A few weeks ago, the office of the Auditor General released its annual audit report for the fiscal year 2023/2024. The report highlights notable progress in Public Financial Management (PFM) across the public sector. Yet, what stood out most was the remarkable performance of Rwanda’s local government entities, particularly the 27 districts and the City of Kigali.
The Auditor General audited 239 public entities, including districts and the City of Kigali, and issued 242 financial audit reports and 243 compliance audit reports.
Overall, public institutions have improved in all three main audit categories. Entities that obtained an unqualified audit opinion on their financial statements increased by 2% compared with the previous year, from 92% in 2023 to 94%.
On the other hand, the number of entities that obtained an unqualified audit opinion on compliance with laws and regulations grew by 6%, from 69% in 2023 to 75% in 2024.
Furthermore, entities that obtained an unqualified opinion in value for money increased by 7% compared with the previous year, from 59% to 66%. The implementation rate of audit recommendations also rose slightly, from 59% to 60%.
The Government of Rwanda, through the second National Strategy for Transformation (NST2), committed efforts to increase compliance with PFM rules and ensure value for money oversight. The government’s target is that public entities with an unqualified audit opinion for financial statements, compliance with laws and regulations, and value for money will reach 80% by fiscal year 2028/29.
While the full implementation rate of audit recommendations is expected to increase from 60% in 2023/24 to 70% by 2028/29, according to the PFM sector strategic plan (2024-2029).
A historic turnaround in local government
For many years, districts and the City of Kigali were frequently criticized in the media and during PAC hearings in Parliament for weaknesses in financial management. That narrative has now shifted dramatically.
Between 2021 and 2024, Rwanda’s districts achieved a transformation rarely seen in the public sector. In 2021, not a single district obtained a clean audit opinion on its financial statements. By June 2024, all 27 districts had done so, marking a 100% achievement in just three years.
While progress is undeniable, districts and the City of Kigali are yet to achieve full compliance with laws and regulations, improve value-for-money audits, and fully implement the auditor general’s recommendations.
What changed?
This transformation did not happen by chance. It reflects deliberate reforms, stronger collaboration, and a renewed commitment to accountability from government institutions, the Rwanda Association of Local Government Authorities (RALGA), and partners.
There are four key drivers of this noticeable milestone, including regular PFM coordination meetings that are organized at central and provincial levels by RALGA, MINALOC, MINECOFIN, and other stakeholders. These meetings provide a platform to discuss planning, revenue collection, knowledge exchange, and addressing challenges hindering effective PFM implementation.
Another key driver is the teamwork in audit preparedness of PFM committees within districts; they now work more collaboratively to ensure the timely submission of required documents and reports to auditors.
Through various capacity-building and institutional support efforts, RALGA, MINALOC, MINECOFIN, and PFM specialists deployed at the provincial level have been providing trainings, guidance, and advocacy to the district and the City of Kigali to strengthen financial management systems.
Furthermore, another key driver is the peer learning mechanism facilitated by RALGA, MINALOC, and other key players, where districts, provinces, and the City of Kigali hold structured peer learning sessions to share best practices in PFM. This approach has accelerated the replication of successful models across the country.
When you talk to district executive secretaries, who serve as chief budget managers, you feel their excitement for this milestone. At the same time, they emphasize the complex nature of local governance, which partly explains why compliance and value-for-money outcomes lag behind financial reporting.
"We thank the Auditor General for the immense role he played for us to achieve this milestone in the financial statements. It is possible to achieve higher targets in the remaining categories; however, it requires efforts from everyone, every institution, and partners, including the private sector and central government, because we are sometimes victims of external factors. We need to have more discussions with every player on how we can eliminate the existing factors of that failure." One of them told me recently.
Why it matters
Clean audit opinions in the City of Kigali and districts are more than technical achievements; they directly affect citizens and the credibility of local government.
There are four key reasons why this milestone matters:
First, districts and the City of Kigali manage resources not only transferred from the national budget but also revenues collected directly from citizens. Clean audits ensure these funds are safeguarded and used for their intended purpose.
Second, local government entities are the primary implementers of almost all government programs. If funds are mismanaged at this level, national priorities are compromised, and citizens feel the impact immediately.
Third, citizens elect their local leaders. When those leaders manage resources transparently, it strengthens public trust and reinforces the social contract between government and citizens.
Fourth, local government is the closest layer of government to the people. Its performance shapes the public’s perception of governance as a whole.
The road ahead
According to the PFM Sector strategic plan (2024-2029), the number of districts and the City of Kigali expected to receive unqualified opinions in all three categories (financial statements, compliance, and value for money) is targeted at 14 (50%) by 2028/29. Currently, only Nyaruguru District stands alone with this milestone.
Achieving 100% clean opinions on financial statements is a remarkable milestone, but it is not the finish line. The next challenge for districts is to sustain this momentum while reducing the gaps in compliance with laws and regulations, enhancing value for money performance, and implementing audit recommendations fully.
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