This report presents the findings of the for the financial year ended 31 December 2023, submitted in accordance with the Public Financial Management Act 2017 and the Audit Act 2016. It provides an independent assessment of the Government of Jubaland’s financial performance, compliance, and internal control systems.

The Auditor General issued a qualified audit opinion, indicating that while the financial statements generally present a fair view of the State’s financial position, there are material issues affecting completeness, accuracy, and reliability. These include unsupported expenditures, insufficient documentation of revenues, and misclassification of expenses within the budget framework .

Key audit findings highlight significant weaknesses in public financial management:

Revenue collection and recording systems remain inadequate. A total of USD 4,848,333 in revenue lacked sufficient supporting documentation, and manual collection processes continue to be used, increasing the risk of misstatement and leakage. Weak integration between systems such as RMS and FMIS further limits transparency and reconciliation.

Expenditure management presents serious control deficiencies. Payments amounting to USD 7,158,608 (15% of total expenditure) were not supported by adequate evidence, including missing procurement records, contracts, and delivery confirmations. In addition, USD 1,229,715 in expenditures were incorrectly classified under budget lines, undermining the credibility of financial reporting.

Budget performance reflects under-execution, with total expenditure of USD 46.5 million against an approved budget of USD 57.9 million, resulting in a variance of approximately 19.6%. This indicates weaknesses in budget planning, forecasting, and execution capacity.

Procurement processes are not consistently compliant with established standards. Instances of single sourcing, lack of competitive bidding, and incomplete procurement documentation were observed, raising concerns over value for money and fairness.

Asset management systems are weak and incomplete. The fixed asset register does not capture all government assets, including land, buildings, and vehicles, and lacks records of additions and disposals. Asset verification and tagging procedures are also not in place.

Institutional and governance controls remain insufficient. The internal audit function is ineffective, there is no audit committee, and key policies such as risk management and debt management frameworks are absent. Multiple payroll systems are in operation without clear justification, increasing the risk of inefficiencies and irregularities.

Follow-up on prior audit recommendations remains limited, with minimal progress observed. This reflects weak accountability mechanisms and insufficient enforcement of corrective actions.