$640,217 ticketing machine queried
The Samoa Airport Authority (S.A.A.) spent more than half a million tala on a parking ticketing machine.
This was revealed by the Controller and Chief Auditor, Fuimaono Camillo Afele, in his report to Parliament for the financial year ending 30 June 2013.
The report says that the auditors found upon their review of fixed assets that an amount totaling $529,398.77 was paid for the new ticketing machine project in 2013.
The report does not name the company, which installed the machine.
But it revealed that it was awarded to a locally owned overseas company. The Sunday Samoan understands that the company was also involved with previous cases highlighted by the Controller and Chief Auditor in relation to the Samoa Land Corporation.
It was not possible to get a comment from the company in question.
But the Auditor’s report raises eyebrows.
“The total amount approved for the project was for $642,348 and so the amount paid by the end of the current audited financial period ended 30th June 2013 was 82 per cent of the total project,” the report reads.
“Further investigation revealed a final payment made in October 2013 of $110,818.53 totaling $640,217.30.
“Investigation of work done on the ticketing machine revealed work has not been completed up until the date of the completion of this audit in December 2013. No contract was sighted at the time of the audit but was made available later.
“At the end of the audit, the authority has yet to settle the 40 per cent of the first variation but 100 per cent of the initial contract was already paid,” stated the report.
Responding to the findings of the audit report, the S.A.A. said the ticket machine had already been installed, tested and commissioned in 2014.
“We found from our review of payments that there was a lack of supporting documents for a payment made to the company.
“The supplier invoiced S.A.A. in absence of the required documentations which they promised to provide later on. The S.A.A. noted the recommendation for future improvement.”
But the auditors noted in their review of payments that quotes for purchases were either not sought or not filed for some of the payments.
The report also stated that the S.A.A. is committed to obtaining three quotes from its suppliers.
See below the full findings of the audit into the Samoa Airport Authority.
4.23 Samoa Airport Authority for the financial year ended 30
1. A review of fixed assets noted that SAA did not comply with FK(12)29 which required the
approval by the Tenders Board of all procurements over $200,000. The initial VIP upgrade
was stated by the Authority, as per Board paper dated the 9th August 2013, as being approved
by the tenders board in October 2012 at a cost of $442,000 to a local supplier/contractor. SAA
could not locate or provide the Tenders Board approval.
2. The plan in issue 1 for the VIP upgrade was changed, nullifying the initial VIP upgrade
contract, to include a new VIP building and an upgrade of the existing VIP building. This was
not re-advertised by the Authority nor was it taken to the Tenders Board for approval but was
awarded to the existing contractor through the utilization of the former approval issued by the
Tender's Board in October 2012 (not sighted) for the initial VIP upgrade contract. The new cost
of the VIP upgrade was then increased to $1,024,175 and the Board endorsed this increase yet
there was still no Tenders Board approval located or provided to the audit team. SAA argued
that these arrangements became necessary because of the urgency required to be ready to
receive the SIDS guests.
3. We found from our review of fixed assets that the cost of the terminal upgrade, which started
in 2012, reached $415,557 at 30 June 2013 and continued increasing to a total of $663,661.41
at the end of November 2013. This procurement was again in contravention of FK(12)29.
According to SAA the upgrades to the Terminal Buildings were not undertaken as a single
project as implied by the audit observation, but rather were implemented in different stages in
response to urgent deterioration or negative impacts to airport facilities or services or due to
outstanding requests from airport tenants who had been subjected to deteriorating airport
assets that they were using.
4. We found from our review of fixed assets that there was no tenders board approval available
for the upgrade of the coastal fence project which was awarded to a local supplier for
$279,629.50 in 2013. This procurement failed again FK(12)29 but then SAA argued that the
procurement for the new coastal fence was made in 2012 before the new procurement
guidelines came into force.
