New Audit Regulation Tightens Procurement Process


Regulations set out penalties for violating set procedures




The Ministry of Finance & Economic Cooperation (MoFEC) has announced a new regulation regarding penalties that officials will face if they do not procure items following the proper process. Officials will face financial penalties, as well as possible jail sentences if the Auditor General’s Office finds irregularities in the procurement process.

The Ministry held a press conference at its premises in order to clarify the provisions of the regulation.

The Auditor General’s office is now able to directly identify and deal with issues that are seen in the accounts of public offices and institutions.

More than 60pc of government spending is accounted for by procurement by various offices. However, recurring irregularities in the accounting for the purchases and the reports presented to authorities led MoFEC to issue the regulation, based on the previous audit law.

Officials who are determined not to have discharged their duties properly will face administrative financial penalties of 5,000 Br to 10,000 Br. Any official who is penalized more than three times will be removed from their posts, including ministers in public office.

The regulation also provides for the criminal charging of officials who are involved in procurement irregularities. Those who are found to have knowingly signed off on falsified or incorrectly prepared documents will be punished with a 10-15 year prison sentence and a fine between 25,000 Br to 35,000 Br.

Bribery attempts in connection with the regulation, such as trying to cover up audit gaps, could result in a jail sentence of 10-15 years, and a fine of between 25,000 Br to 35,000 Br.

Another criminal offence would be to intentionally withhold knowledge of the terms of the regulation and not inform other officials who do not have the same knowledge.

However, these penalties will not be all that faces those who violate the regulation.

“Besides the penalty, they will be expected to pay back if there is any gap,” explained Haji Ibsa, communications director at MoFEC.

The release of the regulation followed nearly month-long discussions and training in which close to a thousand people, including all the members of the cabinet, high-ranking officials, and employees of government institutions participated.

“Every member of the cabinet underwent the training,” explained Haji.

Nearly 80pc of the current cabinet are new to governmental positions, following the reshuffling of the cabinet by Prime Minister Hailemariam Desalegn in November 2016.



By MENNA ASRAT
FORTUNE STAFF WRITER

Published on Mar 18,2017 [ Vol 17 ,No 880]


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