SIERRA LEONE EMBASSY, GERMANY FOR THE PERIOD 1ST JANUARY, 2004 - 31ST DECEMBER, 2010
1. Consular fees and other revenue collected not banked intact
A review of Consular and Other Revenue documents disclosed that, for the period 2004-2008, fees were not banked intact.
It was recommended that the holding of cash be discouraged as all monies collected were to be banked promptly. The policy of payment direct to bank, considered as good practice, should be continued in order to minimise cash handling at the Chancery. Only paying-in – slips should be received as evidence of payment.
The HOC stated that the Embassy accepted the finding on the handling of visa fees and the inherent risks contained therein, asserting that steps had been taken to correct this flaw by ensuring that all Consular fees were paid into an account established for that matter.
Cash expended from Visa and other fees
It was noted from the analysis of documents presented, that monies received for Visa Fees and Other Revenues were expended for administrative purposes but no proper analysis was done for the expenditure in a Cash Analysis Book. There were only receipts for such expenditure from a sample obtained.
We requested an explanation why cash from revenue was used for administrative purposes without due approval from the relevant authorities. Also, in the event that cash was used, an analysis of the expenditure should have been given in a register noting such expenditure under various captions.
The HOC noted that the Embassy regretted the finding on the expenditure of revenue collected on visa fees on administrative purposes without due approval from the appropriate authority. However he said, he informed me that due to exigencies, it was thought expedient to expend such monies for and on behalf of the Government of Sierra Leone to save it from embarrassment at post. Meanwhile, the Embassy wanted to assure me that measures had been put in place to guarantee the proper keeping of records of all such expenditures.
2. Cash Analysis Register not maintained
It was observed that a Cash Analysis Register was maintained for the period of the audit up to September, 2004, after which it was stopped and only the analysis of Consular Fees was done for the Ministry of Foreign Affairs and International Cooperation’s reporting purposes.
We therefore advised that an Analysis Register should be maintained where all streams of revenues would be reflected and reports can be easily obtained to facilitate the audit process.
The HOC stated that the recommendation on maintaining a Cash Analysis Register (CAR) had been established for all its revenue and expenditure activities.
3. Renunciation document not pre-numbered
Renunciation Certificates issued to Sierra Leoneans relinquishing their citizenship were not pre-numbered.
It was therefore recommended that Certificates be treated as accountable documents and be printed with serial numbers to ensure that the issue and revenue collected can be monitored.
In his reply, the HOC agreed with the accepted recommendation on treating Renunciation Certificates as accountable documents and had therefore ensured that all monies paid in respect of same were remitted to the bank account established for consular activities. However, he said, the Embassy wished to state that it cannot print pre numbered RCs (which is under the purview of the Government Printer) but would be appreciated if modalities could be put in place by the Ministry of Finance to correct this anomaly which was not unique to that Mission.
4. Cash drawn not properly analysed
It was observed that cash was drawn called Petty Cash for office expenditure; and even though receipts were obtained for expenses, the details of expenditure were not analysed.
The Embassy should introduce a Petty Cash Float system as recommended, whereby a Petty Cash Analysis Book can be maintained, with various expense captions, and reimbursed as and when necessary.
The HOC informed the ASSL that immediately after the Auditor’s ‘Exit Conference’, a Petty Cash Analyses book was established and maintained to date.
5 Stock Register not maintained
It was observed, upon receipt of the accountable documents by the Embassy, including Visa Stickers, Emergency Certificates and Receipt Books from the NRA, that these documents were not recorded in a register from where they should be issued and signed for by recipients.
We strongly recommend that with immediate effect, an Accountable Documents Register should be maintained for all categories of documents and the serial numbers of the documents recorded. It should be ensured that recipients sign documents issued to them; this should also apply to Consular Officers.
The HOC in his reply noted the Recommendation and informed the ASSL that accountable registers for all categories of documents had been established to ensure accountability and guarantee easy tracking of day-to-day transactions
6. Cash Book not maintained
It was observed that remittances expended were recorded and analysed in the Vote Service Ledger, but for various administrative expenditure from banked revenue stream, even though receipts and invoices were kept for referencing, no analysis was done for such expenses under their respective expenditure captions. Details are given below:
It was highly recommended that a main Cash Book should be maintained to capture and analyse all expenditures under various captions to easily facilitate the preparation of a bank reconciliation.
In his reply the HOC stated that the Embassy had complied with our recommendations and was effectively using the Vote Service Ledger to capture and analyse all expenditures undertaken for and on be-half of the Government of Sierra Leone.
7. Non preparation of Bank Reconciliation Statement
It was observed that for the period under review, no reconciliation statement was prepared for bank accounts maintained. Details of the accounts maintained by the embassy are given below:
Consular - Commerzbank - Account Number – 3171717,
Salaries and Wages Account - Deutsche Bank - Account Number -0595116 00
Other Charges Account at the Deutsche Bank - Account Number - 059511601.
A review of some correspondence indicated that a format for the preparation of returns was forwarded to the Embassy. Included in this was a format for the preparation of bank reconciliations which should have been used for the reconciliation of the undermentioned balances:
We recommended that, with immediate effect, the process of bank reconciliation should be effected for these bank accounts; and steps be taken by the Ministry of Foreign Affairs to guide staff of the embassy through the process.
In his reply the HOC stated that the Embassy noted with great concern the above recommendation and wished to state that, it was still grappling with the difficulty of professionally managing its finances in the absence of a professional accountant (request for this had been submitted to the accountant general through headquarters). However, he wished to assure me that reconciliations would be presented in a non professional manner that would adequately present a true picture of what obtained there.
