Transmittal Letter

Transmittal Letter December, 2015 Honorable Chernor Bah Deputy Speaker of Parliament Sierra Leone House of Parliament Tower Hill Freetown Dear Sir In accordance with Section 119(4) of the 1991 Constitution of Sierra Leone, I have the pleasure and honour to submit my report on the Accounts of Sierra Leone for the financial year ended 31st December, 2014. Yours faithfully Lara Taylor-Pearce (Mrs.) FCCA FCA (SL) AUDITOR GENERAL OF SIERRA LEONE i TABLE OF CONTENTS PAGE List of Acronyms ……………………………………………….. iii Foreword ……………………………………………………… iv Executive Summary ……………………………………………. v Introduction ……………………………………………………. xvi PART I Chapter 1 – Auditor General’s Opinion on the Public Account 1 Chapter II – A Review of the Sierra Leone Health Sector 39 Chapter III – A Review of Asset Management across the Government of Sierra Leone 58 Chapter IV – Follow up on Audit Recommendations 2010 – 2014 76 PART II Chapter V – Ministries, Departments and Agencies (MDAs) 86 Chapter VI – Public Enterprises, Commissions and Donor Funded Projects 251 Chapter VII – City, Municipalities and District Councils 344 APPENDICES …………………………………………………… 361 ii LIST OF ACRONYMS AIG - Assistant Inspector General ASSL - Audit Service Sierra Leone CDS - Chief of Defence Staff CMO - Chief Medical Officer CRF - Consolidated Revenue Fund DG - Director General DHMT - District Health Management Team DMO - District Medical Office(r) FO - Finance Officer HOC - Head of Chancery HRMO - Human Resources Management Office IT - Information Technology JLU - Joint Logistics Unit JMU - Joint Medical Unit MAFFS - Ministry of Agriculture Forestry and Food Security MD - Managing Director MDA - Ministries, Departments and Agencies MEST - Ministry Of Education, Science and Technology MMOs - Mines Monitoring Officers MoFED - Ministry of Finance and Economic Development MOU - Memorandum of Understanding MS - Medical Superintendent NPPA - National Public Procurement Authority NRA - National Revenue Authority PHU - Primary Health Unit PS - Permanent Secretary PTT - Performance Tracking Table SLRSA - Sierra Leone Road Safety Authority IFRS - International Financial Reporting Standards NASSIT - National Social Security and Insurance Trust COMAHS - College of Medicine and Allied Health Sciences PV - Payment Vouchers IPFMRP - Integrated Public Financial Management Reform Project EPA - Environmental Protection Agency SLMA - Sierra Leone Maritime Administration LPO - Local Purchase Orders NCB - National Competitive Bidding PO - Procurement Officer NCTVA - National Certificates for Technical and Vocational Awards DAO - District Agriculture Officer iii Foreword Welcome to my 2014 Annual Report. It has not been the best of years for our nation but as I write, with the end of 2015 in sight, we are at last at or near the end of the Ebola crisis and we can look forward to better days ahead. 2014 was a year of trauma, disease and profound economic setback for the nation. It did not leave ASSL untouched. We lost one senior staff member and almost all his immediate family to EVD. We also saw the passing of our Board Chairman. The above not notwithstanding, it was a year of accomplishments and for this I must commend and thank all staff for their great work and resilience under difficult circumstances. In terms of accomplishments, for example, our Annual Report for 2013 was presented within the legislative timeframe; we increased our audit coverage to 85% of the Government Budget; we were rated at A by DFID in its annual review; we undertook a much lauded real time audit and reported on the Management of the Ebola Funds; and much more besides. The Ebola funds audit, which served our people and the nation well, stands out because it was the first audit of its kind, recognised as such internationally and is a model for other Supreme Audit Institutions (SAIs) to emulate. It covered all funding from all sources except, regrettably, those donor funds channelled through United Nations agencies and other NGOs for the people of Sierra Leone, a matter which I raise again in my report. In my Annual Report I present the overall results of our work for 2014. In keeping with our statutory obligation we have conducted the financial audit of the Public Accounts, compliance audits in Ministries, Departments and Agencies as well as Public Enterprises and Commissions. In Chapter 2, A Review of Asset Management Across Government, we present the first Sierra Leonean comprehensive study of this area from an audit and control perspective. In Chapter 3, A Review of the Sierra Leone Health Sector, we present the initial results of what, in light of the collapse of healthcare systems during the recent crisis, may be a multi-year examination by my office of health institutions in this country. This year we continue our work initiated in 2013, in common with SAI best practice, on implementation of our recommendations. Chapter 4, Follow-up on Recommendations 2010-2014, deals exclusively with this matter and there are summary chapters on audits on devolved local councils. In short, I report on all our audit