The Standing Committee on Public Accounts undertook a study tour to the

Mozambican Parliament. The purpose of the study tour was to obtain insight into the

procedural operations of the Public Accounts committee and the Finance committee

in the execution of their oversight of public finance management.

It was also the Committees intention to gain an understanding of the audit process

followed in Mozambique. In the Committees interaction the Committee sought to

determine the style, approach and methodology of their engagement with the

executive, their system of dealing with and prioritization of audit reports and their

progress in performance auditing.

The interaction allowed the delegation to gain first hand knowledge of the

management and conduct of the Public Accounts Committee in the handling of their

general state of accounts and its interaction with other relevant committees and

stakeholders such as the Administrative Tribunal, assigned with auditing functions.

Furthermore, the committee sought to establish links with Mozambican public

representatives and institutions at national level.

2. Delegation

The Delegation consisted of the following members:

Dr G Koornhof

Mr D Gumede

Ms L Mabe

Mr R Mofokeng

Ms L Mashiane

Ms A Dreyer

Mr G Madikiza

Mr B Pule

Mr G Dixon

Ms N Hlasa

Ms Z Keto

3. Courtesy visit to the SA High Commission in Mozambique

The delegation paid a courtesy visit to the South African High Commissioner, Ms

Thandi Lujabe Rankoe, who briefed the Committee on South African / Mozambican

relations and Bi-lateral Agreements between the two countries. The report, attached

as Annexure A, is included for the record.

The First Secretary Consular, Ms NC Nyamande, briefed the committee on labour

movements between the two countries, including visa control and border post

detention centres.

Amongst the issues highlighted were:

A. Deportation problems such as the unavailability of funds to assist people

awaiting deportation. (e.g accommodation, food, medication)

B. Difficulty with regard to the verification of SA Citizens, due to the fact that

they enter Mozambique without the proper documentation.

(Please see the attached report for further information)

4. Meeting with the Planning and Budget Committee Chairperson in the Mozambique

Parliament

The Mozambican Parliament was in recess at the time of the visit and the

Chairperson, Mrs Virginia Verdeia, kindly took time out of her constituency work to

assist the delegation. The Mozambican Parliament sits for 90 days per year. The 1st

Semester is from 01 March to 10 May. The recess is until 15 October. The second

semester is from mid-October to the first week in December.

The Mozambican Parliament is composed of eight specialized commissions. They

are:

i. Planning and Budget

ii. Social Affairs, Gender and Environment

iii. Economic Activities and Services

iv. Defence and Public Order

v. Agriculture, Regional Development, Public Administration and

Local Government

vi. Internal Relations

vii. Legal Affairs and Human Rights

viii. Petitions

The Planning and Budget Committee was the closest committee that fit the

description of a public accounts committee in Mozambique.

The majority party, FRELIMO, chairs the Planning and Budget Committee. Ten

FRELIMO members and five members of the RENAMO Electoral Union

proportionally represent the Committees membership.

The oversight role of the Planning and Budget Committee is more in line with South

Africa’s Joint Budget Committee, than the South African system of SCOPA and

Auditor-General. The Mozambican system uses the Planning and Budget committee

to oversee the approval of the Budget and the Judiciary body known as the

Administrative Tribunal to investigate the financial statements submitted by

government departments.

3.1 Planning and Budget Committee’s Oversight Role

The Ministry of Finance prepares a budget proposal known as the Plano Economico

e Social (PES), the English translation is the "Economic and Social Plan", by the end

of September of each year and tables this state budget to Parliament. This budget

proposal is debated and approved by Parliament during its second session from

October to December.

During the budget drafting process, before September, the Planning and Budgeting

Committee conducts oversight visits of the various Provinces during the constituency

period. Their focus is to evaluate the execution of the first semester’s budget.

Provinces discuss with the Planning and Budget Committee proposals they have for

the new budget, problems that they have experienced and issues that need

addressing. This preparatory work allows this committee to analyse the budget

proposal submitted by the Ministry of Finance at the end of September. During this

period of oversight visits, the other committees in Parliament conduct similar visits

in order to address the budget proposals in their areas of competence.

During the second semester deliberations, from October to December, the Planning

and Budget Committee can call Ministers to discuss the proposals made. Each

Committee, including the Planning and Budget Committee, will revise the proposal

in its respective area. The reports on the budget proposal are tabled and discussed in

the plenary session of Parliament.

It must be noted that the Planning and Budget Committee does not interrogate each

department’s audited financial statements or accounts. According to law, a court of

law known as the Administrative Tribunal performs this function. The Planning and

Budgeting Committees main focus is the global picture of the general state of the

accounts, produced by the Ministry of Finance.

5. The Administrative Tribunal and the Oversight of Financial Management

The Administrative Tribunal is a judicial body that has the responsibility of auditing

the financial institutions. Its function is equivalent to that of the Auditor-General of

South Africa but it plays a further multi-functionary role in the oversight of public

finances.

The Administrative Tribunal inter alia focuses on the following issues with regard to

public finances:

- It performs the audits of the financial statements

- It interrogates the audited financial statements

- It administers government contracts

4.1 Auditing of financial statements

There are three types of audits:

- Prior inspections

- Audits of departments

- General account

4.2 Prior inspections

The Administrative Tribunal reviews the governments contract proposals for a

specific activity. Procurement contracts are assessed according to legislation and

compliance with regulations. The Administrative Tribunal also expresses an opinion

on the necessity of the specific activity.

4.3 Audits of departments

Each state institution prepares its financial statements, which are accounts on the

execution of the budget. These financial statements are sent to the Administrative

Tribunal which interrogates the statements and expresses an opinion on them.

