It has been observed that while parastatals have established various internal control systems, adherence in some entities is a challenge.
Permanent Secretary in the Ministry of Finance and Development Planning Solomon Sekwakwa told Botswana Guardian that parastatals have to ensure that remuneration and benefits policies, financial procedures, procurement policies, human resources policies, risk management strategies, internal audit and statutory reporting are strengthened. Boards of Directors are also expected to review the adequacy of existing internal controls within their parastatals, ensuring that their parastatals have capacity to implement these guidelines and periodically submit reports on the assessments to line ministries.
Sekwakwa said that the line ministries would review the reports and ensure that parastatals comply with the guidelines and that boards are expected to continuously monitor systems of internal controls and apply appropriate remedies. In December 2012, Cabinet approved a set of guidelines to establish measures for the improvement of shareholder oversight over procuring entities and allow for more effective monitoring and evaluation of their performance.
The government official also said that there should be performance contracting or shareholder compact signed between a parastatal and a shareholder. The performance contract will be signed between a parastatal and the line ministry. “The aim is to clearly define the expectations and undertakings of both parastatals and the line ministry,” he said. A performance contract ensures that parastatal strategic plans are aligned to those of line ministries and overall government plans for the concerned sector.
Under the new guidelines that will take phased approach with immediate term commencing 2013/14, a board member should serve a maximum of two parastatal boards. They are not entitled to serving more than two years. Parastatal chief executive officers are not allowed to be board members of other parastatals as this may result in peer protection. Further, board members should not be appointed into management positions or vice versa and CEOs should not double up as board member or chairman except where it is international best practice.
APPOINTMENT OF BOARD MEMBERS
- A board member should serve a maximum of two parastatal boards
- Board members should not serve more than two terms
- Parastatal CEOs should not be board members of other parastatals as this may result in peer protection
- Board members should not be appointed into management positions or vice versa
- CEOs should not double up as a board member/chairman except where it is international best practice.
- The implementation of the guidelines will take phased approach with immediate term commencing in 2013/14.