Following the cabinet’s resolve to strengthen the financial management of Special Funds in the wake of the National Petroleum Fund debacle, the Ministry of Finance will transfer the money into a Government Remittance Account with immediate effect.
Addressing the national assembly last Friday, Minister of Finance and Economic Development, Kenneth Matambo revealed the funds would now be managed as part of the government cash balances held at the Bank of Botswana.
He explained that the use of the funds would be closely monitored to ensure compliance with both the Public Finance Management Act and the Fund Orders.
“The case of the National Petroleum Fund has emphasised the need for an urgent review of government Special Funds and improvement in their management,” stressed Matambo.
“With immediate effect, Government has ceased to pay interest on Special Funds moneys managed as part of the Government cash balances, save for those managed on behalf of third parties, such as the Guardian Fund. Money in some of these funds belongs to the Government and therefore it is not prudent for Government to pay itself interest,” he continued, adding the way some of the funds were currently administered did not comply with the Public Finance Management Act.
He cited administrators using funds for unintended purposes as well as delays in submission, and in some cases non-submission, of audited accounts as areas of real concern.
Matambo further pointed out that some fund orders were unclear and thus left open to an administrator’s interpretation.
“This has resulted in some designated fund administrators using their discretion in utilising monies held under such Funds. A unit has been established under the office of the Accountant General to ensure that there is compliance with the Public Finance Management Act. Special Fund Orders will be reviewed which may lead to dissolution of some of the Funds, where considered appropriate,” he warned.