By ‘Majirata Latela
The acting Auditor-General, Monica Besetsa, has revealed this week that M3.5-billion in government funds is missing from its bank accounts and the accountant general does not know how much money the government of Lesotho has in various banks both locally and internationally.
Besetsa said this is the outcome of the audit for the year ending March 31 2020. She said the financial statements showed that the government had 372 accounts totalling M5.311 billion while the consolidated statement of cash receipts and payments reflect that government had cash of M8.724 billion. These resulted into an unexplained difference of M3.474 billion.
Speaking at a press conference in Maseru this week, Besetsa showed that the accountant general does not even know how many accounts the government has in various banks.
“The audit established that the accountant- general has not maintained the register for official bank accounts properly. As a result, I could not verify the number of accounts against the information provided by the banks.
“In the event of poorly maintained register and also discrepancies of information from the banks, I could not confirm the accuracy and completeness of 362 accounts with a total bank balance of M5.313 billion per bank confirmations. This weakens the reliability of the reported cash position of the government of Lesotho as at March 2020,
“The total number of accounts held at different banks as at March 2019 was 387. The information provided by the banks revealed that during the financial year 2019/2020; 69 new bank accounts were opened, 40 were closed and therefore the expected number of bank accounts at the end of the year was 416.
“However, the bank certificates showed a total number of 362 accounts as at March 2020 and thus resulting into a shortfall of 54 accounts. This scenario impairs reliability of the reported cash position of the government as at March 31 2020,” reads the report by Auditor General.
The auditor general has therefore raised her concerns over the information which was presented by the banks. She said the banks were known for proper record keeping. She regarded them as the most reliable type of audit evidence that auditors can obtain with regards to the existence, accuracy and ownership of bank accounts and account balances of the audited entity.
“This time we experienced challenges with banks which could not give accurate information of the bank accounts and bank balances even though we were hoping to get proper and accurate information from them,” Besetsa told the media.
She further indicated that some of the factors found to have caused the discrepancies include that, out of the seven accounts reported by Standard Lesotho Bank to have been closed during the year 2019/2020, six accounts still appeared on the bank certificate as at 31 March 2020.
Two accounts namely Capital Project Leribe and decentralisation Local Auth. Recu Leribe were reported by Lesotho Post Bank to have been opened and closed on the same day of September 4 2019.
The report reveals that a total of 25 accounts reported by Nedbank, Standard Lesotho Bank and Lesotho Post Bank to have been opened during the year 3019/20 did not appear on bank certificates as at 31 March 2020.
Another discrepancy in bank accounts according to Besetsa was that 28 accounts with a total of M198 million were not part of the reported accounts as at March 31 2019 and had appeared on bank confirmation as at March 31 2020.
However, these accounts did not appear on the confirmation from the banks for the new accounts opened during the year 2019/2020.
Furthermore, the comparison of previous year’s bank confirmation and current, year’s bank confirmation revealed that 64 accounts with a total balance amount of M48.3 million appeared on the bank confirmation as at March 31 2020 nor appeared on lists of closed accounts.
Apart from discrepancies in bank accounts, the auditor general has also noted that there were discrepancies between the consolidated financial statements and bank confirmations with regard to the number of bank balances and cash balances as at March 2020.
“There are 374 held at different banks reported in the financial statements totalling M5.311 billion whereas bank confirmation reflects 362 accounts with a total balance of M5.313 billion resulting into a variation of 12 account totalling M2miliion. The variances were mainly at Standard Lesotho Bank (SLB).
Weighing in on the anomaly, local chartered accountant and former president of the Lesotho Institute of Accountants, Robert Likhang, told this publication that there is a huge problem with government accounting which he described as ‘very out dated and has been causing problems for quite a long time now.’
“The biggest problem is that the government employs people who do not have the knowledge or even certificates to confirm that they have studied accounting. When they are given the accounting job they start failing to deliver properly on the job they are required to do.
“Some of the past accountants-general have tried to professionalise the accounting unit. Some even tried to start the accounts on a clean slate but even after that there were still problems.
“This is to say that people who are tasked to work with the government accounts do not have the knowledge to do the job. I remember at one point whereby the past accountants-general tried to fix this problem but there was a lot of resistance from the politicians. They would put people who know nothing about the accounts just because they support the ruling party,” he said.
He added that at the time politicians did not realise the challenges of attempts to solve the problem of unprofessional accountants. He said the reflection of the resistance is shown by the report of the Auditor General.
“It is true that the three past accountants-general have been chartered accountants before but that doesn’t end there, we also need directors and financial controllers to at least hold a chartered accountant certificate,
“On the other hand the principal secretaries are now controlled by the ministers. They therefore fail to stop the ministers from doing anything that has not been approved by the parliament. They do not understand that the positions they are holding include among others being chief accounting officers. They are appointed on party political tickets.
“For as long as there is no political will to change the accounting cadre, then we should not expect anything better. We are going to see this situation even on the next audit report. Also we still have the problem of Public Financial Management and Accountability Act of 2011 which is still under review. Before we fix all these problems we will stay on with similar challenges,” Likhang said.
When approached for comment, the Parliamentary Public Accounts Committee Chairperson, Teboho Sekata, could only say the PAC will call the accountant-general to give details of what transpired for such a huge amount to be missing in government accounts.
Neither the minister of finance nor the accountant general was available for comment this week until we went for print.
