EXCERPTS FROM THE 2015 AUDIT REPORT

 A slow response by those charged with governance to our message of embracing their responsibility to guide and direct the development and performance of a strong system of internal controls in ministries, departments and agencies (MDAs). This includes improving their oversight function, demonstrating effective and ethical leadership, strengthening the audit committees and insisting on credible and regular reports on the finances and activities of MDAs.
 A lack of consequences for poor performance and transgressions in general government.

This is evident from the inadequate response to the high levels of unauthorised, irregular as well as fruitless and wasteful expenditure, as detailed in the audit report in other paragraphs indirectly supporting the opinion; and the weaknesses in performance management, which include a lack of credible and effective performance management systems across MDAs.
 MDAs are not taking effective action to address the basic problems of lack of monitoring and supervision, and non-adherence to legislation, due to the outright disregard for established laws and regulations in the conduct of public financial business

The action of the executive arm of Government towards the implementation of the recommendations in the report of the Auditor-General, a report debated and approved by Parliament, has not been very effective in achieving the goals of improving public financial management reforms in Sierra Leone. Therefore the incidences of financial indiscipline continue to persist. The challenge we face is that when our report is sent to Parliament our elected representatives, meeting in committee, do not always demand a full accounting from officials for the issues raised. Parliamentary promotion of transparency in public administration and good governance is perhaps not as effective as it might be. This has forced us to consider why we are not having sufficient impact when it comes to audit findings and recommendations. We have however come to realize that there is power in the voice of the people. Recent audits, notably the report Management of the Ebola Funds, clearly confirm that indeed, where the citizens’ interest in our reports is aroused we can together encourage the government to embrace ‘accountability’. It seems that getting action and reaction requires that all parties – government officials, auditors and parliamentarians – must have something to lose.

Defence procurement

Some findings stand out as especially egregious and need to be highlighted.

In November 2013, the former Minister of Defence acting on behalf of the Government entered into agreements for the procurement and supply of 126 common use and specialised vehicles in two lots of 69 and 57 with two suppliers involving the sums of US$10,654,168 and US$5,058,368 respectively. A number of issues were identified with this procurement:

 Of the 126 vehicles ordered only 49 were delivered leaving a balance of 77 outstanding. A comparison of the invoice prices, the NPPA price norm, current market prices and prices of similar vehicles procured by other government agencies, disclosed that the vehicles were overpriced by Le30 billion (US$6.1 million). This was a clear manifestation of total disregard for the principle of economy in the use of public funds by those acting on behalf of the Government in the contract agreements.

 Some of the vehicles delivered did not match the specification in the contract agreement. For example, two ambulances were supplied instead of mini-buses. Two defective vehicles were returned to the supplier and up to the time of writing this report the vehicles, valued at $620,000, have not been replaced or fixed by the contractor. There were other deviations in specification as well.

 Although the contract required that “all taxes, levies and other expenses …” be borne by the supplier, there was no evidence that duty amounting to Le9.7 billion was paid.

 Even though the contract agreement stipulated that “the suppliers shall provide servicing parts for a period of one-year”, there was no evidence to confirm that the suppliers had complied or that these spares were ever provided to MOD.

 Stores management and record keeping
The essence of stores management is to receive materials, protect them while in storage from damage and unauthorized removal, to issue the materials in the correct quantities at the right time to the right place and to provide these services promptly and at least cost. For a store to carry out these functions effectively, it must have the right personnel and required facilities. Effective stores management is crucial in any healthcare delivery system. The Central Medical Stores and the various stores in the hospitals are not managed properly to support effective healthcare service delivery. Indeed, many of the stores, some dating from the 1940s, are so inadequate as simply to be not fit for purpose.

Stores management and record keeping

The essence of stores management is to receive materials, protect them while in storage from damage and unauthorized removal, to issue the materials in the correct quantities at the right time to the right place and to provide these services promptly and at least cost. For a store to carry out these functions effectively, it must have the right personnel and required facilities. Effective stores management is crucial in any healthcare delivery system. The Central Medical Stores and the various stores in the hospitals are not managed properly to support effective healthcare service delivery. Indeed, many of the stores, some dating from the 1940s, are so inadequate as simply to be not fit for purpose.
Record keeping and reconciliation procedures in the stores are very poor. Store records, such as issue vouchers, bin cards and prescriptions, are not maintained at the pharmacy/store.

