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|T O P I C R E V I E W
||Posted - 03 Oct 2022 : 15:42:55
"The Auditor General noted a difference between the general ledger and cash equivalent totalling D 4,968,902,000.00, adding that as a result, the total cash balances in the financial statements were misstated."
By Kemeeseng (Kexx) Sanneh
The Audit General’s report which was tabled before the National Assembly by the Minister for Public Service Babucarr O. Joof on behalf of the Minister of Finance and Economic Affairs, indicates that the report on the financial statements certifies that he has audited the accompanying Financial Statements of the Government of the Gambia which comprises the Consolidated Statement of Receipts and Payments, statement of Revenue and Expenditure of the Consolidated Fund, Statement of Financial Position- Consolidated, Detailed Revenue and Expenditure Comparison, Accounting Policies and Explanatory Notes to the Financial Statements for the year ended 31st December 2019.
In his adverse opinion, he said because of the significance of the matters identified based on his opinion, the financial statements of the Government of The Gambia did not present fairly the financial position of the Government of The Gambia as of 31st December 2019, and their financial performance for the year that ended in accordance with the Public Finance Act and Cash Basis International Public Sector Accounting Standards.
He said the inability of the Accountant General’s Department to provide supporting documentation, information and explanation on a timely basis was the most significant obstacle to his audit of the 2019 financial statements.
He further reveals that the audit began in November 2020 but could not be completed until November 2021, adding that his ability to secure evidence in support of all audit assertions but particularly the completeness, accuracy and regularity of transactions included in the financial statements was impeded.
The Auditor General noted a difference between the general ledger and cash equivalent totalling D 4,968,902,000.00, adding that as a result, the total cash balances in the financial statements were misstated.
He also identified a difference of D 3,462,118.29 between the translated Cashbook balance and the General Ledger balance for the Special project US dollar (USD) account. Saying this was as a result of not using the official USD exchange rate as of 31st December 2019.
“There is a risk that the special project USD cash balance disclosed in Note 15 Cash and cash equivalent were understated in the financial statement as a result of the misstatements in the general ledger and cashbook,” he pointed out.
The Auditor General said there were un-reconciled items amounting to D 6,501,536,055.64 during his review and re-performing bank reconciliation. Saying these items include carryovers from previous years that remained in the books and no evidence of corrections was provided to him.
He stated that failure to correct un-reconciled items for more than one accounting period renders the entire reconciliation process fruitless, adding that there is no point in performing reconciliation if errors and omissions are not corrected and adjusted on time.
He also noted Below the Line (BTL) project 192222 code used for receipting funds was also used to raise payments leading up to an understatement of D 62,622,598.47on total receipts reported in the cash receipts and payments disclosed in the financial statements.
The Auditor General identified cash differences between BTL receipts disclosed in the consolidated statement of cash receipt and payments and total BTL funds receipted in the general statement ledger, as a result, the financial is misstated.
The Auditor General said he noted a difference of D6, 139,871,000.00 between the year-end cash receipts balance and payment. Saying there is a risk that the total cash balances reported and recognized as assets in the statement of financial position were materially misstated.
He further indicates that the Accountant General used inaccurate balances in performing year-end bank reconciliation in respect of the Sukuk Al Salam, T Bills, Special Project Bank Account and Special Deposit Bank Account which amounted to D 465,157,414.23, adding that the indicative that reconciliations are not reviewed by senior personnel to administer the necessary actions to correct the errors.
“I noted a difference between the detailed imprest report and the extended trial balance amounting to D1, 119, 054, 918.22. As a result, the Outstanding imprest balance disclosed in the financial statements is mIsstated,” he stated in the report.
He further noted unaccounted revenue in respect of the sale of timber by the Ministry of Environment totalling to D241, 962.480.00 during his audit and indicated that the Non-tax revenue balance is misstated.
The auditor reveals an overstatement of scanning fees amounting to D 34,676,214.75. As a result, the scanning fees reported in the financial statements were overstated for the period under review. Also according to the report revenue receipts and deposit slips amounting to D 1,746,633.53 were not presented for audit and without supporting receipts, it would be difficult to confirm the accuracy of the revenue balance in the financial statements.
According to the auditor he reviewed the Islamic Development Association loan agreement and the billings for payments on loan number 36060 (Gateway Project) and OFID Loan agreement No. 1128P (Third Public Works Project), respectively and noted an overpayment of loan interest amounting to D244, 227.57, in which the government might be losing huge amounts of funds as a result of overpayment of interest on loans.
He also indicates that he reviewed the Export-import Bank of India and Ecowas Bank for International Development loan agreement and billing and noted penalty and commitment amounting to D 277,911.19 not disclosed in the financial statements and this will mislead the users of the financial statements
“I noted an understatement of D3, 013,513,494.71 in respect of debt balances disclosed in the statement of the public debt of the financial statements and the amount recorded in the debt management system. Therefore, the statement of public debt disclosed in the financial statements is misstated,”.
He said the statement of outstanding commitments includes amounts relating to incomplete transactions such as pending government orders placed with suppliers, outstanding imprests and unpaid payment vouchers and claims. Saying these commitments were supposed to be cleared by the year-end meaning they should have nil balances in the financial statement.
“Nevertheless, I noted an outstanding commitment of D351, 693,000.00 in respect of Ministries, Agencies and Embassies not cleared at the year-end,” he stressed.
According to the auditor, he identified a discrepancy amounting to D21, 789, 455.06 between actual collections from domestic, customs and excise tax as per the cash book report and General Ledger. He added that he re-performed calculations of tax revenue returns and noted a wrong computation of tax revenue returns totalling D 18,219.475.00 in the general ledger and the financial statements are misstated.
“I noted the difference between the extended trial balance and the financial statements (Trial Balance) totalling D 645,188,834.80 in respect of different components, he pointed out.
He indicates that Government grants totalling D92, 323,463.51 disbursed directly to the sectors were not disclosed in the financial statements, adding that he also noted an un-supported payment of D50,000,000.00 in respect of timber proceeds to the Government of Senegal.
The Auditor General has identified amounts of money totalling D69,732,155.38 held at various commercial banks on behalf of the government that were not disclosed in the financial statements.
Read more on this report as we serialise it in subsequent editions focusing on the award of the Banjul drainage, road and sewage proje
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