6.13. Sierra Leone Telecommunications Company Limited (2007)
Charges for space segment rental were included in the financial statements due to the fact that management of these services had been out sourced. Supporting documentations in respect of this claim were not available for inspection. Depreciation charge computations were done on the basis of account balances in the general ledger rather than the value of individual assets.
It was recommended that supporting documents in respect of this claim should be made available for inspection and depreciation charge should be computed using the value of individual asset.
The Managing Director in his reply said that there was confusion in the meaning of the words “space segment rental” and bandwidth and that these two were the same as they both referred to the satellite bandwidth used to connect calls to the rest of the world. He also stated that Sierratel had been paying for the space segment rental to Intelsat ever since but the name was however changed to bandwidth in 2006 when Teltac took over the management of the gateway. He added that in all cases, Sierratel was still responsible for making monthly international payments to Intelsat and other satellite operators such as New skies and Arabsat. He further mentioned that in 2007 the computer carrying information on the asset register crashed and management was able to retrieve the data in 2008. Hence correct depreciation was calculated in 2008.
6.13.2. Cash and Bank
Review of monthly bank reconciliation statement revealed uncredited lodgements shown as reconciling items in the reconciliation statement. These were as follow:
Cash and cheque in hand of Le 7,470,711 also remained constant for two years. In addition, reconciliation statements were not prepared on a regular basis and some of those prepared lacked evidences of the preparer and reviewer. It was recommended that unaccredited lodgments shown as reconciling items in the monthly reconciliation statements should be written off. In addition, the amount of Le 7,470,711 should be investigated. Furthermore reconciliation statements prepared should be reviewed by senior personnel.
The Managing Director in his response stated that uncredited lodgment of Le 38,905,506 related to the pilfering of funds by the cashiers in 2003 addition that a decision was taken by the Board to terminate and dismiss the cashiers in question. He mentioned that this amount can no longer be recoverable therefore he had recommended to the Board of Directors for a write-off. Furthermore he stated that he had already recommended a write-off to the Board of Directors for the cash and cheques in hand of Le 7,470,711 and reconciliations were now done regularly and the appropriate personnel check and sign for perusal and vouching.
The under- mentioned staff were still on the payroll after their contract with the company had ended and these amounts added up to the total payroll cost.
The Managing Director in his response stated that the payroll was not immediately apprised of resignations, retirements, termination etc. by the Human Resources Department, hence the salaries of the personnel in question were not removed in time from payroll. He however mentioned that when the retirement benefits of personnel were finally paid such amounts were deducted from those benefits.
It was observed that the inventory valuation sheet recorded a substantially lower figure of Le 1,457,084,886 than that of the trial balance. There were no stock valuation policies to be used to value stock at the end of the financial year. It was recommended that the differences in inventory should be investigated and reconciled as appropriate and that the company should use appropriate stock valuation method to value their stock at the end of the financial year.
The Managing Director in his response stated that he had recommended a write-off to the Board of Directors and in addition, the stock valuations policy was the weighted average method.
There were no movements over the years in the receivables account listed below:
The Managing Director stated that he had recommended a write-off of the total amount of Le 22,504,168,976 from the receivables relating to Mobitel, Sierra communications, S.G. Telecoms, Telephone monthly, Telex monthly, Tele card debtors and Sundry debtors for services.
The Company did not apply an actuarial valuation method in the calculation of its employment benefit obligation which was contrary to IAS 19. A suspense balance of Le16,937,335,000 included in payables could also not be verified as no supporting documents were provided in that regard. It was therefore recommend that the company applied an actuarial valuation to ascertain the correct value of their employment benefit obligations. In addition, necessary supporting documents should be provided for the figure stated above.
The Managing Director in his response explained that the company paid terminal/retirement benefits based on the agreement entered into between the company and the PUGTNC Agreement. He however noted that the company in 2006 engaged the services of an actuarial firm from Nigeria to work on the Sierratel pension fund of the company in order to establish the true position of the fund. He mentioned that his exercise was completed and that he wished to state that all matters relating to Pensions were now handled by NASSIT. He further noted that the company was currently paying pensions for pensioners in the Sierratel Pension Fund in order to help sustain the fund.
