6.27. Sierra Leone Anti-Corruption Commission (2009)
184.108.40.206. Internal Audit Unit
The Internal Audit Department lacked the necessary manpower to carry out its work effectively. Actions on the Internal Audit reports had generally been slow to come, if at all. There were no responses to the issues raised from the Departments concerned. The Audit Committee was not fully constituted during the period under review. It was also evidenced during a review of the Audit Committee file that the committee only met once during the period under review. The Committee also did not provide adequate oversight function to the Internal Auditor.
It was therefore recommended that the membership of the Audit Committee must be normalized. Furthermore, the Audit Committee should meet regularly to discuss and review issues raised by the Internal Auditor.
The Commissioner, in his reply, stated that the Commission was pleased to report that necessary action had been taken to promptly address queries/issues raised by the Internal Auditor during the course of the period under review. He mentioned that on the matter of recruitment of additional staff to boost the manpower in the Internal Audit Unit, plans were underway to engage additional staff in order to enable the Unit carry out its work more effectively. He added that a vacancy announcement had been prepared on that note.
On issues relating to the Audit Committee, the Commissioner stated that the Audit Committee had been reconstituted and had also been requested to immediately call a meeting to map the way forward in ensuring that adequate oversight function was provided to the Internal Audit Unit.
6.27.2. Procurement Committee
The Procurement Committee was not involved in all procurement contracts entered into by the Commission during the year under review. Examples of such circumstances were the purchase of six Land Rover engines costing Le 132,510,505 and the contract for the construction of the sub-office at Kenema.
It was therefore recommended that the Procurement Committee should be involved in the administration and monitoring of all contracts undertaken by the Commission except in circumstances where the amount involved was below the threshold set by the National Public Procurement Act, 2004.
The Commissioner in his reply stated that:
The procurement Committee had and continued to be fully engaged in procurement processes.
There was sufficient evidence to confirm that and minutes of all procurement meetings provided supporting evidence to confirm same;
The Commission, guided by the relevant provisions of the Public Procurement Act 2004 in particular paragraph 46(b), decided to sole source the purchase of the six land rover engines since it was considered as parts for existing goods;
The engines were not available for sale in spare parts stores locally; and
While noting the observations in respect of the procurement of services for the construction of the Kenema office, the Commissioner however stated that the process started in November, 2009 and continued up to the first quarter of 2010. Signed minutes of the Procurement Committee meeting of 5th July 2010, provided sufficient evidence of the involvement of the Procurement Committee in the process.
6.27.3. Accounting Manual
The Commission did not have an approved Accounting Manual incorporating all financial rules and regulations as an aide and guide to the finance function, in the execution of its operations. It was recommended that the Accounting Manual should be finalized and approved to assist and guide the finance functionaries in the performance of their duties.
The Commissioner explained, in his reply, that the commission was in the process of reviewing the draft accounting manual put together by the consultant contracted to undertake that activity. He added that it was hoped that the final and approved accounting manual would be available shortly.
6.27.4. National Anti-Corruption Strategy
Top-up salaries intended for staff at the Secretariat to the tune of $40,800 were not paid to those staff. Instead the monies were transferred from the Commission‟s project account at Access Bank to the Commission‟s salary account at the Sierra Leone Commercial Bank, and utilized as general staff salaries.
However, returns sent to the donors indicated that such monies were paid to staff at the Secretariat, thereby misinforming the donors.
The appointment of the NACS Director from the position of Senior Officer to that of Director was not done in accordance with the Commission‟s conditions of service.
Funds provided for training of staff at the Secretariat were not properly utilized as only the NACS Director attended such trainings. This was in contravention of the Memorandum of Understanding signed by the Commission and the United Nations Peace Building Fund.
It was therefore recommended that all outstanding top-up salaries should be paid to the staff at the Secretariat, as stipulated in the Memorandum of Understanding. In addition, the appointment of the NACS Director must be properly looked into and necessary action taken to regularize the anomaly.
Furthermore the Commission should ensure that all unused funds should be remitted to the donors as stated in the Memorandum of Understanding.
The Commissioner noted the Audit observations and recommendations regarding the non-payment of top-up salaries to staff of the Secretariat. He highlighted below a synopsis of the transactional relationship in respect of some and the conclusive position of the Commission:-
At a management meeting/briefing sometime in the first half of 2008, the erstwhile Commissioner Mr. Abdul Tejan-Cole raised the issue of re-establishing a NACS secretariat.
Consequently, on July 2008, a Senior Prevention Officer was promoted to the position of NACS Director. Further, a NACS Manager and Officer were appointed in October, 2008 and April, 2009, respectively.
