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ACCOUNTABILITY IN THE PUBLIC SECTOR THROUGH QUALITY AUDIT SERVICES REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS Volume 2 Audit Report on Government Ministries and Departments - 2008 PARLIAMENTARY PAPER NO 11 OF 2014 ACCOUNTABILITY IN THE PUBLIC SECTOR THROUGH QUALITY AUDIT SERVICES REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS VOLUME 2 AUDIT REPORT ON GOVERNMENT MINISTRIES AND DEPARTMENTS - 2008 File: 102 30 September 2009 Commodore Josaia V. Bainimarama Prime Minister & Minister for Finance Office of the Prime Minister Government Buildings SUVA Dear Commodore Bainimarama AUDIT REPORT FOR THE YEAR ENDED 31 DECEMBER 2008 – VOLUME 2 In accordance with section 7 (7) of the State Services Decree 2009, I am pleased to transmit to you my audit report on the Government of the Republic of Fiji Islands for the year ended 31 December 2008.
Tevita Bolanavanua AUDITOR-GENERAL VOLUME 2 1.

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Office of the President Office of the Prime Minister and Public Service Commission Office of the Attorney General and the Solicitor General Ministry of Finance Ministry of Provincial Development, Indigenous and Multi-Ethnic Affairs Ministry of Defence, National Security and Immigration Ministry of Labour, Industrial Relations and Employment Ministry of Foreign Affairs, International Co-operation and Civil Aviation Elections Office Judiciary Legislature Office of the Ombudsman REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Section 1 Office of the President Role and Responsibilities The Office of the President for the Republic of Fiji was established in 1987 and assumed the roles and responsibilities that were previously carried out by the Office of the Governor-General.
The Executive Authority of the State is vested in the President who is the Head of State and symbolises the unity of the State.

The President is also the Commander- in-Chief of the Fiji Military Forces.

In addition to the Constitutional and Ceremonial roles of both the Head of State and the Vice-President, the Office of the President is taking a supporting role in the enhancement and promotion of National Reconciliation to bring unity among the different ethnic groups in Fiji.
General Administration Support service primarily to personally look after the President and Vice President and their immediate families daily living in the following areas:    administrative and ceremonial support in the Office of the President and the Vice President; to ensure that the roles and functions of the President and Vice President under the legislation are carried out; provision allocated in the budget programme for the year is to facilitate the proper administration of the President’s and Vice President’s Offices and the execution of staff responsibilities.
The allocations also cater for the appropriate maintenance and general upkeep of all facilities belonging to Government House.

Security Provision – close consultation and liaison with the Commander – Fiji Military Forces and the Commissioner of Police in the implementation of the Security Service; such services includes protection of life element, protection of premises (Government House) and Government properties, protection of Their Excellencies during internal and international travels.
Table of Contents 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 FINANCIAL STATEMENT ........................................................................................................................ 2 Audit Opinion .................................................................................................................. 2 Statement of Receipts and Expenditures....................................................................... 2 Appropriation Statement ................................................................................................ 3 Statement of Loss .......................................................................................................... 3 Financial Statements...................................................................................................... 4 Non-Preparation of Reconciliations ............................................................................... 4 Revolving Fund Account - Miscellaneous ...................................................................... 5 VAT Reconciliation ......................................................................................................... 6 FNPF Reconciliation ...................................................................................................... 6 AUDIT FINDINGS .................................................................................................................................... 7 1.10 Medical Expenses for First Lady, Mrs Iloilo ................................................................... 7 Audit Follow-Up on Outstanding Water Bills .................................................................. 7 1.11 Excessive Annual Leave Carried Forward ..................................................................... 8 1.12 Office of the President Section 01: Page 1 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Appendix 1.1: FNPF Reconciliation ......................................................................................... 10 FINANCIAL STATEMENT 1.1 Audit Opinion The audit of the 2008 accounts of the Office of President resulted in the issue of a qualified audit report.
The qualifications are as follows: 1) The Office has not provided the following contrary to Finance Instruction 82(1) a) b) Statement of Output Cost; A Trust Fund Account Statement of Receipts and Payments.

The Financial Management Information System shows that the Office as at 31/12/08 has operating trust funds balance totalling $9,828.25.

2) There is a significant variance in the FNPF reconciliation totalling $208,813 when compared to the accounts as at 31/12/08.
1.2 Statement of Receipts and Expenditures The Office of the President incurred a total expenditure of $1,307,184 in 2008 compared to $1,533,061 in 2007.
Table 1.1: Statement of Receipts and Expenditures For 2008 Description RECEIPTS State Revenue Agency Revenue TOTAL REVENUE EXPENDITURES Operating Established Staff Unestablished Staff Travel & Communication Maintenance & Operations Purchase of Goods & Services Operating grants & transfers Special Expenditure Total Operating Expenditure Capital Expenditure Office of the President 2008 $ 2007 $ 0 0 0 0 0 0 512,200 236,318 257,579 201,184 35,214 0 1,695 1,244,190 526,448 264,451 245,056 193,948 46,914 0 7,995 1,284,812 Section 01: Page 2 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Description Capital Purchases Total Capital Expenditure 2008 $ 10,889 10,889 2007 $ 0 0 Value Added Tax 52,105 248,249 TOTAL EXPENDITURES 1,307,184 1,533,061 The total expenditure decreased by $225,877 or 15% in 2008 when compared to 2007 due to the vacant position of the Vice President and one senior secretary during the year and non-provision for the Vice President’s traditional herald and that VAT was not charged on salaries and wages in 2008.
1.3 Appropriation Statement The Office of the President incurred expenditures totalling $1,307,184 in 2008 against the budget of $1,569,300 resulting in a savings of $262,116 or 17%.
Details of expenditures against the budget estimates are provided in Table 1.2 Table 1.2: Appropriation Statement for 2008 SEG Item Established Staff Unestablished Staff Travel & Communication Maintenance & Operations Purchase of Goods & Services Special Expenditure Total Operating Costs Capital Expenditure Purchases Total Capital Expenditure 13 Value Added Tax Budget Estimate $ 618,800 268,500 257,000 253,200 68,700 13,100 1,479,300 14,000 14,000 76,000 TOTAL EXPENDITURE 1,569,300 1.4 Statement of Loss Changes $ 0 0 15,000 (8,000) (7,000) 0 Revised Estimate $ 618,800 268,500 272,000 253,200 60,700 6,100 1,479,300 Actual Expenditure $ 512,200 236,318 257,579 201,184 35,214 1,695 1,244,190 0 0 0 0 14,000 14,000 10,889 10,889 76,000 52,105 1,569,300 1,307,184 Carry – Over $ 0 0 0 0 0 0 0 0 0 0 0 Lapsed Appropriation $ 106,600 32,182 14,421 52,016 25,486 4,405 235,110 3,111 3,111 23,895 262,116 The Office did not submit a Statement of Loss for audit.
Office of the President Section 01: Page 3 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ 1.5 Financial Statements Commencing 2006 financial year, each annual report must include financial statements which are prepared and signed in accordance with these Instructions, audited by the Auditor General, and accompanied by an audit opinion prepared by the Auditor General.1 The draft financial statements must be submitted to the Auditor-General by 31 March in the following year, or within such other time as agreed to with the Auditor-General.2 The Office of the President submitted its Agency Financial Statements for audit on 22/04/09.
Audit noted that the Agency Financial Statement submitted by the Office was not prepared in accordance with the requirements of Section 82 and Schedule 1 of the Finance Instructions 2005.The draft agency Financial Statement submitted did not include a Statement of Output cost and Trust Fund Account Statement of Receipts and Payments.
Non-compliance with Finance Instructions in the preparation of the financial statements has restricted the scope of the audit and will be included in the audit report as qualifications.

Recommendation The Office should ensure that the requirements of the Finance Instructions are complied in regards to the preparation of the Agency Financial Statements.
Management Comments The Office had difficulties accessing the Trust Fund Account in the new FMIS hence we were not able to prepare a statement to that effect.

After consultations with the PM’s Office Accounts Section, the Office can now access and print a monthly Trust Fund Account from the system.

We are now in a process of reconciling these accounts to be included in the Agency Financial Statement.

The Statement of Output Costs is a new concept in the preparation of the Agency Financial Statement.
This Statement was over looked during the submission of the 2008 Agency Financial Statement.

The comment of the Auditor is noted and Management will ensure that the requirements of the Financial Instruction are complied with in regards to the preparation of the Agency Financial Statement.
1.6 Non-Preparation of Reconciliations Within 5 days after the each month, the clerical Officer shall prepare a trust reconciliation to reconcile trust account balances to the ledger total and the trust bank account.3 The Office failed to carry out monthly reconciliations of its Trust Fund accounts in 2008, as such the audit could not confirm the accuracy of the trust fund balance of $9,828.25 as shown in Appendix 23B and the (FMIS) general ledger.
Audit verification to the FMIS revealed that the Office maintains twenty two operating Trust Fund accounts.

These accounts include dormant accounts which should be identified and closed.

The above issue has been raised in the previous audit reports without any action taken by the Office.

The non closure of dormant accounts could result in wrong postings.
1 Finance Instructions 2005 – 81 (2) 2 Finance Instructions 2005 – 81 (3) 3 Presidents Office Finance Manual 2005, 15.4.1 Office of the President Section 01: Page 4 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Recommendations  The Office should ensure compliance with Finance Instructions and carry out monthly reconciliations of all its trust fund accounts.
 The accuracy of the Trust Fund balance of $9,828.25 should be confirmed and cleared accordingly.

 All dormant Trust Fund accounts should be closed.

Management Comments This issue has been a long outstanding matter with the Office of the President and Management is in contact and consultation with the PM’s Office Accounts Section regarding the preparation of Trust Fund Account.

The Agency is now able to access these accounts and is in the actual process of reconciling the accounts.
At the same time dormant accounts are carefully checked and appropriate adjustment and action is taken to correct and make good these accounts by December 2009.
1.7 Revolving Fund Account - Miscellaneous A travelling officer shall recoup the travel advance within seven days of completing travel by submission of an acquittal report with supporting documents.4 If an advance has not been fully expended, the travelling officer must repay the balance within seven days of completing travel.5 Upon clearance of the advance, the accounts officer shall update the debtors register, offset the advance account and debit the appropriate expenditure account.6 The Office failed to prepare its revolving fund account monthly reconciliations for 2008 as such audit could not substantiate the closing balances reflected in the FMIS and Appendix 19.
The balance of the revolving fund accounts as at 31/12/08 amounted to $109,663.03.

The non-preparation of reconciliation has been continuously raised in the audit reports without any improvement noted.

Recommendations  The Office should conduct its reconciliation regularly together with supervisory checks carried out on the reconciliation prepared.

 The Office should seek the assistance of the Ministry of Finance in the preparation of reconciliations.
Management Comments The comments of the Auditor are noted and Management is now taking a more positive action in the matter Management will reconcile all these Advance Accounts and take appropriate action where necessary.

Consultation and assistance from the PM’s Accounts Section is an on going thing where our staffs are trained on the job in the reconciliation process.
4 Office of the President – Finance Manual section 10.1.11 5 Office of the President – Finance Manual section 10.1.12 6 Office of the President – Finance Manual section 10.1.15 Office of the President Section 01: Page 5 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ 1.8 VAT Reconciliation Subject to the provision of the Vat Decree 1991, the tax shall be charged in accordance with the provisions of this Decree at the rate of twelve and a half percent on the supply (but not including an exempt supply) in Fiji of goods and services, by a registered person in the course or furtherance of a taxable activity carried on by that person, by reference to the value of that supply.7 Output VAT is payable to the Commissioner of Inland Revenue for the supply of all goods and services with the exception of zero rated and exempted supplies.
Payments effected by government departments for goods and services are thus subjected to VAT.8 The scope of audit of VAT records was limited as the Office did not maintain copies of monthly VAT Returns.

As a result, audit could not substantiate the accuracy of VAT payments during the year.

Recommendations  The Office should ensure that records pertaining to VAT are properly maintained and regular reconciliation carried out to ensure its correctness.
 Regular checks on the preparation of VAT records should be carried out to ensure returns are prepared and submitted to FIRCA on time.

Management Comments The comment of the Auditor is noted and it must be stressed that the Office has been paying the VAT due on a monthly basis.

The VAT payment voucher is prepared and sent to the PM’s Office Accounts Section for payment.

The VAT chq together with the VAT return are sent over to the Commissioner for Inland Revenue.
Again the reconciliation of this account requires the training, experience and expertise which the President’s Office is lacked of in terms of staff compliment.

Management will do its best to ensure that all records pertaining to VAT are properly kept and appropriate returns sent to FIRCA.

1.9 FNPF Reconciliation The current rate of contribution (effective 1st July, 1999) is 16 cents on each dollar earned, with the employer and employee each contributing 8cents each.
Contributions that are paid after the due date carry a surcharge at a rate of 2%.

Failure to pay contributions on the due date is a serious and is a punishable offence.

9 A reconciliation of FNPF contributions against salaries and wages reported in the Financial Statements revealed variances of $208,817.

There were no explanations provided for the above variance.

Refer to Appendix 1.1 for details.


Recommendation The Office should identify the errors and make necessary adjustments to reconcile the two records.
7 Value Added Tax Decree 1991 4th edition revised to 30/04/04 – section 15 (1) 8 Finance Circular No 9/95 9 www.fnpf.com.fj –official web site address Fiji National Provident Fund Office of the President Section 01: Page 6 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Management Comments As mentioned in 1.8, this important function requires training and experience of staff compliment to actual do the reconciliation process.
As to date Management has not been able to completely and accurately compile a Fiji National Provident Fund Reconciliation Statement.

When this Statement is dully completed then only will the variances as stated by the Auditor be fully explained and appropriately adjustment taken.

Management is taking a proactive attitude and action in the case of reconciliation of all Underline Accounts with the view of verifying, justifying and being transparent in all its accounting and financial transactions.
AUDIT FINDINGS 1.10 Medical Expenses for First Lady, Mrs Iloilo Accounting Officers and all other officers responsible for expenditure shall at all times exercise proper economy in the expenditure of public funds and thereby ensure that proper value is obtained for all sums spent.
The President of the Republic of Fiji Islands is entitled to medical expenses locally and abroad.10 A sum of $6,690.42 (Chq # 031181) was paid on the 8/04/08 to the Suva Private Hospital as medical bills for the First Lady Adi Salaseini Kavu Uluivuda.

However, medical benefits to be provided to the first lady were not specified in any legislation.
Discussion held with the Senior Administrative Officer revealed that the payment was made on similar grounds previously when the Office had paid medical expenses totalling $4,395.05 for the late Former First Lady.

Decision whether to pay or not must not be based on past practises but on what was stated in the written legislations entitled to the President.

Recommendation The Office should request for an amendment to the Presidents entitlement that also covers the benefits of the First Lady.
Management Comments The comments of the Auditors are noted and management is aware of the need to request amendments to the President’s Entitlements with relevant authorities.

In this case a precedent has been set by the late former First Lady as revealed by the former Official Secretary and security personnel who accompanied the late former First Lady on a medical trip to New Zealand.
Management will do it’s best to take up the issue with relevant authorities to clear up the matter and ensure transparency.

1.11 Audit Follow-Up on Outstanding Water Bills Wherever possible, an agency must process and pay accounts by the due date.11.
10 Cabinet Decision 133 of 13th April 1999 11 Finance Instruction 2005 Section 19 (3) Office of the President Section 01: Page 7 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ The Office of the President has accumulated arrears of water rates totaling $29,974.32 as at 31 December 2007.
However upon verification from Water Rates Department with accountant Mrs. Prasad dated 31/07/09, the Office had made an attempt to clear their arrears but few more accounts were identified.

Third party confirmation from billings sections officer, Mereseini Cabelawa, confirmed the outstanding balance amounted to $38,742.95 as at 13/07/09.

Refer to Table 1.3 for details.
Table 1.3: Outstanding Water Bills Meter Number KQ-6 10 KQ-6 15 KF-12-33 KF-1-57 SA-I-86 Total Amount Due as at 31/12/07 ($) 25,432.56 Amount Due as at audit date 13/07/09 ($) 24,332.86 151.12 No information given No information given No information given 29,974.32 312.83 11,748.84 1,097.43 1,250.99 38,742.95 Comments obtain from Water Rates Leaking Meter from swimming Pool accumulated from previous years No explanation obtained Fountain Vice Presidents Resident Presidents Bure – Deuba It was indicated that the arrears have been brought forward from 1990’s.
Verification with the department of water rates revealed that the arrears of $24,332.86 from meter number KQ-6-10 was due to a leakage from the unused swimming pool.

The Office was supposed to submit a leakage form to the water rates department in order get a rebate on the accounts.

As at the date of audit12 this has not and the outstanding balance keeps continues to accumulate.
Recommendations  The Office should liaise with the Accountant at Water Rates Office, to get a rebate on the accounts as a result of the leakage.

 The Office should ensure that accounts are settled before the due date to avoid unnecessary expenditure.

 Any damage or repair to water pipes or taps must be reported immediately and necessary action must be taken to avoid losses.
Management Comments The findings of the Auditor are noted and Management is currently continuing with its repayment of this large water bill [$38,742.95].

The current charges on the water bill are being paid on a monthly basis.

It is only the arrears that we have difficulties with due to funds allocated for payment of water bills per year.

[We have an annual provision of $15,023 pa].

In respect to the leakages and seeking rebate Management had attempted this but to no avail.
Management has taken another way of handling this issue through stopping the use of the pool and fountain [located at the main gate of GH] to save water and reduce costs.

It must be understood that the water system within Government house has out lived it’s useful life and needs repairs or replacement altogether as only this way all leakages can be got ridden off.
In the meantime Management will try to again seek rebate from the Water Rates Office and continue to clear its current bills with annual funds allocated for such purpose.

1.12 Excessive Annual Leave Carried Forward Annual Leave shall normally be taken when due.
Officers may be allowed to carry over up to a maximum of ten working days leave entitlement from one leave year to the next.13 12 August 14, 2009 13 General Order 705 Office of the President Section 01: Page 8 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ There should be no reason or justification for the accumulation of leave beyond what is permissible, if leave were properly administered.14 Audit noted that some officers had excessive annual leave carried forward from previous years to 2008.
Refer to the Table 1.4 for examples: Table 1.4: Excessive Annual Leave Officer Leave Year Leave Balance as at November, 2008 Annual Salary ($) Leave Liability ($) Mr. R Nacewa Mr. S Turagabeci Mr. J T Vula Ms. M Blakelock Mr. S Delai Ms. N Kanabicibici Mr. E Tubuitamana Mr. A Bulavakaca Mr. A Ratumaitavuki Total 02/09/08-01/08/09 12/08/08-11/08/09 19/10/08-18/10/09 05/11/08-04/11/09 10/07/08-09/07/09 12/12/08-11/12/09 05/11/08-04/11/09 23/09/08-23/09/09 07/03/08-07/03/09 36 49 116 57 86.5 33.5 210 36 36 73,757 39,616 33,154 22,778 20,335 22,778 15,689 10,823 9,808 7,294.65 5,332.92 10,565.56 3,566.88 4,832.36 2,096.33 9,051.35 1,070.40 970.02 44,780.47 The above indicate that the Office lacked proper administration of the leave to ensure that officers take leave when due.
The proper administration of leave is a mode of internal control which ensures rotation of duties and that the works of those officers on leave are checked by other officers.

Recommendations  Officers should be encouraged to take leave when due or even on a piece meal basis considering the service delivery of the Office in order to avoid unnecessary payment of leave compensation.

 Office should comply with circulars issued from time to time regarding the administration of leave.
Management Comments The excessiveness of leave for officers is due to the fact that there is no relieving appointment to ensure continuity of services to Their Excellencies.

Management has allowed staff to take their leave on a piece meal basis but it seems that the situation has remained.

The comments of the Auditor are noted and management will ensure that leave is taken when due and regulations complied with at all times.
14 PSC Circular 09/2003 Office of the President Section 01: Page 9 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Appendix 1.1: FNPF Reconciliation Details (a) Total FNPF against salaries and wages for 2007 FNPF as per financial statement Less: FNPF for December 2007 Add: FNPF for December 2008 Gross pay subject to FNPF ($34,809 divided by 0.08) (b) Salaries and wages for 2007 subject to FNPF: Salaries, wages and allowances as per financial Statement Less: Salaries, wages and allowances not subject to FNPF Unreconciled Variance ( $ ) 33,917 7,456 26,461 8,348 34,809 435,113 748,518 104,588 643,930 208,817 Office of the President Section 01: Page 10 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Section 2 Office of the Prime Minister and Public Service Commission Role and Responsibilities Office of the Prime Minister The Prime Minister, the purpose of the Office of the Prime Minister and Cabinet is to provide secretariat services to the Prime Minister to facilitate his role and administrative support services as chair of the Cabinet and leader of the Government including the discharge of his statutory and policy responsibilities.
In this regard, the Office of the Prime Minister and Cabinet ensures and facilitates effective and speedy decision making by the Executive Government through the Cabinet.

It also oversees and coordinates the implementation of Cabinet decisions by Government across Ministry and Departmental lines.
Where there are conflicts over policy advice and opinions offered by different parts of the public service, the Prime Minister’s office facilitates consensus building as part of its policy coordination responsibilities.
In addition, the Office of the Prime Minister is also responsible for the administration of Parliamentary Pension Allowance, the coordination of special assistance and affirmative action for indigenous Fijians/Rotumans and other minority groups and the provision of private and domestic services to the Prime Minister.

Public Service Commission The purpose of the Public Service Commission is to promote service delivery in the public sector.
The PSC has the statutory powers to review the machinery of Government in order to ensure its efficiency and effectiveness in fulfilling Government’s public sector management objectives.

The PSC also has powers to be the central personnel authority.

In facilitating the productivity of the civil service, major job evaluation exercise was effected from 2004.
Table of Contents 2.1 2.2 2.3 2.4 2.5 2.6 CONSOLIDATED FINANCIAL STATEMENT .......................................................................................... 2 Audit Opinion .................................................................................................................. 2 Statement of Receipts and Expenditures....................................................................... 2 Statement of Output Costs ............................................................................................. 3 Appropriation Statement ................................................................................................ 3 Statement of Losses ...................................................................................................... 4 Trust Account Statement of Receipts and Payments .................................................... 4 AUDIT FINDINGS .................................................................................................................................... 4 Financial Statements...................................................................................................... 4 2.7 Over-Expenditure ........................................................................................................... 5 2.8 Drawings Account .......................................................................................................... 7 2.9 2.10 Trust Fund Account
 ........................................................................................................ 8 2.11 Revolving Fund Account .............................................................................................. 10 FNPF Reconciliation .................................................................................................... 10 2.12 VAT Reconciliation ....................................................................................................... 11 2.13 Section 02: Page 1 Office of the Prime Minister and Public Service Commission REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ OFFICE OF THE PRIME MINISTER ..................................................................................................... 12 2.14 Manual Payments of Salaries ...................................................................................... 12 PUBLIC SERVICE COMMISSION ......................................................................................................... 13 2.15 Outstanding Levy Payments to TPAF .......................................................................... 13 2.16 SCHOLARSHIP UNIT .................................................................................................. 14 2.17 OFFICE ACCOMODATION ......................................................................................... 20 POOL QUARTERS
20 POOL QUARTERS ...................................................................................................... 22 2.18 Appendix 2.1: Statement of Output Costs................................................................................ 27 Appendix 2.2: Trust Account for 2008 - Chinese Grant ........................................................... 31 Appendix 2.3: FNPF Reconciliation .......................................................................................... 32 Appendix 2.4: VAT Reconciliations ........................................................................................... 33 Appendix 2.5: Terminated Sponsorship ................................................................................ 35 Appendix 2.6: Government Rented Offices as at 31/12/08 ................................................... 35 CONSOLIDATED FINANCIAL STATEMENT 2.1 Audit Opinion The audit of the 2008 accounts of the Office of the Prime Minister and Public Service Commission resulted in the issue of a qualified audit report.
The accounts were qualified for the following reasons: 1) 2) The amounts in the Statements of Output Costs have been estimated as the facility to allow the measurement and accounting of these costs has yet to be integrated in the Financial Management Information System (FMIS) of government.

It is not possible therefore to determine the accuracy of the expenditures incurred by the Force under each output.
The Office of the Prime Minister and Public Service Commission have not provided an Operating Trust Fund Account Statement of Receipts and Payments contrary to Finance Instructions 82 (1).

The Financial Management Information System shows that the Office of the Prime Minister and the Public Service Commission as at 31/12/08 had operating trust funds totalling $(43,008) overdrawn and $469,682 respectively.
3) There is a significant variance in FNPF Reconciliation when compared to the accounts as at 31/12/08.

2.2 Statement of Receipts and Expenditures The Office of the Prime Minister and Public Service Commission collected revenue totalling $585,282 and incurred a total expenditure of $13,082,960 in 2008.
Office of the Prime Minister and Public Service Commission Section 02: Page 2 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Table 2.1: Statement of Receipts and Expenditures for 2008 Description RECEIPTS State Revenue Agency Revenue 2008 $ 2007 $ 492,047 93,235 360,318 0 TOTAL REVENUE 585,282 360,318 EXPENDITURE Operating Established Staff Unestablished Staff Travel & Communication Maintenance & Operations Purchase of Goods & Services Operating Grants & Transfers Special Expenditure Total Operating Expenditure Capital Expenditure Construction Purchases Grants & Operations Total Capital Expenditure 4,338,946 359,868 468,440 339,372 96,373 5,558,709 1,453,189 12,614,897 5,139,118 431,224 483,860 254,168 51,505 5,848,006 1,007,160 13,215,041 0 297,862 0 297,862 0 374,887 0 374,887 Value Added Tax 170,201 604,734 TOTAL EXPENDITURE 13,082,960 14,194,662 The increase in revenue by $224,964 or 62% was due to the increase in refund of training expenses under the Grant Levy Scheme (Fiji National Training Council), recoveries from previous years (overpayments and late arrivals salary deductions) and rent from buildings and official quarters.
The decrease in overall expenditure was mainly due to the decrease in established staff by $800,172 or 16%.

Vat decreased by $434,533 or 72% since VAT was not charged to Personal emoluments and Wages in 2008.

2.3 Statement of Output Costs The Statement of Output Costs consolidates the 12 outputs prescribed in the Budget Estimates.

These are detailed in Appendix 2.1.


2.4 Appropriation Statement The Office of the Prime Minister and Public Service Commission incurred expenditures totalling $13,082,960 in 2008 against the budget of $15,943,800 resulting in a savings of $2,860,840 or 18%.
Details of expenditures against the budget estimates are provided in Table 2.2 Office of the Prime Minister and Public Service Commission Section 02: Page 3 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Table 2.2: Appropriation Statement for 2008 Budget Estimate $ 5,166,200 527,400 437,200 294,100 89,400 8,439,900 880,500 15,834,700 Changes $ (45,000) (35,000) 105,000 97,000 24,000 (2,016,000) 200,000 (1,670,000) Revised Estimate $ 5,121,200 492,400 542,200 391,100 113,400 6,423,900 1,080,500 14,164,700 Actual Expenditure $ 4,338,946 359,868 468,440 339,372 96,373 5,558,709 1,453,189 12,614,897 Carry– Over $ 0 0 0 0 0 0 0 0 Lapsed Appropriation $ 782,254 132,532 73,760 51,728 17,027 865,191 (372,689) 1,549,803 SEG Item Established Staff Unestablished Staff Travel & Communication Maintenance & Operations Purchase of Goods & Services Operating Grants & Transfers Special Expenditure Total Operating Costs Capital Expenditure Construction Purchases Grants & Transfers Total Capital Expenditure 0 300,000 1,058,700 1,358,700 0 170,000 0 170,000 0 470,000 1,058,700 1,528,700 0 297,862 0 297,862 0 0 0 0 0 0 0 172,138 1,058,700 1,230,838 80,199 2,860,840 13 Value Added Tax 250,400 0 250,400 170,201 TOTAL EXPENDITURE 17,443,800 (1,500,000) 15,943,800 13,082,960 2.5 Statement of Losses The Office of the Prime Minister and the Public Service Commission did not report any lose of money or fixed assets during the financial year ending 31/12/08.
2.6 Trust Account Statement of Receipts and Payments The Office of the Prime Minister received $6,681,862 in grant from the Government of the Republic of China, of which $4,373,504 was utilised in 2008 for various projects selected by the Office.

Refer to Appendix 2.2 for details.
AUDIT FINDINGS 2.7 Financial Statements Commencing 2006 financial year, each annual report must include financial statements which have been prepared and signed in accordance with these Instructions, audited by the Auditor General, and accompanied by an audit opinion prepared by the Auditor General.1 The draft financial statements must be submitted to the Auditor General by 31 March in the following year, or within such other time as agreed to with the Auditor General.2 1 Finance Instructions 2005 – 81 (2) 2 Finance Instructions 2005 – 81 (3) Office of the Prime Minister and Public Service Commission Section 02: Page 4 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ The Agency Financial Statement of the Office of the Prime Minister and the Public Service Commission which was submitted for audit on 21/04/09 and was not prepared in accordance with the requirements of section 82 and Schedule 1 of the Finance Instructions 2005.
The following discrepancies were noted;  The agency financial statement reflected only eight Statements of Output Costs whereas the Budget Estimate 2008 prescribed twelve.

Moreover, audit could not substantiate the balances reflected in the Statement of Output Costs as the facility to allow the measurement and accounting of these costs has yet to be integrated in the Financial Management Information System (FMIS) of government.
 The Office of the Prime Minister has not provided a Trust Fund Account Statement of Receipts and Payments contrary to Finance Instructions 82 (1).

The Financial Management Information System shows that the Office had an overdrawn operating trust fund totalling $43,008 as at 31/12/08.
 The Public Service Commission has not provided a Trust Fund Account Statement of Receipts and Payments contrary to Finance Instructions 82 (1).The Financial Management Information System shows that the Commission held trust funds totalling $469,682 as at 31/12/08.

Non compliance with finance instructions in the preparation of the financial statement has restricted the scope of the audit and will be included in the audit report as qualifications.
Recommendation The Office and Commission should ensure that the requirements of the Finance Instructions are strictly followed in the preparation of the Agency Financial Statements.

Management Comments Office of the Prime Minister We only reported on four Outputs since those are the outputs that have budget provision for this year.
There are two outputs that don’t have any budget provision which are the Indigenous Development – Village Improvement Scheme and Community Development -Small Grant Scheme which is why we don’t provide any reports on them.

Although there are provisions in the budget estimates but availability of funds from sources are not forthcoming.

In regards to the Trust Fund Statements, the Office of the Prime Minister submitted its trust fund statement and the figures highlighted will be thoroughly looked into.
Public Service Commission The Agency Financial Statement is prepared by the Prime Minister’s Office for Public Service Commission.

Our financial outlays are jointly reflected with the Prime Minister’s Office.

Recommendation has been noted.

2.8 Over-Expenditure The Appropriation Act and the Budget Estimates set out details of the appropriations that Parliament approves for spending by each agency.
No officer may incur expenditure which results in the agency’s appropriation being exceeded without the proper authorisation of the Ministry of Finance, pending approval by Cabinet3.
3 Finance Instructions 2005 Section 8 Office of the Prime Minister and Public Service Commission Section 02: Page 5 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ The audit noted that the Office incurred excess expenditure for the Technical Support Secretariat for National Council for Building a Better Fiji.

The over expenditure was mainly for electricity, telecommunications charges and printing of directories.

Refer to the Table 2.3 for examples.
Table 2.3: Excess Expenditure Vote Budget ($) Actual Expenditure ($) Council National for Building a Better Fiji (NCBBF) Electricity 402,400 5,400 Telecommunications 40,000 Telecom Charges - $208,715.99 Vodafone Charges - $23,610.85 Connect Charges - $5,661.04 Amount Overspent ($) Percentage (%) 992,280.37 (589,880.37) 147 104,729.14 (99,329.14) (197,987.88 ) 237,987.88 1839 495 144 198 Directory Expenses 4,010 9,779.18 5,769.18 Total 451,810 1,344,776.57 892,966.57 Lack of monitoring of budgetary provisions had led to over expenditure which may have been avoided if proper planning was done.
Recommendations  The Accounts Officer should ensure that controls are put in place to avoid excess expenditure in future.

 Action should be taken to ensure that expenditure is charged to the correct allocation as appropriated in the budget.
Management Comments Our Expenditure and Commitments Statement for the year ended 31st December, 2008 confirmed the following figures: Vote NCBBF Telecommunication Budget 402400 40,000 Directory expenses Electricity 4010 5400 Actual expenditure 992,280 Telecom-18,971 Vodaphone-3438 Connect- 1303 2616 4385 Amount 589,880.87 1471 562 2697 1384 1015 Status Overspend Overspend Savings Savings Savings Savings The over expenditure for NCBBF allocations was due to some double posting and mis-postings on the IDC account which Ministry of Finance has debited the amount to our Expenditure Allocation SEG 7 so that they could close the IDC for whole of Government.
We have noted your comments for expenditures to be charged to the correct allocation as appropriated in the budget.
Office of the Prime Minister and Public Service Commission Section 02: Page 6 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ 2.9 Drawings Account The “Drawings Account” will be operated for all payments except for those payable from petty cash bank accounts, TMA bank account and Trust Bank account.4 The Accounting head must verify balances in the bank reconciliation to the cashbook, bank statements, unpresented cheque list and previous month’s bank reconciliation before certifying it.5 Details of unpresented cheques and other reconciling items should be attached to the reconciliation statement.6  Office of the Prime Minister The audit noted a difference $60,422.93 in the drawings account reconciliation as at 31/12/08.
Also an uncleared amount of $115,745.52 is being reflected in the reconciliation since 2003.

 Public Service Commission The drawings account did not reconcile with the FMIS general ledger resulting in a variance of $262,499.33.

The anomaly was due to the non timely preparation of the reconciliation.

Refer to the Table 2.4 for details.
Table 2.4: Variances in Drawings Account Allocation 1-02301-02999-530301 1-02302-02999-530301 1-02301-02999-535101 Total General Ledger Records ($) Commission Records ($) Variance ($) 262,499.33 211,237.45 474,735.51 (1,414.00) 415.27 473,736.78 211,237.45 262,499.33 The above anomaly indicates the lack of supervisory checks on the monthly reconciliations prepared by the accounts section Recommendations  The Accounts Officer should verify their records with the FMIS ledgers to identify the errors and make necessary adjustments so that the records reconcile.
 Regular monthly reconciliations should be carried, checked and certified by a senior officer before submitting it to Ministry of Finance.

Management Comments Office of the Prime Minister The correct difference as at 31/12/08 was $70,362.93.

There were some of the cheques that has gone into the GL Report for drawings 2008 but has hit the GL for 2009, therefore these items was included in the above difference for 2008.
In addition, the amount from the bank statement as at 31/12/08 which was supposed to be posted by MOF in December 2008,but failed to do so and they did the postings in January 2009 thus have an effect on this difference of $70,362.93 in 2008.

The recommendation is noted and the officer responsible will look into the matter highlighted.
4 Finance Manual 2005 Section 7.4.3 5 Finance Manual 2005 Section 7.4.10 6 Finance Manual 2005 section 7.4.8 Office of the Prime Minister and Public Service Commission Section 02: Page 7 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Public Service Commission We have prepared our reconciliation with reference to general ledger.
A Copy is attached for ease of reference (Appendix 4).Copy of GL report provided by MOF is attached from which the reconciliation is done.

It is noted that there are two other drawings account number mentioned which we do not use.

Ministry of Finance is responsible of opening drawings account.

Further OAG Comments The reconciliation figure of the Office of the Prime Minister of $521,130 is compared against general ledger (FMIS) figure of $581,553 resulting in a variance of $60,423.
2.10 Trust Fund Account When invoices or claims for payments are received, the payables officer shall record details in an accounts payable ledger.
The accounts payable ledger shall record all claims for payment except for procurement invoices, which shall be recorded in the commitment ledger.7 Within 3 days of receiving the monthly general ledger reports from the Ministry of Finance, the Accounts Officer shall reconcile the ledger balances to the general ledger reports and prepare a ledger reconciliation statement.
Any errors or misallocations must be immediately adjusted by way of journal vouchers.8 Office of the Prime Minister The trust fund reconciliation as at 31/12/08 had a balance of $324,560 in comparison to $43,008 in the FMIS ledger resulting in a variance of $367,568.

However upon enquiry no explanation was provided by the Officer in charge.
Moreover scrutiny of the general ledger records revealed that fifteen of the thirty-three accounts were overdrawn by $103,782.91 and five of the overdrawn trust fund accounts have been dormant since 2006.

Refer to Table 2.5 for details.
Table 2.5: Overdrawn Trust Fund Accounts Account Number Account Description Dormant Accounts 1-01101-01999-899988 Miscellaneous FU\und Open Item 1-01101-01999-861101 202 PD OPR Current Year 1-01101-01999-861201 20 PD Fiji Care Insurance Group 1-01102-01999-861101 202 PD OPR Current Year 1-01102-01999-861901 201 PD Tax Arrears / PAYE Active Accounts 1-01101-01999-861910 383 PD SUNDRIES 1-01102-01999-861202 241 PD CMLA 1-01102-01999-861204 244 PD LICI 1-01102-01999-861532 YYY PD Public Employee Union 1-01102-01999-861920 501 PD Employees FNPF 1-01201-61999-861202 241 PD CMLA 1-01201-61999-861204 244 PD LICI Ending Balance ($) Year of last Update 34,382.54 117.98 77.41 16.48 762.89 19,529.53 180.04 166.62 137.00 5,947.36 189.98 185.22 2005 2006 2006 2006 2006 2007 2007 2007 2007 2007 2007 2007 7 Finance Manual-Office of the Prime Minister 2005.
Section 13.1.1 8 Finance Manual-Office of the Prime Minister 2005.
Section 16.3.3 – 16.3.4 Office of the Prime Minister and Public Service Commission Section 02: Page 8 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Account Number Account Description 1-01201-61999-861532 YYY PD Public Employee Union 1-01101-01999-861920 501 PD Employees FNPF 1-01201-61999-861901 501 PD Employees FNPF Total Ending Balance ($) Year of last Update 155.00 41,759.45 175.41 103,782.91 2007 active active Public Service Commission A difference of $319,620.91 existed between the Commission’s reconciliation balance and the FMIS general ledger records as at 31/12/08.
In addition no reconciliations were prepared for ten trust fund accounts contrary to the requirements of the Finance regulations.

Refer to the following Table 2.6 for details of variance between the Commission’s records and the FMIS.
Table 2.6: Trust Fund Accounts Account Number Account Description 1-02101-02999-861104 Housing Authority 1-02101-02999-861105 Public rental board deductions 1-02101-02999-8612102 CML deductions 1-02101-02999-861204 LICI Deductions 1-02101-02999-861914 389 PD Court Bankruptcy ORD 1-02101-02999-861920 501 PD Employees FNPF 1-02101-02999-899988 Miscellaneous Fund Open Item 1-02301-02999-861104 208 PD Rent H/A Unest 1-02301-02999-861105 267 PD Rent Public Rental Board 1-02301-02999-861202 241 PD CMLA 1-02301-02999-861204 244 PD LICI 1-02301-02999-861501 286 PD Fiji Employees Association 1-02301-02999-861525 316 PD Service Worker CU 1-02301-02999-861901 201 PD Tax Arrears / PAYE 1-02301-02999-861914 389 PD Court Bankruptcy ORD 1-02301-02999-861920 501 PD Employees FNPF 1-02301-02999-899988 Miscellaneous Fund v Open Item 1-02303-02999-861901 201 PD Tax Arrears / PAYE 1-02303-02999-899988 Miscellaneous Fund v Open Item 1-02305-02999-899988 Miscellaneous Fund v Open Item Total General Ledger Records ($) Commission Records ($) Variance ($) (9.60) (4.34) 0 0 (2,000.00) (291,268.72) (26,405.68) (4.40) 34.80 (21.53) (13.80) (6.00) (3.00) (30.00) (1,025.00) (141,425.08) (8,155.20) (10.00) 130.00 536.00 469,681.55 - - - - - - - (3.52) 34.80 (17.56) (11.36) (6.00) (3.00) (30.00) (1,025.00) (140,843.80) (8,155.20) - - - 150,060.64 (9.60) (4.34) 0 0 (2,000.00) (291,268.72) (26,405.68) (0.88) 0 (3.97) (2.44) 0 0 0 0 (581.28) 0 (10.00) 130.00 536.00 319,620.91 Failure to reconcile the trust fund records with the Financial
 Management Information System general ledger is a breach of the Finance regulations.
Recommendations  The Accounts Officer should ensure that Trust Fund reconciliations are properly checked  against general ledger balances on a monthly basis.

Investigation should be carried out to ascertain the reason for overdrawn Trust Fund Accounts and officers responsible cautioned.

 The Accounts Officer should liaise with Ministry of Finance identify all the operating accounts and the dormant accounts and close if necessary.
Office of the Prime Minister and Public Service Commission Section 02: Page 9 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Management Comments Office of the Prime Minister The office is currently working on the dormant and active accounts to substantiate the correct current account that should consolidate those accounts.

The recommendation is noted and the officers responsible will looked into the issues highlighted.
Public Service Commission The Trust Fund Reconciliation is done on monthly basis with reference to general ledger.

Copies of reconciliation is attached for ease of reference (Appendix 2).It is also noted that the Trust fund account for Prime Minister’s Office is stated in this findings which creates a miss match with our reconciliation against general ledger as both Trust Fund are shown together.

2.11 Revolving Fund Account A ledger shall be maintained for advances and revolving fund accounts9.
Within 3 days of receiving the monthly general ledger reports from the Ministry of Finance, the Accounts Supervisor should reconcile the ledger balances to the general ledger reports and prepare a ledger reconciliation statement.10 A difference of $173,277.64 was noted between the Commission’s Revolving Fund Account (RFA) Miscellaneous and the FMIS general ledger balance as at 31/12/08.

The anomaly was due to the non preparation of monthly revolving fund reconciliations.

Refer to Table 2.7 for details.


Table 2.7: Variances in Revolving Fund Account Account General Ledger Records ($) Commission Records ($) Variance ($) Revolving Fund Account 9,647,542.38 9,474,314.74 173,227.64 Failure to reconcile revolving fund accounts with the general ledger is a breach of the finance regulations.

Recommendation The Accounts Officer should make every effort to reconcile the variances in the revolving fund account.
Management Comments We have always prepared our reconciliation and a copy is attached for ease of reference (Appendix 3).
2.12 FNPF Reconciliation Every employer shall pay to the Fund in respect of each of his employees, in every month during which such employee is employed by him and in the month following the termination of such 9 Finance Manual 2005 16.3.1 10 Finance Manual 2005 16.3.3 Office of the Prime Minister and Public Service Commission Section 02: Page 10 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ employment, a contribution calculated upon the amount of wages payable to such employee by such employer for the preceding month at the appropriate rates.11 Where charges are for payments to organisations through salary deductions, the relevant creditor account shall be credited.
When actual payment is made to the organisation, the creditor account shall be debited.12 A review of the Office of the Prime Minister and Public Service Commission’s FNPF deductions against salaries, wages and allowances reported in the financial statements revealed variances of $423,738 and $1,667,664 respectively.

Refer to Appendix 2.3 for details.

No explanations were provided by the Office for the above variance.
Recommendations  The Accounts Officer should review its FNPF records and reconciliations and provide explanations for the variance.

 Supervisory checks on the preparation of FNPF payments should be improved to ensure that balances reflected in the FNPF payments reconcile with the general ledger.

Management Comments Office of the Prime Minister The recommendation is noted and the officer responsible is tasked to correct the differences highlighted.
Public Service Commission Sir, the total FNPF payment made should be divided by 16% (.16) in order to get the total Gross pay subject to FNPF.

This includes the employees and employers share together.

I assume the calculation done by your officers may need to be re-looked at.
2.13 VAT Reconciliation Subject to the provision of the Vat Decree 1991, the tax shall be charged in accordance with the provisions of this Decree at the rate of twelve and a half percent on the supply (but not including an exempt supply) in Fiji of goods and services, by a registered person in the course or furtherance of a taxable activity carried on by that person, by reference to the value of that supply.13 Output VAT is payable to the Commissioner of Inland Revenue for the supply of all goods and services with the exception of zero rated and exempted supplies.
Payments effected by government departments for goods and services are thus subjected to VAT.14 A review of the Office of the Prime Minister and Public Service Commission VAT returns and reconciliations revealed an un-reconciled balance of $596,485 and $142,285 respectively between the taxable supplies in the VAT Return and the total income/expenditure in the Statement of Receipts and Expenditure.

Refer to Appendix 2.4 details.
11 Chapter 219 – Fiji National Provident Fund – Section 13 (1) 12 Finance Manual 2005 – Prime Minister’s Office Section 4.7.3 13 Value Added Tax Decree 1991 4th edition revised to 30/04/04 – section 15 (1) 14 Finance Circular No 9/95 Office of the Prime Minister and Public Service Commission Section 02: Page 11 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Recommendations  The Accounts Officer should review its VAT records and reconciliations and provide explanations for the variances.
 Supervisory checks on the preparation of VAT Returns should be improved to ensure that balances reflected in the VAT Returns reconcile with the general ledger.

Management Comments Office of the Prime Minister The recommendation is noted and the officer responsible is tasked to look into the differences highlighted.

Public Service Commission We have complied with the VAT Decree 1991 and have submitted our VAT return every month.
Vat return is processed in line with format provided to us by Fiji Islands Revenue and Customs Authority.

We were advised by FIRCA that PSC had a credit balance with them and as a result we just needed to complete the VAT Return Form and submit to them and they would debit it against the credit held.
OFFICE OF THE PRIME MINISTER 2.14 Manual Payments of Salaries  No manual payment of salary is permitted except on first appointment or upon written approval from the Principal Accounts officer.15  The letter of appointment should be forwarded to the Head of salaries (Senior Accounts Officer) who should create a salary file and issue an Electronic Data Processing (EDP) file for that employee.16 Audit noted that Project Officers were paid manually since their appointment in 2005.
According to explanations provided, the Project Officers are support officers working in a team who provide advice to the Prime Minister on legal matters.

Refer to Table 2.8 for details.

Table 2.8: Manual Payments of Salaries in 2008 Pay Period Officer EDP No.
01/08 – 26/08 01/08 – 26/08 01/08 – 26/08 14/08 – 26/08 01/08 & 14/08 Akisi Tuikabe Salote Koroi Miliame Raqisia Lakoba J. Kurutake Seruwaia Tinai - PF400 PF442 PF482 PF483 Amount Paid ($) 10,115.08 7,861.46 14,331.81 10,433.73 833.36 Manual payments of salaries increase the risk of fraud and mismanagement of funds.
15 Finance Manual 2005 section 4.5.14 16 Finance Manual 2005 section 4.1.2 Office of the Prime Minister and Public Service Commission Section 02: Page 12 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Recommendation The Project Officers should be paid through the normal Payroll system, which is directly deposited to their respective bank accounts.

Management Comments The recommendations have been noted.
Our Administration Unit is putting up a submission to PSC for the staff on project post to be absorbed in our staff establishment.

PUBLIC SERVICE COMMISSION 2.15 Outstanding Levy Payments to TPAF Each year the Appropriation Act and the budget estimates sets out details of the appropriation that Parliament approves for spending by each agency17.

At the end of each month, the clerical officer shall review the accounts payable ledger to ensure that all invoices and claims do not become overdue18.
Upon scrutiny of records, the audit noted that the Commission owed the TPAF a sum of $263,935 for the year ending 2007.

Audit was informed by the accounts officer that the there was not enough funds to pay the whole amount therefore they had to do partial payments.
Refer to Table 2.9 for example: Table 2.9: Outstanding Levy Payments to Training and Productivity Authority of Fiji (TPAF) Period Payment January – June 2007 Payment for July – December 2007 Total  Amount Due ($) Amount Paid ($) Balance Outstanding ($) 642,496.02 512,437.00 1,154,933.02 433,136.02 457,862.00 890,998.02 209,360.00 54,575.00 263,935.00 Failure to settle the above claims within the current financial year will be a burden on the 2009 budget allocation.
 Recommendation The Commission should ensure that levy payments are made when due and that the outstanding payments are cleared to avoid cash flow problems in the future.

Managements Comments Comments not provided.
17 Finance Instructions 2005 Section 8 18 PSC Finance Manual 2005 13.1.3 Office of the Prime Minister and Public Service Commission Section 02: Page 13 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ 2.16 SCHOLARSHIP UNIT 2.16.1 Cost-Sharing Scholarship (CSS) The Fiji Government Scholarship operates on a cost sharing system in which the Government contributes two thirds (2/3) and the student and or guardians one third (1/3) of the total cost of training.
Government pays all fees and allowances at the outset and the 1/3 contribution by the student is treated as an interest free loan which will be repaid at the end of their studies and on assumption of employment19.

Our review of scholarship records revealed that the Scholarship Unit has yet to initiate recovery action of 1/3 of the cost incurred from either the awardees or the guarantors.

The balance outstanding as at 31 December 2008 is substantial.
Refer to Table 2.10 for the breakdown: Table 2.10: Outstanding Balance – 2008 Institution University of the South Pacific Fiji College of Advance Fiji School Of Medicine Fiji Institute of Technology Lautoka Teachers College Corpus Christy Teachers College overseas scholarship Fiji College of Advance Nasinu Teachers College Fiji National Training Council Total 2007 ($) 4,559,239.94 650,974.36 3,638,177.47 ( 12,882.36) 1,173,460.46 301,132.48 27,874.13 1,484,675.95 (366,612.68) (23,255.39) 11,432,784.36 2008 ($) 655,720.66 200,599.07 2,872,094.49 23,229.10 1,528,243.64 41,113.86 15,347.09 1,111,418.52 0 0 6,447,766.43 Increase / (decrease) Percentage ( 3,903,519.28) (450,375.29) (766,082.98) 10,346.74 354,783.18 (260,018.62) (12,527.04) 373,257.43 (366,612.68) (23,255.39) 4,985,017.93 (85.6) (69.1) (21.0) 80.3 30.2 (86.3) (44.9) 25.1 (100) (100) (43.6) The total arrears of $6,447,766.43 had decreased by $4,985,017.93 or 43.6% when compared to $11,432,784.36 for 2007.
A proper audit of the Unit could not be carried out as all the necessary information was not provided, therefore reliance can not be placed on the actual amount stated by the Commission in the monthly reconciliation.

If the Commission does not implement other effective and stringent measures and controls, there is a possibility that these arrears may become irrecoverable.
Recommendations  The Commission should continue to explore ways to recover the cost of training from relevant applicants or guarantors.

It is recommended that the Commission prepare an aged analysis of the arrears.

 Management Comments  The Unit will continue to explore ways to recover the cost of training from our sponsored students and guarantors.

The Unit also has an audience with the Fiji National Provident Fund and Immigration Department regarding the tracing of our graduates and guarantors.
However due to legal implications involved, FNPF requires a court order before divulging confidential information.

Although this is a minor setback, discussions will continue with these institutions.
19 PSC Scholarship and Student Loan Scheme Handbook Office of the Prime Minister and Public Service Commission Section 02: Page 14 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________  With the new system in place, the Unit managed to collect $2.5m compared to $1.9m in 2007 (76%).
Refer table below for details:- SUMMARY OF REVENUE COLLECTED YEAR 2008 2007 2006 2005 2004 TOTAL SLS 241,113.85 126,978.76 107,058.71 130,966.88 86,305.70 692,423.90 CSL 2,289,567.67 1,800,034.79 1,607,690.48 1,366,633.37 1,303,481.15 8,367,407.46 TOTAL 2,530,681.52 1,927,013.55 1,714,749.19 1,497,600.25 1,389,786.85 9,059,831.36 2.16.2 Student Loan Scheme (SLS) The recipient on being employed is to pay back the 100% amount of loan used on his/her education by an annual remittance of 20% from his/her gross wages/salary per annum20.
Scrutiny of a sample of loan records revealed that the Student Loans Scheme was not properly monitored to ensure the successful recovery of loans upon completion of studies.

Discussion held with the Student Loan Scheme Officer revealed that since the computers used to store data for the loan scheme had ‘crashed’ the Scholarship Unit does not have a hard copy or the updated graduate listing.
It is unusual to note that the Commission failed to maintain electronic back up of its files that contained important records.

However, the outstanding balance of Student Loans Scheme that was produced for audit stated that a sum of $257,186.74 was owed as at 31 December 2008.

The balance increase by $181,904.16 or 242% when compared to 2007.
Refer to Table 2.11 for breakdown of outstanding balances: Table 2.11: Outstanding Balance - 2008 Institution University of the South Pacific Fiji Institute of Technology Fiji School of Medicine Fiji College of Advanced Education Fulton College Corpus Christi Teachers College Fiji College of Agriculture Total 2007 ($) 266,386.30 (92,551.67) (76,871.14) (5,070.25) 0 23,400.70 (40,011.36) 75,282.58 2008 ($) 85,438.84 61,132.82 61,798.84 3,061.00 24,558.00 20,947.24 250.00 257,186.74 Increase / (Decrease) (180,947.46) 31,418.85 15,072.30 2,009.25 24,558.00 (2,453.46) (39,761.36) 181,904.16 Percentage Change (%) (67.9) 33.9 19.6 39.6 10.5 (10.5) (49.0) 241.6 The substantial arrears as at 31 December 2008 indicated that the lack of strategies adopted by the Commission to recover the same is not effective thus denying the Government much needed revenue.
If the Commission fail to implement effective collection procedure then there is a possibility that these arrears may become irrecoverable and may be written off.
20 PSC Scholarship and Student Loan Scheme Handbook, Student Loan Scheme, Recovery of Loan, pg 11 Office of the Prime Minister and Public Service Commission Section 02: Page 15 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Recommendations  The Recovery Unit should invoke the guarantor’s clause and recover from the guarantor instead if awardees cannot repay their loans within the 3 months granted for them to find employment.
 The Commission should review its recovery procedures to improve the recovery of loans and to avoid writing off debts.

 The Commission should ensure that information maintained with the Scholarship Unit have adequate back-up.

Management Comments  The Recovery Unit to some extent has invoked the guarantor’s clause and will continue in its effort to recover loans from guarantors if the awardees cannot repay their loans.
 The recommendations have been noted and the Unit will make sure that we are complying with existing regulations and policies.

2.16.3 Defaulters and Limitation Act Each Director of the area that has incurred a loss should ensure that the following actions are taken where applicable, to recover losses.
Issue of reminder notices;   Legal action initiated by the Solicitor General’s Office;  Reposing items where applicable;   Salary deductions for government officials;  Surcharging officers responsible for the loss21.

Investigations and recovery by the Police; The Deputy Permanent Secretary should approve any legal action to recover a loss.
Before any legal action is taken, the practicality of pursuing this option together with legal costs must be weighed against the probability of success and the timeframes involved.22 Statistics revealed that 32.1% of the total loan of $7,006,902.31 had been recovered as at Pay 6 of 2008 (04/03/08 – 11/03/08) and 31.1% are on going.
The Officer in Charge of recovery indicated that the on going payments are those payments that will be recovered in months and years to come through direct deduction from salary and through manual payments.

The audit noted that 36.8% of the total loans of $7,006,902.31 issued from 2001 to 2004 are the arrears owed by defaulters.

If the Commission fails to recover the loan from defaulters in time, the Commission is likely or could face difficulty in recovering these debts.
Refer to Table 2.12 for the breakdown: 21 Finance Manual 2005 section 14.2 22 Finance Manual 2005 section 14.2.2 Office of the Prime Minister and Public Service Commission Section 02: Page 16 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Table 2.12: Breakdown on Defaulters - Loans Issued From 2001 To 2004 Institution No.
Of Students Total Loan Total Paid (P06/08) 04/03/08 – 11/03/08 Outstanding Balance as at 2004 USP FIT CCTC LTC FCAE FCA FSM Total 341 72 75 636 611 73 113 1,921 2,626,878.04 65,003.50 103,721.00 1,174,468.05 1,217,401.72 168,535.00 1,650,895.00 7,006,902.31 On going Defaulters Total Moreover a total of 150 files have been identified as inactive, for which costs were not recovered.
Other details apart from the names were not available for audit.

However, a list of names was sent to Immigration Department as the issue was highlighted in the previous reports: Refer to Table 2.13 for details.

Table 2.13: Number of Defaulters Reported Institution 2008 Still in Fiji Migrated Departed from Fiji for employment Total 84 3 13 100 Discussion with officer in charge Mr. Vanaisa Ledua, Accounts Officer revealed that recovery from students who have migrated will be made from their guarantors.
Failure to recover from the defaulters in time may result in the Commission writing off the debts.

Recommendations  Stringent processes should be put in place to ensure that arrears of revenue are minimized.

 The Commission should consider seeking legal advice on the Limitation Act issue and take action accordingly.
Management Comments  PSC Recovery Unit with its limited resources has been working very hard to collect monies owed to the Government and stringent measures have been put in place to ensure that arrears of revenue are minimized and so far, the Unit has recovered $1, 535,326.58.

Leave alone those who are preferred to pay manually.

Refer table below for details: Deduction Form No.

242318 242282 242283 242379 Institution FCAE VARIOUS 2008 No.
of students Total Owing Remarks 2 2 2 2 $5192.00 $2279.00 $5792.00 $10988.00 Office of the Prime Minister and Public Service Commission Section 02: Page 17 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Institution LTC CCTC LTC FSM CCTC VARIOUS FCAE Deduction Form No.
TOTAL 2008 No.
of students Total Owing Remarks $33925.00 $46049.00 $47192.00 $47192.00 $44001.00 $4450.00 $43212.00 $48835.00 $36476.00 $38206.00 $37931.00 $41100.00 $44156.00 $8588.00 $26335.00 $19772.00 $23985.00 $44471.00 $294150.00 $240553.00 $29072.00 $11371.00 $38867.87 $29585.00 $31425.00 $32190.00 $28765.00 $19590.37 $28984.34 $26143.00 $24436.00 $24081.00 $13059.00 $2927.00 $1,535326.58  The PSC Scholarship Unit were also advised by the Solicitor General’s Office Memorandum dated 25/07/2008 that claim actions can be initiated against the individual contracted scholarship holders and their guarantors by way Writ of Summons either in the High Court or Magistrate Court, depending on the quantum of debt sought together with necessary applications for substitute service.
 PSC’s recovery unit is being strengthened and we hope to increase collection by the end of the year.

2.16.4 Understatement of Arrears of Revenue (FMIS) The arrears of revenue as at 31/12/08 reported by the FMIS are understated.

An enquiry with the Ministry of Finance confirmed that not all loan records were transferred to the systems accounts receivable module.

Records prior to 2004 were not entered into the system.
Refer to Table 2.14 for examples of students whose invoices could not be generated from FMIS: Office of the Prime Minister and Public Service Commission Section 02: Page 18 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Table 2.14: Understatement of Arrears of Revenue File No.
Awardees Institution Amount Outstanding M-2003/010 M-2001/049 M-2002/043 M-2001/049 USP 1996/055 USP 1996/056 USP 1995/019 USP 1997/019 TL 97/046 FCAE98/144 A95/009 Kositino Bukamaiwaqa Neel Nitesh Prishka Pritmala Naicker Bhavik Ram Waghela Saleshni Mala Nand Nofaga Savike Sakimi Mark Peter Rasova Dimple Doreen Rahimaan Camueli Francis Ravind Prakash Maheshwar Singh Recommendations The Commission should ensure that: FSM FSM FSM USP USP USP USP USP LTC FCAE FCA ($) 20,289.00 14,735.00 15,683.00 8,318.00 2,624.00 3,152.00 7,661.00 2,174.00 1,394.00 1,687.00 1,280.00  records maintained with the Scholarship Unit are correct and reconciled to the data uploaded on to the FMIS;  data entry is done correctly and certified by a senior officer; and  The work of the subordinates are adequately supervised and monitored regularly to ensure records are kept up to date.
Management Comments  With limited resources, the Unit managed to secure the appointment of 2 (two) volunteers and the Unit managed to invoice more that 3,000 individual student files into the FMIS system.

 Data entry is done correctly and certified by the Accounts Officer.

 Your recommendation has been noted and mechanisms have been put in place.
2.16.5 Termination of Student Loans Once a scholarship has been awarded or loan has been granted, the Scholarship Committee shall have the powers to withdraw such a scholarship or loan if in its view the behaviour and or academic progress of the holder is or has been unsatisfactory23.

Once a loan is terminated the students or the guarantors should pay the total amount spent.
Our review of student files revealed that loans for those students whose awards were terminated due to poor academic performances were still outstanding.

Refer to Table 2.15 for examples.

Table 2.15: Terminated awards File No.

