Section 112 of the Constitution states:
“ The responsibilities of the members of the National Assembly shall include the following :
(a) all members shall maintain the dignity of the National Assembly both during the sittings of the National Assembly and in their acts and activities outside the National Assembly;
(b) all members shall regard themselves as servants of the people of The Gambia, desist from any conduct by which they seek improperly to enrich themselves or alienate themselves from the people, and shall discharge their duties and functions in the interest of the nation as a whole and in doing so shall be influenced by the dictates of conscience and the national interest.”
The dictates of conscience and national interest compel me as Chairperson of the Public Enterprises Committee to give an explanatory memorandum followed by a statement on the operations of the Committee.
For your information, the Committee is charged with the responsibility of gathering facts and making findings with the view to proffer recommendations on all matters relating to Public Enterprises. This is the basis of its mandate; to scrutinise, consider and advise on all matters dealing with Public Enterprises as provided for by Standing Order 122.
The facts, findings and recommendations required must be time bound, relevant and responsive to the needs of the country. This is why the Committee has resolved, since February 2021, to alert all Public Enterprises to put an end to the backlog in the submission of their Financial statements by 31st March 2021 while working on a comprehensive report on the state of affairs of Public enterprises entitled: CONSOLIDATED REPORT OF THE PUBLIC ENTERPRISES COMMITTEE FOR THE FINANCIAL YEARS ENDED : 31ST December 2015-31ST December 2019 .
The Office of Auditor General has been encouraged to enter into dialogue with the Public Enterprises which claim that their statements for 2017 to 2019 are presented for audit without any conclusion of the exercise. The Committee members have facilitated and have been witnesses to the dialogue on the workplan between the respective Public Enterprises and the National Audit Office, on one hand, and some external auditors, on the other hand, to put an end to the backlog in submitting audited financial statements.
It is part and parcel of our workplan to facilitate the submission of financial statements, up to the year ended 31st December 2019 for inclusion in the consolidated report, covering 2015 – 2019.
We are poised to achieve the fundamental objective of putting an end to the backlog in submission of Activity report and Financial statement by ensuring the presentation, consideration of the Activity reports and financial statements of Public Enterprises for the year ended 2020 in order to integrate the finances of the Public Enterprises into the public financial structure of the state as required by Section 160 of the Constitution and Section 21 the Public Finance Act, 2014.
Hence, before 31st December 2021 our Committee is well positioned to put an end to the historic backlog in the submission of the Activity Report and Financial Statement stretching from the year ended 2015, the years before we assumed our mandate in 2017 as members of the Public Enterprises Committee.
Honourable Speaker, it is important to explain that this committee has been very much focused on mandate and knows what report is relevant to submit to this august body and when. Section 160 Subsection (1) (c) of the Constitution states:
The Auditor-General shall :
- at least once in every year, audit and report on the public accounts of The Gambia, the accounts of all offices and authorities of the Government of The Gambia, the accounts of the courts, the accounts of the National Assembly and the accounts of all Public Enterprises;”
- hence the annual audit and report on Public Accounts by the auditor general would not be complete unless the backlog in the submission of financial statements by Public Enterprises is put to an end. Furthermore Section 21 of the Public Finance Act, 2014 states: “The Minister shall, in accordance with Section 152 of the Constitution, prepare and lay before the National Assembly, the Appropriation Bill documents, at least thirty days before the end of each financial year.
Subsection 2 of the Section 21 further states that the Government revenue and other receipts include:
- tax revenues, including taxes on income and profit, domestic taxes on goods and service, taxes on international trade and transactions and other taxes;
- non-tax revenues, including profits from Public Enterprises, administrative fees and charges, fines and forfeitures, repayment of loans and other non-tax revenues, include sales of Public Assets;
- domestic and external grants;
- other revenues paid to the Government in accordance with any law, including departmental self-raised revenue, and
- domestic and external borrowing to financing the budget deficit.
Hence, without the timely submission of financial statements by Public Enterprises, the taxes and profits from Public Enterprises that should accrue annually to cushion revenue earnings of Government in order to meet expenditure outlays, could not be accurately determined.
