Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1697773842352.pdf (Fiji)
EXCELLENCE IN PUBLIC SECTOR AUDITING REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI Volume 2 Audit Report on the General Administration Sector PARLIAMENT OF FIJI PARLIAMENTARY PAPER NO.

59 OF 2017 EXCELLENCE IN PUBLIC SECTOR AUDITING REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI Volume 2 Audit Report on the General Administration Sector PARLIAMENTARY PAPER NO.
59 OF 2017 PARLIAMENT OF FIJI Foreword The 2015 accounts of Whole of Government of Republic of Fiji together with 37 Ministries and Departments were audited during 2015, with their audit reports and relevant findings on them reported in accordance with section 152 of 2013 Constitution of Republic of Fiji.

The audit of Whole of Government concludes with an unqualified audit report.
The accounts have been faithfully and properly kept in accordance with section 152(2) of the Constitution, section 6 of the Audit Act and sections 46 and 47 of the Financial Management Act 2004.

However, emphasis has been made on the need to include accounts of controlled entities with those of government ministries and departments.
In addition, variances between bank reconciliation statements and their respective general ledger accounts for Trust Fund, Trading and Manufacturing Activities, Overseas Missions bank accounts and Drawings accounts, need to be rectified.

The financial statements of the Republic of Fiji have been presented in accordance with the Financial Management Act 2004 with direct reference to the budget estimates of Government.
Presentation and certain disclosures have also been made in accordance with cash-basis International Public Sector Accounting Standards (IPSAS).
The audit reports comprise off four volumes which have been presented in accordance with the budget sectors as follows: Volume 1 Audit Report on the Accounts and Finance of Government 2 3 4 Audit Report on the General Administration Sector Audit Report on the Social Services Sector Audit Report on the Economic Services and Infrastructure Sector Volume 1 of the report should be read in conjunction with the Whole of Government financial statements, the appropriation statement of the Republic of Fiji and my opinion expressed on them for the year ended 31 December 2015.
Audit Opinion on respective Ministry/Department (Agency) Financial Statements A total of 37 Agency Financial Statements were prepared in accordance with the Financial Management Act 2004 and Finance Instructions 2010.
Of these, unqualified audit reports were issued on 20 financial statements while audit reports on 17 financial statements were qualified on the following grounds:  Variances were noted between reconciliations prepared by Ministries and Departments and FMIS Ledger maintained by Ministry of Finance;  Board of Survey was not carried out;  Financial transactions were not recorded in the FMIS Ledger;  Amounts reflected in Trust and Trading Manufacturing Accounts were not fully supported;  Funds in approved budget estimates for 2015 were used for trust account expenditures; and  Independent stock take was not done.
Page 1 of 2 Expenditure planning Ministries and Departments concentrated spending of their budgets towards the end of 2015 (December) hence indicating lack of proper financial planning during the year.

This contributed to significant unpresented cheque balance at the end of the year placing undue strain on government cash flows at the beginning of 2016.

Public debt At the end of 2015, the percentage of national debt relative to GDP was 46%, a decrease of 2% when compared to 48% 2014.
In addition, percentage growth in Government debt was less than the percentage growth in the economy indicating a slight decrease in debt burden of individuals in 2015.

The Government needs to sustain its existing resources to fund its current programs, commence new projects as well as meet existing creditor obligations in order to maintain the level of borrowings at a sustainable level.
Root Cause Analysis Root cause analysis is defined as the identification of why an issue (error, problem, missed opportunity or instance of non-compliance) occurred which is reported as audit findings in audit reports.
Analysis of audit findings reported in Volumes 1 – 4 of the 2015 Audit Reports indicate the following as key causes to the issues highlighted:  People Inability to prepare reconciliations, investigate and rectify variances o o Supervision of work of subordinates o Inability to manage capital projects o Procurement processes not followed o Payment procedures not followed o Diversion of funds o Conflict of interest not managed o Records not updated  Processes o Delay in approval of capital projects o Procedures for debt recovery not effective o Policies need to be formulated in some areas  Systems o Automated inventory management systems not used Page 2 of 2 CONTENTS Volume 1: Audit Report on the Whole of Government Financial Statements and Annual Appropriation Statement Part 1: Part 2: Volume 2: 1.
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Whole of Government Financial Statements and Annual Appropriation Statement for the Republic of Fiji for the Year Ended 31 December 2015 Report of the Whole of Government Financial Statements and Annual Appropriation Statement Office of the President Office of the Prime Minister Office of the Attorney General Ministry of Finance Ministry of i-Taukei Affairs Ministry of Immigration, National Security and Defence Ministry of Employment, Productivity and Industrial Relations Ministry of Foreign Affairs Office of the Auditor General Elections Office Judiciary Parliament Independent Commissions Office of the Director of Public Prosecutions Ministry of Justice Fiji Correction Services Ministry of Communication Department of Information Technology and Computing Services Public Service Commission Ministry of Rural and Maritime Development and National Disaster Management Republic of Fiji Military Forces Fiji Police Force Ministry of Education, Heritage and Arts Ministry of Health and Medical Services Department of Housing Ministry of Women, Children and Poverty Alleviation Ministry of Youth and Sports Higher Education Institutions Ministry of Agriculture Ministry of Fisheries and Forests Ministry of Lands and Mineral Resources Ministry of Industry, Trade and Tourism Ministry of Sugar Ministry of Public Enterprise Ministry of Local Government, Housing and Environment Ministry of Infrastructure and Transport Peacekeeping Missions VOLUME 2 1.
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Office of the President Office of the Prime Minister Office of the Attorney General Ministry of Finance Ministry of i-Taukei Affairs Ministry of Immigration, National Security and Defence Ministry of Employment, Productivity and Industrial Relations Ministry of Foreign Affairs Office of the Auditor General Elections Office Judiciary Parliament Independent Commissions Office of the Director of Public Prosecutions Ministry of Justice Fiji Correction Services Ministry of Communication Department of Information Technology and Computing Services Public Service Commission Ministry of Rural and Maritime Development and National Disaster Management Republic of Fiji Military Forces Fiji Police Force REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Section 1 Office of the President Roles and Responsibilities The President is vested with Executive Authority of the State in accordance with Chapter 4:81(2) of the 2013 Constitution of the Republic of Fiji.
As the Head of State, His Excellency the President is a unifying symbol for the entire nation and is above politics.

The President represents Fiji on State visits to other nations that strengthen’s Fiji’s diplomatic relations and enhances Fiji’s standing in the world.

The President is also the Commander in Chief of the Republic of Fiji Military Forces and is responsible for opening each annual of Parliament with an address outlining the policies and programs of the Government.
The Office of the President, in collaboration with the Office of the Prime Minister, ensures that all and any advice tendered to the President are consistent with the provisions, principles and spirit of the Constitution of the Republic of Fiji.
At the operational level, the Office of the President is responsible for providing on a daily basis a timely and high standard of professional administrative, protocol and ancillary support services to the President to enable the successful fulfillment of all of the President’s Constitutional, ceremonial and public duties.

The operating budget supports the President’s Constitutional functions, State visits, and community engagements.
It also covers the upkeep and maintenance of the Presidential properties in Suva, Deuba and Lautoka and the administration of the Fijian Honours and Awards system.
Table of Contents PART A: FINANCIAL STATEMENT ................................................................................................................................. 1 1.1 Audit Opinion ............................................................................................................................................................... 1 1.2 Statement of Receipts and Expenditure ...................................................................................................................... 2 1.3 Appropriation Statement ............................................................................................................................................. 2 PART B: AUDIT FINDINGS ............................................................................................................................................... 3 1.4 Non – Clearance of Balances of Accountable Advances ............................................................................................ 3 1.5 Incomplete Board of Survey ........................................................................................................................................ 4 1.6 Mispostings ................................................................................................................................................................. 5 1.7 Utilization of Project Funds for payment of operating costs ........................................................................................ 6 1.8 Write-offs .................................................................................................................................................................... 7 APPENDIX 1.1: APPENDIX 1.2: Details Of Accountable Advance As At 31/12/2015 ............................................................................. 8 Mispostings ........................................................................................................................................... 11 PART A: FINANCIAL STATEMENT 1.1 Audit Opinion The audit of the 2015 accounts of the Office of the President resulted in the issue of a qualified audit report.
Travel advances totalling $776,850 was not reconciled and journalized to the relevant expenditure allocations during the year.

Consequently, total expenditure is understated by $776,850 in the Statements of Receipts and Expenditure.
Office of the President Section 01: Page 1 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Without further qualification to the opinion expressed above, attention is drawn to the following: The board of survey report for the second half of the financial year was not completed by the Office of the President which may possibly impact the accuracy and completeness of the Statement of Losses submitted for the year ended 31 December 2015.
1.2 Statement of Receipts and Expenditure The Office of the President incurred a total expenditure of $3,827,803 in 2015.

Refer Table 1.1 for details.
Table 1.1: Statement of Receipts and Expenditures for 2015 Description EXPENDITURES Operating Established Staff Unestablished Staff Travel & Communications Maintenance & Operations Purchase of Goods & Services Total Operating Expenditure Capital Capital Construction Capital Purchase Capital Grants and Transfers Total Capital Expenditure Value Added Tax TOTAL EXPENDITURES 2015 ($) 2014 ($) 653,316 194,920 370,396 519,975 172,270 1,910,877 1,381,386 157,999 --- 1,539,385 377,541 3,827,803 538,677 200,508 725,218 256,071 144,581 1,865,055 436,622 --- --- 436,622 262,420 2,564,097 Total expenditure increased by $1,263,706 or 49.28% in 2015 compared to 2014 due to increase in Established Staff costs as a result of recruitment to fill vacant established posts in 2015.
Additionally, Maintenance and Operations costs increased due to increase in fuel expenses due to inclusion of three new vehicles in the fleet in 2015.

Furthermore, capital construction costs increased due to commencement of three projects namely, Coronation Ground Drainage Phase 2, Upgrade of Government House Roofing and Disability Access at the State House.
Similarly, Capital Purchases expenditure increased due to procurement of a new tractor and a trailer, protective clothing for landscape officers, purchase of ride on mowers brush cutters, chainsaws and other tools vital for the upkeep of the State House ground and office.

1.3 Appropriation Statement The Office of the President incurred expenditure totalling $3,827,803 in 2015 against the budget of $4,202,825 resulting in a savings of $375,022 or 8.92%.
Details of expenditures against the budget estimates are provided in Table 1.2.
Table 1.2: Appropriation Statement for 2015 SEG Item 1 2 Established Staff Unestablished Staff Office of the President Budget Estimate ($) 649,621 230,604 Changes ($) 3,695 (35,684) Revised Estimate ($) 653,316 194,920 Actual Expenditure ($) 653,316 194,920 Lapsed Appropriation ($) - - Section 01: Page 2 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ SEG Item 3 4 5 8 Travel & Communication Maintenance & Operations Purchase of Goods & Services Total Operating Expenditure Capital Expenditure Capital Construction Capital Purchases Total Capital Expenditures Budget Estimate ($) 311,900 483,400 157,400 1,832,925 Changes ($) 58,497 36,581 14,874 77,963 Revised Estimate ($) 370,397 519,981 172,274 1,910,888 Actual Expenditure ($) 370,396 519,975 172,270 1,910,877 Lapsed Appropriation ($) 1 6 4 11 1,778,500 158,000 1,936,500 (77,963) - (77,963) 1,700,537 158,000 1,858,537 1,381,386 157,999 1,539,385 319,151 1 319,152 13 Value Added Tax 433,400 TOTAL EXPENDITURE 4,202,825 --- --- 433,400 377,541 55,859 4,202,825 3,827,803 375,022 PART B: AUDIT FINDINGS 1.4 Non – Clearance of Balances of Accountable Advances Loans or advances may be provided to staff to assist in carrying out their official duties or as part of their approved remuneration.
The repayment of these advances must be actively pursued to reduce the risk of losses from irrecoverable debts.1 A travelling officer shall recoup the travel advance within seven days of completing travel by submission of an acquittal report with supporting documents.
If an advance has not been fully expended, the travelling officer must repay the balance within seven days of completing travel.2 Upon clearance of the advance, the Accounts Officer shall update the register, offset the advance account and debit the appropriate expenditure account.3 As at 31/12/15, the Office Accountable Advance had a balance of $776,850.

Refer to Table 1.3 for the balances over the last five years.
Table 1.3: Advance Account Balance over the 5 Year Period Year 2011 2012 2013 2014 2015 Amount ($) 288,115 288,241 (306,252) 746,326 776,850 The audit noted that advances mainly related to travel of $776,850 incurred by the Office was not reconciled and journalized to the expenditure allocations during the year.

As such, expenditure is understated in the Statement of Receipts and Expenditure.

Refer Appendix 1.1 for details.


The above shows that the Office failed to maintain, record, reconcile and journalize advances to the relevant expenditure allocations.
1 Office of the President, Finance Manual 2015 – Part 10, Introductory Paragraph 2 Office of the President, Finance Manual 2015 – Section 10.1.11 and 10.1.12 3 Office of the President, Finance Manual 2015 – Section 10.1.16 Office of the President Section 01: Page 3 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Hence, expenditure in the Statement of Receipts and Expenditure are understated.
Recommendation The Senior Assistant Secretary should ensure that the advance account balance is reconciled and immediate recovery instigated against officers who failed to retire advances.

Management Comments The Office acknowledges the findings and recommendations with appreciation.

Retiring the Accountable Advances involves clearing the outstanding amount from the RFA allocation and debiting these to an Expense Allocation.
These could not be completed in 2014 and 2015 because of the lack of knowledge, which was caused by a series of factors including the non-existence for over 16 years of a dedicated accounts position, the absence of an accounting section, and the consequential lack of capacity building.
However, these have all been addressed through an organizational reform the Office completed in 2014 which resulted in the creation of a fully-fledged accounting section with three dedicated positions, and the recruitment of a qualified and experienced accountant to manage the section.

The Office is most pleased to report that the RFA has been cleared as of 2016 as evidenced by the GL671 Report below.
The remaining balance of $3.25 is the unutilized RFA refund to the Government’s Consolidated Fund Account at HFC.

The Office is working with the Ministry of Economy to clear this balance.

1.5 Incomplete Board of Survey Annual board of survey must be conducted by three officers who are independent of the officer responsible for the custody of the assets.
A written record must be kept of each board of survey and must be signed and dated by the officers undertaking it.4 An annual losses statement shall be prepared by the Clerical Officer for inclusion in the agency’s annual financial statement as and when required.
The losses statement shall provide information on losses written-off during the financial year and the status of recoveries of losses.5 The audit noted that the Office failed to submit the Board of Survey report for second half of the financial year for audit verification as the survey is not complete.

The President’s Office advised that items written off during the second half of the year will be included in the 2016 annual board of survey report.
Without a Board of Survey report for the second half of the year, the completeness to assertions in the Statement of Losses (Other than money) cannot be substantiated.

Recommendation The Office should ensure that a Board of Survey is carried out annually in accordance with Section 49 of the Finance Instruction 2010.
4 Finance Instruction 2010 – Section 49(2) 5 Office of the President, Finance Manual 2015 – Section 14.1.7 and 14.1.8 Office of the President Section 01: Page 4 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Management Comments The Office acknowledges the findings and recommendations with appreciation.

The Office wishes to confirm that it has been conducting its Board of Survey annually since 2013, consistent with Section 49 of the Finance Instructions.
However, it has strategically chosen to conduct the BOS in the first half of the year to coincide with the annual budget submission timelines.

This essentially means that if any item in the BOS Report was written off, the Office could ensure that it included the request for replacement in the budget submission for the ensuing year.

The 2015 BOS Report conducted on 24 June 2015 did not recommend any write-off.
The Office notes the recommendation by the Auditor-General and will continue to consider practical approaches to ensuring that the BOS exercise is meaningful in that it captures all the items on an annual basis in-line with the regulations and it also allows for the timely replacement of written-off items.

1.6 Mispostings Journal vouchers shall be used to correct accounting errors and make other required transfers between accounts6.
Audit review of the FMIS ledger revealed various mispostings for the Office totalling $138,502.68.

Refer to Appendix 1.2 for details of mispostings.

The audit findings reflect that postings to the FMIS ledger were not promptly reviewed to ensure all transactions are posted to its correct allocations.

This could result in under or overstatement of the respective expenditure allocations.

Recommendation The Office should ensure that all transactions are posted to the correct allocations in the FMIS ledger.
If there is unavailability of funds in allocations, the Office should ensure that funds are vired from savings in other allocations.

Management Comments The Office acknowledges the findings and recommendations with appreciation.

The mis-postings for 2015 were caused by the significant readjustments to the Office’s monthly cash flow to meet the President’s increasing engagements.

Most of these engagements were not predicted when the Office set its cash flow plan early in the year.
This meant that the Office had to vire funds from within its various allocations.

As a way forward, the Office will work on improving its planning processes and its cash flow management.

In the event that funds need to be vired internally to meet unexpected expenses involving the President’s official engagements, the Office will ensure that the relevant allocations are balanced by the end of the Financial Year.
From a broader management perspective, the Office wishes to highlight the fact that it had just established a fully-fledged Accounts Section in September 2014.

It has also just recruited a qualified and experienced Accountant in addition to two Accounts Clerks.

It has started to train the two clerks on the specific requirements of their responsibilities.
The mis-postings would be progressively eliminated through continuous training of staff and closer monitoring of accounting practices in accordance with the Financial Management Act, Finance Instructions and the Office’s Finance Manual.
6 Finance Manual 2015 – Section 16.1.1 Office of the President Section 01: Page 5 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ 1.7 Utilization of Project Funds for payment of operating costs The Senior Assistant Secretary, Principal Assistant Secretary or Official Secretary must not certify a payment as correct unless they are satisfied that: it is in accordance with an LPO, indent, contract, invoice, statement or other authorisation; i. ii.
there is documentation that the goods, services or works have been received; iii.

sufficient uncommitted funds are available for payment of the account; iv.

the account is not fraudulent and has not been previously paid; v. the expenditure account it is charged to is correct.7 It was noted that the Office utilised project funds allocated for the Maintenance and Upgrading of Vakatunuloa in the 2015 budget without actual implementation of the project.
Whilst a sum of $77,963 was vired to SEG 4 – Maintenance and Operations from the amount $280,000 budgeted for the project, a sum of $88,272 was utilised on payments that were not related to the project.

Refer to Table 1.4 below for details.

Table 1.4: Payments made from Capital Construction Project Date 22/12/15 Cheque EFT No.
339 16/12/15 309 18/12/15 324 11/12/15 296 Particulars Payment of account being official mobile phone and flash net charges for customer #: 901-002-551 for the month of October 2015 Payment of account being cleaning of carpets at the State House Payment of account being purchase of materials for the plumbing works at the State House Payment of account being purchase of a laptop and hard drive for the EA to HE Amount ($) Approved by 22,824.72 Senior Assistant Secretary 2,652.17 Senior Assistant Secretary 4,216.53 Official Secretary 2,621.74 Senior Assistant Secretary 29/12/15 360 Payment for overtime hours and overdue leavefor 2015 4,000.00 Official Secretary Failure of the Office to utilise funds for their intended purpose implies clear breach of Financial Regulations.
Recommendation The Office should ensure that the funds are utilised for their intended purposes as set out in the budget and to avoid unnecessary over expenditures.

Management Comments The Office acknowledges the findings and recommendations with appreciation.

The mis-postings for 2015 were caused by the significant readjustments to the Office’s monthly cash flow to meet the President’s increasing engagements.
Most of these engagements were not predicted when the Office set its cash flow plan early in the year.

This meant that the Office had to vire funds from within its various allocations.

As a way forward, the Office will work on improving its planning processes and its cash flow management.
In the event that funds need to be vired internally to meet unexpected expenses involving the President’s official engagements, the Office will ensure that the relevant allocations are balanced by the end of the Financial Year.

From a broader management perspective, the Office wishes to highlight the fact that it had just established a fully-fledged Accounts Section in September 2014.

It has also just recruited a qualified and experienced Accountant in addition to two Accounts Clerks.
It has started to train the two clerks on the specific requirements 7 Office of the President – Finance Manual 2015, Section 2.8.4 Office of the President Section 01: Page 6 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ of their responsibilities.
The mis-postings would be progressively eliminated through continuous training of staff and closer monitoring of accounting practices in accordance with the Financial Management Act, Finance Instructions and the Office’s Finance Manual.
1.8 Write-offs Subject to this or any other Act, the Minister of Finance may write off losses in respect of public money, state assets and agency assets.8 Audit noted that in 2016, the Ministry of Finance approved adjustments to the Office’s general ledger balances for the year ended 31/12/15.

Refer to Table 1.5 for details.
Table 1.5: Write-off approved by Ministry of Finance Asset Allocation Description Accounts Receivable Total 1-01101-01101-560601 1-01101-01101-560611 1-01101-01101-560612 1-01101-01101-560613 1-01101-01101-560614 1-01101-01999-560611 1-01101-01999-560612 320 WESRAM FINANCE PD EMPLOYEES FNPF PD TAX ARREARS PD CMLA PD PUBLIC EMPLOYEES UNION PD EMPLOYEES FNPF PD TAX ARREARS Amount ($) 648.62 18,706.12 1,141.52 382.04 37.50 16,830.09 21.57 37,767.46 The write-offs were made to clear the debit balances in Operating Trust Accounts which were a result of overpayments of mispostings.
Write off of accounts receivables or assets constitute loss of public funds.

Recommendation The Department should ensure that valid transactions are posted into the general ledger and proper reconciliations are carried out on a timely manner.

Management Comments The Office acknowledges the findings with appreciation.

The $37,767.46 debits in those payables (Trust) accounts are NOT overpayments or losses.

The balance originated from error in posting (misposting).
The misposting arose from the nature of the accounts.

Previous years in the FMIS, those Trust accounts were NOT funded, thus excess debiting was frequent.

The Office acknowledges the error of mispostings where payments were debited to the wrong accounts.

For instance, on Pay 20/2013 wages deductions of $100 on PAYE was credited to 1-01101-01101-861901 for payment, and the $100 was debited to 1-01101-01999-861901 instead of the accounts the $100 was credited to.
The Office will consult the Ministry of Economy on the way forward on the misposted amount.

It is imperative to also note that some changes have been implemented with the payables account in the FMIS in 2016.

