''All that is necessary for the triumph of evil is that good men do nothing'' - Edmund Burke


S I E R R A  H E R A L D

Vol 9 No 2

The tendency sometimes to protect perpetrators for the sake of peace...doesn't help society. Impunity should not be allowed to stand. - Kofi Annan on Waki report

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Ernest Bai Koroma - the new face of terror in Sierra Leone. He still has to make public his declaration to the Anti Corruption Commission

Sierra Leone's Financial Secretary Edmond Koroma - propelled into this position after his financial flaws over the purchase of ferries. This should have sent a message to donors

Just two of the principal actors taking Sierra Leone to the cleaners - led by a smoke and mirrors President


Law and order and good government sit at the very core of a well-functioning State. Sound public financial management is a key component of good government. The whole works together to form an environment to attract direct investment, foreign and domestic, and permits the State, should it so wish, to raise long and short term funding from the international financial markets. It is also crucial to creating a context that facilitates the assessment and orderly collection of tax revenue and other levies from all sources; as well as shaping a civil society that recognizes and values the legal obligation and civic duty to pay to the State that which it is due.

Only a well-functioning Sierra Leone can deliver the essential support and services that the citizens elected our Parliament and government to provide. Audit Service Sierra Leone (ASSL), as the external auditor of the government, builds the confidence of all stakeholders in our State institutions. It supports our nation in its ongoing effort to achieve financial self-reliance. This is the journey we are embarked upon and the destination is one that a handful of developing countries in Africa have achieved. We strive to be counted in their number and ASSL has a part to play in getting there.



What we found

We found extensive internal control problems especially around revenue matters and the relationship between NRA (National Revenue Authority) and MOFED (Ministry of Finance and Economic Development) on responsibility for the CRF (Consolidated Revenue Fund - Government Central Financial Pool). This was at the root of our choosing to issue a qualified opinion on the Public Accounts and had the problems encountered been pervasive would have given rise to a disclaimer of opinion, i.e. the situation where we are unable to obtain sufficient appropriate audit evidence on which to base the opinion. There is a need to clarify the relationship between MOFED and NRA with regards responsibility for the CRF.

We found significant numbers of receipt books were not accounted for or available for examination. There were unidentified cash balances held in transit accounts and not transferred to the CRF at year end in a timely manner. We also noted a significant discrepancy between NRA reported revenue and that disclosed in the Public Accounts.

No breakdown on donor revenue was made available for audit and we encountered a lack of supporting documentation in a worrisome number of instances. Also, for 99% of bank balances we were unable to obtain direct confirmation of balances held in commercial banks.

The Internal Audit Department, a key component of the system of internal control, although improving we noted there was no internal audit manual, previously agreed audit work plans were not adhered to and we were not granted access to working paper files. Quite apart from being a breach of the access rights of the this office as a result we were unable to determine if we could rely in part on the work of Internal Audit for purposes of our audit examination.

Many of our recommendations from previous years have not been implemented and this continues to be of considerable concern.

(Italics ours for ease of understanding)



Government bank balances held at commercial banks not confirmed

Out of a total of Le127,985 Million presented as Cash and Bank Balance with Commercial Banks in the Public Accounts, only approximately Le93 Million (less than 0.1%) of this total was confirmed by the Commercial Banks concerned. Although providing such external confirmation is not within the direct control of Government, the unavailability of this audit evidence does constitute a significant limitation on the scope of my audit. Consequently, I am unable to ascertain whether the Cash and Bank Balance with Commercial Banks, disclosed in the Public Accounts, is free from material misstatement.

Revenue Arrears not disclosed in the Public Accounts Section 57 of the Government Budgeting and Accountability Act 2005 specifies what disclosures should be included in the annual statement of Public Accounts. Section 57(5)(g) states that the Public Accounts should include “a summary statement of revenue arrears to be collected by each budgetary agency”. The Public Accounts do not include such a disclosure.



