In this thread i will give details of the amount of Corruption that exists within the Transitional federal Goverment wich sharif Ahmed is currently the President.
It will be a 3 parts report. So now i will start with part 1.
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Source: http://www.somaliareport.com/index.php/ ... ive_ReportThe findings presented here are sourced from a recently issued report, Audit Investigative Report-2011, by former TFG financial officer Abdirazak Fartaag.
With the release of this controversial private report, Fartaag issues his third straight annual look at TFG finances.
From April 2009 until April 2011, he served as the head of a newly created Public Finance Management Unit (PFMU) under former TFG prime ministers Mohamed Farmajo and Abdirashid Shermarke. Shermarke resigned on September 21, 2010 after disagreements with President Sharif. Fartaag was fired shortly thereafter in January of 2011.
In June 2011 Fartaag released an audit showing exactly where $300 million had gone under the the TFG. Although many Somalis insisted their government was not completely honest, it was Prime Minister Sharmarke who created the PFMU to track the $20 million in funds collected by the TFG and figure out where they went. In 2010, Fartaag did the first internal audit in twenty years. What he found was disturbing.
In 2009 the TFG collected about $8.2 million from taxes and $11 million from foreign donors. After investigating what he thought were simple cash input and outputs, Fartaag realized that the major amount of money collected by the TFG was almost ten times higher when foreign donor funds are included.
Fartaag's original report caused a sensation but not much change. A ten man anti-corruption committee was created in January of 2012 but little has been heard from them. Somalia's reputation as the "most corrupt" nation was also bolstered in the most recent Transparency International Corruption Perceptions Index. None of these organizations, including the TFG, have provided anything close to the detailed documents gathered by Fartaag upon which he makes his case.
After Fartaag left government, he became a whistle blower and continues to use internal documents to publish his latest report that shows a temporary Somali government without any fiscal restraint or oversight. His official PFMU 2009-2010 document revealed a government with access to not just only $8 million in taxes and $11 million in UN funds but $300 million dollars once donor funds were included.
His conclusions back then were:
i. Gross public financial mismanagement;
ii. Large scale misappropriation of public funds;
iii. Large scale misappropriations of donor funds (Arabian);
iv. Unethical and unacceptable professional negligence;
v. Financial intimidation at the Executive’s office compromising transparent and accountability;
vi. Concealment (under) collection of government budget revenue receipts;
vii. Concealment (under) payment of outstanding government expenditure receipts
That was a year ago and he continues to audit the TFG and present his results. As a private individual and he puts blame squarely with Somalia, not the donors. On Saturday, Fartaag presented the report card to an audience of Somali stakeholders and politicians at Nairobi’s Grand Regency Hotel. Although the conference hall was filled to capacity, few Somali politicians were in attendance.
“I met with a Somali MP (Member of Parliament) the day before the presentation,” Fartaag said with a sly grin. “He asked me if my allegations implicated the Minister of Finance. I told him ‘yes,’ and he didn’t show up to the presentation the next day. This shows that loyalties still lie with individuals, not the government.”
“Fartaag,” he explained to me, is a nickname handed down from his father, meaning “one who raises his finger.” To judge from his animated gesticulating at the podium, it is a sobriquet he has not merely inherited, but earned for himself.
The presentation was in Somali using a number of financial tables of numbers projected on the screen behind him. Although the content of his slides were just numbers, he had the audience hanging on his words.
Fartaag’s 50-plus page audit painted a picture of corruption, malfeasance, and outright theft facilitated by an out of control temporary government funded almost entirely of unmonitored cash transactions.
In fairness, Somalia does not have traditional banking or accounting institutions. Troops, civil employees and contractors must be paid in cash, by halwallas or money transfer firms like Dahabshiil. The last time he made similar accusations, the TFG reacted angrily pointing out Fartaag's numbers were not derived from an official audit and presented with no attempt to work with the TFG's auditor general.
A Government That Runs on Cash
Fartaag makes the accusation that the Somali Central Bank, the repository for all TFG revenues and most international financial assistance, exists as a de facto personal bank account for the TFG’s top executives.
“There is no accountability, no rules at all,” Fartaag explained to Somalia Report over coffee following his presentation. “Civil servants aren’t paid ‘salaries,’ they’re given ‘allowances,’ which are not paid with any regularity. What happens is that once a civil servant hasn’t been paid for a while, he goes to the PM or President—whomever he has personal connections to—who will then write him a letter asking the Central Bank to pay him X amount of dollars.”
“80% of the budget is paid out in this way—transfers of cash to individuals,” he explained.
