Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1697817324532.pdf (Fiji)
EXCELLENCE IN PUBLIC SECTOR AUDITING REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI Audits of Statutory Authorities - June 2013 EXCELLENCE IN PUBLIC SECTOR AUDITING REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI Audits of Statutory Authorities - June 2013 File: 102 5 July 2013 Commodore Josaia V. Bainimarama Prime Minister and Minister for Finance Office of the Prime Minister Government Buildings SUVA Dear Sir REPORT OF THE AUDITOR GENERAL Audit of Accounts of Statutory Authorities – June 2013 In accordance with section 7(7) of the State Services Decree 2009, I am pleased to transmit to you my report on the audits of accounts of the above entities that were completed as at 30th June 2013.
The report should be presented to Cabinet within 30 days of receipt as required under section 7 (8) of the State Services Decree 2009.

Tevita Bolanavanua Auditor - General FOREWARD This report covers the financial audits of the following statutory authorities completed during the 1st half of 2013.
Entity Civil Aviation Authority of Fiji Training and Productivity Authority of Fiji Fiji Commerce Commission National Fire Authority Land Transport Authority Water Authority of Fiji Fiji Flood Emergency Response Project Grant No 0283-FIJ (ADB Funded) Water Authority of Fiji Telecommunications Authority of Fiji Institutionalizing Telecommunications Project Monitoring the of Year Audited 2012 2010 2012 2010 2011 2010 2012 2012 2012 Audit Report Unqualified Qualified Unqualified Unqualified Qualified Disclaimer of Opinion Disclaimer of Opinion Unqualified Unqualified Operating Result Deficit Surplus Surplus Surplus Deficit Deficit Deficit Surplus Statutory authorities that submitted their financial statements by 31 May 2013 were audited whilst those received after 31 May will be audited during the 2nd half of 2013.
Out of the 7 statutory authorities audited 4 recorded deficits in their operations while 3 recorded operating surpluses.

I have also included 2 project accounts which were audited in 2013 with this report.

The two projects were managed by the Water Authority of Fiji and the Telecommunications Authority of Fiji respectively.

Qualified audit reports were issued to 2 statutory authorities whilst the financial statements of 4 statutory authorities were unqualified.
Water Authority of Fiji was issued a disclaimer of opinion.

A disclaimer of opinion was also issued to 1 project account while the other was issued an unqualified report.

A qualified audit report is issued when the overall financial statements are fairly stated but either the financial data indicated a failure to follow applicable accounting standards or there was a significant uncertainty concerning certain financial data.
An unqualified audit report is issued when the financial statements give a true and fair view or are presented fairly in all respects in accordance with the identified reporting framework.

A disclaimer of opinion is issued when the auditor is unable to obtain sufficient appropriate evidence on which to base the opinion, and the auditor concludes that the possible effects on the financial statements of undetected misstatements, if any, could be both material and pervasive.
The report of each entity has 2 parts.

Part A covers the financial information while Part B includes control issues identified during our audit.

The financial information summarizes the financial statement of each statutory authority whilst the control issues represent our audit findings, recommendations and the management comments.

Statutory Authorities 1.

2.

3.

4.

5.

6.

7.

8.

9.


Civil Aviation Authority of Fiji Training & Productivity Authority of Fiji Fiji Commerce Commission National Fire Authority Land Transport Authority Water Authority of Fiji Fiji Flood Emergency Response Project Grant No.
0283 FIJ (ADB Funded) Telecommunications Authority of Fiji Institutionalizing the Monitoring of Telecommunications Reform Project OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI SECTION 1: CIVIL AVIATION AUTHORITY OF FIJI The Civil Aviation Authority of Fiji (CAAF) is an aviation regulatory authority and is responsible to discharge its functions on behalf of the Fiji Government under its responsibility to the Chicago Convention on International Civil Aviation Organization (ICAO).
The Authority regulates the activities of:       airport operators; air traffic control and air navigation service providers; airline operators; pilots and air traffic controllers, aircraft engineers, technicians and airports; airline contracting organizations; and international air cargo operations.
Table of Content SECTION 1: CIVIL AVIATION AUTHORITY OF FIJI ................................................................................. 1 PART A – FINANCIAL INFORMATION ......................................................................................................... 1 1.1 1.2 1.3 AUDIT OPINION ................................................................................................................................. 1 ABRIDGED INCOME STATEMENT ....................................................................................................... 1 ABRIDGED BALANCE SHEET ............................................................................................................. 2 PART B – CONTROL ISSUES ............................................................................................................................ 3 1.4 1.5 1.6 UPGRADE OF SERVER ROOM .............................................................................................................. 3 ACCUMULATED LEAVE ...................................................................................................................... 4 PAYMENT OF BONUS ......................................................................................................................... 5 PART A – FINANCIAL INFORMATION 1.1 Audit Opinion The audit of the financial statements of the Civil Aviation Authority of Fiji for the year ended 31 December 2012 resulted in the issue of a unqualified audit report.
1.2 Abridged Income Statement Year Ended 31 December Income Income from Operation Other Operating Income Total Income Expenses Administrative expenses 2012 ($) 2011 ($) 1,319,268 271,068 1,590.336 1,224,480 283,426 1,507,906 1,069,513 1,030,592 Report of Statutory Authorities – June 2013 1 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI Year Ended 31 December Operating expenses Personal expenses Total Expenditure Net financing income Operating (loss) before tax Income tax (expense)/benefit Net (Loss)/Profit after tax 2012 ($) 633,316 2,446,985 4,149,814 179,323 (2,380,155) (658,711) (3,038,866) 2011 ($) 778,400 2,351,672 4,160,664 342,110 (2,310,648) 422,004 (1,888,644) The net loss after tax increased by $1,150,222 or 61% in 2012 compared to 2011.
The increase in loss was mainly attributed to the significant increase in income tax due to write back of the prior year’s tax losses which have been expensed in 2012 to comply with the Income Tax Act and the International Financial Reporting Standards.

No such write back was done in 2011.
1.3 Abridged Balance Sheet As at 31 December Current Assets Cash on hand and at bank Investments Other current assets Total Current Assets Non - Current Assets Investments Property, plant and equipment Other non-current assets Total Non-current Assets Total Assets Current Liabilities Creditors and other payables Total Current Liability Non-current Liabilities Employee benefits Total Non-current Liabilities Total Liabilities Net Assets Shareholders’ equity 2012 ($) 2011 ($) Net assets declined by $1,804,278 or 10.7% in 2012 compared to 2011.
The reduction in investment by $1.2 million was due to withdrawals made to finance the operations of the Authority.

Report of Statutory Authorities – June 2013 2 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI PART B – CONTROL ISSUES 1.4 Upgrade of server room Where the estimated value of goods and services exceeds $7,000, an open tendering system will be used by advertising in the daily newspapers.

A written specification bill of quantities of scope of works will be prepared and issued1.
The upgrading of the server room was not put out for public tender.

The Authority obtained quotations from three contractors who had previously worked for the Authority on various building and maintenance projects.

Refer to Table 1.1 for details of quotations obtained.

Table 1.1: Details of quotations obtained Date Supplier 16/11/11 Supplier 1 17/11/11 Supplier 2 18/11/11 Supplier 3 Amount Quoted ($) 12,500 19,850 28,880 Scrutiny of the board minutes no.
8/11 revealed that the scope of work was issued to the three contractors with the contract awarded to Supplier 1 at a cost of $12,500.

The Authority did not follow the Finance Manual on the calling of tender for purchases above $7,000.

The procurement of goods and services from the selected contractors may not have been from the most economical source.
Recommendation The Authority should advertise expression for tender for its capital works in a local newspaper for goods and services over $7,000 where there are numerous suppliers of goods and services in the market.

Management Comments The comments are noted.

The tenders were not advertised as the upgrade of the server room was urgently required so that the necessary equipment could be installed and commissioned to mitigate constant downtimes experienced with the old system.
A properly planned upgrade of the server room could not be carried out since the previous incumbent IT Administrator left without sufficient notice and hand-over and the upgrade identified by him initially had to be independently audited to substantiate initially identified requirements.

Purchase of IT equipment was therefore re-tendered to avoid unnecessary purchases and for the purpose of good governance.
Due to time constraint therefore, the Authority approached known contractors who had worked for the Authority on many previous jobs and whose experience and workmanship was known to provide quotes rather than go through the tender process which would have taken considerable time at the risk of substantial failure and downtime of the IT system.
1 Section 12.4- Authority Finance Manual Report of Statutory Authorities – June 2013 3 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI 1.5 Accumulated leave Annual leave should be liquidated regularly at times mutually agreed between the parties and no accumulation of leave shall be allowed beyond six months of the following year.2 The audit noted that Authority staffs have accumulated leave balances beyond six months of the following year.
Refer to Table 1.2 for details: Table 1.2: Staff with accumulated leave balance Name EDP No.

No.
of leave days Alisi Saukuru Lisi Aisake George Tudreu Etuate Rakuro Jasmel Singh Aisake Rigamoto Alanieta Disele Draciri Mosese Nalele Netava Waqa Suresh Chandra Ajai Kumar Ajai Kumar Suresh Kumar Suresh Kumar Alipate Kedraika Ajit Singh Roshni Deo Ashwin Chand David MacDonald Isei Tudreu Maibulu Laliqavoka Theresa O Leveslam Ilaitia Tabakaucoro Mosese Ratucicivi The audit is of the view that such a significant amount of leave balance has arisen due to the poor leave administration which allowed staffs to accumulate their leave balance.
The audit further noted that the Authority paid leave compensation to some of the officers at the end of their contract.

Refer to Table 1.3 for details.

2 Annex 3 - General Terms and Condition of Service of the Contract of Service dated 1 July 2010 Report of Statutory Authorities – June 2013 4 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI Table 1.3: Details of Leave Compensated Employee Initial JAE HNR No.
of leave balance due 23 15.5 Leave Compensated ($) 10,914.03 34,863.33 Poor administration of leave would allow staffs to accumulate leave balances resulting un-necessary compensation of annual leave at a higher rate in future.

This will put further burden on the cash flows of the Authority.

Recommendation Administration of leave should be improved and that staffs should be encouraged to utilise their leave when due.

Management Comments The comments are noted.


The Authority endeavours and encourages staff to take leave as and when due, however, this is not always possible due to exigencies of work.

Leave is not compensated in cash for serving staff, however, balances are determined and paid-off only on the completion or termination of their respective contracts and agreements.

In the above examples, HNR contract was pre-maturely terminated in which the Authority had no choice but to compensate for the leave balance.
In JAE's case, leave was paid off as his existing contract of 12 months expired and within this period, the requirements of his job did not give him any opportunity to take leave.

1.6 Payment of Bonus It is in the best interest of the Authority to pay bonus to its staffs based on the availability and state of cash flows.

The Authority made a bonus payment amounting to $110,269.50 in 2012 for 2011 and paid 2012 bonus amounting to $122,444.96 in March 2013 despite having unhealthy cash flow status in 2012.
The Authority continuously made significant losses in 2011 and in 2012 and relied on its Term deposits to meet some of the operational costs.

The audit is of the view that the decision by the Authority to pay bonus to the staffs was not in the best interest of the Authority considering the poor cash flow position of the Authority in 2012.

Such actions and approvals by the Board will place more burdens on the Authority in terms of its cash flows.
Report of Statutory Authorities – June 2013 5 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI Recommendation The Authority should re-consider making bonus payments to staffs during financial difficulties.

Alternatively, the bonus can be re-considered to be paid out when the Authority’s cash flow improves.

Management Comments The comments are noted.

The Authority’s funding through a share of the departure tax was withdrawn by government without prior discussion.
The Authority has since made submissions for a restoration of an independent and regular source of income either through a share of departure tax or regulatory fee which is under consideration by government.

The Authority has also made a submission to revise the current fees & charges.

The Authority’s staff bonus is an integral part of the Performance Management System (PMS) established through professional consultancy and approved by the Board.
It is not tied to the profitability of the entity but based on staff meeting their Key Performance Indicators (KPI’s).

The areas of focus of PMS are as follows; 1.

Assessment of performance and identification of development goals or needs to improve performance; 2.

Rewarding performance and achievements as part of the CAAF HR policy and to act as an incentive and improve morale; 3.

Improving staff productivity.


The Authority has lost several key operational staff and has lost on its investment in them on prolonged and very expensive training, therefore, PMS was considered as one of the incentives for staff retention.
The Authority is mindful of the financial situation which, as noted above, is being addressed with the Ministry; however, suspending bonus payments reactively purely on grounds of lack of funding will only compound anxieties amongst staff and cause them to leave for other opportunities.
Report of Statutory Authorities – June 2013 6 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI SECTION 2: TRAINING AND PRODUCTIVITY AUTHORITY OF FIJI The Training and Productivity Authority of Fiji, [formerly known as the Fiji National Training Council] is a statutory organisation established under Cap 93 of the FNTC Act.
The Authority is the national organisation for technical vocational training in Fiji, and the National Productivity Organisation for the Fiji Islands and acts and performs functions to promote the concept of productivity as a viable economic strategy.

The Authority’s principle activity is to develop the national framework and make provision for the registration of training courses or training providers or facilities or qualifications of such category it shall direct.
Table of Content SECTION 2: TRAINING PRODUCTIVITY AUTHORITY OF FIJI ............................................................. 1 PART A – FINANCIAL INFORMATION ......................................................................................................... 1 2.1 2.2 2.3 AUDIT OPINION ................................................................................................................................. 1 ABRIDGED INCOME STATEMENT ....................................................................................................... 2 ABRIDGED STATEMENT OF FINANCIAL POSITION .............................................................................. 2 PART B – CONTROL ISSUES ............................................................................................................................ 3 2.4 2.5 2.6 2.7 2.8 2.9 2.10 2.11 2.12 2.13 UNSIGNED RECONCILIATIONS ........................................................................................................... 3 STAFF DEBTORS ................................................................................................................................ 3 PROPERTY PLANT AND EQUIPMENT .................................................................................................. 5 PHYSICAL VERIFICATION .................................................................................................................. 8 STALE CHEQUES – CLEARING ACCOUNT
 ........................................................................................... 8 UNIDENTIFIED DEPOSITS ................................................................................................................... 9 EMPLOYER VERIFICATION................................................................................................................. 9 MISSING PERSONAL FILES ............................................................................................................... 10 NON DISCLOSURE OF WAGES IN THE PAYE ANNUAL SUMMARY ................................................... 11 PROVISIONAL TAX NOT WITHHELD ................................................................................................ 11 __________________________________________________________________________________________________ PART A – FINANCIAL INFORMATION 2.1 Audit Opinion The audit of the financial statements of the Training Productivity Authority of Fiji (TPAF) for the year ended 29 November 2010 resulted in the issue of a qualified audit report as there were deficiencies noted in the record pertaining to the Authority’s property, plant and equipment.
As a result the audit was not able to verify the existence and valuation of the historical cost and accumulated depreciation for the opening balances for fixed assets beyond the recording of the amounts as shown in the Authority’s books.

The attention of the Authority was also drawn to the note 13 of the financial statements where the Authority recorded an annual leave provision amounting to $490,298 but did not maintain appropriate records for annual leave day’s balance.
Report of Statutory Authorities – June 2013 1 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI 2.2 Abridged Income Statement Year ended 31 December Income Income from operation Interest income Dividend income Other operating income Total Income Expenses Personnel expenses Depreciation and amortisation Refund of grants to employers Franchise course fees Course related expenses Doubtful debts Operating expenses Total Expenses 29.11.2010 $ 2009 $ 20,139,390 199,861 302,952 655,960 21,298,163 6,362,527 1,109,279 4,027,312 990,400 2,850,145 841,180 3,334,844 19,515,687 22,467,730 211,748 183,763 590,761 23,454,002 7,288,893 1,326,946 4,721,551 1,697,190 2,969,528 910,627 3,157,321 22,072,056 Net Surplus for the Year 1,782,476 1,381,946 The Authority recorded a net surplus of $1,782,476 as at 29 November 2010, compared to $1,381,946 in 2009.
The increase in net surplus is due to the decrease in personnel expenses by $926,366 (13%) and refund of grants to employers by $694,239 (15%) as a result of reduction in method B claims.
2.3 Abridged Statement of Financial Position As at 31 December Assets Cash at bank and on hand Trade & other receivables Financial assets Other current assets Property, plant & equipment Total Assets Liabilities Grants payable Sundry creditors & accruals Other current liabilities Total liabilities Net assets Authority’s Funds Fair value Reserve Accumulated Surplus 29.11.2010 $ 2009 $ 7,267,272 13,601,854 7,194,704 166,708 10,450,536 38,681,074 7,633,994 2,410,688 490,298 10,534,980 28,146,094 1,652,976 14,410,600 10,717,582 139,410 10,209,907 37,130,475 6,509,328 3,397,630 532,539 10,439,497 26,690,978 378,407 27,767,687 28,146,094 912,613 25,778,365 26,690,978 Report of Statutory Authorities – June 2013 2 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI Net assets of the Authority increased by $1,455,116 or 5.45% as at 29 November 2010 compared to 2009.
This was due to increase in the Cash at Bank by $5,614,296 or 340%.

PART B – CONTROL ISSUES 2.4 Unsigned Reconciliations Reconciliations must be compiled by Accountant, reviewed at the end of each month and signed as evidence by the Manager Accounting Services.

Second reviews are to be performed regularly by the General Manager Corporate Services and signed as evidence.

1 The audit noted that the following reconciliations were not signed off as evidence of review by the Accountant and the MAS.
Refer to Table 2.1 for details.
Table 2.1: Reconciliations not signed Account Code 1300 1025 1030 1040 1810 1830 Account Name Category Levy Debtors Control Interest Receivable Deposit Refundable-LT Deposit Refundable-ST Prepayment-Insurance Prepayment-Subscription Current Asset Current Asset Current Asset Current Asset Current Asset Current Asset Amount as per reconciliation ($) 15,271,833 32,003 8,600 56,601 127,696 44,449 In addition, no reconciliations were carried out for student debtors and staff listing debtors amounting to $4,965,687 and $255,042 respectively.
Unsigned reconciliations indicated that reconciliations were not reviewed.

It further exposes the Authority to incorrect account reconciliations not being corrected on time.

Recommendation Reconciliations should be signed off by the Accountant and MAS as evidence of review and approval to ensure that accounts are true and accurate.

Authority’s Comments No comments on the issue.


2.5 Staff Debtors Staff advance shall be settled with a maximum of thirteen (13) pay periods if such advance is equal to or less than a fortnight’s net salary.

If an advance is more than an officer’s fortnight salary, then a fixed amount will be deducted, and such repayment must be made within six months.
Advances payable for more than three months will accrue interest at the rate of 10% per annum which would be 1 Section 18.3.6- TPAF Finance Policy Manual Report of Statutory Authorities – June 2013 3 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI added together with the actual advance when calculating repayments.
In no case should an advance be carried over to the next financial year.2 The audit of staff debtor’s records showed the following anomalies:     The Authority has not considered writing off the staff debtors amounting to $54,896 which is included in the provision for doubtful debt accounts despite those debts being dated back to 2007.

The audit also did not sight any written confirmation or documentation regarding the recovery of the same debt.
Total staff debtors provision as at 29 November 2010 amounted to $61,723.

Negative staff debtors amounting to $27,663 have not been cleared from the staff debtors listing of $236,842.

FNTC staff insurance has been long outstanding.

Last movement noted in the general ledger account was in 2004.

No supporting documents were provided to substantiate this receivable.

There was no age of staff debtors listing prepared as at 29 November 2010.
Although the Authority has created adequate provision for these staff debtors, Board needs to consider approving these debts to be written off if these debts are not going to be recovered to be prudent and conservative in its approach in preparing financial statements.

Negative staff debtors indicates that the Authority may have over deducted from the staffs and have not refunded the over deduction.

Negative staff debtor’ balance results in incorrect financial reporting.
Recommendations    The Board should consider writing off these doubtful debts to bad debts and remove it from the accounts.

Negative staff debtors should be investigated and adjusted accordingly.

Where it is established that over deduction was made which resulted in negative staff debtors, the Authority should make every effort to refund these over deduction to staffs concerned.

Age of staff debtors listing should be prepared, analysed progressively and actions taken on the non paying debtor.
Authority’s Comments Auditor’s comments noted.

Staff debtors which is under provision is for those prior staff who have failed to submit proper resignation, is deceased or resigned in prior years.

Most of this staff cannot be contacted as they have migrated.

Negative staff balances include stale cheques, credit of staff who have resigned and over deductions.

The staffs that exist in FNU payroll will be refunded accordingly.
The FNTC Staff insurance relates to the transaction for the year 2004, no supporting documents could be retrieved thus it was not written off, however provision for doubtful debts is accounted for FNTC staff insurance.

The sun system could not extract correct staff aged debtors report, this problem was highlighted to the software supplier, and this problem will be rectified in the Navision system.
2 Section 16.4 - TPAF Finance Policy Manual Report of Statutory Authorities – June 2013 4 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI 2.6 Property Plant and Equipment The financial books and records (including financial information stored electronically) of the Authority are maintained by the MAS and should correctly record and explain the transactions and financial position of the Authority, and allow the operations of the Authority to be conveniently and properly audited in accordance with the requirements of the FNTC Act.
Accounting records must be also adhering to General Accepted Accounting Principles.

3 Property, Plant & Equipment, other than Freehold Land should be depreciated over their estimated useful life using the straight line method at the following rates:4 Leasehold Buildings Motor Vehicles Furniture, Fittings and Office Equipment Plant and Machinery Tools and Accessories 2.5 % 20 % 15 % - 25 % 15 % 10 % - 20 % Audit of the property, plant & equipment records revealed the following anomalies.
  The Authority failed to rectify audit qualification raised in previous years.

This related to the cost and accumulated depreciation for the opening balance of fixed assets.

As a result, the period ended 29 November 2010 account has again been qualified on this basis.

Depreciation amount between the income statement and the notes to and forming part of the financial statements did not reconcile.

Refer to Table 2.3 for details.
Table 2.3: Depreciation chargers shown under Income Statement and Statement of financial position/ FAR Description Depreciation – Furniture Depreciation – Land Depreciation – Buildings Depreciation – Motor Vehicles Depreciation – Computer Hardware Depreciation – Computer Software Depreciation – Computer Laptop Depreciation - Printer Depreciation – Office Equipment Depreciation – Equipment Plant Depreciation – Equipment Tools Total Amount as per Income Statement $ 78,198.97 7,742.06 168,371.75 37,686.35 202,095.63 53,944.84 77,885.93 11,946.10 246,798.27 20,571.26 204,038.18 1,109,279.34 Amount as per notes in the financial statements $ 79,533 3,491 167,765 37,686 200,246 58,156 77,886 11,851 249,468 20,571 200,235 1,106,888 Variance $ (1,334.03) 4,251.06 606.75 - 1,849.63 (4,211.16) - 95.10 (2,669.73) - 3,803.18 2,391.24 No explanation was provided for the above-noted variance.
Depreciation expense reported in the financial statements may not be correctly reflected.

3 Paragraph 18.3.1 - TPAF Finance Policy Manual Version 2.0 December 2006 4 Section 1.2.6 - TPAF Finance Policy Manual Report of Statutory Authorities – June 2013 5 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI  Abnormal changes in accumulated depreciation for the period ending 29 November 2010 were noted.

These changes were not supported by the depreciation expense for the year.

Refer to Table 2.4 for details.
Table 2.4: Abnormal Changes in Accumulated Depreciation Accumulated Depreciation 31/12/09 Accumulated Depreciation 29/11/10 Depreciation Land & Buildings Motor Vehicle Furniture/ Fitting & Equipment Plant and Machinery Tool and accessories Total $ 1,293,294 267,520 5,343,613 626,866 1,643,667 9,174,960 $ 171,256 37,686 677,139 20,571 200,235 1,106,887 Accumulated Depreciation 29/11/10 As per Audit calculation $ 1,464,550 305,206 6,020,752 647,437 1,843,902 10,281,847 Accumulated Depreciation 29/11/10 as per Financial Statement $ 4,640,470 235,403 597,688 1,370,223 3,437,961 10,281,745 Variance $ (3,175,920) 69,803 5,423,064 (722,786) (1,594,059) 102 The above indicates that incorrect postings may have been made to individual class of asset’s accumulated depreciation account resulting in abnormal changes in the balances.
Incorrect information on written down values of the assets will be derived, showing incorrect economic reality on the values of individual class of assets.

 Some fixed assets were depreciated using incorrect depreciation rates.

Refer to Table 2.5 below for details.
Table 2.5: Incorrect depreciation rates used Assets code Description Amount Transaction Date Journals Depreciation rate used 1952 1952 1950 1952 1910 1910 1910 1910 1910 1910 1910 1931 1952 1960 FA – Equipment - Tools FA – Equipment - Tools FA – Equipment FA – Equipment - Tools FA – Buildings FA – Buildings FA – Buildings FA – Buildings FA – Buildings FA – Buildings FA – Buildings FA – Computer Software FA – Equipment – Tools FA - Furniture $ 10,078.53 10,445.03 8,923.28 11,509.62 5,914.78 7,760.98 4,500.00 3,700.00 13,600.00 4,384.80 3,600.00 13,337.00 4,479.00 9,750.00 11/01/10 11/01/10 19/02/10 22/03/10 13/04/10 14/04/10 29/04/10 29/04/10 21/05/10 23/06/10 24/06/10 02/06/10 29/11/10 29/11/10 102010 102012 102723 103448 104238 104239 104838 104839 105719 106903 106948 106130 114534 114534 40% 40% 2.5% 40% 20% 20% 20% 20% 20% 20% 20% 40% 0% 0% Depreciation rate as per accounting policy (Finance Manual) 10% - 20% 10% - 20% 15% - 25% 10% - 20% 2.5% 2.5% 2.5% 2.5% 2.5% 2.5% 2.5% 15% - 25% 10% - 20% 10% - 20% Failure to use correct depreciation rates leads to incorrect accounting of depreciation expense resulting in incorrect financial reporting of respective asset and depreciation values.
 Supporting documents for some of the Work In Progress listed in the Fixed Assets Register were not made available for audit verification.

Refer to Table 2.6 below for details.

Report of Statutory Authorities – June 2013 6 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI Table 2.6: Work In Progress payment vouchers not made available during audit Payment Date 30/06/10 30/06/10 07/05/10 29/11/10 Cheque No.
162069 162069 162140 159485 Amount $ 5,799.71 4,695.00 45,180.30 100,786.81 Work in Progress may not be correctly accounted in the financial statements.

 Details relating to the opening balance of the Work In Progress totaling $179,967 were not provided during the audit.

As such, audit could not verify the status of the projects totaling $179,967.

Lack of appropriate information on the opening balance increases risk of incorrect financial reporting.
There is a possibility that WIP represented by opening balance may have been completed but still shown as WIP resulting in incorrect financial reporting.

Recommendations     The internal control procedures in the Accounts Section, specifically supervisory checks should be strengthened to ensure correct postings are done in accumulated depreciation.

The Authority should adhere to instructions in the Finance Policy Manual and charge specified depreciation rates to respective assets.
The Authority should ensure that relevant information is made available for audit.