The account is now funded, therefore it can only accept the Debit entry of the amount initially Credited.
8 Financial Management Act 2004 – section 34(1)(a) Office of the President Section 01: Page 7 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ APPENDIX 1.1: Details of Accountable Advance as at 31/12/2015 Date Add Debit 1 2 Jv Balance Remarks Chq no.
31/12/13 146,818.31 74275 28/02/14 40,000.00 74525 28/02/14 10,000.00 74722 28/02/14 20,000.00 74953 31/03/14 6,137.82 74954 31/03/14 6,137.82 74955 31/03/14 6,751.60 75113 31/03/14 3,837.56 75114 31/03/14 3,837.56 75115 31/03/14 3,837.56 75115 31/03/14 30,000.00 75645 30/04/14 171.00 75615 30/04/14 20,000.00 75616 30/04/14 6,007.83 75619 30/04/14 5,461.67 75620 30/04/14 5,461.67 75621 30/04/14 5,461.67 75618 30/04/14 378.00 75622 30/04/14 5,461.67 75623 30/04/14 5,461.67 75774 30/04/14 75855 30/04/14 75913 30/04/14 324.00 216.00 234.00 75459 30/04/14 1,677.00 76214 31/05/14 76405 31/05/14 36.00 90.00 76593 31/05/14 189.00 146,818.31 NO ADVANCE RETIRE 40,000.00 NO ADVANCE RETIRE 10,000.00 NO ADVANCE RETIRE 20,000.00 NO ADVANCE RETIRE 6,137.82 NO ADVANCE RETIRE 6,137.82 NO ADVANCE RETIRE 6,751.60 NO ADVANCE RETIRE 3,837.56 NO ADVANCE RETIRE 3,837.56 NO ADVANCE RETIRE 3,837.56 NO ADVANCE RETIRE 30,000.00 NO ADVANCE RETIRE 171.00 NO ADVANCE RETIRE 20,000.00 NO ADVANCE RETIRE 6,007.83 NO ADVANCE RETIRE 5,461.67 NO ADVANCE RETIRE 5,461.67 NO ADVANCE RETIRE 5,461.67 NO ADVANCE RETIRE 378.00 NO ADVANCE RETIRE 5,461.67 NO ADVANCE RETIRE 5,461.67 NO ADVANCE RETIRE 324.00 NO ADVANCE RETIRE 216.00 NO ADVANCE RETIRE 234.00 NO ADVANCE RETIRE 1,677.00 NO ADVANCE RETIRE 36.00 NO ADVANCE RETIRE 90.00 NO ADVANCE RETIRE 189.00 NO ADVANCE RETIRE 76151 31/05/14 10,000.00 1,023.99 8,976.01 R#68825 UNUTILIZED ADV 76148 31/05/14 5,256.63 76150 31/05/14 5,256.63 76149 31/05/14 5,256.63 76203 31/05/14 15,249.24 76204 31/05/14 15,249.24 76205 31/05/14 15,249.24 76206 31/05/14 15,249.24 76207 31/05/14 16,774.16 76208 31/05/14 15,249.24 5,256.63 NO ADVANCE RETIRE 5,256.63 NO ADVANCE RETIRE 5,256.63 NO ADVANCE RETIRE 15,249.24 NO ADVANCE RETIRE 15,249.24 NO ADVANCE RETIRE 15,249.24 NO ADVANCE RETIRE 15,249.24 NO ADVANCE RETIRE 16,774.16 NO ADVANCE RETIRE 15,249.24 NO ADVANCE RETIRE Office of the President Section 01: Page 8 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Date Add Debit 1 2 Jv
 Balance Remarks Chq no.
76200 31/05/14 14,623.30 76201 31/05/14 13,293.91 76202 31/05/14 30,000.00 76836 30/06/14 36.00 76948 30/06/14 1,260.00 75759 30/06/14 180.00 76701 30/06/14 4,322.91 76702 30/06/14 4,322.91 76703 30/06/14 4,322.91 76704 30/06/14 4,755.20 76705 30/06/14 4,322.91 76707 30/06/14 15,000.00 76764 30/06/14 81.00 14,623.30 NO ADVANCE RETIRE 13,293.91 NO ADVANCE RETIRE 30,000.00 NO ADVANCE RETIRE 36.00 NO ADVANCE RETIRE 1,260.00 NO ADVANCE RETIRE 180.00 NO ADVANCE RETIRE 4,322.91 NO ADVANCE RETIRE 4,322.91 NO ADVANCE RETIRE 4,322.91 NO ADVANCE RETIRE 4,755.20 NO ADVANCE RETIRE 4,322.91 NO ADVANCE RETIRE 15,000.00 NO ADVANCE RETIRE 81.00 NO ADVANCE RETIRE 77681 31/07/14 1,000.00 767.55 232.45 R#68828 UNUTILIZED ADV 77679 31/07/14 198.00 77817 31/07/14 30,000.00 77272 31/07/14 77514 31/07/14 864.00 162.00 77515 31/07/14 30,000.00 1,030.00 77516 31/07/14 13,320.31 77517 31/07/14 5,561.64 77518 31/07/14 15,945.26 77519 31/07/14 15,945.26 77520 31/07/14 17,539.77 77521 31/07/14 15,945.26 77522 31/07/14 171.00 198.00 NO ADVANCE RETIRE 30,000.00 NO ADVANCE RETIRE 864.00 NO ADVANCE RETIRE 162.00 NO ADVANCE RETIRE 28,970.00 R#68913 (JV03/03/15) 13,320.31 NO ADVANCE RETIRE 5,561.64 NO ADVANCE RETIRE 15,945.26 NO ADVANCE RETIRE 15,945.26 NO ADVANCE RETIRE 17,539.77 NO ADVANCE RETIRE 15,945.26 NO ADVANCE RETIRE 171.00 NO ADVANCE RETIRE 78195 31/08/14 1,504.00 520.20 983.80 R#68829 UNUTILIZED ADV 77907 31/08/14 1,159.56 1,159.56 NO ADVANCE RETIRE 77905 31/08/14 10,000.00 3,290.00 6,710.00 R#68824 UNUTILIZED ADV 77903 31/08/14 5,797.82 77904 31/08/14 5,797.82 77917 31/08/14 162.00 5,797.82 NO ADVANCE RETIRE 5,797.82 NO ADVANCE RETIRE 162.00 NO ADVANCE RETIRE 77940 31/08/14 10,000.00 7,534.95 2,465.05 R#68823 UNUTILIZED ADV 77941 31/08/14 2,527.14 77942 31/08/14 2,527.14 77943 31/08/14 2,527.14 77944 31/08/14 2,779.85 77945 31/08/14 2,527.14 77976 31/08/14 189.00 Office of the President 2,527.14 NO ADVANCE RETIRE 2,527.14 NO ADVANCE RETIRE 2,527.14 NO ADVANCE RETIRE 2,779.85 NO ADVANCE RETIRE 2,527.14 NO ADVANCE RETIRE 189.00 NO
 ADVANCE RETIRE Section 01: Page 9 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Date Add Debit 1 2 Jv Balance Remarks 225.00 NO ADVANCE RETIRE 144.00 NO ADVANCE RETIRE 90.00 NO ADVANCE RETIRE 126.00 NO ADVANCE RETIRE 891.00 NO ADVANCE RETIRE 324.00 NO ADVANCE RETIRE 378.00 RETIRE UNUTILIZED ADV 657.00 RETIRE UNUTILIZED ADV 252.00 NO ADVANCE RETIRE 81.00 54.00 9.00 36.00 711.00 R#68827 UNUTILIZED ADV Chq no.
78005 31/08/14 78053 31/08/14 78054 31/08/14 78138 31/08/14 78350 30/09/14 78720 30/09/14 78815 31/10/14 79013 31/10/14 79403 30/11/14 79468 30/11/14 79483 30/11/14 79513 30/11/14 79612 30/11/14 79294 30/11/14 225.00 144.00 90.00 126.00 891.00 324.00 459.00 711.00 252.00 756.00 126.00 45.00 432.00 684.00 30/11/14 9,107.90 79916 31/12/14 79689 31/12/14 79762 31/12/14 79771 31/12/14 79825 31/12/14 810.00 585.00 540.00 18.00 54.00 81080 08/03/15 100.00 54.00 72.00 126.00 NO ADVANCE RETIRE 45.00 NO ADVANCE RETIRE 432.00 NO ADVANCE RETIRE 630.00 R#68826 UNUTILIZED ADV 9,107.90 PM'S ADJUSTMENT 738.00 RETIRE UNUTILIZED ADV ACCOUNTS 585.00 NO ADVANCE RETIRE 540.00 NO ADVANCE RETIRE 18.00 NO ADVANCE RETIRE 54.00 NO ADVANCE RETIRE 100.00 R # 69194 at PM's Office on JAN JV 28/15 & R # 69194 at PM's Office on JAN 1,496.14 80935 05/03/15 21,084.04 19,587.90 81790 16/06/15 500.00 500.00 R # 69194 at PM's Office on JAN 81886 30/06/15 5,000.00 3,831.38 1,168.62 JV 37/15 & R # 69194 at PM's Office on JAN 52 55 30 24/08/15 10,000.00 26/08/15 1,500.00 03/08/15 500.00 1,775.00 8,225.00 JV 38/15 & R # 69194 at PM's Office on JAN 1,500.00 R # 69194 at PM's Office on JAN JV 38/15 & R # 69194 at PM's Office on JAN 492.00 8.00 105 18/09/15 1,000.00 915.70 84.30 JV 39/15 & R # 69194 at PM's Office on JAN 142 15/10/15 40,000.00 28,134.72 11,865.28 JV 01/16 on Jan & JV 41/15 Office of the President Section 01: Page 10 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Chq no.
341 342 343 352 Date Add Debit 1 2 Jv Balance Remarks 23/12/15 2,545.89 23/12/15 509.16 23/12/15 2,545.89 24/12/15 522.00 2,545.89 RETIRED ON JAN, 2016 509.16 RETIRED ON JAN, 2016 2,545.89 RETIRED ON JAN, 2016 522.00 RETIRED ON JAN, 2016 776,913.31 (63.00) 776,850.31 APPENDIX 1.2: Mispostings Particulars Correct Allocation Utilised Allocation Telecommunication – SEG 3 Maintenance upgrading Vakatunuloa (SEG 8) & of Amount ($) 22,824.72 Date Cheque /EFT No 22/12/15 339 24/12/15 351 16/12/15 309 18/12/15 324 22/12/15 335 11/12/15 296 23/09/15 113 net charges Payment of account being official mobile phone and flash for customer #: 901-002-551 for the month of October 2015 Payment of account being Meal Claims for all staff and HE’s security personnel Payment of account being the cleaning of carpets at State House Payment of account being purchase of materials for the plumbing works at the State House Payment of account being service and installation of the the State air con unit at House Payment of account being purchase of a laptop and hard drive for the EA to HE Payment of charter costs during HE’s school visit to Rotuma on 25/09/2015 Allowance (SEG 1) Allowance(SEG 2) Disability Access at State House (SEG 8) 7,236.00 Upkeep of Government House and Office (SEG 4) Upkeep of Government House and Office (SEG 4) Maintenance Upgrading Vakatunuloa (SEG 8) Maintenance Upgrading Vakatunuloa (SEG 8) and of and of Upkeep of Government House and Office (SEG 4) Maintenance Upgrading Vakatunuloa (SEG 8) and of 2,652.17 4,216.53 8,855.65 Equipment Minor (SEG 5) Travel (SEG 3) and of Maintenance Upgrading Vakatunuloa (SEG 8) Fuel & Oil (SEG 4) 2,621.74 5,304.63 16/10/15 2647 Payment for catering services for 400 persons for the Fiji Day Reception at State House on 09/10/2015 Ceremonial & Hospitality Expense (SEG 5) Fuel & Oil (SEG 4) 2,089.54 Office of the President Section 01: Page 11 Fuel & Oil (SEG 4) 1,334.78 Fuel & Oil (SEG 4) 1,341.91 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017
 ____________________________ Particulars Correct Allocation Utilised Allocation Fuel & Oil (SEG 4) Amount ($) 3,283.80 Date 20/10/15 Cheque /EFT No 149 20/10/15 152 28/10/15 2749 23/11/15 221 Ceremonial & Hospitality Expense (SEG 5) Ceremonial & Hospitality Expense (SEG 5) & Ceremonial Hospitality Expense (SEG 5) Payment for purchase of White and Red wine for Fiji Day reception held at State House on 09/10/2015 Being payment for purchase of floral arrangement Fiji Day reception held at State House on 09/10/2015 for purchase of Payment drinks for Fiji Day Reception held at State House on 09/10/2015 Payment for the purchase of work for stations administration office Soft Furnishing (SEG 5) Fuel & Oil, Water (SEG 4) 1,739.14 29/12/15 360 Payment for overtime hours and overdue leaves for 2015 Personal Emoluments (SEG 1) Wages (SEG 2) and Fire Sewerage Services (SEG 4) Disability Access at State House (SEG 8) Maintenance and Upgrade Vakatunuloa (SEG 8) of 1,317.38 7,000.00 4,000.00 Coronation Drainage (SEG 8) Ground 1,000.00 Water Sewage and Fire Services (SEG 4) Travel (SEG 3) Power Supply (SEG 4) 1,458.83 1,372.16 Travel (SEG 3) Power Supply (SEG 4) 2,152.17 Ceremonial & Hospitality Expense (SEG 5) Power Supply (SEG 4) 977.56 Overseas (SEG 3) Travel Upkeep of Government House Grounds (SEG 4) 1,663.77 19/11/15 2933 10/12/15 279 10/11/15 197 23/12/15 340 to and First Payment for accommodation lady provided (12/10/15) staffs (20/10/15) Payment for accommodation provided to HE’s personnel securities from 29/10/2015 – 01/11/2015 to await arrival at Nadi International Airport Payment for the purchase of 2 x 50 litres of Fiji Bitter kegs with the beer unit and hire of 2 bar men during HE’s farewell on 11/11/2015.
Payment diem allowance for HE travel to Hong Kong to accompany Fiji Airways new fleet of aircraft; Island of Rotuma.
reception per for Office of the President Section 01: Page 12 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Particulars Correct Allocation Utilised Allocation Date 23/12/15 Cheque /EFT No 344 23/12/15 345 23/12/15 346 05/11/15 187 26/11/15 249 04/12/15 262 19/01/15 80533 21/01/15 80536 03/03/15 80897 for first Payment for airfare of Mr Masima and Mr Komaitai for accompanying HE the Hong Kong trip for periods 26/12/15 – 29/12/15.
Payment for accommodation on 25/12/16 & 26/12/16 and 28/12/16 & 29/12/16 for HE, lady and security the personnel on departure and arrival of HE’s team for Hong Kong trip.
Payment for refund to HE for expenses incurred during visitation by Vanua of Kubuna at the State House on 18/12/2015 Payment of Accommodation for HE and security personnel for the period 14/10/15 – 19/10/15 Payment for hire of marquees and portable toilets for the farewell and swearing in of HE on 11/11/15 and 12/11/15 for purchase of for reception held at Payment White and Red wine farewell State House on 11/11/2015 Payment of account being purchase of one desktop computer (Dell OptiPlex) for the receptionist /Clerk Payment of purchase of one Laptop HP 15 for the Capital Project unit attending Payment of account being Tuition Fees for Mrs Rasari courses for Diploma (Professional Business Management) at USP from Feb to June 2015.
Travel (SEG 3) Upkeep of Government House Grounds (SEG 4) Amount ($) 3.670.61 Travel (SEG 3) Upkeep of Government House Grounds (SEG 4) 4,312.17 & Ceremonial Hospitality Expense (SEG 5) Upkeep of Government House Grounds (SEG 4) 1,323.13 Travel (SEG 3) Upkeep of Government House (SEG 9) 7,166.41 Ceremonial & Hospitality Expense (SEG 5) Upkeep of Government House (SEG 9) Accountable Advance (SEG 57) 1,652.17 28,817.39 & Ceremonial Hospitality Expense (SEG 5) Upkeep of Government House (SEG 9) 6,631.20 Minor Equipment SEG 5 Upkeep of Government House SEG 4 Minor Equipment SEG 5 Upkeep of Government House Training SEG 5 SEG 4 Upkeep of government House SEG 4 1,825.00 1,811.00 521.73 TOTAL 138,502.68 Office of the President Section 01: Page 13 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Section 2 Office of the Prime Minister Roles and Responsibilities The Prime Minister is the Head of Government and is responsible for leading Cabinet and guiding the Government’s legislative and reform agenda.
One of the Prime Minister’s primary responsibilities is to ensure that Government adopts a holistic approach to Fiji’s development by promoting close cooperation among his Ministers.

It is also the duty of the Prime Minister to ensure that his Ministers uphold their responsibilities to Parliament.

The Office of the Prime Minister [OPM] provides policy advice and administrative support to the Prime Minister and the Cabinet.
It coordinates and consults extensively with Government’s Ministries and Departments to provide the Prime Minister with an overview of all Government activities.

Under the Prime Minister’s guidance, the OPM’s work includes oversight of national policies and projects of particular priority for Government, such as rural and outer island development, small grant projects and the development of the mahogany industry.
The General Administration is responsible for the administration of the Prime Minister’s Executive Office, his Private Office, the Policy Division, the Development and Cooperation Facilitation Division, and the Corporate Services Division.

The Policy Division provides policy advice to the Prime Minister on important national issues.

The Development and Cooperation Facilitation Division coordinates with donor nations and also manages the Office’s development projects.
The former Strategic Framework for Change and Coordinating Office is now the Implementation Coordinating Office [ICO].

The Office ensures that Government’s core principles and priorities are translated into the activities and planning of all Ministries and Departments.

Specifically, the Office mainstreams Government’s National Strategic Development Plan and ensures that it is incorporated into strategic plans and annual corporate plans.
The Office also monitors the implementation of critical programs and projects and provides the Prime Minister with quarterly reports on each Ministry’s performance.
Table of Contents PART A: FINANCIAL STATEMENT ........................................................................................................................................ 2 2.1 Audit Opinion ............................................................................................................................................................... 2 2.2 Statement of Receipts and Expenditure ...................................................................................................................... 2 2.3 Appropriation Statement ............................................................................................................................................. 2 2.4 Trust Fund Account Statement of Receipts and Payments ........................................................................................ 3 PART B: AUDIT FINDINGS ..................................................................................................................................................... 3 2.5 Anomalies in the Payment Process ............................................................................................................................ 3 2.6 Anomalies in Capital Projects Undertaken by the RFMF - Small Grants Scheme ...................................................... 4 Trust Fund Account for 2015 - Chinese Grant ........................................................................................ 7 APPENDIX 2.1: Trust Fund Account for 2015 – Taiwan Grant ......................................................................................... 7 APPENDIX 2.2: Trust Fund Account for 2015 – Retention Fund ..................................................................................... 8 APPENDIX 2.3: APPENDIX 2.4: Trust Fund Account for 2015 – Mahogany Industry Council ................................................................ 8 APPENDIX 2.5: Examples of breaches of procurement and payment requirements .................................................... 9 APPENDIX 2.6: Anomalies in Capital Projects undertaken by the RFMF - Small Grant Scheme ............................... 11 Office of the Prime Minister Section 02: Page 1 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ PART A: FINANCIAL STATEMENT 2.1 Audit Opinion The audit of the 2015 accounts of the Office of the Prime Minister resulted in the issue of an unqualified audit report.
2.2 Statement of Receipts and Expenditure The Office of the Prime Minister recorded revenue totalling $954,654 and incurred a total expenditure of $12,553,160 in 2015.
Table 2.1: Statement of Receipts and Expenditure for 2015 Description RECEIPTS Agency Revenue TOTAL REVENUE EXPENDITURE Operating Expenditure Established Staff Government Wage Earners Travel & Communications Maintenance & Operations Purchase of Goods & Services Operating Grants & Transfers Special Expenditures Total Operating Expenditure Capital Expenditure Construction Purchase Grants & Transfers Total Capital Expenditure Value Added Tax TOTAL EXPENDITURE 2015 ($) 2014 ($) 954,654 954,654 581,814 581,814 2,939,578 439,630 979,868 733,648 387,878 663,550 154,038 6,298,190 2,940,569 436,999 1,103,198 956,095 431,645 706,294 570,837 7,145,637 - - 6,039,927 6,039,927 215,043 12,553,160 - - 4,164,688 4,164,688 278,470 11,588,795 Total revenue increased by $372,840 or 64% in 2015 compared to 2014.
This was due to the re- imbursement of funds from the Chinese Trust Fund Account to the Operating Fund Account.

Total Expenditure increased by $964,365 or 8% in 2015 due to the increase in small grant projects funded by the Office in 2015.

2.3 Appropriation Statement The Office of the Prime Minister incurred expenditure totalling $12,553,160 in 2015 against the revised budget of $14,305,045 resulting in a savings of $1,751,885.
Details of expenditure against the budget estimates are provided in Table 2.2.
Office of the Prime Minister Section 02: Page 2 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Table 2.2: Appropriation Statement for 2015 SEG Item Established Staff Government Wage Earners Travel & Communication Maintenance & Operations Purchase of Goods & Services Operating Grants & Transfers Special Expenditure Total Operating Costs Capital Expenditure Construction Purchase Capital Grants & Transfers Total Capital Expenditure Value Added Tax TOTAL EXPENDITURE Budget Estimate ($) Appropriation Changes ($) Revised Estimate ($) Actual Expenditure ($) Lapsed Appropriation ($) 3,137,050 457,275 1,147,720 658,700 417,400 714,000 208,100 6,740,245 --- --- 7,200,000 7,200,000 364,800 14,305,045 (46,000) 5,000 (100,000) 125,000 7,000 0 9,000 0 --- --- 0 0 3,091,050 462,275 1,047,720 783,700 424,400 714,000 217,100 6,740,245 --- --- 7,200,000 7,200,000 364,800 2,939,578 439,630 979,868 733,648 387,878 663,550 154,038 6,298,190 --- --- 6,039,927 6,039,927 215,043 0 14,305,045 12,553,160 151,472 22,645 67,852 50,052 36,522 50,450 63,062 442,055 --- --- 1,160,073 1,160,073 149,757 1,751,885 2.4 Trust Fund Account Statement of Receipts and Payments In 2015, amounts totalling $1,642,186 were spent from the Chinese Grant Trust Fund account to fund various projects selected by the Office of the Prime Minister.
Refer to Appendix 2.1 for details Additionally, the Office utilized $289,687 from the Taiwan Grant Trust Fund account on various projects selected by the Office.

Refer to Appendix 2.2 for details.

Furthermore, the Office of the Prime Minister utilized $205 from the Retention Fund Account for the payment of bank fees and resident withholding tax.

Refer to Appendix 2.3 for details.


Moreover, the Office of the Prime Minister utilized $365 from the Mahogany Industry Council Fund for the payment of bank fees and resident withholding tax.

Refer to Appendix 2.4 for details.
PART B: AUDIT FINDINGS 2.5 Anomalies in the Payment Process The quotation process is intended to ensure that the agencies receive value for money based on fair competition and ethical dealing.1 A minimum of three competitive quotes must be obtained for the procurement of goods, services or works valued at $1,000 and more but $50,000 and less.2 The Principal Accounts Officer or Senior Accounts Officer must not certify a payment as correct unless they are satisfied that it is in accordance with an LPO, indent, contract, invoice, statement or other authorization3 and there is documentation that the goods, services or works have been received.4 1 Fiji Procurement Regulation – Guide to procurement process for purchases below $50,000 – Section 4.0.
2 Procurement Amendment Regulations 2012, Section 29(1) 3 Office of the Prime Minister Finance Manual 2014 – Section 2.8.4 (i) 4 Office of the Prime Minister Finance Manual 2014 – Section 2.8.4 (ii) Office of the Prime Minister Section 02: Page 3 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Review of payment vouchers for the Office of the Prime Minister revealed that the Office failed to obtain competitive quotes and delivery dockets as required under the procurement regulations and its Finance Manual.
Refer to Appendix 2.5 for examples.

The finding indicates proper procurement procedures were not followed.

In the absence of competitive quotations, goods and services may not have been obtained from the most economical source whilst the absence of delivery dockets increases the risk of fraud.

Deviating from established internal control procedures for procurement and payments increases the risk of loss of public funds through uneconomical procurements and mismanagement of public funds.
Recommendations  The Office should obtain competitive quotes for procurements above $1,000 and less than $50,000 as required under the amended procurement regulations.

 The Office must ensure to verify the deliveries from the invoices to ascertain that all items that have been paid for is received.

Management Comments   Office has noted the audit recommendation The Office is currently verifying the delivery dockets and invoice before facilitating the payments.
For the payments done in 2015 the Office is following up with the vendors on the delivery docket.

Refer to Appendix2.5 for specific comments to examples of breaches to procurement and payments requirements.

2.6 Anomalies in Capital Projects Undertaken by the RFMF - Small Grants Scheme The Small Grants Scheme (SGS) is a Government development program that provides funds for ad hoc community projects which cannot be funded by other programs of Ministries and Departments.
The Scheme aims to assist both rural and peri-urban disadvantaged communities in having access to Government funded assistance.

The ultimate aim of the Scheme is to empower the beneficiaries to be self-sustainable through working in partnership with Government and ultimately taking full ownership of projects that actually originated from them.
The Small Grants Scheme has largely assisted communities in education, Integrated Village Development, Youth Development, Women’s groups and Minority groups settlement development.5 In 2015, the actual expenditure for the Prime Minister’s Small Grant Scheme was $5,839,927 which increased by $3,258,859 when compared to 2014 (2014: $2,581,068).
The Office of the Prime Minister and the Republic of Fiji Military Forces Engineers Regiment entered into Memorandum of Understanding (MOU) for construction of buildings and schools under the small grants scheme.
Provisions of the MOU provided that the Commanding Officer, Republic of Fiji Military Forces Engineers Regiment to: 5 Office of the Prime Minister official website,http://www.pmoffice.gov.fj/index.php/projects/prime-minister-s-small-grants-scheme Section 02: Page 4 Office of the Prime Minister REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________  Inspect and submit Monthly work progress report to the Permanent Secretary, Office of the Prime Minister on the 5th working day of the new month.
 Submit a final report on the substantial completion of the project within two weeks after the completion of the project.

 Submit a financial acquittal report to the Permanent Secretary, Office of the Prime Minister within 30 days of the substantial completion of the project on the funds allocated and utilised on the project by the Republic of Fiji Military Forces Engineers Regiment.
 Any unutilized funds allocated for the project shall be reimbursed to the Office of the Prime Minister by the RFMF Engineers Regiment within 30 days of the substantial completion of the project.6 As applicable in the case of construction of building and structures, necessary building plan with a bill of quantity, land/lease title/consent and other requirements as per the SGS checklist must be accompanied with the request.
The SGS checklist requires amongst other things submission of building plan to be approved by the Rural Local Authority.7 The audit noted the following anomalies in the capital projects undertaken by the RFMF that was funded under the Small Grant Scheme: Refer to Appendix 2.6 for details.
 MOU did not indicate the commencement dates of the projects;  Monthly progress reports were not submitted;  Building Plan not approved by the Rural Local Authority;  Although projects were completed financial acquittals were not submitted ;  Final report on the completion of the projects were not submitted; and  Engineering certificate on the building constructed not provided Failure of the MOU to clearly indicate the project timelines may result in prolonged delays in implementation and completion of projects whilst the absence of acquittals and progress reports indicates a lack of transparency on the utilisation of funds and impedes on the effective monitoring of project implementation.
Failure to obtain approvals for building plans questions the structural integrity of the building and compromises the safety of users.

Additionally, given huge amounts of public funds are invested by Government on these projects there is a risk of substantial loss of funds when structural damages are incurred during tropical cyclones attributed to non-conformance to acceptable building designs criteria.
Recommendations The Office should:  be more stringent and require that RFMF to submit acquittals for the usage of funds stipulated in the Memorandum of Agreement;  assist the RFMF in preparing acquittals by outlining the format and information required in the acquittals.

 Ensure that future MOU’s developed and endorsed between the RFMF and Office specifies the timelines required for the completion of the project.
6 Memorandum of Understanding between the Permanent Secretary, Office of the Prime Minister and the Commanding Officer, Republic of Fiji Military Forces Engineers Regiments on the construction of various capital projects under the Small Grants Scheme, Article 1 7 2015 Standard Operating Procedures office of the Prime Minister, Revised 17th August 2015, Section 15 Office of the Prime Minister Section 02: Page 5 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________  Consistently monitor the implementation of projects implemented by the RFMF and require that progress reports are submitted upon completion of specific phases of the project.
 Ensure that building plan approvals are obtained from the relevant authorities for construction of new buildings and engineering certificates are obtained upon completion of construction work.

Management Comments      The Office has noted the audit recommendation.

RFMF has assigned an officer in 2016 to work on the acquittals of projects.

Project officers are working closely with the RFMF team in compilation of acquittals and the requirements.
MOA will be signed between RFMF and Office of the Prime Minister instead of MOU.

Works will be paid according to phases that require invoices, progress reports and Local Authority Report.

In 2016, MOA will be signed with specific timeline instead of duration of works in days.

Duration of works in days was stipulated in the MOU because of the RFMF nature of works in the international peacekeeping ad national duties.
In 2016, all construction projects now have the approval of Local Authority and Certificate of Completion and occupation.