In other words, $37 million of a total of $45 million spent on ministerial salaries and administrative expenses (by far the largest item in the TFG budget) were dispersed to gofers sent on behalf of various ministries, often without the authorizing officer properly identified. Records to which Somalia Report was granted access showed withdrawals as high as $800,000 in cash being handed over to individual recipients.
In one month, over $750,000 was paid to employees at the Office of the President alone.
Cash payments handed out to individuals, January-June 2011
Cash payments handed out to individuals, July-December 2011
As for what happens to the money after it’s withdrawn, let’s just say that the TFG’s accounting safeguards are about as sophisticated as what one would find on the average ATM machine: astonishingly, no systematic records ore kept of how the money is spent.
Donor Cash
And that's just the cash that actually makes it into the Central Bank coffers. The TFG receives bilateral assistance from the United Arab Emirates (UAE) of around $5 million per month, in cash. Every month, TFG officials fly to the UAE, where they are literally handed $5 million in a suitcase. Where the money goes from there is unclear.
Only two months in 2011 show Central Bank deposits for the full $5 million. In January, UAE deposits totaled just over $1.5 million. In October, only $130,045. Whether a remnant moral compunction or outright shame compelled this piddling concession to financial propriety is a question not answered by the records.
In total, of the $60 million donated by the UAE to the Somali government, only $34 million is accounted for in Central Bank records.
The government of Sudan has also reportedly pledged the TFG $1 million per month, piped directly into the office of the president. Only one deposit of $800,000, registered on April 9, appears in Central Bank records.
What appears to be systematic, monthly looting may also be trumped by one-time opportunistic thievery. Such was the case during the Salama Fikira incident, in which six private security contractors were arrested in Mogadishu's Aden Adde airport on May 24, 2011, while en route to do a pirate ransom drop.
The $3.6 million in ransom money was subsequently confiscated, and while Central Bank records show that a signed banking slip for the deposit was issued, the cash mysteriously disappeared somewhere along the way from the teller window to the vaults. ($3.6 million wasn't quite adequate, apparently, and Salama Fikira was extorted for a $100,000 "fine" to spring their employees from 15-year sentences in Somali prison).
Requests for comment from the TFG Prime Minister and Finance Minister were not immediately answered.
Joint Financial Management Board
One of the stated purposes of the upcoming London Conference on Somalia, which takes place on Thursday, is to deliver "a new international approach to Somalia."
Over the last year, the "two Sharifs," TFG President Sheikh Sharif Ahmed, and parliament speaker Sharif Hassan, have been able to run roughshod over the UN and its special representative to Somalia, Augustine Mahiga. In August of last year the two Sharifs hijacked the "transition" by jetting off to Uganda and unilaterally extending their terms in office for one year, establishing a two-headed rulership under what became known as the Kampala Accord. The Kampala Accord has led to the Garowe meetings that have forged a caretaker, but semi-permanent Somali government. This disregard for democratic and rule of law seems to be reflected in the handling of what should be public not private funds.
Fartaag is hopeful that a proposed caretaker system called the "Joint Financial Management Board" will help.
"I think this report is going to make a big difference in London," he said. "The British are out to help Somali citizens by improving transparency and accountability."
"This is information they cannot get anywhere else."
The Joint Financial Management Board proposed by the British will begin operating after the national elections scheduled for August. So far, however, the Board is not much more than a bullet point on the conference agenda.
When asked the motivation behind his potentially dangerous challenge to Somalia's entrenched political kleptocracy, Fartaag was quick to answer.
"Somalis from the diaspora only want to talk about how the international community has got things wrong in Somalia," he said. "This is my main point: the problem doesn't lie with the international community at all. It's us."
TO BE CONTINUED
In Part II of Jay Bahadur's exclusive report: Briefcase Ministries, Somalia Report will take an in depth look at the TFG’s ministries-in-name only.
Look at the detailed reports. above you.I would like to see some evidence. Its very hard to accuse a broke government of corruption. Hardly any aid goes directly to TFG. You should also consider reporting on the corruption of UN, Aid agencies and other NGOs. Somalia recieves around $1 Billion a year, that money doesn't go beyond Nairobi in most cases.
Source: http://www.somaliareport.com/index.php/ ... ive_Report
Welcome to Part II of Somalia Report's three-part series exposing financial corruption and mismanagement within the Somali Transitional Federal Government (TFG). The findings presented here are sourced from a recently issued report, Audit Investigative Report-2011, by the former head of the TFG's Public Finance Management Unit, Abdirazak Fartaag.
In Part I, Somalia Report revealed how the Somali Central Bank operates as a virtual ATM for TFG ministries, issuing unaccounted for cash withdrawals in amounts as high as $800,000.