8. Non-existence of Fixed Asset’s Register
It was observed that the Embassy did not maintain a comprehensive list for Fixed Assets in the form of a register. We had to rely on transactions in the VSL and individual inventory lists in various offices and the residence of the Ambassador and Head of Chancery. Also no asset marking existed on the items to clearly identify them as the Embassy’s property.
It was highly recommended that a comprehensive list of Fixed Assets should be obtained and a Fixed Assets Register developed; electronic or manual, to include marks to identify all assets of the Embassy.
The HOC stated that the Embassy was in the process of codifying its current assets inventory lists to a single Fixed Asset Register so as to keep and identify all bonafide assets of the Government of Sierra Leone.
9. Inadequate cross referencing of revenue receipts
It was observed that documents were not adequately crossed referenced, making it extremely difficult and time consuming to relate visa stickers to receipts issued.
We recommended that a system be put in place for proper cross referencing of various documents, receipts to visa stickers and vice versa.
The HOC noted the ASSL’s recommendation and promised to take necessary action.
10. Payment Vouchers not pre-numbered
It was observed that Payment Vouchers raised for expenditure were not pre- numbered.
It was therefore recommended that some form of numbering be introduced for the vouchers to facilitate the referencing of documents.
The HOC told the ASSL that as soon as a professional accountant was posted to the mission, necessary action would be taken.
11. Segregation of duties
It was observed that there was the lack of segregation of duties in the payment cycle, as some Payment Vouchers were either signed by the same person or, in some instances, columns provided for signatures were not completed.
It was strongly recommended that segregation of duties must strictly be adhered to and that, in future, Payment Vouchers must be completed before effecting payments.
The HOC maintained that the Embassy noted the recommendation of the ASSL and promised to adhere to it.
12. Determination of fees
From interviews, it was revealed that Visa and Emergency Certificate Fees were set by the Immigration Department, and in the case of other revenue streams like Endorsements and Renunciation, fees were set by the Embassy. However, no document was seen regarding the approval for these fees levied.
Also, it was noted that the Tariffs for these services performed were not displayed in a conspicuous location in the Embassy.
It was recommended that the Head of Chancery should take steps to get approval from the relevant authority for the fees, so that they would be consistently applied across other embassies, as may be applicable. Tariffs should also be displayed for the public to be aware of the existing rates.
The HOC stated that as the situation was not unique to the Embassy, he awaited directives from the Ministry of Finance on fees to be levied for other Consular services. Meanwhile, the cost of all such fees has been posted on the Embassy’s website (www.slembassy-germany.org) to ensure transparency, he concluded.
13. International Calls
From a review of correspondence, it was observed that a particular reporting format should be used for telephone calls. We however noted that the telephone calls appeared to be on the high side. Since the caption in the Analysis provided only noted bills settled, it was difficult to clearly determine the calls that were international or not. Details are as follows:
It was recommended that an explanation should be given for not following these instructions to avoid abuse in the use of the facilities.
The HOC replied that the Embassy noted the recommendations the ASSL but would also appreciate a review of instructions referred to in the Audit Report as, because of the Mission’s multiple accreditation, it was very difficult to comply with those instructions particularly when the Head of Mission was constrained to be representing Sierra Leone at all meetings and conferences in countries of his accreditation.
14. No Accounting Software Package
There was no computer accounting package in the Embassy for the production of financial and other reports.
We advised that since the transactions were numerous in the Embassy, consideration should be given for a small user friendly multilingual accounting package for use in the Embassy to facilitate production of reports. It must be multilingual as reports should be produced in English.
In his reply the HOC stated that the recommendation was noted and its implementation was dependent on the appointment/posting of a professional accountant to the mission.
15. Financial Management Capacity Building
It was observed that the staff, especially those responsible for financial management issues, were not aufait with such regulations, including knowledge of the Government Budgeting and Accountability ACT (GBAA2005), Financial Management Regulations (FMR2007) and the Public Procurement ACT. (PPA2004).
It was recommended that arrangements should be made for an Executive Financial Management training for senior staff assigned to Embassies and High Commissions and that they should be given a good grounding in the existing Sierra Leone Financial Legislations as part of their orientation.
The HOC noted that the Embassy was pleased with the recommendation and looked forward to the opportunity for such training from the Ministry of Finance.
16. Creation of position of Financial Assistant
In my last Audit Report, it was recommended that the above position be created to ease the burden on other non accounting officers. A letter dated 12th march, 2004 was sent by the then Head of Chancery to the Director General, Ministry of Foreign Affairs and Internal Communication. However, up to date it appears that no action has been taken in this regard.
It is again recommended that consideration be given to this matter as the absence of this officer is reflected in this report.
The HOC noted, in his reply, that the issue had been raised with headquarters and also with the Auditor General resulting in the promise to take immediate action to post an officer as soon as one was identified.
17. Internal Audit Function
Because of financial constraints, Audit Service Sierra Leone cannot audit all Embassies and High Commissions on an annual basis; therefore as evident in this case, the last audit done was in 2003; this is not good for accountability because of the time lapse.
It was highly recommended that consideration should be given to the engagement of Internal Auditors to be determined by the Ministry of Foreign Affairs and International Cooperation in collaboration with the Ministry of Finance and Economic Development based on the geographical locations of the Missions, to help on internal control adherence over the period before a statutory audit. This proposal can be worked on to see how it can help to reduce wastage over a period, blamed on ignorance of financial management.
In his reply the HOC stated that the recommendation was noted.
18. Conditions of Service for local staff
During the course of our Audit, we requested that the conditions of service for Local Staff of the Embassy be made available for review. The document was not provided for inspection.
It was recommended that the Embassy should secure a copy of this document and ensure that current conditions were in line with it.
The HOC stated that the Embassy regretted to say that it was unable to lay hands on any written Conditions of Service prepared for local staff, but had however initiated the codification of one which would be forwarded to headquarters for endorsement.