The Ministry of Transport & Logistics faced scrutiny after federal auditors uncovered financial irregularities, including unused funds, delayed projects, and procurement anomalies tied mainly to a recent merger.
Questions emerged following an audit which revealed that 346 million Br remained unused from the Ministry’s 2022 budget year.
According to Almaz Negash, head of the Ministry’s finance department, several construction projects, including the Qality Terminal, Qality Training Centre, Merkato Terminal, and liquid and dry port repairs, experienced delays primarily due to the Ministry’s merger with the Transport Authority in the 2022/23 fiscal year. Construction activities were halted during this transition as administrative focus shifted toward employee redeployment and organisational restructuring.
"The merger extended project timelines," said Almaz.
According to financial advisor Mekebeb Tesfaye, effective leadership, a clear administrative mandate, and timely reporting were essential to addressing merger-related disruptions.
Budgetary constraints compounded the issue. Despite the Ministry requesting around 200 million Br for each project, the Ministry of Finance capped annual construction budgets at one billion Birr. Almaz noted further project disruptions from land disputes with entities such as the Federal Police Commission.
State Minister for Transport Dhenge Boru attributed the unused budget primarily to the Ministry of Finance’s late allocation of budgets, alongside rising construction costs. He disclosed that 74 million Br from the capital budget had been directed to projects in Dire Dawa. While acknowledging improved budget utilisation recently, he pressed the ongoing need for better performance.
Officials of the Ministry of Finance countered these claims, retorting that they allocate funds based on resource availability and demanding reports be submitted well before budget closures. They claimed the Ministry of Transport did not provide financial reports for the previous year, warning of potential accountability measures.
An audit by the Federal Auditor General uncovered additional irregularities totaling 8.2 million Br. According to Deputy Auditor Abera Tadesse, while some issues had been resolved after the audit findings, discrepancies amounting to 2.8 million Br remained unresolved. Federal auditors identified 3.9 million Br in uncollected funds, of which 2.5 million Br still required closure.
The audit detailed delays in depositing daily revenue, amounting to 5.4 million Br, with delays ranging from five to 130 days. Following the auditors' recommendations, cash held by the Ministry staff has since decreased substantially to 1.5 million Br, reducing deposit delays to a maximum of five days. The Ministry has also initiated digitisation efforts for payment processes.
Procurement irregularities represented another major concern. Nearly three million Birr worth of services, such as hotel stays and public announcements, bypassed standard procurement procedures. An additional 2.2 million Br of services and equipment was similarly bought without proper procurement processes, despite being planned transactions. Collectively, procurement outside the national electronic trade system reached 12 million Br.
Transport Minister Alemu Sime (PhD) defended these direct purchases, describing them as necessary due to urgency, security considerations for hotels, merger-related employee redeployment, and national defense needs. However, Deputy Auditor Abera strongly advised against continuing this practice, urging compliance with procurement standards.
Auditors also uncovered notable flaws in property management, including improper handling of vehicles and office equipment. Federal auditors discovered 68 expired printing cartridges and 113 vehicles improperly stored or disposed of without adequate documentation, some damaged due to prolonged storage. Seven former employees resigned without formally handing over assigned equipment, complicating accountability.
According to the Ministry's representative, Yigazaw Dagnew, some employees had relocated abroad or were difficult to trace, but disclosed legal actions were underway.
Several vehicles had documentation issues, while others had been in storage since 2007. The Ministry's officials described discrepancies in vehicle disposal, disclosing a total of 128 vehicles intended for removal. Of these, 63 were ready for disposal, 25 are undergoing procurement processes, 12 had been sold for 3.68 million Br, while 13 were up for sale. Minister Alemu disclosed that special vehicles would be donated to museums, while irretrievable ones would be sold as scrap.
Fuel consumption was another concern, as auditors noted the absence of standardised fuel usage guidelines. The Ministry affirmed that normalisation processes had already been implemented for 62 vehicles, with plans to include another 28 shortly.
Federal Auditor General Meseret Damete acknowledged recent efforts to address these issues, pressing for electronic procurement, timely fund collection, and transparent financial practices.
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