The Authority should immediately transfer work in progress to respective asset account upon completion of the work to ensure depreciation is correctly taken up.

Authority’s Comments The Authority’s Board of Survey was conducted to verify the existence of all its assets.
Currently as fixed assets are acquired the purchase orders are raised using a particular “order type” that, when the order is matched in the system a field prompts up asking for an asset code which automatically links the data to the fixed asset register.

The FAR gets updated at this point in time.

The general ledger reconciliation of all assets is done after the completion of the Board of Survey and after the re-classification and re-valuation of all the Authority’s assets.
The Authority is taking its attempts to improve on the issue.

  All Fixed Assets have been taken over by the FNU and upon completion of the Board of Survey and the Asset Valuation the data has been uploaded into the FNU Fixed Asset Module.

The Depreciation process is now run through the Navision System.

Corrected depreciation rates in line with the FNU Finance Policy Manual are now loaded into Navision for each specified asset.
The Authority will make all attempts to furnish the audit team with all relevant information.

The Authority’s Properties Office has been reminded to confirm, in writing to the Finance Office that the project is complete upon completion of any project and the transfer entries from the WIP account will be done to ensure timely posting for correct depreciation.

The highlighted issues will be taken care off under FNU’s Fixed Asset Register.
   Report of Statutory Authorities – June 2013 7 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI 2.7 Physical Verification A physical verification of all registered assets should be conducted yearly.

A list of all assets registered in the system register shall be verified against the physical assets in each location.5 The audit was not provided with any reports on physical verification of registered assets.

It was gathered that physical verification was not carried out during the year.
Assets are prone to mismanagement or theft in the absence of an effective internal control over Authority’s registered assets.

Recommendation The Authority should comply with its Finance Policy Manual and carry out physical verification of its assets.

Additionally, reconciliation should be performed between the physically verified assets and assets listed in the Fixed Assets Register.
Authority’s Comments The University in 2011 has conducted physical verification of assets for its existence as recorded in the FAR.

The Authority is yet to provide the reports on the physical verification exercise undertaken.

2.8 Stale Cheques – Clearing account Bank reconciliations only recognise cheques that are not more than six months old as part of the un- presented cheque listing.
Cheques that appear as outstanding on the bank reconciliation for more than six months should be cancelled and credited to the original account and debiting the bank account.6 Stale cheques totalling $335,619.27 were not credited to individual creditors account.

The Authority has the practice of transferring stale cheques to a clearing account which is cleared once a replacement cheque is issued.

The balance of the stale cheques in clearing account remained unadjusted for longer period of time.
The authority may not be able to keep a trail of its creditors which are due for payments.

This may expose bad relationship with the creditors.

Recommendation The Authority should write back the stale cheques and adjust the creditor accounts accordingly.

Authority’s Comments Auditor’s comments noted.

Stale cheques are kept in stale cheque clearing account as a liability.

Replacement cheques are issued respectively as per payees’ request.
Attempts are also being made to contact the payees to confirm if they did receive the cheque.

The Authority is taking its attempts to improve on this issue in 2011.
5 TPAF Finance Policy Manual 6 Section 6.14 - TPAF Finance and Policy Manual 2006 Report of Statutory Authorities – June 2013 8 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI 2.9 Unidentified Deposits A liability is recognised in the balance sheet when it is probable that an outflow of resources embodying economic benefits will result from the settlement of a present obligation and the amount at which the settlement will take place can be measured reliably.7 Un-identified deposits totalling $179,471 was stated under liabilities in the statement of financial position.
According to the Accounts Officer these were receipts which could not be traced to its correct account allocation as no narration was provided by the banks.

The Authority was not able to determine whether these un-identified deposits were cash received for the course fees or payment made by debtors.

This may result in incorrect financial reporting.

Recommendation The Authority should reconcile its records to ensure that un-identified deposits are identified and correctly allocated.
Authority’s Comments These unidentified deposits are those which do not have any details attached.

These transactions are credited in Authority’s bank account without any narration.

The Authority takes all measures to identify these deposits.

However, those amounts that still cannot be identified are transferred to unidentified account in the ledger.
The new PPMS system allows for all payments to be made directly on invoice that has, at the bottom, a readily available bank deposit slip that contains customer details with required narrations pre-printed.

2.10 Employer Verification Levy Collection Officers are to verify employer records on a regular basis.
All Method A employer records are to be verified every two years whilst at 10% of Method B are to be verified every year.8 As at 29 November 2010, Authority had approximately 51 registered employers under Method A and 6,463 registered employers under Method B.

The Authority for the past 4 years has not been able to verify the number of the employers’ records required under its Finance Policy Manual.

Refer to Table 2.7 below for number of employers verified from 2007 – 2010.
Table 2.7: Employers verified in last four years Employer Registration Method A B Verification Required 100% in every 2 yrs 10% every year 2010 82% 2.44% Percentage Verified 2008 2009 0% 4% 2% 2% 2007 34% 3% During 2010 the Authority only verified 2.44% of Method B and 82% of Method A employers in the 2 years in contrast to the 10% and 100% respectively.
7 Section 91 Recognition of Liabilities - Fiji Accounting Standards, Framework for the Preparation of Financial Statements 8 TPAF – Finance Policy Manual – Section 8.16 Report of Statutory Authorities – June 2013 9 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI The above indicates that the Authority is not complying with its Finance Policy Manual.

The Authority will not be able to know the status of its registered employers if it does not carry out adequate verification of employers.
This could lead to overstatement of levy income and levy receivable account balance through continued levy assessment for employers who may no longer be in operation.

Recommendation The Authority must ensure that all method A employer records are verified every two years while 10% of method B employers records are to be verified every year.

Authority’s Comments Auditor’s comments noted.


The University has recruited additional staff in Levy department to ensure that 10% levy is verified for Method “B” Employers, and every two years for Method “A” Employers and is in compliance to policy.
2.11 Missing Personal Files Human resources section shall maintain, on behalf of the TPAF, the official confidential personal files for each staff that are on a permanent, contractual and temporary employment.9 Under no circumstances, Personal files shall leave the Human Resources Office.10 The following two Officers personal files are missing from the Human Resource Office: Table 2.8: Missing Personal Files Officers Initial EDP No Positions EW CC 140 185 General Manager Corporate Services Manager Finance Discussions with the Human Resources staff revealed that the above mentioned officers’ files were not transferred to Fiji National University Human Resource Office after the merger.
Both of the above- mentioned staffs have resigned from the Authority.

Absence of personal files increases risk of incorrect calculation of final dues to these staffs mainly the unused annual leave which is paid to the staffs.

Recommendations   The Authority should ensure that personal files of the two officers are obtained and appropriate reconciliation is performed in order to ascertain that correct amount of outstanding leave entitlements has been paid.
The Authority should ensure that all files taken by senior officers for reviews are recorded in the register.

9 Section 1.0 - Human Resource Finance Manual – Staff Access to Personal Files 10 Section 3.4 - Human Resource Finance Manual – Staff Access to Personal Files Report of Statutory Authorities – June 2013 10 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI Authority’s Comments Auditor’s comments noted.

The files got misplaced in the process of transferring personal files from TPAF to FNU.
The University is taking all its attempts to do a search through the former TPAF HR office, shelves and filing cabinets to locate the missing files.

A register (dispatch trails) is now maintained for any movement of files.

2.12 Non Disclosure of Wages in the PAYE Annual Summary Item 5 of the IRS 401 form requires the employers to disclose the total amount of emoluments subject to tax and Item 6 requires the employers to disclose the total amount of emoluments not subject to tax.
Our review of the Authority’s PAYE Annual Summary lodged with Fiji Revenue Custom Authority revealed that the Authority had disclosed an amount of $7,972,078.18 as total emoluments subject to tax.

The amount disclosed included the total emoluments of $1,455,552.75 not subject to tax.

In addition, audit was not able to verify the PAYE records for the month of May, August and November 2010.
Incorrect disclosure of salaries and wages in the PAYE annual summary is a breach of statutory requirements and exposes the Authority to penalties.

Furthermore, employee’s personal tax returns may be delayed due to anomalies in the PAYE annual summary.

Recommendations The Authority should:   ensure that the salaries and wages as per PAYE annual summary reconciles with the gross salaries and wages paid to employees.
ensure that all relevant records pertaining to PAYE are properly kept and available for audit verification.

Authority’s Comments The auditor’s comments are noted.

The amount $1,455,552 relates to payment to external examiners thus it was included in the PAYE annual summary.

The University will ensure that such payments are correctly recorded.
2.13 Provisional Tax Not Withheld Any person making payment in return of a contract for services but not a contract of employment is required under the new regulations to make a deduction for Provisional of 15% of gross amount of the payment at the time is credited or paid to the contractor.11 The Authority failed to deduct 15% withholding tax on the total contractual payments of $117,115.80 made during the period to a catering contractor for failing to produce Certificate of Exemption to the Authority.
Refer to Table 2.10 below for details.
11 Clause 1 (B) (a) - Legal Act 70 of 1976 Report of Statutory Authorities – June 2013 11 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI Table 2.10: No Provisional Tax deducted despite failing to provide Certificate of Exemption Contractor Total amount paid ($) Catering Contractor 117,115.80 Total provisional tax that should have been deducted $ 17,567.37 Provisional tax deducted $ nil The Authority has failed to comply with the statutory requirement relating to Fiji Income Tax Act, hence is exposed to penalties.
Recommendation In absence of a valid certificate of exemption, the Authority should deduct 15% provisional tax as required by Fiji Income Tax Act for any contractual payment.

Authority’s Comments Auditor’s comments have been noted.

The Authority is taking attempts to ensure deducting 15% provisional taxes on all contractual payments that do not hold a valid COE.
Report of Statutory Authorities – June 2013 12 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI SECTION 3: FIJI COMMERCE COMMISSION The Fiji Commerce Commission is an independent statutory body established under Section 7 of the Commerce Commission Decree 2010 to ensure the integrated framework for the regulation of monopoly market structures; encourage competition, prevent restrictive trade practices, ensure consumer protection, and undertake pricing of public utilities and other price controlled items.
The objectives of the Commission as outlined in Section 2 of the Commerce Commission Decree 2010 include:     the promotion of the interests of the consumers; the promotion of the effective and efficient development of industry trade or commerce; the need to secure effective competition in industry, trade or commerce; and to ensure equitable returns for businesses with fair and reasonable prices charged to consumers.
The Commission has the following objectives in relation to regulated industries and access regimes:    to promote effective competition in the interests of consumers; to facilitate an approximate balance between efficiency and environmental and social considerations; and to ensure non-discriminatory access to monopoly and near monopoly infrastructure or services.
Table of Content SECTION 3: FIJI COMMERCE COMMISSION ............................................................................................. 1 PART A - FINANCIAL INFORMATION .......................................................................................................... 1 3.1 3.2 3.3 AUDIT OPINION ................................................................................................................................. 1 ABRIDGED INCOME STATEMENT ....................................................................................................... 1 ABRIDGED BALANCE SHEET ............................................................................................................. 2 PART B – CONTROL ISSUES ............................................................................................................................ 2 3.4 3.5 3.6 3.7 COMMISSION MEMBERSHIP ............................................................................................................... 2 RECEIPTS NOT ISSUED ....................................................................................................................... 3 LAPSE IN INSURANCE COVER ............................................................................................................. 3 FINANCIAL STATEMENTS ERRORS ..................................................................................................... 4 APPENDIX 3.1 ...................................................................................................................................................... 6 PART A - FINANCIAL INFORMATION 3.1 Audit Opinion The audit of the financial statements of the Fiji Commerce Commission for the year ended 31 December 2012 resulted in an unqualified Auditor’s Report.
3.2 Abridged Income Statement Year ended 31 December Government grant 2012 $ 2011 $ 1,520,895 1,491,699 Report of Statutory Authorities – June 2013 1 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI Year ended 31 December Professional fees Spot fine Miscellaneous income Total income Personnel expenses Administration expenses Operating expenses Total expenditure Net profit 2012 $ 117,226 109,251 53,878 1,801,250 1,170,178 13,421 507,764 1,691,363 109,887 2011 $ 79,266 - 86,807 1,657,772 1,107,544 16,411 440,860 1,564,815 92,957 Net profit recorded by the Commission in 2012 increased by 18% compared to the previous year.
The increase in income primarily from professional fees and spot fines contributed to the increase in net profit for 2012.
3.3 Abridged Balance Sheet As at 31 December Cash at bank and on hand Deposits Other receivables Non-current assets - Property, Plant & Equipment Total assets Accounts Payable Other current liabilities Deferred Income Total liabilities Net assets Total Accumulated Fund 2012 31 December $ 84,531 7,585 62,414 206,731 361,261 1,800 49,625 35,743 87,168 274,093 274,093 2011 31 December $ 133,760 5,478 28,835 133,773 301,846 11,899 77,038 48,703 137,640 164,206 164,206 Net assets increased by $109,887 or 68% in 2012 compared 2011.
This was due to the increase in total assets by $59,415 or 20% and the reduction in the total liabilities by $50,472 or 37%.

PART B – CONTROL ISSUES 3.4 Commission membership According to Section 8 (1) of the Commerce Commission Decree 2010, the Commission should consist of not less than 4 or more than 6 members.

The audit noted that from August 2012, the Commission was administered by one Commissioner1 only.
Two Commissioners whose term expired in 2012 were not re-appointed 1 For FCC, board members are known as Commissioners Report of Statutory Authorities – June 2013 2 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI and the Ministry of Industry and Trade did not appoint any new Commissioner during the year.

Failure in maintaining the minimum number of members of the Commission is breach of the Commerce Commission Decree 2010.
Recommendation The Commission should maintain the minimum number of members as required by the Commerce Commission Decree 2010.

Management Comments No comment received from the Commission.

3.5 Receipts not issued The responsible officer should issue a receipt for every sum paid to him or her on the prescribed official receipt.
The receipt should be issued at the time the money is collected and should match actual collection.2 Receipts not collected over the counter should be dispatched through mail the same day.3 Our review of the revenue records revealed that receipts for revenue collected from 16/07/10 to the date of audit totalling $416,073 have not been issued or dispatched to customers.

Refer Appendix 3.1 for details.


Issuance of receipts provides evidence for revenue collected and as such should be issued to customers on receipt of money.

Recommendations  The Commission should ensure that all the receipts are issued for any money collected including money directly deposited to the Commission’s bank account.

 The Commission should consider issuing online receipts for payments received online.

Management Comments No comments received from the Commission.
3.6 Lapse in insurance cover It is imperative that all risks of the business are always adequately covered.

2 Commerce Commission Finance Regulation 2010 Part 5.1.1 3 Commerce Commission Finance Regulation 2010 Part 5.1.2 Report of Statutory Authorities – June 2013 3 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI The audit noted that the Commission failed to renew its insurance coverage at the end of the insurance policy one year term on 28 July 2012.
The Commission’s insurance policy was without insurance cover for a period of 6 months until a new insurer was engaged on 21 February 2013.

Failure to renew insurance policy on time exposes the Commission to significant risks which may not be mitigated effectively.

Recommendation The Commission should ensure that insurance policy is always renewed on time and preparation of necessary documentation and approvals for renewals should commence well before expiry of existing insurance policy.
Management Comments No comment received from the Commission.
3.7 Financial Statements Errors An annual report must contain a statement of the Commission’s financial performance, including a statement of financial position, a statement of cash flows and any other information to give a true and fair view of the Commission’s financial affairs.4 The draft financial statements for the year ending 31 December 2012 submitted for audit contained the following errors and omissions which were subsequently corrected during the audit: Table 3.1: Financial Statement Errors Errors The Commission charged 12.5% on some of the revenue and expenditure, instead of using the new VAT rate of 15%.
Effects on Financial Statement VAT Output was understated by $4,071 and Revenue overstated by the same amount.

VAT Input was understated by $229 and Expenditure overstated by the same amount.

The fixed assets register included $17,930 worth of assets that have been fully depreciated.

Fixed Assets at Cost and Accumulated Depreciated have been overstated by $17,930.

Revenue arrears were not accounted for in the financial statement.
Accounts Receivable were understated by $31,670 Provision for leave entitlement was wrongly calculated Decrease in the Provision for leave entitlement was wrongly classified under amortisation of deferred income Provision for leave and salaries and wages were both overstated by $929.

Amortisation of Deferred Income was overstated by $3,859.

Errors and omissions in the draft financial statements may delay the audit.
4 Fiji Commerce Commission Decree 2010 section 25 (3) Report of Statutory Authorities – June 2013 4 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI Recommendations The Commission should thoroughly check, for accuracy and completeness, drafts financial statements before submission to the Auditor General for audit.

Management Comments No comment received from the Commission.
Report of Statutory Authorities – June 2013 5 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI APPENDIX 3.1 The details of receipts that were prepared but not issued are as follows: Date Vendor Details 16/07/10 06/07/10 Voice IP (Fiji) Ltd Vendor details withheld Prices & Income Board 030/8/10 16/07/10 23/09/10 23/08/10 16/09/10 19/10/10 29/10/10 (Fiji) Digicel Voice IP (Fiji) Ltd Chief Registrar High Court Labasa Office Voicenet IP Limited Joel Abraham IP Voicenet Limited Digicel Vodafone Fiji Ltd Cash Labasa Office PIB DHL Govt of Fiji Digicel (Fiji) SSNED Digicel Unwired Fiji Kidanet Captain Cook Cruises Unwired Fiji Trading Account 04/12/10 02/12/10 02/12/10 02/12/10 02/12/10 24/12/12 24/12/10 30/12/10 12/08/10 MIT 14/01/10 03/02/11 03/02/11 08/03/11 10/03/11 30/03/11 30/03/11 30/03/11 24/05/12 22/06/12 31/01/12 24/05/12 FIRCA Latent Workforce FIRCA Digicel Small Development 03/02/12 24/02/12 11/04/12 Sanjay Menon Christine Kumar Sanjay Menon 26/04/12 Air Pacific 17/09/12 14/11/12 Commerce Fiji Commission Pacific Technologies User pay payment Transfer of bank balance to Commission for 1/7/10 merger User Pay August (online) User Pay payment for July 2010 Case #98/10 & Case 872/10 Boat Hire Refund (direct deposit) User Pay payment for July 2010 Meal Allowance refund User Pay payment for Sept, Oct & Nov 2010 User Pay September Flashnet reimbursement CHQ#1197 CHQ 1292 for itinerary changes travel Boat Hire Refund Transfer from PIB Account Abhishek's Case refund CR 166/10;CR167/10;CR168/10 User Pay for Oct - Dec
 2010 3rd Quarter Grant Air ticket reimbursement User Pay for Feb & Jan balance User pay for Dec 2010 & Jan 2011 User Pay Feb 2011 User Pay determination User pay for Feb & March 2011 Reimbursement current a/c on 07/01/11 VAT refundable reimbursement User Pay part payment for trading account from User Pay for Jan 2012 Air ticket reimbursement for CEO Australian Workshop Advanced unspent for PIB duties in Levuka Commissioner's meeting expenses refund Advanced unspent for PIB duties around Vanua Balavu Air fare refund for Rotuma-Suva for Mr. J.
A & Mr. V. R Refund for attache allowance due to officer for P12/12 Refund for return of laptop purchased for FCC Officer DL User Pay arrears payment 21/12/12 20/12/12 Report of Statutory Authorities – June 2013 Latent Workforce Fiji Commerce Rotuma TMO refund Receipt No.
67 73 Amount ($) OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI Date Vendor Details Receipt No.
Amount ($) 07/02/13 01/02/13 11/03/13 Commission FIRCA Digicel Judicial Department 15/03/13 FEA 25/03/13 FEA 01/03/13 01/03/13 27/03/13 08/03/13 03/04/13 IP IP Voicenet Limited Digicel Voicenet Limited Cuvu Supermarket Unwired Fiji (Fiji) (Fiji) Nadro 05/04/13 Fintel TOTAL refund (FCC VS Samuela) VAT refundable User Pay Feb 2013 levy (DD on 01/02/13) Court cost CHQ#045570 on 27/02/12 User Pay levy for Jan & Feb ANZ Bank CHQ#119252 on 27/02/13 User Pay CHQ#119394 on 07/03/13 User Pay payment for Feb 2013 as per DD on 01/03/13 User Pay Mar 2013 levy (DD on 01/03/13) User Pay payment for Mar 2013 as per DD on 27/03/13 Spot fine#0351 of 16/07/12 as DD on 08/03/13 for March ANZ Bank levy User pay for Feb & March 2013 as per CHQ#006333 of 28/3/13 User Pay Levy for month of Feb & Mar as per WBC Chq#002746 of 14/3/13 1326 1330 1336 1337 1338 1339 1340 1341 1342 1343 1344 3,880.26 1,022.22 33.75 511.10 255.55 153.33 1,022.22 153.33 150.00 306.33 2,044.44 416,073.38 Report of Statutory Authorities – June 2013 7 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI SECTION 4: NATIONAL FIRE AUTHORITY The National Fire Authority (NFA) was established as a corporate body in 1994 under the National Service Act 1994.
The duties of the Authority are:          establish Fire Districts in the areas to which they cover and ensure that the District Fire Officer conforms to the NFA Act and maintains an efficient fire service having regard to the life and property, which he is under an obligation to protect and to the financial capacity of the district; coordinate the units of fire services for the purposes of fire protection, reinforcement at serious fire or other emergencies; encourage, supervise or carry out fire prevention activities and also experiment or research work with respect to fire service methods, equipment, organization or coordination with other services; establish courses of training and generally direct the training of the members the fire services; provide for the inspection of training of brigades, and for such degree of standardization of plan, equipment and training as it considers necessary for combined operations; inspect in relation to fire safety premises whether public or otherwise; arrange for obtaining, by inspection or otherwise, information required for fire fighting purposes with respect top the character of the building and other property in the Fire District and in any area in which the Authority is under an obligation to protect, the available water supplies, means of access thereto, and other material circumstances; provide consultancy services on fire fighting and fire fighting equipment and Perform such other duties as the Minister may from time to time direct.
Table of Content SECTION 4: NATIONAL FIRE AUTHORITY ................................................................................................ 1 PART A – FINANCIAL INFORMATION ......................................................................................................... 1 4.1 4.2 4.3 AUDIT OPINION ................................................................................................................................. 1 ABRIDGED STATEMENT OF FINANCIAL PERFORMANCE ..................................................................... 2 ABRIDGED STATEMENT OF FINANCIAL POSITION .............................................................................. 2 PART B – CONTROL ISSUES ............................................................................................................................ 3 4.4 4.5 4.6 4.7 4.8 FIRE LEVY RECEIVED FROM INSURANCE COMPANIES ....................................................................... 3 WATER LEVY RECEIVED FROM WATER AUTHORITY OF FIJI ............................................................. 4 VISA CARD ACQUITTALS .................................................................................................................. 5 NO TENDER FOR PROCUREMENT OF PROTECTIVE CLOTHING ............................................................ 6 NO RECORDING OF INCOMING INVENTORY ....................................................................................... 7 PART A – FINANCIAL INFORMATION 4.1 Audit Opinion The audit of the financial statements of the Authority for the year ended 31 December 2010 resulted in the issue of an unqualified audit report.
However, attention was drawn to the trade and other payable balances of $815,593 which include accruals (creditors) totalling $500,061.The Authority did not maintain the accruals account properly prior to 2010.

Creditors were not booked at the time of transaction which resulted in a debit balance in Report of Statutory Authorities – June 2013 1 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI several creditors account when payments were made.
Therefore the amount of $500,061 booked as accruals may be incorrect.
4.2 Abridged Statement of Financial Performance Year Ended 31 December Income Fire Levy Government Grant Other Income Total Income Expenditure Personnel Expenses Depreciation & Amortization Others Total Expenditure Net Surplus/(Deficit) for the Year 2010 ($) 2009 ($) 6,261,037 1,233,889 1,616,865 9,111,791 5,333,048 905,639 2,006,220 8,244,907 866,884 5,047,927 1,422,222 1,218,589 7,688,738 4,932,500 885,758 1,825,600 7,643,858 44,880 The Authority surplus increased by $822,004 in 2010 compared to 2009.
This was largely due to increase in fire levy by $1,213,110 or 24% and increase in other income by $398,276 or 32.6%.
4.3 Abridged Statement of Financial Position As at 31 December Assets Cash & Cash Equivalents Trade & Other Receivables Inventories Property, Plant & Equipment Total Assets Liabilities Bank Overdraft Trade & Other Payables Employee Entitlement Deferred Revenue Total Liabilities Net Assets Accumulated Funds Retained Profits Total Accumulated Funds 2010 ($) 2009 ($) 1,165,678 1,473,806 80,849 5,918,499 8,638,832 0 1,623,428 83,646 6,148,192 7,855,266 0 986,571 425,805 7,980 1,420,356 7,218,476 344,588 679,579 273,342 206,165 1,503,674 6,351,592 7,218,476 7,218,476 6,351,592 6,351,592 Cash at bank improved from a bank overdraft of $344,588 in 2009 to a cash at bank balance of $1,165,678 in 2010 mainly due to increase in the fire levy contributions.
This resulted in the increased in net assets by $866,884 or 14% in 2010.
Report of Statutory Authorities – June 2013 2 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI PART B – CONTROL ISSUES 4.4 Fire Levy Received from Insurance Companies The Minister may from time to time, after consultation with the Commissioner of Insurance and other person or persons he deems appropriate, make in such form and containing such details (including provision for the payment of interest) as he may determine, a levy order imposing a levy on any insurance policy or class of insurance policy written in Fiji and the amount payable under such levy order shall be paid to the authority at the time and manner specified in such levy order provided that a levy order may make different provisions in relation to different classes of insurance policies.1 According to the Insurance Policy Levy Order issued in 1995, the following prescribed fire service levy or individual contribution shall be charged for each class of insurance policy specified below, where the inception date is on or after the 1st day of August 1995: a) Commercial Fire Policies: all policies covering commercial (non-domestic) property for the peril of fire.
This will include fire, industrial all risks and contractors all risk policies.

Prescribed levy – 0.06% of the policy sum insured or total value of the property whichever is greater.

b) Domestic Fire Policies: all policies covering domestic property for the peril of fire.

This will include house owners, householders and contract works policies.
Prescribed levy – 0.06% of the policy sum insured or total value of the property whichever is greater.2 NFA received total of $6,788,492 from Insurance Companies for the year ending 21/12/10 as fire levy.

However, audit noted that NFA did not verify in any way to ascertain the amount paid by insurance companies was correct.

Refer to Table 4.1 for details of amount received.


Table 4.1: Details of Fire Levy For 2010 Insurance Company Insurance Company 1 Insurance Company 2 Insurance Company 3 Insurance Company 4 Insurance Company 5 Insurance Company 6 Insurance Company 7 Insurance Company 8 Total Fire Levy Fire Levy Received 2010 ($) 236,736 1,700,895 596,014 2,229,575 271,044 1,260,265 479,692 14,271 6,788,492 Under the current arrangement NFA accepts the amount paid by the Insurance Companies as fire levy.
As a result audit could not ascertain whether the amount due from Insurance Companies as fire levy was fully received by NFA.

