Noncurrent Assets

132. The initial review of the financial statements for the Projects for FY07 and FY08 raised
concerns regarding noncurrent assets as there were significant errors on the face of the
annual financial statements and an absence of any record of disposals. These concerns
along with issues flagged in FM correspondence, and allegations received by INT
concerning vehicle and computer procurements, warranted the extension of the audit
procedures of noncurrent assets.

133. In meetings with project staff, INT was initially informed that:
• vehicles from the initial ALRMP project were inherited by ALRMP II;
• no disposals had occurred of any vehicles prior to 30 June 2008;
• since June 2008 some vehicles had been ‘boarded’ or sold;
• the project staff were unaware of a policy with regard to the recognition of the
disposal proceeds; and
• vehicles were centrally procured but ‘allocated’ to Districts.

134. INT determined that there does not appear to be a consistent approach or any policies or
procedures governing the management and disposal of vehicles funded by the project or
its predecessors. It is unclear why all or some GOK regulations were not applicable to
noncurrent assets of the Project, especially as it was within a Ministry at all times.

135. The inability of the project to produce a comprehensive fixed asset register for the
project raises real risks that assets may not be fully utilized for the purposes of the
project. Subsequent to initial meetings in May/June 2009 between INT and project
staff, some fixed asset records for some districts were supplied to INT.

Project accounting records for noncurrent assets

136. Although the project recently adopted International Public Sector Accounting Standards
(IPSAS), no accurate record of the project’s noncurrent assets exists, for the project as a
whole, nor for each District. Although some districts maintained fixed asset registers
the audit found no evidence that regular stock takes occurred and not all information has
been captured or can be substantiated by reference to original vouchers.

137. Vouchers were identified during the course of the period audited that vehicles were
prepared for boarding (expenses were incurred to have the vehicles inspected which was
a prequalification to boarding and advertising expenses were incurred to advertise the
impending sale of the vehicles) prior to 30 June 2008. While the lack of a
comprehensive asset register makes the tracking of assets difficult, the obvious
assumption to draw from these expense items is vehicles have been ‘boarded’ prior to 30
June 2008, and in contradiction of statements made by project staff. ‘Boarding’ is the
term used by GOK to describe its procedures for the disposal of government owned
assets, especially vehicles.

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