Full report
4.5 New vehicle security registration number plate revolving fund 2013 and 2014
The Fund was established to import blank registration plates of the specifications stipulated in the vehicle registration and licensing regulations and incidental materials, for production of vehicle registration number plates and sell to vehicle owners. The Fund in both years received adverse opinions which are an indication that there were material misstatements which render financial statements unreliable. This state of affairs is of great concern to the Committee as those entrusted with public funds should exercise due diligence and care and instil public confidence. Below are the issues which gave rise to adverse opinion.
4.5.1 Failure to maintain ledger accounts for sale of Number plates, 2013
The Audit observed that the Fund did not maintain individual ledger accounts for sales realised by 32 agencies while some agencies did not submit monthly sales returns or receipts together with bank deposit slips to facilitate reconciliation of the sales figure. There were indications from monthly sales returns received from agencies that some number plates were cancelled. However, a schedule of the returns inwards for cancelled number plates was not availed for audit verification. As a result, the sales figure of $16 275 058 disclosed in the financial statements could not be validated. The situation did not improve in 2014 where the sales figure was $17 473 239.
Failure to carry out monthly reconciliations can result in errors going through the system undetected and such an environment is also conducive for fraudulent transactions.
The Permanent Secretary informed the Committee that the 2013 and 2014 figures had since been reconciled and were included in the re-casted financial statements which were submitted to the Auditor General’s office. To curb future recurrences, the Ministry now make use of its internal audit to carry out periodic audits which cover receipting and banking against sales just to ensure that if there are any discrepancies, they will be immediately attended to. The Ministry also has made it mandatory for all agents to submit sales returns together with the duplicates receipts and the deposits slips on a monthly basis and in the event an agent failed to comply with the directive, officials are dispatched to go and collect the documents. The Committee was satisfied with the measures taken to address the observation.
4.5.2 Absence of detailed stock takes procedures, 2013
The Audit observed that the Fund did not have detailed stock take procedures to provide guidance to officers. The Fund had a checklist that was not comprehensive enough to highlight condition, quantity and value of inventory on hand. No consolidated report was produced on the outcome of the stock take exercise conducted at year end. As a result, auditors could not confirm whether, the inventory disclosed in the financial statement with a value of $3 273 246 was accurate.In the absence of comprehensive stock take procedures, there is a risk that values of closing inventory may be manipulated.
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