That a budgetary provision of US$40,800 (forty thousand eight hundred United Stated States Dollars) for top-up salary for NACS staff was included in the budget of a project proposal titled „Support to capacity building and programmes – NACS Secretariat‟ approved by the UN and funded under the Peace Building Fund (PBF);
That a letter dated 9th October, 2008, addressed to the Donor Agency, United Nations Development Program (UNDP), former Commissioner Tejan-Cole said that the Commission had an approved salary scale that was in accordance with the top-ups. He further stated, that it would be a breach of the conditions of service to disrupt the salary scale and that the Commission which must lead by example should not set the wrong precedent;
To that end, he was inclined to agree with his learned friend Tejan-Cole‟s proposition. It made logical sense to maintain the salary balance, rather than choose to make payment of top-ups to one unit of the Commission, exclusive of the others. A contrary position would have yielded disequilibrium in the salary structure, undermined staff morale, and more importantly set a dangerous precedent;
The said monies which amounted to the equivalent Le117,458,000 (one hundred and seventeen million four hundred and fifty eight thousand Leones) were transferred from the NACS project bank account held at Access Bank (SL) Limited, to the Commission‟s bank account held at the Sierra Leone Commercial Bank Limited, to augment the GoSL subvention for the payment of general staff salaries and allowances; and
The said monies were applied to make good the deficit in the salary allocation arising from the non-budgetary provision for the recruitment of the NACS Manage, Officer and inclusive of the promotion/appointment of the Senior Prevention Officer to that of NACS Director. (The referenced letter, together with the bank statements and record of disbursement, could be reviewed upon request).
On the issue of the appointment of the Director, the Commissioner stated that one should note that Promotional appointments were not an uncommon practice in the Commission, and it was one of their objectives in their policy on promotion and transfer for career mobility opportunities should be offered among the existing staff of ACC.
The appointment of the Director was a promotional appointment in line with paragraph 6.1.4 of the Terms and Conditions of Service of the Commission. He also noted the observation on training for staff of the NACS Secretariat as beneficially targeting only the Director of NACS.
He asked ASSL to note that at the time of implementing the Peace Building Fund (PBF) project, the strategic thinking was for the Director, some members of the Steering Committee and the Deputy Commissioner who were part of the NACS Coordination architecture to proceed on study tour visits to other countries where a National Anti-Corruption Strategy was implemented so as to guide the implementation process. In addition, he mentioned that the other staff of the Secretariat including the NACS Coordinating Manager, Officer and Assistant were not disadvantaged from that decision and had all benefited from training abroad and the country, from other funds provided by the Commission, in line with the Commission‟s Human Resource Training Plan.
6.27.5. Regional Offices
There was a limited number of staff at this office to cover four districts. The Bo office did not have a proper running generator and air conditioner such that the manager had to bring his personal generator, refrigerator and electric fan to the office. The photocopier was also not in working condition. The internal and external conditions of the building had deteriorated and needed renovation. Requisitions of stationery from head office took a long time before delivery was made.
The Makeni office did not have a proper running generator. There was a limited number of staff to cover five districts. The office had one security who worked on both shifts.
The Commissioner explained that Staff had been recruited for the Bo office, a 10KVA generator had been provided, all with a view to improving the modus operandi for the management of that regional office. He added that the threshold in respect of available cash for the running of regional offices had been increased thus, eliminating the undue delays in cash transfers to service routine expenses.
He further stated that the office generator in Makeni had been repaired and now provided adequate power for running the office. Steps had been taken to improve staff numbers in the regional offices in general, including the Makeni office, the Commissioner further explained.
In conclusion, he mentioned that the services of the Sierra Leone Police had been sought and additional night armed guards had been provided for the office.
No proper store ledger was maintained. Stores records were not reconciled with physical items during the year under review. The Admin/Procurement manager did not conduct any inspection on stores during the year under review.
6.28. National Telecommunications Commission (2009)
6.28.1. Fixed Assets
The National Telecommunications Commission did not maintain a Fixed Assets
Register. It was also noted that some of the assets on the premises did not have
The Commissioner stated that modalities had been put in place to prepare a proper Fixed Assets Register and the process of tagging assets of the Commission was an on-going activity, he added.
6.28.2. Unsupported Payments
Some Payment Vouchers, totalling Le57,337,080 were without adequate supporting documentation. It was recommended that management should ensure that expenditure incurred should be backed by adequate supporting documents such as payment vouchers, invoices, receipts, etc.
The Commissioner stated, in his reply, that most of the supporting documents were now available for inspection.
It was however noted that supporting documents, to the tune of Le 5,900,000 were still not backed by adequate documentations. Details are below:
A Debtors‟ Analysis Schedule was not maintained for all debtors and the Commission failed to send reminders in the form of statements to all its trade receivables and make follow-up on trade clients to settle their obligations.
It was therefore recommended that an aged debtors‟ analysis schedule should be maintained for all debtors. Moreover, at a particular time say on a monthly/quarterly basis, the Commission should send reminders in the form of statements to all its trade receivables and make follow up on trade client to settle their obligations.
Furthermore, provision should be made for all doubtful debts.
The Commissioner replied that an aged debtors‟ analysis would be maintained for all debtors. He also mentioned that Debtors accounts would be reconciled on periodic basis and provision for doubtful debts brought into the books, if any such case arose.
6.29. Independent Media Commission (2008 and 2009)
6.29.1. Cash and Bank
It was observed:
Amounts totalling Le 5,050,000 was not banked in 2008;
Cash and cheques received from clients in 2009 were not banked on a weekly basis as stipulated in the Accounting Manual;
Bank Reconciliation Statements were not prepared for the months of April 2008 and December 2008;
Bank reconciliations were not prepared for the dollar account for the period under review;
There was the existence of a pending reconciling item with respect to a cheque 956216 issued on 31 of July, 2009; and
The Commission did not maintain a standard cash book for the period under review.
The following were therefore recommended:
Cash and cheques received should be banked promptly to prevent the loss or theft of cash;
Bank Reconciliation should be prepared each month and reviewed by a Senior Officer; and evidence of such review must be indicated on the Reconciliation Statement;
A standard cashbook should be maintained, analysed into various expense and receipt headings.
