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Sierra Leone News: Local Councils breached financial management regulations

As required by Section 73(1) of the Financial Management Regulations (FMR), 2007, disbursements of all public monies, should be supported by an appropriate payment voucher, and other relevant documents. Based on samples of expenditure presented in the Financial Statements by the councils as tested, supporting documents for payments made by councils totaling Le817million were not presented for audit inspection during 2017 by team from the Audit Service Sierra Leone (ASSL). The Auditor General noted that these documents were not made available, and that there is a risk that these payments were for goods or services that were not actually delivered. In addition, it was impossible to conclude whether these payments had followed the proper procedures as laid down in law. Other payments totaling Le591.8million was undertaken for which some supporting documents were submitted. However, the nature of these supporting documents was insufficient to fully substantiate the payment concerned. Sections 40 (1) of the FMR, 2007 states that, “The vote controller is personally responsible for ensuring that adequate safeguards exist and are applied for the assessment, collection of and accounting for such revenues and other public monies relating to their departments or offices”. As a result, the Audit Team observed that the requirement of sections 40 (1) of the FMR 2007 was not met by the Kambia and Portloko District Councils during 2017, as revenue totaling Le13.4million and Le3.7million respectively were not banked. In the Tonkolili District Council, mining companies operating within the district were required to pay surface rent to the District Council. During the course of the audit, it was noted that several mining companies did not pay, with the exception of two companies (SD Steel and Miro Forestry Limited). There was no evidence of such payments in 2017 for the remaining 19 companies. “There is a risk that huge sums of money may have been lost due to non-payments of surface rent to the Council” the Auditor General said. A review of the Bo City Council Waste Management Department policies and procedures manual revealed that the department was entitled to receive 15% of the total property taxes and 5% of the total market dues collected. However there was no evidence to confirm that a total amount of Le90,427,441.70 in respect of the 15% and 5% council contribution was received by the department. The Auditors said that there is a risk that project implementation will be delayed and project targets may not have been achieved within the set timeframe. The Chief Administrator was asked to ensure that council fulfill its commitment to the project and provide the funding. The Team also noted with concern that the Koinadugu District Council did not have adequate control over the revenue collectors as there were no service level agreements between the Council and the timber revenue collectors. In this regard, the revenue collectors had the liberty of retaining monies collected over a long period of time before remitting same to the Council. Due to the lack of adequate controls over own-source revenues, the Council may not be able to collect sufficient funds to support its development projects. The Freetown City Council has freehold properties within its municipality that are leased and rented to individuals and institutions. During the period under review, the council generated Le1,060,845,950, accounting for five percent of total revenue, but rental and lease agreements were not submitted for audit inspection. Tonkolili District Council outsourced some of its income generating services such as the mini stadium, lorry park, market dues collection and business licenses to various unions and partners. The audit team was however not provided with service level agreements to confirm the amounts to be paid to the Council and when it was due. Moreover, evidence of payments from these outsourced partners was neither provided, nor was the outstanding amounts recognised in the council’s 2017 financial statements.

By Zainab Iyamide Joaque

Thursday February 07 2019.

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