Budget’s twin shrouds of shame

FINANCE and Treasury Minister Peter O’Neill has a hands-on approach to whatever he does.
The 2010 supplementary budget and 2011 budget, which he handed down yesterday, indicated that he has burnt the midnight candle in the short time he occupied the post.
As a politician who likes to lead from the front, he will, we are certain, pay special attention when we say two items hang like twin shrouds of shame over the national budget.
Not just this budget, but the previous four as well. They are the district services improvement programme (DSIP) and the provincial services improvement programme (PSIP).
Of course, this is a subjective comment. The view is different depending on where one sits.
To the politician, they are the best things that have happened since the attainment of independence.
To those interested in transparency and accountability, this is the one area where the budget leaks like a bad roof.
Upwards of K1.7 billion has been spent in these areas since the 2007 national elections. Where it all ends up is anybody’s guess in the absence of any audited reports.
Sure, there are guidelines for spending funds and there is a procedure set up under the Organic Law on provincial and local level governments through the joint district planning and budget priorities committee (JDP&BPC) but, in the absence of effective checks and balances, it is open to abuse.
DSIP funds are supposed to be paid by the Office of Rural Development (ORD) into district trust accounts.
Once this money is in the account, project submissions can be made to the JDP&BPC. The Open MP is chairman of this committee which sits to approve projects in the district.
Funds for approved projects are then paid by the district treasurer directly to the service provider rather than to the entity or group applying for the money. The district manager is a public servant who reports to the provincial administrator but, under the present arrangement, he operates more as the private staff member of the MP.
The district treasurer is also a public servant, but he or she reports not to the provincial administrator but to the Finance secretary. Operationally, however, the district treasurer also operates as if he is the personal staff member for the MP.
There is further confusion in the clock works. The DSIP money is held in ORD which sits as a semi-autonomous agency attached to the Department of National Planning, Monitoring and Implementation.
ORD has no capacity to independently monitor and report on all projects in 20 provinces (22 with Hela and Jiwaka), much less the 89 districts.
This is the muddled-up system into which millions of kina is being poured and it is certain that a lot of it ends up where it has no right to be.
It is absolutely certain that no parliament is likely to remove these funds since no MP would want to vote out a system where he is given some K2 million annually.
At last count, and that is excluding the K2 million per member allocations in the 2011 budget, each open MP was given  K17 million and governors were each allocated K1 million up to the 2010 budget.
No report has been presented in parliament from a single electorate since 2007.
There needs to be drastic improvements to the control and accounting procedures for the DSIP funds and its provincial counterpart.
There should also be a restructuring so that ORD is moved to, or merged into, the Department of Finance.
The monitoring and reporting system should be expanded so that Finance officers are available to visit and provide independent verification of projects.
The present arrangement is unacceptable.
Reports before parliament show a litany of failures and incompetence in the Department of National Planning and Monitoring and ORD that would be serious in a minor arm of government and which is utterly unacceptable in two major line agencies.
The report states that both the Department of National Planning and Monitoring and ORD have “deteriorated to a point where their performance in managing public monies is, at best, marginal” and “have profound problems in management, accountability, transparency, competence and ability to perform their functions”.
This is an indictment and to, year after year, allocate money into such departments without first attending to the problems highlighted is the height of irresponsible government.