Slightly over $18 million in the financial year 2018 cannot be accounted for, the Auditor General has said in a report which also implicates all arms of government including Banaadir Regional Administration for failing to submit their financial statements for audit.
The report, which is a first in the country presents an accountability challenge across the government and the executive as virtually all institutions could not account for funds used.
“Receipts of external assistance for the year ended 31 December 2018 was understated by US $ 18,386,732,” the report says adding some of the funds were held in offshore accounts and outside the Treasury Single Account.
Out of $20 million Saudi Arabia grant disbursed to the Federal Government for the accounting period, only $6 million found way into the Treasury Single Account (TSA) with a whopping $13 million not captured by the Financial Management Information System (FMIS).
The Saudi grant was a subjected of protracted battle between Finance Ministry and MPs early this year as MP pressed Finance Minister Abdirahman Beileh to explain how the $20 million balance had been used. Beileh and Accountant General Fatuma Farah told Parliament the funds were held in an account in Turkey.
Saudi Arabia donated $50million to Somalia in 2017 and out of this, $30 million was expended during that financial period.
Of interest to the Auditor General also is a grant from the EU and United Nations Office for Project Services (UNOPS). Out of $17 million released to the Federal Government in 2018 by the EU, $3.7 million was not captured by the FMIS in the Treasury Single Account. More than half-$719,000 from UNOPS was held in different accounts outside the TSA in the Central Bank.
According to the Auditor General Mohamed Ali Afgoye, annual accounts presented for audit considered only transactions of bank accounts that were in the Treasury Single Account and excluded those transactions in bank accounts that were not in the Treasury Single Account. The unaccounted funds were held outside the TSA hence were not captured by FMIS.
The report also paints a picture of opaqueness in the management of public funds. All government ministries, Banadir Regional Administration and the Federal Parliament did not submit their accounts for audit. The Accountant General’s office which is tasked with preparing financial statements for audit too did not submit its accounts for auditing, the report says.
Several ministries spent money running into thousands of dollars either without supporting documents or lack of valid contracts, the report says. The Ministry of Finance could not adequately account for $142,000 because of lack of supporting document while Foreign Affairs made payments up to $852,000 to Somali embassies abroad but with no supporting documents. Others are Telecommunications ($78,000), Ports ($48,000) and Health ($21).
Both the Lower House and Senate which too did not submit their accounts made unauthorized re-allocation of about half a million dollars. The unauthorized internal re-allocation at the Lower House amounted to US $362,000.00 while the Senate made similar re-allocations totaling $145,500.