SIERRA LEONE HIGH COMMISSION, LONDON FOR THE PERIOD 1ST AUGUST, 2004 – 31STJULY, 2010
1. Accounting System and Records
It was observed that during the period August to October 2009, there was no compliance with the FMR 2007. Pre-numbered Payment Vouchers sent from the Accountant General Department were given hand written numbers. The serial numbers on these vouchers were totally ignored. Payment Voucher Books were not available in the High Commission even though requests had been made to the Accountant General for these documents. Bank Reconciliation Statements were not prepared. A fully manual system was in place which made the review of documentation very cumbersome. The system in use was not documented in any way. The knowledge and skills of the Financial Attaché during the period August, 2004 to October, 2009 were not up to the required standard. He was unaware of the current GBAA 2005 and FMR, 2007 being used in the Financial Management System of Government. It was therefore difficult to retrieve pertinent documents without having to refer to the previous Financial Attaché who had retired from the Service in October, 2009.
It was however recommended that the Accountant General should be more involved in the Financial Management of the High Commission. Furthermore, even though a new Financial Attaché was in post, regular updates must be conveyed to this staff to ensure that he was always au fait with the current financial rules and regulations of the Government of Sierra Leone.
In addition we advised that with immediate effect, proper Bank Reconciliation Statements should be prepared on a monthly basis and approved by the Head of Chancery, and that the current system in place should be documented by the High Commission to give a guide as to how the system should be operating in relation to the GBAA, 2005 and the FMR, 2007.
In her reply the HOC stated that the identified problems and/or procedures had been corrected. She pointed out that such a practice was primarily due to a limited and dated understanding of relevant and applicable GoSL financial regulations, on the part of the former long-term accountant, who was just an Accounting Clerk posted to the Mission in the early 1980’s. Consequently the said accountant devised a consistent and simple system of checks and balances which he utilized and evolved over his two decades in the position.
She also noted that the office was forced to hurriedly move twice, to two different locations, within a few years. As a result numerous pertinent documents were inadvertently misplaced and/or lost adding that the office was in the process of creating an extensive document database, with electronic backups, so as to avoid a re-occurrence of that problem.
2. Consular Fees
The major source of income of the High Commission on behalf of the Government of Sierra Leone was payment for visas, and other consular services such as Emergency Travelling Certificates. Most of the Consular Fees received during the period under review were not promptly paid into the Consolidated Fund. During the period under review, a total, excluding opening balance in the accounts, of £1,901,890.18, was paid into the Barclays Bank Hanover Branch Account as receipts for Consular Fees and a total of £1,994,978.97 was spent on various activities. Evidence produced revealed that only an amount of £71,000 was paid over to the Government of Sierra Leone in November, 2009.
In February, 2007, the High Commission issued a circular advising all applicants for visa and other consular services that as at that date, no cash payments would be accepted for Visa Fees. All Visa Fees should be paid directly into the Consular Bank Account. Comparative tests carried out on receipts for Visa Fees into the Bank Account, revealed that during the period February, 2007 to 2009, more amounts were paid into the bank accounts for similar periods than for earlier years (August 2004 to December 2006) when fees were being paid by cash to the High Commission and the latter was responsible for paying such monies into the Bank Account.
It was observed that Consular Fees were being used to carry out the activities of the High Commission, without the prior written approval of the Minister of Finance and the Ministry of Foreign Affairs and International Cooperation. During the period under review, our sample tests revealed that amounts were utilized from Consular Fees for various expenditures ranging from medical expenses, repairs and maintenance, petty cash expenses, payment for telephone and other utility bills.
We therefore advised that it was imperative that mechanisms should be urgently put in place by the Ministry of Finance to ensure that the bank account opened specifically for the payment of consular income was not easily accessible to the High Commission’s staff. Also, in the event that there is the urgent and pressing need for funds to be used, this must only be done on the written authority of the Ministry of Finance, the Ministry of Foreign Affairs and International Cooperation and the Accountant General.
The HOC in her response explained the following;
That Prior to the High Commission’s unilateral decision in February 2007, to no longer accept cash payments for Visa Fees, cash payments were indeed received at the High Commission of which such payments were deposited into a Visa Fees account at regular, sporadic intervals of one week or at times beyond and that these deposits, and the entire process itself, were subject to internal reconciliation, which led to a delay in eventually making deposits to the Consolidated Fund.