Refer to Appendix2.6 for specific comments to anomalies in capital projects undertaken by the RFMF under the Small Grant Scheme.
Office of the Prime Minister Section 02: Page 6 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ APPENDIX 2.1: Trust Fund Account for 2015 - Chinese Grant Account RECEIPTS Interest Refunds Total Receipts PAYMENTS Assistance to Schools Assistance to Village Settlements Assistance to Other Integrated Projects Netball Fiji Sponsorship Withholding Tax Cheque Book Fees Transfer to Retention Fund Account Withdrawal Transfer – Bank Fees Total Payments Net Deficit Adjustment of Foreign Cheque Balance as at 1 January 2015 ($) 2014 ($) 1,370 8,210 9,580 3,773 11,270 15,043 119,260 9,877 494,862 80,000 274 - 937,873 40 1,642,186 1,559,216 495,124 875,257 - 755 16 - - 2,930,368 (1,632,606) 8,400 1,976,068 (2,915,325) - 4,891,393 Closing Balance as at 31 December 351,862 1,976,068 APPENDIX 2.2: Trust Fund Account for 2015 – Taiwan Grant Account RECEIPTS Interest Received Other receipts Taiwan Cash Grant Total Receipts PAYMENTS Assistance to Community Projects Assistance to Schools Transfer to Retention Fund Account Total Payments Net Deficit Balance as at 1 January 2015 ($) 2014 ($) 119 - 211,893 212,012 113,900 170,787 5,000 289,687 (77,675) 85,928 91 5,000 - 5,091 - 16,746 - 16,746 (11,655) 97,583 Closing Balance as at 31 December 8,253 85,928 Office of the Prime Minister Section 02: Page 7 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ APPENDIX 2.3: Trust Fund Account for 2015 – Retention Fund Account 2015 ($) RECEIPTS Interest Retention for Nawaka River Dredging Retention for Ba River Dredging Retention for Nadi River Dredging Development Fund for Grassroot People Retention for Rabulu Sanatan Primary School Contribution Keyasi Hospital Total Receipts PAYMENTS Bank fee Resident Withholding Tax Total Payments Net Surplus Opening Balance as at 1 January 925 175,971 330,431 431,471 5,000 4,830 5,000 953,628 20 185 205 953,423 - Closing Balance as at 31 December 2015 953,423 APPENDIX 2.4: Trust Fund Account for 2015 – Mahogany
 Industry Council Account RECEIPTS Interest Transfer from Ministry of Finance License Fees Total Receipts PAYMENTS Bank chargers Withholding Tax Total Payments Net Surplus Opening Balance as at 17/07/15 Closing Balance as at 31 December 2015 For the period from 17/07/15 to 31/12/15 ($) 1,628 321,451 583,490 906,569 39 326 365 906,204 - 906,204 Office of the Prime Minister Section 02: Page 8 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ APPENDIX 2.5: Examples of breaches of procurement and payment requirements Date 16/10/15 Cheque No.
002614B Particulars Amount ($) Anomalies Management Comments Supply renovation materials Luke School of to Ratu Primary 21,246.36  Delivery not dockets for produced audit purposes as items have not been delivered.

 Project will start next week.

The RFMF engineers have just completed renovation to Ratu Luke Secondary School.
Furthermore, the engineers were redeployed to cyclone affected areas that also caused the delay in the implementation of this project  Delivery docket will be supplied once the materials are delivered.

 Project will start next week.

Delivery docket will be issued after the delivery of hardware materials  Buildex Marketing was recommended by RFMFER in their cost summary to supply the camp set up.

 Project is on-going at 22%.

Started on 6th June 2016.


 Delay in implementation was due to the delay in the approval of RFMF Engineers plan on the 1 X 4 classroom block by Labasa Town Council.

This matter has been sorted out.

 Delivery docket will be forwarded to accounts section once it is received.
002614C Supply of camp set up materials to Ratu Luke Primary School 16/10/15 30/12/15 3455 Payment for camp set up materials for Holy Family Primary School 3,248.00  Delivery not dockets produced for audit purposes as items have not been delivered.

4,923.78  Quotation from obtained from a supplier however procurement made another supplier  Delivery not dockets produced for audit purposes as items have not been delivered.
30/12/15 3450 Payment Renovation materials Family School for for Holy Primary 8,330.73  Delivery not dockets produced for audit purposes as items have not been delivered.

 Project is on-going.

Started on 6th June 2016.

 Delay was due to the non-approval of RFMF plan from the Labasa Town Council.

This matter has been sorted out and the engineers are committed to completing this project.

 Delivery dockets will be submitted by RFMF once all materials are supplied and delivered.
30/12/15 3475 Payment for Building Materials for Holy Family Primary School 24,310.08  Delivery dockets produced not for  Project is on-going.

Started on 6th June 2016.

 Delay was due to the non-approval of Office of the Prime Minister Section 02: Page 9 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Date Cheque No.

Particulars Amount ($) Anomalies Management Comments audit purposes as items have not been delivered.
RFMF plan from the Labasa Town Council.

This matter has been sorted out and the engineers are committed to completing this project.

22/10/15 2696 Building materials for Batirilagi primary School 12,997.82  Delivery not dockets produced for audit purposes as items have been not delivered.

 Delivery dockets will be submitted by RFMF once all materials are supplied and delivered.

 Project is on-going, 75% completion rate.


 Delay was due to manpower shortage and redeployment of engineers to TC Winston affected areas.

 RFMF engineers is committed to get this project completed  Delivery dockets will be forwarded by RFMF Engineers once materials are supplied.

9/11/15 2833 Supply of classroom materials to Batirilagi Primary School.

2,312.15  Delivery not dockets produced for audit purposes  Project is on-going at 75% completion rate.
Delay was due to shortage in manpower and re-deployment of officers to TC Winston affected areas.

 Delivery dockets will be supplied by RFMF once materials are supplied and delivered.

30/12/15 3456E Supply of assorted hardware items to Naivicula Dist School.

25,193.18  Delivery not dockets produced for audit purposes  Carpenters Hardware has provided delivery docket for $677.61 as Annex 5.
 Mr. Iqbal of Carpenters Hardware has 30/12/15 3466A 30/12/15 3451C camp Supply of setup and assorted contracted hardware materials to Naivicula District School.

Supply of building to Holy materials Primary Family School.

confirmed that those materials have not been delivered awaiting confirmation from the RFMFER on the site.
789.30  Delivery dockets not produced for audit purposes  RFMF will advise upon discussion with Vinod Patel on the delivery dockets amounting to $789.30 31,781.94  Delivery not dockets for produced audit purposes  Delivery dockets worth $21,833.20 have been received.

 Commanding Officer RFMF Engineers has assured us that this project is in progress, they will advise once they complete the work.

 RFMF will revert on the balance since the project is still on-going.
Office of the Prime Minister Section 02: Page 10 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ APPENDIX 2.6: Anomalies in Capital Projects undertaken by the RFMF - Small Grant Scheme Remarks Management Comments Actual Expenditure as at 31/12/15 ($) Project Name, Location Assistance Family Holy Primary School – Macuata, Vanua Levu Construction of 1 X 4 Classroom Block & Renovation to school buildings for Holy Family Primary School on 118,707.61  MOU did not indicate the commencement dates of the projects although MOU was the endorsed 07/08/15 with project duration of 90 days;  Project cost as per is $145,675.76 MOU and as at 31/12/15 a total of 81.5% of the project costs had been incurred.
Site visit in April 2016 noted that the project was on hold;  Monthly reports were submitted; and progress not  Building Plan not approved by the Rural Local Authority.
Voivoi Kindergarten – Legalega, Nadi Completion of the partly constructed Voivoi Kindergarten Building 56,560.75 were  Monthly progress not reports submitted to the Office; is completed financial  Project report on however no acquittals submitted; the Final completion the project not submitted; and of   Engineering certificate building on the constructed not provided  MOU did not indicate the commencement dates of the projects; MOU was endorsed on the 27/07/15 with project duration of 120 Ba Methodist High School - Ba Renovation works to female barracks and mess hall at Ba Methodist High School 50,519.16 Office of the Prime Minister  MOU & Implementation came into effect after signing on 07/08/15  The delay in implementation was due to the RFMFER Plan being put on hold by Labasa Town Council.
This has been sorted out.

 Meeting was held on 19/07/16 with CO RFMFER whereby advice was given by CO RFMFER that his team will look into this to verify these costs since this project has just started on 06/06/16.

 CO RFMFER has taken note of this matter during our meeting on 19/07/16 and assured us that this is an area that they need to improve on from now onwards.

 RFMFER has stated that they are using AQEP (Access to Quality Education Program) Plan.
 Meeting was held on 19/07/16 with CO RFMFER who has advised that his team is currently working on the financial acquittal and project final report for submission to OPM.

 School management has been requested to furnish this as RFMFER was engaged mid-way for completion works only  Project completed and commissioned by the Hon.
Prime Minister in February 2016  Project is ongoing as further defects were noted in the ceiling during renovation therefore the RFMFER was compelled to deviate from the initial scope of work.

 Project continued in 2016 but troops Section 02: Page 11 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Project Name, Location Assistance Actual Expenditure as at 31/12/15 ($) Remarks Management Comments were deployed on post TC Winston assessment exercise.
Project has now recommenced.

 Meeting was held on 19/07/16 with CO RFMFER, who has advised that his team will submit a progress report to OPM.

 The RFMF is working on the scope of work drawn during the initial assessment of the renovation tasking, therefore there is no building plan since it concerns renovation works only.

 Work did not commence after MOU was signed due to the deployment of troops back to the camp.

 Project is in progress, yet to be completed.


 Meeting was held on 19/07/16 with CO RFMFER, who has advised that his team will submit a progress report to OPM.

 RFMFER has stated that they are using AQEP (Access to Quality Education Program) Plan.

day;  Project cost as per MOU is $101,205.71 and as at 31/12/15 a total of 50% of the project costs was paid out.
However the project is still ongoing;  Monthly reports were submitted; and progress not  Building Plan not approved by the Rural Local Authority.
156,812.00 Naivicula District School - Tailevu Renovation of school building and 1X2 construction teachers bedroom quarters at Naivicula District School  MOU did not indicate the commencement dates of the projects; however MOU was the endorsed 27/07/15 with project duration of 105 days; on  Project cost as per is $157,467.90 MOU and as at 31/12/15 a total of 99.58% of the project costs had been paid out however as at 31/01/16 the project is still ongoing;  Monthly reports were submitted; and progress not  Building Plan not approved by the Rural Local Authority.
Batirilagi Primary School – Macuata, VanuaLevu Construction of 1X2 teachers quarters and 1X4 classroom block for Batirilagi Primary School 247,804.57  MOU did not indicate commencement the dates of the projects; MOU was endorsed on the 03/07/15 with project duration of 144 days;  Project cost as per MOU is $257,818.84;  As at 31/12/15 a total the of 96.12% of  Work did not proceed as scheduled due to shortage of manpower and deployment of troops back to affected areas caused by TC Winston.
 Meeting was held on 19/07/16 with CO RFMFER whereby advice was given by CO RFMFER that his team is committed to complete the project.
 CO RFMFER in our meeting with him on 19/07/16 has noted the monthly report and assured us that he will Office of the Prime Minister Section 02: Page 12 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Project Name, Location Assistance Actual Expenditure as at 31/12/15 ($) Remarks Management Comments project costs had been paid out however as at 31/01/16 the project was still ongoing;  Monthly reports were submitted; and progress not discuss this matter with his officers.
 RFMFER has stated that they are using AQEP (Access to Quality Education Program) Plan.

Ratu Luke Primary School - Bua Renovation of Ratu Primary Luke School 99,388.96 80,871.40 Nailagotabua Primary School Naloto, – Verata, Tailevu Nailagotabua School Primary the involved renovation of five school building and five teachers quarters.

 Building Plan not approved by the Rural Local Authority.
on  MOU did not indicate commencement the dates of the projects; however MOU was the endorsed 17/07/15 with project duration of 120 days;  Project cost as per MOU is $108,376.76;  As at 31/12/15 a total of 91.7% of the project costs had been paid out however as at 31/01/16 the project is still ongoing; and  Monthly reports submitted.

progress not were for that  No MOU prepared and the endorsed project.
Discussion with the responsible officer revealed the project was an ad-hoc one committed by the Hon.

PM that had to be completed in a short timeframe; and has been completed however no financial acquittals have been provided to the Office.

 Project  Work did not commence after MOU was signed due to the deployment of troops back to the camp.

 The focus was to complete the renovation of the Ratu Luke Secondary School facilities.
 CO RFMFER has confirmed that some of the materials have been purchased and awaiting for the implementation of the project  Project yet to be implemented.

 This was a directive by Hon.

PM while in Taveuni on official duty and he directed for the project to be implemented as soon as possible.

 Meeting was held on 19/07/16 with CO RFMFER whereby advice was given by CO RFMFER that his team is currently working on the financial acquittal and project final report for submission to OPM.
Annesly Primary School - Toorak, Suva Construction of a 1 X 5 Classroom at Primary Annesly School 158,923.85  MOU did not indicate commencement the dates of the projects; MOU was endorsed on  Meeting was held on 19/07/16 with CO RFMFER whereby advice was given by CO RFMFER that his team is currently working on the financial Office of the Prime Minister Section 02: Page 13 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Project Name, Location Assistance Actual Expenditure as at 31/12/15 ($) Remarks Management Comments the 17/07/15 with project duration of 90 days;  Project cost as per MOU is $158,923.85 and as at 31/12/15 full payment had been made however as at 31/01/16 the project was still ongoing;  Monthly were reports submitted; and progress not acquittal and project final report for submission to OPM.
 Project is completed and is awaiting commissioning by Hon.

Prime Minister.

 CO RFMFER in the meeting held on 19/07/6 has noted the issue of monthly report  RFMFER has stated that they are using AQEP (Access to Quality Education Program) Plan.
- Napuka Cakaudrove, Vanualevu Napuka - Construction of 1 x 3 concrete block classroom and 1 x 2 Bedroom Teacher Quarters  Meeting was held on 19/07/16 with CO RFMFER whereby advice was given by CO RFMFER that his team is currently working on the financial acquittals and project final report for submission to OPM.

 Building Plan not approved by the Rural Local Authority.

$147,808.55  MOU was endorsed on the 14/04/14; progress not the were by  Monthly reports submitted RFMF;  Project  is completed.
No financial acquittals submitted; Final the the completion project not submitted; and  Building report on not approved by the Rural Local Authority.

Plan of Vugalei District School - Tailevu Renovation School Building of 209,774.43  Work did not commence after MOU was signed due to the deployment of troops back to the camp.

 Project is in progress yet to be completed.


 Meeting was held on 19/07/16 with CO RFMFER whereby advice was given by CO RFMFER that his team is currently working on the financial acquittal for submission to OPM.
 MOU did not indicate the commencement dates of the projects; MOU was endorsed on 07/08/15 with the project duration of 206 days; Project cost as per MOU is $255,935.08 as at 31/12/15 a total of $209,774.43 or 82% of the project costs had been paid out and as at the project 31/01/16  Office of the Prime Minister Section 02: Page 14 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Project Name, Location Assistance Actual Expenditure as at 31/12/15 ($) Remarks Management Comments Filimoni Rt Memorial School Sorokoba, Ba – Rt Filimoni Memorial School - of Construction Walkway, Fencing and Renovation Works was still ongoing; and  Monthly reports submitted.
progress not were 58,188.93  Monthly reports submitted; progress not were  Project is Completed financial submitted; however no acquittals and Final completion project not submitted.

report on the the of   Meeting was held on 19/07/16 with CO RFMFER whereby advice was given by CO RFMFER that his team is currently working on the financial acquittal and project final report for submission to OPM.

 Project was completed in January 2016 and commissioned by the Hon.

Prime Minister in February 2016.


Office of the Prime Minister Section 02: Page 15 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Section 3 Office of the Attorney General Roles and Responsibilities The Attorney-General is the Chief Legal Adviser to Government, whose Permanent Secretary is the Solicitor-General.

The Attorney-General’s Chambers seeks to continually review and improve Fijian laws to bring about a more just and secure society.
It provides legal services to Government and represents the State in legal proceedings.

It also prepares draft laws on request of Cabinet and maintains a publicly accessible register of all written laws.
The Chambers is therefore responsible for:  Providing legal advice to Government and to the holders of a public office on request;  Drafting laws on the request of Cabinet;  Maintaining a publicly accessible register of all written laws;  Representing the State in Tribunals and Courts in legal proceedings to which the State is a party, except criminal proceedings; and  Performing other functions assigned by the Constitution, any written law, Cabinet or the Attorney-General.
The Department of Civil Aviation comes under the Office of the Attorney-General and is responsible for the regulation of air transport in Fiji.

The Department develops air safety protocols, in line with international standards, and looks after the development of Fijian airports.

The Legal Aid Commission, the Fiji Intellectual Property Office and the Media Industry Development Authority also come under the Office of the Attorney-General.
Table of Contents PART A: FINANCIAL STATEMENT ...................................................................................................................................... 1 Audit Opinion ......................................................................................................................................................... 1 Statement of Receipts and Expenditure ................................................................................................................ 1 Appropriation Statement ....................................................................................................................................... 2 3.1 3.2 3.3 PART A: FINANCIAL STATEMENT 3.1 Audit Opinion The audit of the 2015 financial statement of the Office of the Attorney General resulted in the issue of an unqualified audit report.
3.2 Statement of Receipts and Expenditure The Office of the Attorney General collected revenue totalling $394,251 and incurred total expenditure of $13,755,679 in 2015.

Refer to Table 3.1 for details.
Office of the Attorney General Section 03: Page 1 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Table 3.1: Statement of Receipts and Expenditure for 2015 Description RECEIPTS State Revenue Hotel License Trademark and Patent Registration Liquor License Civil Aviation Licence Miscellaneous Fees Other Total State Revenue Agency Revenue Miscellaneous TOTAL REVENUE EXPENDITURE Operating Expenditure Established Staff Government Wage Earners Travel & Communications Maintenance & Operations Purchase of Goods & Services Operating Grants & Transfers Special Expenditures Total Operating Expenditure Capital Expenditure Capital Grants and Transfers Total Capital Expenditure Value Added Tax TOTAL EXPENDITURE 2015 ($) 2014 ($) 246,100 35,958 --- Total revenue increased by $217,828 or 123% in 2015 compared to 2014 as a result of new hotel licenses issued, advance renewal of hotel licence, fees charged for change in licensee and other license collection.
Funds allocated for the preparatory works for Rotuma Airstrip and Other Rural Airstrips under the Capital Grants and Transfer could not be fully utilised due to the focus of Airports Fiji Limited on the Nadi International Airport modernisation project.

3.3 Appropriation Statement The Office of the Attorney General incurred expenditure totalling $13,755,679 in 2015 against a revised budget of $17,181,186 resulting in a savings of $3,425,507 or 20%.
Details of expenditures against the budget estimates are provided in Table 3.2.
Office of the Attorney General Section 03: Page 2 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Table 3.2: Appropriation Statement for 2015 SEG Item Budget Estimate ($) Changes ($) Established Staff Government Wage Earners Travel & Communications Maintenance & Operations Purchase of Goods & Services Operating Grants & Transfers Special Expenditures Total Operating Expenditure Capital Expenditure Capital Grants & Transfers Total Capital Expenditure Value Added Tax TOTAL EXPENDITURE 3,829,134 157,129 155,450 308,300 1,328,373 9,558,700 935,000 16,272,086 500,000 500,000 409,100 17,181,186 Revised Estimate ($) a 3,667,559 318,704 152,659 377,898 2,270,886 8,649,380 835,000 16,272,086 (161,575) 161,575 (2,791) 69,598 942,513 (909,320) (100,000) --- --- --- --- --- 500,000 500,000 409,100 17,181,186 Actual Expenditure ($) b 2,566,198 302,002 152,231 358,483 1,567,950 7,845,683 655,454 13,448,001 10,140 10,140 297,538 13,755,679 Lapsed Appropriation ($) (a-b) 1,101,361 16,702 428 19,415 702,936 803,697 179,546 2,824,085 489,860 489,860 111,562 3,425,507 Office of the Attorney General Section 03: Page 3 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Section 4 Ministry of Finance Role and Responsibilities The Ministry of Finance is the critical link between the decisions Government leaders make and the actions Government officials take to turn those decisions into reality for the people of Fiji.
The Ministry of Finance manages the economy: it collects the funds necessary to provide Government services, make sure those funds are distributed properly to the institutions that provide those services, and ensure that the people’s money is used as its elected leaders intend and that all spending adheres to Fijian law.
The work of the Ministry of Finance helps put the economy on a path to sustainable long-term development by ensuring that the national economy is well managed and meets its macroeconomic targets.
To carry out this responsibility, the Ministry of Finance must provide sound economic and financial forecasting and analysis, manage the nation’s financial assets and debts, oversee fiscal policy and tax collection, carry out Government- wide financial management reform, manage the national budget, and ensure that Government can procure the goods and services it needs to serve the people of Fiji.
As part of its long-term plan, the Ministry will continue to spearhead the financial management reform within the public sector that will help Government improve its service delivery to the Fijian people.
Table of Contents PART A: 4.1 4.2 4.3 4.4 4.5 4.6 4.7 FINANCIAL STATEMENT..................................................................................................................................... 2 Audit Opinion ............................................................................................................................................................. 2 Head 4, 50, 51, 52, 10, 12 and 13- Statement of Receipts and Expenditure ............................................................ 2 Appropriation Statement ........................................................................................................................................... 4 Statement of Losses ................................................................................................................................................. 5 Profit & Loss Statement – Trading & Manufacturing Activity ..................................................................................... 6 Balance Sheet – Consolidated Trading & Manufacturing Activity ............................................................................. 6 Consolidated Trust Account Statement ..................................................................................................................... 7 MINISTRY OF FINANCE ............................................................................................................................................................ 7 4.8 Write Offs .................................................................................................................................................................. 7 Regularity Audit - HEAD 50 mISCELLENEOUS SERVICES .................................................................................................. 8 4.9 Over adjustment in SEG 1 ........................................................................................................................................ 8 4.10 Monitoring of Funds released from Head 50
 ............................................................................................................. 9 4.11 SLG 84 Reconciliations not submitted to FMIS Division ......................................................................................... 10 Regularity Audit - HEAD 4 ...................................................................................................................................................... 12 4.12 FNPF Reconciliations not up to date ....................................................................................................................... 12 4.13 Monthly Reconciliations of Underline Accounts not verified at FMIS Section ......................................................... 12 APPENDIX 4.1: Monthly Reconciliations Submitted after 2 to 4 months ..................................................................... 14 APPENDIX 4.2: Monthly Reconciliations Submitted after 2 to 4 ................................................................................... 14 Ministry of Finance Section 04: Page 1 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ PART A: FINANCIAL STATEMENT 4.1 Audit Opinion The audit of the 2015 accounts of the Ministry of Finance resulted in the issue of an unqualified audit report.
4.2 Head 4, 50, 51, 52, 10, 12 and 13- Statement of Receipts and Expenditure The Ministry of Finance budget is appropriated as Head 4 in the 2015 Budget Appropriation Act with Fiji Procurement Office (FPO).

As at 31/12/15, the consolidated revenue for the Ministry totalled $3,762,443,296 with an additional $114,106,619 of borrowed funds were paid directly to contractors by third party.

Consolidated expenditure for the ministry amounted to $77,480,472.
Table 4.1: Head 4 – Consolidated Statement of Receipts and Expenditure in 2015 Description RECEIPTS State Revenue Operating Revenue Investing Revenue Borrowing Revenue Total State Revenue Agency Revenue Board Member Fee Miscellaneous Revenue Sales of Publications Total Agency Revenue TOTAL REVENUE EXPENDITURE Operating Established Staff Government Wage Earners Travel and Communication Maintenance and Operations Purchase of Goods and Services Operating Grants and Transfers Special Expenditure Total Operating Expenditure Capital Expenditure Capital Construction Capital Purchases Capital Grants and Transfers Total Capital Expenditure Value Added Tax TOTAL EXPENDITURE 2015 ($) Payment by Third Party ($) 2014 (Restated) ($) Payment by Third Party ($) --- --- 6,500,000 6,500,000 604,718 77,480,472 11,214,481 503,133 673,990 1,282,953 2,076,236 50,599,145 2,194,295 68,544,233 --- 213,141 1,774,319 1,987,460 842,302 71,373,995 Ministry of Finance Section 04: Page 2 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Total revenue increased by $905,998,194 or 32% in 2015 due to the increase in operating revenue including tax collections by $246,577,419 or 11%, investing revenue by 174,849,582 or 217% and borrowing revenue by $479,968,904 or 89%.
Payments made by third party decreased by $76,060,122 or 63%.

Total expenditure increased by $6,106,477 or 9% due to the increase in operating and capital grants and transfers by $3,495,099 (7%) and $4,725,681(266%), respectively.

The Ministry incurred expenditure of $176,576,116 in 2015 from Head 50.

Refer to Table 4.2 for detail.
Table 4.2: Head 50 - Statement of Receipts and Expenditure in 2015 Description EXPENDITURE Operating Expenditure Established Staff Travel & Communications Purchase of goods & services Operating grants & transfers Special expenditures Total Operating Costs Capital Expenditure Capital Construction Capital Purchases Capital Grants & Transfers Total Capital Expenditure Value Added Tax TOTAL EXPENDITURE 2015 ($) 2014 ($) 26,411,569 2,037,874 2,435,752 4,926,002 14,647,415 50,458,612 --- 11,522,820 111,267,080 122,789,900 3,327,604 176,576,116 3,083,580 1,620,907 3,463,416 13,276,791 9,004,227 30,448,921 --- 9,401,667 98,149,112 107,550,779 4,008,749 142,008,449 Total expenditure under Head 50 increased by $34,567,667 or 24% in 2015 compared to 2014.
This was due to the increase in SEG 1 mainly attributed to the payment of the Job Evaluation Exercise (JEE) arrears for the Fiji Police Force.

Total expenditure under Head 51 increased by $2,092,966 or 6% in 2015 compared to 2014.

This was due to the increase in pension payments by $2,199,451 or 8%, and gratuities by $195,642 or 15%.

Refer to Table 4.3 for details.
Table 4.3: Head 51 - Statement of Receipts and Expenditure in 2015 Description EXPENDITURE Operating Expenditure Pensions Gratuities Compassionate Allowance Total Operating Costs TOTAL EXPENDITURE 2015 ($) 2014 ($) 30,554,331 1,528,107 6,795,881 38,878,319 38,878,319 28,354,880 1,332,465 7,098,008 36,785,353 36,785,353 Finance Charges on Public Debt – Miscellaneous Payment in 2015 increased by $6,516,420 or 622% compared to 2014 and finance charges on public debt for overseas loans increased by $556,248,886 or 701%.
This was mainly due to the repayment of the overseas global bond.

