Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1697814883318.pdf (Fiji)
EXCELLENCE IN PUBLIC SECTOR AUDITING REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI Volume 4 Audit Report on the Economic & Infrastructure Sector EXCELLENCE IN PUBLIC SECTOR AUDITING REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI Volume 4 Audit Report on the Economic & Infrastructure Sector CONTENTS Volume 1: Audit Report on the Whole of Government Financial Statements and Annual Appropriation Statement Part 1: Part 2: Whole of Government Financial Statements and Annual Appropriation Statement for the Republic of Fiji for the Year Ended 31 December 2014 Report of the Whole of Government Financial Statements and Annual Appropriation Statement Volume 2: Audit Report on the General Administration Sector 1.
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Ministry of Education, National Heritage, Culture and Arts, and Higher Education Institution Ministry of Health.
Department of Housing Ministry of Local Government, Urban Development and Environment Ministry of Social Welfare, Women and Poverty Alleviation Ministry of Youth and Sports Ministry of Agriculture Ministry of Fisheries and Forest Ministry of Lands and Mineral Resources Ministry of Industry and Trade Ministry of Sugar Ministry of Public Enterprise and Tourism Ministry of Works and Transport Ministry of Public Utilities and Energy Government Shipping Services Fiji Roads Authority VOLUME 4 29.

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Ministry of Agriculture Ministry of Fisheries and Forest Ministry of Lands and Mineral Resources Ministry of Industry and Trade Ministry of Sugar Ministry of Public Enterprise and Tourism Ministry of Works and Transport Ministry of Public Utilities and Energy Government Shipping Services Fiji Roads Authority REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ________________________ Section 29 Ministry of Agriculture Role and Responsibility The Ministry of Agriculture is responsible for maintaining food security through the provisions of extension and research services both for livestock and crops, quick economic recovery through the implementations of Demand Driven Approach Programmes and other commodity projects, assisting in poverty alleviation by building capacity of farmers to increase productions, and sustainable management of natural resources through the flood protection programmes and other sustainable land management practices.
Table of Contents PART A: 29.1 29.2 29.3 29.4 29.5 PART B: 29.6 29.7 29.8 29.9 29.10 FINANCIAL STATEMENT ................................................................................................................. 1 Audit Opinion ...................................................................................................................................... 1 Statement of Receipts and Expenditure ............................................................................................. 2 Appropriation Statement ..................................................................................................................... 3 Trading and Manufacturing Account ................................................................................................... 4 Trust Fund Accounts ........................................................................................................................... 5 AUDIT FINDINGS ............................................................................................................................... 5 Dredging of Rivers .............................................................................................................................. 5 Land Resettlement Estates ................................................................................................................. 8 Dairy Farm Inspections ..................................................................................................................... 11 Unutilised Agro inputs at
 the Lakena Stations .................................................................................. 12 Expired Drugs at the Veterinary Drugs Store .................................................................................... 14 RECURRING AUDIT FINDINGS ........................................................................................................................... 15 29.11 Trading and Manufacturing Accounts ............................................................................................... 15 29.11.1 Anomalies noted in the Trading and Manufacturing Account ............................................................ 16 29.11.2 Discrepancies in TMA Cash at Bank Reconciliation ......................................................................... 18 LWRM Trust Fund Account .............................................................................................................. 20 29.12 Management of Fixed Assets ........................................................................................................... 21 29.13 Variance in Drawings Account Balance – Operating Account .......................................................... 23 29.14 TMA Warehouse – Commercial Undertaking Livestock .................................................................... 24 29.15 Motor Vehicle Accidents ................................................................................................................... 28 29.16 Leave Management
 .......................................................................................................................... 29 29.17 Non-submission of Acquittal Reports and Audited Accounts ............................................................ 30 29.18 Missing Payment Vouchers .............................................................................................................. 32 29.19 Details of Motor Vehicle Accident Cases ......................................................................... 33 Appendix 29.1: PART A: FINANCIAL STATEMENT 29.1 Audit Opinion The audit of the 2014 accounts of the Ministry of Agriculture resulted in the issue of a qualified audit report.
The qualifications were as follows:  Included in the Trading and Manufacturing Account (TMA) Balance Sheet is TMA Surplus Capital Retained of $2.26 million and TMA Surplus transferred to Consolidated Fund of $220,629.

The Ministry was not able to provide appropriate audit evidence to support the balances.

As a result, the audit was not able to ascertain the accuracy and completeness of the Trading and Manufacturing Account as at 31 December 2014.
Ministry of Agriculture Section 29: Page 1 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ________________________  There was an un-reconciled variance amounting to $238,582 between the FMIS general ledger and TMA bank reconciliation statement.

Accordingly, the audit was unable to ascertain the accuracy and completeness of the TMA Cash at bank of $1.03 million as shown in the TMA Balance Sheet as at 31 December 2014.
 Included in the TMA Trading Account was Closing Stock of Finished Goods of $1.01 million.

The audit did not express an opinion on the accuracy and completeness of Closing Stock of Finished Goods as the Ministry did not carry out an independent stock take for the year ended 31 December 2014.
 The Ministry was not able to provide appropriate audit evidence to reconcile and ascertain the accuracy and completeness of the Trust Fund Cash at bank –Retention Fund (LWRM) balance of $877,651 and Trust Fund –Retention Fund balance of $269,813 as shown in the FMIS general ledger with the Trust Fund balance $390,248 reflected in the Trust Account Statement as at 31 December 2014.
As a result, audit was not able to ascertain the accuracy and completeness of the Trust Account Statement of Receipts and payment (LWRM) for the year ended 31 December 2014.

 The Ministry did not carry out a Board of Survey for 2014.

In the absence of a Board of Survey Report, the losses of fixed assets, if any, that occurred during the year could not be substantiated.
As a result, audit was not able to ascertain the accuracy and completeness of the Statement of Losses for the year ended 31 December 2014.

29.2 Statement of Receipts and Expenditure The Ministry of Agriculture collected revenue totalling $617,408 and incurred total expenditure of $57.07 million in 2014.

Details are shown in Table 29.1 below.
Table 29.1: Statement of Receipts and Expenditure Description 2014 ($) 2013 ($) Agricultural produce & inspection fees Registration License Water Charges Rental Revenue from rest house Commission Meat Inspection Veterinary & Animal Quarantine Sale of produce Miscellaneous revenue 2,345 4,845 60,427 4,380 80,495 6,736 13,790 20,484 32,470 97,665 293,771 1,695 3,260 60,558 9,789 62,494 8,682 7,342 20,256 20,525 74,557 279,096 TOTAL REVENUE 617,408 548,254 Established staff Government wage earners Travel & communication Maintenance & operations Purchase of goods & services Operating grants & transfers Ministry of Agriculture 13,143,921 6,001,018 813,229 2,291,822 1,078,682 3,680,398 10,352,996 5,218,794 984,850 2,170,291 738,443 1,736,027 Section 29: Page 2 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ________________________ Description Special expenditures Total Operating Expenditures Capital construction Capital purchases Capital grants & transfers Total Capital Expenditures 2014 ($) 1,252,880 28,261,950 17,707,996 325,847 7,295,128 25,328,971 2013 ($) 1,402,921 22,604,322 15,748,599 473,113 3,007,303 19,229,015 Value added tax 3,480,184 3,150,275 TOTAL EXPENDITURES 57,071,105 44,983,612 The increase in total expenditure by $12.08 million or 27% in 2014 compared to the previous year resulted mainly from the following:  Increase in wages and salaries by $3.57 million or 23% was attributed to pay rise approved for civil servants for 2014, payments of overtime for the implementation of
 the capital projects and promotions and new recruitments made during the year.
 Operating and capital grants significantly increase from $4.74 million in 2013 to $10.97 million in 2014.

This was largely due to the increase in grants for the Biosecurity Authority of Fiji and new grants given to the Navuso Agricultural School and the Agricultural Marketing Authority.

 Capital construction increased by $1.9 million or 12% in 2014 mainly due to increase in expenditures for the on-going capital programs.
Capital programs undertaken during the year were mainly related to the Crop Extension Services, Livestock Extension Services, Research, Irrigation Improvement and Land, Drainage and Flood Protection.

29.3 Appropriation Statement The Ministry incurred expenditures totalling $57.07 million against the revised budget of $62.36 million resulting in savings of over $5.29 million.

Details of expenditures against the budget estimates are provided in Table 29.2 below.
Table 29.2: Appropriation Statement SEG Item Established staff Government wage earner Travel and communications Maintenance & operations Purchase of goods & services Operating grants & transfers Special expenditures Total Operating Expenditure Capital construction Capital purchases Capital grants & transfers Total Capital Expenditure Ministry of Agriculture Budget Estimate ($) 13,875,839 6,294,078 813,502 2,128,141 1,199,300 3,906,000 1,676,561 29,893,421 20,137,000 400,000 7,814,500 28,531,500 Changes ($) (527,860) 5,000 72,100 200,100 250,660 --- --- --- --- --- --- --- Revised Estimate ($) 13,347,979 6,299,078 885,602 2,328,241 1,449,960 3,906,000 1,676,561 29,893,421 20,317,000 400,000 7,814,500 28,531,500 Actual Expenditure ($) 13,143,921 6,001,018 813,229 2,291,822 1,078,682 3,680,398 1,252,880 28,261,950 17,707,996 325,847 7,295,128 25,328,971 Lapsed Appropriation ($) 204,058 298,060 72,373 36,419 371,278 225,602 423,681 1,631,471 2,609,004 74,153 519,372 3,202,529 Section 29: Page 3 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ________________________ SEG Item 13 Value added tax TOTAL EXPENDITURE Budget Estimate ($) 3,943,405 62,368,326 Changes ($) --- --- Revised Estimate ($) 3,943,405 62,368,326 Actual Expenditure ($) 3,480,184 57,071,105 Lapsed Appropriation ($) 463,221 5,297,221 29.4 Trading and Manufacturing Account Table 29.3: Manufacturing Account Details Opening raw material Add: Purchases Less: Closing raw material Raw material used Add: Direct
 labour Cost of manufacturing goods transferred to trading account Table 29.4: Trading Account Details Sales Opening stock of finished goods Add: Cost of manufactured goods Less: Closing stock of finished goods Cost of finished goods sold Gross profit Table 29.5: Profit & Loss Statement Details Income Gross Profit transferred from Trading Account Total Income Expenses Travelling & communication expenses Maintenance & operation Other expenses Total Expense Net Loss Table 29.6: Balance Sheet Details Equity TMA
 Surplus Capital Retained Ministry of Agriculture 2014 ($) --- 1,122,045 1,122,045 --- 1,122,045 15,071 1,137,116 2013 ($) --- 843,816 843,816 --- 843,816 15,120 858,936 2014 ($) 1,295,692 2013 ($) 1,122,508 1,058,578 1,137,116 2,195,694 1,014,577 1,181,117 1,128,750 858,936 1,987,686 1,058,578 929,108 114,575 193,400 2014 ($) 2013 ($) 114,575 114,575 193,400 193,400 39,495 339,284 153,846 532,625 14,284 179,911 865 195,060 (418,050) (1,660) 2014 ($) 2013 ($) 2,263,536 2,263,536 Section 29: Page 4 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ________________________ Details Net Loss for the year TMA Surplus transferred to Consolidated Fund TMA Accumulated Surplus/ (Deficit) Total Equity Assets Cash Accounts receivable Finished goods Total Assets Liability Payable Total Liabilities Net Assets 2014 ($) (418,985) 220,629 --- 2,065,180 2013 ($) --- --- (422,471) 1,841,065 1,031,806 18,797 1,014,577 2,065,180 782,487 --- 1,058,578 1,841,065 --- --- 2,065,180 --- --- 1,841,065 29.5 Trust Fund Accounts Table 29.7: Land Water Resource Management and Land Resource Planning & Development Details Retention money Total Receipts Retention money Total Payments Surplus/(Deficit) Opening balance at 1 January Closing balance as at 31 December PART B: AUDIT FINDINGS 29.6 Dredging of Rivers 2014 ($) 2013 ($) 656,559 656,559 --- --- 589,809 589,809 66,750 323,498 390,248 6,445 6,445 (6,445) 329,943 323,498 From 2010 to 2014, major dredging works, which cost
 over $29.7 million, were carried out in four major rivers including Rewa, Navua, Nadi and Ba.
The dredging of the rivers was to reduce damages caused through flooding.

Refer to Table 29.8 for cost details.
Ministry of Agriculture Section 29: Page 5 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ________________________ Table 29.8: Details of Costs River Contractor Actual Cost Rewa – Phase 1 (2010) Rewa – Phase 2 (2011) Navua – Phase 1 (2012) Ba – Phase 1 (2012) Ba – Phase 2 (2013) Company A ($) 7,167,140.45 3,014,987.71 4,599,987.95 3,280,374.44 3,637,746.72 Unit Rate Per Cubic Meter (VIP) ($) 5.12 8.26 Approved Amount ($) Initial amount approved $8,952,788.89.
Revised rate at $7.34/cubic meter VEP with effect from 01/06/11.

9.37 9.78 4,963,647 3,280,375 9.78/12.86 The rate of $8.50 VEP was charged for the first 218,259 cubic meters and rate of $11.18 VEP was charged for 117,000 cubic meters.
Ba – Phase 3 (2014) Total Nadi – Phase 1 (2012) Company B 4,048,000 25,748,237.27 3,999,704.04 12.65 9.34 4,048,000 3,999,700 Tender was called for the dredging of the Rewa river in 2010, however, later waived including tenders for the subsequent dredging works for the Navua, Ba and Nadi rivers based on the following factors: - directive from the Office of the Prime Minister on the urgency to reduce the impact of flooding; readily available of dredging company in the country/locality and the satisfactory performance from previous dredging works.
The dredging of the Rewa, Navua and Ba rivers were assigned to Company A in which the company was paid a total of $25.7 million from 2010 to 2014.

The audit noted that the unit cost of the dredging per cubic meter charged by Company A increased gradually for each dredging assignment.

The initial rate charged was $5.12 VIP for the Rewa River Phase 1 (2010) and increased by 147% to $12.65 for the Ba River Phase 3 in 2014.
The audit noted that the Ministry was provided legal advice in 2011 which indicated that State is the rightful owner of dredged sand material and that the sale and use of sand material for commercial and development purposes can be determined by the Minister of Lands or the Director of Lands.
Sediments (sands) excavated from the dredging works have been stored at available land at the river banks as demonstrated below: Figure 29.1: Sediments (sand) at the river banks The audit could not confirm, as there was no evidence to indicate this, whether the Ministry together with other relevant government agencies have explored or developed any structured approach on the sale and/or utilisation of sand excavated from the dredging of the rivers.
Ministry of Agriculture Section 29: Page 6 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ________________________ From information gathered and sited during the audit and by using the special rate of $4.00 per cubic meter approved by Cabinet in 1997, the audit determined that substantial revenue could be derived from the excavated sand if managed appropriately.

The market rate may be substantially higher than $4.00 per cubic meter used in the calculation below.
Refer to Table 29.9 for details.
Table 29.9: Details of sediments (sand) extracted and value River Phases Volume(m3) Ba Navua Rewa Nadi 1 2 3 1 2 1 2 1 2 3 4 Total 286,265 335,259 320,000 503,049 424,040 1,370,687 344,360 373,000 360,000 450,000 428,500 5,195,160 Sand Rate (m3 ) (Without Cartage)1 ($) 4.00 4.00 4.00 4.00 4.00 4.00 4.00 4.00 4.00 4.00 4.00 4.00 Estimated Revenue ($) 1,145,060 1,341,036 1,280,000 2,012,196 1,696,160 5,482,748 1,377,440 1,492,000 1,440,000 1,800,000 1,714,000 20,780,640 Potential government revenue may be lost in the absence of a clear and structured approach to the management and utilisation of sand excavated from the dredging of the rivers.
Recommendations  If the tender process has been waived according to the Procurement Regulations, it is strongly recommended that the Ministry closely monitor the cost of dredging works.

Any increase in unit rate per cubic meter should be properly documented, justified and approved before the commencement of dredging works.

 There is a need for proper and structured approach to proper management and utilization of sediments excavated from the dredging of the rivers.
Ministry’s Comment  Dredging of the rivers is undertaken by cutter suction dredgers.

The major factor that influences the unit cost per cubic meter is the soil characteristics which comprises mainly of silt, sand and gravel.

The finer the material the lower its density, the greater the proportion of sand and gravel the more it will cost to move due to its density.

Prior to the dredging work soil samples are taken and tested at soil laboratories.
This is provided to the company to access the nature of the material to be dredged and formulate the unit cost per cubic meter.

An example is the Ba River Dredging works which documents the assessment for the unit cost increase by China Railway First Group due to increase in the gravel fraction of the material.

The rate provided was $11.18 VEP compared to the Divisions calculated price of $11.23 VEP.
1 Cabinet Decision dated 08/04/97 CP (97)32 Ministry of Agriculture Section 29: Page 7 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ________________________ The recommendation of the audit to closely monitor the cost of dredging works, and any increase in the unit rate to be properly documented and justified is noted.

 The audit comment for a proper and structured approach for the management sediments is supported.
The material comes under the responsibility of the Ministry of Lands once it is stored on land sites.

The Ministry of Agriculture has no legal rights for its commercial sale.

Better coordination is required with both ministries to maximize the potential revenue from the sand material.

The storage of the sand material on the land is obtained through consent agreements with the land owner, tenants and leases.
Where there are requests to use the sand material for community and rural development works, this is supported in line with the Rural Development Framework Policy.

29.7 Land Resettlement Estates The proper management of expenditure is fundamental to ensuring value-for-money in delivering services to the community.
As well, having cost-effective internal controls within the purchasing and payments system plays an important part in ensuring that waste of funds, over-expenditures and corruption do not occur.2 Cabinet on the 7th of April 1998 established the ALTA Land Development and Resettlement Unit as a special project within the Ministry to initiate the acquisition of properties, subdividing the same and issuing allotments to ex–ALTA tenants.
The Ministry identified the following lands for the resettlement of ex-ALTA leased farmers.

Refer to Table 29.10 for details.

Table 29.10 Resettlement Land for Ex-ALTA Leased Farmers Division Land Re-settlement Central Western Northern Raiwaqa I & II Navovo Navudi I, II & III and Vunicibicibi Land at the Raiwaqa Stages I & II in Navua have successfully been resettled.

An audit follow-up was carried out on the resettlement progress in the Western and Northern Divisions as detailed below.
Navovo Resettlement The Navovo Estate (Native Lease) was obtained for 55 years with effect from 01/01/99.

The first development 5 year lease was issued in 1999 after the Ministry paid $465,761 as premium.

The Navovo Estate Property has 51 fully developed surveyed subdivision lots totalling 431 hectares.

Another development lease agreement was signed between Government and the then NLTB on 15/07/05 and it expired on 31/12/08.
The Ministry re-negotiated a 10 year development lease with effect from 01/01/10.

During this period, the following improvements were made: - grade 4 government quarters, bore-hole catchment, 4 large installed water tank sites, water reticulation pipe lines and electricity power poles.
2 Ministry of Agriculture - Finance Manual 2011 - Part 2: Expenditure Ministry of Agriculture Section 29: Page 8 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ________________________ The audit noted the following:  Detailed supporting documents for the development costs of $2.3 million incurred by the Ministry were not available or maintained in the files provided for audit review.
Refer to Table 29.11 for detail: Table 29.11: Cost of Land Purchase and Infrastructure Development Property Navovo Land Purchase ($) 465,761 Total Survey and Development Costs ($) 1,866,975 Total Costs ($) 2,332,736  The Ministry deposited a $150,000 ($10,000 per farmer) grant with the Fiji Development Bank (FDB) for the 15 farmers initially identified to be resettled at Navovo.
The grant was to serve as a deposit to facilitate further loans to the farmers to build houses and develop the allocated farm land.

According to confirmations received from the FDB on 19/03/15, a sum of $70,000 was unutilised and still maintained in the FDB suspense account.
Refer to Table 29.12 for details: Table 29.12: Unutilized Funds Retained In FDB Suspense Account Grant Utilised Comment Name Farmer 1 Farmer 2 Farmer 3 Farmer 4 Farmer 5 Farmer 6 Farmer 7 Farmer 8 Farmer 9 Farmer 10 Farmer 11 Farmer 12 Farmer 13 Farmer 14 Farmer 15 Total Grant Approved ($) 10,000 ($) 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 150,000 10,000 10,000 10,000 10,000 10,000 10,000 --- --- --- --- --- --- --- 80,000 Sold to another individual under the FDB mortgage sale.
Unutilised.

Sold to another individual under the FDB mortgage sale.

In process of developing the allocated lot.

Sold to another individual under the FDB mortgage sale.

- - Utilising the lot for cash crop farming (subsistence level).

Utilising the lot for cash crop farming (subsistence level).

Utilising the lot for cash crop farming (subsistence level).

Grant kept in the FDB suspense account.

Grant kept in the FDB suspense account.

Grant kept in the FDB suspense account.


Grant kept in the FDB suspense account.

Grant kept in the FDB suspense account.

 Although Novovo has 51 fully developed lots, only 4 farmers have utilised their allocated lots.

As at April 2014, the Ministry has incurred $109,474 as administrative fees and lease rental to I Taukei Affairs Board.
The audit could not confirm whether the Ministry has taken actions to identify other potential farmers to be resettled at the proposed site.

Navudi Estates Navudi estate is located in the Seaqaqa area with a total land area of 435.4 hectares divided in 60 farm lots.

Stage 1 has 18 lots fully surveyed and registered, while stages 2 and 3 have 42 lots on scheme plan.
Ministry of Agriculture Section 29: Page 9 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ________________________ Detailed supporting documents for the development costs of $3.2 million incurred by the Ministry were not available or maintained in the files provided for audit review.

Refer to Table 29.13 for details.


Table 29.13: Acquisition and Infrastructure Development Cost Property Land Purchase Navudi I Navudi II and III Total ($) 550,000 1,145,801 1,695,801 Total Survey and Development Costs ($) 549,981 993,580 1,543,561 Total Costs ($) 1,099,981 2,139,381 3,239,362 As at 31/12/14, only one farmer was occupying an allocated lot at the Navudi I estate.
Vunicibicibi Estate Vunicibicibi estate located beside the main Labasa/ Nabouwalu highway, has a total land area of 233 hectares with 32 farm lots, fully surveyed and registered.

Detailed supporting documents for the development costs of $1.9 million incurred by the Ministry were not available or maintained in the files provided for audit review.

Refer to Table 29.14 for details.


Table 29.14: Acquisition and Infrastructure Development Cost Property Vunicibicibi Land Purchase ($) 761,996 Total Survey and Development Costs ($) 1,174,803 Total Costs ($) 1,936,799 The audit was informed that the Office of the Prime Minister has taken over the policy direction of the Vunicibicibi Estate.

The land has not been resettled as at 31/12/14, however, a portion of land was used by a contractor as depot whilst constructing the Nabouwalu/Dreketi highway.
Discussions during the audit also indicated that the objectives to resettle ex-ALTA tenants whose leases were not renewed have not materialised because tenants opted to resettle in Viti Levu and the, remoteness of the locations of the estates.
With more than $7.6 million in cost incurred for infrastructure development, annual land lease payments and general operation costs to implement the project, it is a concern that the major portion of land identified to resettle farmers remained unutilised or unoccupied.
Recommendations  It is recommended that the Ministry undertake a proper review of the Land Resettlement Program and identify opportunities that will ensure the successful completion of the program or alternative for effective utilisation of the developed land resources available.

 The Ministry should implement controls to improve records management for the Land Resettlement Program.
Ministry of Agriculture Section 29: Page 10 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ________________________ Ministry’s Comments The Ministry has over the years undertaken numerous reviews of the programs according to the policies of governments with its recent actions includes;  Drawing up a Report with recommendations for sustainability of the program cannot be attained as policy priority of the Ministry on resettlement of farmers diminishes.
This follows the transfer of the Farming Assistance Scheme (FAS) in 2010 with Land Resettlement as part of the Ministry of Rural and Maritime Development and National Disaster Management (MRMDNDM).

Cabinet paper submission to the Committee for the Better Utilization of Land (CBUL) recommended alternative options including amending the existing criteria provisions.
Included in the Ministry’s recommendations is the opening up of Resettlement Estate of Navovo in Sigatoka (Native I Taukei Land) into the market.

This was done for Vunicibicibi and Navudi Estates in Macauta which were Crown Estate lands.

This is for the purpose of effective use of the program for successful completion.

 The Ministry has put in place measures to stream line its record keeping.
The several relocations and transfers of the Units has resulted in its records not been managed properly over the years.

The comment by the Auditor General’s report is noted and systems have been reviewed for safekeeping of records.

The Land Resettlement Program has been transferred to the Ministry of Rural and Maritime Development and National Disaster Management.
29.8 Dairy Farm Inspections The Minister may make regulations to provide for the proper management, control and sanitary conditions of dairies and premises used for the storage and sale of milk and the inspection of dairies.3Any inspector may at any time enter upon premises to which this Act applies for the purpose of carrying out the provisions thereof or of any regulations made thereunder.4 A total of 529 dairy farms are registered in Fiji.
Our review of dairy inspection records in July 2015 disclosed that the Ministry did not always conduct routine inspection of dairy farms/facilities to check for proper dairy farm management, control and sanitary conditions and ensure compliance with the requirements of the law.

Refer to Table 29.15 for examples: Table 29.15: Irregular Dairy Inspection Farm No.
Farm Locality Inspection details from records provided 5339 4057 5068 5689 5771 5037 2026 5130 4020 5085 5613 Deepwater, Tailevu Muaniweni, Naitasiri Waimaro, Tailevu Deepwater, Tailevu Wainivesi, Tailevu Waimaro, Tailevu Vunidawa Wainivesi, Tailevu Muaniweni, Naitasiri Waimaro, Tailevu Navuso Naitasiri One inspection done since 29/04/13.

No inspection report filed No inspection report filed One inspection done since 29/04/13.

One inspection done since 30/04/13.

No inspection report filed.


No inspection report filed.

One inspection done since 30/04/13.

No inspection report filed.

No inspection report filed.

No inspection report filed.

3 Laws of Fiji, Chapter 118, Diaries, Section 3:1:a 4 Laws of Fiji, Chapter 118, Diaries, Section 5.

Ministry of Agriculture Section 29: Page 11 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ________________________ Farm No.
Farm Locality Inspection details from records provided 5182 5707 3391 5535 4100 3397 3074 6156 5350 5881 5768 5740 Waimaro, Tailevu Waimaro, Tailevu Serea, Naitasiri Burebasaga, Rewa Waidina, Naitasiri Serea, Naitasiri Serea, Naitasiri Serua, Namosi Namalata, Tailevu Naitutu, Tailevu Namalata, Tailevu Koroqaqa, Naitasiri No inspection report filed.

No inspection report filed.

One inspection done since 06/08/13.

One inspection done since 19/06/13.

No inspection report filed.


One inspection done since 06/08/13.

One inspection done since 06/08/13.

No inspection report filed.

One inspection done since 29/04/13.

No inspection report filed.

One inspection done since 20/04/13.

No inspection report filed.

The audit also noted that the inadequate resources allocated could be a factor contributing to the current frequency of dairy inspections.
At the time of audit, there was only one Dairy Inspector responsible for monitoring/inspecting of the 529 registered dairy farms in Fiji.

There is potential risk of dairy safety violations if dairy inspections are not routinely carried out.

Recommendations  Efforts to enable routine inspections of dairy farms should be explored.

 Guidelines should be established to guide dairy inspectors and also to prevent dairy safety violations.
 It is also recommended that the Ministry develop a system of maintaining complete dairy inspection records to enable proper tracking of inspections.

 Appropriate resources should be allocated to allow dairy inspections to be conducted and tracked effectively.

Ministry’s Comments  The draft Standard Operating Procedure has been developed to maintain complete dairy inspection records for tracking off inspections.
 Request has been submitted to share resources to allow dairy inspections to be conducted and tracked effectively.

29.9 Unutilised Agro inputs at the Lakena Stations Storage of inventories shall be the responsibility of the storekeepers.
The storekeeper must ensure that adequate storage space is available for incoming stock as and when required; storage facilities are properly secured; stocks are kept in an orderly manner allowing for safe access; stocks are handled with care and well stored so as to reduce the risk of damage; and quantity of stock is closely monitored to avoid excess holdings or shortages.5 5 Ministry of Agriculture – Finance Manual 2011 – Section 8.2.1 Ministry of Agriculture Section 29: Page 12 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ________________________ A physical verification carried out by the audit on 30/06/15 at the Lakena Station revealed that 313 bags(20kg) of NPK fertiliser and 1,222 bottles of Glyphosate 450 (1 litre), provided by the Food and Agriculture Organisation (FAO) for the disaster rehabilitation have not been distributed.
In addition, the audit noted that items purchased for the Vanilla, Cocoa and Rice Programs and the Agriculture Show prize were not distributed/slow moving and kept at the Lakena Station.
Refer to Table 29.16 for details: Table 29.16: Stock of Inventory at the Lakena Station Date Item Quantity Green Shade Cloth Pine Post (150mm x 3mtrs) Brush cutter (Champion) Galvanised Binding wire (No:10) Vanilla Program 28/04/14 05/05/14 14/05/14 05/05/14 Rice Program 16/02/14 16/06/14 Cocoa Program 08/11/13 13/09/13 05/05/14 19/06/14 21/05/14 21/05/14 02/05/15 21/05/15 Agriculture Show Prize 17/02/13 12/09/14 Others 25/02/09 05/03/13 27/02/13 Fertiliser (40kg) Fertiliser (25kg) Triple Super (50kg) Glyphosate – (1litre) Urea (40kg) NPK (40kg) Single Super (25kg) Kocide (1 liter) Teitei Blend Black Urea (25kg) Goat Fence Benomyl (100g) Sundothin (500ml) Blend C 50kg (Agriculture Show Prize 2011) Blend C 50kg (Agriculture Show Prize 2014) 2 10 2 8 5 7 48 202 6 84 40 63 32 30 18 14 20 rolls 36 3 Failure to utilise the agro inputs for its intended purpose and in a timely manner increases the risk of mismanagement and misappropriation of the items.
Recommendation It is recommended that the Ministry carry out a routine assessment of inventories maintained at the Lakena Station and ensure that the agro inputs procured for projects or received as assistance are utilized on a timely manner for its intended purpose.

