The role of ASSL is to independently review the economy, efficiency and effectiveness of government as the custodian of public funds and to ensure that these are used in the manner intended by Parliament as well as being clearly and accurately reported.
We are the guardian of Sierra Leone‟s economic security and as such we act in a professional, ethical and transparent to assure the productive stewardship of the investments of taxpayers and other stakeholders, and to safeguardthe citizen's interest in the public sector.
The Public Accounts
The Auditor General issued a Qualified Opinion on the Public Accounts. This was the result of her professional judgement based on audit finding as summarised below.
We found extensive internal control problems especially around revenue matters and the relationship between NRA and MOFED on responsibility for the CRF. This was at the root of our choosing to issue a qualified opinion on the Public Accounts and had the problems encountered been pervasive would have given rise to a disclaimer of opinion, i.e. the situation where we are unable to obtain sufficient appropriate audit evidence on which to base the opinion. There is a need to clarify the relationship between MOFED and NRA with regards the responsibility for the CRF.
We found significant numbers of receipt books were not accounted for or available for examination. There were unidentified cash balances held in transit accounts and not transferred to the CRF at year end in a timely manner. We also noted a significant discrepancy between NRA reported revenue and that disclosed in the Public Accounts.
No breakdown on donor revenue was made available for audit and we encountered a lack of supporting documentation in a worrisome number of instances.
The Internal Audit Department, a key component of the system of internal control, although improving could be better.
Many of our recommendations from previous years have not been implemented and this continues to be of considerable concern.
Ministries, Departments and Agencies
We estimate there have been cash losses to the public purse of Le 80,664,232,530.77 and US$3,069,100, respectively – for details see Appendix A. This has occurred for a number of reasons, some inter-related that overall suggest strongly that public financial management is not operating well in many MDAs.
These findings among many other enumerated 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 our elected legislators.
Public Enterprises and Commissions
In general and across virtually all Public Enterprises and Commissions the significant matters identified in the audit examinations fall into the following areas:
Poor bank, cash and imprest
account management practices;
These observations are expanded upon in greater detail in the paragraphs to follow. Overall they suggest a need for greatly improved financial management with a clear focus on basic principles of internal control, e.g. appropriation segregation of duties and sound procedures for authorizing, recording and reporting transactions.
Schools and Vocational Institutions
Based on our review of schools and vocational institutions we believe that administrative and financial management of the school system is out of control. Responsibility and accountability rests squarely on the Ministry of Education and it is from there that corrective action needs to be initiated as a matter of the gravest urgency.
Losses from schools and other
educational institutions attracted not only cash losses in respect of fees
collected but there are also significant arrears in school fee payments. Basic
procedures are not being observed over school fee collection, cash disbursements
Law and order and good government sit at the very core of a well-functioning State. Sound public financial management is a key component of good government. The whole works together to form an environment to attract direct investment, foreign and domestic, and permits the State, should it so wish, to raise long and short term funding from the international financial markets. It is also crucial to creating a context that facilitates the assessment and orderly collection of tax revenue and other levies from all sources; as well as shaping a civil society that recognizes and values the legal obligation and civic duty to pay to the State that which it is due.
Only a well-functioning Sierra Leone can deliver the essential support and services that the citizens elected our Parliament and government to provide. Audit Service Sierra Leone (ASSL), as the external auditor of the government, builds the confidence of all stakeholders in our State institutions. It supports our nation in its ongoing effort to achieve financial self-reliance. This is the journey we are embarked upon and the destination is one that a handful of developing countries in Africa have achieved. We strive to be counted in their number and ASSL has a part to play in getting there.
The role of ASSL is to review the economy, efficiency and effectiveness of government as the custodian of public funds and to ensure that these are used in the manner intended by Parliament as well as being clearly and accurately reported. We are getting better at performing our role. Indeed, a peer review reporting in October 2010 conducted under the aegis of African Organization of Supreme Audit Institutions – English (AFROSAI-E) states that, overall, ASSL “… has made tremendous strides … in relation to the AFROSAI-E Institutional Strengthening Framework”.