Awardees Institution Amount Outstanding UDG 2004.016 UDG 2004.023 UDG 2004.025 UDG 2004.029 M-2007.015 Titilia K. Solikoroilagilagi George.
Richmond .H.Matai Marika.T.Kilawekana Siliai Rabuku Jimaima Taoi USP USP USP USP FSM 23 Scholarship and Student Loan Hand Book 2004 page 8 ($) 23,028.00 9,309.00 14,979.00 17,931.00 16,671.00 Office of the Prime Minister and Public Service Commission Section 02: Page 19 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ File No.
Awardees Institution Amount Outstanding M-2007.002 USP 2008.058 USP 2008.096 USP 2008.062 USP 2008.065 UDG 2008.012 UDG 2008.091 Josefa Baleinukulala Arishma Aswita Naicker Vikash Shiva Reddy Romeeza Mahenaaz Ali Dipal Prasad Emma Louisa King Amit Aswin Chand FSM USP USP USP USP USP USP ($) 35,808.00 6,030.00 3,910.00 4,413.00 4,515.00 4,344.00 5,718.00 Upon discussion with officer in charge, Ulita Serukalou, the Commission do not recover from students straight away because they can apply for reinstatement.
However, if students do not perform then the Commission will take action.

Refer to Appendix 2.5 for full listing of students whose awards were terminated in 2008.

Recommendations  The Student Loan Scheme Unit must review the files at the end of every semester and terminate the loans for those who do not perform satisfactorily.
 The Unit should make every effort to recover the loan amount by regularly sending follow up letters to all students whose award has been terminated or have successfully completed their studies.

 The Unit should make every effort to recover the amount from the guarantors if a student fails to make payment for the loan taken.

 The Unit should review the effectiveness of its loan recovery procedures.
Management Comments  Letters of termination have been issued to those students who do not perform satisfactorily and for them to pay back their loan.

 The Recovery Unit to some extent has invoked the guarantor’s clause and will continue in its effort to recover loans from guarantors if the awardees cannot repay their loans.

The rather long legal process has to go through the SG’s Office and this has held up our actions.
Ideally, we should have our own legal team but this is not permitted under the current arrangements with the SG’s Office.

 The Unit will continue to explore ways to recover the cost of training from our sponsored students and guarantors.

 Follow up correspondence to students/guarantors will be strengthened to ensure recovery of loan.

Legal constraints are obstructing loan recovery from guarantors and students particularly when it involves the Fiji National Provident Fund.
2.17 OFFICE ACCOMODATION 2.17.1 Occupational Health and Safety Every employer shall ensure the health and safety at work of all his or her workers.

An Employer shall provide and maintain plant and systems of work that are safe and without risks to health24.

The Health and Safety at Work Act 1996 and its regulations clearly stated the duties of employer.
The workplace environment shall be free from hazardous substances and designed in a manner to accommodate the needs of user as specified under the National Building Code.
24 Health and Safety at Work Act 1996 (9) (1) & (2) Office of the Prime Minister and Public Service Commission Section 02: Page 20 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Some government rented offices including the premises occupied by the Commission do not comply with the requirements of the Occupational Health and Safety Act.
Some of the buildings were inspected by the officials of the Ministry of Labour and labelled as unsafe due to non compliance with the OHS Act.

Refer to Table 2.16 below for examples: Table 2.16: Occupational Health and Safety Issue Building Tenants Problems PSC Building Complex at Berkley Crescent and Nasese.

PSC Takayawa Building  Fisheries and Forestry; Agriculture Admin.

; and PSC Higher Salaries Commission.


Suvavou House  Registrar General’s Office; Attorney General;     The building is prone to fire and heavily congested.
; Flooring mostly at water access areas are beginning to rot; Flooring without carpet is slippery; The proposed walkway is less than the recommended width of one metre;  Rotten flooring at sanitary conveniences and wet and slippery surfaces; Foul smell from toilet outlets There is no designated eating/dining facilities;    No proper drinking facilities; and  No designated space or room for machines and customers.
 Complaints over unsatisfactory condition and poor office environment such as the overflow of water form overhead tanks that normally cause serious disruptions during working hours.

During heavy rain, water leaks into the office through the windows.

 Unacceptable manner of repair works;  Lack of proper lighting;  Non disposal of rubbish;  Leakage in men’s toilet.
 Toilet on level one and two are smelly and unhealthy;  Floor rugs need to be pasted;  Air condition not working at all and causing very unhealthy situation  Water Leakage from the tap in tea room; Rainy water leakage.

The non compliance with the Health and Safety Act exposes employees to threat of accidents.
Recommendation The Public Service Commission should ensure that the provisions of the Health and Safety Act are complied with to ensure the safety of employees and safeguard government’s interest.

Management Comments Before a building is certified fit for occupation the certificate on OHS compliance must be granted by the Ministry for Labor and Employment prior to occupation being taken place.
However, the procedure that the division that normally applies on receipt of complaints from the OHS Committees in the respective ministries is as follows: On receipt of OHS breaches on any building the complaints are noted in the file and the landlord is notified immediately with a request to rectify.

Follow up check with the landlord within the day or after.
Office of the Prime Minister and Public Service Commission Section 02: Page 21 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Non compliance will result in the closure of the office and government will recommend to rectify the OHS breaches and cost be deducted from the rent money.

Recently the Takayawa Building landlord had rectified the OHS breaches and numerous meeting conducted between landlord, PSC and the tenants to ensure compliance.
The Berkley Crescent building is a very old timber structure and was constructed prior to the introduction of the new OHS Regulations and guidelines.

PSC has noted the concerns and has already requested for funds from the Budget and the Scope of Works are currently being worked out by PWD.

A copy of the same should be available in the next two weeks.

PSC is also looking at constructing and new complex to replace the current structure.
In the circumstances it may not be prudent to do a complete overhaul of the old building but ensure the structure becomes OHS compliant.

2.17.2 Expired Letting Agreement The Public Service Commission is the central agency charged with the responsibility of providing office accommodation for the public service.
Although other government agencies also have specific responsibilities into the management of office accommodation for the public service, the Commission is responsible for conducting negotiations with owners of the building.

The Public Service Commission is responsible for the provision of suitable office accommodation and the prescription and supervision of the physical working conditions of all employees in the Public Service.
The Director of Lands and Surveyor General prepare the letting agreements on the instruction of the Commission25.

Audit noted that several letting agreements had expired but the premises were still being rented by government for accommodation of offices.

Refer to Appendix 2.6 for expired letting agreement.

In the absence of signed letting agreements the Commission may not be in a position to protect the interest of government if landlord chose to terminate the current arrangement.
Recommendation The Commission should ensure that new agreements are entered into upon expiry of existing agreements.

Management Comments We have an existing policy whereby letting agreements are automatically extended on monthly basis when it becomes expired.

We are of the view that temporary extensions of L.A. on a monthly basis is best option as landlords will not accommodate short term agreements.
Exit clause on letting Agreement allows for 3- 6 month notice on intention to terminate any letting agreements.

All letting agreements are maintained by the Director of Lands and PSC is currently reviewing the existing Letting Agreement.

2.18 POOL QUARTERS 2.18.1 Government Pool Quarters Entitlement General Order 601 states the entitlement and eligibility of officers to rent free government quarters or an allowance in lieu of the rates approved by the Public Service Commission.
25 http://pscwebsrv01/au/divisions_Office_Accomodation.aspx Office of the Prime Minister and Public Service Commission Section 02: Page 22 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ The following Officers are entitled to receive rent-free quarters, or to an allowance in lieu at rates to be approved by the Secretary for the Pubic Service.

a) The Principals of Government Schools and Training Institutions with boarding facilities.
b) The Senior Domestic Assistant and/or Domestic Assistant of Government Schools and Training Institutions with boarding facilities.

c) The Matron and Supervisor at the Mental Hospital.

d) Subordinate Officers of the Fiji Police Force and Prison Officers Classes A, B and C. e) Warden and/or Assistant Warden of Government Training Institutions.

f) Landscape Officer, Chief Cook, Stewards, Lady’s Maid - Government House.
g) Resident Teachers at Government Residential Schools, return in for performing extra-curricular duties.

h) The Public Works Department Supervisors at the Colonial War Memorial and Tamavua Hospitals.

i) Superintendents of the Old People's Homes at Natabua, Samabula and Labasa.

j) All Officers of Permanent Secretary rank.26 Local Officers recruited within their station are not eligible for Government quarters unless transferred to another station other than Suva.27.
In Suva the allocation of pool quarters will he made by the Suva Housing Board, consisting of a Chairman and such other members as may be appointed from time to time by the Secretary for the Public Service.

Correspondence should be addressed to the Secretary, Suva Housing Board, and Public Service Commission.
Departmental quarters will be allocated by the Permanent Secretary or Head of Department.28 Outside Suva the allocation of pool quarters will be made by a Committee consisting of a Chairman and two members, to be appointed by the Divisional Commissioner.

Departmental quarters will be allocated by the Permanent Secretary or Head of Department.
An Officer will not be permitted to occupy quarters outside the station to which he is posted, except with the permission of the Secretary for the Public Service.29 Scrutiny of Government Pool Quarters records maintained at PSC revealed the following anomalies:  Superintendent of Police Lesu while occupying government quarters 216 at Stoddart Place, Suva was renting his private home in Vatuwaqa;  The keys were not handed over after Australian Defence Adviser South Pacific had transferred their three residences to the government.
These properties were neither taken on charge in the quarters inventory nor in the PWD maintenance listings;  PSC had allocated quarters 164 and 142 to Mr. Quminakelo and Mr. Natila respectively to occupy upon request for 3 months on temporary basis.

After the 3 months they were given approval to occupy until 30/7/08 and were being charged market rental of $1,000 per month with effect from 1st May, 2008.

However another letter was issued by PSC (ref.


29/528/164 of 23/06/08) to the Permanent Secretary for Provincial Development considering their appeal not to charge market rental but 8% normal rental from the date of occupation and all the over deducted rental was refunded to the officers.
As at the date of audit the officers’ were still occupying the quarters; 26 General Orders 601 27 General Orders 603 28 General Orders 604 (a) & (b) 29 General Orders 605 (a), (b) & (c) Office of the Prime Minister and Public Service Commission Section 02: Page 23 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________  The following civil servants who are not entitled to government quarters are currently occupying pool quarters: Refer to Table 2.17 below for examples Table 2.17: Officers Not Entitled To Pool Quarters Name Post Filipo Jitoko Banuve Komaitotoya Rupeni Nacewa Major Leweni Inoke Oliqao Vilimoni Vaganalau Niumaia Gucake Filimone Kau Capt.
Villiame Draunibuka CMDR Villiame Naupoto Samu Bainivalu L Tora Salusalu Filimone Dr.U.K.Dhar DS DS Official Secretary DS Chief Police Protection Officer Staff Supervisor Director Water & Sewerage Disaster Management Director Military Advisor Director Immigration Matanivanua ITIF Manager ITC Director of Legal Aid LCE Consultant Quarters No.

15 60 77 100 108 120A 124 142 143 144 170 173 187 198 242 245 Grade Dept.
Date Occupied III III II III II IV III IV IV IV IV IV IVC IVC IVC IVC Education Fisheries & Forests Presidents Office Information Presidents Office Presidents Office Water & Sewerage Provincial Dept Information Presidents Office Immigration Presidents Office PM’s Office ITC LAC Health n/a 09/07/07 16/10/06 06/06/08 23/03/05 15/02/02 02/01/08 10/01/08 26/09/07 21/02/06 n/a 21/03/05 27/01/07 30/01/07 16/07/98 Police Officers are only entitled to pool quarters for up to 3 months.
Although the Police Department has its own quarters and barracks, a number of police officers were still occupying government pool quarters exceeding the timeline of three months of occupancy.

Refer to the Table 2.18 below for examples.
Table 2.18: Officers who Exceeded Occupancy Time Limit of Pool Quarters Tenant Post Qtrs Grade Dept Date Occupied Sur Sen Ravi Narayan Auta Moceisuva Krishna Naidu Tevita Lesu Jonasa Lekai Eroni Antonio Rusiate Tuidravu SSP Emori Laqai Ponipate Lesavua Consultant SSP SSP Deputy Commissioner Prisons Police Office Force Chaplin DPC/South DCP A/SP SSP 14 16 122 138 216 241 247 248 214 196 III III III IV IV IVC IV IVC IV IV Police Police Prisons Police Police Police Police Police Police Police 06/10/08 07/01/08 22/5/07 15/03/08 11/09/07 11/09/07 11/09/07 11/09/07 31/05/08 31/05/08 This indicates that the government quarters have not been allocated according to the relevant government rules and regulations thus depriving those officers that are entitled to such benefits.
Office of the Prime Minister and Public Service Commission Section 02: Page 24 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Recommendations  Government quarters should only be allocated to entitled officers and those not entitled to should be vacated.

 Rental should be charged at the current market rates.

 Any outstanding rent from those occupying government quarters should be recovered immediately.
 Government rules and regulations pertaining to allocation of government quarters as issued by the Commission should be complied with.

Management Comments While the allocation of Quarters is governed by General Orders, as a proactive measure, PSC had decided to let out some quarters to protect them from being vandalized.

It must be noted that some entitled officers have preferred to stay in their private residences and the numbers of entitled officers under GO 601 have reduced greatly.
We are also in the process of evicting all tenants who are not entitled to vacate the quarters and have them rented out at market rates.

The issue has also been the focus of some comments in the KPMG Report and PSC will soon develop new policy guidelines and ensure maximum rentals from these investments.
2.18.2 Accumulated Rental Arrears by Dr. Uzzal Kanti Dhar Any officer who without the requisite authorisation occupies Government quarters or remains in Government quarters following instructions to vacate, shall be charged rental based on the market rate as decided by the Secretary for the Public Service, for the period of such unauthorized occupation30.

Dr. Uzzal Kanti Dhar was not entitled for a government quarters as he was no longer a civil servant.
He was terminated from the service with effect from 19/09/2000.

Although he was given enough time to arrange for his own accommodation he is yet to vacate the government quarter No 245.

Dr Uzzal Kanti Dhar was recruited from Bangladesh and posted to CWM Hospital where he worked as an Urologist until his employment was terminated.

He then joined the Suva Private Hospital and is still employed by them.
At the time of his termination from the Service, he was occupying government quarters number 245 at Nicoll Road.

Despite being served with several reminder notices he continued to occupy the quarters without paying any rent and as a result his rental arrears as at 31 December 2008 stood at $99,399 based on the market rate.

The Commission made several attempts to remove the officer form the said quarters but was not successful.
The Commission sought the assistance of the Military and on 15/02/07 made an attempt but again was not successful.

It was alarming to note that the officer has remained adamant and yet the authorities concerned are not able take any positive action against him.

Had the Commission taken the officer to task at very beginning to remove him the situation would not have been arisen.
Recommendations  The Commission should immediately remove him from the government quarters and if need be seek assistance from higher authorities.

 Action should be taken to recover the accumulated rental arrears from the officer even if it meant taking legal action.

 Government regulations pertaining to the occupation and allocation of government quarters as issued by the Commission should be applied to all officers irrespective of their status.
30 General Order 607 (j) Office of the Prime Minister and Public Service Commission Section 02: Page 25 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Management Comments We have noted the issue that has been raised and as of to date the person has vacated that quarters.

We had communicated with him to pay for the accumulated arrears of more than $90,000.00 of rental.
However the person resigned from the Ministry of Health on 19/9/2000 and we have not been able to pursue deductions through the Payroll.

Furthermore, Dr Dhar has now taken the Government to court and any recovery will have to await the outcome of the court proceedings.
Office of the Prime Minister and Public Service Commission Section 02: Page 26 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Appendix 2.1: Statement of Output Costs Office of the Prime Minister Statement of Output Costs for 2008 – General Administration 2008 Description EXPENDITURES Operating Established Staff Unestablished Staff Travel & Communication Maintenance & Operations Purchase of Goods & Services Operating Grants & Transfers Special Expenditures Total Operating Costs Capital Expenditure Capital Construction Capital Purchases Capital Grants & Transfers Total Capital Expenditure Value Added Tax TOTAL EXPENDITURES 2008 $ 2007 $ 1,103,462 135,150 120,938 96,408 5,669 429,847 1,000,262 2,891,736 0 0 0 0 48,682 2,940,418 1,205,782 209,922 180,913 96,546 9,735 1,023,060 27,632 2,753,590 - - 108,767 108,767 78,309 2,940,666 Statement of Output Costs for 2008 – Cabinet Office 2008 Description EXPENDITURES Operating Established Staff Unestablished Staff Travel & Communication Maintenance & Operations Purchase of Goods & Services Operating Grants & Transfers Special Expenditures Total Operating Costs Capital Expenditure Capital Construction Capital Purchases Capital Grants & Transfers Total Capital Expenditure Value Added Tax TOTAL EXPENDITURES 2008 $ 2007 $ 146,314 15,341 21,709 31,765 1,385 0 130,046 346,560 - - - - 16,044 362,604 209,600 27,217 18,800 20,077 1,327 - 127,768 404,789 - - - - 20,092 424,881 Office of the Prime Minister and Public Service
 Commission Section 02: Page 27 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Public Service Commission Statement of Output Costs for 2008 – Portfolio & Executive Leadership Description EXPENDITURE Operating Costs Established Staff Unestablished Staff Travel & Communication Maintenance & Operations Purchase of Goods & Services Operating Grants & Transfers Special Expenditure Total Operating Costs Capital Costs Construction Purchases Grants & Transfers Total
 Capital Costs Value Added Tax TOTAL COSTS 2008 $ 2007 $ 444,386 20,062 22,789 48,671 45,307 (61) 0 581,154 0 0 0 0 636,479 16,964 13,186 34,525 27,973 0 0 729,127 0 0 0 0 13,376 594,530 71,910 801,037 Statement of Output Costs for 2008 – Management Improvement Division Description EXPENDITURE Operating Costs Established Staff Unestablished Staff Travel & Communication Maintenance & Operations Purchase of Goods & Services Operating Grants & Transfers Special Expenditure Total Operating Costs Capital Costs Construction Purchases Grants & Transfers Total Capital Costs Value Added Tax TOTAL COSTS 2008 $ 2007 $ 515,526 9,397 662 8,813 0 0 0 534,398 0 128,542 0 128,542 16,325 679,265 509,793 11,552 417 7,842 0 0 0 529,604 0 266,120 0 266,120 80,867 876,591 Office of the Prime Minister and Public Service Commission Section 02: Page 28 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Statement of Output Costs for 2008 – Corporate Services Description EXPENDITURE Operating Costs Established Staff Unestablished Staff Travel & Communication Maintenance & Operations Purchase of Goods & Services Operating Grants & Transfers Special Expenditure Total Operating Costs Capital Costs Construction Purchases Grants & Transfers Total Capital Costs Value Added Tax TOTAL COSTS 2008 $ 2007 $ 734,549 84,959 267,086 120,264 0 0 0 1,206,858 0 169,320 0 169,320 47,413 1,423,591 1,065,399 71,796 242,709 95,226 0 0 0 1,475,130 0 0 0 0 127,894
 1,603,024 Statement of Output Costs for 2008 – Employee Relations Description EXPENDITURE Operating Costs Established Staff Unestablished Staff Travel & Communication Maintenance & Operations Purchase of Goods & Services Operating Grants & Transfers Special Expenditure Total Operating Costs Capital Costs Construction Purchases Grants & Transfers Total Capital Costs Value Added Tax TOTAL COSTS 2008 $ 2007 $ 603,114 70 8,250 2,074 0 0 222,702 836,210 0 0 0 0 7,454 843,664 638,985 3,426 1,713 0 0 0 780,000
 1,424,124 0 0 0 0 113,916 1,538,040 Office of the Prime Minister and Public Service Commission Section 02: Page 29 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Statement of Output Costs for 2008 – Training Description EXPENDITURE Operating Costs Established Staff Unestablished Staff Travel & Communication Maintenance & Operations Purchase of Goods & Services Operating Grants & Transfers Special Expenditure Total Operating Costs Capital Costs Construction Purchases Grants & Transfers Total Capital Costs Value Added Tax TOTAL COSTS 2008 $ 2007 $ 633,623 86,653 21,002 27,215 44,013 5,128,923 59,695 6,001,124 0 0 0 0 13,377 6,014,501 712,798 83,901 8,063 5,835 12,156 4,824,946 32,361 5,680,060 0 0 0 0 83,086 5,763,146 Statement of Output Costs for 2008 – Public Appeals Board Description EXPENDITURE Operating Costs Established Staff Unestablished Staff Travel & Communication Maintenance & Operations Purchase of Goods & Services Operating Grants & Transfers Special Expenditure Total Operating Costs Capital Costs Construction Purchases Grants & Transfers Total Capital Costs Value Added Tax TOTAL COSTS 2008 $ 2007 $ 157,972 8,235 6,005 4,162 0 0 40,484 216,858 0 0 0 0 7,530 224,388 160,281 9,872 6,345 2,036 314 0 39,398 218,246 0 0 0 0 28,659 246,905 Office of the Prime Minister and Public Service Commission Section 02: Page 30 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009
 ________________ Appendix 2.2: Trust Account for 2008 - Chinese Grant Description RECEIPTS Opening Balance Other Receipts TOTALRECIPTS PAYMENTS Extension Of PM’s Residence Nukuna/ Vatukarasa/Nameka Road Project Renovation Of Classrooms – Rt.
Sauvoli Memorial School Navuso Linking Bridge Ugavule ll – Cikobia Island Namau Village Cocoa Grinding Machine Thurston Garden – Upgrading Committee On The Better Utilisation Of Land (CBUL)l – PS Fijian Affairs Valebasoga Secondary School Rewa District School Serea/Naivucini – Rural Electrification PM’s Trip To India & Return Temporary Shelther – Late Vunivalu Of Rewa Tunuloa Catholic Primary School Wailevu Primary School Natewa Priamry School Karoko Women’s Club Natewa Evacuation Centre Loa Village Administrative Costs – CND Projects Fiji Night Beijing New Navua Hospital Bula Festival Association Fiji Servicemen Aftercare Fund Nakini/Natoaika Road Upgrading Project Nukuloa Santan Dharam School Yasayasa Moala College Basketball Fiji Totoya Health Centre Veolomani Youth Group Nukuloa Police Post Refund Of Air Passage DCFD Unit Equipment Tamavua Village & Tomb – Renovation Fiji Prisons & Correction Services Narocake District School Nakelo District School Kioa Island Community Farming Equipment Sea Passage – DCFD Unit Personnel 2008 (($) Office of the Prime Minister and Public Service Commission Section 02: Page 31 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Description 2008
 (($) Vatoa/Waicoka Road Upgrading Project Kuku District School Cautata Distrcti School Qalivakabau District School Bureiwai District School Quick Win Project Solevu Junior Secondary School Talatala Residence – Levuka Kioa Primary School Ratu Kamisese Mara College Burenitu District School Naivakawesi Kindergarten Uluiravo Settlement Waivou Village Qerelevu Water Catchment Resident Withholding Tax Cheque Book/Statement Fee/Withdrawal Transfer Total Payments CLOSING BALANCE Appendix 2.3: FNPF Reconciliation
 Office of the Prime Minister Details Total FNPF against salaries and wages for 2008: FNPF as per Financial Statement Add: December 2008 FNPF paid in January 2009 Payment made not entered into FMIS for 2008 Less: December 2007 FNPF paid in January 2008 FNPF for 2008 248,800 35,521 24,976 9,459 5,100 250,000 5,200 500 5,420 15,503 73,358 9,774 4,339 3,302 12,409 5,354 10 4,373,504 2,730,947 ($) 93,477 43,846 0 137,323 0 137,323 Gross Pay subject to FNPF (137,323 divided by 0.08) 1,716,538 Salaries and Wages for 2007 subject to FNPF: Salaries Wages and Allowance as per Financial Statement 1,292,800 Less Salaries and Wages not subject to FNPF Office of the Prime Minister and Public Service Commission Section 02: Page 32 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Details Salaries, Wages and Allowances for 2008 subject to FNPF DIFFERENCE Public Service Commission Details Total FNPF against salaries and wages for 2008: FNPF as per Financial Statement Add: December 2008 FNPF paid in January 2009 Payment made not entered into FMIS for 2008 Less: December 2007 FNPF paid in January 2008 FNPF for 2008 ($) 1,292,800 423,738 ($) 370,367 39,340 - 409,707 42,471 367,236 Gross Pay subject to FNPF (367,236 divided by 0.08) 4,590,450 Salaries and Wages for 2007 subject to FNPF: Salaries Wages and Allowance as per Financial Statement Less Salaries and Wages not subject to FNPF Salaries, Wages and allowances for 2007 subject
 to FNPF DIFFERENCE Appendix 2.4: VAT Reconciliations Office of the Prime Minister Details Total Income/Expenditure as per Expenditure Statement Less Expenditure not subject to VAT – Total SEG 1 & 2 Total Taxable Supplies as per VAT returns Less 2007 December Vat Add 2008 November Vat 2008 December Vat 2,928,179 5,393 2,922,786 1,667,664 ($) 3,303,022 1,830,115 1,472,907 956,787 (160,367) 26,219 53,783 876,422 Office of the Prime Minister and Public Service Commission Section 02: Page 33 REPORT OF THE
 AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Details Difference B) Difference between the actual VAT payments for the year ended 2008 and the balance disclosed in the general ledger VAT payments (VAT payments to FIRCA and VAT input) as per Statement of Financial Operation VAT payments (VAT payments to FIRCA and VAT input) as per VAT returns for the year 2008 Less 2007 December Vat Add 2008 November Vat 2008 December Vat Difference Public Service Commission Details A) Total Income/Expenditure as per Expenditure Statement Less Expenditure not subject to VAT - Total SEG 1 & 2 Total Taxable Supplies as per VAT returns Less 2007 December Vat Add 2008 December Vat Difference B) Actual VAT payments VAT payments (VAT payments to FIRCA and VAT input) as per Statement of Financial Operation VAT payments (VAT payments to FIRCA and VAT input) as per VAT returns for the year 2008 Less 2007 December Vat Add 2008 December Vat Difference ($) 596,485 64,727 58,681 (5,982) 2,051 3,889 58,639 6,088 ($) 9,779,938 8,427,408 1,352,530 1,295,220 422,831 337,856 1,210,245 142,285 105,475 19,989 (18,096) 27,761 29,654 75,821 Office of the Prime Minister and Public Service Commission Section 02: Page 34 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Appendix 2.5: Terminated Sponsorship Ref No.
Name Majors UDG 2K8/010 Silivia Koveikobau BAGCED Vernacular Lang/Lit & Language Jonetani Sawai Ilisavani R Waqatabu UDG 2K8/053 Ropoama Tubuna UDG 2K8/065 UDG 2K8/012 Emma Louise King UDG 2K8/038 Marika Qalo UDG 2K8/006 Maraia M Kelepi UDG 2K8/070 UDG 2K8/093 Kushal K Prakash UDG 2K8/091 Amit A Chand UDG2K8/52 Henry M Matolo UDG 2K7/010 Akuila T Tausere UDG 2K7/012 Pio T Vatanitawake UDG 2K7/013 Robert L Sovatabua Jale Q Sila UDG 2K7/077 Ilaitia Ralulu UDG 2K6/03 Vika T Bolatolu UDG 2K6/08 UDG 2K6/09 Jowana Kaloucava UDG 2K6/019 Adi Laisani Vuibau UDG 2K6/022 Sheenal P Nand UDG 2K6/029 Sera Vaucove UDG 2K6/033 Roneel R Chand UDG 2K6/063 Emele Vunileba UDG 2K6/050 Rt Irami S Lewaravu UDG 2K5/003 Mateo K Qiqiwaqa UDG 2K4/041 Ro Mariana Ro Lusiana BA Acctg/ Mgmt & Pub Admin BSC Computing Sc/IS BSCGCED Maths/Physics BCOM Acctg/IS BCOM Acctg/Eco BAGCED Acctg/Eco Diploma Geomatics BSc Maths/Eng BCOM Acctg/Mgmt BSc Computer Sc/Information System BCOM Acctg /Eco BCOM Acctg/ Eco BCOM Acctg /Eco BSCGCED Maths/Physics BA Acctg/Eco BA Acctg/Eco BA Actg/Eco BA Acctg/IS BA Acctg/IS BA Acctg/Bank Finance BA Acctg/ Bank Finance BA Mgmt & Pub Admin/Industrial Relations BA Mgmt/ Eco BA Acctg & Fin Mgmt/ Eco Appendix 2.6: Government Rented Offices as at 31/12/08 Location Landlord LD Ref Occupation/Department Labasa Local Timber Building Lautoka BPHL Rogrogo I Vuda 15/4/2636 15/4/1839 15/4/1340 Levuka Lomai Provincial Council Nabouwalu Bua Prov – Naulumatua Bua Prov – Naulumatua Bua Prov – Naulumatua 15/4/1135 15/4/943 Government
 Supplies Health Lands Immigration Common Area E & T Education CICPE - Cooperatives Registrar General W&C Women & Culture J & HA Health AFF- Agriculture & Fisheries RD & MEA - DO's Office T & T Road Transport E- Education Office of the Prime Minister and Public Service Commission Section 02: Page 35 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Location Landlord LD Ref Occupation/Department Nausori Rakiraki 15/4/1748 15/4/1953 15/4/556 15/4/2189
 15/4/2186 15/4/2125 15/4/1775 15/4/2313 15/4/2591 15/4/2657 15/4/1270 15/4/69 Paradise Mngt Bldg Vaileka House Vaileka House Vaileka House Vaileka House Vaileka House Vaileka House Keasuna Building FHL- Sukuna House FHL- Sukuna House Kelton Credit Corp Kelton Naibati Kelton Gunu House Kelton Gunu House Kelton Gunu House Marela House NLTB Yatulau Provincial Holding 15/4/2111 Yatulau Provincial Holding 15/4/2227 15/4/2332 Eddie Hin Bldg 15/4/2687A Fiji Ports Corporation 15/997 Fiji Ports Corporation 15/4/2203 Sigatoka Town Council 15/4/2495 Sigatoka Town Council 15/4/2387 Bluebird Printery 15/4/2074 Nasilivata House- Fong 15/4/1521 Janson Ho Ltd 15/4/746TC Janson Ho Ltd 15/4/2080 FNPF – Robinson Rd 15/4/2080 FNPF – Robinson Rd 15/4/2470 FNPF – AMB Bldg 15/4/2456 Fiji Red Cross 15/4/1665 Fiji Red Cross 15/4/2457 Fiji Red Cross 15/4/1975 Harm Ham Bldg 15/4/1975A Harm Ham Bldg 15/4/1975C Harm Ham Bldg Gulabdas 15/4/2054 Gulabdas Mohd.Tahir Khan Abacus Bldg(Jagdisgwar) Knolly Plaza (McGregor) Knolly Plaza (McGregor) Knolly Plaza (McGregor) Knolly Plaza (McGregor) Knolly Plaza (McGregor) Knolly Plaza (McGregor) Knolly Plaza (McGregor) Tabatolu House Sigatoka Suva Suva Suva Suva Suva Suva Suva Suva Suva Suva Suva Lautoka Lautoka Lautoka Sigatoka Sigatoka Suva Suva Suva Suva Suva Suva Suva Suva Suva Suva Suva Suva Suva Savusavu Savusavu Seqaqa Suva Suva Suva Suva Suva Suva Suva Suva Suva Office of the Prime Minister and Public Service Commission CICPE - Co-ops/MAFF Social
 Welfare & Women Supplies Cooperatives Health AFF Forestry Education Library (vacant) T & T Marines Bureau of Statistics Bureau of Statistics Telecom Regulatory Unit CICPE - Trade & Commerce DPP DPP DPP Education Fijian Affairs Health HQ Health HQ DMO Western FIMSA FIMSA Education & Labour Water Rates Weights & Measures Works & Energy HQ Lands (catography & Draghting ) European Union MAFF HQ MAFF HQ Corperatives Education LMR - Land Information LMR - Control Section Youth & Sport Education Education
 Immigration Supplies Govt.Supplies Social Welfare Regional Dev.DISMAC Regional Dev.Rural Housing Regional Dev.Comm.Eastern Regional Dev.Accounts/Registry Regional Development.
Regional Development Fijian Affairs Weights & Measures 15/4/2281 15/4/2398 15/4/1986 15/4/1986A 15/4/2361 Section 02: Page 36 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Location Landlord LD Ref Occupation/Department Suva Suva Suva Suva Suva Suva Suva Suva Suva Suva Suva Suva Nausori Nausori Nausori Nausori Vinod Patel & Co. Vinod Patel & Co. Vinod Patel & Co. Lotus Garment P.D.Patel P.D.Patel P.D.Patel Manohan Bldg Manohan Bldg Manohan Bldg Manohan Bldg Manohan Bldg Youneeda N.B.Patel Bldg Three Kings Three Kings 15/4/2064 15/4/2158 15/4/2164 15/4/2070 15/4/2607 15/4/2649 15/4/2649A 15/4/2649B 15/4/2649C 15/4/2649D 15/4/2605 15/4/2367 15/4/2551 15/4/2683 Education – CDU Careers Education – Archives Police Dept.
Environment Labour Poverty/Agriculture Police Police Police Police Police Water Rates Police Magistrate Court Family Court Office of the Prime Minister and Public Service Commission Section 02: Page 37 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009________________ Section 3 Office of the Attorney General and Public Enterprise Role and Responsibilities The Office of the Solicitor General is responsible for providing quality legal advise to all ministries and department; drafting Government Bills and Subsidiary Legislations; undertaking systematic review; reform and development of laws in Fiji Islands; undertaking Statutory Law Revision; providing legal assistance to impoverished persons in family and criminal laws through legal representation and advice.
The Ministry of Public Enterprises and Sector Reform, under the Public Enterprise Act 1996, is responsible for overseeing and implementing Government public enterprise reform programme with the intention of increasing the efficiency and effectiveness of the public enterprise sector.

Under the Act, the Ministry will continue to monitor the performance of public enterprises declared as Government Commercial Companies [GCCs].
The Ministry also implements and monitors the restructuring or re-organisation of identified Government entities.
There are currently 11 GCCs and 5 Commercial Statutory Authorities [CSAs] Table of Contents 3.1 3.2 3.3 3.4 3.5 FINANCIAL STATEMENT ........................................................................................................................ 1 Audit Opinion .................................................................................................................. 1 Statement of Receipts and Expenditure ........................................................................ 2 Statement of Output Costs ............................................................................................. 3 Appropriation Statement ................................................................................................ 3 Statement of Losses ...................................................................................................... 4 AUDIT FINDINGS .................................................................................................................................... 4 Agency Financial Statements ........................................................................................ 4 3.6 Revenue ......................................................................................................................... 5 3.7 Revolving Fund Account ................................................................................................ 5 3.8 VAT Reconciliation ......................................................................................................... 6 3.9 3.10 VAT Paid on Seg 1 & 2 .................................................................................................. 7 3.11 Deemed to Resign Cases .............................................................................................. 7 3.12 Payment of Unauthorised Bills ....................................................................................... 9 Stocktake of Fixed Assets & Expendable Items ............................................................ 9 3.13 Appendix 3.1: Statement of Output Costs for 2008 ................................................................. 11 Appendix 3.2: Flash Drives ...................................................................................................... 13 FINANCIAL STATEMENT 3.1 Audit Opinion The audit of the 2008 accounts of the Office of the Attorney General and Public Enterprise resulted in the issue of a qualified audit report.
The qualifications are as follows.

Office of the Attorney General and Public Enterprise Section 03: Page 1 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009________________  The Office had consolidated its expenditures into three Statements of Output Costs, whereas the Budget Estimates 2008 prescribes ten outputs.
The facility to allow the measurement and accounting of output costs has yet to be integrated in the Financial Management Information System (FMIS) of government.

It is not possible therefore to determine the accuracy of the expenditures incurred by the Office under each output.

 The Office submitted its Statement of Losses despite no stock take undertaken for inventories during the year.

The last stock take was carried out in 2005.


Therefore, the Statement of Losses does not portray an accurate picture as losses during the year may not be recorded.

 The Office has not provided the Trust Fund Account Statement of Receipts and Payments contrary to Finance Instructions 82(1).

The Financial Management Information System shows that the Office as at 31/12/07 has operating trust funds totalling $313,336.
3.2 Statement of Receipts and Expenditure The Office collected revenue amounting to $182,218 and incurred total expenditures of $8,928,071 in 2008.
Table 3.1: Statement of Receipts and Expenditure for 2008 Description RECEIPTS State Revenue Hotel License Liquor License Miscellaneous Fees Other Revenue Total State Revenue Agency Revenue Miscellaneous Total Agency Revenue 2008 $ 2007 $ 136,446 1,568 1,113 28,331 167,458 79,235 18,758 12,917 18,739 129,649 14,760 14,760 10,038 10,038 TOTAL REVENUE 182,218 139,687 EXPENDITURE Operating Established Staff Unestablished Staff Travel & Communication Maintenance & Operations Purchase of Goods & Services Operating Grants & Transfers Special Expenditure Total Operating Expenditures Capital Expenditure Capital Construction Capital Purchases Capital Grants & Transfers Total Capital Expenditure 2,159,295 158,173 140,282 230,292 1,324,057 2,979,323 1,309,841 8,301,263 10,473 120,289 - 130,762 1,720,479 70,786 116,160 139,811 913,565 524,342 1,847,274 5,332,417 - - - - Office of the Attorney General and Public Enterprise Section 03: Page 2 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009________________ Description 2008 $ 2007 $ Value Added Tax 496,046 594,991 TOTAL EXPENDITURES 8,928,071 5,927,408 3.3 Statement of Output Costs The Statement of Output Costs consolidates the 10 outputs prescribed in the Budget Estimates.
These are detailed in Appendix 3.1.

3.4 Appropriation Statement The Office incurred expenditures totalling $8,928,071 in 2008 against the budget of $10,251,000 resulting in a savings of $1,322,929 or 13%.

Details of expenditures against the budget estimates are provided in Table 3.2.
Table 3.2: Appropriation Statement for 2008 SEG Item Established Staff Unestablished Staff Travel & Communication Maintenance & Operations Purchase of Goods & Services Operating Grants & Transfers Special Expenditure Total Operating Costs Capital Expenditure Capital Construction Capital Purchases Capital Grants & Transfers Total Capital Expenditure 13 Value Added Tax Budget Estimate $ 2,882,300 105,100 154,300 235,600 1,383,100 605,400 3,945,400 9,311,200 Changes $ (73,000) 73,000 0 20,000 (25,241) 2,382,252 (2,382,252) (5,241) 0 200,000 0 200,000 739,800 11,782 (6,541) 0 5,241 0 0 Revised Estimate $ Actual Expenditure $ 2,809,300 178,100 154,300 255,600 1,357,859 2,987,652 1,563,148 9,305,959 11,782 193,459 0 205,241 2,159,295 158,173 140,282 230,292 1,324,057 2,979,323 1,309,841 8,301,263 10,473 120,289 0 130,762 739,800 496,046 10,251,000 8,928,071 Carry – Over $ 0 0 0 0 0 0 0 0 Lapsed Appropriation $ 650,005 19,927 14,018 25,308 33,802 8,329 253,307 1,004,696 0 0 0 0 0 0 1,309 73,170 0 74,479 243,754 1,322,929 TOTAL EXPENDITURE 10,251,000 The Ministry of Finance approved the transfer of following funds:  $73,000 from Seg 1 Established Staff to Seg 2 Unestablished Staff to cover 5% pay restoration.
 $25,240 from Seg 5 Purchase of Goods and Services to Seg 4 Maintenance and Operations for operational cost on maintenance of vehicle due to wear and tear.

 $2,382,252 from Seg 7 Special Expenditure to Seg 6 Operating Grants and Transfers to facilitate FICAC’s self accounting programme.
Office of the Attorney General and Public Enterprise Section 03: Page 3 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009________________  $11,782 from Seg 9 Capital Purchase to Seg 8 Capital Construction to finance purchase of a vehicle.

3.5 Statement of Losses There were no losses of money or fixed assets recorded in 2008.
AUDIT FINDINGS 3.6 Agency Financial Statements Commencing 2006 financial year, each annual report must include financial statements which are prepared and signed in accordance with the Finance Instructions, audited by the Auditor General, and accompanied by an audit opinion prepared by the Auditor General.1 The draft financial statements must be submitted to the Auditor – General by 31 March in the following year, or within such other time as agreed to with the Auditor – General.2 The Office of the Attorney General and Public Enterprise submitted its financial statements for audit on 07/04/09.
Audit could not substantiate the amounts in the Statements of Output Costs as the facility to allow the measurement and accounting of these costs has yet to be integrated in the Financial Management Information System (FMIS) of government.

The Office of Attorney General provided a Statement of Losses despite no stock take undertaken for inventories for past three years.

Therefore, the Statement of Losses does not portray an accurate picture as losses during the year may not be recorded.
Recommendation The Office should ensure that the requirements of the Finance Instructions 82 are strictly followed in the preparation of the financial statements.

Management Comments We are committed to ensuring that we comply with Finance Instructions when preparing the Agency Financial Statements, however you will note that the reports required will be extracted from the Financial Management Information System.
The Statement of output cost is yet to be developed and integrated in the Financial Management Information System.

The problem is beyond the offices control as we depend on Ministry of Finance for the full implementation of the FMIS.

The outputs stated were reflected by Budget and five of which belong to Justice Department.

The office does not operate a Trust Fund Account which warrants a Trust Fund Statement of Receipts and Payments report to accompany the Agency Annual Report.
You will note that the Financial Instructions 82 (1) (h) states “a trust account statement of receipts and payments (where applicable.
)” 1 Finance Instructions 2005 – 81 (2) 2 Finance Instructions 2005 – 81 (3) Office of the Attorney General and Public Enterprise Section 03: Page 4 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009________________ 3.7 Revenue Each Accounting Head shall ensure that revenue is recorded against the correct account; the recording of revenue is reconciled monthly with the Ministry of Finance; the Ministry of Finance is advised of any errors or discrepancies within 10 working days after the end of each month; and VAT is correctly accounted for and remitted as required.3 The Office failed to prepare revenue reconciliation for audit verification.
Audit had summarised the entries made in the revenue register $1,775,320.49 and a variance of $1,593,847.18 was noted between the revenue register figure and FMIS.

In absence of the monthly reconciliation, the accuracy of the revenue balances reported in the financial statement could not be substantiated.

Recommendations  The office should reconcile the variances noted in the two records in order to reflect the correct revenue balance.
 The office should conduct monthly reconciliation with supervisory checks carried out on the reconciliation prepared.

Management Comments Revenue received as Rental Official (270202) and Commission (270301) is generated directly from FMIS through Wages payment and will not be recorded in the office register.

Likewise other non revenue items totalling $1,602,942.04 in the office register will not appear in the FMIS revenue allocations as they are for other allocations.
The variance is not a result of incorrect posting as suggested but a mere lack of understanding the system.

3.8 Revolving Fund Account The Accounts Officer must promptly follow up accounts that fall due.
If recovery is unsuccessful after one month, the following actions shall be taken: i) ii) A demand notice shall be sent to the debtor after his/her debt has been overdue for more than No further credit shall be extended to the debtor; iii) one month; If the account still remains unpaid after the first demand notice was issued, a final notice shall be issued demanding payment within fourteen days.4 A variance of $16,765.36 was noted in the RFA balance shown between the Office’s records and FMIS and the dishonoured cheques (seven in number) with an aggregate value of $1,959.29 with dating one as far back as 1994 were still showing in the December 2008 reconciliation.
The presence of these long outstanding items shows the laxity of the office in trying to clear their accounts.

3 Finance Instructions 2005 – 30(1) 4 Finance Manual-Office of the Attorney General 2005.
Section 9.2.1 Office of the Attorney General and Public Enterprise Section 03: Page 5 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009________________ Recommendations  The Office should immediately reconcile the variance of $16,765.36 in order to reflect the correct Revolving Fund Account balance.

 Necessary adjustments by way of journal vouchers should be passed by the Office to account for all the dishonored cheques which are more than six months old.
Management Comments The variance stated above was adjusted by $7,537.50 at the close of the accounts thus reducing the outstanding to $9,717.

We have also noted your comments and have made necessary adjustments for dishonoured cheques.
3.9 VAT Reconciliation Subject to the provision of the Vat Decree 1991, the tax shall be charged in accordance with the provisions of this Decree at the rate of twelve and a half percent on the supply (but not including an exempt supply) in Fiji of goods and services, by a registered person in the course or furtherance of a taxable activity carried on by that person, by reference to the value of that supply.5 Office of the Attorney General A review of the VAT returns and supporting documents and VAT reconciliations carried out during the audit revealed an un-reconciled balance of ($217,085.68) between the taxable supplies as per VAT Return and the total income/expenditure as per the Statement of Receipts and Expenditure.
Audit also noted a variance of ($20,201.52) between the actual VAT payments for 2008 and the balances disclosed in the general ledger (FMIS).

Refer to Appendix 3.3 for details.

Department of Public Enterprise A review of the VAT returns and supporting documents and VAT reconciliations carried out during the audit revealed an un-reconciled balance of (29,366.35) between the taxable supplies as per VAT Return and the total income/expenditure as per the Statement of Receipts and Expenditure.
Audit also noted a variance of (2,059.43) between the actual VAT payments for 2008 and the balances disclosed in the general ledger (FMIS).

Refer to Appendix 3.3 for details.

Recommendations  The Office should review its VAT records and reconciliations and provide explanations for the variances.

 Supervisory checks on the preparation of VAT Returns should be improved to ensure that balances reflected in the VAT Returns reconcile with the ledgers.
Management Comments We have noted your comments but allow us time to reconcile our records and advise you later.

5 Value Added Tax Decree 1991 4th edition revised to 30/04/04 – section 15 (1) Office of the Attorney General and Public Enterprise Section 03: Page 6 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009________________ 3.10 VAT Paid on Seg 1 & 2 VAT is not to be levied on SEG 1 and SEG 2.
The amount allocated in SEG 13 in the respective Ministries and Departments in 2008 budget is for payment of VAT on SGE’s 3, 4, 5, 7, 8 and 9 only.6 Our review of the VAT Returns and accompanying records revealed that VAT was paid on Seg 1 and Seg 2 Expenditures from January to May 2008, contrary to Finance Circular no 4/2008.
Refer to the table below for details: SEG 1 2 Total VAT January $ 15,065.72 2,054.62 17,120.34 1,902.26 February $ 12,564.92 1,602.24 14,167.16 1,574.13 VAT PAID ON SEG 1 & 2 April $ 6,266.70 1,500.70 7,767.40 863.04 March $ 8,332.33 1,794.26 10,126.59 1,125.18 May $ 12,374.86 1,484.26 13,859.12 1,539.90 Total $ 54,604.53 8,436.08 63,040.61 7,004.51 The payment of VAT on Seg 1 and Seg 2 has resulted in overpayment of VAT by $7,004.51.
Recommendation The Department should reconcile its VAT records and ensure that overpayment is recovered.

Management Comments The above is now being reconciled and a confirmation of the amount paid, the department shall make the necessary adjustments to GL, submit amended and correct returns to and request for refunds due from FIRCA.

The department should reconcile its VAT records and ensure that overpayment is recovered .
3.11 Deemed to Resign Cases If within seven days of the beginning of the absence, the employee does not tell the Commission the reason for the absence and the expected date of his or her return to duty, the employee is taken to have resigned from the public service and forfeits all rights and entitlements in relation to the employee’s public service employment.7 From review of personal files, it was noted that a number of officers were deemed to have resigned for failing to resume work after their annual leave abroad.
Refer below for examples:  Rajka Prasad, Principal Administrative Officer took 33 days of annual leave and went abroad.

He requested for leave without pay which was approved by the Public Service Commission.

He failed to resume duties on 2/1/09.

 Senior Secretary Vani Leakai took 42 days of consecutive long service leave effective from 4/3/08 and was due to resume duties on 15/4/08.
Since she was abroad, she requested for one month leave without pay (LWP) which was approved on the condition that she commenced work on 15/5/08.

However, the officer again requested for another 12 months extension from 15/5/09 but the Public Service Commission disapproved the request and she was deemed to have resigned.

She was terminated from employment on 2/05/08.

 Principal Legal Officer Zulfikar Khan took 45.5 days of unauthorised leave in 2007, with a monetary value of $5,401.57.
The details are listed below:  40.5 consecutive days of unauthorised absence from office; 6 Finance Circular No 4/2008 of 11/03/08 7 PSC Regulation 1999 s.20(3) Office of the Attorney General and Public Enterprise Section 03: Page 7 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009________________  3 days of sick leave without approval; and  2 days of bereavement leave without approval.
In 2008, the officer was absent from duty from 12/05/08 without informing management and was considered to be a deemed to resign case with effect from 06/06/08 Audit also noted that Verenaisi Bavadra, a Senior Librarian, resigned on 26/09/09, the same day she handed in her resignation.

Since she did not give the mandatory 3 months notice, the Department was not able to recover the sum of $1,947.60 from her salary.

Despite being issued various reminders, the officer failed to make any repayment.
Discussions with the Principal Accounts Officer revealed that the case would be referred to the Small Claims Tribunal for recovery.

The above findings indicate that there is a poor control over the administration of leave and recoveries of overpayments of salaries.

The implications of taking extended leave as well as unauthorised leave is that there would be a backlog in the officers’ work and required outputs are not delivered on time.
Recommendations  The Principal Administrative Officer should promptly notify management whenever an officer takes unauthorised leave so that appropriate actions could be taken on a timely basis.

 The Office should ensure that any overpayments of salaries are recovered from an officer before resigning from the service.
Management Comments As for Vani Leakai, we had approved for her leave and also requested for overseas leave which was approved by PSC on the grounds that she resume work on the date mentioned.

When she was still in the U.S. she requested for further extension which was not granted.

We indicated to her to take heed of the date of resumption but she stayed on in the U.S. and is still there since.

The officer was deemed to have resigned as she had been absent for more than the required seven (7) days.
The same goes for Mr. Rajka Prasad.

He had taken his wife to Canada for health treatment as she was sick.

We granted a six months extension to his leave without pay when he produced medical evidence that his wife was undergoing further medical examination and observation.

We then informed the officer that any further extension will not be granted and he had to resume duty on the date stated to him.

We did not hear again from him and know for a fact that he is residing in Canada.
He was also terminated on the ground of deemed to have resigned.

We had granted both on this instances in good faith and on the understanding that they that they would return.

All the others who were granted the same have returned except for the above.

As for Verenaisi Bavadra, she submitted her letter for resignation on the day she left the office.

She has resumed with the South Pacific Community and we have written to her on numerous occasions about her dues and she has promised to pay.
But so far, nothing has been paid by the officer.

We have in fact written to her current workplace and still has not made any payment.

Our next step is to go through the Small Claims Tribunal and is currently pursing that now.

We hope that this course of action will ensure her prompt payment.

As for Zulfikar Sahu Khan, he just disappeared from the office without any information.

We visited him twice at his home but had changed his address and he was staying at another location.
He was away for more than seven days without any explanation, and we gave him a few more days but he continued to stay away.

We also terminated his services on the ground of deemed resignation because of his absence.
We have written to him concerning his dues and we are still waiting for his response Office of the Attorney General and Public Enterprise Section 03: Page 8 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009________________ 3.12 Payment of Unauthorised Bills Ministries/Departments must prepare formal contracts for all consultancy engagements.

The draft consultancy contracts must be vetted by the Solicitor General to ensure that Government’s interest is protected.
The contract must clearly outline the terms and conditions of the consultancy and must be endorsed by the organisation and the Consultant.8 The Queens Councils hired to defend the government in the case against the former Prime Minister Laisenia Qarase were accommodated at Valenitadra Homestays in Tamavua.
Review of payment vouchers revealed that a payment made to Valenitadra Homestays for $18,764.59 included a sum of $1,207.20 which was for the purchases of liquor, which is an expense not covered in the consultants’ contracts.

The above implies that expenditures incurred by consultants are not thoroughly scrutinised before payments are processed.
Recommendations  The Accounts Officer should ensure that only authorized expenditures are processed for payments and that expenditures not covered in the contracts are paid by the consultants.

 All payments already made by the Office with regards to expenses incurred by consultants should be reviewed and any unauthorized expenditures already paid recovered from the relevant consultants.

Management Comments We have noted your concern.


The initial bill of $20,060.69 sent by Valenitadra homestay was reduced to $18,764.59 after we disputed some of the charges which should have been debited to the consultants.
We had also sought clarification on some of the charges you had identified but was confirmed to be the appetiser in the meals served 3.13 Stocktake of Fixed Assets & Expendable Items The Principal Accounts Officer shall nominate two stocktake officers to undertake an annual stocktake of fixed assets and expandable items at a specified date.9 Audit noted that the Office has not undertaken a stocktake of its fixed assets since 2005. Review of the expandable ledger indicated that some items were missing and some items purchased were not accounted for in the register.
A stocktake of flash drives (USB) revealed that twelve flash drives were not accounted for.

Refer to appendix 3.2.

The officer in charge stated that she might have issued four flash drives to the Lautoka Office but she failed to produce any evidence.

A total of four laptops and ten desktops purchased in 2008 have not been recorded in the Fixed Assets Register.
If the computers and laptops are misplaced or damaged, it would be difficult to identify officers to be accountable if details are not recorded in the Fixed Assets Register.

Without the annual stocktake and updating of the Fixed Assets Register, audit cannot place any reliance on the Statement of Losses provided by the Office in its Agency Financial Statement.
8 PSC Circular 23/2001 9 Finance Manual 11(4) Office of the Attorney General and Public Enterprise Section 03: Page 9 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009________________ Recommendations  A stocktake should be conducted on an annual basis to determine whether there are any variances between the recorded number assets and value to what is actually in stock.
 The officer in charge should also ensure that all items purchased throughout the year are recorded in the Fixed Assets Register on a timely basis.

Management Comments Your concern on the annual board of survey has been noted.

A three member team has now been appointed to carry out board of survey for 2008.

We also wish to dispute the issue of the unaccounted flash drives and unrecorded laptops and desktops purchased in 2008.
Despite not up to date with our board of survey, we confirm that our records are properly maintained and that they were verified to be updated and correct by the Audit supervisor prior to the tabling of this report.
Office of the Attorney General and Public Enterprise Section 03: Page 10 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009________________ Appendix 3.1: Statement of Output Costs for 2008 Portfolio Leadership Policy Advise and Secretariat Support Description EXPENDITURE Operating Costs Established Staff Unestablished Staff Travel & Communication Maintenance & Operations Purchase of Goods & Services Operating Grants & Transfers Special Expenditure Total Operating Costs Capital Expenditure Capital Construction Capital Purchases Capital Grants & Transfers Total Capital Expenditure 2008 $ 2007 $ 1,251,384 98,160 79,311 135,112 967,906 2,234,492 982,381 5,748,746 1,290,360 53,090 87,120 104,859 685,173 393,257 1,385,457 3,999,316 7,855 90,217 0 98,072 - - - - Value Added Tax 354,029 446,243 TOTAL EXPENDITURE 6,200,847 4,445,559 Consulting Services – Litigation & Advisory, Legislative Drafting, Legal Reform Description EXPENDITURE Operating Costs Established Staff Unestablished Staff Travel & Communication Maintenance & Operations Purchase of Goods & Services Operating Grants & Transfers Special Expenditure Total Operating Costs Capital Expenditure Capital Construction Capital Purchases Capital Grants & Transfers Total Capital Expenditure 2008 $ 2007 $ 250,277 19,632 15,862 27,022 193,581 446,898 196,476 1,149,748 1,571 18,043 0 19,614 258,071 10,617 17,424 20,971 137,034 78,651 277,091 799,859 - - - - Value Added Tax 70,806 89,249 TOTAL EXPENDITURE 1,240,168 889,108 Office of the
 Attorney General and Public Enterprise Section 03: Page 11 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009________________ Consulting Services Legal Aid Description EXPENDITURE Operating Costs Established Staff Unestablished Staff Travel & Communication Maintenance & Operations Purchase of Goods & Services Operating Grants & Transfers Special Expenditure Total Operating Costs Capital Expenditure Capital Construction Capital Purchases Capital Grants & Transfers Total Capital Expenditure 2008 $ 2007 $ 166,852 13,088 10,575 18,015 129,054 297,932 130,984 766,499 1,047 12,029 0 13,076 172,048 7,079 11,616 13,981 91,358 52,434 184,726 533,242 - - - - Value Added Tax 47,204 59,499 TOTAL EXPENDITURE 826,780 592,741 Licensing, Compliance and Monitoring Description EXPENDITURE Operating Costs Established Staff Unestablished Staff Travel & Communication Maintenance & Operations Purchase of Goods & Services Operating Grants & Transfers Special Expenditure Total Operating Costs Capital Expenditure Capital Construction Capital Purchases Capital Grants & Transfers Total Capital Expenditure Value Added Tax TOTAL EXPENDITURE 2008 $ 2007 $ 490,782 27,294 34,534 50,142 33,515 0 0 636,267 0 0 0 0 24,008 660,275 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Office of the Attorney General and Public Enterprise Section 03: Page 12 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009________________ Appendix 3.2: Flash Drives Item USB
 2GB USB 1GB TOTAL No.
Purchased 10 25 35 No.

Issued 1 10 11 No.
in Storage 8 4 12 Unaccounted 1 11 12 Appendix 3.3: VAT Reconciliation Office of the Attorney General Variance between the taxable supplies as per VAT Return and the total income/expenditure as per the Statement of Receipts and Expenditure: Details Total income/expenditure as per Statement of Receipts and Expenditure Less: Expenditure not subject to VAT– SEG 1, 2 & 6 Less: Total taxable supplies as per VAT Returns Un-reconciled variance $ 8,260,258 5,296,791 2,963,467 3,180,553 (217,085.68) Variance between actual VAT payments for 2008 and the balances disclosed in the general ledger (FMIS): Details VAT payments (VAT payments to FIRCA and VAT Input) as per Statement of Receipts and Expenditure VAT payments (VAT payments to FIRCA and VAT Input) as per VAT Returns for 2007 Un-reconciled variance Public Enterprise $ 472,038 492,240 (20,202) Variance between the taxable supplies as per VAT Return and the total income/expenditure as per the Statement of Receipts and Expenditure: Details Total income/expenditure as per Statement of Receipts and Expenditure Less: Expenditure not subject to VAT– SEG 1 & Less: Total taxable supplies as per VAT Returns Un-reconciled variance $ 660,275 455,036 205,239 234,606 (29,366) Office of the Attorney General and Public Enterprise Section 03: Page 13 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009________________ Variance between actual VAT payments for 2008 and the balances disclosed in the general ledger (FMIS): Details VAT payments (VAT payments
 to FIRCA and VAT Input) as per Statement of Receipts and Expenditure VAT payments (VAT payments to FIRCA and VAT Input) as per VAT Returns for 2007 Un-reconciled variance $ 24,008 26,067 (2,059) Office of the Attorney General and Public Enterprise Section 03: Page 14 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Section 4 Ministry of Finance Role and Responsibilities The Ministry is responsible for formulating and implementing fiscal, financial and monetary policies.
Its main functions are the collection and disbursement of public revenue, raising and repayment of loans, and developments of economic policies.

