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Republic of Zambia Report of the Public Accounts

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Republic of Zambia Report of the Public Accounts REPUBLIC OF ZAMBIA REPORT OF THE PUBLIC ACCOUNTS COMMITTEE ON THE REPORT OF THE AUDITOR GENERAL ON THE ACCOUNTS OF THE REPUBLIC FOR THE FINANCIAL YEAR ENDED 31ST DECEMBER, 2015 FOR THE FIRST SESSION OF THE TWELFTH NATIONAL ASSEMBLY Appointed by the Resolution of the House on 10th October, 2016 Printed by the National Assembly of Zambia REPORT OF THE PUBLIC ACCOUNTS COMMITTEE ON THE REPORT OF THE AUDITOR GENERAL ON THE ACCOUNTS OF THE REPUBLIC FOR THE FINANCIAL YEAR ENDED 31ST DECEMBER, 2015 FOR THE FIRST SESSION OF THE TWELFTH NATIONAL ASSEMBLY Appointed by the Resolution of the House on 10th October, 2016 REPORT OF THE PUBLIC ACCOUNTS COMMITTEE ON THE REPORT OF THE AUDITOR GENERAL ON THE ACCOUNTS OF THE REPUBLIC FOR THE FINANCIAL YEAR ENDED 31ST DECEMBER, 2015 FOR THE FIRST SESSION OF THE TWELFTH NATIONAL ASSEMBLY, APPOINTED BY RESOLUTION OF THE HOUSE ON 10TH OCTOBER, 2016 Consisting of: Mr H Kunda, MP (Chairperson); Mr A Chiteme, MP; Mr M Mbulakulima, MP; Mr C Mweetwa, MP; Mr T J Kasonso, MP; Mr M C Munkonge, MP; Mrs D Mwape, MP; Mr K Simbao, MP; Ms B M Tambatamba, MP The Honourable Mr Speaker National Assembly Parliament Buildings LUSAKA Sir, Your Committee has the honour to present its Report on the Report of the Auditor General on the Accounts of the Republic for the Financial Year ended 31st December, 2015. 1 Functions of Your Committee 2. The functions of your Committee are to examine the accounts showing the appropriation of sums granted by the National Assembly to meet the public expenditure, the Report of the Auditor General on these accounts and such other accounts, and to exercise the powers as provided for under Article 203(5) and (6) of the Constitution of the Republic of Zambia, Act No. 2 of 2016 as well as Standing Order No. 153(3), Standing Orders of the National Assembly, 2016. Meetings of Your Committee 3. Your Committee held thirty two meetings to consider the Report of the Auditor General on the Accounts of the Republic for the Financial Year ended 31st December, 2015. Procedure adopted by Your Committee 4. With technical guidance from the Auditor General, the Accountant General and the Controller of Internal Audits, your Committee considered both oral and written submissions from Controlling Officers of ministries and institutions that were cited in the Report of the Auditor General on the Accounts of the Republic for the Financial Year ended 31st December, 2015. The Secretary to the Treasury was also requested to comment on the status of financial management in all the ministries and institutions cited in the Report. This Report contains the observations and recommendations of your Committee and includes, proposed remedial measures to correct identified irregularities and 2 weaknesses. The Report is in five parts. Part I of the Report deals with the Auditor General’s comments and the response from the Secretary to the Treasury; Part II captures the responses from Controlling Officers on the individual audit queries; Part III contains the Committees Foreign tour to Uganda; Part IV highlights your Committee’s general observations and recommendations arising from the Auditor General’s Report and Part V deals with the comments by the Secretary to the Treasury on the recommendations of the Public Accounts Committee which have been implemented or partially implemented. PART 1 AUDITOR GENERAL’S COMMENTS AND RESPONSE BY THE SECRETARY TO THE TREASURY AUDIT QUERY PARAGRAPH 1-6 Paragraphs 1-5 1. Audit Comment Audit Comment In January 2016, the Constitution of Zambia (Amendment) Act No. 2 of 2016 was enacted. The new Constitution include Articles 211 (1) which requires the Minister responsible for Finance to, within three (3) months after the end of each financial year, prepare and submit to the Auditor General, the Financial Report of the Republic in respect of the preceding year. The Auditor General is also required to 3 submit an Audit Report on the said Financial Report to the President and the National Assembly not later than nine (9) months after the end of each financial year in respect of the preceding financial year. This Report was submitted to His Excellency, the President and the National Assembly for tabling in the National Assembly in accordance with the Provisions of Article 212 of the Constitution of Zambia. Each Appropriation Account as reflected in the Financial Report for the Year ended 31st December 2015, was certified in accordance with the provisions of the Public Finance Act No. 15 of 2004. This Report only contains issues that remained unresolved during the audit process as at 30th September 2016. Treasury Response The Secretary to the Treasury submitted that the facts were correctly stated by the Auditor General in the report on the Accounts of the Republic for the Financial Year Ended 31st December2015. The Report was tabled before the National Assembly in accordance with the provisions of Article 212 (I) of the Constitution of the Republic of Zambia after certification of each appropriated Account as reflected in the Financial Report for the year ended 31st December, 2015 which was tabled before Parliament by the Minister of Finance in accordance with the provision of the Constitution of the Republic of Zambia. However, the Secretary to the Treasury regretted that some matters remained unresolved as at 31stAugust, 2015 and this caused their being included in the report. 