Overview

This is my fifth 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 in 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
and first quarter of 2021 and its hand over effects on the operations of various entities subject to my
audit coupled with frequent quarantining of staff in almost all governmental entities. 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 2020 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 2020 to August 2021. 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 on the expenditure incurred by the
health authorities in relation to the implementation of various measures to combat, control and
mitigate the impact of the spread of Covid-19 pandemic declared in Seychelles in line with the world
wide health advisories. In fact, Covid-19 has been dominating the lives of all communities in
Seychelles as well as in other countries in varying degrees from time to time during 2020 and so far
in 2021.

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
during the same audit cycle. The results of these audits have been included in separate reports which
were submitted to the requesting authority. In this connection, I recall that I submitted two special
reports on the financial irregularities at Agency for Social Protection and also, I certified a number
of project financial statements assisted through foreign funding at the request of Ministry of Finance.
The preparation of Annual Financial Statements (AFS) of Government under the IPSAS accounting
framework comprising several statements of accounts is the responsibility of Ministry of Finance.
The audit of these statements is of paramount importance to the Seychellois citizens. 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.

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 is yet to roll out the new
Accounting Manual, which was supposed to have been done effective 2021 but delayed due to some
technical issues. I would like to urge the Ministry to see an early implementation of the same considering
the fact that it is one of the essential tools required by the MDAs to better management their financial
operations in an orderly manner. At the same time, it is hoped that the required amendments to the
procurement Act would also be made within a reasonable timeframe. These two documents are
expected to provide a more standardized, modern and practical approach to accounting function and
procurement of goods and services across the government.

Finally, I would like to advise the readers 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 2020.

Gamini Herath
Auditor General