This report presents the findings of the Auditor General on the consolidated financial statements of Jubaland State of Somalia for the year ended 31 December 2022 . The audit was conducted in accordance with the Public Financial Management Act 2017 and International Standards of Supreme Audit Institutions.

The Auditor General issued a qualified (modified) audit opinion, indicating that while the financial statements largely comply with applicable standards (IPSAS cash basis), there are significant issues that affect their overall reliability. Key concerns include unsupported receipts amounting to USD 945,600, payments totalling USD 2.7 million with no evidence of occurrence, and USD 3.7 million in payments lacking adequate supporting documentation.

The audit identified systemic weaknesses in public financial management. Revenue collection processes remain unreliable due to weak internal controls, underutilisation of the Revenue Management System, and lack of reconciliation between collected and recorded revenues. These gaps increase the risk of revenue leakage and misstatement.

On expenditure, a substantial portion of payments lacks proper supporting documentation such as invoices, contracts, and delivery confirmations. This undermines transparency and accountability and exposes public funds to misuse.

Procurement practices continue to deviate from legal requirements, with frequent reliance on single-source procurement and lack of competitive bidding. This creates significant risks related to inefficiency, lack of value for money, and potential fraud.

Asset management systems are notably deficient. The State does not maintain a fixed asset register, assets are not tagged, and there is no structured system for tracking or verifying government property. This creates a high risk of loss or misappropriation of assets.

Budget execution remains weak. Out of an approved budget of approximately USD 53.3 million, only USD 37.5 million was realised, representing a shortfall of about 30%. This raises concerns regarding the realism of budget planning and forecasting.

Progress in implementing prior audit recommendations is minimal. Out of 18 recommendations from previous audits, only 2 were fully implemented, indicating weak follow-up mechanisms and limited accountability within government institutions.

Overall, the report concludes that internal control systems remain weak and largely unchanged from previous years, with persistent non-compliance with existing legal and regulatory frameworks. These deficiencies cast doubt on the accuracy and completeness of the financial statements and highlight the need for strengthened controls, improved compliance, and enhanced accountability mechanisms across government systems.