AuGD raps labour ministry for inefficiencies - Poor recordkeeping, scant regard for addressing deficiencies among concerns
The Auditor General’s Department has strongly reprimanded the Ministry of Labour and Social Security for its inertia in responding to worrying internal audit findings that repeatedly flagged significant internal control deficiencies placing government assets worth tens of millions of dollars at risk.
In her annual report tabled in Parliament on Tuesday, Auditor General Pamela Monroe Ellis said between April 2018 and June 2019, the internal auditor divulged that the ministry spent more than $99 million on capital goods, yet despite multiple internal and external audit reports, the responsible officers did not maintain accurate records to account for all assets acquired.
According to the auditor general, management at the labour ministry failed to respond appropriately to these recurring issues, demonstrating scant regard for maintaining an effective internal control system over fixed assets.
“The delay in addressing these deficiencies not only impair accountability, transparency, and probity, but also created an environment that is conducive to undetectable abuse and misuse of government properties as well as unauthorised removal of assets,” Monroe Ellis declared.
LACK OF COMMITMENT
The Government’s chief auditor said that repetitive findings from the internal audit reviews and the ministry’s apparent non-responsiveness in addressing the internal control deficiencies suggest management’s lack of commitment in establishing and maintaining effective internal controls to help safeguard assets and achieve its objectives.
“Up to the time of reporting, we found that the ministry was yet to respond to approximately 60 issues concerning systemic weaknesses identified, in the ministry’s operations, from as far back as March 2017.”
Monroe Ellis observed that the ministry’s lack of responsiveness to the findings of the internal auditor was cause for concern, as this matter was also reported in the Auditor General’s Department’s Activity-Based Audit – National Insurance Scheme 2016 Audit Report.
“At that time, we reported that the Ministry of Labour and Social Security had not responded to 27 issues raised by the internal auditor from as far back as December 2011.”
It has been discovered that records were not properly maintained to reflect all acquisitions made between 2016 and 2018, totalling $7 million.
There was no inventory for the acquisition of computers valuing $3 million.
Further, the master inventory and those for individual locations were at variance.
The auditor general also highlighted differences between the inventory records and physical counts for items such as televisions, refrigerators, and fans.
“Basic inventory management practices were ignored, given that location charts were either incomplete, inaccurate or non-existent, and physical counts to verify the existence and conditions of assets were also absent.”
The internal audit report also indicated that the ministry spent $4 million to purchase new split air conditioning units in the last four financial years. However, no records were maintained to account for more than 100 split air conditioning units. Units deemed unserviceable were reportedly destroyed, but the internal audit verification process was impeded by the absence of service records and evidence of destruction.
Responding to the auditor general, the ministry advised that draft responses had been submitted to the permanent secretary in September 2015 and the chief internal auditor and chairman of the audit committee in November 2015.
The ministry conceded that there was a deficiency in submitting responses to the internal audit unit. It further advised that management would be addressing the shortfalls outlined.