CERTIFICATE OF AUDIT & REPORT 2022-23 Mauritius

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Republic of Mauritius

NATIONAL AUDIT OFFICE

CERTIFICATE OF AUDIT &

REPORT OF THE DIRECTOR OF AUDIT

ON THE ACCOUNTS OF THE GOVERNMENT

FOR THE FINANCIAL YEAR 2022-23

FEBRUARY 2024
NATIONAL AUDIT OFFICE

CERTIFICATE OF AUDIT &


REPORT OF THE DIRECTOR OF AUDIT

ON THE ACCOUNTS OF THE GOVERNMENT

FOR THE FINANCIAL YEAR 2022-23


NATIONAL AUDIT OFFICE

Making a Difference to the Lives of Citizens


CONTENTS
Page
FOREWORD BY THE DIRECTOR OF AUDIT
IMPROVING ACCOUNTABILITY IN MINISTRIES AND GOVERNMENT III
DEPARTMENTS
LIST OF AUDIT AREAS AND KEY FINDINGS XV
1 CERTIFICATE OF AUDIT
PART I – REPORT OF THE DIRECTOR OF AUDIT ON THE ACCOUNTS OF THE
GOVERNMENT
2 ANNUAL STATEMENTS – TREASURY 1
3 THE JUDICIARY 43
4 PRIME MINISTER’S OFFICE, MINISTRY OF DEFENCE, HOME AFFAIRS AND 45
EXTERNAL COMMUNICATIONS AND MINISTRY FOR RODRIGUES, OUTER
ISLANDS AND TERRITORIAL INTEGRITY
DEFENCE AND HOME AFFAIRS 45
CIVIL AVIATION 57
POLICE SERVICE 59

5 DEPUTY PRIME MINISTER’S OFFICE, MINISTRY OF HOUSING AND LAND 73


USE PLANNING AND TOURISM
HOUSING AND LAND USE PLANNING 73
TOURISM 87
6 VICE-PRIME MINISTER’S OFFICE, MINISTRY OF EDUCATION, TERTIARY 89
EDUCATION, SCIENCE AND TECHNOLOGY
7 VICE-PRIME MINISTER’S OFFICE, MINISTRY OF LOCAL GOVERNMENT AND 121
DISASTER RISK MANAGEMENT
LOCAL GOVERNMENT AND DISASTER RISK MANAGEMENT 121
MAURITIUS FIRE AND RESCUE SERVICE 135
MAURITIUS METEOROLOGICAL SERVICES 141

8 MINISTRY OF LAND TRANSPORT AND LIGHT RAIL, AND FOREIGN AFFAIRS, 145
REGIONAL INTEGRATION AND INTERNATIONAL TRADE
LAND TRANSPORT AND LIGHT RAIL 145
NATIONAL LAND TRANSPORT AUTHORITY 156
FOREIGN AFFAIRS, REGIONAL INTEGRATION AND INTERNATIONAL 171
TRADE

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9 MINISTRY OF FINANCE, ECONOMIC PLANNING AND DEVELOPMENT 183


FINANCE, ECONOMIC PLANNING AND DEVELOPMENT 183
MAURITIUS REVENUE AUTHORITY 193
CUSTOMS DEPARTMENT 203
CORPORATE AND BUSINESS REGISTRATION DEPARTMENT 215
REGISTRAR-GENERAL’S DEPARTMENT 227

10 MINISTRY OF ENERGY AND PUBLIC UTILITIES 231


11 MINISTRY OF SOCIAL INTEGRATION, SOCIAL SECURITY AND NATIONAL 233
SOLIDARITY
SOCIAL INTEGRATION DIVISION 233
SOCIAL SECURITY AND NATIONAL SOLIDARITY DIVISION 235

12 MINISTRY OF INDUSTRIAL DEVELOPMENT, SMEs AND COOPERATIVES 247


SMALL AND MEDIUM ENTERPRISES DEVELOPMENT 247
COOPERATIVES DEVELOPMENT 249

13 MINISTRY OF ENVIRONMENT, SOLID WASTE MANAGEMENT AND CLIMATE 255


CHANGE
ENVIRONMENT AND CLIMATE CHANGE 255
SOLID & HAZARDOUS WASTE AND BEACH MANAGEMENT 270

14 MINISTRY OF FINANCIAL SERVICES AND GOOD GOVERNANCE 285


15 ATTORNEY-GENERAL’S OFFICE, MINISTRY OF AGRO-INDUSTRY AND FOOD 289
SECURITY
OFFICE OF THE SOLICITOR-GENERAL 289
OFFICE OF THE DIRECTOR OF PUBLIC PROSECUTIONS 291
AGRO-INDUSTRY AND FOOD SECURITY 293
16 MINISTRY OF YOUTH EMPOWERMENT, SPORTS AND RECREATION 327

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CONTENTS
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17 MINISTRY OF NATIONAL INFRASTRUCTURE AND COMMUNITY DEVELOPMENT 329
NATIONAL INFRASTRUCTURE DIVISION 329
NATIONAL DEVELOPMENT UNIT 347
18 MINISTRY OF INFORMATION TECHNOLOGY, COMMUNICATION AND 357
INNOVATION
19 MINISTRY OF LABOUR, HUMAN RESOURCE DEVELOPMENT AND TRAINING, AND 359
COMMERCE AND CONSUMER PROTECTION
LABOUR DIVISION 359
HUMAN RESOURCE DEVELOPMENT AND TRAINING DIVISION 365
COMMERCE AND CONSUMER PROTECTION 367
20 MINISTRY OF HEALTH AND WELLNESS 369

21 MINISTRY OF BLUE ECONOMY, MARINE RESOURCES, FISHERIES AND SHIPPING 415

22 MINISTRY OF GENDER EQUALITY AND FAMILY WELFARE 427

23 MINISTRY OF ARTS AND CULTURAL HERITAGE 433

24 MINISTRY OF PUBLIC SERVICE, ADMINISTRATIVE AND INSTITUTIONAL REFORMS 439

PART II - AUDIT OF OTHER PUBLIC ENTITIES

25 STATUTORY BODIES, LOCAL AUTHORITIES, SPECIAL FUNDS AND OTHER BODIES 449

APPENDICES 453
ANNEX – ANNUAL STATEMENTS

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CONTENTS
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CONTENTS
LIST OF TABLES

Table Description Page

ANNUAL STATEMENTS – TREASURY


2-1 Cases not yet settled as of 30 June 2022 and 30 June 2023 7
2-2 Classification of Receivables into Non-Exchange and Exchange 9
Transactions
2-3 Age Analysis of Receivables for the Financial Year 2022-23 10
2-4 Public Sector Debt Stock as of 30 June 2022 and 30 June 2023 12
2-5 Public Sector Debt as a Percentage of GDP 13
2-6 Public Sector Debt as at end of Financial Years 2019 to 2023 14
2-7 Government Debt Servicing for Financial Years 2018-19 to 2022-23 15
2-8 Interest Payments on BCG Debt 16
2-9 Disbursements under the LOC as of 30 June 2023 18
2-10 Maturity Structure of Government Securities 19
2-11 Issues and Redemptions of Government Securities – Past Five 20
Financial Years
2-12 Investments as of 30 June 2023 23
2-13 Investments stated at Zero Fair Value as of 30 June 2023 25
2-14 Dividends received during the Financial Years ended 30 June 2022 26
and 30 June 2023
2-15 Investments yielding no Returns during Financial Year 2022-23 27
2-16 Investments not yielding any Return since Acquisition 28
2-17 Balance of Outstanding Loans 30
2-18 New Loans disbursed during Financial Year 2022-23 31
2-19 Comparison of Budget Estimates and Actual Amounts for the Financial 35
Year 2022-23
2-20 Government’s Borrowing Requirements for the Financial Year 2022-23 37
2-21 Revenue and Expenditure of the Consolidated Fund - Past Five Financial 39
Years
2-22 Estimated and Actual Revenue Received from Quasi Corporations 39

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Table Description Page

DEPUTY PRIME MINISTER’S OFFICE, MINISTRY OF HOUSING AND


LAND USE PLANNING AND TOURISM
5-1 Status of Indicators 74
VICE-PRIME MINISTER’S OFFICE, MINISTRY OF EDUCATION,
TERTIARY EDUCATION, SCIENCE AND TECHNOLOGY
6-1 Science Laboratories Projects 96
6-2 Extended Programme Cohort Year 2018 98
6-3 Variances between Target and Actual figures for the following KPI 108
6-4 Financial Statements not submitted to NAO for Audit 111
6-5 Annual Reports including audited Financial Statements not laid before the 112
National Assembly
VICE-PRIME MINISTER’S OFFICE, MINISTRY OF LOCAL GOVERNMENT
AND DISASTER RISK MANAGEMENT

7-1 Awards paid to the Building Contractor 124


7-2 Amounts in Dispute 124
MAURITIUS FIRE AND RESCUE SERVICE
7-3 Status of Essential Equipment/Appliances for Fire and Rescue Operations 135
MINISTRY OF LAND TRANSPORT AND LIGHT RAIL, AND FOREIGN
AFFAIRS, REGIONAL INTEGRATION AND INTERNATIONAL TRADE
8-1 Actual Expenditure on Road Safety 146
8-2 Number of People killed in Road Accidents 146
8-3 Road Safety Programme-Budgeted and Actual Expenditure 148
8-4 Expenditure on the Operation of Free Travel Scheme 151
8-5 Financial Statements not submitted to NAO for Audit 154
MINISTRY OF FINANCE, ECONOMIC PLANNING AND DEVELOPMENT
FINANCE, ECONOMIC PLANNING AND DEVELOPMENT
9-1 Age Analysis of Pending Cases at ARC as at 30 June 2023 184
9-2 Status of Appeal Cases for Financial Year 2022-23 185
9-3 Analysis of Pending Cases 185
9-4 Pension Fund Deficits of Statutory Bodies and Local Authorities as of 191
30 June 2020, 30 June 2021 and 30 June 2022

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LIST OF TABLES
Table Description Page

MAURITIUS REVENUE AUTHORITY


9-5 Arrears of Revenue as per Tax Type 194
9-6 Age Analysis of Collectible Debts 194
9-7 Enforcement Actions undertaken in Financial Years 2021-2022 and 195
2022-2023
9-8 Applications made to MRA 196
9-9 Status of Cases under Objections as of 30 June 2023 197
9-10 Analysis of Determined Cases 198
9-11 Comparative Figures for Self-employed Individuals 199
9-12 Balances at End of Year 30 June 2022 and Start of Year 1 July 2022 200
CUSTOMS DEPARTMENT
9-13 Arrears of Revenue as at end of Past Five Financial Periods 203
9-14 Increase in Rates of Excise Duty on Tobacco Products 205
CORPORATE AND BUSINESS REGISTRATION DEPARTMENT
9-15 Arrears, Write Off and Recovered Amounts 217
9-16 Age Analysis of Debtors 219
9-17 Arrears of Revenue – Written off and Amount Recovered 219

MINISTRY OF SOCIAL INTEGRATION, SOCIAL SECURITY AND


NATIONAL SOLIDARITY
SOCIAL SECURITY AND NATIONAL SOLIDARITY
11-1 New Cases with Significant Amount detected during Financial 236
Year 2022-23
11-2 Financial Statements not submitted to NAO for Audit 242
11-3 Audited Financial Statements not laid before the National Assembly 243

MINISTRY OF INDUSTRIAL DEVELOPMENT, SMEs AND


COOPERATIVES
COOPERATIVES DEVELOPMENT
12-1 Societies under Liquidation Sector-wise 249
12-2 Liquidation not completed 250

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LIST OF TABLES
Table Description Page

MINISTRY OF ENVIRONMENT, SOLID WASTE MANAGEMENT AND


CLIMATE CHANGE

ENVIRONMENT AND CLIMATE CHANGE

13-1 Targets set for KPIs not achieved for the Financial Year 2022-23 266

13-2 Key Performance Indicators and Achieved Targets 276

ATTORNEY-GENERAL’S OFFICE, MINISTRY OF AGRO-INDUSTRY AND


FOOD SECURITY

15-1 Lease Renewed to same Lessee exceeding 14 years Lease 294

15-2 Shooting and Fishing / Eco-Tourism Leases 295

15-3 Achievements of the Delivery Units 311

15-4 Financial Statements not submitted to NAO for Audit 315

15-5 Annual Reports including Audited Financial Statements not laid before the 316
National Assembly

MINISTRY OF NATIONAL INFRASTRUCTURE AND COMMUNITY


DEVELOPMENT

17-1 Budget and Actual Amounts for Maintenance and Rehabilitation Works 331

17-2 Pilot Ministries and Fleet of Vehicles 336

17-3 Details of Contract 338

17-4 Contract Details 341

17-5 Budgeted and Actual figures for NDU projects for Financial Year 347
2022-23

17-6 Status of Projects during last three Financial Years 349

17-7 Projects funded by NDU for Implementation by Local Authorities 351

17-8 Sample of Contracts not signed 353

MINISTRY OF LABOUR, HUMAN RESOURCE DEVELOPMENT AND


TRAINING, AND COMMERCE AND CONSUMER PROTECTION

19-1 Transition Unemployment Benefit after Termination of Employment 360

19-2 Annual Reports including Audited Financial Statements not laid before 363
the National Assembly

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LIST OF TABLES
Table Description Page

MINISTRY OF HEALTH AND WELLNESS

20-1 Avoidable Delays 379

20-2 Additional Works at Stanley Mediclinic due to Non-compliance 383


with Legal Requirements
20-3 Additional Works at Coromandel Mediclinic due to incomplete 385
Scope of Works
20-4 Additional Works at Coromandel Mediclinic due to Non-compliance with 386
Legal Requirements

MINISTRY OF BLUE ECONOMY, MARINE RESOURCES, FISHERIES AND


SHIPPING

21-1 Target and Actual Number of Canottes acquired by Fishers 415

21-2 Actual Expenditure and Number of Trainees 417

21-3 Vacant Posts 418

21-4 Target and Actual Number of Trainees 419

21-5 Financial Statements not submitted to NAO for Audit 425

MINISTRY OF GENDER EQUALITY AND FAMILY WELFARE

22-1 Status of CDCC as of 30 June 2023 427

22-2 Financial Statements not submitted to NAO for Audit 432

22-3 Annual Reports including audited Financial Statements not laid before the 432
National Assembly

MINISTRY OF ARTS AND CULTURAL HERITAGE

23-1 Financial Statements not submitted to NAO for Audit 436

23-2 Annual Reports including Audited Financial Statements 437


not laid before the National Assembly

23-3 Special Funds - Financial Statements not submitted to NAO for Audit 438

MINISTRY OF PUBLIC SERVICE, ADMINISTRATIVE AND INSTITUTIONAL


REFORMS

24-1 Key Performance Indicators and Achieved Targets 444

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LIST OF TABLES
FOREWORD BY THE DIRECTOR OF AUDIT

I am pleased to submit the Certificate of Audit on the Annual Statements of the Government
of the Republic of Mauritius for the financial year 2022-23, together with a Report on the
accounts of Government.

It is my responsibility under Section 110 of the Constitution of the Republic of Mauritius


to audit and report on public accounts of Mauritius and of all courts of law and all
authorities and officers of the Government.

The Finance and Audit Act further requires me to submit a certificate of audit and a report
upon my examination and audit of all accounts relating to public money, stamps, securities,
stores and other property of Government.

My audit was conducted in accordance with the International Standards of Supreme Audit
Institutions (ISSAIs) issued by the International Organisation of Supreme Audit Institutions
(INTOSAI).

According to INTOSAI-P12, The Value and Benefits of Supreme Audit Institutions –


Making a Difference to the Lives of Citizens, the fundamental expectation from Supreme
Audit Institutions (SAIs) is to make a difference to the lives of their citizens in their
respective countries through demonstrating ongoing relevance to citizens, Parliament and
other stakeholders.

As Director of Audit, it is my duty to provide the National Assembly and the general public
with information whether value for money has been obtained concerning the essential
services provided to the citizens, as every year Government spends billion of rupees on
these services.

Despite some Rs 178 billion have been spent for the financial year 2022-23, there are delays
in project implementation of essential services which caused harm to the population such
as:

96 per cent of the number of drain projects at the National Development Unit have not
yet been implemented during the financial year 2022-23; and

the Internet Connectivity Project has not yet been implemented in secondary schools
though initiated long ago.

Accountability in the Management of Public Funds

I wish to draw the attention of the National Assembly and those charged with public sector
governance to the fact that an analysis of the major findings for the financial year
2022-23 has revealed that inadequate accountability mechanism at different levels in
Ministries and Government Departments is the root cause of recurrence of same issues
reported for the last three financial years.

To improve accountability in the public sector, the finance function must be


professionalised and the performance management system need to be enhanced.

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IMPROVING ACCOUNTABILITY IN MINISTRIES AND
GOVERNMENT DEPARTMENTS
Executive Brief

Accountability is an important element of good governance. It is the process whereby


public sector entities, and the individuals within them, are responsible for their decisions
and actions, including their stewardship of public funds and all aspects of performance, and
submit themselves to appropriate external scrutiny.

It is achieved by all parties having a clear understanding of those responsibilities, and


having clearly defined roles through a proper organisational structure. In effect,
accountability is the obligation to answer for a responsibility conferred.

There is an increasing need for accountability to help citizens understand how public funds
are being managed and spent, decisions taken, as well as evidence and information to
support the decisions.

Every year, Government spends significant amount of public money on a range of services
and infrastructure development for the benefit of citizens. For the financial year 2022-23,
a total sum of Rs 178 billion has been spent, consisting of Capital expenditure
(Rs 20 billion) and Recurrent expenditure (Rs 158 billion).

As Director of Audit, it is my duty to report to the National Assembly on how public funds
have been managed by the Accounting Officers.

Over the last three financial years, the National Audit Office (NAO) has repeatedly reported
the following issues, amongst others, in Ministries and Government Departments:

Weaknesses in Expenditure Control.

Deficiencies in Project Management.

Lapses in Procurement Management

Deficiencies in Asset Management.

Non-compliance with Applicable Laws.


.
A follow-up of 168 matters raised in the Audit Report for the financial year 2021-22
showed that as of February 2024 some 33 per cent have been resolved at the level of
Ministries and Government Departments, hence leaving 67 per cent partially
resolved/unresolved.

The issues highlighted in previous years have again been observed in the financial year
2022-23. An analysis of the findings has revealed that the root causes for recurrence of
these issues are inadequate accountability mechanism and monitoring system at different
levels in Ministries and Government Departments.

In this context, I have reported on the significant findings as well as proposals for reforms
required in the public sector to improve accountability in the management of public funds.

III
Summary of Key Audit Findings

83 per cent of Ministries and Government Departments have not complied with
Section 4B of the Finance and Audit Act in respect of the submission of their Report
on Performance within statutory deadline, whilst 57 per cent of the Key Performance
Indicator (KPI) targets set were not met.

Inadequacy of the existing legal framework for effective control mechanism over
grants of some Rs 28.2 billion disbursed to Parastatal Bodies, Local Authorities and
Rodrigues Regional Assembly for the financial year 2022-23.

Significant delays in the implementation of projects concerning the delivery of


essential services, thus affecting the lives of citizens.

Inadequate monitoring at the level of Ministries and Government Departments on the


implementation of capital projects by other public sector bodies falling under their
aegis, thus causing delays in completion of projects and poor contract management.

Limitation in the scope of audit of NAO to ascertain whether public funds disbursed
to private entities or special purpose vehicles are applied for the intended purpose set
by National Assembly.

Audit Committee was not achieving its objectives and Risk Management Framework
was not developed.

Proposed Reforms to improve Accountability in Ministries and Government


Departments

Ministries and Government Departments should prepare their Annual Report including
the financial statements prepared in accordance with International Public Sector
Accounting Standards (IPSAS), and a Report on Performance Information and once
audited, to be tabled at the National Assembly.

The professionalisation of the finance function in Ministries and Government


Departments.

The development of a Code for Good Governance for Ministries and Government
Departments which will improve trust and confidence in public administration.

Concluding Remarks

A strong emphasis on good governance can assist Public Sector Bodies in improving
performance, while meeting demanding standards of accountability from the public.

To achieve this, however, governance must not be seen simply as a narrow compliance
requirement, rather there must be commitment from all public officers.

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IMPROVING ACCOUNTABILITY IN MINISTRIES AND GOVERNMENT DEPARTMENTS
Key Audit Findings, Recommendations and Proposed Reforms

Key Audit Findings

1. Report on Performance not submitted

In August 2018, an amendment was made to the Finance and Audit Act and a new
subsection was added to Section 4B of the Finance and Audit Act, making it mandatory for
Ministries and Government Departments to submit a Report on Performance. This addition
to the Finance and Audit Act was made with a view to further strengthen the accountability
of Ministries and Government Departments.

As of 12 January 2024, 83 per cent of Ministries and Government Departments have not
complied with Section 4B of the Finance and Audit Act in respect of the submission of
their Report on Performance for the financial year 2022-23 within statutory deadline of
31 October 2023.

2. Key Performance Indicators not achieved

KPIs are measurable metrics organisations use to track progress towards strategic
objectives and in Ministries and Government Departments, they would be crucial for
ensuring accountability and managing performance effectively.

Ministries and Government Departments differ from the private sector in that its ‘bottom
line’ is not generating profits but delivering cost-effective services to meet the population’s
needs. In the ever-evolving public sector, KPIs provide invaluable data that allow for
optimisation of resources.

Presently, each Ministry and Government Department prepares a Strategic Overview for
the medium term in the Budget document. In the Strategic Overview, KPIs are given for
each delivery unit. The Treasury publishes the Statement DA, Progress Report on
Achievements and Performance in the Annual Statements which contain the targets set in
the budget and the achievements for the financial year.

My Office has reviewed the targets set and the achievements for the financial year
2022-23 for each Ministry and Government Department and there were 196 KPIs set for
147 Delivery Units.

Findings

57 per cent of the KPI targets set were not met.


19 Delivery Units had not set any KPI.

It was not clear on what basis the KPIs have been computed. Therefore, it could not be
determined whether the KPIs set were realistic, based on the resources available at the level
of the Ministries and Government Departments.

In some cases, it was observed that the Accounting Officers have not taken into account
past achievements while setting targets for the future years. Hence, the achievements for

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IMPROVING ACCOUNTABILITY IN MINISTRIES AND GOVERNMENT DEPARTMENTS
these KPIs for the last three financial years from 2020-21 to 2022-23 largely exceeded the
relatively low targets.

Root Causes

There was no scientific basis for the preparation of KPIs.

Inadequate monitoring to ensure that the KPI targets set is relevant and realistic.

Recommendations

KPIs must be set for each Ministry and Government Department taking into
consideration resources available for the achievement of the goal/objective with a
deadline for delivery.

Accounting Officers should monitor closely the KPIs and take necessary remedial
actions.

3. Inadequacy of Legal Framework for Effective Control Mechanism over Grants

Public funds, by way of grants to statutory or other government bodies, are approved by
the National Assembly through Annual Estimates. For the financial year 2022-23, some
Rs 28.2 billion have been granted to Parastatal Bodies, Local Authorities and Rodrigues
Regional Assembly. However, only a Grant Memorandum is entered into between
Ministries and the receiving Public Sector Bodies as a means of control over grants.

During the financial year 2022-23, the Ministry of Youth Empowerment, Sports and
Recreation has disbursed some Rs 107 million to Mauritius Multisports Infrastructure Ltd.

The actual legal framework does not cater for Government-Controlled Companies/State-
Owned Enterprises, to table their Annual Report, audited Financial Statements and Audit
Reports to the National Assembly, although they are benefitting public funds.

The Ministry providing the financial assistance needs to be held accountable as the funds
are under its vote, and has to ensure that government receives value for money for the
financial grant provided.

Root Cause

The existing legal framework is inadequate for control over the disbursement of grants to
Government-Controlled Companies/State-Owned Enterprises.

Recommendations

There is a need for an effective mechanism to allow for appropriate control to be


exercised over grants to these bodies so as to ensure that the intended objectives for
which public funds have been provided are duly achieved.

Public funds disbursed to these bodies must be related to their key performance
indicators.
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IMPROVING ACCOUNTABILITY IN MINISTRIES AND GOVERNMENT DEPARTMENTS
Consideration may be given for the audited accounts of these bodies to be subject to
scrutiny by the Public Accounts Committee of the National Assembly.

4. Delays in Implementation of Essential Services Projects may cause Harm to the


Population

I have observed that significant delays occurred in the implementation of projects


concerning essential services, thus affecting the lives of citizens.

At the National Development Unit, out of 968 drains projects earmarked, only 34 projects
were in progress, representing 4 per cent of the total projects. The slow implementation of
projects implies that these projects were not made available to citizens on a timely basis,
thus may cause harm to the population.

At the Ministry of Education, Tertiary Education, Science and Technology (MOETEST)


there was time overrun in respect of 39 projects with a total contract value of
Rs 838 million, due to poor planning and monitoring of the projects by the Infrastructure
Management Unit of MOETEST and the Ministry of National Infrastructure and
Community Development (MNICD). Students were being penalised as a result of the
delays in the completion of these major school infrastructure projects, thus causing harm
to the student population.

The three Magnetic Resonance Imaging (MRI) equipment installed at Dr AG Jeetoo


Hospital, Victoria Hospital and Sir Seewoosagur Ramgoolam National Hospital catered for
the whole population of Mauritius, encountered major breakdowns due to their non-
replacement, resulting in an increasing number of patients awaiting MRI. As all the MRI
equipment were out-of-order, the Ministry resorted to the services of private clinics as from
July 2023. Their timely replacement should have been of utmost importance to avoid delays
in the treatment of the patients, hence affecting their well-being.

Root Cause

Roles and responsibilities were not well defined, leading to lack of accountability for these
delays.

Recommendation

Responsibilities must be well defined in project implementation by setting up of


appropriate KPIs.

5. Inadequate Monitoring and Supervision by Ministries over Capital Projects


Implemented by Agencies

MNICD has not been involved in the monitoring and supervision of the construction of the
A1-M1 Bridge Project with a contract value of Rs 3.55 billion, revised to Rs 4.1 billion.
The Road Development Authority was responsible for contract management. The
completion of the project was substantially delayed due to significant changes in the scope
of work and disputes with the Contractor. Significant amendments were made to the
contract, leading to the extension of time granted and costs overrun.

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IMPROVING ACCOUNTABILITY IN MINISTRIES AND GOVERNMENT DEPARTMENTS
The contract for the construction of a Training Centre at Beau Vallon for a sum of
Rs 169.6 million was awarded by the Mauritius Institute of Training and Development
since the Training Centre was under its purview. MOETEST did not actively oversee
project implementation and enforce penalty clauses for non-compliance with contractual
obligations. The project implementation, which was for a duration of 12 months, has
already exceeded its scheduled completion date by some 13 months.

In respect of the construction of the Market Fair and Traffic Centre at Mahebourg that was
being implemented by the District Council of Grand Port, the contractor abandoned the
construction site in June 2022, after payment of Rs 41.7 million out of the of the contracted
sum of Rs 83.7 million. The extent of work completed was around 35 per cent. In November
2023, the existing iron structure was found to be deteriorating through weathering. It was
not known whether any legal action has been taken against the defaulting contractor. Also,
attempts of the Ministry of Local Government and Disaster Risk Management to hand over
the project to MNICD for the completion of the outstanding construction works were not
conclusive.

Root Cause

There was inadequate monitoring at the level of Ministries on project implementation after
funds had been disbursed from their budgets for capital projects to entities under their
purview.

Recommendation

Ministries should monitor projects for which public funds have been disbursed under their
Vote Items. The Ministry should not function merely as a disbursement agency.

6. Funds disbursed not subject to Audit

As per the Finance and Audit Act, I am required to ensure that all money appropriated or
otherwise disbursed is applied to the purpose for which the National Assembly intended to
provide and that the expenditure conforms to the authority which governs it. Also, the
Statutory Bodies (Accounts and Audit) Act requires me to ensure that the Statutory Body
has been applying its resources and carrying out its operations economically, efficiently
and effectively.

However, in many instances, I have not been able to perform the above duties in respect of
public funds disbursed to private entities or special purpose vehicles which are not audited
by NAO.

During the financial year 2022-23, the Private Secondary Education Authority has granted
some Rs 5 billion to private secondary schools. However, NAO was unable to confirm
whether these public funds have been applied for the specific purpose intended by the
National Assembly, and used economically, efficiently and effectively.

Root Cause

Limitations in the scope of audit of NAO to ascertain whether funds disbursed to


beneficiary entities have been used for its intended purpose.

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IMPROVING ACCOUNTABILITY IN MINISTRIES AND GOVERNMENT DEPARTMENTS
Recommendations

Relevant legislations have to be reviewed to enable NAO to verify whether public


funds have been applied for the purpose for which National Assembly provided funds
and have been used economically, efficiently and effectively.

Consideration to be given for the Public Accounts Committee of the National


Assembly to hold these bodies accountable for the use of public funds granted to them.

7. Audit Committee not Achieving its Objectives and Risk Management


Framework not Developed

An analysis of data received from 52 Ministries and Government Departments in respect


of governance issues relating to Audit Committee and Risk Management Framework for
the financial year 2022-23 was carried out.

Audit Committee

The principal role of Audit Committee is to provide oversight on financial reporting, risk
management, internal control and governance processes.

Findings

Ten entities out of 52 (19 per cent) did not have an Audit Committee.

The frequency of Audit Committee meetings was not in line with paragraph 4.4 of the
Audit Committee Handbook which states that a minimum of six meetings should be
held annually, with at least one meeting per quarter. Out of the 42 entities which had
an Audit Committee, 20 of them, representing 48 per cent, did not comply with the
Handbook in respect of frequency of meetings.

The Audit Committee of four entities did not review the findings and recommendations
made by the Internal and External Auditors, and did not make recommendations on
areas where improvements are needed.

The independence of the Audit Committee was compromised as the Chairperson and
members were still appointed from the same Ministries and Government Departments,
and most of them were from the management team.

Risk Management

Risk management enables public sector organisations to become more proactive so as to


make better decisions on how they can operate more effectively in the future, ultimately
leading to better citizen outcomes and improved internal efficiency. A Risk Management
(RM) Framework is crucial as it provides a structured approach to identify, assess risks and
mitigate potential risks in various aspects of operations or projects.

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IMPROVING ACCOUNTABILITY IN MINISTRIES AND GOVERNMENT DEPARTMENTS
On 28 December 2021, the Ministry of Finance, Economic Planning and Development
(MoFEPD) issued Circular No. 8 on “Guidelines for Establishment of Risk Management in
the Public Sector” to inform Accounting Officers of the process for putting in place a Risk
Management Framework at the level of Ministries and Government Departments. This
framework adopts the approach of setting the general principles, standards, models and
practices proven to support and sustain effective risk management.

Findings

Eighteen months have lapsed since MoFEPD issued the guidelines for the setting up
of an RM Framework. As of June 2023, 18 entities had not yet developed an RM
Framework and a Risk Management Register.

As there was no time frame for the setting up of an RM Framework, some entities were
taking unduly long time for its implementation.

Recommendation

The Office of Public Sector Governance (OPSG) should monitor the setting up an RM
Framework.

Proposed Reforms to Improve Accountability

1. Preparation of Annual Report for each Ministry and Government Department

Accountability can only be effective with the provision of complete and appropriate
information. Statutory Bodies, Local Authorities, Special Funds and State-Owned
Enterprises presently prepare an Annual Report including audited Financial Statements,
which is not the case for Ministries and Government Departments.

As taxpayers continue to demand better value for their money, Performance Information
remains crucial. Thus, it is proposed that each Ministry and Government Department
publish on a timely basis an Annual Report, including its financial position and
performance as well as non-financial performance information.

The Annual Report should include:

The Financial Statements prepared in accordance with International Public Sector


Accounting Standards (IPSAS).

Performance information on service delivery for the year with predetermined key
performance indicators (KPI).

Many countries have shifted from the traditional forms of accountability towards those
based on performance and the quality of services rendered by Government. The submission
of Annual Reports by Ministries is current practice in United Kingdom, Australia, New
Zealand, South Africa, Namibia, and other countries. The OECD Journal on Budgeting -
Improving Public Sector Efficiency: Challenges and Opportunities revealed that OECD
countries have reported several benefits from the use of performance information (PI).

X
IMPROVING ACCOUNTABILITY IN MINISTRIES AND GOVERNMENT DEPARTMENTS
It generates a sharper focus on results within the Government.

It provides more and better information on Government goals and priorities along with
how different programmes contribute to achieving these goals.

It promotes better planning and provides valuable feedback to key players with details
on what is working and what needs improvement.

Moreover, the preparation of Financial Statements by Ministries and Government


Departments will facilitate the task of the Treasury in the preparation of Consolidated
Financial Statements for the Public Sector. This will help avoid issues highlighted in the
Report of the Director of Audit for the financial year 2021-22, such as:

difference of some Rs 1.4 billion between the stock value in the Electronic Inventory
Management System at the Ministry of Health & Wellness and the figure provided to
the Treasury in respect of the stock of drugs, consumables and other items as of
30 June 2022.

Implementation of the Government Assets Register and Electronic Inventory


Management System have not yet been completed. Non-financial assets are still not
recorded in the Government Asset Register.

2. Professionalisation of the Finance Function in Ministries and Government


Departments

A professionalised workforce within a finance function provides more than accounting


information. They can also increase the effectiveness of financial management, maintain
control over Government spending, revenues and borrowing, achieve long-term sustainable
economic growth, and improve transparency, accountability and integrity of public finance
information. Ultimately, this leads to trust and confidence in public spending.

For the above reforms to be implemented successfully, it is proposed that professional


accountants be posted in each Ministry and Government Department.

Effective professionalisation is imperative as governments across the world undertake a


drive to implement public financial management (PFM) reforms in the public sector.
Some examples are:

Professionalisation has been part of the Tanzanian reforms including public sector
finance.

In response to an economic crisis in 2014, the Treasury in Cyprus took steps to


professionalise the finance function.

In May 2023 HM Treasury in United Kingdom published the document Managing


Public Money which states that ‘It is government policy that all departments should
have professional finance directors reporting to the permanent secretary with a seat
on the departmental board, at a level equivalent to other board members. It is good
practice for all other public sector organisations to do the same, and to operate to the
same standards.’
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IMPROVING ACCOUNTABILITY IN MINISTRIES AND GOVERNMENT DEPARTMENTS
3. All Ministries and Government Departments to become Self-Accounting

With the professionalisation of the finance function, all Ministries and Government
Departments can become self-accounting, whereby the responsibility for making payments,
collecting revenue and maintaining the accounts will be transferred from the Accountant-
General to the Accounting Officer of the non-self-accounting Ministry/Department. This
shift to self-accounting will reduce paperwork and improve efficiency in the processing of
payments.

4. Introducing a Framework for Good Governance in the Public Sector

The Chartered Institute of Public Finance and Accountancy (CIPFA) and the International
Federation of Accountants (IFAC) have jointly developed the International Framework:
‘Good Governance in the Public Sector’.

The aim of ‘Good Governance in the Public Sector’ is to encourage better service delivery
and improved accountability by setting standards for good governance, applicable to all
entities that comprise the public sector. Some examples of countries where public sector
bodies have to abide by governance principles are Jamaica, Ghana, Australia, United
Kingdom and Hong Kong.

The public sector should develop a Code for ‘Good Governance in the Public Sector’ to
enhance trust and confidence in public sector administration while also improving
accountability.

5. Audit of Performance Information

For the financial year 2022-23, NAO has noted that 57 per cent of the KPI targets set were
not met and 19 Delivery Units did not set any KPI.

Performance information and reporting play a crucial role in directing the attention of the
public and oversight bodies towards whether public entities are delivering value for money.
It helps to compare their performance against their budgets and strategic plans. This
information is essential for managers to make informed decisions and take corrective
measures.

It is proposed that each Ministry and Government Department prepare a Report on


Performance Information including KPIs and actual achievement on non-financial
information.

The impact of measuring and reporting performance results is increased public confidence
in public sector and how the taxpayer’s money has been used. However, credibility in the
reporting system is essential to achieve this impact.

NAO has an important role in ensuring the accuracy and credibility of the performance
information, which will help establish trust in the performance information reports.

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IMPROVING ACCOUNTABILITY IN MINISTRIES AND GOVERNMENT DEPARTMENTS
The audit of performance information will be an annual engagement, as part of the
regularity audit process, to provide assurance to the National Assembly, the public, and
other relevant parties that the reported performance information is both useful and reliable.

Supreme Audit Institutions worldwide have progressed from carrying out only financial
audits to a wide range of value-for-money/performance audits.

In South Africa, it is mandatory for Government Departments to submit an Annual Report


on the entity’s performance against predetermined objectives.

XIII
IMPROVING ACCOUNTABILITY IN MINISTRIES AND GOVERNMENT DEPARTMENTS
XIV
IMPROVING ACCOUNTABILITY IN MINISTRIES AND GOVERNMENT DEPARTMENTS
LIST OF AUDIT AREAS AND KEY FINDINGS
Paragraph Description Page

2.0 ANNUAL STATEMENTS - TREASURY


2.1 Audit Comments on Annual Statements 1
2.2 Public Sector Debt 11
2.3 Investment 23
2.4 Outstanding Loans financed from Revenue as of 30 June 2023 29
2.5 Statement AE and Statement AF - Statement of Comparison of Budget 35
Estimates and Actual Amounts for the Financial Year 2022-23
2.6 Statement B - Revenue and Expenditure of the Consolidated Fund 38

2.7 Special Funds 40

3.0 THE JUDICIARY


3.1 Incompleteness of Government Asset Register 43
3.2 Key Deliverables and Key Performance Indicators do not include all 43
the related activities of the Entity
3.3 Non-compliance with Regulation – Risk Management Framework 44
not set up
4.0 PRIME MINISTER'S OFFICE, MINISTRY OF DEFENCE, HOME
AFFAIRS AND EXTERNAL COMMUNICATIONS AND MINISTRY FOR
RODRIGUES, OUTER ISLANDS AND TERRITORIAL INTEGRITY
4.1 DEFENCE AND HOME AFFAIRS

4.1.1 Upgrading Government House/Centre - Delay in Execution of 45


Projects
4.1.2 Upgrading of the New Government Centre – Significant Delay in 46
Works Completion
4.1.3 Old Government House – Not complying with Fire Safety Measures 49
4.1.4 Removal, Supply, Installation, Testing, Commissioning 51
and Maintenance of Lifts at the New Government Centre -
Non-compliance to Condition of Contract
4.1.5 Risk Management Framework - Not yet developed 53
4.1.6 Procurement – Non-compliance with Regulations and Circular 54
4.1.7 Government Asset Register - Not updated 55
4.1.8 Governance Issues – Non-compliance with Legislation 56
4.2 CIVIL AVIATION
4.2.1 Risk Management Framework – Not yet developed 57
4.2.2 Follow-up of Matters Raised in the Audit Report 2021-22 57

XV
Paragraph Description Page

4.3 POLICE SERVICE


4.3.1 Acquisition of Specialised Equipment for Rs 21.6 million - Nugatory 59
Expenditure
4.3.2 NCG Ships - Lapses in Fleet Management and Procurement 61
Procedures
4.3.3 New Automated Fingerprint Identification System - Lapses in Project 64
Management
4.3.4 Follow-up of Matters Raised in the Audit Report 2021-22 65

5.0 DEPUTY PRIME MINISTER’S OFFICE, MINISTRY OF HOUSING AND


LAND USE PLANNING AND TOURISM
5.1 HOUSING AND LAND USE PLANNING
5.1.1 High Demand and Inadequate Supply of Social Housing Units 73
5.1.2 Inefficient Management of State Lands 75
5.1.3 Revamping and Enhancement of LAVIMS not yet achieved 78
5.1.4 No Value for Money on Land acquired 80
5.1.5 Audit Committee not Functional 82
5.1.6 Risk Register not yet developed 82
5.1.7 Report on Performance - Non-compliance with Legislation 83
5.1.8 Government Assets Register - State Lands not captured 84
5.1.9 Absence of Standard Operating Procedures Manual for Valuation 84
Department
5.1.10 Follow-up of Matters Raised in the Audit Report 2021-22 85

5.2 TOURISM
5.2.1 Governance Issues – Non-compliance with Legislation 87
5.2.2 Follow-up of Matters Raised in the Audit Report 2021-22 87

6.0 VICE-PRIME MINISTER’S OFFICE, MINISTRY OF EDUCATION,


TERTIARY EDUCATION, SCIENCE AND TECHNOLOGY
6.1 Lapses in Capital Project Management and Procurement Procedures 89
6.2 Extended Programme 97
6.3 Institute of Technical Education and Technology still not fully 100
operational
6.4 High-Speed Internet Connectivity in Secondary Schools – Lapses in 101
Project Implementation
6.5 Procurement and Supplies Management - Central Supplies Division 104
6.6 Key Performance Indicators 107
6.7 Government Assets Register 109
6.8 Governance Issues – Non-compliance with Legislation 110

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LIST OF AUDIT AREAS AND KEY FINDINGS
Paragraph Description Page

6.9 Follow-up of Matters Raised in the Audit Report 2021-22 112


6.10 Follow-up of Matters Raised in the Performance Audit Report 2022 115

7.0 VICE-PRIME MINISTER’S OFFICE, MINISTRY OF LOCAL


GOVERNMENT AND DISASTER RISK MANAGEMENT

7.1 LOCAL GOVERNMENT AND DISASTER RISK MANAGEMENT 121

7.1.1 Follow-up of Matters Raised in the Audit Report 2021-22 121


7.1.2 Procurement of 7 Lorries mounted with Crane and 17 Tipper Lorries 122

7.1.3 Interests paid to the Contractor for the construction of the Market Fair 123
at Rivière du Rempart - Rs 522.1 million

7.1.4 Unpaid Stall Fees at Victoria Urban Terminal - Rs 21.1 million 126
7.1.5 Construction of Additional Block at Bel Air Market Fair by the District 127
Council of Flacq
7.1.6 National Multi - Hazard Emergency Alert System Project 129

7.2 MAURITIUS FIRE AND RESCUE SERVICE


7.2.1 Sub-Optimal Operating Capabilities affecting Service Delivery 135
7.2.2 Shortcomings in the Fire Certificates Processing System 137

7.3 MAURITIUS METEOROLOGICAL SERVICES


7.3.1 Revamping of the Mauritius Meteorological Services Website 141
7.3.2 Automatic Weather Station Idle - St Brandon 142

8.0 MINISTRY OF LAND TRANSPORT AND LIGHT RAIL, AND FOREIGN


AFFAIRS, REGIONAL INTEGRATION AND INTERNATIONAL TRADE

8.1 LAND TRANSPORT AND LIGHT RAIL


8.1.1 Road Safety 145
8.1.2 Cashless Ticketing System Project 151
8.1.3 Governance Issues – Non-compliance with Legislation 153
8.1.4 Follow-up of Matters Raised in the Audit Report 2021-22 154
8.2 NATIONAL LAND TRANSPORT AUTHORITY
8.2.1 Motor Vehicle Licence Online Payment System Phase I and II 156
8.2.2 Revenue Management- Motor Vehicle Licence 158
8.2.3 Lapses on Management of Levy on Fees for Examination of Vehicles 160
8.2.4 Enhancement of NLTA Services 161
8.2.5 Follow-up of Matters Raised in the Audit Report 2021-22 166

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LIST OF AUDIT AREAS AND KEY FINDINGS
Paragraph Description Page

8.3 FOREIGN AFFAIRS, REGIONAL INTEGRATION AND INTERNATIONAL


TRADE
8.3.1 Human Resource Management – Inadequate Controls and 171
Non-compliance with Procedures
8.3.2 Governance Issues – Non-compliance with Legislation 174
8.3.3 Follow-up of Matters Raised in the Audit Report 2021-22 175
8.3.4 Follow-up of Matters Raised in the Performance Audit Report 2019 179
9.0 MINISTRY OF FINANCE, ECONOMIC PLANNING AND DEVELOPMENT
9.1 FINANCE, ECONOMIC PLANNING AND DEVELOPMENT
9.1.1 Assessment Review Committee – 2,271 Cases involving Taxes of 183
Rs 23.2 billion not yet resolved as at 30 June 2023, including 582 cases
involving Rs 11.9 billion pending for Five Years or more
9.1.2 Key Performance Indicators 186
9.1.3 Audit Committee 189
9.1.4 Pensions Fund - 77 Public Sector Bodies reported Deficits totalling 190
Rs 46 billion
9.2 MAURITIUS REVENUE AUTHORITY
9.2.1 Revenue Collection 193
9.2.2 Status of Taxpayers Register and Filing Obligations 193
9.2.3 Arrears of Revenue as of 30 June 2023 193
9.2.4 Tax Arrears Settlement Scheme 2022 196
9.2.5 Objections, Appeals and Dispute Resolutions Department 197
9.2.6 Contribution Sociale Généralisée 199
9.2.7 Fiscal Investigations Department 199
9.2.8 Follow-up of Matters Raised in the Audit Report 2021-22 201
CUSTOMS DEPARTMENT
9.2.9 Arrears of Revenue 203
9.2.10 Follow-up of Matters Raised in the Audit Report 2021-22 211
9.3 CORPORATE AND BUSINESS REGISTRATION DEPARTMENT
9.3.1 Revenue Management 215
9.3.2 Slow Recovery of Debts and Debts Written Off 216
9.3.3 Arrears of Revenue 218
9.3.4 Trade Fees 220
9.3.5 Service Delivery- Low Electronic Payments of Trade Fees 221

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LIST OF AUDIT AREAS AND KEY FINDINGS
Paragraph Description Page

9.3.6 Non-Renewal of Lease Agreement 222


9.3.7 Non-Renewal of Fire Certificates 222
9.3.8 Risk Management Framework – Not yet developed 223
9.3.9 Follow-up of Matters Raised in Audit Report 2021-22 224
9.4 REGISTRAR-GENERAL’S DEPARTMENT
9.4.1 Improving Service Delivery 227
9.4.2 Follow-up of Matters Raised in the Audit Report 2021-22 228
10.0 MINISTRY OF ENERGY AND PUBLIC UTILITIES

10.1 Governance Issues – Non-compliance with Legislation 231


11.0 MINISTRY OF SOCIAL INTEGRATION, SOCIAL SECURITY AND
NATIONAL SOLIDARITY
11.1 SOCIAL INTEGRATION DIVISION
11.1.1 Follow-up of Matters Raised in the Audit Report 2021-22 233
11.2 SOCIAL SECURITY AND NATIONAL SOLIDARITY DIVISION
11.2.1 Payments of Pensions 235
11.2.2 Pensions paid in Cash through Post Offices 238
11.2.3 Memorandum of Understanding with MPL not yet signed 240
11.2.4 Assets Under-utilised 240
11.2.5 Governance Issues – Non-compliance with Legislation 241
11.2.6 Follow-up of Matters Raised in the Audit Report 2021-22 243
12.0 MINISTRY OF INDUSTRIAL DEVELOPMENT, SMEs AND COOPERATIVES

12.1 SMALL AND MEDIUM ENTERPRISES DEVELOPMENT


12.1.1 Risk Management Framework - Not yet developed 247
12.1.2 Governance Issues – Non-compliance with Legislation 247
12.1.3 Follow-up of Matters Raised in the Audit Report 2021-22 248
12.2 COOPERATIVES DEVELOPMENT

12.2.1 Liquidation of Cooperative Societies – Non-compliance with 249


Cooperatives Act
12.2.2 Waste Recycling Scheme for the Benefit of Cooperative Societies 251
12.2.3 Risk Management Framework -Not yet developed 253

12.2.4 Follow-up of Matters Raised in the Audit Report 2021-22 254

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LIST OF AUDIT AREAS AND KEY FINDINGS
Paragraph Description Page

13.0 MINISTRY OF ENVIRONMENT, SOLID WASTE MANAGEMENT AND


CLIMATE CHANGE
13.1 ENVIRONMENT AND CLIMATE CHANGE

13.1.1 Coastal Protection Projects - Lapses in Planning and Execution of Works 255

13.1.2 Cleaning and Embellishment Works of Places of Worship and Other 258
Public Sites – Lapses in Execution of Projects
13.1.3 Greening and Embellishment of M1 and M2 Motorways - Lapses in 262
Implementation of Projects.
13.1.4 National Roadmap for making Mauritius Plastic-Free - Delay in 264
Development
13.1.5 Review of Key Performance Indicators in Strategic Overview 2022-23 265
13.1.6 Audit Committee 267
13.1.7 Internal Control 268
13.1.8 Government Asset Register not updated 269

13.2 SOLID & HAZARDOUS WASTE AND BEACH MANAGEMENT


13.2.1 Cleaning Services - Lapses in Management of Services Contracts 270
13.2.2 Review of Key Performance Indicators in Strategic Overview 2022-23 276

13.2.3 Budget Measures 2022-23 not fully achieved 278


13.2.4 Audit Committee not fully Operational 279
13.2.5 Risk Management Framework not yet developed 280
13.2.6 Government Asset Register not updated 281
13.2.7 Governance Issues – Non-compliance with Legislation 281

13.2.8 Follow-up of Matters Raised in the Audit Report 2021-22 282

14.0 MINISTRY OF FINANCIAL SERVICES AND GOOD GOVERNANCE

14.1 Adequacy of Key Performance Indicators for the Office of Public Sector 285
Governance
14.2 Implementation of Risk Management Framework 285
14.3 No Standard Operating Procedure Manual for the Ministry 286
14.4 Independence of Audit Committees 286
15.0 ATTORNEY-GENERAL’S OFFICE, MINISTRY OF AGRO-INDUSTRY AND
FOOD SECURITY
15.1 OFFICE OF THE SOLICITOR-GENERAL
15.1.1 Absence of a Risk Management Framework 289

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LIST OF AUDIT AREAS AND KEY FINDINGS
Paragraph Description Page

15.2 OFFICE OF THE DIRECTOR OF PUBLIC PROSECUTIONS


15.2.1 Incompleteness of Government Asset Register 291
15.2.2 Absence of a Risk Management Framework 291
15.3 AGRO-INDUSTRY AND FOOD SECURITY
15.3.1 Legislations and Conditions of Deed of Lease not always complied with 293
15.3.2 Lapses in the Operational Activities of the Cattle Reproduction Farm 299
15.3.3 Ineffective Administration of State Land for Agricultural Purposes 305
15.3.4 Lapses in Management of Mechanical Workshop and Transport 308

15.3.5 Non-compliance with Governance Issues 310


15.3.6 Governance Issues - Non-compliance with Legislations 314

15.3.7 Follow-up of Findings Raised in Audit Report 2021-22 317


15.3.8 Follow-up of Matters Raised in the Performance Audit Report 2022 323

16.0 MINISTRY OF YOUTH EMPOWERMENT, SPORTS AND RECREATION


16.1 Funds disbursed to Mauritius Multisports Infrastructure Ltd 327

16.2 Governance Issues – Non-compliance with Legislation 328


17.0 MINISTRY OF NATIONAL INFRASTRUCTURE AND COMMUNITY
DEVELOPMENT
17.1 NATIONAL INFRASTRUCTURE DIVISION
17.1.1 Lapses in the Management of Government Quarters 329

17.1.2 Inadequate Control over Disbursement of Funds for Maintenance and 331
Rehabilitation of Roads and Bridges
17.1.3 Significant Delays in addressing Issues for the Operation of the Standby 332
Generator
17.1.4 Asset Management – Delay in recording Non-Financial Assets in the 333
Government Asset Register
17.1.5 Under-utilisation of the Electronic Document Management System 335
17.1.6 Vehicle Management System – Not Optimally used 336
17.1.7 Consultancy Services for the Design, Supervision and Management of the 338
Construction of Grade Separated Junctions at Pont Fer/Jumbo/Dowlut
Flyovers and A1-M1 Link Road Project
17.1.8 Lapses in the Management of the Consultancy Contract 338

17.1.9 Construction of Grade Separated Junctions at Pont Fer/Jumbo/ 340


Dowlut Flyovers and A1-M1 Link Road Project – Lapses in Contract
Management

XXI
LIST OF AUDIT AREAS AND KEY FINDINGS
Paragraph Description Page

17.2 NATIONAL DEVELOPMENT UNIT


17.2.1 Lapses in Project Management 347
17.2.2 Financing of Projects – Under-utilisation of Funds provided for NDU 347
Projects
17.2.3 Delay in implementing Projects in High-Risk Flood-Prone Areas may 349
cause harm to the Citizens
17.2.4 Significant Delays in the Completion of Projects allocated to Local 351
Authorities
17.2.5 Non-compliance with Public Procurement Act - Significant Delays in 352
signing of Contracts
17.2.6 Overpayment of Escalation Costs -Construction and Upgrading of Roads 354
and Drains
17.2.7 Governance Issues – Non-compliance with Legislation 355
17.2.8 Follow-up of Matters Raised in the Audit Report 2021-22 355
18.0 MINISTRY OF INFORMATION TECHNOLOGY, COMMUNICATION AND
INNOVATION
18.1 Governance Issues – Non-compliance with Legislation 357
18.2 Follow-up of Matters Raised in the Audit Report 2021-22 357
19.0 MINISTRY OF LABOUR, HUMAN RESOURCE DEVELOPMENT AND
TRAINING, AND COMMERCE AND CONSUMER PROTECTION
19.1 LABOUR DIVISION

19.1.1 Delay in the Computerisation of Occupational Safety and Health Division 359
19.1.2 Transition Unemployment Benefit – Alleged Cases of Fraud 360
19.1.3 Risk Management Framework – Not yet developed 361
19.1.4 Internal Audit 361
19.1.5 Governance Issues – Non-compliance with Legislation 362
19.1.6 Follow-up of Matters Raised in Audit Report 2021-22 363
19.2 HUMAN RESOURCE DEVELOPMENT AND TRAINING DIVISION

19.2.1 Risk Management Framework – Not yet developed 365


19.3 COMMERCE AND CONSUMER PROTECTION
19.3.1 Governance Issues – Non-compliance with Legislation 367
20.0 MINISTRY OF HEALTH AND WELLNESS

20.1 Inefficiencies in Capital Project Management 369

20.2 ENT Health Care Service Delivery affected with the Relocation of 371
Services

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LIST OF AUDIT AREAS AND KEY FINDINGS
Paragraph Description Page

20.3 Infrastructure Development for Regional Hospitals: Absence of 376


Planning and Delays in Completion of Construction of New Flacq
Teaching Hospital
20.4 Construction of Stanley Mediclinic 382
20.5 Construction of Coromandel Mediclinic – Deficiencies in Project 385
Management
20.6 Warehousing of Pharmaceutical and Medical Disposables – Lapses 387
in Stores Management
20.7 Poor Stock Management of Pharmaceutical Products 392
20.8 Upgrading of Health Infrastructures – Leakages 396
20.9 MRI Examinations - Service Delivery affected by 398
Unavailability/Breakdown of Equipment and Non-Delivery of
Consumables
20.10 Laboratory Information Management Systems Project 403
20.11 Risk Management Framework 405
20.12 Audit Committee 405
20.13 Internal Control 406
20.14 Government Asset Register 407
20.15 Key Performance Indicators and Outcome Indicators 408
20.16 Governance Issues – Non-compliance with Legislation 411
20.17 Follow-up of Matters Raised in the Audit Report 2021-22 412
21.0 MINISTRY OF BLUE ECONOMY, MARINE RESOURCES, FISHERIES
AND SHIPPING

21.1 Unsuccessful Implementation of Off-lagoon Fishing Scheme 415


21.2 Mauritius Maritime Training Academy - Insufficient Training 417
delivered
21.3 Inadequate Management of Barachois 420
21.4 Absence of Risk Management Framework 422

21.5 Incomplete Government Asset Register 423

21.6 Non-compliance with Legislation 424

21.7 Follow-up of Matters Raised in the Audit Report 2021-22 425


22.0 MINISTRY OF GENDER EQUALITY AND FAMILY WELFARE
22.1 Child Day Care Centres – Registration Status 427
22.2 Risk Management 429
22.3 Governance Issues – Non-compliance with Legislation 431

XXIII
LIST OF AUDIT AREAS AND KEY FINDINGS
Paragraph Description Page

23.0 MINISTRY OF ARTS AND CULTURAL HERITAGE


23.1 Acquisition of Non-Financial Assets - 92.4 per cent of Budgeted Funds Not 433
spent
23.2 Capital Grants to Statutory Bodies - Budgeted Funds unnecessarily tied up 433
23.3 Procurement 434
23.4 Governance Issues – Non-compliance with Legislation 435
24.0 MINISTRY OF PUBLIC SERVICE, ADMINISTRATIVE AND INSTITUTIONAL
REFORMS
24.1 Construction of New Civil Service College – Shortcomings in 439
Contract Management
24.2 Incorrect Recovery of Advance Payment 440
24.3 Strategic Overview - Targets not achieved and Unrealistic 441
24.4 Audit Committee - Not Fully Operational 444
24.5 Internal Audit - Risky Audit Areas not covered 445
24.6 Government Asset Register - Procured Assets not recorded 446
24.7 Risk Management Framework- Not yet developed 447
24.8 Governance Issues – Non-compliance with Legislation 447
24.9 Follow-up of Matters Raised in the Audit Report 2021-22 448

XXIV
LIST OF AUDIT AREAS AND KEY FINDINGS
CERTIFICATE OF AUDIT
PART I

REPORT OF THE DIRECTOR OF AUDIT


ON
THE ACCOUNTS OF THE GOVERNMENT
2 - ANNUAL STATEMENTS - TREASURY
2.1 Audit Comments on Annual Statements

I Submission of Annual Statements

The Finance and Audit Act requires the Accountant-General to sign and submit to the
Director of Audit, within six months of the close of every fiscal year, statements presenting
fairly the financial transactions and financial position of Government on the last day of
such fiscal year.

The accounts of Government were closed on 10 August 2023 and the Annual
Statements of Government for the financial year ended 30 June 2023 were submitted by
the Accountant-General on 29 December 2023. The main Statements comprising the
Statement of Financial Position (Statement A), Statement of Financial Performance
(Statements AA and AB) and the Statement of Changes in Net Assets or Equity (Statement
AC) were received at the National Audit Office on 29 December 2023.

Other Statements, as prescribed under Section 19(3) of the Finance and Audit Act, not
mentioned above, were submitted to my Office on 19 October 2023, 22 November 2023
and 12 December 2023.

Submission of Transitional IPSAS Financial Statements

To improve transparency, accountability and decision-making through the production and


publication of internationally benchmarked financial statements, the Finance and Audit Act
was amended in July 2017.

As such, since July 2017, Section 19(3A) (a) of the Act provides that the statements referred
to in subsection (3) (a) to (ag) shall, as far as possible, be prepared in compliance with
IPSAS.

According to Section 19 (3A) (b), the Statements shall, for the fiscal year 2022-2023 and
onwards, be prepared in compliance with IPSAS.

First Transitional IPSAS Financial Statements

As disclosed in note 2.1 B (i), the first transitional IPSAS financial statements have been
prepared in respect of the financial year 2022-23 and it is expected that the financial
statements will be fully compliant with IPSAS as from the financial year 2025-26.

According to paragraph 9 of IPSAS 33 ‘First-Time Adoption of Accrual Basis IPSAS’,


Transitional IPSAS financial statements are the financial statements prepared in accordance
with this IPSAS (IPSAS 33) where a first-time adopter cannot make an explicit and
unreserved statement of compliance with other IPSASs because it adopted one or more of
the transitional exemptions that affect the fair presentation of the financial statements and
its ability to assert compliance with accrual basis IPSASs. According to paragraph 135 of
IPSAS 33, the first-time adopter should include a statement that the financial statements do
not fully comply with accrual basis IPSASs.

According to Paragraph 136 of IPSAS 33, where a first-time adopter takes advantage of the
transitional exemptions, the first-time adopter shall disclose:

1
(a) The extent to which it has taken advantage of the transitional exemptions that affect
the fair presentation of the financial statements and its ability to assert compliance with
accrual basis IPSASs and/or

(b) The extent to which it has taken advantage of the transitional exemptions that do not
affect the fair presentation of the financial statements and its ability to assert
compliance with accrual basis IPSASs.

Government has taken advantage of the transitional exemptions that affect the fair
presentation of the financial statements in respect of the following:

(i) Property Plant and Equipment;

(ii) Employee Benefits;

(iii) Related Party Disclosures;

(iv) Impairment of Non-Cash Generating Asset;

(v) Intangible Assets;

(vi) Financial Instruments;

(vii) Leases; and

(viii) Revenue from Non-Exchange Transactions.

Issues regarding the Implementation of Accrual-Based IPSAS

Findings

Issues regarding the implementation of accrual-based IPSAS financial statements, which


were previously reported, still needed to be fully addressed.

The Secondary Ledger (SL), which was to cater for accruals accounting in the Treasury
Accounting System (TAS), has been implemented since May 2017. After more than
six years, the system was still not operational and the Treasury had to rely heavily on
returns submitted by Ministries/Departments to prepare the Accrual IPSAS financial
statements.

The Government Asset Register (GAR) has been operational since August 2017 to
record all Government assets and to substantiate the figures for Property, Plant and
Equipment and Intangible Assets in the financial statements of the Government.
However, after some six years, the entries in the GAR were still incomplete.

2
ANNUAL STATEMENTS - TREASURY
Recommendation

In view of the first transitional IPSAS financial statements in 2022-23 and full compliance
in 2025-26, necessary measures must be taken to ensure that the Secondary Ledger is
operational and all the Government assets are duly recorded in GAR.

Treasury’s Response

The strategy of the Treasury is to procure a proper system supporting accrual


accounting after having acquired extensive experience in the preparation of accrual-
based financial statements, including consolidation.

The Treasury has issued reminders to Ministries/Departments to obtain the necessary


data to be uploaded in GAR but still response was low.

II Employee Benefit Obligations - Liability in respect of the Defined Benefit Plan


of Rs 149.8 billion

A sum of Rs 149.8 billion was accounted as a liability for the Defined Benefit Plan in
respect of both financial years 2021-22 and 2022-23. According to paragraph 2.19 (ii) (b)
of the notes to the financial statements, the calculation of defined benefit obligations is
performed on a 3-yearly basis by a qualified actuary and the last valuation was carried out
on 30 June 2022.

According to paragraph 60 of IPSAS 39 ‘Employee Benefits’, an entity shall determine the


net defined liability (asset) with sufficient regularity that the amounts recognised in the
financial statements do not differ materially from the amounts that would be determined at
the end of the reporting period.

Paragraph 61 of IPSAS 39, states that an entity may request a qualified actuary to carry out
a detailed valuation of the obligation before the end of the reporting period. Nevertheless,
the results of that valuation are updated for any material transaction and other material
changes in circumstances up to the end of the reporting period.

Findings

Valuation of Pension liability

The pension deficit of Statutory Bodies and Local Authorities increased from
Rs 33.3 billion as of 30 June 2020 to Rs 46 billion as of 30 June 2022, representing an
increase of 38 per cent over two years.

Based on this analysis, if the actuarial valuation is carried out on a 3-yearly basis, the
pension liability of the Government standing at Rs 149.8 billion as of 30 June 2023 may be
understated.

3
ANNUAL STATEMENTS - TREASURY
Inconsistent Accounting Policy - Consolidation

According to Circular No. 4 of 2023 from the Ministry of Finance, Economic Planning and
Development (MoFEPD), a Consolidated Financial Statement will be prepared for the
Public Sector for the financial year 2022-23.

Actuarial review is carried out every year for Statutory Bodies and Local Authorities,
whereas for the Central Government on a 3-yearly basis resulting in inconsistent accounting
policies.

Recommendation

In view of the first transitional IPSAS financial statements for the financial year 2022-23
and full compliance for financial year 2025-26, it is recommended that for the Central
Government, actuarial valuation be carried out at each reporting date to ensure compliance
with IPSAS 39 and to show a true and fair picture of pension liability at the end of each
reporting date.

Treasury’s Response

Consideration is being made to have a yearly actuarial valuation of the pension obligation
within the transitional period.

III Investments - Fair Value is based on net assets value, not reflecting current
market conditions.

Finding

The fair values of Unquoted Shares and Equity Participation in Companies/ Government
Bodies were based on Net Asset Figures from the latest audited financial statements of
investees.

When the latest audited financial statements are not available, IPSAS 41-Financial
Instruments (Implementation Guidance) recommends the net asset value from the last
audited financial statements be adjusted to reflect current market conditions or another
appropriate valuation technique should be used to calculate the fair value of unquoted
equity investments.

In eight cases, investments costing Rs 21.5 billion were measured at a total fair value of
Rs 31.6 billion based on Net Assets Values stated in financial statements dating back to
the years 2014 to 2021, which is against IPSAS 41 guidance.

Recommendation

Investment should be valued in compliance with IPSAS 41.

4
ANNUAL STATEMENTS - TREASURY
IV Property, Plant and Equipment and Intangible Assets - Valuation and Existence
of Assets

As of 30 June 2023, Property, Plant and Equipment (PPE) and Intangible Assets (IA) owned
by the Government were recognised at Rs 536.1 billion and Rs 1.0 billion, respectively in
the Statement of Financial Position.

Findings

Useful Economic Lives of Fully Depreciated Assets still in Use not reviewed in line
with IPSAS 17

As of 30 June 2023, the cost of fully depreciated assets under PPE and IA amounted to
Rs 8.7 billion and 1.9 billion respectively. These may include assets that are still in use.

According to Paragraph 71 of IPSAS 17, Property, Plant and Equipment, depreciation of


an asset begins when it is available for use and ceases when the asset is derecognised.

According to Paragraph 67 of IPSAS 17, the residual value and the useful life of an asset
shall be reviewed at least at each annual reporting date and if expectations differ from
previous estimates, the change shall be accounted for as a change in an accounting estimate.

Recommendation

In view of the first transitional IPSAS financial statements in 2022-23 and full compliance
in 2025-26, the useful economic lives of fully depreciated assets still in use should be
reviewed regularly and their carrying values adjusted accordingly as per Paragraph 67 of
IPSAS 17.

Land – List of State Land not updated

As of 30 June 2023, the value of Rs 382 billion reported in the Statement of Financial
Position under PPE (Land) was not supported by an updated list of land from the Ministry
of Housing and Land Use Planning (MHLUP) to include additions for financial years
2018-19, 2019-20, 2020-21 and 2022-23.

Addition to land totaling Rs 3.1 billion during financial years 2018-19 to 2020-21 and
Rs 952 million for the financial year 2022-23 were therefore not supported by a physical
list of land.

The Valuation Department carried out a valuation exercise as of 30 June 2022. However,
the value of state lands identified as of 30 June 2018 was revised and additions during
2021-22 were considered.

Recommendation

In view of the first transitional IPSAS financial statements in 2022-23 and full compliance
in 2025-26, necessary measures must be taken to ensure that all the additions since the
financial year 2018-19 are adequately supported to ensure completeness and accuracy of
PPE figure.

5
ANNUAL STATEMENTS - TREASURY
Treasury’s Response

Several reminders have been sent to the Ministry of Housing and Land Use Planning and
the matter is still pending.

Incompleteness of Government Asset Register

As of 30 June 2023, the recording of assets in the Government Asset Register (GAR) was
yet to be completed as some Ministries/Departments were still not updating the register.
For all classes of assets, differences were observed between the amount reported in the
financial statements and the amount uploaded in the GAR at cost.

As of 30 June 2023, PPE (excluding Furniture, Fixtures and Fittings) and IA recorded in
the GAR at cost stood at Rs 489.5 billion and Rs 130.9 million respectively, while PPE and
IA at cost recognised in the Statement of Financial Position were Rs 576.6 billion and
Rs 3.7 billion, respectively.

Since the GAR did not fully support the value of assets reported in the financial statements,
the completeness and existence of PPE and IA reported in the financial statements could
not be ascertained.

Recommendation

In view of the first transitional IPSAS financial statements in 2022-23 and full compliance
in 2025-26, necessary measures must be taken to ensure that GAR duly supports assets
recorded in the financial statements to ensure completeness and existence of those assets.

Treasury’s Response

Necessary actions have been taken by this office since the implementation of GAR to
ensure that Ministries/Departments record their Non-Financial Assets (NFAs) on the
system. It is worth noting that commendable progress has been made in respect of NFAs
value recorded in the system. However, the ultimate responsibility of recording and
updating the NFAs on GAR rests with Ministries/Departments.

V Statement of Comparison of Budget Estimates and Actual Amounts

In the ‘Statement AE/AF - Comparison of Budget Estimates and Actual Amounts,’


information on original estimates, total provisions and actual amount is shown.

Variance calculation is based on the difference between budget estimates and actual
amounts and related explanations is disclosed in the Notes to accounts.

Recommendation

Paragraph 17 of IPSAS 24 ‘Presentation of Budget Information in Financial Statements’


also recommends the calculation of differences between the actual and final budget to focus
on compliance with the final budget.

6
ANNUAL STATEMENTS - TREASURY
Along with differences between the actual and the original budget, differences between the
actual and the final budget (provision) should also be disclosed with explanation of material
differences.

VI Receivables in respect of Cases not yet Settled/Pending cases at the


Mauritius Revenue Authority

Cases not yet settled or pending cases comprised mostly tax claims pending under
objections at the Mauritius Revenue Authority (MRA) and cases being dealt under the
Alternative Tax Dispute Resolution (ATDR) and Expeditious Dispute Resolution Tax
Schemes (EDRTS). It also included cases lodged at the Assessment Review Committee
(ARC). ‘Sum Otherwise not Due’ referred to those cases where assessments had been
raised, but objections could still be lodged within the statutory time limit of 28 days.

Table 2-1 shows the original assessed amount for cases yet to be settled at MRA inclusive
of Customs Department for financial years ending 30 June 2022 and 30 June 2023.

Table 2-1 Cases not yet settled as of 30 June 2022 and 30 June 2023

30 June 2022 30 June 2023


MRA Rs Rs
Pending under Objection 2,318,081,765 3,330,755,049
Pending at ARC 20,348,479,809 20,587,855,118
Pending under ATL and EDL 612,958,589 607,441,624
Sum Otherwise not Due 2,278,487,408 6,950,631,065
MRA - Customs
Cases Under Disputes 385,156,816 400,516,561
Total 25,943,164,387 31,877,199,417
Source: Returns of Arrears of Revenue as of 30 June 2022 and 30 June 2023

Findings

The Receivables (exclusive of loss allowance) figure of Rs 23.7 billion included in the
Statement of Financial Position excluded any amount relating to cases not yet
settled/pending at MRA.

MRA provided an analysis of some 1,620 cases determined during the financial year
2022-23. The analysis revealed that the revised/determined amount represented some
72 per cent of the original tax amounts assessed.

IPSAS 23 Revenue from Non-exchange Transactions (Taxes and Transfers)

According to paragraph 67 of IPSAS 23, Revenue from Non-Exchange Transactions


(Taxes and Transfers), assets arising from taxation transactions are measured at the best
estimate of the inflow of resources to the entity and reporting entities must develop
accounting policies for the measurement of assets arising from taxation transactions.

7
ANNUAL STATEMENTS - TREASURY
Furthermore, paragraph 68 of IPSAS 23 specifies that where there is a separation
between the timing of the taxable event and collection of taxes, the entity may reliably
measure assets arising from taxation transactions by using, for example, a statistical
model based on the history of collecting the particular tax in prior periods.

The Treasury has adopted transitional provision for measurement of revenue from
Non-Exchange Transactions

Recommendation

The Treasury should develop an appropriate accounting policy for the recognition of
receivables in compliance with IPSAS regarding tax cases not yet settled.

Receivables Accounted in Financial Statements – Rs 23.7 billion

Total receivables before loss allowance (bad debts provisions) amounted to


Rs 23.7 billion as of 30 June 2023 compared to Rs 20.6 billion as of 30 June 2022,
representing an increase of 15 per cent.

Receivables from Non-Exchange and Exchange Transactions amounted to


Rs 21.9 billion and Rs 1.8 billion, respectively for financial year 2022-23. Details are
given in Table 2-2.

Exchange Transactions are transactions in which one entity receives assets or services or
has liabilities extinguished and directly gives approximately equal value to another entity
in exchange. Examples include licences, finance income, rent, royalties and sales of
goods and services.

In a Non-Exchange Transaction, an entity either receives value from another entity


without directly giving approximately equal value in exchange or giving value to another
entity without directly receiving equal value in exchange. Examples include taxes, fines,
penalties forfeits and social contributions.

8
ANNUAL STATEMENTS - TREASURY
Table 2-2 Classification of Receivables into Non-Exchange and
Exchange Transactions

30 June 2022
30 June 2023
Restated
Ministries and Departments Rs Rs
Receivables from Non-Exchange Transactions
Mauritius Revenue Authority 18,385,701,162 21,429,311,864
Registrar- General's Department 415,174,488 397,275,059
The Judiciary 31,985,842 50,211,580
National Land Transport Authority 38,064,000 38,064,000
Corporate and Business Registration Department 41,793,037 37,448,802
Ministry of Commerce and Consumer Protection 163,000 236,000
Ministry of Environment, Solid Waste
62,898,000 -
Management and Climate Change
Subtotal 18,975,779,529 21,952,547,305
Receivables from Exchange Transactions
Ministry of Housing and Land Use Planning 1,187,474,818 1,257,710,373
Treasury 209,166,465 322,274,727
Corporate and Business Registration Department 83,461,361 75,481,767
Police Service 37,209,380 32,858,641
Ministry of Health and Wellness 23,086,017 23,451,818
Civil Aviation 36,501,545 12,940,131
Ministry of Agro-Industry and Food Security 12,757,579 11,509,293
Others 19,795,662 27,722,699
Mauritius Revenue Authority 2,260,194 2,260,194
Subtotal 1,611,713,021 1,766,209,643
Total Receivables 20,587,492,550 23,718,756,948
Source: Returns from Ministries and Departments

The receivables for non-exchange transactions have increased by some 16 per cent and
receivables from exchange transactions have increased by some 10 per cent for the
financial year 2022-23. This increase is mainly due to increase in receivables for taxes
on goods and services, taxes on income and profits, other taxes and fines, penalties and
forfeits.

9
ANNUAL STATEMENTS - TREASURY
Findings

Receivables - Age analysis

Table 2-3 below shows an age analysis of receivables for non-exchange and exchange
transactions after loss allowance of Rs 666 million and Rs 452 million, respectively.

Table 2-3 Age Analysis of Receivables for the Financial Year 2022-23

Non-Exchange Exchange Percentage of


Total
Transactions Transactions Total
Receivables
Rs billion Rs billion Rs billion
(%)
Less than 1 year 12.26 0.25 12.51 55
Between 1 year to 5
5.67 1.00 6.67 30
years
Between 5 years to
2.02 0.05 2.07 9
10 years
Over 10 years 1.34 0.01 1.35 6
Total 21.29 1.31 22.60 100
Source: Notes 5 and 6 to the Financial Statements

Debt recovery was slow for debts over one year. Total receivables for more than one
year accounted for some 45 per cent of the total debts, of which some six per cent related
to receivables for over 10 years. Debts less than one year includes current due as per
disclosure notes 5 and 6.

Recommendation

The Accounting Officer of each Ministry and Department should ensure prompt action
is taken to recover receivables.

Receivables Written-off

Findings

A total of Rs 241 million has been written off against total receivables for the
financial year 2022-23, which includes Rs 200 million and Rs 41 million for non-
exchange transactions and exchange transactions, respectively.

Receivables written off for MRA totalled Rs 185 million, representing 77 per cent
of the total write-offs of debts from non-exchange transactions and exchange
transactions.

Recommendation

Government should put in place a mechanism that ensures prompt recovery of receivables
to decrease write off.

10
ANNUAL STATEMENTS - TREASURY
2.2 Public Sector Debt

Debt management is the process of establishing and executing a strategy for managing the
Government’s debt to meet the borrowing needs of Government in a manner that avoids
market disruption, to minimise the cost of the debt portfolio within an acceptable level of
risk and to support the development of a well-functioning market for Government
securities.

I Public Sector Debt as of 30 June 2023

Findings

Public Sector Debt Stock

The Public Sector Debt (PSD)as a percentage of Gross Domestic Product decreased by 4.8
per cent from 85.9 per cent in 2021-22 to 81.1 per cent in 2022-23.

Total Public Sector Debt Stock increased from Rs 449.3 billion as at 30 June 2022 to Rs
495.6 billion as of 30 June 2023, that is by Rs 46.3 billion, reflecting a rise of 10.3 per cent
over the previous financial year. Details are given in Tables 2-4 and 2-6.

11
ANNUAL STATEMENTS - TREASURY
Table 2-4 Public Sector Debt Stock as of 30 June 2022 and 30 June 2023

Nominal Value Nominal Value Variance


over Previous
Debt Category 30-Jun-22 30-Jun-23 Year
Rs Rs %
Budgetary Central
Government (BCG) Debt
BCG – Domestic 326,978,909,558 365,213,358,384 11.7
BCG – External 84,458,609,341 83,873,296,648 (0.7)
411,437,518,899 449,086,655,032

Guaranteed by
Government
Extra Budgetary Units 23,851,050 23,851,050 -
Public Corporations 36,463,335,684 39,027,192,189 7.0
36,487,186,734 39,051,043,239
Non-Guaranteed by
Government
Extra Budgetary Units 106,437,489 101,377,197 (4.8)
Public Corporations 16,775,961,883 25,597,066,119 52.6
16,882,399,372 25,698,443,316
Sub Total 464,807,105,005 513,836,141,587 10.5

Less Consolidation 17.8


(15,512,334,188) (18,270,105,025)
Adjustment
Total Public Sector Debt 449,294,770,817 495,566,036,562 10.3
Comprising:
Total Domestic Public
336,123,628,530 380,298,821,659
Sector Debt
Total External Public
113,171,142,287 115,267,214,903
Sector Debt

Source: Statement J - Statement of Public Sector Debt as at 30 June 2022 and 30 June 2023

Public Sector Domestic Debt

Public Sector Domestic Debt accounted for 77 per cent of total PSD and was made up of
short, medium and long-term debt from the issuance of Treasury Bills, Treasury
Certificates, Treasury Notes, Government of Mauritius Bonds, Silver Bonds, loans from
SIC Development Co Ltd and loans contracted by Extra Budgetary Units and Public
Corporations, both guaranteed and non-guaranteed by Government.

As of 30 June 2023, Public Sector Domestic Debt obligations totalled Rs 380.3 billion. This
represents an increase of 13 per cent (Rs 44.2 billion) over the previous year’s debt stock
of Rs 336.1 billion.

12
ANNUAL STATEMENTS - TREASURY
Public Sector External Debt Constituted 23 Per Cent of Total Public Sector Debt

Public Sector External Debt obligations stood at Rs 115.3 billion as of 30 June 2023, which
is an increase of 2 per cent (Rs 2.1 billion) over the previous year’s balance of
Rs 113.2 billion.

Public Sector External Debts constituted some 23 per cent of total PSD and include Loans
from Foreign Governments and Institutions, Government Securities held by Non-Residents
and the International Monetary Fund (IMF) Special Drawing Rights (SDR) Allocations and
debt of Public Corporations.

IMF SDR Allocations are obligations arising through the participation of the Republic of
Mauritius in the SDR Department of the IMF, and are related to the allocation of SDR
Holdings, which are international Reserve Assets created by the IMF and allocated to
members to supplement reserves.

Consolidation Adjustment Rs 18.3 billion.

A consolidation adjustment of Rs 18.3 billion was made in accordance with the IMF
Government Finance Statistics Manual, which requires that inter-sectoral and intra-sectoral
transactions be netted off. As such, the PSD figure of Rs 513.8 billion was brought down
by an amount of Rs 18.3 billion, representing investments held by Non-Financial Public
Corporations, Statutory Bodies and Local Authorities in Treasury Bills, Government of
Mauritius Bonds, Treasury Notes, and Treasury Certificates and a domestic loan from SIC
Development Co Ltd already accounted in debts of Public Corporations. Accordingly, the
PSD was reduced to Rs 495.6 billion.

Public Sector Debt as a Percentage of Gross Domestic Product (GDP)

Target set in Estimates 2022-2023 - Debt Management Strategy

Public Sector Debt as a percentage of GDP as per Debt Management Strategy (Estimates
2022-2023) and actual results are shown in Table 2-5.

Table 2-5 Public Sector Debt as a Percentage of GDP

Debt Strategy Variance


Estimates Actual
2022-2023 2022-2023
BCG Debt/GDP (per cent) 68.1 73.5 5.4
PSD Gross/GDP (per cent) 78.0 81.1 3.1
PSD Net/GDP (per cent) 72.9 70.0 (2.9)
PSD Gross (Rs billion) 449.6 495.6 46.0
PSD Net (Rs billion) 419.8 427.7 7.9
Gross Domestic Product 576.1 611.0 34.9
(GDP) (Rs billion)
Source: Estimates 2022-2023, Statement J and Statistics Mauritius, Quarterly National Accounts, 3rd Quarter 2023

13
ANNUAL STATEMENTS - TREASURY
The percentage of Budgetary Central Government (BCG) Debt and Public Sector Gross
Debt over GDP of 73.5 per cent and 81.1 per cent exceeded the percentage set in debt
management strategy by 5.4 and 3.1 percentage points, respectively.

Public Sector Debt to GDP Ratio During Last Five Financial Years

The total PSD, its growth rate and GDP percentage during the past five years is shown in
Table 2-6.

Table 2-6 Public Sector Debt as at end of Financial Years 2019 to 2023

2018-19 2019-20 2020-21 2021-22 2022-23


Total PSD (Rs billion) 320.7 381.8 419.4 449.3 495.6
Rate of Growth of PSD (per
6.8 19.1 9.8 7.1 10.3
cent)
GDP (Rs billion) 507.7 471.1 456.3 522.9 611.0
PSD (Gross)/GDP (per cent) 63.2 81.0 91.9 85.9 81.1
PSD Net (Rs billion) N/A 322.2 345.0 385.5 427.7
PSD Net/GDP (per cent) N/A 68.4 75.6 73.7 70.0
Source: Statements J – Statement of Public Sector Debt for financial years 2018-19 to 2022-23 and Statistics
Mauritius and MoFEPD Website

A sustainable fiscal policy is one where the Debt-GDP ratio is stable or declining over a
period. As of the end of June 2023, the PSD-to-GDP ratio (gross basis) registered a
decrease of some 4.8 percentage points to reach 81.1 per cent compared to 85.9 per cent as
of the end of June 2022.

With effect from 23 March 2020, the COVID-19 (Miscellaneous Provisions) Act 2020
revised Section 6(1A) of the Public Debt Management Act of 2008 requires that the public
sector debt be calculated on a “net basis”.

As of 30 June 2023, Cash and cash equivalents and equity investments of Rs 67.9 billion
were deducted from the gross PSD figure of Rs 495.6 billion to reach a net PSD figure of
Rs 427.7 billion.

As of 30 June 2023, the PSD-to-GDP ratio on a net basis decreased from 73.7 per cent in
2021-22 to 70 per cent in 2022-23.

Ministry’s Response

The sharp increase in public sector debt over the last five years is mainly due to the
various measures taken by the Government in the wake of the COVID-19 pandemic.

The Public Debt Management Act was amended in the Finance (Miscellaneous) Act
2023 to reinstate a public sector debt ceiling set at 80 per cent of GDP.

14
ANNUAL STATEMENTS - TREASURY
II BCG Debt Servicing over the last five Financial Years

The BCG debt servicing consisted of capital repayments, interest payments on BCG
Domestic and External Debts and management service charges on these debts. Government
debt servicing as per Statement D1 – ‘Detailed Statement of Expenditure of the
Consolidated Fund’ for the past five financial years is shown in Table 2-7.

Table 2-7 Government Debt Servicing for Financial Years 2018-19 to 2022-23

30.06.2019 30.06.2020 30.06.2021 30.06.2022 30.06.2023

Particulars Rs million Rs million Rs million Rs million Rs million


Interests*
External Debt 710.6 637.6 577.4 552.0 1,265.3
Domestic Debt 11,937.0 12,727.6 11,837.3 12,698.1 14,343.8
Management
3.5 24.3 70.4 12.6 33.2
Service Charges
Sub Total 12,651.1 13,389.5 12,485.1 13,262.7 15,642.3

Capital
Repayments
External Debt 4,067.2 10,875.1 4,949.4 5,153.6 15,543.6
Domestic Debt** 66,857.6 66,363.1 92,979.1 109,829.5 96,741.5
Sub Total 70,924.8 77,238.2 97,928.5 114,983.1 112,285.1

Total Government 83,575.9 90,627.7 110,413.6 128,245.8 127,927.4


Debt Servicing

Source: Treasury Accounting Systems

Note: GDP 2022-23 – Rs 610,986 million (source: Website – Statistics Mauritius, Quarterly National
Accounts 3rd Quarter 2023)
* Interest is computed on an accrual basis
** The Treasury’s policy before the financial year 2020-21 was not to include redemption of Treasury Bills,
Treasury Certificates, Treasury Notes, Saving Notes and Saving Bonds in Government Debt Servicing
(Statement D1). The capital repayments for domestic debt for 2018-19 and 2019-20 have been adjusted to
include these redemptions.

15
ANNUAL STATEMENTS - TREASURY
Findings

Government Debt Servicing over the past five Financial Years

Table 2-8 Interest Payments on BCG Debt

2018-19 2019-20 2020-21 2021-22 2022-23


Recurrent Revenue (Rs million) 104,907 99,585 129,494 131,196 146,481
Interest Payments* (Rs million) 12,651 13,390 12,485 13,263 15,642
Total Government Debt Servicing 83,576 90,628 110,414 128,246 127,927
Total Recurrent Expenditure
111,922 134,916 138,797 139,494 158,110
(Rs million)
Total Expenditure** (Rs million) 202,655 243,566 297,278 283,660 292,848
GDP (Rs million) 507,740 471,094 456,341 522,920 610,986
Interest Payments/GDP (per cent) 2.5 2.8 2.7 2.5 2.6
Interest Payments/Recurrent
12.1 13.4 9.6 10.1 10.7
Revenue (per cent)
Interest Payments/Total Recurrent
11.3 9.9 9.0 9.5 9.9
Expenditure (per cent)
Total Government Debt
Servicing/Total Expenditure 41.2 37.2 37.1 45.2 43.7
(per cent)
Source: Statement AF, D1, Statistics Mauritius and NAO workings

* Interest includes management service charges


** The Treasury’s policy before the financial year 2020-21 was not to include redemption of Treasury Bills,
Treasury Certificates, Treasury Notes, Saving Notes and Saving Bonds in Government Debt Servicing
(Statement D1). The total expenditure (Statement D1) for 2018-19 and 2019-20 has been adjusted to include
capital repayments for the above-mentioned domestic debt.

Over the past five financial years, interest payments on BCG Debt have increased from
Rs 12,651 million to Rs 15,642 million, reflecting an increase of 23 per cent.

The interest payments on Government Debt to GDP ratio of 2.6 per cent for 2022-23
was above the target set of 2.3 per cent as stated in Estimates 2022-23. However, the
ratio ranged between 2.5 to 2.8 per cent from 2019 to 2023, significantly below the
3.5 per cent limit set by the MoFEPD.

The share of interest payments in revenue receipts declined significantly from the
financial year 2019-20 to the financial year 2020-21 and it showed an increasing trend
from 9.6 per cent in the financial year 2020-21 to 10.7 per cent in the financial year
2022-23 (Chart 1). Additionally, the actual interest payments as a ratio of recurrent
revenue for the financial year 2022-23 were higher than the 8.8 per cent target specified
in the Estimates 2022-2023 and the benchmark of 10.5 per cent.

Total Government Debt Servicing increased from Rs 83,576 million in 2018-19 to


Rs 127,927 million in 2022-23. The share of Government debt servicing in total
Government expenditure (Statement D1 – Detailed Statement of Expenditure of the
Consolidated Fund) was significant for the period 2018-19 to 2022-23 ranging from
37.1 per cent to 45.2 per cent.

16
ANNUAL STATEMENTS - TREASURY
Chart 1 Government Debt Cost Indicators

15

12.5

10

7.5

2.5

0
2018/19 2019/20 2020/21 2021/22 2022/23

Interest Payments as % of Recurrent Revenue

Interest Payments as % of GDP

III BCG Debt – Amortised Cost Rs 445.1 billion (Nominal value Rs 449.1 billion)

As of 30 June 2023, BCG Debt at amortised cost totalled Rs 445.1 billion, consisting of
Rs 366.6 billion BCG Domestic Debt and Rs 78.5 billion BCG External Debt.

(a) BCG Domestic Debt – Amortised Cost Rs 366.6 billion

BCG Domestic Debt comprised Government of Mauritius (GOM) Treasury Bills, GOM
Treasury Certificates, GOM Treasury Notes, GOM Bonds, Silver Bonds and Loan from
SIC Development Co. Ltd

BCG Domestic Debt with a nominal value of Rs 365.2 billion, was stated at an amortised
cost of Rs 366.6 billion as of 30 June 2023. Amortised cost reflects the present value of
the future cash flows of the debt, using the effective interest rate method. This method
allocates the interest expense over the relevant period and adjusts the carrying amount of
the debt accordingly.

Findings

BCG Domestic Debt constituted 82 per cent of Total BCG Debt

BCG Domestic Debt made up 82 per cent of the total Debt of BCG and increased from
Rs 328.1 billion (at amortised cost) in the financial year 2021-22 to Rs 366.6 billion in the
financial year 2022-23.

It is noted that Government Securities to the tune of Rs 11.3 billion (Nominal Value) as of
30 June 2022 provided as collateral by local banks to foreign institutions which were
previously classified under BCG External Debt as ‘Government Securities Held by

17
ANNUAL STATEMENTS - TREASURY
Non-Residents’ are now being reclassified under BCG Domestic Debt as these are still held
by local banks rather than foreign financial institutions.

Loan from SIC Development Co Ltd

Loan from Export-Import Bank of India to SBM (Mauritius) Infrastructure Development


Company Ltd

In May 2017, SBM (Mauritius) Infrastructure Development Company Ltd (SBMIDC)


entered into a Dollar Credit Line Agreement with the Export-Import Bank of India (EXIM)
under which EXIM agreed to extend to the SBMIDC two Dollar Line of Credit (LOC) for
US $ 500 million and US $ 190 million signed in May 2017 and January 2022 respectively.

On 17 October 2022, the First Amendatory to the Dollar Credit Line Agreement was signed
between SBMIDC and EXIM to reflect a decrease in the two Dollar Line of Credit amount
from US $ 500 million to US $ 375 million and from US $ 190 million to US $ 90 million.

The disbursements under the two Dollar Line of Credit as of 30 June 2023 are given in
Table 2-9.

Table 2-9 Disbursements under the LOC as of 30 June 2023

LOC 1 LOC 2

US $ million US $ million

Original LOC 500 190

Amended LOC 375 90

Disbursement as at 30 June 2023 292 73

Source: MoFEPD Records

The disbursements under LOC 1 were made mainly to Metro Express Ltd
(US$ 253.8 million) and National Housing Development Co Ltd (US$ 24.3 million) and
the disbursement under LOC 2 were made to Metro Express Ltd.

Loan from SIC Development Co Ltd to the Government of Mauritius

SIC Development Co Ltd (SICDC) was to issue Redeemable Preference Shares to


SBMIDC to finance projects to be implemented under the said Dollar Credit Line
Agreement.

On 5 April 2019, a Financing Agreement was signed between the SICDC and the
Government of Mauritius. Under the terms of the agreement, the SICDC agreed to extend
to Government a loan of US$ 71 million from funds under LOC to finance projects to be
implemented by different Ministries. The loan has a term of 20 years, with a moratorium
period of seven years and an annual interest rate of 1.9 per cent.

18
ANNUAL STATEMENTS - TREASURY
On 28 November 2022, Addendum No. 1 to the Financing Agreement was signed between
the SICDC and the Government of Mauritius to reflect an increase of US$ 9 million in the
loan amount from US$ 71 million to US$ 80 million extended to the Government by the
SICDC.

Total amount disbursed as of 30 June 2023 in respect of seven projects totalled


US$ 9,507,907 (Amortised cost US$ 7,461,094, equivalent to Rs 346 million), including
capitalised interests.

As a result of Addendum No. 1, the Government will have to bear an additional cost
annually to SICDC of US$ 200 for maintenance fees and Rs 28,000 for management fees.

Maturity Structure of Government Securities

Debt maturity and repayment profile indicate a commitment on the part of the Government
to repay the debt or service the debt. Table 2-10 indicates the maturity profile of the
outstanding Government Securities as of 30 June 2023.

Table 2-10 Maturity Structure of Government Securities

Maturity Treasury Treasury Treasury GOM Silver


Period Bills Certificates Notes Bonds Bonds Total %
Rs Rs Rs Rs
million Rs million million Rs million million million
2023-24 23,353 16,258 19,799 18,186 - 77,596 21
2024-25 - - 24,180 36,378 - 60,558 17
2025-26 - - 18,567 32,607 - 51,174 14
2026-27 - - - 27,375 - 27,375 7
2027-28 - - - 21,802 - 21,802 6
2028-29
Onwards - - - 120,022 6,246 126,268 35
Total 23,353 16,258 62,546 256,370 6,246 364,773 100

Source: Ledger of Respective Securities


Note: Excludes domestic loan of Rs 440.9 million from SICDC

According to the maturity structure of Government Securities, some 21 per cent of


the total debt will mature by June 2024, requiring Rs 77.6 billion to settle those
debts.

In addition, some 38 per cent of the outstanding debts, amounting to


Rs 139.1 billion will be due for repayment between July 2024 and June 2027.

The maturity profile of the outstanding debt as of 30 June 2023 also indicates that
65 per cent of the outstanding debt (Rs 238.5 billion) would be repayable within
five years. The remaining 35 per cent (Rs 126.3 billion) would become due for
servicing after five years.

19
ANNUAL STATEMENTS - TREASURY
Annual Issue of Financial Instruments exceed Redemption, resulting in an Increase
in Debt in the Financial Year 2022-23

Table 2-11 shows the issues and redemptions of the main financial instruments, namely
Treasury Bills, Treasury Certificates, Treasury Notes and Government Bonds for the past
five financial years.

Table 2-11 Issues and Redemptions of Government Securities –


Past Five Financial Years

30 June 30 June 30 June 30 June 30 June


2019 2020 2021 2022 2023
Rs billion Rs billion Rs billion Rs billion Rs billion

Issues 90.3 115.8 107.4 127.9 122.9

Redemption 65.4 64.5 92.9 109.7 96.5

Excess Issues
Over Redemption 24.9 51.3 14.5 18.2 26.4

Source- Reports of Director of Audit and Treasury Financial Statements

Table 2-11 shows that over the past five financial years, the repayments of financial
instruments were less than the amounts issued.

In addition, Silver Bonds amounting to some Rs 207 million were redeemed during the
financial year 2022-23.

(b) BCG External Debt – Amortised Cost Rs 78.5 billion

BCG External Debt comprises ‘Government Securities issued for meeting borrowing
requirements and held by Non-Residents’, ‘External Loans’ and ‘IMF SDR Allocations’.

Findings

BCG External Debt - Marginal Decrease in Financial Year 2022-23

Total BCG External Debt was Rs 78.6 billion as of 30 June 2022, with a marginal decrease
to Rs 78.5 billion as of 30 June 2023.

During the financial year 2022-23, loans for Rs 23.8 billion (at nominal value) were
contracted by the Government from external financial institutions.

20
ANNUAL STATEMENTS - TREASURY
External Debt - Bridge Loan Facility to manage Budgetary Financing Gap

In Estimates 2022-2023, the Government anticipated revenue of Rs 22 billion from ‘Equity


Sale’, of which an amount of Rs 12 billion was expected from the disposal of part of the
shares held in Metro Express Ltd. In September 2022, as Government anticipated that the
disposal process would not materialise, the assistance of the African Development Bank
(AFDB) was sought for a budget Support Loan of US$ 250 million to finance the budgetary
deficit.

Pending disbursement of the loan by the AFDB in May 2023, a bridge loan facility for an
amount of US$ 250 million (Rs 10.8 billion) was contracted by the Government in
November 2022 from Société Genérale, a Financial Services Company, to manage the
budgetary financing gap.

The loan from Société Genérale was contracted for six months and had a higher annual
interest rate of 6.554520 per cent compared to the loan from the AFDB, which had an
interest rate of 5.78 per cent. As per clause 8.1 of the Bridge Loan Facility Agreement
drawn between the Government and Sociéte Générale in November 2022, the interest rate
was to be computed as the aggregate of an applicable margin and Terms Secured Overnight
Financing Rate (SOFR) Reference Rate.

In May 2023, the full loan amount was reimbursed. The debt service cost to the
Government was Rs 11.6 billion, which included Rs 11.3 billion for capital repayment
(including a loss on foreign exchange of Rs 468 million) and Rs 365.3 million for interest
payment.

Recommendation

The Government should carefully plan and estimate its sources of revenue when preparing
the budget estimates to avoid incurring unnecessary expenditure.

Commitment Fees – Rs 4.3 Million

The Government must pay Commitment fees on the amount of loan remaining undisbursed
from time to time as per the scheduled date specified in the Loan Agreement.

During the financial year 2022-23, a total amount of Rs 4.3 million was paid as commitment
fees, of which Rs 1.8 million was paid to Japan International Cooperation Agency (JICA)
in respect of the Grand Bay Sewerage Project and Rs 2.5 million to Hindustan Aeronautics
Ltd in respect of procurement of defence items (Dornier Aircraft and Advanced Light
Helicopter).

The total amount paid as commitment fees on the Grand Bay Sewerage Project from the
year 2011 up to 30 June 2023 amounted to Rs 26.5 million.

Root cause

There was no proper project implementation planning.

21
ANNUAL STATEMENTS - TREASURY
Recommendation

Project implementation should be properly planned when taking external loans to avoid
payment of commitment fees.

IV Contingent Liabilities - Debts of Extra Budgetary Units and Public


Corporations guaranteed by the Government

Debts contracted by Extra Budgetary Units and Public Corporations from Local and
External Sources guaranteed by Government form part of the PSD. These loans are
contingent liabilities of Government in the event of default on the part of the Extra
Budgetary Units and Public Corporations. As reported in Statement L - ‘Statement of
Contingent Liabilities including details of any Loans, Bank Overdraft or Credit Facilities
Guaranteed by the Government as at 30 June 2023’, the extent of the Government liability
in respect of debts from External Sources and Local Sources totalled Rs 31.4 billion and
Rs 7.7 billion, respectively.

The amount of those debts falling due at the end of a particular financial year is accounted
as “Financial Guarantee Liability” in the Statement of Financial Position. As of 30 June
2023, the Financial Guarantee Liability was at Rs 3.2 billion.

Findings

Government Guaranteed External Debt registered a consistent upward trend from


Rs 20.5 billion as of 30 June 2020 to Rs 31.4 billion as of 30 June 2023 while
Government Guaranteed Domestic Debt experienced a decline from Rs 14.2 billion as
of 30 June 2020 to Rs 7.7 billion as of 30 June 2023.

During the financial year 2022-23, fresh guarantees were provided by the Government
with respect to new loans totalling Rs 4.5 billion.

V Non-Guaranteed debt contracted by Public Corporations

Public Corporations Domestic Non-Guaranteed Debt are included in Total Domestic Public
Sector debt.

Findings

As of 30 June 2023, the outstanding balance of those debts stood at Rs 25.6 billion
compared to Rs 16.8 billion as of 30 June 2022, registering an increase of 52 per cent. The
main factors contributing to this increase were:

New overdraft facilities and short-term borrowings on the Money Market Line being
contracted by the Central Electricity Board (CEB) during the financial year 2022-23.
As of 30 June 2023, the total outstanding loan balance of the CEB stood at
Rs 4.6 billion compared to a balance of Rs 120.1 million as of 30 June 2022.

An additional loan of Rs 634 million (US $ 13,800,000) was contracted by the Airport
Terminal Operations Ltd during 2022-23.

22
ANNUAL STATEMENTS - TREASURY
Increase in outstanding loans of the State Trading Corporation from Rs 7.1 billion as
of 30 June 2022 to Rs 9.3 billion as of 30 June 2023.

2.3 Investment

I Investments as of 30 June 2023

Statement F – ‘Statement of Investments’ gives details of all investments made out of


monies standing to the credit of the Consolidated Fund and Special Funds. As of 30 June
2023, investments comprised equity investments in 63 companies (15 quoted companies,
38 unquoted companies and equity participation in 10 public bodies/companies),
redeemable preference shares in one company and other investments, including fixed
deposits in Local Financial Institutions.

As of 30 June 2023, total investments costing Rs 110.1 billion were measured at fair value
of Rs 138.6 billion. The movement of investments during the financial year 2022-23 is
shown in Table 2-12.

Table 2-12 Investments as of 30 June 2023


Quoted Unquoted Equity Redeemable Other Total
Shares Shares Participation/ Preference Investments
Contributed Shares
Capital
Fair Value/ Rs Rs Rs Rs Rs Rs
Amortised
Cost
1 July 2022 717,819,495 81,835,154,830 31,464,327,805 200,000,000 19,526,009,121 133,743,311,251

New 911,034,889 561,662,443 - - 1,472,697,332


investments

Capitalisation 9,330 53,787,211 - - - 53,796,541


of Dividend

Exchange 492 57,399,544 - - - 57,400,036


Difference

Redemption Of - - - - (554,520,000) (554,520,000)


Fixed Deposit

Fair Value (44,882,468) 6,088,058,301 (2,300,330,075) - - 3,742,845,758


Gain/(Loss)

Movement in - - - - 137,360,690 137,360,690


Interest
Receivable

30 June 2023 672,946,849 88,945,434,775 29,725,660,173 200,000,000 19,108,849,811 138,652,891,608

Net Increase/ (44,872,646) 7,110,279,945 (1,738,667,632) - (417,159,310) 4,909,580,357


(Decrease)
during the year

COST
1 July 2022 41,073,345 75,395,876,845 14,010,845,555 200,000,000 19,467,895,000 109,115,690,745

30 June 2023 41,083,167 76,418,098,488 14,572,507,998 200,000,000 18,913,375,000 110,145,064,653

Source – Statement F: Detailed Statement of Investments as at 30 June 2023 and NAO workings

23
ANNUAL STATEMENTS - TREASURY
Findings

Investments in Quoted Shares

The fair value of quoted shares has decreased from Rs 717.8 million as of 30 June 2022 to
Rs 672.9 million as of 30 June 2023. This was mainly due to a fall in the market price of
one company’s shares from Rs 4.80 to Rs 4.50, in which Government hold 149,526,150
shares, resulting in a fair value loss of Rs 44.9 million for investment in that company.

Investments in Unquoted Shares

As of 30 June 2022, the fair value of investments in unquoted shares which stood at
Rs 81.8 billion increased by a net amount of Rs 7.1 billion to Rs 88.9 billion as of
30 June 2023, i.e. by 8.7 per cent. The increase was due to new investments totalling
Rs 911 million in three companies, dividend totalling Rs 53.8 million capitalised in two
other companies, a net exchange gain of Rs 57.4 million for shares held in foreign
companies, a total fair value gain of Rs 7.8 billion for investments in 17 companies and a
total fair value loss of Rs 1.7 billion for investments in 12 companies.

Equity Participation

The Government’s equity participation decreased from Rs 31.5 billion as of 30 June 2022
to Rs 29.7 billion as of 30 June 2023. During the financial year 2022-23, new investment
of Rs 561.7 million was made in one Government Body. Investments in six Government
Bodies recorded a fair value loss totalling Rs 2.9 billion, while investments in two
Government Bodies recorded a fair value gain totalling Rs 556.2 million.

Other Investments

Other investments totalled Rs 19.5 billion as of 30 June 2022 and decreased to


Rs 19.1 billion as of 30 June 2023. The decrease was mainly due to the maturity of the
Government’s fixed deposits of Rs 4.5 million and the early redemption of one Special
Fund’s fixed deposits of Rs 550 million.

II New Investment

Findings

Government new investments during the financial year 2022-23 totalled to Rs 1.5 billion
and included mainly investment in Côte d’Or International Racecourse and Entertainment
Complex Ltd (unquoted shares), Wastewater Management Authority (equity participation)
and Metro Express Ltd (unquoted shares) amounting to Rs 30 million, Rs 561.7 million
and Rs 645.6 million, respectively.

As of 30 June 2023, the Government's total investments in Metro Express Ltd and
Wastewater Management Authority, which cost Rs 13.9 billion and Rs 2.1 billion
respectively, had experienced a decline in value and were worth Rs 9.9 billion and
Rs 768.2 million respectively. Additionally, both these entities were loss-making and
neither of them has ever given the Government a return on its investments.

24
ANNUAL STATEMENTS - TREASURY
III Valuation - Fair Value of Total Investments Rs 138.6 billion

Findings

Net Gain in Fair Value of Investments of Rs 3.7 billion

Fair value gains of Rs 8.3 billion were recorded with respect to investments in only
21 companies out of 52, while investments in 31 other companies had registered fair value
losses totalling Rs 4.6 billion. Moreover, investments in another 11 companies showed
neither gain nor loss in fair value since they either had negative net asset values or their
most recent financial statements were unavailable, or their shares were insignificant.

As a result, during the financial year 2022-23, Government investments costing


Rs 91.0 billion, in quoted shares, unquoted shares and equity participation, experienced a
net gain in fair value of Rs 3.7 billion, representing only four per cent gain.

Investment Measured at Zero Fair Value as at 30 June 2023

Investments, costing some Rs 20.9 billion, were disclosed at zero fair value as at
30 June 2023. Details of these investments are shown in Table 2-13.

Table 2-13 Investments stated at zero Fair Value as of 30 June 2023

Unquoted Year of Cost Price % Net Asset Net Asset


Shares Investment Shareholding Value Value as at
Rs Rs
MauBank 2001-2005, 5,196,266,400 100 (1,286,598,428) 30 June 2022
Holdings 2015-2016
and 2019
National Property 2020-2022 14,780,000,003 100 (852,696,950) 30 June 2022
Fund Ltd

The Mauritius Post 2001-2016 626,111,200 100 (1,229,464,832) 30 June 2022


Ltd
Equity
Participation
National Prior 267,887,202 100 (659,660,396) 31 December
Transport 1.07.01-2018 2014
Corporation
Total 20,870,264,805

Source: Treasury Investment Register and Treasury Workings

The above Government-owned companies have been making losses and their net assets
have been eroded completely, except for Maubank Holdings Ltd, which showed a surplus
only for the year ended 30 June 2022 of Rs 85.6 million. Consequently, the entire
investments of the Government, costing Rs 20.9 billion, have been wiped out by
accumulated losses and were accounted at zero fair value in the Statement of Financial
Position of the Government.

25
ANNUAL STATEMENTS - TREASURY
IV Return on Investments

Findings

Decrease in Dividends Received

As of 30 June 2023, the total cost of investments in Quoted and Unquoted Shares in
Companies amounted to some Rs 76.5 billion.

Dividends received decreased by Rs 160.6 million (25 per cent), from Rs 652.4 million
for the financial year 2021–22 to Rs 491.8 million for the financial year 2022–23. Details
are given in Table 2-14.

Table 2-14 Dividends received during the Financial Years ended


30 June 2022 and 30 June 2023
2022-23 2021-22

Details Investment Number Dividend Dividend Dividend


at Cost of Shares Received per Share Received
Rs Rs Rs Rs
Quoted Shares

Alteo Limited 1,140 462 9,533 20.63 346


Excelsior United Development 37 37 33 0.89 11
Companies Ltd
IBL LTD 125 4 2 0.50 2
Medine Limited 300 30 71 2.37 -
SBM Holdings Ltd 41,058,573 149,526,150 29,905,230 0.20 29,905,230
The Bee Equity Partners Ltd 16 16 960 60.00 14
The Mauritius Development 2 21 3 0.14 3
Investment Trust Co Ltd
The United Basalt Products Ltd 415 5 - - 15
United Docks Ltd 9,600 960 960 1.00 672
Unquoted Shares
AfrAsia Bank Limited 197 3 13 4.33 15
African Export-Import Bank 37,698,193 163 8,635,293 52,977.26 -
African Reinsurance Corporation 41,918,696 9,200 3,547,667 385.62 -
Airports of Mauritius Co Ltd - - - - 500,000,000
Eastern & Southern African Trade 900,726,545 3,800 53,635,024 14,114.48 26,755,652
& Development Bank
Mauritius Housing Company Ltd 59,161,634 12,000,005 4,546,142 0.38 -
Mauritius Telecom Ltd 63,625,174 63,625,174 198,510,543 3.12 92,256,502
National Real Estate Ltd 500,000,000 5,000,000 65,000,000 13.00 -
PTA Reinsurance Company (ZEP-RE) 6,597,729 269,563 152,187 0.56 -
State Informatics Ltd 32,800,000 328,000 7,820,300 23.84 3,516,150
State Investment Corporation Ltd 85,000,000 8,500,000 120,000,000 14.12 -
Total 491,763,961 652,434,612
Source: Treasury Abstract– Item Code 1412: Dividends and Treasury Records

26
ANNUAL STATEMENTS - TREASURY
Investments yielding no Returns during the Financial Year 2022-23

Investments (at cost) totalling Rs 11.8 billion did not yield any return during the financial
year 2022-23. Examples of some of these investments are given in Table 2-15.

Table 2-15 Investments yielding no Returns during 2022-23

Year of Cost Price


Investment Rs
Unquoted Shares
Cargo Handling Corporation Limited 1983-2019 943,600,000

Development Bank of Mauritius Ltd Prior 2001 & 2005-2009 496,150,000


Mauritius Shipping Corporation Ltd Prior 2001 and 2011 290,693,000
Shelter- Afrique 2013 5,239,837
Sugar Investment Trust 2007 and 2011 19,999,980

Equity Participation

Bank of Mauritius 2005, 2011 and 2020 10,000,000,000


State Trading Corporation Prior 2001 400,000

Source: Statement F – Detailed Statement of Investments as at 30 June 2023 and Investment Register

Investments not Yielding any Return Since Acquisition

Investments (at cost) totalling Rs 77.5 billion, representing some 85 per cent of the total
cost of investments in Shares and Equity Participation, did not yield any return since they
were acquired. These shares had a fair value of Rs 82.2 billion as of 30 June 2023. Details
are given in Table 2-16 below.

The Government had more than 90 per cent shareholdings in 15 unquoted companies with
total investments costing Rs 43.8 billion which did not yield any return. Of the 15
companies, six had accumulated profits, whilst seven had accumulated losses as per their
latest financial statements (The audited financial statements of two remaining companies
were unavailable). One of the companies had accumulated surpluses of Rs 11.2 billion as
of 30 June 2022. The Government invested Rs 3 billion in that company and fair value as
of 30 June 2023 amounted to Rs 20.6 billion.

27
ANNUAL STATEMENTS - TREASURY
Table 2-16 Investments not yielding any Return Since Acquisition
Number of Cost of Fair Value of %
years of Investment Investment Shareholding
Quoted Shares Investment* Rs Rs
1 United Investment Ltd 23 48 4,608 Insignificant
2 Blue Life Ltd 11 1,976 302 Insignificant
3 Semaris Ltd 5 472 60 Insignificant
Unquoted Shares
4 African Development Bank 32 2,747,425,198 3,794,467,524 0.63
5 Mauritius Educational Development Co. Ltd 24 16,000,000 27,509,629 99.94
6 Multi Carrier Mauritius Ltd 23 219,000,000 159,123,131 100.00
7 MauBank Holdings Ltd 23 5,196,266,400 - 100.00
8 Rodrigues Educational Development Co.Ltd 23 29,000 5,175,700 29.00
9 The Mauritius Post Ltd 23 626,111,200 - 100.00
10 Industrial Finance Corporation of Mauritius 18 355,317,588 299,922,094 39.49
(Equity) Ltd (formerly SME Equity Fund Ltd)
11 National Housing Development Company Ltd 17 200,000,000 453,462,795 99.50
12 Landscope (Mauritius) Ltd 15 3,040,370,633 20,607,852,721 98.92
13 Polytechnics Mauritius Ltd 11 299,937,111 1,450,052,685 100.00
14 National Property Fund Ltd 9 14,780,000,003 - 100.00
15 Mauritius Africa Fund Ltd 8 183,980,000 185,693,653 100.00
16 SME Mauritius Ltd 7 25,000 7,997,123 100.00
17 Mauritius Multisports Infrastructure Ltd 6 5,238,856,213 4,785,839,556 97.05
18 Metro Express Ltd 6 13,895,369,142 9,864,989,399 100.00
19 The Lux Collective 6 14 - Insignificant
20 Industrial Finance Corporation of Mauritius Ltd 4 1,000,000 618,437 0.06
(formerly Investment Support Programme Ltd)
21 Airport Holdings Ltd 3 26,000,100,000 25,038,273,049 51.00
22 Ekada Capital Ltd 3 1 - Insignificant
23 ISM Ltd 3 5,000,000 5,000,000 100.00
24 National Fishing Company Ltd 3 100,000 100,000 100.00
25 Mauritius Institute of Biotechnology Ltd 2 100,000,000 96,095,808 100.00
Equity Participation (Contributed Capital **)
26 Rose Belle Sugar Estate Board 37 98,844,218 3,539,607,133
27 Mauritius Livestock Marketing Cooperative 32 450,000 924,620
Federation Limited
28 Central Water Authority 31 1,862,250,913 10,025,618,526
29 Economic Development Board 20 79,782,747 178,535,480
30 Civil Service College 12 15,000,000 44,158,402
31 Mauritius Cane Industry Authority 11 173,803,732 843,678,653
32 National Transport Corporation 8 267,887,202 -
33 Wastewater Management Authority 7 2,074,089,186 768,193,664
Total 77,476,997,997 82,182,894,752

Source: Statement F – Detailed Statement of Investments as of 30 June 2023 and Investment Register
*The number of years of investments has been determined from initial investments in the company
** Contributed Capital does not involve the issue of shares. As per IPSAS, Contributed Capital means future
economic benefits or service potential that has been contributed to the entity by the Government

28
ANNUAL STATEMENTS - TREASURY
Recommendations

The Accounting Officer may consider the establishment of an Investment Committee or


an Investment Management Unit with the following duties:

Formulation and review of policies to improve investment management.

Development of methodologies or tools for appraisal of investment.

Analysis and appraisal of proposed investment.

Management of investment portfolio in terms of performance and meeting financial


objectives.

Formulation of a dividend policy for payment of a reasonable returns from profit-


making bodies.

Close monitoring of the Government-owned companies’ performance since huge


public funds are being invested every year in these entities.

Review the functioning of all loss-making Government-owned companies, including


those whose networth had been completely eroded, and take necessary steps to improve
their financial performance or to make recommendations on the future course of action.

Ministry’s Response

Dividends are dependent upon the financial position of the institutions/enterprises


concerned.

2.4 Outstanding Loans financed from Revenue as of 30 June 2023

The Government advances loans to Statutory Bodies, Private Bodies, Other Bodies and
Private Individuals mainly to finance the implementation of capital projects. A review of
the records about these loans has been carried out.

I Increasing trend in Outstanding Loans reaching Rs 10.6 billion (at amortised


cost) as of 30 June 2023

Findings

The balance of outstanding loans at amortised cost has increased from Rs 10.0 billion as at
30 June 2022 to Rs 10.6 billion as of 30 June 2023, as shown in Table 2-17.

29
ANNUAL STATEMENTS - TREASURY
Table 2-17 Balance of Outstanding Loans
Percentage
Name of Borrowers 30 June 2022 30 June 2023 Increase/(Decrease)
Amortised Cost Amortised Amortised Cost
Cost Cost over
Previous Year
Rs Rs Rs
Central Water Authority 3,378,797,079 3,382,211,178 3,649,772,707 8

Wastewater Management 3,230,963,350 3,305,243,928 3,651,367,212 13


Authority

Metro Express Limited 827,547,401 1,051,380,968 964,833,590 17

Cargo Handling 682,117,385 733,096,229 645,495,393 (5)


Corporation Ltd

Airport Terminal 486,355,195 633,940,210 544,476,998 12


Operations Ltd

Development Bank of 327,156,834 438,408,223 352,958,746 8


Mauritius Ltd

National Housing 329,595,099 356,474,876 321,856,607 (2)


Development Co. Ltd

Airports of Mauritius Co. 329,358,354 164,029,682 146,871,137 (55)


Ltd

Mauritius Cooperative 168,067,674 - - (100)


Central Bank Limited

Landscope (Mauritius) Ltd 108,256,251 81,560,733 78,888,717 (27)

Rodrigues Business Park 64,423,211 145,000,000 100,719,670 56


Development Co. Ltd

Others (Note 1) 69,284,491 164,973,433 157,796,676 128

TOTAL 10,001,922,324 10,456,319,460 10,615,037,453


Source: Treasury records
Amortised cost reflects the present value of the future cash flows of the debt, using the effective interest rate
method.
Cost represents the balance of the loan outstanding as of 30 June 2023 (Statement M – Statement of all
Outstanding Loans financed from Revenue as at 30 June 2023)

Note1: Others include: The Municipal Council of Beau Bassin-Rose Hill, Rodrigues Regional Assembly,
Mauritius Cane Industry Authority, Pamplemousses District Council, Rivière du Rempart District Council,
Mauritius Housing Company Ltd, Repatriation Expenses and National Transport Corporation

As shown in Table 2-17, the balance of loans outstanding as of 30 June 2023 has increased
for all Statutory Bodies and Private Bodies compared to the previous financial years, except
for Cargo Handling Corporation Ltd, National Housing Development Co. Ltd, Airports of
Mauritius Co. Ltd and Landscope (Mauritius) Ltd which have declined. As for the
Mauritius Cooperative Central Bank Limited, part of the loan was repaid and the remaining
balance was written off upon liquidation.

30
ANNUAL STATEMENTS - TREASURY
II New Loans advanced during the Financial Year 2022-23

During the financial year 2022-23, new loans for Rs 558.2 million (at cost) were advanced
to three Statutory Bodies, three Private Bodies, and Private Individuals, as shown in
Table 2-18.

Table 2-18 New Loans disbursed during 2022-23

Rs
Organisations/Individuals

Wastewater Management Authority 217,908,675


Rodrigues Business Park Development Co. Ltd 50,000,000
Development Bank of Mauritius Ltd 46,691,262
Central Water Authority 33,513,398
Metro Express Ltd 110,000,000
National Transport Corporation 100,000,000
Individuals – Repatriation Expenses 135,414
Total 558,248,749
Source: Treasury records (at cost)

Findings

Out of a total amount of Rs 558.2 million disbursed, Rs 348.1 million were used to
fund the implementation of capital projects of four organisations, while two loans of
Rs 110 million and Rs 100 million were advanced to Metro Express Ltd (MEL) and
National Transport Corporation, respectively.

As of 30 June 2023, MEL owed Rs 1.1 billion (at cost) inclusive of interest
capitalised. However, as of November 2023, the company had not yet repaid the first
instalment of Rs 43.8 million on loan contracted in the financial year 2019-20, due
on 1 June 2023 after a grace period of three years.

III Significant Debts of Two Statutory Bodies – Rs 7.3 billion (at amortised cost)

Loans are granted to the Central Water Authority (CWA) to finance the implementation of
water distribution projects, while the Wastewater Management Authority (WMA) has
received loans from the Government since January 2013 for the implementation of
sewerage projects. As of 30 June 2023, the outstanding debts of the CWA and the WMA
stood at Rs 3.6 billion and Rs 3.7 billion, respectively, representing 68.9 per cent of the
total outstanding loans of Rs 10.6 billion.

31
ANNUAL STATEMENTS - TREASURY
Findings

Central Water Authority

Outstanding Loans of Rs 3.6 billion (at amortised cost) as of 30 June 2023

Despite its inability for loan repayment, an amount of Rs 33.5 million (at cost) was
advanced to the CWA during the financial year 2022-23 for the implementation of nine
ongoing capital projects.

Arrears of Loan Capital, Interests and Penalties

As per Statement N – ‘Statement of Arrears of Revenue as at 30 June 2023’, the total


amount due for payment by the CWA comprising principal, interests and penalties as
of that date totalled Rs 1.5 billion representing 46.9 per cent of the total loan in arrears
of Rs 3.2 billion.

In January 2023, MoFEPD informed NAO that an Ad-Hoc Committee has been set up
at the level of the CWA to develop strategies to increase revenue of the Authority and
reduce its costs. The Committee would review the proposed price adjustments in User
Fees and Charges regulated by CWA Regulations. It was expected that the first
meeting would be held by the end of January 2023.

