GOVERNMENT AUDITED ACCOUNT IN the year 2011, presented to the National Assembly on Monday19 Sept 2016, and was adopted by the National Assembly on \wednesday 21 Sep 2016
PAC PEC RECOMMENDATIONS ON THE AUDITED ACCOUNTS OF GOVERNMENT OF THE GAMBIA FOR THE YEAR ENDED 2011
2.1 Do-presented Payment Vouchers
The issue of Un-presented payment vouchers has been a subject of previous management letters and audit report on the audit of the Government of the Gambia financial statements for 2011 showed that 162 payment vouchers were not presented for examination.
Out of the 162 documents (D6,129,930.24) that the auditors listed as un-presented,
117 documents (D5,902,026.47) were subsequently located and are available at the Accounting Unit of the Accountant General’s Department for inspection by the auditors.
Our investigation and observations reavealed that many of these documents were previously presented to the auditors, and were marked (with green pen) as seen.
Electronic copies of all payment vouchers and other documents, as raised and approved hy the ministries and departments, are also available on the IFMIS.
2.2 Payment Vouchers without Supporting Documents
The Auditor General’s report on the 2011 financial statement’s reported that 58 payments totaling D2,073,017.07 were made without supporting documents attached to the payment vouchers to substantiate payment.
During our investigations we inspected 47 (Dl,456,288.07) out of the 58 payment vouchers (D2,073,017.07) that the auditors said had no supporting documents at ill, and all of these have supporting documents to substantiate the payments. Efforts are being made to retrieve the remaining supporting documents.
The highlighted vouchers relate to project payments/disbursements that are normally initiated by letters of instruction to authorise the processing of the payments. These letters are attached to the payment vouchers.
2.3 Breach of GPPA Regulations/ Payment Vouchers with Single Quotations
The Auditor General reported that during the verification of the payment vouchers, they noted that payment vouchers amounting to D910,165.00 were supported with only one invoice as opposed to the three quotations required by the GPPA.
Eight out of the nine highlighted payment vouchers, amounting to D878,195.00, relate to payments in respect of Food and Food Services for the Gambia National Army and Gambia Prisons Services. These were tendered and contracted to suppliers, thereby not requring the usual three quotations. Evidence of the contract awards were provided to the auditors.
The relevant invoices were attached to these payment vouchers.
The provision of three quotaions for payments relating to maintenance of motor vehicles, for the remaining payment voucher, has been posing a challenge as diagnosing faults do also attract service charges. However, sectors are now fully complying with the provision of three quotations for maintenance of motor vehicles.
It is noted from the Auditor General’s report that virement were made in four
(4) budget line items totaling to D6,279,794.00 for which no budget line in the
approved 2011 Estimates of Revenue and Expenditure.
Budget lines can be funded through virements provided that they are duly authorised and approved in accordance with provisions of the Budget Management and Accountability Act 2004 Part V section30 subsection 5. All the budget lines identified were funded by quoting corresponding savings from within the approved budget.
All the virements were approved by the honourable Minister of Finance, and evidence of this is available for inspection.
2.5 Misclassification of Expenses
The Auditor General reported that 84 payment vouchers amounting to
D5,592,230.00 were charged to wrong votes.
After further review of the list of the 84 payments vouchers amounting to
D5,592,230.00 that the auditors claimed to be charged to wrong budget line, only
12 payment vouchers amounting to D297,965.00 may have been misclassified or charged to the wrong budget line.
2.6 Exclusion of Government Funds at Commercial Banks in Financial Statements
The Auditor General reported that a review of confirmations from commercial banks during the period of audit revealed an amount totaling D796,879.26 held in various commercial banks which were not disclosed in the financial statements and added that this is in addition to commercial bank accounts totaling D/7,646,324.25 that were identified in the prior year audit that remain undisclosed.
