Salone News

Lifting the Veil: Who Audits the Auditor General ?

7 February 2021 at 19:19 | 1668 views


Our investigations of the Auditor General’s office in relation to the possible misappropriation of Le 3 billion has unearthed a web of conspiracy to conceal vital information about the unaccounted-for money.

We can reveal that from 2016 to 2019 the Auditor General’s office has been audited by two little unknown firms handpicked by Parliamentary PAC but suspectedly influenced by Mrs. Lara Taylor-Pearce (photo) herself. The mushroom firms are both Sole Proprietorship companies, and are owned by almost the same set of individuals with empirical triangular relationship amongst the AG’s office, her auditors and sub-auditors for 4 years. The Auditor General’s office pays the mushroom firms colossal fees, no doubt because the firms belong to a friend. The audit firms in turn have merely compiled cumulative data provided by Audit Service Sierra Leone without the proper auditing or examination.

This is the ridiculous methodology the firms have used in the name of auditing around Le130 billion the ASSL has spent from 2016-2019.

On realizing the flaws in the 2019 Public Accounts and NACOVERC Audit Reports after adverse public reaction, the country’s supreme Auditor General hastily organized a kangaroo Press Conference at the office of Sierra Leone Association of Journalists’ (SLAJ) office to defend her actions. Not only that such action is tantamount to contempt of Parliament but she ended up implicating herself even more. No Auditor General, not only in Sierra Leone, but anywhere in the world, that after submitting the Annual Public Accounts to Parliament, she went on radio and followed it up with a politically motivated Press Conference where in both cases ended up accepted serious errors in the Reports. Well, at the famous and historic Press Conference held on Thursday, 7th January 2021, the Auditor General admitted that her computation of the supposed loss of revenue from timber exports of $5.48 billion, 150 percent bigger the size of Sierra Leone economy, was not correct. She insisted on the radio 98.1 FM Democracy that the Law is the Law and despite her consultations outside Sierra Leone confirming the error in the Law, NRA should account for the loss.

She also accepted receiving audit fees, but she said that is not revenue but ‘charges’ which she utilized unlawfully without paying into the consolidated fund of Government as prescribed in Section 3 of the Fiscal Management and Control Act of 2017. Realizing her blunders, she claimed that the Attorney General and Minister of Justice had exempted her not to transfer the funds against the law enacted by Parliament in 2017. This never happened based on sources from the Attorney General’s where it is clearly expressed that within the definition of the operational independence of the Auditor General, that her office is exempted in the PMCA 2017 not to transfer funds but can use at will. Well, the actions of the AG to collect, retain and utilized over Le3.0 billion in 2018 and 2019 is simply a violation under the Laws of Sierra Leone.

It is against this we still beg the question “WHO AUDITS THE AUDITOR GENERAL OVER LE3.0 BILLION LEONES AUDIT FEES” collected and utilized in 2018 and 2019. Did her auditors conduct compliance audits of the ASSL against the law? What is the pedigree of these auditors to audit the supreme audit institution who should be above board? The trust of the Auditor general’s audit is carried out within the laws-namely the Constitution of Sierra Leone, Procurement Act 2016, Public Financial Management Act 2016 and many other regulations that borders in the management of the finances of the state. If so, why is it that the supreme AG perpetually violates the law without recall to justice by the ACC, the Courts and even the economic and accountability civil society groups cannot raise the alarm? Where are you, Campaign for Governance, the Center for Accountability and Rule of Law that you cannot raise the right questions for the citizens of Sierra Leone instead of clamoring on protecting on the personality of the individual, Lara Taylor-Pearce against the citizens? As she clearly stated, “the law is Law” no one is above it.

The guilt is very clear and shocking. Once Part I of the article was published two weeks ago, senior management staff of ASLL social media leak confirmed thus:

- Le3.0 billion was collected by Auditor General as audit fees or revenue from agencies and departments of Governments and projects in 2018 and 2019; and

- “In 2019, Le477 million was transferred to the CRF in December of the same year (2019) that relates to fees collected from MDAs that received monies from CRF out of the 1.6 billion collected; Le1.15b which was retained was derived from Parastatals (who do not receive monies from the CRF). Which is in agreement of the ASSL’s Act of 2014 (Section 27 (2)). In 2018, Le281 million collected from Sun-Vented Agencies was transferred as follows: Le165m in May 2018 and Le115m in September 2019”.