However, as of 26 December 2023, information on current developments was still


being awaited.

Expected Credit Loss Allowance

As of 30 June 2023, Rs 97.8 million was recognised as expected credit loss allowance
in respect of the total outstanding loan balance of the CWA.

Wastewater Management Authority

Outstanding Loans of Rs 3.7 billion (at amortised cost) as of 30 June 2023

During the financial year 2022-23, a total amount of Rs 217.9 million (at cost) was
advanced to the WMA to finance the implementation of sewerage projects. As at date,
neither repayment of principal amounts due since 2018 nor payment of
interests/penalties had been effected by the Authority due to financial difficulties.

Arrears of Loan Capital, Interests and Penalties

As of 30 June 2023, the total amount due for payment by the WMA comprising
principal, interests and penalties as per ‘Statement N – Statement of Arrears of
Revenue as at 30 June 2023’ amounted to Rs 1.6 billion, representing 50 per cent of
total loan in arrears of Rs 3.2 billion.

32
ANNUAL STATEMENTS - TREASURY
In January 2023, MoFEPD informed NAO that an Ad-hoc Committee had been set up
at the level of the WMA to examine a strategic plan with a view to improve the
institution’s financial situation. As short-term remedial measures, the Waste Water
(Miscellaneous Waste Water Services) (Fees) (Amendment) Regulations 2022 was
promulgated on 21 November 2022 whereby fees applicable for different waste water
services provided by the WMA have been reviewed. In addition, the selling price of
treated effluent has been increased. With regard to long term remedial measures, it
was expected that the Ad-hoc Committee would submit its recommendations to the
WMA Board in March 2023.

However, as of 26 December 2023, information on recent developments in the matter


was still being awaited.

Expected Credit Loss Allowance

As of 30 June 2023, Rs 97.9 million was recognised as expected credit loss allowance
in respect of the total outstanding loan balance of the WMA.

Root Cause

Advances were granted to fund the implementation of essential services and projects where
recovery was slow or remote due to the organisations’ weak financial situation.

Recommendation

The Government should closely monitor the performance of the Ad-hoc Committees set up
at the level of the CWA and the WMA and ensure remedial measures are devised to address
these two organisations’ financial situation.

IV Arrears for Rodrigues Regional Assembly – Rs 30.7 million

As per ‘Statement N – Statement of Arrears of Revenue as at 30 June 2023’, the Rodrigues


Regional Assembly (RRA) owed a total amount of Rs 30.7 million to the Government
comprising principal of Rs 14.7 million and interests/penalties of Rs 16.0 million. The
loan was contracted in 2011 to finance development projects in the fisheries sector. Only
part of the loan has been reimbursed in the financial year 2015-16.

Findings

Loan Balance in Arrears

Loans were granted to five fishing cooperatives as a contribution towards purchasing


fishing vessels to promote outer lagoon fishing in Rodrigues. In January 2023, NAO was
informed that the matter was still at the level of MoFEPD and no decision has yet been
made regarding the outstanding balance of the loan.

However, as of 26 December 2023, information on the stand to be taken by MoFEPD was


still being awaited.

33
ANNUAL STATEMENTS - TREASURY
Expected Credit Loss Allowance

As of 30 June 2023, an amount of Rs 604,034 was recognised as expected credit loss


allowance in respect of the total outstanding loan balance of the RRA.

Ministry’s Response

In January 2024, the RRA informed that even with the repossession of the fishing vessels,
the outstanding loan balance cannot be recovered.

In light of the above, a policy decision will be taken in consultation with the RRA regarding
the outstanding loans.

V Write off of the Mauritius Cooperative Central Bank Limited (Liquidated)


outstanding loan - Rs 122.5 million

As per claims issued as of 31 December 2022, the total amount of loan due by the Mauritius
Cooperative Central Bank Limited amounted to Rs 169.7 million, comprising principal of
Rs 81.3 million and interest of Rs 88.4 million.

Findings

In March 2023, the Government decided that the remaining balance of Rs 47.2 million at
the Bank of Mauritius Realisation Account be remitted to the Consolidated Fund to settle
part of the principal amount due on the loan. Approval was also given to write off the
remaining balance of Rs 122.5 million.

VI Write off of arrears of Airports of Mauritius Co Ltd – Rs 6.7 million

In the year 2011, the Airports of Mauritius Co Ltd contracted a loan of USD 19 million
from the Government. The Company settled the loan amount falling due as of 31 March
2023 in April 2023.

Finding

On 28 April 2023, MoFEPD approved the write-off of the penalty fee amounting to
Rs 6.7 million charged for the period March 2020 to March 2023 on the outstanding loan
balance.

Overall Recommendation

The Government may review the functioning of all the Bodies with outstanding loans and
take necessary steps to improve their financial performance.

In other cases, the Government may consider not overburdening the Bodies with fresh loans
and finding alternative means of financing mechanisms.

34
ANNUAL STATEMENTS - TREASURY
2.5 Statement AE and Statement AF - Statement of Comparison of Budget
Estimates and Actual Amounts for the Financial Year 2022-23

I Actual Deficit for the Financial Year 2022-23 totalling Rs 29.8 billion
The approved budget was for the financial year 2022-23, and it included estimates of
revenue as well as estimates of recurrent and capital expenditure of the Government
appropriated by votes. The original Estimates of revenue was Rs 150 billion. The National
Assembly approved the original Estimates of expenditure of Rs 152 billion on
29 June 2022 and the Supplementary Estimates of Rs 5.4 billion on 11 April 2023.
A summary of the Comparison of Budget Estimates and Actual Amounts for the financial
year 2022-23 is provided in Table 2-19.
Table 2-19 Comparison of Budget Estimates and Actual Amounts
for the Financial Year 2022-23
Original Total Actual Variance
Estimates Provisions Amount
Revenue Budget Rs million Rs million Rs million Rs million
Recurrent Revenue 148,282 148,282 146,481 (1,801)
Capital Revenue 1,718 1,718 1,879 161
Total Revenue 150,000 150,000 148,360 (1,640)
Expenditure Budget
Recurrent Expenditure 154,500 159,956 158,080 (3,580)
Capital Expenditure 18,392 21,781 20,061 (1,669)
Total Expenditure *172,892 181,737 178,141 (5,249)
Difference between Total Revenue and (22,892) (31,737) (29,781) (6,889)
Total Expenditure (Budget/Actual
Balance)
Budget/Actual Balance before Net (4.0) % (5.5) % (4.9) % -
Acquisition of Financial Assets as % of
GDP
Net Acquisition of Financial Assets 19,179 20,085 (1,377) (20,556)
Adjustment for Difference in Cash and 510 510 1,199 689
Accrual Interest
Government Borrowing Requirements 3,203 11,142 29,959 (26,756)
Government Borrowing Requirements 0.6 % 1.9 % 4.9 %
as % of GDP
Domestic Financing 8,049 20,688 21,538 (13,489)
Foreign Financing (4,846) (9,546) 8,421 (13,267)
Source: Statement AF, Statement of Comparison of Budget Estimates and Actual Amounts for the
financial year 2022-23 (Classification of Expenses by Nature) and NAO workings
Note: Estimated GDP 2022-23 – Rs 576.1 billion (Source- Estimates 2022-2023) and GDP 2022-23 –
Rs 611 billion (Source: Website – Statistic Mauritius, Quarterly National Accounts 3rd Quarter 2023)
*Estimate Total Expenditure – Rs 172,892 million comprised Original Estimates of Expenditure -
Rs 152,000 million PLUS Expenditure Charged Statutorily (Public Service Pension PLUS Government Debt
Servicing – Management Service Charges and Interests) – Rs 24,500 million LESS Acquisition of Financial Assets
- Rs 3,609 million
- Total Provisions are Revised Estimates

35
ANNUAL STATEMENTS - TREASURY
Findings

Actual Deficit Higher Than Estimates

The total revenue of the Government in the financial year 2022-23 was Rs 148.4 billion,
which was Rs 1.6 billion less than the estimated figure of Rs 150 billion. On the other
hand, Government expenditure was Rs 178.1 billion, which represented an increase of
Rs 5.2 billion over the estimated figure of Rs 172.9 billion.

As a result, the budget deficit for the financial year 2022-23, which was estimated at
Rs 22.9 billion, increased to Rs 29.8 billion. The budget deficit, as a percentage of GDP,
estimated at 4 per cent, was actually at 4.9 per cent of GDP.

For the financial year 2022-23, a net receipt of Rs 19.2 billion was budgeted for movement
in financial assets. However, since the Government could not sell its investments in shares
as estimated for Rs 22 billion, a net acquisition of financial assets of Rs 1.4 billion was
recorded.

II Borrowing Requirements and Debt to GDP Ratio

Due to Government’s unprecedented fiscal policy response to the COVID-19 pandemic,


the Budgetary Central Government (BCG) debt to GDP ratio, which was 57 per cent in the
financial year 2018-19, increased to 74 per cent and 86 per cent in the financial years
2019-20 and 2020-21, respectively. The Government’s borrowing requirements increased
significantly in the financial years 2019-20 and 2020-21 and amounted to Rs 62.4 billion
and Rs 45.8 billion, respectively.

Since the financial year 2021-22, the objective of the Government has been to reduce the
debt-to-GDP ratio. The Government’s borrowing requirements in the financial year
2021-22 were Rs 22 billion and the debt to GDP ratio decreased to 78.7 per cent from
86 per cent in the financial year 2020-21.

Details of the borrowing requirements for 2022-23 are provided in Table 2-20.

36
ANNUAL STATEMENTS - TREASURY
Table 2-20 Government’s Borrowing Requirements for the Financial Year 2022-23

Original Actual
Estimates Amount
Rs million Rs million
Domestic Financing
Government Securities
Issues 96,881 122,923
Redemptions (89,632) (96,736)
Financing from SIC Development Co. Ltd
Drawdown 800 80
Repayments - (6)
Financing from cash and cash equivalents - (4,723)
Sub-Total Domestic Financing 8,049 21,538

Foreign Financing
Government Securities held by Non-Residents
Issues - 145
Redemptions (6,694) (99)
Foreign Loans
New Loans 6,048 23,819
Repayments (4,200) (15,444)
Sub-Total Foreign Financing (4,846) 8,421

Total Government Borrowing Requirements


(Budget/Actual Deficit) 3,203 29,959
BCG Debt ( Gross as of 30 June 2023) 392,116 449,087
GDP 576,100 610,986
BCG Debt to GDP 68.1% 73.5%

Source: Estimates 2022-2023, Statement AF and Statement J – Statement of Public Sector Debt
as at 30 June 2023.
Source of GDP: Estimated GDP 2022-23 – Rs 576,100 million (Source- Estimates 2022-2023) and
GDP 2022-23 – Rs 610,986 million (Source: Website – Statistic Mauritius, Quarterly
National Accounts 3rd Quarter 2023)

Findings

Increased Borrowing Requirements Over Estimates

The actual Government’s borrowing requirements for the financial year 2022-23 were
Rs 29,959 million and were significantly higher than the estimated figure of
Rs 3,203 million.

Net Borrowings Higher than Net Borrowing Requirements/Actual Deficit

The budget deficits are normally financed from borrowings as well as from the use of
surplus funds in cash and cash equivalents. In the Estimates 2022-23, net borrowings of

37
ANNUAL STATEMENTS - TREASURY
Rs 3.2 billion were to be used to finance the fiscal deficit and no funds were to be disbursed
from the Government’s cash and cash equivalents.

However, as per the actual results, net borrowings of Rs 34,682 million (Net Government
Securities – Rs 26,187 million, Net Financing from SIC Development Co. Ltd -
Rs 74 million, Net Government Securities held by Non-Residents – Rs 46 million and Net
Foreign Loans – Rs 8,375 million) were raised to finance the fiscal deficit of
Rs 29,959 million and Rs 4,723 million was transferred to cash and cash equivalents.

Estimated BCG Debt target and Debt to GDP not achieved

Actual borrowings required to finance the budget deficit increased BCG Debt from
Rs 411.4 billion as of 30 June 2022 to Rs 449.1 billion as of 30 June 2023, exceeding the
BCG Debt target of Rs 392.1 billion in the Estimates 2022-23.

The actual BCG Debt to GDP ratio of 73.5 percent was 5.4 percentage points higher than
the estimate of 68.1 percent due to the higher BCG Debt as of 30 June 2023. The
Government’s aim to reduce the Debt Ratio, as stated in the Estimates 2022-2023, has not
been achieved.

Furthermore, the BCG Debt-to-GDP ratio of 73.5 per cent as of 30 June 2023 remained
still high compared to the 57 per cent recorded in 2018-19.

2.6 Statement B - Revenue and Expenditure of the Consolidated Fund

Section 3 of the Finance and Audit Act provides that the Consolidated Fund be:

(a) Credited with all revenues of the Government and any other money properly accruing
to it; and

(b) Charged only with expenses on the authority of warrant issued by the Minister
responsible for the subject of Finance.

The Government received revenue from ‘taxes’, ‘social contributions’, ‘grants’, ‘property
income’, ‘sales of goods and services’, ‘fines, penalties and forfeits’, ‘transfers’,
‘reimbursements of loans’, ‘International Monetary Fund Special Drawings Rights (IMF
SDR’, ‘issue of Government securities’ and ‘loans from foreign Governments and
International Organisations’.

Expenditure consists of expenses incurred on the functioning of Government Ministries


and Departments, grants given to various public institutions, acquisition of property, plant
and equipment for the Government, investments in shares, loans advanced to State-owned
enterprises, debt servicing and public service pensions.

The Consolidated Fund reported a surplus of Rs 3.5 billion for the financial year 2022-23
compared to deficits reported for financial years 2018-19 to 2021-22, as shown in
Table 2-21.

38
ANNUAL STATEMENTS - TREASURY
Table 2-21 Revenue and Expenditure of the Consolidated Fund -
Past Five Financial Years

Financial Revenue Expenditure Surplus/(Deficit)


Year Rs Rs Rs
2018-19 136,132,378,988 147,154,358,137 (11,021,979,149)
2019-20 178,906,756,635 189,555,981,185 (10,649,224,550)
2020-21 289,103,836,427 297,277,874,464 (8,174,038,037)
2021-22 275,882,127,819 283,659,839,277 (7,777,711,458)
2022-23 296,372,270,693 292,848,110,615 3,524,160,078
Source: Statement B – Abstract Account of Revenue and Expenditure of the Consolidated Fund

I Revenue of the Consolidated Fund

Findings

Increase in Revenue of the Consolidated Fund

Revenue increased from Rs 275.9 billion in the financial year 2021-22 to Rs 296.4 billion
in the financial year 2022-23, a net amount of some Rs 20.5 billion.

Significant Decrease in Withdrawals from Income of Quasi Corporations

Findings

The budgeted revenue and actual revenue received from Quasi Corporations for financial
years 2021-22 and 2022-23 are shown in Table 2-22.

Table 2-22 Estimated and Actual Revenue Received from Quasi Corporations

Year 2022-23 Year 2021-22


Quasi Corporations Original Actual Original Actual
Estimates Revenue Estimates Revenue
of Revenue of Revenue
Rs Rs Rs Rs
Information and 65,000,000 157,737,650 60,000,000 249,571,767
Communication
Technology Authority
Financial Services 1,200,000,000 490,851,411 2,350,000,000 2,220,680,025
Commission
Mauritius Ports Authority 300,000,000 150,000,000 1,150,000,000 2,974,543,440
State Trading Corporation - - 2,400,000,000 -
Central Electricity Board - - 3,500,000,000 3,000,000,000
Total 1,565,000,000 798,589,061 9,460,000,000 8,444,795,232

Source: Statement D – Detailed Statement of Revenue of the Consolidated Fund for Financial Years
2021-22 and 2022-23 – Item Code 1413 – Withdrawals from Income of Quasi Corporations

39
ANNUAL STATEMENTS - TREASURY
During 2021-22, 89 per cent of the estimated figure was received and the percentage was
reduced to 51 per cent in 2022-23.

Out of estimated figure of Rs 300 million, a sum of Rs 150 million was paid by Mauritius
Ports Authority in August 2022 and the remaining Rs 150 million in August 2023. The
income from the Financial Services Commission of Rs 491 million was significantly lower
than the estimated amount of Rs 1.2 billion.

II Expenditure of the Consolidated Fund

Finding

Increase in Expenditure of the Consolidated Fund

Expenditure increased from Rs 283.7 billion in the financial year 2021-22 to


Rs 292.9 billion in the financial year 2022-23, a net amount of some Rs 9.2 billion.

2.7 Special Funds

Special Funds are established under Section 9 of the Finance and Audit Act. There are
currently 25 Special Funds in operation, either regulated by an Act or Regulations made
under the Finance and Audit Act.

The cash/bank/investment balances of eight of the 25 existing Special Funds were


deposited with the Accountant-General and accounted for in the Financial Statements of
Government.

I Significant Amounts appropriated through Supplementary Appropriations and


disbursed to Special Funds near the close of the Financial Year

During the financial year 2022-23, grants of Rs 1.5 billion, Rs 417 million and Rs 5 billion
were disbursed to the National Resilience Fund (NRF), the National Environment and
Climate Change Fund (NECCF) and the COVID-19 Projects Development Fund (CPDF)
respectively.

Findings

No provision was made for Grants to the three Special Funds mentioned above in the
Estimates 2022-23. A sum of Rs 1.5 billion was reallocated from several other Vote
items and was disbursed to the National Resilience Fund on 29 June 2023.

Grants amounting to Rs 5 billion and Rs 417 million for CPDF and NECCF,
respectively, were approved by the National Assembly on 11 April 2023 through the
Supplementary Appropriation (2022-2023) Act 2023.

As in the preceding two financial years, in the financial year 2022-23 funds provided
through Supplementary Estimates were transferred to the Special Funds near the end
of the financial year. On 14 June 2023 and 29 June 2023, a total sum of Rs 5 billion

40
ANNUAL STATEMENTS - TREASURY
was disbursed to CPDF, while Rs 417 million was disbursed to NECCF on
8 June 2023.

As of 30 June 2023, the Special Fund Cash Balances were Rs 9.1 billion, Rs 1.7 billion
and Rs 2.9 billion for CPDF, NECCF and NRF, respectively, totalling Rs 13.7 billion.
As of 30 June 2022, the respective balances were Rs 8.5 billion, Rs 2.4 billion and
Rs 4.2 billion, totalling Rs 15.1 billion.

Total investments of these three Special Funds amounted to Rs 18.3 billion as of


30 June 2023

As of 30 June 2023, CPDF’s unspent balance of Rs 27.1 billion represented 77 per cent
of the total grant of Rs 35 billion disbursed to the CPDF since its creation in April
2020.

II Accounting for Special Funds

Findings

During the financial year 2022-23, three of the eight Special Funds accounted for in
Statement H, namely the NRF, NECCF and CPDF, received funds from Government to
finance their operations. Funds disbursed to these Special Funds amounting to Rs 6.9 billion
were accounted as expenditure under the item ‘Grants’ in the Statement of Financial
Performance.

As of 30 June 2023, the Cash/Bank balances of the eight Special Funds totalling
Rs 14.8 billion represented some 59.3 per cent of the Government’s Cash and Cash
Equivalents of Rs 24.8 billion and Investments balances included Rs 18.5 billion
(amortised cost) in respect of four Special Funds. This makes a total of Rs 33.3 billion
accounted as Assets in the Statement of Financial Position as of 30 June 2023.

The Asset figure was supported by Net Assets/Equity (Special Funds) of Rs 33.3 billion.

Therefore, funds already disbursed to the Special Funds at year end were accounted as Cash
and Cash Equivalent of Government as of 30 June 2023.

41
ANNUAL STATEMENTS - TREASURY
42
ANNUAL STATEMENTS - TREASURY
3 – THE JUDICIARY

3.1 Incompleteness of Government Asset Register

The Government Asset Register (GAR) was developed in 2017 to enable the recording of
Non-Financial Assets (NFAs) acquired by Ministries and Government Departments.

GAR is considered as a tool for ensuring efficiency and effectiveness in the management
of NFAs acquired by Government.

Findings

NFAs acquired as from 1 July 2017 up to 1 July 2022, recorded on the excel sheet
template circularised by the Treasury, were still not recorded in GAR. As such, there
is the risk of unauthorised modification/s, amendment/s or deletion/s of NFA records.

Equipment, Software and IT System developed totalling some Rs 71.8 million were
also not recorded in GAR.

Root Cause

The Accounting Officer has not yet developed a policy to ensure the proper implementation
of GAR.

Recommendation

The Accounting Officer has to ensure that GAR is implemented.

Judiciary’s Response

Data has been recorded in GAR as from 1 July 2022. Arrangements are now being
made to migrate data recorded on the Excel Sheet since 1 July 2017 to 30 June 2022
to GAR.

As regards the Equipment, Software and IT System developed for a sum of


Rs 71.8 million and not recorded in GAR, the data are actually being collected from
the IT Section and relevant entries in GAR will be made accordingly.

3.2 Key Deliverables and Key Performance Indicators (KPI) do not include all the
related activities of the Entity

The Annual Estimates of the Judiciary for financial year 2022-23, showed ‘Delivery of
Judgment’ as its main service.

Finding

The KPI shown in the Annual Estimates related to cases lodged and held at the Supreme
Court Division only.

43
Root Cause

The Accounting Officer has not devised a proper KPI system for the Judiciary as a whole.

Recommendation

The Accounting Officer has to work out KPI for the Judiciary as a whole.

Judiciary’s Response

Arrangements have been made for the Annual Estimates to include henceforth cases lodged
at all Courts.

3.3 Non-compliance with Regulation – Risk Management Framework not set up

As per the Budget Speech 2021-2022, a formal Risk Management (RM) Framework was
to be set up at each Ministry/Department. The MoFEPD issued Circular No. 8 of
28 December 2021, to provide guidelines for RM Framework smooth implementation.

Finding

Evidence was not seen to effect that an RM Framework was set up.

Root Cause

The Accounting Officer did not initiate action to implement the RM Framework.

Recommendation

The Accounting Officer should ensure that RM Framework is implemented.

Judiciary’s Response

The objective of the Judiciary is to hear cases and to deliver judgments and is not akin to
other ministries and departments and the control of its achievement is totally different.
There is already an effective risk management mechanism for effective risk management
and the scheme is manned by a pool of Court Officers and Judicial Officers under the
supervision of the Honourable Chief Justice.

44
THE JUDICIARY
4 – PRIME MINISTER’S OFFICE,
MINISTRY OF DEFENCE, HOME AFFAIRS AND EXTERNAL
COMMUNICATIONS AND MINISTRY FOR RODRIGUES,
OUTER ISLANDS AND TERRITORIAL INTEGRITY
4.1 DEFENCE AND HOME AFFAIRS
4.1.1 Upgrading Government House/Centre - Delay in Execution of Projects

In November 2020, the Secretary for Home Affairs applied for new fire certificates for the
Old Government House (OGH) and the New Government Centre (NGC).

In February 2021, the Mauritius Fire and Rescue Service (MFRS) did not approve the
applications, as both premises were not complying with the required fire safety measures
and recommended, amongst others, the carrying out of upgrading works at OGH and NGC.

In this context, an amount of Rs 20 million was earmarked in the financial years 2021-22
and 2022-23 for carrying out the upgrading works at OGH and NGC. However, funds
earmarked were not fully utilised in both financial years and the upgrading works became
long overdue.

Findings

Under-utilisation of Funds Earmarked in Financial Year 2021-22

In April 2022, an amount of Rs 10 million, out of the Rs 20 million earmarked was


transferred to the Ministry of Health and Wellness, as approved by the Ministry of
Finance, Economic Planning and Development (MoFEPD).

As of 30 June 2022, only an amount of Rs 255,000 out of the remaining Rs 10 million,


was expensed, while the remaining amount of Rs 9.7 million lapsed.

Under-utilisation of Funds Earmarked in Financial Year 2022-23

As of 30 June 2023:

only some Rs 7.2 million out of Rs 20 million earmarked were spent, while the
remaining Rs 12.8 million, representing 64 per cent of funds earmarked lapsed; and

an amount of Rs 25 million earmarked for other upgrading works, namely, the


waterproofing works at OGH and safety handrail on ledges of each floor at NGC was
also unutilised and lapsed.

Root Cause

The non-obtention of specifications from the Ministry of National Infrastructure and


Community Development (MNICD) for OGH and the non-responsiveness of bids for
upgrading works at NGC delayed the implementation of the project.

45
Recommendation

The Accounting Officer should ascertain that funds earmarked are utilised for the intended
purpose and project works are executed in a timely manner.

Division’s Response

Funds could not be spent due to cancellation of contracts.

Delays in completion of works are due to several factors and unforeseen circumstances.

4.1.2 Upgrading of the New Government Centre – Significant Delay in Works


Completion

The Defence and Home Affairs Division (DHAD) initiated actions for major repair works,
consisting of civil, electrical and mechanical components to be carried out at NGC.

Lapses in the Bidding Exercise

In November 2021, DHAD launched a tender for the provision of “Fire Detection, Fire
Fighting and Ancillary Works (Civil, Electrical and Mechanical) at NGC, Port Louis”,
estimated to cost Rs 13.6 million, inclusive of VAT. However, in January 2022, the bidding
process was cancelled, as the bids received were non-responsive.

In March 2022, DHAD relaunched the tender exercise for the same project.

Findings

In its report dated 18 May 2022, the Bid Evaluation Committee (BEC) recommended
the award of the contract to a Grade D Contractor, who quoted the highest price of
Rs 13.2 million, inclusive of VAT, despite the fact that the latter did not initially submit
technical catalogues for some items as well as the registration of the proposed electrical
engineer with the Council of Registered Professional Engineers and a signed
Curriculum Vitae (CV) of the Contract Manager, as required in the bidding documents
of March 2022.

The Grade A+ Contractor, who quoted the lowest price of Rs 12.9 million, inclusive
of VAT, was not retained as the latter did not submit key financial information,
certified copies of financial statements or audited accounts for the last three years and
evidence of liquid assets of Rs 1.5 million which BEC considered as major omissions
to the requirements of the bidding documents of March 2022.

During the preliminary examination of the bids, BEC noted that information as
mentioned above, were not provided by both bidders.

In line with Section 37(1) of the Public Procurement Act (PPA), BEC sought
clarifications from the Grade D Contractor on 11 May 2023. However, BEC did not
provide the opportunity to the Grade A+ Contractor to submit the missing information.

46
PRIME MINISTER’S OFFICE, MINISTRY OF DEFENCE, HOME AFFAIRS AND EXTERNAL COMMUNICATIONS
AND MINISTRY FOR RODRIGUES, OUTER ISLANDS AND TERRITORIAL INTEGRITY
Root Cause

BEC did not evaluate the bids with due care.

Recommendations

BEC should

fully comply with Section 37 of PPA; and

evaluate bids with due care and ensure transparency and equity in the execution of its
duties.

Division’s Response

BEC considers the non-submission of the Central Manager’s signed CV and the
registration of the Electrical Engineer by Bidder 2 as a minor deviation and requested
Departmental Bid Committee to seek these documentary evidences from the latter.

BEC considered the non-submission of evidence by Bidder 1 in respect of liquid asset


of Rs 1.5 million to show its financial soundness for meeting its contractual obligations
for the project as a major deviation.

Lapses at the Execution Phase of the Contract

The Contract for the Provision of Fire Detection, Fire Fighting and Ancillary Works at
NGC was awarded to the Grade D Contractor on 14 June 2022 for the sum of
Rs 13.2 million, inclusive of VAT.

The intended contractual completion date was initially fixed at 12 February 2023, but later
extended to 15 February 2023.

As of end December 2023, DHAD effected payments of some Rs 7.2 million to the
Contractor.

Findings

The Contractor initially submitted insurance certificates on 7 July 2022, but these were
not in accordance with Section 13.1 of the General Conditions of Contract.

The insurance policies in due form were submitted to MNICD and DHAD on
30 August 2022, that is, two and a half months after the issue of the Letter of
Acceptance (LoA).

DHAD handed over the site of work on 2 September 2022. However, the Contractor
started work on 4 October 2022, that is, after one month instead of 14 days after the
handing over exercise, as stipulated in the LoA.

47
PRIME MINISTER’S OFFICE, MINISTRY OF DEFENCE, HOME AFFAIRS AND EXTERNAL COMMUNICATIONS
AND MINISTRY FOR RODRIGUES, OUTER ISLANDS AND TERRITORIAL INTEGRITY
In September 2023, the Contractor did not fix the leakage problem in the dry riser
system promptly and in addition, removed a landing valve from the dry riser at level 3
without informing DHAD and MNICD.

According to surveys carried out by a Technical and Mechanical Officer (TMO) in


September 2023, the Contractor installed only 85 out of the 119 fire extinguishers
(71 per cent). As of 11 October 2023, 113 out of the 119 fire extinguishers were
installed.

The TMO carried out surveys in September and October 2023 and reported that the
fire hose reels were kinked at level 4 (east and west wings and lobby), level 5
(west wing), level 7 (lobby) and Sir Harilal Vaghjee Hall respectively.

According to the TMO’s Survey Report dated 16 October 2023, the manometer at
level 3 (west wing) was not working and there was no screw to hold the wheel on the
landing valve of the dry riser.

Root Causes

MNICD did not adequately supervise and monitor the upgrading works at NGC.

There was inadequate coordination between DHAD and MNICD.

Officers in the rank of Management Support Officer and Office Management Assistant
of the Accommodation Unit dealt with the Contractor regularly, instead of higher
officials at DHAD.

Recommendations

DHAD should take appropriate action to sanction the Contractor for breaching the
conditions of the Contract Agreement.

A Project Coordination Committee should be set up at the level of DHAD to oversee


and coordinate the implementation of the project, monitor progress reports and attend
to bottlenecks in project implementation.

Division’s Response

The Contractor did not comply with the several requests made by DHAD to start the
works in time.

The Ministry was not satisfied with the works of the Contractor and due to its poor
performance, it was referred to the Performance Review Committee for necessary
action.

Inadequate Monitoring of the Upgrading Works

The officers of MNICD were designated as the Project Manager for monitoring and
supervising the upgrading works.

48
PRIME MINISTER’S OFFICE, MINISTRY OF DEFENCE, HOME AFFAIRS AND EXTERNAL COMMUNICATIONS
AND MINISTRY FOR RODRIGUES, OUTER ISLANDS AND TERRITORIAL INTEGRITY
Findings

According to DHAD, works were still ongoing, but officers of MNICD scheduled the
taking over of the site on two occasions:

In August 2023, works pertaining to the dry riser were still not completed.

In October 2023, the Civil Engineer, Electrical Engineer and Mechanical Engineer
informed that works were completed to their satisfaction, despite the fact that the
Contractor had to attend to several outstanding works relating to the hose reel, the door
closet of the dry riser and the six missing fire extinguishers, amongst others.

As of 22 December 2023, MNICD did not submit an updated status of work to DHAD.

No practical completion and handing over certificates were seen in the files.

Root Cause

MNICD did not adequately monitor the upgrading works.

Recommendation

DHAD should ascertain that the representatives of MNICD fulfil their roles and
responsibilities for overseeing and monitoring project works effectively.

Division’s Response

All technical matters are dealt with by officers of MNICD and some project monitoring
meetings were being held during the execution of the projects

4.1.3 Old Government House – Not complying with Fire Safety Measures

Pursuant to MFRS (Fire Safety Plan and Fire Certificate) Regulations 2018, any premises
other than residential premises, exceeding seven storeys, commercial and industrial
premises, to which the public has access, should hold a valid fire certificate.

Absence of a Fire Certificate

OGH which covers a total surface area of 3,585 square metres, has a strategic location next
to the Chamber, National Assembly and Parliament House and accommodates around
80 occupants, mostly from MoFEPD.

Findings

As of 22 December 2023, OGH did not comply with the said Regulations.

DHAD applied for a fire certificate in November 2020 and October 2023. However,
MFRS did not approve both applications, as OGH did not satisfy the fire safety norms.

49
PRIME MINISTER’S OFFICE, MINISTRY OF DEFENCE, HOME AFFAIRS AND EXTERNAL COMMUNICATIONS
AND MINISTRY FOR RODRIGUES, OUTER ISLANDS AND TERRITORIAL INTEGRITY
Despite funds were earmarked in both financial years 2021-22 and 2022-23, DHAD
did not launch bidding procedures for the upgrading works, as recommended by the
MFRS.

Root Cause

As of December 2023, MNICD did not submit the scope of works, technical specifications
and drawings for upgrading works despite several requests from DHAD since January
2023.

Recommendations

The Accounting Officer should ascertain that:

the bidding exercise for the upgrading works at OGH is launched promptly;

challenges encountered in the execution of the upgrading works at NGC do not recur;
and

upgrading works at OGH, as recommended by MFRS are carried out without any
further delay to enable compliance with the MFRS Act and Regulations.

Division’s Response

The National Assembly, NGC and the New Treasury Building have now obtained their
fire certificates following upgrading works.

This Office has initiated procedures for obtaining the fire certificate since November
2020 and is ensuring that OGH complies with the safety norms as required in the
improvement notice submitted by MFRS. The delay in preparing the bidding
documents by MNICD is due to the complexity of the building and difficulties in
accessing same due to security levels.

This Office is still following up with MNICD to obtain the technical specifications for
the launching of tenders.

Expired Fire Extinguishers

The Fire Code requires that all portable fire extinguishers shall be charged, tested and
maintained in fully operational conditions.

Findings

As of November/December 2023,

ten fire extinguishers at OGH had already expired;

the new fire extinguishers procured and received on 15 November 2023, were still not
installed; and

50
PRIME MINISTER’S OFFICE, MINISTRY OF DEFENCE, HOME AFFAIRS AND EXTERNAL COMMUNICATIONS
AND MINISTRY FOR RODRIGUES, OUTER ISLANDS AND TERRITORIAL INTEGRITY
DHAD was still in the process of procuring brackets to securely wall mount the fire
extinguishers.

Root Cause

Officers posted at the Accommodation Unit did not perform adequate inspections to ensure
that the fire extinguishers were in fully operational condition.

Recommendations

Officers posted at the Accommodation Unit should

conduct regular inspections to ensure that adequate fire extinguishers are installed at
OGH; and

ensure that the new fire extinguishers are installed without delay, while the expired
ones are replaced.

The Accounting Officer should ascertain that annual servicing is carried out to keep the fire
extinguishers in working order at all times.

Division’s Response

22 Fire Extinguishers have already been serviced.

Brackets will be installed in the coming weeks.

Inspection of fire extinguishers at OGH has now been entrusted to MoFEPD as they
mainly occupy OGH.

4.1.4 Removal, Supply, Installation, Testing, Commissioning and Maintenance of


Lifts at the New Government Centre - Non-compliance to Condition of Contract

On 16 April 2021, DHAD awarded the contract for the removal of existing lifts, supply,
installation, testing, commissioning and maintenance of three new lifts at NGC for the sum
of Rs 15.2 million, inclusive of VAT.

The works started on 19 July 2021 and the intended completion date, initially scheduled
for 16 March 2022, was extended to 26 April 2022.

The Defects Liability Period (DLP) which was initially scheduled to end on 15 March 2023,
was extended to 30 June 2023.

As of 30 June 2023, some Rs 12.4 million were disbursed to the Contractor and liquidated
damages of Rs 49,000 were applied for the delay of 58 days in supplying the Building
Management System.

Pursuant to paragraph 24 of LoA, all works shall be closely supervised and monitored by
the Energy Services Division (ESD) and representative(s) of the Prime Minister’s Office.
51
PRIME MINISTER’S OFFICE, MINISTRY OF DEFENCE, HOME AFFAIRS AND EXTERNAL COMMUNICATIONS
AND MINISTRY FOR RODRIGUES, OUTER ISLANDS AND TERRITORIAL INTEGRITY
Findings

The site was handed over on 12 July 2021, that is, with a delay of eight weeks.

The performance guarantee of Rs 1.5 million, covering the period February to June
2023, as well as the insurance policy covering the period February 2022 to June 2023
were not seen in files.

Pursuant to paragraph 7 of LoA, a contract shall be signed within 28 days after the
successful bidder received the LoA. However, no signed agreement was seen in files.

In April 2023, DHAD informed ESD about the issues relating to the leakages
emanating from the ceilings of the three lifts due to condensation, dysfunctioning of
the control system of the lifts and the non-functioning of the air conditioning system.
However, as of December 2023, the Contractor had not taken necessary action to
address the issues.

As of December 2023, DHAD had not entered into a new contract with the Contractor
for the maintenance of lifts, after the DLP, as stated in the LoA.

Root Causes

ESD did not perform a proper follow-up with the Contractor to ascertain that all defects
in the works were addressed in a timely manner.

The former Manager, Procurement and Supply did not ascertain that the contract was
signed as required by the LoA.

ESD did not draw the attention of DHAD to the fact that the performance security and
insurance policy needed to be renewed upon expiry.

Recommendation

The Accounting Officer should ascertain that the Contractor takes remedial actions without
further delay.

Division’s Response

The non-conformity of the insurance cover and performance security as per the tender
document template, delayed the handing over of the site.

The renewed performance guarantee and insurance covers were not received as per
DHAD’s records.

The Procurement Section has been instructed to keep records and timely request to the
Contractor to submit the necessary documents in due time.

The Procurement Section will ensure that after obtention of all contractual documents
from the Contractor, the agreement be prepared and signed by both parties within 7
days.
52
PRIME MINISTER’S OFFICE, MINISTRY OF DEFENCE, HOME AFFAIRS AND EXTERNAL COMMUNICATIONS
AND MINISTRY FOR RODRIGUES, OUTER ISLANDS AND TERRITORIAL INTEGRITY
The Contractor tried several solutions to the problems emanating from the ceilings of
the three lifts but was unsuccessful. A final solution would be found by end of February
2024.

The Maintenance Agreement will be signed, once the final payment is effected. In the
meantime, the maintenance for the lifts is currently being undertaken by Contractor.

4.1.5 Risk Management Framework - Not yet developed

In December 2021, MoFEPD issued a circular regarding the establishment of Risk


Management (RM) in the Public Sector.

To facilitate the process, MoFEPD developed Guidelines for establishing RM Framework


in Ministries.

According to the Guidelines, the Accounting Officer is accountable for the overall
governance and has the ultimate responsibility for RM.

Findings

As of December 2023, DHAD did not apply the principles of good governance regarding
the development of:

A RM Framework to identify and assess the overall potential risks that may affect its
smooth running; and

The RM policy which commits itself to identify, assess and mitigate risk, amongst
others.

Root Cause

The Accounting Officer did not set up a RM Committee responsible for the establishment
of a RM Framework and development of a RM Policy.

Recommendation

The RM Framework and the policy, guided by a strategy and implementation plan, should
be developed and approved by the Accounting Officer without delay.

Division’s Response

The RM Framework is a new concept on which no training was initially given to the
Audit Committee.

A RM policy has already been developed and action is being taken for the setting up
of a RM Committee under the guidance of Internal Control Unit.

53
PRIME MINISTER’S OFFICE, MINISTRY OF DEFENCE, HOME AFFAIRS AND EXTERNAL COMMUNICATIONS
AND MINISTRY FOR RODRIGUES, OUTER ISLANDS AND TERRITORIAL INTEGRITY
4.1.6 Procurement – Non-compliance with Regulations and Circular

The National Audit Office has reviewed the procurement of goods and services for an
amount of Rs 146 million that was launched during the financial year 2022-23.

Annual Procurement Plan - Shortcomings

Pursuant to Section 10 of the Public Procurement Regulations 2008, a public body shall, at
the beginning of every financial year, prepare an Annual Procurement Plan (APP). It shall
be published on its website, periodically updated and revised.

Findings

The Manager, Procurement and Supply did not fully comply with Section 10 of the Public
Procurement Regulations 2008 as highlighted below:

The APP for the procurement of goods and services for an estimated amount of some
Rs 2.2 million was prepared in September 2022, almost three months after the
beginning of the financial year.

The APP was neither published on the Ministry’s website nor periodically updated and
revised. The last update made to the APP was in December 2022.

The procurement of goods and services amounting to some Rs 144 million were not
recorded in the APP.

Division’s Response

Due to oversight, the APP was not uploaded on the website.

Remedial actions have already been initiated to record all procurement activities in the
APP, quarterly updated and published on the website.

Return on Procurement Activities - Late Submission

Circular No. 11 of 2021, issued by the Public Procurement Office (PPO), requires Public
Bodies to submit a Return on Procurement Activities (RoPA) on a half-yearly basis by
15 January for period July to December and 15 July for the period January to June.

Finding

The Acting Manager, Procurement and Supply did not comply with the Circular as the
RoPA for the period 1 July 2022 to 30 June 2023 was submitted on 8 August 2023.

Root Cause

The Acting Manager, Procurement and Supply did not comply with the Regulations and
Circular.

54
PRIME MINISTER’S OFFICE, MINISTRY OF DEFENCE, HOME AFFAIRS AND EXTERNAL COMMUNICATIONS
AND MINISTRY FOR RODRIGUES, OUTER ISLANDS AND TERRITORIAL INTEGRITY
Recommendation

The Acting Manager, Procurement and Supply should comply with Section 10 of the Public
Procurement Regulations 2008 and Circular No. 11 of 2021.

Division’s Response

The Acting Manager, Procurement and Supply is ensuring that RoPA is submitted within
the deadline.

4.1.7 Government Asset Register - Not updated

The Government Asset Register (GAR) was developed to enable the recording of
Non-Financial Assets (NFAs) acquired by Ministries/Departments.

It is considered as a major tool for ensuring efficiency and effectiveness in the management
of NFAs acquired by Government.

As from the financial year 2022-23, GAR users were required to record assets acquired
directly in GAR System.

Findings

Only acquisition of NFAs of some Rs 567,000 for the month of July 2022 were
recorded in GAR system.

As of November 2023, details of NFAs, excluding security equipment, acquired during


the period August 2022 to November 2023, for a total amount of some Rs 51.7 million
were neither recorded in the GAR nor in the Application Desktop Integrator.

Root Cause

The service provider of the GAR system was still working on splitting of the single asset
book into separate books.

Recommendation

The Accounting Officer should ensure that all NFAs are recorded in GAR system in a
timely manner.

Division’s Response

DHAD is in the process of updating its assets in the newly created Asset Book.

55
PRIME MINISTER’S OFFICE, MINISTRY OF DEFENCE, HOME AFFAIRS AND EXTERNAL COMMUNICATIONS
AND MINISTRY FOR RODRIGUES, OUTER ISLANDS AND TERRITORIAL INTEGRITY
4.1.8 Governance Issues – Non-compliance with Legislation

Provisions have been made in various legislations to impose a statutory responsibility on


Accounting Officers and Boards of Statutory Bodies with the objective of strengthening
accountability and transparency in the public sector.

Non-submission of Report on Performance

As of 18 December 2023, the Report on Performance of the Prime Minister’s Office, and
Government Information Service, Pay Research Bureau and Civil Status Division falling
under its aegis of the Prime Minister’s Office for the financial year 2022-23 had not yet
been submitted to the MoFEPD, despite the statutory deadline being 31 October 2023.

Annual Reports not laid before the National Assembly

The Statutory Bodies (Accounts and Audit) Act requires a copy of the annual report and
audited accounts of every Statutory Body to be laid before the National Assembly at the
earliest opportunity.

As of 29 January 2024, the Information and Communication Technologies Authority,


falling under the purview of the Prime Minister’s Office, had not yet laid its audited
Financial Statements for the financial year 2021-22 before the National Assembly, although
it had been certified by NAO on 14 December 2023.

NAO is of the view that the Ministry should exercise control over Statutory Bodies
operating under its aegis to ensure that they fulfil their statutory responsibilities regarding
the preparation of financial statements, their submission for audit and tabling before the
National Assembly.

56
PRIME MINISTER’S OFFICE, MINISTRY OF DEFENCE, HOME AFFAIRS AND EXTERNAL COMMUNICATIONS
AND MINISTRY FOR RODRIGUES, OUTER ISLANDS AND TERRITORIAL INTEGRITY
4.2 CIVIL AVIATION
4.2.1 Risk Management Framework – Not yet developed

In December 2021, the Ministry of Finance, Economic Planning and Development


(MoFEPD) issued a circular regarding the establishment of Risk Management (RM) in the
Public Sector.

In view of facilitating the process, MoFEPD developed Guidelines for the establishment of
a RM Framework in Ministries/Departments. According to the Guidelines, the Accounting
Officer is accountable for the overall governance and has the ultimate responsibility for
RM.

Finding

There was no formal RM policy in place and no risk assessments was carried out for the
financial year 2022-23 as per Circular No. 8 of 2021 from MoFEPD.

Root Cause

The Accounting Officer did not initiate action to implement the RM framework as per
Circular No. 8 of 2021.

Recommendations

The Accounting Officer should establish a RM Framework and Strategy within


reasonable time.

The composition and the mandate of the RM Committee including roles,


responsibilities and accountability should be clearly defined and approved by the
Accounting Officer.

Department’s Response

The RM Framework is being implemented.

4.2.2 Follow-up of Matters Raised in the Audit Report 2021-22

A follow up of matters raised in the Audit Report for the financial year 2021-22 was carried
out. The Civil Aviation Department was requested to inform the National Audit Office of
the actions that have been taken to address the findings and recommendations in the Report.
The information along with evidence collected through review of files and documents were
assessed and discussed with the Department.

The status on actions taken on findings since the publication of the Audit Report are
summarised below. Out of the two findings, one has been resolved (50 per cent) and one
has not been resolved (50 per cent).

57
PRIME MINISTER’S OFFICE, MINISTRY OF DEFENCE, HOME AFFAIRS AND EXTERNAL COMMUNICATIONS
AND MINISTRY FOR RODRIGUES, OUTER ISLANDS AND TERRITORIAL INTEGRITY
SN Findings Department’s Response – NAO Comments
Status as of January 2024

Delay in Upgrading/construction of the Permit Office (Page 55)


1 The Contract for consultancy Funds have been allocated for the
services was awarded to a Service financial year 2023-24 for
Provider for some Rs 1.1 million in consultancy services only and
December 2018 and terminated on 5 construction works will start
August 2022. The Ministry of during the next financial year.
National Infrastructure and
Community Development was
requested to take over the project on
24 August 2022.

On 4 April 2023, the Department


was informed that the design of the Not Resolved
project may only be initiated as from
the financial year 2023-24 as the
technical sections of the Ministry are
currently working on other fast track
projects.

As of June 2023, the construction


work had not yet started, more than
four and a half years after a decision
was taken for its erection.
(Pg 55, Para. 4.1.1)
Air Ground High Frequency Communication Equipment - Procurement and other Issues
(Page 56)
2 The existing equipment had already The Site Acceptance Test
completed its service life since year Certificate was signed on
2020 and was reported by the Civil 9 February 2023 as evidence that
Aviation Department as obsolete. the equipment was successfully
Spare parts were also not easily installed and commissioned.
available and an urgent replacement
of the equipment was needed. A Payments have already been
review of the project for the effected except retention money. Resolved
replacement of the equipment
revealed that cost estimates were
unrealistic and that there was delay
in the replacement of the equipment.
(Pg 56, Para. 4.1.2)

58
PRIME MINISTER’S OFFICE, MINISTRY OF DEFENCE, HOME AFFAIRS AND EXTERNAL COMMUNICATIONS
AND MINISTRY FOR RODRIGUES, OUTER ISLANDS AND TERRITORIAL INTEGRITY
4.3 POLICE SERVICE
4.3.1 Acquisition of Specialised Equipment for Rs 21.6 million - Nugatory
Expenditure

The Report of the Commission of Inquiry on Drug Trafficking was published in July 2018,
wherein it was recommended that the Drug Enforcement Agency be provided with
sufficient electronic devices to probe into suitcases and to track telephone conversations.

In the Budget Estimates 2018-19, an amount of Rs 25 million was provided for the
acquisition of modern specialised technological tools and equipment for the Anti-Drug and
Smuggling Unit (ADSU) to enhance operations on all fronts.

In March 2019, procurement procedures were initiated for the acquisition of two equipment
for ADSU and quotations were sought from a few companies. In April 2019, a letter of
award was issued to a foreign company for the supply of Equipment 1, Equipment 2 and a
training component for a contract amount of US$ 325,550, US$ 225,000 and US$ 10,000
respectively, that is a total of US$ 560,550 (some Rs 20 million). The delivery of all the
items was scheduled for September 2019.

Findings

Equipment 1 Delivered in August 2019

Only Equipment I, costing US$ 325,550 was received in August 2019. An amount of
Rs 21.6 million, representing 90 per cent of the contract sum of US$ 560,550 was already
paid to the supplier in September 2019. Training on Equipment 1 was dispensed to ADSU
Officers by representative of the supplier from 21 January to 24 January 2020.

Malfunctioning of Equipment 1

The Police Service reported to the supplier on 27 January 2020 that limitations were noted
with Equipment 1. The Police Service also pointed out that Equipment 1 must be fully
functional within the shortest possible delay.

On 30 January 2020, the supplier replied that issues identified on Equipment 1 during the
training would be remedied. Due to COVID-19 pandemic and travel restrictions, other
training sessions were delivered by the supplier from 14 to 18 November 2022. During the
training, a malfunction was noted with a component in Equipment 1. On 20 November
2022, the trainer took the defective component to the supplier’s laboratory for repairs. The
Police Service has been liaising with the supplier for the repair of the equipment.

Equipment 2- Not Delivered

Equipment 2 costing US$ 225,000 was to be delivered in September 2019. However, no


delivery was made and the Police Service did not withhold payment for Equipment 2.
Ninety per cent of the cost, that is, Rs 8.9 million (US$ 202,500) was effected.

59
PRIME MINISTER’S OFFICE, MINISTRY OF DEFENCE, HOME AFFAIRS AND EXTERNAL COMMUNICATIONS
AND MINISTRY FOR RODRIGUES, OUTER ISLANDS AND TERRITORIAL INTEGRITY
Relevant Documents not Produced

Documents to the effect that, the procurement was undertaken by the most competitive
method or that an assessment was made to ascertain that the contract price was fair and
reasonable, was not made available. No signed agreement between Police Service and the
supplier was seen.

Status as at October 2023

After more than four years since an amount of Rs 21.6 million was paid in September 2019
for the acquisition of Equipment 1 and 2, Equipment 1 has not yet been commissioned and
used and Equipment 2 has not yet been delivered.

Root Cause

Inadequate planning and monitoring of the procurement and contract management by the
Officer responsible for Procurement Unit.

Recommendation

The advice of the Attorney-General’s Office should be sought for the way forward.

Department’s Response

On 8 January 2024, the representative of the supplier came to Mauritius with


Equipment 1 with upgraded software technology and Direction Finder. He provided
training to ADSU Officers between 8 to 12 January 2024. During the training, a
malfunction in a component was encountered. The supplier concluded that the repairs
would have to be undertaken abroad at its premises.

The representative of the supplier left the country on 13 January 2024 taking along the
defective component with the undertaking that:

(i) After the repairs, the component would be brought back and connected to the
system by the supplier;

(ii) Training will be dispensed to ADSU Officers, once the component will be in good
working condition; and

(iii) Proper handing and taking over and commissioning of equipment will be effected
in the presence and the satisfaction of both parties.

The Overseas Procurement Section has already liaised with ADSU regarding a
Technical Committee to be held to discuss the possibility of raising a claim against the
supplier and advice of the Attorney-General’s Office will be sought accordingly.

60
PRIME MINISTER’S OFFICE, MINISTRY OF DEFENCE, HOME AFFAIRS AND EXTERNAL COMMUNICATIONS
AND MINISTRY FOR RODRIGUES, OUTER ISLANDS AND TERRITORIAL INTEGRITY
4.3.2 NCG Ships - Lapses in Fleet Management and Procurement Procedures

The National Coast Guard (NCG) is responsible for policing the territorial waters and
Exclusive Economic Zone (EEZ) of the Republic of Mauritius. It has a fleet of five ships,
namely CGS Guardian, CGS Observer, CGS Barracuda, CGS Victory, and CGS Valiant,
used mainly for exercising EEZ surveillance, search and rescue operations and outer islands
support.

For the financial year ended 30 June 2023, the total expenditure incurred on maintenance
of these ships was Rs 47.1 million.

Findings

NCG ships not operating at full Capacity due to delayed Maintenance

Only two out of five Ships in Normal Running Conditions

As of October 2023, only two ships were in normal running conditions, namely
CGS Barracuda, procured at a cost of US$ 58.5 million and commissioned on
12 March 2015 and CGS Valiant, procured at a cost of US$ 18 million and commissioned
in August 2017 respectively.

The refit of the two ships in normal running conditions, that is, CGS Barracuda and
CGS Valiant was due for October 2023 and May 2020 respectively as per Manufacturer’s
requirement. As of November 2023, refit of both ships has not yet been undertaken.

Operational Status of three Ships not in Normal Running Conditions

CGS Guardian- Unavailability of Radar for Navigation and Scheduled Decommissioning


in 2023

CGS Guardian, donated by the Government of India and commissioned in April 1993, was
already 30 years old and was planned to be decommissioned in year 2023. The ship
performed limited trips due to the unavailability of radar for navigation and defects
attributed to aging equipment.

CGS Observer - Under Guarantee Defect Test

CGS Observer, acquired on a free lease from the Government of India, was commissioned
on 21 April 2001, and was permanently transferred to the Government of Mauritius in
March 2017. It has served NCG for more than 22 years. Since July 2023, the ship has been
undergoing Guarantee Defect Tests at a local shipyard company.

CGS Victory-Refit in India

CGS Victory was commissioned in December 2016 and it has sailed to India in September
2023 for refit purposes. The refit, which was due since November 2019, is being carried
out free of charge in India as from September 2023.

61
PRIME MINISTER’S OFFICE, MINISTRY OF DEFENCE, HOME AFFAIRS AND EXTERNAL COMMUNICATIONS
AND MINISTRY FOR RODRIGUES, OUTER ISLANDS AND TERRITORIAL INTEGRITY
This impacted on service delivery of NCG as the surveillance of the territorial waters could
not be effectively carried out due to unavailability of three ships out of five.

Root Causes

There was no proper preventive maintenance plan by the Officer responsible for NCG.

Maintenance of ships was not carried out in accordance with manufacturer’s


instructions.

Recommendation

A proper maintenance plan should be prepared and complied with in accordance with
manufacturer’s requirements.

Department’s Response

The tender for refit of CGS Victory and CGS Valiant to be undertaken in Mauritius
was launched. However, due to non-responsive bids, the refit of the ships could not be
undertaken locally and in time.

The ship operates in a highly saline environment, which is exceedingly corrosive. The
machinery and equipment fitted onboard ships must also be serviced and maintained
regularly to ensure their operational status and achieve optimum performance at sea
during deployments. However, due to a lack of infrastructure facilities, the scheduled
maintenance requiring external assistance is delayed, resulting in an increased
operational cycle of the ship that has often been prolonged beyond recommended
maintenance schedules. With the upcoming Trident Project, the issue of delay in the
maintenance of ships and equipment is likely to be resolved.

CGS Observer -Lapses in Procurement Procedures

Award of Initial Contract for Repair

The ship was reported defective in January 2020. Following tender procedures in August
2021, the contract for the ship's refit was awarded to a local Company for Rs 16.7 million
(inclusive of VAT) on 7 September 2021. The works were scheduled for completion by
23 May 2022.

Additional Repair works

In August 2022, a Technical Committee reported the following:

During the refit works, the Company informed that additional repair works were
required on both the engines and waterjets.

The Company quoted an amount of Rs 14.2 million (inclusive of VAT) for the
additional works.

62
PRIME MINISTER’S OFFICE, MINISTRY OF DEFENCE, HOME AFFAIRS AND EXTERNAL COMMUNICATIONS
AND MINISTRY FOR RODRIGUES, OUTER ISLANDS AND TERRITORIAL INTEGRITY
It was not technically feasible to shift the ship to another shipyard company as the
machinery was already dismantled and work was in progress.

A contract for the additional works was thus signed on 29 November 2022 with the same
Company and the repairs were completed in June 2023.

Payments

Out of the total of Rs 30.9 million payable under the two contracts, that is Rs 16.7 million
for the initial contract and Rs 14.2 million for the additional works, a total amount of
Rs 29.4 million was paid as of 30 June 2023.

Findings

The ship was defective since January 2020, but the contract for refit was awarded only
in September 2021, that is, 19 months later.

The ship was not available for use for more than three years.

The additional repair works for Rs 14.2 million (inclusive of VAT), which represented
an increase of 85 per cent over the initial contract sum, exceeded the prescribed limit
of 50 % stipulated in the Public Procurement Act and Public Procurement Regulations.

No proper due diligence exercise was carried out for the additional repair works to
determine whether the price was fair and reasonable.

Root Causes

The Officer-in-Charge responsible for maintenance of ships did not properly evaluate
the amount of repairs to be carried out.

The Officer-in Charge of Procurement did not adhere to the procurement laws.

Recommendation

The Officer-in-Charge of Procurement should ensure compliance with procurement


legislation.

Department’s Response

The delay in refit commencement is primarily because of non-responsive bids, the


unavailability of spares in the local market and the absence of a Repair Facility with NCG
for undertaking refits of ships.

63
PRIME MINISTER’S OFFICE, MINISTRY OF DEFENCE, HOME AFFAIRS AND EXTERNAL COMMUNICATIONS
AND MINISTRY FOR RODRIGUES, OUTER ISLANDS AND TERRITORIAL INTEGRITY
4.3.3 New Automated Fingerprint Identification System - Lapses in Project
Management

Shortcomings of Existing Automated Fingerprint Identification System

The existing Automated Fingerprint Identification System (AFIS) is an IT system that was
implemented in the year 1999 to facilitate the submission of online fingerprint, matching
of fingerprints, identification of suspects, producing evidence in Courts, vetting of names,
certificates of character, and police clearance.

Since October 2017,

the existing AFIS had reached its end of life and was no longer compatible with the
latest version of Windows;

there was no maintenance contract for the software; and

deleting existing records and backing up the fingerprint system could not be made.

Given the absence of backup and the impending risk of a system crash, it was decided to
acquire a new AFIS. Rs 77 million were provided in the Budget for each financial year
2020-21 and 2021-22, while Rs 40 million were provided in the financial year 2022-23.

Findings

Lapses in Project Monitoring

Repeated Revision of Bidding Documents due to Inaccurate Specifications

The specifications of the project were revised three times and the consequential cost
estimate has escalated as follows: Rs 20 million in February 2018, Rs 80.5 million in
August 2018, Rs 86.2 million in November 2019 and Rs 101.2 million in March 2022.
The last amount represents an increase of 406 per cent over the initial cost estimate.

Bidding exercises for the procurement of a new AFIS were launched three times. As
of September 2023, six months after the cancellation of the third bidding exercise, the
revised specifications were still not finalised.

Poor Planning of AFIS

The new Automatic Fingerprint Identification System was classified as a project under
risk due to delayed implementation as per the High-Level Progress Report for
Implementing Capital Projects issued in May 2023 by the Ministry of Finance,
Economic Planning and Development.

According to the Report, the project was delayed as the Software Maintenance
Contractor for Crime Occurrence Tracking System (COTS) failed to migrate data from
Criminal Attribute Database (CADB) to COTS.

64
PRIME MINISTER’S OFFICE, MINISTRY OF DEFENCE, HOME AFFAIRS AND EXTERNAL COMMUNICATIONS
AND MINISTRY FOR RODRIGUES, OUTER ISLANDS AND TERRITORIAL INTEGRITY
The Police Service decided to procure both AFIS and CADB as stand-alone systems.
This required substantial modification of bidding documents.

There needed to be more consistency in determining the specifications. In April 2018,


it was decided that AFIS would be linked to COTS. However, in April 2023, the
present AFIS was proposed to interface with CADB instead of COTS.

Budgeted Funds Not Utilised

Budgeted funds of Rs 77 million for each of financial year 2020-21 and 2021-22 and
Rs 40 million for 2022-23 earmarked for the project were not spent.

Root Causes

Inadequate project planning by the Police IT Unit and CIB before drafting
specifications and lack of supervision by the Monitoring Committee.

The Monitoring Committee did not set the timeframe for the finalisation of the project.

There is no study carried out at the level of the Police Service before finalising the
architecture and interfacing with other systems.

The Police Service does not have adequate expertise for implementing this type of
project.

Recommendations

The Monitoring Committee should establish critical milestones for achieving different
stages of the Project.

Proper Project Monitoring should be carried out.

The project should be planned appropriately, a proper market survey conducted,


appropriate technical specifications and cost estimates determined.

The Police Service should consider hiring a Consultant who is well-versed in the
design of AFIS.

Department’s Response

The Police Service envisages the inclusion of Biometrics in the New AFIS project and the
matter has been referred to CIB for scrutiny and revision of specifications as applicable.
Approval of CIB is still being awaited.

4.3.4 Follow-up of Matters Raised in the Audit Report 2021-22

A follow up of matters raised in the Audit Report for the financial year 2021-22 was carried
out. The Police Service was requested to inform the National Audit Office of the actions
that have been taken to address the findings and recommendations in the Report.
65
PRIME MINISTER’S OFFICE, MINISTRY OF DEFENCE, HOME AFFAIRS AND EXTERNAL COMMUNICATIONS
AND MINISTRY FOR RODRIGUES, OUTER ISLANDS AND TERRITORIAL INTEGRITY
The information along with evidence collected through review of files and documents were
assessed and discussed with the Police Service.

The status on actions taken on findings since the publication of the Audit Report are
summarised below. Out of 30 findings, 14 (47 per cent) have been resolved, 9 (30 per cent)
have been partially resolved and 7 (23 per cent) have not been resolved.

SN Findings Department’s Response- NAO


Status as of 18 January 2024 Comments

Detention Centre at Piton-Potential Risk of Escape of Detainees not detected at


Design Stage (Page 63)
1 Potential risk of escape of detainees The amendments brought to the
was detected at 85 per cent of design can be attributed to the
construction stage instead of design upgrading and safety measures.
stage. Police Service will ensure that for Resolved
(Pg 63, Para 4.3.1) such projects all security aspects
will be agreed at the design stage
with the Ministry of National
Infrastructure and Community
Development (MNICD).
2 Delay in completion of works. Remedial action taken by
(Pg 63, Para 4.3.1) Contractor and work has been Resolved
completed.

3 Performance Security was not Action will henceforth be taken for


renewed. renewal of performance security. Resolved
(Pg 63, Para 4.3.1)
New Divisional Headquarters at Abercrombie operating without Fire Certificate
(Page 64)
4 New Divisional Headquarters at The building has been issued with
Abercrombie operating without Fire Fire Certificate covering period Resolved
Certificate. 18.04.23 to 17.04.26.
(Pg 64, Para 4.3.2)
5 Various defects to the building were Remedial Action undertaken by the
observed and corrective measures contractor and works have been
Resolved
had not yet been taken as of August completed.
2022.
(Pg 64. Para 4.3.2)
Maritime Surveillance Operational Limitations (Page 65)
6 Coast Guard Ship (CGS) Guardian The Guardian Ship was deployed
which was due for decommissioning for short duration sorties to ensure
in April 2023 effected limited optimal exploitation. Its
operations due to the defective rudder decommissioning has been delayed Not
stock. Issues of water ingress was pending acquisition of a new Resolved
still prevailing as water ingress of offshore patrol vessel schedule for
about 20 litres per hour during sea year 2025.
sortie was noticed when the rudder
was being used.(Pg 65, Para 4.3.3)

66
PRIME MINISTER’S OFFICE, MINISTRY OF DEFENCE, HOME AFFAIRS AND EXTERNAL COMMUNICATIONS
AND MINISTRY FOR RODRIGUES, OUTER ISLANDS AND TERRITORIAL INTEGRITY
SN Findings Department’s Response- NAO
Status as of 18 January 2024 Comments

7 CGS Observer stranded for the past The Ship is undergoing Guarantee
two years due to urgent repairs and Defects Test since June 2023. Resolved
Refit.(Pg 65, Para 4.3.3)

8 Unavailability of CGS Barracuda for CGS Barracuda was unavailable due


Eight Months due to Refit. to refit in India. The ship reached Resolved
(Pg 65, Para 4.3.3) Mauritius in October 2021.

Wheel Clamps Non-Compliance Issues and Control Weaknesses (Page 66)


9 Delays in handing over of collections Personnel have been briefed to
to Revenue Clerk ranging from five strictly abide to guidelines of
to 132 days noted for Police Stations Administrative Order.
falling under the jurisdiction of The installation of Point of Sales Partially
Southern, Central and Northern (POS) Machine has been considered Resolved
District Headquarters (DHQ) were in lieu of cash handling by Police
noted. Delays still noted at Northern Officers. This project is being
DHQ in December 2023. implemented on a pilot basis in 12
(Pg 66, Para 4.3.4) pre-selected Police Stations round
the island and will be extended to
the remaining ones.
10 No regular checks on records were Station Managers have been briefed
effected by Station Managers to to ensure that fees collected tally
ensure that declamping fees collected with DIC Counterfoils. The
tally with the number of Declamping introduction of Point of Sale is being
Instruction Card (DIC) counterfoils envisaged at Police Stations.
used. No verification was effected by Internal Control Unit has carried out Resolved
Internal Control Unit on a quarterly an audit exercise on Declamping
basis as required under the applicable fees.
Administrative Order.
(Pg 66, Para 4.3.4)
11 The Immobilisation Device Register IDR maintained as per format of
(IDR) was not kept as per format Administrative Order. IDR
provided in Administrative Order. produced to Officer of NAO in
Resolved
No IDR was produced at Northern December 2023.
Division Support Unit and seven
Police Stations. (Pg 66, Para 4.3.4)
12 Unused and unnumbered Unused and unnumbered
Declamping Instruction Cards and Declamping Instruction Cards and
Resolved
Immovable Device Notice were still Immovable Device Notice are no
available at six Police Stations. more in use.
(Pg 66, Para 4.3.4)
13 No Stock Book was maintained for Stock Book was introduced.
Receipts Books and DICs. One Enquiry was initiated for the lost
Receipt Book was reported lost at receipt. Resolved
Mahebourg Police Station.
(Pg 66, Para 4.3.4)

67
PRIME MINISTER’S OFFICE, MINISTRY OF DEFENCE, HOME AFFAIRS AND EXTERNAL COMMUNICATIONS
AND MINISTRY FOR RODRIGUES, OUTER ISLANDS AND TERRITORIAL INTEGRITY
SN Findings Department’s Response- NAO
Status as of 18 January 2024 Comments

14 No crackdown operations were New wheel clamps were procured


carried out by three Division Support and crack down operations were
Units for the past two years as the being carried out. Resolved
wheel clamps were defective.
(Pg 66, Para 4.3.4)
Police Stores-Lapses in Stores Management (Page 67)
15 Limitations of the current Inventory EIMS has already been
System were noted in the absence of implemented in Furniture and
implementation of the Electronic Equipment, Accessories and
Inventory Management System Carpenter Store. It is in the process
(EIMS). of implementation at Special Mobile
Force Catering Store. Partially
(Pg 67, Para 4.3.5) Resolved
EIMS is already operational in
almost all stores, except for the
Catering outlet Stores which are
awaiting Technician from EIMS
Section from MoFEPD for needful.
16 Shortages of Rs 1.1 million were Proper handing over of stores is
detected during handing over being required from outgoing
exercise. officers. Write Offs were approved Resolved
(Pg 68, Para 4.3.5) by Accounting Officer and records
updated.
17 Storage conditions for goods All Goods have been rearranged and
totalling some Rs 63.6 million were properly stacked.
inappropriate. Resolved
(Pg 68, Para 4.3.5)
18 The ex-National Disaster Risk Tender was opened on
Reduction Management Centre 21 April 2022 but no responsive bid
(ex-NDRRMC) used for storage received. Fresh tender exercise is Partially
facilities has not yet been under process. Resolved
rehabilitated. The contract for structural
(Pg 69, Para 4.3.5) consolidation has been awarded and
the handing over of site is underway.
19 Stores items totalling some Central Crime Investigation
Rs 11.5 million were damaged during Department has undertaken an Partially
fire outbreak on 4 July 2022 at Line investigation. Enquiry completed Resolved
Barracks and matter referred to the Office of
(Pg 70, Para 4.3.5) the Director of Public Prosecutions
(DPP) for advice.
Reply of DPP is still awaited.
20 As of October 2022, seventy per cent Fire Certificates already allocated to
of buildings, that is 180 out of 256 218 of 256 Police Buildings.
Partially
buildings occupied by the Police 38 Police Buildings are awaiting
Resolved
Service did not have a Fire Fire Certificate.
Certificate.
(Pg 70, Para 4.3.5)

68
PRIME MINISTER’S OFFICE, MINISTRY OF DEFENCE, HOME AFFAIRS AND EXTERNAL COMMUNICATIONS
AND MINISTRY FOR RODRIGUES, OUTER ISLANDS AND TERRITORIAL INTEGRITY
SN Findings Department’s Response- NAO
Status as of 18 January 2024 Comments
Renovation works for the remaining
38 buildings being carried out as
recommended by Fire Services.
Interdicted Officers-Nugatory Expenditure (Page 71)
21 During the financial year 2021-22, During financial year 2022-23, 162
147 officers were under interdiction Officers were under interdiction and
and had drawn salaries totalling some had drawn salaries totalling Rs 49.2
Rs 49.6 million. In several cases, million. For financial year 2022-23, Not
interdiction periods lasted for several six officers were dismissed and a Resolved
years and upon determination of their total of Rs 769,625 was paid to
case, the officers concerned were them. 91 cases are under police
either dismissed from the service or enquiry for the FY 2022-23.
reinstated in their post.
(Pg 71, Para 4.3.6)
22 Fast track measures envisaged since In view to provide solution to this
year 2008 were not yet implemented. issue, an Inter-Ministerial
Instructions released in years 2015 Committee was set up in September
Partially
and 2020 to expedite matters were 2020 under the Chairmanship of the
Resolved
not applied. Deputy Prime Minister. The Police
(Pg 71, Para 4.3.6) Service has established an Ethics
Guide for Police Officers.
As of 19 September 2023, no
decision was yet taken by the
Committee set up to look into the
matter.
Safe City Project (SCP) not fully Operational two years after Scheduled Completion
Date (Page 72)
23 Details of advance payment effected The Central Electricity Board will
for the Supply of electricity not submit a final invoice on the
available. detailed expenses upon completion
(Pg 72, Para 4.3.7) of the 2,000 Intelligent Video Not
Surveillance (IVS) sites and 130 Resolved
Intelligent Traffic Surveillance
(ITS) sites. The remaining balance
will be known after the reception of
the final invoice. Eventually
Treasury will be apprised
accordingly.
24 SCP not fully Operational and Face Recognition has been installed
Maximum benefit not derived. and tested. However, to go live,
amendments in the present Partially
(Pg 72, Para 4.3.7)
legislation is required. On Resolved
completion of the installation of all
IVS Cameras, tender procedures for
Independent Security Audit will be
initiated.

69
PRIME MINISTER’S OFFICE, MINISTRY OF DEFENCE, HOME AFFAIRS AND EXTERNAL COMMUNICATIONS
AND MINISTRY FOR RODRIGUES, OUTER ISLANDS AND TERRITORIAL INTEGRITY
SN Findings Department’s Response- NAO
Status as of 18 January 2024 Comments

Procurement of Automatic Fingerprint Identification System not finalised since more


than Three Years (Page 72)
25 Procurement of Automatic The tender exercise has been
Fingerprint Identification System not cancelled as the system requires
finalised since more than Three some substantial modification in the Not
Years. specification. Resolved
(Pg 72, Para 4.3.7) The Police Service envisages the
inclusion of Biometric in the new
AFIS project and the matter has
been referred to CIB for scrutiny
and revision of specifications.
Delay in Procurement Impacting on Service Delivery (Page 72)
26 Non-Compliance with Procurement A proper procurement planning will
Policy Office Directive- be carried out and remedial actions
Procurement Lead Time Exceeded. will be initiated where applicable. Not
(Pg 72, Para 4.3.7) User departments would be urged to Resolved
submit proper and precise
specifications, updated cost
estimates after actual market survey
has been undertaken.
Irregularity in Revenue Collection - Enquiry still Ongoing after more than six years
(Page 72)
27 Irregularity in Revenue Collection- As advised by the DPP, the Internal
Short remittance of some Control Unit has been taken on
Rs 14.8 million was noted at board to scrutinise and analyse all
Northern District Headquarters in documents. On completion of
April 2015. An enquiry was initiated enquiry, the findings will be Not
by Central Crime Investigation submitted to DPP for advice. Resolved
Department in April 2015 and a Enquiry still ongoing since more
Police Officer was interdicted from than eight years.
duty. The balance of advance account
has increased to Rs 31.8 million since
30 June 2020. Enquiry still ongoing
after more than six years.
(Pg 72, Para 4.3.7)
Asset Management-Objectives of Coastal Surveillance Radar System (CSRS) not
attained (Page 72)
28 Three out of the eight radars were not The radar at St. Brandon is not
operational. operational.
Partially
(Pg 72, Para 4.3.7) Final technical specifications are Resolved
awaited from Consultant for
acquisition of new CSRS being
funded by Japanese Government.

70
PRIME MINISTER’S OFFICE, MINISTRY OF DEFENCE, HOME AFFAIRS AND EXTERNAL COMMUNICATIONS
AND MINISTRY FOR RODRIGUES, OUTER ISLANDS AND TERRITORIAL INTEGRITY
SN Findings Departments Response – Nao
Status as of 18 January 2024 Comments
Remotely Operated Vehicle costing Rs 14 million defective since receipt in June 2014
(Page 72)
29 Rs 12.8 million were paid for the Arbitration Case Ongoing. Hearing
Remotely Operated Vehicle, a in September and October 2023
defective equipment supplied but postponed.
which has not yet been put to use. Not
Claim for liquidated damages was Resolved
made in 2014. In June 2018, an
Arbitrator was appointed to settle
dispute regarding liquidated damages
applied.
(Pg 72, Para 4.3.7)
Non-repayment of Advances Motor Car/Motor Cycle (Page 72)
30 Irregular repayments were not Five cases of outstanding balances
properly monitored resulting in non- are still pending. These cases refer Partially
recovery of outstanding balances. to three officers who have left for Resolved
(Pg 72, Para 4.3.7) unknown address and two who are
abroad according to what have been
gathered by enquiry.

71
PRIME MINISTER’S OFFICE, MINISTRY OF DEFENCE, HOME AFFAIRS AND EXTERNAL COMMUNICATIONS
AND MINISTRY FOR RODRIGUES, OUTER ISLANDS AND TERRITORIAL INTEGRITY
72
PRIME MINISTER’S OFFICE, MINISTRY OF DEFENCE, HOME AFFAIRS AND EXTERNAL COMMUNICATIONS
AND MINISTRY FOR RODRIGUES, OUTER ISLANDS AND TERRITORIAL INTEGRITY
5 – DEPUTY PRIME MINISTER’S OFFICE,
MINISTRY OF HOUSING AND LAND USE PLANNING
AND TOURISM

5.1 HOUSING AND LAND USE PLANNING


5.1.1 High Demand and Inadequate Supply of Social Housing Units

The Housing Division of the Ministry of Housing and Land Use Planning (MHLUP) is
responsible for the formulation of strategies and policies related to the Social Housing
Sector and the implementation of Government social housing programmes through, its
executive arm, the National Housing Development Co. Ltd (NHDC Ltd).

NHDC Ltd was incorporated in March 1991 and some Rs 1 billion were transferred from
MHLUP to NHDC Ltd during the financial years 2020-21 to 2022-23 for the construction
of social housing units.

The New Social Living Development Ltd (NSLD) is also involved in the construction of
social housing. NSLD was incorporated on 16 May 2019 as a wholly owned Special
Purpose Vehicle of NHDC Ltd.

NSLD has been designated as the implementing agency for the construction of
12,000 residential units across the island. As from the financial year 2021-22, grant was
released by MHLUP to NSLD to meet its operating and administrative expenses. Grants
totalling some Rs 113.5 million were released by MHLUP for the financial years 2021-22
and 2022-23.

Findings

The demand for social housing units increased from 29,033 in the financial year
2020-21 to 39,566 in the financial year 2022-23. NHDC Ltd completed and delivered
a total of 2,192 housing units from the financial years 2020-21 to 2022-23.

As of June 2023, NSLD has not yet delivered any housing units out of the 12,000 units.

MHLUP did not achieve its targets with respect to the provision of social housing units
for the financial year 2022-23, as shown in Table 5-1.

73
Table 5-1 Status of Indicators

Indicators Target Actual Result % Achieved

Percentage of Housing 15% 14% 93


Programmes
Completed
(4,082 on-going and
12,000 new residential
units)
Number of housing 485 282 58
units completed under
the on-going
Programme and New
Housing Programme
Award of contract for Dec 2022 Letter of Award _
49 sites (12,000 issued from
residential units) April to June
2023 for
32 sites.

Source: MHLUP Records

The 485 housing units that had to be completed in the financial year 2022-23 consisted
of:

282 housing units at Wooton; and

203 housing units at Mare D’Albert

The contract for the construction of social housing units at Mare D’Albert had to be
terminated in August 2021, due to the failure of the contractor to comply with the
“Notice to Correct”. The bidding process started again in March 2022 with an expected
completion date of May 2023. However, no bid was received and the bidding process
started anew during the financial year 2022-23.

49 sites were earmarked for the construction of the 12,000 residential units by NSLD.
In February 2023, Government approved that the project be implemented in two
phases:

Phase I - 8,000 units

Phase II- 4,000 units

The award of the contract for Phase I for 32 sites was on a ‘Design and Build’ mode.

NAO Comment

At the current pace of implementation of social housing programmes, there is a risk that
the growing demand for social housing units will not be met in the medium term.

74
DEPUTY PRIME MINISTER’S OFFICE, MINISTRY OF HOUSING, LAND USE PLANNING, AND TOURISM
Root Cause

MHLUP did not have a strategic plan on how to meet the growing demand for the social
housing sector.

Recommendation

MHLUP should develop a social housing strategy that clearly sets out its vision to meet the
increasing demand for the social housing sector.

Ministry’s Response

Currently, the construction of 12,990 housing units is in the pipeline. Upon completion
of the project, the housing demand would be reduced to 26,576, which would still pose
a significant backlog.

MHLUP has embarked on the preparation of a National Housing Strategy. To this end,
funds have been earmarked in Budget 2023-24 for Consultancy Services.

Accordingly, MHLUP is working in collaboration with NHDC Ltd for the procurement
of Consultancy Services for a “Comprehensive Survey on existing NHDC and
Ex-CHA Housing Estates.”

Moreover, MHLUP has approached the World Bank, for undertaking a study on
“Resilient and Affordable Housing in Mauritius.” The main objective of this study is
to assess the affordable housing eco-system in Mauritius and to develop a sustainable,
inclusive and resilient development roadmap to ensure access to affordable housing for
the low and middle-income segment of the population.

The Key Performance Indicator (KPI) could not be met mainly due to the
non-completion of the housing project at Mare D’Albert (203 units) as a result of
procurement issues encountered in the appointment of new contractor(s), which is
beyond the control of MHLUP and NHDC Ltd as the latter could not foresee the
duration and outcome of the new bidding exercise, whereby no responsive bid was
received.

NSLD encountered several challenges during the procurement exercise which resulted
in excessively high and unaffordable prices for the housing units. Accordingly, NSLD
had to change its procurement method to a “Design and Build” with a fixed unit cost
not exceeding Rs 2.7 million.

It is the objective of MHLUP to always set realistic KPIs. However, some delays
(procurement, contractual dispute and adverse weather conditions) are beyond the
control of MHLUP.

5.1.2 Inefficient Management of State Lands

As per the State Lands Act, “all leases of State Lands shall be by public auction or by
private contract upon such terms and conditions, not inconsistent with this Act, as the
Minister may approve.”

75
DEPUTY PRIME MINISTER’S OFFICE, MINISTRY OF HOUSING, LAND USE PLANNING, AND TOURISM
One of the missions of MHLUP is to have an efficient land planning system for the
effective management, use and release of lands for development and conservation.

Findings

State Lands Coordinating and Monitoring Committee not Operational

With a view to ensuring that MHLUP provides a quality service to all stakeholders and
members of the public at large, Government approved the setting up of a State Lands
Coordinating and Monitoring Committee (SLCMC) in year 2016.

The terms of reference of the SLCMC are, inter alia, to take cognizance of all applications
received, Letters of Reservation/Letters of Intent/Lease Agreements in respect of State
Lands, to follow up and monitor progress on major issues/projects and ensure that
follow-up in respect of compliance to all the terms and conditions are effected by the
Divisions of MHLUP and that all uncommitted State Lands are used in a judicious manner.

The last meeting of the SLCMC was held on 14 July 2020. For more than three years, no
meeting was held.

Uncommitted State Lands - Details not readily available

NAO had constantly reported that MHLUP did not have a comprehensive database of State
Lands, inclusive of all uncommitted State Lands.

MHLUP informed NAO that this issue will be resolved with the introduction of the Digital
State Lands Register (DSLR).

As of September 2023, only State Lands under leases were uploaded in the lease module
of the DSLR.

In the absence of an uncommitted State Lands database, there is the risk that the release of
State Lands was not effected in a fair and transparent manner. Most of the leases of State
Lands are by private contract with terms and conditions approved by MHLUP.

Incomplete Records of Vested State Lands

The Survey Division of MHLUP is responsible for meeting the demands for land from
other Ministries. Lands are vested in the Ministries for the implementation of specific
projects.

The lists of State Lands vested in three Ministries namely the Ministry of Blue Economy,
Marine Resources, Fisheries and Shipping, the Ministry of Education, Tertiary Education,
Science & Technology and the Ministry of Health and Wellness, were compared with the
records kept by MHLUP.

It was observed that plots of land for 72 sites with a total area of 424,392 m2 were vested
in the above-mentioned three Ministries but were missing from the records of MHLUP.

76
DEPUTY PRIME MINISTER’S OFFICE, MINISTRY OF HOUSING, LAND USE PLANNING, AND TOURISM
Occupation of Campement Sites without Renewal of Lease

Amendment was brought to the Pas Geometriques Act in year 2007, whereby lessees of
campement sites had the option to enter into a new lease for a period of 60 years with
revised rental or for those who did not opt for the new 60-year lease, no renewal option was
available.

Furthermore, provision was made in the lease agreement, “At the expiry of the term of these
leases or upon its cancellation, the lessee shall yield up the lands hereby leased nowise
deteriorated in value as they stand without any claim whatever for indemnity other than
permission to remove the buildings belonging to the lessee. Such buildings shall be
removed within a period to be fixed by the lessor, and failing their removal within such
period the buildings shall become the property of the lessor”.

From the records of MHLUP it was noted that:

in 32 cases, the campement site leases had expired and the lessees did not opt for the
new 60-year campement site lease;

these lessees are occupying the campement sites without a formal agreement; and

no rent or premium are being paid by the lessees.

The revenue forgone by Government worked out to some Rs 56.7 million, without
considering Consumer Price Index and Sea Frontages, if MHLUP had taken possession of
these campement sites and leased them to interested parties.

Root Causes

Following the transfer of the Chairperson of SLCMC, no officer was assigned the
responsibility of scheduling meetings.

The Accounting Officer had not yet initiated action to compile a comprehensive list of
all uncommitted State Lands.

There was no proper follow-up on vested land by the Accounting Officer.

Recommendations

Given the fundamental role of the SLCMC, MHLUP should ensure it is functional.

For efficient and effective release of State Lands for development, detailed information
about uncommitted State Lands should be compiled.

The record/database of MHLUP should be reconciled with the records of the


Ministries in which the State Lands are vested.

A survey should be carried to identify State Lands vested in other Ministries.

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DEPUTY PRIME MINISTER’S OFFICE, MINISTRY OF HOUSING, LAND USE PLANNING, AND TOURISM
Ministry’s Response

The SLCMC was discontinued as it involved heavy procedures which could not be
followed in practice. MHLUP is working on a new framework with clear guidelines
that are implementable for the allocation of State Lands and will maintain the
principles of transparency and accountability.

The DSLR is being updated with leased parcels as well as uncommitted ones as and
when cases are being processed. While MHLUP is not sparing efforts to have a
complete record, additional resources would be required for MHLUP to undertake a
systematic approach.

All new vesting are being recorded in the DSLR. Updating of records for former
vesting is being done as and when files are being processed.

MHLUP is in consultation with MoFEPD on the way forward for expired campement
site leases for which lessees have not opted for the new 60-year lease.

5.1.3 Revamping and Enhancement of LAVIMS not yet achieved

In year 2011, the Land Administration and Valuation Information Management System
(LAVIMS) became operational. Some Rs 1 billion have been spent from years 2011 to
2023, consisting of an initial cost of some Rs 618 million and some Rs 456 million in
respect of the associated hardware maintenance and support, and software maintenance.

Since the financial year 2016-17, NAO has been highlighting the drawbacks of the current
LAVIMS. The valuation module of LAVIMS could not produce an updated and complete
valuation roll. Moreover, there was sub-optimal use and high maintenance costs due to
ageing of LAVIMS.

In year 2018, MHLUP decided on the:

enhancement of the Valuation Module; and

revamping of the current LAVIMS to LAVIMS 2.0.

Enhancement of the Valuation Module

The Valuation Module Enhancement contract was awarded for a fixed lump sum price of
US$ 727,500, exclusive of VAT, on 6 December 2019. As of September 2023,
US$ 718,808 equivalent to Rs 28.8 million, were paid.

Findings

As of September 2023, the Valuation Module could not “go live” as:

a Valuation Roll had not yet been published. The Valuation Roll will follow after
the final Cadastral Database is populated and generated for the Municipal Council
of Quatre Bornes (MCQB);

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DEPUTY PRIME MINISTER’S OFFICE, MINISTRY OF HOUSING, LAND USE PLANNING, AND TOURISM
data collections for MCQB were incomplete; and

Case Type F (Publication of Valuation Roll) was still at User Acceptance Testing
stage. An amount of US$ 8,691 has been retained for this outstanding task.

The LAVIMS Enhancement Monitoring Committee, established in respect of the


enhancement of the Valuation Module, met in January 2023 and the next meeting will be
scheduled when User Acceptance Testing of Case type F is completed.

No formal mechanism has been established to monitor the progress of the survey of MCQB.

Revamping of LAVIMS to LAVIMS 2.0

In order to ensure effective management of land transactions, MHLUP would develop a


new digital geospatial data sharing platform (LAVIMS 2.0) for land transfer, ownership
and registration.

Prior to the tendering exercise, the appointed Consultant recommended the setting up of a
Programme Steering Committee. The Programme Steering Committee will be the key body
within the governance structure. In addition the authority for decision-making will be
responsible for providing overall leadership, direction and management of the project.

In September 2019, the Consultant recommended that MHLUP replaces the existing system
with a Blockchain Based System.

Findings

As of October 2023, a Programme Steering Committee had not yet been established.

Tender for the Supply, Installation, Testing, Commissioning and Maintenance of


LAVIMS 2.0 was launched in March 2023. The closing date was initially set for
25 May 2023, but was extended three times due to queries from potential bidders. Bids
were finally opened on 1 September 2023 and were at the Central Procurement Board
for evaluation.

For the financial year 2022-23, 20 per cent of the implementation LAVIMS 2.0 was
targeted. However, as of September 2023, the project was still at bid evaluation stage.

Root Causes

The Programme Steering Committee was not yet set up.

Undue delay in the survey of properties for MCQB due to inadequate monitoring by
MHLUP.

Recommendations

The Programme Steering Committee should be set up.

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DEPUTY PRIME MINISTER’S OFFICE, MINISTRY OF HOUSING, LAND USE PLANNING, AND TOURISM
The Accounting Officer should ensure that there are no further delays in upgrading
LAVIMS.

A formal monitoring mechanism should be established to expedite the survey at


MCQB.

Ministry’s Response

Case Type F (Publication of Valuation Roll) is under User Acceptance Testing and
will be finalised by the end of December 2023, subject that all changes are carried out
by the contractor to meet VD requirements.

A first version of the Valuation Roll is also under User Acceptance Testing and will
be submitted to the Municipal Council once the Case Type F goes live.

Progress of the Valuation Roll is sent on a regular basis through email to all members
of the Monitoring Committee.

As regard LAVIMS 2.0, the bid exercise is at evaluation level at Central Procurement
Board.

A Programme Steering Committee will be set up as soon as a contractor is selected to


implement the project.

5.1.4 No Value for Money on Land Acquired

On 5 October 2016, NHDC Ltd launched an expression of interest to identify suitable land
from private land owners who were willing to sell their plots of land to the Government for
the construction of social housing units. By the closing date of 19 October 2016,
31 proposals were received.

Following an assessment by the authorities concerned, the Planning Division of MHLUP


recommended six sites. Subsequently, only one site of an extent of 2.39 Arpents at
Highlands was retained.

MHLUP acquired the portion of land for Rs 16 million in October 2018. In January 2019,
Rs 110,312 were paid in respect of notarial fees and for the deed of acquittance.

On 14 July 2021, the land was put at the disposal of NSLD by MHLUP for the construction
of 80 housing units.

Findings

The land acquired was not retained by NSLD as it was found not buildable.

The Project Management Consultant in Construction of NSLD recommended not to


proceed with the construction of social housing units on the site due to constraints
highlighted in its feasibility report dated June 2022.

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DEPUTY PRIME MINISTER’S OFFICE, MINISTRY OF HOUSING, LAND USE PLANNING, AND TOURISM
The major issues pertaining to the site were:

the Land Drainage Authority identified two natural drainage paths crossing the site,
which cannot be relocated as it would disturb the natural pathway downstream;

as per the topographical survey, the site was in a flood-prone area and the construction
of housing units would pose a threat to the adjoining properties;

as per a preliminary geotechnical assessment, on-site stormwater drainage and


wastewater disposals were not possible; and

some Rs 62.5 million were estimated to be spent in respect of off-site works for the
provision of sewerage disposal and water supply.

As of October 2023, the land was not used for any other purpose.

Root Cause

The required preliminary topographical survey and geotechnical investigations were not
performed prior to the acquisition of the land as per the Handbook of Procedures/Guidelines
(February 2017).

Recommendation

Prior to acquisition, all necessary investigations should be carried out to ensure the
suitability of the land for its intended use.

Ministry’s Response

On 31 March 2017, a policy decision was taken to expedite land acquisition under the
Government/MSPA agreement by initiating acquisition procedures after the Planning
Division has found a site to be suitable for housing development.

Moreover, it was also agreed that concurrently, NHDC Ltd would appoint
Consultant(s) who would subsequently carry out necessary geotechnical
investigations. The same principle was applied for acquisition of Private Lands through
Expression of Interest.

Following Preliminary Geotechnical Assessment, it was found that any social housing
development on the 2A39 site at Highlands would entail massive investment on basic
infrastructure (e.g. sewage disposal system, water reticulation, access road, etc.) which
would inevitably render the cost of a housing unit unaffordable to the target group, that
is, households earning up to Rs 30,000 per month. Consequently, the site at Highlands
(2A39) has been kept in the land bank of this Ministry for any future development.

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DEPUTY PRIME MINISTER’S OFFICE, MINISTRY OF HOUSING, LAND USE PLANNING, AND TOURISM
GOVERNANCE ISSUES

5.1.5 Audit Committee Not Functional

Audit Committee (AC) plays a key role in public accountability by providing independent
oversight of the organisation’s governance, risk management and internal control practices,
thus providing confidence in the integrity of these practices.

In August 2022, the Office of Public Sector Governance (OPSG) developed an updated
AC Charter to provide guidelines on the setting up and operations of AC.
In October 2022, the AC was set up and a Performance Agreement between the Accounting
Officer and members of the AC was drawn.

Finding

No AC meeting was held during the financial year 2022-23.

Root Cause

High mobility of members of the AC.

Recommendations

The Accounting Officer should ensure compliance with the provisions of the AC
Charter and the Performance Agreement.

The Chairperson should ensure that the AC holds a minimum of six meetings annually,
with at least one meeting per quarter, as required in the Performance Agreement.

Ministry’s Response

Due to the mobility of staff, no meeting of the AC could be held. On 1 July 2023, the AC
was reconstituted and four meetings were held. The Performance Agreement, Action Plan
and Quarterly Status Report as of September 2023 have been submitted to OPSG.

5.1.6 Risk Register not yet developed

In December 2021, MoFEPD issued a circular regarding the establishment of Risk


Management Framework in the Public Sector.

In view of facilitating the process, MoFEPD developed guidelines for putting in place a
Risk Management Framework in Ministries.

According to the guidelines, the Accounting Officer is accountable for the overall
governance and has the ultimate responsibility for Risk Management.

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DEPUTY PRIME MINISTER’S OFFICE, MINISTRY OF HOUSING, LAND USE PLANNING, AND TOURISM
Finding

On 4 September 2023, MHLUP approved a Risk Management Policy. However, a Risk


Register was not yet developed.

Root Cause

The Accounting Officer did not designate relevant officials with the responsibility for
developing the Risk Register.

Recommendations

The Accounting Officer should ensure that a Risk Register is developed within a
reasonable time.

The composition and the mandate of the Risk Management Committee including roles,
responsibilities and accountability should be clearly defined and approved by the
Accounting Officer.

Ministry’s Response

The Internal Control Department was, on 27 September 2023, requested to hold a working
session with the risk management team to facilitate the establishment of the Risk
Management Framework. However, due to their unavailability, same has been rescheduled
for January 2024.

5.1.7 Report on Performance - Non-compliance with Legislation

The Finance and Audit Act, Section 4B(1) provides that “every department shall, not later
than 31 October in every year, submit to the Minister, a report on its performance in respect
of the previous fiscal year and on its strategic direction in respect of the following 3 fiscal
years.”

Finding

The provision of the Finance and Audit Act was not complied with. Reports on MHLUP’s
performance for the financial years 2021-22 and 2022-23 were not yet submitted.

Root Cause

Lack of monitoring and coordination by the Accounting Officer resulted in a delay for input
from the different Sections of MHLUP.

Recommendation

MHLUP should comply with the legal requirements.

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DEPUTY PRIME MINISTER’S OFFICE, MINISTRY OF HOUSING, LAND USE PLANNING, AND TOURISM
Ministry’s Response

The draft Annual Report on Performance for the financial year 2021-22 is being finalised.
As regards the draft Annual Report for the financial year 2022-23, it is being prepared and
expected to be finalised by end of February 2024.

5.1.8 Government Assets Register - State Lands not captured

The Government Assets Register (GAR), a computerised system, has been developed by
the Treasury to assist Ministries/Departments to record Non-Financial Assets (NFAs)
which include State Lands and Government buildings.

As per Treasury Circular No. 16 of 2017, Supervising Officers were requested to ensure
that NFAs under the control of their respective Ministry/Department are recorded in GAR
in a timely manner.

Furthermore, according to MoFEPD’s Circular No. 6 of 2020, all theses NFAs, including
State Lands, were targeted to be captured by the end of June 2021.

Findings

As of October 2023, State Lands which are under the responsibility of MHLUP were not
yet captured in GAR.

Root Cause

There was inadequate supervision by the Accounting Officer in respect of the recording
of State Lands in GAR.

Recommendation

The Accounting Officer should ensure that State Lands are promptly recorded in GAR.

Ministry’s Response

Information in respect of leased land and land vested available in MHLUP’s digital record
has already been forwarded to the Treasury.

Efforts are being put by MHLUP to digitalise existing records in paper format. However,
additional resources will be required to capture these data in a systematic and timely
manner.

5.1.9 Absence of Standard Operating Procedures Manual for Valuation Department

It is the responsibility of the Accounting Officer to ensure the preparation of a Standard


Operating Procedures Manual (SOPM) on operational procedures for their respective
Ministry/Department (Financial Management Manual Kit Volume I).

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DEPUTY PRIME MINISTER’S OFFICE, MINISTRY OF HOUSING, LAND USE PLANNING, AND TOURISM
SOPM sets out the policies and procedures regulating the operations of the
Ministry/Department, as well as the systems and mechanisms put in place to implement the
policies and procedures.

SOPM aims at achieving efficiency, quality output, and uniformity of performance, while
reducing miscommunications and failure to comply with regulations and instructions.

According to the scheme of service, the Deputy Director is to be responsible for the
preparation and updating of “Chapters of Instructions”. The “Chapters of Instructions” was
required to bring consistency in valuation and set standards and guidelines for the valuers
to carry out their valuations.

NAO had been informed that all the valuers at Valuation Department (VD) are Chartered
Valuation Surveyors and Registered Valuers with Royal Institution of Chartered Surveyors
(RICS). As such, the “Chapters of Instructions” has been replaced by the RICS ‘Red Book’
which contains mandatory procedural rules, best practice guidance and related commentary
for all RICS members undertaking valuations.

Findings

VD did not develop its SOPM that integrates the policies and procedures adopted for
valuation purposes.

Examination of 13 and five files in connection with “valuation of properties for rental”
and “acquisition of land by Government” respectively, revealed the absence of written
guidance and procedures. No standard working sheet for valuation purposes was found
in these files.

Root Cause

The Accounting Officer did not give due consideration for the preparation of SOPM.

Recommendation

To improve VD’s governance, the Accounting Officer should ensure that all policies and
operational procedures are documented and communicated across VD.

Ministry’s Response

Action has been initiated for the preparation of SOPM and updating the ‘Chapters of
Instructions’.

5.1.10 Follow-up of Matters Raised in the Audit Report 2021-22

A follow-up of matters raised in the Audit Report for the financial year 2021-22 was carried
out. MHLUP was requested to inform NAO of the actions that have been taken to address
the findings and recommendations in the Report. The information, along with evidence
collected through a review of files and documents, were assessed and discussed with
MHLUP.

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DEPUTY PRIME MINISTER’S OFFICE, MINISTRY OF HOUSING, LAND USE PLANNING, AND TOURISM
The status of actions taken on findings since the publication of the Audit Report are
summarised below. Out of three findings, one (33 per cent) has been resolved, one has been
partially resolved (33 per cent), and one (34 per cent) has not been resolved.

SN Findings Ministry’s Response NAO Comments


Status as at 30 January 2024
Asset Management-Inadequate Controls over Survey Equipment (Page 75)
1 Unmanned Aerial Some officers were provided
Vehicle/Drone Not Being training by the supplier.
Utilised As regards the Pilot Training
(Pg 75, Para 5.1.1) Certificate, Polytechnics
Mauritius proposes to conduct a Partially Resolved
course in collaboration with
Garuda Aerospace (India) and
modalities are being worked out.
Thereafter, procedures will be
initiated for the insurance cover.
2 Unutilised Total Stations and Total Stations and GPS are
GPS Not Working Properly. being used. Resolved
(Pg 76, Para 5.1.1)
Long Outstanding Debtors- Ineffective Recovery of Debts (Page 77)
3 Some 47 lessees were not In the Annex to Budget Speech
settling their rentals totalling 2022/23, it was announced that a
some Rs 301 million, Central Debtors Management
excluding interest, due as at Unit (CDMU) would be set up at
30 June 2019. As at 30 June the Treasury Department. The
2022, the arrears figure for said Department is still working
these lessees increased to on the modalities.
Rs 485 million, excluding
interest. Not Resolved
In the meantime, MHLUP is
(Pg 77, Para 5.1.3) issuing reminders to lessees who
are in arrears in rental.

DSLR will not resolve the issue


of debt recovery. It will only be a
tool which can be used by the
CDMU.

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DEPUTY PRIME MINISTER’S OFFICE, MINISTRY OF HOUSING, LAND USE PLANNING, AND TOURISM
5.2 TOURISM
5.2.1 Governance Issues – Non-compliance with Legislation

Provisions have been made in various legislations to impose a statutory responsibility on


Accounting Officers and Boards of Statutory Bodies with the objective of strengthening
accountability and transparency in the public sector.

Findings

Non-submission of Report on Performance

As of 5 January 2024, the Report on Performance of the Ministry of Tourism for the
financial years 2021-22 and 2022-23 had not yet been submitted to the Ministry of Finance,
Economic Planning and Development, despite the statutory deadline being 31 October
every year.

Annual Reports not laid before the National Assembly

The Statutory Bodies (Accounts and Audit) Act requires a copy of the annual report and
audited accounts of every Statutory Body to be laid before the National Assembly at the
earliest opportunity.

As of 5 January 2024, the Mauritius Tourism Promotion Authority, falling under the
purview of the Ministry of Tourism had not yet laid its audited Financial Statements for the
financial year 2021-22, before the National Assembly, although they had been certified by
NAO on 2 May 2023.

NAO is of the view that the Ministry should exercise control over Statutory Bodies
operating under its aegis to ensure that they fulfil their statutory responsibilities regarding
the preparation of financial statements, their submission for audit and tabling before the
National Assembly.

5.2.2 Follow-up of Matters Raised in the Audit Report 2021-22

A follow up of matters raised in the Audit Report for the financial year 2021-22 was carried
out. The Ministry of Tourism was requested to inform the National Audit Office of the
actions that have been taken to address the findings and recommendations in the Report.
The information along with evidence collected through review of files and documents were
assessed and discussed with the Ministry.

The status on actions taken on findings since the publication of the Audit Report are
summarised below.

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DEPUTY PRIME MINISTER’S OFFICE, MINISTRY OF HOUSING, LAND USE PLANNING, AND TOURISM
SN Findings Ministry’s Response – NAO
Status as at January 2024 Comments

Illegal Occupation of Government Property – Le Batelage – (Page 79)


1 The property was leased to a private Since the matter was still in a
individual in 1993. The lessee was court of justice, the Ministry
irregular with his payment of the was awaiting the outcome of the
monthly lease rental of Rs 25,109. In court case.
February 2013, the Ministry initiated
legal action through the Attorney
The court case has been
General’s Office for the eviction of
postponed to February 2024.
the lessee and for the recovery of Not
arrears, which amounted to some Resolved
Rs 450,000 at that time.

The unpaid rentals had reached some


Rs 3.2 million in June 2022 and was
increasing every month as the lessee
was not making any payment.
(Pg 79, Para 5.2.1)

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DEPUTY PRIME MINISTER’S OFFICE, MINISTRY OF HOUSING, LAND USE PLANNING, AND TOURISM
6 – VICE-PRIME MINISTER’S OFFICE,
MINISTRY OF EDUCATION, TERTIARY EDUCATION,
SCIENCE AND TECHNOLOGY
6.1 Lapses in Capital Project Management and Procurement Procedures

A review of a sample of 39 projects of the Ministry of Education, Tertiary Education,


Science and Technology (MOETEST) for a total contract value of Rs 838 million revealed
the following lapses in the management of the capital projects:

There was inadequate supervision and monitoring of capital projects by the


Infrastructure Monitoring Unit (IMU) of the Ministry. The IMU is responsible for
ensuring timely completion of infrastructural projects and is comprised of Civil
Engineers, Architect and Technical Design Officers.

Considerable contract time overrun due to several factors, such as late handing over of
site to contractors, amendments in designs, delays to respond to queries from
contractors, variations in contract, and poor-quality workmanship by contractors.

Suspension of works by contractors and abandonment of sites prior to completion of


projects due to delays in assessing extension of time.

Additional claims from contractors regarding losses and expenses due to extended stay
on site.

New projects were awarded to contractors notwithstanding their poor performance in


previous contracts of MOETEST.

In several projects, bidding exercises were cancelled due to discrepancies and missing
information in bid documents.

Details of a few projects where lapses were observed in effective contract/project


management, are outlined below.

I. Construction of Training Centre at Beau Vallon on a Design-and-Build basis -


Delay in Completion of Project

The contract for the construction of a Training Centre at Beau Vallon was awarded on a
design-and-build basis on 10 November 2020, for a sum of Rs 169.6 million. The project
was awarded by the Mauritius Institute of Training and Development (MITD). The Centre
will be taken over by the Institute of Technical Education and Technology (ITET) after
proclamation of Section 31 of the ITET Act and would accommodate around 1,000 students
for technical courses.

Findings

Delay in Completion of Project

Construction works started on 27 September 2021. The completion date of


27 September 2022 was extended by 144 days to 17 February 2023 due to COVID-19,

89
bad weather conditions and delays in approval of aluminium colours by MITD. As of
October 2023, 96 per cent of works have been certified.

However, handing over of the Training Centre has not been completed due to
documents such as test sheets and drawings not yet submitted by the Contractor.

The project, which was for a duration of 12 months has already exceeded its original
completion date by some 13 months.

The maximum delay damages applicable under the contract, amounting to some
Rs 14.8 million were not applied at time of audit in September 2023. The representative
from MOETEST who attended site meetings reported that the delays in works were
due to the Contractor’s fault.

MOETEST did not actively supervise project completion, approve extension of time
and enforce penalty clauses for non-compliance with contractual obligations.

Root Cause

Over and above MOETEST, other stakeholders namely MITD and ITET were involved in
the project and there were no clearly defined responsibilities among the stakeholders
concerned.

Recommendation

The Accounting Officer and MITD should take appropriate measures to expedite
completion of the construction project so that the Centre becomes operational.

Ministry’s Response

The Contractor has submitted two applications for the extension of time on
29 September 2023 and 11 October 2023. The Consultant has issued the relevant
assessments on 15 November 2023, whereby he has concluded that the Contractor may
be granted further extension up to 22 August 2023.

The fire certificate process is still ongoing at the level of the Fire Services.

Regarding delay damages, the process is different as opposed to regular project and is
being looked into by the Consultant.

II. Construction of New Ramsoondar Prayag SSS

The contract for the Construction of the New Ramsoondar Prayag SSS at Rivière du
Rempart was awarded in March 2020 for the sum of Rs 392.9 million. The initial
completion date of 25 January 2022 for Phase 1 was extended to 10 March 2022. As of
21 April 2022, disbursements to the Contractor totalled Rs 149.5 million.

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VICE-PRIME MINISTER’S OFFICE, MINISTRY OF EDUCATION, TERTIARY EDUCATION, SCIENCE AND TECHNOLOGY
Findings

Notice of Termination by Contractor and Abandonment of Site in May 2022

In May 2022, the Contractor gave notice of termination of contract and abandoned the site
and only 40 per cent of the works were completed. Based on the advice of the Ministry of
National Infrastructure and Community Development (MNICD) and the Attorney
General’s Office (AGO), MOETEST proceeded with the termination of the contract on
11 January 2023.

Advance Payment and Performance Security from Bank not released

On 12 January 2023, eight months after the contractor abandoned the works, MOETEST
requested the encashment of the Advance Payment Guarantee and Performance Security of
Rs 57 million from the Contractor’s Bank. However, the bank did not effect any payment
as of September 2023. The Advance Payment Guarantee expired on 29 January 2023 and
the Performance Security was valid up to 25 January 2024.

Estimated Damages of Rs 393.7 million for Breach of Contract

On 20 January 2023, MOETEST requested AGO to lodge a case against the Contractor for
damages for breach of contract. MNICD revised the estimated Contractor’s potential
liability for damages to Rs 393.7 million as at 14 July 2023.

Estimated Costs to complete the Contract – Rs 467 million

MNICD estimated the costs of completing the outstanding 60 per cent of the works at
Rs 467 million, compared to the project’s initial contract price of Rs 392.9 million. A new
contract for the completion of outstanding works has not yet been awarded. Due to the
delay in the completion of the project, the students are being deprived of the new school
infrastructure and facilities.

Debarment of the Contractor kept in abeyance

MOETEST made requests to the Procurement Policy Office (PPO) for the debarment of
the Contractor in February 2023 and again in August 2023. On 13 October 2023, PPO
informed MOETEST that the matter was being kept in abeyance until the case is deliberated
by the Court.

Root Causes

The IMU did not monitor the project properly.

MOETEST did not set up a Performance Review Committee (PRC) to report the
performance of the Contractor to PPO.

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VICE-PRIME MINISTER’S OFFICE, MINISTRY OF EDUCATION, TERTIARY EDUCATION, SCIENCE AND TECHNOLOGY
Recommendations

Necessary actions should be initiated by the Accounting Officer for the completion of
the outstanding works and for the recovery of the loss and amount due from the
Contractor.

A Project Steering Committee (PSC) should be set up to ensure proper project


monitoring.

Ministry’s Response

Actions have already been taken by MNICD to work the bidding documents for the
outstanding works.

III. Réunion Road Government School - Additional Claims from Contractors due
to Extended Stay resulting from Late Instructions by MNICD.

The project for the construction of a new classroom block and other facilities at Réunion
Road Government School was awarded on 9 January 2020 for a sum of some Rs 51.8
million. Works started on 3 November 2020 with an intended completion date of
3 November 2021.

Findings

Abandonment of Site on 20 June 2022 and Additional Claims of Rs 39.8 million from
Contractor

On 20 June 2022, the Contractor issued a notice of suspension of works and abandoned
all works on site due to MNICD’s failure to assess extension of time and payments.

A total amount of some Rs 16.9 million was already disbursed to the Contractor.

On 24 May 2022, the Contractor submitted a claim of Rs 29 million for extended stay.
After six months, MNICD assessed the claim at Rs 2.9 million. However, the
Contractor was not agreeable to the compensation proposed and on 8 August 2023
claimed an increased compensation of Rs 39.8 million.

During a site visit by Officers of NAO to the Reunion Road Government School on
18 September 2023, it was observed that the surrounding land was covered with dense
and unpleasant vegetation. The Ministry of Health and Wellness had apprised
MOETEST of the risk of proliferation of mosquitoes and rodents, which might cause
severe hazards to the school population occupying the old blocks adjacent to the
abandoned construction. The photos taken during the site visit are shown below:

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VICE-PRIME MINISTER’S OFFICE, MINISTRY OF EDUCATION, TERTIARY EDUCATION, SCIENCE AND TECHNOLOGY
Photos taken at Reunion Road Government School on 18 September 2023

Failure to assess the Performance of Contractor by the Performance Review Committee

The PRC did not evaluate the performance of the Contractor and did not make
recommendations regarding any action to be taken against the Contractor. As of September
2023, MOETEST has not taken any steps to terminate the contract. Consequently,
procurement procedures for the completion of the outstanding works could not be initiated.

Additional Works of Rs 1.7 million for Remedial Works to Existing School Blocks

As the students were being penalised due to leakages in classrooms and deplorable sanitary
conditions of the toilets in the old school compound, MOETEST disbursed an amount of
Rs 1.7 million to a private contractor for remedial works in the existing blocks on 30 June
2023, under a minor contract.

Root Cause

Poor project management by MNICD and IMU.

Recommendations

The Accounting Officer should initiate action for the completion of the outstanding
works at the new block.

Performance of contractors should be closely monitored by the PRC, in line with


Section 9 of PPO Regulations and Directives.

A PSC should be set up to ensure proper project monitoring.

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VICE-PRIME MINISTER’S OFFICE, MINISTRY OF EDUCATION, TERTIARY EDUCATION, SCIENCE AND TECHNOLOGY
Ministry’s Response

The works are still suspended and MNICD has not yet recommended the termination of
the contract. The course of action by the Ministry will depend on the recommendations of
MNICD and AGO.

IV Conversion and/or Construction of Specialist Rooms

With the Educational Reforms initiated in 2018, MOETEST decided to provide


57 Specialist Rooms in Academies and Regional Secondary Schools for technology studies.
As at time of audit in August 2023, only 31 Specialist Rooms projects were completed.

Findings

There were significant delays in the implementation of the conversion and/or


construction of Specialist Rooms in 17 schools and 9 Academies. The conversion of
Specialist Rooms in Academies was a priority project for the Ministry.

Two years had lapsed since the Academies became operational in July 2021.
Substantial delays were noted in the award of contracts.

As of October 2023, contracts for Specialist Rooms in two Academies and eight
Regional Secondary Schools were still not awarded.

As a result of the delay in implementation, students and educators were deprived of


proper facilities at these schools for the holding of practical classes.

There were 12 ongoing Specialist Rooms projects with contract value totalling
Rs 103.7 million. Delays of up to 195 days were observed in respect of 11 projects.

Nine of these projects, with total contract value of Rs 75.7 million were awarded to
one particular Contractor, within a period of six months.

As of September 2023, none of these contracts were completed within the expected
completion date.

Root Causes

Considerable time taken in the finalisation of the preliminary designs and bidding
documents of the above projects by MNICD.

Contractors failed to adhere to their initial programmes of work as there was no proper
supervision.

MOETEST did not perform a proper due diligence exercise to assess if the Contractor
had the necessary resources to carry out several projects simultaneously.

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Recommendations

The Accounting Officer should ensure that MNICD submits timely information for
the proper management of projects.

A PSC should be set up to ensure proper project monitoring.

Ministry’s Response

All the remaining Specialist Rooms projects have reached an advance stage in the
preparation of bid documents. Nine Specialist Rooms were expected to be completed
by end of December 2023.

Main reasons for time taken for preparation of bids included extra time needed to
review activity schedule on e-Procurement System and priority are given to other
urgent projects.

It is a lack of diligence combined with poor performances from the Contractor, that
has led to non-adherence to the initial programme of work.

V Construction of Swimming Pools

Projects for the Construction of four Swimming Learning Pools were initiated as a
budgetary measure announced in the financial year 2017-18. Only three contracts for a total
value of Rs 103.5 million have been awarded between March 2020 and March 2023 for
Plaine Des Papayes Government School (GS), Permal Soobrayen GS and Cascavelle GS.

Findings

Substantial delays in the implementation of the projects due to amendments in design


after award of contract, relating to the provision of a Service Gallery for the operation
of the swimming pool.

Lapses in bidding process and procurement procedures:

For the project at Permal Soobrayen GS, the contract was awarded on 3 March 2023
for Rs 34.7 million. However, the contract between MOETEST and the Contractor
had still not been signed and handing over of site was not effected as of October
2023.

Only the swimming pool, at Plaine Des Papayes GS was completed on 25 August
2023.

A total of 754 days, instead of 300, were taken to complete the works. Extension of
time of 289 days was granted to the Contractor, out of which 256 days were without
costs.

The Contractor submitted an additional claim for reimbursement of direct loss


and/or expense of Rs 15.3 million on 6 September 2022, following instructions from
MNICD to put on hold current tasks due to a change in the scope of work. On
19 September 2023, the Contractor reiterated his claim to MOETEST.

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Root Cause

Poor planning and monitoring of projects by the officer responsible of the IMU.

Recommendations

Performance of contractors should be closely monitored by PRC in line with


Section 9 of PPO Regulations and Directives.

The Accounting Officer should ensure that MNICD submits timely information for the
proper management of projects to prevent additional claims from the Contractor.

A PSC should be set up to ensure proper project monitoring.

Ministry’s Response

It is not only the IMU which is responsible for a project. Other units/departments of
MNICD are equally responsible for the realisation of the project.

VI Upgrading of Science Laboratories

Funds were provided for the construction, rehabilitation and upgrading of Science
Laboratories in the financial years 2021-22 and 2022-23 in secondary schools as shown in
Table 6-1.

Table 6-1 Science Laboratories Projects

Project Value
Project
Rs Million
1. Upgrading of Laboratories at Queen Elizabeth College 49.2
2. Rehabilitation of the Chemistry Laboratories at 28.2
France Boyer de la Giroday SSS
3. Renovation of Laboratories at Sookdeo Bissoondoyal 15.0
State College
4. New Science Block at John Kennedy College 116.1

Source: Ministry’s Records

Findings

Some of the laboratories in the State Secondary Schools (SSS) were in a deplorable
state and had deficiencies in terms of norms of equipment and furniture, and did not
meet all the criteria required for the Cambridge International Examinations.

More than two years have lapsed since requests for refurbishment of laboratories were
made. However, the projects were still at preliminary stage. Bid documents, bill of
quantities and drawings were still under preparation at MNICD level.

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Further delay in the bidding process of the laboratories would ultimately lead to an
increase in the cost of the refurbishment projects.

Root Cause

Considerable time in the finalisation of the preliminary designs and bidding documents of
the above projects at MNICD.

Recommendations

MOETEST should improve its planning and performance management processes for
better achievement of its objectives, in accordance with the Risk Management Policy.

The IMU should actively monitor the implementation of projects.

Ministry’s Response

All the projects have reached an advanced stage in the preparation of bid documents.

Maintenance works are being carried out at Zone level, pending implementation of the
capital projects to ensure that students are able to make use of existing laboratory.

Projects are monitored in real time by the Ministry through the platform of the Project
Management Information system.

6.2 Extended Programme

The Nine-Year Continuous Basic Education (NYCBE) Reform in the education system is
aligned with the United Nations Sustainable Development Goal 4 on Education, which is
to ‘ensure inclusive and equitable quality education and promote lifelong learning
opportunities for all’.

The primary objective of the program is to ensure that all students get the opportunity to
access basic education as a foundation for future learning and to make provision for all
students to successfully complete nine years of basic schooling.

The Extended Programme (EP) was introduced in year 2018 to support slow learners. The
programme was designed for students who did not meet the required criteria of the Primary
School Achievement Certificate (PSAC) examination.

In year 2018, a first batch of 3,291 students registered for EP, for a four-year lower
secondary programme culminating in the National Certificate of Education (NCE). Out of
these, 1,118 were admitted to regional SSS, and 2,173 opted for Private Secondary Schools
(PSS).

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Findings

High Failure Rate and High Level of Dropout in the Extended Programme for
Cohort Year 2018

Table 6-2 provides an overview of Extended Programme Cohort Year 2018:

Table 6-2 Extended Programme Cohort Year 2018

Particulars No. of Students


Enrolment of Students 3,291
Dropouts during
Year 2019 105
Year 2020 208
Year 2021-2022 (including students
575 888
not registered for NCE).
Sat for NCE Assessments in Year 2022 2,403
Passed NCE Assessments 71
Failed NCE Assessments 2,332

Source: Statistic Mauritius -Education

The EP is normally for a duration of four years. However, due to the COVID-19
lockdown, the programme was completed in five years. A total of 888 young
learners dropped out of the programme without acquiring a basic educational
qualification. A majority of the drop-outs was below the age of 16, which is the
mandatory age for compulsory education.

Out of the 2,403 students who sat for the examinations in the academic year 2022,
only 71 students, that is some three per cent, successfully passed the NCE.

Of the 2,332 EP students who did not succeed at the NCE assessments, 423, that is,
18 per cent, had opted to re-sit for the examinations after one year and 487 students
were enrolled for a training under MITD.

Only 54 of the 423 EP students who retook the exams in year 2023, after completing
six years under the EP, passed. Thus, 96 per cent of the first cohort from year 2018
could not successfully achieve the fundamental NYCBE Programme.

As of December 2023, information was not available at the Ministry regarding the
2,310 EP students, representing 70 per cent, who left the education system without
an educational or vocational qualification

A remedial educational programme to support these 2,310 students was not put in
place.

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No Key Performance Indicator was set for EP

One of the Key Performance Indicators (KPIs) of the Ministry on NCE relates to the
‘Percentage of students who have successfully completed the 9-year basic education’.
However, for EP, there was no specific KPI to assess the effectiveness of the program,
identify areas for improvement and ensure accountability in achieving the educational
goals.

Absence of Comprehensive Review of EP

There was no evidence that a comprehensive review of EP had been carried out by the
Ministry after the end of Assessment Year 2022 for the first cohort.

Detailed Programme Cost of EP not available

53 per cent of the Ministry’s budget, amounting to Rs 9.8 billion was allocated to secondary
education. However, the detailed costs of EP were not available to assess its cost
effectiveness.

Root Cause

The low success rate of EP can be attributed to:

a high level of absenteeism;

significant dropout rate;

insufficient facilitators; and

a lack of comprehensive review of the program.

Recommendations

A comprehensive assessment of the extended education program should be conducted


to identify specific challenges and shortcomings.

Feedbacks and insights from students, parents, educators, facilitators and other
stakeholders should be gathered on the program’s effectiveness for future
enhancements.

A suitable indicator should be designed exclusively to measure the performance of EP.

Ministry’s Response

With the COVID-19 induced disruption, the first cohort of EP did not benefit the
enhanced support as planned and this had adversely affected these students.

The Ministry has a student tracking mechanism for secondary school students which
follows up on the progression of students within the system. The Ministry also works

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with National Social Inclusion Foundation and its Family Support Unit to recover
students from the EP who may be at risk of dropping out of school.

The major root causes remain that the particularities of the students who are not
engaged in learning, have socio-emotional difficulties and need specialised support.

The NYCBE Reform is grounded by the philosophy of inclusiveness and EP forms


part of the NYCBE where the KPI is the percentage having achieved the NCE.