Finance charges on public debt for domestic loans decreased by $56,563,163 or 15%.

Details are shown in Table 4.4.
Ministry of Finance Section 04: Page 3 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Table 4.4: Head 52 - Statement of Receipts and Expenditure in 2015 Description EXPENDITURE Operating Expenditure Finance Charges on Public debt – Miscellaneous Payment Finance Charges on Public debt – Overseas Loans Finance Charges on Public debt – Domestic Loans TOTAL EXPENDITURE 2015 ($) 2014 ($) 7,564,667 635,574,674 329,538,664 972,678,005 1,048,247 79,325,788 386,101,827 466,475,862 4.3 Appropriation Statement The Ministry incurred expenditure totalling $77,480,472in Head 4 in 2015 against a revised budget of $80,803,224 resulting in a saving of $3,322,752 or 4%.
Refer to Table 4.5 for details: Table 4.5: Head 4 - Appropriation Statement for 2015 SEG Item & Grants Established Staff Unestablished Staff Travel & Communication Maintenance & Operations Purchase of Goods & Services Operating Transfers Special Expenditure Total Operating Costs Capital Purchases Capital Grants Transfers Total Capital Expenditure Value Added Tax TOTAL and Budget Estimate ($) 11,994,602 465,301 543,475 1,149,400 1,835,680 Changes ($) (255,344) 141,461 32,870 88,391 (7,378) Revised Estimate ($) 11,739,258 606,762 576,345 1,237,791 1,828,302 Actual Expenditure ($) 10,813,339 571,272 426,173 1,034,469 1,741,595 Lapsed Appropriation ($) 925,919 35,490 150,172 203,322 86,707 54,094,249 --- 54,094,249 54,094,244 5 3,239,302 73,322,009 --- 6,500,000 6,500,000 981,215 80,803,224 --- --- ---- --- --- --- --- 3,239,302 73,322,009 --- 6,500,000 6,500,000 981,215 80,803,224 1,694,662 70,375,754 --- 6,500,000 6,500,000 604,718 77,480,472 1,544,640 2,946,255 --- --- --- 376,497 3,322,752 The Ministry incurred expenditure totalling $176,576,116 in Head 50 in 2015 against a revised budget of $218,073,007 resulting in savings of $41,496,891 or 19%.
Refer to Table 4.6 for details: Table 4.6: Head 50 - Appropriation Statement for 2015 Appropriation Head 50 - “Miscellaneous Services” is administered by the Ministry of Finance.

The funding provided under Head 50 includes the contingency funding and other common central pool of funds that are available to the whole of Government.

It also includes funding for activities that require scrutiny and monitoring by the Ministry of Finance.
These allocations are disbursed under the authority of the Permanent Secretary for Finance.1 SEG Item Budget Estimate ($) Changes ($) 1 Established Staff 34,052,458 (5,472,005) Revised Estimate ($) 28,580,453 Actual Expenditure ($) 26,411,569 Lapsed Appropriation ($) 2,168,884 12015 Budget Ministry of Finance Section 04: Page 4 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ SEG Item 3 5 6 7 9 10 13 & Grants of Goods & Travel & Communication Purchase Services Operating Transfers Special Expenditure Total Operating Costs Capital Purchases Capital Grants and Transfers Total Capital Expenditure Value Added Tax TOTAL Budget Estimate ($) 2,500,000 4,602,800 Changes ($) 300,000 (580,608) Revised Estimate ($) 2,800,000 4,022,192 Actual Expenditure ($) 2,037,874 2,435,752 Lapsed Appropriation ($) 762,126 1,586,440 4,695,000 317,696 5,012,696 4,926,002 86,694 9,060,000 54,910,258 16,491,642 141,772,941 158,164,583 4,898,166 218,073,007 7,728,604 2,293,687 --- (2,293,687) (2,293,687) --- --- 16,788,604 57,203,945 16,491,642 139,479,254 155,970,896 4,898,166 218,073,007 14,647,415 50,458,612 11,522,820 111,267,080 122,789,900 3,327,604 176,576,116 2,141,189 6,745,333 4,968,822 28,212,174 33,180,996 1,570,562 41,496,891 The Ministry incurred expenditure totalling $38,878,319 in Head 51 in 2015 against a revised budget of $42,343,400 resulting in a savings of $3,645,081or 8%.
Refer Table 4.7 for details: Table 4.7: Head 51 - Appropriation Statement for 2015 Appropriation Head 51 - “Pensions, Gratuities, and Compassionate allowance is also administered by the Ministry of Finance.

The allocation is for Government Pensioners, Ex-Parliamentarian, Ex-Prime Minister and Presidents, Ex-Chief Justice, Retired Judges and Service Pensioners.
SEG Item Budget Estimate ($) Changes ($) Revised Estimate ($) Actual Expenditure ($) Lapsed Appropriation ($) 11 Pensions, Gratuities and Compassionate allowance TOTAL 42,343,400 42,343,400 --- --- 42,343,400 38,878,319 42,343,400 38,878,319 3,465,081 3,465,081 The Ministry incurred expenditure totalling $972,678,005 in Head 52 in 2015 against a revised budget of $974,662,732 resulting in a savings of $1,984,727 or 0.2%.
Refer to Table 4.8 for details: Table 4.8: Head 52 - Appropriation Statement for 2015 Appropriation Head 52 – Charges on Account of Public Debt was allocated for the repayment for domestic and overseas loans.
SEG Item Budget Estimate ($) Changes ($) Revised Estimate ($) Actual Expenditure ($) Lapsed Appropriation ($) 12 Finance Charges on Public Debt TOTAL 430,718,958 543,943,774 974,662,732 972,678,005 430,718,958 543,943,774 974,662,732 972,678,005 1,984,727 1,984,727 4.4 Statement of Losses The Ministry of Finance recorded no loss of cash or revenue in 2015.

However, items worth $276,643 were written off following the Ministry’s Board of Survey conducted in 2015.
In addition, amounts totalling $564,200 for accounts which are asset in nature were also written off as part of the clearing of previous years postings which were not substantiated.
Ministry of Finance Section 04: Page 5 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ 4.5 Profit & Loss Statement – Trading & Manufacturing Activity The Fiji Procurement Office (FPO) Trading and Manufacturing Account (TMA) was inherited from the former Government Supplies Department, which was initially set up as a retail arm for the Government.

The TMA includes the sale of Fiji flags as the only semi-commercial making activity for the Ministry of Finance.
The flags are sold at minimal profit.

The Profit & Loss Statement – Trading & Manufacturing Activity showed a net profit of $998,624as at 31/12/15 compared to $752,961 in 2014.

Total expense for 2015 was $93,432 with the major components of expenses being incurred on maintenance and operations and other expenses.
Refer Table 4.9 for details: Table 4.9: Profit & Loss Statement - Fiji Procurement Office Description Income Sales Cost of Finished Goods Sold Gross Profit t Expenses Direct Labour Maintenance & Operations Other Expenses Total Expenses Net Profit 31 December 2015 ($) 31 December 2014 (Restated) ($) 1,112,931 20,875 1,092,056 1,009,143 40,234 968,909 4,117 53,064 36,251 93,432 998,624 106,664 28,232 81,052 215,948 752,961 4.6 Balance Sheet – Consolidated Trading & Manufacturing Activity The net assets of the Ministry in 2015 totalled $1.4 million which declined by $0.8 million (36%) from 2014.
This was attributed to a reduction in Accounts Receivable by $212,938 (100%) through a write off exercise undertaken in 2015.
Refer Table 4.10 for details: Table 4.10: Balance Sheet Description Deposits & Deductions Accounts Payable Total Liabilities Equities TMA Surplus Capital Returned to Consolidated Fund TMA Accumulated Deficit Net Profit / (Loss) Total Equity 31 December 2015 ($) (49,293) --- (49,293) 31 December 2014 (Restated) ($) (15,821) 27,329 11,508 5,211,660 6,081,727 (4,762,420) 998,624 1,447,864 (4,679,613) 752,961 2,155,075 Ministry of Finance Section 04: Page 6 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Description 31 December 2015 TOTAL LIABILITIES & EQUITY Current Assets Cash at Bank Finished Goods Accounts Receivable TOTAL ASSETS ($) 1,398,571 1,303,509 95,062 --- 1,398,571 31 December 2014 (Restated) ($) 2,166,583 1,935,495 18,150 212,938 2,166,583 4.7 Consolidated Trust Account Statement Total trust funds for the Ministry increased by $2,242,525 or 22% in 2015 compared to 2014.
The increase was due to the increase in receipts of performance bond& Mahogany licenses fees by $2,141,931 or 65%.Refer Table 4.11 for details: Table 4.11: Trust Account Description Opening Balance 1 January Receipts Receipts from Performance Bond& Mahogany licenses fees Total Receipts Payments Payments of Performance Bond & Mahogany licenses fees Total Payments Closing Balance MINISTRY OF FINANCE 4.8 Write Offs 31 December 2015 ($) 31 December 2014 (Restated) ($) 10,216,898 8,932,224 5,445,583 5,445,583 3,303,652 3,303,652 3,203,058 3,203,058 12,459,423 2,018,978 2,018,978 10,216,898 Subject to this or any other Act, the Minister of Finance may write off losses in respect of public money, state assets and agency assets.2 The Finance Instructions may require each budget sector agency: (a) To undertake appropriate recovery action for losses; (b) To maintain a register of losses containing the details required to be recorded by the Finance Instructions; and (c) To include details about losses and recovery action in the audited financial statements to be included in the agency’s annual report.3 2Financial Management Act 2004 – section 34(1)(a) 3 Financial Management Act 2004 – section 35 Ministry of Finance Section 04: Page 7 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Audit noted that assets totalling $12,461,333 were written off in the 2015 accounts as approved by the Minister of Finance.
The write off of assets accounts for Ministry of Finance and Election Office resulted in a loss to the Ministry and to government as a whole.
Table 4.12: Write Off for Ministry of Finance Ministry/ Department Finance Asset Cash Prepayments & Accrued Income TMA Accounts Receivable Term Loan Receivable Accounts Receivable Elections Total Allocation Description 1-04102-04351-530195 1-04102-04251-530201 1-04601-63999-570301 Drawings Inland Revenue FRCA Drawings Advances Amounts ($) 6,862,071.53 4,985,366.00 329,723.59 4-04351-65999-560401 GL Trade Debtors Open Items 212,764.82 1-04102-04201-610101 1-04102-04201-610101 1-10101-10999-560611 1-10101-10999-560302 Mr J.B. Mr N. S. PD Employees FNPF GL Employee Advances Open Item 16,756.75 4,955.00 49,681.91 13.04 12,461,332.64 Poor control and review of general ledger posting has resulted with posting errors and unreconciled variances for which the Ministry has sought the write off for the above stated accounts.
The risk of fraud and error exists with these accounts.

Recommendation The Ministry should ensure that ledger postings are checked and reconciliation of account balances are performed thoroughly and efficiently to ensure account balances are substantiated.

Ministry’s Comments Technically the exercise on write-off was undertaken to clear all the mispostings which has accumulated over the past decade.

A very exhaustive and robust assessment was undertaken prior to formalizing the request for write- off.
In fact, OAG had also noted some of these redundant data in the FMIS which needed to be validated and rectified.

Moreover, bulk of the anomalies was inherited during the migration roll out of the FMIS, initially underpinned mainly by incorrect mapping between the automated and manual environment.
REGULARITY AUDIT - HEAD 50 MISCELLENEOUS SERVICES 4.9 Over adjustment in SEG 1 The Salary Adjustment budget is set aside to meet any unbudgeted salary commitments that may arise during the year as a result of creation of new ministries or shortfalls in the budget that needs to be corrected.4 Within 3 days of receiving the monthly general ledger reports from FMIS, CO Ledgers shall reconcile the ledger balances to the general ledger reports and prepare a ledger reconciliation statement.5 Any 4Republic of Fiji Budget Estimates 2015 – p. 333 Ministry of Finance Section 04: Page 8 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ errors or misallocations must be immediately adjusted by way of journal vouchers with the approval of AO (B), SAO (B & E), PAO (T) and CA (T) only.6 Audit noted that Salary Adjustment expenditure in FMIS general ledger (1-50101-50999-019901) has a credit balance of $60,985.
The above is a result of over adjustment carried out in SEG 1 of Appropriation Head 50 to reverse Ministers’ salaries that were wrongly posted to this Head which could not be rectified by Ministry of Finance.

Recommendations The Ministry of Finance should:  properly control and monitor the Head 50 expenditures; and  ensure that reconciliations are carried out in accordance with the Finance Manual.

Ministry’s Comments This was an inadvertent error which was rectified.
In essence, from the period June to December, the employer’s contribution of FNPF for Ministers was paid from this vote.

However, when journals were raised to pass charges to respective Ministries and Departments, the full 18% was charged instead of 8% resulting in this account being over-credited.

There was no financial loss to the state.

It was just a mere mispoting between agencies.

The screenshot below confirms the same.


4.10 Monitoring of Funds released from Head 50 The Miscellaneous Services are administered by the Ministry of Finance.

The funding provided under Head 50 includes the contingency funding and other common central pool of funds that are available to the whole of Government.

It also includes funding for activities that require scrutiny and monitoring by the Ministry of Finance.
These allocations are disbursed under the authority of the Permanent Secretary for Finance.7 The Budget Section shall monitor and scrutinise all acquittals received, to ensure that funds are being used for its intended purpose and that projects are implemented according to plan and set timelines.
8 Non - compliance of the necessary requirements shall result in the non-release of funds regardless of it being part of the agency’s budget appropriation.9 The Grant Agreement shall outline terms and conditions under which the grant is given.

The following minimum information must be provided in any agreement: i. ii.

iii.

iv.
purpose of the grant and performance to be achieved; term of agreement; responsibility of recipients in keeping proper records; approved funding and payment conditions; 5Ministry of Finance - Finance Manual 2014 Section 16.3.3 6Ministry of Finance - Finance Manual 2014 Section 16.3.4 7 Republic of Fiji Budget Estimates 2015 – p. 331 8 SLG 84 Reporting Guide, Section 6.2 9 SLG 84 Reporting Guide, Section 6.3 Ministry of Finance Section 04: Page 9 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ v. vi.
conditions for monitoring expenditure of the grant; acquittal reporting requirements 10 The audit of Head 50 funds released to the Ministries/Department revealed the following anomalies: 1) The Ministry released $57,132,087.85 to Tertiary Scholarship and Loans Board (TSLB) in accordance with the agreement dated 13/05/15.
The audit noted that the agreement between Ministry of Finance and TSLB does not have a provision for TSLB to submit the audited financial statements to the Ministry within an agreed specified time for monitoring.

This issue was also highlighted in the 2014 Audit Report but is yet to be addressed.

2) The Ministry gave a loan worth $9.7million to South Pacific Fertilizer Limited (SPFL) on 14/09/15.
Audit noted that this agreement covers a period of 25 years and there was no clause on the actual utilisation of fund.

In addition, there was no provision on the annual submission of audited SPFL financial statements for monitoring purposes.

Failure of the Ministry to capture all essential information in the agreement for the use, monitoring and acquittals of funds and as well as lack of monitoring from Ministry of Finance, increases the risk of abuse and misappropriation.
Recommendations  The Ministry of Finance Budget section as administrator of funds for Head 50 should ensure that proper monitoring is done for the funds released to Ministries and Departments and other agencies; and  The Budget Section shall monitor and scrutinise all acquittals received in relation to Head 50 expenditure to ensure that funds are being used for its intended purpose.

Ministry’s Comments 1.

The verification of works is closely undertaken by the SG’s Office before payments are done.

2.
2.

The 2016-2017 agreement has now included clauses (Section 10 paragraph 10.3) on the provision of audited report to the Ministry of Economy.

3.

The monitoring of SPFL is usually undertaken by the line Ministry – Ministry of Sugar and FSC.

In addition MoE usually undertakes the verification process before the grant is released.
4.11 SLG 84 Reconciliations not submitted to FMIS Division At the end of each month, agencies are to monitor and reconcile all SLG 84 funds.11 Receiving agencies are to submit their monthly reports within one week at the end of each month to the paying agency.12 All SLG 84 monthly reconciliation shall be submitted to the paying agencies/Budget Section/FMIS Unit of the Ministry of Finance (whichever applicable).13 The following anomalies were noted on the SLG 84 reconciliations: 10 Ministry of Finance Manual – Part 3.1.14 11 SLG84 Reporting Guide, section 9.1 12 SLG84 Reporting Guide, section 9.2 13 SLG84 Reporting Guide, section 9.4 Ministry of Finance Section 04: Page 10 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ (i) The following Ministries/Department did not submit their SLG 84 December 2015 reconciliation as required under SLG 84 Reporting Guide, section 9.2: a) b) c) d) e) f) g) h) i) j) k) l) m) Bureau of Statistics; Ministry of Foreign Affairs; Fijian Elections Office; Judiciary Department; Public Service Commission; Ministry of Women, Children & Poverty Alleviation; Ministry of Fisheries & Forests; Ministry of Lands and Mineral Resources; Ministry of Industry, Trade and Tourism; Ministry of Sugar; Ministry of Infrastructure & Transport; Ministry of Local Government, Housing & Environment; and Ministry of Health and Medical Services.
(ii) The Ministry of Women, Children & Poverty Alleviation; Ministry of Fisheries & Forests; Ministry of Industry, Trade and Tourism; and Ministry of Infrastructure & Transport showed negative general ledger balances and audit was not able to establish the correctness of these balances which indicate lack of monitoring and supervision.

Refer Table 4.13 below for details.


Table 4.13: Negative balances in SLG 84 Ministry/ Department Allocation SOCIAL WELFARE 12430175999840602 FORESTRY & FISHERIES 13210132999840602 13410134101840602 INDUSTRY & TRADE 14060141999840602 ENERGY GL Balance as at 31/12/15 ($) (248.25) (5,831.79) (33.75) (499.50) The above indicates poor monitoring and checking to ensure that funds disbursed from Head 50 via SLG 84 accounts are reconciled on a timely manner.
Recommendation The Ministry should ensure that reconciliation for funds transferred from Head 50 are prepared by the receiving Ministries/Departments and are submitted to the Ministry of Finance.

Negative ending balances identified should be investigated and rectified.

Ministry’s Comments The MOE fully concurs with the recommendation.

To assist in the reconciliation, MOE had designed a reconciliation template to assist Ministries in compiling, constructing and substantiating balance sheet amounts.
On a positive note, our verification shows that all SLG84 reconciliation raised has zero balances as at the end of December 2015, which confirms that any unused amounts has been remitted to relevant agencies.
Ministry of Finance Section 04: Page 11 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ REGULARITY AUDIT - HEAD 4 4.12 FNPF Reconciliations not up to date The Accounting Head must ensure that payroll reconciliations are carried out fortnightly for salaries and weekly for wages.

14 As at date of audit15, it was noted that FNPF reconciliations were not being carried by the Ministry.
January and February reconciliations for 2015 were performed in 2016 while April to December 2015 reconciliations were outstanding.

Trust account reconciliations is an important internal control mechanism.

In the absence of such reconciliation process the Ministry may fail to detect and rectify errors and omissions on a timely basis.
Recommendations The Ministry should ensure:   that FNPF reconciliations are performed on a fortnightly/weekly basis; and that the reconciliation statements are thoroughly checked by the Senior Accounts Officer Salaries to minimise or avoid incorrect payments of salaries and wages.

Ministry’s Comments It should be noted that all Salaries and Wages reconciliations for 2015 were done in the same year.
There were some delays as the Salaries Team was directly involved with updating incorrect TINs and FNPF numbers on the payroll system.

FNPF had given us a strict timeline for correction of FNPF numbers for the Whole of Government as they were in the process of implementing their new FNPF portal.

Incorrect FNPF numbers would have resulted in FNPF CS files being rejected in totality.

This would have resulted in members’ accounts not being credited with their FNPF contributions.
To avoid this scenario, priority was given to this exercise!

All salaries and wages reconciliations are now up-to-date and are being done before each pay day.

FNPF reconciliations are being done on a monthly basis.

Copies of reconciliations can be obtained from the Salaries Unit for your verification.
4.13 Monthly Reconciliations of Underline Accounts not verified at FMIS Section All Permanent Secretaries and Head of Departments are required to submit monthly reconciliations to the Ministry of Finance by the 15th of each month.

Reconciliations verify the validity of the accounting practices and correctness of financial reports.16 14 Finance instruction 2010 Section 17(7) 15 22/03/16 16 Finance Circular No.
02/2013 Ministry of Finance Section 04: Page 12 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ The audit noted that the underline accounts reconciliations were not submitted to Ministry on Finance on time.

It was further noted that there were no evidence that the reconciliations were reviewed by the Head of Department at FMIS to ensure that the reconciliations submitted were correct and free from errors and omissions.
The monthly reconciliations were submitted after two to four months had elapsed.

Refer to Appendix 4.1 and Appendix 4.2 for examples.

Reconciliation is an important internal control mechanism and when not checked for accuracy may result in the failure to detect, on a timely basis, possible irregularities in the different account areas.

Recommendations  The Ministry should ensure that reconciliations submitted by the respective ministries are reviewed by the Head of FMIS.
 The Ministry should follow up with the respective Permanent Secretaries if reconciliations are not submitted on time.

Ministry’s Comments The recommendation is noted.

MOE has taken a two prong approach: 1.

2.

The initial focus is to ensure the reconciliation done by line agencies are thorough and is error free On the same note the ministry is working with line agencies to ensure timely submission of reconciliations.
Ministry of Finance Section 04: Page 13 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ APPENDIX 4.1: Monthly Reconciliations Submitted after 2 to 4 months Reconciliation Ministry Drawings Bank Clearing Lodgement SLG 84 IDC RFA Operating Trust True Trust  Department of Lands  Fiji Police Force  Department of Lands  Fiji Police Force  Department of Lands  Fiji Police Force  Department of Lands  Fiji Police Force  Department of Lands  Fiji Police Force  Department of Lands  Fiji Police Force  Department of Lands  Fiji Police Force APPENDIX 4.2: Monthly Reconciliations Submitted after 2 to 4 Department of Lands Reconciliation Drawings Bank Lodgement Clearing Jan Feb Mar April May June July Aug Sep Oct Reconciliations received in Dec Reconciliations received in Nov Feb 2016 SLG 84 IDC Reconciliations submitted not Dec Dec Dec Dec Jan Jan April April May May June July Aug Sept Oct Nov Nov Dec Feb 2016 Jan Jan Feb 2016 Reconciliation not submitted Reconciliation not submitted RFA Operating Trust June July July July Reconciliations not submitted July July July Sept Oct Oct Oct Reconciliations not submitted True Trust April April Aug Aug Aug Aug Aug Sept Oct Reconciliation not submitted Dec Reconciliation not submitted Ministry of Finance Section 04: Page 14 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Section 5 Ministry of i-Taukei Affairs Role and Responsibilities Government is committed to protecting the rights, customs and traditions of the iTaukei.
Through the Ministry of i-Taukei Affairs, Government develops implements and monitors policies and programs for the good governance and wellbeing of the iTaukei people.

The Ministry’s specific roles and responsibilities are outlined in the iTaukei Affairs Act and other legislation, but its overall direction is guided by the Fijian Constitution, which recognises the iTaukei, their ownership of land, and their unique culture, customs, traditions and language.
The Ministry’s core function is to provide the link between Government and the various institutions that govern the affairs of the iTaukei.

The Ministry is responsible for ensuring that these institutions are well run, accountable and transparent so as to best serve the interests of all iTaukei.

The iTaukei administration – established across 14 Provinces in Fiji – is under the direction of the iTaukei Affairs Board, an eight member group appointed by the Minister for iTaukei Affairs.
The Ministry is the custodian of various registers that detail iTaukei land ownership, customary fishing grounds, village boundaries and traditional titles, including the Vola ni Kawa Bula, known as the VKB.

As such, the Ministry has the important responsibility of resolving disputed claims in relation to these matters.

In support of its role as official record keeper, the Ministry conducts surveys of iTaukei land, as well as demarcations of village and fishing boundaries, in areas where no records exist.
The Ministry is also entrusted with preserving and promoting iTaukei culture for the present and future generations.

It develops programs aimed at deepening the understanding of iTaukei customs, language and traditional knowledge, as well as documents important ceremonial occasions and conducts research on a broad range of topics.
Table of Contents PART A: FINANCIAL STATEMENT..................................................................................................................................... 1 5.1 Audit Opinion ............................................................................................................................................................... 1 5.2 Statement of Receipts and Expenditure ...................................................................................................................... 2 5.3 Appropriation Statement .............................................................................................................................................. 2 PART B: AUDIT FINDINGS .................................................................................................................................................. 3 5.4 Scholarship Bond Recovery Balances ........................................................................................................................ 3 5.5 Grants provided to iTaukei Affairs Board .................................................................................................................... 4 PART A: FINANCIAL STATEMENT 5.1 Audit Opinion The audit of the 2015 accounts of the Ministry of i-Taukei Affairs resulted in the issue of an unqualified audit report.
Ministry of i-Taukei Affairs Section 05: Page 1 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ 5.2 Statement of Receipts and Expenditure The Ministry collected revenue totalling $33,246 and incurred expenditure totalling $9,717,730 in 2015.
Table 5.1: Statement of Receipts and Expenditure for 2015 Description 2015 ($) 2014 ($) RECEIPTS State Revenue Agency Revenue TOTAL REVENUE EXPENDITURE Operating Expenditure Established Staff Government Wage Earners Travel & Communications Maintenance & Operations Purchase of Goods & Services Operating Grants & Transfers Special Expenditures Total Operating Expenditure Capital Expenditure Capital Grants & Transfers Total Capital Expenditure 31,260 1,986 33,246 173,342 7,122 180,464 2,342,137 155,618 71,452 275,045 80,763 5,589,394 666,587 9,180,996 2,258,380 119,482 69,175 234,773 69,324 4,122,000 609,933 7,483,067 426,838 426,838 356,409 356,409 Value Added Tax 109,896 93,664 TOTAL EXPENDITURE 9,717,730 7,933,140 Total expenditure increased by $1,784,590 or 22% in 2015 compared to 2014 due to increase in rate for employers FNPF contributions from 8% to 10%, increase in funds allocated for iTaukei Affairs Board and increase in monthly allowance rate for both the Mata ni Tikina and Turaga ni Koro.
5.3 Appropriation Statement The Ministry of i-Taukei Affairs incurred expenditure totalling $9,717,730 against the revised budget of $10,283,017 resulting in a savings of $565,287 or 5%.