While PRO ASSL Sandy was directed to defend the Madam, Madam has no patience but to frog march two of her deputies to hold a Press Conference. To the dismay of the many, she never consulted even the ASSL Board to undertaking such Constitutional breach. Gross Insubordination!!

At the hastily Press Conference, the AG, in a bid to defend herself over the Le3.0 billion audit fee, told journalists that “the monies she collects are fees not revenue”. Another deceptive blunder as she is indicting public servants, commissions and councils for failing to transfer into the consolidated revenue fees and levies they collect. Well, AG, TaylorPearce of ASSL is actually collecting domestic revenue for services they render to MDAs and donor funded projects. By definition of domestic revenue, Part I(2) of NRA Act interprets revenue as “taxes, duties, fees, levies, fines, etc or other monies charged or collected under the laws as specified in the Schedule”. It is in light of this Section of the FMCA 2017 clearly states that “Where in any enactment it is provided that revenues or other monies received by an agency of Government are to be retained by that agency for any purpose including defraying the expenses of that agency, such revenues or other monies SHALL be paid into the Consolidated Fund notwithstanding any provision to the contrary contained in the enactment”. Therefore, this Section provides for a MANDATORY transfer of ALL revenues collected by agencies of Government, of which ASSL is no exemption, upon the FMCA 2017 coming into legal effect. How then, the supreme Audit institution exempts herself from the definition of revenue collected?

Therefore, it was rather misleading to the public for Auditor General, Lara Taylor-Pearce, to say that Attorney General had advised her not to turnover Government revenue. We expect the supreme auditor general to live to the letter of the Law as she clearly said at 98.1FM Gud Mornin Salone that “the Law is the Law”. Please provide where Attorney General directed that in the exercise of your operational independence that audit fees you collect is outside the definition of the FMCA 2017.

Who audits the Auditor General-lifting the Veil
Section 33 of the Audit Service Act empowers Parliament to appoint the auditors for Audit Service Sierra Leone. The Act stipulates that “the Accounts of the Audit Service shall be audited by an independent private accounting firm appointed by Parliament”. It thus implies that Parliament, as it may be, should go through the National Public Procurement COMPETITIVE procedures, to select a very good independent firm, with standing reputation. Unfortunately, in the last 4 years or so, mushrooms inter-related auditing firms have been conducting the audit with alleged linkage to a senior deputy auditor general dubbed the “Diamond Devil” whose only desires or solace is intimidating public servants. Who are these auditors?

Based on our sources, a PAJ and Associates (unknown audit firm with no standing international records) is contracted to audit ASSL since 2019. It is also reported that PAJ Managing Partner is Alex Solomon Jusu. Patrick registered PAJ as sole proprietor accounting and auditing local business in February 2014 and they audited ASSL in 2018 for tax payers’ monies over Le38.0 billion government gave to ASSL. The audit fees paid to PAJ is claimed to be in the region of Le85.0 million. PAJ is even preparing again to audit the 2020 accounts for over utilization of Le40.0 billion received from government, excluding audit fees of over Le1.5 billion and donor funds.

Prior to 2019, another lilliputian mushroom sole proprietorship, called Light Kongomanyi Glory Accountants (LKG) audited ASSL for 3 years from 2016-2018 for a cumulative expenditure over Le80.0 billion. LKG owned by one Septimus Lebbie registered in November 2014 as a sole proprietor local accounting business with no experience. The company who’s experience, capacity and tax status are reported to be below Le2.0 million, immediately started auditing Auditor General’s accounts in 2016. Sadly, revealing and disturbing facts are that as a compensation to concealing adverse material evidence in Auditor General’s Financial Statements in those years they audited (Auditor General) contracted LKG in 2018 and 2019 to audit community banks in all the 16 districts in Sierra Leone. With sources from ASSL, NRA and Master and Registrar’s office, there are clear and known conflict of interest relationships amongst ASSL and the two mushroom audit institutions. In the exercise, which we are evidently digging ,Tamba Momoh, Deputy Auditor General is allegedly actually participated in the audits of the community banks. He was allegedly seen in Kamawkie and Kambia community banks conducting the audits so that LKG can complete the exercise on time.