There is no dedicated specific vote item under the budget of this Ministry for EP.
Necessary consultation will be effected with the Ministry of Finance, Economic
Planning and Development (MoFEPD).

6.3 Institute of Technical Education and Technology still not fully operational

The setting up of the Institute of Technical Education and Technology (ITET) was
announced in Government Programme 2020-2024, in line with the Education Reform
Policy to create opportunities and pathways for students to pursue studies in technical and
technology education.

ITET Act 2021 was enacted on 24 July 2021 (Act No 13 of 2021) and came into force on
28 January 2022, except for Section 31 which provides for the vesting of the six Mauritius
Institute of Training and Development (MITD) training centres with ITET.

Findings

As of 10 August 2023, the Institute was not yet fully operational. ITET is administered
and managed by a Council which was constituted in January 2022. The Director and
staff have not yet been recruited for the effective functioning of the organisation.
Courses and programmes to be delivered, recruitment and/or redeployment of
academic staff were not finalised as of October 2023.

In October 2023, Section 31 of the ITET Act was still not proclaimed.

During the financial year 2022-2023, recurrent and capital grants totalling
Rs 20 million were provided for ITET. Only an amount of Rs 3.6 million was utilised
since the Institute was not fully operational.

Root Cause

Due to the Council’s delay to appoint a Director and required personnel, ITET cannot fulfill
its mandate.

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Recommendations

Timely action needs to be undertaken to render ITET operational.

ITET should be properly staffed to meet its objectives, as set out in the Act.

MOETEST should take appropriate action for the proclamation of Section 31 of the
ITET Act.

Ministry’s Response

ITET, being a newly set up Statutory Body, has to undertake a series of processes in
line with established government procedures prior to its full operation. Delays which
occur are beyond the control of the Institute.

An Officer-In-Charge has been appointed since February 2023 and he is backed by a


Manager Procurement and Supply recruited on a contract basis since November 2023
and two officers on full time-basis.

The operation plan already embarked upon by ITET will be boosted up with the
recruitment of the Director and staffs shortly.

The taking over of the centres is dependent on the readiness of ITET from various
perspective including human resource, legal, infrastructural, marketing and
operational.

6.4 High-Speed Internet Connectivity in Secondary Schools – Lapses in Project


Implementation

The Vision paper on Information and Communication Technology (ICT) in Education,


dated February 2021, emphasizes the significance of connectivity in strengthening the
deployment and usage of technology in education in a 21st-century globalised and hyper-
connected environment. In this context, a Project Steering Committee, co-chaired by
MOETEST and Ministry of Information Technology, Communication and Innovation was
set up to ensure the implementation of the High-Speed Connectivity project.

School Net II Project

Government has been investing to improve internet access in schools through high-speed
fibre optic cables to secondary schools.

The School Net II project did not materialise since the supplier failed to complete the
contract, though a total disbursement of Rs 81.7 million was made.

None of the 164 secondary schools were connected to the Internet, and the infrastructure
put in place under the previous project became obsolete.

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It is to be noted that in its Audit Reports for the financial years 2015-16 to 2020-21, NAO
highlighted issues relating to the failure to provide high-speed internet connectivity to 164
secondary schools.

High-Speed Internet Connectivity in Secondary Schools

Following the non-operalisation of the School Net II project, Government announced, as


per Budget Speech 2020-21, that it would invest Rs 100 million in the deployment of a
wireless area network in 155 secondary schools in Mauritius and Rodrigues.

In the financial year 2021-22, the project value for the whole connectivity project was
reviewed to Rs 170 million. Funds for ‘High-Speed Connectivity in Secondary Schools’
were allocated under the Ministry of Information Technology, Communication and
Innovation (MITCI) budget.

Provision of Rs 60 million was allocated in the financial year 2020-21, followed by


subsequent budgetary allocations of Rs 40 million for each of the financial years 2021-22
and 2022-23 for the implementation of the connectivity project.

The project aimed to deploy a wireless Local Area Network at each secondary school to
enable fast and reliable Wi-Fi through the Government Online Centre. The Central
Procurement Board launched a tender for High-Speed Internet Connectivity in Secondary
Schools in March 2022. None of the two bids received were responsive.

Government Intranet System Connectivity

As the implementation of the High-Speed Connectivity project was pending, provisions


were made in the MITCI Budget Estimates 2022-23 to take on board the connection of 160
secondary schools under the Government Intranet System (GINS) Framework. It was
decided that, in the first instance, this new framework would provide internet connectivity
(20 Mbps) to the Computer Laboratory only. Subsequently, MITCI would launch another
tender for the WIFI-LAN within secondary schools.

Findings

As at date of audit, August 2023, after nearly a decade, the long-awaited Internet
Connectivity project in secondary schools has not yet been implemented. Funds for a
total amount of Rs 140 million allocated in the budget for the financial years 2020-21
to 2022-23 remained unutilised. The delay in the project execution may result in a
considerable increase in project cost.

Internet connectivity at secondary schools is crucial for students and educators for the
timely submission of projects by students taking part in IT examinations, for
harnessing online material for research projects as well as for administrative tasks and
for seamless operation of digital initiatives, such as the Library Management System
and the Registry System which are dependent on consistent internet connectivity.

In June 2022, the decision was taken to connect 162 secondary schools to the GINS
network. The scope of the project was substantially modified. Initially, it aimed to
provide high-speed internet access for the entire school. However, as of August 2023,

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connectivity was successfully deployed only in the computer rooms of
47 secondary schools through the GINS Network.

A memorandum of understanding was not seen between MOETEST and MITCI,


clearly defining the roles and responsibilities of each stakeholder, the expected
completion date, and the cost to be subsequently incurred by the Ministry. Also, a
definite timeframe was not set for the remaining 115 sites.

As of August 2023, the new tender for WIFI-LAN was not launched.

Root Causes

Lack of project planning and monitoring by the Project Steering Committee (PSC)
which comprises representatives of MOETEST and MITCI.

The PSC did not prepare a detailed roadmap for the implementation of the project.

Recommendations

MOETEST should finalise the milestones and timelines for establishing high-speed
connectivity in order to implement the WIFI-LAN, which will enable internet
connectivity across the secondary schools for an effective educational technology
strategy.

The initiatives of MOETEST to deploy a wireless area network in 162 public and
private secondary schools in Mauritius and Rodrigues should be implemented for the
benefit of students in this digital era.

The PSC should prepare a detailed roadmap for the implementation of the project.

Ministry’s Response

According to MOETEST, the root causes remain the complexity of the projects,
financial constraints and interdependency of Ministries for implementation of the
project (MOETEST, MITCI and Ministry of Finance, Economic Planning and
Development).

Regarding the School Net II Project, the matter is being followed at the level of MITCI
and legal procedures thereto have been initiated by the Attorney General’s Office.

No funds were provided in the budget 2023-24 for the WIFI-LAN project.

The tender for WIFI-LAN is ready at the MITCI and may be launched as soon as funds
are made available.

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6.5 Procurement and Supplies Management - Central Supplies Division

The Central Supplies Division (CSD) of the Ministry of Education, Tertiary Education,
Science and Technology (MOETEST) is responsible for the procurement of:

(i) goods and services;


(ii) capital works; and
(iii) major contracts for Zone Directorates.

Procurement of school requisites is an annual exercise and the procurement planning is


done a year in advance. The lists of school requisites were collected from Zone Directorates
in October 2021 so that these requisites would be procured at the latest by mid-June 2022,
prior to the resumption of academic year 2023. During the financial year 2022-23, an
amount of Rs 181.2 million was disbursed under the above item.

Findings

Delay in the implementation of Projects or Acquisition of Goods due to several


Cancellations of Bidding Exercises

During the financial years 2021-22 and 2022-23, there were 83 and 143 bidding
exercises carried out by the CSD respectively. However 28 and 36 of these bidding
exercises were cancelled during these two financial years.

Eleven bidding exercises for the same procurement were cancelled twice and a bid for
the procurement of furniture in secondary schools was cancelled thrice. Recurrent
cancellation of bidding exercises resulted in unnecessary delays in the realisation of
projects and wastage of valuable resources in terms of time, costs, and manpower.

New bidding exercises were not yet finalised as at September 2023 in respect of
10 bids which were cancelled in the financial years 2021-22 and 2022-23.

Major projects such as the construction of additional classrooms and New Specialist
Rooms in schools were significantly delayed due to multiple cancellations, thus
penalising the students.

Delays in Procurement of Chemicals

Tenders for the procurement of chemicals were launched on three occasions during the
financial year 2022-23. However, as at end of September 2023, the procurement has not
yet been finalised. State Secondary Schools (SSS) have not received any supply of
chemicals for both biology and chemistry laboratories for more than three years.

Expired Chemicals

At paragraph 6.1 of Audit Report 2021-22, mention was made regarding the use of non-
hazardous expired chemicals. It was again noted that in the absence of fresh chemicals,
expired non-hazardous chemicals were being used in schools for practical classes in
laboratories.

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The unavailability of some reagents has resulted in a limited variety of practical classes
being carried out in schools for Grade 12 and Grade 13 classes, and also, the use of expired
chemicals for practical experiments may not give accurate results.

Delayed Deliveries of Textbooks and non-receipt of Dictionaries due to lapses in


Procurement Exercises

Two bidding exercises for additional textbooks were launched on 18 and 28 November
2022. Contracts for the delivery of textbooks for the academic year 2023 were awarded
to seven suppliers on 30 December 2022 and 12 January 2023 for the total sum of
Rs 16.6 million. The delivery of textbooks was made between two to seven weeks after
the resumption of school.

43 textbooks printed in 5,849 copies, including 125 enlarged copies for special needs
children of Grades 1 to 5, could not be awarded on time due to incomplete
specifications, high price and differences in the number of pages between the bidding
documents and the corresponding CD submitted to the suppliers.

Bids for these textbooks were relaunched on four occasions from January to April
2023. Consequently, a total of 5,774 textbooks, including 100 enlarged copies for
special needs children, were delivered to schools from April to July 2023.

In addition, 50 Performing Arts textbooks for Extended Programme classes and ICT
textbooks for 25 special needs children could not be procured.

Tender for the procurement of 1,580 copies of Kreol Rodrige textbooks for the
academic year 2023 for Grade 6 was launched on 19 January 2023. Contract was
awarded to two suppliers on 21 March 2023. The pupils and teachers’ textbooks were
delivered on 03 April 2023 and 14 April 2023 respectively. These textbooks were
received in Rodrigues during the second term.

Tenders for the supply and delivery of 12,500 units of Usborne English Dictionary
New Edition for Grade 4 were launched and cancelled on three instances as the bidders
did not meet all the mandatory and technical requirements. Students of Grade 4 were
not provided with the Dictionary during the academic year 2023.

Root Causes

Poor planning by the officer responsible for the Planning and Budgeting Directorate,
leading to the late start of procurement proceedings for textbooks and school requisites.

Lack of monitoring over the use and disposal of chemicals by Zone Directors.

Recommendations

A proper procurement plan that outlines timelines, responsibilities and budget for each
procurement project should be developed.

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The Director, Primary Education and Director, Secondary Education must ensure that
the specifications in bidding documents correspond with those submitted for printing
in order to avoid delays in the delivery of textbooks.

Ministry’s Response

Reasons for cancellation of bids were most often beyond the control of the
Procurement Section such as:

no/non-responsive bids received;

there are no registered bidders on the e-procurement system for some exercises; and

the bidder does not fulfil requirements in terms of performance security, insurance
cover and tax clearance certificates.

All chemicals have been procured except for some items of biology where bids were
not responsive. A new procurement exercise has been launched for the biology items.

The procurement process for textbooks is lengthy as it involves some 1,618,000


textbooks for around 377 different titles in respect of more than nine grades.

An officer at the Procurement Section has been tasked with the specific responsibility
to follow up on evaluation of bids and also bidding documents for textbooks. Better
coordination will be effected between the Procurement Section, MIE and MGI to
ensure the accurateness of the number of pages in specifications and CDs.

The previous procurement exercises of Usborne English Dictionary New Edition were
unsuccessful due to non-responsiveness of bids.

The function of the Textbook Committee will be strengthened so as to ensure that all
textbooks are procured in a more timely and effective manner.

Lease of Office Space for Central Supplies Division – Office Spaces not being utilised
for intended purpose

At paragraph 7.2 of the Audit Report for 2020-2021, it was reported that the CSD was
accommodated in two buildings with different lease terms and conditions.

Findings

The lease agreement for a surface area of 588 square metres located at Phoenix Central
was signed on 22 October 2020 on a shell and core basis for the period 1 November
2020 to 31 October 2023. The building was handed over back on 17 April 2023. The
rented space was not optimally used from November 2020 to 13 April 2023, resulting
in nugatory expenditure of Rs 8.1 million as rental payments.

The Ministry entered into a new lease agreement for an area of 722 square metres for
an initial period of one year starting 15 July 2023 with the current lessor of the building

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VICE-PRIME MINISTER’S OFFICE, MINISTRY OF EDUCATION, TERTIARY EDUCATION, SCIENCE AND TECHNOLOGY
housing the CSD at Pont Fer for a sum of Rs 4.5 million. As of October 2023, an
amount of Rs 1.1 million has been paid as rent.

However, the office space was not fully occupied as data points and electrical works
were still ongoing. It was only in November 2023, that the contract was awarded for
the outstanding works.

Root Causes

Lack of thorough assessment of requirements by the Manager (Procurement and


Supply) prior to award of lease.

Poor planning by the Manager (Procurement and Supply) regarding the award for data
points and electrical works at the newly leased premises.

Recommendation

There should be a proper planning mechanism in place to assess requirements, identify


additional works that need to be carried out and evaluate the corresponding financial
implications prior to finalising lease agreements.

Ministry’s Response

The staff of the Procurement Section have already moved to the new office as from end of
November 2023.

6.6 Key Performance Indicators

The Ministry has established in its Budget Estimates 2022-23, Key Performance Indicators
(KPIs) to evaluate the performance in the education sector. KPIs serve as critical indicators
to optimise resources with clear deliverables.

Findings

The benchmarks set were derived based from historical data without taking into
consideration the mission statement and the goals of the Ministry. Although substantial
budget to the tune of Rs 18 billion was provided for education, the Ministry has set
low levels of performance indicators. The outcome indicator and delivery unit were
not set at a level to achieve the Ministry’s goal which was to provide a quality
education and promoting lifelong learning opportunities and employability for all.

For the financial year 2021-22, KPI for the completion of the nine-year basic education
was targeted at 73 per cent. However, the actual result was 71.6 per cent, that is 1.4 per
cent lower. The KPI for the financial year 2022-23 was adjusted to
71.7 per cent which was based on the actual results of the financial year 2021-22 and
was expected to reach 75 per cent by the year 2030.

Targets for the financial year 2022-23 were set at a lower level for two metrics namely
‘Percentage of students who have successfully completed the nine years basic

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education’ and ‘Percentage of students taking at least two STEM (Science,
Technology, Engineering and Mathematics) subjects for HSC due to non- achievement
of the KPIs for the financial year 2021-22. More than 60 per cent of students chose not
to pursue STEM subjects. These were inconsistent with the Ministry’s mission
statement and United Nations Sustainable Development Goals.

The KPIs for the financial years 2021-22 and 2022-23 were compared with the actual
results and it was noted that for both financial years, the targets were not achieved.
Table 6-3 refers.

Table 6-3 Variances between Target and Actual figures for the following KPI
KPI Target Actual Variance Target Actual Variance
21/22 21/22 22/23 22/23
% % % % % %

Students who have 73.0 71.6 (1.4) 71.7 65.4 (6.3)


successfully
completed the 9 years
basic education
Higher education 48.5 50.0 1.5 50.6 48.4 (2.2)
Enrolment
School Certificate 72.0 85.7 14.3 86.0 78.5 (7.5)
pass rate
Students taking at 41.5 36.1 (5.4) 38.0 22.4 (15.6)
least 2 STEM subjects
for Higher School
Certificate
No. of research 400.0 345.0 (14) 425.0 351.0 (17.0)
articles/internationally
refereed/peer
reviewed publications

Source: Budget Estimates 2022-23

The percentage of students who have successfully achieved the nine years basic
education dropped from 71.6 per cent to 65.4 per cent when compared to the previous
financial year 2021-22. Also, there has been a decrease in the pass rate at School
Certificate level by 7.5 per cent in academic year 2023 compared to the previous year.
No increase was also noted in enrolment for higher education. Lower levels of access
to higher education and technical education may create inequalities in the community,
affect career, employability and not foster an inclusive society.

Root Causes

There was no proper monitoring by the Ministry to enhance the performance of


students.

Appropriate corrective measures have not been taken to improve performance.

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Recommendations

Target setting should focus on improving performance of teachers and students.

Targets should be monitored and the causes for non-achievement of goals should be
addressed.

Goals and indicators should be set towards education for sustainable development in
national education policy and school curriculum.

Ministry’s Response

The Ministry prepares the indicators according to the guidelines issued. The proposed
KPIs are discussed with Sector Ministry Support Team (SMST) and agreed upon prior
to finalisation at the level of the MoFEPD for inclusion in Budget Estimates.

The KPIs should be constant over the period to enable appropriate comparison and
effective monitoring of performance.

The majority of students under the Extended Programme could not attain the required
assessment level. This impacted on the overall pass rate for the whole batch.

There have been several developments over the past years resulting into multi pathway
approaches to Tertiary Education and Technical Education.

6.7 Government Assets Register

The Government Assets Register (GAR) was introduced in July 2017 to keep track of assets
from their acquisition to disposal, and ensure their efficient and effective management.
Prior to July 2022, records of non-financial assets were submitted to the Treasury in the
prescribed Application Desktop Integrator template. Following instructions from the
Treasury, as from July 2022 records were uploaded directly by MOETEST and Zone
directorates on GAR system. Examination of records revealed shortcomings in the updating
procedures relating to non-financial assets.

Findings

Capital expenditure incurred during the financial years 2020-21 to 2022-23, in


connection with construction in progress, extension and upgrading of schools, totalling
some Rs 1 billion were not uploaded in GAR.

Acquisition of non-financial assets, such as Other Machinery, Furniture & Fittings,


IT Equipment, amongst others, amounting to some Rs 394 million, were also not
uploaded on GAR by MOETEST since August 2022.

The accuracy and completeness of assets owned by MOETEST could not be


ascertained as GAR was not updated.

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VICE-PRIME MINISTER’S OFFICE, MINISTRY OF EDUCATION, TERTIARY EDUCATION, SCIENCE AND TECHNOLOGY
Root Cause

The Director Zone 4 did not put in place a proper system for input of data in GAR.

Recommendation

The Accounting Officer should ensure timely postings are made in GAR in accordance
with Treasury Circular No. 16 of 2017.

Ministry’s Response

The Ministry is having difficulties at the level of one particular Zone which is
impending on the effective recording of GAR system. Moreover, the Ministry is one
of the largest owners of assets, having more than 280 schools under its responsibility,
making the process challenging and time consuming.

There is a lack of human resources at all levels of the Ministry and resources are
allocated to priority areas which are directly linked to the main objectives of the
Ministry, that is, teaching and learning, management of schools and welfare of
students.

The Ministry is expecting to complete the update on GAR for financial year 2022-23
by February 2024.

6.8 Governance Issues – Non-compliance with Legislation

Provisions have been made in various legislations to impose a statutory responsibility on


Accounting Officers and Boards of Statutory Bodies with the objective of strengthening
accountability and transparency in the public sector.

Findings

Non-Submission of Report on Performance

As of 18 December 2023, the Report on Performance of MOETEST for the financial year
2022-23 had not yet been submitted to the Ministry of Finance, Economic Planning and
Development, despite the statutory deadline being 31 October 2023.

Non-Submission of Financial Statements for Audit

The Statutory Bodies (Accounts and Audit) Act requires the Chief Executive Officer of a
Statutory Body to submit the Annual Report to the auditor not later than four months after
the end of every financial year.

As of 14 December 2023, the following Statutory Bodies falling under the purview of
MOETEST, have not submitted their Financial Statements for audit as shown in
Table 6-4.

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VICE-PRIME MINISTER’S OFFICE, MINISTRY OF EDUCATION, TERTIARY EDUCATION, SCIENCE AND TECHNOLOGY
Table 6-4 Financial Statements not submitted to NAO for Audit

Statutory Body Financial No of Remarks


Year Financial (Accounts under Audit)
Statements
Early Childhood Care and 2020-21 to 3
Education Authority 2022-23

Private Secondary 2022-23 1


Education Authority

Rajiv Gandhi Science 2020-21 to 3


Centre Trust Fund 2022-23

Sir Seewoosagur 2017-18 to 6


Ramgoolam Foundation 2022-23

Université Des 2021-22 to 2 Financial Statements for 2020-21


Mascareignes 2022-23 was submitted on 21 September
2023.

University of Technology 2021-22 to 2 Financial Statements for 2018-19


Mauritius 2022-23 were submitted on 06 July 2023
Special Education Needs 2022-23 1
Authority
Source: NAO records

Annual Reports not laid before the National Assembly

The Statutory Bodies (Accounts and Audit) Act requires a copy of the annual report and
audited accounts of every Statutory Body to be laid before the National Assembly at the
earliest opportunity.

As of 14 December 2023, Annual Reports of four Statutory Bodies had not yet been laid
before the National Assembly as shown in Table 6-5.

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VICE-PRIME MINISTER’S OFFICE, MINISTRY OF EDUCATION, TERTIARY EDUCATION, SCIENCE AND TECHNOLOGY
Table 6-5 Annual Reports including audited Financial Statements not laid
before the National Assembly

Statutory Body Financial Year/ Date No of Financial


Period Certified Statements
Mauritius Examinations 2021-22 24.04.2023 1
Syndicate
Private Secondary Education 2021-22 05.04.2023 1
Authority
Quality Assurance Authority 2021-22 25.04.2023 1
Sir Seewoosagur Ramgoolam 2014 03.11.2022 2
Foundation 2015 03.11.2022
Source: National Assembly records

NAO is of the view that the Ministry should exercise control over Statutory Bodies and
other entities operating under its aegis to ensure that they fulfil their statutory
responsibilities regarding the preparation of financial statements, their submission for audit
and tabling before the National Assembly.

Ministry’s Response

The Annual Report for the Ministry for Financial Year 2022-23 has already been sent
to the Ministry of Finance, Economic Planning and Development on 15 January 2024.

The Mauritius Examination Syndicate has submitted its Annual Report 2021-22 to the
Ministry on 29 January 2024 and same is being processed to be tabled at the National
Assembly.

6.9 Follow-up of Matters Raised in the Audit Report 2021-22

A follow up of matters raised in the Audit Report for the financial year 2021-22 was carried
out. MOETEST was requested to inform the National Audit Office of the actions that have
been taken to address the findings and recommendations in the Report. The information
along with evidence collected through the review of files and documents were assessed and
discussed with the Ministry.

The status on actions taken on findings since the publication of the Audit Report are
summarised below. Out of nine findings, two (22 per cent) have been resolved, four
(45 per cent) have been partially resolved, and three (33 per cent) have not been resolved.

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VICE-PRIME MINISTER’S OFFICE, MINISTRY OF EDUCATION, TERTIARY EDUCATION, SCIENCE AND TECHNOLOGY
Ministry’s Response – NAO
SN Findings
Status as of February 2024 Comments
Non- issue of Chemicals and use of Expired Chemicals for Practical Classes (Page 82)
1 Requisites of chemicals for Biology Chemicals procured under the
and Chemistry Laboratories were not procurement exercise initiated for
Resolved
issued for the academic years 2020 to the Academic Years 2020-22 are
2022. being delivered to schools for use in
(Pg 82, Para 6.1) Academic Year 2024.

Inadequate Monitoring of the Supplementary School Feeding Programme in Zone D’Education


Prioritaires (ZEP) Schools (Page 83)
2 For 14 ZEP schools under Zone 1, it A bid exercise was launched on 14
was observed that contracts awarded March 2023. However, the
to two suppliers for the provision of procurement could not be concluded
meals to six ZEP schools were as a challenge was received from a
renewed on a term or monthly basis bidder regarding bid rigging. The
for at least two years since August case has been concluded by the
2020. Competition Commission and Not Resolved
(Pg 83, Para 6.2) referred back to PPO since the
Commission did not raise any issue
of collusion. In view that the
Ministry cannot stop the provision
of meals, contracts are being
renewed on a monthly basis.
Non - Compliance with Fire Prevention and Fire Safety Requirements – Schools Operating
without Fire Certificates (Page 84)
3 According to records of MOETEST, Out of the 286 educational
as of September 2023, all the schools buildings, 10 already have their fire
were operating without a fire certificates. The applications of fire Partially
certificate. The Mauritius Fire and certificate for the remaining schools
Resolved
Rescue Services (MFRS) had will be dependent on the completion
informed the Ministry, since 2017, to of installations of fire alarms
take necessary actions to be fire systems and construction of
compliant.(Pg 84, Para 6.3) emergency staircases.
4 There was no evidence that fire drills Fire drills have already been carried
were carried out, fire plans were out in 46 schools and the drills are
prepared and training was provided to being planned for the remaining
school staff in case of an emergency schools. Resolved
fire outbreak on school premises as 49 training sessions have been
required under Section 75 of the carried out for school staff in fire
Occupational Safety and Health Act safety awareness.
2005 and Section 19 of the MFRS Act
2013.(Pg 84, Para 6.3)
5 Construction of emergency staircase Emergency staircase completed for
were still outstanding in 18 schools. two schools (Pamplemousses SSS &
(Pg 84, Para 6.3) P Shibchurn GS). The Ministry is
dependent on the MNICD for Partially
implementation of works. Resolved
Additionally, certain schools face
space constraints and other technical
issues.

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VICE-PRIME MINISTER’S OFFICE, MINISTRY OF EDUCATION, TERTIARY EDUCATION, SCIENCE AND TECHNOLOGY
Ministry’s Response – NAO
SN Findings
Status as of January 2024 Comments
6 Fire Alarms Systems were not Fire alarm installed in two schools
operational in eight schools and 47 (M. Foogooa & Bambous SSS).
schools were operating without Fire The Ministry is processing with a
Alarms Systems. survey of the defective alarms to Partially
(Pg 84, Para 6.3) identify the scope of services for Resolved
repairs. The exercise is expected to
be completed by the end of February
2024.
Lapses in Execution and Management of Capital Projects (Page 86)
7 Construction of the New The contractor has served a Mise en
Ramsoondar Prayag SSS Demeure to the Ministry in May
Delay in completion of project due to 2022. The case is at court level.
Not Resolved
breach of contract by the Contractor. Moreover, the AGO has been
requested to sue the contractor for
(Pg 86, Para 6.4)
damages.
8 Reunion Road Government School – AGO advised that the MOETEST
Works suspended by Contractor due may proceed with termination of
to delay by MOETEST in resolving contract in the event the contractor
issues. is not agreeable to compensation
and resumption of works. However, Not Resolved
(Pg 86, Para 6.4)
contractor is not agreeable to the
proposal and the advice of the
MNICD is still awaited on the way
forward since November 2023.
9 Provision of Specialist Rooms in 34 Projects have been completed,
Academies and Regional State 13 are ongoing and 10 not yet
Secondary Schools – awarded.
Partially
Significant delays in the
implementation of projects due to Resolved
procurement issues.
(Pg 86, Para 6.5)

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VICE-PRIME MINISTER’S OFFICE, MINISTRY OF EDUCATION, TERTIARY EDUCATION, SCIENCE AND TECHNOLOGY
6.10 Follow-up of Matters Raised in the Performance Audit Report 2022

Title of Report: “Use of Information and Communication Technology in Enhancing


Teaching and Learning”

Date Issued: June 2022

A follow up of matters raised in the abovementioned Performance Audit Report was carried
out. The Ministry of Education, Tertiary Education, Science and Technology was requested
to inform the National Audit Office of the actions that have been taken to address the
findings and recommendations in the Audit Report. The information along with evidence
collected through review of files and documents were assessed and discussed with the
Ministry.

The status on actions taken on key findings and recommendations since the publication of
the Audit Report are summarised below. Out of 20 recommendations, eight (40 per cent)
have been implemented, nine (45 per cent) have been partly implemented and three (15 per
cent) were not implemented.

Ministry Response –
NAO
SN Findings Recommendations Status as of January
Comments
2024
1 No clarity on the use To improve ICT policy A policy paper for a
of ICT in teaching to include all coherent approach to
and learning for educational sectors. implementing online
grades at the upper (Pg 47, Para 5.1(i)) teaching in schools has Partly
secondary level and been developed and is
in the tertiary being finalised. The Implemented
education sector. strategy is already
(Pg 20, Para A.2.1) implemented in the
tertiary sector.
2 The draft ICT in To develop an Development of an
Education Strategy appropriate strategic EdTech strategy is in
Not
2019-2021 had not plan for ICT for progress. The Strategy
Implemented
yet been finalised and education. will be finalised by June
approved. (Pg 47, Para 5.1(ii)) 2024.
(Pg 20, Para A.2.2)
3 No approved ICT The ICT strategic plan All public HEIs have
strategic plan for the should include a developed their
tertiary sector. strategy for Higher respective Technology Partly
(Pg 21, Para A.2.3) Education Institutions Enabled Learning Policy/ Implemented
(HEIs). Strategy and Action Plan.
(Pg 47, Para 5.1.1(i))

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VICE-PRIME MINISTER’S OFFICE, MINISTRY OF EDUCATION, TERTIARY EDUCATION, SCIENCE AND TECHNOLOGY
Ministry Response –
NAO
SN Findings Recommendations Status as of January
Comments
2024
4 The Ministry did not To encourage Initiatives have been
carry out a review of co-operation among embarked upon for
the initiatives taken by HEIs through the common platforms. The
the different HEIs with establishment of a Open Educational
respect to the mechanism that fosters Resources (OER) has
integration of ICT in mutual collaboration been implemented in Partly
teaching and learning among them and avoids May 2023 and a common Implemented
to identify duplication. admission platform is in
inefficiencies and (Pg 47, Para 5.1.1(ii)) the pipeline.
ineffectiveness.
(Pg 22, Para A.2.4)
5 Absence of guidelines Minimum and A minimum and
on the usage of tablets. maximum durations for maximum screen time
(Pg 24, using Early Digital policy has been
Para B.2.2.1(i)) Learning Programme implemented.
(EDLP) devices for Implemented
teaching and learning in
the classroom need to be
worked out.
(Pg 47, Para 5.2.1(i))
6 The replication of the Ministry needs to The Ministry stands
textbooks materials on carefully plan and set guided by Mauritius
the digital medium the characteristics for Institute of Education
was not satisfactory as the type of digital (MIE) for curriculum
they did not help to learning resources it development and
cultivate new skills as requires for teaching training.
reported by zone and learning through Feedback obtained from
directorates and ICT tools. users are addressed Partly
educators. Digital learning prior to rolling out. Implemented
The Ministry did not resources need to be
specify the adequately designed,
requirements and tested and evaluated
qualities for the digital before their use.
content to be prepared (Pg 47,
for the EDLP.
Para 5.2.2 (i&ii))
(Pg 25, Para B.2.2.2)
7 An evaluation of the A proper evaluation of A systemic evaluation by
EDLP was not done. the EDLP is an external party is
(Pg 26, recommended. planned by 2024, after
Para B.2.2.3) (Pg 48, Para 5.2.3) completion of the primary
cycle. In the meantime, a
national survey on the
Partly
state of devices, usage and
Implemented
level of training has been
carried out by the e-
Education Directorate in
collaboration with the
Primary Directorate in
October 2023.

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VICE-PRIME MINISTER’S OFFICE, MINISTRY OF EDUCATION, TERTIARY EDUCATION, SCIENCE AND TECHNOLOGY
Ministry Response
NAO
SN Findings Recommendations – Status as of
Comments
January 2024
8 School administrators, There should be Amendments as
the inspectorate cadre continuous evaluation of improvement are
and educators did not digital content made brought to the
Partly
carry out continuous available for the EDLP. contents based on the
Implemented
evaluation of digital (Pg 48, Para 5.2.2(iii)) feedback from users.
content.
(Pg 28, Para B.2.2.4)
9 Head Masters/Deputy School management and Training on the CMS
Head Masters and the inspectorate cadre Dashboard analytics
school inspectors were need to be trained on for inspectors was
Partly
not trained on the use of how to measure and carried out in
Implemented
the Classroom evaluate the impact of December 2023.
Management System digital technology on
(CMS) software. teaching and learning.
(Pg 28, Para B.2.2.5) (Pg 48, Para 5.2.4)
10 No evaluation of the The SSP needs to be Evaluation of the SSP
Student Support Portal evaluated. has been completed Partly
(SSP) was carried out. (Pg 48, Para 5.4) and the report was Implemented
(Pg 32, Para C.3) submitted in
December 2023.
11 The evaluation tools The quality assurance The Quality
used by Quality framework and Assurance
Assurance and handbook for quality Framework and
Inspection Division did assurance need to be Handbook have
not cover teaching and revised to include been reviewed in
learning through ICT education through ICT May 2023.
use. There were no and, necessary training Capacity building of Implemented
procedures for school dispensed to school Quality Assurance
self-evaluation and for personnel and quality officer completed.
external evaluation on assurance officers to
the use of ICT for assess the quality of
teaching and learning. education provided.
(Pg 32, Para C.4) (Pg 48, Para 5.5)
12 Learning Management A national platform The Ministry is
System used by HEIs supporting online working towards a
Not
were not customised to learning could be Common Teaching
Implemented
meet their developed. and Learning
requirements. (Pg 48, Para 5.6(i)) Management System.
(Pg 33, Para D.2.1)
13 A gap analysis on A training needs gap The gap analysis has
training needs to analysis needs to be been carried out in
conduct online courses undertaken. October 2022.
was not carried out to Pg 49, Para 5.6(ii))
identify the new skills
Implemented
and knowledge
required for effective
online teaching by
academics.
(Pg 34, Para D.2.2)

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VICE-PRIME MINISTER’S OFFICE, MINISTRY OF EDUCATION, TERTIARY EDUCATION, SCIENCE AND TECHNOLOGY
SN Findings Recommendations Ministry Response – NAO
Status as of January Comments
2024
14 Inadequate internet Internet bandwidth Each HEI ensures that
connection still should be strengthened. adequate bandwidth is
remained a major (Pg 49, Para 5.6(iii)) available and is
challenge for HEIs to regularly reassessed and Implemented
carry out online upgraded.
teaching.
(Pg 35, Para D.2.3)
15 Adequate facilities and HEIs should ensure All university students
resources were not proper mechanisms are have a minimum of IC3
available at HEIs to in place for students to certification. Any
minimise the digital acquire the digital skills specific digital skills
Implemented
divide. required to engage required for a particular
(Pg 36, Para D.2.5) effectively in their course are integrated in
learning process. the course content
(Pg 49, Para 5.6(iv)) module.
16 As of December 2021, a A national OER policy OER policy approved
national Open should be developed. by Government in
Educational Resource (Pge 49, Para 5.7) December 2022 and is
Implemented
(OER) policy had still being implemented.
not been developed.
(Pg 37, Para D.3)
17 The Ministry did not Consider the Budgetary, manpower
sufficiently explore possibilities to make and technological
ways to make teaching TV education more constraints prevent the
and learning via TV interactive; implementation of the
more interactive. It Put in place recommendations.
also, neither provided mechanisms for
support to students, communication
parents/caregivers and between teachers and
Not
educators nor enabled students (and their
Implemented
two-way parents) and for
communication and sending feedback;
feedback that could and
help to make TV Provide necessary
programmes impactful. support to all the
(Pg 38, Para E.2) parties.
(Pg 49, Para 5.8(i))

18 No survey among Necessary surveys need A draft questionnaire


students, parents and to be done to measure has already been
teachers was carried out the proportion of prepared and is being
to assess the availability students who miss out finalised. The
of ICT facilities at both on education as a result MoETEST is planning
the dispensing and of not having access to to survey the students, Partly
receiving ends, and the ICT facilities. teachers and home Implemented
extent of education (Pg 49, Para 5.8(ii)) environment of the
continuity through the students as from
different modes of February 2024.
learning proposed.
(Pg 40, Para E.3)

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VICE-PRIME MINISTER’S OFFICE, MINISTRY OF EDUCATION, TERTIARY EDUCATION, SCIENCE AND TECHNOLOGY
SN Findings Recommendations Ministry Response – NAO
Status as of January Comments
2024
19 No guidance was Need to consider A minimum and
provided to teachers preparing guidelines maximum screen time
and learners on screen for the overall well- policy has been
time, health and being of students when implemented with
wellbeing so that they continue their Health and Wellness Implemented
education can be education outside of Directorate.
pursued in the best the classroom.
possible way. (Pg 50, Para 5.9)
(Pg 41, Para E.5)
20 The Ministry did not To consider developing The Ministry held
formulate and offer appropriate guidelines brainstorming sessions
guidelines to parents for parents for the with key stakeholders
for the continued and effective learning and for design of an e-
effective learning of overall wellbeing of brochure. A pamphlet Implemented
their children. their wards. has been prepared for
(Pg 42, Para E.6) (Pg 50, Para 5.10) parents in connection
with healthy tips in
using ICT equipment.

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VICE-PRIME MINISTER’S OFFICE, MINISTRY OF EDUCATION, TERTIARY EDUCATION, SCIENCE AND TECHNOLOGY
120
VICE-PRIME MINISTER’S OFFICE, MINISTRY OF EDUCATION, TERTIARY EDUCATION, SCIENCE AND TECHNOLOGY
7 – VICE-PRIME MINISTER’S OFFICE,
MINISTRY OF LOCAL GOVERNMENT AND
DISASTER RISK MANAGEMENT
7.1 LOCAL GOVERNMENT AND DISASTER RISK MANAGEMENT

7.1.1 Follow-up of Matters Raised in the Audit Report 2021-22

Construction of Market Fair and Traffic Centre at Mahebourg – Rs 83.7 million:


Construction Site in an Abandoned State

At paragraph 7.1.1 II of the Audit Report 2021-22, it was reported that the Contractor had
abandoned the construction site with 65 per cent of the works remaining to be completed.
Payments already made to the Contractor totalled some Rs 41.7 million.

The District Council of Grand Port (DCGP) had terminated the Contract and the
Performance Security of some Rs 8.4 million was encashed in December 2022. The
Ministry of Local Government, and Disaster Risk Management (MoLGDRM) decided to
request the Ministry of National Infrastructure and Community Development (MNICD) to
take over the project, but with a revised scope of work to accommodate an everyday market
on the first floor of the building.

In August 2023, the existing iron structure was found to be deteriorating through
weathering. Tests were needed to determine whether it was solid enough to accommodate
a floor.

It was also not known whether DCGP has taken legal action against the defaulting
Contractor.

Root Cause

Proper assessment of the Contractor’s credentials in relation to public contracts, its


ongoing contracts at the time of award and its ability to undertake additional construction
contracts against its available resources was not done by the relevant authority.

Ministry’s Response

MoLGDRM and DCGP were not involved in the evaluation of bids. Proper assessment
of the Contractor’s credentials was hence not possible at the level of the Council and
Ministry. The Contract was awarded following approval of the Central Procurement
Board (CPB).

Only about 35 per cent of works was completed by the Contractor.

MoLGDRM has approached MNICD to consider taking over the project for
completion.

PPO Circular No. 5 of 2020 which provides extension of time without cost during
COVID-19 Pandemic was one of the main reasons for the Contractor for stoppage of
work.

121
NAO Comments

DCGP and residents in the Council’s area are being deprived of the intended benefits of the
new Market Fair, whose completion was long overdue.

Also, there is a risk that delay in taking actions to resume and complete the construction of
the Market Fair may render the expenditure incurred to-date nugatory.

7.1.2 Procurement of 7 Lorries Mounted with Crane and 17 Tipper Lorries

At paragraph 7.1.2 II of the Audit Report 2021-22 and in the follow up section of the
Report, it was pointed out that the delivery of the 7 lorries mounted with Crane and 17
Tipper Lorries, procured for Local Authorities, was still pending three and half years after
the award of the contracts in July 2019.

The vehicles proposed by the Supplier were not technically compliant with specifications
in bid documents. Multiple commissioning exercises had been carried out in respect of
these two types of vehicles. The contracts were not terminated as per advice from the
Attorney-General’s Office (AGO).

As of July 2023, the delivery of these vehicles was still awaited and no payment has yet
been made to the Supplier.

The status of the procurement was reviewed for the period up to July/August 2023 and the
following were noted:

Lorries Mounted with Crane - Rs 25.7 million

Four commissioning exercises, with different commissioning teams, were done up to


September 2022.

In October 2022, a new proposal was received from the Contractor pertaining to the
manufacture of a prototype of the lorry according to the technical specifications in the bid.
MoLGDRM agreed to the proposal.

In May 2023, the fourth Commissioning Team informed that the prototype, as well as the
other lorries accordingly constructed, had been examined in February and March 2023
respectively, and were found to be tender compliant.

As of July 2023, that is four years after the award of the contract, the lorries were still not
delivered as the ‘Mise en Route’ formalities relating to registration, fitness and licensing
were not yet completed.

Ministry’s Response

The seven lorries mounted with crane were duly commissioned in the presence of
Engineers of MNICD and were found to conform to tender requirements.

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VICE-PRIME MINISTER’S OFFICE, MINISTRY OF LOCAL GOVERNMENT AND DISASTER RISK MANAGEMENT
MoLGDRM has initiated necessary action for the delivery of the lorries and accessories
from the Supplier for onward distribution to Local Authorities concerned, after
completing all Mise en Route formalities.

Tipper Lorries – Rs 42.3 million

The 17 Tipper Lorries were said to be urgently needed by Local Authorities in 2018.

The non-conformance to tender specifications that related to the Power Take-off and Tipper
Mechanism of the Lorries, which were required to be factory fitted, was not resolved.

The foreign manufacturer informed in November 2022 that the outline of the truck and the
sub-frame assembly had been assembled as per proper engineering design, taking into
consideration the weight of the rear body and the total payload.

In January 2023, as per recommendations of the Technical Team comprising three


mechanical engineers, MoLGDRM requested the Supplier to arrange for necessary tests to
be carried out by the foreign manufacturer to confirm whether the lorries were technically
fit and proper for its designated use and that safety standards and efficiency requirements
were met. The tests were done in June 2023.

Compliance certificates and a detailed test report from the foreign manufacturer were still
awaited as of end of July 2023.

Ministry’s Response

The Ministry has set up a Technical Committee to advise on the safety standards and
efficiency requirements of the 17 Tipper Lorries.

In June 2023, necessary tests, as recommended by the Technical Team, were carried
out in the presence of the official local representative of the foreign manufacturer as
well as an independent registered mechanical engineer.

Upon completion of the tests, compliance certificates were circulated to the Technical
Team. The Team has submitted its report in August 2023, which is under consideration.

NAO Comment

Overdue delivery of the lorries/equipment is precluding the concerned Local Authorities


from providing an improved quality of scavenging and other services to their inhabitants.

7.1.3 Interests paid to the Contractor for the Construction of the Market Fair at
Rivière du Rempart - Rs 522.1 million

The District Council of Rivière du Rempart (DCRDR) refusal to pay valid claims for works
carried out by the Contractor for the Construction of the Market Fair at Rivière du Rempart,
as well as the ill-advised decision taken by the Local Authority had resulted into dispute
totalling some Rs 24 million being finally settled for Rs 632 million, as shown in the
Table 7-1 and 7-2.

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VICE-PRIME MINISTER’S OFFICE, MINISTRY OF LOCAL GOVERNMENT AND DISASTER RISK MANAGEMENT
Table 7-1 Awards paid to the Building Contractor

Rs million
Capital: Value of Works Certified plus
90.5
VAT
Interest on Late Payments of Claims for
522.1
Works Certified
Legal Charges 19.7
Total 632.3
Source: NAO Workings

The above amount did not include legal charges borne by the Attorney-General’s Office in
connection with the case at the Privy Council.

Findings

In March 2010, the Contractor informed MoLGDRM that it had taken the case for unpaid
claims by the Council to Supreme Court. The Supreme Court had appointed an Arbitrator
to determine the disputed amounts:

Table 7-2 Amounts in Dispute

Description Amount
Rs
Phase I 5,767,102
Phase II 5,817,129
Phase III 7,081,298
Retention Money 2,251,084
Liquidated Damages 3,075,000
Total 23,991,613
Source: Letter from the Contractor

The Arbitrator had issued three interim awards totalling Rs 10.35 million, of which
Rs 7.25 million represented interest on claims of Rs 3.1 million up to July 2013.

In February 2015, a new Arbitrator was appointed with new terms of reference, as the
previous one had withdrawn from the case. The new Arbitrator had to resolve a claim of
Rs 118 million as demanded by the Contractor.

In August 2015, the new Arbitrator granted an interim award of Rs 3.5 million to the
Contractor, representing refund of liquidated and ascertained damages (LAD) of
Rs 3.1 million plus VAT. The Arbitrator awarded the interest claimed on the LAD for the
period September 2005 to September 2015 at the rate of 15.33 per cent in the sum of
Rs 11.2 million in July 2016. These amounts were paid by the Council out of its own funds.

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VICE-PRIME MINISTER’S OFFICE, MINISTRY OF LOCAL GOVERNMENT AND DISASTER RISK MANAGEMENT
In May 2016, following advice from its Legal Adviser, DCRDR requested MoLGDRM to
arrange for the release of Rs 75.98 million to effect a part payment to the Contractor. With
regard to the issue of interest, arbitration cost and legal expenses, these would be subject to
the decision of the Arbitrator at a later stage. MoLGDRM was of view that it could not be
party to any decision which the Council might take in the arbitration as it was not a party
to any agreement with the Contractor.

On 23 September 2016, the Arbitrator granted an interim award of Rs 72.9 million plus
VAT, in full and final satisfaction of the capital claimed and to be paid within 60 days of
the date of award.

The Council made a request to MoLGDRM for a special grant-in-aid to settle the award
but was advised to consider taking a loan from a commercial bank.

In December 2016, this interim award of Rs 72.9 million plus VAT was made executory
by the Supreme Court.

In February 2017, Government decided that the Council should not effect any payment
until further notice. The AGO was requested to explore action to prevent execution of the
award, as it was against public interest. The distress warrant was not executed after
intervention of the Council’s Legal Advisers.

The amount of Rs 83.9 million awarded in September 2016 was paid on 30 April 2018,
after unsuccessful attempts before the Supreme Court to set aside the award.

In May 2018, a final award was granted to the Contractor regarding compound interest on
the amount of Rs 72.9 million for the period 10 October 2005 to 3 May 2018, and simple
interest of 3.5 per cent thereafter till date of payment. The interest worked out amounted to
some Rs 412 million as at 9 January 2019.

The ruling of the Arbitrator was however annulled by the Supreme Court because the signed
award of the Arbitrator was delivered on 3 January 2019, whereas the mandate of the
Arbitrator ended on 31 December 2018.

The Contractor then appealed to the Privy Council on the validity of the annulment by the
Supreme Court.

In June 2023, the Privy Council ruled in favour of the Contractor and was of view that the
signed award delivered on 3 January 2019 was valid and enforceable. Council had to pay
the outstanding amount and all the interest accrued till date of payment.

The interest element of Rs 503.7 million as per the final award was ultimately paid on
15 June 2023.

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VICE-PRIME MINISTER’S OFFICE, MINISTRY OF LOCAL GOVERNMENT AND DISASTER RISK MANAGEMENT
Root Cause

Deficient contract management by DCRDR had cost the Treasury more than
Rs 600 million.

Ministry’s Response

It is difficult to situate responsibilities on the matter, unless a full-fledged independent


enquiry is conducted.

NAO Comments

The inclusion of a clause specifying the rate of interest applicable for any late payment of
amounts due under Specific Conditions of Contracts be considered.

7.1.4 Unpaid Stall Fees at Victoria Urban Terminal - Rs 21.1 million

Government assumed a constructive obligation in relation to the letting of stalls at the


Victoria Urban Terminal. Unpaid stall fees totalling some Rs 21.1 million remittable by the
City Council of Port Louis (CCPL) to the Victoria Station Ltd was settled by Government
in June 2023. The expenditure, which was not budgeted for in 2022-23 Estimates, is likely
to become a recurring expenditure of MoLGDRM.

Findings

On 13 November 2019, CCPL signed an agreement for 60 years with Victoria Station Ltd
(VSL) to accommodate 1,000 hawkers in the hawker’s area of the Victoria Urban Terminal.
The fees payable monthly by the stallholders to CCPL was Rs 4,000, of which an amount
of Rs 3,500 was to be remitted to VSL. 594 hawkers were to be accommodated on the first
floor of the Victoria Urban Terminal and 406 on its second floor. VSL was guaranteed a
monthly income of Rs 3.5 million, irrespective of the level of occupancy and rental fees
collected from stallholders.

As at 30 June 2022, only 680 stallholders had signed their lease agreement.

During the financial year 2022-23, many stallholders surrendered their stalls. As at 30 June
2023, there were only 476 occupied stalls. Many of the stallholders did not pay the monthly
rental, resulting in CCPL owing VSL some Rs 21.1 million.

In June 2023, MoLGDRM disbursed a special grant-in-aid to CCPL to clear the debt of
Rs 21.1 million.

Given the high number of non-paying stallholders and the dwindling number of occupied
stalls, this charge is likely to become a recurring expenditure of MoLGDRM.

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Ministry’s Response

On 28 October 2023, CCPL had issued a Letter of Termination of Lease to


44 non-compliant stallholders on the second floor of the building.

The Council is making arrangement for the relocation of stallholders of the second floor
to the first floor.

The Private Sector had not responded to the Council’s invitation for Expression of
Interest for the renting of the second floor for commercial purposes in August 2023.
VSL has been requested to look into the possibility of converting the second floor of
the Urban Terminal to be rented out as office space.

The relocation of hawkers from the streets of Port Louis was a social issue that was
addressed by Government with the view to improving fluidity of circulation in the City
and to protect the livelihood of 1,000 hawkers.

NAO Comments

The Council should have carried out a proper financial risk analysis to evaluate any
negative impact on its finances. This case should serve as a learning experience for other
Councils that are promoting similar projects which should not become a financial burden
for public finances.

7.1.5 Construction of Additional Block at Bel Air Market Fair by the District Council
of Flacq

The project for a new market fair in Bel Air with 220 stalls was awarded on a ‘Design,
Build and Turnkey Contract’ for the sum of Rs 117.6 million in 2019. Additional works of
some Rs 28.8 million representing 24.5 per cent of the initial contract price and approved
by CPB were also allocated to the Contractor. The initial project was to be completed by
September 2021.

In September 2021, the District Council of Flacq (DCF) informed MoLGDRM that
225 more stalls for vegetables and fruits were needed. As the Contractor for the new market
was still on site and that there would be a Defects Liability Period of one year after
completion of the ongoing contract, the only option available was to allocate the work to
the actual Contractor under Direct Procurement.

The Council proposed to construct the second block under Section 25(2)(d) of the Public
Procurement Act which concerns direct procurement, after obtaining legal advice from the
AGO.

Negotiations were held with the Contractor and the price of Rs 35.19 million including
VAT was agreed for the construction of the additional block.

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Findings

The need to double the number of stalls at the market from 220 to 445 was identified
when the initial contract was nearing completion.

Provisions of the Public Procurement Act and Regulations pertaining to Direct


Procurement and Variation Works under Construction Contracts were not complied
with by DCF.

Following legal advice sought in September 2021, AGO advised MoLGDRM to request
DCF to confirm whether it was satisfied that:

(i) the proposed new block comprising 225 stalls, was additional works to the
existing project. If this was not the case, whether the works had, through
unforeseen circumstances, become necessary, with appropriate justifications
thereof;

(ii) the separation of the additional works from the initial contract would be difficult
for technical or economic reasons; and

(iii) the cost of the additional works would be within 30 per cent of the initial
contract value.

Justification provided by the Council was that a survey was carried out in the private
market of Bel Air in 2020 and it was found that it would not be possible to shift all
stallholders to the new market fair.

On 15 November 2021, DCF issued the Letter of Award for the additional block to the
Contractor for the sum of Rs 35.19 million.

The expected completion date was April 2022.

As of April 2023, the whole value of the Contract was certified as completed. A sum of
Rs 3.1 million was retained as maximum liquidated damages under the Contract.

Root Cause

A proper assessment of the number of stalls that needed to be constructed was not done
prior to the floating of the initial tender for the New Market at Bel Air Project by the District
Council of Flacq.

Ministry’s Response

There was a proposal by Government on 3 September 2021 to consider the construction of


an additional block for Fruits and Vegetables Section as the 220 stalls would not suffice to
cater for the existing number of sellers of fruits and vegetables at the private market fair of
Bel Air.

The initial project was designed pre- COVID-19 and there was no intention at that time for
the private market to be closed permanently.

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VICE-PRIME MINISTER’S OFFICE, MINISTRY OF LOCAL GOVERNMENT AND DISASTER RISK MANAGEMENT
As soon as the new market fair would be operational, the private market fair would be
closed permanently.

NAO Comment

DCF should, henceforth, always carry out a comprehensive feasibility study for any capital
project.

7.1.6 National Multi - Hazard Emergency Alert System Project

In 2016, the National Risk Reduction and Management Act was proclaimed with objectives
such as the prevention and reduction of the risk of disasters, mitigation of disasters, disaster
preparedness, effective response to disasters and the management of post-disaster activities.

In 2016, the then Ministry of Environment, Sustainable Development, Disaster and Beach
Management, approved the implementation of the National Multi-Hazard Emergency Alert
System (NMHEAS) project with the following objectives:

Disseminate messages and alerts to First Responders, Ministries/Departments,


stakeholders and the general public, including tourists and foreign workers;

Broadcast alerts through a number of communication channels; and

Implement interfaces to interact with stakeholders.

The project is presently under the portfolio of MoLGDRM and is funded by the National
Environment and Climate Change Fund.

Findings

The Project NMHEAS was scheduled to be commissioned and Go-live as from March
2020, but has still not been fully implemented and operationalised three years later.

The Risk Management Framework, Risk Register, Business Continuity Plan, and
Disaster Recovery Plan were still under preparation by MoLGDRM.

Root Cause

The Steering Committee set up for managing the NMHEAS Project did not adequately
monitor the implementation of the project.

Recommendations

The Accounting Officer has to expedite:

the implementation of the project to avoid any further delay in its operationalisation
so as to improve the preparedness of the population against harm from natural
disasters; and

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VICE-PRIME MINISTER’S OFFICE, MINISTRY OF LOCAL GOVERNMENT AND DISASTER RISK MANAGEMENT
the finalisation of the Risk Management Framework, the Business Continuity Plan
and the Disaster Recovery Plan.

Ministry’s Response

As at now, the Primary Server has been used since 24 June 2022 during high wave
warning, Intense Tropical Cyclones, Mass casualty evacuation exercise, Torrential rain
and Heavy rain events. So far, some 20,000 SMS and Emails have been sent using the
Primary Server on more than 100 different occasions from 2022 to 2024.

Over and above the complexity associated with the NMHEAS, the delay in project
implementation has been exacerbated by a combination of time-consuming
procurement of supplementary technical components, unforeseen contractual,
financial, technical and COVID-19 outbreak issues.

Risk Management would be included within the updated scope of work for the
re-assessment/consultancy study for Phase 2.

The Risk Register was provided by the Consultant. The Supplier has provided a
Backup, a Recovery plan and a Contingency Plan in case of any failure for the Primary
and Secondary Server. Moreover, the IT Security Unit (ITSU) from Ministry of
Information Technology, Communication and Innovation has already been contacted
to perform a Risk Assessment for the National Disaster Risk Reduction and
Management Centre (NDRRMC) side.

Project Implementation

The Project is being implemented in two phases:

Phase I – Common Alert Protocol Aggregator

The Common Alert Protocol (CAP) Aggregator system will disseminate warnings and
alerts to a maximum number of people and stakeholders within an acceptable time frame,
through a number of communication channels such as TV, Radio, Internet (including email,
website, social media) and Mobile Apps.

Phase II – Cell Broadcast Centre

Cell Broadcast is a method of sending messages to multiple mobile telephone users in a


defined area at the same time and realises the communication towards the GSM network.

Contracts for the Project

Consultancy Contract – US$ 514,488

The contract for Consultancy Services was awarded in October 2016 to a foreign firm for a
total amount of US$ 514,488, that is, some Rs 17.5 million, inclusive of VAT.

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VICE-PRIME MINISTER’S OFFICE, MINISTRY OF LOCAL GOVERNMENT AND DISASTER RISK MANAGEMENT
The deliverables of the Consultant included submission of the inception report and the
bidding documents, award of contract and commissioning of Phase 1, Post Go Live
Assessment, Audit Report and Technical and Operational Assistance.

The service contract which was for a duration of 36 months, was signed in December 2016.

As of November 2023, the Consultant has already been paid 95 per cent of the total contract
amount. The remaining five per cent would be disbursed upon full implementation of
Phase 1 by the Supplier. The Consultancy contract has thus, been extended on four
occasions until September 2024 at no additional cost.

Contract for the Supply of Two Servers with the CAP Aggregator - € 543,724

In November 2019, following an international bidding exercise, a foreign Supplier was


awarded the contract for the procurement, installation and commissioning of the two
servers with the CAP Aggregator for a total amount of € 543,724, equivalent to
Rs 24.8 million.

As of November 2023, 50 per cent of the contract sum totalling € 271,862 was paid to the
Supplier, that is, 20 per cent as advance money and 30 per cent of the contract sum for the
Primary Server in November 2019 and June 2023, respectively.

Findings

The two servers for the CAP Aggregator were received in February 2020. The Primary
Server is kept at the Government Online Centre (GOC) and the Secondary Server is located
at NDRRMC. The supplier had already completed the installation and configuration of both
servers.

As explained, the core applications of the Primary Server have been replicated to the
Secondary Server and User Acceptance Testing has been carried out in December 2023.

As of February 2024, the following shortcomings were observed:

Though the Primary Server was not yet commissioned, 30 percent of the contract
amount was paid in June 2023.

The two servers have not yet been commissioned four years after.

The Supplier has at least to carry out the Cell Broadcast Centre (CBC) trial and
Failover Testing to implement the project.

The Consultant still has some pending tasks, such as testing of the CAP Aggregator
and the Go Live Assessment and the submission of a technical and operational audit
of the system.

Root Cause

There has been no proper monitoring of the project implementation by the Accounting
Officer and the Project Steering Committee.

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VICE-PRIME MINISTER’S OFFICE, MINISTRY OF LOCAL GOVERNMENT AND DISASTER RISK MANAGEMENT
Recommendation

Because of the delays, consideration be given to charge liquidated damages as per the
contractual terms.

The Accounting Officer should follow up with the foreign Supplier and Consultant for
the completion of the outstanding contract works.

Ministry’s Response

The Really Simple Syndication (RSS) on website feed is not appearing on the Home
page of the NDRRMC website and has been the main cause in the delay in carrying
out the failover test scheduled in October 2022. GOC and the Web Team have been
requested to troubleshoot this matter at the earliest. Once resolved, same will be
replicated to other Ministries website.

To-date, this will require further work between the supplier and GOC team in order to
find an appropriate solution.

Once CBC trial and Failover testing is completed by the Supplier, we will proceed for
the commissioning of Phase I of NMHEAS. The project is being monitored by a
Project Management Team and a Steering Committee.

After the system is operational for a period of one year, NDRRMC will ensure that the
Consultant submit a technical and operational audit report of the system.

Status of Phase II as of November 2023

CBC under Phase II of the Project, was still at an embryonic stage.

The network development meant for Phase II was still in progress and communication
channels were not yet ready.

Modalities on agreements have not yet been finalised with the local Mobile Network
Service Providers for sending messages to multiple mobile phone users.

Recommendations

The Accounting Officer shall:

Prepare and finalise all MOUs with local Service Providers to operationalise the CBC;

Develop communication and education campaigns to the community at large; and

Finalise the legal framework for the CBC.

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VICE-PRIME MINISTER’S OFFICE, MINISTRY OF LOCAL GOVERNMENT AND DISASTER RISK MANAGEMENT
Ministry’s Response

The NDRRMC has explored several avenues with regards to the financing of the
implementation of Phase II – CBC. Once funding and implementation of the CBC is
finalised, Phase II project will be initiated and finalised.

The network development meant for Phase 2 is still in progress and communication
channels are not yet ready.

It will be a crucial component to sign a Memorandum of Understanding with the three


Mobile Network Service providers under the guidance of the Information and
Communication Technologies Authority (ICTA).

Further discussion will be held with the regulatory body ICTA to decide on the way
forward concerning the regulatory framework for CBC.

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7.2 MAURITIUS FIRE AND RESCUE SERVICE
7.2.1 Sub-Optimal Operating Capabilities affecting Service Delivery

For the financial year 2022-23, the Mauritius Fire and Rescue Services (MFRS) targeted
an operational rate of 85 per cent for its fleet of vehicles. As at end of June 2023, 75 per
cent of the fleet of vehicles were not in operable condition.

Findings

In September 2023, nearly 75 per cent of the fire fighting vehicles of MFRS and 25 per
cent of its essential appliances for fire rescue services were not in an operable condition.
The status of four essential equipment/appliances for fire and rescue services was found to
be as per Table 7-3.

Table 7-3 Status of Essential Equipment/Appliances for Fire and Rescue Operations

Sn Equipment/Appliances Total Off the Beyond In


Available Run Repairs Operation
1 Fire Fighting and Rescue 58 37 8 13
Vehicles
2 Aerial Appliances 4 1 2 1
3 Portable and Floating Pumps 45 9 - 36
4 Trailer Mounted Pumps 13 13 - -
Source: NAO workings

The reasons for the inoperability of recently acquired equipment were reviewed and the
following were observed:

20 Fire Fighting and Rescue Vehicles (FFRVs)

The 20 FFRVs acquired under the Indian Line of Credit in 2022, at the cost of some
Rs 275 million, were put off the run due to the following:

(i) The dashboard of all the vehicles were displaying “Service due”. Though the
vehicles were still under warranty until September 2024, the Local Representative
of the Foreign Supplier was not attending to their yearly preventive maintenance.
Eight of these vehicles were already sent to the local representative’s premises, four
of which were for a period of more than four months. The vehicles had to be put off
the run to prevent any breach of the conditions of the Warranty.

(ii) A work procedure established by the Supplier for the reporting of defects, and for
necessary repairs/maintenance works by the local representative, was not being
adhered to by the Foreign Supplier.

The Supplier had, in September 2023, instructed MFRS not to send any vehicle to
the local representative without his prior approval.

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VICE-PRIME MINISTER’S OFFICE, MINISTRY OF LOCAL GOVERNMENT AND DISASTER RISK MANAGEMENT
In July 2023, MFRS requested MoLGDRM, as Client for the procurement project, to
inform the Supplier to carry out the repairs and maintenance works urgently to avoid any
further disruption of service.

13 Trailer Mounted Pumps (TMPs)

13 TMPs purchased for some Rs 20 million under the Indian Line of Credit were also put
off the run because of overdue preventive maintenance not being carried out by the local
representative of the foreign supplier. The pumps were under warranty for a period of two
years up to December 2023, and in order not to compromise the Warranty, MFRS deemed
it appropriate to stop operating the pumps until the preventive maintenance was carried out.

At two Fire Stations, the trailer pumps were not sheltered and were exposed to weather
hazards.

Root Cause

The foreign supplier was not adhering to work procedures relating to the reporting and
attending to defects in equipment during the warranty period so that a significant number
of FFRVs and TMPs were out of the run, thereby seriously affecting the operating
capabilities of MFRS.

Department’s Response

Being given that the FFRVs and TMPs were delivered under the Indian Line of Credit by
an Indian based company, constant follow-up is being made through mail with the
manufacturer in view of repairs/maintenance works.

A Scheduled Maintenance Plan has been submitted by the Supplier in November 2023 to
service the trucks and trailers.

The delays for repairs and maintenance have now been addressed. As at end of December
2023, 15 FFRVs have been serviced and repaired as per Scheduled Maintenance Plan
submitted by the supplier. Other FFRVs requiring repair works and Preventive
Maintenance have already been transferred to the local representative workshop.

As at start of January 2024, 81 per cent of the fleet of vehicles were on the run.

With regards to TMPs, as of 19 January 2024, eight out of the 13 were on the run. Action
has already been initiated by the supplier to have the pumps repaired.

Tarpaulin is being used to protect the pumps against weathering. Appropriate shed will be
constructed.

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VICE-PRIME MINISTER’S OFFICE, MINISTRY OF LOCAL GOVERNMENT AND DISASTER RISK MANAGEMENT
Aerial Appliances

The Articulated Hydraulic Platform (AHP) purchased at some Rs 49.5 million in


October 2021 was put in an inoperative state since April 2023, that is within 18 months of
its acquisition, due to oil leakages in the rear offside extensible jack. The defect was
considered significant as it could compromise the functional system of the vehicle and
associated appliances in firefighting and rescue operations.

The issue was promptly reported in April 2021 to the local representative of the foreign
supplier who conducted diagnosis thereof in May 2023. However, the local representative
was not attending to the defects, despite several reminders being sent to it.

Power Generator of the equipment was also not operational since October 2022.

MFRS did not have any legal recourse against the local representative as the latter was only
an agent to the Foreign Supplier.

Root Cause

Lack of appropriate provisions in bid documents in respect of procurement of specialised


equipment from overseas regarding redress, legal or otherwise, available to the buyer.

Recommendation

The Accounting Officer may, after consultation with the Procurement Policy Office,
consider the insertion of a ‘Case of Need’ clause in future contracts for the procurement of
specialised equipment through International Bidding exercise, and which involve local
agents.

Department’s Response

Following several correspondences with the foreign supplier, one overseas specialised
Hydraulic Engineer attended to diagnose the defect in October 2023. He reported that the
hydraulic piston of the offside jack required to be replaced. The part needed to be
manufactured in a specialised workshop in Italy. The repair works were expected to be
completed in three months.

On 12 January 2024, the Supplier informed that the parts have already been ordered from
the Manufacturer of the AHP and would be available soon.

A new battery for the Power Generator was fitted and same was operational.

7.2.2 Shortcomings in the Fire Certificates Processing System

In the Follow Up section of Audit Report for the financial year 2021-22, it was reported
that further actions were taken by MFRS with regards to the following:

(a) Management information system on prescribed premises in the island;

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VICE-PRIME MINISTER’S OFFICE, MINISTRY OF LOCAL GOVERNMENT AND DISASTER RISK MANAGEMENT
(b) Processing of applications for Fire Certificates; and

(c) Follow up on conditions attached to new Fire Certificates issued and expired Fire
Certificates.

These actions, as well as other actions, taken by MFRS were reviewed and the following
shortcomings were noted:

Management Information System

(i) No Follow-up on Surveyed Prescribed Premises without Fire Certificates

In January 2023, with a view to the setting up of a Database Cell for Prescribed Premises
in the National Electronic Licensing System (NELS) Operation Room, all fire stations
delegated officers to carry out surveys and collect data on prescribed premises on the island.
A summary of the data compiled showed that 1,691 buildings were surveyed, of which
1,444 were operating without a Fire Certificate.

Action was not seen taken to ensure that owners of prescribed premises without a fire
certificate had applied for the Certificate after the survey.

Department’s Response

The onus to apply for a fire certificate remains on the owner/occupier as per Section 19 of
the MFRS Act.

Staff of the Operation Section are mandated to attend to emergencies/disasters on a priority


basis.

Action has been initiated at the level of NELS Operation Room to monitor that owners of
the prescribed premises without a fire certificate, have applied for the Certificate after
survey carried out by the operations section. However, progress is slow due to lack of
human resources.

(ii) Difference between Database of MFRS and Ministries for Non-Fire Compliant
Buildings

The Secretary for Public Service issued a circular requesting Ministries and Government
Departments to identify non-fire compliant buildings under their purview and to come up
with a roadmap to obtain Fire Certificate for those non-compliant buildings. The
information was to be submitted to a Special Monitoring Committee mandated to follow
progress on the matter.

A few Ministries and Government Departments submitted a list of non-fire compliant


buildings under their purview in April 2023.

The list submitted did not agree with the database of MFRS. For instance, the Ministry of
Education, Tertiary Education, Science and Technology (MOETEST) reported only 36
non-fire compliant buildings, whereas the database of MFRS showed that MOETEST had
240 non-fire compliant buildings.

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VICE-PRIME MINISTER’S OFFICE, MINISTRY OF LOCAL GOVERNMENT AND DISASTER RISK MANAGEMENT
Department’s Response

The discrepancy in database for both compliant and non-compliant buildings available at
the MFRS/ Ministries/ Special Monitoring Committee has been addressed and same is
being closely monitored and updated.

The 240 prescribed buildings of the MOETEST have been removed from the database
monitored by the Special Monitoring Committee and are being followed up by a
Monitoring Committee under MOETEST.

Statutory Deadline for Processing of Fire Certificates Unachievable

The statutory deadline of 13 working days for the processing of applications and issue of
fire certificates under the MFRS Act could not be met. During the period September 2021
to August 2023:

(i) out of 7,262 fire certificates, 6,998 were issued with delays ranging from 14 to
376 days; and

(ii) 442 out of 443 improvement notices, raised in respect of new applications received and
still in progress in August 2023, were issued after the statutory deadline of
13 days.

Department’s Response

The statutory deadline of 13 days is respected when all the conditions of the issue of a fire
certificate are met.

Delays in the processing of fire certificates’ applications are due to want of personnel.
OPSG has recommended to increase the number of officers. A Human Resource Audit has
already been initiated and a report for additional Human Resource requirement will be
submitted for the forthcoming budget proposal.

Expired Fire Certificates Renewal

Follow-up was not done in respect of the non-renewal of 1,476 out of 5,110 fire certificates
expired during the period September 2021 to August 2023.

Department’s Response

NELS Operation Room has set up a monitoring mechanism to follow up the renewal of
expired Fire Certificate.

Economic Development Board notifies MFRS of Fire Certificates which are due to expire
in the coming 60 days. Where necessary, MFRS then issues a notice to apply for a Fire
Certificate online.

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7.3 MAURITIUS METEOROLOGICAL SERVICES
7.3.1 Revamping of the Mauritius Meteorological Services Website

The contract for the revamping of the Mauritius Meteorological Services (MMS) website
was signed with a Service Provider on 3 March 2021 for some Rs 1.1 million and the project
was to be delivered, installed and commissioned within four months from the date of
signature of the contract, that is, on 4 July 2021. However, the project completion date was
extended to 31 August 2021.

The key deliverables of the project comprised the following:

(i) An application software coupled with a backend interface to facilitate the overall
process and operations related to MMS which will be accessible via Government
Intranet System;

(ii) An online service comprising a content management system/web portal; and

(iii) Social media marketing through the setting up of a Facebook page for MMS.

Findings

Delay in Completion

The project had undergone four unsuccessful commissioning exercises, that is two in
September 2021, and subsequently in April and May 2022.

The test for simulating 250,000 concurrent visitors on the new website failed and this
constituted a significant non-compliance with contractual requirements.

Central Information System Division could not carry out a final commissioning as the
loading of reports could not be generated and the matter was referred to Ministry of
Local Government and Disaster Risk Management (MoLGDRM) for guidance on the
way forward.

The Virtual Service on MT Cloud Platform was rented for some Rs 79,000 per month
by MMS for sustaining the project. As the project was not yet completed in August
2021, MMS unnecessarily paid some Rs 1.9 million, for the period September 2021 to
July 2023, which exceeded the cost of the project.

The contract agreement did not include a clause to enable MMS to claim liquidated
damages for delays.

Upon recommendation of MoLGDRM, a Performance Review Committee was set up and


at a meeting held on 28 November 2022, it was decided:

To freeze the project due to poor performance and failure to meet the project
deliverables and seek the advice of MoLGDRM to stop payment of the monthly rental
of some Rs 79,000 for the IT infrastructure.

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VICE-PRIME MINISTER’S OFFICE, MINISTRY OF LOCAL GOVERNMENT AND DISASTER RISK MANAGEMENT
To inform the Service Provider to assume responsibility for the failure of project
deliverables as per the agreed terms of reference.

On 28 February 2023, the Procurement Policy Office informed MMS that it may terminate
the contract for non-performance, after seeking advice from the Attorney-General’s Office.

Root Cause

The Accounting Officer did not monitor the project properly.

Recommendation

The Accounting Officer should ensure effective management of the project.

Department’s Response

Since May 2022, the project is being monitored. Several meetings were held by MMS and
the parent Ministry with the Service Provider to address the shortcomings and the way
forward regarding the completion of the project.

7.3.2 Automatic Weather Station Idle - St Brandon

On 8 March 2023, a Letter of Acceptance (LoA) was issued to a foreign company for the
supply of three complete sets of Automatic Weather Station (AWS), two for Mauritius and
one for St Brandon, for the contract sum of € 57,907, equivalent to some Rs 3 million. The
equipment were to be delivered by 7 May 2023.

Payment of € 55,587, equivalent to some Rs 2.7 million was effected on 27 June 2023 under
the National Environment and Climate Change Fund.

Findings

AWS Lying Idle

The AWS were delivered on 9 June 2023. Two missing elements, for the AWS for
St Brandon, namely one mechanical fixing part of the satellite modem and the lighting
conductor fixing part on the mast were received in November 2023.

As of December 2023, the equipment was still not in operation as infrastructural work had
not yet been undertaken at St Brandon.

Warranty Period

As per Clause 13 of the bidding documents, the warranty period was 24 months from the
equipment’s delivery date. However, as of December 2023, six months of the warranty
period had already lapsed and the equipment was still not functional.

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VICE-PRIME MINISTER’S OFFICE, MINISTRY OF LOCAL GOVERNMENT AND DISASTER RISK MANAGEMENT
Root Cause

The acquisition of the AWS was not adequately planned by the Accounting Officer.

Recommendation

The Accounting Officer should ensure that the infrastructural works are undertaken at the
earliest, to enable the installation of the AWS.

Department’s Response

The AWS has been installed on the observation plot of the MMS for monitoring as from
October 2023 and satellite communication is still under negotiation.

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VICE-PRIME MINISTER’S OFFICE, MINISTRY OF LOCAL GOVERNMENT AND DISASTER RISK MANAGEMENT
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VICE-PRIME MINISTER’S OFFICE, MINISTRY OF LOCAL GOVERNMENT AND DISASTER RISK MANAGEMENT
8 – MINISTRY OF LAND TRANSPORT AND LIGHT RAIL,
AND FOREIGN AFFAIRS, REGIONAL INTEGRATION
AND INTERNATIONAL TRADE

8.1 LAND TRANSPORT AND LIGHT RAIL


8.1.1 Road Safety

Implementation of National Road Safety Strategy

According to the National Road Safety Strategy (NRSS) 2016–2025 adopted in year 2016,
the objective is to achieve a 50 per cent reduction in the number of people killed and
seriously injured on the road network by the year 2025. Ten fields of action have been
defined under the Strategy, namely:

(i) Setting up of a Research and Development Programme.

(ii) Improvement of Safety Standards of the road infrastructure.

(iii) Reorganisation of the roadworthiness control of vehicles.

(iv) Setting up of an effective communication strategy.

(v) Strengthening of the Road Traffic Law and Enforcement.

(vi) Development of new perspectives for delivering Road Safety Education.

(vii) Re-engineering of the Driving Licensing Scheme.

(viii) Provision of Post-Crash Trauma Care and Medical fitness to drive.

(ix) Reduction of Accident Costs and funding of the Strategy.

(x) Setting up of a Road Safety Academy.

A Road Safety Programme, which consists of engineering measures undertaken to improve


the road infrastructures in order to enhance the security of road users, was introduced by
the Ministry Land Transport and Light Rail.

Cost of the Strategy and Road Safety Programme to Government

For the last five financial years 2018-19 to 2022-23 a total amount of Rs 827.6 million was
disbursed under expenditure items “Implementation of National Road Safety Strategy” and
“Road Safety Programme” as shown in Table 8-1.

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Table 8-1 Actual Expenditure on Road Safety

Financial Year Actual Expenditure


National Road Safety Total
Road Safety Programme
Strategy
Rs million Rs million Rs million
2018-19 34.3 173.5 207.8
2019-20 25.5 188.4 213.9
2020-21 14.0 120.2 134.2
2021-22 25.7 93.9 119.6
2022-23 29.1 123.0 152.1
Total 128.6 699.0 827.6

Source: Treasury Accounting System

Trend of Fatalities in Road Accidents - Main Objectives not achieved

The number of people killed in road traffic accidents for the years 2020 to 2022 are as
shown in Table 8-2.

Table 8-2 Number of People killed in Road Accidents

Year Total No. of Autocycles/Motorcycles


People Killed Riders/Pillion Riders Killed
No. Percentage
2020 131 54 41
2021 108 70 66
2022 108 53 49

Source: Traffic Management and Road Safety Unit

Findings

In year 2015, 139 people were killed in road traffic accidents. In year 2023, 138 people
were killed. The strategy and its accompanying engineering measures implemented
under the road safety programme did not yield the expected result.

The annual percentage of death of riders/pillion riders of autocycles/motorcycles over


the total number of people killed in road accidents was nearly 50 per cent for the years
2020 to 2022.

The speed cameras were unable to capture speed violations by autocycles/ motorcycles
in most cases.

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MINISTRY OF LAND TRANSPORT AND LIGHT RAIL,
AND FOREIGN AFFAIRS, REGIONAL INTEGRATION AND INTERNATIONAL TRADE
Recommendation

Amendments to legislation on Road Traffic (Construction and Use of Vehicles)


Regulations 2010 should be finalised so as to align the requirement for number plates of
autocycles/motorcycles with that of four wheelers to enable speed cameras to capture all
speed violations.

Ministry’s Response

The trend has been reversed since base years (2010-2014) and there has been a decrease
of 14 per cent from 2015 to 2022.

Within the strategy, intensive sensitisation campaigns are carried out regularly on the
media and road safety curriculum has been introduced in primary schools.

The current speed camera network cannot identify the registration plates of
autocycles/motorcycles, due to the angle at which photographs are taken. To this end,
the Ministry is envisaging to introduce a new camera system with the latest technology
as regards capture of video images which would allow the identification of the
registration plates of autocycles/motorcycles.

Road Safety Programme

The responsibility of the Traffic Management and Road Safety Unit (TMRSU) is to ensure
that the road system efficiently meets the economic needs of the country and is safe for all
road users.

During the financial year 2022-23, a total amount of Rs 128.3 million was disbursed from
the expenditure item “Road Safety Programme” as shown in Table 8-3.

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MINISTRY OF LAND TRANSPORT AND LIGHT RAIL,
AND FOREIGN AFFAIRS, REGIONAL INTEGRATION AND INTERNATIONAL TRADE
Table 8-3 Road Safety Programme - Budgeted and Actual Expenditure

Final
Initial Budget Actual
Project Budgetary
(Appropriation) Expenditure
Provision
Rs million Rs million Rs million
Road Markings and traffic signs 12 16 13.4
Footpaths, walkways, drains and
handrails 10 30 29.2
Crash barriers, hardshoulders, etc 5 11 10.2
Traffic Calming Measures 5 13 12.4
Construction of Bus laybys and shelters 11 21 20.9
Treatment of Hazardous Roads 5 6 5.8
Implementation of Cycle Network 10 10 9.4
Arrestor Bed on Motorway M1 at
Soreze 20 - -
Arrestor Bed on Motorway M3 at
Valton 12 - -
Adaptive Traffic Control System 8 - -
Infrastructural Works icw Metro –

Review of Traffic Scheme at Reduit 20 27 27.0


Improving Access at Trianon
Station 20 - -
Footbridge at Phoenix Station 20 - -
Total 158 134 128.3
Source: Treasury Accounting System

Road Safety Programme – Funds for some Projects in approved Budget not spent

Projects under the Road Safety Programme, which involve mainly engineering measures,
are undertaken to improve the road infrastructures to enhance security of road users.

Finding

Out of the initial budget of Rs 158 million under the Road Safety Programme for
13 projects, a total of Rs 80 million for five projects, namely Arrestor Beds on Motorways
at Soreze and Valton, Adaptive Traffic Control System, Improving Access at Trianon
Station and Footbridge at Phoenix Station, were not spent. This represented some
50 per cent of funds provided in the budget. Funds initially included in the budget for these
projects were subsequently reallocated to other projects or items of expenditure.

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MINISTRY OF LAND TRANSPORT AND LIGHT RAIL,
AND FOREIGN AFFAIRS, REGIONAL INTEGRATION AND INTERNATIONAL TRADE
Root Cause

The Director of TMRSU did not properly plan the implementation of the Road Safety
Project.

Recommendation

A detailed implementation and procurement plan for road safety infrastructures should be
worked out for the constant monitoring of each project.

Ministry’s Response

For the project “Adaptive Traffic Control System”, bids were launched. The contract,
which was awarded to a Consultant, was subsequently terminated by the Ministry due to
non-submission of bank guarantee. The bidding documents are being revised and a new
tender exercise would be launched accordingly.

Road Safety Programme - Lapses in Procurement Management

(i) Arrestor Beds at Sorèze and Valton

In financial year 2022-23, a total amount of Rs 32 million was budgeted for Arrestor Beds
at Sorèze and Valton which are considered as blackspots. The objective of these projects
was to provide for Arrester Beds to enable runaway trucks/buses to safely stop in case of
brake failure. Project Request Forms were certified in May 2022 and the works were
estimated to be completed within ten months. Construction was planned to start in
January 2023 and completed by November 2023.

Finding

Considerable delay was noted in the implementation of both projects. The scheduled date
to launch the tenders was November 2022. Bidding documents were not yet finalised for
launching of bids for the project at Sorèze. A first bidding exercise was carried out in
June 2023 for the project at Valton for which no bid was received.

Root Cause

The Director of TMRSU did not adequately plan the projects.

Recommendation

Projects for which funds have already been budgeted should be properly managed by the
Director of TMRSU and the Accounting Officer.

Ministry’s Response

TMRSU does not have the required expertise in the design of arrestor bed at Sorèze and it
was decided to have a Design and Build project for its implementation. Given that another
arrestor bed had to be constructed at Valton, it was decided that the Ministry would proceed

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MINISTRY OF LAND TRANSPORT AND LIGHT RAIL,
AND FOREIGN AFFAIRS, REGIONAL INTEGRATION AND INTERNATIONAL TRADE
in the first instance, with the Design and Build project at Valton to have a first experience
and to be guided by expert’s advice for the selection of the site at Soreze.

(ii) Infrastructural Works in connection with Metro at Trianon and Phoenix


Stations

Three projects in connection with infrastructural works relating to the Metro were planned
for implementation during financial year 2022-23 and a provision of Rs 60 million was
included in the initial budget for this purpose.

Findings

No expenditure was incurred for two projects with budgetary provision of


Rs 40 million namely “Improving Access at Trianon Station” and “Footbridge at
Phoenix Station”.

The project “Improving access at Trianon Station” was still at the design stage.

No bidder responded to the tender launched on 14 October 2022 for the project
“Footbridge at Phoenix Station”. The request to review the bidding documents after
unsuccessful bid was submitted to the TMRSU with some six months’ delay by the
Procurement Unit.

Compulsory land acquisition procedures were still underway for the project
“Improving Access at Trianon Station”.

Root Cause

Lack of adequate planning by the TMRSU for these projects.

Recommendation

There should be proper planning for implementation of these projects by the Director of
TMRSU and proper monitoring by the Accounting Officer.

Ministry’s Response

For the project at Trianon, land acquisition procedures are still ongoing. The project
could not be implemented on time due to bottlenecks encountered in the land
acquisition procedures for 18 plots of land. The Ministry of Housing and Land Use
Planning has been requested to fast track the acquisition of these plots.

The scope of the project at Phoenix was reviewed and it was proposed that the
footbridge be constructed with three branches to link the three sides of the interchange.

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MINISTRY OF LAND TRANSPORT AND LIGHT RAIL,
AND FOREIGN AFFAIRS, REGIONAL INTEGRATION AND INTERNATIONAL TRADE
8.1.2 Cashless Ticketing System Project

Operation of the existing Free Travel Scheme

Bus operators and Metro Express Ltd operating in the Public Transport sector are
compensated monthly at a fixed rate by the National Land Transport Authority (NLTA) for
the conveyance of passengers who are entitled to travel for free.

Annual Cost to Government

NLTA effected monthly payments, under the Free Travel Scheme, ranging from
Rs 27,500 to Rs 55,000 per bus to bus companies and individual bus operators, and
Rs 229,500 per Light Rail Vehicle to Metro Express Ltd. For financial years 2018-19 to
2022-23, a total amount of Rs 6.3 billion was disbursed as shown in Table 8-4.

Table 8-4 Expenditure on Operation of Free Travel Scheme

Financial Year Actual Expenditure


Rs million
2018-19 1,243.7
2019-20 1,237.1
2020-21 1,261.4
2021-22 1,255.6
2022-23 1,253.1
Total 6,250.9
Source: Annual Financial Statements of the Treasury

Review of Free Travel Scheme and proposal for Cashless Ticketing System

On 17 August 2016, the Ministry appointed a Consultant to conduct a study to reengineer


the Public Transport in Mauritius. In financial year 2016-17, an amount of Rs 12.8 million
was paid to the Consultant for some tasks which included, inter alia, the review of the Free
Travel Scheme. The Consultant submitted its report in May 2017 and pointed out the
following issues:

(i) The free travel subsidy calculation did not give an accurate picture of subsidy usage
and might not always be equitable in distribution as the number of students and old age
persons vary by route and location.

(ii) Schools and colleges were distributed disproportionately across regions affecting the
number of students transported by bus operators.

(iii) There is a need for a methodology which increases fairness and direct targeting of
subsidy.

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MINISTRY OF LAND TRANSPORT AND LIGHT RAIL,
AND FOREIGN AFFAIRS, REGIONAL INTEGRATION AND INTERNATIONAL TRADE
The Consultant recommended that an integrated Cashless Ticketing System (CTS) with
smart cards for metro and buses be developed in order to enhance the administration of
Government subsidies under the Free Travel Scheme with the result that payment would
reflect the actual number of passengers travelling.

The objectives of the CTS are:

(i) To modernise the fare collection mechanism.

(ii) To help the Regulator to capture live data.

(iii) To enhance the administration of subsidies paid to bus operators.

(iv) To enable generation of statistics on ridership patterns so as to improve transport


planning.

Actions Initiated

The CTS Project is under consideration by the Ministry since year 2018. On 9 August 2021,
the Ministry has set up a Technical Committee (TC) to carry out an optioneering exercise
to fully grasp the intricacies of the project and explore the different components associated
thereto.

In a report dated 7 September 2021 the TC proposed:

(i) a Government-to-Government (G-to-G) agreement whereby the component of


assistance has to be agreed for a Transaction Advisor services or for rolling out the
project or both, as well as identifying the country to be approached; and

(ii) a ‘Design, Build, Operate and Maintain’ approach so that the onus to ensure that the
system was and remained operational rest with the private proponent.

Research was also carried out by the Transport Policy Unit (TPU) of the Ministry. In its
report dated 15 September 2021, TPU recommended that a G-to-G agreement might be
considered to hire the services of an expert to develop the project and to propose the best
specifications and procurement model. Thereafter, the best way forward to implement the
project may be decided.

In October 2021, the Ministry decided that the recruitment of a Transaction Advisor would
be more appropriate under the G-to-G agreement in order to assist in the implementation
of CTS project.

With regard to the complexity of the project, virtual consultations were carried out by the
Ministry with regulatory bodies and land transport experts of three foreign countries in year
2022. On 24 May 2022, the Ministry proposed to initiate actions for the implementation
of the CTS under a Public Private Partnership framework.

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MINISTRY OF LAND TRANSPORT AND LIGHT RAIL,
AND FOREIGN AFFAIRS, REGIONAL INTEGRATION AND INTERNATIONAL TRADE
Findings

There was considerable delay in reviewing payment methodology for Free Travel
Scheme as proposed by a Consultant in May 2017, that is more than six years now. No
further development was noted since May 2022.

The budget estimates for financial years 2020-21, 2021-22 and 2022-23 provided
Rs 24 million, Rs 24 million and Rs 20 million, respectively, for the acquisition of IT
equipment for CTS. However, no disbursement was made in these financial years.

According to the Budget for financial year 2022-23, the Key Performance Indicator of
the Ministry was to implement the Cashless Ticketing System Project by April 2023.
The Ministry proposed to initiate the project under a G-to-G agreement whereby the
services of Consultant/Transaction Advisor would be enlisted. However, a
Transaction Advisor had still not been recruited.

Root Causes

The CTS was considered as a complex project.

The Ministry does not have the relevant expertise in connection with the introduction
of CTS.

Recommendation

Appropriate actions should be taken to expedite the process for the implementation of CTS.

Ministry’s Response

Actions were initiated to kickstart the CTS. However, in view of the complexity linked to
the project, an optioneering exercise had to be undertaken at the level of the Ministry to
assess the various implications of the proposed implementation pathways. The Ministry is
awaiting a policy decision on the matter as well as the requested approval prior to relevant
actions being initiated to execute the Project.

8.1.3 Governance Issues – Non-compliance with Legislation

Provisions have been made in various legislations to impose a statutory responsibility on


Accounting Officers and Boards of Statutory Bodies with the objective of strengthening
accountability and transparency in the public sector.

Findings

Non-Submission of Report on Performance

As of 18 December 2023, the Report on Performance of the Ministry of Land Transport


and Light Rail for the financial year 2022-23 had not yet been submitted to the Ministry of
Finance, Economic Planning and Development, despite the statutory deadline being
31 October 2023.

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MINISTRY OF LAND TRANSPORT AND LIGHT RAIL,
AND FOREIGN AFFAIRS, REGIONAL INTEGRATION AND INTERNATIONAL TRADE
Non-Submission of Financial Statements for Audit

The Statutory Bodies (Accounts and Audit) Act requires the Chief Executive Officer of a
Statutory Body to submit the Annual Report to the auditor not later than four months after
the end of every financial year.

As of 14 December 2023, Statutory Bodies falling under the purview of the Ministry of
Land Transport and Light Rail had not submitted their Financial Statements to the National
Audit Office (NAO) for periods as shown in Table 8-5.

Table 8-5 Financial Statements not submitted to NAO for Audit

Statutory Body Financial Year/ No. of


Period Financial
Statements
National Transport 1 January 2016 to 1
Corporation 30 June 2017
2017-18 to 2022-23 6
Taxi Operators Welfare 2022-23 1
Fund

Source: NAO Records

NAO is of the view that the Ministry should exercise control over Statutory Bodies
operating under its aegis to ensure that they fulfil their statutory responsibilities regarding
the preparation of financial statements, their submission for audit and tabling before the
National Assembly.

Ministry’s Response

The Ministry is closely monitoring the finalisation of the relevant accounts and financial
statements, with the above organisations, in order to ensure statutory compliance.

8.1.4 Follow-up of Matters Raised in the Audit Report 2021-22

A follow up of matters raised in the Audit Report for the financial year 2021-22 was carried
out. The Ministry of Land Transport and Light Rail was requested to inform the National
Audit Office of the actions that have been taken to address the findings and
recommendations in the Report. The information along with evidence collected through
review of files and documents were assessed and discussed with the Ministry.

The status on actions taken on findings since the publication of the Audit Report are
summarised below. Out of three findings, two (67 per cent) have been resolved and one
(33 per cent) has not been resolved.

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MINISTRY OF LAND TRANSPORT AND LIGHT RAIL,
AND FOREIGN AFFAIRS, REGIONAL INTEGRATION AND INTERNATIONAL TRADE
SN Findings Ministry’s Response – NAO
Status as of February Comments
2024
Road Crash Data Management System (RCDMS) – Not Optimally Utilised due to
Incomplete Data (Page 107)
1 The implementation of the project was The RCDMS is presently
delayed due to issues with the iMAAP being utilised to produce
mobile application since October 2020. reports and analysis. All
Crash data recorded on the tablets could not backlogs of unreported data
be uploaded to the server at the Government have been cleared with the Resolved
Online Centre due to the fact that the current Police and the crash data
version of iMAAP was no longer supported have been input in the
on the tablets. system.
(Pg 107, Para 8.1.1)
2 Incomplete Data uploaded on the system and Follow up is being done
discrepancies of 1,581 noted between the with the Police for road
number of injury crashes cases reported and crash data and same will be
files submitted for input in the period 2018 validated for year 2023. Resolved
to 2020.
(Pg 108, Para 8.1.1)
Photographic Speed Cameras-Procurement Issues (Page 109)
3 Procurement exercise for the Acquisition of The services of an
Additional Cameras awarded to another International Consultancy
contractor in April 2021 for Rs 11.3 million Firm will be sought
was cancelled as the Contractor who initially regarding the most
supplied the cameras and the software in appropriate technology for
2012, informed the Ministry in April 2021 Mauritius and new speed
that it held Intellectual Property Rights over violations detection system
Not
the existing system. The Attorney-General’s procured to enhance road
Resolved
Office opined that the Ministry to negotiate safety. An international
with the Contractor regarding Intellectual Bidding Exercise for the
Property Rights. Then a policy decision recruitment of a consultant
should be taken in case of unsuccessful was launched in August
negotiations with the Contractor to ensure 2023.
that contracts are not awarded to the same
supplier.
(Pg 109, Para 8.1.2)

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MINISTRY OF LAND TRANSPORT AND LIGHT RAIL,
AND FOREIGN AFFAIRS, REGIONAL INTEGRATION AND INTERNATIONAL TRADE
8.2 NATIONAL LAND TRANSPORT AUTHORITY
8.2.1 Motor Vehicle Licence Online Payment System Phase I and II

Phase I

A computerised Registration and Licensing System (RLS) is maintained at the National


Land Transport Authority (NLTA) whereby a record is kept for each vehicle registered in
Mauritius to show registration particulars and details of payments for each renewal of
Motor Vehicle Licence (MVL).

In view to improve customer service, in the year 2018, NLTA awarded a contract for
Rs 5.8 million for the implementation of Phase I of the MVL Online Payment System to
enable private vehicle owners to renew and pay their MVL online.

Phase I was expected to be integrated with RLS and be operational as from November 2018
for the renewal of MVL of private vehicles only. Phase I was completed in May 2019. It
was expected that some 1,000 vehicle owners would pay their MVL online daily.

Phase II

Subsequently NLTA embarked on Phase II of the project in May 2021 with the objective
to provide online facilities also to vehicle owners who have to pay their Public Service
Vehicle Licence and MVL. In August 2022, NLTA approved an amount of Rs 932,578 for
the implementation by the same Contractor of Phase II, an enhancement of the Phase I.

In September 2022, an amount of Rs 466,289 was paid for Phase II and the remaining
50 per cent was to be disbursed to the Contractor upon completion of User Acceptance
Testing.

Phase II was expected to be completed by December 2022. In January 2023, NLTA


approved a revised implementation plan and the completion date was rescheduled for
March 2023. The project has not yet been completed as of 11 December 2023.

Project Objectives

The main objectives of the online payment system were to:

(i) Avoid the long queues and crowds at NLTA’s counters and Post Office counters.

(ii) Improve productivity and service delivery.

(iii) Enhance control on revenue collection and decrease risks of fake documents.

(iv) Provide real time management information for better decision making.

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MINISTRY OF LAND TRANSPORT AND LIGHT RAIL,
AND FOREIGN AFFAIRS, REGIONAL INTEGRATION AND INTERNATIONAL TRADE
Findings

Only some 4,000 online payments were effected from May 2019 to June 2022. This
was due to the fact that online payments could be effected through credit cards only.

In April 2023 the online payment facility was enhanced through the Instant Payment
System (IPS) that allowed additional online payment facilities, such as mobile
payment, internet banking and QR codes. Since then, only a monthly average of 240
MVL online payments have been effected, that is an average of eight online payments
daily compared with the expected 1,000 online payments daily.

Some 450,000 vehicle owners, that is 80 per cent, were paying their MVL at Post
Offices. These payments were not being updated in RLS. Those who had renewed their
last MVL at Post Offices and were willing to renew their current MVL online were
encountering many difficulties in the absence of the necessary update in RLS.

No User Acceptance Testing Certificate for MVL Online System Phase I was
available.

There has been automation of the existing manual payment system without rethinking
improvement in the system.

As of October 2023, Phase II was not yet finalised, that is a delay of more than
10 months.

Root Causes

The Accounting Officer did not re-engineer the business process before embarking on
the online payment system.

Renewal of MVL done at Post Offices (about 80 per cent) could not be updated in RLS
of NLTA due to the absence of an interface between the system of Mauritius Post Ltd
(MPL) and NLTA. This update is required to effect online payment.

Recommendations

There is need to expedite the interfacing of the MPL system relating to MVL paid for
at Post Offices with RLS system at NLTA.

Incentives should be given to encourage vehicle owners to use the online MVL
payment system.

NLTA’s Response

MPL is currently implementing a system which will link the Post Office system with
the NLTA RLS system.

With the coming of the IPS system, the supplier has also embarked in the integration
of the new payment system.

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MINISTRY OF LAND TRANSPORT AND LIGHT RAIL,
AND FOREIGN AFFAIRS, REGIONAL INTEGRATION AND INTERNATIONAL TRADE
The testing activity for MVL online Phase II is ongoing and same is expected to be
completed soon.

The MVL Online System Phase II has been set live on a soft launch basis.

A mass sensitization campaign would be carried out shortly to create awareness


amongst vehicle owners on how to use the system effectively and benefit from the
advantages it provides.

8.2.2 Revenue Management- Motor Vehicle Licence

The Registration and Licensing System (RLS) at NLTA is a computerised database for
recording all vehicles registered in Mauritius and Rodrigues. RLS holds an account for each
vehicle and is meant to show the amount of Motor Vehicle Licence (MVL) fee payable and
paid each year. According to NLTA, there was a total of 661,553 vehicles registered with
NLTA as at 30 June 2023.

MVL payments by vehicle owners are made either at NLTA Head Office and its four
sub-offices, or online, or at the Mauritius Post Limited (MPL) and at District Cash Offices
(DCO).

Payments for the renewal of MVL effected by vehicle owners at NLTA Head Office and
sub-offices are updated real-time in RLS, whereas payments effected at MPL and DCO are
not updated in the RLS.

For the financial year ended 30 June 2023, the budgeted and actual revenue for MVL were
Rs 2,097 million and Rs 1,806.6 million, respectively.

I. Inadequate Control over MVL Revenue by NLTA

Receipts for MVL revenue collection at NLTA Head Office and sub-offices were generated
from the RLS computerised system. During the financial year 2022-23, revenue collected
for MVL at NLTA Offices totalled some Rs 396.8 million, that is 20 per cent of total
revenue for MVL of Rs 1,806.6 million as per Treasury Accounting System (TAS).

The main stock of new MVL booklets and their issues to cashiers were monitored by the
Chief Cashier posted at NLTA Head Office.

Findings

A list of all registered vehicles was not made available to officers of the National Audit
Office (NAO). NAO could not, therefore, ensure the accuracy and completeness of all
revenue receivable and received for MVL.

A daily Cash Book Summary Report of all collections at the Head Office and
sub-offices was not available.

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MINISTRY OF LAND TRANSPORT AND LIGHT RAIL,
AND FOREIGN AFFAIRS, REGIONAL INTEGRATION AND INTERNATIONAL TRADE
The stock book of MVL booklets was not updated whenever booklets were returned
by the cashiers at the Head Office.

NLTA sub-offices did not return the unused MVL booklets to NLTA Head Office.

The IT Section could not run a script to extract a huge volume of transactions due to
the old structure of the entire system.

Root Cause

Information on all registered vehicles could not be made available due to the old structure
of the IT system.

Recommendations

A Cash Book Summary Report of all collections at NLTA Offices and a complete list
of all transactions should be generated daily by the Finance section.

Monthly returns of cash collected should be certified correct by officers of NLTA


sub-offices.

The IT System should be upgraded.

NLTA Response

The Daily Cash Book report generated by each cashier and its consolidated version
which would include all collections at Head Office and sub-offices has been discussed
with State Informatics Ltd. The software provider has been requested to do needful so
that all information pertaining to revenue collected by NLTA is available in the report
and for ease of internal and external examination as required.

With proper manning of the section, the verification exercise may be conducted
effectively and efficiently. Requests for additional AFOs have already been made.

II Lapses in Monitoring of MVL Revenue Collection by Post Offices

During the financial year 2022-23, revenue collected for MVL by MPL Post Offices
(Mauritius and Rodrigues) totalled Rs 1,409.8 million, which represented 78 per cent of the
total revenue for MVL of Rs 1,806.6 million as per TAS.

New MVL booklets were despatched in bulk by NLTA Head Office to MPL. Used and
unused MVL booklets after their expiry date were returned to NLTA. The total amount
collected each day by MPL was subsequently credited to the bank account of the Treasury.

Findings

Payments of MVL effected at Post Offices during the financial year 2022-23 were not
updated in RLS by NLTA.

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MINISTRY OF LAND TRANSPORT AND LIGHT RAIL,
AND FOREIGN AFFAIRS, REGIONAL INTEGRATION AND INTERNATIONAL TRADE
Used and unused MVL booklets returned by MPL to NLTA were not verified against
the stock book.

Independent verification was not carried out on MVL issued by MPL to ascertain
whether the right fee had been charged with respect to engine ratings and class of
vehicles.

Post Offices, as collecting agents, were not connected to the RLS of NLTA, so
payments of MVL were not reflected therein.

Root Cause

There was a delay to implement interfacing the MPL system with RLS.

Recommendations

MVL booklets returned by MPL after the expiry of their validity period should be
verified with the used copies of MVL.

NLTA should implement interfacing of the RLS with MPL system so that payments
of MVL at Post Offices are updated in the RLS.

NLTA’s Response

MPL is implementing a system which will link the Post Office system with RLS.

8.2.3 Lapses on Management of Levy on Fees for Examination of Vehicles

As from November 2016, examination of vehicles for the purpose of issuing fitness
certificates is being carried out at three different Vehicle Examination Stations (VES)
located at Forest Side, Plaine Lauzun and Laventure by three private operators. As from
financial year 2020-21, the Operators were requested to pay NLTA a levy of 10 per cent of
their total revenue collected for each month for the examination of vehicles.

(a) Agreement with the Operators of VES not yet signed

In June 2016, a Letter of Comfort was issued to the Operators to enable the latter to operate
the VES.

Finding

Seven years have elapsed since the issue of the Letter of Comfort and still no agreement
has been signed between NLTA and each of the Operators of the VES.

Root Cause

There was no proper follow up by the Accounting Officer on the draft agreement already
sent to the Attorney-General’s Office since long.

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Recommendation

A formal agreement should be finalised with each of the private Operators of VES.

NLTA’s Response

The Agreement to be signed with the Vehicle Examination Stations is being looked into at
the level of the Ministry, including the follow-up with the Attorney-General’s Office.

(b) Inadequate Monitoring of Revenue by NLTA

Since the financial year 2020-21, a 10 per cent levy was payable to NLTA by the Operators
of VES. In July 2021, the NLTA requested the Operators to submit returns on total revenue
collected for each month.

Findings

During the financial year 2022-23, a total amount of Rs 14.7 million was received from
the three Operators against a budgeted revenue of Rs 26 million, that is, a shortfall of
Rs 11.3 million.

No monthly return of revenue collected by the Operators were submitted to NLTA.

Root Cause

There was no proper monitoring by NLTA on levy payable by the Operators.

Recommendation

The monthly return prepared by VES should be verified by NLTA Vehicle Examiners
posted at each VES.

8.2.4 Enhancement of NLTA Services

The digitalisation of NLTA is a priority of the Ministry of Land Transport and Light Rail
in its endeavor to ensure timely and quality customer services and promote easy access to
and usage of its e-services.

The main roles and functions of NLTA include, amongst others:

Acting as a One-Stop-Shop for matters relating to vehicle registration and licensing.

Computerisation of records relating to motor vehicles in order to provide more


comprehensive and expeditious services to customers and for better coordination
within the department as well as with other institutions.

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Services Provided by NLTA

NLTA provides the following essential services to owners of some 700,000 registered
vehicles:

Registration and transfer of ownership of motor vehicles.

Collection of road tax and other licence fees.

Licensing of public service vehicles, goods vehicles, petrol service station and of bus
conductors.

Enforcement of parking and road transport legislations and monitoring the level of
service of public transport.

Controlling and monitoring the examination of motor vehicles.

Issue of Student Identity Card and Free Travel Bus Pass for disabled persons.

Planning of new transport services.

Compensation for the free travel scheme.

Payment of subsidy on diesel.

Record of statistics relating to motor vehicles.

There are several stakeholders, such as the Registrar-General’s Department, Treasury,


Financial Intelligence Unit (FIU), Mauritius Revenue Authority (MRA), Police Service,
Traffic Management and Road Safety Unit (TMRSU), Motor Vehicle Fitness Centres,
Insurance Companies etc. that are users of the Motor Vehicles Database. They are involved,
among others, in taxation, registration, annual licensing, fines management, insurance,
accident matters and search purposes.

Findings

During the period of Audit that is from August 2023 to October 2023 it was observed
by Officers of NAO that there were long queues at the different counters at the NLTA
Head Office.

There was a high demand for services at the NLTA Head Office in respect of Motor
Vehicle Licences (MVL). For instance, daily transactions at the Counter of NLTA
Head Office was an average of 800.

Collections in respect of MVL by the Mauritius Posts Ltd (MPL) totalled some
Rs 1.4 billion.

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Root Causes

Outdated IT systems which cannot be used effectively to deliver the required services
of NLTA.

Deficiency in human resources planning and management.

The Registration and Licensing System (RLS) database was not complete as
collections received for MVL at the MPL, were not updated in the system and these
accounted for some 80 per cent of total collections.

Interface between the IT systems of NLTA and MPL, necessary to update the RLS
database, was not in place.

Recommendations

The Accounting Officer should give due consideration to the re-engineering of the different
services of NLTA in the following ways:

(a) One-Stop-Shop Database for Motor Vehicles

There is a need for a One-Stop-Shop computerised system for a Central Motor Vehicles
database in Mauritius.

Different applications can reside in the system and each user can have access to the
relevant services in the system.

Registration of vehicles can be digitalised along with the e-Horse Power.

Ministry’s and NLTA’s Response

Following the implementation of the above decentralisation, the situation regarding


queuing at NLTA has improved. The posting of additional staff to NLTA has further
enhanced the delivery of services to the satisfaction of both management and the
public.

The different functionalities relating to the registration and transfer of vehicles as well
as applications for licences would be handled through an e-platform with counter
validation/verification as required.

The need for a properly set up IT Unit at NLTA needs to be included as priority in the
next budgetary exercise.

The delivery of services at NLTA counters has been reviewed with a view to reduce
the influx of public at NLTA Head Office and decentralise the services at sub-offices.
As such, requests for the issue of "Certificat de Gage" and transfer of ownership are
no longer entertained at the Head Office. The NLTA sub-office at the Emmanuel
Anquitil Building only performs the two aforementioned transactions. The sub-offices
at Forest Side and Flacq entertain requests for all NLTA counter services.
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Payment for MVL online has been further eased with the shift to the SBM Gateway
which caters for further modes of payment.

The phase II of the project which caters for the payment in respect of vehicles
operating under a licence has gone live since the end of January 2024. A sensitisation
campaign is to be carried out to encourage the shift to renewal of MVL online.

The first registration of motor vehicles online has been launched on a pilot basis. Four
motor vehicle dealers have signed an Memorandum of Understanding with NLTA and
are presently registering vehicles and issuing registration books to their clients. The
transaction is performed with counter verification/validation by NLTA officers.

The Current Registration and Licensing System of Motor Vehicles

NLTA owns and operates a computerised system, known as the Registration and Licensing
System (RLS) for providing services relating to the registration of vehicles, transfer of
vehicle ownership, issue and renewal of vehicle licences, reservation of vehicle registration
marks, and change of particulars of drivers and vehicle owners.

Findings

(a) The Computerised Registration and Licencing System of NLTA is outdated

RLS is being accessed by some 80 users which include the NLTA counters and its three
sub offices, Rodrigues Administration and other institutions connected to the system via
InfoHighway for data sharing.

RLS was running on Oracle RDBMS 8.1.7 using Windows 7 as operating system.
Windows 7 was no longer supported since 14 January 2020, which led to the current system
to be unstable and hence affected its performance. Management responded that the current
version of Oracle RDBMS 8.1.7 was obsolete with limited functionalities. The RLS was
being revamped in collaboration with the Central Informatics Bureau (CIB).

(b) Information not made Available to NAO

Data from the RLS database of NLTA for the financial year 2022-23, comprising fields for
Motor Vehicles details, Amount Receivable, Date MVL Paid, Amount Paid during the year,
Amount Due, Period for which MVL paid and Receipt Number were not available.

NLTA’s Response

Given that there are around 700,000 records in the database, we are having difficulties
to extract the huge number of data.

We have tried to run a script to extract the information, yet same was not successful
either connection was lost or the entire system gets slow.

Since NLTA system is public-facing and has a huge number of visitors on daily basis,
it is very important that the system is always up and running.
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Moreover, the entire system (hardware/software) is a very old architecture and we are
not able to run a script to extract a huge volume of transactions.

Even if we launch same during the night, the entire process will halt around 01:00 a.m
early morning to start the automatic backup process.

Currently, we are having a huge connectivity issue in the GINS network and the system
is very slow in the different NLTA Offices.

Deficiencies in IT Governance at NLTA

IT Governance is an element of Corporate Governance which aims at improving the overall


management of IT and deriving improved value from investment in information and
technology in an organisation.

IT Governance should form an integral part of NLTA. IT Governance generally comprises


an IT Strategy Committee, an IT Strategic Plan and an IT Investment Plan aligned with
NLTA’s core objectives. There should be proper organisational structures and processes
with clearly defined roles, responsibilities and ownership for effective IT management.

Findings

There was no proper IT Strategy Committee to ensure alignment of IT with NLTA’s


objectives.

NLTA had no formal IT Strategic Plan, Budget and Performance Indicators.

There was neither a System Administrator nor an IT Manager to manage the


IT systems. Staff of the Central Information System Division (CISD), posted at NLTA,
gave ICT support services and CIB Officers assigned to NLTA as part-time
Programme Managers.

Between July 2017 and June 2023, the IT expenditure budget amounted to
Rs 288.4 million, but only Rs 46.2 million were spent, that is some 16 per cent, which
is on the low side.

In the financial year 2017-18, the project value for the Computerisation of NLTA
amounted to Rs 415 million, but in December 2023, the tender documents were still
under preparation and only Rs 2.7 million were spent on the project.

Some Rs 12.3 million were spent on the Passenger Information System, but the
objective of the project has not yet been attained in December 2023.

The Cashless Ticketing System project has still not been implemented though funds
have been appropriated since the financial year 2018-19.

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As of 30 June 2023, some Rs 0.7 million were spent on Phase 2 of the Motor Vehicle
Licence (MVL) Online but the project has still not been implemented. For Phase 1,
some Rs 5.2 million were expensed in 2018-19 and some 6,300 applications were
received as of 30 June 2023.

Root Causes

Weak IT governance, as evidenced by IT projects not being implemented in an


effective manner, though funds were available.

Absence of IT Strategic and IT Operational Plans and Monitoring and Evaluation and
Reporting System.

Absence of a properly manned IT Department.

Recommendations

There is a need to enhance IT governance at NLTA.

NLTA needs to appropriately staff its IT Unit in order to manage some 700,000
registered vehicles.

An IT Strategic Plan and an IT Operation Plan with the appropriate IT Budgets,


combined with necessary Key Performance Indicators and Risk Management
Framework should be prepared, implemented, monitored and evaluated.

A Monitoring, Evaluation and Reporting System should be put in place.

NLTA’s Response

NLTA has, with the collaboration of the Ministry of Land Transport and Light Rail,
already embarked on a project aiming at the modernisation of its services.

The new digitalised system and the motor vehicle database would be hosted at the
level of the Government online Centre.

8.2.5 Follow-up of Matters Raised in the Audit Report 2021-22

A follow up of matters raised in the Audit Report for the financial year 2021-22 was carried
out. The National Land Transport Authority (NLTA) was requested to inform the National
Audit Office of the actions that have been taken to address the findings and
recommendations in the Report. The information along with evidence collected through
review of files and documents were assessed and discussed with NLTA.

The status on actions taken on findings since the publication of the Audit Report are
summarised below. Out of 10 findings, two (20 per cent) has been partially resolved and
eight (80 per cent) have not been resolved.

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SN Findings NLTA’s Response – NAO
Status as of February 2024 Comments

Lapses in Operation of Free Travel Scheme (FTS) (Page 113)


1 The direct disbursement to bus The need to rethink the
operators, as an interim measure, was methodology for the computation
still not reviewed 17 years after the and payment of free travel
implementation of the FTS. compensation is not disputed but
(Pg 113, Para 8.2.1) any proposed solution would
need to ensure that a right balance Not
is reached between the Resolved
effectiveness of the Scheme,
financial implications to
Government and service provided
to commuters. This would be a
policy decision emanating from
Government and to be taken up at
the level of the Ministry.
2 Continued payment of compensation Payment for non-school days has
was effected to bus operators for non- been effected by NLTA only
school days despite legal advice during unexpected events, such
obtained since March 2019 to deduct as, heavy rainfall, flooding, etc.
payment for such days. Additionally, these non-school
(Pg 113, Para 8.2.1) days and bus operators have
adjusted their services
accordingly.
However, there is no provision Not
pertaining to ‘force majeure’ in Resolved
the Memorandum of
Understanding (MOU) signed
between the Government and the
bus operators, as such same
would be included and defined in
the MOU. Government approval
would be required in respect of
any adjustments to be made in
case of ‘force majeure’.
3 Compensation to Metro Express Ltd A draft MOU setting out the
(MEL) was disbursed in the absence terms and conditions governing
of an MOU and payments were the payment of the free travel
effected to both bus and light rail compensation to MEL has Not
operators for the same routes. already been prepared and is at Resolved
(Pg 113, Para 8.2.1) the level of NLTA and MEL for
views and comments.
Subsequently, same will be sent
to Attorney-General’s Office
(AGO) for vetting and then for
approval by Government.

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SN Findings NLTA’s Response – NAO
Status as of February 2024 Comments

Bus Companies Recovery Account - Agreement with Bus Operators not reviewed
since 2005 (Page 113)
4 The agreements with the bus The amended draft Agreement
companies and the individual bus has been vetted by AGO on 6
operators dated July 2004 and September 2023 and the views of
Not
October 2005, respectively, were not the Ministry of Finance,
Resolved
reviewed despite changes in Economic Planning and
objectives of the Bus Companies Development are being awaited,
Recovery Account. following which the Agreement
(Pg 113, Para 8.2.1) would be finalised and signed.

Motor Vehicle Licence Online Payment System- Objectives not Achieved (Page 118)
5 Usage was low for online renewal of Following meetings held at the
Motor Vehicle Licence (MVL). Ministry of Land Transport and
Around 4,000 online payments only Light Rail, a sensitization
were effected from May 2019 to 30 campaign will be carried out to
June 2022, as opposed to the daily encourage the shift to MVL
target of 1,000. Online. In this respect, the Terms
(Pg 118, Para 8.2.2) of Reference for the campaign are
presently being worked out. A
cut-off date for the shift to online
renewal will be implemented
whereby all private vehicle Not
owners will be required to renew Resolved
their MVLs only through the
online platform.
As regards the payment gateway,
the migration to Instant Payment
System gateway which enables
the payment through different
modes, credit / debit cards, Juice,
Maucas, etc. has been
successfully implemented.

6 As of October 2022, 115 Handheld Tablets are being issued to NLTA


devices worth Rs 2 million, to be staff. To note that the Police Dept
provided to Enforcement Officers for did not take the tablets earmarked Not
monitoring purposes, have remained for Police Officers as they were to Resolved
dormant since their acquisition in be provided with similar
November 2018. equipment under the Safe City
(Pg 118, Para 8.2.2) Project.

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SN Findings NLTA’s Response – NAO
Status as of February 2024 Comments
7 Phase II of the online renewal of MVL, The MVL Online Phase II has
meant for other categories of vehicles, has been soft launched. Partially
not yet been implemented. It was to be Resolved
implemented within six months of Phase I.
(Pg 118, Para 8.2.2)
Motor Vehicles Registration and Licence System (RLS) - Operating System not
supported (Page 121)
8 Weakness of Operating System due to non- The RLS is running on an old
compatibility with updated version of version of Oracle. Alternative
Windows: measures are being applied as
Users were not logged off possible through the Operating
automatically after a period of System on PCs.
Not
inactivity. The shortcomings identified Resolved
An access log was not available. It was will be taken on board in the
thus not possible to determine who Upgrading of the RLS
accessed the system. presently being worked out.
Some officers had both transaction and
approval accesses.
(Pg 121, Para 8.2.3)
Passenger Information System - Objectives not attained (Page 121)
9 Passenger Information System developed The deactivation of the
at a cost of some Rs 25 million, was Passenger Information System
commissioned in September 2019 to was decided at the level of the
provide real-time passenger information Ministry as the maintenance
about the arrival and waiting time of buses part of the project was rejected
under specific bus shelters via applications by the Ministry.
on mobiles and on the web: Not
A Fleet Management System
Resolved
The system has never provided was being implemented.
accurate time of arrival of buses since Request For Proposal for
its commissioning. Consultancy Services for the
The system was deactivated in March provision of Transaction
2021 by the Contractor as there was no Advisory Services for the Fleet
maintenance contract. Management System has been
launched on 10 August 2023.
No MOU was signed with the bus
companies to define the
responsibilities concerning IT
equipment provided to them and
Global Positioning System installed on
buses.
(Pg 121, Para 8.2.4)
Rodrigues Office - Inadequate Control on Revenue Collection (Page 123)
10 Used and unused MVL Booklets, Returns Returns on revenue collected
on collections and Remittance vouchers are submitted to the Finance Partially
not submitted to NLTA. Section of NLTA Head Office. Resolved
(Pg 123, Para 8.2.5) The Finance Section of NLTA
will follow up for compliance
of remittance procedures.

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8.3 FOREIGN AFFAIRS, REGIONAL INTEGRATION AND INTERNATIONAL
TRADE

8.3.1 Human Resource Management – Inadequate Controls and Non-compliance


with Procedures

A review of the records of the Ministry of Foreign Affairs, Regional Integration and
International Trade relating to accommodation, rent and utilities, salaries and wages of a
sample of 15 Missions revealed shortcomings such as non-compliance with established
procedures and instructions, and inadequate controls over the employment of local recruits.
In some cases, these have led to expenses which could have been avoided, as detailed
hereunder.

Findings

Rent of House of High Value for High Commissioner after Stay of Eleven Months in
Hotel

The High Commissioner (HC) assumed duty at Mission Maputo on 14 June 2022 and
stayed in a hotel up to end of May 2023, that is, some 11 months. He moved out when he
was satisfied with the residence allocated to him. It should be pointed out that:

Mission had launched quotations for a fully furnished house, and the offers from bidders
ranged from US$ 3,480 to US$ 5,000. The HC expressed his dissatisfaction with these
offers due to safety issues despite the Head of Chancery informing that the offers
included accommodations in regions previously occupied by former HCs.

On 23 March 2023, a three-year lease agreement for a fully furnished property at a


monthly rental fee of US$ 7,000 was signed for the period starting 1 June 2023.
Hotel invoices totalling some Rs 2.5 million were refunded to the HC for the period
July 2022 to May 2023. However, there was no breakdown of expenses incurred.
Therefore, NAO could not ascertain whether expenses such as food, laundry and leisure
activities were excluded.

The financial implications for renting a house of high value, that is, US$ 7,000 monthly
instead of US$ 5000 received in the quoted bill, an additional monthly amount of
US$ 2000, will have to be paid, resulting in a total amount of US$ 72,000 (some Rs 3.2
million) for a period of three years.

Root Cause

Ceilings for rent and utilities have not been set for Ambassadors and High Commissioners,
unlike other home-based staff posted in Missions for whom ceilings are recommended by
the PRB.

Recommendations

The Accounting Officer should ensure that:


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AND FOREIGN AFFAIRS, REGIONAL INTEGRATION AND INTERNATIONAL TRADE
Market research are carried out on rates of accommodation in countries of posting of
staff.

For good governance and fairness, ceilings considerations be given to set for rent and
utilities for Ambassadors and High Commissioners.

