From the Editor’s Keyboard

Possible misinterpretation of 2018 audit report

21 December 2019 at 03:28 | 870 views

By Mustspha Wai, CPA

As we the people remain committed to holding the government to account, we must do so using accurate information and in good faith.

The Auditor General is also under obligation to present audit findings accurately and free from elements susceptible to sensational soundbites. No doubt the current Auditor General has been doing a fantastic job over the years and she continues to command my respect and admiration.

While I have yet to complete my review of the 389-page audit report, below are my initial observations regarding the report’s conclusuon about the trending Le.141 billion in "cash losses and irregularities":

1. There is nothing in the audit report concluding that someone walked away with "cash" or stole "monies" to the tune of 141 billion leones. I am placing emphasis on the term "cash" as defined in generally accepted accounting principles ( GAAP).

2. The use of "cash losses" to describe the Le.141 billion is misleading. There is no such thing as "cash losses" in financial accounting. "Cash" and "loss" are two different terms, with the former being legal tender and the most liquid asset and the latter being "decrease in net income that is outside the normal operation of the business. For example, losses can occur from sale of an asset for less than its carrying value on the books. Professionals should avoid using layman’s terms in professional documents.

3. Combining of "cash losses and irregularties" to the tune of Le.141 billion, given that the irregularities aspect of it include elements that are in fact not "cash" is misleading. The list presented in the report includes "inventory" and "expenditure" accounts that are not "cash". Just because the auditor was unable to obtain documentary evidence of approval for an expenditure does not mean the related cash outflow did not occur or is missing. Lack of adequate documentation of transactions is a major weakness in internal control across the government of Sierra Leone.

For the record, I am by no means attempting to downplay or dismiss the seriousness of the numerous weaknesses noted in the audit report. In fact, I am on record preempting this report and calling attention to the pervasiveness of internal control weaknesses across government and the need for remediation of longstanding audit findings.

I strongly believe that government should embark on a major initiative geared towards addressing the findings cited in the current and previous reports and improve internal controls across government in general.