6.14. Sierra Leone Water Company (2009)
6.14.1. Operating environment and the system of internal control
There was no evidence of Head Office supervision on branch operations, no budgets, profitability targets, financial and other operational goals set by management for the whole of the period under review.
Revenue from water rates and other charges were recognized only when payments were made by the customers instead of the point in time at which the goods were provided. As a result, revenue was not recognized in the period in which the supplies are made.
Details of total bills issued for the period were not included in the returns sent to Head Office. Therefore the Auditors could not verify the accuracy or completeness of the income stream.
Adjustments were made to revenue received for Water Rates and Charges. However, supporting documents in relation to these adjustments were not made available for inspection.
The Company‟s listing of property, plant and equipment, lacked important details such as cost, date of purchase, depreciation rate and accumulated depreciation. In addition, there was no asset capitalization policy for the period under review.
Furthermore the Company occupied the current premises at Tower Hill based on “long usage”. However no rental or lease agreement existed between the Company and the owners of the premises. It was therefore recommended that Management should expedite the implementation of the audit recommendations so as to enhance a proper control environment.
The Managing Director explained that management was in the process of procuring the service of an Asset Valuer to determine the Present Value of the asset since their historical cost cannot be easily traced or determined. He added stating that 80% of the company‟s assets were inherited from the Government of Sierra Leone. He also mentioned that the Finance Director had been mandated to draft an Asset Capitalization policy.He further mentioned that the Sierra Leone Water Company Act 2001 stated that the assets will be vested to the company by the Minister of Energy of Water Resources and the process was on-going
6.14.2. Weaknesses in the Accounting System
The analysis and supporting documents in respect of other expenses which amounted to Le42,500,000 were not made available during the audit. It was therefore recommended that the analysis should be provided for all figures in the accounts and the same be supported by sub-schedules and adequate supporting documents.
The Managing Director stated that these were opening balances for the FY2008 for which details were not available.
6.15. National Insurance Company Limited (2009)
6.15.1. Reconciliation of General/Life Suspense Accounts
A review of the receivable and payable balances between the General and Life ledgers revealed that both ledgers were not reconciled during the year. This resulted in un-reconciled differences amounting to Le 449.8 million, between the two accounts. Management should ensure that transactions are frequently reconciled and reconciling items promptly cleared.
6.15.2. Absence of Customer Files
We were unable to verify files for some customers with outstanding balances amounting to Le159.6 million and consequently we were unable to ascertain the accuracy and existence of these balances. It was recommended that a proper filing system should be maintained to keep track of the movement of files within and among each of the strategic business units.
6.15.3. Reconciliation and recording of investment
The company‟s investment with First Discount House and Capital Discount House were not being reconciled thereby resulting in differences between amount confirmed by Capital Discount House and that maintained in the general ledger. It was also observed that treasury bills were accounted for at cost without recognizing the unearned portion.
6.15.4. Impairment of investment property
Included in investment property was a title to 78.4 acres of land at Hill Station amounting to Le116 million which had been either sold or leased to foreign missions, companies and individuals by the Government of Sierra Leone. The asset should be impaired and an impairment allowance recognised for it in the financial statements.
Sierra Leone Road Transport Authority maintained a fund with National Insurance Company Limited from which their staff obtained loan and deductions were made at source by the management of SLRTA and paid over to National Insurance Company. It was observed that National Insurance Company did not maintain an up to date record of the staff and approval letters for the existing loans given were not made available by management for review.
6.15.5. Non-compliance with International Accounting Standards (IAS 19)
The Company did not use actuarial assumptions in determining the end of service benefit provision as required by International Financial Reporting Standards (IAS 19). Accordingly, we were unable to verify the completeness and accuracy of the employee benefit liability at 31st December 2009.
