The Auditor-General was unable to verify millions of dollars in financial balances at the Nausori Town Council after finding significant gaps in records and supporting documentation covering the 2019 to 2021 financial years.
The concerns are detailed in the Report of the Auditor-General on Municipal Councils, recently tabled in Parliament, which records a modified – disclaimer of opinion for Nausori Town Council.
The report said auditors could not obtain sufficient and appropriate evidence to verify opening balances and determine their impact on subsequent financial statements.
Among the issues identified were the way the council recorded its cash transactions.
The report said receipts and payments were entered into the cash general ledger using bank statements rather than original source documents such as receipt books.
It also found transactions from one of the council’s bank accounts were not recorded in its accounts, while a register for cancelled and stale cheques was not maintained and cheque books were not provided for audit.
Significant concerns were also raised over millions of dollars in receivables.
The council reported Trade and Other Receivables of $3 million in 2019, $3.02 million in 2020 and $3.56 million in 2021, but could not provide subsidiary listings supporting most of these amounts.
Auditors were also unable to verify an Asset Revaluation Reserve of $6.09 million, while the council had not conducted annual boards of survey to physically verify assets.
The report further revealed the council recorded borrowings from the Fiji Development Bank of $10.37 million in 2019, $10.50 million in 2020 and $10.49 million in 2021.
However, bank audit confirmations and original bank statements were not provided to auditors to verify the balances.
Questions were also raised over operating revenue.
The council reported rates income of $795,455 in 2019, $716,561 in 2020 and $1.23 million in 2021.
The 2019 accounts also contained $6.97 million classified as unidentified revenue.
The Auditor-General said transactions had been recorded directly from bank statements instead of invoices and receipt books, while copies of invoices were unavailable for verification.
The audit consequently could not determine whether adjustments were required to several areas of Nausori Town Council’s financial statements for the three-year period.