Details of expenditure against the budget estimates are provided in Table 5.2.
Table 5.2: Appropriation Statement for 2015 SEG Item Established Staff Government Wage Earners Travel & Communications Maintenance & Operations Purchase of Goods & Services Ministry of i-Taukei Affairs Budget Estimate ($) Changes ($) 2,671,946 114,400 65,812 260,500 70,000 (189,385) 54,385 10,000 105,000 20,000 Revised Estimate ($) (a) 2,482,561 168,785 75,812 365,500 90,000 Actual Expenditure ($) (b) 2,342,137 155,618 71,452 275,045 80,763 Lapsed Appropriation ($) (a-b) 140,424 13,167 4,360 90,455 9,237 Section 05: Page 2 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ SEG Item Budget Estimate ($) Changes ($) 6 7 10 13 Operating Grants & Transfers Special Expenditures Total Operating Expenditure Capital Expenditure Capital Grants & Transfers Total Capital Expenditure Value Added Tax 5,590,594 766,479 9,539,731 572,586 572,586 170,700 --- --- --- --- --- --- Revised Estimate ($) (a) 5,590,594 766,479 9,539,731 Actual Expenditure ($) (b) 5,589,394 666,587 9,180,996 572,586 572,586 170,700 426,838 426,838 109,896 Lapsed Appropriation ($) (a-b) 1,200 99,892 358,735 145,748 145,748 60,804 TOTAL EXPENDITURE 10,283,017 --- 10,283,017 9,717,730 565,287 PART B: AUDIT FINDINGS 5.4 Scholarship Bond Recovery Balances The Tertiary Scholarships and Loans Decree 2014 established the Tertiary Scholarships and Loans Board (TSLB) for the Administration of Tertiary Scholarships in Fiji effective from 18 December 2013.
All administration of Scholarships is to be handled by TLSB from 2014.

All scholarship records including the scholarship bond recovery documents were transferred to the TSLB in 2014.

The documents were received by the TSLB on 07/01/14.

The audit noted that the scholarship recipient balances were still reflected in the Ministry’s general ledger despite the transfer of the administration of scholarships to the TSLB from 2014.

Refer to Table 5.3 below for details.
Table 5.3: Scholarship Bond Recovery Account Balances Account Type Account Description 2015 ($) 2014 ($) Domestic Bank Balances 1-05101-05101-520415 Term Loans Receivable -Clearing Account 1-05101-05101-391206 BSP/CNB-Indigenous Affairs Scholarship 600,330.73 575,549.97 Pay Loan-FAB 24,820.76 169,295.19 In addition the Ministry’s state revenue included loans recovered from the students in 2015 amounting to $24,820.76 whilst the scholarship administration has been transferred to the Tertiary Scholarships and Loans Board in 2014.
According to the Ministry, the Scholarship Unit administrating the loan recovery was reorganized after the transfer of the scholarship administration to the TSLB and the officers are no longer available to provide or update the bond recovery records.

Failure to transfer the bond recovery balances to the TSLB has resulted in the Ministry’s recording revenue which it is no longer required to collect.
Ministry of i-Taukei Affairs Section 05: Page 3 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Recommendations The Ministry should liaise:   with the Ministry of Economy to transfer the scholarship bond recovery balances from its general ledger to TSLB; and update TSLB on the loan recovered through its direct bank deposits.

Ministry’s Comments Attempts to transfer the bond recovery are underway.
The Ministry had consulted with the former Chief Accountant and continuous reminders have been sent through email to Ministry of Finance on the urgency of our request to transfer the Bond recovery to TSLB.

As at today nothing is forthcoming from MOE.

Another approach used was the request made for the Permanent Secretaries of the 2 Ministries to consult at their level, which PSTA has agreed to, a date to be drawn for this meeting.
5.5 Grants provided to i-Taukei Affairs Board Administering agencies must review each grant scheme each year to determine whether it is achieving its specified outcomes as efficiently and effectively as possible and, where it is not, must take action necessary to improve its efficiency and effectiveness.1 The Ministry disbursed a sum of $5,589,394 to iTaukei Affairs Board (Board) during the year 2015.
This sum comprised of payments for the operation of the Board, Provincial Councils and allowances for Turaga ni Koro and Mata ni Tikina.

Refer to Table 5.4 for details.

Table 5.4: Allocation of Funds to the Board Recipient iTaukei Affairs Board Provincial Councils Na Mata Turaga ni koro Allowance Mata ni Tikina Allowance Total Amount ($) 3,037,794 1,000,000 50,000 1,073,000 428,600 5,589,394 However, the Ministry received the acquittal from the Board in an “Excel worksheet” format only.
The Board did not provide supporting documents such as payment vouchers and invoices for the expenses.

The last audited account submitted by the Board to the Ministry was for the year ending 31/12/02.

While the Board has submitted its draft financial statements for years 2003 to 2007 to the Office of the Auditor General for audit in December 2014, draft accounts for years 2008 to 2015 are yet to be submitted for audit.

Refer to Table 5.5 for details.


1 Finance Instructions 2010 – Section 16 (6) Ministry of i-Taukei Affairs Section 05: Page 4 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Table 5.5: Details of Draft Financial Statements Pending from the Board Year Grant Amount ($) Latest update on Pending Audited Financial Statement from the Board Yet to be submitted to OAG for audit.
2008 2009 2010 2011 2012 2013 2014 2015 Total 14,547,214 15,751,046 16,448,918 14,612,936 13,393,168 11,938,243 4,122,000 5,589,394 96,402,919 In the absence of audited financial statements, the Ministry cannot evaluate whether funds provided to the Board was properly utilised for its intended purpose.
Recommendations The Permanent Secretary should:   follow up with the Board for the submission of outstanding draft financial statements for audit; and ensure that in absence of the audited financial account, the acquittal report provided by the Board are thoroughly verified by the Senior Accountant of the Ministry for assurance that funds were utilised for its intended purpose.

Ministry’s Comments The excel worksheet mentioned herein is only the summary of the individual payments done.
This is further detailed out in the General ledger listings that are normally attached with the whole acquittal report submitted to SAO –MAT by PAO –TAB for verification.

The copies of the 2015 payment vouchers for each disbursement stated in the acquittals are available for verification.

Going forward, copies of the payment vouchers will also be attached with the GL listings.

The backlog in the audit of the financial statements was inherited from past management.
The delay in the submission was also driven by the following: The manual system at the Provincial offices - - Non- availability of relevant records - No migration audit conducted during system migration Strategies now put in place by the Board to fast track preparation and submission of the financial statements: - Management’s current focus is on getting the audit up to date by 2018 for the Board and 2019 for the Provincial Councils.
- Manual system at the Provincial office has been reduced due to the introduction of FEC system.

- - Taskforce is formed and allocated a special room to focus on the preparation on the annual accounts.

The Board is processing the purchase of a new financial system as the current system (WINBIZ provided by Pro systems) is giving us a difficult time in ensuring timely production of financial statements.
Ministry of i-Taukei Affairs Section 05: Page 5 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017____________________________ Section 6 Ministry of Defence, National Security and Immigration Roles and Responsibilities this through The Ministry manages the nation’s security (a prerequisite to stability and peace) and delivers initiatives, programmes and projects on matters of national security and public order, man-made national crises and emergencies, defence, aerial surveillance, search and rescue operations, national day and other celebrations.
implementation ofpolicy formulation and the The Ministry is also responsible for immigration matters that include citizenship, detention and deportation, passports, visa, permit, border control, combat trafficking in person, refugee status determination and migration.

It also provides a coordinating role through the Defence and Security Forces Liaison Unit on policy matters for the two disciplined services in the Fiji police Force and Republic of Fiji Military Forces.
Table of Contents PART A: FINANCIAL STATEMENTS ................................................................................................................................. 1 6.1 6.2 6.3 6.4 Audit Opinion ............................................................................................................................................................... 1 Statement of Receipts and Expenditure ...................................................................................................................... 1 Appropriation Statement ............................................................................................................................................. 2 Trust Fund Account Statement of Receipts and Payments ........................................................................................ 3 PART B: AUDIT FINDINGS ................................................................................................................................................. 3 MINISTRY OF DEFENCE ........................................................................................................................................................... 3 6.5 Expenditure Not Budgeted For .................................................................................................................................... 3 DEPARTMENT OF IMMIGRATION ........................................................................................................................................... 4 6.6 6.7 6.8 Anomalies in Passport Records .................................................................................................................................. 4 Poor File Management System– Registry Office ........................................................................................................ 5 Delay in Bond Refunds ............................................................................................................................................... 7 PART A: FINANCIAL STATEMENTS 6.1 Audit Opinion The audit of the 2015 financial statement of the Ministry of Defence, National Security and Immigration resulted in the issue of an unqualified audit report.
6.2 Statement of Receipts and Expenditure The Ministry collected revenue amounting to $11,221,401 and incurred expenditure totalling $7,128,405 in 2015.Refer Table 6.1 for details.
Ministry of Defence, National Security and Immigration Section 06: Page 1 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017____________________________ Table 6.1: Statement of Receipts and Expenditure for 2015 Description RECEIPTS State Revenue Agency Revenue TOTAL REVENUE EXPENDITURE Operating Established Staff Government Wage Earners Travel and Communications Maintenance and Operations Purchase of Goods and Services Operating Grants and Transfers Special Expenditures Total Operating Expenditure Capital Expenditure Capital Construction Capital Purchases Total Capital Expenditure Value Added Tax TOTAL EXPENDITURE 2015 ($) 2014 ($) 11,174,929 46,472 11,221,401 10,118,787 51,396 10,170,183 4,178,502 308,732 321,520 549,157 1,077,042 30,826 348,933 6,814,712 --- --- --- 313,693 7,128,405 3,531,603 245,411 408,247 625,649 1,178,012 29,934 344,362 6,363,218 626,851 --- 626,851 379,456 7,369,525 Total revenue increased by $1,051,218or 10.3% in 2015 compared to 2014.
The increase is attributed to the increase in demand for Fiji passports.

Total expenditure decreased by $241,120 or 3.3% in 2015compared to 2014.

This was mainly due to reduction in cost related to travelling, communication, monitoring and control in purchases of fuel and oil, spare parts, maintenance of vehicles, stationery and printing.
6.3 Appropriation Statement The Ministry incurred expenditures totalling $7,128,405 against the revised budget of $7,152,924 resulting in a savings of $24,519.Details of expenditures against the budget estimates are provided in Table 6.2.
Table 6.2: Appropriation Statement for 2015 Actual Expenditure ($) Lapsed Appropriation ($) SEG Item Established Staff Government Wage Earners Travel & Communications Maintenance & Operations Purchase of Goods & Services Operating Grants & Transfers Special Expenditures Total Operating Costs Capital Expenditure Construction Purchase Budget Estimate ($) 4,503,482 243,842 180,930 466,837 1,020,872 34,200 394,061 6,844,224 Changes ($) (320,491) 66,811 143,558 87,727 52,843 --- (35,483) (5,035) Revised Estimate ($) 4,182,991 310,653 324,488 554,564 1,073,715 34,200 358,578 6,839,189 4,178,502 308,732 321,520 549,157 1,077,042 30,826 348,933 6,814,712 --- --- --- --- --- --- --- --- 4,489 1,921 2,968 5,407 (3,327) 3,374 9,645 24,477 --- --- Ministry of Defence, National Security and Immigration Section 06: Page 2 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017____________________________ SEG Item 13 Total Capital Expenditure Value Added Tax TOTAL EXPENDITURE Budget Estimate ($) --- 308,700 7,152,924 Changes ($) --- 5,035 --- Revised Estimate ($) --- 313,735 7,152,924 Actual Expenditure ($) Lapsed Appropriation ($) --- 313,693 7,128,405 --- 42 24,519 6.4 Trust Fund Account Statement of Receipts and Payments The Immigration Trust Fund Account records immigration bond received from permit holders.
Refer Table 6.3 for receipts and payments for the year ended 31/12/15.
Table 6.3: Trust Account Statement of Receipts & Payments for 2015 Description RECEIPTS Immigration Bond Received TOTAL RECEIPTS PAYMENTS Immigration Bond Payment TOTAL PAYMENTS Net Surplus Opening Balance as at 1 January Closing Balance as at 31 December 2015 ($) 2014 ($) 6,610,082 6,610,082 6,475,962 6,475,962 2,975,123 2,975,123 3,634,959 14,048,348 17,683,307 3,093,201 3,093,201 3,382,761 10,665,587 14,048,348 Net surplus increased by $252,198or 7% in 2015 compared to 2014as a result of increase in bond receipts during the year.
PART B: AUDIT FINDINGS MINISTRY OF DEFENCE 6.5 Expenditure Not Budgeted For Section 2.1.2 of the Ministry of Defence Finance Manual 2011 provides that no officer may incur expenditure, which results in the agency’s appropriation being exceeded without the authorization of the Ministry of Finance, pending approval by Cabinet.
The Ministry on 9/4/15 paid a sum of $ 9,615 to Naidu Building Works for painting works at the National War Memorial Museum at Nasese, Suva from its special expenditure allocation number 1- 06101-06101-070104.

However this expenditure was not allocated for in the Ministry’s budgetary allocation for the year 2015.

As a result the Ministry diverted funds without the approval of the Ministry of Finance as required under the Ministry’s Finance Manual.
Ministry of Defence, National Security and Immigration Section 06: Page 3 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017____________________________ Recommendations The Ministry should ensure that funds allocated are utilised for the intended purpose only and any transfer of funds by virement is approved by the Ministry of Finance.

Ministry’s Comments The Ministry acknowledges the findings of the Audit Team and the recommendation of the Auditor General as a way forward.
We do confirm that the amount mentioned above was sourced from the Remembrance Day Expenditure vote instead of the capital project funds under RIE.

We have noted the consequence of the oversight and assure that we shall vire funds from a saving account to the right allocation whereby expenditures can be incurred as suggested by the OAG.

Further, we shall incorporate this as an opportunity for improvement in the SOP that we anticipate to develop.
As part of planning, the Ministry shall also incorporate such processes into the IWP’s of the Accounts Officer and processing subordinates within the accounts section.

DEPARTMENT OF IMMIGRATION 6.6 Anomalies in Passport Records Reconciliation is a fundamental accounting process that confirms and documents that account balances are in agreement.

The total number of passports applications received shall equal to the total number of passport issued plus pending passport applications in process.
It was noted from the number of applications received, passports issued and damaged passports as recorded in IBMS system in 2015 that Department’s monthly report and TARDIS system were not in agreement.
Refer to Table 6.4 for details: Table 6.4: Reconciliation of Passports Activities IBMS Monthly Reports TARDIS Number of Application Received Number of Passports Issued Damaged/Missing Passports Variance 34,361 31,744 0 2,617 35,303 38,141 317 (2,521) 0 38,307 317 0 The findings indicate that the Passports section was not properly reconciling, monitoring and investigating variances of passports received and issued.
Recommendations The Department should:   implement adequate controls in its Passport section to ensure that passport records are properly maintained; ensure that number of passport applications receive is reconciled with the number of passports issued on a monthly basis; and Ministry of Defence, National Security and Immigration Section 06: Page 4 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017____________________________  investigate the variance between these application systems regarding the number passport application received and number of passport issued.
Appropriate action taken against the officers responsible to ensure these records reconciled.

Department’s Comments The Department acknowledges and concurs with OAG’s comments and recommendations.

 The Department has setup a control system whereby a register has been opened to maintain all applications received for all stations on daily basis.

 The Department is taking all necessary measures in reconciling the passports issued periodically.
 Yet again, in conjunction with ITC and Informatics, the Department is working on acquiring and implementing a software solution (one platform – from vetting to printing).

Once this solution is implemented, the reports will be generated by the system and all stages of passport processing will be captured.
The Passport section did another count and determined the following for 2015: Applications received 36,600 Less: Passports issued 38,258 Difference 1,658 The 1,658 comprise of: Pending applications 1,506 Damaged Books 76 (mechanical fault) Replacements 76 Total Difference 1,658   Pending applications are applications that were received in the previous year and issued in the current year and applications received in the current year and issued in the coming year.
An advertisement was placed in the details for applicants to collect their passports and the response has been very encouraging.

The damaged books are due to mechanical failure and the damaged books are to be replaced hence the extra 76 books.
6.7 Poor File Management System– Registry Office The Senior Accounts Officer is responsible for the effective design and operation of internal control of the agency.1 The Director Immigration must ensure that the agency internal control system is reviewed on a regular basis to ensure that they are meeting the intended purposes.2 Audit noted the following anomalies in relation to records maintained by the Department.
(i) The Departments Registry did not have adequate space for all visa related files as files for student permit, extension of permit applications and citizenship applications were kept with the Processing Officers around their workstations.

Refer to Figures 6.1 - 6.6 for illustration.


1Immigration Finance Manual 2013, Section 17.1.1 2Immigration Finance Manual 2013, Section 17.3.1 Ministry of Defence, National Security and Immigration Section 06: Page 5 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017____________________________ Figures 6.1 – 6.6: Evidence of how files are maintained by the Department.
Figure 6.1: Files stacked beside workstations the Figure 6.2: Files stacked on the floor inside the Registry Figure 6.3: Files neatly stacked on the counter Figure 6.4, 6.5 & 6.6: Improper maintenance of files that it is easily accessible to all staffs Since the files stacked beside the workstations of the processing officers are accessible to all staffs, there is risk of files or documents and confidential information in the files being tampered with, misplaced or leaked.
Recommendations The Department should ensure that:     appropriate spacing is allocated for safekeeping and maintenance of files files are stored in a secure location and accessible to authorized officers only an effective and efficient filling system is designed and implemented for registry Registry controls are strengthened for proper recording of file movements.
Department’s Comments The Department acknowledges and concurs with OAG’s comments and recommendations and below are explanations provided as follows:  The Department has taken proactive measures to minimize the problem of misplacement and lost files in the conduct of the overtime from 18/5/16 to 31/5/16 to improve the current system.

The files have been placed in alphabetical order for easy accessibility.
 The Department is focusing on an effective and efficient system for easy accessibility and safety in storage for files at a proper location within the Office.
Ministry of Defence, National Security and Immigration Section 06: Page 6 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017____________________________ 6.8 Delay in Bond Refunds The processing and endorsement/approval of all bond refund applications should not exceed two (2) weeks from the date the request is received.3 The Ministry collects bonds from foreigners who enter the country to work on work permit.
It was noted that the Ministry was not able to refund the bond within 2 weeks on several instances.

For several applicants the bond amounts were refunded after 2 weeks or 14 days.

Refer to Table 6.5 for details.
Table 6.5: Delays in Processing of Bond Refunds Name PSFS1301634 PWLN1301822 PWLS1301246 PWLN1301820 PWLN1503650 Date of Application for Bond Refund 23/10/15 17/11/15 17/11/15 27/11/15 2/11/15 Date Bond Refunded 29/12/15 30/12/15 30/12/15 30/12/15 4/12/15 Total Turnaround Time (days) 68 47 47 33 32 Delay in Bond Refund (Days) 54 33 33 19 18 The delay in processing was attributed to difficulty in locating and retrieving files from Registry with a lot of time taken and eventually impacted the turnaround time in processing applications by the Department.
Recommendation The Department should ensure that its turnaround times are within the set timelines.

Department’s Comments The Department acknowledges and agrees with OAG’s comments and will improve in the following areas;  Efforts have been made to process bond refunds within the set timelines.

The Registry is also clearing the inactive files to accommodate for the active files.
 The Department is implementing better vetting procedures so that all the required documents are collected at the time of lodgement for refund.
3 Bond Refund Processes, Section 6 Ministry of Defence, National Security and Immigration Section 06: Page 7 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Section 7 Ministry of Employment, Productivity and Industrial Relations Role and Responsibilities The Fijian Constitution guarantees every Fijian’s right to economic participation, a just minimum wage, and fair employment practices, which include humane treatment in the workplace and proper working conditions.
Government is committed to doing everything in its power to uphold these rights for workers across the country, while at the same time helping businesses grow and succeed.

The Ministry of Employment, Productivity and Industrial Relations is responsible for enacting policies and programs that support both of these aims.

The Ministry focuses on fostering strong relations between employees and employers, creating productive workplaces, combatting discrimination, and demanding fair working conditions.
It also works to help Fijians find jobs, especially the country’s young people, and to create healthy and safe work environments for all workers.
The significant increase in funding for the Ministry will support a number of new initiatives, which include a payment to Christmas Island veterans, more funding for workman’s compensation and the National Employment Centre, and the launch of a new Foreign Employment Service Table of Contents PART A: FINANCIAL STATEMENT .............................................................................................................................. 2 7.1 Audit Opinion ............................................................................................................................................................... 2 7.2 Statement of Receipts and Expenditure ...................................................................................................................... 2 7.3 Trust Statement of Receipts and Expenditure ............................................................................................................ 3 Occupational Health and Safety Trust Statement of Receipts and Expenditure .............................................. 3 Child Labour Unit Trust Statement of Receipts and Expenditure ..................................................................... 3 Employment Relations Agency Trust Statement of Receipts and Expenditure ................................................ 4 National Employment Centre Trust Statement of Receipts and Expenditure ................................................... 4 OHS Consultancy Services, Workmen’s Compensation and Wages DisputeTrust (WBC) Statement of Receipts and Expenditure ............................................................................................................................... 5 7.4 Appropriation Statement ............................................................................................................................................. 6 7.3.1 7.3.2 7.3.3 7.3.4 7.3.5 PART B: AUDIT FINDINGS
 ........................................................................................................................................... 6 7.5 Understated Established Staff Expenditure ................................................................................................................ 6 7.6 Unauthorized Use of Main Trust Fund Monies ............................................................................................................ 8 7.7 Pending Workmen’s Compensation Cases ............................................................................................................... 10 7.8 Unauthorised Transfer of Funds from VAT Allocation ............................................................................................... 11 7.9 Payment of VAT from Workmen’s Compensation Claims ......................................................................................... 12 APPENDIX 7.1: Details on Funds Transferred, Utilised and Unutilised ........................................................................ 13 APPENDIX 7.2: Payment of VAT for Workmen’s Compensation ................................................................................... 14 Ministry of Employment, Productivity and Industrial Relations Section 07: Page 1 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ PART A: FINANCIAL STATEMENT 7.1 Audit Opinion The audit of the 2015 accounts of the Ministry of Employment, Productivity and Industrial Relations resulted in the issue of a qualified audit report.
Refer to the qualifications below.

Statement of Receipts & Expenditures There were unauthorized credit entries totalling $685,735 in the Established Staff expenditure (SEG 1) where funds were transferred from VAT (SEG 13).

In addition, the Ministry did not refund unutilized trust fund monies credited into SEG 1 totalling $96,432.

Hence, the Established Staff expenditure is understated by $782,167 and VAT expenditure is overstated by $685,735 for the year ended 31 December 2015.
Similarly, various trust fund accounts have been understated by $96,432 as at 31 December 2015.

National Occupational Health & Safety (OHS) Education and Accident Prevention Trust Fund Account – Statement of Receipts and Payments Contrary to section 31 of the Occupational Health &Safety Act, payments totalling $360,491 were paid from the OHS Trust Fund Account for payment of salaries for staffs processing workmen’s compensation staff.
Thus, the closing balance of the OHS Trust Fund account is understated by $360,491.

7.2 Statement of Receipts and Expenditure The Ministry of Employment, Productivity and Industrial Relations collected revenue totalling $30 and incurred expenditure totalling $15,305,909 in 2015.
Table 7.1: Statement of Receipts and Expenditure for 2015 Descriptions 2015 ($) 2014 ($) RECEIPTS State Revenue Commission Total State Revenue Total Revenue EXPENDITURE Operating Expenditure Established Staff Government Wage Earners Travel & Communications Maintenance & Operations Purchase of Goods & Services Operating Grants & Transfers Special Expenditures Total Operating Expenditure Value Added Tax TOTAL EXPENDITURE 30 30 30 1,100 1,100 1,100 4,081,620 199,965 307,370 349,949 775,654 30,384 8,082,537 13,827,479 1,478,430 15,305,909 3,663,443 194,183 337,984 346,085 886,506 27,984 3,756,107 9,212,292 770,786 9,983,078 Ministry of Employment, Productivity and Industrial Relations Section 07: Page 2 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ The total expenditure increased by $5,322,831 or 53% in 2015 compared to 2014 mainly due to increase in Established Staff cost and Special Expenditure.
The increase in Established Staff expenditure was due to the transfer of salary and FNPF of the Minister to the Ministry of Employment, Productivity and Industrial Relations and increase in Employers FNPF contribution from 8% to 10%.

Major increase was also noted for Special Expenditure due to increase in the 2015 budget for National Employment Centre (NEC) by $176,722, FORES by $520,150, Christmas Island Veteran by $2,950,000 and Workmen compensation by $1,000,000.
7.3 Trust Statement of Receipts and Expenditure The Ministry of Employment, Productivity and Industrial Relations has five trust accounts: 1.

National Occupational Health & Safety Education and Accident Prevention 2.

Child Labour Unit Trust Fund (CLU) 3.

Employment Relations Agency (ERT) 4.

National Employment Centre (NEC) 5.