6.15.6. Non-compliance with Insurance Act 2000
The Insurance Act 2000, section 55 stipulated that „No insurer shall grant loans or temporary advances either on hypothecation of property or on personal security or otherwise to any director, managing director, general manager or principal officer of the insurer by whatever name called‟ It was observed that National Insurance Company was in breach of the Act by giving out loans to the under mentioned directors.
6.15.7. Recognition of premium revenue
The Company recognized premium revenue for renewal policies that commenced in the ensuing financial year; as such premium revenue amounting to Le362 million relating to 2010 financial year was recognized in the 2009 financial year. Management should ensure premium revenue was recorded appropriately.
A review of the Company‟s respective bank reconciliation statements revealed that there were long outstanding items that spanned as far as 2007 and 2008 in the Sierra Leone Commercial Bank, Union Trust Bank and the Rokel Commercial Bank reconciliation statements. All these lodgements were purported to have been deposited at the bank without being reflected in the bank statement. It was also noted that management had made no effort to resolve the issue. If the amounts remained reconciling items, it meant that the company would have no access to those funds even though the funds had allegedly been deposited into the bank.
6.15.9. Absence of cash count certificate
Although a year-end cash count was organized by the internal audit department, no cash certificate was issued to confirm the cash balances as at 31 December 2009. Cash counts should be done regularly with adequate segregation and petty cash payment should be approved and adequately supported.
6.15.10. Lack of standardized human resource manual
There was no standardized human resource manual or staff hand book that served as a guide for the Company‟s policies on recruitment, training, motivation, performance assessment, etc. Management should ensure that a human resource manual is compiled and made available to staff so that they could be aware of the relevant company‟s policies affecting them.
6.15.11. Fixed Assets Management
The Company does not maintain a proper fixed asset register. There were no identification tags on the Company‟s assets register as such making it difficult for items to be verified.
6.15.12. Information Security Policies and Procedures
The National Insurance Company Limited was yet to develop and implement comprehensive information security policies and procedures to ensure that access to its network and sensitive financial information was granted to authorised personnel only.
6.15.13. Physical access
The National Insurance Company was yet to develop formalised procedures governing physical access to its IT resources. Our inspection of the data centre that housed the main business servers, revealed that management had implemented adequate environmental controls such as air conditioners, smoke detectors, fire extinguisher, etc., to ensure that the critical IT infrastructure functioned within the Company‟s normal premises requirements and that they functioned within the limits specified by the manufacturers.
It was however observed that an access register/log had not been deployed and thus was not available for our review. Activities within the server room were thus not logged and monitored.
6.15.14. Configuration of access rules
The National Insurance Company had no formalized policies or procedures governing the profiling of users on the CSIA application and the network.
6.15.15. Access administration
National Insurance Company was yet to develop and implement formal policies and procedures guiding the creation, modification and management of user profiles on the CSIA application and the network. No policy or practice was established regarding the management of user profiles, disengaged users, users who change departments and users on vacation. Users on vacation were left active on the network and business applications.
6.15.16. Identification and authentication
The National Insurance Company had not instituted formalised processes, practices and standard naming conventions to be used regarding the creation and use of unique user ID‟s and passwords for access to CSIA application and the network. Additionally, guidelines on password settings did not exist.
6.15.17. Super user profile
No formalised policy existed to provide guidelines on creating and managing super user profiles or users with administrative privileges on the network and business applications. Additionally, we also noted that a review of super user activities was not carried out on a periodic basis to ensure that those privileges were not used to circumvent the laid down controls for anomalous use to the detriment of the Company, more so in the capacity that the systems administrators were external consultants.
6.15.18. Control Environment and Risk Assessment
Even though the business application and processes had been set up in a way which reduced the criticality of IT to the operations of the organisation, the business was still reliant on IT. The IT function was manned by an accounting assistant in the Finance department and no proper structure was implemented. All key IT support was from outsourced consultants.
6.15.19. IT strategy
The corporate strategies had not been documented in an IT Strategy document that was supposed to indicate the future plans of the IT department to aid the Company as a whole in achieving its corporate objectives.
