…as audit of tax authority reveals financial discrepancies
…But RSL questions audit procedure, mulls court challenge
Mohloai Mpesi
THE Revenue Services Lesotho (RSL) is embroiled in a fierce standoff with the Office of the Auditor General (OAG) over an audit of its 2024/25 financial statements.
The Lesotho Times has established that the audit unearthed financial mismanagement, which the RSL disputed its procedure and considered challenging in court.
Although the OAG initially withdrew its report to allow RSL to address some of the concerns, the tax authority escalated the matter by lodging a complaint with the Lesotho Institute of Accountants (LIA). The complaint targeted the competence of PKF, the audit firm engaged by the OAG to scrutinise RSL’s books.
According to Auditor General, ’Mathabo Makenete, the RSL audit began in May 2025 and was meant to cover the 2024/25 financial year, with the final report due to the Minister of Finance and Development Planning, Dr Retšelisitsoe Matlanyane, by 30 June 2025.
“RSL, like all government institutions, is audited by the Auditor-General every year. It is expected that every year they will present their financial statements, and the Office of the Auditor-General audits them. We audited RSL as usual,” Ms Makenete told the Lesotho Times this week.
“We commissioned PKF to audit RSL in terms of section 24 of the Audit Act 2016, which empowers me to do so, and there was never an issue with that. After they completed the work, they signed off the books with RSL that the audit was complete. However, before I could sign the audit, it had to be scrutinised by the Director of Compliance and Financial Audits, Teboho Koloi, and the Deputy Auditor General, Paul Letlela.
“We then picked out three issues which were treated as minor whereas they were supposed to be highlighted as major because they had a huge bearing on the financial statements.
“Based on these findings, the RSL audit was now qualified (unclean). However, RSL seemed dissatisfied with the opinion, and they indicated that they would take the matter for judicial review to challenge the procedure of us reviewing PKF’s audit. The work belongs to the Auditor-General who at the end of the work appends her signature, and therefore we have a right to review the books.
“When we learned they were not happy, we withdrew the report and invited them for talks. They were able to fix one of the three issues but the other two remained.”
She said she was shocked to learn that RSL had reported PKF to the LIA instead of the OAG, which had commissioned the audit firm.
Adding to that, Mr Letlela, who was present at our interview with Ms Makenete, said the two unresolved matters, which he was reluctant to delve into as the report has not been officially released yet, had driven the Auditor-General into forming a qualifying opinion against the RSL.
When a report is qualified, it means the majority of it is accurate but there are unsatisfactory parts affecting the true nature of the financial statements.
“When the issues are worse, we label the report adverse, but when they are uncomprehensive, we do not even issue an opinion but a disclaimer that it is totally hopeless.
“When it is qualified as in this instance, we look at the root cause of this issue. In this case, finances were not used in terms of the law which governs them. For example, if the Labour Act says your salary should be M20 000 per month but you are not paid that amount, that is a breach.
“Another issue is the failure to maintain the International Reporting Standards (IRFs) when recording their books throughout the year. This gave the books a different picture.”
Speaking on behalf of the RSL Commissioner General, ‘Mathabo Mokoko, the taxman’s Public Relations Manager, Tšepang Mncina, said the RSL would not comment on the audit report as it has not been completed.
“We cannot comment on the audit report that has not been published/completed,” Ms Mncina said.
However, the Lesotho Times has learnt that Advocate Mokoko and her officials are angry about the audit. Some are understood to have gone as far as questioning Ms Makenete’s right to remain in office, alleging she was now above retirement age. Those close to Ms Makenete dismiss that as a “cheap smear”.
“When an Auditor General does her job and raises queries about the mismanagement of public funds, let’s focus on addressing those issues she raises instead of trying to engage in cheap smear campaigns against her ….This woman (Ms Makenete) is incredibly hard working and merely trying to do good for Basotho….,” a ministry of finance official who asked not to be named, because he is not authorized to speak to the Press, said.
