Somalia’s Auditor General Sounds Alarm Over Financial Mismanagement Across Government

GOOBJOOG NEWS|MOGADISHU: Somalia’s Auditor General has released the 2024 annual report, a sweeping review of 21 federal entities that lays bare systemic weaknesses in public finance management. The report comes against the backdrop of a national budget of just over $1 billion (about $1.08 billion), of which roughly $346 million was projected from domestic revenue and more than $694 million from donor support. With such a heavy reliance on external aid, the way public funds are handled is not only a matter of governance but of national stability.

The audit highlights persistent irregularities such as procurement without tendering, ghost assets, unaccounted donor funds, and hundreds of public servants working without pay. While the audit acknowledges pockets of improvement, it largely paints a picture of entrenched practices that undermine accountability. Nearly six in ten recommendations from previous years remain unimplemented, pointing to a worrying culture of inertia in government institutions.

At the heart of the findings are patterns that cut across sectors: ministries splitting large contracts to avoid open bidding, properties and vehicles that are unregistered or missing, donor grants received but never reflected in the national budget, and unauthorized bank accounts that bypass the treasury. Each of these practices is not only poor management but also a breach of Somalia’s Public Finance Management (PFM) Regulations, which require competitive procurement, full asset registration in the Somali Financial Management Information System (SFMIS), integration of all donor funds into the budget, and the establishment of internal audit functions.

Administrative Bodies Under Scrutiny

Some of the sharpest criticisms are directed at the country’s top offices. The Office of the Presidency was found to have split more than $1.5 million worth of contracts, a tactic that skirts procurement law. The PFM Regulations are unambiguous: “No procuring entity shall split procurements for the purpose of avoiding competitive bidding.” Vehicles remained undocumented or in the custody of former officials, in direct violation of asset rules that state all government property must be recorded in the SFMIS.

Parliament’s House of the People fared no better. Procurement worth over $4.4 million was divided to avoid tendering, while grants totaling nearly $185,000 were received but never entered into the national budget. Article 16 of the regulations requires that “all grants, loans and external assistance shall be deposited into the Consolidated Fund and recorded in the annual budget.” Even more troubling, 136 staff members were found to be working without salaries, contradicting payroll provisions that require staffing to be formalized and budgeted for.

The Ministry of Finance, the custodian of public money, was also faulted. It split contracts worth over $2.4 million, had no functional procurement committee, left non-tax revenues of about $10 million uncollected, and counted 50 unpaid staff. The regulations assign the ministry a central role in setting tariffs and ensuring transparent revenue collection, making its failures a breach at the very core of Somalia’s financial system.

The Ministry of Foreign Affairs and the Ministry of Justice were similarly faulted. The Foreign Affairs docket made $79,000 in purchases without prequalification, spent $317,000 without a clear plan, left contracts unregistered, reported missing vehicles and properties, failed to budget $120,000 in grants, and listed 87 unpaid staff. The Justice Ministry operated without an annual procurement plan or internal audit, oversaw more than 250 unregistered projects and 148 uncontrolled properties, left over $1.2 million in grants outside the budget, opened unauthorized bank accounts, and counted 28 unpaid staff. Together, these findings suggest not just gaps but a collapse in financial planning and governance.

The Office of the Accountant General and the Office of the Attorney General were also singled out. The Accountant General’s office lacked a procurement committee and faced supplier verification issues, including the use of expired or falsified licenses—serious lapses in financial control. The Attorney General’s office was found to have spent $144,000 without prequalification, split $115,000 worth of procurement, signed $154,000 in unregistered contracts, and failed to account for government assets.

Security Sector Gaps

The Somali National Army spent nearly $20 million without a procurement plan and had no internal audit function, both of which the PFM rules make mandatory. A striking 137 of its properties were not under its control or registered in the SFMIS, contravening Regulation 143, which requires full accounting of immovable assets.

The police, meanwhile, split contracts worth over $367,000 and had 63 unregistered properties. More seriously, the force deducted more than $600,000 from officers’ salaries without legal justification. The Auditor General flagged this as unlawful, noting that under payroll regulations, no deductions may be made from public salaries except as expressly authorized by law.

Economic Institutions in Disarray

The Ministry of Energy received over $2.4 million in donor grants that never entered the national budget. Regulation 25 requires that “no public entity shall open or operate bank accounts without written approval of the Minister of Finance.” Nearly all of its 195 properties were outside its control, equipment lay obsolete, and several vehicles were missing.

At the Ministry of Petroleum, procurement worth over $160,000 bypassed open processes, contracts remained unregistered, and $30,000 in revenue went uncollected. Fifty employees worked without salaries, in breach of staffing regulations.

The Ministry of Fisheries not only failed to act on 57 illegal fishing vessels but also kept an unauthorized bank account, had more than 100 properties outside its control, and left 88 employees uncompensated.

Even agencies tied to communications and infrastructure were entangled in mismanagement. The National Communications Authority collected nearly $7 million without consulting the Ministry of Finance, undermining the principle that all revenues must flow through the Consolidated Fund. The Ministry of Public Works lost out on $150,000 in license fees, while the Ministry of Transport improperly transferred a government bus without approval, breaching rules on asset disposal.

Social Services and Human Impact

The Ministry of Education lost control of 451 properties, including schools and children’s homes, in defiance of asset management laws. It spent over $1.1 million without a procurement plan and lacked a vocational education policy as required by statute.

The Ministry of Labour similarly failed to manage its resources. Sixty of its 62 properties were not under its control, and more than $85,000 in rental income went uncollected. Beyond finances, the ministry registered over 4,500 foreign workers without the mandated evaluation committee, a violation of employment oversight rules.

A Roadmap, If Followed

Management responses across institutions tended to cite budget shortages, lack of capacity, or inherited problems. Promises were made to register assets, create audit units, and follow procurement laws in the coming year. But the Auditor General’s office has heard these pledges before, more than half of past recommendations remain unimplemented.

Still, the report offers a clear roadmap: enforce procurement laws, centralize all funds into the national treasury system, create robust internal audits, digitize asset management, and formalize the employment status of unpaid staff. These are not suggestions but obligations under Somalia’s financial regulations.