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Momodou
Denmark
11738 Posts |
 Posted - 04 Oct 2012 : 10:44:30
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Auditor General submits 2007 AUDITED gov’t accounts report
The Daily Observer: Published on Wednesday, October 03, 2012
The Auditor General , Bubacarr Sankareh, yesterday presented the ‘Report on the Public Accounts of The Gambia 2007, before the Joint Public Accounts and Public Enterprises committee of the National Assembly.
The audited accounts cover the accompanying financial statements of the government of The Gambia which comprises the consolidated statements of receipts and payments, statements of revenues and expenditures-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 2007.
The report is submitted in compliance with Section 160 (1) (c) of the Constitution of the Republic of The Gambia, which requires the Auditor-General, at least once in every year, to audit and report on the Public Accounts of The Gambia, the accounts of all offices and authorities of the government, the accounts of the courts, the accounts of the National Assembly and the accounts of all public enterprises.
Section 160(1) (d) of the Constitution requires the Auditor-General to report to the National Assembly on the accounts of The Gambia and to draw attention to any irregularities in the accounts audited and to any other matter, which in the Auditor General’s opinion ought to be brought to the notice of the National Assembly. Section 160(1) (e) requires the Auditor General to publish for public information an annual report on accounts once it has been discussed in the National Assembly.
The report highlighted the lapses in financial controls that have resulted in the loss of government funds through error and fraud during the year, the fraud on the Treasury main account involving the use of cheques from the Treasury main account for personal gains and the persistent failure by the Ministry of Finance and Economic Affairs (MoFEA) to provide information to the Auditor General which constitutes a fundamental violation of his right of access to all information and documents in the exercise of his duties under Section 160 (4) of the Constitution and the violation of the Financial Instructions under Section 345 by the Ministry of Finance and Economic Affairs.
Presenting the report, Sankareh said the Budget Management and Accountability Act details the component of a complete set of financial statements and the Act states that financial statements should include a summary of the revenue arrears to be collected by each budget agency; a summary statement of investments made from the consolidated fund and a summary statement of stores and other assets at the end of the financial year which the Treasury Department did not meet.
Exclusion of monies under gov’t control from the financial statements
Sankareh said that the cash basis IPSAS requires an entity to recognise all cash receipts, cash payments and cash balances under the entities control while this has not been done in these financial statements.
Omission of amounts held by government in commercial banks accounts
According to him, during his audit, he identified D38, 259, 446.98 which was held for government in commercial bank accounts on December 31st,2007 but not included in the financial statements of the government. He mentioned that the Budget Management and Accountability Act also states that commercial banks accounts may only be used in exceptional circumstances and with the approval of Secretary of State and Permanent Secretary adding that he was not provided with evidence that appropriate approval was received for the opening and operation of these bank accounts.
Storage & production of documentary evidence
“For each audit I have conducted in recent years, I had difficulty in obtaining supporting documentation from the Treasury Directorate. This is manifested in the length of time that it takes them to supply him with even the most basic information and the quantity of supporting documentation which remains outstanding at the end of the audit,” he said.
This matter, he said, is of grave concern as it not only prevents him from conducting his audit and reporting on the propriety of transactions, but it reflects their failure to recognise the importance of maintaining and safeguarding accounting methods.
Supporting documents not provided by Treasury Directorate
Here, Sankareh said payment vouchers for other charges totalling D3, 190, 388.11 were not presented for his review. In addition, he said payment vouchers for various payments of other charges totalling D30, 195, 035.50 had inadequate supporting documents in contravention to the financial instructions.
“In the absence of the payment vouchers and adequate supporting documentation, I was not able to confirm the validity of the payments.
Financial instructions state that ‘payment vouchers must be accompanied by the appropriate supporting documents, which may include original invoices, time pay sheets, local purchase orders and, in the case of imprest holders, petty cash vouchers’. Financial Instruction also state that ‘the originals of payment vouchers and supporting documents would be filed in numerical order by month and year by the Treasury Directorate, to be available for audit and other inspection purposes,” he said.