Ministry’s Response

As regards the accommodations within the market rate submitted by the then Head of
Chancery, they were found not safe and secured. Given that it was the responsibility of the
Ministry to ensure the safety and security of the High Commissioner during his posting,
Mission was, therefore, requested to proceed urgently and finalise the accommodation
arrangements for the High Commissioner and the latter be informed accordingly.

Lack of Transparency over Posting of Diplomats

A plan was not prepared in terms of the staff requirements for each Mission overseas. Lack
of transparency and inconsistency were thus noted in the following cases:

Diplomats posted in Missions for more than Four Years – The First Secretaries
assumed duty at Missions Geneva and Pretoria on 31 July 2018 and 18 February 2019,
respectively. Contrary to the recommendation at Paragraph 16.19.74 of PRB Report
2021, that is, a tour of service for diplomatic staff should not exceed four years, the
First Secretary at Geneva was in post for almost five years as of end of August 2023,
and the one at Pretoria was still in post after more than 4.5 years, as of October 2023.

No regular Rotation for Hard Posting – Contrary to Paragraph 16.19.78 of PRB Report
2021, which recommends that ‘the Ministry should implement a system of regular
rotation of home-based staff in our different missions for parity of treatment’, there
was no regular rotation for hard postings. For example, four Minister Counsellors and
six First Secretaries were not assigned hard postings for the last three postings exercise
at Missions overseas.

Period before Posting to other Missions varied – At the end of their respective tours
of service at Missions, four diplomats were posted in other Missions after periods
ranging from 8 months to 20 months. As regards four other diplomats, they were still
in post at the Head Quarters of the Ministry some 3.5 years after their respective tours
of service at Missions overseas.

Root Cause

There is no policy over the posting of diplomats.

Recommendation

The Accounting Officer should devise an appropriate policy for posting and staffing needs
in each Mission.

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Ministry’s Response

Officers are posted based on their acquired competencies and aptitude. However, a rotation
is observed as far as possible and most officers have done a hard posting.

Conversion of Salary not made according to PRB Recommendations

The conversion of salary of diplomats posted in Missions overseas was not made in
accordance with the recommendation at Paragraph 16.19.16 (ii) of PRB Report 2021 as
detailed below:

Contrary to the recommendation at Paragraph 16.19.16 (ii), the Ministry was converting
the salary of some officers in hard currency using an exchange rate (computed by the
Ministry) instead of a fixed rate of exchange as provided in PRB.

The authority for using a rate of exchange other than the one prescribed by PRB was
also not produced to NAO.

The wrong conversion of salary resulted in an overpayment of some Rs 779,000 for the
period November 2021 to June 2023 for the sample that NAO verified.

Root Cause

The Ministry did not comply with PRB recommendations in respect of conversion of salary.

Recommendation

The Accounting Officer should ensure that the conversion of salary for all diplomats posted
in Missions is reviewed and any overpayment be recouped from the officers concerned.

Ministry’s Response

The rate used for conversion of salaries was the prevailing rate at the time of posting.
Accordingly, in order to ensure consistency in processing, the matter has been referred to
the Ministry of Public Service, Administrative and Institutional Reforms for a decision.

Employment and Dismissal of Local Recruits in Missions Overseas – Non-


Compliance with Procedures

During the financial year 2022-23, the Ministry incurred some Rs 148 million for the
employment of some 150 local recruits, that is, local people recruited to serve in the
21 Mauritian Missions Overseas. A scrutiny of the records relating to the employment of
the local recruits revealed the following:

Dismissal of Staff

At four Missions, namely Dubai, Beijing, Brussels and Paris, the dismissal of staff
without formally drawing their attention to the alleged shortcomings was not in line
with the Ministry’s Manual of Procedures.

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MINISTRY OF LAND TRANSPORT AND LIGHT RAIL,
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At Mission Paris, the dismissal of a driver for gross misconduct resulted in a legal
process with the driver claiming some € 52,500 (Rs 2.4 million). The Mission rejected
the claims outright. In June 2020, the driver filed a case against the Republic of
Mauritius with the “Conseil Des Prud’Hommes”. The latter gave its verdict on
11 February 2022 in favour of the driver and ordered the payment of € 24,820 (some
Rs 1.2 million) to him. Mission appealed against the judgment in March 2022, and the
case was still pending as of end of September 2023. It is to be noted that an amount of
€ 1,800 (Rs 84,315) was paid to the lawyer in August 2022.

Employment of Administrative Secretary - The Administrative Secretary (AS), employed


at Mission Moscow, has since October 2017 been working from home, that is, from Latvia,
which is more than 10 hours of travel to Moscow.

It was not known how Mission was monitoring the work performed by the AS. Return of
attendance, brief of work performed, or acknowledgement that work had been effectively
done were not attached to payment vouchers. The more so, records of any leave taken was
not produced to NAO.

Recommendation

The Accounting Officer should ensure that all staff comply with the procedures and policies
of the Ministry.

Ministry’s Response

With respect to Paris case, gross misconduct was reported and action had to be taken
immediately. The court case is still ongoing and a ruling is awaited.

The Ministry had already instructed for the termination of the contract of the said local
recruit working from home. Mission would be instructed anew for the immediate
termination.

8.3.2 Governance Issues – Non-compliance with Legislation

Provisions have been made in various legislations to impose a statutory responsibility on


Accounting Officers with the objective of strengthening accountability and transparency in
the public sector.

Finding

Non-Submission of Report on Performance

As of 5 January 2024, the Report on Performance of the Ministry of Foreign Affairs,


Regional Integration and International Trade for the financial year 2022-23 had not yet
been submitted to the Ministry of Finance, Economic Planning and Development, despite
the statutory deadline being 31 October 2023.

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8.3.3 Follow-up of Matters Raised in the Audit Report 2021-22

A follow up of matters raised in the Audit Report for the financial year 2021-22 was carried
out. The Ministry of Foreign Affairs, Regional Integration and International Trade was
requested to inform the National Audit Office of the actions that have been taken to address
the findings and recommendations in the Report. The information along with evidence
collected through review of files and documents were assessed and discussed with the
Ministry.

The status on actions taken on findings since the publication of the Audit Report are
summarised below. Out of 16 findings, six (37 per cent) have been resolved, three
(19 per cent) have been partially resolved and seven (44 per cent) have not been resolved.

Ministry’s Response – NAO


SN Findings
Status as of January 2024 Comments
Unoccupied Government Owned Buildings and Land (Page 124)
1 Land in Washington – Value for money A meeting would be held with
was not obtained as the residence on a representatives of the Ministry of
plot of land of two acres, purchased at a National Infrastructure and
cost of US$ 1.43 million, was Community Development
unoccupied due to its deplorable state. (MNICD) and MoFEPD to chart
(Pg 124, Para 8.3.1) the way forward on the sale of
Not Resolved
the building. It is to be noted that
as at that date, there is no
legislation for sale of Mauritian
property abroad. The PPO has
been contacted for the way
forward as well.
2 Delay in carrying out renovation works at Action was being taken based on
six premises and construction of technical advice from MNICD as Not Resolved
buildings have entailed payment of rent a Project Manager was no more
totaling some Rs 124 million for the past posted at the Ministry. A lead
three financial years 2019-20 to 2021-22. Engineer has been assigned to
(Pg 124-125, Para 8.3.1) this Ministry since January 2024.

Project Management – Delays in Implementation of Capital Projects (Page 126)


Construction of Chancery and Staff Residence Project in Addis Ababa
3 Refund of VAT of US $ 938,320 (some The correct figure for refund of
Rs 42 million) was not claimed by VAT should read US$ 815,931,
Mission. and VAT of US$ 729,227 Partially
already refunded. Mission Resolved
(Pg 126, Para 8.3.2 (a))
requested to submit claim for
outstanding amount US$ 86,704
to the Ethiopian Authorities at
the earliest.
4 Delay and Refusal for moving to the Financial clearance has been
newly constructed building at a cost of obtained for payment of rent Partially
Rs 238 million to house the Chancery, amounting to Rs 3.4 million and Resolved
home-based staff inclusive of the Rs 1.6 million for the

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MINISTRY OF LAND TRANSPORT AND LIGHT RAIL,
AND FOREIGN AFFAIRS, REGIONAL INTEGRATION AND INTERNATIONAL TRADE
Ministry’s Response – NAO
SN Findings
Status as of January 2024 Comments
Ambassador. This led to the payment of Ambassador (for the period
rent totalling some Rs 9.1 million for the 1 November 2023 to 31 October
period May 2022 up to October 2023. 2024) and for Second Secretary
(Pg 126, para 8.3.2 (a)) (Mr D, for period 12 May 2022
to 11 August 2023) respectively
on 27 December 2023.
Electronic Document Management System (EDMS) Project
5 No contract was yet signed after three No action taken as the request for
years since the approval for the deputation of three IT experts
implementation of Phase 2 in November by Ministry of ICT had not been
2020, and no action plan was prepared to entertained.
meet the timeline for technical readiness.
Not Resolved
No development or expenditure incurred
in the financial year 2022-23 despite
MFA stated that a new team set up and
project was being steered for its
successful implementation.
(Pg 128, Para 8.3.2 (b))
6 35 laptops purchased at a total amount of Laptops distributed to officers.
some Rs 2 million were unutilised. Resolved
(Pg 128, Para 8.3.2 (b))

Storage Fees and Rent/ Lease of Office Accommodation/ Premises – Nugatory


Expenditure of some Rs 4.8 million (Page 128)
7 Fees totaling some Rs 1.4 million were The unserviceable items have
incurred for storage of furniture and other already been disposed of.
items whose value was depreciating.
An amount of some Rs 503,000 was still
paid as fees for storing furniture/ Resolved
equipment/ unserviceable items during
the year.
(Pg 128 – 129, Para 8.3.3)
8 Two rented spaces were used to store the Mission instructed to keep all
items purchased for the Ambassador in items in only one storage facility
Riyadh and an amount of some instead of two. Rental of storage
Rs 375,000 was paid for months July has been stopped since Resolved
2022 to June 2023 September 2023.
(Pg 128 – 129, Para 8.3.3)
9 Some Rs 1.4 million were paid as rent for Rental of storage have been
unoccupied premises by two Missions. A stopped at Mission Riyadh on
further amount of approx. Rs 384,094 31 August 2023.
was paid as rent for unoccupied space Resolved
during this financial year.
(Pg 128 – 129, Para 8.3.3)

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MINISTRY OF LAND TRANSPORT AND LIGHT RAIL,
AND FOREIGN AFFAIRS, REGIONAL INTEGRATION AND INTERNATIONAL TRADE
Ministry’s Response – NAO
SN Findings
Status as of January 2024 Comments
10 For the period January 2020 to June The Regional Integration
2022, rent of some Rs 2 million was paid Division relocated to that level
for unoccupied space for one level since July 2022.
(Level 3) of a building in Port Louis. Resolved
(Pg 128 – 129, Para 8.3.3)

Mauritius Mission in Kuala Lumpur – Non-compliance with Rules and Procedures


(Page 130)
11 Security deposit (SD) of RM 99,864 The Head of Mission moved
(some Rs 900,000) not refunded by the from the previous Chancery
landlord. without the approval of the
An amount of RM 26,912 refunded to Ministry as a result of which
Mission in December 2022. The previous Security Deposit could not be
landlord stated that upon refund of this recouped in full. Mission has Partially
balance, the parties would have no been requested to negotiate Resolved
further claims against each other from further with the Landlord.
this matter.
Reports of “Etat de lieux” and Inventory
Lists not available.
(Pg 130 - 131, Para 8.3.4)

Salaries and Allowances – Inadequate Control over Overtime and Lapses in Payment of
Allowances (Page 427)
12 No Approval for payment of subsistence Approval obtained on 30 May
allowance at the rate of Rs 7,340 per day 2023 from PMO.
to home-based staff when they came on Resolved
official visit to Mauritius.
(Pg 427, Para 10.4.1)
Construction of Residences and other Projects in New Delhi and Ex-Indian Ocean
Commission (IOC) Secretariat Building (Page 427)
13 Rs 13 million provided for the No budget provided for this item
Construction of Residences in New Delhi in the financial year 2022-23.
were not spent. Not Resolved
(Pg 427, Para 10.4.5)

14 No decision taken for the renovation of No Funds have been allocated to


the Ex Indian Ocean Commission (IOC) this project since 2018-19.
Secretariat Building located in Quatre
Bornes. For 2022-23, rent paid to house Not Resolved
the IOC Secretariat amounted to some
Rs 19 million.
(Pg 427, Para 10.4.5)

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MINISTRY OF LAND TRANSPORT AND LIGHT RAIL,
AND FOREIGN AFFAIRS, REGIONAL INTEGRATION AND INTERNATIONAL TRADE
Ministry’s Response – NAO
SN Findings
Status as of January 2024 Comments
Advance Accounts – Outstanding Security Deposits not cleared and Advance Account not
opened (Page 428)
15 Court Case for non-refund of Security The landlord submitted a
Deposit (SD) of INR 12,510,000 (Rs 6.6 proposal regarding the case.
million) pending since March 2002. Consulate requested to seek for
Court case still ongoing. an extension regarding the matter Not Resolved
(Pg 428, Para 11.3) at the High Court, pending a
decision from the Government of
Mauritius, thereon. Matter under
process.
16 No follow up in respect of the Discrepancies noted on the exact
recoverability and validity of the long amount to be received and the
outstanding SDs totalling some cases are being examined.
Rs 3 million. Not Resolved
(Pg 428, Para 11.3)

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MINISTRY OF LAND TRANSPORT AND LIGHT RAIL,
AND FOREIGN AFFAIRS, REGIONAL INTEGRATION AND INTERNATIONAL TRADE
8.3.4 Follow-up of Matters Raised in the Performance Audit Report 2019

Title of Report: “Preparedness for Implementation of Sustainable Development Goals


(SDGs)”

Date Issued: February 2019

A follow up of matters raised in the abovementioned report was carried out. The Ministry
of Foreign Affairs, Regional Integration and International Trade was requested to inform
the National Audit Office of the actions that have been taken to address the findings and
recommendations in the Report. The information along with evidence collected through
review of files and documents were assessed and discussed with the Ministry.

The status on actions taken on key findings and recommendations since the publication of
the Report are summarised below. Out of 7 recommendations, one (14 per cent) has been
implemented, four (57 per cent) have been partly implemented and two (29 per cent) were
not implemented.

SN Findings Recommendations Ministry’s Response NAO


–Status as at Comments
January 2024
1 Changes in assigning The creation of inter- A permanent
the responsibility for ministerial structures is Sustainable
the coordination, a way to mobilise the Development Unit
monitoring and various parts of the (SDU) has been set to
reporting on the Government around the coordinate, monitor
implementation of SDGs and ensure and assess the
SDGs did not ensure coherent and implementation of the
continuity. At the coordinated efforts SDGs. The setting up Implemented
Ministry, there was no overall. of an Inter-Ministerial
permanent structure to (Pg 30, Para 5.5) Coordination
follow up on the Committee has been
implementation of phased out.
SDGs.
(Pg 16, Para 3.2.2.1)
2 Integrating the SDGs The Ministry of The Ministry has taken
into the budgetary Finance, Economic note. The Ministry of
process and mobilising Planning and Finance, Economic
resources from sources Development through Planning and
other than the its Budget Circular Development will be
Government budget is should request
informed
important. However, Ministries/Departments Not
there was no evidence to provide information
accordingly for
action deemed Implemented
that Government made on how their budget
an estimate of financial proposals are related to appropriate at their
resources needed for the relevant SDGs end.
implementing SDGs. targets and indicators.
(Pg 17, Para 3.2.2.2) (Pg 30, Para 5.6)

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MINISTRY OF LAND TRANSPORT AND LIGHT RAIL,
AND FOREIGN AFFAIRS, REGIONAL INTEGRATION AND INTERNATIONAL TRADE
SN Findings Recommendations Ministry’s Response NAO
–Status as at Comments
December 2023
3 There was no plan of Government should The Ministry was
activities to build up formulate different involved in several
awareness of the Agenda communication and nation-level events
awareness activities Not
among stakeholders, with which contributed to
the aim to engage them in incorporated into a plan. raise awareness of Implemented
(Pg 29, Para 5.3)
the national effort to SDGs country-wide.
implement SDGs.
(Pg 18, Para 3.2.3)
4 There were also not Ministries should set up The Ministry attends
enough efforts to seek the mechanisms that assist the meetings of the
commitment of NGOs their stakeholders to Working Groups on
maximise their Partly
and business the basis of
contribution to the Implemented
communities involved in invitations conveyed
SDGs.
the implementation of to it and reports the
(Pg 30, Para 5.4)
SDGs. contents on file.
(Pg 18, Para 3.2.3)

5 Three-year Strategic Government needs to The long-term plan of


Plans and annual Budget formulate a long-term Government is
Speeches did not provide plan in consultation with contained in the five- Partly
a long-term development the key stakeholders. year Government Implemented
perspective that covered (Pg 29, Para 5.1) Programme and is
the period ending 2030. aligned to the SDGs.
(Pg 19, Para 3.2.5)

6 As at end of December To facilitate the The Ministry had


2018, there were no implementation of the undertaken a
specific policy and 2030 Agenda, strategic thorough analysis of
plans should be aligned Partly
programmes to bridge the the Plans of Actions
to SDGs. Implemented
gaps identified. submitted by
(Pg 19, Para 3.2.5) (Pg 29, Para 5.2) stakeholders and was
following up on those
not yet submitted.

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MINISTRY OF LAND TRANSPORT AND LIGHT RAIL,
AND FOREIGN AFFAIRS, REGIONAL INTEGRATION AND INTERNATIONAL TRADE
SN Findings Recommendations Ministry’s Response NAO Comments
–Status as at
December 2023
7 No annual progress In priority, the challenges The Ministry has
report or identified by the taken note of the audit
monitoring report Committee on SDGs of comments and same Partly
that compares the Statistics Mauritius need to would be conveyed to Implemented
progress actually be addressed. These Statistics Mauritius.
made with planned include the need to
progress was strengthen networking
published. Instead among data producers and
users; review, harmonise
a ‘SDG Database’
and strengthen the existing
was produced by
data collection system
Statistics among others.
Mauritius, which (Pg 31, Para 5.7)
was updated in
October 2018, and
published on its
official website.
(Pg 25, Para 3.3.2)

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MINISTRY OF LAND TRANSPORT AND LIGHT RAIL,
AND FOREIGN AFFAIRS, REGIONAL INTEGRATION AND INTERNATIONAL TRADE
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MINISTRY OF LAND TRANSPORT AND LIGHT RAIL,
AND FOREIGN AFFAIRS, REGIONAL INTEGRATION AND INTERNATIONAL TRADE
9 –MINISTRY OF FINANCE, ECONOMIC PLANNING
AND DEVELOPMENT

9.1 FINANCE, ECONOMIC PLANNING AND DEVELOPMENT


9.1.1 Assessment Review Committee – 2,271 Cases involving Taxes of Rs 23.2 billion
not yet resolved as at 30 June 2023, including 582 Cases involving Rs 11.9 billion
Pending for Five Years or more

The Assessment Review Committee (ARC) has been established under the Mauritius
Revenue Authority Act 2004 to hear and determine all representations made by aggrieved
persons against decisions, determinations, notices, or claims made by the Director-General
of the Mauritius Revenue Authority (MRA) or the Registrar-General as provided under
relevant revenue laws.

Information, regarding cases referred to ARC and pending cases, was taken from the
Statement ‘Status of Objection and Appeal’ for the financial year 2022-23 and previous
financial years submitted by MRA to NAO.

Findings

Significant Number of Cases with Substantial Amount pending at the level of ARC at
close of each Financial Year

It was noted that 2,271 cases (MRA - 1939 cases and Customs - 332 cases), relating to
MRA, involving some Rs 23.2 billion of assessed tax had remained pending at ARC at close
of financial year 2022-23. The evolution of the number of cases and amount involved over
the period 2018-19 to 2022-23 is shown in Figure 1.
Figure 1 Cases Pending at the Level of ARC for the Past Five Years
Rs million
25,000

RS 23,068 m
20,000 Rs 21,622 m Rs 22,575 m (1939 cases)
(1938 cases) (1925 cases)
Rs 17,503 m
15,000 (2244 cases)
Rs 15,372 m
(2361 cases)
10,000

5,000
Rs 129 m Rs 126 m Rs 124 m Rs 123 m Rs 130 m
(258 cases) (250 cases) 311 cases) (331 cases) (332 cases )
0
2018-19 2019-20 2020-21 2021-22 2022-23

MRA - I.TAX, VAT, Gambling & Others CUSTOMS

Source: Annex 2A: Status of Objection and Appeal for the respective Financial Years -Statement submitted
by MRA as per Section 10 (5b) of the MRA Act

183
Age Analysis of Pending Cases

An age analysis of pending cases at ARC, relating to MRA, as at 30 June 2023 is shown in
Table 9-1.

Table 9-1 Age Analysis of Pending Cases at ARC as at 30 June 2023

MRA-Income Tax, VAT, MRA-Customs Total


Gambling and Others

Period No. of Amount No. of Amount No. of Amount


cases cases cases
Rs million Rs million Rs million
Less than 1,511 11,271.5 178 40.8 1,689 11,312.3
5 years

5 years and 428 11,796.7 154 89.3 582 11,886.0


above

Total 1,939 23,068.2 332 130.1 2,271 23,198.3


Source: Annex 2A: Status of Objection and Appeal for the Financial Year 2022-23 – Statement submitted by
MRA as per Section 10 (5b) of the MRA Act

There were 582 cases pending for five years or more, involving Rs 11.9 billion, that is,
51 per cent of the total amount for pending cases. Included were 45 cases, with assessed tax
amount of some Rs 160 million, relating to the years prior to 2013, that is, more than
10 years back.

Key Performance Indicator not set for ARC

A Key Performance Indicator (KPI) for ARC was not set. The setting up of KPI is essential
to measure performance with a view to achieve strategic and operational goals.

Cases Lodged and Determined

A further analysis of the cases relating to the financial year 2022-23 is as shown in
Table 9-2.

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MINISTRY OF FINANCE, ECONOMIC PLANNING AND DEVELOPMENT
Table 9-2 Status of Appeal Cases for Financial Year 2022-23

Status MRA – Income Tax, VAT, MRA - Customs Total


Gambling & Others
No. of Amount No. of Amount No. of Amount
Cases Cases Cases
Rs million Rs million Rs million
Pending 1,925 22,575.4 331 123.1 2,256 22,698.5
1 July 2022
Lodged during 1,611 4,540.7 24 16.6 1,635 4,557.3
2022-23
Determined 1,597 4,047.9 23 9.6 1,620 4,057.5
during 2022-23
Pending as at 1,939 23,068.2 332 130.1 2,271 23,198.3
30 June 2023

Source: Annex 2A: Status of Objection and Appeal for the Financial Year 2022-23 – Statement submitted
by MRA as per Section 10 (5b) of the MRA Act.

Out of the 1,620 determined cases, according to information obtained from MRA:

At the level of ARC, only 151 cases (representing some 9 per cent) were determined.
Decisions were taken in 71 cases and 80 cases were struck out.

The remaining 1,469 cases were determined at the level of MRA. This included
1,002 cases with pre-hearing negotiations and 235 cases re-directed to objection.

Breakdown of Pending Cases

A further breakdown of the pending cases as at 30 June 2023 in terms of the different tax
types and taxpayers is shown in Table 9-3.

Table 9-3 Analysis of Pending Cases

Tax Type Individual Corporate Individual/


Corporate
No. of Amount No. of Amount Total Amount
Cases Cases
Rs million Rs million Rs Million
Income Tax 565 748.0 917 18,647.0 19,395.0
VAT 56 160.8 259 2,308.0 2,468.8
Gambling 32 180.1 110 1,024.3 1,204.4
& Others
Customs 7 3.1 325 127.0 130.1
and Excise
Total 660 1,092.0 1,611 22,106.3 23,198.3
Source: Annex 2A: Status of Objection and Appeal for the Financial Year 2022-23 – Statement submitted
by MRA as per Section 10 (5b) of the MRA Act.

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MINISTRY OF FINANCE, ECONOMIC PLANNING AND DEVELOPMENT
Some 71 per cent of the pending cases related to corporate taxpayers with assessed amount
representing 95 per cent of the total.

Section 20 (3)(a) of the MRA Act states, in relation to ARC:

The representations made by an aggrieved person shall be dealt with as expeditiously as


possible and a panel shall endeavour to:

(i) fix the case for hearing within 3 months from the date the representations were lodged;
and

(ii) give its decision on the representations no later than 4 weeks from the end of the
hearing.

Thus, as per legal provision, ARC has to give its decision within 4 months from date
representations were made.

Root Cause

There was a lack of monitoring over the performance of ARC.

Recommendations

The following measures may be considered by the Accounting Officer:

To put in place an Arrears Management Committee to monitor the performance of ARC


and the pace of settlement of cases.

The setting up of KPI for ARC.

To look for alternative mechanisms to expedite the settling of pending and future
cases.

Ministry’s Response

MoFEPD is working a KPI in consultation with the Chairperson of the ARC

It is to be noted that, almost every year, amendments are brought to the MRA Act to
facilitate hearing and settlement of cases at the ARC. Furthermore, an Alternative Tax
Dispute Resolution panel has been set up at the level of the MRA where representations
lodged at the ARC can be transferred to this panel thus relieving the burden on the
ARC. The Tax Arrears Settlement Scheme has also been introduced to speed up
settlement of some cases.

9.1.2 Key Performance Indicators

Setting up of Key Performance Indicators (KPIs) is essential to measure performance of a


Department/Unit with a view to achieve strategic goals.

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MINISTRY OF FINANCE, ECONOMIC PLANNING AND DEVELOPMENT
(a) KPI not Set

Findings

KPI for the Assessment Review Committee (ARC) and Independent Review Panel (IRP)
falling under the purview of the Ministry of Finance, Economic Planning and Development
(MoFEPD) was not set.

Recommendation

The Accounting Officer should ensure that ARC and IRP set their KPIs.

Ministry’s Response

MoFEPD will work out with the concerned Departments for the development of appropriate
KPIs to be set in the budget estimates document.

(b) KPI Targets not met

(i) Report on Performance

Finding

According to Section 4B of the Finance and Audit Act, every department shall, not later
than 31 October in every year, submit to the Minister, a report on its performance in respect
of the previous fiscal year and on its strategic direction in respect of the following three
fiscal years.

Only 12 Reports on Performance for the financial year 2021-22 had been submitted by
statutory deadline of 31 October 2022 representing a compliance rate of 19 per cent. As of
5 January 2024, the compliance rate was 84 per cent.

Furthermore, for the financial year 2022-23, the compliance rate for submission within
deadline was only 17 per cent.

Root Cause

Inappropriate KPI has been set up by the Ministry.

Recommendation

To improve compliance, the Accounting Officer should revise the KPI to “Percentage of
Ministries/Departments submitting Annual Report on Performance within Statutory
Deadline” instead of “Percentage of Ministries/Departments submitting Annual Report on
Performance”.

Ministry’s Response

It is to be noted that several actions have been taken to ensure full compliance with the
statutory provisions.

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MINISTRY OF FINANCE, ECONOMIC PLANNING AND DEVELOPMENT
(ii) Electronic Inventory Management System (E-IMS)

Findings

As of 30 June 2023, the percentage of Ministries/Departments where the E-IMS has been
deployed was 70 per cent compared to target of 100 per cent.

The objective of integration/interfacing of the E-IMS with the Government Assets Register
was still not met.

Root Cause

There was no close monitoring on the implementation of E-IMS.

Recommendation

A Project Steering Committee should be set up at the Ministry’s level to closely monitor
progress for the implementation of E-IMS to ensure that the milestones set are achieved.

Ministry’s Response

A Project Steering Committee has been set up at MoFEPD under the chairpersonship of
the Permanent Secretary, to monitor the implementation of the project.

(iii) Establishment of Risk Management Framework in the Public Sector-Target met


but low compliance rate for whole Government

Findings

In year 2021, MoFEPD issued a circular to assist Accounting Officers of


Ministries/Departments in the process for putting in place a Risk Management (RM)
Framework.

The actual achievement of 37 per cent exceeded the target of 25 per cent.

As of 30 June 2023, only 10 Ministries/Departments have developed the RM Framework


and they are yet to finalise development of a Risk Register. Therefore, compliance rate for
the whole Government is considered low.

No deadline has been set for Ministries/Departments for the implementation of the
framework.

Root Cause

There was no close monitoring on the implementation of the RM Framework.

Recommendation

A Project Steering Committee should be set up at the level of MoFEPD which should
include officers of the Ministry, Internal Control Cadre and Office of Public Sector
Governance. The Committee should then devise a proper implementation plan with clear
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MINISTRY OF FINANCE, ECONOMIC PLANNING AND DEVELOPMENT
objectives, deliverables and output to ensure timely setting up of RM Framework in
Ministries/Departments.

(iv) Statistics Mauritius

Findings

The scheduled timeline for the operationalisation of Modern Statistics e-Platform which
was set for June 2023 was not attained.

Ministry’s Response

The following Committees have been set up to monitor the implementation of SM’s
E-Business Plan:

A Project Technical Committee (PTC) comprising representatives from United Nations


Development Programme, Statistics Mauritius, Central Informatics Bureau, Central
Information System Division, MoFEPD, IT Security Unit of the Ministry of
Information Technology, Communication and Innovation and Government-Online
Centre.

A Project Steering Committee comprising the PTC and representatives from the
Service Provider

(v) Registrar General’s Department

Findings

Implementation of enhanced system to speed up registration of motor vehicles which was


targeted at 100 per cent during the financial year 2022-23 was not achieved. As of 30 June
2023, the percentage implementation was only 70 per cent.

Ministry’s Response

The developer has completed the development and is in the process of internal testing.

Depending on internal testing results, they plan to deploy the system at Registrar
General’s Department (RGD) infrastructure early February 2024 for user trainings and
User Acceptance Testing.

At the level of RGD, planning for mobilisation for acceptance has started.

9.1.3 Audit Committee

Audit Committee (AC) plays a key role in public accountability by providing independent
oversight of the organisation’s governance, risk management and internal control practices,
thus providing confidence in the integrity of these practices.

In August 2022, the Office of Public Sector Governance developed an updated AC Charter
to provide guidelines on the setting up and operations of AC.

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MINISTRY OF FINANCE, ECONOMIC PLANNING AND DEVELOPMENT
According to the guidelines, the AC shall hold a minimum of six meetings annually with at
least one meeting per quarter.

In November 2022, a Performance Agreement was drawn between the Accounting Officer,
the Chairperson and members of the Committee.

Finding

The AC at MoFEPD met only once during the financial year 2022-23.

Recommendations

The Accounting Officer should ensure compliance with the provisions of the AC
charter and the Performance Agreement.

The Chairperson should ensure that the AC holds a minimum of six meetings annually,
with at least one meeting per quarter.

Ministry’s Response

The AC will meet at least six times during the period.

9.1.4 Pension Funds-77 Public Sector Bodies reported Deficits totalling Rs 46 billion

At paragraph 25.2 of the Audit Report for the financial year 2021-22, it was highlighted
that the financial statements of 72 Public Sector Bodies submitted to NAO showed that
pension funds under their Defined Benefit Pension Plans were running deficits totalling
Rs 40 billion as of 30 June 2021, consisting of Rs 33 billion for 60 Statutory Bodies and
Rs 7 billion for 12 Local Authorities.

According to IPSAS 39 ‘Employee Benefits’, an entity shall recognise the net defined
benefit liability (asset) in the statement of financial position. The net defined benefit
liability (asset) is the deficit or surplus calculated by deducting the fair value of plan assets
from the present value of the defined benefit obligations.

Based on Financial Statements submitted for the financial year ended 30 June 2022, the
following were noted as shown in Table 9-4:

(a) The aggregate deficit of 65 Statutory Bodies amounted to Rs 37.2 billion as of 30 June
2022.

(b) The aggregate pension deficit for the 12 Local Authorities has increased from
Rs 7.1 to Rs 8.7 billion.

(c) Nine of the Statutory Bodies had aggregate deficits of Rs 30.4 billion and five of the
Local Authorities had aggregate deficits of Rs 6.3 billion.

(d) The defined benefit plan deficits of Statutory Bodies and Local Authorities have
increased from Rs 33.3 billion as of 30 June 2020 to Rs 46 billion as of 30 June 2022,
that is an increase of some 38 per cent.

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MINISTRY OF FINANCE, ECONOMIC PLANNING AND DEVELOPMENT
Table 9-4 Pension Fund Deficits of Statutory Bodies and Local Authorities as of
30 June 2020,30 June 2021 and 30 June 2022

Statutory Bodies 30 June 2022 30 June 2021 30 June 2020


Rs Rs Rs
Private Secondary Education 10,754,395,586 9,531,995,111 6,445,323,410
Authority
Central Electricity Board 5,628,042,000 6,644,464,000 7,361,737,000
Mauritius Revenue Authority 4,223,281,212 3,503,015,657 2,389,585,416
Central Water Authority 2,480,036,073 2,276,820,717 2,018,372,793
University of Mauritius 1,851,267,164 1,389,209,031 999,081,480
Mauritius Cane Industry Authority 1,522,273,929 1,254,772,914 1,232,379,564
Mauritius Broadcasting 1,407,928,967 1,184,420,088 912,748,343
Corporation
Mauritius Institute of Education 1,269,573,662 1,123,808,395 941,038,574
Mahatma Gandhi Institute 1,343,661,001 1,015,713,896 854,917,499
30,480,459,594 27,924,219,809 23,155,184,079
51 other Statutory Bodies 5,053,106,299 3,757,831,552
56 other Statutory Bodies 6,772,852,317
Total for Statutory Bodies 37,253,311,911 32,977,326,108 26,913,015,631

Local Authorities
The City Council of Port Louis 2,104,586,895 1,720,664,491 1,591,850,542
Municipal Council of Curepipe 1,129,000,798 947,866,219 874,435,135
Municipal Council of Vacoas 1,183,186,514 933,383,076 825,260,451
/Phoenix
Municipal Council of Beau Bassin 1,085,824,818 881,872,741 829,666,445
/Rose Hill
Municipal Council of Quatre 830,801,692 689,566,766 625,565,166
Bornes
6,333,400,717 5,173,353,293 4,746,777,739

7 Other Local Authorities 2,402,126,104 1,918,925,503 1,642,015,669


Total for Local Authorities 8,735,526,821 7,092,278,796 6,388,793,408
Gross Total 45,988,838,732 40,069,604,904 33,301,809,039

Source: NAO Analysis of Statutory Bodies and Local Authorities Financial Statements

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MINISTRY OF FINANCE, ECONOMIC PLANNING AND DEVELOPMENT
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MINISTRY OF FINANCE, ECONOMIC PLANNING AND DEVELOPMENT
9.2 MAURITIUS REVENUE AUTHORITY
9.2.1 Revenue Collection

The Mauritius Revenue Authority (MRA) is a body corporate, set up to manage an effective
and efficient revenue-raising system. It administers and collects taxes due in Mauritius.

Revenue collected during the financial year 2022-23 by MRA, in respect of the various
categories of taxes (excluding Customs and Excise collections) totalled some
Rs 77.3 billion, compared to Rs 59.9 billion collected in the financial year 2021-22,
representing an increase of 29 per cent.

9.2.2 Status of Taxpayers Register and Filing Obligations

MRA updates its Taxpayers Register, on an ongoing basis, to enable effective management
of taxpayers, and at the same time maximises efforts to widen its tax base.

As per the Taxpayer’s Register, as of 30 June 2023, 726,896 taxpayers were registered at
MRA, as compared to 616,356 as of 30 June 2022, representing an increase of
18 per cent. 889 taxpayers were de-registered during the financial year 2022-23.

The number of taxpayers who had obligations to file tax returns has increased from
336,547 to 357,263, that is, by some six per cent. As of 30 June 2023, 314,065 Income Tax
returns were filed representing some 88 per cent of taxpayers filing obligations.

Filing of Taxpayers Returns

For the income year ending 30 June 2023, 43,198 taxpayers did not file their tax returns as
compared to 49,150 for income year ending 30 June 2022. Hence, an increase of 5,952
taxpayers filing their returns was noted compared to financial year 2021-22. However,
4,373 taxpayers did not file their returns during the last three years.

MRA’s Response

MRA issues reminders to non-filers within three months of the due date for submission
of Income Tax Returns.

For the year of assessment 2022/2023, out of the 49,151 non-filers, return obligations
have been removed for 12,060 taxpayers and 13,417 taxpayers have submitted a return.

The remaining 23,674 non-filers are being dealt with by the non-filers unit of Medium
and Small Taxpayer Department (MSTD).

9.2.3 Arrears of Revenue as of 30 June 2023

As of 30 June 2023, arrears of revenue totalled some Rs 44 billion, compared to


Rs 37 billion as of 30 June 2022. The arrears as at 30 June 2023 comprised Rs 12.5 billion
collectible debts and an amount of Rs 31.5 billion for cases not yet settled/pending cases as
shown in Table 9-5.

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MINISTRY OF FINANCE, ECONOMIC PLANNING AND DEVELOPMENT
Table 9-5 Arrears of Revenue as per Tax Type

Types of Tax Collectible Amount not yet Total


Debts Settled/Pending
Cases
Rs million Rs million Rs million
VAT 5,960 4,601 10,561
Corporate tax/ 4,976 25,406 30,382
Income Tax
PAYE 589 93 682
CSG 338 20 358
TDS 191 80 271
Others 403 1,276 1,679
Cases under - 401 401
disputes
Total 12,457 31,877 44,334

Source: Statement of Return of Arrears of Revenue as at 30 June 2023

Collectible Debts and Amount not yet Settled/Pending Cases

The amount not yet settled/pending cases represented 72 per cent of the total arrears of
revenue while the remaining 28 per cent represented the collectible debts.

Out of the Rs 12.5 billion collectible debts, Rs 10.86 billion comprised mainly arrears
of revenue in respect of VAT, Corporate tax and Income tax.

Age Analysis for Collectible Debts, Debts Collected and Write Off

An age analysis of Collectible Debts for the financial years 2021-22 and 2022-23 is shown
in Table 9-6.

Table 9-6 Age Analysis of Collectible Debts

Period FY 2021-22 FY 2022-23


Rs million Rs million
Prior to 30.06.93 8.99 8.15
01.07.93-30.06.00 62.08 58.56
01.07.00-31.12.10 826.15 738.61
01.01.11-30.06.21 7,820.51 6774.34
01.07.21-30.06.22
2,489.60 4,877.14
01.07.22-30.06.23
Total 11,207.33 12,456.80

Source: Debt Management Unit of MRA

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MINISTRY OF FINANCE, ECONOMIC PLANNING AND DEVELOPMENT
Outstanding debts before 2010, that is, more than 13 years back amounted to some
Rs 805 million and debts for 2011 to 2021 amounted to some Rs 6.8 billion.

During financial year 2022-23, an amount of Rs 3.5 billion was collected regarding
arrears of revenue.

Total debts written off during the financial year 2022-23 amounted to Rs 182.9 million.

Enforcement Actions

Enforcement actions are provided under Part IVC of the MRA Act. Enforcement Actions
undertaken by MRA during financial years 2021-22 and 2022-23 are detailed in
Table 9-7.

Table 9-7 Enforcement Actions undertaken in Financial Years 2021-22 and 2022-23

Enforcement Action
FY 2021-22 FY 2022-23
Number Amount Number Amount
Rs million Rs million
Final claims 5,699 5,102.48 23,869 12,799.93
Agreements 757 756.34 538 1,049.13
Attachment Orders 2,975 1,065.27 2,257 837.18
Distress Warrants 1 6.67 1 36.79
Inscription/ Renewal of inscription 853 2869.09 684 2,487.2
Objection to Departure 14 87.75 15 196.05
Prosecution 3 55.92 - -
Prior Notice Contrainte/Contrainte 36 275.7 33 296.87
Total 10,338 10,219.22 27,397 17,703.15

Source: Debt Management Unit of MRA

As stated at paragraph 9.3.2 of Audit Report 2021-22, a Debt Management Module (DMM)
was introduced in order to assess the effectiveness of enforcement actions against debt
recovered.

The DMM was expected to go live in the financial year 2022-23. However, as of November
2023, the module was still at testing stage.

MRA’s Response

The Debt Management Module of the MRA Integrated Tax Administration System (ITAS)
has been developed and testing is ongoing. The “claim” and “attachment order” functions
are in operation since December 2023.

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MINISTRY OF FINANCE, ECONOMIC PLANNING AND DEVELOPMENT
9.2.4 Tax Arrears Settlement Scheme 2022

The Tax Arrears Settlement Scheme (TASS) was introduced in financial year 2012-13. The
TASS has been extended on an annual basis up to the financial year 2023-24. The objective
of the scheme is to encourage taxpayers who are in arrears of tax and duty to MRA to settle
their debts promptly. The scheme is also applicable to cases which are under assessments.

For the financial year 2022-23, taxpayers with arrears of revenue, as at 7 June 2022, had to
settle their debts on or before 31 March 2023 in order to benefit from 100 per cent waiver
of penalty and interest included in the tax arrears under the Income Tax Act, Value Added
Tax Act or the Gambling Regulatory Authority Act.

To benefit from the total waiver of penalty and interest, the taxpayer was required to make
an application to the MRA. During the financial year 2022-23, 12,126 applications for the
waiver amounting to some Rs 4 billion, were made as shown in Table 9-8.

Table 9-8 Applications made to MRA

Category of No. of Tax Arrears Penalties & Total Payments


Applicants applications Interests

Rs million Rs million Rs million Rs million


Arrears includes 5,150 2,393 1,489 3,882 937.2
Penalties &
Interests
Arrears includes 3,268 - 159 159 1.5
only Penalties
and Interests
No arrears 3,708 - - - -
Total 12,126 2,393 1,648 4,041 938.7

Source: Operational Services Department

Findings

During the financial year 2022-23, out of the total arrears of Rs 4 billion, an amount of
Rs 938.7 million was collected, representing some 23 per cent of the total arrears under
the scheme.

Out of the 5,150 applicants, 2,283 had settled their arrears and 748 had effected part
payment. The remaining 2,119 applicants did not settle their outstanding taxes as of the
prescribed date. Therefore, they did not benefit from the waiver of penalties and
interests.

Although the TASS has been extended over the last 10 years, the response to the
scheme was very low. Only Rs 938.7 million were collected out of the total of
Rs 44 billion arrears of revenue as of 30 June 2023, representing two per cent of the
total arrears of revenue.

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MINISTRY OF FINANCE, ECONOMIC PLANNING AND DEVELOPMENT
MRA’s Response

Out of the total collectible debts of Rs 11.2 billion, taxpayers with debts totalling
more than Rs 4 billion joined the TASS, representing 36 per cent of collectible debts.

9.2.5 Objections, Appeals and Dispute Resolutions Department

Where a person is not satisfied with an assessment or additional assessment issued to him
under the Income Tax Act, the VAT Act and the Gambling Regulatory Act, he may, within
28 days of the date of the Notice of Assessment, lodge an objection to the assessment at the
Objections, Appeal and Dispute Resolutions (OADR) Department of MRA. If a taxpayer
is not satisfied, he may lodge an appeal at the Assessment Review Committee (ARC) and
subsequently, to the Supreme Court on a point of law.

As of 30 June 2023, the OADR Department has determined 3,099 cases for an amount of
Rs 4.1 billion, representing 70 per cent of the total assessed amount of Rs 5.8 billion.
1,047 cases with total tax liability amounting to Rs 3.7 billion were still awaiting
determination, as shown in Table 9-9.

Table 9-9 Status of Cases under Objections as of 30 June 2023

Assessed Cases Number of Amount Amount


Cases Assessed Determined
Rs million Rs million
1 July 2022 833 2,562.8
30 June 2023 3,313 6,974.2
4,146 9,537.0
Determined Cases 3,099 5,818.1 4,065.7
Pending Cases 1,047 3,718.9

Source: OADR Department

Analysis of ‘Determined Cases’

An analysis of the determined cases is shown in Table 9-10.

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MINISTRY OF FINANCE, ECONOMIC PLANNING AND DEVELOPMENT
Table 9-10 Analysis of Determined Cases

Amount of Tax Amount of Tax


Amount Determined No. of
Assessed Determined
Assessments
Rs million Rs million

Less than the amount 966 944.2 467.8


assessed
Equal to zero 208 1,386.6 0
Equal to the amount 59 22.2 22.2
assessed
Greater than the amount 1,706 3,462.1 3,575.7
assessed
Zero Cases – Loss Cases 160 0 0
Total 3,099 5,815.1 4,065.7

Source: Listing provided by OADR Department

966 assessments were reviewed downwards from Rs 944 million to Rs 467 million in
the financial year 2022-23.

208 assessments were reviewed from Rs 1.3 billion to zero, following the issue of
Notice of Determination to taxpayers in the financial year 2022-23.

Appeal Cases to ARC

Age Analysis for Pending Cases

As of 30 June 2023, a total of 1,939 assessments for an amount of Rs 23.1 billion were
pending at the ARC as compared to 1,925 assessments for an amount of Rs 22.5 billion
for the previous year.

Out of the 1,939 cases for the financial year 2022-23, 637 were related to cases lodged
prior to year 2021 and amounted to some Rs 15.1 billion. This represents 65 per cent
of the total amount.

Supreme Court Cases

Any party who is dissatisfied with the decision of the Assessment Review Committee
(ARC) under Section 20(7) of the Mauritius Revenue Authority Act, as being erroneous in
law, may lodge an appeal at the Supreme Court.

As of 30 June 2023, 25 assessments for an amount of Rs 279 million were pending at the
Supreme Court. Moreover, six cases for an amount of Rs 142.1 million as at 30 June 2023,
related to cases pending prior to 2021, representing 51 per cent of total amount.

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MINISTRY OF FINANCE, ECONOMIC PLANNING AND DEVELOPMENT
9.2.6 Contribution Sociale Généralisée

The Contribution Sociale Généralisée (CSG) are paid to MRA, the collecting agent of
Government.

Following the COVID-19 pandemic, self-employed individuals are required to register with
the MRA for the payment of CSG in order to benefit from the different allowance schemes
put in place.

CSG collected by MRA over the last three financial years totalled some Rs 23.1 billion. A
total amount of Rs 9.5 billion has been collected during the financial year ended
30 June 2023.

Registration of the Self-Employed individuals for CSG

For the financial year ended 30 June 2023, CSG amounting to Rs 154 million were collected
from 35,728 self-employed individuals.

CSG Register as at 30 June 2023 showed a total of 99,904 contributors compared to 69,096
as at 30 June 2022. 63,546 out of the 99,904 contributors were self-employed individuals
as shown in Table 9-11.

Table 9-11 Comparative Figures for Self-employed Individuals

Details 30 June 2022 30 June 2023


Number of Filing Obligations 74,091 66,525
Number of Returns Filed 59,577 55,715
Registered for CSG 44,920 63,546

Source: OSD Unit

Contributions to CSG

As at 30 June 2023, out of 66,525 self-employed individuals who had filing obligations,
63,546 were registered for CSG and only 35,728 (54 per cent) contributed to CSG for the
financial year 2022-23.

MRA’s Response

96 per cent of self-employed individuals for Income Tax purposes were registered for CSG.

9.2.7 Fiscal Investigations Department

One of the main functions of the MRA is to combat fraud and other forms of tax evasion.
To achieve this objective, the Fiscal Investigations Department (FID) was set up by virtue
of Section 3(4) of the MRA Act 2004.

As per MRA records, 1,096 cases were outstanding from 2009 to 2023 and 815 cases which
were under investigation for the years 2019 to 2023 were completed.
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MINISTRY OF FINANCE, ECONOMIC PLANNING AND DEVELOPMENT
Completeness and Accuracy of Statement 2B not ascertained

The number of outstanding cases as per the Statement of Fiscal Investigations (2B) was
286 while FID records showed 1,096. The number recorded in the statement was, thus,
understated.

Discrepancies were noted in the number of investigations reported at start of the year
in the Statement 2B as at 30 June 2023 compared to the closing balances of the previous
year’s Statement as shown in Table 9-12.

Table 9-12 Balances at End of Year 30 June 2022 and Start of Year 1 July 2022

No of Income Tax Cases VAT Cases Other Cases


Investigations
as at
Individuals Corporates Individuals Corporates Corporates
1st July 2022 166 103 6 41 3
30 June 2022 169 130 2 26 0

Sources: Statement 2B as at 30 June 2022 and 2023

59 income tax-individuals and 84 income tax - Corporates of the outstanding cases as


at 30 June 2022 were omitted in balance at start of year as per records of FID.

Cases referred to FID Section from different sources were recorded in a register which
was not serially numbered.

Hence, the accuracy and completeness of the figures in the Statement 2B could not be
ascertained.

MRA’s Response

The 1,096 records relate to intelligence and investigation cases. Cases referred to FID are
recorded in ITAS and can be tracked at any point in time.

NAO Comment

NAO is of the view that all cases referred to FID should be categorised and reported in the
Statement of Fiscal Investigation for completeness purposes. Specific references should
be given to FID cases for ease of traceability.

Delay in completion of investigations

In accordance with Section 1.4, Quality Objectives of the Statement of Procedures (SOP)
for the Fiscal Investigations Department “investigation into cases of tax fraud and serious
evasion should be completed within a period of six months. In exceptional circumstances,
the time limit may extend beyond six months depending on the complexities of the case.”

According to Statement 2B, 787 cases under investigations were completed for an assessed
amount of Rs 4.9 billion during the financial year 2022-23. Some of these cases were
referred to FID since 2019 and hence were completed after four years.
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MINISTRY OF FINANCE, ECONOMIC PLANNING AND DEVELOPMENT
As of 30 June 2023, investigations in respect of 17 income tax-individuals and 29 income
tax- corporates’ cases have not been completed within the time limit of six months.

Recommendations

FID should ensure the accuracy and completeness of the figures in the Statement 2B.
A reconciliation should be carried out with the records maintained for control purposes.

FID should ensure that investigations are completed within the set time limit in line
with the SOP.

MRA’s Response

An analysis of the completed cases showed that 397 out of the 787 cases were
completed within six months and only 19 cases were completed after more than two
years.

The delays in completing the tax investigations were mainly due to complexities of the
cases and late submission of documents.

9.2.8 Follow-up of Matters Raised in the Audit Report 2021-22

A follow up of matters raised in the Audit Report 2021-22 was carried out. The Mauritius
Revenue Authority (MRA) was requested to inform the National Audit Office of the actions
that have been taken to address the findings and recommendations in the Report. The
information along with evidence collected through review of files and documents were
assessed and discussed with MRA.

The status on actions taken on findings since the publication of the Audit Report are
summarised below. The four findings (100 per cent), have been partially resolved.

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MINISTRY OF FINANCE, ECONOMIC PLANNING AND DEVELOPMENT
MRA’s Response – Status as of NAO
SN Findings
February 2024 Comments
1 Revenue Collection - Non-filers (Page 188)
There were 49,151 non-filers as at 30 Out of the non-filers who have
June 2022. This figure included submitted a return following
25,923 taxpayers who did not submit reminder sent to them, above 90
a return for both income years 2020- per cent are not liable to any
2021 and 2021-2022. additional tax.
Partially
(Pg 188, Para 9.3.1(a)) Remaining non-filers are selected
Resolved
for audits by the Non-Filers Unit
of Medium and Small Taxpayer
Department (MSTD) on a risk
basis and on the basis of third party
information available.
2 Revenue Collection - Completeness of the Register of Self-Employed Tax Payers
(Page 189)
The number of self-employed Action is being taken by MRA to
individuals according to records of bring those individuals who are
MRA that is 44,920 differs still in employment into the
significantly from the number of register.
beneficiaries of Self Employed
Assistance Scheme (SEAS) which Partially
totalled 263,000. According to MRA, Resolved
238,047 individuals who benefitted
from SEAS were not registered for
social contribution payment.
(Pg 189, Para 9.3.1(b))
3 Arrears of Revenue - Collectible Debts (Page 191)
Collectible debts represented only 30 During the financial year 2022-23
per cent of total debts. Debts for an amount of Rs 2.2 billion has
Income Tax, Corporation Tax and been collected representing
VAT amounted to Rs 1.4 billion, 19 per cent of the collectible debts. Partially
Rs 2.9 billion and Rs 5.2 billion Resolved
respectively and accounted for 86 per
cent of collectible debts.
(Pg 191, Para 9.3.2)
4 Arrears of Revenue - Enforcement Actions (Page 192)
A Debt Management Module has Debt Management Module of the
been included in its computerised MRA Integrated Tax
system to relate recovery to Administration System has been
enforcement tools. Testing is ongoing developed and is on testing phase. Partially
and the module is expected to go live The Claims and Attachment Order Resolved
in financial year 2022-23. has gone live in December 2023.
(Pg 192, Para 9.3.2)

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MINISTRY OF FINANCE, ECONOMIC PLANNING AND DEVELOPMENT
CUSTOMS DEPARTMENT
9.2.9 Arrears of Revenue

The Return of Arrears of Revenue for the Customs Department as at 30 June 2023 showed
a total arrears figure of Rs 442.7 million, arising from 703 cases. A total amount of
Rs 400.5 million, representing 90 per cent of total arrears, was classified as “Disputed
Debts” 1, with the remaining Rs 42.2 million being collectible debts.

Findings

Low Level of Collectible Debts over the Past Five Years

Collectible debts as a percentage of total arrears for the past five years are shown in
Table 9-13. The percentage of collectible assets to total arrears over the past five financial
periods, from 2018-19 to 2022-23 had remained below 10 per cent.

Table 9-13 Arrears of Revenue as at end of Past Five Financial Periods

Amount Due Percentage (%)


Financial Year Collectible Disputed Total Collectible Disputed
Rs Rs Rs to Total to Total
2018-19 53,531,936 559,915,388 613,447,324 8.7 91.3
2019-20 20,561,823 521,592,134 542,153,957 3.8 96.2
2020-21 35,239,667 429,837,375 465,077,042 7.6 92.4
2021-22 27,163,345 385,156,815 412,320,160 6.6 93.4
2022-23 42,150,654 400,516,561 442,667,215 9.5 90.5

Source: Return of Arrears of Revenue

As of 30 June 2023, out of the total arrears, some Rs 67.3 million were still under process
at the different departments of MRA, such as Legal Service Department (LSD) and
Objection, Appeal and Dispute Resolution Department (OADRD).

The remaining Rs 375.4 million, representing 85 per cent of the total arrears, were referred
to other Government entities/Committee (for example, Assessment Review Committee
(ARC), Police Service and Court) for advice, enquiry or determination according to current
Revenue laws. The recovery of these arrears, according to Customs Department, was
beyond its control (refer to Figure 1).

1
Disputed cases debts not yet settled and under process at the OADRD, ARC, Police Service and Court.
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MINISTRY OF FINANCE, ECONOMIC PLANNING AND DEVELOPMENT
Figure 1 Control over Total Arrears of Revenue for the financial year 2022-23

15% Rs 67.3 M

Percentage of total
Rs 375.4 M arrears within MRA
control
Percentage of total
arrears beyond MRA
control

85%

From an analysis of the arrears outstanding at the different MRA departments and
Government entities/Committees the following shortcomings were noted:

Legal Services Department - Rs 7.8 million

As of 30 June 2023, out of the 44 cases with arrears totalling Rs 7.8 million outstanding
at LSD, Rs 5.2 million related to arrears prior to the financial year 2022-23. These
included a total amount of Rs 2.6 million outstanding since the year 2018.

Objection Appeal and Dispute Resolution Department - Rs 21.6 million

As of 30 June 2023, the total number of cases at OADRD increased from nine cases
totalling Rs 8.8 million to 26 cases totalling Rs 21.6 million in the financial years
2021-22 and 2022-23, respectively.

Assessment Review Committee - Rs 146.2 million

The total number of cases classified as non-collectible debts and referred to the
Assessment Review Committee (ARC) increased from 260 in financial year 2021-22
to 267 in financial year 2022-23 with arrears amounting to Rs 134.8 million and
Rs 146.2 million, respectively. A total amount of Rs 84.7 million was outstanding since
the year 2018.

Court Cases - Rs 12.9 million

In four out of 14 cases with arrears totalling Rs 12.4 million, the decision of the Court was
still being awaited for more than ten years.

Receivership Cases - Rs 175.4 million

As of 30 June 2023, the total amount owed to Customs Department by entities under
receivership was Rs 175.4 million. It included Rs 169.6 million due by two companies only.

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MINISTRY OF FINANCE, ECONOMIC PLANNING AND DEVELOPMENT
Root Cause

The loopholes in the current regulatory framework, along with the lengthy enquiry and
processing time, were hindering the Customs Department from maximising collections
from the arrears.

Recommendations

The Customs Department should:

carry out a thorough analysis of its current system of managing arrears by


identifying and collecting relevant data on the regulatory loopholes and the factors
causing the lengthy enquiry and processing time; and

thereafter engage with the policymakers to discuss the problem and find an effective
solution to address the loopholes in the current regulatory framework and streamline
its procedures with the aim of maximising collections from arrears;

The MRA should consider empowering its Legal Services Department in effectively
dealing with cases involving arrears.

MRA’s Response

MRA Customs will propose amendments to Customs Laws by imposing penalty for any
objection to be made at OADRD/ARC in order to prevent frivolous objections/appeal.

Excise Unit

The Excise Unit collected a total amount of excise duty of Rs 21 billion for the financial
year 2022-23.

Excise duty on Tobacco Products - Rs 7.2 billion

To discourage the consumption of tobacco, there have been progressive 2 increases in excise
duty rates for cigars, cigarillos, and cigarettes as shown in Table 9-14.

Table 9-14 Increase in Rates of Excise Duty on Tobacco Products

Items Effective Date 3


12-June-21 08-June-22 03-June-23
Rs Rs Rs
Cigars (per kg) 19,430 21,373 23,510
Cigarillos (per thousand) 11,345 12,480 13,728
Cigarettes (per thousand) 5,625 6,188 6,807

Source: Annex to Budget Speeches

2
Extract from National Budget speeches 2021-22, 2022-23 and 2023-24. The increase in rates of excise duty on tobacco
and alcoholic products for the financial years 2021-22, 2022-23 and 2023-24 were announced on 11 June 2021, 07 June
2022 and 02 June 2023 respectively.
3The increase in the rates of excise duty was effective from the date following the National Budget Speech.

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MINISTRY OF FINANCE, ECONOMIC PLANNING AND DEVELOPMENT
Total excise duty collected from the importation of tobacco products increased from
Rs 6.3 billion to Rs 7.2 billion in the financial years 2021-22 to 2022-23.

As at 30 June 2023, seven major importers of tobacco products were registered with MRA,
of which, two contributed some Rs 6.73 billion, representing 93.1 per cent of the total excise
duty collected.

Findings

The following shortcomings were noted from an analysis of records relating to goods
ex-warehoused by the two main importers for the financial years 2021-22 and 2022-23.

During the financial year 2022-23, except for the months of May and June, the two
importers ex-warehoused a monthly average of 90 million sticks of cigarettes.
However, in May 2023, some 260 million sticks of cigarettes, an abnormally larger
quantity than the monthly average, were removed by the two importers from their
bonded warehouses.

Subsequently, in June 2023, in the run-up to the National Budget Day, some 32 million
sticks of cigarettes, were removed from the warehouses of the two importers.

Both importers used the same practice in the financial year 2021-22. Some 183 million
sticks of cigarettes, compared to a monthly average of 90 million sticks, were cleared
in May 2022 and 87 million sticks in June 2022 prior to the National Budget Day. Some
12 million sticks were ex-warehoused in June 2022.

For the financial years 2021-22 and 2022-23, the total revenue forgone from both importers
is estimated to be some Rs 58.4 million and Rs 79.4 million, inclusive of VAT, that is a
total of Rs 137.8 million.

Root Cause

There was no forestalling restrictions imposed on clearances of excisable goods,


particularly, cigarettes, in the run-up to the National Budget Day, before the increase in
excise duty rate as there were no provisions in the Customs and Excise Act to prevent this
practice.

Recommendation

Customs Department should consider imposing restrictions on clearing a large quantity of


excisable goods, mainly, cigarettes in the run up to the National Budget Day by introducing
anti-forestalling rules to secure higher margins in excise collection as is the practice in the
UK and South Africa.

MRA’s Response

There are no provisions in the Customs or Excise legislations that empower MRA Customs
to impose such restrictions on clearance of excisable goods. The MRA, as an agent of the
Government, is responsible to implement policy decisions and as such, this is an issue for
policy to decide upon.

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MINISTRY OF FINANCE, ECONOMIC PLANNING AND DEVELOPMENT
Petroleum Products - Arrears in Excise Duty

During the financial year 2022-23, excise duty collected from petroleum products totalled
some Rs 4.3 billion. According to Section 8(2) of the Customs Act, the importer has a period
of 30 days from the date of importation of such products to pay excise duty and taxes.

Findings

An amount of some Rs 460 million due by a major importer of petroleum products, in


respect of fuel already discharged, but not paid as at 30 June 2023, was disclosed in the
Return of Arrears of Revenue. However, the importer confirmed to NAO that an
amount of some Rs 752 million, in respect of Petroleum Products and Liquified
Petroleum Gas was due to the Customs Department as at 30 June 2023. A discrepancy
of some Rs 292 million was noted.

The amount due by the importer was not accounted for in the Return of Arrears of
Revenue submitted to the Accounted General by MRA. It was, instead, disclosed as a
note.

The accuracy and completeness of the amount disclosed in the Statement of Arrears of
Revenue could not be ascertained.

Root Cause

The Customs Department did not follow good accounting practice in recognising the correct
amount due by the importer in the Statement of Arrears of Revenue.

Recommendation

The Customs Department should investigate the discrepancy of Rs 292 million and should
recognise the total amount of Rs 752 million due as at 30 June 2023 in the Statement of
Arrears of Revenue in accordance with good accounting practice.

MRA’s Response

The discrepancy has been investigated. The total amount due by the importer was some
Rs 776 million instead of Rs 752 million. The difference of some Rs 24 million represented
excise duty, MID levy and VAT on customs declaration validated on 30 June 2023 and
removed from bond on 03 July 2023.

Excise Duty on Sugar Sweetened Products

Gross Excise duty collected on Sugar Sweetened Products (SSPs) amounted to some
Rs 823.1 million during the financial year 2022-23, of which Rs 641.3 million were from
local manufacturers and Rs 181.8 million from importers.

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MINISTRY OF FINANCE, ECONOMIC PLANNING AND DEVELOPMENT
Findings

Lapses in Monitoring of Excise Duty collected from Local Manufacturers of SSPs

Out of the Rs 641.3 million of Excise duty collected from 52 local manufacturers of SSPs,
some 84 per cent (Rs 541.2 million) were from two main local manufacturers. However,
during financial year 2022-23 the two manufacturers were not subject to Post Clearance
Audits (PCAs).

For the remaining manufacturers, representing 16 per cent of duty, several discrepancies
such as incomplete records and inaccurate returns were noted during PCAs. In August
2023, a claim amounting to Rs 461,459 was issued to one local manufacturer registered
with MRA since the year 2016, following the PCA covering the period July 2021 to June
2023. No PCA was conducted prior to year 2021.

During the financial year 2022-23, the Internal Audit Division of MRA did not carry out an
audit exercise on the administration and collection of Excise duty on SSPs at the Customs
Department to evaluate and improve the effectiveness of risk management, control and
governance processes.

Root Cause

The Customs Department did not plan to conduct PCAs at the two main local manufacturers
and the Internal Audit Division did not plan to carry an internal audit on the administration
and collection of Excise duty on SSPs during the financial year 2022-23.

Recommendations

The Customs Department should plan to conduct PCAs at the two main local
manufacturers of SSPs to mitigate the risk of foregoing revenue instead of relying only
on monthly returns, for the collection of excise duty on SSPs.

The Internal Audit Division of MRA should conduct an audit exercise to evaluate the
effectiveness of the internal controls and propose additional safeguards to timely detect
and prevent under-declaration of Excise duties on SSPs.

MRA’s Response

The Excise Section works in collaboration with the PCA Unit and all information
relating to returns and payments effected are communicated for audit purposes. The
Unit carries audit mostly for importers as prescribed under Section 25B (7) of the
Customs Act.

An Audit exercise has been included in the 2023-24 Internal Audit Action Plan.

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MINISTRY OF FINANCE, ECONOMIC PLANNING AND DEVELOPMENT
Excise Duty on PET (Polyethylene Terephthalate) Bottles and Other Plastic Products

Since the year 2006, the Excise Unit has been collecting duty of Rs 2 on every PET bottle
containing waters, aerated waters, including natural or artificial mineral waters, and aerated
waters, amongst others.

The Customs Department collected Excise duty of some Rs 246.4 million on PET and other
plastic products during the financial year 2022-23. It included a total amount of some
Rs 243.4 million and Rs 2.1 million from local manufacturers and importers of PET
products respectively.

According to the Customs Department, there were five registered local manufacturers and
38 importers of PET bottles containing waters, aerated waters, including natural or artificial
mineral waters, and aerated waters, amongst others as of 30 June 2023.

Findings

Percentage of Deficit not specified

A percentage of deficit on defects is allowed when preforms are transformed into PET
products. The deficit allowable was not stated in Customs Procedures.

MRA’s Response

Necessary amendments will be brought to the Excise Regulations in the forthcoming


proposals to the Budget 2024-25.

No Reconciliation Exercise between Imported Preforms by Importers and PET


Bottles produced

A reconciliation exercise between imported Preforms by importers and excisable PET


bottles produced by local manufacturers was not carried out as they were subject to control
by two different units, namely the Compliance and Excise Units.

MRA’s Response

Monthly returns submitted by manufacturers of SSPs and bottlers of water are reconciled
with database maintained by each manufacturer. The database which is another check
mechanism in place, contains information related to all bills of entry (warehoused and ex-
warehoused) lodged by the manufacturers. For any anomaly noted, the manufacturer is
queried for appropriate action.

Insufficient Post-Clearance Audits on Excisable PET Bottles

A Post-Clearance Audit (PCA) is an essential tool used to provide assurance that Customs
declarations have been completed in compliance with legal requirements. Although 92 per
cent of total revenue on excisable PET bottles, amounting to some Rs 226 million, were
collected from two main local manufacturers, no PCA was carried out thereat.

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MINISTRY OF FINANCE, ECONOMIC PLANNING AND DEVELOPMENT
For the remaining manufacturers representing eight per cent of total duty collected, the
following discrepancies were noted during a PCA carried out at the premises of one of
them:

The manufacturer has been a registered bottler of water at Customs Department


since December 2017 and holds a licence permitting the exploitation and use of
groundwater. Following the PCA conducted in year 2022, two Notices of
Underpayment were issued to the manufacturer in March and April 2023,
respectively. As of 30 June 2023, the amount due by the company in respect of
excise duty and taxes including penalty and interest totalled Rs 10.9 million.

Underpayments detected by the PCA prior to January 2020 could not be claimed as
Section 7A (1) of the Customs Act states that:

“Notwithstanding section 24A and any other customs law, the Director-General
shall not, in relation to the liability of a person to pay any amount of duty, excise
duty and taxes-

(a) require any information or return; or

(b) make any assessment or claim,

under the customs laws in respect of a validated bill of entry passed before a
period of 3 years, unless, in the opinion of the Director-General, he is satisfied
that there is prima facie fraud.”

Inadequate Control on Monthly Returns

The two main local manufacturers producing diverse range of products submit monthly
returns relating to PET bottles and SSPs to the Customs Department. From an examination
of the returns, it was noted that information relating to Preforms, such as opening stock of
pump bottles, filled up bottles, defects amongst others, which is important to assess the
accuracy and completeness of PET bottles produced and sold, was not included in the
monthly returns. The completeness and accuracy of excise duty collected on PET bottles
could not be ascertained.

Root Cause

The risks relating to excisable PET bottles were not properly managed at Customs
Department. The PCA focused on those local manufacturers accounting for eight per cent
of total revenue.

Recommendations

The Excise Unit should:

ensure that preliminary controls on local manufacturers of excisable PET bottles are
working effectively. The PCA Unit should act as an additional safeguard;

ensure that the recommendations of the PCA unit are properly followed up;

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MINISTRY OF FINANCE, ECONOMIC PLANNING AND DEVELOPMENT
properly manage risks relating to excisable PET bottles;

perform additional checks on the records of the local manufacturers to ensure the
accuracy and completeness of the figures declared on their monthly returns; and

carry out surveys on a rotational basis.

MRA’s Response

PCA is carried out on selected importers based on risk assessment. Recommendations of


PCA are already taken into consideration whereby appropriate entry for selections are
inserted in Customs Management System for targeting purposes. A team has been created
for excise audits.

9.2.10 Follow-up of Matters Raised in the Audit Report 2021-22

A follow up of matters raised in the Audit Report for the financial year 2021-22 was carried out.
The Customs Department was requested to inform the National Audit Office of the actions that
have been taken to address the findings and recommendations in the Report. The information
along with evidence collected through review of files and documents were assessed and
discussed with the Customs Department.

The status on actions taken on findings since the publication of the Audit Report are summarised
below. Out of 15 findings, four (27 per cent) have been resolved, two (13 per cent) have been
partially resolved and nine (60 per cent) have not been resolved.

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MINISTRY OF FINANCE, ECONOMIC PLANNING AND DEVELOPMENT
SN Findings MRA’s Response – NAO
Status as at Comments
18 January 2024
Arrears of Revenue
1 Customs Department did not recover A PSV licence for the third
arrears of Rs 815,000 due to the wrong bus only produced and it was
Resolved
classification in the importation of three decided not to proceed further
buses. with the matter.
(Pg 199, Para 9.3.5)
2 As of 30 June 2022, a total amount of One claim amounting to
Rs 1,236,976 relating to two claims Rs 33,940 was settled and for
issued in May and July 2021 to a the second, the Company
Company for underpayment of VAT, brought to account customs,
Resolved
penalties and interests, was still due. excise duty and tax of
(Pg 200, Para 9.3.5) Rs 862,475 and requested
waiving of penalties and
interest due.
3 Detected under-declaration of costs on The case was still at ARC
33 BOEs for the period February 2018 fixed for Hearing on
to May 2020 despite the Company was 16/02/2024. Not Resolved
importing the goods since April 2016.
(Pg 200, Para 9.3.5)
As of 30 June 2022, the arrears of Book and records have been
4 revenue included duties totalling updated and same has been
Rs 17.7 million relating to the reflected in Statement of Partially Resolved
undervaluation of cars in five cases Arrears of Revenue as at Dec
referred to the Police Service since 2022.
2015. DPP advised no further action in
two cases.
(Pg 202, Para 9.3.5)
Lapses in the Control of Excise Stamps (Page 203)
5 The serial number of excise stamps For cigarettes more than 95
returned as spoiled/damaged to the per cent of damaged excise
Customs Department was neither stamps are torn or defaced and
recorded in the Register nor included in the serial number is hardly Not Resolved
the quarterly returns submitted by the readable.
importers.
(Pg 204, Para 9.3.6)
6 There was no documentary evidence on It is not feasible to carry out
whether the Customs Department stocktaking exercise of Excise
caused a stocktaking of excise stamps stamps issued to
Not Resolved
as required by the Regulations. manufacturers who are based
(Pg 204, Para 9.3.6) abroad.

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MINISTRY OF FINANCE, ECONOMIC PLANNING AND DEVELOPMENT
SN Findings MRA’s Response – NAO
Status as at Comments
18 January 2024
Arrears of Revenue

7 In 2021-22, a major importer of Documentary control is


cigarettes had a total of some 1.5 carried on a monthly and
million of spoiled/damaged excise quarterly basis to ascertain the
stamps and their serial numbers were movement and stock of excise Not Resolved
not known. stamps. Damaged excise
(Pg 204, Para 9.3.6) stamps are physically checked
and counted by the respective
officers when returned by
Excise Operator.
Inadequate Monitoring of Activities of One Importer of Cigarettes (Page 204)
8 The bonded warehouse of one importer Management decision was
was under the control of the Excise Unit taken in 2010 to transfer the
instead of the Bond Unit. day-to-day management of the Not Resolved
(Pg 205, Para 9.3.6) bonded warehouse from Bond
Unit to Excise Section.
9 The Customs Department did not have As from 16 March 2023,
online access to the CCTV system and Customs has access to the
the computerised records for this CCTV system and the
bonded warehouse as required by computerised records of the Resolved
Customs Act. Bonded warehouse.
(Pg 205, Para 9.3.6)
10 Stocktake certificates of goods for the A copy stocktake certificate
last three years ending 31 December for the year ending 31
2021 were not submitted to the Customs December 2022 was submitted
Department by the Company in on 31 January 2023. Resolved
accordance with Customs Regulations.
(Pg 205, Para 9.3.6)
Excise Duty on Sugar Sweetened Products (SSPs)
Insufficient Control on Licensing (Page 206)
11 In 2021-22, 22 local manufacturers of No site visits carried out at the
(SSPs) were operating without a licence. premises of manufacturers
(Pg 206, Para 9.3.7) operating without a licence as
Not Resolved
there were no mention of the
manufacturer’s name / address
in the labels of the SSP
products.

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MINISTRY OF FINANCE, ECONOMIC PLANNING AND DEVELOPMENT
SN Findings MRA’s Response – NAO
Status as at Comments
18 January 2024
12 No action was even taken by the Customs The retailers were verbally
Department as per Section 40 (1) (a) of the instructed to remove the
Excise Act against the 22 manufacturers products from shelves and
for selling SSPs without holding any refrain from selling products
licence. from unregistered Not Resolved
(Pg 206, Para 9.3.7) manufacturers and to consult
the list of licenced
manufacturers published on
the MRA website.

Insufficient Control on Document Certifying Sugar Content (Page 206)


13 The documents submitted by the local Pursuant to regulation 33A,
manufacturers dated more than five years. where a SSP is put for home
Despite this fact and limitations expressed consumption for the first
by Government Analyst Division (GAD), time, where there is a
the documents were used to ascertain the change in the sugar content
accuracy of excise duty collected. of a SSP or when the
(Pg 206, Para 9.3.7) Director-General has Not Resolved
suspicion on the accuracy of
the sugar content of the SSP,
a document certifying the
sugar content of the sugar
sweetened product has to be
submitted.
14 During financial year 2021-22, the No reply
Customs Department did not take any
sample of SSPs from the local
manufacturers for the GAD to carry out Partially Resolved
analysis of sugar content.
(Pg 207, Para 9.3.7)

15 No quarterly stocktaking of the excisable Excise visits at the premises


goods at local manufacturers of SSP was of manufacturers of SSPs
carried out as required by the Excise are scheduled twice a year.
Regulations. Not Resolved
(Pg 207, Para 9.3.7)

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MINISTRY OF FINANCE, ECONOMIC PLANNING AND DEVELOPMENT
9.3 CORPORATE AND BUSINESS REGISTRATION DEPARTMENT
9.3.1 Revenue Management

During the financial year 2022-23, collection of fees in respect of Company Licences, Fines
and Incorporation Lodging Fees and Others totalled some Rs 216 million and arrears
totalled some Rs 113 million as of 30 June 2023.

Findings

Completeness and Accuracy of Revenue

Audit of revenue for the financial year 2022-23 revealed that the Corporate and Business
Registration Department (CBRD) had not initiated any corrective action in respect of the
shortcomings mentioned below, which were raised in the Audit Reports for the financial
years 2019-20, 2020-21 and 2021-22.

(a) Revenue collected as per the Companies and Businesses Registration Integrated
System (CBRIS) and Treasury Accounting System (TAS) did not tally.

(b) Debtors’ accounts not updated.

(c) Significant increase in the number of skipped receipts over the years.

(d) Slow recovery of arrears and debts written off.

Hence, the completeness and accuracy of revenue collected and the arrears figure in respect
of the financial year 2022-23 could still not be ascertained.

Discrepancies in Revenue Figures

During the financial year 2022-23, the revenue collected figures as per CBRIS and those of
Adjusted TAS were reconciled and a difference of Rs 615,346 was noted. The monthly
differences ranged from negative Rs 146,900 to positive Rs 57,300.

Debtors Accounts not Updated

During the financial year 2022-23, refunds of some Rs 1.5 million, representing overpaid
fees by debtors were effected through TAS. However, these were not updated in the
respective debtors’ accounts in CBRIS due to the unavailability of a module in the system.

Significant Increase in the Number of Skipped Receipts

As per the CBRIS report, revenue collected for the financial year 2022-23 totalled some
Rs 835 million.

Some 203,098 receipts were deemed to have been issued for 264,096 payments
effected by different entities as per the three reports, namely Daily Cash, e-Payment
(YRF) and e-Payment (Excluding YRF) CBRIS.

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MINISTRY OF FINANCE, ECONOMIC PLANNING AND DEVELOPMENT
The large gap of some 61,000 could not be explained, hence, the reports generated from
CBRIS could not be relied upon.

A significant increase of 44,568 in the number of skipped receipts was noted, that is,
from 28,947 to 73,515 for the financial years 2021-22 and 2022-23 respectively.

Root Causes

CBRIS was implemented in the year 2006 and despite undergoing several
enhancements over the years, the issues mentioned above have remained unresolved.

The Service Provider was having difficulty in addressing the system to provide an
appropriate debtors module.

The Accounting Officer has not effected a proper follow-up of the issues on revenue
previously reported upon.

Payments were not loaded in real-time and online payments resulted in skipped receipts
due to slow connectivity.

Recommendations

The Accounting Officer should take corrective action to address the deficiencies in
revenue and debtors’ management.

The Service Provider should be requested to investigate into the discrepancies in


CBRIS and take appropriate action to resolve the matter at the earliest.

Department’s Response

The discrepancy is due to a timing difference. The Service Providers are investigating
the shortcomings and all will be considered while implementing the new CBRIS 3.0.

No report could be generated due to the unavailability of a module in CBRIS.

The Service Provider was again requested to address the issue of skipped receipts and
a meeting was held on 17 January 2024 in this respect. This issue will also be
considered with the new CBRIS 3.0.

9.3.2 Slow Recovery of Debts and Debts Written Off

Arrears of revenue for Registration Fees totalled some Rs 113 million as at 30 June 2023.
The Department had recourse to the issue of reminders and compounding exercises for
recovery. Hence, revenue management continues to be a high-risk area for CBRD, mainly
due to the non-implementation of other more effective debt recovery mechanisms and
proper follow-up actions.

The arrears of revenue ranged from Rs 79 million to Rs 364 million from the years
2011 to financial year 2022-23 as shown in Table 9-15.

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MINISTRY OF FINANCE, ECONOMIC PLANNING AND DEVELOPMENT
An analysis of the shortcomings highlighted in the Audit Reports from the year 2011
to the financial year 2022-23, revealed that there were no major improvements in the
recovery of debts and no new mechanisms to recover the outstanding amounts were
introduced.

The decrease in the arrears figures over these years was mainly attributed to the
write-off of debts totalling some Rs 476 million, thus entailing a significant loss of
revenue to the Government. Arrears figures over the last 13 years and the respective
amounts written off and recovered are given in Table 9-15.

Table 9-15 Arrears, Write Off and Recovered Amounts

Arrears as at Arrears Ensuing Financial Period


Write off Recovered
Rs million Rs million % Rs million %
31 Dec 2011 323 - - 7 2.2
31 Dec 2012 364 164 45 40 11.0
31 Dec 2013 234 53 23 14 6.0
31 Dec 2014 229 90 39 11 4.8
30 June 2015 155 - - 8 5.2
30 June 2016 167 47 28 8 4.8
30 June 2017 134 65 49 9.4 7
30 June 2018 79 12 15 2 2.5
30 June 2019 91 15 16 7 7.7
30 June 2020 99 - - 13.5 13.6
30 June 2021 110 - - 9.5 9.6
30 June 2022 125 30 24 9.4 7.5
30 June 2023 113 - - - -
Total 476 138.8

Source: Audit Reports

The rates of recovery were low and ranged from 2.2 to 13.6 per cent of the total arrears
over the 13 years.

The amount written off and the total debts recovered from the year 2011 to
30 June 2023 totalled some Rs 476 million and Rs 138.8 million respectively. The
amount written off outweighed the amount recovered.

Delay was also noted in the issue of reminders to the defaulting entities.

Department’s Response to Shortcomings Previously Highlighted in Audit Reports

A Monitoring Committee had been set up to ensure that fees due were collected and
compounding of offences for non-payment were resorted to. However, as of October
2023, the Monitoring Committee was not set up.

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MINISTRY OF FINANCE, ECONOMIC PLANNING AND DEVELOPMENT
Compounding of offences remained a very effective and efficient means of recovering
arrears, since it reduced arrears of revenue significantly.

However, the decrease in arrears was mainly due to write-off.

All avenues had been explored and the recovery rate was well beyond its control.

No new measures were put in place to expedite recovery of arrears.

Procedures for debt recovery were properly monitored and unless the law is changed,
this office would have to comply with the strict procedures contained therein. As of
December 2023, no amendments were seen in this respect.

Root Cause

No corrective action had been taken by the Accounting Officer over the years to maximise
debt recovery.

Recommendations

The Accounting Officer has to take prompt action to recover debts and explore other
viable avenues to recover arrears.

A Monitoring Committee should be set up at the earliest to identify the reasons for non-
payment and to take action accordingly.

Procedures should be reviewed and a more robust mechanism should be developed and
implemented to minimise loss of revenue.

Department’s Response

Compounding of offences being a very efficient system of recovery has reduced arrears
of revenue significantly.

A formal Monitoring Committee will be set up.

9.3.3 Arrears of Revenue

Age Analysis-Upward Trend in Arrears

The age analysis of arrears of revenue as of 30 June 2023 is shown at Table 9-16.

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MINISTRY OF FINANCE, ECONOMIC PLANNING AND DEVELOPMENT
Table 9-16 Age Analysis of Debtors

Financial Years Amount Due (Rs million)


Fees Fines Total %
Up to 30 June 2019 29.8 14.6 44.4 39.4
2019 – 20 6.6 3.4 10.0 8.9
2020 – 21 10.2 5.2 15.4 13.6
2021 – 22 11.1 5.5 16.6 14.7
2022 – 23 17.6 8.7 26.3 23.4
Total 75.3 37.4 112.7 100.0
Source: Debtors Age Analysis CBRIS report

As at 30 June 2023, out of a total of Rs 113 million, some Rs 44 million, representing


39 per cent of total arrears of revenue, relate to years prior to 1 July 2019. The arrears figure
has been on an upward trend since the financial year 2019-20, as shown in Table 16 above.

Debtors Listing not Available

According to the Return of Arrears of Revenue submitted to the Accountant General,


out of Rs 125 million outstanding as of 1 July 2022, only some Rs 9.4 million,
(7.5 per cent), being a balancing figure, were recovered during the financial year
2022-23, as shown in Table 9-17.

Table 9-17 Arrears of Revenue – Written off and Amount Recovered


Ensuing Financial Years
Years Arrears Write off Recovered
As at 1 July Rs million Rs million % Rs million %
2018 79 12.0 15.0 2.0 2.5
2019 91 15.0 6.5 7.0 7.7
2020 99 - - 13.5 13.6
2021 110 - - 9.5 8.6
2022 125 29.5 23.6 9.4 7.5
2023 113 - - - -
Source: Returns of Arrears of Revenue

A detailed list of debtors to substantiate the figure of some Rs 26 million in the Return
of Arrears of Revenue and Rs 9.4 million recovered for the financial year 2021-22 was
not available for verification. Hence, the completeness of debtors could not be
ascertained.

Root Cause

The Accounting Officer has not taken appropriate action to replace the old version of
CBRIS.

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MINISTRY OF FINANCE, ECONOMIC PLANNING AND DEVELOPMENT
Recommendations

Necessary action should be taken to have a comprehensive CBRIS.

Monitoring of debtors should be strengthened to ensure timely recovery of debts.

Department’s Response

All avenues have been explored to recover all arrears of revenue.

New reports on the list of debtors and appropriate modules will be included in the new
CBRIS 3.0 to enable a more efficient monitoring of all arrears of revenue.

9.3.4 Trade Fees

Following an amendment to the Local Government Act (LGA) in 2019, CBRD started
collecting trade fees on behalf of the Local Authorities (LAs) as from January 2020.

Findings

Collection of Trade Fees-Unexplained Differences

During the financial year 2022-23, the amounts collected, as per CBRIS and TAS, were
some Rs 410 million and Rs 414 million respectively. An unexplained difference of some
Rs 4 million was noted.

Debtors Listing not Available on the Current Platform

Since the year 2020 to date, detailed lists of debtors have not been generated from
CBRIS. The debtors figure was not known and hence, LAs have been unable to raise
claims for non-payment. Extraction of the debtors list from the database would entail
an additional intervention cost from the Service Provider, which would have to be met
by CBRD.

Failure to issue claims to business operators who did not settle the amount due
represented a loss of revenue to LAs.

Non-payment of trade fees implies that the business is operating illegally.

Root Causes

Payments made online were not loaded on CBRIS on a real-time basis.

Incompatibility in IT systems of LAs (Ebiz) and CBRD (CBRIS).

Recommendation

CBRD and LAs should use a common IT platform for CBRD to curtail additional costs
charged by the Service Provider for each intervention.

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MINISTRY OF FINANCE, ECONOMIC PLANNING AND DEVELOPMENT
Department’s Response

Inability to update database due to incompatibility between IT systems operated by


LAs and CBRD.

CBRD has provided training on access to CBRIS to all LAs from 6 to 16 November
2023.

9.3.5 Service Delivery- Low Electronic Payments of Trade Fees

CBRD offered services such as:

(i) Access to a centralised source of information;

(ii) Provision of Online Facilities;

(iii) Provision of copies of documents;

(iv) Collection of Annual Registration Fees; and

(v) Collection of classified trade fees on behalf of LAs.

Payment of fees may be effected either by attending cash office or online.

During the financial year 2022-23, some Rs 410 million were collected from 64,907
business operators.

Finding

Out of the 64,907 business operators, only 23,398 effected payments through the online
system, representing some 36 per cent, which is low.

Root Cause

The Accounting Officer did not carry out intensive sensitisation campaign.

Recommendations

The Accounting Officer and LAs have to sensitise the business operators to adopt the
online payment modes due to their convenience and speed.

The Accounting Officer should consider introducing incentives, to encourage online


payment.

Department’s Response

LAs have already been requested to sensitise the business operators to effect payments
online.

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MINISTRY OF FINANCE, ECONOMIC PLANNING AND DEVELOPMENT
9.3.6 Non-Renewal of Lease Agreement

CBRD occupies the following office spaces rented from different lessors in the One
Cathedral Square Building:

(i) Company A (Lower Ground Floor, Ground Floor, 3rd level & 13th level);

(ii) Company B (5th Floor) ; and

(iii) Company C (11th Floor).

During the financial year 2022-23, rent paid totalled some Rs 19.6 million.

Finding

The lease agreement with Company B for the rental of office space in respect of both wings
on level 5, which expired on 31 March 2020, was not renewed and rent was paid on a
month-to-month basis.

Without a valid and duly signed lease agreement, the Department faces the risk of not
having any specific remedies in case of an order by the landlord to vacate the building any
time, without prior notice or compensation for any damages caused to the Department’s
assets.

As of 17 October 2023, the lease agreement was still not renewed.

Root Cause

No proper monitoring was done by the Office Management Executive responsible for
managing office accommodation.

Recommendation

Lease Agreements should be finalised to avoid uncertainty as to occupation and possible


future disputes.

Department’s Response

The lease agreements with Company B for the periods 01 April 2020 to 31 March 2023 and
1 April 2023 to 31 March 2026 for both wings of Level 5 have not yet been signed.

9.3.7 Non-Renewal of Fire Certificates

Section 19 (1) of the Mauritius Fire and Rescue Service Act 2013, requires that the owner
of such premises as may be prescribed shall apply to the Chief Fire Officer for a fire
certificate in relation to the premises, which certifies that all safety requirements have been
met in relation to those premises and no premises shall be occupied or used unless the owner
has been issued with a fire certificate.

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MINISTRY OF FINANCE, ECONOMIC PLANNING AND DEVELOPMENT
The absence of fire certificates for buildings used for the provision of services to the public
represents an important risk for Government in not meeting safety standards.

Finding

Fire Certificates which expired on 28 October 2021 were not renewed as of November 2023
for CBRD offices.

Root Cause

No proper monitoring was done by the Office Management Executive responsible for
managing office accommodation.

Recommendation

CBRD should ensure that the premises occupied have valid fire certificates to ensure the
safety of staff and the public.

Department’s Response

The owner of One Cathedral Square Building has applied for a valid Fire Certificate on
13 September 2023.

9.3.8 Risk Management Framework – Not yet developed

In December 2021, the Ministry of Finance, Economic Planning and Development


(MoFEPD) issued a circular regarding the establishment of Risk Management (RM) in the
Public Sector.

In view of facilitating the process, MoFEPD developed Guidelines for the establishment of
a RM Framework in Ministries/Departments. According to the Guidelines, the Accounting
Officer is accountable for the overall governance and has the ultimate responsibility for
RM.

Findings

The RM policy had not yet been implemented as there was no staff holding the
necessary expertise to carry out a risk assessment.

The time frame for implementation of RM was not set.

Root Cause

The Accounting Officer did not initiate action to implement the RM Framework.

Recommendations

A time frame should be set for the implementation of the RM Framework.

Circular No. 8 of 2021 on Guidelines for establishment of RM in the Public Sector


should be complied with.
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MINISTRY OF FINANCE, ECONOMIC PLANNING AND DEVELOPMENT
Department’s Response

The delay for non-implementation of the framework is beyond the control of the
Department as no training was provided by the Internal Control Unit of MoFEPD following
requests made.

9.3.9 Follow-up of Matters Raised in the Audit Report 2021-22

A follow up of matters raised in the Audit Report for the financial year 2021-22 was carried
out. CBRD was requested to inform the National Audit Office of the actions that have been
taken to address the findings and recommendations in the Report. The information along
with evidence collected through review of files and documents were assessed and discussed
with the Department.

The status on actions taken on findings since the publication of the Audit Report are
summarised below. Out of four findings, one has been partially resolved (25 per cent) and
three have not been resolved (75 per cent).

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MINISTRY OF FINANCE, ECONOMIC PLANNING AND DEVELOPMENT
SN Findings CBRD’s Response – NAO
Status as at January 2024 Comments
Revenue Management – Absence of Proper Records (Page 209)
Deposit Account - Trade Fees
1 Discrepancies in Trade Fees figures: Part of the difference could be
Unexplained difference of Rs 2.6 the payment of trade fees, not
million between detailed lists provided accounted on the system as
by CBRD and Treasury Abstract there is no module for Limited Not
System (TAS) as at 30 June 2022. Liability Partnership (LLP). Resolved
(Pg 209, Para 9.4.1(a)) New Module for LLP is being
taken up with SIL.

2 Inability to update database due to CBRD has provided training


incompatibility between IT systems on access to CBRIS to all LAs
Partially
operated by the Local Authorities from 6 to 16 November 2023.
(Ebiz) and CBRD (CBRIS). Resolved
(Pg 209, Para 9.4.1(a))
Deposit Account - Foreign Registration Fees (Page 210)

3 Unreconciled Difference: For the Department’s Response


financial year 2021-22, difference of Differences between TAS and
some Rs 8 million between TAS and CBRIS were due to:
CBRIS could not be explained.
(i) Payments made online
(Pg 210, Para 9.4.1(b)) were not loaded on
CBRIS on a real time
basis.
(ii) The issue is also with the Not
conversion rate of US$ to Resolved
Mauritian rupees.
(iii) SIL and MNS are
investigating the possible
causes of payment not
loaded timely in CBRIS
and this will be
considered in the new
CBRIS 3.0.
4 27 deposit accounts totalling some The amount of Rs 7.7 million
Rs 7.7 million which remained relates to ‘Companies Special
unclaimed for more than five years Deposit Account’ pursuant to
Not
were not transferred to revenue. These Section 315(3A) of the
included two companies which have Companies Act and cannot be Resolved
changed their names and 13 defunct transferred to revenue.
companies.
(Pg 210, Para 9.4.1(b))

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MINISTRY OF FINANCE, ECONOMIC PLANNING AND DEVELOPMENT
226
MINISTRY OF FINANCE, ECONOMIC PLANNING AND DEVELOPMENT
9.4 REGISTRAR-GENERAL’S DEPARTMENT
9.4.1 Improving Service Delivery

The Mauritius e-Registry System (MeRS) has improved its service delivery and caters for
a complete online system ranging from submission of documents, payments, and retrieval
of registered documents.

Limited Accessibility to the Online Search

Remote Search in MeRS access is available from 8.00 am to 6.30 pm on weekdays by major
stakeholders, namely notaries, banks, land surveyors, insurance companies and several
public sector agencies upon request, for a monthly fee of Rs 2,000.

Finding

Access to online search on MeRS between 8.00 am to 6.30 pm might cause inconvenience
to stakeholders.

Root Cause

The online module did not cater for search beyond normal working hours.

Recommendation

In order to meet the increasing demands of its stakeholders, the Registrar-General’s


Department (RGD) should consider extending the search hours to a 24/7 basis.

Department’s Response

Enhancement of the search module to further extend the search hours is underway and will
be implemented during the financial year 2023-24.

Delay in the Implementation of an Online One-Stop-Shop

In line with Government Strategy towards the digitalisation of services both at National
Land Transport Authority (NLTA) and RGD, an online registration system was being
developed by NLTA at the premises of RGD since 10 August 2020.

This required data for the registration of motor vehicles to be retrieved in real-time from
the Civil Status Division, Ministry of Commerce and Consumer Protection, Mauritius
Revenue Authority-Customs Department, NLTA and the Corporate and Business
Registration Department through an InfoHighway Platform.

The initial project completion date of June 2023 was rescheduled to June 2024. The
outcome of the project would be the delivery of a seamless and faster service, eliminating
the need for stakeholders to physically visit different offices as all information will be
available online. Memorandum of Understanding (MOU) were to be signed by RGD and
the five organisations mentioned above.

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MINISTRY OF FINANCE, ECONOMIC PLANNING AND DEVELOPMENT
Findings

As of December 2023, due to the delay in completion of the project, the members of
the public had to queue up and wait for long hours at NLTA counters for applications
regarding ‘Certificat de Gage sans Deplacement’, before proceeding for registration at
RGD and for transfer of ownership.

The MOU defining the roles and responsibilities of each party to the project had still
not been signed.

Recommendation

The Accounting Officer of RGD should ensure that all parties sign the agreement as soon
as possible.

Department’s Response

The digitalisation of three of the five institutions which required the sharing of data
through the InfoHighway are delaying the project.

Long queue was due to delay in implementing the online service by NLTA.

All MOUs would be signed upon successful completion of the User Acceptance Test
by RGD.

9.4.2 Follow-Up of Matters Raised in the Audit Report 2021-22

A follow up of matters raised in the Audit Report for the financial year 2021-22 was carried
out. The RGD was requested to inform the National Audit Office of the actions that have
been taken to address the findings and recommendations in the Report. The information
along with evidence collected through review of files and documents were assessed and
discussed with the Department.

The status on actions taken on findings since the publication of the Audit Report are
summarised below. Out of five findings, one has been resolved (20 per cent), two have
been partially resolved (40 per cent) and two have not been resolved (40 per cent).

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MINISTRY OF FINANCE, ECONOMIC PLANNING AND DEVELOPMENT
SN Findings RGD’s Response – NAO
Status as of February 2024 Comments
Revenue Management – Slow Recovery of Debts and Other Issues (Page 211)
1 The arrears figure included: Approval for write off of some
Some Rs 159 million related to Rs 76 million is still being awaited.
42 debtors owing more than Rs 1
million each. The debtors figure
included Rs 2.6 million in
respect of time barred debtors
and Rs 72 million in respect of
companies which were defunct
or in process of winding up. Partially
Rs 24 million- amount due in Resolved
respect of debtors whose taxes
were either originally
underclaimed or reassessment
not carried out and Campement
Tax due totaling Rs 12 million
for more than ten years.
(Pg 211, Para 9.5.1)
Inadequate Follow Up of Debtors (Page 212)
2 During the financial year 2021-22, A meeting will be scheduled to
536 reminders were issued to the discuss the cases referred to
current year debtors only. Debtors MRA. Not
for previous years were not The implementation of the Resolved
requested to settle their debts. Valuation Roll is still being
(Pg 212, Para 9.5.1) awaited.
Cases Pending at the Assessment Review Committee (ARC) (Page 214)
3 Total collectible amount for
cases pending to be resolved at
ARC relating to period Jan
2017 to June 2022 was not
available.

Discrepancies were noted Removal of discrepancy is Partially


between the master database in progress for prior years. Resolved
kept in excel by the Valuation
Unit and the Mauritius e- The Status in MeRS has been
Registry System (MeRS) updated.
pertaining to ARC cases, as the
status was not updated in
MeRS.
(Pg 214, Para. 9.5.2)

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MINISTRY OF FINANCE, ECONOMIC PLANNING AND DEVELOPMENT
SN Findings RGD’s Response – NAO
Status as of February 2024 Comments

Loss of Revenue Due to Delays in Reassessment/Revaluation(Page 213)

4 Untraceable debtors totaling Officers do not have access to


some Rs 1.9 million for 30 other means to retrace the
cases could not be claimed as addresses of the untraceable
the notices sent were returned debtors unless empowered by the
undelivered. legislations.

Exploration of all avenues is


deemed to be carried out by the Not
Police Service who are
empowered to do so as it falls Resolved
under their purview.
No exercise was carried out
by the Valuation Department Reminders to Valuation Office
to reassess the market value of were sent during years 2023 and
the campement. 2024 to reassess the market value
(Pg 213, Para 9.5.1) of the campement. Reply is still
being awaited.
Inadequate Records (Page 214)

5 Inadequate records available for From July 2022, the balances as per
Home Ownership and Home and NRF and TAS were reconciled.
Loan Payment Schemes for
which the balances as per
National Resilience Fund (NRF) Resolved
and Treasury Accounting System
(TAS) were not reconciled.
(Pg 214, Para 9.5.1 )

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MINISTRY OF FINANCE, ECONOMIC PLANNING AND DEVELOPMENT
10 – MINISTRY OF ENERGY AND PUBLIC UTILITIES

10.1 Governance Issues – Non-compliance with Legislation

Provisions have been made in various legislations to impose a statutory responsibility on


Accounting Officers and Boards of Statutory Bodies with the objective of strengthening
accountability and transparency in the public sector.

Non-submission of Report on Performance

As of 18 December 2023, the Report on Performance of the Ministry of Energy and Public
Utilities for the financial year 2022-23 had not yet been submitted to the Ministry of
Finance, Economic Planning and Development, despite the statutory deadline being
31 October 2023.

Non-submission of Financial Statements for Audit

The Statutory Bodies (Accounts and Audit) Act requires the Chief Executive Officer of a
Statutory Body to submit the Annual Report, including Financial Statements, to the auditor
not later than four months after the end of every financial year.

As of 14 December 2023, the Utility Regulatory Authority (URA) falling under the aegis
of the Ministry of Energy and Public Utilities had not yet submitted its Financial Statements
for the financial year 2022-23 for audit.

Annual Reports not laid before the National Assembly

The Statutory Bodies (Accounts and Audit) Act requires a copy of the annual report and
audited accounts of every Statutory Body to be laid before the National Assembly at the
earliest opportunity.

As of 14 December 2023, the Central Water Authority, falling under the purview of the
Ministry of Energy and Public Utilities, had not yet laid its audited Financial Statements
for the financial years 2019-20, 2020-21 and 2021-22 before the National Assembly,
although they had been certified by NAO on 14 February 2022, 13 March 2023 and
22 November 2023 respectively.

Ministry’s Response

The Annual Report on Performance for the Financial Year 2022-2023 was approved
on 29 November 2023, due to delayed information received from parastatals on their
projects, but through oversight, was transmitted to the Ministry of Finance, Economic
Planning and Development on 30 January 2024.

According to URA, its unaudited Financial Statement for the financial year 2022-23
has been finalised and will be submitted for approval to the URA Board at its next
meeting.

The Central Water Authority (CWA) has submitted its Annual Report for financial
year 2019-2020 on 11 January 2024 and same has been processed for submission to
the National Assembly. Regarding the Annual Report of 2020-21 and 2021-22 which

231
will include the audited Financial Statements, the CWA has informed that same will
be submitted to the Ministry by latest April 2024 for tabling to the National Assembly.

NAO is of the view that the Ministry should exercise control over Statutory Bodies
operating under its aegis to ensure that they fulfil their statutory responsibilities regarding
the preparation of financial statements, their submission for audit and tabling before the
National Assembly.

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MINISTRY OF ENERGY AND PUBLIC UTILITIES
11 - MINISTRY OF SOCIAL INTEGRATION,
SOCIAL SECURITY AND NATIONAL SOLIDARITY
11.1 SOCIAL INTEGRATION DIVISION
11.1.1 Follow-up of Matters Raised in the Audit Report 2021-22

A follow up of matters raised in the Audit Report for the financial year 2021-22 was carried
out. The Social Integration Division (SID) was requested to inform the National Audit
Office of the actions that have been taken to address the findings and recommendations in
the Report. The information along with evidence collected through review of files and
documents were assessed and discussed with SID.

The status on actions taken on findings since the publication of the Audit Report are
summarised below. Out of four findings, one (25 per cent) has been resolved, one (25 per
cent) has been partially resolved and two (50 per cent) have not been resolved.

SN Findings SID’s Response – NAO


Status as at January 2024 Comments
Implementation of New Schemes – Issues with Certification of Claims (Page 221)

1 SID had disbursed some Rs 3.7 million to Remedial actions have been
NEF on certified claims that did not taken and issues addressed
include the Social Register of Mauritius accordingly. Resolved
(SRM) reference numbers for free
sanitary towels and optical glasses.
(Pg 221, Para 11.1.1)
Social Housing Projects for Vulnerable Groups – Inability to meet Demand for
NHDC Housing Units (Page 450)
2 As per listing submitted by NEF, some The number of NHDC HU that
1,500 SRM households were interested to can be acquired by the
be provided with NHDC Housing Units Ministry/NEF is dependent on
(HU). However, only 261 HU were the number of HU being Partially
acquired and delivered to eligible SRM constructed by NHDC. Any Resolved
beneficiaries as of August 2023. change in existing housing
(Pg 450, Para 13.1.1) policy is beyond the sole
responsibility of SID.
Empowerment Support Scheme – Lapses in implementation of Scheme (Page 450)
3 Integration of SRM with other As custodian of the SRM, the
Government registers/systems was still Social Security and National
not done. Solidarity Division (SSD) was
(Pg 450, Para 13.1.2) approached to have Not
consultative meetings with Resolved
concerned stakeholders so as
to integrate the SRM with
other registers/systems.
4 Proxy Means Test (PMT) used was still A preliminary Household
based on Household Budget Survey Budget Survey would be
2012. released in 2024 and Maurice Not
(Pg 451, Para 13.1.2) Stratégie will then provide Resolved
assistance with the review of
the PMT.

233
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MINISTRY OF SOCIAL INTEGRATION, SOCIAL SECURITY AND NATIONAL SOLIDARITY
11.2 SOCIAL SECURITY AND NATIONAL SOLIDARITY DIVISION
11.2.1 Payments of Pensions

During the financial year 2022-23, the Social Security and National Solidarity Division
(SSD) disbursed some Rs 49 billion in respect of payments of basic retirement, basic
widows and invalid pensions, amongst others, to some 300,000 beneficiaries.

Findings

Over the years, NAO has continuously highlighted that the measures taken to prevent,
detect and recover the overpayment of pensions were inadequate. For the financial year
2022-23, the same shortcomings prevailed as detailed hereunder.

Increase in Overpayments of Pensions

As at 30 June 2023, total overpayments of pensions had reached some Rs 133.8 million,
representing an increase of 26 per cent of the overpaid amount of Rs 106.3 million as at
30 June 2022. The following were also noted:

Recovery of Overpayments - 583 new cases totalling some Rs 79.7 million of overpayment
of pensions were detected during financial year 2022-23, and out of these, some
Rs 41.1 million were not yet recovered as of 30 June 2023.

The Benefits Unit had issued Forms NPS 28 to the respective banks for recovery of the
amounts overpaid upon detection of the new cases. However, 64 per cent of overpayments
due to death cases, were not recovered. The control mechanism through Forms
NPS 28 was, therefore, not effective.

Pay day for pensions – Following public outcry in respect of the decision to pay pensions
to beneficiaries, who have opted to have same through bank accounts, on the fourth working
day of each month, SSD had to restore the payment schedule to the first working day of
each month. It should be noted that the beneficiaries are being paid the pensions in advance
each month. Monthly pay sheets are thus forwarded to the respective banks, a few days
prior to pay day.

The change in pay day to the first working day of each month caused pensions to be
overpaid to those beneficiaries who passed away from the date the monthly pay sheets were
sent to the banks up to the end of the month. The deceased persons are not eligible for any
pensions as from the next month upon death. As of 30 June 2023, payment of pensions
amounting to some Rs 2.4 million were not stopped as from the next month upon death of
141 beneficiaries in the financial year 2022-23. The overpayment could have been avoided
if the pay day was other than the first working day of the month.

New Cases with Significant Amounts Overpaid

A sample of new cases of overpayments with significant amount, detected by SSD during
the financial year 2022-23 is listed in Table 11-1.

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MINISTRY OF SOCIAL INTEGRATION, SOCIAL SECURITY AND NATIONAL SOLIDARITY
Table 11-1 New Cases with Significant Amount detected during Financial Year2022-23
Claim File No Type of Overpayments Age (Years) at
Pension
Amount (Rs) Period No of Death Detection
Years
Death Cases
R50173432 BRP/CRP/SH 2,035,648 Jan 97-Nov 22 25 64 90
R50143551 BRP/SH 2,591,587 Oct 95-Jan 23 27 68 95
R50132201 BRP 2,072,806 Sep 96-Jan 23 26 70 96
R50111643 BRP 2,458,512 Jul 96-Jun 23 27 72 99
R50121043 BRP 2,250,553 Sep 95-Nov 22 27 71 98
R50105556 BRP 2,351,187 Nov 95-Aug 22 26 73 99
Departure Cases
R50175432 BRP 1,241,810 Nov 92-Oct 22 30 - 89
R50152486 BRP/CRP 1,628,271 Sep 11-Feb 23 11 - 93
R50196552 BRP 1,192,616 Oct 95-Sep 22 27 - 86
R50111939 BRP 1,859,492 Apr 14-Mar 23 9 - 99
R96205425 BRP 2,277,662 Sep 99-Jun 22 22 - 99
R50158543 BRP 1,807,811 Aug 98-Apr 22 23 - 95
Source: Return of Overpayment of Pensions
Note: BRP - Basic Retirement Pension, CRP – Contributory Retirement Pension, SH – Severely Handicapped

Examination of the records in respect of each of the above cases revealed that the control
mechanism in place had failed to prevent and detect the overpayment of pensions promptly,
as shown below:

Long Periods of Overpayments – The beneficiaries were overpaid for periods ranging
from 9 to 30 years before being detected. Usually, a beneficiary is not eligible for the
pensions as from the following month upon death, and for more than six months in
case of departure of the beneficiary abroad. It could not be understood why those cases
were not detected for such a long period of time.

Beneficiaries of Severely Handicapped (SH) Allowance - Two of the deceased


beneficiaries were also drawing the SH allowance. According to the procedures
established by SSD, the Medical Board ought to have reassessed the SH beneficiary
on a yearly basis, and those beneficiaries aged 90 and above are subject to monthly
domiciliary visits by Medical Officers of SSD. However, neither annual assessments
were done by the Medical Board nor were they on the list of beneficiaries for regular
visits by Medical Officers. For these two cases, the control mechanism for follow-up
action had therefore failed as they had remained undetected for more than 25 years.

Beneficiaries aged 90 years or more - The other beneficiaries aged 90 and above were
also not detected earlier as they did not appear on the list for regular visits by
Medical Officers.

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MINISTRY OF SOCIAL INTEGRATION, SOCIAL SECURITY AND NATIONAL SOLIDARITY
Incorrect Records of Beneficiaries of Basic Widows Pensions

At Paragraph 11.2.3 of the Audit Report for the financial year 2021-22 mention was made
that the same Name and National Identity (NID) number were recorded as ‘late husband of
beneficiary’ for 545 and 14 beneficiaries of Basic Widows Pensions (BWP) in the Benefits
Information System since 15 December 1992 and 1 August 2002, respectively. According
to SSD, the situation had occurred at the time of migration of data, whereby a dummy was
inserted for the husband’s name with a provisional NID number.

As of September 2023, that is more than 20 years later, the database was still not updated
in respect of the “late husband’s name” and date of death for 269 beneficiaries of BWP, as
follows:

In 72 cases, only the late husband’s NID number was retrieved, but the date of death
of the latter was still missing.

197 other cases were still unresolved, as dummy records showing the names, NID
numbers and dates of death of the late husbands were still being used.

Hence, the risk that those beneficiaries may not be genuine still exists. Moreover, the list
of religious marriages had still not been obtained and hence, a matching exercise had not
been performed to identify any case of re-marriage of BWP beneficiaries. The latter are
ineligible to continue drawing BWP upon re-marriage.

Filing System not Efficient and Effective

Out of 62 claim files requested for audit purposes, only 31, that is, 50 per cent were
produced for audit.

Root Causes

The Accounting Officer has not:

effectively addressed the weaknesses in control mechanisms for the detection of death,
departure and other related causes of illegal encashment of pension entitlements by
beneficiaries or their kins.

set up a proper and adequate filing system that would ease retrieval of information.

Recommendations

The Accounting Officer should urgently update the database of beneficiaries to identify
all ineligible cases, and also consider requesting the submission of a Life Certificate
by all beneficiaries of pensions in the future.

The Accounting Officer may also consider rescheduling the pay day for pensions by
banks, but only after doing an extensive public explanation campaign on the reason for
the change and emphasising on the fact that the monthly pensions are paid in advance.
This would allow ample time for processing death cases. It is worth mentioning that

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MINISTRY OF SOCIAL INTEGRATION, SOCIAL SECURITY AND NATIONAL SOLIDARITY
over 40,000 beneficiaries who presently receive their pensions through post offices,
are being paid from the 4th to 12th working day of each month without any complaint.

Basic Invalidity Pension and BWP beneficiaries should also be included in the criteria
reported by the Passport and Immigration Office on departures exceeding six months.

The legal framework governing the National Pensions Scheme needs to be


strengthened to make provision for recovery of pensions cashed illegally by deceased’s
kins.

The filing system needs to be improved considerably to store, record movement and
allow for easy retrieval of claim files.

Ministry’s Response

Increased amount of overpayments had come to light due to the fact that more controls
were implemented over the recent years. However, concerning overpayments detected
in respect of departure and remarriage cases, information on the Info highway system
are not up-to-date since many beneficiaries travel with foreign passports and
remarriage conducted abroad are not notified respectively.

In many cases, the Carer’s allowance is granted permanently. So, the review is not
made yearly in such cases.

With regard to re-marriages of widows, a letter has been addressed to the concerned
Council for submission of a list of marriages recorded on a monthly basis.

The filing system has been reorganised and a Request for Proposal has been finalised
by the Central Informatics Bureau for an Electronic Document Management and Work
Flow System.

The setting up of a Prosecution Unit is under consideration.

11.2.2 Pensions paid in Cash through Post Offices

According to Section 39A of the National Pensions Act 1976, “The Minister shall, in
relation to each person whose claim for a benefit has been allowed, issue a Pension Card”.

Presently, out of a total of some 300,000 social benefits beneficiaries, 42,000, that is some
14 per cent, are still being paid in cash through Post Offices. Some 370 new beneficiaries
had opted for payment of pensions in cash for the financial year 2022-23. Pension Cards
(PC) are issued only to beneficiaries who are paid their monthly pensions in cash.

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MINISTRY OF SOCIAL INTEGRATION, SOCIAL SECURITY AND NATIONAL SOLIDARITY
Findings

Pensions paid through Post Offices costing Rs 11 million more than through Banks

The payment of pensions through Post Offices was, by far, not a cost-saving option for
SSD since disbursement of more than Rs 11 million was being incurred for some 42,000
beneficiaries concerned as shown below.

Pensions through Post Offices

SSD incurred a total amount of some Rs 11.2 million as procurement and distribution of
PC, and processing fees for the period March 2022 to June 2023, as follows:

In March 2022, SSD purchased some 56,000 PC for some Rs 662,000 to replace
existing PC, due to expire in March 2022 and for new beneficiaries. The PC were for
a duration of two years, that is from April 2022 to March 2024.

A fee of Rs 14 was charged by the Mauritius Posts Ltd (MPL) per PC distribution. The
total expenditure incurred in respect of purchase and distribution of the PC amounted
to some Rs 1.2 million.

During the financial year 2022-23, processing fees of some Rs 10 million were paid to
Mauritius Post Limited (MPL) for effecting monthly pensions to some 42,000
beneficiaries. A monthly fee of Rs 14 per beneficiary was charged by MPL up to
November 2022 and Rs 20 as from December 2022.

Pensions through Banks

According to the Finance Section, SSD paid only some Rs 40,000 annually as processing
fees to banks for over 200,000 pension beneficiaries.

Root Cause

A cost benefit analysis was not carried out.

Recommendations

To curtail costs associated with processing of pension benefits, the Accounting Officer
needs to:

carry out a cost benefit analysis to determine the most appropriate and economical
method of payment with least hardship caused to beneficiaries.

organise extensive campaign all over the island to sensitise beneficiaries to open bank
accounts and review the policy decision for a more cost-effective solution.

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MINISTRY OF SOCIAL INTEGRATION, SOCIAL SECURITY AND NATIONAL SOLIDARITY
Ministry’s Response

Payment of Contributory and Non-Contributory pensions in cash to beneficiaries by MPL


on behalf of SSD stems from a policy decision of 2009. Despite extensive campaign, some
beneficiaries are still reluctant to open bank accounts.

11.2.3 Memorandum of Understanding with MPL not yet signed

A draft Memorandum of Understanding (MOU), defining the scope of services,


responsibilities of MPL, obligations of SSD and fees chargeable was prepared in November
2022 and the views of concerned stakeholders were sought. As of November 2023, one
year later, the MOU was not yet signed.

Moreover, the draft MOU did not cater for the following services entrusted to MPL:

Renewal of Pension Cards every two years and the distribution fee of Rs 14 per pension
card.

Payment of Social Aid in cash through the issue of ABF 145 (Immediate Payment (IP)
voucher), an amount of Rs 8 million advanced to MPL each month and the fee of
Rs 20 per IP voucher paid.

Submission of detailed listings of all paid and unpaid pensions at the end of each
month, amongst others.

Root Cause

Inputs from concerned stakeholders were not sought by the Accounting Officer before
drafting of the MOU.

Recommendation

The Accounting Officer needs to take corrective action to address the deficiencies before
signature of the MOU.

Ministry’s Response

The draft MOU will be amended to address NAO’s recommendations.

11.2.4 Assets Under-utilised

Three Recreation Centres not reopened since end of Quarantine Period in April 2022

The purpose of setting up Recreation Centres (RCs) was to host residential holiday camps
for senior citizens aged 55 years and above as well as persons with disabilities. The RCs
provide accommodation in double bedrooms, food and beverages, indoor entertainment,
swimming pool activities, outdoor tours in coach and targeted empowerment talk sessions.

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MINISTRY OF SOCIAL INTEGRATION, SOCIAL SECURITY AND NATIONAL SOLIDARITY
The aim is to ensure a comfortable, safe, recreational and hospitable retreat for the elderly
as well as disabled persons, thus giving them opportunities to cut off from their daily routine
life.

Three RCs, namely Lady Sushil Ramgoolam (LSR), James Burty David (JBD) and Sir
Seewoosagur Ramgoolam were returned to SSD in April 2022 after having served as
Quarantine Units during the outbreak of COVID-19. The new RC, the Sir Anerood
Jugnauth RC situated at Riambel was inaugurated on 16 July 2023, more than two years
after the completion of the building in May 2021.

Findings

As of September 2023, that is more than 16 months after the RCs stopped being used
as Quarantine Units, the three above mentioned RCs were still closed and not available
for residential camps activities. The expected reopening which was initially planned
for April 2023 was postponed to October 2023, and then to December 2023.

The reasons for delays in the reopening were due mainly to several pending renovation
works. For example, at JBD, drain works, sewage pump, swimming pool, grease trap
pump and emergency lightings, Fire Certificate and CCTV cameras were yet to be
remedied.

The new RC at Riambel inaugurated in July 2023, was not yet operational due to the
fact that contracts were not yet awarded for the provision of catering and laundry
services, amongst others.

Root Cause

Proper planning was not done by the Project Monitoring Committee and the Accounting
Officer to make the RC operational.

Recommendations

The Project Monitoring Committee has to take prompt action in respect of renovation
works on the RCs.

The operationalisation of the RCs should be expedited by the Accounting Officer for
the benefits of the senior citizens.

Ministry’s Response

The recreation centres suffered several structural damages during the period they served as
quarantine stations and renovation works are in progress.

11.2.5 Governance Issues – Non-compliance with Legislation

Provisions have been made in various legislations to impose a statutory responsibility on


Accounting Officers and Boards of Statutory Bodies with the objective of strengthening
accountability and transparency in the public sector.

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MINISTRY OF SOCIAL INTEGRATION, SOCIAL SECURITY AND NATIONAL SOLIDARITY
Findings

Non-Submission of Financial Statements for Audit

The Statutory Bodies (Accounts and Audit) Act requires the Chief Executive Officer of a
Statutory Body to submit the Annual Report to the auditor not later than four months after
the end of every financial year.

As of 14 December 2023, Statutory Bodies falling under the purview of the Ministry of
Social Integration, Social Security and National Solidarity (Social Security and National
Solidarity Division), have not submitted their Financial Statements for audit for periods as
shown in Table 11-2.

Table 11-2 Financial Statements not submitted to NAO for Audit

Statutory Body Financial Year No. of


Financial
Statements

National Council for the 2020-21 to 3


Rehabilitation of Disabled 2022-23
Persons

Training and Employment of 2018-19 to 5


Disabled Persons Board 2022-23

Senior Citizens Council 2022-23 1

Source: NAO records

Ministry’s Response

The financial statements for the Training and Employment of Disabled Persons Board and
the Senior Citizens Council will be submitted to NAO by 23 February 2024.

Special Funds: Financial Statements not submitted for audit and audited Financial
Statements not laid before the National Assembly

As of 14 December 2023, the National Pension Fund and National Savings Fund falling
under the purview of the Ministry of Social Integration, Social Security and National
Solidarity (Social Security and National Solidarity Division), had not submitted its
Financial Statements for audit for financial year 2022-23.

As of 14 December 2023, the audited Financial Statements of the Non-Government


Organisation (NGO)Trust Fund for financial years 2016-17 to 2021-22 and period
01 July 2022 to 03 February 2023 had not yet been laid before the National Assembly.

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MINISTRY OF SOCIAL INTEGRATION, SOCIAL SECURITY AND NATIONAL SOLIDARITY
Table 11-3 Audited Financial Statements not laid before the National Assembly

Financial Year/ No. of


Date
Statutory Body Financial
Period Certified
Statements
Non-Government Organisation 2016-17 01.06.2018
Trust Fund 2017-18 21.12.2020
2018-19 20.04.2023
2019-20 19.04.2023 7
2020-21 20.04.2023
2021-22 21.04.2023
01.07.22-03.02.23 28.08.2023
Source: NAO Records & National Assembly Hansard

Ministry’s Response

The Financial statements for the NPF & the NSF will be submitted to NAO by end of
February and March 2024 respectively. Concerning the NGO Trust Fund, the seven Annual
Reports will be tabled at the National Assembly by 16 February 2024.

Non-submission of Report on Performance

As of 18 December 2023, the Report on Performance of the Social Security and National
Solidarity Division for the financial year 2022-23 had not yet been submitted to the
Ministry of Finance, Economic Planning and Development, despite the statutory deadline
being 31 October 2023.

NAO is of the view that the Ministry should exercise control over Statutory Bodies and
other entities operating under its aegis to ensure that they fulfil their statutory
responsibilities regarding the preparation of financial statements, their submission for audit
and tabling before the National Assembly.

Ministry’s Response

The Report will be submitted by end of March 2024.

