Finance Ministry grilled over M119 million Treasury Bills discrepancy 

Mohloai Mpesi 

THE Ministry of Finance and Development Planning’s Department of Debt has come under fire after failing to account for a M119.64 million discrepancy in the government’s treasury bill balances. 

The department appeared before Parliament’s Public Accounts Committee (PAC) this week to answer queries raised in the Auditor-General’s reports for the financial years ending March 2023 and March 2024. 

PAC chairperson, ‘Machabana Lemphane-Letsie, said auditors had flagged an unexplained movement of M119.64 million after the Treasury Bills balance dropped from M867.54 million on 1 April 2023 to M747.90 million on 31 March 2024, without any record of new issuances or repayments to justify the decrease. 

According to Auditor-General ‘Mathabo Makenete’s report, the unexplained movement meant the balances did not accurately reflect the government’s future repayment obligations. 

“The Treasury Bills opening balance of M867.54 million on 1 April 2023 decreased to M747.90 million on 31 March 2024, without an indication of newly issued bills or repayments during the year,” the report stated. 

“The unexplained movement might cause an understatement of the Treasury Bills balance and lead to an inaccurate forecast of future repayments. 

“Furthermore, the balances do not reflect the government’s true liabilities regarding Treasury Bills.” 

Responding to the committee, Debt Department official, ‘Mapoloko Seitlheko, maintained that the department had correctly carried forward the previous year’s closing balance. 

“When we closed our books for the 2023 financial year, we reported domestic debt as M867.7 million, as reflected in the Auditor-General’s report for March 2023. 

“The closing balance under Treasury Bills was M867 542 200. The balance we closed with is the same balance we opened the following financial year with,” she said. 

However, Ms Lemphane-Letsie pointed out that the issue was not the opening balance but the unexplained reduction reflected in the 2024 financial statements. 

Ms Seitlheko conceded that the department had failed to provide supporting movements because it depended on information supplied by the Central Bank of Lesotho (CBL). 

“On this one, where the Auditor-General said we did not provide reasons and movements, she is correct. We did not provide the movements. 

“The reason is that we work together with the Central Bank on domestic debt. The Central Bank has the mandate to manage domestic debt. 

“We have had a challenge in past years because the monthly reports we received did not show the closing balances on repayments and how much was issued during the period. 

“We met with the Central Bank to discuss this challenge so they could provide cleaner reports that would enable the balances to reconcile. The Central Bank has since promised to assist in that regard,” she said. 

But CBL Financial Markets representative, Nkhahle Marumo, disputed suggestions that the bank had not supplied the necessary information. 

“At the beginning of every year, we prepare an auction calendar showing all Treasury Bill auctions to be conducted by the Central Bank. 

“We also provide a redemption list showing what is due for payment throughout the year. Whenever auctions are conducted or payments are made, daily reports are issued and sent to the Accountant-General. We also provide monthly debt status reports,” he said. 

PAC member, Lephoi Makara, questioned why the ministry still could not reconcile the figures. 

“The Central Bank indicated that they gave you the movements. Why can’t we get to M867.5 million?” he asked. 

Director of Public Debt, Khotso Moleleki, said the department had requested the CBL to provide more detailed explanations because it does not participate in Treasury Bill auctions. 

“We have asked our colleagues at the Central Bank to explain some of these issues better because they are on the ground. 

“As the Debt Department, we do not intervene in how auctions are conducted. We are not involved in monetary policy. However, when payments are made, they provide us with reports so that we know about the movements,” he said. 

Ms Lemphane-Letsie insisted that the committee was not interested in verbal explanations but documentary proof. 

“The Auditor-General says there is no explanation. Her query is that there was M867 million, which decreased to M747 million without an indication of newly issued bills or repayments during the year. We want you to explain what caused the difference. 

“We want the documents supporting the decrease in the balance. What you have explained is not backed up by evidence,” she said. 

When Ms Seitlheko attempted to explain that the CBL’s reports excluded auction defaults, Ms Lemphane-Letsie interrupted her. 

“Let me stop you right there. We don’t need an explanation. You explained to the Auditor-General and she was not satisfied. 

“We are here to resolve a query. There is M867 million and M747 million. Show us what caused the difference. Don’t explain, just point us to the evidence. 

“There is nothing acceptable about the fact that the Debt Department could not explain this, yet at the end of the month you still get your salary,” she said. 

Mr Moleleki acknowledged the committee’s concerns, admitting that the department should have submitted documentary evidence instead of explanations. 

“I understand and appreciate that what we were supposed to give was evidence instead of explanations,” he said. 

Background 

The PAC’s interrogation of the Debt Department comes amid growing concern over financial accountability within the government. 

The Auditor-General is constitutionally mandated to audit the accounts of all the government ministries and departments, while the PAC examines those audit findings and summons accounting officers to explain irregularities before Parliament. 

The Central Bank of Lesotho serves as the government’s fiscal agent, managing the issuance of Treasury Bills and Treasury Bonds through periodic auctions on behalf of the Ministry of Finance and Development Planning. It is also responsible for providing the Debt Department with regular reports on issuances, redemptions and other movements in the government’s domestic debt portfolio. 

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