 Management and disposal of medical waste
In a number of health facilities visited there were large piles of refuse at the garbage sites within the premises even though arrangements were in place for clearing and transfer of refuse to a designated dump site. At some of the facilities, the site is within the premises, close to wards and or blocks. As a result, pits were dug for the disposal and eventual burning of medical waste resulting in the release of noxious fumes close to health facilities. The incinerators where medical waste should be disposed of were in most instances faulty or unavailable.

FOLLOW-UP ON PREVIOUS RECOMMENDATIONS
MAIN POINTS

What we examined

The Auditor General’s Annual Report for 2010, 2011, 2012, 2013 and 2014 as well as management letters issued to a selection of audit entities were analysed. The purpose of the analysis was to determine which issues and/or recommendations had been repeated in one form or another over the five years. Actions taken were classified into three groups: implemented, not implemented or work-in-progress, the latter meaning that some work was being undertaken but had not yet been completed.

Why it is important

Much of our work is concerned with making professional judgements on compliance with the laws of Sierra Leone and with the maintenance of basic principles of internal control in the administrative, financial and accounting systems and practices used by the government. Our work is one of the pillars of sound public financial management and the recommendations we make are a fundamental part of improving it. The Constitution of Sierra Leone, the Audit Service Act 2014, and other laws are our authority to do this work. Public financial management in Sierra Leone is known to be weak if improving, albeit too slowly. We make observations on issues coming to our attention and provide recommendations for improvement to the public financial management system. With a thorough follow-up on recommendations, we are in the position to disclose to taxpayers improvement and deterioration in government programs and operations. The merits of such an exercise are not in the number of recommendations made, but in their effective implementation.

Government Ministers and senior members of the public service are charged with the responsibility of ensuring and properly guarding the public purse. Parliament, citizens and international donors have a right to expect nothing less. That is why this is important.

What we found

Almost without exception our observations and recommendations are not being given the attention they deserve, or that Parliament, citizens and international donors have a right to expect. Although our assessment for the five years has exposed an insignificant increase in percentage of improvement for five MDA’s, three have retrogressed by an average of 5%. For example, Freetown City Council has currently implemented 13% of our recommendations from 4% of our previous year’s assessment. The Office of the President, Ministry of Finance and Economic Development and Ministry of Mines and Mineral Resources have to date made an average increase of 15% on recommendations implemented, i.e. (21.3% in 2012 to36%in2014). Overall only 24% of recommendations have been implemented by the eight selected entities. In absolute numbers, for the five years 2010 to 2014 there were 935 recommendations for the selected entities of which 231 were implemented, 675 are a work in progress and 47 were not implemented.
 

We estimate there has been cash losses to the public purse of Le140,513,297,368. As in previous years this has occurred for a number of reasons, some inter-related suggesting strongly that public financial management has much room for improvement in all MDAs. For example:

 Monies allocated to some MDAs are not accounted for at all.
 Payments without adequate supporting documents persists in almost all the MDAs.
 Monthly bank reconciliations are not carried out in some MDAs, this is a fundamental failure of internal control over cash and banking procedures and the control should also be undertaken by persons with no access to the physical cash or bank statements.
 There are significant weaknesses in the management of revenue in most revenue generating entities. For instance, transferring funds to NRA is subject to unnecessary delay;
 We noted that in many cases, withholding taxes were not being deducted from suppliers or contractors’ payments.
 Several significant lapses were observed in procurement procedures resulting in incomplete transactions and hence unsatisfactory service delivery.
 Moneys intended to be managed by imprest accounts are not properly closed out or accounted for with the result that control over imprest accounts is weak and analyzing and posting expenditure accurately to ledger accounts is seriously impaired.
 Fixed assets, stores and fuel records are not adequately recorded in applicable registers and other records. In addition, although there has been some improvement over the years, there are still significant seemingly reluctance in making available requested documents to our audits for review. The extent to which our recommendations for improvement in controls remain unimplemented is not acceptable and many entities have failed to make adequate, if any, responses to our findings. The findings, expanded upon in greater detail below, do not inspire confidence that resources are being managed optimally with due regard for economy, efficiency or effectiveness or fully in accordance with the intent of Parliament.

5.9. MINISTRY OF MINES & MINERAL RESOURCES-HQ (2014)

5.9.1 Performance Contract not submitted

The Performance Contract signed between the President and the Minister and the appraisal of the contracts were not produced to assess whether the targets set out in the contract were achieved by the Ministry within the specified timeframe. It was recommended that the PS should ensure that the performance contract is submitted for inspection.

