Auditor queries Samoa Airways staff benefits
The Auditor-General has raised questions about Samoa Airways’ practice of granting employees’ relatives half-price tickets.
The Auditor-General and Controller, Fuimaono Afele Taimalelagi, in his report for the 2018-2019 Financial Year, raised questions about benefits provided by the Government-owned national carrier.
The Auditor noted that, in the airline’s Human Resources Manual, the benefit is explicitly approved by the airline’s Chief Executive Officer as a staff perk.
“However, it was also noted that this concession was extended to family members,” the report found.
The Samoa Observer contacted Chief Executive Officer, Seiuli Alvin Tuala, for comments about the findings via email but has not received a response as of press time.
But the audit report, tabled initially in Parliament in March, acknowledges that the airline’s management is currently reviewing the validity of this policy.
Other issues outlined by the Auditor include the need for the airline’s finance policies to be updated.
“This is to reflect the change in organisational structure and size since the inception of the jet operation,” the report said.
In response to the Auditor’s concerns, the airline’s management agreed to review a number of matters, including: the delegation of authority; procurement guidelines; proper use of vouchers for expending cash float money; petty cash procedures; proper handling of asset disposals; taxation of directors’ fees and reconciliation of debt accounts.
“There were missing or misplaced receipt books for the Apia main office for July, August, October, November and December 2017,” the airline said in its official response.
“Management will work on improving their filing practices.”
The Auditor also found the airline’s review of monthly bank reconciliations showed lapses in review procedures for the reconciliation of foreign bank accounts.
“Management has agreed to improve their processes as well as recruiting extra staff,” the Auditor wrote.
Fuimaono said that during the Auditor’s review of year-end financial reconciliation that some accounting entries had not been properly reconciled to supporting documents.
Among the ledger entries to be affected were accrued expenses, provision accounts and associated expenses such as fees for directors and audit fees.
The relevant section of the report - into the airline’s holding company Polynesian Airlines Limited - is printed verbatim below.
Polynesian Airlines Limited for year ended 30 June 2018
1. Finance Policy needs to be updated to reflect the change in organisational structure and size since the inception of the jet operation. Management has agreed on reviewing to include:
· delegation of authority;
· procurement guidelines;
· proper use of vouchers for expending cash float money;
· petty cash limit & handling;
· having vehicles plates with corporation initials;
· proper handling of asset disposals;
· timely update of Fixed Asset Register;
· proper management of obsolete stock/inventory items;
· Taxation of Directors Fees as per Income Tax laws; and
· Posting and Reconciliation of Debtor Accounts.
2. There were missing or misplaced receipt books for the Apia main office for July, August, October, November and December 2017. Management will work on improving their filing practices.
3. Review of monthly bank reconciliations indicated that the preparation and checking of bank reconciliations for foreign bank accounts were not performed properly. Management has agreed to improve their processes as well as recruiting extra staff.
4. Shortage of staff has led to some routine reconciliation of Ledger balances not being carried out properly. Management has agreed to hire extra staff.
5. As per section 10.2 of the Human Resource Manual, the CEO is able to approve employee entitlement of a travelling concession of 50% of airfare. However, it was also noted that this concession was extended to family members. management is currently reviewing the validity of this policy.
3.14 Polynesian Airlines Investment Limited for the year ended 30 June 2018.
1. It was noted during review of year end reconciliation that some ledger reconciliations were not properly reconciled to supporting documents. For instance; accrued expense, provision accounts and associated expenses such as directors’ fees, audit fees and maintenance. Recommendation is noted.
2. The Land and Building category is measured using the revaluation model and the latest revaluation recorded for Fagalii property in the general ledger was performed in 2008, which was 10 years ago. A proper revaluation will be carried out in the current financial year and will be submitted to the Board first for approval before the revaluation balance can be recorded.
3. There were mis-postings of Journal entries due to errors with the formulas in the excel templates used in work papers. Recommendation is noted.