We have written to all the banks concerned to transfer all the funds in those accounts to the Government Consolidated Fund Accounts and get the accounts closed. However,the balance of the embassy account was transferred to the Consolidated Revenue Fund account, and the account has since been closed
2.7 Cash and Bank
The joint session observed from the Auditor General’s report that reconciling items arising from monthly bank reconciliation were not investigated and corrected on time. There is risk that errors and orfraud might go undected for a fond time if reconciliations are not done on the specific period it relates to.
Bank reconciliations are performed on a daily basis and reviewed by supervisors. Unreconciled items are adequately followed up at the level of the reconciliation unit and appropriate actions taken.
2.8 Dormant Accounts
It is reported in the Auditor General’s report that a review of the audited financial statement of the government revealed instances where accounts with substantial amounts, lay dormant for over two years, whilst the government is in need of funds.
An instruction to transfer the balances of the three deposit bank accounts to the Government Consolidated Revenue Fund Account, and get the accounts closed, was issued to Central Bank of the Gambia.
This was acted upon on 28th September 2015.However one of the accounts is active and cannot therefore be closed.
The Auditor General indicated in his report an unretired imprest balances of
D72,928,499.90 for the financial year ended 3F 1 December 2011.
The outstanding imprests totalling D72, 928,499.90 is cumulative as at 31st
December 2011. Out of this amount:
- D34,227,149.86 relate to retired expenditures from the Embassies and documentations are available
- Dll,345,616.12 have been retired by individuals, and documentations arc available
Several communications (including Ref: DE 57/0l/P.7 (55,)) have been sent out to the sectors to work on getting the outstanding imprests retired.
2.10Un-presented Loan Agreement Documents
Sixteen external loan agreement documents were submitted by Ministry of
Finance. These loans have outstanding principal balances of D1,813,841,000.00 as at 31 December 2011.
Out of the 16 loan agreements amounting to D1,813,841,000, 10 documents amounting to Dl,465,619,000 are available at the Directorate of Loans and Debt Management, for inspection by the auditors.
2.11Non-disclosure of Domestic Debt Holders
The auditor General reported that a review of financial statements revealed outstanding domestic debt balances of D9,454,271,000 for the year ended 31
December 2011, These domestic debts were not classified in terms of debt holders and could not therefore confirm the subscribers of these debts instruments. There is a risk that disclosures made in the financial statements are inadequate.
In the financial statements, domestic debt is classified by categories of debt holders and by instrument type, as prescribed in the Public Finance Act 2014. Hence, disclosures are provided under the following categories: CBG holding, commercial bank holdings and non-banking holding.
However, we do not provide confidential data of individual subscribers for public information.
2.12 On-lending to Government Business Enterprises (GBEs) Audit Query:
The Auditor General in his report on 2011 GoTG financial statement reported that a review of documents and discussion with officials at MoFEA reveal that government on-lend loans to Gambia Civil Aviation Authority, NAWEC, GAMTEL and Gambia Groundnut Cooperation were omitted from the financial statements.
MoFEA was unable to provide the total loans outstanding to these enterprises during the period under audit. There is a risk that disclosures of on lending GBEs are not accurate or complete, lending to misstatement in the financial statements.
The Government has the following On-lending agreements with State Owned
- Rural Electrification Project (EBID)- NAWEC
- Rural Electrification Project (ADF)- NAWEC
- Rural Electrification Project (BADEA)- NAWEC
- Rural Electrification Project (IsDB)- NAWEC
- Banjul Port Project II (ADF) -GPA
These are available for inspection at the Directorate of Loans and Debt
2.13 Non-disclosure of Grants Received
The Auditor General reported that his review of financial statements indicated that there were no grants received by government during the financial year ending
3r1 December 2011 but corroborative evidence received during discussion with
officials at MoFEA revealed that there were some grants received during the year
and concluded that the financial statements did not comply with IPSAS.
