BUJUMBURA February 27th (ABP) – The Cabinet met on Wednesday February 21, 2024 in Bujumbura, under the chairmanship of Head of State Evariste Ndayishimiye.
During that meeting, the bill amending Decree-Law No. 1/23 of July 26, 1988 on the organic framework of Burundian public establishments, presented by the Minister of Justice Domine Banyankimbona, was analysed, according to the press release from the Secretary General of State Jérôme Niyonzima.
In that press release, it is specified that until today, there are texts of laws which date back a long time and which no longer respond to current realities. The legislator at the time did not take into consideration the governance of certain institutions in terms of effectiveness and efficiency, which means that at present, there are boards of directors which have been put in place and which cause a lot of funds to be spent while those structures do not generate operating income. It is also recalled that a public establishment is a legal entity under public law having received from the State, a municipality and a group of municipalities, earmarked assets or annual subsidies for the management of a public service or an enterprise of general interest with financial and organic autonomy. It is placed under the supervision of a ministry for national public establishments or that of the municipality for communal establishments. It can have an administrative, industrial and commercial character, depending on its main objective.
A public establishment of an administrative nature is an establishment who’s main purpose is educational, scientific, cultural, social or any other specialized public service mission of general interest. It receives annual subsidies from the State to enable it to operate. A public establishment of an industrial or commercial nature is a public establishment whose main object is a function of goods or services, transformation and exchange. It receives a starting fund allowing it to produce and make profits with a view to achieving annual results and enjoys financial and organic autonomy.
That bill proposes the abolition of boards of directors in public establishments which do not generate income and to entrust to management committees the missions which were dedicated to boards of directors.
During the discussions, the Cabinet noted that the principle of eliminating boards of directors for all public establishments and personalized administrations which do not generate operating income cannot be generalized. There are institutions which do not generate income but where the boards of directors have an essential role in making certain sensitive decisions and in the credibility of the institution in relation to its other partners.
After analysis, that bill was adopted with certain recommendations. For institutions which do not generate income but where an administrative body is essential, another name in place of the board of directors will be found when analysing the harmonization texts with that law. Instead of speaking of “General Director”, we will speak of “Responsible for the daily management of the establishment”, especially since he can have another title which is not General Director such as Commissioner General, Rector or other.
The title of the person in charge will be specified in the decree creating the establishment. No one can serve on more than two boards of directors. The head of the establishment is assisted by the management committee whose missions, responsibilities and mandate are set by the creation decree. The establishment’s accounting year corresponds to the budget year. Permanent or temporary staff are recruited in accordance with the personnel status of the establishment and the Labor Code. The status of the staff of a public establishment is approved jointly by the supervisory minister and the minister responsible for Finance. Revenues generated by public administrative establishments are paid directly into the public treasury account. It is specified that the State is not guarantor of contractual or tort obligations entered into or incurred by the public administrative establishment only in the event of insolvency, subject to recourse action.