Gambia Launches Probe Into Over One Billion Dalasis in Misclassified Transit Accounts

The National Audit Office (NAO) of The Gambia has instructed the Accountant General’s Department to launch an investigation into uncleared and misclassified transit accounts amounting to more than one billion dalasis (approximately US$13.7 million).

The directive was issued in a management letter accompanying the audit of government accounts for the 2024 fiscal year.

In its findings, the NAO explained that transit accounts are temporary holding accounts used to facilitate the transfer of funds between different accounts or entities. These accounts are expected to be cleared and reduced to zero at the end of each month or financial year.

However, the audit revealed that a review of the trial balance showed several bypass accounts with outstanding balances that remained uncleared at year-end. These balances were subsequently misclassified and mapped under various notes in the financial statements, leading to material misstatements.

Given the nature of these accounts, the NAO stated that they do not represent actual receivables or payables. As a result, mapping them under Note 17 led to an overstatement of receivables by GMD 1,072,963,779.44 and payables by GMD 2,913,828,075.25.

According to the NAO, this means that the balances disclosed as receivables and payables in the statement of financial position are overstated. The NAO noted that the presence of uncleared bypass accounts points to weaknesses in account monitoring and reconciliation processes.

Classifying the issue as high priority, the NAO recommended that the Accountant General investigate and clear all transit accounts, as they do not constitute actual receivables or payables.
In its response, management explained that accounts payable (AP), accounts receivable (AR), and other bypass accounts are established to facilitate the transfer of transactions between budget entities. These accounts are intended to be cleared once the transaction cycle is completed and the corresponding entries are posted in the cash book.

Management further stated that where transaction cycles are not finalised by year-end, the remaining balances in bypass accounts are classified as either other assets or other liabilities.
It added that further work has been undertaken to clear the balances, significantly reducing the amounts involved, and that efforts to fully reconcile the accounts will continue throughout 2025.

Bakary Touray Jr.