Ministry’s Comments  The delay in the dispatch of stock from Lakena stores was due to the chemical spillage from the FAO consignment for disaster rehabilitation program.
No Ministry staff was covered or has experience to handle chemical spillage and therefore, the movement of staff to the stores was restricted for OHS reasons.
 Movement into and out of area resumes after long negotiation between the supplier [a New Zealand Company], the financer FAO Samoa and the Ministry is getting the two parties be responsible for the Ministry of Agriculture Section 29: Page 13 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ________________________ cleaning of the stores and the repacking of the chemical with proper labeling.
This has taken sometime and contributed to the delay in the supply of other projects agro inputs  Currently, the stocks at Lakena are moving with procedural process closely monitored to the relevant receiver.

The remaining items pending for delivery is the vanilla material for Beqa.

Since no storage facility is available in Beqa, we would prefer the items be stored safely in Lakena until the farmer has solved his personal issues and ready for the construction.
This is some of the risk that is beyond our control and unavoidable at times after all procedures followed in project identification.

 A Board of Survey and updating of inventory will be done by 07/10/15.

29.10 Expired Drugs at the Veterinary Drugs Store It is vital that all expired drugs is boarded and removed in a timely manner to avoid negligence and vicarious liability.
The Board of Survey Officers shall physically identify each item, note its working condition and verify its existence to the fixed assets register and expendable items register.6 The Animal Health & Production (AH&P) Veterinary Store located in Vatuwaqa purchases and distributes veterinary drugs to animal health clinics in Fiji.

A physical stocktake carried out on 03/03/15 at the Vatuwaqa Drugs Store revealed that the expired drugs valued at $13,627 were kept in the store room awaiting disposal.
Refer to Table 29.17 for details: Figure 29.2: Sample of expired drugs kept at the store room Table 29.17: Examples of Expired Drugs as at 03/03/15.
Veterinary Drugs Expiry Date QTY Trisoprim 480 Injection Tylan Soluble CCD Panalog Ointment Utozyme Pessaries 10's Liquid Paraffin Pentobarbitone Injection Atropine [Atrosite] ACP Injection 2mg [Promex 2] Estrumate Beautamav Tabs 100mg [ butalone tabs] Lectade Dextrose Parnell Hartmans Solution September-2013 June-2009 June-2013 November-2012 February 2013 January 2011 March-2006 February-2006 November-2001 January 2010 December 2014 April-2008 February 2014 10 3 4 331 1 5 8 5 44 5 10 7 38 Rate ($) 36.00 40.00 40.00 11.00 18.00 46.00 9.40 5.60 41.90 22.65 96.00 15.15 8.00 Total Value ($) 360.00 120.00 160.00 3,641.00 18.00 230.00 75.20 28.00 1,843.60 113.25 960.00 106.05 304.00 6 Ministry of Agriculture - Finance Manual - Section11.4.2 Ministry of Agriculture Section 29: Page 14 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ________________________ Veterinary Drugs Expiry Date QTY Multibex Injection Drontal Cat 4kg Tabs Drontal Cat 6kg Tabs Dimmitrol 200mg tabs Frontline Spray Frontline Spray Clinikill Chromic Catgut Met 5[1] [Cassette] Paranet Dressing Flystrike Powder Otomax Ointment Admin Solution Total February 2014 October-2013 March-2013 November-2012 April-2013 April-2012 February 2013 March 2014 February-1999 February 2015 October-2011 April 2007 2 130 40 11 14 1 1 7 14 10 10 48 Rate ($) 60.00 10.20 11.80 14.00 72.00 125.00 37.00 125.55 10.80 60.00 46.00 7.00 Total Value ($) 120.00 1,326.00 472.00 154.00 1,008.00 125.00 37.00 878.85 151.20 600.00 460.00 336.00 13,627.15 In
 addition, the audit also noted that the Ministry does not have in place standard operating guidelines for effective management of its veterinary drugs and disposal of expired drugs.
Recommendations  It is recommended that the Ministry take appropriate steps to develop/review guidelines for effective management of its drug store and disposal of expired drugs.

 Expired drugs should be safely disposed-off.

Ministry’s Comments  Request for the immediate BOS to be undertaken all throughout the Divisional Drug stores.
The recommended schedule indicates that the BOS exercise in respect of expired drugs at Vatuwaqa shall be completed by 23/11/15 which shall consequently lead to its disposal.

 The exercise identified above reflects and include expired drugs from each Divisional stations.

These drugs are transferred to Vatuwaqa as the Headquarters for the Animal Health and Production Division following which disposal shall be at the discretion of the Ministry of Agriculture Veterinary Officer.
The request for BOS further recommends the engagement of Veterinary Officer in Vatuwaqa to decide on the immediate disposal of the expired drugs at hand.

 For increased public awareness of veterinary services fees and charges are displayed on the Notice Board for the members of the public’s information.
RECURRING AUDIT FINDINGS 29.11 Trading and Manufacturing Accounts The Ministry under its Trading and Manufacturing Accounts provides the following services: 1) Commercial Undertaking Livestock (CUT) operates under the Animal Health & Production Division and is located at the AH&P Divisional Head office in Vatuwaqa.
The unit has established market outlets throughout the country to promote services to the rural public with the assistance of Ministry of Agriculture Section 29: Page 15 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ________________________ extension officers.

This includes drugs dispensing, livestock marketing and agro materials distribution to farmers.
2) Crop Extension Machinery Operation Hire (CEMOH) operates under the Crop Extension Division which is solely responsible for providing quality service to farmers by the hiring of the Agriculture Extension Machinery for land development to the farmers at affordable rate that would contribute to sustainable farming.

These machine hire services consist of tractor, digger, mini rice machines, swamp dozer and wheel loader hire.
3) Fuel & Oil operates under the Crop Extension Divisions which supplies fuel & oil to other sections within the Ministry.

29.11.1 Anomalies noted in the Trading and Manufacturing Account Each agency operating a trading and manufacturing activity must prepare: (a) Quarterly profit and loss statement; and (b) A balance sheet on an annual basis.
The profit and loss statement and the balance sheet must be prepared on an accrual basis.7 The annual profit and loss statements and balance sheet for each current financial year just ended must be prepared and submitted to the Auditor-General in a form suitable for audit and inclusion in the agency’s annual report.8 Annual boards of survey must be conducted by 3 officers who are independent of the officer responsible for the custody of the assets.
A written record must be kept of each board of survey and must be signed and dated by the officers undertaking it.9 Divisional Accountants, Assistant Accounts, Clerks and Recorders shall reconcile the ledger balances to the general ledger reports and prepare a ledger reconciliation statement.10 Any errors or misallocations must be immediately adjusted by way of journal vouchers.11 The ledger reconciliation statement shall be forwarded to the Senior Accountant (Operations) weekly.
The Divisional Accountants, Assistant Accounts, Clerks and Recorders must ensure that: I.

All balances are accurate and adequately supported; and II.

Any misallocations or outstanding balances from the previous month have been journalised to the correct allocation code.
Our review of the Trading and Manufacturing account of the Ministry revealed the following anomalies, most of which are recurring issues that have not been resolved by the Ministry from previous years:  Included in the TMA Balance Sheet for Commercial Undertaking are TMA Accumulated Surplus of $2,263,536 and TMA Surplus transferred to Consolidated Fund of $220,629.
The audit noted that the Ministry did not maintain adequate accounting records to provide sufficient and appropriate audit evidence to substantiate the balances reflected in the TMA Balance Sheet.

As a result, audit was not able to ascertain the correctness of these amounts.
7 Finance Instructions 2010 – Section 30 (1 & 2) 8 Finance Instructions 2010 – Section 30( 3) 9 Finance Instructions 2010 – Section 49 (2) 10 Ministry of Agriculture – Finance Manual 2011 – Section 16.3.3 11 Ministry of Agriculture – Finance Manual 2011 – Section 16.3.4 Ministry of Agriculture Section 29: Page 16 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ________________________  A variance of $22,227 was noted between the Ministry’s inventory stock certificate report and the balance reflected in the FMIS general ledger as at 31 December 2014.
Refer to Table 29.18 for details: Table 29.18: Variance in Stock Certificate and FMIS Balance Particulars FMIS GL - Inventory balance Stock Certificate Variance Amount ($) 1,014,577 992,350 22,227 In addition, reliance on the balance determined from the Ministry’s stock take was limited as the stock takes were carried out by officers directly involved in maintaining and accounting for the stock without independent supervision.
As a result, audit was not able to ascertain the correctness of the closing stock balance reflected in the financial statements.

Refer to Table 29.19 for closing stock take details.
Table 29.19: TMA Inventory Stock Take Balance As At 31 December 2014 Items Ministry’s Stock Certificate balance ($) Pine Post Fencing Wires Dairy Stock Beef Stock Pigs Stock SA Drugs Total 43,932 55,308 163,250 60,268 35,411 634,181 992,350 The above anomalies imply ineffective controls and lack of supervisory checks in the TMA operations hence the accuracy and completeness of the Trading and Manufacturing accounts could not be substantiated.
Recommendations  The Ministry should maintain proper records and be able to provide evidence to substantiate accounts and balances reported in its Trading and Manufacturing Accounts.

 The Ministry should ensure that proper reconciliations are carried out and errors identified are investigated and adjusted accordingly.

 Annual boards of survey must be conducted by Officers who are independent from the custody of the TMA stock.
 The internal control procedures in the Accounts and TMA Section, specifically supervisory checks should be strengthened to avoid such discrepancies.

Ministry’s Comments No comments provided by the Ministry.
Ministry of Agriculture Section 29: Page 17 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ________________________ 29.11.2 Discrepancies in TMA Cash at Bank Reconciliation The Assistant Accounts Officer (AAO – Ledgers) and the Bank Reconciliation Clerk shall prepare a bank reconciliation within 5 days of the end of the month.

Details of un-presented cheques and other reconciling items should be attached to the reconciliation statement.
Once the bank reconciliation is prepared, it should be signed and dated by the Bank Reconciliation Clerk and AAO (Ledgers) and submit to Ministry of Finance through Senior Accounts Officer (Operations).

The AAO (Ledgers) must verify balances in the bank reconciliation to the cashbook, bank statements, un-presented cheque list and the previous month’s bank reconciliation before certifying it.12 All bank accounts must be reconciled monthly.
The bank reconciliation shall list all outstanding cheques and other reconciling items and be signed and dated by the responsible officer.13 The Principal Accountant shall appoint three officers to be part of a Board of Survey to conduct a physical stock-take of all money on hand and other stock held in safes.14 When the operation of Trading and Manufacturing Accounts are approved by the Minister of Finance, a financial ceiling is set for the purposes of operating this account and at no point in time the Chief Accounting Officers who are controlling officers responsible for the operation of this account in the department/ministry can exceed the financial ceiling, as this may be unauthorized and officers responsible may be liable for a surcharge.15 From the review of monthly TMA bank reconciliation statements and related cash at bank records, the audit was not able to substantiate the accuracy of cash at bank balance as at 31 December 2014 as supported by the following:  A Board of Survey was not conducted at year end for the TMA cash on hand balance.
 A variance of $140,057 was noted between the cash at bank balance according to the TMA bank statement and the balance recorded in the FMIS general ledger at 31 December 2014.

Refer to Table 29.20 for details.


Table 29.20: Variance in Cash at Bank and FMIS Balance Particulars FMIS general ledger Bank statement Variance Amount ($) 1,031,806 891,749 140,057  Furthermore, a variance of $238,582 was noted between the TMA cash at bank balance and the cash balance reported in the FMIS general ledger as at 31 December 2014.

Refer to Table 29.21 for details.


Table 29.21: Variance in TMA Cash Account Account Account Description 4-30000-00000-540000 TMA Bank Balance FMIS ($) 1,031,806 Reconciliation Statement ($) 793,224 Variance ($) 238,582 12 Ministry of Agriculture – Finance Manual 2011 – Section 7.4.7 to 7.4.10 13 Finance Instructions 2010 – Section 32(6) 14 Ministry of Agriculture – Finance Manual 2011 – Section 7.2.1 15 Finance Circular No.
37 dated 26/11/1984 Ministry of Agriculture Section 29: Page 18 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ________________________ The bank reconciliation statement for December reflected lodgement not yet credited of $25,625 and receipts not in cash book of $610,395.

The details of these two balances were not made available for audit.

As a result, audit was not able to ascertain the accuracy and correctness of the TMA bank reconciliation.
The TMA bank reconciliation for May, June and August were not provided for audit verification.

 Variances were noted in the opening and closing cash book balances.

Refer to Table 29.22 for details.
Table 29.22: Variance in Opening and Closing Monthly Cash Book Balances Month December (2013) January February March April May June July August September October November December Opening Balance ($) 318,758.66 337,686.28 400,462.50 454,038.32 Closing Balance ($) 369,527.79 403,843.69 463,012.44 524,627.80 579,143.52 Not Available Not Available 569,724.00 609,698.22 Not Available 617,686.33 613,232.73 359,867.13 300,496.96 782,276.80 658,293.75 723,497.61 793,223.51  A TMA bank balance of $7,877 (allocation 4-30351-30999-540301) has been included in the FMIS general ledger under the overall balance of $1,031,806.
The details of this bank account and related records were not made available to audit and as a result, audit was not able to ascertain the accuracy and correctness of the balance reflected.

Failure to carry out proper bank reconciliations increases the risk of misappropriation and mismanagement of cash.

The issues highlighted above also indicated that the reconciliation statements were not properly checked to ensure their correctness prior to certification.
Recommendations  The responsibility of carrying out bank reconciliations should be given to Senior Accounts Officers having adequate knowledge of the bank reconciliation process.

 The Ministry should provide appropriate training to Accounts Officers involved in carrying out accounts reconciliations.

 TMA cash management controls including accounts reconciliation process should be reviewed and strengthened to minimise risk of mismanagement of cash.
Ministry’s Comments No comments provided by the Ministry.

Ministry of Agriculture Section 29: Page 19 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ________________________ 29.12 LWRM Trust Fund Account All bank accounts must be reconciled monthly.
The bank reconciliation shall list all outstanding cheques and other reconciling items and be signed and dated by the responsible officer.16 The receipt and payment of trust money must be recorded in a separate cashbook or set of ledger accounts.

Each month, the trust account must be balanced and reconciled with the trust bank account.

The names and balances of each account must be listed and the reconciliation shall be signed by the responsible officer.
Un-reconciled items must be investigated and resolved promptly.17 Our review of the Land Water Resource Management (LWRM) and Land Resettlement Planning and Development (LRPD) records revealed the following anomalies:  Significant variance of $607,838 was noted between Trust Fund Account balance and the Cash at bank balance as at 31 December 2014, in the FMIS general ledger.

Refer to Table 29.23 for details.


Table 29.23: Balance Variance in FMIS GL - Trust Fund Account balance and Cash At Bank Particulars FMIS Cash at bank balance FMIS Trust Fund Account Variance Amount ($) 877,651 269,813 607,838  The audit was only able to substantiate the details of retention fund balance amounting to $241,903.

The remaining balance could not be substantiated.

 Retention Fund ALTA Lease (Account - 9-30101-30075 895013) had a balance of $2,529.71.
There was no documentary evidence to support this balance.

In addition, the account was not reflected in the Ministry’s Financial Statements.

 Three accounts related to the Ministry of Fisheries and Forestry was still shown under Head 30 - Ministry of Agriculture and have not been regularised since 2010.

Refer to Table 29.24 for details.


Table 29.24: Ministry of Fisheries and Forestry Trust Fund reflected under Head 30 Allocation Description 9-30B01-78068-520301 9-30B01-76068-895005 9-30B01-78068-895005 WBC- Fisheries Bank Account Fisheries Fisheries Trust Account Amount ($) (25,965.57) (13,181.00) (94,005.04)  Recording of retention monies for contractual payments were not transferred to the Trust Fund Account.
Instead, the funds were recorded in the respective operating capital allocations until the final retention funds were paid out to the contractors.

When appropriation authority lapses, this practice could affect the subsequent year’s budget appropriation.

Refer to Table 29.25 for examples of two project payments during the year for which the retention funds were not transferred to the Trust Fund Account.
16 Finance Instructions 2010 – Section 32(6) 17 Finance Instructions 2010 – Section 58 (2& 3) Ministry of Agriculture Section 29: Page 20 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ________________________ Table 29.25: Details of retention money not transferred to Trust Fund account Project 1 Allocation : 130501 91821 080804 Claim No.

1 Claim No.

2 Claim No.

3 Claim No.

4 Claim No.

5 Claim No.

6 Claim No.

7 Claim No.


8 TOTAL Project 2 Allocation : 1-30501-91821-080805 Claim No.

1 Claim No.

2 Claim No.

3 Claim No.

4 Claim No.

5 Claim No.

6 Claim No.

7 TOTAL Contract No.
Total Claim ($) Retention ($) WSC 159/2013 WSC 37/ As a result of the above anomalies, audit was not able to substantiate the accuracy of the Trust Fund Account Statement of Receipts and Payments for the year ended 31 December 2014.
Recommendations  Monthly reconciliation process should be strengthened to mitigate the various issues highlighted above.

 The Ministry should ensure that errors and discrepancies identified during the reconciliation process are corrected promptly.

The Ministry should seek the Ministry of Finance assistance where necessary.

 Proper books of account should be maintained and provided for audit when requested.
 The recording of retention funds must be transferred to the Trust Fund Account following the completion of the job and the partial payment in order meet the contractor’s payment on a time without affecting the current or subsequent year’s budget appropriation.

Ministry’s Comments No comments provided by the Ministry.
29.13 Management of Fixed Assets An annual board of survey must be conducted each year to verify the existence and condition of assets recorded on the asset register provided that, for agencies that have, in the opinion of the Permanent Secretary a large asset base, the board of survey to be conducted on a cyclical basis so that all assets Ministry of Agriculture Section 29: Page 21 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ________________________ are checked every three years.18 Annual boards of survey must be conducted by 3 officers who are independent of the officer responsible for the custody of the assets.
A written record must be kept of each board of survey and must be signed and dated by the officers undertaking it.19 All assets which are not accounted for in the board of survey must be investigated to determine the appropriate recovery or write-off action.20 All agencies must maintain a Fixed Asset Register until the asset module of the financial management information system is implemented.
Details to be recorded in the asset register should include, at a minimum – (a) description; (b) cost or fair value; (c) date of acquisition, where known; (d) make, model and identification number, where applicable; and (e) location.21 Assets whose value is between $200 and $2,000 must also be recorded in an Expendable Items Register.22 Each agency must include in its annual financial statement a statement of losses.23 The following anomalies, which have been highlighted in previous years, were noted regarding the maintenance of fixed assets record:  The audit could not determine whether the Ministry has proper records for fixed assets.
Various requests were made to review the Fixed Assets Register (FAR), however was not provided.

In 2014, the Ministry acquired fixed assets valued at $100,61324 for which the audit could not substantiate whether they have been properly accounted for in the FAR.

 The Ministry did not conduct a Board of Survey for 2014.

In the absence of a Board of Survey Report, the losses of fixed assets, if any, that occurred during the year could not be substantiated.
 The Statement of Losses only reflected the losses to livestock, recorded at government rate.

As a result, the accuracy and completeness of the Statement of Losses for the year ended 31 December 2014 could not be ascertained.
Refer to Table 29.26 for recorded livestock losses in 2014: Table 29.26: Summary of Livestock Losses - 2014 Livestock Sheep Pig Cattle Goat Chicken Total Amount ($) 10,661 3,086 2,370 1,063 1,581 18,761 Ineffective controls on the management of fixed assets increases the risks of misappropriation.
18 Finance Instructions 2010 – Section 49 (1) 19 Finance Instructions 2010 – Section 49 (2) 20 Finance Instructions 2010 – Section 49 (3) 21 Finance Instructions 2010 – Section 46 (2) 22 Finance Instructions 2010 – Section 46 (3) 23 Finance Instructions 2010 – Section 71 (1) (f) 24 The amount is based on sample testing.
Ministry of Agriculture Section 29: Page 22 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ________________________ Recommendations  All property, plant and equipment purchased by the Ministry must be properly recorded in the FAR and/or the Fixed Asset module in the FMIS and ensure that assets can be easily tracked to individual officers or sections.
 The Ministry should periodically conduct Board of Surveys to take stock of all its fixed assets, update the fixed assets records and to ensure the accuracy and completeness of Statement of Losses.

 All the fixed assets must be coded for easy reference or identification.

Ministry’s Comments The comment is noted.

The Ministry has created its own database to record assets under its custody.
Fixed Assets Register has not been fully established since plans to conjointly fund the exercise with the Ministry of Finance has to be finalized for it to be carried out and implemented.

Coding of assets will be carried out once the FAR is completed.

29.14 Variance in Drawings Account Balance – Operating Account All bank accounts must be reconciled monthly.
The bank reconciliation shall list the outstanding cheques and other reconciling items and be signed and dated by the responsible officer.25 The Assistant Accounts Officer (Ledgers) must verify balances in the bank reconciliation to the cashbook, bank statements, un-presented cheque list and the previous month’s bank reconciliation before certifying it.26 The Principal Accountant shall appoint three officers to be part of a Board of Survey to conduct a physical stock-take of all money on hand and other stock held in safes.27 The following anomalies were noted from our review of the Operating Drawings account:  A variance of $15,483 between the Board of Survey carried out for the un-presented cheque listing and the Ministry’s reconciliation statement.
Refer to Table 29.27 for details.

Table 29.27: Variance in Un-presented Cheque Listing Description Un-presented Cheques Listing Board of Survey Un-presented Cheques ($) 438,291.64 Reconciliation Statement Variance ($) 422,808.67 ($) 15,482.97  In addition, there were unidentified balances namely foreign cheque, foreign EFT payments and direct debits in the Bank Statement which could not be substantiated.

Refer to Table 29.28 for details.
25 Finance Instructions 2010 – Section 32(6) 26 Ministry of Agriculture – Finance Manual 2011 – Section.7.4.10 27 Ministry of Agriculture – Finance Manual 2011 – Section 7.2.1 Ministry of Agriculture Section 29: Page 23 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ________________________ Table 29.28: Unidentified Balances Description Foreign Cheques Foreign EFT Payments Direct Debits Total Balance ($) 186,864.61 57,707.24 81,669.18 326,241.03 The above anomalies imply ineffective controls and lack of supervisory checks in the Accounts Section.
Recommendations  The Ministry should ensure that proper and accurate drawings account reconciliations are performed on a monthly basis.

Any postings identified not to be related to the activities of the Ministry should be investigated and rectified.

 The internal control procedures in the Accounts Section, specifically supervisory checks should be strengthened to avoid such discrepancies.

Ministry’s Comments No comments provided by the Ministry.
29.15 TMA Warehouse – Commercial Undertaking Livestock The authorised officers must not certify a payment as correct unless they are satisfied that there is documentation that these goods, services or works have been received.28 When inventory items are purchased, the divisional/sectional inventory bookkeepers shall record them in the inventory register.29 Storage of inventories shall be the responsibility of the storekeepers.
The storekeeper must ensure that adequate storage space is available for incoming stock as and when required and stocks are kept in an orderly manner allowing for safe access.30 The Ministry’s Animal Health & Production Division through its subsidiary venture titled Commercial Undertaking Livestock (CUT) engages in commercial trade of pine posts and fencing materials to farmers.
Our review of stores records for Trading and Manufacturing Accounts at the Animal Health & Production Division (AH&P) in Vatuwaqa revealed internal control weaknesses in inventory management as follows:  During the site visit for stocktake on 03/02/15, audit noted that the inventories (pine posts) were not properly stored and safeguarded.
28 Ministry of Agriculture – Finance Manual 2011 – Section 2.8.4 (ii) 29 Ministry of Agriculture – Finance Manual 2011 – Section 8.1.2 30 Ministry of Agriculture – Finance Manual 2011 – Section 8.2.1 (i) & (iii) Ministry of Agriculture Section 29: Page 24 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ________________________ Figure 29.3: Pine posts not properly stored  The inflow and outflow of inventories have not been accurately reported and accounted as the balances recorded in the stock-cards did not match the physical counts.
Refer to Tables 29.29 and 29.30 below for details.
Table 29.29: Variances Noted In the Physical Stocktake of Pine Posts Pine Post Pine Post - 1.8M X 50MM Pine Post - 1.8M X 100MM Pine Post - 1.8M X 75MM Pine Post - 1.8M X 150MM Pine Post - 2.4M X 100MM Pine Post - 2.4M X 125MM Pine Post - 2.4M X 150MM Pine Post - 3M X 125MM Pine Post - 4M X 125MM Pine Post - 3M X 100MM Pine Post - 3M X 150MM Pine Post - 1.8M X 125MM Stock-card Balance 03/02/15 29 400 869 15 244 26 49 35 5 17 5 504 Total Physical Count: 03/02/15 54 220 920 6 199 14 40 24 4 1 4 418 Variance Excess Shortage 25 --- 51 --- --- --- --- --- --- --- --- --- 76 --- 180 --- 9 45 12 9 11 1 16 1 86 370 Price/ Post ($) 7.00 12.00 10.00 26.00 23.00 26.00 38.00 36.00 69.00 34.00 51.00 24.00 Excess Value ($) 175.00 --- 510.00 --- --- --- --- --- --- --- --- --- 685.00 Shortage Value ($) --- 2,160.00 --- 234.00 1,035.00 312.00 342.00 396.00 69.00 544.00 51.00 2,064.00 7,207.00 Table 29.30: Variances Noted During the Stocktake of Fencing Materials Fencing Material Staples 4 Feet Goat Fence 3 Feet Goat Fence No 8 Plain Wire Stock-card Balance As At 23/06/15 129 39 3 16 Total Audit Physical Stock Count: 23/06/15 163 31 --- 14 Variance Excess Shortage Price/Unit 34 --- --- --- 34 --- 8 3 2 13 ($) 5.00 150.00 120.00 10.00 Excess Value ($) 170.00 --- --- --- 170.00 Shortage Value ($) --- 1,200.00 360.00 20.00 1,580.00  Inventories valued at $35,419 have not been delivered as at the date of audit31, although full payments have been made to suppliers in 2014.
Refer to Table 29.31 for examples.

31 Date of audit - 30/06/15 Ministry of Agriculture Section 29: Page 25 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ________________________ Table 29.31: Advance Payment Made and the Items were Not Delivered Date Item Description Cheque No.

LPO No.
Unit Cost Price 13/08/14 Pine Post - 1.8M X 50MM: 842871 PO40110- 001146 ($) 6.00 04/04/14 Pine Post - 1.8M X 100MM: 842768 PO40110- 001096 10.50 27/11/14 Pine Post - 1.8M X 100MM: 843010 PO40110- 001212 10.50 09/05/14 Pine Post - 1.8M X 75MM 842779 PO40110- 001107 11/07/14 Pine Post - 1.8M X 75MM 842827 PO40110- 001135 13/08/14 Pine Post - 1.8M X 75MM 842871 PO40110- 001146 03/10/14 Pine Post - 1.8M X 75MM 842941 PO40110- 001189 9.50 9.50 9.50 9.50 16/10/14 Pine Post - 1.8M X 150MM: 842941 PO40110- 001189 25.00 04/04/14 Pine Post - 2.4M X 125MM: 842768 PO40110- 001096 25.00 22/12/14 Pine Post - 3M X 125MM: 843066 PO40110- 001233 33.00 Remark Cost of undelivered material ($) 600.00 Full payment for 200 pine post was made but actual stock delivered as at the date of audit was 100 post hence balance of 100 post remain undelivered.
1,501.50 Full payment for 1,000 pine post was made but actual stock delivered as at the date of audit was 857 post hence balance of 143 post remain undelivered.

283.50 Full payment for 500 pine post was made but actual stock delivered as at the date of audit was 473 post hence balance of 27 post remain undelivered.

218.50 Full payment for 1,000 pine post was made but actual stock delivered as at the date of audit was 977 post hence balance of 23 post remain undelivered.
1,520.00 Full payment for 1,000 pine post was made but actual stock delivered as at the date of audit was 840 post hence balance of 160 post remain undelivered.

6,650.00 Full payment for 1,000 pine post was made but actual stock delivered as at the date of audit was 300 post hence balance of 700 post remain undelivered.

95.00 Full payment for 1,000 pine post was made but actual stock delivered as at the date of audit was 990 post hence balance of 10 post remain undelivered.
2,500.00 Full payment for 150 pine post was made but actual stock delivered as at the date of audit was 50 post hence balance of 100 post remain undelivered.

750.00 Full payment for 100 pine post was made but actual stock delivered as at the date of audit was 70 posts hence remained 30 undelivered.

post 330.00 Full payment for 50 pine post was made but actual stock delivered as at the date of audit was 40 posts hence balance of 10 post remained undelivered.
22/12/14 Pine Post - 4M X 150MM: 843066 PO40110- 001233 75.00 1,350.00 Full payment for 30 pine post was made but actual stock delivered as Ministry of Agriculture Section 29: Page 26 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ________________________ Date Item Description Cheque No.

LPO No.
LPO No.