It also provides various services to other departments, which include provision of printing and stationery services by the Government Printer, procurement and processing of supplies through Government Supplies Department.
Also coming under the ambit of the Ministry of Finance are the several statutory bodies, namely, the Reserve Bank of Fiji, the Fiji Development Bank, the Colonial National Bank, the Fiji National Provident Fund and the Unit Trust of Fiji.
Table of Contents 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.9 4.10 CONSOLIDATED FINANCIAL STATEMENT .......................................................................................... 2 Audit Opinion .................................................................................................................. 2 Statement of Receipts and Expenditure ........................................................................ 3 Statement of Output Costs ............................................................................................. 4 Appropriation Statement ................................................................................................ 4 Statement of Losses ...................................................................................................... 4 Manufacturing Account – Trading & Manufacturing Activity .......................................... 5 Trading Account – Trading & Manufacturing Activity ..................................................... 5 Profit & Loss Statement – Trading & Manufacturing Activity ......................................... 6 Balance Sheet – Trading & Manufacturing Activity ........................................................ 6 Trust Account Statement of Receipts and Payments .................................................... 7 AUDIT FINDINGS .................................................................................................................................... 7 MINISTRY OF FINANCE
 ......................................................................................................................... 7 Payroll ............................................................................................................................ 7 4.11 4.12 Non - Payroll .................................................................................................................. 8 4.13 Revenue ....................................................................................................................... 10 4.14 Internal Audit ................................................................................................................ 12 Financial Management Reform .................................................................................... 13 4.15 4.16 Disclosure of Head 50, 51 & 52 in the Appropriation Statement ................................. 15 4.17 Excess Expenditure after Virement .............................................................................. 16 4.18 Discrepancies in the Drawings Account Balances ....................................................... 17 4.19 Head 50 – Miscellaneous Services .............................................................................. 18 Pensions – Head 51 ..................................................................................................... 19 4.20 4.21 Investment .................................................................................................................... 23
23 Surcharge ..................................................................................................................... 24 4.22 4.23 Motor Vehicle ............................................................................................................... 24 Trust Fund Reconciliation ............................................................................................ 27 4.24 NATIONAL PLANNING OFFICE ........................................................................................................... 28 4.25 Drawings Account discrepancies ................................................................................. 28 Section 04: Page 1 Ministry of Finance REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ 4.29 4.30 4.31 FNPF Reconciliation .................................................................................................... 29 4.26 4.27 VAT Reconciliations ..................................................................................................... 29 4.28 Negative Expenditures Incurred at Item level Basis .................................................... 30 GOVERNMENT PROCUREMENT OFFICE .......................................................................................... 31 Trading and Manufacturing Account (TMA) ................................................................. 31 Statement of Losses ....................................................................................................
34 Trust Fund Account ...................................................................................................... 35 GOVERNMENT PRINTING & STATIONERY DEPARTMENT .............................................................. 36 Trading and Manufacturing Account ............................................................................ 36 Statement of Losses .................................................................................................... 44 INFORMATION TECHNOLOGY & COMPUTING SERICES ................................................................ 45 4.34 Statement of Losses .................................................................................................... 45 Appendix 4.1: Statement of Output Costs................................................................................ 47 Appendix 4.2: FNPF Reconciliation ......................................................................................... 52 Appendix 4.3: Outstanding Audits ............................................................................................ 53 Appendix 4.4: Discrepancies in the Pensions Record ............................................................. 55 Appendix 4.5: Pending Surcharge Cases ................................................................................ 56 Appendix 4.6: Alleged Misuse of Government Vehicles .......................................................... 59 4.32 4.33 CONSOLIDATED FINANCIAL STATEMENT 4.1 Audit Opinion The audit of the 2008
 accounts of the Ministry of Finance resulted in the issue of a qualified audit report.
The qualifications are as follows.

a) The amounts reflected in the Statement of Output Costs have been estimated as the facility to allow the measurement and accounting of these costs has yet to be integrated in the Financial Management Information Systems (FMIS) of government.

It is not possible therefore to determine the accuracy of the expenditures incurred by the Ministry under each of the eleven outputs.
b) Unsubstantiated adjustments totalling $9.9 million debit postings and $15.3 credit postings were made in the Equity account.

c) The Ministry did not produce a Stock Certificate for Government Supplies ($4.5m) and Printing and Stationery Department’s ($2.1m) finished goods valued at $6.6 million as at 31/12/08.
Without further qualification to the opinion expressed above, attention is drawn to the following matters: (i) The accuracy of the Statement of Losses (Schedule 11) cannot be determined as only one Board of Survey was carried out on one of the six departments of the Ministry.
Ministry of Finance Section 04: Page 2 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ (ii) The closing balances of Revolving Fund Account – Miscellaneous, Operating Trust Fund Account and Arrears of Revenue are not reflected in the Agency’s Financial Statement.
(iii) The Appropriation Statement on Schedule 5 does not include budgets for Head 50 Miscellaneous Services [$38.0 million]; Head 51 Pensions, Gratuities and Compassionate Allowances [$35.5 million] and Head 52 Charges on Accounts of Public Debt [$428 million].

(iv) Bank accounts balances totalling $1 million for Overseas Missions and Agencies recorded under Head 4 (Ministry of Finance) in the general ledger have not been reconciled nor confirmed by the relevant overseas banks.
4.2 Statement of Receipts and Expenditure The Ministry collected revenue totalling $1,711,577,278 and incurred a total expenditure of $83,155,307 in 2008.
TABLE 4.1: STATEMENT OF RECEIPTS AND EXPENDITURE IN 2008 Description RECEIPTS State Revenue Operating Revenue Investing Revenue Borrowing Revenue Total State Revenue Agency Revenue Board Member Miscellaneous Revenue Sale of Photographs Sales of Publications Total Agency Revenue TOTAL REVENUE EXPENDITURES Operating Established staff Unestablished staff Travel & communication Maintenance & Operations Purchase of goods & services Operating grants & transfers Special expenditures Total Operating Costs Capital Expenditure Capital Construction Capital Purchases Capital Grants & Transfers Total Capital Expenditure Value Added Tax TOTAL EXPENDITURES 2008 $ 2007 $ 1,315,039,972 41,802,155 345,648,652 1,702,490,779 1,264,935,088 43,383,007 118,862,870 1,427,180,965 74,315 8,832,645 --- Total revenue increased by $276,285,023 or 19% due to increases in operating revenue by $50,104,884 and borrowing revenue by $226,785,782 in 2008 compared to 2007.
Total expenditure Ministry of Finance Section 04: Page 3 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ declined by $6,959,835 or 8% due to decline in establish staff costs by $785,667, special expenditure by $3,728,760, capital purchase by $1,151,104, capital grants and transfers by $2,027,247 and VAT by $1,424,583.

4.3 Statement of Output Costs The Statement of Output Costs consolidates the 11 outputs prescribed in the Budget Estimates.
These are detailed in Appendix 4.1.

4.4 Appropriation Statement The Ministry incurred expenditures totalling $83,155,307 in 2008 against the budget of $88,666,900 resulting in a savings of $5,511,593 or 6%.

Details of expenditures against the budget estimates are provided in Table 4.2.
TABLE 4.2: APPROPRIATION STATEMENT FOR 2008 – HEAD 4 SEG Item Established Staff Unestablished Staff Travel & Communication Maintenance & Operations Purchase of Goods & Services Operating Grants & Transfers Special Expenditure Total Operating Costs Capital Construction Capital Purchases Capital Grants and Transfers Total Capital Expenditure Value Added Tax TOTAL EXPENDITURE Budget Estimate $ 13,000,400 1,526,200 1,801,400 2,713,700 769,600 38,122,400 3,264,800 61,198,500 2,100,000 4,987,000 20,000,000 27,087,000 1,954,700 90,240,200 Changes $ (843,400) 35,730 (115,179) 740,770 23,900 507,000 (114,000) 234,821 --- 626,133 (2,474,021) (1,847,888) 39,767 (1,573,300) Revised Estimate $ Actual Expenditure $ 12,157,000 1,561,930 1,686,221 3,454,470 793,500 38,629,400 3,150,800 61,433,321 2,100,000 5,613,133 17,525,979 25,239,112 1,994,467 88,666,900 10,270,840 1,474,895 1,576,533 2,959,536 435,099 38,622,144 2,732,615 58,071,662 2,099,999 4,906,838 16,588,303 23,595,140 1,488,505 83,155,307 Carry – Over $ --- --- --- --- --- --- --- --- --- --- --- --- --- --- Lapsed Appropriation $ 1,886,160 87,035 109,688 494,934 358,401 7,256 418,185 3,361,659 1 706,295 937,676 1,643,972 505,962 5,511,593 The Ministry approved the transfer of funds totalling $1,573,300 (out) and $796,022 (in) of Head 4 and Head 50 respectively.
The additional Appropriation of $570,000 from the Lending Fund Account to the Operating Fund Account was vired into Head 50.

The Appropriation Statements for Heads 50 Miscellaneous Services, 51 Pensions, Gratuities and Compassionate Allowances, 52 Charges on Account of Public Debt were not provided for audit.

4.5 Statement of Losses The Ministry of Finance recorded no losses in 2008.
However, following the annual Board of Survey for the Ministry alone, assets totalling $31,277.50 was written off as per table 4.3 below: Ministry of Finance Section 04: Page 4 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ TABLE 4.3: ASSETS WRITTEN OFF IN 2008 Section FMIS GM858 Payment Section Debt Unit Debt Unit Inspection Debt Unit Admin - PS Training Unit DSF (B) Budget Total BOS No.
18/11/08 49/11/08 50/11/08 108/10/08 106/11/08 01/09/08 35/05/08 10/02/08 11/02/08 23/02/08 24/02/08 Amount $ 199.00 130.50 2,500.00 2,500.00 2,300.00 13,300.00 950.00 199.00 499.00 4,200.00 4,500.00 31,277.50 Date Approved 13/11/08 02/12/08 02/12/08 23/10/08 23/10/08 15,09/08 12/05/08 26/02/08 26/02/08 04/03/08 04/03/08 Item Urn 1 Set Pioneer Speaker – Car IBM Computer IBM Computer HP7540 Computer Photocopier HP Laserjet2200 Printer Vodafone Printer Laptop Laptop The Departments under the Ministry's portfolio that did not submit Statement of Losses include: Government Procurement Office, Government Printing & Stationery Department, Bureau of Statistics, ITC, and National Planning Office.
4.6 Manufacturing Account – Trading & Manufacturing Activity Description Raw Materials (01/01/08) Add: Purchases Less: Raw Materials (31/12/08) Raw Materials Used Add: Work in Progress (01/01/08) Direct Costs Direct Labour Less: Work in Progress (31/12/08) Cost of Manufactured Goods Transferred to Trading A/C 31 December 2008 $ 1,146,339 12,443,558 13,589,897 1,085,150 12,504,747 --- 8,826,356 627,365 --- 21,958,468 31 December 2007 $ 1,068,315 10,059,066 11,127,381 1,053,545 10,073,836 --- 6,508,919 468,751 --- 17,051,506 The Manufacturing Account is a consolidation of Government Printing and Government Procurement Office accounts.
The total production costs in 2008 amounted to $22.0 million, of which $12.5m or 57% was for raw materials, $8.8m or 40% for directs costs and $0.6m for direct labour.
4.7 Trading Account – Trading & Manufacturing Activity Description Sales Stock of Finished Goods (01/01/08) Add: Cost of Manufactured Goods Less: Stock of Finished Goods (31/12/08) Cost of Finished Goods Sold Ministry of Finance 31 December 2008 $ 31 December 2007 $ 14,024,071 7,186,360 21,958,468 29,144,828 6,614,363 22,530,465 12,871,190 7,798,765 17,051,506 24,850,271 7,186,360 17,663,911 Section 04: Page 5 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Description 31 December 2008 $ 31 December 2007 $ Gross Loss Transferred to Profit/Loss Account (8,506,394) (4,792,721) The Cost of goods sold amounted to $22.5m whilst the sales were only $14.0m, resulting in a gross loss of $8.5m.
It indicates that the cost of production at the Government Printing and the purchasing costs of the Government Procurement Office operations were excessive, resulting in the loss.

There are serious concerns about the efficiency of the operations and the competitiveness of the sources of the raw materials and supplies.

These have been raised in previous years audit reports.
4.8 Profit & Loss Statement – Trading & Manufacturing Activity Description Income Gross Loss transferred from Trading Account Expenses Travel Subsistence Telecommunications Fuel & Oil Office Upkeep & Supplies Repair & Maintenance of Fixed Assets Power Supply Water & Sewerage Lease & Rent payments Minor improvement to Fixed Assets Training Expenses Advertising, Promotion & PR Value Added Tax Total Expenses Net Loss 31 December 2008 $ 31 December 2007 $ (8,506,393) (4,792,721) 52,335 37,711 83,271 86,889 46,028 98,827 49,114 49 --- 24,580 --- 27,656 640,065 1,146,525 (9,652,918) 74,274 29,239 67,618 78,243 145,473 158,286 15,131 1,723 107,892 796 374 9,476 69,137 757,662 (5,550,383) The Profit & Loss Statement shows a Consolidated Net loss of $9.7 million for the Ministry, after accounting for other expenses totalling $1.1 million.
The major components of expenses include Telecommunications (7%), Fuel & Oil (7.6%), Repair & Maintenance of Fixed Assets (8.6%) and Value Added Tax (55.8%).
4.9 Balance Sheet – Trading & Manufacturing Activity Description TOTAL EQUITY Current Assets Bank Inventories Inventory Clearing Account Ministry of Finance 31 December 2008 $ 31 December 2007 $ 15,500,259 15,379,268 5,319,283 7,699,514 21,040 3,613,012 9,197,784 865,084 Section 04: Page 6 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Description Accounts Receivable NET ASSETS 31 December 2008 $ 2,460,422 15,500,259 31 December 2007 $ 1,703,388 15,379,268 The Consolidated Net Assets of the Ministry amounts to $15.5 million.
4.10 Trust Account Statement of Receipts and Payments Description Opening Balance Receipts Receipts from Performance Bonds Trust Receipts Total Receipts Payments Payments of Performance Bonds Trust Payments Total Payments Closing Balance 31 December 2008 $ 31 December 2007 $ 11,218,546 10,766,346 154,540 340,997 495,537 346,895 10,738,309 11,085,204 628,879 22,641 5,821,571 5,844,212 185,772 5,206,240 5,392,012 11,218,546 The total trust fund for the Ministry has decreased by $10,589,667 or 94% from $11,218,546 in 2007 to $628,879 in 2008.
AUDIT FINDINGS MINISTRY OF FINANCE 4.11 Payroll 4.11.1 FNPF Reconciliation Every employer shall pay to the Fund in respect of each of his employees, in every month during which such employee is employed by him and in the month following the termination of such employment, a contribution calculated upon the amount of wages payable to such employee by such employer for the preceding month at the appropriate rates.1 The current rate of contribution is 16 cents on every dollar earned, with the employer and employee each contributing 8 cents.
The Ministry failed to prepare its annual as well as monthly FNPF reconciliations in the prescribed format despite this issue been previously raised in the Agency Financial Statement audit in 2007.
The 1 Chapter 219 – Fiji National Provident Fund – Section 13 (1) Ministry of Finance Section 04: Page 7 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ reconciliation ensures that FNPF of all staff of the Ministry is correctly paid to the Fiji National Provident Fund.

Refer to the Appendix 4.2 for the format of the FNPF reconciliation.
Verification of the records revealed that the Ministry is actually reconciling the FNPF Trust Fund account which is different from the FNPF Reconciliation.

The former compares the FNPF payments against the system similar of any other trust fund reconciliation where as the later ensures that FNPF on the total salaries and wages are properly accounted for and are correctly paid to FNPF Superannuation Fund during the year.
The above finding indicates laxity by the Account Section of the Ministry to take heed of the recommendations raised in the 2007 Agency Financial Statement audit report in the preparation of the FNPF reconciliation.

It also clearly indicated ineffective controls and lack of supervisory checks preformed by senior staffs of the Ministry in the Payroll Section.
Recommendation The Ministry should ensure that monthly FNPF reconciliations are prepared and supervisory checks preformed in order to ensure that FNPF is correctly accounted for and paid to the Fund.

Ministry’s Comments Our copy of the 2007 Annual Financial Statement audit comment does not have the prescribed format, or the suggestion of its use.

The current format being used ensures that the correct amounts are paid.
However, we will be willing to change to the new format after further consultation with officers from the Auditor General.
4.12 Non - Payroll 4.12.1 Payment of Fiji Sports Council’s Loan Cabinet agreed that:  Government repay Fiji Sports Council’s loan from the FNPF, with an amount of around $321,000 to be paid as instalment due for 2005, and a budget submission by the Ministry of Youth, Employment Opportunities and Sports to the Ministry of Finance and National Planning on budgetary allocation for FNPF repayment beginning 2006 until 2014; and  A loan agreement between the Council and Government to be drawn up to facilitate repayment by the Council of the total sum paid by Government to FNPF, consistent with the Financial Management Act, 2004.2 The Government of Fiji provided guarantee over the loan taken by Fiji Sports Council from Fiji National Provident Fund (FNPF) for the development of Lawaqa Park.
The loan was taken on 01/01/2000 and was to be repaid on an instalment basis from 2001 to 2014.

The Council failed to meet its obligation for the repayment of loan hence government as a guarantor has to step in and make payments on their behalf.

It was noted that the Ministry failed to draw up a loan agreement between the Council and Government to facilitate repayment by the Council of the total sum paid by Government to FNPF as required by the Cabinet Decision on 30/08/05.
According to the listing provided, the total repayment 2 Cabinet Decision – Extract from Minutes of Meeting held on Tuesday 30th August 2005 – CP (05) 320.

Ministry of Finance Section 04: Page 8 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ made by the Government as at 1st half of 2008 amounted to $2,118,755.65 and is expected to pay another $2,316,563.88 till 2014.

Refer to the Tables 4.4 and 4.5 below for the details.
TABLE 4.4: REPAYMENT BY GOVERNMENT FOR LAWAQA PARK LOAN FROM 2001 TO 2008 Year 2001 2002 2003 2005 2006 2007 2008 Total Particulars Government Cheque No.

36408 of 27/07/01.

FNPF Receipts No.

575726 of 28/06/02.

FNPF Receipts No.

575729 of 28/06/02.

FNPF Receipts No.

584465 of 14/08/02.

FNPF Receipts No.

584466 of 14/08/02.

FNPF acknowledgement of Receipt.

Government Cheque No.

3280 of 15/07/05.

Government Cheque No.

173540 of 01/02/06.

Government Cheque No.

394691 of 25/08/06.


Government Cheque No.

396984 of 31/01/07.

Government Cheque No.

397751 of 31/07/07.

Government Cheque No.

398203 of 31/01/08.

Amount $ 364,033.33 124,038.79 60,384.72 115,247.69 62,951.07 178,198.76 321,870.03 178,198.76 179,236.22 178,198.76 178,198.76 178,198.76 2,118,755.65 TABLE 4.5: REPAYMENT YET TO BE MADE BY GOVERNMENT FOR LAWAQA PARK LOAN FROM 2008 TO 2014 Year 2008 2009 2010 2011 2012 2013 2014 Total Amount $ 178,198.76 2nd half payment.
356,397.52 356,397.52 356,397.52 356,397.52 356,397.52 356,397.52 2,316,583.88 It is the responsibility of the Ministry to liaise with Fiji Sports Council in order to draw up an agreement to ensure that the integrity of the loan provided is not jeopardised.

Recommendation The Ministry should ensure that a loan agreement between Government and Fiji Sports Council is drawn in order to facilitate payments.
Ministry’s Comments The guaranteed agreement and the deed clearly specifies that if Government intervenes and pays FNPF, it should be treated as a loan that FSC must repay back upon clearance of the loan with FNPF.
4.12.2 Payment of Rewa Rice Limited loan The Minister may, on behalf of the State, make loans of public money from the Consolidated Fund on such terms and conditions as the Minister thinks fit and whether within or outside the Fiji Islands.3 A 3 Financial Management Act 2004, Section 61(1) Ministry of Finance Section 04: Page 9 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ loan of public money under this section can only be made in accordance with an appropriation of the money concerned.4 A loan of public money under this section or under any other Act must be evidenced by an instrument signed by the Minister.5 The Government as a guarantor paid $1.9 million loan on behalf of Rewa Rice Limited who failed to meet its obligation on time to Reserve Bank of Fiji on 9th June, 1998.
The payment of loan on behalf of Rewa Rice Limited was made without an agreement between the Government and Rewa Rice Limited for its repayment and the amount of $1.9 million is still appearing in the PSF’s Advance Account.

It is the responsibility of the Ministry to liaise with Rewa Rice Limited in order to draw up an agreement to ensure that the integrity of the loan provided is not jeopardised.
The above findings resulted mainly from the lack of or poor coordination and communication between Ministry of Finance and Rewa Rice Limited regarding the drawing up of the loan agreement.

It also clearly indicated ineffective controls and lack of supervisory checks in the Debt Collection Unit.

Recommendations  The Ministry should ensure that a loan agreement between Government and Rewa Rice Limited is drawn in order to facilitate repayments.
 The internal control procedures in the Debt Collection Unit, specifically supervisory checks should be strengthened to avoid such discrepancies.

Ministry’s Comments An agreement has been put in place with RRL Board of Directors with the Ministry of Public Enterprise to commence repayment in 2010.

Recommendation is noted.

4.13 Revenue 4.13.1 LTA Fees All revenue earned by Land Transport Authority is to be paid to Government (Consolidated Fund Account) from 2008.
This includes fines collected from Traffic Infringement Notices.6 Verification of the revenue earned from LTA fees revealed differences in the Ministry’s GL balance as compared to LTA figures.

LTA prepares a cash listing on a daily basis that is summarized on a monthly basis and is submitted to Ministry of Finance.

Ministry of Finance from the bank statements enters the revenue collected into the system without verifying them from the cash listing resulting in the differences noted in the Table 4.6 below.
TABLE 4.6: VARIANCE BETWEEN GL AND LTA BALANCE Month GL Balance $ LTA Balance $ January February March 1,405,642.15 1,662,725.92 1,502,456.42 1,486,678.57 1,593,075.71 1,493,696.01 Variance $ (81,036.42) 69,650.21 8,760.41 4 Financial Management Act 2004, Section 61(2) 5 Financial Management Act 2004, Section 61(3) 6 Cabinet Decision No.
457 of 9th October 2007 Ministry of Finance Section 04: Page 10 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Month GL Balance $ LTA Balance $ April May June July August September October November December Total 1,521,561.85 1,559,329.70 1,774,398.27 1,750,973.91 1,726,329.19 1,617,244.43 1,388,152.55 1,453,501.36 1,719,424.93 19,081,740.68 1,503,451.34 1,564,382.22 1,761,193.69 1,749,775.85 1,741,241.15 1,524,139.15 1,477,925.19 1,400,952.19 1,699,251.39 18,995,762.46 Variance $ 18,110.51 (5,052.52) 13,204.58 1,198.06 (14,911.96) 93,105.28 (89,772.64) 52,549.17 20,173.54 85,978.22 In addition, LTA does not submit reconciliations for the aggregate revenue collected.
The discrepancy highlighted above indicated the absence of supervisory checks in the monitoring of revenue collected by LTA.

Any deviation from established procedures increases the risk of loss of revenue through theft and misappropriation of funds.

Recommendation Proper reconciliations should be carried out to determine the revenue collected by LTA.

Ministry’s Comments Upon receipt of the bank statement, Treasury posts the amounts into the GL account for LTA.
Our source document is the bank statement which shows the actual cash deposited by LTA.

Any variation should be addressed by LTA.

This will be further discussed with LTA given the limited powers of Internal Audit and Treasury to audit their accounts.
4.13.2 Departure Tax CAAFI, AFL and Government will share passenger service charges with Government to be compensated for providing Immigration and Customs services.7 The tax shall be paid as follows: twenty-five dollars to be paid directly to the Consolidated Fund; five dollars to be paid directly to Airports Fiji Limited; and ten dollars to be paid directly to the Authority.8 AFL collects the departure tax from the airlines and remits it to the government.
Audit inspection of the Departure tax file maintained by the registry section revealed that the disbursements made by AFL to the government are not supported by information such as the number of departing passengers per airline.

This is a vital data which can be used to substantiate the amount of tax that is collected by the respective airlines on behalf of government.
The Ministry has also failed to prepare any summary or analysis for aggregate departure tax revenue collected during the year as they are totally relying on the data produced by AFL.

As such all departure tax receipts have been posted into the GL without any validation by the Ministry.

The current system in place can be easily abused as a result of which, the parties sharing departure tax could be denied their rightful revenue.
This denotes that the Ministry has not been able to effectively 7 Department of Public Enterprise memo dated 17/08/99 8 Airport Departure Tax ( Amendment) Regulations 2007 Ministry of Finance Section 04: Page 11 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ carry out its monitoring role to support revenue maximisation for the government.

This has been highlighted in previous years audit; however, audit is yet to see any active improvement on this.
Recommendation The Ministry should ensure that a report is prepared, to indicate the aggregate revenue collected from departure tax, since this revenue collected is of significant monetary value.

The Ministry should also ensure that it carries out its independent reconciliation/verification of its 25% share of departure tax paid by AFL.

Ministry’s Comments Upon receipt of the bank statement, Treasury posts the amounts into the GL account for AFL.
Our source document is the bank statement which shows the actual cash deposited by AFL.

Any variation should be addressed by AFL.

This will be further discussed with AFL given the limited powers of Internal Audit and Treasury to audit their accounts.

4.14 Internal Audit 4.14.1 Outstanding Audit The Key Output Areas identifies the outcomes that the ministry will achieve through the various decisions and departments, its Performance Measures and the Targets for 2008.
This excludes other critical sub output and processors that will facilitate the achievement of the Key Output Areas.

The target timelines for the completion of all audits of the provision of regulatory audit to ministries and departments is December 31st 2008.

For the provision of special investigation, the target timeline is three (3) months after each special audit.
This includes the submission of timely, quality and reliable report to the audit committee.9 Verification of the number of audits completed by the internal audit unit within Ministry of Finance revealed a number of outstanding audits in its Annual Work Plan.

These include two outstanding audits for Team West, three for Team North and sixteen in Special Investigations.

Refer to Appendix 4.3 for details.


Ineffective supervision could be a contributing factor towards the Internal Audit Division failure to meet its deadline.

It also increases the risk of theft and misappropriations in the critical areas which might not be detected without any audit works performed and may have adverse effect on the revenue and expenditure of the government for a given period of time.
Recommendation The Division should ensure that proper planning is carried out and the work plan is executed with appropriate supervision to ensure the achievement of targeted outputs.

Ministry’s Comments Team North and West were involved in the special investigation thus the reason why they were not able to complete the Audit assigned for the year.

All complains received were registered in the Special Investigation register and each case are dealt with when staffs are available.
9 Annual Corporate Plan for the Financial Year ending 31st December 2008, Section 5.0.

Ministry of Finance Section 04: Page 12 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Total case registered: - 38 Investigated : - 22 Pending : - 16 Special investigations allocated to Team West/North were urgently required by Ministry of Finance.

Shortage of Staffs in the Unit is also a contributing factor to targets not achieved.
4.15 Financial Management Reform 4.15.1 Delayed Adoption of IPSAS The whole of government financial statements required to be included in the whole of government annual report for a financial year must include a statement of financial position, a statement of financial performance, a statement of changes in net assets, a cash flow statement and notes on significant accounting policies, prepared in accordance with international accounting standards relevant to whole of government on an accrual basis.10 The Finance Instructions may make provision for the adoption of accrual accounting principles, policies and procedures for the whole of government reporting or budget sector agency reporting or both.11 The International Federation of Accountants – Public Sector Committee develops accounting standards for public sector entities referred to as International Public Sector Accounting Standards (IPSAS).
It was previously discussed with the Auditor General that the adoption of IPSAS would be delayed until the financial reporting of 2009 accounts in 2010.

Audit noted that there has not been any progress made on the implementation process on the adoption of IPSAS.

Information gathered from the Policy Section indicated the lack of initiative on the above matter hence failure by the Ministry to meet its indicated timeframe for the implementation.
The delay in implementation of IPSAS was also a contributing factor for the postponement of the implementation of accrual basis accounting in the public sector.
The adoption of IPSAS by government will improve the quality, consistency and comparability of financial reporting under the cash basis of accounting.12 Given that section 26 of the Financial Management Act requires the move of accounting practices in government from cash basis to accrual, the adoption of Cash Basis IPSAS would ensure a smooth transition.
Despite this issue being highlighted in the previous year’s audit memorandums, no attempt has been made to initiate adoption of IPSAS standards into the Agency and Whole of Government financial reports.

Recommendations  Policy and guideline preparations for the adoption of Cash Basis IPSAS for the 2009 financial reporting year should be finalized at least by the third quarter this year (2009) to enable communication of the policy and procedures to all Budget Sector Agencies in the last quarter.
10 Section 46 (1) Financial Management Act 2004.

11 Section 26 Financial Management Act 2004 12 Introduction – Cash Basis IPSAS standard Ministry of Finance Section 04: Page 13 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________  The adoption of the Cash Basis IPSAS is foremost the major stepping stone in the move towards accrual accounting.
Ministry’s Comments The Ministry agrees that OAG had highlighted the need to adopt IPSAS when preparing the WOG accounts.

However, it is of the view that we need to improve on the current cash accounting system before attempting to adopt the Cash Basis IPAS.
This view is further supported by the PFTAC Assessment Report for the move from Cash to Accrual (August 2009), where it is emphasising that the implementation of a full accrual accounting system should not be attempted until the government’s existing cash based system and fixed asset recording system are improved.
For this improvement to take place, there is a need to develop a National Standard for Cash Accounting for Government, which is to be aligned to the Cash Basis IPSAS as well as the FMA 2004 and the FI 2005.

PFTAC has agreed to provide Technical Assistance for the development of this National Standard and work on this is scheduled to commence in November 2009.
This standard is targeted to be used in 2010 to 2012, after which, a review will again be done by PFTAC to assess the need to move towards adopting the accrual basis of accounting.

4.15.2 Finance Manual and Finance Instruction not Updated With the Implementation of the financial management Information System (FMIS) many aspects of the finance manual (2005) and finance instruction are now irrelevant.

This is evident through the change from Manual to System generated accounting procedures.
The Finance Manual and Instructions 2005 are the primary guidelines that all the ministries and departments adhere to and are dependent upon in carrying out their every day financial duties.

All ministries and departments are online using the Financial Management Information System (FMIS) since August 2008.
Audit noted that the Unit failed to make necessary amendments to the Finance Manual and Instructions 2005 to keep them in line with the FMIS as some part of these current guidelines are contradicting with the Systems processes and approaches that are in use.

For example the following stated in the Finance Manual needs to be changed as they are now maintained in the system itself:  Expenditure and Commitment Ledger stated in section 2 of the Manual.
 Salary and Wages Reconciliation stated in section 4 of the Manual.

 Register for approved loans as now no loan is given to public officers stated in section 10.

 Inter – departmental clearance accounts and cash clearance accounts ledger.

Outdated guidelines can cause confusion among the users and can result in non adherence of the financial policies.

This can further lead to irregularities in financial reporting and compliance.
The delay in amending the Finance Manual and Instructions 2005 resulted mainly from the lack of or poor coordination and communication between the Unit and the other ministries/ departments.

Recommendation The Unit should address the shortcomings in Finance Manual and Instructions 2005 by communication and coordinate matters affecting the using of the system and make necessary amendments to the current guidelines in a timely manner.
Ministry of Finance Section 04: Page 14 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Ministry’s Comments The FPAU is currently reviewing the FI and FM this year (2009).

These amendments will include the process changes that have been brought about by the implementation of the FMIS, as well as the other ad hoc requests.
4.15.3 Chart of Accounts Mapping Errors In the implementation phase of the Financial Management Information system (FMIS) data from the previous manual system was transferred to the new FMIS system.

This process was called mapping.

During the different phases of Implementation of the FMIS system there was no audit carried out by an independent party of the system.

There is no concrete proof that the data that has been uploaded during mapping is accurate.
Verification of the Trust account for FNPF Treasury revealed a debit balance of $71,508.88.

This reflects that the ministry has over paid FNPF which in fact may not be the case.

Communication with the ministry’s senior official’s revealed that the cause of this has originated from the switch to FMIS system where outstanding balances by line ministries were all posted to Ministry of Finance.
There could be other instances which reflect on the inaccuracy of data transferred during mapping which is yet to be highlighted.

The lack of proper audit and verification of balances being transferred can result in further inaccurate financial reporting.

Recommendations  The FMIS Team should ensure that proper audit is carried out by independent officers with adequate skills on a timely basis of the FMIS system.
 The Ministry should ensure that a thorough check on the balances are carried out and if necessary adequate adjustment are made to ensure that the reported figures/ balances are correctly disclosed for the decision making processes.

Ministry’s Comments After the mapping of accounts in 2005, departments and Ministries were given a copy of both reports (old accounts and new accounts) for reconciliation purposes.
They (Accountants in each department) were supposed to reconcile each account and come back to FMIS if there are corrections to be done.

For those departments that did not come back, we (FMIS) assumed that all their mapped accounts were correct.

I suggest that they identify those departments who are facing problems with the mapped balances so we can check our mapped files and make corrections to those accounts.
4.16 Disclosure of Head 50, 51 & 52 in the Appropriation Statement Each year the Appropriation Act and the Budget estimates set out details of the appropriations that Parliament approves for spending by each Agency.13 Amounts of $46,497,222, $38,628,200 and $439,345,100 were appropriated under the 2009 Appropriation Promulgation for the 2008 Budgetary Heads 50-Miscellaneous Services Expenses, 51- Pensions, Gratuities and Compassionate Allowances and 52-Charges on Public Debt Revised Budget respectively.14 13 Finance Instructions 2005 – Section 8 14 Republic of the Fiji Islands Government Gazette published by authority of the Fiji Government – Volume 8 Ministry of Finance Section 04: Page 15 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ The Agency Financial Statement for 2008 did not disclose appropriations for Head 50, 51 and 52 in its Appropriation Statement.
Refer to Table 4.7 below for details.
TABLE 4.7: NON DISCLOSURE OF HEAD 50, 51 AND 52 IN THE APPROPRIATION STATEMENT Description Miscellaneous Services Pensions, Gratuities and Compassionate Allowances Charges on Account of Public Debt Head 50 51 52 Total Revised Budget $ 46,497,222 38,628,200 439,345,100 524,470,522 Actual Expenditure $ % of the budget used during the year 37,994,220 35,533,054 427,984,117 501,511,391 82 92 97 96 The expenditures covered under the 3 budgetary heads stated on the table above are outlays on the performances of the main functions of the Ministry of Finance and are also reported in the Statement of Expenditure and revenue of the Agency.
The Appropriation Statement has been understated given lack of disclosure and this may have adverse effect on the decision making process in relation to the operations of the Ministry and the government as a whole.

Recommendation Appropriations and budgetary provisions for Budgetary Heads 50, 51 and 52 should also be included in the Appropriation Statements of the Ministry of Finance Agency Financial Statement.

Ministry’s Comments The recommendation has been noted.
Our FMIS unit will now arrange for the inclusion of Heads 50, 51 and 52 in the next report.
4.17 Excess Expenditure after Virement Chief Accounting Officer shall ensure that as far as possible expenditure incurred during each month of the financial year shall not normally exceed the amount forecast.15 If an accounting officer, on his own responsibility, incurs expenditure in excess of the amount authorized he shall at once take the necessary steps to submit an application for additional provision through his Chief Accounting Officer to the Minister.16 Scrutiny of the various Departments expenditure under Head 4 revealed that there were some overspent expenditure accounts despite revising the budget for the year.
Details are shown in the Table 4.8 below.
TABLE 4.8: OVER – EXPENDITURE AFTER BUDGET REVISION DEPARTMENT ACCOUNT NUMBER National Planning Office 4-1-7-13 15 Finance Instructions 2005 – Section 19(3) 16 Finance Instructions 2005 – Section 17 Ministry of Finance ACTUAL EXPENDITURE ($) 29,246.03 BUDGET AMOUNT ($) 27,250.00 AMOUNT OVER SPENT 1,996.03 (%) TO BUDGETED AMOUNT 7.3 Section 04: Page 16 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ DEPARTMENT ACCOUNT NUMBER Government Printing Information Technology & Computing Services 4-4-1-2 4-4-1-1 5-5-1-2 4-5-1-3 ACTUAL EXPENDITURE ($) BUDGET AMOUNT ($) AMOUNT OVER SPENT (%) TO BUDGETED AMOUNT 444,364.53 1,260,353.22 29,359.16 1,149,770.36 344,000.00 100,364.53 524,700.00 735,653.22 359.16 29,000.00 33,770.36 1,116,000.00 29.2 140.2 1.2 3.0 There is a lack of or poor communication and coordination between the different sections within the Ministry to properly plan, forecast and budget expenditures for a given period.
It also indicates ineffective controls and lack of supervisory checks in the Accounts Section.

The overspending highlighted above further strained the government finances, increased borrowing costs and budget deficits.

Fiscal policies and targets of the governments may become unattainable given the increased expenditure.

Recommendations  Departments must ensure that monthly expenditure reports submitted by MOF are scrutinized and proper controls are laid to prevent overspending of expenditure.
 Disciplinary actions should be considered for the responsible officers Ministry’s Comments The departments mentioned in the report will be asked to explain this over expenditure.

4.18 Discrepancies in the Drawings Account Balances A bank account for public money, other money or trust money must only be established with the approval of the Chief Accountant, who shall inform the bank of the agency officers authorized to operate on it.

All bank accounts shall be reconciled monthly.


The bank reconciliation shall list the outstanding cheques and other reconciling items and be signed and dated by the responsible officer.17 Review of the Drawings account records under Head 4 revealed that the following departments failed to provide their Drawings account reconciliation hence the general ledger balances could not be verified.

TABLE 4.9: FAILURE TO PROVIDE DRAWINGS ACCOUNT RECONCILIATION Department Account No.
GL Balance ($) Salaries Customs 1-04101-04203-530291 1-04102-04251-530201 (56,602.76) 2,139,659.99 Departments Balance ($) Not provided Not provided No proper explanation was provided for the non submission of the above record.

Recommendation It is the responsibility of the Ministry to ensure that all relevant documents are provided for audit verification.
17 Finance Instructions 2005 – Section 39 (1) & (5) Ministry of Finance Section 04: Page 17 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Ministry’s Comments The Salaries Drawings Account reconciliation has been submitted.

FIRCA was contacted and confirmed that they have been preparing the reconciliation but had not passed to Ministry of Finance.

They will be forwarding copies of the said reconciliation to the Ministry.
4.19 Head 50 – Miscellaneous Services 4.19.1 Excess Expenditure incurred under the Banker’s Commission and Exchange No officer may incur expenditure which results in the agency’s appropriation being exceeded.18 If an accounting officer, on his own responsibility, incurs expenditure in excess of the amount authorized he shall at once take the necessary steps to submit an application for additional provision through his Chief Accounting Officer to the Minister.19 Verification of the Banker’s Commission account revealed that the Ministry has overspent the allocation by $263,243 after virement for the period ending 31 December 2008.
The approved budget for this allocation was $138,800.

It was noted that the foreign exchange loss incurred from agencies overseas caused the increase in expenditure from $214,088.33 to $402,043.13 or 88% when compared to the previous years figure.

The budgetary allocation was not sufficient.

Recommendation Provisions for the Banker’s Commission account should be increased if associated costs are increasing.
Ministry’s Comments A major portion of the amount spent was for the adjustment of bank charges for our overseas missions.

Together with officers of the Auditor General, the adjustment was made.

We will monitor this vote closely to ensure that sufficient balances are available.

As recommended, we will also be seeking an increase in the provision.
4.19.2 Student Loan Scheme Vote No officer may incur expenditure which results in the agency’s appropriation being exceeded.20 An amount of $1.5m was appropriated in the Budget for the Lending Fund Account.

This figure is neither included in the Operating Fund Account nor in the accounts and finances.

During the year the Ministry vired $20,000 and $550,000 to Segs 10 and 6 respectively from the Lending Fund Account to the Operating Fund account.
These transfers reflect additional appropriation to the Operating Fund Account from the Lending Fund Account.
18 Finance Instructions 2005 – Section 8 19 Finance Instructions 2005 – Section 17 20 Finance Instructions Section 8 Ministry of Finance Section 04: Page 18 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ The audit also noted that the allocation 1-50101-50999-100211 which accommodates the student loan scheme had $1.5m allocated in the budget but was not reflected in the FMIS and Accounts and Finances.
During the year the Ministry debited expenditure totalling $624,290 into this account resulting in the FMIS showing an over expenditure of the above amount.

Enquiry with the Budget division revealed that the division was aware that an amount of $1.5m was appropriated for but was not aware that the amount was not included in the accounts and finances of government forming part of the Lending Fund Account.
The failure to reflect an appropriated amount in the FMIS resulted mainly from the lack of or poor coordination and communication between the Budget and FMIS section.

It also clearly indicated ineffective controls and lack of supervisory checks in the two divisions within the Ministry.

Recommendations  The internal control procedures in the two divisions, specifically supervisory checks should be strengthened to avoid such discrepancies.
 The Division Heads must ensure that the staffs are aware of the full accounts activated and loaded by FMIS for expenditures to be rightfully charged to.

Ministry’s Comments Your comments are noted.

The two units largely involved in this (FMIS and Budget) will strengthen their linkage to ensure that the accounts are reflected appropriately.
4.20 Pensions – Head 51 4.20.1 Non – submission of Life Certificates On non-submission of life certificate, pensioners pay is suspended.21 This is a very important declaration form for pensioners.22 The pension payments for pensioners living in the United Kingdom, United States and London are made through the Crown Agents Banking Limited (CABL).

In 2008 a total of £340,000 (pound sterling) or an equivalent of $1.01m was remitted by the Government of Fiji through the Ministry of Finance for these payments.
Some of the members of the pension scheme who failed to submit their Life Certificates in June 2008 continued to receive pensions contradicting the stated regulation.

These life certificates are received through Crown Agents.
Refer to the Table 4.10 for details for the month of November payments: TABLE 4.10: NOVEMBER PAYMENTS FOR PENSIONERS Pensioner No Pensioner Pension Type Pension Amount ($) COLA ($) 415017 Ambal S Widows & Orphans 11.77 187.53 Total Payment ($) 199.30 21 Finance Manual Section 19.10.5 22 Finance Manual Section 19.10.6 Ministry of Finance Section 04: Page 19 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Pensioner No Pensioner Pension Type 413542 106857 414446 414142 301327 413353 413353 410767 403052 423492 112605 414004 414802 400346 405119 106556 100164 November Total Bing T Chib CM Gaji PC Idris MR Lal B Lal DW Lal DW Mohammed LD Mohammed TM Mohammed ZN Prahalad Jagdeo Prasad ERB Shankar Maharaj Singh S R Subramani N Mishra V D Palad E V 60% pension 60% pension Civil Civil 60% pension 60% pension Widows & Orphans Widows & Orphans 60% pension Civil Civil 60% pension Civil Civil Civil Civil Civil Pension Amount ($) 452.36 25.26 112.30 563.94 80.02 239.18 20.12 12.21 396.92 225.64 639.58 447.76 312.88 602.81 259.30 415.02 342.12 5,159.19 COLA ($) 99.64 450.11 96.82 591.73 97.09 182.93 284.92 197.61 431.23 433.25 595.99 106.37 549.31 522.29 304.71 2,008.15 607.39 7,747.07 Total Payment ($) 552.00 475.37 209.12 1,155.67 177.11 422.11 305.04 209.82 828.15 658.89 1,235.57 554.13 862.19 1,125.10 564.01 2,423.17 949.51 12,906.26 The total payments made for the next four months after August without Life Certificate amounted $51,625.04.
Discussion with the Accounts Officer revealed that it takes time for the Ministry to stop the payments for the non – submission of life certificates.

In addition some members who have submitted their Life Certificate were not paid their pensions during the period.

Refer to the Table 4.11 for examples: TABLE 4.11: UNPAID MEMBERS WHO SUBMITTED LIFE CERTIFICATES Reference No.
420164 407637 403111 Surname Initials Remarks Sadhu Sharma Susilavati LN LW MISS Returned Returned Returned November Payments No Payments made No Payments made No Payments made Every year Fiji Government remits more than a million dollars for payments of these pensioners.

It is imperative that the Ministry adopt measures to prevent any breach of the rules and regulations as it will be difficult for the Ministry to recover any overpayment of pension made.
The payments made without following proper procedures resulted mainly from lack of or poor coordination and communication between the Ministry and the Crown Agent.

It also clearly indicated ineffective controls and lack of supervisory checks over the payments made.

Recommendations  The Life Certificates Listings submitted by Crown Agents must be reconciled to the payments listings of the previous month and payments must cease for members who fail to comply with the Finance Manual 19.10.5.
Ministry of Finance Section 04: Page 20 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________  Members who have submitted their Life Certificates through Crown Agents must be reconciled to the payments to ensure that payments continue for those members.

 The internal control procedures especially supervisory checks should be strengthened to avoid such discrepancies.

Ministry’s Comments 1.


Crown Agents Bank sends a payment schedule every month which is reconciled with a Payment Schedule spreadsheet that is kept at Pension Office.

Life Certificate listings is also sent [emailed] to be reconciled with the monthly schedule.

Should there be any other deletions and additions on the schedule; a query is sent [emailed] to Crown Agents Bank for their clarification.

2.

Comments on the three instances stated in the report is tabulated below: Reference No.
Surname Initials Remarks 420164 Sadhu LN Returned November Payments No Payments made Comments the schedule Payments on this pensioner was for shown on November 2008.

This pensioner receives Civil, 60% and W/O pensions.

The full name for this pensioner is Sadhu Lila Wati.

407637 Sharma LW Returned No Payments made This pensioner passed away on 22/08/08 and was deleted in September pay 2008.

403111 Susilavati MISS Returned No Payments made Payment was normal but was registered under a different Ref.

No.
No.

103111.

The Ref.

No.

for this pensioner is 403111.

Correction has been made.

3.

Internal Control measures are strictly adhered to by Pension Office and Crown Agents Bank.

The procedure that is carried out for locally paid pensioners is also being done at Crown Agents Bank.

Deletion will only be done if Life Certificate form is not received.

Re-Activation only when form is received.
4.20.2 Discrepancies in the Pension records The responsible authority for a budget sector agency is responsible for the effective, efficient and economical management of the agency and the maintenance of effective system of internal control for money and property.23 Pensioners residing in the United Kingdom (UK), United States of America (USA) and Canada are paid their pension funds through the Crown Agents.24 23 Financial Management Act 2004, Section 28(1)(a)(g) 24 Section 19.8.5 of Ministry of Finance Manual 2005 Ministry of Finance Section 04: Page 21 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ The Payroll system plays an important role in the maintenance and proper control of pension payments.
It also keeps available all relevant details relating to the records and fields of civil pensioners, 60% pensioners, widows and orphans and members of the war pensions.

Recently, the role of the system has been expanded to include the New Zealand and the Australian pensioners.

Scrutiny of the pension registers revealed that some of the pensioner’s names appearing in the register are not in the system records.

The payroll system fails to disclose any relevant information in regard to these pensioners.
Refer to the Appendix 4.4 for details.

Despite the high amounts paid over the past years, audit noted that a formal agreement between the Government of Fiji and the Crown Agents Bank to facilitate the payments is not signed by CABL.

In addition the Date of Birth (DOB) for most of the pensioner’s living in the USA, UK and London are not stated in the list provided by Crown Agent.

This provides useful information for the continuity of payments to the pensioner’s.
The findings noted above indicate ineffective controls and lack of supervisory checks in the maintenance of pensioner’s data.

Recommendations  The pensioners who are appearing in the civil pension register but are not in the system must be sorted out.

Identification must be given for deceased pensioners.

 The internal control procedures in the Pension Division, specifically supervisory checks should be strengthened to avoid such discrepancies.
 The pension office must ensure that important fields are included in its database of pensioners.

 Ministry should review the agreement with CABL to ensure the adequacy of control over the payments made to pensioners.

Ministry’s Comments 1.

The Civil Register contains names of all civil pensioners with effect from the date of the first retirement in the 1980’s.

Pension payroll was done manually and then was computerized in 2005 till it was upgraded to the current payroll system.
Deletion cases from 1980 and 1990’s were automatically erased when the data migration and upgrading was done.

The details for the deceased civil pensioners are recorded in the 60% Register, when dependant pensions are processed.

Deletions may be due to death or when the pensioner changes the mode of payment from local to overseas.

2.

Supervisory Checks are being done for every case being processed.

Files are firstly checked by the Assistant Accounts Officer before verification by Accounts officer.
While checks are made to ensure correctness of payments, we welcome any suggestion for improvements.

3.

Date of Births have been entered into the payroll system, for both locally and overseas paid pensioners.

For pensioners paid through Crown Agents, searches have been done through each pension files and only a few have got date of births in the file, which has been entered into the system.
A Date of Birth space has also being included in the Life Certificate Form, where pensioners can write their date of births.

4.

The Agreement for Pension Payment has been drawn up and has being signed by both parties, the Chief Accountant, on behalf of the Government of Fiji and the Director Operations of the Crown Agents Bank.
Ministry of Finance Section 04: Page 22 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ 4.21 Investment 4.21.1 Misplaced Share Certificates The Minister may invest public money, and other money within the meaning of this Act, as follows: (a) (b) (c) (d) (e) on deposit with a bank; in securities issued by a statutory authority; by way of advances authorised by an Act or by resolution of the House of Representatives; in any way in which trustees are authorised to invest money under the Trustee Act; in any way in which the particular money may be invested under the authority of another Act.25 Audit noted that on 19/11/02, Cabinet approved the $10 million financial assistance given to PAFCO to be converted into ordinary share capital.
However, despite this decision, and the reflection of the $10 million as equity in PAFCO’s financial statement, the Ministry of Finance is yet to receive the actual share certificate.

The conversion of the financial assistance of $10 million to equity is a significant decision by Cabinet and the share certificate is an important document that shows government’s ownership of shares and interests in PAFCO.
Recommendations  The Ministry should ensure that the actual share certificate is received as the conversion of  the assistance into share capital is now over 5 years.

Investigation should be conducted as to whether the $10 million was actually converted to equity to trace the share certificate date.
 Alternatively, if the effort to locate the actual share certificate is futile the Management should cancel from its books all records pertaining to the original share certificate and issue a new share certificate to the Ministry.

Ministry’s Comments The $10million share certificate has continuously been an issue subject to audit query.
As far as we are concerned, this issue has been raised in Annual General Meetings, letter correspondence as well as telephone conversations and all have proved futile at the moment.

We were advised by OAG to reflect the said investment without the presence of the actual share certificate by the power of a letter of confirmation from PAFCO.

In the subsequent year we are queried as to why we have not received the share certificate.
In our view we normally reflect the investment upon receipt of the share certificates and we have continuously highlighted this.

The submission of share certificates is the prerogative of the respective entities and the reason for delaying the submission is an issue which the Ministry cannot control but continuously highlight to PAFCO as an issue of concern from a shareholder’s perspective in AGMs.
25 Financial Management Act 2004, Section 55(1) Ministry of Finance Section 04: Page 23 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ 4.22 Surcharge 4.22.1 Pending Surcharges Cases A surcharge may be imposed on an officer who is directly or indirectly responsible for unauthorized expenditure, damage, theft or loss of property and for loss of money.26 A surcharged person may appeal to the surcharge appeal authority against the surcharge within one month after being notified of the surcharge or a longer period allowed by the authority.27 Audit noted that some surcharge cases for 2002 to 2006 which were reflected in the previous Auditor General’s Reports are still pending.
Appendix 4.5 to this report provides a list of pending cases.

It is obvious that the backlog will continue unless the processes applied are reviewed and strengthened.

With the delay in notifying the officers involved, there is a possibility that these officers may not be in the service any longer.

Thus, if surcharges are laid, it will be impossible to recover costs.

This issue was highlighted in the previous audit memorandum, however no improvement was noted.
Recommendation Stringent and immediate measures need to be applied by the surcharge authority in their follow up with Ministries/Departments to have these pending cases cleared.

Ministry’s Comments Surcharge Unit was also having difficulty in trying to obtain names of Officers implicated to be responsible before any action is taken.

Unit will need Auditor General’s working paper to identify officers if Ministries/Departments are not responding.
Most of the Senior Officers (PS/CEO) have retired from the Service.

Please refer Appendix 5 attached on status of each case as to-date.
4.23 Motor Vehicle 4.23.1 Pending Accident Cases Still With Solicitor Generals Office The accident report, Police report (if available), Solicitor General’s advice and the Deputy Secretary Finance’s (Administration) recommendations will all be taken into consideration by the surcharging authority before any surcharge is imposed.28 A surcharge may be imposed on an officer who is directly or indirectly responsible for unauthorized expenditure, damage, theft or loss of property and for loss of money.29 The surcharging authority may require the person to show cause within a specified period (explanation letter) and if not satisfied with the explanation issue an intention to surcharge letter and allow the person to appeal within a month.
If the appeal is upheld the person is issued with a surcharge letter.30 26 Finance Instructions, Section 74 (1) (a-c) 27 Finance Management Act 2004.
Section 69 28 Section 12.6.8 – Finance Manual 2005 29 Finance Instructions, s 74 (1) (a-c) 30 Finance Management Act 2004, Section (68-69) Ministry of Finance Section 04: Page 24 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ The rate of recovery from the salary or wage of an officer or employee must not be less than 5% of their net salary or wages (that is, gross after tax) or $50.00, whichever is lower.
Any surcharge recovery shall be made in full within five years from the date of the surcharge or for a longer period as approved by the Permanent Secretary, Finance.31 Verification of the accident reports revealed that from the years 2001 to 2008 a large number of accident cases are still to be resolved as the Ministry is waiting on the Solicitor General’s Advice.
Regular follow up is made by Ministry of Finance but no improvement was noted over the years as Solicitor General’s Office continues to take considerable length of time in communicating the surcharge decisions.

Refer to the Table 4.12 for details on the number of accident cases still waiting for the Solicitor General’s advice: TABLE 4.12: NUMBER OF ACCIDENT CASES WAITING FOR THE SOLICITOR GENERAL’S ADVICE Year 2001 2002 2003 2004 2005 2006 2007 2008 Total No.
of Cases 85 126 91 123 191 201 123 123 1,063 Cost of Repairs ($) 217,954.64 184,066.09 270,334.30 211,170.28 412,496.04 310,230.61 159,450.18 176,215.57 1,941,917.71 The above issue was highlighted in the previous (2007) audit memorandum, however no improvement was noted.

Audit noted that Timoci Saucake of Ministry of Foreign Affairs was surcharged a sum of $12,246.82 for the accident to the vehicle registration number GN142.
The deduction started from pay 09/09 at a rate of $15.00 contrary to the above regulation whereby the rate of recovery applied is less than $50 and the total amount will be recovered in more than 15 years.

Longer recovery period could result in unwarranted suspension of cases due to retirement, resignation, death of officer, or officers becoming incapable to work due to medical reasons, thus losses of the government will not be recovered.
There is a possibility that officers responsible for the accidents may no longer be in the service given the delay in surcharge actions.

Recommendations  Stringent and immediate measures need to be applied by the surcharge authority in their follow up with Ministries/ Departments to have these pending cases cleared.

 The surcharge rate charged to officer found guilty should be reasonable so that the surcharge amount could be fully recovered during the course of the officer’s employment.
31 Section 76 – Finance Instructions 2005 Ministry of Finance Section 04: Page 25 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Ministry’s Comments Generally, Min/Depts.

are prompt in submitting the reports if not within 21 days, soonest thereafter.

Some delays are expected for reports coming from remote stations.

Reminders are sent to Ministries and Departments to comply with the Finance Instructions.
The Ministry will continue to do all it can within its means to ensure compliance with the provisions of Instructions.

It is reiterated that the responsibility to submit report on time rests with the Permanent Secretaries.

As for the late submission of advice from the Solicitor General’s Office, recently they have advised us on 124 accident cases, some of which are to be written off and statue- barred.
As for the surcharge of drivers found guilty, most drivers have retired, resigned or else close to retirement age making recovery of surcharge difficult.
4.23.2 Alleged Misuse of Government Vehicles Vehicle must only be used for official purposes unless approves in writing by the Deputy CEO Administration under an officer’s term of employment.32In addition drivers should park vehicles at the agency’s official garage or car park at the end of each business day and the weekends.33 Scrutiny of the alleged misuse of government vehicle register revealed that some Ministries and Departments have yet to provide their explanations on complaints received in 2008 against their Office for unofficial use of government vehicles.
Refer to the Appendix 4.6 for details.

Although this issue was raised in last years audit report it is noted that there is still a high incidence of misuse of government vehicles as the regulation does not provide for a harsh penalty to be instigated against the offenders.

The use of government vehicles for unofficial purposes contributes to increase in fuel and maintenance costs, and could result in budgetary allocations being exhausted unnecessarily.
Furthermore, the use of government vehicles for private use creates a poor public image for the public service as a whole.

Recommendation The Ministry should discipline offenders and give out harsher penalties against re-offenders, and apply consistent follow up action with Ministries/Departments that have not submitted in their response.
Ministry’s Comments Upon receiving complaints, a memo is sent to the respective Min/Dept informing them of the alleged abuse/misuse of vehicle and request to furnish explanations of the allegations.

Harsher penalties can only be instituted to offenders when we have more proof/evidence that a particular government vehicle is being misused.

A new Government Vehicle registration system is now being developed by ITC services to assist in this regard.
This is inline with the directive given by Prime Minister on the issuance of Vehicle Pass for vehicles being used after official hours.

(Vehicle Pass form as attached).
32 Section 12.3.1 – Finance Manual 2005 33 Section 12.4.1 – Finance Manual 2005 Ministry of Finance Section 04: Page 26 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ 4.24 Trust Fund Reconciliation Within 5 days after the end of each month, the trust officer shall prepare reconciliation to reconcile balances to the ledger total and the trust bank account.34 Each month, the trust account shall be balanced and reconciled with the trust bank account.
The names and balances of each account shall be listed and the reconciliation shall be signed by the responsible officer.

Unreconciled items should be investigated and resolved promptly.35 The audit noted that most of the divisions under the Ministry failed to submit their trust fund reconciliation for audit verifications.
These divisions include:      (104103) – Budget Division; (104104) – Asset Management Unit; (104106) – Financial Management Reform; (104101) – Administration; (104107) – National Planning According to the Officer in charge numerous reminders were sent but were futile.
The following Table 4.13 shows the outstanding balances as at 31st December 2008: TABLE 4.13: OUTSTANDING TRUST FUND RECONCILIATION Account ID Description 10410204999861101 10410204999861102 10410204999861106 10410204999861309 10410104101861209 10410204999861211 10410204999861212 10410104203861901 10410104999861901 10410204201861901 10410204203861901 10410204230861901 10410204999861901 10410304999861901 10410404999861901 10410604999861901 10410104999861908 10410404999861908 10410104101861920 10410104999861920 10410604999861920 10460104999861920 Total OPR Current Year OPR Previous Year PD Govt Water Rates PSC Marsh & Mclenan PD Alexander PD Australian PD Tax Arrears PD Tax Arrears PD Tax Arrears Leave Allowance PD Tax Arrears PD Tax Arrears PD Tax Arrears PD Tax Arrears PD Tax Arrears PD Fines PD Fines PD Employees PD Employees PD Employees PD Employees 34 Finance Manual, 2005 35 Financial Instructions 2004 s (69) Ministry of Finance Amount ($) (259.44) (2,300.24) (171.98) 988.20 (18.01) 139.45 188.82 (137.50) (583.99) 1,925.80 4,922.43 (281.72) 11,638.96 (942.13) 109.55 (1,019.80) 2,000.00 331.55 65.64 614.40 2,935.01 167.44 20,312.44 Section 04: Page 27 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ The debit balances in the trust fund account reflects that the trust account has been overdrawn or the credit entry is in some other account which the Ministry needs to identify and make necessary adjustment to reflect the correct trust fund account balance for
 any given period.
In addition, the audit also noted that some of the sections while preparing their reconciliation failed to list down the debits and credits that makes up the total and is reflected in the reconciliation.
Some of the examples of the accounts without their breakdown of debits and credits are as follows:  Suva City Council Rates (104102-04999-861701)  WESRAM Finance Co (104102-04999-861533)  Institute of Public Sector Accountants (104102-04999-861523) The above discrepancies resulted mainly due to ineffective controls and lack of supervisory checks in the Accounts Section.

Recommendations  The Ministry should ensure that Trust Fund accounts are cleared within 5 days after the end of each month.
 The internal control procedures in the account Section, specifically supervisory checks should be strengthened to avoid such discrepancies.

 Trust Fund Account which is reflecting debit balances should be investigated to ensure that all misallocations made are adjusted accordingly.

Ministry’s Comments Reconciliation of the stated trust accounts are undertaken by our salaries section as they are deductions made from the salaries of staff.
Most of the accounts have been idle for years, whilst some accounts have more than one account number (e.g PD Tax Arrears).

When the credits and debits are net off, the end result is a positive amount, thus the account was not overdrawn.

To rectify this, the Ministry will be inactivating the idle accounts and make the necessary adjustments.

NATIONAL PLANNING OFFICE 4.25 Drawings Account discrepancies All bank accounts shall be reconciled monthly.
The bank reconciliation shall list the outstanding cheques and other reconciling items and be signed and dated by the responsible officer.36 Examination of the Ministry’s Drawings account records indicates a variance of $80,267.92 between the ministry’s record and the FMIS.

The variance noted is made up of $4,243.10 being cheques presented but still appearing in the unpresented listing totalling $17,108.11 and unidentified balance of $58,916.71.
Refer to the Table 4.14 below for the details of the variance.
TABLE 4.14: VARIANCE BETWEEN MINISTRY’S RECORD AND THE APPENDIX FIGURE Balance as per Ministry’s record $ 329,991.97 Balance as per Appendix $ Variance $ 249,724.05 80,267.92 36 Finance Instructions 2005 – Section 39 (5) Ministry of Finance Section 04: Page 28 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ The variance noted above is due to lack of regular reconciliation with the Ministry of Finance drawings account records.
It also indicated ineffective controls and lack of supervisory checks in the Accounts Section of the Ministry.

