Summary report of the Auditor-General on the accounts of the Government of Namibia for the financial year ended 31 March 2011 (continued)
In the previous two editions we mentioned that the Auditor-General annually compiles a summary report on the accounts of all ministries/offices/departments of the Government and commented on some of the issues as mentioned below. His latest summary report, which has been tabled in the National Assembly, has been concluded during July 2012.
Except for the expenditure and qualified opinions, budget controls, exemptions from normal Tender Board procedures, subsistence advances and reconciliations of suspense accounts, the following additional issues have been raised in the report:
On 17 of the 31 appropriation accounts (March 2010: 20), it was found that virements as approved by Treasury differ from those reflected under the main divisions in the appropriation account.
For those who are not familiar with the word “appropriation account”: This is the account kept by every office/ministry/department (o/m/d) which reflects the approved budgeted amounts compared with the real expenses incurred during the financial year. Deviations should not exceed 2%.
Virements approved by Treasury allow o/m/d’s to shift money from appropriated (budgeted) amounts approved by Parliament from main or subdivisions where savings are expected to main or subdivisions where excess expenditure is expected. This allows for some flexibility in the budget. It is easy to control that the approved virements amounts agree with the amounts which appear in the main ledger as every accounting officer receives an extract of the general ledger each month for reconciliation purposes. If 14 o/m/d’s can do it, why can’t everyone else do it? It is a problem which appeared in every audit report over the past few years. If nobody is interested to rectify the problem, why bother? I sincerely hope we are not moving into the “why bother” attitude and that our well-functioning Standing Committee on Public Accounts will address this issue with the seriousness it deserves.
Annual report information
Information is requested on an annual basis from all m/o/d for publishing purposes in the annual report of the Auditor-General. The correctness and completeness of such information is of vital importance to ensure credibility thereof. Incorrect, incomplete or no information was received on some of the requested information from 4 (previous year – 9) m/o/ds.
At least some improvement is noticed. The recommendations made by the A-G in his report to m/o/d’s to keep proper records to enable them to submit complete and correct information, can only be supported. This is also an issue which is reported every year which can so easily be resolved.
The Treasury considers requests from m/o/d’s to open bank accounts to operate certain fund accounts. No such account may be opened without the approval of Treasury and Treasury requires proper bank reconciliations and financial statements. At 8 (previous year – 9) m/o/d’s no bank reconciliations were carried out and/or no income and expenditure statements were available for audit purposes.
The A-G expressed serious concern in many previous reports on the non-compliance with Treasury instructions and the lack of proper record keeping of such accounts. Action should be taken with immediate effect to regularize these accounts and carry out reconciliations between the cash-book balances and the bank balance. Income and expenditure statements should also be prepared at least annually for audit and control purposes.
In my opinion it is about high time that Treasury executes its powers and duties more effectively and efficiently. Why does the Auditor-General have to repeat the same issues every year? If proper control and instructions are not followed, close the account and hold the Accounting Officer responsible for this.
Funds in the bank account are tax payer’s money and should be handled with care. Should such an account run into an overdraft, who is going to pay the interest and banking fees? It will also mean that the amount entrusted to the accounting officers is overspent.
Office of the Auditor-General
The Office is since its inception still audited by its own staff. It has been noted with appreciation that this aspect has been addressed in the proposed Audit Bill.
Endeavors to create an own audit act are coming a long way. It started even before independence. A draft bill has however been finalized quite a while ago and still needs to go through the processes. It used to form part of the State Finance Act but has now been separated. Let’s hold our thumbs that it will be passed in the next year.
Even though the Office is audited by its own staff, I can assure you that the auditors are extremely intensive in their audits as if they want to catch the Accounting Officer (Deputy Auditor-General) out on an issue or two.
There are a few more concerns left which will be addressed in the next edition.