As development corporation fails to issue subvention report
MASERU – Basotho Enterprises Development Corporation (BEDCO) has failed to issue out its employees’ salary budgets.
This comes after the Ministry of Small Business Development, Co-operatives and Marketing through its Principal Secretary (PS), Nonkululeko Zaly, asked the three divisions which fall under her ministry, namely; BEDCO, Lesotho Opportunities Industrialisation Centre (LOIC) and Partial Credit Guarantee Fund (PCGF) to submit salary budgets.
BEDCO is a parastatal of the government of Lesotho that was established by an Act of Parliament: BEDCO Act No 9 of 1980 (as amended) mandated “to promote the development of Basotho-owned enterprises and of indigenous entrepreneurial skills and for connected purposes.”
BEDCO fulfils this mandate through facilitating the establishment and growth of Micro, Small and Medium Enterprises (MSME)s by performing the following functions: Provision of business development support services, promotion and entrenchment of an entrepreneurial culture in Lesotho, facilitation of the establishment of incubation services, advocacy for an enabling regulatory framework and appropriate licensing regime for MSME and facilitation of access to finance and markets.
While the Ministry of Small Business is responsible for the development and implementation of policies that promote and facilitate establishment, operation, and growth of micro, small, and medium enterprises (MSMEs) and co-operations, with a view to contributing to employment creation, economic growth, and poverty reduction.
According to PS Zaly, BEDCO and two other bodies that fall under the ministry of small business were urged to submit salary budgets, however, only BEDCO was unable to submit its report, claiming it does not fall under the Ministry of Small Business, rather, it falls under Ministry of Trade and Industry.
“BEDCO also claimed that their salaries are confidential, so we therefore made a decision not to release BEDCO quarterly subvention until the report is available,” she said, adding that due to economy shrinkage, the ministry decided to give priority to salaries, that is why it needed salary budgets before handing over the subvention. She indicated further that there are rumours among the public that the ministry denied BEDCO or rather cancelled a list of people who won M100 000 from BEDCO competitions their prizes.
“I am here to inform the public that I, as the PS, do not know anything about the list, prize money and the competitions run by BEDCO, therefore, we are not going to give any funds to BEDCO,” she said. What’s even shocking, she continued, is that “some people are personally calling me asking for their money which I do not know anything about.”
In an exclusive interview with this publication, Communications, Marketing and Stakeholder Engagements Manager at BEDCO, Mpoi Lebakeng, confirmed that there is such issue at hand, however, they have reported it to the Minister of Small Business Machesetsa Mofomobe.
“The issue is already in the hands of the Minister of Small Business, that is all we could say for now.” On the other hand, Mofomobe released a statement that, his office received a letter from BEDCO dated August 3, 2022 requesting his intervention for BEDCO to receive the 2nd quarter Subvention to pursue its mandate.
“I am advised that a request for the release of the 2nd quarter subvention was made to your office. I am also advised that you then requested the Corporation to submit its first quarter expenditure report prior to your release of the subvention, and that such as report was submitted.
“Your office was, however, not satisfied by this report and requested the Corporation to submit its salaries budget backed up by the staff payroll,” he said.
He further mentioned that, he would like to bring attention to the fact that BEDCO, as a statutorily established public enterprise in terms of the Public Financial Management and Accountability Act 2011 (PFMA), subsists outside of the ministry though its political oversight lies with the ministry.
“The PFMA also clearly states the reporting requirements of public enterprises such as BEDCO which we should ensure compliance therein for smooth operation and governance. The reporting requirements of public enterprises such as BEDCO are specified in Section 43 of the PFMA and state that a public enterprise shall submit to minister, defined as the minister responsible for finance, an annual report,” the minister.
He also highlighted that, part 3 of Section 43 further states that: “a minister responsible for the public enterprise, after consultation with the Minister, may direct a public enterprise to furnish other financial reports from time to time for the effective management of the investment by Government in that enterprise, and shall furnish copies of the reports to the Minister.”
Mofomobe concluded that by highlighting that BEDCO’s reporting requirement is also regulated by Section 25 of BEDCO Act of 1980 as amended that also states that BEDCO shall furnish the minister with an annual report on its operations with audited financial statements.
“The accountability of effective financial management as is provided in both Acts is determined through the above-stated reporting requirements and not through the submission of the payroll. “In addition, the requirement for any additional financial information from BEDCO would need to come through my office as provided for in part 3 of Section 43 of the PFMA which has not been done in this case.
“I will, therefore, require you to provide a strong case why the ministry requires BEDCO’s payroll information which is otherwise confidential. In the absence of such a justification I direct that you immediately release the funds due to BEDCO as appropriated by the Government in the annual budget.”