BILL WATCH 25/2022
[14th June 2022]
Condonation of Excess Expenditure : Here We Go Again
Last Friday a Financial Adjustments Bill was published in the Gazette to condone unauthorised expenditure incurred by the Ministry of Finance and Economic Development for the years 2019 and 2020. The Bill can be accessed on the Veritas website [link].
Constitutional Background to the Bill
The Bill is being brought to Parliament because, under Chapter 17 of the Constitution, Parliament is responsible for deciding how much money the Government can spend and what the money should be spent on, and for ensuring ‒ so far as Parliament can ‒ that the Government does not misspend the money or spend more than has been allocated to it.
If the Government has misspent or overspent money, section 307 of the Constitution states that:
“… the Minister responsible for finance must introduce a Bill into the National Assembly seeking condonation of the unauthorised expenditure.
“The Bill … must be introduced into the National Assembly without delay and in any event no later than sixty days after the extent of the unauthorised expenditure has been established.”
What the Bill Will Do
The Bill asks Parliament (belatedly) to condone expenditure by the Ministry of Finance amounting to:
Z$6 783 930 028 for the year 2019, and
Z$100 690 788 418 for the year 2020.
Neither the Bill nor its memorandum explains why or how the Ministry incurred the expenditure; to find that out, one needs to look at the Auditor-General’s reports on appropriation accounts and fund accounts for the two years concerned.
According to the Auditor-General’s report for 2019 [link], which was tabled in the National Assembly on the 16th June 2021:
“During the year under review, Treasury incurred unauthorised excess expenditure amounting to $6 806 340 654 as a result of Unallocated Reserve transfers made to line Ministries amounting to $7 386 995 654. This exceeded the approved budget of $580 655 000 in contravention of Section 305 (5) of the Constitution of Zimbabwe.” Treasury as the manager of the public purse did not adhere to legal provisions on the sanctioning of excess expenditure by Parliament.”
It will be noted that the Auditor-General’s figure for excess expenditure is slightly more (by Z$22 410 626) than the amount for which the Bill seeks condonation; no doubt the Minister of Finance will explain this when he delivers his Second Reading speech in the National Assembly.
In the Auditor-General’s report for 2020 [link], which was tabled in the National Assembly on the 8th March 2022 , she said:
“The approved budget for Unallocated Reserve as per the Appropriation (2020) Act, 2019 was $1 394 632 000. However, Ministry of Finance transferred to line Ministries a total of $102 085 420 418, resulting in unauthorized excess transfers of $100 690 788 418. The excess expenditure is still to be condoned by Parliament in terms of Section 307 of Constitution of Zimbabwe.”
The amounts of excess expenditure are in Zimbabwe dollars which are constantly losing value through inflation, but even so they are very large – huge in fact:
The 2019 amount, at the official rate of exchange in December 2019 (Z$16,7 : US$1) was worth US$406 223 354;
The 2020 amount at the official rate of exchange in December 2020 ((Z$81,8 : US$1) was worth US$1 230 938 734.
The Minister of Finance, as the manager of the public purse, will have to explain to the National Assembly why he overspent so much in 2019 and 2020. He has a great deal of explaining to do.
Section 307 of the Constitution, which we quoted earlier, requires the Minister to introduce a condonation Bill into the National Assembly no later than 60 days after the extent of unauthorised expenditure has been established. The Auditor-General’s report for 2019 was tabled in Parliament on the 13th June 2021, just over a year ago; the extent of the overspending must have been established some time before that, so the Minister has waited a year before seeking condonation from Parliament. The Auditor-General’s report for 2020 was tabled on the 8th March 2022, 97 days ago; again the Minister has illegally delayed coming to Parliament.
The Minister must explain to the National Assembly and to the public at large why he has failed to comply with his constitutional obligations.
By the Way, What About the Earlier Bill?
On the 12th November 2019 a Financial Adjustments Bill was published in the Gazette seeking condonation of illegal government expenditure during the years 2015 to 2018 totalling an eye-popping US$9 638 602 782 – nearly 10 billion US dollars. We commented on the Bill in our Bill Watch 66/2019 of the 5th December 2019 [link].
The Bill was introduced in the National Assembly but never progressed to its Second Reading stage and lapsed in October 2020 when the 2019-20 parliamentary session ended. It was never revived, apparently because the Minister agreed to replace it with a new Bill giving details of how the illegal expenditure had been incurred. No new Bill has been produced. As a result the expenditure remains illegal, never having been condoned, and the Minister continues to be in breach of his obligations under section 307 of the Constitution.
The amount of overspending disclosed in the two Bills – a total of US$11 275 764 870 [over 11 billion US$] – is staggering. The Minister and his officials have failed to explain to Parliament and its committees, particularly the Parliamentary Accounts Committee, how overspending on such a scale has been permitted to continue over so many years. It is to be hoped that when the Minister finally brings the two Bills to Parliament, Members will question him closely to find out the answers. They and the general public have a right to know. In the interests of transparency Parliament should not pass these condonation Bills without a full explanation of where the money went.