The Audit Opinion is an expression of professional judgement and its wording– sometimes referred to as the short-form opinion – is dictated by international good practice. I may issue an unqualified, qualified, disclaimer or an adverse opinion. Without going into too much technical detail, an unqualified opinion arises where the financial statements provide a true and fair view of financial position and performance and a disclaimer arises where the auditor is unable to form an opinion one way or the other. An adverse opinion arises where issues in the financial statements are so pervasive as to not present a true and fair view. Either a disclaimer or an adverse opinion is a very serious matter.

This year I have expressed a qualified opinion on the Public Accounts. The issues raised in the opinion to support an audit qualification were:

 Material uncertainty over domestic revenue due to:
- significant receipt books not available/accounted for;
- unidentified cash balances held in transit accounts not transferred to the CRF at year end; and
- a significant discrepancy between NRA reported revenue and that disclosed in the Public Accounts.

 Material uncertainty over other charges expenditure due to lack of supporting documentation made available.

 Material uncertainty over cash balances held in commercial banks due to 99% of accounts not being confirmed by the commercial banks.

 Material error in non-disclosure of domestic revenue arrears as required by GBAA 2005.

Unfortunately qualified opinions on the Public Accounts have been the norm in Sierra Leone for a number of years now. This year, however, I gave very serious consideration to issuing a disclaimer and would have done so had the matters encountered and commented upon in this report been more pervasive. A disclaimer arises where the auditor is unable to obtain sufficient appropriate audit evidence on which to base an opinion, and the auditor concludes that the possible effects on the financial statements of undetected misstatements, if any, could be both material and pervasive but not to amount to meet the true and fair test overall.

The matters encountered were serious and related mostly, though not exclusively, to revenue accounts. The revenue issues are a matter of grave concern to me and the citizens of Sierra Leone and internal control issues throughout MDAs also need to be addressed. Unless improvements on many fronts become apparent then the question of disclaimer of opinion or worse will arise again in future years.



4.4. Cash and Bank Balances

Out of a total of Le 127,985 Million presented as Cash and Bank Balance with Commercial Banks in the 2010 Public Accounts, only approximately Le 93 Million (less than 0.1%) of this total was confirmed by the Commercial Banks concerned. Although providing such external confirmation is not within the direct control of Government, the unavailability of this audit evidence constituted a significant limitation on the scope of my audit of the Public Accounts. Consequently, I was unable to ascertain whether the Cash and Bank Balance with Commercial Banks, disclosed in the 2010 Public Accounts, was free from material misstatement.

The primary source of information for the Accountant General in identifying the value of these bank balances to be included in the Public Accounts is a schedule provided by the Bank of Sierra Leone. However, for the purposes of obtaining sufficient audit evidence further confirmation is required.

Prior to the audit of the 2011 Public Accounts the Accountant General should take the following action:

 Liaise with the Commercial Banks concern to sensitise them on the importance of providing such confirmation directly to ASSL; and

 Ensure that in advance of producing the Public Accounts, bank statements are reviewed by the Accountant General relating to the bank accounts included in this account heading.




4.5. Loans and Advances

In recent years, there has been an improvement in the way staff loans and advances have been recorded, managed and recovered by the Accountant General. However, some minor issues were identified during the audit of the 2010 Public Accounts. Of particular importance are controls around loans given to MPs. Although the amount of these loans and advances are not significant in relation to the Public Accounts, they are of particular public interest given the positions held by the recipient.

Audit findings in this area were:

 An examination of Advances Register revealed that two application summaries for the month of October 2010 (totalling Le 103,000,000) for MPs were not signed by the persons who prepared, authorized and approved them. As such, there is no evidence that the loans were properly reviewed and authorised by the appropriate officers.

 There was no evidence of approval for salary advances to twenty-five (25) MPs for the month of July 2010, amounting to Le100,000,000 Salary advances should not have been paid without proper approval and appropriate evidence retained.

 The Accountant General should take steps to ensure that proper control over staff loans and advances. Particular care should be taken in relation to Loans and Advances to MPs.




4.10.4. Customs and Excise

One hundred and three (103) Receipt Books in use by the Customs and Excise could not be traced to the securitised documents from NRA head office and were unavailable for our inspection.

Receipt Books valued at Le233.8Millon could not be traced to the securitised documents received from head office. Receipts and corresponding paying slips, totalling Le37.3Million could not be traced to the Bank Statements and revenue collection of Le30.9 billion were not banked on the next working day in the Customs and Excise sub division.

