He added that the accounts were not prepared in accordance with the requirements of the Public Finance Act 2024 and the Cash Basis International Public Sector Accounting Standards.
The adverse opinion, he explained, was based on several material issues which, taken individually or together, had a significant impact on the credibility of the financial statements. These issues cut across key financial categories, including payables, receivables and cash balances.
One of the concerns raised related to payable accounts with debit balances. According to the report, payable accounts with GSF for 3308202202 recorded a debit balance, reducing the payable balance by D1,242,308. The Auditor General noted that negative balances in payable accounts raise serious questions about the accuracy of liability figures and the integrity of the general ledger relating to payables.
The report also highlighted widespread problems with transit accounts, particularly their misclassification. An overstatement of the payable balance by D2,917,828,075.50 was identified, arising from uncleared transit accounts with outstanding balances at year end. “These transit accounts were not clearly identified and were later misclassified and mapped under various notes, including Note 21, even though they did not represent actual payables in the financial statements. The Auditor General warned that this misclassification distorted payable balances and related disclosures.”
Similar issues were found under receivables under Note 17, receivable balances were overstated by D1,017,968,709.40 due to uncleared transit accounts that remained outstanding at year end. “These accounts, the report said, were neither clear nor identifiable and were wrongly presented as receivables, even though they did not represent real amounts due to the government. This again distorted the receivable balances and the accompanying disclosures.”
Cash and cash equivalents were also flagged as problematic. The revenue bank cash account showed a negative balance of D352,365,079, which was incorrectly classified as cash and cash equivalents. “This error contributed to an understatement of the cash and cash equivalent balances disclosed in the financial statements.”
In addition, the Auditor General reported a major discrepancy of D5,080,724,180 between the cash balance disclosed in the statement of financial position under Note 15 and the year-end cash balance reported in the statement of cash receipts and payments. He said this difference pointed to inconsistencies and inaccuracies in the reconciliation of cash balances.