11.2.6 Follow-up of Matters Raised in the Audit Report 2021-22

A follow up of matters raised in the Audit Report for the financial year 2021-22 was carried
out. SSD was requested to inform the National Audit Office of the actions that have been
taken to address the findings and recommendations in the Report. The information along
with evidence collected through review of files and documents were assessed and discussed
with SSD.

The status on actions taken on findings since the publication of the Audit Report are
summarised below. Out of six findings, three (50 per cent) have been resolved and three
(50 per cent) have not been resolved.

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MINISTRY OF SOCIAL INTEGRATION, SOCIAL SECURITY AND NATIONAL SOLIDARITY
SN Findings Ministry’s Response – NAO
Status as of January 2024 Comments
Outstanding Cheques – (Page 223)
1 Cheques totalling some Rs 2.8 million Remedial action to clear the
were still outstanding for more than four outstanding cheques on the Social
years now. Aid System was taken. Resolved
(Pg 223, Para 11.2.1)
Delays in Implementation of Capital Projects – (Page 223)
2 La Marie Elderly Day Care Centre - Action initiated to carry out
As at 30 June 2022, more than seven renovation and upgrading works
years after acquisition of the through the Ministry of National
building in 2015 to house a Day Care Infrastructure and Community Not
Centre for the Elderly and Disabled, Development. Resolved
same was still unoccupied.
(Pg 223, Para 11.2.2)
3 Construction of Homes, Projects not Plots were still unoccupied. It was
yet started - More than three years proposed to bring amendments to the
after vesting of the plots, both drawings and as of December 2023,
projects had not yet started. same was still awaited for Palmar.
Not
(Pg 223, Para 11.2.2) Preliminary architectural drawings
Resolved
and estimation of costs for Flic en
Flac project will be made after
completion of the architectural
drawings of Palmar project.
Slow Recovery of Long Outstanding Overpayments – (Page 224)
4 Out of total amount of Recovery of overpayments cases was
Rs 104.7 million, refunds of some noted to be still slow. Overall
Rs 14,2 million only were received recovery rate has decreased from 29
during the financial year 2021-22. per cent in 2021-22 to 27 per cent in
(Pg 224, Para 11.2.3) the financial year 2022-23.
Moreover, no refunds were received
from 427 of the 966 outstanding cases
as of 30 June 2022.
Concerning the 11 cases totalling
some Rs 6.3 million reported since
2019-20, refunds were made by only
Not
three of them. Balance of Rs 6.1
Resolved
million was still outstanding as of
30 June 2023.
A maximum of only one-third of the
monthly benefit can be retained at
source as per provisions of the
National Pensions (Claims and
Payments) regulations 1977.
The Ministry is working on
amendments to existing legislations
so as to reinforce the mechanism for
recovery of overpayments.

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MINISTRY OF SOCIAL INTEGRATION, SOCIAL SECURITY AND NATIONAL SOLIDARITY
SN Findings Ministry’s Response – NAO
Status as of January 2024 Comments
Inadequate Controls over detection of Overpayment of Social Aid – (Page 226)
5 Matching exercise not done. Matching now being done in respect
Officers not complying with of abandoned women. Resolved
Instructions.
(Pg 226, Para 11.2.4)

6 List of deceased not generated from Amendment already made to the


the SA Module before renewal of all Social Aid Module. Resolved
cases of social aid.
(Pg 226, Para 11.2.4)

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MINISTRY OF SOCIAL INTEGRATION, SOCIAL SECURITY AND NATIONAL SOLIDARITY
246
MINISTRY OF SOCIAL INTEGRATION, SOCIAL SECURITY AND NATIONAL SOLIDARITY
12 - MINISTRY OF INDUSTRIAL DEVELOPMENT,
SMEs AND COOPERATIVES

12.1 SMALL AND MEDIUM ENTERPRISES DEVELOPMENT


12.1.1 Risk Management Framework - Not yet developed

In December 2021, the Ministry of Finance and Economic Planning and Development
(MOFEPD) issued a circular regarding the establishment of Risk Management (RM)
Framework in the Public Sector.

In view of facilitating the process, MoFEPD developed Guidelines for the establishment of
a RM Framework in Ministries/Departments. According to the Guidelines, the Accounting
Officer is accountable for the overall governance and has the ultimate responsibility for
RM.

Finding

As of October 2023, the SMEs Division had not yet developed a RM Framework as
required by Circular No. 8 of 2021. Hence, the identification and management of risk could
not be carried out.

Root Cause

The Accounting Officer did not initiate actions for developing the Ministry’s RM
Framework and did not seek assistance from MoFEPD for the provision of necessary
training to Officers of the Ministry for preparing the RM Framework.

Recommendations

The Accounting Officer should establish a RM Framework and Strategy within


reasonable time.

The composition and the mandate of the RM Committee including roles,


responsibilities and accountability should be clearly defined and approved by the
Accounting Officer.

Ministry’s Response

The RM Framework has not been implemented.

12.1.2 Governance Issues – Non-compliance with Legislation

Provisions have been made in various legislations to impose a statutory responsibility on


Accounting Officers and Boards of Statutory Bodies with the objective of strengthening
accountability and transparency in the public sector.

247
Findings

Non-submission of Financial Statements for Audit

The Statutory Bodies (Accounts and Audit) Act requires the Chief Executive Officer of a
Statutory Body to submit the Annual Report to the auditor not later than four months after
the end of every financial year.

As of 14 December 2023, financial statements for the Small and Medium Enterprises
Development Authority (SMEDA), falling under the aegis of the Ministry of Industrial
Development, SMEs and Cooperatives (SMEs Division), have not yet been submitted for
audit for the periods 1 January 2016 to 30 June 2017 and 1 July 2017 to 18 January 2018.
SMEDA had ceased operation on 18 January 2018.

NAO is of the view that the Ministry should exercise control over Statutory Bodies
operating under its aegis to ensure that they fulfil their statutory responsibilities regarding
the preparation of financial statements, their submission for audit and tabling before the
National Assembly.

12.1.3 Follow-up of Matters Raised in the Audit Report 2021-22

A follow up of matters raised in the Audit Report for the financial year 2021-22 was carried
out. The SMEs Division was requested to inform NAO of the actions that have been taken
to address the findings and recommendations in the Report. The information along with
evidence collected through review of files and documents were assessed and discussed with
the Ministry.

The status on actions taken on finding since the publication of the Audit Report are
summarised below. The finding has not been resolved.

SN Finding Ministry’s Response – NAO


Status as at January 2024 Comments

Governance Issues - Non-Compliance with Legislation (Page 231)

1 Financial statements for the SMEDA The financial statements for Not
for periods 1 January 2016 to 30 June SMEDA were not yet submitted Resolved
2017 and 1 July 2017 to 17 January for audit as at January 2024.
2018 were not submitted for audit.
(Pg 231, Para. 12.1.1)

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MINISTRY OF INDUSTRIAL DEVELOPMENT, SMES AND COOPERATIVES
12.2 COOPERATIVES DEVELOPMENT
12.2.1 Liquidation of Cooperative Societies – Non-compliance with Cooperatives Act

Part XIV of the Cooperatives Act details the processes for the dissolution and liquidation
of Cooperative Societies.

As at 30 June 2023, there were 242 Cooperative Societies under liquidation most of which
operating in the agricultural sector, microfinancing and entrepreneurship as shown in
Table 12-1.

Table 12-1 Societies under Liquidation Sector-wise

Number of Societies
Sector/Activity
under Liquidation
Mixed Farming 45
Agriculture 31
Micro Finance/Credit Union 32
Fisheries 20
Animal Farming/Livestock/Poultry 25
Women Entrepreneurship 19
Small entrepreneurs 15
Retail 10
Others 45
Total 242

Source: Database submitted by Registrar of Cooperative Societies

NAO reviewed a sample of 30 societies under liquidation, chosen on a random basis from
the population of 242 societies.

Findings

Non-Submission of Monthly Progress Reports on Liquidation

Out of 30 liquidation files examined, the appointed liquidator did not submit the monthly
progress reports regularly in four cases. Section 97(2)(a) of the Cooperatives Act stipulates
that a liquidator shall, at least once every month, submit to the Registrar of Cooperative
Societies (RCS) a report stating the progress made in the winding up of the affairs of the
society.

The non-submission of monthly progress reports by the liquidators prevented the


Liquidation and Arbitration Unit from assessing the status and progress reached in these
liquidation cases.

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MINISTRY OF INDUSTRIAL DEVELOPMENT, SMES AND COOPERATIVES
Liquidation Process not completed within One Year

Section 97 (3) of the Cooperatives Act requires that a liquidator shall terminate the winding-
up process within one year of his appointment or within such extended time as the RCS
may approve.

In the 30 cases reviewed, the liquidators did not complete the liquidation process as
mandated by Section 97 (3). An age analysis of the cases for which liquidation process was
not completed within the timeframe after appointment of the liquidator is shown in
Table 12-2.

Table 12-2 Liquidation not completed

No. of
Time Frame
Cases
Over one year 4
2 to 3 years 2
3 to 4 years 14
4 to 5 years 7
5 to 6 years 1
Over 10 years 2

Source: Ministry’s Database and Files

The RCS granted an extension for the completion of the liquidation process in 19 cases and
did not grant extension for two cases. For the remaining nine cases, liquidation process
could not be finalised due to the unavailability of funds at society level.

Notice to Creditors not published

Section 96(1)(b) of the Act states that the liquidator has the power to fix, by notice in the
Government Gazette and two daily newspapers, a day on which creditors whose claims are
not recorded in the books of the society to state their claims for payment, failing which
such claims shall be excluded from any distribution.

In eight cases, the required notices to creditors were not published, contrary to Section
96(1)(b) of the Act. Hence, the completion of the liquidation process was delayed.

Notice of Closure not published

Section 100 (2) of the Act states that where the liquidation of a society has been closed, the
liquidator shall give notice of the closure of the liquidation in the Government Gazette and
in two daily newspapers.

In 12 cases, as the Notices of closure were not published due to unavailability of funds at
society level, the liquidation process was not completed. The RCS was requested by the
liquidators to seek funds from the Cooperative Development Fund (CDF) for the
publication of the notices of closure, but no action was taken as of November 2023.

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MINISTRY OF INDUSTRIAL DEVELOPMENT, SMES AND COOPERATIVES
Other Reasons for Non-Completion of Liquidation Process

Liquidation processes were also delayed for reasons beyond the control of liquidators, such
as an investigation being carried out by the Central Criminal Investigation Department for
misappropriation of funds and difficulties in disposal of assets owned by the society.

Root Causes

The RCS did not put in place a proper monitoring system with respect to the non-
submission of monthly progress reports on liquidation; and

The RCS had not taken prompt action to request funds from the CDF for the
publication of notices in newspapers and in the Government Gazette.

Recommendations

The RCS should:

(i) ensure that all the requirements of the Cooperatives Act with respect to liquidation
are adhered to by the liquidator.

(ii) apply for disbursements of funds from CDF for publication of notices, following
requests from the liquidator.

The Liquidation and Arbitration Unit should carry out proper follow-up to ensure
compliance and to speed up the liquidation process.

Ministry’s Response

Appropriate corrective actions are being taken to ensure compliance with the
Cooperatives Act.

The Accounting Officer agrees with the shortcomings highlighted.

NAO Comment

The Accounting Officer should devise a proper mechanism to support Cooperative


Societies in promoting their activities, hence preventing them, as far as possible, from going
into liquidation.

12.2.2 Waste Recycling Scheme for the Benefit of Cooperative Societies

The Government introduced the Waste Recycling Scheme (WRS) in the Budget 2022-23
for which an amount of Rs 3 million was provided under the National Resilience Fund to
finance six Cooperative Societies.

The objectives of the scheme are to:

(i) encourage the greening of Cooperative Societies;

251
MINISTRY OF INDUSTRIAL DEVELOPMENT, SMES AND COOPERATIVES
(ii) enable Cooperative Societies to be the stakeholders in a circular economy with
sustainable development goals; and

(iii) decrease the environmental burden of waste disposal.

Under the WRS, the Cooperative Society would benefit from a grant of 50 per cent on the
cost of purchasing recycling equipment and transportation vehicles from local suppliers up
to a maximum of Rs 500,000.

Findings

Given the low participation level of Cooperative Societies in the WRS, the objectives of
the scheme were far from being achieved.

The scheme was launched on 8 March 2023. Two applications were received as at
31 March 2023. One application was approved for an estimated project value of
Rs 1.1 million.

The submission of proof of registration as ‘Recycler or Exporter’ required under the


Local Government (Registration of Recycler and Exporter) Regulations 2013 was not
considered a prerequisite of the scheme by the Cooperatives Division.

On 25 May 2023, the applicant informed the Cooperatives Division that one of the
eligibility criteria for registering as Recycler was that the applicant must submit a
Preliminary Environment Report (PER) for the recycling plant to the Ministry of
Environment, Solid Waste Management and Climate Change.

However, an amount of Rs 500,000 was disbursed to the applicant by the Cooperatives


Division in August 2023 despite the legal requirement in respect of the submission of
a PER was not complied with.

The scheme was relaunched, and three applications were received as of the closing
date of 17 May 2023. Due to the non-submission of relevant documents, none of the
applications received was retained.

Root Causes

The Accounting Officer did not properly assess the viability of the scheme.

The Secretaries of Cooperative Societies submitted incomplete application forms for


the scheme due to the lack of a proper information campaign.

Recommendations

The Accounting Officer should:

ensure that an awareness campaign is carried out, targeting more applicants and
explaining all the requirements relating to terms and conditions of the scheme;

set up a help desk to assist Cooperative Societies in accessing the scheme; and

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MINISTRY OF INDUSTRIAL DEVELOPMENT, SMES AND COOPERATIVES
consider the setting up of a Project Steering Committee comprising all the relevant
stakeholders.

Ministry’s Response

The Accounting Officer agrees with the shortcomings highlighted.

12.2.3 Risk Management Framework -Not yet developed

In December 2021, the Ministry of Finance, Economic Planning and Development


(MoFEPD) issued a circular regarding the establishment of Risk Management (RM) in the
Public Sector.

In view of facilitating the process, MoFEPD developed Guidelines for the establishment of
a RM Framework in Ministries/Departments. According to the Guidelines, the Accounting
Officer is accountable for the overall governance and has the ultimate responsibility for
RM.

Finding

As of 18 October 2023, the Cooperatives Division had not yet developed a RM Framework
as provided under Circular No. 8 of 2021. Hence, the identification and management of
risks could not be carried out.

Root Cause

The Accounting Officer did not initiate actions for developing the Ministry’s RM
Framework.

Recommendations

The Accounting Officer should establish a RM Framework within reasonable time.

The composition and the mandate of the RM Committee including roles,


responsibilities and accountability should be clearly defined and approved by the
Accounting Officer.

Ministry’s Response

The Cooperatives Division is ISO certified since 24 November 2017 and risk
assessment is carried out as part of the yearly surveillance audit and re-certification
exercise. The last ISO surveillance audit was carried out in August 2023 following
which the Division has been ISO-certified.

Necessary action will nevertheless be taken in accordance with the Circular No. 8 of
2021 from MoFEPD.

The Accounting Officer agrees with the shortcomings highlighted.

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MINISTRY OF INDUSTRIAL DEVELOPMENT, SMES AND COOPERATIVES
12.2.4 Follow-up of Matters Raised in the Audit Report 2021-22

A follow up of matters raised in the Audit Report for the financial year 2021-22 was carried
out. The Ministry of Industrial Development, SMEs and Cooperatives (Cooperatives
Division) was requested to inform the National Audit Office of the actions that have been
taken to address the findings and recommendations in the Report. The information along
with evidence collected through review of files and documents were assessed and discussed
with the Ministry.

The status on actions taken on findings since the publication of the Audit Report are
summarised below. Out of three findings, one has been resolved (33.3 per cent), one has
been partially resolved (33.3 per cent) and one has not been resolved (33.3 per cent).

SN Findings Ministry’s Response – NAO Comments


Status as at February 2024
Rental of Office Space (Page 232)

1 Non-Renewal of Lease The Lease Agreement was signed on 26


Agreement and Non- May 2023 and upgrading works were
compliance with Safety and being undertaken and ongoing to address Resolved
Health Recommendations for Safety and Health recommendations.
relocation of office.
(Pg 232, Para. 12.2.1)
Delay in the Upgrading of ‘Maison des Pêcheurs’ at Tamarin (Page 232)
2 The project which was initiated The Contract for the project has been
in 2016, has undergone several awarded and agreement was signed on
revisions of cost estimates and 21 June 2023.
was still not implemented as of
Partially Resolved
November 2022. The cost of the
project increased significantly
from Rs 1.7 million to Rs 20
million.
(Pg 232, Para. 12.2.2)
Co-operative Societies - Non-submission of Financial Statements (Page 234)
3 A review of the records of the For the Financial year 2022-23, there
Cooperatives Division revealed were 1,337 active Co-operative Societies
that not all co-operative in Mauritius and Rodrigues. The
societies were submitting their co-operative societies to be audited by
Financial Statements (FS) to the the PCA and the Auditor were 1,165 and
Principal Co-operative Auditor 110 respectively.575 societies did not Not Resolved
(PCA) to be audited or filing submit their FS to the PCA.
audited FS to the Registrar
within the statutory deadline.
(Pg 234, Para. 12.2.3)

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MINISTRY OF INDUSTRIAL DEVELOPMENT, SMES AND COOPERATIVES
13 – MINISTRY OF ENVIRONMENT,
SOLID WASTE MANAGEMENT AND CLIMATE CHANGE
13.1 ENVIRONMENT AND CLIMATE CHANGE
13.1.1 Coastal Protection Projects - Lapses in Planning and Execution of Works

As spelt out in the Budget Estimates 2022-23, and in view of increasing resilience of the
coastal zone to natural hazards, climate change and anthropogenic (human) impacts, the
Environment and Climate Change Division (ECCD) intended to pursue coastal protection
works to address accelerating beach erosion.

Out of an amount of Rs 182 million budgeted under the National Environment and Climate
Change Fund (NECCF) for the rehabilitation of beaches, a total amount of Rs 135 million
was disbursed in the financial year 2022-23.

Inadequate Planning for the Implementation of Coastal Protection Works

On 22 September 2021, tender was launched for Consultancy Services for Coastal
Protection, Landscaping and Infrastructural Works for 16 sites around the island. On
25 May 2022, the contract was awarded to a private company for Rs 94.7 million.

As of 30 June 2023, some Rs 9.5 million were paid to the Consultant after submission of
the inception and detailed design reports were submitted.

Findings

As per the terms and conditions of the contract, the Consultant had to submit the draft
tender documents for the implementation of the projects by May 2023. As of October
2023, the submission of the draft tender documents was still pending.

The bathymetry data for five sites from the Mauritius Hydrographic Services, falling
under the aegis of the Ministry of Housing and Land Use Planning (MHLUP) and the
Mauritius Oceanography Institute, was still being awaited, despite several reminders
sent since February 2023.

Root Cause

There was inadequate planning by the Project Manager to ensure that all relevant
information from stakeholders are obtained prior to the preparation of tender documents
for Coastal Protection, Landscaping and Infrastructural Works.

Recommendation

The Project Manager should ensure that relevant information for the finalisation of the
tender documents are obtained on a timely basis.

Division’s Response

The delay in submission of bathymetry data by MHLUP impacted on the submission


of the design reports by the Consultant.

255
Once the Detailed Design Reports are approved, the Consultant would proceed with
the finalisation of tender documents.

The obtention of necessary data and information for coastal protection projects is
externally driven. Despite close follow-up has been maintained, the required data were
submitted late, which was beyond the control of this Ministry.

Delay in Construction of Deux Frères Waterfront Project

In October 2020, the contract for Consultancy Services for the Design, Preparation of
Environment Impact Assessment Report, Tender Documents, Management of Construction
Contract and Supervision for the Deux Frères Waterfront project was awarded to a private
company for Rs 23.4 million, for a duration of 30 months.

Findings

The project was announced in the 2017-18 Budget Speech. In the financial year
2021-22, the scope of construction works was significantly enlarged. The estimated
project value increased by some 47 per cent from Rs 284 million in 2020 to
Rs 417 million in 2023. As of October 2023, the project had still not been implemented.

In December 2022, the Consultant submitted a draft bidding document for the
construction works. As of October 2023, it had not yet been finalised.

Root Cause

The Project Manager did not closely follow up with the Central Procurement Board (CPB)
for finalising the bidding documents.

Recommendation

The Project Manager should closely follow up with CPB for the vetting and approval of the
bidding documents without further delay.

Division’s Response

In view of the delay in obtaining clarifications on the standard bidding document from
the Procurement Policy Office (PPO) and the finalisation of the bidding document
from CPB, the works at Deux Frères could not start as planned in October 2023.

The Departmental Bid Committee (DBC) closely follow up with CPB for finalising
documents

Delay in Coastal Protection Works at Grand Baie

In April 2022, ECCD decided that the implementation of the Coastal Protection Works at
Grand Baie would be supervised by the Ministry of National Infrastructure and Community
Development (MNICD) instead of the former Consultant.

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MINISTRY OF ENVIRONMENT, SOLID WASTE MANAGEMENT AND CLIMATE CHANGE
Findings

The project, with an estimated cost of Rs 15 million, was initially scheduled to be


completed in the financial year 2020-21. However, the project was put in abeyance as
funds were not earmarked.

In March 2022, the initial estimated cost was revised by some 21 per cent from
Rs 15 million to Rs 18.2 million by the former Consultant.

In April 2022, an offer for supervision of the project was made to MNICD and was
accepted by ECCD in June 2023.

As of 30 September 2023, the revised bid documents, submitted to MNICD since


June 2023, were not yet finalised.

Root Cause

The Project Manager did not ensure the timely finalisation of the bidding documents by
MNICD due to the absence of close monitoring.

Recommendation

The Project Manager should ensure the timely finalisation of bidding documents through
close monitoring.

Division’s Response

On 27 September 2023, the Integrated Coastal Zone Management (ICZM) Division issued
a reminder to the Project Manager and Deputy Project Manager to request the Supervision
Team to review the bid documents. On 9 November 2023, another reminder was issued.

Significant Delays to Complete Coastal Protection Works

Five coastal projects were awarded during the years 2020 and 2021 respectively for the
total contract amount of Rs 427.1 million. As of 31 July 2023, four projects were completed
while one was still ongoing.

Findings

The Coastal Protection, Landscaping and Infrastructural Works at Bois des


Amourettes, over a distance of 450 metres, for a contract sum of Rs 41.3 million, and
due for completion in May 2022, were still ongoing. As of 30 June 2023, work progress
had reached some 65 per cent. A time overrun of 13 months beyond the scheduled
contractual completion date was noted.

The delays in the completion of works for the five coastal projects varied from four to
18 months.

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MINISTRY OF ENVIRONMENT, SOLID WASTE MANAGEMENT AND CLIMATE CHANGE
As of 30 June 2023, after more than one year, the requests made by Contractors in
July 2022 for extension of time were not yet examined by the former Consultant and
the claims for liquidated damages were not yet determined.

Root Cause

There was inadequate follow-up by the Project Manager to ensure that projects were
completed within the timeframe.

Recommendation

The Project Manager should closely monitor the projects.

Division’s Response

There was slow progress of works and cash flow problem by the three Contractors.

Lengthy procedures at the level of Forestry Service for the issue of clearance.

Delay in pipe laying works by the Central Water Authority.

Only two determinations have been submitted by the former Consultant as at date.

Delays were encountered in all five projects due to the COVID-19 pandemic and
expiry of Consultant’s contract in February 2022 for supervision of works.

13.1.2 Cleaning and Embellishment Works of Places of Worship and Other Public
Sites – Lapses in Execution of Projects

The Living Environment Unit (LEU) is responsible for the conception, design,
management, realisation and upkeeping of various projects pertaining to the improvement
of the environment as well as to enhance the quality of life of the citizens.

Delay in Projects Implementation

Financial clearances of Rs 204 million and Rs 50 million were obtained from NECCF
during the financial year 2021-22 and in August 2022, respectively, for the cleaning and
embellishment of places of worship and other public sites.

Findings

As of 30 June 2023, only Rs 125.5 million, out of the total amount of Rs 254 million,
were disbursed, that is, 50 per cent of the approved amount.

Upgrading Works at Grand Sable Public Beach - Rs 2 Million

On 15 September 2021, an amount of Rs 2 million was obtained for upgrading works


at Grand Sable Public Beach. The contract was awarded on 20 May 2022. However,
clearances from relevant authorities such as Forestry Service, Road Development

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MINISTRY OF ENVIRONMENT, SOLID WASTE MANAGEMENT AND CLIMATE CHANGE
Authority, Beach Authority, Central Water Authority and Central Electricity Board,
were sought in October 2022, that is, five months after the award of the contract.

On 27 March 2023, DBC recommended to amend the scope of works and thereafter to
seek clearances from the Authorities anew prior to the re-tendering exercise. On
13 April 2023, ECCD issued a letter of termination of contract following the
recommendation of DBC on 3 April 2023.

As of October 2023, the amended Scope of Works was not yet finalised by LEU and
ICZM Division.

Embellishment and Upgrading Works of Places of Worship and Public Sites- Rs 7 Million

Some Rs 7 million were earmarked for the embellishment and upgrading works at
11 places of worship and public sites across the island to be carried out in-house by
LEU and private contractors. As of 30 June 2023, none of the amount earmarked was
disbursed.

As of November 2023,

Two projects relating to places of worship located at Quatre Bornes and Eau Coulée
were cancelled. With regards to the one at Quatre Bornes, the religious body decided
not to go ahead with the upgrading works while for the other located at Eau Coulée,
clearance from MHLUP had not yet been obtained.

The remaining nine projects had not yet started as LEU had not procured the
required materials.

Non-Implemented Works - Rs 19.5 Million

Sixteen upgrading works at an estimated cost of some Rs 19.5 million were not
implemented for the following reasons:

Bid exercises for the upgrading works at 13 other places of worship and public sites at
the estimated cost of Rs 13.5 million were launched during the months of August and
September 2022. However, they were cancelled in December 2022 as all the 12 bids
received were not responsive.

On 24 July 2023, bids were relaunched for five upgrading works. In August 2023,
all the five bids received were not responsive and the DBC recommended that the
present bidding exercise be cancelled. Three months later, on 28 November 2023,
tenders were re-relaunched for the third time.

Bids for the remaining eight upgrading works were relaunched in November 2023
but were cancelled in December 2023 as recommended by DBC due to error in the
bidding document prepared by LEU.

LEU is in the process of preparing the specifications for the Supply and Fixing of
10 Outdoor Gym Equipment for the estimated cost of Rs 5 million.

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MINISTRY OF ENVIRONMENT, SOLID WASTE MANAGEMENT AND CLIMATE CHANGE
Proof of land ownership was not yet obtained from MHLUP for the place of worship
at Corps de Garde Mountain for the upgrading works at the estimated cost of
Rs 300,000.

The bidding documents for the upgrading works at the place of worship, situated at
Avenue Berthaud for the total estimated cost of Rs 600,000 were still under
preparation.

Root Causes

The Project Manager did not ensure that bidding documents were correctly prepared
with the relevant specifications.

The Project Manager did not properly plan the implementation of the project.

The Accounting Officer did not set up an effective monitoring mechanism for the
execution of projects.

Recommendations

The Project Manager should ensure that bidding documents are correctly prepared so
that projects are implemented on a timely basis.

A Project Steering Committee should be set up to manage the implementation of


projects more efficiently and effectively.

Division’s Response

For the upgrading works at Grand Sable Public Beach, tender will be launched anew
with revised scope after securing necessary clearances.

The embellishment and upgrading at 11 sites across the island are at construction stage.

The in-house components of these projects were estimated at some Rs 913,000 and
their implementation depends on the availability of required materials and in-house
workers.

Ineffective Contract Management

Six projects at various places of worship and public sites were categorised in batches and
were awarded for the contract sum of some Rs 60 million, for which financial clearance
was obtained during the financial year 2020-21.

Findings

The site for the project ‘Setting up of a Health Track at Camp Ebene’ (SHTCE) was
handed over on 25 November 2021. The insurance cover of Rs 27.5 million and the
performance security of Rs 1.4 million were submitted on 6 and 31 December 2021
respectively, instead of 29 November 2021 as per the provisions of the General
Conditions of Contract.

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MINISTRY OF ENVIRONMENT, SOLID WASTE MANAGEMENT AND CLIMATE CHANGE
Performance security of Rs 768,555 and insurance cover for Batch B were not
submitted on time.

On 7 April 2022, the Contractor submitted a performance security of Rs 861,715 for


Batch C for which sites were handed over on 22 and 24 March 2022.

Defects liability certificates were not submitted prior to the release of retention money
of Rs 380,000 and Rs 805,000 for Batch C and SHTCE project, respectively.

Signed contracts as stated in the Letter of Acceptance, were not seen for Batches A,
D and F.

Approval of the Accounting Officer or Project Manager was not seen for the reduction
in the rate of retention money from 10 to 5 per cent for Batches C, D, F and SHTCE
project.

Root Cause

The Project Manager and the Manager, Procurement and Supply did not adequately follow
up on the submission of documents as required by the General Conditions of Contract.

Recommendation

A Project Monitoring Committee should be set up at LEU to ensure close monitoring of all
projects and take prompt remedial actions, when there are deviations from milestones.

Division’s Response

The Contract for Batch C was initially scheduled to start on 6 April 2022 instead of
30 March 2022. The onus for taking over of the site rests upon the contractor and
liquidated damages are applied for any delay in completion of the works.

Agreements are being signed for contracts amounting to more than Rs 10 million and
amendments are being brought to the Letter of Acceptance for contracts less than
Rs 10 million.

The Inspectorate shall be requested to submit the Defects Liability Certificates for
Batch C and SHTCE project.

For contracts on Batches C, D, F and SHTCE project, the non-inclusion of the


condition for retention of money as per sub-section 45.1 of the Particular Conditions
of Contract was an oversight.

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MINISTRY OF ENVIRONMENT, SOLID WASTE MANAGEMENT AND CLIMATE CHANGE
13.1.3 Greening and Embellishment of M1 and M2 Motorways - Lapses in
Implementation of Projects

Delay in Submission of Master Plan and Design Reports

In October 2020, ECCD contracted the services of a Consultant for the sum of
Rs 2.4 million for the preparation of a Master Plan (MP) for the Greening and
Embellishment of the Motorways M1 and M2 project, over a stretch of 69.4 km.

The timeframe set for the preparation of the Master Plan was five months.

Findings

The Consultant started works in October 2020 and submitted its last deliverable, the
Detailed Design Report, 13 months later, that is, in November 2021.

The Final Master Plan dated November 2021 was not supported by a comprehensive
implementation plan, including, amongst others, the project timeline and the number
of segments to be covered by ECCD and by the private sector.

The total cost for implementing the whole project, initially estimated at
Rs 324.2 million, was revised to Rs 684 million in November 2021 to cater for costs
of maintenance and electrical works.

As of October 2023, the cost estimates were further revised to Rs 762 million.

Root Cause

The Project Coordination Committee (PCC) which was set up to supervise the Greening
and Embellishment Project along M1 and M2 Motorways, did not adequately fulfil its
oversight and advisory responsibilities to monitor the implementation of the projects.

Recommendations

The Accounting Officer should ascertain that:

the PCC is effectively functional;

a comprehensive implementation plan is prepared; and

cost estimates are realistic before initiating project works.

Division’s Response

The consultation process with the stakeholders was very time-consuming and this led
to an overall delay of the contract.

A timeframe for Project Implementation was included in the final MP with the
provision of setting up of an Operational Landscape Unit. As at date the unit has not
been set up as the request made in budgetary proposal in 2022-23 was not acceded to.

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MINISTRY OF ENVIRONMENT, SOLID WASTE MANAGEMENT AND CLIMATE CHANGE
The Consultant had missed out costs related to maintenance and electrical works.

Significant Increase in Cost Estimates for Segments 5 to 8

In October 2021, due to the finalisation of designs and the increase in market rates, the
Consultant revised the cost estimates for the segments 5 to 8 by 19.3 per cent, that is, from
Rs 48.8 million to Rs 58.2 million.

In November 2021, the Consultant revised the cost estimates, again, by 64 per cent to
Rs 95.6 million by including maintenance cost for one year. Thereafter, execution works at
Segments 7 and 8 were postponed due to financial constraints.

Root Cause

The PCC did not meet for reviewing Reports and Cost Estimates.

Works for Segments 5 and 6 not adequately maintained

On 6 May 2022, ECCD awarded a six-month contract for Rs 43 million, for the greening
and embellishment of segments 5 and 6 of Motorway M1 from Gros Bois Roundabout to
Nouvelle France Roundabout.

The works started in June 2022 and were practically completed on 1 November 2022. The
Maintenance and Defects Liability Period was for a duration of one year as from
2 November 2022.

As of October 2023, payments totalling Rs 33.6 million were effected to the Contractor.

Findings

According to the Project Manager, the maintenance and remedial works were not
properly implemented and were effected at a slow pace.

The site was left in an abandoned state and there were overgrown weeds and grass
along segments 5 and 6.

During the maintenance period, on several occasions, the officers of LEU drew the
attention of the Contractor that the site was not properly and adequately maintained.

Dried plants were not replaced.

Root Cause

The officers of LEU did not conduct adequate site visits during the warranty period to
ensure that maintenance works were carried out effectively.

Recommendations

The Accounting Officer should:

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MINISTRY OF ENVIRONMENT, SOLID WASTE MANAGEMENT AND CLIMATE CHANGE
ascertain that all constraints and challenges faced in implementing the project works
at segments 5 and 6 do not recur in the remaining segments.

explore other avenues of funding to implement project works at the remaining


segments.

ensure that all mechanisms put in place to ascertain the smooth implementation of
projects are effective.

ensure that LEU exercises close monitoring over projects through the conduct of
regular site visits and that reports of those visits are submitted promptly.

Division’s Response

The cost was revised based on the increase in market rates. The Consultant, at the
Ministry’s request, was requested to provide for the yearly maintenance cost.

The attention of the Contractor was drawn to the state of the site and missing plants
and the latter reported several cases of vandalism and theft as well as vehicle driving
on the embellished areas. The replacement of dried plants was being done on a regular
basis.

The prevailing scarcity of personnel at the level of LEU inhibits the monitoring of a
landscaping project of such scope.

13.1.4 National Roadmap for Making Mauritius Plastic-Free - Delay in Development

In its Strategic Direction 2022-2025, ECCD proposed to develop a National Roadmap for
making Mauritius plastic-free by the year 2030.

Findings

The project was announced in 2020 in the Government Programme 2020-2024. As of


October 2023, it has still not been developed.

Funds of Rs 3.4 million earmarked under NECCF for the financial year 2022-23 were
not utilised as no Consultant had been recruited.

None of the bidders were found to be technically and financially responsive following
the tenders launched for the recruitment of a Consultant in September 2022 and
January 2023.

As of October 2023, appropriate clearances and approvals from Government for the
finalisation of the Small Scale Funding Agreement (SSFA) with the United Nations
Environment Programme were still pending.

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MINISTRY OF ENVIRONMENT, SOLID WASTE MANAGEMENT AND CLIMATE CHANGE
Root Cause

Unsuccessful tenders for the recruitment of the Consultant have delayed the development
of the Roadmap for making Mauritius plastic-free.

Recommendation

ECCD should ensure the timely recruitment of a Consultant.

Division’s Response

Planning was done according to financial resources made available in the budgets
2021-22, 2022-23 and 2023-24 for this consultancy work.

The recruitment of a Consultant will be done within the timeframe and the bidding
exercise will be in line with provisions laid down in the SSFA.

13.1.5 Review of Key Performance Indicators in Strategic Overview 2022-23

For the financial year 2022-23, one Outcome Indicator and three Key Performance
Indicators (KPIs) were determined by ECCD. As of 30 June 2023, the targets set for the
Outcome Indicator namely Greenhouse Gas (GHG) emission and two KPIs namely
“Number of Public Sites Embellished” and “Recycling Rate of Post-Consumer
Polyethylene Terephthalate (PET) Bottles” were not achieved.

Reducing Greenhouse Gas Emissions in Mauritius – Aim not achieved

Mauritius aims to become a climate-resilient and low-emission country, and intends to


reduce overall GHG emissions by 40 per cent in 2030.

Findings

The target set for the financial year 2022-23 to decrease the total GHG emissions to
4,860 Gg CO2-eq was incorrect as the estimated figure submitted by the Department
of Climate Change (DCC) to Ministry of Finance, Economic Planning and
Development (MoFEPD) was 5,400 Gg CO2-eq.

As per the Progress Report on achievements for the financial year 2022-23 submitted
in August 2023, ECCD provided a provisional gross figure of 5,642 Gg CO2-eq
pertaining to the calendar year 2022 instead of the net figure of 5,308 Gg CO2-eq.

Root Cause

There is no proper framework at the level of DCC for the setting up of KPIs.

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MINISTRY OF ENVIRONMENT, SOLID WASTE MANAGEMENT AND CLIMATE CHANGE
Recommendation

The Accounting Officer should ascertain that information relating to KPIs Progress Report
on Achievements is duly vetted by DCC before onward submission to MoFEPD.

Division’s Response

The MauNDC Registry has been set up to monitor the measures outlined in the
Nationally Determined Contribution with regard to achieving the target of 40 per cent
GHG emissions by 2030.

Two projects, the Capacity- Building Initiative for Transparency and the Initiative for
Climate Action Transparency will support the Ministry in preparing more accurate
yearly estimates.

Key Performance Indicators - Unachieved Targets

Three KPIs were determined by ECCD in Budget 2022-23. However, ECCD did not
achieve the targets set for two KPIs, namely, the “Number of Beach Sites Rehabilitated”
and the “Recycling Rate of Post-Consumer PET Bottles”, as illustrated in Table 13-1.

Table 13-1 Targets set for KPIs not achieved for the Financial Year 2022-23

Target Actual
Key Performance Indicators
2022-23 2022-23

Delivery Unit KPI

Integrated Coastal Zone Number of Beach Sites


4 3
Management Division Rehabilitated

Plastic Management Recycling Rate of Post-


50% 40%
Division Consumer PET Bottles

Source: Ministry’s Records

Root Cause

There was inadequate monitoring and follow-up by the Officer in Charge of their respective
Divisions to ensure that targets set were achieved.

Recommendation

The Officer in Charge of the Divisions should exercise close monitoring regularly to ensure
that targets are achieved and any deviations therefrom are reported to the Accounting
Officer for corrective actions.

Division’s Response

The project at Bois des Amourettes has suffered delays due to issues which are beyond
the control of the Division.

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MINISTRY OF ENVIRONMENT, SOLID WASTE MANAGEMENT AND CLIMATE CHANGE
In order to improve on the target set for recycling rate of PET, Government has agreed
to introduce new policies and strategies for the management of post-consumer PET
bottles and containers.

Drafting instruction for the proposed Extended Producer Responsibility Regulation for
the management of post-consumer beverage containers was sent to the Attorney
General’s Office since April 2022 and is still being worked out.

13.1.6 Audit Committee

The Audit Committee (AC) plays a key role in public accountability by providing
independent oversight of the organisation’s governance, risk management and internal
control practices, thus providing confidence in the integrity of these practices.

In August 2022, the Office of Public Sector Governance (OPSG) developed an updated
AC Charter to provide guidance on the setting up and the operations of AC.

In September 2022, a Performance Agreement (PA) was signed between the Accounting
Officer, Chairperson and AC members.

Findings

The AC has only reviewed four Internal Control Reports out of nine issued for the
financial year 2020-21.

Quarterly reports for the period July to September 2022 and October to December 2022
were not seen.

Root Cause

The Accounting Officer did not ensure the effective operation of the AC throughout the
year.

Recommendation

The terms of reference as per the PA and the AC Charter should be strictly complied with
to ensure that the objectives set for such committees are attained.

Division’s Response

The finalised Internal Control Reports inadvertently omitted, will be sent to AC for
review.

The AC is fully committed to fulfilling its responsibilities in accordance with the


provisions of the AC Charter and ensures that it meets the objectives set for effective
monitoring.

Quarterly reports for the period July to September 2022 and October to December 2022
could not be submitted and OPSG was appraised accordingly.

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MINISTRY OF ENVIRONMENT, SOLID WASTE MANAGEMENT AND CLIMATE CHANGE
13.1.7 Internal Control

In July 2022, the Accounting Officer approved the Annual Internal Audit Plan (AIAP) for
the areas to be audited for the financial year 2022-23.

Findings

The Internal Audit (IA) Charter, signed by the Accounting Officer and the Director,
Internal Control in July 2021, was revised after two years.

The Internal Control Unit audited only 9 out of 12 audit areas agreed in the AIAP for
financial year 2022-23 and as of 30 June 2023, only two out of four planned follow-up
audits were carried out.

Quarterly reports for the periods ending 30 September 2022 and 30 June 2023 were
not seen.

The Annual Report on the Performance achievement relating to the AIAP for financial
year 2022-23, one of the requirements of the IA Charter, was not seen as of
September 2023.

Root Cause

The Internal Control Unit had to carry out several special assignments at the request of the
Accounting Officer.

Recommendations

The AIAP should be signed before the start of the financial year.

The requirements of the IA Charter should be strictly adhered to.

The Audit Committee should approve the IA Charter.

Division’s Response

The IA Charter has been channeled to the Audit Committee for approval

Half-yearly progress report for the period July 2022 to December 2022 and the Quarter
Progress report ending June 2023 were submitted.

The Annual Report on the Performance achievement for financial year 2022-23 was
inadvertently addressed to the Solid Waste Management Division (SWMD) and a copy
was submitted on 15 November 2023 to ECCD.

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MINISTRY OF ENVIRONMENT, SOLID WASTE MANAGEMENT AND CLIMATE CHANGE
13.1.8 Government Asset Register not updated

In July 2017, Treasury Circular No. 16 was issued to all Supervising Officers for the use of
the Government Asset Register (GAR), which was developed to enable the recording of
Non-Financial Assets (NFAs) acquired by Ministries and Government Departments. As
from 14 August 2017, users were provided online access to GAR for capturing data and
recording details of assets.

Finding

As of October 2023, no value was attributed in GAR for six sub-offices of the LEU and the
National Environmental Laboratory owned by ECCD prior to 2017.

Root Cause

No action was taken by the Accounting Officer for the buildings acquired and owned by
ECCD, to be revalued by the Government Valuer.

Recommendation

The Accounting Officer should take prompt action to have the buildings revalued by the
Government Valuer.

Division’s Response

The GAR has been updated by some Rs 88.4 million, following the assessments carried out
by the Valuation Department on the buildings under the purview of the Ministry.

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MINISTRY OF ENVIRONMENT, SOLID WASTE MANAGEMENT AND CLIMATE CHANGE
13.2 SOLID & HAZARDOUS WASTE AND BEACH MANAGEMENT
13.2.1 Cleaning Services - Lapses in Management of Services Contracts

For the financial year 2022-23, the approved budgets for Cleaning Services of Public
Beaches, Operation of Landfill Sites and Operation and Maintenance of Transfer Stations
amounted to Rs 678.5 million and an additional amount of Rs 42.9 million was reallocated.

As of 30 June 2023, the actual expenditure amounted to some Rs 721 million.

Cleaning Services of Public Beaches

For the financial year 2022-23, an amount of Rs 200 million was budgeted for the Cleaning
of Beaches and Maintenance of Toilet Blocks for 65 public beaches under 15 contracts.
The contracts were awarded for a period of 36 months and are renewable annually, based
on the satisfactory performance of the Contractor.

As of 30 June 2023, some Rs 194 million were disbursed.

Findings

The initial three-year contract ending 30 June 2023 for the Cleaning of Beaches and
Toilet Blocks awarded to five Contractors for the total amount of Rs 185 million under
Lots 1, 2 and 4 were renewed for another five months up to 30 November 2023.

The bidding documents for the Cleaning and Maintenance of Toilet Blocks under
Lots 1, 2 and 4 were approved in December 2022 but submitted five months later, in
May 2023, to CPB for vetting.

Three expired contracts for the Cleaning of Toilet Blocks under Lots No 2, 5 and
6 were once more extended for another period of eight to 13 months for an additional
cost of Rs 50.2 million.

As of September 2023, Contracts Agreements were not yet signed for three new
contracts for the Cleaning and Maintenance of Toilet Blocks under Lots No 2, 5 and
6 awarded in December 2022, for the total contract amount of Rs 59.5 million, and also
for the Cleaning, Refuse Collection and Maintenance of Toilet Blocks for secondary
beaches for lot 5 awarded in January 2023, for Rs 41 million.

As of June 2023, cleaning services were not carried out at 61 out of the 134 proclaimed
public beaches.

Root Cause

SWMD did not have adequate resources to ensure efficient and effective contract
management for the cleaning of public beaches.

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MINISTRY OF ENVIRONMENT, SOLID WASTE MANAGEMENT AND CLIMATE CHANGE
Recommendation

Consideration should be given to transfer the responsibility for the cleaning of all public
beaches and maintenance of toilet blocks to the Beach Authority.

Division’s Response

The bidding documents for Lots 1, 2 and 4 could only be reviewed after issuance of
relevant Directive No 68 of PPO on 10 April 2023.

The new contracts for toilet blocks on beaches Lots 2, 5, 6 and secondary beaches for
Lot 5 have already been signed.

The Beach Authority provides cleaning for 27 public beaches by its workers and the
contracts for the remaining 21 beaches were awarded in September 2023.

Operation of Landfill Site

During the financial year 2022-23, SWMD incurred expenditure totalling Rs 327.5 million
for the operation and maintenance of Mare Chicose Landfill.

Recurrent Emergency Procurement

For the period July 2021 to May 2022, two Emergency Contracts (Nos.1 and 2) totalling
some Rs 263.3 million were awarded to the ongoing serving Contractor and extended for
another one month.

Findings

Emergency Contract No. 3 for some Rs 383 million was awarded to the serving
Contractor for a period of nine months, from 1 July 2022 to 31 March 2023 and further
extended for another three months up to June 2023.

Emergency Contract No. 4 was awarded to the serving Contractor for the sum of
Rs 181.1 million for the period July to December 2023.

Division’s Response

The Emergency Contracts to the serving Contractor had to be awarded so as to ensure


continuity of services at the landfill. Open tendering would not have been appropriate due
to the high mobilisation costs and significant lead time for mobilisation of specialised
machineries.

Vertical Expansion Project Not Yet Implemented

Government approval was obtained in December 2017 for the implementation of the
Vertical Expansion Project. The final draft bidding documents were sent to CPB in
November 2020 for vetting. Following amendments to the bidding documents and
vetting/approval of CPB, a new procurement exercise was finally launched in May 2023.

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MINISTRY OF ENVIRONMENT, SOLID WASTE MANAGEMENT AND CLIMATE CHANGE
As of December 2023, the bids were at evaluation process and the project was not yet
implemented after five years.

Root Cause

The time taken to finalise bidding documents was too long.

Recommendation

The procurement exercise should be completed within reasonable time.

Division’s Response

The delay in implementing the Vertical Expansion Project is mainly due to its complexity
and unforeseen circumstances beyond the control of the Division.

Extension of Consultancy Services Contract

The contract for Consultancy Services was awarded to a Consortium for a contract amount
of Rs 16 million and € 942,281 and for a total period of 36 months as from 14 January
2019, with a provision for extension on a month-to-month basis.

Findings

The contract was extended on a month-to-month basis during the period January to
August 2022 for which Rs 1.4 million and € 94,992 were paid.

In June 2022, the Consultant’s services were sought for amendments to be made to the
existing bidding documents for the Vertical Expansion Project and other works for an
amount of € 127,500.

The Consultant was hired for the contract amount of Rs 3.5 million to supervise works
and operations for Component 3 of the Mare Chicose Landfill for a six-month period
from 15 August 2022. The contract was further extended from 15 February 2023 up to
end December 2023.

Root Cause

The Director of SWMD did not adequately monitor Project Officers on the time taken for
the preparation and finalisation of bidding documents for consultancy services.

Recommendation

A timeframe should be set for the preparation and finalisation of bidding documents.

Division’s Response

Open tendering for short-term consultancy contract would not have been appropriate.

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MINISTRY OF ENVIRONMENT, SOLID WASTE MANAGEMENT AND CLIMATE CHANGE
Tender exercises where approval of CPB is required, respecting the time-frame would
be beyond SWMD control.

Operation and Maintenance of Transfer Stations

During the financial year 2022-23, some Rs 232 million were spent on the management of
the five transfer stations and Rs 55 million for the operation and management of the Civic
Amenities Centres.

Extension of Contract for La Laura Transfer Station

Findings

On 29 April 2022, a contract for the operation and maintenance of La Laura Transfer
Station was awarded to private Company A for the contract amount of Rs 16 million
for four months as from 7 May 2022. The contract was extended up to 6 January 2023,
for which an additional amount of Rs 11 million was paid.

On 29 December 2022, private Company B was awarded a contract for the


transportation of wastes to Mare Chicose Landfill for the sum of Rs 15 million for the
period 7 January 2023 to 6 May 2023. The contract was extended up to 15 June 2023
for an amount of Rs 6.4 million and another four months for an amount of
Rs 23.4 million.

In November 2022, CPB cancelled the procurement proceedings for a new contract of
36-months duration, launched in August 2022. After several corrections, the revised
bidding exercise was launched in May 2023. As of October 2023, the evaluation
process was still ongoing at the level of CPB.

Root Cause

The Accounting Officer and the Director of SWMD did not ensure that the bidding
documents were free from errors prior to submission to CPB.

Recommendation

Bidding documents should be free from errors prior to submission to CPB.

Division’s Response

The Ministry has no other option than carrying out competitive exercises for short term
contracts and allowable extensions pending the procurement for the main contract.

The Evaluation exercise has been completed and a new contract awarded on
15 December 2023.

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MINISTRY OF ENVIRONMENT, SOLID WASTE MANAGEMENT AND CLIMATE CHANGE
Collection and Export of e-Waste

The contract for the management of e-waste was awarded to a private company for the
contract sum of Rs 13.5 million and for a duration of 18 months, as from 1 March 2019.
During the financial year 2022-23, some Rs 1.35 million were disbursed to the Company.

Findings

The initial contract ending on 31 August 2020 was extended for nine months up to
1 June 2021, as the Contractor was facing difficulties in exporting the e-waste.

The new agreement for the period June 2021 to November 2022 was signed in
December 2022, one month after the expiry date.

No signed agreement or approval was seen for the extension of contract after
November 2022.

The Performance Guarantee of Rs 200,000 and the renewed Contractors All Risks
Policy which expired during the month of February 2022 were not produced.

As of June 2021, 13,000 units of e-waste were exported out of the 36,220 units stacked
in the private company’s premises. As per site visit report of the Technical
Enforcement Unit dated 28 December 2022, the remaining e-waste were left outside
and were found in a deteriorating state.

Root Cause

There was inadequate monitoring by the Project Officers on the performance of the
Contractor, that is, poor contract management.

Recommendation

The Accounting Officer should ensure that Director of SWMD closely monitor the
performance of contractors.

Division’s Response

Given the environmental liability and risks associated with the collected and stacked
wastes in the possession of the contractor, the option of terminating the contract could
not be envisaged by the Ministry.

Final approval for an extension of the contract on same terms and conditions was given
on 19 October 2023. An amount of Rs 1.4 million was paid on 21 December 2023 for
claims for the period December 2022 to November 2023.

Operation of Interim Hazardous Waste Facility

The Contract for the Operation, Management and Maintenance of the Interim Storage
Facility for Hazardous Wastes was awarded in December 2016 for a period of five years

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MINISTRY OF ENVIRONMENT, SOLID WASTE MANAGEMENT AND CLIMATE CHANGE
up to January 2022 to a private Company C for the total sum of Rs 230.1 million and for
€ 1,395,525.

As of 30 June 2023, Rs 43.9 million were disbursed and Rs 15 million encashed as Disposal
fee for the collection of 173.46 tons of Hazardous wastes.

Findings

The contract was extended on four occasions from January 2022 to July 2023 on the
same terms and conditions of the initial contract of December 2016.

In January 2022, DBC recommended the extension of the contract for another period
of six months despite the Attorney-General Office’s (AGO) advice against it.

As of September 2023, after some eight years, the amended regulations on Hazardous
Chemical Wastes (HCW) were still not yet finalised by SWMD and AGO.

The last inventory report for HCW dated back to year 2012 for the survey period
August to December 2011. SWMD did not have an updated inventory and a database
on the quantity of HCW generated around the island.

As of September 2023, the Hazardous Waste Management Strategy and Action Plan
were not yet prepared.

SWMD did not have a policy on Household Hazardous Chemical Wastes as per the
provisions of the new Waste Management and Resource Recovery Act 2023.

The last sensitisation and awareness campaign was carried out during the financial year
2018-19 for hazardous waste generators in the industrial, commercial, research and
treatment sectors around the island.

For the last two financial years, some 251 tonnes of hazardous wastes transited through
the storage facility, representing only some 16 per cent of its total capacity of
1,600 tons.

Root Cause

SWMD did not ensure the efficient and effective management of Hazardous Chemical
Wastes.

Recommendations

SWMD should comply with the provisions of the new Waste Management and
Resource Recovery Act 2023.

SWMD should set up an inventory and a database on the quantity of Hazardous


Chemical Wastes generated around the island.

Regular sensitisation and awareness campaigns should be carried out.

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MINISTRY OF ENVIRONMENT, SOLID WASTE MANAGEMENT AND CLIMATE CHANGE
Division’s Response

Pending the new bidding exercise, the Division had to ensure continuity of services
through extensions of existing contracts up to July 2023.

New regulations are being prepared to be in line with Waste Management and
Resource Recovery Act 2023.

The Hazardous Waste Management Strategy and Action Plan will be prepared once
the types and quantities of wastes generated are known through the inventory.

The collection and disposal of Household Hazardous wastes is being currently worked
out.

SWMD ensures that all provisions of the Basel Convention on Hazardous Wastes are
complied with.

13.2.2 Review of Key Performance Indicators in Strategic Overview 2022-23

Three KPIs and one outcome indicator were determined in SWMD Budget Estimates
2022-23.

Key Performance Indicators not achieved

SWMD did not consider past achievements and implementing capacity while setting its
targets and as of 30 June 2023, two KPIs, namely, the “Number of Civic Amenity Centres
Operational” and the “Number of Beach Enhancement Projects Completed”, were not
attained as illustrated in Table 13-2.

Table 13-2 Key Performance Indicators and Achieved Targets

Delivery Unit Key Performance Target Achievements


Indicators
2022-23 2022-23 2021-22
SWMD Number of Civic Amenity Centres 4 3 2
Operational (cumulative)
Beach Authority Number of Beach Enhancement 4 2 1
Projects Completed

Source: SWMD Records

Root Cause

The methodology for setting KPIs was not scientific.

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MINISTRY OF ENVIRONMENT, SOLID WASTE MANAGEMENT AND CLIMATE CHANGE
Division’s Response

The construction of one additional Civic Amenity Centre at Roche Bois Transfer
Station could not and cannot be implemented given the Transfer Station is being
transferred.

The additional two Beach Enhancement Projects of the Beach Authority could not be
completed due to unexpected ground conditions during excavation works.

The target set through KPIs was not attained due to circumstances beyond the control
of SWMD.

KPIs not uploaded

In October 2022, the Secretary for Public Service issued Circular No. 67 of 2022 for the
adoption of five KPIs by Government relating to:

(1) Utilisation of Training Budget;

(2) Implementation of Phase III of e-HR;

(3) Compliance with Fire Safety Requirements;

(4) Filling of Vacancies; and

(5) Good Governance.

As of August 2023, SWMD had not yet uploaded the information pertaining to the five
KPIs on the Management Information System of the Public Sector Business
Transformation Bureau.

Root Cause

There is an absence of dedicated staff at management level to ensure compliance to


circulars.

Recommendations

The progress on the KPIs should be uploaded on the Management Information System
Platform.

The roles and responsibilities of staff at management level should be clearly defined
to ensure compliance to Circular No. 67 of 2022.

Division’s Response

There is a lack of staff at management level to ensure compliance to circulars.

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MINISTRY OF ENVIRONMENT, SOLID WASTE MANAGEMENT AND CLIMATE CHANGE
13.2.3 Budget Measures 2022-23 not fully achieved

Two measures were announced at Paragraph 219 of Budget Speech 2022-23.

Construction of one Additional Déchetterie

An amount of Rs 7 million was budgeted under NECCF for the construction of one
additional déchetterie for the disposal of waste oils and construction and demolition wastes.

As of September 2023, land for the construction of the additional déchetterie was not yet
identified by MHLUP.

Root Cause

No feasibility study was carried out and there was failure on the part of the Accounting
Officer of SWMD to identify and acquire land before embarking on the project
implementation.

Recommendation

The Accounting Officer should ensure that a feasibility study is prepared so that the project
is implemented within the timeframe set.

Division’s Response

A new site has been identified and it is planned to include a Civic Amenity Centre in the
new construction.

Composting of Green Wastes

A framework would be introduced to encourage composting of Green Wastes from


households, as well as from parks and gardens, and an amount of Rs 14 million was
budgeted under NECCF.

Findings

In August 2022, 5,000 bins for composting of households Green Wastes were
purchased for some Rs 8.7 million, out of which, only 957 bins were distributed as of
September 2023.

The projects for the composting of green wastes from parks and gardens were not
completed as of 30 June 2023.

Root Cause

There was inadequate planning and lack of adequate logistic support and human resources
required by the Director of SWMD to ensure the timely completion of projects and
distribution of bins.

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MINISTRY OF ENVIRONMENT, SOLID WASTE MANAGEMENT AND CLIMATE CHANGE
Recommendation

The Director of SWMD should ensure that projects are completed within the set timeframe.

Division’s Response

The responsibility for the acquisition and distribution of 5,000 compost bins was
transferred to the Division without the accompanying human and logistic support.

The construction of a Composting Unit at Vacoas has been completed in September


2023 and that at Bras D’Eau is nearing completion.

13.2.4 Audit Committee Not Fully Operational

The AC plays a key role in public accountability by providing independent oversight of the
organisation’s governance, risk management and internal control practices, thus providing
confidence in the integrity of these practices.

OPSG developed an updated AC Charter in August 2022, which was approved by


Government.

In November 2022, a PA was signed by the Accounting Officer, Chairperson and members
of the AC.

Findings

Only two meetings of the AC were held during the financial year 2022-23, instead of
the required minimum of six meeting annually.

PA for the financial year 2021-22 was submitted to OPSG in September 2021.

As of August 2023, the PA and Action Plan for the financial year 2023-24 were not
yet submitted to OPSG.

Quarterly Minutes of Proceedings and Status Reports for the financial year 2022-23
were not submitted to the Accounting Officer and OPSG within 15 working days after
the end of each quarter as prescribed in the audit charter.

As of September 2023, no follow up was carried out in respect of the Status Actions
pertaining to Corruption Risk Assessment, Risk Management and Control, Fraud,
Annual Report on Performance and the Governance Structure.

Matters raised in NAO Audit Reports for the financial years 2019-20 and 2020-21 were
still under review as of December 2022 and matters pertaining to NAO Audit Report
for the financial year 2021-22 were not yet reviewed as of September 2023.

None of the Internal Control Reports were reviewed by the AC.

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MINISTRY OF ENVIRONMENT, SOLID WASTE MANAGEMENT AND CLIMATE CHANGE
As of August 2023, feedback and comments from the Accounting Officer on the
performance and effectiveness of the AC were not seen for the financial year 2022-23.

Root Cause

The Accounting Officer did not ensure that the AC is operational through the year.

Recommendation

The Accounting Officer should ensure that the terms and conditions of the PA and the AC
Charter are strictly adhered to.

Division’s Response

In view of the acute shortage of staff and the heavy workload, the Chairperson and
members of the AC could not meet more than twice in the year.

PA and Action Plan for the financial year 2023-24 are being finalised.

The AC will be requested to ensure proper follow up on the actions taken.

13.2.5 Risk Management Framework not yet developed

In December 2021, MoFEPD issued guidelines for the establishment of Risk Management
in the Public Sector. The latter developed a Risk Management Framework (RMF) to
facilitate the process.

According to the Guidelines, the Accounting Officer is accountable for the overall
governance and has the ultimate responsibility for RMF.

As of September 2023, the RMF was not yet developed at SWMD to identify and assess
potential risks that may affect the smooth running of the division.

Root Cause

There was inadequate commitment by the Accounting Officer to designate relevant


officials with responsibility for establishing the RMF.

Recommendation

The Accounting Officer should ensure that the RMF is established.

Division’s Response

The Risk Management Committee has been set up, the Risk Management Policy uploaded
on website and the RMF is being finalised.

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MINISTRY OF ENVIRONMENT, SOLID WASTE MANAGEMENT AND CLIMATE CHANGE
13.2.6 Government Asset Register not updated

GAR was developed in 2017 for an efficient and effective management of Government
assets. As from 1 July 2022, the Ministry was required to record all NFA directly on the
GAR system.

Findings

SWMD did not comply with the Treasury’s requirement for the recording of all NFAs
directly on the GAR online system as from 1 July 2022.

As of August 2023, details of assets acquired for some Rs 1.4 million during the period
December 2022 to June 2023, and the value of land and infrastructure of the five
Transfer Stations, landfill and interim storage waste facility, were not yet recorded on
the GAR.

The Application Desktop Integrator (ADI) template for the financial year 2018-19 was
the last one submitted to the Treasury.

Root Cause

There was a lack of commitment by the Accounting Officer to ensure that the information
on the GAR system was complete and the GAR Coordinator did not organise/arrange
adequate training sessions for GAR users.

Recommendation

The Division should arrange for effective training programmes to enable GAR users to
record data relating to NFAs on the GAR online system.

Division’s Response

The GAR System for the financial year 2022-23 and current financial year 2023-24 is
up to date.

Information is being sought from ECCD regarding Goods Form 1 for the period July
2017 to June 2022 for updating the ADI template

13.2.7 Governance Issues – Non-compliance with Legislation

Provisions have been made in various legislations to impose a statutory responsibility on


Accounting Officers and Boards of Statutory Bodies with the objective of strengthening
accountability and transparency in the public sector.

Findings

Non-submission of Report on Performance

As of 18 December 2023, the Report on Performance of the Ministry of Environment, Solid


Waste Management and Climate Change (Solid Waste Management Division) for the

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MINISTRY OF ENVIRONMENT, SOLID WASTE MANAGEMENT AND CLIMATE CHANGE
financial year 2022-23 had not yet been submitted to the Ministry of Finance, Economic
Planning and Development, despite the statutory deadline being 31 October 2023.

Annual Reports not laid before the National Assembly

The Statutory Bodies (Accounts and Audit) Act requires a copy of the annual report and
audited accounts of every Statutory Body to be laid before the National Assembly at the
earliest opportunity.

As of 14 December 2023, the Beach Authority, falling under the purview of the Ministry
of Environment, Solid Waste Management and Climate Change, had not yet laid its audited
Financial Statements for the financial years 2020-21 and 2021-22 before the National
Assembly, although they had been certified by NAO on 2 May 2022 and 25 April 2023
respectively.

13.2.8 Follow-up of Matters Raised in the Audit Report 2021-22

A follow-up of matters raised in the Audit Report for the financial year 2021-22 was carried
out. SWMD was requested to inform NAO of the actions that have been taken to address
the findings and recommendations in the Report. The information along with evidence
collected through review of files and documents were assessed and discussed with the
Ministry.

The status on actions taken on findings since the publication of the Audit Report are
summarised below. Out of two findings, one (50 per cent) has been partially resolved and
one (50 per cent) has been resolved.

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MINISTRY OF ENVIRONMENT, SOLID WASTE MANAGEMENT AND CLIMATE CHANGE
SN Findings Ministry’s Response NAO
Status as of January 2024 Comments

Procurement Management – Delay in Awarding Fresh Contracts (Page 238)


1 Operation of the Mare Chicose Landfill
– Contract extended
The contract was extended four times over A new procurement exercise Partially
the period December 2018 to June 2021 at was launched on 11 May Resolved
an additional cost of Rs 393.9 million, 2023 with closing date of bids
followed by three successive emergency on 23 October 2023.
contracts totalling Rs 645.6 million
awarded to the same Contractor in respect
of the period July 2021 to March 2023.
(Pg 238, Para 13.2.1)
2 Cleaning of Public Beaches -Fresh
Procurement Exercise delayed
Four contracts, awarded to two Bids were launched during Resolved
Contractors for Cleaning of Secondary the financial year 2022-23.
Beaches in different locations, had New contracts were allocated
expired and were subsequently extended for a total amount of some
for periods ranging from 8 to 11 months. Rs 100.6 million in
(Pg 240, Para 13.2.3) December 2022 and January
2023.

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MINISTRY OF ENVIRONMENT, SOLID WASTE MANAGEMENT AND CLIMATE CHANGE
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MINISTRY OF ENVIRONMENT, SOLID WASTE MANAGEMENT AND CLIMATE CHANGE
14 – MINISTRY OF FINANCIAL SERVICES
AND GOOD GOVERNANCE
14.1 Adequacy of Key Performance Indicators for the Office of Public Sector
Governance

The Office of Public Sector Governance (OPSG) is mandated to carry out activities in
several priority areas such as organisational reviews, Corporate Governance reviews as
well as monitoring the effectiveness of Audit Committees.

Finding

For the financial year 2022-23, the only Key Performance Indicator (KPI) set for OPSG
was the number of financial and organisational reviews in public sector organisations.
Hence, the Ministry could not monitor and assess the performance of OPSG in other
priority areas.

Root Cause

The Accounting Officer did not take into account the other important functions of OPSG
in formulating KPI.

Recommendation

The Ministry should review the current KPI of OPSG and formulate those that reflect the
main services provided by OPSG. This will help the Ministry to better monitor and assess
the performance of OPSG.

Ministry’s Response

The Ministry will endeavour to review the KPI of OPSG to reflect its main services.

14.2 Implementation of Risk Management Framework

Effective Risk Management supports good governance. One of the responsibilities of the
Ministry is to provide guidance and support for the enforcement of good governance
practices. The Ministry of Finance, Economic Planning and Development issued a circular
in 2021 on the “Guidelines for the establishment of Risk Management in the Public sector.”

Finding

In line with its responsibility, the Ministry through OPSG, was not proactive in taking the
lead to ensure whether all Ministries and Government Departments were complying with
the circular and that the Risk Management Framework (RMF) was being effectively
implemented.

Root Cause

The Accounting Officer did not ensure that Ministries and Government Departments are
complying with the requirements of the circular, despite risk management being an
important pillar of governance.

285
Recommendation

The Accounting Officer, through OPSG, should ensure that all Ministries/Government
Departments are complying with the contents of the circular and also ensure effective
implementation of the RMF.

Ministry’s Response

The responsibility for monitoring RMF in other Ministries/Government Departments


cannot rest with OPSG. This Ministry can only be responsible for monitoring its own RMF.

NAO Comment

NAO is of the view that the responsibility for monitoring RMF has to be agreed between
MoFEPD and the Ministry.

14.3 No Standard Operating Procedure Manual for the Ministry

An Accounting Officer, in relation to Financial Management, has an overall responsibility


for ensuring the preparation of a Standard Operating Procedures Manual (SOPM) on
operational procedures for the Department.

Finding

As of December 2023, the Ministry did not have an SOPM which sets out the policies,
procedures, systems and mechanisms in place.

Root Cause

The Accounting Officer did not ensure the preparation of an SOPM for the Ministry.

Recommendation

The Accounting Officer should initiate action to ensure the preparation of an SOPM for the
Ministry.

Ministry’s Response

A working Group has been set up to look into the possibility where appropriate and
practical, of standardising the routine activities and distinct operations of Technical Units
with a view to preparing an SOPM.

14.4 Independence of Audit Committees

Audit Committees (ACs) play an important role in the governance framework of public
sector organisations. A distinguishing feature of an AC is its independence from
management.

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MINISTRY OF FINANCIAL SERVICES AND GOOD GOVERNANCE
Finding

The independence of ACs was compromised as the Chairperson and members were still
appointed from the same organisation and most of them were from the management team.

Root Cause

The Ministry did not effectively follow up on the issue of independence of ACs with higher
authorities.

Recommendation

The Ministry should follow up the matters relating to AC independence with higher
authorities.

Ministry’s Response

The matter regarding independence of AC members will be taken up with higher


authorities.

14.4.1 Monitoring and Evaluation of Audit Committees

OPSG has the responsibility, amongst others, to monitor and report on the effectiveness of
the implementation of the recommendations made by NAO, Public Accounts Committee
and the Internal Control Unit (ICU). In this respect, OPSG has to inspect and examine
relevant documents and records on site in order to verify the statements and claims made
in the quarterly status reports submitted by ACs.

Finding

Fieldwork was carried out at year-end instead of quarterly to assess principally the
performance of ACs at the end of the financial year. It was reported that delays in the
submission of documents by ACs prevented the proper monitoring and evaluation of their
work.

Root Cause

The submission of documents by given deadlines mentioned in the AC Charter and AC


Handbook was not stipulated in the performance agreement.

Recommendation

The Accounting Officer should include a clause on the deadline for the submission of the
documents by ACs in the performance agreement.

Ministry’s Response

The performance agreement will be reviewed to include a clause on the deadline for the
submission of the documents by Audit Committees. It will be applicable as from the
financial year 2025-26.

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MINISTRY OF FINANCIAL SERVICES AND GOOD GOVERNANCE
NAO Comment

NAO is of the view that the inclusion of the deadline clause should be made as soon as
possible and not as from the financial year 2025-26.

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MINISTRY OF FINANCIAL SERVICES AND GOOD GOVERNANCE
15 – ATTORNEY-GENERAL’S OFFICE,
MINISTRY OF AGRO-INDUSTRY AND FOOD SECURITY

15.1 OFFICE OF THE SOLICITOR-GENERAL


15.1.1 Absence of a Risk Management Framework

In December 2021, the Ministry of Finance, Economic Planning and Development issued
Circular No. 8 on Guidelines for the establishment of Risk Management in the Public
Sector.

Risk management being part of corporate governance may impact on the Office of the
Solicitor General’s strategy, people, assets, environment or reputation if not managed
properly.

These guidelines provide for the:

Process to develop a Risk Management (RM) Framework; and


Support of a dedicated team of Internal Control and of the Audit Committee.

Findings

The RM Framework was yet to be established at the Attorney-General’s Office (AGO).


In absence of such an RM Framework, the risk management objective might not be
achieved to ensure reduction in AGO’s risk exposure. Potential risks were yet to be
identified, assessed and measured to allow their mitigation, if any, and for any likely
adverse impact to be addressed and dealt with accordingly.
Till the establishment of RM Framework, AGO’s exposure to risks and their impact
would remain unquantifiable.

Root Cause

The AGO did not initiate action to establish a RM Framework.

Recommendation

The AGO should initiate action to set up a RM Framework.

Attorney–General’s Office Response

A Risk Management Committee (RMC) has been set up to develop the RM Framework.
In addition, the RMC has recommended the Attorney-General Office’s Risk
Management Policy which has been duly approved on 31 January 2024. The RMC is
also developing a strategy plan which includes the preparation of a Risk Management
Plan, a Risk Identification Process, Risk Analysis and Evaluation Process and Risk
Response. Efforts are being made for the implementation of the RM Framework,
including training of staff and as such the Office is already on track to have a
full-fledged RM Framework by end of April 2024.

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ATTORNEY-GENERAL’S OFFICE, MINISTRY OF AGRO-INDUSTRY AND FOOD SECURITY
15.2 OFFICE OF THE DIRECTOR OF PUBLIC PROSECUTIONS
15.2.1 Incompleteness of Government Asset Register

In July 2017, Government Asset Register (GAR) was introduced for the Central
Government:

to keep track of Non-Financial Assets (NFAs) acquired by Ministries and Government


Departments till their disposal;

to enable their recognition in the accounts of Government; and

to ensure their efficient and effective management.

Finding

NFAs acquired during the financial year 2022-23 were yet to be recorded in GAR.

Root Cause

The Accounting Officer did not ensure that NFAs were recorded in GAR.

Recommendation

The Accounting Officer should ensure that GAR objectives are fully achieved.

ODPP’s Response

The Office has been addressing queries pertaining to the updating of the Non-Financial
Assets on GAR and all efforts, including request for additional human resource, are being
made to complete the updating exercise by mid-March 2024.

15.2.2 Absence of a Risk Management Framework

A Risk Management (RM) Framework was to be set up at each Ministry/Department. The


MoFEPD’s issued Circular No. 8 of 28 December 2021, provides guidelines for the smooth
implementation of RM Framework.

Risk management being part of corporate governance may impact on the Office of the
Director of Public Prosecutions (ODPP) strategy, people, assets, environment or reputation
if not managed properly.

These guidelines provide for the:

process to develop an RM Framework; and

support of a dedicated team of Internal Control and of the Audit Committee.

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ATTORNEY-GENERAL’S OFFICE, MINISTRY OF AGRO-INDUSTRY AND FOOD SECURITY
Finding

The RM Framework was yet to be established at ODPP.

Root Cause

The Accounting Officer did not initiate action to establish the RM Framework.

Recommendation

The ODPP should ensure that the RM Framework is established.

ODPP’s Response

A Risk Management Committee (RMC) has been set up to develop the RM


Framework. The RMC is developing a strategy plan which includes the preparation of
a Risk Management Plan, a Risk Identification Process, Risk Analysis and Evaluation
Process and Risk Response. Efforts are being made for the implementation of the
RM Framework, including training of staff and as such the ODPP is already on track
to have a full-fledged RM Framework by end of April 2024.

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ATTORNEY-GENERAL’S OFFICE, MINISTRY OF AGRO-INDUSTRY AND FOOD SECURITY
15.3 AGRO-INDUSTRY AND FOOD SECURITY
15.3.1 Legislations and Conditions of Deed of Lease not always complied with

The Forestry Service, under the Ministry of Agro-Industry and Food Security (MAIFS), is
responsible for the management of State Forest Lands in Mauritius. Around 47,000 hectares
of the total land area of Mauritius are covered by forests, of which some 23,000 hectares of
State Land are under the control of the Forestry Service.

As of August 2023, some 11,000 hectares of State Lands were leased to 76 lessees for
Shooting and Fishing/Eco-Tourism activities.

Findings

Arrears of Rent of the Forestry Service understated

As at 30 June 2023, total rental due by lessees of State Lands for Shooting and Fishing/Eco-
Tourism activities stood at Rs 4,497,673.

Rents were being paid by the lessees with delays varying from 27 to 467 days. Interests for
late payments were, however, not included in the arrears of rent as at 30 June 2023. Hence,
the arrears figure of the Forestry Service was understated.

Root Cause

The Conservator of Forests had not ensured that:

Section 8(1) of the Shooting and Fishing Leases Act has been complied with; and

the lessees paid the rent in respect of every year of the lease on or before 1 April
preceding the following year of the lease.

Recommendation

The Accounting Officer should ensure that the Shooting and Fishing Leases Act and the
terms and conditions of the deeds of lease are complied with.

Ministry’s Response

When individual claim is made, the interest accumulated is calculated up to the date the
reminder is sent to the defaulting lessee. As per records available, the sum of
Rs 4,497,673 is the legal amount due, excluding interests.

Granting of Lease exceeding 14 years

Section 10(1)(b) stipulates that ‘no lease shall be extended so that its total duration exceeds
14 years’. Leases were, however, renewed to the same lessees whereby the leases covered
a total duration exceeding 14 years. Examples are listed in Table 15-1.

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ATTORNEY-GENERAL’S OFFICE, MINISTRY OF AGRO-INDUSTRY AND FOOD SECURITY
Table 15-1 Lease Renewed to same Lessee exceeding 14 years Lease

Lessee (No. of Ha) Period of Lease No. of


Years

A (160.40), B (195.60), 01.04.2005 to 31.03.2026 21


C (78.09)
D (94.30) 14.01.2005 to 13.01.2026 21
E (170), F (130) 09.05.2005 to 08.05.2026 21
G (175.18) May 2005 to 24.05.2026 20
H (500), I (243.20), J (412.12) 08.09.2007 to 07.09.2028 21
K (482.76) 02.05.2008 to 07.09.2028 21

Source: Lessees’ files

Root Causes

The Accounting Officer had not initiated appropriate action to amend the Shooting and
Fishing Leases Act made in year 1966 to reflect the principles of good governance in
the allocation/renewal of lease.

The Accounting Officer had not considered the other two options, namely public
auction or tenders to be called for the grant of new lease.

Recommendations

The Shooting and Fishing Leases Act, enacted 57 years back, should be amended to
promote the principles of good governance in the allocation/renewal of leases.

The Accounting Officer should also consider the two other methods, namely public
auction or call for tenders for the grant of a new lease.

Ministry’s Response

As per the Shooting and Fishing Leases Act, the decision to choose the method to be
used for the grant of Shooting and Fishing Lease, rests with the Minister.

MAIFS is of the view that a coherent approach be adopted for the granting of all types
of leases by the Government.

Non-compliance with Legislations and Conditions of Deed of Lease

Shooting and Fishing/Eco-Tourism leases over a total extent of 1,839.19 hectares of


State Lands were granted to six lessees for a period of seven years in different regions as
shown in Table 15-2.

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ATTORNEY-GENERAL’S OFFICE, MINISTRY OF AGRO-INDUSTRY AND FOOD SECURITY
Table 15-2 Shooting and Fishing / Eco-Tourism Leases

Lessee Extent of Land Lease Period Region


Leased (Ha)
1 175.18 25.05.2019 - 24.05.2026 Petrin
2 538.41 08.09.2014 - 07.09.2021 Kanaka
3 482.76 08.09.2014 - 07.09.2021 Moka
4 170.00 09.05.2019 - 08.05.2026 Moka/Plaine Wilhems
5 250.76 30.07.2021 - 29.07.2028 Grand Bassin
6 222.08 08.09.2021 - 08.09.2028 Pradier, Gouly Père and
Gouly Fils
Total 1,839.19

Source: Lessees’ files

None of the six lessees had complied with the provisions of the Shooting and Fishing
Leases Act and the conditions of their deeds of lease.

Four of the six lessees, namely Lessees 1, 2, 3 and 5 had also not complied with the
provisions of the Forests and Reserves Act.

However, the Ministry did not issue any notice to cancel their leases as stipulated at
paragraph 9 of the Schedule to the Shooting and Fishing Leases Act.

Subletting of Leased Land without Ministry’s approval

The following lessees had sublet their leased lands without approval of the Ministry:

Lessees 2 and 4 had sublet a portion of their leased lands.

Lessee 2 had illegally sub-divided the leased land into three blocks and had sublet them
to three different lessees.

Lessee 4 has been subletting the hunting lodge located on the leased land for
entertainment events such as wedding ceremonies and other functions not related to
shooting and fishing activities. In view of such activities not provided for in the deed
of lease, the Forestry Service recommended, on 5 November 2020, that the Shooting
and Fishing lease should not be renewed. A new lease for another seven-year period
from 9 May 2019 to 8 May 2026 was approved on 13 July 2021 and the deed of lease
was signed on 20 July 2021.

Illegal Constructions

Contrary to the conditions of the deed of lease, Lessees 1, 3 and 5 had illegally built
structures on the leased lands without the written authorisation of the Ministry.

The land leased to Lessee 1 was not used for the purpose of shooting and fishing,
or eco-tourism activities. The lessee had constructed a track road of four metres

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ATTORNEY-GENERAL’S OFFICE, MINISTRY OF AGRO-INDUSTRY AND FOOD SECURITY
wide with a perimeter of 636 metres on the leased land without the Ministry’s
authorisation.

Three gates and fencing were erected by Lessee 3 over the common forest tracks on
the leased land without the authorisation of the Ministry. In May 2021, the Forestry
Service gave the lessee one month’s delay to remove the gates and fencing. Despite
several reminders were sent to the lessee for the removal of the gates and fencing,
same were removed in June 2023, with a delay of 22 months.

Lessee 5 had illegally erected an artisanal bridge made up of pine and guava poles.
Same was dismantled on 16 March 2023 by the Forestry Service.

Breach of Forests and Reserves Act

During a patrol carried out by the Forestry Service on 25 May 2022, it was observed
that Lessee 2 had destroyed some 180 trees, in breach of the Forests and Reserves Act.
The offence was not recorded in the Contravention Register and thus, the lessee was
not prosecuted. On 7 June 2022, the Forestry Service recommended the Ministry to put
on hold the renewal of the lessee’s lease. On 26 September 2022, informed the lessee
that the lease which expired on 7 September 2021 was not renewed.

The 7-year lease valid up to 7 September 2021 of the lessee was not produced to NAO.

Outstanding Rental not settled

The total amount of rent due by Lessees 1 and 6 was Rs 1,154,667 as at 30 June 2023.

Rent due by Lessee 1 amounted to Rs 527,291 for the period 8 September 2022 to 7
September 2024. The lessee was requested to effect payment on three instances, lastly
on 13 March 2023. On 19 May 2023, however, the lessee was informed that payment
of the amount due would not be accepted as a contravention for illegal construction of
a track road had been established.

As regards Lessee 6, the 7-year lease from 8 September 2021 to 7 September 2028 was
approved on 16 February 2022 and the lessee was notified of the renewal on 22
February 2022. Rental for the period 8 September 2021 to 7 September 2023, totalling
Rs 627,376, was last claimed from the lessee in October 2022. Despite reminders were
issued, the outstanding amount for the period 8 September 2021 to 7 March 2023
remained unsettled and on 7 March 2023, the lease was not renewed. Moreover, the
deed of lease for the period starting 8 September 2021 was not signed by the lessee.

Deed of lease made on larger extent of State Lands than that approved

On 30 July 2021, the grant of a seven-year lease to Lessee 5 over an extent of 213.74
hectares of State Lands for the period 30 July 2021 to 29 July 2028, was approved.

The deed of lease was, however, made for an extent of 250.76 hectares, instead of
213.74 hectares as approved. As of August 2023, approval for the additional extent
of 37.02 hectares was not seen.

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ATTORNEY-GENERAL’S OFFICE, MINISTRY OF AGRO-INDUSTRY AND FOOD SECURITY
The deed of lease was signed on 17 February 2022, that is, more than six months
after the start of the lease.

The Forestry Service, on 7 March 2023, issued a notice of cancellation of the deed
of lease to take effect 48 hours after issuance.

Root Causes

The Conservator of Forests had not ensured that:

the lessees complied with the terms and conditions of the deed of lease, the Shooting
and Fishing Leases Act, and the Forests and Reserves Act; and

the Forest Officers carried out regular patrols and reported any offences caused or
illegal activities being carried out on leased lands.

Recommendations

The Accounting Officer should ensure that:

the terms and conditions of the deed of lease and relevant legislations are complied
with by the lessees;

the officers of the Forestry Service carry out regular patrols and take appropriate
prompt actions in case offences are committed by the lessees.

Ministry’s Response

The Forestry Service is to ensure that all terms and conditions of the leases are
complied with.

Patrols over the land leased under shooting, fishing and eco-tourism activities would
be enhanced through the use of drones.

Actions have been initiated for the filling of vacancies at the level of the Forestry
Service so that the Department is adequately manned to fulfil its mandate.

Enjoyment of Rights by Lessees still owing rentals/rentals being paid with delay

Out of 76 lessees of Shooting and Fishing/Eco-Tourism lease, 14 lessees owed rental


amounting to some Rs 4.5 million.

The 14 lessees had not complied with Section 8 of the Shooting and Fishing Leases
Act. They enjoyed their rights to the leased land during the same year in breach of
Section 9(1) of the said Act which stipulates that “The lessee shall not enjoy any of the
rights leased to him under this Act in respect of any period of the lease extending from
1 June in any year to 7 September in the same year unless and until he has paid the
rent in respect of the following year of the lease”.

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Of the remaining 62 lessees, some have not paid their rent prior to 1 April but have
nevertheless enjoyed the rights to the land leased to them from 1 June of same year.

Root Cause

The Conservator of Forests had not ensured that the provisions of the Shooting and Fishing
Leases Act were always complied with.

Recommendation

The Conservator of Forests should ensure that the provisions of the Shooting and Fishing
Leases Act are always complied with by the lessees.

Ministry’s Response

Corrective measures have already been taken to ensure a systematic approach for
monitoring of Shooting and Fishing leases.

As regards enjoyment of rights by lessees still owing rentals and rentals being paid
with delay, most of the rentals due have been retrieved.

The Conservator of Forests would be requested to ensure close follow-up so that there
is no delay in the payment of rental due by lessees.

Late Signature of Deed of Lease/Deed of Lease not seen

Section 5(5) of the Shooting and Fishing Leases Act had not always been complied
with. Instead of signing the deed of lease within one month of the commencement of
the lease, cases were noted where the deeds were signed 13 to 17 months after the start
date of the lease.

In one case, the deed of lease for the period 8 September 2021 to 7 September 2028
was still not signed as at August 2023, despite several requests made by the Ministry
to the lessee.

In four cases, the deeds of lease were not made available to NAO Officers.

Root Causes

The Conservator of Forests had not ensured that:

Deeds of lease were signed within one month of the commencement of the lease as
provided in the Shooting and Fishing Leases Act; and

Registered copy of all deeds of lease were properly kept at the Forestry Service.

Recommendations

The Accounting Officer should ensure that:

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the deeds of lease are signed both by the Ministry and the lessees within one month of
the commencement of the lease; and

the Conservator of Forests properly keep all deeds of lease.

Ministry’s Response

All records, including deed of lease, are now being kept properly at the level of the Forestry
Service.

15.3.2 Lapses in the Operational Activities of the Cattle Reproduction Farm

The aim of developing the livestock sector is to boost local production of meat and
marketing of milk, thereby increasing food self-sufficiency and the sector’s contribution to
the economy.

At paragraphs 16.1 and 18.1 of the Audit Reports for the financial years 2019-20 and
2020-21 respectively, it was highlighted that additional amenities were not provided at the
Cattle Reproduction Farm and that the operation of the farm was delayed. It was further
stated that the Livestock Zone project was set aside by the Ministry in October 2020 and
instead, merging of the infrastructure of the Livestock Zone with the Cattle Reproduction
Farm was opted for.

To meet this objective, the Ministry invested some Rs 59.2 million in the Cattle
Reproduction Farm as at 30 June 2023.

Findings

Delay in the Provision of Amenities

The Cattle Reproduction Farm has been operational since December 2019, despite the lack
of certain basic amenities such as electricity and milking unit.

As of August 2023, some 44 months after its inception, the basic amenities were still not
provided at the farm. In the absence of the required amenities, the farm was not operational.

Root Cause

The Director, Agricultural Services did not take appropriate action to ensure basic
amenities were provided for the operation of the farm.

Recommendation

The Accounting Officer should ensure that procurement procedures for providing the basic
amenities are initiated without further delay.

Ministry’s Response

Actions have been initiated to ensure that basic amenities are provided such as:

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ATTORNEY-GENERAL’S OFFICE, MINISTRY OF AGRO-INDUSTRY AND FOOD SECURITY
(i) installation of electrical system project is presently at evaluation stage;

(ii) refurbishment of farm buildings B, C and D. Actions have already been initiated
to launch procurement exercises for fixing of metal enclosures, shutters, rainwater
harvesting system, concrete flooring of exercise yards, construction of ramps and
setting up of waste disposal system, and supply, installation, testing and
commissioning of a slurry tanker; and

(iii) bid for the supply and installation of chipper, launched on 25 October 2023, are
being evaluated.

Setting up of a milking unit with cooling tank and fixed milking machine project could
not be entertained in the absence of the electrical network.

Slow Growth - Farm not operating at Full Capacity

With the merging of the Heifer Farm with the Livestock Zone in October 2020, the capacity
to accommodate animals at the Cattle Reproduction Farm has increased up to
300. However, as at 30 June 2023, the farm had only 73 animals and was thus, operating at
24 per cent of its full capacity.

In order to provide weaners of good quality and to prevent inbreeding/degeneration of


stocks, new breeding stocks were to be introduced at least once every two years. However,
due to the unavailability of an isolation unit, no new stocks have been imported for breeding
since year 2019.

Root Causes

The Director, Agricultural Services had not:

taken prompt action to increase the number of animals to enable the Cattle
Reproduction Farm to operate at its full capacity;

ensured that an isolation unit be set up by the Ministry; and

introduced new breeding stocks since year 2019.

Recommendation

The Accounting Officer should ensure that appropriate actions are initiated to enable the
farm to operate at its full capacity to attain sustainability and growth in animal production
to meet the needs of the farming community.

Ministry’s Response

The Ministry is contemplating the rehabilitation of the Richelieu Quarantine Unit.

The letter of acceptance for the import of breeding animals was issued on 21 June 2023.
However, the delivery of animals has not yet been effected given that there are issues
with the pedigree certificates which have to be addressed.

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Actions are being taken to ensure that the farm becomes fully operational in order to
meet the needs of the farming community.

Depletion of the Parental Stock

As at 30 June 2023, the animal strength at the farm comprising cows and heifers, weaned
and unweaned calves, was 73.

Since its operation in December 2019, the farm had only one bull and 47 cows which
were used for mating and reproduction purposes. The bull passed away in March 2023
and no replacement was made. Artificial insemination was resorted to for reproduction
but the success rate was low as compared to normal mating. As at August 2023, the
Cattle Reproduction Farm had 30 cows, but still without a bull for mating and
reproduction purpose.

During the period December 2019 to July 2023, a decrease in the livestock population
from 48 to 32 was noted.

During the financial year 2022-23, 11 animals died, including eight due to splayed legs
caused by the smooth flooring of the farm which was too slippery.

Root Causes

The Director, Agricultural Services had not taken appropriate actions to:

Import new breeding stocks since December 2019.

Introduce more bulls at the farm since its operation in December 2019 and following
the death of the only bull in March 2023.

Ensure sufficient parental stock and the availability of sufficient animals to meet the
demands of the farming community.

Recommendations

The Accounting Officer should ensure that the Director, Agricultural Services:

Take appropriate measures to import new breeding stock at regular time intervals.

Procure additional bulls to increase animal production.

Ministry’s Response

The Ministry has already initiated action for the import of two breeding bulls.

The breeding programme is ongoing and the objectives of the farm to produce weaners
for sale to the breeding community will be reached.

Import of pedigree breeding stock to ensure a good parental stock has already been
undertaken.

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ATTORNEY-GENERAL’S OFFICE, MINISTRY OF AGRO-INDUSTRY AND FOOD SECURITY
Site Visit

On 5 September 2023, a site visit was carried out by NAO Officers at the Cattle
Reproduction Farm in the presence of Officers of the Ministry.

Since the operation of the farm in December 2019, essential amenities such as a mating
pen and a maternity pen, were not constructed. Hence, instead of protecting the
pregnant cows from being harmed by other animals and ensuring that the delivery was
done in hygienic conditions, they were kept along with other animals. In February
2023, two unweaned calves had died at the farm.

The track road leading to the entrance of the farm was covered with a thick layer of
sticky mud, thus causing damage to the tractors and other vehicles. For instance, one
tractor broke down in August 2022 and again in September 2022 and, in February 2023
a trailer was reported to be damaged due to the bad condition of the track road. Refer
to Figure 1.

Figure 1: Condition of the track road

No proper wiring system was installed and electrical wires for the connection of light
bulbs inside the farm were hanging loosely.

The initial grooves on the floor were smooth, thus making it difficult for the animals
to stand and to move around. In order to avoid incidents like slipping and death by
splayed legs, especially for the new born calves, floor mats were used. Refer to
Figures 2 and 3.

Figure 2: State of the flooring Figure 3: Mat being used for new born

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ATTORNEY-GENERAL’S OFFICE, MINISTRY OF AGRO-INDUSTRY AND FOOD SECURITY
The premises of the former Livestock Zone were in a very deplorable state and had no
electricity. The exercise yards for the animals were covered with mud and were
slippery. Refer to Figure 4.

As no drains or septic tanks for animals’ wastes existed, these were evacuated at the
entrance of the farm. The situation was even worse during heavy rainfall when the
animals’ waste and mud remained stagnant at the entrance of the farm. This situation
also attracted flies and as such, represented a serious health hazard for the animals and
for the Officers working in such environment. Refer to Figure 5.

Figure 4: Exercise yards covered with mud Figure 5: Premises of ex-Livestock Zone

The second farm building, with the objective to accommodate newly imported
breeding stock during year 2023, was empty and was awaiting to be connected to the
electrical network.

Root Causes

The Director, Agricultural Services had not ensured that:

works pertaining to drains, septic tanks and access roads were completed;

yards were regularly cleaned for the animals to roam around in proper and hygienic
conditions;

a maternity pen was constructed inside the farm to enable deliveries in hygienic
conditions; and

all the buildings were provided with electricity supply.

Recommendations

The Accounting Officer should ensure that:

proper drains, septic tanks and access roads to the pens are provided;

yards are regularly cleaned for the animals to roam around in proper and hygienic
conditions;

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ATTORNEY-GENERAL’S OFFICE, MINISTRY OF AGRO-INDUSTRY AND FOOD SECURITY
maternity pen is constructed on the farm to enable deliveries in hygienic conditions.;
and

the electrical wirings in the farm building are properly done.

Ministry’s Response

A dedicated pen in the heifer farm building has been refurbished to house only pregnant
cow and to cater for newborns to ensure minimum contact with other animals and to
ensure optimum hygienic conditions.

A request was made on 24 April 2023 to ESD to effect repairs on the electrical system.
The electrical installation project is presently at evaluation stage.

The animals are being released in pastures since September 2023, and thus, wastes are
not accumulated resulting in a better overall environment.

A waste disposal system has been included in a future project for the refurbishment of
the ex-Livestock Zone buildings.

Wrong Cost Estimates leading to Delay in Award of Contracts

In the following two cases, tender procedures were delayed due to the wrong computation
of estimated costs.

(a) Acquisition of 57 Animals

In September 2022, approval for the acquisition of 52 animals, comprising 40 breeding


ewes, 10 breeding rams and two breeding bulls was obtained from the Ministry. The first
tender exercise, launched in November 2022, was not successful as the price quoted by the
sole bidder was higher than the estimated cost of the animals by 22.6 per cent. Following a
second tender exercise made in March 2023, a contract for the procurement of 57 breeding
sheep and cattle was awarded to the lowest substantially responsive bidder for some
Rs 5.6 million on 21 June 2023. As per the contract, the import date was set before
15 November 2023 and the delivery of the animals (after the quarantine period) was
expected to be 30 November 2023.

The animals had, however, not reached Mauritius as at that date and the import permit of
the contractor had already expired on 10 October 2023.

(b) Setting up of an Isolation Unit

In the absence of a quarantine unit for imported animals, the Ministry was in the process of
setting up an Isolation Unit at Albion, to be used to quarantine imported animals which
would later be transferred to the Melrose Cattle Reproduction Farm and Salazie Sheep
Reproduction Farm. In November 2022, a tender for the setting up of the Isolation Unit was
launched. However, the price quoted by each of the two bidders was higher than the
estimated cost and the procurement exercise had to be relaunched in June 2023. Again, the
price quoted by the sole bidder exceeded the estimated cost by more than 100 per cent.

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ATTORNEY-GENERAL’S OFFICE, MINISTRY OF AGRO-INDUSTRY AND FOOD SECURITY
As of August 2023, the Ministry still has no Isolation Unit and, consequently, was not able
to import new breeding stock.

Root Cause

The Director, Agricultural Services had not ensured that the Engineering Division had
carried out proper market surveys for the preparation of the cost estimates.

Recommendation

The Accounting Officer should ensure that the cost estimate for any procurement or
construction project reflects the market value.

Ministry’s Response

Delivery of animals has not been effected as there is an issue with the selection of
animals and their pedigree certificates that are not compliant.

The delay in the award of contract for the project “Isolation Unit” at Albion did not
cause any inconvenience as the contract for the procurement of breeding animals
awarded on 21 June 2023 included the quarantine of imported animals.

Due to the lengthy procurement procedures, there is a high probability that the price
varies between the survey and the bidding exercise.

15.3.3 Ineffective Administration of State Lands for Agricultural Purposes

The Land Use Division (LUD) was set up to manage agricultural State Lands falling under
the purview of MAIFS. It is entrusted with the responsibility to lease agricultural
State Lands to the farming community and to ensure that the leased lands are exploited for
the intended purpose.

Findings

Non-enforcement of Lease Conditions

Three Cooperative Societies had pledged the leasehold rights under the agricultural land
lease to secure loans of some Rs 3.4 million, Rs 2.9 million and Rs 1.8 million, respectively
from financial institutions.

Lessee A: Leasehold Rights pledged for loan of Rs 3.4 million and Lease Agreement
not regularised since February 2019

Lessee A held two lease agreements for an extent of 18.92A and 0.75A of agricultural land
at Mare D’Albert for the purpose of livestock production for a period of seven years, which
ended in February 2019. In the financial year 2013-14, the lessee secured loans for the total
sum of some Rs 3.4 million from a local bank under the Food Security Fund Scheme for
the construction of a model farm and the purchase of heifers.

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ATTORNEY-GENERAL’S OFFICE, MINISTRY OF AGRO-INDUSTRY AND FOOD SECURITY
As of October 2023, the lessee was still carrying out its activities on the State Lands
although the lease agreements had expired since February 2019 and payment of rental was
not effected.

Ministry’s Response

Survey exercise has been completed on 26 June 2023 and PIN has been accordingly secured
and procedure of renewal has subsequently been initiated after consultation with FAREI on
occupation of plots previously allocated to the Cooperative Society.

Lease agreements are drawn from the date of expiry of the previous lease, that is, from
21 February 2020 till 20 February 2027 and rents are recouped for the same period since
the lessee was allowed to carry out agricultural activities on the said State Lands.

Lessee B: Mismatch between Conditions of Lease Agreement and Loan purpose

Lessee B was granted a lease for five plots of State Lands at Curepipe Experiment Station
for a total extent of 12.53A for the purposes of food crop production, and the setting up of
a poultry farm and greenhouses. The duration of the lease was for seven years from
November 2014 to November 2021.

In year 2014, the lessee pledged the leasehold rights on three plots of land to an extent of
9.74A with a local bank for a total loan amount of Rs 2,925,000 under the Food Security
Fund Scheme for the construction of a cowshed, purchase of heifers, purchase of equipment
and fodder production. The purpose of the loan was not in line with the conditions of the
lease.

As of October 2023, the lease agreement for the five plots of State Lands was not renewed.
Hence, no payment of rental was made.

Ministry’s Response

After site visits effected and recommendations made by LUD and FAREI, approval has
been conveyed:

to draw a lease agreement in respect of a company on an extent of 0.27A, being part


of plot No. 15, for agro-processing activities;

to draw a new lease agreement in respect of another company on plots No. 2, 4 and
6 for food crop production; and

renewal of lease agreements was not recommended for plots No. 15 and 16 since these
were reported to be in abandoned state.

MAIFS is in the process of renewing the above leases and it should be noted that these will
be drawn subject to payment of arrears.

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ATTORNEY-GENERAL’S OFFICE, MINISTRY OF AGRO-INDUSTRY AND FOOD SECURITY
Lessee C: State Lands Leased not used for intended purpose

Lessee C held a lease agreement for three plots of State Lands for a total extent of 41A 46P
which ended in October 2016, for integrated farming activities at Gardes & Deribes.

In year 2011, the lessee pledged the leasehold rights as security for a loan of Rs 1,775,000
from a local bank, based on a correspondence from the Ministry in December 2011 that the
lease would be renewed for a further period of seven years to end in October 2023. During
site visits effected by LUD Officers in April 2023 and September 2023, the State Lands
were reported to be in a neglected state and integrated farming activities were not being
carried out.

As of October 2023, new lease agreement was not signed.

Ministry’s Response

The LUD recommended to declare the said portion of State Lands vacant.

Root Causes

The Officer-in-Charge of LUD did not ensure that the leased State Lands were used for
the intended purposes and objectives.

The Accounting Officer did not ensure that the conditions of the pledge on leasehold
rights were formulated in the interest of the Ministry.

Recommendations

The Accounting Officer should ensure that:

the leased State Lands are used for the intended purpose and objectives; and

the conditions of the pledge on leasehold rights are properly formulated in the interest
of the Ministry.

Ministry’s Response

Remedial actions have been taken:

Vacant posts at the LUD have been filled to increase the level of monitoring of State
Lands.

The lease agreement has been amended with new and more stringent conditions with
the advice of the AGO to ascertain immediate action against defaulters.

Action has been initiated to digitalise all processes at the LUD, starting from
application till monitoring and renewal procedures.

The review of rental fees for agricultural State Lands is under discussion.

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ATTORNEY-GENERAL’S OFFICE, MINISTRY OF AGRO-INDUSTRY AND FOOD SECURITY
15.3.4 Lapses in Management of Mechanical Workshop and Transport

The Richelieu Engineering Division provides essential technical and engineering services
while the Transport Division offers transport facilities to all Divisions and Departments
under the responsibility of the Ministry.

During the financial year 2022-23, some Rs 4.7 million and Rs 7.5 million were disbursed
as maintenance costs of vehicles and fuel costs, respectively.

Findings

Delay in Repairs of Vehicles

Most of the Ministry’s vehicles, except for the new ones still under warranty, were repaired
at the Engineering Division. Repairs of those vehicles that could not be undertaken were
outsourced to private garages under a framework agreement.

As of 18 August 2023, out of 16 vehicles under repairs at the Engineering Division


and at the private garages, repair works of 14 vehicles still needed to be completed and
the vehicles had remained in the garages for periods ranging from 18 to 675 days. The
delay in repairs was attributed to late delivery of spare parts.

Delivery of ordered spare parts was inadequately monitored at the Engineering


Division, resulting in delays ranging from 14 to 464 days and ultimately in longer stay
of vehicles in workshop.

Root Causes

The Principal Agricultural Engineer had not ensured that spare parts were delivered
within a reasonable time for the repairs of vehicles at the earliest possible.

A full time Procurement and Supply Officer was not posted in the Procurement Section
of the Engineering Division.

Recommendation

The Accounting Officer should ensure that a full time Procurement and Supply Officer is
posted in the Procurement Unit for the timely delivery of spare parts to reduce the period
of stay of vehicles in the workshop.

Ministry’s Response

A full time officer from the Procurement and Supply Cadre would be provided to the
Division.

An electronic Vehicle Diagnosis tool would be made available.

Filling of the vacancies for Tradesman Assistant and Tradesman to cater for the
increasing number of vehicles, equipment, plant and machinery would be made.

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ATTORNEY-GENERAL’S OFFICE, MINISTRY OF AGRO-INDUSTRY AND FOOD SECURITY
Training and Capacity Building programmes for the Engineers, Chief Tradesman,
Tradesman and Tradesman Assistant would be organised.

Regular follow-ups would be made with the Procurement Section to ensure timely
provision of spare parts to the Engineering Workshop.

Ministry’s Fleet of Vehicles not available

In July 2023, a list of 76 vehicles (42 still in use and 34 boarded vehicles) was submitted
to NAO Officers by the Transport Division.

Thirty one vehicles were not recorded in the Plant Register kept at the Transport
Division.

The list of vehicles posted at the Forestry Service was not submitted to NAO Officers.

Hence, a complete list of the Ministry’s fleet of vehicles as at October 2023 was not
available.

Root Cause

The Officer-in-Charge of the Transport Section had not updated the Plant Register for
control purposes.

Recommendation

The Accounting Officer should ensure that the Plant Register is always kept up to date.

Ministry’s Response

The Transport Section has already updated the Plant Register for the Division. The Forestry
Services has its own Plant Register kept at their Division.

Physical Surveys - Boarded Vehicles Heavily Corroded

On 10 August 2023 and 1 September 2023, physical surveys of 38 vehicles awaiting to be


boarded, including 26 vehicles already condemned by the last Board of Survey on 27 April
2021, parked at the Richelieu Engineering Division, Transport Division and Forestry
Service, were carried out by NAO Officers jointly with the Ministry’s Officers.

Since April 2021, for some three years, the condemned vehicles were still in the open yard
at the Curepipe Forestry Service. These vehicles were exposed to extreme weather
conditions, which caused heavy corrosion to the body parts, thereby reducing their resale
value and contributing to their accelerated deterioration. Refer to Figure 1.

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ATTORNEY-GENERAL’S OFFICE, MINISTRY OF AGRO-INDUSTRY AND FOOD SECURITY
Figure 1: Boarded Vehicles kept in the open yard at Curepipe Forestry Service

Root Causes

The Accounting Officer had not initiated timely action for:

The setting up of a proper Board of Survey for the 12 vehicles awaiting to be boarded.

The disposal of the 26 vehicles already condemned.

Recommendation

The Accounting Officer should set up a proper Board of Survey at the earliest possible for
the 12 vehicles awaiting to be boarded and initiate action for the disposal of the 26 vehicles
already condemned.

Ministry’s Response

As per Board of Survey conducted on 27 April 2021, there were 26 vehicles for which
decisions have already been taken and necessary action for their disposal are being taken.
As regards to the remaining vehicles awaiting to be boarded, the Ministry of National
Infrastructure and Community Development and the Ministry of Finance, Economic
Planning and Development (MoFEPD) were requested to designate a Chairman and
members to constitute a Board of Survey for their disposal.

15.3.5 Non-compliance with Governance Issues

Strategic Overview - Targets Not Achieved

For the financial year 2022-23, one key deliverable with ten Key Performance Indicators
(KPIs) were determined by MAIFS. As at 30 June 2023, the targets set for KPIs and
deliverable to improve food security level by increasing local production of all non-sugar
crops and livestock were partly achieved by nine Delivery Units under the Ministry as
shown in the Table 15-3.

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Table 15-3 Achievements of the Delivery Units

Achievements as Delivery Units


at 30.06.2023

Agricultural Marketing Board and Horticulture Division

51 – Food Agricultural Research and Extension Institute, Agricultural


Services Division, Livestock Division and Forestry Service

81 – Mauritius Cane Industry Authority and Entomology Division

96 – Small Farmers Welfare Fund

Source: Draft Annual Report 2022-23 MOAIFS

Root Cause

The Accounting Officer as the Chairperson of the Monitoring Committee had not ensured
that the key deliverable with ten KPIs were being achieved.

Recommendation

The Accounting Officer should ensure that the Monitoring Committee closely monitors the
targets set by the Ministry.

Ministry’s Response

A Monthly Project Monitoring Committee is already set up since March 2023 to


examine the project progress level for each sector.

There is another Monitoring Committee to follow on progress and targets achieved in


line with the Government Programme 2020-2024.

A Project Management Committee has been set up in October 2023 and chaired by the
Minister.

Audit Committee – Provisions of the Audit Committee Charter not adhered to

Audit Committee (AC) plays a key role in public accountability by providing independent
oversight of the organisation’s governance, risk management and internal control practices,
thus providing confidence in the integrity of these practices.

Contrary to paragraph 23(i) of the Audit Committee Charter, the Committee had
submitted its Action Plan for the financial year 2022-23 to the Ministry of Financial
Services and Good Governance (MFSGG) on 29 November 2022 instead of 1 July
2022.

As per paragraph 23(iii) of the AC Charter, the Accounting Officer of the Ministry
shall not later than 15 working days after the end of the quarter submit a Quarterly
Report of the AC to the Office of Public Sector Governance (OPSG).

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ATTORNEY-GENERAL’S OFFICE, MINISTRY OF AGRO-INDUSTRY AND FOOD SECURITY
Quarterly Reports of the AC were, however, submitted to OPSG with delays ranging
from 6 to 43 days.

Contrary to paragraph 23(iv) of the AC Charter, the notes of meetings of the AC held
on 30 August 2022 and 25 October 2022, due to be submitted to OPSG on 20
September 2022 and 15 November 2022 respectively, were submitted on 29 November
2022.

The Performance Agreement for the financial year 2022-23 was submitted to MFSGG
on 14 September 2022, instead of the beginning of the financial year on 1 July 2022,
that is with a delay of 2½ months. Paragraph 26 of the AC Charter was, therefore, not
adhered to.

On 12 August 2022, the AC of MAIFS for the financial years 2022-23 and 2023-24
was reconstituted. Contrary to paragraph 9 of the AC Charter, appropriate and timely
training, including an induction programme to be conducted by OPSG, were not
provided to the Chairperson and members of the AC.

A Register of Conflict of Interest for the financial year 2022-23 was not maintained by
the Secretary of the AC, contrary to paragraph 15 of the AC Charter.

Root Causes

The Chairperson of the AC had not ensured that the provisions of the AC Charter were
adhered to.

The Accounting Officer had not ensured that the Chairperson and Members of AC
were provided with appropriate and timely training.

Recommendations

The Chairperson of the AC should ensure that all procedures of the AC Charter are
strictly complied with.

The Accounting Officer should ensure that the Chairperson and Members of AC are
provided with appropriate and timely training.

Ministry’s Response

The AC Charter has been circulated to all the members of the AC on 17 January 2024
for strict compliance with the provisions of the Charter.

During financial year 2022-23, the Ministry did not receive any official
correspondence on training programs being organised by OPSG. Thus, no training was
provided to the Chairperson and the members of the AC.

In August 2023, five members of the AC have already attended the training on
“Improving Public Sector Governance through Audit Committees’ provided by the
Civil Service College.

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ATTORNEY-GENERAL’S OFFICE, MINISTRY OF AGRO-INDUSTRY AND FOOD SECURITY
Internal Audit – Audit Plan not Completed

The purpose of the Internal Audit (IA) is to enhance and protect the organisational value
by providing an independent and objective assurance. IA assists management in
accomplishing its objectives and in improving the effectiveness of the organisation’s risk
management, control and governance processes.

Findings

Some 30 per cent of the auditable areas of the Annual Internal Audit Plan for financial
year 2022-23 were not done.

Out of 75 recommendations made by the Internal Control Unit, 32 per cent of the
recommendations were not yet implemented.

Root Cause

The AC had not ensured that all auditable areas of the Annual Internal Audit Plan had been
audited.

Recommendation

The AC should ensure that all auditable areas in the Annual Internal Audit Plan are
achieved.

Ministry’s Response

Regular follow-ups would be made at the level of the Ministry to ensure that the
recommendations are implemented.

Risk Management Framework not established

On 28 December 2021, a Circular highlighting guidelines for the establishment of Risk


Management in the Public Sector was issued by MoFEPD.

Some 23 months later, that is in November 2023, a Risk Management (RM) Framework
was still not established.

Root Cause

The Accounting Officer had not ensured the timely establishment of the RM Framework.

Recommendation

The Accounting Officer should establish a RM Framework at the earliest in compliance


with MoFEPD’s Circular.

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ATTORNEY-GENERAL’S OFFICE, MINISTRY OF AGRO-INDUSTRY AND FOOD SECURITY
Ministry’s Response

Approval was obtained on 09 January 2024 to seek the assistance of MoFEPD with officers
having the required expertise to establish a comprehensive Risk Management Framework
at this Ministry in collaboration with the Internal Control Unit. An official letter was
addressed to MoFEPD on 17 January 2024 requesting the assistance.

15.3.6 Governance Issues - Non-compliance with Legislations

Provisions have been made in various legislations to impose a statutory responsibility on


Accounting Officers and Boards of Statutory Bodies with the objective of strengthening
accountability and transparency in the public sector.

Findings

Non-submission of Report on Performance

As of 18 December 2023, the Report on Performance of the Ministry of Agro-Industry and


Food Security for the financial year 2022-23 had not yet been submitted to MoFEPD,
despite the statutory deadline being 31 October 2023.

Non-submission of Financial Statements for Audit

The Statutory Bodies (Accounts and Audit) Act requires the Chief Executive Officer of a
Statutory Body to submit the Annual Report to the auditor not later than four months after
the end of every financial year.

As of 14 December 2023, the following Statutory Bodies falling under the purview of the
Ministry of Agro-Industry and Food Security, have not submitted their Financial
Statements for audit for periods as shown in Table 15-4.

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ATTORNEY-GENERAL’S OFFICE, MINISTRY OF AGRO-INDUSTRY AND FOOD SECURITY
Table 15-4 Financial Statements not submitted to NAO for Audit

Financial No. of Remarks


Statutory Body Financial
Year/Period Statements

Small Farmers Welfare Fund 2019-20 to 2022-23 4


Mauritius Society for Animal 01.01.2016-30.06.2017, 7
Welfare 2017-18 to 2022-23
Sir Seewoosagur Ramgoolam 2020-21 to 2022-23 3
Botanical Garden Trust

Vallée D’Osterlog Endemic 2020-21 to 2022-23 3


Garden Foundation
Sugar Cane Planters Trust 2007-08, 3 Ceased
2008-09 & Operation on
24.07.2010
01.07.2009-24.07.2010

Source: NAO records

Special Funds: Financial Statements not submitted for Audit

As per paragraph 46(5) of the Native Terrestrial Biodiversity and National Parks Act, the
Committee shall, not later than three months, after the end of each financial year submit an
annual statement of receipts and payments and a balance sheet of the Fund.

As of 14 December 2023, the National Parks and Conservation Fund (NPCF) has not yet
submitted the annual statement of receipts and payments and a balance sheet for the
financial years 2021-22 and 2022-23.

Annual Reports not laid before the National Assembly

The Statutory Bodies (Accounts and Audit) Act requires a copy of the annual report and
audited accounts of every Statutory Body to be laid before the National Assembly at the
earliest opportunity.

As of 14 December 2023, Annual Reports of two Statutory Bodies had not yet been laid
before the National Assembly as shown in Table 15-5.

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ATTORNEY-GENERAL’S OFFICE, MINISTRY OF AGRO-INDUSTRY AND FOOD SECURITY
Table 15-5 Annual Reports including Audited Financial Statements not laid before
the National Assembly

No. of
Financial Date Financial
Statutory Body
Year/Period Certified Statements

Mauritius Meat Authority 2019-20 11.08.2021 1

Vallée D’Osterlog Endemic 2015 14.03.2023


Garden Foundation 01.01.2016- 13.07.2023 2
30.06.2017
Source: NAO records and National Assembly Hansard

Root Cause

The Accounting Officer had not ensured that the provisions made in the Statutory Bodies
(Accounts and Audit) Act have been complied with.

Recommendations

The Accounting Officer should:

ensure that Statutory obligations are complied with; and

exercise control over Statutory Bodies and other entities operating under the aegis of
the Ministry to ensure that they fulfil their statutory responsibilities regarding the
preparation of financial statements, their submission for audit and tabling same before
the National Assembly.

Ministry’s Response

The Finance Section of the Ministry is providing assistance to the Mauritius Society
for Animal Welfare for the preparation of the financial statements.

Financial statements of Sir Seewoosagur Ramgoolam Botanical Garden Trust are


being reworked in IPSAS format.

The financial statements 2020-21 of the Vallée D’Osterlog Endemic Garden


Foundation will be submitted for audit and that for 2021-22 and 2022-23 will be
reworked to the IPSAS format.

The services of the Accountant-General`s Office is being sought to prepare the


accounts for Sugar Cane Planters Trust.

The Financial Statements of the NPCF are being reworked in the IPSAS format and
same will be forwarded in due course.

The Annual Report would be tabled to the National Assembly by mid-February 2024.

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ATTORNEY-GENERAL’S OFFICE, MINISTRY OF AGRO-INDUSTRY AND FOOD SECURITY
15.3.7 Follow-up of Findings Raised in Audit Report 2021-22

A follow up of matters raised in the Audit Report for the financial year 2021-22 was carried
out. The Ministry of Agro-Industry and Food Security was requested to inform NAO of the
actions that have been taken to address the findings and recommendations in the Report.
The information along with evidence collected through review of files and documents were
assessed and discussed with the Ministry.

The status on actions taken on findings since the publication of the Audit Report are
summarised below. Out of 18 findings, 10 (56 per cent) have been resolved, four
(22 per cent) have been partially resolved and four (22 per cent) have not been resolved.

SN Findings Ministry’s Response - NAO


Status as at February 2024 Comments
IT Projects - Implementation Delays (Page 245)
National Livestock Information System (NLIS)
1 The Technical Co-operation Programme As at date, the main activities of the
(TCP) between the Ministry, and Food project have been completed. A
and Agricultural Organisation (FAO) was validation workshop was held on
signed on 11 August 2021 and was 19 December 2023 with the
expected to be completed in July 2023. participation of various Partially
The project comprised two main stakeholders to take stock of the Resolved
components, namely Identification of three main achievements which
Animals at National Level and form part of the TCP.
Development of NLIS software. Regarding the information system,
(Pg 245, Para 15.1) it is at User Acceptance Testing. A
test version has gone live since 30
January 2024 as bugs are being
encountered. The issues are being
addressed by the supplier and the
officers of FAO.
Laboratory Information Management System(LIMS)
2 The system was planned to go live in The LIMS went live on 25
Resolved
September 2022. September 2023.
3 Identification of animals at National level The rate of application of
not yet done microchips is quite slow as there
The traceability of animals remained a are only three staff posted at the
challenge in the livestock sector since the NLIS. The Animal Production
record keeping system was not effective. Division (APD) has altered its
strategy by undertaking a
The Ministry purchased 10,200
procurement exercise to outsource Partially
microchips for some Rs 1.5 million, of
the microchipping exercise. This is Resolved
which 3,814 were utilised as of July 2022.
presently at the bid evaluation
Only 5 per cent of the targeted population
stage. In the event the bidding
of 70,000 animals, have been implanted
exercise is successful,
with microchips.
microchipping can be outsourced to
As of September 2022, the livestock external teams which would then
identification system was still at its speed up the process. As at
preliminary stage. (Pg 246, Para 15.1) December 2023, some 15,200

317
ATTORNEY-GENERAL’S OFFICE, MINISTRY OF AGRO-INDUSTRY AND FOOD SECURITY
SN Findings Ministry’s Response - NAO
Status as at February 2024 Comments
microchips have been acquired, out
of which 9,259 have already been
used (61 per cent). The
microchipping exercise will be
ongoing.
As for the development of the NLIS
software, the contract was awarded
in June 2023.
4 Delay in the Deliverables of TCP The main activities of the TCP have
An International Consultant was recruited been completed and a validation
in September 2022 to develop and workshop was held on 19
validate a traceability system for pigs, December 2023 with the
poultry and deer as well as for imported participation of various Resolved
livestock. There is the risk that the other stakeholders.
activities scheduled to be completed by
July 2023 would be delayed.
(Pg 246, Para 15.1)

5 Delay for LIMS to go live


Although training and data input in the LIMS went live on 25 September
system started in July 2020, it was only in 2023.
July 2022, that LIMS went on parallel live
phase.
Deadline for the completion of the project
was not seen. Resolved
Bugs and gaps detected were not fixed
during the support service.
User Acceptance Testing was not
available for the project
(Pg 247, Para 15.1)
Administration of State Lands for Agricultural Purposes – Ineffective Monitoring of
Compliance with Lease Agreements (Page 248)

Agricultural State Lands not yet leased

6 As at September 2022, out of a total of As at December 2023, some 3,674


5,023 plots (10,227.92 A) of agricultural plots of State Land have been
land, only 3,277 plots (7,500.48 A) were assigned PIN and survey exercise is
leased, of which 226 plots (382.8 A) were ongoing to acquire same for the
left in an abandoned state. The remaining remaining 1,349 plots.
1,746 plots (2,727.44 A), representing Only one Land Surveyor has been Partially
34.7 per cent, were not surveyed. No assigned duty at the Agricultural Resolved
Parcel Identification Numbers (PINs) Services for all survey works and
were assigned to these plots and hence, the Ministry has approved overtime
they could not be leased as per the for the survey team to work during
Cadastral Survey Act 2011. weekends to speed up the exercise
of PIN allocation.

