Minister of Finance, Peggy Serame says an amount of P2 billion was injected into the COVID-19 Pandemic (Coronavirus) Relief Fund as seed capital.
She said all Special Funds are established in terms of Section 38 of the Public Finance Management Act, 2011. Similarly, COVID-19 Pandemic (Coronavirus) Relief Fund was established through Statutory Instrument No.38 of 2020.
Serame revealed that the funds were drawn from 11 Special Funds, namely; Human Resources Development, Roads Levy Collections, Guaranteed Loans Insurance; Levy on Tobacco and Tobacco Products; Tertiary Education Development; Housing; Revenue Stabilisation; Finance (Tourism Industry Training); Levy on Alcoholic Beverages; Road Traffic Fines; and Tourism Development.
“From these Special Funds, withdrawals were as follows: P625 000 000 from Human Resources Development Fund; P435 000 000 from Roads Levy Collections Fund; P220 000 000 from Guaranteed Loans Insurance Fund; P155 000 000 from Tobacco and Tobacco Products Fund; P150 000 000 from Tertiary Education Development Fund; P125 000 000 from Housing Fund; P100 000 000 from Revenue Stabilisation Fund; P50 000 000 each from
Finance (Tourism Industry Training) Fund, Levy on Alcoholic Beverages Fund; as well as Road Traffic Fines Fund; and P40 000 000 from Tourism Development Fund,” the Minister said.
Serame told Parliament this week that Section 40 (2) of the Public Finance Management Act, 2011 gives the Minister responsible for finance the power to withdraw funds from any Special Fund if considered expedient or to be in the best interest of the public. She explained that such act of authorising expenditure from any Special Fund for a purpose other than that contained in the written law or trust instrument establishing the Fund, is done through an order (that is, a Statutory Instrument).
She added that the Minister is empowered by Section 40 (3) of the Act, if he/she considers a provision (balance) in a fund inadequate, may issue additional regulations and provisions, to support management and administration of the fund. Serame revealed that there are currently 43 Special Funds, of which 21 have been reviewed and aligned with the requirements of the Public Finance Management Act, while 19 Fund Orders are under review, and three were established in 2024.
The minister highlighted that the total cash balance of the 43 Special Funds amounts to P5 626 144 896.74 as at 13th August 2024.
The minister noted that Section 42 (1) of the Public Finance Management Act, 2011 compels Administrator of a Special Fund to prepare, sign and transmit accounts of the Fund under their control to the Auditor General and Accountant General, two months after close of each financial year.
She stated that the Auditor General, through audits of the Annual Statements of Accounts (ASA), has audited the Special Funds up to the financial year ended 31st March 2022, except for four.
“The Annual Statements of Accounts for the financial years ended 31st March 2023 and 2024 have not been finalised by the Accountant General due to system challenges.
“Therefore, the accounts of Special Funds relating to those periods are yet to be finalised and submitted for audit. As for the four Special Funds that have not submitted audited accounts, procurement for services of independent auditors is ongoing at respective Ministries. “Their Fund Orders require the audit to be undertaken by an auditor appointed by the Auditor General,” the minister explained.
Serame stated that the management of Special Funds money has been largely entrusted to the Bank of Botswana as the Government banker, advisor and fiscal agent. In terms of its overall mandate, the Bank manages Government's monies including Special Funds' money.
She pointed out that in line with international best practice in managing Special Funds, there is a provision in every Fund Order stating that, "Any monies accruing to the Fund which is not required for immediate use shall be invested in Botswana in accordance with the objects of the Fund as the Accountant General may direct and interest from such investment shall accrue to the Fund".
Serame was responding to a question from MP for Selibe-Phikwe West Dithapelo Keorapetse, who asked the Minister to update Parliament on the amount of money drawn from Special Funds for the COVID-19 Fund Seed Capital, including how much the Government got from each Fund.
He also wanted the Minister to further state and explain the position of the Financial Law on management of Special Funds including repurposing (purposes other than which is stipulated in the Fund Order) the money from the fund; The number of Special Funds and current state of Special Funds including how much is in each fund.