OHS Consultancy Services, Workmen’s Compensation and Wages Dispute 7.3.1 Occupational Health and Safety Trust Statement of Receipts and Expenditure The National Occupational Health &Safety Education and Accident Prevention Trust Account collected revenue totalling $1,925,298 and incurred expenditure totalling $1,409,169 in 2015.
Table 7.2: OHS Education and Accident Prevention Trust Statement of Receipts and Expenditure for 2015 Descriptions RECEIPTS OHS Trust Fund Total Receipts PAYMENTS OHS Trust Fund Total Payments 2015 ($) 2014 ($) 1,925,298 1,925,298 1,583,962 1,583,962 1,409,169 1,409,169 1,619,511 1,619,511 Net Surplus/ (deficit) 516,129 (35,549) Balance as at 1 January 4,725,808 4,761,357 Closing Balance as at 31/12/15 5,241,937 4,725,808 The total expenditure decreased $210,342 or 13% in 2015 compared to 2014 mainly due to decrease in expenses for the operation of the Occupational Health and Safety Trust within the Ministry.
These include health and safety education or training or research; and ensuring or promoting the health safety of persons at workplaces.

7.3.2 Child Labour Unit Trust Statement of Receipts and Expenditure The Child Labour Unit Trust Account collected revenue totalling $10,995 and incurred expenditure totalling $4,566 in 2015.
Ministry of Employment, Productivity and Industrial Relations Section 07: Page 3 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Table 7.3: CLU Trust Statement of Receipts and Expenditure for 2015 Descriptions RECEIPTS CLU Trust Fund Total Receipts PAYMENTS CLU Trust Fund Total Payments Net Surplus 2015 ($) 2014 ($) 10,995 10,995 51,276 51,276 4,566 4,566 30,399 30,399 6,429 20,877 Balance as at 1 January 977 (19,900) Closing Balance as at 31/12/15 7,406 977 The total expenditure decreased by $25,833 or 85% in 2015 compared to 2014 mainly due to the decrease in expenses for the operation of the Child Labour Unit within the Ministry.
7.3.3 Employment Relations Agency Trust Statement of Receipts and Expenditure The Employment Relations Agency Trust Account collected revenue totalling $231,702 and incurred expenditure totalling $3,448 in 2015.
Table 7.4: ERT Trust Statement of Receipts and Expenditure for 2015 Descriptions RECEIPTS ERT Trust Fund Total Receipts PAYMENTS ERT Trust Fund Total Payments 2015 ($) 2014 ($) 231,702 231,702 148,992 148,992 3,448 3,448 216,835 216,835 Net Surplus 228,254 (67,843) Balance as at 1 January 107,611 175,454 Closing Balance as at 31/12/15 335,865 107,611 The total expenditure decreased by $213,387 or 98% in 2015 compared to 2014 mainly due to the decrease in expenses for the operation of the Employment Relations Agency within the Ministry.
7.3.4 National Employment Centre Trust Statement of Receipts and Expenditure The National Employment Centre Trust Account collected revenue totalling $47,307 and incurred expenditure totalling $353,425 in 2015.
Ministry of Employment, Productivity and Industrial Relations Section 07: Page 4 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Table 7.5: NEC Trust Statement of Receipts and Expenditure for 2015 Descriptions RECEIPTS NEC Trust Fund Total Receipts PAYMENTS NEC Trust Fund Total Payments 2015 ($) 2014 ($) 47,307 47,307 33,649 33,649 353,425 353,425 22,958 22,958 Net (Deficit)/Surplus (306,118) 10,691 Balance as at 1 January 501,475 490,784 Closing Balance as at 31/12/15 195,357 501,475 The total expenditure increased by $330,467 or 1,439% in 2015 compared to 2014 mainly due to use of $350,000 to cater for salary and FNPF contribution for staffs working in Foreign Employment Services (FORES) .
7.3.5 OHS Consultancy Services, Workmen’s Compensation and Wages Dispute Trust (WBC) Statement of Receipts and Expenditure This account comprises of Wages Disputes, Workmen’s Compensation and OHS Consultancy.

The WBC Trust Account collected revenue totalling $6,179,023 and incurred expenditure totalling $5,808,446 in 2015.
Table 7.6: WBC Trust Statement of Receipts and Expenditure for 2015 Descriptions RECEIPTS Workmen’s Compensation Wages Dispute OHS Consultancy Total Receipts PAYMENTS Workmen’s Compensation Wages Dispute OHS Consultancy Total Payments 2015 ($) 2014 ($) 4,189,213 562,328 1,427,482 6,179,023 3,332,077 825,166 1,882,484 6,039,727 3,963,750 644,541 1,200,155 5,808,446 3,161,788 690,059 1,993,836 5,845,683 Net Surplus 370,577 194,044 Balance as at 1 January 954,218 760,174 Closing Balance as at 31/12/14 1,324,795 954,218 The total expenditure decreased by $37,237 or 0.6% in 2015 compared to 2014.
Expenses incurred were mainly for workmen’s compensation, wages dispute and OHS Consultancy services.

Ministry of Employment, Productivity and Industrial Relations Section 07: Page 5 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________  Workmen’s compensation – compensation that is paid to workmen and their dependents are deposited in the trust account before it is paid to them.

 Wages dispute – relates to arrears of wages owed by employers to employees.
Monies paid by employers are deposited in the trust account before it is paid out to claimants.

 OHS consultancy – Overtimes and allowances paid by employers (other entities inspected) are deposited into the trust account and is later paid out to OHS officers.

7.4 Appropriation Statement The Ministry of Labour, Industrial Relations and Employment incurred expenditure totalling $15,305,909 in 2015 against the revised budget of $15,734,709 resulting in a savings of $428,800.
Details of expenditures against the budget estimates are provided in Table 7.7.
Table 7.7: Appropriation Statement for 2015 SEG Item Established Staff Government Wage Earners Travel & Communications Maintenance & Operations Purchase of Goods & Services Operating Grants & Transfers Special Expenditures Total Operating Expenditure Value Added Tax TOTAL EXPENDITURE Budget Estimate ($) 4,120,737 199,971 272,450 317,300 849,900 55,000 8,437,651 14,253,009 1,481,700 15,734,709 Changes ($) (20,000) --- 53,858 36,057 (5,190) (24,615) (40,110) --- --- --- Revised Estimate ($) 4,100,737 199,971 326,308 353,357 844,710 30,385 8,397,541 14,253,009 1,481,700 15,734,709 Actual Expenditure ($) Lapsed Appropriation ($) 4,081,620 199,965 307,370 349,949 775,654 30,384 8,082,537 13,827,479 1,478,430 15,305,909 19,117 6 18,938 3,408 69,056 1 315,004 425,530 3,270 428,800 PART B: AUDIT FINDINGS 7.5 Understated Established Staff Expenditure Journal vouchers shall be used to correct accounting errors and make other required transfers between accounts.
1 Each year the Appropriation Act and the Budget Estimates set out details of the appropriations that Cabinet approves for spending by each agency.
No officer may incur expenditure, which results in the Agency’s appropriation being exceeded without the proper authorization of the Ministry of Finance, pending approval by Cabinet.2 The Permanent Secretaries of agencies may authorise the transfer of budgeted funds as follows -(a) out from SEG 1 or 2 (Established and Unestablished Staff) but shall not transfer funds into SEG 1 or 23.
It was noted that during the year, the Ministry transferred funds totalling $685,735 from VAT SEG 13, and utilised Trust Fund monies transferred into SEG 1 totalling $96,432.09.

Refer to tables below and Appendix 7.1 for details of transfer.
1Ministry of Labour, Industrial Relation & Productivity Finance Manual 2013 Section 15.1.1 2Finance Instructions 2010 section 7 3Financial Instruction 2010, Section 10(1)a Ministry of Employment, Productivity and Industrial Relations Section 07: Page 6 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Table 7.8: Transfer of funds from SEG 13 to SEG 1 Journal voucher Amount ($) Funds transferred from (VAT) SEG 13 expenditure Expenditure account credited (Established Staff) Journal Voucher narration JV 84/12 17,590.00 1-07102-91011-130101 1-07102-91011-010101 20,138.00 1-07103-91011-130101 1-07102-91011-010101 Being adjustment of overspending in SEG 1 JV 89/12 JV 88/12 Total 484,715.00 1-07101-07101-130101 163,292.00 1-07102-07101-130101 685,735.00 1-07102-91011-010101 1-07102-91011-010201 Adjustment of overspending in Activity 2 Table 7.9: Trust Fund Account Monies used to Pay Established Staff Costs Allocation Description Amount Unutilised ($) Comments Occupational Health and Safety (OHS) Consultancy Services National Occupational Health and Safety Education and Accident Prevention Trust Fund National Employment Centre (NEC) Trust Fund 6,876.53 Surplus of funds paid into SEG 1 expenditure but was not retired back to the Trust at the end of the year.
(11,327.38) 100,882.94 Surplus of funds paid into SEG 1 expenditure but was not retired back to the Trust at the end of the year.

Total 96,432.09 Transferring of funds from Trust Fund account and VAT expenditure have understated the Established Staff expenditure by $782,167.09 for the year ended 31/12/15.

Recommendations The Ministry should:   ensure to comply with its Finance Manual Section 15.1.1 at all times.

further investigate this matter and take appropriate action.
Management Comments We will strictly abide by your recommendation in the future.

VAT allocation will not to be used to cover for salary.

Secondly, all unutilised funds transferred to SEG 1 will be return to the appropriate account.

In addition please note that this is not the first time the Ministry have journalised from Vat allocation.

Auditors in the past have not raised this issue during the audit.
Furthermore in 2014, the Ministry of Employment Productivity and Industrial Relations has an unqualified report from Office of the Auditor General however $202,830 was transfer from VAT to Personal Emoluments.

However, we will strictly follow your recommendation in the future.
Senior Accounts officer to be investigated Ministry of Employment, Productivity and Industrial Relations Section 07: Page 7 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ 7.6 Unauthorized Use of Main Trust Fund Monies The National Occupational Health and Safety Service were responsible for the promotion of OHS and enforcement of the Health and Safety at Work Act 1996 and its subsidiary legislations and the Workmen’s Compensation Act (Cap.
94).4 The funding approved by the National OHS Board was to serve the purpose of the project only and the Ministry should not deviate to use fund to pay acting allowances to project officers identified to act on established line posts.
Further, the Ministry should be aware that if established posts continue to remain unfunded, then it should only wait until funding is approved and the posts are filled procedurally”5 The Commission at its meeting held on 16/12/11 approved the creation of ten (10) new project positions for the Workers Compensation Service, with effect from 16/12/2011 to 31/12/2012.
The project is granted on the understanding that funding for the project would be met from the OHS Trust Fund.6 The money standing to the credit of the Fund may be applied by the Minister, on the advice of the Board for the purposes of- a) Health and safety education or training or research ; and b) Ensuring or promoting the health safety of persons at work places.7 The audit noted that the Ministry transferred amount totalling $360,490.92 from National Occupational Health and Safety Education and Accident Prevention Trust fund to pay salaries for staffs working for Workmen Compensation Unit contrary to Health and Safety Act at Work Act Section 1996 section 31.
Refer to Table 7.10 below for details: Unauthorized Use of Trust Fund Account to Pay Workmen Compensation Staff Table 7.10: Salaries Receipt Number Transferred from Transferred to 860877 OHS Trust ( 9-07101-07006-895030) OHS Trust ( 9-07101-07006-895030) 861148 OHS Trust (9-07101-07006-895030) OHS Trust (9-07101-07006-895030) 861145 OHS Trust (9-07101-07006-895030) SEG 1 (1-07103-91011-010101) SEG 1 (1-07103-91011-010201) SEG 1 (1-07103-91011-010101) SEG 1 (1-07103-91011-010201) SEG 1 (1-07103-91011-010101) SEG 1 (1-07103-91011-010201) Amount ($) 75,653.00 7,565.30 34,523.05 3,452.30 217,542.97 Comments Transfer for Doctors pay employed by Workmen compensation Unit for 2nd year contract.
Upgrade of Salary for the14 Labour Inspectors from Work Compensation as from $13,191 to $16,134.

from funds National Transfer Occupational Health and Safety Education and Accident Prevention Trust Fund to SEG 1 cater for salary and FNPF contribution for 5 Assistant Labour Officers and 10 Labour Inspectors Workmen from Compensation to clear backlog cases.
Total 21,754.30 360,490.92 4 Annual Corporate Plan 2015 – Page 12 5 PSC Letter dated 01/05/2007, reference 29/77-05 6PSC Letter dated 20/12/2011- Reference: 29/299/64 7 Section 31 of Health and Safety at Work Act 1996 Ministry of Employment, Productivity and Industrial Relations Section 07: Page 8 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ The use of OHS Trust Fund money to pay for Workmen Compensation indicates unauthorized use of OHS Trust Fund account monies.
Recommendations The Ministry should:   ensure that OHS Trust Funds are used for its intended purpose only.

ensure that Trust Funds expenses are met from its own Trust Fund instead of using funds from other Trust Fund account to meet operational expenditures.
Management Comments Brief Background Section 31 of the Health and Safety at Work Act of 1996 stated the money standing to the credit of the Fund may be applied by the Minister, on the advice of the Board, for the purpose of: a) Health and safety education or training or research: and b) ensuring or promoting the health and safety of person at workplaces.

Section (b) of the OHS Act 1996 stipulates that the purpose of the fund is to ensure the health and safety of a person at workplaces.
When workplace health and safety are breached resulting in injuries or death to workers, the Workman Compensation staff normally comes in to ensure social justice is provided to workers and their dependents.

The approval to use OHS Trust Account for the payment of Workman Compensation staff was approved back in 2010 by Public Service Commission.
The National Occupational Health and Safety Advisory Board (NOHSAB) the governing body for all OHS Policy, Administrative & Finance issued had approved that the salaries of the Workman Compensation staff with the endorsement of the Minister.

The Ministry’s National Occupational Health and Safety Service (NOHSS) is responsible for the enforcement of the Health and Safety at Work Act 1996 and its subsidiary legislation and the Workman Compensation Act (Cap 98).
The activities of the NOHSS are based on the ‘duty of care’ principles and facilitate the promotion of a proactive OHS risk management culture which emphasised the creed that those who create the risk in the work place and those who work with them have the primary responsibility to solve them.

NOHSS has comprised the following five (5) specialised units: I.

Training, Accreditation, Chemical and Hygiene (TACH) II.

Capital project and Information Technology (CPIT) III.

Risk Engineering (RE) IV.


Field Operation (FO) V. Workers Compensation (WC) Way Forward.

Due to the concerns raised regularly by NOHSAB members on the utilization of the OHS Trust Fund to pay for salaries, another submission was made to the Ministry of Finance on the proposal to regularize all Project positions including doctor’s position into line-posts in the 2016-2017 budget submission.This was approved.
Please note that Workers compensation does not have a Trust Account to meet the operation cost of recruiting Project officers.

Ministry of Employment, Productivity and Industrial Relations Section 07: Page 9 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ 7.7 Pending Workmen’s Compensation Cases The Workmen’s Compensation Act (Cap.
94) places on employers the legal responsibility to compensate workers who sustain injuries and contract diseases out of or in the course of their employment.

The actual compensation is through monetary payments and medical care provisions for the workers.

In cases involving the death of workers, compensation is paid to the dependents of the deceased.

[1] The Workmen’s Compensation Unit of the Ministry is tasked with facilitating the above requirement.
As at 31/08/16, a total of 1,734 compensation claims registered with the Workers Compensation Unit were yet to be resolved.

Of these unsettled claims, 14 claims were registered during the period 2001 to 2009 whilst 1,104 claims were registered during the period 2010 to 2014 and 616 cases relating to 2015 onwards.

Altogether there are 1,734 cases pending with the Workers Compensation Unit.

Refer to Table 7.11 below for details.


Table 7.11: Death and Injury Pending Cases Year 2001-2009 2010-2014 2015 on wards Total Death Cases 5 276 71 352 Injury Cases 9 860 602 1,471 Total Cases 14 1,136 673 1,823 Cases with ERT 14 32 57 103 Total Cases Pending with Worker’s Compensation Section 14 1,104 616 1,734 Delays in the settlement of cases are attributed to the length of time taken in concluding findings for the various stages of the resolution process.
Deliberations at each stage of the process are dependent on various circumstances such as the ability to investigate a claim, determining compensability, availability of information (i.e.

witnesses may no longer be available or key evidence may not be preserved), court decisions, insolvent employers, etc.

In addition, audit noted that with the length of time taken to process or finalise claims, some claimants have lost out on compensation as employers/companies have wound up and ceased their operations.
Having an efficient resolution process ensures that workers or their dependents are fairly compensated for any loss of working capacity arising from injury, disability, work related disease, or death in a timely manner.
Recommendations The Ministry should:  make efforts in resolving compensatory claims at the earliest;  review its claims and settlement processes to facilitate the accomplishment of substantial justice in all cases expeditiously; and  create awareness amongst employers and the workforce regarding the importance of reporting /submitting claims promptly.
Management Comments To continually improve its service delivery, the Ministry has implemented the following strategies: [1] MLIRE ACP 2013 – National Occupational Health & Safety Service (NOHSS) – Section iv Ministry of Employment, Productivity and Industrial Relations Section 07: Page 10 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ The Unit has documented all its systems and processes and has been ISO 9001: 2008 certified in July 2015, where processing of cases are clearly indicated in the relevant Standard Operating Procedures’ for officers to follow, together with the timeframes.
A full time medical assessor is now based with the Ministry to carry out final assessment for injured workers and providing medical opinions for death cases.

In addition, approximately 130 medical doctors have been trained on Impairment Assessment; Employers’ are being prosecuted in the Employment Relations Tribunal for failing to pay compensation to injured workers and dependants of deceased workers.
The Unit is collaborating with the Training Accreditation Chemical & Hygiene (TACH) Unit in conducting workers compensation awareness sessions as part of the OHS Trainings for both the private and public sectors, On the three cases highlighted in the report following their winding up orders, these are some of the challenges currently faced when working with this out-dated piece of legislation.
To address the issue, the Ministry is consulting with the tripartite partners on the need to complete the labour reforms and introduce a modern legislation that will be conducive towards quick resolution of cases.

7.8 Unauthorised Transfer of Funds from VAT Allocation Each year the Appropriation Act and the Budget Estimates set out details of the appropriations that Cabinet approves for spending by each agency.
No officer may incur expenditure, which results in the agency’s appropriation being exceeded without the proper authorization of the Ministry of Finance, pending approval by Cabinet.8 The audit noted that on 15/01/15, the Ministry transferred amount totalling $21,433.47 from SEG 13 VAT to OHS Consultancy Trust Account to reimburse allowances paid to National Employment Centre in 2014 from OHS Consultancy Main Trust Fund Account9.
Refer to Table 7.12 below for details: Table 7.12: VAT Funds Used To Reimburse OHS Consultancy Date Cheque Number Trust Fund Receipt Number Transfer from VAT Transfer to OHS Consultancy Trust Account Amount ($) 15/01/15 37436 443402 1-07101-07101-130101 9-07101-07005-895004 21,433.47 Transferring of funds from SEG 13 to Trust Fund and Established Staff expenditure for the payment of salaries has overstated VAT expenditure for the year ended 31/12/15.
Recommendation The Ministry must ensure that funds are used for the purpose it is intended for.

Management Comments A payment was made from National Employment Centre budgetary allocation amounting to $164,323.30on 22 nd January 2015 to refund the amount that was used to facilitate payment for NEC allowances when the budgetary allocation was inadequate towards the end of 2014.

This is a normal payment from the Operating funds (SEG 7) and it is our understanding that VAT should be charged accordingly.
We will seek Ministry of Economy clarification in future in this scenario arises again.

8Finance Instructions 2010 section 7 9Minute dated 18/01/16 – Reimbursement for Payment Ministry of Employment, Productivity and Industrial Relations Section 07: Page 11 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ 7.9 Payment of VAT from Workmen’s Compensation Claims The supplies of goods and services listed in this schedule shall be exempt from tax.
The supply of financial services, where that supply is not a zero-rated supply in terms of the Second Schedule to this Decree consisting of indemnity payments of insurance against loss of earnings, being earnings within the meaning of the Workmen‘s Compensation Act (Cap.94).10 Contrary to VAT Decree 1991, first schedule, exempt supplies section 1(b) (iii), the audit noted that the Ministry made VAT payments totalling $236,136.69 for payment of workmen’s compensation claim.
Refer to the Appendix 7.2 for details.

The above findings indicate breach of VAT Decree first schedule, exempt supplies section 1(b) (iii).

Recommendation The Ministry should ensure that payment of workmen’s compensation claims does not include VAT.

Management Comments VAT was charged to Workers Compensation payment since the budget was provided by Ministry of Finance in the 2015 Budget Estimate.

The Ministry has sought clarification with FRCA Officials and have been advised accordingly.
Your recommendation will be strictly followed.
10VAT Decree 1991 First Schedule 1 (b) (iii)-page 113 Ministry of Employment, Productivity and Industrial Relations Section 07: Page 12 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ APPENDIX 7.1: Details on Funds Transferred, Utilised and Unutilised Allocation Transferred from Allocation Number Particulars Amount Transferred Plus Salary Upgrade 9-07101-07005-895004 Occupational Health and Safety (OHS) Consultancy Services Occupational Health and Safety (OHS) Consultancy Services Transfer funds from OHS Consultancy Services Trust Fund to SEG 1 and FNPF contribution cater for salary for 6 project officers from Workmen Compensation unit.
Transfer funds from OHS Consultancy Services Trust Fund to SEG 1 cater for salary and FNPF contribution for 17 OHS project officer’s salaries.
National Occupational Health and Safety Education and Accident Prevention Trust Fund Total 9-07101-07006-895030 National Occupational Health and Safety and Education Accident Prevention Trust Fund National Employment Centre (NEC) Trust Fund National Employment Centre Trust Fund 9-07101-07009-895040 (NEC) Transfer funds from National Occupational Health and Safety Education and Accident Prevention Trust Fund to SEG 1 cater for salary and FNPF contribution for 5 Assistant Labour Officers and 10 Labour Inspectors from Workmen Compensation to clear backlog cases.
Transfer funds from National Occupational Health and Safety Education and Accident Prevention Trust Fund to SEG 1 to upgrade salary and FNPF contribution for 14 Workmen Compensation staff from $13,191 to $16,134 backdated till 01/03/15.

Total Transfer funds from NEC Trust Fund to SEG 1 cater for salary and FNPF contribution for 18 NEC Foreign employment services.
- - ($) ($) 87,060.60 332,603.11 419,663.71 239,297.27 Total Amount Transferred to SEG 1 ($) Amount Paid Out Amount Unutilised ($) ($) 87,060.60 103,336.40 (16,275.80) 332,603.11 309,450.78 23,152.33 419,663.71 412,787.18 6,876.53 Comments paid from $6,876.53 is the surplus of the funds paid into SEG 1 as at 31/12/15.

From the total of $419,663.71 the OHS Consultancy Services Trust Fund, only $412,787.18 was used to pay its project staff.
The surplus of $6,876.53 paid into SEG 1 expenditure should have retired back to the OHS Consultancy Services Trust Fund at the end of the year but there were insufficient funds available in SEG 1 to facilitate the transfer.
239,297.27 253,335.84 - 37,975.35 37,975.35 35,264.16 (14,038.57) From the total of $277,272.62 paid from National Occupational Health and Safety Education and Accident Prevention Trust Fund, $37,975.35 was used to pay increment of Trust Fund project officers pay and Workmen Compensation project staffs.

Additional funds from SEG 1 Budget was utilised to meet the shortfall.
$253,335.84 2,711.19 for 239,297.27 37,975.35 277,272.62 288,600.00 (11,327.38) 350,000.00 - 350,000.00 249,117.06 100,882.94 from expenditure $350,000 was receipted and credited into National SEG1 Employment Centre (NEC) Trust Fund.
After the payment of NEC project staffs salaried amounting to $249,117.06 the surplus fund of $100,882.94 was not retired back to the National Employment Centre (NEC) Trust Total 1,008,960.98 37,975.35 1,046,936.33 950,504.24 96,432.09 Ministry of Employment, Productivity and Industrial Relations Section 07: Page 13 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015____________________________ APPENDIX 7.2: Payment of VAT for Workmen’s Compensation Date Payment Voucher VAT Amount Paid ($) 16/01/2015 23/01/2015 26/01/2015 03/02/2015 03/02/2015 03/02/2015 03/02/2015 03/02/2015 03/02/2015 03/02/2015 03/02/2015 03/02/2015 03/02/2015 03/02/2015 03/02/2015 03/02/2015 03/02/2015 03/02/2015 03/02/2015 03/02/2015 03/02/2015 03/02/2015 03/02/2015 10/02/2015 12/03/2015 25/03/2015 25/03/2015 25/03/2015 25/03/2015 25/03/2015 25/03/2015 25/03/2015 25/03/2015 25/03/2015 25/03/2015 25/03/2015 25/03/2015 31/03/2015 29/06/2015 29/06/2015 29/06/2015 29/06/2015 07/07/2015 07/07/2015 07/07/2015 07/07/2015 07/07/2015 07/07/2015 07/07/2015 07/07/2015 07/08/2015 07/08/ Ministry of Labour, Industrial Relations & Employment Section 07: Page 14 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2015____________________________ Date
 Payment Voucher VAT Amount Paid ($) 07/08/2015 07/08/2015 07/08/2015 14/09/2015 14/09/2015 14/09/2015 14/09/2015 14/09/2015 14/09/2015 14/09/2015 14/09/2015 14/09/2015 11/10/2015 11/10/2015 11/10/2015 11/10/2015 11/10/2015 11/10/2015 11/10/2015 11/10/2015 11/10/2015 17/10/2015 17/10/2015 Total Ministry of Labour, Industrial Relations & Employment Section 07: Page 15 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI –MARCH 2017 ____________________________ Section 8 Ministry of Foreign Affairs Role and Responsibilities The Ministry of Foreign Affairs promotes Fijian interests in other nations and on the world stage.
This includes a broad range of activities from providing consular services to Fijians living overseas to from organizing high-level visits to Fiji.

The Ministry develops and carries out Fiji’s foreign policy and manages Fiji’s relationships with other nations and with multi-national and sub-regional organizations like the United Nations and the Melanesian Spearhead Group.