5. We found from our review of fixed assets that an amount totalling $529,398.77 was paid for
the new Ticketing Machine project in 2013, which was awarded to a locally owned overseas
company, as approved by the Tenders Board. The total amount approved for the project was
for $642,348 and so the amount paid by the end of the current audited financial period ended
30th June 2013 was 82% of the total project. Further investigation revealed a final payment
made in October 2013 of $110,818.53 totalling $640,217.30. Investigation of work done on the
Ticketing Machine revealed work has not been completed up until the date of the completion
of this audit in December 2013. No contract was sighted at the time of the audit but was made
available later. At the end of the audit, the Authority has yet to settle the 40% of the first
variation but 100% of the initial contract was already paid. SAA responded that this machine
had already been installed, tested and commissioned in 2014.
6. We found from our review of payments that there was a lack of supporting documents for a
payment made to the company in issue 5 The supplier invoiced SAA in absence of the
required documentations which they promised to provide later on. SAA noted the
recommendation for future improvement.
7. We noted in our review of payments that quotes for purchases were either not sought or not
filed for some payments. SAA is committed to obtaining three quotes from its suppliers.
8. An amount of $743,235 has been sitting in the current liability account as payable to the
Ministry for Finance (MOF) of which, according to MOF, they have no record of (awaiting
confirmation from MOF). It would be good to have a final determination on this unsupported
The audit discovered that the Ministry for Revenue has been receiving from the Ministry of
Finance cheques to offset GST liability of SAA determined in an MFR audit for the period
ended April 2009. The audit recommended that SAA takes note and investigate as it appeared
the payments have exceeded the GST liability and SAA agreed to investigate further and
action the recommendation.
9. We found from our review of Board Minutes that a number of Board Minutes were missing.
None of the board minutes available were signed by the Chairman of the Board. SAA later
advised that the minutes were available for sighting but the audit was not sure whether they
were in fact correct. SAA stated that a new staff member had been recruited to assist with
the Board with minutes and other Board tasks.
10. We noted that the airspace income was not paid by the MOF as per usual of $20,656 per
month totalling $248,348 for the year but was paid in lump sum at$241,391.34 for the year.
The payments were made as a portion of airspace usage paid by various airlines and the
agreement was made about 10 years ago. MOF made these payments toward the Authority's
loan with NPF where it was then identified via the NPF loan statement and posted into the
Authority's system as airspace income. There was no record of an agreement with MOF on
what constitutes this payment and what the reason for the decrease in payment was for
this year. The recommendation was noted and SAA had advised that MOF had been updating
its loan repayment for the past 2 years.
11. The audit raised again the issue of a withholding tax credit of $81,800 carried in the
Authority's books for over five years and has not been claimed from the Ministry for Revenue.
This was raised in the previous year's internal control memorandum but the issue has not yet
been addressed. The recommendation was noted and the Authority already wrote to the
Ministry regarding this amount.
12. Interest earned during the financial year on term deposits held with one of the Banks had
withholding taxes deducted. The Authority already discussed this with the Bank and noted the
matter for future reference and rectification.
13. We noted from our testing of long service leave cards that that long service payments were
not recorded (ie. removal of the long service leave entitlement) in the long service leave card
as was usual practice: The human resources overlooked the updating of leave cards even
though the copy of the payment voucher was filed in the personal files. Recommendation was
noted and the Authority has assured that the leave cards would be updated once payment
14. The audit noted the confusion by SAA over the Labour and Employment Act and its own
policies. The confusion arose on the policy to forfeit untaken annual leave where SAA argued
the use of the Act as overriding the policy. The Labour and Employment Act is for all
Employers not operating under its own Act or under the Public Service Act.
15. A lot of errors were noted in the calculation of provision for leave and even leave entitlements.
SAA has committed to rectifying the problem and so it should because of its financial impact
on its finances.
16. We noted that the fixed asset register has not yet been completed. As set out in the
accounting policies s2.10, all fixed assets should be recorded in the fixed asset register and the
details should include name, model, model number, classification, supplier etc. At present, the
fixed asset schedule is updated on a monthly basis and reconciles to the MYOB General
Ledger accounts. The recommendation on the Fixed Asset Register is noted and the Authority
will ensure regular update of the Fixed Asset Register.
17. We noted that the White Toyota Hiace 15 seater van has not replaced its private license plate
number "16061" with the Authority's license number as registered with the Land Transport
Authority of "AA13". This van was purchased on the 29th June 2012 and has been used by the
Authority since then. The reason why the private plates were used was due to the LTA running
out of AA license plates. The Authority had just disposed an old van and its plate is now used
to replace the private plate .