4 Committee Observation and Recommendations Your Committee notes the response but urges the Secretary to the Treasury to ensure that a detailed programme on handling outstanding issues be developed and implemented in light of the fact that outstanding issues are statute barred after seven years. 2. Statement of Responsibility Audit Comment According to the Public Finance Act No.15 of 2004, the Minister responsible for Finance shall, subject to the provision of the Constitution and the Act, have management, supervision, control and direction of all matters relating to the financial, planning and economic management of the Republic. The Minister is the head of the Treasury established under the Act and is responsible for policy and other decisions of the Treasury except those designated under Section Six (6) of the Act to the Secretary to the Treasury. In exercising these powers, the Secretary to the Treasury designates a Controlling Officer to be in charge of each head of expenditure and revenue programmes provided for in the financial year. The responsibilities of the Controlling Officers are outlined in Section 7 (3) to (9) of the Act and include the preparation and submission of financial statements for audit and certification before inclusion in the Financial Report. The audited financial statements are then submitted to the Secretary to the Treasury for the preparation of the Annual Financial Report for tabling in the National Assembly by the Minister responsible for finance in 5 accordance with the provision of Article 211(1) of the Constitution of the Republic of Zambia. Treasury Response The Secretary to the Treasury reported that the Treasury, did ensure that each Controlling Officer performed his/her duties as outlined in Section 7(3 to 9) of the Public Finance Act No. 15 of 2004 by preparing and submitting Certified Financial Statements for audit and inclusion in the Financial Report. Committee Observation and Recommendations Your Committee urges the Secretary to the Treasury to ensure that Controlling Officers prepare and submit the Financial Reports for their respective MPSA’s so that the Financial Reports for the Republic are tabled before the National Assembly of Zambia by June of every year, in line with Article 211(1) of the Constitution of the Republic of Zambia. 3. Audit Scope Audit Comment The audit scope included Government Ministries and Provinces as contained in the Financial Report of the Republic. The audit covered Revenue and Expenditure on the accounts for the Financial Year ended 31st December 2015 as well as physical inspections of projects. 6 The reports on the audit of Constituency Development Funds and the Grants to Local Authorities would be included in the audit report on Local Authorities. Treasury Response The Secretary to the Treasury reported that the facts were as stated by the Auditor General. Committee’s Observation and Recommendations Your Committee notes the response by the Secretary to the Treasury on the matter. 4. Audit Methodology Audit Comment The Report is as a result of programmes of test checks, inspections and examination of accounting, stores, projects and other records maintained by the Public Officers entrusted with handling Public Resources. The audit programmes were designed to give reasonable assurance of financial management in the Government and to enable the expression of an appropriate audit opinion on the financial statements for the year. They were also intended to provide information that would assist the National Assembly in its oversight responsibility over the application of public resources and execution of programmes by the Executive. During the course of preparing the Report, each Controlling Officer was sent appropriate Draft Annual Report Paragraph (DARP) for comments and 7 confirmation of the correctness of the facts presented. Where the comments varied with the facts presented, and were proved to be valid, the affected DARPs were amended accordingly. In order to ensure that the limited audit resources are directed towards the most risky areas of Government operations, a risk based approach in prioritizing the clients was used. Treasury Response The Secretary to the Treasury commended the methodology used by the Auditor General and also stated that the Office’s interaction with various Controlling Officers was encouraging as it provided checks and balances in the management of public resources. The Secretary to the Treasury further applauded the Office of the Auditor General for availing vital information which assisted Parliament in its oversight responsibility over the management of public resources by the Executive.
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