The Commissioner in his response stated the following:
Le5,050,000 (five million and fifty thousand Leones) was a contribution from the then Celltel Company to IMC for Celtel/IMC Annual Media Awards as honorarium for judges – as soon as the cheque was received it was re-cashed and paid out to the respective judges without paying it to the Bank. The receipts were available for inspection.
Steps had been taken to regularize late banking.
Reconciliation statements for April, 2008 and December, 2008 were now available for inspection.
The dollar amount had been stagnant for some time, resulting in an oversight for reconciliation; however that was now being done as advised.
Cheque No 95621 for Le 150,000 issued on 31 of July, 2009 was cheque issued to Mr. Mohamed Sillah, security Officer Bo. However for unknown reasons the cheque had not yet been cashed by Mohamed Sillah. The Accounts Section would continue its investigation.
The Commission had put in place since 2009 a standard cash book which could be inspected by auditors at any time.
In spite of the fact that the Commissioner stated in his response that Reconciliation Statements for April, 2008 and December, 2008 were now available for inspection, those documents were never submitted for verification.
A Debtors‟ Analysis Schedule was not maintained for all debtors and the Commission failed to send reminders in the form of statements to all its trade receivables and make follow-up on trade clients to settle their obligations. Provision was not made in respect of possible irrecoverable debts by the Commission.
It was therefore recommended that an aged debtors‟ analysis schedule should be maintained for all debtors and that the Commission was expected to send reminders in the form of statements to all its trade receivables and make follow-up on trade clients to settle their obligations.
6.29.3. Unsupported Payments
In 2008, out of total payments of Le50, 425,000 supporting documents were only available for payments, totalling Le 15,980,000 leaving an outstanding balance of Le 34,450,000 without supporting documents.
It was therefore recommended that PVs and Requisitions should be appropriately authorized and approved. In addition, expenditure incurred should be backed by adequate supporting documents by way of PVs, invoices, receipts, etc. and differences between the Financial Statement and schedule must be investigated and action taken to correct figures in the Financial Statement.
In his response, the Commissioner mentioned the following:
In 2008 the current Executive Secretary and Chief Accountant were not in post. The situation had now been regularized as all financial transactions by the Commission were approved by the Chairperson. According to records, out of the total of the Le 4,997,700 only Le 595,300 was not approved. The Commission was unable to respond as the vouchers submitted for 2009 had not been returned by the Auditors. Out of Le 50,425,000 supporting documents were available for Le15,980,000.
The Commission noted the variance totalling Le 1,419,000 in 2008 and Le 7,628,000 in 2009.
Investigations were on going to rectify the financial statements.
The Commission was investigating the anomaly for Le19,796,387 with a view to rectifying the financial statements.
Out of the disbursement of Le 4,997,700 that were stated as “not been approved”, only Le 595,300 were actually not approved. In addition all vouchers requested by auditors during the audit exercise were duly signed for and were returned to the accounts clerk at the end of the exercise. Moreover Management made available supporting documents totalling Le 15,980,000 for audit inspection and they were found to be adequate. However, PVs to the tune of Le 34, 45,000 were without supporting documents.
6.29.4. Withholding Tax
Withholding Taxes were not deducted from suppliers‟ payment for goods and services and paid over to the NRA. It was recommended that a complete and accurate calculation of withholding tax be made, the full amount paid on time to the NRA and steps taken to recover outstanding amounts from suppliers affected.
The Commissioner stated that he had noted the recommendations and promised that action would be taken to recover the Withholding Tax.
6.29.5. Fixed Assets
The Fixed Assets Register was not properly maintained to reflect the location of assets. This resulted in assets being found in locations different from the ones stated in the Assets Register. Fixed Assets at the Bo Office were not marked. It was therefore recommended that the Fixed Assets Register should be regularly updated to record any movement of assets and all assets must be clearly marked with identification numbers.
The Commissioner in his reply noted the recommendation and stated that action had been taken to rectify it. He also mentioned that the fixed assets had now been properly marked at the Bo office.
Pay-As-You-Earn (PAYE) was incorrectly computed for the period under review resulting in a difference of Le3,234,687 in calculations. The personal file of a former Executive Secretary was also not presented for audit inspection. It was recommended that payroll calculations for 2008 and 2009 should be rechecked, reasons for variance ascertained and corrective action taken to ensure that the payroll costs stated in the Financial Statements were accurately recorded. In addition, PAYE deduction computations should be done accurately and paid to the NRA and proper disclosure made in the financial statement and all information must be kept for all employees and regularly updated to reflect changing circumstances.
The Commissioner admitted, in his response, that pay-as-your-earn (PAYE) was incorrectly computed for the period under review and that action was being taken to rectify the position. In addition, Commissioner mentioned that the personal file of a former Executive Secretary was still being searched for and as soon as it was seen it would be made available for inspection.
6.30. Human Rights of Sierra Leone (2008 and 2009)
6.30.1. Cash and Bank
Major weaknesses were noted in the management of cash and bank balances. An Annual Cash Count was not carried out by the Commission. The opening balance for 2008 could not be verified as reconciliation was not done for 2007.
In March 2008, the credit column of the cash book was overstated by Le16,040,950.
In February 2008, the credit balance in the cashbook was incorrectly carried forward as a debit balance.
