Audit office questions viability of leased vehicles
by David Kelleher
Over Lm5m liri were spent on government transport in 1998, with the bulk of funds going towards leased vehicles, according to the Auditor General's report which was laid on the table of the House last week.
A total of Lm5,147,695 were spent by ministries and departments during 1998, an increase of Lm246,267 over the same period in 1997. Of this amount Lm3,610,512 were allocated solely to the hire of transport, self-drive cars and impressed vehicles, the report states.
This, in fact, has raised audit concerns over the viability of leasing the cars rather than purchasing them outright, especially those vehicles used by ministers and parliamentary secretaries.
The National Audit Office calculated that the total cost for the lease of each car - for ministers and parliamentary secretaries - will amount to Lm35,678 over the five-year period in government.
In the report, the NAO said it has asked the Ministry of Finance:
whether there was a change in policy in favour of leasing instead of purchasing cars for ministers and parliamentary secretaries;
a comparative cost analysis of leasing versus purchasing;
whether a decision was taken in favour of leasing on the basis of such an analysis;
The NAO also queried why a public call for tenders was not issued for the lease of the vehicles required, which could have resulted in a cheaper lease and, why only four or five leasing firms were asked to submit quotations to the exclusion of other firms.
In his report, the auditor general said other transport expenses, running into thousands of liri, were also incurred by the government. These were not charged to current expenditure but to programmes and initiatives, contributions to government entities and capital votes.
"It was not possible for this office to determine these additional transport costs as no breakdown of expenditure charged to capital projects, programmes and initiatives and government entities is given in the Treasury Books or in the Treasury Financial Report," the NAO said.
Giving a return on transport expenses for the Works Division as an example, the NAO said it was concerned that a lack of such information in the Treasury Accounting Systems was giving a distorted picture of the financial statements published in the Treasury Financial Report.
The government operated fleet, according to the Licensing and Testing department records on 31 December 1997, stood at 1,447 vehicles. This included 123 fully expensed cars, 896 general utility vehicles and 428 other vehicles such as heavy plant, fire engines, ambulances, and so on.
This fleet was further supplemented with 510 impressed vehicles and around 250 hired vehicles.
A breakdown of transport expenditure by ministry/department in 1998 shows that the bulk of expenses were in the education division (Lm1,200,000), Public Works (Lm1,066,000) and the Agriculture and Fisheries Ministries (Lm330,000). The lowest expense for transport was Lm710 by the Public Service Commission.
A total of Lm1,206,000 was spent on fuel in 1998 (Lm1,178,831 in 1997) with the Armed Forces and Police leading the list with Lm353,808 and Lm201,994 respectively. The lowest figure for fuel was Lm444, once again by the Public Services Commission.
The department which required most maintenance for its vehicles was the Ministry of Health, Care of the Elderly and Family Affairs. Expenses totalled Lm39,907.
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