6.15.20. Monitoring and risk assessment activities
Review and monitoring of the IT operations were lacking and this was evidenced from our review of the „memos‟ generated by Internal Audit. It was also observed that no IT related issues were raised in the memos.
6.15.21. Back up and Disaster Recovery Plan/Business Continuity Plan
The Company had no detailed documented guidelines on backup and recovery procedures. The Company was yet to develop and implement a formalised Disaster Recovery Plan/Business Continuity plan to ensure continuity of business operations in the event of a major disruption or a disaster.
6.15.22. Computer Virus Management
The Company was yet to develop an antivirus policy and procedures document as a guide to the management of viruses and other malicious codes. We noted in practice however the existence of the E-scan antivirus solutions across the Company‟s IT infrastructure (corporate antivirus solution for the all computers). However, our review showed that antivirus updates were not being monitored effectively.
6.15.23. Incident/problem management procedures
The Company was yet to develop a problem management policy and procedures guidelines that would detail amongst others:
Communication of operational issues;
Resolution of issues by IT personnel;
Logging of issues;
It was also observed that problems encountered by users on the CSIA application were not logged by the application administrator. The Company did not have a help desk application deployed to effectively track, analyze and resolve operational problems relating to this application and other IT related systems.
Errors, faults, incidents, etc., should be logged and a plan of action instituted for resolution or appropriate steps taken to escalate the same to relevant parties. Internal Audit should be mandated to monitor and report on open (unresolved) items and/or long outstanding items at a given period of time.
6.16. National Public Procurement Authority (2007and 2008)
6.16.1. Internal Audit
The Authority had not set up an Internal Audit Unit charged with the responsibility of reviewing the overall operations of the Authority.
The Executive Director, in his response pointed out that the recruitment of an Internal Auditor and the establishment of an Internal Audit Department was planned for year 2011.
6.17. National Public Procurement Authority (2009)
6.17.1. Employee files
Leave allowances amounting to Le 5,600,000 was paid to a contract staff in 2009. However, a review of his employment contract revealed he was only entitled to leave days and not leave allowance.
Some staff members were promoted in the year under review but we were unable to ascertain the basis for such promotions as Board and Management minutes for that period were not produced for audit inspection. Employees files were not properly maintained as Curriculum Vitae and other documents were missing from the files.
It was recommended that Dr. A. Matturi should refund the leave pay that was erroneously paid to him in 2009. In addition, staff personal files should be updated on a regular basis to take account of any recent changes that may occur.
The Executive Director, in his reply, stated that leave allowance paid was in accordance with international best practice of paying a thirteen month fee to consultants. He said further that staff files had now been organized and a policy to update them biannually had been put in place by management.
6.17.2. Fixed Assets &Withholding Taxes
The Fixed Assets Register was not physically verified on a regular basis to ensure that assets owned by the Authority were in existence and in good condition. It was therefore recommended that assets should be physically verified, at least on a yearly basis, to confirm the existence of assets in the Authority‟s Fixed Assets Register.
The Executive Director stated that he had noted the audit recommendation.
It was stated in the Executive Director‟s reply that all outstanding payments had now been made to the NRA and were available for inspection and that all taxes withheld were now paid within fifteen days of the end of the month.
Upon verification it was noted that evidence for the payment of outstanding withholding taxes was not made available for inspection. Also there was no evidence to show that a policy of remitting all taxes withheld to the National Revenue Authority within fifteen days of the end of the month had been instituted as the tax liability of the Authority was on the increase.
Taxes withheld from suppliers payments for goods and services for the period 2009, to the tune of Le 12,426,593 were not remitted to the NRA.
It was recommended that all outstanding unpaid withholding tax must be paid over to the NRA, with immediate effect, and in future, all taxes withheld from suppliers‟ payment must be paid over to the NRA within fifteen days of the end of the month in which it was withheld.
6.17.3. Unsupported Payments
Disbursements of funds, to the tune of Le 41,021,000 in 2008, were not backed by supporting documents. It was therefore recommended that expenditures incurred should be backed by adequate supporting documents by way of payment vouchers, invoices and receipts. Full recoveries should also be made for any amount not backed by adequate supporting documentation.
