The Editor Speaks: The Qualified Audit Reports

ArchiveOct 29, 2014

2 min read

Control of system generated transactions: We noted that there were various "system generated accounts" in the accounting records with material transactions. Our audit tests found that management did not have proper control and oversight over these accounts as there were automatic postings done without involving the Ministry and no review done by senior management. The risks associated with transactions being posted outside the Ministry's internal accounting system are significant. As management does not have full control over these accounts, the opportunity for fraud and abuse is significant and it is impossible to ensure the financial statements represent a fair representation of the transactions carried out in the Ministry.
Funds being spent on abandoned building: We noted during the audit for the year ending 30 June 2011that the Ministry paid utilities and security expenses of approximately $7k for the Joyce Hylton building. Further enquiry indicated that the building had been unoccupied for several years and had in fact been condemned by the Public Works Department and written off the books of the Ministry. During the year ending 30 June 2012 the Ministry resolved this matter and stopped making these payments.
Utilities expenses: We found that there was no metering capacity for the utilities costs incurred by at the Flagship Building in 2010-11 and the Ministry was being invoiced on a formula which management could not understand or explain. The Ministry subsequently negotiated a new lease and will cease to occupy the Flagship Building starting in 2013-14.

Published October 29, 2014