He maintained that the above instruction was not always followed, saying he was reliant on the Treasury Directorate for providing supporting documentation in these instances when they were not always sure of the location of much of the documentation requested.
Severe delays in the submission of Government accounts
According to Sankareh, the Budget Management and Accountability Act states that the Department of State shall, after reconciliation of its own accounts with the transactions of the Treasury Main Account, consolidate and submit to the Auditor-General the annual statement of government accounts, not later than three months after the end of the financial year.
He continued: “Contrary to the above instruction, the 2007 Financial Statements of The Gambia were not submitted within three months of the end of the previous financial year by the Treasury Directorate. The Constitution of The Gambia 1997 Section 160 (1) (d) states that the Auditor General shall within six months of the end of the immediately preceding financial year to which each of the accounts, report to the National Assembly on the accounts and draw attention to any irregularities in the accounts audited and to any other matter which, ought to be brought to the notice of the National Assembly.”
He reported that he could not meet the above Constitutional requirement, due to the late submission of the financial statements by the Treasury Directorate as detailed below. “The 2007 financial statements were submitted and resubmitted five times. The last submission was done on 4 August, 2011. This is indicative of a lack of quality control processes over financial statements production at the Treasury Directorate and has severely impacted the timely completion of the audit since some of the documents had to be re-audited after each resubmission. Although revisions of the financial statements were necessitated by audit findings as I progressed with my work, overall it would appear that the primary aim of the hurried actions were to meet the statutory deadlines and to satisfy external partners,” he said.
Failure to provide information on sale of 50 percentage of Gamtel/Gamcel
Sankareh said that according to the letter of intent, Memorandum of Economic and Financial Policies, and Technical Memorandum of Understanding between The Gambia and the International Monetary Fund dated 3 February 2009, government sold 50 percentage share of Gamte/Gancel to Spectrum Company at a tune of $35 Million. He said in November 2008, government terminated the partnership agreement and by this time, it had received $28.5 Million, leaving a balance of $6.5 Million outstanding.
“No information or relevant documents relating to this sale were provided by the Ministry of Finance and Economic Affairs despite several verbal requests during the audit and four formal written requests I made over a period of one year. The persistent failure by MoFEA to provide information to me constitutes a fundamental violation of my right of access to all information and documents in the exercise of my duties under Section 160 (4) of the Constitution. The Ministry has also violated Financial Instructions Section 345,” he added.
Purchase of vehicles in 2007
Sankareh said during the audit, he noted that government purchased vehicles on credit amounting to D77, 052, 500.00 in 2007. These, he added, were single source procurements from TK Motors in contravention to GPPA regulations. He also said that MoFEA was unable to provide documentation showing any approval from GPPA.
“Detailed policies and procedures for the purchase of vehicles were not in place. In the absence of comprehensive and independent documentation at MoFEA of their own, I reviewed the documents from TK Motors provided by the Ministry and noted that once vehicles were requested on credit from TK Motors, the prices were simply billed to MoFEA. I am deeply concerned with: The dearth of documentation on the purchase of vehicles at the Ministry and the dependence on records of TK Motors; The absence of reconciliation between the Ministry and TK Motors during the period under audit; The persistent violation of the GPPA Act, the effects of single sourcing from only TK Motors on fair competition in the market; andthe potential lost opportunity for Government to secure best value for money in vehicle procurement,” Sankareh explained.
Governance and financial controls incidents of material fraud during 2007
Sankareh then highlighted the lapses in financial controls saying it resulted in the loss of government funds through error and fraud during the year. According to him, a total of D6, 721, 735 material fraud were uncovered within the Treasury Department, Kerewan Sub-treasury and the Janjangbureh sub-treasury respectively and had reported on these frauds previously with the legal status of each of the cases.
