Finance Minister Felix Mlusu has fired a warning shot to all controlling officers in government ministries, departments and agencies (MDA)’s to adhere to their approved budgets as his Ministry will not entertain any extra-budgetary requests.
During his budget presentation on Friday, the Minister cautioned Principal Secretaries and heads of institutions against committing government financially without Treasury’s approval noting that this derails budget implementation.
He emphasised that approved budgets must be treated as law and those flouting it will be punished by law.
“It is high time Madam Speaker, 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 institutionalised.
“Controlling Officers must desist from committing Government financially without prior approval from the Secretary to the Treasury,” cautioned Mlusu.
In an effort to stop accumulation of arrears by MDA’s, he assured Treasury’s commitment to fund the proposed 2020-2021 budget in full.
He however noted that for this to be realised, all government revenue collecting institutions must meet and surpass their revenue collection targets.
In line with section 84 of the Public Finance Management Act of 2003, he reminded the officers to submit monthly financial reports to Secretary to the Treasury (ST).
“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.
“Madam Speaker, any MDA that fails to submit these reports on time will be sanctioned including having their monthly funding withheld,” said the Finance Minister.
To enhance compliance to public finance management regulations in District Councils, Mlusu disclosed that government will in the 2020/21 fiscal year, introduce performance based grants in all the 28 Councils.
Mlusu stressed that under the arrangement, resources will be disbursed to councils based on their adherence to regulations and prudent financial management.
In a related development, the review of the Public Finance Management Act of 2003 is expected to be completed during the current fiscal year.
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 Act and placement of personal accountability to controlling officers and public officers for actions taken in executing their roles and responsibilities.