2003 Public Finance Management Act to be amended; To punish duty bearers who fail to account for resources

By Duncan Mlanjira

The Tonse Alliance Government will complete the review of the Public Finance Management (PFM) Act of 2003 during the 2020/2021 fiscal year in order to strengthen accounting, budgeting, revenue and expenditure management, internal controls and other areas of public finance management.

This is what is included in the 2020-21 national budget that Minister of Finance Felix Mlusu presented in Parliament on Friday.

Mlusu said some of the proposed changes in the revised PFM Bill include:

* Specific responsibilities of public officers with the inclusion of sanctions for violations against the PFM Act;

* Placement of personal accountability to Controlling Officers and public officers for actions taken in executing their roles and responsibilities;

* and placing the obligation of accountability of third parties that receive resources for the intended benefit of the people of Malawi.

Finance Minister Felix Mlusu

“The revised Public Finance Management Bill is expected to be submitted to this August House during the upcoming February 2021 Parliamentary sitting,” Mlusu said.

“It is high time that Controlling Officers must start regarding the approved national budget as law and it must be treated as such. Failure to do so must be punishable under the governing laws of Malawi and enforcement measures must be institutionalized.

“Controlling Officers must desist from committing Government financially without prior approval from the Secretary to the Treasury.”

Malawi Parliament

In an effort to stop accumulation of arrears by Ministries, Departments and Agencies, Mlusu said Treasury is committed to fund the approved budget in full.

“However, in order to achieve this commitment, all revenue collecting MDAs are urged to meet and surpass their revenue collection targets.

“In view of this, Madam Speaker, all Controlling Officers are advised to adhere to their approved budgets and my Ministry will not entertain any extra-budgetary requests as this derails implementation of the budget.

“One of the pillars for the Tonse Alliance led Government is transparency and accountability on the revenues collected, resources received and how these revenues have been utilised for delivery of public services.

“In this regard, the Ministry of Finance will be posting on its website the Budget Performance Reports on a monthly basis and publishing the same in the newspapers with wide circulation on a quarterly basis.”

As per Section 84 of the PFM Act of 2003, Mlusu said all Controlling Officers are expected to submit monthly financial reports to the Secretary to the Treasury.

“In this regard all Controlling Officers are being reminded to abide by this law by submitting the mandatory financial reports namely: Expenditure Return, Revenue Return, Payroll Return, Commitment Control Report and Bank Reconciliation Report.

“Any Ministry, Department and Agency that fails to submit these reports on time will be sanctioned including having their monthly funding withheld.”

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The Minister said in order to enhance compliance to public finance management regulations in District Councils, Government will in the 2020/2021 fiscal year introduce performance based grants to all 28 District Councils.

“Under this arrangement, resources will be disbursed to these councils based on their adherence to regulations and prudent financial management.

“Government has made tremendous progress in development planning with the establishment of the National Planning Commission to coordinate the preparation of a successor to the Vision 2020 and medium term development strategies.

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“Despite Malawi attaining political independence some 56 years ago, the country is yet to attain economic independence and in order to reverse this situation Government, through the National Planning Commission is developing a collectively-defined new Vision that is expected to transform the country through inclusive wealth creation, sustainable and resilient growth.

“The new Vision is planned to be launched before December, 2020,” said the Finance Minister.

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