Overdrawn accounts, unclaimed debts loom over finance Ministry

Government finances are plagued by overdrawn bank accounts and unclaimed debts totaling millions of tala, an audit presented to Parliament this week has found. 

The Audit Office report for the fiscal year 2018-19 uncovered the extent of overdraft facilities in Ministry of Finance accounts dating back to 2017.

In that year, the audit report found that the Ministry’s General Disbursement account amounted to more than $12.4 million.

The Audit Office said that the management of finances reflected the Ministry’s drive to decrease its overdraft facility in the general disbursement account, which they achieved by 21 per cent in the year in question. 

“However, management noted the [Audit Office] recommendations and will continue to monitor their cash flow,” the report said.

But by the following year, the Ministry’s General Disbursement account’s financial position had not significantly improved. 

The account remained overdrawn to the tune of more than $12.2 million, the audit report found. 

Meanwhile, uncashed or “unpresented” cheques written by the Ministry to suppliers of goods and services, some of which dated back years continued to loom over the Ministry’s accounts.

In 2017 the total financial burden of the Ministry's unpresented cheques had reached some $1.8 million. But the following year this figure had grown to reach $2.3 million.

Some of the unclaimed money dated back as far as 2015, the report found.   

“Management highlighted that there has been a decrease in the amount of unpresented cheques since September,” the Ministry said in its official response to the Audit Office report. 

“However [the] recommendation is duly noted.”

The Samoa Observer contacted the Ministry’s Chief Executive Officer, Leasiosiofaasisina Oscar Malielegaoi, with questions about the issues raised by the audit but did not receive an answer by press time.

Another potential loss to Government revenue came in the form of outstanding balances to debtors to the Ministry longer than 180 days, the report found

In response the finance Ministry’s management noted that they would take the recommendation on board and follow up on recovering the debtors' outstanding balances.

The auditors also criticised the Ministry for its inconsistency in accounting practices, which did not not conform to standards for public sector accounts. 

“The presentation of the Quarterly statements did not conform to the Public Accounts for consistency and comparability of the government’s financial reports,” the report read. 

“Management noted that recommendation and highlighted that the presentation of the Quarterly Statements changed only for [the 2017 Financial Year] due to their efforts in its reform program.”

The Audit Office noted further inconsistencies in the finance Ministry’s record-keeping between accounting systems.

“Outstanding debtors for [the Ministry for Revenue] were disclosed in the Quarterly Statements but not recorded on the Finance One system,” the report states.

“Inclusion of non-Inclusion of non-cash related journal entries to reverse errors in the balances of inflows and outflows of schedule 5, which should have been excluded from the cash receipts and payments.

“Total ministry receivables as of 31st March 2018 were $7.4m. The majority of these debtors were more than 180 days old and there is also non-compliance of Quarterly statements format to the Public accounts.”

The auditors found that the inconsistencies amounted to breaches of the International Public Sector Accounting Standards requirement of the Public Financial Management Act. 

Last year the Ministry made an effort to have businesses recoup money owed to them in order to clear its accounts.

The finance Ministry took to social media to ask nearly four hundred businesses and individuals to collect their money.

The initiative followed urging from the Chamber of Commerce and Industry for the Government to clear its debts and help the private sector during the coronavirus pandemic. 

On Facebook, the Ministry posted a list of approximately 375 names of people who were entitled to unpresented cheques and urged them to come to the Ministry and collect their money. 

Among the names of unpaid businesses or individuals were former Samoa Tourism Authority Matatamalii Sonja Hunter, the Tamauu Salelogoa Rugby Union, Vaiula Beach Fales and nurse organisation Tausi Soifua Agency.

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