In Part II, we take a look at the TFG’s makeshift annual budget, its revenue shortfalls, and its "briefcase ministries."
One of the main themes of Abdirazak Fartaag’s report is the Somali government’s woeful inefficiency at collecting its own revenue, relying on international donors to fund 70% of its annual budget (see below).
At the beginning of 2011, the TFG presented its preliminary budget, which laid out its expected revenues and expenditures for the year.
TFG preliminary budget January-June
TFG preliminary budget July-December
Over the first six months of the year, Fartaag’s audit reveals, revenue collection fell almost $18 million short of the predicted $49 million. From July to December, $23 million short. In total, the TFG’s actual revenue stood at $58 million, almost $42 million less than the amount predicted going into 2011.
A large proportion of this shortfall was due to the $26 million in bilateral aid from the United Arab Emirates and Sudanese governments that simply disappeared, as detailed in Part I.
Another pipe draining the bucket was the gap in expected taxes collected through Mogadishu port and Aden Adde international airport, which represents virtually all of the domestic revenue generated by the TFG.
While the preliminary budget predicted $27 million in port and airport revenue, the final amount raised over the course of 2011 stood at just $17 million (oddly, although the preliminary budget categorizes port/airport taxes as “tax revenue,” in subsequent records the revenue is tabulated as “non-tax revenue”).
Fartaag suspects that much of the tax revenue levied at Mogadishu’s port and airport failed to reach the Central Bank of Somalia, though his report supplies no proof in this regard. But the TFG's own internal records indicate that at least some of the money was miscounted, as evidenced by an internal audit of port and airport revenue (see below left).
Port revenues and police audit, January to June 2011
While Ministry of Finance and Somali Central Bank accounting records $12.6 million in taxes collected from January to June, an independent police audit shows $8.4 million raised over the same period. As far as Somalia Report is aware, no internal inquiry has been undertaken to address the $4.2 million discrepancy between the two accounts.
Stranger still is the fact that the audit was conducted by a police agency and not, say, the Auditor General. Interestingly, the police audit includes a stream of revenue entirely omitted from the Central Bank/Ministry of Finance tally: $30,485 collected from the Mogadishu's KM50 airport. Given that the airport was located squarely in Shabaabistan until the Islamist group’s August withdrawal from the capital, precisely how the facility managed to generate income for the TFG is somewhat of a mystery.
One possible (if speculative) explanation may lie in the fact that KM50 is reportedly administered by a private interest based in Nairobi, which operated the facility under al-Shabaab and continues to do so under the TFG administration.
The same party allegedly pays SoSh 1 billion (approximately $30,000) per month to the TFG for the rights to collect revenue, according to information provided to Somalia Report. This kickback, not surprisingly, does not show up in the police audit.
Although Fartaag supplies no hard evidence of the misappropriation of port revenues, a quick comparison with two of Somalia’s other major ports suggests that the Mogadishu facility generates far less than its potential.
Bosaso port, which does not even possess Mogadishu’s deep water capability, generates nearly all of the Puntland government’s annual revenue (typically between $15-$20 million). Somaliland’s Berbera deep water port reportedly earns around twice that figure.
That Mogadishu’s port managed to raise tax revenues of only $17 million in 2011 should raise more than a few suspicions.
Port/airport revenue July-December
Perhaps as a result of the budgetary shortfall, civil servant salaries were not paid for the last three months of 2011—which is somewhat understandable, since bureaucrat salaries are not so much as earmarked in the budget.
Although the TFG has come along since President Sheikh Sharif Ahmed's cronies reputedly scrawled out Somalia’s 2009 budget on the back of a luxury hotel napkin, the 2011 version is not yet quite up to international specs.
The TFG's "Secret" Military Budget
A major omission in both the TFG budget as well as in Fartaag’s audit is the Pricewaterhouse Coopers (PwC) account, a procurement and management fund set up to manage US monetary aid to Somalia. $25 million has passed through the fund since its inception in June 2009, according to a source close to the government.
The PwC fund represents Somalia’s military budget, paying the $100 per month salaries of the approximately 7,000 militiamen on the TFG payroll, as well as funding pro-government Radio Mogadishu, Somalia TV, and capacity training for the Ministry of Finance.
The operation, as Somalia Report has detailed in depth, is not a smooth one; after each pay cycle the payroll is revised and updated, an arduous process, and salaries are routinely paid months late.
It is perhaps understandable that the preliminary TFG budget would ignore the PwC fund, as the money is not managed through the Central Bank and TFG ministries.
Why, then, is $18.7 million in multilateral aid included in the preliminary budget?
