Somalia’s audit unearths irregularities, embezzlement of funds

Somalia’s Office of the Auditor General has released results of forensic audits which highlight significant financial irregularities and embezzlement with several key government agencies.

In a move that provides a critical step towards greater financial transparency and accountability, the audits were launched following a similar compliance exercise in 2020 for the fiscal year 2019, which identified suspicious activities across multiple government sectors.

The investigation spanned three years and rigorously examined the financial activities of various departments.

The report leaves 22 offices on the spotlight, including 15 from the Immigration and Nationality Directorate, 3 from the Ministry of Finance and Central Bank, and 4 officers from the Ministry of Labour and Social Affairs.

Eleven of these officers have since been convicted of criminal activities, receiving prison sentences ranging from 1 to 9 years. Additionally, several individuals have been barred from government employment for five years.

Significant financial discrepancies uncovered

The audits revealed substantial discrepancies in revenue collection and deposition:

•In the work permits and visa extensions sector, a total of US $33,370,260 (about Sh4 billion) was collected, but only US $12,437,690 (about Sh1.6 billion) was deposited into the Treasury Single Account, leaving US $20,932,570 (Sh2.4 billion) unaccounted for.

•In the passport services sector, the audits found that of the US $41,804,998 (Sh5 billion) collected, nearly US $4,976,951 (Sh550 million) was unaccounted for.

The audit report indicates the findings underscore the urgent need for stricter financial controls and oversight within Somali government agencies.

Revenue increases post-audit

Further, the audits have led to a significant increase in monthly revenue for government services:

•The average monthly income from visa extensions rose from US $160,419.67 (Sh20 million) to US $439,045.00 (Sh55 million).

•For work permit services, the average monthly income increased from US $43,476.89 (Sh5.5 million) to US $358,400.00 (Sh45 million).

These increases highlight the effectiveness of the audits in identifying and rectifying financial mismanagement.

Positive impact on financial governance

 “The discovery of over US $25.9 million in embezzled funds is a clear indicator of the scale of financial mismanagement we have been able to address through our forensic audits,” stated the Auditor General.

The increase in revenue has empowered the Treasury Single Account to maintain government employees’ salaries without the need for additional support or loans from July 2023. The audits have also clarified the legal responsibilities of all authorized officers and their representatives, ensuring better management and oversight of government properties.

The Auditor General stressed that the findings emphasize the critical need for ongoing vigilance and robust financial oversight. By recovering millions of dollars in embezzled funds, the government is ensuring that these resources are redirected to their intended purposes for the benefit of the public.

“The figures uncovered in our forensic audits highlight the critical need for ongoing vigilance and robust financial oversight. By recovering millions of dollars in embezzled funds, we are ensuring that these resources are redirected to their intended purposes for the benefit of the public,” remarked the Auditor General.

While putting those embezzling funds on notice, the Auditor General also assured citizens of his office’s commitment to ensuring transparency and accountability within government operations.

With an estimated GDP of $15 billion, Somalia administration has stressed the need for self-reliance through agriculture, trade, collection of taxes and the fight against corruption.