6.20. Office of the Ombudsman (2009)
It was observed that withholding taxes were not deducted from suppliers and paid over to the NRA. It was therefore recommended that complete and accurate calculations of withholding tax should be made, full amount paid on time to the NRA and steps should also be taken to recover such amounts from suppliers affected.
In his response the Ombudsman explained that the issue was caused by oversight and that action was now being taken to collect the amounts involved for payment to the National Revenue Authority.
6.20.2. Unresolved Matters
There were nineteen complaints which were unresolved since 2008. It was recommended that all efforts should be made to resolve outstanding matters dating back to 2008 and matters which the Ombudsman did not act upon, should be forwarded to Parliament, as stipulated in Section 14 of The Ombudsman Act, 1997.
The ombudsman explained that the office of the Ombudsman had the primary responsibility to receive, examine and resolve complaints and continuous efforts were being made to do so. He stated further that some complaints were complex, sometimes with fundamental legal implications, and did not lend themselves to quick fix treatment or resolution within a financial year like in the case of accounts. He mentioned that final solution to some complaints was referred, in appropriate cases, to the Industrial Court and added that forwarding unresolved complaints to Parliament should only be done as a matter of last resort, he concluded.
A budget/forecast was not prepared and made available to the team for inspection for the period under review.It was recommended that budgets should be prepared annually.
The Ombudsman stated that his office now made budget forecasts after receiving a budget ceiling from the Ministry of Finance and Economic Planning.
6.20.4. Payment Voucher Processing
Payment vouchers were not prepared when funds were disbursed. In addition, recipients of funds did not sign to acknowledge that funds had been received. It was recommended that payment vouchers should be prepared when funds were disbursed and must be serially numbered and printed in triplicate. Furthermore, payment vouchers should be signed by the preparer, approved by the manager and the recipient of funds must sign the payment voucher acknowledging receipt of funds.
The Ombudsman explained that according to the Financial Rules and Regulations of the Office of the Ombudsman, which came into force in March 2010, the office had a system whereby payment vouchers were printed by computer and numbered manually. Each voucher, he mentioned, was signed by persons preparing, reviewing, and authorizing it.
6.20.5. No Fuel Distribution Policy
There was no fuel distribution policy stating the exact entitlement of each staff. In addition, there were instances wherein up to thirty gallons were given to staff in one week. It was recommended that a fuel distribution policy should be put in place.
The Ombudsman stated that there was a policy on fuel allocation. He attached a copy of the Policy.
6.20.6. Ombudsman’s Report
Section 15 of the ombudsman Act, 1997 states „In addition to the reports on individual cases, the Ombudsman shall prepare and submit to the president a half-yearly report of the activities of his Office and the President shall cause any report together with an explanatory memorandum, to be laid before Parliament‟. It was recommended that the Ombudsman should comply with the provisions of the Ombudsman‟s Act.
The Ombudsman explained that normally similar institutions were required to produce annual report and such reports included audited accounts. He stressed that in keeping with the principle of producing one report and for purpose of economy, there was need to undertake the review of the Ombudsman Act with a view to amending some sections which he said, would include section 15 requiring the production of half-yearly report for the sake of economy in cost printing and consistency.
6.21. Sierra Leone Standards Bureau (2007 and 2008)
6.21.1. Accounting Manual
The office did not have an 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 therefore recommended that an Accounting Manual should be introduced to assist and guide the finance functionaries in the performance of their duties.
The Executive Director explained that the period covered by the Audit exercise represented a transition period of the Sierra Leone Standard Bureau, since the death of the Executive Director and most of what should have been put in place for a coherent take off was delayed. Those accounted for some of the lapses in executing its functions, he added. He however stated that steps had already been taken to obtain a copy of an Accounting Manual and to ensure that henceforth the accounting procedures of the Bureau followed standard guidelines.
The payrolls for the period under review were not checked by a senior official to verify the figures. It was recommended that management should ensure that the payrolls should be signed by the preparer and checked by a senior staff to confirm the accuracy of the figures.