The Executive Director, in his reply, stated that all payments were backed by adequate supporting documents and that they were available for verification.
Auditors were unable to verify supporting documents, to the tune of Le 9,000,000 which related to advertisement and publicity. Moreover, payment vouchers, totalling Le 32,020,000 were still without the relevant supporting documentation.
6.18. Sierra Leone State Lottery Company Limited (2009)
6.18.1. Management of property, plant and equipment
Management did not maintain a comprehensive Fixed Assets Register. Management was notified and they opted to prepare Fixed Assets Register. Nonetheless the exercise revealed material differences in depreciation charge per Assets Register and trial balance which resulted to the re-computation of the depreciation by the audit team and trial balance. The company should endeavour to maintain updated Fixed Assets Register indicating the date of purchase, description of assets, amount, depreciation rate and location of all its Fixed Assets.
6.18.2. Revaluation of property, plant and equipment
In 2004 the company opted for the revaluation model for valuing its office premises at No 44 Siaka Steven Street, in accordance with the International Financial Reporting Standards (IAS 16) and the valuations must be kept sufficiently up to date so that the carrying amount did not differ materially from that which would be determined using fair value at the balance sheet date.
However, no subsequent revaluation activity had been carried out since the initial revaluation exercise.
Management must endeavour to carry out a revaluation exercise on this property on a regular basis to ensure that the carrying value of this property at any balance sheet date does not exceed its market value.
6.18.3. Long outstanding reconciling item
A review of bank reconciliation statement revealed long outstanding items and some of which were captured in 2008 and as at 31st December 2009 were still outstanding.
Management should endeavour to conduct a thorough investigation in other to resolve long outstanding items.
6.18.4. Bank reconciliation statement
Bank reconciliation statement was not properly reviewed, as a difference of Le 14,523 was noted between actual cashbook balance and alleged cashbook balance per reconciliation statement and this was marked, checked and reviewed by the Treasury Manager. Management must endeavour to implement a thorough review process so as to ensure errors and omissions were identified to facilitate prompt action.
6.18.5. Actuarial valuation of end of service benefit
It was observed that the company‟s present position on end of service benefit increased by 41% on 2008 provision; this also represented 16% of total assets. The amount recognised as liability was however not determined actuarially as required by the International Accounting Standard No.19 on employee benefits for a defined benefit scheme. For that reason, the audit team could verify the completeness and accuracy of the employee benefit liability at 31 December 2009. Management must ensure that provision of end of service benefit was in compliance with accounting Standards (IAS 19). The company could alternately switch to a defined contribution scheme for which an actuarial valuation is not required.
6.18.6. Retained earnings/general reserves reconciliation
The audit team identified series of journals totalling Le 944,251,224, booked by management into 2008 records, subsequent to the audit field work but prior to the approval of the financial statement by the directors and these entries were not reflected in the financial statements. This resulted in some of the opening balances in the company‟s records not corresponding with the audited financial statement for the ended 31 December 2008. This issue was compounded by the fact that the journals were effected 11months following balance sheet date so therefore management should have been in a better position to identify such misstatement and bring this to the notice of the external auditors. Management must make sure that all transactions are captured before the financial statement is approved by the Board.
6.18.7. Independence of internal audit departments
The company maintained an in-house Internal Audit Department which happened to report directly to the Managing Director as indicated in the Organogram. Ideally, Internal Audit Departments were set up to identify and assess risk and also to check and report non compliance of policies and procedures adopted by management.
In other to preserve the independence of the Internal Audit, there must be an independence group of company officials for the purpose of reviewing and echoing findings at Board level and this will help ensure that the objective of Internal Audit Department is achieved. The company must form an audit committee, comprising of at least 3 non-executive directors, for the purpose of reviewing the findings and recommendation by the Internal Audit Department. Also to help ensure that recommendations were promptly and appropriately implemented.
