Govt blows billions while travel bans in effect

Travel bans that government frequently effects to save public resources seem not yielding the desired austerity measures due to laxity in monitoring, Nation on Sunday has established.

For example, the then government blew up to K15 billion in external and internal travel, translating to about 84 percent of the budget money allocated for travel in a period of just seven months for the 2013/14 financial year.

Further, latest government travel expenditure figures (under the DPP regime) show that government blew K5.1 billion in just two months since the passing of the national budget in September this year, which was allocated a total of K21 billion for the 2014/15 fiscal year.

According to analysts, it is yet to be seen how effective the perpetual bans are in saving national coffers, considering that the K15 billion blown by the People’s Party (PP) administration was done within a travel ban effected by the then finance minister Maxwell Mkwezalamba.

The minister imposed an internal and external travel ban for civil servants in order to minimise expenditure at a time government was facing donor sanctions following revelations of massive looting of public funds—known as Cashgate—during which Treasury lost K13 billion.

The current travel ban, under the Democratic Progressive Party (DPP) government, does not speak differently either.

According to Ministry of Finance spokesperson Nations Msowoya, expenditure trends in the 2014/15 budget, specifically on internal travel budget, alarmed the system, thereby necessitating the latest travel ban.

While Msowoya argued the trend is within expected levels so far, he said the current ban is directed at “unnecessary” external travel trips.

“Government is expected to save 20 percent of the approved external travel budget. Internal and external travel for the 2014/15 financial year

is K17.9 billion and K3.7 billion, respectively.

“If we include motor vehicle running expenses, the internal travel budget comes to K30.1 billion. As of September 30, 2014, government had spent 17.6 percent of the annual provision,” he said.

Msowoya said the 2013/14 financial year travel ban had an impact as it reduced government expenditure of the K28.5 billion approved travel budget.

“However, at the start of the financial year [June, 2013], government had already cut the travel budget by K10.9 billion and; hence, the revised one came to K17.6 billion. So when the travel ban was imposed in November, 2013, it was meant to contain travel expenditure within the reduced budget.

“Therefore, the 84 percent travel expenditure is based on the revised figure, but if you base on the approved budget, travel expenditure came to 52 percent of the annual provision. You will notice that government, therefore, saved K13.6 billion,” he said.

Economic analyst Thomas Munthali, while agreeing that the intention of travel bans is good as it sends an important message of austerity and fiscal discipline, it is only effective when enforced.

“The challenge is on monitoring the implementation and ensuring that those who break the rules are held accountable and censured accordingly,” he said.

He said government should be seen to control expenditures and live within its means.

According to documents Nation on Sunday has seen, government initially set aside K28.5 billion for internal and external travel for the 2013/14 National Budget, but later trimmed it to K17.6 billion.

However, between December 2013 and June 2014, government departments blew up K15 billion of the K17.6 billion at a time a travel ban was in effect.

The documents show that the Malawi Electoral Commission (MEC) lead in the over-expenditure with K2.9 billion, about 96 percent of budget allocated to the institution; the National Assembly blew K1.5 billion, representing 90 percent of the allocated money; the Ministry of Education blew K1.3 billion representing 99 percent of the money allocated and the Ministry of Health spent K1.3 billion, representing 91 percent of the total travel cost.

State House, between December 2013 and June 2014 blew K712 641 379, with K174 233 579 in external travel, K210 237 787 internal travel and K328 170 013 on motor vehicles fuels.

However, two departments registered low absorption of their travel allowances—the Department of Nutrition, HIV and Aids and the National Aids Commission (NAC)—which was allocated K1.4 billion, but only used K584 million representing 37 percent absorption rate. The Office of the Directorate of Public Procurement (ODPP) was the least spender, only registering K32.7 million out of K74.7 million it was allocated, representing about a 44 percent absorption rate.