Tax, Payroll & Contract Issues Flagged
Auditor General, Abdul Aziz
By Ishmail Saidu Kanu
The 2024 Auditor-General’s Annual Report has uncovered financial and compliance challenges across 22 Local Councils during the financial year ended 31st December 2024, with total irregularities amounting to NLe7,926,195.40.
In line with Section 88(2) of the Local Government Act 2022, the Audit Service Sierra Leone conducted financial and compliance audits to assess whether councils’ financial statements were free from material misstatements and whether internal controls complied with relevant laws and regulations.
The report notes that local councils continue to face challenges in revenue mobilisation, service delivery, financial reporting, supervision of devolved functions, and project implementation.
Common issues identified include procurement breaches, unsupported expenditures, and uncompleted works, which have affected key services such as health, sanitation, and rural infrastructure.
According to the report, the largest irregularities were linked to taxes, including withholding tax and PAYE (NLe3.04 million), contract management (NLe1.53 million), payments without supporting documents (NLe1.35 million), asset management (NLe1.30 million), payroll management (NLe605,556), and revenue management (NLe96,560.93).
On audit opinions, 21 local councils received unmodified opinions, indicating that their financial statements largely complied with reporting standards. However, Bonthe District Council received a modified opinion due to issues such as improper recording of own-source revenue, payments without adequate documentation, and misclassified expenditures in the PETRA accounting system.
The report also highlights budgetary challenges, noting that while NLe418.81 million was budgeted for transfers to local councils in 2024, only NLe328.59 million was actually released, resulting in a shortfall of NLe90.22 million, representing 21.54%. Delays in the release of funds disrupted planned activities and contributed to rushed spending later in the year, increasing the risk of weak internal controls.
Despite these challenges, the report records an improvement in own-source revenue mobilisation. Local councils collected NLe149.95 million out of a budgeted NLe168.08 million, achieving 89.21% of their target. Five councils exceeded their revenue targets, although 17 councils continued to face challenges such as weak CADASTRE systems and limited community engagement.
The Auditor-General emphasized the need for stronger internal controls, timely fund disbursements, and improved revenue systems to enhance accountability, service delivery, and sustainable local governance.
