Thursday, April 18, 2024

Auditors uncover fraud at LEA

An independent audit of the financial statements of the Local Enterprise Authority (LEA), carried out by auditors PricewaterhouseCoopers, has exposed fraudulent behaviour by top senior managers at the government entrepreneurial agency.

Fresh information indicates that while examining the Authority’s financial accounts, auditors from PricewaterhouseCoopers observed that the Authority had been exposed to instances of fraud due to non-strict adherence to set controls. The auditors also observed that LEA’s non-safeguarding of evidence and exhibits diminished the ability of the Authority to ensure successful recovery of losses and conviction of the culprits.
“The controls put in place seem to have been designed to detect fraud rather than prevent it,” read the audit report.

The Telegraph understands that in one case, a senior manager (namewitheld) at the authority resigned pending outcome of a case in which he was suspended for abuse of super ‘user rights’. The concerned individual reportedly over-rode the payroll function to stop deductions on his bank and study loans for the month of December 2013. In another instance, an accountant at the Gaborone Branch also resigned following a fraud case which involved short banking of receipts from customers. It has since emerged that the fraud could have long been detected had the branch manager properly reviewed the reconciliations.

“The branch management failed to avail to the auditors’ receipts and bank deposits slips pertaining to the said transactions as they were said to be misplaced,” the auditors said.

They also faulted LEA for failing to disclose progress made to recover an unspecified amount which was never banked. It has also emerged that that LEA has recorded unretired travelling imprests of over P500┬á000 which have been building up over the years. At the same time LEA staff was reportedly issued with interest-free loans with no tax benefit charged when computing the Pay-As-You-Earn. Auditors feel the set up exposes the Authority to financial losses. Meanwhile the latest Auditor General’s report has shown that LEA’s working capital position as at March last year shows that its current assets stand at P21.9 million while current liabilities are at P20.7 million, resulting in a net current position of P1.1 million.


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