Recommendations  The internal control procedures in the two Ministries’, specifically supervisory checks should be strengthened to avoid such discrepancies.

 The Ministry should liaise with Ministry of Finance to identify the variances noted in the drawings record and have it adjusted accordingly to avoid future variation in the record.

Ministry’s Comments No comments received.
4.26 FNPF Reconciliation Every employer shall pay to the Fund in respect of each of his employees, in every month during which such employee is employed by him and in the month following the termination of such employment, a contribution calculated upon the amount of wages payable to such employee by such employer for the preceding month at the appropriate rates.37 The current rate of contribution is 16 cents on each dollar earned, with the employer and the employee each contributing 8 cents.
The Ministry failed to prepare its monthly as well as annual FNPF reconciliation despite the issue being raised in the previous years Agency Financial Statement audit.

The reconciliation ensures that FNPF of all staff of the Ministry is correctly paid to FNPF Authority.

Recommendation The Ministry should ensure that monthly as well as annual FNPF reconciliation are prepared and supervisory checks are performed in order to ensure that employees FNPF are correctly paid to FNPF.
Ministry’s Comments No comments received.
4.27 VAT Reconciliations Subject to the provision of the VAT Decree 1991, the tax shall be charged in accordance with the provisions of this decree at the rate of twelve and a half percent on the supply (but not including an exempt supply) in Fiji goods and services, by a registered person in the course or furtherance of a taxable activity carried out by that person, by reference to the value of that supply.38 Audit noted that the Ministry failed to prepare its monthly as well as annual VAT reconciliation despite this issue been raised in the previous years Agency Financial Statement audit.
The 37 Chapter 219 – Fiji National Provident Fund – Section 13 (1) 38 Value Added Tax Decree 1991 4th edition revised to 30/04/04-section 15(1) Ministry of Finance Section 04: Page 29 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ reconciliation ensures that VAT on the total income and expenditures are properly accounted for and are correctly paid to FIRCA during the year.
Recommendation The Ministry should ensure that monthly as well as annual VAT reconciliation are prepared and supervisory checks are performed in order to ensure that VAT is correctly accounted for and paid to FIRCA.

Ministry’s Comments No comments received.

4.28 Negative Expenditures Incurred at Item level Basis Expenditures must not have negative balances at any time.

Negative balances pose the risk of reducing expenditure at head level.
Examination of the expenditure records of the ministry revealed that some of the accounts allocated under expenditure are having negative closing balances at the year end.

Examples are shown in the Table 4.15 below.
TABLE 4.15: NEGATIVE EXPENDITURE CLOSING BALANCES ACCOUNT ALLOCATION DESCRIPTION 1-04107-63101-010101 1-04107-63102-010101 1-04107-63102-010101 1-04107-63104-010101 1-04107-63101-010201 1-04107-63101-010303 PE SALARIES PE SALARIES PE SALARIES PE SALARIES PE SALARIES ALLOWANCE ACTING 1-04107-63103-010303 ALLOWANCE ACTING 1-04107-63103-010303 ALLOWANCE ACTING NEGATIVE AMOUNT ($) (71,573.62) (7,099.50) (15,673.24) (2,346.36) (2,346.56) (6,780.00) (2,453.57) (433.52) The overall effect of these negative balances resulted in a decrease of the total SEG 1 expenditure by the above amounts.
This may have adverse effect in forecasting the next year’s budget for the SEG.

Recommendations  The Ministry should ensure that the internal control procedures in the Account Section, specifically supervisory checks are strengthened to avoid such discrepancies.

 All negative balances should be properly explained and adjusted to its correct account in order to reflect a true picture of an expenditure allocation.

Ministry’s Comments No comments received.
Ministry of Finance Section 04: Page 30 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ GOVERNMENT PROCUREMENT OFFICE 4.29 Trading and Manufacturing Account (TMA) 4.29.1 Slow moving Inventory Inventory should be purchased in the most economical manner having regard for: (a) (b) (c) (d) (e) the expected level of usage; lead times for delivery; volume discounts; holding costs; the availability of secure storage; and the likelihood of deterioration.39 Verification of the inventory records revealed that inventories valued at $580,813 are slow moving over the years making up 13% of the total closing stock of the TMA.
This could also be a contributing factor towards the loss incurred by the department over the years.

The finding reflects lack of commitment by the department in monitoring the stock levels and ensuring the sale of the items to avoid such situations.

Inadequate and uneconomical purchase of inventory could result in the incurrence of additional costs such as the storage, security and accounting of the inventory items.
Recommendation Adequate and rational planning should be done by the department before an item becomes obsolete and should be sold before such situation arises.

Department’s Comments The recommendations proposed are noted.

As part of the reorganization process, GSD is in the process of identifying all obsolete and slow moving items and these will be first sold through public sale at reduced prices following which un-cleared items will then be sold through auction.
4.29.2 Purchase Clearing Account Financial transactions shall be posted into the automated financial information system (general ledger system) using journal input forms or directly from source documents such as journal vouchers or payment vouchers.40 Scrutiny of the records revealed that an amount of $844,044 was cleared from the Purchase Clearing Account (4-4351-91011-580901) in 2008 by Ministry of Finance whilst the following clearing and variation account remain open with balances which were brought forward from the year 2005.
39 Finance Instructions 2005 – Section 43 (1) 40 Government Procurement Office, Part 16.2.1 Ministry of Finance Section 04: Page 31 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ TABLE 4.16: UN-CLEARED CLEARING AND VARIATION ACCOUNT Account Number 4-04351-92011-589101 4-04351-93011-589101 4-04351-91011-589102 4-04351-93011-589103 Balance brought forward from 2007 2007 2005 2005 Description Purchase Clearing Account Purchase Clearing Account Purchase Variation Account Costing Variation Account Amount ($) 1,578.38 17,071.89 2,242.44 146.83 No proper explanation was provided by the department on the above accounts precision.
In addition, documentary evidence for the above clearance was not supported as clearance was only made through the system entry.

The above finding demonstrates lack of transparency and accountability with which balances are cleared from the system and thus questions the substance of such accounting entries.

Recommendations  The Department should ensure that the postings cleared in the general ledger are supported with Journal Vouchers and appropriate documents.
 The Department should ensure that the Accounting Head is penalized for the unexplained postings in the general ledger.

 The Department should ensure that the internal control procedures, specifically the supervisory checks are strengthened to avoid such discrepancies from occurring.

Department’s Comments It is important to note that the purchase clearance and variation account are some of the multiple entries predefined under the purchasing account of the GSD TMA.
The two financial accounts as noted in your report are generated from the supplier’s invoice which has been incorporated into the system and the internal transfer of stock respectively.

The Department carries out its checks and balances on invoicing before it is inputted into the system as a mechanism of the internal control system.

The transactions are then consolidated into a report which are printed, checked and reconciled.
These reports are then posted accordingly to the general ledger using journal vouchers.

The costing variance in the report displays the difference between the last unit price of a particular stock and the new unit price of the same stock.

This variance is cleared by purchase clearance account.

The purchase variance in the report displays purchases accruals.

This variance is cleared through journal vouchers.

The recommendations proposed are noted.


Supervisors have been informed to verify and reconcile the reports to justify the figures presented to stakeholders.

Stringent control has now being introduced to avoid further recurrence.
Ministry of Finance Section 04: Page 32 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ 4.29.3 TMA Performance Trading and Manufacturing Accounts activities (TMA) are operated on a semi-commercial basis to increase the returns that are realized from them and to provide goods, services or works more cost- effectively.41 The following ratios have been calculated to portray the department’s performance in the operation of its TMA: Ratio Formula Year 2008 Year 2007 Comments Activity Ratio - Stock Turnover Cost of Goods Sold Average Inventory at cost 4.2 times Opening of Stock 2007 (closing for year the 2006 could not be determined.
Activity Ratio - Debtors Turnover Accounts Receivable (Revenue/ 365) 59 days 44 days Performance Ratio – Cash Flow to Asset Cash from Operations Total Assets 0.4 0.3 Asset Turnover Total Income Total Assets 1.0 1.0 This ratio indicates the number of time the stock has been turned over during the period and evaluates the efficiency with which a firm is able to manage its inventory.

GPO has a normal inventory turnover.


This implies that there is no over-investment in inventories, dull business, poor quality of goods, stock accumulation, accumulation of obsolete and slow moving goods and low profits as compared to total investment.

The inventory turnover ratio is also an index of profitability, where a high ratio signifies more profit; a low ratio signifies low profit.
implies The shorter the average collection period, the better the quality of debtors, as a short collection period the prompt payment by debtors.

GPO shows an excessively long collection period implying a very liberal and inefficient credit and collection performance.

As such, liquidation could be severely impaired.

The average numbers of day’s debtors take to settle their account has increased from 44 days in 2007 to 59 days in 2008 showing ineffective controls.
This ratio relates to the organisations ability to generate cash compared to its asset size.

A ratio of 0.4 does not look good; Government Procurement Office can run into problems in generating cash.

When the ratio declines below 10% then there may be some cause for concern.

the Indicates the relationship between assets and revenue.

It indicates the efficiency with which to generate revenue.

The higher the firm’s its turnover, asset assets have been utilized.
the more efficiently firm uses all its assets 41 Government Procurement Office – Finance Manual 2005 – Part 6 Ministry of Finance Section 04: Page 33 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Profit Margin, Return on Assets (ROA) and Gross Profit Ratio could not be calculated as the department has incurred a loss for the 2008 period.
The above ratios indicate poor TMA performance and therefore needs improvement in the organizations activity and performance ratio.

Weaker ratios indicate inefficient TMA performance and thus could affect the viability of the departments TMA operation.

Recommendation The Department should ensure that efforts are made to improve on the activity, performance and profitability ratios with key TMA personnel monitoring the ratios on a quarterly basis.
Department’s Comments The old computer system and its continuous breakdowns were one of the major contributing factors to the calculation on weaker ratio which generated from the report.

We are currently undergoing migration from the old IT system to the new system and therefore cannot effective the recommended calculation of the quarterly ratio.

The recommendations proposed are noted.
4.30 Statement of Losses 4.30.1 Failure to Provide Board of Survey Reports Each Agency shall establish a register of losses and shall record in it details of each loss, including:  The date of loss;  Particulars of the loss including value;  Nature and circumstances of the loss;  Recovery action taken;  Any amount recovered, written off, waived or postponed;  A record of the year of disclosure in the agency’s financial statements; and  References to supporting documentation (e.g.
loss reports, write off approvals, file references).42 Details of losses incurred each year shall be reported in the agency’s annual financial statements in accordance with the reporting format set out in these Instructions.43 Audit noted that the department failed to prepare and submit its Board of Survey report to Ministry of Finance on time.
The Board of Survey was conducted by the Department but the report submitted to Finance was delayed hence the approval for write off of the obsolete items as recommended in the report is yet to be approved by Ministry of Finance.

This has resulted in the departments write off’s recommended in the report not being included as losses for the year in the Statement of Losses and reported in the Agency Financial Statement of Ministry of Finance.
The effect of failing to comply with Finance Instruction 2005 resulted in the Statement of Losses reported in the Agency Financial Statement not reflecting the true picture of the account hence it could be understated.
42 Finance Instructions 2005 – Section 65 43 Finance Instructions 2005 – Section 66 Ministry of Finance Section 04: Page 34 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Any deviation from the established procedure increases the risk of losses of valuable items through theft and misappropriation of inventories/ fixed assets.
Recommendations  The Department should address this shortcoming by communicating and coordinating matters with the responsible officers in a timely manner.

 The Department should ensure that it complies with the established policies and procedures in order to have an effective and efficient operation and management of the office and its resources.

Department’s Comments Audit’s comments are noted.


Effort is being made to ensure that all Board of Survey Reports are submitted to Ministry of Finance on a timely basis and that procedures for write off and disposal of obsolete items are complied with before recommendations in the Board of survey reports are implemented.
4.31 Trust Fund Account 4.31.1 Maintenance of Performance Bond Trust Records The trust officer shall properly file correspondences, reports, trust agreements and other relevant trust documents.

Each trust account shall have its own file.

The trust officer shall keep a trust ledger to record movement of trust money.
The ledger shall record the following information:  Name of trust account;  Date and amount of receipts and payee;  Date, amount paid and payer including reference number and;  Balance to date44 Trust money is to be kept in a separate bank account pending its withdrawal (including withdrawal for use or investment).45 Audit verification of the Performance Bond Trust account records revealed that there were no general trust files kept for the Trust Fund for filing correspondence and other trust details.
It was also noted that the department failed to maintain a separate receipt book or a trust ledger to record the movement of fund.

As at 31/12/08 the department had a balance of $628,879.44 in the Trust Account.

Any deviation from the established procedures increases the risk of loss of trust monies through theft and misappropriation of records and or funds.
Recommendations  A separate cashbook and receipt book must be maintained and frequently updated on funds received and issued out to respective departments.
44 Government Procurement Office – Finance Manual 2005 – Section 15.3.1 & 15.3.2 45 Finance Management Act 2004 – Section 25 (2) Ministry of Finance Section 04: Page 35 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________  A separate file should be kept for all trust funds correspondences, reports, trust agreements and other relevant trust documents.
 The Department should address these shortcomings by communicating and coordinating matters affecting trust monies in a timely manner.

Department’s Comments The Department is currently maintaining a separate receipt book for Payment of Performance Bond.

Since the money received are for payment of performance bond all correspondence are kept in the Contractors file separately.

The department is currently keeping records from 2005 until to date.
Reconciliation of account is submitted to Ministry of Finance monthly.
GOVERNMENT PRINTING & STATIONERY DEPARTMENT 4.32 Trading and Manufacturing Account 4.32.1 Erroneous TMA Vat Returns Every registered person shall, on or before the last day of the month following the last day of every taxable period, without notice or demand furnish to the Commissioner a tax return, in such prescribed form as may be approved by the Commissioner.46 The department failed to incorporate all sales made through Trading and Manufacturing Account (TMA) to the other government agencies in its monthly vat returns.
Vat revenue totalling $295,915 was not included in the Vat returns.

Refer to the Table 4.17 for details.
TABLE 4.17: UNACCOUNTED VAT REVENUE Month January February March April May June July August September October November December Total Sales not included in vat return $ 28,183.72 48,237.04 73,852.70 64,021.62 57,646.73 59,563.63 62,359.10 66,253.65 562,110.81 89,916.24 87,399.80 310,137.49 1,509,682.53 Vat Revenue not included in return $ 27,450.80 42,362.41 (9,617.05) 14,352.90 12,156.73 14,939.43 12,511.74 13,222.06 74,307.60 16,106.77 20,604.83 57,516.76 295,914.98 Vat Paid to FIRCA taken as sales $ 53,227.68 53,227.68 - - - 13,544.75 - - - - - - 120,000.11 Secondly, while compiling the monthly vat returns, the department was including previous monthly vat payable to FIRCA in its total sales figures in the VAT returns.
The Table 4.18 outlines the discrepancies.
46 Vat Decree 1991 – Section 33(1) Ministry of Finance Section 04: Page 36 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ TABLE 4.18: INCORRECT VAT REVENUE IN THE VAT RETURN Month Vat Revenue as per GL $ January February March April May June July August September October November December Total 27,450.80 42,362.41 9,617.05 14,352.90 12,156.73 14,939.43 12,511.74 13,222.06 74,307.60 16,106.77 20,604.83 57,516.76 315,149.08 Comments Vat Revenue as per Vat Return form $ 53,227.68 Vat Paid to FIRCA for Dec 2007 53,227.68 Vat Paid to FIRCA for Dec 2007 - - - 13,544.75 Vat Payment to FIRCA Vr 196/8 86.33 Vat Output as per GL relating to Imprest 8.65 Vat Output as per GL relating to Imprest 313.32 Vat Output as per GL relating to Imprest 87.92 Vat Output as per GL relating to Imprest 87.92 Vat Output as per GL relating to Imprest 87.92 Vat Output as per GL relating to Imprest 120,672.17 Thirdly, the Vat refund receipted on 27/05/08 from FIRCA totalling $43,481.95 has been posted as Cash Sales revenue in the General Ledger.
Refer to the Table 4.19 for details.

TABLE 4.19: VAT REFUND POSTED AS CASH SALES REVENUE Taxable Period 11/2004 02/2005 10/2007 11/2007 Total Sales/Income including VAT $ 179,937.79 191,171.87 27,583.76 37,967.40 Output Tax $ Input Tax $ 19,993.09 39,087.82 21,241.32 27,954.93 3,064.86 10,075.46 4,218.60 14,881.61 Refundable $ 19,094.73 6,713.61 7,010.60 10,663.01 43,481.95 Accounting Officers in the Department could not prepare Vat Returns and omissions could result in unnecessary penalty from FIRCA.
Recommendations  The Department should ensure that the preparation of Vat returns is corrected.

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

 Guide in preparing accurate returns be sought from FIRCA and the error on the omitted sales is rectified.

Department’s Comments The Department’s OFA VAT amounting to $53,227.68 was paid from TMA.

This money was paid back to TMA in February 2008.


Refunds of previous years had been receipted to Cash Sales.

Ministry of Finance Section 04: Page 37 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ 4.32.2 TMA Balance Sheet and Income Statements Each agency operating a trading and manufacturing activity must prepare – (a) (b) quarterly profit and loss statements; and a balance sheet on an annual basis.
The profit and loss statement and the balance sheet must be prepared on an accrual accounting basis.47 The review of the TMA accounts revealed that some adjustments were made affecting accounts in the balance sheet for which no valid explanations were provided.

Adjustments without valid explanations are shown in the Table 4.20 below.
TABLE 4.20: ADJUSTMENTS WITHOUT VALID EXPLANATIONS MADE TO ACCOUNTS IN THE BALANCE SHEET Account Number 4-04451-66999-940366 4-04451-66999-940466 4-04451-66999-269966 4-04451-66999-269966 4-04451-66999-269966 4-04451-66999-269966 Total Amount ($) 9,924 336,192 1,168,946 1,797,657 1,085,150 2,063,871 6,461,740 As such the correctness of balances and posting to the equity account, namely the TMA Surplus and TMA Accumulated Surplus of $227,935 and $3,881,259 could not be determined.
Recommendations  The Department should ensure that the entries into the General Ledger by Ministry of Finance is justified and endorsed by them.

 The Ministry of Finance should disclose the justification of their adjustment into department accounts and ensure that the Accounting Head of the department agrees to these postings.

Department’s Comments The Department does not have access to these allocations.

All the postings have been done by the Ministry of Finance.
4.32.3 Funding of Operating Fund Expenses from the Trading and Manufacturing Accounts TMAs are operated on a semi-commercial basis to increase the returns that are realized from them and to provide goods, services or works more cost-effectively.48 The proper management of expenditure is fundamental to ensuring value-for-money in delivering services to the community.49 Scrutiny of the records revealed that the department have been utilising the TMA funds to finance operating expenditures of the departments which are later reimbursed to TMA.
47 Finance Instructions 2005 – Section 37 (1) & (2) 48 Government Printing & Stationery – Finance Manual 2005 – Part 6 – Introduction Paragraph 49 Government Printing & Stationery – Finance Manual 2005 – Part 2 – Introduction Paragraph Ministry of Finance Section 04: Page 38 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ At the close of accounts, it was found that one such transfer of fund of $24,581 from TMA to Operating Fund Account was not reimbursed to TMA.
To facilitate the transfer, TMA Vat expenditure was debited for $24,581.

Audit request for reversal of the transfer of funds into TMA was denied by Ministry of Finance official who stated that any adjustment will affect the balancing of TMA accounts.

The transfers of funds violate accounting principles and demonstrate the lack of control and deliberate manipulation of TMA funds.

The TMA Vat expenditure has been overstated while TMA fund is understated by $24,581.
Recommendations The department should:  restrict the use of TMA funds to cater for the Operating Fund Expenditure.

 advice Ministry of Finance if the funds allocated for a particular SEG has been exhausted in order to seek virement of funds from other SEG’s that has savings.

 posting to the TMA accounts should be scrutinized and checked on a regular basis.

Department’s Comments Your recommendations have been noted.
4.32.4 Incorrect Accounting Treatment for Purchase of Textbooks TMAs are operated on a semi-commercial basis to increase the returns that are realized from them and to provide goods, services or works more cost-effectively.50 Examination of the records indicated that the department purchased textbooks valued at $657,118 for sale in the bookshop which is recorded as raw materials in the Manufacturing Account despite the items being the final product and has not gone through the production process.
The textbooks should be reflected as purchases in the Trading account.

Hence, the cost of goods manufactured is overstated in the Agency Financial Statement of the Ministry of Finance.
For illustration: Manufacturing Account for the year ended 31/12/08 Raw materials 01/01/08 Purchases Less Closing Stock 31/12/08 Add Direct Costs Cost of Goods Manufactured Current Practice 1,053,545 1,889,937 2,943,482 1,085,150 1,858,332 116,588 1,974,920 Proposed Practice from 2008 1,053,545 1,232,819 2,286,364 1,085,150 1,201,214 116,588 1,317,802 Difference - 657,118 657,118 - 657,118 - 657,118 Sales Stock of Finished Goods 01/01/08 (2,293,720) 1,797,657 (2,293,720) 1,797,657 - - Trading Account for the Year Ended 31/12/08 50 Government Printing & Stationery – Finance Manual 2005 – Part 6 – Introduction Paragraph Ministry of Finance Section 04: Page 39 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Add Cost of Goods Manufactured Add Purchases of Finished Goods for sale - textbooks Cost of Goods Available for Sale Less Closing Stock 31/12/08 Cost of Goods Sold Gross Profit 1,973,919 -_______ 3,771,576 2,063,871 1,707,705 586,015 1,316,801 657,118 3,771,576 2,063,871 1,707,705 586,015 657,118 (657,118) - - - - Recording of the purchase of textbooks as raw-materials in the manufacturing statement provides misleading and exaggerated information to the readers of the financial statements of the Production and Manufacturing process.
Recommendations  The Department and the Ministry of Finance should record the purchase of textbooks to the trading account rather than to manufacturing account to avoid overstating the cost of goods manufactured.

 The internal control procedures in the Trading and Manufacturing Account, specifically supervisory checks should be strengthened to avoid such discrepancies.

Department’s Comments Your recommendations have been noted.
4.32.5 Business Plan All agencies that operate a trading and manufacturing activity must prepare a business plan for the activity each year.
The business plan should include the following minimum information – (a) (b) (c) (d) (e) (f) an analysis of the market it operates in; the profit target for the year and the next two years; strategies for achieving the profit target; the risks relating to the activity; any social obligations required by Government which impact on profitability; and projected profit and loss statements for the year in question and the following two years.
The business plan must be signed by the officer responsible for managing the activity and be agreed with the Chief Executive Officer of the agency.

Each business plan must be submitted to the Ministry of Finance by 30 November of the year before the year it applies to.51 Business Plan for year 2008 could not be obtained from the department or from the Ministry of Finance.
In the absence of Business Plan and budget forecast, there is high risk that the department is operating in an environment which is not targeted towards a specific goal and therefore spending is uncontrollable without keeping in mind the return on investment by maximizing the profit from its operation.

It also indicates lack of direction from the business perspective of the TMA operation and the impracticability to measure the actual performance of the TMA is undermined.
Thus, the efficiency and effectiveness with which the TMA operation is carried out could go undetected and immeasurable.

51 Finance Instructions 2005 – Section 36 Ministry of Finance Section 04: Page 40 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Recommendations  The Department should ensure that a Business Plan for the TMA operation is drawn and endorsed by the Government Printer.
 Ministry of Finance to monitor that the business plan for the TMA is received as per the direction in the Finance manual.

 The Department should ensure that the budget forecast for the TMA operations is designed to ensure that the spending and collections are regularly monitored and compared accordingly with the budget.
Department’s Comments The Business Plan was not available due to the disciplinary proceedings being undertaken against the officer, Assistant Government Printer Production, responsible for drawing up the Plan, and his being subsequently suspended from duties.

However, your recommendations have been noted.


4.32.6 Key Performance Indicators and Work Programs of the TMA Operators TMAs are operated on a semi-commercial basis to increase the returns that are realized from them and to provide goods, services or works more cost-effectively.
The policies and procedures in this assign particular responsibilities to:  Government Printer;  Assistant Government Printer Production;  Assistant Accountant;  Accountant;  Stock Keeper;  Credit Officer;  Sales Officer.52 Verification of the TMA operation revealed that the department does not have key performance indicators and work programs to measure the performance of the TMA operators and the decisions undertaken in regards to the TMA operation.
Such measures give indicators and commitment in the performance of the TMA’s and could take the concept of the quasi – commercial business venture in government to new heights setting the bench mark in the Government’s Printing and Bookshop industry.

Recommendation The department should ensure that the Key Performance Indicators and TMA operators work programs are designed and assessed at year end.
Department’s Comments These measures could not be implemented due to the suspension from duties of the officer with the primary responsibility for this.

However, your recommendations have been noted.


52 Government Printing and Stationery – Part 6 – Introduction Paragraph Ministry of Finance Section 04: Page 41 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ 4.32.7 TMA Performance TMAs are operated on a semi-commercial basis to increase the returns that are realized from them and to provide goods, services or works more cost-effectively.
The following ratios have been calculated to portray the department’s performance in the operation of its TMA: Ratio Formula Year 2008 Year 2007 Comments Activity Ratio Stock - Turnover Cost of Goods Sold Average Inventory at Cost 0.9 times Opening Stock of for 2006 be 2007 (closing the could not determined.
year Gross Profit ratio Revenue – Cost of Sales Revenue 0.35 times Could determined not be Profit Margin ration Operating Profit after tax Total Income 0.17 times Could determined not be Activity Ratio - Debtors Turnover Accounts Receivable Revenue/365 85.4 days 67.8 days Performance Ratio – Cash Flow to Asset Cash from Operations Total Assets 0.09 0.21 This ratio indicates the number of time the stock has been turned over during the period and evaluates the efficiency with which a firm is able to manage its inventory.
GPSD has a low inventory turnover.

This implies that there is an over-investment inventories, dull in business, poor quality of goods, stock accumulation, accumulation of obsolete and slow moving goods and low profits as compared to total investment.

The inventory turnover ratio is also an index of profitability, where a high ratio signifies more profit; a low ratio signifies low profit.
Gross profit ratio indicates to what extend the selling prices of goods per unit may be reduced without incurring losses on It reflects efficiency with operations.

which a firm producers its product.

The GPSD is low which indicates that there is an increase in COGS without increase in selling price.

income Indicates what portion of contribute to the after tax income of the department.
A profit margin of 17% means for each dollar of income that GPSD generates, it is contributing 17 cents to its net income.

The shorter the average collection period, the better the quality of debtors, as a short collection period implies the prompt payment by debtors.

GPSD long collection shows an excessively liberal and period inefficient collection performance.

As such, liquidation could be severely impaired.


implying a very and credit This ratio relates to the organisations ability to generate cash compared to its asset size.

A ratio of 0.09 does not look and good; Government Stationery Department can into problems in generating cash.

A point of concern is the decline from 21% to 9%.


Printing run Ministry of Finance Section 04: Page 42 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Ratio Formula Year 2008 Year 2007 Comments Asset Turnover Total Income Total Assets 0.64 0.56 When the ratio declines below 10% then there may be some cause for concern.

Indicates the relationship between assets and revenue.
It indicates the efficiency with which the firm uses all its assets to generate revenue.

The higher the firm’s asset turnover, the more efficiency its assets have been utilized.

Return on Assets (ROA) could not be calculated as the department fixed assets values are not reflected in the balance sheet.

The above ratios indicate poor TMA performance and therefore needs improvement in the organizations activity and performance ratio.
It is a great concern that the departments performance ratio has fallen below 10%.

It reflects that the department is not generating enough cash in order to meet its expenditures given the amount of assets invested in the TMA.

Weaker ratios indicate inefficient TMA performance and thus could affect the viability of the departments TMA operation.
Recommendation The Department should ensure that efforts are made to improve on the activity, performance and profitability ratios with key TMA personnel monitoring the ratios on a quarterly basis.

Department’s Comments Your recommendations have been noted.
4.32.8 Revenue due not reflected in the TMA Financial Statement Every registered person shall, on or before the last day of the month following the last day of every taxable period, without notice or demand furnish to the Commissioner a tax return, in such prescribed form as may be approved by the Commissioner.53 Scrutiny of the Vat records for TMA revealed that the Vat refund of $25,056 which is yet to be received from FIRCA has not been reflected in the department’s financial statement for the TMA.
The vat refund was for the December 2008 period.

As such the department’s asset is understated and fails to reflect the true financial position of the TMA as at 31/12/08.

Recommendation The Department should ensure that upon assessment of VAT returns, any VAT revenue due or payable is recognized and captured in the accounting process in order to reflect the true picture of the organisation’s operation for a particular accounting period ending.
53 Vat Decree 1991 – Section 33(1) Ministry of Finance Section 04: Page 43 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Department’s Comments Your recommendations have been noted.

4.32.9 Lodgements Credited to Direct Material allocation The revenue officer shall prepare a journal voucher or journal entry input form before posting revenue transactions into the general ledger.
The journal voucher for an adjustment should outline: reason for raising adjustments; i) ii) the accounts that should be debited and credited; iii) the amount debited and credited to each account.54 Audit noted that the Headquarters TMA lodgement of $18,151.87 dated 26/02/08 (receipt no.

859981) has been credited to Direct Materials Purchases.

No proper explanation was provided for the above posting.
The credit of lodgements to Direct Materials Purchases allocation is misleading the TMA accounts hence understates the Direct Material and revenue allocation by the above amount.

Recommendations  The internal control procedures in the Account Section, specifically supervisory checks should be strengthened to avoid such discrepancies.
 Justification of the credit of lodgement in the Direct Material allocation should be provided and if need be adjusted accordingly to reflect the correct picture of the account.

Department’s Comments The Revenue Receipt No.

should read 859984 and not 85998 as stated.

The $18,151.87 was payable to Mass Stationery Supplies and was paid out from the Direct Materials Purchase allocation.

Due to cash flow problems this cheque was paid as Receipt No.
859984 crediting the Direct Materials Purchase allocation.
4.33 Statement of Losses 4.33.1 Failure to Provide Board of Survey Reports Each Agency shall establish a register of losses and shall record in it details of each loss, including:  The date of loss;  Particulars of the loss including value;  Nature and circumstances of the loss;  Recovery action taken;  Any amount recovered, written off, waived or postponed;  A record of the year of disclosure in the agency’s financial statements; and  References to supporting documentation (e.g.
loss reports, write off approvals, file references).55 54 Government Printing & Stationery Finance Manual 2005, Section 5.5.4 Ministry of Finance Section 04: Page 44 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Details of losses incurred each year shall be reported in the agency’s annual financial statements in accordance with the reporting format set out in these Instructions.56 The department failed to prepare and submit its Board of Survey report to Ministry of Finance on time.
This report drafted by the Board of Survey team is used to draw conclusions on the working conditions of the department’s inventories and fixed assets.

The report is submitted to Ministry of Finance for their approval of the write off’s of those items recommended in the report.

If approved by Ministry of Finance then these write off’s would have been included as losses of the department for the year in the Statement of Losses and reported in the Agency Financial Statement of Ministry of Finance.
The Principal Accounts Officer Treasury revealed that numerous reminders were sent to the department in regard to the above but proved futile.

Comments taken from the Department indicated that due to the renovation of the office most of the items were scattered over hence Board of Survey was not carried out on time.
The effect of failing to comply Finance Instruction 2005 resulted in the Statement of Losses reported in the Agency Financial Statement not reflecting the true picture of the account hence it could be understated.

Any deviation from the established procedure increases the risk of losses of valuable items through theft and misappropriation of inventories/ fixed assets.
Recommendations  The Department should address this shortcoming by communicating and coordinating matters with the responsible officers in a timely manner.

 The Department should ensure that it complies with the established policies and procedures in order to have an effective and efficient operation and management of the office and its resources.
Department’s Comments The 2008 Annual Board of Survey had been carried out but the Report was held back because the Ministry of Finance had commissioned Ernst & Young to carry out a revision of the Department’s operations which included a board of survey and valuation of the Department’s fixed assets.

A copy of this is attached for your reference.
INFORMATION TECHNOLOGY & COMPUTING SERICES 4.34 Statement of Losses Each Agency shall establish a register of losses and shall record in it details of each loss, including:  The date of loss;  Particulars of the loss including value;  Nature and circumstances of the loss;  Recovery action taken; 55 Finance Instructions 2005 – Section 65 56 Finance Instructions 2005 – Section 66 Ministry of Finance Section 04: Page 45 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________  Any amount recovered, written off, waived or postponed;  A record of the year of disclosure in the agency’s financial statements; and  References to supporting documentation (e.g.
loss reports, write off approvals, file references).57 Details of losses incurred each year shall be reported in the agency’s annual financial statements in accordance with the reporting format set out in these Instructions.58 The department failed to prepare and submit its Board of Survey report to Ministry of Finance on time.

This report drafted by the Board of Survey team is used to draw conclusions on the working conditions of the department’s inventories and fixed assets.
The report is submitted to Ministry of Finance for their approval of the write off of those items recommended in the report.

If approved by Ministry of Finance then these write off’s would have been included as losses of the department for the year in the Statement of Losses and reported in the Agency Financial Statement of Ministry of Finance.

The Principal Accounts Officer Treasury revealed that numerous reminders were sent to the department in regard to the above but proved futile.
Comments taken from the Account officer of the Department indicated that there was no Board of Survey conducted for 2008.

The effect of failing to comply with Finance Instruction 2005 resulted in the Statement of Losses reported in the Agency Financial Statement not reflecting the true picture of the account hence it could be understated.

Any deviation from the established procedure increases the risk of losses of valuable items through theft and misappropriation of inventories/ fixed assets.
Recommendations  The Department should address this shortcoming by communicating and coordinating matters with the responsible officers in a timely manner.

 The Department should ensure that it complies with the established policies and procedures in order to have an effective and efficient operation and management of the office and its resources.

Department’s Comments The Department did not conduct a Board of Survey in 2008.
Therefore, no loss was reported to the Treasury Department for the purpose of constructing the Agency’s Statement of Losses.

The Department admits that record keeping in 2008 of its fixed assets and inventories did not comply with the requirement of the established policies and procedures.

Therefore, the Department was in no position to conduct a proper Board of Survey of its poorly maintained records.
57 Finance Instructions 2005 – Section 65 58 Finance Instructions 2005 – Section 66 Ministry of Finance Section 04: Page 46 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Appendix 4.1: Statement of Output Costs Portfolio Leadership Policy Advice and Secretariat Support 2008 Description EXPENDITURES Operating Established Staff Government Wage Earners Travel & Communication Maintenance & Operations Purchase of Goods & Services Operating Grants & Transfers Special Expenditures Total Operating Costs Capital Expenditure Capital Construction Capital Purchases Capital Grants & Transfers Total Capital Expenditure 2008 $ 2007 $ 1,353,310 51,650 226,120 294,024 65,862 1,400,233 600,184 3,991,383 1,800,000 615,934 4,133,262 6,549,196 1,708,018 92,765 213,101 293,437 565,438 495,060 1,680,577 5,048,396 1,424,880 882,647 923,110 3,230,637 Value Added Tax 404,887 456,477 TOTAL EXPENDITURES 10,945,466 8,735,510 Budget Management – Planning, Execution and Monitoring 2008 Description EXPENDITURES Operating Established Staff Government Wage Earners Travel & Communication Maintenance & Operations Purchase of Goods & Services Operating Grants & Transfers Special Expenditures Total Operating Costs Capital Expenditure Capital Construction Capital Purchases Capital Grants & Transfers Total Capital Expenditure 2008 $ 2007 $ 2,453,697 215,189 104,323 102,006 53,152 --- 18,464 2,946,831 --- --- 2,455,040 2,455,040 2,415,358 245,515 120,108 107,264 66,427 --- 13,992 2,968,664 --- ---
 3,692,440 3,692,440 Value Added Tax 41,893 339,513 TOTAL EXPENDITURES 5,443,764 7,000,617 Ministry of Finance Section 04: Page 47 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Provision of Accounting Services 2008 Description EXPENDITURES Operating Established Staff Government Wage Earners Travel & Communication Maintenance & Operations Purchase of Goods & Services Operating Grants & Transfers Special Expenditures Total Operating Costs Capital Expenditure
 Capital Construction Capital Purchases Capital Grants & Transfers Total Capital Expenditure 2008 $ 2007 $ 606,879 28,987 8,941 215,364 19,279 5,037,899 --- 5,917,349 --- --- --- --- 615,270 26,282 13,382 250,794 20,056 4,438,800 130 5,364,714 --- --- --- --- Value Added Tax 31,668 102,951 TOTAL EXPENDITURES 5,949,017 5,467,665 Collection of Taxes 2008 - FIRCA Description EXPENDITURES Operating Established Staff Government Wage Earners Travel & Communication Maintenance & Operations Purchase of Goods & Services Operating Grants & Transfers Special Expenditures Total Operating Costs Capital Expenditure Capital Construction Capital Purchases Capital Grants & Transfers Total Capital Expenditure 2008 $ 2007 $ 32,758 3,896 2,592 5,184 487 31,534,440 --- 31,579,357 --- --- 10,000,000 10,000,000 36,924 3,539 3,327 6,618 390 31,534,440 130 31,585,368 --- --- 14,000,000 14,000,000 Value Added Tax 962 6,379 TOTAL EXPENDITURES 41,580,319 45,591,747 Ministry of Finance Section 04: Page 48 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Financial Asset and Liability Management 2008 Description EXPENDITURES Operating Established Staff Government Wage Earners Travel & Communication Maintenance & Operations Purchase of Goods & Services Operating Grants & Transfers Special Expenditures Total Operating Costs Capital Expenditure Capital Construction Capital Purchases Capital Grants & Transfers Total Capital Expenditure 2008 $ 2007 $
 32,758 3,896 2,592 5,184 487 --- --- 44,917 --- --- --- --- 36,924 3,539 3,327 6,618 390 --- 130 50,928 --- --- --- --- Value Added Tax 962 6,379 TOTAL EXPENDITURES 45,879 57,307 Financial Management Reform – Development & Implementation of Reform Initiatives 2008 Description EXPENDITURES Operating Established Staff Government Wage Earners Travel & Communication Maintenance & Operations Purchase of Goods & Services Operating Grants & Transfers Special Expenditures Total Operating Costs Capital Expenditure
 Capital Construction Capital Purchases Capital Grants & Transfers Total Capital Expenditure 2008 $ 2007 $ 784,822 15,305 20,843 16,894 83,354 --- 513,234 1,434,452 --- 1,001,998 --- 1,001,998 894,989 18,036 26,786 19,622 55,111 --- 432,134 1,446,678 --- 2,596,815 --- 2,596,815 Value Added Tax 131,456 379,310 TOTAL EXPENDITURES 2,567,906 4,422,803 Ministry of Finance Section 04: Page 49 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Public Reporting – Statistics & Statistical Forecasts 2008 Description EXPENDITURES Operating Established Staff Government Wage Earners Travel & Communication Maintenance & Operations Purchase of Goods & Services Operating Grants & Transfers Special Expenditures Total Operating Costs Capital Expenditure Capital Construction Capital Purchases Capital Grants & Transfers Total Capital Expenditure 2008 $ 2007 $ 1,020,909 27,920 103,038 132,065 55,176 6,012 1,590,732 2,935,852 --- --- --- --- 1,088,869 33,615 100,793 140,909 50,254 7,439 4,333,246 5,755,125 --- --- --- --- Value Added Tax 207,751 434,234 TOTAL EXPENDITURES 3,143,603 6,189,359 Supply of Goods – General Hardware & Stock Take Services 2008 Description EXPENDITURES Operating Established Staff Government Wage Earners Travel & Communication Maintenance & Operations Purchase of Goods & Services Operating Grants & Transfers Special Expenditures Total Operating Costs Capital Expenditure Capital Construction Capital Purchases Capital
 Grants & Transfers Total Capital Expenditure 2008 $ 2007 $ 1,304,685 641,681 42,392 93,604 27,753 --- --- 2,110,115 --- --- --- --- 1,562,373 758,476 72,493 102,250 37,534 --- 519 2,533,645 --- --- --- --- Value Added Tax 25,578 276,937 TOTAL EXPENDITURES 2,135,693 2,810,582 Ministry of Finance Section 04: Page 50 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Supply of Goods – Stationery & Printing Services 2008 Description EXPENDITURES Operating
 Established Staff Government Wage Earners Travel & Communication Maintenance & Operations Purchase of Goods & Services Operating Grants & Transfers Special Expenditures Total Operating Costs Capital Expenditure Capital Construction Capital Purchases Capital Grants & Transfers Total Capital Expenditure 2008 $ 2007 $ 1,481,187 452,156 25,714 460,348 15,391 --- 10,000 2,444,796 299,999 --- --- 299,999 1,582,107 341,541 42,121 432,650 9,027 --- 259 2,407,705 261,037 477,492 --- 738,529 Value Added Tax 90,791 366,984 TOTAL EXPENDITURES 2,835,586 3,513,218 Provision of Infrastructure – Electronic Networking, Software and Services 2008 Description EXPENDITURES Operating Established Staff Government Wage Earners Travel & Communication Maintenance & Operations Purchase of Goods & Services Operating Grants & Transfers Special Expenditures Total Operating Costs Capital Expenditure Capital Construction Capital Purchases Capital Grants & Transfers Total Capital Expenditure 2008 $ 2007 $ 1,199,834 34,216 1,039,978 1,634,865 114,156 --- --- 4,023,049 --- 3,288,906 --- 3,288,906 1,115,676 33,039 805,994 1,001,344 81,560 --- 259 3,037,872 --- 2,100,988 --- 2,100,988 Value Added Tax 552,558 543,925 TOTAL EXPENDITURES 7,864,513 5,682,785 Ministry of Finance Section 04: Page 51 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Licensing, Compliance & Monitoring – Domestic Price Control 2008 Description EXPENDITURES Operating
 Established Staff Unestablished Staff Travel & Communication Maintenance & Operations Purchase of Goods & Services Operating Grants & Transfers Special Expenditures Total Operating Costs Capital Expenditure Capital Construction Capital Purchases Capital Grants & Transfers Total Capital Expenditure Value Added Tax 2008 $ 2007 $ --- --- --- --- --- 643,560 --- 643,560 --- --- --- --- --- --- --- --- --- --- 643,560 --- 643,560 --- --- --- --- --- TOTAL EXPENDITURES 643,560 643,560 Appendix 4.2: FNPF Reconciliation
 (a) Total FNPF against salaries and wages for 2008 FNPF as per financial statement Add: December 2008 FNPF paid in January 2009 Less: December 2007 FNPF paid in January 2008 FNPF for 2008 Gross pay subject to FNPF (Xxxx xxx divided by 0.08) (b) Salaries and wages for 2008 subject to FNPF Salaries, Wages and Allowances as per financial Statement Less: Salaries and wages not subject to FNPF Salaries, wages and allowance for 2008 subject to FNPF Variance Ministry of Finance $ Xxx xxx Xxx xxx Xxxx xxx Xxx xxx Xxxx xxx Xxxxx xxx Xxx xxx Xxx xxx Xxxxx xxx (Xxx xxx) Section 04: Page 52 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Appendix 4.3: Outstanding Audits Completed Audits Audits in Progress Outstanding Audits 1.
Government Supplies 2.

Social Welfare 3.

FIMSA 4.

Provincial Development 1.

Agriculture 1.

Health 2.

PWD 1.

Provincial Development 2.

Government Supplies 1.

Transport Works & Energy 1.

Ministry of Agriculture 2.

Health 3.

Women & Social Welfare Planned Audits Team West 1.

Social Welfare 2.

PWD 3.

FIMSA 4.

Agriculture 5.

Health 6.

Provincial 7.

Government supplies Team North 1.

Government Supplies 2.

Transport Works & Energy 3.

Ministry of Agriculture 4.

Health 5.


Women & Social Welfare 6.

Provincial Development Special Investigations 1.

Government Supplies Verification Report 2.

Allegation against Ministry of Finance Employee 3.

Allegation Government Employee against Supplies 4.

FICAC Structure 5.

CIDA Expenditure 6.

Sale of scrap vehicles- Public Works Department and Government Supplies 7.

Denarau Water Meter Connections (E Dovibua & Y Prasad) 8.

IDC account of Police Department-Team II IHRDPEP expenditure 9.
Team III 10.

Printing of HIV/Aids strategic plan by Ministry of Health Team II Ministry of Finance 1.

Marine Department- Charter of Barge Vualiku 2.

Transport & Works- Building Expenditure 3.

Suva Water Supply- Allocation of hired vehicles to various sections and processing of payments.

4.

Police Department- 10% Traffic Infringement Commission not properly accounted for 5.

Government Supplies- Sale of low grade materials to Government Supplies by Vinod Patel Lautoka branch 6.
Transport & Works- Engineering & Industrial Supplies (Fiji) Ltd claim 7.

Transport & Works- Payment of overtime and meal claims to Government Shipping Service Employees 8.

Multi Ethnic Affairs- of Misappropriation $5,035.00 (August 2007) 9.

Ministry of Commerce- Loss of interest estimated to be $40,000 for not investing $1m held by the Ministry being Tax Free Zone.

10.
10.

Local Government & - Public Utilities Items following delivered without proper procedures Section 04: Page 53 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Audits in Progress Outstanding Audits 11.

Post Fiji – Further investigations on 3 additional staff at Post Fiji 12.

Transport & Works – Audit of Stores.

National 13.

Defence, Security, Immigration & National Disaster – Special Audit of units 2008 accounts.

14.
14.

Transport Works & Allegations Energy three directed officers at Labasa Office for not carrying out their work effectively and efficiently.

15.

Transport Works & Energy – Clearance of accountable advance Korosi and Aminiasi Rawasa for $2,006 appeared suspicious 16.

Transport Works & Energy – Complaints on handling of of Tender Construction of Sheds.

– towards Planned Audits Completed Audits 11.

Commisioner Northern Project-Team North 12.


Material Purchase – Cyclone Ami 13. against Supervisor Tiva Palako – Water & Sewarage- Team II Allegations 14.

Agricultural Marketing Authority 15.

Official verification of Oag report Receiver- 16.

Dept of Immigration – Misappropriation by cashiers 17.

Misuse of vehicle – PRO Landuse LRPD 18.

Mineral Resources- Retirement of accountable advance 19.

Arrears of Electricity Nabouwalu & Taveuni-Team North 20.

Complaint against PA Nabouwalu – Team North 21.


Advance payment for goods and services (DECE) 22.

Commerce Commission – awaiting PM’s decision Ministry of Finance Section 04: Page 54 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Appendix 4.4: Discrepancies in the Pensions Record Pension No.
Pensioner Pension Type Neisau Sakiusa Narayan Edward Rao Krishna Shrama Himat Ram Sharma M P Singh Sarju Vakuruivalu Isireli Vuda Esira Vuetibau Viliame Beya Savenaca Viliame Ravukusa Raselau Isimeli Save Sulio Vatukatakata Jone Chandra David Suresh Kilibau Peni Cakai Paula Ramaia Ratidara Rusiate Tavaiqia Viliame Tukana Inia Singh Pram Visa Waqa N Nakaivalu Apisai Natubavivi Kelepi Nawalu Paula O’Brian S C Raiqiso Filimone Radar E M Peter Peter Sese Peniana Sevutia Emosi Civil Civil Civil Civil Civil Civil Civil Civil Civil Civil Civil Civil Civil Civil Civil Civil Civil Civil Civil Civil Civil Civil Civil Civil Civil Civil Civil Civil Civil Civil Civil Civil File Transferred to Archives (Y/N Payroll System ID Not Found ID Not Found ID Not Found ID Not Found ID Not Found ID Not Found ID Not Found ID Not Found ID Not Found ID Not Found ID Not Found ID Not Found ID Not Found ID Not Found ID Not Found ID Not Found ID Not Found ID Not Found ID Not Found ID Not Found ID Not Found ID Not Found ID Not Found ID Not Found ID Not Found ID Not Found ID Not Found ID Not Found ID Not Found ID Not Found ID Not Found ID Not Found Ministry of Finance Section 04: Page 55 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________
 Appendix 4.5: Pending Surcharge Cases Details Ministry/ Department Reasons Case at Year Received Surcharge Section Cases Not Sourced From Auditor Generals Report Write off of water charges PWD 26/04/08 Police Unauthorized use of IDC account.
15/05/08 Payment of compensation Co-operatives 20/11/2006 Theft of wages PWD 19/01/2007 letter Explanation issued on 09/05/08.

Officer needed time to reply.

Awaiting AG’s ruling on FIN 34 of July, 1980.

Explanation submission made on 20/12/07 Treasury has written to department requesting police response.
Non recovery of boat fares Transport Aviation & Civil 09/02/2006 Case on hold Auditor General’s Report 2005 – Tabled in 2006 Abuse of funds Local Govt, Urban Dev and Public Utilities 27/02/2007 Memo sent on 17/07/07 officers Surcharge yet initiated.

the identify to responsible.

to be Payment for idle hours Local Govt, Urban Dev and Public Utilities 27/02/2007 Unjustified excessive urgent delivery at Lautoka Water Supply Stores.
Local Govt, Urban Dev and Public Utilities 27/02/2007 Installation of meters in the wrong zone Local Govt, Urban Dev and Public Utilities 27/02/2007 the to identify responsible.

to be Memo sent on 06/08/07 officers Surcharge yet initiated.

Memo sent on 17/07/07 officers Surcharge yet initiated.

the to identify responsible.

to be Memo sent on 06/08/07 officers Surcharge yet initiated.

the to identify responsible.


to be Damage to various assets Islands Maritime Fiji Safety Administration 27/02/2007 Memo sent 02/07/07 for a copy of investigation Ministry Comments of Finance 50 % on Officer suspension.

Officer taken to Court by FICAC.

has case SG.

them been This resubmitted to A/PSF on 27/08/09.

Officer been suspended effective from 27/08/09.


on to Written 23/06/09 to for identify the two officers to be surcharged as was stated on the court ruling Police closed this case as there was no leads and the amount of $19,828.26 on off was written seeking 21/04/08 after Minister Finance approval Case pending with PSC of Can not identify.

OAG to from working identify papers then any further action can be taken.

Most senior have officers retired .

on Case 10/08/09.

Officer resigned from Service.


discontinued Can not identify.

OAG to identify from working papers then any further action can be taken.

Most senior have officers retired.

Can not identify.

OAG to identify from working papers then any further action can be taken.

Most senior have officers retired.

Can not identify.
Can not identify.

OAG to from working identify Ministry of Finance Section 04: Page 56 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Details Ministry/ Department Case at Year Received Surcharge Section Reasons report.

Authorizing overpayment Roads 27/2/2007 Deficiency in stores Govt.
Printing 27/02/2007 Breaching of procurement procedures Elections 27/02/2007 Extravagant expenditure Fiji Prisons Services 27/02/2007 Payment compensation Co-operatives 27/02/2007 Overpayment of salary Agriculture 27/02/2007 Non recovery of quarantine fees.

Agriculture 27/2/2007 Approving purchases.

Certifying hours excessive Roads 27/02/2007 unproductive Roads 27/02/2007 due to Overpayments tempering with the private plant hire tally sheets.
Overpayment to contractor for hire of grader and carting of digger/excavator.

Roads Roads 27/02/2007 27/02/2007 Driver to be surcharged for Youth & Employment 27/02/2007 Ministry Comments of Finance papers then any further action can be taken.

Most senior have officers retired.

Can not identify.

OAG to identify from working papers then any further action can be taken.

Most have officers senior retired.

Can not identify.

OAG to identify from working papers then any further action can be taken.
Most senior have officers retired.

Case 11/02/09 discontinued on SG ruled on 06/05/09 that Fin.

Circular 34/1980 is no longer valid.

Officer retired.

This is appearing twice.

Refer 3rd case from top.

Can not identify.

OAG to identify from working papers then any further action can be taken.

Most senior have officers retired No further comments Can not identify.

OAG to identify from working papers then any further action can be senior taken.

Most officers have retired.

Case 10/08/09.


discontinued on Officer surcharged and recovery is on going Memo sent on 26/06/07 to officer responsible identify Memo sent on 27/6/07 to officers identify responsible.

from for of Memo sent on 04/07/07 officers identify to responsible.

Awaiting memo SG’S office resubmission discontinuation.

Explanation submission made on 20/12/07 Follow up being made.

Last follow up done on 21/11/07.

to for Dept has written Solicitor General legal action.
Reminder 24/10/07 officers.

sent to on identify officer’s be to by Identified submission checked PA/Surcharge.

Reminder 24/10/2007 officers.

Memo sent on 17/07/07 to identify the former supervisor.

sent identify to Can not identify.

OAG to from working identify papers then any further action can be taken.

Most senior have officers retired.


VCU wrote memo to SG Officer surcharged on Ministry of Finance Section 04: Page 57 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Details Ministry/ Department Reasons Case at Year Received Surcharge Section damage to vehicle GN047.

Payment made without delivery of goods Roads 27/02/2007 on 18/07/07-follow up previous on their correspondences for release of Police Traffic docket, seeking further advice from SG.
Memo sent to identify the man store responsible.

Auditor General’s Report 2004 – Tabled in 2005 Approving purchases and signing LPO’s above the approved limit.

RFMF 18/10/2004 Lapse letter written on 21/12/07 with PS for signing.
Payment to contractors Works & Energy 2007 Unjustified excess urgent delivery Works & Energy 2007 Installation of meters wrong zone in Works & Energy 2007 Advance facilitate bank guarantee payment to Energy 2005 Theft of wages PWD 2007 Memo sent on 17/07/07 officers Surcharge yet initiated.

the to identify responsible.

to be Memo sent on 17/07/07 officers Surcharge yet initiated.

the to identify responsible.

to be the to identify responsible.


to be Memo sent on 06/08/07 officers Surcharge yet initiated.

Finance to investigate further.

Treasury has written to requesting department police response.

Clearance of accountable advance Agriculture 2004 on Memo 17/4/2007 and a copy of sent Ministry Comments of Finance 05/11/08 recovery is on going.

Can not identify.

OAG to identify from working papers then any further action can be taken.

Most senior have officers retired.


process Surcharge reactivated on 27/08/09.

Have written to A/PSF to study file and authorize deduction.

Can not identify.

OAG to identify from working papers then any further action can be taken.

Most senior have officers retired.

Can not identify.

OAG to identify from working papers then any further action can be taken.

Most senior have officers retired.

This is repetition of case on the 9th row This is not a surcharge case.
2005 report recommended for disciplinary action and further investigation.

Investigation has not taken place hence no one has been surcharged yet.

This case was closed by Police after all avenues of inquiry been exhausted and that they do not have any more the above leads.

On grounds the loss amount of $19828.26 was written off on 21/04/08.

Agriculture has requested for a write off.


have Ministry of Finance Section 04: Page 58 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Details Ministry/ Department Reasons Case at Year Received Surcharge Section Ministry Comments of Finance Auditor General’s Report 2003 – Tabled in 2004 Approving purchases and the signing LPO’s above approved limit.

RFMF 28/03/2006 report sent as audit well.

Waiting for reply.
Waiting for reply.

Lapse letter written on for 12/12/07 with PS signing.

Clearance of accountable advances Agriculture 18/10/2004 is still awaited Reply from Agric17/04/2007.

Surcharge process reactivated on 27/08/09.

Have written to A/PSF to study file and authorize deduction Agriculture has requested for a write off.

Appendix 4.6: Alleged Misuse of Government Vehicles Date 07/02/08 Vehicle No.
GN 184 Ministry/ Department Police Department Complain Comment Vehicle almost collided with the complainant’s when turning into Vesivesi Road.

vehicle Memo has been sent by Finance.

Explanations yet to be received 08/02/08 GN 048 02/07/08 GM 474 Commerce, Industry, Investment Communications and Agriculture & Primary Industries 02/07/08 GN 325 Provincial Development Vehicle was seen around 10 pm picking up civilians at the Nadi Back Road.
Vehicle seen carrying private passengers for weddings, picnics and other personal use.

Vehicle is also taken to a Mr. Uday Bhan Singh the proper authorities being informed.

repairs without for Vehicle seen carrying private passengers for weddings, picnics and other personal use.

Vehicle is also taken to a Mr. Uday Bhan Singh the proper authorities being informed.

repairs without for 3 memos were sent by Finance dated & 07/07/08.

Explanations yet to be received.


21/04/08, 13/05/08 Memo has been sent by Finance dated 25/07/08.

Explanations yet to be received.

Memo has been sent by Finance dated 25/07/08.

Explanations yet to be received.

06/05/08 877, 388, GM GN GM 997 Mineral Resources GM 877 and GN 388 were given to Mineral Resources for repairs & replacement of vehicle parts but were still in running conditions.
Explanations not given yet also has Mineral not their quarterly submitted any of returns since the 3rd quarter of 2006.

Resources  No written approval was granted to mechanic Arun Kumar to garage government vehicles at his residence.

 All 3 vehicles (GM 997, GM 877, GN 388) the mentioned complainant have no by Ministry of Finance Section 04: Page 59 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Date Vehicle No.
Ministry/ Department Complain Comment vehicle records i.e.

no running and logbooks.


sheets Ministry of Finance Section 04: Page 60 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Section 5 Ministry Indigenous and Multi Ethnic Affairs of Provincial Development, Role and Responsibilities The Ministry of Provincial Development, Indigenous and Multi-Ethnic Affairs is responsible for the preservation of the different cultures in Fiji, lease and land administration, education assistance, and rural development.
Formerly, these agencies were run as separate ministries.

The change was necessary to allow the alignment of Government policies, administrative reforms and the improvement of development strategies aimed equally amongst citizens of Fiji.

Specific programmes directed towards Indigenous Fijian and Rotuman communities are still maintained through this re-organisation.
The few primary legal frameworks that cover this realignment are the Fijian Affairs Act and Regulations, the Lands Act, and the Fisheries Act.
Table of Contents 5.1 5.2 5.3 5.4 5.5 5.6 5.7 5.8 5.9 5.10 5.11 CONSOLIDATED FINANCIAL STATEMENT .......................................................................................... 2 Audit Opinion .................................................................................................................. 2 Statement of Receipts and Expenditure ........................................................................ 2 Statement of Output Costs ............................................................................................. 3 Appropriation Statement ................................................................................................ 3 Statement of Losses ...................................................................................................... 4 AUDIT FINDINGS .................................................................................................................................... 4 Financial Statement ....................................................................................................... 4 Revenue Variances ........................................................................................................ 5 Trust Fund Accounts ...................................................................................................... 7 Drawings Account .......................................................................................................... 8 VAT Reconciliation
 ......................................................................................................... 8 FNPF Reconciliation .................................................................................................... 10 DEPARTMENT OF PROVINCIAL DEVELOPMENT ............................................................................. 11 Issuing of Cheques - Office of the Commissioner Western ......................................... 11 5.12 Arrears of Revenue – Office of the Commissioner Western ........................................ 12 5.13 5.14 Incomplete Projects - Western Division ....................................................................... 13 5.15 Motor Vehicle Accidents – Western Division ............................................................... 15 DEPARTMENT OF MULTI-ETHNIC AFFAIRS ...................................................................................... 17 Analysis of Fuel Usage ................................................................................................ 17 DEPARTMENT OF INDIGENOUS AFFAIRS ........................................................................................ 18 5.17 Inspection of Multi-Year Projects ................................................................................. 18 Appendix 5.1: Issuing of Cheques ........................................................................................... 19 Appendix 5.2: VAT Reconciliation
 ............................................................................................ 20 Appendix 5.3: FNPF Reconciliation ......................................................................................... 21 5.16 Ministry of Provincial Development, Indigenous & Multi-Ethnic Affairs Section 05: Page 1 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ CONSOLIDATED FINANCIAL STATEMENT 5.1 Audit Opinion The audit of the 2008 accounts of the Ministry of Provincial Development, Indigenous and Multi- Ethnic Affairs resulted in the issue of a qualified audit report.
The qualifications are as follows.

a) The Ministry has not provided the following contrary to Finance Instructions 82(1):    Statements of Output Costs; Statement of Losses; Trust Fund Account Statement of Receipts and Payments.