1 National Fire Service Act, 1994 section 29 (1) Insurance Companies Contributions 2 Insurance Policy Levy Order - National Fire Authority Compliance and Levy Report of Statutory Authorities – June 2013 3 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI Recommendation NFA must verify the amount paid by Insurance Companies as fire levy to ensure correct amount is received.
Management Comments The Authority is in the process of recruiting an Audit and Compliance Officer who will be tasked to verify that insurance levy is levied on any insurance policy or class of insurance policy written in Fiji and that such levies are correctly calculated and remitted to the Authority on a timely manner.
4.5 Water Levy Received From Water Authority of Fiji In order to raise any amount required to be contributed by it towards the annual expenditure of the Authority, the Minister in consultation with the Authority may make and levy for that purpose a rate on each water meter from the owner or occupier of any premises within any fire district.
Provide that the owner of any property which is already under an insurance policy levy may apply to the Authority from exemption from any levy made under this section.3 The prescribed levy on each water meter shall be 50 cents per month as effective from the 1st day of August 1995.4 A total of $374,235 was paid by Water Authority of Fiji (WAF) to NFA as water levy.

The audit noted that NFA did not verify in any way to ascertain the amount paid by WAF was correct.
Details of the levy received are shown in Table 4.2.

Table 4.2: Water Levy Received in 2010 Date 26/2/10 07/04/10 07/04/10 17/5/10 17/05/10 22/7/10 10/9/10 15/10/10 17/11/10 14/12/10 Total Receipt Number 15796 16304 16304 16674 16674 17098 17568 18227 18379 20666 Amount ($) 32,478.77 34,227.41 36,664.34 41,821.89 44,750.38 30,856.96 55,892.90 31,342.95 38,749.66 27,449.59 374,234.85 Under the current arrangement NFA accepts the amount paid by WAF as water levy.
As a result audit could not ascertain whether the amount due from WAF as water levy was fully received by NFA.

Recommendation NFA must verify the amount paid by WAF as water levy to ensure correct amount is received.
3 National Fire Authority Service Act 1994, section 30 Levy on Water Meters 4 Levy on Water Meter Order, 1995 – National Fire Authority Compliance and Levy Report of Statutory Authorities – June 2013 4 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI Management Comments As stated above, the Audit and Compliance Officer will be tasked to verify that the water levies are calculated on all water meters within fire boundaries and those levies are correctly calculated and remitted to the Authority on a timely manner.
NFA will sign a Memorandum of Understanding with Water Authority of Fiji to ensure monthly payment and proper levies reconciliation.

4.6 Visa Card Acquittals When using visa cards the officer concerned within seven days of return to duty, shall submit a statement of expenses with supporting vouchers.

5 NFA maintained a Visa Card for official purposes during 2010.

Arrangement was made with the bank to automatically replenish the balances on the visa cards on the agreed due date.
This was facilitated by debiting NFA operating account and crediting the visa card account with the amount expended during the preceding period.

Subsequent to the replenishment of the credit card accounts, the Visa card holders were required to provide the acquittals of the Visa Card usage to facilitate posting of the expenses into respective expense accounts.

The general ledger account for visa cards had a cumulative balance of $28,274 as a t 31/12/10.
These represented the expenses incurred using visa cards not acquitted over the years.

The audit also noted that a total of $7,328 of expenses were incurred using visa card by the former Acting Chief Executive Officer during 2010 of which only $3,020 of the total expenses incurred was supported with acquittals while the balance of $4,308 was not acquitted.

Refer to Table 4.3 for details.
Table 4.3: Credit Card Expenses Visa Card Number 640000085736 640000085736 640000085736 640000085736 640000085736 640000085736 Card Holder Acting CEO Acting CEO Acting CEO Acting CEO Acting CEO Acting CEO Amount Used ($) Remarks 712 Amount not acquitted 75 Amount not acquitted 240 Amount not acquitted 324 Amount not acquitted 2,207 Amount not acquitted 750 Amount not acquitted Total 4,308 In absence of acquittals for credit card expenses it could not be determined whether the expenses incurred by the card holders were for official purposes or personal in nature.
Recommendations NFA should ensure that: 5 National Fire Authority Financial Instructions, section 3.11.3 Report of Statutory Authorities – June 2013 5 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI all acquittals for credit card transactions are obtained from the card holders.

  use of credit cards is ceased.

Management Comments Use of credit card has been ceased by the Authority.
The Authority requires the use of Visa cards to be properly acquitted and if any expense incurred is found not to be in the business nature, than such amounts for expenses incurred are recovered from respective staffs pay.

Please note that the Authority has recovered the balance of un-acquitted funds from Acting CEO's final payout.

4.7 No Tender for Procurement of Protective Clothing Public Tenders to be called for goods and services in excess of $10,0006.
NFA purchased 100 sets of level 2 fire tunics – protective clothing for fire fighters in 2010 from a supplier in China.

The total cost of purchase was $123,134.

Following anomalies were noted.

 NFA did not call for tenders before selecting the supplier to supply protective clothing.

Refer to Table 4.4 for details of purchases.

Table 4.4: Payment Details Date 07/06/11 Cheque Number 34811 Amount ($) 38,046 Payment of 30% as 1st instalment on the procurement of 100 sets of level 2 fire tunics.
Details 28/06/11 34942 36,625 Payment of 30% as 2nd instalment on the procurement of 100 sets of level 2 fire tunics.

14/07/10 35117 48,463 Payment of 40% as 3rd instalment on the procurement of 100 sets of level 2 fire tunics.

Total 123,134  NFA did not obtained Board approval before purchasing the protective clothing from China for total cost of $123,134.
 To facilitate the purchase of protective clothing from China, NFA entered into an agreement on 8/4/2008 with a Chinese national, who acted as a middleman.

The middlemen was to act as NFA’s agent in communicating with Chinese Authorities and business houses including making enquiries on NFA behalf in accordance with NFA written instructions.

A total of $38,820 was paid to the middlemen by NFA since 2008 up till 31/12/2010.
The findings show that proper procurement procedures were not followed by NAF when procuring goods and services.

In addition unnecessary expenses were incurred for purchasing the protective clothing through a middleman.

6 National Fire Authority - Financial Instructions, section 6.2(c) Report of Statutory Authorities – June 2013 6 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI Recommendations NFA must:   call for tenders for all purchases in excess of $10,000.
ensure that public funds are used with due economy.

Management Comments The Authority has tendered all goods and services in excess of $10,000 and is in the process of finalizing the agreements with the respective suppliers.
4.8 No Recording of Incoming Inventory Either on the satisfactory receipt of newly purchased goods or transfer of existing assets, the relevant cost centre manager must ensure that the relevant asset register has been updated with the required information.7 NFA purchased uniforms for all staffs which included corporate and fire officers for total cost of $57,521 in 2010.

The audit noted that stores record such as number purchased, number issued, date of issue, person receiving etc.
were not recorded by NFA.

There is a high risk of misappropriation of stores due to poor control.

Recommendation NFA must ensure the proper stores records are maintained.

Management Comments Currently the Authority is maintaining records of all inventory items purchased and distributed to stations and such records are verified on a monthly basis by the Accountant.

The Authority is also conducting its Annual Stock Take to ascertain that the records are properly and there are if any minimal stock loss.
7 Finance and Accounting Directions, section 9.4.1 Report of Statutory Authorities – June 2013 7 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI SECTION 5: LAND TRANSPORT AUTHORITY The Land Transport Authority is a statutory body established under the Land Transport Act 1998.

The Authority is responsible for administering the provisions of the Act under the administration and policy rule of the Minister responsible for Transport.
The Authority’s functions are outlined in Section 8 of the Land Transport Act 1998 and include the following:  To devise, initiate, and carry out measures for the co-ordination, improvement and economic operation of passenger transport and goods transport by road;  To ensure so far as is practicable the provision of road transport passenger services adequate to meet the requirements of the public;  To register vehicles, license drivers and establish standards for such registration and licensing consistent with the objectives of road safety;  To develop and implement traffic management strategies and practices consistent with the needs of road users and the objectives of road safety, in conjunction with highway authorities;  To develop and implement enforcement strategies in consultation with the Commissioner of Police consistent with road safety and road infrastructure protection objectives; and  To do anything incidental or conducive to the performance of any of the preceding functions.
Table of Content SECTION 5: LAND TRANSPORT AUTHORITY ............................................................................................ 1 PART A – FINANCIAL INFORMATION ......................................................................................................... 1 5.1 5.2 5.3 AUDIT OPINION ................................................................................................................................. 1 ABRIDGED STATEMENT OF COMPREHENSIVE INCOME ...................................................................... 2 ABRIDGED STATEMENT OF FINANCIAL POSITION .............................................................................. 2 PART B – CONTROL ISSUES ............................................................................................................................ 3 5.4 5.5 5.6 5.7 5.8 5.9 5.10 5.11 5.12 5.13 5.14 5.15 5.16 QUALIFICATION OF AUDIT OPINION .................................................................................................. 3 CASH SHORTAGE RECOVERY ............................................................................................................ 4 BANK AND BALANCE SHEET RECONCILIATIONS ............................................................................... 4 AMOUNT OWED TO GOVERNMENT ..................................................................................................... 6 WEAK INTERNAL CONTROLS FOR INVENTORY ................................................................................... 6
6 OVERSTATEMENT OF INVENTORY BALANCE ...................................................................................... 7 UNEXPLAINED VARIANCES IN SALARY ACCRUALS ACCOUNT ............................................................ 8 PAYROLL CREDITORS – NO PROPER RECONCILIATION ........................................................................ 9 UNVERIFIED VARIANCE - PAYE ........................................................................................................ 9 EXCESSIVE ACCUMULATION OF ANNUAL LEAVE ............................................................................. 10 RECOVERABILITY OF DEPOSITS ....................................................................................................... 12 POSTMASTER RECEIVABLES ............................................................................................................ 12 CONFLICT OF INTEREST IN INTERNAL AUDIT REPORTING ................................................................. 13 __________________________________________________________________________________ PART A – FINANCIAL INFORMATION 5.1 Audit Opinion The audit of the financial statements of the Land Transport Authority for the year ended 31 December 2011 resulted in the issue of a qualified audit report.
The issues qualified are as follow:  The carrying amount of property, plant and equipment was $9,660,200.

The amount of $1,256,807 was unable to be substantiated as the Authority was not able to provide for audit Report of Statutory Authorities – June 2013 1 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI proper reconciliation.

Accordingly, the accuracy, completeness and existence of property, plant and equipment as at 31 December 2011 was not able to be ascertained.
 The Authority’s depreciation charge was stated in the statement of comprehensive income at $17,447 rather than the amount of $672,448 for the year.

Depreciation was supposed to be calculated over the useful life of property, plant and equipment using the straight line method.

The Authority’s records indicate that management only depreciated a few assets that were acquired during the financial year.
Accordingly, the carrying amount of property, plant and equipment for the year is overstated by $655,001 whereas the operating expenses and the loss were understated by the same amount.

 Included in the financial statements was comprehensive income valued at $134,552.

The audit was unable to substantiate the amount of $134,552 as the Authority was not able to provide proper reconciliation.
Accordingly, the accuracy and completeness of the balance of other comprehensive income as at 31 December 2011 was not able to be ascertained.
5.2 Abridged Statement of Comprehensive Income Year Ended 31 December Revenue Grant received Total Revenue Expenditure Administration expenses Operating expense Other expenses Total Expenditure Loss for the Year Other comprehensive income Total Comprehensive Loss 2011 $ 2010 $ 8,945,821 8,945,821 5,845,693 3,183,591 522,592 9,551,876 (606,055) 134,552 (471,503) 8,888,889 8,888,889 5,658,476 3,186,645 408,106 9,253,227 (364,338) 72,599 (291,739) Total comprehensive loss increased by $179,764 or 62% in 2011 compared to 2010.
The increase was primarily attributed to increasing expenditures, specifically administrative and other expenses.
5.3 Abridged Statement of Financial Position As at 31 December Assets Cash and cash equivalents Receivables Inventories Non-current assets - Property, plant and equipment Total Assets Liabilities Creditors and other accruals Owing to Government consolidated account 2011 $ 2010 $ 2,200,113 1,402,876 555,443 9,660,300 13,818,732 1,907,894 946,071 489,088 9,255,146 12,598,199 1,040,314 447,214 920,765 212,233 Report of Statutory Authorities – June 2013 2 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI As at 31 December Capital grant Other provisions Total Liabilities Net Assets Capital and Reserves Capital Retained Earnings Total Capital and Reserves 2011 $ 1,488,690 445,671 3,421,889 10,396,843 2010 $ - 361,874 1,494,872 11,103,327 1,650,146 8,746,697 10,396,843 1,650,146 9,453,181 11,103,327 Net assets declined by $0.7 million or 6% in 2011 compared to 2010.
The decrease in net assets was mainly due to an increase in liabilities through capital grant of $1.48 million accounted for in 2011.

In addition, the Authority did not transfer to Government’s consolidated funds fees, levies and charges collected from 2010, thus the increase of funds owed to Government Consolidated Accounts by 110% as at 31 December 2011.
PART B – CONTROL ISSUES 5.4 Qualification of Audit Opinion The audit of the Financial Statements for the year ended 31 December 2011 resulted in the issue of qualified audit opinion.

The qualifications include the following:    Included in the financial statements are property, plant and equipment amounting to $9,660,300.

An amount of $1,256,807 could not be substantiated as the Authority was not able to provide audit with proper reconciliations.
Hence, audit was not able to ascertain the accuracy, completeness and existence of property, plant and equipment as at 31 December 2011.

The Authority’s depreciation charge is stated in the statement of comprehensive income at $17,447 rather than the amount of $672,448 for the year.

Depreciation is supposed to be calculated over the useful life of Property, plant and equipment using the straight line method.
The Authority’s records indicate that management only depreciated a few assets that were acquired during the financial year.

As a result, the written down value of property, plant and equipment for the year is overstated by $655,001 whereas the operating expenses and the loss is understated by the same amount.

Included in the financial statements is comprehensive income amounting to $134,552.
Audit was unable to substantiate the amount of $134,552 as the Authority was not able to provide a proper reconciliation.

As a result audit was not able to ascertain the accuracy and completeness of the balance of comprehensive income as at 31 December 2011.

Recommendations  The internal control procedures in the Accounts Section, specifically reconciliation of accounts and supervisory checks should be improved.
 Proper accounting records should be maintained and made available for audit purposes when requested.

Report of Statutory Authorities – June 2013 3 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI Management Comments Recommendation is noted.

The authority is in the process of reviewing finance policies to ensure that the internal control procedures are strengthened and proper records are maintained at all times for audit purposes.
5.5 Cash Shortage Recovery Any shortages must be fully repaid immediately by the cashier responsible when balancing total cash/cheques with total revenue receipts issued before handing over to the supervisor for verification.

The supervisor shall ensure that the total revenue for the total receipts issued for the day tally when reconciling.
If the shortage is due to a computer error, the supervisor must ascertain the circumstances surrounding the shortage/surplus and advise MIT for rectification of the error.
If the supervisor has established that the shortage is correct and due to negligence, it must be fully recovered right away or a recommendation be made to Manager Accounts for recovery from the officers’ salary for the pay period immediately after.1 GMFA shall issue a letter of caution to reprimand the cashier for all shortages, beaching procedures, unsatisfactory work performance and negligence resulting in losses of revenue according to the disciplinary procedures.
In cases where theft, forgery and corruption have occurred, dismissal shall be instigated according to the disciplinary procedures.

A cashier who does not record any shortages in a quarter shall be issued with a letter of commendation with a copy in her PF for reference purposes.2 The audit of the cash records revealed that the Authority has not taken any necessary steps to recover cash shortages from its cashiers.

For example, in 2010, the Labasa Office recorded cash shortage of $4,517.45.
The Authority has not been upholding its finance policies on cash shortages increasing the risk of fraud and error.

Failure to address cash shortages could have significant negative financial implications.

Recommendation It is recommended that management put in place effective controls and polices on cash shortages and the recovery of cash shortages.

Management Comments Recommendations noted.

The authority will ensure that the policy on Cashier Shortage is strengthened.
Recovery of Cashier shortages from staff’s salary has been on going.
5.6 Bank and Balance Sheet Reconciliations All balance sheet items must be reconciled monthly with a breakdown of the GL balances prepared by the GL Clerk, checked by the Financial Accountant and certified by the Manager Accounts.3 Monthly Bank Reconciliations shall be prepared by the Bank Reconciliation Clerk, checked by the Financial Accountant and certified by the Manager Accounts.4 1 Land transport Authority’s Finance Manual – Section 18.2.1 to 18.2.3 2 Land Transport Authority’s Finance Manual – Section 18.2.4 to 18.2.6 3 Land Transport Authority’s Finance Manual – Section 3.9.1.1 4 Land Transport Authority’s Finance Manual – Section 3.9.2.1 Report of Statutory Authorities – June 2013 4 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI The following anomalies were noted from our review of balance sheet items:  Cash at bank and cash equivalent records revealed no evidence of the bank reconciliations being reviewed by the senior accounts officer for the following bank accounts: TABLE 5.1: BANK RECONCILIATIONS NOT REVIEWED BY SENIOR ACCOUNTS OFFICER Particulars Bank account Colonial National Bank Account Code 1030 1031  The Authority failed to prepare any monthly bank reconciliation for the Bank of the South Pacific (BSP) – Retention Fund (Taveuni) Account for the year.
As at 31/12/11, the balance in this account was $447,214.

 All other balance sheet account reconciliations have not been signed to indicate that the review and approval process has been followed.
Failure to prepare bank reconciliation, other balance sheet account reconciliations or the implementation of an independent review function for reconciliation that have been carried out increases the risk of cash balance being misstated and any fraudulent activities or other irregularities may not be detected on a timely basis.

Recommendations  The Authority should ensure that all bank reconciliation prepared is reviewed by independent senior personnel.
Any discrepancies noted should be investigated and corrected on a timely manner.

 The Authority should ensure that monthly bank reconciliations are prepared for all cash accounts and thoroughly reviewed.

 The Finance Accountant and General Manager Finance and Administration should endorse the reconciliation to indicate completion of review process.

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

The authority will ensure that all Bank Reconciliations are prepared on a monthly basis and thoroughly reviewed by Senior Staffs and GMFA.

Recommendations noted.

The monthly Bank Reconciliations for all cash accounts is on-going and reviewed thoroughly by senior finance staffs.

Recommendations seriously considered.

The authority will ensure that all reconciliations are reviewed and certified by the Senior Staffs.
The authority is also in the process of reviewing the financial policy to strengthen internal control procedures in the accounts section.

Report of Statutory Authorities – June 2013 5 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI 5.7 Amount owed to government The Authority under Promulgation 49 of 2007 and Promulgation 1 of 2009 is responsible for the collections of all revenues apart from government grant, which are deposited directly into the Government’s Consolidated Fund Account.
The Authority does not receive these funds in its own bank account except for those fees, levies and charges received in Taveuni.

The Authority opened a bank account number 3095514 to deposit all related revenue items with the idea of transferring the balance to government consolidated account.

The audit noted that for financial periods 2010 and 2011, the Authority failed to transfer this revenue to the government consolidated account.

As at 31/12/11, the balance in the account was $447,214.
As a result, the Cash at bank balance in the financial statements may not be fairly reflected.

Recommendation The Authority should pass the following journal entries in order to correct its books, however, the financial statements have been adjusted accordingly: Retained Earnings Government revenue Dr Cr $447,214 $447,214 (To adjust for payables of government revenue) Management Comments Recommendations noted.

The authority is working towards getting all funds transferred to consolidated fund account.
The authority will ensure that funds are transferred on monthly or weekly basis.

5.8 Weak internal controls for inventory There shall be maintained proper records of movement of all stock used by all functional areas of LTA.

Adequate stock levels depending on the demand for each category of stock will be maintained at all times to avoid disruption to daily operations and for continuous customer services.

All stores shall be properly kept and securely locked in a storeroom with restricted access.
The delegated officer in the cost centre or Finance Officer at Accounts, HQ shall be responsible for the maintenance and security of stores.5 The audit of the inventory records revealed that the Authority has poor controls to safeguard inventories.
The following ineffective controls were noted: Stock cards are not maintained;   Quarterly stock were not performed;  Monthly reconciliations were not prepared by the Stock Officer; Stock reports were not reviewed by the Senior Officer; and  Stock valuation report was not prepared by the Stock Officer.
 5 Land Transport Authority’s Finance Manual – Section 13.1.1 to 13.1.3 Report of Statutory Authorities – June 2013 6 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI The above control issues increases the risk of inventory theft, failure to detect errors, non-compliance with IFRS and inventory accounts being materially misstated.

Recommendations The internal control procedures in the Stores Section, specifically supervisory checks should be strengthened to avoid such discrepancies.
It is recommended that the Authority reviews its finance manual with the following policies and procedures are included and implemented:  monthly stock takes should be performed.

However, this should be restricted to sample counts;  every quarter, management should ensure that a full stock take is done.
Of the quarterly stock take, one will be in the presence of the external auditors;  monthly stock reconciliations (stock valuation) to be prepared by the Stock Officer and reviewed by the Finance Accountant or General Manager Finance and Administration;  review the inventory in stores and indicate slow moving or obsolete inventory; and  invest in inventory software so that proper record keeping and reconciliations are done with actual counts.

Management Comments Recommendations noted.


The authority will ensure proper procedures are in place for proper controls and recording of inventories on periodical basis.

The authority is also in the process of reviewing finance policy on inventories and stock management.

5.9 Overstatement of inventory balance The closing monthly balances for each inventory item should tally with the monthly balances on the respective tally cards.
The inventory account General Ledger (GL) monthly balance should agree with the total monthly closing balances on the stock sheet.

Any variances must be verified.6 Review of inventory journals revealed that the GL balance was overstated by $445,910 hence did not reconcile with the inventory valuation report.

It was also noted that there was no movements in Work in Progress since 2010.

The balance in this account is $106,199.

As a result, inventory may not be fairly stated in the financial statements.
Recommendations  The internal control procedures in the Accounts and Stores Section, specifically supervisory checks should be strengthened to avoid such discrepancies.
 The Authority should ensure that the following journal entries are passed into the system in order to fairly state and correctly classify the accounts: GL Code Particulars DR CR New code 1310 Inventory Write – Off Inventory Account 225,078 225,078 6 Land Transport Authority’s Finance Manual – Section 13.6.8 to 13.6.9 Report of Statutory Authorities – June 2013 7 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI (Being writing off inventory account amount) New code 1315 (Being writing off inventory account amount) Inventory Write – Off Inventory Account 220,832 1312 1316 (Being reclassification of inventory WIP to finished goods) Inventory MIS Inventory WIP 106,199 220,832 106,199 Management Comments Recommendation is noted.
The authority is working towards ensuring that proper procedures are in place for proper controls and recording of inventories on periodical basis.

5.10 Unexplained variances in salary accruals account All balance sheet items must be reconciled monthly with a breakdown of the GL balances prepared by the GL Clerk, checked by the Financial Accountant and certified by the Manager Accounts.7 A review of the salary accrual GL balances (Account Nos.
2381 to 2389) revealed an unexplained variance of $55,801 as at balance date.

Refer Table 5.2 for details: TABLE 5.2: UNEXPLAINED VARIANCE IN SALARY ACCRUAL GL Particulars Total as per LTA’s record Total as per audit calculation (reasonable) Variance Amount $ 14,010.00 69,811.00 (55,801.00) According to audit calculation, the salary accruals were from both staff salary fortnightly and weekly reports.

The staff fortnightly report was for period of ten working days beginning 26/12/2011 to 06/01/2012.
Therefore, half of the total salary in the payroll report should be accrued.

In addition, the weekly pay report for the period 26/12/2011 to 30/12/2011 should also be accrued as this pay was processed in January 2012.

Refer to audit calculation below for details: Fortnightly pay (the amount above, is for the 10 days ending 06/01/2012.
Of the 10 days, 5 relates to the accounting period) (26/12/11 to 06/01/12) $135,401 Salary accrual relating to the fortnightly pay Weekly pay Amount as per audit calculation (26/12/2011 to 30/12/12) 67,700 2,111 $69,811 Therefore the salary accrual account balance may not be fairly stated in the financial statements.
7 Land Transport Authority’s Finance Manual – Section 3.9.1.1 Report of Statutory Authorities – June 2013 8 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI Recommendation The Authority should review the GL for the above codes and offset both the accruals and the corresponding reversals.

The Authority should also investigate whether the un-reconcilable amounts are either an over or under accrual.

Necessary journal entries should be passed so that the above accounts are reasonably stated.
Management Comments Recommendations noted.

The authority is in the process of reviewing the Salary accrual account and the reconciliations have been on-going and done on a monthly basis.
5.11 Payroll creditors – no proper reconciliation All balance sheet items must be reconciled monthly with a breakdown of the GL balances prepared by the GL Clerk, checked by the Financial Accountant and certified by the Manager Accounts.8 Payroll creditors are the amount the Authority owes to its employees for over deductions, over– surcharges and others.

The audit noted that almost 99% of the payroll liability has been carried forward from prior years.
As at 31/12/11, the balance for Payroll Creditors account was $49,364.

The Authority failed to provide a proper reconciliation for payroll creditors.

Recommendations  The Authority should assign personnel to prepare a report/reconciliation as to the exact amount that is being owed to employees.

 Payroll Creditors reconciliation should be regularly carried out and by the Financial Accountant.

Management Comments Recommendations noted.


The authority will ensure that the payroll reconciliations are done on a monthly basis, checked by the Financial Accountant and certified by Manager Accounts or GMFA.
5.12 Unverified variance - PAYE All balance sheet items must be reconciled monthly with a breakdown of the GL balances prepared by the GL Clerk, checked by the Financial Accountant and certified by the Manager Accounts.9 The audit of the trial balance revealed that the PAYE clearing account (Account No.

2331) had a balance of $85,527 as at 31 December 2011.

From this balance, the December 2011 PAYE of $25,659 was paid10 in January 2012 whilst balance of $59,868 remained unverified as at balance date.
PAYE Clearing account balance may not be fairly stated in the financial statement.

8 Land Transport Authority’s Finance Manual – Section 3.9.1.1 9 Land Transport Authority’s Finance Manual – Section 3.9.1.1 10 Cheque No.

12245 Report of Statutory Authorities – June 2013 9 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI Recommendation The Authority should rectify the unexplained balance and if need be previous years records reviewed and corrected to prevent misstatements.
Management Comments The Reconciliation of PAYE clearing account is in process including reconciliations for prior years.

The authority will ensure that the balances are fairly stated in the financial statements.

5.13 Excessive accumulation of annual leave The Partnership (PA) and the Collective Agreement (CA), states that the maximum annual leave days that can be accrued are 31 days for Partnership agreement and 10 days can be taken over to the next financial year for Collective agreement.
The Partnership agreement entitles staff to 25 working days annual leave.

Those under the collective agreement have either 18 or 21 days annual leave depending on position.