Unit Cost Price ($) 24/10/14 25Kg Barbed Wired [240m] 842958 PO40110- 001152 97.80 16/10/14 3 Feet Goat Fence 842939 PO40110- 001150 74.50 16/10/14 4 Feet Goat Fence 842939 PO40110- 001150 96.00 21/11/14 Staple Nails 842994 PO40110- 001199 88.00 Remark Cost of undelivered material ($) at the date of audit was 12 posts hence remained 18 undelivered.
post 9,780.00 Full payment for 600 rolls barbed wire was made but actual stock recorded in the stock card is 500 rolls barbed wires hence 100 rolls barbed wire were not recorded.

2,235.00 Full payment for 550 rolls goat fence was made but actual stock recorded in the stock card is 520 rolls hence 30 fence were not recorded.

rolls goat 4,800.00 Full payment for 550 rolls goat fences was made but actual stock recorded in the stock card is 500 rolls hence 50 rolls goat fence were not recorded.
2,640.00 Full payment for 30 boxes of staple nails was made but stock card does not have record of delivery being made.

10/09/14 Staple Nails 842893 PO40110- 001151 83.00 83.00 22/04/14 Staple Nails 842773 PO40110- 001097 83.00 83.00 Full payment for 20 boxes staple nails was made but actual stock recorded in the stock card is 19 boxes of staple nails thus 1 box of staple nails was not recorded.


There is potential risk of loss of public funds/resources through misappropriation and mismanagement when inventory movements are not properly accounted for and when items purchased and paid for are not delivered.
Similar concerns were raised in previous years’ audit reports but the Ministry has yet to take constructive actions to implement audit recommendations.

Recommendations    Physical controls should be established to secure and safeguard all inventories.

Stock purchased should be fully delivered upon full settlement of the account.

Purchase order number should also be recorded in the stock card for easy audit trail.

Inventories should be periodically counted and compared to control records.
Ministry of Agriculture Section 29: Page 27 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ________________________  The Ministry should develop and issue policies and procedures that will improve inventory management.

Ministry’s Comments As immediate internal investigation has been recommended to the Acting Permanent Secretary for Agriculture to determine malpractices and the possibility of fraudulent activities.
The investigation is also recommended to draw conclusion of the scope of malpractice that has occurred in the TMA warehouse.

Result of the Investigation will be the basis of improving inventory management.

29.16 Motor Vehicle Accidents The maintenance and replacement of government vehicles is a significant cost to Government.
The behaviour of drivers, usage of vehicles for private purposes and lack of proper care all contributes to the cost to maintain vehicles.32 Within 24 hours after the accident, the driver shall prepare an accident report.33 A copy of the accident report shall be submitted to the Deputy PS who shall forward copies to the PS, Ministry of Finance and the Solicitor General.34 The accident report, Police report (if available), Solicitor General’s advice and the Supervisor’s recommendations will all be taken into consideration by the surcharging authority before any surcharge is imposed.35 Our review of records of eleven motor vehicle accidents (sample) in 2013 and 2014, maintained by the Assets Management Unit, revealed the following:  Police reports and assessment of estimated cost of repair were not attached to the Accident Reports and in some instances the Accident Reports were not provided for audit.
 Accidents Reports were at times submitted late to the Office of the Solicitor General or not submitted at all.

 In one incident, the Office of the Solicitor General had already resolved to surcharge the driver the cost of repairing the vehicle; however, the Ministry has not taken any action.

 Vehicle GN 520 was involved in an accident in 2013 whilst driven by an Agricultural Officer, who has now retired from the service.

The actual cost of repairing the vehicle was $16,145 and funded from the TMA.
There was no evidence to indicate that an Accident Report was submitted to the Office of the Solicitor General.

In addition, the audit was not provided with the Accident Report despite numerous requests and follow-up with the Transport Assistance Unit.

Refer to Appendix 29.1 for details.
In addition, the Asset Management Unit was slow in providing motor vehicle accident records for audit; was not assessing independently the cost of the damage; not maintaining photographic evidence of the vehicles involved in accident showing the extent of the damages; not filing the details of actual 32 Ministry of Agriculture - Finance Manual - Part 12: Vehicles 33 Ministry of Agriculture - Finance Manual - Section 12.6.4 34 Ministry of Agriculture - Finance Manual - Section 12.6.6 35 Ministry of Agriculture - Finance Manual - Section 12.6.8 Ministry of Agriculture Section 29: Page 28 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ________________________ costs involved in repairing the vehicles and not following up effectively on the progress of the cases with the Ministry of Finance and the Office of the Solicitor General.
Similar concerns were raised in previous years’ audits.

Recommendations  It is recommended that the Ministry maintains a Motor Vehicle Accident Register to record all vehicle accident reported cases and related details.
 The Ministry should maintain proper motor vehicle accident records; consider maintaining the photographic evidence of the damages to the vehicles; carry out its independent assessment on government owned vehicles to ascertain estimated cost of the repair; maintain details of actual costs incurred to repair the vehicle and routinely follow up with Ministry of Finance and Office of the Solicitor General on pending cases.
Ministry’s Comments The comment is noted, the Ministry has kept records of vehicle accidents in the Motor Vehicle Accident Register however recommended inclusion of critical to be undertaken will be strictly followed.

29.17 Leave Management General orders 705 (c) clearly stipulates that an officer can only carry forward a maximum of ten [10] working days of his/her annual leave entitlement from one leave year to another.
There should be no reason or justification for the accumulation of annual leave beyond what is permissible, nor payment of compensation in lieu, if leave were properly administered.

Under no circumstances should they be required to carryover more than ten [10] working days of leave entitlement from one leave year to the next.
Permanent Secretaries and Heads of Department are urgently requested to ensure that all officers utilize their annual leave when due and that proper planning of utilization of annual leave is undertaken and maintained.36 Overall, significant improvements are needed to improve the overall effectiveness and efficiency of the management of leave, an issue that has been previously highlighted to the Ministry.
The Ministry incurred significant costs for compensating leave due and not taken during promotion, retirement and resignation from the service as raised in the audit reports over the years.

Our review of a sample of leave records revealed that some officers have excessive leave balances which if not managed properly could result in further accumulation of leave due.

Refer to Table 29.32 for examples: Table 29.32: Samples of Significant Annual Leave Balance as at 30/06/15 EDP No.
47432 92026 63381 62710 Leave Year 03/12/14 – 02/12/15 17/09/14- 16/09/15 28/06/14 – 27/06/15 24/06/14 – 23/06/14 Leave Balance as at 30/06/15 62 ¾days 43 66.5 77 36 Public Service Circular No 48/2008 – Effective Leave Administration Ministry of Agriculture Section 29: Page 29 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ________________________ EDP No.
64281 64575 94536 92441 60665 63217 48847 58549 63434 92280 62227 92433 Leave Year 20/10/14 – 19/10/15 21/01/15 – 20/01/16 11/11/14 – 10/11/15 02/01/15 – 01/01/16 10/12/14 – 09/12/15 04/12/15 – 03/12/15 10/04/15 – 09/04/16 18/01/15 – 17/01/16 01/06/15 – 31/05/16 15/11/14 – 14/11/15 11/04/15 – 10/04/16 22/12/14 – 21/12/15 Leave Balance as at 30/06/15 46 43.5 41 44 46.5 63 46 62.5 69 48 54 51.5 Effective management of leave is central to the management of the workforce of the Ministry.
As annual leave accrues from year to year, officers should be encouraged to take regular leave for Occupational Health and Safety reasons among others.

It is important that scheduling of leave is carried out on a regular basis as an internal control mechanism to minimise incurring unbudgeted expenditures such as leave compensations.

Recommendation Administration of leave should be improved and officers should be encouraged to take leave when due or on a piece meal basis.
Officers that are about to retire or whose contracts are about to expire should be encouraged to proceed on pre-retirement leave.

Ministry’s Comment Ministry of Agriculture Circular Memorandum No.

4/2015 has emphasized the maximum number of leave days that can be carried over to the next leave year as per General Orders 705.

Officers are aware of this and have taken action in utilization their annual leave entitlements that are due.
Offices of retirements are released to take their pre-retirement leave except for scarce skilled officers where leave is compensated and be re-engaged.

29.18 Non-submission of Acquittal Reports and Audited Accounts Where required under the Finance Instruction 1-(8), the recipient of the Grant Assistance shall prepare an acquittal report.

The acquittal report shall provide the following information: i.

Details of grant money expended and unexpended; ii.

Grant objectives and targets achieved; and iii.


Financial statement (audited if practicable) for grants of $20,000 or more37.
Fiji Cooperatives Dairy Company Limited (FCDCL) at the end of every quarter must submit the following reports detailing the utilization of the grant to the Permanent Secretary for Agriculture:  Acquittal Reports;  Quarterly Project Progress Reports;  A comprehensive report on the services delivered from the period specified; and 37 Ministry of Agriculture - Finance Manual 2013 - Section 3.3.1 Ministry of Agriculture Section 29: Page 30 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ________________________  Annual Reports for 2013.38 Navuso Agriculture & Vocational School is required to provide a comprehensive report to the Ministry on the services delivered in accordance with the following, Quarterly Targets together with the Annual Reports and Audit Reports.
39 Grant acquittals are an integral part of good risk management and provide a measure of assurance that public funds allocated to grant recipients have been spent for their intended purposes.

Adequate and well-documented arrangements to ensure financial accountability are the basis of effective grant acquittal.

The Ministry provides assistance in the form of operating and capital grant to the Fiji Cooperative Dairy Company Ltd and the Navuso Agriculture Training School.
The audit noted that these agencies have not submitted the proper acquittals and audited financial statements to the Ministry of Agriculture for the year ended 2014.

Refer to Table 29.33 for details of grant paid as at 31 December 2014.
Table 29.33: Details of Grants disbursed Agency Fiji Cooperative Dairy Company Limited Navuso Agriculture Training School Grants Provided Capital Grant 1,000,000 --- Operating Grant --- 314,555 Total ($) 1,000,000 315,555 As at 30/06/15, the Ministry disbursed grant amounting to $198,000 to the Navuso Agriculture Training School although the school have not properly acquit and provided audited financial statements for grants disbursed in 2014.
The grant agreement provides the foundation for the Ministry to manage effectively and efficiently the government grant that it disburses.

It is therefore crucial that the Ministry ensure compliance with the provisions of the grant agreements.

There is potential risk of misusing government grants if the Ministry does not effectively monitor how the grants have been spent.
Recommendations  It is recommended that the Ministry appropriately enforce the requirements of the Grant Agreements with recipients’ of government grants.

 For ease of monitoring, the Ministry should develop standardized acquittal templates to be used by recipients to acquit grants.

Ministry’s Comments No comments provided by the Ministry.
38 Grant Agreement - Ministry of Agriculture & FCDCL for Dairy Development Program 2014: Part 7 Audits and Records 39 Capital Grant Agreement Dated 30/05/14 Between Ministry of Agriculture & The Methodist Church of Fiji – Navuso School Ministry of Agriculture Section 29: Page 31 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ________________________ 29.19 Missing Payment Vouchers The need to improve record management in all agencies is vital for promoting Good Governance, Transparency and Accountability in the public sector.
It is the responsibility of all staff hierarchy levels in each agency to integrate proper record management upkeep.

[2] Payment vouchers have been misplaced as they were not made available for audit.

In addition, payment vouchers and supporting documents were not securely stored and easily accessible to unauthorised personnel.

Refer to Table 29.34 for details.

Table 29.34: Missing Payment Vouchers Date Cheque No.
January 2014 February 2014 March 2014 April 2014 June 2014 July 2014 December 2014 215042-215133 215155-215242 212384-212444 212557-212568 212813-212832 212305-213316 213989-214006 ( Batch 09 June A/B) 214634-214646 215629 12139 216894-216905 ( Batch 03 December A/B) 216887 217006-217009 ( Batch 17 December A/B) Inaccessible accounting records provided a limitation to the scope of our audit.

Similar concerns were raised in previous years.


Recommendations  System of record keeping should be reviewed and strengthened by implementing proactive approach to improving financial records management practices.

 Accounting records and supporting documents to substantiate the balances reflected in the financial statements should be maintained in safe custody for audit purposes.

Ministry’s Comment Audit comment is noted.


The Ministry has now put in place a system whereby the Principal Accounts Officer has the authority to allow officers to enter the strong room and access to the required information.
Ministry of Agriculture Section 29: Page 32 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ________________________ Appendix 29.1: Details of Motor Vehicle Accident Cases Date of Accident 03/03/14 Vehicle No GP 362 - Lease Division Cause of Accident Estimated Cost of Repair ($) Remarks AH&P Nausori Due to tyre puncture, the vehicle lost control and collided with GN 860 at Nawaidina.

Quotations not provided with the accident report.


No evidence to indicate that a police report was obtained.

12/12/14 GP 225 09/08/14 22/06/14 11/06/14 GN 842 - Lease GP 282 - Lease GP 356 - Lease AH&P- Sigatoka Extension Motor vehicle slid due to slippery surface caused by heavy rain as a result bumping into another motor vehicle at Pacific Harbour.

Accident caused due to driver hitting a sheep at Yalalevu Ba.
HRF&I HRF&I Accident occurred due to a cow suddenly coming into the road at 8.18pm in the night time in Namosi.

Accident occurred in Matanipusi Hill, Serua due to the driver falling off to sleep.

Accident Report submission details to SG’s Office were not provided.

Late submissions made to SG’s Office on the 24/02/15.

2,700.00 Quotations not attached with the accident report.

Awaiting response from SG’s Office.

No submission made to SG’s office.


14,275.72 Accident Report submitted to SG’s Office on 03/07/14.

Awaiting response from SG’s Office.

17,745.86 Accident Report submitted to SG’s Office on 14/07/14 and awaiting response.

The vehicle was been parked with the lessor’s garage since July 2014 to be repaired.

09/06/14 GM 794 LRPD The driver drove over a hump, hit his eyes on the steering wheel causing him to lose control of the vehicle landing it in the drain.
Accident occurred at 5,550.00 SG’s Office on 07/01/15 resolved to surcharge the driver an amount of $5,550.00 Ministry of Agriculture Section 29: Page 33 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ________________________ Date of Accident Vehicle No Division Cause of Accident Estimated Cost of Repair ($) Remarks 05/11/14 GP 576 - Lease HRF&I Vesisivula Lekutu.
Accident occurred at Nadi Back road due to a 7 tonne truck coming from the opposite side of the road accidently droving over a vehicle leaf spring which flew and hit GP 576 Tyre, side step and centre of the two doors at the driver’s side.

29/10/14 GP 636 - Lease Research Accident occurred at Wailevu Coast Cakaudrove.

The vehicle hit an oncoming bus as a result of careless driving.

The vehicle was a newly leased /a week old.

As at the date of audit, the Ministry has yet to surcharge the driver.
8,880.00 Accident Report submitted to SG’s Office on 03/02/15 and awaiting response.. 15,837.00 Accident Report submitted to SG’s Office on 09/03/15 and awaiting.

13/09/14 27/11/14 2013 GN 526 GP 283 - Lease GN 520 Research AH&P AH&P Accident Reports were not provided to audit for verification despite various requests and follow-ups.

Not Provided 16,145.00 (actual cost or repair) Audit was not provided with the accident report from the Transport Assistance Unit despite various requests and follow-ups.
No submission made to the SG’s Office.

The driver had retired on 04/05/14.

The vehicle was repaired using the TMA funds as the Director Animal Health and authorised by Production.
Ministry of Agriculture Section 29: Page 34 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ____________________________ Section 30 Ministry of Fisheries and Forest Role and Responsibility The Ministry of Fisheries and Forests is responsible for the formulation of policies that promote best practices (equating conservation and utilizations) that will ensure a sustainable fisheries and forestry sectors.
The Ministry drives this through coordination, consultation and in partnership with resource owners, communities, private sector, government agencies, and non– government organisations, regional and international agencies.

Table of Contents PART A: 30.1.

30.2.

30.3.

30.4.

30.5.

30.6.

PART B: 30.7.

30.7.1 30.7.2 30.8.

30.9.

30.10.
Appendix 30.1: Appendix 30.2: Appendix 30.3: FINANCIAL STATEMENTS ..................................................................................................................... 1 Audit Opinion ............................................................................................................................................ 1 Statement of Receipts and Expenditure ................................................................................................... 2 Appropriation Statement ........................................................................................................................... 3 Trading and Manufacturing Account ......................................................................................................... 3 Trust Fund Account .................................................................................................................................. 4 Statement of Losses ................................................................................................................................. 4 AUDIT FINDINGS ..................................................................................................................................... 5 Upgrading and Refurbishing of Quarters .................................................................................................. 5 Anomalies in Refurbishment Contracts ..................................................................................................... 5 Physical Inspection – Upgrade of the Colo-i-Suva Quarters ..................................................................... 8 Drawings Account Reconciliation.............................................................................................................. 9 Anomalies in the Main Trust Fund Account – 1/3 Subsidy Scheme ....................................................... 10 Prior Year Issues .................................................................................................................................... 12 Physical Inspection on Colo-i-Suva Quarters .......................................................................... 16 Anomalies in the Trading and Manufacturing Account – 2014 ................................................. 17 Examples – VAT not accounted on supplies of goods and services ........................................ 19 PART A: FINANCIAL STATEMENTS 30.1 Audit Opinion The audit of the 2014 accounts of the Ministry of Fisheries and Forests resulted in the issuing of a qualified audit report.
The qualifications are as follows.

 Included in the Trading and Manufacturing Account (TMA) Balance Sheet are TMA Surplus Capital Retained of $202,067, TMA Accumulated Surplus with debit balance of $51,529, Accounts Receivable of $5,745 and Deposits and Deductions of $5,196.
The audit was not able to verify the amounts as the Ministry did not provide appropriate audit evidences to support the balances and to ascertain the accuracy and completeness of the Trading and Manufacturing Accounts as at 31 December 2014.

 There was an un-reconciled variance amounting to $19,079 between the FMIS general ledger cash balance and the TMA bank reconciliation statement.
Accordingly, the audit was not able to ascertain the accuracy and completeness of the TMA Cash at bank balance of $65,947 as at 31 December 2014.

Ministry of Fisheries and Forests Section 30: Page 1 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ____________________________  The closing balance of the Trust Account Statement of Receipts and Payments of $135,726 did not correspond to the FMIS general ledger resulting in an un-reconciled difference amounting to $1,154,989.
Accordingly, the audit was not able to ascertain the accuracy and completeness of the Main Trust Fund balance as at 31 December 2014.

30.2 Statement of Receipts and Expenditure The Ministry of Fisheries and Forests collected revenue totalling $1.8 million and incurred a total expenditure of $19.3 million in 2014.

Details are shown in Table 30.1 below.
Table 30.1: Statement of Receipts and Expenditure for 2014 Description Native timber measurement Vessel registration Management fees License fishing Sale of fish and ice Miscellaneous revenue TOTAL REVENUE Established staff Government wage earners Travel & communication Maintenance & operations Purchase of goods & services Operating grants & transfers Special expenditures Total Operating Expenditure Capital Construction Capital Purchases Total Capital Expenditure Value added tax TOTAL EXPENDITURE 2014 ($) 1,002,754 41,263 7,416 70,418 294,088 413,672 1,829,611 7,179,068 1,825,734 543,104 2,268,432 821,026 370,283 152,241 13,159,888 4,026,408 791,075 4,817,483 1,295,461 19,272,832 2013 ($) 675,552 9,367 58,562 98,782 256,914 143,604 1,242,781 5,416,813 1,544,468 535,073 2,092,295 909,281 398,363 336,135 11,232,428 4,011,113 --- 4,011,113 1,168,773 16,412,314 Total revenue increased by $586,830 or 47% in 2014 compared to 2013 mainly due to the increase in revenue generated from native timber measurement, vessel registration and miscellaneous revenue.
Total expenditure increased by $2.9 million or 17% in 2014.

The increase is explained by the following:  Established Staff increased by $1.8 million or 33% in 2014 mainly due to the filling of vacant positions, the creation of 25 new positions for the Fisheries Offshore Division and the regularization of the project posts for Technical Services Fleet Bai-ni-Takali Vessel crew.

 Government Wage Earners increased by $281,266 or 18% in 2014 mainly due to the filling of vacant positions.
 Maintenance and Operations increased by $176,137 or 8% in 2014 mainly due to increase in activities carried out in maintenance of equipment and operation costs for both Departments.

There were increased costs for maintenance of motor vehicles and for power supply.
Ministry of Fisheries and Forests Section 30: Page 2 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ____________________________  Pine woodlot logging packages were purchased for the Narocake – Gau and the Cicia Pine Schemes, thus the Capital Purchases of $791,075 recorded in 2014.

30.3 Appropriation Statement The Ministry incurred a total expenditure of $19.3 million against the revised budget of $21.2 million resulting in savings of $1.9 million or 9%.
Details of expenditure against the budget estimates are provided in Table 30.2 below.
Table 30.2: Appropriation Statement for 2014 SEG Item Established staff Government wage earner Travel and communications Maintenance & operations Purchase of goods & services Operating grants & transfers Special expenditures Total Operating Expenditure Capital Construction Capital Purchases Total Capital Expenditure Value added tax Total Expenditure Budget Estimate ($) 7,571,241 1,543,405 475,077 2,243,920 891,293 469,400 182,500 13,376,836 5,204,000 1,090,000 6,294,000 1,513,000 21,183,836 Changes ($) (353,463) 346,966 76,832 72,042 (41,983) (99,114) (1,280) --- --- --- --- --- --- Revised Estimate ($) 7,217,778 1,890,371 551,909 2,315,962 849,310 370,286 181,220 13,376,836 5,204,000 1,090,000 6,294,000 1,513,000 21,183,836 Actual Expenditure ($) Lapsed Appropriation ($) 7,179,068 1,825,734 543,104 2,268,432 821,026 370,283 152,241 13,159,888 4,026,408 791,075 4,817,483 1,295,461 19,272,832 38,710 64,637 8,805 47,530 28,284 3 28,979 216,948 1,177,592 298,925 1,476,517 217,539 1,911,004 30.4 Trading and Manufacturing Account Table 30.3: Manufacturing Account Description Opening raw material Add: Purchases Less: Closing raw material Raw material used Direct Cost Add: Direct labour Cost of manufacturing goods transferred to trading account Table 30.4: Trading Account Description Sales Opening stock of finished goods Add: Cost of manufactured goods Less: Closing stock of finished goods Cost of finished goods sold Gross Profit/(Loss) 2014 ($) 19,069 --- 10,728 8,341 --- 100,104 108,445 2014 ($)
 152,495 10,125 108,445 118,570 7,002 111,568 40,927 2013 ($) 16,900 --- 19,069 (2,169) (3,536) 123,345 117,640 2013 ($) 144,326 5,294 117,640 122,934 10,125 112,809 31,517 Ministry of Fisheries and Forests Section 30: Page 3 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ____________________________ Table 30.5: Profit and Loss Statement Description Gross Profit/(Loss) transferred from Trading Account Total Income Maintenance & operation Special fees and charges VAT Total Expenses
 Net Loss Table 30.6: Balance Sheet Description TMA surplus capital retained to CFA TMA accumulated surplus Net Loss Total Equity Cash Raw materials Accounts receivable Finished goods Total Assets Deposits and deduction Total Liabilities Net Assets 30.5 Trust Fund Account 2014 ($) 40,927 40,927 107,215 25 --- 107,240 (66,313) 2014 ($) 202,067 (51,529) (66,313) 84,225 65,947 10,728 5,745 7,002 89,422 5,197 5197 84,225 2013 ($) 31,517 31,517 40,069 56 --- 40,125 (8,608) 2013 ($) 208,434 (51,529) 156,905 109,356 19,069 5,745 10,125 144,295 (12,610) (12,610) 156,905 Table 30.7: Department of Fisheries – 1/3 Subsidy Scheme Description 1/3 Subsidy contribution Total Receipts Retention money Total Payments Surplus / (Deficit) Opening balance at 1 January Closing balance as at 31 December 30.6 Statement of Losses 2014 ($) 105,944 105,944 25,858 25,858 80,086 55,639 135,725 2013 ($) 69,644 69,644 70,444 70,444 (800) 56,439 55,639 Alleged misappropriations of revenue totalling $3,644 are being investigated by the Ministry.
In accordance with the Procurement Regulations 2010 (Clause 52), the Permanent Secretary for Finance approved the disposal and write-off of the following items upon submission of the recommendations in the Board of Survey Report.
Ministry of Fisheries and Forests Section 30: Page 4 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ____________________________ Table 30.8: Fixed assets disposed off Description Computer Equipment Motor Vehicle Office Equipment Computer Equipment Motor Vehicle Office Equipment Computer Equipment Total 2014 ($) 91,488 41,310 --- 43,699 33,750 --- 56,915 267,162 2013 ($) --- 2,400 9,000 --- 3,950 9,500 --- 24,850 PART B: AUDIT FINDINGS 30.7 Upgrading and Refurbishing of Quarters In 2014, $500,000 was allocated for the upgrading and refurbishment of Offices and Quarters of which $403,527 (VIP) was actually utilised.
The upgrading and refurbishment of quarters were carried out in Colo-i-Suva and the Dreketi Forestry Station.

As the major component of the costs was incurred for the upgrading and the refurbishment of the Colo-i-Suva quarters, which totalled $387,304 (VEP), the audit solely focused on the work carried out in Colo-i-Suva.

The upgrading and refurbishment did not go through the tender process as the costs were below the Government Tender Board threshold of $50,000.
The following were noted from the audit: 30.7.1 Anomalies in Refurbishment Contracts In view of the substantial amount of the government funds involved in the procurement process, Ministries and Departments must ensure that a draft contract is submitted to the Office of the Solicitor General for vetting.1 10% of the contractual sum shall be retained as a contingency against defects liability period upon written notification by the client of satisfactory completion of works.2 The work contracts were drawn up by the Planning and Monitoring Unit of the Ministry.
The allocation of contractors for the upgrade/refurbishment works for the quarters in Colo-i-Suva were done in blocks, with a block containing a number of quarters in the same vicinity.

Our review of contract documents revealed the following anomalies:  There was no evidence that the contract template used was vetted by the Office of the Solicitor General.

In addition, the contracts did not contain specific scope of works or terms of reference.
The scope of works for the contracts were not specific to the upgrade/refurbishment requirements of each quarter, which indicated that the Ministry did not identify the maintenance needs for each quarters or offices before engaging contractors.

Refer to Table 30.9 for examples.

1 Finance Circular No.
3/2013- Paragraph 4.1 2 Upgrading and Repairing Contracts for Block 2 – Section 3.2 Ministry of Fisheries and Forests Section 30: Page 5 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ____________________________ Table 30.9: Contractors Refurbishment Details Contractor Contractor 1 Contractor 2 Contractor 2 Contractor 3 Contractor 4 Contractor 5 Contractor 5 Agreed Contract Sum ($) Block 2 = $50,000 Block 6 = $46,900 Block 7 = $49,500 Block 3 = $50,000 Block 1 = $50,000 Block 8 = $50,000 Block 4 = $50,000 Block 5 = $50,000 Garage = $49,000 Contract Refurbishment of the Colo i Suva Forestry Quarters – Block 2 & Block 6 Refurbishment of the Colo i Suva Forestry Quarters – Block 7 Refurbishment of the Colo i Suva Forestry Quarters – Block 3 Refurbishment of the Colo i Suva Forestry Quarters – Block 8 & Block 1 Refurbishment of the Colo i Suva Forestry Quarters – Block 4 Refurbishment of the Colo i Suva Forestry Quarters – Block 5 Refurbishment of the Forestry Department garage in Colo i Suva  The Ministry did not maintain any record of upgrade/refurbishment works done on the quarters in each block as these records were not provided for audit.
 Important contract conditions such as the date of signing, date of commencement and completion of work were not stated in some contracts.

Furthermore, the signing of some contracts were not witnessed.

Refer to Table 30.10 for details.
Table 30.10: Contractors Refurbishment Details Contractor Contractor 1 Contractor 2 Contractor 3 Contractor 4 Contractor 5 Contract Comments Refurbishment of the Colo i Suva Forestry Quarters – Block 2 & Block 6 Refurbishment of the Colo i Suva Forestry Quarters – Block 3 & 7 Refurbishment of the Colo i Suva Forestry Quarters – Block 1 & Block 8 Refurbishment of the Colo i Suva Forestry Quarters – Block 4 Refurbishment of the Colo i Suva Forestry Quarters – Block 5 of signing,  Dates commencement and completion of work were not stated in the contract.
 Defects liability period commencement and completion dates were not stated in the contract.

of  No witness to the contractor’s signature  Dates signing, and completion of work were not stated in the contract.

 Defects liability period commencement and completion dates were not stated in the contract.

commencement of  No witness to the contractor’s signature  Dates signing, and completion of work were not stated in the contract.


 Defects liability period commencement and completion dates were not stated in the contract.

commencement of  No witness to the contractor’s signature  Dates signing, and completion of work were not stated in the contract.
 Defects liability period commencement and completion dates were not stated in the contract.

commencement Ministry of Fisheries and Forests Section 30: Page 6  No witness to the contractor’s signature REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ____________________________ Contractor Contractor 5 Contract Comments Refurbishment the Forestry Department garage in Colo i Suva of of signing,  Dates commencement and completion of work were not stated in the contract.
 Defects liability period commencement and completion dates were not stated in the contract.

 No witness to the contractor’s signature  For the refurbishment works done by Contractor 1 for Block 2, the contract sum was fully paid at each phase without deducting the agreed contingency sum of 10% as stipulated in the agreement, to cover defect liability period.

Refer to Table 30.11 for details.

