Political columns – Unity Fiji, HOPE
As a former Permanent Secretary for Finance, I know that the strengths of our public financial management system are anchored in the universal principles of clear separation of roles, maintenance of a paper trail for accountability and the independence of the auditing agency.
The financial processes are clearly outlined in the Finance Instructions (FI), which is a legal document that derives its authority from the main Finance Act. The FI is supported by other instructions and manuals like the Stores Instructions and the Procurement Manual. Together, they collectively protect the integrity of the use and recording of taxpayers’ money.
In my view, there are clear evidences that the integrity of the entire public financial management system is seriously under threat. The separation of roles is now blurred. Normally, the Minister and Cabinet sets strategies and policies. The officials in the Ministry of Finance implement these policies in compliance with the Finance Act and the Finance Instructions.
The clear separation of roles is an essential framework of good governance. It ensures that the regulations and legislations are followed and there is accountability to the people. The universal best practice is that the Permanent Secretary for Finance (PSF) is the Accountable Officer, not the Minister. The PSF fronts up to the Public Accounts Committee (PAC) to defend any adverse findings of the External Auditor. If the Minister for Finance interferes in the operations of government finance, it puts the Permanent Secretary at a very risky position.
The public must be seriously concerned that the culture in the public service does not allow the Account- able officers to effectively protect the integrity of our government finance. As a former PSF, I was obligated to advise my Minister when he stepped out of line. And they always respected and appreciated that advice. Unfortunately, anecdotal evidence shows that this is not allowed to happen now.
The voices of Accountable officers are muffled by the heavy handedness of Ministers. We have seen several cases where Permanent Secretaries have lost their jobs when they dared challenge the Minister. This culture puts our financial system at great risks. Another major weakness is the circumvention of written instructions with verbal ones. These are deliberately done to hide the sources of those instructions. The Financial Supervisors are strangled by the culture of obedience lest they be dismissed from their jobs. The element of fear is strong and civil servants do not question the instructions from above. As a result, the morale of civil servants has plummeted and delivery of service to the people has suffered. Procurement is the largest area of risk in our financial management. I have stated before my concerns of the Minister’s interference in the award of tenders. In my time, I, as the PSF, was responsible for the integrity of the tender processes. The Minister would refer his concerns to me if he had any issue on the tender process. I do not recall him intervening directly in the tender process. But now, we know of many cases where the current Minister has intervened directly in the awards of tenders. This puts the financial system at great risks. The environment of fear for their jobs sit heavily on the shoulders of our senior civil servants. I fully understand their situation. This climate does not give us confidence in the credibility of the use of our taxpayers’ money. It is an environment that encourages wasteful expenditures, unlawful spending and misuse of our money.
In summary, in my assessment, our entire public financial management system is under immense threat. Many processes that we have painstakingly strengthened over many decades are now being cast aside for political convenience. The current vote-buying freebies are classical examples where the Finance Instructions have been ignored. The rear action by Government to persecute those who took advantage of their give-aways was, in my opinion, an afterthought to save them from the Auditor’s scrutiny. In my opinion, the use of Heads 50 and 51 of the Budget are being abused. The law requires that all government spending must be appropriated by Parliament. However, there is anecdotal evidence that the use of these two Heads of Expenditure are not appropriated in the budget of the relevant ministries that use these funds.
I understand that even salaries are being paid out of these two Heads. It is obvious that the Minister is running the entire financial show. Accountable officers are powerless to voice their concerns that the financial regulations are being disregarded. The whole of Fiji must be concerned about the state of affairs in our public financial management. Government is spending like there is no tomorrow. Legal guidelines are being disregarded. If we allow this situation to continue, in my view, this country is heading for a financial cliff. If we fall over this cliff, the burden on our young people and their families will be catastrophic.
Money is everything these days. If we run out of it, the whole economic system implodes. Those who are responsible for the mess will not be there any longer. It is the people that will be left holding the pieces.
It is time to restore the integrity of our public financial system.
‘It is time to restore the integrity of our public financial system.’