Review of leave records revealed the following anomalies:  Annual leave have been accumulated for more than the agreed number of annual leave days.
Refer to Table 5.3 for examples: TABLE 5.3: EXCESSIVE ACCUMULATION OF ANNUAL LEAVE AS AT 31 DECEMBER 2011 Employee Initial Agreement Accumulated Leave Balance Employee Initial Agreement Accumulated Leave Balance AA AR BRP BLS FCK IM IR IK JS JV KC LT MM MIM MF MF MV PA PA PA PA .
PA PA PA PA PA PA PA PA PA PA PA PA PA 36.46 AF 44.82 AK 61.08 BJ 60.50 DV 45.23 DJ 46.79 43.34 JU JB 36.64 JB 40.27 58.92 JL JS 41.81 JT 34.63 KS 36.92 MLR 41.29 MS 66.53 PP 33.22 RP 37.41 SK CA CA CA CA CA CA CA CA CA CA CA CA CA CA CA CA CA 38.50 41.83 52.90 41.32 65.30 45.21 50.26 41.00 35.45 55.36 38.13 40.04 44.14 33.29 39.00 50.06 32.32 Report of Statutory Authorities – June 2013 10 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI Employee Initials Agreement Accumulated Leave Balance Employee Initial Agreement Accumulated Leave Balance MD MF ML NT NS PYR RNB RP SDD PA PA PA PA PA PA PA PA PA 40.18 TAT 36.90 VSJ 32.92 VA 50.47 WY 47.50 YR 34.89 SH 85.50 TDM 47.96 US 32.02 VK CA CA CA CA CA PA PA PA PA 41.72 32.50 53.68 32.25 32.21 37.77 41.02 46.84 38.66  Some employees took annual leave without prior approval.
Numerous occasions were noted when the Human Resources Department received leave forms after the leave had been taken.

In addition, the Human Resources Department then processed the applications weeks or days after the initial date of receiving the annual leave form.
Refer Table 5.4 for examples: TABLE 5.4: LEAVE APPROVED AFTER LEAVE HAD BEEN TAKEN Date Dates of leave to be taken Date leave forms received by HR 17/05/11 04/04/11 Employee 1 (23/05/11 to 27/05/11) Employee 2 04/04/11 – 5 days 19/05/11 19/04/11 Date HR processed leave 17/08/11 21/06/11 The current practices are clear breaches of the Authority’s annual leave policies and procedures.

The findings also indicate that the Authority lacks proper administration and management of leave.
Recommendations  The Authority should ensure that Officers are encouraged to take their leave when due, however, without hindering the continuity of the Authority’s operations.

 The Authority should ensure that limits of annual leave that can be kept or taken to the next financial year are as per the agreements.

 Annual Leave should be approved first before the employees are permitted to go on leave.
Management should ensure that the time lag between leave applications to the updating of leave in the leave register should be within an acceptable range.

It is recommended that the monitoring, processing and updating of leave days should be included in the annual Key Performance Indicator of the HR Department.

 Management Comments  Recommendations noted.

The Authority will ensure that staffs are encouraged to take leave when due including the senior management staff.
The review of policy on annual leave is on-going.

Report of Statutory Authorities – June 2013 11 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI  Recommendations noted.

The authority has already acquired and implemented new HR Software and is also working towards reviewing Annual leave policies and procedures.
5.14 Recoverability of deposits The audit of the deposit account number 1354 totalling $32,388 revealed that the balance consisted of deposits made to a telecommunication company and to the landlords (payment of bonds on properties rented).

No movements were noted in this account during the year.

Discussion with the Payment Officer revealed that some of the employees are no longer occupying the rented houses and some houses have been sold.

The bond paid was not recovered.


It was also noted that the deposit for the mobile phone and landlines should have been collected as the phones are no longer in use (i.e.

damaged and disposed-off).

Recommendation The Authority should review all security deposits and ascertain whether these deposits still exist.
In addition, management should work towards the recoverability of those security deposits that needs to be recovered or adjust the necessary accounts to ensure that these accounts are fairly stated.

Management Comments Recommendations noted.

The authority will review all security deposits and ensure that its recovered if need be.

5.15 Postmaster receivables Post Fiji acts as a sub-agent to provide LTA services to remote islands/areas.
LTA will send their manual receipt books to Post Fiji to receipt the customers.

The batch of manual receipts is than sent to the LTA accounts office at month end.

The audit noted instances whereby the batches of manual receipts were a month late due to transportation delays.

However, Post Fiji would have made a cheque out to the Authority.

These amounts should be offset against carbon copy of the manual receipt.
Discussion with the Revenue Officer revealed that although the EPICOR system states that the Authority owes Post Fiji $60,243 (2010: $48,271) LTA has yet to account for the manual receipts in the system due to the following reasons:  LTA and Post Fiji records do not reconcile; and  Manual Receipts have been misplaced.

The Post Master Receivables balance stated in the financial statement may not be fairly stated.
Recommendation The Authority should liaise with Post Fiji in order to reconcile the variances that exist in the two records.

Report of Statutory Authorities – June 2013 12 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI Management Comments Recommendations noted.

The authority will ensure that the Post Masters Account is reconciled on a monthly basis to rectify the variances or any discrepancies.

The authority will ensure that all Manual receipts are accounted and filed safely.
5.16 Conflict of interest in internal audit reporting A review of the organisation chart revealed that the Internal Audit Department reports directly to the Chief Executive Officer (CEO).

The CEO approves the scope of the compliance testing and all reports are issued to the CEO for review.

The CEO also tabulates the report to the Board of Directors and discusses the matters highlighted in the internal audit reports.

The organizational structure for 2011 is illustrated below.
The current practice increases the risk of manipulation of internal audit scope to meet the CEO’s expectations.

Lack of segregation of duties and independence with regards to the setting up of internal audit programs and reviews of the internal audit programs increases the risk of misleading reports being presented to the Board.

Recommendation For an effective internal audit function, the Internal Audit Manager should report directly to the Audit Committee or the Board.
Management Comments While the recommendations are noted, this has been previously practised, however the trust that has been placed to the members has not been honoured for example the Print House Case.

Thus the current structure was established.

For effective internal audit function, the management will consider the recommendations in due course.
Report of Statutory Authorities – June 2013 13 ChiefExecutive OfficerManager AuditTeamLeader AuditAssistant AuditorInternalAuditorInternalAuditor OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI SECTION 6: WATER AUTHORITY OF FIJI The Water Authority of Fiji was established under the Water Authority of Fiji Promulgation No.

25 of 2007 vide Legal notice No.

68 of 2011.


The objectives of the Promulgation were as follows:    To give effect to the reorganization of the Water and Sewerage Department under the Public Enterprise Act 1996; To make provision for the effective management and administration of the Water and the Sewerage Systems; and To provide efficient and reliable services to customers and to ensure that the services are undertaken competently and professionally.
The Authority was established to manage the following functions:      To harvest, treat and reticulate water for supply to its customers; To comply with standards in relation to the supply and quality of water in its water system; To collect, transport, treat and discharge waste water for the purpose of this promulgation; To establish, operate and maintain systems for the provision of water and sewerage services; To maintain any State assets transferred to and vested in it by the Government pursuant to this promulgation or any other written law.
To provide technical or expert advice to any other person on matters relating to its functions and powers; To progressively achieve economic viability in the provision of water supply and sewerage services; To be environmentally responsible in the performance of all its activities.
To assist in protecting, managing and conserving water resources; and To assist in the formulation and implementation of national policies or urban and rural land use planning, relating to the use and control of water bodies and resources.
     Table of Content SECTION 6: WATER AUTHORITY OF FIJI ................................................................................................. 1 PART A – FINANCIAL INFORMATION ......................................................................................................... 2 6.1 6.2 6.3 AUDIT OPINION ................................................................................................................................. 2 ABRIDGED STATEMENT OF FINANCIAL PERFORMANCE ..................................................................... 2 ABRIDGED STATEMENT OF FINANCIAL POSITION .............................................................................. 3 PART B – CONTROL ISSUES ............................................................................................................................ 4 6.4 6.5 6.6 6.7 6.8 6.9 6.10 6.11 6.12 6.13 6.14 6.15 6.16 6.17 6.18 6.19 6.20 6.21 6.22 6.23 EMPLOYMENT OF OVERSEAS NATIONAL ........................................................................................... 4 ENTERTAINMENT ALLOWANCE FOR THE FORMER CHIEF EXECUTIVE OFFICER ................................. 4 ANNUAL LEAVE BALANCES .............................................................................................................. 5 JOB DESCRIPTION’S ........................................................................................................................... 5 CASH AT BANK
5 CASH AT BANK ................................................................................................................................. 6 BAD AND DOUBTFUL DEBTS ............................................................................................................. 6 CHEMICAL USAGE ............................................................................................................................. 8 HIRE OF ASSETS ................................................................................................................................ 9 AUDIT FEES ..................................................................................................................................... 10 PRINTING AND STATIONERY ............................................................................................................ 11 LONG OUTSTANDING DEBTORS ...................................................................................................... 12 OTHER ASSETS.
............................................................................................................................... 12 INVENTORY RECORDS ..................................................................................................................... 12 FAILURE TO PROVIDE GENERAL JOURNALS FOR EXPENDITURE ...................................................... 13 PETTY CASH .................................................................................................................................... 13 ABSENCE OF ACCOUNTING MANUAL .............................................................................................. 14 ANNUAL BUDGET NOT PREPARED .................................................................................................. 14 TENDER COMMITTEE....................................................................................................................... 15 DISCREPANCIES IN PAYMENTS MADE ............................................................................................. 15 VAT RECONCILIATION ................................................................................................................... 16 1 Report of Statutory Authorities – June 2013 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI 6.24 6.25 6.26 6.27 6.28 6.29 6.30 6.31 6.32 6.33 6.34 6.35 CHEQUES NOT ISSUED IN SEQUENTIAL ORDER ............................................................................... 16 COMPETITIVE QUOTATIONS NOT OBTAINED
 ................................................................................... 17 PAYMENT VOUCHERS AND SUPPORTING DOCUMENTS NOT STAMPED PAID ................................... 18 PURCHASE ORDERS ISSUED AFTER SERVICES RENDERED ............................................................... 18 PUBS PASSWORD ............................................................................................................................ 19 VOID REPORT .................................................................................................................................. 19 FIXED ASSETS TAKEN OVER FROM GOVERNMENT ......................................................................... 20 ADB ACCOUNTS NOT CONSOLIDATED WITH WAF ACCOUNTS ..................................................... 20 CAPITAL PROJECTS COMPLETED IN 2010 BUT NOT ACCOUNTED IN THE FAR ................................ 20 VARIANCE IN GENERAL LEDGER AND SUBSIDIARY RECORDS ........................................................... 21 INVENTORY WITH CREDIT BALANCES ............................................................................................. 21 TRADE CREDITORS BALANCE STATED IN OVERSEAS CURRENCY ................................................... 22 APPENDIX 1: PURCHASE ORDER ISSUED AFTER RECEIVING INVOICES FROM SUPPLIERS .. 24 PART A – FINANCIAL INFORMATION 6.1 Audit Opinion The audit of the financial statements of the Water Authority of Fiji (WAF) for the year ended 31 December 2010
 resulted in issue of a disclaimer of opinion as stated below: 1.
The Authority made adjustments to several general ledger accounts in 2010 and was not able to provide journals for these adjustments for audit verification.

As a result I was unable to ascertain whether the adjustments made were correct and properly authorised.

2.

A significant variance of $5,400,498 was noted between the general ledger balance ($1,323,234) and the subsidiary ledger balance ($6,723,732) for inventory due to the two records not linked.

The Authority did not reconcile the variance.


As a result I was not able to ascertain whether the inventory amount is fairly stated in the financial statements.

3.

Property, plant and equipment valued at $1,888,909,608 transferred from the Government were taken in the Authority’s books based on the valuation carried out by the Government in 2006.

Valuation at the time of takeover was not carried out.
As a result, I was not able to ascertain whether the net book value of property, plant and equipment amounting to $1,832,506,702 is fairly stated in the financial statements.

4.

The Authority did not provide evidence of stock take of inventories at the beginning and at end of the year.

In addition, chemical stock on hand as at 31 December 2010 was not included in the statement of financial position.
I was unable to satisfy myself by alternative means that the inventory quantities held at 31 December 2010 and its valuation which are stated in the statement of financial position at $1,323,234.
6.2 Abridged Statement of Financial Performance Year Ended 31 December Income 2010 ($) Report of Statutory Authorities – June 2013 2 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI Year Ended 31 December Income from Operation Other Income Finance Income Total Income Expenditure Staff Costs Depreciation Income Tax Expense Other Operating Expenses Total Expenditure Net Loss for the Year 2010 ($) 63,363,727 1,012,538 37,535 64,413,800 17,989,067 85,763,471 2,401,538 44,951,090 151,105,166 (86,691,366) The Authority recorded an operating loss of $86,691,366 in its first year of operation.
6.3 Abridged Statement of Financial Position As at 31 December Assets Cash & Cash Equivalents Trade and Other Receivables Property, Plant and Equipment Inventories Held-To-Maturity Investments Other Assets and Prepayments Total Assets Liabilities Employee Benefits Trade and Other Payables Deferred Revenue Deferred Tax Liability Total Liabilities Net Assets Accumulated Funds Contributed Equity Retained Losses Total Accumulated Funds 2010 ($) 2,747,168 23,042,095 1,832,506,702 1,323,234 1,000,000 2,922,569 1,863,541,768 569,256 28,534,868 38,537,141 2,401,538 70,042,803 1,793,498,965 1,880,190,331 (86,691,366) 1,793,498,965 Report of Statutory Authorities – June 2013 3 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI PART B – CONTROL ISSUES 6.4 Employment of Overseas National A person who is not a citizen of Fiji Islands must not enter, reside and work in the country unless the person meets the visa requirements set and approved by the Department of Immigration.1 WAF employed a British national (ID W0202) as a team leader for projects from 18/02/10 to 01/07/10.
The officer was on visitor’s visa to Fiji and the Department of Immigration on 14/04/10 authorized the officer to work in Fiji from 21/03/10 to 21/06/10.

The officer was terminated on 01/07/10 due to expiry of his visa.

The audit noted the following anomalies regarding the expatriate;  WAF employed the officer from 18/02/10.

The approval to work at WAF from the Department of Immigration was given on 14/04/10.

This indicated that he was employed illegally from 18/2/10 – 14/4/10.
 WAF employed the expatriate from 18/02/10 to 01/07/10 contrary to Department of Immigration’s approval for him to work from 21/03/10 to 21/06/10.

The officer was employed by WAF for additional 41 consecutive days or 30 working days.

The expatriate was paid a salary of $15,989.97 for the period of employment.

WAF did not comply with Immigration rules when employing the expatriate as project team leader.

Recommendation WAF should comply with Immigration Act when employing overseas nationals.
Management Comments No comments received.

6.5 Entertainment Allowance for the Former Chief Executive Officer Entertainment allowance is an amount of money set aside for entertaining clients and visitors.

Enterprises should set annual limit for the entertainment allowance paid to top management staffs.

The following anomalies were noted for payment of entertainment allowance to WAF former CEO.

 The former CEO was paid entertainment allowance of $1,000 per event.
There was no annual limit set by WAF on entertainment allowance which totalled $49,519 for 2010.

1 Fiji Immigration Act 2003, Section 7 Report of Statutory Authorities – June 2013 4 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI  Management sought clarification on the payment of former CEO entertainment allowance.
The board in its meeting held on 1/12/2009 approved that: “CEO clarified and it was approved and confirmed that the entertainment expenditure of cap of $1000 per event is included in the $30,000 operational authority”.

The audit noted that the board’s clarification on the payment of CEO entertainment allowance was ambiguous.

As a result WAF staff did not know what it meant and were not able to provide how much to be actually paid to CEO as his entertainment allowance.
Recommendations  WAF should seek clarification from the board on the payment of CEO’s entertainment allowance.

The Board should set an annual limit for payment of entertainment allowance to CEO.

 Management Comments No comments received.

6.6 Annual Leave Balances The main purpose of computer software is to process transactions at high-speed and provides ad-hoc reporting to the users with reduced labour to perform the tasks.
WAF is using a payroll software for processing payroll and recording of the officers’ annual leave records.

The audit noted that the payroll software does not itself compute the annual leave due after deducting the leave taken from the officer’s leave entitlement.
Instead the officer in charge has to access another panel within the annual leave module, manually count the number of days leave taken by an officer and then deduct it from the annual leave entitlement in order to obtain the leave due at a particular point in time.

Computing leave balances for staffs is a tedious exercise.

The system does not generate all the reports required by the management.
Recommendation WAF should upgrade its annual leave module in the payroll software so that it automatically calculates the annual leave balances for management reporting.

Management Comments No comments received.

6.7 Job Description’s A job description template is a list that a person might use for general tasks, or functions, and responsibilities of a position.
It may often include to whom the position reports, specifications such as Report of Statutory Authorities – June 2013 5 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI the qualifications or skills needed by the person in the job, or a salary range.
Job descriptions are usually narrative, but some may instead comprise a simple list of competencies, for instance, strategic human resource planning methodologies may be used to develop competency architecture for an organization, from which job descriptions are built as a shortlist of competencies.

The audit noted that WAF did not have job descriptions for its staffs which include permanent employees and wage earners.
In absence of job descriptions employees may not be able to properly understand their roles and responsibilities of the position they hold.

In addition WAF may not be able to hold its employees accountable for incomplete tasks.

Recommendation WAF must ensure that all positions have job descriptions.

Management Comments No comments received.

6.8 Cash at Bank Monthly receipts and payments amounts in the general ledger should reconcile with the cash book and bank statements.
WAF uses ACCPAC accounting software to prepare its monthly bank reconciliations.

The audit could not verify the monthly receipts and payments total in the general ledger due to unavailability of the cash receipts journals or subsidiary ledgers.

According to the Senior Accountant the general ledger and the cash receipts journal and cash book modules of the ACCPAC accounting software were not inter-grated.
As a result the audit could not establish whether receipts totalling $75,477,547 and payments totalling $76,601,659 for the year 2010 taken up in WAF’s bank reconciliation were correctly stated.

Recommendation WAF should ensure that subsidiary records in the ACCPAC accounting software are linked to the general ledger.

Management Comments No comments received.


6.9 Bad and Doubtful Debts Doubtful debts should be provided for debtors who are highly likely to default payment of their accounts and become bad in a near future.

Report of Statutory Authorities – June 2013 6 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI WAF prepared a report dated 31/5/11 on proposed write off for all accounts which had pre 2010 arrears and was deemed as unrecoverable in the near future.
Details of the debtors not likely to pay as per the report dated 31/5/11 are shown in Table 6.1 below.

Table 6.1: Debtors Not Likely to Pay Debtors Write off Potential write off Hold Total Amount ($) 3,085,092 11,624,129 16,619,596 31,328,817 Out of the $31,328,817 of debtors who were not likely to pay, the report recommended that $14,365,004 be written off.

The Board in its meeting held on 9/1/2012 did not approve the write off.
However, the Board approved that these accounts be fully provided for and taken as part of the opening trial balance as at 1/1/10.

Following anomalies were noted.

 The Board in its meeting held on 9/1/12 approved that accounts be fully provided for and taken as part of the opening trial balance as at 1/1/10.

The Board did not state the exact amount to be provided as bad and doubtful debts in 2010 financial statements.
 WAF created a provision for doubtful debts totalling $12,000,000 for the year ended 31/12/10 out of $14,365,004 that was recommended to be written off.

The Board minutes of 9/1/2012 did not state the amount of provision for doubtful debts to be taken up in 2010 accounts.

WAF did not consult the Board on the amount and arbitrarily decided $12,000,000 to be provided for.
 WAF provided for doubtful debts totalling $12,000,000 in 2010 accounts out of $14,365,004 for which details of specific accounts or customers to be written off were not provided.

 WAF did not carry out any debt collection exercise before recommending for write off to the Board and creating a $12,000,000 provision for bad and doubtful debts in 2010 accounts.
Some of this debts may be collectable, especially the amount owed by the government through discussions with heads of departments or Public Service Commission.

 WAF did not take any action against the consumers who owed substantial amounts to ensure that they start paying the bills after the proposed write off.

For example 11,099 customers had ceased and damaged meter with total outstanding bill of $6,984,645.

However, WAF did not replace or disconnect these meters.
In addition, 11,370 meters with total outstanding bill of $7,002,030 had previous disconnections but they still do not pay their bills.

WAF did not disconnect these meters permanently.

These consumers may continue to default payment of bills after their arrears are written off if no action is taken by WAF.

The findings showed that proper process was not followed before creating the provision of $12,000,000 in 2010 accounts.
As a result audit could not ascertain whether the amount provided for bad and doubtful debts was actually not collectable.

Recommendations  The Board should provide exact amount of arrears that need to be provided for doubtful debts.
Report of Statutory Authorities – June 2013 7 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI  WAF should: o identify which specific accounts or customers to be included in the provision for doubtful debts of $12,000,000 out of the $14,365,004 it recommended to be written off.

o undertake debt collection exercise before recommending for write off to the Board.
o take appropriate action against the consumers who owe substantial amounts to ensure that they start paying the bills after the proposed write off.

Management Comments No comments received.

6.10 Chemical Usage Tenders should be called for purchases of goods and services exceeding $30,000.

Competitive quotes should be obtained for purchase of goods and services costing less than $30,000.

All expenses incurred should be properly posted into the general ledger system.
WAF purchased chemicals such as chlorine gas, aluminium sulphate, copper sulphate, HTH powder and calcium hydroxide.

These chemicals were purchased from companies as shown in Table 6.2 below.

Table 6.2: Suppliers of Chemicals Chemical Supplier Chemical Supplier 1 Chemical Supplier 2 Chemical Supplier 3 Chemical Supplier 4 Total Amount ($) 739,611.34 1,070,688.78 54,800.00 14,858.94 1,879,959.06 Our review of chemicals purchased by WAF during 2010 revealed the following irregularities.
 WAF purchased chemicals from the first three suppliers in 2010 which exceeded $30,000 per annum.

However tenders were not called for selecting these companies for regular supply chemicals during the year.

 WAF did not carry out stock take of chemicals as at 31/12/10.

However list for the quantity of chemical stock on hand in December 2010 was submitted to the WAF headquarters from Northern and Western divisions.

The cost of chemical stock on hand was not provided by these divisions.
No detail of chemical stock as at 31/12/10 was prepared for the Central/Eastern division by WAF.

 WAF did not maintain a ledger for chemical inventory.

In addition WAF did not have any record of opening chemical inventory quantity and cost as at 1/1/10.

As a result WAF did not know the actual cost of chemical inventory on hand as at 31/12/10.

 WAF purchased chemicals totalling $1,879,959 in 2010.

The total chemical usage for the year ended 31/12/10 was $1,453,296.
This indicated that WAF should have chemical inventory of at least $426,663 (excludes opening balance on 1/1/10) on hand as at 31/12/10.

However, WAF’s balance sheet did not include any chemical inventory as at 31/12/10.

Report of Statutory Authorities – June 2013 8 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI The findings show that proper procurement procedure was not always followed by WAF.

In addition the chemical inventory was not properly recorded and disclosed in the financial statements.
Recommendations WAF should ensure that:     tenders are called for all procurement of goods and services exceeding $30,000; a ledger to record chemical inventory balance is maintained; annual stock take of chemical is carried out in future; and chemical inventory on hand at the end of financial year is included in the statement of financial position.

Management Comments No comments received.

6.11 Hire of Assets Tenders should be called for purchases of goods and services exceeding $30,000.
Competitive quotes should be obtained for purchase of goods and services costing less than $30,000.

In addition proper records should be maintained by WAF for all payments made.

Included in the financial statement for the year ending 31/12/10 was cost of hire of assets totalling $3,157,139.

This included hire of plant, equipment and motor vehicles.

Refer to Table 6.3 below for cost of hire of assets for the year ended 31/12/10.
Table 6.3: Hire of Assets Assets Hired Vehicle leased Domestic hire of vehicles/vessels Plant and Equipment Hire Machinery Hire Trucks/vehicle hire – material and labour carting Truck hire – water carting Total Cost ($) 826,168 60,865 1,282,783 126,711 227,063 633,549 3,157,139 Review of hire of assets expenses revealed the following anomalies.

 WAF only provided the vendor names from which assets were hired during 2010.
WAF was not able to provide the total cost of assets hired from each vendor during 2010.

 WAF was not able to provide transactions listing for each vendor for hire of assets.

The audit was not able to select sample of transactions for further audit tests as details such as payment voucher number, cheque number and purchase order number could not be obtained from the general ledger system.
Report of Statutory Authorities – June 2013 9 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI  The total cost for hire of assets was $3,157,139 for the year ended 31/12/10.

WAF did not call for tenders for hire of assets during 2010.

All assets were hired based on quotations only.

The findings showed that proper procurement procedure was not followed for hire of assets.

In addition proper record was not maintained in subsidiary ledger of the accounting system used by WAF.
As a result the audit was not able to substantiate the hire of asset cost as at 31/12/10.

Recommendations WAF should ensure that:   transactions are properly posted into the ledgers and the ledger system should be able to show and print vendor transaction listing with total amounts as at any date.

tenders are called for hire of assets exceeding $30,000 per annum.

Management Comments No comments received.

6.12 Audit Fees Tenders should be called for purchases of goods and services exceeding $30,000.
Competitive quotes should be obtained for purchase of goods and services costing less than $30,000.

In addition proper records should be maintained by WAF for all payments made.

WAF hired a Chartered Accountant Firm in 2010 to provide the following professional service.
Design the accounting framework to change the accounting system from cash to accrual basis; Propose a chart of accounts; i) ii) iii) Consult relevant users and stakeholders to ensure there are adequate reporting system; and iv) Recommending an appropriate system of reporting to enable WAF to meet its various reporting requirements.

WAF provided for $240,000 as audit fees in its 2010 financial statements to pay for the professional services rendered by the firm.
Review of the audit fees noted the following anomalies.

 WAF was not able to provide tender documents or details about how the firm was selected and appointed to provide the professional services.

 There was no contract agreement prepared and signed between WAF and the firm for the professional services provided.

 WAF paid total of $68,800.65 to the firm as at 31/12/10 for professional services.
The audit could not establish whether correct amount was paid to the firm as no formal documentation about the cost and the details of the services was provided by WAF.

 WAF hired the firm for setting up the accounting system, chart of accounts and reporting system.

These services do not relate to auditing of WAF’s accounts.

However, WAF treated these expenses as audit expenses and incorrectly charged to audit fees allocation in 2010 accounts.
Report of Statutory Authorities – June 2013 10 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI  WAF recorded audit fee expenses of $240,000 in its 2010 accounts.

However there was no audit undertaken in 2010.

WAF paid $68,800.65 to the firm for setting up the accounting system, chart of accounts and reporting system which was charged to Audit Fees account.

Audit was not able to substantiate the balance of $171,199.35 charged to audit fee account as no expense was incurred.
As a result the total expense was overstated by $171,199.35.

The findings show that proper procurement procedure was not followed by WAF.

Recommendations WAF should ensure that:     tenders are called for all procurement of goods and services exceeding $30,000; contract agreement is prepared and signed by both parties for all project works.
The contract agreement should also state the total cost of work to be carried out; expenses are posted to correct expenditure allocation; and appropriate adjustments are made to ensure that audit fees account is properly reflected in the accounts.

