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E1.3BN FOUND IN ABOLISHED GOVT DEPARTMENT’S ACCOUNT

26/02/2023 07:57:00 Welcome Dlamini

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MBABANE – An amount of E1.3 billion has been discovered in the revenue account of the abolished Income Tax Department.

This money, which is E1 300 589 578.61, was collected in respect of graded tax deductions, pay as you earn (PAYE) source deductions and tax on benefits. Auditor General (AG) Timothy Matsebula said it could not be ascertained how long these accounts have been in this revenue account because they were still reflected in the year ended March 31, 2022. “These were also not transferred to the revenue account and hence it was understated,” he said.

The AG said Section 203(x) of the Financial and Accounting Instruction of 1970 states that the accounting officer should see to it that all books of accounts were posted and kept up to date. He said he warned the controlling officer that this could result in misrepresentation of revenue through a non-existent account. “The ministry should investigate and rectify this anomaly,” Matsebula said. He said there was no response from the controlling officer and the matter remained unresolved and reportable.

This is not the first time that this abolished department catches the eye of the AG; in the previous audit it was listed among those non-existent entities that continued to be allocated money by government and also received payments from other related bodies. The abolished Department of Income Tax, was found to have been allocated an amount of E21.2 million, of which E5 306 598 was released and an actual expenditure amounting to E20 797.20 on CTA Vehicle Charges was incurred.

Unauthorised allocation

“Further, I reported that there was an unauthorised budget allocation on personnel costs amounting to E21159 993.90, where the budget released amounting to E5 289 996.00 was also charged under the abolished Income Tax Department,” Matsebula said. The AG said he also noted that the abolished departments had assets and liabilities balances not cleared and/or reconciled to nil balances at the year of closure. “Both Income Tax Department and Customs and Excise Department had assets balances amounting to E4 603.76 and liabilities balances amounting to E2 603 506.24 as at 31st March 2021,” he said.

He expressed concern that the financial position of the consolidated statement of assets and liabilities may be distorted and funds could remain unaccounted for and unremitted to the Eswatini Revenue Service (ERS). Matsebula said he advised the controlling officer to reconcile the suspense accounts and requested that supporting documentation for the assets and liabilities should be provided to the AG’s Office. “The controlling officer stated that as a ministry they will request the assistance from the Treasury Department on the matter, since that department has their own accounting functions away from the ministry. I noted the response, but the matter has not been resolved, hence it remains reportable,” he said.

The AG cited financial and accounting instructions to highlight the seriousness of what was happening. One of these was Financial and Accounting Instruction number 101, to stress that was essential that expenditure estimates should be as accurate and realistic as possible and should cover all foreseeable expenditure. He said this instruction further provided guidance that submission of requests for expenditure estimated to the Ministry of Finance was the responsibility of the controlling officer.

Discontinued

“However, I am not aware whether the budget for the discontinued operations was part of the controlling officer’s submission to the Ministry of Finance,” he said. Also, he said according to the Financial Management and Accounting Procedures Manual (1993) Section 11 (1.4), applications for the creation of new below-the-line account items must be submitted to the accountant general, together with any supporting documents on the background and need for new account. “I requested the controlling officer to provide the instrument establishing this special fund account, the purpose programme/project, cashbook, financial records and supporting documents, and bank statements. At the time of writing this report, this information had not been provided,” Matsebula said.