Table 30.11: Contractor Payment Details Contracts Block 2 refurbishment Details Chq No.
1st payment 2nd payment 3rd payment Total Payment 68918 70218 71446 Amount ($) 25,000 12,500 12,500 50,000 There is potential risk for excessive cost and unnecessary or substandard work done by contractors if the scope of works are not clearly defined or specified in the contracts.

Recommendations  The Ministry should consider having the contract template currently in use reviewed by the Solicitor General’s Office.
 It is recommended that work specification become part of the contracts in terms of clear output or performance requirements by contractors.

 The assistance of the Ministry of Infrastructure and Transport can be sought in the inspection of the quarters/offices and establishing work specification to be carried out.

 Percentage of contract sum to cover defect liability period should be retained (retention fund) if it is a requirement of the contract.
 It is also recommended that the Ministry develop contracting policy/rules to govern the development of contracts, endorsement and execution of contracts.

Ministry’s Comments The Ministry notes with concern the contractual issues highlighted herein.

 Tender Processes would only mean that some houses would be left out due to funding constraints.

Each block consisted of 4 houses to which contractors offered less than $50,000 to have General Maintenance done to these 44 year old houses.
The idea was to give a new image to our Colo i Suva Quarters.

 In past experiences 10% retention period usually lapsed into the following year in which funds were no longer available as each financial year had its own budget provision.

The Department would be facing difficulties in funding defect retentions for the previous year.

 There was a contract template vetted by the Solicitor General’s Office to which works were then carried out.
(email correspondences attached) Ministry of Fisheries and Forests Section 30: Page 7 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ____________________________  Scope of work contained specific work requirement suited for the Colo-i-Suva houses as they have not gone through any major repair work for the past 44 years.

The intention was to at least improve these 30 Forestry Quarters within the Budget provided as it would be extensively expensive to fully upgrade each quarters.
Given the age and condition of houses each Colo-i-Suva house would cost $20,000-$25,000 to repair.

We worked on a $12,000 average to complete the 30 houses.

 Work was scoped to a generic and general approach in which relevant and maintenances were identified.

 There was a report provided by the Clerk of Works and the Station Officer to verify work carried out prior to any payment.
With reference to the OAG recommendations, the Ministry now undertakes to implement the following in 2015:      have all contracts templates reviewed by the Solicitor General’s Office we have now liaised with PSC Accommodation who are assisting us on the Scope of Works/ Specifications for all quarters we have solicited the assistance of MoIT to inspect all refurbishments works the Ministry will include in our contracts the retention funds the Ministry will develop its contracting policy/rules to govern the development of contracts, endorsement and execution of contracts 30.7.2 Physical Inspection – Upgrade of the Colo-i-Suva Quarters A site visit to physically inspect the upgrade and refurbishment works carried out in 2014 on the Forestry Quarters in Colo-i-Suva was made in 18/03/15.
The total cost of the upgrade was $387,304.

Physical inspection of the quarters revealed numerous defects, which included: leaking roofs; screen doors and windows not repaired; screen window frame not fitted properly;     missing louver blades;      louver frames not replaced; rotted double wall not replaced; roof gaps causing rain to leak inside; screen door removed but not replaced; and rusted iron roof were not replaced.

Refer to Appendix 30.1 for details.


The defects identified during the site inspection could have resulted from the absence of work specifications identified in the work contracts.

In addition, the refurbishment works undertaken may not have been properly monitored and assessed before payments were made to contractors.

Recommendations  It is recommended that the Ministry properly monitor and assess works done by contractors before the contract sum is paid.
 The Clerk of Works engaged should be qualified to assess and verify the works done by contractors.

In addition, the Ministry should seek assistance from the Ministry of Ministry of Fisheries and Forests Section 30: Page 8 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ____________________________ Infrastructure and Transports in assessing upgrade and refurbishment works on buildings completed by the contractors.
 Defect terms and conditions to be fully exercised during the defects liability period prior to the issuance of the certificate of completion and the cost of defects to be deducted accordingly from the contractor’s retention fund if works carried out were not done up to standards.

Ministry’s Comments The Ministry notes with grave concern the issues highlighted on the inspections and hereby realize that the scope of works was not properly detailed.
Further the absence of a qualified Clerk of Works has aggravated the situation in which a major portion of these refurbishment works had not addressed the defects in each block.

From 2015, we have sought the assistance of PSC Office Accommodation expertise and MoIT personnel in satisfying technical requirements of all construction and refurbishment works.
30.8 Drawings Account Reconciliation Drawings Reconciliations shall be in accordance with the format provided in schedule 3, and must be submitted within 5 days after the end of the month.3 The closing balance as per general ledger should agree to the cashbook balance.4 The audit noted significant variance between the drawings account reconciliation statement and the FMIS general ledger balance as at 31 December 2014.

Refer to Table 30.12 for details.


Table 30.12: Variance in the Drawings Reconciliation Department Ministry of Fisheries and Forests General Ledger ($) 241,173.12 Reconciliation Statement ($) 512,100.48 Variance ($) 270,927.36 The reasons for the variance had been identified in the drawings reconciliation statement; however these have not been adjusted in the general ledger.
These included bank fees, errors in bank statement and cheque register, foreign cheques, EFT not presented and other differences that were yet to be adjusted.

The drawings account reconciliation statements were not prepared on a monthly basis.

Performing reconciliation of accounts is ineffective if variances noted are not promptly rectified.

Recommendations  The Ministry should investigate and rectify the variances noted between the reconciliation statements and the FMIS general ledger.
 Reconciliation of accounts should be performed timely and accurately.

 It is also recommended that the Ministry take a proactive approach by also performing monthly drawings account reconciliation rather than relying on the Ministry of Finance.
3 Ministry of Fisheries & Forests Finance Manual 2013 – Section 15.3.9 4 Ministry of Fisheries & Forests Finance Manual 2013 – Schedule 3 – Drawings Reconciliation Ministry of Fisheries and Forests Section 30: Page 9 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ____________________________ Ministry’s Comments The concerns raised in this audit item is noted, however the Ministry seeks further clarification as our records depict a different set of figures altogether, in contrast with the figures picked up by the auditors.
Our GL balance as at 31/12/2014 stands at $240,838.62 in contrast with $241,173.12 whilst our Un-presented Cheques records $339,871.15 in contrast with $512,100.48 hence the actual variance stands at $99,032.53.

In view of the recommendations, the Ministry welcomes the issues highlighted and are taking necessary measures in complying and identifying discrepancies on this account to reduce/eliminate the variances highlighted.
30.9 Anomalies in the Main Trust Fund Account – 1/3 Subsidy Scheme Each month, the trust account must be balanced and reconciled with the trust bank account.

The names and balances of each account must be listed and the reconciliation shall be signed by the responsible officer.
Un-reconciled items must be investigated and resolved promptly.5 All procurement of goods and services shall be prepared in accordance with the appropriate provisions in the Procurement Regulations 2010.6 The audit of the 1/3 Subsidy Scheme Main Trust Fund Account for the Department of Fisheries and related records revealed anomalies as discussed below:  There was a variance of $1.07 million between receipts and payment balance reflected on SLG 86 and SLG 89 accounts and the cash balance reflected under SAG 52.
Refer to Table 30.13 for details.
Table 30.13: Variance between the Main Trust General Ledgers Account Description Main Trust Balance 9-32301-78068-860101 9-32301-78068-895005 Total Main Trust Cash Balance 9-32301-76068-520301 Variance Project Development Fund Fisheries Generated Account Amount ($) 15,310.00 (1,034,573.51) (1,019,263.51) 53,447.41 (1,072,710.92)  The accuracy and completeness of cash at bank as at 31 December 2014 could not be ascertained as there was a variance of $82,278.26 between the cash at bank balance in the FMIS general ledger and the bank reconciliation statement balance.
Refer to Table 30.14 for details.
Table 30.14: Variance between the GL and Bank Reconciliation Particulars Cash at Bank Reconciliation Statement FMIS General Ledger Variance Amount ($) 135,725.67 53,447.41 82,278.26 5 Finance Instructions 2010 – Section 58 (3) 6 Finance Instructions 2010 – Section 12 Ministry of Fisheries and Forests Section 30: Page 10 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ____________________________  The accuracy and completeness of Main Trust Fund ending balance at 31 December 2014 could not be ascertained as there was a variance of $1.1 million between the FMIS general ledger balance and the reconciliation statement.
Refer to Table 30.15 for details.

Table 30.15: Variance between the GL and Bank Reconciliation Particulars Main Trust Reconciliation Statement General Ledger (FMIS) Variance Amount ($) 135,725.67 (1,019,263.51) 1,154,989.58  The main trust fund balance for Allocation: 9-32301-78068-895005 (Fisheries) at 31 December 2014 was overdrawn by $1.03 million.

 Monthly trust fund reconciliation statements for July, August and September 2014 were not provided for audit.
 Transactions from January to November were only posted to the FMIS general ledger at year end.

Our review of the cash book indicated that there were receipting and payment activities throughout the year, however the posting to the main trust account and the cash account in the FMIS general ledger was done in December 2014.
 The Ministry maintains a bank account (cheque) with a commercial bank in which transactions have not been reflected in the AP470 cash book and/or under Fund 1, 4 or 9 of the FMIS general ledger.

The existing balance at the time of the audit was $14,085.

The accounting and administrative practices of the Main Trust Fund account, including the monitoring of the transactions, are ineffective as evidenced by the issues discussed above.
Recommendations    The effectiveness of the account reconciliation process should be strengthened to ensure that variances identified are resolved and books of account corrected/adjusted accordingly.

Transactions should be posted to the FMIS general ledger daily.

Supervisory function in the Accounts Section should be improved.

Ministry’s Comments The issues highlighted is taken is noted with concern due to the variances in this particular account.
Since the inception of the trust account in 2007, there were some changes made by Ministry of Finance on the allocation numbers and the cost-centers.

There were also some trust account FMIS set-up issues in that the default account in the system did not match with the GL allocation, hence the debits and the credits were not off-setting each other leading to the increasing credits of $1,019,263.51.
This discrepancy has been rectified through a write-off exercise undertaken by FMIS and the Ministry in early 2015.

Ministry of Fisheries and Forests Section 30: Page 11 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ____________________________ 30.10 Prior Year Issues A number of significant issues were raised with recommendations for improvements previous year’s audit.
While some issues have been rectified, a number of issues identified from the financial statement audit have yet to be resolved or are in the process of being resolved.

These recurring issues make up the major component of this report.
Refer to the Table 30.16 below for details Table 30.16: Prior Year Issues Issues Recommendations Current Status Anomalies in the Trading and Manufacturing Account (TMA) The Ministry did not maintain adequate accounting records to provide sufficient and appropriate audit evidence to substantiate the TMA the balance Balance Sheet.

In addition, the Ministry’s records did not reconcile with the balances in the FMIS general ledger.

in   Ministry’s Proposed Action comments No provided by the Ministry.
– No Open progress since reported in 2013. issues Similar been have highlighted in the 2014 audit as specified on Appendix 30.2.

    Irregularities in TMA Bank Reconciliation Anomalies noted include un-reconciled variances, for which the Ministry could not explain, were as follows:  Cash at bank balance variance of $19,988 between the FMIS general ledger and the bank reconciliation statements at 31 December 2013.
 Variance of $2,714 between the total receipts recorded in the cash book and the total bank deposit for 2013.

 Bank reconciliation for December 2013 had lodgments not yet credited of $25,199.

These balances have been carried forward from as far back as 2009.

For the months of March – May, August, October and December, the receipts reflected in the reconciliation  No comments provided by the Ministry.
– No Open progress since reported in 2013. issues Similar have been highlighted in the 2014 audit as on specified Appendix 30.2. to mitigate As cash management is a high risk area, it is crucial that the Accounts Section its monthly strengthens reconciliation bank process the various anomalies noted.

The Permanent Secretary and the Principal Accounts Officer should ensure that all errors noted in the bank statements reconciliation are and adjusted accordingly, where necessary.
The procedures Accounts control the TMA investigated in and internal Ministry of Fisheries and Forests Section 30: Page 12 during various reconciliation be should to mitigate issues Monthly process strengthened the highlighted above.

Errors and discrepancies identified the process reconciliation corrected be should in promptly, consultation the Ministry of Finance where necessary.
Proper books of account should be maintained and provided for audit when requested to substantiate accounts and balances the Trading reported and Manufacturing Accounts.

and with in REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ____________________________ Issues Recommendations Current Status statements did not reconcile with the actual receipts for the months.

Section, specifically supervisory checks should be strengthened to avoid such discrepancies.
 Anomalies in the Main Trust Fund - Fisheries 1/3 Subsidy Scheme Anomalies noted for 2013:  Un-reconciled variance in the cash at bank balance as recorded in the FMIS general ledger and the bank reconciliation statement.

For the year ended 31 December 2013, the variance was $591,855.

Accounts The Principal Officer should ensure that Trust Fund Bank Account’s monthly reconciliations are carried out properly and accurately.

Ministry’s Proposed Action No comments provided by the Ministry.
– No Open progress since reported in 2013. to addition In other anomalies, issues similar have been highlighted in the 2014 audit as specified on Section 30.9  Variance of $60,285 between the receipts posted into the FMIS general ledger and cash summary receipt book.

 Some payments and the monthly through recorded account were not related subsidy scheme.
revenues the Trust Fund the to  Some trust monthly fund reconciliation statements were not provided for audit – March & April 2013  Accounts Officers should be resolving un- in proactive variances reconciled between the Ministry’s reconciliation statements and the FMIS general ledger.

The the Ministry should seek Ministry Finance’s of assistance where necessary.

 Receipting of government revenue and payments of operating/capital expenditures from the Main Trust Account should not be entertained.
All operating and capital payments should be the processed drawings and recorded in the FMIS general ledger under Fund 1.

All revenues not related to the scheme should be deposited to fund the consolidated account.

If initial purpose of the establishing the Main Trust Account has become non- existent, the Ministry should review administration of the account.
through account  Variance in Drawings Account Balance Significant variance of $85,127 noted between Account Reconciliation Statement for December 2013 and the FMIS general ledger closing balance as at 31 December 2013.

Drawings the in resolving Accounts Officers should be proactive un- reconciled balances between the Ministry’s reconciliation statements and the FMIS general ledger.

The Ministry should also seek assistance from the Ministry of Finance where necessary.
comments No provided by the Ministry.
– No Open progress since reported in 2013. issue The same been has highlighted in the 2014 audit as specified on Section 30.8 Incorrect Accounting of VAT The Ministry did not account for tax on supplies of goods and services that should Ministry of Fisheries and Forests  The Ministry should ensure that VAT are accounted for in Open – similar issues have been No comments provided by the Section 30: Page 13 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ____________________________ Issues Recommendations Current Status be subject to VAT.
On the other hand, VAT was accounted in the FMIS general ledger on zero rated supplies The above will result in the inaccurate input tax balances reflected in the VAT Returns.

 in identified the 2014 audit as detailed in Appendix 30.3. the FMIS general ledger on all supplies of goods and services that are subject to VAT The Ministry should identify all zero rated items that are regular part of its expenditure and ensure that VAT is not charged on them.

Ministry’s Proposed Action Ministry.


 Reconciliation of Accounts and VAT Returns should be properly scrutinised by the Principal Accounts Officer.

No comments provided by the Ministry.

progress Some noted since reported in 2013.

However, similar issues have been identified the 2014 audit as on specified Section 30.7 in No progress since reported in 2013.

No Comments.
No Comments.

from verification of Refurbishment Contract Anomalies noted refurbishment contract documents were:  Refurbishment contracts not vetted by the Office of the Solicitor General.

 Although the contract amounts were within the procurement limit of the Permanent Secretary for Fisheries and Forests, none of the contracts verified during the audit were endorsed or signed by the Permanent Secretary.
the contracts were endorsed by Officers whose procurement limits were below the contracted amounts The upgrade of the Lautoka Forestry Office was split into two contracts of less than the $50,000 The scopes of work contracts were identical and vague The contracts did not contain any retention retention or clause bonds for most Instead, for    Logging License Database Department of Forests does not have a consolidated information database of the types issued and details of licenses licensee for all Divisions.
In addition to 2014, verification of the records at Divisional logging Forestry Office Southern in Nausori, noted the following anomalies: license  Only the current licenses are in their the old data are database while maintained in another computer.
 timber statement, From review of audit noted that some trees were cut below minimum cutting limit of 35 cm     The Planning and Monitoring Unit should consider referring refurbishment contract a the Solicitor to template General for vetting, which can then be used as the basis for drawing up similar contracts.

 Contracts should contract be endorsed by the Permanent Secretary.
amount the If procurement exceeds the threshold $50,000 for Permanent Secretary, the work should be tendered for approval by the Government Tenders Board.

revenue database The Ministry to establish a to centralized consolidate and capture data on all licenses issued in all Divisions The collection centers of the Ministry should be with strengthened adequate resources and the level of competent right for engaged personnel proper revenue management.
Ministry of Fisheries and Forests Section 30: Page 14 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ____________________________ Issues Recommendations Current Status Ministry’s Proposed Action in diameter  Some of the receipt could not be located while some of receipts have not been entered into the Timber Revenue System  The Vunimaqo Station and the Nausori Central Divisional Office did not maintain a cash book  Right to remove license documents could not be located by the divisional office  VEP and VAT portion not demarcated in the Cash Analysis Sheet Forests Removal Licence was the Ministry’s highest revenue earner in 2013 and the failure to maintain a reliable database and centralising of data may result in difficulty to detect expired licence holders and illegal logging resulting in loss of potential state revenue.
Ministry of Fisheries and Forests Section 30: Page 15 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ____________________________ Appendix 30.1: Physical Inspection on Colo-i-Suva Quarters Ministry of Fisheries and Forests Section 30: Page 16 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ____________________________ Ministry of Fisheries and Forests Section 30: Page 17 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ____________________________ Appendix 30.2: 2014 Anomalies in the Trading and Manufacturing Account – A review of Trading and Manufacturing accounts and related records for 2014 revealed anomalies that are discussed below:  The Ministry did not maintain adequate accounting records to provide sufficient and appropriate audit evidence to substantiate the balances of the following Balance Sheet items.
As a result, audit was not able to ascertain the correctness of these amounts.

Refer to the Table below for details.

TMA Balance Sheet Items Accounts receivable Deposits & Deductions TMA Accumulate Surplus TMA Surplus Amount ($) 5,745.00 5,197.00 202,067 (51,529.00)  There was a variance of $19,079.30 between the FMIS general ledger and TMA bank reconciliation statement balance.

Accordingly, the accuracy and completeness of the TMA cash at bank balance could not be ascertained.
General Ledger Balance ($) 65,947.02 Bank Reconciliation Balance ($) Variance ($) 46,867.72 19,079.30  The TMA bank reconciliation for the month of December 2014 included prior years’ outstanding lodgements of $13,701.47.

These longstanding lodgements not credited were from as far back as 2009 but still have not been cleared to date and the correctness of the balance could not be substantiated due to lack of supporting documents.
Date Particulars 14/8/2009 7/9/2009 27/11/2009 10/12/2009 5/2/2010 5/5/2010 2/7/2010 23/7/10 4/8/2010 20/9/2010 1/12/2010 Not Stated 18/7/2011 8/12/2011 28/11/2011 Total Nasinu - CFA Nasinu Nasinu Nasinu - bank error - CFA Lodged into CFA Lodged into CFA RR 46104/110 RR 837224/3573 RR 46466/168 RR 838572/574 RR 595194 RR 398265/269 RR 199032 RR 199034 RR 470613/614 Amount ($) 225.83 1,071.75 1,044.65 937.70 50.00 917.15 2,807.60 108.00 889.60 90.00 10.00 278.39 4802.00 120.00 348.80 13,701.47 Ministry of Fisheries and Forests Section 30: Page 18 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ____________________________ Appendix 30.3: services Examples – VAT not accounted on supplies of goods and Date Cheque No.
Details Charged to SEG 8 ($) Charged to SEG 13 ($) Total ($) 20/05/14 68918 30/05/14 69319 20/05/14 68904 20/05/14 68917 20/05/14 68906 20/05/14 71446 15/08/14 71437 for Dreketi for repairing for repairing 50% payment forestry quarters (Block 2) First payment Forestry Station 50% payment forestry quarters (Block 7) 50% payment forestry quarters (Block 3) 50% payment forestry quarters (Block 6) Final payment forestry quarters (Block 2) Second payment for repairing Forestry garage for repairing for repairing for repairing 25,000 24,825 24,750 24,750 23,450 12,500 12,500 --- --- --- --- --- --- --- 25,000 24,825 24,750 24,750 23,450 12,500 12,500 Ministry of Fisheries and Forests Section 30: Page 19 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015_____________________________ Section 31 Ministry of Lands and Mineral Resources Role and Responsibilities The Ministry of Lands and Mineral Resources is made up of two Departments, namely the Department of Lands and the Department of Mineral Resources.
The Department of Lands is responsible for the administration, development and management of all state land property.

Activities include Land Valuation, Mapping, Development and Maintenance of State Land and Geographic Information System.
The Department of Mineral Resources undertake studies in relation to geological hazards, mineral prospects and groundwater development and manage the development of the Mining and Quarrying Sector with a mandate under the Mining, Petroleum (Exploration and Exploitation), Quarries, Explosive and Continental Shelf Acts.
Table of Contents PART A: FINANCIAL STATEMENTS ..................................................................................................................... 1 31.1 Audit Opinion ............................................................................................................................................. 1 31.2 Statement of Receipts and Expenditure..................................................................................................... 1 31.3 Appropriation Statement ............................................................................................................................ 2 31.4 Statement of Losses .................................................................................................................................. 3 PART B: AUDIT FINDINGS ............................................................................................................................. 3 31.5 Anomalies in the Receipting and Recording of Revenue ........................................................................... 3 31.6 Administration of Accountable Advance..................................................................................................... 6 31.7 Anomalies in Main Trust Fund Accounts.................................................................................................... 7 31.8 Other Prior Year Recurring Issues ........................................................................................................... 11 Details of Incorrect Postings to the CLLS......................................................................... 16 Appendix 31.1: Dates of Certification of Reconciliation Statements ......................................................... 19 Appendix 31.2: Examples of incorrect payments of salaries in 2014 ........................................................ 19 Appendix 31.3: PART A: FINANCIAL STATEMENTS 31.1 Audit Opinion The audit of the 2014 accounts of the Ministry of Lands and Mineral Resources resulted in the issue of an unqualified audit report.
31.2 Statement of Receipts and Expenditure The Ministry collected revenue totalling $20.1 million and incurred a total expenditure of $24.3 million in 2014.

Details are shown in Table 31.1 below.
Ministry of Lands and Mineral Resources Section 31: Page 1 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015_____________________________ Table 31.1: Statement of receipts and expenditure for 2014 Description 2014 ($) 2013 ($) Land and Property Rent Rental for Quarters Fees Charges, Fine & Penalties Hire of Plants & Vehicles License Sale of Publications Mining Fees Chemical Stamp Duty Commission Miscellaneous TOTAL REVENUE Established Staff Government Wage Earners Travel & Communication Maintenance & Operations Purchase of Goods & Services Operating Grants & Transfers Special Expenditures Total Operating Expenditure Capital Construction Capital Purchases Capital Grants and Transfers Total Capital Expenditure Value Added Tax Total Expenditure Total revenue increased by $4.9 million or 32% in 2014 compared to the 2013 due to the vigorous measures implemented by the Ministry to collect revenue including arrears of revenue due to Government.
Total expenditure increased by $3.1 million or 15% from the previous year and was largely due to increase in capital expenditure by 174% which was the result of the increased number of projects executed during the year.

31.3 Appropriation Statement The Ministry incurred expenditure totalling $24.3 million in 2014 against a revised budget of $32.7 million resulting in a savings of $8.4 million.

Details of expenditure against the budget estimate are provided in Table 31.2.
Table 31.2: Appropriation statement for 2014 SEG Item 1 2 Established Staff Government Wage Earners Budget Estimate ($) 8,866,694 915,289 Changes ($) (60,000) --- Revised Estimate ($) 8,806,694 915,289 Actual Expenditure ($) 8,418,047 741,926 Lapsed Appropriation ($) 388,647 173,363 Ministry of Lands and Mineral Resources Section 31: Page 2 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015_____________________________ SEG Item Travel & Communication Maintenance & Operations Purchase of Goods & Services Operating Grants & Transfers Special Expenditures Total Operating Expenditure Capital Expenditure Construction Purchases Grants and Transfers Total Capital Expenditure Value Added Tax TOTAL EXPENDITURE Budget Estimate ($) 659,079 6,679,405 1,114,650 32,100 148,955 18,416,172 3,935,000 2,880,000 5,150,000 11,965,000 2,312,600 32,693,772 Changes ($) 69,000 (27,604) (65,840) --- - (84,444) 1,547,002 43,444 (1,506,002) 84,444 --- --- Revised Estimate ($) 728,079 6,651,801 1,048,810 32,100 148,955 18,331,728 5,482,002 2,923,444 3,643,998 12,049,444 2,312,600 32,693,772 Actual Expenditure ($) 709,995 5,542,051 1,000,860 32,100 131,748 16,576,727 4,583,570 352,268 971,376 5,907,214 1,843,361 24,327,302 Lapsed Appropriation ($) 18,084 1,109,750 47,950 --- 17,207 1,755,001 898,432 2,571,176 2,672,622 6,142,230 469,239 8,366,470 31.4 Statement of Losses There was a short lodgement of revenue of $300 in March 2014 and was later made good in August 2014 however the case has been
 investigated by FICAC and taken up to Court.
The decision on the case is still pending with the Court.

PART B: AUDIT FINDINGS 31.5 Anomalies in the Receipting and Recording of Revenue The Accounting Head is responsible for the effective design and operation of internal controls of the agency.1 For the past five years, the Department of Lands collected revenue from land rents totalling more than $61 million as tabulated below.
Table 31.3: Land Rents (Crown Lease) Collected Year 2014 2013 2012 2011 2010 Land Rent from Crown Lease ($) 13,851,037.93 12,816,448.44 10,586,965.78 12,320,796.86 11,459,682.72 The audit of Crown Land Lease System (CLLS) and its related records revealed the following receipting processes and anomalies, which procedures/system.
internal controls over indicated weak the 1 Ministry of Lands and Mineral Resources Finance Manual 2013 Section 17.1.1 Ministry of Lands and Mineral Resources Section 31: Page 3 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015_____________________________ Incorrect posting of reference numbers The procedures followed in the receipting of land lease payments include the following:  An official receipt is manually issued to lessees when lease payments are received by the cashier.
 Once receipted, the amount is then entered into the CLLS to update the lessee’s account.

The manual receipt numbers are used as the reference numbers in the CLLS.

 The receipts are then sent to the Accounts Section to be entered into the FMIS general ledger through the Accounts Receivable module.

 The manual receipt numbers used by the Department in 2014 had six digits only.

The audit noted that errors were made when receipt numbers were used as reference to update the CLLS.
All receipts used in 2014 had six (6) digits; however there were entries in the CLLS that either had less or more than six (6) digits as references.

Therefore, the audit was not able to trace the entries in the CLLS to the respective manual receipts to ascertain the correctness of the transactions posted in the CLLS.

Refer to Appendix 31.1 for details.

Delays in updating lessees’ accounts in the CLLS The updating of the lessees’ accounts in the CLLS was often delayed.
Refer to Table 31.4 below for examples: Table 31.4: Examples of Delays in Updating of Lessees’ Account Receipt No.

539912 541360 545928 545933 545934 545935 545940 545936 551778 Amount ($) 65.00 50.00 305.00 67.00 471.50 102.00 390.55 50.00 1,054.78 Date of Receipt 02/01/14 03/02/14 30/05/14 30/05/14 30/05/14 30/05/14 30/05/14 30/05/14 28/10/14 Account No.

20864 47040 30426 30877 30525 30140 30670 31954 12320 Entry Date in CLLS Remarks 01/01/14 Posting to CCLS was made before receipt was issued.
06/02/14 Delay of 3 days.

04/06/14 Delay of 5 days.

04/06/14 Delay of 5 days.

04/06/14 Delay of 5 days.

04/06/14 Delay of 5 days.

04/06/14 Delay of 5 days.

04/06/14 Delay of 5 days.

27/10/14 Posting to CCLS was made before receipt was issued.

There is potential risk of lessees’ account not being updated if postings to the CLLS are not carried out daily.
Lessees’ Statement of Account not updated to reflect payments made The audit noted instances where the payments have been receipted but were not updated in the respective lessees’ account in the CLLS.

Refer to Table 31.5 for examples: Table 31.5: Examples of Lessees’ Statement of Account not updated Receipt No.

545080 Amount ($) 50.00 Date of Receipt 29/04/14 Account No.
45937 Ministry of Lands and Mineral Resources Section 31: Page 4 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015_____________________________ Receipt No.

545760 546397 546400 546300 545350 550449 Amount ($) 1,150.00 180.00 1,000.00 234.90 100.00 40.00 Date of Receipt 29/05/14 29/05/14 29/05/14 30/05/14 30/04/14 28/10/14 Account No.

42860 42646 24280 40648 15115 46366 In addition, there were no reconciliations performed between the manual receipts and balances entered into the CLLS.
Accounting for revenue received through Housing Authority of Fiji The Housing Authority, on behalf of the Department of Lands, receipts crown land rental which are then paid to the Department at the end of each month.

The audit noted that the CLLS was not fully updated even though land rents were receipted.

Furthermore, considerable delays were noted in the postings to the CLLS to update the lessees’ account.

Refer to Table 31.6 for details.


Table 31.6: Revenue Received through Housing Authority not fully updated in the CLLS Month Revenue Receipt No.

Date Amount January 542789 26/02/14 ($) 2,070.52 Amount Batched to CLLS ($) 1,707.13 Remarks Amount not Batched to CLLS ($) 363.39  Payment was receipted in February.

