The Public Accounts Committee (PAC) of Parliament has in their final reports to House of Parliament stated that they have implored on the National Mineral Agency (NMA) to collaborate with the National Revenue Authority (NRA) to ensure that the US$799,029 is located. The Committee noted from the review of the Auditor General’s Report that the auditors examined 28 royalty receipts issued by the NRA in 2016 based on bank confirmation (credit advice). The Report however disclosed that two payments in the bank statements of the Mineral Resources Treasury Account USD291,737 approximately Le 1, 700,140,949 and USD 507,292 approximately Le 3,622,014,150 for SMHL and Sierra Rutile (SL) Ltd. respectively were not traced in their respective accounts. The Committee has advised that the said amounts be reflected in their respective bank accounts without further delay, otherwise an uncompromising action would be meted on both institutions. When the Agency appeared before the Committee they were asked to respond to the following audit queries; assessed revenue not reflected in the designated account, late payment of royalties and lack of independent verification of the selling prices of bulky minerals. The Committee maintained that even though an investigation was carried out by the NRA, the amounts were not posted into the designated account. In his response, the Acting Director General said that the NMA had a responsibility to compute royalties and the NRA should also report the clients who had paid to NMA. The former Director General of NMA spoke about the MOU entered into between NRA and NMA.
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In addition, from the total of 28 payments made, 15 payments to the tune of USD557,583.44, USD2,499,929.67 and USD2,788,877.80 for Vimetco, Tonkolili Iron Ore [SL] Ltd and Sierra Rutile (SL) Ltd respectively had significant delays. Additionally, the mining agreements between the three mining companies and the Government of Sierra Leone require that royalties should be paid within 45 days after the order to pay has been issued by the NMA. The Acting DG stated that the NMA had been working closely with the NRA in terms of following up with companies that have not paid their royalties on time, but in the instances mentioned by the auditors, they have not received any official request for assistance. The Committee advised both parties to work collaboratively, so that such anomaly would not reappear in the 2018 Audit Report. Also, NMA did not provide evidence of an independent international market pricing opinion to substantiate the selling prices quoted by mineral right holders to the auditors. Therefore, the auditors could not place reliance on shipments to the tune of Le1.018 trillion with associated royalties of Le37.5 billion. According to the Report, this was a contravention Section 154[1b] of the Mines and Minerals Act of 2009 which states: “The holder of a mineral right shall sell mineral products obtained under its mining operations for exported minerals, at the best available international market prices at the time the contract for sale is made.’’ The DG restated his earlier responses to the auditors that through their development partners, the IMF and other sources, the NMA received updates on iron ore prices as benchmarked by Platts Global before subscribing to the pricing platform in early 2017. He said they usually ask iron ore companies to self-report benchmark prices and the employed pricing formula with a breakdown of penalties and other allowed deductions, such as freight. The Agency checked all figures provided upon the subscription to the Platts index and no discrepancies were found. He however informed the Committee that the situation for bauxite and titanium and its associated minerals had been very complex as there were no representative benchmarks for these minerals. He concluded that there were challenges with manpower, resources and the companies were taking advantage of the situation. The current DG expressed determination to address all audit queries and assured the Committee that those audit issues would not reappear in the 2018 Audit Report. The Committee took the DG on his word, but urged the team to be committed in their responsibilities.
By Zainab Iyamide Joaque
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