4.24 Samoa Airport Authority for the financial year ended 30
1. Payments were processed without the required three quotes to support, and without
the General Manager’s signature of approval. Audit recommended that procedures
must be complied with, or else review policies to relieve the General Manager from
approving certain amounts, or an authority schedule with delegated authority to
other members of the management to ensure compliance and proper maintenance of
policies. SAA responded that, at the time, it was under immense pressure to complete its
preparations for the SIDS conference in time. These included major refurbishment, building
new structures and painting of the terminal and office buildings. Some of these works
involved direct quotations from suppliers that had the necessary materials when needed,
with some being the only suppliers with available materials at the time of acquisition. Some
payments relating to runway lights and rescue fire vehicles could only be procured from
usual overseas suppliers. Some were preferred for their specialist nature. SAA also explained
that some were regular suppliers that were difficult to obtain quotes for especially since
they supply regularly using their price lists. The quality of products and services are also
used to determine the suppliers. SAA has noted the recommendations and the procedures
in the manual will be amended accordingly to build in flexibility especially when various
scenarios are encountered.
2. Payments were made to contractors without any signed contracts. None were available
during the interim audit. Audit recommended that contractors must have signed contract
agreements, and to have these filed securely. Contractors for SAA should also be registered
with the Ministry for Revenue to enable SAA to claim VAGST, and for transparency purposes.
SAA understands that the recommendations are very valid, and again cited SIDS conference
preparations and, under time constraints, it was forced to adopt the methodologies of single
source selection and cost, quality based selection with suppliers, with terms and conditions
discussed and agreed to prior to start of their work. Costs were also assessed as significantly
lower compared to market rates and the high quality of work produced. Nonetheless,
contracts for works or services for SAA have been re-enforced.
3. Issues with payment vouchers:
Receipts from suppliers were not attached to payment vouchers. All payment
vouchers must have receipts to confirm payments being made, or other source of
confirmation. SAA replied that there were situations where suppliers did not have
their receipt books on hand when uplifting their cheques. Given the distance of
the airport from Apia, cheques were released to supplier who signed on payment
voucher to acknowledge receipt of payment.
Payment vouchers were without proper signed approval. We recommend
that all payment vouchers must followed appropriate procedures to prevent risk
of making phantom payments to phantom suppliers. All payment vouchers are
checked, certified and approved by authorized personnel before the cheques are
uplifted by suppliers. In terms of general supplies, the initiatives to process
payment are with the Finance Unit. The Finance Unit will process payment once
the goods are supplied and all the documentation is done. For contractual
payments, they will only process payment upon receipt of instructions to pay.
Payment vouchers were not properly filed. It costs both us and the Authority time
in trying to locate files requested for Audit We recommend that all payment
vouchers must be filed in a chronological order on a timely basis to avoid delayed
matters or issues when requested by auditors or authorised personnel.
Management Responses: Most of the files were properly filed. however, at times,
some files are pulled out for review purposes and got misplaced in the process.
Recommendation is noted and our filing staffs have been reminded of their
responsibility of ensuring the safe keeping of payment vouchers.
4. There was a variance between the Master receipts book against departure tax reconciliation.
A fraud case Maota Airport Savaii, involving senior security where total collection recorded
was $6,610 against the receipt book of $2,060. Audit findings verified the occurrence of
fraud on departure taxes. SAA explained that this matter was reported by the cashier when
he went to Savaii to collect the cash from Maota Airport. An internal investigation was
carried out to confirm the people involved. The report identified the Supervisor as the sole
culprit in this activity and was instructed to repay the full amount which he did within the
same week. His services were also terminated at that time. Remedial action has been taken
whereby all cash collected at Maota will now be banked directly from Savaii on a daily basis
to eliminate cash being held in the office overnight.