Official’s Response

The PS stated that the performance contract signed between the President and the Minster was produced for audit inspection. He however said they did not have control over the appraisal. He further said that the office of the Chief of Staff (CoS) should be able to provide the result on the contract signed.

Auditor’s Comment

It was observed that ten of 17 performance targets set out in the Performance Tracking Table (PTT) signed between His Excellency the President and the Minister of Mines and Mineral Resources were not achieved by the Ministry at the targeted timeline during the year under review.

5.16. MINISTRY OF DEFENCE –NORTH (2014)

5.16.1 Take home rice not accounted for

A careful scrutiny of the rice supply distribution list showed that 328 bags of rice were supplied to the 4th Brigade in Makeni during the year under review. However, documentary evidence submitted to the team for review revealed that only 180 bags of rice were received; leaving 148 bags of rice valued at Le24,989,800 unaccounted for. It was recommended that the Officer in-Charge of rice at the Ministry of Defence should submit adequate justification for the variance supported by relevant documentary evidence; otherwise, the said amount should be refunded and evidence of payment forwarded to the audit office for verification within 30 days of the receipt of this report and in future, carry out regular monthly reconciliations between the rice supply distribution list and the actual quantities received and differences highlighted for necessary action.

Official’s Response

The Brigade Commander stated that the relevant documentary evidence to justify what was received and what was distributed was produced and maintained. He added that the necessary reconciliations between records from HQ and what was actually received in the region to account for the quantity and amount is in progress. He also noted that the relevant documentary evidence was available for verification to account for the 184 bags valued at Le24,989,800.

Auditor’s Comment

The relevant documentary evidence to account for the variance of Le24,989,800 was not submitted for verification. The issue therefore remained unresolved.

5.16.2 Ration cash allowances

A total amount of Le277,312,784 was given in cash instead of cheque to the 4th Brigade for ration cash allowances. The monies were to be used to purchase condiments and other items for the well being of personnel at the brigade. However, the amounts received were never deposited into an account so as to instil expenditure controls in the processing of payments. This apparent lack of control had resulted in transactions being undertaken without due regard for proper financial management.

During the course of the audit, we realised that payments which totalled Le219,575,688 were made to four suppliers for the purchase of food items, provisions and other assorted items. Further enquiries on the four purchases revealed the following:

 A total payment of Le110,990,788 was made to a supplier for the purchase of condiments during the year under review. Discussions held with the proprietors revealed that the said items were never procured from them. In the same vein, the mobile phone number quoted on the receipts was non-existent. However, the proprietors of the business refused to sign the management representation letter to confirm their declaration.

 The audit team was unable to verify the payment of Le62,295,000 purportedly made to a supplier as the subscriber (who was called by the audit team) to the mobile phone number quoted on the receipt denied ever transacting business with 4th Brigade. He even denied being a businessman.

 The business address, of Anita Enterprises at No. 43 Albert Street and the mobile phone number quoted on the receipt were non –existent. Of utmost concern, was the fact that the mobile phone number used on the receipt was that of a mobile company that ceased operations sometime in 2012. A total payment of Le40,759,900 was said to have been made to Anita enterprises.

 Provisions and other items were said to have been purchased for an amount of Le5,530,000 from certain business concern. However, a spot check carried out revealed that the business enterprise only deals in spare parts and not provisions. Third party confirmations were also received from Mohamed P. Bah confirming that he never supplied the 4th Brigade nor dealt in provisions.

It was recommended that the Brigade Commander (BC) should ensure the following:

 The institution minimises its potential exposure to financial fraud, through the use of a robust system of internal controls. In this regard, segregation of duties should be instituted in the ordering, authorisation, recording and payment for goods and services.

 All monies received should be deposited into an account before monies are expended. In this regard, suppliers should be paid by cheque instead of cash, after the relevant procurement and payment processes have been followed.

 An in-depth investigation is carried out into the whole procurement processes at the Brigade and the report on the outcome of such investigation is forwardedto ASSL for verification within 30 days of the receipt of the report.

Official’s Response

The Brigade Commander said he noted the concern as the said supplier had been in business with their institution all the time but due to late and inappropriate suppliers, few items were not procured from them though the majority was done with those suppliers. He however mentioned that the invoices and receipts had been reconciled for audit inspection and moreover, there were local and illiterate suppliers that probably in fear failed to make those representations. He furthermore said that those controls were beyond the regional office to open and maintain account and that they would refer to HQ for further verification.

