Strong public financial management curbs corruption

18 Oct, 2020 - 00:10 0 Views
Strong public financial management curbs corruption

The Sunday Mail

Corruption Watch

Comm John Makamure

ONE of the most important constitutional functions of the Zimbabwe Anti-Corruption Commission as stated in Section 255 is “to promote honesty, financial discipline and transparency in the public and private sectors”.

Related to this function is another one “to make recommendations to Government and other persons on measures to enhance integrity and accountability and prevent improper conduct in the public and private sectors”.

The promotion of good governance principles of transparency and accountability are, therefore, central to the work of the commission.

ZACC is motivated by the concept of good governance because it is vital to sustainable development and the well-being of any society. Good governance assures that corruption is minimised.

The Constitution identifies good governance as one of the national objectives. The State is required to “adopt and implement policies and legislation to develop efficiency, competence, accountability, transparency, personal integrity and financial probity in all institutions and agencies of Government at every level and in every public institution”.

In particular, the State is required to ensure that appointment to public office is done primarily on the basis of merit and that measures are taken to expose, combat, and eradicate all forms of corruption and abuse of power by those holding political and public offices.

In order to give life to these constitutional provisions, ZACC has reconstituted and strengthened its research, and systems and compliance units to undertake detailed research and review systems and compliance issues in various institutions in order to proffer recommendations underpinned by empirical research findings.

One important area that the commission has been focusing on in its research work is public financial management, which is publicly known to be prone to high levels of corruption.

There is a large body of evidence showing that corruption negatively affects both the volume and the quality of public service delivery.

The effect occurs both directly through distortions in resource allocation and indirectly through reductions in revenue. Furthermore, in its effects on public service provision, corruption has a disproportionate impact on the lives of women and the poor.

A substantial body of evidence demonstrates that there is a large and statistically significant negative correlation between corruption and levels of confidence in public institutions.

When officials and others engage in public finance management related corruption, it severely affects several regulatory environments. Corrupt actions may breach the Constitution and its power-balance clauses.

Graft actions also affect national tax law, budget law and procedures, and civil service laws and regulations.

Public sector related corrupt activities go against principles of transparency, meritocracy, and public sector ethics.

The emphasis on public finance management reforms in mitigating corruption is not surprising given the assumption that systemic weaknesses in a public finance management system leads to weak capacity, inadequate internal controls, limited transparency, weak management and supervision, and weak external accountability in public spending, and creates a permissive environment for corruption.

Public finance management programmes, therefore, are often viewed as contributing to solving the corruption problem.

Zimbabwe boasts a number of pieces of legislation that provide for the management of public funds and offer guidance on measures to detect misappropriation of such funds and resources by both State and non-State actors.

The Constitution provides adequate guidance on the manner in which public finances should be managed and accounted for with Chapter 9 specifically addressing issues to do with the principles of public administration and leadership.

Section 196 observes that “public officers must conduct themselves, in public and private life, so as to avoid any conflict between their personal interests and their public or official duties, and to abstain from any conduct that demeans their office”.

Section 298 outlines the principles of public financial management.

These include transparency and accountability in financial matters; public finance system directed towards national development; equitable use of public resources; responsibility and clarity in financial management and fiscal reporting; prudential, economic and effective use of public resources; and transparency in public borrowing and all transactions involving the national debt.

Section 299 of the Constitution of Zimbabwe obliges Parliament to monitor and oversee expenditure by all state institutions in order to ensure that all revenue is accounted for, all expenditure has been properly incurred and any limits and conditions on appropriations have been observed.

This means the commission must work closely with the Parliament of Zimbabwe in curbing corruption in the management of public resources.

And we have not been found wanting in that regard.

A couple of weeks ago ZACC signed a Memorandum of Understanding with the legislative branch aimed at strengthening our collaboration.

The African Parliamentarians Network Against Corruption Zimbabwe Chapter is the main vehicle in Parliament that we are working with to fight corruption.

The various parliamentary portfolio and thematic committees are critical as well.

The Public Finance Management Act (Chapter 22:19) provides for the control and management of public resources.

Sections 85 to 91 of the PFMA are about financial misconduct and offences and penalties for the abuse and misappropriation of public resources.

In a recent study undertaken by ZACC on how to curb loopholes for corruption in public financial management, it was found out that the sanctions and penalties were not being enforced.

In addition to enforcement, the commission strongly recommends the upward review of the penalties in order to make them punitive enough.

The study also recommends building the capacity of stakeholders in oversight institutions so that they are well-versed with legal frameworks governing expenditure management in order to pose the right questions to ministries, departments and agencies on management of public funds.

The institutional requirements for effective oversight will also be enhanced by ensuring that oversight institutions have a clear, non-contradictory legal mandate to operate effectively, as well as sufficient funding to secure the human capital they require to operate optimally.

The World Bank rightly puts it when it says “independence is never absolute, but institutions need to be independent within the overall strategic framework for the country and adequately resourced to achieve their specific mandate.

Effective management requires that the mandate of an institution should be clearly defined and supported. A lack of clarity eventually causes conflict within government and a waste of resources”.

The study underscores the importance of promoting the use of information, communication technology (ICT) in the public finance management system given that technology offers wonderful potential for increasing government accountability, transparency and citizen participation.

ICT facilitates improvement in the efficiency and effectiveness of public-sector operations; widening access to public services; and disseminating information to the public and getting feedback from relevant stakeholders and service users.

With specific reference to public financial management, among other things, ICT can help solve the centralisation/decentralisation dilemma by making relevant revenue and expenditure data easily available at all Government levels; improves the reliability of revenue forecasts; vastly facilitates budget analysis and programming; and improves the timeliness of budget information.

All these are essential attributes in curbing corruption in public finance management.

Adoption of public expenditure tracking tools which are a set of diagnostic mechanisms providing statistics that reveal problems and highlight their scale is also strongly recommended by the ZACC study.

These tools have proved vital in curbing corruption in many countries.

The public expenditure tracking approach tracks the flow of public money from central ministries to frontline agencies such as schools and health facilities, comparing reported with actual expenditure.

The Public Expenditure Tracking Survey (PETS) is one of the most advanced of such tools. According to several studies, PETS have been successful in identifying leakages in service delivery administration in a range of sub-Saharan African countries.

The act of monitoring public finances has preventive effects on corruption, particularly if done repeatedly, according to studies.

Even so, countering corruption generally requires the introduction of additional sanctions. Accordingly, tracking surveys are most effective when carried out in conjunction with other reforms.

The use of PETS in the education sector in Uganda (1996-2000), which combined use of the survey tool with a newspaper campaign to reduce resource leakage, illustrates this point.

Before reforms were introduced following the first PETS in 1996, only 24 percent of non-wage funding allocated from the central level actually reached schools, according to a study.

After reforms, schools received an average of 82 percent of their annual entitlements.

Two-thirds of the reduction in resource leakage could be explained by the information campaign.

Commissioner Makamure is ZACC spokesperson and chairs the committee on prevention and corporate governance. ZACC Toll Free Lines: 08010101/08004367; Landline: + 263 242 369602/5/8. WhatsApp: +263 719529483; Whistle-blower reporting app: zacc.online/tipoffs; Email: [email protected], [email protected]

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