By Omar Bah
A report from the National Audit Office on the 2018 government financial statement has revealed that the government’s incorrect use of exchange rates has resulted in a loss of D99,127,027.02 during the conversion of the Special Project Dollar account.
According to the auditors, they also noted balances totalling D1,241,041,349.67 in transit accounts at the end of the financial year.
“Transit accounts are temporary accounts that are supposed to be nil at the end of the year and the presence of monies there at the end of the financial year is an indication of a weak system control and can lead to various misstatements in the financial statements,” the report added.
According to the report, grants disbursements amounting to D332,534,430.00 disbursed directly to various sectors from multilateral and bilateral institutions were not disclosed in the 2018 government financial statements and even after auditors requested records of the grants disbursed during the year from the Ministry of Finance on several occasions, these records remained outstanding.
The report further disclosed that the government accumulated arrears of D554,576,012.90 with a commercial bank but these arrears were not disclosed in the 2018 financial statements and also, government’s liabilities of D40,524,000 was omitted from the 2018 financial statements which, the report added, can lead to understatement of government’s obligations and thus may mislead the readers of the financial statements.
According to the report, there was an understatement of D245,018,298.84 for the public debt balance included in the Financial Statements.
Loss of public funds
Also, according to the report, there were misappropriations of government funds from previous financial years resulting in losses of public monies amounting to D17,097,387.60 that were not fully recovered as at 31 December 2018.
This included Gambia Immigration Department (sea port): visa fee amounting to D1,302,000 which was received by the cashier but only D700,000 was paid to the government leaving a balance of D602,000, Brikama Health Centre- unaccounted revenue collections of D402,674.00, Brikama sub-treasury- unaccounted revenue collections of D6,592,172.50, Kerewan sub-treasury-unaccounted cash of D2,136,327.61, Janjanbureh sub- treasury- unaccounted cash of D521,000.00, directorate of National Treasury; un-authorised withdrawal of public funds from the Old TMA of D4,064,363.15, Department of Forestry, Parks and Wildlife- unauthorised transactions in a Project Account of D839,500.00, cash withdrawals not accounted for by the finance attaché at the Gambian mission in Guinea Bissau amounting to D390,000.32 and there was a reported fraud by the finance attaché at the mission in Paris on 14 February 2014 of €27,500 (D1,593,50.00).
The report further highlighted that from auditors testing of samples of payments made by the Government in 2018, they found out that D77,200,284 could not be confirmed as the payment vouchers were not presented for audit.
The report added that total payments amounting to D85,000,000 were made without adequate supporting documents and further expenditure of D306,877 incurred on travel expenses had no documentation.
According to the auditors, they identified an imprest of D15,286,063.90 that was not retired and remained outstanding as at 31 December 2018.
“This included a cash payment of D180,000.00 that could not be supported with documentation. Unconfirmed balances of D5,389,778,820 in respect of the statement of net-worth of State-Owned Enterprises (SOEs). These balances could not be established as the audited financial statements of these SOEs were not presented during the audit,” the report added.
According to the report, receipts for non-tax revenue amounting D10,794,500 were not supported with deposit slips.
The report further revealed that the minutes for the loan negotiation from the Islamic Development Bank with a loan amount of Islamic Dinars (ID) 1,800,000.00 and European Investment Bank with a loan amount of €57,000,000.00 were not presented during the audit. “Missing documentation casts doubts in the internal controls and can lead to fraud and mismanagement of funds,” the report added.
It also revealed that D23,675,354.00 was spent on procurement of eleven (11) vehicles of which initial payment of D14,761,004 was made in 2017 and final payment was made in 2018 but the delivery of Nine vehicles were made to the Office of the President before the contract for the procurement was signed in December 2017.
“As such, value for money may be compromised when due procurement processes are not followed (such retrospective approval of contracts and procurement has been a reoccurring issue in previous audit reports),” the auditors said.
The report added that a contract of D2,998,800.00 was awarded to a supplier who registered with GPPA for the supply of goods and not the delivery of service to rehabilitate the Independence Stadium for the celebration of the 2018 Independence Anniversary of the Gambia.
This, the report added, is serious breach of the GPPA Act and the Regulations and defeats the spirit of sound procurement practices as the said supplier might not have the expertise to carry out such services.
According to the report, there was no evidence of reconciliation performed between the government and a supplier to establish the amount of D47,524,850.00 claimed to be owed to the supplier of motor vehicles procured for cabinet ministers.
“In the absence of reconciliation, it will be difficult to establish the amount owed. There is a risk that the supplier could be overpaid and lead to losses of public money,” the auditors noted.
The report revealed that three former cabinet members of the former regime still owe an outstanding loan balance amounting to D1,394,432.30 as at 31 December 2018. “There is a risk that the outstanding balances will not be recovered resulting in losses for the government,” the auditors queried.
Licence for mining black sand
The report highlighted that a mining company was issued a licence by the Geology Department to begin mining black sand at Kartong, Sanyang and Batokunku beaches without subjecting it to tender, contrary to section 30 (1) of the Mines and Quarry Act. The report said there is high risk that the licence was awarded based on favouritism and that there is high risk of further exploitation of the said mining area without giving regard to the environment.
The auditors noted that the Geology Department did not maintain a cash book to record collections made in respect of licence fees and royalties on both sand mining operations and stone quarries.
“In the absence of a cash book, the accountability of funds becomes difficult to determine,” the report noted.
According to the report, the Geology Department did not also keep relevant records which include records for daily sand extracted as well as shipment exported out of the country by the licensed mining company.
The report highlighted revenues collected amounting to D15,229,117.67 in respect of cargo scanning fees from vessels at the seaport were omitted from the Financial Statements as a result of untimely remittance collection from November to December 2018, contrary to the dictates of the contract.
“We noted an overstatement of revenue amounting to D240,660,331 as a result of correcting understatements made in 2017,” the report noted.
The report revealed that monthly tax returns from GRA (Customs & Excise) revealed an understatement of tax revenue totalling D656,880.47 included in the 2018 Government Financial Statements.
“Revenue receipts and GTRs System generated receipts and GTRs for non-tax revenue totalling D11,688,141.08 were not presented for our review. These revenues could not be accounted for as the receipts remained outstanding thus leading to potential misappropriation of public funds,” report added.
The report added that revenue collections from various ministries and departments amounting to D2,366,315.50 were not deposited to the Central Bank in a timely manner. “There were collections amounting to D769,321.82 and D15,000.00 for the Department of Physical Planning and Abuko Nature Reserve respectively that were not recorded in the cash book and therefore susceptible to fraud and misappropriation,” the report noted.
According to report, revenue collection from the Mining royalties was also understated by D4,245,144 in the 2018 financial statements.
Suspected misappropriation of royalty collections
The report further highlighted that comparison of the quantity of sand mined against the receipts provided revealed that 35,484 (m3) of sand was extracted between June and July 2018, amounting to D2,306,406.00 that were deposited in the Geology Department’s bank account.
“However, there was no evidence provided to show that the revenue deposited to Geology’s bank account was transferred to the Consolidated Fund. We could not therefore, ascertain if the revenue was accounted for in the books of government. This is indicative of a weak supervision of revenues with increased risk of misappropriation of revenue,” the report added.
The report outlined that review of the billings for payments on loan number 071 and 074 (Implementation Component of the ECOWAN Project in The Gambia and Community Based Infrastructure and Livelihood Improvement Project) respectively, revealed over payment of D58,106,160.72 in respect of loan interests.
“We noted that 6 (six) projects received additional loans without going through the National Assembly for approval,” the report explained.