NLA has uncollected debts of $26m – auditor general

The 2022 Annual Report of the Pamela Monroe Ellis-led Auditor General’s Department was tabled in Parliament on Tuesday.

The following are excerpts from the report which highlights several issues the auditor general flagged during her audit of the ministries, department and agencies.

Ministry of Economic Growth and Job Creation – National Land Agency

Long outstanding accounts receivables and advances

The National Land Agency (NLA) did not have an effective system in place to reduce the risk of financial loss arising from uncollected revenue. Accordingly, NLA had receivables/uncollected debt of approximately $26.77 million, that remained outstanding for up to seven years. Additionally, we identified variances of $3.4 million between the accounting records and financial statements, for the periods under review.

We saw no evidence that NLA’s receivable/debt collection management was guided by a collection policy. Further, in keeping with the accounting standards, we found no evidence that NLA conducted periodic assessments to determine the collectability of these outstanding amounts. As a result of NLA’s tardiness, there were uncleared advances for up to seven years with a remaining balance of $21.03 million at March 2019. Also, NLA did not obtain the requisite supporting documents to clear staff advances totalling $69.21 million as at March 2019.

In response to this concern, NLA advised that several of these advances relate to imprests for ongoing projects that will have to remain open until the projects are completed. However, NLA did not present the requested information to validate this representation.

In a context where these advances have been outstanding for over seven years, and the requisite documents to substantiate the clearance were not obtained, we were unable to determine whether the amounts advanced were used for the intended purposes. This breakdown in NLA’s control environment over the management of public resources exposes the Agency to financial losses and the provision of erroneous financial information to its stakeholders.

The NLA has since advised that legal action will be pursued against the debtors, and the Agency will be seeking the intervention of the permanent secretary to aid in the recovery of the outstanding balances.”

Recommendation

Management was advised to undertake a thorough review of NLA’s accounting and financial operational processes with the aim of implementing proper system of control that will ensure accurate and timely preparation of the financial statements and accounting records.”

Office of the Prime Minister - Youth Employment in the Digital and Animation Industries Project

The audit of the accounting records and financial transactions of the Youth Employment in the Digital and Animation Industries Project for the closing out period, April 1, 2021 to November 30, 2021, revealed the following area of concern:

Project targets not achieved as planned

The project achieved only two of the six targets planned for the period. Of the remaining four activities, two targets were partially achieved and two were not achieved at the period-end due to delays experienced in the completion of project activities commenced in prior periods.

Management Institute for National Development

The audit of the accounting records and financial transactions of the Management Institute for National Development (MIND) for the financial year 2021/2022 revealed the following areas of concern:

Inadequate Management of Accounts Receivable

MIND has an increased exposure to losses due to substantial accounts receivable relating to its core services of approximately $217.3 million as at March 31, 2022. Of this amount, management made a provision for doubtful debts of $178.81 million. Additionally, the accounts receivable balance included unsupported credit balances totalling $15.91 million spanning from the period 2005 to 2022. MIND has since requested the Ministry of Finance’s approval to write off its bad debts and to offset all unsupported credit balances. The agency awaits the ministry’s final approval to determine the extent of the write-off.