It is alleged also that for those 2016-2017 LKG audited Auditor General’s accounts, PAJ’s Managing Partner, A.S Jusu worked as a Consultant to LKG (or in collaboration with) to audit ASSL. Beyond that, during the same period LKG was auditing ASSL, PAJ and Associates was the LKG. So, it is reasonably sound to argue that PAJ Associates have audited (or being part of the auditors of ASSL) Audit Service Sierra Leone for 4 years.

Another disturbing information of potential conflict is the Deputy Auditor General (1) Mr. Tamba Momoh is allegedly a close family friend of PAJ Managing Partner. Tamba is the officer directly charged with the responsibility to liaise with Parliamentary Public Accounts Committee for ASSL matters including public accounts and selection of the ASSL Auditors. It therefore goes with reasonable degree to understand why many adverse material misstatement issues relating to the audit of the Auditor General are kept in secrecy; since a friend of one of them audits them. (Management Letters and responses are they available on website?).

Who should audit the Auditor General?
From the shocking revelations on who audits the Supreme Auditor General, who’s been perceived by many including citizens, civil society groups like Marcella Samba of Campaign for Good Governance and donors, as a public servant above board, a woman of the highest integrity, it is now clear that that institution has many cockroaches in their Board. Now joint me to ask the pertinent question as to who should ideally audits the auditor general of a state?

Although Parliament has the mandate to appoint ASSL auditors (MPs are not accountants), Lara Taylor-Pearce knowingly allowing mushroom sole proprietors of PAJ and LKG with no experience and lack of capacity to audit her institution for funds over Le120.0 billion or more utilized in 4 years is completely unacceptable and that surely compromises her integrity globally. By international standards, the Auditor General’s office should be audited by international recognized audit firms operating in Sierra Leone. Ideally, one would expect such audit be signed off by joint external partners of the selected firm. Why reputable internationally recognized firm. According to the International Federation of Accountants (IFAC)

“Independent auditors play a vital role in enhancing the reliability of financial information produced by companies, not-for-profits, government agencies [like ASSL], and other entities by providing assurance on the reliability of the financial statements. While the primary responsibility for the quality of financial statements is with the management of the company producing those statements, external auditors provide independent assurance about that quality”. The key objectives of IFAC maintaining international audit standards are to serve the public interest by setting, independently and under its own authority, high-quality auditing, assurance, quality control and related services standards, and by facilitating the convergence of national and international standards, thereby enhancing the quality and uniformity of practice throughout the world and strengthening public confidence in the global auditing and assurance profession. Therefore, one would have expected that the for Auditor General to live above board, her accounts should be audited by one of the following firms-Baker Tilly, BDO or Moore SL, being the top internationally related firms in Sierra Leone.

Coming back to our questions in Part 3, WHO AUDITS THE AUDITOR GENERAL OVER AUDIT FEES OF LE3.0 BILLION, it now shockingly revealing and to dismay of financial institutions, bankers, senior auditors, civil society groups, donors and the very public that highly rated auditor general compromised her accounts to be audited by mushroom firms of sole proprietors with cumulative contracts spanning from 2016-2021/22. We are not attacking Madam Auditor General and her institution but were carrying out integrity checks to confirm that Sierra Leone’s auditor general has violated the Fiscal Management and Control Act of 2017, compromised her independence and integrity to serve as supreme auditor of the state, compromised her independence for awarding auditing contracts to LKG to audit community banks for huge fees who audited her in 2017 and 2018.

We call on the Auditor General, Lara Taylor-Pearce to make public statement on these claims and allow internationally recognized firms to conduct both financial and compliance audits of her organizations from 2015 to 2020. We also call on her to advise Parliamentary Public Accounts Committee chaired by Hon Deputy Speaker to terminate the current auditors, PAJ and Associates and to conducted competitive appointments of reputable audit firms. (Part 4 of WHO AUDITS THE AUDITOR GENERAL WILL BE RELEASED SOON).