February Information not provided March 545371 01/05/14 2,063.68 1,754.04  Entries to CLLS posted in April, May and August.

 RR No.

544673 not provided to audit.


 Amount receipted could not be verified.

 Amount batched to CLLS was $1,824.53 compared to listing of $2,053.43.

 Difference of $228.90 (amount not batched to CLLS).

309.64  Payment was receipted in May.

 Entries to CLLS posted in August and December.

April 546204 26/05/14 1,999.54 1,586.29 413.25  Payment was receipted in May.

May 547716 30/06/14 1,996.13 1,633.37 362.76  Payment was receipted on June.
September 551536 14/10/14 1,961.86 1,840.70 121.16  Payment was receipted on September.

 Entries to CLLS done in May, August and September.

 Entries August.

to CLLS posted in July and October 552206 19/11/14 1,843.04 1,681.80 November 553237 22/12/14 1,811.26 1,680.43  Entries to CLLS posted in December.

161.24  Payment was receipted in October.

 Entries to CLLS posted in December.

130.83  Payment was receipted in November.

 Entries to CLLS posted in December.


Ministry of Lands and Mineral Resources Section 31: Page 5 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015_____________________________ When accounts are not updated, arrears of revenue will be inflated and reports produced by the CLLS will be incomplete and/or inaccurate.
The absence of an adequate reconciliation process may result in the Department failing to detect, on a timely basis, possible irregularities in the receipting and accounting of lease payments in the CLLS.

Recommendations  Processes and procedures on receipting and recording of revenue should be reviewed to enhance internal controls and safeguard revenue received through land rents.

 Manual data should be reconciled to the CLLS daily to ensure that details of receipts posted to the system are correct.
In addition, payments received through the Housing Authority of Fiji should be reconciled against the CLLS accounts.

 Lessees’ accounts should be immediately updated once payments are received.

Management Comments The Department’s IT team is currently working on the issue as oracle system does not allow batching of Crown Land Receipt (CLR) that has more or less than six digits.

There is a delay in batching as the Fiji Sugar Corporation Schedule has two to three Hundred accounts.
Also the ITC system is down at times and this causes the delay in the batching.

The department has put in place internal controls to verify all the CLR with the oracle system to check if all the receipts are batched into the system.

All the CLR’s in the table were batched into the respective accounts.

The department has put internal controls to ensure that all CLR Receipt are batched into the system.
The Department is now obtaining duplicate copies of the CLR and is reconciling with the oracle system to check that all the receipts are batched into the system.

This is due to the fact that Housing Authority provide the referrals late which leads to the delay in the updating the system.

Currently we are working to harmonise our systems with Housing Authority in order to be efficient and effective in our services.
As a way forward, a project officer will be appointed to monitor and oversee the processes highlighted.
31.6 Administration of Accountable Advance A ledger shall be maintained for advances, petty cash, accounts payable, revolving fund accounts expenditure and commitment accounts.2 Any transaction raised affecting these accounts shall be entered in the appropriate ledger.3 Within 3 days of receiving the monthly general ledger reports from the Ministry of Finance, the accounts supervisor shall reconcile the ledger balances to the general ledger reports and prepare a ledger reconciliation statement.4 For the year ended 31 December 2014, the balance of outstanding accountable advances was $39,202, an increase of $19,454 or 99% compared to 2013.
Refer to Table 31.7 below for details.
2 Ministry of Lands & Mineral Resource Finance Manual 2013 Section 16.3.1 3 Ministry of Lands & Mineral Resource Finance Manual 2013 Section 16.3.2 4 Ministry of Lands & Mineral Resource Finance Manual 2013 Section 16.3.3 Ministry of Lands and Mineral Resources Section 31: Page 6 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015_____________________________ Table 31.7: Increase in Accountable Advance Account Balance in 2014 Account Number Description 1-33301-79101-570301 Advances 2014 ($) 39,202.39 2013 ($) 19,748.02 The Department of Lands did not provide for audit an Accountable Advance Register and a listing of employees that have yet to retire Accountable Advances at year end.
This provided limitation to adequately vouch and confirm retirement of advances from the journal voucher records.

In addition, the reconciliation statement for December had credit balances which indicated that some accounts were cleared above the amounts advanced.

The audit was not able to ascertain the accuracy and the completeness of the amount reflected as Accountable Advance in the FMIS general ledger.
Recommendations  Records pertaining to the administration and management of accountable advances should be adequately maintained, updated and provided for audit.

 Monitoring of accountable advances should be effectively performed to ensure that employees settle advances on time and that collections on outstanding advances are initiated in a timely manner.

 Reconciliation statements should be prepared on a monthly basis and the statements should be properly checked and signed off.
Management Comments No comments provided by the Ministry.

31.7 Anomalies in Main Trust Fund Accounts Each month, the trust account must be balanced and reconciled with the trust bank account.

The names and balances of each account must be listed and the reconciliation shall be signed by the responsible officer.
Un-reconciled items must be investigated and resolved promptly.5 Within 5 days after the end of each month, the Clerical Officer shall prepare a trust reconciliation to reconcile trust account balances to the ledger total and the trust bank account.6 The Accounts Officer shall certify and date the reconciliation statement after ensuring that all balances in the statement are verified to supporting documents.7 The Senior Account Officer must verify balances in the bank reconciliation to the cashbook, bank statements, un-presented cheque list and the previous month’s bank reconciliation before certifying it.8 A review of the Main Trust Fund Accounts and related records revealed the following anomalies, most of which were recurring issues from previous years: 5 Finance Instruction 2010 s58(3) 6 Ministry of Lands & Mineral Resources Finance Manual 2013 Section 15.4.1 7 Ministry of Lands & Mineral Resources Finance Manual 2013 Section 15.4.3 8 Ministry of Lands & Mineral Resources Finance Manual 2013 Section 7.4.11 Ministry of Lands and Mineral Resources Section 31: Page 7 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015_____________________________ Bank Reconciliation Statement  The Department of Lands did not provide certified copies of the January and February reconciliation statements for audit.
In addition, the Department of Minerals Resources did not maintain any certified copies of the Trust Fund Account reconciliation statements.

 Monthly bank reconciliations for the Department of Land were not performed on time.

In addition, the monthly bank reconciliation for July to December was not carried out.
Variances in Receipts and Payments There were un-reconciled variances between the Ministry’s records and the FMIS general ledger, which the Ministry could not explain or provide supporting documents to substantiate the variances.
Refer to Table 31.8 for details: Table 31.8: Variance for Receipts and Payments Department Trust Fund Account Lands Minerals Receipts Payments Receipts Payments Audit Recalculation ($) 3,090,850 1,703,395 1,816,241 958,457 Department (FMIS) ($) 3,090,751 1,700,590 1,852,963 980,231 Variance ($) 99 2,805 (36,722) (21,774) Trust Fund Accounts with Debit Balances A number of accounts had debit closing balances for which the Department did not provide any explanations.
This indicated that the Department may have incorrectly posted some transactions to the accounts.
Refer to Table 31.9 for details: Table 31.9: Details of Trust Fund Accounts with Debit Balances Allocation 9-33101-79001-895051 (1050038) 9-33101-79001-895051 (1050074) 9-33101-79001-895051 (1050083) 9-33101-79001-895051 (1050115) 9-33101-79001-895051 (1050154) 9-33101-79001-895051 (1050184) 9-33101-79001-895051 (1050218) 9-33101-79001-895051 (1050227) 9-33101-79001-895051 (1050236) 9-33101-79001-895051 (1050246) 9-33101-79001-895051 9-33101-79001-895051 9-33101-79001-895051 Total Amount ($) 50,000.00 184.60 30,632.04 3,893.65 13.17 54.00 514.41 36.00 72,186.00 50.58 1,135.00 213,882.38 2,400.00 374,981.83 Trust Fund Payments Anomalies - Department of Lands There were payments made from the Trust Fund account that were not captured in the Cheque Register (AP470 report).
The Department explained the payments were replacement cheques which were not to Ministry of Lands and Mineral Resources Section 31: Page 8 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015_____________________________ be posted in the FMIS general ledger.

However, documents requested to confirm the initial payments were not provided for audit verification.

Refer to Table 31.10 for details: Table 31.10: Examples of Issued Cheques not in Cheque Register (AP470 Report) Cheque No.
667 723 786 811 Amount ($) 950.00 721.56 212.75 212.75 In addition, a payment of $7,994 made out to Department of Fisheries through Cheque No.

785 was cancelled on the manual cashbook.

However, this was not cancelled in the cheque register (AP470 report).

Moreover, Cheque No.786 was not captured in the Cheque Register.

However, the manual cashbook revealed that two payments were made on this cheque.

Refer to Table 31.11 for details.


Table 31.11: Payments made from Cheque No.786 Payee Department of Fisheries PSLMR Amount ($) 7,994.00 212.75 Trust Receipts anomalies - Department of Mineral Resources A total of $116,207 was directly credited to the Trust Fund Bank Statement; however, these amounts were not receipted by the Department.
Out of the total amount directly deposited, $8,844 were confirmed to be operating revenue received through the Trust Fund account before being paid into the Consolidated Fund Account.

This was done to cater for the direct payments which are operating revenue, made to the Department’s bank account for Trust Fund.

According to the Department, direct credits pertaining to operating revenue are not receipted and the same amounts are being paid out from the Trust Fund accounts to the Consolidated Fund Account.
However, the Department does not maintain a record of all payments received through the Trust Fund bank account so as to reconcile with the amounts paid to the Consolidated Fund Account.

The issues discussed above could also be the contributing factors to variances noted in the Trust Fund Accounts.

Recommendations  The Ministry should comply with the procedures relating to the preparation of reconciliation statements as stated in the Finance Manual.
 Reconciliation of all underline accounts should be performed monthly, properly checked and certified on time.

 Variances noted between the cashbook, reconciliation statements and the FMIS general ledger should be investigated and rectified in a timely manner.
Ministry of Lands and Mineral Resources Section 31: Page 9 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015_____________________________  The Ministry should investigate why some issued cheques were not captured in the Cheque Register and investigate and rectify the variances noted between its manual Cashbook and the Cheque Register.
 The Ministry should liaise with the Ministry of Finance on appropriate ways to account for direct deposits of operating revenue made through bank transfers and reconcile operating revenues receipted through trust to payments made to operating revenue.

Management Comments No comments provided by the Ministry.
Ministry of Lands and Mineral Resources Section 31: Page 10 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015_____________________________ 31.8 Other Prior Year Recurring Issues During the 2014 audit, we followed up on the status of the matters reported in the previous year.

While some issues have been rectified, a number of issues have yet to be resolved.
Refer to the Table 31.12 below for details Table 31.12: Prior Year Issues Issues Variances in Drawings Accounts There were un-reconciled variances between the balances in the drawings account reconciliation statement and the FMIS general ledger.
Variance in the Drawings Reconciliation – 2014: Department Lands Mineral Resources FMIS General Ledger ($) 488,759.10 110,867.10 Un-presented Cheque List ($) Difference ($) 572,239.90 142,858.20 83,480.80 (31,991.10) The reasons for the difference had been identified in the drawings reconciliation statement; however, these were not adjusted in the FMIS general ledger.

These included bank fees, errors in bank statement and cheque register.
Of the total un-presented cheques of $715,098 for 2014, $61,152 was for stale cheques.

This indicated that the un-presented cheque listings were not regularly reviewed to determine whether adjustments or replacement cheques were required to be issued.
Anomalies in Underline Accounts Reconciliation The audit was not able to ascertain the accuracy of the balances reflected as Operating Trust Funds due to the following: Recommendations Current Status Management’s Proposed Action – No Open progress No comments provided by the Ministry.

   The Ministry should investigate and rectify the variances noted reconciliation between the FMIS statements and general ledger.

the The Ministry should ensure that monthly reconciliations are performed and accurately.
properly The Ministry should improve management of un-presented cheques by complying with Section 7 of the Finance Manual  Monthly reconciliation of accounts should be performed the timely basis and on a – No Open progress No comments provided by the Ministry.
Ministry of Lands and Mineral Resources Section 31: Page 11 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015_____________________________ Issues Recommendations Current Status Management’s Proposed Action   The Department of Mineral Resources did not maintain certified copies of the underline accounts reconciliations statements.

Statements that have not been endorsed or certified raise concerns on the accuracy and timeliness of the reconciliations.
The preparation of monthly reconciliation statements for the Operating Trust Fund and Revolving Fund Accounts were not performed on time as detailed on Appendix 31.2, which is a breach of the Finance Instructions and Manual.
Delay in undertaking reconciliation of accounts can allow material misstatements to remain undetected for a period of time thus contributing to un-reconciled variances at year end  The Department of Lands recorded $1.4 million as operating trust fund as at 31 December 2014, an increase from the $1.2 million in 2013.

The Ministry was not able to provide the details of the deductions held under the Operating Trust Fund account.

statements should be properly checked and signed off.
 The balances in the books of accounts should be accurate and adequately supported.

 Account No.

1-33301-79101- 863201 should be reviewed and necessary, adjustments made to correct the account.

where An additional issue identified in the 2014 audit:  A balance of $1.09 million was recorded as VAT from Provision for Goods & Services (Account No: 1-33301-79101-863201) under the Operating Trust Fund account.
The balance increased over the years since the creation of the account in 2009 to record VAT on revenue collected and on payments made.

The Department of Lands may have been incorrectly posting entries to this account when payments were made to FRCA resulting in the outstanding balance increasing every year as detailed below.
2014 ($) 1,099,709.82 2013 ($) 2012 ($) 2011 ($) 923,500.79 717,548.26 623,908.65 2010 ($) 367,639.85 2009 ($) 157,836.34 Recovery of Arrears of Revenue Recoveries of arrears of revenue have been slow although the Ministry has implemented measures improve the collection of revenues.

There is potential risk of default in payments if arrears remained uncollected for longer periods.

In addition, the long outstanding balances may be impaired.
Arrears of revenue have been increasing over the years, from $17.97 million in 2010 to $25.25 million in 2014.

The major component of the arrears relates to land rents for Crown Lease totalling $24.7 million or 98%.

In addition, 25% of the Crown Lease arrears have been outstanding for over 5 years and 30% Open – Slow progress No comments provided by the Ministry.
It is recommended that the Ministry take appropriate steps to vigorously follow-up for the recovery of long outstanding debts in accordance with the debt recovery procedures prescribed in the Ministry’s Finance Manual.

Ministry of Lands and Mineral Resources Section 31: Page 12 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015_____________________________ Issues between 2 to 5 years.

Refer below for details.


Arrears of Revenue Valuers Registration Arrears Surveyor Registration Arrears Taxi Base Arrears / Narere Barracks Arrears Premium Arrears Crown Lease Arrears Total Amount ($) 33,468 26,814 184,973 268,025 24,736,888 $25,250,168 Recommendations Current Status Management’s Proposed Action The Ministry should conduct annual review on the effectiveness of the Taskforce Unit that was established to enforce the collection of land rents.
Salary Reconciliation not Prepared on Time Salary and wages reconciliations were not performed fortnightly prior to each pay date nor were the statements sent to the Ministry of Finance as required.

During the 2014 audit, we noted that although some salary and wages reconciliations statements were prepared, these were performed and statements prepared very late which would have made it difficult for the Department to detect and act upon any payroll discrepancy in a timely manner.
In addition, the 2014 salary reconciliations for Pays 1 to 10 and 18 to 26 and wages reconciliation for Pays 1 to 8, 10 and 23 to 52 were not produced for audit verification.

The Department should ensure that regular payroll (salaries/wages) reconciliations are performed on a fortnightly/weekly basis and that the reconciliation are thoroughly checked by the Principle Accounts Officer to minimise or avoid incorrect payments of salaries and wages.
statements - No Open progress since reported in 2013. on the Your and findings recommendation is noted.

One of the Ministry’s deliverable is to improve more Key Performance Indicators and timeline to procedures relating to the preparation of reconciliation statement as stated in the Finance Manual.

regards in Ministry of Lands and Mineral Resources Section 31: Page 13 to staff In 2014 due turnover, the Department had gone through several changes of hands when it reconciliation.
comes Recons were not properly handed over resulting to the issues highlighted.

to The Reconciliations are now up to date.

REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015_____________________________ Issues Recommendations Current Status Incorrect Payment of Salary Numerous instances of incorrect payments of salaries in 2013 where the Department failed to resolve on a timely basis.
The Department of Lands should: The incorrect payments of salaries that were not detected during the year resulted from ineffectiveness of the salary reconciliation process.

It also indicated that supervisory controls have not been effectively implemented to ensure that changes in payroll are regularly monitored.
Anomalies in the Procurement and Payment Processes Breaches of procurement and payments procedures and other internal controls resulting in non- compliance with finance instructions and procurement regulations of Government.

These breaches include:  Not obtaining competitive quotations for purchases of goods and services.

 Purchase orders raised and approved after invoices were received.

 Processing of payments without adequate supporting documents.

 Misplacing of payment vouchers.


Additional breach identified in the 2014 audit include mis-posting of expenditures.
- Open No since progress reported in 2013. instances Other incorrect of of payments have salaries been identified during the 2014 audit as detailed Appendix on 31.3. to in ensure payroll between and implement an effective and communication efficient the process Payroll Personnel that Sections changes are processed on time to minimise or avoid incorrect payments of salaries; take appropriate action on the incorrect payments of salaries as highlighted in the report.
reconciliations should salary be performed on a fortnightly basis and thoroughly reviewed by the Principal Accounts Officer.

    Open – some improvements since reported in previous years The Ministry should ensure that it complies with finance instructions and procurement regulations of government.

Any deviation should be properly justified, and supported with documentary evidence.
authorized  Officers that have been given authority to approve purchases should be held accountable for their decisions.

The Ministry needs to  Management’s Proposed Action Due to improper handing Salary the over, reconciliation file copies for the above Pays could not be located despite the fact that it was dispatched to Ministry of Finance hence report were not produced for verification.
reconciliation As mentioned above, changed of hands in the wages for year 2014 had resulted in the delay of submission and hence pays mentioned be above produced audit verification despite the fact that all were dispatched to Ministry of Finance.
could not for As such in order to Ministry of Lands and Mineral Resources Section 31: Page 14 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015_____________________________ Issues Recommendations Current Status with encourage increased ownership and accountability for purchasing decisions and non-compliance the procurement policies should be to reported Senior for necessary Management actions.
The internal control procedures the Accounts Section, in especially supervisory the checks should be strengthened to minimize or avoid such discrepancies.

 Management’s Proposed Action strengthen timeliness the and reconciliation process, the Ministry will ensure to comply with the procedures as well as follow up or implement actions to avoid investigations or further repeated issues.
in The Ministry would be the capturing the the recommendations relevant officer’s IWP and the APA will be revised accordingly to reflect the position descriptions of an officers table work.

Ministry of Lands and Mineral Resources Section 31: Page 15 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015_____________________________ Appendix 31.1: Details of Incorrect Postings to the CLLS Reference No.
Journal Name RECEIPT RECEIPT RECEIPT RECEIPT V.A.T.

RECEIPT V.A.T.

RECEIPT V.A.T.

RECEIPT RECEIPT V.A.T.

RECEIPT V.A.T.

RECEIPT RECEIPT V.A.T.

RECEIPT V.A.T.

RECEIPT V.A.T.

RECEIPT V.A.T.

RECEIPT V.A.T.

RECEIPT RECEIPT V.A.T.


RECEIPT RECEIPT RECEIPT V.A.T.

RECEIPT RECEIPT RECEIPT V.A.T.

RECEIPT RECEIPT V.A.T.

RECEIPT RECEIPT V.A.T.

RECEIPT RECEIPT RECEIPT V.A.T.


RECEIPT Amount ($) Reference No.

Journal Name 5340017 RECEIPT 5340018 RECEIPT 5340018 V.A.T.

5340019 RECEIPT 5340019 V.A.T.

5357530 RECEIPT 5357530 V.A.T.


5418813 RECEIPT 5420532 RECEIPT 5421776 RECEIPT 5426200 RECEIPT 5426200 RECEIPT 5426200 RECEIPT 5426210 RECEIPT 5426210 RECEIPT 5426210 RECEIPT 5426210 RECEIPT 5427890 RECEIPT 5429987 RECEIPT 5429987 V.A.T.

5433060 RECEIPT 5433060 RECEIPT 5433060 V.A.T.

5433060 RECEIPT 5433060 RECEIPT 5433060 RECEIPT 5433060 V.A.T.

5433060 RECEIPT 5433060 RECEIPT 5433060 RECEIPT 5433060 RECEIPT 5433060 RECEIPT 5433060 V.A.T.
5436173 RECEIPT 5437483 RECEIPT 5442613 RECEIPT 5446730 RECEIPT 5446730 RECEIPT 5450059 RECEIPT 5450059 V.A.T.

5454600 RECEIPT 5454600 RECEIPT 5454600 V.A.T.
5454600 RECEIPT 5454600 RECEIPT 5454600 RECEIPT 5454600 RECEIPT Amount ($) Ministry of Lands and Mineral Resources Section 31: Page 16 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015_____________________________ Reference No.
Journal Name RECEIPT V.A.T.

RECEIPT RECEIPT RECEIPT V.A.T.

RECEIPT V.A.T.

RECEIPT RECEIPT V.A.T.

RECEIPT RECEIPT RECEIPT V.A.T.

RECEIPT RECEIPT V.A.T.

RECEIPT RECEIPT V.A.T.

RECEIPT RECEIPT V.A.T.


RECEIPT V.A.T.

RECEIPT RECEIPT V.A.T.

RECEIPT V.A.T.

RECEIPT RECEIPT V.A.T.

RECEIPT V.A.T.

RECEIPT V.A.T.

RECEIPT V.A.T.

RECEIPT V.A.T.

RECEIPT V.A.T.

RECEIPT V.A.T.

RECEIPT V.A.T.

RECEIPT V.A.T.


Amount ($) Reference No.
Journal Name 5454600 RECEIPT 5454600 RECEIPT 5454600 RECEIPT 5454600 RECEIPT 5454600 RECEIPT 5455596 RECEIPT 5455596 V.A.T.

5457933 RECEIPT 5462040 RECEIPT 5466023 RECEIPT 5466830 RECEIPT 5466830 V.A.T.

5466830 RECEIPT 5466830 V.A.T.

5466830 RECEIPT 5466830 RECEIPT 5466830 RECEIPT 5473413 RECEIPT 5473413 V.A.T.

5473741 RECEIPT 5473741 V.A.T.

5473741 RECEIPT 5473741 V.A.T.

5476800 RECEIPT 5476800 RECEIPT 5476800 RECEIPT 5476800 V.A.T.
5476800 RECEIPT 5476800 RECEIPT 5476800 RECEIPT 5477160 RECEIPT 5477160 RECEIPT 5477160 RECEIPT 5477160 RECEIPT 5478071 RECEIPT 5478071 V.A.T.

5478453 RECEIPT 5479740 RECEIPT 5479740 RECEIPT 5480636 RECEIPT 5480636 V.A.T.

5482270 RECEIPT 5482270 V.A.T.

5485088 RECEIPT 5486625 RECEIPT 5486625 V.A.T.

5488240 RECEIPT 5488240 V.A.T.
5491043 RECEIPT 5491503 RECEIPT Amount ($) Ministry of Lands and Mineral Resources Section 31: Page 17 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015_____________________________ Reference No.
Journal Name RECEIPT V.A.T.

RECEIPT RECEIPT V.A.T.

RECEIPT V.A.T.

RECEIPT V.A.T.

RECEIPT V.A.T.

RECEIPT V.A.T.

RECEIPT V.A.T.

RECEIPT V.A.T.

RECEIPT RECEIPT V.A.T.

RECEIPT V.A.T.

RECEIPT V.A.T.

RECEIPT V.A.T.


RECEIPT RECEIPT RECEIPT V.A.T.

RECEIPT V.A.T.

RECEIPT V.A.T.

RECEIPT RECEIPT V.A.T.

RECEIPT RECEIPT RECEIPT V.A.T.

RECEIPT RECEIPT RECEIPT RECEIPT V.A.T.

RECEIPT V.A.T.
RECEIPT V.A.T.

Amount ($) Reference No.

Journal Name 5491720 RECEIPT 5491720 V.A.T.

5496337 RECEIPT 5496536 RECEIPT 5497030 RECEIPT 5498062 RECEIPT 5498062 V.A.T.
5498443 RECEIPT 5501300 RECEIPT 5501300 RECEIPT 5501300 V.A.T.

5501300 RECEIPT 5501300 RECEIPT 5501300 RECEIPT 5501300 RECEIPT 5501300 V.A.T.

5501300 RECEIPT 5501300 RECEIPT 5501300 RECEIPT 5501300 RECEIPT 5501301 RECEIPT 5507987 RECEIPT 5515599 RECEIPT 5517730 RECEIPT 5517730 V.A.T.

5849114 RECEIPT 54262100 RECEIPT 54330600 RECEIPT 54330600 RECEIPT 54370460 RECEIPT 54546000 RECEIPT 54768000 RECEIPT 55013000 RECEIPT 55394 RECEIPT 55394 V.A.T.

55561 RECEIPT 55561 V.A.T.


55657 RECEIPT 55676 RECEIPT 57329 RECEIPT 57329 V.A.T.

57329 RECEIPT 57329 V.A.T.

5339916 RECEIPT 5340015 RECEIPT 5340015 V.A.T.
5340016 RECEIPT TOTAL Amount ($) Ministry of Lands and Mineral Resources Section 31: Page 18 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015_____________________________ Appendix 31.2: Dates of Certification of Reconciliation Statements Monthly Reconciliation in 2014 Revolving Fund Account Operating Trust Account January February March April May June July August September October November December 31/03/14 31/05/14 15/04/14 19/04/14 20/05/14 13/10/14 29/10/14 29/10/14 31/10/14 20/11/14 09/03/15 05/05/15 30/03/14 15/05/14 30/05/14 30/05/14 12/08/14 27/11/14 11/12/14 15/12/14 29/12/14 31/12/14 31/12/14 30/04/15 Appendix 31.3: Examples of incorrect payments of salaries in 2014 EDP No.
Amount ($) Remarks 62111 94566 90589 61012 46435 58850 46311 64501 60662 60481 92816 60396 90368 16145 92027 730.13 Underpayment 546.14 Underpayment (264.99) Overpayment 184.52 Underpayment 1,485.11 Underpayment 2,482.11 Underpayment (1,420.50) Overpayment 243.40 Underpayment (49.61) Overpayment 982.56 Underpayment 234.36 Underpayment 23.47 Underpayment 21.53 Underpayment (3,512.75) Overpayment 2,508.70 Underpayment Ministry of Lands and Mineral Resources Section 31: Page 19 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ____________________________ Section 32 Ministry of Industry and Trade Role and Responsibilities The Ministry formulates and implements policies and strategies to facilitate industry growth, investment, trade, co-operative development, micro and small enterprise development, metrology, standards and consumer protection.
These roles and responsibilities are undertaken within the Economic Unit, Trade Unit, Department of National Measurement and Standards, Department of Co-operative Business, Corporate Services Division, Consumer Council of Fiji, Fiji Commerce Commission, Investment Fiji, Film Fiji, Real Estate Agents Licensing Board, National Centre for Small and Micro Enterprise Development, Trade Standards Advisory Council, Trade Commission - Taiwan, Trade Commission - Los Angeles, Trade Commission - Shanghai and Trade Commission - PNG.
The Ministry undertakes these roles and responsibilities with the following objectives: i.

To diversify and expand exports base; ii.

To diversify and expand manufacturing and commercial sector; iii.

To improve investor and business confidence and ease of doing business; iv.

To improve market access of products and services to international markets; v. To improve relations with all the stakeholders; vi.

To improve business regulatory environment; vii.


To ensure compliance with national and international standards; viii.

To enhance consumer protection awareness; and ix.

To improve communities livelihood through Co-operatives, Micro and Small Enterprise Development.

Table of Contents PART A: FINANCIAL STATEMENTS .......................................................................................................................... 1 32.1.
Audit Opinion ................................................................................................................................................. 1 32.2.

Statement of Receipts and Expenditure ........................................................................................................ 1 32.3.

Appropriation Statement................................................................................................................................ 2 32.4.
Statement of Losses ..................................................................................................................................... 3 PART A: FINANCIAL STATEMENTS 32.1.

Audit Opinion The audit of the 2014 accounts of the Ministry of Industry and Trade resulted in the issue of an unqualified audit report.

32.2.

Statement of Receipts and Expenditure The Ministry collected revenue totalling $809,474 and incurred a total expenditure of $16.1 million in 2014.
Ministry of Industry and Trade Section 32: Page 1 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ____________________________ Table 32.1: Statement of Receipts and Expenditure for 2014 Description Fees – Miscellaneous Other Revenue TOTAL REVENUE Established staff Government wage earners Travel and communications Maintenance & operations Purchase of goods and services Operating grants and transfers Special expenditures Total Operating Expenditure Capital Purchases Total Capital Expenditure Value Added Tax TOTAL EXPENDITURE 2014 ($) 790,556 18,918 809,474 2,261,167 244,828 221,831 610,248 158,480 6,253,600 5,043,409 14,793,563 504,997 504,997 820,700 2013 ($) 709,362 2,619 711,981 1,858,934 210,206 212,270 456,644 122,937 5,378,612 2,952,574 11,192,177 --- --- 387,381 16,119,260 11,579,558 Total revenue increased by 14% compared to 2013 which is largely due to an increase in weights & measures fees collected.
Total expenditure increased by $4.5 million or 39% in 2014.

The increase is explained by the following:   Increase in Established Staff by 22% was due to the inclusion of salaries and wages for the Honourable Minister and Assistant Minister and support staff, pay rise approved for civil servants and recruitments to fill vacant positions.

