Public books in shambles — again

MASERU — Auditor-General Lucy Liphafa yesterday released, for the second year running, a damning report on the state of Lesotho’s public accounts. 

In a report which covers the 2004/5 and 2005/6 financial years, Liphafa said she had “issued a negative opinion on the state of affairs of the government of Lesotho.”

Liphafa said there was serious “non-compliance with accounting principles” in the management of Lesotho’s public accounts.

Liphafa said audits carried out by her staff across a number of ministries and departments had unearthed serious cases of non-compliance to government rules, regulations and procedures.

She said these cases were indicative of “a lack of knowledge or commitment to following the government’s prescribed procedures”.

Liphafa cited several cases involving the irregular payment of salaries to government employees on unauthorised study leave.

She also cited the failure by government departments to apply proper procedures regarding procurement and failure to apply proper receipting and accounting procedures on revenue received by government ministries and departments.

“The public accounts are not presented in accordance with any defined standards such as International Public Sector Accounting Standards,” said Liphafa in the report.

Liphafa said as a result of these problems she had “issued a negative opinion on the state of affairs of the government of Lesotho and in particular the financial position as at 31 March 2005 and 31 March 2006,” Liphafa said.

The report says there was also serious non-compliance with the government accounting manual. The report says the Treasury Department tasked with preparing the accounts is unfamiliar with the Government of Lesotho Financial Information System (GOLFIS).

“This causes a large number of errors when postings are made to the ledger,” said Liphafa in the report.

“Supervision of the accounting function in the Treasury Department is not strong enough to prevent errors arising and to correct those that happen.”

The report also said staff from the government ministries had not provided adequate information to the Treasury Department to enable reconciliation of GOLFIS to ministries’ records.

“As a result of the above factors, I have been unable to obtain satisfactory explanations for the presentation of assets and liabilities in the accounts and supporting notes.

“This casts doubt on the original entries made to the GOLFIS ledger system to the extent that I cannot rely on the output from that system,” said the report.

The report said the government was maintaining around 140 bank accounts for districts, overseas missions and central bank accounts.

The report said most of these accounts had not been reconciled for years, casting doubt on figures reported in the government financial information systems.

“This means that the government does not know what its actual cash position was at the end of the financial years 2004/5 and 2005/6,”

the report said.

 

 

“There is also a significant risk of material fraud that has not been detected due to lack of reconciliations.”

Last year, Liphafa described the 2003-04 public accounts as “one big mess” and that the management of Lesotho’s public funds were in shambles.

 

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