Saturday, May 28, 2022

KMC Registered Budget Deficit in 2019

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By Yankuba Jallow

The financial statement and audited report of the Kanifing Municipal Council (KMC), which was presented before the National Assembly indicated that the Council in 2019, had a budget deficit of thirteen million three hundred and sixty-six thousand, seven hundred and forty-seven dalasi (D13,366,747), meaning that Council’s expenditure far outweighed its revenue, for the year in review.  Total revenue for Council in 2019 was one hundred and eighty million, four hundred and fifteen thousand and sixty-two dalasi (D180,415,062) while their expenditure was one hundred and ninety-three million, seven hundred and eighty-one thousand, eight hundred and eight dalasi (D193,781,808) only.

This revenue of the KMC was derived from licence charges which amounted to a total of D180,415,062 for the year, in taxes, rents, fees, other incomes, interests and dividend.

On expenditure, KMC spent D11,793,378 on the Mayor/Chairperson; D30,509,546 on general administration; D1,851,453 on Finance and Accounts; D4,518,815 on planning and development; D3,031,295 on utilities; D3,400,328 on repairs and maintenance; D11,582,514 on general expenses and D127,094,478 on capital expenses, bringing the total on expenditure to D193,781,808.

KMC as of 31 December, 2019, owed the Gambia Revenue Authority (GRA).

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The audit report by the National Audit Office of the Gambia indicated that the KMC did not indicate the reporting framework it adopted and followed for its financial report, adding the internal policy and procedural documents for the Council on financial matters has not addressed the subject either.  The auditors said the preparation of the financial statement including the accounting treatments leading to the results, will not be known and therefore may not be correctly determined.

“There is also the risk that a standardized approach to the accounting and reporting financial transactions was not followed in the preparation of the financial statement, leading to such unreliable results and/or mis-statements,” the audit report stated.

The auditors recommended for Department of Finance to lead the KMC through the assessment of the current reporting environment of the Council, with a view to establish and adopt clear and appropriate financial reporting frameworks for the preparation and presentation of its financial reports.

“This will enable users to gain meaningful information about the Council in order to take appropriate decisions,” the audit report stated.

Regarding the auditors findings to the query, the Council said they are operating on cash basis as dictated by the Financial Manual for Local Government Authorities which provides the template for the reporting framework, in the preparation of the financial statement. The Council stated that they have taken note of the recommendation of the auditors and promise to assess the current reporting environment of the Council and adopt a clear and appropriate financial reporting framework.

The auditors said their review of the ledgers for the period 2017 to 2019, revealed a number of inconsistencies and unexplained treatments. The auditors discovered that KMC included unrelated entries within their accounts of different nature, saying there are numerous such entries throughout the years, between 2017 to 2019.

Also, the auditors discovered numerous instances of similar entries having opposite effects on the account, thus distorting the outcome of the results.

The auditors revealed that there were numerous payments described as “honorarium” for services that appeared to be typically day-to-day activities of members of Council, but they were paid such allowance for having performed them; that there were a number of such payments made to the National Disaster Management Agency (NDMA) for an unexplained service.

On the implication of the report, the auditors indicate that the financial statement may not reflect the true state of affairs of the KMC, if it contains materially misleading information, and recommended for the Department of Finance to perform a comprehensive review of the accounts, with a view to adjusting all mis-statements contained therein. 

On the contrary, however, KMC is said to have registered a budget surplus of thirty million, one hundred and eighty-four thousand, eight hundred and eighty dalasi (D30,184,880) in 2018; indicating that in the same year, Council garnered a revenue of D142,473,020 and made an expenditure of D112,288,140 leaving a surplus of D30,184,880, meaning the revenue collected for the year, was greater than what was spent.

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