Cheques which were issued on the 13th of March, 2008 were reported to have been cancelled and reversed. However, further audit examination revealed that those cheques were honoured by the bank on March 17 and 28, 2008.
Stale cheques in 2008 totalling Le11,794,215 were not cleared.
It was therefore recommended that a cash count must be done at the end of each financial year to ensure that cash balances were truly reflected in the financial statement of the Human Rights Commission of Sierra Leone. It was also recommended that the amounts mentioned be investigated and steps taken to correct entries in the cash book. A proper reconciliation should be carried out and all stale cheques re-written.
The Commissioner in his reply stated that a cash count would be done at the end of each year and a certificate prepared accordingly. He further said that the amounts were being further investigated and necessary steps would be taken to correct entries.
6.30.2. Poor file management
Documents relating to the Commission‟s activities were not properly filed i.e. they were not filed according to activities and payment voucher sequence, making it difficult to trace supporting documents to activities in the financial statements.
It was therefore recommended that, in future, payment vouchers and supporting documents should be filed by subhead, date or payment voucher number, so that documents relating to particular activities could be easily identified. It was recommended further that, the Commission should ensure that all files were systematically and chronologically kept and properly referenced.
The Commissioner stated, in his response, that the recommendation made on the system of filing would be adopted.
6.30.3. Payment Vouchers and Supporting Documents
Payment Vouchers (PVs) were not consistently used for various transactions.
The sum of Le322,305,842 in 2008 and Le449,797,946 in 2009 were not supported with PVs.
It was also noted that a majority of PVs were not authorised and approved by a senior official.
Disbursement of funds, to the tune of Le289,086,532 in 2008 and Le310,603,351 in 2009, were not backed by supporting documents. In addition, procurement procedures were most times not followed when contracting suppliers for goods and services.
It was therefore recommended that payment vouchers must be prepared when funds were disbursed and all payment vouchers should be authorised and approved by a senior official before funds were disbursed.
In addition, expenditure incurred should be backed by adequate supporting documents by way of payment vouchers, invoices, receipts, etc;
Furthermore serially pre-numbered standard requisitions should be maintained, and when contracting suppliers for goods and services pro-forma invoices must be obtained from a minimum of three suppliers when goods and services are acquired.
In his reply, the Commissioner stated that the entire request for payments document used at that time was considered a payment voucher but however confirmed that proper authorization and approvals were now done by senior officials before disbursements were made.
He also stated that the Accountant General required them to send all supporting documents with their returns but unfortunately copies of the supporting documents were not retained and that had been corrected.
He further mentioned that it was their usual practice to secure three pro-forma invoices for procurement of goods and services, except where sole sourcing was adopted. He however maintained that procurement procedures would be followed.
In spite of the comments made by the Commissioner, it was still realised that out of the amounts stated above, Payment Vouchers, to the tune of Le 26,863,500 for 2008 and Le27,063,200 for 2009, were still not supported by adequate documentations.
6.30.4. Withholding Tax
Withholding taxes, totalling Le2,655,689 for 2008 and Le4,595,208 for 2009, were not deducted from suppliers‟ payments for goods and services and paid over to the NRA.
It was recommended that a complete and accurate calculation of withholding tax be done with the full amount paid on time to the NRA and steps taken to recover such amounts from suppliers affected.
The Commissioner noted the recommendations and mentioned that a system had now been put in place in respect of withholding tax for the regular deduction and payment to the NRA.
Staff Cost was overstated by Le 2,909,898 for 2008.
It was also noted that 10% was deducted from the earnings of some staff instead of 5% as their employee NASSIT contribution for February and March 2008 thus resulting in overpayment of Le 630,500. Top-up Allowances from Donors were not included as a Payroll item for tax deduction and the Personal Files of Commissioners were not updated.
It was therefore recommended that payroll calculations for 2008 should be rechecked, reasons for the variance ascertained and corrective action taken to ensure an accurate record of the payroll cost stated in the account In addition, PAYE on allowances from Donors should be deducted and paid to the National Revenue Authority and a proper disclosure made in the financial statement.
Furthermore, all information must be kept for all employees and regularly updated to reflect changing circumstances and the provisions in the NASSIT Act, 2001 should be applied consistently to all staff of the commission.
The Commissioner in his reply stated that the non-deduction of PAYE on top-up received from donors was inadvertent and that the Commission was unaware that payment attracted PAYE. He further mentioned that he was currently deducting PAYE on all salaries paid and that staff affected by the payroll inaccuracies in 2008 had left the Commission.
6.31. National Commission for Privatisation (2010)
6.31.1. Matters Previously Reported
220.127.116.11. Remuneration and Expenses of Members of the Commission
Even though Section 7 of National Commission for Privatisation Act, 2002 provides that “the Chairman and other members should be paid such remunerations and allowances as the President may determine and should be reimbursed by the Commission, for expenses incurred in connection with the discharge of their function”, the President had not determined these remunerations and allowances. It was recommended that remuneration and allowances paid to the Chairman and other members of the Commission should be ratified by the President. Alternatively, the Commission should consider amending the act in order to rectify this issue.
The Commissioner in his response stated that the President, His Excellency Ernest Bai Koroma, appointed the Chairman and the other Commissioners who were approved by Members of Parliament. He also mentioned that all remunerations, allowances and expenses incurred by the present Commission were inherited from the previous Commission whose remuneration and allowances were approved annually by Parliament.