318
ATTORNEY-GENERAL’S OFFICE, MINISTRY OF AGRO-INDUSTRY AND FOOD SECURITY
SN Findings Ministry’s Response - NAO
Status as at February 2024 Comments
1,972 plots comprising 3,110 A of arable
land, representing some 39 per cent, were
thus not used for agricultural purposes.
(Pg 248, Para 15.2)
Considerable Delay in Completion of Land Surveying Contract

7 As of September 2022: The contract of the Private


Only 14 per cent of the works has been Surveyor ended in May 2018 and
completed during a period of six years. was extended by 15 months up to
August 2019. The last submission
PINs in respect of 566 plots of land for the
of plans and PIN from the surveyor
total extent of 918 A were still not
was received at the Ministry on 19
assigned and submitted to the Ministry. Not
June 2020.
Payments totalling some Rs 3.1 million Resolved
have been effected to the private Land
Surveyor.
No liquidated damages have yet been
claimed for non-completion of works.
(Pg 248, Para 15.2)
Arrears of Revenue figure of Rs 12.8 million misstated

8 Unpaid rent in respect of 22 plots of The 22 plots of land have been


agricultural State Lands of a total extent allocated to new beneficiaries.
of 34.12 A leased for a period of three to
seven years were not computed and
included in the arrears figure as at 30 June Resolved
2022, although these lease agreements
were duly signed.
(Pg 249, Para 15.2)
Non-compliance with Conditions of Lease Agreement

9 Unpaid Rent of Rs 1.7 million by a Advice of the AGO has been


Company on State Lands of 60 Arpents sought in order to retrieve the
Two plots of State Lands at Piton du unoccupied State Land and
Milieu were pledged in favour of a bank same is still under process.
for a total loan amount of Rs 211.8 A claim for the settlement of Not
million. In February 2022, the Company outstanding rent was made to Resolved
went into liquidation. No rent was paid by the official receiver on 21 June
the lessee since 2013 and as at 30 June 2022.
2022, total rent due amounted to some Rs
1.7 million. The State Lands were left in
an abandoned state.(Pg 249, Para 15.2)

319
ATTORNEY-GENERAL’S OFFICE, MINISTRY OF AGRO-INDUSTRY AND FOOD SECURITY
SN Findings Ministry’s Response – NAO
Status as at February 2024 Comments
10 Unpaid Rent of Rs 109,350 by Cooperative A final survey has been carried by FAREI,
Society A on State Lands of 20.25 A the Engineering Division and LUD, based
Nine plots of State Land at Petit Merlo on which a decision will be taken with
were leased for the setting up of a dairy regards to the retrieval of land. Ministry is
farm. Despite the Ministry agreed to cancel re-working on the extent of land to be
the Lease Agreement due to non-payment allocated for renewal of lease agreement.
of rent, same could not be effected since Renewal will be subject to payment of Not
the leasehold right was pledged with a outstanding rents. Resolved
bank.The Ministry did not retrieve the
plots. Only two plots were used for the
purpose of dairy farm while the remaining
seven plots were left abandoned. Rent
amounting to Rs 109,350 was not yet paid
as at September 2022.(Pg 250, Para 15.2)
11 Unpaid Rent of Rs 84,000 by Cooperative In September 2013, representative of
Society B on State Land of 2 Arpents the Society was called to proceed
A plot of State Land was leased at Mon with the cancellation of the lease and
Bois for the setting up of a modern farm to honour arrears amounting to
and slaughter house. In February 2011, the Rs 29,551 for period
Society was wound up. No action was 1 September 2010 to 31 August 2014.
initiated by the Ministry for the lessee to However, he failed to do so.
vacate the land. The Ministry, instead, The said State Lands was thereafter
agreed for a new lease agreement to be retrieved on 13 November 2014 and
signed in the name of a new Company set later vested in the Ministry of
up by the lessee.As at 30 June 2022, total Housing and Land Use Planning for
rent of some Rs 84,000 were still due by the setting up of a driver’s training
the lessee and no lease agreement was centre. Resolved
signed. Advice of the Solicitor General was
(Pg 250, Para 15.2) sought to recover the outstanding
rents and this Ministry was informed
that in accordance to Articles 2279 of
the Code Civil Mauricien, only
unpaid annual rental for the past three
years may be validly claimed from
the concerned lessees.
In February 2023, LUD
recommended write off of the
unrecoverable rents of
Rs 29,862.
12 Illegal construction of a building on Survey exercise was completed in
Agricultural State Lands April 2023 and PIN has been secured
A Cooperative Society was granted a lease in June 2023.
for two plots of agricultural land at Mare Approval has been sought to renew
D’Albert for livestock production. A Resolved
the lease agreement after consultation
concrete building was illegally constructed with FAREI.
on one of the plots, contrary to the lease It was reported that the unauthorised
agreement. building was used as a watchman

320
ATTORNEY-GENERAL’S OFFICE, MINISTRY OF AGRO-INDUSTRY AND FOOD SECURITY
SN Findings Ministry’s Response - NAO
Status as at February 2024 Comments
Though the Ministry issued a warning letter quarter cum store and was in
in February 2022 to pull down the concrete accordance with the planning
building, no follow up action was seen to guidelines of the Ministry of Housing
have been taken as at September 2022. and Land Use Planning.
(Pg 251, Para 15.2)
Experiment Stations – Significant Decrease in Operational Activities (Page 251)

Under-utilisation of cultivable land leading to reduction in vegetable seeds and propagating


materials of flowers and fruits crops production, and expiry of agrochemicals
13 As of June 2022, out of a total of 32 hectares Following recruitment of General
of cultivable land, only 12 hectares were Workers in October 2022, seed
under cultivation. production has increased by 22 per
Seeds production, and propagating materials cent from 1,668 kg in 2021-22 to 2,023
of flowers and fruit crops were significantly kg in 2022-23. Resolved
reduced. Restricted varieties of these
produce were thus made available to the
farmers’ community. As of June 2022, only
24 out of 64 varieties were produced.
(Pg 251, Para 15.3)
14 Out of 176 agrochemicals, items ranging The Ministry has paid an amount of
from 9 to 47 per station, were expired. Rs 118,000 in April 2023 for the Resolved
(Pg 252, Para 15.3) disposal of agrochemicals.
Hydroponic Sheds and Anti-bird Shed left in abandoned state

15 During a site visit effected by NAO in Scope of works for two hydroponic
September 2022, the two hydroponic sheds sheds and anti-bird shed has already
were seen in an abandoned state with the been prepared by the Engineering
invasion of wild plants, the roof being torn Division and a quotation has been
off and left with only the metal structure. All obtained. The hydroponic sheds will
Partially
accessories and associated logistics to be used for variety testing and seed
Resolved
operate the two sheds were not on record. production with pollination by honey
The Anti-bird shed of a total surface area of bees.
2,088 m ², was in an abandoned state. For the anti-bird shed, request for
(Pg 252, Para 15.3) purchase of same has already been
made.
Building Infrastructures not occupied

16 The first floor of the main building at the Due to the offices of the Agronomy
Albion Experiment Station meant for Division and APD being prone to
residential purposes has been unoccupied flooding when heavy rainfall occurs,
since 2017. decision has been taken in 2023 to
(Pg 252, Para 15.3) relocate staff of both Divisions to the
Not
unoccupied building. However, the
Resolved
relocation is not yet completed as there
is need for installation of telephone
line, GINS and minor renovation
works. The completion of the works is
expected by end of February 2024.

321
ATTORNEY-GENERAL’S OFFICE, MINISTRY OF AGRO-INDUSTRY AND FOOD SECURITY
SN Findings Ministry’s Response - NAO
Status as at February 2024 Comments

Provision of Security Services to Stations/Compounds – Inadequate Monitoring of Service


Provider (Page 253)

Losses on sites not recouped from Service Provider

17 Cases of losses and thefts, totalling some In a new contract, losses on sites
Rs 693,000 were reported at different sites of were included in the bidding
Lots 1 and 3 despite the presence of security document and deductions being
guards on the sites. No deduction was made done accordingly Resolved
from the monthly fees paid to the Service
Provider.
(Pg 254, Para 15.4)
Deficient Contract performance
18 Several shortcomings were reported to the More stringent control was being
Ministry. Penalty clauses as regards to damages implemented at the level of the
for non-performance as per conditions of Ministry and penalty clause with Resolved
contract were not always applied. regards to non-performance have
(Pg 254, Para 15.4) been reviewed and applied.

322
ATTORNEY-GENERAL’S OFFICE, MINISTRY OF AGRO-INDUSTRY AND FOOD SECURITY
15.3.8 Follow-up of Matters Raised in the Performance Audit Report 2022

Title of Report: “Use of Pesticides in Agriculture”

Date Issued: June 2022

A follow up of matters raised in the abovementioned Performance Audit Report was carried
out. MAIFS was requested to inform the National Audit Office of the actions that have
been taken to address the findings and recommendations in the Report. The information
along with evidence collected through review of files and documents were assessed and
discussed with the Ministry.

The status on actions taken on key findings and recommendations since the publication of
the Audit Report are summarised below. Out of 16 recommendations, three (19 per cent)
have been implemented, eight (50 per cent) have been partly implemented and five (31 per
cent) were not implemented.

SN Findings Recommendations Ministry’s Response NAO Comments


– Status as of
January 2024
1 Rise in importation To control and Small Farmers
of pesticides for monitor the use of Welfare Fund is giving
agricultural pesticides in 60 per cent grant under
purposes. agriculture. the Bio-Farming
(Pg 19, Para 3.1.1) (Pg 39, Para 4.2) Support Scheme on
purchase of bio-
pesticides. The
laboratory of the
Ministry is not
equipped to carry out Partly
the testing of bio- Implemented
pesticides. However,
FAREI carries out
laboratory and field
efficacy tests. Funds
would be sought in
budget 2024-25 for
procuring additional
equipment for
pesticide residue
analysis.
2 No comprehensive To have a policy on A Roadmap and
policy in line with pesticide Strategic Plan 2024-
FAO Guidance. management. 2030 is at draft stage.
Not
(Pg 20, Para 3.2) (Pg 40, Para 4.2.1) The Policy on the use
Implemented
of pesticides is being
taken on board in this
document.

323
ATTORNEY-GENERAL’S OFFICE, MINISTRY OF AGRO-INDUSTRY AND FOOD SECURITY
SN Findings Recommendations Ministry’s Response NAO Comments
– Status as of
January 2024
3 No programmes To develop a A Pesticide Control
for collecting and programme for same. Committee has been
storing of data, (Pg 40, Para 4.2.1) set up which is
carrying out responsible for closely Partly
analysis and looking into and Implemented
reporting of same. monitoring all issues
(Pg 21, Para 3.2.2) pertaining to the use
and importation of
pesticides.
4 No implementation To have clear A Roadmap and
plan and targets. implementation plan, Strategic Plan 2024-
(Pg 22, Para 3.2.3) indicators, targets and 2030 which is at draft Not
time frame. stage. Implemented
(Pg 40, Para 4.2.1)

5 Pesticide residue To ensure compliance Fines established in


exceeded MRLs with the “Use of the Act would be
(Maximum Pesticides Act.” enforced.
Residue Level) in (Pg 40, Para 4.2.2)
some samples Not
while others Implemented
contained
pesticides not
recommended.
(Pg 24, Para 3.4.1)
6 No certificate Importer shall submit Amendments made in
submitted by the certificate, as The Finance
importers required by the Act. (Miscellaneous
regarding level of (Pg 40, Para 4.2.2) Provisions) Act 2022.
pesticides in Partly
agricultural Implemented
produce.
(Pg 26, Para
3.4.4)

7 Samples collected A risk-based approach A plan has been


from 550 planters to be adopted for prepared and is being
out of 12,000 collection of samples. used for adopting the Implemented
registered and non- (Pg 40, Para 4.2.2) risk-based approach as
registered planters. from January 2024.
(Pg 27, Para 3.4.5)

324
ATTORNEY-GENERAL’S OFFICE, MINISTRY OF AGRO-INDUSTRY AND FOOD SECURITY
SN Findings Recommendations Ministry’s Response NAO Comments
– Status as of
January 2024
8 Out of 135 non- Appropriate training Training request for
compliant planters, to be given to PRO prosecution duties
Partly
128 were issued (Pesticides made to the Civil
Implemented
with improvement Regulatory Office) Service College.
notices. officers. Courses will be run in
(Pg 27, Para 3.4.6) (Pg 40, Para 4.2.2) January 2024.

9 Only eight follow- To increase number Follow-up is carried


ups were of follow-ups on out through collection
undertaken out of improvement notices of additional samples
128 improvement and to work a plan of by PRO. Partly
notices. action to carry the Implemented
(Pg 28, Para 3.4.7) follow-ups.
(Pg 40, Para 4.2.2)

10 Legal actions not A mechanism for Amendments to the


taken against non- issuing of penalties to Act should be made to
compliants planters. be established. allow for prosecution.
(Pg 28, Para 3.4.8) (Pg 40, Para 4.2.2) The recruitment
process of a legal
consultant to develop
Partly
regulations to the Use
Implemented
of Pesticides Act 2018
(enforcement of fines
and provision for
prosecution) has been
undertaken and is
ongoing.
11 Only 33 pesticide Additional training Agricultural
molecules out of 60 for FTL staff to Chemistry Division is
are being analysed enable them to developing protocols
by FTL (Food develop programme for the testing of Not
Technology to test remaining 27 additional molecules Implemented
Laboratory). molecules. of pesticides.
(Pg 29, Para (Pg 40, Para 4.2.2)
3.4.9.1)

325
ATTORNEY-GENERAL’S OFFICE, MINISTRY OF AGRO-INDUSTRY AND FOOD SECURITY
SN Findings Recommendations Ministry’s Response NAO Comments
– Status as of
January 2024
12 No strategy and To develop Farmers are
policy to foster the programme for encouraged through
adoption of IPM adopting IPM. continued training to Not
(Integrated Pest (Pg 41, Para 4.2.3) adopt IPM. A Implemented
Management) Roadmap and
practices. Strategic Plan 2024-
(Pg 31, Para 2030 is at draft stage.
3.5.1.2)
13 Several targets To promote IPM to Sterile flies are being
under the Fruit Fly address the issue. released in targeted
Control Programme (Pg 41, Para 4.2.3) areas.
were not achieved. Partly
“Due to limited Implemented
(Pg 32, Para transport facility,
3.5.1.3) targets could not be
achieved.”
14 FAREI facing FAREI to continue Research and
challenges to its research on pest- Development at
promote the main resistant plant FAREI is an ongoing Implemented
principles of IPM. varieties and process.
(Pg 34, Para 3.5.2) disseminate same.
(Pg 41, Para 4.2.3)
15 Organic Bill not yet Organic Bill should Drafting Instructions
finalised. be finalised and issued. Partly
(Pg 36, Para 3.5.3) relevant legislations Implemented
adopted.
(Pg 41, Para 4.2.3)
16 Training organised To ensure that FAREI has an ongoing
by FAREI did not planters are training programme
form part of a systematically for rational use of
defined programme. trained on proper use pesticides targeting Implemented
(Pg 36, Para 3.5.4) of pesticides. farmers.
(Pg 41, Para 4.2.3)

326
ATTORNEY-GENERAL’S OFFICE, MINISTRY OF AGRO-INDUSTRY AND FOOD SECURITY
16 - MINISTRY OF YOUTH EMPOWERMENT,
SPORTS AND RECREATION
16.1 Funds disbursed to Mauritius Multisports Infrastructure Ltd

Public Funds are being disbursed to the Mauritius Multisports Infrastructure Ltd (MMIL)
for both recurrent and capital expenditure purposes by the Ministry of Youth
Empowerment, Sports and Recreation (MYESR), Deposit Account and National Resilience
Fund (NRF).

During the financial year 2022-23 an amount of Rs 57 million was provided in the
MYESR’s budget for the purpose of MMIL’s recurrent expenses.

However, disbursements to MMIL in 2022-23 totalled some Rs 106.9 million to allow


MMIL to meet additional recurrent expenses and expenses of a capital nature. Additional
funds, over and above the initially budgeted amount of Rs 57 million for MMIL, were
provided to MMIL from virement from both of MYESR’s recurrent and capital vote items
of Rs 9.5 million and 12.5 million, respectively, from funds/virement from NRF totalling
Rs 27.1 and of Rs 0.8 million from Deposit Account.

Findings

Inadequacy of Legal Framework for Effective Control Mechanism over Grants

In the Audit Reports 2021-22, 2020-21 and of prior financial years, attention was
drawn to the need for an effective mechanism to allow for appropriate control to be
exercised over grants to MMIL or other Government-controlled companies/
State-owned enterprises so as to ensure that the intended objectives for which public
funds have been provided are duly achieved.

However, no mechanism in terms of a legal framework for same has yet been devised.

MMIL, being a company established under the Companies Act, is not directly subject
to government rules and regulations pertaining to the monitoring and control
mechanism over grants to Statutory or other Government bodies.

The actual legal framework does not cater for the requirement for MMIL or
Government-controlled companies/State-owned enterprises:

to submit to the relevant Minister their estimates and budget proposals; and

to table their audited Annual Report, given that they are deriving public funds.

Root Cause

The existing legal framework is inadequate for control of grants to Government-controlled


companies/State-owned enterprises.

327
Recommendation

MYESR should work with relevant stakeholders to devise an appropriate budgetary control
mechanism for Government-controlled companies/State-owned enterprises under its aegis.

16.2 Governance Issues – Non-compliance with Legislation

Provisions have been made in various legislations to impose a statutory responsibility on


Accounting Officers and Boards of Statutory Bodies with the objective of strengthening
accountability and transparency in the public sector.

Non-submission of Report on Performance

As of 18 December 2023, the Report on Performance of MYESR for the financial year
2022-23 had not yet been submitted to the Ministry of Finance, Economic Planning and
Development, despite the statutory deadline being 31 October 2023.

Non-submission of Financial Statements for Audit

The Statutory Bodies (Accounts and Audit) Act requires the Chief Executive Officer of a
Statutory Body to submit the Annual Report, including financial statements, to the auditor
not later than four months after the end of every financial year.

As of 14 December 2023, the Mauritius Sports Council falling under the purview of
MYESR had not yet submitted its financial statements for the financial years 2020-21,
2021-22 and 2022-23 for audit.

NAO is of the view that MYESR should exercise control over Statutory Bodies operating
under its aegis to ensure that they fulfil their statutory responsibilities regarding the
preparation of financial statements, their submission for audit and tabling before the
National Assembly.

Ministry’s Response

The Ministry has submitted its Annual Report on Performance to the Ministry of
Finance, Economic Planning and Development on 17 January 2024.

The Ministry has been informed by the Mauritius Sports Council that needful is being
done to finalise its Annual Report, including financial statements for the financial years
2020-21, 2021-22 and 2022-23, and to submit same to the National Audit Office.

328
MINISTRY OF YOUTH EMPOWERMENT, SPORTS AND RECREATION
17 - MINISTRY OF NATIONAL INFRASTRUCTURE
AND COMMUNITY DEVELOPMENT

17.1 NATIONAL INFRASTRUCTURE DIVISION


17.1.1 Lapses in the Management of Government Quarters

Government quarters were constructed during the pre-independence period, mainly, for
railway workers. They were partly used as offices or stores, or were allocated to public
officers eligible for free quarters upon request, and to Non-Government Organisations and
other institutions against payment of rental fees.

As of September 2023, there were 67 quarters under the jurisdiction of the Ministry of
National Infrastructure and Community Development (MNICD), out of which eight were
in poor condition, requiring structural assessment and 31 were illegally occupied.

Findings

Government Quarters Register not up-to-date

The Government Quarters Register was not up-to-date and information such as name of
occupier, address, floor area in certain cases and condition of building were missing. These
assets were not captured in the Government Asset Register (GAR).

Illegally Occupied Government Quarters

Since 2007, MNICD has initiated legal actions against 39 illegal occupiers to vacate
the quarters.

According to the last survey carried out in February 2022 by MNICD, six quarters
were left in an abandoned state and suspicious activities were reported in respect of the
Rose-Belle quarters.

The quarters were also not properly secured and hence they were prone to the risks of
squatting, acting as refuge for drug addicts, and breeding grounds for pests, amongst
others and represented a danger to its inhabitants.

As of October 2023, despite notice of “mise en demeure” served by MNICD, the issue
regarding illegal occupiers was not resolved.

Arrears of Revenue – Rs 3,976,745

Five quarters were leased to Non-Governmental Organisations (NGOs) and four to


Parastatal Bodies. As of 30 June 2023, arrears of revenue in respect of four NGOs were
Rs 3,241,895 and for the two Parastatal Bodies were Rs 734,850.

Non- Renewal of Lease Agreements

As of September 2023, out of the nine quarters leased, seven lease agreements were not
renewed upon their expiry in 2015 and no lease agreement was available for the remaining
two quarters.

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Site Visit

A site visit was carried out by officers of the National Audit Office on 7 September 2023
at 17 quarters located at Rose-Belle, Rivière Dragon and Rivière des Anguilles.

Findings

Five quarters were illegally occupied and three of them were upgraded and renovated,
including extension, without the Ministry being informed.

Seven quarters were in an abandoned and deplorable state.

Five quarters were vacant.

The state of some of the quarters visited are shown in Figures 1-4.

Figure 1-Dispensary Road, Rose Belle Figure 2- Inside of the quarter


(Dispensary Road, Rose Belle)

Figure 3 -Mosque Road, Rose-Belle Figure 4-Ex-MITD, Royal Road, Rivière Dragon
Illegal Occupier: Physiotherapist

Root Causes

The administrative and legal actions initiated through the Ministry of Housing and
Land Use Planning (MHLUP) and Attorney General’s Office (AGO) respectively were
lengthy procedures.

The Officer responsible for managing Government Quarters did not take appropriate
actions.

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Recommendations

The Accounting Officer:

should initiate action to carry out a survey of all quarters; and

secure same to deter illegal occupation.

Ministry’s Response

Most of the quarters are in deplorable conditions and needful is being done for their
demolition subject to availability of funds and necessary clearances.

In February 2022, Government agreed to regularise the situation of occupiers of


quarters in good condition, to initiate action for the eviction of illegal occupiers of
quarters in a deplorable state and the taking over of all unoccupied quarters.

Recovery actions have been initiated for the arrears of revenue from the NGOs and
other bodies. The advice of AGO is being sought on this matter and the possibility to
exceptionally write-off those debts is also being explored.

17.1.2 Inadequate Control over Disbursement of Funds for Maintenance and


Rehabilitation of Roads and Bridges

The Road Development Authority (RDA), the implementing agency, submitted claims to
MNICD for the release of funds to pay contractors.

An amount of Rs 600 million was provided in the Estimates 2022-23 for the maintenance
and rehabilitation of roads and bridges, footpaths, road marking and signage, while actual
expenditure totalled Rs 772 million, as shown in Table 17-1.

Table 17-1 Budget and Actual Amounts for Maintenance and Rehabilitation Works

Financial Year 2022-23


Works Estimates Revised Actual
Estimates Expenditure
Rs million Rs million Rs million
Roads and Bridges 400 507 504
Footpaths 70 171 169
Road Marking & Signage 50 17 17
Routine Maintenance 80 83 82
Total 600 778 772
Source: Treasury Abstract 2022-23

Findings

The approved lists for maintenance and rehabilitation of roads and bridges works that
should be undertaken by RDA were not available to substantiate the budgetary amount
of Rs 600 million.

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MINISTRY OF NATIONAL INFRASTRUCTURE AND COMMUNITY DEVELOPMENT
Details regarding the number of contracts awarded, sites of works, contract amount and
completion dates were also not available at the Ministry.

As of October 2023, no details and justifications were provided by MNICD for the
additional works amounting to Rs 172 million.

Root Cause

The Accounting Officer of MNICD and Officer in Charge of RDA have not established
agreed guidance and directives as regards the disbursement of funds for accountability and
transparency purposes.

Recommendation

The Accounting Officer should, in accordance with Section 21(1) of the Finance and Audit
Act and the Financial Management Manual (FMM), prepare a Standard Operating
Procedure Manual for the operation of the Ministry including funds disbursed to RDA.

Ministry’s Response

The list for maintenance and rehabilitation works would henceforth, be recorded in
file, including the number of contracts awarded, site of works, contract amount and
completion dates.

At Ministry’s level, the necessary competence or expertise is not available to check the
conditions of contract nor is it considered reasonable to do so. Check and balances are
already done by RDA.

17.1.3 Significant Delays in addressing Issues for the Operation of the Standby
Generator

Supply, Installation, Testing and Commissioning of a New Diesel Standby Generator Set
and Associated Works - Rs 2,590,375

The service contract was awarded to the Consultant on 7 February 2018 for
Rs 724,500. The scope of works of the Consultant comprised preliminary surveys,
preparation of technical design and drawings, and technical specifications, amongst others.

The contract for the supply and installation of a standby generator at the Emmanuel
Anquetil Building (EAB) was awarded to a Supplier on 4 November 2020 for Rs 2,590,375.
As at 30 June 2023, Rs 2,095,730 were paid to the Supplier.

Findings

The generator was delivered in May 2021, while the commissioning was done after
one year, that is, on 4 May 2022.

On several occasions, warnings and automatic shutdown of the generator were noted
from the generator log.

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MINISTRY OF NATIONAL INFRASTRUCTURE AND COMMUNITY DEVELOPMENT
The Energy Services Division (ESD) carried out load tests and concluded that the
automatic shutdown was due to the generator being overloaded and that the Consultant
had provided wrong sizing of the equipment for the generator rating.

As of October 2023, more than three years after commissioning, no solution was
provided by the Consultant regarding the automatic shutdown of the generator.

Though the service contract stipulated that ‘the consultant shall be fully liable for the
consequences of any error or omission on his/her part or any damage caused by
negligence, and that he shall ‘assume full responsibility with regard to the design,
calculation and drawings’. No action was taken at the Ministry to enforce these
conditions.

The generator has not been used for its intended purpose.

Root Cause

The Accounting Officer did not take any action against the Consultant although according
to ESD, the Consultant might have provided wrong sizing of the equipment.

Recommendations

The Accounting Officer should:

take prompt remedial actions to address the issue as regards the use of the standby
generator; and

seek necessary advice from the AGO for remedial actions against the Consultant.

Ministry’s Response

A fresh load test has been carried out on 18 December 2023. The Consultant, Supplier
of the generator and Contractor had undertaken the refurbishment of the electrical
systems to carry out the necessary modifications on the load staging mechanism for
the generator to work properly.

Depending on the outcome, a decision may be taken as to the technical solution to be


adopted and any action which may be required against the Consultant.

17.1.4 Asset Management – Delay in recording Non-Financial Assets in the


Government Asset Register

The Government Asset Register (GAR) was developed in 2017 for the effective
management of Government assets. The implementation of GAR is crucial for the
preparation of the Financial Statements of the Government in accordance with the
International Public Sector Accounting Standards (IPSAS). Guidance on procedures and
timelines for the recording in GAR were issued by the Treasury on several occasions to
ensure its smooth implementation.

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MINISTRY OF NATIONAL INFRASTRUCTURE AND COMMUNITY DEVELOPMENT
During the last four financial years, actual expenditure incurred on acquisition of
Non-Financial Assets (NFAs) totalled Rs 7.36 billion while only an amount of
Rs 28.47 million was recorded in GAR as at 30 June 2023.

As of July 2022, the recording of NFAs had to be done by each Ministry or Department
directly on the Live-GAR System.

Findings

Non-compliance with guidance/instructions issued by the Treasury

As of September 2023, significant backlog was noted in the uploading of the value of
NFAs acquired before 30 June 2022 in the GAR.

As per returns of NFAs submitted to the Treasury as at 30 June 2023, only 12 out of
the 66 assets acquired were input on the GAR.

As of September 2023, the monthly reconciliation of Treasury abstract of expenditure


with the value of assets recorded in GAR for the financial year 2022-23 was not
prepared.

GAR users were encountering many difficulties to input data in the system.

Ministry’s Response

The system is not user-friendly and users had difficulties to get acquainted with the
technical terms to carry out the tasks properly, as such GAR was not updated prior to July
2022. Relevant officers have now been trained and the process to clear the backlog is
currently ongoing.

Incomplete recording of the Road Infrastructure Project

During the last three financial years, actual expenditure incurred on the acquisition of
non-financial assets in respect of Construction and Upgrading of Roads and Bridges
totalled Rs 5.2 billion. However, as of September 2023, input into the GAR in respect of
completed projects and assets under construction has still not been completed although a
GAR User has been assigned the schedule “Roads” at the Ministry.

The objective of recognising all government assets in the Government financial statements
by 2022-23 might not be met due to delays in recording all non-financial assets in the GAR.

Root Causes

The Responsible Officer of the Asset Management Unit did not carry out regular
updates, to ensure that the GAR is properly maintained.

Although training was provided and guidance issued, the users were still having
difficulties in the implementation of the live-GAR and remedial actions were not taken
accordingly.

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MINISTRY OF NATIONAL INFRASTRUCTURE AND COMMUNITY DEVELOPMENT
Recommendation

The Accounting Officer should ensure timely posting in the GAR as guided by the Treasury
and intensive training is to be provided to GAR users to ensure that the GAR is kept up to
date.

Ministry’s Response

As of January 2024, all the backlogs for the financial year 2022-23 have been cleared.

17.1.5 Under-utilisation of the Electronic Document Management System

MNICD decided to implement an Electronic Document Management System (EDMS)


during the financial year 2019-20 to enhance efficiency in document management. The
system would enable more rapid circulation and simultaneous usage of files and
improvement in processing time.

On 28 January 2020, the contract for the EDMS was awarded to a Company for
Rs 4,695,633 (inclusive of VAT) with an expected completion date of 15 May 2021. As at
30 June 2023, Rs 4,234,845 was disbursed, representing 90 per cent of the contract value.

Findings

As of October 2023, MNICD was using both the paper-based and electronic systems
concurrently for filing as all relevant files have not yet been uploaded into the system.

The feature ‘Move multiple files’ had still not been incorporated into the system by the
Supplier and the digital signature had not been enabled. Files uploaded could also not
be deleted. These issues were not addressed promptly by the Supplier.

The warranty certificate was not made available and hence compliance with the
conditions of the contract could not be ensured.

The operation of the system was delayed by more than two years beyond the
contractual completion date due to the additional features required by MNICD.

Migration of existing documents to the system had not been done due to the averred
busy schedules of officers and their reluctance to process files in the system.

Necessary equipment was not available to allow the optimum use of the system.

Root Cause

The Accounting Officer has not given priority to the full implementation of the system.

Recommendations

Necessary action should be taken to ensure that the system is being used effectively
and efficiently.

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MINISTRY OF NATIONAL INFRASTRUCTURE AND COMMUNITY DEVELOPMENT
The system should also be able to interface with the proposed EDMS of the Ministry
of Public Service, Administrative and Institutional Reforms (MPSAIR).

Ministry’s Response

The project was delayed due to several issues encountered during the operational and
testing phases of the system, which had to be addressed by the Supplier.

The Ministry could not fully operate on a paperless basis as other Ministries are still
sending correspondences through hard copies.

Due to heavy workload of the officers and a shortage of staff, dormant files have not
yet been uploaded.

17.1.6 Vehicle Management System – Not Optimally used

In September 2021, the Public Sector Business Transformation Bureau recommended the
implementation of the Vehicle Management System (VMS) under the Sandbox Framework
Agreement in four Ministries on a pilot basis with a total fleet of 178 vehicles as shown in
Table 17-2.

Table 17-2 Pilot Ministries and Fleet of Vehicles

SN Ministries Number of
Vehicles
1 Ministry of National Infrastructure 81
and Community Development
2 Ministry of Youth, Empowerment, 24
Sports and Recreation
3 Ministry of Environment, Solid Waste 55
Management and Climate Change
4 Ministry of Arts and Cultural 18
Heritage
Total 178
Source: Bidding Documents

The project value of the VMS was estimated at Rs 5 million. In the budget 2022-23, an
amount of Rs 1,000,000 was provided for the project and Rs 1,122,400 were disbursed as
at 30 June 2023.

A Monitoring Committee was set up at the level of MNICD to ensure smooth


implementation of the project. The system was live since June 2023.

Findings

In August 2023, the Mechanical Engineering Section (MES) of MNICD started to use
the system. However, the other three Ministries did not input their data into the system.

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There was no established timeline for the full utilisation of the VMS.

The accident feature was not being used and accident reports could not be generated
from the system. Cases of accidents were still being reported directly to the
Accountant General.

Site Visit

In September 2023, officers of NAO carried out a site visit at MES.

Findings

75 out of the fleet of 178 vehicles from all Ministries, had been captured into the
system. Only basic information for the vehicles such as make, model, and registration
number amongst others were uploaded on the system.

Fuel consumption for the last three months for only 31 vehicles of the MES could be
retrieved from the system.

Previous information such as maintenance costs, servicing, change of tyres, batteries,


accident report on vehicles had not yet been migrated into the system.

As all the modules were not operational, the system was not optimally being used.

Root Cause

The Monitoring Committee responsible for the project did not ensure effective
implementation of the project.

Recommendations

The Responsible Officer of the MES should have an agreement with the four
Ministries, clearly defining the roles and responsibilities of each party.

The Responsible Officer should have a clear roadmap for the full implementation to
ensure optimal benefits in the management of vehicles.

Proper training should be provided to all users concerned and necessary equipment
should be made available.

Data should be migrated promptly into the system to ensure its successful
implementation.

Ministry’s Response

All the four pilot Ministries have completed the uploading on the system except for a
few bugs. They are fully utilising the system and are satisfied with the system.

The VMS will be extended to other Ministries/Departments, following its successful


evaluation and exit from the Sandbox Framework.

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MINISTRY OF NATIONAL INFRASTRUCTURE AND COMMUNITY DEVELOPMENT
17.1.7 Consultancy Services for the Design, Supervision and Management of the
Construction of Grade Separated Junctions at Pont Fer/Jumbo/Dowlut Flyovers and
A1-M1 Link Road Project

In October 2016, Government approved the implementation of the Construction of Grade


Separated Junctions at Pont Fer/Jumbo/Dowlut Flyovers and A1-M1 Link Road project
which was considered as one of the main projects of the Road Decongestion Programme
(RDP).

RDP was launched by Government in 2008 to relieve traffic congestion within the city of
Port Louis and around the main arteries along the Port Louis – Curepipe corridor.

In April 2016, Government entered into a G to G agreement with the Korean Government
to assist in implementing the RDP. Subsequently, a Memorandum of Understanding
(MOU) was signed between RDA and the selected Korean Company (KEC) which was
valid for five years.

17.1.8 Lapses in the Management of the Consultancy Contract

On 25 November 2016, RDA, the implementing agency, entered into a contract with KEC
under the G to G arrangement by virtue of Section 3 of the Public Procurement Act (PPA)
for Consultancy services for the project for a lump sum of US$ 10.8 million (excl. VAT).

The start of the services for the project was scheduled for December 2016 with an expected
completion date of November 2020. As per the Due Diligence Report, KEC proposals
provided that no variations or cost overrun shall be claimed to RDA.

The contract price included two phases as shown in Table 17-3.

Table 17-3 Details of Contract

Description of Works for Consultancy Amount exclusive


of VAT
US$ million
Phase 1: Front-End Engineering Design, 5.1
Detailed Engineering Design,
Bidding Documents and Procurement
Phase 2: Project Management, Supervision, 5.7
Commissioning and Defects Inspection
Total 10.8
Additional Costs 2.5
Revised Contract Price 13.3
Source: Consultancy Contract document

Financial Procedures not followed for Extension of Time

A total of 37 months of Extension of Time (EOT) was granted on three occasions to KEC
up to December 2024 resulting in additional cost of US$ 2,486,456 (Rs 106.56 million
excl. VAT). The reasons for the EOT were due to COVID-19 pandemic, geotechnical
difficulties for the A1-M1 Bridge, and difficulties encountered as a result of displacement

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of services and interface with the metro project. Hence, the Consultancy contract price was
revised to US$ 13,319,456 (excl. VAT).

Findings

The contract price was increased by 23 per cent (US $ 2.5 million) although it was
clearly stipulated in the Due Diligence Report that KEC shall not claim any cost
overrun.

According to the Capital Project Process Manual (CPPM), approval from the parent
ministry should be immediately obtained after RDA’s Board approval for any EOT.

However, approval for the first EOT of eight months (December 2020 to July 2021)
with additional costs of US$ 929,819 (excl. VAT) was obtained from the parent
ministry seven months after approval of RDA’s Board.

No approval from the parent ministry and financial clearance from Ministry of Finance,
Economic Planning and Development (MoFEPD) was seen for the second EOT of five
months (August to December 2021) for an additional cost of US$ 581,137 (excl.
VAT)).

A due diligence exercise was carried out for the third EOT for the period January 2022
to December 2024, with additional costs of US$ 975,500 (excl. VAT). However, no
due diligence exercise was carried out for the first and second EOTs.

Approval for EOT to the Consultant was given up to December 2024 and did not
include the one-year Defects Notification Period (DNP) up to December 2025.

Re-design of the Bridge resulting in Changes in the Scope of Work

The Consultant’s scope of work consisted of a two-stage engineering design as follows:

Front End Engineering Design - to enable rapid launch of tender exercise for
construction of works.

Detailed Engineering Design –working with the selected Contractor to fine tune the
design to avert the risk of any variation in construction costs that could be claimed by
works contractor.

Findings

Change in Scope of Work of the Consultant

Following a thorough geotechnical investigation carried out in financial year 2018-19, it


was found that there may exist an instability in the cliff of GRNW during the intended life
of the A1-M1 Bridge. Consequently, this resulted in the re-design of the bridge by the
Contractor, which was not in accordance with the Consultant’s scope of works.

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MINISTRY OF NATIONAL INFRASTRUCTURE AND COMMUNITY DEVELOPMENT
Addendum No. 1- Change in the Contractor’s Scope of Works

In June 2019, Addendum No.1 was drawn to reflect the change in the scope of works for
the Contractor only. The A1-M1 Bridge, (Section 2) would be re-designed and built by the
Contractor with an additional cost of Rs 155 million (excl. VAT), contrary to the initial
policy as regards no cost and time overrun.

Although the Consultant would carry out only supervision and project management of the
A1-M1 Bridge, no change was brought to the Consultant’s scope of works and contract
price as regards Phase 1 of the Contract.

Insurance Cover not submitted

The Consultant’s insurance cover including professional indemnity insurance, with a


minimum coverage of the total value of the contract was not made available to the NAO.

Root Cause

RDA and Contractor did not adhere to the conditions of the Consultancy Contract. RDA
did not comply with provisions of the CPPM.

Recommendation

The Accounting Officer should ensure that financial instructions, procurement rules and
policies, and terms of contract are duly complied with.

Ministry’s Response

The costs for the first and second EOTs did not require due diligence as they did not
exceed the original contract value. The procedures were respected fully and all
approvals were duly obtained before any payments above the initial contract value
were made.

There has been no change in the scope of the Consultancy contract. The cost of
Addendum No.1 is due to the increased complexity of the A1-M1 Bridge arising from
the piers having been moved 20 meters away from the GRNW cliffs which resulted in
having to construct the more complex bridge.

17.1.9 Construction of Grade Separated Junctions at Pont Fer/Jumbo/Dowlut


Flyovers and A1-M1 Link Road Project – Lapses in Contract Management

RDA awarded the contract for the project to a JV Contractor for a fixed non-adjustable
lump sum of Rs 3.55 billion (excl. VAT) on 23 February 2018 but was revised to
Rs 4.1 billion (excl. VAT) as shown in Table 17-4.

As of October 2023, the total payments of Rs 3.8 billion (excl. VAT) were made to the
Contractor which represented 92 per cent of the total revised contract price.

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Table 17-4 Contract Details

Amount
Description of Works (excl. VAT)
Rs million
Grade Separated Junctions Pont
1,277
Fer/Jumbo/Dowlut Roundabouts
A1-M1 Link Road 949
Extra-Dosed Bridge 1,326
Accepted contract amount 3,552
Variations/Additions 548
Revised Contract price 4,100

Source: Contract Document

Works started on 6 April 2018 and were scheduled for completion within 958 calendar days
after commencement date, i.e., in November 2020. The revised completion date for the
Extra-Dosed Bridge was end of December 2023. The Works Contract being an employer
design-based contract was governed by the FIDIC (Red Book) conditions for construction
works.

RDA is the implementing agency, and MNICD provides funds for the implementation of
projects through its budget. Hence, ownership of projects rests with MNICD.

Findings

Addendum No. 1 - Fundamental Changes in the Scope of Works and Conditions of


Contract

A thorough geotechnical investigation was carried out in 2019 after the award of the
contract. It was found that there may exist an instability in the cliff of GRNW during the
intended life of the A1-M1 Bridge resulting in the re-design of the Bridge.

On 3 June 2019, the Attorney General’s Office (AGO) gave its clearance on the draft
Addendum No. 1 except for the technical details which remained the responsibility of RDA.

On 21 June 2019, one year after the award of the contract, Addendum No. 1 was drawn to
reflect the fundamental changes in the contract for the re-design and construction of the
A1-M1 Bridge by the Contractor. The changes related to the scope of works, variations
costs, Extension of Time (EOT), ‘Delay Damages’ and professional indemnity and liability
insurance.

Disputes on Settlement of Global Claims

On 5 June 2020, the Contractor submitted a “Global” claim of Rs 1.3 billion (excl. VAT)
for EOTs and associated costs. A dispute arose as several claims were rejected by the
Engineer.

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In June 2022, the Contractor started the Arbitration proceedings, with the London Chamber
of International Arbitration (LCIA). In May 2023, an agreement was reached for the final
settlement of the disputes and the arbitral proceedings were to be discontinued.

However, as of October 2023, the Cancellation Order from LCIA was not produced to
NAO.

Addendum No. 2 - Changes in Conditions of Contract

Addendum No. 2 was made in May 2023, five years after the award of the contract which
provided for significant amendments to the contract based on the agreement reached. The
amendments comprised settlement amounts, variations, retention money, EOTs for
completion of the Bridge, Performance and Preference Securities. AGO gave its clearance,
subject to MNICD’s acceptance that the terms and conditions are in order.

Changes in Scope of Works for the Re-design of the Bridge

Despite the appointment of a reputable Consultant (The Engineer) for the Design,
Supervision and Management of the project at the total cost of US$ 13.3 million, the
Contract was split into two Sections, namely:

Section 1 - the Grade Separated Junctions at Pont Fer/Jumbo/Dowlut Roundabouts and


A1-M1 link Road; and
Section 2: the Extra- Dosed Bridge.

The responsibility for Section 1, the whole of the works except for the Bridge as per RDA’s
design rests with RDA and Section 2, the re-Design and Build of the Bridge rests with the
Contractor.

There was no evidence that a due diligence exercise was carried out by RDA before giving
its approval to the Contractor for the re-design of the Bridge, given the complexity of the
project.

Additional Costs/Variations during execution of the Project

Variations for the re-design of the Bridge - Additional costs of Rs 155 million were
claimed for the re-design and build of the Bridge, contrary to Clause 13.1 of the
contract which allows for modifications to the engineering design based on the site
conditions. Under Clause 15.5 of Invitation to Bid (ITB) of the bidding documents,
the additional cost should be borne by the Contractor.

Increase in Consultancy Fees - As a result of the undue delays for the completion
of the Bridge, the supervision and project management fees of the Consultant were
increased by US$ 2,486,451 (excl. VAT).

Settlement Amount - In May 2023, the Global claims of Rs 1.3 billion were settled
at an agreed amount of Rs 268 million.

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MINISTRY OF NATIONAL INFRASTRUCTURE AND COMMUNITY DEVELOPMENT
Temporary Bridges - Contrary to Sub-Clause 8.13 of the contract which stipulates
that ‘the contract amount includes the costs for temporary works for which no
additional claim should be raised by the Contractor.’ An amount of Rs 28 million
was paid to the Contractor for three temporary bridges.

Variations at Dowlut Zone -The claim of Rs 7.7 million for the variations at Dowlut
Zone was not included in the settlement amount of Rs 268 million.

Works undertaken outside scope of works – An amount of Rs 89.2 million for works
carried out on behalf of the National Development Unit and Central Water
Authority was not refunded to the RDA.

Amendments to Delay Damages Clause

The initial delay damages claim per day, amounting to Rs 3.6 million for the whole
of the project, was revised to Rs 2.2 million for Section 1, the Grade Separated
Junctions at Pont Fer/Jumbo/Dowlut Roundabouts and Rs 1.4 million for Section 2,
the A1-M1 Bridge. A significant reduction in the ‘Delay Damages’ was noted

The completion date for Section 1 was maintained to November 2020. The taking
over certificates for Section 1 were issued for the Jumbo Flyover on 1 September
2021, Pont Fer Flyover on 1 October 2021, Flyover of Dowlut, Phoenix on 14
December 2021 and A1-M1 Link Road on 1 June 2022. Contrary to the provision
of the contract, no ‘Delay Damages’ were claimed for excess time taken for
completion of the Section 1.

Extension of Time for Completion of Section 2- Bridge granted contrary to


Conditions of Contract

The first EOT for the completion of Section 2 was granted up to January 2022, including a
grace period of 61 days for which no justifications were provided. The Contractor was
granted a further additional EOT without costs up to December 2023 for the completion of
the Bridge which could further be prolonged without costs. This was contrary to Clause 8.4
of the Contract which provides for a clear set date to be determined. No delay damages
were claimed for the additional time taken for the completion of the Bridge.

Approval of Central Procurement Board (CPB) not obtained for Addendum No. 2

Section 11(1) (f) of the Public Procurement Act (PPA) provides that “CPB shall review the
recommendation of the Public Body for amendments that increases the contract value and
gave its approval”. However, the fundamental changes made in the contract under
Addendum No. 2 were not vetted by the Central Procurement Board (CPB) before
obtaining Government approval.

Amendments to Retention Money clause

Retention Money (RM) was released separately for Section 1 and Section 2 of the works
as compared to the initial contract whereby RM applies to the whole of the ‘Works. The
RM for the A1-M1 link road was partially released although it was not yet operational as it
depends on the completion of the Bridge. As of October 2023, only eight per cent of the

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MINISTRY OF NATIONAL INFRASTRUCTURE AND COMMUNITY DEVELOPMENT
total contract price amounting to Rs 347.9 million (excl. VAT) was retained compared to
the 10 per cent limit of the contract.

Professional Indemnity (PI) and Indemnity Certificate (IC) not yet submitted

The PI would be submitted on the date of performance certificate which is after the two
years Defects Liability Period. This is contrary to FIDIC conditions whereby the PI should
be submitted at the start or during the execution of the project. As of October 2023, the IC
was not submitted as required under paragraphs j and k of the Addendum 1.

Performance Security and Preference Security not renewed

As of October 2023, the Performance Security and Preference Security which had expired
on 5 March and 5 February 2023 respectively, were not renewed. The securities should
have been renewed up to the end of the Defects Notification Period.

Inadequate Control by MNICD

A substantial amount of funds was disbursed through MNICD for the realisation of
this major project with the objective of relieving heavy traffic congestion and to
improve quality of life of the general public. However, substantial delays with costs
overruns were noted in the completion of the project over which MNICD did not have
any control as total reliance was placed on RDA for the execution of the contract.

The total contract price of the project including the consultancy fees have increased
from Rs 3,562 million to Rs 4,615 million (excl. VAT). Some of the additional costs
could have been avoided and the interests of MNICD safeguarded.

Root Causes

The designs were not properly coordinated among the stakeholders involving the
Consultants and the Contractor. The dispute between the Contractor and the Engineer
has caused substantial delays in completion of the project.

RDA could not ensure that the contractual obligations were respected by the
Contractor.

Recommendations

The contract administration and management should have been done efficiently and
effectively to avoid time and cost overruns in the completion of the project. Hence,
the interests of RDA and MNICD should be safeguarded.

Projects must be properly planned so that uncertainties are eliminated before awarding
the contract. Thorough site investigations and condition surveys should be undertaken
before award of contract.

A Project Steering Committee should be set up at the level of MNICD to oversee the
progress of projects and mitigate the risks related to any change in contract.

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MINISTRY OF NATIONAL INFRASTRUCTURE AND COMMUNITY DEVELOPMENT
MNICD should ensure, through RDA that the contractual obligations are strictly
followed by the Contractor to avoid any departure/breach of the terms of the contract.

Ministry’s Response

Due to complex technical issues with the A1-M1 Bridge, the Bridge works were
categorised as Section 2 with a different scheduled completion time. It is of national
interest that the A1-M1 bridge liability rests mainly with a competent expert Contractor
up to December 2023.

Consultant KEC has always stated that its design for the A1-M1 Bridge was correct
and could be implemented. Given the strong position of the Contractor to request
changes to the design failing which it would have recourse to a Court of Law, several
scenarios were envisaged.

The contract was closely monitored during its implementation under very difficult
conditions particularly due to disruptions of the works and supply chain following the
COVID-19 pandemic.

The Contractor had submitted the updated Performance Security and Preference
Security. However, the Preference Security was returned for further amendments.

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MINISTRY OF NATIONAL INFRASTRUCTURE AND COMMUNITY DEVELOPMENT
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MINISTRY OF NATIONAL INFRASTRUCTURE AND COMMUNITY DEVELOPMENT
17.2 NATIONAL DEVELOPMENT UNIT
17.2.1 Lapses in Project Management

The National Development Unit (NDU) undertakes projects for the construction and
upgrading of roads and drains and associated works and the construction of other amenities,
such as sports infrastructure, bridges, and children’s playgrounds, amongst others.

The implementing agencies for drains projects comprise NDU, Local Authorities, Road
Development Authority (RDA) and Drains Infrastructure Construction Ltd (DICL).

The Land Drainage Authority (LDA) is mandated to coordinate the construction of


drainage infrastructure.

NDU is manned by 323 employees, whereas DICL is managed by a Chief Executive Officer
who is assisted by 12 officers. Funds are provided under votes from MoFEPD to finance
NDU’s projects.

17.2.2 Financing of Projects – Under-utilisation of Funds provided for NDU Projects

For the financial year 2022-23, funds totalling Rs 2,979 million were budgeted under
different votes and actual expenditure amounted to Rs 1,388 million as shown in
Table 17-5.

Table 17-5 Budgeted and Actual figures for NDU projects for Financial Year 2022-23

Budgeted Budgeted Actual Actual No of Projects in Unspent


Amount No of Expenditure projects Progress Amount
projects in Progress %
Rs million Rs million Rs million

NDU's Budget
Road 350 143 165 46 32 185
Amenities 170 55 80 21 38 90
COVID 19 Projects
Development Fund –
2,200 968 1,090 34 4 1,110
Drains
Economic Recovery
Programme (ERP)
Roads 124 165 42 101 61 82
Amenities 90 68 11 17 25 79

Indian Grant 45 - - 11 45
Amenities
Total 2,979 1,399 1,388 230 1,591

Source: Database from Engineering Section and Finance Section, NDU

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MINISTRY OF NATIONAL INFRASTRUCTURE AND COMMUNITY DEVELOPMENT
Findings

For the financial year 2022-23, only 47 per cent of the voted provisions were utilised
for the implementation of projects while the remaining funds of Rs 1,591 million had
remained unspent.

Out of the 968 drains projects earmarked, only 34 projects were in progress,
representing 4 per cent of the total projects.

The slow implementation of projects implies that these projects were not made
available to citizens on a timely basis and hence the objectives set could not be
achieved.

I Projects financed by COVID-19 Projects Development Fund -National Flood


Management Programme (NFMP) – Drain Projects

In January 2023, LDA approved 1,721 drain projects to be implemented by different


Agencies over the next three financial years. 968 drain projects for an estimated amount of
Rs 14.8 billion were entrusted to NDU, out of which an average of 325 should be completed
annually.

During the financial year 2022-23, only 34 drain contracts were awarded for Rs 457 million,
compared to 84 contracts awarded in the preceding financial year for Rs 1.7 billion, thus
resulting in significant funds remaining unspent and several projects not being
implemented.

II Indian Grant – Small Community Development

Indian Grant of Rs 45 million was received for the Small Community Development Projects
to be implemented either by NDU or the implementing agencies. Eleven works orders were
issued during the financial year 2022-23. As of October 2023, the projects were still at the
implementation stage and no payments were effected.

Root Cause

Inadequate planning over the implementation of projects by the Chief Projects Officer.

Recommendation

The Accounting Officer should ensure that projects earmarked are undertaken within a
reasonable period. A mechanism needs to be worked out for the realisation of priority
projects earmarked.

Ministry’s Response

NDU always endeavours to implement projects within a reasonable period. However, very
often, projects are delayed due to late or absence of clearances from service providers and
other stakeholders (CEB/CWA/Telecom/ Forestry).

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MINISTRY OF NATIONAL INFRASTRUCTURE AND COMMUNITY DEVELOPMENT
Funds for the implementation of road and amenities projects are already provided under the
vote of NDU. A request has been made to the MoFEPD for provisions of funds for drain
projects under the vote of NDU. However, same has not materialised.

17.2.3 Delay in implementing Projects in High-Risk Flood-Prone Areas may cause


harm to the Citizens

The slow implementation of drain projects in the high-risk flood-prone areas highlighted
in the Audit Report for the financial year 2021-22 was again noted during the execution of
drain projects in the financial year 2022-23.

The high-risk flooding areas have kept on increasing from 60 to 72 from financial years
2020-21 to 2022-23 respectively as shown in Table 17-6. Priority should have been given
to projects in high-risk flood-prone areas where the quality of life or environment may be
seriously compromised in the event of heavy rainfall.

Table 17-6 Status of Projects during last three Financial Years

Number of Projects
Status 30.06.2021 30.06.2022 30.06.2023
Completed 7 8 15
Under Construction 16 16 14
Design Stage 28 28 10
Bidding Stage 5 11 6
Consultant to be appointed 4
Transfer to DICL 3 26
Transfer to Local Authority 1
Project to be implemented by RDA 1 1
Total 60 68 72
Source: Administration Section

Number of Projects implemented in High-Risk Flood-Prone Areas

Only 12 per cent of the drains projects in the high-risk flood-prone areas were
completed over the last three financial years.

Out of the 72 projects identified in the high-risk flood-prone areas, 26 were transferred
to DICL and one to RDA to be implemented during the financial year 2022-23. No
project was transferred to the Local Authorities.

As of October 2023, only 15 projects awarded under the Emergency Procurement


method since the financial year 2020-21, were completed by NDU.

Ten projects were still at design stage, including Ruisseau du Pouce, Drainworks in the
region of Mgr Leen, La Butte and Les Salines and Canal Dayot amongst others.

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MINISTRY OF NATIONAL INFRASTRUCTURE AND COMMUNITY DEVELOPMENT
The drain project for ‘Additional Outlet from Place d’Armes to Caudan’ to be
implemented by RDA was still at bidding stage.

14 projects were at construction stage including Dakri Bambous and Cité Roma, Riche
Terre.

Out of a sample of six projects examined, it was noted that the implementation of projects
was slow mainly due to the following:

Poor-performing contractors.

Cancellation of bids as prices quoted were substantially above cost estimates.

Land acquisition issues and delay in accessing wayleaves.

Delay in the submission of preliminary and detailed design reports by the Consultant.

Delay in obtaining clearances from the authorities concerned including LDA.

Objectives for setting up Drains Infrastructure Construction Ltd (DICL) not yet achieved

In November 2021, DICL, a fully Government-owned company was set up to fast track the
implementation of the NFMP in order to mitigate flooding problems in various regions
across the island and to build resilience to flash floods, torrential rains, landslides and
cyclones.

DICL would hence contribute to the timely execution of urgent drain projects in highly
vulnerable areas as the existing implementing agencies do not have sufficient internal
capacity.

In 2021-22, LDA has allocated 55 projects for Rs 7,685 million, out of which 26 were
identified as being in high-risk flood-prone areas. They were previously allocated to NDU
but have now been transferred to DICL.

As of October 2023, the 26 projects allocated to DICL were not completed. Two projects
were under construction, 17 were at design stage, including Baie du Tombeau
(Elizabethville) and flood mitigating measures at Vallée des Prêtres and seven were at
bidding stage including Construction of cut off drain at Berthaud Avenue, Quatre Bornes
and Baie du Tombeau, (Rue de Macadam and Rouillard).

Root Causes

Delay in land acquisitions and access to wayleaves.

Significant delays in obtaining clearances from LDA although the latter has all the
necessary data including the Land Drainage Master Plan.

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MINISTRY OF NATIONAL INFRASTRUCTURE AND COMMUNITY DEVELOPMENT
Recommendations

NDU should ensure that there is effective coordination amongst different stakeholders
to sort out land acquisition and wayleaves matters during implementation phases.

LDA should give its clearances promptly for NDU to expedite the implementation of
the urgent drain projects in high-risk flood-prone areas by making efficient use of the
LDMP.

A complete restructuring of NDU should be considered for the efficient and effective
implementation of projects.

Ministry’s Response

DICL, despite being short of staff, has the necessary expertise to implement those projects.
The delays were mainly due to the lengthy process of land acquisition.

17.2.4 Significant Delays in the Completion of Projects allocated to Local Authorities

In October 2016, projects such as road resurfacing, construction of small drains and
provision of amenities were allocated to Local Authorities (LAs) for their timely
implementation. LAs would be responsible for the implementation of projects, from
inception date to completion and eventually maintenance.

Projects Funded by NDU during the last five years

For the financial years 2018-19 to 2022-23, NDU allocated 320 projects to LAs for the sum
of Rs 507.26 million, out of which 212 were completed. The total amount disbursed as of
30 June 2023 amounted to Rs 348 million as shown in Table 17-7.

Table 17-7 Projects funded by NDU for Implementation by Local Authorities

FY No of No of Projects Financial Amount


Projects completed Clearance issued paid
earmarked to LAs
Rs million Rs million
2018-19 266 193 404.9 108.4
2019-20 1 1 3.0 144.3
2020-21 4 3 5.1 60.2
2021-22 9 9 21.0 12.7
2022-23 40 6 73.3 22.4
Total 320 212 507.3 348.0
Source: NDU Engineering Unit and Finance Section

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MINISTRY OF NATIONAL INFRASTRUCTURE AND COMMUNITY DEVELOPMENT
Findings

Inadequate monitoring and control over the implementation of projects resulted in


significant delays. Funds totalling some Rs 160 million were unspent as 33 per cent of
the projects earmarked were not implemented. As such, the benefits to be obtained
from these projects could not be made available to citizens.

Out of the 266 projects earmarked during the financial year 2018-19, 60 projects
concerned mostly with the resurfacing of roads, were cancelled due to significant
delays in their implementation.

No status reports were available at NDU for the remaining 34 out of the 40 projects
earmarked for the financial year 2022-23.

Claims for payments were submitted but were not always supported by test results.

Commissioning/Handing Over Certificates were not available to provide evidence for


the actual completion of works. No site visits were carried out by NDU to ensure
effective and efficient project completion.

Root Causes

The Chief Projects Officer and the Engineering Section did not monitor and follow up
projects entrusted to LAs.

Recommendations

NDU should manage funds allocated efficiently and effectively for the achievement of
its planned activities. Projects implemented by LAs should be closely monitored.

A Steering Committee should be set up consisting of different stakeholders for the


proper monitoring and follow-up on NDU projects.

Ministry’s Response

The claim should invariably be signed by the Head of Works or the Engineer of the
relevant LA. The responsibility for monitoring the implementation and supervision of
the project rests with the LA.

17.2.5 Non-compliance with Public Procurement Act -Significant Delays in signing of


Contracts

During the financial years 2020-21 to 2022-23, 607 contracts were awarded by NDU for a
total contract value of Rs 3,832 million for the construction and upgrading of non-classified
roads and provision of sports and recreational amenities as well as community-based
projects.

A sample of 64 Contracts, including works and consultancy services with contract value
ranging from Rs 300,000 to Rs 112 million, was scrutinised, as shown in Table 17-8.

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MINISTRY OF NATIONAL INFRASTRUCTURE AND COMMUNITY DEVELOPMENT
Table 17-8 Sample of Contracts not signed

Letter of Acceptances Stage of Projects No. of Contract


issued Projects Value
Rs million
16.08.21 to 14.09.22 Completed 26 521.8
22.11.21 to 07.10.22 Ongoing 18 639.3
20.07.20 to 27.05.22 Design stage 18 104.7
22.09.21 and 27.05.22 Terminated 2 44.8
Total 64 1,310.6
Source: Database from NDU’s Procurement section

According to the bid documents, the contract shall be signed within 28 days of the receipt
of the letter of acceptance by the successful bidder, unless the parties agree otherwise.

Findings

As of 15 September 2023, contrary to Section 40 of the Public Procurement Act (PPA),


procurement contracts were not signed for 64 contracts that were awarded from July
2020 to September 2022.

According to Sections 30 and 40 of the PPA, in case the successful bidder fails to sign
the contract, the Public Body should forfeit the bid security and award the contract to
the next successful bidder respectively. However, Contractors were allowed by NDU
to execute the contract although they did not sign any contract.

In case of breach of contract, the contractual obligations such as claiming liquidated


damages and forfeiting of performance security could not be enforced on the
Contractor.

Root Cause

Significant time was taken by the Procurement Section to prepare draft contract agreements
and the Engineering Section/Quantity Surveying Section for vetting of same.

Recommendation

The Accounting Officer should ensure that procurement contracts are prepared and vetted
within a defined time frame. Contract agreements should be signed within the prescribed
delay of 28 days as per the PPA.

Ministry’s Response

It is a fact that there is a certain number of unsigned contracts. The procurement section
and the Chief Project Manager have already been requested to do due diligence to clear the
backlog.

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MINISTRY OF NATIONAL INFRASTRUCTURE AND COMMUNITY DEVELOPMENT
17.2.6 Overpayment of Escalation Costs -Construction and Upgrading of Roads and
Drains

The contract for the Construction and Upgrading of Roads and Drains in Zone 1 for the
financial year 2011-12 was awarded to a Contractor for the sum of Rs 180,838,133 on
6 March 2012. The implementation period for the 86 projects involved was 18 months.

Use of the Wrong Base Price of Bitumen per Ton

On 29 August 2013, the Contractor applied for price adjustments due to cost escalations
amounting to Rs 13,354,122, of which an amount of Rs 9,507,890 was certified and paid
based on the incorrect costs of bitumen.

The Contractor’s application for the payment for escalation costs of bitumen was based on
the price of Rs 17,962 per ton instead of Rs 30,000 per ton, even though in March 2012 the
Central Procurement Board (CPB) had apprised NDU of the correct base price. Both NDU
and Consultant used the wrong base price for bitumen per ton.

The Consultant was not requested to amend the claims as per the correct prices, instead
NDU amended the claims submitted, contrary to proper procurement procedures.

In September 2019 and February 2020, the Contractor served three plaints with summons
on NDU. The Contractor claimed Rs 19,891,168 for late payment, interest due and price
fluctuation. As at 31 October 2021, the claims were revised to Rs 12,414,171.

There was no evidence of a procurement contract for the construction of drains, roads,
amenities and provision of consultancy services being entered into with the
Contractor/Consultant as required by the PPA.

Root Cause

The Engineering Section and the Consultant have negligently certified the escalation cost
based on a wrong base price of bitumen.

Recommendation

The Accounting Officer should implement a sound system of internal control and an
efficient project management system.

Ministry’s Response

11 cases have been lodged with regard to disputes over the base price of bitumen. These
cases are still at Court level. Corrective action would be taken pending the outcome of the
Court cases.

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MINISTRY OF NATIONAL INFRASTRUCTURE AND COMMUNITY DEVELOPMENT
17.2.7 Governance Issues – Non-compliance with Legislation

Provisions have been made in various legislations to impose a statutory responsibility on


Accounting Officers and Boards of Statutory Bodies with the objective of strengthening
accountability and transparency in the public sector.

Non-submission of Report on Performance

As of 5 January 2024, the Report on Performance of the Ministry of National Infrastructure


and Community Development (including the National Development Unit) for the financial
year 2022-23 had not yet been submitted to the Ministry of Finance, Economic Planning
and Development, despite the statutory deadline being 31 October 2023.

17.2.8 Follow-up of Matters Raised in the Audit Report 2021-22

A follow up of matters raised in the Audit Report 2021-22 was carried out. The National
Development Unit (NDU) was requested to inform the National Audit Office of the actions
that have been taken to address the findings and recommendations in the Report. The
information along with evidence collected through review of files and documents were
assessed and discussed with NDU.

The status on actions taken on findings since the publication of the Audit Report are
summarised below. Out of three findings, one (33 per cent) has been resolved and two
(67 per cent) have not been resolved.

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MINISTRY OF NATIONAL INFRASTRUCTURE AND COMMUNITY DEVELOPMENT
Ministry’s Response – NAO
Findings
Status as of February 2024 Comments

Large number of Projects at Design Stage (Page 274)

As of 31 August 2022, there were 322 The Land Drainage Authority


projects at design stage. Reasons for (LDA) has witnessed a high rate of
which these projects were still at design staff turnover and is presently
stage included changes in priority and short of staff; which may at times
issues relating to land acquisition, delay approval of the design
clearances from the relevant Authority to reports.
finalise design and availability of funds Not Resolved
to start projects.
Land acquisition is a lengthy
(Pg 274, Para 17.2.1) process. All administrative
processes which were being
undertaken by the Ministry of
Land Use Planning are now being
tackled by the NDU.
Large number of Projects Earmarked but not Undertaken (Page 277)

Out of 453 roadworks and amenities The NDU always endeavours to


projects earmarked to be undertaken in implement projects within a
2021-22, Works Orders for only 134 reasonable period of time. Projects
projects were issued. Out of 900 drain are delayed due to late or absence
projects planned to be undertaken by of clearances from service Not Resolved
NDU during a period of three financial providers and other stakeholders.
years as from 2021-22 under the National Funds for implementation of drain
Flood Management Programme projects listed in the NFMP are
(NFMP), Works Orders for only 84 drain provided under the Project
projects were issued during 2021-22. Development Fund.
(Pg 277, Para 17.2.2)
Outstanding Payments to Contractors (Page 280)
According to records maintained by Outstanding payments have been
NDU, outstanding payments due to settled during financial 2022-23.
Contractors/ Consultants as of July 2022 Resolved
amounted to some Rs 183 million
(Pg 280, Para 17.2.3)

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MINISTRY OF NATIONAL INFRASTRUCTURE AND COMMUNITY DEVELOPMENT
18 - MINISTRY OF INFORMATION TECHNOLOGY,
COMMUNICATION AND INNOVATION
18.1 Governance Issues – Non-compliance with Legislation

Provisions have been made in various legislations to impose a statutory responsibility on


Accounting Officers and Boards of Statutory Bodies with the objective of strengthening
accountability and transparency in the public sector.

Findings

Non-submission of Report on Performance

As of 18 December 2023, the Report on Performance of the Ministry of Information


Technology, Communication and Innovation for the financial year 2022-23 had not yet
been submitted to the Ministry of Finance, Economic Planning and Development, despite
the statutory deadline being 31 October every year.

Non-submission of Financial Statements for audit

The Statutory Bodies (Accounts and Audit) Act requires the Chief Executive Officer of a
Statutory Body to submit the Annual Report to the auditor not later than four months after
the end of every financial year.

As of 14 December 2023, the Mauritius Research and Innovation Council falling under the
aegis of the Ministry of Information Technology, Communication and Innovation had not
submitted its Financial Statements for the financial years 2020-21, 2021-22 and 2022-23
for audit.

18.2 Follow-up of Matters Raised in the Audit Report 2021-22

A follow up of matters raised in the Audit Report for the financial year 2021-22 was carried
out. The Ministry of Information Technology, Communication and Innovation was
requested to inform the National Audit Office of the actions that have been taken to address
the findings and recommendations in the Report. The information along with evidence
collected through review of files and documents were assessed and discussed with the
Ministry.

The status on actions taken on findings since the publication of the Audit Report are
summarised below.

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SN Findings Ministry’s Response – NAO
Status as of January 2024 Comments

1. Development of a Chatbot System – Page 285

The project was awarded to a Joint Phase I was de-activated due to


Venture in September 2021 for the bugs and technical issues and it
sum of Rs 12.5 million. The project was agreed that a round of
duration was 16 months and was to testing would be carried out by
be implemented in two phases. As of users to ensure data compliance
on the platform. With the
June 2022, 70 per cent of the contract
sum had already been paid. integration of the system with
ChatGPT, testing of data had to
start afresh, further delaying the
Phase I of the project was completed
go live of the system.
in June 2022. The Chatbot went live
on 3 June 2022, but was de-activated
within a month in July 2022, as the
Contractor did not enter into the
Operate and Support Agreement that
would have enabled officers of the
Ministry to take over the service. Partially
Resolved
Phase II, which included the Phase I and II went live in mid-
enhancement of the Chatbot system June 2023.
with additional features and the
rolling out of the system to 20 The rolling of the Government
Ministries on an annual basis, was Chatbot to 20 Ministries would
delayed to September 2022. The have required an additional
Phase II was to be implemented by a amount of Rs 24 million. An
recomposed joint venture with same alternative and less costly
terms and conditions of the initial solution is being looked into to
agreement. enlarge the existing database of
(Pg 285, Para 18.1) the MITCI bot.

The Operations and Support


contract was reviewed and
signed for an amount of Rs 1.1
million for the managed
services of the 3 existing sites
only.

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MINISTRY OF INFORMATION TECHNOLOGY, COMMUNICATION AND INNOVATION
19 – MINISTRY OF LABOUR, HUMAN RESOURCE
DEVELOPMENT AND TRAINING, AND COMMERCE
AND CONSUMER PROTECTION

19.1 LABOUR DIVISION


19.1.1 Delay in the Computerisation of Occupational Safety and Health Division

The contract for the computerisation of the Occupational Safety and Health Division
(OSHD) was awarded to a Service Provider on 14 June 2021, for some Rs 7.3 million,
exclusive of VAT and maintenance costs.

The objectives of the project was to cater for and support the activities and processes
involved in the different units and enhance the operations of OSHD at the Labour Division
of the Ministry.

The project started on 3 September 2021 and was scheduled to be completed on


3 November 2022. Payment as at 30 June 2023 amounted to some Rs 1.7 million.

Findings

As of August 2023, some nine months after expected completion date, the project was
still not completed.

Requests for extension of time for the rescheduling of the completion date were not
seen.

The User Acceptance Testing Round 2 Stage which started on 8 March 2023 was still
not completed in October 2023.

On 7 December 2022, the Occupational Safety and Health (Amendments) Act 2022
was proclaimed and amendments had to be made to the software to cater for the
changes. However, these changes could not be implemented as the computerisation
project was still ongoing.

Root Cause

The Accounting Officer did not request the Service Provider to address the shortcomings
identified.

Recommendation

The Project Steering Committee should take appropriate remedial actions.

Ministry’s Response

User Acceptance Testing is still ongoing.

The Service Provider has been requested to address the shortcomings and expedite the
completion of the project.

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19.1.2 Transition Unemployment Benefit – Alleged Cases of Fraud

Transition Unemployment Benefit (TUB) is paid to laid-off workers for a period not
exceeding 12 months.

The monthly payments are as per the rates specified in the Sixth Schedule of the Workers
Rights Act. Details are given in Table 19-1.

Table 19-1 Transition Unemployment Benefit after Termination of Employment

Period after Termination of Employment or Rate of Benefit per month


Registration with Supervising Officer
First 3 months 90% of basic wage or salary
th
From 4 month to end of 6th month 60% of basic wage or salary
From 7th month to end of 12th month 30% of basic wage or salary but not less than
3,000 rupees
Source: Workers Rights Act

Findings

Alleged cases of fraud involving some 100 applications for the payment of TUB at
Curepipe and Chemin Grenier Labour Offices were reported in September and October
2022. The amount involved has not yet been quantified by the Ministry.

All records in respect of the alleged cases of fraud were kept under lock at the Labour
Division. The cases were reported to the Independence Commission Against
Corruption (ICAC) and were under investigation by the Police Service.

Root Cause

The Accounting Officer did not establish a sound system of internal control and monitoring
mechanism to prevent fraud and irregularities at the Labour Offices.

Recommendation

The Accounting Officer should implement a proper system of internal control and
monitoring mechanism to ensure that lapses in TUB payroll do not recur.

Ministry’s Response

Following a review of the system for the processing of TUB applications carried out
by the Office of Public Sector Governance, an interim report was submitted and the
recommendations therein are under consideration.

The alleged cases of fraud are still under investigation by the Police Service and ICAC
and the suspected officers were transferred to other Labour Offices.

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MINISTRY OF LABOUR, HUMAN RESOURCE DEVELOPMENT AND TRAINING AND COMMERCE AND CONSUMER PROTECTION
19.1.3 Risk Management Framework – Not yet developed

In December 2021, the Ministry of Finance, Economic Planning and Development


(MoFEPD) issued a circular regarding the establishment of Risk Management (RM) in the
Public Sector.

In view of facilitating the process, MoFEPD developed Guidelines for the establishment of
a RM Framework in Ministries/Departments. According to the Guidelines, the Accounting
Officer is accountable for the overall governance and has the ultimate responsibility for
RM.

Finding

The RM policy had not yet been implemented and the time frame for implementation was
not set. Hence, the risks areas were not addressed by the Ministry.

Root Cause

The Accounting Officer did not take appropriate action for implementing the RM
Framework.

Recommendation

The Accounting Officer should set a time frame for the implementation of the RM
Framework once staff obtain the appropriate training.

Ministry’s Response

The Ministry has already embarked on the implementation of the RM Framework.

19.1.4 Internal Audit

Finding

As per the Internal Audit plan, items such as capital expenditure on IT equipment,
computerisation of OSHD and the Registry of Associations were planned to be covered
during the financial year 2022-23. However, these were rolled over to the next financial
year. Hence, any shortcomings in these components were not identified.

Root Cause

The planned audits were rolled over because the computerisation project was ongoing.

Recommendation

The Accounting Officer should identify all high risks areas to be audited.

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MINISTRY OF LABOUR, HUMAN RESOURCE DEVELOPMENT AND TRAINING AND COMMERCE AND CONSUMER PROTECTION
Ministry’s Response

Pursuant to consultations with the Internal Control Unit, the audit of the high risks areas
mentioned are being carried out during the financial year 2023-24.

19.1.5 Governance Issues – Non-compliance with Legislation

Provisions have been made in various legislations to impose a statutory responsibility on


Accounting Officers and Boards of Statutory Bodies with the objective of strengthening
accountability and transparency in the public sector.

Findings

Non-Submission of Report on Performance

As of 18 December 2023, the Report on Performance of the Ministry of Labour, Human


Resource Development and Training (Labour Division) for the financial year 2022-23 had
not yet been submitted to the Ministry of Finance, Economic Planning and Development,
despite the statutory deadline being 31 October 2023.

Non-submission of Financial Statements for audit

The Statutory Bodies (Accounts and Audit) Act requires the Chief Executive Officer of a
Statutory Body to submit the Annual Report to the auditor not later than four months after
the end of every financial year.

As of 14 December 2023, the Trade Union Trust Fund (TUTF) falling under the aegis of
the Labour Division had not yet submitted its Financial Statements for the financial years
2021-22 and 2022-23 for audit.

Annual Reports not laid before the National Assembly

The Statutory Bodies (Accounts and Audit) Act requires a copy of the annual report and
audited accounts of every Statutory Body to be laid before the National Assembly at the
earliest opportunity.

As of 14 December 2023, Annual Reports of two Statutory Bodies had not yet been laid
before the National Assembly as shown in Table 19-2.

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Table 19-2 Annual Reports including Audited Financial Statements not laid
before the National Assembly

Statutory Body Financial Year/Period Date No. of


Certified Financial
Statements
Manufacturing Sector 2019-20 15.07.2021 1
Workers Welfare Fund

Trade Union Trust Fund 2015, 01.01.2016 to 09.12.2021 5


30.6.2017, 2017-18 to
2019-20
2020-21 13.04.2023 1

Source: NAO records and National Assembly Hansard

NAO is of the view that the Ministry should exercise control over Statutory Bodies and
other entities operating under its aegis to ensure that they fulfil their statutory
responsibilities regarding the preparation of financial statements, their submission for audit
and tabling before the National Assembly.

Ministry’s Response

The Annual Report on Performance of the Ministry would be submitted by the end of
February 2024.

Needful will be done by the TUTF to submit the financial statements by the end of
February 2024.

The Annual Report of the Manufacturing Sector Workers Welfare Fund for the
financial year 2019-20 was re-submitted to the National Assembly on 8 January 2024.

Necessary arrangement would be made for the Annual Reports to be laid before the
National Assembly upon submission by the TUTF.

19.1.6 Follow-up of Matters Raised in the Audit Report 2021-22

A follow up of matters raised in the Audit Report 2021-22 was carried out. The Labour
Division was requested to inform the National Audit Office of the actions that have been
taken to address the findings and recommendations in the Report. The information along
with evidence collected through review of files and documents were assessed and discussed
with the Ministry.

The status on actions taken on findings since the publication of the Audit Report are
summarised below. The two findings have been partially resolved.

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SN Findings Ministry’s Response – NAO Comments
Status as at February 2024
Registry of Associations - Poor monitoring over non-submission of Returns of Associations
and Trade Unions (Page 289)

1 There was no proper follow up of Monitoring of Associations and


Annual Returns submitted by Trade Unions are being
Associations and no actions was exercised, following the Partially
taken against Trade Unions for non- recruitment of inspectors of Resolved
submission of their Returns. associations in July, September
(Pg 289, Para 19.1.1) and December 2023.

Governance Issues - Non - Compliance with Legislation (Page 290)


2 Non submission of Financial Not yet submitted.
Statements for Audit by Trade Union
Trust Fund (TUTF) for financial year
2021-22.
Partially
Annual Reports of three Statutory
Resolved
Bodies (MITD, MSWWF and TUTF) One Annual Report of MSWWF
were not yet laid before the National and Five Annual Reports of
Assembly. TUTF not yet laid.
(Pg 290, Para 19.1.2)

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19.2 HUMAN RESOURCE DEVELOPMENT AND TRAINING DIVISION
19.2.1 Risk Management Framework – Not yet developed

In December 2021, the MoFEPD issued a circular regarding the establishment of Risk
Management (RM) in the Public Sector.

In view of facilitating the process, MoFEPD developed Guidelines for the establishment of
a RM Framework in Ministries and Government Departments. According to the Guidelines,
the Accounting Officer is accountable for the overall governance and has the ultimate
responsibility for RM.

Finding

The RM policy has not yet been implemented and the time frame for the implementation
was not set. Hence, the risks areas were not addressed by the Ministry.

Root Cause

The Accounting Officer did not initiate actions for the implementation of the RM
Framework.

Recommendation

A time frame should be set for the implementation of the RM framework once staff obtain
the appropriate training so as Circular No. 8 of 2021 on Guidelines for establishment of
RM in the Public Sector is adhered to.

Ministry’s Response

The Ministry is presently working on the implementation of the RM Framework and same
will be completed by February 2024.

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MINISTRY OF LABOUR, HUMAN RESOURCE DEVELOPMENT AND TRAINING AND COMMERCE AND CONSUMER PROTECTION
19.3 COMMERCE AND CONSUMER PROTECTION
19.3.1 Governance Issues – Non-compliance with Legislation

Provisions have been made in various legislations to impose a statutory responsibility on


Accounting Officers with the objective of strengthening accountability and transparency in
the public sector.

Finding

Non-submission of Report on Performance

As of 18 December 2023, the Report on Performance of the Ministry of Commerce and


Consumer Protection for the financial year 2022-23 had not yet been submitted to the
Ministry of Finance, Economic Planning and Development, despite the statutory deadline
being 31 October 2023.

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20 - MINISTRY OF HEALTH AND WELLNESS
20.1 Inefficiencies in Capital Project Management

The NAO has regularly reported on the lapses in the management of capital projects by the
Ministry of Health and Wellness (MoHW). Inefficiencies as highlighted in subsequent
paragraphs regarding Capital Project Management were once more noted:

20.1.1 Poor Planning at Initial Stage

Additional works had to be carried out at the Coromandel and Stanley Mediclinics as the
initial scope of works did not take into account legal requirements. The original contract
value was thus exceeded in both cases. Refer to paragraphs 20.4 and 20.5.

20.1.2 Inadequate Planning in Infrastructure Development

Preparation of a Planning Policy Guidance in collaboration with the Ministry of Housing


and Land Use Planning (MHLUP) had not been envisaged by MoHW.

Ministry’s Response

Planning clearances, the National Development Strategy, Planning Policy Guidance (PPG)
and Area Action Plan are all under the purview of MHLUP and regulated by the Town and
Country Planning Act and the Planning and Development Act. This Ministry has not been
approached by MHLUP for inputs to review the PPG.

20.1.3 Inordinate Delays in Project Completion

The expected completion date for the construction of the New Flacq Teaching Hospital was
extended by some 14 months to August 2023. However as at that date, only 80 per cent of
works were completed. Construction of the Stanley Mediclinic was still ongoing as of
September 2023, that is 4 years after award of the contract. Meanwhile, patients had to
travel to other hospitals for the required health services. Refer to paragraphs 20.3 and 20.4.

Ministry’s Response

Construction works of the New Flacq Teaching Hospital is expected to be completed


by April 2024 following additional works for provision of a Police Post. The hospital
is expected to be operational in July 2024.

For the Mediclinic at Stanley, extension of completion date is inter-alia due to


lingering delays from utility service providers. These utlilities are crucial for the
commissioning of the building. However, it has also been noted that works are delayed
from the Contractor’s side.

20.1.4 Non-sanctioning of Defaulting Contractors

MoHW did not apply liquidated damages for the construction of the Stanley Mediclinic
although the project was not completed as of 31 October 2023. Refer to paragraph 20.4.

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Ministry’s Response

The delays in construction are both due to slow progress of works and non-provision of
crucial utilities. Applicability of liquidated damages would depend on unjustified delays
from the Contractor’s side.

20.1.5 Inadequate Expertise in Managing Civil Works

Heavy reliance was placed by MoHW on the Project Management Consultancy firm HSCC
(India) Ltd for technical, financial and contract administration matters. There is a need to
strengthen the Project Implementation Unit (PIU) which was not adequately staffed with
technical and professional personnel. Refer to paragraphs 20.2 and 20.3.

Ministry’s Response

In view of Human Resource proposals for financial year 2023-24, additional technical and
professional staff were funded in the Budget Vote of this Ministry. The Ministry of
National Infrastructure and Community Development has posted two Civil Engineers at the
Project Implementation Unit of this Ministry.

20.1.6 Disruption in Services to Patients pending completion of the Construction of


New Hospitals

A negative impact on services delivered to patients was noted by NAO while the new
hospitals were under construction. The Speech and Audiology Services of the old ENT
Hospital faced serious constraints following its relocation to Victoria Hospital.

Extension of the expected completion date of August 2023 of the New Flacq Teaching
Hospital to April 2024 deprived the patients of several new services such as Lithotripsy,
Neurosurgery, CT Scan Examination that are not being provided at the
Dr. Bruno Cheong Hospital. Thus, patients had to be referred to other hospitals pending
the completion of the construction of the new hospital. Refer to paragraphs 20.2 and 20.3.

NAO is of the view that delays in the implementation of health infrastructure projects may
cause harm to the population. Hence, it is imperative that the PIU be made effective and
efficient.

Ministry’s Response

The services of speech therapy and audiology were only made available, in Victoria
Hospital, in January 2019.

The New Flacq Teaching Hospital is expected to be operational in July 2024. Patients
requiring Lithotripsy, Neurosurgery and CT Scan Examination have been referred to
other hospitals on appointment and the services were provided as per the request of the
treating Specialist.

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MINISTRY OF HEALTH AND WELLNESS
20.2 ENT Health Care Service Delivery affected with the Relocation of Services

In year 2016, a turnkey project was initiated for a modernised ENT hospital on a
Government-to-Government (G-to-G) basis. The estimated total cost of the project
amounted to some Rs 889 million, with Government of India’s assistance totalling some
Rs 500 million.

In January 2018, to enable the construction of the new hospital, the staff and services were
shifted to other health institutions. Upon completion of the Hi-Tech hospital, the main
services were reverted to the New ENT Hospital in November 2019.

The New ENT Hospital was converted into a COVID-19 Hospital in March 2020, with all
existing services relocated to other health institutions. The New ENT Hospital resumed its
ENT services in September 2023.

Findings

20.2.1 ENT Services Adversely affected during Construction of the New ENT Hospital
and Relocation

ENT services were delivered under very unfavourable conditions during the construction
of the new hospital and when the latter was converted into a COVID-19 hospital.

Impact of relocation on Speech and Audiology Department

The Speech and Audiology Department (SAAD) faced serious problems to obtain a
proper space at Victoria Hospital (VH) for its operations. It was only on 4 January
2019, that is one year after the relocation, that it became fully operational, resulting in
long waiting lists.

Soundproofing works had to be undertaken for SAAD to be functional and, according


to MoHW, a soundproof booth costing Rs 379,500 was installed in June 2018. During
a site visit carried out at VH in August 2023, NAO did not see any evidence of
soundproofing works and soundproof booth.

There are only two Brainstem Evoked Response Audiometry (BERA) equipment in
Mauritius which are used to perform several electrophysiological tests, one at
Dr AG Jeetoo Hospital (AGJH) and the other at VH. The location at VH to house the
SAAD was not appropriate as BERA equipment was showing high artifacts, that is,
unclear images and tests could not be carried out.

Regarding the equipment at AGJH, the Chief Speech Therapist and Audiologist
reported that the BERA tests had not been carried out for the last two years as the
equipment was unusable and had been written off.

Ministry’s Response

The services of speech therapy and audiology were only made available in Victoria
Hospital in January 2019. The sound treated booth was only ready by end of December
2018. The poor infrastructures did not allow for BERA and other electrophysiological

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MINISTRY OF HEALTH AND WELLNESS
testing. BERA and other electrophysiological tests were never started as all accessories for
example electrophysiological gel were expired and requests for purchase were initiated.
The national lockdown then happened.

Continuity of Services affected when New ENT Hospital converted into a COVID-19
Hospital

Mapping (tuning) services for Advanced Bionics Cochlear Implant recipients and
Occupational Therapy for Region 5 were not provided during periods March 2020 to
October 2021 and March 2020 to January 2022, respectively.

The SAAD was relocated at Floréal Mediclinic in November 2020 but the audiology
services resumed only one year later in November 2021. The new location was not
appropriate as water leakages damaged the records books and patients’ files.
Audiometric equipment was exposed to environmental hazards and the slippery floor
was a potential threat to hyperactive patients.

The Casualty, Records and Pharmacy Units of ENT Services were housed in a building
at VH, which had the only hydrotherapy pool in public hospitals and was used by some
325 patients yearly. The hydrotherapy plant was not in operation since
November 2019, thus depriving the needy patients.

The building was in a deplorable state as the roof was made up of asbestos and water
leakages were noted during rainfall. In November 2019, an amount of Rs 9.3 million
had been earmarked for renovation works but this was kept in abeyance.

Ministry’s Response

Mapping of cochlear implants was not done due to the lockdown situation as
professionals from abroad could not come.

The Speech Therapy and Audiology Department was relocated in the X-Ray
department of Floréal Mediclinic where there was regular water leakage. The service
was then shifted to the basement area with sound proofing done.

20.2.2 Poor Control over Existing Assets and Assets Newly acquired

A list of existing equipment at the old ENT Hospital at time of its demolition and an
up-to-date one comprising equipment acquired under the G-to-G agreement, those received
as donation and those acquired by MoHW were not available at time of audit.

Reports of missing IT equipment were made in May 2021 and May 2023 by the Chief
Speech Therapist and Audiologist and an IT officer, respectively.

The present location of several dismantled items, following the demolition of the old
hospital could not be ascertained. On 20 February 2018, MoHW stated, in a reply to the
National Heritage Fund that stones recovered from the demolition of the hospital were
stored and remained the property of the Ministry. However, evidence of the present
whereabouts of the historic stones and wood were not produced.

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MINISTRY OF HEALTH AND WELLNESS
Root Cause

No Contingency Plan was prepared by MoHW regarding the shifting of ENT services to
other hospitals during the construction phase of the New ENT Hospital and the conversion
of the New ENT Hospital into a COVID-19 Hospital.

Ministry’s Response

A survey has been carried out and an updated list of equipment presently at the ENT
Hospital is available.

On 25 July 2018, the request of the National Heritage Fund to confirm and inspect the
location of storage of the wood and stones was submitted to the Contractor. As at date,
no reply from the Contractor was seen in file. This Ministry has relaunched the matter
of the historic stones with HSCC(I) Ltd. A reply is awaited.

20.2.3 Medical Equipment not efficiently used

Digital Fluoroscopy X-Ray Apparatus and Panoramic X-Ray Apparatus

Both apparatus were out of order as at date of audit in August 2023. The Digital
Fluoroscopy X-Ray Apparatus, costing Rs 10.7 million, (including Rs 50,000 for five years
maintenance charges after a two-year warranty period) was commissioned on
13 August 2020. No evidence was seen as to whether maintenance was done.

As for the Panoramic X-Ray Apparatus, no information was available regarding the date of
installation, commissioning and the warranty period.

Ministry’s Response

An updated list of equipment presently at the ENT Hospital and list of equipment
received during COVID-19 is available.

The Panoramic X-Ray Apparatus was in full use during COVID and still functioning.
It was maintained and repaired on an as-and-when required basis by the Company.

CT Scanner (Make: Siemens, Model: Somatom)

Supply, installation and commissioning of the CT Scanner was done in November 2019.
During the period July 2022 to June 2023, 1,749 scans were carried out by the CT Scanner,
despite the fact that preventive maintenance was not done on a quarterly basis. A
maintenance agreement for the equipment was not available. The absence of preventive
maintenance could affect the quality of images produced, which could result in wrong
diagnosis by radiologists.

Ministry’s Response

There is no maintenance contract available for the specialised monitors and IT equipment
in the Reporting Room. A new network has to be made to enable data transfer from CT
Scan Room to X-Ray Reporting Room.

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MINISTRY OF HEALTH AND WELLNESS
Dormant Equipment

Several IT equipment were seen to be lying dormant in the X-Ray Reporting Room, as
at date of audit.

The Double Door Washer Disinfector in the Laundry department has been dormant
since year 2020 as solutions used by the washer were not readily available on local
market.

Root Cause

No Bio-medical engineer was assigned the responsibility for the installation,


commissioning and management of equipment during and after the construction of the New
ENT Hospital.

Recommendations

A survey of existing equipment should be carried out at the hospital and a master list
be kept both at the hospital and MoHW.

MoHW should compile a list of equipment acquired and received as donation and carry
out a survey to ascertain their existence and location.

MoHW should make optimum use of equipment available so that service delivery to
patients is not affected.

The Accounting Officer should assign responsibility for the management of equipment
to a Bio-medical engineer.

Ministry’s Response

Double door washer disinfector solution was not procured during COVID-19 due to
unavailability on the market according to the Maintenance Contractor. Three out of five
specific solutions had been procured. Procurement exercise is under process for purchase
of the remaining two solutions from local market depending on availability.

20.2.4 Unsatisfactory Operations and Maintenance Services for New ENT Hospital

The Contractor responsible for the construction of the New ENT Hospital was awarded the
contract for Operation and Maintenance Services for three years as from November 2019
for a total amount of Rs 35.5 million. The Contract was extended for an additional 12
months in February 2023 for a contract price of Rs 13.5 million. Payments made to the
Contractor as from January 2020 to date of audit totalled Rs 25.4 million.

Procurement exercises were not carried out for the appointment of a contractor at time
of extension of the contract in February 2023.

No action was taken by the Contractor in respect of a Medical Air and Vacuum System
which was faulty since one year.

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MINISTRY OF HEALTH AND WELLNESS
Root Cause

The Operations and Maintenance Agreement was not vetted by the Medical Superintendent
(MS) prior to award of the contract by MoHW.

Recommendation

The MS should ensure that the Contractor complies with the conditions of the Operations
and Maintenance agreement.

Ministry’s Response

The Operations and Maintenance (O&M) agreement is a continuity to the existing


agreement under the award for the construction of the facility. The O&M contract has
been renewed on a year-to-year basis pending a fresh procurement exercise.

Pending fresh tendering exercises for the O&M contract, this Ministry would be
negotiating with the existing contractor for a renewal of the contract for an additional
year.

Compressor for Medical Air and Vaccuum System is still faulty till date. The cost for
repair/replacement is to be borne by the Contractor.

20.2.5 Poor Management of Information Technology Considerations

The Central Informatics Bureau was not involved in the drafting of technical
specifications and implementation of the e-Health System at the New ENT Hospital.
Furthermore, the IT and Control System Installations were not included in the
extension of the Operations and Maintenance agreement in February 2023.

No information was available at MoHW on the validity of Licences pertaining to the


E-Health and Picture Archiving and Communication System, including the Queue
Management System. The server where the Clinical System was hosted was reported
to have hardware faults on its motherboard.

In January 2022, the Chief Health Officer informed that the E-Health System was
inappropriate and was not customised to users’ requirements despite that these were
pointed out at the very start of the project.

MoHW did not channel its request for the downgrading of bandwidth connectivity to
the appropriate person at the Service Provider, resulting in additional expenditure of
some Rs 6 million.

Root Causes

Technical Specifications of the IT system were not correctly prepared by MoHW at


planning stage of the project.

Requirements of users were not taken into consideration at start of the project.

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MINISTRY OF HEALTH AND WELLNESS
Recommendation

IT and Control System installations should be included in the new Operations and
Maintenance agreement.

Ministry’s Response

The awarded contract of Rs 885 million included IT works of Rs 50.6 million. The IT
issues which cropped up were due to the non-involvement of the Central Informatics
Bureau from the project preparation till its implementation. The sub-contractor which
implemented the e-system did not cooperate to resolve the matter and the main
contractor’s involvement was not seen.

Follow-up meetings for customisation of the E-Health System were held with HSCC(I)
Ltd and the IT subcontractor(s). However, issues raised were still not resolved. In view
of the implementation of the National e-health project for which contract was signed
with United Nations Development Programme, the unfit e-System at the ENT Hospital
with inherent security concerns was discontinued.

On 3 February 2021, MT informed this Ministry that the request for downgrading was
not entertained because the request was not made to the appropriate MT officer and a
formal request needed to be made to MT. A formal request was accordingly made on
22 March 2021. As the responsibility of miscommunication was a shared one, the
Ministry settled 50 per cent of the amount due excluding surcharges.

20.3 Infrastructure Development for Regional Hospitals: Absence of Planning and


Delays in Completion of Construction of New Flacq Teaching Hospital

In year 2015, MoHW proposed to construct a New Flacq Teaching Hospital (FTH) for the
Flacq region due to capacity development constraints and structural problems with the
existing Flacq Hospital, on a plot of land of and extent of 7A53.

Phase I of the project consisted of constructing and equipping the hospital block, whereas
Phase II involved the construction and equipping of the teaching block.

The consultancy and design of the project, along with the bidding procedures for the
selection of the Contractor, were entrusted to an Indian Consultancy firm. Following the
latter’s evaluation and recommendation, the contract for Phase I of the project, that is the
construction of the New FTH, was awarded by MoHW in August 2020 to an Indian
Company for some Rs 2.6 billion (exclusive of VAT) for a duration of 22 months.

Due to various delays and additional works, the expected completion date was extended by
some 14 months. As of 30 September 2023, Rs 1.75 billion and Rs 104 million were paid
to the Contractor and Consultant, respectively, and approximately 80 per cent of the works
were completed as of 29 August 2023.

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MINISTRY OF HEALTH AND WELLNESS
Findings

20.3.1 Inadequate Planning for Infrastructure Development of Regional Hospitals

Master Plan

MoHW did not have a Master Plan addressing infrastructure development for the
Jawaharlal Nehru Hospital despite having hired the services of an Indian Consultancy firm
since year 2017.

Planning Policy

MoHW has not liaised with MHLUP for discussions regarding the preparation of a
Planning Policy Guidance for hospital development.

This would enable local authorities to control development around hospital sites, which
would help MoHW in planning for future expansion and avoiding costly relocation
exercises.

Operating Financial Implications

MoHW did not work out the financial implications to enable the New FTH to operate as
intended and at full capacity. In addition to the construction costs for Phases I and II of the
project, other costs identified by NAO from different sources included among others,
consultancy fees and construction of a traffic centre.

The estimated project value of both Phases I and II is around Rs 8.8 billion including
medical equipment but excluding cost of utilities.

Ministry’s Response

The Needs Analysis for the New Flacq Regional Hospital provided by the Health
Economics Unit of this Ministry in November 2015 had an estimated cost of Rs 6.65 billion
of which capital costs amounted to Rs 4.95 billion and the annual recurrent costs to
Rs 1.70 billion. At that time, the costs of land, traffic network, traffic centre and water
connectivity were not factored into the project. The Needs Analysis did not consider the
Teaching component.

20.3.2 Absence of Planning for Transfer of Services to the New FTH

Staffing Requirements

Staffing requirements were initially made in year 2015, but were neither updated nor
provided for in the Estimates 2023-24 and prior years for the New FTH.

Existing Buildings/Equipment/Furniture

The monetary value of the existing assets, that is buildings, equipment, furniture and land,
of the Dr. Bruno Cheong Hospital (BCH) was not computed by MoHW. However,
according to files and records examined by NAO, functional equipment amounted to

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MINISTRY OF HEALTH AND WELLNESS
approximately Rs 100 million while office furniture acquired over the last two financial
years totalled Rs 8 million.

MoHW did not consider these assets while purchasing new assets estimated at
Rs 600 million for New FTH.

Root Cause

The Accounting Officer did not set up a Project Steering Committee to monitor the
implementation of the New FTH project and to address all its other implications such as
the infrastructure development, the outcome of the existing BCH and the assets thereat.

Ministry’s Response

A focus meeting is being called with regard to the HR requirements for each project.

A separate record will be kept for all equipment still in good condition, which will be
used at BCH. This equipment will not be transferred to New FTH.

With regards to equipment which will be transferred to the New FTH, the respective
managers and head of units will ensure that proper records are kept in their
ledger/inventory.

A ledger is being kept for all equipment/apparatus which are not in good condition/
beyond repair and necessary actions will be taken for write-off.

20.3.3 Non-compliance with Conditions of Loan Agreements

In year 2018, loan agreements were signed with three foreign agencies for a total amount
of US$ 95 million. The following conditions of the loan agreement were not complied with:

A Project Implementation Team was not set up. Several positions were not occupied
in the team composition during the whole duration of the project.

Manpower planning needs were not worked out.

No documentary evidence was seen where the Consultant certified that the bills of one
of the foreign agencies complied with regulations prohibiting trade with designated
countries.

Ministry’s Response

The Project Coordinator/Manager changed because they are staff from the
Administrative Cadre and are required to occupy positions of responsibilities in
different Ministries/Departments. However, at all times, there was a Project
Coordinator/Manager on the project.

HSCC(I) Ltd has its team of architects and engineers present to support the project.

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As regards the Civil Engineer, there was a gap and as from October 2023, the number
of Civil Engineers has increased to two. This Ministry would pursue the strategic
enabler provided for in Budget 2023-24; ‘set up a dedicated Unit for the timely
maintenance and construction of health infrastructure’.

The Consultant would be requested to provide reassurance that the claims received
from the Contractor comply to the loan requirements.

20.3.4 Contract Management/Project Implementation Problems

Inadequate Technical Expertise at MoHW

MoHW relied heavily on the Indian Consultancy firm to convey approval for technical,
financial and contract administration matters. This was necessary because the PIU was
not adequately staffed with technical and professional personnel and also, MoHW has
not enlisted the Ministry of National Infrastructure and Community Development
(MNICD) as an independent expert to advise on the New FTH project issues.

MoHW could not always take informed decisions. For example, regarding the
construction of a boundary wall for the New FTH, the Consultant and the Contractor
entered into a negotiation process whereby the initial offer of Rs 22 million was
brought down to Rs 18.4 million. It was not known whether MoHW was involved in
the negotiation process as discussions held were not documented.

Avoidable Delays

The expected completion date of August 2023 was extended by 14 months due to various
delays and additional works. However, delays of 180 days could have been avoided, had
prompt decisions been taken by MoHW as shown in Table 20-1.

Table 20-1 Avoidable Delays

Description of Delays Avoidable


Effective Delays
(Days)
Handing over of Encumbrance free land 76
MRA: VAT and Customs Duty Exemption 23
Procedures
Changes in layout design at Office areas on 4th,5th, 69
and 6th floor
Delay in shifting of HT Line by the CEB 12
Delay due to discussion on introduction of Days Not
Endoscopy department mentioned
Total effective delays/ Minimum avoidable delays 180

Source: Project files

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The handing-over of encumbrance free land was delayed as MoHW waited for the
land-owner to clear its encumbrances and also to obtain clearances to remove all trees
in the orchard.

The tardy clearance procedures of MRA/CEB (35 days) could have been avoided if the
requested clearances were tightly monitored.

Root Cause

The PIU did not exercise independent vigilance on the implementation of all the project
components related to the New FTH. There was no technical expert to give independent
advice to MoHW.

Ministry’s Response

HSCC (I) Ltd is the Project Management Consultant on the Project and this Ministry
aligned to its recommendations. Involvement of the Ministry of National Infrastructure
and Community Development, for instance, would have provided additional
reassurance to this Ministry on decisions taken.

With regard to the preventable delays of 180 days, due to non-availability of an


adequate internal team of Civil Engineers, Architects and Quantity Surveyors, this
Ministry had limitations to manage the Project Implementation. Delays from relevant
authorities to requests made by this Ministry should also be factored in.

20.3.5 Project Delays Negatively impacting on Service Delivery/Phase II Project


Objectives

Impaired Service Delivery

Several health services were unavailable at BCH and patients had to be referred to other
regional hospitals.

Patients requiring MRI, CT scan examinations and neurosurgery were referred to


the Sir Seewoosagur Ramgoolam National Hospital (SSRNH).

VH absorbed patients needing treatment related to Lithotripsy, Spine Unit, Cardiac and
Cancer services.

Vascular surgery patients were referred to the Jawaharlal Nehru Hospital (JNH).

This led to patients of Flacq region having to travel long distances to attend hospitals far
from their residences, resulting in long waiting times for both patients of Flacq Region and
those patients of the other regional hospitals.

Such situations will persist till the completion of the New FTH.

Also, the hospital buildings were in deplorable state.

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Building Block B was characterised by leakages and accumulation of water at several
places, including waiting areas which required tent services.

Dental services were provided in container-type designed clinics.

BCH accommodated only 13 wards instead of 24 for a typical regional hospital. This
resulted in some wards being mixed and crammed, where the spacing between beds
was less than 1.5 metres.

20.3.6 Project Objectives not yet attained

As of November 2023, no significant progress has been made towards the implementation
of Phase II of the project, that is, constructing and equipping the Teaching Block of the
New FTH.

In accordance with the Budget Speech 2022-23, the second phase of the New FTH project
would be implemented under the Public Private Partnership Framework.

In September 2022, the project was registered as a Build Operate Transfer (BOT) Project
but the Request For Proposal document for a Transaction Advisor had not been finalised as
of end October 2023.

Recommendations

The Accounting Officer should:

set up a Steering Committee to plan, monitor and oversee strategic matters such as the
regional hospital infrastructure development, the outcome of BCH and the optimisation
of functional assets thereat;

formulate a plan to transfer comprehensively all health services to the New FTH
including a manpower plan to operate at its optimal capacity;

ensure compliance with conditions of loan agreements of donor agencies; and

strengthen the pool of technical staff of the PIU to support MoHW in taking informed
decisions.

Ministry’s Response

Health Services mentioned were already unavailable at BCH even before the
conceptualisation of the project and this is one of the main reasons for the project to be
proposed and implemented to palliate to the lack of those services and offer a fully
comprehensive quality health care service to the population of Health Region 3.

The issue of leakages and accumulation of water is not a recurrent one but rather an
exceptional one during heavy rainfall, which is beyond control. Remedial measures
are taken to drain away any accumulated water.

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Dental Services were provided in mobile dental Caravan comprising all general dental
services.

The main reason that the project of New Flacq Hospital has been proposed is the lack
of space at the BCH.

A Steering Committee would be set up at the level of the Ministry to coordinate all
issues pertaining to the setting up of the New Flacq Hospital.

On 5 September 2022, the BOT Projects Unit informed this Ministry that the Project
has been registered as a potential BOT Project. Financial clearance has been obtained
and this Ministry would float the bids for Request for Proposal for the selection of a
Transaction Advisor.

20.4 Construction of Stanley Mediclinic

In October 2019, the contract for the construction of the Stanley Mediclinic was awarded
for a contract value of Rs 82.5 million. The revised contract value after additional works
amounted to Rs 93.7 million. Payments made as at September 2023 totalled Rs 50.1 million.
As of September 2023, that is, some four years after award of the contract, the project was
still ongoing and 20 per cent of works remained to be completed. The project was overseen
by an Indian Consultancy firm, appointed on 5 August 2018 under a G-to-G agreement.

Findings

20.4.1 Poor Planning at Initial Stage of Project

The additional works totalling Rs 11.2 million were due to poor planning at the initial stage
of the project.

Incomplete Scope of Works

At the initial stage, works such as construction of boundary wall and the shifting of
encroaching Community Centre gate for an amount of Rs 2.3 million and
Rs 151,550, respectively, were not included in the scope of works.

Legislation Requirements not complied with

Additional works had to be carried out as requirements of the Mauritius Fire and Rescue
Service (Fire Safety Plan and Fire Certificate) Regulations 2018 and the Second Schedule
of the Building Control (Accessibility and Gender Compliance in Buildings) Regulations
2017 were not taken into account, as detailed in Table 20-2.

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Table 20-2 Additional Works at Stanley Mediclinic due to Non-compliance
with Legal Requirements

Additional Works Rs
Fire Detection & Alarm System 1,784,521
Lift 5,127,500
Metal Emergency Staircase 1,885,340
Total 8,797,361
Source: Project files

Variation Works

The cost of additional works represented some 13.6 per cent of the original contract value.

Ministry’s Response

A meeting was held on 11 October 2018 with the main users of the Mediclinic to agree on
the design. On 25 October 2018, the Consultant was requested to provide the general and
specific items with the detailed design drawings. The designs with the proposed
amendments were submitted on 29 October 2018 for review. Not all requirements from
this Ministry were catered for in the design which led to the additional works. Moreover,
contrary to the Financial Management Manual, no Building Plans Committee was held.

20.4.2 Delay in Extension of Time and Liquidated Damages not applied

Payment of Rs 3 million was made to the Consultant for the supervision of the construction
of the Mediclinic.

Out of the six Extensions of Time (EOT) granted by the Consultant, a delay of more than
100 days was noted in five cases, contrary to the General Conditions of Contract which
require that EOT should be determined by the Consultant within 21 days of submission by
the Contractor.

Liquidated damages were not seen to have been applied by the Ministry as the construction
of the Mediclinic was still not completed as at 31 October 2023.

In two cases, EOT was recommended by the Consultant well after the revised completion
date. The Ministry was given no choice in this matter as the Contractor was already beyond
the revised completion date at time of recommendation by the Consultant. Liquidated
damages were again not seen to have been applied.

Root Causes

Project planning was not correctly done by the Officer-In-Charge of the PIU at design
stage, which resulted in additional works being carried out.
The PIU was not properly manned in terms of officers with engineering background.
Management of the project was poorly done by the Consultant.

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Ministry’ Response

As at 31 October 2023, the progress of works was 90 per cent. The assessment from
the Consultant is required on the way forward for the application of liquidated
damages.

Delays incurred, as per contractual provisions were provided by the Contractor for
approval by the Ministry.

The EOT was recommended by the Consultant after they had lapsed due to delay in
cost approval of additional works of boundary wall, shifting of gate and fire alarm
system, delay in decision from CWA and WMA, adverse climatic conditions and loss
in productivity due to new sanitary measures.

20.4.3 Lease Agreement signed before Advice of Solicitor General

In May 2018, an agreement was signed with the Sugar Industry Labour Welfare Fund
(SILWF) for the lease of a plot of land of 2307 m² for 50 years in relation to the project,
against a yearly payment of Rs 400, subject to revision at any point in time as appropriate.
However, advice of the Attorney - General’s Office (AGO) was sought on 24 July 2018,
that is, after the agreement was signed.

An amended lease agreement including the required amendments, as per advice received
from AGO on 27 July 2018, was not produced to NAO although several requests were
made.

Non-amendment of the initial lease agreement could result in the building housing the
Mediclinic becoming the property of SILWF after 50 years or in case of cancellation of the
lease.

Root Cause

The Accounting Officer did not submit the original lease agreement to AGO for vetting
prior to signature.

Recommendations

The Accounting Officer should ensure that, henceforth, the Ministry complies with all
legal provisions governing healthcare infrastructure projects.

The responsible officer of the PIU must ensure that the Consultant complies with its
terms of reference.

The Accounting Officer should ensure that addendum to the lease agreement with
SILWF includes the recommendations made by AGO.

Ministry’s Response

The Notarised Lease Document was dated 26 April and 2 May 2018. However, on 30 May
2018, attention was drawn to the fact that:

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(i) the document was not vetted by the State Law Office;

(ii) SILWF can issue a ‘Mise-En-Demeure’ to this Ministry; and

(iii) in case the Lease Agreement is terminated, the Mediclinic would become the property
of SILWF without any compensation to Government.

A copy of the lease was submitted to AGO on 24 July 2018. The latter made some legal
observations and that an addendum to the lease agreement be signed before the Notary.
The Ministry has sought the views of the Ministry of Housing and Land Use Planning on
12 January 2024 with regard to vesting/acquisition of the land and a meeting will be held
with relevant authorities to sort out the issue.

20.5 Construction of Coromandel Mediclinic – Deficiencies in Project Management

The contract for the construction of the Coromandel Mediclinic was awarded in
September 2019 for the contract sum of Rs 84.3 million. The revised contract value after
additional works amounted to Rs 104.7 million. Payments made as at September 2023
totalled Rs 83.7 million. Works at the Mediclinic were completed as at 20 December 2022
except for lift installation, emergency staircase and secondary power supply.The
Mediclinic was operational on 6 February 2023. The project was overseen by an Indian
Consultancy firm, appointed on 5 August 2018 under a G-to-G agreement.

Findings

20.5.1 Poor Planning at Initial Stage of Project

The initial completion date of 28 April 2021 was revised to 23 December 2022. This was
attributed to the additional works of Rs 20.4 million which were not provided for at
planning stage.

Incomplete Scope of Works

There was no proper planning at the initial stage of the project as other works, which could
have been foreseen, such as boundary wall, external CCTV cameras and diesel generator
costing some Rs 7.5 million were not included in the scope of works, as detailed in
Table 20-3.
Table 20-3 Additional Works at Coromandel Mediclinic due to
incomplete Scope of Works

Additional Works Rs
Boundary Wall 3,883,745
Diesel Generator 3,500,000
External CCTV cameras 77,500
Total 7,461,245
Source : Project files

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Legal Requirements not complied with

Additional works had to be performed as requirements of the Mauritius Fire and Rescue
Service (Fire Safety Plan and Fire Certificate) Regulations 2018 and the Second Schedule
of the Building Control (Accessibility and Gender Compliance in Buildings) Regulations
2017 were not taken into account, as detailed in Table 20-4.

Table 20-4 Additional Works at Coromandel Mediclinic due to Non-compliance with


Legal Requirements

Additional Works Rs
Fire Detection & Alarm System 2,467,000
Lift 5,260,000
Metal Emergency Staircase 3,839,290
Total 11,566,290
Source: Project files

Variation Works

The cost of additional works represented some 24 per cent of the original contract amount.

Ministry’s Response

A Buildings Plan Committee (BPC) was held on 2 May 2018 to examine the plans. It
is to be noted that at the BPC of 2 May 2018, the initial drawings included one lift and
two staircases. Necessary clearances were obtained from the Mauritius Fire Rescue
Services.

On 5 August 2018, this Ministry approved for HSCC(I) Ltd to implement the project
as Consultant under a G-to-G agreement. On 10 May 2019, this Ministry sought
relevant clearances on the set of drawings worked out by HSCC(I) Ltd.

The delays in obtaining the relevant no objections/clearances from different authorities


also resulted in additional works during project implementation.

This Ministry would pursue the strategic enabler provided for in Budget 2023-2024:
‘Set up a dedicated unit for the timely maintenance and construction of health
infrastructure’

20.5.2 Approved Costs of Additional Works

Additional works were approved on the basis of quotations submitted by the Contractor.
In 6 cases out of 12, the quotations submitted by the Contractor for works totalling
Rs 13.9 million were higher by some Rs 2.3 million, compared to the assessments made by
the Consultant, that is, Rs 11.6 million. Nevertheless, the Consultant requested MoHW to
approve the additional works on the basis of the quoted amounts. Significant differences
of Rs 1.2 million and Rs 800,000 were noted in respect of the lift and metal emergency
staircase, respectively.

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MINISTRY OF HEALTH AND WELLNESS
Ministry’s Response

The Ministry adhered to the recommendations of the Consultant. However, in case these
requirements had been included prior to the bidding exercises, a more competitive price
might have been secured by this Ministry.

20.5.3 Delay in Determination of Extension of Time

Payment of Rs 4 million was made to the Consultant for the supervision of the construction
of the Mediclinic. A delay of more than 50 days was noted in the determination of the three
EOT assessed by the Consultant. This was not in accordance with the General Conditions
of Contract which provides that EOT should be determined by the Consultant within 21
days of submission by the Contractor.

Root Causes

Inadequate project planning by the Officer-in-Charge of the PIU at design stage


resulted in additional works being carried out.

The PIU was not properly manned in terms of officers of engineering background.

Management of the project was poorly done by the Consultant.

Recommendations

The Accounting Officer should ensure that, henceforth, the Ministry complies with all
legal provisions governing healthcare infrastructure project.

The responsible officer of the PIU must ensure that the Consultant complies with its
terms of reference.

Ministry’s Response

The reasons for the delays, as assessed by the Consultant and approved by the Ministry
were varied including COVID-19 and its aftereffects, delays in clearances and
authorisations, additional works and contract management.

20.6 Warehousing of Pharmaceutical and Medical Disposables – Lapses in Stores


Management

The Central Supplies Division (CSD) is currently accommodated in a building which dates
back to year 1965 and is no longer appropriate and adequate for storage of pharmaceutical
items and medical disposables. In view of space constraints, stock of drugs and other items
are kept in other warehouses located at Castel, Pailles, Plaine Lauzun, Pointe-Aux-Sables
and La Rosa. The value of pharmaceutical items and medical products held by the CSD as
at 30 June 2023 was some Rs 1.8 billion.

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Findings

20.6.1 Undue Delay in Realisation of Warehouse Project

Since year 2009, several projects were initiated for the setting up of a warehouse. However,
these projects have not materialised. Expenditure of some Rs 14 million were incurred by
MoHW as follows:

In December 2013, an amount of Rs 5.2 million was paid to a Consultant for a


feasibility study on the construction, operation and maintenance of a Modern
Warehouse.

The setting up of a National Warehouse for essential drugs and medical consumables
at Cote d’Or was approved in April 2021. The Ministry paid Rs 5.1 million to a private
company for the lease of a plot of land to the extent of 10 acres for the period July 2021
to June 2024 for this project.

In September 2022, a transaction adviser was appointed to implement the warehouse


project. Payment of some Rs 3.8 million was made during the financial year 2022-23
for the inception and draft structuring report for the warehouse.

As per the Public Sector Investment Programme (PSIP), the project cost has increased from
Rs 60 million in the financial year 2008-09 to Rs 2.2 billion in the financial year 2023-24.

Ministry’s Response

User requirements fluctuated at the initial stages. Initially, around 13,000 m² were
proposed which later were changed to 8,600 m². As only Rs 60 million were earmarked
under PSIP in 2009, this Ministry decided to implement the project in two phases of
5,000 m² and 10,000 m² respectively.

According to the feasibility study of the consultant, a phased approach to the


construction of the warehouse was preferred with an area of 12,800 m2 costing Rs 679
million.

A transaction adviser was appointed for the warehouse project under the Build-
Operate-Transfer (BOT) Scheme. In its Project Structuring Report, the transaction
adviser recommended a surface area of 29,833 m² but with a storage volume of
145,510 m³ costing Rs 2.2 billion.

Following the winding up of the company, a Request for Proposal was issued in
October 2023 for the selection of a new transaction adviser.

The increase in cost is mainly attributed to increases in construction materials and


related inflation rates and challenges to soil conditions.

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20.6.2 Expenditure in Relation to Scattered Warehouses - Rs 83.3 million

The non-construction of a central warehouse resulted in some Rs 83.3 million being paid
for rental of buildings and security/cleaning services over the last three financial years.
Moreover, lease agreements were not available for two stores of MoHW.

20.6.3 Expenditure incurred due to lack of space in warehouses - Rs 28.6 million

Some Rs 28.6 million were paid over the last three financial years as storage and demurrage
fees due to lack of space in the warehouses.

Ministry’s Response

Pending the start of construction projects for the warehouse, the Ministry had to go for
the renting of buildings to store drugs and medical disposables. Currently, the Ministry
is renting only the NIC building and La Rosa warehouse.

Delivery of containers is not effected promptly upon shipping. Containers are stacked
in shipping hubs mainly at Colombo and rerouted to Mauritius when transhipment
vessels are available. Demurrage fees are incurred due to several containers being
delivered concurrently instead of receiving same in a staggered manner.

The draft lease agreement for the La Rosa warehouse is being finalised. For the NIC
building, the Ministry has sought clearances from Valuation Department,
Commissioner of Police, Environmental Health Engineering Unit, TMRSU and NICD.
Replies are awaited. Such clearances are required in accordance with circular No 45 of
2023 from MNICD.

20.6.4 Storage of Drugs in Deplorable Conditions

The Stores were not in compliance with financial regulations which require that officers
have to ensure that items held in store are maintained in good condition, are fit for use and
do not suffer damage or deterioration because of inefficient storage.

Site visits carried out by Officers of NAO at three stores in August/September 2023
revealed that a significant quantity of drugs and medical items was kept under unsuitable,
risky and unhealthy conditions as follows:

Water leakages were noted at several places and the ceiling of some stores were in a
deplorable state, representing a major health hazard.

Air conditioners were not functioning in four rooms at CSD Plaine Lauzun,
Section C of Ex-Tobacco Board and Ground Floor at CSD Castel, where
pharmaceutical items should have been kept below 25°-30°C.

At CSD Plaine Lauzun,

(i) stores were infested with rats, thus causing damages to lots of medicines despite
frequent interventions by Health Office staff;

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(ii) similar items were kept at different locations due to lack of space; and

(iii) out of 40 CCTV cameras, 20 were out of order since March 2023.

At Guibies Store,

(i) there was no CCTV camera;

(ii) At Section C the carton boxes were damaged and piled in a disorderly manner as
shown in Figure 1, thus rendering stocktake practically impossible. Staff had to
climb on boxes to retrieve other boxes;

(iii) there was an open space above the doors which made the store at Section C prone
to theft and ingress of rain water;

(iv) animal droppings, representing a potential health hazard, were seen on the floor of
Section C;

(v) broken window panes were seen in Section A; and

(vi) the lift was not operational since year 2021.

Figure 1 – Carton Boxes not properly stacked at Guibies Store

The Stores at CSD Plaine Lauzun, Ex Tobacco Board, Guibies and Ex Government
Printing were not in line with Section 19 of the Mauritius Fire Rescue and Services
(MFRS) Act 2013 for fire certificate purposes.

Ministry’s Response

For the leakages, appropriate actions have been taken to look for other buildings to be
used as warehouses as repairs and maintenance are too costly. The Energy Services
Division will proceed with the repairs of the Air-Conditioner which is expected to be
completed by end of December 2023.

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CSD Plaine Lauzun:

(i) approval for repair of CCTV cameras is still being awaited from the Procurement
Department.

(ii) The Rodent Control Unit is now effecting two interventions per week instead of
once weekly.

(iii) Items stored at different locations have now been transferred to the La Rosa
Warehouse, New Grove.

Guibies Store:

All items for Section A have already been transferred to La Rosa, New Grove. As for
Section C items, it has not been possible to continue with the transfer of the remaining
5 to 10 per cent left due to ‘insufficient plastic pallets at La Rosa Warehouse and the
Goods Lift at La Rosa warehouse Building being at present out of order.

Application for fire certificate for CSD was made twice, once on 29 March 2023 and
secondly on 17 April 2023. Both were rejected by MFRS. The Ministry of National
Infrastructure and Community Development was requested in August 2023 to draw an
updated architectural plan and location/site plan for onward submission to MFRS and
same is being awaited.

20.6.5 Storage Space occupied by Expired Items

According to the Electronic Inventory Management System (EIMS), expired


pharmaceutical and medical items at the CSD totalled some Rs 213 million for the period
January 2020 to August 2023. Information regarding expired items at Hospitals and Health
Centres as well as expired items for year 2019 was not available.

Expired drugs were also kept in two containers of some 67.3 m³ as shown in Figure 2.

Figure 2 – Containers used as Stores in the compound of CSD at Plaine Lauzun

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MINISTRY OF HEALTH AND WELLNESS
These drugs have been kept in these containers for more than 10 years in the compound
of the CSD.

The drugs were in a deplorable state.