The Financial Management Information System shows that the Ministry as at 31/12/08 had trust funds totalling $107,185 and operating trust funds totalling $43,914.
5.2 Statement of Receipts and Expenditure The Ministry of Provincial Development, Indigenous and Multi-Ethnic Affairs collected revenue totalling $1,444,682 and incurred a total expenditure of $45,303,389 in 2008.
Table 5.1: Statement of Receipts and Expenditures for 2008 Description RECEIPTS State Revenue Agency Revenue 2008 $ 2007 $ 1,444,682 0 846,988 0 TOTAL REVENUE 1,444,682 846,988 EXPENDITURES Operating Established staff Unestablished staff Travel & communication Maintenance & Operations Purchase of goods & services Operating grants & transfers Special expenditures Total Operating Expenditure Capital Expenditures Capital Construction 5,267,174 1,208,545 320,481 565,333 278,074 19,281,838 1,437,943 28,359,388 5,200,330 1,242,758 361,061 490,522 284,627 19,100,748 822,959 27,503,005 1,062,093 674,658 Ministry of Provincial Development, Indigenous & Multi-Ethnic Affairs Section 05: Page 2 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Description Capital Purchases Capital Grants & Transfers Total Capital Expenditure Value Added Tax TOTAL EXPENDITURES 2008 $ 95,794 15,300,117 16,458,004 2007 $ 341,090 8,163,395 9,179,143 485,997 45,303,389 1,033,851 37,715,999 Total revenue increased by $597,694 or 71% in 2008 when compared to 2007 due to the following reasons:  Provincial Development Increase in Liquor License by $304,930   Registration of marriages by District Officers by $26,912  Value Added Tax by $45,322  Miscellaneous fee $10,281  Other licences by $1,152  For the Department of Fijian Affairs, the miscellaneous fees increased by $153,293 and  For Multi-Ethnic affairs the miscellaneous fees (refund from scholarships terminated) increased by $55,804.
Total expenditure increased by $7,587,390 or 20% when compared to 2007 as a result of increase in Capital Grants & Transfers by $7,136,722 or 88%.

Special expenditure grant for education funds also increased by $614,984 or 75%.

5.3 Statement of Output Costs The Statements of Output Costs were not submitted for audit contrary to section 82 of the Finance Instructions.

The budget prescribes 13 outputs for the Ministry.


5.4 Appropriation Statement The Ministry of Provincial Development, Indigenous and Multi-Ethnic Affairs incurred expenditures totalling $45,303,389 in 2008 against the budget of $49,457,660 resulting in a savings of $4,154,271 or 8%.
Details of expenditures against the budget estimates are provided in Table 5.2 Table 5.2: Appropriation Statement for 2008 SEG` Item Established Staff Government Wage Earners Travel & Communication Maintenance & Operations Purchase of Goods & Services Budget Estimate $ 6,179,500 1,563,100 372,500 584,700 447,500 Changes $ 80,127 -3,176 5,700 12,300 -94,951 Revised Estimate $ Actual Expenditure $ Carry – Over $ 6,259,627 1,559,924 378,200 597,000 352,549 5,267,174 1,208,545 320,481 565,333 278,074 0 0 0 0 0 Lapsed Appropriation $ 992,453 351,379 57,719 31,667 74,475 Ministry of Provincial Development, Indigenous & Multi-Ethnic Affairs Section 05: Page 3 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ SEG` Item Operating Grants & Transfers Special Expenditure Total Operating Costs Capital Expenditure Capital Construction Capital Purchases Capital Grants & Transfers Total Capital Expenditure Value Added Tax TOTAL EXPENDITURE Budget Estimate $ 20,223,900 1,711,100 31,082,300 Changes $ 0 100,000 100,000 Revised Estimate $ 20,223,900 1,811,100 31,182,300 1,500,000 130,000 12,600,000 14,230,000 593,200 45,905,500 TOTAL EXPENDITURE 0 0 3,439,660 3,439,660 12,500 3,552,160 1,500,000 130,000 16,039,660 17,669,660 605,700 49,457,660 Actual Expenditure $ Carry – Over $ 19,281,838 1,437,943 28,359,388 1,062,093 95,794 15,300,117 16,458,004 485,997 45,303,389 0 0 0 0 0 0 0 0 0 Lapsed Appropriation $ 942,062 373,157 2,822,912 437,907 34,206 739,543
 1,211,656 119,703 4,154,271 The Ministry of Finance approved the transfer of $3,552,160 between the SEGs within the appropriation head during the year.
With the exception of Capital Grants & Transfers (Seg 10), the original budget estimates were sufficient to cover the expenditures in all SEGs.

5.5 Statement of Losses The Ministry did not submit for audit a Statement of Losses contrary to Finance Instruction 82.
AUDIT FINDINGS 5.6 Financial Statement Commencing 2006 financial year, each annual report must include financial statements which have been prepared and signed in accordance with the Finance Instructions, audited by the Auditor General, and accompanied by an audit opinion prepared by the Auditor General.1 The draft financial statements must be submitted to the Auditor General by 31 March in the following year, or within such other time as agreed to with the Auditor General.2 The Ministry submitted its Financial Statements for audit on 13th May, 2009 which was not prepared in accordance with the requirements of Section 82 and Schedule 1 of the Finance Instructions 2005.
The Ministry had not provided the following for audit:  Statements of Output Costs;  a Statement of Losses; and  a Trust Fund Account Statement of Receipts and Payments.

This is a breach of Finance Instructions 82(1).

Recommendation The Ministry should ensure that the requirements of the Finance Instructions are strictly followed in the preparation of the Financial Statements.
1 Finance Instructions 2005 – 81 (2) 2 Finance Instructions 2005 – 81 (3) Ministry of Provincial Development, Indigenous & Multi-Ethnic Affairs Section 05: Page 4 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Management Comments  Department of Indigenous Affairs Please be advised that Ministry of Finance has just given us the template on Thursday 10/09/09 and it will take us a while to compile and understand the integration of the 3 reports.
We would be familiar to compile the 2009 once Finance and Indigenous Affairs staff both commit to understand the compilation of the template.

We hope to compile the 2009 statement of Output Cost with no difficulties in 2010.
5.7 Revenue Variances Each Accounting Head shall ensure that revenue is recorded against the correct account; the recording of revenue is reconciled monthly with the Ministry of Finance; the Ministry of Finance is advised of any errors or discrepancies within 10 working days after the end of each month; and VAT is correctly accounted for and remitted as required.3  Ministry of Provincial Development The Ministry failed to prepare monthly revenue reconciliations and the figures submitted in the Financial Statement was extracted from the FMIS at year end.
In addition, variances were noted between the FMIS figures and the figures provided by the Ministry from the revenue register.

The comparisons between the two figures are provided in table 5.3.
Table 5.3: Comparison of Revenue between FMIS and Ministry’s Revenue Register for 2008 Allocations Income Tax (210104) Vat (220199) Cemetery (230314) Registration (230319) Fees Misc (230399) Arms (230401) Liquor Lics (230405) Trading Lics (230406) Money Lics (230409) Others (230499) Fines (230801) Admin Fines (230802) Power Supplies (260404) Crown (270207) Commission (270301) Veterinary (279906) Miscellaneous (279999) Opr 281203 Total FMIS 1,832.70 132,587.25 37.30 124,419.89 15,671.21 150.50 707,879.83 193,587.25 195.55 5,580.33 64.18 1,000.00 2,119.67 3,432.00 999.96 371.25 12,772.94 12,808.15 1,213,390.29 Ministry (Revenue Register) - 101,254.39 37.30 107,717.35 8,640.26 46.00 568,896.68 166,385.62 195.55 5,258.96 34.18 1,000.00 2,119.67 3,432.00 - 217.25 2,760.80 9,268.37 977,264.38 Variance - 1,832.70 - 31,332.86 - - 16,702.54 - 7,030.95 - 104.50 - 138,983.15 - 27,201.63 - - 321.37 - 30.00 - - - - 999.96 - 154.00 - 10,012.14 - 3,539.78 - 236,125.91 3 Finance Instructions 2005 – 30(1) Ministry of Provincial Development, Indigenous & Multi-Ethnic Affairs Section 05: Page 5 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________  Department of Multi-Ethnic Affairs The Department failed to prepare monthly revenue reconciliation for 2008.
The Accounts Officer stated that the Department did not collect any form of revenue and therefore no reconciliations was prepared.

However, audit noted that a sum of $56,348 is showing as revenue in the AFS while there was an amount of $462 in the 2007 AFS.

 Department of Indigenous Affairs An amount of $110,000 was adjusted to revenue by the Department and the only information disclosed on the journal voucher is that it was a correction of a wrong posting made in 2007 relating to scholarships.
No supporting documents were made available to audit to substantiate the figure.

Recommendations  The Ministry of Provincial Development should ensure that all the revenue collected on behalf of other agencies is journalized and credited to the relevant accounts from the 2009 financial year.

 The Ministry of Provincial Development should reconcile the variances noted between the revenue register and the general ledger.
 The Department of Multi Ethnic Affairs should prepare a monthly revenue reconciliation clearly indicating the source of revenue.

 The Department of Indigenous Affairs should provide a detail analysis of $110,000 disclosed as revenue in its accounts and in future all journal vouchers raised should be supported by relevant source documents.
Management Comments  Ministry of Provincial Development At the month end of each month on receiving the cash analysis sheets from the various Divisions and Districts, we in Headquarters compile Revenue Analysis where it records:- 1.

2.

3.

Revenue Receipts issued daily Relevant allocations to be credited Total lodgements per day Once a main summary is drawn up the Journal voucher is raised for the monthly clearance of revenue as follows:- 1.

2.
2.

Debit Credit - - IDC Account various accounts  The differences in the FMIS figures and the figures provided by the Ministry was due to the officer concerned not including the various adjustments made into the register.

However, we have taken note of the issue and we have taken measures to correct the 2009 records.
Comments not received  Department of Indigenous Affairs The amount of $110,000 was debited to various allocations and credited to Trust Fund in 2007 vide JV 1/12/2007 and in 2008 the same amount was reversed from Trust Fund to Scholarship and in October 2008 Internal Audit (Finance) confirmed that the amount should be credited to revenue as the transaction was for Ministry of Provincial Development, Indigenous & Multi-Ethnic Affairs Section 05: Page 6 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ previous year (2007).
We still cannot ascertain $110,000 as to what revenue it represents as the journal voucher raised still cannot be found as the officer responsible for the journal voucher register is being posted out of the section.
5.8 Trust Fund Accounts Where the agency becomes responsible for managing the Trust money, an application shall be made to the Chief Accountant, Ministry of Finance seeking approval to open a separate bank account and detailing the nature of trust and of any beneficiaries.4 Ministries and Departments should also ensure that all their payroll deductions which include FNPF, PAYE, Insurance, Union dues and other deductions for the month of December 2008 are paid out to various companies and statutory authorities before 31/12/08.5 Ministry of Provincial Development The Ministry’s monthly reconciliations for 2008 were incorrect as these did not disclose all transactions incurred under Fund one.
Deductions made by or from staffs from the Rural Housing Unit as well as the Natural Disaster Unit were not included in the initial reconciliations provided to audit.

Upon our request, the Ministry then prepared a consolidated December 2008 reconciliation.

Department of Multi-Ethnic Affairs After reviewing the initial reconciliations provided by the Department, audit noted that in some instances, the closing balance in one month was not carried forward as the opening balance in the following month.
After audit highlighted the issue, the Department then prepared a new set of reconciliations altogether and on 28/07/09 they resubmitted amended reconciliations for the 12 months.

The Agency’s laxity in maintaining monthly reconciliation coupled with no proper supervisory checks had caused considerable delays in the finalisation of the 2008 AFS audit as the respective departments took substantial amount of time in correcting the reconciliations.
Recommendations  Monthly reconciliation of the Trust Fund should be prepared by all departments and agreed to the general ledger.

 The reconciliations should be thoroughly checked by the supervising Officers to ensure its accuracy before signing them off.
Management Comments  Ministry of Provincial Development Trust Fund Reconciliations have been prepared and checked thoroughly by the Supervising Officers to see that the opening and the closing balances ties up with GL figures before they are signed and submitted to Ministry of Finance.

 Department of Multi Ethnic Affairs 4 Ministry of Provincial Development - Finance Manual.

Section 15.1.1 5 Ministry of Finance - Circular No.

21/07.
21/07.

Section 14.4 Ministry of Provincial Development, Indigenous & Multi-Ethnic Affairs Section 05: Page 7 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Trust Fund Reconciliations have been prepared and checked thoroughly by the Supervising Officers to see that the opening and the closing balances ties up with GL figures before they are signed and submitted to Ministry of Finance.
5.9 Drawings Account The Accounting Head must make all attempts to issue stop notices for all cheques that have remained unpresented for more than 6 months.6Stale cheques (those which are at least 6 months old) shall be reviewed each month to determine the need for a replacement cheque.

Where a replacement cheque is not required, action should be taken to clear it.7 The Accounts Officer shall prepare bank reconciliation within 5 days of the end of the month8.
 Ministry of Provincial Development Scrutiny of Drawings Account revealed that for Headquarters, unpresented cheques amounted to $556,274.94 of which $3,372.68 were stale cheques.

For Commissioner Western it was noted that the Board of Survey was carried out by the two officers who are in-charge of processing cheque payments and preparing the monthly reconciliations.
Audit is of the view that the composition of the Board of Survey team members should be such that there is at least an officer from another department/section to be in the team who is independent and who has no input in the payment process.

Audit had raised this issue because during our audit tour to the Western Division on 26/02/09, we noted that 38 cheques with an aggregate value of $832,666.38 were kept in the Accountant’s drawer supposedly for projects which had not commenced.
Refer to Appendix 5.1 for details Recommendations  The Ministry of Provincial Development should take necessary actions to regularize unpresented and stale cheques.

 Explanation should be provided on the basis of writing cheques totaling $832,666.88 for projects that have yet to commence.

Management Comments  Ministry of Provincial Development The cheques will be transferred to revenue during the month of September 09.
5.10 VAT Reconciliation Subject to the provision of the Vat Decree 1991, the tax shall be charged in accordance with the provisions of this Decree at the rate of twelve and a half percent on the supply (but not including an exempt supply) in Fiji of goods and services, by a registered person in the course or furtherance of a taxable activity carried on by that person, by reference to the value of that supply.9 6 Finance Instruction – s.40 (2) 7 Finance Instruction – s.40 (3) 8 Finance Manual 7.4.7 9 Value Added Tax Decree 1991 4th edition revised to 30/04/04 – section 15 (1) Ministry of Provincial Development, Indigenous & Multi-Ethnic Affairs Section 05: Page 8 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________  Ministry of Provincial Development Analysis of VAT reconciliation revealed that there was a variance of $98,199 between the taxable supplies as per VAT return and the total income/expenditure as per Statement of Receipts and Payments.
In addition, a difference of $152,051 was noted between the actual VAT payments for the year 2008 and the balance disclosed in the general ledger.

Refer to Appendix 5.2 for details  Department of Multi-Ethnic Affairs Analysis of VAT reconciliation revealed that there was a variance of $6,270 between the taxable supplies as per VAT return and the total income/expenditure as per Statement of Receipts and Payments.
In addition, a difference of $3,279 was noted between the actual VAT payments for the year 2008 and the balance disclosed in the general ledger.

Refer to Appendix 5.2 for details  Department of Indigenous Affairs A review of the VAT payments made by the Department in 2008 showed a variance of $694,899.

In addition, a difference of $3,763 was noted between the actual VAT payments for the year 2008 and the balance disclosed in the general ledger.
Refer to Appendix 5.2 for details The failure to prepare regular VAT reconciliation has resulted in the unexplained differences noted above and this issue was also prevalent in the previous year’s audit.

Recommendations The Ministry should:  Check and correct the differences noted above  Ensure compliance with the VAT Decree 1991 while lodging the VAT returns.

 Prepare regular VAT reconciliations so that total expenditure subject to VAT is matched to the VAT paid for a particular period.
Management Comments  Ministry of Provincial Development Every effort is being taken in 2009 to ensure that VAT Decree 1991 is complied with.

VAT reconciliations have also been done to ensure that the expenditure subject to VAT is matched to the VAT paid.

 Department of Multi Ethnic Affairs Comments and recommendations raised have been noted and every effort is being taken to ensure that VAT Decree of 1991 is complied with.
In 2009, reconciliations have been made to ensure that the expenditure allocation which is subject to VAT matches to the VAT paid.

 Department of Indigenous Affairs Ministry of Provincial Development, Indigenous & Multi-Ethnic Affairs Section 05: Page 9 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ We have noted the figures highlighted.

There were months when we calculated a negative VAT return which was not taken into account.
This could result in the variances identified by Audit.

IRD has confirmed to give us a cheque due to the negative return calculated in previous months.

Secondly, whilst preparing the payment to IRD, the allocations used are not only the VAT allocations but there were various allocations used up as well such as IFLC, NLC Project, and Scholarship.

Though they are VAT exempted but the understanding is that the vat will not be reflected in Seg 13 thus the variances.
I wish to also highlight here that more time is needed to try and look back and reconcile the differences.

I believe this would be the only solution to this problem instead of having to have these variances every year.
5.11 FNPF Reconciliation Every employer shall pay to the Fund in respect of each of his employees, in every month during which such employee is employed by him and in the month following the termination of such employment, a contribution calculated upon the amount of wages payable to such employee by such employer for the preceding month at the appropriate rates.10 The current rate of contribution is 16 cents on each dollar earned, with the employer and employee each contributing 8 cents.11  Ministry of Provincial Development Our review of payment vouchers relating to FNPF deductions paid during the year revealed the following discrepancies:  The established staffs’ 8% contribution which was supposed to be paid out of the Trust Fund allocation was instead paid out of the FNPF account allocation.
The effect of this error is that FNPF expense would be overstated by the 8% employee contribution while at the same time the Trust Fund would be overstated by the same amount.

 Secondly, we noted that the figure on the payment vouchers did not match with the FMIS figures.

We had requested the client to provide us with an explanation and to also quantify the amount of wrong postings made during the year.

After perusing the 2007 audit file it was revealed that this anomaly was also prevalent last year.
This indicates the staffs involved in payroll as well as those in supervisory positions lacked the competency and skills to be able to detect and correct the errors.

In terms of reconciling the FNPF records, audit noted a variance of $153,191.77.

Refer to Appendix 5.3 for details.

 Department of Multi-Ethnic Affairs Audit noted a variance of $ 196,459.86 between the FNPF reconciliation.

Refer to Appendix 5.3 for details.


10 Chapter 219 – Fiji National Provident Fund – Section 13 (1) 11 http://www.fnpf.com.fj/page.asp?frmPageID=9#25 – Contribution Rate Ministry of Provincial Development, Indigenous & Multi-Ethnic Affairs Section 05: Page 10 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________  Department of Indigenous Affairs After a review of the FNPF against Salaries and Wages return, audit noted a variance of $382,141.
Refer to Appendix 5.3 for details.

The failure to prepare regular FNPF reconciliation has resulted in the differences noted.

Recommendations  The Ministry should rectify the wrong postings being made to the FNPF expense allocation and make necessary adjustments to both the FNPF and Trust Fund accounts.

 The Ministry should take necessary steps to reconcile and account for the variance noted in the FNPF reconciliation.
 The Ministry should prepare regular FNPF reconciliations so that total salaries, wages & allowances subject to FNPF are matched to the FNPF paid for a particular period.

Management Comments  Ministry of Provincial Development The wrong postings have been rectified from 2009.

 Department of Multi Ethnic Affairs The wrong postings have been rectified from 2009.

 Department of Indigenous Affairs After verification with Ministry of Finance on the posting of FNPF allocations.
We noted that monthly Gross for both Established and Unestablished staff does not tally with FNPF contribution.

1.

2.

Ministry need to liaise with Ministry of Finance on the posting of FNPF allocations.

We noted that monthly Gross for both Established and Unestablished staff does not tally with FNPF contribution deducted.

Adjustment to Total FNPF against Salaries and Wages 2008.
DEPARTMENT OF PROVINCIAL DEVELOPMENT 5.12 Issuing of Cheques - Office of the Commissioner Western Immediately after payment has been effected, the AO - Payments must stamp “paid” on all vouchers and supporting documentation to avoid any double payments.12 Details of each invoice or other source document for a payment must be promptly and accurately recorded including the name of the supplier or payee, the invoice or statement number, the local purchase order or orders it relates to and the ledger account it is charged to.13 On 23/02/09, we reviewed payment vouchers and other relating records for capital projects maintained at the Office of the Commissioner Western, which revealed that 37 cheques valued at $832,666.38 have not been issued to payees but the payment vouchers were stamped ‘paid’.
Refer to Appendix 5.1 for details.
12 S.2.10.6 Finance Manual – Ministry of Provincial Development 13 S 19.1 Finance Instruction 2005 Ministry of Provincial Development, Indigenous & Multi-Ethnic Affairs Section 05: Page 11 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ The Commissioner Western had sought approval from the Ministry of Finance for the payment of various capital projects whose amounts exceeded $30,000 without disclosing that the projects had not commenced.
The following were also noted:  Payments were processed without the project being approved.

 There were no ‘Project Profiles’ provided to audit and thus we could not establish whether tenders were called for the projects or not.

 There were no invoices attached although the payment vouchers were stamped ‘PAID’.

 The Accounts Officer was authorising the payments using the Commissioner Western’s stamp.
 No retention monies were withheld by the Commissioners Western’s office and the total project costs for each individual project were paid out in one lump sum payment.

When we enquired, the Accounts Officer explained that the cheques were not issued because the projects were incomplete and that they needed to utilise the budgeted funds allocated to them in 2008.
However, third party confirmation obtained from one of the contractors, Bhima’s Digging Works Ltd revealed that the road repairs commenced in July 2009.

However, the six cheques payable to the company for six different road upgrading projects were released during the months of May and June 2009, prior to any works being carried out.
We also established that the road upgrading projects allocated to the Divisional Engineer Roads Western also commenced during the second quarter of 2009 but cheques were disbursed to them prior to actual works commencing.

The implications of these actions is that the quality of work carried out may be compromised and not be up to required standard because the contractors had already received the money in advance.
Recommendation The Ministry should not entertain raising cheques in advance, for the projects that have yet to be approved or yet to be completed in order to utilize funds before year end.

The officer responsible for such actions should be disciplined.

Management Comments As mentioned in the findings, that the projects were not approved, please note that all projects undertaken are well reflected in 2008 approved RIE.

Have all the project papers intact.

All payment vouchers have invoices attached.


The cheques in question have been released to the respective outlets.

Since it was the ending of the financial year 2008, the funds were committed, thus, the cheques were raised and kept at Commissioner Western’s office, to be paid on the completion of project.

We were also mindful of Government’s commitment towards socio- economic development needs of the community which had to be addressed in a timely manner.
5.13 Arrears of Revenue – Office of the Commissioner Western Accounts which are overdue must be promptly followed up in accordance with the debt recovery procedures in the Finance Manual14.

The Credit Officer must promptly follow up accounts that fall due.
If recovery is unsuccessful after one month, the following actions shall be taken: 14 Finance Instruction 48 Ministry of Provincial Development, Indigenous & Multi-Ethnic Affairs Section 05: Page 12 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ i) a demand notice for payment shall be sent to the debtor after his/her debt has been overdue for more than one month; ii) If the account still remains unpaid after the first demand notice was issued, a final notice shall be issued demanding payment within fourteen days.15 Audit noted that a significant amount of revenue is in arrears with the Office of the Commissioner Western, of which 52% is over two years.
The details are shown in table 5.4.

Table 5.4: Arrears of Revenue - 2008 Duration Amount ($) 6 Months 9 Months 1 Year and Over 2 - 5 Years Over 5 Years Total Arrears 22.00 16,014.25 56,258.25 70,141.40 7,253.80 $149,689.70 The arrears of revenue listing at the Ministry’s headquarters were not submitted during the audit as the reconciliation was not completed.
The high amount of arrears of revenue indicated poor debt collection policies and that measures implemented by the Ministry to aid recovery needs to be improved or enhanced.

Recommendations  The Ministry’s debt recovery procedures should be reviewed to ensure that arrears of revenue are reduced.
 The Ministry should review its arrears of revenue listing and consider requesting the Ministry of Finance to write off debts which are deemed irrecoverable especially in cases where the debtors have migrated or deceased.

Management Comments The division is already working closely with the respective District Officers and Provincial Administrators together with the licensees for the recovery of debt, and also if the business is closed or ceased operation requesting for write-offs.
5.14 Incomplete Projects - Western Division All capital project funds disbursed to the Principal Administrators becomes their responsibility and they need to supervise its implementation and also account for the funds utilised16 Audit noted after site visit/physical inspection, that the following projects which commenced in 2005 are still incomplete although funds were provided for the projects.
15 Ministry of Provincial Development Finance Manual S.9.2.1 16 Standards Operating Procedure 3.2.2(b) 14 Ministry of Provincial Development, Indigenous & Multi-Ethnic Affairs Section 05: Page 13 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Kenani Evacuation Centre The project was funded under the Village Improvement Scheme Program in 2005.

According to the Project Paper reviewed, the total cost of the project was $280,000.
The breakdown of cost is as follows: $230,000 – Community contribution [Phase 1-3 – Already completed by the community] $50,000 – Amount requested [Phase 4- Contributed by the Ministry of Provincial Development] Phase 4 which had an estimated cost $50,000, had not started due to shortage of funds, thus the community had applied for assistance with the Ministry of Provincial Development to complete the project.

The government contribution was released under DW 209/05.
According to the Expenditure Ledger as at 11/11/05, total funds already utilised from the approved $50,000 was $49,601.69.

However, during our site visit on 23/02/09, the project was still incomplete though 99% of the funds had been utilized.

Refer below for illustrations Incomplete Structure Double story level Inside the Evacuation Centre Waiyavi SDA Evacuation Centre The project is categorised under the Urban/Peri Urban Project.
The total estimated cost of the project was $31,413.08: The details of the contributions were as follows: $20,000 – Community contribution $12,000 – Amount requested (Ministry of Provincial Development) According to the submission by the Church17, only $12,000 is needed to complete the project.

However, it was noted from the project profile that $18,000 was required to complete the project and this amount was released under DW 209/05.
As per the Expenditure Ledger as at the 25/10/05, the total funds used for the project was $12,604.20.

We noted from our site visit on 27/02/09 that the project has not been completed.

Refer below for illustrations: Incomplete building from outside Interior of the building Incomplete toilet block Namoli Village Footpath Project This project is categorised under the Self-Help Provincial Project in 2005.

The estimated cost of the project was $16,000.


The details of the contributions were as follows: 17 Letter dated 27/06/05 Ministry of Provincial Development, Indigenous & Multi-Ethnic Affairs Section 05: Page 14 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ $4,000 – Community contribution $12,000 – Amount requested (Ministry of Provincial Development) The requested fund of $12,000 was released under DW 255/05.
Discussions with the former village headman Mr. Apolosi Veteke and the current village head man Mr. Joeli Lei Vidilo revealed that the materials purchased for the footpath project was diverted to the Church Building Project.

This was also confirmed during our site visit of the project at Namoli Village on 27/02/09.

Vanuakula Flush Toilet Project The estimated cost of the project was $8,672.16.
It was noted during the site visit on 25/02/09 that not all the flush toilet has been completed and according to the village head man, not all the materials have been supplied.

The above cases reflect the laxity of the respective District Officers in properly monitoring the progress of the project from the beginning to completion.

Substantial amount of public funds have been utilised for projects that have remained idle for a number of years.
There is a high risk of materials purchased for the projects being used for personal purpose if it is not properly monitored.

Recommendations  Due to the substantial amount of public funds utilised for the various capital projects under the Ministry, it is imperative that the progress of the projects are closely monitored to ensure that they are satisfactorily completed and that value for money is obtained.
 Divisional Commissioners, District Officers and Provincial Administrators should be disciplined if they fail to carry out their responsibilities diligently.

Management Comments These were 2005 projects which were handled by the then Commissioner Western, Ratu Isoa Tikoca and Actg District Officer Samuela Delai who is now with Presidents Office.

The current staffs are not in a position to answer queries on the issue.
5.15 Motor Vehicle Accidents – Western Division In the event of an accident involving a government vehicle, the driver must immediately report the accident to the police and inform his seniors.18The officer in charge will submit the original accident report to the Deputy Permanent Secretary and a copy to his Divisional HQ and in Headquarters the Manager Administration will submit original accident report to Deputy Permanent Secretary.19 Three of the Ministry’s vehicles at the Office of the Commissioner Western were involved in accidents of which only one was reported.
Vehicle GN455 assigned to the Commissioner Western was involved in an accident on 31/12/07.

The cost of repairing the vehicle amounted to $2,000.

According to information provided during the audit, the other party to the accident was at fault and that the cost cannot be recovered as the driver has migrates overseas.
18 Ministry of Provisional Development Finance Manual S.12.6.1 19 Ministry of Provisional Development Finance Manual S.12.6.7 Ministry of Provincial Development, Indigenous & Multi-Ethnic Affairs Section 05: Page 15 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Vehicle GM956 allocated to the Commissioner Western was also one of the vehicles involved in an accident but only a memo could be located regarding the matter.
This vehicle was repaired but it was noted that the vehicle was parked at the Commissioner Western’s car park and was not being used.

Upon further enquiries made after the audit conduct, we were advised that this particular vehicle had been reassigned to the District Office in Nadi.

Vehicle GN482 was involved in an accident on 25/11/08 whilst driven by Mr. Taniela Vocevoce, the Provincial Administrator Ba.
As of the date of audit20, the vehicle accident report has not been prepared and submitted to the Ministry of Finance as required.

The vehicle has been parked outside the Office of the Commissioner Western since the accident.

Refer below for illustrations: GN 482 (photos taken on 27/02/09) Also parked outside the Office of the Commissioner Western was vehicle GL389 which was involved in an accident in 2007 and had been subsequently repaired.
According to the staffs whom we interviewed, the Ministry is writing off the vehicle because it is no longer in working condition.

The above incidences indicate that the Ministry has poor control over the use of motor vehicles especially where accidents have occurred.

Recommendations  All mandatory reports relating to accident vehicles should be promptly submitted to Headquarter so that the matters are subsequently referred to the Ministry of Finance for their decision.
 The Transport Officer should be diligent in his duties and urgently follow up the accident reports with those involved.

Management Comments GM956 This is the official vehicle for DO Nadi which was involved in an accident in 23/01/08 and was brought to Lautoka to be repaired by PWD.

After repairing it was brought back to the Commissioner Western office before taken by the Assistant District Officer Nadi.
GN482 The accident report was finally sent to HQ on 22.04.09 after receiving the Police report on 16/03/09.

GL389 This vehicle is parked in the compound of Commissioner Western’s office as it beyond repair due to wear and tear considering the condition of roads it has had to travel in.
Please note that this vehicle is more than 20 years old 20 Date of audit: 23/2/08 Ministry of Provincial Development, Indigenous & Multi-Ethnic Affairs Section 05: Page 16 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ DEPARTMENT OF MULTI-ETHNIC AFFAIRS 5.16 Analysis of Fuel Usage Vehicles must only be used for official purposes.
Government vehicles must be used and maintained so as to maximise their useful life.21 As a result of over-expenditure incurred for fuel & oil, we carried out an analysis comparing the fuel consumption patterns for two different drivers employed in the Department and noted vast differences in the consumption of fuel.

An important point worth mentioning is that for every litre of fuel, the incumbent driver travelled an average of 8km compared to the distance of 14 to 20 km travelled by the relieving driver.
This is an indication that fuel could have been misused by the incumbent driver.

A comparison of the relieving driver’s record with the incumbent driver is tabulated below: INCUMBENT DRIVER - GANGA RAM Month Jul-08 Oct-08 Nov-08 No.
of Refills 9 10 7 Liters 507 544 465 Total Km (Mileage) Total Km/ Liters 3,948 7.78 km per liter of fuel 4,134 7.60 km per liter of fuel 3,150 6.77 km per liter of fuel Liters/KM 0.12 liter per KM 0.13 liter per KM 0.15 liter per KM Average liters consumed 1516 11,232 7.4 km per liter of fuel 0.13 liter per KM Average fuel price per kilometre travelled amounts to 0.13 litres.

Month Jan-09 Feb-09 RELIEVING DRIVER – MANUVA MATAIRAVULA No.
of Refills Liters Total Km (Mileage) Total Km/ liter 3,376 13.89 km per liter of fuel 2,787 20.19 km per liter of fuel Liters/KM 0.07 liter per KM 0.05 liter per KM Average liters consumed 6,163 17.04 km per liter of fuel 0.06 liter per KM 4 2 243 138 381 The following anomalies were noted:  For every kilometre travelled the incumbent driver used 0.13 litres (average) while the relieving driver needed only 0.06 litres.
 Therefore the incumbent driver was using an extra 0.07 litres per kilometre travelled.

 If the unit price of fuel is $2.00 per litre then in monetary terms, if both drivers were to travel 10,000 kilometres we can deduce that the incumbent driver would be spending an extra $1,400.00 ($2/litre x 0.07 litres x 10,000).

The Transport officer had also commented that she had seen a vast reduction in the frequency of refuelling when the relieving driver assumed the position.
Recommendations  The utilization of government vehicle by drivers should be closely monitored by the Transport Officer.

21 Finance Instructions 60(2) Ministry of Provincial Development, Indigenous & Multi-Ethnic Affairs Section 05: Page 17 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________  Explanations should be provided by Driver Ganga Ram for excessive fuel consumption as compared to the relieving Driver.
Management Comments The Department was already in the process to discipline the incumbent driver mentioned in here as the Department has already identified the discrepancies in fuel usage, hence the Department informed the driver to take all his leave from 5th January 09.

Consequently the driver has been suspended without pay with effect from 8th May 09.
DEPARTMENT OF INDIGENOUS AFFAIRS 5.17 Inspection of Multi-Year Projects For multi-year projects, the Accounts Officer shall inspect project sites at least once a year.

The Accounts Officer shall check that: records are being properly kept; i) ii) information in the acquittal report corresponds to records kept by the recipient; iii) the progress of the project is satisfactory.
The Accounts Officer shall prepare an inspection report on each project inspected and submit it through Senior Accounts Officer to Manager Corporate Services22.

Audit noted that inspections of records for multi-year projects were not carried out by the Accounts Officer in 2008.
The multi-year projects are as follows: Project World Heritage Listing Development Assistance Scheme Survey – Land, Fishing & Village Boundaries Amount [$] 300,000 1,400,000 100,000 The risk of grants being utilised for other purposes increases if regular inspections are not carried out to confirm whether the deployed funds were used in the manner it was intended.
Recommendation The Accounts Officer should visit the project sites and inspect records to ensure the accuracy of the acquittals provided to the Department.

Management Comments Native Lands Commission’s response The Commission agreed with the recommendation for inspection by Accounts as a means of control and monitoring tool to keep us on track.

We appreciate and will see its implementation in impending years.
Accounts Section’s response The Accounts Officer is already full with responsibilities that we feel at times too numerous for the officer to complete in the estimated timeframe.

If the Accounts Officer has to go out for inspections, office work will suffer and will fall behind, especially the reconciliation of accounts.
22 Finance Manual 3.3-3.5 Ministry of Provincial Development, Indigenous & Multi-Ethnic Affairs Section 05: Page 18 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Appendix 5.1: Issuing of Cheques Date Chq No.
Particulars Amount ($) 30/12/08 29/12/08 30/12/08 15/12/08 39/12/08 16/12/08 18/12/08 30/12/08 30/12/08 24/12/08 19/12/08 30/12/08 30/12/08 19/12/08 30/12/08 30/12/08 30/12/08 30/12/08 01/12/08 01/12/08 02/12/08 02/12/08 02/12/08 02/01/08 02/12/08 02/12/08 02/12/08 03/12/08 04/12/08 05/12/08 08/12/08 08/12/08 08/12/08 08/12/08 08/12/08 08/12/08 08/12/08 08/12/08 TOTAL 5050 Ali Amzad Transport & Sons 5052 Bhimas Digging Works Limited 5013 Bhimas Digging Works Limited 4921 Bhimas Digging Works Limited 5013 Bhimas Digging Works Limited 4942 Bhimas Digging Works Limited 4965 Bhimas Digging Works Limited 4915 Bhimas Digging Works Limited 5056 Nadro Hardware Supplies Limited 5011 Nadro Hardware Supplies Limited 4975 Nadro Hardware Supplies Limited 5064 Western Drilling Company Limited 5065 Rainbow Electric Limited 4978 R.C.Manubhai 5053 Haroons Hardware 5061 Patels Hardware Limited 5062 Patels Hardware Limited 5063 Divisional Engineer Roads West 4788 Divisional Engineer Roads West 4796 Divisional Engineer Roads West 4821 Divisional Engineer Roads West 4830 Divisional Engineer Roads West 4831 Divisional Engineer Roads West 4832 Divisional Engineer Roads West 4833 Divisional Engineer Roads West 4834 Divisional Engineer Roads West 4840 Divisional Engineer Roads West 4842 Divisional Engineer Roads West 4844 Divisional Engineer Roads West 4847 Divisional Engineer Roads West 4856 Divisional Engineer Roads West 4861 Divisional Engineer Roads West 4863 Divisional Engineer Roads West 4864 Divisional Engineer Roads West 4865
 Divisional Engineer Roads West 4866 Divisional Engineer Roads West 4867 Divisional Engineer Roads West 4888 Divisional Engineer Roads West 51,258.00
34,225.00 19,250.00 30,000.00 26,000.00 51,258.00 832,666.38 Ministry of Provincial Development, Indigenous & Multi-Ethnic Affairs Section 05: Page 19 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Appendix 5.2: VAT Reconciliation  Department of Provincial Development Variance between the taxable supplies as per VAT Return and the total income/expenditure as per the Statement of Receipts and Expenditure Total Income/Expenditure as per Expenditure Statement Less Expenditure Not Subject to VAT- Seg 1, 2 & 10 $16,061,199 $13,541,843 $ 2,519,356 Less: Total taxable supplies as per Vat returns $ 2,617,555 Variance $ 98,199 Variance between actual VAT payments for 2008 and the balances disclosed in the general ledger (FMIS): VAT Payments (VAT payment to FIRCA and VAT Input As Per Statement of Financial operation) $253,718 VAT Payments (VAT payment to FIRCA and VAT Input As Per VAT returns for the year) $405,769 Variance $152,051  Department of Multi Ethnic Affairs Variance between the taxable supplies as per VAT Return and the total income/expenditure as per the Statement of Receipts and Expenditure Total Income/Expenditure as per Expenditure Statement $6,616,951 Less Expenditure Not Subject to VAT- Seg 1, 2, 6 & 10 $6,326,168 $ 290,783 Less: Total taxable supplies as per Vat returns $ 284,513 Variance $ 6,270 Variance between actual VAT payments for 2008 and the balances disclosed in the general ledger (FMIS): As Per Statement of Financial operation) $ 42,839
 VAT Payments (VAT payment to FIRCA and VAT Input As Per VAT returns for the year) $ 46,078 Ministry of Provincial Development, Indigenous & Multi-Ethnic Affairs Section 05: Page 20 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Variance ($ 3,239)  Department of Indigenous Affairs Variance between the taxable supplies as per VAT Return and the total income/expenditure as per the Statement of Receipts and Expenditure Total Income/Expenditure as per
 Expenditure Statement Less Expenditure Not Subject to VAT- Seg 1, 2, 6 & 10 $22,625,238 $21,189,663 $ 1,435,575 Less: Total taxable supplies as per Vat returns $ 2,130,474 Variance ($333,678) Variance between actual VAT payments for 2008 and the balances disclosed in the general ledger (FMIS): VAT Payments (VAT payment to FIRCA and VAT Input As Per Statement of Financial operation) VAT Payments (VAT payment to FIRCA and VAT Input As Per VAT returns for the year) $ 189,440 $ 193,203 Variance ($3,763) Appendix 5.3: FNPF Reconciliation  Department of Provincial Development a) Total FNPF Against Salaries/Wages 2008 FNPF as per Financial Statement: Add FNPF Paid Not Entered into FMIS FNPF For 2008 Gross Pay Subject to FNPF ($315,757.27 divide by 0.08) b) Salaries/ Wages for 2008 Subject to FNPF Salaries, Wages & Allowances as per Financial Statement Less Salaries & Wages not subject to FNPF ***** Salaries, Wages and Allowance for 2008 subject to FNPF 306,800.87 8,956.40 315,757.27 3,946,965.88 3,793,774.11 - 3,793,774.11 c)Difference {(a) – (b)} 153,191.77 Ministry of Provincial Development, Indigenous & Multi-Ethnic Affairs Section 05: Page 21 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________  Department of Multi-Ethnic Affairs FNPF as per Financial Statement: Add FNPF in SEG 6 & 10 Add December 08 FNPF Paid Jan 09 FNPF Paid Not Entered into FMIS Less December 07 FNPF Paid in Jan 08 FNPF For 2008 Gross Pay Subject to
 FNPF ($52,293.69 divide by 0.08) b) Salaries/ Wages for 2008 Subject to FNPF Salaries, Wages & Allowances as per Financial Statement Less Salaries & Wages not subject to FNPF ***** Salaries, Wages and Allowance for 2008 subject to FNPF Difference  Department of Indigenous Affairs 39,171.81 6,785.16 45,956.97 9,031.20 5,096.08 14,127.28 45,956.97 14,127.28 60,084.25 7,790.56 52,293.69 653,671.13 457,211.27 0 457,211.27 196,459.86 (a) Total FNPF against Salary & Wages for 2008 FNPF as per Financial
 Statement 109,667 Less: December 2007 FNPF 15,205 Add: December 2008 FNPF 11,328 FNPF for 2008 105,790 Gross Pay subject to FNPF(109,667/0.08) 1,322,375 (b) Salaries and wages for 2008 subject to FNPF 1,704,516 Salaries, Wages & Allowance subject to FNPF 1,704,516 (c) Difference $ 382,141 Ministry of Provincial Development, Indigenous & Multi-Ethnic Affairs Section 05: Page 22 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Section 6 Ministry of Defence, National Security & Immigration Role and Responsibilities The Department of Home Affairs formulating and implementing policies in respect of defence, security and intelligence, law and order and immigration and the strategic coordination of Government’s response to national crisis and emergency situations.
is responsible for The Department of Immigration is responsible for the administration of immigration functions throughout the country.

This includes the formulation and implementation of policies relating to visitor permits; work permits; investments; passports & citizenship.

Maintaining services at the various ports of entry.
Table of Content 6.5 6.6 6.7 6.8 6.1 6.2 6.3 6.4 CONSOLIDATED FINANCIAL STATEMENT .......................................................................................... 1 Audit Opinion .................................................................................................................. 1 Statement of Receipts and Expenditures....................................................................... 2 Statement of Output Costs ............................................................................................. 3 Appropriation Statement ................................................................................................ 3 AUDIT FINDINGS .................................................................................................................................... 4 VAT Reconciliation ......................................................................................................... 4 FNPF Reconciliation ...................................................................................................... 4 Drawings Account Reconciliation ................................................................................... 5 Trust Fund Account Reconciliation ................................................................................ 6 DEPARTMENT OF IMMIGRATION ......................................................................................................... 7 Unclaimed Bond Refunds .............................................................................................. 7 6.9 6.10 Overseas Travel ............................................................................................................. 8 6.11 Service Rendered Without a Written Agreement ........................................................... 8 6.12 Non Removal of Illegal Immigrants ................................................................................ 9 6.13 Follow Up - Damaged Passports ................................................................................. 10 Appendix 6.1: Statement of Output Costs................................................................................. 12 Appendix 6.2: FNPF Reconciliation ......................................................................................... 13 Appendix 6.3: Engagement of Leah’s Apartments as Detention Centre ................................. 14 CONSOLIDATED FINANCIAL STATEMENT 6.1 Audit Opinion The audit of the 2008 accounts of Ministry of Defence, National Security & Immigration resulted in the issue of a qualified audit report.
The accounts were qualified for the following reasons: Ministry of Defence, National Security & Immigration Section 06: Page 1 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ 1.

The amounts in the Statements of Output Costs have been estimated as the facility to allow the measurement and accounting of these costs has yet to be integrated in the Financial Management Information System (FMIS) of government.
It is not possible therefore to determine the accuracy of the expenditures incurred by the Ministry under each output.

2.

The Ministry has not provided the following contrary to Finance Instructions 82(1): a.

Statement of Losses; and b.

Trust Fund Account Statement of Receipts and Payment.
The Financial Information System shows that, as at 31/12/08, the Department of Defence & National Security has trust funds totalling $88,477 while the Immigration Department has two trust funds totalling $36,008 and $10,302,888 respectively.

3.

The Ministry failed to submit VAT returns for 2008.

Significant variances were noted in the FNPF reconciliation totalling $109,714 for the Department of Defence and National Security and $185,688 for the Department of Immigration.
6.2 Statement of Receipts and Expenditures The Ministry collected revenue totalling $7,889,483 and incurred a total expenditure of $3,821,387 in 2008.

Refer to Table 6.1 for details.
Table 6.1: Statement of Receipts and Expenditures for 2008 Description RECEIPTS State Revenue Operating Revenue Total State Revenue Agency Revenue Miscellaneous Revenue Total Agency Revenue 2008 $ 2007 $ 7,886,726 7,886,726 7,167,334 7,167,334 2,757 2,757 1,393 1,393 TOTAL REVENUE 7,889,483 7,168,727 EXPENDITURE Operating Established Staff Unestablished Staff Travel and Communication Maintenance and Operations Purchase Services Operating Grants and Transfers Special Expenditures Total Operating Expenditure of Goods and Capital Expenditure Construction Purchases 2,275,635 245,604 169,128 233,982 551,775 26,285 146,790 3,649,199 1,973,037 249,114 207,925 173,488 643,678 8,724 170,630 3,426,596 - - - - Ministry of Defence, National Security & Immigration Section 06: Page 2 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Description 2008 $ 2007 $ Total Capital Expenditure - - Value Added Tax 172,188 319,603 TOTAL EXPENDITURE 3,821,387 3,746,199 There was an increase of revenue by $720,756 or 10% in 2008 when compared to 2007 due to the increase in demand for passports, work permits and introduction of the dual Permanent Residency applications.
There was a net increase in expenditure in 2008 by $75,188 or 2% when compared to 2007 as a result of increases in the Established Staff by $302,598 or 15%, Maintenance and Operation by $60,494 or 35% and Operating Grants and Transfer by $17,561 or 201%.

6.3 Statement of Output Costs The Statement of Output Costs consolidates the 5 outputs prescribed in the Budget Estimates.

These are detailed in Appendix 6.1.


6.4 Appropriation Statement The Ministry incurred expenditures totalling $3,821,387 in 2008 against the budget of $5,318,600 resulting in a savings of $1,497,213 or 28%.

Details of expenditures against the budget estimates are provided in Table 6.2.
Table 6.2: Appropriation Statement for 2008 SEG Item Established Staff Unestablished Staff Travel & Communication Maintenance & Operations Purchase of Goods & Services Operating Grants & Transfer Special Expenditure Total Operating Costs Capital Expenditure Construction Purchases Total Capital Expenditure Budget Estimate $ 3,365,500 247,400 188,000 195,700 546,800 29,200 560,000 5,132,600 Changes (Note 3) $ (215,000) - 3,000 79,000 133,000 - - - Revised Estimate $ 3,150,500 247,400 191,000 274,700 679,800 29,200 560,000 5,132,600 Actual Expenditure $ 2,275,635 245,604 169,128 233,982 551,775 26,285 146,790 3,649,199 - - - - - - - - - - - - - - 186,000 172,188 5,318,600 3,821,387 Carry– Over $ - - - - - - - - - - - - Lapsed Appropriation $ 874,865 1,796 21,872 40,718 128,025 2,915 413,210 1,483,401 - - - 13,812 1,497,213 13 Value Added Tax 186,000 TOTAL EXPENDITURE 5,318,600 Ministry of Defence, National Security & Immigration Section 06: Page 3 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ The Ministry of Finance approved the transfer of funds totalling $215,000 within the Ministry’s budget during the year.
AUDIT FINDINGS 6.5 VAT Reconciliation Subject to the provision of the Vat Decree 1991, the tax shall be charged in accordance with the provisions of this Decree at the rate of twelve and a half percent on the supply (but not including an exempt supply) in Fiji of goods and services, by a registered person in the course or furtherance of a taxable activity carried on by that person, by reference to the value of that supply.1  Department of Defence & National Security Audit noted that the Department failed to maintain a copy of Value Added Tax return form after making VAT payment.
This has made it difficult for audit to determine output amount, which is very important in reconciling VAT.

 Department of Immigration The Department failed to provide the VAT returns for 2008.

Only the VAT returns for six months were available, therefore VAT reconciliation could not be prepared.

As a result, audit could not substantiate the VAT reconciliation.
Recommendation The Ministry should ensure that all VAT records are made available to audit and the officer responsible for the maintenance of records should reconcile VAT payments with the records.

Management Comments Agreed, we are working to reconcile the Vat return and will improve the reconciliation on vat return for year 2009.
6.6 FNPF Reconciliation Every employer shall pay to the Fund in respect of each of his employees, in every month during which such employee by him and in the month following the termination of such employment, a contribution calculated upon the amount of wages payable to such employee by such employer for the preceding month at the appropriate rates.2  Department of Defence & National Security A reconciliation of FNPF contributions against salaries and wages reported in the financial statements for the Departments revealed significant variances.
Refer Appendix 6.2 for details.
1 Value Added Tax Decree 1991 4th edition revised to 30/04/04 – section 15 (1) 2 Chapter 219 – Fiji National Provident Fund – Section 13 (1) Ministry of Defence, National Security & Immigration Section 06: Page 4 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________  Department of Immigration A reconciliation of FNPF contributions against salaries and wages reported in the financial statements for the Departments revealed significant variances.
Refer Appendix 6.2 for details.

Recommendation The Department should review its FNPF records and reconciliations and provide explanations for the variances.

Management Comments Agreed, we are working to established on the findings of the audit report, however we have placed controls and measures to improve for year 2009 on our reconciliation.

6.7 Drawings Account Reconciliation All bank accounts shall 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  Department of Defence & National Security Audit noted that for the year 2008, no drawings account reconciliation was prepared by the Department.

The last drawings reconciliation was prepared in October 2006.
 Department of Immigration Audit review of the drawings reconciliation made by the Department revealed the following discrepancies:  The opening balances for several months did not tie up with the closing balances of the preceding months.

 The Department failed to provide any reasons for the variance of $48,758 between the Department’s figures against the Financial Management Information System’s figure.

 No board of survey was conducted for the unpresented cheques as at 31/12/08.
 Furthermore, the drawings reconciliation for Bond account was not carried out in 2008.

It had a balance of $10,360,190 as at 31/12/08.

Failure to prepare proper reconciliations may result in accumulation of stale cheques and tie up the funds in the Ministry.

Recommendations  The Accounts Officer should ensure that monthly reconciliations are carried out in a timely manner.
 Supervisory checks on monthly reconciliations should be improved to ensure the accuracy of the balances reflected in the reconciliations.

Management Comments 3 (Finance Instructions 2005 s39(5)) Ministry of Defence, National Security & Immigration Section 06: Page 5 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Agreed, on all of the above bullet points.
Due to the resignation of the Accounts officer on medical grounds in 2008 the reconciliation was not carried out till late in the year.

We had improved on the reconciliation till April 2009 and are working backwards to reconcile and journalise to match the GL figures.

We had finished up to December 2008 and had handed the Board of Survey on drawings account to MOF.

6.8 Trust Fund Account Reconciliation The Trust Fund Account should not be overdrawn4.
Within 5 days after the end of each month, the trust officer shall prepare a trust reconciliation to reconcile trust account balances to the ledger total and the trust bank account.

 Department of Defence & National Security The Department maintained 24 operating trust fund accounts.

Audit noted that the trust fund reconciliation for 23 of these accounts were not prepared.

Twelve trust fund accounts were also overdrawn resulting in debit balances.
Refer table 6.3 for details: Table 6.3: Overdrawn Trust Fund Accounts Description Account 10610106101861104 Rent H/A Unestablished Staff 10610106101861202 CMLA 10610106101861204 LICI 10610106101861206 Marsh & McLennan 10610106101861209 Marsh & McLennan 10610106101861306 Housing Authority 10610106101861307 Home Finance Co 10610106101861532 Public Employees Union 10610106101861599 Others 10610106101861602 Maintenance – Nausori 10610106101861699 Maintenance – Other 10610106101861910 Sundries Balance ($) 93.00 103.59 66.03 40.11 15.77 405.00 65.00 206.50 52.03 15.00 67.00 114.17 The overdrawn amounts indicate the lack of control over the trust fund accounts.
Recommendations  The Department should ensure that no trust fund account was overdrawn.

 The Department should ensure that the Trust Fund Account reconciliations are prepared on a monthly basis, verified and reconciled with the records from the Financial Management Information System.

Management Comments We have looked through matter due to the shortage of staff, now we have improved and taken up measures in order to reconcile on time since we have increased our staffing.
4 Office of the Auditor General Trust Fund Guide (5) Ministry of Defence, National Security & Immigration Section 06: Page 6 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ DEPARTMENT OF IMMIGRATION 6.9 Unclaimed Bond Refunds Trust money is the money that the agency is holding in trust.
It is to be kept in a separate bank account and accounted for separately from “public money” and “other money”.5 Immigration bonds are held in the trust account for all non Fiji citizens.

These bonds are refunded when the applicants leave the country or used for their deportation when they breach their permits.

Audit noted that substantial sum of funds received by the Department as bond have yet to be refunded to the international workers or their agents who have departed from Fiji.
A total of $2,049,514 has not been refunded from January 1989 to December 2000.

Refer table 6.4 for details: Table 6.4: Bond Money Yet to be Refunded Year Amount to be Refunded ($) 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Total 48,705 14,357 43,524 79,070 80,833 77,800 115,034 127,970 221,531 267,079 459,219 514,392 2,049,514 Failure of the Department to take action and inform the international workers and agents accordingly has resulted in substantial unclaimed refunds.
Given the timeframe as tabulated above, it may become difficult to trace the bond holders as some of them have already left the country.

Recommendations  The Department should make necessary arrangements to inform the public to collect the  pending bond refunds.

It is also recommended that bonds not claimed for long period of time be transferred to consolidated revenue account.

Management Comments The immigration Department refunds bonds to permit holders once they request.
There are permit holders who are still being employed by the companies and these bonds act as their security for not breaching the terms and condition for employment, however we are now updating all bonds files to know whereabouts of the permit holder if they are still in the country or became citizenship or had left the country.
5 Finance Manual 2005, Section 15: Trust Fund Introduction Ministry of Defence, National Security & Immigration Section 06: Page 7 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ 6.10 Overseas Travel All officers wishing to leave Fiji for reasons other than official duties are required to obtain written approval of the Secretary for the Public Service Commission (PSC).6 Immigration Officers based at the Nadi Office were noted to have made unauthorized travel overseas without seeking prior approval or release letters from the Public Service Commission.
Refer table 6.5 for details.

Table 6.5: Immigration Officers Travelling Overseas without PSC Approval Name EDP No.

Josateki Toga 49635 Unauthorized travel 4 Josua Mucunabitu Naibuka Vuli 19505 41693 9 12 Remarks Only 2 official PSC approval letters to spend leave abroad were sighted.

No official PSC approval letters to spend leave abroad was sighted.

Only 1 official PSC approval letters to spend leave abroad were sighted.
The above officers have breached the General Order by not obtaining approval from the Public Service Commission before travelling overseas.

Recommendations  Appropriate disciplinary action should be instigated against the officers who have violated the General Order.

 The Department should ensure that prior approval is obtained from PSC before officers’ travel abroad.

Management Comments All officers are granted approval by PSC, prior to commencing on overseas leave.
However, regarding the three (3) officers mentioned namely Josateki Toga, Josua Mucunabitu and Naibuka Vuli, we are not able to explain their leave status because their files were taken from the office by FICAC.

These officers are on suspension.

6.11 Service Rendered Without a Written Agreement A written contract or agreement must be entered into with the approved tenderer for the supply of the goods, services or works tendered.
Legal advice must be sought on the draft contact or agreement unless the Director approves otherwise in writing.7 An employee must disclose, and take reasonable steps to avoid, any conflict of interest (real or apparent) in connection with employment in the public service.8 An employee must not make improper use of official information or of the employee’s duties, status, power or authority in order to gain or seek to gain, a benefit or advantage for the employee or for anyone else.9 The Department rendered the services of Leah’s Apartments for detaining deportees without a written contract or agreement.
Furthermore, anomalies were noted during the audit conduct as follows: 6 General Orders 729(a) 7 Department of Immigration Finance Manual 2005, Clause 2.4.16 8 Public Service Act, Section 6 9 Public Service Act 1999, Section 10.

Ministry of Defence, National Security & Immigration Section 06: Page 8 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________  No expression of interest on the tender of establishing a deportation centre was called by the Department.
 A conflict of interest was suspected as Silipa Vuli, the owner of Leah’s Apartments was the spouse of Mr. Naibuka Vuli; Acting Senior Immigration Officer – Nadi Office.

 No written approvals were sighted authorizing the owner’s of the apartment to accommodate detainees.

 A company search at Registrar of Companies Office verified that Leah’s Apartments was unregistered.

Appendix 1 provides details on the detainees from 2008 to early 2009.
According to the Financial Management Information System, the Department has paid Leah’s Apartments $8,160 in accommodation expenses for the deportees in 2008.

Proper tender procedures were not complied when the Department engaged Leah’s Apartment as the detention centre for illegal immigrants.

Recommendations  The Department should establish a detention centre in confirmation with the Public Service Commission.
 The Department should provide justifications as to why Leah’s Apartment was used as detention centre without any approval.

 Mr. Naibuka Vuli should be cautioned for not disclosing his intentions and business dealings leading to an apparent conflict of interest.

Managements Comment The Agreement is now ceased as the issue is before the courts.
6.12 Non Removal of Illegal Immigrants The Permanent Secretary may make a written order directing a prohibited immigrant to leave and remain out of the Fiji Islands either indefinitely or for a period specified in the order.10 An order made under this section must be carried into effect in such manner as the Permanent Secretary directs in writing, including removal of the person by use of reasonable force if necessary.11 Audit noted that the Department lacked manpower to expedite the removal of over stayers in the country.
Refer table 6.6 for examples.

Table 6.6: Over stayers Name Nalini B. Kapadia Date of Birth Nationality 31/03/37 Indian Wang Jing 22/06/79 Chinese Dong Jia Zhong 17/12/68 Chinese 10 Immigration Act 2003, Section 15(1) 11 Immigration Act 2003, Section 15(3)  Detention Warrant & Removal Order Ministry of Defence, National Security & Immigration Status Subject is still in the country despite her appeal being rejected by the minister on 01/07/03.

The subject’s student visa had expired on 10/01/07.
DW & RO has been prepared but he cannot be found.

Subject is overstaying since 30/08/99.

Department is still looking for him.
Section 06: Page 9 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Name Jeffery U. Orji Date of Birth Nationality 17/11/79 Nigerian Faaletaua Faatu 25/09/75 Samoan Baek Yung Joo 01/03/61 Korean Wang Min Lambert R. Lyndon 17/10/63 24/05/51 Chinese Australian Leong X Wei 10/12/80 Chinese Ye Wenpan 22/10/76 Chinese Nau S. Kitekeiaho 30/10/69 Tongan Lota Alick 13/01/79 Solomon Islander Chen Xiumei 13/12/70 Chinese Status Visitors permit expired on 05/02/04.
Subject is staying illegally in the country.

Subject overstaying since 06/06/99.

DW & RO prepared and issued on 26/10/04.

Subject has been overstaying since 04/01/02.

DW issued on 26/10/04.

Subject has been overstaying since 22/03/05.

Subject overstaying since 30/02/99.

RO & DW issued on 31/01/06 i.e.

7 years after the date of expiry of permit.

Visitor permit had expired on 14/09/04.

Subject unlawfully residing in Fiji.

Work permit expired on 22/09/05.

Since then is unlawfully residing in Fiji.


Subject arrived in the country on 30/07/05 and now he is overstaying in the country.

He has been changing his name in order to enter Fiji.

Visitor permit expired since 04/01/03.

Subject has overstayed in the country.

Subject arrived on 04/11/05 and her permit has expired hence overstaying in the country.

is Audit review noted that there are currently 603212 immigrants residing unlawfully in the country.
Given the number of illegal immigrants in Fiji, there was a need to empower the Department with the required resources to avoid the possibility of unscrupulous people manipulating and exploiting the system to their benefit.

Recommendation The effort made by the Department to identify and promptly remove illegal immigrants should be improved.
Management Comments We agree that there are some long outstanding cases of illegal immigrants still to be removed with the Department and we are trying to deal with these cases as soon as we can.
6.13 Follow Up - Damaged Passports Passport is a current valid travel document which is issued by or on behalf of the Government of any country, containing a photograph and a personal description of the holder which purport to establish the identity and nationality or citizenship of the holder, or which gives a right of re-entry to that country.13 The Passport Officer shall, upon application made to him in the appropriate form, issue to any citizen of Fiji who satisfies such conditions as may be prescribed, a passport in the appropriate form.14 Audit noted that a considerable number of passports were damaged during the processing stage incurring unwarranted costs and loss of revenue for the Department.
Refer table 6.7 for details.