Fartaag assumes in his report (perhaps incorrectly) that the money represents funding for the United Nations Development Program’s (UNDP) police training initiative, primarily paid for by the Japanese, although according to Somalia Report’s own reporting only $10 million was donated by the Japanese government in 2011 to cover police training.
If at least over half of multilateral assistance consists of UNDP—and thus is distributed through UN channels, not Somali government institutions—then it is conspicuously inconsistent that the preliminary budget would include this item yet omit the PwC purse.
Briefcase Ministries
TFG ministries, as Fartaag's report portrays them, barely generate any revenues, provide virtually no services, and collect transfer payments through a seemingly random pattern of cash handouts paid to individuals, as detailed in Part I of this series.
“Every one of our ministers is a briefcase minister,” Fartaag told Somalia Report. “They exist to collect their per diems and then go stay in the best hotels in Nairobi.”
“Then they play to the international galleries, saying ‘We can’t do anything because the international community isn’t doing its job.’”
Herein lies an obvious criticism of Fartaag’s report, namely his expectation of TFG ministries to have delivered services back when their employees were more occupied with dodging al-Shabaab mortars during the better part of their waking hours.
For most of last year, TFG ministers were more concerned about being pushed into the sea by the Islamist group—then in control of most of the capital—than about providing pregnancy screenings or free textbooks. How were ministries supposed to collect revenue, let alone provide services, under these circumstances?
To their credit, TFG ministries are attempting to fill in some of the space left by the retreating militants. Drawing on $1.8 million earmarked by the Danish government, the TFG has plans to reoccupy and refurbish five buildings previously owned by the former Somali government, including three hospitals. Though the money has not yet been spent, forced mass evictions have already been carried out in preparation, leaving hundreds of families homeless, some of whom had been living in the abandoned buildings for decades.
But given that a total of just over $1 million was spent on providing social services in 2011 (see below), it takes a healthy dose of optimism to envision how the Ministry of Health will be able to staff and fund the operation of even three hospitals once the modest Danish seed money is expended.
A quick glance at budget expenditures reveals how little was available for provision of services. Administrative costs—salaries, travel, office supplies—made up by far the largest drain on the TFG budget, over $46 million ($23,646,838 from January to June; $22,278,003 from July-December) out of the total budget of around $58 million.
That’s a lot of pen and pencils.
By contrast, social services—encompassing the ministries of education, health, and women’s services—received a total allocation of $1.07 million over the course of the year (and government records do not reveal what even this negligible sum was spent on).
Expenditure on social services, January to June 2011
Expenditure on social services, July to December 2011
According to information obtained by Somalia Report, each ministry is supposed to be allocated a boilerplate monthly transfer payment of $12,000 to cover salaries and expenses. Beyond this, additional funds are dispersed on an arbitrary, case-by-case basis, handed over in cash to sundry clerks sent with letters signed by the prime minister, finance minister, or other high ranking officials.
In January, for instance, the Ministry of Education received $2,000 in cash handovers from the Central Bank. In March, $33,348. Why the ministry's expenditures would vary by over a factor of 15 from month to month is not explained through any official policy.
Requests for comment from the TFG prime minister and finance minister have not been returned.
Start Small
The United Nations Children’s Fund (UNICEF) estimates that only about one in five school age children in Somalia receive primary schooling, with education exclusively provided by NGOs and religious organizations.
While it is not practical in the near future for the Ministry of Education to construct, fund, and staff state-owned schools, financing the the expansion of NGO-administered schools would be a quick and simple way for the TFG to begin performing the semblance of the functions of a national government.
Of course, funding would necessitate raising revenues, far more than the $13,440 collected by the ministry over the course of the entire year. Sources of potential revenue collection will be addressed in Part III of this series, to follow.
If the ultimate goal is to sell the concept of democracy and good central government to the Somali people (the UN roadmap on ending the transition speaks, with blithely naïve optimism, of possibly holding direct elections within a four year time frame), then holding the TFG responsible for providing some kind of services—in Mogadishu, at the very least—to its supposed constituents might be a good first step towards establishing its legitimacy.
“We’re given money to build schools, hospitals. Who is stopping us from building them?” Fartaag told Somalia Report. “Why can’t we revamp our airport? Just look at it!”
The Somali people might well be asking the same questions.
Note: Abdirazak Fartaag is funded by various relatives living in Kenya and the United States, who have requested that their anonymity be preserved.
Corruption exists everywhere and to fight corruption, one must first expose it to the public.Seculars in their true nature ...nothing to see here...move along now!
Thank you, I will study the report in more details.
Tribal mumbo jumbo
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