By Kebba AF Touray
The National Audit Office (NAO) has raised concerns over uncleared transit accounts amounting to more than GMD 1.6 billion in its management letter on the government’s 2023 financial statement. According to the NAO, the total sum involved stands at One Billion Six Hundred and Eighty-One Million Four Hundred and Ninety-Four Thousand Two Hundred and Twenty-Six Dalasi and Ninety-One Bututs (GMD 1,681,494,226.91).
In the letter, the NAO reported, “We noted that the transit account for accounts payable amounting to GMD 1,681,494,226.91 and for accounts receivable amounting to GMD 1,646,323,799.78 remained uncleared.” The audit revealed that these issues have persisted since 2019 and remained unresolved through the end of the 2023 financial year.
Transit accounts, as explained by the NAO, are temporary or ‘bypass’ accounts used to facilitate the movement of funds during the processing of government transactions. These accounts are expected to be cleared at the close of each financial year once transactions are completed. However, the audit noted, “Amounts in the transit accounts were not cleared at the end of the financial year.”
The NAO highlighted several risks arising from this practice. “There is a risk that corresponding debit entries were not made when payments were processed, which can result in balances not being cleared at the year-end. There is also a risk that payments were cancelled but no debit entries were made to reverse the initial credit entry,” the NAO stated.
The unresolved balances, the NAO noted, could lead to misstated financial statements, as they may be inaccurately reported as assets or liabilities, thereby distorting the government’s true financial position. “This also indicates weaknesses in transaction processing controls and financial closing procedures,” the NAO added.
In response, the Accountant General’s Department acknowledged the issue, stating that, “The reporting unit is currently working on clearing these transit accounts. However, it is important to note that due to the nature of Government operations, some of the transit accounts will be cleared in subsequent periods.”
Despite this assurance, the NAO emphasized that the matter would be tracked and verified in the system for the next period, underscoring that the issue remains unresolved for now.
The NAO recommended that the Accountant General’s Department “implement strict procedures, including timely reconciliation and stronger controls, to fully clear transit accounts by year-end and improve financial reporting accuracy.”
Details of the uncleared balances are provided in appendix F of the audit report.