The Ministry is focused on securing the maximum benefits for Fiji from these relationships.
Table of Contents PART A: FINANCIAL STATEMENT..................................................................................................................................... 1 8.1 Audit Opinion ............................................................................................................................................................... 1 8.2 Statement of Receipts and Expenditure ...................................................................................................................... 2 8.3 Appropriation Statement .............................................................................................................................................. 3 PART B: AUDIT FINDINGS .................................................................................................................................................. 3 8.4 Unreconcilied Variance in Overseas Mission Bank Account ....................................................................................... 3 8.5 Reconciliations not prepared/provided for audit .......................................................................................................... 5 8.6 Board of Survey Report not carried out ....................................................................................................................... 6 8.7 Non Clearance of Remittance between Chests Balance ............................................................................................ 7 8.8 Representation Allowance Claims Not Adequately Supported ................................................................................... 8 8.9 Anomalies Noted in Allowance Paid to First Secretary for Brazil Mission ................................................................... 8 8.10 Incorrect Remuneration Payment of Post Allowances .............................................................................................. 10 8.11 Manual Payments not Updated in the Payroll System
 .............................................................................................. 11 8.12 Payroll Reconciliations not Up to Date ...................................................................................................................... 11 8.13 Anomalies in Overseas Travel .................................................................................................................................. 12 8.14 Revenues Collected by Overseas Missions .............................................................................................................. 15 8.15 Unbudgeted Expenditure – Head Quarters ............................................................................................................... 16 8.16 Significant Amount of Unretired Accountable Advance ............................................................................................. 17 APPENDIX 8.1: APPENDIX 8.2: APPENDIX 8.3: APPENDIX 8.4: Representation Allowance Claims Not Adequately Supported ........................................................ 20 Examples of Manual Payment Not Updated in the Payroll System ................................................. 22 Examples of Revenue Collected by Overseas Mission and not Deposited in the Consolidated Trust Fund ............................................................................................................................................. 23 Outstanding Advances to Officer’s and Ministries/Department ...................................................... 24 PART A: FINANCIAL STATEMENT 8.1 Audit Opinion The audit of the 2015 accounts of the Ministry of Foreign Affairs resulted in the issue of a qualified audit report.
The basis of qualification was as follows:  The Ministry’s Remittance between Chests (RBC) account to facilitate remittance to Fiji Overseas Mission showed a credit balance of $1,394,547 as at 31 December 2015 without making necessary Ministry of Foreign Affairs Section 08: Page 1 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI –MARCH 2017 ____________________________ adjustment to its expenditure and revenue allocation.
As such the accuracy of the expenditure and revenue recorded cannot be ascertained.

 The board of survey for eleven (11) out of eighteen (18) Fiji Mission Overseas office were not carried out contrary to section 49 (1) of the Finance Instructions 2010.

8.2 Statement of Receipts and Expenditure The Ministry collected revenue totalling $60,342 and incurred expenditure totalling $41,255,330 in 2015.

Refer to Table 8.1 for details of revenue collected and expenditure incurred during the year.
Table 8.1: Statement of Receipts and Expenditure for 2015 Description RECEIPTS State Revenue Operating Revenue Total State Revenue Agency Revenue Miscellaneous Revenue Total Agency Revenue TOTAL REVENUE EXPENDITURE Operating Expenditure Established Staff Government Wage Earners Travel & Communications Maintenance & Operations Purchase of Goods & Services Operating Grants & Transfers Special Expenditures Total Operating Expenditure Capital Expenditure Capital Construction Capital Purchase Total Capital Expenditure Value Added Tax TOTAL EXPENDITURE 2015 ($) 2014 ($) Total expenditure increased by $1,884,802 million or 5% in 2015 compared to 2014 mainly due to the following:  Established Staff costs increased by $1,366,805 or 12% compared to 2014.
This was attributed to increase in the employer’s FNPF contribution from 8% to 10%, filling of vacant positions and creation of new position;  Travel & Communications expenditure increased by $426,000 or 13% in 2015 compared to 2014 due to increase in travel and communication to expend and strengthen Fiji’ diplomatic relations;  Maintenance & Operations expenditure increased by $1,823,237 or 19% in 2015 compared to 2014 due to increase in rental expenditure and operating expenses for Overseas Missions Offices; Ministry of Foreign Affairs Section 08: Page 2 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI –MARCH 2017 ____________________________  Capital Purchase expenditure increased by $339,489 or 152% in 2015 compared to 2014 as a result of purchase of replacement furniture, electrical items and replacement vehicles for overseas missions.
8.3 Appropriation Statement The Ministry incurred expenditure totalling $41,255,330 in 2015 against the revised budget of $41,779,536 resulting in a savings of $524,206 or 1.2%.

Details of expenditure against the budget estimates are provided in Table 8.2.
Table 8.2: Appropriation Statement for 2015 SEG Item Budget Estimate ($) Changes ($) Established Staff Government Wage Earners Travel & Communications Maintenance & Operations Purchase of Goods & Services Operating Grants & Transfers Special Expenditures Total Operating Expenditure Capital Expenditure Capital Construction Capital Purchase Total Capital Expenditure Value Added Tax TOTAL EXPENDITURE 14,160,077 3,966,625 2,415,014 11,270,027 912,510 3,344,523 2,385,900 38,454,676 300,000 375,953 675,953 2,648,907 41,779,536 (1,357,941) (333,729) 1,389,743 320,555 (53,807) 262,997 70,960 298,778 (163,552) 152,490 (11,062) (287,716) --- Revised Estimate ($) a 12,802,136 3,632,896 3,804,757 11,590,582 858,703 3,607,520 2,456,860 38,753,454 136,448 528,443 664,891 2,361,191 41,779,536 Actual Expenditure ($) b 12,714,226 3,623,754 3,753,378 11,576,284 858,013 3,472,083 2,325,599 38,323,337 60,621 562,340 622,961 2,309,032 41,255,330 Lapsed Appropriation ($) (a-b) 87,910 9,142 51,379 14,298 690 135,437 131,261 430,117 75,827 (33,897) 41,930 52,159 524,206 PART B: AUDIT FINDINGS 8.4 Unreconcilied Variance in Overseas Mission Bank Account All bank accounts must be reconciled monthly.
The bank reconciliation shall list the outstanding cheques and other reconciling items and be signed and dated by the responsible officer.1 Unreconciled items must be investigated and resolved promptly.2 The PAO must verify balances in the bank reconciliation to the cashbook, bank statements, unpresented cheque list and the previous month’s bank reconciliation before certifying it.3 The overseas mission’s bank accounts facilitate the payment for mission expenditure and the transfer of monies from the consolidated fund account.
At the end of the month, the expenditure is journalised to respective expenditure allocation.

As at 31 December 2015, cash held in overseas missions’ bank accounts totalled $8,215,131.89.
However, an unreconciled variance of $3,374,748.80 was noted between the FMIS general ledger 1 Finance Instructions 2010, Section 32 (6) 2 Finance Instructions 2010, Section 58 (3) 3 Ministry’s Finance Manual 2013, Section 5.3.10 Ministry of Foreign Affairs Section 08: Page 3 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI –MARCH 2017 ____________________________ balance of $8,215,131.89 and the bank reconciliation for various mission accounts totalling $4,840,383.09.

Refer to Table 8.3 for details.
Table 8.3: Variance in Overseas Bank Reconciliation and General Ledger Account Number Missions Fiji Consulate General Sydney FHC Canberra FHC London Fiji Embassy Tokyo FHC Wellington FHC Beijing Fiji Mission Brussels FHC UN 1-08103-80102-510106 1-08103-80101-510107 1-08103-81001-510202 1-08103-80501-510401 1-08103-80701-510502 1-08103-80201-510504 1-08103-80301-510601 1-08103-81101-510801 1-08103-81102-510802 Washington FHC Geneva 1-08103-80407-510808 Fiji Embassy Abu Dhabi 1-08103-80405-510900 Fiji Embassy Korea 1-08103-80406-510901 Bank in Kular Lumpur 1-08103-80601-510901 Closing Balance for PNG 1-08103-80801-510902 FHC New Delhi 1-08103-80401-510903 Fiji Embassy Indonesia 1-08103-80402-510905 Fiji Embassy Brazil 1-08103-80403-510905 Fiji Embassy South Africa 1-08103-80404-510905 Total Overseas Bank Balances 1-08000-00000-510000 FMIS Balance as at 31/12/15 695,066.60 212,397.46 75,066.09 1,277,504.15 199,950.27 466,335.47 641,489.44 (38,936.12) 71,638.88 403,391.96 715,073.25 283,699.31 1,405,179.25 (104,115.54) 710,176.47 364,808.61 721,370.60 115,035.74 8,215,131.89 December Bank Reconciliation Balance 666,923.91 196,208.42 39,460.56 769,890.89 296,097.06 10,192.09 233,311.95 (173,884.63) 193,541.01 309,696.87 479,682.24 122,026.84 374,546.22 318,918.85 27,375.31 150,080.01 540,857.09 285,458.40 4,840,383.09 Variance 28,142.69 16,189.04 35,605.53 507,613.26 (96,146.79) 456,143.38 408,177.49 134,948.51 (121,902.13) 93,695.09 235,391.01 161,672.47 1,030,633.03 (423,034.39) 682,801.16 214,728.60 180,513.51 (170,422.66) 3,374,748.80 In addition, it was noted that Fiji High Commission in United Nation and Papua New Guinea had an overdrawn bank balance in the general ledger of $38,936.12 and $104,115.54, respectively for which satisfactory explanations were not provided by the Ministry.
As a result of the variance and overdrawn accounts, the audit could not ascertain the accuracy of the balances appearing under the above allocations in the FMIS general ledger.

Recommendations The Director Finance should ensure that:   overseas missions bank balance is reconciled with the FMIS general ledger bank balance on a monthly basis and any foreign exchange gain or loss is adjusted immediately; and overdrawn accounts should be undertaken.
investigated and necessary corrective measures Ministry’s Comments The Ministry has been working closely with FMIS Unit, MOE on these variances of General Ledger and bank reconciliations.

These variances have been accumulated over the years and an initiative by the Ministry will be to change the format of posting transaction of Missions acquittals in the FMIS General Ledger.
These new posting format will be effective from January 2016 which should see the demarcation of various missions Cash Accounts[seg 51] and aligning balances in bank reconciliations with General Ledger amounts.
Ministry of Foreign Affairs Section 08: Page 4 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI –MARCH 2017 ____________________________ 8.5 Reconciliations not prepared/provided for audit Reconciliation is an internal control mechanism established to ensure the accuracy of financial reports being produced.
The Accounting Head must verify all the reconciliations before signing and submitting it to Ministry of Finance.4 Each month, the Accounting Head must provide a signed and dated report to the Permanent Secretary to advice whether all reconciliations and check required in the agency’s Finance manual have been carried out.5 The audit noted that the Ministry failed to prepare and submit its monthly reconciliations for various underline accounts for the year 2015.
In some cases, reconciliations submitted were not properly certified or were incomplete Refer to Table 8.4 for details.
Table 8.4: Underline Accounts Balances without Reconciliations Allocation Description 1-08000-00000-570301 RFA (Advance) 1-08101-08101-536101 IDC 1-08101-08101-530301 Drawings 1-08103-80801-510902 Closing Balance for PNG FMIS Balance as at 31/12/15 ($) 48,335.54 --- (175,534.02) (104,115.54) 1-08000-00000-860000 Operating Trust (1,387,380.90) 1-08000-00000-840000 SLG 84 – Accounts Payable --- 1-08101-08101-538101 BLC --- Audit Remarks January Reconciliations for July to December 2015 were not provided to audit.
Reconciliation for December 2015 was not provided to audit.

Reconciliations to for December 2015 were provided to audit without being certified by the Principal Accounts Officer and the Acting Permanent Secretary.

to for Reconciliations December 2015 were provided to audit without being certified by the Principal Accounts Officer and the Acting Permanent Secretary.
January in reflected Also, the reconciliations for the months of September to December 2015 were not properly done as only the FMIS the balances were reconciliation.

Reconciliations the months of for August, September, October and December 2015 was not provided to audit.

Reconciliations for January to March 2015 were not provided to audit.

However, the reconciliations from April to December 2015 provided were not certified by the Principal Accounts Officer.
The audit findings reflect laxity of the Accounts Officer responsible for preparing these reconciliations.

4 Ministry’s Finance Manual 2013, Section 13.2.5 5 Finance Instructions 2010, Section 60 (1) (a) Ministry of Foreign Affairs Section 08: Page 5 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI –MARCH 2017 ____________________________ As a result, the audit was not able to ascertain the correctness of the balances reflected in the Ministry’s underline accounts.
Recommendation The Director Finance should ensure that monthly reconciliations for the underline accounts are prepared, signed and submitted for Permanent Secretary’s endorsement and submission to Ministry of Economy FMIS Unit on a timely manner.
Ministry’s Comments The Ministry is currently undertaking a reshuffle of duties or job rotation as a means of internal control measures as well as the need to uplift standard of financial reporting for the Ministry, for this, a two senior officers has been assigned to carry out and strictly monitor reconciliations for all accounts including those accounts for the Missions.

These initiatives are also monitored by the HOD [Director Finance] on weekly basis.
8.6 Board of Survey Report not carried out An annual board of survey must be conducted each year to verify the existence and condition of assets recorded on the asset register provided that, for agencies that have, in the opinion of the Permanent Secretary a large asset base, the board of survey to be conducted on a cyclical basis so that all assets are checked every year.6 The audit noted that the Ministry did not carry out the board of survey for the following missions and embassies for the year ended 31 December 2015.
 Fiji High Commission London;  Fiji Embassy Tokyo;  Fiji High Commission Wellington;  Fiji High Commission United Nations;  Fiji Embassy Washington;  Fiji High Commission Geneva;  Fiji Embassy Abu Dhabi  Fiji Embassy Korea;  Fiji High Commission Kuala Lumpur;  Fiji High Commission Papua New Guinea; and  Fiji High Commission New Delhi.

In addition, according to the Ministry, it carried out the board of survey for headquarters and there was no write offs.
However, audit was not provided with a copy of the board of survey report for Headquarters.

In the absence of board of surveys being carried out, it was not possible to determine that items purchased from public funds were in good physical condition and were being used for intended purpose.

In addition, the correctness of Statement of Losses (other than money) cannot be substantiated.
6 Finance Instructions 2010, Section 49 (1) Ministry of Foreign Affairs Section 08: Page 6 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI –MARCH 2017 ____________________________ Recommendation The Ministry should ensure that annual board of survey is properly planned and conducted each year.

Ministry’s Comments The Ministry is currently introducing an Asset Register System which is viewed not only for Headquarters but also in all Missions office across the globe.
On this new system, sections, divisions and missions should be able to record, update and prepare assets kept and further easily prepare Board of Survey report for a particular financial year.

A newly established section that comes under our Finance division is the Asset Management.

The section [Asset Management] will monitor and evaluate all assets under our ministry and will also work closely with our IT division in terms of accessing the new system.
The mentioned initiative is anticipated to alleviate queries on BOS.

8.7 Non Clearance of Remittance between Chests Balance Remittance Between Chests (RBC) account is used to facilitate remittance to Fiji Overseas Mission.

Ministries and Departments are to reconcile and clear their RBC by making necessary adjustment to its expenditure and revenue allocation.

A monthly reconciliation is to be prepared and forwarded to the Ministry of Economy.
At the end of the financial year, the RBC accounts should be cleared to allow the new postings in the next financial year.7 The audit noted that SAG 52 (RBC) account had a credit balance of $1,394,546.79 as at 31 December 2015 as the Ministry did not clear the RBC account balances on a monthly basis into those respective expenditure and revenue allocations.

The Ministry submitted a journal voucher on 26/4/16 to clear the above outstanding balance through audit adjustment.
However, the adjustments could not be passed as relevant supporting documents were not provided by the Ministry as at the date8 of audit.

Alternatively, the Ministry of Economy in consultation with the Ministry cleared the credit balance of $1,394,546.79 to the Equity Account instead of the respective revenue or expenditure allocations.

As a result, expenditures and revenues recorded in the Statement of Receipts and Expenditure for the Ministry for 2015 have been understated by $1,394,546.79.
Recommendations The Ministry should ensure that:   the RBC reconciliation is performed on a monthly basis and the balances are cleared to respective expenditure allocations; and journal voucher adjustments are fully supported with necessary supporting and relevant documents.

7 Ministry of Finance Circular No.


21/13, Section 3.5 8 13/05/16 Ministry of Foreign Affairs Section 08: Page 7 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI –MARCH 2017 ____________________________ Ministry’s Comments This RBC balance of $1.3million was not cleared due to format of General Ledger Posting format used.

However with the introduction of new format of posting as alluded in above should see the clearance of RBC account as payment is remitted to overseas accounts.
Note that this issue is also been resolved with Ministry of Economy through Journal Voucher entry and the account is now been zerorised for year 2015 through the Audit Adjustment period.

8.8 Representation Allowance Claims Not Adequately Supported “Representation allowance” is the costs to cover direct and necessary expenditures on official entertainment.
Officers other than the Head of Mission must account for two third of their representative allowance.9 The Officers other than the Head of Mission for Korea and Brazil Embassies claimed representation allowance on several occasions.

The audit noted that while all the claims were supported with receipts and invoices for the official lunch and dinners hosted, the Officers claiming the representation allowances failed to provide the reasons and the details of the person or the group that was hosted.
Refer to Appendix 8.1 for details.

The above indicates weak payment verification process both at the Missions and at the Headquarters which could result in misappropriation of public funds through fraudulent claims.
Recommendations The Ministry must ensure that:   all representation allowance claims are adequately supported with the relevant details of the person entertained, purpose of the meeting, and other documents supporting the expenditures incurred; and supervisory controls and checks at the Missions and Headquarters are strengthened.

Ministry’s Comments The recommendations are fully supported.

The Mission is advised to make a formal template detailing claims of the representation allowance.
This shall be endorsed by HOM or Senior Diplomat enclosing relevant documentations.

The details of allowances must also entail the 1/3 and 2/3 category respectively.
8.9 Anomalies Noted in Allowance Paid to First Secretary for Brazil Mission The Heads of Missions and officers posted overseas are entitled to post allowances set out in the Schedule 2 of Public Service Diplomatic and Consular Services Regulations.10 9 Public Service (Diplomatic and Consular Services) Regulations 2005 - Section 49 10 Public Service (Diplomatic and Consular Services) Regulations 2005 – Section 50 (1) Ministry of Foreign Affairs Section 08: Page 8 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI –MARCH 2017 ____________________________ Leave allowance is payable seven days before the qualifying date provided a written request is made to the Permanent Secretary for Finance through the respective Permanent Secretary or Head of Department at least three months immediately prior to the qualifying date.
The provisions do not apply to Contracted Officers.11 Audit review of leave allowance paid to First Secretary for the Brazil Mission revealed the following anomalies.

 The First Secretary was remunerated at a Counsellor’s rate for 17 days from 12/2/15 – 28/2/15 without any acting appointment resulting in an overpayment of post allowance of $410.23.

 The First Secretary was appointed in the Fiji Embassy in Brazil on three-year contract with effect from 28/7/11.
Since the First Secretary was appointed on contract, he was not entitled to leave allowance.

However, it was noted that the First Secretary was paid leave allowance for two leave tours ending on 22/3/12 and 22/3/15 totaling $1,760 in pay 7/2015.
 The Acting Permanent Secretary for Foreign Affairs in his letter dated 30/6/14 extended the First Secretary’s term and reminded him to utilize all his leave during the extended period of his term as he was not to be compensated for leave earned.12 However, the First Secretary did not utilized his leave but instead wrote to the Acting Permanent Secretary on 16/1/15 requesting for a compensation of the 20 days of annual leave due to him.
The First Secretary was granted approval for leave compensation for 20 days by the Acting Permanent Secretary without consultation with the Head of Mission.

However, he was compensated 31.5 days of annual leave by the Embassy amounting to $4,724.49 instead of only 20 days which was approved.

The findings show lack of due diligence checks by headquarters which resulted in incorrect payment of allowances.
Recommendations The Ministry should:   recover overpaid post allowance, leave allowance and leave compensation from the officer concerned; ensure that the supervisory checks at the Commission and Headquarters are strengthened to avoid such discrepancies.

Ministry’s Comments The compensation is in order and has been endorsed by A/PS.

The Permanent Secretary has also encouraged all staff to take leave to ensure that there is no annual leave accumulated.
11 General Order 2011 Section 707 (h) 12 Letter from Head Quarters to Ambassador regarding “Extension of Posting for First Secretary” dated 30/6/14 Ministry of Foreign Affairs Section 08: Page 9 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI –MARCH 2017 ____________________________ 8.10 Incorrect Remuneration Payment of Post Allowances The Heads of Missions and officers posted overseas are entitled to post allowances set out in the Schedule 2 of Public Service Diplomatic and Consular Services Regulations.13 The Fiji Embassy in Canberra has an authorized establishment of an Ambassador, a Counsellor in US04 salary grade, a First Secretary in salary grade SS01, a Second Secretary in salary grade SS02, a Second Secretary in salary grade SS03 grade and a Third Secretary.14 The location allowance, representation allowance and representation supplement allowance is to be disbursed at the rate for married officers only for periods during which his or her spouse is residing with him or her overseas.15 The following anomalies were noted in the payment of post allowances at Fiji High Commission in Canberra.
 The Counselor’s (EDP No.

61161) post allowance was $1,911.76 per fortnight.

However, she was paid post allowance at the High Commissioner’s rate for pay 20/2015.

Hence she was overpaid post allowance by $155.34 for pay 20/2015.

 The First Secretary’s (EDP No.

93741) post allowance was $2,353.63 per fortnight.

However, he was paid post allowance at Counselor’s rate for pays 13/2015 to pay 16/2015.

The First Secretary was overpaid post allowance for that period by $614.52.
 The Second Secretary’s (EDP No.

64071) spouse resigned from her employment with effect from 18/3/15.

He was entitled to claim post allowance at a married rate with effect from 18/3/15.

However, he was paid post allowance on a single rate up to 25/3/15.

Instead of paying the difference between married and single rate for the period 18/3/15 – 25/3/15, the Second Secretary was paid the full post allowance at married rate for the period.
Hence, the Commission overpaid the Second Secretary post allowance by $1,509.14.

The above indicates lack of supervisory checks at the Mission and headquarters which had resulted in overpayment of post allowances.

Recommendations The Ministry should:   recover overpaid post allowance from the respective Officers; and ensure that the supervisory checks at the Commission and Headquarters are strengthened to avoid such discrepancies.

Ministry’s Comments The recommendation has been supported.
It shall also be noted that strict monitoring process is undertaken by HQ as well as responsible staff at Mission in order to alleviate chances of any anomalies.
13 Public Service (Diplomatic and Consular Services) Regulations 2005 – Section 50 (1) 14 Public Service (Diplomatic and Consular Services) Regulations 2005 – Post Allowance for Australia (Canberra) 15 Public Service (Diplomatic and Consular Services) Regulations 2005 – Section 50 (3) Ministry of Foreign Affairs Section 08: Page 10 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI –MARCH 2017 ____________________________ 8.11 Manual Payments not Updated in the Payroll System No manual payment of salary is permitted except on or upon written approval from the PS Economy.16 The AAO Payments shall record the manual payment on the appropriate input form.
The form shall be used to update the payroll records in the automated payroll system to ensure that an employee’s true earnings are reflected at the end of the year.17 Audit review of salaries and wages payments revealed that the Ministry made several manual payments of salaries and wages during the year.

Out of the $64,907.18 of manual payments reviewed during audit, a total of $40,625.46 or 63% were not updated into the payroll system.

Refer to Appendix 8.2 for details.


The above indicates blatant disregard of the directive issued by the Ministry of Economy for approval of manual salary payments.

Recommendations The Ministry should obtain approval of Ministry of Economy before processing any manual payment.

Ministry’s Comments The recommendations are supported.

On way forward, an internal memo will be circulated within the agency reminding all staff that manual payments will be restricted ONLY to special cases.
Other than that, manual payments of remunerations will not be entertained.

Strict monitoring of payroll processes will be carried out by senior accounting officers to avoid any chances of manual payments.
8.12 Payroll Reconciliations not Up to Date The Accounting Head must ensure that payroll reconciliations are carried out fortnightly for salaries and weekly for wages and copies sent to the Ministry of Finance.18 Audit noted that the Ministry’s salaries and wages reconciliation for the financial year ending 31 December 2015 was not up to date.

The Ministry did not prepare the salaries reconciliations from pay 17/2015 to 26/2015 and wages reconciliations from pay11/2015 to 52/2015.
It was also noted that these reconciliations were not prepared in a timely manner and were delayed on average by 84 days.

Refer to Table 8.5 for delays in preparing salaries reconciliations.
Table 8.5: Delays in Preparing Salaries Reconciliations Pay No Pay Periods 1 1/1/15 – 14/1/15 Pay Date 8/1/15 Reconciliation Date 10/6/15 Days Delayed 152 16 Ministry’s Finance Manual 2013, Section 3.5.2 17 Ministry’s Finance Manual 2013, Section 3.5.4 18 Finance Instructions 2010 – Section 17 (7) Ministry of Foreign Affairs Section 08: Page 11 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI –MARCH 2017 ____________________________ Pay No Pay Periods 15/1/15 – 28/1/15 29/1/15 – 11/2/15 12/2/15 – 25/2/15 26/2/15 – 11/3/15 12/2/15 – 25/3/15 26/3/15 – 8/4/15 9/4/15 – 22/4/15 23/4/15 – 6/5/15 7/5/15 – 20/5/15 21/5/15 – 3/6/15 4/6/15 – 17/6/15 18/6/15 – 1/7/15 2/7/15 – 15/7/15 16/7/15 – 29/7/15 30/7/15 – 12/8/15 Pay Date 22/1/15 5/2/15 19/2/15 5/3/15 19/3/15 2/4/15 16/4/15 30/4/15 14/5/15 28/5/15 11/6/15 25/6/15 9/7/15 23/7/15 6/8/15 Reconciliation Date 10/6/15 11/6/15 11/6/15 12/6/15 12/6/15 16/6/15 16/6/15 16/6/15 16/6/15 17/6/15 22/9/15 22/9/15 2/10/15 2/10/15 2/10/15 Days Delayed 138 125 111 98 84 74 60 46 32 18 102 88 84 71 57 Payroll reconciliation internal control mechanism and non-preparation of reconciliations will result in the Ministry failing to detect irregularities in the payment of salaries and wages.
important is an Recommendations The Ministry must:   ensure that payroll reconciliations are prepared in a timely manner; and the Principal Accounts Officer take full responsibilities to oversee that payroll reconciliations are prepared on timely basis.

