Crude oil pumping resumed at the Unity oil fields in January 2019 ( FILE PHOTO | REUTERS)
South Sudan’s National Audit Chamber wants the Ministry of Finance and Planning to account for the use of $114.4 million received from the International Monetary Fund (IMF) for budget and balance of payments support in 2023.
The funding was part of the emergency funding through the IMF’s Rapid Credit Facility-Food Shock Window (RCF-FSW) received in January 2023 to bolster Juba’s dwindling foreign exchange reserves and address the deepening humanitarian crisis occasioned by flooding, falling oil production and disruption of global supply chains as a result of the Ukraine-Russia war.
The IMF funds constituted just over one percent of South Sudan’s total budget for the 2022/2023 fiscal year, estimated at SSP 1.39 trillion ($10.67 billion).
South Sudan applied for and negotiated emergency financing under the Food Shock Window with the IMF. The Fund’s board approved SDR86.1 million ($114.38 million) on January 19, 2023 and disbursed it four days later.
The funding was both for the balance of payments support and budget support to finance the expected fiscal deficit estimated at SSP54 billion (five percent of GDP) in the 2022/2023 fiscal year.
Of the total facility, 60 percent ($68.62 million) was to be made on-lent by the Bank of South Sudan to the government under the same terms as obtained from the IMF.
Food Shock Window
To mitigate the impact of food prices and climate shock on vulnerable groups, $15 million from the disbursement was to be transferred to the World Food Programme, $5 million to the International Organisation for Migration and the remainder to finance the ministries of General Education and Instruction and Health through conditional transfers in line with the allocations made in the 2022/2023 budget.
Auditor-General Steven Kiliona Wondu, in his Compliance Audit Report dated April 3, 2024, outlines irregular award of tenders to unqualified bidders, single-sourcing in the award of procurement contracts, irregular disbursement of funds, irregular advance payments to contractors, implementation of projects not budgeted for and failure to withhold tax on payments made to contractors.
“Based on the audit procedures performed, the disbursement and utilisation of the emergency funding received by the Government through the Food Shock Window of the Rapid Credit Facility of the IMF was not in compliance, in all material respects, with the Letter of Intent and the identified audit criteria,” Mr Wondu said.
The Auditor-General wants the Finance Ministry to provide full accountability for the funds allocated to budget support, and that all revenues and expenditures of the government be on-budget and according to the approvals by the National Assembly.
He further wants all government payments to be processed through an integrated financial management information system (Ifmis) to improve transparency.
The central bank did not answer our e-mail.
An IMF spokesperson said that they “consider that the allocations made to the key items in the budget (health and education) to be in line with the LOI, as were the allocations to World Food Programme, the International Organisation for Migration, and the resources used by the central bank for reserves.”
“We have also taken note, however, of the reporting of unused balances against the various budget allocations and, in partnership with the authorities, we are seeking to establish the appropriate steps to be taken to ensure that these remaining balances are used in line with the agreement.”
Explanations
The report shows that evidence of the expenditure of $3 million by the South Sudan Revenue Authority was not available for audit even though the statement for the bank account held by the Ministry of Finance and Planning at the Bank of South Sudan reflected a withdrawal of the amount on July 18, 2023.
“The explanation and the supporting documents for the withdrawal were not provided. In addition, the MOFP management in their responses to the Management Letter explained that the funds would be refunded if the utilisation was confirmed to be irregular. However, no evidence of the refund was provided for audit,” says the Auditor-General.
The audit cites a discrepancy of $1 million in the Ministry of Health, where a financial statement reflected payments of $8.99 million to the ministry, compared to the budgeted $10 million.
“There is a variance of $1,001,314, which was not explained, nor was any evidence provided to confirm the existence of the funds,” the report says.
The Auditor-General notes that while South Sudan’s Taxation Act (2009) requires government institutions that make contract payments to contractors to withhold tax at the time of payment, the Ministry of Finance and Planning did not withhold any tax from payments amounting to $8.99 million made to four suppliers of medicines and medical supplies.
Also, health ministry officers procured medicines and medical supplies valued at $9.29 million without following due process, contrary to the Public Finance Management Act (2011), which provides that, where applicable, loan proceeds shall be utilised in accordance with the government procurement applicable law to public procurement.
“In the circumstances, it could not be confirmed that the procurement was in accordance with the identified needs for medicines and medical supplies in the Country and based on the approved budget,” the report says.