18.104.22.168. Financial Management System
National Commission for Privatisation (NCP) was currently maintaining its accounting records and producing financial reports manually aided by microsoft excel worksheets. Quite apart from the obvious disadvantages associated with such a system, it is unreliable and not tampered proof. It was recommended that the accounting system should be computerized or replaced with a system, which is tampered proof and more reliable.
The Commissioner agreed with the comments and recommendations and stated that a Sage Accounting System had been purchased in August 2010 to replace the current system. He however said that since the Commission was mid-way through the year, it was agreed that parallel postings with the Excel system should be done.
6.31.2. Current Matters
22.214.171.124. Composition of the Commission
Section 5 of National Commission for Privatisation Act, 2002 provides that “the Commission should consist of a Commissioner as Chairman and the following other members:
Governor, Bank of Sierra Leone
Sierra Leone Labour Congress
The Institute of Chartered Accountants of Sierra Leone
Sierra Leone Bar Association
Sierra Leone Bankers Association
Professional Engineers Association
Sierra Leone Chambers of Commerce, Industry and Agriculture
Sierra Leone Indigenous Business Association
University of Sierra Leone
It was observed that Sierra Leone Bar Association was yet to be represented.
It was therefore recommended that the Commission pursued the representation of Sierra Leone Bar Association in order to comply with Section 5 of the National Commission for Privatisation Act, 2002. Alternatively the Commission should consider amending the act inorder to take care of this issue.
The Commissioner is his reply agreed with the finding.
126.96.36.199. Legal Consultant
We observed that the Commission appointed a legal consultant, Victoria F. Jamina–Andrews effective 1 May 2010. However the Auditors concerns were as follows:
The consultant was not domiciled in Sierra Leone and all travelling cost of the consultant was borne by the Commission.
The Commission was committed to pay a monthly retainer fee of one thousand five hundred USD 1,500 or Leones equivalent, including communications and travel expense for all official trips specifically requested by National Commission for Privatisation and incurred by the consultant in carrying out the services. Air travel expenses limited to country of domicile – Gambia to Freetown.
It was noted that refunds were made to the consultants for London to Freetown trips.
The retainer fee was paid without deducting withholding tax.It was therefore recommended that the contract between Victoria F. Jamina – Andrews and the Commission should be reviewed with the view of rectifying the above mentioned anomalies.
The Commissioner explained that an evaluation and interviewing process was conducted and Victoria F. Jamina-Andrews was the most outstanding and also, taking into consideration the cost of engaging a commercial legal adviser which would have cost the NCP no less than GBP 10,000.00, he stated that Victoria F. Jamina-Andrews had the necessary expertise and the total cost of retaining her services was reasonable.
6.32. Tertiary Education Commission (2010)
6.32.1. Financial Management Reporting
Though reports were prepared quarterly, the financial management report did not highlight variances between the budgeted and actual figures and there were also no commentaries on those variances. It was therefore recommended that consideration should be given to reporting variances and providing commentaries on a quarterly basis and using the experiences to improve on delivery.
The Commissioner stated that the recommendation was accepted and promised its implementation.
6.33. National Council for Technical Vocational and Other Academic Awards (NCTVA) (2005-2007)
6.33.1. Internal Audit Unit
An Internal Audit Unit was not in existence in the Organisation. ASSL therefore recommended the immediate setting up of an internal audit unit.
The management in their response stated that the Finance Office had been intimated on the recruitment of an Internal Auditor within the course of the year.
6.33.2. NASSIT Deductions
It was observed that Social Security contributions were deducted from employees‟ salaries and not paid to the appropriate authorities. It was recommended that all efforts should be made at paying over employees‟ deductions to NASSIT soonest.
Management stated that the Council had been in debt in payment of monies deducted from staff salaries for Social Security purpose. They however explained that they had recently started paying the said monies to NASSIT.
Monthly income tax deducted from employees‟ salaries was not paid over to the Income Tax Authorities. It was recommended that efforts should be made to pay over amounts withheld from employers‟ salaries as requested by law.
Management in their response stated that the main problem of implementing this part of an operation was the inadequate provision normally made on the government budget for the payment of staff salaries and wages. He said however that plans were on the way to begin the deduction of staff income tax and subsequence payment to the National Revenue Authority.
6.34. Eastern Polytechnic 2004-2008
6.34.1. Eastern Polytechnic Business Unit
Income generated from the Business Unit were not reported or disclosed in the Financial Statements of the Institution for period 2004, 2005, 2006, 2007 and 2008. It was therefore recommended that all income irrespective of the size should be reported and adequately disclosed in the accounts.
The Principal in his response stated that the initial amount used to set up the business unit was from proceeds of the farm work. He mentioned that the profit was reinvested to expand the operations of the business and that lead to the non-disclosure of income. However, from 2010, all incomes would be disclosed in the financial statement.
6.34.2. Library Services
Work has long been on a stand still for the Institution‟s Library. In addition the present library lacked the following facilities:
Insufficient sitting/learning space;
learning materials, especially for the Agriculture & Forestry, Engineering/Technology and Home Science courses;
Relevant learning materials especially in the field of Science, Engineering and Education;
Insufficient furniture (i.e. chairs, desks, shelves); and
It was recommended that the Institution should endeavour to improve the condition of the library.
