Mismanagement issues addressed: S.P.A.

The Samoa Port Authority says it has already addressed a number of problems of mismanagement uncovered by the Audit Office, including not enforcing policies on late payments. 

Identified violations of financial policies, including allowing customers to improperly run up credit, are contained in the Audit Office’s fiscal report for 2018-19 recently filed in Parliament. 

“A written reminder on the Corporations invoices sent to [the] customer for prompt payment in seven days or interest will be charged has not been enforced,” the report states. 

“And the policies and procedures relating to this area [are] yet to be enforced.”

The auditors also found, through a review of the S.P.A.s trade debtors, that official financial procedures about allowing customers to run up credit are yet to be implemented. 

“New customers do not have approved credit limits. We recommend management to comply with policies,” the report found. 

“Management agrees with the recommendation and is also currently reviewing the accounting manual.

“[The] Accounts Receivable aging report as at 30th June 2018 shows that 38 percent of debts are more than 90 days old. Management responded that the majority of these accounts are for new shipping agents while 24 percent are now with the courts for further action. Financial Procedures Manual will be updated.” 

Auditors also highlighted the need to amend the S.P.A.'s Financial Procedures Manua to reflect the oversight role of the authority’s Board “which is separate from that of the management, especially in the area of co-signing cheques for operational purposes.” 

“Invoices from suppliers to be paid by the Authority needs to be stamped promptly as already been paid and posted to minimise the risk of double payment,” the report states. 

In response to questions from the Samoa Observer, the Chief Executive Officer, So’oalo Kuresa said the audit issues raised by the Auditors have been addressed. 

“The Accounting and Finance Policy Manual 2020 has been completed and approved by the Board that covers Credit Limits, Aging Debtor Management, Boards oversight role and handling of invoices as raised,” he said.

“All these issues raised are for further improvements of systems and processes for the safety and security of S.P.A. assets.” 

Below the relevant part of the Audit Office's report excerpted verbatim:

1. A written reminder on the Corporations invoices sent to customers for prompt payment in 7 days or interest will be charged has not been enforced. And the policies and procedures relating to this area is yet to be enforced. Management has agreed that such interest will be enforced in the future.

2. Our review of trade debtors noted that Section 14 of the Financial Procedures Manual relating to approving Credit Limits for Customers has not been implemented properly. As new customers do not have approved credit limits. We recommend management to comply with policies. Management agrees with the recommendation and is also currently reviewing the accounting manual.

3. Accounts Receivable aging report as at 30th June 2018 shows that 38% of debts are more than 90 days old. Management responded that majority of these accounts are for new shipping agent while 24% are now with the courts for further action. Financial Procedures Manual will be updated.

4. The Authorities Financial Procedures Manual needs to be amended to reflect the Boards oversight role, which is separate from that of the management, especially in the area of co-signing cheques for operational purposes. Management will work on recommendation.

5. Invoices from Suppliers to be paid by the Authority needs to be stamped promptly as already been paid and posted to minimise the risk of double payment, as per Section 8.4 of the Financial Procedures Manual. Management is currently reviewing the procedures and improvements will be in place.

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