Management Comments No comments received.

6.13 Printing and Stationery WAF spent total of $191,811 for printing and stationary expenses in 2010. Review of printing and stationary expenses revealed the anomalies.
 Out of total printing and stationary expenses of $191,811, in 2010 WAF paid $166,558 to a printing service company for printing services and audit noted that WAF did not call for tenders before selecting the printing company.

 WAF obtained printing and stationary services from various suppliers without proper procurement process.

 WAF did not post most of the purchases made from these suppliers into the creditors’ subsidiary ledger.
WAF was not able to provide total purchases made in 2010 by vendors’ names.

The findings showed that proper procurement procedures were not always followed by WAF.

Hence audit could not ascertain the accuracy of printing and stationary expenses for 2010.

Recommendation WAF should ensure that tenders are called for all purchase costing more than $30,000and that all transactions are properly recorded in the subsidiary ledger and posted to general ledger.

Management Comments No comments received.


Report of Statutory Authorities – June 2013 11 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI 6.14 Long Outstanding Debtors All necessary avenues should be explored by WAF to recover the arrears of water charges to avoid unnecessary write offs.

The audit noted that as at 31/12/10 a total of $12,022,753 or 35% of the total arrears of $34,979,981 was owed for more than 5 years in water and sewerage charges.
These arrears were taken over by WAF from the Government when it was corporatized from 1 January 2010.

Apart from meter disconnection no other action was taken to recover the arrears.

In addition legal actions were not taken against any of the defaulting customers to recover the long outstanding arrears.

Recommendation WAF should make concerted efforts to recover the arrears to avoid write offs and should consider taking legal action against consumers who owe large amounts.
Management Comments No comments received.

6.15 Other Assets.

Management should ensure that accounting records are made available for audit inspection as and when requested.

Payment voucher numbers 11099 and 12367 amounting to $59,445.64 and $44,894.33 respectively for VAT reversible charges account in other assets were not provided for audit as the officer in charge of payments could not locate these vouchers.
As a result audit could not establish whether the amounts reflected in the financial statements as other assets are fairly stated.

Due to laxity and poor record keeping these payment vouchers were not made available for audit inspection.

Recommendation WAF should ensure that accounting records are properly maintained for audit inspection.

Management Comments No comments received.


6.16 Inventory Records Annual stock take should be carried out for all inventory items held by WAF to ascertain the value of stock on hand at balance date to be included in the accounts.

Report of Statutory Authorities – June 2013 12 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI Stock on hand certificate and the stock sheet for the stock take carried out as at 31 December 2010 was not produced for audit.
According to the Finance Officer Inventory the file that contained the stock take records was missing.

As a result audit could not establish whether stock take was actually carried out by WAF for the year ended 31/12/10.

In addition audit could not determine whether the inventory amount was fairly stated in the accounts.

Recommendation WAF should ensure that stock take of inventories is carried out and records properly maintained.

Management Comments No comments received.


6.17 Failure to Provide General Journals for Expenditure Journals entries maybe passed to make adjustments to the general ledger amounts.

All adjusting journals should be properly reviewed and approved by a senior officer before any adjustments are passed.

Journals should be properly filed and maintained by the accounting section for future references.
Our review of the several expenditure accounts in the general ledger revealed that several adjustments were made to the account balances in 2010 through journal entries.

However WAF was not able to provide journals for these adjustments for audit verification as the journal files were missing.

As a result audit was unable to ascertain whether adjustments were approved and correct.

Recommendations WAF should ensure that: all journal are properly filed and maintained for future reference.
  missing journals are investigated and appropriate action taken.

Management Comments No comments received.

6.18 Petty Cash Total petty cash held by an entity should be reflected in the final accounts at the year end.

The audit noted that the Authority held a total of $900 for petty payments at its three major centres as at 31/12/10.

However, the petty cash amount stated in the financial statements was $1,892.00.

A variance of $992 was noted.


WAF was not able to provide any reason for the overstatement of petty cash amount by $992.

Report of Statutory Authorities – June 2013 13 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI Recommendation WAF should ensure that petty cash account and petty cash records are properly maintained.

Management Comments No comments received.


6.19 Absence of Accounting Manual The purpose of the accounting procedure manual is to provide accounting officers with direction and guidance in connection with accounting transactions, procedures, and reports that should be uniform throughout the WAF.

The Accounting Manual should not be considered an all inclusive handbook.

Rather, accounting officers should also be guided by professional accounting standards.
Except as otherwise stated the policies and procedures contained in the Accounting Manual should be mandatory.

The audit noted that WAF did not have an accounting manual since its establishment in 2010.

WAF is now in the process of developing an accounting manual.

Accounting procedure manual ensures that accounting procedures are applied consistently by all accounting staffs.

It also ensures that all accounting tasks are carried out in compliance to the set guidelines.
Recommendation WAF should ensure that the compilation and finalization of the accounting procedure manual is expedited.

Management Comments No comments received.

6.20 Annual Budget Not Prepared An annual budget is prepared for an entity to guide itself for utilization of funds and to keep or monitor its cash flow at any point in time.

The audit noted that WAF did not prepare its budget for the year 2010.

Hence WAF did not estimate how much each activity or task should cost.
In absence of budget estimates WAF did not have any monitoring mechanism in place to ensure expenses were properly controlled and maintained at a predetermined levels.

The finding show poor control over WAF finances by the management.

Recommendation WAF should ensure that it prepares its annual budget for every financial period.

The budget estimates should be approved by the board.
Report of Statutory Authorities – June 2013 14 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI Management Comments No comments received.

6.21 Tender Committee The main function of the Tender Committee is obtaining the most favourable terms for acquisition of goods and services required for the WAF main activities on the principles of competitiveness, transparency and team decision making.
The main goal of the Tender Committee is to cut budget expenses and secure corporate interests of the WAF as well as to strengthen image of the WAF as an accurate and transparent statutory Authority.

The audit noted that WAF did not have a tender committee in 2010.

All purchases of goods and services were made based on the competitive quotes irrespective of the dollar value and the nature of goods and services.
WAF may not have purchased goods and services in 2010 based on the principles of competitiveness, transparency and team decision making.

Recommendation WAF should ensure that a Tender Committee is established as soon as practicable and that all purchases exceeding $30,000 are approved by the Tender Committee Management Comments No comments received.
6.22 Discrepancies in Payments Made A local purchase order, indent, departmental warrant, contract or agreement must be issued before goods and services are received.

Payment should be made on original invoices.

The review of the payment vouchers and supporting document noted instances where payments for purchase of goods and services were processed without payment vouchers and supporting documents such as invoice and purchase order were not attached.

Refer to Table 6.4 below for examples.
Table 6.4: Discrepancies in Payments Made Date of Payment 17/3/10 26/6/10 19/8/10 26/8/10 Cheque Number 10417 15613 12393 12477 Payee Payee 1 Payee 1 Payee 1 Payee 2 16/4/10 10882 Payee 2 Amount ($) Comments 15,217.20 Payment voucher not prepared 29,812.50 Payment voucher not prepared 8,493.65 Payment vouchers not prepared 8,910.00 LPO’s not attached for purchases made costing $1,880 and $2,985 8,580.00 Payment voucher not prepared Report of Statutory Authorities – June 2013 15 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI The findings showed that proper payment procedures were not followed.
WAF did not have adequate internal controls in the payments system.

The risk of fraud, misappropriation of funds and double payments are high with inadequate internal controls.

Recommendations WAF should ensure that:   payment vouchers are prepared and properly reviewed and authorized by senior officer; and purchase orders are issued for all purchases and copies properly maintained.

Management comments No comments received.


6.23 VAT Reconciliation Subject to the provisions of this Decree, the tax shall be charged in accordance with the provisions of on the supply (but not including an exempt supply) in Fiji of this Decree at the rate of fifteen percent st goods and services on or after the 1 furtherance of a taxable activity carried on by that person, by reference to the value of that supply.
2 day of July 1992, by a registered person in the course or 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.

The audit noted that WAF did not prepare VAT reconciliations for the year 2010.

Discussion with the team leader finance revealed that this was not practiced in 2010.
In the absence of vat reconciliation the authority would not be able to ascertain whether it is paying the correct VAT to FRCA.

Recommendation WAF should ensure that VAT reconciliation is carried out on a monthly basis.

Management Comments No comments received.

6.24 Cheques Not Issued in Sequential Order As part of internal control cheques shall be prepared in sequential order for payments.

The audit noted that 5 cheques from December 2010 series were issued out of sequence in January 2011.
Refer to Table 6.5 below for examples.
2 Value Added Tax Decree 1991 revised to 4th March 2011 – Section 15 (1) Report of Statutory Authorities – June 2013 16 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI Table 6.5: Cheques Not Issued in Sequential Order Date Issued 11/1/11 11/1/11 11/1/11 11/1/11 11/1/11 Total Cheque Number 14314 14315 14316 14317 14318 Amount ($) Particulars 135,515.99 Payment of staff salaries and wages 84,844.80 Payment of staff salaries and wages 18,872.39 Payment of staff salaries and wages 249,036.41 Payment of staff salaries and wages 7,093.77 Payment of staff salaries and wages 495,363.36 The Senior Accountant could not explain why these cheques were issued out of its sequence.
The finding showed poor control over issue of cheque for payments.

Recommendation WAF should ensure that cheques are always issued in sequence.

Management Comments No comments received.

6.25 Competitive Quotations Not Obtained Competitive quotes should be obtained for all purchases costing less than $30,000.

WAF purchased goods and services from suppliers costing less than $30,000.
However, instances were noted where WAF did not obtain at least 3 competitive quotes from the suppliers before purchases were made.

Refer to Table 6.6 below for examples.


Table 6.6: Competitive Quotations not Obtained Date Payment 26/8/10 16/4/10 Cheque Number 12477 10882 Payee Particulars Payee 2 Payee 2 Printing of various forms Printing of envelopes and billing forms Amount ($) 8,910 8,580 In absence of competitive quotes the Authority may not be obtaining goods and services from most economical sources.
Recommendation WAF must ensure that competitive quotes are obtained for purchase of goods, services or works valued below the tender limit.

Management Comments No comments received.

Report of Statutory Authorities – June 2013 17 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI 6.26 Payment Vouchers and Supporting Documents Not Stamped Paid Immediately after payment has been effected, the payment officer must stamp “PAID” on all vouchers and supporting documents to avoid any double payments.
Our audit noted that supporting documents were not always stamped “PAID” after the payments were made.

Refer to Table 6.7 below for examples.

Table 6.7: Payment Vouchers Not Stamped Paid Date 18/10/10 18/11/10 28/10/10 18/11/10 17/11/10 28/10/10 Purchase Order Date 14/09/10 25/09/10 01/10/10 25/09/10 01/10/10 01/10/10 Invoice Number 2827 2843 2844 2845 2846 2847 Amount ($) 8,700 4,400 9,750 3,200 2,720 4,150 The findings showed poor control in payments system.
The risks of fraud, misappropriation of funds and double payments are high with inadequate controls.

Recommendation WAF should ensure that all payment vouchers and supporting documents are stamped “PAID” after payments have been made.

Management Comments No comments received.

6.27 Purchase Orders Issued After Services Rendered Purchase orders should be issued when procuring any goods and services from an organization, unless a contract or agreement has been entered into.
The audit noted several examples where purchase orders were not issued for hire of plant and equipment.

It was further noted that purchase orders were issued after invoices were received for payment from the suppliers of plant and equipment to fulfil the requirement issuing purchase orders.

Refer to Appendix 1 for details.

According to the officer in charge, they were not able to ascertain the number of hour’s plant and equipments were required to be hired.
As such the purchase orders were issued after the job was completed.

The current practice of issuing purchase orders does not fulfil the internal control requirement for which purchase orders are issued.

Recommendation WAF should ensure that purchase orders are issued for purchase of goods and services.

Report of Statutory Authorities – June 2013 18 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI Management Comments No comments received.
6.28 PUBS password Having password to access data on a computer system ensure data security.

However, the password should be changed periodically.

In addition the system should have a built in facility to inform the users to change the password on a periodic basis.

However, the users may change the passwords more frequently than required by the system.

WAF uses Pacific Utilities Billing System Software (PUBS) for billing consumers for water and sewerage charges.
Audit noted that the PUBS system does not have built in facility which requires its users to change passwords periodically.

Failure to change passwords periodically can result in passwords being accessed by other employees resulting in misuse or manipulation of information.

Recommendation WAF should ensure that PUBS system is upgraded to have a built in facility for changing passwords periodically.

Management Comments No comments received.


6.29 Void Report WAF should print generate void reports on a regular basis for verification and certification by a senior officer to ensure the all voids are valid.

The audit noted that WAF did not generate periodic void reports.

As a result WAF does not know how many receipts are void and whether voids are valid.

In absence of void reports there is risk of fraud and misappropriation of revenue.
Recommendation WAF should ensure that void reports are generated periodically and reviewed by a senior officer to ensure all voids are genuine.

Management Comments No comments received.


Report of Statutory Authorities – June 2013 19 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI 6.30 Fixed Assets Taken Over From Government IFRS requires that fixed assets transferred from one entity to another should be valued by a qualified registered valuer at the time of transfer so that its fair value is taken up in the books of the new owner.
The audit noted that fixed assets valued at $1,888,909,608 transferred from the Government to WAF on 31/12/09 were taken in the books based on the valuation carried out in 2006.

WAF did not carry out valuation of the assets at the time of takeover in 2009.

WAF failed to comply with the requirements of the IFRS.
In the absence valuation of assets at the time of takeover audit could not be established whether the net book value of fixed assets amounting to $1,832,506,702 is fairly stated in the financial statements.

Recommendation WAF should ensure that all assets are valued at the time of transfer so that asset values are fairly stated in the accounts.

Management Comments No comments received.


6.31 ADB Accounts Not Consolidated With WAF Accounts All the expenses incurred by the Authority either from its initial budget or from loan funds should be included in the financial statements of WAF to reflect its true financial position at the end of the financial year.
The loan disbursements and the expenditure incurred for the capital projects under the ADB funding for the Suva/Nausori Regional Water Supply and Sewerage Project is controlled by the WAF since 2010.

The ADB loan amount and the expenditure incurred from the loan proceeds were not consolidated with the Authority’s financial statements.

Therefore WAF financial statements do not show a true position of its financials.

Incomplete financial statements provide misleading information to the users.
Recommendation WAF should ensure that ADB funded Suva/Nausori Water and Sewerage account is consolidated to its financial statements.

Management Comments No comments received.

6.32 Capital Projects Completed In 2010 but Not Accounted in the FAR Capital projects completed in a financial year should be capitalised and taken up in the fixed assets register of the entity.
Report of Statutory Authorities – June 2013 20 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI The audit noted that WAF completed capital projects valued at $12,554,831 in 2010.

These fully completed projects were not included in WAF fixed assets register.

As a result the WAF fixed assets value in the FAR and in the financial statements was understated by $12,554,831 as at 31/12/10.
In addition, WAF was not able to provide the file for the project number 10-W-09-WM-0067 the Nayau to Benau pipe laying costing the WAF $1,189,597 for audit.

The audit could not establish whether the funds were properly used and recorded in the accounts.

Recommendation WAF should make necessary adjustments in its account to include the projects completed in its FAR and the accounts.

Management Comments No comments received.


6.33 Variance in general ledger and subsidiary records Draft financial statements should be internally checked by responsible officers for its completeness and accuracy before it is submitted for audit.

A significant variance of $5,400,498 was noted between the general ledger balance $1,323,234 and the subsidiary ledger balance of $6,723,732 in inventory records due to the two records not linked to one another.

WAF did not reconcile the variance.


WAF prepared its financial statements using the general balance.

As a result audit could not establish the correctness of the account balance for inventory stated in the financial statements.

Recommendations WAF should:   investigate the variance and take appropriate action to reconcile the two records.

ensure that the draft accounts are properly checked internally before it is submitted for audit.

Management Comments No comments received.


6.34 Inventory with Credit Balances Inventory is an asset account and should have a debit balance at any point in time.

Inventory should never have a credit balance.

Report of Statutory Authorities – June 2013 21 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI The audit noted that three Divisions of WAF had credit balances in their project inventory accounts totalling $1,419,962.45 as at 31/12/2010.

Refer to Table 6.8 below for details.


Table 6.8: Inventory with Credit Balances Account Code 10509-51 10509-52 10509-53 Division Central Eastern Western Northern Total Amount ($) 592,227.36 455,313.16 372,421.93 1,419,962.45 Credit balances in the inventory account indicates that inventory amount is incorrect in the general ledger.

As a result it is highly likely that the inventory amount is incorrectly stated in the financial statements.
Recommendation WAF should investigate the credit inventory balances and take appropriate action.

Management Comments No comments received.

6.35 Trade Creditors Balance Stated in Overseas Currency An enterprise normally uses the currency of the country in which it is domiciled.
The foreign currency transaction should be recorded, on initial recognition in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.3 WAF procured water meters, pipe fittings and consultancy services from overseas suppliers in England, Australia and New Zealand.
The audit noted that purchases made from overseas suppliers in England, Australia and New Zealand were not converted to local currency at the date of the transactions.

As a result the amounts owed to overseas suppliers were stated in foreign currencies.

Refer to Table 6.9 below for details.
Table 6.9: Amount Due to Overseas Creditors Stated in Overseas Currencies Overseas Creditors Origin Australia England New Zealand Respective Overseas Currency Overdue Current 1 – 30 days 31 – 60 days Total Overdue (In respective Currency) AUD $ Pounds NZ $ 99,845.00 84,750.00 30,900.00 8,979.54 0 0 8,864.65 0 0 117,689.19 84,750.00 30,950.00 3 Fiji Accounting Standards 21(9) Report of Statutory Authorities – June 2013 22 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI The audit further noted these overseas suppliers were also included in creditors account in the financial statements in foreign currencies.
As a result the total creditors balance was understated in the financial statement.

Recommendations WAF should ensure that:   all transaction with overseas suppliers are converted to local currency at the date of transaction.

financial statements are prepared in the Fijian currency and all transactions should be converted to Fiji currency to be included in the financial statements.

Management Comments No comments received.
Report of Statutory Authorities – June 2013 23 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI APPENDIX 1: Purchase Order Issued after Receiving Invoices from Suppliers Purchase Order Date Invoice Number Invoice Date Amount ($) 9/9/2010 9/9/2010 9/9/2010 25/08/10 25/08/10 25/08/10 23/08/10 23/08/10 23/08/10 23/08/ 2/8/2010 3/8/2010 4/8/2010 5/8/2010 6/8/2010 21/06/10 22/06/10 23/06/10 24/06/10 25/06/10 2/8/2010 3/8/2010 26/07/10 28/07/10 29/07/10 29/07/10 30/07/10 19/07/10 20/07/10 21/07/10 22/07/10 23/07/10 19/04/10 20/07/10 21/07/10 22/07/10 23/07/10 12/7/2010 13/07/10 14/07/10 15/07/10 16/07/10 26/07/10 27/07/10 28/07/10 29/07/10 30/07/10 19/07/10 20/07/10 21/07/10 22/07/10 23/07/10 26/07/10 27/07/10 28/07/ Report of Statutory Authorities – June 2013 24 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI Purchase Order Date Invoice Number Invoice Date Amount ($) 4194 4195 Total 29/07/10 30/07/10 112.00 112.00 5,931.80 Report of Statutory Authorities – June 2013 25 OFFICE OF THE AUDITOR
 GENERAL – REPUBLIC OF FIJI SECTION 7: FIJI FLOOD EMERGENCY RESPONSE PROJECT GRANT NO.
0283-FIJ (ADB FUNDED) The Objectives of the Fiji Flood Emergency Response Project was: (i) (ii) (iii) To provide in a timely fashion, incremental grant resources to developing member country (DMC) affected by a natural disaster.

That the proposed Asia Pacific Disaster Response Fund (APDRF) will help bridge the gap between existing ADB arrangements that assist (DMCs) to reduce disaster risk through hazard mitigation loans and grants, and longer term post disaster reconstruction lending.
That the APDRF will provide quick disbursing grants to assist DMCs in meeting immediate expenses to restore life-saving services to affected populations following a declared disaster and in augmenting aid provided by other donors in times of national crisis (e.g.

purchase of water purification and sanitation systems).
Table of Content PART A - FINANCIAL INFORMATION .......................................................................................................... 1 7.1 7.2 AUDIT OPINION .................................................................................................................................................... 1 STATEMENT OF EXPENDITURE ............................................................................................................................. 3 PART B – CONTROL ISSUES ............................................................................................................................ 3 7.3 7.4 7.5 7.6 7.7 7.8 7.9 7.10 7.11 7.12 7.13 7.14 JOB DESCRIPTION ............................................................................................................................................... 3 ABSENCE OF ACCOUNTING MANUAL ..................................................................................................................... 4 TENDERS NOT CALLED FOR PURCHASES IN EXCESS OF $20,000 .......................................................................... 4 MACHINE TALLY SHEET AND CERTIFICATION OF WORKS DONE .............................................................................. 6 PLANT HIRE CONTRACT EXTENSION ..................................................................................................................... 7 STANDBY TIME
7 STANDBY TIME .................................................................................................................................................... 8 UNREGISTERED VEHICLES CONTRACTED............................................................................................................... 8 DISCREPANCIES IN PURCHASE OF GOODS/SERVICES ............................................................................................ 9 PURCHASE OF WATER TANKS ............................................................................................................................ 12 GENERAL LEDGER POSTING ............................................................................................................................... 13 ACCESS TO RECORDS ....................................................................................................................................... 14 ANOMALIES IN VEHICLE/PLANT HIRE ................................................................................................................... 15 APPENDIX 7.1: WORKS CERTIFIED BY OFFICER OTHER THAN THE ENGINEER/SUPERVISOR ............................................................................................................................................................................... 20 APPENDIX 7.2: PURCHASE ORDERS ISSUED AFTER SERVICES RENDERED ................................. 23 PART A - FINANCIAL INFORMATION 7.1 Audit Opinion The audit of the Statements of Expenditure of the Fiji Flood
 Emergency Response Project for the period 12 March to 6 September 2012 (Grant No.
0283-FIJ) resulted in the issue of disclaimer of opinion audit report.

The disclaimer of opinion was due to the following issues: Report of Statutory Authorities – June 2013 1 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI 1.

Tenders were not called for services to undertake flood rehabilitation works in the Western parts of Fiji.

The total cost of purchases made during the year from these unapproved suppliers exceeded$20,000.
In addition several purchase orders issued were not authorized at all for payment.

2.

The daily machine tally sheets have provisions for idle and waiting time.

None of the tally sheets had entry for idle or waiting time recorded.

3.

On several occasions the works completed at the site were certified by officers other than the Engineer/Supervisor.

4.

The contract for vehicle/plant hire expired on 15/6/12.

Since then WAF did not take any action to call for fresh tenders and award new contracts.
The contract for vehicle/plant hire was extended four times by the Chief Executive Officer without the Board’s approval after it expired on 15/06/12.

5.

A supplier was contracted to supply vehicles for hire in the Western division.

However the vehicle registration numbers were not stated in the WAF plant hire contract documents.

Instead the word “unregistered” was stated in place of vehicle registration numbers.
Since the inception of the contract in June 2011 WAF did not verify with LTA to confirm the registration of these plants as of the date of audit.

6.

Several cases were noted where purchase orders were issued for hire of plant and equipment after invoices were received for payment from the suppliers of plant and equipment.

Purchase orders were issued only to fulfill the requirement of issuing purchase orders.

7.
7.

Adequate supporting documents such as daily vehicle running sheets and three quotations were not always attached to the payment vouchers.

8.

Expenses incurred using the grant funds for flood rehabilitation works were posted in the general ledger according to expenditure allocations.

WAF was not able to provide details such as grant funds used per Depot, list of projects funded from grant funds and amount of grant funds used for each project.

9.
9.

The WAF failed to produce the following documents for audit inspection.

 The periodic progress reports for the flood rehabilitation works carried out.

 Details of rehabilitation works such as repairs and maintenance plan/design, contractors hired, duration of works, progress report and funds utilised for following projects.
o Waiwai dam and pipeline o Vaturu bulk supply o Varaciva pump station o Moto bridge o Buried meters in various locations Report of Statutory Authorities – June 2013 2 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI 7.2 Statement of Expenditure TABLE 7.1: DETAILS OF EXPENDITURES FOR 2012 Sub Project Components Description Plant Hire Materials TOTAL 2012 ($) 1,425,375 361,467 1,786,842 The expenditure was divided in 2 categories being plant hire and materials.
This is a one off account therefore no comparisons of figures.

PART B – CONTROL ISSUES 7.3 Job Description A job description template is a list that a person might use for general tasks, or functions, and responsibilities of a position.

It may often include to whom the position reports, specifications such as the qualifications or skills needed by the person in the job, or a salary range.
Job descriptions are usually narrative, but some may instead comprise a simple list of competencies, for instance, strategic human resource planning methodologies may be used to develop competency architecture for an organization, from which job descriptions are built as a shortlist of competencies.
Discussion with the Human Resources Officer, revealed that there was no job descriptions for the staffs involved with the project for the year 2012 including tallymen, technical officers and project supervisors.

In absence of job descriptions employees may not be able to properly understand their roles and responsibilities of the position they hold.

In addition the WAF may not be able to hold its employees accountable for incomplete tasks.
Recommendation WAF should ensure that all positions have job descriptions.

Management Comments There were many new recruits over the last 3 years as new project workers, their generic role is defined by their employment titles.

E.g.

Plumber/Fitter/ Engineers.

The casual labourers who were part of ADB rehabilitation projects were supervised by Team Leaders, Engineers and GM Operations.

Their role and responsibilities is more of as labourers which do not necessarily require a job description.
Furthermore, by the end of 2012, there was a restructure to all business units.

This task also includes the finalisation of New Job Descriptions and contracts to all established staff.
Report of Statutory Authorities – June 2013 3 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI 7.4 Absence of Accounting Manual The purpose of the accounting procedure manual is to provide accounting officers with direction and guidance in connection with accounting transactions, procedures, and reports that should be uniform throughout the WAF.

The Accounting Manual should not be considered an all inclusive handbook.

Rather, accounting officers should also be guided by professional accounting standards.
Except as otherwise stated the policies and procedures contained in the Accounting Manual should be mandatory.

The audit noted that WAF had an accounting manual namely Cash Management and Treasury Policy number 31/03/12.

However discussion with the legal officer revealed that as at the date of audit1 the Cash Management and Treasury Policy was not approved by the Board.
The unapproved Cash Management and Treasury Policy cannot be relied on as a mandatory policy for providing direction to accounting officers for finance management and reports.

Recommendation WAF should ensure that the Cash Management and Treasury Policy is approved by Board as soon as practicable.

Management Comments The Accounting and Financial manual was approved in principle by the WAF Board in early 2012.

However the minute for the same was missing as the former secretary to Board resigned.
The same has now been approved in 2013.

The approved policy and procedures includes the following: 1.

Cash and Treasury Management Policy; 2.

Fixed Asset and Project Management; 3.

Inventory Policy and Procedures; 4.

Payroll process and policies; 5.