On review of the ASYCUDA System, it was observed that a breakdown of the daily collections could not be made available, the revenue account over the period exceeded the Revenue update by Le9.5Billion and there were differences between the total receipt entered in the ASYCUDA system and that in the Revenue Cash Book.




6.5.6. Donor Funded Projects

In reviewing the projects report of the various donor projects the following lapses were observed:

Songo-Moyamba- Moyamba Junction Road Rehabilitation

There was a delay in completing the project which commenced on 1st February, 2007 and has have taken 2 years. The pace of work was very slow due to administrative and financial problems within the contracting firm.

100% of the original contract time had passed with 32% of the work completed. An extension of time of 4.25 months to the 5th June 2009 was granted to the contractor in December 2009.

The GOSL of Sierra Leone counterpart funding which was required for the payment of compensation to property owners along the right-of –way and owners of farm lands with economic trees had not been spent to date.


Construction of the Hillside Bye Pass Road

37 property owners paid but not affected and Le 899,500,000 was yet to be refunded by the property owners.

There was insufficient funding to complete the project. The project had an estimated budget shortfall of $26,000,000(twenty-six million US dollars).


6.7.7. Control over the use of Computers

The computers of the Unit were infested with virus. Furthermore, some computers containing financial information were not protected by the use of passwords in the absence of a backup system.

Ministry of Defence

5.2.1. Imprest Account Administration

Special Imprest Accounts totalling Le 245,042,250 were without retirement details such as receipts, letters of requests and signatures of beneficiaries. It was recommended that the Director General should ensure that retirement details must be maintained for Imprest disbursements and that with immediate effect, the Chief of Defence Staff should produce retirement details for the disbursement of Le 245,042,250 or recover the full amount and have it paid back to the account.

Official’s Response

The Director General stated in his response that the retirement details in respect of Le245,042,250had been located and was ready for audit inspection.

The Ministry is yet to address these recommendations.

5.2.2. Control in the distribution of fuel

There was inadequate control over the distribution of fuel in the Ministry. Fuel, costing Le98,354,100 was supplied in excess to officers of the Ministry. In addition, a Vehicle Log Book was not in use. It was therefore recommended that, with immediate effect, the officer in charge of fuel supplying to officers in the Ministry must cut down the excess supply of fuel and introduce the use of a vehicle log book. In addition, the VC should cause the excess supply of fuel to be recovered from the officers in the Ministry.

Official’s Response

The Director General responded by stating that Vehicle Log Books had been procured and fuel disbursement and consumption regularized.

The Ministry is yet to address these recommendations.

5.2.3. Unpresented Documents

In spite of several requests, procurement documents in respect of contracts for a Housing Project and the supply of rice, totalling Le 500,000,000 and Le 5,433,280,000 respectively, were not submitted for inspection.

Also, the under mentioned documents from the 34th Military Hospital, were not made available for our inspection:

Bank Reconciliation Statements;

Authority from the Accountant General relating to the opening of an account during the third and fourth quarters in the fiscal year, 2009;

Admission Registers for the female surgical, medical and paediatric wards for 2008;

Cash Book, receipts and other documents relating to revenue collection in the Hospital; and

Delivery notes, receipt vouchers, certificates and issue records for Re-agent items.

Official’s response

The Director General stated, in his reply, that the Procurement Officer had provided the necessary procurement documents in respect of the housing project at 5 Brigade and the supply of rice in 2008 and that all the above mentioned documents were now available for audit inspection.

The Ministry is yet to address these recommendations.

5.2.6. Short supply of rice

A company was contracted to supply Le 1,638,000,000 worth of rice to the Ministry. It was however noted that only Le1,040,000,000.00 worth of rice was supplied, leaving a balance of Le 598,000,000.

Official’s Response

The Director General stated in his reply that the Contractor, Harmony Trading Company, had paid directly to Ministry of Defence, the sum of Le247,865,000 and the balance Le350,135,000 worth of rice was supplied. The documents were available for audit inspection, he mentioned.

The Ministry is yet to address these recommendations.



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