Govt sets new standards for budget-dependent bodies
A new policy will be introduced soon to reclassify budget-dependent bodies and set standards for their funding, auditing, accounting, wage structure and reporting.
This is in line with the economic, public administration and public reform programmes and also aims to tackle all weaknesses when it comes to budget planning.
The heads of such bodies – including chief executives and principal secretaries – were presented with the new policy at a meeting in the Seychelles Trading Company’s conference room last Thursday. Also present was a World Bank senior economist, Tracy Lane.
Addressing them, Vice-President Danny Faure, who is also the Minister for Finance and Trade, said these bodies have been reclassified into three main categories: those that provide essential public services, those that are regulatory in nature, and those that provide non-government, social development, communication and education services.
“All this is being done to strengthen their governance, and it has been established that there should be a clear delimitation of responsibilities between the public bodies and their parent ministries,” he said.
Such bodies will be governed by boards of directors and have chief executives at their heads.
Mr Faure said the new boards will be appointed by the President, and the day-to-day operations will be the responsibility of the chief executives, who will be accountable to them.
He said the parent ministry will set the policy direction, and the principal secretary will monitor and evaluate service provision.
In order to segregate powers and avoid a conflict of interest, the principal secretary will serve on a board as a member only.
“To ensure good governance, accountability and transparency, it will be mandatory for all budget-dependent bodies to submit an end-of-year report outlining their activities and programme based on set targets for the year and to have these published on their websites,” Mr Faure explained.
The new policy was presented by director of public debt management Damien Thesee and deputy comptroller-general Patrick Payet from the Finance Department.
Talking to members of the media, Mr Payet said the new policy will guide the heads and provide for more consistency.
He said when the bodies that depend on government budgets send their budget reports to the Department of Finance, they will know what documents are required from them and what needs to be audited by the auditor-general’s office.
He added that the new policy will also guide cabinet ministers and the President when they decide to set up a new body.
“The policy will help Finance to audit these agencies and see how much budget they will be given,” added Mr Payet.
In the past, such bodies have not given the department the required information and it has taken a while to work on their budget.
Mr Payet also explained the budget standards that agencies under each category now have to follow. Public bodies in category one are those providing essential services that are core to the running of the country, such as the Fire and Rescue Services Agency, Social Welfare Agency and Land Transport Agency.
All their revenue is to be collected in the government’s budget, and an external auditor needs to audit their reports every year before sending the budget to the ministry.
In the second category, there are regulatory bodies such as the Seychelles Fishing Authority and Seychelles Revenue Commission. The government will give them a full budget and all their revenues should be put into the government budget.
They will be audited by an external auditor, and copies of their reports should be given to the National Assembly, their ministry and the Finance Department.
Then there is the third category, the bodies providing non-government services. These fall into three sub-categories, which include those bodies with social functions such as the National Council for the Elderly and the National Council for Children.
They have to apply for their budget as they will not automatically get funding from the government. They are being encouraged to look for funding from the private sector as well.
Mr Payet said if they get 50% of their budget from the government they are obliged to conduct their spending through the treasury. But they will be allowed to open their own accounts if they are getting less than 50% from the government, but only after this has been approved by Finance.
He said they can introduce their own scheme of service or bonus scheme if they choose, but that has to be done through a high-level committee.
Another sub-category is for bodies that carry out development in the country, for example the Praslin and La Digue Development Funds. Funding will be based on defined grant requirements which must be expressed in a mid-term development plan, and they will have to apply for funding every year.
And there is another sub-category for those bodies that provide communication and education, for example the Seychelles Broadcasting Corporation and Seychelles Institute of Management.
They will have to provide the ministry with at least a three-year plan of their proposed activities, and to hand over their annual audited accounts to the National Assembly.
When the policy has been endorsed, it will again be presented to the chief executives before coming into effect next month.
Source: NATION 8-4-10