Procurement and purchasing policy; and 6.

Revenue and receivables policy.
7.5 Tenders Not Called For Purchases in Excess of $20,000 The tender committee shall consider and may evaluate the acceptance of any tender called for the supply of goods and services where the estimated price of those goods or services exceeds twenty thousand dollars ($20,000).2 1 18/02/13 2 Water Authority of Fiji Cash Management and Treasury Policy Section 2.1 Report of Statutory Authorities – June 2013 4 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI The audit noted that WAF obtained services from 3 suppliers to undertake flood rehabilitation works in the western parts of Fiji during the year 2012, that is from suppliers other than those approved by the WAF Tender Board.
The purchases made during the year from these unapproved suppliers exceeded $20,000.

Refer to Table 7.2 below for details.

Table 7.2: Purchases Made from Unauthorised Suppliers Supplier Supplier 1 Supplier 2 Supplier 3 Amount ($) 72,234.43 45,000.00 62,650.00 According to the Team Leader Finance calling for tenders required lengthy time period and a short time was allocated by ADB to utilise funds.
Procurement of goods and services from suppliers other than those approved by the WAF Tender Board is an unauthorised purchase.

Recommendations WAF should:   investigate purchases made from unauthorized suppliers and take appropriate action against responsible officers; and ensure that purchases of goods and services are only made from approved contracted suppliers.

Management Comments Supplier 1was used during Flood on Quotations.
Note that all the Purchase orders as stated in the Audit Report did not exceed $20,000.

The comparison is based on Cash and Treasury Policy but this should have been compared to Procurement and Purchasing Policy (D – 31/03/2012).
Please find citation from the policy below: Functions of Tender Committee The Tender Committee shall consider and may evaluate the acceptance of any tender called for the supply of goods and services where the estimated price of those goods or services exceeds twenty thousand dollars ($20,000).

Thus this is within the procurement policy and this does not exceed purchase of $20,000.
Supplier 3 was used on Quotation basis and it was used during Flood emergency in Nadi since Carpenters was used in Lautoka and it is for bailing out sewer from Pump Stations during power shutdown.

There is no tender for bailing Trucks.

Due to the emergency situation bailing of sewer was urgently needed and this minute was approved by CEO.
Note on this payment only 1 Purchase Order (PO17829) exceeds $20,000 due to the urgency of this service and Supplier 3 was the only Company to respond to the request as per the attached minute in the source document.

Supplier 2 was also used during the flood on Quotation basis.

Please note that the minute was approved by CEO for purchase due to the urgency of the Flood Rehab works.
The boulders were purchased for the vital works carried out on Moto Bridge as Waiwai TP was washed away during the January Floods thus approval from the Board was not sought due to the urgency.

Report of Statutory Authorities – June 2013 5 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI 7.6 Machine Tally Sheet and Certification of Works Done Idle time refers to the time when a machine is not working on the job but is refuelling, machine breakdowns, maintenance and unavailability of driver(s).
Waiting time refer to where a machine after carrying out certain task awaits while other non machine work is done.

Tallyman is required to enter details such as vehicle registration number, contractor name, date, plant hire instruction number, contractor plant hire/delivery docket number, start and end time and total hours worked by the contractor into the daily machine tally sheet.
On the daily machine tally sheet a separate section is allocated for the engineer/supervisor to certify if work had been satisfactorily done.

As per OHS act all day workers are entitled to one hour lunch.

Review of the daily machine tally sheets revealed the following anomalies:  The daily machine tally sheets have provision for idle and waiting time.

However not a single tally sheet out of so many tally sheets had an entry for idle or waiting time recorded.
The audit is of the view that in a practical scenario machine(s) on the job site would definitely have some idle and/or waiting time.

For instance, if a damaged valve is to be replaced, a digger would be used to dig out until the damage valve is sighted.

The machine would then be on waiting time while the damaged valve is dismantled and replaced.

The digger would then be required to cover the repaired valve with sand and soil.
 On several occasions the works completed at the site were certified by officers other than the engineer/supervisor.

Refer to Appendix 1 for several examples.

 Contractors were claiming for lunch hour indicating that the machine operators did not even take lunch break.

However WAF did not allow for this and treated this as idle time during 1 hour lunch break when processing payments for contractors’ claim.
 Several instances were noted where the engineers/supervisors did not sign the daily machine tally sheets on the day of work.

The tally sheets were signed after the day of actual work.

The finding indicates that WAF engineers/supervisors were not always at the project site to properly supervise the project work.
In addition with no idle or waiting time recorded at all there is a high risk of overstated machine hours in the tally sheets and possible collusion between the tallymen, supervisors and contractors.
Recommendations WAF should ensure that:  engineers/supervisors are always present at the job site to ensure correct machine hours are recorded in the tally sheets and tally sheet are signed by the engineers/supervisors on the day the work is carried; engineers/supervisors certify work carried out by the contractor on a daily basis; and appropriate disciplinary action is taken against engineers/supervisors for delegating their responsibility of supervising the job on site to junior officers.
  Report of Statutory Authorities – June 2013 6 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI Management Comments Diggers and excavators do not have mileage thus they are paid on an hourly basis.

The officer on site is the right person to certify the work carried out he can be called as Tallyman.

Normally during emergency and urgency of work contractors are asked have working lunch.
engineers/supervisors sign after the tally man countersign on the invoices and mostly these are verified by Regional Manager West.

7.7 Plant Hire Contract Extension WAF vehicle/plant hire contract for the three Divisions namely the Central, Western and Northern was approved by the Board in June 2011 and was valid till 15 June 2012.

The audit noted that the vehicle/plant hire contract was extended four times by the Chief Executive Officer after its expiry date on 15/06/12 without Board’s approval.
Refer to Table 7.3 below for extension of contract.

Table 7.3: Extensions to Vehicle/Plant Hire Contract Extensions First extension Second extension Third extension Fourth extension Extension Dates 16/06/12 – 31/08/12 01/09/12 – 14/09/12 15/09/12 – 14/10/12 15/10/12 – 23/11/12 The audit is of the view that any extensions to the contract for vehicle/plant hire should be approved by WAF Board and not the Chief Executive Officer since the initial contract was approved by the Board.
Continued extension of vehicle/plant hire contract by Chief Executive Officer indicates that proper procurement processes were not followed for hire of vehicles/plant.

The contract for vehicle/plant hire expired on 15/06/12.

Since then WAF did not take any action to call for fresh tenders and award new contracts as the contract had expired and was no longer valid.

The non-renewal and continued extension of the expired contract indicates poor planning by WAF for outsourcing the vehicle/plant hire.
Recommendations WAF should ensure that:  all dealings with the contractors are ceased unless the contracts are renewed/extended by the Board and not the CEO; fresh tenders are called and new contracts are awarded; and in future proper planning for renewing or calling for fresh tenders is done to avoid extension of contracts.
  Report of Statutory Authorities – June 2013 7 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI Management Comments In 2012 tender for vehicles and machines for 3 Division was evaluated by previous Project Accountant and was not approved by the tender Committee.

This tender was called again in January for 2013.


Note that the contract was extended four times during the year due to the urgency of the work in both Operations/Projects and also since the tender was approved by the Tender committee as they were not satisfied with the specifications stated.

Thus approval was sought from CEO to extend the validity of tender in order for operations to function efficiently.
7.8 Standby Time The principal will not pay the contractor for any standby time.3 The audit noted that WAF’s general conditions of contract for vehicle/plant hire states that WAF will not pay any standby time to the contractors.

However the WAF’s contract for vehicle/plant hire included standby rate for following plant.

3 ton double cab;   Back hoe;  Excavator – medium, large and extra large; and  Dump truck 6 wheeler.
Including contradictory conditions for payment of standby time in the contract for plant hire could result in misinterpretations by accounting staff whilst processing contractual claims.

This may result in paying for standby charges while it’s not permitted by WAF.

Recommendation WAF should rectify the issue on payment of standby time to contractors and amend plant hire contract accordingly to exclude the standby rate.
Management Comments WAF is paying the contractors on hourly basis which covers both for standby and idle time as approved on hourly basis by the tender board.

7.9 Unregistered Vehicle Contracted WAF vehicle/plant hire contract for the three Divisions namely the Central, Western and Northern was approved by the Board in June 2011 and expired on 15 June 2012.

The contract was extended by the WAF CEO thereafter.

Vehicle hire contractor was engaged to supply vehicles for hire in the Western division.
However the audit noted that the vehicle registration numbers were not provided in the WAF plant hire contract documents.

Instead the word “unregistered” was stated in place of vehicle registration numbers.

Refer to Table 7.4 for examples.
3 Water Authority of Fiji General Conditions of Contract - Plant Hire Section 6.1 Report of Statutory Authorities – June 2013 8 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI Table 7.4: List of Unregistered Vehicles in WAF Plant Hire Contract 2011 Location Vehicle Type Quantity of Vehicles Contracted Vehicle Registration Numbers Ba Lautoka Nadi Ba Excavator - Small Excavator - Medium Excavator - Medium Excavator - Medium 1 2 2 2 Unregistered Unregistered Unregistered Unregistered Tendered Price Per Hour ($) 35.50 55.50 55.50 55.50 Since the inception of the contract in June 2011 WAF did not verify with LTA to confirm the registration of these plants as of the date of audit.
In the absence of vehicle registration numbers in the plant hire contract there is a high risk that the contractor may supply unregistered/private plant for hire, subcontract to other supplier to fulfil WAF’s contractual obligation or not have those plant available.
Recommendations WAF should:    not consider unregistered plant/vehicles for contracts; verify the registration of plants/vehicles with LTA before awarding the contract; and update its plant hire contract to ensure that it reflects registration numbers of all the vehicles hired.

Management Comments The contractors were called to provide the vehicle # during the hiring period since they never specified the vehicle # while applying for tender.
  This means that the contract did not specify the vehicle number and would provide as per our request.

The contractor provided a valid third party during use.

This does not mean that the vehicles were unregistered from LTA.

7.10 Discrepancies in Purchase of Goods/Services The finance officer should ensure that purchase orders are authorised by officers who have been delegated authority to procure goods, services and works before issuing it.
Purchase orders should be issued when procuring any goods, services or works from an organization, unless a contract or agreement has been entered into.

Immediately after payment has been effected, the payment officer must stamp “PAID” on all vouchers and supporting documents to avoid any double payments.

Review of payment vouchers revealed the following anomalies in purchases of goods and services.
Several instances were noted where the purchase orders issued to Supplier 1 were not authorised for payment at all.

Refer to Table 7.5 for examples.

Report of Statutory Authorities – June 2013 9 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI Table 7.5: Purchase Order Not Authorised Date 26/04/12 26/04/12 26/04/12 21/05/12 23/05/12 Purchase Order Number PO18588 PO18586 PO18587 PO19220 PO19250 Particulars Payment for hire of excavator for earth works.
Payment for cartage of excavator from yard to field and return.

Payment for hire of excavator for earth works.

Payment for hire of excavator for digging and back filling.

Payment for earth works.

Amount ($) 13,972.50 1,840.00 13,627.50 12,187.15 16,611.77  Several cases were noted where purchase orders were not issued for hire of plant and equipment.
Purchase orders were issued after invoices were received for payment from the suppliers of plant and equipment only to fulfil the requirement of issuing purchase orders.

According to the Financial Accountant, they were not able to ascertain the number of hours plant and equipment were required to be hired.

As such the purchase orders were issued after the job was completed.

Refer to Appendix 2 for examples.


 Adequate supporting documents such as daily vehicle running sheets and three quotations were not always attached to the payment vouchers.

Refer to Table 7.6 below for examples.

Table 7.6: Supporting Documents Not Attached To Payment Vouchers Date Cheque Number 16/5/12 18254 Payee Particulars Payee 1 Hire of extra digging and backfilling.
large excavator Amount ($) Comments for 33,600.00 Only one quote attached 16/8/12 19450 Payee 2 30/8/12 19703 Payee 3 20/8/12 19506 Payee 4 Plant Hire for cleaning flood silt/sludge and dredging along the river bank at the Matavo Bore field during flood rehab.

Plant Hire payment for various jobs that was carried out during flood rehab in Lautoka.

Payment during flood.

large excavator for extra No daily vehicle running sheet attached.
14,072.50 Only one quote attached No daily vehicle running sheet attached.

30,840.50 No daily vehicle running sheet attached.

17,600.00 No daily vehicle running sheet attached.

 Payment vouchers and supporting documents were not always stamped “PAID”.

Refer to Table 7.7 below for examples.

Table 7.7: Payment Vouchers and Supporting Documents Not Stamped “PAID” Date Cheque Number Payee Particulars 16/04/12 11/07/12 17889 18885 Payee A Payee B Payment for bailing out various locations in Nadi.
Payment for hire of 320 KVA generator.

27/04/12 18037 Payee C 24/05/12 18325 Payee C Payment for hire of excavator for digging and back filling.

Payment to cart excavator from Nadi to Ba and return.

Payment for hire of excavator for digging and backfilling.

Payment for hire of excavator for digging and back filling.

Payment for earth works.


Report of Statutory Authorities – June 2013 Amount ($) 62.650.00 2,323.04 13,972.50 1,840.00 13,627.50 12,187.15 16,611.77 10 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI Date Cheque Number Payee Particulars 06/08/12 19272 Payee D Payment for earth works.

08/02/12 17337 Payee E 13/03/12 17621 Payee F Payment for hire of 40ft trailer to cart water tanks from Laucala beach estate and wailoku stores to WAF Ba depot on 27/01/12 and 29/01/12.
Payment for 10 x 12” supa coupling 300mm (OD 327mm – 350mm).

Payment for 2 x 12’ x 45 degrees FL-FL bend (300mm x 45 degrees).

Amount ($) 25,537.75 5,175.00 9,500.00 5,800.00 The findings indicate that proper payment procedures were not always followed by WAF and adequate internal controls are lacking in the purchase and payments system.

The risk of fraud, misappropriation of funds and double payments are high with inadequate internal controls.
Recommendations WAF should ensure that:     purchase order is properly authorized by officers when procuring goods and services; purchase orders are issued prior to acquiring goods and services to ensure no unauthorized purchases are paid; payment vouchers are adequately supported to avoid fictitious payments; and all payment vouchers and supporting documents are stamped “PAID” after payment has been made to avoid double payments.
Management Comments Table 4: Purchase Order Not Authorised    This was a practice from previous years for Plant Hire.

Instructions were issued in order to carry out the work, and when completed contractor have to submit invoice for payment.

This procedure has changed and currently the process is that a requisition is generated before the invoices are received for payments.

Responsible staff has been advised and the stamping process is still going on.
Supplier 1 cheque had PO not signed, this was overlooked by person checking the vouchers and appropriate measures have been taken to rectify this in future.

Table 5: Supporting Documents Not Attached To Payment Vouchers For Excavators and Backhoes, delivery dockets are used instead of daily running sheets.

  Quotations are always sited when approval for the requisitions is sought.

The quotations are filed in the quotations file for our record purpose.
Note that sometimes when quotations are called only 1 supplier responses to the request thus only one quotation is used.
Report of Statutory Authorities – June 2013 11 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI 7.11 Purchase of Water Tanks The tender committee shall consider and may evaluate the acceptance of any tender called for the supply of goods and services where the estimated price of those goods or services exceeds twenty thousand dollars ($20,000).4 As per the Government approved tender number CTN106/2011 the tendered price for 10,200 litre water tank was $1,750.
WAF purchased a total of 20 Rotomould water tanks in two different sizes from two suppliers for water carting in Ba.

These included 10 units of 5,200 litre water tanks at $875 each totalling $8,750 and 10 units of 10,000 litre water tanks at $1,750.00 each totalling $17,500.

The total purchase value was $26,250.00.


The audit noted that WAF did not call for any tender for the purchase of water tanks but instead used the Government tender number CTN106/2011 namely Contract for Supply of Water Tanks for Whole of Fiji.

In addition WAF purchased 10 x 10,000 litre water tanks through purchase order number PO17332 of 21/02/12 at a price of $1,750 each which was the tendered price for 10,200 litre tanks as per Government tender number CTN106/2011.
Hence the water tanks of 10,000 litre capacity were supplied at a price for 10,200 litre tanks.

The audit noted that WAF did not enquire about the smaller size tanks supplied at the same price by the supplier.

The findings indicate that WAF did not follow proper procurement procedures for purchases of goods and service costing more than $20,000.
Recommendations WAF should:    ensure that it complies with its tender procedures; ensure that tenders are called for purchase of goods and services exceeding $20,000; and investigate the non compliance to tender process and take appropriate action.

Management Comments   Payment to one of the supplier's Purchase Orders did not have the necessary board approval due to the emergency as the water tanks were urgently needed for supply of water to the Flood affected areas.
Note that due to the urgency of the tanks General Manager Production suggested that the Government contract be used.

These are attached in the source # 17523 for reference.

10,000 litre tanks were supplied at $ 1,750.00 whereas 5,200 litre tanks were supplied at a price of $ 875.00.
Although Government Tender CTN 106/2011 states that 10,200 litre will be supplied at $ 1750.00 a quotation was sought from the same supplier on 27th January 2012 and the price stated for 10,000 litre tanks was $ 1750.00.Therefore WAF purchased on the price advised on 27th January 2012 .Note letter is attached in Chq #17523 for reference.
4 Water Authority of Fiji Cash Management and Treasury Policy Section 2.1 Report of Statutory Authorities – June 2013 12 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI 7.12 General Ledger Posting All payments, including VAT, must be immediately recorded in the general ledger system ensuring that these are posted to the correct allocations.

General ledger posting should reflect all account numbers as this ensures that expenses are posted to the correct account area.
The WAF’s general ledger uses 18 digit account number.

Refer to Table 7.8 below for details of the account number.

Table 7.8: General Ledger Account Structure Description Account Number 66652-01-03-05-06-2005 (example) 66652 01 03 05 06 2005 GL code Business unit Region Depot Process Activity The audit noted that WAF posted flood rehabilitation expenditure to the general ledger account titled Repair & Maintenance Disaster Risk Management totalling to $3,396,586.68.
Out of this $ 2,407,095.93 or 71% of expenditure was posted to general ledger with ‘Depot’ and ‘Process’ codes in account numbers set to default value of zero.

This made it difficult to determine the amount of grant funds used at various Depots.

Refer to Table 7.9 below for details.
Table 7.9: Posting to Repair & Maintenance Disaster Risk Management General Ledger Account Account Number 66652-01-03-00-00-2000 66652-01-03-00-00-2001 66652-01-03-00-00-2002 66652-01-03-00-00-2003 66652-01-03-00-00-2004 66652-01-03-00-00-2005 66652-01-03-00-00-2006 66652-01-03-00-00-2007 66652-01-03-00-00-2008 66652-01-03-00-00-2009 66652-01-03-00-00-2010 66652-01-03-00-00-2011 66652-01-03-00-00-2012 66652-01-03-00-00-2013 66652-01-03-00-00-2014 66652-01-03-00-00-2015 Total Amount Posted ($) 164,964.76 189,108.27 4,256.50 524,936.27 337,399.45 222,529.99 133,298.87 180,888.70 322,674.50 12,240.96 4,281.74 5,032.18 122,860.20 87,456.90 52,266.12 42,900.52 2,407,095.93 In addition the audit noted that expenses incurred using the grant funds for flood rehabilitation works were posted in the general ledger according to expenditure allocations.
WAF was not able to provide Report of Statutory Authorities – June 2013 13 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI details such as grant funds used per Depot, list of projects funded from grant funds and amount of grant funds used for each project.

In absence of such information the audit was not able to establish the grant funds allocated to each Depot, funds used on each project and the number of projects funded from the grant funds.
Recommendations WAF should ensure that:   expenses are correctly posted to their respective depot or process account; and it is able to provide details such as total grant funds at each Depot Fiji wide, total funds used on each project and the number of projects funded from the grant funds.

Management Comments A manual report can be generated to reflect the amount of Grant allocated for each Depot.

This can be done through checking the source documents.
A list of projects funded and how much funds were used can also be generated from this manual report.

Some of the works were done outside the depot area, which cannot be expensed to a specific depot thus; a default depot and process were used.
7.13 Access to Records In the exercise of his duties, the Auditor-General may call upon any officer for any explanation and information he may require or may authorise any officer on his behalf to conduct any enquiry, examination or audit.5 The audit noted that the Project team failed to produce the following documents for audit inspection.

 The periodic progress reports for the flood rehabilitation works carried out.
In the absence of progress report audit could not establish if flood rehabilitation works were properly planned and completed on time.

 Details such as repairs and maintenance, design, contractors hired, duration of works, progress report and funds utilised for the following projects.
 Waiwai dam and pipeline  Vaturu bulk supply  Varaciva pump station  Moto bridge  Buried meters in various locations In absence of these records the audit could not verify whether the projects were carried out according to plan.

In addition audit could not establish whether appropriate quantity and quality of materials were supplied.
5 Audit Act 7 (1) (a) & (b) Report of Statutory Authorities – June 2013 14 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI Recommendation WAF must ensure that all documents pertaining to flood rehabilitation works including repairs and maintenance, design, progress reports and funds utilized are properly maintained and made available for audit inspections.

Management Comments In response to the above a manual report could be generated for each individual projects (in excel) when required.
This can be prepared after checking the source documents for payments.
7.14 Anomalies in Vehicle/Plant Hire The Contractor must not assign, transfer or sub – contract any of its rights or obligations under the Contract without the Principal’s prior written consent, which the Principal may in its absolute discretion either refuse to give or grant subject to any condition as the Principal thinks fit.6 The records contained on the registration certificate shall be kept and maintained in accordance with the provisions of this Act and include, but not be limited to renewal of registration, current expiry date and date of next inspection; changes of ownership or financial interest; modifications to the vehicle; and changes in the license class, and any exemptions and conditions.7 The Authority may register motor vehicles under the provisions of this Act to operate a private license which authorizes the use of the motor vehicle subject to this Act and the conditions of the license; and does not authorize the use of the motor vehicle for commercial purposes, or as a public service vehicle; and a commercial license authorizes the use of the motor vehicle for the carriage of goods in relation to the business of the owner, subject to this Act and the conditions of the licence; and limits the carriage of passengers to bona-fide employees and other persons directly involved in the carrying on of the business of the owner…8 WAF hired vehicles/plant from its contracted suppliers during flood rehabilitation works in the western division in 2012.
The audit noted the following anomalies relating to vehicle/plant hire.

 Several approved suppliers of vehicle/plant sub contracted its obligations to supply the vehicles/plants to other suppliers, particularly individuals who were not the approved vehicle/plant suppliers as per WAF Vehicle/Plant Hire contract agreement.

Refer to Table 7.10 for examples.
Table 7.10: Vehicle/Plant Sub Contracted Vehicle Registration Numbers Make of the Vehicle Vehicle/P lant Body Type Vehicle Usage Class Registration Validity As At 31/12/12 Owner of The Vehicle As At LTA Records BO 820 Hino Tray Truck Commercial Yes Shiu Nadan 6 WAF Vehicle/Plant Hire Contract Paragraph 18 7 Land Transport Act 1998 Section 51 (2) 8 Land Transport Act 1998 Section 53 (1) Report of Statutory Authorities – June 2013 Owner as per WAF Vehicle/ Plant Hire Contract Amar’s Digging Works Comments Hire of truck to cart water in Lautoka.
of 20/08/12.
Amar’s Digging Works statement number 899 PO21415 15 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI Vehicle Registration Numbers Make of the Vehicle Vehicle/P lant Body Type Vehicle Usage Class Registration Validity As At 31/12/12 Owner of The Vehicle As At LTA Records Comments Owner as per WAF Vehicle/ Plant Hire Contract BY 376 Nissan CL 503 Mitsubishi DA 837 Isuzu Flat truck Tray Truck Tray Truck top Commercial Yes Shiu Nadan Commercial Yes Hari Chand Commercial Yes Sushil Kumar EB 583 Hitachi Excavator Commercial Yes Sushil Kumar EC 385 Hino Tray truck Commercial Yes Sumeet Kumar EG 224 Mitsubishi Tray truck Commercial Yes Shiu Nadan EO 888 Isuzu Tray truck Commercial Yes Abhay Chand EP 543 Hitachi Excavator Commercial Yes Sushil Kumar EP 325 Mitsubishi Mobile crane Commercial Yes Laser Motor Rewinders and Electrical Services Limited FA 018 Hino Dump truck Commercial Yes Sushil Kumar Not listed Not listed Not listed Not listed Not listed Not listed Not listed Not listed Not listed Not listed to of for for for PO21438 amounting of 04/07/12 amounting Comments withheld $1,080.
Hire of truck to load loose soil depot around Lautoka perimeter.

of 21/08/12.

Amar’s Digging Works statement number 795 of 07/05/12 amounting to $1,120.00 Hire of truck for water carting in Ba.

PO21425 of 20/08/12.

Works Digging Amar’s statement number 607 of 27/02/12 to $2,460.00 Hire flood truck of rehabilitation.

Amar’s Digging Works statement number 851 of 14/06/12 amounting to $2,922.50.

Hire of excavator flood rehabilitation.


Amar’s Digging Works statement number 713 of 02/04/12 amounting to $1,184.00.

Hire flood truck rehabilitation.

Amar’s Digging Works statement number 730 of 02/04/12 amounting to $1,487.50.

flood truck Hire rehabilitation.

Amar’s Digging Works statement number 761 of 21/04/12 amounting to $2,625.00.

flood truck Hire rehabilitation.

Amar’s Digging Works statement number 755 of 18/04/12 amounting to $3,736.25.
Hire of excavator for digging and loading soil at Buabua WTP of 20/08/12.

Amar’s Digging Works statement number 1207 to of 06/02/12 amounting $962.00.

Hire of hype truck for loading fittings to job site.

PO21454 of 21/08/12.

Amar’s Digging Works statement number 1269 of 30/01/12 amounting to $1,277.50.

Hire flood truck rehabilitation.

Amar’s Digging Works statement number 734 of 02/04/12 amounting to $1,120.00.
road, PO21375 for for for of of of Report of Statutory Authorities – June 2013 16 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI  The contract agreement required that all plants/vehicles provided by the contractor to have valid registration.

The registrations of several plants/vehicles sub contracted by the main contractors were expired prior to 2012 and were not renewed as per Land Transport Authority records.

These plants/vehicles with invalid registrations were continued to be hired by WAF.
Refer to Table 7.11 for examples.
Table 7.11: Expired Registrations of Vehicle/Plant Sub Contracted Vehicle Registrati on Numbers Make of the Vehicle Vehicle/P lant Body Type Vehicle Usage Class Registration Validity As At 31/12/12 Owner of The Vehicle As At LTA Records EA 422 Hitachi Excavator Commercial No 24/06/09 – Vinay Vikash Hire Truck Services Owner as per WAF Vehicle/ Plant Hire Contract Not listed EU 370 Hitachi Excavator Commercial FB 298 Hitachi Excavator Commercial No 05/02/10 – Vuksich Borich limited and (Fiji) Not listed No 24/06/09 – Vuksich Borich limited and (Fiji) Not listed FJ 587 Kato Excavator Commercial No 23/01/09 – Sudesh chand Not listed Comments Comments withheld Hire of excavator at Waiwai dam.
PO21268 of 14/08/12.