12 Overstates report produced by ITC on 17/04/09.

13 Passports Act No.

17 of 1971 – Section 2 (4) 14 Return to Laws, Chapter 89, Passports Act No.

17 of 1971 – Section 3 (1) Ministry of Defence, National Security & Immigration Section 06: Page 10 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Table 6.7: Number of Damaged Passports Year 2005 2006 2007 2008 Total No.
of Damaged Passports Value of Loss in Revenue ($) 779 888 308 470 57,646 65,712 22,792 34,780 180,930 The issue was also reported and discussed in previous years audit but the Department failed to take corrective actions.

A total of 181 damaged passports out of 470 were caused by mechanical problems such as improper lamination or overheating.

Also, in 2008, the number of damaged passports has increased by 162 or 53% when compared to previous year.
Potential government revenue is lost over the years through damaged passports.

Recommendation The passport printing machine should be serviced regularly to prevent passports being damaged.

Management Comments Issue has been resolved internally by replacing the old machine with the new one.
Ministry of Defence, National Security & Immigration Section 06: Page 11 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Appendix 6.1: Statement of Output Costs General Administration Description Operating Expenditure Established staff Government Wage Earners Travel and communications Maintenance & operations Purchase of goods and services Operating grants and transfers Special Expenditures Total Operating Costs Capital Expenditure Construction Purchases Value Added Tax TOTAL COSTS Immigration Control Description Operating Expenditure Established staff Government Wage Earners Travel and communications Maintenance & operations Purchase of goods and services Special Expenditures Total Operating Costs Capital Expenditure Construction Purchases Value Added Tax TOTAL COSTS 2008 $ 2007 $ 730,954 173,523 75,732 34,653 95,170 26,285 121,827 643,648 142,046 129,647 19,887 73,346 8,724 143.216 1,258,144 1,160,514 - - - - 91,259 97,866 1,349,403 1,258,380 2008 $ 2007 $ 1,544,682 1,329,389 72,080 93,396 199,329 456,606 24,963 107,069 78,278 153,601 570,332 27,414 2,391,056 2,266,083 - - - - 80,929 221,737 2,471,985 2,487,820 Ministry of Defence, National Security & Immigration Section 06: Page 12 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Appendix 6.2: FNPF Reconciliation Department of Defence & National Security Details (a) Total FNPF against salaries and wages for 2008 FNPF as per Financial Statement Add: December
 2008 FNPF Less: December 2007 FNPF FNPF for 2008 Gross Pay subject to FNPF (63,581./0.08) (b) Salaries and Wages for 2008 subject to FNPF Salaries, wages and allowance as per financial statement Salaries, wages and allowance for 2008 subject to FNPF Variance Department of Immigration Details (a) Total FNPF against salaries and wages for 2007 FNPF as per financial statement Add: FNPF for December 2008 Payment made not entered into FMIS for 2008 Less: FNPF for December 2007 $ 52,408 11,173 - 63,581 794,763 904,477 904,477 (109,714) $ 111,756 13,539 125,295 10,809 114,486 Gross pay subject to FNPF (114,486 divided by 0.08) 1,431,075 (b) Salaries and wages for 2007 subject to FNPF: Salaries, wages and allowances as per financial Statement Less: Salaries and wages not subject to FNPF Salaries, wages and allowance for 2008 subject to FNPF Variance 2,987,182 - 2,987,182 (1,556,107) Ministry of Defence, National Security & Immigration Section 06: Page 13 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Appendix 6.3: Engagement of Leah’s Apartments as Detention Centre Date 02/01/08 Name Jianhua Wu Nationality Chinese Date of Birth Passport No.
Reason for Detention 16/07/81 G00466287 05/01/08 Tracy M. Holes New Zealander 10/03/66 EA799987 Lotatasi P. Etuati 07/01/08 Rahim Rahman 18/01/08 Fatour Hossan 18/01/08 Zahid Zaheer 28/01/08 Ikenna Jonah 06/02/08 George Ignebuike 06/02/08 Russel Chidyausiki 06/02/08 07/02/08 Chengfan Yuan 08/02/08 Majid Mohebbi Tuvaluan Bangladeshi Bangladeshi Pakistani Nigerian Nigerian Zimbabwean Chinese Iranian Heirang Wang Taola Tatum 25/02/08 29/02/08 05/03/08 Modestus Nnugo 09/03/08 Takehan Kwon 31/03/08 03/04/08 Hafei Wang Nakiat Binataaks Falaka Uea 03/04/08 03/04/08 Malosiaga Telua Douglas Penny 06/04/08 0804/08 James Reilly 12/04/08 Meahala Sioaneviene Xu Jing 21/04/08 Hu Shuli 21/04/08 21/04/08 Hu Shuying 30/04/08 Miao Furong Chinese Tuvaluan Nigerian Korean Chinese Kiribati Tuvaluan Tuvaluan Australian British Tongan Chinese Chinese Chinese Chinese 22/05/82 05/03/73 04/08/80 119/08/70 110/11/71 31//10/81 21/03/71 22/11/70 20/02/73 24/09/65 26/11/49 04/01/70 22/07/83 24/09/65 12/03/64 25/08/61 17/10/58 19/07/59 26/08/59 31/12/55 01/05/77 18/04/80 27/12/69 23/09/72 FU010769 A0975326 A035904 BF5124471 Aooo19565 A3984534 ZA600089 G14061588 - 624561484 FU015084 A4131996 GB0736838 G24561484 027659 FU015358 FU014772 L3906573 706718740 R316015 G07276210 G10351267 G1368832 G27928103 06/06/08 Satyanarayana Gogu Indian 15/05/77 F6798276 09/06/08 09/06/08 22/06/08 Ahsan Habib Sabina Sheela Crispo Trapa Bangladeshi Bangladeshi Pilipino 07/07/08 07/07/08 14/07/08 Youhwau Cha Yongjim Kim Kenneth Gijeokoh Korean Korean Nigerian
 25/01/77 12/11/79 13/08/71 02/05/58 19/08/59 21/08/72 V0754940 B0377492 VV2042 SR00594 TM09897 A2946378 16/07/08 Sten A. Stenbole Sweden 26/11/74 5209500 Shedrac Isiah 18/07/08 18/07/08 Gegun Adebayo 18/07/08 Makesi Lipun 18/07/08 George Trosi 18/07/08 Salanoa Kapu Nigerian Nigerian Tuvaluan Tuvaluan Tuvaluan 11/06/88 22/06/88 27/09/84 29/01/81 05/12/84 A32273401 A301274117 FU014881 FU015384 FU011540 entry for Canada had No entry VISA, refused entry.
Refused – Residence permit invalid.

No return ticket.

Non genuine visitor.

Non genuine visitor.

No entry VISA.

Non genuine visitor.

Non genuine visitor.

Had no Australian VISA.

No return ticket.

from New Deported Zealand, had no return ticket and Passport.

Subject was watch listed.

Expired passport.

Non genuine visitor.

VISA expired.

Subject was watch listed.

No return ticket and had insufficient funds.

Transit deportee.

Transit deportee.

Removal order.

No return ticket.


Mutilated passport.

Prohibited immigrant.

Non genuine visitor.

Non genuine visitor.

Insufficient funds accommodation.

Non genuine visitor and no return ticket.

Was watch listed.

Was watch listed.

No return ticket and had insufficient funds.

Non genuine visitor.

Non genuine visitor.

Non genuine visitor and altered passport.

Non genuine visitor and altered passport.

Non genuine visitor.

Non genuine visitor.

Was watch listed.

Was watch listed.


Was watch listed.

for  Duration of stay was not made available to audit as the detention register did not contain this information.
Ministry of Defence, National Security & Immigration Section 06: Page 14 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Name Date 20/07/08 Anthony Sagoe 20/07/08 James Ato 21/07/08 Leilani Melei 21/07/08 Melei Melei 28/07/08 Rogelio Ardienne Nationality Ghana Ghana Tuvaluan Tuvaluan Pilipino Date of Birth Passport No.
Reason for Detention 05/11/74 15/05/58 26/11/81 03/06/79 02/09/74 H1023109 H2162791 FU016671 FU018193 WW0155172 28/07/08 Rogelio Bernarto Pilipino 24/10/68 SS0931476 28/07/08 John Valviewa Pilipino 17/02/72 SS0623717 28/07/08 Cecilo Sucuano Pilipino 10/05/70 SS0623707 28/07/08 Bernie Macumpane Pilipino 17/09/74 W061854 28/07/08 Henreto Bonglawei Pilipino 24/12/68 MM0955997 28/07/08 Ernesto Villalaopa Pilipino 08/11/60 NN016978 28/07/08 Sand Valvieja Pilipino 30/01/65 QQ700564 01/08/08 Wang Guan Chinese 14/09/83 G8221802 03/09/08 Constance B. Ghana 28/10/89 H2163641 12/09/08 14/09/08 19/09/08 Babul Rana Juan Andrews Jin Zhengji Bangladeshi Spanish Chinese Buljit Singh 19/09/08 19/09/08 Mandeep Singh 19/09/08 Gurdeep Singh 19/09/08 Neeraj Kumar 19/09/08 Gurjeet Singh 24/09/08 Mohammed Yasim 24/09/08 Gulzar Indian Indian Indian Indian Indian Pakistani Pakistani O1/01/72 29/10/77 30/08/49 02/04/86 01/03/86 12/02/88 16/06/88 15/07/88 10/04/63 B0687360 BE051708 G21866682 K6924627 K7701511 K 6402575 G7519365 B5645975 BG680191 20/08/90 AG4715821 24/09/08 Mohammed Aamir Pakistani 14/02/82 AI1220431 24/09/08 Mohammed M. Pakistani 02/06/81 AN4126831 24/09/08 Mir Mustaza Pakistani 24/05/86 AH0971861 24/09/08 Mohammed Hussain Pakistani 24/02/81 BB6891231 24/09/08 Ali 24/09/08 Raqib Mirza 24/09/08 Mahmood Pakistani Pakistani Pakistani 19/05/84 CG1791331 21/10/85 AN0910161 04/0783 BX015147 24/09/08 Mohammed Imran Pakistani 26/11/74 AS1227561 24/09/08 Abdul Khan Pakistani 03/06/74 GH4105711 24/09/08 Ministry of Defence,
 National Security & Immigration Amjid Iqbal Pakistani 01/03/85 BC1337441 improper No return ticket.
No return ticket.

Transit deportee.

Transit deportee.

Deportee had insufficient funds.

Deportee had insufficient funds.

Deportee had insufficient funds.

Deportee had insufficient funds.

Deportee had insufficient funds.

Deportee had insufficient funds.

Deportee had insufficient funds.

Deportee had insufficient funds.

Deportee had documents.

Had no VISA for Australia and no return ticket Non genuine visitor.

Mutilated passport.

Arrived without pre entry VISA.

Non genuine visitor.


Non genuine visitor.

Non genuine visitor.

Non genuine visitor.

Non genuine visitor.

Arrived to study for 1 year but had 4 months ticket.

Arrived to study for 1 year but had 4 months ticket.

Arrived to study for 1 year but had 4 months ticket.

Arrived to study for 1 year but had 4 months ticket.

Arrived to study for 1 year but had 4 months ticket.

Arrived to study for 1 year but had 4 months ticket.

Arrived to study for 1 year but had 4 months ticket.
Arrived to study for 1 year Section 06: Page 15 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Date Name Nationality 24/09/08 Sujid Hussain Pakistani 24/09/08 Mohammed Zahid Pakistani 24/09/08 Shaab Ali Pakistani Zhang Chun Xiangyuan Li Zaicheng Zhang Khawaja R. Omar 10/10/08 10/10/08 10/10/08 12/10/08 15/10/08 Manjit Singh Harjant Singh 15/10/08 Raqibal Rana 29/10/08 29/10/08 Tion Rekenibai 29/10/08 Tabe Tekirei Julius Dabadab 31/10/08 Xiangqian Zhu 07/10/08 Lakhbir Singh Jona Singh Ravi Bali 12/11/08 12/11/08 12/11/08 12/11/08 Meijuan Huang 12/11/08 15/11/08 Hua Yang Oladu Omotade 15/11/08 Ogindamota 15/11/08 Ayolunde 15/11/08 Oreolowa 14/11/08 Yongbin Wu 14/11/08 Yinggui Wu Chinese Chinese Chinese Pakistani Indian Indian Bangladeshi Kiribati Kiribati PNG Chinese Indian Indian Indian Chinese Chinese Nigerian Nigerian Nigerian Nigerian Chinese Chinese 23/11/08 I-Yung Su Taiwanese 21/11/08 26/11/08 15/12/08 19/12/08 Ge Zhon Hamed Syed Barbara Dreaver Opira Dusmen Chinese Indian New Zealander Sudanese 12/01/09 01/02/09 Oluwole Jolaosho Jeyakaran Sivanesan Nigerian Canadian 02/02/09 02/02/09 02/02/09 06/02/09 Segun A. Fedinard E. Tobechukwn L. Saleman A. Nigerian Nigerian Nigerian Tasmanian 06/02/09 Lossa Bin Sef Congo 23/09/80 20/08/83 15/08/79 02/12/76 BL5170671 EE1790601 DH6398151 02/04/82 15/03/75 02/02/78 15/04/66 01/08/67 29/01/66 F8525552 F4260497 B1100007 G23849324 G28222214 A1013678 26/06/62 20/01/68 14/02/69 01/01/67 15/12/90 02/03/83 20/08/86
 03/12/84 22/12/86 15/06/79 29/11/49 G31415413 G01364194 G25626764 AM2221301 G4754485 G2962259 A0424542 032502 031894 B239516 G30573528 Date of Birth Passport No.
Reason for Detention but had 4 months ticket.

Arrived to study for 1 year but had 4 months ticket.

Arrived to study for 1 year but had 4 months ticket.

Arrived to study for 1 year but had 4 months ticket.

Non genuine visitor.

Non genuine visitor.

Non genuine visitor.

No VISA for Auckland.

Non genuine visitor.

Non genuine visitor.

Non genuine visitor.

Transit deportee.

Transit deportee.

No works permit.

Deportee was watch listed.

Non genuine visitor.

Non genuine visitor.

Non genuine visitor.


Non genuine visitor.

return VISA No Australia.

No Australia.

No Australia.

No Australia.

Non genuine visitor and had insufficient fund.

Non genuine visitor and had insufficient fund.

Non genuine visitor and had insufficient fund Non genuine visitor.

Non genuine visitor.

Subject was watch listed.

on Subject photo substituted Passport.

Non genuine visitor.

travelled Subject photo Passport.

Non genuine visitor.

Non genuine visitor.


Non genuine visitor.

Subject travelled photo Passport.
Subject was a refugee, G11161165 G7053498 AB294220 N/A A3012741 A3420762 A3833850 AB298969 05/01/69 25/06/77 25/09/68 25/01/79 22/06/88 25/12/87 23/07/90 13/03/81 A3436653A ML302471 on substituted on substituted 25/04/72 27/08/87 return VISA return VISA return VISA A4143456 A4143455 S26411486 S25669052 212020088 A4143454 28/09/70 23/03/78 01/10/82 20/02/07 05/11/04 travelled N/A N/A for for for for Ministry of Defence, National Security & Immigration Section 06: Page 16 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Date Name Nationality Date of Birth Passport No.
Reason for Detention Vincent Micky Laheene B.
07/02/09 16/02/09 23/02/09 William 23/02/09 23/02/09 27/02/09 27/02/09 02/03/09 09/03/09 Mohammad S. Islam Irina S. 17/03/09 Yaara Tibi 17/03/09 Pramanad Siri 25/03/09 Za Lian Celi Sang Tuan Jianhong Tan Huihua Zhu Puti Sekifu FSM Algerian Myanmar Myanmar N/A Chinese Chinese Tuvaluan Bangladeshi Israeli Israeli Indian 20/09/82 19/01/70 14/11/75 24/08/74 06/07/76 10/07/55 29/09/63 119/03/71 10/04/70 03/11/87 11/12/87 03/03/56 N/A 5290851 A100176 A116330 00167 G33973640 G33969701 FU018170 A0841910 12753023 12650685 F0588573 claimed asylum but was refused.
Arrived without passport.

Non genuine visitor.

No pre-entry VISA for Fiji.

No pre-entry VISA for Fiji No pre-entry VISA for Fiji Non genuine visitor.

Non genuine visitor.

No return ticket.

Non genuine visitor.

No return ticket.

No return ticket.

Non genuine visitor.
Ministry of Defence, National Security & Immigration Section 06: Page 17 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Section 7 Ministry of Labour, Industrial Relations and Employment Role and Responsibilities The Ministry’s core responsibility is to pursue the attainment of decent work standards through; fair working conditions; stable and constructive labour relations; and an environment that encourages productivity, human resource development and employment growth.
These responsibilities are achieved by focusing on developing an enabling environment supported by sound labour laws, policies and practices.

These tasks are undertaken through the following budgeted activities.

General administration - Corporate Services Labour Services - Industrial Relations Services, Labour Standards Service, Policy and Legal Services and Labour Administrative Services.

Occupational Health & Safety Services – Workman’s Compensation Service, OHS and Strengthening OHS Delivery Capacity.
Table of Contents 7.1 7.2 7.3 7.4 FINANCIAL STATEMENT ........................................................................................................................ 1 Audit Opinion .................................................................................................................. 1 Statement of Receipts and Expenditure ........................................................................ 2 Statement of Output Costs ............................................................................................. 3 Appropriation Statement ................................................................................................ 3 AUDIT FINDINGS .................................................................................................................................... 3 Agency Financial Statement .......................................................................................... 3 7.5 FNPF Reconciliations..................................................................................................... 4 7.6 VAT Reconciliations ....................................................................................................... 4 7.7 VAT on exempt items and refunds ................................................................................. 5 7.8 Unaccounted VAT - OHS Revenue ............................................................................... 6 7.9 7.10 Pending Wage Dispute Cases ....................................................................................... 7 7.11 Unclaimed Compensation Trust Monies ........................................................................ 7 Appendix 7.1: Statement of Output Costs.................................................................................. 9 Appendix 7.2: FNPF Reconciliation ......................................................................................... 10 Appendix 7.3: Vat Reconciliation ............................................................................................. 11 Appendix 7.4: Pending Cases Wages dispute cases .............................................................. 11 FINANCIAL STATEMENT 7.1 Audit Opinion The audit of the 2008 accounts of the Ministry of Labour, Industrial Relations and Employment resulted in the issue of a qualified audit report.
The qualifications are as follows.

Ministry of Labour, Industrial Relations & Employment Section 07: Page 1 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________  The amounts reflected in the Statements of Output Costs have been estimated as the facility to allow the measurement and accounting of these costs has yet to be integrated in the Financial Management Information System of government.
It is not possible therefore to express an opinion on the accuracy of the expenditures incurred by the Office under each output.

 The Ministry has not provided the following contrary to Finance Instructions 82 (1): a.

Statement of Losses; and b.

Trust Fund Account Statements of Receipts and Payments.

The Financial Management Information System shows that the Ministry of Labour, Industrial Relations and Employment as at 31/12/08 have trust funds totalling $857,224 and $124,212 respectively.
7.2 Statement of Receipts and Expenditure The Ministry of Labour, Industrial Relations and Employment incurred a total expenditure of $6,896,955 in 2008 compared to $19,821,196 in 2007.
Table 7.1: Statement of Receipts and Expenditure for 2008 Descriptions RECIEPTS State Revenue Agency Revenue 2008 $ 2007 $ (327) 1,282 (55,826) (47,551) TOTAL REVENUE 955 (103,377) EXPENDITURE Operating Costs 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 & Transfer Total Capital Expenditure 2,527,934 174,491 149,049 173,973 161,448 99,846 2,719,407 6,006,148 3,601,901 250,633 217,438 263,428 230,372 2,133,080 1,703,835 8,399,877 487,384 487,384 284,059 141,825 10,173,393 10,599,277 Value Added Tax TOTAL EXPENDITURE 403,423 6,896,955 822,042 19,821,196 Ministry of Labour, Industrial Relations & Employment Section 07: Page 2 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ The significant decline in expenditure by $12, 924,241 in 2008 when compared to 2007 was due to the reallocation of the Department of Tourism and Environment in 2008.
The reallocation also affected revenue which decreased by $102,422 in 2008.

7.3 Statement of Output Costs The Statement of Output Costs consolidates the 6 outputs prescribed in the Budget Estimates, contrary to the required format.

These are detailed in Appendix 7.1.

7.4 Appropriation Statement The Ministry of Labour, Industrial Relations and Employment incurred expenditures totalling $6,896,955 in 2008 against the budget of $7,882,200 resulting in a savings of $985,245 or 12%.
Details of expenditures against the budget estimates are provided in Table 7.2 Table 7.2: Appropriation Statement for 2008 SEG ITEM Budget Estimate Changes Carry- Revised Estimate $ Actual Expenditure $ Lapsed Appropriation $ $ $ Established Staff Government Wage Earners Travel & Communication Maintenance & Operations Purchase of Goods & Services Operating Grants & Transfers Special Expenditure Total Operating Costs Capital Expenditure Capital Purchase Total Capital Expenditure Value Added Tax TOTAL EXPENDITURE 3,060,700 175,000 159,600 199,100 194,800 105,000 2,936,000 6,830,200 547,000 547,000 505,000 7,882,200 68,989 0 0 0 0 0 (68,989) 0 0 0 0 3,129,689 175,000 159,600 199,100 194,800 105,000 2,867,011 6,830,200 547,000 547,000 505,000 7,882,200 2,527,934 174,491 149,049 173,973 161,448 99,846 2,719,407 6,006,148 487,384 487,384 403,423 6,896,955 AUDIT FINDINGS 7.5 Agency Financial Statement Over $ 0 0 0 0 0 0 0 0 0 0 0 0 601,755 509 10,551 25,127 33,352 5,154 147,604 824,052 59,616 59,616 101,577 985,245 Commencing 2006 financial year, each annual report must include financial statements which have been prepared and signed in accordance with these Instructions, audited by the Auditor General, and accompanied by an audit opinion prepared by the Auditor General.1 The draft financial statements must be submitted to the Auditor General by 31 March in the following year, or within such other time as agreed to with the Auditor General.2 1 Finance Instructions 2005 – 81 (2) 2 Finance
 Instructions 2005 – 81 (3) Ministry of Labour, Industrial Relations & Employment Section 07: Page 3 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ The Ministry submitted its Agency Financial Statement for audit on 20/04/09.
Audit noted that the Agency Financial Statement submitted by the Ministry was not prepared in accordance with the requirements of Section 82 and Schedule 1 of the Finance Instructions 2005.

The Ministry failed to submit a Statement of Losses, Statement of Assets and Liabilities and Trust Fund Statements of Receipts and Payments for audit.
Non compliance with Finance Instructions in the preparation of the financial statements has restricted the scope of the audit and will be included in the audit report as qualifications.

Recommendation The Ministry should ensure that the requirements of the Finance Instructions are strictly followed in the preparation of the Agency Financial Statements.

Management Comments Recommendation noted and we will ensure that we improve on it immediately.
7.6 FNPF Reconciliations Every employer shall pay to the fund in respect of each of his employees, in every month during which such employee is employed by him and in the month following the termination of such employment, a contribution calculated upon the amount of wages payable to such employee by such employer for the preceding month at the appropriate rates.3 A reconciliation of FNPF contributions against salaries and wages reported in the Financial Statements revealed significant variances.
Refer to Appendix 7.2 for FNPF reconciliation.

This implies that the Ministry has over/under paid its employees.

Recommendations The Ministry should review its FNPF records and reconciliations and ensure that correct FNPF rates are paid on salaries and wages.
Management Comments After further consultation and briefing with the Auditor about the FNPF Reconciliation issue we have agreed to review, assess and make improvement on to the current control system and process of the Ministry’s FNPF Account in relation to recording and reconciliation.
7.7 VAT Reconciliations Subject to the provision of the Vat Decree 1991, the tax shall be charged in accordance with the provisions of this Decree at the rate of twelve and a half percent on the supply (but not including an exempt supply) in Fiji of goods and services, by a registered person in the course or furtherance of a taxable activity carried on by that person, by reference to the value of that supply.4 3 Chapter 219 – Fiji National Provident Fund – Section 13 (1) 4 Value Added Tax Decree 1991 4th edition revised to 30/04/04 – section 15 (1) Ministry of Labour, Industrial Relations & Employment Section 07: Page 4 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Output VAT is payable to the Commissioner of Inland Revenue for the supply of all goods and services with the exception of zero rated and exempted supplies.
Payments effected by government departments for goods and services are thus subjected to VAT.5 A review of the VAT returns and supporting documents and VAT reconciliations carried out during the audit revealed an un-reconciled balance of $1,323,245 between the taxable supplies as per VAT Return and total income/expenditure as per the Statement of Receipts and Expenditure.

Refer to Appendix 7.3 for details.


In addition, VAT input as per VAT returns totalled $307,938, whereas the general ledger recorded VAT input of $407,895 resulting in a difference of $99,957.

Recommendations  The Ministry should review its VAT records and reconciliations and provide explanations for the variances.

 Supervisory checks on the preparation of VAT Returns should be improved to ensure that balances reflected in the VAT Returns reconcile with the general ledger (FMIS).
Management Comments  Observation from DAR confirmed that the VAT Input adjustment figures and other journal adjustments were not been taken in to account thus showing an Un-reconciled amount of $99,957.

 We have accepted the recommendation and it has been built in the Supervisor’s Individual Work Plan.
7.8 VAT on exempt items and refunds The supply of transport services relating to the international carriage of passengers and goods from a place in Fiji to a place outside Fiji, the supply of services directly in connection with goods situated outside Fiji & the supply of goods which are not situated in Fiji at the time of supply are zero rated as per the second schedule of the VAT Decree.6 Audit noted that the Ministry had claimed VAT (Value Added Tax) on overseas travels and equipments purchased from overseas, which are considered zero-rated.
Refer to Table 7.3 for examples: Table 7.3: VAT claimed on exempt items Particulars Invoice Amount ($) VAT Claimed ($) Date Cheque No.
Overseas Purchase 15/12/08 17/12/08 15/12/08 Total Overseas Travel 26/05/08 2/12/2008 18594 18663 18593 15579 18403 Purchase of non deductive test equipment –NDT Equipment Pty Ltd (Australia) NDT Equipment –KKS Instrument (Australia) NDT Equipment –KKS Instrument (Australia) Airfare Cost - One world flight centre Airfare Cost - Macquarie Travel 5 Finance Circular No 9/95 6 VAT Decree 1991,Second Schedule ,section 2 (10),(23) Ministry of Labour, Industrial Relations & Employment 7,022.82 12,020.75 6,820.00 25,863.57 7,998.00 6,989.00 780.31 1,335.64 757.84 2,873.79 888.67 776.55 Section 07: Page 5 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Date Cheque No.
Particulars Total Invoice Amount ($) 9,188.29 VAT Claimed ($) 1,020.90 In addition, the Ministry also claimed VAT refunds on subsidies paid to the Training and Productivity Authority of Fiji (TPAF) which were VAT exempted as stated in the agreement7 between the Permanent Secretary for Labour, Industrial Relations, and Employment and TPAF.

Refer to table 7.4 for details: Table 7.4: VAT claimed on subsidies paid to TPAF Cheque No.
17338 18796 Date 18/09/08 24/12/08 Total Description 2007 3rd & 4th quarter subsidy payment 2008 3rd & 4th quarter subsidy payment Cheque Amount ($) 311,050.00 333,834.27 644,884.27 VAT Claimed ($) 28,277.27 37,092.70 65,369.97 As a result the Ministry has underpaid VAT to Fiji Islands Revenue and Customs Authority (FIRCA) by claiming input tax refunds on items exempted from VAT.
Recommendation The Ministry should lodge an amended VAT Return to avoid being penalized by the Fiji Islands Revenue and Customs Authority.
Management Comments We are please to confirm that after further consultation with the Auditor & FIRCA we have come to know that expenditures for Apprentice Scheme, overseas purchase, and overseas air passage are all VAT exempted in terms of its education purpose and of its overseas payment status therefore we will ensure that it is strictly observed and followed in future.
7.9 Unaccounted VAT - OHS Revenue In any case where a return under Part VII (returns and payment of tax) of the VAT Decree is furnished which understates output tax or overstates input tax, that person shall subject to subsection (2) of this section and Section 70(1) of the Decree be liable to a penalty not exceeding the full amount of the deficient tax.8 Audit noted that revenue or fees collected by the Ministry through its Occupational Health and Safety (OHS) Division have not been accounted for in the VAT returns.
Discussion with the Director OHS and the Accounts Officer indicated that VAT is included in the OHS Fees but are not declared in monthly VAT Returns to the Fiji Islands Revenue Customs Authority.

The Ministry has therefore incorrectly declared information on its monthly VAT returns and could be penalised by the Fiji Islands Revenue & Customs Authority.
7 Agreements dated 18/05/07 and 22/05/08 8 VAT Decree 1991,Section 76A, (1) (a) Ministry of Labour, Industrial Relations & Employment Section 07: Page 6 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Recommendations  The Ministry should account for the OHS Revenue while preparing monthly VAT Returns.

 The Ministry should lodge amended VAT Returns for the years concerned to avoid paying penalties.
Management Comments  This is a new issue and it had not been a practical system and process in terms of MOF procedural matters and the understanding all these years that the revenue collected it is remains for government.

 We will await direction from MOF.
7.10 Pending Wage Dispute Cases Every person who wilfully delays or obstructs the Permanent Secretary or any Labour Officer, Medical Officer, Health Inspector or Labour Inspector while such Officer or Inspector in exercising any power or performing any duty conferred or imposed upon him shall be liable on conviction to a fine not exceeding two hundred dollars and in the case of a continuing offence to a fine not exceeding ten dollars per day for every day during which the offence continues.9 Audit noted that wages dispute cases for the Central Eastern Division from 2006 are still pending.
Explanations were not provided as to why the cases are still outstanding.

Refer to Appendix 7.4 for examples of pending cases.

The issues on the delay in resolving wage dispute cases have been continuously raised in the audit report.

Recommendation The Ministry makes every effort to resolve long outstanding wage dispute cases.

Management Comments Recommendation fully accepted and it has been part of the Ministry’s Operation Re-Birth System and process Exercise.
7.11 Unclaimed Compensation Trust Monies The workmen’s compensation Act makes provision for the payment of compensation to dependence of deceased workers, to be paid in court.
Upon application, the court directs at its discretion the sum so paid to be apportioned amongst the legal dependents and invested for their benefit, under a joint trust with the Permanent Secretary for Labour, Industrial Relations & Productivity.10 The Ministry acts as a trustee and maintains trust fund accounts of beneficiaries of deceased workmen until they reach the age of 21 years.
Audit noted that the Ministry has yet to pay out trust funds belonging to beneficiaries of deceased workers that have attained 21 years.

Refer Table 7.5 for examples: 9 Laws of Fiji Chapter 92 , Part III,S 9 10 Workmen’s Compensation Act S12 Ministry of Labour, Industrial Relations & Employment Section 07: Page 7 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Table 7.5: Unclaimed Compensation Trust Monies No.
ASN Deceased 1 658/80 Munisami 2 1832/84 Lalesh Prasad 3 1349/88 Maika Tora 4 970/89 5 531/90 Sairusi Roiroi Tomu T Tuivaga - - Manasa Tunabuna Virendra Singh Varinava Bola Etika Tukana Josese Tuilau 10 98/93 12 462/93 13 606/93 14 735/93 23 885/98 32 1633/00 Viliame Vatubua 34 1515/90 Mani Lal - Beneficiary Muneshwaran Sandika Devi Ela Tora Miliakere Tau Viliame Tuivaga Isimeli Tuivaga Sanjeshni Singh Esekaia Raliqilevu Avineet Peni R Jovesa Tukana Panapasa Lebling Mitesh Chand Sanaila Ralimalima Amount ($) Date of Birth 18,048.48 Not available 12/06/1984 12,551.36 06/30/1988 1,626.66 12/31/1987 4,725.76 02/12/1988 8,737.65 10/22/1986 4,379.80 05/15/1988 648.89 05/08/1987 1,596.20 10/11/1988 3,353.52 08/11/1988 143.36 11/08/1988 5,062.20 12/26/1988 1,246.50 06/30/1987 709.33 05/8/1986 1,411.42 12/19/1988 1,850.71 The above finding indicated that funds are unnecessarily maintained in the trust fund accounts.
Recommendations The Ministry should ensure that trust monies are paid out to beneficiaries once they attain 21 years of age.

Management Comments Recommendation fully accepted and it has been part of the Ministry’s Operation Re-Birth Exercise.
Ministry of Labour, Industrial Relations & Employment Section 07: Page 8 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Appendix 7.1: Statement of Output Costs General Administration Description EXPENDITURE Operating Costs Established Staff Government Wage Earners Travel & Communication Maintenance & Operations Purchase of Goods & Services Special Expenditure Total Operating Costs 2008 $ 2007 $ 560,432 42,560 41,379 52,469 40,619 1,018,054 1,755,513 790,245 29,867 34,916 44,269 34,738 0 934,035 Value Added Tax TOTAL EXPENDITURE 91,760 1,847,273 113,888 1,047,923 Labour Services Description EXPENDITURE Operating Costs Established Staff Government Wage Earners Travel & Communication Maintenance & Operations Purchase of Goods & Services Operating Grants & Transfers Special Expenditure Total Operating Costs Capital Expenditure Capital Purchase Total Capital Expenditure 2008 $ 2007 $ 996,837 131,931 55,804 54,865 57,984 99,846 709,437 2,106,704 984,549 144,863 66,758 61,143 23,224 34,947 28,205 1,343,689 46,927 46,927 0 0 Value Added Tax TOTAL EXPENDITURE 128,552 2,282,183 186,536 1,530,225 OHS Services Description EXPENDITURE Operating Costs Established Staff Travel & Communication Maintenance & Operations Purchase of Goods & Services 2008 $ 2007 $ 970,666 51,865 66,639 62,844 903,007 55,279 67,631 80,508 Ministry of Labour, Industrial Relations & Employment Section 07: Page 9 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009
 ________________ Description Special Expenditure Total Operating Costs Capital Expenditure Capital Construction Capital Purchase Total Capital Expenditure 2008 $ 2007 $ 991,916 2,143,930 985,592 2,092,017 0 440,457 440,457 99,958 0 99,958 Value Added Tax TOTAL EXPENDITURE 183,111 2,767,498 261,871 2,453,846 Appendix 7.2: FNPF Reconciliation (a) Total FNPF against salaries and wages for 2008: FNPF as per financial statement Less: December 2007 FNPF paid in 2008 Add: December 2008 FNPF paid in 2009 $ 252,389.88 -
 252,389.88 - 252,389.88 Gross Pay subject to FNPF (252,389.88/0.08) 3,154,873.50 (b) Salaries and wages for 2008 subject to FNPF Salaries, wages and allowances as per financial statement Less: Salaries, wages and allowances not subject to FNPF 2,450,035.18 52,900.05 Salaries, wages and allowances for 2008 subject to FNPF 2,397,135.13 Un-reconciled variance 757,738.37 Ministry of Labour, Industrial Relations & Employment Section 07: Page 10 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ 6,896,955.08 2,802,271.33 4,094,683.75 2,771,439.12 1,323,244.63 403,422.79 4,472.39 407,895.18 307,937.68 99,957.50 Appendix 7.3: Vat Reconciliation OUTPUT Total Income / Expenditure as per Expenditure Statement Less Expenditure not subject to VAT Seg 1 Seg 2 Seg 6 Total Expenditure Subject to VAT (Output) Vat Output as per the VAT Returns Un - reconciled Variance 2,527,933.91 174,491.15 99,846.27 INPUT VAT Payments (VAT Payment to FIRCA and VAT input) as per the Expenditure statement Less December Payment made in January Less Penalties VAT Payment (VAT Payment to FIRCA and VAT input - as per VAT Return) Un - reconciled Variance Appendix 7.4: Pending Cases Wages dispute cases 2006 Pending Cases Employee 1 Sharmendra Prasad 2 Vatiliai Dulaki 3 Sekove Vakosia 4 Motusela Sigalevu 2007 Pending Cases Employee 5 Suresh Prakash 6 Ravi Raj 7 Samuela U Bati 8 Pailato Carasiga 9 Jope Qalia 10 Ledua Vakatalai 11 Uma Devi 12 Alisi Nacagilevu
 13 Lino ratuvou 14 Waisale Nasila 15 Laitia Radravu 16 Viliame Daunidraki 17 Esala Kabu 178 Esala Vilowaqa 19 Sanaila Matanatabu 20 Abdul Sabir 21 Saula Rabuli Jaibul Nisha 22 Jiuta Qesa Mataitoga 23 24 Katarina Talabuka Employer Ganga Ltd Scotts Security Angco Polymedic Ltd Risk Control Employer Metromix Harbour Construction Allied Security Service B W Holdings Ltd B W Holdings Ltd Defence Security New World Supermarket Voko Industry Fish Investment Fiji Mac Millon FAB Fancy Free Clothing Professional
 Security Professional Security Allied Security Sharma's Rental Safety Security Sita Hot & Spicy Nagaidamu Youth Project Sipreme Quality Location LBE Suva Suva Suva Location Lami Navua Suva Vatuwaqa Vatuwaqa Tamavua Narere LBE Suva Suva Govt Bldg Suva - - - Suva Suva Toorak Suva Nasinu Ministry of Labour, Industrial Relations & Employment Section 07: Page 11 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ 25 Aporosa Soqoiwasa 26 Rakesh Satya Nand 27 Vasenai Vosalini 28 Daniel Karan 29 Timoci N 30 Pauliasi Seivikau 31 Vineeta Kumari 32 Bharti Devi 33 Vijendra Karan 34 Imtiaz Mohd 35 Apolosi Ranawai 36 Rohit Chand 37 Mohd Rizwan 38 Vinesh Ram 39 Avinesh Dayal 40 Vinod Chand 41 Ritesh Chand 42 Ledua V 43 Sundressan 44 Krishneel nair 45 Shaileshni Prasad 46 Vasanthi Raj 47 Nakaleto R 48 Sereina T 49 Akanisi Marama 50 Asena Cagimikalau 51 Semi Ratu 52 Hafiz Raza 53 Vilimania Sauduadua 54 Semesa Ravudi 55 Sekela Meo 56 Mosese L 57 Ritesh Chand 58 Rajan Rajneel Chand 59 Atasa Tukana 60 Nacanieli Takala 61 Roger Inoke & Others 62 Savitri 63 Dharmit Narayan 64 Robert Kumar 65 Petero Koroi 66 Binod Prasad 67 Binesh Prasad 68 Biklesh Ram 69 Jaysiv Singh Joeli Ledua 70 71 Sanjay Sunil Singh 72 Leonard Deo 73 Manjoram Pillay 74 Anil Kumar Pacific Building System Sahu Singh & Associates Blossom Shoes Ezi Bargain Native Protection Security Force Bake Rite Bakery Meena's Footwear Meena's Footwear Alert Marketing Alert Marketing
 Alert Marketing Alert Marketing Alert Marketing Alert Marketing Alert Marketing Alert Marketing Rajendra Foodtown Alspec Holding Singh Construction Cyrex Comm Executive Property Happy Foods Jojo's Construction Hot Stove Eagle Ridge Investment Eagle Ridge Investment Naqaidamu Youth Co Waste Care Ltd Nanettess Accomodation Sivam Jewellers MH Scud Timber Rajendra Prasad Foodtown Rajendra Prasad Foodtown Great Wok of China Babavoce Farm Ocean 2000 Custom Covers Ltd Rajendra Prasad Foodtown Dee Ces Dee Ces Elite
 Printing Elite Printing Elite Printing Elite Printing Elite Printing Pacific Plumbing Services H D Foremans Construction Core Technology Jays Supermarket Lami Suva Suva Suva Suva Nakasi Nausori Nausori Vatuwaqa Vatuwaqa Vatuwaqa Vatuwaqa Vatuwaqa Vatuwaqa Vatuwaqa Vatuwaqa Suva LBE Suva Suva Suva Levuka Suva Navua Walu Bay Walu Bay Suva Nabua Suva Nausori Tamavua - Suva Suva Flagstaff - - Suva Suva Suva Suva Nabua Nabua Nabua Nabua Nabua - Nabua Tamavua Nausori Ministry of Labour, Industrial Relations & Employment Section 07: Page 12 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ 75 Sotiana Temo 76 Aneesh Krishneel 77 Lepani Likunitaba 78 William Brown 79 Loraini Verivalu 80 Mehzabeen Begum 81 Nazbun Bi 82 Anjani Lata 83 Salend Prasad 84 Orisi Cavuka 85 Aporosa Wainila 86 Mohd Janif 87 Jaswant Lal 88 Etonia R 89 Mohd Nisar Ali 90 Sanjay Kumar 91 Abinesh Chand 92 Rajesh Dass 93 Amenatave N 94 Maggie Josaia 95 Umen Dutt 96 Monika Karan 97 Livai Rokotuibau 98 Aviniesh Singh 99 Bale Tukana 100 Robin N 101 Shalendra Nath 102 Shabneel Chand 103 Anand Naidu 104 Doreen Ranuka 105 106 Maui Bose 107 Usa T 108 Praveen Jai Ram 109 Suresh prasad 110 Ritesh Prasad 111 Ledua B 112 Sahid Khan 113 Irivi Vakarau 114 Emosi R 115 Leonard Vishnu 116 Apenisa V 117 Emori R 118 119 Pranil Prasad 120 121 Korni Yabaki 122 Filise Vuki 123 Avisaki Tutolu 124 Kokila Devi Jitendra Prasad Josephine K Jone Salele Takayawa Valenikana Restaurant
 Takayawa Valenikana Restaurant Allied Security Service Nizam Bake Shop Bula Night Club Comsol Fiji Ltd Rups Investment MH Rups Investment City Security Jiwan Bhai Hardware Safety Security Services Aarkay Motors Angco Polymedic Kim's Furniture Auto Care Fiji Ltd Rajendra Foodtown Fortech Construction Risk Control Things & Movies Pacific Transport Supreme Clothing Jay's Restaurant Rajendra Prasad Fppdtown Risk Control Nestle Fiji Ltd Shop & Save Niranjans Autoparts Alert marketing Quest Serviced Apartment
 Shop & Save Rohit Dairy Farm Risk Control Pacific Woods Tacirua Transport Rups Big Bear Ministry of Youth Samross Consultants Pacific Building System Chands Truckers Scafworks Solution Safety Security Service Shop N Save Caqalai Island Rsort Rups Big Bear Citiline Buses Mario Investment Inter Clean Fiji Ltd Nora Store Mohd I J Enterprise Suva Suva Suva Valelevu Suva Suva Suva - Raiwaqa Suva Nasinu Suva Vatuwaqa - Nasinu Nabua Suva Vatuwaqa Suva Suva - Nasinu Suva Suva Suva Lami Nasinu Suva Suva Suva Lami Tailevu Suva Suva Tamavua Suva Suva - Suva Suva Suva Suva Lami Levuka Suva Suva Suva Walu Bay Suva Suva Ministry of Labour, Industrial Relations & Employment Section 07: Page 13 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ 125 Maika Soko 126 Likena Talei 127 Atish Prasad 128 Luike V 129 Salendra Kumar 130 Saiyaz Shaukat 131 David Lal 132 Tevita R 133 Ashwin Narayan 134 Pravin Kumar 135 Iliki Lafilati 136 Urmila Devi 137 Solomoni Bavai 138 Apisai Naqamu 139 140 Lote Raikabula 141 Alipate Rauca 142 Suresh Chand Iane Marseu Tuna Pacific Agency Trade Plus Economy Retail & Taxis Western Builders Kwik Shift Citiline Transport Citiline Transport Safety Security Services Eagle Ridge Investment Safety Security Services Shiu Dula & Sons Fortech Construction Bright international Fiji Ltd Bright international Fiji Ltd Bright international Fiji Ltd Cotaki Construction Cotaki Construction International Ltd Suva Suva Suva Suva Suva
 Suva Suva Suva Suva Suva Naitasiri Vatuwaqa Nasinu Nasinu Nasinu - - Navua Ministry of Labour, Industrial Relations & Employment Section 07: Page 14 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Section 8 Ministry of Foreign Affairs, International Co-operation and Civil Aviation Role and Responsibilities Foreign Affairs and International Co-operation The role of the Ministry of Foreign Affairs and International Co-operation is to lead the formulation
 and conduct of Fiji’s Foreign Policy, in general, and external trade relations, in particular.
Major outputs are still being delivered in the conventional foreign relations activities of global intelligence gathering, especially through Fiji Missions abroad and the conduct of attendant analysis and guidance in such policy options that would maximize Fiji’s national gains from strategic future directions.

Emerging dimensions in international relations have resulted in newer outputs through Summit Diplomacy, Group Diplomacy and the Information Technology media.
In recent years, there has been an increasing range of outputs, including the communication of government policy choice and rationale to the international and domestic stakeholders for a stronger partnership in policy implementation.

These stakeholders include other government departments, international agencies, the business sector, the media, and the academic and civil societies.
This output class is expected to increase as greater civic responsibility generates interest and awareness in government’s policy processes and implementation.

Civil Aviation The Department is responsible for the regulation and control of Civil Aviation in Fiji and matters incidental thereto.
Its function include the economic regulation, control and planning of Commercial air transport to and within Fiji, investigation of aircraft accidents in Fiji, indirect provision of domestic airport services through Government grants to CAAFI, the charter of aircraft for search and rescue within Fiji’s Flight Information Region, representation on Civil Aviation Statutory Boards and Committees and meeting obligations under the International Civil Aviation Convention 1944.
Table of Contents FINANCIAL STATEMENT ........................................................................................................................ 2 AUDIT OPINION ......................................................................................................................... 2 8.1 STATEMENT OF RECEIPTS AND EXPENDITURES ............................................................... 3 8.2 STATEMENT OF OUTPUT COSTS ........................................................................................... 3 8.3 APPROPRIATION STATEMENT ................................................................................................ 4 8.4 8.5 STATEMENT OF LOSSES ......................................................................................................... 4 AUDIT FINDINGS .................................................................................................................................... 4 EXPENDITURE ........................................................................................................................... 4 8.6 REVOLVING FUND ACCOUNT - MISCELLANEOUS ............................................................... 5 8.7 8.8 VAT RECONCILIATIONS ........................................................................................................... 6 FOREIGN AFFAIRS AND INTERNATIONAL COOPERATION .............................................................. 7 Ministry of Foreign Affairs, International Co-operation & Civil Aviation Section 08: Page 1
 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ PAYROLL .................................................................................................................................... 7 8.9 FIJI MISSION, PNG .................................................................................................................... 8 8.10 FIJI MISSION – NEW DELHI .................................................................................................... 11 8.11 FIJI MISSION - CANBERRA ..................................................................................................... 12 8.12 FIJI MISSION – NEW YORK .................................................................................................... 13 8.13 FIJI MISSION – MALAYSIA ...................................................................................................... 16 8.14 FIJI MISSION – TOKYO ........................................................................................................... 18 8.15 FIJI MISSION – BEIJING .......................................................................................................... 21 8.16 FIJI MISSION – LONDON......................................................................................................... 22 8.17 FIJI MISSION – BRUSELLS ..................................................................................................... 24 8.18 8.19 FIJI MISSION
 – WELLINGTON ................................................................................................ 26 CIVIL AVIATION .................................................................................................................................... 28 8.20 POOR CONDITION OF RURAL AIRSTRIPS ........................................................................... 28 APPENDIX 8.1: STATEMENT OF OUTPUT COSTS ........................................................................... 30 APPENDIX 8.2: VAT CALCULATIONS ................................................................................................ 33 FINANCIAL STATEMENT 8.1 Audit Opinion The audit of the 2008 accounts of the Ministry of Foreign Affairs, International Cooperation and Civil Aviation resulted in the issue of a qualified audit report.
The qualifications are as follows:  The amounts in the Statements of Output Costs have been estimated as the facility to allow the measurement and accounting of these costs has yet to be integrated in the Financial Management Information System (FMIS) of government.

 The Ministry has not provided the following contrary to Finance Instructions 82 (1);  Statement of Losses and  Trust Account Statement of Receipts and Payments.
The Financial Management Information System shows that the Ministry as at 31/12/08 has operating trust funds totalling $2,574,983.

 The VAT payments could not be reconciled to the accounts as at 31/12/08.

 The Ministry failed to take into account of the expenses amounting to $24,483 incurred by the Civil Aviation while operating under the ambit of Ministry of Works for the first two months of the year.
Ministry of Foreign Affairs, International Co-operation & Civil Aviation Section 08: Page 2 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ 8.2 Statement of Receipts and Expenditures The Ministry collected revenue amounting to $31,727 and incurred total expenditures of $18,252,578 in 2008.

Details are shown in Table 8.1.
Table 8.1: Statement of Receipts and Expenditures for 2008 Description RECEIPTS State Revenue Operating Revenue Total State Revenue Agency Revenue Miscellaneous Revenue Total Agency Revenue 2008 $ 2007 $ 31,727 31,727 690,246 690,246 0 0 4,879 4,879 TOTAL REVENUE 31,727 695,125 EXPENDITURE Operating Costs Established Staff Unestablished Staff 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 4,794,613 1,528,888 1,205,607 4,336,982 272,073 1,731,715 2,309,174 16,179,052 4,382,411 1,654,256 1,268,816 3,262,092 221,467 981,214 1,910,021 13,680,277 6,934 124,030 1,000,000 1,130,964 131,791 0 0 131,791 Value Added Tax 942,562 1,510,378 TOTAL EXPENDITURE 18,252,578 15,322,446 Revenue declined by $663,398 or 95% in 2008 due to refund of the passport revenue collected on behalf on the Immigration Department.
The Ministry’s expenditure increased by $2,930,132 or 19% due to the inclusion of the Department of Civil Aviation which was previously administered under the ambit of the Ministry of Works.

8.3 Statement of Output Costs The Statement of Output Costs consolidates expenditures into 7 outputs.

These are detailed in Appendix 8.1.


Ministry of Foreign Affairs, International Co-operation & Civil Aviation Section 08: Page 3 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ 8.4 Appropriation Statement The Ministry incurred expenditures totalling $18,252,578 in 2008 against the budget of $19,507,196 resulting in a savings of $1,254,618 or 6.4%.

Details of expenditures against the budget estimates are provided in Table 8.2.
Actual Expenditure $ Carry – Over $ Lapsed Appropriation $ Table 8.2: Appropriation Statement for 2008 SEG Item Established Staff Unestablished Staff Travel & Communication Maintenance & Operations Purchase of Goods & Services Operating Grants & Transfers Special Expenditure Total Operating Costs Capital Expenditure Capital Construction Capital Purchase Capital Grants and Transfers Total Capital Expenditure Budget Estimate $ 5,039,500 1,292,800 1,265,100 3,826,600 241,200 2,473,700 3,855,000 17,993,900 560,000 150,000 1,000,000 1,710,000 Changes $ (236,088) 236,088 (1,067) 523,844 33,510 (633,463) (1,219,228) (1,296,404) Revised Estimate $ 4,803,412 1,528,888 1,264,033 4,350,444 274,710 1,840,237 2,635,772 16,697,496 4,794,613 1,528,888 1,205,607 4,336,982 272,073 1,731,715 2,309,174 16,179,052 0 0 0 0 560,000 150,000 1,000,000 1,710,000 6,934 124,030 1,000,000 1,130,964 13 Value Added Tax 1,237,200 (137,500) 1,099,700 942,562 TOTAL EXPENDITURE 20,941,100 (1,433,904) The Ministry of Finance approved the transfer of funds totalling $793,442, during the year.
Also in accordance to the Cabinet Decision 414 of 2008 the sum of $478,860 was redeployed to the Department of Indigenous Affairs and $955,044 to the Fiji Police Force.

8.5 Statement of Losses The Ministry did not provide a Statement of Losses for audit.

AUDIT FINDINGS 8.6 Expenditure Each year the Appropriation Act and the Budget Estimates set out details of the appropriations that Parliament approves for spending by each agency.
1 1 Finance Instruction Section 8 Ministry of Foreign Affairs, International Co-operation & Civil Aviation Section 08: Page 4 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ The Department of Civil Aviation which was previously under the administration of the Ministry of Works was merged with Ministry of Foreign Affairs in March 2008.

The budget appropriation for year 2008 was transferred to Ministry of Foreign Affairs accordingly.
However the Ministry did not account for expenses amounting to $24,483 which was incurred by the Civil Aviation while being with Ministry of Works for the months of January and February 2008.

The Ministry’s expenditure is understated by $24,483.

Recommendation The Ministry should ensure that all expenditure incurred are recorded and charged under the correct Head and allocation.

Management Comments The Department of Civil Aviation was with the Ministry of Works in the beginning of the year.
The Ministry of Works was to debit our Ministry with the respective salary charges for the Civil Aviation Department Staff.

But this did not eventuate until year ends of 2008 when our accounts already closed, The initiative is to be taken by the Works ministry as they are holding on to the charges and we can not account for it from our ends.
Comments have been noted and all their salary and wages charges are been accounted for in under our Ministry 8.7 Revolving Fund Account - Miscellaneous A ledger shall be maintained for advances and revolving fund accounts2.
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.3 A sum of $622,962 or 98.6% in the Revolving Fund Account balance was carried forward from 2006.

The account consisted of uncleared advances and drawings account balances.
Refer to the table below for details: Table 8.3: Revolving Fund balances carried forward from 2006 Accounts No.
Dates Particulars 10810108101560203 10810108101560203 10810108101560203 10810108101560203 10810108101560203 10810108101560203 10810108101560203 10810108101560203 10810108101560203 10810108101560203 10810108101570301 - - - - - - - - - - - Headquarters Headquarters Staff New York Rt Epeli Nailatikau Paula Kunabuli J.Maivusaroko Ross Ligairi Taina Tunidau Miscellaneous Balance $ 2,000.00 36,646.54 108.51 27,072.39 2,086.91 1,800.31 10,807.12 (9,632.01) 5,359.69 2,407.78 (3,517.86) Accounts No.
10810108101560203 10810108101560203 10810108101560203 10810108101560203 10810108101560203 10810108101560203 10810108101560203 10810108101560203 10810108101560203 10810108101560203 10810108101570301 2 Finance Manual 2005 Section 16.3.1 3 Finance Manual 2005 Section 16.3.3 Ministry of Foreign Affairs, International Co-operation & Civil Aviation Section 08: Page 5 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Accounts No.
Dates Particulars 10810108101570301 07/04/06 Aug/06 Sep/06 Oct/06 10810108101570301 Dec/06 10810108101570301 Chief of Protocol Chief of Protocol Chief of Protocol Chief of Protocol Merewai Bole Un-cleared Drawings Account balance carried forward from December 2005 Total Accounts No.
10810108101570301 10810108101570301 10810108101570301 Balance $ 16,425.00 500.00 364.42 30,629.37 74,660.00 425,243.68 622,961.85 The audit also noted that the Ministry posted an unidentified variance of $425,244 into the account in order to reconcile the drawing account in 2006 that was yet to be cleared as at 31/12/08.

Public funds are unnecessarily tied up when revolving funds accounts are not cleared within the specified time.
It also indicates ineffective and inadequate management of the revolving fund accounts.

Recommendations  The Ministry should rectify the variances noted and make the necessary adjustments to correct the revolving fund accounts.

 The outstanding accountable advances should be recovered from the officers or possible write offs should be explored by Ministry.

 No further accountable advance should be issued to officers who have not yet cleared/retired previous advances.
Management Comments Some correspondences were issued to officers concerned highlighting circumstances regarding outstanding advances against their names.

To some of them it was to their surprises as they know that they have fully retired their advances.
Some outstanding advances have been partly/fully recovered whilst write off options were already explored for the long outstanding ones 8.8 Vat Reconciliations Subject to the provision of the Vat Decree 1991, the tax shall be charged in accordance with the provisions of this Decree at the rate of twelve and a half percent on the supply (but not including an exempt supply) in Fiji of goods and services, by a registered person in the course or furtherance of a taxable activity carried on by that person, by reference to the value of that supply.4 A review of the VAT Returns and supporting documents and VAT reconciliations carried out during the audit revealed an un-reconciled balance of $267,463 between the taxable supplies in the VAT Return and the total income/expenditure in the Statement of Receipts and Expenditure.
Refer Appendix 8.2 for details: The above anomalies could have been avoided had the Ministry been more vigilant and proper supervisory controls were in placed.
4 Value Added Tax Decree 1991 4th edition revised to 30/04/04 – Section 15 (1) Ministry of Foreign Affairs, International Co-operation & Civil Aviation Section 08: Page 6 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Recommendations  The Ministry should ensure that postings are done on a regular basis to the General Ledger to avoid any anomaly.

 The monthly Vat reconciliations should be prepared to ensure that correct amounts are paid to FIRCA.
 Supervisory checks on the preparation of VAT Returns should be improved to ensure that balances reflected in the VAT Returns reconcile with the General Ledger.

Management Comments The VAT payments for the Ministry were prepared according to the General Ledger amounts of stated in the SEG report for the months, likewise the Civil Aviation Department’s vat payments was also prepared based from the General Ledger total of the monthly expenditures.
Since Civil Aviation Departments just join our Ministry last year, enquiries were made to the Revenue and Customs authority on the tax number to be used for the departmental vat payments, advice was given to use the same tax numbers currently being used by our Ministry.

Thus at every months end, two cheques are being issued, one for the Ministry and the other for the Civil Aviation department.
Lastly some refunds were on hold for the Civil Aviation Department for the year 2008 but this was adjusted in 2009.
FOREIGN AFFAIRS AND INTERNATIONAL COOPERATION 8.9 Payroll 8.9.1 Overpayment of Salaries Salary change advice shall be prepared by Ministry where they affect personal emoluments and deductions such as resignation and retirement.5 Salary advices must be submitted promptly to the Ministry of Finance where there is any change to personal emoluments or deductions dismissal, resignations and retirement.6 Audit noted that the some officers continued to receive salaries upon resignation and termination because the salaries section of the Ministry of Finance was not informed that the officers were no longer in the service.
Refer to the following table for details: Table 8.4: Salary Overpayment Names of the Officer EDP # Setaita Tupua 90182 Amount Overpaid $ 821.25 Isoa Gavidi 14715 1,781.34 Remarks The officer’s appointment was terminated on 14/07/08 but was paid till 28/07/08 (Pay 15).

The officer resigned from the Ministry wef 23/01/09 but was paid till 28/01/09.
5 Finance Instructions Section 59 (4) 6 Finance Instructions Section 26 (1) Ministry of Foreign Affairs, International Co-operation & Civil Aviation Section 08: Page 7 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Names of the Officer EDP # Mua E 47633 Amount Overpaid $ 187.06 Tupou Raturaga 61560 455.36 Fine Ditoka 53528 491.19 Total Overpaid 4,777.81 Remarks The officer resigned from the Ministry wef 01/06/08 but was paid till 02/06/08 The officer resigned from the Ministry wef 18/03/09 but was paid till 25/03/09.
The officer resigned from the Ministry wef 14/10/08 but was paid till 20/10/08.

The overpayments of salaries resulted because of lack of communication between the Ministry’s accountant and accounts sections of the Ministry of Finance to cease pay on time.

Recommendations  The Ministry should ensure that salary overpayment is avoided and strict adherence to the relevant Financial Instructions is made.
 The Ministry should address these shortcomings by communicating and coordinating matters affecting payroll in a timely manner with Ministry of Finance.

Management Comments Comments not received.

8.10 Fiji Mission, PNG 8.10.1 Extravagant Expenditure 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.7 The Fiji Mission in PNG incurred the following expenses which appeared to be inappropriate or extravagant: Table 8.5: Expenses deemed extravagant Date Cheque # Kina 15/09/08 003404 08/09/08 003407 804 536 Amount FJD $ 493 328 15/02/08 003034 4,471 2,555 01/04/08 003080 1,500 819 Details Payment of Perdiem allowance – to Brisbane Australia to sought out Dali’s (son) school fees.
Payment of Perdiem allowance – to Brisbane Australia.

No supporting documents attached.

Payment of refund for excess baggage for the four Fiji Nationals on return travel from Bougainville to Nadi.

Audit noted that the Ministry failed to obtain re-imbursement from the 4 nationals.

Payment of six decoders as instructed by Head of Mission.

Audit request for further information remained futile.
7 Part 2 Finance Manual – Expenditure (2005) Ministry of Foreign Affairs, International Co-operation & Civil Aviation Section 08: Page 8 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Date Cheque # Kina 03/04/08 003084 2,553 Amount FJD $ 1,394 04/04/08 003085 2,750 1,501 30/07/08 003178 2,224 1,271 14/08/08 003188 2,179 26/03/08 003074 2,630 1,260 1,464 Details Payment for the return ticket for the driver from Nadi to Honiara and Nadi.
No additional information was available for the reason for the journey.