Government maintains two separate platforms for recording disbursement of grants and government financed operations. Grants disbursements are recorded in CS-DRMS 2000+ platform while government financed operations are captured in EPICOR platform. These systems were not interfaced in 2011 and hence were missing in the financial statements, which are produced from the EPICOR platform. The interfacing of the two systems is at an advanced stage and once completed would address this issue. However, this data is available at MOFEA upon request and is also published in the MOFEA annual debt bulletin. Efforts are being made to ensure that they are disclosed in the financial statements.
2.14Un-presented Revenue Vouchers
The Auditor General reported that 797 revenue vouchers totaling Dll ,OJ0,233.58 were not presented up to the finalization of the management letter. The total revenue amounts quoted in the financial statements might not be accurate.
All the revenue receipts are available for inspection.
The Auditor General reported discrepancy of DJ,999,000.00 was identified between withdrawals for national emergencies on note 24 (contingency fund) and
the Summary of Expenditure Re-allocated from U-allocated expenditure.
The withdrawals for national emergencies amounting to D8,891,000 on Note 24 (Contingency) is in line with the total virements from the Contingency budget line items as can be confirmed frcm the Itemised Virement/ Supplementury
However, we are currenlty analising the Re-allocation of Un-allocated Expenditure figure of D10,891,000 on the Summary Statement of Expenditure Re allocated from Un-allocated Headings to find the cause of the discrepancy between the two reports.
2.16GRA tax arrears not provided
The Joint Session noted from the review of the Auditor General’s report that the tax arrears were not provided by GRA and hence we could not confirm the outstanding arrears disclosed in the financial statements.
Their is risk that government would not be able to establish the full extent of tax arrears owed by individuals and corporations leading to increased risk of financial loss through tax evasion.
The joint session recommends that appropriate action be taken by the Ministry of Finance and Economic Affairs to ensure that the schedule of arrears of tax revenue is provided by GRA on a monthly basis. This will help identify individuals and corporations that have tax arrears at the year end.
Follow up was made with GRA who have provided the most recent list of tax arrears and its available for inspection.
2.17 Non Consolidation of Self-Accounting Projects
The Auditor General reported that the accounts of self-accounting projects have continuously been omitted from the consolidated government financial
statements over the years.
Self-accounting projects have not been consolidated because returns have not been received from the projects. Government has now made a decision to extend the IFMIS to all self-accounting projects to ensure that they are consolidated in the Government fmancial statements.
Currently we have extended the IFMIS to four self-accounting projects as a pilot. These are IFMIS II and the ISEFPG projects under the Ministry of Finance and Economic Affairs, READ Project under Ministry of Basic and Secondary Education and WARCIP under Ministry of Information and Communication Infrastructure.
Also as part of the IFMIS Additional Financing Project, the IFMIS will be extended to all the remaining self-accounting projects within Government.
2.18No reconciliation between MO.FEA records and Creditors
The Auditor General reported that there was no systemic reconciliation between the outstanding debt records maintained by MoFEA and creditor statements. Discussion with officials revealed that reconciliation is only performed on a needs
basis and it is limited to periodic confirmation of outstanding debt balances sent by creditors.
There has not been comprehensive reconciliation between MOFEA and our main
creditors due to the irregular meeting of operations officers of the parties concerned. Furthermore, creditors do not regularly provide periodic statements on the outstanding debt and this has also affected the frequency of debt data reconciliation. Efforts are being made to institutionalise regular debt data reconciliation between the parties. A representative of MOFEA was sent to BADEA, this year, to perform reconciliation on the outstanding debt. Also, there are plans to engage the remaining major creditors for the purpose of institutionalising debt data reconciliation.
2.19No record of Domestic Debt Information
The Auditor General reported that although the debt database at the Ministry of Finance has both the functionality and the capability to capture domestic debt information. However, the Ministry did not maintain any domestic debt information but instead relies on central/ Bank for its domestic debt information.
The responsibility of domestic debt management had been delegated to the CBG
through a memorandum of understanding. All domestic debt data is maintained by the CBG as stipulated in the MOU. However, the Ministry has started recording the domestic debt data in our debt recording system and is being reconciled periodically.