BENIN: GOVERNMENT ANNOUNCES RESULTS OF INITIAL AUDITS OF

UNCLAS COTONOU 001198 SIPDIS SENSITIVE SIPDIS DEPT FOR AF/W (DBANKS) PARIS FOR D'ELIA E.O. 12958: N/A TAGS: PGOV PREL KMCA BN SUBJECT: BENIN: GOVERNMENT ANNOUNCES RESULTS OF INITIAL AUDITS OF 2003-2006 REF: COTONOU 1189 (NOTAL) ¶1. (U) SUMMARY: The GoB has announced the much-anticipated results of the audits of twenty-one ministries and several major parastatals for the 2003-2006 period. President Yayi's government initiated these audits immediately upon taking office in April 2006, as part of a high priority effort to improve governance and fight corruption. For several weeks, however, it had been hesitating about how to release results. The audits found serious deficiencies in fiscal management under the former Kerekou regime, discovering fictitious accounts and several instances of unjustified spending. The 30-page synthesis of the 7,800 pages of audit reports did not, however, name names, and it appears the audits have uncovered sums rather smaller than many observers had expected. END SUMMARY. ¶2. (U) On December 7, the Minister of Development, Economy and Finance, Mr. Pascal Irenee Koupaki, held a press conference during which he provided an overview of the audits contained in a bulky 7,800-page report. Koupaki said the audits had brought to light serious irregularities and embezzlement of funds in several institutions. Some 337 off-budget accounts had been found across several ministries. Per diems had been paid for training courses that were never held. Other wasteful and fraudulent practices discovered included, overspending, illegal awards of public contracts, theft and illegal sale of property belonging to the State, and non-observance of the decree setting domestic travel allowances for civil servants. ¶3. (U) Minister Koupaki said that some stolen goods and funds had been already recovered, including several cars from the Environment Ministry, and some $78,000 out of a total of $186,000 that an accountant had embezzled from the President's Office. Koupaki also announced the government was still seeking repayment of a total of $46 million from 300 different individuals who had received improper payments. ¶4. (U) The audits recommended continued efforts to secure return of the diverted funds and goods, including through disciplinary and judicial means. Several local commentators, however, were disappointed that the audits do not appear to have found larger sums of stolen money, and that Koupaki did not name any names of the guilty. One local paper entitled its report on the press conference "The Mountain Gives Birth to a Mouse." ¶5. (SBU) COMMENT: The alleged amount embezzled, $46 million, is not insignificant for a country with an annual government budget of only some $1 billion. But it does not meet public expectations that the audits should uncover huge crimes and incriminate high-level officials. Even so, it represents an important step in the government's anti-corruption efforts, and the handling of these audits will continue to be an important signal of the government's effectiveness in combating corruption. There may well be more details that have yet to be revealed, as we know the Presidency believes the audits have the ruffled feathers of some prominent local figures. President Yayi has promised (REFTEL) to share the audit reports with Ambassador Brown. END COMMENT. BROWN