By Chernoh Alpha M. Bah, Matthew Anderson, and Mark Feldman
Sierra Leone’s Maritime Administration (SLMA), the country’s regulatory body responsible for the development of improved standards of performance and practice in the shipping industry including registration of ships and other vessels, could not account for more than Le27.2 billion Leones in maritime revenues collected during the fiscal year 2019. An advance copy of an internal government audit for fiscal year 2019 seen by the Africanist Press clearly state that an inspection of revenues reported in the maritime administration cashbook and the bank statements shows that a total of Le27.2 billion of the maritime revenues generated in 2019 were not deposited into the relevant bank account by officials of the Sierra Leone Maritime Administration.
“A comparison between revenue generated as per cashbook was Le68,744,053,669.74 and revenue as per bank statement as Le41,501,540,716.86, leaving a difference of Le27,242,512,952.88 not banked,” the auditors said, adding that the institution did not provide auditors with the requested receipt books to enable them undertake complete audit exercise of SLMA’s financial activities for January to June 2019, the first half of the fiscal year.
“SLMA did not provide receipt books for audit purposes for January to June 2019,” they said, adding also that the Maritime Administration did not submit records of shipping documents covering the period January to September, 2019 thereby affecting their ability to assess the exact amount of revenues collected from freight levy, licensing fees, and other revenue streams.
“We were also not provided with documents relating to other revenue streams such as internal ship registrations, coxswain license fees, and annual boat registration fees,” they stated. Auditors say they discovered a huge discrepancy between revenues recorded in the Automated System for Customs Data (ASYCUDA) as freight levy and those reported in the maritime administration’s cashbook.
“Total revenue deemed to have been collected as freight levy, according to ASYCUDA records was Le43,667,391,003.18. However, the cashbook disclosed Le19,662,448,930.26, resulting in a difference of Le24,004,942,072.92 not recorded in the cashbook,” they said.
The Sierra Leone Maritime Administration could also not provide evidence that they reported their debtors for the year ended 31st December 2019 to the National Revenue Authority (NRA) as required by Section 12 of the Finance Act, the law governing the collection and management of state revenues. “Hence, SLMA debtor valued at $2,241,723.91 for 2019 was not recorded in the revenue arrears in the General Purpose Financial Statements of the Consolidated Fund for the year ended 31st December, 2019,” they said, noting much needed government revenues might have been lost because they couldn’t ascertain whether the taxpayers in question paid the correct taxes due to government.
“There is a high risk that the much needed financial resources of government might have been lost. It would be difficult to ascertain whether the taxpayers in question paid the correct taxes due,” they noted. Auditors have asked the leadership of SLMA to provide satisfactory explanation, along with documentary evidence, as to why the total revenues of Le27.2 billion were not deposited into the bank account. They also request that the SLMA submit a reconciled information on freight to ASYCUDA world from the Customs Department and updated cashbook to the Audit Service Sierra Leone, the country’s auditing agency within two weeks upon receipt of the audit report.
“They should submit all relevant documents in respect of revenue collected by SLMA within 15 days upon receipt of this report. There is a possibility that the revenue arrears disclosed in the financial statement may be misstated, thereby misinforming users of the financial statement,” they said, adding that the commissioner general of Sierra Leone’s National Revenue Authority (NRA) should ensure that the management of SLMA transfer all its debtors to the NRA for onward collection of all revenue arrears and that evidence showing that the outstanding revenues have been collected must also be submitted to the Audit Service. Sierra Leone’s Maritime Administration (SLMA) has been the center of corruption scandals and power struggles since the Bio administration assumed power in mid 2018. In May this year, eight senior officials were suspended by a presidential order which instituted an administrative inquiry into the activities of the institution.
A letter signed on May 19, 2020 by the president’s secretary Julius Sandy stated that the inquiry was designed to look into “technical and financial management of the Sierra Leone Maritime as well as any other matter that may have impeded the proper and productive management” of the institution. The action followed the sudden suspension of the institution’s executive director, Ken Philip Sondai by the Transport and Aviation Ministry for alleged insubordination, a decision challenged by the SLMA board leadership. A previous director, Sarah Bendu was equally sacked on corruption allegations. In mid May 2020, the Anti-Corruption Commission (ACC) likewise indicted SLMA’s procurement head Sahr Kemokai on procurement related charges allegedly committed in 2015. A new replacement to Sondai has since been appointed by the president whilst the inquiry was in progress.
It is not known whether the NRA and SLMA officials have taken action on the measures recommended by the 2019 internal audit at the time of this publication. Africanist Press couldn’t reach the relevant officials in the respective departments for comments on the issues mentioned in the report despite repeated phone calls to the officials concerned.
However, the 2019 audit report, which is yet to be released, contains jaw-dropping evidence of pervasive corruption and graft across government in key ministries, departments, and agencies. It documents details of financial activities in Sierra Leone for fiscal year 2019 painting a grim picture in public finance management during the first full year of the Bio administration. In one instance, auditors noted how revenue arrears submitted by the National Revenue Authority (NRA) of domestic taxes amounted to Le278,894,291,662.29, but confirmation letters were not received from selected debtors to confirm the existence and the accuracy of the amount stated in the report. Auditors also underlined evidence of gross discrepancy in the revenue arrears reported in the financial statements for 2019 in the customs department, stated to be Le21,386,071,017, whereas the updated report of revenue arrears from the debt management unit of customs is in the amount of Le7,448,291,778.23; thereby showing an overstatement of Le13,937,779,238.89 for fiscal year 2019.