In the same vein, without the timely submission of financial statements, the development budget will not register expenditure by Public Enterprises to finance development projects for Government, through unlawful or lawful executive orders, under the pretext of fulfilling corporate responsibility.
The Committee has taken cognisance of the mandate given to Public Enterprises under Section 3 of the Public Enterprise Act.
It reads: ‘’ The Principal objective of every Public Enterprise shall be to operate as a successful business, and to this end to:
- be as profitable and efficient as possible;
- operate in accordance with Government’s objectives for that sector; and
- be a good employer.”
These three thematic operational mandates inform the content of the consolidated report.
The report endeavours to highlight the statutory mandate, the profitability or efficiency in service delivery and the nature and characteristics of the Human resource component associated with each sector.
To be true to purpose, the Committee had to hold extraordinary sessions without any compensation to ensure that we put an end to the backlog and facilitate the integration of the accounts of the Public Enterprises into the Central nervous system of the Public Finance System of the country.
The comprehensive report which aims to be a template for consolidated reporting on the activities and financial statements of Public Enterprises is work in progress.
It will be followed by the report on the activities and financial statements of Public Enterprises for the year ended 31st December 2020, whose due date is 31st March 2021, before 31st December 2021, to put an end to the backlog and establish a template for annual reports on the activities and financial statements of Public Enterprises, to fill a vacuum that existed since independence.
This is the strategic mandate of the Public Enterprises Committee.
Honourable speaker, it would be of interest to the members to give an overview on how the Committee conducted its work.
- Operationalisation of the Functions of the Committee
The Committee engaged the Auditor General, Subject-Matter-Specialists (SMS) and the Directorate of Public Private Partnership and Public Enterprises of the Ministry of Finance and Economic Affairs, in order to benefit from professional competences and draw lessons from the content of a diagnostic study on Public Enterprises. This brainstorming exercise enabled the Committee to identify the correlation between weak executive, legislative and independent oversight and the increase in liabilities and losses of Public Enterprises, skyrocketing in indebtedness, erosion of sector worth undermining the productive base of the sector. The ultimate outcome is to incur arrears in the payment of public enterprises’ taxes and incapacity in the payment of dividends.
To ensure robust parliamentary oversight, members benefited from capacity building on accepted accounting and Auditing principles, the responsibilities of auditors, the significance of submitting balance sheet, income statement, statement of changes in equity and cash flows as financial statements for review, the basis of expressing audit opinions and the strategic significance of the management letter in identifying gaps in policy making, governance, management and operations of Public Enterprises
The Committee developed its competence in scrutinising Audit opinions and management letters through a hearing that obliges the Board and Management of an enterprise to answer to audit observations in the Management letter which could easily form the basis of a performance contract for a subsequent year.
- Proceedings of the Committee
- Presentation of Reports
The Board exercises leadership by directing Management to give comprehensive presentation of Activity Report and Financial Statements before the Committee in the presence of the auditor general or a representative, Subject matter specialists, the Director General of the Gambia Public Procurement Agency or a representative. The external auditors or the Office of the Auditor General would read the audit opinion and management letter exposing all the gaps and risk ratings of the shortcomings in maintaining the enterprise as a viable entity.
The GPPA procurement compliance rating is then delivered to complete the presentation exercise. Members and subject matter specialists then retire to study the reports for consideration.
- Consideration of Reports
The members raise question on relevant portions of the Financial Statement and Activity Report which require clarification or further elucidation.
Once allquestions are raised and responded to, the Committee approves the reports as a fair view of the true state of affairs of a public enterprise, regardless of whether the view is grim or gleam.
It is these adopted reports which provide the Committee with the facts necessary to do our findings and make recommendations.
- List of Public Enterprises under the PEC
- GAMWORKS – Status still undecided
Honourable Speaker, the statement of the Chairperson incorporated in a report that is still work in progress will be laid before the Assembly , with your permission , in due course .
The Committee will never betray the trust bestowed on it by this Assembly.