Skip to content

Your figures don’t add up, Beileh tells Auditor General

Storyline:Business, National News

By T. Roble

SUMMARY

  • Beileh says Auditor General’s figures do not tally with that at the Central Bank
  • FGS and IMF agreed to maintain a ‘Fiscal Buffer’ outside CBS
  • AG did not consult the Ministry of Finance before releasing the report
  • The Ministry of Finance collects all revenues and deposits at CBS contrary to AG’s report

Finance Minister Abdirahman Beileh has accused the Auditor-General Mohamed Ali of ‘erroneous reporting’, failure to ‘consult with clients’ in line with auditing standards and limited understanding of public finance management procedures.

In a letter dated October 11 responding to the just-released audit report, Beileh raises concerns over some key questions arising from the report such as understatement of funds, accounting procedures by state institutions and records of external grants.

The Finance Minister says the errors arising from the report would have been avoided ‘if only a draft report had been availed to us and discussed prior to publication’.

EXTERNAL GRANTS

Regarding the donor grants which the Auditor General were understated to the tune of $18 million, Beileh says the funds were kept intentionally in foreign accounts following in agreement with International Monetary Fund.

“It is important to note that, following an agreement with the IMF under SMP IV program, guidelines were prepared and cleared on the basis of which a “Fiscal Buffer” was established to enable government to sustain critical expenditures and avoid arrears in the face of volatile revenues,” the letter by the Finance Minister reads in part.

The Ministry of Finance concluded talks with IMF staff in May 2019 for the start of the SMP IV running from May 2019-July 2020. The Audit Report covers the 2018 financial year.

In effect, therefore, Beileh says some of the grants including the $20 million from Saudi Arabia in 2017 are kept at the FGS account in Ziraat Bank in Istanbul, Turkey.

The Finance Minister also took issue with the AG’s report on the EU grant.

Close to $20m aid money not accounted for- audit report

At least $10m not adequately accounted for- Audit report

Beileh also questioned the variance between the AG’s report and CBS report on the EU grant.

“The record in the Central Bank of Somalia (CBS) shows the amount of $12,011,954 for the TSA (Treasury Single Account) while the figure in the Auditor General’s report is $13,266,667. We stand by the amount reported by the CBS as the correct amount,” the Minister said. The variance of $1,254,713 between the reported amount by CBS and the Auditor General’s report, Beilhe adds, was received from UNOPS and disbursed, in total, to the Somali Police Force, the intended beneficiary.

In the report, the AG indicates $13,929,132 was the balance at the CBS in the year running December 2018 from the Saudi Arabia grant. But Beileh says the AG presented his own figures since the records by the CBS indicate the balance was $14,060,000.

The difference is that the Auditor General failed to account for the amount of $130,868 and inaccurately reported the KSA grant as only $20m rather than the full amount which was $20,130,86,” Beileh said.

“It is, therefore, necessary to have further clarification on the source of the figure used in the Auditor General’s report,” the Finance Minister noted.

SPENT AT SOURCE

On the spending of revenues ‘at source’ as indicated by the AG, Beileh also differed noting all revenues are collected by the Ministry of Finance and not departments as indicated by the AG. He noted the cabinet changed the initial procedure where collected revenues were kept at the Ministry of Finance Accounts directing that all revenues collected be deposited into the TSA.

Somali National University in its response said it was authorized by law to spend collected monies from students to cover running costs such as electricity, water, internet and teaching materials. The AG had indicated SNU collected $556,276.50 and never remitted to the Central Bank.

Beilhe also accused the Auditor General of annexing an unsigned letter from the Finance Ministry on the report. “It is curious to note two unsigned letters, one from the Accountant General and one from the Minister of Finance, included in the Auditor General’s 2018 published report. It can be assumed that these unsigned letters were intended for the Ministry of Finance Management to review the audit findings, make comments, if any, and, eventually, sign them.”