“At the inception of the IFMIS in January 2007, the old Treasury Main Account was supposed to be closed with the cash balances transferred to the new Treasury Main Account. However, more than two years had passed and the old account was not closed. This contributed to the Government being defrauded of over D4 Million. The fraud on the Treasury Main Account involved the use of cheques from the Treasury Main Account for personal gains. While the cheques were drawn on the account in 2007, they were dated 2006.
Although four individuals have been convicted of their roles in the crime there is a suspect who was implicated as their insider accomplice within the Treasury against whom no action has been taken. He was undergoing medical treatment at the time the other individuals were being prosecuted and this was given as a justification to suspend action against him at the time. No further action has been taken against the suspect since the incident,” he further stated.
According to him, no criminal proceedings have been undertaken in either the Kerewan or Janjanbureh cases at the respective Governor’s Office. He said the trend towards such significant fraud is alarming and it is critical that the permanent secretary puts in place robust control measures to prevent and detect fraud. He added that it is also important to ensure that justice is seen to be done in every case of suspected fraud if others are to be deterred.
Over-reliance on consultants
The Auditor General said that in his reports for the periods 1991/92 – 2006, he commented on the over-reliance on external consultants and the fact that Treasury staff were not able to provide explanations regarding accounting treatments in the consultants’ absence. He said despite his comments, this situation has continued for the preparation of the 2007 financial statements and his staffs were reliant on consultants for most explanations of accounting treatments and the methodology for compiling the financial statements and “the Treasury staff were mainly of assistance in our pursuit of supporting documentation”.
“The role of consultants is to give advice, guidance and support to assist staff in conducting their duties. From what we have seen, the Treasury Directorate has gone beyond this, leaving the consultants to produce the financial statements while Treasury staff take little responsibility for the process. This leaves the Treasury ill-equipped to deal with the technicalities of accounting and reporting going forward.
The Treasury has been working with IFMIS consultants for six years and it is important that their staff are fully integrated into the teams implementing the IFMIS otherwise they will find that rather than staff actually learning from consultants and building the Government’s capacity to be self-sufficient, they are actually building a dependency on their input. This would also prevent a vacuum of knowledge being created when the said consultants are no longer assigned to the Government. A comprehensive succession plan to address the potential adverse effects of the departure of the consultants is not being executed and I remain concerned with the sustainability of the IFMIS into the future,” he reported.
Improving financial reporting and governance in the Government
Sankareh said that for several years he had made recommendations regarding improvements which should be made to the governance structure within the government. He disclosed that he had recommended the introduction of Audit Committees to scrutinise the activities of ministries, departments and agencies and advice on governance, risk management and the internal control framework.
He added: “Financial instructions also state that each ministry should have an Audit Report Implementation Committee. This committee could form part of the Audit Committee and their function would be to oversee the implementation of the recommendations of internal and external audits. No such committees exist either at the ministerial level or within the Treasury and many audit recommendations remain unaddressed.
I have also made several recommendations in recent years with regards to establishing an effective Internal Audit Department which would report directly to the Audit Committee. I am happy to note that an Internal Audit Department has been set up within the Ministry of Finance. This unit however, needs to be strengthened as quickly as possible to enable it effectively contribute towards good financial management and control within the government.”
Conclusion
Sankareh then made it clear that these are the first set of financial statements produced from the successful implementation of the government Integrated Financial Management and Information System. He pointed out that although the submission was severely delayed, the quality of the financial statements is a substantial improvement in both completeness and reliability on earlier years.
“The government now needs to urgently focus on ensuring that the financial statements capture accounting transactions in their entirely, from all banks accounts, from direct Government expenditure of budget and all development expenditure including projects. It is imperative that government officials take lead role in the preparation of the financial statements, with consultants providing assistance where needed. Otherwise, the huge investments and gains made by government in the IFMIS will be lost with the departure of the consultants,” he concluded.