6.18.8. Receivables from the National Commission for Privatisation
The company‟s property at Tower is partly occupied by the company whilst the remaining portion is rented out to the National Commission for Privatization and the Sierra Leone Audit Board. These companies also share common facilities such as electricity and waters. From an agreement between the company and the National Commission for Privatization, upon receipt of the bills from services providers, the management of the Sierra Leone State Lottery Company makes payment to these suppliers and later bill the National Commission for Privatization and the Sierra Leone Audit Board based on office floor occupied. The audit team noted that unlike the Sierra Leone Audit Board, the National Commission for Privatization has not been making prompt settlement for utility bills paid on their behalf and rent for the flat occupied. Highlighted below is analysis showing the balances as per client record over recent period.
The analysis above showed that these balances had been accumulating and management continued to incur expenses on their behalf and that the National Commission for Privatization had shown no serious intention to meet their obligation.
Management must endeavour to collect all outstanding rents from the National Commission for Privatization and also seize to make settlement for utility bills on their behalf until refunds are made.
6.18.9. Non-payment of taxes to the National Revenue Authority
It was observed that the company had not paid Cooperation tax and Pay as You Earned Tax amounting to Le 484 million and Le 517 million respectively for 2009 in compliance with the Income Tax Act. It was also noted that these amounts had been accumulated over the years and management had not made clear any strategy regarding the settlement of these balances in the near future. Management must ensure all regulatory requirements such as prompt settlement of Cooperation tax and Pay as You Earned Tax are adhered to.
6.18.10. Classification of withholding tax
It was noted that management was in the practice of recognising withholding tax paid by tenant as assets and during the course of the audit exercise; we also identified withholding tax of Le27,511,000 paid by tenant being recorded as assets. Management must recognise all withholding tax paid by tenant as expenses.
6.18.11. Management of NASSIT contribution account
Total accrued NASSIT for December 2009 was Le 11,609,125 whilst the account balance showed Le 67,430,999.91. It was also noted that NASSIT accrued for October and November 2009 were completely paid.
Management must endeavour to prepare a reconciliation statement especially for balance sheet accounts so that long outstanding items and miss postings are identified and corrected.
6.18.12. Settlement of trade debt
The company had not been making prompt settlement to it only supplier of Lottery Tickets, Ro-marong .Trade balance with this party at balance sheet was Le 197, 995,771 signifying that the company took an average of 72 days before settling it balances with this party. The audit team was also able to identify list of invoices regarding 2008 transactions which were currently outstanding. The company must endeavour to make prompt settlement to it trade debtors.
6.18.13. Differences in staff advance register and trial balance
A difference of Le 10,348,169 was identified between the staff advance register and the trial balances resulting from miss posting into the general ledger which was not detected by management. Management should ensure proper book keeping is done.
6.18.14. Audit plan
It was noted during the audit that the internal audit department did not maintain an audit plan. The internal audit team must endeavour to prepare a work plan for each financial year detailing its plans in achieving the audit objective.
6.18.15. Misclassification of income
The sales revenue from the different products was misclassified. Monitoring or checks should be done regularly by Heads of unit to ensure that such errors do not occur or even if they occur, to be able to identify them on time and then make the necessary reclassifications or amendments.
6.18.16. Misstatement of revenue
It was observed that actual quantities sold and sales returns were also misstated when entering the details into the system. These errors were however reversed (some on the same day and others, subsequent days), but it was possible that there were significant posting errors that management was not aware of and in effect, were not reversed. We therefore recommend that controls should be put in place to mitigate such errors. Controls like having separate individual posting and reviewing, and also doing reconciliation between actual tickets sold for the period and amount posted into the system on a regular basis.
6.18.17. Difference in actual cost computation
From our review of the contract agreement between Sierra Leone State Lottery and Ro-Marong Industries Ltd, differences were noted on the agreed price per ticket. Terms and conditions of the contract agreed on by the Board of Directors should be strictly adhered to.
6.18.18. Inaccurate PAYE computations
Using the approved Income tax rate, P.A.Y.E computed for some staff (those of higher grades) was inaccurate as the results from the computation revealed that P.A.Y.E deducted from this category of staff was higher than what was supposed to be. P.A.Y.E should be computed based on the approved rates and computation should be reviewed to ensure accuracy.