Vinay Vikash Hire Truck Services delivery/invoice number 2878 of 30/07/12, 2879 of 31/01/07, 2880 of 01/08/12, 2881 of 02/08/12 and 2882 of 03/08/12.

Statement 9324 amounting to $4,400.

Hire of excavator for digging and backfilling for job site.

PO19250 of 21/05/12.

Vuksich invoice number and Borich (Fiji) Limited WAF002 to amounting 20/02/12 of $12,187.12.

Hire of excavator for digging and backfilling for job site.

PO19220 of 21/05/12.


Vuksich invoice number and Borich (Fiji) Limited WAF002 to amounting 20/02/12 of $12,187.12.

Hire of excavator registration number FJ 587 and EV 511 during rehabilitation.

PO20844 of 30/07/12.

Sudesh Transport company statement number 440 of 30/04/12 amounting to $6,750.00.

flood  WAF was to hire commercial vehicles only.

One of the contractors, subcontracted two vehicles from different owners.

These subcontracted vehicles were classed as private vehicles.
The contractor continued to supply private vehicles to WAF.

Refer to Table 7.12 for examples.
Table 7.12: Vehicle/Plant Classified As Private Class Vehicle Registrati on Numbers EP 136 Make of the Vehicle Vehicle/P lant Body Type Vehicle Usage Class Registration Validity As At 31/12/12 Owner of The Vehicle As At LTA Records Nissan Sedan Excavator Private Yes Kacivi ledua Owner as per WAF Vehicle/ Plant Hire Contract Not listed DA 387 Mitsubishi Sedan car with extra boot Private Yes Richard Hargrove C Not listed Report of Statutory Authorities – June 2013 Comments Comments withheld Hire of excavator for digging and backfilling at Buabua intake.
PO21416 of 20/08/12.

Amar’s Digging Works statement number 790 of 05/05/12 amounting to $1,406.00.

Hire of Tipper truck for carting soil for repair work.

PO21421 of 20/08/12.

Amar’s Digging Works statement number 786 of 07/05/12 amounting to $1,785.00.
As per LTA records vehicle registration number DA387 is a car with extra boot 17 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI Vehicle Usage Class Make of the Vehicle Vehicle/P lant Body Type Registration Validity As At 31/12/12 Vehicle Registrati on Numbers  The vehicle class stated in the WAF’s contract agreement for three of the vehicles was incorrectly stated.
In WAF’s contract agreement these vehicles were classified as tipper truck and excavator when the class of vehicle should be either private/commercial.

WAF is supposed to hire commercial vehicles only however WAF does not know whether these vehicles are private or commercial.

Refer to Table 7.13 for examples.

Owner as per WAF Vehicle/ Plant Hire Contract Owner of The Vehicle As At LTA Records Comments however as per WAF purchase order the same vehicle is referred to as a tipper truck.
Table 7.13: Deviating Class of Vehicle/Plant between WAF and LTA Records Vehicle Registra tion Number s DA 387 Make of the Vehicle Vehicle/P lant Body Type Vehicle Usage Class Registration Validity As At 31/12/12 Owner of The Vehicle As At LTA Records Mitsubishi Sedan car with extra boot Private Yes Richard Hargrove C Owner as per WAF Vehicle/ Plant Hire Contract Not listed EQ 986 Toyota Van Commercial No 10/02/11 – Uno limited Not listed FK 687 Caterpillar Fork lift Commercial Yes Not listed Golden Manufacturers Limited Comments Comments withheld Hire of Tipper truck for carting soil for repair work.
PO21421 of 20/08/12.

Amar’s Digging Works statement number 786 of 07/05/12 amounting to $1,785.00.

the same vehicle As per LTA records vehicle registration number DA387 is a car with extra boot however as per WAF purchase order is referred to as a tipper truck.

Hire of excavator for digging and clearing stones and debris from Buabua dam.

PO21419 of 20/08/12.

Amar’s Digging Works statement number 721 of 02/04/12 amounting to $5,440.00.
As per LTA records vehicle registration number EQ 986 is a van however as per WAF purchase order the same vehicle is referred to as an excavator.

Hire of excavator for digging and backfilling for job site.

PO18588 of 26/04/12.

Vuksich and Borich (Fiji) Limited invoice number WAF001 of 20/02/12 amounting to $13,972.50.

As per LTA records vehicle registration number FK 687 is a forklift however as per WAF purchase order the same vehicle is referred to as an excavator.
 Several vehicles were hired by WAF from the approved contractors which were not listed in the contract agreement.

The rate charged by the contractors for these vehicles may not be correct.

Refer to Table 7.14 below for examples.
Report of Statutory Authorities – June 2013 18 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI Table 7.14: Vehicle/Plant Sub Contracted Not Listed In WAF Vehicle/Plant Hire Contract Vehicle Registrati on Numbers Make of the Vehicle Vehicle/P lant Body Type Vehicle Usage Class Registration Validity As At 31/12/12 Owner of The Vehicle As At LTA Records DK 371 Kato Excavator Commercial Yes Dayal Quarries Limited Owner as per WAF Vehicle/ Plant Hire Contract Not listed EA 422 Hitachi Excavator Commercial No 24/06/09 – Vinay Vikash Hire Truck Services Not listed EU 370 Hitachi Excavator Commercial FB 298 Hitachi Excavator Commercial FJ 587 Kato Excavator Commercial No 05/02/10 No 24/06/09 No 23/01/09 – – Vuksich Borich limited Vuksich Borich limited and (Fiji) and (Fiji) Not listed Not listed – Sudesh chand Not listed Comments Comments withheld Hire of excavator to work at Moto bridge.
PO20774 of 26/07/12.

Dayal Quarries Limited statement number of 05/05/12 amounting to $3,410.00.

Hire of excavator at Waiwai dam.

PO21268 of 14/08/12.

Vinay Vikash Hire Truck Services delivery/invoice number 2878 of 30/07/12, 2879 of 31/01/07, 2880 of 01/08/12, 2881 of 02/08/12 and 2882 of 03/08/12.

Statement 9324 amounting to $4,400.

Hire of excavator for digging and backfilling for job site.

PO19250 of 21/05/12.


Vuksich and Borich (Fiji) Limited invoice number WAF002 of 20/02/12 amounting to $12,187.12.

Hire of excavator for digging and backfilling for job site.

PO19220 of 21/05/12.

Vuksich and Borich (Fiji) Limited invoice number WAF002 of 20/02/12 amounting to $12,187.12.

Hire of excavator registration number FJ 587 and EV 511 during rehabilitation.

PO20844 of 30/07/12.

Sudesh Transport company statement number 440 of 30/04/12 amounting to $6,750.00.
flood The finding indicates that contractors did not always comply with the terms of the contract agreement.

In addition WAF did not verify that the contractors were complying with the contract agreements when supplying plants/vehicles as per the contract agreement.
Recommendations WAF should:      ensure that vehicle/plant contractors avoid sub contracting other suppliers as this may result in additional hire charges imposed by the contractors; ensure that vehicles/plant hired have valid registrations; ensure that the contractors comply with the requirements of the contract at all times; carry out a thorough investigation on the matter and take necessary actions; and terminate the contracts of suppliers who do not comply with the requirements of the contract.
Management Comments No comments provided.
Report of Statutory Authorities – June 2013 19 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI Appendix 7.1: Works Certified By Officer other than the Engineer/Supervisor Date Cheque Number Payee Plant/Vehicle Instructions 24/05/12 18325 Payee 1 51777 of 9/2/12 Supplier Plant Hire/Delivery Docket/Invoice Number 5102 of 9/2/12 42359 15/2/12 42371 16/2/12 42385 16/2/12 31002 18/2/12 of 5104 of 15/2/12 of 5105 of 16/2/12 of 5107 of 17/2/12 of 5109 of 18/2/12 25/05/12 18325 Payee 1 of of 31050 20/2/12 31086 21/2/12 51693 of 2/3/12 5111 of 20/2/12 5114 of 21/2/12 Amount ($) Comments 12,187.12 Machine tally sheet certified on behalf of the engineer/supervisor.
No time allocated for idle and waiting time.

Machine tally sheet certified on behalf of the engineer/supervisor.

No time allocated for idle and waiting time.

Machine tally sheet certified on behalf of the engineer/supervisor.

No time allocated for idle and waiting time.

Machine tally sheet certified on behalf of the engineer/supervisor.

No time allocated for idle and waiting time.

Start time, stop end and hours worked not filled in the machine tally sheet.
Machine tally sheet signed on behalf of the engineer/supervisor.

No time allocated for idle and waiting time.

Machine tally sheet certified on behalf of the engineer/supervisor.

No time allocated for idle and waiting time.

Machine tally sheet certified on behalf of the engineer/supervisor.

No time allocated for idle and waiting time.

5058 of 2/3/12 16,611.77 Machine tally sheet certified on behalf of the engineer/supervisor.
51694 of 3/2/12 5059 of 3/3/12 51695 of 6/3/12 5060 of 6/3/12 92890 of 8/3/12 5061 of 8/3/12 928906 9/3/12 of 5062 of 9/3/12 No time allocated for idle and waiting time.

Machine tally sheet certified on behalf of the engineer/supervisor.

No time allocated for idle and waiting time.

Machine tally sheet certified on behalf of the engineer/supervisor.

No time allocated for idle and waiting time.

Machine tally sheet certified on behalf of the engineer/supervisor.
No time allocated for idle and waiting time.

Use of Fiji Public Works Department Plant/Vehicle job instructions.

Machine tally sheet certified on behalf of the engineer/supervisor.

No time allocated for idle and waiting time.

Use of Fiji Public Works Department Plant/Vehicle job instructions.
Report of Statutory Authorities – June 2013 20 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI Date Cheque Number Payee Plant/Vehicle Instructions Supplier Plant Hire/Delivery Docket/Invoice Number Amount ($) Comments 928920 10/3/12 928936 12/3/12 928947 13/3/12 928966 14/3/12 928978 15/3/12 928990 16/3/12 122870 17/3/12 1228718 19/3/12 944322 29/3/12 944274 9/4/12 943745 11/4/12 943787 13/4/12 of 5063 of 10/3/12 of 5064 of 12/3/12 of 5065 of 13/3/12 of 5066 of 14/3/12 of 5067 of 15/3/12 of 5069 of 16/3/12 of 5069 of 17/3/12 of 5070 of 19/3/12 of 2798 of 29/3/12 Machine tally sheet certified on behalf of the engineer/supervisor.
No time allocated for idle and waiting time.

Machine tally sheet certified on behalf of the engineer/supervisor.

No time allocated for idle and waiting time.

Use of Fiji Public Works Department Plant/Vehicle job instructions.

Machine tally sheet certified on behalf of the engineer/supervisor.

No time allocated for idle and waiting time.

Use of Fiji Public Works Department Plant/Vehicle job instructions.

Machine tally sheet certified on behalf of the engineer/supervisor.


No time allocated for idle and waiting time.

Use of Fiji Public Works Department Plant/Vehicle job instructions.


280.00 Use of Fiji Public Works Department Plant/Vehicle job instructions.
of 2912 of 9/4/12 1,360.00 Use of Fiji Public Works Department Plant/Vehicle job instructions.

of 2914 of 11/4/12 1,530.00 Use of Fiji Public Works Department Plant/Vehicle job instructions.

of 2975 of 13/4/12 1,870.00 Use of Fiji Public Works Department Plant/Vehicle job instructions.
06/08/12 19272 Payee 2 Report of Statutory Authorities – June 2013 21 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI Date Cheque Number Payee Plant/Vehicle Instructions Supplier Plant Hire/Delivery Docket/Invoice Number Amount ($) Comments of of 940435 14/4/12 94431 of 2/4/12 944334 of 3/4/12 944350 4/4/12 944364 5/4/12 944386 6/4/12 944208 7/4/12 of of of 2994 of 14/4/12 1,870.00 Use of Fiji Public Works Department Plant/Vehicle job instructions.
1860 of 2/4/12 1861 of 3/4/12 420.00 Use of Fiji Public Works Department Plant/Vehicle job instructions.

490.00 Use of Fiji Public Works Department Plant/Vehicle job instructions.

1862 of 4/4/12 525.00 Use of Fiji Public Works Department Plant/Vehicle job instructions.

1863 of 5/4/12 525.00 Use of Fiji Public Works Department Plant/Vehicle job instructions.