Source: Daily Observer
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A clear conscience fears no accusation - proverb from Sierra Leone |
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Momodou
Denmark
11738 Posts |
Posted - 04 Oct 2012 : 10:50:52
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Auditor General says Govt. defrauded of over D6 million
By Lamin B. Darboe
The Point: Published on Wednesday, October 03, 2012
The Auditor General of the Gambia has told parliament that the Government of the Gambia was defrauded of D6, 721, 738 through un-authorised withdrawals from Treasury Main Bank Account and unaccounted revenue.
Bubacarr Sankareh made this revelation yesterday while presenting the report of the Auditor General on the Financial Statements of The Gambia for the year ended 31st December 2007 to the members of the Public Accounts/Enterprises Committees of the National Assembly at the National Assembly Complex in Banjul.
He told deputies that at the inception of the Government Integrated Financial Management and Information System (IFMIS) in January 2007, the old Treasury Main Account was supposed to be closed with the cash balances transferred to the new Treasury Main Account.
“However, more than two years had passed and the old account was not closed. This contributed to the Government being defrauded of over D4 million,” the Auditor General told parliamentarians.
The fraud on the Treasury Main Account involved the use of cheques from the Treasury Main Account for personal gain.
According to him, while the cheques were drawn on the account in 2007, they were dated 2006.
He revealed that although four individuals have been convicted for their roles in the crimes, there is a suspect who was implicated as their insider accomplice within the treasury against whom no action has been taken.
“He was undergoing medical treatment at the time the other individuals were being prosecuted, and this was given as a justification to suspend action against him at the time,” Sankareh said, adding that no further action has been taken against the suspect since the incident.
Commenting on the nature of fraud in Kerewan (D2, 136, 328) and Janjangbureh (D520, 936) Sub Treasuries which relates to the unaccounted revenue, the Auditor General said no criminal proceedings have been undertaken in either case at the respective Governors’ office.
Sankareh noted that the trend towards such significant fraud is alarming, and it is critical that the permanent secretary at the Ministry of Finance and Economic Affairs puts in robust control measures to prevent and detect fraud.
“It is also important to ensure that justice is seen to be done in every case of suspected fraud, if others are to be deterred,” he stated.
Further presenting before members of the PAC/PEC committees the management letter of the Auditor General Audit of the Financial Statements of the Gambia for the year ended 31st December 2007, Sankareh revealed some findings relating to un-presented payment vouchers amounting to D3, 190, 388.11.
Financial Instruction 158, he added, states that” the originals of payment vouchers and supporting documents will be filed in numerical order by month and year by the Treasury Directorate, to be available for audit and other inspection purposes.”
“From a sample of payment vouchers selected for testing, twenty payment vouchers amounting D5, 519, 256.51 were not presented. Subsequently ten payment vouchers were presented and reviewed leaving ten payment vouchers outstanding and un-presented,” he said, adding that the value of the outstanding vouchers stood at D3, 190, 388.11.
Sittings of the PAC/PEC committees continues today.
Source: The Point |
A clear conscience fears no accusation - proverb from Sierra Leone |
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Momodou
Denmark
11738 Posts |
Posted - 04 Oct 2012 : 20:34:27
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Auditor General reveals $35 million sale to Spectrum
By Lamin Sanyang
Foroyaa: Published on Thursday, 04 October 2012
The report of the Auditor General on the Public Accounts of The Gambia 2007, on Tuesday, before the select committees of the National Assembly PAC/PEC at the legislative chambers has unveiled the 50 percent share of GAMTEL/Gamcel sold to Spectrum Company at a tune of $35 million (D1155 million).
He asserted that government has terminated partnership agreement by the time, it had received $28.5 million, leaving an outstanding balance of $6.5 million. He complained about the lack of information and conveyed that relevant documents relating to this sale were not provided by the Ministry of Finance and Economic Affairs despite several requests during the audit over a period of one year. He further complained that the persistent failure by MoFEA to provide information to him constitutes a fundamental violation of his right of access to all information and documents in the exercise of his duty.
