CBL grilled over “unsanctioned” payments

…as PAC probes M524 million processed outside IFMIS

Mohloai Mpesi

THE Central Bank of Lesotho (CBL) came under intense scrutiny yesterday after lawmakers accused it of processing M524 million in government debt payments outside the government’s Integrated Financial Management Information System (IFMIS).

The Public Accounts Committee (PAC) says the practice may have contributed to the adverse audit opinions repeatedly issued against the government.

The issue emerged yesterday during a tense PAC hearing where the CBL and the Ministry of Finance and Development Planning were summoned to respond to findings contained in Auditor-General ‘Mathabo Makenete’s reports for the 2023 and 2024 financial years.

The CBL delegation was led by Governor Dr Maluke Letete, while the ministry was represented by Principal Secretary Nthoateng Lebona.

Proceedings became heated after Deputy Accountant-General ‘Mabakubung Pitso disclosed that M524 million in debt payments had been processed outside IFMIS.

“The M524 million are debt payments that were made outside the system by the Central Bank of Lesotho. They are therefore adjusted in the books, as per submission to the Auditor-General for verification,” Ms Pitso said.

PAC chairperson, ‘Machabana Lemphane-Letsie, questioned the legality of the transactions, stressing that all payments from the Consolidated Fund should be processed through IFMIS.

“Is public debt allowed to make payments outside the IFMIS system?” she asked.

PAC member, Lephoi Makara, accused Dr Letete of contradicting evidence he had given before the committee a day earlier.

“Yesterday, without anyone asking him, he emphasised that there is no payment made outside IFMIS that he can attest to. The Governor must explain why he decided to lie, because yesterday he said the Central Bank does not pay outside the system,” Mr Makara said.

Ms Pitso confirmed that the payments should have gone through IFMIS.

“Every payment, especially those made by the Central Bank from the Consolidated Fund, has to be paid through IFMIS,” she said.

Dr Letete insisted that the CBL “pays within the system”, arguing that IFMIS is not a Central Bank platform.

However, Ms Lemphane-Letsie interrupted him, saying the issue was not ownership of IFMIS but why the bank was making payments that did not originate within the system.

“We are talking about IFMIS, which we know is not controlled by the Central Bank, but which the Central Bank is supposed to pay what is generated inside it. Answer how it is that the Central Bank makes payments that do not appear inside IFMIS,” she said.

Dr Letete urged the committee to exercise caution when dealing with public debt matters.

“Let’s understand these debt issues. If we make a mistake, we will put this country in trouble. When you have taken a loan as a person at the bank, that bank is going to ask you to repay the money,” he said.

His remarks further inflamed tensions, with committee members arguing that processing payments outside IFMIS had already placed the country in a precarious financial position.

Ms Lemphane-Letsie referred to earlier testimony by CBL official ‘Makutloano Setae, who had told the committee that Lesotho had an agreement with the International Monetary Fund (IMF) allowing withdrawals from the country’s Special Drawing Rights (SDR) account.

She challenged Dr Letete to produce the legal instruments supporting that claim.

“All we are saying is there is a query from the Auditor-General. Setae said there was an agreement with the IMF to withdraw the money — bring the law that supports that. The reason we can’t rescue this country is the attitude that whenever we raise issues, someone says we will put the country in trouble. The country is in trouble because of this adverse opinion from the Auditor-General,” she said.

Another PAC member, Thabiso Lekitla, also rebuked the governor, saying he had no authority to lecture the committee.

“The Governor is forgetting that he is not our boss — this is not the Central Bank. He can’t tell us that we will put the country in trouble here. Perhaps he should say that to those he manages,” Mr Lekitla said.

Ms Lemphane-Letsie went further, alleging that the Central Bank had played a central role in the government’s adverse audit opinions.

“The country is in trouble because of the Central Bank. I can’t forget that people who contributed to the stolen M50 million were taken for counselling and are back at the Central Bank. Having unbalanced books and an adverse opinion from the Auditor-General is because of the Central Bank. We will not allow you to threaten this committee — give us the documents so we can finish this. I think if we probe the (missing) M6.1 billion, it will be traced back to the Central Bank. There is no way the Central Bank can do as it pleases with the government account,” she said.

Dispute over legal authority

The committee later turned its attention to officials from the Ministry of Finance’s Debt Department, seeking clarity on the legal basis for processing payments outside IFMIS.

Debt Department official, ‘Mapoloko Seitlheko, said IFMIS had been unable to process foreign currency transactions during the 2020/21 financial year.

“In 2020/2021, IFMIS was not allowing us to issue instruction letters in foreign currency, and it was a challenge, hence we paid outside IFMIS,” she said.

Director of Public Debt, Khotso Moleleki, said the department had acted with the Accountant-General’s approval.

“We had the Accountant-General’s authority at that time,” he said.

However, when Ms Lemphane-Letsie demanded documentary proof of that authority, Mr Moleleki admitted none existed.

“Good, hold it there. You should bring that authority so she knows what she did was unlawful,” Ms Lemphane-Letsie said.

“It is not there,” Mr Moleleki replied.

The admission prompted disbelief from committee members, who questioned how he could claim authority that could not be substantiated.

As Mr Moleleki attempted to explain, Mr Makara cut him short.

“Every time I speak, you are harsh towards me. Please protect me, Chairperson,” Mr Moleleki pleaded.

Ms Lemphane-Letsie remained unconvinced.

“You can’t say you were given authority in 2021, and now it is no longer there. There is no way. Go to the office and bring it,” she said.

Ms Seitlheko then said officials from the Debt Department regularly met with the Office of the Accountant-General to discuss such operational challenges.

Another PAC member, Dr Tšeliso Moroke, demanded documentary evidence.

“We work with evidence and supporting documents. Where are the minutes?” he asked.

The committee then asked Ms Pitso directly whether she had authorised the Debt Department to process payments outside IFMIS.

“No, I did not provide such authority,” she replied.

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