The auditor general’s report for 2010-2011 raised a red flag when it was tabled in the Senate a few days. The Auditor General, Dorothy Bradley’s conclusion was that she could not provide an opinion due to the lack of information. We have looked through a copy of the audit and will be reporting on some of the most glaring issues that show a clear breakdown in government financial procedures. Bradley makes numerous observations; she notes that the government endured significant losses due to disregard for regulations, procedures and accountability. In fact she signaled inadequate record management, lack of pertinent information for computerized accounts, un-reconciled bank accounts, contracts were drawn after completion of jobs, deficient management and unsatisfactory accounting of government assets, and extremely poor control on the use of government vehicles. For the fiscal period 2010/2011, the report scrutinized over eight hundred and ninety million dollars of funds approved by the Government of Belize for expenditures, and an estimated revenue receipts of eight hundred and forty million dollars. Tonight, we look at payments for government’s legal work to two choice law firms. Government paid out in one year alone to the two firms, one million, five hundred and ninety two thousand, eight hundred and ninety three dollars and eighty nine cents as approved by the Ministry of Finance. The Auditor General Report shows that for Barrow & Company, a total of five hundred and sixty-three thousand, three hundred and eighty-eight dollars and eighty nine cents were paid for work done in relation to Sanitation Enterprises Limited.
While for Lois Young Barrow & Co, a total of one million and twenty nine thousand, five hundred and five dollars were paid in relation to Belize Food and Transport Ltd. The figures show that for Barrow and Company four payments were made. On January twenty-eighth, a payment of two hundred thousand dollars was made. The other payments on February first, March first and March sixteenth were for one hundred and twenty-one thousand, one hundred and twenty-nine dollars each; all relating to a Sanitation Enterprises. Meanwhile, for Lois Young Barrow & Company, on April fourth, a payment was made in relation to Belize Food and Transport Limited for half a million dollars while on November fourth another payment was made for five hundred twenty-nine thousand, five hundred and five dollars. It adds up to a cool one point five million dollars paid to the two law firms of choice. In Thursday’s newscast we will look at suspected cases of fraud within the government ministries.
GOB accounts full of irregularities – Auditor General reports
The United Democratic Party administration of Prime Minister Dean Barrow may have been elected to office on a promise of accountability and transparency, but the Auditor General’s recently released report indicates their management of public finances has been anything but accountable.
Auditor General Dorothy Bradley has scrutinized Government spending of more than $890 million and revenue receipts of $840 million for the financial year 2010/2011, which ended on March 31, 2011.
Her report cites a litany of audit issues: revenue arrears not submitted as required, inadequate records management, pertinent information missing from computerized accounts, unreconciled bank accounts, unreconciled line accounts, contracts drawn up after the job was completed, deficient inventory management of assets, unsatisfactory accounting for government stores, and poor control over the use of government vehicles.
She found that the Accountant General’s office has too much of a workload and too many responsibilities to provide the strict , continuous and effective monitoring as required by the government’s financial controls.
Bradley recommends that financial controls be removed from the Accountant General’s Office and that a separate Comptroller of Finance Unit be created within the Ministry of Finance, charged with responsibility to continuously monitor and implement controls within the various ministries and departments, working in line with an internal audit unit.
One major problem exposed by the latest audit is that accounting officers at the government departments and ministries have not been submitting statements showing the amount of money owed to the Government, which is referred to as “returns of arrears of revenue,” as they are required to provide to the Accountant General and the Auditor General every six months, in June and December, as required by Financial Order No.89.
The ministries and departments have not taken Order No.89 seriously, as the Auditor General’s office has had difficulty in obtaining accounting records from the various ministries and departments for advance payments to officers for purchase of products, fuel records, and source documents related to electronic payments.
The Auditor General also found they were handicapped in conducting effective audits because the computerized information systems implemented by ministries and departments lack all the necessary audit trails and internal controls which affect the accountability process.
This happened because the Treasury Department and nearly all the departments that collect revenue have implemented their computerized systems without consulting the Auditor General’s office during the planning stages; as they should have done in order to comply with Financial order No.658.
The audit also found that some government ministry and department bank accounts had not been reconciled as required by Financial Order No.304.
Public officers authorized to keep a bank account should compare the entries in the bank statement with those in the cashbook at the end of each month.
The Auditor General also found that many accounting officers at numerous departments and ministries had not forwarded a detailed statement of receipts and payments to these accounts, to the Accountant General as they were required to do as soon as possible after year’s end as they were required to by financial Order No.536. That statement should have showed balance reconciled between the individual accounts and the general register in the Treasury books, also including an analysis of the balance in the control account.
The Auditor found that many projects were undertaken without adequate planning and proper authorization; because the contracts were drawn after the jobs were completed, which is completely contrary to the Finance and Audit Acts and Contractor General.
Several ministries and departments had contracted out jobs for services and projects before drafting the contract.
Government assets such as computers, photocopying machines, furniture and other equipment on which GOB had spent millions of dollars were not properly accounted for and safeguarded for lack of proper inventory management.
The audits also showed that accounting for stores is most unsatisfactory even though millions of dollars were involved.
Hospitals stock pharmaceuticals and medical supplies in stores, and the Ministry of Works keeps an inventory of vehicle spare parts and asphalt for road construction of roads, but many departments did not maintain proper stores ledgers. Others did not record items received and/or issued; others did not have proper security measures in place.
The auditor’s report revealed that control over the use of government vehicles is extremely poor. Logbooks were not properly maintained, odometers were not working and/or odometer readings had not been recorded, nor were the purpose of journeys, many of which were not authorized.
Private runs and misuse of vehicles went undetected because the Accounting Officers had not regularly calculated the average miles per gallon run for each month, nor had they verified that vehicles were running economically.
In some cases, drivers were using government vehicles as if they were in their private vehicles.
An investigation at the Toledo District Education Center revealed that a clerk had been defrauding the government of $69,272 because some original receipts did not match the corresponding duplicate copies, were not brought to account in cashbook, or unofficial receipts had been issued and the cashbook had been altered.
The sales reports submitted from the District Education Center did not include the books sold or the prices they were sold for.
The amount of funds received had not been reconciled with the books sold nor had any inventory exercise been done to determine what books should be on hand.
Another investigation at the Ministry of Labor, Local Government and Rural Development found that 27 payments totaling $115,041.15 had been made to vendors who purportedly supplied items or provided services. A Second Class Clerk had used the system to create all the invoices.