The Addis Abeba City Administration’s Auditor General Office has found that institutions of the capital have made a 905.8 million Br worth of unaccounted transactions in the last fiscal year.
Tsegewoyn Kassa, the capital’s auditor general, said that illegitimate procurements, inflated salaries and benefits, unaccounted for expenses, uncollected accounts, as well as mismanagement of properties were the reasons for the audit gap during the annual assembly of the City Administration’s Council.
The report was submitted to the Council at the assembly, that was chaired by Tabor Gebremedhin (PhD), on April 17, 2018
The report encompassed the financial, procedural and properties administration of the city’s institutions and the challenges encountered during auditing by the Auditor General’s Office, which was established six years ago.
After each auditing of an institution, the Auditor General conducted an exit conference, where the audit findings and discrepancies were pointed out, and recommendations proposed to the heads and employees.
The city’s Plan Commission was found to have no financial and procedural inconsistencies, while 29 institutions received favourable audit comments. The report also disclosed that the city’s Saving Houses Development Enterprise has not prepared a financial statement since its establishment in 2013.
Tsegewoin told Fortune that the enterprise is now in an auditing process after preparing its financial report according to the recommendations of the Financial Transparency & Accountability’s Main Committee. The Committee is composed of teams from the Council, ministries of Justice and Finance & Economic Cooperation, the Mayor’s Office, the Auditor General’s Office and the Anti-Corruption Commission.
The audit report was divided into seven parts. The first consists of uncollected income from medium-level taxpayers of Addis Abeba. Here, unaccounted for payments worth 721.7 million Br were found at two of the Ethiopian Revenues & Customs Authority’s Addis Abeba branch offices.
In the second part of the report, it was found that close to 16 million Br worth of audit gaps was registered as a result of uncollected finances by different institutions. As well as unaddressed accounts payable of around 15.9 million Br were found in the third part of the report.
The Fourth part focused on expenditure gaps from illegitimate procurements that were said to violate procurement laws and directives, inflated salaries and benefits to staff as well as payments without proof. The gaps accounted for 17.3 million Br worth of payments.
Property mismanagement was recorded in eight organisations, according to the fifth part of the report.
“80pc of the city’s offices manage their properties without implementing the financial proclamation of the city,” said Tsegewoin.
The sixth part focused on audits conducted when there is a suspicion that financial management rules have been violated. Carried out on six institutions, two are under review by a court. The remaining four – two public hospitals, a health bureau and a technical college – were found to have 10.9 million Br worth of gaps as a result of an alleged illegal utilisation of aid finances and medicine sales and distributions.
The final report dealt with follow-up audits on 11 institutions that did not take any measures to address their audit gaps of around 124 million Br in the 2015 and 2016 fiscal years. The Office has disclosed that the gaps were a result of an overpayment, illegal procurements and unproven payments.
The significant challenges raised by Tsegewoyn in conducting this audit were high employee turnover and poor auditing skills at the Office.
“Our trained and skilled employees leave for better job opportunities,” she said. “The Office and Ministry of Finance & Economic Cooperation (MoFEC) have been providing continuous financial training for employees to withstand the problem.”
Audit gaps are the result of weak organisational structures that fail to encourage internal auditing, according to Habtamu Berhanu (PhD), a lecturer at Addis Abeba University’s (AAU) College of Business & Economics for 16 years.
Tesfaye Terfessa, deputy spokesperson of the Addis Abeba City Council, states that not taking serious measures on offices with audit findings is a major deficiency.
“There are some management members who do not encourage the strong internal audit,” he said.
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