The released report of the Auditor General (AG) by Pulane Letebele has established that there has been cases of unaccounted funds at the Botswana Meat Commission (BMC), for the year ended 31 December 2015
The Auditor General noted weaknesses in the communication between the Commission and its subsidiaries, which included, Group reporting policies not communicated to subsidiaries.
BMC management responded to the audit, stating that the books reflect a huge opening difference as the balances were inherited from 2014, a fault which they reconcile by adjusting their registers and ledger balances on a monthly basis.
However, Letebele observed that the bank reconciliations were not regularly reviewed in detail to detect and correct errors.
She mentioned in her report that no controls were in place for the whole year in respect of the cash management system for Francistown and the year-end cash reconciliations were not complete at commencement of the audit. The AG also said deposits amounting to P5 600 were duplicated in the Maun cash book and included as reconciling items in the year end cash reconciliation. Further, she also said that a reconciling item in the Maun bank reconciliation representing a cheque for P31 086 which was not processed by the bank and the supplier paid by EFT, was not cancelled by the end of 2015 but only in January 2016.
Another reconciling item for P24 593 in the Lobatse bank reconciliation had no description attached, hence its nature was not easily identifiable.
In response management stated that they had historical reconciliation challenges in Francistown which were subsequently addressed. The delay in cancellation of the Maun reconciling item was due to a delay in getting full details from the Bank to cancel the cheque, according to the Dr Akolang Tombale led commission.
Further, BMC management responded saying that the reconciliations were carried out during the year and in some cases after getting confirmation from subsidiaries which delayed the reconciliation process. The management said BMC (UK) and BMC head office were reconciled but there were differences on Pula values due to historical differences since 2002.
“The Oracle consultants were engaged to investigate and a detailed analysis was done which showed that entries were posted in Pula value instead of foreign value,” said the BMC management.
Further, it said the Commission and the Table Bay Cold Storage (TBCS) were reconciled though it took time to investigate some entries. The Auditor General however said the inability of the Commission to communicate with its subsidiaries will be its downfall. Letebele condemned the faults by the BMC as a form of negligence, with different departments allocated to deal with different problems and faults only as they arise.
Seeking to explain the faults, BMC management indicated that the concerns raised are a result of their reconciliations, which are carried out through the year, an act which renders it difficult to have a set time of getting confirmation from subsidiaries and causes a delay in the entire process.
The Auditor General reported to have come across transfers which appear as a failures to check, detect and correct errors of bank reconciliations. Letebele indicated that the failure to update books on time has proved a problem that the BMC needs to resolve, by ensuring that they register all transactions and keep track of them accordingly.
The late revising of books has proved inefficiency by the BMC, Letebele stated. The realizing of inventory items with a unit value of zero shows that there is no stock control. The AG noted that this is a default which can be registered as a case of negligence considering that staff members can obtain item from the inventory without the knowledge of the inventory controller. The faults may be associated with the non-recognition of an allowance for slow moving items approaching or past their expiry dates, she said.