3.0 Management Letter 3.1 Unresolved Prior Year Matters   Useful Lives of Assets   Staff Advances The following were some of the significant matters raised by the  auditors and the management responses thereto:  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: 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.  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  181 