Revenue write-off

THE Ministry of Agriculture’s arrears of revenue for the second quarter of 2016 reported to the Ministry of Economy were $27,296, however, $777,106 in revenue arrears was not included as it was written-off by the ministry without prior approval from the Ministry of Economy.

In his 2016, audit report of the Ministry of Agriculture, Auditor-General Ajay Nand said review of the aging of arrears of revenue indicated that $694,611 or 89 per cent of the ministry’s revenue arrears that was written-off had been outstanding for more than five years.

The report stated the arrears were mainly for the outstanding repayments from farmers for assistance provided to them under different agricultural programs in previous years.

Mr Nand’s report also said there was also no evidence of whether the Minister for Economy had delegated powers to the ministry to write off losses.

He said the findings of the audit indicated weaknesses in outstanding revenue collection procedures and documentation within the ministry.

“Furthermore, the exclusion of a significant amount of arrears of revenue because of unauthorised write-off has resulted in the m inistry’s arrears of revenue balance being understated as at 31 July 2016,” stated the report.

The audit report recommended the ministry to ensure that effective controls were in place to avoid accumulation of arrears of revenue.

It also advised the ministry to have proper documentation and follow up are done to collect arrears and to ensure that stringent measures are taken when arrears are not paid when due; and requisite approval is obtained for write-off of arrears of revenue.

In its response to the audit findings and recommendations the ministry said the ministry did not include the arrears of revenue amounting to $777,106 since it was not captured as Arrears of Revenue in the Financial Management Information System (FMIS).

It said the Auditor-General’s Office should note that this arrears -off due to lack of supporting evidence.

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