The Principal in his response stated that library space was provided to accommodate a student population of 200 though the enrolment had increased greatly leading to the inadequacy of space. In addition, he mentioned that the staff strength had increased with the appointment of 4 new staff and an internet café had also been established for students to research in their areas of studies. He concluded by stating that the three floor library under construction had been contracted to a construction company to do the ground floor to be completed in a year‟s time.
6.34.3. Ineffective control over sales of student application forms
Information on sales of student application forms for all the courses offered by the Institution for the period 2004 were not provided for inspection. There was a variance between the number of student application forms and the number of enrolled students.
See sample below:
It was recommended that all documentations pertaining to the sale of application forms should be tendered for inspection.
The principal of the institution responded, stating that discrepancies in student enrolment and sale of application forms were as a result of the following:
some students deferred their admission as a result of inability to pay fees and charges, sickness, pregnancy, etc.
some students were not promoted to the next level
there were transfer cases of student from other institutions.
6.34.4. Matters Previously Raised
188.8.131.52. Implementation of issues raised at council meetings
An examination of minutes taken at council meetings revealed that most of the decisions agreed upon in such meetings were not implemented during the years under review and consequently most of the Institution‟s assets were not valued and incorporated into the Financial Statements.
In his response, the Principal stated that he had contacted a valuator who had charged an exorbitant fee of Le200,000,000 which couldn‟t be afforded. In that regard, he had referred the matter to the Government through the Ministry of Education for their intervention.
6.35. Power and Water Project (2009)
6.35.1. Finance section within the Project Coordinating Unit (PCU)
The work load was too much for one person to perform in this department, therefore the Finance Officer did not produce documents on time when requested.
Moreover, the Project Coordinating Unit had to pay $7,000 in the period under review to a consultant in connection with the preparation of the financial statements for the period 2004 to 2009.
It was then recommended that an assistant to the finance officer be employed to assist the finance officer in minor accounting jobs such as posting of transactions, bank reconciliations, filing of documents whilst the finance officer will be left to do more important jobs.
In his response, the Project coordinator noted our observations raised and stated that the PCU in consultation with relevant stakeholders will find a way to resolve the problem.
He further stated that the payment of $7000 had been made to the consultant (Mr. David Renner), who was hired by SALWACO to prepare their draft Financial Statements for period 1 January 2003 to 31 December 2008 that had been outstanding for a considerable period of time and was required by the Bank to be submitted within a very short time.
6.35.2. Loan to Afrirelief
A total of USD 30,000 was paid to Afrirelief as a loan on 29 June 2007. Although a total of USD 20,000 had been refunded to the project, nothing was paid during the period under review and this was against the provisions of the International Development Agreement (IDA) Credit Agreement. It was therefore recommended that Project funds should not be given to any institution as a loan as all funds requested for by the project had been budgeted for before they were remitted by the IDA in the project account.
In his response, the Project coordinator stated that at the time of this transaction Afrirelief was the local consultancy Firm that was incorporated by GKW/POYRY to provide technical consultancy services to SALWACO.
He added that in 2007 there was a serious impasse between the clients (SALWACO) and the leading Consultants (GKW/POYRY) which almost brought the project to a standstill, as the Foreign Consultants withheld their service to the Project.
As a result of the impasse SALWACO withheld payments to the consultants and this caused serious financial constraints on the local Consultants working for Afrirelief, who were still rendering services to the Project, he further maintained.
Due to non-payment of the Consultancy fee, he said Afrirelief threatened to withhold their services to the project, and this would have brought the implementation of the Project to a standstill.
The matter was therefore reported to the Ministry of Energy and Water resources. In order to avert the strike and keep the implementation of the Project on course it was agreed that an advance payment USD 30,000 of their consultancy fees should be paid to Afrirelief so that their local staff will be paid their remuneration. This was agreed upon by both SALWACO and the Ministry of Energy and Water Resources.
When payments to the consultants re-commenced, Afrirelief repaid USD 20,000 leaving a balance of USD 10,000. After this payment SALWACO again stopped payments to the consultants, as a result of which Afrirelief had not been able to clear the Advance.
The issue of the non-payment of consultancy fees was subsequently taken to the court of Arbitration in The Hague. The court of Arbitration has given verdict in favour of POYRY and SALWACO has been asked to pay the outstanding fees to the consultants. The balance USD 10,000 will be recovered from them when the final payment as ordered by the court is paid to the consultants.
6.36. Project Implementation Unit (NPA)
6.36.1. Review of the Management Letter for the 24 month period ended December 31 2007
The following matters had not been addressed:
The PIU of the Ministry of Energy and Power did not maintain a cash book and other financial records to ensure that all monies received and spent were properly recorded.
The PIU could not provide the auditors with notification of remittances received from donors and payments made to the contractors or consultants.
The draft financial statements were not prepared on accruals basis. Scrutiny of the Statement of Income and Expenditure Statement revealed that it was prepared on cash basis rather than on accruals basis.
It was therefore recommended that the suggestions in the previous audit report should be considered for implementation.
The Project Coordinator stated that PIU did not maintain a cash book because they were not preparing withdrawal applications for payments.
The Withdrawal Applications he mentioned, were not done by the accounts staff of the MEWR and the PIU did not have copies of the Withdrawal Applications.
He added that all payments were done through a direct payment method from the ADB Headquarters. The ADB & MEWR must take the necessary steps for the PIU to do all Withdrawal Applications in future, he maintained.