The Executive Director stated that the absence of a senior official‟s signature on payrolls was due to the fact that there were only two staff in the Accounts Office and the payroll was done by the Administration and Finance Officer. The lapse, he said, had now been rectified by employing a staff in the Account Office for the preparation, so that the Administration and Finance Manager can check to confirm the accuracy of the figures.
6.21.3. NASSIT Deductions
NASSIT contributions were deducted from staff emoluments but these monies were not paid over to the appropriate authority on a timely basis.It was recommended that NASSIT contributions should be paid over to the appropriate authority within the prescribed time.
The Executive Director explained that delay in paying NASSIT contributions on timely basis was because payroll vouchers, which included NASSIT deductions, were prepared well ahead before government allocation for salary was received. That he said had caused delay in the payment of salary and other deductions. He however mentioned that the situation had been communicated to the authority for action to be taken so that in future the institution would be in a position to adhere to regulations.
6.21.4. Fixed Assets
The Bureau did not maintain a proper Fixed Assets Register. There was no capitalization and maintenance policy in place for the repair and maintenance of Fixed Assets, such as computer hardware, vehicles etc. to prolong their useful life. Assets in the bureau did not have identification marks.
The following were therefore recommended:
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 be conducted regularly to reconcile the Fixed Assets Register with the assets in existence;
A proper maintenance policy must be formulated to ensure a prolonged and useful life of the assets by complying with requirements that call for regular maintenance and appropriate care;
All assets must be marked with the bureau‟s identification codes; and
The services of a professional evaluator should be sought so that all assets of the Bureau could be re-valued.
The Executive Director explained that since the establishment of the Bureau, most of the Fixed Assets had been acquired through UNIDO and others had been purchased from time to time by the Bureau through funds provided by the Government of Sierra Leone (GoSL). He further mentioned that the Bureau neither maintained a proper Fixed Assets Register nor did they have records of those acquired and where they had been allocated. He agreed that the assets did not bear identification marks. However he stated that the Bureau carried out maintenance on fixed assets as and when necessary, upon the request of Directors of departments or the IT Unit. A policy on the use and maintenance of vehicles had been developed and incorporated into the Bureau Conditions of Service, he maintained. In conclusion, he noted the recommendations of the audit team and promised that he would endeavour to put all of them in place within the shortest possible time.
6.21.5. Review of Bank Reconciliation Statement
For the two years under review, it was noted that the identities of the preparers and reviewers were not noted on the reconciliation statements prepared. It was recommended that all bank reconciliation statements must be signed by both the preparer and the reviewer.
The Executive Director promised that all accounts of the Bureau would henceforth be routinely reconciled monthly and reviewed and signed by the Finance Manager.
6.21.6. File Management System
Documents relating to the Bureau‟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 document to activities in the financial statements. It was 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 can be easily identified. In addition, the Bureau should ensure that all files are systematically and chronologically kept and properly referenced.
The Executive Director noted the observation of the audit team regarding its filing system as legitimate and appreciated the recommendation in that respect. He said the Bureau would endeavour to apply the filing system as recommended by the team.
6.21.7. Withholding Tax
Withholding Taxes were not deducted from suppliers‟ payment for goods and services and paid over the NRA. It was recommended that complete and accurate calculations of withholding tax should be made and the full amount paid on time to the NRA. Steps should immediately be taken to recover such amounts from suppliers affected.
The Executive Director explained that withholding taxes were routinely deducted from payment in excess of Le500,000 excluding fuel as required by the existing statute, adding that Management would endeavour to retrieve the total amount of Le2,590,825.00 for 2007 and Le3,157,860.00 for 2008 due to government as withholding tax.
6.21.8. Bank Balances
From the review of the financial statements for 2007 and 2008, it was observed that the Bureau reported having the under-mentioned bank accounts for which account 1008442-01 was the only one verified by the bank.
It is strongly recommended that immediate action should be taken to investigate and adjust the records of the Bureau.
The Executive Director stated that regarding the Bureau‟s Account 1008442 – 02, investigations had been made and the anomaly had been rectified. He also mentioned that the Account had been reactivated and was now operational.