The Geological Department’s management of mining license fees has drawn criticism from the 2024 Auditor General’s Report, which points to weak verification procedures that might be jeopardizing the accuracy of government earnings from surface rentals.
The research claims that the department does not have enough records to confirm the yearly surface rental fees paid by mining corporations, raising questions about the amounts received as well as the obligations shown in the government’s financial accounts.
Auditors discovered that the Geological Department’s sketch designs for Gach Mining Company Limited, which are used to determine yearly leasing fees, lacked both dimensions and a clear scale. The auditors claimed that because of this, it was hard to pinpoint the exact geographical area that the mining license covered, making it impossible to calculate fees accurately.
“Without the sketch plans, we cannot verify that the surface rental payables recorded in the financial statements are accurate,” the report stated.
Underpayments by Sino Majilack Jalbak Investment and Development Company Limited (SMJ) were also discovered during the audit. The company paid GMD 278,000 in total between 2019 and 2024, which the auditors claimed was insufficient to meet its contractual commitments. The total amount owed to the government increases to GMD 823,923.72 when the 2024 rental fee is included.
Additionally, Gach Mining Company received a citation for neglecting to pay surface leasing costs in 2022 and 2023. The Geological Department should retrieve all unpaid sums and provide proof of recovery for confirmation, according to the Auditor General’s recommendation.
The paper emphasized more general accounting issues in addition to mining rentals. It concluded that the Statement of Outstanding Commitments, which included outstanding imprests totaling GMD 7,284,191, presented an inaccurate image of future spending commitments. According to auditors, this method reduced the statement’s credibility by exaggerating it.
“The issue remains unresolved, and maintaining outstanding imprests as a commitment contravenes the Financial Regulations and the IPSAS conceptual framework,” the report concluded.
