Overview
This is my fourth consecutive annual report being presented to the National Assembly since
my appointment in April 2017. My previous reports were presented two months or earlier
than the statutory ‘December’ deadline. While this report also falls within the said
timeframe, I believe that this report could have been issued mid-September, had it not been
due to numerous disruptions and delays caused to the audit cycle by COVID-19 pandemic,
particularly, in the second quarter of 2020. More efforts are continuing, however, to reduce
the time taken to produce annual reports even further and, hopefully, to present them at the
end of September each year. With this in mind, the twelve-month audit cycle has been
realigned to run from September to August.
The main objectives this report are to:
1. draw the attention of the National Assembly, Government and other decision makers
to matters arising from carrying out my oversight role as the Auditor General;
2. comment and provide information on various financial management and reporting,
governance and administrative issues;
3. highlight some matters of recurring nature and make some observations on the status
of action taken or planned on previous audit reports; and
4. maintain an official record in terms of reports of matters arising and audit findings
made in various MDAs for future reference.
The report presents the results of my audit of the Annual Financial Statements (AFS) of the
Government for 2019 and various other audits undertaken in ministries, departments,
officers and Agencies (MDAs) subject to my audit. These audits were completed during the
audit cycle from September 2010 to August 2020. The matters included in this report are
selective as they are the matters being brought to the attention of the National Assembly as
per my reporting requirements. I am pleased to note that many matters raised in audit
management letters issued to Accounting Officers throughout the audit cycle have been dealt
with satisfactorily. However, some still remain to be addressed.
This report also include the results of a special review conducted into the management of
debtors (revenue debts) in six (6) selected entities where significant amounts were
outstanding for collection over the years. In fact, at the end of 2018, revenue debts totaling
some SR679.4m was outstanding for collection across government, some of which may now
be rendered irrecoverable due to passage of time and lack of action taken. In my view, the
entities concerned should take immediate recovery action so as to collect as much debts as
possible and reduce the amounts in arrears.
It is to be noted that this report does not include the results of numerous other audits, such
as, performance audits carried out on my own initiative and the special audits carried out at
the request of FPAC during the same audit cycle. The results of these audits have been
included in separate reports which were submitted to the National Assembly and,
subsequently, to the Government through the Cabinet for information and remedial action.
The preparation of Annual Financial Statements (AFS) of Government comprising several
statements of accounts including the public debt statement is the responsibility of Ministry
of Finance. The audit of these statements is of paramount importance to the Nation. In this
respect, my role is to provide assurance to the National Assembly and other stakeholders
that these statements properly presents the budget allocations, expenditure, revenue and
other government’s financial activities and the financial position for the year to which they
relate.
The Ministry of Finance is stepping up its efforts to produce better quality AFS, however,
more needs to be done to ensure that the AFS are produced timely to enable auditing of the
same by the statutory deadline (30th June) and fully in accordance with the IPSAS framework
to receive a clean opinion.
On the side of statutory bodies (Agencies, Boards, Councils, Institutes, etc.), subject to my
audit, I note with satisfaction that a large number of entities with legal provisions to produce
annual financial statements are now up to date with their annual accounts. I urge others to
make more efforts to produce their annual accounts in a timely manner so that the auditing
of the same could be undertaken in a timely manner and further reduce the audit backlog.
Generally, the results of financial and compliance audits of Ministries, Departments,
Divisions, Offices and Agencies (statutory bodies) are more or less similar and recurring.
These are mainly the issues of non-compliance with prescribed financial rules, procedures
and instructions; (a) breach of the prescribed regulations in the procurement of goods and
services in public bodies; and (b) in some instances, the essential accounting records and
control documents were either not kept or not updated timely, particularly, in the areas of
revenue, stores, transport and fixed assets. This has impacted negatively on effective
management of day to day operations and maintenance of proper and timely accounting
records in many statutory bodies.
In this respect, at the time of writing, I note that Ministry of Finance has rolled out a new
Accounting Manual to be effective March 2020 and some training has been provided to user
groups in MDAs. The full implementation of the Manual is, however, delayed until January
2021 in view that system development is required for automation of some processes. At the same
time, some essential amendments to the Procurement Act have also been discussed so as to
provide a better framework for guiding public sector procurements. It is hoped that these
will provide a more standardized and practical approach to accounting function and
procurement of goods and services.
Finally, the readers are advised to refer to a complete set of the AFS of Government published
by the Ministry of Finance to gain a comprehensive understanding of the structure of budget
allocations, revenue collection, public debt and the results of government financial
operations and the financial position of Government at the end of 2019.