The High Commission’s unilateral decision in February 2007, to no longer accept cash payments for Visa Fees, was a direct positive move to increase financial benefits accrued to GoSL, and to limit the shortfall referred to in this finding.
The High Commission operated in an arena where increasingly, timely financial commitments had to be made and or adhered to, so as to avoid serious embarrassment and/or financial cost to GoSL and that nearly all of the High Commission’s expenditure was taken from the Mission’s Current Accounts. However, due to limited quarterly and timely allocations, in some instances the High Commission was forced to revert to the consular fees to meet immediate pending, and at times unexpected obligations, and thus avoid serious embarrassment and/or escalating costs to GoSL. At such instances, she said, the High Commission immediately contacted the Ministries of Finance and Foreign Affairs and International Cooperation for approval and that unfortunately, as in most instances in the past, a response was not received.
3. Fixed Assets
It was observed that all items purchased and categorized as furniture and equipment or building were not recorded in any Master Inventory or Fixed Assets Register. There was also no evidence of checks being done to ensure that items in various locations used by the High Commission were intact. Items in all residences and Chancery Office were not marked signifying ownership by the High Commission.
We recommended the following;
A Fixed Assets Register as per the Financial Management Regulation should be developed as soon as possible;
The Head of Chancery must ensure that the location and state of the High Commission’s assets were to be checked on a regular basis. Evidence of such checks must be documented; and
Proper identification marks must be affixed on all Fixed Assets owned by the High Commission, with immediate effect.
In her reply, the HOC informed the ASSL that the High Commission was in the process of creating a comprehensive register of assets for store verification, in accordance with the Ministry of Foreign Affairs and International Cooperation. In addition, the HOC said that, periodic accounting and assessment of such property currently took place and that all items were in the process of being affixed with markings, and logged accordingly.
4. Staff matters
Human resource issues are an integral part of any organizational system. For the system to be functioning in the most efficient manner and in ensuring value for money, laid down procedures should be followed. The High Commission is being staffed by both Diplomatic Staff, who are part of the regular Civil Service of Sierra Leone, and local staff who are employed directly in the United Kingdom. A review of the personal files of local staff of the High Commission revealed the following:
There was no written down policy guiding the terms and conditions of service of local staff employed by the High Commission;
Out of the then eighteen (18) local staff, only four (4) of them had employment letters in their files;
No record of incremental letters was seen in the files of these staff;
Promotion letters were not found in any of the personal files;
The procedure for the recruitment of local staff was not found in any of the files. No evidence of interviews was seen or authority from the Ministry of /foreign Affairs for their employment was found in any personal file, with the exception of the most recent employee, a Security Officer;
Even though the amount to be paid to each local staff should be as per payroll sent from the Accountant General on a monthly basis, an amount of between £120 and £170 was being paid as Travelling Allowance on a monthly basis to each local staff up till November, 2009;
There was no evidence of receipt of salaries of staff working in the residences of diplomatic staff. Such salaries were received on their behalf without any written authority; and
It was observed that some diplomatic staff had been in post for more than four years even though the policy for postings clearly stated that diplomatic staff were only entitled to serve a term of two years in one position.
It was therefore recommended that:
A Staff policy should be developed and circulated to all staff as soon as possible, to guide the dealings of such staff in the future;
The Two-year term limit for diplomatic staff be adhered to by the Ministry of Foreign Affairs and International Cooperation to usher in fresh ideas into the High Commission, on a regular basis;
All local staff should be recruited through a proper recruitment process and such procedures should be developed as soon as possible to guide future recruitment of local staff;
No funds should be paid to any staff except those approved by the MFAIC and the MOFED;
The Authority for the receipt of salaries on behalf of domestic staff during the period under review should be produced with immediate effect, or such monies refunded to the Consolidated Fund, if such authority cannot be produced; and
With immediate effect, all staff, be they domestic or office staff should sign for salaries when received, and evidence of such receipt be maintained in the finance section of the High Commission.
The HOC in her response explained the following:
That it should be noted that the four were the most recent employees, and that it was possible that such documentation might have been inadvertently misplaced.
That the issuance of ‘‘incremental letters’’ was not applicable to local staff.
That all such personnel matters were being addressed and corrected in accordance with recommendations in the Management and Functional Review of the Ministry of Foreign Affairs. That the issue relating to payroll had being corrected.