The containers could not be opened as they represented a potential risk of environment
pollution and public health risk.

Root Cause

Indecisiveness of the Ministry since year 2009 regarding location of the central warehouse had
led to excessive rental payments and inadequate storage of pharmaceutical and medical items.

Recommendations

Urgent action must be taken to discard the expired items stored in the containers.

Board of survey should meet on a quarterly basis instead of annually for


pharmaceutical items and medical disposables.

The Ministry should devise a policy for the disposal of drugs.

The Ministry should set up a Steering Committee to fast-track the project for the
construction of a warehouse.

Ministry’s Response

The list of remaining items to be disposed for the CSD has been sent to the Solid Waste
Management Division of the Ministry of Environment, Solid Waste Management and
Climate Change for advice on the mode of disposal. Segregation of unwanted goods
from serviceable stores is an ongoing exercise. Moreover, a Board of Survey is being
constituted to group all unwanted goods, the unit cost of which exceeds Rs 25,000,
from all hospitals and outstations for disposal.

The containers have been opened and a survey is at present being carried out to list
down all the items found in the two containers. The exercise is expected to be
completed by end of January 2024. Once the exercise is completed, write-off and
disposal procedures will be initiated through the Solid Waste Management Division.

20.7 Poor Stock Management of Pharmaceutical Products

Over the last five years, MoHW had spent some Rs 6.4 billion on the procurement of
pharmaceutical items which consisted mainly of the purchase of medicine, drugs, vaccines,
ayurvedic and other traditional medicine. These items were kept in five warehouses for
distribution to the health centres. Since January 2020, MoHW implemented the EIMS to
record receipts and issues of stock items.

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MINISTRY OF HEALTH AND WELLNESS
Lapses highlighted in Previous Audit Reports

NAO highlighted the following issues in connection with stock management in its previous
Audit Reports:

MoHW did not have a standard for the assessment of quantities that would be required
for the next 15 to 18 months by each health centre.

Decisions were based on unreliable data from the EIMS.

The procurement lead time was well above the 110 days recommended by the
Procurement Policy Office (PPO).

There was a lack of oversight by MoHW over local purchases effected by hospitals as
there were major differences in prices paid by hospitals.

The completeness and accuracy of the stock value provided could not be ascertained.

No corrective actions have been taken by MoHW and the above shortcomings still recurred
at time of audit in October 2023.

Findings

20.7.1 Poor Procurement Planning leading to Items Out-of-Stock or Expired Items

Out-of-stock Items

According to a report extracted from the EIMS on 16 August 2023, 111 items, which were
included in the Annual Requirements by health centres, were out-of-stock at the CSD.

During the financial year 2022-23, there were also stock-outs at the CSD which compelled
Regional Hospitals to acquire items at their level for some Rs 32.9 million. There were
large disparities in prices charged for hospitals where the following were noted:

An excess amount of some Rs 2.7 million was paid for procurement of five items
through local purchases compared to the average price on the EIMS.

Hospitals had paid one medicine 17 times higher than the price paid by MoHW.

The price paid by one hospital for a particular medicine was more than nine times the
rate paid by another hospital.

Ministry’s Response

During that same period, the Principal Pharmacist submitted to the Ministry a nil stock
for some 75 items. The number of out-of-stock items is at date 44 items.

Management has given clear instruction to Hospitals to refrain from local purchase and
to undertake same only if stock level is nil. Officers are being queried if they process
file when stock is already nil where letters of explanation are being sought and

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disciplinary actions being taken accordingly. Though it is impossible to do away with
local purchase, the Ministry has taken corrective action to purchase stockout items
centrally by RFQ method for urgent supply.

Expired Items

During the period July 2022 to August 2023, 197 pharmaceutical items totalling some
Rs 54 million had expired at the CSD. Information regarding expired items at Hospitals,
Mediclinics, AHC and CHC were not available.

The expired items arose as there were significant differences between the Annual
Requirements and the actual usage of pharmaceutical products at hospital levels.

MoHW did not investigate cases of over-estimation of annual requirements, which may
result in expired items in future years.

Ministry’s Response

Drug estimation is not an exact science. We cannot altogether avoid drug being expired
even if we have the best monitoring mechanism in place.

Stock Levels not properly managed

Requirements of financial regulations were not taken into consideration by the Manager
Procurement and Supplies in setting the stock control levels and ensuring that these levels
were monitored to maintain economic balances.

As at October 2023, no stock re-order level was set for high-usage items. Requests for
replenishment of stock of medical products were made after the stock had already been
depleted at the CSD.

Ministry’s Response

The re-order level of essential medicines has been determined taking into account the
minimum stock level, re-order level, safety stock level and maximum stock level. However,
there has been considerable improvement with regards to stock monitoring as stocks of
items nearing depletion are physically checked prior to initiating replenishment exercise.
Action is now being taken much more before depletion of stock.

Non-Compliance with PPO Directive - Lead Time

PPO issued a Directive in year 2013, defining Procurement Lead Time (PLT) as the interval
between the preparation of bidding documents and the issue of award of contract, which
should not exceed 85 days for non-major contracts and 110 days for major ones.

Out of a sample of nine procurement lots from 40 launched in the financial year
2022-23, the Lead Time in the procurement process was assessed. In all cases, MoHW did
not comply with PPO Directives as the PLT was more than five months.

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It was also noted that the time taken from the preparation of bidding documents up to
delivery in stores ranged from 142 to 278 days.

Ministry’s Response

Non-compliance with PPO Directive on Lead Time in some projects is due to:

Delay in BEC constitution due to non-availability of members taken up in other


evaluations.

Resolving challenges from aggrieved bidders and determination of case before IPR.

Need to relaunch due to no quote received or high price deviation or specifications.

Additional time required for review of BEC reports.

Inaccurate Stock Balances on the EIMS

Procurement of pharmaceutical items by MoHW was based on erroneous available stock


balances generated by the EIMS. A survey carried out by NAO on 24 October 2023 at
CSD Plaine Lauzun revealed discrepancies between stocks in hand and the EIMS balances.
There were 80 Goods Issue Notes for September 2023 and issues for October 2023 which
had not yet been recorded in the EIMS.

Ministry’s Response

It has been reported in several EIMS meetings that with the acute shortage of staff at
Section A of CSD, it is not possible to keep an updated stock balance on the EIMS
despite that constant efforts are being done for same.

The recruitment of APSOs by MoFEPD is being awaited to address the acute shortage
of staff problem.

Root Causes

No corrective action has been taken by the Accounting Officer and the Manager
Procurement and Supplies regarding persistent poor procurement planning over the
years and EIMS not up-to-date.

The requirements of the Hospitals were not properly planned.

The Stock Control Levels were not set by the Pharmacy Unit of MoHW for inclusion
in the EIMS for an effective management of stock.

The launching of several tender exercises simultaneously by the Procurement Unit


caused bottlenecks and delays at different stages in the procurement process, prior to
shifting to the e-Procurement system.

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Recommendations

The Pharmacy Unit of MoHW should work out the Stock Control Levels for the high-
usage items and have them recorded in the EIMS.

MoHW should devise an appropriate timeline for the preparation of annual


requirements where a timeframe for each stage in the procurement process should be
agreed upon to ensure efficiency.

Actual usage, amongst others, should be taken as an important factor by health


institutions when compiling figures of Annual Requirements to minimise risk of
expired items.

Issues of drugs should be promptly posted in the EIMS.

20.8 Upgrading of Health Infrastructures - Leakages

Upgrading of health infrastructures includes works relating to leakages, extension of


existing services, painting and renovation in all five Health Regions. During the financial
year 2022-23, some Rs 64.9 million and Rs 6.9 million were spent on the upgrading of
hospitals and AHC/CHC, respectively.

Findings

20.8.1 Incomplete Project Database

The PIU did not have a complete database of upgrading works carried out for all building
infrastructures, as the information was kept in manual files fragmented across the regional
hospitals, office of the Chief Hospital Administrator and the PIU itself.

Thus, the cost-effectiveness of the cumulative upgrading works carried out at all the health
institutions could not be ascertained.

Root Cause

The officer responsible for the PIU has no mechanism in place to comprehensively detect,
monitor and address upgrading issues, especially leakages.

Recommendation

The PIU should maintain a central database of requests for upgrading works and monthly
reports be submitted to the Accounting Officer.

Ministry’s Response

The PIU comprises mainly a secretariat. Staffing has reduced while the number of
projects has increased. Records of upgrading works are kept in individual files and this
allows for proper follow-up.

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For projects undertaken by MNICD, the online application of MNICD “PROMIS” is
updated. The setting up of a Project Planning and Monitoring Unit for the proper
implementation of Health Infrastructural Projects is being pursued.

20.8.2 Leakage Issues at Health Institutions

Despite significant expenditure in upgrading works, leakage issues at health institutions


continued to persist, resulting in the disruption of health services to the public and damage
to equipment.

Two health institutions, namely the Floréal Mediclinic and the Accident and Emergency
Department of the SSRNH were characterised by persistent leakages. During rainy days,
these two health institutions were not able to deliver their services in a patient-centric
manner.

Floréal Mediclinic

The construction contract of the Floréal Mediclinic was awarded to a local contractor for a
contract value of Rs 78.5 million, inclusive of VAT and contingency sum of Rs 2 million.
The completion certificate was issued on 16 June 2020.

However, in the following month, the Contractor went into receivership and as at date of
audit in October 2023, had neither provided the Guarantee Certificate of the whole building
nor the decennial guarantee for the waterproofing works.

The Defects Liability Period ended on 24 February 2021, but both MoHW and MNICD did
not evaluate the cost of damages caused due to the unattended defects.

Since July 2020, MoHW had been unable to retrieve the guarantee certificates and address
the leakage problem. This adversely affected the services delivered at the Mediclinic during
rainy days and may result in damage to equipment.

Accident and Emergency Department at SSRNH

Leakages in various units of the Accident and Emergency Department at SSRNH were
highlighted since year 2016. The contract for repairs to the leakages was awarded on
9 September 2021 for a total amount of Rs 8.5 million, excluding VAT and inclusive of a
contingency sum of Rs 500,000. Works started on 22 March 2022 and ended on
10 August 2022.

In August 2023, MNICD informed MoHW that, “the waterproofing membrane was
damaged by the user department or any third-party who has been provided access to this
zone, causing the decennial guarantee of the waterproofing membrane to become null and
void. Thus, no proper maintenance was being done regarding the overhangs at hospital
level despite the same was requested by the MNICD.”

The leakage problems thereat continued to persist.

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Root Cause

The Hospital Administrator did not follow up the works carried out by the Contractor.

Recommendation

The Regional Health Services Administrator must ensure that all upgrading works are
properly supervised.

Ministry’s Response

Floréal Mediclinic

Advice of AGO was sought regarding the release of payment of retention money and claims
from the sub-contractor. A meeting was scheduled in November 2023 with MNICD and
the user department to address leakage problem and implement the advice of AGO.

Subsequently, the Civil Engineering Section of MNICD assessed the leakages as reported
at the Mediclinic under framework agreement and commitment of funds to the tune of
Rs 1,949,709 has been communicated accordingly to MNICD on 6 December 2023.

Accident and Emergency Department at SSRNH

A circular letter on waterproofing at hospital facilities was issued in September 2023 to


render all user departments accountable. During site meeting held with MNICD in
November 2023, the Hospital Administrator was requested to adhere to the circular letter.

20.9 MRI Examinations - Service Delivery affected by Unavailability/Breakdown


of Equipment and Non-Delivery of Consumables

Magnetic Resonance Imaging (MRI) is a type of scan that uses strong magnetic fields and
radio waves to produce detailed images of the inside of the body and produces clearer
images compared to a CT scan. MRI is used to diagnose a wide variety of diseases and
conditions.

On the other hand, contrast media are vital materials for several MRI examinations as they
help in improving the visibility of specific organs, blood vessels or tissues in diagnosing
medical conditions.

As at date of audit in August 2023, there were three MRI equipment (costing between
Rs 34.5 million and Rs 52.3 million) at VH, AGJH and SSRNH which catered for the whole
population. These were acquired in years 2009, 2012 and 2018, respectively.

Patients from BCH and JNH were channeled to other hospitals for MRI examinations,
although it was reported that in case of emergency, it is medically not advisable to transport
a patient for an MRI examination over long distance, even by SAMU.

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MINISTRY OF HEALTH AND WELLNESS
The need for well-maintained, prompt replacement of faulty parts of the MRI equipment,
as well as proper procurement procedures for the acquisition of consumables, amongst
others, are essential to ensure timely treatment of patients.

Findings

20.9.1 Unavailability/Breakdown of MRI Equipment and resort to services of Private


Health Institutions

Unavailability/Breakdown of MRI Equipment

Victoria Hospital

The MRI equipment at VH, whose life span ended in year 2021, catered for the highest
number of cases in Mauritius. It encountered various major breakdowns since year 2019
and patients have had to travel to the other two hospitals for examinations.

It was only on 11 April 2023 that tender for a new MRI equipment for VH was launched at
the level of the Ministry, with a closing date of 4 May 2023.

However, in August 2023, one bidder filed an appeal at the Independent Review Panel, and
the latter recommended a re-bid exercise on 4 October 2023. As at date of audit in October
2023, the equipment had still not been replaced as the reviewed technical specifications
have not been finalised.

Dr AG Jeetoo Hospital

The equipment was out of order since 11 July 2023. Quotation for the supply of spare parts
of Rs 5.9 million was submitted by a supplier on 17 July 2023 and a letter of award was
issued to the supplier on 14 August 2023. However, the equipment was reported to be
already operational at time of issue of letter of award.

The MRI was again reported to be out of order on 5 September 2023.

Sir Seewoosagur Ramgoolam National Hospital

The Uninterruptible Power Supply (UPS) connected to the MRI System was faulty since
16 March 2023. The UPS was bypassed and the equipment was connected directly to the
Central Electricity Board line.

The MRI equipment was therefore not protected from power cuts and voltage fluctuations,
thus putting at risk the MRI examination process, as evidenced below:

It was reported that on 16 March 2023, a patient had to be taken out of the scanning
room while the scanning was in process due to a power cut resulting in absence of
power supply in the MRI equipment.

On 12 July 2023, the MRI System could not boot up and was not operational due to a
software crash and it was decided that as from 13 July 2023, only emergency cases
would be undertaken.

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MINISTRY OF HEALTH AND WELLNESS
It was only on 2 August 2023 that repairs to the software and database were completed by
the maintenance contractor.

The absence of a power supply could impair the performance of the MRI equipment.
However, no decision has been taken to repair the faulty UPS or acquire a new one.

Ministry’s Response

Victoria Hospital

Updated technical specifications and cost estimates have been worked out and financial
clearance has been obtained. Bidding document is being prepared for launching of tender.

Dr AG Jeetoo Hospital

For the breakdown dated 11 July 2023, MRI repairs were completed on 21 July 2023. The
quotation for the required spare parts was approved on a top priority basis before 21 July
2023 at the Ministry. The supplier was thereafter given covering approval to effect repair
works. Repair of MRI machines was effected on an emergency basis in order to prevent
daily loss in liquid helium. Following administrative procedures, covering approval was
obtained and letter of award was issued on 14 August 2023.

The battery that monitors magnet parameters needed to be replaced following indicator
alarms.

Sir Seewoosagur Ramgoolam National Hospital

The faulty modules and software upgrade for the UPS supplying power to MRI were
completed and the supplier had transferred the MRI load to the UPS through changeover
on 11 October 2023.

Resort to Services of Private Health Institutions

As all the MRI equipment were out of order, MoHW resorted to the MRI services of Private
Heatlh Institutions (PHIs). In July 2023, MoHW invited quotations for emergency
examinations from twelve PHIs which had to reply on the same day by 3.00 pm. Seven
PHIs responded to the request for bids.

MoHW did not work out an average estimated cost based on the actual cost at the three
hospitals. The reasonableness of the rates submitted by PHIs could therefore not be
ascertained.

Evidence regarding the time the bids were received at MoHW and the setting up of a
team to evaluate the bids received were not seen.

According to the Expression of Interest launched on 19 July 2023, only emergency


cases would be referred to private clinics. However, on 21 July 2023, the Accounting
Officer approved that two clinics be selected for routine MRI cases also.

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MINISTRY OF HEALTH AND WELLNESS
According to information received from the Radiology Department, 359 MRI cases
were referred to PHIs during the period 24 July to 18 August 2023. This is not in
accordance with another list provided by the Records Section where 329 patients
underwent MRI tests.

Thus, total cost of the examinations carried out by the PHIs was not known.

Root Cause

No plan was seen to have been prepared by MoHW regarding the replacement of MRI
equipment. MoHW did not have an asset management policy that focussed on critical assets
replacement.

Recommendations

MoHW should work out a plan for the replacement of critical equipment to avoid
diagnostic delays and inconvenience to patients.

Given that there are only three MRI equipment in the island for the whole population,
their timely replacement is of utmost importance to avoid lengthy waiting time and
inconvenience to patients.

Ministry’s Response

In view of the increasing number of patients awaiting MRI examinations and the
breakdown of the MRI equipment, MoHW decided to refer all cases on the waiting list
to PHIs.

The reasonableness of bids was ascertained through a comparative analysis of bids


received. As per the practice, the lowest bidder/s were selected for referral cases and
the recommendations of the Director Health Services and the Director General Health
Services were sought accordingly.

Given the importance of medical imaging in achieving a proper diagnosis and


subsequently the administration of an appropriate treatment, it was vital to ensure that
patients had their MRI done as quickly as possible.

For the period 24 July to 31 August 2023, 495 cases were referred to PHIs. Patients
were referred for MRI up to 30 September 2023 when the waiting list of MRI patients
was cleared.

20.9.2 Non-Delivery of Consumables

Contrast Media were not acquired at the Ministry’s level during the period July 2021 to
June 2023. To palliate the urgent need, the hospitals were therefore required, in May 2023,
to procure them at their level.

The prices paid by the hospitals during the period May to June 2023 ranged from Rs 1,200
to Rs 2,250 per vial, that is more than twice the unit cost of Rs 550, estimated in the Annual
Requirement 2023-24.

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MINISTRY OF HEALTH AND WELLNESS
A restricted bidding exercise for the procurement of the Contrast Media was carried out on
1 March 2023, after expiry of the old stock. No quotes were received. The two suppliers
from which the hospitals were buying the item were not seen to have been included in this
exercise.

Root Cause

The Procurement Unit did not have an updated list of suppliers for Contrast Media and
timely decision for the procurement was not seen taken by MoHW.

Recommendation

The Secretary, Tendering Unit should update its list of suppliers regarding procurement of
contrast media.

Ministry’s Response

Three procurement exercises for Contrast Media were floated. Three out of nine
bidders quoted for the item but the offers were not responsive.

At the time of the restricted bidding exercise in March 2023, the two suppliers were
not part of the existing database of suppliers. As a corrective measure, the two
suppliers have been included in the list of suppliers at the Headquarters and the
database is updated on a regular basis.

20.9.3 Absence of Control over Administration of Contrast Media on Patients

Contrast Media were purchased in vials of 20 ml but not all patients use one whole vial.
Records of patients on whom they were used and the quantities used were not available.
Therefore, NAO could not ascertain whether the contrast media were being used in an
economic and efficient manner.

Root Cause

No instructions were issued to keep a register where issues of Contrast Media for patients
would be recorded.

Recommendations

Procurement of consumables should be properly planned so as not to hamper service


delivery at the hospital level.

Issues of Contrast Media should be properly recorded at the hospital level to ensure
proper monitoring over usage.

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MINISTRY OF HEALTH AND WELLNESS
Ministry’s Response

The Acting Chief Medical Imaging Technologist has informed that an average of 10 ml of
Contrast of Gadolinium is used per patient and the remaining are used for patients on the
same day. At the end of the day the remaining Contrast Media are discarded as per
instructions in the brochure provided by the supplier.

20.10 Laboratory Information Management Systems Project

The Government of Mauritius sought the assistance of UNDP during the COVID-19
outbreak for the implementation of a laboratory system to monitor the health situation of
travel passengers who were quarantined and to provide real-time information of their
COVID status for decision-making.

A Project Agreement was signed between MoHW and UNDP, for US$ 1.8 million, amongst
which the Laboratory Information Management Systems Project (LIMS) amounted to some
US$ 1.1 million. The Government of Mauritius initially contributed some
US$ 900,000 and funding from the Government of Japan amounted to some
US$ 905,143. In July 2021, MoHW disbursed an additional amount of US$ 290,000 to
UNDP to implement enhancements to the LIMS project.

Objectives of the National Laboratory Information Management Systems

Government, thereafter decided that the COVID-19 LIMS project was to be rolled out in
all departments of the Central Health Laboratory (CHL) and in 12 hospital laboratories of
MoHW. The objectives of the National Laboratory Information Management Systems
(NLIMS) project were to:

Return laboratory results with a quicker turnaround time;

Improve data flow and linkage of records when orders and results move between sites;
and

Increase accessibility of data for decision-making.

Project Implementation

The NLIMS project started in year 2021 and was due for completion by March 2022. UNDP
undertook the technical assistance of a foreign University for the implementation of the
project.

In August 2021, UNDP signed a one-year contract, effective from 25 October 2021, with a
local Consultant to provide consulting services for Managed Services for the LIMS project
for a sum of US$ 168,000. The contract was extended to August 2023 and hence involved
additional payments of US$ 84,000.

In September 2023, MoHW then appointed another Consultant for a contract sum of
Rs 11.6 million for a duration of one year.

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Payments effected to UNDP

Between August 2020 and June 2022, MoHW disbursed US$ 1,190,000 to UNDP,
excluding payment to a local Consultant, for implementation of the Project.

Findings

As of February 2024, Software Development works were still ongoing at CHL. Only
two modules, namely Molecular Biology and Virology, were operational at CHL and
six other modules were in the testing phase, namely Bio-Chemistry, Cytology,
Haematology, Microbiology, Immunology and Surgical Pathology. The NLIMS
project was not yet rolled out to the 12 Hospitals after almost two years.

The Ministry received 12 servers for the LIMS project in the year 2021 and these were
commissioned in August 2023. These servers had still not been put to use in the
Regional Hospitals, two years later.

NAO was not availed of any Expenditure Report for each component, though MoHW
had already disbursed US$ 1,190,000 to UNDP.

Root Cause

MoHW did not properly manage the Project, and there are delays by the foreign
Supplier.

Ministry’s Response

Various reasons cropped up for the delays in implementation namely, no proper


documentation of workflow processes at the Central Health Laboratory and Interfacing
issues with Third Party suppliers of Laboratory Equipment (analyzers).

Due to lack of staff, reagents and laboratory equipment, the decentralisation was not
initiated.

Although the development of Version 3.0 of the OpenELIS, has been completed, the
solution has not yet been deployed for all laboratory tests and across all Regional
Hospitals and the CHL.

For deployment of servers, the Ministry would require ICT infrastructure readiness at
all sites. Local Area Network (LAN) is being implemented region-wise in all Public
Health Facilities for the National E-Health Project and other digitalisation initiatives
at this Ministry, including for the LIMS project.

Dependency on third party suppliers of analyzers to provide the right configuration


documentation for interfacing with OpenELIS which necessitated the development of
the lightweight version of OpenELIS for quicker changes.

Payments to the Supplier were deliverable-based. Funds were disbursed by the UNDP
only when progress was made on delivering the solution.

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MINISTRY OF HEALTH AND WELLNESS
NAO Comments

UNDP and the Accounting Officer of the Ministry should put in place the necessary
mechanism for the foreign Supplier to finalise the LIMS project, within an agreed time
frame.

Alternate use of the set of 12 servers should be considered.

Governance Issues

20.11 Risk Management Framework

In December 2021, MoFEPD issued a circular for the establishment of a Risk Management
(RM) Framework in each Ministry. A guideline was developed by MoFEPD to facilitate
the establishment of a RM Framework. A dedicated team has been set up by the Director,
Internal Control to provide support to Ministries/Departments.

Finding

In July 2023, a Risk Management Committee was set up at MoHW to identify the risk
areas. However, no meetings were held and the RMF was not prepared as at date of audit.

Root Cause

The Accounting Officer did not comply with the financial circular.

Recommendation

The Accounting Officer should seek the assistance of the Director, Internal Control for the
setting up of RM Framework.

Ministry’s Response

A meeting was held under the chair of the Accounting Officer on 22 November 2023. The
Director, Internal Control advised on how it should be implemented at the level of the
Ministry.

20.12 Audit Committee

Audit Committee (AC) is an essential part of the accountability process of Government.


The main objective of the AC is to support the Supervising Officer in maintaining sound
control systems and promoting good governance.

Findings

During the financial year 2022-23, seven Audit Committee and two Sub Committee
meetings were held. However, the notes of meeting were not signed by the Secretary
and Chairperson. Also, the notes of meeting dated 22 February 2023 were not available
in MoHW’s file.

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MINISTRY OF HEALTH AND WELLNESS
Except for the meeting held on 18 January 2023, the notes of meeting were not
circulated, read and approved in the next meeting.

Non-compliances with the signed performance contract was noted in the following
instances:

(i) The Status Report for Quarter one, ending September 2022, was not submitted to
the Accounting Officers of the MoHW and the Office of Public Sector Governance
(OPSG).

(ii) The Action Plan for financial year 2022-23 was submitted on 9 December 2022 to
OPSG, that is, with a delay of more than five months.

Root Cause

The Chairperson of the Accounting Officer should ensure that the Committee operates
according to the AC Charter.

Recommendation

The Accounting Officer should ensure that the AC operates effectively as it provides an
independent source of assurance and advice to those responsible for governance on key
aspects of the MoHW operations.

Ministry’s Response

The Accounting Officer emphasised in a Monitoring Meeting held on 6 October 2023 on


the importance of all members following up on issues in the Audit Committee Action Plan
to ensure that appropriate remedial actions are taken and also to meet the deadline for
submitting the Progress Report to OPSG. Appropriate action has also been taken to ensure
that required procedures are followed for reading, approval and circulation of Notes of
Meeting and circulation of Progress Report.

20.13 Internal Control

As per the Internal Audit Plan, 14 areas were planned for audit during the financial year
2022-23. As at 30 June 2023, seven areas were completed, in addition to the seven
unplanned audit assignments. Five areas were still in progress as of 30 June 2023, while
one was rolled over to the financial year 2023-24. In one area, the assistance from the Board
of Survey was requested on and was still being awaited.

Findings

The acquisition of non-financial assets as per the Estimates of the Ministry, amounted
to Rs 2.5 billion. However, capital projects were not included in the audit plan.

No evidence was seen that a risk profile was worked out by the MoHW.

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Root Cause

The Accounting Officer did not seek the support of the Internal Control Cadre for the
establishment of a RM Framework.

Recommendation

The Accounting Officer should set up a RM Framework.

Ministry’s Response

The following decisions were taken in the RM Framework meeting held on 22 November
2023:

The Ministry could have recourse to a consultant who can properly guide on the
identification of the risk categories, high risk areas, the areas to prioritise and the
control measures. Guidance of the Internal Control Team would also be sought;

Brainstorming session to be held at the level of Regional Hospitals;

Awareness sessions to be conducted by Internal Control Team.

20.14 Government Asset Register

In July 2017, the Accountant-General (AG) issued a Treasury Circular with regard to the
introduction of a Government Asset Register (GAR). This was a key milestone towards the
creation of a central database of assets owned by the Government for their efficient and
effective management.

Findings

MoHW did not properly fill the GAR.

According to the Treasury Circular, Supervising Officers were requested to draw a


proper plan for the recording of assets in GAR to be completed at the earliest possible
regarding, for example, land acquisitions up to 30 June 2017 and procurement of
medical equipment as from 30 June 2007. No such plan for the recording of assets was
seen at MoHW.

Acquisitions of medical equipment and capital projects undertaken during the financial
year 2022-23, totalling Rs 240.4 million and Rs 1.67 billion respectively, were not
included in the GAR.

Status of all the details of the assets acquired during the financial year 2022-23
remained ‘On Hold’ in the GAR until verification is done by the GAR section at the
AG, based on an Asset Book Reconciliation Form to be submitted by MoHW.

However, as at date of audit, the Form was not submitted by MoHW, resulting in the
assets not being posted in the GAR.

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MINISTRY OF HEALTH AND WELLNESS
Root Cause

The roles and responsibilities of the officers of the Finance Section and Office Management
Executives, regarding the recording of assets in GAR were not clearly defined.

Recommendation

The Accounting Officer has to clearly define the roles and responsibilities at the level of
MoHW.

Ministry’s Response

Following a meeting held on 24 January 2023 with RHDs and RHSAs of all 5 Regional
Hospitals’, responsibilities for GAR updating were shared among the administrative cadre.
The responsibility of updating GAR for Land rest under MHLUP.

A list of officers from Headquarters and Regional Hospitals was sent to the Civil Service
College which will provide training on GAR as from February 2024.

20.15 Key Performance Indicators and Outcome Indicators

Findings

Mortality Rate due to Non-Communicable Diseases (NCDs)

In the last two financial years, MoHW has not achieved its target on ‘Mortality rate due to
NCDs per 100,000 of less than 550 and 600 for 30 June 2022 and 30 June 2023 respectively.
The mortality rate of 620 per 100,000 in the financial year 2022-23 exceeded the targeted
mortality rate of less than 600 per 100,000.

Ministry’s Response

The increase is mostly associated with an ageing population coupled with high prevalence
of NCDs and their risk factors. The COVID-19 pandemic has also contributed to the
increase. A decrease is expected in 2023.

Infant Mortality Rate (IMR) per 1,000 live births

The IMR set for financial year 2022-23 was 12.5. However, the actual IMR was 15.0 as of
June 2023.

Ministry’s Response

The following factors have contributed, to a certain extent, to the increase in child mortality:

A decrease in the percentage of first attendance for antenatal care of women with a
gestational age of 3 months or less;

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Increase in births among women aged 35 years and above;

An increasing trend in the percentage of new births with Low Birth Weight.

Measures taken recently include investigation in neonatal deaths in hospital, review of the
Maternal and Child Health Handbook and improvement in level of care provided to mothers
and children through presence of obstetricians, pediatricians and anesthesiologists in
regional hospitals.

Reduce Prevalence of NCDs

The Mauritius Food Standards Agency (MFSA) was due to be operational by March 2023.
The Act was gazetted on 31 October 2022. Six Board meetings were held as of October
2023. Mission, vision, and logo, among others were being worked out. An amount of
Rs 120,000 was paid to the Officer-in-Charge, appointed since 18 April 2023, by MoHW.
However, the MFSA had not yet fulfilled its responsibilities as provided in the MFSA Act.

Ministry’s Response

The Food Act and the Mauritius Food Standards Agency Act are yet to be proclaimed.
It is envisaged to proclaim the MFSA Act after proclamation of the Food Act.

In line with Section (4) of the MFSA Act, the following regulations were developed:

Food Regulations;

Regulations on front of pack nutrition labelling;

Regulations on halal and vegetarian food.

MFSA is currently headed by an Officer-in-Charge who is assisted by four


Service-to-Mauritius interns.

Improve Neonatal Services

At the end of the financial year 2021-22, 45 neonatal Intensive Care Unit ventilators were
available and MoHW targeted to increase it to 55. However, as at end of financial year
2022-23, the procurement exercise to acquire additional neonatal ventilators was not done.
Ministry’s Response

The targeted figure is only an indicative one. No request has been made to procure
additional ventilators. Should the need arise, the Ministry would make necessary
arrangements to procure additional ventilators.

Number of New Mediclinics/Area Health Centres/Community Health Centres


constructed

One Mediclinic was constructed at Coromandel and three Community Health Centres were
built at Grand Bay, Pointe aux Sables and Trou d'Eau Douce. MoHW has not been able to

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MINISTRY OF HEALTH AND WELLNESS
meet its target of constructing 14 Mediclinics/AHCs/CHCs during the last two financial
years.

Work was still in progress at four Mediclinics, namely Stanley (72 per cent), Bel Air (88
per cent), Quartier Militaire (82 per cent) and Grand Bois (32 per cent) and two CHCs at
St Francois Xavier (76 per cent) and Camp de Masque (40 per cent).

Ministry’s Response

Generally, delays form part of construction projects for various reasons. Projects were
normally delayed due to COVID-19 and related issues, weather conditions, among others.
To cater for delays, contractual provisions exist in terms of Extension of Time and
Liquidated Damages.

The Mediclinics at Stanley, Bel Air and Grand Bois and CHCs at St. François Xavier and
Camp De Masque would be made operational during financial year 2023-24.

Percentage of Common Laboratory Results available within 24 hours

The percentage of Common Laboratory Results available within 24 hours decreased from
90 in financial year 2021-22 to 85 in financial year 2022-23. The target of 90 per cent was
not achieved in financial year 2022-23. MoHW should define ‘Common Laboratory
Results’, that is which results should be available within 24 hours to better measure the
KPI.

Ministry’s Response

The number and range of tests in the laboratory has steadily increased over the years with
some 350 different types of tests. Besides diagnostic tests, Central Health Laboratory also
provides support to various national health programmes and surveys. There is also an acute
shortage of staff as the number of funded posts has decreased from 230 in financial year
2021-22 to 219 in financial year 2022-23. Out of the 219 funded posts, only 207 are
physically in post. Increase in workload and shortage of staff is affecting turnaround time
of laboratory results.

E-Health Patient Administration System developed

Several ‘Enablers’ were identified in the Strategic Overview to achieve efficiency through
digitally enabled health care delivery. However, the implementation of the E-Health
Patient Administration System was rescheduled from May 2023 to June 2024. The Bid
Evaluation Report was submitted to United Nations Development Programme Advisory
Committee on Procurement in July 2023. Recommendation of the Committee is awaited
for procurement.

Ministry’s Response

The award for the implementation of Phase 1 of E-Health has been made by the United
Nations Development Programme in November 2023 and the contract has been signed in
January 2024. The implementation of the project has started on 17 January 2024 with an
expected duration of 18 months.

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MINISTRY OF HEALTH AND WELLNESS
Root Causes

Poor planning of projects.

KPI not developed on a realistic/pragmatic basis taking into account resource


constraints.

Proper follow-up or monitoring of KPI not done.

Recommendation

The Accounting Officer should put up an appropriate mechanism for setting up of KPI and
monitoring of same and taking corrective actions as appropriate.

20.16 Governance Issues – Non-compliance with Legislation

Provisions have been made in various legislations to impose a statutory responsibility on


Accounting Officers and Boards of Special Funds with the objective of strengthening
accountability and transparency in the public sector.

Findings

Non-Submission of Financial Statements for Audit

As of 14 December 2023, Financial Statements for the Morris Legacy Fund, falling under
the purview of the MoHW had not yet been submitted for audit for financial years 2021-22
and 2022-23.

NAO is of the view that the MoHW should exercise control over funds operating under its
aegis to ensure that they fulfil their statutory responsibilities regarding the preparation of
financial statements and their submission for audit.

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20.17 Follow-up of Matters Raised in the Audit Report 2021-22

A follow up of matters raised in the Audit Report for the financial year 2021-22 was carried
out. MOHW was requested to inform the National Audit Office of the actions that have
been taken to address the findings and recommendations in the Report. The information
along with evidence collected through review of files and documents were assessed and
discussed with the Ministry.

The status on actions taken on findings since the publication of the Audit Report are
summarised below. Out of 16 findings, 11 (69 per cent) have been resolved, three
(19 per cent) have been partially resolved and two (12 per cent) have not been resolved.

Management’s Response – NAO


SN Findings
Status as at January 2024 Comments
Provision of Security and Cleaning Services to Hospitals and Health
Institutions (Page 295)
1 Contract for cleaning services New contract for cleaning services
renewed on a month-to-month awarded on 12 July 2023.
basis despite the poor
Resolved
performance of the service
provider.
(Pg 295, Para 20.1)
2 Penalty clauses not applied for The Ministry has disqualified the
non-compliance with scope of Company for a period of six months.
service. Penalty clauses applied by all
Resolved
(Pg 296, Para 20.1) hospitals include deductions made for
attendance/punctuality.
3 Lack of proper monitoring Monitoring of contract management
measures over quality of security was being carried out at Regional Resolved
and cleaning services provided. Level.
(Pg 297, Para 20.1)
Opththalmology Services-Long Waiting lists for Eye-Surgeries (Page 299)

4 Waiting time of more than five Personal data given by patients was
years before getting an not correct. The exercise of call back Partially
appointment for eye surgeries. through phone was on-going. Patients
Resolved
(Pg 299, Para 20.2) were contacted by phone or letter but
they did not revert back.
5 Surgeries cancelled due to Consumables such as vitrectomy were
unavailability of medical items at received and surgeries were ongoing.
Subramania Bharati Eye
Resolved
Hospital (SBEH).
(Pg 300, Para 20.2)
6 Extra sessions for cataract Patients on the waiting list are being
operations not yet started as of 30 operated at SBEH and NSH. Resolved
October 2022 at SBEH.
(Pg 300, Para 20.2)

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Management’s Response – NAO
SN Findings
Status as at January 2024 Comments
Laser Photocoagulator Machines not optimally used (Page 301)
7 Service delivery hampered due to No reported major breakdown in
frequent breakdowns of Dr A.G.Jeetoo since scanner board
machines. was replaced by Manufacturer. Resolved
(Pg 302, Para 20.3)
8 Five machines at hospitals Laser sessions at Dr A.G. Jeetoo
/mediclinics not optimally used. Hospital are being performed on Not
Machine at SBEH overused. Fridays on a fortnightly basis and an
Resolved
(Pg 303, Para 20.3) average of 25 laser sessions are
performed daily except on Saturdays
at Subramania Bharati Eye Hospital.
9 No improvement to waiting time Waiting time for laser coagulation
for getting an appointment for treatment is max. three months. The
laser therapy despite acquisition laser coagulation machine at NSH
Partially
of seven additional laser catering the whole south region was
machines. out of order from Nov 2022 to Apr Resolved
(Pg 303, Para 20.3) 2023.The patients were called at
SBEH till May 2023 for special laser
sessions.

10 Non-compliance with conditions Monitoring of conditions of


in the bidding documents and maintenance agreement is done by
Maintenance Agreement, i.e. user department. Resolved
calibration and maintenance.
(Pg 304, Para 20.3)
Electronic Inventory Management System at the Ministry (Page 304)
11 System of managing stock based A steering Committee was set up to
on an unsecured web information look into issues hampering the
system. Risk of modification, implementation of E-IMS.
loss and leakage of sensitive Resolved
information.
(Pg 305, Para 20.4)
12 Lack of embedded control in There is segregation of duties and a
recording of transactions in log to capture all transactions to
EIMS. determine accountability. Resolved
(Pg 306, Para 20.4)
13 Inaccurate stock balances. Any discrepancies in stock balances
Pg 307, Para 20.4) can be adjusted through journal
entries after physical count. As at 17 Resolved
February 2023 the physical stock
balances tallied with EIMS balances
at CSD.
14 Non-submission of returns or Returns of Inventories as at June 2023
incomplete returns of Drugs, already submitted to Manager, Resolved
Consumables and other items of Financial Operations.
the MOHW resulting in

413
MINISTRY OF HEALTH AND WELLNESS
Management’s Response – NAO
SN Findings
Status as at January 2024 Comments
understatement of Inventories in
the Statement Financial Position
of the Government.
(Pg 309, Para 20.4)
Land Infrastructure Assets (Page 310)
15 No updated and consolidated Following verification by Regional
database of lands. Hospitals, 65 plots were reported in
Land vested in MOHW not use, five plots were reported not in use
optimally used, e.g. land set and 33 plots had their usage not
apart for Leper Hospital still identifiable. For the 65 plots in use,
undeveloped, no survey of on 27 November 2023, MHLUP was
unused lands carried out by requested, to update the Government
MOHW, non-materialisation Asset Registry System and to provide Partially
of projects by MOHW the location plan and pin number for
Resolved
despite 37,400 m² of land record purposes. MHLUP was also
vested in the Ministry. requested to conduct a joint survey
with the respective Regional Hospital
Illegal occupation by
Services Administrators and provide
squatters.
correspondences for the vesting of the
(Pg 310, Para 20.5) remaining 38 plots which are not in
use or not identifiable prior to a policy
decision to divest same from this
Ministry be taken.
16 Inordinate delays in project CHC Grand Bay: Operational
completion: since April 2023;
CHC Grand Bay: not yet CHC Roche Bois: Contract
occupied as at Nov 2022; terminated. Revised cost
CHC Roche Bois: not yet estimates, draft bidding
completed; documents and tender drawings, Not
CHC St. Francois: not yet submitted by Consultant on
Resolved
completed. 20 December 2023. Financial
clearance being sought prior to
(Pg 313, Para 20.6) meeting of Building Plans
Committee.
CHC St. François: Progress of
work as at 3rd January 2024 was
99 per cent.

414
MINISTRY OF HEALTH AND WELLNESS
21 – MINISTRY OF BLUE ECONOMY, MARINE
RESOURCES, FISHERIES AND SHIPPING
21.1 Unsuccessful Implementation of Off-lagoon Fishing Scheme

The Ministry of Blue Economy, Marine Resources, Fisheries and Shipping (MBEMRFS)
is implementing the “Canotte” and the “Purchase of Semi-industrial Fishing Boat”
Schemes to provide financial support to fishers in order to promote off-lagoon fishing.

I. ‘Canotte’ Scheme

The ‘Canotte’ Scheme was introduced in the financial year 2014-15. During financial year
2022-23, a registered fisher was eligible for a grant representing 50 per cent of the cost of
a canotte up to a maximum of Rs 200,000. An amount of Rs 4 million was earmarked for
the acquisition of canottes by registered fishers in the financial year 2022-23.

As of December 2022, some 2,700 fishers were registered with MBEMRFS and
129 fishers benefitted from the Scheme as of 30 June 2023.

Findings

On 10 June 2022, MBEMRFS was instructed by MoFEPD to seek funds from the
National Resilience Fund (NRF) prior to utilising funds from the Ministry’s Vote. During
the financial year 2022-23, some Rs 2.6 million were disbursed under NRF in respect of
Phase 8 of the Scheme.

Thus, the Rs 4 million earmarked for the acquisition of canottes for the financial year
2022-23 had lapsed.

The number of canottes acquired by fishers for the past three years was far below the
target as shown in Table 21-1.

Table 21-1 Target and Actual Number of Canottes acquired by Fishers

Financial Target Actual % Target


Year Achieved
2020-21 20 15 75
2021-22 150 18 12
2022-23 150 13 9

Source: Ministry Votes and Planning Unit

MBEMRFS did not have a relevant database regarding:

the number of fishers who are in need of and are interested in acquiring a canotte
under the Scheme out of the 2,700 registered ones; and

the number of applications received.

415
Root Cause

The reason for the low uptake of the Scheme by the fishers was not assessed by
MBEMRFS as necessary data to determine the viability of the Scheme from the fishers’
perspective were unavailable.

Recommendation

The Accounting Officer of MBEMRFS should evaluate the effectiveness of the Scheme
and take appropriate corrective measures.

Ministry’s Response

The Scheme has been revamped and the grant has been increased from Rs 200,000
to Rs 300,000 per beneficiary.

Expression of Interest (EOI) was launched on 16 August 2023, following which,


MBEMRFS has received 29 applications as at 15 September 2023 and evaluated by
a Selection Committee. The list has been sent to the Development Bank of Mauritius
(DBM) Ltd for further evaluation.

II. ‘Purchase of Semi-industrial Fishing Boat’ Scheme

The Scheme was introduced in the financial year 2017-18. Financial grant of 50 per cent
up to a maximum of Rs 4 million is available to registered Fishermen Cooperative Societies
to enable them to acquire semi-industrial vessels for off-lagoon and bank fishing.
MBEMRFS had entrusted a commercial bank as an implementing partner for the Scheme.

As of June 2023, there were 43 fishermen Cooperative Societies and as of September 2023,
five fishermen Cooperative Societies have benefitted from the Scheme.

Findings

During the financial years 2017-18 to 2022-23, only Rs 19.8 million were disbursed out of
the Rs 84 million earmarked for the Scheme.

The invitation for expression of interest (EOI) carried out in the year 2019 was
unsuccessful. On 12 December 2022, after some three years, MBEMRFS launched a new
EOI inviting the fishermen Cooperative Societies to submit applications. The three
applications received were rejected as they were not technically responsive. As a result,
the Rs 12 million earmarked for the financial year 2022-23 had lapsed.

Out of the five Fishermen Cooperative Societies that benefitted from the Scheme since
financial year 2017-18, only three of them had their vessels delivered as at 30 June 2023.

In December 2021, MBEMRFS informed NAO that several issues that had cropped up with
the Scheme will be addressed prior to launching fresh EOI. These issues were, amongst
others:

(i) foreign boat builders;

416
MINISTRY OF BLUE ECONOMY, MARINE RESOURCES, FISHERIES AND SHIPPING
(ii) stakeholders not having the required knowledge to successfully implement the project;

(iii) terms and conditions in the letter of intent;

(iv) Memorandum of Understanding (MOU) not a legally binding document; and

(v) MBEMRFS working on agreements with a commercial bank, and with the
beneficiaries, respectively.

Ministry’s Response

The Scheme has already been reviewed and the agreement with a financial
institution is being finalised for signature.

Following the review of the Scheme, EOI have been launched in September 2023. Six
applications have been received from individuals for a grant of one million rupees, and
14 Cooperative Societies for a grant of six million rupees. The evaluation exercise is
still ongoing.

Recommendation

Given that the Scheme has now been reviewed and new applications have been received,
MBEMRFS should, nonetheless, continuously evaluate the effectiveness of the revised
Scheme and make necessary adjustment as and when required.

21.2 Mauritius Maritime Training Academy - Insufficient Training delivered

The Mauritius Maritime Training Academy (MMTA) was set up in the year 2007. MMTA
develops training programs to generate personnel trained in accordance with the Standards
of Training, Certification and Watchkeeping (STCW) Convention 1978, as amended.

Courses are being offered by MMTA throughout the year or depending on demand and
availability of candidates. For the past years, the actual expenditure incurred by MMTA
and the number of trainees are shown in Table 21-2.

Table 21-2 Actual Expenditure and Number of Trainees

Financial Year Expenditure Number of


Rs Trainees
2022-2023 10,490,989 381
2021-2022 11,426,316 300
2020-2021 11,643,298 179

Source: TAS and MMTA Records

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MINISTRY OF BLUE ECONOMY, MARINE RESOURCES, FISHERIES AND SHIPPING
Findings

Inadequate Technical Staff for Training

As shown in Table 21-3, the following posts were vacant for a long period of time and have
been categorised as scarcity areas.

Table 21-3 Vacant Posts

Post Vacant Number


Since of Years
Instructor, Mechanical December 2001 22
Workshop
Marine Training Officer June 2002 21
Head, Engineering Department April 2012 11
Head, Deck Department October 2019 4

Source: MMTA Records

Disruption in Training due to Non-availability of Lifeboat since Year 2017

Proficiency in Survival Craft and Rescue Boats (PSCRB) is one of the training
requirements under the STCW Convention and it requires MMTA to be equipped with a
lifeboat. Since June 2017, the PSCRB course was suspended by MMTA as a lifeboat was
not available.

The lifeboat which was acquired in year 2011 by the then Ministry of Public Infrastructure,
National Development Unit, Land Transport & Shipping for Rs 5.2 million suffered major
damages due to vandalism and lack of maintenance.

On 27 September 2020, two lifeboats were donated to MBEMRFS. One of the lifeboats
was to be used by MMTA for practical training. In this regard, a davit, which is a
crane-like device, was required. The contract for the supply, installation, testing and
commissioning of the davit was awarded on 16 November 2022 at a cost of Rs 3.4 million.
The davit that arrived in Mauritius in June 2023 was not yet installed on the lifeboat as of
September 2023.

Training provided by Private Company

Even though MMTA has a modern building, it lacks appropriate human resources and
equipment to impart training. MBEMRFS approved that a private Maritime Training
Institution (MTI) conduct STCW courses.

Out of the 2,097 trainees for the last three years, 41 per cent were trained by MMTA and
59 per cent by the private MTI.

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MINISTRY OF BLUE ECONOMY, MARINE RESOURCES, FISHERIES AND SHIPPING
No follow-up on the Memorandum of Understanding (MOU) with the Indian
Maritime University

One of the aims and objectives of MMTA is to serve as a centre for fostering co-operation,
partnership and exchange of ideas between various maritime institutes, academies or
centres within the Indian Ocean Region. A MOU was signed between MBEMRFS and the
Indian Maritime University (IMU) in May 2021. The duration of the MOU is five years
and its purpose is to facilitate long-term and sustainable partnership in the areas of research
and the maritime sector, including training and capacity building.

In September 2023, more than two years after the signature of the MOU, no follow-up
action was initiated by MBEMRFS. The file was dormant since May 2022. As a result,
there was no progress in the facilitation of research, training and capacity building in the
maritime sector between MMTA and IMU.

Non-Achievement of Key Performance Indicators

MMTA did not achieve its targeted number of trainees during the past three financial years
as per Table 21-4.

Table 21-4 Target and Actual Number of Trainees

Financial Target No. of Actual No. of Actual No. of %


Year Trainees Applications Trainees Achieved
received
2022-2023 500 468 381 76
2021-2022 1,000 475 300 30
2020-2021 1,200 246 179 15

Source: MMTA Records

Root Cause

MMTA lacks qualified personnel and necessary training equipment to deliver training.

Recommendations

The Accounting Officer should:

take necessary actions to provide MMTA with adequate resources; and

ensure proper follow up of MOU signed in order for MMTA to benefit from the
assistance of other maritime institutes in areas where it needs resources to operate
effectively.

Ministry’s Response

MMTA is taking necessary measures to attend to the above. It is proposed to sign


an MOU with Polytechnics Mauritius Ltd for the running of the Centre and training
in the Maritime Sector.

419
MINISTRY OF BLUE ECONOMY, MARINE RESOURCES, FISHERIES AND SHIPPING
Arrangements are being made, through diplomatic channels for the recruitment of
resource persons in the scarcity areas.

MBEMRFS is also envisaging for collaboration with other countries for capacity
building and training of human resources in the Maritime Sector.

21.3 Inadequate Management of Barachois

MBEMRFS aims at increasing local fish production and export of fish by encouraging
production of fresh water fish through aquaculture activities in barachois. Government
owned 19 barachois, out of which seven were vested in MBEMRFS. The remaining
12 barachois were under the control of the Ministry of Housing and Land Use Planning
(MHLUP).

Findings

Barachois Policy not yet finalised

As of October 2023, no significant progress was noted in respect of the finalisation of the
Barachois Policy that was initiated in year 2020.

The Attorney - General’s Office (AGO), in August 2023, advised that necessary
amendments be made to the State Debt Recovery Act, State Lands Act and Pas
Géometriques Act, prior to the adoption of the Barachois Policy.

Action was not yet initiated by MBEMRFS to proceed with the amendments as
recommended by AGO.

Vested Barachois not Active in Aquaculture Activities

The seven barachois vested in MBEMRFS, are of a total extent of 130.03 hectares, only
two totalling 60.02 hectares, are active with aquaculture and/or fish farming activities. The
status of the other vested barachois are as follows:

The case of one barachois of 13.99 hectares is before the Environment Appeal
Tribunal.

The authorisation for two barachois of 45.5 hectares has expired in year 2020 and new
conditions were still being worked out.

One barachois of 3.98 hectares was retrieved in June 2021 and is free since then.

One barachois of 6.54 hectares is to be deproclaimed as barachois.

In the absence of a legal mandate, applications were kept in abeyance and the leases were
not renewed by MBEMRFS.

420
MINISTRY OF BLUE ECONOMY, MARINE RESOURCES, FISHERIES AND SHIPPING
Non-Vested Barachois not Active in Aquaculture Activities

The other 12 barachois could not be managed by MBEMRFS for fish farming and
aquaculture activities pending their vesting in the Ministry. None of them were used for
aquaculture activities.

The status of the barachois not vested in MBEMRFS were as follows:

Five barachois totalling 71.33 hectares had been allocated by MHLUP over long-term
lease for activities other than aquaculture.

Applications for the use of two barachois totalling 10.6 hectares were under process.

Four barachois totalling 38.5 hectares were under the retrieval process from a private
promoter.

One barachois of 15.05 hectares was inaccessible as it is surrounded by private


property.

On 26 July 2021, MBEMRFS made a request to MHLUP for the vesting of all barachois.
However, as of November 2023, MHLUP has still not responded to the reminders sent by
MBEMRFS.

Absence of Agreement with Promoters

In respect of the two barachois active in aquaculture activities and vested in MBEMRFS,
Letters of Intent (LOI) laying out the terms and conditions were issued to the promoters,
authorising them to carry out aquaculture projects in years 2014 and 2015, respectively.

According to the LOI, the projects were to be undertaken on a pilot basis for initial periods
of three and five years respectively and may be renewed on mutual consent. No renewal
was seen for both projects since year 2020. The promoters were occupying the barachois
without valid authorisation.

Since date of first authorisation, the promoters have been occupying the barachois free of
charge.

Root Cause

A barachois policy was not yet finalised.

Recommendations

For an effective management and productive use of Government-owned barachois, the


Accounting Officer should:

expedite the amendments in the legislations following AGO’s advice;

finalise the Barachois Policy;

421
MINISTRY OF BLUE ECONOMY, MARINE RESOURCES, FISHERIES AND SHIPPING
liaise with MHLUP for the vesting of barachois; and

authorise the occupation of Government-owned barachois with legally binding


agreement.

Ministry’s Response

The Fisheries Act 2023 has been proclaimed on 1 December 2023. The Act makes
adequate provisions for aquaculture activities.

The Ministry will proceed with the required amendments in the Finance
(Miscellaneous Provisions) Bill of 2024.

Government has, on 8 December 2023, agreed to the adoption of a Barachois Policy


for the allocation of vested barachois for aquaculture projects. EOI for selection of
aquaculture projects in vested unoccupied barachois was launched on 9 January 2024.

Letter was sent to MHLUP for vesting of six additional Barachois on 29 August 2023.
A reply is being awaited.

The Barachois Policy makes provision for the signature of an Agreement with potential
promoters.

GOVERNANCE ISSUES

21.4 Absence of Risk Management Framework

In December 2021, MoFEPD issued a circular regarding the establishment of Risk


Management Framework in the Public Sector.

In order to facilitate the process, MoFEPD developed guidelines for putting in place a Risk
Management Framework in Ministries/Government Departments.

According to the guidelines, the Accounting Officer is accountable for the overall
governance and has the ultimate responsibility for Risk Management.

Following instructions and guidelines from MoFEPD, a meeting was held at the level of
MBEMRFS on 9 May 2022. It was then decided that:

each section of MBEMRFS should have a Risk Register; and

a Risk Management Committee has to be set up at the level of MBEMRFS.

Findings

As of September 2023, MBEMRFS did not have a Risk Management Policy.

The Risk Management Committee was not set up.

422
MINISTRY OF BLUE ECONOMY, MARINE RESOURCES, FISHERIES AND SHIPPING
Only the Risk Registers that form part of the Quality Management Systems for ISO
Certified Divisions, namely Mauritius Maritime Training Academy and Shipping
Divisions, were available.

Root Cause

No Proper follow-up was carried out by the Accounting Officer after the meeting of
May 2022.

Recommendation

The Accounting Officer should expedite the implementation of a Risk Management


Framework.

Ministry’s Response

In January 2024, MBEMRFS informed NAO that a Risk Management Committee has been
set up.

21.5 Incomplete Government Asset Register

The Government Asset Register (GAR) was developed in year 2017 to enable the recording
of Non-Financial Assets (NFAs) acquired by Ministries and Departments.

The GAR is a tool for ensuring efficiency and effectiveness in the management of NFAs
acquired by Government.

MoFEPD and the Treasury issued Financial Instructions and guidance regarding the
procedures and timelines for the recording of NFAs in the GAR.

Findings

During the last five years, some Rs 151.5 million were spent by MBEMRFS on the
acquisition of NFAs. However, the assets recorded in GAR as of September 2023
totalled Rs 137.2 million.

According to MoFEPD Circular No. 6 of 2020, all Government buildings under the
responsibility of Ministries/Government Departments should be captured in the GAR
by the end of June 2021. As of September 2023, the buildings of MBEMRFS were not
recorded in GAR.

As per the list obtained from the Fisheries Protection Service (FPS), 43 Outboard
Motors (OBMs) were allocated to the 14 Fisheries posts around the island. Only six
OBMs were recorded in GAR. Similarly, only 11 out of the 14 patrol boats attached
to the Fisheries Posts were recorded in the GAR.

423
MINISTRY OF BLUE ECONOMY, MARINE RESOURCES, FISHERIES AND SHIPPING
Root Cause

Since its implementation, the input in the GAR by different officers has not been supervised
to ensure correctness and accuracy. All the officers concerned were not adequately trained
for this purpose.

Recommendation

The Accounting Officer should ensure that GAR is updated.

Ministry’s Response

Two officers were assigned to record all non-financial assets for MBEMRFS which include
buildings, outboard motors, patrol boats and vehicles. Information was compiled and
submitted to the Treasury Department. MBEMRFS was informed that the only information
missing is the estimated cost of each building. As regards the cost of OBMs and patrol
boats, same are being retrieved from files and updated lists will be forwarded to the
Treasury.

21.6 Non-compliance with Legislation

Provisions have been made in various legislations to impose a statutory responsibility on


Accounting Officers and Boards of Statutory Bodies with the objective of strengthening
accountability and transparency in the Public Sector.

Findings

Non-submission of Annual Report on Performance

As of 18 December 2023, the Report on Performance of MBEMRFS for the financial year
2022-23 had not yet been submitted to MoFEPD, despite the statutory deadline being
31 October 2023.

Non-submission of Financial Statements for audit

The Statutory Bodies (Accounts and Audit) Act requires the Chief Executive Officer of a
Statutory Body to submit the Annual Report, including financial statements, to the auditor
not later than four months after the end of every financial year.

As of 14 December 2023, the following Statutory Bodies falling under the purview of
MBEMRFS, have not submitted their Financial Statements for audit for periods as shown
in Table 21-5.

424
MINISTRY OF BLUE ECONOMY, MARINE RESOURCES, FISHERIES AND SHIPPING
Table 21-5 Financial Statements not submitted to NAO for Audit

Statutory Body Financial Year No. of Financial


Statements
Fishermen 2018-19 to 2022-23 5
Investment Trust
Mauritius 2018-19 to 2022-23 5
Oceanography
Institute
Source: NAO records

MBEMRFS should:

ensure that the Report on Performance is submitted to MoFEPD within statutory


deadline; and

exercise control over Statutory Bodies operating under its aegis to ensure that they
fulfil their statutory responsibilities regarding the preparation of financial statements
and their submission for audit.

21.7 Follow-up of Matters Raised in the Audit Report 2021-22

A follow up of matters raised in the Audit Report for the financial year 2021-22 was carried
out. MBEMRFS was requested to inform NAO of the actions that have been taken to
address the findings and recommendations in the Report. The information along with
evidence collected through review of files and documents were assessed and discussed with
MBEMRFS.

The status on actions taken on findings since the publication of the Audit Report are
summarised below. Out of four findings, two (50 per cent) have been resolved and two (50
per cent) have been partially resolved.

425
MINISTRY OF BLUE ECONOMY, MARINE RESOURCES, FISHERIES AND SHIPPING
SN Findings Ministry’s Response - NAO
Status as of December 2023 Comments

Registration of Artisanal Fisher (Page 317)


1 Non-compliance It is difficult to formulate measures to
with Required evaluate the effectiveness of registered
Conditions for artisanal fishermen. Only two officers
Registration as are working in each team at the
Partially
Artisanal Fishers Fisheries Posts.
Resolved
(Pg 317, Para 21.1) As such, no monitoring could be
conducted by the Fisheries Protection
Service (FPS) on whether the
fishermen have fished for the required
percentage on fishing day.
2 Non-Compliance A book has been placed as from April
with New 2023 for record of duties performed
Conditions for with regard to cleaning activities.
Registered Fishers Action has been taken by the present
(Pg 318, Para 21.1) Acting Deputy Controller to ensure
recording and monitoring of issues Partially
such as attendance, Time In/Time Out Resolved
and others.
MBEMRFS is mobilising its available
resources to ensure compliance with
conditions approved by the Government
and it is contemplating to reorganise and
restructure the FPS.
Shipping Division Computerised Information System - Nugatory
Expenditure (Page 318)
3 Value for money Upon relaunch of the Shipping Division
not obtained Computerised Information System project,
(Pg 319, Para 21.2) a Core Team has been set up to implement
and monitor the project. A GANTT Chart
has been drawn.

Resolved
4 Non-renewal of
performance
guarantee
(Pg 319, Para 21.2)

426
MINISTRY OF BLUE ECONOMY, MARINE RESOURCES, FISHERIES AND SHIPPING
22 – MINISTRY OF GENDER EQUALITY
AND FAMILY WELFARE
22.1 Child Day Care Centres – Registration Status

The Ministry of Gender Equality and Family Welfare (MGEFW) is the regulatory body for
the registration of Child Day Care Centres (CDCC) in accordance with the Children`s Act
2020 and Child Day Care Centres Regulations 2022. On the other hand, the Companies and
Business Registration Department (CBRD) is the authority responsible for the registration
of businesses under the Business Registration Act 2002. The status of CDCC, as per
MGEFW database, as of 30 June 2023 were as per Table 22-1.

Table 22-1 Status of CDCC as of 30 June 2023

Status of Registration Number of CDCCs


30 September 30 June
2022 2023
Registered 138 195
Unregistered (1) 76 52
Deregistered (2) 149 104
Ordered to cease - 34
Closed 43 49

Source: Ministry`s Database


Notes (1) Registration still under process at MGEFW
(2) Previously registered whose registration has not been renewed

Findings

Role of the CBRD and MGEFW

CDCC were operating upon obtaining a Business Registration Number (BRN) from
CBRD. According to the records of CBRD, 1,308 BRN had been issued for CDCC as
of 30 June 2023. However, only 195 were registered with MGEFW.

MGEFW found that 513 entries out of the 1308 CDCC were duplicates. As of
September 2023, letters were sent to the remaining 600 unregistered CDCC to request
them to register or to immediately cease operations as they were not compliant with
the CDCC Regulations 2022. However, only 105 replied that they were no longer
operational.

There was a lack of coordination between MGEFW and CBRD which has resulted in
a significant number of unregistered CDCC in operation.

MGEFW disbursed Rs 7.3 million through the National Children Council under the
one-off Grant Scheme to 19 CDCC in the financial years 2018-19 to 2021-22 for
upgrading their facilities to ensure minimum standard delivery of service prior to their
registration. However, these CDCC were not registered with MGEFW as of October
2023.

427
As of September 2023, an Advisory Committee was not yet established in accordance
with Regulation 3 of the CDCC Regulations 2022.

CDCC still operating despite Order to Cease Operation

As of October 2023, only 24 out of 73 CDCC which were ordered to cease operations
were referred to the Commissioner of Police for follow up. It was reported that three
CDCC were still in operation.

Other legal avenues were not contemplated by MGEFW to prevent ongoing illegal
operation of CDCC which have been issued with cessation orders.

Root Causes

The Business Registration Act does not provide for CBRD to request the applicant to
submit a licence from MGEFW prior to issuing a Business Registration Number to
CDCC.

Inadequate monitoring by the Licensing and Enforcement Section of MGEFW.

Recommendations

Activities of MGEFW and CBRD should be coordinated so as to enable the Ministry


to capture all CDCC in operation, in a unified registration process.

MGEFW should follow up regularly with the Commissioner of Police on the status of
cases.

The Advisory Committee should be set up to oversee processes, standards and


strategies related to implementation and development of CDCC.

Ministry`s Response

Letters were issued to all CDCC from the list provided by CBRD informing them of
the Child Day Care Centres Regulations 2022.

Henceforth, all letters sent to CDCC to cease operations are being copied to the
Commissioner of Police and a list of CDCC to cease operations is being sent quarterly
to the Commissioner of Police. Updated information on a monthly basis regarding the
status of CDCC will be requested from the Commissioner of Police.

A crackdown operation was conducted where more than 75 per cent of the CDCC were
visited. Visits to the remaining CDCC on the list are ongoing.

The Ministry will also be requesting CBRD to submit a list of newly registered CDCC
on a monthly basis for continuous monitoring.

Enforcement of the Law should be made by the Police Department as the Attorney -
General`s Office has already made provisions for sanctions in the Regulations.

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MINISTRY OF GENDER EQUALITY AND FAMILY WELFARE
22.2 Risk Management

Risk management is a fundamental element of corporate governance. Risk assessment is


an integral part of risk management which provides a structured process for
Ministries/Departments to identify how their objectives may be affected.

Findings

Risk Management Framework and Risk Register not yet finalised

As of 13 September 2023, a Risk Management Framework was not yet finalised and
approved by the Accounting Officer.

The Risk Register was also not yet finalised.

Audit Committee not effective

The Audit Committee did not comply with Section 30 of the Audit Committee Charter
issued by the Office of Public Sector Governance (OPSG). During the financial year
ending 30 June 2023, only one status report for the quarter ended 30 September 2022,
was submitted to OPSG on 14 March 2023.

Only two meetings were held on 7 September 2022 and 11 November 2022, instead
of six, as per the Audit Committee Charter requirement.

Root Causes

The establishment of the risk management process was not being monitored by the
Accounting Officer.

Lack of commitment of the Audit Committee members hindered the risk management
process.

Recommendations

Circular No. 8 of 2021 issued by the Ministry of Finance, Economic Planning and
Development should be complied with and the Risk Register should be implemented
without delay.

The Audit Committee should adhere to all the requirements of the Audit Committee
Charter.

Ministry’s Response

Two Risk Assessment Meetings were held on 3 October and 7 December 2023. The
purpose of the meetings was to assess to situation of risks at the level of the Ministry
and to identify the potential risk as well as addressing major issues.

Despite the fact that follow up was done and a large number of items have been
completed during the Audit Committee for the Financial Year 2022-23, the Committee

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MINISTRY OF GENDER EQUALITY AND FAMILY WELFARE
could not meet regularly as Secretary had to fulfil the responsibilities of Acting
Assistant Permanent Secretary

Key Performance Indicators

The Ministry has established in its Budget Estimates 2022-23, Key Performance
Indicators (KPIs) to evaluate performance of specific services provided by MGEFW.

Findings

The Ministry had set two outcome indicators and six KPIs. No information was
provided on the basis the KPIs were established. The benchmarks set were derived
from historical data without taking into consideration the mission statement and the
goals of the Ministry.

Targets for financial years 2022-23 and 2023-24 were lowered for three metrics,
namely, the Implementation of the “Back to Home Programme”, the “Foster Care
Programme” and “Community Development Programmes”.

The “Back to Home Programme” had been initiated since October 2018 with the
purpose of reintegrating minors into their family. Although, the target set for financial
year 2021-22 was reduced, the actual results fell short of both the initial and revised
KPI. The actual results decreased from 210 to 162 children reintegrated in their
families in the financial year 2022-23.

The target for the financial year 2022-23 in respect of “Foster Care Programme” was
reduced by 50 per cent. The KPI set for the financial year 2021-22 was to place
40 children in foster care. However, the actual number of children placed in foster
homes was 11. This represents a significant gap between the target and the outcome
achieved. Recognising the challenges faced in financial year 2021-22, the KPI was
revised to 20 children. However, despite the placement of 20 children in foster care,
four of them were subsequently removed from their foster families.

The metrics relating to Empowerment of Women in the social and economic spheres
which was linked to the percentage of the implementation of the National Gender
Policy was not specific. No KPI was set to track progress in achieving gender equality.

Moreover, no explicit KPI was established regarding the implementation of family


welfare and gender-based violence. No KPI was set relating to the proportion of
women subject to physical, sexual and psychological violence.

Root Causes

According to the Ministry, parents had unfavourable social backgrounds and were
often financially or mentally unstable and were the perpetrators in some cases.

The Foster Care Unit was not successful in canvassing new applicants of foster homes.

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MINISTRY OF GENDER EQUALITY AND FAMILY WELFARE
Recommendation

Targets should be monitored and reasons for non-achievement of goals should be analysed.

Ministry`s Response

The main reasons why children were not sent back to home was due to unfavourable
psychological reports, parents being perpetrators or having alcoholic/drugs problems
or Magistrates’ decisions not to hand over upon deliberation following hearings or the
children refuse to return out of fear.

Sensitisation campaigns in canvassing new applicants of foster homes is an ongoing


feature of the Training Unit. Some 65 sensitisation campaigns have been carried out
for the period 2022-2023.

The Ministry is considering posting of additional staff to the child rehabilitation service
to ensure proper follow up.

22.3 Governance Issues – Non-compliance with Legislation

Provisions have been made in various legislations to impose a statutory responsibility on


Accounting Officers and Boards of Statutory Bodies with the objective of strengthening
accountability and transparency in the public sector.

Findings

Non-submission of Report on Performance

As of 18 December 2023, the Report on Performance of the Ministry of Gender Equality


and Family Welfare for the financial year 2022-23 had not yet been submitted to the
Ministry of Finance, Economic Planning and Development, despite the statutory deadline
being 31 October 2023.

Non-Submission of Financial Statements for audit

The Statutory Bodies (Accounts and Audit) Act requires the Chief Executive Officer of a
Statutory Body to submit the Annual Report to the auditor not later than four months after
the end of every financial year.

As of 14 December 2023, the following Statutory Bodies falling under the purview of
MGEFW, have not submitted their financial statements for audit for periods as shown in
Table 22-2.

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MINISTRY OF GENDER EQUALITY AND FAMILY WELFARE
Table 22-2 Financial Statements not submitted to NAO for Audit

Statutory Body Financial Year No. of Remarks


Financial
Statements
National Women 2022-23 1 Financial Statements for
Entrepreneur Council financial year 2021-2022
were submitted on 9.01.2023

National Women’s 2020-21 to 3 Financial Statements for


Council 2022-23 financial year 2019-2020
were submitted on 9.05.2023

Source: NAO records

Annual Reports not laid before the National Assembly

The Statutory Bodies (Accounts and Audit) Act requires a copy of the annual report and
audited accounts of every Statutory Body to be laid before the National Assembly at the
earliest opportunity.

As of 14 December 2023, two Statutory Bodies had not yet laid their Financial Statements
for the periods shown in Table 22-3, before the National Assembly, although they had been
certified by NAO.

Table 22-3 Annual Reports including audited Financial Statements not laid
before the National Assembly
Statutory Body Financial Year Date No of Financial
Certified Statements

National Adoption Council 01.07.2009- 21.07.2023 10


31.12.2010
2011-2015
01.01.2016-
30.06.2017
2017-18 to 2019-20
2020-21
04.08.2023 1
2021-22 04.12.2023 1
National Women’s Council 2019-20 25.07.2023 1
Source: NAO Records & National Assembly Hansard

NAO is of the view that the Ministry should exercise control over Statutory Bodies and
other entities operating under its aegis to ensure that they fulfil their statutory
responsibilities regarding the preparation of financial statements, their submission for audit
and tabling before the National Assembly.

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MINISTRY OF GENDER EQUALITY AND FAMILY WELFARE
23 - MINISTRY OF ARTS AND CULTURAL HERITAGE
23.1 Acquisition of Non-Financial Assets - 92.4 per cent of Budgeted Funds Not
spent

The budget for the acquisition of Non-Financial Assets (NFAs) for the financial year
2022-23 was Rs 122.5 million.

Finding

During the financial year 2022-23, some Rs 9.3 million that is only 7.6 per cent were
disbursed out of the Rs 122.5 million.

Root Cause

The Accounting Officer did not properly plan the implementation of the projects.

Recommendation

The Accounting Officer should ensure that the implementation of projects is properly
planned and executed so that the budgeted amounts are utilised fully.

Ministry’s Response

Some projects could not be implemented due to non-responsive or no bids. One main
project, namely, the National Archives Department / National Library project which is
being financed under the Line of Credit (LOC) from India could not be implemented as
clearance of Exim Bank is still awaited as at date.

23.2 Capital Grants to Statutory Bodies - Budgeted Funds unnecessarily tied up

As per the Budget Estimates 2022-23, an amount of Rs 11.5 million was initially voted as
capital grants for disbursement to Statutory Bodies falling under the purview of the
Ministry.

Finding

In the financial year 2022-23, only Rs 1.3 million, that is 15 per cent, were disbursed from
the sum of Rs 11.5 million earmarked for capital grants to three Statutory Bodies.

Root Cause

The Statutory Bodies did not properly plan for the implementation of their projects.

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Recommendation

The Accounting Officer should ensure that the Statutory Bodies have a proper
implementation plan for projects.

Ministry’s Response

In case of non-responsive bids or no bids, the implementation of projects is delayed.

23.3 Procurement

Annual Procurement Plan not published

Regulations 10 of the public procurement (regulations 2008) provides for the preparation
of an annual plan for the procurement of goods and services during the financial year.

As per Directive 22A of the Procurement Policy Office, the Annual Procurement Plan for
all procurements to be done through the open advertised bidding should be published on
the public body’s website at latest by end of July every year.

Finding

An Annual Procurement Plan for financial year 2022-23 was not uploaded on the Ministry’s
website.

Root Cause

The Accounting Officer did not set a system in place to upload the procurement plan on the
Ministry’s website.

Recommendation

The Accounting Officer should, henceforth, ensure compliance with the Public
Procurement Regulations.

Ministry’s Response

Instructions have been given to the Manager, Procurement and Supply to comply with
Directive 22A of the Procurement Policy Office.

Short Deadline for Response to Bids

Bidding exercises were carried out from time to time by the Ministry, and mostly for the
celebration of events. Prospective bidders were granted a deadline for the submission of
bids.

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MINISTRY OF ARTS AND CULTURAL HERITAGE
Findings

Three contracts of Rs 2.5 million, Rs 1.7 million and Rs 2.7 million each for the
provision of services relating to the organisation of three different events were
awarded, where the potential bidders were given only two days for the submission of
their bids.

In 18 other instances, short deadlines ranging from one to three days were given to
potential bidders for the submission of their bids. In five of these cases, the letter of
acceptance was issued on the date of closing of bids.

Root Causes

Poor procurement planning by the officer responsible for procurement.

The inordinate delay in the preparation of bidding documents and short deadline given
to bidders to submit their bids.

Recommendation

Submission of bids should remain open for a reasonable period of time so that responsive
bids are received.

Ministry’s Response

In some cases, short deadline had to be given to suppliers to respond to invitation to bids,
as invitation to bids had to be relaunched several times due to non-responsiveness or no
bids.

23.4 Governance Issues – Non-compliance with Legislation

Provisions have been made in various legislations to impose a statutory responsibility on


Accounting Officers and Boards of Statutory Bodies with the objective of strengthening
accountability and transparency in the public sector.

Findings

Late submission of Report on Performance

Every department shall, not later than 31 October in every year, submit to the Minister of
Finance, Economic Planning and Development (MoFEPD), a report on its performance in
respect of the previous financial year and on its strategic direction in respect of the
following 3 financial years.

The Report on Performance of the Ministry of Arts and Cultural Heritage was submitted to
MoFEPD on 10 November 2023, that is beyond the statutory deadline.

Ministry’s Response

Henceforth, the statutory date limit for the submission of the annual report will be ensured.

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MINISTRY OF ARTS AND CULTURAL HERITAGE
Non-submission of Financial Statements for Audit

The Statutory Bodies (Accounts and Audit) Act requires the Chief Executive Officer of a
Statutory Body to submit the Annual Report to the auditor not later than four months after
the end of every financial year.

As of 14 December 2023, the following Statutory Bodies falling under the purview of the
Ministry of Arts and Cultural Heritage, have not submitted their Financial Statements for
audit for periods as shown in Table 23-1.
Table 23-1 Financial Statements not submitted to NAO for Audit

Statutory Body Financial Year/ Period No. of


Financial
Statements
Arabic-speaking Union 2020-21 to 2022-23 3
Creole-speaking Union 2022-23 1
Malcom de Chazal Trust Fund 2021-22 and 2022-23 2
Marathi- 2022-23 1
Mauritian Cultural Centre Trust 2004-05 to 2022-23 18
Mauritius Film Development 2018-19 to 2022-23 5
Corporation
Mauritius Marathi Cultural 2022-23 1
Centre Trust
Mauritius Museums Council 2017-18 to 2022-23 6
Mauritius Society of Authors 2020-21 to 2022-23 3
Mauritius Tamil Cultural Centre 2020-21 to 2022-23 3
Trust
National Art Gallery 2019-20 to 2022-23 4
National Heritage Fund 2022-23 1
Nelson Mandela Centre for 2019-20 to 2022-23 4
African Culture Trust Fund
Professor Basdeo Bissoondoyal 2006-07 to 2008-09 16
Trust Fund 1.07.09- 31.12.10
2011-2015
01.01.16-30.06.17
2017-18 to 2022-23
Sanskrit-speaking Union 2022-23 1
Tamil-speaking Union 2022-23 1
Telugu-speaking Union 2022-23 1
Urdu-speaking Union 2019-20 to 2022-23 4
Source: NAO records

Note: Financial Statements for 2021-22 was submitted on 07.07.2023

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MINISTRY OF ARTS AND CULTURAL HERITAGE
Ministry’s Response

A circular will be issued again and close follow up will be made with all parastatals.

Annual Reports not laid before the National Assembly

The Statutory Bodies (Accounts and Audit) Act requires a copy of the annual report and
audited accounts of every Statutory Body to be laid before the National Assembly at the
earliest opportunity.

As of 14 December 2023, Annual Reports of 9 Statutory Bodies had not yet been laid before
the National Assembly as shown in Table 23-2.

Table 23-2 Annual Reports including Audited Financial Statements


not laid before the National Assembly
No. of
Date
Statutory Body Financial Year/Period Financial
Certified
Statements
Islamic Cultural Centre Trust 2017-18 03.06.2020 4
Fund 2018-19 05.11.2020
2020-21 21.04.22
2021-22 10.04.23
Malcom de Chazal Trust Fund 2003-04 31.05.21 to 6
01.01.2016 - 30.6.2017 31.03.23
2017-18
2018-19
2019-20
2020-21
Mauritius Museum Council 2015 30.06.22 1
Mauritius Society of Authors 01.01.16-30.06.2017 22.11.23 4
2017-18 to 2019-20
Mauritius Tamil Cultural 2011-2013, 2014, 18.08.2021 9
Centre Trust 01.01.2015 to 30.6.2022
30.6.2016,2016-17 to
2019-20
Mauritius Telugu Cultural 2020-21 19.04.2022 2
Centre Trust 2021-22 05.05.2023
National Art Gallery 2014 to 2015 31.05.2018 4
01.01.2016 -30.06.2017 14.05.2020
2017-18
National Heritage Fund 2018-19 to 2019-20 2
Telugu-speaking Union 2017-18 to 2019-20 04.08.2021 5
2020-21 03.08.22
2021-22 21.06.23
Source: NAO Records and National Assembly Hansard

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MINISTRY OF ARTS AND CULTURAL HERITAGE
Ministry’s Response

Another circular will be issued to all Statutory Bodies falling under the purview of this
Ministry to submit their Annual Reports within the Statutory delay to the Ministry to be
tabled at the National Assembly.

Special Funds - Financial Statements not submitted for Audit

As of 14 December 2023, the following Special Funds have not submitted their Financial
Statements for audit for periods as shown in Table 23-3.

Table 23-3 Special Funds - Financial Statements not submitted to NAO for Audit

Special Fund Financial Year/ No. of


Period Financial
Statements
National Arts Fund 2021-22 to 2022-23 2
President Fund for Creative 2018-19 to 2022-23 5
Writing
Source: NAO records

NAO is of the view that the Ministry should exercise control over Statutory Bodies and
other entities operating under its aegis to ensure that they fulfil their statutory
responsibilities regarding the preparation of financial statements, their submission for audit
and tabling before the National Assembly.

Ministry’s Response

The Financial Statements of the National Arts Fund and President’s Fund for Creative
Writing will be finalised shortly for onward transmission to National Audit Office.

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MINISTRY OF ARTS AND CULTURAL HERITAGE
24 – MINISTRY OF PUBLIC SERVICE, ADMINISTRATIVE
AND INSTITUTIONAL REFORMS
24.1 Construction of New Civil Service College – Shortcomings in Contract
Management

The contract for the Construction of the New Civil Service College was awarded to a local
company for the sum of Rs 395.8 million, inclusive of VAT. The project started on
27 January 2022 and was scheduled for completion by July 2023. An advance payment of
Rs 39 million was effected to the Contractor in February 2022. As of June 2023,
disbursements to the Contractor reached some Rs 127 million.

Findings

Considerable Delay in Execution Works

On 2 December 2022, the Project Steering Committee granted 138 days as extension of
time, bringing the initial completion date of 29 July 2023 to 14 December 2023.

As of June 2023, slow progress of works was noted as the construction completion stage
for the Academic Block and Auditorium reached only 53 per cent and 43 per cent
respectively.

Shortcomings in the Consultancy Services

Seven bills for some Rs 69 million were certified by the Consultant, for which the
detailed Bill of Quantities (BOQ) were signed solely by the Contractor.

The Consultant did not re-measure, together with the Contractor, all the quantities as
per the Preamble of BOQs No 8 which mentions that “all the quantities shall be re-
measured and payment shall be based on the re- measured quantities at the rates and
prices in the Contract”.

With regards to Bill No 7, the removal of surplus excavated topsoil increased by more
than 300 per cent, for which an amount of Rs 3.1 million was paid. Similarly, materials
and works, namely, 25 mm thick rock sand, depositing, hand packing, watering and
compacting to 95 per cent conforming to British Standard compaction increased by
more than 400 per cent.

Additional Works of Rs 66 million due to Inadequate Planning

Due to inadequate planning, the Consultant submitted a revised BOQ of some Rs 66 million
for additional works. Some examples are as follows:

CEB structural work, civil work for electrical connectivity, footpath, sewerage
connections and fencing amounted to Rs 12.1 million.

The additional increase of 23.67 tonnes structural steel amounted to Rs 5.3 million.

An additional cost of Rs 38.7 million for the increase in provision of 163 parking slots.

439
Under-utilised Funds in Financial Year 2022-23

An amount of Rs 175 million was earmarked for the construction project in the
financial year 2022-23, out of which only some Rs 54.3 million, representing
31 per cent of the budgeted amount, were disbursed as of 30 June 2023.

An amount of Rs 65 million was approved as per Carry Over Warrant Certificate


No. 1 of 2023 dated 30 May 2023 and as of 30 September 2023, only some Rs 9.5
million, representing 14.6 per cent of the approved carry over amount were disbursed.

24.2 Incorrect Recovery of Advance Payment

Section 48.3 of the Particular Conditions of the Contract stipulates that “advance
payment shall be 12.5% of the total amount certified in the Payment Certificate”. The
Ministry of Public Service, Administrative and Institutional Reforms (MPSAIR)
wrongly deducted Rs 4.3 million as per Bill No 7 for mobilisation advance instead of
Rs 8.6 million.

A total additional advance amount of Rs 18.4 million was made for materials as per
Bills Nos 1, 7 and 8, over and above the advance payment of Rs 39 million made in
February 2022.

As of September 2023, only Rs 2 million out of the accumulated amount of Rs 18.4 million,
were recouped from the advance for materials.

Recommendation

The Accounting Officer should ensure that the New Civil Service College is completed
within a reasonable timeframe.

Ministry’s Response

Delays in construction works were due to adverse weather conditions, main access
road not declared public and late supply of electricity to construction site.

On 10 November 2023, the Ministry requested the Consultant to henceforth sign the
detailed BOQ, submit detailed measurement of works jointly signed with the
Contractor, prior to the submission for payment and rectify the reimbursement of
advance payment in the next interim payment certificate.

Financial clearance was sought from the Ministry of Finance, Economic Planning and
Development (MoFEPD) for the cost of additional works.

Funds allocated for financial year 2022-23 were under-utilised due to slow progress of
works.

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MINISTRY OF PUBLIC SERVICE, ADMINISTRATIVE AND INSTITUTIONAL REFORMS
24.3 Strategic Overview- Targets not achieved and Unrealistic

For the financial year 2022-23, five Key Performance Indicators (KPIs) and one Outcome
Indicator were determined by MPSAIR. As of 30 June 2023, the targets set for KPIs, related
to the Public Sector Business Transformation Bureau (PSBTB), were not achieved.

Poor Management of Sandbox Project

In January 2021, Government introduced a new Sandbox Framework to facilitate


development of proof of concepts and pilot exercises to promote the adoption of emerging
and innovative technologies in the public sector.

As of September 2023, 34 sandbox proposals were submitted by Ministries/Departments


on the online sandbox portal.

The sandbox proposals are implemented in order of priority in view of their transformative
impact on service delivery.

Findings

For the financial year 2022-23, the Ministry targeted the development of three sandbox
projects, namely:

(1) the Vehicle Management System;

(2) Software Application and Data Analytics Tool for Return of Procurement Activities
(RoPA); and

(3) SMS Gateway and Alert System.

As of September 2023, only the Vehicle Management System was completed and was to
be rolled out by the Ministry of National Infrastructure and Community Development
(MNICD). The status of the other two projects were as follows:

Software Application and Data Analytics Tool for Return of Procurement Activities

In April 2022, PSBTB obtained approval for the implementation of a software for RoPA
for the Procurement Policy Office. The software would improve the collection, monitoring
and analysis of RoPA across the public service.

In June 2022, MPSAIR launched tender for the selection of consultant(s) for the
development of the software, but only one bid was received and was not responsive. In
December 2022, a new tender exercise was carried out. However, no response was received
at closing date.

As of September 2023, the project was not implemented.

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MINISTRY OF PUBLIC SERVICE, ADMINISTRATIVE AND INSTITUTIONAL REFORMS
SMS Gateway and Alert System

In September 2022, the Steering Committee gave its approval to explore the
implementation of the “Youth Development Training Platform”. Following meetings held
by PSBTB with representatives of the Ministry of Labour, Human Resources Development
and Training, it was agreed to implement the SMS Gateway and Alert System to facilitate
communication between job seekers and job providers.

MPSAIR launched tender for the implementation of the SMS Gateway and Alert System
in April 2023. As of September 2023, the bids were still at the evaluation stage.

Ministry’s Response

The Ministry decided not to proceed further with the Development of the Software
Application and Data Analytics Tool for RoPA and SMS Gateway and Alert System.

New Projects will be considered under the Sandbox Framework.

Target Set for the Business Process Re-engineering Exercises - Not Achieved

In October 2021, a Memorandum of Agreement (MoA) was signed between the National
Productivity and Competitiveness Council (NPCC) and MPSAIR to assist Ministries and
Departments in re-engineering their business processes.

Findings

The Project Steering Committee on Smart Process Framework selected three units for the
implementation of the Business Process Re-engineering (BPR) exercise, namely:

(1) the Performance Management and Resource Unit of MPSAIR;

(2) the Emergency Response Service (ERS) of the Mauritius Police Service (MPS); and

(3) the Legal Metrology Services and Consumer Affairs Unit of the Ministry of Commerce
and Consumer Protection (MCCP).

However, the Ministry faced challenges in conducting the three BPR exercises during the
financial year 2022-23.

Performance Management and Resource Unit of the Ministry

In December 2021, MPSAIR agreed to review the existing Performance Management


System (PMS) process, prior to its digitalisation and sought the services of NPCC for that
purpose.

Following the submission of a draft Terms of Reference by the Performance Management


and Resource Unit to NPCC in July 2022, the latter informed MPSAIR that the BPR
exercise was outside the scope of the signed MoA.

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MINISTRY OF PUBLIC SERVICE, ADMINISTRATIVE AND INSTITUTIONAL REFORMS
NPCC further advised that the services of an external consultant would be more appropriate
for the review and digitalisation of the existing performance management processes.

In May 2023, MPSAIR launched tender for consultancy services for the review of the PMS
in the public service. As of September 2023, bids received were still at evaluation stage.

Emergency Response Service of the Mauritius Police Service

In May 2022, MPS agreed to proceed with the BPR exercise for a new digital system at the
ERS.

In September 2022, NPCC submitted a draft report on the BPR exercise to MPSAIR and
MPS.

The pilot-testing phase of the BPR exercise at the ERS was to be completed in January
2023. However, MPS informed that the proposals made in the report would not be feasible
as it was already equipped with another system with a digital diary book.

MPS decided not to go ahead with the new digital system as it would involve heavy
implications in terms of cost and security.

Legal Metrology Services and Consumer Affairs Unit of the Ministry of Commerce and
Consumer Protection

In September 2021, MCCP submitted a project proposal under the Smart Process
Framework. MPSAIR retained the project proposal and agreed that BPR exercise be
conducted in the financial year 2022-23.

In August 2022, MPSAIR requested NPCC to initiate actions for the BPR exercise at the
Legal Metrology Services and Consumer Affairs Unit of MCCP. However, the BPR
exercise was cancelled as no budgetary provision was made for the financial year 2022-23
at MCCP.

Root Causes

The undue delay in the filling of the posts of Director and technical staff at PSBTB led
to poor evaluation, monitoring and implementation of projects.

There is absence of feasibility studies along with inadequate coordination between


MPSAIR and other Ministries.

Recommendation

The Accounting Officer shall ensure that all constraints and challenges faced in
implementing the sandbox projects and conducting BPR exercises are addressed.

Ministry’s Response

The non-implementation of the BPR exercises was beyond the control of the Ministry as it
depended on external factors.

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MINISTRY OF PUBLIC SERVICE, ADMINISTRATIVE AND INSTITUTIONAL REFORMS
Unrealistic Targets set for Key Performance Indicators

MPSAIR did not set realistic targets for two KPIs, namely, “Number of Safety Audits
Conducted” and “the Number of Public Officers Trained”. As illustrated in Table 24-1, the
achievements for these two KPIs for the last three financial years from 2020-21 to
2022-23 largely exceeded the relatively low targets.

Table 24-1 Key Performance Indicators and Achieved Targets

Key Performance Indicators Target Achievements


2022-23 2022-23 2021-22 2020-21
Number of Safety Audits 7,000 8,195 8,497 8,129
Conducted
Number of Public Officers 12,000 20,568 23,252 12,027
Trained
Source: Ministry’s Records and Accounts of the Government 2020-21 and 2021-22

Root Cause

The Accounting Officer did not consider past achievements while setting targets for the
future years.

Recommendation

The Accounting Officer should ensure that factors such as past achievements and
implementing capacity of the Ministry are considered before setting realistic targets.

Ministry’s Response

The Ministry will set targets in line with previous years’ achievements for the incoming
budgetary exercise in consultation with MoFEPD.

24.4 Audit Committee - Not Fully Operational

Audit Committee (AC) plays a key role in public accountability by providing independent
oversight of the organisation’s governance, risk management and internal control practices,
thus providing confidence in the integrity of these practices.

In August 2022, the Office of Public Sector Governance (OPSG) developed an updated AC
Charter to provide guidelines on the setting up and operations of the AC.

In September 2022, a Performance Agreement (PA) was signed between the Accounting
Officer and members of the AC.

Findings

Only three meetings of the AC were held during the financial year 2022-23, instead of
the required minimum of six meetings annually.

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MINISTRY OF PUBLIC SERVICE, ADMINISTRATIVE AND INSTITUTIONAL REFORMS
The Audit Plan was submitted to OPSG on 4 November 2022, that is, with a delay of
two months.

The AC did not submit its Status Reports for the quarters ended 31 March 2023 and
30 June 2023 to the Accounting Officer and OPSG.

As of September 2023, the Accounting Officer’s feedback and comments on the


performance and effectiveness of the AC for the financial year 2022-23, were not seen.

Root Causes

The Accounting Officer did not ensure that the AC was operational throughout the
year.

Vacancies of AC members were not filled as required by the AC Charter.

Recommendation

The AC members and the Accounting Officer should fulfil their reporting responsibilities
by complying with the provisions of the AC Charter and the PA.

Ministry’s Response

The Ministry highlighted that the high staff turnover within a period of five months affected
the performance of the Committee.

24.5 Internal Audit - Risky Audit Areas not covered

The purpose of the Internal Audit (IA) is to help the MPSAIR in accomplishing its
objectives by bringing a systematic and disciplined approach to evaluate the effectiveness
of the Organisation’s governance, risk management and control processes and make
recommendations to improve those processes.

Findings

Although, the AC did not review and recommend the approval of the IA Charter as
outlined in the AC Charter, the document was approved by the Accounting Officer and
the Director, Internal Control in July 2021.

Only 75 per cent of the planned audit and follow-up assignments were covered during
the financial year 2022-23. Thus, some risky auditable areas may not have been
reviewed.

Root Cause

There was inadequate follow-up by the Accounting Officer and the AC on the audit areas
to be covered as well as on the submission of reports by the Officer of the Internal Control
posted at the Ministry.

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MINISTRY OF PUBLIC SERVICE, ADMINISTRATIVE AND INSTITUTIONAL REFORMS
Recommendations

The Annual IA Plan and IA Charter should be reviewed by the AC.

The risky audit areas identified in the Annual IA Plan should be covered as far as
possible.

The Accounting Officer should approve the IA Charter.

Ministry’s Response

The Ministry agreed that the Annual IA Plan and Charter were not reviewed by the AC
as it was not fully operational in the financial year 2022-23.

The Ministry will henceforth ensure that the risky audit areas identified in the Annual
IA Plan be covered by the Internal Control Unit.

24.6 Government Asset Register - Procured Assets not recorded

The Government Asset Register (GAR) was developed in 2017 to enable the recording of
Non-Financial Assets (NFAs) acquired by Ministries and Government Departments.

GAR is a tool to ensure efficient and effective management of NFAs.

Findings

The GAR Coordinator of the Ministry did not comply with the Treasury’s requirement
for the recording of all NFAs directly on the GAR online system as from 01 July 2022.

Only assets procured in the month of July 2022 were recorded on the GAR online
system while NFAs procured during the months of August 2022 to June 2023 were
recorded on the Application Desktop Integrator.

Root Cause

The GAR Coordinator of the Ministry did not organise adequate training sessions for GAR
users.

Recommendation

The Accounting Officer should arrange for effective training programmes to enable GAR
users to record data in respect of NFAs on the GAR online system.

Ministry’s Response

The Ministry encountered technical issues over a certain period of time, during which
data were recorded in the Application Desktop Integrator.

All assets procured as of June 2023 have already recorded on GAR

446
MINISTRY OF PUBLIC SERVICE, ADMINISTRATIVE AND INSTITUTIONAL REFORMS
24.7 Risk Management Framework- Not yet developed

In December 2021, MoFEPD issued a circular regarding the establishment of Risk


Management (RM) in the Public Sector.

In view of facilitating the process, MoFEPD developed Guidelines for the establishment of
a RM Framework in Ministries.

According to the Guidelines, the Accounting Officer is accountable for the overall
governance and has the ultimate responsibility for RM.

Findings

As of September 2023, the Ministry did not develop a RM Framework.

A RM Policy was approved and signed by the Accounting Officer in January 2023 but
its implementation was not guided by a RM Strategy as outlined in the Guidelines for
RM in the Public Sector.

The RM Committee was set up in January 2023 but not yet operational as of September
2023. Also, the Committee’s mandate was not clearly defined.

Root Cause

The Accounting Officer did not designate relevant officials with the responsibility for
developing the Ministry’s RM framework.

Recommendations

The Accounting Officer should establish an RM Framework and Strategy within


reasonable time.

The composition and mandate of the RM Committee, including roles, responsibilities


and accountability should be clearly defined and approved by the Accounting Officer.

Ministry’s Response

The RM Committee has already been constituted and will be responsible for the
establishment of RM Framework and development of RM Strategy and Action Plan.

24.8 Governance Issues – Non-compliance with Legislation

Provisions have been made in various legislations to impose a statutory responsibility on


Accounting Officers and Boards of Statutory Bodies with the objective of strengthening
accountability and transparency in the public sector.

447
MINISTRY OF PUBLIC SERVICE, ADMINISTRATIVE AND INSTITUTIONAL REFORMS
Finding

Non-submission of Report on Performance

As of 18 December 2023, the Report on Performance of MPSAIR for the financial year
2022-23 had not yet been submitted to MoFEPD, despite the statutory deadline being 31
October 2023.

Ministry’s Response

The Annual Report for financial year 2022-23 has already been issued on 22 January 2024.

24.9 Follow-up of Matters Raised in the Audit Report 2021-22

A follow up of matters raised in the Audit Report for the financial year 2021-22 was carried
out. MPSAIR was requested to inform NAO of the actions that have been taken to address
the findings and recommendations in the Report. The information along with evidence
collected through review of files and documents were assessed and discussed with
MPSAIR.

The status on actions taken on findings since the publication of the Audit Report are
summarised below. The two findings have been resolved.

Ministry’s Response - NAO


SN Findings
Status as of January 2024 Comments

Construction of Civil Service College- Shortcomings in Contract Management


(Page 341)
1 Retention Money- Non -Compliance
with Conditions of Contract
Incorrect Retention Money of Overpayment of Rs 886,906 Resolved
Rs 886,906. recovered.
(Pg 341, Para 24.1)
2 No Detailed Breakdown of Lump Sum
Price
No detailed price breakdown was Submission of Lump Sum Resolved
available for the lump sum price of detailed breakdown
Rs 19.7 million and Rs 4.5 million.
(Pg 342, Para 24.1)

448
MINISTRY OF PUBLIC SERVICE, ADMINISTRATIVE AND INSTITUTIONAL REFORMS
PART II
AUDIT OF OTHER PUBLIC ENTITIES
25 – STATUTORY BODIES, LOCAL AUTHORITIES, SPECIAL
FUNDS AND OTHER BODIES
25.1 Financial Reporting

25.1.1 Statutory Bodies

Statutory Bodies are established by law to carry out specific functions which Government
considers may be more effectively performed outside a traditional departmental structure.
They are subject to varying degrees of ministerial control which are specified in the
legislations establishing them. Ministers are accountable to the National Assembly for the
operation of the statutory bodies falling under their respective responsibilities. Since public
money is allocated to the operations of statutory bodies, there is need to ensure that the
funds are spent in an efficient, effective and economic manner.

The Statutory Bodies (Accounts and Audit) Act provides that every statutory body shall
cause to be prepared an annual report which shall consist of:

the financial statements in respect of the financial year to which the report relates;

a report on the performance of the statutory body in respect of the previous financial
year;

a corporate governance report in accordance with the National Code of Corporate


Governance; and

the strategic direction of the statutory body in respect of the following 3 financial years.

The Act also sets out the following timelines to be complied with:

(a) The Chief Executive Officer of every statutory body shall, not later than
three months after the end of every financial year, submit to the Board for approval
the annual report in respect of that year.

(b) After approval by the Board, the Chief Executive Officer shall, not later than
four months after the end of every financial year, submit the annual report to the
auditor.

(c) The auditor shall, within ten months of the end of every financial year, after receipt of
the annual report, submit the annual report and his audit report to the Board.

(d) On receipt of the annual report, including the audited financial statements and the audit
report, the Board shall, not later than one month from the date of receipt, furnish to the
Minister such reports and financial statements.

(e) The Minister shall, at the earliest available opportunity, lay a copy of the report and
audited accounts of every statutory body within his portfolio before the National
Assembly.

449
25.1.2 Local Authorities

The Local Government Act provides that the approved annual report of every Local
Authority shall be audited by the Director of Audit. The main provisions made in the Act
regarding the time frame for the submission of the accounts of Local Authorities for audit,
and the gazetting of the certified financial statements and the report of the Director of Audit
are as follows:

The Chief Executive of every Local Authority, other than a Village Council, shall,
within three months after the end of the financial year submit annual report to the
Council.

The Chief Executive of every Local Authority shall, within four months of the end
of every financial year, submit the approved annual report to the Director of Audit.

The Director of Audit shall, after receipt of the approved annual report, submit, within
10 months of the close of every financial year, the annual report and the audit report
to the Minister and to the local authority.

On receipt of the report of the Director of Audit, in respect of the annual report of a Council
which has been audited, the Minister shall, at the earliest available opportunity, lay a copy
of its annual report and audited accounts before the National Assembly.

25.1.3 Special Funds

All Special Funds are either regulated by an Act or a Regulation made under the Finance
and Audit Act. Some are required to submit accounts not later than three months after the
end of each financial year, while for others, there is no such deadline.

Every Special Fund shall prepare Financial Statements in accordance with International
Public Sector Accounting Standards (IPSAS).

25.2 Audit of Accounts of Public Sector Bodies

NAO carries out the audit of the accounts of the following Public Sector Bodies (PSBs)
besides Ministries and Government Departments, and the Rodrigues Regional Assembly
(RRA).

119 Statutory Bodies (SBs)

12 Local Authorities (LAs)

18 Special Funds (SFs)

6 State-Owned Companies (SOCs)

31 Other Bodies (OBs) including 8 Donor-Funded Projects (DFPs)

450
STATUTORY BODIES, LOCAL AUTHORITIES, SPECIAL FUNDS AND OTHER BODIES
25.2.1 Financial Statements not Submitted for Audit

As of 12 February 2024 -

(a) 44 SBs have not yet submitted a total of 154 Financial Statements to NAO for audit
purposes;

(b) 6 SFs have not yet submitted a total of 12 Financial Statements to NAO for audit
purposes; and

(c) 9 OBs have not yet submitted a total of 24 financial statements to NAO for audit
purposes.

Details are given at Appendix I.

25.2.2 Financial Statements not yet Laid before the National Assembly

As of 12 February 2024 –

(a) 75 Financial Statements in respect of 25 SBs had been certified but have not yet been
laid before the National Assembly.

(b) 7 Financial Statements in respect of one SF were certified by NAO but not yet laid
before the National Assembly.

Appendix II refers.

This is viewed with concern as, despite legal provisions, Financial Statements were either
not submitted for audit or not laid before the National Assembly. In some cases, Financial
Statements for more than 15 financial years have not been submitted to NAO for audit
purposes.

451
STATUTORY BODIES, LOCAL AUTHORITIES, SPECIAL FUNDS AND OTHER BODIES
452
STATUTORY BODIES, LOCAL AUTHORITIES, SPECIAL FUNDS AND OTHER BODIES
APPENDICES

&

ANNEX
Appendix I

Financial Statements not yet Submitted to NAO for Audit

SN Statutory Body Client No. of Financial


Type Financial Year/Period
Statements
THE JUDICIARY
1 Institute for Judicial and Legal Studies OB 2 2021-22 & 2022-23

2 National Human Rights Commission OB 1 2022-23


PRIME MINISTER’S OFFICE, MINISTRY OF DEFENCE, HOME AFFAIRS AND EXTERNAL
COMMUNICATIONS AND MINISTRY FOR RODRIGUES, OUTER ISLANDS AND TERRITORIAL
INTEGRITY
3 Chagossian Welfare Fund SB 1 2022-23

4 Outer Islands Development SB 2 2021-22 & 2022-23


Corporation

5 Discharged Persons Aid Committee OB 1 2022-23


VICE PRIME MINISTER’S OFFICE, MINISTRY OF EDUCATION, TERTIARY EDUCATION,
SCIENCE AND TECHNOLOGY
6 Early Childhood Care and Education SB 3 2020-21 to 2022-23
Authority
7 Private Secondary Education SB 1 2022-23
Authority
8 Rajiv Gandhi Science Centre Trust SB 3 2020-21 to 2022-23
Fund
9 Sir Seewoosagur Ramgoolam SB 6 2017-18 to 2022-23
Foundation
10 Special Education Needs Authority SB 1 2022-23

11 University of Technology, Mauritius SB 2 2021-22 & 2022-23


12 Université des Mascareignes SB 1 2022-23
MINISTRY OF LAND TRANSPORT AND LIGHT RAIL, FOREIGN AFFAIRS, REGIONAL
INTEGRATION AND INTERNATIONAL TRADE

13 National Transport Corporation SB 7 01.01.2016-30.06.2017


to
2022-23
14 Taxi Operators Welfare Fund SB 1 2022-23

MINISTRY OF ENERGY AND PUBLIC UTILITIES


15 Utility Regularity Authority SB 1 2022-23

16 CEB (Facilities) Co Ltd OB 1 2022-23

453
Financial Statements not yet Submitted to NAO for Audit

SN Statutory Body Client No. of Financial


Type Financial Year/Period
Statements
MINISTRY OF SOCIAL INTEGRATION, SOCIAL SECURITY AND NATIONAL SOLIDARITY

17 CEB (Green Energy) Co Ltd OB 1 2022-23

18 National Council for the SB 3 2020-21 to 2022-23


Rehabilitation of Disabled Persons

19 Senior Citizen Council SB 1 2022-23

20 Training and Employment of SB 5 2018-19 to 2022-23


Disabled Persons Board

21 National Pensions Fund SF 1 2022-23


22 National Empowerment Foundation OB 2 2021-22 & 2022-23

23 National Savings Fund OB 1 2022-23

MINISTRY OF INDUSTRIAL DEVELOPMENT, SMES AND COOPERATIVES

24 Small and Medium Enterprises SB 2 01.01.2016-30.06.2017


Development Authority &
(Ceased operations on 18.01.2018) 01.07.2017-18.01.2018
25 Cooperative Development Fund SF 1 2022-23
ATTORNEY GENERAL’S OFFICE, MINISTRY OF AGRO-INDUSTRY AND FOOD SECURITY
26 Mauritius Meat Authority SB 1 2022-23

27 Mauritius Society for Animal Welfare SB 9 30.10.2013-31.12.2014


to
2022-23
28 Small Farmers Welfare Fund SB 4 2019-20 to 2022-23

29 Sir Seewoosagur Ramgoolam SB 3 2020-21 to 2022-23


Botanical Garden Trust
30 Sugar Cane Planters Trust SB 3 2007-08
(ceased operation on 25.07.2020) to
01.07.2009-24.07.2010
31 Vallée D'Osterlog Endemic Garden SB 3 2020-21 to 2022-23
Foundation
32 National Parks and Conservation SF 1 2022-23
Fund
33 Mauritius International Arbitration OB 2 2021 & 2022
Centre

454
FINANCIAL STATEMENTS NOT YET SUBMITTED TO NAO FOR AUDIT
Financial Statements not yet Submitted to NAO for Audit

SN Statutory Body Client No. of Financial


Type Financial Year/Period
Statements
MINISTRY OF YOUTH EMPOWERMENT, SPORTS AND RECREATION
34 Mauritius Sports Council SB 3 2020-21 to 2022-23

MINISTRY OF INFORMATION TECHNOLOGY COMMUNICATION AND INNOVATION


35 Mauritius Research and Innovation SB 2 2021-22 & 2022-23
Council
MINISTRY OF LABOUR, HUMAN RESOURCE DEVELOPMENT AND TRAINING AND COMMERCE
AND CONSUMER PROTECTION

36 Trade Union Trust Fund SB 2 2021-22 & 2022-23

MINISTRY OF HEALTH AND WELLNESS

37 Morris Legacy Fund SF 2 2021-22 & 2022-23

MINISTRY OF BLUE ECONOMY, MARINE RESOURCES , FISHERIES AND SHIPPING


38 Fishermen Investment Trust SB 5 2018-19 to 2022-23

39 Mauritius Oceanography Institute SB 5 2018-19 to 2022-23


MINISTRY OF GENDER EQUALITY AND FAMILY WELFARE

40 National Women Entrepreneur SB 1 2022-23


Council

41 National Women’s Council SB 2 2021-22 & 2022-23


MINISTRY OF ARTS AND CULTURAL HERITAGE

42 Arabic-speaking Union SB 3 2020-21 to 2022-23


43 Malcom de Chazal Trust Fund SB 2 2021-22 & 2022-23

44 Marathi-speaking Union SB 1 2022-23

45 Mauritian Cultural Centre Trust SB 18 2004-05 to 2022-23

46 Mauritius Film Development SB 4 2019-20 to 2022-23


Corporation
47 Mauritius Museums Council SB 6 2017-18 to 2022-23
48 Mauritius Society of Authors SB 3 2020-21 to 2022-23
49 Mauritius Tamil Cultural Centre Trust SB 3 2020-21 to 2022-23

455
FINANCIAL STATEMENTS NOT YET SUBMITTED TO NAO FOR AUDIT
Financial Statements not yet Submitted to NAO for Audit

SN Statutory Body Client No. of Financial


Type Financial Year/Period
Statements
MINISTRY OF ARTS AND CULTURAL HERITAGE (CONTINUED)

50 National Art Gallery SB 4 2019-20 to 2022-23


51 Nelson Mandela Centre for African SB 4 2019-20 to 2022-23
Culture Trust Fund
52 Professor Basdeo Bissoondoyal Trust SB 16 2006-07 to 2022-23
Fund
53 Sanskrit-speaking Union SB 1 2022-23
54 Tamil-speaking Union SB 1 2022-23
55 Telugu-speaking Union SB 1 2022-23

56 Urdu-speaking Union SB 4 2019-20 to 2022-23

57 National Arts Fund SF 2 2021-22 & 2022-23


58 President Fund For Creative Writing SF 5 2018-19 to 2022-23
59 National Archives Research and OB 13 01.07.2009-31.12.2010
Publication Fund to
2022-23
TOTAL 190

Source: NAO records

456
FINANCIAL STATEMENTS NOT YET SUBMITTED TO NAO FOR AUDIT
Appendix II

Audited Financial Statements not yet Laid before the National Assembly

SN Statutory Body Client No. of Financial Date


Type Financial Year/ Certified*
Statements Period

PRIME MINISTER’S OFFICE, MINISTRY OF DEFENCE, HOME AFFAIRS AND EXTERNAL


COMMUNICATIONS AND MINISTRY FOR RODRIGUES, OUTER ISLANDS AND TERRITORIAL
INTEGRITY
1 Information and SB 1 2021-22 14.12.2023
Communication
Technologies Authority

DEPUTY PRIME MINISTERS OFFICE, MINISTRY OF HOUSING, LAND USE PLANNING AND
TOURISM
2 Mauritius Tourism SB 1 2021-22 02.05.2023
Promotion Authority

VICE PRIME MINISTERS'S OFFICE, MINISTRY OF EDUCATION, TERTIARY EDUCATION,


SCIENCE AND TECHNOLOGY

3 Mahatma Gandhi Institute SB 1 2021-22 10.04.2023

4 Mauritius Examinations SB 1 2021-22 24.04.2023


Syndicate
5 Private Secondary SB 1 2021-22 05.04.2023
Education Authority
6 Rajiv Gandhi Science SB 2 2017-18 18.10.2023
Centre Trust Fund
2018-19 14.12.2023
7 Sir Seewoosagur SB 2 2014 03.11.2022
Ramgoolam Foundation
2015 03.11.2022

8 Quality Assurance SB 1 2021-22 25.04.2023


Authority

MINISTRY OF ENERGY AND PUBLIC UTILITIES

9 Central Water Authority SB 3 2019-20 14.02.2022


2020-21 13.03.2023
2021-22 22.11.2023

MINISTRY OF SOCIAL INTEGRATION, SOCIAL SECURITY AND NATIONAL SOLIDARITY

10 Non-Governmental SF 7 2016-17 01.06.2018


Organisation Trust Fund to to
01.07.2022- 28.08.2023
03.02.2023

457
Audited Financial Statements not yet Laid before the National Assembly

SN Statutory Body Client No. of Financial Date


Type Financial Year/ Certified*
Statements Period
MINISTRY OF ENVIRONMENT, SOLID WASTE MANAGEMENT AND CLIMATE CHANGE

11 Beach Authority SB 2 2020-21 02.05.2022

2021-22 25.04.2023
MINISTRY OF AGRO-INDUSTRY AND FOOD SECURITY

12 Mauritius Meat Authority SB 1 2019-20 11.08.2021


13 Vallée D'Osterlog Endemic SB 2 2015 14.03.2023
Garden Foundation
01.01.2016- 13.07.2023
30.06.2017
MINISTRY OF LABOUR, HUMAN RESOURCE DEVELOPMENT AND TRAINING AND
COMMERCE AND CONSUMER PROTECTION

14 Manufacturing Sector SB 1 2019-20 15.07.2021


Workers Welfare Fund
SB
15 Mauritius Standard Bureau 1 2021-22 02.05.2023
SB 2015 09.12.2021
16 Trade Union Trust Fund 6
to to
2020-21 13.04.2023
MINISTRY OF GENDER EQUALITY AND FAMILY WELFARE

17 National Adoption Council SB 12 01.07.2009- 21.07.2023


31.12.2010 to
to 04.12.2023
2021-22
MINISTRY OF ARTS AND CULTURAL HERITAGE

18 Islamic Cultural Centre SB 4 2017-18 to 2021-22 03.06.2020


Trust Fund to
10.04.2023

19 Malcom de Chazal Trust SB 6 2003-04 & 31.05.2021


Fund 01.01.2016- to
30.06.2017 31.03.2023
to 2020-21

20 Mauritius Museums SB 1 2015 30.06.2022


Council

458
AUDITED FINANCIAL STATEMENTS NOT YET LAID BEFORE THE NATIONAL ASSEMBLY
Audited Financial Statements not yet Laid before the National Assembly

SN Statutory Body Client No. of Financial Date


Type Financial Year/ Certified*
Statements Period

MINISTRY OF ARTS AND CULTURAL HERITAGE (CONTINUED)

21 Mauritius Society of SB 4 01.01.2016- 22.11.2023


Authors 30.06.2017 &
2017-18 to 2019-20

22 Mauritius Tamil Cultural SB 9 2011 18.08.2021


Centre Trust to to
2019-20 30.06.2022
23 Mauritius Telugu Cultural SB 2 2020-21 19.04.2022
Centre Trust
2021-22 05.05.2023
24 National Art Gallery SB 4 2014 31.05.2018
to
to
14.05.2020
2017-18
25 National Heritage Fund SB 2 2018-19 16.05.2023

2019-20 11.07.2023

26 Telugu-speaking Union SB 5 2017-18 04.08.2021


to to
2021-22 21.06.2023
TOTAL 82

Source: National Assembly records

* Where a period is indicated, it implies that the Financial Statements were certified on different dates within
that period

459
AUDITED FINANCIAL STATEMENTS NOT YET LAID BEFORE THE NATIONAL ASSEMBLY
460
AUDITED FINANCIAL STATEMENTS NOT YET LAID BEFORE THE NATIONAL ASSEMBLY
Annex

ANNUAL STATEMENTS
ANNUAL STATEMENTS OF THE GOVERNMENT OF THE REPUBLIC OF MAURITIUS JUNE 2023

NOTES TO THE FINANCIAL STATEMENTS

1. GENERAL INFORMATION

The Republic of Mauritius is an island found in the Indian Ocean. It got its independence on 12 March 1968. The country has
a Westminster type of Parliamentary Government.

Under the Finance and Audit Act, 1973, as subsequently amended, it is the responsibility of the Accountant-General to prepare
the financial statements of the Government within six months of the close of every fiscal year. The Government refers to the
Budgetary Central Government.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2.1 Basis of Preparation

A Estimates

The Estimates (Budget) of the Government is appropriated by votes of expenditure on a cash basis, except for ‘cost of
borrowings’ which is appropriated on an accrual basis and ‘carry-over of capital expenditure’ where amount earmarked in a
fiscal year is carried over to a period not exceeding 3 months in the following fiscal year. The Estimates is classified by both
economic and functional classifications based, as far as possible, on the Government Finance Statistics Manual.

The Estimates is for the Budgetary Central Government, which includes Ministries and Government Departments. Transfers
to Special Funds are appropriated and included as expenditure in the approved Estimates in the year of expenditure. However,
the revenue and expenditure of the Special Funds deposited with the Accountant-General are not included in the approved
Estimates.

The approved Estimates covers the fiscal year from 01 July 2022 to 30 June 2023.

B Financial Statements
The financial statements have been prepared in accordance with Section 19 (3A) (b) of the Finance and Audit Act 1973, as
subsequently amended which requires these statements to be in compliance with International Public Sector Accounting
Standards (IPSAS) .

(i) Transitional Financial Statements


The date of adoption of IPSAS for the Government is 01 July 2022. Prior to the adoption of IPSAS, the financial
statements were prepared, as far as possible, in compliance with IPSAS. The first transitional IPSAS financial
statements of the Government in respect of the financial year 2022-2023 have been prepared in compliance with
IPSAS 33 – First-time Adoption of Accrual Basis IPSASs, which provides the first-time adopter with a transitional
period of three years for the recognition, measurement, presentation and disclosure of certain assets and liabilities.
The changes resulting from the adoption of the new basis is given in Note 40.

Government has taken advantage of the following transitional exemptions which affected fair presentation. As a
result, it is unable to make an explicit and unreserved statement of compliance with Accrual Basis IPSAS in
preparing its transitional IPSAS financial statements for the financial year 2022-2023.

12 TREASURY
ANNUAL STATEMENTS OF THE GOVERNMENT OF THE REPUBLIC OF MAURITIUS JUNE 2023

NOTES TO THE FINANCIAL STATEMENTS

The status of compliance with IPSAS issued to date is as per table below:

IPSAS Compliance Key Non Compliance Affect Fair Expected date of


Status / Transitional Presentation Compliance
Exemptions (Yes/No)
IPSAS 1—Presentation of
Financial Statements
(revised)
IPSAS 2—Cash Flow
Statements
IPSAS 3—Accounting
Policies, Changes in
Accounting Estimates and
Errors (revised)
IPSAS 4—The Effects of
Changes in Foreign
Exchange Rates (revised)
IPSAS 5—Borrowing Costs
IPSAS 9—Revenue from
Exchange Transactions
IPSAS 10—Financial N/A
Reporting in
Hyperinflationary
Economies
IPSAS 11—Construction N/A
Contracts
IPSAS 12—Inventories
(revised)
IPSAS 14—Events After the
Reporting Date (revised)
IPSAS 16—Investment N/A
Property (revised)
IPSAS 17—Property, Plant, Partial Measurement- Yes 2025-2026
and Equipment (revised) Impairment

Recognition and Yes 2025-2026


measurement of
Furniture, Fixtures and
Fittings

Use of deemed cost No 2025-2026

IPSAS 18—Segment Applicable 2025-2026


Reporting upon
Consolidation
IPSAS 19—Provisions,
Contingent Liabilities and
Contingent Assets
IPSAS 20—Related Party Partial Additional Disclosure Yes 2024-2025
Disclosures required
IPSAS 21—Impairment of x Indication of Yes 2025-2026
Non-Cash-Generating impairment yet to be
Assets assessed on an annual
basis
IPSAS 22—Disclosure of Applicable 2025-2026
Financial Information upon
About the General Consolidation
Government Sector
IPSAS 23—Revenue from Partial Revenue in respect of Yes 2023-2024
Non-Exchange Transactions cases under dispute have
(Taxes and Transfers) yet to be recognised
IPSAS 24—Presentation of
Budget Information in
Financial Statements

13 TREASURY
ANNUAL STATEMENTS OF THE GOVERNMENT OF THE REPUBLIC OF MAURITIUS JUNE 2023

NOTES TO THE FINANCIAL STATEMENTS

IPSAS Compliance Key Non Compliance Affect Fair Expected date of


Status / Transitional Presentation Compliance
Exemptions (Yes/No)
IPSAS 26 — Impairment of N/A
Cash-Generating Assets
IPSAS 27—Agriculture
IPSAS 28—Financial
Instruments: Presentation
IPSAS 29—Financial N/A Superseded by IPSAS
Instruments: Recognition 41 however Hedge
and Measurement accounting applies
under IPSAS 29
IPSAS 30—Financial Partial Full disclosure on No 2024-2025
Instruments: Disclosures Market risk
IPSAS 31—Intangible Partial Measurement - Yes 2025-2026
Assets Impairment

IPSAS 32—Service N/A


Concession Arrangements:
Grantor
IPSAS 33—First-time
Adoption of Accrual Basis
IPSASs
IPSAS 34—Separate Applicable 2025-2026
Financial Statements upon
Consolidation
IPSAS 35—Consolidated Applicable 2025-2026
Financial Statements upon
Consolidation
IPSAS 36—Investments in Applicable 2025-2026
Associates and Joint upon
Ventures Consolidation
IPSAS 37—Joint Applicable 2025-2026
Arrangements upon
Consolidation
IPSAS 38—Disclosures of Applicable 2025-2026
Interests in Other Entities upon
Consolidation
IPSAS 39—Employee Partial Recognition of Liabilities Yes 2024-2025
Benefits in respect of Civil Service
Family Protection
Scheme

Pension liabilities are


being valued on a 3 year Yes 2024-2025
basis instead annually

IPSAS 40—Public Sector N/A 2025-2026


Combinations
IPSAS 41—Financial Partial IMF SDR Deposit and Yes 2023-2024
Instruments allocation

Receivables from Non- Yes


Exchange Transactions in
respect cases under
dispute have yet to be
recognised
IPSAS 42— Social Benefits
IPSAS 43 -Leases Partial Lessor Accounting yet to Yes 2024-2025
be assessed (Effective Date 01
January 2025 Early
adoption 01 July
2022)
14 TREASURY
ANNUAL STATEMENTS OF THE GOVERNMENT OF THE REPUBLIC OF MAURITIUS JUNE 2023

NOTES TO THE FINANCIAL STATEMENTS

IPSAS Compliance Key Non Compliance Affect Fair Expected date of


Status / Transitional Presentation Compliance
Exemptions (Yes/No)
IPSAS 44- Non-current Early adoption 01 July
assets held for sale and 2022
discontinued operations Effective Date 01
January 2025
Complied
x Not complied
N/A Not applicable

It is expected that the Financial Statements of the Government will be fully compliant to IPSAS as from financial year 2025-
2026.

