Pago Pago, AMERICAN SAMOA — “Not all Journal entries raised and posted into the accounting system have complete and proper supporting documents,” according to one of the findings in the Performance Audit report by the Territorial Audit Office (TAO) of the more than $14 million in federal CARES Act funding awarded to the Health Department (DoH) during the COVID pandemic.

Part five of the Samoa News report on the DoH audit looks at the “Journal Entries” finding and the concerns raised by TAO auditors” in a section called, “Documentation Not Retained for Journal — specifically for journal entries”.

The auditors explained that, transactions that record, correct or adjust financial transactions are made directly to the general ledger and are called “journal entries”. For entries selected for review, “we found out that not all journal entries have complete supporting documentation” filed, said TAO.

And the amounts of adjusting entries were substantial and source documentation and/ or other items necessary to substantiate the accuracy and appropriateness of journal entries were not attached and presumably were misfiled or lost.

Out of sixty five (65) journal entries selected for verification, TAO said only eleven (11) or seventeen percent (17%) of journal entries have complete supporting documentation. “Again, this was an audit concern and the department's filing system needs improvement,” the auditors point out.

In its recommendation, TAO said that providing appropriate supporting materials for a financial transaction is an essential element of internal control. Additionally, proper documentation gives the approver adequate details to ensure transactions are reasonable and accurate and helps satisfy audit requirements.

“Such adequate documentation shall be securely filed or sufficient reference information, to easily locate the adequacy of supporting documentation and must be retained by the [DoH] Finance Department at all times,” said TAO.

In its response, DoH management explained that completed journal entry packages with all supporting documentations are filed at the Department of Treasury's main finance division due to their responsibility of keying-in and posting. The journal entries received are initial drafts or copies.

“When a journal entry with all proper supporting documentation is needed, we contact our treasury analyst,” DoH explained further. “To avoid an immense amount of paperwork, the finance team is working on finding a cloud-based system to store electronic copies of completed journal entries to settle this finding.”

DoH management also said that ASG Treasury’s Finance Division is most often responsible to secure and file the journal entries as it is another core scope of their daily tasks.

DoH may prepare journals or adjust entries especially when urgent corrections or adjustments are needed to be in effect as soon as possible, thus the filing stays with the ASG Treasury since they keyed-in the entry or entries as well as posted it or them onto the accounting system, the One-Solution.

As such, DoH said, “those are the only entries that we could have filed, the journal entries that we submitted from our end.” Furthermore, journal entries for utilities and communications billings (ASPA, ASTCA) and the Indirect Cost are prepared, keyed in and posted at the ASG Treasury’s Finance Office.

AUDITORS REPLY

TAO auditors offered comments to the DoH management response.

“For transparency and best practices, the Department of Health shall ask [ASG] Treasury for complete copies of all journal entries passed for the record,” TAO auditors recommended. “Keeping complete supporting [documents] is an essential element of good internal control.”

Samoa News will report in future edition on details of other findings and recommendations by TAO.