Mohloai Mpesi
THE Auditor-General has issued an adverse opinion against the Lesotho Lowlands Water Development Project (LLWDP) Phase III after it failed to account for a M10 million loan from the Arab Bank for Economic Development in Africa (BADEA).
Auditor General, ‘Mathabo Makenete, said there was no proof that the Ministry of Finance and Development Planning had approved the loan as required.
As a result of this discrepancy, Ms Makenete issued a qualified audit opinion for the financial statements of the LLWDP Phase III for the year ending 31 March 2025.
A qualified audit opinion is issued when financial statements contain material misstatements in specific amounts, or when there is insufficient evidence for the auditor to conclude that certain amounts reflected in the statements are free from material misstatement.
The government received funding from several development partners — including the BADEA, Kuwait Fund for Arab Economic Development (KFAED), OPEC Fund for International Development, Saudi Fund for Development (SFD), Abu Dhabi Fund for Development (ADFD), and the African Development Bank (AfDB) — to implement the Lesotho Lowlands Water Development and Sanitation Project Phase III (LLWDSP III).
The project is intended to supply Botha-Bothe and surrounding settlements, along with some northern areas of Leribe, with potable water and sanitation services sufficient to meet demand up to 2045. It also supports national social and economic development targets aligned with Sustainable Development Goal No. 6 (Clean Water and Sanitation) and Goal No. 3 (Good Health and Well-being).
Ms Makenete’s audit report, tabled in the National Assembly this week by Natural Resources Minister Mohlomi Moleko, found that M4,668,169 was not approved,?and that there was no proof the Ministry of Finance and Development Planning?received M5,545,193 from the?BADEA.?Together, these discrepancies point to an unexplained M10 million received by the project.
The audit report also raises concerns regarding unexplained adjustments of M394,838 and M194,644 relating to AfDB direct payments.
She further flagged adjustments amounting?to M589,482 in AfDB direct payments and consulting services, adding that there are discrepancies of M204,502 and M2899 between recalculated translated cash balances and the figures reflected in the financial statements.
“There are unexplained adjustments of M394,838 and M194,644 in the African Development Bank direct payments and consulting services respectively, which I could not substantiate.
“The recalculated translated cash balance for the ADB, CBL, USD and OPEC, CBL, USD accounts differed from the financial statements balances by M204,502 and M2899, respectively,” she said.
“Bank confirmations for the bank balance of M4,668,169 were not received from the banks, and I could therefore not substantiate the ownership and accuracy of the bank balance.
“There is no evidence that the Saudi loan (BADEA) transactions amounting to M5,545,193 were approved by the Ministry of Finance (Debt Management Department), as required in the project’s financing guidelines,” she stated.
She said the audit was conducted in line with the International Standards of Supreme Audit Institutions (ISSAI).
“I am independent of the project in accordance with the International Ethics Standards Board for Accountants (IESBA) Code of Ethics for Professional Accountants, together with the ethical requirements relevant to the audit in Lesotho. I have fulfilled all ethical responsibilities in accordance with these requirements and the IESBA Code.
“I believe the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion,” she said.