MORE than K200 million has gone missing from trust accounts over the years, Opposition spokesman and former treasury and finance minister Bart Philemon said yesterday.
Speaking during the Opposition’s reply to the 2008 Budget, Mr Philemon also claimed that K3.4 billion was held in trust accounts, while a further K1.3 billion spread in trust accounts in four banks as of Oct 31, 2007.
He said this was according to Treasury Management Systems Report obtained from the Department of Treasury.
He said the Treasury Management System Report as of Oct 31, 2007, showed that funds in trust accounts had increased from K1.6 billion in 2006 to K2.5 billion this year.
That does not include the recently allocated K4 million per district in the Supplementary Budget and the proposed K6 million per district in the 2008 budget. He said adding that K10 million per district (89 districts) to the K2,481,700 (K2.4 billion) brings to total K3,371,700 (K3.4 billion)
Mr Philemon said there was another K1.3 billion spread in trust accounts in four banks as at Oct 31, with K515 million in the Central Bank, K400.9 million in BSP, K197.1 in ANZ and K186.6 million in Westpac.n From Page 1
“What is the work plan of the Government on the implementation of the projects from these funds? We are talking about K3.37 billion plus K1.3 billion, that’s K4.67 billion sitting in various trust accounts doing nothing.
“I am stunned as someone who worked very hard to reduce the number of trust accounts. During my term as treasurer and finance minister, over 2,000 trust accounts were abolished and the funds were reined into consolidated revenue.”
Mr Philemon said the danger of keeping money in trust accounts was that there would be gross abuse on withdrawing for purposes other than those the trust accounts were created for; flaunting of the financial delegation of various bureaucratic heads and cabinet ministers (in other words, one minister can direct bureaucrats to exceed their financial delegation); and that there would be little regard for record keeping and monitoring of these trust accounts.
He said he found there was a lot of abuse when he became minister in 2002.
Mr Philemon said based on NEC decision No 231/2003, an accounting adjustment of K201.6 million was executed.
“That means we don’t know what happened to over K200 million that was spread out in trust accounts over the years. What has this government done in the past five years to ensure there is better monitoring and accounting of future trust funds?
“We are on-track to repeat them – with ministers sitting as kingpins on the procedure of access to these funds.”
Mr Philemon quoted Financial Instruction 4/2007, section 5.5 in respect of the K10 million district allocations.
“A key requirement in the trust instrument of each of the supplementary budget trusts is an agreement between ministers on the procedures to be followed on the use of trust funds.
“While these agreements may vary (eg, specific restrictions unique to the particular trust) the common requirements for all the trusts are set out in the remainder of this financial instruction.”
He said in other words, Members were at the mercy of the ministers on the release of their district funds. Ministers set the procedures, not bureaucrats.
“And ministers may not necessarily have the know-how on the procedures. But that’s not the full story.”
He said the financial instruction themselves would result in ministers clashing with Section 47 of the Public Finance (Management) Act if their procedures did not comply legally.
He said the bottom line was that major clashes would be the order of the day between ministers, bureaucrats and the Public Finance (Management) Act and Financial Instructions.
He pointed out that Financial Instructions were a subordinate piece of legislation to the Public Finance Management Act.