Auditor’s Comment

The audit recommendation was not adhered to by the ministry

5.16.3 Outstanding issues in the previous year’s audit were as follows:

 bags of rice with amounts totalling Le9,240,000 were not accounted for; There were no records for fuel consumed amounting to Le23,175,000;

 Withholding taxes amounting to Le9,867,750 were not deducted and paid to the NRA;

 The sums of Le34,710,000 and Le15,000,000 given to the 4th Brigade Headquarter and the 4th Battalion as ration cash allowances and imprest were not retired;

 The state of the staff quarters for both the 4th Brigade Headquarters and the 4th Battalion was far from pleasant; and

 The quarters lacked basic facilities like water, electricity, proper toilets and kitchens.

5.17. MINISTRY OF HEALTH AND SANITATION-HQ (2014)

5.17.1 Procurement of 123 Hard-Top Ambulances

In November 2014, the Ministry of Health and Sanitation entered into two separate contracts for the supply of 61 and 62 hardtop ambulances at a total cost of US$4,571,950 and US$4,619,000 respectively. Examination and scrutiny of the procurement documents and records revealed that the MoHS made an advance payment of 60% of the total cost, the equivalent of Le12,961,571,000 ($2,743,170) and Le13,094,959,228 ($2,771,40) to the companies respectively, in contravention of section 135(3) of the Procurement Regulation 2006 which stipulates that “the total amount of an advance payment should not exceed 30% of the total contract price.

Even though the contract agreement stipulated that the 123 ambulances should be delivered at the Central Medical Stores, New England Ville by 25th December 2014 (30 days following the receipt by the supplier of a notification of award of contract from the MoHS), it was noted with dismay that up to the time of writing this report, it could not be confirmed that the supplier had complied or delivered the ambulances.

Although the Advance Payment Guarantees and Performance Bond expired on 10th August 2015, no documentary evidence was seen on file to show or indicate that the supplier, had renewed the required documents that the MoHS, acting on behalf of the government, should resort to, in the event of failure/ default on the part of the suppliers to fully deliver the ambulances.

It was recommended that the PS:

 Should provide adequate explanation supported with documentary evidence why 60% advance payments were made to the suppliers in violation of section 135(3) of the Procurement Regulation 2006.

 He should also ensure that the complete number of ambulances was delivered to the Ministry before the final payments were made and the suppliers must deliver the 123 hardtop ambulances at the Central Medical Stores within 30 days of the receipt of this report, failing which, the contract should be cancelled and the necessary recoveries made and evidence of recoveries submitted to the Audit Service.

 Should also ensure that the contractor submits the renewed performance bond within 30 days of the receipt of the report, otherwise the matter will be forwarded to the relevant authority for further investigation.

Official’s Response

The PS in his response said the following:

 “60% advance payments were made to the suppliers in February, 2015 as provided for in both contracts.

 The advance payments to both companies came at the instance of a Procurement Committee decision in a meeting dated 24th November, 2014.

 Minutes of the said meeting available for review of the Audit Team used the emergency/crisis situation in the country at the time of the procurement when the Ebola virus disease was raging. The Committee therefore thought it appropriate to do everything possible to ensure that financing was not a bottleneck in procuring the ambulances which were badly needed in the fight against the Ebola virus

 The recommendation of Auditor General will be strictly adhered to as final payments to both companies will only be effected after full deliveries are made, proper inspection conducted on the ambulances and all dues to agencies concerned paid.

 Najet Company Limited has already delivered all the 62 hardtop ambulances as per contract. D & S Associates (SL) Limited has delivered 28 out of 61 hardtop ambulances. They have also in a letter dated 27th October, 2015 informed the Ministry that 14 of the remaining 33 ambulances will arrive at the Queen Elizabeth II Quay on 30th October, 2015. The company will update the Ministry on the expected arrival of the remaining 19 ambulances.

 The Ministry of Health and Sanitation (MoHS) has requested D & S Associates (SL) Limited to submit renewed Performance Bond and Advance Payment Guarantee as indicated in the Audit Report. Najet Company Limited has completed deliveries of the 62 ambulances as per contract.”

Auditor’s Comment

The minute of the Procurement Committee was not signed by members that were present at the meeting and the decision to pay 60% advanced payment was contrary to the section 135(3) of the Procurement Regulations of 2006.

During the verification only 90 ambulances were supplied by the contractors leaving a balance of 33 ambulances not supplied. The audit team further noted that the 90 ambulances were not yet put into use.

The renew Performance Bond for D&S Associates was not submitted for verification, and the Ministry failed to fall back on the issuer of the performance bond for recovery.