Payment for the dinner hosted by the Head of Mission and Adi Vaciseva for “SEVU MEKE” by Makosoi Fiji Women on the instruction of Head of mission.

Being payment for purchase of N95 mobile telephone for the Head of Mission.

Audit noted that the mission could have purchased a more economical mobile phone.

Payment for Official management of United States Naval Ship Mercy.
Being payment of Christmas Luncheon hosted by High Commissioner for the mission and families.

luncheon hosted by HOM the for The uneconomical spending of the budgetary allocations reflects poorly on the controls in place and lack of monitoring of public funds by officer in charge.

Recommendations  The officer in charge of the PNG Mission should ensure that all officers exercise proper economy in the use of public funds and all unnecessary expenses are reimbursed.
 Officers who fail to comply should be disciplined and surcharged.

Management Comments Comments not received.

8.10.2 Telecom Bills Officers serving in overseas missions are responsible for the payment of all charges for private telephone, cleaning, domestic services and related charges in respect of their accommodation.8 The staffs at the PNG Mission incurred exorbitant telephone bills for the office landline phone in 2008.
Refer to the table below for details: Table 8.6: Excessive Telephone Bills Date Cheque # Kina 20/04/08 30/05/08 05/11/08 003101 003140 003453 4,928 5,252 7,996 Amount FJD $ 2,690 2,889 5,503 Details Being payment of bills for the period 25/02/08-25/03/09.

Being payment of bills for the period 25/04/08-25/05/08.

Being payment of September Bills.

In addition unauthorised calls were made by a Mission staff.

Refer to the table below for details.
8 Public Service (Diplomatic and Consular Services) Regulations 2005 Section 63 (3) Ministry of Foreign Affairs, International Co-operation & Civil Aviation Section 08: Page 9 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Table 8.7: Phone calls deemed unofficial Telephone # 61450351610 61450351610 61450351610 61450351610 61450351610 61414698019 61450351610 61450351610 61409300492 61450351610 Destination Duration Minutes 9.26 4.03 8.16 7.01 10.16 24.12 9.50 9.46 12.59 7.47 Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Time 10.41 am 10.52 am 6.23 pm 4.25 pm 10.24 am 9.59 am 9.32 pm 6.44 pm 10.12 am 2.22 pm Cost $ 23.31 10.12 13.43 17.39 25.35 59.49 24.29 24.13 32.01 19.27 The above practice indicates lack of control that could lead to abuse of the telephone facilities.
Recommendation The officer in charge of the Mission should scrutinize all telephone bills and ensure that personal calls are not entertained and recovered from the officer(s) concerned.

Management Comments Comments not received.

8.10.3 Unauthorised tuition fees The Public Service (Diplomatic and Consular Services) Regulations 2005 lists the approved schools that officers in the different missions may send their children to.
For officers serving in the Port Moresby Mission; International School is recommended.9 Where the Head of Mission or Officer wish to enrol their child in a school other than the designated school listed under sub regulation 67(3), than any fees outside the equivalent of the one paid at the designated school would have to be borne by the parents.10 The Former High Commissioner to PNG – Mr Iosa Tikoca failed to reimburse a total amount of FJD $94,52711 for his son’s educations costs who attended St Josephs Nudgee College in Brisbane.
This issue was highlighted in 2007 audit report and the Ministry had decided to recover the outstanding amount.

However, payments were continually made to St. Josephs Nudgee College in Brisbane in 2008, which were against the Ministry’s directive.

Refer to the table below for details: 9 Section 67(4) Public Service (Diplomatic and Consular Services) Regulations 2005 10 Section 67(5) Public Service (Diplomatic and Consular Services) Regulations 2005 11 Letter dated on 15/05/09 by Mrs Kedrayate.
Ministry of Foreign Affairs, International Co-operation & Civil Aviation Section 08: Page 10 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Table 8.8: Payment of Tuition Fees Date Cheque No Kina 18/04/08 19/08/08 003098 003192 10,000 18,806 Amount FJD $ 5,459 10,875 Details Part payment of tuition fees Part payment of tuition fees It was further noted that the Former High Commissioner’s contract was terminated in February 2009 but the Ministry failed to recover from the officer.
As a result of non adherence to the Ministry’s directive, the officer in charge of the Mission continued to pay a relatively higher tuition costs without proper authority.

Recommendation The Ministry should exhaust all means to recover the outstanding amount of $94,527 from the Former High Commissioner to PNG.

Management Comments Comments not received.
8.11 Fiji Mission – New Delhi 8.11.1 Freight Charges Officers travelling at public expense on return to Fiji on the completion of service are entitled to personal and household effects for themselves and their dependents not exceeding the following amounts in addition to the free baggage entitlement conferred by their passage tickets12: Officers Travelling by Air Position Head of Mission or Officer Each dependent travelling on adult ticket Each dependent child over 2 years Officers Travelling by Sea At unaccompanied baggage rates – (KG) 30kg 30kg 15kg Cubic Meter Officer Each dependent Child Single 4.5 1.5 Married 8.5 1.5 Audit noted that the Ministry paid an additional FJD $2,372 as freight charges for carting personal effects of Mr. Shaheen Ali who was accompanied by his family.
Refer to the table below for details: 12 Public Service (Diplomatic and Consular Services) Regulations 2005 Section 38 (1), (2)& (3) Ministry of Foreign Affairs, International Co-operation & Civil Aviation Section 08: Page 11 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Table 8.9: Details of Additional Freight Charges Type of shipment Entitled Actual Difference Sea shipment 10.0 cbm 13.5 cbm 3.5 cbm Excessive Payment FJD ($) 2,372 This implies non compliance to the Public Service (Diplomatic and Consular Services) regulation and wastage of public funds.
Recommendation The excess cost of baggage should be borne personally and thus $2,372 should be recovered from Mr. Shaheen Ali.

Management Comments Comments not received.

8.12 Fiji Mission - Canberra 8.12.1 Expenses beyond Control 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.13 A review of payment vouchers revealed that the Canberra Mission incurred unnecessary expenses which are extravagant and could have been avoided to save cost.
Refer to the table below for details: Table 8.10: Details of Unnecessary Expenses Date 20/03/08 Cheque # Amount FJD ($) Details 411510 763 16/07/08 411666 15/10/08 411822 16/09/08 411772 1,944 1,042 473 For the payment of return trip to Canberra to watch the Adelaide 7s for Acting High Commissioner Per diem of 4 nights in Sydney for the Acting High Commissioner to attend the World Youth Day functions.

Sydney has a Fiji House.


For re imbursement of funds for purchase of liquor in relation to the Fiji Day reception.

Payment for additional days per diem to attend the funeral of the late Mrs. Chand, wife of the former Minister for education Mr. Pratap Chand.

(Personal event thus Acting High Commissioner should have paid for his expenses).

In the absence of proper monitoring process in place, extravagant expenditure was incurred by the Mission at the expense of the public funds.
13 Finance Manual – Ministry of Foreign Affairs Part 2 Expenditure Ministry of Foreign Affairs, International Co-operation & Civil Aviation Section 08: Page 12 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Recommendations  The officer in charge of the Canberra Mission should ensure that all officers exercise proper economy in the use of public funds and all unnecessary expenses are reimbursed.
 Officers who fail to comply should be disciplined and surcharged.

Management Comments Comments not received.

8.13 Fiji Mission – New York 8.13.1 Private Education Assistance Where the Head of the Mission or officer wish to enrol their child in a school other than the designated school listed under the subregulation 67 (3), then any fees outside the equivalent of the one paid at the designated school would have to be borne by the parents.
The designated school for the New York Mission as per Regulations is UN International School.14 Audit noted that the Counsellor’s children are attending Evangel Christian School, which is a private school.

Prior approval from the Permanent Secretary for the Public Service was not obtained.

Refer to the table below for details.


Table 8.11: Details of Payment Date 01/04/08 17/06/08 20/06/07 13/08/08 03/10/08 12/11/08 Cheque No 8202 8408 8409 8477 8545 8610 Amount FJD ($) Details 2,989 224 778 2,393 1,719 1,750 Payment for Tuition for Cornella/Stephanie Smith for the School year 2007/2008.

Reimbursement for various school expenses.

Payment for Tuition for Cornella/Stephanie Smith for the School year 2007/2008.

Reimbursement for School tuition and book fee for the three Smith Children.
Payment for tuition for school year 2008/2009 for Stephanie, Mason and Edwin Smith.

Payment for tuition for school year 2008/2009 for Stephanie, Mason and Edwin Smith.

The Ministry has paid tuition costs that should be borne by the officers’ on Mission.

Without proper approval from the Public Service Commission and Permanent Secretary for Foreign Affairs, such expenditure is deemed extravagant and inappropriate.
Recommendation The Ministry should take a stronger role in ensuring that diplomats comply with the Public Service (Diplomatic and Consular Services) Regulations 2005 and any deviations without approval from the relevant authorities should be dealt with accordingly.
14 Public Service (Diplomatic and Consular Services) Regulations 2005 Section 67 (3) Ministry of Foreign Affairs, International Co-operation & Civil Aviation Section 08: Page 13 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Management Comments Comments not received.
8.13.2 Unnecessary Payments Officers serving in overseas mission are responsible for the payment of all charges for private telephone, cleaning and domestic services and related charges in respect of their accommodation.15 A review of payment vouchers revealed that the New York Mission incurred expenses that should be paid by the officers as it is not covered under their employment entitlement.
Refer to the table below for details: Table 8.12: Examples of Unnecessary Payments Date 19/03/08 Cheque # 8271 Amount US($) 750 Amount FJD ($) 1,138 08/05/08 8349 54 81 13/08/08 02/1108 18/11/08 8484 8588 8612 262 509 2836 392 894 4,983 Details Rocker recliner and TV Stand for the Ambassador.

Audit noted that this is not stated as his entitlement under the Regulations.

Being reimbursement for the purchase of bedroom toothbrush set, Air Freshener, Toothpaste and Ear tips for the Ambassador.
Audit noted that this is not stated as his entitlement under the Regulations.

Payment for Ambassador’s cable, internet and Phone service.

Payment for Ambassador’s cable, internet and Phone service.

Payment for excessive of 3.5 cm for shipping of personal effects for Mr. Sainivalati Navoti.

(First Secretary).

The Mission should be more vigilant of such transactions as it could be catalyst for over expenditure and abuse of public funds.
Recommendation The Ministry should ensure that such payments are not entertained and appropriate action is taken against those officers’ not complying.

Management Comments Comments not received.


8.13.3 Irregularities in Posting Allowances The Public Service Commission had ruled that His Excellency Mr Berenado Vunibobo, due to his status as Fiji’s Permanent Representative to the United Nations be paid ‘married’ post allowance for the duration of his contract in New York.16 However, the Ambassador was paid at a rate of USD$2,686.52 fortnightly instead of USD$2,095.05 as stated in the Public Service (Diplomatic & Consular Services) Regulations 2005.
It addition the officer paid for his utilities charge on single rate despite receiving allowances under the married category.

Refer to the table below for details.
15 Public Service(Diplomats and Consular Services) Regulations, 2005, Section (63) (3) 16 Public Service Commission – ref 29/476/1-7 Ministry of Foreign Affairs, International Co-operation & Civil Aviation Section 08: Page 14 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Table 8.13: Irregularities in Posting Allowances Date Cheque # Particulars 15/10/08 8564 01/10/08 8542 10/12/08 8634 18/12/08 8649 12/11/08 8603 26/11/08 8613 01/10/08 8543 of of of Post Post Post Payment Allowances Payment Allowances Payment Allowances Payment Allowances Payment Allowances Payment Allowances Post allowance back dated May-Sept 08.
Post Post Post of of of Actual Paid (USD) ($) 2,686.52 Married allowance As the Regulation (USD $) 2,095.05 Difference (USD $) Difference (FJD $) 591.47 962.83 2,686.52 2,095.05 591.47 962.83 2,686.52 2,095.05 591.47 1,039.30 2,686.52 2,095.05 591.47 1,039.30 2,686.52 2,095.05 591.47 1,078.73 2,686.52 2,095.05 591.47 1,078.73 11,823.10 5,786.90 6,036.20 9,826.14 This implies that the checks carried out by the Ministry on the records submitted by the Missions are inadequate and ineffective.
The over payment of post allowances is a breach of Public Service Regulations.

Recommendation The Ministry should ensure that all overpayment of post allowance is recovered from the Ambassador.

Management Comments Comments not received.


8.13.4 Missing Supporting Documents Details of each invoice or other source document for a payment must be promptly and accurately recorded.17 The audit noted that payments made by the officer in charge were not properly supported thus reimbursement to Mission officers were difficult to verify.

Refer to the following table for details.


Table 8.14: Payment Vouchers without Supporting Documents Date 26/03/08 Cheque # 8273 Payee Particulars Lui Vunibobo E Reimbursement for purchase of Linen, Bath and bedroom rugs, shower curtains, bed comforters for the Pruns Apartment.
Amount (FJD) $ 1,294.87 Remarks - No invoices sighted - No receipts sighted 17Finance Instructions 2005 section 3.5.1 Ministry of Foreign Affairs, International Co-operation & Civil Aviation Section 08: Page 15 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Date 05/03/08 Cheque # 8259 13/08/08 8477 04/08/08 8459 14/05/08 8354 16/12/08 8648 05/11/08 8599 05/11/08 8600 05/11/08 8601 Payee Particulars Sainivalati Navoti Mason Smith Rowena Gonzalez Rowena Gonzalez E Lui Vunibobo Sainivalati Navoti Sainivalati Navoti Lui Vunibobo E trip Reimbursement for the Hire of Vehicle and other to related expenses during Washington.
Reimbursement for School Tuition, Book fees and Medical expenses for Smith children’s Reimbursement for the purchase of Flower for for Mrs farewell Mrs Esala and Clauddette Wu Reimbursement for Hosting of reception for Ambassador - Purchase of alcohol amounted to USD 135.60 Reimbursement for reception for Sainivalati Navoti’s End of Tour Reimbursement for Fiji day Expenses lunch Reimbursement for expenses incurred for Fiji Day celebration Reimbursement for expenses incurred for Fiji Day celebration Expenses incurred for Prime Minister’s visit.
Remarks - No receipts sighted - No receipts sighted - No receipts sighted - No receipts sighted - No receipts sighted - No receipts sighted - No receipts sighted - No receipts sighted Amount (FJD) $ 312.42 2,969.92 817.85 1,564.08 983.38 1,112.33 506.32 2,437.62 The above anomalies indicated that the checks carried out by the Ministry on the records submitted by the Missions are inadequate and ineffective.
Recommendations  The Ministry should ensure that the records submitted by the officer in charge of the mission are properly scrutinised.

 Anomalies or the non-compliance with the provisions of the PSC regulation should be severely dealt with.

Management Comments Comments not received.
8.14 Fiji Mission – Malaysia 8.14.1 Personal Expenses Paid by the Mission Officers serving in overseas mission are responsible for the payment of all charges for private telephone, cleaning and domestic services and related charges in respect of their accommodation.18 The rate of reimbursement approved by the Permanent Secretary, the Heads of mission or officers who use their private vehicles for official duties in their overseas Mission are entitled to causal user mileage allowance.19 18 Public Service(Diplomats and Consular Services) Regulations, 2005, Part 8(63)(3) 19 Public Service (Diplomats and Consular Services) Regulations, 2005 Part 5 (42) (1).
Ministry of Foreign Affairs, International Co-operation & Civil Aviation Section 08: Page 16 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ The audit noted that on a number of occasions the Mission had a tendency of incurring unnecessary expenses which could have been avoided.
Refer to the following examples: a) Unofficial Travel The High Commissioner Mr Suliasi Lutubula attended the 8th Borneo Tens Rugby Tournament 2008 and the Mission paid for the travelling and accommodation cost totalling $2,325.

Audit did not cite any formal invitational letter from the tournament organisers for the High Commissioner to attend the games.

b) Personal Expenditures A review of the payment vouchers of the mission revealed that some payments made were personal in nature.
The table below shows details: Table 8.15: Examples of Personal Expenditure Payee Particulars Amount (RM) Audit comments 900.00 Not entitled.

183.00 Not entitled.

1,080.00 Cheaper phone would be economical.

200.00 Not entitled for Purchase of shoe rack for Acting High Commissioner’s residence.

Payment for repairs of water blaster Acting High Commissioner.

Purchase Headphone Commissioner.

Charges for cleaning Second Secretaries Floor carpets.
Official for acting High of Date 24/10/08 Payment Voucher # 302001 08/10/08 301991 NK Interior & Furniture Powernectic SDN BHD 24/10/08 302003 Sonic Power 30/09/08 301971 –Dry Chem (Malaysia) SDN BHD Recommendations  The Mission should recover from the officers concerned all expenses unofficial in nature through salary deductions.

 The Mission should ensure that proper scrutiny of expenditure to be incurred is carried out before the Mission commits itself to payment.
Management Comments Comments not received.
8.14.2 Dependant’s Education Cost Where the Head of Mission or Officer wish to enrol their child in a school other than the designated schools listed under sub regulation 67(3), any fees outside the equivalent of the one paid at the designated school would have to be borne by the parents.20 20 Section 67(5) Public Service (Diplomatic and Consular Services) Regulations 2005 Ministry of Foreign Affairs, International Co-operation & Civil Aviation Section 08: Page 17 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Audit noted that Mr Basir Ali’s children were enrolled to the Islamic Institution and not the International school as required by the regulation.
Furthermore, no approvals were sought from the Permanent Secretary.

Refer to the table below for details: Table 8.16: Details of Dependant’s Education Cost Date PV # Payee Particulars 16/12/08 519806 28/02/08 176415 Adni Consultancy SDN BHD Arabic Centre Language TOTAL for the Second Payment of School Fees Secretary’s children.

Payment of tuition fees in respect to two daughters of Second Secretary – Mr Basir Ali.
(a 24 week course) Amount (RM) 29,992.25 5,280.00 35,272.25 The Ministry had to pay for relatively higher tuition costs without proper authority from the Public Service Commission and Permanent Secretary for Foreign Affairs.

Recommendations  The amount in excess of the relevant officer’s entitlement for education allowance for his dependent should be recovered by the Ministry.
 The Ministry should take a stronger role in ensuring that diplomats comply with the Public Service (Diplomatic and Consular Services) Regulations 2005 and any deviations without approval from the relevant authorities should be dealt with accordingly.

Management Comments Comments not received.


8.15 Fiji Mission – Tokyo 8.15.1 Use of credit card by the Ambassador An employee must use government resources and assets in a proper way.21 Audit noted that the Ambassador Mr Kubuabola abused the credit card privileges for the procurement of goods and services and failed to reimburse the personal charges incurred by him in 2007 and 2008.
The following are the personal charges incurred by the Ambassador in 2008 and 2007: Table 8.17: Details of Personal Charges not reimbursed in 2008 Month PV # Card Type September October 3639 3689 Visa - DC Card Visa - DC Card Amount Yen 35,701 29,740 Amount (FJD $) 513.58 1,416.66 21 Public Service Code of Conduct Ministry of Foreign Affairs, International Co-operation & Civil Aviation Section 08: Page 18 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Month PV # Card Type November December April May July August September November December Total 3744 3787 3440 3425 3540 3585 3638 3743 3788 Visa - DC Card Visa - DC Card Amex Card Amex Card Amex Card Amex Card Amex Card Amex Card Amex Card Amount Yen 347,939 567,017 237,285 237,438 278,502 174,544 249,933 199,753 259,099 2,616,951 Amount (FJD $) 6,073.34 10,691.97 3,515.23 3,470.16 3,922.81 2,449.44 3,595.47 3,486.72 4,522.62 43,658.00 Table 8.18: Details of Personal Charges not reimbursed in 2007 Month PV # Card Type Amount Yen Amount (FJD) September October July August September October November Total 3011 3059 2908 2974 3023 3058 3118 Visa - DC Card Visa - DC Card 243,368 95,719 Amex Card Amex Card Amex Card Amex Card Amex Card 208,469 300,582 928,101 87,955 135,560 1,999,754 3,375 1,342 2,743 3,890 12,870 1,233 1,824 27,277 The excessive personal costs were incurred by using the Visa and Amex cards to purchase goods and services while on the Mission.
Furthermore it was noted that the personal charges totalling FJD $70,935 for the past two years were not reimbursed.

Lack of monitoring by the Ministry has resulted in the non recovery of the personal costs of the Ambassador.

Recommendations  The Ministry should ensure that all outstanding dues are recovered from the Ambassador.

 The Mission should cease the practice of allowing public officers using the credit cards for personal purposes and officers not complying should be disciplined.
Management Comments Comments not received.
8.15.2 Unsupported Payment Vouchers Officers serving in overseas mission are responsible for the payment of all charges for private telephone, cleaning and domestic services and related charges in respect of their accommodation.22 22 Public Service(Diplomats and Consular Services) Regulations, 2005, Part 8(63)(3) Ministry of Foreign Affairs, International Co-operation & Civil Aviation Section 08: Page 19 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ The audit noted that some of expenses incurred by the officers’ of the Mission were personal in nature.
Refer to the table below for details: Table 8.19: Examples of Unsupported Payment Vouchers Date PV # Payee Particulars 14/04/08 3326 City Club of Tokyo 22/04/08 3341& 3342 Tourist Nokyo & Corporation Station Hotel Kokura 21/11/08 3725 Yuko Aoki 25/11/08 3717 Roppongi Hill Club 21/11/08 3716 City Club of Tokyo Payment for lunch with Mr. Watanabe, Japan Friendship society and the Asia ladies friendship society.
Payment for the trip undertaken by First Secretary Mr. Ravula for the Sanix World Rugby Youth Invitational tournament 2008.

This Tournament was organised by the Japan Rugby Football Union.

Payment for the Asia – Pacific Ladies Friendship society 40th Anniversary attendance fees.

Payment of meal expenses for the Ambassador Kubuabola.

(Reason for the meal not stated).

Payment of meal expenses for the Ambassador Kubuabola.

(Reason for the meal not stated).


Amount (FJD $) 619 1,120 87.27 4,390.73 370.95 The above anomaly indicates lack of control procedures in place at the Mission resulting in the payment of personal expenses of the officers.

Recommendation The Mission should ensure that all personal expenditure is recovered from the respective officers through salary deduction.

Management Comments Comments not received.
8.15.3 Motor Vehicle Accidents A copy of the accident report shall be submitted to the Permanent Secretary who shall forward copies to the Permanent Secretary of Ministry of Finance and the Solicitor General.23 A driver involved in an accident may be surcharged if the surcharging authority believes the driver was at fault.24 The audit noted that a vehicle belonging to the Mission was involved in an accident on 02/12/07 and expenses amounting to $12,016 in repair cost were met by the Mission’s budgetary allocations.
Furthermore Police and Accident reports were not produced for audit scrutiny.

Refer to the table below for details: Table 8.20: Accident Details Date PV # Payee Particulars 21/01/08 3181 Yanase & Co Ltd Payment of repairing cost for the third party’s damaged vehicle in accident on 02/12/07.

Amount (FJD $) 15,065.31 23 Finance Manual – Ministry of Foreign Affairs Section.

12.6.6 24 Finance Manual – Ministry of Foreign Affairs Section.
12.6.7 Ministry of Foreign Affairs, International Co-operation & Civil Aviation Section 08: Page 20 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Date PV # Payee Particulars 21/01/08 3183 Taiyo Nissan Auto Sales Co. Ltd Payment of repairing cost for the official vehicle GAI 10701 in the accident which occurred on 02/12/07.
Total Cost of Damage Less Partially covered cost by insurance Costs borne by Mission Partially covered cost by insurance Amount (FJD $) 11,068.46 26,133.77 14,117.50 12,016.27 In the absence of the police and accident reports it could not be ascertain who was at fault.

Failure to submit sufficient evidence on vehicle accidents would hinder recovery and disciplinary procedures against the officer(s) responsible.
Recommendation The Ministry should ensure that an accident report together with the Police report is furnished by the Tokyo Mission and those found at fault should be surcharged accordingly.

Management Comments Comments not received.

8.16 Fiji Mission – BEIJING 8.16.1 Education Assistance The Public Service (Diplomatic and Consular Services) Regulations 2005 lists the approved schools those officers in the different missions may send their children to.
For officers serving in Beijing, the International School is recommended.25 Where the Head of the Mission or officer wish to enrol their child in a school other than the designated school listed under the sub regulation 67 (3), than any fees outside the equivalent of the one paid at the designated school would have to be borne by the parents.26 The audit noted that the Counsellor and the First Secretary’s children are attending British School of Beijing.

Refer to the table below for examples.


Table 8.21: Details of Dependant’s Education Cost Date 02/04/08 Cheque No 1065746 Amount RMB 48,995 Amount FJD ($) 10,687 22/08/08 1092950 54,367 11,859 22/08/08 1092951 76,423 16,670 25/09/08 23/10/08 1107129 1107149 1,815 2,125 416 505 Details Being payment for Rusiate Katonitabua’s Tuition fees/Bus for Term 01 April 27 June 2008.

Being payment of Rusiate Namase Katonitabua’s school fees for school term from 1st September-12 December 2008.
Being payment of Luisa Alifereti’s school fees for school term from 1st September-12 December 2008.

Refund for paying uniform fees for children.

Being reimbursement to counsellor for paying Vanesa Lusia Alifereti’s school uniform at the British School of Beijing.
25 Public Service (Diplomatic and Consular Services) Regulations 2005 Section 67 (3)/(4) 26 Public Service (Diplomatic and Consular Services) Regulations 2005 Section 67 (3) Ministry of Foreign Affairs, International Co-operation & Civil Aviation Section 08: Page 21 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ No evidence was provided to indicate that prior approval were obtained from the Permanent Secretary and Public Service Commission for the officer’s children to attend a school not specified in the Public Service (Diplomatic and Consular Services) Regulations 2005.
Recommendations  The amount in excess of the relevant officer’s entitlement for education allowance should be recovered by the Ministry.

 The Ministry should take a stronger role in ensuring that diplomats comply with the Public Service (Diplomatic and Consular Services) Regulations 2005 and any deviations without approval from the relevant authorities should be dealt with accordingly.

Management Comments Comments not received.


8.17 Fiji Mission – LONDON 8.17.1 Legal Charges against the Mission Where a property is leased on behalf of the government, the head of Mission or officer in residence must not by any act or omission place the lessee in breach of the terms of the lease.27 The audit noted that the account for Rednall and Rittner Limited (Property Managing Agents) was not settled on time by the Mission and thus legal action was instigated by a Law firm Brethertons.
Details of the legal costs are given below: Table 8.22: Details of Legal Cost Date PV # Description 02/12/08 13569 Lease charges of property not paid from 2005.

Interest on overdue account Costs incurred Admin Fees Total Total Pounds 9,023.41 199.51 86.25 70.50 9,379.67 Total (FJD $) 26,979.99 596.53 257.88 210.79 28,045.19 Failure to process lease payments on time has resulted in the Ministry paying unwarranted penalties.
The above clearly indicate non-compliance with the relevant provisions of Public Service (Diplomatic & Consular) Regulation.

Recommendation The Mission should ensure that all lease payments are made when due in order to avoid additional costs from incurring.

27 Public Service (Diplomatic & Consular Services) Regulations 2005 section 66(2).
Ministry of Foreign Affairs, International Co-operation & Civil Aviation Section 08: Page 22 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Management Comments Comments not received.
8.17.2 Vehicle Penalty Charge Any Fiji officer or family member who is notified that he/she has infringed the local parking regulations must pay promptly any fine for which he/she is liable unless the breach occurred during the transaction of official business and could not have been readily avoidable.
If the breach did occur in the course of official business the officer should report the circumstances to his/her Head of Mission who is satisfied that the breach was unavoidable in the circumstances, may arrange for the notice to be returned through the appropriate local authority with a note setting out the circumstances which let to the contravention28.
Audit noted that the London Mission incurred penalty charges for using the congestion charging area, without paying the appropriate road toll fees when due.
Refer to the table below for details: Table 8.23: Vehicle Penalty Charges Date 18/02/08 Cheque # 013205 Amount £ 120 Amount FJD ($) 366 27/03/08 013249 60 179 31/03/08 013254 60 179 01/04/08 013256 180 539 16/04/08 013278 120 359 17/04/08 013283 120 359 04/06/08 013344 120 352 13/06/08 013356 60 176 17/06/08 013364 60 176 14/07/08 013397 60 177 23/07/08 013407 88 260 Details Payment for Penalty Charge incurred by Fiji High Commission official vehicles (Registration 150D152 & Fiji on 07/02 &08/02 respectively.
Payment for Penalty Charge incurred by Fiji High Commission official vehicles ( Registration Fiji) Payment for Penalty Charge incurred by Fiji High Commission official vehicles (Registration 150D152).
Payment for Penalty Charge incurred by Fiji High Commission official vehicles ( Registration 150D152 & Fiji) Payment for Penalty Charge incurred by Fiji High Commission official vehicles ( Registration Fiji) Payment for Penalty Charge incurred by Fiji High Commission official vehicles ( Registration Fiji) Payment for Penalty Charge incurred by Fiji High Commission official vehicles ( Registration 150D152) Payment for Penalty Charge incurred by Fiji High Commission official vehicles ( Registration 150D152) Payment for Penalty Charge incurred by Fiji High Commission official vehicles (Registration 150D152).
Payment for Penalty Charge incurred by Fiji High Commission 28 PSC Regulations (Diplomatic and Consular Services ) Section 27 (1) & (2) Ministry of Foreign Affairs, International Co-operation & Civil Aviation Section 08: Page 23 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Date Cheque # Amount £ Amount FJD ($) Details 19/08/08 013437 60 177 official vehicles (Registration 150D152 & Fiji).
Payment for Penalty Charge incurred by Fiji High Commission official vehicles (Registration Fiji).

The non payment of congestion charges has resulted in the substantial fines being levied on the Mission at the expense of the public funds.

Recommendation The Ministry should ensure that the Mission observe local laws to avoid such unwarranted expenditures.

Management Comments Comments not received.


8.18 Fiji Mission – BRUSELLS 8.18.1 Personal Expenditure Officers serving in overseas mission are responsible for the payment of all charges for private telephone, cleaning and domestic services and related charges in respect of their accommodation.29 The audit noted that some personal expenses were authorised by the officer in charge of the Mission.
Refer to the table below for examples: Table 8.24: Personal Expenditure paid by the Mission Particulars Audit comments Amount Euro Amount (FJD $) Date 12/03/08 Cheque/ Voucher No.

13 26/09/08 27 1 year subscription to cable TV for N. Khatri (second secretary).

from taken delegates Had Suva for dinner twice and a working lunch in the office.

29/08/08 31 Repairs of official vehicle CD- D351 due to accident.

24/07/08 29 Subscription to the cable TV for T. Raturaga Not entitled to such benefits.
140,39 314.21 Delegates from Suva have already been paid per-diem allowance which covers their meals and also there is no mention representational of allowance or working lunch in office.

No details in the payment voucher provided to ascertain the cause of the accident.
Audit noted that there is no such the Public Service provision (Diplomatic and Consular Services) Regulations 2005. in 153,00 360 881,10 2,074 168,20 393 20/06/08 33 Hiring of a suit for the Audit views this as a personal 86 200 29 Public Service(Diplomats and Consular Services) Regulations, 2005, Part 8(63)(3) Ministry of Foreign Affairs, International Co-operation & Civil Aviation Section 08: Page 24 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Date Cheque/ Voucher No.
Particulars Audit comments Amount Euro Amount (FJD $) Ambassador expense and should be borne by the Ambassador.

The head of the Mission failed to properly scrutinise the payments demonstrating lack of supervision.

Recommendations  The Ministry should recover all personal expenses from the officers’ concerned.

 The officer in charge of the Mission should scrutinise all expenditure before payment.

Management Comments Comments not received.


8.18.2 Lack of Quotations-Air Tickets Officers responsible for the control over expenditure should ensure proper economy in the use of public funds and thereby ensure that proper value is obtained for all funds utilised.
When undertaking purchase of goods and services which are of substantial amount, a minimum of 3 competitive quotations should be obtained.30 The Mission failed to obtain competitive quotations for its travelling needs and relied on travel agent, Carlson Wagonlit Travel Ltd for all travelling needs.

Refer to the table below for details.


Table 8.25: Lack of quotations - Air Ticket Ticket for Date of Service 10/11/08 Ambassador 15/10/08 Ambassador 15/10/08 10/11/08 Second Secretary First Secretary 29/04/08 12/03/08 Ambassador First Secretary Reason for Travel Travelled from Brussels to Port Moresby to attend the 14th ACP meeting and the regional meeting in Port Villa.

Travelling to attend meetings in Fiji and Headquarters.

Tickets for first secretary’s family following end of tour.
Travel to Fiji to participate in the WTO trade policy review & consultation with Headquarters to 17th November 2008.

Escorted the late Mrs. Vatu back to Fiji.

Present his credentials to the Ministry of Foreign Affairs in Madrid and bilateral meetings.

from 8th Amount Euro 9.336,11 6.585,66 4.462,64 1.874,75 Amount (FJD $) 21,947 15,452 10,471 4,407 1.229,95 717.71 2,850 1,606 The purpose of obtaining quotations is to ensure that purchases are made from the most economical source available.
The above findings indicate failure by the Mission to obtain competitive quotes from other suppliers to ensure that purchases are made from the most economical source.

Recommendation The Mission should ensure that competitive quotations are obtained to enable it to economise its spending.

30 Ministry of Foreign Affairs - Finance Manual section 2.3.2.
Ministry of Foreign Affairs, International Co-operation & Civil Aviation Section 08: Page 25 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Management Comments Comments not received.

8.19 Fiji Mission – Wellington 8.19.1 Representation Allowance Representation allowance is the cost to cover direct and necessary expenditures on official entertainment.

Officers other than the Head of Mission must account for two third of their representative allowance31.
The audit noted that the First and the Second Secretary at the Wellington Mission claimed entertainment allowance without producing the receipts for the costs incurred as required by the Public Service (Diplomats and Consular Services) Regulations.

Refer to the table below for details.
Table 8.26: Allowances claimed in the absence of receipts Date Cheque # Payee 20/02/08 503104 Mr. Sakiusa Rakai Amount NZ($) 180 Amount FJD ($) 210 20/08/08 503350 Mr. Sakiusa Rakai 270 305 20/08/08 503349 Mr. Ponsami Chetty 225 254 03/09/08 503360 Mr. Ponsami Chetty 315 352 17/09/08 503385 Mr. Ponsami Chetty 135 151 17/09/08 503386 Mr. Sakiusa Rakai 315 352 29/10/08 503438 Mr. Ponsami Chetty 310 29/10/08 503439 Mr. Sakiusa Rakai 180 343 199 Details at First spouse Hosted late lunch and dinner for DPS, Foreign Affairs Accountant in Wellington at residence on this day.
Mrs. Solo Mara, Mrs. M Cama & Mr. Rakai at $45 per head.

Hosted luncheon at residence for the High Commissioner, and daughter who included Mrs. Miri & Jese Vocea to officially welcome the family into Wellington and self & wife at $45 each.

Dinner for Shankar Goundar, Vijay Chauhan, Rajendra Singh, Joti Sharma (management of spice Znadens at First Secretary’s residence).
Provided dinner for Mr. & Mrs. Limp Lee for and $135(discussion on mineral water, fishing and for timber) and provided dinner Wainarata Indian association members and First Secretary for $180.

Provided lunch to Director of Global business ideas and provided meals to Mr & Mrs. Mukesh Sharma whilst discussing projects at First Secretary’s residence.

for Mohammed Hosted dinner Singapore High Commission Takashee Embassy and Mr. Rakai and spouse.
Entertained Mr Vijay and provided lunch to the managers and staffs of Spice Zandens.
Hosted dinner for Abdul Hakim and spouse, second secretary of Malaysia from and Japanese Nishida from Secretary’s 31 Public Service(Diplomats and Consular Services) Regulations, 2005 Ministry of Foreign Affairs, International Co-operation & Civil Aviation Section 08: Page 26 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Date Cheque # Payee Amount NZ($) Amount FJD ($) Details 05/11/08 503450 Mr. Ponsami Chetty 90 97 High Commission and myself and spouse.
Hosted dinner for Mr. Nitiya Sharma of NZ Bio security.

The Mission Head failed to exercise proper economy over the payment of entertainment allowance without obtaining receipts thus proper value may not have been obtained for the funds spent on entertainment allowance.

Recommendations  The Mission Head should ensure that receipts are provided before payments are approved for the two thirds of the entertainment allowance.
 The Ministry should investigate all cases of representation allowance reimbursements without supporting documents and surcharge officers accordingly.

Management Comments Comments not received.
8.19.2 Personal Expenditure Officers serving in overseas mission are responsible for the payment of all charges for private telephone, cleaning and domestic services and related charges in respect of their accommodation.32 Officers below the rank of Heads of Mission will be expected to provide for themselves at their expense, all necessary linen, kitchenware and electrical appliances other than those entitled to them.33 A review of the payment vouchers revealed unauthorised payments by the Mission’s Head.
Refer to the table below for details.

Table 8.27: Details of Personal Expenditures Date Chq # Particulars 19/08/08 20/07/08 503344 503298 22/05/08 503232 Collection of rubbish from the First Secretary’s residence Refund for Mr. Sakiusa Rakai (second secretary for purchase of beddings, blankets, pillows for the new high commissioner.

Purchase of Electric Blankets for Mr. Chetty and Mr. Rakai.
Amount (NZ $) 260.00 286.27 Amount (FJD $) 294.00 328.18 1,910.00 2,260.00 The head of the Mission failed to properly scrutinise the payments demonstrating lack of supervision.

As a result public funds were not properly utilized as payment for personal expenditure could have been minimised.

Recommendations  The Ministry should recover all personal expenses from the officers’ concerned.

 The officer in charge of the Mission should scrutinise all expenditure before payment.
32 Public Service(Diplomats and Consular Services) Regulations, 2005, Part 8(63) (3) 33 Public Service (Diplomats and Consular Services) Regulations, 2005, Part 8 (64) (3).

Ministry of Foreign Affairs, International Co-operation & Civil Aviation Section 08: Page 27 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Management Comments Comments not received.
CIVIL AVIATION 8.20 Poor Condition of Rural Airstrips It is the responsibility of the Department of Civil Aviation to ensure that government grants allocated to the Airports Fiji Ltd for maintenance and upgrade rural airstrips are properly and effectively utilised.

For the past five years, the government had allocated $4.5 million as capital grants to the Airports Fiji Ltd for the up keeping and maintenance of rural airstrips.
Refer to the table below for details: Table 8.28: Status of airstrip upgrade Year 2004 Budgeted ($) 1,000,000 Actual ($) 850,000 Upgrade and maintenance of airports at Cicia, Vanaubalavu, Lakeba, Gau, Details of Expenditures Koro, Ono -i-Lau, Rotuma, Matei, Labasa and Nausori.

2005 1,000,000 850,000 Major works carried out at Bureta Airport including works and maintenance for the domestic airports.

2006 2007 2008 1,000,000 500,000 1,000,000 500,000 Purchase of new fire truck for Labasa Airport.
415,000 Upgrading of Rotuma Airport.

464,185 Reimbursed to AFL and purchase of three new tractors.

The condition of the rural airstrips was not very satisfactory and a number of deficiencies were noted by the CAAFI aerodrome team.

Also the grant was diverted to purchase fire trucks and tractors without the approval from the Ministry of Finance.

The deficiencies are highlighted in the following table.
Table 8.29: Deficiencies in Rural Airstrips Airstrip Cicia Gau Kadavu Labasa Matei Moala Rotuma Savusavu Runway surface deteriorating, strip surface uneven and contained crab holes.

The anemometer is Deficiencies Maintenance activity not done regularly.

Runway surface slippery when wet, due to algae present on the runway.

Runway surface deteriorating.

Runway surface deteriorating.

Erroneous strip dimensions.

Runway surface soggy when wet.

Rocky outcrops within the strip area.


unserviceable and the southern end of the runway has eroded.

From the deficiencies noted by CAAFI, the maintenance and upgrade of airstrips may not have been carried out properly and regularly.

As a result public funds may have been diverted to other projects.
Ministry of Foreign Affairs, International Co-operation & Civil Aviation Section 08: Page 28 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Recommendation The Department should be vigilant in monitoring the government grants allocated for maintenance and upgrading of rural airstrip and ensure that funds are utilised economically.
Management Comments As usual the Department of Civil Aviation continues to be vigilant in monitoring government grants to AFL ensuring that the funds are not diverted for other purposes but for the purposes of upgrading and maintaining good standards for rural airstrips to safeguard the interest of our air travelling public.
The Auditors should make every effort to visit AFL and some rural airstrips so that they will be in a better position to appreciate comments on both sides of the story rather than looking from only one side as they have been doing all these years.
Ministry of Foreign Affairs, International Co-operation & Civil Aviation Section 08: Page 29 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Appendix 8.1: Statement of Output Costs Portfolio Leadership and Secretariat Support Description EXPENDITURE Operating Costs Established Staff Unestablished Staff Travel & Communication Maintenance & Operations Purchase of Goods & Services Operating Grants & Transfers Special Expenditure Total Operating Costs Capital Expenditure Capital Construction Purchases Grants Total Capital Expenditure 2008 $ 2007 $ 1,419.336 456,096 358,725 1,299,007 81,041 454,110 525,526 4,593,841 2,080 37,209 150,000 189,289 3,286,808 1,240,692 951,612 2,446,569 166,100 735,911 1,432,516 10,260,208 98,843 0 0 98,843 Value Added Tax 263,518 1,132,784 TOTAL EXPENDITURE 5,046,648 11,491,835 Licensing, Compliance and Monitoring Treaties, Conventions and Agreement Description EXPENDITURE Operating Costs Established Staff Unestablished Staff Travel & Communication Maintenance & Operations Purchase of Goods & Services Operating Grants & Transfers Special Expenditure Total Operating Costs Capital Expenditures Capital Construction Purchases Grants & Transfers Total Capital Expenditure 2008 $ 2007 $ 712,843 228,477 179,855 649,851 40,617 237,956 290,635 2,340,234 1,040 18,605 100,000 119645 657,362 248,138 190,323 489,314 33,220 147,182 286,503 2,052,042 19,769 0 0 19,769 Value Added Tax 134,968 226,556 TOTAL EXPENDITURE 2,594,847 2,298,367 Ministry of
 Foreign Affairs, International Co-operation & Civil Aviation Section 08: Page 30 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Public Awareness Promotions Trade, Investments & Tourism Description EXPENDITURE Operating Costs Established Staff Unestablished Staff Travel & Communication Maintenance & Operations Purchase of Goods & Services Operating Grants and Transfer Special Expenditure Total Operating Costs Capital Expenditures Capital Construction
 Purchases Grants & Transfers Total Capital Expenditure 2008 $ 2007 $ 712,843 228,477 179,855 649,851 40,617 237,956 290,635 2,340,234 1,040 18,604 100,000 119,644 438,241 165,426 126,881 326,209 22,147 98,121 191,002 1,368,027 13,179 0 0 13,179 Value Added Tax 134,968 151,038 TOTAL EXPENDITURE 2,594,846 1,532,244 Facilitation of Overseas Development Assistance Description EXPENDITURE Operating Costs Established Staff Unestablished Staff Travel & Communication Maintenance & Operations Purchase of Goods & Services Operating Grants and Transfer Special Expenditure Total Operating Costs Capital Expenditures Capital Construction Purchases Grants & Transfers Total Capital Expenditure Value Added Tax TOTAL EXPENDITURE 2008 $ 2007 $ 712,843 228,477 179,855 649,851 40,617 237,956 290,635 2,340,234 1,040 18,604 100,000 119,644 134,968 2,594,846 - - - - - - - - - - - - - - Ministry of Foreign Affairs, International Co-operation & Civil Aviation Section 08: Page 31 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Promotion of Diplomatic Relations Description EXPENDITURE Operating Costs Established Staff Unestablished Staff Travel & Communication Maintenance & Operations Purchase of Goods & Services Operating Grants and Transfer Special Expenditure Total Operating Costs Capital Expenditures Capital Construction Purchases Grants & Transfers Total Capital Expenditure Value Added Tax TOTAL EXPENDITURE 2008 $ 2007 $ 712,843
 228,477 179,855 649,851 40,617 237,956 290,635 2,340,234 1,040 18,604 100,000 119,644 134,968 2,594,846 Licensing, Compliance and Monitoring – Civil Aviation Description EXPENDITURE Operating Costs Established Staff Unestablished Staff Travel & Communication Maintenance & Operations Purchase of Goods & Services Operating Grants and Transfer Special Expenditure Total Operating Costs Capital Expenditures Capital Construction Purchases Grants & Transfers Total Capital Expenditure Value Added Tax TOTAL EXPENDITURE
 Airline Services Description EXPENDITURE 2008 $ 2007 $ 258,778 79,014 63,238 218,937 14,185 151,990 282,683 1,068,825 347 6,202 200,000 206,549 66,378 1,341,752 2008 $ 2007 $ - - - - - - - - - - - - - - - - - - - - - - - - - - - - Ministry of Foreign Affairs, International Co-operation & Civil Aviation Section 08: Page 32 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Description Operating Costs Established Staff Unestablished Staff Travel & Communication Maintenance & Operations Purchase of Goods & Services Operating Grants and Transfer Special Expenditure Total Operating Costs Capital Expenditures Capital Construction Purchases Grants & Transfers Total Capital Expenditure Value Added Tax TOTAL EXPENDITURE 2008 $ 2007 $ 265,127 79,870 64,224 219,634 14,379 173,791 338,425 1,155,450 347 6,202 250,000 256,549 72,794 1,484,793 - - - - - - - - - - - - - - Appendix 8.2: Vat Calculations Variance between the taxable supplies as per VAT Return and the total income/expenditure as per Statement of Receipts and Expenditure: Details Total income/expenditure as per Statement of Receipts and Expenditure Less: Expenditure not subject to Vat Less: Total taxable supplies as per VAT Returns Un-reconciled variance $ 18,252,578 9,055,216 9,197,362 9,464,825 (267,463) Variances between the actual VAT payments for 2008 and the balances disclosed in the general ledger (FMIS).
Details VAT payments (VAT payments to FIRCA and VAT Input) as per Statement of Receipts and Expenditure VAT payments (VAT payments to FIRCA and VAT Input) as per VAT Returns for 2008 Un-reconciled variance $ 942,562 1,205,586 (263,024) Ministry of Foreign Affairs, International Co-operation & Civil Aviation Section 08: Page 33 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Section 9 Elections Office Role and Responsibilities The Supervisor of Elections is responsible for the registration of voters and the organisation, conduct and supervision of the election of members to the House of Representatives and at Local Government level.
The Supervisor is also responsible with providing administrative support for the Constituency Boundaries Commission in the discharge of its duties.

Responsibilities or deliverables undertaken by the office as budgeted for are outlined as follows:  Publication and Revision of the National Electoral Rolls.
 Conduct Local Government Elections  Public Awareness & Educational programs  Constituency Boundaries Commission  Voter Registration Update Table of Contents 9.1 9.2 9.3 9.4 9.5 9.6 FINANCIAL STATEMENT ........................................................................................................................ 1 Audit Opinion .................................................................................................................. 1 Statement of Receipts and Expenditure ........................................................................ 2 Statement of Output Costs ............................................................................................. 2 Appropriation Statement ................................................................................................ 3 Statement of Losses ...................................................................................................... 3 Financial Statements...................................................................................................... 3 AUDIT FINDINGS .................................................................................................................................... 4 Non Compliance to proper recruitment procedures ....................................................... 4 9.7 Engagement of Dianne Waller Consultancy Services ................................................... 6 9.8 9.9 Engagement of the Electoral Reform International Services Consultant ....................... 6 9.10 Unapproved Payment made to University of Melbourne ............................................... 7 9.11 Purchase of Blackberry Mobile Phones ......................................................................... 8 Splitting of Local Purchase Orders ................................................................................ 9 9.12 Appendix 9.1: Statement of Output Costs for 2008 ................................................................. 11 FINANCIAL STATEMENT 9.1 Audit Opinion The audit of the 2008 accounts of the Office of the Supervisor of Elections resulted in the issue of a qualified audit report.
The grounds for qualifications are as follows: 1.

The amounts in the Statement of Output Costs have been estimated as the facility to allow the measurement and accounting of these costs has yet to be integrated in the Financial Management Elections Office Section 09: Page 1 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Information System (FMIS) of government.
It is not possible therefore to determine the accuracy of the expenditures incurred by the Office under each output.

2.

The Office has not provided the following contrary to Finance Instructions 82(1):  A Statement of Losses, as losses amounting to $9,330 was recorded as at 31/12/08; and  A Trust Fund Account Statement of Receipts and Payments.

The Financial Management Information System shows that the Office as at 31/12/08 has an overdrawn operating trust fund balance totalling $519,266.

3.
3.

There is a significant variance in the FNPF reconciliation totalling $43,897 when compared to the accounts as at 31/12/08.

9.2 Statement of Receipts and Expenditure The Office incurred total expenditures of $841,593 in 2008 compared to $504,072 in 2007.
Table 9.1: Statement of Receipts and Expenditure for 2008 Description RECEIPTS State Revenue Agency Revenue TOTAL REVENUE EXPENDITURES Operating Established Staff Unestablished Staff Travel & Communication Maintenance & Operations Purchase of Goods & Services Special Expenditures Total Operating Expenditures 2008 $ 2007 $ 0 0 0 0 0 0 120,367 11,619 13,226 68,326 23,864 534,316 771,718 157,467 16,301 86,904 50,860 21,740 120,831 454,103 Value Added Tax 69,875 49,969 TOTAL EXPENDITURES 841,593 504,072 Total expenditure increased by $337,521 due to increase in maintenance and operations by 34% and special expenditure by 342%.
9.3 Statement of Output Costs As described in Section 9.1, the Statements of Output Costs consolidates the 5 outputs prescribed in the Budget Estimates.

These are detailed in Appendix 9.1.

Elections Office Section 09: Page 2 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ 9.4 Appropriation Statement The Office incurred expenditures totalling $841,593 in 2008 against a revised budget of $1,428,600 resulting in a savings of $587,007 or 41%.
Details of expenditures against the Budget Estimates are provided in the Appropriation Statement in Table 9.2.
Table 9.2: Appropriation Statement for 2008 SEG Item Established Staff Unestablished Staff Travel & Communication Maintenance & Operations Purchase of Goods & Services Special Expenditures Total Operating Costs Budget Estimate $ 162,900 11,900 17,000 72,200 25,300 3,500,000 3,789,300 Changes $ 0 0 0 0 0 2,500,000 2,500,000 Revised Estimate $ 162,900 11,900 17,000 72,200 25,300 1,000,000 1,289,300 Actual Expenditure $ 120,367 11,619 13,226 68,326 23,864 534,316 771,718 Carry – Over $ 0 0 0 0 0 0 0 13 Value Added Tax 451,800 312,500 139,300 69,875 TOTAL EXPENDITURE 4,241,100 2,812,500 1,428,600 841,593 0 0 Lapsed Appropriation $ 42,533 281 3,774 3,874 1,436 465,684 517,582 69,425 587,007 9.5 Statement of Losses The Office did not submit a Statement of Losses for audit.
9.6 Financial Statements Commencing 2006 financial year, each annual report must include financial statements which are prepared and signed in accordance with the Finance Instructions, audited by the Auditor General, and accompanied by an audit opinion prepared by the Auditor General.1 The draft financial statements must be submitted to the Auditor-General by 31 March in the following year, or within such other time as agreed to with the Auditor General.2 The Office of the Supervisor of Elections submitted its Agency Financial Statements for audit on 23/04/09.
The financial statements submitted were not prepared in accordance with the requirements of Section 82 and Schedule 1 of the Finance Instructions 2005.

The following discrepancies were noted:  The department failed to prepare a trust account statement of receipts and payments.

 The department failed to prepare statement of losses.
1 Finance Instructions 2005 – 81 (2) 2 Finance Instructions 2005 – 81 (3) Elections Office Section 09: Page 3 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________  The 2008 budget presented four outputs; however, the Office only submitted one Statement of Output Costs which was prepared according to the budget activities.
In addition, audit could not substantiate the balances reflected in the statements of output costs as the facility to allow the measurement and accounting of these costs has yet to be integrated in the Financial Management Information System (FMIS) of government.

Non-compliance with Finance Instructions in the preparation of the financial statements has restricted the scope of the audit and will be included in the audit report as qualifications.
Recommendation The Office should ensure that the requirements of the Finance Instruction 82 are strictly followed in the preparation of the Agency Financial Statements.

Management Comments Management would like to acknowledge the discrepancies raised by your Draft Audit Memorandum, Year 2008.

Firstly, this is to inform your good office that our AAO was only appointed in to the service on 13/10/08.
The officer comes from private sector background and was not familiar with the Finance Instructions and the FMIS system.

Secondly, prior to the engagement of the AAO, there was only 4 Established and 2 unestablished staff.

Therefore, the Accounts Section was managed by a Clerical Officer on Project appointment as there was no Senior Accounting Officer.

Also note the office sort advice from the PM’s Accounts Section from time to time.
The Statement o f Losses was not presented for Audit Inspection on time since the BOS Report was still with the Ministry of Finance.

The Statement of Losses will be presented to your good office once approval has been received from the Permanent Secretary for Finance.

In addition, the delay in the submission of AFS report was due to the delay in getting full access to Cognos Reports (software to extract reports) and information on the format of presentation of the AFS statement.
AUDIT FINDINGS 9.7 Non Compliance to proper recruitment procedures Vacant posts will normally be advertised in the Fiji Public Service Official Circular (FPSOC) and in the press if considered appropriate.

When an officer applies for any vacancy, whether advertised or not, he should send his application through his Permanent Secretary of Head of Department3.
Before a letter of appointment is issued a candidate selected for appointment must undergo and pass medical examination as being physically and mentally fit by an authorized Medical Officer.

The candidate must also have a satisfactory police record.4 The Office did not obtain police clearance in respect of the newly appointed Project Officers nor were they medically examined.
Refer to Table 9.3 for examples; Table 9.3: Police and Medical Reports not obtained Date recruited 14/12/07 Name of Officers Recruited Viliame Vuiyanuca 3 General Order 205 4 General Order 203 (a), (b) Elections Office Police an Medical Clearance Audit Comments Police and medical clearance not Appointed as administrative officer Section 09: Page 4 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Date recruited Name of Officers Recruited 30/10/08 Reginal Karan 31/10/08 Ashneel Ram 22/12/08 Manjeet Singh 30/12/08 Asenaca Naviriba Police an Medical Clearance Audit Comments obtained Police and medical clearance not obtained Police and medical clearance not obtained Police and medical clearance not obtained Police and medical clearance not obtained project post Assistant Information Technical Officer on project post Appointed as administrative officer project post on Appointed as clerical Officer on project post Appointed as administrative officer project post temporary relieving Also scrutiny of person to post returns revealed that the posts were not advertised.
A letter dated 3/06/08 from the PSC confirmed that these posts were classified as project post but were held against the establish positions.
Refer to Table 9.4 for examples; Table 9.4: Post not advertised Post Title Post Holder Senior administrative officer Viiliame Vuiyanuca Senior administrative officer Sailosi Taniela Administrative officer Clerical Officer Clerical Officer Typist Asenaca Naviriba Adriu Bulisolevu Sangeeta Devi Katalaini Tagicakibau Salary ($) 26,063 26,063 20,335 8,092 8,092 8,092 Non-compliance with the proper recruitment procedures increases the risk of employing unfit persons with criminal records.
Recommendations  A candidate selected for appointment must be physically and mentally fit by an authorized Medical Officer.

 Police clearance should also be obtained for all new recruitments.

 The Office should ensure that the recruitment process is transparent and fair so that the best suitable candidate is selected.

Management Comments The new management would like to acknowledge and admit to the discrepancies highlighted in your findings and recommendations above.
For your information, the recruitment process used by the former Supervisor of Elections was based on behavioral interviews and skit shows which was perhaps outside the normal PSC selection and recruitment process.

The panel comprised of the Supervisor of Elections and one or two members of the Electoral Commission.

In addressing the above discrepancies, the new management will not allow this to be repeated in future.
Elections Office Section 09: Page 5 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ 9.8 Engagement of Dianne Waller Consultancy Services Approval was given to the Supervisor of Elections to appoint a Media Consultant from 29/09/08 to 31/12/08 that carried a salary of only $18,000.5 A Consultant, Dianne Waller was engaged by the Supervisor of Elections in media section of the Office at the rate of $70 per hour from 29/09/09 to 31/12/08.
PSC approval letter specifically stated that the Consultancy fee must not exceed $18,000 for the period.

The Office however exceeded the $18,000 limit and continued to engage the consultant until April 2009 without seeking further approval from the Public Service Commission.

The total consultancy fees of $75,582.50 exceeded the limit by $57,825 or 320%.

At the date of audit6 only $17,780 was paid with $57,802.50 outstanding.
Engaging a consultant without proper approval from Public Service Commission indicates the non adherences to stipulated rules and regulations.

As a result the Office has incurred unauthorized expenditure.

Recommendations  The Office should provide explanations for appointing consultants without obtaining prior approval from the Public Service Commission.

 The Supervisor of Elections should be cautioned.


Management Comments The new management agree entirely to your findings where it must seek approval first from PSC for any recruitment of consultants.

PSC had given approval for the engagement of Ms. Dianne Waller as Media Consultant specifically from 29/09/08 – 30/11/08 only.

However, the former Supervisor of Elections continued to engage Ms. Waller’s services thereafter without seeking fresh approval from PSC for her extension.
Hence, a letter of termination of contract was issued on 04/05/09 on the recommendation of the Deputy Supervisor of Elections which was exactly the reason mentioned above.

9.9 Engagement of the Electoral Reform International Services Consultant Tenders must be called for the procurement of goods services that cost over $20,0007.

A written contract or agreement must be entered into with the approved tenderer for the supply of the goods, services or works tendered.
Legal advice must be sought on the draft contact or agreement unless the Permanent Secretary approves otherwise in writing.8 The Electoral Reform International Services Consultant (ERIS) based in London was engaged in the proposed implementation of the Electronic Voter Registration System in Fiji.
The total cost estimated to implement the Electronic Voter Registration (EVR) System was approximately $17 million with an additional expense of $50,905 required to engage a short term consultant for the familiarization process.

The budget for these projects were rejected by the Public 5 PSC letter reference no.
29/299/25-4 6 Date of audit 20/04/09 7 Finance Instructions 12(4) 8 Supervisor of Elections Finance Manual 2005 2.4.16 Elections Office Section 09: Page 6 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Service Commission, however, the Office went ahead and engaged the ERIS Consultants for the short term consultancy.
Engaging Consultants without prior approval of the Public Service Commission is an indication of an attempt by the Office to circumvent laid down rules and regulations.

Recommendations  The Office must obtain prior approval from the Public Service Commission for the engagement of consultants.

 Action should be taken against the former Supervisor of Elections for engaging consultants without proper authority.

Management Comments Management acknowledges your recommendations.
In future, we will ensure to seek approval first from Public Service Commission.

9.10 Unapproved Payment made to University of Melbourne The Senior Accounts Officer or the officer in charge of Accounts must not certify a payment as correct unless they are satisfied that: it is in accordance with an LPO , indent, contract, invoice or other authorization; i. ii.

there is documentation that the goods, services or works have been received iii.
sufficient uncommitted funds are available for payment of the account; iv.

the account is not fraudulent and has not been previously paid; v. the expenditure account it is charged to is correct.9 Scrutiny of records revealed a payment of $17,802.61 made to University of Melbourne for payment of tuition fees for Mr. Viliame Ledua Vuiyanuca to undergo further studies from 02/03/09 to 31/12/09.
The Supervisor of Elections failed to obtain approval from the Public Service Commission for the officer’s release for studies, however fees were paid on 23/08/08.

Furthermore the officer was not bonded.

In addition the officer did not embark on further studies but continued to work in the Office as at the date of audit in April 2009.

No attempt was made to seek a refund from the University or to recover this from the officer.
This indicates the non compliance to government rules and regulation to safeguard public funds from unnecessary expenditure.

Recommendations  The Elections Office must seek approval from the PSC prior to releasing officers for training or studies both locally and abroad.

 Action should be taken to seek refund from the University or the officer responsible to avoid losses.
9 Finance Manual 2005 – Section 2.8.3 Elections Office Section 09: Page 7 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Management Comments For your information, the new management had taken the necessary actions by writing to the Registrar, University of Melbourne on 24th June 2009 requesting to refund the sum of AUD$14,448.57(equivalent toFJD$17,802.61).
Please note that the University did not utilize the funds since there was no confirmation of Mr. Vuiyanuca’s attendance.

