Serious problems with State bookkeeping systems

Auditor General Niyaz Ibrahim has said that there are serious problems associated with the maintenance of financial records by government offices.

Speaking at Parliament’s Finance Committee last Wednesday, Auditor General Niyaz said that government offices are careless in their bookkeeping, and that the existing records cannot be trusted.

“The records cannot be trusted unless they meet the public accounting standards. Most offices do not adhere to these standards,” Niyaz said.

Niyaz briefed the Finance Committee on the serious problems associated with the maintenance of accounts.

He mentioned that the 2010 Audit Report for Health Ministry revealed that the Ministry recorded its incomes on an ordinary Excel sheet.

“In a sector as large as Health, where incomes worth millions of Rufiya are received – the records were maintained on an Excel sheet. There were no security measures on making changes to the documents. We therefore cannot trust these records,” Niyaz said.

He noted that as a result of negligent bookkeeping, large amounts of money owed to the government revenue fund are kept in public bank accounts, and several offices use this money outside of the state budget.

“Millions of Rufiya which should be transferred to the state account have remained for over 16 years in over 200 accounts. This money is used outside the assigned budget. These are all losses to the state, especially at a time when state income is insufficient,” Niyaz said.

Niyaz also noted the problem of government offices making changes to accounts after sending them for auditing at the end of every year. He said that offices open general ledgers to process millions of Rufiya, and that changes should not be made to general ledgers in this manner.

“These are very serious problems, and the state’s accounting system cannot be strengthened without correcting these issues,” Niyaz said.

Niyaz also noted that failure to maintain inventory of assets also results in losses to the State.

“For example, it was the auditors who found out that Health Ministry had paid for centrifuges which had not been delivered. They had made the payments but never received the goods. It was also noted that they destroy stocks of items bought earlier, and replace with more recent versions,” Niyaz said.

Niyaz and the senior officials of Audit Office also expressed concern over the maintenance of accounts in Councils, and were doubtful if an audit can even be conducted on Councils due to lacking records.

Niyaz noted that more resources are required to conduct regular audits on Councils.

“We have to consider, whether to employ audit firms to do this, or increase the resources of Audit Office. If it is assigned to us, we will make sure it is done,” Niyaz said.

Niyaz and the Audit Office officials noted that maintenance of accounts is the area most neglected by government offices.