5. Issues relating to the car park ticketing system:
There was no summary of receipts attached to the master receipt book. SAA replied
that this was a one-off occurrence, and that receipts were now attached to Cash
Cash count for the financial year ended 30 June 2014 noted a variation between the
actual cash count and receipt summary printed out from the electronic ticketing
system. All three machines’ cash boxes actual cash count noted a shortage. SAA
replied that the new car park ticketing system was operational in May 2014. There
were some problems when the system first operated. Some of the problems included
incorrect change to customers, incorrect reports generated by the system due to the
system been cleared every time the door of the vault is opened to clear jammed
notes, and problems related to the poor quality of our notes.
Weaknesses identified in the internal control and for management to raise red flag on
- No daily collection of cash from the new ticketing system.
- Jammed notes can only be receipted once they are replaced from CBS, two to three
days after the collection date.
SAA explained that management made a decision when the equipment was first installed that
it will be emptied on a weekly basis, not daily. The capacity of the equipment to hold cash can
be up to 3 weeks. The keys to remove and open the cash vaults are with the AGM - Finance.
The technicians only had the keys which open the door of the equipment. The technicians are
responsible for the maintenance of the machine. They do not have access to the cash box but
they do have access to the jammed notes. SAA said it could not receipt any money which they
did not have on hand, otherwise the receipts would be more than the banking. They had to
wait until the torn paper money was replaced. There was also no guarantee that all the torn
money would be replaced by the Central Bank.
6. Cash receipts were not being deposited on a timely basis. The cashier accumulates cash
receipts in a ticketing System and makes weekly deposits. SAA said that all their daily
receipts were banked on a daily basis. The cash in the ticketing System was only receipted
and banked when the vaults were opened once a week. No one has access to vaults without
the keys held by AGM-Finance. AGM-Finance alone cannot access the vaults as keys to open
the equipment doors are with the technicians.
7. Receipt summaries were not properly signed by appropriate personnel. SAA replied that
officers may have missed signing the summary but that they had already checked and
signed off on the Lodgement and Receipt books.
8. Although audit was advised that all bank reconciliations were approved by a responsible
employee, no indication of such review was evident on the reconciliations selected for
review. SAA replied that reconciliations were done quarterly, monthly and bi-annually. A
review of reconciliations, as recommended, has been noted by SAA.
9. At present, the details of the bank reconciling items are preserved for three months and
then are destroyed. Some are misplaced. SAA stated that bank reconciliations for the full 12
months of the financial year were filed in one file. Separate files contain bank reconciliations
from past years, and that it kept its records for 10 years. SAA agreed that some are
misplaced at times, but they do not any of their records.
10. Some cheques drawn on one account had been outstanding for long period of time; some
for a year or more (stale cheques). Several of the long outstanding cheques require special
attention. SAA has noted the recommendation.
11. Account Receivables Ageing did not match the General Ledger. Itemized statements for
customers were requested, but these accounts could not be reconciled. This indicated no
reconciliation on a timely basis of the General Ledger. Management should determine the
underlying reason for the $15,652.85 difference and should take steps to correct current
procedures. In addition, management should develop procedures to ensure that differences
are identified, researched, and resolved on a timely manner. SAA responded that all
subsidiaries including staff debtors are linked to the main General Ledger but because it has
a separate General Ledger for Staff Debtors.
12. Audit discovered negative balances in the trade receivables ageing summary. This also
shows no evidence of General Ledger being reconciled on a monthly basis. SAA said that
these credit balances did not mean that accounts were not reconciled. The credit balances
represent overpayment by customers usually those who paid their accounts through the
banks. The variance was a result of the changes in the exchange rate. These credits can be
used later to offset some of their outstanding invoices if required.
13. One accounts payable’s records did not agree with confirmation from SAA. Audit sent out a
request to the creditor to confirm the amount owed by SAA, and they disputed the amount
on SAA records. This again indicated lack of monitoring and reconciliation on a timely basis.
SAA stated that its payments were based on purchase orders issued plus the invoices on
hand. SAA is aware of the variance but maintains their records are correct as the creditor
could not provide the relevant purchase orders to justify their outstanding balance.
14. There were number of long outstanding accounts receivable balances. Management should
continue to monitor accounts receivables on a timely basis. SAA clarified that its Debtors
Balances and Debtors Report are provided to the Board of Directors’ monthly meetings and
also to its Audit Committee meetings. Audit recommendation has been noted and SAA will
continue to monitor debtors’ accounts as suggested.