5.17.2 Duty free or waiver granted to D&S Associates and Najets Company

Although the invitation to bid documents stated that bid prices shall be inclusive of all taxes, duties and transportation, it was observed that there was no evidence that duties payable on the ambulances had been made by the suppliers D&S Associates and Najet Company without any evidence of parliamentary approval. It was recommended that the Permanent Secretary should ensure that the suppliers should pay all taxes to the National Revenue Authority within 30 days of the receipt of the report; otherwise the amount should be deducted from the outstanding payments to the suppliers.

Official’s Response

The PS said that payment of full dues to NRA will be deducted from source for both companies. He said that arrangement had been discussed and agreed with Najet Company Limited and similar negotiations will be conducted with D & S Associates after delivery of the remaining 33 ambulances.

Auditor’s Comment

The custom duties have not yet been paid to NRA.

CONNAUGHT HOSPITAL (2014)

5.18.1 Insufficient supply of key equipment to the various departments of the hospital

Interviews conducted with senior personnel and physical observation revealed that there was insufficient supply of key equipment to the various departments/wards of the hospital. Few instances are given below:

 There was no functional centrifuge in all the units of the laboratory. This machine helps to fast track the testing process and shortens the turnaround time. Due to its unavailability, the processing of all biological liquids was done manually and this lengthens the turnaround time. The wards lacked sufficient essential equipments required for nurses to provide adequate care for in and out-patients. It was recommended that the Director of Training Hospital & Laboratory Services should ensure that the hospital was provided with essential equipment at the various departments in the immediate future. The Hospital Care Manager in collaboration with the Director of Hospital and Laboratory Services should also ensure that the mechanical refuse feeding device was replaced;

 ICT equipment like computers, printers, scanners, etc was inadequate at the hospital. The hospital also did not maintain automated records system and the air conditioners in the laboratories were defective and exposed the chemicals to risks of high temperature. It was recommended that the Hospital Care Manager should ensure provision of such equipment were provided to facilitate the proper management information; and should also ensure that immediate maintenance is done to the air conditioners or replace them with new once within 30 days from the receipt of the report.

Official’s Response

 The Hospital Secretary in replying to the audit query said “Management has been working assiduously through the Ministry of Health and Sanitation to procure supplies for the wards and departments in the Connaught Hospital. Several requests have been made for items such as – bedside lockers, screens, oxygen cylinders, wheel chairs, drip stands, bed pans, trolleys and dressing equipment however, only limited quantities have been supplied to the Hospital’s stores. The equipment supplied had since been distributed to the wards and departments. Infection prevention and control procedures during the Ebola epidemic caused damaged to some of the furniture and other devices however, the Hospital Management is putting mechanisms in place to replace some of the items like window curtains in the wards.

 A centrifuge is not as critical for the proper functioning of the Laboratory like blood-gas and electrolyte analysers as well as other equipment which are presently unavailable. Management has prepared and submitted lists of essential laboratory and other equipment needed in the Hospital to the MOHSBlood pressure machines were recently supplied to the wards. Scales are available. Pulse oximeter`s are available where they are routinely needed. More operating theatres and Intensive Care Units are needed to support the Accident and Emergency Department.”

 The Hospital Secretary said that the Hospital in 2014 to date had given a facelift to its service delivery and patient and staff welfare. He added that due to the EVD outbreak in 2014, the Hospital had focused on life saving measures such as infection prevention and control (IPC) and training. In spite of the numerous competing interests for limited available resources, Management considers ICT equipment very crucial for the proper functioning of the Hospital, he noted. He mentioned that management was in the process of soliciting assistance for the establishment of a robust ICT facility.

 He further said that a total of four air conditioners were faulty and beyond repairs in the laboratory and management had procured three as replacement for the faulty ones and they have already been replaced. He affirmed that work was ongoing for the installation of the remaining one air conditioner in the laboratory.

Auditor’s Comment

The audit team observed the following during a verification exercise:

 Managements’ response to the need for supply of essential equipment to the wards and departments was noted but the ASSL recommendations were yet to be implemented by the hospital.

 There was no evidence that action has been taken by management to establish a robust ICT facility in the hospital.

 There was no evidence that three air conditioners were procured and installed in the laboratory.

5.18.5 Lack of adequate free health care drugs at the hospital

Interviews conducted with patients in the Paediatric Ward (ward 1) in respect of the free health care drugs revealed that some of the essential drugs prescribed for them were not available at the hospital. Therefore, patients had to purchase the drugs from the hospital’s pharmacy or elsewhere. It was recommended that the Director of Drugs and Medical Supplies should ensure that adequate free health care drugs were supplied to the hospital at all times.

