## 3.0 Management Letter 

The following were some of the significant matters raised by the auditors and the management responses thereto: 

## 3.1 Unresolved Prior Year Matters 

The auditors observed that out of the 17 matters reported in the previous year, one (1) was still in progress, 11 resolved and 5 still unresolved. The unresolved matters which recurred in the year under review included the following: 

##  Staff Advances 

Pay-As-You-Earn was not calculated and paid to Botswana Unified Revenue Service (BURS) in respect of the interest-free advances/loans granted to staff members. In addition, the repayment of staff advances was not actively followed up and actioned, resulting in unrecovered balances. The staff advances listing included balances due from individuals who were no longer employed by the Authority. 

In response management stated that they had sought clarification from BURS and their response was that salary advances were not taxable because they were expenses incurred after tax was deducted from employees’ remuneration as such the Authority did not charge Withholding Tax on advances. 

##  Useful Lives of Assets 

The auditors noted that residual values, depreciation rates and useful lives applied to items of property, plant and equipment were not assessed annually as required by International Financial Reporting Standard 16. Consequently, fully depreciated assets (motor vehicles, furniture and fittings and office equipment) and still in use were included in the fixed asset register, and had not been assessed. 

In response management stated that they were of the view that the useful lives of the assets were reasonable. The Authority acquired most of the assets on inception in 2007 and since then the Authority had not received any capital grants to replace or acquire new assets. The assets had been used for more than 10 years and continuous usage had resulted in high repairs and maintenance cost. Management 

