The NEWS (Monrovia)
30 December 2008
Monrovia — An audit report by the General Auditing Commission on the expenditure/administration of the Ministry of Finance has revealed that the Ministry should account for the unsupported expenditure of US$2,374,466.58.
The report said during the initial phase of the audit, auditors from the General Auditing Commission were informed by the Ministry of Finance that documents were not available for the period 2005/2006, but that only 65 pieces of payment vouchers valued at US$841,413.24 were presented.
Therefore, GAC auditors concentrated their work on the 2006/2007 reporting period for which they could not substantiate expenditure of US$3,636,677.62 for 2005/2006.
The GAC disclosed that payment vouchers used by the Ministry were not pre-numbered to ensure unique identity for each of them, adding that this could result in the non-detection of irregular vouchers raised in the name of the Ministry.
The report recommended that payment vouchers should be pre-numbered in serial order during printing.
The audit report further revealed that payments totaling US$3,181,544.03, for 2006/2007 fiscal year, were not acknowledged by the payees. This was because the payment vouchers did not have portions for payees to acknowledge receipt of the payments.
The GAC pointed out that there could have been impersonation of rightful payees. However, it mandated that the Chief Disbursing Officer should account for the checks he disbursed, noting that "all payees should acknowledge receipt on the payment vouchers and/or issue official receipts."
The Commission mandated that the Director-General of Debt Management should submit to GAC documents supporting payments of US$5,048,907.00 made so far for scrutiny in accordance with Chapter 59 of the Executive Law of 1972.
The audit report also indicated that payroll expenditure was not supported by vouchers.
Auditor General John Morlu said review of documents of the Ministry of Finance showed that out of the total expenditure of US$5,605,160.00 of the Ministry of Finance, as reported by the Fiscal Outturn Report, only US$4,799,281.00 was committed. Thus, an expenditure of US$805,879.00 was not committed.
The Auditor General recommended that the Minister of Finance should be made to account for the uncommitted expenditure of US $805,879.00.
The commission explained that there was a difference of US$728,296.00 between the total expenditure figures for the Ministry reported by the Fiscal Outturn Report and the Expenditure Report prepared by the Budget and Finance Unit. This was due to ineffective accounting system for the preparation of credible financial statements.
According to the report, the Minister of Finance should explain the difference between the two expenditure reports. Also, appropriate records should be maintained by the B&F Unit to enable it prepares credible financial reports on the Ministry.
"The Minister of Finance reported in the Fiscal Outturn that total expenditure of the Ministry for the 2006/2007 was US$5,605,160.00. However, total payroll costs, and other charges presented to me for audit amounted to US$3,230,693.42 leaving an amount of US$2,374,466.58 for which there were no supporting vouchers. Thus, the Ministry's expenditure for the 2006/2007 fiscal year may have been materially misstated," the report said.
Continuing, the audit report observed that the claimant identification process implemented by the Debt Management Unit of the Finance Ministry in the payment of domestic creditors certified as valid by the KPMG Report of 31 January 2008 and the IVC listings was flawed because business registration documents presented by claimants were not verified at the issuing agencies to prove their authenticity.
The GAC opined that there is risk that payments might have been made to wrong claimants, warning that claimants supporting documents should be verified.
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