The cash book for non-governmental organisations (NGOs) new and renewal registrations, collections, bank statements and pay slips were not brought into accounts and therefore not submitted for audit, according to Audit Service Sierra Leone.
The final report on public accounts for the year ended 31 December, 2011, tabled in parliament on 18 January this year by the Deputy Speaker and Chairman of the Public Accounts Committee, Chernor Maju Bah, MP,alleged that record keeping at the Ministry of Finance and Economic Development (MoFED) was generally bad.
When questioned byAudit Service Sierra Leone (ASSL) the Financial Secretary in the ministry, Edmond Koroma,said that their response had been forwarded to the internal audit division.
The Auditor General’s report has described his response as “inappropriate,” and called on the ministry to “conduct an investigation into the discrepancies and ensure that all undisclosed fees were paid into the consolidated fund.”
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It was impossible to determine whether the sums of $124,000 collected as fees for new and renewal registration for International NGOs and Le 363,000,000 collected for National NGOs’ renewal and new registration as per NGO Unit on the lists ofMoFED were actually collected, recorded in the National Revenue Authority (NRA)Register, NRA receipts and paid into the consolidated revenue fund (CRF).
It was observed that Le 767,224,890 of collections for International and National NGOs’ renewal and new registration fees was not accounted for in neither the 2009 nor the 2010 Domestic Revenue Collections.
It was recommended that the NGO Unit at MoFED should provide the relevant cash book, bank statements, receipts and deposit slips to the Audit team for inspection and the VC, detailed explanation of the discrepancies observed. In addition, MoFED should conduct an investigation into the discrepancies and ensure that all undisclosed fees were paid into the consolidated fund. It is also recommended that daily reconciliations of records kept by both NRA and the NGO Unit at MoFED should be done and all discrepancies investigated by the head of the NGO unit on a monthly basis; and there should be proper supervision and review by senior officers of MoFED, on all issues related to NGOs’ registration and renewal.
INGO Collections Not Recorded in 2009 amounting to US$86 INGOs with renewal registration at US$1,000, totaling 86,000. Also was 19 INGOs new registration at US$2,000 amounting to US$38,000 and totalling US$124,000.
NNGO Collections Not Recorded Year 2010
There were 96 NNGOs new registration at Le 2,000,000 amounting to 192,000,000. Also were 171 NNGOs renewal registration at Le 1,000,000 amounting to 171,000,000. The sum total of such collections not recorded total Le 363,000,000.
Official’s Response: The Financial Secretary (FS) stated that the response had been forwarded to the internal audit division. This response, according to the auditors’ report, was “inappropriate.”
Inadequate projects’ documentation
ASSL was not provided with a comprehensive list of projects implemented under MoFED for 2010. It was recommended that a comprehensive list of all projects implemented under MoFED, during the period, be made available for audit. In addition, where the projects had closed, the closure procedures must be followed and documentation filed.
Official’s Response: In his reply the FS said that details of the requested projects had been provided; however, the following were inadvertently omitted from the list.
Project Planning and Implementation
Income Tax Board of Appellate Commissioners
Ministry of Finance - Imprest Account
He added that details of those accounts were available and would be forwarded to ASSL. Other project accounts, he mentioned had been forwarded to the Auditor General who had appointed external auditors. Meanwhile, details of accounts have still not been forwarded to the ASSL as promised above.
Payroll
A review of MoFED’s Staff List revealed that it was not regularly updated in accordance with good accounting procedures. In addition, evidence of contract agreements between an average of 29 contract staff (Contract Technical Assistants) and MoFED were not seen. Furthermore, between May and December 2010, a total of Le 1,534,539,992 was paid to those contract staff from the CRF. It was recommended that the institution should have an updated staff list and employees personal files for all employees, by the Staff Superintendent, by including all new staff and removing the departures on the staff list as soon as possible.
Also contract agreements between the Ministry and contract technical staff should be prepared as soon as possible.
Official’s Response: The FS mentioned that the process was in progress and that the staff superintendent would be notified about the recommendations. Also, the Man Power plan which captured data for the civil servants and other Technical Assistants contained relevant information on some of those issues raised.
Controls over balances held by Commercial banks
It was noted that Projects’ Bank Statements and bank reconciliations were not submitted to ASSL for inspection for the period under review. Also, even though the banks were written to twice for confirmation, no responses were received. They included the accounts of the Peace Building Fund, Public Expenditure Tracking Survey, Strengthening of the MTEF Tech. Committee, etc. It was recommended that monthly bank reconciliations should be done regularly and checked by senior officers.
Official’s Response: The FS stated that all the above accounts were being reconciled and forwarded to the Accountant General as per the previous year’s audit recommendations. He mentioned however that the Peace Building Fund account had become dormant account with no inflow and outflow of funds. The operations of the Italian Food Aid Account, with a balance of Le 830,000,000 had been transferred to the Ministry of Agriculture account for the implementation of Agricultural Projects as advised by the Development Secretary, he added. He said further that the MoFED had requested the closure of the following accounts by the Accountant General as they had become were currently dormant:
Strengthening of the MTEF Tech. Committee
IDB Technical Assistance for Capacity Building
Reconciliations were not presented to ASSL during the audit exercise and even though the FS’s response indicated that reconciliations were performed and forwarded to the Accountant General’s Department (AGD), best practice dictates that copies must be retained by the various projects.
Special Imprests not fully retired
It was noted that special imprests amounting to Le 419,448,856 were not fully retired, as receipts attached did not add up to the amounts of Imprests received. It was recommended that all Special Imprest disbursements should be fully retired at the end of the purpose or activity. The FS is also expected to explain the anomalies in reconciling the imprest amount to the receipts provided.
Official’s Response: The FS stated that Special imprest could be requested by various divisions of MoFED through the Financial Secretary for special activities e.g. workshops or seminars. He mentioned however that the concerns raised would be considered and officers requesting Special Imprest had been advised to surrender all receipts of expenditure after issuance of cheques for activities and services rendered in respect of special events.
As at the time of the report publication, “the special imprests are yet to be retired,” according to Audit Service Sierra Leone.
