South West State Annual Audit Report 2019 (English Version)

The FY 2019 Annual Audit Report for the Southwest State of Somalia presents the audit opinion, key financial results, and systemic issues affecting public financial management across the State. The audit was conducted in accordance with the Public Financial Management Act and the International Public Sector Accounting Standards (IPSAS) cash basis, with support from a private audit firm due to capacity constraints within the Office of the Auditor General. The Auditor General issued a Qualified Opinion, noting that significant payments lacked adequate supporting evidence and that a portion of reported grant income could not be verified with donors or the Federal Government.

The report highlights major weaknesses in revenue collection processes, including gaps in documentation, cash-based tax collection, inconsistencies between RMS and FMIS, and unexplained revenue fluctuations. On the expenditure side, deficiencies were identified in procurement practices, documentation of goods and services received, and cash-based payments to personnel, particularly within security forces. Broader control weaknesses were observed in payroll management, asset management, budgeting accuracy, and bank reconciliation processes.

Information technology environments also exhibit substantial risks, such as inadequate access controls, lack of system integration, undeveloped change-management practices, and the absence of a disaster-recovery framework. The audit further notes that most recommendations from the 2018 audit were not implemented, signalling persistent governance and control challenges.

Overall, the report underscores the need for stronger institutional capacity, improved financial controls, and sustained political and administrative commitment to reform in order to enhance transparency, accountability, and the integrity of public resource management within the Southwest State of Somalia.