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GOB accounts full of irregularities – Auditor General reports

The United Democratic Party administration of Prime Minister Dean Barrow may have been elected to office on a promise of accountability and transparency, but  the Auditor General’s recently released report indicates their management of public finances has been anything but accountable.

Auditor General Dorothy Bradley has scrutinized Government spending of more than $890 million and revenue receipts of $840 million for the financial year 2010/2011, which ended on March 31, 2011.

Her report cites a litany of audit issues: revenue arrears not submitted as required, inadequate records management, pertinent information missing from computerized accounts, unreconciled bank accounts, unreconciled line accounts, contracts drawn up after the job was completed, deficient inventory management of assets, unsatisfactory accounting for government stores, and poor control over the use of government vehicles.

She found that the Accountant General’s office has too much of a workload and too many responsibilities to provide the strict , continuous and effective monitoring as required by the government’s financial controls.

Bradley recommends that  financial controls be removed from the Accountant General’s Office and that a separate Comptroller of Finance Unit be created within the Ministry of Finance, charged with responsibility to continuously monitor and implement controls within the various ministries and departments, working in line with an internal audit unit.

One major problem exposed by the latest audit is that accounting officers at the government departments and ministries have not been submitting statements showing the amount of money owed to the Government, which is referred to as “returns of arrears of revenue,” as they are required to provide to the Accountant General and the Auditor General every six months, in June and December, as required by Financial Order No.89.

The ministries and departments have not taken Order No.89 seriously, as the Auditor General’s office has had difficulty in obtaining accounting records from the various ministries and departments for advance payments to officers for purchase of products, fuel records, and source documents related to electronic payments.

The Auditor General also found they were handicapped in conducting effective audits because the computerized information systems implemented by ministries and departments lack all the necessary audit trails and internal controls which affect the accountability process.

This happened  because the Treasury Department and nearly all the departments that collect revenue have  implemented their computerized systems without consulting the Auditor General’s office during the planning stages; as they should have done in order to comply with Financial order No.658.

The audit also found that some government ministry and department  bank accounts had not been reconciled as required by Financial Order No.304.

Public officers authorized to keep a bank account should compare the entries in the bank statement with those in the cashbook at the end of each month.

The Auditor General also found that many accounting officers at numerous departments and ministries had not forwarded a detailed statement of receipts and payments to these accounts, to the Accountant General as they were required to do as soon as possible after year’s end as they were required to by financial Order No.536. That statement should have showed balance reconciled between the individual accounts and the general register in the Treasury books, also including an analysis of the balance in the control account.

The Auditor found that many projects were undertaken without adequate planning and proper authorization; because the contracts were drawn after the jobs were completed, which is completely contrary to the Finance and Audit Acts and Contractor General.

Several ministries and departments had contracted out jobs for services and projects before drafting the contract.

Government assets such as computers, photocopying machines, furniture and other equipment on which GOB had spent millions of dollars were not properly accounted for and safeguarded for lack of proper inventory management.

The audits also showed that accounting for stores is most unsatisfactory even though millions of dollars were involved.

Hospitals stock pharmaceuticals and medical supplies in stores, and the Ministry of Works keeps an inventory of vehicle spare parts and asphalt for road construction of roads, but many departments did not maintain proper stores ledgers. Others did not record items received and/or issued; others did not have proper security measures in place.

The auditor’s report revealed that control over the use of government vehicles is extremely poor. Logbooks were not properly maintained, odometers were not working and/or odometer readings had not been recorded, nor were the purpose of journeys, many of which were not authorized.

Private runs and misuse of vehicles went undetected because the Accounting Officers had not regularly calculated the average miles per gallon run for each month, nor had they verified that vehicles were running economically.

In some cases, drivers were using government vehicles as if they were in their private vehicles.

An investigation at the Toledo District Education Center revealed that a clerk had been defrauding the government of $69,272 because some original receipts did not match the corresponding duplicate copies, were not brought to account in cashbook, or unofficial receipts had been issued and the cashbook had been altered.

The sales reports submitted from the District Education Center did not include the books sold or the prices they were sold for.

The amount of funds received had not been reconciled with the books sold nor had any inventory exercise been done to determine what books should be on hand.

Another investigation at the Ministry of Labor, Local Government and Rural Development found that 27 payments totaling $115,041.15 had been made to vendors who purportedly supplied items or provided services.  A Second Class Clerk had used the system to create all the invoices.

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