15. Accrued interest on term deposit was overstated.
16. Discrepancies were found between the recorded balances of fixed assets and the recorded
gains and losses on disposals and the amounts per the detail schedules maintained. SAA has
noted the recommendations and that adjusting journal entries and fixed assets
reconciliations have been sent to the auditors.
17. There were variances between the fixed assets register and the General Ledger. This
indicated that there was no reconciliation done on a timely basis. SAA replied that the
reconciliations of individual Fixed Asset Ledgers were done on a monthly basis. However,
given that expenses were tidied up during monthly financial reports, the Fixed Asset Ledgers
were also updated. The Fixed Asset Schedule was updated to match the reconciled Fixed
Asset Ledgers before it was submitted to the auditors. The audit recommendation is noted.
18. Recruitment of staff was done without following proper procedures. SAA explained that
most of the employees noted by audit had been employed for more than 10 years and had
come through the process of application, interview and approval. Since then, some had
been transferred to other departments. Only one of those identified by audit was directly
appointed on a request by the Board due the need for a person to translate, collate and
write-up minutes, submissions and resolutions. This person had specific skills as a journalist
and was seen as the ideal candidate for this position. There was only one Executive Assistant
to the GM, one for Board communications and one for contingency needs of the GM’s
19. Staff members previously terminated were reinstated by SAA. SAA replied that it had a
robust recruitment process in place and that it’s General Manager, as approved in the
Administration Manual, had the final discretion in a lot of the recruitment and any lay-offs.
One employee re-hired at SAA could not prove beyond reasonable doubt accusations
against her and felt that she was unfairly treated given the circumstances of the case. The
other employee was never terminated.
20. There were numerous adjusting entries in the accounting system at the time of the audit.
These entries impacted on net income and retained earnings and resulted in changing
drafts of accounts many times. These entries should have been done during month end
procedures to save time. A review and evaluation of transactions and proper monthly
closing procedures would expedite the year-end closing and reduce audit time and fees.
SAA clarified that end-of- month adjusting entries were based on estimates, like
depreciation and accrued interest. Correcting adjustments are made at year end to correct
any over- or under- provision.
21. Many journal entries lacked proper approval by responsible employees. Explanations
accompanying the entries were inadequate in many instances. SAA said that journal entries
were only processed on the instruction of the Finance General Manager, and the
recommendation is noted for clearer narrations.
22. While SAA prepared quarterly financial statements, all required adjustments were not always
made in the quarterly statements on the same basis as in the audited year-end financial
statements. SAA said that its quarterly reports were prepared based on the information in
the system which they believe to be accurate at the time the report is prepared. It
incorporates all the adjustments which are done on the monthly basis. Provisions and
accruals are based on estimates for the purpose of monthly reports but adjusted again at
the end of the financial year to reflect the actual amount for the year.
23. Close personal relationships exist within SAA. Management must take this issue into
consideration and determine the risks associated. SAA clarified that it was an SOE and that it
was not required to apply PSC requirements. SAA operates under the Labour and
Employment Act. In the cases highlighted by audit, the SAA Administration Manual
approved in 2012 specifically prohibits couples, father, mother and direct off-springs to
work together at the SAA. It must also be highlighted that the couples mentioned were
originally recruited as individuals but married before the policy in the Admin Manual was
put in place. It is management’s view that as long as there were no adverse impacts to the
performances of their duties, then they would continue to be employed together but
monitored strictly for any unwanted work complications. SAA said it was proactive in other
ways to prevent future cases from occurring.
24. Departure taxes collected by banks were to be credited into SAA bank account after they
were checked and reconciled by the banks at the end of each day. The majority of unbanked
receipts had no records of correspondence exist between the client and one of the banks.
SAA said it was working with said bank to clear these outstanding deposits as soon as
25. VAGST returns for the year 2014 were not filed until January 2015. SAA explained that VA
GST Returns were file on time but since SAA had a VAGST credit, it notified MOR and made
arrangements for the supporting documentation to be supplied at a later date.