THE Audit Office has found a number of shortcomings in the financial statement for the Institute of Applied Science and Technology (IAST) for year ending December 31, 2010.According to Auditor-General Deodat Sharma, while bank- confirmation letters reflect a balance of $45.784M at December 31, 2010, but nothing to show opening and closing balances at the end of each month for the entire year under review. As a result of this, he said, the overdraft of $844,499M reported in the financial statements could not be verified.
The Audit Office has also revealed that the cash book for the Institute was not properly maintained, and there were no opening and closing balances for each month.
Further, a Suspense Account of $32.6M was reported in the financial statements, and this would have resulted in an under/over statement in one or more accounts, as the Statement of Cash Flows presented was not balanced.
According to the auditors’ report, the amount of $153.545 million was reported as net book value of the fixed asset for the year under review, and the institute did not maintain a Fixed Assets register and general ledger.
Included in the figure were assets acquired in the previous years to the value of $4.260 million, which could not be verified, since relevant records and schedules were not presented to substantiate the existence of such assets.
The auditors have recommended that IAST management introduce and maintain a Fixed Asset register, which is required to be kept as a permanent record.
It was also found that the Institute maintained a revenue account with Republic Bank Limited for the year under review.
The Bank’s confirmation letters reflected the balance at December 31, 2010 for the year under review as $6.190 million.
However, a cash book was not maintained, nor was the bank account reconciled, and as such, the balance of $6.190 million reported as cash and cash equivalent for the revenue account could not be verified.
UNACCEPTABLE
“This state of affairs is unacceptable and should be corrected, since bank-reconciliation statements should be properly prepared and certified to validate authenticity. The statements should be properly stored and preserved for presentation to the auditors,” the audit report said.
The auditors also found that the amount of $50,000 was reflected as debtors in the financial statement for the period under review, but a general ledger was not maintained nor was a schedule of the debtors presented for the audit examination.
The non-maintenance of the general ledger made examination difficult, since pertinent details of the figure could not be verified. As a result, the completeness, accuracy and validity of the figure were not verified.
This aside, the report noted that an amount of $6000 was reflected as creditors for the year under review and the bank confirmation letters reflected the balance at December 31, 2010 as $45.784 million.
The cash book for the general account, the auditors said was not properly maintained and again, the opening and closing balances were not reflected at the end of each month for the entire year under review.
As a result, the overdraft balance of $844,499 reported in the financial statements could not be verified.
And for the Suspense Account of $32.6 million, the details and supporting documents were not presented to the auditors.
The audit report noted that since the Suspense Account is made up of un-reconciled balances that existed in the financial statements over a number of years, the amount of $32.6 million acts as a balancing figure in the Institute’s accounts.
“Given the circumstance, it would seem that material errors have occurred over the years, which have not been clarified to date,” the audit report said.