1864 of 6/4/12 595.00 Use of Fiji Public Works Department Plant/Vehicle job instructions.
1865 of 7/4/12 612.50 Use of Fiji Public Works Department Plant/Vehicle job instructions.
Report of Statutory Authorities – June 2013 22 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI Appendix 7.2: Purchase Orders Issued After Services Rendered Purchase Order Number Date Invoice Date Number Date Cheque Number Contractor 1 10/05/12 10/05/12 10/05/12 10/05/12 10/05/12 10/05/12 10/05/12 10/05/12 Contractor 2 31/01/12 31/01/12 21/05/12 21/05/12 21/05/12 21/05/12 21/05/12 21/05/12 21/05/12 21/05/12 21/05/12 21/05/12 21/05/12 21/05/12 21/05/12 21/05/12 21/05/12 21/05/12 21/05/12 21/05/12 21/05/12 21/05/12 21/05/12 21/05/12 03/07/12 03/07/12 03/07/12 03/07/12 03/07/12 03/07/12 03/07/12 03/07/12 03/07/12 03/07/12 03/07/12 03/07/12 18/07/12 PO18933 PO 18934 PO18935 PO18936 PO18937 PO18938 PO18939 PO18940 PO16921 PO16921 PO19199 PO19199 PO19199 PO19199 PO19199 PO19199 PO19198 PO19198 PO19198 PO19198 PO19200 PO19200 PO19200 PO19200 PO19200 PO19200 PO19200 PO19191 PO19191 PO19191 PO19191 PO19191 PO20304 PO20304 PO20304 PO20304 PO20304 PO20305 PO20305 PO20305 PO20305 PO20306 PO20306 PO20306 PO20617 21/02/12 15/02/12 15/02/12 15/02/12 21/02/12 15/02/12 27/02/12 21/02/12 04/01/12 05/01/12 26/01/12 27/01/12 28/01/12 29/01/12 30/01/12 31/01/12 02/02/12 03/02/12 04/02/12 05/02/12 06/02/12 07/02/02 08/02/12 09/02/12 10/02/12 11/02/12 12/02/12 13/02/12 14/02/12 15/02/12 18/02/12 19/02/12 04/06/12 05/06/12 06/06/12 07/06/12 08/06/12 12/06/12 13/06/12 14/06/12 15/06/12 13/06/12 14/06/12 15/06/12 25/06/12 6236 6218 6219 6258 6235 6221 6265 6233 6467 6468 6469 6470 6471 6472 6473 6474 6475 6476 6477 6478 6479 6480 6481
16/05/12 16/05/12 16/05/12 16/05/12 16/05/12 16/05/12 16/05/12 16/05/12 24/05/12 24/05/12 24/05/12 24/05/12 24/05/12 24/05/12 24/05/12 24/05/12 24/05/12 24/05/12 24/05/12 24/05/12 24/05/12 24/05/12 24/05/12 24/05/12 24/05/12 24/05/12 24/05/12 24/05/12 24/05/12 24/05/12 24/05/12 24/05/12 11/07/12 11/07/12 11/07/12 11/07/12 11/07/12 11/07/12 11/07/12 11/07/12 11/07/12 11/07/12 11/07/12 11/07/12
 25/07/ Report of Statutory Authorities – June 2013 Amount ($) OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI Purchase Order Number Date Invoice Date Number Date Cheque Number Amount ($) 18/07/12 18/07/12 18/07/12 18/07/12 18/07/12 18/07/12 18/07/12 18/07/12 18/07/12 18/07/12 18/07/12 18/07/12 18/07/12 18/07/12 18/07/12 18/07/12 18/07/12 18/07/12 18/07/12 21/05/12 21/05/12 21/05/12 21/05/12 21/05/12 21/05/12 21/05/12 21/05/12 21/05/12 21/05/12 21/05/12 21/05/12 21/05/12 21/05/12 21/05/12 21/05/12 21/05/12 21/05/12 21/05/12 21/05/12 21/05/12 21/05/12 21/05/12 13/06/12 13/06/12 13/06/12 13/06/12 13/06/12 13/06/12 13/06/12 13/06/12 13/06/12 13/06/12 PO20617 PO20617 PO20617 PO20617 PO20616 PO20616 PO20616 PO20616 PO20616 PO20615 PO20615 PO20615 PO20615 PO20615 PO20614 PO20614 PO20614 PO20614 PO20614 PO19193 PO19193 PO19193 PO19193 PO19193 PO19197 PO19197 PO19197 PO19192 PO19192
 PO19192 PO19192 PO19192 PO19213 PO19213 PO19213 PO19213 PO19213 PO19196 PO19196 PO19196 PO19196 PO19196 PO19863 PO19863 PO19863 PO19863 PO19863 PO19871 PO19871 PO19871 PO19871 PO19871 26/06/12 27/06/12 28/06/12 29/06/12 18/06/12 19/06/12 20/06/12 21/06/12 22/06/12 25/06/12 26/06/12 27/06/12 28/06/12 29/06/12 18/06/12 19/06/12 20/06/12 21/06/12 22/06/12 13/02/12 14/02/12 15/02/12 16/02/12 17/02/12 08/02/12 09/02/12 10/02/12 20/02/12 21/02/12 22/02/12 23/02/12 24/02/12 05/03/12 06/03/12 07/03/12 08/03/12
 09/03/12 27/02/12 28/02/12 29/02/12 01/03/12 02/03/12 21/05/12 22/05/12 23/05/12 24/05/12 25/05/12 28/05/12 29/05/12 30/05/12 31/05/12 01/06/ 25/07/12 25/07/12 25/07/12 25/07/12 25/07/12 25/07/12 25/07/12 25/07/12 25/07/12 25/07/12 25/07/12 25/07/12 25/07/12 25/07/12 25/07/12 25/07/12 25/07/12 25/07/12 25/07/12 24/05/12 24/05/12 24/05/12 24/05/12 24/05/12 24/05/12 24/05/12 24/05/12 24/05/12 24/05/12 24/05/12 24/05/12 24/05/12 24/05/12 24/05/12 24/05/12 24/05/12 24/05/12 24/05/12 24/05/12 24/05/12 24/05/12 24/05/12 19/06/12 19/06/12 19/06/12 19/06/12 19/06/12 19/06/12 19/06/12 19/06/12 19/06/12 19/06/ Report of Statutory Authorities – June 464.00
464.00 464.00 464.00 464.00 464.00 464.00 464.00 464.00 464.00 464.00 464.00 464.00 440.00 440.00 440.00 440.00 440.00 440.00 440.00 440.00 440.00 440.00 24 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI Purchase Order Number Date Invoice Date Number Date Cheque Number Amount ($) 04/08/12 04/08/12 04/08/12 04/08/12 04/08/12 04/08/12 04/08/12 04/08/12 04/08/12 04/08/12 09/08/12 09/08/12 09/08/12 09/08/12 09/08/12 09/08/12 09/08/12 09/08/12 09/08/12 09/08/12 09/08/12 09/08/12 09/08/12 09/08/12 09/08/12 09/08/12 09/08/12 09/08/12 09/08/12 09/08/12 09/08/12
 09/08/12 09/08/12 09/08/12 09/08/12 09/08/12 PO21040 PO21040 PO21040 PO21040 PO21040 PO21039 PO21039 PO21039 PO21039 PO21039 PO21204 PO21204 PO21204 PO21204 PO21204 PO21205 PO21205 PO21205 PO21205 PO21205 PO21207 PO21207 PO21207 PO21207 PO21207 PO21202 PO21202 PO21202 PO21202 PO21202 PO21203 PO21203 PO21203 PO21203 PO21203 PO21201 PO21201 PO21201 PO21201 PO21201 PO21200 PO21200 PO21200 PO21200 PO21200 PO21199 PO21199 PO21199 PO21199 PO21199 PO21198 PO21198 09/07/12 10/07/12 11/07/12 12/07/12 13/07/12 09/07/12 10/07/12 11/07/12 12/07/12 13/07/12 16/07/12 17/07/12 18/07/12 19/07/12 20/07/12 23/07/12 24/07/12 25/07/12 26/07/12 27/07/12 23/07/12 24/07/12 25/07/12 26/07/12 27/07/12 23/07/12 24/07/12 25/07/12 26/07/12 27/07/12 16/07/12 17/07/12 18/07/12 19/07/12 20/07/12 02/07/12 03/07/12 04/07/12 05/07/12 06/07/12 02/07/12 03/07/12 04/07/12 05/07/12 06/07/12 16/07/12 17/07/12 18/07/12 19/07/12 20/07/12 23/07/12 24/07/ 13/08/12 13/08/12 13/08/12 13/08/12 13/08/12 13/08/12 13/08/12 13/08/12 13/08/12 13/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12
 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/ 19487
19487 19487 19487 19487 19487 19487 19487 19487 19487 19487 19487 19487 19487 19487 19487 19487 19487 19487 19487 19487 19487 19487 19487 19487 19487 19487 19487 Report of Statutory Authorities – June OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI Purchase Order Number Date Invoice Date Number Date Cheque Number Amount ($) 09/08/12 09/08/12 09/08/12 13/08/12 13/08/12 13/08/12 13/08/12 13/08/12 13/08/12 13/08/12 13/08/12 13/08/12 13/08/12 13/08/12 13/08/12 13/08/12 13/08/12 13/08/12 13/08/12 13/08/12 13/08/12 13/08/12 13/08/12 16/08/12 16/08/12 16/08/12 16/08/12 16/08/12 16/08/12 16/08/12 16/08/12 16/08/12 16/08/12 16/08/12 16/08/12 16/08/12 16/08/12 16/08/12 16/08/12 16/08/12 16/08/12 16/08/12 16/08/12 16/08/12 16/08/12 16/08/12 16/08/12 16/08/12 PO21198 PO21198 PO21198 PO21239 PO21239 PO21239 PO21239 PO21239 PO21240 PO21240 PO21240 PO21240 PO21240 PO21241 PO21241 PO21241 PO21241 PO21241 PO21238 PO21238 PO21238 PO21238 PO21238 PO21288 PO21288 PO21288 PO21288 PO21288 PO21285 PO21285 PO21285 PO21285 PO21285 PO21284 PO21284 PO21284 PO21284 PO21284 PO21287 PO21287 PO21287 PO21287 PO21287 PO21286 PO21286 PO21286 PO21286
 PO21286 Contractor 3 21/05/12 21/05/12 PO19202 PO19203 25/07/12 26/07/12 27/07/12 30/07/12 31/07/12 01/08/12 02/08/12 03/08/12 30/07/12 31/07/12 01/08/12 02/08/12 03/08/12 30/07/12 31/07/12 01/08/12 02/08/12 03/08/12 30/07/12 31/07/12 01/08/12 02/08/12 03/08/12 06/08/12 07/08/12 08/08/12 09/08/12 10/08/12 06/08/12 07/08/12 08/08/12 09/08/12 10/08/12 06/08/12 07/08/12 08/08/12 09/08/12 10/08/12 06/08/12 07/08/12 08/08/12 09/08/12 10/08/12 06/08/12 07/08/12 08/08/12 09/08/12 10/08/12 28/03/12 21/03/12 7448
08/08/12 09/08/12 10/08/12 28/03/12 21/03/ 20/08/12 20/08/12 20/08/12 22/08/12 22/08/12 22/08/12 22/08/12 22/08/12 22/08/12 22/08/12 22/08/12 22/08/12 22/08/12 22/08/12 22/08/12 22/08/12 22/08/12 22/08/12 22/08/12 22/08/12 22/08/12 22/08/12 22/08/12 22/08/12 22/08/12 22/08/12 22/08/12 22/08/12 21/08/12 21/08/12 21/08/12 21/08/12 21/08/12 21/08/12 21/08/12 21/08/12 21/08/12 21/08/12 21/08/12 21/08/12 21/08/12 21/08/12 21/08/12 21/08/12 21/08/12 21/08/12 21/08/12 21/08/12 24/05/12 24/05/ Report of Statutory Authorities – June OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF
26 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI Purchase Order Number Date Invoice Date Number Date Cheque Number 21/05/12 23/05/12 26/04/12 26/04/12 26/04/12 20/06/12 20/06/12 20/06/12 20/06/12 20/06/12 20/06/12 20/06/12 Contractor 4 21/08/12 21/08/12 21/08/12 21/08/12 21/08/12 16/07/12 16/07/12 16/07/12 16/07/12 16/07/12 16/07/12 16/07/12 16/07/12 16/07/12 01/08/12 01/08/12 01/08/12 01/08/12 01/08/12 01/08/12 01/08/12 01/08/12 01/08/12 19/07/12 19/07/12 19/07/12 19/07/12 19/07/12 01/08/12 18/07/12 18/07/12 18/07/12 01/08/12 01/08/12 01/08/12
 01/08/12 01/08/12 01/08/12 PO19220 PO19250 PO18586 PO18587 PO18588 PO20033 PO20033 PO20033 PO20033 PO20033 PO20033 PO20033 PO21484 PO21484 PO21484 PO21484 PO21484 PO20575 PO20575 PO20575 PO20575 PO20575 PO20575 PO20575 PO20575 PO20575 PO20981 PO20981 PO20981 PO20981 PO20980 PO20980 PO20980 PO20980 PO20980 PO20655 PO20655 PO20655 PO20655 PO20655 PO20982 PO20636 PO20636 PO20636 PO20979 PO20979 PO20979 PO20979 PO20979 PO20979 20/02/12 21/03/12 20/02/12 29/02/12 20/02/12 02/04/12 03/04/12 04/04/12 05/04/12 06/04/12 07/04/12 09/04/12 07/02/12 09/02/12 10/02/12 11/02/12 12/02/12 12/04/12 13/04/12 14/04/12 15/04/12 16/04/12 17/04/12 18/04/12 19/04/12 20/04/12 01/05/12 02/05/12 03/05/12 04/05/12 09/04/12 10/04/12 11/04/12 12/04/12 13/04/12 09/04/12 10/04/12 11/04/12 12/04/12 13/04/12 01/04/12 19/03/12 20/03/12 21/03/12 09/04/12 10/04/12 11/04/12 12/04/12 13/04/12 14/04/ 24/05/12 24/05/12 27/04/12 27/04/12 27/04/12 09/08/12 09/08/12 09/08/12 09/08/12 09/08/12 09/08/12 09/08/12 27/08/12 27/08/12 27/08/12 27/08/12 27/08/12 27/08/12 27/08/12 27/08/12 27/08/12 27/08/12 27/08/12 27/08/12 27/08/12 27/08/12 27/08/12 27/08/12 27/08/12 27/08/12 27/08/12 27/08/12 27/08/12 27/08/12 27/08/12 27/08/12 27/08/12 27/08/12 27/08/12 27/08/12 27/08/12 27/08/12 27/08/12 27/08/12
 27/08/ Report of Statutory Authorities – June 2013 Amount ($) 12,187.15 16,611.77 1,840.00 13,627.50 13,972.50 160.13 1,785.38 1,242.00 1,397.25 2,173.50 1,552.50
OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI Purchase Order Number Date Invoice Date Number Date Cheque Number Amount ($) 01/08/12 21/08/12 21/08/12 21/08/12 21/08/12 21/08/12 21/08/12 21/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 21/08/12 21/08/12 21/08/12 21/08/12 01/08/12 01/08/12 01/08/12 01/08/12 01/08/12 21/08/12 21/08/12 21/08/12 21/08/12 21/08/12 21/08/12 21/08/12 21/08/12 05/06/12 05/06/12 05/06/12 22/08/12 22/08/12 22/08/12 22/08/12 22/08/12 22/08/12 22/08/12 21/08/12 21/08/12 21/08/12 21/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 21/08/12 21/08/12 PO20979 PO21450 PO21450 PO21450 PO21450 PO21450 PO21450 PO21450 PO21377 PO21377 PO21377 PO21377 PO21377 PO21377 PO21498 PO21498 PO21498 PO21498 PO20978 PO20978 PO20978 PO20978 PO20978 PO21448 PO21448 PO21448 PO21503 PO21503 PO21503 PO21503 PO21503 PO19713 PO19713 PO19713 PO21546 PO21546 PO21546 PO21546 PO21546 PO21546 PO21546 PO21438 PO21438 PO21438 PO21438 PO21414 PO21414 PO21414 PO21414 PO21414 PO21439 PO21452 15/04/12 20/02/12 21/02/12 22/02/12 23/02/12 24/02/12 25/02/12 26/02/12 27/02/12 28/02/12 29/02/12 01/03/12 02/03/12 03/03/12 26/03/12 27/03/12 28/03/12 29/03/12 09/04/12 10/04/12 11/04/12 14/04/12
 15/04/12 26/04/12 27/04/12 30/04/12 14/02/12 15/02/12 16/02/12 18/02/12 19/02/12 03/04/12 04/04/12 05/04/12 06/02/12 07/02/12 08/02/12 09/02/12 10/02/12 11/02/12 12/02/12 10/04/12 11/04/12 12/04/12 13/04/12 05/03/12 06/03/12 07/03/12 08/03/12 09/03/12 30/04/12 02/04/ 690
3106 3107 3108 2413 2414 2415 2421 2420 3015 690 27/08/12 27/08/12 27/08/12 27/08/12 27/08/12 27/08/12 27/08/12 27/08/12 27/08/12 27/08/12 27/08/12 27/08/12 27/08/12 27/08/12 27/08/12 27/08/12 27/08/12 27/08/12 28/08/12 28/08/12 28/08/12 28/08/12 28/08/12 28/08/12 28/08/12 28/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 28/08/12 28/08/12 28/08/12 28/08/12 28/08/12 28/08/12 28/08/12 28/08/12 28/08/12 28/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/ Report of Statutory Authorities – June OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI Purchase Order Number Date Invoice Date Number Date Cheque Number Amount ($) 21/08/12 21/08/12 21/08/12 21/08/12 21/08/12 21/08/12 21/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 21/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12
 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 PO21452 PO21452 PO21452 PO21453 PO21453 PO21453 PO21453 PO21426 PO21426 PO21426 PO21426 PO21426 PO21489 PO21338 PO21338 PO21338 PO21338 PO21338 PO21338 PO21338 PO21339 PO21339 PO21339 PO21339 PO21340 PO21340
 PO21340 PO21340 PO21340 PO21342 PO21342 PO21342 PO21342 PO21343 PO21343 PO21343 PO21343 PO21345 PO21345 PO21345 PO21346 PO21346 PO21346 PO21346 PO21348 PO21348 PO21348 PO21348 PO21348 PO21353 PO21353 PO21353 03/04/12 04/04/12 05/04/12 10/04/12 11/04/12 12/04/12 13/04/12 12/03/12 13/03/12 14/03/12 15/03/12 16/03/12 17/02/12 20/02/12 21/02/12 22/02/12 23/02/12 24/02/12 25/02/12 26/02/12 27/02/12 28/02/12 29/02/12 01/03/12 25/06/12 26/06/12 27/06/12 28/06/12 29/06/12 14/02/12 15/02/12 16/02/12 17/02/12 05/03/12 06/03/12 07/03/12 08/03/12 07/03/12 08/03/12 09/03/12 10/04/12 11/04/12 12/04/12 13/04/12 01/05/12 02/05/12 03/05/12 04/05/12 05/05/12 26/03/12 27/03/12 28/03/ 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 19666 19666 19666 19666 19666 19666 19666 19666 19666 19666 19666 19666 19654 19658 19658 19658 19658 19658
Report of Statutory Authorities – June 280.00
280.00 280.00 280.00 280.00 280.00 280.00 280.00 592.00 592.00 592.00 280.00 280.00 280.00 490.00 248.00 248.00 248.00 248.00 248.00 280.00 280.00 280.00 29 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI Purchase Order Number Date Invoice Date Number Date Cheque Number 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 21/08/12 21/08/12 21/08/12 21/08/12 21/08/12 21/08/12 21/08/12 21/08/12 20/08/12 20/08/12 20/08/12 20/08/12 21/08/12 21/08/12 21/08/12 21/08/12 PO21353 PO21409 PO21409 PO21409 PO21409 PO21409 PO21410 PO21410 PO21410 PO21410 PO21411 PO21411 PO21411 PO21411 PO21411 PO21423 PO21423 PO21423 PO21423 PO21424 PO21424 PO21424 PO21424 PO21424 PO21375 PO21415 PO21415 PO21415 PO21415 PO21415 PO21416 PO21416 PO21417 PO21419 PO21420 PO21421 PO21445 PO21446 PO21454 PO21451 PO21451 PO21451 PO21451 PO21451 PO21378 PO21378 PO21378 PO21378 PO21486 PO21486 PO21486 PO21488 29/03/12 25/06/12 26/06/12 27/06/12 28/06/12 29/06/12 12/06/12 13/06/12 14/06/12 15/06/12 22/02/12 23/02/12 24/02/12 25/02/12 26/02/12 02/04/12 03/04/12 04/04/12 05/04/12 19/03/12 20/03/12 21/03/12 22/03/12 23/03/12 05/02/12 25/06/12 26/06/12 27/06/12 28/06/12 29/06/12 04/05/12 05/05/12 12/03/12 02/04/12 26/03/12 07/05/12 19/03/12 19/03/12 30/01/12 14/05/12 15/05/12 16/05/12
 17/05/12 18/05/12 17/04/12 18/04/12 19/04/12 20/04/12 26/01/12 27/01/12 28/01/12 26/01/ 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12
 30/08/12 30/08/12 30/08/12 30/08/12 30/08/12 30/08/12 30/08/12 30/08/12 30/08/12 30/08/12 30/08/12 30/08/12 30/08/12 30/08/12 30/08/12 30/08/12 30/08/12 30/08/12 30/08/12 30/08/12 30/08/12 30/08/12 30/08/12 30/08/12 30/08/12 30/08/12 30/08/12 30/08/ Report of Statutory Authorities – June 2013 Amount ($) OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI Purchase Order Number Date Invoice Date Number Date Cheque Number Amount ($) 21/08/12 20/08/12 20/08/12 05/06/12 05/06/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 21/08/12 21/08/12 21/08/12 21/08/12 21/08/12 21/08/12 21/08/12 21/08/12 21/08/12 21/08/12 21/08/12 21/08/12 21/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12
 Contractor 5 09/08/12 09/08/12 09/08/12 09/08/12 09/08/12 09/08/12 09/08/12 13/08/12 13/08/12 13/08/12 13/08/12 13/08/12 13/08/12 23/08/12 PO21488 PO21376 PO21376 PO19710 PO19710 PO21388 PO21388 PO21374 PO21374 PO21374 PO21374 PO21374 PO21374 PO21379 PO21379 PO21379 PO21379 PO21379 PO21455 PO21455 PO21455 PO21455 PO21455 PO19707 PO19707 PO19707 PO21442 PO21442 PO21442 PO21442 PO21442 PO21429 PO21429 PO21429 PO21429 PO21429 PO21151 PO21151 PO21151 PO21151 PO21151 PO21151 PO21152 PO21245 PO21245 PO21245 PO21245
 PO21245 PO21245 PO21573 27/01/12 03/04/12 04/04/12 15/03/12 16/03/12 26/04/12 30/04/12 07/02/12 08/02/12 02/02/12 10/02/12 11/02/12 12/02/12 19/03/12 20/03/12 21/03/12 22/03/12 23/03/12 23/04/12 24/04/12 25/04/12 26/04/12 27/04/12 26/03/12 27/03/12 28/03/12 19/03/12 20/03/12 21/03/12 22/03/12 23/03/12 16/04/12 17/04/12 18/04/12 19/04/12 20/04/12 17/03/12 16/03/12 15/03/12 14/03/12 13/03/12 12/03/12 03/03/12 18/03/12 19/03/12 20/03/12 21/03/12 22/03/12 23/03/12 27/01/ 30/08/12 30/08/12 30/08/12 30/08/12 30/08/12 30/08/12 30/08/12 30/08/12 30/08/12 30/08/12 30/08/12 30/08/12 30/08/12 30/08/12 30/08/12 30/08/12 30/08/12 30/08/12 30/08/12 30/08/12 30/08/12 30/08/12 30/08/12 30/08/12 30/08/12 30/08/12 30/08/12 30/08/12 30/08/12 30/08/12 30/08/12 30/08/12 30/08/12 30/08/12 30/08/12 30/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 20/08/12 22/08/12 22/08/12 22/08/12 22/08/12 22/08/12 22/08/12 29/08/ Report of Statutory
19517 19517 19517 19517 19663 Report of Statutory Authorities – June OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI Purchase Order Number Date Invoice Date Number Date Cheque Number Amount ($)
 23/08/12 23/08/12 23/08/12 23/08/12 23/08/12 23/08/12 23/08/12 01/08/12 01/08/12 01/08/12 01/08/12 01/08/12 23/08/12 09/08/12 09/08/12 09/08/12 09/08/12 23/08/12 23/08/12 23/08/12 23/08/12 23/08/12 23/08/12 23/08/12 23/08/12 23/08/12 23/08/12 23/08/12 23/08/12 23/08/12 23/08/12 23/08/12 23/08/12 23/08/12 23/08/12 16/08/12 16/08/12 16/08/12 16/08/12 16/08/12 16/08/12 16/08/12 16/08/12 16/08/12 16/08/12 16/08/12 16/08/12 16/08/12 16/08/12 16/08/12 16/08/12 16/08/12 PO21573 PO21573 PO21573 PO21575 PO21575 PO21575 PO21575 PO20971 PO20971 PO20971 PO20971 PO20971 PO21574 PO21174 PO21174 PO21174 PO21174 PO21578 PO21578 PO21578 PO21578 PO21578 PO21578 PO21578 PO21578 PO21572 PO21572 PO21572 PO21572 PO21572 PO21572 PO21572 PO21572 PO21572 PO21572 PO21921 PO21921 PO21921 PO21921 PO21921 PO21921 PO21921 PO21921 PO21293 PO21293 PO21293 PO21293 PO21293 PO21293 PO21293 PO21296 PO21296 04/02/12 14/02/12 15/02/12 07/05/12 08/05/12 11/05/12 12/05/12 01/06/12 31/05/12 30/05/12 29/05/12 28/05/12 07/04/12 03/04/12 04/04/12 05/04/12 06/04/12 14/04/12 13/04/12 12/04/12 10/04/12 07/04/12 06/04/12 06/04/12 05/04/12 03/06/01 01/05/00 14/04/00 04/01/01 03/06/01 13/06/01 15/11/00 03/02/01 15/03/01 07/08/00 15/04/12 14/04/12 12/04/12 11/04/12 10/04/12 09/04/12 08/04/12 07/04/12 16/04/12 17/04/12 18/04/12 19/04/12 20/04/12 21/04/12 22/04/12 28/04/12 27/04/12 45361 45626 45629 47017 47016 47015 47014 47509 47510 47511 47512 47513 4634 46441 46442 46443 46444 46381 46380 46379 46378 46372
29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12
 29/08/ Report of Statutory Authorities – June OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI Purchase Order Number Date Invoice Date Number Date Cheque Number Amount ($) 16/08/12 16/08/12 16/08/12 16/08/12 16/08/12 16/08/12 16/08/12 16/08/12 16/08/12 16/08/12 16/08/12 16/08/12 16/08/12 16/08/12 16/08/12 16/08/12 16/08/12 16/08/12 21/08/12 21/08/12 21/08/12 21/08/12 21/08/12 21/08/12 21/08/12 21/08/12 21/08/12 21/08/12 21/08/12 21/08/12 Contractor 6 26/07/12 26/07/12 26/07/12 26/07/12 26/07/12 26/07/12 26/07/12 26/07/12 26/07/12 26/07/12 26/07/12 26/07/12 26/07/12 26/07/12 Contractor 7 24/05/12 24/05/12 24/05/12 24/05/12 PO21296 PO21296 PO21296 PO21296 PO21297 PO21297
 PO21297 PO21297 PO21297 PO21297 PO21297 PO21299 PO21299 PO21299 PO21300 PO21300 PO21300 PO21300 PO21465 PO21465 PO21465 PO21466 PO21466 PO21466 PO21466 PO21466 PO21466 PO21467 PO21467 PO21467 PO20775 PO20775 PO20775 PO20775 PO20775 PO20775 PO20774 PO20774 PO20774 PO20781 PO20781 PO20775 PO20775 PO20775 POP19325 POP19324 POP19344 POP19346 26/04/12 25/04/12 24/04/12 23/04/12 29/04/12 28/04/12 27/04/12 26/04/12 25/04/12 24/04/12 23/04/12 25/03/12 23/03/12 22/03/12 14/04/12 13/04/12 12/04/12 11/04/12 24/04/12
 26/04/12 30/04/12 16/04/12 18/04/12 19/04/12 20/04/12 21/04/12 22/04/12 21/03/12 20/03/12 19/03/12 31/01/12 31/01/12 11/02/12 11/02/12 11/02/12 11/02/12 31/01/12 31/01/12 31/01/12 31/01/12 31/01/12 31/01/12 31/01/12 11/02/12 20/02/12 20/02/12 25/02/12 25/02/ 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 29/08/12 01/08/12 01/08/12 01/08/12 01/08/12 01/08/12 01/08/12 01/08/12 01/08/12 01/08/12 01/08/12 01/08/12 01/08/12 01/08/12 01/08/12 18/06/12 18/06/12 18/06/12 18/06/ Report of Statutory Authorities – June 2013 183.75 350.00 332.50 402.50 253.75 490.00 455.00 472.50 428.75 350.00 367.50 280.00 332.50 332.50 280.00 490.00 437.50 297.50 280.00 580.00 280.00 350.00 402.50 350.00 402.50 385.00
 332.50 332.50 280.00 420.00 1,725.00 900.00 1,125.00 1,125.00 2,175.00 900.00 ,100.00 1,265.00 1,045.00 640.00 1,520.00 1,725.00 900.00 1,125.00 2,622.00 2,622.00 664.13 708.40 33 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI Purchase Order Number Date Invoice Date Number Date Cheque Number 24/05/12 24/05/12 24/05/12 24/05/12 24/05/12 24/05/12 24/05/12 24/05/12 24/05/12 24/05/12 24/05/12 24/05/12 24/05/12 24/05/12 24/05/12 24/05/12 24/05/12 24/05/12 24/05/12 24/05/12 24/05/12 24/05/12 24/05/12 24/05/12
 Contractor 8 26/06/12 26/06/12 26/06/12 26/06/12 26/06/12 26/06/12 26/06/12 26/06/12 26/06/12 26/06/12 03/07/12 03/07/12 03/07/12 03/07/12 03/07/12 03/07/12 03/07/12 03/07/12 03/07/12 03/07/12 10/07/12 10/07/12 10/07/12 10/07/12 POP19348 POP19349 POP19374 POP19336 POP19334 POP19339 POP19380 POP19314 POP19324 POP19287 POP19289 POP19338 POP19341 POP19342 POP19337 POP19343 POP19340 POP19347 POP19350 POP19349 POP19352 POP19351 POP19355 POP19288 POP19316 POP19316 PO20150 PO20150 PO20150 PO20150 PO20150 PO20149 PO20149 PO20149 PO20149 PO20149 PO20301 PO20301 PO20301 PO20301 PO20301 PO20302 PO20302 PO20302 PO20302 PO20302 PO20478 PO20478 PO20478 PO20478 25/02/12 25/02/12 25/02/12 25/02/12 25/02/12 25/02/12 25/02/12 24/05/12 20/02/12 27/02/12 27/02/12 05/03/12 05/03/12 05/03/12 05/03/12 05/03/12 05/03/12 24/05/12 05/03/12 05/03/12 05/03/12 05/03/12 05/03/12 07/03/12 20/03/12 20/03/12 04/06/12 05/06/12 06/06/12 07/06/12 08/06/12 28/05/12 28/05/12 28/05/12 28/05/12 28/05/12 18/06/12 19/06/12 20/06/12 21/06/12 22/06/12 18/06/12 19/06/12 20/06/12 21/06/12 22/06/12 12/06/12 13/06/12 14/06/12 15/06/12 2815 2816 2817 2818 2819 2820 2832 2833 2805 2840 2841 2855 2856 2857 2858 2859 2860 2861 2862 2863 2864 2865 2870 2890 2921 2922 389A 389A 389A 389A 389A 380 380 380 380 380 442 442 442 442 442 443 443 443 443 443 435 435 435 435 18/06/12 18/06/12 18/06/12 18/06/12 18/06/12 18/06/12 18/06/12 18/06/12 18/06/12 18/06/12 18/06/12 18/06/12 18/06/12 18/06/12 18/06/12
 18/06/12 12/07/12 12/07/12 12/07/12 12/07/12 12/07/12 12/07/12 12/07/12 12/07/12 12/07/12 12/07/12 24/07/12 24/07/12 24/07/12 24/07/12 24/07/12 24/07/12 24/07/12 24/07/12 24/07/12 24/07/12 24/07/12 24/07/12 24/07/12 24/07/ 18911
18636 18911 18911 18911 18911 18911 18911 18911 18911 18911 18911 19065 19065 19065 19065 19065 19065 19065 19065 19065 19065 19078 19078 19078 19078 Report of Statutory Authorities – June 2013 Amount ($) OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI Purchase Order Number Date Invoice Date Number Date Cheque Number PO20809 PO20613 PO19864 PO19663 PO19661 PO19651 PO19659 PO21049 PO21048 PO21047 PO21237 PO21188 PO21190 PO21189 PO21187 PO21186 PO21185 26/07/12 18/07/12 13/06/12 04/06/12 04/06/12 04/06/12 04/06/12 04/08/12 04/08/12 04/08/12 13/08/12 09/08/12 09/08/12 09/08/12 09/08/12 09/08/12 09/08/12 Total 02/07/12 02/02/12 21/05/12 27/04/12 04/05/12 11/05/12 20/04/12 06/07/12 06/07/12 13/07/12 03/08/12 08/06/12 13/07/12 20/07/12 20/07/12 27/07/12 27/07/12 449 450 378 360 362 365 785 705 706 719 742 387 721 724 726 731 732 01/08/12 25/07/12 19/06/12 14/06/12 14/06/12 14/06/12 14/06/12 13/08/12 13/08/12 13/08/12 21/08/12 22/08/12 22/08/12 22/08/12 22/08/12 22/08/12 22/08/12 19239 19102 18667 18605 18605 18605 18605 19395 19395 19395 19507 19525 19525 19525 19525 19525 19525 Amount ($) 1,020.00 1,020.00 1,020.00 1,020.00 1,020.00 1,020.00 1,020.00
 1,020.00 1,020.00 816.00 1,020.00 1,020.00 1,020.00 1,020.00 1,020.00 458,986.70 Report of Statutory Authorities – June 2013 35 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI SECTION 8: TELECOMMUNICATIONS AUTHORITY OF FIJI The Telecommunications Authority of Fiji was established under the Telecommunications Promulgation 2008, which provides for the constitution of the Authority and the manner in which it may function, levy and collect licences, exercise powers and expand funds.
The principal activities of the Authority are to provide rapid expansion of reliable and as affordable as possible telecommunications services on an equitable basis, with particular improvement in rural areas; promote efficient investment and innovation in telecommunications network and services; provide fair competition among service providers and allowing market forces to operate; provide and promote appropriate consumer protection and other safeguards in relation to telecommunications services where market forces are insufficient.
Table of Content SECTION 8: TELECOMMUNICATIONS AUTHORITY OF FIJI ............................................................... 1 PART A – FINANCIAL INFORMATION ......................................................................................................... 1 8.1 8.2 8.3 AUDIT OPINION ................................................................................................................................. 1 STATEMENT OF RECEIPTS AND PAYMENTS ........................................................................................ 1 STATEMENT OF FINANCIAL POSITION ............................................................................................... 2 PART B - CONTROL ISSUES ............................................................................................................................ 2 8.4 8.5 REPORTING RECEIPTS AND PAYMENTS VAT INCLUSIVE ................................................................... 2 BASIS OF ACCOUNTING ..................................................................................................................... 3 PART A – FINANCIAL INFORMATION 8.1 Audit Opinion The audit of the financial statements of the Telecommunications Authority of Fiji for the year ended 31 December 2012 resulted in an unqualified Auditor’s Report.
8.2 Statement of Receipts and Payments Year ended 31 December Receipts Government grant Miscellaneous Total Receipts Payments Administration Expenses Operating Expenses Capital Expenses Value Added Tax Total payments Net (deficit)/surplus 2012 ($) 2011 ($) 639,115 104,891 744,006 225,139 272,183 345,806 77,936 921,064 (177,058) 1,130,961 38,525 1,169,486 343,231 353,752 157,763 102,605 957,351 212,135 Report of Statutory Authorities – June 2013 1 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI A sum of $1.5 million was budgeted as grant to the Telecommunications Authority of Fiji in 2012 of which only $639,115 was received by the Authority in 2012 resulting in the decrease in total receipts by 36%.
The net deficit recorded in 2012 was therefore primarily due to the decrease in the grant received by the Authority from Government.

8.3 Statement of Financial Position As at 31 December Assets Cash Total Assets Accumulated Funds 2012 ($) 2011 ($) 225,934 225,934 225,934 402,992 402,992 402,992 The decrease in cash at bank at year end by 44% was largely attributed by the decrease in Government grant received by the Authority in 2012.
PART B - CONTROL ISSUES 8.4 Reporting Receipts and Payments VAT Inclusive The preferred method of accounting for VAT is to state both income and expenditure items net of VAT.1 However, where the impact of VAT is not significant to the users of the financial statements, reporting on a gross basis is permissible provided that there is a footnote disclosure of the use of this method.2 Our review of the draft financial statements submitted for audit revealed that receipts and expenditures have been presented in the Statement of Receipts and Payments at VAT inclusive balances.
However, the General Ledger closing balances are reported on VAT exclusive amounts.

The audit also noted that the Authority did not disclose the use of the gross basis method in the financial statements.

Reporting using the VAT inclusive amounts distort the results of the financial performance of the Authority as presented in the financial statements.
Recommendation It is recommended that the Authority use the General Ledger as the basis for drawing up its draft financial statements and present the financial statements VAT exclusive unless the Authority can show that the impact of VAT is not significant.
1 FAS 103(9) 2 FAS 103(11) Report of Statutory Authorities – June 2013 2 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI Management Comments From 2013 the Authority will use the General ledger as the basis of drawing up its draft financial statements and present the financial statements as VAT exclusive.
8.5 Basis of Accounting An enterprise should prepare its financial statements, except for cash flow information, under the accrual basis of accounting.3 Under the accrual basis of accounting, transactions and events are recognised when they occur (and not as cash or its equivalent are received or paid) and they are recorded in the accounting records and reported in the financial statements of the periods to which they relate.4 Although highlighted in previous years’ audit reports, the Authority’s preferred accounting method is still on cash basis.
Cash basis of accounting does not take into account arrears and accruals.

Costs of all fixed assets are expensed, therefore not recognised in the Statement of Financial Position.

An amount of $345,806 was spent on fixed assets in 2012.

The Authority explained that the lack of capacity has prevented them from moving towards accrual based accounting.

The Authority has not been able to capture in its financials the value of fixed assets it owned and also receivables and payables.
Recommendation It is recommended that the Authority adopt and comply with the Fiji Accounting Standards and present its annual financial statements on accrual basis of accounting.

Management Comments No comments received from the Authority.
TAF will build its necessary capacity that will enable a review on its accounting processes and to work with the Ministry of Finance and the ministry of Communications to ensure that accrual accounting is adopted and the Authority prepares its financial statements that comply with the requirements of FAS.

The Authority, under the Boards decision will be temporarily subjected to the provisions of the Government Financial Management Act of 2004, in the absence of the Authority’s Accounting manual.
3 FAS 1(25) 4 FAS 1(26) Report of Statutory Authorities – June 2013 3 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI SECTION 9: INSTITUTIONALIZING THE MONITORING OF TELECOMMUNICATIONS REFORM PROJECT The objective of this World Bank grant is to develop the capacity of the Telecommunications Authority of Fiji, formerly the Department of Communications, under the Ministry of Public Enterprises, Communications, Civil Aviation and Tourism, and thereby to monitor and assess the performance of the telecommunications industry operators in their delivery of services to households and businesses, particularly in rural and remote areas.
Table of Content SECTION 9: INSTITUTIONALIZING THE MONITORING OF TELECOMMUNICATIONS REFORM PROJECT .............................................................................................................................................................. 1 PART A – FINANCIAL INFORMATION ......................................................................................................... 1 9.1 9.2 9.3 AUDIT OPINION ................................................................................................................................. 1 ABRIDGED STATEMENT OF RECEIPTS AND PAYMENTS ...................................................................... 1 STATEMENTS OF FINANCIAL POSITION .............................................................................................. 2 PART A – FINANCIAL INFORMATION 9.1 Audit Opinion The audit of the financial statements for Institutionalizing the Monitoring of Telecommunications Reform Project for the year ended 31 December 2012 resulted in an unqualified Auditor’s Report.
9.2 Abridged Statement of Receipts and Payments Year ended 31 December Receipts World Bank grant Miscellaneous Total Receipts Payments Consultant fees Other expenses Total Payments Net surplus/(deficit) 2012 ($) 2011 ($) 249,663 266 249,929 225,467 595 226,062 23,867 87,415 2,099 89,514 115,122 1,569 116,691 (27,177) The net surplus of $23,867 recorded in 2012 was primarily due to the increase in grant from the World Bank for the project.
Increase in regulatory fees, travel costs and per diem allowances paid to individual consultants resulted in the increase in consultant fees by $110,345 or 96%.
Report of Statutory Authorities – June 2013 1 OFFICE OF THE AUDITOR GENERAL – REPUBLIC OF FIJI 9.3 Statements of Financial Position As at 31 December Cash at bank Total current assets 2012 $ 33,113 33,113 2011 $ 9,246 9,246 Net Assets 33,113 9,246 The increase in cash at year end was largely attributed by the increase in the grant from the World Bank Grant which in turn resulted in increase in cash at bank.

Report of Statutory Authorities – June 2013 2