Increase in Operating Grants and Transfer was due to increase in Annual Revised Budget for Investment Fiji by $0.75 million in the year 2014.
 Special Expenditure increased by $2.1 million or 71% due to increase in Budget for National Export Strategy.

In addition, budget was provided for new programs such as Trade Policy Framework, MSG Investment Road Show and Trade Fair, MSG Trade Ministers and Ministers Meetings, Trade and Investment Promotion Mission and Trade Commission’s Office - PNG.

 Capital Purchase of $0.5 million in 2014 relates to the purchase of Water Test Bench.

32.3.
32.3.

Appropriation Statement The Ministry incurred a total expenditure of $16.1 million in 2014 against a budget of $18.3 million resulting in a saving of $2.2 million or 12%.

Details of expenditure against the budget estimate are provided in Table 32.2 below.
Ministry of Industry and Trade Section 32: Page 2 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ____________________________ Table 32.2: Appropriation Statement for 2014 SEG Item Budget Estimate ($) Changes ($) Revised Estimate ($) Actual Expenditure ($) 1 Established staff 2 Government Wage Earners Travel and communications 3 4 Maintenance & operations 5 Purchase of goods and services 6 Operating grants and transfers 7 Special expenditures Total Operating Costs 2,836,446 243,889 256,946 589,528 222,880 6,253,600 6,293,670 16,696,959 8,200 40,000 157,388 (14,090) 2,261,167 (8,200) 2,828,246 244,828 252,089 221,831 296,946 610,248 746,916 158,480 208,790 6,253,600 --- 6,253,600 5,043,409 (223,475) 6,070,195 (40,177) 16,656,782 14,793,563 Lapsed Appropriation ($) 567,079 7,261 75,115 136,668 50,310 --- 1,026,786 1,863,219 8 Capital Purchases Total Capital Expenditure 500,000 500,000 40,177 40,177 540,177 540,177 504,997 504,997 35,180 35,180 13 Value Added Tax TOTAL EXPENDITURE 1,179,600 18,376,559 --- 1,179,600 820,700 --- 18,376,559 16,119,260 358,900 2,257,299 32.4.
Statement of Losses The Board of Survey carried out in 2014 resulted in the write-off of furniture and office equipment valued at $12,354.
Ministry of Industry and Trade Section 32: Page 3 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ________________________ Section 33 Ministry of Sugar Role and Responsibility The Ministry is responsible for the coordination of the activities and functions of the various institutions that make up the sugar industry with the sole objective of ensuring that Government’s commitment to reviving the industry is achieved.
It is also responsible for the monitoring, evaluation and reporting of the implementation of the Sugar Industry Strategic Action Plan 2013 – 2017.
Table of Contents PART A: 33.1 33.2 33.3 33.4 PART B: 33.5 33.6 33.7 FINANCIAL STATEMENT ................................................................................................................. 1 Audit Opinion ...................................................................................................................................... 1 Statement of Receipts and Expenditures ............................................................................................ 1 Appropriation Statement ..................................................................................................................... 2 Statement of Losses ........................................................................................................................... 2 AUDIT FINDINGS ............................................................................................................................... 3 Capital Expenditure Planning ............................................................................................................. 3 Grant Administration ........................................................................................................................... 3 Drawings Account Balance ................................................................................................................. 4 PART A: FINANCIAL STATEMENT 33.1 Audit Opinion The audit of the 2014 accounts of the Ministry of Sugar resulted in the issue of an unqualified audit report.
33.2 Statement of Receipts and Expenditure The Ministry of Sugar incurred expenditures totalling $18.6 million in 2014 compared to $14.6 million in 2013.

Details are shown in Table 33.1 below.
Table 33.1: Statement of Receipts and Expenditure Description Established staff Government wage earners Travel & communication Maintenance & operations Purchase of goods & services Operating grants & transfers Special expenditures Total Operating Expenditures Capital construction Capital purchases Ministry of Sugar 2014 ($) 2013 ($) 429,335 25,441 48,396 44,989 11,883 1,429,400 --- 1,989,444 333,743 23,513 56,064 40,137 12,944 1,429,053 249,081 2,144,535 2,145,199 --- 2,240,668 383,740 Section 33: Page 1 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ________________________ Description Capital grants & transfers Total Capital Expenditures Value added tax 2014 ($) 14,150,000 16,295,199 2013 ($) 9,695,526 12,319,934 281,700 131,718 TOTAL EXPENDITURES 18,566,343 14,596,187 The major components of expenditures in 2014 were the operating and capital grants of $15.6 million to the Sugar Research Institute of Fiji ($0.9 million), Sugar Industry Tribunal ($0.5 million), South Pacific Fertilisers Ltd ($5.75 million) and the Sugar Development Program ($8.4 million).
Total expenditures increased by $4 million or 27% compared to 2013, which was largely due to the following:  Established Staff increased by $95,592 or 29% in 2014 compared to 2013.

The increase was attributed to the recruitment of additional four project officers.

 Capital Grants and Transfers increased by $4.4 million or 46% from 2013.
The increase was attributed to a new program for Sugar Development, undertaken in conjunction with the Fiji Sugar Corporation to assist sugarcane farmers in the preparation of sugarcane farming lands.

33.3 Appropriation Statement The Ministry incurred expenditures totalling $18.6 million against the revised budget of $19.9 million resulting in savings of $1.3 million.

Details of expenditures against the budget estimates are provided in Table 33.2 below.
Table 33.2: Appropriation Statement SEG Item Established staff Government wage earner Travel and communications Maintenance & operations Purchase of goods & services Operating grants & transfers Total Operating Expenditure Capital construction Capital purchases Capital grants & transfers Total Capital Expenditure Value added tax TOTAL EXPENDITURE 33.4 Statement of Losses Budget Estimate ($) 441,982 38,721 49,000 51,000 15,500 1,429,400 2,025,603 2,600,000 600,000 14,150,000 17,350,000 497,300 19,872,903 Changes ($) (99) 99 --- --- --- --- --- --- --- --- --- --- --- Revised Estimate ($) 441,883 38,820 49,000 51,000 15,500 1,429,400 2,025,603 2,600,000 600,000 14,150,000 17,350,000 497,300 19,872,903 Actual Expenditure ($) 429,335 25,441 48,396 44,989 11,883 1,429,400 1,989,444 2,145,199 --- 14,150,000 16,295,199 281,700 18,566,343 Lapsed Appropriation ($) 12,548 13,379 604 6,011 3,617 --- 36,159 454,801 600,000 --- 1,054,801 215,600 1,306,560 There was no loss of money or assets reported for the year ended 31 December 2014.
Ministry of Sugar Section 33: Page 2 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ________________________ PART B: AUDIT FINDINGS 33.5 Capital Expenditure Planning Each year, the Appropriation Act and Budget Estimates set out details of the appropriations that Cabinet approves for spending by each agency.1 The Ministry recorded savings of over $1.3 million in 2014 of which $1.05 million accounts for savings from capital expenditure allocations.
In the 2014 budget, the Ministry was allocated $3.2 million for capital expenditure relating to purchases and construction.

The audit noted that the Ministry did not utilise 33% of budget for SEGs 8 and 9.

Refer to Table 33.3 below for details.

Table 33.3: Capital Expenditure Allocation Allocation Description 1-35000-00000-090000 1-35000-00000-080000 Purchase of Cultivators The fund was allocated for the cane access road upgrading and infrastructure development.
Revised Budget ($) 600,000 2,600,000 Actual 2014 ($) --- 2,145,199 Savings ($) 600,000 454,801 The delays in processing of tenders for purchases of cultivators and farming implements resulted in government assistance not being supplied to farmers.

Capital expenditure planning, monitoring and continual reviews are necessary for capital expenditure programs to be effective.
Recommendations  The Ministry should improve capital expenditure planning to ensure that the funds are utilised for its intended purposes.

 Capital budgets should be monitored regularly to ensure that planned projects and government assistance are facilitated.

Ministry’s Comments No comment received from the Ministry.
33.6 Grant Administration Unless the Ministry advises the Corporation otherwise in writing, the Corporation shall furnish to the Ministry the agreement books and records at quarterly intervals.

The reports shall cover all funds and activities financed under the grant for that interval.

In addition, the Corporation shall furnish to the Ministry such other information and reports at such times as the Ministry may reasonably request.
The Ministry will from time to time specify in writing the guidelines for the contents and formats of the reports.

The Ministry provided $8.4 million to the Fiji Sugar Corporation (FSC) for its cane development program in 2014.
The objectives of the program were: 1 Section 2.1.2 – Ministry of Sugar Finance Manual 2013 Ministry of Sugar Section 33: Page 3 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ________________________  To plant some 8,080 hectares of cane by the 2014 planting season.

 Over that area, an estimated yield of 65 TC/HA is expected to produce 525,000 tonnes of cane.
 Involving approximately 7,000 cane growers in all mill areas.2 The audit noted that the grant recipient did not provide acquittal reports on the utilisation of government grants for the cane development program.

Although a listing of farmers provided with the assistance was submitted, this was not independently monitored by the Ministry.
The Ministry may not be effectively monitoring the utilisation of government grants for cane development programs, thus could not provide assurance that the $8.4 million was used for its authorised purposes.

Recommendations  The Ministry should ensure that acquittal and progress reports are submitted by grant recipients and the reports verified by officials of the Ministry before disbursing subsequent grant.
 The Ministry should consider developing its own acquittal report format to ensure consistency in the provision of information by grant recipients.

Ministry’s Comments No comment received from the Ministry.

33.7 Drawings Account Balance All bank accounts must be reconciled monthly.
The bank reconciliation shall list the outstanding cheques and other reconciling items and be signed and dated by the responsible officer.3 The Accounts Officer must verify balances in the bank reconciliation to the cashbook, bank statements, un-presented cheque list and the previous month’s bank reconciliation before certifying it.4 The Permanent Secretary must appoint a Board of Survey to conduct a physical stock take of all cash on hand and other stocks held in safes at least once a year.5 Our review of the drawings account records revealed the following:  There was no Board of Survey carried out for un-presented cheques balance at year end.
 In addition, there were unidentified cheques posted to the Ministry’s allocation (AP470).

Refer to Table 33.4 below for details.

Table 33.4: Unidentified Cheques Date Cheque No.


04/11/14 18/11/14 1550 1610 Amount ($) 36,300.00 17,600.00 2 MOU between the Ministry and FSC clause 20.2 3 Finance Instructions 2010 – Section 32(6) 4 Finance Manual 2011 – Section 7.4.11 5 Finance Instructions 2010 – Section 31(5) Ministry of Sugar Section 33: Page 4 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ________________________ Date 21/11/14 24/12/14 30/12/14 Total Cheque No.
1551 1609 1501 Amount ($) 9,196.45 8,383.27 70.00 71,549.72 Despite the above issues being reported in prior years, to date these have not been resolved.

Recommendations  The Ministry should ensure that proper and accurate drawings account reconciliations are carried out on a monthly basis.

Any unidentified posting that are not related to the Ministry’s activities should be investigated.

 Board of survey on un-presented cheques should be carried out at year end as required.
Ministry’s Comments No comment received from the Ministry.
Ministry of Sugar Section 33: Page 5 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ________________________ Section 34 Ministry of Public Enterprise and Tourism Role and Responsibilities The Ministry consists of two departments and focuses on the following core responsibilities: Public Enterprise Oversees and implements reform programmes and monitors the performance and operations of public enterprises to increase their efficiencies and effectiveness in terms of financial growth and improvements in services to the public.
Tourism Formulates and administers tourism policies, plans and initiatives for the sustainable development of the Tourism Industry in Fiji.
Table of Contents PART A: FINANCIAL STATEMENTS ........................................................................................................................... 1 34.1 Audit Opinion ................................................................................................................................................... 1 34.2 Statement of Receipts and Expenditure ........................................................................................................... 1 34.3 Appropriation Statement .................................................................................................................................. 2 PART B: AUDIT FINDINGS........................................................................................................................................... 3 34.4 Capital Expenditure – Other Matter .................................................................................................................. 3 34.5 Unexplained Account Balances ....................................................................................................................... 4 PART A: FINANCIAL STATEMENTS 34.1 Audit Opinion The audit of the 2014 accounts of the Ministry of Public Enterprises and Tourism resulted in the issue of an unqualified audit report but with attention drawn to the following “Other Matter”:  Total Capital Expenditure of $31.8 million, as stated in the Statement of Receipts and Expenditure, did not include an expenditure paid from Head 50 – Miscellaneous Account maintained by the Ministry of Finance totalling $3.6 million.
The additional fund was allocated to cater for the shortfall payment and tax clearance for the Professional Golfers Association of Australia Limited in relation to the Fiji International (PGA) Tournament in 2014.

34.2 Statement of Receipts and Expenditure The Ministry collected revenue totalling $107,769 and incurred a total expenditure of $37.5 million in 2014.
Ministry of Public Enterprise and Tourism Section 34: Page 1 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ________________________ Table 34.1: Statement of Receipts and Expenditure for 2014 Description Miscellaneous TOTAL REVENUE Established staff Government Wage Earners Travel and communications Maintenance & operations Purchase of goods and services Operating grants and transfers Special expenditures Total Operating Expenditure Capital Constructions Capital grants and transfers Total Capital Expenditure Value Added Tax TOTAL EXPENDITURE 2014 ($) 2013 ($) 107,769 107,769 1,349,410 97,569 134,536 157,785 372,232 3,192,489 303,614 5,607,635 16,124 16,124 907,686 84,479 105,642 138,840 57,439 3,236,595 100,828 4,631,509 --- 31,776,456 329,547 23,500,000 31,776,456 23,829,547 152,640 37,536,731 127,427 28,588,483 Fees from Board of Directors trainings organised in 2014 were a significant source of revenue collected by the Ministry.
Revenue increased by $91,645 or 568% compared to 2013.

The major component of expenditures in 2014 was the operating and capital grants of $26.5 million to the Tourism Fiji.

Total expenditures increased by $8.9 million or 31% compared to 2013, which was largely due to the following:  Established staff increased by $441,724 or 49% due to recruitments made during the year for vacant positions.
 Purchase of goods and services increased by $314,793 or 548% as a result of procurements of new office furniture and computers and the provision of training to Directors of Government entities that are governed by the Public Enterprise Act 1996.

 Special expenditure increased by $202,786 or 201% due to the implementation of Fiji Tourism Development Master Plan in 2014.
 Capital grant and transfer increased by $8.3 million or 35%, which represented expenditures related to the Fiji International Golf Tournament at the Natadola Bay Course.

An additional $3.6 million was paid from Head 50 – Miscellaneous Account maintained by the Ministry of Finance, as stated on Section 34.1.

34.3 Appropriation Statement The Ministry’s expenditure of $37.5 million in 2014 was incurred against a budget of $40 million resulting in a savings of $2.5 million or 6%.
Details of expenditures against the budget estimates are provided in Table 34.2 below.
Ministry of Public Enterprise and Tourism Section 34: Page 2 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ________________________ Table 34.2: Appropriation Statement for 2014 SEG Item 1 Established staff 2 Government Wage Earners Travel and communications 3 4 Maintenance & operations 5 Purchase of goods and services 6 Operating grants and transfers 7 Special expenditures Total Operating Costs 10 Capital Grant & Transfers Total Capital Expenditure 13 Value Added Tax TOTAL EXPENDITURE Budget Estimate ($) 1,945,621 98,917 160,994 183,865 1,106,128 3,259,100 810,500 7,565,125 32,100,000 32,100,000 339,000 40,004,125 Changes ($) --- --- 11,543 10,000 --- --- (21,543) --- Revised Estimate ($) 1,945,621 98,917 172,537 193,865 1,106,128 3,259,100 788,957 7,565,125 Actual Expenditure ($) 1,349,410 97,569 134,536 157,785 372,232 3,192,489 303,614 5,607,635 Lapsed Appropriation ($) 596,211 1,348 38,001 36,080 733,896 66,611 485,343 1,957,490 --- --- --- --- 32,100,000 32,100,000 31,776,456 31,776,456 323,544 323,544 339,000 40,004,125 152,640 37,536,731 186,360 2,467,394 PART B: AUDIT FINDINGS 34.4 Capital Expenditure – Other Matter According to the financial statements for the year ended 31 December 2014, the Ministry incurred total capital expenditure of $31,776,456.
The balance disclosed in the financial statements did not include other expenses paid from Head 50 – Miscellaneous Account maintained by the Ministry of Finance totalling $3.6 million.

The additional fund was paid to the Ministry to cater for the shortfall payment and tax clearance for the Professional Golfers Association of Australia Ltd in relation to the Fiji International (PGA) Tournament in 2014.

Refer to Table 34.3 for expenditures incurred for the Fiji International (PGA) Tournament.
Table 34.3: Expenditures – Fiji International (PGA) Tournament Particulars Paid from the Ministry’s SEG 10 Paid from SLG 84 Total Amount ($) 8,276,456.11 3,607,201.86 $11,883,657.97 The disclosure of all expenses relating to the operation of the Ministry is necessary for the completeness and accuracy of expenditure reported and disclosed in the financial statements.
Recommendation It is recommended that the Ministry disclose as Notes to the financial statements other expenditures incurred for its operations which have been paid for by the Ministry of Finance and other donors.

Ministry of Public Enterprise and Tourism Section 34: Page 3 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ________________________ Ministry’s Comments No comments provided.
34.5 Unexplained Account Balances The Accounting Officer is responsible for maintaining ledgers and reconciling balances in such ledgers to ensure the accuracy of financial information and the timeliness of management reports.1 Our review of the general ledger (FMIS) revealed some unexplained account balances reflected in Ministry’s trial balance.

The balances have been carried forward from previous years.

Refer to Table 34.4 below for details.


Table 34.4: Unexplained Account Balances Account Type Account Description 1-36101-36999-910101 APP Surplus & Deficit –Prior Years 2014 ($) 348,182.28 2013 ($) 176,385.99 The Ministry confirmed that the postings in SLG 91 allocation were made by the Ministry of Finance.

The Ministry of Finance explained that the balances are the net reflection of the balance sheet items under the Ministry.

However, this could not be substantiated.


The Ministry of Finance also approved the write-off of $181,994 from the Operating Trust Fund and Drawings Accounts against Equity (SLG 91).

However, audit could not validate the write-offs as there were no supporting documents provided for audit.

Refer to Table 34.5 below for details.
Table 34.5: Details of Account Balances Written Off Allocation Descriptions Operating Trust Fund Account 1-36201-36201-861920 1-36101-36101-861920 1-36101-36999-861901 1-36101-86999-8619306 1-36201-36201-8619202 1-36201-36201-861533 Sub-Total Drawings Account 1-36101-86999-530301 1-36201-36999-530301 1-36101-36999-530301 Sub-Total Total 501 PD Employees FNPF 501 PD Employees FNPF 201 PD Tax Arrears /PAYE 263 PD Housing Authority 241 PD CMLA 320 Wesram Finance Drawings BSP – Suva Drawings BSP – Suva Drawings BSP – Suva Amount ($) (2,040.97) (77,343.00) (253.25) (100.00) (244.81) (288.00) (80,270.03) (96,817.18) 93.34 (5,000.00) (101,723.84) (181,993.87) 1 Finance Manual 2011 – Part 14 Ledger Account – Introduction Paragraph Ministry of Public Enterprise and Tourism Section 34: Page 4 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ________________________ In addition, a drawings account balance was written off against the expenditure allocation for Travel & Communications therefore overstating Travel & Communications expenses by $5,000.
(SEG 3) without proper adjustments, In the absence of proper records/explanations, it is difficult to authenticate the accuracy of the balances appearing under the above allocations in the FMIS general ledger.

Recommendations  The Ministry should ensure that transactions posted to the FMIS general ledger and any write-offs made are supported with documentary evidences which should be produced during the audit.
 The Ministry should seek clarifications from the Ministry of Finance on allocations under its Head that it cannot explain neither have records to substantiate the balances.

Ministry’s Comments  The Ministry had identified a credit amount of $80,270.03 that was posted to various Operating Trust Account which could not be verified since these were postings done in previous years prior to 2005.
Therefore the Ministry sought approval to write off the credit balances during the write off exercise carried out by FMIS in 2014.

This was approved and necessary write off was done.

 The amount of -$101,723.84 was wrongly posted by Ministry of Finance in our drawings account and as a result this was an unsubstantiated amount showing in our drawings.

This was later written off be Ministry of Finance in 2014.
Any further clarification could be forwarded to Ministry of Finance, FMIS unit as they would be able to provide necessary supporting documents in regards to the write off.
Ministry of Public Enterprise and Tourism Section 34: Page 5 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ____________________________ Section 35 Ministry of Works and Transport Role and Responsibilities The Ministry of Works and Transport is responsible for providing policy, planning, coordination, design, construction, operation, maintenance and management of programmes or activities related to public buildings, mechanical and electrical services, roads, bridges, and jetties.
The Ministry is also responsible for any policy and administrative support services to the transport sector, focusing on land and maritime in particular its key players including the private sector transport operators, transport regulators (land and maritime), Government agencies and the public at large.

This will enable the enhancement and facilitation of an efficient and sustainable transportation system and Meteorological Services within the country.
The Ministry is also responsible for the provision of an efficient meteorological and hydrological service in Fiji.

The implementation of policies involves the Transport Planning Unit, Meteorological Service Department and Public Works Department – Common Services.
Table of Content PART A: FINANCIAL STATEMENTS ................................................................................................................. 1 35.1 Audit Opinion ............................................................................................................................................. 1 35.2 Statement of Receipts and Expenditure..................................................................................................... 2 35.3 Appropriation Statement ............................................................................................................................ 2 35.4 Statement of Losses .................................................................................................................................. 3 35.5 Trade and Manufacturing Account (TMA) .................................................................................................. 3 PART B: AUDIT FINDINGS ................................................................................................................................. 4 35.6 Payments to Plant Hire .............................................................................................................................. 4 35.7 Anomalies in Operating Trust Fund Account ............................................................................................. 6 35.8 Other Prior Year Recurring Issues ........................................................................................................... 10 Appendix 35.1:Overdrawn Trust Fund Accounts .............................................................................................. 16 Appendix 35.2:Requisition Books Not Provided for Audit.
................................................................................ 17 PART A: FINANCIAL STATEMENTS 35.1 Audit Opinion The audit of the 2014 accounts of the Ministry of Works and Transport resulted in the issue of a qualified audit report.
The issues qualified are as follows:  Included in the TMA Balance Sheet (Schedule 6) is TMA Accumulated Surplus of $355,684, TMA Surplus of $4.69 million, Accounts Receivable of $2.11 million, Accounts Payable of $271,036 and Deposits and Deductions of $52,784.

The amounts could not be verified as the Ministry was not able to provide appropriate audit evidence to support the balances.
As a result, the accuracy and completeness of the Trading and Manufacturing Account as at 31 December 2014 could not be ascertained.

 An un-reconciled variance amounting to $1.34 million exists between the FMIS general ledger and the TMA bank reconciliation for Cash at Bank.
Accordingly, the accuracy and completeness Section 35: Page 1 Ministry of Works and Transport REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ____________________________ of the TMA Cash at Bank of $2.55 million as shown in the TMA Balance Sheet (Schedule 6) as at 31 December 2014 could not be established.

35.2 Statement of Receipts and Expenditure The Ministry collected revenue totalling $786,792 and incurred a total expenditure of $52.24 million in 2014.
Details are shown in Table 35.1.
Table 35.1: Statement of receipts and expenditure Description 2014 ($) 2013 ($) Fees – Miscellaneous Reimbursements for Meteorological Services Other revenue TOTAL REVENUE 296,013 480,426 10,353 786,792 286,996 528,261 22,779 838,036 Established Staff Government Wage Earners Travel & Communications Maintenance & Operations Purchase of Goods and Services Operating Grants and Transfers Special Expenditure Total Operating Expenditure Capital Construction Capital Purchase Capital Grants and Transfer Total Capital Expenditure Value Added Tax TOTAL EXPENDITURE 7,971,839 6,243,152 833,407 4,205,583 1,053,227 16,237,939 540,496 37,085,643 3,488,381 3,208,307 5,990,927 12,687,615 2,471,259 52,244,517 7,161,525 5,975,767 764,151 4,268,271 877,186 15,312,713 196,097 34,555,710 5,528,068 2,184,806 4,286,746 11,999,620 2,027,676 48,583,006 Revenue collection decreased by 6% in 2014 due to the reduction in reimbursements for meteorological services.
Total expenditure increased by 8% or $3.66 million from 2013 and this was largely due to the following:     recruitment to fill vacant positions and pay rise for civil servants in 2014; increase in operating grants for the Land Transport Authority of Fiji; increase in implementation of projects for Department of Works between 2013 and 2014; and increase in budgets allocated for Capital Purchase and Capital Grants.
35.3 Appropriation Statement The Ministry of Works and Transport incurred expenditure totalling $52.24 million in 2014 against a revised budget of $55.97 million resulting in a savings of $3.73 million or 7%.

Details of expenditure against the budget estimates are provided in Table 35.2.
Ministry of Works and Transport Section 35: Page 2 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ____________________________ Table 35.2: Appropriation statement SEG Item & of Goods & Grants Established Staff Government Wage Earners Travel & Communication Maintenance & Operations Purchase Services Operating Transfers Special Expenditures Total Operating Costs Construction Purchases Capital Grants & Transfers Total Capital Expenditure Value Added Tax TOTAL EXPENDITURE Budget Estimate ($) 11,008,341 6,310,344 900,594 4,399,628 875,892 Changes ($) (770,457) 12,777 (55,393) (132,413) 199,443 Revised Estimate ($) 10,237,884 6,323,121 845,201 4,267,215 1,075,335 Actual Expenditure ($) 7,971,839 6,243,152 833,407 4,205,583 1,053,227 Lapsed Appropriation ($) 2,266,045 79,969 11,794 61,632 22,108 16,549,415 (3,907) 16,545,508 16,237,939 307,569 650,000 40,694,214 3,550,000 3,408,709 6,250,000 13,208,709 2,067,928 55,970,851 250,995 (498,955) (12,180) 57,180 --- 45,000 453,955 --- 900,995 40,195,259 3,537,820 3,465,889 6,250,000 13,253,709 2,521,883 55,970,851 540,496 37,085,643 3,488,381 3,208,307 5,990,927 12,687,615 2,471,259 52,244,517 360,499 3,109,616 49,439 257,582 259,073 566,094 50,624 3,726,334 35.4 Statement of Losses There was no loss of money or assets reported for the year ended 31 December 2014.
35.5 Trade and Manufacturing Account (TMA) Table 35.3: Manufacturing Account Opening Raw materials Add: Purchases Less: Closing Raw Materials Raw Materials Used Direct Labour Opening Work in Progress Less: Closing Work in Progress Cost of Goods Manufactured transferred to Trading Account Table 35.4: Trading Account Sales Finished Goods (01/01/14) Add: Cost of Manufactured Goods Cost of goods available for sale Less: Finished Goods (31/12/13) Cost of Goods Sold Ministry of Works and Transport 2014 ($) 235,644 3,109,181 3,344,825 340,123 3,004,702 3,176,476 25,327 6,206,505 85,605 2013 ($) 431,522 3,047,737 3,479,259 235,644 3,243,615 4,432,884 --- 7,676,499 25,327 6,120,900 7,651,172 2014 ($) 9,004,949 146,817 6,120,900 6,267,717 277,392 5,990,325 2013 ($) 9,126,417 296,180 7,651,172 7,947,352 146,817 7,800,535 Section 35: Page 3 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ____________________________ 2014 ($) 3,014,624 2013 ($) 1,325,882 2014 ($) 3,014,624 1,115 --- 3,015,739 194,299 1,670,951 16,590 1,338 --- 1,883,178 1,132,561 2013 ($) 1,325,882 307 --- 1,326,189 189,541 1,748,626 26,882 1,296 576 1,966,921 (640,732) 2014 ($) 2013 ($) 52,784 271,036 323,820 355,684 4,693,306 5,048,990 5,372,810 2,555,211 2,114,179 703,120 5,372,810 190,373 218,656 409,029 (781,117) 4,669,422 3,888,305 4,297,334 1,785,350 2,104,195 407,789 4,297,334 Gross Profit transferred to Profit & Loss Table 35.5: Profit & Loss Statement Income Gross Profit transferred from Trading A/C Other income OPR from
 previous years Total Income Expenses Travel and communications Maintenance and operation Purchase of Goods and Services Special Expenses Rent & Hire Total Expenses Net Profit/(Loss) Table 35.6: TMA Balance Sheet Liabilities Deposits, Deductions & Retention money Accounts Payable Total Liabilities Equity TMA Accumulated Surplus TMA Surplus Total Equity Total Equity and Liabilities Assets Cash at Bank Accounts Receivable Inventory Total Assets PART B: AUDIT FINDINGS 35.6 Payments to Plant Hire The Accounting Head must not certify a payment as correct unless they are satisfied that: i. ii.
iii.

iv.
v. it is in accordance with an LPO, indent, contract, invoice, statement or other authorisation; there is documentation that the goods, services or works have been received; sufficient uncommitted funds are available for payment of the account; the account is not fraudulent and has not been previously paid; the expenditure account it is charged to is correct.1 1 Ministry of Works, Transport and Public Utilities Finance Manual 2013, Section 2.8.4 Ministry of Works and Transport Section 35: Page 4 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ____________________________ When the Ministry hire vehicles from the Plant Hire TMA, the Plant Pool approves the requests and allocates a driver for the job.
The driver then fills out the daily running sheet which is certified by the Transport Officer.

A debit note is then prepared detailing the total charges incurred which is certified by the Principal Engineer Mechanical and issued to the respective Sections of the Ministry for certification.