AFROSAI-E is the body, in which we are an active member that in collaboration with The International Organisation of Supreme Audit Institutions (INTOSAI) operates as an umbrella organisation for the external government audit community. In our work we comply with its professional and ethical standards and, recognising our need to keep developing, we avail of their training to strengthen our professional staff. But it‟s not a one way street; we also contribute to AFROSAI-E‟s training capability.
In 2010 ASSL successfully hosted training to eight African Supreme Audit Institutions (SAIs) in Performance Audit, a branch of public sector auditing practice in which we have developed an enviable professional competence. Later this year and early in 2012 we will be presenting a number of performance audit special reports to Parliament.
ASSL is on the move both professionally and physically. Our internal training services are continually presenting seminars and workshops in Freetown and at our regional offices to build the skills of our staff at all levels. In addition, a number of our auditors are taking post-graduate degrees overseas with others scheduled to join them. Currently in the environs of Freetown ASSL operates from a number of locations including the Youyi and Lotto buildings.
A new headquarters which will
permit consolidation of all Freetown staff into one location is under
construction at Tower Hill. Anticipated donor funding for a share of the
construction costs unexpectedly did not materialize consequently the cost is
presently being borne fully by the government. Occupancy is expected in late
2012 or early 2013.
Section 119 of the Constitution of Sierra Leone mandates the Auditor General to audit the Public Accounts of Sierra Leone and all public offices, including the Courts, the accounts of the Central and Local Government Administration, of the university and public institutions of like nature, statutory corporation, company or other body and organisation established by an Act of Parliament or statutory instrument or otherwise set up partly or wholly out of public funds shall be audited and reported by or on behalf of the Auditor General.
In addition, the Audit Service Act, 1998 sets down inter alia the organization of the Audit Service, also under subsection (4) section 66 of the Public Budgeting and Accounting Act 1992 the Auditor General has the right to surcharge any person in certain circumstances.
The Audit Service is guardian of Sierra Leone‟s economic security.
Mission Statement of ASSL
To continue to be a respected, agile, merit-based and ethically transparent institution dedicated to assuring the productive stewardship of the investments of taxpayers and other stakeholders, and safeguarding of the citizen's interest in the public sector.
Reading this Report
In addition to this Introduction there are four sections to this report. Each deals separately with discrete components of the activities of government. The four sections are as follows:
My Audit Opinion on the financial statements of the government of Sierra Leone for the year-ended December 31, 2010, officially known as the Public Accounts, and related comments on the audit examination findings.
Findings arising from compliance audits conducted in those entities charged with delivering specific programs of the government. In short, Ministries, Departments and Agencies with explicit responsibilities for aspects of our system of governance, such as, finance, education, health, security and defence.
Matters arising from audits of those organisations set-up as separate legal entities to conduct parts of the business of government. These are the many parastatal enterprises and commissions which though separate from government are nonetheless part of it.
Finally there is a Section on our findings during the audits of schools and vocational institutions.
Auditors General in many jurisdictions around the world are making strides in the adoption of plain language reporting. That is to say, they are moving away from the jargon of the auditor and public official that is often impenetrable for lay persons. I have adopted the plain language approach in the interest of clarity and communicating unambiguously all the facts as I find them about the condition of public financial management in Sierra Leone and what needs to be done about it.
I recommend this report in its entirety to all citizens of Sierra Leone and in particular to our elected representatives in Parliament. I recognise however that not everyone has either the time or inclination to read all the detail it contains. For readers not wishing to dive into the particulars I include at the beginning of each of the four Sections a summary called Main Points. In these I set out three basic matters:
What we examined – we describe what the audit looked at and in some cases what we did not look at.
Why it‟s important – we make the case for the relevance and significance of an area or issue.
What we found – the most significant findings of the audit.
The intention of Main Points is to succinctly convey quickly and accurately the major messages arising from our work. They set out the key matters that came to our attention as we performed our duties under the Constitution and the Audit Service Act which, in our judgment, need to be addressed by the public service and brought to the attention of citizens and parliamentarians.
I would like to take this opportunity to express my thanks to the Parliamentarians, Ministers of the Government, public officials and to my own staff for the cooperation and assistance received in conducting the work of the Audit Service Sierra Leone.