6.18.19. Unapproved journal postings
During the review, it was noticed that the following journals were not approved by the relevant authority. Also, from inquiries made it was noted that the preparer posted the entry raised into the system. We recommend that the entity instituted adequate segregation of duties when raising and posting journals.
6.18.20. Inadequate supporting documentation for operational expenses
Certain expenses termed confidential disbursement (CD Expenses) were filed without any supporting documentation. Operating Expenses were filed with photocopy of a document called „Minute Paper‟ with prices quoted on it rather than the original invoice from the supplier. Each invoice for goods and services should be attached to all relevant supporting documents relating to the procurement process.
6.18.21. Non-compliance with procurement procedures
As per the policies of the organisation, three pro-forma invoices should be obtained from three (3) different suppliers when purchasing goods. However, from our review it was noted that this had been flawed.
6.18.22. Non-compliance with inventory management procedures
The ticket production summary report sent by Ro-Marong that was supposed to be signed by various officials was only signed by the Security Printing Officer.
6.18.23. Absence of stock -take report
As per the policies of the organisation, stock take should be performed monthly. However, from review and inquiries, it was performed half yearly and no report was provided to us for this to show evidence of the count.
6.18.24. Poor inventory management
The records in the financial statement differed significantly by that maintained by the stores department.
6.19. Sierra Leone Investment and Export Promotion Agency (2009)
6.19.1. Cash Count
Although cash count was carried out by the agency, it was not witnessed by a third party. It was therefore recommended that all year-end cash count exercises must be witnessed by external auditors.
The Chief Executive Officer (CEO) responded that all future cash counts would be witnessed by an external auditor.
6.19.2. Fixed Assets
Labels/codes of fixed assets were not included in the fixed assets register. It was therefore recommended that the agency should maintain a standard fixed assets register, indicating codes and locations of its assets.
The CEO stated, in his response, that locations of assets were included in the Fixed Assets Register and that steps would be taken to include the identification codes as well.
PAYE and NASSIT contributions were deducted from staff emoluments but the monies were not paid over to the respective authorities on a timely basis. PAYE was overstated for the months of March, April, May, June, July and August, 2009 to the tune of Le 2,039,776. Staff personal files were not updated regularly. Increases in staff remuneration were awarded but no supporting correspondence to authenticate the action was seen. There also was a change in the composition of Directors‟ salary with no supporting correspondence to validate the action.
Loans were given to staff who did not meet the minimum requirement set in the conditions of service.
It was recommended that with immediate effect, all PAYE and NASSIT deductions should be paid over on time to avoid the imposition of penalties by the appropriate authorities. In addition, a tax rebate should be given to settle the overpayment of PAYE. Furthermore, staff personal files should be updated on a regular basis to take account of any recent changes that may occur and the agency must implement its loans policy as stated in the conditions of service.
The CEO in his reply stated that:
He would pay all PAYE and NASSIT deductions on time to the appropriate authority in future;
His approved budgetary allocation was not fully paid to them, which resulted in some financial constraints;
A tax rebate would in future be paid to staff;
The maintenance of Personal files had improved from the last audit and they would strive to make the filing system better; and
Management would review the loan policy.
6.19.4. Unsupported Payments
Some items of expenditure were still not requisitioned, and PVs to the tune of Le 3,347,750 were still without adequate supporting documents.
6.19.5. Conditions of Service
The Agency did not have an approved Conditions of Service. In addition, personal files were not maintained for the CEO and his Directors.It was recommended that the agency should develop a package of Conditions of Service and also have personal files maintained for every staff.
PAYE tax amounting to Le 54,052,565 was not deducted from staff benefits. It was recommended that PAYE must be deducted from other benefits and paid to the NRA.
6.19.7. Staff Travel Advance
Balances on staff travel advances account were not supported by a list of individual staff balances. It was recommended that staff travel advance must be supported by a list of individual staff balances.