Weak internal controls in government departments noted

A report by the Auditor General on public accounts in 2001 reveal hefty arrears still due to the government and weak internal controls across government departments resulting in a lack of safeguards of revenue and assets.

The report, laid on the Table of the House of Representatives, stresses that arrears of revenue, amounting to about Lm404 million at the end of 2001, was still an area where significant improvement could be registered, considering the inefficient procedures for the collection of debt and weak enforcement procedures.

The report said no verification was carried out with regard to the figure of arrears of revenue at the social security department. "This was a result of clear evidence that the gross amount of arrears is unrealistic and unreliable."

It also said that notwithstanding repeated mentions in reports by the National Audit Office and the issue of formal instructions by the ministry of finance on regulations governing advances for travel abroad, the extent of compliance was far from satisfactory.

The NAO expressed concern that there was still widespread non-observance by ministries and departments of the requirements specified in the financial rules and regulations.

On the expenditure side, the report expressed concern over payment vouchers not covered by VAT fiscal receipts, expenses not charged to their respective account and purchase orders not issued prior to purchases.

It also mentioned infringements of the multi-payments system in the departmental accounting system (DAS) that it said might have resulted in the evasion of tax and possibly VAT.

It has also expressed concern over payments effected upon invoices not specifically addressed to the respective ministry or department and double payments effected as a result of weak internal controls.

On the revenue side, the report said that the completeness of records could not be determined due to the lack of an audit trail.

The report also mentioned non-compliance with standing regulations, particularly inadequate record keeping of log books of general use vehicles.

The Auditor General's report also noted that notwithstanding the investment in new computerised systems, there were instances where such systems were underutilised. This led to a situation where revenue collection was not effective.

The report also revealed that revenue realised from airport taxes lacked an audit trail and that there were deficiencies in the control of government transport.

It also said there was lack of adherence to regulations governing travel advances and that large amounts of advances made through the Treasury Clearance Fund had remained outstanding for several years.

The report also pointed to weak internal controls across government departments resulting in a lack of safeguards of revenue and assets. It said the non-inclusion of all government assets and liabilities in the government financial report due to the government accounting system was still cash-based.