund accounts;
•Section 14 of the PFM Act should be amended to stop the accounting officer from complying with the Minister's payment directives on costs that are not allowable;
•Section 18 of the PFM Act should be amended to reduce the Minister's powers on the establishment of statutory funds;
•Section 15 of the PFM Act should be amended to compel the Minister to explain, before the relevant Portfolio Committee, his failure to provide annual reports and financial statements on the stipulated due dates;
•The PFM Act should be clear in ensuring that financial reports adhere to the International Public Sector Accounting Standards;
•The PFM Act must provide for punitive and deterrent measures against abuse of public funds;
•The PFM Act must empower institutions responsible for overseeing public funds management, like the Office of the Auditor General, to have authority to take legal action against those who do not pay heed to their recommendations;
•The PFM Act should incorporate provisions relating to the allocation of not less than five (5) percent of national revenue to provincial and local tiers of government. The obligations of local authorities to submit annual budgets and financial performance reports to the government, Auditor General and the Parliament of Zimbabwe should be clearly articulated in the PFM Act.
•The PFM Act should clearly spell out how access to information by citizens will be strengthened under devolution to ensure that citizens sufficiently carry out their social accountability and oversight role;
•The PFM Act should be deterrent enough to stop the government from borrowing for consumptive instead of productive purposes.
Public finance management remains important in determining efficiency and effectiveness in the mobilisation and utilisation of public resources in Zimbabwe. Having law is one thing and the implementation of those provisions is another. Therefore, the PFM Act should incorporate provisions of Section 308(4) of the Constitution that require an Act of Parliament to provide for the speedy detection of breaches in relation to safeguarding public funds and property. It also requires the same Act to provide for discipline and punishment of persons responsible for any such breaches and, where appropriate, the recovery of misappropriated funds or property.