The report reveals an amazing number of malfunctions and malpractices taking place at the government Ministries resulting to a fraud of D6 million.
"Lapses in financial controls have resulted in the loss of Government funds through error and fraud during the year. The fraud on the Treasury Main Account involved the use of cheques from the Treasury Main Account for personal gains," asserted Mr. Bubacarr Sankareh, the Auditor General.
Auditor General Sankareh in presenting his report before the deputies revealed that a total of D6.7 million was being defrauded of the national budget. He said at the inception of the IFMIS in January 2007, the old Treasury Main Account was supposed to be closed with the cash balances transferred to the new Treasury Main Account. He said more than two years had passed and the old account was not closed which he said contributed to the Government being defrauded of millions.
"The trend towards such fraud is alarming and it is critical that the Permanent Secretary puts in place robust control measures to prevent and detect fraud," he pointed out.
The Auditor General mentioned about the documentation for Livestock Development Project loan which he said was not provided for review. He told deputies he could not confirmed amortizations of D10, 477, 910.31 related to this loan for the year. He said government has paid D20 million during the year following its decision to capitalise the Central Bank with D100 million over five years.
"The balance of D80 million was not disclosed in the statement of outstanding commitments by ministries. I was not provided with explanations on the full circumstances for the capitalization," he pointed out.
Auditor General Sankareh disclosed that he did not receive appropriate and sufficient information to confirm the occurrence, completeness, accuracy, rights and obligations, valuations and existence of these transactions. He revealed that the Treasury Directorate believes the financial statements are not compliant with IPSAS Cash Basis financial reporting framework. He stressed that the most notable departure is that the preparation of the financial statement did not include transactions in all funds or bank accounts controlled by the government or held for its use which he said is contrary to IPSAS.
Mr. Sankareh pointed out that cash basis IPSAS require an entity to recognise all cash receipts, cash payments and cash balances under the entities controlled. This has not been done in these financial statements. He said he was not provided with evidence that appropriate approval from Minister and Permanent Secretary was not received for the opening and operation of these bank accounts. He complained about the difficulty in obtaining supporting documentation from the Treasury Directorate.
"It is of grave concern as it only prevents me from conducting my audit and reporting on the propriety of transactions, but it reflects their failure to recognise the importance of maintaining and safeguarding accounting records," he disclosed.
However, the Auditor General in commenting on the issue of supporting documents said in the absence of payment vouchers and adequate supporting documents, he was not able to confirm the validity of the payments. He noted that financial instructions state that 'payment vouchers must be accompanied by the appropriate supporting documents which may include original invoices, time pay sheets, local purchase order etc. He stressed that the originals should be filed in numerical order by month and year for audit and other inspection purposes.
In his comment on purchase of vehicles in 2007, Mr. Sankareh noted that government purchased vehicles on credit amounting to D77, 052, 500 million in 2007. He complained about the single source procurements from TK Motors which he said is in contravention to GPPA regulations. He disclosed that the Ministry of Finance and Economic Affairs was unable to provide documentation showing any approval from GPPA. He further revealed that detailed policies and procedures for the purchase of vehicles were not in place.
The Auditor General expressed concerned about the unchecked vehicle dealings between the Ministry of Finance and TK Motors which he said should be properly scrutinized. He raised the issue of the persistent violation of the GPPA plus the effects single sourcing from only TK Motors on fair competition in the market. He further complained about the dearth of documentation on the purchase of vehicles at the Ministry and dependence on records of TK Motors.
Meanwhile, in his concluding remarks, Auditor General Sankareh advised government on the need to urgently focus on ensuring that the financial statements capture accounting transactions in their entirety from all bank accounts, from direct government expenditure of budget and all development expenditure including projects.
"It is imperative that government officials take lead role in the preparation of the financial statements, with consultants providing assistance where needed. Otherwise, the huge investments and gains made by government in the IFMIS will be lost with the departure of the consultants," he concluded.
Source: Foroyaa |
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