He further explained that Withdrawal Applications were prepared by the accounts staff of the MEWR and sent to the MOFED for signing and after which, the MOFED sent the WA to the Head Quarters of ADB and payment was sent directly to the supplier/contractor/consultant. He said that the ADB had never sent any form of documents to the PIU informing them that ADB made payment for the invoices/certificates received from the MEWR.
The information available he said, enabled the PIU to do only the income and expenditure statement which was agreed with the Financial Management Specialist from ADB. He however stated that efforts would be made to correct the situation in future.
6.36.2. Supporting documents not provided
Supporting documents for expenses amounting to Le 1,878,515.78 were not provided for inspection during the period 2008. Moreover, certificates for civil works, invoices for consultancy services or receipts for reimbursable expenses incurred on behalf of the projects mentioned below, were also not provided for inspection.
Funding agreements with DfID and the Italian Fund together with the agreement between Salini (which supplied civil works) and the Government of Sierra Leone were also not made available during the course of the audit exercise.
It was however recommended that the afore mentioned documents should be produced for inspection.
The Program Coordinator in his reply stated that when the PIU received requests with supporting documents for payment, they were endorsed and sent to the Permanent Secretary MEWR by the Director, BPIU. He, in turn, sent the requests/documents and the WA, with a forwarding letter to the MOFED requesting payment to be done.
He added that the MOFED then signed them together with the Accountant General‟s office and sent then to ADB‟s HeadQuarter where payments were then made. He said that the completed signed Withdrawal Applications and their documents were never sent to the PIU and that made it difficult for the PIU to have copies of those documents. He further mentioned that efforts were now being made together with the ADB to have these processes done by the PIU and, only taken to the MOFED/Accountant General‟s Office for signing and if this new process was implemented, documents would be kept by the PIU.
Service and commitment charge stated in the supplementary loan agreement were not calculated by the Project and included in the accounts. It was recommended that all interest including service and commitment charge should be calculated and included in the Financial Statements.
The Project Coordinator stated in his response that these charges were not done by the PIU, but by the ADB and the MOFED for which the Project was not informed.
6.37 Integrated Public Financial Management Reform Project
6.36.4. Fixed Assets
Although a Fixed Assets Register was maintained as stipulated in the Project Implementation Manual, it was not updated regularly to account for all assets acquired by the project.
Some of the assets acquired were not marked. Physical inventory of fixed assets was not done during the period under review.
It was therefore recommended that a properly designed fixed assets register should be maintained and regularly updated to record any movement by way of addition to, or disposal from the Fixed Assets Register at any point in time. A verification exercise should also be conducted regularly to reconcile the Fixed Assets Register with the assets in existence and all assets must be marked using a specific coding denoting the recipient agency before the item is delivered to the agency.
In his reply, the Project Coordinator stated that the Fixed Assets Register was not updated regularly especially for assets that were procured for other project subcomponents and noted that it would be done soonest to ensure that all assets procured by the project were included in the Assets Register. He also assured ASSL that all outstanding assets would be clearly marked with unique identification markings. He further added that owing to the shortage of staff capacity, the project had not been able to carry out physical inventory of its assets. He, however, mentioned that he would ensure that an inventory of all the fixed assets was done and clearly identified, once the full complement of staffing arrangements is done.
6.36.5. Imprest Account Administration
From the review of the annual work plan, it was noted that imprests were given to the sub components of the project. A consistent system was also not in place in respect of the utilisation and reimbursement of imprest. Also the following weaknesses were observed:
A cash register was not maintained for almost all the sub-components under the project;
Cash vouchers were not maintained for the withdrawal of petty cash expenditure for almost all the different sub-components under the project; and
Periodic unannounced cash counts were not carried out, to ensure proper maintenance of the imprest system.
The Project Coordinator explained that the Finance Unit of the Project and some other project subcomponents strictly adhered to the proper maintenance of the imprest system of accounting. He said that the Project Administration Unit would follow up on it and ensured that all project subcomponents would maintain cash register and cash vouchers for accounting and recording of petty cash expenditures. He promised that periodic unannounced cash counts would be carried out on all the subcomponents from time to time.
6.36.6. Segregation of duties
It was evidenced during the audit exercise that the finance unit in the IPAU was grossly understaffed leading to the lack of segregation of duties in the handling of financial matters, as the project accountant had to carry out all the operations alone. It was therefore recommended that the project implementation manual should make provision for support staff and that additional support staff must be recruited to assist in the finance division.
The Project Coordinator agreed that the finance unit was understaffed. The Project Coordination Unit he said would be facilitating the recruitment of additional staff to support the day to day fiduciary operations mandated by the unit when the Government of Sierra Leone and the World Bank agreed on the functionality and operations of the Integrated Project Administration Unit (IPAU). In addition, he stated that once the staffing issue was addressed, the various financing functions would be spread out and or distributed among the finance personnel in the unit thus further strengthening the Internal Controls System within the Project.
6.36.7. Internal Audit
The internal audit of the MOFED did not conduct regular reviews of operations and financial transactions as required by the project implementation manual. It was therefore recommended that the internal audit of the MOFED should be actively involved in the project implementation by conducting regular reviews of operations and financial transactions.
The Project Coordinator explained that the Internal Audit Unit at the Ministry had indeed been involved in the Implementation of the Project activities and one of the beneficiary units. He said that in many instances they had been undertaking reviews at Local Council level, but considering the low level of staffing at the Unit they had not been conducting regular reviews across other project components. He mentioned that the Project Coordinating Unit would be following up on that to ensure that regular reviews on the operations of the Project are done.
