National Audit Office findings fault NYSS
Wednesday, October 10, 2012
Findings by the National Audit Office (NAO) during the audit exercise at the National Youth Service Scheme (NYSS) has revealed several irregularities at the NYSS, as the Youth Scheme failed to adhere to some financial instructions and Gambia Public Procurement Authority (GPPA) rules and regulations.
This was revealed by Pa Majagne Ndow, the external auditor at the NAO, Monday, after the presentation of the annual activity report and audited financial statement of the NYSS to the Joint Session of the Public Accounts and Public Enterprises Committee (PAC/PEC) of the National Assembly.
The report was presented to the Committee by Musa Mbye, former executive director of NYSS, now the deputy permanent secretary, Ministry of Youth and Sports.
Tuition fees for corps members
Ndow told the Committee that the NAO in its findings noted that the payment of D12, 000 in respect to tuition fees for NYSS Corps members was made without receipt from the respective institution. He said the finding reveals that the implication could be without evidence of receipts there is the risk that this payment was not genuine and therefore translates into loss of revenue to the NYSS. He recommended that the NYSS management produce the relevant receipt from the institution concerned for the amount involved and furnished to the office for audit.
Ndow pointed out that all imprest ought to be retired on or before the last day of the financial year or on such earlier date as specified by the Treasury Directorate or permanent secretary, when authorising the imprest. However, he said an imprest of D2, 500 was not retired, further pointing out that the implication could be that in the absence of retirement there is risk that monies may be misappropriated or misused for personal use. He added that the NAO recommends that the imprest should be retired by the officer concerned and details furnished to their office.
Payments without recipient's signature
Ndow further told the Committee that the Audit findings also found out that a payment of D1, 000 was made without recipients' signature. He explained that the implication could be that there is the risk that these payments were not received by the payees, while recommending that in future all payment vouchers should be signed by the payees.
Ndow reported that in 2002, NYSS embarked on a loan scheme to assist ex-corps members to operate their own businesses depending on the [individual] ex-corps member's field of expertise.
He continued: “Before a loan is granted, an application is written to the executive director for approval and it must be accompanied with details of the business proposal with the necessary requirements for its operation. A memorandum of understanding is signed by NYSS, ex-corps member, the guarantor and a witness. All loans are repayable within a period of two years and it attracts 17% interest using straight line method.” However, he said the NAO findings discovered that some ex-corps members defaulted in their repayments, which resulted to an overdue outstanding balance of D1, 577, 068.84 as at end of November 2011.
The implication, according to Ndow, is that there is the possibility that some of the loans will not be recovered, which could lead to shortage of funds to disburse to other members. While emphasising that the NAO acknowledges the efforts the NYSS is making to recover the loans, he urged the NYSS management to redouble its efforts as all of the outstanding balances are long overdue.
Income Tax payment
“Section 94 of the Income and Sales Tax Act 2004 stipulates that any tax withheld by an employer should be remitted to the Gambia Revenue Authority within 15 days of the end of the month to which the tax relates. Section 204V states that failure to pay tax due within deadline will incur a 5% penalty of tax due for each month the payment is delayed up to a maximum of 25%,” Ndow said.
He then disclosed that the findings discovered that the NYSS has not been paying income tax deducted from staff to GRA from October 2008 to December 2010 totaling to D213, 868.41.
The NAO concluded that NYSS did not adhere to some financial instructions and GPPA’s Rules and Regulations and need management’s urgent attention.
NYSS management's response
In their response to the unretired imprest, Edward B. Wright, the principal accountant at NYSS, said the payments were not imprest issued to the officers concerned, but were payments made as requested for particular expenses.
He explains: “The officers concerned failed to surrender the receipts of their respective transactions to the Accounts Department after making the payments during the time of the audit exercises.” Notwithstanding, Wright said the officers concerned have now surrendered the receipts of the said transactions to the Accounts Department.
Clarifying the issue of payments made without recipients’ signature, he explained that the payments were made from the staff contribution fund of which each staff contributes D50 every month. “A Bank account was not opened to lodge the staff contribution fund, the monies were lodged in the Scheme's Bank Account and it was from this account that payments were effected to staff who benefited from the funds in one way or the other,” he further explained.
On the loan repayment, Wright said there are other contributing factors to the loan delinquency such as monitoring cost implications, poor transport facilities, and lowest interest rate as a result of less return. “However, it is a concern to the management, Ministry and the funding agencies. This we hope to be more robust in our continued efforts to recover them,” he added.
informed the Committee that the management is coming up with a proposal to hire
a legal practitioner to recover these loans through the court with the approval
of the Board of Directors. Commenting
on the Income Tax Payment, Wright pointed out that NYSS depends entirely on
monthly government subventions paid to the scheme.
He added: “The way and manner the scheme received these subventions are the least encouraging. Most of the time, the scheme financed its operations through bank overdrafts and this makes it impossible to remit the tax deducted from staff to GRA because the banks always refuse to honour such payments. The scheme will liaise with the Ministry of Youth and Sports and Ministry of Finance and Economic Affairs forthwith to remit the arrears outstanding to GRA with immediate effect.” he assured.
Author: Alieu Ceesay & Aji Fatou Faal