Foreign Ministry in tight spot

GOVERNMENT instructed the Ministry of Foreign Affairs to open a new embassy in Brazil, but did not provide the necessary money for the exercise, putting a huge strain on the ministry’s budget for the previous financial year.

Briefing the Parliamentary Standing Committee on Public Accounts on Monday, Permanent Secretary Veiccoh Nghiwete said the Ministry managed to establish the Brazil embassy and furnish its office, but had to overspend on its budget. “I just find it strange that such a Cabinet decision was made without the financial implications being considered by Cabinet,” said the Committee’s chairman, Johan de Waal.”The Finance Ministry will only make the budgetary allocation for the Brazil embassy available during this financial year, we were informed a few weeks ago,” Nghiwete told the hearing, “but the money has not been released.The instructions to start the diplomatic mission in Brazil came in 2003,” he added.Finding money for that purpose from its own meagre resources resulted in overspending the Ministry’s budget since then, Nghiwete explained.The Committee then requested an explanation for losses of N$17 million that had accumulated over the past 16 years because wrong payments were made to officials – the result of incorrect calculations of overtime, too high a salary notch or too few taxes deducted.Arrangements were put in place to have officials pay back the money in instalments, the Permanent Secretary said.About N$466 000 had been deducted from staff as contribution to the Government Institution Pension Fund (GIPF), but had not been paid to the GIPF, which the Public Accounts Committee asked to be done as soon as possible.The Committee was further unhappy with some tender board exemptions.For those exempted expenditure a register should be kept, the Members of Parliament pointed out.Another problem the Ministry faced related to losses due to unfavourable exchange rates.Funds returned from missions abroad were usually in US dollars, but were converted to local currency.”Should another overseas diplomatic mission require funds, that sum was converted again into foreign currency,” the Permanent Secretary said.”We have worked on a solution for this problem and applied for a US dollar account at the Bank of Namibia, but this application was turned down.”Good news, however, was that the Ministry could bring outstanding travel allowances advanced to staff down from N$700 000 to zero.”You are the first ministry to achieve this positive result,” De Waal said.Last week’s first round of hearings revealed that civil servants owed Government a total of N$21,5 million for travel advances that they had not yet paid back by March 2005.The budget for operating expenditure allocated to the Foreign Ministry came to N$184 million for the financial year ending March 31,2005.It spent N$189,9 million, however.”I just find it strange that such a Cabinet decision was made without the financial implications being considered by Cabinet,” said the Committee’s chairman, Johan de Waal.”The Finance Ministry will only make the budgetary allocation for the Brazil embassy available during this financial year, we were informed a few weeks ago,” Nghiwete told the hearing, “but the money has not been released.The instructions to start the diplomatic mission in Brazil came in 2003,” he added.Finding money for that purpose from its own meagre resources resulted in overspending the Ministry’s budget since then, Nghiwete explained.The Committee then requested an explanation for losses of N$17 million that had accumulated over the past 16 years because wrong payments were made to officials – the result of incorrect calculations of overtime, too high a salary notch or too few taxes deducted.Arrangements were put in place to have officials pay back the money in instalments, the Permanent Secretary said.About N$466 000 had been deducted from staff as contribution to the Government Institution Pension Fund (GIPF), but had not been paid to the GIPF, which the Public Accounts Committee asked to be done as soon as possible.The Committee was further unhappy with some tender board exemptions.For those exempted expenditure a register should be kept, the Members of Parliament pointed out.Another problem the Ministry faced related to losses due to unfavourable exchange rates.Funds returned from missions abroad were usually in US dollars, but were converted to local currency.”Should another overseas diplomatic mission require funds, that sum was converted again into foreign currency,” the Permanent Secretary said.”We have worked on a solution for this problem and applied for a US dollar account at the Bank of Namibia, but this application was turned down.”Good news, however, was that the Ministry could bring outstanding travel allowances advanced to staff down from N$700 000 to zero.”You are the first ministry to achieve this positive result,” De Waal said.Last week’s first round of hearings revealed that civil servants owed Government a total of N$21,5 million for travel advances that they had not yet paid back by March 2005.The budget for operating expenditure allocated to the Foreign Ministry came to N$184 million for the financial year ending March 31,2005.It spent N$189,9 million, however.