Surcharges coming soon: No escape for errant officials
The government – in a hurried move on a recommendation of the International Monetary Fund (IMF) – is to adopt a zero-tolerance policy soon against errant state officials involved in financial irregularities and misappropriations by imposing surcharges (fines) if they are found guilty.
The IMF in its technical assistance report — governance diagnostic assessment had directed the then government in 2023 to amend the National Audit Act by March 2024.
The aim is to enable the Auditor General to levy surcharges on officers, including Chief Accounting Officers, for failure to properly discharge responsibility for oversight and accountability for use of public resources.
Surcharges can be imposed for several reasons, including deficiencies, losses due to negligence or misconduct, items in the accounts that are contrary to law and accounts ‘not brought to account’ which were not done.
The government has decided to adopt this new surcharge levying procedure to be implemented within two months through an independent committee appointed by the Constitutional Council, official sources said.
Accordingly the Auditor General’s recommendation would be submitted to this independent committee to take necessary action against corrupt officials.
Earlier the Auditor General’s Department could impose surcharges on officials for various reasons, including disallowing and surcharging for deficiencies, losses due to negligence or misconduct, items in accounts contrary to law, and accounts not brought to account as required.
These surcharges are related to the accountability of public resources and oversight responsibilities. The Auditor General can also recommend fees for audits or consultations from various institutions. This process is to be changed in accordance with the new government policy.
A retired Supreme Court judge will be appointed as the head of this independent committee consisting five members, including a retired officer in the public finance sector and an officer from the Institute of Chartered Accountants.
This process applies to officials of ministries, departments, corporations, boards and state-owned companies. Under the current legal framework, the Auditor General can only recommend surcharges for a limited number of institutions, including local government institutions and universities.
The Auditor General’s Department, which investigates government institutions and state corporations for financial irregularities, highlighting issues in their financial statements, submits detailed reports to Parliament, prompting necessary corrective actions to be taken by the relevant authorities.
If irregularities are found; these actions can include disciplinary measures against individuals, policy changes, and improved internal controls. But this was not happening due to lack of a proper system, follow-up action and coordination.
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