Official’s Response

The Hospital Secretary stated that Free Health Care drugs were not sold to patients and the hospital pharmacy did not sell paediatric formulations but only dispense drugs that were available under free healthcare to lactating mothers and children under five. He said that mostly, drugs requested for patients were most times unavailable and that supplies were sent to the hospital based on what was available and not what was requested by the hospital. He further mentioned that patients under the free health care category were mostly supplemented with the hospital Management drugs (i.e. drugs procured by the Hospital Management).

Auditor’s Comment

Interviews with parents/guardians of patients revealed that not all of the drugs were given to them for free.

5.57. SIERRA LEONE EMBASSY- WASHINGTON DC (2011-2013)

5.57.1 Inadequate controls over the collection and accounting for revenue

The following were observed:

 Visa stickers were not available in the embassy; instead, rubber stamps instead were used for visas. Accountable documents such as emergency travelling certificates were printed locally (in the USA) and receipt books, purchased at stationery shops. The Embassy had sent frequent requests to the MOFAIC for the replenishing of visa sticker books, receipt books and other accountable documents. The MOFAIC had informed the Embassy that the Immigration Department was in short supply of the aforementioned items and it will be replenished as soon as they were available.

 A review of the Visa stickers’ monthly cashbook revealed that a total of $2,442,245 was collected as revenue. It was observed that revenues collected for the period under review were used for normal transactions of the embassy, with few exceptions when an amount of $225,000 was transferred to the CRF and specific instructions were received from Freetown for the use of consular funds.

 In the earlier part of 2014, reconciliations were done with the front office register to ascertain the total revenue collected. Receipts were also issued at the front office for all transactions; the register maintained was also signed off by the financial attaché to verify total cash received. This was in reaction to a circular issued relating to the streamlining of visa applications on the 19th of March 2014, this practice has however been discontinue during the year. The auditor had problems reconciling the front office register, (which should capture all consular transactions) and the cashbook maintained by the various officers assigned to carry out consular officer’s roles. The register of transactions was inconsistent: it was difficult to identify daily takings in the cashbook. The audit exercise applied various tests to ascertain the effectiveness of revenue controls. It was revealed that controls were weak. Therefore, figures recorded in the cashbook could not be reliable upon.

5.57.4 Other Charges

A payment of $26,090 was made to a hotel as advance booking for the presidential working visit to United States of America – Washington DC. In addition, an amount of $20,000 was received by the embassy from the state chief of protocol, as refund of expenses relating to the presidential entourage, this was used to offset part of the hotel bills as per instruction by the head of chancery, and cash payment was then made to the hotel. The total payment made by the embassy was $46,093, which included expenses relating to other delegates who were not part of the presidential entourage. However, there was no evidence to prove that those delegates reimbursed the embassy for bills paid on their behalf. It was recommended that all such transactions must be done through the banking system and recorded appropriately in the books of accounts. The HOC should also clarify the issue of the other delegates not reimbursing the embassy for expenditure incurred on their behalf.

5.59. SIERRA LEONE MISSION IN NEW YORK (2011-2013)

5.59.1 Controls over Consular Fees

A review of the controls over revenue administration in the Mission revealed the following:

 A summary of visa stickers’ revenue as recorded in the Consular Officer’s Report indicated total revenue of $512,881 for the period under review. Although visa stickers’ revenue was banked intact, the said revenue was later utilised by the mission for running costs. According to the Head of Mission, the revenue was used to meet the mission’s regular expenditure because of short fall of remittances to meet their commitments.

 Considerable time was spent to reconcile monthly returns and the financial attaché’s record of banking as per bank statement. There was no evidence regarding the rationale of fixing fees especially those related to visa fees increment and other charges. In addition, there was no conspicuous display of rates and charges for services rendered in the mission. It was also observed that unused visa stickers, receipt books, payment vouchers and emergency travelling certificates were not properly safeguarded, as they were in a cabinet which was in the financial attaché’s office shared by another officer. It was also observed that measures had been taken to receive money order for all services to customers, discouraging the payment of physical cash.

 The unavailability of visa stickers, receipt books and Emergency Travel Certificate (ETC) in the mission was noteworthy. Sometimes the mission had to resort to getting supplies from Washington. This, according to the mission, necessitated the printing of ETC and receipt books locally in the USA.

 The auditor was informed by the Permanent Representative that there were other revenue streams which did not reflect in the cash book during the period under review (ETC and Visa Expediting fees).The amount collected could not be quantified and it was unclear how this money was utilised.