(ii) New Standards Issued but Not Yet Adopted

At the date of approval of these financial statements, the following IPSASs had already been issued but not yet effective:

IPSAS Effective date

IPSAS 45, Property, Plant, and Equipment 01 January 2025

IPSAS 46, Measurement 01 January 2025

IPSAS 47, Revenue 01 January 2026

IPSAS 48, Transfer Expenses 01 January 2026

IPSAS 49, Retirement Benefit Plans 01 January 2026

The new standards will be adopted when they become effective. The potential impact of the application of these new
standards is yet to be assessed.

(iii) Consistent Accounting Policies

The accounting policies have been applied consistently throughout the year. Where necessary and where it is practicable,
comparative figures have been restated to conform to changes in presentation, or in accounting policies in the current year.

15 TREASURY
ANNUAL STATEMENTS OF THE GOVERNMENT OF THE REPUBLIC OF MAURITIUS JUNE 2023

NOTES TO THE FINANCIAL STATEMENTS

2.2 Reporting Entity

The financial statements are for the Budgetary Central Government of the Republic of Mauritius, which comprises Ministries
and Government Departments and include bank balances and fixed deposits of Special Funds deposited with the Accountant-
General.

2.3 Reporting Period

The financial statements cover the financial year of the Government of Mauritius from 01 July 2022 to 30 June 2023.

2.4 Authorisation Date

The financial statements were authorised for issue on 29 December 2023 by Mr. S.D. Ramdeen, Accountant-General.

2.5 Foreign Currencies

(i) Functional and Presentation Currency

The financial statements are presented in Mauritian Rupees (Rs), rounded to the nearest rupee, which is also the
functional currency.

(ii) Transactions and Balances

Transactions in foreign currencies are initially translated at the foreign exchange rate at the date of the transaction.
Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-
end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Statement
of Financial Performance. Non-monetary assets and liabilities measured at historical cost in foreign currencies are
translated using the exchange rate at the date of the transaction. Non-monetary items that are measured at fair value in
a foreign currency are translated using the exchange rates at reporting date.

2.6 Cash and Cash Equivalents

Cash and cash equivalents comprise cash in hand, cash remitted to Ministries and Departments, cash balances with banks, both
local and overseas, deposits on call and highly liquid investments with an original maturity of three months or less, which are
readily convertible to known amounts of cash and are subject to insignificant risk of changes in value and cash held on behalf
of Special Funds.

2.7 Financial Assets

(i) Receivables from Non-Exchange Transactions and Receivables from Exchange Transactions

Receivables from Non-Exchange Transactions comprise receivables from taxation, fines, penalties and forfeits and social
contributions.
Receivables from Exchange Transactions comprise receivables from licences, finance income, rent and royalties, sales
of goods and services and other revenue.

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These are recognised when it is probable that the future economic benefits associated with the asset will flow to the
Government and can be measured reliably. Receivables are accounted for on an accrual basis.

Impairment of Receivables

A loss allowance for expected credit losses (ECL) is recognised on receivables from non-exchange transactions and
exchange transactions. An impairment gain or loss is recognised in Statement of Financial Performance representing
the amount of ECL (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is
required to be recognised.
The methodology of loss allowance on receivables has been determined using judgement, estimates and various
assumptions which are deemed to be reasonable and appropriate. For Ministries and Departments, factors/indicators
such as past trends, historic data, ageing analysis and long overdue payments for a period of more than 10 years have
been used to calculate the loss allowance.

For tax revenue, the methodology for the calculation of loss allowance is as follows:

% Debt unrecoverable

Over 10 years 20

Between 5 and 10 years 10

Between 1 and 5 years 2

Less than 1 year 0.5

The methodology for the calculation of loss allowance for less than 1 year has been revised from 0% (financial year 2021-
2022) to 0.5% (financial year 2022-2023) based on past experience.

(ii) Loans and Advances

Loans to Statutory bodies, Private bodies and Other bodies are recognised at amortised cost adjusted for expected credit
losses.

Advances are made under the authority of warrants issued under Section 6(1) of the Finance and Audit Act and are
recoverable within specified periods. Advances are recognised at amortised cost which is equivalent to cost as the effect of
discounting is not considered material.

(iii) Investments

These represent mainly investments made out of monies standing to the credit of the Consolidated Fund and Special Funds
in accordance with Sections 3(4)(a) and 9(3)(a) of the Finance and Audit Act.

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Initial Recognition of Investments

On initial recognition, investments are measured at fair value.

Classification and Subsequent Measurement of Investments

The table below shows the classification and subsequent measurement basis for the different categories of investments:

Category Classification and Subsequent Measurement Basis


Equity Investments (Quoted Investments, Unquoted Fair Value Through Surplus or Deficit
Investments, Equity Participation) and Redeemable
Preference Shares
Other Investments (Fixed Deposits) Amortised Cost

(a) Equity Investments and Redeemable Preference Shares Recognised at Fair Value Through Surplus or
Deficit

Investments classified as fair value through surplus or deficit are measured at fair value at the end of each
financial year, with any gains or losses on remeasurements recognised in surplus or deficit. Any dividend
earned on these investments is also recognised in surplus or deficit.

(b) Other Investments Recognised at Amortised Cost

Other investments (fixed deposits) held by Government and Special Funds at banks and financial institutions
have been reported at amortised cost with any movement recognised in surplus or deficit.

(iv) Other Financial Assets

(a) International Monetary Fund (IMF) Special Drawing Rights (SDR) Deposits

IMF SDR Deposits represent international reserve assets allocated to Mauritius by the IMF (SDR Holdings)
and held at the Bank of Mauritius.

IMF SDR Deposits are translated at year-end exchange rate with any gains or losses arising on re-
measurements recognised in the Statement of Financial Performance in the period in which they arise.

(b) IMF Reserve Tranche Position

The Reserve Tranche Position represents that portion of the quota of the Republic of Mauritius in IMF that
has been paid in reserve assets, i.e. SDRs or foreign currency acceptable to the IMF.

Reserve Tranche transactions, i.e. subscriptions, purchases and sales, are initially translated at the exchange
rate at the date of the transaction. At year-end, the SDR Reserve Tranche Position is translated using year-end
exchange rates and any gains or losses recognised in the Statement of Financial Performance as foreign
exchange gains or losses.

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2.8 Inventories
Inventories comprise mainly distributable items, consumables and agricultural produce and biological inventory.

Inventories meant for distribution at no charge or nominal charge or consumption in the production process of goods to be
distributed at no charge or for a nominal charge are measured at lower of cost and the estimated replacement cost. All other
inventories are measured at lower of cost or net realisable value. The cost has been determined using First In First Out Basis
(FIFO).

The cost of inventories from non-exchange transactions (donated inventories) is measured at its fair value at the date of
receipt.

Agricultural produce that has been harvested from biological assets are measured at fair value at the point of harvest. The
costs to sell relating to agricultural produce was considered to be insignificant. Any gains or losses arising on recognition of
agricultural produce at fair value are recognised in surplus or deficit.

2.9 Non-Current Assets Held for Sale and Discontinued Operations


The Government classifies a non-current asset (or disposal group) as held for sale when the following criteria are met:

its carrying amount will be recovered principally through a sale transaction rather than through continuing use;
the asset (or disposal group) must be available for immediate sale in its present condition subject only to terms that
are usual and customary for sales of such assets (or disposal groups); and
its sale must be highly probable.

A non-current asset (or disposal group) classified as held for sale is measured at the lower of its carrying amount and fair
value less costs to sell.

No depreciation or amortization is charged while the non-current asset (or disposal group) is classified as held for sale.

Discontinued Operations

A discontinued operation is a component of the Government that either has been disposed of, or is classified as held for sale,
and represents a significant component of the Government's operations. The Government will no longer have control over
the operations once the disposal is complete.

2.10 Prepayments
Prepayments are recognised as assets when payment for goods or services has been made in advance of obtaining a right to
access those goods or services.

2.11 Biological Assets


Biological assets are split into the following categories:

(i) Bearer Biological Assets (other than bearer plants);

Bearer Biological assets (other than bearer plants) are those biological assets that are used repeatedly or continuously for
more than one year in an agricultural activity. Examples of bearer biological assets include breeding stocks (birds, tortoise,
fish, ewes, rams, weaner calves and lambs that are used to replace old animals, bull, cows, heifers, ducks, broiler chicken)
and bees.

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(ii) Consumable Biological Assets

Consumable biological assets are those that are held for harvest as agricultural produce or for sale or distribution at no
charge or for a nominal charge as biological assets such as animals and plants for one-time use. Examples of consumable
biological assets are trees in a timber plantation forest, fish in farms, fresh water prawn juveniles, weaners calves and
lambs that are sold to farmers.

(iii) Agricultural Produce (classified under inventories).

Agricultural produce is the harvested produce of biological assets such as produce growing on bearer plants biological
assets.

The Government recognises biological assets when, and only when, it controls the assets as a result of past events, it is
probable that future economic benefits associated with such assets will flow to the Government and the fair value or cost of
the assets can be measured reliably.

Bearer biological assets (other than bearer plants) and consumable biological assets are measured at fair value, with any
change therein recognised in surplus or deficit. The costs to sell relating to biological assets have been considered to be
insignificant.

2.12 Property, Plant and Equipment


Property, Plant and Equipment include the following:

(i) Infrastructure, Plant and Equipment;


(ii) Land and Buildings;
(iii) Assets under Construction; and
(iv) Other Assets

Furniture, Fixtures and Fittings are currently being expensed.

Capital expenditure incurred under Special Funds for the Government has also been included.

(i) Infrastructure, Plant and Equipment

On initial recognition, Infrastructure, Plant and Equipment are stated at cost or deemed cost. Subsequently, they are
stated at cost less accumulated depreciation. Infrastructure, Plant and Equipment represent the cost of the following:

(a) Infrastructure Assets:


Roads - classified roads/motorways
Valuation Methodology
The value of the roads as at 30 June 2020 has been estimated by the Road Development Authority based on the
cost of constructing a road to the following standard:

SN Road Type Cost per km (MUR)


1 Motorways 120 million
2 A Roads 75 million
3 B Roads 65 million

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The value of roads constructed after 30 June 2020 has been measured at cost.
Dams
Bridges
Valuation Methodology
The value of bridges as at 30 June 2020 has been estimated by Road Development Authority by using the
benchmark of recently constructed bridges of similar nature and size, at that time.
The value of bridges constructed after 30 June 2020 has been measured at cost.
Stadiums and Gymnasiums; and
Other Structures.

Infrastructure assets do not include assets acquired by the Government on behalf of Other Public Sector Bodies.

(b) Transport Equipment:


Ships/Vessels;
Aircrafts/Helicopters; and
Other Vehicles.

(c) Other Machinery and Equipment:


Medical Equipment;
Office Equipment; and
Machinery.

(ii) Land and Buildings

Land

Land acquired prior to 2018 are estimated at deemed cost and those acquired after 2018 are estimated at cost.

The basis used by the Government Valuation Department of the deemed cost is as follows:

- State Lands leased by the Government for various purposes is a reduced rate of 1/3 of freehold value. The rate for
leased properties was based on use such as residential, agricultural, industrial and commercial. In cases where the
State Lands were leased for industrial use such as hotel, the rate per arpent obtained through analysis of sale of
leasehold rights of State Lands along the Pas Geometriques was adopted.
- Outer Islands have been recognised at deemed cost by the Government Valuation Department.
- For grazing land, 1/3 rate of market value of agricultural land as per region has been used for assessment.
- For Ex Tea Land, Agricultural Stations, MSPA Lands and land settlement, valuation has been based on freehold
agricultural sales evidence according to different regions.
- For National Parks used as touristic sites, a rate of Rs 2.5 million/arpent has been used.
- For campement sites, valuation has been carried out based on Pas Geometriques sales evidences (leasehold sites).
- Nature Reserve and Walks, Shooting and Fishing Leases and Guardienages have been valued at a uniform rate of
Rs 250,000/Arpent.
- Islets used as Nature Reserve have been valued at rates of Rs 200,000 and Rs 215,000 per Arpent depending on
regions. Public Beaches and Islets were valued based on rent paid per annum under the State Lands Act and were

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NOTES TO THE FINANCIAL STATEMENTS

capitalised in perpetuity at rate of 8%. For Islets leased as hotels i.e industrial site, valuation has been carried out
based on sales of leasehold rights along the Pas Geometriques.
- In respect of land acquired by Government for different purposes, the amount of compensation reported to the
Ministry of Housing and Land Use Planning has been used.

Buildings

Buildings represent residential and non-residential buildings, whether purchased, constructed or upgraded.

Buildings are initially recognised at cost and subsequently at cost less accumulated depreciation.

(iii) Assets under Construction


Assets in the course of construction are recognised at cost.

Depreciation of these assets commences when the assets are ready for their intended use.

(iv) Other Assets


Other Assets include Bearer Plants, Plants to maintain the Ecosystem and trained Sniffer Dogs used to detect illicit
substances. These are measured at fair value at end of each reporting date.

The fair value model has been used as it is considered to be more appropriate. “Others Assets” category falls under
IPSAS 17- Property, Plant, and Equipment as it meets the recognition criteria. However, IPSAS 17 cost and revaluation
measurement basis does not provide guidance regarding classes of assets undergoing physical transformation. As
similar assets are valued at fair value for instance under IPSAS 27- Agriculture, the fair value model has been applied
for biological assets which was deemed to be more appropriate in that context. Moreso, by valuing such assets at fair
value represents a fair presentation of their amounts recognised in the financial statements.

(v) Donated Assets


When an asset is acquired in a non-exchange transaction for nil or nominal consideration, the asset is initially measured
at its fair value at the date of acquisition and subsequently depreciated over its remaining useful life.

(vi) Depreciation
Depreciation on assets is charged on a straight-line basis over the useful life of the asset. Full year depreciation is
charged in the year of acquisition and none in year of disposal. Depreciation is charged at rates calculated to allocate
the cost or valuation of the asset over its remaining useful life, as follows:

Buildings 50 years
Infrastructure Assets 10 – 50 years
Transport Equipment 8 – 25 years
Other Machinery & Equipment 4 – 20 years

Land is not depreciated.

(vii) Borrowing Costs


Borrowing costs are recognised as an expense in the period in which they are incurred.

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(viii) Derecognition
Property, plant and equipment and/or any significant part of an asset are derecognised upon disposal. Any gain or loss
arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying
amount of the asset) is included in surplus or deficit when the asset is derecognised.

2.13 Leases
The Government assesses whether a contract is, or contains, a lease, at inception of the contract.

The Government leases various buildings, equipment and other assets under contract for periods ranging between 0 to 20
years which may be extended, as required.

A right-of-use asset (as stated below) and a corresponding lease liability (Refer to 2.18) are recognised with respect to all
lease arrangements in which it is the lessee, except for short-term leases (defined as leases with a lease term of 12 months
or less). For these short-term leases, the Government recognises the lease payments as an operating expense on a straight-
line basis over the term of the lease (Refer to 2.23 Expenses- (iii) Operating Expenses).

Right-of-Use Assets

The right-of-use assets comprise the initial measurement of the corresponding lease liability, and lease payments made at
commencement date.

These are subsequently measured at cost less accumulated depreciation. Right-of-use assets are depreciated over the shorter
period of lease term and useful life of the right-of-use asset.

2.14 Intangible Assets


Intangible assets include licenses, software and IT projects acquired, developed or under development.
Intangible assets acquired separately are initially recognised at cost. Following initial recognition, intangible assets are
carried at cost less any accumulated amortisation. Internally generated intangible assets are not capitalised and are expensed
in the Statement of Financial Performance in the period in which the expenditure is incurred.

Intangible assets are amortised using the straight-line method over a period of 8 years. Full year amortisation is charged in
the year of acquisition. Intangible assets which are still under development phase are recognised at cost and no amortisation
is charged until the asset is available for use.
Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal
proceeds and the carrying amount of the asset. Any surplus or deficit arising from the disposal is recognised in the Statement
of Financial Performance.

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2.15 Financial Liabilities

(i) Payables

Payables are recognised at amortised cost which is equivalent to cost as the effect of discounting is not considered
material. Payables comprise the following:

(a) ‘Cost of Borrowings’ consist of Accrued Interest on Re-opening of Government Bonds and Treasury Notes and
Management Charges payable;
(b) ‘Accounts Payable’ which are expenses incurred by the Government during the financial year but not yet
paid as at year end;
(c) ‘Retention Money on Contracts’ which is a percentage of the amount certified as due to the contractors,
deducted from the amount due and retained by the Government; and
(d) ‘Carry-over of Capital Expenditure’ which represents the balance of the provision earmarked for capital
projects in the current financial year payable within 3 months of the close of the financial year as per Section
3A of the Finance and Audit Act. The amount recognised in the Statement of Financial Position represents
that portion of the total provision carried-over in respect of which goods were received or works completed
by end of the financial year.

(ii) Deposits

Deposits are recognised at amortised cost which is equivalent to cost and includes the following:

(a) Money deposited with the Government under Section 8 of the Finance and Audit Act; and
(b) Deposits held with the Mauritius Revenue Authority for the purpose of disputes.

(iii) Government Debt

a) Domestic and External Debts (Excluding IMF SDR Allocations)

Initial Recognition and Measurement

Upon initial recognition, Domestic and External Debts are measured at fair value.

For concessionary loans, the difference between the loan proceeds and the fair value on initial recognition is accounted
as revenue from non-exchange transactions.

Subsequent Measurement

Treasury Bills and Treasury Certificates


Treasury Bills and Treasury Certificates are measured at amortised cost which is equivalent to cost plus accrued
interest, due to the short-term nature of these liabilities.

Treasury Notes, Government of Mauritius Bonds (including Inflation-Indexed Bonds), Domestic Loans and
External Debts
Subsequently, these instruments are measured at amortised cost using the effective interest method. Interest expense
and foreign exchange gains and losses are recognised in surplus or deficit. Amortised cost is calculated by taking into

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NOTES TO THE FINANCIAL STATEMENTS

account any discount or premium on acquisition of these instruments excluding commitment fees, management charges
and front-end fees.

Silver Bonds
Silver Bonds have no pre-defined maturity date as such these are measured at amortised cost, i.e, cost plus accrued
interest.

De-Recognition of Financial Liabilities

A financial liability (or a part of a financial liability) is removed from the Statement of Financial Position when, the
financial liability is extinguished, that is, when the obligation specified in the contract is discharged, waived, cancelled
or expired.

b) IMF SDR Allocations

IMF SDR Allocations represent obligations which arise through the participation of the Republic of Mauritius in the
SDR Department of the IMF and that are related to the allocation of SDR Holdings. SDR Holdings are international
reserve assets created by the IMF and allocated to members to supplement reserves.

IMF SDR Allocations are translated at year-end exchange rate with any gains or losses arising on re-measurements
recognised in the Statement of Financial Performance in the period in which they arise.

(iv) Financial Guarantee Liabilities

The Government provides financial guarantee as and when required in respect of loans contracted by Public Sector
Bodies. Such guarantees are given to the lender to reimburse the amount of any loss incurred in the event of non-
repayment of the respective loans by the Public Sector Bodies.

These financial guarantee contracts are initially recognised as a liability at fair value.

Subsequently, the liability is measured at the higher of the best estimate of the expenditure required to settle the
liability and the amount initially recognised less cumulative amortisation.

2.16 Social Benefits Liabilities

Social benefits are cash transfers provided to specific individuals and/or households who meet eligibility criteria, mitigate
the effect of social risks and address the needs of society as a whole.

(i) Initial Measurement

The Government recognises a liability for a social benefit scheme when it:

(a) has a present obligation for an outflow of resources that results from a past event; and
(b) the present obligation can be measured in a way that achieves the qualitative characteristics and takes into account
constraints on information.

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The initial measurement of the liability for a social benefit scheme is at the best estimate of the costs, that is the social benefit
payments, that the Government will incur in fulfilling the present obligations represented by the liability. The Government
also recognises an expense for the social benefit scheme at an amount equivalent to the amount of the liability.

(ii) Subsequent Measurement

The liability is reduced as social benefit payments are made and any difference between the cost of making the social benefit
payments and the carrying amount of the liability in respect of the social benefit scheme is recognised in surplus or deficit
in the period in which the liability is settled.

2.17 Provisions

Provisions are recognised when the Government has a present obligation as a result of a past event and it is probable that
the Government will be required to settle that obligation. Provisions are measured at the best estimate of the expenditure
required to settle the present obligation at the reporting date. The expense relating to any provision is presented in the
Statement of Financial Performance net of any reimbursement. Provisions are reviewed at the end of each reporting period
and adjusted to reflect the current best estimate.

2.18 Lease Liabilities

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement
date. Lease payments included in the measurement of the lease liability comprise fixed and variable lease payments.

In calculating the present value of lease payments, the Government has used the following discount rates:

Lease Term Discount Rate

Less or equal to 1 year No discounting

More than 1 year and less or equal to 5 years 5%

More than 5 years and less or equal to 10 years 5.5%

More than 10 years 6%

The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability and
by reducing the carrying amount to reflect the lease payments made.

In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a
change in the in-substance fixed lease payments or a change in the assessment to purchase the underlying asset.

2.19 Employee Benefit Obligations

(i) Short-Term Employee Benefits

Short-term employee benefits are benefits which are expected to be settled wholly before twelve months after the
reporting period in which the employee renders the related service.

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The short-term employee benefits consist of salaries, wages, salary compensation, overtime, travelling and transport,
allowances, end of year bonus, social security contributions, annual sick leave, current portion of passage benefits, and
allowance in lieu of passage benefits.

Short-term employee benefits are expensed in the period the employee renders the service and a liability is recognised
in respect of amount not paid at the end of the financial year for end of year bonus and annual sick leave.

Passage benefits represent the estimated liability of the Government in respect of passage benefits accrued to public
officers on permanent and pensionable establishment drawing a minimum monthly salary of Rs 27,400 or reckoning at
least five years’ service as per Pay Research Bureau (PRB) Report 2021. Passage benefits are earned at the rate of 5%
of the gross salaries annually. The carrying amount is re-measured each year end after taking into account amount paid
and earned during the year.

(ii) Post-Employment Benefits


(a) Defined Contribution Plan
Defined contribution plans are post-employment benefit plans under which the Government pays fixed contributions
into another entity, the State Insurance Company of Mauritius Limited (SICOM Ltd), for full time employees who joined
the Public Sector from 1 January 2013 onwards. The Government has no further payment obligations once the
contributions have been paid. These contributions are expensed in the period the employee renders the service and a
liability is recognised in respect of amount not paid at the end of the financial year.

(b) Defined Benefit Plans


The Government operates two Defined Benefit Plans, one for employees who joined service prior to the year 2013 and
one for Members of the Legislative Assembly.

Both plans are unfunded. The calculation of defined benefit obligations is performed on a 3 yearly basis by a qualified
actuary and will be aligned to the requirements of IPSAS 39 - Employee Benefits during the transitional period. Currently,
Government appoints SICOM Ltd as its actuary. The cost of providing benefits is calculated using the projected unit
method. The benefits are then discounted in order to determine the present value of the defined benefit obligations and
the current service cost.

Remeasurements, comprising actuarial gains and losses, are reflected in the Statement AC - Statement of Changes in Net
Assets or Equity.

(c) National Savings Fund


These contributions are expensed in the period the employee renders the service and a liability is recognised in respect
of amount not paid at the end of the financial year.

(iii) Other Long-Term Employee Benefits


Other long-term employee benefits comprise non-current portion of bank of sick leave, vacation leave upon retirement
and passage benefits.

Accruals in respect of other long-term employee benefits have not been discounted for the time value of money.

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NOTES TO THE FINANCIAL STATEMENTS

2.20 Contingent Assets and Contingent Liabilities

The Government does not recognise a contingent asset, but discloses in the notes to the financial statements details of a
possible asset whose existence is contingent on the occurrence or non-occurrence of one or more uncertain future events not
wholly within the control of the Government. Contingent assets are assessed continually to ensure that developments are
appropriately reflected in the notes to the financial statements. If it has become virtually certain that an inflow of economic
benefits or service potential will arise and the asset’s value can be measured reliably, the asset and the related revenue are
recognised in the financial statements of the period in which the change occurs.

The Government does not recognise a contingent liability, but discloses details of any contingencies in the notes to the
financial statements, unless the possibility of an outflow of resources embodying economic benefits or service potential is
remote.

2.21 Revenue from Non-Exchange Transactions

(i) Taxation
Taxation consists of Taxes on Income and Profits, Taxes on Property, Taxes on Goods and Services, Taxes on Financial
and Capital Transactions, Taxes on International Trade and Transactions and Other Taxes. The revenue recognition
policy adopted for each major type of taxation revenue is as follows:

Tax Type Revenue Recognition Point

Taxes on Income and 1. Income Tax- Individuals (self-assessment)


Profits
Revenue is recognised when the taxable activity takes place based on income tax returns
submitted by the taxpayer by 15 October of the following financial year.

Any revenue for the current financial year declared after 15 October or relating to prior
periods are recognised as revenue in the year that the returns are submitted.

Revenue recognised represents the net amount payable by the tax payer after any refund
and deduction of any Pay As You Earn (PAYE) or Tax Deduction at Source (TDS).

2. Income Tax- Companies and Bodies Corporate

Revenue is recognised when the taxable activity takes place based on tax returns
submitted by the entities by 31 October following the end of the financial year. For entities
which submit their tax return for the financial year after the 31 October, revenue for that
income year is estimated based on the tax return submitted for the previous financial year
end.

Any revenue relating to prior periods are recognised as revenue in the year of submission
of returns.

3. Pay As You Earn (PAYE) and Tax Deduction at Source (TDS)

Revenue is recognised in the financial year when the taxable activity takes place based on
returns submitted in the current financial year. PAYE and TDS for the month of June
submitted up to the cut-off date of 31 July of the following financial year are recognised as
revenue in the current financial year.

PAYE and TDS relating to any month prior to June that are declared after the end of the
current financial year and PAYE/TDS relating to any prior periods are recognised as
revenue in the year in which the returns are submitted.

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Tax Type Revenue Recognition Point

Taxes on Property Revenue is recognised on an accrual basis.

Taxes on Goods and 1. Value Added Tax (VAT)


Services and Taxes
on International Revenue is recognised in the year when the taxable activity takes place based on returns
relating to the current financial year submitted by the taxpayer during the financial year
Trade and
and returns pertaining to the month of June and Quarter April to June submitted by 31
Transactions July of the following financial year, net of any repayment.

VAT returns for the month of July to May and Quarters July to March declared after
financial year end and VAT relating to prior periods are recognised as revenue, net of any
repayment in the year in which the returns are submitted.

2. Custom and Excise Duties and Other taxes collected at Customs

Revenue is recognised in the financial year when the taxable activity takes place based
on the customs declarations submitted at customs.

3. Betting and Gaming Taxes

Revenue is recognised when taxes are declared in the tax payers returns during the
financial year.

4. Passenger Fee

Revenue is recognised when taxes are declared in the tax payers returns during the
financial year.

Other Taxes 1. Environment Protection Fee (EPF)

Revenue is recognised when taxes are declared in the tax payers returns during the
financial year.

2. Advertising Structure Fee and Special Levy on Banks

Revenue is recognised when taxes are declared in the tax payers returns during the
financial year.

Penalties, interests and surcharges arising in relation to taxation are recognised as revenue in the year when these charges
are applied.

Revenue on tax assessments not yet settled is recognised in the financial year in which the Assessment, Objection or Appeal
is finalized, that is, after the resolution of the dispute. This policy will be reviewed to align to the requirements of
relevant IPSAS within the transitional period.

(ii) Transfers
(a) Fines, Penalties and Forfeits
Fines, Penalties and Forfeits are recognised on an accrual basis.

(b) Grants and Aid


Grants and Aid consist of Grants from Foreign Governments, International Organisations and Other General Government
Units.

These grants are recognised on an accrual basis.

29 TREASURY
ANNUAL STATEMENTS OF THE GOVERNMENT OF THE REPUBLIC OF MAURITIUS JUNE 2023

NOTES TO THE FINANCIAL STATEMENTS

(c) Other Transfers

Other transfers include:

Transfer of surplus cash balances from statutory bodies and special funds and any contributions made by a party
to Government. These are recognised on a cash basis.

Contribution in respect of Tourism Development Projects on State Lands. These are recognised on cash basis.

Concessionary Loans
The difference between loan proceeds and the fair value of the loan on initial recognition is recognised as revenue.

Goods in-kind
Goods in-kind are measured at fair value as at the date of acquisition and recognised on obtaining control of the
asset if the transfer is free from conditions and it is probable that the economic benefits or service potential related
to the asset will flow to the Government and can be measured reliably.

Debt Forgiveness
Debts written off by Development Partners and Donor Agencies are recognised as revenue when the debt no longer
meets the definition of a liability.

(iii) Social Contributions

Social Contributions is recognised on an accrual basis.

2.22 Revenue from Exchange Transactions

Revenue from exchange transactions consist of Licences, Finance Income, Dividends, Rent and Royalties, Sales of Goods and
Services and Other Revenue.

Revenues are recognised on an accrual basis.

2.23 Expenses

(i) Subsidies and Grants

Subsidies and Grants to Local Authorities, Extra Budgetary Units, Rodrigues Regional Assembly and Other General
Government Units are recognised when payments are made.

Contributions to International/Regional Organisations are recognised in the period to which they relate.

(ii) Social Benefits

Social benefits are recognised in the period to which they relate.

30 TREASURY
ANNUAL STATEMENTS OF THE GOVERNMENT OF THE REPUBLIC OF MAURITIUS JUNE 2023

NOTES TO THE FINANCIAL STATEMENTS

(iii) Operating Expenses

These are recognised in the period when goods are received or services are rendered.
Operating expenses include leases which are short term, normally for one year and of low value in nature and are
expensed in surplus or deficit (Refer to 2.13 Leases).

(iv) Other Expenses

Other expenses, except for other transfer payments are recognised on an accrual basis.

All transfer payments, except those made to Regional/International Organisations and Insurance and Compensation
arising out of Government liability are recognised on a cash basis. Transfers made to Regional/International
Organisations are recognised in the period when goods are received or services are rendered.

(v) Finance Costs

Finance costs include interest expense on financial liabilities and leases and management charges.

Interest expense on financial liabilities are measured at amortised cost and are recognised using the effective interest
rate method.

Interest expense on lease liability is the amount that produces a constant periodic discount rate of interest on the
remaining balance of lease liability (Refer to 2.18 Lease Liabilities).

Management charges have been recognised on an accrual basis.

3. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

The preparation of financial statements includes the use of accounting estimates and management assumptions and
judgement. It also requires management to exercise its judgement in the process of applying accounting policies. The areas
involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant, include, but
are not limited to: estimation of Receivables , loss allowance for expected credit losses on Receivables, selection of useful lives
and the depreciation/amortisation method for Property Plant and Equipment, Intangible Assets and right-of-use assets,
estimating the fair value of certain categories of Property Plant and Equipment, Biological Assets, Investments, actuarial
measurement of post-employment benefit obligations, assumptions used in calculating the fair value of Government Debt for
which there is no observable market price, assumptions in measuring Loans at amortised cost and expect credit loss on Loans,
estimation to compute the value for Financial Guarantee Liabilities and discount rate for the computation of Lease Liabilities.
The actual results could differ from those estimates. Changes in estimates are reflected in the period in which they become
known.

31 TREASURY
ANNUAL STATEMENTS OF THE GOVERNMENT OF THE REPUBLIC OF MAURITIUS JUNE 2023

NOTES TO THE FINANCIAL STATEMENTS

4. CASH AND CASH EQUIVALENTS

The total cash and cash equivalents are made up as follows:

30 June 2023 30 June 2022


Rs Rs
Cash and Bank balances 21,379,023,951 18,928,625,991
Remittances 3,423,494,561 2,744,429,139
Total 24,802,518,512 21,673,055,130
Comprising :
Local currency balances 20,331,325,178 19,037,456,885
Foreign currency balances - at local banks 4,414,103,490 2,573,682,737
Foreign currency balances - at external banks 57,089,844 61,915,508

As at 30 June 2023, there is no significant cash and cash equivalents balances that are not available for use.
Cash and cash equivalents include an amount of Rs 14,747,580,422 (2022 (restated): Rs 15,991,244,313) for Special Funds.

Non-cash transactions
For non-cash transactions relating to loans, lease liabilities and Government Debt , refer to Note 7 Loans and Advances, Note
19 Lease Liabilities and Note 20 Government Debt respectively.

Non-cash transactions also include the following:


30 June 2023 30 June 2022
Rs Rs
Donated Property, Plant and Equipment 68,919,411 13,637,541
Conversion of Advances to Equity Instruments - 680,000,000
Others 55,201,448 26,755,652

5. RECEIVABLES FROM NON-EXCHANGE TRANSACTIONS

30 June 2023 30 June 2022


(Restated)
Rs Rs
Taxes on Income and Profits 11,089,274,627 9,859,386,370
Taxes on Property 15,786,267 16,079,254
Taxes on Goods and Services 9,475,496,721 7,749,512,299
Taxes on International Trade and Transactions 2,030,794 2,007,884
Other Taxes 173,870,749 155,590,237
Fines, Penalties and Forfeits 125,960,381 112,005,878
Social Contributions 1,070,127,766 1,018,299,607
Other Transfers - 62,898,000
21,952,547,305 18,975,779,529
Less: Loss Allowance (665,585,759) (593,519,713)
Total 21,286,961,546 18,382,259,816

- Within one year 10,012,450,181 8,232,278,491


- After one year 11,274,511,365 10,149,981,325
Total 21,286,961,546 18,382,259,816

32 TREASURY
ANNUAL STATEMENTS OF THE GOVERNMENT OF THE REPUBLIC OF MAURITIUS JUNE 2023

NOTES TO THE FINANCIAL STATEMENTS

The above excludes some Rs 31.8 billion representing disputed cases at the MRA. The outcome of such cases have not yet
been determined.
The ageing of receivables from non-exchange transactions are as follows:
30 June 2023 30 June 2022
(Restated)
Rs Rs
Current Due 11,626,719,499 9,194,388,626
Past Due:
Less than 1 year 627,699,136 491,304,039
Between 1 to 5 years 5,670,962,241 5,111,610,087
Between 5 to 10 years 2,017,655,704 2,438,278,813
Over 10 years 1,343,924,966 1,146,678,251
Total 21,286,961,546 18,382,259,816

During the financial year 2022-2023, an amount of Rs 200,350,804 (2022: Rs 339,654,694) was written off. Out of this
amount, an amount of Rs 14,371,974 (2022: Rs 18,135,133) was charged directly through surplus or deficit as no loss
allowance in respect of these amounts were previously recognised (Refer to Note 35). The remaining amount of
Rs 185,978,830 (2022: Rs 321,519,561) was written off against loss allowance (Refer to table below).

The changes in loss allowance in respect of receivables from non-exchange transactions are as follows:

30 June 2023 30 June 2022


Rs Rs
Loss Allowance as at 01 July 593,519,713 541,787,787
Receivables Write-Off (185,978,830) (321,519,561)
Impairment Loss 258,044,876 373,251,487
Loss Allowance as at 30 June 665,585,759 593,519,713

No loss allowance has been provided on the amount of Rs 593,743,247 in respect of Excise Duty and VAT on petroleum
products, due within one year as the importer has a period of 30 days from the date of importation to pay such taxes as per
the Customs Act. These amount were settled in July 2023.
As at 30 June 2022, an amount of Rs 62,898,000 was reclassified from Sales of Goods and Services (Exchange Transactions)
to Other Transfers (Non-Exchange Transactions), following new information received from Ministries/Departments.

6. RECEIVABLES FROM EXCHANGE TRANSACTIONS


30 June 2023 30 June 2022
(Restated)
Rs Rs
Licences 75,481,767 83,461,361
Finance Income 1,456,508 548,689
Rent and Royalties 1,151,065,553 1,096,698,099
Sales of Goods and Services 231,015,354 235,516,034
Other Revenue 307,190,461 195,488,838
1,766,209,643 1,611,713,021
Less: Loss Allowance (452,437,180) (141,227,622)
Total 1,313,772,463 1,470,485,399

33 TREASURY
ANNUAL STATEMENTS OF THE GOVERNMENT OF THE REPUBLIC OF MAURITIUS JUNE 2023

NOTES TO THE FINANCIAL STATEMENTS

30 June 2023 30 June 2022


(Restated)
Rs Rs
- Within one year 834,205,721 900,606,973
- After one year 479,566,742 569,878,426
Total 1,313,772,463 1,470,485,399

The ageing of receivables from exchange transactions are as follows:

30 June 2023 30 June 2022


(Restated)
Rs Rs
Current Due 158,022,125 44,447,903
Past Due:
Less than 1 year 91,700,994 92,554,780
Between 1 to 5 years 1,000,515,758 1,267,451,032
Between 5 to 10 years 54,059,297 51,403,358
Over 10 years 9,474,289 14,628,326
Total 1,313,772,463 1,470,485,399

During the financial year 2022-2023, an amount of Rs 41,107,255 (2022: Rs 53,049,473) was written off. Out of this amount,
an amount of Rs 16,602,780 (2022: Rs 2,600) was charged directly through surplus or deficit as no loss allowance in respect
of these amounts were previously recognised (Refer to Note 35). The remaining amount of Rs 24,504,475
(2022: Rs 53,046,873) was written off against loss allowance (Refer to table below).

The changes in the loss allowance in respect of receivables from exchange transactions are as follows:

30 June 2023 30 June 2022


(Restated)
Rs Rs
Loss Allowance as at 1 July 141,227,622 149,939,105
Receivables Write-Off (24,504,475) (53,046,873)
Impairment Loss 335,714,033 44,335,390
Loss Allowance as at 30 June 452,437,180 141,227,622
Refer to Note 39(i) for details on the prior year adjustments.

As at 30 June 2022, Sales of Goods and Services was amended from Rs 298,757,572 to Rs 235,516,034 due to the
reclassification of Rs 343,539 to Rent and Royalties (Exchange Transactions) and of Rs 62,898,000 to Other Transfers (Non-
Exchange Transactions), following new information received from Ministries /Departments. Subsequently, Rent and
Royalties was amended from Rs 1,096,354,560 to Rs 1,096,698,099.

34 TREASURY
ANNUAL STATEMENTS OF THE GOVERNMENT OF THE REPUBLIC OF MAURITIUS JUNE 2023

NOTES TO THE FINANCIAL STATEMENTS

7. LOANS AND ADVANCES

30 June 2023 30 June 2022

(Restated)
Current Non-Current Total Current Non-Current Total
Rs Rs Rs Rs Rs Rs
Loans 3,399,379,904 7,019,346,459 10,418,726,363 309,714,885 9,556,483,226 9,866,198,111

Advances 932,015,525 2,317,390,707 3,249,406,232 943,314,350 3,188,200,013 4,131,514,363

Total 4,331,395,429 9,336,737,166 13,668,132,595 1,253,029,235 12,744,683,239 13,997,712,474

Details of the total loans granted by the Government are provided in Statement M – Statement of all Outstanding Loans
financed from Revenue as at 30 June 2023.

(i) Loans

Loans to Statutory bodies, Private bodies and Other bodies have been recognised at amortised cost for the first time in the
financial statements for the financial year ended 30 June 2023 and prior years figures have been restated retrospectively.

A reconciliation of loan at amortised cost is shown below:


Rs
Balance at 30 June 2021 9,727,279,332
Prior year adjustments:
Adjustment with respect to recognising loans at amortised cost 2,782,756,134
Non-exchange expense (3,529,279,462)
Other adjustments 83,505,814
Balance at 30 June 2021 (restated) 9,064,261,818
Cash Flows:
Issue 627,748,084
Repayment (168,787,353)
Non-cash movement:
Non-exchange expense (113,300,962)
Movement in interest income 541,042,690
Capitalisation of interest 31,792,072
Gains on foreign exchange transactions and revaluation 19,165,975
Balance at 30 June 2022 (restated) 10,001,922,324
Cash Flows:
Issue 558,248,749
Repayment (376,985,795)
Non-cash movement:
Non-exchange expense (95,871,567)
Movement in interest income 563,627,532
Capitalisation of interest 40,384,897
Write off of loan (122,445,604)
Gains on foreign exchange transactions and revaluation 46,156,917
Balance at 30 June 2023 10,615,037,453

35 TREASURY
ANNUAL STATEMENTS OF THE GOVERNMENT OF THE REPUBLIC OF MAURITIUS JUNE 2023

NOTES TO THE FINANCIAL STATEMENTS

30 June 2023 30 June 2022


(Restated)
Rs Rs
Loans at Amortised Cost 10,615,037,453 10,001,922,324
Less: Expected Credit Loss Allowance (196,311,090) (135,724,213)
Loans as per Statement A- Statement of Financial Position 10,418,726,363 9,866,198,111

The ageing of the loans are as follows:


30 June 2023 30 June 2022

(Restated)
Rs Rs
Less than 1 year 3,399,379,904 309,714,885
Between 1 to 5 years 3,946,683,793 6,785,371,718
Between 5 to 10 years 2,293,844,729 2,450,306,494
Over 10 years 778,817,937 320,805,014

Total 10,418,726,363 9,866,198,111

The changes in expected credit loss allowance in respect of loans are as follows:
30 June 2023 30 June 2022
(Restated)
Rs Rs
Loss Allowance as at 01 July 135,724,213 124,745,888*
Loss Allowance for the year 60,586,877 10,978,325

Loss Allowance as at 30 June 196,311,090 135,724,213

* Expected Loss allowance on loans amounting to Rs 135,724,213 has been recognised for the first time in the financial
statements for the financial year 2021-2022 and Rs 124,745,888 for prior years.

The discount rate used in calculating the present value of loan is determined by reference to market yields on weighted
average rupee lending rate of banks, as prescribed by the Bank of Mauritius.

Refer to Note 39 (ii) for details on the prior year adjustments.

(ii) Advances

30 June 2023 30 June 2022


Rs Rs
Government Officers (include Motor Cars and Motor Cycles 2,072,587,400 1,993,265,596
Advances)
Parastatals/Local Government/Corporate Bodies 1,056,255,358 979,587,000
Ministries/Departments 120,563,474 1,158,661,767

Total 3,249,406,232 4,131,514,363

36 TREASURY
ANNUAL STATEMENTS OF THE GOVERNMENT OF THE REPUBLIC OF MAURITIUS JUNE 2023

NOTES TO THE FINANCIAL STATEMENTS

8. INVESTMENTS

Details of investments are shown below:

30 June 2023 30 June 2022

Rs Rs
Equity Investments 119,344,041,797 114,017,302,130
Redeemable Preference Shares 200,000,000 200,000,000
Other Investments 19,108,849,811 19,526,009,121

Total 138,652,891,608 133,743,311,251

- Within one year 17,431,994,054 19,437,062,045

- After one year 121,220,897,554 114,306,249,206

Total 138,652,891,608 133,743,311,251

(i) Equity Investments and Redeemable Preference Shares

Fair Value of Equity Investments and Redeemable Preference Shares

The Government uses the following hierarchy for determining and measuring the fair value of investments:
Level 1 – Quoted (unadjusted) market prices in active markets for identical assets or liabilities.
Level 2 – Other techniques for which all inputs are observable and have a significant effect on the recorded fair value,
either directly or indirectly; and
Level 3 – Techniques which use inputs which have a significant effect on the recorded fair value that are not based
on observable market data.

The level of fair value measurement used for each category of investment is shown in the table below:

Category Level Basis


Quoted Investments Level 1 Based on market prices of shares on the Stock Exchange
of Mauritius as at the end of the financial year.

Unquoted Investments Level 3 Based on the Net Asset figures from the latest audited
financial statements of investees except for Côte d’Or
International Racecourse and Entertainment Complex
Ltd, ISM Ltd and National Fishing Company Ltd, where
their costs have been deemed to be their market value
as no audited financial statements are available.

Equity Participation Level 3 Based on the Net Asset figure from the latest audited
financial statements of investees.

37 TREASURY
ANNUAL STATEMENTS OF THE GOVERNMENT OF THE REPUBLIC OF MAURITIUS JUNE 2023

NOTES TO THE FINANCIAL STATEMENTS

Category Level Basis

Redeemable Preference Level 3 Based on the value disclosed in the latest audited
Shares financial statements of investees.

The table below shows an analysis of equity investments and redeemable preference shares mandatorily measured at
fair value through surplus or deficit, by the level of hierarchy:

Level 1 Level 3 Total Carrying Total Fair Value


Amount
30 June 2023 Rs Rs Rs Rs

Quoted investments 672,946,849 - 672,946,849 672,946,849


Unquoted
investments - 88,945,434,775 88,945,434,775 88,945,434,775
Equity participation - 29,725,660,173 29,725,660,173 29,725,660,173
Redeemable
Preference Shares - 200,000,000 200,000,000 200,000,000
Total 672,946,849 118,871,094,948 119,544,041,797 119,544,041,797
30 June 2022
Quoted investments 717,819,495 - 717,819,495 717,819,495
Unquoted
investments - 81,835,154,830 81,835,154,830 81,835,154,830
Equity participation - 31,464,327,805 31,464,327,805 31,464,327,805
Redeemable
Preference Shares - 200,000,000 200,000,000 200,000,000
Total 717,819,495 113,499,482,635 114,217,302,130 114,217,302,130

There have been no transfers between Level 1 and 3 during the current year.

38 TREASURY
ANNUAL STATEMENTS OF THE GOVERNMENT OF THE REPUBLIC OF MAURITIUS JUNE 2023

NOTES TO THE FINANCIAL STATEMENTS

A reconciliation of fair value measurements in level 3 is set out below:


Rs
Balance at 30 June 2021 97,426,733,400
Additions during the year 30,942,091,665
Dividends capitalised 26,755,652
Conversion of advance into equity 680,000,000
Gains on foreign exchange transactions and revaluation 27,417,238
Disposal of investments (13,791,119,613)
Fair value loss on investment (1,812,395,707)
Balance at 30 June 2022 113,499,482,635
Additions during the year 1,472,697,332
Dividends capitalised 53,787,211
Gains on foreign exchange transactions and revaluation 57,399,544
Fair value gain on investment 3,787,728,226
Balance at 30 June 2023 118,871,094,948

(ii) Other Investments

Other Investments have been recognised at amortised cost.


A reconciliation of amortised cost is shown below:

Government Special Funds Total


Rs Rs Rs

Balance at 30 June 2021 599,414,752 10,958,814,319 11,558,229,071


Additions during the year - 8,002,000,000 8,002,000,000
Redemption of fixed deposits (4,400,000) (40,000,000) (44,400,000)
Movement in interest receivable 1,107,051 9,072,999 10,180,050

Balance at 30 June 2022 596,121,803 18,929,887,318 19,526,009,121


Additions during the year - - -
Redemption of fixed deposits (4,520,000) (550,000,000) (554,520,000)
Movement in interest receivable (382,675) 137,743,365 137,360,690

Balance at 30 June 2023 591,219,128 18,517,630,683 19,108,849,811

Additional details in respect of investments are provided in the Statement F - Statement of Investments as at 30 June 2023.

39 TREASURY
ANNUAL STATEMENTS OF THE GOVERNMENT OF THE REPUBLIC OF MAURITIUS JUNE 2023

NOTES TO THE FINANCIAL STATEMENTS

9. INVENTORIES

30 June 2023 30 June 2022


Rs Rs
Inventories consist of the following:
Inventories for Distribution and Consumption 3,165,156,324 2,583,421,318
Donated inventories 5,604,690 174,800,329
Agricultural Produce and Biological Inventory 36,433,100 37,498,259
Total 3,207,194,114 2,795,719,906

Inventories amounting to Rs 2,896,259 (2022: Rs 23,802,873) was written-off during the financial year 2022-2023.

Agricultural produce harvested during the period, determined at point of harvest amounted to Rs 2,987,059.

Agricultural Produce and Biological Inventory amounting to Rs 4,720,263 was written off during the financial year 2022-
2023.

Methods to determine the fair value of Agricultural Produce

The fair value of agricultural produce has been estimated by the Ministry of Agro Industry and Food Security and Ministry
of Blue Economy, Marine Resources, Fisheries and Shipping and is based mainly on market prices (i.e. price set by the
Ministry of Agro Industry and Food Security and Ministry of Blue Economy, Marine Resources, Fisheries and Shipping),
quantity and weight.

40 TREASURY
ANNUAL STATEMENTS OF THE GOVERNMENT OF THE REPUBLIC OF MAURITIUS JUNE 2023

NOTES TO THE FINANCIAL STATEMENTS

10. OTHER FINANCIAL ASSETS

30 June 2023 30 June 2022


Rs Rs

IMF SDR Deposits 12,100,561,354 12,509,787,642

IMF Reserve Tranche Position 2,540,585,086 2,418,161,031

Total 14,641,146,440 14,927,948,673

IMF SDR Deposits represent the rupee equivalent of the deposit of SDR 197,605,675 (2022: SDR 207,203,854) by the IMF to
the Republic of Mauritius.

IMF Reserve Tranche Position of the Republic of Mauritius with IMF stood at SDR 41,488,491 (2022: SDR 40,052,821), whilst
the Quota amounted to SDR 142,200,000 (2022: SDR 142,200,000).

The movement in the Reserve Tranche is as follows:

30 June 2023 30 June 2022

Rs Rs
Balance as at 01 July 2,418,161,031 2,123,814,085
Gain/(Loss) on Foreign Exchange Transactions and Revaluation 39,663,091 (16,155,956)
Transactions during the year 82,760,964 310,502,902

Balance as at 30 June 2,540,585,086 2,418,161,031

11. BIOLOGICAL ASSETS

30 June 2023 30 June 2022


(Restated)
Rs Rs
Bearer Biological Assets 10,454,201 8,710,834
Consumable Biological Assets (N1) 792,705 480,329
Total 11,246,906 9,191,163

N1: Consumable Biological Assets exclude Agricultural Produce. Agricultural Produce has been recognised under Inventories
(Refer to Note 9).

Reconciliation of Carrying Amount of Bearer Biological Assets


Rs
Carrying amount at 01 July 2022 7,893,984
Reclassification from Consumable Biological Assets to Bearer Biological Assets 816,850
Carrying amount at 01 July 2022 ( After Reclassification) 8,710,834
Increases due to purchases 1,549,450
Gain arising from changes in fair value attributable to physical changes 318,532
Transfer to inventories (124,615)
Carrying amount at 30 June 2023 10,454,201

41 TREASURY
ANNUAL STATEMENTS OF THE GOVERNMENT OF THE REPUBLIC OF MAURITIUS JUNE 2023

NOTES TO THE FINANCIAL STATEMENTS

Reconciliation of Carrying Amount of Consumable Biological Assets


Rs

Carrying amount at 01 July 2022 778,799,359

Reclassification from Consumable Biological Assets to Property, Plant and Equipment - Other Assets (777,502,180)
Reclassification from Consumable Biological Assets to Bearer Biological Assets (816,850)
Carrying amount at 01 July 2022 (After Reclassification) 480,329
Gain arising from changes in fair value attributable to physical and price changes 6,863,197

Transfer to inventories (6,550,821)


Carrying amount at 30 June 2023 792,705

Reclassifications have been made following new information received from Ministries/Departments.

Methods to determine the fair value of biological assets

The fair value of biological assets has been estimated by the Ministry of Agro Industry and Food Security and Ministry of Blue
Economy, Marine Resources, Fisheries and Shipping and is based mainly on market prices (i.e. price set by the Ministry of Agro
Industry and Food Security and Ministry of Blue Economy, Marine Resources, Fisheries and Shipping), quantity, weight and
height.

Restrictions and pledges for liabilities

During the financial year 2022-2023, there were no biological assets whose title was restricted and there were no restrictions
on the Government's use or capacity to sell biological assets.

During the financial year 2022-2023, no biological assets were pledged as security for liabilities.

Contractual Commitments

During the financial year 2022-2023, there were no contractual commitments for the acquisition or development of biological
assets.

Financial Risk Management Strategies

The Budgetary Central Government is exposed to financial risks arising from changes in price due to disease and pest risks,
climate risks ( e.g flood, drought, cyclones), environmental and other risks (e.g fire in forest, thefts, power failure of pumps).

The risk management strategies put in place are as follows:

1. Disease and Pest risks


These are managed by constant monitoring for early detection of diseases and pests and surveillance by veterinary services
to avoid propagation.

2. Climate risks
These are managed by planting plants with deep rooted system and suitable to agro climatic conditions and moving from
traditional open field cultivation to sheltered farming system.

3. Environmental and Other risks


These are managed by putting standby generators in place to supply electrical power in case of power failure, reporting thefts
and having constant watchmanship to ensure security of assets, creating fire breaks to reduce the spread of fire outbreaks.

42 TREASURY
ANNUAL STATEMENTS OF THE GOVERNMENT OF THE REPUBLIC OF MAURITIUS JUNE 2023
NOTES TO THE FINANCIAL STATEMENTS
12. PROPERTY, PLANT AND EQUIPMENT
Infrastructure, Plant and Equipment Land and Buildings
Other Asset Under
Infrastructure Transport
Machinery & Land Buildings Construction Other Assets TOTAL
Assets Equipment
Equipment (AUC)
Rs Rs Rs Rs Rs Rs Rs Rs
COST
At 30 June 2021 118,460,276,666 10,667,190,976 11,017,835,387 368,602,447,365 32,189,867,169 4,662,068,676 7,030,000 545,606,716,239
Additions 524,069,206 1,244,982,266 988,122,946 1,115,589,212 596,580,680 3,533,102,802 900,000 8,003,347,112
Transfer from
29,428,930 - 586,186 - 652,182,837 (682,197,953) - -
AUC
Disposal - (122,383,588) (10,163,371) - - - (560,000) (133,106,959)
Adjustment1 - - - 10,899,120,323 - - 780,180,180 11,679,300,503
At 30 June 2022
119,013,774,802 11,789,789,654 11,996,381,148 380,617,156,900 33,438,630,686 7,512,973,525 787,550,180 565,156,256,895
(Restated)
Additions 1,272,038,927 911,152,222 1,780,064,194 952,037,752 444,330,034 5,260,863,299 3,336,149 10,623,822,577
Transfer from
2,121,934,084 - - - 222,971,919 (2,344,906,003) - -
AUC
Transfer to
- - - - - (1,613,986) (1,613,986)
Inventories
Disposal - (26,825,848) (5,654,078) - - - (420,000) (32,899,926)
Fair Value Gain - - - - - - 827,185,537 827,185,537
At 30 June 2023 122,407,747,813 12,674,116,028 13,770,791,264 381,569,194,652 34,105,932,639 10,428,930,821 1,616,037,880 576,572,751,097
43 TREASURY
ANNUAL STATEMENTS OF THE GOVERNMENT OF THE REPUBLIC OF MAURITIUS JUNE 2023
NOTES TO THE FINANCIAL STATEMENTS
Infrastructure, Plant and Equipment Land and Buildings
Infrastructure Transport Other Land Buildings Asset Under Other Assets TOTAL
Assets Equipment Machinery & Construction
Equipment (AUC)
Rs Rs Rs Rs Rs Rs Rs Rs
DEPRECIATION
At 30 June 2021 10,109,359,861 5,494,657,234 7,200,484,888 - 8,097,065,383 - - 30,901,567,366
Charge for the year 2,468,352,056 644,092,054 967,457,541 - 668,671,463 - - 4,748,573,114
Disposal - (115,540,659) (9,572,144) - - - - (125,112,803)
At 30 June 2022 12,577,711,917 6,023,208,629 8,158,370,285 - 8,765,736,846 - - 35,525,027,677
Charge for the year 2,556,477,038 694,642,572 1,067,860,226 - 681,941,916 - - 5,000,921,752
Disposal - (26,825,848) (5,082,351) - - - (31,908,199)
At 30 June 2023 15,134,188,955 6,691,025,353 9,221,148,160 - 9,447,678,762 - - 40,494,041,230
Carrying Amounts
At 30 June
106,436,062,885 5,766,581,025 3,838,010,863 380,617,156,900 24,672,893,840 7,512,973,525 787,550,180 529,631,229,218
2022(Restated)
At 30 June 2023 107,273,558,858 5,983,090,675 4,549,643,104 381,569,194,652 24,658,253,877 10,428,930,821 1,616,037,880 536,078,709,867
Adjustment1 :
(a) Rs 10,899,120,323 relates to the Revised Land estimate, further to the Valuation Department Report as at 30 June 2022.
(b) An amount of Rs 777,502,180 has been reclassified from Consumable Biological Assets to “Other Assets” in respect of “Plants to maintain the Ecosystem”.
1. Other Assets:
(a) The value of Other Assets (Sniffer Dogs) as at 30 June 2023 has decreased to Rs 7,300,000. The net decrease of Rs 70,000 arised from disposal of Rs 420,000 and an increase in fair value of
Rs 350,000 during financial year 2022-2023.
(b) “Plants to maintain the Ecosytem” has increased in value during financial year 2022-2023 and amounts to Rs 826,835,537.
2. Donated assets amounting to Rs 68,363,395 (2022: Rs 10,754,444) have been recognised in the financial year 2022-2023.
3. Contractual commitments for the acquisition of Property, Plant and Equipment amounted to Rs 355,491,732 (2022: Rs 1,917,516,985), as at 30 June 2023.
44 TREASURY
ANNUAL STATEMENTS OF THE GOVERNMENT OF THE REPUBLIC OF MAURITIUS JUNE 2023

NOTES TO THE FINANCIAL STATEMENTS

13. RIGHT-OF-USE ASSETS

Land Buildings Other Total


Equipment
Rs Rs Rs Rs
COST
At 1 July 2022 173,811,040 2,059,294,630 10,242,991,105 12,476,096,775
Additions 27,734,499 429,698,220 215,396,862 672,829,581
Adjustment* - (6,119,911) - (6,119,911)
At 30 June 2023 201,545,539 2,482,872,939 10,458,387,967 13,142,806,445

ACCUMULATED DEPRECIATION
At 1 July 2022 16,812,242 997,972,827 1,814,778,119 2,829,563,188
Charge for the year 5,786,799 557,354,539 624,591,907 1,187,733,245
Adjustment* - (4,997,927) - (4,997,927)
At 30 June 2023 22,599,041 1,550,329,439 2,439,370,026 4,012,298,506

Carrying Amounts
At 30 June 2022 156,998,798 1,061,321,803 8,428,212,986 9,646,533,587
At 30 June 2023 178,946,498 932,543,500 8,019,017,941 9,130,507,939

*This refers to adjustment due to termination of contract by Ministry of Education, Tertiary Education , Science and Technology.

14. INTANGIBLE ASSETS

Licences & Asset Under Total


Software Development
(AUD)
Rs Rs Rs
COST
At 30 June 2021 2,880,770,918 247,617,392 3,128,388,310
Additions 186,023,897 167,527,344 353,551,241
Transfer from AUD 356,842,116 (356,842,116) -
At 30 June 2022 3,423,636,931 58,302,620 3,481,939,551
Additions 154,041,539 45,183,177 199,224,716
At 30 June 2023 3,577,678,470 103,485,797 3,681,164,267

AMORTISATION
At 30 June 2021 2,244,045,953 - 2,244,045,953
Charge for the year 223,120,277 - 223,120,277
At 30 June 2022 2,467,166,230 - 2,467,166,230
Charge for the year 204,457,231 - 204,457,231
At 30 June 2023 2,671,623,461 - 2,671,623,461

Carrying Amounts
At 30 June 2022 956,470,701 58,302,620 1,014,773,321
At 30 June 2023 906,055,009 103,485,797 1,009,540,806

Donated assets amounting to Rs 556,016 (2022: Rs 2,883,097) have been recognised in the financial year 2022-2023.

As at 30 June 2023, contractual commitments for the acquisition of Intangible Assets amounted to Rs 9,947,768
(2022: Rs 9,947,768).

45 TREASURY
ANNUAL STATEMENTS OF THE GOVERNMENT OF THE REPUBLIC OF MAURITIUS JUNE 2023

NOTES TO THE FINANCIAL STATEMENTS

15. PAYABLES

30 June 2023 30 June 2022


Rs Rs
Cost of Borrowings 89,107,683 36,090,982
Accounts Payable 1,634,352,175 884,183,173
Retention Money on Contracts 73,358,577 60,998,702
Carry-over of Capital Expenditure 121,905,876 194,440,980
Total 1,918,724,311 1,175,713,837

- Within one year 1,908,032,447 1,175,300,637


- After one year 10,691,864 413,200
Total 1,918,724,311 1,175,713,837

Cost of Borrowings is made up of accrued interest on re-opening of Government Securities and Management Charges payable as
at 30 June. Details are as follows:
30 June 2023 30 June 2022
Rs Rs
Accrued Interest on Re-opening of Government Securities:
- Government Bonds 50,776,000 16,962,000
- Treasury Notes 37,341,000 15,150,000
Management Charges payable on:
- Domestic Debts 115,864 1,251,638
- External Debts 874,819 2,727,344
Total 89,107,683 36,090,982

30 June 2023 30 June 2022


Rs Rs
- Within one year 89,107,683 36,090,982
- After one year - -
Total 89,107,683 36,090,982

16. DEPOSITS

30 June 2023 30 June 2022


(Restated)
Rs Rs
Grants 266,716,480 132,111,595
Deposits held with Mauritius Revenue Authority 644,858,613 382,665,480
Other Deposits 2,793,496,035 4,306,178,200
Total 3,705,071,128 4,820,955,275

- Within one year 2,684,952,599 4,042,767,046


- After one year 1,020,118,529 778,188,229
Total 3,705,071,128 4,820,955,275

46 TREASURY
ANNUAL STATEMENTS OF THE GOVERNMENT OF THE REPUBLIC OF MAURITIUS JUNE 2023

NOTES TO THE FINANCIAL STATEMENTS

The amount of liabilities recognised in respect of Grants that are subject to conditions are Rs 266,716,480
(2022: Rs 132,111,595).

The figure for ‘Other Deposits’ for 30 June 2022 was amended from Rs 4,444,693,860 to Rs 4,306,178,200 due to the
reclassification of Rodrigues Subsidy Account to Special Funds, following amendment made in the Finance and Audit Act.

17. SOCIAL BENEFITS LIABILITIES

30 June 2023 30 June 2022


Rs Rs
Balance as at 01 July 154,444,800 197,947,584
Payments made during the year (49,170,221,173) (37,758,702,940)
Charge for the year 49,311,170,868 37,715,200,156
Balance as at 30 June 295,394,495 154,444,800

- Within one year 295,394,495 154,444,800


- After one year - -
Total 295,394,495 154,444,800

Social benefits liabilities includes income support and other allowances paid to eligible recipients mainly under the Income Tax
Act, The Workers' Rights Act and The Additional Remuneration and Other Allowances Act, Social Aid Act and National Pensions
Act. These are mainly funded through budget appropriation but also includes financing from Special Funds.

18. PROVISIONS

The movement in Provisions relate to legal cases which are shown below:
30 June 2023 30 June 2022
Rs Rs
Balance as at 01 July 50,000,000 -
First time recognition - 50,000,000
Charge for the year 18,842,334 -
Payment (28,842,334) -
Balance as at 30 June 40,000,000 50,000,000

47 TREASURY
ANNUAL STATEMENTS OF THE GOVERNMENT OF THE REPUBLIC OF MAURITIUS JUNE 2023

NOTES TO THE FINANCIAL STATEMENTS

19. LEASE LIABILITIES

The carrying amounts of the lease liabilities and the movements during the year are shown below:

Rs
At 01 July 2022 11,456,743,848
Cash Flows:
Repayment (1,553,756,629)
Non-cash movement:
Additions 672,829,581
Interest Accrued 692,721,172
Adjustment due to termination of contract (1,169,873)
Balance as at 30 June 2023 11,267,368,099

30 June 2023 30 June 2022

Rs Rs
- Within one year 890,200,378 748,548,094
- After one year 10,377,167,721 10,708,195,754
Total 11,267,368,099 11,456,743,848

The maturity analysis of lease liabilities is as follows:

30 June 2023 30 June 2022


Rs Rs
Less than 1 year 890,200,378 748,548,094
Between 1 to 5 years 2,837,911,631 2,614,986,348
Between 5 to 10 years 3,188,681,690 3,062,652,184
Over 10 years 4,350,574,400 5,030,557,222
Total 11,267,368,099 11,456,743,848

Amounts Recognised in Statement of Financial Performance :

30 June 2023
Rs
Depreciation expense on Right-of-Use Asset 1,187,733,245
Interest expense on Lease Liabilities 692,721,172
Expense relating to short term leases not included in the above categories (Refer to Note 34) 210,067,595
Gain on contract termination of Right-of-Use Asset 47,888
Total 2,090,569,900

30 June 2023
Rs
The total cash outflow for leases for the financial year was :
Principal 861,035,457
Interest 692,721,172
Total 1,553,756,629

48 TREASURY
ANNUAL STATEMENTS OF THE GOVERNMENT OF THE REPUBLIC OF MAURITIUS JUNE 2023

NOTES TO THE FINANCIAL STATEMENTS

20. GOVERNMENT DEBT

30 June 2023 30 June 2022


Rs Rs
Domestic and External Debts (Excluding IMF SDR Allocations)
Government Securities 366,622,083,950 339,568,743,341
Domestic Loans 345,950,038 271,722,709
External Loans 63,840,958,516 52,806,862,824
IMF SDR Allocations 14,273,956,878 14,073,119,767
Total 445,082,949,382 406,720,448,641

- Within one year 80,363,057,428 75,292,727,805


- After one year 364,719,891,954 331,427,720,836
Total 445,082,949,382 406,720,448,641

Details of the total debt of the Government are provided in Statement J - Statement of Public Sector Debt as at 30 June 2023.

A. Domestic and External Debts (Excluding IMF SDR Allocations)


30 June 2023 30 June 2022
Rs Rs
Balance as at 01 July 392,647,328,874 380,880,889,867

Cash Flows:
- Issue/ Receipt 146,468,162,464 128,533,350,651
- Redeemed/ Repayment (112,285,158,036) (114,983,079,194)
Non-Cash Movement:
- Direct Payments 493,342,653 982,870,254
- Capitalised Interest on Silver Bonds 40,052,989 33,802,504
- Capitalisation of Interest 2,729,815 2,507,845
- Expenses Disbursed Directly out of the Loan Proceeds 2,934,087 3,045,068
- Losses/ (Gains) on Foreign Exchange Revaluation 2,102,357,007 (3,964,635,286)
- Other Changes (N1) 1,337,242,651 1,158,577,165
Balance as at 30 June 430,808,992,504 392,647,328,874

30 June 2023 30 June 2022


Rs Rs
- Within one year 80,363,057,428 75,292,727,805
- After one year 350,445,935,076 317,354,601,069
Total 430,808,992,504 392,647,328,874

49 TREASURY
ANNUAL STATEMENTS OF THE GOVERNMENT OF THE REPUBLIC OF MAURITIUS JUNE 2023

NOTES TO THE FINANCIAL STATEMENTS

The maturity analysis of domestic and external debt is as follows:

30 June 2023 30 June 2022


Rs Rs
Less than 1 year 80,363,057,428 75,292,727,805
Between 1 to 5 years 175,857,018,338 171,344,454,620
Between 5 to 10 years 80,419,605,967 67,288,512,142
Over 10 years 94,169,310,771 78,721,634,307

Total 430,808,992,504 392,647,328,874

N 1: Other changes pertain to non-exchange revenue and interest expense.

B. IMF SDR Allocations


The rupee equivalent of the total allocation of SDR 233,097,854 (2022: SDR 233,097,854) made to the Republic of Mauritius,
that is, Rs 14,273,956,878 as at 30 June 2023 (2022: Rs 14,073,119,767) is shown as liability and is also included in the
Statement J - Statement of Public Sector Debt as at 30 June 2023.

21. FINANCIAL GUARANTEE LIABILITIES

30 June 2023 30 June 2022


Rs Rs
Balance as at 1 July 2,905,829,220 2,499,191,188
Increases (New Guarantees) 425,685,771 520,327,393
Remeasurement (148,325,056) (130,723,494)
Expired* (14,161,218) (118,617,381)
Losses on Foreign Exchange Transactions 34,781,412 135,651,514
Balance as at 30 June 3,203,810,129 2,905,829,220

- Within one year 133,808,182 139,784,961


- After one year 3,070,001,947 2,766,044,259
Total 3,203,810,129 2,905,829,220

The maturity analysis of Financial Guarantee Liabilities is as follows:

30 June 2023 30 June 2022


Rs Rs
Less than 1 year 133,808,182 139,784,961
Between 1 to 5 years 1,775,775,654 1,510,145,381
Between 5 to 10 years 902,207,604 847,334,321
Over 10 years 392,018,689 408,564,557
Total 3,203,810,129 2,905,829,220

*Financial guarantee are derecognised when the obligation under the contract is discharged, cancelled or expired.

Details of the loan guaranteed by the Government as at 30 June 2023 are provided in Statement L - Statement of Contingent
Liabilities including details of any Loans, Bank Overdrafts or Credit Facilities Guaranteed by Government as at 30 June 2023.

50 TREASURY
ANNUAL STATEMENTS OF THE GOVERNMENT OF THE REPUBLIC OF MAURITIUS JUNE 2023

NOTES TO THE FINANCIAL STATEMENTS

22. EMPLOYEE BENEFIT OBLIGATIONS

30 June 2023 30 June 2022


Rs Rs
Liability in respect of Defined Benefit Plan (Refer to Note 23) 149,859,960,526 149,859,960,526
Accrued Sick Leave 11,270,781,223 9,427,078,682
Accrued Vacation Leave 10,953,604,782 9,654,518,879
Accrued Passage Benefits 4,741,483,377 4,041,397,096
Accrued Bonus 781,652,453 992,196,922
Total 177,607,482,361 173,975,152,105

- Within one year 2,924,227,542 2,658,597,248


- After one year 174,683,254,819 171,316,554,857
Total 177,607,482,361 173,975,152,105

23. DEFINED BENEFIT PLAN

Amounts Recognised in Statement of Financial Position at End of Year:


30 June 2023 30 June 2022
Rs Rs

Defined Benefit Obligations 149,859,960,526* 149,859,960,526


Fair Value of Plan Assets - -
Liability Recognised in Statement of Financial Position at End of
149,859,960,526 149,859,960,526
Year
*The last actuarial valuation was carried out as at 30 June 2022.

30 June 2023 30 June 2022


Rs Rs
Amounts Recognised in Statement of Financial Performance:
Charge to Surplus or Deficit 8,418,397,476 7,646,923,153

Amounts Recognised in Statement of Net Assets or Equity:


Remeasurements
Net Assets or Equity - 33,810,783,877

The plan is a defined benefit arrangement for the employees and it is unfunded.

Weighted average duration of the defined benefit obligations : 13 years


(Calculated as a % change in PV of liabilities for a 1% change in discount rate)
The plan is exposed to actuarial risks such as longevity risk, salary increase risk and pension increase risk.

The cost of providing the benefits is determined using the Projected Unit Method. The principal assumptions used for the
purpose of the actuarial valuation were as follows:

51 TREASURY
ANNUAL STATEMENTS OF THE GOVERNMENT OF THE REPUBLIC OF MAURITIUS JUNE 2023

NOTES TO THE FINANCIAL STATEMENTS

30 June 2023 30 June 2022


Discount Rate 5.15% 5.15%
Future Salary Increases 2.50% 2.50%
Future Pension Increases 1.50% 1.50%
Mortality before Retirement Nil Nil
Mortality in Retirement PA (90) Tables rated down by 2 years
Retirement Age 65 years

The discount rate is determined by reference to market yields on bonds for the year ended 30 June 2022.

Significant actuarial assumptions for determination of the defined benefit obligations are discount rate and expected salary
increase. The sensitivity analyses below have been determined based reasonably on possible changes of the assumptions
occurring as at 30 June 2022.

- If the discount rate would be 100 basis points (one percent) higher (lower), the defined benefit obligations would decrease
by Rs 17,144 million (increase by Rs 21,267 million) if all other assumptions were held unchanged.

- If the expected salary growth would increase (decrease) by 1%, the defined benefit obligations would increase by
Rs 8,880 million (decrease by Rs 7,590 million) if all assumptions were held unchanged.

- If life expectancy would increase (decrease) by one year, the defined benefit obligations would increase by Rs 4,483 million
(decrease by Rs 4,469 million) if all assumptions were held unchanged.

There may be interrelationships between the assumptions, especially between discount rate and expected salary increases,
given that both depend to a certain extent on expected inflation rates. The analysis above abstracts from these
interdependence between the assumptions.

24. NET ASSETS/EQUITY

The Net Assets/Equity is the net position of the Government after deducting all its liabilities from its assets at end of the year and
comprises the following:

a) Consolidated Fund (Cash basis);


b) Accumulated (Deficit)/Surplus; and
c) Special Funds.

The value of Net Assets/Equity of the Government as at 30 June 2023 amounted to Rs 120,740,005,506
(2022 (Restated): Rs 146,073,835,681). The movement in the Net Assets/Equity is provided in Statement AC – Statement of
Changes in Net Assets or Equity for the financial year 2022-2023.

(a) Consolidated Fund

Consolidated Fund has been established by Section 103 of the Constitution of the Republic of Mauritius. In accordance with
Section 3 of the Finance and Audit Act, the Consolidated Fund has, during the year under review been:

(i) credited with all the revenues of the Government and all other money properly accruing to it; and
(ii) charged only with expenses on the authority of warrant issued by the Minister of Finance.

52 TREASURY
ANNUAL STATEMENTS OF THE GOVERNMENT OF THE REPUBLIC OF MAURITIUS JUNE 2023

NOTES TO THE FINANCIAL STATEMENTS

According to Section 104(4) of the Constitution and Sections 3(4)(a) and 3(4)(b) of the Finance and Audit Act, the Consolidated
Fund should consider the following:
(a) The cash balance in respect of the Consolidated Fund (excluding Deposits and Special Funds) held at the Bank of Mauritius
or in a commercial bank for day to day cash requirements;
(b) Deposit of money with a bank; and
(c) Investments with a financial institution, fund or in such securities as may be approved by the Minister.

(b) Accumulated (Deficit)/Surplus

This represents the accumulated deficit to date for the Government after making necessary adjustments for accrual accounting
which is provided in Statement AC – Statement of Changes in Net Assets or Equity for the financial year 2022- 2023.

(c) Special Funds

These are monies deposited with the Accountant-General by the various funds set up under the Finance and Audit Act. The total
balance of Special Funds as at 30 June 2023 disclosed in Statement H – Statement of Special Funds Deposited with the Accountant-
General as at 30 June 2023 amounted to Rs 33,079,580,422 and comprise of fixed deposits at cost and cash balances to the amount
of Rs 18,332,000,000 and Rs 14,747,580,422 respectively. Details of Special Funds are provided in Statement H – Statement of
Special Funds Deposited with the Accountant-General as at 30 June 2023.

Fixed deposits of Special Funds are recognised at amortised cost in the financial statements. The total balance of Special Funds in
the Statement of Financial Position includes investments at amortised cost and amounted to Rs 33,265,211,104 (2022(Restated):
Rs 34,921,131,631). The balance of Special Funds as at 30 June 2022 was amended due to the reclassification of Rodrigues
Subsidy Account from Deposits to Special Funds, following amendment made in the Finance and Audit Act.

A reconciliation of the figure in fixed deposits by Special Funds disclosed in Statement H – Statement of Special Funds Deposited
with the Accountant-General as at 30 June 2023 to the figure reported under ‘Special Funds’ in Statement A – Statement of
Financial Position as at 30 June 2023 is shown as follows:

Year ended Year ended


30 June 2023 30 June 2022
Rs Rs

Opening Balance (at cost) 18,882,000,000 10,920,000,000

Additions during the year - 8,002,000,000

Redemption of fixed deposits (550,000,000) (40,000,000)

Closing Balance (at cost) 18,332,000,000 18,882,000,000

Total interest receivable 185,630,683 47,887,318

Closing Balance (at amortised cost) 18,517,630,683 18,929,887,318

53 TREASURY
ANNUAL STATEMENTS OF THE GOVERNMENT OF THE REPUBLIC OF MAURITIUS JUNE 2023

NOTES TO THE FINANCIAL STATEMENTS

25. TAXATION

Year Ended Year Ended


30 June 2023 30 June 2022
Rs Rs
Taxes on Income and Profits 42,623,382,444 33,959,578,569
Taxes on Property 40,119,562 33,772,617
Taxes on Goods and Services 83,413,991,861 69,216,078,724
Taxes on International Trade and Transactions 1,825,221,519 1,526,118,366
Other Taxes 1,747,492,190 1,430,860,309
Total 129,650,207,576 106,166,408,585

26. GRANTS AND AID

Year Ended Year Ended


30 June 2023 30 June 2022
Rs Rs
Grants from Foreign Governments 1,849,272,992 1,729,775,550
Grants from International Organisations 243,332,112 110,638,968
Grants from Other General Government Units 29,698,731 1,039,999,876
Total 2,122,303,835 2,880,414,394

27. OTHER TRANSFERS

Year Ended Year Ended


30 June 2023 30 June 2022
(Restated)
Rs Rs
Contribution in respect of Tourism Development Projects on State Lands 28,125,000 23,610,000
Concessionary Loans 334,849,978 239,845,251
Goods in-kind 90,597,171 285,267,995
Others 65,000,000 162,898,000
Total 518,572,149 711,621,246

54 TREASURY
ANNUAL STATEMENTS OF THE GOVERNMENT OF THE REPUBLIC OF MAURITIUS JUNE 2023

NOTES TO THE FINANCIAL STATEMENTS

28. LICENCES

Year Ended Year Ended


30 June 2023 30 June 2022
Rs Rs
Road Motor Vehicle Licences 1,806,832,770 1,802,014,171
Company and Other Licences 1,243,179,127 924,215,931
Total 3,050,011,897 2,726,230,102

29. DIVIDENDS

Year Ended Year Ended


30 June 2023 30 June 2022
Rs Rs
Dividends from Quoted and Unquoted Investments 491,763,961 652,434,612
Similar Distributions from Quasi Corporations 798,589,061 8,444,795,232
Total 1,290,353,022 9,097,229,844

30. OTHER REVENUE

Year Ended Year Ended


30 June 2023 30 June 2022
Rs Rs
Civil Service Family Protection Scheme 333,893,752 347,681,352
Miscellaneous Revenue 242,272,441 191,233,206
Total 576,166,193 538,914,558

31. EMPLOYEE COSTS

Year Ended Year Ended


30 June 2023 30 June 2022
Rs Rs
Wages, Salaries, Compensations and Allowances 29,240,923,846 29,214,988,589
Contributions to Defined Contribution Plan, Family Protection Scheme,
2,119,886,018 2,028,372,299
National Savings Fund and Social Contributions
Amount Recognised in respect of Defined Benefit Plans (Note 23) 8,418,397,476 7,646,923,153
Other Employee Benefits 9,560,219,710 8,188,702,619
Total 49,339,427,050 47,078,986,660

Other employee benefits include cash in lieu of vacation leave, cash in lieu of sick leave, passage benefits, cash in lieu of passage
benefits, gratuity, travelling and transport, staff welfare amongst others.

55 TREASURY
ANNUAL STATEMENTS OF THE GOVERNMENT OF THE REPUBLIC OF MAURITIUS JUNE 2023

NOTES TO THE FINANCIAL STATEMENTS

32. GRANTS

Year Ended Year Ended


30 June 2023 30 June 2022
Rs Rs
Donations and Contributions 544,975,693 426,298,673
Capital Grants 10,188,824,906 13,701,825,343
Current Grants 27,628,052,412 24,655,982,719
Total 38,361,853,011 38,784,106,735

33. SOCIAL BENEFITS

Year Ended Year Ended


30 June 2023 30 June 2022
Rs Rs
Pension (Retirement, Widow, Invalid and Others) 41,252,755,811 36,497,418,816
Other Social Benefits 8,058,415,057 1,217,781,340
Total 49,311,170,868 37,715,200,156

34. OPERATING EXPENSES

Year Ended Year Ended


30 June 2023 30 June 2022
Rs Rs
Cost of Utilities 939,236,139 857,641,984
Fuel and Oil 429,225,395 308,254,864
Rental Expense* 430,090,987 1,152,083,915
Office Expenses 126,805,029 122,320,626
Maintenance 1,526,378,454 1,310,032,264
Cleaning Services 915,498,277 955,525,606
Medical Supplies, Drugs and Scientific Equipment 2,999,260,928 2,999,005,005
Travelling and Mission Expenses 216,975,106 611,526,249
Other Operating Expenses 4,021,856,734 3,928,289,267
Total 11,605,327,049 12,244,679,780

* Rental Expense includes an amount of Rs 210,067,595 in respect of short-term lease.

56 TREASURY
ANNUAL STATEMENTS OF THE GOVERNMENT OF THE REPUBLIC OF MAURITIUS JUNE 2023

NOTES TO THE FINANCIAL STATEMENTS

35. OTHER EXPENSES

Year Ended Year Ended


30 June 2023 30 June 2022
(Restated)
Rs Rs
Transfers 3,448,660,695 2,548,019,485
Insurance 14,994,397 26,456,745
Compensation arising out of Government Liability 18,842,334 19,513,050
Refund/Payment of taxes icw projects and schemes financed by
192,901,121 212,908,682
Development Partners or under Special Programmes

Impairment Loss on Receivables from Exchange Transactions (N1) 335,714,033 41,872,126


Impairment Loss on Receivables from Non-Exchange Transactions
258,044,876 373,251,487
(N2)
Impairment Loss – Exchange Transactions (Local Loans) 60,586,877 10,978,325
Receivables from Exchange Transactions Write-Off (N1) 16,602,780 2,600
Receivables from Non-Exchange Transactions Write-Off (N2) 14,371,974 18,135,133
Loans, Advances and Inventories Write-Off 131,467,033 23,802,873
Concessionary Loans 95,871,567 113,300,962
Others 1,167,633,247 1,255,593,312
Total 5,755,690,934 4,643,834,780

N1: Refer to Note 6 – Receivables from Exchange Transactions


N2: Refer to Note 5 – Receivables from Non-Exchange Transactions

36. FINANCE COSTS

Year Ended Year Ended


30 June 2023 30 June 2022
Rs Rs
Interest Expense on Domestic Debt 14,247,490,432 12,490,015,511
Interest Expense on External Debt 1,926,785,832 1,896,900,390
Interest Expense on Lease 692,721,172 -
Management Charges 33,238,182 12,683,004
Total 16,900,235,618 14,399,598,905

57 TREASURY
ANNUAL STATEMENTS OF THE GOVERNMENT OF THE REPUBLIC OF MAURITIUS JUNE 2023

NOTES TO THE FINANCIAL STATEMENTS

37. TRANSACTIONS WITH INTERNATIONAL FINANCIAL ORGANISATIONS

(i) IMF- Treasury Notes

Pursuant to Section 4(3) of the International Financial Organisations Act, non-interest bearing demand notes have been
issued by the Government to the IMF, as part of the Quota subscription of the Republic of Mauritius. The value of the notes
as at 30 June 2023 stood at Rs 6,092,370,000 (2022: Rs 5,911,380,000).

(ii) Other International Financial Organisations

Pursuant to Section 4(3) of the International Financial Organisations Act, the Government has also issued non-negotiable
securities to the International Development Association. The value of securities as at 30 June 2023 stood at Rs 9,196,738
(2022: Rs 9,196,738).

38. COMPARISON OF BUDGET AND ACTUAL AMOUNTS

The approved budget is in respect of revenue estimates and Government expenditure, both recurrent and capital, appropriated
by votes for the financial year 2022-2023. The original estimates of expenditure amounting to Rs 152,000 million (2022:
Rs 145,700 million) were passed by the National Assembly on 29 June 2022 and Supplementary Estimates amounting to Rs 5,417
million (2022: Rs 9,500 million) were passed on 12 April 2023.

The Statements AE and AF - Statement of Comparison of Budget Estimates and Actual Amounts for the financial year 2022-2023
are prepared on the same basis as the budget.

(i) Explanation between Original and Total Provisions (Final Budget)

The amounts presented under ‘Total Provisions’ in - Statements AE and AF - Statement of Comparison of Budget Estimates and
Actual Amounts for the financial year 2022-2023 differed from the original estimates as there was a Supplementary Estimates
approved and also funds were transferred or re-allocated in accordance with the Virement Rules.

(ii) Explanation of material differences between Original Estimates and Actual Amounts

The table hereunder provides the explanation for material variances:

Budget line item Variance amount Variance Explanation


Rs percentage

The shortfall in recurrent revenue was mainly due


to the following:

Recurrent Revenue (1,801,297,242) (1.2%) (i) delays in the implementation of grant-


funded projects;

(ii) lower remittance of surplus cash balance


by the Financial Services Commission; and

58 TREASURY
ANNUAL STATEMENTS OF THE GOVERNMENT OF THE REPUBLIC OF MAURITIUS JUNE 2023

NOTES TO THE FINANCIAL STATEMENTS

Budget line item Variance amount Variance Explanation


Rs percentage

(iii) lower receipts under Contribution Sociale


Généralisée;
The lower revenue was partly offset by higher
collection from Income Tax and Value Added Tax.

Recurrent expenditure was higher mainly due to:

(i) increase in employee costs following the


award of the 2023 Salary Compensation of
Rs 1,000 monthly to employees as from
January 2023; higher request from Civil
Servants for encashment of their
accumulated passage benefits; and
payment of overtime;

(ii) increase in the prices of medical and


laboratory supplies;

(iii) increase in interest rates on Government


Securities following the surge in Key Rate;
Recurrent Expenditure 3,610,403,136 2.3%
(iv) contribution towards the Bus Companies
Recovery Account for the provision of
subsidy to bus operators on diesel price;

(v) increase in grants to Rodrigues Regional


Assembly, Local Authorities, Private
Secondary Education Authority and
Higher Education Commission to enable
them to meet their operating costs and
other financial obligations.
These higher expenditures were partly offset by
funds that were appropriated for contingencies as
well as underspending on gratuities and basic
pensions.

Capital revenue was higher due to grant received


Capital Revenue 161,156,421 9.4%
in respect of Metro Express Project.

Capital expenditure was higher mainly due to


transfers to Special Funds namely (i) COVID-19
Projects Development Fund to finance the gap in
the subsidy component in connection with the
construction of the Social Housing Project; (ii)
National Environment and Climate Change Fund
for construction of the waterfront project at Deux
Frères; and (iii) National Resilience Fund to
Capital Expenditure 1,669,069,618 9.1%
finance ongoing schemes.

These were partly offset by lower expenditure on


some capital projects such as construction of
roads, hospitals, Mauritius Disciplined Forces
Academy and Civil Service College; acquisition of
coastal radar surveillance system and
geotechnical equipment; pipe replacement and
water distribution programme; and other projects
59 TREASURY
ANNUAL STATEMENTS OF THE GOVERNMENT OF THE REPUBLIC OF MAURITIUS JUNE 2023

NOTES TO THE FINANCIAL STATEMENTS

Budget line item Variance amount Variance Explanation


Rs percentage

implemented by the Rodrigues Regional Assembly


and Local Authorities.

The increase in net acquisition of financial assets


was due to delays in the disposal of shares held by
Net Acquisition of Financial Government in certain companies. This was partly
20,525,237,330 107%
Assets offset by lower equity injection in connection with
the implementation of Metro Express Project and
Sewerage projects.

60 TREASURY
ANNUAL STATEMENTS OF THE GOVERNMENT OF THE REPUBLIC OF MAURITIUS JUNE 2023

NOTES TO THE FINANCIAL STATEMENTS

39. PRIOR YEAR ADJUSTMENTS

Prior year adjustments are required as a result of (i) changes in the accounting basis, following the adoption of IPSAS 33 – First-
time Adoption of Accrual Basis IPSASs, and (ii) reclassifications of certain amounts presented.

These adjustments have been made to the carrying amounts of items presented in the Statement A - Statement of Financial
Position as at 30 June 2023 and Statement AC - Statement of Changes in Net Assets or Equity for the financial year 2022-2023.
These changes have also resulted in the restatement of certain amounts presented in the Statements AA and AB - Statement of
Financial Performance for the financial year 2022-2023.

(i) Receivables from Exchange Transactions

Receivables from Exchange Transactions was overstated by Rs 127,637,176 in the financial year 2021-2022. The amount of
Rs 127,637,176 includes a balance of Rs 126,521,276 with regard to adjustment to recognising loans at amortised cost and an
amount of Rs 1,115,900 in respect of expected credit losses for the financial year 2021-2022. In this respect, relevant
adjustments have been made to restate the comparative figures. An adjustment of Rs 904,830,751 was made relating to the
transfer of arrears interest from receivables to loans for the financial year 2020-2021. An amount of Rs 2,463,263 in respect of
loss allowance on receivables has been recognised for the financial year 2020-2021.

(ii) Loans and Advances

Loans have been recognised at amortised cost instead of cost for the first time in the financial statements for the year ended
30 June 2023. In this respect, the prior year figures have been restated retrospectively by Rs 787,763,401 and Rs 422,468,180
for the financial year 2020-2021 and 2021-2022, respectively. The amount of Rs 787,763,401 includes a balance of
Rs 746,523,327 with regard to adjustment to recognising loans at amortised cost for the financial year 2020-2021 and an
amount of Rs 124,745,888 in respect of expected credit losses has been recognised for the first time for the financial year 2020-
2021.

(iii) Leases

During the financial year 2022-2023, the Government has made early adoption of IPSAS 43-Leases. This has resulted in
restatement of comparative figures for the first-time recognition of right-of-use assets amounting to Rs 9,646,533,587 and Lease
Liabilities amounting to Rs 11,456,743,848. The difference between the amount recognised for right-of-use assets and Lease
Liabilities has impacted on the Accumulated (deficit)/surplus.

The new accounting policies provide a fair presentation and more relevant information in accordance with international best
practice.

61 TREASURY
ANNUAL STATEMENTS OF THE GOVERNMENT OF THE REPUBLIC OF MAURITIUS JUNE 2023

NOTES TO THE FINANCIAL STATEMENTS

The effects of the above changes are illustrated below:

Increase/
30 June 2022 30 June 2022
(Decrease)
(Restated)
Rs Rs Rs

Statement of Financial Performance (Classification of Expenses by Nature) (extract)

Revenue
Revenue from Non-Exchange Transactions
Other Transfers* 648,723,246 62,898,000 711,621,246

Revenue from Exchange Transactions


Finance Income** 336,107,539 420,226,192 756,333,731
Rent and Royalties* 1,490,393,138 343,539 1,490,736,677
Sales of Goods and Services* 1,763,287,464 (63,241,539) 1,700,045,925
Expenses
Other Expenses** 4,518,439,592 125,395,188 4,643,834,780

* The Increase/(Decrease) for Other Transfers, Rent and Royalties and Sales of Goods and Services does not pertain to
restatements and are reclassification between line items.

Revenue from Non-Exchange Transactions


As at 30 June 2022, an amount of Rs 62,898,000 was reclassified from Sales of Goods and Services (Exchange Transactions) to
Other Transfers (Non-Exchange Transactions), following new information received from Ministries/Departments.

Revenue from Exchange Transactions

As at 30 June 2022, Sales of Goods and Services was amended from Rs 1,763,287,464 to Rs 1,700,045,925 due to the
reclassification of Rs 343,539 to Rent and Royalties (Exchange Transactions) and of Rs 62,898,000 to Other Transfers (Non-
Exchange Transactions), following new information received from Ministries /Departments. Subsequently, Rent and Royalties
was amended from Rs 1,490,393,138 to Rs 1,490,736,677.

**This relates to changes resulting from adoption from new accounting basis.

62 TREASURY
ANNUAL STATEMENTS OF THE GOVERNMENT OF THE REPUBLIC OF MAURITIUS JUNE 2023
NOTES TO THE FINANCIAL STATEMENTS
Increase/ Increase/
30 June 2022 30 June 2022 30 June 2021 01 July 2021
(Decrease) (Decrease)
(Adjusted) (Restated) (Restated)
Rs Rs Rs Rs Rs Rs
Statement of Financial Position (extract)
ASSETS
Receivables from Non-
Exchange Transactions 18,319,361,816 62,898,000 18,382,259,816 16,875,943,831 - 16,875,943,831
(N1)
Receivables from Exchange
1,661,020,575 (190,535,176) 1,470,485,399 2,183,739,765 (907,294,014) 1,276,445,751
Transactions (N2)*
Loan and Advances (N3)* 13,575,244,294 422,468,180 13,997,712,474 13,825,141,057 (787,763,401) 13,037,377,656
Biological Assets (N1) 786,693,343 (777,502,180) 9,191,163 - - -
Property, Plant and
528,853,727,038 777,502,180 529,631,229,218 514,705,148,873 - 514,705,148,873
Equipment (N1)
Rights-of-Use-Assets* - 9,646,533,587 9,646,533,587 - -
LIABILITIES
Deposits (N1) 4,959,470,935 (138,515,660) 4,820,955,275 8,424,941,885 - 8,424,941,885
Lease Liabilities* - 11,456,743,848 11,456,743,848 - - -
NET ASSETS/EQUITY
Accumulated (Deficit)/
25,201,717,095 (1,515,379,257) 23,686,337,838 69,231,335,545 (1,695,057,415) 67,536,278,130
Surplus
Special Funds (N1) 34,782,615,971 138,515,660 34,921,131,631 36,526,471,482 - 36,526,471,482
Notes:
N1 : The Increase/(Decrease) for the FY 2021-2022 are not restatements and pertains to reclassifications between line items of the Statement of Financial Position.
N2: The Decrease of Rs 190,535,176 for FY 2021-2022 comprise Rs 62,898,000 in respect of reclassification to Receivables from Non- Exchange Transactions and
Rs 127,637,176 which is a restatement in respect of recognition of loans and advances at amortised cost and expected credit losses.
N3: The Decrease of Rs 787,763,401 for FY 2020-2021 comprise Rs 746,523,327 with regard to adjustment to recognising loans at amortised cost, Rs 124,745,888 for expected
credit losses and Rs 83,505,814 in respect of reclassification of arrears interest from receivables to loan.
* includes changes resulting from adoption of new accounting basis.
63 TREASURY
ANNUAL STATEMENTS OF THE GOVERNMENT OF THE REPUBLIC OF MAURITIUS JUNE 2023

NOTES TO THE FINANCIAL STATEMENTS

40. IPSAS 33 - OPENING STATEMENTS

IPSAS adoption has been gradual since 2016 and thus the statements below show the opening balances as of 01 July 2022 and the
related reconciliations:

(i) Opening Statement of Financial Position as at 01 July 2022

Opening
Closing Balance Statement of
Previous IPSAS Financial
Accounting Policies Reclassifications Adjustments Position
30 June 2022 01 July 2022
Rs Rs Rs Rs
ASSETS
CURRENT ASSETS
Cash and Cash Equivalents 21,673,055,130 - - 21,673,055,130
Receivables from Non-Exchange 8,396,838,180 (164,559,689) - 8,232,278,491
Transactions
Receivables from Exchange 276,255,673 - 624,351,300 900,606,973
Transactions
Loans and Advances 3,131,732,958 - (1,878,703,723) 1,253,029,235
Investments 19,432,000,104 5,061,941 - 19,437,062,045
Inventories 2,795,719,906 - - 2,795,719,906
Prepayments 40,903,469 - - 40,903,469
55,746,505,420 (159,497,748) (1,254,352,423) 54,332,655,249

NON-CURRENT ASSETS

Receivables from Non-Exchange 9,922,523,636 227,457,689 - 10,149,981,325


Transactions
Receivables from Exchange 2,292,058,916 (62,898,000) (1,659,282,490) 569,878,426
Transactions
Loans and Advances 11,231,274,737 - 1,513,408,502 12,744,683,239
Investments 114,311,311,147 (5,061,941) - 114,306,249,206
Other Financial Assets 14,927,948,673 - - 14,927,948,673
Biological Assets 786,693,343 (777,502,180) - 9,191,163
Property, Plant and Equipment 528,853,727,038 777,502,180 - 529,631,229,218
Right-of-Use Assets - - 9,646,533,587 9,646,533,587
Intangible Assets 1,014,773,321 - - 1,014,773,321
683,340,310,811 159,497,748 9,500,659,599 693,000,468,158

Total Assets 739,086,816,231 - 8,246,307,176 747,333,123,407

64 TREASURY
ANNUAL STATEMENTS OF THE GOVERNMENT OF THE REPUBLIC OF MAURITIUS JUNE 2023

NOTES TO THE FINANCIAL STATEMENTS

Opening
Closing Balance
Statement of
Previous IPSAS
Financial
Accounting Policies Reclassifications Adjustments
Position
30 June 2022 01 July 2022
Rs Rs Rs Rs
LIABILITIES

CURRENT LIABILITIES

Payables 1,175,300,637 - - 1,175,300,637


Deposits 4,181,282,706 (138,515,660) - 4,042,767,046
Social Benefits Liabilities 154,444,800 - - 154,444,800
Provisions 50,000,000 - - 50,000,000
Lease Liabilities - - 748,548,094 748,548,094
Government Debt 75,292,727,805 - - 75,292,727,805
Financial Guarantee Liabilities 139,784,961 - - 139,784,961
Employee Benefit Obligations 2,658,597,248 - - 2,658,597,248
83,652,138,157 (138,515,660) 748,548,094 84,262,170,591

NON-CURRENT LIABILITIES

Payables 413,200 - - 413,200


Deposits 778,188,229 - - 778,188,229
Lease Liabilities - - 10,708,195,754 10,708,195,754
Government Debt 331,427,720,836 - - 331,427,720,836
Financial Guarantee Liabilities 2,766,044,259 - - 2,766,044,259
Employee Benefit Obligations 171,316,554,857 - - 171,316,554,857
506,288,921,381 - 10,708,195,754 516,997,117,135

Total Liabilities 589,941,059,538 (138,515,660) 11,456,743,848 601,259,287,726

Net Assets 149,145,756,693 138,515,660 (3,210,436,672) 146,073,835,681

NET ASSETS/EQUITY

Consolidated Fund 87,466,366,212 - - 87,466,366,212


Accumulated Surplus 26,896,774,510 - (3,210,436,672) 23,686,337,838
Special Funds 34,782,615,971 138,515,660 - 34,921,131,631
149,145,756,693 138,515,660 (3,210,436,672) 146,073,835,681

65 TREASURY
ANNUAL STATEMENTS OF THE GOVERNMENT OF THE REPUBLIC OF MAURITIUS JUNE 2023

NOTES TO THE FINANCIAL STATEMENTS

(ii) Reconciliation of Surplus on 01 July 2022

Surplus or deficit
on 01 July 2022
Rs

Surplus as at 30 June 2022 as reported under previous basis of accounting 419,822,701


Recognition of finance income on Loans to Statutory bodies, Private bodies and Other bodies at
420,226,192
amortised cost
Recognition of concessionary portion on Loans to Statutory bodies, Private bodies and Other bodies (113,300,962)

Recognition of expected credit losses on Loans to Statutory bodies and Other bodies (10,978,325)

Recognition of expected credit losses on Receivables (Penalty Fee on Loans) (1,115,901)

Restated surplus as on 01 July 2022 714,653,705

(iii) Reconciliation of net assets/equity as on 01 July 2022


Net assets/equity
as on 01 July
2022
Rs
Opening balance of net assets/equity as on 30 June 2022 reported under previous basis of
26,896,774,510
accounting
First-time recognition of Loans at Amortised Cost (1,567,848,264)

First-time recognition of Expected Credit Losses on Loans (124,745,888)

First-time recognition of Expected Credit Losses on Receivables (Penalty Fee on Loans) (2,463,263)

First-time recognition of Right-of-Use Assets 9,646,533,587

First-time recognition of Lease Liabilities (11,456,743,848)


Movement in restated opening surplus (Refer to Note 40 (ii) on reconciliation of surplus on 01 July
294,831,004
2022)
Restated opening balance of net assets/equity as on 01 July 2022 23,686,337,838

Refer to Note 39 – Prior year adjustments for explanation on adjustments relating to the change in accounting basis.

66 TREASURY
ANNUAL STATEMENTS OF THE GOVERNMENT OF THE REPUBLIC OF MAURITIUS JUNE 2023

NOTES TO THE FINANCIAL STATEMENTS

41. RECONCILIATION: BUDGETARY RESULT WITH DEFICIT

Year Ended Year Ended


30 June 2023 30 June 2022
(Restated)
Rs Rs
Budget Balance as presented in the Statement of (29,781,230,575) (29,041,985,835)
Comparison of Budget Estimates and Actual
Amounts (Statement AF)
Net movement in Prepayments 14,982,584 4,446,268
Net movement in Payables (990,042,988) 430,345,786
Net movement in Inventories 403,717,287 269,799,104
Depreciation and Amortisation (6,393,112,228) (4,971,693,391)
Net Movement in Investments 3,742,463,084 23,511,400,060
(Loss)/Gain on Foreign Exchange Transactions and (1,867,660,921) 4,004,640,489
Revaluation
Subscriptions to International Organisations (187,873,949) (90,502,902)
Capitalisation of Dividends 53,796,541 26,755,652
Net movement in Loan to Statutory Bodies, Private 359,270,070 327,876,931
Bodies and Other Bodies
Net movement in Receivables 2,486,160,957 1,609,479,273
Net Movement in Non-Financial Assets 9,952,817,077 8,016,569,404
Net movement in Carry-Over of Capital (153,667,875) (78,358,313)
Expenditure
Net Movement in Employee Benefits Obligations (3,632,330,256) (2,136,134,249)
Net movement in Financial Guarantee Liabilities (263,199,497) (270,986,517)
Net movement in Government Debt (231,439,415) (896,998,055)
Net movement in Provisions 10,000,000 -
Net movement in Leases 861,083,345 -
Net movement in Biological Assets 8,731,179 -

(Deficit)/Surplus as presented in the Statement of


Financial Performance (Statements AA & AB) (25,607,535,580) 714,653,705

67 TREASURY
ANNUAL STATEMENTS OF THE GOVERNMENT OF THE REPUBLIC OF MAURITIUS JUNE 2023

NOTES TO THE FINANCIAL STATEMENTS

42. RECONCILIATION: DEFICIT WITH NET CASH FLOWS FROM OPERATING ACTIVITIES

Year Ended Year Ended


30 June 2023 30 June 2022
(Restated)

Rs Rs
(Deficit)/Surplus as presented in the
Statement of Financial Performance (25,607,535,580) 714,653,705
(Statements AA & AB)
(Gains)/Losses Adjustments

Adjustments in respect of Foreign Exchange


Transactions and Revaluation 1,867,660,921 (4,004,640,489)
1,867,660,921 (4,004,640,489)
Non-Cash Adjustments
Donations - (119,832,946)
Net Movement in Loan to Statutory Bodies, (447,651,787) (327,876,931)
Private bodies and Other bodies
Net Movement in Receivables (2,486,160,957) (1,609,479,274)
Capitalisation of Dividends (53,796,541) (26,755,652)
Loan and Advances Written-Off 123,844,305 57,540
Net Movement in Investments (3,742,463,084) (23,511,400,060)
Depreciation and Amortisation 6,393,112,228 4,971,693,391
Net Movement in Non-Financial Assets (930,713,304) (59,119,597)
Net Movement in Employee Benefits 3,632,330,256 2,136,134,249
Obligations
Interest and other Adjustments in respect of 1,456,647,087 1,236,034,900
Government Debt
Net Movement in Financial Guarantee 263,199,497 270,986,517
Liabilities
Net Movement in Leases (861,083,345) -
Net Movement in Provisions (10,000,000) -
Net Movement in Biological Assets (8,731,179) -
3,328,533,176 (17,039,557,863)
Working Capital Movement
Decrease/(Increase) in Advances 879,792,551 (1,027,177,758)
(Increase) in Inventories (403,717,287) (269,799,104)
(Increase) in Prepayments (14,982,584) (4,446,268)
Increase/(Decrease) in Payables 864,045,597 (377,276,627)
(Decrease) in Deposits (1,378,077,282) (3,676,814,189)
Increase/(Decrease) in Social Benefits 140,949,695 (43,502,784)
Liabilities
(Decrease) in Special Funds (1,793,663,891) (1,752,928,510)
(1,705,653,201) (7,151,945,240)

Classification Adjustments
Dividends (1,236,556,481) (9,070,474,192)
Repayment of Lease Liabilities 861,035,457 -
(375,521,024) (9,070,474,192)

Net Cash flows from Operating Activities (22,492,515,708) (36,551,964,079)

68 TREASURY
ANNUAL STATEMENTS OF THE GOVERNMENT OF THE REPUBLIC OF MAURITIUS JUNE 2023

NOTES TO THE FINANCIAL STATEMENTS

43. RECONCILIATION: BUDGETARY RESULT WITH NET CASH FLOW

Operating Investing Financing


Total
Activities Activities Activities
Rs Rs Rs Rs
Budget Balance as presented in the (20,638,710,369) (9,142,520,206) - (29,781,230,575)
Statement of Comparison of Budget
Estimates and Actual Amounts
(Statement AF)
Basis Differences
Carry-over of Capital Expenditure (144,735,511) 57,386,022 - (87,349,489)
Interest Accrued 1,198,872,924 - - 1,198,872,924
Interest Capitalised 5,663,902 - - 5,663,902
Advances decrease 881,191,252 916,880 - 882,108,132
Deposits (decrease) (1,378,077,282) - - (1,378,077,282)
Payables increase 6,019,939 - - 6,019,939
Investments and Other Securities - (8,175,875,540) - (8,175,875,540)
(increase)
Proceeds from sale of investments - 7,722,814,312 - 7,722,814,312
Loans to Statutory, Private and - (181,165,151) - (181,165,151)
Other Bodies (increase)
Net movement in Non-Financial (120,416,433) 120,416,433 - -
Assets
Dividends (1,236,556,481) 1,236,556,481 - -
Subscriptions to International (187,873,949) - - (187,873,949)
Organisations
Borrowings increase - - 34,183,004,427 34,183,004,427
Direct Payment by Funding 20,670,847 472,671,805 - 493,342,652
Agency
Net movement in Leases 861,035,457 - (861,035,457) -
Loans written-off 34,063,887 - - 34,063,887

Entity Differences
Special Funds (net) (1,793,663,891) - - (1,793,663,891)

Actual Amount as presented in the


Statement of Cash Flow (Statement (22,492,515,708) (7,888,798,964) 33,321,968,970 2,940,654,298
AD)

69 TREASURY
ANNUAL STATEMENTS OF THE GOVERNMENT OF THE REPUBLIC OF MAURITIUS JUNE 2023

NOTES TO THE FINANCIAL STATEMENTS

44. FINANCIAL INSTRUMENTS

A. CATEGORIES OF FINANCIAL INSTRUMENTS

The table below shows the classification and measurements basis for the different categories of financial assets and their respective
balances:

At 30 June 2023

Fair Value
Cash and Cash
Category Cost Amortised Cost Through Surplus Total
Equivalents
or Deficit

Rs Rs Rs Rs Rs
Cash and Cash
24,802,518,512 - - - 24,802,518,512
Equivalents
Receivables from
Non-Exchange - 21,286,961,546 - - 21,286,961,546
Transactions
Receivables from
Exchange - 1,313,772,463 - - 1,313,772,463
Transactions
Loans and Advances - 13,668,132,595 - 13,668,132,595
Investments
Equity Investments
(Quoted
Investments,
Unquoted - - - 119,344,041,797 119,344,041,797
Investments,
Equity
Participation)
Redeemable
- - - 200,000,000 200,000,000
Preference Shares
Other Investments - - 19,108,849,811 - 19,108,849,811
Other Financial
Assets
IMF SDR Deposits - 12,100,561,354 - - 12,100,561,354
IMF Reserve
- 2,540,585,086 - - 2,540,585,086
Tranche Position
Total Financial
24,802,518,512 37,241,880,449 32,776,982,406 119,544,041,797 214,365,423,164
Assets

At 30 June 2022
Fair Value
Cash and Cash Through
Category Cost Amortised Cost Total
Equivalents Surplus or
Deficit
Rs Rs Rs Rs Rs
Cash and Cash
21,673,055,130 - - - 21,673,055,130
Equivalents
Receivables from
Non-Exchange - 18,382,259,816 - - 18,382,259,816
Transactions
Receivables from
Exchange - 1,470,485,399 - - 1,470,485,399
Transactions
Loans and Advances - - 13,997,712,474 - 13,997,712,474

70 TREASURY
ANNUAL STATEMENTS OF THE GOVERNMENT OF THE REPUBLIC OF MAURITIUS JUNE 2023

NOTES TO THE FINANCIAL STATEMENTS

At 30 June 2022
Fair Value
Cash and Cash
Category Cost Amortised Cost Through Surplus Total
Equivalents
or Deficit
Rs Rs Rs Rs Rs
Investments
Equity
Investments
(Quoted
Investments,
- - - 114,017,302,130 114,017,302,130
Unquoted
Investments,
Equity
Participation)
Redeemable
- - - 200,000,000 200,000,000
Preference Shares
Other Investments - - 19,526,009,121 - 19,526,009,121
Other Financial
Assets
IMF SDR Deposits - 12,509,787,642 - - 12,509,787,642
IMF Reserve - 2,418,161,031 - - 2,418,161,031
Tranche Position
Total Financial
21,673,055,130 34,780,693,888 33,523,721,595 114,217,302,130 204,194,772,743
Assets

The table below shows the classification and measurements basis for the different categories of financial liabilities and their
respective balances at:

At 30 June 2023

Category Cost Amortised Cost Total


Rs Rs Rs
Payables - 1,918,724,311 1,918,724,311
Deposits - 3,705,071,128 3,705,071,128
Government Debt
Government Securities, Domestic and
- 430,808,992,504 430,808,992,504
External Loans
IMF SDR Allocations 14,273,956,878 - 14,273,956,878
Financial Guarantee Liabilities - 3,203,810,129 3,203,810,129
Total Financial Liabilities 14,273,956,878 439,636,598,072 453,910,554,950

At 30 June 2022
Category Cost Amortised Cost Total
Rs Rs Rs
Payables - 1,175,713,837 1,175,713,837
Deposits - 4,820,955,275 4,820,955,275
Government Debt
Government Securities, Domestic and
- 392,647,328,874 392,647,328,874
External Loans
IMF SDR Allocations 14,073,119,767 - 14,073,119,767
Financial Guarantee Liabilities - 2,905,829,220 2,905,829,220
Total Financial Liabilities 14,073,119,767 401,549,827,206 415,622,946,973

71 TREASURY
ANNUAL STATEMENTS OF THE GOVERNMENT OF THE REPUBLIC OF MAURITIUS JUNE 2023

NOTES TO THE FINANCIAL STATEMENTS

B. FINANCIAL RISK MANAGEMENT

Government activities are exposed to various risks comprising mainly interest rate risk, foreign exchange risk, liquidity risk and
refinancing risk. Given that there is a trade-off between cost and risk, Government’s debt management strategy aims at minimising
the cost of the debt portfolio within an acceptable level of risk. The main risks as well as the risk management policies are set out
below:

(i) Interest Rate Risk

Government is exposed to interest rate risk as the rate of interest might increase resulting in additional costs. In relation to
Domestic Debt, almost 97% of Government Securities have been issued at a fixed rate of interest.

With regard to Government External Debt, the share of variable interest rate loans represented 54.4% of the total External Debt
as at 30 June 2023 (2022: 46.9%). During financial year 2022-2023, Government Securities provided as collateral by local banks
to foreign institutions which were previously classified under External Debt have now been reclassified under Domestic Debt
as these are still held by local banks rather than foreign financial institutions.
To mitigate the above risk, the strategy in place is to have a nearly balanced mix of fixed and variable interest rate loans over
the medium term. Accordingly, preference is being given to contract new loans at a fixed interest rate.

Interest Rate Sensitivity Analysis


Government is exposed to interest rate risk as interest rates in relation to inflation-indexed bonds (assuming changes in interest
and inflation rate are correlated) and variable interest rate external debts may change. The table below details the sensitivity
analysis to a 10 basis points (bp) increase and decrease in the interest rate:

Increase/Decrease Year Ended Year Ended

30 June 2023 30 June 2022

Basis Points Rs Million Rs Million

Government Debt:

Inflation-Indexed Bonds:

(Excluding those classified under External


Debt)

Impact on Surplus or Deficit +10 bp +10 +10


Impact on Surplus or Deficit -10 bp -10 -10

External Debt:
Impact on Surplus or Deficit +10 bp +46 +34
Impact on Surplus or Deficit -10 bp -46 -34

Based on the above table, it can be noted that an increase/decrease of 10 basis points in interest rates would result in an
increase/decrease in the interest payments by about Rs 56 million for the financial year 2022-2023 (2021-2022: Rs 44 million).

72 TREASURY
ANNUAL STATEMENTS OF THE GOVERNMENT OF THE REPUBLIC OF MAURITIUS JUNE 2023

NOTES TO THE FINANCIAL STATEMENTS

(ii) Foreign Exchange Risk

Exposure to exchange rate risks arise as transactions denominated in foreign currencies are undertaken by Government. The
strategy has been to minimise exposures to exchange rate risks by having greater recourse to domestic financing and to align
the currency composition of public sector external debt to that of export earnings of the country.

Accordingly, the share of External Debt in Government debt portfolio stood at 18.7% at 30 June 2023 (Based on nominal value)
(2022: 17.8%). The currency composition of foreign debt has also been diversified. In addition, the foreign currency risk is
mitigated by maintaining bank accounts denominated in foreign currencies.

Foreign Currency Sensitivity Analysis

The table below details the sensitivity analysis regarding the impact of a 5 % increase or decrease in exchange rates:

Increase/ Year ended Year ended


Decrease 30 June 2023 30 June 2022
(Restated) [N1]

% Rs Million Rs Million
Impact on (deficit)/surplus (Appreciation +5% +4,195 +3,658
of MUR)

Impact on (deficit)/surplus (Depreciation -5% -4,195 -3,658


of MUR)

N1: Foreign Currency Sensitivity Analysis has been restated to include Domestic debt held in foreign currency.

As per the above table, an appreciation/depreciation of MUR by 5% against all foreign currencies in which external debt has
been contracted would increase/decrease (deficit)/surplus by Rs 4,195 million for financial year 2022-2023 (2021-2022
(Restated): Rs 3,658 million).

(iii) Liquidity Risk

Liquidity risk refers to the risk that Government will encounter difficulty in meeting its financial obligations when they fall due.
The liquidity risk for Government is managed and mitigated by having an efficient and effective cash flow forecasting system
that ensures adequacy of cash resources to meet all Government obligations as and when they fall due.

(iv) Refinancing Risk

Refinancing or rollover risk is the risk that redemptions of securities will be concentrated over the shorter term or in a
particular year which might affect the refinancing ability of Government. To mitigate refinancing risk, actions have been taken
to gradually move towards instruments with longer term.

The average time to maturity of Domestic Debt has increased from 5.1 years at 30 June 2022 to 5.3 years at 30 June 2023.

Concerning External Debt, the majority of the loans are contracted with a term of 15 to 20 years and include a moratorium of 5
years on capital repayment. Compared to Government securities which are redeemable as a bullet payment on maturity date,
External Debts are repayable on a semi-annual or annual basis. Therefore, the refinancing risk for External Debts is quite low.

73 TREASURY
ANNUAL STATEMENTS OF THE GOVERNMENT OF THE REPUBLIC OF MAURITIUS JUNE 2023

NOTES TO THE FINANCIAL STATEMENTS

45. SHORT-TERM LEASE

The outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due within
one year, amount to Rs 51,443,336.

46. NON-CURRENT ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS

Non-Current Assets Held for Sale

During the financial year 2022-2023, the Ministry of Environment, Solid Waste Management and Climate Change (Solid and Hazardous
Waste and Beach Management Division) classified assets as held for sale on 19 June 2023 due to obsolescence.

Since these assets were fully depreciated, they had a nil carrying amount on 30 June 2023 while on the same date their fair values less
costs to sell were estimated at Rs 79,000. Therefore, the value of non-current assets held for sale for the financial year 2022-2023 is
negligible.

Discontinued Operations

During the financial year 2022-2023, there were no known discontinued operations.

47. RELATED PARTY TRANSACTIONS

(i) Key Management Personnel

Related parties include key management personnel. The key management personnel are the Ministers who constitute the governing
body of the Government of Mauritius. The key management personnel also include Accounting Officers and Senior Management (not
below the grade of Permanent Secretary) who have the authority and responsibility for planning, directing and controlling the
activities of the Government.

The aggregate remuneration paid to key management personnel includes Annual Allowance, Basic Salary, Salary Compensation,
Extra Remuneration, Allowances, Extra Assistance, Cash in lieu of Leave, Facilities Allowance to Honourable Members, End-of-year
Bonus, Travelling and Transport, Overtime, Passage benefits, Allowance in lieu of passages amongst others. These remunerations
are as per the recommendation of the PRB Report 2021.

Key management personnel are also entitled to post-employment benefits and these are included in Employee Benefit Obligations.

(ii) Related Parties

All transactions between related parties are on normal terms and conditions. Accordingly, there is no separate related party
transaction to be disclosed.

48. CONTINGENT ASSETS

As at 30 June 2023, there were no known contingent assets to be disclosed.

74 TREASURY
ANNUAL STATEMENTS OF THE GOVERNMENT OF THE REPUBLIC OF MAURITIUS JUNE 2023

NOTES TO THE FINANCIAL STATEMENTS

49. CONTINGENT LIABILITIES

As at 30 June 2023, there were no known contingent liabilities to be disclosed. Contingent liabilities (as disclosed in Statement L -
Statement of Contingent Liabilities including details of any Loans, Bank Overdrafts or Credit Facilities Guaranteed by Government
as at 30 June 2023) in relation to Loans, Bank Overdrafts or Credit Facilities Guaranteed by Government have been recognised as
Financial Guarantee Liabilities in Statement A - Statement of Financial Position as at 30 June 2023. Refer to Note 21 - Financial
Guarantee Liabilities for more details.

50. MANAGING CAPITAL

Government’s capital, represented by the Net Assets/Equity in Statement of Financial Position, comprise the balance of the
Consolidated Fund, Accumulated Surplus/Deficit and monies deposited with the Government by various funds set up under the
Finance and Audit Act. The overall objective in the management of capital is to maximise net assets by implementing coherent fiscal
policies and an effective debt management strategy.

In this context, in financial year 2022-2023 Government pursued the following main fiscal policies: (i) recovery of arrears of revenue
and enhancing tax administration to improve collections; (ii) introduction of new revenue raising measures; (iii) review of low
impact programmes to improve efficiency and eliminate wastages; and (iv) restructuring of public bodies to reduce their
dependence on the National Budget.

In addition, Government adopted a debt management strategy aimed at minimising the cost of the debt portfolio while maintaining
risks at an acceptable level. The debt profile was improved to contain exposure to foreign exchange rate risks and reduce refinancing
risks.

Information on the fiscal policies and debt management strategy of Government can be found in the 2022-2023 Budget Estimates
document.

51. MATERIAL EVENTS AFTER REPORTING DATE

An award has been made in December 2023 by the International Arbitration Tribunal for termination of contract whereby the State
of Mauritius has been ordered to pay interest on an amount awarded, at the rate of overnight PLIBOR plus 2% margin, compounded
annually from the date of the termination of the contract of lease of land till date of settlement. The amount payable has not yet been
determined.

75 TREASURY

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