Depts lax in budget control, funds usage

 In all departments and agencies which the Auditor General reported on, funds management and budgetary controls were inadequate or simply lacking.

There was a “lack of monitoring of expenditure noted in all 18 departments”, for instance. Departments appeared not to prepare cash flow statements regularly to reflect shortfalls and surpluses.

There were variations between records kept by 14 departments and the Finance Department that indicated a massive variance of K147,752,131, the AG said.

Funds were wrongly transferred between divisions and functions and expenditures were charged to votes where no funds had been appropriated for the purposes.

Bank reconciliations were deficient and officers responsible for doing reconciliations were not qualified or properly trained.

Assets management was poor in all 18 departments audited by the AG. It was evident that:

• Asset registers were either non-existent or not maintained properly;
• Periodic stock-takes were not conducted to determine the accuracy of asset registers;
• From a sample of vouchers the AG selected for testing, over K1.2 million was identified as unrecorded assets; and
• Controls surrounding the management of vehicle fleet were non-existent and those who took custody of the vehicles were not identified in many instances.

Procurement and payment procedures were also in a mess so that the AG could not determine whether or not goods and services received were of a good quality.

In nine departments, amounts relating to missing procurement and payment documents was in excess of K4.5 million.

Another department paid K5 million for rental of a property that was not occupied and the money was yet to be recovered at the time of reporting.  This is despite that an additional K190,000 was paid to the same company without recovering the K5 million.

Such lack of controls over procurement and payments exposed the State to risk of, among others; 

• Unauthorised purchases;
• Over-commitment of funds without recourse to cash flows; and
• Uneconomical purchasing.