FY 2023 Annual Audit Report (Xisaab-Xirka 2023), Somali Version
Puntland State Government (Whole of Government) · Published June 30, 2024
Executive Summary
The Annual Audit Report of the Puntland State Government for the fiscal year ended 31 December 2023, published on 30 June 2024 by the Office of the Auditor General. The audit assessed the accuracy of the accounts prepared by the Office of the Accountant General, following International Standards of Supreme Audit Institutions (ISSAIs). The Auditor General issued a Qualified Opinion (Aragti Cillad Leh), citing missing supporting documentation for certain expenditures, taxes not withheld from some payments, and errors in the government debt register. The report also notes non-competitive awarding of certain contracts, uncollected revenue, and a 29% shortfall in expected revenue, driven in part by global economic pressures affecting domestic revenue collection. The report underscores the need to strengthen financial management and accountability across Puntland government institutions.
Audit Findings
Missing Supporting Documentation for Expenditures
High RiskPublic financial management rules require all government expenditure to be supported by complete source documentation.
Certain expenditures lacked the supporting documents needed to verify them (dukumentiyo ka maqan kharashaadka qaar).
Weaknesses in document management and expenditure control processes.
The propriety and accuracy of the affected expenditure could not be fully verified, contributing to the qualified audit opinion.
Strengthen expenditure documentation controls and ensure every payment is supported by complete records before disbursement.
Taxes Not Withheld from Certain Expenditures
Medium RiskApplicable tax law requires withholding tax to be deducted from qualifying government payments.
Withholding tax was not deducted from a portion of government expenditures (canshuur aan laga jarin qaar ka mid ah kharashaadka).
Gaps in payment processing controls and tax compliance checks.
Loss of government revenue and non-compliance with tax legislation.
Enforce withholding tax deduction at the point of payment and reconcile withheld taxes monthly.
Errors in the Government Debt Register
High RiskThe government debt register must accurately and completely record all public debt obligations.
Errors were identified in the government debt register (khaladaad ku jira diiwaanka daymaha dawladda).
Inadequate reconciliation and maintenance of debt records.
Government financial reporting on debt is unreliable, affecting fiscal planning and transparency.
Conduct a full reconciliation of the debt register and institute periodic independent verification.
Non-Competitive Award of Certain Contracts
High RiskPublic procurement rules require competitive processes for the award of government contracts.
Some contracts were awarded without competition (tartan la'aan oo loo xilsaaray qaar ka mid ah heshiisyada).
Inconsistent application of procurement procedures.
Reduced value for money and elevated risk of favouritism in public contracting.
Subject all qualifying contracts to competitive bidding and document any justified exceptions.
Uncollected Revenue and Revenue Shortfall
Medium RiskGovernment entities must collect and remit all revenue due under the approved budget.
Some revenue went uncollected, and overall revenue fell 29% short of expectations, partly due to global economic conditions affecting domestic collection.
Collection weaknesses combined with external economic pressures.
Reduced fiscal space for planned government programmes and services.
Strengthen revenue collection systems and adopt realistic, risk-adjusted revenue forecasting.
Recommendations Tracker
| Ref | Action Required | Status |
|---|---|---|
| R-001 | Strengthen financial management practices and accountability across Puntland government institutions, as called for in the report | In Progress |