Rabat - Misuse of the treasury’s special accounts, incorrect assessment of budget deficit, inaccurate calculations of state’s debts – the first president of the Supreme Council of Accounts, Driss Jettou, has denounced a number of “serious dysfunctions” in the application of the 2016 Finance Bill by the Executive of Abdelilah Benkirane.
Rabat – Misuse of the treasury’s special accounts, incorrect assessment of budget deficit, inaccurate calculations of state’s debts – the first president of the Supreme Council of Accounts, Driss Jettou, has denounced a number of “serious dysfunctions” in the application of the 2016 Finance Bill by the Executive of Abdelilah Benkirane.
During his first presentation in front of the two Parliament Houses on Tuesday, the head of the Court of Auditors uncovered catastrophic data on the functioning of several public departments, ministries, and public offices.
For Jettou, reviewing the government’s budget deficit assessment methodology is necessary. The head of the Court of Auditors points out that “the calculation of the deficit according to the adopted approach does not take into account several data,” mainly the “debts owed by the State to businesses under the VAT and SI credit, nor those relating to late payment.”
Jettou failed to hide his dismay at these serious infringements as he drew up the data analysis of the General Directorate of Taxes (GDT). The latter shows that “the total debts owed by the State to public institutions and enterprises in 2016 amounted to MAD 24.5 billion for VAT credit and MAD 7 billion in the form of arrears.”
Despite the efforts deployed by the GDT to clear these debts, their total amount “remains high,” noted Jettou. The president called for an urgent review of the procedure for calculating the deficit “according to the Organic Law of Finance and in accordance with the principle of sincerity” to give a transparent and faithful picture of public finances.
Treasury drowning in debts
Jettou recalled that the trend of treasury debt remained on the rise. “Treasury debt reached MAD 657 billion in 2016 against 629 billion a year earlier, recording an additional increase of MAD 28 billion, i.e. 4.5 percent,” he said.
Public debt, including that covered by the state guarantee, “also increased sharply from MAD 810.9 billion in 2015 to 850.5 billion in 2016, i.e. more than MAD 39.6 billion.”
The head of the Court of Auditors highlighted how the accelerated rate of indebtedness has continued “despite the favorable economic situation over the past four years,” calling for “greater efforts” to control the outstanding public debt and the debt ratio.
Misuse of Treasury’s Special Accounts
Jettou lamented the poor management of the Treasury’s Special Accounts (TSA), explaining that the number of TSAs increased to 74 in 2016 despite attempts to reduce and consolidate them under the Organic Finance Act of 2015.
Jettou criticized the the apparent abuse of these accounts, which are supposed to be used in exceptional cases by ministries, who instead exploit them for transfer flexibility from year to year.
The president deplored the colossal amounts fixed in these accounts. By the end of 2016, TSAs had a balance of more than MAD 122 billion. This large sum is the result of “poor projects management,” which according to Jettou raises many questions about the ministries’ budgetary management.
“The paradox is that TSAs have important unused balances while pressing and urgent needs face financing constraints,” Jettou regrets.