By Kebba AF Touray
The Edward Francis Small Teaching Hospital (EFSTH) has defaulted on nearly seven million dalasis in staff contributions to a health sector credit union and failed to remit millions more in tax obligations, according to a special audit conducted by the National Audit Office (NAO).
In a detailed report covering the period from January 1, 2021, to April 30, 2024, the NAO disclosed that EFSTH owes the Medical and Health Services Cooperative Credit Union a total of D6,954,968.94, stemming from missed monthly contributions for December 2023 and January 2024.
The audit revealed that these missed contributions were the result of delayed subventions from the Ministry of Health. During interviews with auditors, the hospital’s finance director confirmed that penalties were incurred due to the ministry’s failure to release funds on time. The NAO estimates that this delay cost the hospital an additional D2,089,483.77 in penalties and interest.
“Delay in the contribution to Medical and Health Service Cooperative Credit Union would affect the ability of staff members to be able to secure loans and other benefits from the union,” the NAO stated. The report urged the Ministry of Health to settle the delayed subventions immediately and prioritize timely payments to avoid further financial penalties.
Beyond the credit union defaults, the NAO found significant non-compliance with tax laws. A review of EFSTH’s payroll records showed that D10,749,698.94 in income tax deductions were not remitted to the Gambia Revenue Authority (GRA), in violation of the Income and Value Added Tax Act of 2012. The auditors warned that this lapse could lead to additional penalty charges and possible legal action.
To address the matter, the NAO recommended that the hospital board immediately engage the GRA to establish a payment plan and begin settling the outstanding tax liabilities.
In another serious breach, the NAO found that EFSTH failed to deduct withholding tax from payments made to suppliers, amounting to D17,563,757.51. The failure to withhold taxes at the source violates statutory tax requirements and represents a significant loss to the state.
The auditors urged EFSTH management to begin deducting withholding tax in compliance with legal requirements. In its response, hospital management agreed with the findings and confirmed that withholding tax deductions have now commenced. Management also stated that suppliers have likely included these transactions in their tax returns and therefore should not be taxed twice.
Regarding the unpaid staff contributions, EFSTH management acknowledged the default and noted that a formal request for subvention recovery had been submitted to the Ministry of Health, though the funds had yet to be received.
On the issue of unremitted income taxes, management said that engagements with the GRA had begun, including a meeting between senior EFSTH officials and the Commissioner General in July.
The findings of the audit are now under review by the Finance and Public Accounts Committee (FPAC) of the National Assembly. EFSTH management is expected to reappear before the committee to clarify the reported financial and compliance failures.