The following were recommended:

 The MOFED must put adequate mechanisms in place to safeguard revenue generated and also ensure that the mission was adequately resourced to prevent the recurring problem of the use of proceeds from consular fees;

 All revenue collected by the visa issuing officer and all other services must be recorded and reported in the returns prepared for revenue collection;

 Monthly reconciliation should be done between the officer responsible for issuing visas and other revenue and the financial attaché who was responsible for banking revenue and should be checked by the HOC;

 For all fee charges at the mission, a written approval should be obtained from the Ministry of Foreign Affairs and International Cooperation to avoid arbitrary rates being applied;

 The mission should display conspicuously, charges for all services rendered with details including that no fees should be paid in cash and receipt be demanded for all such transactions;

 There should exists a new system of making payments for services by money order and that the mission continued to use that system which should be backed by regular bank reconciliation;

 All revenue streams to be introduced in the mission should be agreed upon with the MFAIC and fee charges to be applied should also be agreed on; and

 The HOC should explain the issue of the unaccounted revenue that was generated which was not quantified due to the unavailability of receipts.

5.59.2 Payroll Administration

The following were observed:

 The payroll submitted by the Accountant General was adjusted to reflect the situation existent at the mission, especially that relating to loans repayments and deletion from payroll.

 The rent allowance on the payroll voucher submitted by the Accountant General for the Permanent Representative who was then occupying an official residence, was used to pay off the mortgage in respect of a property of the Government of Sierra Leone.

 Some staff were being paid allowances for children above 18 years and no explanation was given on the matter. The sum of $20,700, an amount which was included in the Accountant General’s payroll voucher, did not reflect the facts in the personal files of the affected staff in relation to the above allowances.

 Loans were given out to staff and recovered on payroll prepared by the mission but there was no local policy in place for those loans.

 There was no approved condition of service for the local staff.

 There were no separate bank accounts for salaries and allowances; one account was maintained for both other charges and salaries.

It was therefore recommended that:

 Updates as and when necessary should be given to the Accountant General’s Department to enhance the update of salary database to reflect current salaries and allowances of mission staff;

 The salary voucher should be updated to reflect the correct entitlement of the Permanent Representative;

 The status of all expatriate staff in relation to education allowances should be reviewed and necessary adjustments effected in the payroll;

 A policy should be developed that would guide the issuing of loans to staff;

 The draft conditions of service should be reviewed and approved by management for implementation;

 There should be separate bank accounts maintained for both salaries and other charges expenditure; and

 The practice of using the rent allowance of the PR for other purposes should be stopped forthwith and payroll should reflect the correct entitlement of the PR as he was occupying a government property.

5.59.3 Cash and Bank Management

Even though bank reconciliations were done for the period under review, it was observed that the reconciliations were not checked and signed off by an independent reviewer. There were items in the bank statements that were identified as debit card transactions for which details could not be identified and therefore could not be placed under specific expense head in the cash book. These were reflected as a bulk figure in the cash book that amounted to $17,617 in 2011. In addition, funding of $45,000 was received from the government of Azerbaijan, to facilitate the repairs of the mission’s properties. That money was still held in the building special account. The mission was in possession of a debit card which is at present in the custody of the financial attaché. He used it mainly for online transactions. There was no documented guideline relating to the use of this debit card. It was recommended that monthly reconciliation be mandatory and that should be done promptly for management information even if there was no movement, and signed off by someone independent of the preparer. In addition, the HOC should give an explanation regarding the unexplained transaction of the $17,617; otherwise; the whole sum should be refunded. In future documents relating to all direct bank transactions should be made available and charged to the relevant expense head in the cash book. The $45,000 donated for building refurbishment should be preserved in the account and used for its intended purpose. A clear written policy should also be developed for the use of the debit card to avoid misuse and limits should be established for the use of the card. Proper authority must be obtained at certain levels of authority in the mission for certain transactions. In all cases documents relating to transactions should always be available for inspection.

5.59.4 Properties of the Mission

A. Chancery Office at 245 East Street, New York

This property which is a freehold property of the government of Sierra Leone was in such dilapidated state that it was not allowed to be insured by insurance companies in the USA. The property posed health and safety hazards to employees especially during winter and according to staff, the heating system was out of order and the basement flooded when it rained.