The Section Heads certify that the charges are correct after which a debit note is issued to Accounts Section for payment.
In addition to other anomalies stated in Table 35.7, the audit also noted instances where payments were processed without all debit notes being certified by the Section Heads.

Table 35.7: Plant Hire Charges - Headquarters Allocation Date Cheque No.
Particulars Amount ($) Remarks 1-40501-99991-059113 41705 EFT 670 Payment for plant hire and driver's wages 1-40501-99991-020101 - $1,856.32 1-40501-99991-059113 - $14,384.49 1-40501-99991-130101 - $2,157.66 41757 EFT 730 Payment for plant hire and driver's wages 1-40501-99991-059113 - $13,980.57 1-40501-99991-130101 - $2,097.08 1-40501-99991-020101 - $668.79 41767 EFT 776 Payment for plant hire and driver's wages 1-40501-99991-059113 - $12,544.43 1-40501-99991-130101 - $1,881.66 1-40501-99991-020101 - $1,839.44 41809 EFT 832 Payment for plant hire and driver's wages Ministry of Works and Transport 18,913.41  Copy of actual job the instruction was not attached to the payment voucher including the running sheet; corresponding  reasons for hiring vehicles and locations the vehicle travelled not stated;  normal and stand by rates were not stated;  total amount in debit notes was $18,214.59 only; and  debit notes for $8,917.62 were not certified.
18,398.47  Copy of actual job the instruction was not provided including corresponding the running sheet;  reasons for hiring vehicles and locations the vehicle travelled not stated;  normal and stand by rates were not stated; and  debit notes for $6,040.96 were not certified.
16,746.44  Copy of actual job the instruction was not attached corresponding the including running sheet;  reasons for hiring vehicles and locations the vehicle travelled not stated;  normal and stand by rates were not stated; and  some debit notes were not certified.
16,265.53  Copy of actual job the instruction was not attached including corresponding the running sheet;  reasons for hiring vehicles and locations the vehicle travelled Section 35: Page 5 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ____________________________ Allocation Date Cheque No.

Particulars Amount ($) Remarks not stated;  normal and stand by rates were not stated; and  $1,236.80 was not certified.
The findings indicate that payments were not reviewed by the Accounts Section before being processed in the FMIS general ledger.

There is potential risk of unauthorised or fraudulent transactions passed in the FMIS general ledger.

Recommendations  It is recommended that all supporting documents are attached to the payment vouchers; however, if maintained separately, this should be indicated in the payment vouchers and provided for audit.

 Debit Notes should be properly certified before payments.
Ministry’s Comments When charges are received by the Chief Engineer Mechanical it is then checked and then verified by the Payment Section.

The Ministry has put in place a few measures which need to be adhered to including all supporting documents attached to the vouchers.

Measures are now in place to ensure that all vehicle runs are properly recorded and endorsed by the Transport officer and Divisional Heads.
Also payment claims are verified by Senior Accountant prior to any payments Measures are now in place to ensure that all Vehicle runs are properly monitored and recorded by respective HODs.

All payment claims are verified by Accounting Heads prior to any payments.

This has been verified by OAG.
35.7 Anomalies in Operating Trust Fund Account Within three days of receiving the monthly general ledger reports from the Ministry of Finance, the ledger keeper shall reconcile the ledger balances to the general ledger reports and prepare a ledger reconciliation statement.2 Any errors or misallocations must be immediately adjusted by way of journal vouchers.3 Details of balances must be attached to the reconciliation statement.4 The trust officer shall certify and date the reconciliation statement after ensuring that all balances in the statement are verified to supporting documents.5 Trust money is to be accounted for separately from public money and other money6, and by convention should always have credit balances.
Thus, the Trust Fund Accounts should not at any time be overdrawn.7 2 Ministry of Works, Transport and Public Utilities Finance Manual 2013, Section 16.3.3 3 Ministry of Works, Transport and Public Utilities Finance Manual 2013, Section 16.3.4 4 Ministry of Works, Transport and Public Utilities Finance Manual 2013, Section 15.4.2 5 Ministry of Works, Transport and Public Utilities Finance Manual 2013, Section 15.4.3 6 Financial Management Act 2004, Section 25 (1) 7 Finance Circular No.
4/98 of 30/03/98 Ministry of Works and Transport Section 35: Page 6 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ____________________________ The trust fund officer shall certify and date the reconciliation statement after ensuring that all balances in the statement are verified to supporting documents.8 Our review of records for the Operating Trust Fund Accounts revealed the following anomalies, most of which were recurring issues from previous years:  Operating Trust Fund Account under Program 6 (former Department of Roads) was still an active account in 2014.
There was a decrease in JC Retention Money allocation from 2013 to 2014 by $10.35 million or 86%.

The Ministry explained that these posting were not made by them.

Questions raised with the Ministry of Finance regarding the transaction were not answered.

This balance reflected in the FMIS general ledger could not be substantiated against any reconciliation.

Refer to Table 35.8 below for details.

Table 35.8: Operating Trust Fund Account under Program 6 Account No.
Account Description 1-40601-84999-861106 1-40601-84999-861920 1-40601-91991-861920 1-40601-84999-862102 1-40104-40999-861924 MPAISA Total 390 PD GOV WATER RATES 501 PD EMPLOYEES FNPF 501 PD EMPLOYEES FNPF JC RETENTION MONEY Actuals 2014 ($) (758.50) (23,288.08) (154,365.28) (1,681,904.09) 36.00 (1,860,279.95) Variance ($) Actuals 2013 ($) (758.50) (23,288.08) (154,365.28) --- --- --- (12,035,674.58) 10,353,770.49 --- (12,214,050.44) 10,353,770.49 36.00  As at 31/12/14, the Departments/Divisions had significant balances in the Operating Trust Fund accounts.
Debit balances signified overdrawn accounts while the credit balances indicated that payroll deductions were yet to be paid out to the relevant entities.

The significant balances also indicated that these accounts were not properly cleared off.

Refer to the Table 35.9 below for details.
Table 35.9: Significant credit and debit balances as at 31/12/14 Division Headquarters DE – Works Central Eastern DE – Works Central Eastern TMA 263 DE – Works Central Eastern TMA 251 DE – Works Western DE – Works Northern Meteorology Amount ($) (1,205,034.59) 1,218,513.82 182,428.02 72,642.89 (12,365.26) 547,210.83 (23,427.38)  The closing balances of the Department of Work’s Operating Trust Fund account reconciliation statement did not reconcile with the FMIS general ledger as at 31 December 2014.
Refer to the Table 35.10 below for details: Table 35.10: Variance between Reconciliation Statement and the FMIS General Ledger Allocation No.
Account Description Divisional Engineer - Central Eastern TMA 263 4-40263-91011-863201 VAT ON REVENUE FMIS GL ($) Reconciliation ($) Variance ($) 237,508.73 --- 237,508.73 8 Ministry of Works, Transport and Public Utilities Finance Manual 2013, Section 15.4.3 Ministry of Works and Transport Section 35: Page 7 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ____________________________ Allocation No.
Account Description FMIS GL ($) Reconciliation ($) Variance ($) Divisional Engineer - Central Eastern TMA 251 4-40251-91011-863201 VAT ON REVENUE 75,496.45 --- 75,496.45 The Division has failed to account for VAT on revenue in its reconciliation which has resulted in the variances between the FMIS general ledger and reconciliation statements.

 A significant number of accounts had debit closing balances implying that they were overdrawn as at 31 December 2014.
The Ministry failed to provide any satisfactory explanations for the overdrawn accounts.

Refer to Appendix 35.1 for details.

 The details of a number of Operating Trust were not provided in the reconciliation statement for December nor were documents provided during the audit to support the balances.

Refer to Table 35.11 below for details.

Table 35.11: Operating Trust Fund Account without Details Account No.
Account Description Amount ($) Total ($) Headquarters 1-40501-83999-860101 1-40501-83999-860103 1-40501-83999-861901 1-40501-83999-861920 1-40501-83999-862101 1-40501-83999-863201 SECURITY DEPOSITS TENDER DEPOSITS 201 PD TAX ARREARS / PAYE 501 PD EMPLOYEES FNPF AP RETENTION MONEY VAT ON REVENUE Divisional Engineer Northern 1-40501-97991-861106 1-40501-97991-861202 1-40501-97991-861204 1-40501-97991-861920 390 PD GOV WATER RATES CHRGS 241 PD CMLA PAYROL DEDUCTIONS-LICI 501 PD EMPLOYEES FNPF (13,209.05) (951,202.35) (197,457.85) (24,545.02) (12,576.18) (5,573.30) 29,509.61 26,095.87 6,821.55 475,626.11 (1,204,563.75) 538,053.14 The above anomalies imply ineffective controls and lack of supervisory checks in the Accounts Section.
This also indicates that the reconciliation process was not effectively performed.
Recommendations The Ministry should:     strengthen the monthly reconciliation process to mitigate the various anomalies; ensure that monthly reconciliations are carried out properly and accurately and Accounts Officers should be proactive in investigating and resolving un-reconciled balances; ensure that errors and discrepancies in the reconciliation statements are corrected promptly before subsequent month’s reconciliation statement is prepared; and ensure that overdrawn accounts are investigated with appropriate actions taken.
Ministry of Works and Transport Section 35: Page 8 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ____________________________ Ministry’s Comments Operating Trust Fund Account under Program 6 The Ministry has written to MOF requesting for the write off of the unsubstantiated debits and credits under Head 40 Program 6 [Department of National Roads] since they were no longer in operation.
Furthermore the Ministry has requested for deactivation of the respective GL accounts under Program 6 Significant Credit and Debit Balances as at 31/12/14 These balances include figures from past years which could not be verified due to insufficient records.

These balances will be further verified and submitted to MOF for write off.
Variance between Reconciliation Statement and FMIS General Ledger Ministry had been working with MoF - Asset Management Unit [AMU] to address the VAT on Revenue for TMA operations.

AMU is currently liaising with FRCA to address and rectify this.

Overdrawn Trust Fund Account These balances include figures from past years which could not be verified due to insufficient records.

These balances will be further verified and submitted to MOF for write off.
Operating Trust Fund Account without Details These balances include figures from past years which could not be verified due to insufficient records.

These balances will be further verified and submitted to MOF for write off.

Ministry had conducted training on all reconciliations with assistance from MoF and currently carries out all reconciliation’s whereby all variances are accounted for.
All variances which had been carried forward over the past years and could not be reconciled have been included in the write off submission to MoF.

Ministry ensures that all debit and credit transactions are accurately accounted and variances cleared in the following month’s reconciliation.
Ministry of Works and Transport Section 35: Page 9 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ____________________________ 35.8 Other Prior Year Recurring Issues A number of significant issues were raised with recommendations for improvements in previous years’ audits.

While some issues have been rectified, some issues have yet to be resolved or are the process of being resolved.

These recurring issues make up the major component of this report.
Refer to the Table 35.12 below for details Table 35.12: Prior Year Issues Issues Recommendations Current Status Ministry’s Proposed Action/Comments Unsubstantiated TMA Balances The Ministry did not maintain adequate accounting records to provide sufficient and appropriate audit evidence to substantiate the balances reflected in the TMA Balance Sheet.
As a result, audit was not able to ascertain the correctness of these accounts:  Details TMA Accumulated Surplus TMA Surplus    Accounts Receivable  Accounts Payable  Deposits & Deductions  There was un-reconciled difference between the FMIS general ledger and the TMA bank reconciliation for cash at bank.

Therefore, the audit was unable to ascertain the accuracy and completeness of the TMA Cash at Bank as shown in the TMA Balance Sheet.
Refer to Table 35.6 for balances of the accounts for 2014. of the Agency TMA Accumulated Surplus and TMA Surplus as reflected in TMA consolidated the Balance Sheet should be provided for audit.
It is recommended that the Financial draft Statements, the Trading and Manufacturing thoroughly Accounts are balances checked, substantiated and clarified with the Ministry of Finance before they are submitted for audit; including  Accounts Officers should be proactive in dealing with issues concerning TMAs, that is, seek out explanations and liaise with the Ministry of Finance long outstanding issues regarding resolve to – Some Open progress have been made towards resolving the issue.
this However, remained as qualifications in the Auditor’s 2014 Report.

1.

The Ministry has reconciled the TMA variances which are now being verified by Ministry of Finance (MoF) – AMU.

include Accounts Receivable, These Accounts Payable and Deposits and Deductions.

The exercise this will enable the Ministry to correctly verify and substantiate the TMA variance under the 2015 Agency Financial Statements.
Upon completion of the exercise, the Ministry would be able to:  Substantiate all past years (including 2006 -2010) TMA variances  Ensure that no qualification on the same issue in 2015 AFS Due to magnitude of the transactions from the inception, MoF – AMU spent almost 2 days to reconcile the records for January 2007 only.

This exercise will take at least a month to complete.
Ministry of Works and Transport Section 35: Page 10 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ____________________________ Issues Recommendations Current Status Ministry’s Proposed Action/Comments   records the balances that would for the support TMAs.
The Ministry should consider maintaining separate cash ledgers in the FMIS for the separate TMA’s; and The Ministry should ensure all cash balances, accounts receivables, deposits and is deductions, and equity properly the reflected Financial Statement.
in that deactivate liaise with Ministry of Finance to these allocations; transactions ensure posted to the general ledger (FMIS) are supported with documentary evidences; seek clarifications from the Ministry of Finance on allocations under its Head that it cannot explain and to obtain records substantiate the balances; and investigate why expenditures were an allocation that should have been deactivated and without any budgetary allocation.
charged to Program 6 General Ledger Accounts Prior to the establishment of the Fiji Roads Authority (FRA) in 2012, the budget/activities of the Department of Roads were captured under Program 6 of Appropriation Head 40.

The Ministry should:  Accounts and allocations in the FMIS general ledger under Program 6 remained active after the establishment of the FRA.

   Ministry of Works and Transport Section 35: Page 11 2.
The un-reconciled variance appearing in the AFS Cash at Bank, relates to the previous year’s (2006 – 2010) which includes misappropriation that is under Independent Commission against Fiji investigation and Corruption (FICAC) pending court’s decision.

– some Open progress have been made towards resolving the issue.

These allocations were for Department of National Roads [DNR] which remained active after the closure of DNR.
The Ministry has verified and written to MoF requesting for the write off of all Head 40 Program 6 allocations with balances.

Some balances have been carried forward over the years and remained constant.

The Ministry has included this is the write off submission to the MoF.
REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ____________________________ Issues Recommendations Current Status Ministry’s Proposed Action/Comments Drawings Account Un-reconciled variances were noted between the reconciliation statements and the FMIS general ledger.
This was also noted in the 2014 audit as follows: Department/Divisions Headquarters Meteorology Divisional Engineer Central Eastern (DECE) Total FMIS GL Figure ($) (339,772.82) (197,676.10) Reconciliation Statement ($) (365,320.28) (193,441.42) Variance ($) (25,547.46) (4,234.68) (1,099,637.87) (1,637,086.79) (1,091,495.62) (1,650,257.32) (8,142.25) (37,924.39) The drawings account reconciliations, which were performed by the Ministry of Finance, were not done on a monthly basis.
For example, for the Divisional Engineer Central Eastern, the reconciliation of account was only prepared at year end.

– Open some have progress been made towards resolving the issues.

promptly statements The Ministry should ensure that errors and discrepancies in the reconciliation are corrected before subsequent month’s reconciliation is prepared.

The statement Ministry should seek assistance from the Ministry of Finance where necessary.
Poor Maintenance of Accounting Records The audit noted that accounting records for the Divisions have been not maintained properly, which often resulted in records being misplaced and not produced for audit.

This has yet to be fully resolved as evidenced from the anomalies identified during the 2014 audit, as follows:  For the Plumber Shop, the requisition numbers for wages and subsistence allowances were not recorded in the ledger.
Therefore, audit was not able to identify which project these expenses were charged to.

Therefore expenditures for all projects undertaken by the Plumber Shop were understated.

The Ministry should ensure that the all Divisions comply with Finance Manual with regards to maintenance and safe keeping of accounting their records and provision for audit purposes.

Open - Some have progress been made towards resolving the issues since in reported previous years.
Ministry of Works and Transport Section 35: Page 12 Variance Between FMIS General Ledger and Reconciliation Statement: The Ministry carried out its reconciliations through verification of the source documents against FMIS GL figures.

However, MoF introduced and generated new drawings reconciliation through FMIS system whereby certain payments processed under Accounts Payable module were not captured in the GL time of system generated during reconciliation, thus resulting in variances.
MoF will be advised to regularize the variances.

the Bulk Reconciliation: The Ministry carried out its reconciliations through verification of the source documents against FMIS GL figures.

However MoF introduced and generated new drawings reconciliation through FMIS system whereby certain payments processed under Accounts Payable module were not captured in the GL during time of system generated reconciliation, thus resulting in variances.

MoF will be advised to regularize the variances.


the All source documents and payment vouchers for easy are now systematically stored retrieval in the filing space.

Manual Commitment and Expenditure ledgers are maintained and monthly reconciliations are carried out to ensure that accurate and reliable data are maintained at all times.
REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ____________________________ Issues Recommendations Current Status Ministry’s Proposed Action/Comments In addition, requisition books were not produced for audit.

Refer to Appendix 35.2 for examples.

Accessing the requisition books during the audit is important for establishing audit trail as they are used as the primary references in the manual ledgers maintained at the Divisions.
From the requisition books, the payment vouchers could then be extracted which would have other supporting documents pertaining to the payments.

Explanation provided by the Chief Clerk - Plumber Shop was that the requisition books were jointly used by Plumber Shop and Building Section and the movements of the books between the two Sections resulted in the books being misplaced.
 It was further noted that as at the date of audit,9 the ledger records at the DECE Joinery TMA were only updated up to August 2014.

The documents and records are now properly filed and stored according to sequence by the responsible officers to avoid misplacement of records are encouraged to maintain proper record keeping and data storage.

documents.

HODs and Monthly reconciliations are submitted to MoF as per MoF Table 5 deliverables and also in compliance with Ministry’s 2015 Finance Manual.
in in The Department has filed the requisitions mentioned the Audit Report with all the supporting documents attached payment vouchers.

The requisition book copy has been misplaced due to movement of requisition book between Buildings and Plumber shop.

The division has now put in place separate requisition books for each section.

The Ministry also monitors stock register on a monthly basis.
Each department are mandated to submit their monthly financial report including TMA management report with entity performance analysis.
9 26/01/15 Ministry of Works and Transport Section 35: Page 13 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ____________________________ Issues Recommendations Current Status Ministry’s Proposed Action/Comments Job Allocations for Operating Fund Account Capital Projects The audit noted that there was only one job allocation in the FMIS general ledger for all projects funded under the Operating Fund Account Capital Constructions.
Consequently, the audit was not able to ascertain and confirm, from the FMIS general ledger the total expenditures incurred and paid for, for individual projects.

For examples:    For the Electrification of Rural Government Stations, the expenses for the different projects were all charged to one expenditure allocation in the FMIS general ledger (1-40509-95214-080351) making it difficult to determine costs incurred by each of the five projects.
In the manual ledger maintained by the Ministry, the same was also true and material and transport costs for different projects were only separated after enquiry from audit.

The capital construction budget under the Maintenance and Operation of Public Buildings was $3 million.

These were for Repair and Upgrading of Public Buildings ($1,000,000); Routine and Special Upgrading of Public Buildings ($1,500,000); Water Supply and Sewer Line ($500,000).
All the Repair and Upgrade of Public Buildings projects carried out in the Central Division were charged to only one allocation (1-40502-95211-080229) in the FMIS general ledger.

All the Routine and Special Upgrade of Public Buildings projects were also charged to one allocation (1-40502-95211-080429) in the FMIS general ledger.
for The Ministry should liaise with the Ministry of Finance creation of project allocation for each project undertaken as this would assist in monitoring costs for individual projects to ensure that costs are contained with the budget allocated for each project.

Open - Some have progress been made towards resolving the issues since in reported previous years.

The FMIS GL system only allows 7 digits on allocation.
The Ministry has consulted MoF on extending the allocation further to more than 7 digits but were told that the system only allow for 7 digits.

The Divisions are keeping separate ledgers for different projects the expenditure.

to distinguish Expenditures are also recorded in the weekly advice.

OAG comments are noted.

The ministry will formalise to MoF to facilitate the individual expenditure items for each project under fund control to avoid inter-funding.
Currently the Ministry is maintaining manual ledgers and individual appropriate projects against the FMIS GL.

reconciliation for Anomalies in Expenditure and Records – Building Section  It was difficult to determine whether individual commitments have been paid as there were insufficient details provided in the ledgers.

Payment voucher or cheque numbers were not recorded as references.
 Due to insufficient information in the Expenditure Ledgers, payments could not be verified to the FMIS general ledger.

The requisition form and the schedule of Ministry of Works and Transport The Ministry should:  ensure proper maintenance of expenditure ledgers;  ensure trail is maintained clear documentation; that adequate audit through Section 35: Page 14 Some Open - progress have been made towards resolving the issues in reported since previous years.
Manual Commitment and Expenditure ledgers are maintained and monthly reconciliations are carried that accurate and to ensure reliable data are maintained at all times.
Monthly reconciliations are submitted to MoF Table 5 deliverables and also in compliance REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ____________________________ Issues Recommendations Current Status Ministry’s Proposed Action/Comments bill details could not be verified to the FMIS as they were not system generated but manually processed.
 In addition, although space was provided for payment voucher details in the report prepared by the Buildings Section, these were not filled in.

These were important details that needed to be documented because the requisition forms and the schedule of bills were attachments to the payment vouchers maintained with the Account Sections and were not primary documents for referencing.
  The expenditures stated under each project in the Expenditure Ledgers may not be the actual cost of the project as unrelated costs or costs for other projected were charged to any accounts that have savings.
implement an effective and efficient communication process between the Buildings and the Accounts Sections so that all necessary details are in accurately updated the expenditure respective ledgers; ensure that all expenditure incurred for a particular project are charged to their respective project allocations; and  monitor project expenditure at regular intervals.

with the Ministry’s 2015 Finance Manual.


As per recommendation by OAG cheque numbers are now included in the manual ledgers for ease of reference.

Ministry of Works and Transport Section 35: Page 15 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ____________________________ Appendix 35.1: Overdrawn Trust Fund Accounts Account No.
Account Description Amount ($) Total ($) Headquarters 1-40501-83999-861106 1-40501-83999-861533 1-40501-83999-861923 1-40501-83999-861924 390 PD GOV WATER RATES CHRGS WESRAM FINANCE PAYROLL UNIFORM DEDUCTION WORKS MPAISA 45.00 0.10 557.75 70.00 672.85 Divisional Engineer Central Eastern TMA 263 4-40263-91011-861599 XXX PD OTHERS0 2,215.00 2,215.00 Divisional Engineer Western 1-40501-96991-861102 1-40501-96991-861104 1-40501-96991-861105 1-40501-96991-861106 1-40501-96991-861206 1-40501-96991-861209 1-40501-96991-861307 1-40501-96991-861501 1-40501-96991-861507 1-40501-96991-861525 1-40501-96991-861536 1-40501-96991-861537 1-40501-96991-861599 1-40501-96991-861605 1-40501-96991-861606 1-40501-96991-861901 1-40501-96991-861911 Divisional Engineer Northern 1-40501-97991-861101 1-40501-97991-861106 1-40501-97991-861202 1-40501-97991-861204 1-40501-97991-861501 1-40501-97991-861525 1-40501-97991-861533 1-40501-97991-861536 1-40501-97991-861599 1-40501-97991-861899 1-40501-97991-861901 1-40501-97991-861911 1-40501-97991-861920 Total 384 PD OPR PREVIOUS YEAR 208 PD RENT H/A UNEST 267 PD RENT PUBLIC RENTAL BRD 390 PD GOV WATER RATES CHRGS 246 PD MARSH & MCLENNAN 249 PD MARSH & MCLENNAN (HTH/P 264 PD HOME FINANCE CO 286 PD FIJI PUBLIC SERVICE ASS 293 PD SOCIETY OF HOSP.
PHAM 316 PD SERVICE WORKER CU HANDY FINANCE LIMITED CARPENTERS FINANCE FIJI LTD XXX PD OTHERS0 345 PD MAINT-BA 346 PD MAINT-LAUTOKA 201 PD TAX ARREARS / PAYE 385 PD SPORTS & SOCIAL 202 PD OPR CURRENT YEAR 390 PD GOV WATER RATES CHRGS 241 PD CMLA PAYROL DEDUCTIONS-LICI 286 PD FIJI PUBLIC SERVICE ASS 316 PD SERVICE WORKER CU WESRAM FINANCE HANDY FINANCE LIMITED PAYROL DEDUCTIONS -OTHERS 440 PD FIXED RENT 201 PD TAX ARREARS / PAYE 385 PD SPORTS & SOCIAL 501 PD EMPLOYEES FNPF Ministry of Works and Transport Section 35: Page 16 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ____________________________ Appendix 35.2: Requisition Books Not Provided for Audit.
Number Account Description Requisition No.
4-40252-91011-260101 Material (Purchases) Total 651130/651128 Amount ($) Ministry of Works and Transport Section 35: Page 17 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ____________________________ Section 36 Ministry of Public Utilities & Energy Roles and Responsibilities The Ministry of Public Utilities and Energy is responsible for formulating policies in the Energy and Water and Sewerage sectors and the establishment of a responsive legal framework to govern the development of essential services.
The Department of Energy will focus on accelerating electricity infrastructure development to expedite the provision of electricity services to the rural population.

These include assisting rural communities with connections to FEA electricity network, provision of stand-alone diesel generator and where there are sufficient resources for renewable energy technologies (evaluated after resource analysis) installation of either wind, hydro, biomass or standalone solar home systems.
The Department addresses four key strategic areas namely: Energy Security; Energy Planning; Power Sector and Renewable Energy.

The Department of Water and Sewerage is the regulatory arm of the water and sewerage sector to oversee the provision of safe drinking water and an efficient sanitation service is provided to all communities.

The establishment of a legal framework on the regulatory and quality control function will be pursued thus ensuring the best services are provided by the relevant agencies.
In addition, the department will embark on research and development works relevant to water and sewerage technologies.
Table of Contents PART A: FINANCIAL STATEMENT ....................................................................................................................... 1 36.1 Audit Opinion ........................................................................................................................................... 1 36.2 Statement of Receipts and Expenditure .................................................................................................. 2 36.3 Appropriation Statement.......................................................................................................................... 3 36.4 Statement of Losses ............................................................................................................................... 4 36.5 Trust Fund Account Statement of Receipts and Payments ..................................................................... 4 PART B: AUDIT FINDINGS..................................................................................................................................... 5 DEPARTMENT OF WATER AND SEWERAGE...................................................................................................... 5 36.6 Separate Trust Fund Account for Security and Retention Deposits ........................................................ 5 36.7 National Water and Sanitation Database ................................................................................................ 5 DEPARTMENT OF ENERGY .................................................................................................................................. 6 36.8 Main Trust Fund Account Balance – Department of Energy ................................................................... 6 36.9 Supply, Installation and Rehabilitation Works of Solar Home System ..................................................... 7 36.10 No Agreement with FEA ........................................................................................................................... 9 36.11 Accounting for Retention Sum .................................................................................................................. 9 PART A: FINANCIAL STATEMENT 36.1 Audit Opinion The audit of the 2014 accounts of the Ministry of Public Utilities and Energy resulted in the issue of a qualified audit report.
Ministry of Public Utilities & Energy Section 36: Page 1 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ____________________________ The basis of qualification was: 1.

An un-reconciled variance of $1,189,645.65 exists in the Department of Energy’s Main Trust Fund Account Statement of Receipts and Payments and the general ledger (FMIS) balance as at 31 December 2014.
As a result, I was not able to substantiate the correctness of the Main Trust Fund Account balance of $2,154,797 as at 31 December 2014.

2.

The Department of Water & Sewerage maintained security deposits totalling $1,161,883.81 as at 31 December 2014 in the Operating Trust Fund Account.

The security deposits were received from the contractors engaged in water and sewerage projects.

The Department did not maintain a Main Trust Fund Account and a separate bank account for the security deposits.
As a result, the Statement of Receipts and Payments for the security deposits were not disclosed in the Special Purpose Financial Statements.

36.2 Statement of Receipts and Expenditure The Ministry of Public Utilities and Energy collected revenue amounting to $11,239 and incurred total expenditure of $169,353,186 in 2014.
Table 36.1: Statement of Receipts and Expenditure for 2014 Particulars RECEIPTS State Revenue Recovery of OPR in Previous Years Commission Revenue Total State Revenue Agency Revenue Miscellaneous Revenue & Fees Total Agency Revenue TOTAL RECEIPTS EXPENDITURE Operating Expenditure Established Staff Government Wage Earners Travel & Communication Maintenance & Operations Purchase of Goods & Services Operating Grants & Transfers Special Expenditure Total Operating Expenditure Capital Expenditure Construction Purchases Grants & Transfers Total Capital Expenditure Value Added Tax TOTAL EXPENDITURE 2014 ($) 2013 ($) 224 1,984 2,208 9,031 9,031 11,239 --- The Ministry’s State Revenue increased by $1,031 or 87.6% compared to 2013 due to increase in commission revenue and OPR in previous years while the Agency Revenue decreased by $7,488 or 45.3% in 2014 compared to 2013 due to the reversal of stale cheques for the current year that was adjusted in the same current year.
Ministry of Public Utilities & Energy Section 36: Page 2 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ____________________________ The Ministry’s total expenditure increased by $42,301,885 or 33.3% in 2014 compared to 2013 as a result of the followings:  The Established Staff costs increased by $297,001 or 22.6% in 2014 compared to 2013.

