The White Sand Casino, majority owned by Samoa's financially enormous state-owned pension fund, failed to pay its $250,000 licensing fee for the 2016 Financial Year and somehow escaped a 20 per cent late payment penalty, an audit has shown. 

The White Sand Casino operates out of the Sheraton Samoa Beach Resort.

A company filing for December 2016, in the middle of the year of the audit report in question, identified the Samoa National Provident as a 56 per cent majority shareholder. Other shareholders included the Samoa Airport Authority which then held an 8 per cent stake, various private investors, and business interests such as Digicel which held a small 0.3 per cent stake. 

But despite the combined wealth of its shareholders, the Controller and Auditor General, Fuimaono Afele Taimalelagi uncovered the fact the authroity could not stump the $250,000 licensing fee during his Audit for the 2015-2016 Financial Year which was recently obtained. 

"The penalty charge of 20 per cent for late payment has [not] been imposed," Fuimaono's report concluded.

"The penalty fee could be waived upon board approval but there was no evidence for such as board minutes remain outstanding as the end of the audit field work."

The Gambling Control Authority Chief Executive Officer, Tuala Siaki Tuala, the head of the Authority that collects the licence fee, confirmed to the Samoa Observer licensing fees was paid after the mandated time frame. 

Tuala declined to comment any further on the matter other than confirming the licensing fee was paid in “installments” at the time. 

“We have issued our response and it should be in the [audit] report,” he said. 

Repeated attempts to contact the C.E.O. of the S.N.P.F. were not successful this week. In 2018 the firm, which compulsorily collects pensions from employers, said it had assets under its control in excess of $580 million. The total received from members included $65 million that year. 

The Samoa Observer makes no suggestion that the senior leadership of the S.N.P.F. were been involved in the day-to-day operations and legal affairs of one of its many investments.

According to the Audit Report, licence fees are imposed annually and there is a penalty charge of 20 percent for late payment has neither been imposed.

“Section 36 of the Casino and Gambling Control Act provides that license fees shall be paid within fourteen days of the approved date. 

“The penalty fee could be waived upon board approval but there was no evidence for such as board minutes remain outstanding as the end of the audit field work,” says the report. 

Other issues noted by the Auditor include Christmas hampers which were funded by G.C.A. to the value of $2,500. There was also the issue of board refreshment expenses averaging more than $400 per meeting.

“Light refreshments are encouraged across government corporations as a cost saving initiative,” noted the auditor. 

The Auditor General also took issue with inconsistent record keeping across the Auhority. 

"Board minutes; approved budget; annual report and bank confirmations for Samoan tala and USD were not received," the report complained.

It said the organisation that year operated without an annual report and transactions that required Board approval from the Board could not be confirmed. 

The Samoa Observer’s questions sent to Tuala on the other aspect of the report were not responded to as of press time. 

The full audit report for the year ending June 30 2016 is reproduced below./2016

1. In reviewing Gross Gaming Revenue (GGR), it was noted:

• There were monthly settlement statements for the GGR calculation unsigned by the representative personnel of the Casino operator
• Lack of checks conducted to verify the correctness of the 15% GGR charged and received on the gross collection of the casino operators.
• Delay of commission settlement when legislation requires payment within following month
• Monthly settlement statement’s whereby the 15% commission is calculated covers the period from 4th to 3rd of the following month. For cut off purposes and ease of reference, audits recommend using the month period of 1st to the last date for commission charges.

2. There were instances of delayed posting and banking of cheques for GGR commission. Although cash inwards are made by cheque, prompt collection of GGR and prompt banking to avoid losing or misplacing the cheques and ensure they are reflected in the correct period they were received.

3. The White Sand Casino license fee for Financial Year (FY) 2015/2016 of USD$100,000 has not been paid. Licence fees are imposed annually hence a license fee for FY 2016/2017 would also be issued. The penalty charge of 20% for late payment has neither been imposed. Section 36 of the Casino and Gambling Control Act provides that license fees shall be paid within fourteen days of the approved date. The penalty fee could be waived upon board approval but there was no evidence for such as board minutes remain outstanding as the end of the audit field work.

4. Guest’s referral cards invoices to White Sand Casino have been long outstanding and not recovered.

5. There is no aging report for accounts receivables to monitor and keep track of the outstanding balances.

6. There were payments processed with incomplete documentation as well as a lack of authorised signatories of approval.

7. Christmas hampers were supposedly funded equally by GCA and Samoa Sports Lotto Agency (SSLA) but have been fully funded by GCA instead at a value of $2,500. It is important that expenditures are well reflected separately and properly accounted for. Totalisator Agency Board (TAB) is acting for the Authority until such time we recommend that the processes in place over the monitoring and costs sharing are re-enforced.

8. Board refreshment expenses were more than $400 per meeting. Light refreshments are encouraged across government corporations as a cost saving initiative.

9. Audit review of inter-entity transactions noted that the opening balance of the accounts payable (as per GCA accounts) did not match the audited closing balance of SSLA 2015 accounts receivables. There is a variance of $1,645 understating the accounts of SSLA. Reconciliation had been re-performed and SSLA had taken note of the issue for its audit currently taken place.

10. Annual leave forms within personnel files were not endorsed by the appropriate officer to signify that absences have been approved. 

11. ACC 1% charge amounting to approximately $800 for the two inspectors was not journalised and recorded in the general ledger thus an understatement to the expenses.

12. The authority has not appointed an external auditor to audit the accounts of the casino operators as per legislation. The casino has been in operation since 2014 and has not been audited.

13. Board minutes; approved budget; annual report and bank confirmations for Samoan tala and USD were not received. Audit was advised there is no annual report. There were major transactions within the period that would require approval from the board could not be confirmed. 

14. TAB acting as the Authority for the GCA was further extended for two additional years as per Casino and Gambling Control Amendment Act 2015. The first appointment for two years take over was done in 2012. There are numerous inter entity transactions between the GCA, SSLA and TAB. The administration of the GCA employs the staff of SSLA apart from the recent recruitment of inspectors for casinos. The Chief Financial Accountant and Finance team of SSLA deal with the administration and financial accounts of CGA. The Chief Executive Officer (C.E.O.) for SSLA is also appointed CEO for GCA for the time being and is paid equally by both authorities. There is lack of segregation of duties as responsibilities pertaining to the accounting and administration are mostly done by one employee, such as performing reconciliations, payments preparation, processing and recording as so forth. The GCA expenditures are paid by the SSLA and reimbursed later. Although this practice is efficient as advised, there still are some issues arising in this area such as lack of reconciliations. While the authority is still under the control of TAB, audit recommends that the transition of the separation and future plans is moving forward. Proper reconciliations are put in place for inter entity transactions as well as with the segregation roles and responsibilities.

15. Although the approval of the budget was not confirmed, there were overspending and underachieved revenues projected as per budget comparison report contained within the Financial Statements.