Communication Gap Between Ministries and SOEs

There is poor communication between line ministries and state-owned enterprises (SOEs), the Parliamentary Standing Committee on Public Accounts has found. The ministries, which have oversight of SOEs on behalf of the shareholder, the government, are not regularly briefed.

Further, many SOEs were found to be in contravention of various provisions with non-reconciliation of expenses, incomplete financial statements, the absence of and incomplete asset registers the order of the day.

These were the findings contained in the report tabled in Parliament by the Chairperson of the Parliamentary Standing Committee on Public Accounts, Usutuaije Maamberua. The report covers the 20102011 financial year.

“The committee found that on matters of reporting there are no performance agreements between the line ministries and SOEs, and where such agreements exist there is a lack of monitoring,” states the report.

The report urged the State Owned Enterprises Governance Council to beef up its supervisory role and ensure that SOEs constantly carry out their financial reporting obligations.

One of the recommendations in the report is that communication between line ministries and SOEs be strengthened through regular meetings and quarterly reports.

“The State Owned Enterprises Governance Council should oversee the establishment and enforcement of performance agreements between line ministries and SOEs and ensure that, where such agreements exist, monitoring takes place and that the council develops performance agreements,” states the report.

The State Owned Enterprises Governance Council has been urged to compel doubtful SOEs to adopt turnaround strategies to improve their balance sheet and financial viability.

The report also called for the auditing of annual reports by the Auditor General by all SOEs.

“Within six months after the closure of the SOEs’ financial year, they should present annual financial reports to the portfolio ministers. Ministers should table such report before the house within one month,” recommends the report.

The report however states that there has been an improvement in SOEs complying with the State Finance Act, treasury instructions, the State Owned Enterprises Governance Council Act and other respective laws.

Source : New Era