The Administrative Tribunal possesses the required skills level to assess the accounts

and is tasked with this process by law. After the review, the Administrative Tribunal

has the power to investigate and report financial misconduct and can impose

sanctions and mete out punishment to offending officials. The legal experts follow up

on the legal and financial sanctions that should be taken. There are three sanctions

applicable: - Disciplinary procedures

- Criminal procedures

- Financial procedures

The ability to impose criminal and financial sanctions is considered a strength of the

system. The Administrative Tribunal works hand in hand with other judiciary bodies

to investigate the person/s responsible for mismanagement and to determine the

applicable charge. Disciplinary procedures are left to the Ministry of Finance to

implement.

4.4 General Account

The General Account is prepared by the Minister of Finance and is sent to the

Administrative Tribunal. The Administrative Tribunal prepares a report or opinion

on the General Account. The Administrative Tribunal has no decision-making

powers in regard to the General Account but expresses an opinion and tables it to

Parliament.

The National Treasury Directorate in the Ministry of Finance assesses the review.

The Ministry of Finance uses the information in preparation for the tabling of the

report to Parliament.

The Administrative Tribunal’s involvement in this process is similar to the Auditor-

General of South Africa’s external audit of accounts. The Ministry of Finance’s

report is referee to the Planning and Budget Committee. The Administrative

Tribunal strongly criticizes the administration of the state accounts and the Planning

and Budget committee often has to call both the Administrative Tribunal and

Ministry of Finance to investigate the difference of opinion. The Planning and

Budget committee has the final opinion with regard to the general account.

6. Ministry of State Administration

The Ministry of State Administration was established in 1995. Its function is to

control the activities of the Ministries particularly in terms of local municipalities.

Initially it did not have enough staff to carry out its functions effectively. The

Ministry of State Administration was re-organized and in 2004 its complement was

increased to effectively carry out its mandate.

Its investigations reveal that there was a relaxed attitude to the adherence to rules and

regulations pertaining to the budget and human resources. In several instances the

departments and institutions did not follow rules or know that these rules existed.

The Ministry of State Administration now has inspectorate teams carrying out

inspections on two provinces per month. In addition each Ministry carries out sector

specific inspections such as in labour, health, education, etc.

The Ministry of State Administration is presently revising the concept of inspections.

The issue is whether to specialize on specific portfolios or do inspections on a global

scale with regard to the legal framework applicable for financial management,

human resources and implementation of ministerial policy

7. Portfolio Committee on Agriculture, Administration and Local Government

The Committee is composed of 15 MPs proportionally represented by ten FRELIMO

and five RENAMO Electoral Union members. The committee is divided into three

sub-groups composed of:

- Agriculture

- Regional development

- Public administration and local government

The committee’s involvement in the budget process is to conduct visits to institutions

and investigate their plans for the budget. The committee conducts oversight visits

to determine the extent of work already carried out. The committee reports and

expresses an opinion on those observations.

8. MINISTRY OF FINANCE

ORGANIZATION OF THE MINISTRY

The Permanent Secretary is a recent appointment. The Prime Minister based on the

Minister’s proposals appoints the Permanent Secretary. The appointee fulfills the

role of technical and administrative functions and works with the Minister.

7.1 National Directorates

Planning and Budgeting: Preparation of budget

Public Accounts: Follow-up execution of budget and prepares a quarterly report. At

the end of the year the Permanent Secretary prepares the General Account.

NATIONAL TREASURY:

i. Financial planning

ii. Make payments

iii. 3 months financial report

iv. Management of debt

v. Responsible for international relations

vi. Oversee Public Enterprises

vii. Central Bank

The Ministry also has a General Directorate of finances that acts as the internal audit

body.

9. Conclusion

The Administrative Tribunal’s role has a number of advantages in terms of oversight.

It is equipped with the legal framework to assess the financial statements, investigate

maladministration and prosecute offenders. It gives the exercise of overseeing the

expenditure of public finances the power to enforce its findings and resolutions.

The Auditor-General system and the court system have strengths and weaknesses

that should be discussed. The major shortcoming of the court system is that there is a

PLANNING AND BUDGETING PUBLIC ACCOUNTS

TREASURY ASSETS OF STATE

INSPECTORATE OF FINANCES

NATIONAL DIRECTORATE

PERMANENT SECRETARY

DEPUTY MINISTER

(Non. presently appointed

MINISTER

(Political authority: Snr Admin power

distance between the interaction of the Planning and Budget committee and the

Administrative Tribunal.

The Planning and Budget Committee proposed further interaction with SCOPA at the

Southern African Development Community Organisation of Public Accounts

Committees (SADCOPAC) level. It is in favour of brainstorming the most suitable

system for oversight of public finances in Southern Africa.

Thanks and appreciation

In most instances the Committee achieved the purpose of the tour by obtaining

comparative insight into the operations, procedure and methodology of the Public

Accounts, Audit and Finance Committees in the execution of the oversight and

monitoring of public finance management. The interaction with the Planning and

Budget committee was fruitful and we established favourable links with the members

of the committee.

One of the challenges the delegation had to face related to the apparent differences

between the Portuguese system and the Westminster system of government. The

interaction was often disjointed and common ground had to be established before a

fruitful discussion could commence. The language barrier posed another challenge,

however, the translator provided by the South African High Commission was of

tremendous help in regard to understanding the concepts used in Mozambique.

The Committee extends its thanks and appreciation to the Mozambique Chairpersons

of the Planning and Budget committee, the Portfolio Committee on Agriculture,

Administration and Local power, the National Treasury, the Ministry of Public

Administration for affording the Committee the time out of its busy schedules. The

Committee further acknowledges the invaluable assistance rendered by the High

Commission to the success of the tour.

The initial study tour proposal included a visit to the Kenyan Government. Due to the

Kenyan Parliamentary recess, this leg is postponed until further notice.

Report to be considered.".