This was mainly due to vacant posts being filled and 2014 pay rise for all civil servants as per PSC Circular No.
81/2013 dated 19/12/13  The Government Wage Earner costs increased by $10,832 or 8.3% in 2014 compared to 2013.

This was mainly due to increase in payment of overtime for drivers who are severely involved in the provision of services to project officers to monitor the capital projects and pay rise for all civil servants as per PSC Circular No.

81/2013 dated 19/12/13.

 The Travel and Communication cost increased by $22,363 or 17.8% in 2014 compared to 2013.
This was mainly due to increase in payment of travel expenses for Project Staffs travelling to inspect Capital Projects at Main Island and Maritime Zones.

 The purchase of Goods and Services increased by $86,789 or 31.9% in 2014 compared to 2013.

This was due to the increase in expenses relating to advertising, promotions and training.

 The Operating Grants and Transfers increased by $968,765 or 1.7% in 2014 compared to 2013, as there was an increase in operating grants for Water Authority of Fiji.
This is fully controlled and administered by the Department of Public Enterprise and Public Sector Reform.

 The Capital Construction increased by $10,233,961 or 450.7% in 2014 compared to 2013.

This was mainly due to the inclusion of Grid Extension Projects namely; Rural Power Grid Extension - Tavua/Korovou – TFZ; Sauniwaqa Grid Extension – Nakasi; Koronubu/Nabau Grid Extension, Lewarua/Nasivikoro Grid Extension and Nakasa/Uluivalili Secondary School Grid Extension under Department of Energy’s Budget.
 The Capital Grants and Transfers increased by $31,805,705 or 51.7% in 2014 compared to 2013 due to the increase in capital grant for Water Authority of Fiji.

 The Value Added Tax increased by $1,018,443 or 100.5% in 2014 compared to 2013.

The increase was due to the increase in expenditure in other operating SEGs.

36.3 Appropriation Statement The Ministry incurred actual expenditures totalling $169,353,186 in 2014 against the revised budget of $172,046,928 resulting in a savings of $2,693,742 or 1.6%.
Table 36.2: Appropriation Statement for 2014 SEG Item Established Staff Government Wage Earners Travel & Communication Maintenance & Operations Purchase Services Operating Grants & Transfers Special Expenditure Total Operating Costs of Goods & Capital Expenditure Construction Purchases Grants & Transfers 8 9 10 Budget Estimate ($) 1,694,430 162,155 135,000 232,000 401,600 58,596,225 1,542,181 62,763,591 Appropriation Changes ($) --- --- 18,010 31,990 --- Revised Estimate ($) Actual Expenditure ($) Lapsed Appropriation ($) 1,694,430 162,155 153,010 263,990 401,600 1,609,279 140,902 147,697 247,521 359,237 85,151 21,253 5,313 16,469 42,363 --- (50,000) --- 58,596,225 1,492,181 62,763,591 58,587,841 350,987 61,443,464 8,384 1,141,194 1,320,127 15,435,000 100,000 91,277,470 (2,411,046) --- 2,411,046 13,023,954 100,000 93,688,516 12,504,559 95,082 93,278,090 519,395 4,918 410,426 Ministry of Public Utilities & Energy Section 36: Page 3 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ____________________________ SEG Item Total Capital Expenditure Budget Estimate ($) 106,812,470 Appropriation Changes ($) --- Revised Estimate ($) 106,812,470 Actual Expenditure ($) 105,877,731 Lapsed Appropriation ($) 934,739 13 Value Added Tax 2,470,867 TOTAL EXPENDITURE 172,046,928 --- --- 2,470,867 2,031,991 438,876 172,046,928 169,353,186 2,693,742 36.4 Statement of Losses Loss of Money The Ministry recorded a loss of $6,144.20 through misappropriation of funds in the Department of Energy Trust
 Fund Account.
Loss (other than money) The Board of Survey for 2014 was carried out for all the sections of the Ministry.

The Board of Survey report is yet to be finalised and approved by Ministry of Finance as at the balance date.

36.5 Trust Fund Account Statement of Receipts and Payments The Department of Energy Main Trust Fund Account had $2,154,797 credit balance for the year 2014 compared to a credit balance of $1,623,366 in 2013.

Refer Table 36.3 for receipts and payments for the year ended 31/12/14.
Table 36.3: Trust Account Statement of Receipts & Payments for 2014 Particulars RECEIPTS Solar Security Deposits Hydro FEA Grid/House Wiring Connection Fees Biogas Performance Bond Diesel House Wiring and Maintenance Fees Total Receipts PAYMENTS Solar Maintenance FEA Grid/House Wiring FEA Connection Fees Performance Bond Release Diesel House Wiring and Maintenance Bio Gas Total Payments Net Surplus Balance as at 1 January Closing Balance as at 31 December 2014 ($) 2013 ($) Ministry of Public Utilities & Energy Section 36: Page 4 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ____________________________ PART B: AUDIT FINDINGS DEPARTMENT OF WATER AND SEWERAGE 36.6 Separate Trust Fund Account for Security and Retention Deposits Trust money is money that the agency is holding in trust.
Trust money is to be kept in a separate bank account and accounted for separately from “public money” and “other money”.

A bank account for public money, other money or trust money must only be established with the approval of the Chief Accountant, who must inform the bank of the agency of the officers authorised to operate the account.
The audit noted that the Department maintained security deposits totalling $1,161,883.81 received from the contractors engaged in water and sewerage projects together with the Departments’ Operating Trust Fund account number 1-41201-85999-860101.

As at 31/12/14, the Operating Trust Fund account had a balance of $1,161,883.81 as security deposits.

The audit noted that the Department did not maintain a separate Main Trust Fund bank account for the security deposits received from the contractors.
The security deposits received from the contractors were deposited into the Consolidated Fund account and recorded in the Operating Trust Fund account.

As a result, the Operating Trust Fund account was over stated by $1,161,883.81.

Recommendation The Department should liaise with the Ministry of Finance to open up a Main Trust Fund account for receipt and payment of security and retention deposit monies from the contractors.
Department’s Comments The Retention Security Deposits existed with the Department of Water & Sewerage (prior to the formation of the establishment of Water Authority of Fiji) was still in existence before the transition period.

This retention security deposit is a non-cash deposit received from the contractors but instead is the sum retained from the contract sum which is payable to the Contractor after completion of the project and its defect liability period.
The sum of $1,161,883.81 has been retained in Operating Trust under DWS which doesn’t have any budgetary provision under 2015 Budget.

Furthermore, the Ministry has not received any claims for payment of retention over the past 3 years hence recommend that the sum to be written off.

The Ministry has submitted a memorandum to the Ministry of Finance (MOF) requesting for write-off of retention security deposit for the Department of Water & Sewerage.
A copy of the same has also been forwarded to the Auditor General’s office for verification.

Ministry of Finance has confirmed via email that they will be compiling and submitting a write off submission to the Minister for Finance for the whole of Government before the end of 2015.

36.7 National Water and Sanitation Database The Department in line with the National Water Resource and Sanitation Policy worked on a plan to implement a National Water and Sanitation Database.
The objective of the database was to provide real time information about water and sanitation management in Fiji.

Ministry of Public Utilities & Energy Section 36: Page 5 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ____________________________ The Department paid $12,696 in 2014 to ITC services to develop National Water and Sanitation database.

The database was to have been implemented in July 2014.
The audit noted that ITC services completed the development of the database in June 2015.

The project was delayed by 11 months.

The audit further noted that the Department was not able to access the database due to connectivity limitations.

Hence the Department was not able to use the database.
According to the Technical Officer Water and Sewerage, (EDP Number 93165) the development of the database was delayed mainly due to the difficulty in identifying the different types of information available and integrating those information into the database.

The Department had to continuously amend the database to enable it to capture all the information available.

The findings indicate that the Department did not properly plan for the development of the database.
The database developed is not in use and resulted in the waste of public funds.

Recommendations The Department should:   carry out a feasibility study and properly plan for such works in future; and liaise with ITC to resolve the connectivity problem.

Department’s Comment The recommendation in the Audit report is duly noted and the department will ensure a feasibility study is carried out for any such work in the future.
In regards to the internet connection for the department, the ministry IT section is finalising works for the provision of internet for Department staffs.

Arrangements are currently in place for the relocation of the Department to Level 3 Nasilivata House which is now currently being refurbished.

The refurbishment works also include IT data and voice cabling hence this will solve the Internet connectivity problems that currently exist and enable access to the database server.
DEPARTMENT OF ENERGY 36.8 Main Trust Fund Account Balance – Department of Energy Within 5 days after the end of each month, the accounts officer shall prepare a trust reconciliation to reconcile trust account balances to the ledger total and the trust bank account.1 All bank accounts shall be reconciled monthly.
The bank reconciliation shall list the outstanding cheques and be signed and dated by the responsible officer.2 The Department of Energy’s Main Trust Fund account had a balance of $3,344,442.98 in FMIS general ledger while the Statement of Receipts and Payments had a balance of $2,154,797.33 as at 31/12/14.

The audit noted that the Department failed to reconcile the Statement of Receipts and Payments balances with the Main Trust Fund General Ledger (FMIS) balance as at 31/12/14.
1 Ministry of Works, Transport & Public Utilities Finance Manual 2012 Section 15.4.1 2 Section 39 (5) – Finance Instruction 2005 Ministry of Public Utilities & Energy Section 36: Page 6 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ____________________________ As a result the Department had an unreconciled variance of $1,189,645.65 between the Main Trust Fund account general ledger and the Statement of Receipts and Payments balance as at 31/12/14.
Refer to Table 36.4 below for details.

Table 36.4: Variances in Energy Main Trust Fund Account Balance as per Statement of Receipts and Payments ($) 2,154,797.33 Balance as per Main Trust Fund Ledger (FMIS) ($) 3,344,442.98 Variance ($) 1,189,645.65 Furthermore, the audit noted that the Department had prepared monthly bank reconciliation for the Main Trust Fund account.
However the audit failed to ascertain the accuracy and completeness of the bank reconciliation as the reconciliations were not prepared and audited prior to 2014.

The finding indicates that proper reconciliations were not carried out by the Department.

As a result audit was not able to ascertain that all receipts and payments had been accurately accounted for in the Main Trust Fund account.
Recommendations The Department should:   investigate these variances in the Main Trust Funds and take appropriate action; and strengthen internal control procedures in the Accounts Section to avoid such discrepancies.

Department’s Comments3 The Ministry has reconciled the variance of $1,189,645.65 from the inception of the trust fund account for the Department of Energy.

A sum of $1,026,976.66 has been identified as mispostings by the Ministry of Provincial Development over the years from 2009.
In consultation with the Ministry of Finance, Whole of Government (WOG) financial statements for 2014 have been completed and submitted to Minister for Finance for endorsement hence the above mispostings will be adjusted in 2015 financial year.

Furthermore, a remaining balance of $162,668.34 has been identified which were lodged into the Consolidated Fund Account (CFA) instead of Department of Energy Trust Fund Bank Account by Ministry of Provincial Development.
A submission has been made to the Ministry of Finance to transfer this sum from CFA to DOE Trust Account to cater for any refund; should there be a need to facilitate refund to the communities which may come forward with documentary evidence of their payments.
36.9 Supply, Installation and Rehabilitation Works of Solar Home System The GTB in its meeting held on 11/10/13 approved to award the Contract for installation of Solar Home Lighting System for rehabilitation works at Yasawa, Bua and Macuata to Powerlite Generators at a cost of $24,886.

The contract agreement was signed on 28/02/14.


3 Management comments has been edited for presentation purpose Ministry of Public Utilities & Energy Section 36: Page 7 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ____________________________ The contract was for the installation of Solar Home Lighting System for 76 households in Yasawa, 45 households in Bua and 22 households in Macuata.
According to the contract agreement, the Contractor was to be paid $14,931.60 or 60% of the contract amount after completing the wiring of houses in Yasawa and Bua.

However the Department paid 60% of the contract amount totalling $14,931.60 to the Contractor on 02/09/14 despite the inspection report dated 25/4/14 stated that 11 houses in Yasawa and 2 houses in Bua were not wired due to poor structure of the houses.
The Department could not provide the cost of wiring per household, hence the audit could not calculate the amount overpaid to the Contractor for not wiring all the houses in Yasawa and Bua.

The above finding indicated that payments were processed without considering the progress of the projects.

This indicates laxity on the part of the project management team and the Director of Energy.
Failure by the Department to properly monitor the installation works has resulted in overpayment to the Contractor and loss of public funds.

Recommendations The Department should take disciplinary action against officers responsible for laxity on their part despite the overpaid amount been recovered.
Department’s Comments Government Tender Board approved the award for CTN 74/2013 for Supply & Installation of Solar Home Lighting Systems to Powerlite Fiji Ltd at the cost of $166,676 for rehabilitation works at Yasawa, Bua and Macuata.

The total cost for supply amounting to $141,790 has been made by the Department to Powerlite.

For the installation works, the department has the retention component $1,244.30 and Performance Bond of $3,732.90 retained with the department totaling to $4,977.20.
The details of the Overpayment are as follows: Cost of overpayment = [Total Labor Cost for Installation / No.

of houses] * No.

of houses not installed Cost of overpayment = $14,058.75 / 143 * 13 = $1,278.07 (Unused Labor Cost for 13 houses) The sum of $1,278.07 will be deducted from the Contractor’s remaining balance of retention and Performance Bond amount before end of 3rd quarter, 2015.
Ministry of Public Utilities & Energy Section 36: Page 8 1st step scores (30%)2nd step scores (40%)3rd Step scores (20%)Total (90%)Supply Cost (FJ$VIP)Installation Labour Cost (FJ$VIP)Installation Transport Cost (FJ$VIP)Total Installation Cost (FJ$VIP)Total Supply and Installation (FJ$VIP)Scores based on Supply Installation Cost (10%)Powerlite Offer 130402090144,217.0214,058.7510,827.2524,886.00$169,103.025952Powerlite Offer 430402090141,790.0014,058.7510,827.2524,886.00$166,676.005951DOE estimate$276,390.505Average conforming price$167,889.51CTN 74_2013 Technical and Cost Evaluation Results SummaryCompanyRankingTable 4: Evaluation Results SummaryTotal Scores (100%)Technical EvaluationCost Evaluation REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ____________________________ 36.10 No Agreement with FEA The proper management of expenditure is fundamental to ensuring value-for-money in delivering services to the community.
As well, having cost-effective internal controls within the purchasing and payments system plays an important part in ensuring that waste of funds, over-expenditures and corruption do not occur.

All Government contracts must be prepared by the organization and should be vetted by the Solicitor General.4 The contract must clearly outline all the necessary terms and conditions of the agreement.
The GTB in its meeting held on 03/09/14 approved to award the contract for Grid Extension for the Lewarua/Nasivikoso Project to Fiji Electricity Authority (FEA) at a cost of $600,000 (VIP).

The Department made an advance payment of $600,000 on 17/11/14 to FEA for the Grid Extension Project.

The audit noted that the Department did not have a written contract agreement between Fiji Electricity Authority and the Department to carry out the Grid Extension for the Lewarua/Nasivikoso Project.
In addition, as at the date of audit5, FEA had not commenced with the Grid Extension Project.

The findings indicate that government’s interest are not fully protected which may result in loss of public funds.

In absence of a contract agreement the Department may not be able to take any action against FEA for delays or non-performance.
Recommendations The Department should:   Ensure that an agreement is entered into with FEA for the Grid Extension Project; and Instigate disciplinary action against officers responsible for making advance payment without a contract agreement.

Department’s Comments Your comments have been noted; the Grid Extension for the Lewarua/Nasivikoso Project is co-funded between DOE and FEA on 50% basis without increase in cost.
FEA is the Sole supplier in this case who reports to the Permanent Secretary for Ministry of Infrastructure & Transport.

The contract has been vetted by SGs office on 17/3/2015 and will be signed in due course.
The Ministry has put in place a Checklist for Major Project payments that is strictly adhered to and complies with the MoIT 2015 Finance Manual, Procurement Regulation, Finance Instructions and Financial Management Act 2004 and other Finance Circulars governing the financial operation of the department 36.11 Accounting for Retention Sum The Department should maintain a Trust Fund Account to deposit all retention sums deducted from the progress payments made to the Contractors where applicable.
4 PSC Circular No 23/2001 5 08/5/15 Ministry of Public Utilities & Energy Section 36: Page 9 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ____________________________ The Department carried out several capital projects during the year 2014.

The progress payment was made to the Contractors after subtracting the retention sum.

However, the amount deducted as retention sum was not deposited into a Trust Fund account and remained in the Department’s budget allocation.
In addition the retention sum held by the Department for the capital projects was not recorded in the FMIS general ledger.

Refer to Table 36.5 for examples of contracts for which retention sums were deducted and maintained within the budgetary allocation.
Table 36.5: Examples of Contract for which Retention Sums were deducted Contract Number CTN 76 CTN 101 CTN 160 CTN 74 CTN 100 CTN 144 Contract Installation of 1,200 Solar Home System Contract for FEA House Wiring projects Contract for FEA House Wiring projects Contract for Installation of Solar Home System in Yasawa, Bua and Macuata for Diesel Contract Underground Reticulation & House Wiring Project Contract for Seqaqa Dreketi FEA House wiring projects Contract Sum ($) 251,255.00 261,740.44 254,833.50 134,028.09 353,648.50 80,706.84 288,429.47 24,886.00 661,714.00 50,426.00 246,113.00 244,490.00 181,076.00 62,922.00 Percentage of Retention 5 10 10 10 10 10 10 5 10 10 10 10 10 10 Retention Amount ($) 12,562.75 26,174.04 25,483.35 13,402.81 35,364.85 8,070.68 28,842.95 1,244.30 $66,171.40 5,042.60 24,611.30 24,449.00 18,107.60 6,292.20 The above finding indicates that the proper procedures were not followed for retention sum held for the capital projects.
There is a risk that the Department may not have sufficient funds available when defect liability period ends and retention payments fall due.

Recommendations The Department should:   liaise with Ministry of Finance to open a separate general ledger allocation to record the retention funds and deposit the retention sum into the existing Department of Energy Trust Fund Account; or open a separate Trust Fund account to deposit the retention sum.
Ministry of Public Utilities & Energy Section 36: Page 10 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ____________________________ Department’s Comments We have noted your comments; the department will retain all the Retention Sum of the projects into Trust Fund Bank Account for projects whose retention sum is due in the next accounting period (2016).
Contract Number CTN 76 Contract Installation of 1,200 Solar Home System Contract Sum ($) 251,255.00 Percentage of Retention Retention Amount ($) Remarks 5 CTN 101 Contract for House FEA Wiring Projects CTN 160 Contract for House FEA Wiring Projects 261,740.44 10 254,833.50 10 134,028.09 10 353,648.50 10 80,706.84 10 288,429.47 10 CTN 100 Contract for 661,714.00 10 Diesel Underground Reticulation & House Wiring Project for CTN 144 Contract Seqaqa/ FEA Dreketi House Wiring Projects 50,426.00 10 246,113.00 10 244,490.00 10 181,076.00 10 62,922.00 10 12,562.75 The Retention component will be transferred to Trust Fund Bank Account in 2015 after completion of 90% of the said works 26,174.04 The Retention component will be transferred to Trust Fund Bank Account in 2015 after completion of 90% of the said works 25,483.35 The Retention component will be transferred to Trust Fund Bank Account in 2015 after completion of 90% of the said works 13,402.81 The Retention component will be transferred to Trust Fund Bank Account in 2015 after completion of 90% of the said works 35,364.85 The Retention component will be transferred to Trust Fund Bank Account in 2015 after completion of 90% of the said works 8,070.68 The Retention component will be transferred to Trust Fund Bank Account in 2015 after completion of 90% of the said works 28,842.95 The Retention component will be transferred to Trust Fund Bank Account in 2015 after completion of 90% of the said works 66,171 The Retention component will be transferred to Trust Fund
 Bank Account in 2015 after completion of 90% of the said works 5,042 The Retention component will be transferred to Trust Fund Bank Account in 2015 after completion of 90% of the said works 24,611 The Retention component will be transferred to Trust Fund Bank Account in 2015 after completion of 90% of the said works 24,449 The Retention component will be transferred to Trust Fund Bank Account in 2015 after completion of 90% of the said works 18,107 The Retention component will be transferred to Trust Fund Bank Account in 2015 after completion of 90% of the said works 6,292 The Retention component will be transferred to Trust Fund Bank Ministry of Public Utilities & Energy Section 36: Page 11 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ____________________________ Contract Number Contract Contract Sum ($) Percentage of Retention Retention Amount ($) Remarks Account in 2015 after completion of 90% of the said works The Ministry has put in place a Checklist for Major Project payments that is strictly adhered to and complies with the MoIT 2015 Finance Manual, Procurement Regulation, Finance Instructions and Financial Management Act 2004 and other Finance Circulars governing the financial operation of the department.
Ministry of Public Utilities & Energy Section 36: Page 12 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ________________________ Section 37 Government Shipping Services Programme Statement The Government Shipping Services is responsible for the promotion and in accordance with government policies and priorities, the national need for sea transportation.
facilitation, This is through the provision of shipping and marine navigational aids services, meeting Fiji’s obligation to international maritime conventions and the maritime community.
In recognition of the inter relationship between sea transportation and the wider economy, these services play an important role in the development of urban, rural islands and coastal economies on a sustainable basis aimed at maximising the contribution of the respective sectors to the national economy, thereby improving the standards of living of all people throughout Fiji.
Table of Contents PART A: FINANCIAL STATEMENTS ..................................................................................................................... 1 37.1 Audit Opinion ........................................................................................................................................... 1 37.2 Statement of Receipts and Expenditure .................................................................................................. 1 37.3 Appropriation Statement.......................................................................................................................... 2 PART A: FINANCIAL STATEMENTS 37.1 Audit Opinion The audit of the 2014 accounts of the Government Shipping Services resulted in the issue of an unqualified audit report.
37.2 Statement of Receipts and Expenditure The Department collected revenue totalling $118,191 and incurred a total expenditure of $17.8 million in 2014.
Table 37.1: Statement of Receipts and Expenditures for 2014 Description State Revenue Fare and Freight Charges Miscellaneous TOTAL REVENUE Government Shipping Services 2014 ($) 2013 ($) 89,060 29,131 118,191 72,392 3,044 75,436 Section 37: Page 1 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ________________________ Description 2014 ($) 2013 ($) Operating Costs Established staff Government Wage Earners Travel and communications Maintenance & operations Purchase of goods and services Operating grants and transfers Special Expenditure Total Operating Costs Capital Expenditure Capital Construction Capital Purchases Total Capital Expenditure Value Added Tax TOTAL EXPENDITURE 976,508 1,753,139 45,173 3,787,972 208,795 --- 86,087 6,857,674 263,982 8,616,154 8,880,136 2,034,496 17,772,306 851,437 1,672,799 100,376 2,619,394 169,027 1,092,570 --- 6,505,603 874,847 4,877,347 5,752,194 735,065 12,992,862 The Department recorded an increase in revenue by 57% compared to 2013.
This is attributable to increase in fare and freight charges by 23% and increase in miscellaneous revenue due to the reversal of stale cheques and voided per diem allowances of $17,418.

Overall total expenditure increased by $4.8 million or 37% compared to 2013 and was primarily due to the following:  Filling of vacant positions and pay rise in 2014 for civil servants as per PSC Circular No.

81/2013 led to the increase in expenditures for Established Staff and Government Wage Earners.
 Higher budget in 2014 resulted in increased maintenance and operations expenses by 45%.

The expenses were incurred for the repair and maintenance of vessels, operational equipment and for purchases of fuel and oil.

 The special expenditure incurred relate to consultancy fees for the Job Evaluation Exercise.

Funds were vired from SEG 2 based on Cabinet Decision No.

291 of 03/10/2013.

 Capital Purchase increased by $3.7 million or 77%.
Two vessels, namely the MV Sigavou and MV Vunilagi, were procured in 2014.

 Value Added Tax increased by 177% as a result of proportional to increase in expenditures.

The budget for the Franchise Shipping Scheme was allocated to the Transport Planning Unit under the Ministry of Works and Transport (Head 40), thus the notable decrease in Operating Grants and Transfers for 2014.
37.3 Appropriation Statement The Department incurred expenditures totalling $17.8 million in 2014 against a budget of $20.2 million resulting in a savings of $2.4 million or 12%.

Details of expenditures against the budget estimates are provided in Table 37.2 below.
Government Shipping Services Section 37: Page 2 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ________________________ Table 37.2: Appropriation Statement for 2014 SEG Item 1 Established staff 2 Government Wage Earners 3 Travel and communications 4 Maintenance & operations 5 Purchase of goods and services 7 Special Expenditure Total Operating Costs 8 Capital Construction 9 Capital Grant & Transfers Total Capital Expenditure Budget Estimate ($) 1,358,402 2,925,488 44,757 3,845,500 268,208 --- 8,442,355 500,000 9,150,000 9,650,000 13 Value Added Tax TOTAL EXPENDITURE 2,071,300 20,163,655 Changes ($) --- Revised Estimate ($) 1,358,402 (100,000) 2,825,488 68,757 (24,000) 3,821,500 268,208 --- 100,000 100,000 8,442,355 --- 24,000 Actual Expenditure ($) 976,508 1,753,139 45,173 3,787,972 208,795 86,087 6,857,674 500,000 9,150,000 9,650,000 263,982 8,616,154 8,880,136 Lapsed Appropriation ($) 381,894 1,072,349 23,584 33,528 59,413 13,913 1,584,681 236,018 533,846 769,864 2,071,300 20,163,655 2,034,496 17,772,306 36,804 2,391,349 --- --- --- --- --- Government Shipping Services Section 37: Page 3 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ____________________________ Section 38 Fiji Roads Authority Grant Role and Responsibilities The Fiji Roads Authority is a new corporate entity established in January 2012 to manage all of the roads and public jetties in Fiji comprising of 11,115 km roads (note that the full extent of cane access and farm access roads is not yet
 fully determined), 936 Bridges (note that the full extent of bridge stock, particularly on cane and farm access roads is yet to be fully determined) and 47 public jetties.
Table of Contents PART A: FINANCIAL STATEMENT ....................................................................................................................... 1 38.1 Audit Opinion ........................................................................................................................................... 1 38.2 Statement of Receipts and Expenditure .................................................................................................. 1 38.3 Appropriation Statement .......................................................................................................................... 2 PART A: FINANCIAL STATEMENT 38.1 Audit Opinion The audit of the 2014 financial statement of the Fiji Roads Authority Grant resulted in the issue of an unqualified audit report.
However, Management attention was drawn to the matters below.

Part 4 of the grant agreement between the Government of Fiji and the Fiji Roads Authority (FRA) on the transfer, utilisation and accountability of the 2014 Operational and Capital Grants requires that FRA to provide the Office of the Prime Minister updated forecasted monthly cash flow requirements for the rest of the year, quarterly reports of detailed statement of expenditure and written summary of the work completed to date.
The Office of the Prime Minister was not able to furnish to audit these reports required under Part 4 of the FRA Grant Agreement.

These acquittals were later provided to audit after the issue of the audit report.

The audit was carried out on the Grant disbursed from the Office of the Prime Minister and direct payments authorised by the Ministry of Finance to the contractors.

The audit of the Fiji Roads Authority is a separate audit.
38.2 Statement of Receipts and Expenditure The total expenditure of $520,590,365 was disbursed in 2014.

Refer Table 38.1 for details.
Table 38.1: Statement of Receipts and Expenditure for 2014 Description EXPENDITURE Operating Expenditure Operating grants and transfers Total Operating Expenditure Fiji Roads Authority Grant 2014 ($) 2013 ($) 19,282,981 19,282,981 22,326,300 22,326,300 Section 38: Page 1 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015 ____________________________ Description Capital Expenditure Capital grants and transfers Total Capital Expenditure TOTAL EXPENDITURE 2014 ($) 2013 ($) 501,307,384 501,307,384 520,590,365 282,143,718 282,143,718 304,470,018 Total expenditure increased by $216,120,347 or 71% in 2014 due to the increase in the expenditure for capital grants and transfers.
38.3 Appropriation Statement The disbursed grants to FRA and direct payments to FRA contractors totalled $520,590,365 against the revised budget of $509,057,981 resulting in over-expenditure of $11,532,384 or 2%.
Details of expenditures against the budget estimates are provided in Table 38.2 Table 38.2: Appropriation Statement for 2014 SEG Item Budget Estimate ($) Changes ($) Revised Estimate ($) Actual Expenditure ($) Lapsed Appropriation ($) Operating Expenditure Established Staff Government Wage Earners Travel & Communication Maintenance & Operations Purchase of Goods & Services Operating Grants & Transfers Special Expenditure Total Operating Costs Capital Expenditure Capital Construction Capital Purchase Capital Grants & Transfers Total Capital Expenditure Value Added Tax TOTAL EXPENDITURE --- --- --- --- --- 19,282,981 --- 19,282,981 --- --- 454,775,000 454,775,000 --- 474,057,981 --- --- --- --- --- --- --- --- --- --- --- --- --- 19,282,981 --- 19,282,981 --- --- --- --- 35,000,000 489,775,000 35,000,000 489,775,000 --- 35,000,000 509,057,981 --- --- --- --- --- --- 19,282,981 --- 19,282,981 --- --- 501,307,384 501,307,384 --- 520,590,365 --- --- --- --- --- --- --- --- --- --- (11,532,384) (11,532,384) --- (11,532,384) In 2014, the Cabinet approved the re-deployment of $35,000,000 from various Ministries and Departments to the Fiji Roads Authority Capital Grant and Transfers.
The over-expenditure of $11,532,384 was incurred on Road projects funded directly by the lender to the contractors after Ministry of Finance approvals.

Fiji Roads Authority Grant Section 38: Page 2