That salaries of staff working in the residences of diplomatic staff were signed for and collected by their principals, the High Commissioner and Deputy High Commissioner.
That the issue of the long stay of diplomatic staff was strictly under the purview, and as such the discretion of the headquarters of the Ministry of Foreign Affairs and International Cooperation.
5. IDD Telephone usage
Even though a circular had been issued by the Government specifying how IDD calls in particular should be accounted for as far back as 22nd June, 2000, there was no evidence that the process had been followed by the High Commission. It was also noted that huge amounts were being spent on telephone bills which if continued might become unsustainable. Amounts incurred during the period under review totaled £64,752.88.
It was recommended that, with immediate effect, steps were to be taken to ensure that all IDD telephone calls were monitored and recorded using the recommended format for authorizing and monitoring all IDD calls.
The HOC stated that it was extremely difficult for her to control the use of IDD by either the High Commissioner and/or the Deputy. She added that IDD phones were located in the respective private residences of the High Commissioner and the Deputy and that despite this, the High Commission had made a conscious, and very successful attempt to limit cost by the increased usage of fixed cost calling cards.
6. Residences and Chancery office
Some repair work was done on the Government owned properties in London; though there was still much more to be done. The majority of these repairs had been done by just one contractor over the period under review. The contracts for repair works done were not drawn up as per the National Public Procurement rules and regulations. The terms and conditions of the contract only appeared to be one sided on the part of the contractor. The obligations of the High Commission for certifying and inspecting before payments were to be made did not form part of the contracts. No certification was done by an independent person or a member of staff of the High Commission to confirm that repair works done were as required, before payments were made. Payments for these repairs were made from Consular Fees. Except in 2010, such payments from that source were not authorized by the Ministry of Finance and the Ministry of Foreign Affairs and International Cooperation. As earlier mentioned, there was still a lot of work to be done on the Government properties to bring them up to the basic standards befitting the Country’s High Commission.
Against that background, we recommended that:
As of then, all contracts should be drawn up using the National Public Procurement format as a guide;
All major construction work or repairs should be certified before payments were made;
Written authority from the Ministry of Finance must be received to utilize Consular Fees for any expenditure whatsoever;
The Government of Sierra Leone through the Ministry of Finance should cause additional funding to be provided for the upkeep of their properties abroad; and
An independent expert from the Ministry of Works should be asked to give a general review of the state of the Government properties owned in London and advise the way forward in bringing them up to the required standard.
The HOC in her response stated the following:
That she agreed that in future she would follow the National Public Procurement format as a guide
That it was extremely difficult to identify vendors that were willing to engage in transactions with the High Commission on an ongoing basis, given late and sporadic payments, and the inability to pay in advance for services, as vendors often require.
That as indicated above, the High Commission often found itself operating from a point of weakness, given late and sporadic payment, and the inability to pay in advance for services, as vendors often required and as such they were often compelled to accept terms of engagement they otherwise would have declined.
That, the High Commission operated in an arena where increasingly, timely financial commitments had to be made and/ or adhered to, so as to avoid serious embarrassment and/ or financial cost to GoSL and that in many instances the High Commission was forced to revert to consular fees to meet immediately pending, and at times unexpected, obligations, and thus avoid serious embarrassment and/ or escalating costs to GoSL .She said at such instances the High Commission immediately informed the respective GoSL parties (the Ministry of Finance and the Ministry of Foreign Affairs and International Cooperation) for approval. Unfortunately, in most instances in the past, a response was not received.
That the consultation of an independent expert from the Ministry of Works would be adhered to.
7. Use of pooled (utility) vehicles
As at date, the Sierra Leone High Commission in London did not have any laid down Vehicle Use policy nor was it implementing the policy in the FMR, 2007. Vehicle Log Books were not in use. There was no laid down policy on fuel expenses and usage in place. Vehicles were parked at the drivers’ premises at the end of the working day.
We highly recommended that:
Steps should be taken to find alternative parking for official pooled vehicles at the end of the working day.
The institution of these recommendations should ensure proper monitoring systems that would not only guide the High Commission when budgeting for vehicle expenses in the future, but also ensure accountability in the management of these vehicles.
