CONTENTS BACKGROUND ............................................................................................................................................ 2 Introduction ................................................................................................................................................... 3 Audit objectives ............................................................................................................................................. 3 Methodology ................................................................................................................................................. 3 Scope ............................................................................................................................................................. 4 Conclusion ..................................................................................................................................................... 4 EXECUTIVE SUMMARY .............................................................................................................................. 6 DETAILED FINDINGS ................................................................................................................................ 10 NON COMPLIANCE WITH LAWS AND REGULATIONS .......................................................................................... 11 Misuse of contingency fund ........................................................................................................................ 11 Un-presented payment vouchers ................................................................................................................ 12 Breach of GPPA regulations/ payment vouchers with single quotations- ................................................... 15 Payment vouchers lacking adequate supporting documents...................................................................... 16 Payment vouchers with no supporting documentation .............................................................................. 19 Summary statement of stores and other assets .......................................................................................... 20 Signature list not signed .............................................................................................................................. 22 Unauthorised payment vouchers ................................................................................................................ 23 Non consolidation of self accounting projects ............................................................................................ 24 BUDGET ........................................................................................................................................................... 25 Virement limits exceeded ............................................................................................................................ 25 NON COMPLIANCE WITH CASH BASIS IPSAS .................................................................................................. 27 Government business enterprises not consolidated .................................................................................... 27 Non disclosure of grants received ............................................................................................................... 29 Missing notes in the consolidated cash receipts and payments.................................................................. 30 Exclusion of government funds at commercial banks in financial statements............................................ 31 Non disclosure of undrawn external assistance .......................................................................................... 32 Non disclosure of rescheduled or cancelled external debts ......................................................................... 34 CASH AND BANK ............................................................................................................................................... 35 Bank reconciliations .................................................................................................................................... 35 Lodgements not traced to the bank statement ........................................................................................... 44 London bank account (National Westminster) ........................................................................................... 46 Imprest ........................................................................................................................................................ 49 Material overdue loan not recovered .......................................................................................................... 51 Non disclosure of contingent liability .......................................................................................................... 52 Suspected fraud not reported ..................................................................................................................... 53 Wrong account coding between TB and GRA schedule............................................................................... 54 No tax arrears register ................................................................................................................................ 58 OTHER MATTERS ............................................................................................................................................. 59 Comparison of the GFS codes, the chart of accounts and the financial statements ................................... 59 Misclassification of arrears on government shares in BSIC Group .............................................................. 62 Omission of BADEA Loan 287 ...................................................................................................................... 63 Government vehicle loan scheme-AU Vehicles ........................................................................................... 64 PRIOR YEAR MATTERS ........................................................................................................................... 66 LIMITATION ON SCOPE ..................................................................................................................................... 67 Access to information denied ...................................................................................................................... 67 CHART OF ACCOUNTS ...................................................................................................................................... 69 Good financial reporting undermined ......................................................................................................... 69 Exclusion of government funds at commercial banks in financial statements............................................ 72 APPENDICES .............................................................................................................................................. 74 Management Letter of the Government of The Gambia for the years ended 31 December 2009 and 2010 1 Background Management Letter of the Government of The Gambia for the years ended 31 December 2009 and 2010 2 Introduction 1.01 In pursuance of Section 160(1) (c), of the Constitution of the Republic of The Gambia, an audit of the financial statements of the Government of The Gambia for the financial years ended 31 December 2009 and 2010 was conducted. Audit objectives 1.02 The overall objectives of this audit are to: gain assurance that the financial statements fairly present the state of affairs of the Government of The Gambia, in accordance with the Budget Management and Accountability Act and Financial Instructions, for the years ended 31 December 2009 and 2010; determine whether, in all material respects, the expenditure and income have been applied for the purposes intended by the National Assembly; and whether the financial transactions conform to the authorities which govern them. Methodology 1.03 We conducted the audit in accordance with the International Standards of Supreme Audit Institutions (ISSAIs) issued by the International Organisation of Supreme Audit Institutions (INTOSAI). An audit includes examination, on a test basis, of evidence relevant to the amounts, disclosures and regularity of financial transactions included in the financial statements. 1.04 It also includes an assessment of the significant estimates and judgments made in the preparation of the financial statements and of whether the accounting policies are appropriate to the circumstances, consistently applied and adequately disclosed. 1.05 We planned and performed the audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement, whether caused by error or by fraud or other irregularity and whether, in all material respects, the expenditure and income have been applied for the purposes intended by the National Assembly. 1.06 As part of this audit we held discussions with MoFEA, the Director of Treasury and his staff, IFMIS Consultants and had contact with the Central Bank of The Gambia and commercial banks and officials of The Gambia Revenue Authority. Management Letter of the Government of The Gambia for the years ended 31 December 2009 and 2010 3 Scope