Maseru- In what has now become a norm with public finances, Mathabiso Makenete, the Auditor General (AG) of Lesotho, has issued an adverse opinion on the Consolidated Financial Statements of the Government for the fiscal year ending March 31, 2022.
This audit, has highlighted significant discrepancies and mismanagement in public funds, raising serious concerns about the financial integrity and transparency of the government.
The adverse opinion is based on several critical findings. One of the most glaring issues is an unexplained difference of M5.3 billion between the cash balances in the bank accounts and the Consolidated Statement of Receipts and Payments. This discrepancy, although reduced from M6.2 billion in 2021, indicates persistent inconsistencies in financial reporting.
The AG’s report points out seven key areas contributing to the adverse opinion. Among these is a significant difference in reported cash receipts, where only 8 out of 27 revenue-collecting units had matching figures across the Consolidated Financial Statements (CFS), ministries’ financial statements, and the Integrated Financial Management Information System (IFMIS) ledger.
The CFS showed a total of M17.326 billion, whereas ministries’ statements totalled M16.007 billion, and the IFMIS ledger reported M17.297 billion.
Non-cash assets also revealed substantial issues. The report noted that M415 million from previous years had not been cleared or disclosed in the current year’s accounts. Additionally, a misclassification of a M26 million advance for COVID-19 vaccines by the Ministry of Health further complicated financial transparency.
Pending litigation claims also presented inconsistencies. The CFS for 2021/22 listed claims totalling M492 million across seven ministries, a sharp increase from the M71 million reported in the previous year. This discrepancy raises questions about the accuracy and completeness of financial disclosures.
Accountability for expenditure remains a critical issue. The audit revealed that two ministries, Communications, Science, and Technology, and Home Affairs, exceeded their budgeted expenditures by M21.9 million and M2.9 million respectively, contravening legal requirements. Additionally, a capital expenditure bill amounting to M1.6 billion had not been enacted at the time of the audit.
Persistent issues from prior years continue to plague the financial statements. Notably, balances of below-the-line accounts since April 2009 have not been carried forward, resulting in misstated financial statements for thirteen years. Furthermore, a transfer of M450 million from the Trust Monies Account into the Consolidated Fund in 2017 remains regularized.
The management of public assets also came under scrutiny. The report highlights inadequate security in passport distribution, leading to losses amounting to M3.6 million due to mutilated passports. Additionally, many government ministries fail to maintain asset registers, leading to insufficient disclosures of government-owned assets.
Delays in public infrastructure projects due to institutional and regulatory issues have resulted in underutilization of funds and unmet project objectives. This inefficiency underscores the need for better project management and regulatory compliance.
The Auditor General commended her team and the Accounting Directorate for their efforts to improve the government’s accounting standards.