She said all Special Funds are established in terms of Section 38 of the Public Finance Management Act, 2011. Similarly, COVID-19 Pandemic (Coronavirus) Relief Fund was established through Statutory Instrument No.38 of 2020.
Serame revealed that the funds were drawn from 11 Special Funds, namely; Human Resources Development, Roads Levy Collections, Guaranteed Loans Insurance; Levy on Tobacco and Tobacco Products; Tertiary Education Development; Housing; Revenue Stabilisation; Finance (Tourism Industry Training); Levy on Alcoholic Beverages; Road Traffic Fines; and Tourism Development.
“From these Special Funds, withdrawals were as follows: P625 000 000 from Human Resources Development Fund; P435 000 000 from Roads Levy Collections Fund; P220 000 000 from Guaranteed Loans Insurance Fund; P155 000 000 from Tobacco and Tobacco Products Fund; P150 000 000 from Tertiary Education Development Fund; P125 000 000 from Housing Fund; P100 000 000 from Revenue Stabilisation Fund; P50 000 000 each from
Finance (Tourism Industry Training) Fund, Levy on Alcoholic Beverages Fund; as well as Road Traffic Fines Fund; and P40 000 000 from Tourism Development Fund,” the Minister said.
Serame told Parliament this week that Section 40 (2) of the Public Finance Management Act, 2011 gives the Minister responsible for finance the power to withdraw funds from any Special Fund if considered expedient or to be in the best interest of the public. She explained that such act of authorising expenditure from any Special Fund for a purpose other than that contained in the written law or trust instrument establishing the Fund, is done through an order (that is, a Statutory Instrument).
She added that the Minister is empowered by Section 40 (3) of the Act, if he/she considers a provision (balance) in a fund inadequate, may issue additional regulations and provisions, to support management and administration of the fund. Serame revealed that there are currently 43 Special Funds, of which 21 have been reviewed and aligned with the requirements of the Public Finance Management Act, while 19 Fund Orders are under review, and three were established in 2024.
The minister highlighted that the total cash balance of the 43 Special Funds amounts to P5 626 144 896.74 as at 13th August 2024.
The minister noted that Section 42 (1) of the Public Finance Management Act, 2011 compels Administrator of a Special Fund to prepare, sign and transmit accounts of the Fund under their control to the Auditor General and Accountant General, two months after close of each financial year.
She stated that the Auditor General, through audits of the Annual Statements of Accounts (ASA), has audited the Special Funds up to the financial year ended 31st March 2022, except for four.
“The Annual Statements of Accounts for the financial years ended 31st March 2023 and 2024 have not been finalised by the Accountant General due to system challenges.
“Therefore, the accounts of Special Funds relating to those periods are yet to be finalised and submitted for audit. As for the four Special Funds that have not submitted audited accounts, procurement for services of independent auditors is ongoing at respective Ministries. “Their Fund Orders require the audit to be undertaken by an auditor appointed by the Auditor General,” the minister explained.
Serame stated that the management of Special Funds money has been largely entrusted to the Bank of Botswana as the Government banker, advisor and fiscal agent. In terms of its overall mandate, the Bank manages Government's monies including Special Funds' money.
She pointed out that in line with international best practice in managing Special Funds, there is a provision in every Fund Order stating that, "Any monies accruing to the Fund which is not required for immediate use shall be invested in Botswana in accordance with the objects of the Fund as the Accountant General may direct and interest from such investment shall accrue to the Fund".
Serame was responding to a question from MP for Selibe-Phikwe West Dithapelo Keorapetse, who asked the Minister to update Parliament on the amount of money drawn from Special Funds for the COVID-19 Fund Seed Capital, including how much the Government got from each Fund.
He also wanted the Minister to further state and explain the position of the Financial Law on management of Special Funds including repurposing (purposes other than which is stipulated in the Fund Order) the money from the fund; The number of Special Funds and current state of Special Funds including how much is in each fund.
