Moroccos Court of Auditors Reveals Dysfunctions of the Government Finances

Rabat – Unreported debt, plunging deficit, subpar revenues, lack of transparency, misuse of the treasury’s special accounts. These are the dysfunctions revealed by the latest report of the Court of Auditors on the execution of the 2016 Finance Act. The Court of Auditors hits once again, and this time, it’s the Ministry of Finance who’s on the hot spot. In its recent report, Driss Jettou, head of the Court of Auditors, chides the ministry for the unreliable information it communicates to the public and to the government. For the Court of Auditor, the ministry has an accounting issue. According to the report, the budget deficit communicated by the Ministry of Finance, estimated at MAD 40.6 billion, exclude some of the state’s debts accumulated in 2016. READ ALSO: Court of Auditors Uncovers ‘Serious Dysfunctions’ in Moroccan Financial ManagementAccording to the institution headed by Jettou, the ministry omitted the debts the government owes to companies in terms of VAT and corporate tax credits. “The VAT receipts are considered as definitively acquired while the Treasury will be called upon to return part of it to the loaned companies,” states the report.In fact, the court estimates that the state owes MAD 28.6 billion in VAT loans to companies and public entities. Moreover, besides VAT, the state’s debts vis-à-vis certain public institutions, namely OCP, ADM, ONEE, ONCF, ONDA and RAM, amount to MAD 5.5 billion. These debts relate to corporate tax, commitments made by the executive under contracts, as well as commercial services.READ ALSO: Mohamed Boussaid Defends Govt. Budget Calculations Against Criticism by Court of AuditorsIn addition, the ministry’s presentation of the overall budget does not provide information on the real weight of taxation: showing only the net tax revenue, it excludes the Value Added Tax, the Corporation Tax and the Income tax. Miscalculating the budget deficit is not the only dysfunction revealed by the court. The management of the Treasury’s special accounts was also on the agenda, and this time, the Court of Auditors didn’t mince its words.READ ALSO: Court of Auditors Says Govt. Employees Make Too Much MoneyBest known as the “state’s black boxes,” these special accounts are support budgets dedicated to specific operations that cannot be included in the general budget of the state.  The 2015 organic law relating to the Finance Act introduced new management rules destined to better define the field of intervention of these black boxes in order to control their use in certain economic and social government programs.READ ALSO: Moroccan Court of Auditors Accuses Municipality Presidents of EmbezzlementHowever, the Court of Auditors revealed that a number of these black boxes are used to finance ordinary operations, completely dissociated from their defined purpose. Moreover, in some cases, they are used to finance officials’ salaries, bonuses and allowances, whereas these expenses should be budgeted in ordinary conditions. Some of these accounts present significant positive balances on a structural level, which according to the court, would require a review of the compliance with their revenues and actual needs. By the end of 2016, the financial balance totaled MAD 4.3 billion, while the cumulative balance amounted to MAD 122.7 billion.

Leave a Reply

Your email address will not be published. Required fields are marked *