Upon our request for refund, the bankdraft was returned and presented back to Colonial Bank who issued a cheque in the sum of FJD$23,612.41 that is equivalent to AUD$14,448.57.

The funds are currently being receipted back into revenue since it was paid from 2008 allocation.

In future, management will ensure that it seeks PSC approval first for any intended trainings abroad.
9.11 Purchase of Blackberry Mobile Phones The current policy on the procurement of Vodafone depends on the confirmation of funding availability from the Ministry of Finance and National Planning, where this is not specifically provide for in the budget estimates, and the prior approval of the Public Service Commission.10 The audit noted that the Office purchased 10 blackberry mobile phones from Vodafone Fiji Limited worth $7,989.98 without seeking approval from the Public Service Commission.
Refer to Table 9.5 for details: Table 9.5: Names of officers issued with Blackberry phones.

No.

Name Position Ms. Felicity.

Heffernan Mr. Soro Toutou Ms. Diane.

Waller Ms. Ronita Naicker Mr. Viliame.

Vuiyanuca Ms. Salaseini.

Naiduki Mr. Asmeel Ram Mr. Reginald Karan Mr. Avete Tiritabua Mr. Kelevi.
Foiakau Supervisor of Elections Deputy Supervisor of Elections Media Manager Assistant Accounts Officer – Project Senior Electoral Officer – Established Executive Officer – Project Administration Officer (Media Department) Clerical Officer – Project Day - Security – Established Clerical Officer/Reliever – Project Blackberry Number 9958390 9958389 9958384 9958388 9958386 9958387 9958385 9958382 9958383 9958381 In addition an advance rental payment for whole year (2009) was done to Vodafone Co. Ltd totaling $8,394 for the 10 mobile phones listed above.
The above findings indicate misguided decisions made by the management resulting in the misuse of public funds as mobiles phones are extravagant and no regard to economy.

Recommendations  The Supervisor of Elections should be surcharged for not following proper procedures.

 Action should be taken to retrieve the phones from those not entitled to use them and have left the office.

 Controls should be put in place to avoid waste and extravagance of public funds.
10 PSC Circular 08/2005 Elections Office Section 09: Page 8 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Management Comments The new management acknowledges the findings above and agrees to your recommendation.

The former Supervisor of Elections had approved the purchase of ten (10) mobile phones for official use only.
For your information, necessary steps had been taken to retrieve the phones from the relevant officers and are now kept by the Executive Officer.

The phones were registered in the Office stock inventory.

Upon returning all personal calls had been paid was paid by the relevant Officers and receipted.

In future, the new Management will ensure that proper procedures will be followed and controls put in place to avoid wastage and extravagance of public funds.
9.12 Splitting of Local Purchase Orders The Officer authorising a purchase order must ensure that a purchase is not artificially split to bring it within their approval limits.
Any officer who exceeds his or her procurement limit, including splitting of LPO shall be liable for surcharge.11 Officers are delegated authority to procure goods, services and work up to the following limits specified.12 Authority Supervisor of Elections Deputy Supervisor of Elections Assistant Accountant Amount ($) 20,000 10,000 5,000 The Office purchased two photocopying machines by splitting the cost using several Local Purchase Orders thus bypassing the proper procurement procedures.
The LPO’s were authorised by the Supervisor of Elections.
Refer to Table 9.6 for details: Table 9.6: Splitting of Local Purchase Orders Date Supplier Particulars LPO No 18/12/08 18/12/08 18/12/08 18/12/08 21/12/08 21/12/08 23/12/08 Total Office 2000 Ltd Purchase of two photocopier machine 833607 833600 833608 833618 833599 833620 833700 Amount ($) 5,850.00 13,781.25 5,964.00 2,700.00 9,900.00 9,900.00 13,300.00 61,395.25 Levels of authority over local purchase orders exist to ensure adequate controls are exercised during purchases.
Failure to comply with the delegated authority could lead to unauthorised purchases.

Recommendations  Proper procedures for procurement of goods and services should be strictly complied with to ensure prudent management of public funds and prevent abuse.

 The Supervisor of Election should be surcharged for splitting the local purchase orders.
11 Elections Finance Manual 2005, 203 (2.2.2/2.2.3) 12 Elections Finance Manual 2005 2.2.1 Elections Office Section 09: Page 9 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Management Comments In future, the new management will ensure that proper procedures will be followed and controls put in place to avoid splitting of local purchase order.
Elections Office Section 09: Page 10 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Appendix 9.1: Statement of Output Costs for 2008 Description EXPENDITURE Operating Costs Established Staff Unestablished Staff Travel & Communication Maintenance & Operations Purchase of Goods & Services Special Expenditures Total Operating Costs 2008 $ 2007 $ 120,367 11,619 13,226 68,326 23,864 534,316 771,718 157,467 16,301 86,904 50,860 21,740 120,831 454,103 Value Added Tax 69,875 49,969 TOTAL EXPENDITURE 841,593 504,072 Elections Office Section 09: Page 11 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Section 10 Judiciary Role and Responsibilities The Judiciary Department is responsible for enhancing the quality of justice in the community by ensuring an effective and accessible Court System and as the cornerstone of Justice; the Court System will uphold the principles of equality, fairness and access while protecting the dignity and rights of all members of the community.
Table of Contents 10.1 10.2 10.3 10.4 FINANCIAL STATEMENT ........................................................................................................................ 1 Audit Opinion .................................................................................................................. 1 Statement of Receipts and Expenditures....................................................................... 2 Statement of Output Costs ............................................................................................. 3 Appropriation Statement ................................................................................................ 3 AUDIT FINDINGS .................................................................................................................................... 4 10.5 Agency Financial Statement .......................................................................................... 4 Arrears of Revenue ........................................................................................................ 5 10.6 10.7 Maintenance of Operating Trust Fund Account ............................................................. 6 10.8 Maintenance of Trust Fund Account .............................................................................. 7 VAT Reconciliation ......................................................................................................... 9 10.9 10.10 Warrants not Finalised or Executed ............................................................................... 9 10.11 Exhibits not Recorded – Suva Magistrates Court ........................................................ 10 10.12 Court Exhibits – Lautoka Magistrates Court ................................................................ 11 10.13 Undisposed Court Exhibit – Nadi Magistrates Court ................................................... 13 10.14 Non Compliance to Occupational Health and Safety ................................................... 14 Appendix 10.1: Statement of Output Costs for 2008 ............................................................... 16 Appendix 10.2: Vat Reconciliation ........................................................................................... 19 Appendix 10.3: Warrants not Executed ................................................................................... 20 FINANCIAL STATEMENT 10.1 Audit Opinion The audit of the 2008 accounts of the Judicial Department resulted in the issue of a qualified audit report.
The qualifications include the following.

a) The Department has not provided the following contrary to Finance Instructions 82 (1)  Statement of Losses and Judiciary Section 10: Page 1 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________  Trust Account Statement of Receipts and Payments.

The Financial Management Information System shows that the Department as at 31/12/08 has the trust funds totalling $9,820,730 and ($1,032,189) respectively.
b) The amounts in the Statements of Output Costs have been estimated as the facility to allow the measurement and accounting of these costs has yet to be integrated in the Financial Management Information System (FMIS) of government.

It is not possible therefore to determine the accuracy of the expenditures incurred by the Department under output.

c) There is significant variance in the Vat reconciliation when compared to the accounts as at 31/12/08.
10.2 Statement of Receipts and Expenditures The Department collected revenue amounting to $3,463,576 and incurred a total expenditure of $10,989,529 in 2008.
Table 10.1: Statement of Receipts and Expenditures for 2008 Description RECEIPTS State Revenue Court Fines Fees Court Others Total State Revenue Agency Revenue Miscellaneous Revenue from Surveys Total State Revenue 2008 $ 2007 $ 1,926,679 1,116,496 54,766 3,097,941 2,325,323 1,208,928 11,045 3,545,296 361,285 4,350 365,635 130,839 4,757 135,596 TOTAL REVENUE 3,463,576 3,680,892 EXPENDITURE Operating Costs Established Staff Unestablished Staff Travel & Communication Maintenance & Operations Purchase of Goods & Services Operating Grants & Transfers Special Expenditure Total Operating Costs Capital Expenditure Capital Construction Capital Purchases Capital Grants & Transfers Total Capital Expenditure 8,560,553 453,454 557,349 415,799 171,129 0 314,140 10,472,424 8,836,373 334,117 513,539 363,096 142,262 3,400 223,270 10,416,057 206,648 93,897 - 300,545 - - - 0 Value Added Tax 216,560 1,158,132 Judiciary Section 10: Page 2 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Description 2008 $ 2007 $ TOTAL EXPENDITURE 10,989,529 11,574,189 The Department’s revenue declined by $217,316 or 6% from $3,680,892 in 2007 to $3,463,576 in 2008 due to decline in the collection of Court fines and fees.
Similarly the $584,660 or 5% decline in the overall expenditure was the result of decline in the established staff by $275,820 or 3% and VAT expenses by $941,572 or 81% when compared to 2007.

10.3 Statement of Output Costs The Statement of Output Costs consolidates the 11 outputs prescribed in the Budget Estimates, contrary to the requirements of Finance Instructions.

These are detailed in Appendix 10.1.


10.4 Appropriation Statement The Department incurred expenditures totalling $10,989,529 in 2008 against the budget of $12,384,200 resulting in a savings of $1,394,671 or 11%.

Details of expenditures against the budget estimates are provided in Table 10.2.
Table 10.2: Appropriation Statement for 2008 SEG Item Established Staff Unestablished Staff Travel & Communication Maintenance & Operations Purchase Services Operating Transfers Special Expenditure Total Operating Costs Grants of Goods & Capital Expenditure Capital Construction Capital Purchases Capital Grants & Transfers Total Capital Expenditure 13 Value Added Tax Budget Estimate $ 9,713,000 389,200 524,500 466,100 191,200 Changes $ (165,000) 105,000 79,900 (14,000) (2,500) Revised Estimate $ 9,548,000 494,200 604,400 452,100 188,700 Actual Expenditure $ Carry – Over $ 8,560,553 453,454 557,349 415,799 171,129 & 3,400 (3,400) 0 0 349,500 11,636,900 400,000 94,000 - 494,000 253,300 0 0 0 0 - 0 349,500 11,636,900 314,140 10,472,424 400,000 94,000 - 494,000 206,648 93,897 - 300,545 253,300 216,560 Lapsed Appropriation $ 987,447 40,746 47,051 36,301 17,571 0 35,360 1,164,476 193,352 103 - 193,455 36,740 1,394,671 0 0 0 0 0 0 0 0 0 0 - 0 0 0 TOTAL EXPENDITURE 12,384,200 0 12,384,200 10,989,529 The Ministry of Finance approved the transfer of funds totalling $184,900 during the year.
Judiciary Section 10: Page 3 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ AUDIT FINDINGS 10.5 Agency Financial Statement Commencing 2006 financial year, each annual report must include financial statements which are prepared and signed in accordance with these Instructions, audited by the Auditor General, and accompanied by an audit opinion prepared by the Auditor General.1 The Department submitted its Agency Financial Statements for audit on 31/03/09.
Financial statements submitted by the Department were not prepared in accordance with the requirements of Section 82 and Schedule 1 of the Finance Instructions 2005.

The following discrepancies were noted:  The 2008 Budget prescribed eleven outputs; however, the Department only submitted for audit seven statements which were prepared according to the budget activities.
Audit could not substantiate the balances reflected in the Statements of Output Costs as the facility to allow the measurement and accounting of these costs has yet to be integrated in the Financial Management Information System (FMIS) of government.

 The Department failed to prepare and submit the Statement of Losses and Trust Fund Statement of Receipts and Payments.
The Financial Management Information System shows that the Department as at 31/12/08 has two trust funds totalling $9,820,730 and ($1,032,189) respectively.

Non–compliance with finance instructions in the preparation of the financial statements has restricted the scope of the audit.

Recommendation The Department should ensure that the requirements of the Finance Instructions 82 are strictly followed in the preparation of the Agency Financial Statements.
Management Comments Thank you very much for the comments raised, we will ensure that the requirement of the Finance Instruction 82 are strictly followed in the preparation of the Agency Financial Statements.

Department made appointment of a Master, Judges and Magistrates and this has reduction in the length of time from case initiation to case finalisation.

Our statistician is in the process to complete the report which will be in our annual report 2008.
I agree Department has failed to prepare and submit the statement of losses, this due to no Board of Survey has been done for year 2007 and 2008.

As for Trust Fund Statement of Receipts and Payment, our reconciliation has a backlog and we are in the process to update.
1 Finance Instructions 2005 –Section 81(2) Judiciary Section 10: Page 4 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ 10.6 Arrears of Revenue The Credit Officer must promptly follow up accounts that fall due.
If recovery is unsuccessful after one month, the following actions shall be taken: 1. a demand notice for payment shall be sent to the debtor after his/her debt has been overdue for more than one month; 2. if the account still remains unpaid after the first demand notice was issued, a final notice shall be issued demanding payment within 14 days.2 The Department collects revenue from Court fines, Court fees, library fees and costs awarded to the State.
The Magistrates Courts also deal with Traffic Infringement Notice cases handed over to the Courts by the municipalities, Land Transport Authority (LTA) and Police Force.

Warrants are issued for non-payment of Court fines or non-appearance to Court hearings and the executions of warrants are undertaken by the Fiji Police Force.

As at 31/12/08 the arrears of revenue for the Department totalled $10,574,640.
The arrears of revenue have increased steadily over the years which indicate that the current recovery procedures were not effective.
Refer to the following table for details: Table 10.3: Breakdown details of Arrears of Revenue Period 3 Months 6 Months 9 Months 1 Year & Over 2 – 5 Years Over 5 Years TOTAL Court Fines ($) 39,315 19,928 91,570 491,200 2,973,235 4,409,260 8,024,508 Court Fees ($) 5,202 4,671 12,414 66,429 607,516 1,600,050 2,296,282 Cost to State ($) Vat ($) 79 342 140 16,975 30,896 11,835 60,267 488 5,252 8,022 20,891 42,415 116,515 193,583 Total Arrears ($) 45,084 30,193 112,146 595,495 3,654,062 6,137,660 10,574,640 The Police Department, is responsible for the enforcement of warrants, however they do not have the resources to undertake this role resulting in substantial arrears of revenue.
Delay in the collection of revenue increases the likelihood of write-offs thus depriving the government of potential revenue.

Recommendations  The Department should regularly follow up with the Fiji Police Force on the status of warrants issued.

 A thorough review of the arrears should be undertaken and irrecoverable arrears should be considered for write-offs.

 The Department should strongly adhere to standing procedures pertaining to collection of Court fees and fines.
2 Judicial Department Finance Manual 2005 Section 9.2.1 Judiciary Section 10: Page 5 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Management Comments The Department has noted the concerns raised by Audit Team whereby the Arrears of Revenue are increasing year by year.

But as mentioned earlier it is the Police Department who are responsible for the collection of debts and due to non availability of resources they are unable to under take this task.
The arrears of revenue for the Judicial Department have not arisen out of extension of normal credit facilities but rather, out of it statutory functions.

It should also be noted that all traffic matters are brought before the Court by the LTA and Police Department for the Court to deliver judgment and appropriate sentence, one of which amongst others, is imposition of fines.
The appropriate Court Registry is only required to issue timely warrants in cases where payment has been defaulted and transmits the same to Police Department for necessary execution and collection of revenue in form of fines, Court Fees and Value added tax.

Department has set up Fine Enforcement Committee, the purpose it to collect outstanding debt and identify steps we can take to collect the arrears of revenue.
The committee is made up of as follows:  Chief Magistrate  Director Police Prosecution  Assistant Superintendent of Police  LTA – Legal Officers  Judicial Department Staff Police has stated its operation for execution of warrants.

Director Police Prosecution has informed the Department there is enough manpower but only the vehicle is needed.

Department submitted request to Finance but it has not been approved for purchase of two vehicles.
As for unexecuted warrants above five (5) years are with Fine Enforcement Unit for further discussion with LTA before write – offs could be considered.

Only Police has the authority for execution of warrants.
10.7 Maintenance of Operating Trust Fund Account Within 5 days after the end of each month, the Assistant Accounts Officer (ledgers) shall prepare a trust reconciliation to reconcile trust account balances to the ledger total and the trust bank account.3 The Department’s operating trust fund account balance as at 31/12/08 did not reconcile with the Financial Management Information System which was due to non preparation of monthly reconciliation.
Refer to the table below for details: Table 10.4: Variance between the Department’s records and FMIS Details FMIS Figure Department’s Record Total Balances ($) (1,032,188.82) 105,643.67 (926,545.15) The Operating Trust Fund Account should have a credit balance; however audit noted that balances were overdrawn as at 31/12/08.

The details of the overdrawn account are as follows: 3 Finance Manual.
Section 15.4.1 Judiciary Section 10: Page 6 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Table 10.5: Overdrawn Trust Fund Account balance Allocation Description 11110111999864101 Maintenance 11110292011864102 Sundries Department Records ($) FMIS ($) Variance ($) Remarks 0 0 (508,448.52) (632,172.88) (508,448.52) The balances have been carried forward (632,172.88) from 2006.

The overdrawn balances have been carried over from previous years.
In the absence of the proper records and significant overdrawn balances it is difficult to authenticate the accuracy of the trust account stated in the FMIS.

Recommendations  The Department should ensure that monthly reconciliations are carried out properly and accurately.

 The Department should ensure that transactions posted to the general ledger (FMIS) are supported with documentary evidences that should be produced during audit.
 Supervisory checks in the Accounts Sections should be strengthened and improved.

 The Department should carry out a thorough review of the operating trust fund accounts for which balances have been carried forward from previous years without any documents available at the Department to substantiate the balances.
Management Comments Whilst we appreciate the concerns raised by the Audit Team in respect of Trust Fund reconciliation which are very behind, we would like to advise that as from November 2008 we prepare monthly reconciliations, with manual Ledger and (FMIS) print out and whatever errors if any detected are adjusted accordingly as recommended by the Audit.

864101 Maintenance 864102 Sundries $508,448.52 under process to verify.

$632,172.88 under process to verify.


The officers carrying out the reconciliations must have failed to verify source documents thus payment done are not reflected and debits still appearing in the account.

The credits i.e.

Receipts must have been posted to a different Trust Account which will only picked once these reconciliations are carried out and journalised accordingly.

10.8 Maintenance of Trust Fund Account Each month the Trust accounts shall be balanced and reconciled with trust bank account.
The names and balances of each account shall be listed and the reconciliation shall be signed by the responsible officer.

Unreonciled items should be investigated and resolved promptly.4 The Department maintains 3 Trust Fund accounts namely Suitor’s Trust, Maintenance Trust and Sundries Trust accounts.

The records of Trust accounts from all the district registries are maintained at Headquarters for proper accountability.
Suitor’s Trust Fund account comprises monies pending from Suva, Lautoka and Labasa High Court cases on FNPF, Public Trustee and substantial amounts of Civil and Criminal cases.

As at 31/12/08, the Suitor’s Trust Fund account had a balance of $6,659,086.29.
4 Finance instruction Section 69 (3) Judiciary Section 10: Page 7 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Maintenance Trust Account comprises monies from maintenance payments by defendants to their spouses based on the judgements passed by the Family Law Court.

The Maintenance Trust Account reconciliations have only been updated to July 1999.

The balance as at 31/12/08 was $2,870,596.58.


Sundries Trust Fund account comprises monies from pending Civil and Criminal cases awaiting Court judgements.

No reconciliations have been prepared since November 1999 and the balance as at 31/12/08 amounted to $291,046.73.

The delay in updating the reconciliations of the trust fund accounts has been reported in the past audit reports but no action was taken by the Department.
The substantial amount of funds kept in the Trust by the Department warrant regular and consistent preparation of monthly reconciliations as it is an important control measure that ensures accountability of funds.

As reconciliations have not been regularly prepared and checked, the risk of fraud and misappropriation of funds is high.

Recommendations  Trust Fund reconciliations should be prepared on a monthly basis to ensure that funds held in trust are properly accounted for.
 Supervisory control in the Accounts Section should be improved to ensure that the provisions of the Finance Manual are complied with at all times.

 The allocation of resources to update the records and reconciliations of the various trust funds should be seriously considered by the Department and other relevant government agencies.

Management Comments The reconciliation of Trust Account relating to Maintenance and Court Sundries had a backlog of (12) years under the manual system.
In order to clear the backlog within reasonable time, the department decided to computerize the reconciliation process by purchasing an accounting package from a private company.

The idea was floated to the Permanent Secretary for Finance who recommended that the department approach the Information Technology and Computing Services (ITC) to undertake the project.

On 3/01/02 the software was installed, for test runs but it was discovered that the system had not been perfected and required further changes.
Information Technology and Computing Services personnel advised the department to just continue with the data entry until he is able to rectify the problem.

Trust Fund office was closed by Ministry of Labour as it was non OHS compliance.

Last year an office has been allocated, after cabling was done computers were installed it was noted that the system could not produce reconciliation nor data entry and also no reports could be retrieved.
Department had a meeting with Information Technology and Computing Services on 8/5/09, we have provided them with Trust Funds Manual to write a software .Whilst we appreciate the concerns raised by the Audit Team in respect of Trust Fund reconciliation which are very behind we would like to advise that as from November 2008 we prepare reconciliation manually.

Suitors Trust Fund account reconciliation is up to date.
We will try our best to prepare monthly reconciliations and bring it up to date with whatever resources available as we do understand the importance of the reconciliations.
Judiciary Section 10: Page 8 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ 10.9 VAT Reconciliation Subject to the provision of the Vat Decree 1991, the tax shall be charged in accordance with the provisions of this Decree at the rate of twelve and a half percent on the supply (but not including an exempt supply) in Fiji of goods and services, by a registered person in the course or furtherance of a taxable activity carried on by that person, by reference to the value of that supply.5 A review of the VAT Returns and supporting documents and VAT reconciliations carried out during the audit revealed an un-reconciled balance of $29,499 between the taxable supplies in the VAT Return and the total income/expenditure in the Statement of Receipts and Expenditure.
Refer Appendix 10.2 for details: Recommendations  The Department should ensure that postings are done on a timely manner to the General Ledger to avoid missing out any transactions.

 The monthly Vat reconciliations should be prepared to ensure that correct Vat payment are made to relevant authorities.

 Supervisory checks on the preparation of VAT Returns should be improved to ensure that balances reflected in the VAT Returns reconcile with the General Ledger balances.
Management Comments Comments not received.

10.10 Warrants not Finalised or Executed Criminal and traffic case offenders may be ordered by the Courts to pay fines within a specified time or if defaulted serve imprisonment for a definite term.

A file is created for each offender to maintain the proceedings of the Courts.

Any payment of fine by the offender is also recorded in these files.

Upon the failure to pay the fines, a warrant is issued to the offender to be brought for imprisonment.
Audit noted numerous cases where the Department did not take any action in collecting Court fines from offenders who failed to pay within the period allocated by the Courts.

Refer to Appendix 10.3 for examples.

In addition, audit also sighted a number of warrants which were not finalized and still pending for the following reasons:  Warrant numbers yet to be allocated.

 Endorsements from Magistrates are still pending.

The pending warrants, which are dated as far back as 2001, are not securely stored.
Refer to the Table below for details: 5 Value Added Tax Decree 1991 4th edition revised to 30/04/04 – section 15 (1) Judiciary Section 10: Page 9 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Table 10.6: Inadequate storage of pending warrants Warrant Year Location cited by Audit 2001 2002 2003 2004 On a table in the corridor leading up to the Magistrates rooms.

Refer to photograph 1.

In cabinets in the Criminal registry.


Refer to the photograph 2 In the cabinets In the cabinets Photograph 1: warrants on the table Photograph 2: warrants in the cabinet The Department’s inaction to collect Court fines or bring offenders to Court by issuing warrants not only deprives Government substantial amounts of revenue but also allows the offenders to be set free without being punished.
In addition, the failure to have these warrants finalized and ready to be executed would result in the offenders for whom these warrants were issued default or not be located due to lapse of time.

Recommendations  It is recommended that the Department take the necessary actions to finalise pending warrants.

 The Department should work closely with the Police Department to collect the substantial amount of fines from offenders who have defaulted in their payments.
Management Comments Due to lack of man power the Police stopped executing warrants of in default of payment some year back.

They were not accepting any in default warrant for execution.

This caused us to stop issuing warrants till December last year when the Police Warrant Section was established to handle the pending warrants.
The Fine Enforcement Committee comprising of Police, LTA and Judicial Staff, chaired by the Chief Magistrate is in place to find ways and means of expediting the execution warrants.

The Court Registry Staff are issuing warrants on unpaid Fines and Police Warrant Section from the month of December, 08 to May 09, through their operations have collected revenue to the total of $24,727.18.
10.11 Exhibits not Recorded – Suva Magistrates Court Exhibit writer shall maintain exhibit files in respect of all exhibits held in their area.6 6 Procedures for Seizure, Management and Disposal of Exhibits Section 4.4 Judiciary Section 10: Page 10 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ The audit noted that some exhibits at the Suva Magistrates Court were maintained in the Chief Registrar’s safe and were not recorded in the Exhibit Register.
Refer to the Table below for examples: Table 10.7: Improper storage of exhibits Case Number Description of Exhibits 534/05 576/07 41/82 8/80 974/00 81/86 1931/01 $5,194.67 cash 90×$15 unscratched recharge cards 60×$25 unscratched recharge cards 38×$10 unscratched telecards 20×$5 unscratched telecards 130×$3 unscratched telecards       $39.09 cash $3.64       Phone cards  Business cards  2 gold stud  1 gold ring  1 gold pendent $234.51 coins 2 gold bangle 1 gold chain 1 gold pendent I hair bend Ladies hand purse Failure to record exhibits in the Exhibit Register increases the risk of exhibits being misplaced or stolen.
Recommendations  All exhibits kept in the Chief Register’s safe should be recorded in the Exhibit Register.

 Regular inspections should be carried out to ensure that all exhibits under the custody of the Courts are safeguarded from theft, misappropriation or from being tampered.

Management Comments The exhibits mentioned in the Audit Report are for old cases and are not recorded in the current register which was checked by the audit team.
All in coming exhibits are recorded, checked by the Office-in-Charge Criminal before they are stored in the exhibit room and/or the safe in the office of the Chief Registrar.

Each Court has it own Exhibit register which will have records of exhibits tendered.

Nausori Court Exhibits can only be entered in the Suva Register if and when the case is transferred.
10.12 Court Exhibits – Lautoka Magistrates Court The Officer-in-charge or the Station Officer is responsible for the custody, care, control and security of all exhibits, and particularly monies and jewelleries.7 7 Procedures for Seizure, Management & Disposal of Exhibits.
Section 5.2.6 Judiciary Section 10: Page 11 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Our review of Court exhibits at the Lautoka Magistrates Courts indicated that some exhibits were missing from the Exhibit room.

Explanations from the Officer in-charge, Ms Rani, revealed that the exhibits were stolen from their office after it was broken into in 2003 and 2007.

Audit has yet to receive a police report relating to the robberies.
Refer to table below for examples: Table 10.8: Missing Exhibits Case No.

Items missing from the Exhibit room Reference No.
07/05/99 22/01/01 13/08/07 04/07/07 10/10/97 13/06/03 484/97 3/01 702/06 285/05 668/07 104/03 28/06/04 State vs Semisi Tuinanuya  Silver band Wrist watch  2*$2 note in Fiji currency  1 pair gold earning  2 only gold rings  Ladies wrist watch with black band  1 silver ring 1 damaged wrist watch 1 Magnavox DVD player 1 IBM laptop – black  Cash register  I brown hand bag  2 car speakers  2 CDs Hindi and English Black and green bag containing:  1 JVC camera with charger  2 – Nokia mobile phones 27/11/06 27/06 2 ton red Hydraulic Jack Audit also found cash exhibits kept in a filing cabinet in an officer’s room.
Court Officer Lorani Rani advised that they had a safe but it was broken into during the robberies in 2003 and 2007.

Prudence requires that all cash maintained within the Department should be kept under lock and key in a safe.

The risk of cash exhibits being stolen is high if there is no proper storage such as a safe for keeping valuable exhibits.
Due to the Department’s failure to perform its obligations in protecting and preserving seized property, the Criminal and Civil proceedings may be prejudiced and the public may be disadvantaged by the loss of their property.

Recommendations  The Department should ensure that all Courts exhibits are securely maintained by providing  space for the proper storage of exhibits.

It is the responsibility of the Department to ensure that valuable exhibits are securely locked in a safe.
Management Comments We agree with your comment of the importance that all Exhibits and Cash shall be kept in a locked and secure exhibit room after being recorded.

Revenue Collected after hours by our Lautoka Magistrate Court are kept overnight at the High Court Stores for Bank lodgement the following day.
Judiciary Section 10: Page 12 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ We are currently in the process of repairing the broken safe which was damaged during the robberies in 2003 and 2007.

According to our officer at Lautoka, both robberies were reported to the Police for investigation.

Appropriate police investigations were carried out by the Police.

But unfortunately a Police Report on this break in has not been forthcoming.
We are continually liaising with the police on this issue.

10.13 Undisposed Court Exhibit – Nadi Magistrates Court The procedures of disposal of exhibits outlined in the Force Standing Orders stipulates that upon completion of the case in a Court of law the prosecuting officer shall request the magistrate or judge to make an order for the disposal of exhibits.
The order shall be effective upon the completion of 28 days appeal period.8 Physical verification of exhibits maintained at the Nadi Magistrates Court revealed that items from closed cases have yet to be returned to the owners or destroyed.

Refer to the Table below for examples: Table 10.9: Details of undisposed exhibits Court File No.
Exhibits Remarks 1400/07 1069/07 1738/07 525/08 385/04 883/01 655/00 837/04 8 rolls of dried leaves Brown Bag Nokia mobile phone Red Purse 1 pinch Bar 1 Nokia Phone 1 silver bet 1*375 ml Gordons dry gin 1 long cane knife 2 speakers Case closed – Accused handed 6 months imprisonment Case closed - accused discharge Accused discharged - case closed Case closed Accused 1 - 3 years Imprisonment Accused 2 - 2 years imprisonment Case disposed Case disposed Case closed – accused handed 9 months imprisonment Case disposed Exhibits from the disposed cases occupy a lot of space in the exhibit room.
Delays in returning these items increase the risk of them being stolen.

Recommendation Exhibits from the closed cases should be returned to lawful owner or destroyed.

Management Comments We agree with your finding that Court Exhibits for cases that has been closed are still been kept in our custody at the Nadi Magistrate Courts.
The procedure for its disposal are for the prosecutor to come with the police investigating officer and to apply for a Court Order for the return of the Exhibit to its rightful owner.

8 Procedures for Seizure, Management and Disposal of Exhibits Section 5.3.1 Judiciary Section 10: Page 13 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ We can only act on the authority of a Court Order.
We have accordingly advise our staff at the Nadi Magistrate Court to follow this matter up with the relevant authority in Nadi so that this outstanding issue could be resolved without further delay.

10.14 Non Compliance to Occupational Health and Safety Under the Health and Safety at Work Act 1996 the workplace environment shall be free from hazardous substances.
Every Employer shall ensure the health and safety at work of all his or her workers.9 When handling exhibits staff should be provided with appropriate safety clothing and equipment.

Audit noted instances where the Department did not comply with the OHS requirements.

Refer to the Table below for examples: Table 10.10 – Non Compliance OHS Location Suva Magistrate Court – Exhibit Room Government Building Problems The room where the exhibits are stored is in a mess.
Refer to the pictures below for illustrations.

All exhibits are kept in one room including inflammable items such gas cylinders and alcohol.

Audit also noted no protective clothing and safety equipments are provided to officers looking after the exhibits.

The room has ventilation problems with no windows or fans to circulate air and the room carries a filthy smell with exhibits dumped everywhere, which makes audit difficult to properly verify items kept in the room.
The Department is located at the Government Building, which did not have directions for emergency exits for officers if a disaster strikes.

The officer in-charge of asset management explained that the fire distinguishers at Government Building have not been tested for ages and in case of a fire at the building these distinguishers will be of no use.

Figure 1: Inflamable items maintained with other exhibits.
Figure 2: The exhibit room is in disarray It is the responsibility of the Department to equip Exhibit Writers with proper equipment and provide adequate and proper storage space for all exhibits under its control to ensure that the integrity of the exhibits as evidence in Court proceedings, other judicial proceeding or for further investigation are not jeopardised.
9 Section 9(1) OHS Act 1996 Judiciary Section 10: Page 14 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Non-compliance with the Health and Safety regulations exposes officers against threat of accident, health and wellbeing that could result in greater compensation cost.
Recommendations  The Department should ensure that the provisions of the Health and Safety Act are complied with to ensure the safety and wellbeing of employees and to safeguard Government against litigation.

 The Department should ensure that the Officer(s) responsible for the exhibits is supplied with protective clothing and equipment while handling the Court exhibits.

Management Comments The exhibit room is located at the basement of the Old Wing of the Government Building along side the Albert Park.
This wing used to be occupied by the Ministry of Finance before they were shifted to Ro Lalabalavu House.

The Department is currently using the space which has 3 compartments as a Filing Room.

This inner most compartment has a strong room currently used as our Exhibit Store Room.

The hazard as identified in your report is real and in existence.

We are currently in the process of procuring protective clothing for our staff to use when handling exhibit in compliance with OHS requirements.
One of our major problem is the lack of space and this would be resolved as and when the Ministry of Land is relocated to another Building Complex which will enable the Department to relocate the Exhibit Room to a more spacious and secure room.

Moreover we agree with you that the Fire Distinguishers at Government Building have not been tested for a number of years.

We are liaising and have written to PWD Maintenance Section to test and service the Fire Distinguisher as soon as practically possible.
Judiciary Section 10: Page 15 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Appendix 10.1: Statement of Output Costs for 2008 General Administration Description EXPENDITURE Operating Costs Established Staff Unestablished Staff Travel & Communication Maintenance & Operations Purchase of Goods & Services Operating Grants & Transfers Special Expenditure Total Operating Costs Capital Expenditure Capital Construction Capital Purchases Capital Grants & Transfers Total Capital Expenditure 2008 $ 2007 $ 685,528 58,852 26,118 171,491 53,956 - 112,745 1,108,690 125,547 93,897 - 219,444 900,990 51,116 20,242 112,780 38,988 3,400 67,406 1,194,922 - - - - Value Added Tax 73,081 140,434 TOTAL EXPENDITURE 1,401,215 1,335,356 High Court Description EXPENDITURE Operating Costs Established Staff Unestablished Staff Travel & Communication Maintenance & Operations Purchase of Goods & Services Operating Grants & Transfers Special Expenditures Total Operating Costs Capital Expenditure Capital Construction Capital Purchases Capital Grants & Transfers Total Capital Expenditure 2008 $ 2007 $ 2,825,742 71,462 106,971 61,427 97,578 - - 3,163,180 2,377,830 84,134 122,304 48,226 79,927 - - 2,712,421 - - - - - - - - Value Added Tax 32,197 297,816 TOTAL EXPENDITURE 3,195,377 3,010,237 Judiciary Section 10: Page 16 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Magistrates Courts Description EXPENDITURE Operating Costs Established Staff
 Unestablished Staff Travel & Communication Maintenance & Operations Purchase of Goods & Services Operating Grants & Transfers Special Expenditure Total Operating Costs Capital Expenditure Capital Construction Capital Purchases Capital Grants & Transfers Total Capital Expenditure 2008 $ 2007 $ 3,677,485 242,326 166,927 44,902 19,595 - - 4,151,235 3,853,207 122,273 205,684 35,603 18,027 - - 4,234,794 - - - - - - - - Value Added Tax 29,505 485,465 TOTAL EXPENDITURE 4,180,740 4,720,259 Fiji Court of Appeal
 Description EXPENDITURE Operating Costs Established Staff Unestablished Staff Travel & Communication Maintenance & Operations Purchase of Goods & Services Operating Grants & Transfers Special Expenditure Total Operating Costs Capital Expenditure Capital Construction Capital Purchases Capital Grants & Transfers Total Capital Expenditure 2008 $ 2007 $ 211,854 20,606 115,684 13,352 - - - 361,496 - - - 382,141 19,506 67,112 10,200 5,319 - - 484,278 - - - - Value Added Tax 15,339 47,586 TOTAL EXPENDITURE 376,835 531,864 Judiciary Section 10: Page 17 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Small Claims Tribunal Description EXPENDITURE Operating Costs Established Staff Unestablished Staff Travel & Communication Maintenance & Operations Purchases of Goods & Services Operating Grants & Transfers Special Expenditure Total Operating Costs Capital Expenditure Capital Construction Capital Purchases Capital Grants & Transfers Total Capital Expenditure 2008 $ 2007 $ 226,997 - 17,689 16,883 - - 159,895 421,464 - - - - 275,906 18,089 19,255 15,761 - - 155,864 484,875 - - - - Value Added Tax 21,645 42,954 TOTAL EXPENDITURE 443,109 527,829 Supreme Court Description EXPENDITURE Operating Costs Established Staff Unestablished Staff Travel & Communication Maintenance & Operations Purchase of Goods & Services Operating Grants & Transfers Special Expenditure Total Operating Costs Capital Expenditure Capital Construction Capital
 Purchases Capital Grants & Transfers Total Capital Expenditure 2008 $ 2007 $ - - 55,759 3,418 - - 41,500 100,677 - - - - - - 18,252 2,141 - - - 20,393 - - - - Value Added Tax 11,609 1,865 TOTAL EXPENDITURE 112,286 22,258 Judiciary Section 10: Page 18 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Family Law Courts Description EXPENDITURE Operating Costs Established Staff Unestablished Staff Travel & Communication Maintenance & Operations Purchase of Goods &
 Services Operating Grants & Transfers Special Expenditure Total Operating Costs Capital Expenditure Capital Construction Capital Purchases Capital Grants & Transfers Total Capital Expenditure 2008 $ 2007 $ 932,947 60,208 68,201 104,326 - - - 1,165,682 1,046,299 39,000 60,691 138,384 - - - 1,284,374 81,101 - - 81,101 - - - - Value Added Tax 33,184 142,012 TOTAL EXPENDITURE 1,279,967 1,426,386 Appendix 10.2: Vat Reconciliation Total income/expenditure as per Statement of Receipts and Expenditure Less: Expenditure not subject to Vat Less: Total taxable supplies as per VAT Returns Un-reconciled variance ($) 10,989,529 9,014,007 1,975,522 1,946,023 29,499 Variances between actual VAT payments for 2008 and the balances disclosed in the general ledger (FMIS).
VAT payments (VAT payments to FIRCA and VAT Input) as per Statement of Receipts and Expenditure VAT payments (VAT payments to FIRCA and VAT Input) as per VAT Returns for 2008 Un-reconciled variance ($) 237,486 216,225 21,261 Judiciary Section 10: Page 19 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Appendix 10.3: Warrants not Executed Year 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Total Warrant Cases Pending 780 1194 635 585 615 879 814 1400 780 Not Provided 229 906 493 1832 1445 3013 Not Provided Not Provided 14312 4039 506 75 Not Provided 63 49 383 258 35,285 Judiciary Section 10: Page 20 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Section 11 Legislature Department Role and Responsibilities The Constitution vests the Parliament of the Republic of the Fiji Islands with the legislative power to enact laws.
The Parliament consists of His Excellency the President, the House of Representatives and the Senate.

The core business of the Legislature is the Administration of the Parliament of the Fiji Islands, its committees and all formal proceedings of the two Houses, in the effective coordination of the role of the Houses of Parliament culminating in the presentation of Bills to His Excellency the President for his assent.
The functions of the Legislature Department are programmed as follows: General Administration  Provide briefings, procedural advice, administrative, research services and information to presiding officers and Members of Parliament.

 Strengthen and maintain relations at all levels with regional and international parliamentary organisations and associations and provide the necessary secretariat and hospitality services.

 Support services to the Government members.


 Coordinate Parliamentary ceremonial events and provide necessary protocol services.

 Organise induction and other procedural seminars for Members of Parliament.

 Strengthen human resources capacity.

 Promote public awareness and public relations with the community and the media on the process and proceedings of parliament.

House of Representatives  Support services to the House of Representatives members.
 Allocate annual contributions to Parliamentary organisations and associations to which Fiji is affiliated.

Senate  Provide support services to the Senators.

Opposition Office  Provide support services to the Opposition members.
Table of Content 11.1 11.2 11.3 11.4 11.5 FINANCIAL STATEMENT ........................................................................................................................ 2 Audit Opinion .................................................................................................................. 2 Statement of Receipts and Expenditures....................................................................... 2 Statement of Output Costs ............................................................................................. 3 Appropriation Statement ................................................................................................ 3 Statement of Losses ...................................................................................................... 4 AUDIT FINDINGS .................................................................................................................................... 4 11.6 Financial Statements...................................................................................................... 4 11.7 FNPF Reconciliation ...................................................................................................... 4 VAT Reconciliation ......................................................................................................... 5 11.8 11.9 Deductions of Salary for Late Arrivals to Work .............................................................. 6 Section 11: Page 1 Legislature Department REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ 11.10 Recoveries of Consolidated Allowance.......................................................................... 7 11.11 Outstanding Accountable Advance ................................................................................ 8 Appendix 11.1: Statement of Output Costs.............................................................................. 10 Appendix 11.2: FNPF Reconciliation ....................................................................................... 10 Appendix 11.3: VAT Reconciliation .......................................................................................... 11 FINANCIAL STATEMENT 11.1 Audit Opinion The audit of the 2008 accounts of the Legislature Department resulted in the issue of a qualified audit report.
The qualifications are as follows: a) b) The financial statements were incomplete as the Statement of Losses and Trust Account Statement of Receipts and Payments were not submitted for audit, contrary to Finance Instructions 82.

The Financial Management Information System (FMIS) shows that the Department as at 31/12/08 has operating trust funds totalling $177,079.

The Department has consolidated its expenditures into one Statement of Output Costs, whereas the Budget Estimates 2008 prescribes four outputs.
The amounts reflected in the Statement of Output Costs have been estimated as the facility to allow the measurement and accounting of these costs has yet to be integrated by FMIS.

It is not possible therefore to express an opinion on the accuracy of the expenditures incurred by the Department under each output.

c) There is significant variance in the VAT and FNPF Reconciliations totalling $21,310 and $193,242 respectively when compared to the accounts as at 31/12/08.
11.2 Statement of Receipts and Expenditures The Department incurred total expenditures of $948,086 in 2008 compared to $1,761,387 in 2007.
Refer to Table 11.1 for details: Table 11.1: Statement of Receipts and Expenditures for 2008 Description RECEIPTS State Revenue Agency Revenue TOTAL REVENUE EXPENDITURE Operating Costs 2008 $ 2007 $ 280 13,168 371 27,394 13,448 27,765 Legislature Department Section 11: Page 2 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Description Established Staff Government Wage Earners Travel & Communications Maintenance & Operations Purchase of Goods & Services Operating Grants & Transfers Special Expenditure Total Operating Cost Capital Expenditure Capital Purchase Total Capital Expenditure 2008 $ 452,909 220,095 63,342 172,752 29,466 0 0 938,564 2007 $ 902,956 295,822 92,161 254,141 33,160 0 15,021 1,593,261 0 0 0 0 Value Added Tax 9,522 168,126 TOTAL EXPENDITURE 948,086 1,761,387 Revenue declined in 2008 by $14,317 or 52% due to reduction in the number of stale cheques written back to revenue compared to 2007.
Expenditure also declined in 2008 by $813,301 or 46% due to the closure of Parliament and the redeployment of most staffs to other Ministries and Departments.

11.3 Statement of Output Costs The Statement of Output Costs consolidates the 4 outputs prescribed in the Budget Estimates.

These are detailed in Appendix 11.1.

11.4 Appropriation Statement The Department incurred expenditures totalling $948,086 in 2008 against the budget of $1,019,800 resulting in a saving of $71,714 or 7%.
Details of expenditures against the budget estimates are provided in Table 11.2.
Table 11.2: Appropriation Statement for 2008 SEG Item Established Staff Unestablished Staff Travel & Communication Maintenance & Operations Purchase of Goods & Services Budget Estimate $ 453,000 256,000 32,000 228,500 Changes $ 0 (30,000) 45,000 (12,000) Revised Estimate $ 453,000 226,700 77,000 216,500 Actual Expenditure $ 452,909 220,095 63,342 172,752 Total Operating Costs 40,000 1,010,200 (3,000) 0 37,000 1,010,200 29,466 938,564 13 Value Added Tax 9,600 TOTAL EXPENDITURE 1,019,800 0 0 9,600 9,522 1,019,800 948,086 Carry – Over $ Lapsed Appropriation $ 0 0 0 0 0 0 0 0 91 6,605 13,658 43,748 7,534 71,636 78 71,714 Legislature Department Section 11: Page 3 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ 11.5 Statement of Losses The Department did not report any loss of money or assets in 2008.
AUDIT FINDINGS 11.6 Financial Statements Commencing 2006 financial year, each annual report must include financial statements which have been prepared and signed in accordance with these Instructions, audited by the Auditor General, and accompanied by an audit opinion prepared by the Auditor General.1 The draft financial statements must be submitted to the Auditor General by 31 March in the following year, or within such other time as agreed to with the Auditor General.2 The Legislature submitted its Agency Financial Statements for audit on 30/03/09 however it was not prepared in accordance with the requirements of Section 82 and Schedule 1 of the Finance Instructions 2005.
The following discrepancies were noted:  The department failed to prepare and submit with its Financial Statements a Statement of Losses and a Trust Fund Account Statement of Receipts and Payments.

 The department has consolidated its expenditures into one Statement of Output Costs, whereas the Budget Estimates 2008 prescribes four outputs.
The amounts reflected in the Statement of Output Costs have been estimated as the facility to allow the measurement and accounting of these costs has yet to be integrated in the FMIS.

Recommendation The Department should ensure that the requirements of the Finance Instructions are complied with regards to the preparation of the Agency Financial Statements.

Management Comments We are now submitting the Statement of Losses and a Trust Fund Account Statement of Receipts and Payments.
Expenditures were consolidated into one Statement of Output Costs as per the template provided by Ministry of Finance.
11.7 FNPF Reconciliation Every employer shall pay to the Fund in respect of each of his employees, in every month during which such employee is employed by him and in the month following the termination of such employment, a contribution calculated upon the amount of wages payable to such employee by such employer for the preceding month at the appropriate rates.3 1 Finance Instructions 2005 – 81 (2) 2 Finance Instructions 2005 – 81 (3) 3 Chapter 219 – Fiji National Provident Fund – Section 13 (1) Legislature Department Section 11: Page 4 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ The current rate of contribution (effective 1st July, 1999) is 16 cents on each dollar earned, with the employer and employee each contributing 8 cents each.
Contributions that are paid after the due date carry a surcharge at a rate of 2%.

Failure to pay contributions on the due date is a serious and punishable offence.

4 A reconciliation of FNPF contributions against salaries and wages reported in the Financial Statements revealed that FNPF was overpaid for salaries in the sum of $193,242.

Refer to Appendix 11.2 for details.

Recommendation The Department should review its FNPF records and reconciliations and provide explanations for the variance.
Management Comments The total funds provided in the 2008 Budget for SEG 1 was not sufficient accommodate the salaries of all staff based at Parliament.

Ministry of Finance had issued Departmental Warrant Number 108/2008 for a total sum of $188,895.33 including FNPF on 10/09/2008 for the shortfall.

Following the receipt of the Departmental Warrant, all amounts over and above the allocated Budget for SEG 1were cleared through the Inter-Departmental Clearance Account of Ministry of Finance.
All charges were cleared from 112101 12101 010101 allocation through the journal vouchers and not the other allocations of the SEG.

We did not use FNPF allocation to clear the charges.

Hence, there is an overstated FNPF payment compared to Salaries and Wages in the General Ledger.
11.8 VAT Reconciliation Subject to the provision of the Vat Decree 1991, the tax shall be charged in accordance with the provisions of the Decree at the rate of twelve and a half percent on the supply (but not including an exempt supply) in Fiji of goods and services, by a registered person in the course or furtherance of a taxable activity carried on by that person, by reference to the value of that supply.5 A review of the VAT returns and supporting documents and VAT reconciliations carried out during the audit revealed an un-reconciled balance of $21,310 between the taxable supplies as per VAT Return and the total income/expenditure as per the Statement of Receipts and Expenditure.
Refer to Appendix 11.3 for details.

Recommendations  The Department should review its VAT records and reconciliations and provide explanations for the variances.

 Supervisory checks on the preparation of VAT Returns should be improved to ensure that balances reflected in the VAT Returns reconcile with FMIS.
Management Comments The following are the Budgetary allocations for 2008: 4 www.fnpf.com.fj –official web site address Fiji National Provident Fund 5 Value Added Tax Decree 1991 4th edition revised to 30/04/04 – section 15 (1) Legislature Department Section 11: Page 5 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ SEG 1 SEG 2 SEG 3 SEG 4 SEG 5 LESS: SEGs 1 & 2 453,000.00 256,700.00 32,000.00 228,500.00 40,000.00 1,010,200.00 (709,700.00) 300,500.00 VAT Portion 300,500/9 = 33,389.00 It should be noted that the VAT amount provided in 2008 Budget should have been $33,389.
Instead, Budget Division had miscalculated this amount and only $9,600 was provided which was an under-calculation on the amount that was supposed to be provided for 2008.

The amount of $9,600 was not sufficient to meet the VAT payments for 2008 and the allocation was soon exhausted.

We had written to Ministry of Finance seeking additional funds and a difference $27,963.00 was issued vide Departmental Warrant number 60/2008 on 23/05/2008.

(Please refer attached copy of the Departmental Warrant).
Since, additional funds were provided through a Warrant, payments to FIRCA were not reflected on Parliament allocation but cleared through Inter-Departmental Clearance Account of Ministry of Finance.

Audit was advised of the additional funds provided through the Departmental Warrant during audit and the payment vouchers for VAT payments to FIRCA also state IDC Treasury allocation and not the Parliament VAT allocation.
11.9 Deductions of Salary for Late Arrivals to Work Any absence from duty occasioned by late arrival to or early departure from work except in respect of sickness shall be deducted from an Officer's salary if the accumulated absence in one month equals or exceeds one hour6.

Scrutiny of the attendance register and late arrival returns revealed that some officers regularly reported late to work resulting in their accumulated absences in a month exceeding one hour.
In addition, the Department had failed to effect salary deductions for these officers.
Refer to the Table below for examples: Table 11.3: Late Arrival Names Sept Oct Nov Dec Totals Losana Rabua Asena Nasegai 3hrs 18min 2hrs 5mins 5hrs 20min 7hrs 20min 1hr 55min 4hrs 45mins 2hrs 30mins 20hr 45 min 6hrs 30min Amount ($) 84.12 67.12 6 General Order 302(b)(ii) Legislature Department Section 11: Page 6 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Audit also noted that the supervisors themselves have the habit of arriving to work late.
The lack of corrective actions taken by Department on persistent offenders may encourage the continuing late arrivals to work of staffs.

Late arrivals and early departures also affect productivity.

Recommendations  The Department should instigate salary deductions in accordance with General Orders 302 (b) for officers that arrive late to work  Disciplinary actions should be taken against persistent offenders.
Management Comments The Department is preparing a list for those who came in late and will proceed with deductions as recommended by the Audit Department.

However, since we are still covered under the GO 302 during this period, there has been a precedent set for the Hansard staff.

PSC had given its approval through a request by the former Secretary-General that they be exempted from having salaries deducted due to the fact that the overtime work involved far exceeded their late arrivals.
This is a contentious issue because even though there was no Parliament, PSC had recognized the fact that Hansard staff were still doing the same nature of work they do when there is a Parliament for the year 2008.

In this instance only two Hansard staff are involved (Ms. Lusi Bale and Ms. Maraia Voka), and PSC had approved that they be paid consolidated allowance during this period.
11.10 Recoveries of Consolidated Allowance Consolidated allowance was approved by the Public Service Commission to be paid to Editors and Hansard Reporters, when Parliament is in sessions in lieu of overtime.

Overtime shall be approved only in essential circumstances and on the specific approval of the Head of Department.7 We had reported in 2007 that officers who were no longer working as Editors and Hansard Reporters continued to receive consolidated allowances.
After clarifying with the Public Service Commission that staffs in the Administration Section are not entitled to consolidated allowances, we than recommended that the payment of such allowances be ceased immediately.

Audit noted that the Officers continued to receive consolidated allowances, which should only be paid to Editors and Hansard Officers when Parliament is in session.

Refer to the table below for details of allowances paid in 2007 and 2008: Table 11.4: Consolidated Allowance Name EDP No.
2007 ($) 2008 ($) Total ($) Comments Kalo Takape 47493 5,115.24 1,770.66 6,885.90 Officer is currently a Senior Admininistration Officer and was still receiving the consolidated allowance in 2007 and 2008.

Kelera Sagoa Loraini Korovusere 46878 4,139.72 1,432.98 5,572.70 Officer became Senior Administration Officer with effect the consolidated receiving 15/07/99 and was still allowance in 2007 and 2008.

49054 4,139.72 1,592.20 5,731.92 The Officer has been deployed to the Ministry of Finance.
7 General Orders 467 (a) Legislature Department Section 11: Page 7 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Audit is of the view that the payment of consolidated allowances should cease when an officer is transferred out of the Hansard Section unless stated otherwise by the Public Service Commission.
Despite raising this issue in the 2007 audit, management has failed to take corrective actions as they advised in their comments to the previous year’s audit report.

Recommendations  The Department should ensure that consolidated allowances are only paid when Parliament is in session, which would require Editors and Hansard Reporters to work overtime.

 Overpayment of consolidated allowances should be recovered from the relevant officers.
Management Comments All consolidated allowance payments were ceased effective from Pay 10/2008 (15/05/2008) when the matter was raised in 2008 whilst Auditors were auditing the 2007 accounts.

The instruction came from the Secretary to the Senate to cease all consolidated allowance payments.

It should also be noted that Loraini Korovusere was transferred out of Legislature Department with effect from 11/04/07and National Planning was responsible for her salary payments.
The officers in question were initially appointed as Temporary Relieving Assistant Hansard Reporters (RT 06) in 1984 and 1985 and qualified for the consolidated allowance upon promotion to Hansard Reporter (Loraini Korovusere) and Assistant Editors (Kelera Sagoa and Kalo Takape) in 1992.
Upon resumption of a new Parliament under the new 1997 Constitution (Section 74(3)), a new Sector Standing Committee section was established and its sole purpose was to examine contentious Bills and other matters assigned to it by the Speaker.

The Committees had to consider/scrutinise the Bills, seek the public's views and report on it before it was passed in both Houses and enacted.
Even though the classification changed from the RT grade to the SS grade when the three officers were promoted as Secretaries to the six Sector Standing Committees, the nature of their duties was still similar to that in the Hansard Office.

The secretaries were also required to provide verbatim reports when the Hansard Reporters were not available and were also required to work long hours daily and in the weekends.
Their duties as secretaries to the Committees were not administrative in nature but purely parliamentary related.

The officers did not qualify for overtime and were informed that the consolidated allowance would be sufficient to compensate for their overtime hours.
As mentioned above, their duties were not administrative in nature hence if they were not supposed to be receiving any form of allowance when they left the Hansard Office for the Sector Committee Office those responsible at the time should have rectified the issue.

Further, to be surcharged for an error which was not their doing is totally unfair as they did their duties diligently and with total commitment.
Being surcharged with such huge sums under the present circumstances in our country is purely unethical and a punch below the belt, so to speak.

However, a letter has been written to PSC regarding the issue and as soon as we hear from them a copy will be sent to your office for your information and decision on the issue.
11.11 Outstanding Accountable Advance Officers may be given accountable advance with the prior approval of the Chief Accountant for the purpose of covering expenses whilst travelling on duty.
Within seven days of completion of the duty for which advance were issued, the Officer shall submit a statement of expenses to the Chief Accounting Officer so that the advance may be cleared.8 If the advances have not been cleared within 8 Finance Instruction 51 (3) Legislature Department Section 11: Page 8 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ seven days, then the outstanding amount together with interest should be recovered from the Officer’s salary.9 Our review of the accountable advance register and related records revealed that that accountable advances issued to staffs in prior years are still to be accounted for and retired.
Refer to the table below for examples: Table 11.5: Outstanding Accountable Advance Name EDP Amount Outstanding ($) Year Advance was given S.Wainiu Serei Naicavu Marilyn Korovusu Kelera Sagoa Kalo Takape Total 49867 48443 63796 46878 47493 768.40 1,250.00 330.00 602.50 445.00 32.00 161.31 515.00 $4,104.21 2006 2006 2006 2006 2006 2006 2006 2006 The officers concerned explained that they have retired the accountable advances.
However no documentary evidence was provided for audit purposes to authenticate that the advances have been cleared.

The issue of non- clearance of accountable advances had been continuously raised in the audit report.

Recommendations  The Department should ensure that accountable advances are cleared within the stipulated time frame of seven days after returning to the station.

 The Department should make a firm decision on the steps to take to recover all the long outstanding accountable advances.
Management Comments The following officers had explained that they had retired their accountable advances with Taj: 1.

S. Wainiu 2.

Serei Naicavu 3.

Kelera Sagoa 4.

Kalo Takape We do not have the receipts to substantiate their claims as the documents for retirement were submitted to Tajeshwar Dutt, who was the Acting Accounts Officer at that time.

Clearances of outstanding amounts were not made from the officers’ names.

Hence, these amounts remain outstanding.


Accounts Section has not been instructed to recover these outstanding amounts.

Thus, no action was taken without any authority.
9 Finance Circular 22/85 Legislature Department Section 11: Page 9 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Appendix 11.1: Statement of Output Costs Description EXPENDITURE Operating Costs Established Staff Unestablished Staff Travel & Communication Maintenance & Operations Purchase of Goods & Services Special Expenditures Operating Grants & Transfers Total Operating Costs Capital Expenditure Capital Purchases Total Capital Expenditure 2008 $ 2007 $ 452,909 220,095 63,342 172,752 29,466 0 0 938,564 0 0 902,956 295,822 92,161 254,141 33,160 0 15,021 1,593,261 0 0 Value Added Tax 9,522 168,126 TOTAL EXPENDITURE 948,086 1,761,387 Appendix 11.2: FNPF Reconciliation Description (a) Total FNPF against salaries and wages for 2008 FNPF as per financial statement Less: FNPF for December 2007 Add: FNPF for December 2008 Gross pay subject to FNPF ($64,774 divided by 0.08) (b) Salaries and wages for 2008 subject to FNPF: Salaries, wages and allowances as per financial Statement Less: Salaries, wages and allowances not subject to FNPF Salaries, Wages & Allowances for 2008Subject to FNPF Variance $ 56,571 - 56,571 8,203 64,774 809,675 616,433 - 616,433 $193,242 Legislature Department Section 11: Page 10 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Appendix 11.3: VAT Reconciliation Variance between the actual VAT payments for 2008 and the balances disclosed in the general ledger (FMIS): Description VAT payments
 (VAT payments to FIRCA and VAT Input) as per Statement of Receipts and Expenditure VAT payments (VAT payments to FIRCA and VAT Input) as per VAT Returns for 2008) Un-reconciled variance $ 9,255 30,565 (21,310) Legislature Department Section 11: Page 11 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF THE FIJI ISLANDS – SEPTEMBER 2009 ________________ Section 12 Office of the Ombudsman Role and Responsibilities The Ombudsman is primarily a guardian for the general public in their relations with the Civil Service, statutory bodies and local governments.
His duty is to receive complaints against the above bodies where administrative malfeasance is alleged and to investigate them.

But he can also protect authorities against unwarranted criticism.

The Ombudsman’s Office is designed to obtain remedies in a cheap, informal and expeditious manner and to see that powers are not exceeded or abused.

The Ombudsman is entitled to recommend improvements in practice, procedure or law.
12.0 SUMMARY  The Office of the Ombudsman was located in the second floor Civic Towers at 272 Victoria Parade, Suva however, upon the abrogation of 1997 constitution on the 09 April 2009 the office holder was discharged of his/her responsibilities.1  On the 13/04/09 police officers were posted at the Ombudsman’s Office and staffs were not allowed into the building.

The officers then reported to the Public Service Commission on the 14/04/09 and were re-deployed to various Ministries and Departments.
 The Regulatory and the Agency Financial Statement audit were not carried out due to the closure of the Office.

 The Office was allocated $1,479,900 in 2008 and actual expenditure amounted to $1,407,035 resulting in savings of $72,865 or 5%.

1 State Services Decree 2009 No.6, Part 9 Interpretation, Repeals, Transition etc, Section 12 Office of the Ombudsman Section 12: Page 1