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