The Auditor-General was unable to determine whether $1.25 million in cash-based revenue collected by the Suva City Council was complete, according to findings in the Report on Municipal Councils recently tabled in Parliament.
The issue is among several qualification matters identified in the council’s financial statements for the 2020 financial year.
The council recorded $4.08 million in fees, charges and rental income, which included $1.25 million collected from mini markets, stalls, car parks, the swimming pool and public conveniences.
According to the audit report, these revenue streams were collected on a cash basis.
The council had determined it was not practical to maintain controls over the collection of cash from these sources before the money was entered into its financial records.
As a result, auditors were restricted to examining amounts already recorded by the council and could not determine whether all revenue collected had been accounted for.
The report said the audit was therefore “unable to express an opinion whether revenue from these sources reported in the accompanying financial statements was complete.”
Concerns were also raised over $381,988 in inventory recorded by the council as at July 31, 2020.
Auditors were not provided an opportunity to attend the physical inventory count and could not verify the existence, completeness, accuracy or valuation of the stock through alternative means.
The uncertainty also meant auditors could not determine whether adjustments were required to the council’s cost of sales, profit or operating cash flows.
Another significant issue involved $3.81 million in Value Added Tax payable.
The report found the council had not reconciled taxable supplies reported in its VAT returns against revenue recorded in its general ledgers and the Statement of Tax account provided by the Fiji Revenue and Customs Service.
Consequently, auditors were unable to determine whether adjustments were required to either the $3.81 million VAT payable balance or the council’s reported net profit for the 2020 financial year.