6.36.8. Liquidation of Funds
It was observed that payment for some hall rentals were not done on competitive invoices. Retirement for most of the activities was not done within the given time line of one week, some far exceeded the one week period.
This was evidenced by a letter dated 17th January, 2011 sent to the different components‟ managers from the project accountants. It was recommended that payments for expenses such as hall rentals must be done on competitive invoices and all expenses should be retired within a week as stated in the project implementation manual.
The Project Coordinator responded by stating that:
The Programme Coordinator alongside Procurement Specialist and other representatives of project sub components were engaged in addressing the matter and that a committee had been set up to map the way forward on this for which a report was done and was waiting to be implemented across the projects.
The lack of competitive invoices in some costs of workshop venues including hall rentals were mainly due to the unavailability of venues at the time of conducting workshop/training. In many instances, it is almost impossible to get venues that would accommodate the number of participants that the activity demanded. Consequently, pro-forma invoices were provided for only hotel venues that could accommodate the activity at the time.
It was evidenced during our audit work that the procurement specialist played little role in the procurement of services for workshops, conferences and training (example, hiring of hall, hotels and catering services). No procurement compliance audit was carried out for the period under review.
We recommended that the procurement specialist should be involved in the coordination of procurement implementation agencies and in the procurement processing in general. A procurement compliance audit must be carried out as stipulated in the project implementation manual.
The project Coordinator explained that it was as a result of the fact that procurement of services for workshop, conferences and training had not been fully centralised within the IPAU. He however said that a committee had been set up to map the way forward a report done and awaiting implementation across the projects. In addition, he stated that it had been agreed with the bank that the issue relating to compliance audit be deferred to such a time when appreciable volume of procurement had been carried out in order to obtain value for money for the activity.
6.36.10. Withholding Tax
The project was not withholding taxes from payments made to contractors above Le 500,000 as stipulated in the Income Tax Act, 2000. It was recommended that complete and accurate calculations of withholding taxes should be done and full amounts paid on time to the NRA. In addition, steps should be taken to recover such amounts from suppliers affected.
The Project Coordinator stated that the issue would be addressed and streamlined once the IPAU becomes fully functional.
6.37. Enhanced Integrated Framework Project (2010)
6.37.1. Withholding Tax
It was observed that withholding taxes, totalling Le16, 317,016.50 were not deducted from suppliers‟ payment for goods and services for 2010 and paid over to the NRA. It was recommended that complete and accurate calculations of withholding tax should be made, full amount paid on time to the NRA and steps taken to recover such amounts from suppliers affected in compliance with the Income Tax Act, 2000, Section 117 Subsections (1) (2) and (3).
In his reply the Project Coordinator said he did not wish to contravene the MOU by engaging in activities that dealt with taxes. He hoped to implement the Tax Act from date and to also bring it to the notice of his donors accordingly.
6.38. (UNFPA) Baseline Survey (June 2009 – April 2010)
Bank interest income in the amount of Le2,405,328 was not recorded as income to the project for the period under review. Income not recognised could be converted into other uses. It was therefore recommended that all forms of income accruing to the project should be recorded in the books of the project in order to ensure that the financial forms are true and fair.
The Coordinator, in his reply, stated that the findings were true as the interest was generated from a current account which was supposed to be a non-interest bearing account. Upon reconciling the bank statements, it was noticed and charged against bank charges to off-set the sum, he added. He mentioned that he noted the query and promised that management‟s strive to ensure a sound financial management, would correct any similar shortfall in future.
6.38.2. Recruitment process
Key sections in the MOU signed between Statistics Sierra Leone and the Ministry of Health and Sanitation (in collaboration with UNFPA) were not complied with by the institution. The affected areas had to do with the process of recruitment and letters of appointment of all personnel recruited for the Baseline survey including their curriculum vitae, copies of certificates, application letters and minutes of interview reports that were not properly maintained. It was recommended that all obligations stated in the MOU and other related documents should be adhered to.
The Coordinator stated that Management wanted to bring to floor, as part of their internal policy on survey recruitment, that there was a database of Regular Enumerators which did not require recruitment and/or interview. Notwithstanding, he noted that management did issue them with appointment letters to show its commitment to adherence to the MOU and would encourage the audit team to do any form of verification or inspection as part of their audit evidence.
6.38.3. Financial Records
Amounts stated in the various financial records i.e. Cash Book and (full) COE were different from various expenditure lines. Differences were noted between amounts recorded in the Cash Book and supporting documents that were submitted for inspection. A summary of these differences is given below:-
It was recommended that the above differences should be investigated and properly accounted for in the books of the project.
The Coordinator stated that, the difference between the audited figures and the Cash Book was as a result of arithmetical errors and/or mistake.
6.38.4. Statutory requirements
Taxes to the tune of Le1,094,850, withheld from project staff allowances and payment to suppliers, were not remitted to the NRA. It was therefore recommended that the withholding tax deducted from all Project Staff Salaries/Allowances be paid to the NRA for which a general receipt should be obtained.
The Coordinator acknowledged the audit findings and mentioned that it was due to the fact that sufficient funds were not in the account at the time the payment was done, and it would have resulted in an overdraft in the account balance if attempts were made to pay the tax charge at that time. He however accepted the shortfall and confirmed that action had already been taken to pay the amount due.