B. Residence of the Permanent Representative - 84 Pine Brook Road, New Rochelle, New York 10801

This was a property mortgage with a balance of $166,033 to be paid on or before 31st of December 2014, with a threat of repossession if not fully paid by that time. The risk of the mortgage arrangement was that another property of the mission was used as lien for the arrangement and therefore the said property was at risk of being confiscated if the amount was not settled by the due date. The service agent categorically stated in a letter of 16th April 2013 that the arrangement could not be further negotiated after December 2014. Physical verification done on this building revealed that it needed urgent refurbishment especially outside the building structure, considering the level of officers living in the premises.

C. Residence of the HOC -21 Lincroft Road, New Rochelle, New York 10804

Physical verification was done on the building and it proved that it needed a huge amount of refurbishment. There was a threat of fire hazard as water was slipping into the panels in the basement. The backyard step also posed safety concerns as it was falling apart and in need of urgent repair. The auditor was unable to visit all houses in which the mission owned assets with the exception of the Deputy Permanent Representative, who had assets that were reflected in the fixed assets register. The policy relating to furnishing of officers’ residence was of concern and it was in the condition of service that officers should be provided with furnished accommodation. As a result of that, officers made arrangement for their accommodation and furnished them to whatever extent, without any guidance, and claimed refunds from the mission for expenditure incurred. The following were recommended:

 There was need for improvement in the format of the fixed assets register to reflect all relevant details of the assets held by the mission;

 The mission should display the inventory of assets at all locations in the office;

 The HOC should work out mechanisms to visit locations where the mission had assets and note conditions of those assets for necessary action;

 There should be some guidance in the acquisition of assets for staff assigned to the mission. The ministry should develop a policy guiding this facility;

 There was dire need for arrangements to be made for the refurbishment of those premises; to bring them to a more habitable state; and

 There was need for the offset of the mortgage balance to prevent government from losing those properties.

5.59.5 Special remittance for rehabilitation of the government properties owned by the mission

The following were observed:

 A sum of $533,704 out of a request for $1,000,000 was remitted to the mission in April 2010 for the rehabilitation of the chancery building. It was later deposited into a special account held at ITI bank. This amount was utilised as part payment of the mortgage of the property occupied by the Permanent Representative on the approval of the Minister of Finance and Economic Development in the year 2012. A memo was prepared by the HOC and approved by the Permanent Representative for use of the fund to meet the payment of the mortgage. However, no correspondence was seen requesting the balance of the original amount requested.

 Sierra Leone was donated with an amount of $2,000,000 which was yet to be remitted to New York for the rehabilitation of the properties, especially the chancery building, that was in a state not befitting an international diplomatic centre. It was recommended that adequate resources be provided to meet the refurbishment of the property and proper procurement procedures should be followed in line with good practice guided by the PPA 2004 when the mission sourced contractor for the rehabilitation work.

5.59.7 General issues

 It must be a policy that HOCs are familiar with financial management issues by being in possession of and reading various financial management acts and regulations. This will better guide them in supervising and administering sound financial management practice during the course of their work. The issue of handing over note for both the PR and HOC was of concern. A smooth transition required proper handing over notes. According to new mission officers, no proper handing over was done when they took up office. The auditor was also not presented with any form of taking over note by the above officers.

 A post review of the payroll and organisation chart revealed that the mission was short of two senior staff; one was due to be transferred to another station and the other was ill. It was recommended that for the officer transferred, measures should be put in place for a replacement, and administrative action should commence for the staff that had been away for a prolonged period. The continued absence of these two key officers would affect the delivery of service of the mission.

 The Permanent Mission of Sierra Leone to the United Nation is a vital hub for the country’s multinational diplomatic engagement in the global framework; the mission’s work being operational within the mandate and framework of the United Nations. The mission’s representatives participate in regular member state deliberations on a multitude of critical challenges facing the world today; Sierra Leone being one such country. Based on the above, an effective operation of the mission was therefore very critical, that will definitely gain optimal reward for Sierra Leone both socially and economically. Given the national interest to contribute more effectively to multinational diplomacy, there was the need to strengthen the mission’s capacity especially financially, for it to be able to participate in activities at the UN headquarters as well as other UN programmes outside the United States of America.

 The mission was grossly underfunded and could therefore not fulfil its core mandates and also not in a position to showcase Sierra Leone by inviting other diplomats to its office because of the deplorable state of the premises. According to records submitted to the auditor by the mission, the estimate submitted to Freetown for 2013 financial year was $621,680. However, only $124,582 was remitted with a very huge short fall of $497,098. Government is appreciated in its strides to meet all its commitment due to revenue inflows, but more effort should be made to enhance this very important mission.