7. Audits of Schools and Vocational Institutions
7.1. Main Points
What we examined
Our audits of schools and vocational institutions are risk-based compliance audits. We focus on high risk areas. By risk we mean the likelihood of an undesirable event occurring and the potential impact should it happen, e.g. corrupt practices.
For each institution selected we examined a test sample of revenue and expenditure transactions. Our audit objective was centred on evaluating the adequacy of internal controls in the collection of fees and on expenditure from these sums which serve as a platform for effective school operations as well as procedures. We also are seeking to determine whether applicable laws, policies and regulations have been complied with and whether the systems and practices are adequate to exercise a reasonable level of internal control over operating activities.
Why it’s important
It is self-evident that the citizens of Sierra Leone value education for their children and themselves. Education is needed for the advancement of society and poverty reduction. It is a building block for economic development. Sierra Leoneans are greatly concerned about what they perceive to be poor performance by students in government schools. They are more than a little concerned too about the value for money reflected in the performance of the school system as a whole. Government policy and the expenditure of significant public funds to get the desired results is a reaction to the wishes of the people. If it is important for them and so too it is for ASSL.
What we found
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 as follows:
There are extensive disbursements without adequate supporting documents.
Procurement rules not followed.
School fees are being collected without the issuance of receipts in some instances.
In future years we will continue to review the situation and we would hope to see evidence of improvement. A good start would be to see the Ministry of Education follow-up on our detailed observations as set out below.
7.2. Detailed Findings and Recommendations
A Table of the schools where audit findings gave rise to the matters raised in the following paragraphs is attached in Appendix B below.
7.2.1. Arrears of School Fees
A review of the Schools Fees Register disclosed a total of Le 24,740,000 as arrears of fees for the periods under review. These arrears were not supported by documents indicating that the pupils were transferred, withdrawn or expelled from the School. It was therefore recommended that the Principals should ensure that for each school term, a deadline must be set for the payment of fees, followed by disciplinary action against pupils who failed to pay.
7.2.2. Revenue not banked before use.
Revenue received as school fees to the tune of Le1,013,429,202 at various schools were not banked before use thereby violating Section 62(1) of the Financial Management Regulation which states that: “All departmental revenue or other public moneys collected shall be paid into a bank account authorized by the Accountant-General or into the treasury daily or if it is not possible, at the earliest opportunity”. It was therefore recommended that henceforth, Principals must adhere to the aforementioned regulation.
A careful examination of the records produced by the schools revealed that Withholding Taxes totalling Le 6,813,790 were not deducted and paid to the National Revenue Authority thereby contravening Sec (117) 4 of the Income Tax Act 2000.
It was therefore recommended that all principals involved in such a case should ensure that the regulation of deducting Withholding Tax and making payment to the National Revenue Authority must be strictly adhered to and the such taxes should be recovered immediately, paid to the National Revenue Authority and the evidence of payment forwarded to the Audit Office for verification, and the Commissioner of Income Tax should take the necessary action.
7.2.4 Payment Vouchers not approved
It was observed that some payment vouchers were not approved in respect of various payments made that amounted to Le 13,024,000. It was recommended that the Principals should explain why they did not approve the payment vouchers before the monies were disbursed; otherwise the various sums should be refunded. It was also recommended that all subsequent payment vouchers must be properly checked and approved by the Principals before payments were made.
7.2.5 Expenditure without supporting documents
Disbursements made without adequate supporting documents amounted to Le 324,204,251. It was therefore recommended that all supporting documents in relation to the schools involved should be submitted to the Audit office for inspection and, in future, all supporting documents should be attached to Payment Vouchers and retained for inspection purposes.
7.2.6. Inadequate control over issuing of receipts
School fees totalling Le 8,714,170 were collected for which receipts were not issued. It was recommended that the Principal should ensure that receipts were issued for all fees collected and they must be accurately recorded in the School Fees Register/Cash Book.
An explanation together with the documentary evidence must be given by the Principal(s) involved for the non- issuance of receipts otherwise, the sum of Le 8,714,170 should be refunded by the principals of the various schools.
7.2.7. Monies collected and not accounted for
Financial Management Regulation (FMR) 2007, states that „The vote controller or other person doing a spot check shall investigate any surplus moneys found when balancing the cash book with the collections”. Le50,961,500.00 was disbursed in excess of school fees collected.
It was therefore recommended that the School‟s Principal and Bursar should ensure that all fees collected must be fully disclosed. In addition, the School Principal is requested to explain why the above amount was not disclosed, otherwise, the entire amount should be refunded and details of receipt of payment forwarded to ASSL for verification.
7.2.8. Outstanding Loans
An amount of Le 5,000,000 given out as loan was yet to be recovered from the said contractor. It was recommended that the Principal should recover the Le 5,000,000 from the contractor otherwise the whole sum should be paid by him into the school‟s account and evidence of payment forwarded to ASSL for audit verification.
7.2.9. Procurement procedures not followed
It was observed that payments totalling Le 20,644,000 at various schools were made for goods and services without „Requesting Quotations‟ from at least three suppliers. It was therefore recommended that the Principals should ensure strict adherence to procurement regulations.
7.2.10. Appraisal of teachers not done
An examination of Teacher‟s personal files at various schools disclosed that appraisal of teachers were not done. It was therefore recommended that, with immediate effect, the Schools‟ Head Teacher/Principals should start using the appraisal forms supplied by the Ministry of Education for appraisal of teachers on a yearly basis, and details forwarded for to ASSL for verification.
7.2.11. Inventory registers not maintained
Inventory Registers were not maintained at various schools. It was therefore recommended that the Schools‟ Bursars should expedite the opening of this important document and all serially coded valuable properties of the school posted therein.
Monthly Bank Reconciliations were not prepared in some of the audited schools. It was therefore recommended that with immediate effect, the Schools‟ Bursars must prepare Monthly Bank Reconciliations which should be reviewed by the School‟s Principal.
7.2.13. Documents not presented for audit inspection
In spite of repeated requests, several vital documents were not presented for audit inspection in some schools.
It was therefore recommended that the Principals should ensure that a proper system existed for the safe custody of all Accountable documents by putting shelves and control ledgers in place to monitor the inward and outward movements of documents. In addition, the Accountable documents should be made available for inspection, to avoid attracting Section 18 (1) of the Audit Service Act, 1998.
7.2.14. Poor records management
As a result of poor records management, staff members did not have personal files and some existing files lacked vital information such as medical reports, offer and acceptance of employment letters etc. It was therefore recommended that the Principals should create individual files for all staff and each file should contain staff details and documents such as those mentioned above.
7.2.15. Inspection of schools by the Ministry of Education
There was no evidence that the Inspector of Schools periodically visited some schools to observe their operations and provide support by reviewing Records, Procedures, Progress and report on them as required by the Act. It was therefore recommended that Inspectors of Schools made annual periodic visits to schools as required by the Education Act 2004 and provide copies of the Inspection Report to the school.