Real Time Consulting (RTC), chartered certified accountants and consultants, have urged the National Accreditation and Quality Assurance Authority (NAQAA), to employ more Internal Audit Staff including a Manager, for more efficiency and effectiveness.
This was revealed last Wednesday May 15th 2019, during its presentation before the National Assembly Select Committee on Education, Training and ICT. RTC who audited NAQQA's audit report and financial statement for the year ended December 31 2017. Real Time Consulting stated in its management letter to the authorities that NAQAA has only one Internal Auditor at their Audit Department, whose rank is Assistant in the new organogram.
"The employee number is grossly inadequate to enable an effective and efficient auditing of the Authorities' transactions and governance issues. And the rank of the Internal Auditor, though reporting to the CEO, does not give the incumbent adequate authority to leverage within the organization and perform his functions," RTC stated.
The management letter said the lack of a good and adequate internal audit team, exposes the authority to weak controls and non-compliance to procedures and policies, which can lead to fraudulent activities undetected on time. In response to the recommendation, NAQAA's management recognized the importance of an Internal Audit as an assurance mechanism that will strengthen the unit.
Accounting Operating System
RTC in 2016, said they highlighted the urgent need for the management of NAQAA to codify their general ledger accounts (trial balance); but that work on this is still in slow progression, saying some accounts are coded while others are not; that the authority is therefore reminded that maintaining a comprehensive chart of accounts which differentiates income from expenditure, and assets from liabilities, etc., is a fundamental aspect of any accounts operating system. "Coding helps in the case of referencing accounts nomenclature, and avoiding frequent errors in postings. Coding of chart of accounts is universally applied and therefore cannot be avoided. Lack of coding account names may cause wrong postings which may not reflect the 'true and fair' view of the financial statements, especially in the area of budgetary monitoring and control," RTC said; that therefore, they recommend NAQAA without delay, to complete a comprehensive coding system for its chart of accounts and adopt it for all transactions.
The management in its respond said their chart account is tailored to suit previous years audit recommendations which is serving the purpose of completing the expenditure request form, as well as informing the recording of transactions in the ledgers. "What is outstanding and is work in progress, is the modification of the default codes that came with our recently installed accounting software. This will be completed shortly," the Management said.
Fixed Assets-Depreciation Not Provided
RTC said for two years in a row, they have noted that annual depreciation charges or provision for depreciable assets, have not been accounted for at the appropriate time; that Audit Journals raised for 2016 to correct these in the accounts were not passed by Finance to reflect in 2017 books of the authority.
RTC noted that not charging depreciation overstates Net Book Values of Assets and understates charges in the profit and loss account; that thus, it affects the true and fair view of the accounts to stakeholders.
The auditors recommended the Head of Finance to ensure that all audit journals in this regard for 2017 and 2016, are posted in the Books to tally with the audited accounts. They further said depreciation charges should be accounted for before management accounts are submitted for auditing. The management noted the recommendation and indicated commitment for its implementation.
Meanwhile, NAQAA's sitting and per diem allowances have increased from D38, 575 in 2016, to D763, 100 in 2017. Overseas travels have also increased significantly from D137, 609 in 2016, to D1, 058, 292 in 2017. Administrative expenses increased from D4, 780, 502 in 2016, to D9, 700, 196 in 2017.
The authority said they have witnessed a lost in the total National Education Training levy in 2017 with an accumulation of D24, 254, 858 compared to the previous year, when it was D30, 422, 947.
"This is the major source of income for the authority, collected from all institutions that employs at least five staff, and earns a turnover of D500, 000 and above in each year of collection. This income is collected by the Gambia Revenue Authority of which 75% of total collection, is transferred to the Authority," the officials said; that the total income the authority gained in 2017 is less than the previous year, while total expenditure for 2017 exceeded the previous year 2016.
In 2016, the authority's income was D31, 949, 099 and got D26, 851, 637 in 2017, while its total expenditure in 2016 was D17, 940, 604 and in 2017, it increased to D25, 550, 366.
The net surplus for the year under review 2017 is D1, 301, 271 which is less than last year when the net surplus was D14, 008, 495.
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