An audit conducted on close to 2,000 projects extending four years revealed mismanagement of over 44 billion Br, according to a report tabled to the parliament.

Presented by the Office of the Auditor General to the Public Expenditure Administration & Control Affairs Standing Committee of the parliament on January 15, 2020, the report disclosed that the budget was mismanaged over the past four years. The audit was conducted on 1,962 public projects implemented by 98 budgetary public institutions.

Lack of proper feasibility studies in addition to over expenditures and allocations of additional budgets without following appropriate revision procedures of initial project plans were the major causes for the mismanagement, according to the report.

The audit covers projects between 2015/16 fiscal year and the first quarter of the 2018/19 financial year. It also sheds light on major inconsistencies in budget allocation by the Ministry of Finance and the implementation of projects by public institutions.

Failure of the Ministry to provide robust project implementation directives to the institutions, lack of coordination with the National Planning & Development Commission and the public institutions, and limited involvement of stakeholders in monitoring and assessing the implementation of public projects were also major gaps, according to the report.

About 290 projects were repeatedly revised, leading to the allocation of an additional 44.3 billion Br, which is more than 10pc of the initial budget of the projects. Among these projects, 18 of them were under the Ministry of Water & Irrigation and received an additional 32.1 billion Br, accounting for 72pc of the 44.3 billion Br in cost overruns.

The Ministry also allocated in excess of 3.1 billion Br on 54 projects, which was higher than the estimated cost of the initial projects, without following the proper procedures of revising the project plans for additional budget allocations. Even after the injection of the supplementary budget of 1.6 billion Br, 28 of the projects were not completed.

The report also revealed that 16 projects with a total capital budget of 246.6 million Br were carried out without a feasibility study, and later they were abandoned without being completed.

Among the 369 projects that were not completed within their given time frame, 75 projects were delayed between six months and one year; 208 projects, between one year and three years; 54 projects, between three to five years; and 32 projects, for more than five years.

The audit report also highlighted 280 projects that did not have clear financial and operational performance reports. The reports do not follow a standard reporting system and lack adequate and complete information, according to the report. Even after consuming excess budget, 109 projects showed poor performance.

Lack of proper feasibility studies before the allocation of the budget was a major reason for the mismanagement of public funds, according to Auditor General Gemechu Dubiso.

"Even the feasibility studies were not examined and approved by an independent body before allocation of budget for the projects," Gemechu said.