Swaziland / Eswatini lost E30 million from the economy
because of fraud during the past year, the kingdom’s national police Deputy
Commissioner Mumcy Dlamini said.
She told an event for International
Fraud Awareness week on Monday (12 November 2018) this was mainly connected to ‘banking
sector business’.
She said fraudulent activities involve electronic fund
transfers and false banking instructions.
However, she did not reveal the extent of fraud within
the public sector which far outstrips that in private business. Earlier this
year the Swaziland Auditor General exposed widespread financial irregularities
across many government ministries.
Acting Auditor General Muziwandile Dlamini said in an annual
report that financial accounts were incomplete, billions of emalangeni were
unaccounted for and laid-down rules, guidelines and procedures were ignored. The
offices of the Prime Minister, National Commissioner of Police, Defence
Department and Correctional Services were among a string of government departments
and agencies that
broke the law by spending tens of millions of emalangeni on vehicles and
transport running costs without authority
Muziwandile Dlamini said, ‘Bank balances were misstated by E7,528,772,278.72 due to
non-reconciliation between the government cash books and bank statements. Some
bank balances were overstated by E2,285,935,191.93 and other bank account
balances were understated by E5,242,837,086.79 thus reflecting an incorrect
cash flow position of the Government of Swaziland at year end.’
The report detailed inconsistencies throughout government, including:
Disability payments went to people who did not qualify and those who were
entitled were not getting them because the DPM’s Office had not developed
guidelines on how to distribute grants. During the three years 2014 to 2016
disability grants amounting to E12.4 million were disbursed in the absence of
guidelines which should have been created in line with the National Disability
Policy of 2013. Eligibility assessment and screening of disabled citizens was
conducted by social workers. The Auditor General’s report identified non-deserving people from across Swaziland
who received a total of at least E228,720 without proper approval.
MINISTRY
OF EDUCATION AND TRAINING
More than E3 million was unaccounted for by the Ministry of Education
and Training. The report stated that the money was part of E23 million
allocated to the ministry for rehabilitation of schools that were damaged by
storms. Only E20 million was used for the project, an under-expenditure of 13
percent. Under expenditures, according to the report, were as serious as
over-expenditures because if funds were not used, development would be retarded
and economic growth negatively affected.
The Ministry also underspent on a project to supply water to schools. E2
million was approved and released but expenditure only amounted to E247,000, an
under-expenditure of 88 percent.
MINISTRY
OF HOME AFFAIRS
Government had lost E1.04 million paying salaries for four
immigration officers who had been suspended from work, three of them on full
pay since June 2014. No information was forthcoming about their cases and
whether criminal proceedings had taken place against them. In another case the
salary of an officer had been paid for three months after his death.
MINISTRY
OF NATURAL RESOURCES AND ENERGY
A conveyancer defrauded the ministry of E3.29 million by submitting
false information relating to the transfer of legal titles on two properties in
2014. The two properties were valued at E34 million and E21 million but the
Registrar of Deeds was told they were valued at E2 million and E1 million. The conveyancer who was not named in the report should have paid
transfer duty of E3.29 million but only E20,000 has been recovered. The Auditor
General could not find transfer duty certificates when auditing the revenue collections
by the Deeds Registry.
STRATEGIC OIL RESERVE FUND: An amount of E35.82 million was transferred
from the Strategic Oil Reserve Fund without following proper
procedures. The money was transferred on 25 August 2016 and based on a 3
percent interest rate it had earned an interest amounting to E1,077,571 by six
months later. The Auditor General was not given any evidence supporting or
explaining the transfer of the funds even though the public accounts committee
(PAC) had ordered that the Ministry of Natural Resources and Energy should
provide documentation that the withdrawal and transfer was done with the
permission of the Ministry of Finance. The Auditor General concluded the money
was taken illegally.
MINISTRY
FOR TINKHUNDLA ADMINISTRATION AND DEVELOPMENT
Water project material amounting to E432,033 had gone missing at
Mangcongco Inkhundla. The auditors discovered that water project materials
amounting to E221,033 had remained unused for seven years. The material was
kept at an Umbutfo Swaziland Defence Force (USDF) camp situated in Mangcongco.
This, according to the auditors, indicated that bills of quantities were not
used at every stage of the water project to give appropriate quantities and to
correctly define the extent of work based on drawings and specifications of the
project. The bills of quantities, according to the report, should have been
prepared by an expert such as a water engineer.
According to delivery notes, the material was acknowledged to have been
delivered. Therefore, the material could have been stolen after delivery. The
report expressed a concern on the weak controls which existed within the
ministry, whereby funds were released without ensuring that technical experts
were involved when the material was quantified and released. The ministry also
displayed a care-free attitude by not designing a follow-up mechanism of the
project to ensure that the project was executed and completed properly. The
ministry was negligent in taking care of scarce public funds.
EMPOWERMENT FUND: An amount of E3.67 million for the Empowerment Fund
was used by the Ministry for Tinkhundla Administration and Development without
rules and regulations or any documented control. The report concluded there was
a risk that the fund could be used for purposes not intended.
Swaziland’s lack of financial prudence has been noted internationally.
Each year the United States reviews governments that receive its assistance
help ensure US taxpayer money is used appropriately and to provide
opportunities to dialogue with governments on the importance of fiscal
transparency.
The Fiscal Transparency
Report on Swaziland for 2017 stated, ‘During the review period,
budget documents were available to the general public, including online. While
budget documents provided a general picture of government revenues and
expenditures, revenues from natural resources and land leases were not included
in the budget.
‘Expenditures to support the royal family were included in the budget
but lacked specific detail and were not subject to the same oversight as the
rest of the budget. Information in the budget was considered generally
reliable, and the supreme audit institution’s reports of the government’s
annual financial statements were published within a reasonable period of time,
but some budget items were not subject to audit.
‘The criteria and procedures for awarding natural resource extraction
licenses and contracts were outlined in law, but the opacity of the procedures,
which involve submitting applications for licenses directly to the king, cast
doubt on whether the government actually followed the law in practice. Basic
information on natural resource extraction awards was not always publicly
available.
‘Swaziland’s fiscal transparency would be improved by: providing more
detail on expenditures and revenues in the budget, particularly for off-budget
accounts, natural resource revenues, and royal family expenditures; subjecting
the entire budget to audit and oversight; demonstrating applicable laws are
followed in practice for awarding natural resource extraction contracts and
licenses; and making basic information on natural resource extraction awards
publicly available.’
See also
Fraud
at Deputy Prime Minister’s Office
Govt
ministries broke law on spending
Swaziland
‘riddled with corruption’
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