The Ministry of Youth Empowerment, Sports and Culture Development paid rental fees while some of the buildings it intended to occupy were still undergoing construction.
In some instances the Ministry paid rental fees without having signed lease agreements documents seen by Sunday Standardhave revealed.
The documents also reveal misappropriation and misapplication of funds at the Ministry resulting from weaknesses in internal controls and this continued unabated.
According to a report signed by a certain B. Kobe on behalf of the Auditor General, dated 13 November 2017, it was discovered that a memorandum of lease agreement was signed with a company called The First Y2K Company Pty Ltd at a monthly rental of P4 222 509.30 for the offices in Central Business District in Gaborone.
“It surfaced during the audit that while the lease agreement was signed on the 5th June 2013 some payments were made before the signing of the lease. The following payments of rental were made prior to signing of that Memorandum of lease Agreement as follows; P3 749 131.65 and P4 241 931.65 on March 2013 and 30th April 2013 respectively. Audit enquiry could not be provided with satisfactory explanation to this effect,” reads the report.
The report says that on another related matter, in a communiqu├® from Department of Lands dated 27 February 2017, a proposal was made by Botswana Government for possible leasing of office space for a period of five years commencing 1stApril 2017.
“At the time of the audit, the following shortcomings were observed; there was no formal lease agreement entered between the lessor and the lessee for the building in question.”
It states: “It was also discovered that the proposed premises were not occupied at the time of the audit in July 2017 but rental continued to be paid. The lessor had been paid P989 520.00 and P1 979 040.00 on the 25th April 2017 and 4thJuly 2017 respectively while construction was ongoing.”
This matter, the report states, was deliberated during the exit meetings but no satisfactory explanations were forthcoming.
“It should however be noted that the issue of payments made prior to the signing of the lease agreement should be addressed,” the report says.
Similarly, the report says, parking bays for the proposed offices attracted rental fee while construction was still ongoing and P138 600 paid for the financial year 2015/16/17.
“Information provided for audit revealed that part of the proposed accommodation on plot 54 3972 (3 Story Building) was to accommodate the Gaborone Regional Office, as a way of bringing services to a central point. However, at the time of the audit, the Gaborone Regional Office still occupied the premises in the main mall (SAAG Investments Pty Ltd),” says the report.
It further states : “In the process, the report shows, SAAG Investments was paid P218 005.70 for the months of April to July 2017, while on the other hand The First Y2K Pty Ltd , was paid P989 520.00 for the same period.”
The Auditor General recommended that the matter should be investigated and further appraises the Auditor General whether termination of the lease had been made.
On other issues, the report which was addressed to the Ministry’s Permanent Secretary, Kago Ramokate, Kobe states that the audit was intended to provide overall assurance of the general accuracy and propriety of the accounting transactions and not to detect each every accounting error or financial irregularity.
According to the document, at the time of audit, three safes, serial numbered, 03676, S368 and 153275 were kept locked and unutilised. “Meanwhile, revenue collectors were using portable cash boxes for collection of daily cash. It was further observed that revenue collectors at administration section used desk drawers for daily collections of cash.”
Kobe stated that it was further observed that revenue collectors at the administration used desk drawers for daily collections of cash.
“This contravenes provision of financial instruction 902(4), which instructs how cash should be handled. It is therefore recommended that Financial Instruction should be adhered to,” he said.
Kobe cited a clause 2 of the Memorandum of Agreement between Ministry of Youth Empowerment Sports and Culture Development and Barclays Bank of Botswana, the latter was given the responsibility of disbursement of money to the beneficiaries and further to provide to the reports for the purpose of reconciliation.
“However, evidence of reports received and subsequent reconciliation had not been provided for audit,” said Kobe.
Touching on the National Internship Programme and allowance to the beneficiaries, Kobe said the First National Bank (FNB) had been providing the services of disbursement of Internship allowance to the beneficiaries countrywide. This service provision involves transactions of close to P2 million monthly.
“In spite of the significance of the amount involved, service contract and procurement documents in respect of this service provider could not be availed for audit. In the absence these documents, audit could not ascertain whether the decision to award was done in accordance with established procedures. However, at the time of audit, there was a balance of P1 745 664.90 which indicated that a huge balances accumulates unspent,” reads Kobe’s report.
He added that “It surfaced during the discussion that First National Bank charges P50 000 per month for maintaining this account. “It is recommended that this should be investigated and retrospective tendering being(sic) done.”
Kobe further states that an examination of records pertaining to Arts, Grants and Artifacts has revealed that procurement procedures as stipulated in the PPADB guidelines were not followed. Similarly supplies regulations and procedures were not taken into consideration when procurement was done.
“During the discussion with officer in charge, it was noted that some guidelines had been developed, to be used during the sourcing out of arts and artifacts. Furthermore, PPADB guidelines provides for the evaluation committee to be set up for the purpose of evaluating and recommending to the Ministerial Tender Committee Board (MTC). This had not been done,” said Kobe in his report.
He said for the year 2016/17 the total amount of P1 715865.75 was used for procurement of crafts and other related items.
“The value attached to items bought remains subjective and the authenticity of the expenditure incurred on these items could not be guaranteed. Furthermore, there was no proof of items having been received and subsequently taken on charge in supplies records,” the report says.
The document also show that an examination of payment vouchers relating to leased premises revealed that payments were made under expired lease contract amounting to P497 512.15.
“Some lease agreements had expired way back in 2011 but there had been continued occupation of the premises and subsequent payment of rental fees. This was found to be disturbing because Memorandum of Lease Agreement is a legal document that spelt out duties of both parties to the agreement. It is recommended that this matter should be investigated further,” Kobe stated.