The Auditor General of the Federal Government of Somalia Mr. Mohamed M Ali has uncovered large scale corruption in his latest financial audit report for 2018

The Auditor General, in the Basis for the Adverse Opinion section of the audit report, stated that external donor contributions were understated or misreported to the treasury by nearly half of the 38 million dollars largely contributed by the European Union and the Kingdom of Saudi Arabia.

3.7 of the 17 million donated by the European Union ended up in offshore accounts according to the Auditor General “Whilst the European Union made a total of US $ 17,004,816 as external assistance to the Federal Government of Somalia for the year ended 31 December 2018, only a total amount of US $ 13,266,667 was disclosed in the annual financial statements because the SFMIS captured the latter amount whilst the balance of US $ 3,738,149 was in an offshore bank account.”.

The Saudi contribution of 20 million dollars seems to have fared the worst, in terms of misappropriation where almost 67% of it ended up in offshore private accounts.

The Auditor General’s report did not say what the 18 million dollars that ended up in offshore accounts were used for.

This report directly contradicts many statements by representatives of the United Kingdom Ben Fender and others who have praised Somalia on its financial transparency and anti-corruption posture to work towards debt relief and attracting more aid dollars.

United Kingdom Ambassador Mr. Ben Fender with Somalia’s Prime Minister Mr. Hassan Ali Khaire

One glaring omission from the Auditor General’s report is the contribution by the United States which is considered one of the largest donors to Somalia and has multiple ongoing projects it has been funding through its aid agency USAID. It is unclear if the United States directly contributes cash to Somalia’s Federal Government.

According to the Washington Post, the United States has contributed a total of 441 million US dollars to Somalia in 2018. 

The Auditor General also produced two separate Compliance Audit reports for security and non-security related sector in which most of Somalia’s Federal Government entities such as the Ministry of Defense, Somali National Army and NISA did not bother to submit annual accounts for auditing in 2018.

Somali government officials frequently travel overseas and even to other towns short distances from the Capital Mogadishu on private jets due security concerns.

Somalia’s President Mohamed Abdullahi Farmajo has inaugurated a 4.3 million US dollar embassy in Washington DC while it has a little over 5 million budgetted for all embassies for 2019. It is unclear if subsequent Auditor General reports will shed light on source of the US embassy funding.