Rwanda lost $5.6bn to irregular expenditure during 2019/20 – Auditor General

Rwanda is reeling from a staggering loss of over $5.6 billion in public funds during the 2019-2020 fiscal year, as revealed by the Auditor General's report tabled before a joint parliamentary session. The report paints a grim picture of financial mismanagement and irregular expenditures, raising serious concerns about the country's public finance management. Auditor General Obadiah Biraro shed light on the findings in an exclusive interview with CNBC Africa's Julius Bizimungu. The discrepancies highlighted in the report point to a violation of the public finance management act, demanding urgent corrective actions to prevent such massive losses in the future. Biraro emphasized the need for accountability and transparency in handling public funds to avoid further financial hemorrhage. One of the most alarming revelations from the report is a significant reduction in the government's authorized expenditure from $4.4 billion to $300 million, underscoring the prevalent financial irregularities plaguing the system. Additionally, funds diverted plummeted from $400 million to $57 million, reflecting a lack of oversight and control over public finances. Biraro lamented that the total irregular expenditure stands at $5.6 billion, far from the target of zero irregularities, pointing to systemic flaws in financial management. The Auditor General reiterated the importance of implementing administrative actions to address the discrepancies and hold accountable those responsible for the financial mismanagement. The report also highlighted the role of government-owned enterprises, which manage a significant portion of the annual budget, as key contributors to the financial losses. Biraro expressed frustration with the lack of compliance and transparency among these institutions, emphasizing the need for stringent guidelines and oversight to prevent further financial missteps. The focus on board governance within these enterprises emerged as a critical area needing improvement to ensure effective financial management and accountability. Among the top 16 institutions flagged for financial irregularities, the Rwanda Agriculture Board stood out for awarding tenders worth over 21 billion Rwandan francs without transparent processes. While acknowledging the seriousness of the issue, Biraro stopped short of advocating for immediate prosecution, suggesting administrative actions as a first step towards rectifying the situation. The revelation underscores the urgent need for robust financial controls and accountability measures to safeguard public funds and promote fiscal responsibility. The Auditor General's report serves as a wake-up call for Rwanda to address the systemic challenges in public finance management and enhance transparency and accountability. The staggering loss of $5.6 billion underscores the urgency of implementing stringent measures to prevent further financial mismanagement. As Rwanda grapples with the fallout of the irregular expenditures highlighted in the report, stakeholders must work together to strengthen financial governance and restore public trust in the management of public funds.