In her response, the HOC informed the ASSL that the High Commission was in the process of devising vehicle maintenance and monitoring policy, which entailed the use of a log book. In addition, she said, the High Commission finds it most prudent to permit drivers to park vehicles at their residences, given the frequency of very early, as well as very late, assignments for airport courtesies for visiting GoSL officials, and the like. Parking vehicles at the office, she said would result in substantial additional financial cost for the security of the vehicles, as well as enabling the drivers to collect the vehicles in a timely manner, for the frequent very early, and also late, assignments.
8. Remittances to the High Commission
It was noted that remittances for Personal Emoluments and Other Charges expenditure continued to reach the High Commission’s bank account. However, such remittances were not received in a timely manner. This resulted in revenue held on behalf of the Government of Sierra Leone, such as Consular Fees, being used to meet very pressing expenses such as payment for the mortgage of property held, vehicle insurance and salaries and wages that were time bound.
It was also observed that whilst the actual quarterly expenses of the High Commission were in the region of over £80,000 per quarter, remittances for other charges on a quarterly basis were on an average of under £30,000. This disparity in the expenditure levels as against the actual approved income of the High Commission has to be thoroughly looked into. The Sierra Leone High Commission in London is a very busy office with huge expenditure for basic running costs. The Minister of Finance should consider options that can be instituted to enable the High Commission meet its commitments with the appropriate approval for expenditure. One such option is an increase in the quarterly allocation of the Commission. Another is giving the requisite approval for an agreed portion of Consular Fees to be used to meet huge pressing expenditure such as the payment for the mortgage of the High Commission’s offices, payment of insurance for official vehicles, and urgent unforeseen expenditure that are incurred during the visit of H.E the President to the United Kingdom.
9. Cash payments
During the course of our audit work, it was observed that significant amounts were paid out in cash. Such payments included those made to contractors. Others were salaries, wages and petty cash expenditures. This is most inappropriate. Limits should be set for what can be paid for in cash.
All major expenditure such as stationery, major repairs and maintenance, salaries and wages, travelling etc, should be made using the cheque system. This would ensure that the use of Government funds can be easily and readily monitored, and accountability for such funds would be assured.
In her reply the HOC said that salaries were no longer paid in cash, rather, by direct bank transfers. In most, instances the said, cash payments were resorted to due to the usually late manner in which the High Commission was compelled to satisfy its financial obligations. At such points vendors refused cheque payments and demanded cash payments, adding that within the financial system the High Commission operated, there was a concerted move away from cheque payments towards cash payments.
10. Back Up System
It was noted that there was no back up system for the current Excel System in place in the High Commission’s Finance Department.
We therefore urged that a backup system be speedily organized for a daily back up of the financial and other relevant records of the High Commission, to ensure that in the event of a system problem, all relevant records would be secure.
The HOC advised the ASSL that a back up system had since been in operation.
11. Outstanding matters
The following were observed;
Although some form of a Cash Book was maintained for the period under review, it was still not up to the required standard.
For the period August, 2004 to January, 2007, it was not possible to ascertain whether the cash receipts of Consular Fees were complete due to the unavailability of Receipt Books during that period. Tests carried out on the available Receipt Books as against the Bank Statements revealed numerous differences with amounts classified as receipts in the Bank Statements greater than what was checked as per available Receipt Books.
The situation remained the same as no Bank Reconciliation Statements were prepared for the period under review.
For the period August, 2004 to January, 2007 some temporary Receipt Books were still used. It was difficult to ascertain the completeness of such receipt books.
The practice of wages being paid out of Consular Fees was still ongoing until October, 2009
The record keeping during the period August, 2004 to October, 2009 made it difficult to retrieve documents for inspection and the situation remained the same.
The recommendation for the use of Log Sheets for telephone calls as advised by the Secretary to the President as per a memorandum issued in June, 2000 has still not been implemented.
Payments were still being made out of Consular Fees without the written authority of the Minister of Finance.
The explanation given by the previous Head of Chancery in respect of the use of Consular Fees for the rehabilitation of the High Commission’s property was noted. However this practice of using funds from Consular Fees without any explicit permission from the Minister of Finance was quite common during the period August, 2004 to March, 2010. It was only in April, 2010 that some form of authority was given in writing by the Director General, Ministry of Foreign Affairs and International Cooperation for sums of money from Consular fees to be used for specific purposes. Albeit no authority was conveyed by the Minister of Finance.
New items purchased, worth £5,496.46 were not taken on ledger charge and a Fixed Assets Register was not maintained.