An audit report of the Royal Bahamas Defense Force reveals that five vendors under reported the amount of payments received from the government by over one million dollars.

The 27-page report which was tabled in the House of Assembly on Wednesday, stated that the payments the government made to these vendors exceeded the gross revenue they actually reported to the business license unit.

Under-reporting revenue is an offense.

The auditor general report also discovered that the companies either did not have a business license or were only able to obtain a license just before conducting business with the RBDF.

According to the report, “There appears to be a lack of interconnectivity within the government system that allows internal and external perpetrators of fraud to manipulate weaknesses in internal control for their gain.”

It recommended then that the RBDF ensures that it only conducts business with legitimate businesses and that a copy of each company’s current business license be kept on file.

It’s further recommended that those companies found to be in contravention to the business license act be reported with immediate effect.

The report also found that during the period October 14, 2014 to June 26, 2015, $275,000 was spent with a home-based business that was rejected for a business license.

On its invoice, this business quoted a tax identification number, charged and received value added tax (VAT), but was not even registered with the VAT office.

It was also determined that the vendor identification appears to be missing a number.

It is unfathomable, according the report, as to how 18 invoices from this company could be processed without the accounting section verifying whether this company was legitimate.

The report pointed to collusion and a lack of oversight during the approval phases and processing of these invoices over the nine months during which these transacations occurred.

This manipulation of the system led to losses for the government and revenue not collected in customs duties, but also business license and vat fees.

The report reccommends that an investigation into these transactions with the RBDF be performed; government funds recovered and the relevant authorities to take action.

The auditor general’s report covers the period July 1st 2013 to June 30th, 2015…