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Auditor General blasts government institutions for financial mismanagement

Wednesday November 23, 2022


Mogadishu (HOL) - Somalia's Auditor General Mohamed M. Ali released a scathing report on Tuesday highlighting glaring errors in the management of government expenditures, contracts, incoming and outgoing funds, and budget subsidies.

The Auditor General's annual compliance report investigated 29 institutions, including ministries, government agencies and two embassies. Out of the total $666m of the 2021 budget, the report audited $382m.

The reports found evidence that Somalia's government entities did not comply with financial regulations.

It was discovered that none of the 29 government entities and the two embassies had annual procurement plans based on their approved national budgets.

The federal government of Somalia borrowed $96 million from the Central Bank of Somalia ( $21,992,191) and the IMF ($74,373,383), which the Auditor General says he was " neither provided with evidence of parliamentary approval nor borrowing agreements for these two facilities."

" Furthermore, there were no disclosure notes on these borrowings in the financial statements contrary to the reporting requirements of the Cash Basis IPSAS. "

The AG added that he also raised concerns about an interest payment of  $14,605,118 on the previously mentioned loan from the Central Bank, which would constitute 62% of the principal.

Ali said the Ministry of Finance's fiscal statements did not disclose the reason for borrowing, the lending terms, or the interest rates for the loans and called for a special investigation.

The Auditor General's report also found that federal government agencies signed 105 agreements valued at 14 million dollars that were not registered with the Office of the Attorney General.

The report added that government institutions deposited $5 million into unauthorized bank accounts outside the Treasury Single Account, and $13 million worth of grants were approved outside the national budget.

Somalia's diplomatic missions abroad were also scrutinized and found to have improper financial management.

According to the compliance report, over $1M was accumulated and used at source by Somali Embassy in Kenya. Some funds were not deposited in a bank or the government's Treasury Single Account.

The Somali Embassy in Kenya said it used the funds for its operating costs since the Ministry of Finance does not allocate a budget to run the diplomatic mission.

Read the FULL reports HERE:


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