Freetown, SIERRA LEONE – The Acting Auditor General has raised questions about Sierra Leone Commercial Bank’s (SLCB) handling of loans and advances, particularly those granted without collateral, according to the recently conducted Audit for the year 2022.
As of December 31, 2022, the Audit Service Sierra Leone (ASSL) found that non-collateralized loans, totalling SLE 41,488,000, were extended to Politically Exposed Persons (PEPs). The auditors highlighted the absence of established policies and procedures for granting facilities to these individuals and recommended the bank to formulate a comprehensive policy addressing this specific aspect.
A detailed examination of the bank’s books revealed discrepancies in the loans and advances schedule as of December 31, 2022. The schedule showed SLE 634,756,705.08, while the trial balance reflected SLE 524,147,024.49, resulting in a difference of SLE 110,609,680.52. The auditors recommended a thorough investigation and regularization of these discrepancies by the bank’s management.
In response, the bank clarified that, before audit adjustments, the gross loans and advances totalled SLE 463,105,269.39. Post-balance sheet date adjustments affected several accounts, including Golden Quarry, Pavi Fort, Hajj Account, and National Revenue Authority, totalling SLE 171,651,435.62. Despite the bank’s explanation, the auditors maintained that the difference between the schedule and the trial balance remained unresolved.
Additionally, the audit revealed that facilities amounting to SLE 278,670,430.71 were granted without collateral. Concerns were raised about instances where the collateral Force Sale Value (FSV) did not adequately cover the facilities granted, contrary to enhanced supervision directives aimed at protecting the bank’s exposure. The auditors recommended that the bank obtain adequate security for the facilities granted.
Despite the bank’s response, a final audit verification showed that security for HAJJ and the National Revenue Authority (NRA) was due, effective January 1, 2024, indicating that the issue persists. Securities for Bradcop Global Development Limited, NATCOM Capital Development, Kadrik Services Limited, and others, as asserted by the bank, were not in place, leaving the matter unresolved. ZIJ/8/1/2024