What Lessons have we learnt from the GOTG 2017 Audit Report?

Dr Basil Jones

Gambian social media is buzzing with the report from the National Audit Office of the Gambia on the 2017 audit of GOTG. The focus of the discussion has been on two areas, (i) the D633 million special security account and (ii) the D11 billion guarantee provided by GOTG to SOEs. The report examined transactions undertaken during the period 1^st January 2017 to 31^st December 2017 and balances held as of 31^st December 2017.

The audit report is much more detailed than these two headline items. I will describe revelations in the report as “Total disregard to the provision of the Public Finance Act and the Financial Regulations”.

In terms of findings of the audit report, these were divided into 3 priorities:-

High – to be addressed immediately;

Medium – to be addressed as soon as possible within the financial year;

Low – matter should be addressed

There were 117 high priority findings and 8 medium findings. There were no low findings. This shows that addressing the shortcoming of the audit report by the GOTG is very urgent. We have lapses in Public Financial Management in the Gambia from all the stakeholders.

The problems identified ranged from inappropriate procurement processes, disregard and non-approval of projects by the Major Tender Board, Single sourcing and lack of competitive bidding. The firewall and antivirus for IFMIS were diactivated which could allow unauthorized access and virus to corrupt sensitive data.

One of the examples quoted in the report is the GPPA giving no objection and single-sourcing which is not considered to be the best procurement method for GAI enterprise to rehabilitate statehouse valued at D22.5 million. The management response from GOTG is that GAI enterprise will pre-finance the project, however, one week after the contract was signed, payment was made to GAI enterprise. There was no evidence of pre-finance and physical verification of the works shows paint peeling off and no evidence of supervision by the Ministry of Works, Transport and Infrastructure. GOTG in response to this issue mentioned that it will stop pre-financing of contracts. This was not respected a few years down the line as the same pre-finance explanation was given for the Banjul roads rehabilitation project.

Procurement regulations also stipulate that all items over D10 million should go to Major Tender Board, however procurement of vehicles amounting to D11 million did not go through MTB and to make matters worse, it was single-sourced to TKM.

The special security account was opened without authority in 2012 by the Office of the President without the authority of the Accountant General. Between 2012 to 2019 there was a total deposit of D633.2 million and withdrawals of D631.7 million and the NAO advised that the account be closed as it did not pass through the consolidated revenue fund of GOTG.  A similar special security account with a different account number was opened by the Office of the President with the permission of MOFEA.  This account had deposits of D41.6 million and withdrawals of D35.8 million when it was closed in October 2017 and the balance was transferred to the consolidated revenue fund.

For State-Owned Enterprises (SOEs) of D11 billion which is high-risk exposure, the GOTG is guaranteeing loans without any fiscal risk assessment by MOFEA in breach of the Public Finance Act. As a result, GOTG might end up paying huge sums of money if SOEs default in payment because a fiscal risk assessment was not conducted. What is more, concerning with SOEs according to the audit report is that there is no borrowing limit set for public enterprises – which is also a violation of the Public Finance Act.

We need to strengthen Public Finance Accountability Mechanisms in the Gambia

These are some of my suggestions to strengthen the weak public finance mechanisms that have been identified in the report by the NAO.

1. We need to hold the Accounting Officers accountable for lapses in public finance management. In the Gambia, the AO are the Permanent Secretaries and they need to be held accountable. Is it that there is a lack of understanding and capacity of the Public Finance Act and the Financial Regulations which is the reason that 117 high priority findings were identified in the report for immediate action.
2. Need for GPPA and the Major Tender Board to follow rules and eliminate single sourcing and subject all procurement to competitive bidding. There is also a need for more transparency in the project and this can be achieved by using an online web-based procurement process.
3. The Public Finance Committee of the National Assembly is also failing in their oversight responsibility. They need to step up to the plate. Every audit report is accompanied by an implementation of recommendations of the previous year’s report. For example, in the 2017 audit report, it shows that 80% of the recommendations from the 2016 report were not implemented. Year in and year out, the National Assembly approved the budget submitted by the GOTG without addressing the audit recommendations. The Constitution requires the Auditor General to report to the National Assembly.
4. The independence of the National Audit Office should be guaranteed, and the office should be strengthened to allow them to carry its oversight function free from political interference.

The management response by the GOTG of the 2017 audit report are very generic and vague without any timeline or target to implement the recommendation. Bearing in mind that the NAO identified 117 High priorities to be addressed. We are in 2022, what has the National Assembly done to ensure that the recommendations in 2017 are fully implemented, rather than just keep approving budgets without ensuring that lapses in Public Finance Management are corrected.

We can do better Gambia.