Audit finds…MMA breached its Act on several occasions

Jun 07, 2016 News

A Forensic Audit into the Mahaica Mahaicony Abary – Agricultural Development Authority (MMA-ADA), during the period – January 1, 2012 to May 31, 2015, has found that the Authority on several occasions had breached its Act.

According to the report, the Authority employed a fulltime Executive Chairman which was in breach of the MMA-ADA Act. The Act states that a Chairman can be appointed but not an executive.
Management responded to this finding stating that the appointment was approved by the Minister of Agriculture and “ceased” when the life of the previous Board ended on June 2015.
The MMA-ADA Act also requires the appointment of an internal auditor (Section Five Subsection 1H). However, during the period under review, an internal auditor was not employed by the Authority.
The MMA-ADA management acknowledged this finding and stated that an auditor was employed from July last year.
Annual financial statements were not prepared for the period under review and were not submitted to the Minister of Finance, the auditors stated. This was a “non-compliance” with the MMA Act, which specifies these financials be submitted.
During the time that the auditors would have submitted their findings to management for their response, the MMA-ADA stated that they had acknowledged that Statements were not sent to the Minister of Finance. However, at the time they submitted their response, they assured that measures will be put in place to correct this.
Also, during the period under review, the auditors found that there was no Executive Committee to the Board of Directors – this was not in compliance with the MMA Act (Second Schedule) Section Four.
It was also revealed that the bank accounts used (RBL; 686-106-6, 763-770-6, 686-199-1) were not approved by the Minister of Finance. This was not in compliance with the MMA Act (Financial Structure, Water Charges & Accounting Procedures) Section 25 Sub section 2 which requires the prior approval of bank accounts used by the Authority to make deposits.
The report also showed that there were no separate bank accounts for current expenditure and capital expenditure. This was not in compliance with the MMA Act (Financial Structure, Water Charges & Accounting Procedures) Section 27 – Accounts, which requires the Authority to have separate accounts for capital and current expenditure.
With regard to these findings, management had stated that it had no record on file that these accounts were opened in keeping with the Act. Management had also stated that they were engaging the Board of Directors who was also addressing the issue of having separate accounts for Capital and Current expenditure.
Also, there was no system in place for tendering; which was not in compliance with the MMA Act Section 30 – Tendering and Force Account, the auditors stated.
No response was given to this finding.
The auditors recommended that the Board of Directors should ensure compliance with the Act at all times.

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