activities so as to provide a comprehensive picture of the work of my office. All our audits are conducted in compliance with professional auditing and ethical standards generally recognized around the world. I think of my report as having overarching themes. This year there is a particular focus on resource management whether in the form of fixed assets or critical stores such as medical drugs and pharmaceuticals. This is not to say that my often raised concern on the need to firmly address the most basic elements of internal control and cash management as well as the quality and accuracy of accounting, has been addressed to my satisfaction. It has not; and I will continue to comment until there is real and measurable progress. Finally, I want to welcome our new Board Chairman, a much respected senior member of the auditing profession in Sierra Leone and to express my deep and profound gratitude to all government officials for their cooperation and assistance under challenging circumstances. It is with considerable pride I present this report. I commend it to you. Lara Taylor-Pearce (Mrs.)FCCA FCA (SL) Auditor General of Sierra Leone iv Executive Summary About this Executive Summary This executive summary draws on the Main Points of each chapter in this annual report. Where necessary, further explanations are added so that overall the summary is a standalone chapter that … except for the matters in the accurately reflects the overall contents of Parts I and II. It is laid out Basis opinion paragraph… the in the same sequence as the chapters in the annual report. Readers Public Accounts do give a true seeking more detailed information need only go to the individual and fair view, of the financial chapters. position of the Government of Sierra Leone as at 31st December, 2014 … The Role of ASSL We are a leading agency promoting excellence and accountability in Sierra Leone and strive to be proactive in ensuring value for money for public funds. Acting in a professional, ethical and transparent manner we audit and report on the stewardship provided by the government over expenditure and all moneys received - whether from taxpayers, donors or others. Through independent professional standards-driven audits we establish to a level of audit assurance that public moneys are used by the government in the manner intended by Parliament. We assess how they are used in terms of economy, efficiency and effectiveness and the quality of reporting on these activities in terms of clarity, fairness, accuracy and transparency. We report to Parliament in the first instance but also to the citizenry of Sierra Leone and other stakeholders. The Public Accounts The audit examination of the Public Accounts is a risk-based audit. We select on a test basis samples of transactions from the Integrated Financial Management Information System (IFMIS) and examine the supporting documentation. We also verify the accuracy of the compilation process used to create the financial statements and review the system of internal control in place. These controls included, but not limited to, segregation of duties, authorization, and record keeping. We also examine financial disclosure matters. A significant outcome from my audit work for 2014 has been the issuance, yet again, of an “except for” qualified opinion on the Financial Statements of the Government of Sierra Leone, commonly referred to as the Public Accounts. The audit evidence I obtained was sufficient to support my professional judgement that the financial statements are a true and fair expression of the financial position and operations of the government with the exception of the effect of the issues mentioned in the Basis of the Opinion paragraph in my short- form audit report. As was the case in 2013, I have issued a modified opinion – an “except for” opinion - on the accounts. This signifies that the status quo, though improved, still needs work to be undertaken. The various issues giving rise to the qualified opinion relate to control over domestic revenue, non- inclusion of revenue arrears, application of the Cash Basis IPSAS accounting standard and external debt. A summary of these matters is set out below. v Domestic Revenue There were no regular reconciliations between the cash books maintained by finance officers of the NRA in respect of the various revenue departments and the transit banks, and between NRA and the Bank of Sierra Leone (BSL).There was no process by which the amount assessed by revenue collecting MDAs was compared to the revenue collected by NRA. We were unable to determine the actual amount that was meant to be paid as Foreign Travel Tax (FTT) to the NRA because complete airlines sales reports were not provided to us. Sales reports show the total sales made by the airlines from which 10% should be deducted for FTT. Total receipts of Le191.3 billion were recorded in the VIPS (a software system used to record GST liabilities for both Large and medium tax payers) but only Le152.5 billion of receipts was reported in the cash book.

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