Audit reveals shambles at GCC
Tsaone Basimanebotlhe | Friday April 3, 2015 12:53
The Gaborone City Council (GCC) has failed an audit into its 2010 accounts, with the Auditor General noting improper preparation of statements, numerous cases of financial ineptitude and poor record keeping.
In one howler uncovered by the Auditor General, under-aged orphans were found indicated as married!
Presented to councillors on January 30, 2015, the audit report is the latest on the local authority’s finances and comes a full five years after the period in which the funds were spent. The financial statements themselves were presented to councillors two months after the statutory period within which they were meant to be filed.
The damning audit comes as the local authority prepares to spend P321.1 million in the 2016 financial year, which began yesterday. Of the amount to be spent, P212.6 million is revenue injection from government.
The council expects the balance to come from ratepayers and other services revenues, at a time when tensions with residents over service delivery are rising, with a lawsuit possible from Phase 4 homeowners.
The latest audit report chronicles multiple counts of financial incompetence and negligence by the local authority, resulting in the then Auditor General, Robby Sebopeng, failing the council on its financial statements.
“Audit evidence points out that the financial statements were not properly prepared to reflect the accurate status of the accounting records on which these statement are based,” he said.
“The balance sheet and annual accounts as prepared and presented to me for audit do not fairly represent the financial position and operational results of the Gaborone City Council.”
The Auditor General uncovered financial disarray in the orphan care programme where council officers failed to provide documents to support more than P22 million in bank transfers.
“Therefore, audit could not be performed for the concerned transactions. Management should ensure that all documents requested for audit examination are provided without delay,” the Auditor General said.
Documentary chaos was also uncovered in the orphan care programme where auditors requested 58 files for inspection but were only given 26. “It was noted that some files contained incomplete forms and there was inconsistency of information as the same filed requiring the same basic information such as birth and death dates, showed different dates for the same individuals.
“The filing is not up to standard as some documents were left loose in the files and could easily be lost with relevant information. Questionable information was also provided in forms. For example, some underage orphans were indicated as married.”
In addition, the local authority’s bookkeepers kept three accounts for the repayments of the SHHA building material loans, which had a total balance of P3.5 million by the end of March 2010.
“The situation now is that money received from beneficiaries is deposited into recurrent account and these funds might end up being used in the day to day running of the Council. Only one account should be maintained (so that) repayment of building loans are made available for re-issue to other applicants,” the Auditor General said.
All manner of variances were also noted in the Council’s attempts to gauge its rate debtors, its stateland debtors (or those occupying state land), its creditors and other categories of assets and liabilities.
The Auditor also uncovered numerous inconsistencies in the Council’s attempts to account for its vehicle stock with the value of the council’s fleet as at March 2010 understated by 62 vehicles.
“The council is requested to explain why these 62 vehicles were not included in the schedule of plant and vehicles and why some are not costed in the vehicle register in order that they show a true picture of plant and vehicles,” the Auditor said. The local authority’s finance officers responded by noting a series of erroneous filings of vehicle purchases, incorrect identification of vehicles within the account schedules and deferred inclusion of valuations in the finances.
The audit also noted a P598, 890 discrepancy between the closing balance of a Barclays Bank loan in the council’s financial statements and the actual bank statement.
“Therefore, the Barclays Bank loan balance in the financial statement cannot be relied on,” the Auditor noted.