The MoH engaged four contractors for the supply of medicines and medical supplies worth $9.29 million through single-sourcing without evidence of the exceptional circumstances justifying single-sourcing and for compliance with the rules for as provided by the PFM law.
In another instance, he cites payments to suppliers of medicines and medical supplies made on July 13, 2023, but supplies were delivered between November 2023 and February 2024, and some were yet to be delivered in March 2024.
According to Section 30(5)(b) of the PFMA Act, 2011, where payment is to be made before the completion of the work, delivery of the goods or rendering of the service, accounting officers should certify that the payment is in accordance with the contract and payment guarantee or the appropriate security has been given in the name of the government to secure due performance of the contracts.
Section 7 of the contract signed between the ministry and the suppliers provides that payments shall be made upon the delivery of the supplies and upon submission of the transport documents/bill of lading, shipment certificate and invoice on the delivered goods.
The report also reveals the absence of the verification and acceptance committee reports, making it difficult to ascertain the correct quantity of the medicines and medical supplies received and that the medicines and supplies met the specifications and standards defined in the contract.
The auditor says the Ministry of General Education and Instruction made advance payments amounting to $2.93 million to 13) contractors, but these were not provided for in the signed contracts.
It also implemented projects such as the construction/renovation of schools not planned for in the budget, work plan and procurement plan.
The audit shows that eight contractors were awarded even though the bids submitted did not satisfy the criteria for legal compliance.
Eight contractors whose bids did not meet the technical evaluation criteria and another three whose technical capacity was not evaluated were awarded contracts.
“The anomalies constitute procurement irregularities. In addition, the contractors engaged may not have the capacity to deliver leading to delayed performance, poor workmanship, stalled projects and losses,” the report says.
“Not withholding tax is not only illegal but may also hinder revenue collection by the government,” the Auditor-General says.
Newer articles:
- Opinion: How the UAE’s mafia-style tactics are hurting both Sudans - 03/05/2024 12:37
- Thousands of desperate people still fleeing Sudan's war into South Sudan - 03/05/2024 12:29
- South Sudan open for Kenyan investors, central bank says - 03/05/2024 12:25
- South Sudan Joint Market Monitoring Initiative (JMMI) 1-7 April 2024 - 03/05/2024 12:20
- UAE company agreed to loan $13B to South Sudan in exchange for oil - 27/04/2024 16:44
Older news items
- UN Aid Trucks Held up at South Sudan Border - 27/04/2024 16:37
- South Sudanese comedians find laughs in painful past - 27/04/2024 16:34
- The DRC had the world's biggest military spend increase last year – and South Sudan was second - 27/04/2024 16:29
- South Sudan declares massive Red Eye (Conjunctivitis) outbreak on Uganda border - 23/04/2024 15:13
- Amnesty International: Government should come clean on enforced disapperance of Juba’s ex-mayor - 22/04/2024 16:07
Latest news items (all categories):
- South Sudan’s ‘Game Of Thrones’ Continues – Analysis - 01/12/2024 17:47
- South Sudan secured over 282 150 doses of oral cholera vaccine to contain the cholera outbreak - 01/12/2024 17:43
- The idea of one nation and one people is a distortion of our reality!!! - 29/11/2024 12:54
- In South Sudan with aid boss John Rynne: 'The maps drawn in colonial times are starting to erode' - 29/11/2024 12:47
- 'They have nothing': Aid workers struggle to save lives at edge of war-torn Sudan - 29/11/2024 12:36
See also (all categories):
Random articles (all categories):
- Fargo's South Sudan Lost Boys all grown up - 21/02/2022 03:39
- South Sudan rebels say they’ve abducted 2 Indian engineers - 12/03/2017 01:27
- South Sudan Kiir, ex-PM Hamdok discuss efforts for peace in Sudan - 11/12/2023 04:31
- South Sudan warring parties agree to speed up forming unified force - 09/09/2019 17:00
- South Sudan media blackout after reporter shot dead - 21/08/2015 08:25
Popular articles:
- Who is the darkest person in the world, according to Guinness World Record? - 25/10/2022 02:34 - Read 58286 times
- No oil in troubled waters - 25/03/2014 15:02 - Read 22212 times
- School exam results in South Sudan show decline - 01/04/2012 17:58 - Read 21350 times
- NDSU student from South Sudan receives scholarship - In-Forum - 29/09/2012 01:44 - Read 18861 times
- Top 10 weakest currency exchange rates in Africa in 2023 - 19/07/2023 00:24 - Read 17966 times