Ministry’s Comments The recommendation is supported.

The Ministry will ensure that payroll reconciliations are submitted accurately and on time.

Senior Accounting Officers to monitor the submissions prior to due dates.
8.13 Anomalies in Overseas Travel Accounting Officers and all other officers responsible for expenditure shall at all times exercise proper economy in the expenditure of public funds and thereby ensure that proper value is obtained for all sums spent.

The PAO, SAO & AO must not certify a payment as correct unless they are satisfied that; it is in accordance with an LPO, indent, contract, invoice or other authorization.19 The calculation of the daily allowance of HE the President, Hon.
Prime Minister, Ministers, shall include all days of travel excluding date of departure from Fiji and date of arrival into Fiji.20 19 Ministry’s Finance Manual 2013 - Section 2.8.4(i) 20 Ministry Finance Circular 3/2015, dated 12/3/2015 – Per Diem Rates and Allowances for Overseas Travel, Section 1.4.
Ministry of Foreign Affairs Section 08: Page 12 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI –MARCH 2017 ____________________________ The review of the overseas travel by the Minister for Foreign Affairs revealed overpayment of per diem and travel allowances on number of instances.

Refer to Table 8.6 for details.


Table 8.6: Examples of Overpayment of Travel and Perdiem Allowance Cheque Number 32088 dated 19/1/15 Anomalies Overpaid Allowance ($) 500.00 The Minister for Foreign Affairs departed on 20/1/15 to PNG to attend MSG meeting and arrived back on 28/1/15.

His daily allowance include departure and arrival date.

Hence, the Ministry overpaid the Minister daily allowance of $500.
32500 dated 10/4/15 14,081.64  The Cabinet approved the Minister for Foreign Affairs travel to attend a Ministerial Meeting in Jakarta Indonesia from 20 – 23 April, 2015 and then the Minister will proceed to Shanghai, China for his medical check-up.

The Minister was scheduled to depart Nadi for Jakarta on Wednesday 15/4/15 and arrive back in the country on Thursday 30/4/15.

21 However, the Minister returned to Fiji on 3/5/15.
The Minister stayed in Seoul for 3 days from 16/04/15 – 17/04/15 and 02/05/16, Xiamen on 28/4/15 and Shenzhen on 29/4/15 in China, which was not approved by the Cabinet.

In addition, the Minister was paid per diem allowance for the 5 days totalling $7,093.27.

The Ministers travel to Seoul Xiamen and Shenzhen and payment of per diem allowance was unauthorised.
 Also, the Ministry paid per diem allowance totalling $6,988.37 to the Minister while he was on his private medical check-up in Shanghai China from 23/4/15 to 27/4/15.

The Minister was not entitled to per diem allowance while on private medical treatment overseas.

32350 dated 5/3/15 250.00 Ministers are not entitled to daily allowance on the date of departure and date of arrival on official overseas travel.
The Minister for Foreign Affairs departed on 9/3/15 to Morocco to attend Crans – Montana Forum and to Japan to attend World Conference on Disaster Risk Reduction.

He arrived back on 23/3/15.

However, he was paid daily allowance of $250 for the date of arrival (23/3/15), thus resulting in overpayment of daily allowance by $250.
32867 dated 6/7/17 21,127.25  The Cabinet approved the Minister for Foreign Affairs travel to attend an International Conference in Addis Ababa on 13 – 15 July, 2015 and then the Minister will proceed to Shanghai, China for his medical check-up.

22 The Minister stayed in Seoul for 7 nights from 20/7/15 to 24/7/15, 28/7/15, 3/8/15 and New York for 4 nights from 29/7/15 – 1/8/15, which was not approved by the Cabinet.
In addition, the Minister was paid per diem allowance for the 11 days totalling $16,396.29.

The Minister’s travel to Seoul and New York and payment of per diem allowance was unauthorised.

 Also, the Ministry paid per diem allowance from 25/7/15 to 28/7/15 to the Minister for his private medical check-up in Shanghai China 21 Cabinet Decision dated, 31/3/15.

22 Cabinet Decision dated, 24/6/15.


Ministry of Foreign Affairs Section 08: Page 13 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI –MARCH 2017 ____________________________ Cheque Number Overpaid Allowance ($) Anomalies totalling $4,230.96.

The Minister was not entitled to per diem allowance while on private medical treatment overseas.

 The Ministers are not entitled to daily allowance on the date of departure and date of arrival on official overseas travel.
The Minister for Foreign Affairs departed on 9/7/15 to Sydney, Addis Ababa and New York and arrived back on 5/8/15.

However, he was paid daily allowance for the date of departure and the date of arrival.

Hence, the Ministry overpaid the Minister his daily allowance by $500.

33149 dated 3/9/15 500.00 The Ministers are not entitled to daily allowance on the date of departure and date of arrival on official overseas travel.
The Minister for Foreign Affairs departed on 6/9/15 to PNG to attend Pacific Islands Forum meeting and arrived back on 13/9/15.

However he was paid daily allowance for the date of departure and the date of arrival.

Hence, the Ministry overpaid the Minister for his daily allowance by $500.

33196 dated 15/9/15 2,993.00 The Cabinet approved the Minister for Foreign Affairs travel to attend the 2015 United Nations General Assembly and associated meetings in New York from 22 September to 3 October, 2015.
23 However, the Minister stayed in Seoul for 2 days from 4/10/15 – 5/10/15, which was not approved by the Cabinet.

In addition, the Minister was paid per diem allowance for the 2 days totalling $2,993.

The Ministers travel to Seoul and payment of per diem allowance was unauthorised.

The above indicates lack of supervisory checks at the headquarters which had resulted in incorrect travel allowance payment.
In addition, acceptance of travel allowance by Minister for personal medical visit and failure to advice and seek formal approval from the Cabinet for the change in travel need reflects lack of proper accountability of public funds.

The overpayment of travel expenses resulted in a loss of public funds.
Recommendations The Ministry should:    Surcharge the Accounts Officer who have been making erroneous payment; verify and recover the over paid per diem allowances from the Minister; and ensure perdiem allowance is paid to the Minister in accordance with the Cabinet approval.

23 Cabinet Decision dated, 17/8/15.


Ministry of Foreign Affairs Section 08: Page 14 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI –MARCH 2017 ____________________________ Ministry’s Comments The payment of periderm for the Hon Minister was made in accordance with respective Cabinet approvals.

However the extended days of travel were other official visits made in order to cut costs for government while the Minister is travelling along or near the same route.
8.14 Revenues Collected by Overseas Missions Operating Trust Fund Accounts facilitate transactions relating to the Ministry/Department’s administrative role as an employer.

These transactions include deductions from employees’ salaries/wages with regards to contributions to the Fiji National Provident Fund, housing loan repayments, insurance premiums and other deductions for onward payment to the respective payees.
Fiji Mission’s in overseas collects revenue on behalf of other government departments in Fiji.

The Ministry instead of requesting the Missions to remit the revenues collected overseas required the Missions to deposit the revenues collected into their respective bank account.

The Ministry when submitting the monthly budget to the missions deducts the amount of revenue collected for the month.
The revenues received from the Missions should be credited into the respective department’s revenue allocation and debited into consolidated fund account.

Audit review of revenues collected by the overseas missions revealed the following anomalies.

 When monthly acquittal files from the overseas mission are received, the Ministry calculates the revenue collected for the month and credits the respective government department’s revenue allocation.
However, the Ministry did not bank the actual cash into the Consolidated Fund Account.

In addition the revenues collected were also not posted into the Consolidated Fund Account.

The revenues collected from overseas missions were instead used by the Ministry of Foreign Affairs to meet its operational expenses.

Refer to Appendix 8.3 for examples of revenue collected by the Mission which were neither banked nor debited into Consolidated Fund Account.
 The overseas Missions charged administrative fees in addition to the prescribed fees and charges for the services provided.

The administrative fees were charged without the approval of Ministry of Economy.

 The administrative fees collected by the overseas Missions were posted into the Operating Trust account instead of a revenue account.

As at 31/12/15 the Ministry had a balance of $846,548.08 in its Operating Trust account.
However, the Operating Trust account only had book entries and no actual cash was held by the Ministry.

Refer to Table 8.7 for the balances of administrative fees in FMIS Operating Trust account.
Table 8.7: Balance As At 30/11/15 in Operating Trust Account Allocation Description 1-08103-80101-863101 1-08103-80102-863101 1-08103-80201-863101 1-08103-80401-863101 Admin Contributions Foreign Mission Admin Contributions Foreign Mission Admin Contributions Foreign Mission Admin Contributions Foreign Mission Amount ($) (276,202.93) (311,587.26) (49,269.33) (3,261.14) Ministry of Foreign Affairs Section 08: Page 15 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI –MARCH 2017 ____________________________ Allocation Description 1-08103-80701-863101 1-08103-81001-863101 1-08103-81102-863101 Total Admin Contributions Foreign Mission Admin Contributions Foreign Mission Admin Contributions Foreign Mission Amount ($) (160,315.61) (23,961.59) (21,950.22) (846,548.08) The findings show that the revenues and trust fund collected by the overseas missions were not properly accounted for by the Ministry.
Recommendations The Ministry should:    ensure administrative fees levied by Ministry is approved by Ministry of Economy; ensure that all revenues collected from overseas missions are deposited into the consolidated fund account; and review the Operating Trust Fund account balance of $846,548.08 and take appropriate action.

Ministry’s Comments  The Ministry’s Headquarters ONLY remit funds to Missions by Lessing amount of revenue been collected by Mission in the previous period.
 The Ministry can only reflect current years [2015] administration fees into the current period.

 If we need to clear past years administration fees collections then adjustments can only be done to Equity allocations.

 However, the new posting format been imposed in 2016 should reflect revenue collected into revenue allocation.
8.15 Unbudgeted Expenditure – Head Quarters Each year, the Appropriation Act and Budget Estimates set out details of the appropriations that Cabinet approves for spending by each agency.
No officer may incur expenditure, which results in the agency’s appropriation being exceeded without the authorization of the Ministry of Finance, pending approval by Cabinet.24 The Principal Accounts Officer, Senior Accounts Officer or Accounts Officer must not certify a payment as correct unless they are satisfied that the expenditure account it is charged to is correct.25 On 8/7/15, the Ministry paid a sum of $12,905 to Pearl Resort South Pacific to cater for the cost of accommodation and meals for Senior Officials Retreat.
However, the Ministry did not have any funds allocated for such meetings in its approved budget for the year.

The audit noted that the Ministry diverted $12,905 from MSG fund to cater for these expenses.
24 Ministry’s Finance Manual 2013 – Section (2.1.2) 25 Ministry’s Finance Manual 2013 – Section 2.9.5 Ministry of Foreign Affairs Section 08: Page 16 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI –MARCH 2017 ____________________________ The Ministry did not obtain the approval from the Ministry of Economy before diverting funds from MSG allocation (1-08101-08101-070201) to be used for purposes other than that approved in the budget.
The audit also noted that Pearl Resort South Pacific quoted $11,845 and local purchase order was issued by the Ministry for the same amount.

However the Ministry paid $12,905 which was $1,060 in excess of the quotation and the purchase order amounts.

The Ministry did not plan for the Senior Officials retreat in its budget.

The expenses incurred were not appropriated for and was not approved by Ministry of Economy and hence unauthorised.
Also, the Ministry did not contact the Solicitor General’s Office for the use of their conference room which was fit for the purpose and at no cost.

The audit finding indicates that funds were not used for its intended purpose.

Recommendations The Ministry should ensure that:   funds are only utilized for the purpose it has been allocated for in the budget; and approval is obtained from the Ministry of Economy for any deviation of funds for an unbudgeted or unplanned activity.
Ministry’s Comments The Retreat was a program allowing Senior Officials to participate in reviewing the Ministry’s performance for the first 6 months of 2015 and plan the way forward in the formulation of the Ministry’s strategic direction.

On way forward, the Ministry will seek prior approval from MOF for such expenditures not appropriated in budget before activities are undertaken.
8.16 Significant Amount of Unretired Accountable Advance A travelling officer shall retire the travel advance within seven days of completing travel by submission of an acquittal report with supporting documents.26 If an advance has not been fully expended, the travelling officer must repay the balance within seven days of completing travel.27 Where the advance has not been acquitted within seven days of travel, the Accounting Head shall effect recovery through a salary deduction from the concerned officer's salary within six fortnights with an inclusion of 12% per annum interest.28 The Accountant must also record the travel advance in the Accountable Advance Register.29 Any arrears of payments for an Accountable advance shall be repaid first before any other advance is allowed by the PSFA & IC.30 The Ministry had an outstanding Accountable Advance of $29,830.52 as at 1/1/15.
The total Accountable Advance paid by the Ministry during 2015 amounted to $94,960.39.
26 Ministry’s Finance Manual 2013 – Section 6.1.10 27 Ministry’s Finance Manual 2013 – Section 6.1.11 28 Ministry’s Finance Manual 2013 – Section 6.1.13 29 Ministry’s Finance Manual 2013 – Section 6.1.10 30 Ministry’s Finance Manual 2013 – Section 6.1.6 Ministry of Foreign Affairs Section 08: Page 17 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI –MARCH 2017 ____________________________ It was noted that out of $124,790.91 of Accountable Advance issued only $60,902.47 or 49% was retired during 2015.
The balance of $63,888.44 or 51% was outstanding as at the date31 of audit.

Out of the $26,043.34 of Accountable Advance payments reviewed during audit, a total of $23,060 or 88.5% of the Accountable Advance paid was neither recorded in the Advance Register nor retired.

Refer to Table 8.8 for samples of outstanding Accountable Advances.

Table 8.8: Example of Accountable Advance Not Retired in 2015 Officers Name Date Name withheld 26/8/15 92791 1/9/15 92464 2/9/15 Particulars Cheque No.
33080 33115 Advance to cater for PIDF ad hoc expenses during the PIDF Summit.

Advance for emergency purchase during official visit of Deputy PM Thailand.

33143 (A) Climate Change Summit cater to Amount ($)  Audit Comments 3,000.00  Not retired  Not recorded in the Advance register.

3,000.00  Not retired  Not recorded in the Advance register.
2,940.00  Not retired  Not recorded advance register in the 92464 2/9/15 33143 (B) Climate Change Summit 12,980.00  Not retired Name withheld 1/9/15 33141 Climate Change Summit Name withheld 1/9/15 33142 Climate Change Summit 48863 90089 Total 10/1/15 32053 23/1/15 32117 for Irena Advance 5th Assembly, Abu Dhabi.

Advance for Minister’s travel to Port Moresby and Brisbane.
 Not recorded advance register in the 570.00  Not retired  Not recorded advance register 570.00  Not retired  Not recorded advance register 1,983.34 Not retired in the in the 1,000.00 Not retired 26,043.34 It was also noted that the Assistant Director General – PIDF (EDP No.

48863) had an outstanding accountable advance of $3,604.47 from prior years.

However, the officer was issued additional Advance in 2015 even though previous advances were not cleared by him.
The Ministry did not take any action to recover the outstanding Advances.

Refer to Table 8.9 for details.

Table 8.9: Failure to Retire Prior Years Advance EDP No.

48863 48863 Total Outstanding Advance 714.08 2,890.39 3,604.47 Transaction Date 7/3/13 21/3/13 The audit further noted that the Ministry had unretired Accountable Advances totalling $36,490.69 as at 31/12/14 which were issued prior to 2015.
However, the Ministry did not take any action to recover 31 General Ledger (FMIS) verified on 20/1/16 Ministry of Foreign Affairs Section 08: Page 18 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI –MARCH 2017 ____________________________ the outstanding Advances which were still outstanding as at 31/12/15.

Refer to Appendix 8.4 for details of the unretired prior year’s advances.
The findings show that the Principal Accounts Officer did not perform her duties properly and diligently by not recovering the Accountable Advance in a timely manner.

As a result public funds are held up as outstanding Accountable Advance and related expenditures have been understated.
Recommendations The Ministry should;    make direct deduction of salaries to recover all outstanding Accountable Advance including 12% interest; ensure that officers retire accountable advance within 7 days of completing a travel; and surcharge the Principal Accounts Officer for amounts of Accountable Advance not recoverable.

Ministry’s Comments The recommendations are supported.
On way forward, all pending accountable advances have been processed and relevant recovery via salary deductions have been effective accordingly.

In addition, a new format of retirement has been introduced in the Ministry by MOF via the FMIS.

This should alleviate any chances of outstanding advances in our books.
Ministry of Foreign Affairs Section 08: Page 19 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI –MARCH 2017 ____________________________ APPENDIX 8.1: Supported Representation Allowance Claims Not Adequately Date Cheque No.
Vendor Description Brazil 27/2/15 27/2/15 6/1/15 6/1/15 20/1/15 27/1/15 Korea 5/1/15 550 551 466 467 494 500 150105 12/1/15 150123 14/1/15 150130 23/1/15 150156 4/2/15 150211 4/2/15 150216 4/2/15 150217 12/2/15 150228 26/2/15 150244 4/3/15 150313 4/3/15 150314 4/3/15 150315 4/3/15 150316 4/3/15 150319 EDP No.

62662 – Second Secretary EDP No.

49168 – First Secretary EDP No.

62662 – Second Secretary EDP No.

49168 – First Secretary EDP No.

49168 – First Secretary EDP No.


62662 – Second Secretary Being re-imbursement of official expenses - Entertainment Being re-imbursement of official expenses - Entertainment Being re-imbursement of official expenses - Entertainment Being re-imbursement of official expenses - Entertainment Being re-imbursement of official expenses - Entertainment Being re-imbursement of official expenses - Entertainment EDP No.

93388 – First Secretary EDP No.

91447 – Third Secretary EDP No.


90920 – Second Secretary EDP No.

93388 – First Secretary EDP No.

91447 – Third Secretary EDP No.

93388 – First Secretary EDP No.

90920 – Second Secretary EDP No.

93388 – First Secretary EDP No.

90920 – Second Secretary EDP No.

93388 – First Secretary EDP No.

90920 – Second Secretary EDP No.

91447 – Third Secretary EDP No.

93388 – First Secretary EDP No.
90920 – Second Secretary for hosting Secretary to official representational allowance Payment of representational allowance to First Secretary for hosting official engagement Payment of representational allowance to Third Secretary for hosting official engagement Payment of Second engagement Reimbursement payment to First Secretary, for official hosting -Representational Allowance Payment of representational allowance to Third Secretary for hosting official engagement Payment of representational allowance to First Secretary for hosting official engagement Payment of Second engagement Payment of representational allowance to First Secretary for hosting official engagement Payment of Second engagement representational allowance representational allowance to official to official Secretary Secretary hosting hosting for for for hosting Secretary to official representational allowance Payment of representational allowance to First Secretary for hosting official engagement Payment of Second engagement Payment of representational allowance to Third Secretary for hosting official engagement Payment of representational allowance to First Secretary for hosting official engagement Payment of Second engagement Payment of representational allowance to First Secretary for hosting official engagement representational allowance to official Secretary hosting for Amount ($) 570.04 924.60 695.43 597.24 836.68 205.03 358.82 339.68 824.35 567.49 382.34 255.74 681.60 1,218.45 813.04 659.47 659.47 346.68 423.00 342.50 515.03 1/4/15 150418 EDP No.
93388 – First Secretary Ministry of Foreign Affairs Section 08: Page 20 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI –MARCH 2017 ____________________________ Date Cheque No.

Vendor Description 2/4/15 150420 EDP No.

90920 – Second Secretary 10/4/15 150429 EDP No.

90920 – Second Secretary 10/4/15 150432 14/4/15 150436 20/4/15 150459 EDP No.

93388 – First Secretary EDP No.

93388 – First Secretary EDP No.

90920 – Second Secretary 6/5/15 150508 EDP No.


90920 – Second Secretary 6/5/15 150509 6/5/15 150510 27/8/15 150865 Total EDP No.

91447 – Third Secretary EDP No.

93388 – First Secretary EDP No.
93388 – First Secretary for for hosting hosting Secretary Secretary to official to official representational allowance representational allowance Payment of Second engagement Payment of Second engagement Payment of representational allowance to First Secretary for hosting official engagement Payment of representational allowance to First Secretary for hosting official engagement Payment of Second engagement Payment of Second engagement Payment of representational allowance to Third Secretary for hosting official engagement Payment of representational allowance to First Secretary for hosting official engagement Payment of representational allowance to First Secretary for hosting official engagement representational allowance representational allowance to official to official Secretary Secretary hosting hosting for for Amount ($) 680.91 639.14 311.22 455.36 258.00 715.38 235.59 721.95 1,400.70 17,634.93 Ministry of Foreign Affairs Section 08: Page 21 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI –MARCH 2017 ____________________________ APPENDIX 8.2: System Examples of Manual Payment Not Updated in the Payroll EDP/ FNPF No.
LD668 MF039 94971 25805 92464 95032 95031 ZQ456 YE109 27800 PM708 63618 MF258 94117 25831 MF034 90919 93235 MF708 MF641 92229 92464 94971 25805 59930 92228 92465 LD668 MF210 MB79+1 NG420 UX234 25687 25686 MF457 PW764 PU928 92269 QD914 Total Amount ($) Ministry of Foreign Affairs Section 08: Page 22 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI –MARCH 2017 ____________________________ APPENDIX 8.3: not Deposited in the Consolidated Trust Fund Examples of Revenue Collected by Overseas Mission and Month Description Total Amount ($) CANBERRA January February March April May June July August September October Total – Canberra WELLINGTON January February March April May June July August September October Total – Wellington WASHINGTON January February March April May June July August September October Total –Washington Total Immigration Fees for 2015 Immigration Fees for 2015 Immigration Fees for 2015 Immigration Fees for 2015 Immigration Fees for 2015 Immigration Fees for 2015 Immigration Fees for 2015 Immigration Fees for 2015 Immigration Fees for 2015 Immigration Fees for 2015 Immigration Fees for 2015 Immigration Fees for 2015 Immigration Fees for 2015 Immigration Fees for 2015 Immigration Fees for 2015 Immigration Fees for 2015 Immigration Fees for 2015 Immigration Fees for 2015 Immigration Fees for 2015 Immigration Fees for 2015 Immigration Fees for 2015 Immigration Fees for 2015 Immigration Fees for 2015 Immigration Fees for 2015 Immigration Fees for 2015 Immigration Fees for 2015 Immigration Fees for 2015 Immigration Fees for 2015 Immigration Fees for 2015 Immigration Fees for 2015 3,502.21 3,470.48 4,591.05 2,552.17 3,224.27 4,039.42 2,927.38 2,879.72 4,607.08 5,144.35 36,938.13 12,694.96
 17,625.42 13,981.69 18,138.46 14,515.27 11,745.65 17,045.19 22,188.87 12,232.20 13,157.39 153,325.10 3,523.21 1,569.06 3,377.61 3,675.96 1,689.31 1,436.13 2,089.31 2,204.42 2,039.73 1,261.03 22,865.77 213,129.00 Ministry of Foreign Affairs Section 08: Page 23 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI –MARCH 2017 ____________________________ APPENDIX 8.4: Ministries/Department Outstanding Advances to Officer’s and Date EDP Numbers/Names Amount Officers 93763 4/9/13 48213 2/7/13 48213 5/7/13 48213 8/10/13 48213 20/11/14 48213 18/3/13 45972 1/8/13 90089 12/4/13 Name Withheld A 7/3/13 94117 14/8/13 64263 5/3/14 91389 26/4/13 91389 7/8/13 91389 12/8/13 15/11/13 Name Withheld A Name Withheld A 28/2/14 90717 25/4/14 90717 3/7/14 13931 25/6/13 93233 29/8/13 90919 16/9/13 90919 17/7/13 Name Withheld C 2/8/13 Name Withheld C 5/8/13 94966 20/9/13 Name Withheld D 3/5/13 Name Withheld D 16/8/13 Name Withheld D 15/3/13 Name Withheld A 30/7/13 41212 18/6/13 41212 27/8/13 41212 02/9/13 48863 07/3/13 48863 21/3/13 92253 26/2/13 Name Withheld E 3/7/14 Name Withheld F 7/8/14 Name Withheld G 1/7/13 Name Withheld G 5/7/13 11/10/13 Name Withheld G 25/11/13 Name Withheld G PS Foreign Affairs 3/7/14 64078 20/5/13 91391 18/4/13 91391 17/4/14 91391 25/4/14 90182 19/9/14 53699 18/6/13 53699 20/6/13 ($) Ministry of Foreign Affairs Section 08: Page 24 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI –MARCH 2017 ____________________________ Date EDP Numbers/Names Amount 53699 23/07/13 70687 29/01/13 02/09/13 Name Withheld H 92136 25/04/13 92136 28/05/13 92136 01/07/13 92136 08/07/13 92136 22/08/13 92136 19/09/13 02/09/13 92136 92136 06/03/14
 09/08/13 Name Withheld 62588 16/11/13 18/11/13 45994 09/01/13 Name Withheld 07/11/13 Name Withheld 08/11/13 Name Withheld 08/07/13 91390 Ministries/Department 11/06/13 Director of Immigration 03/05/13 Ministry of Information Total ($) 700.00 63.00 69.00 45.00 166.00 121.00 75.00 36.00 108.00 54.00 108.00 486.00 150.00 45.00 99.00 2,106.94 1,509.00 2,062.91 190.00 6,690.00 36,490.69 Ministry of Foreign Affairs Section 08: Page 25 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Section 09 Office of The Auditor General Role and Responsibilities Office of the Auditor General is an independent public office established and mandated by the Fijian constitution and is responsible for:   The inspection, audit and report on the public accounts, property and transaction of state.
To perform annual audits across various state entities, ministries, departments and whole of government accounts and finance.

Report on performance, environment and information technology risk assessment.
Table of Contents PART A: FINANCIAL STATEMENT..................................................................................................................................... 1 9.1 9.2 9.3 9.4 Audit Opinion ............................................................................................................................................................ 1 Statement of Receipts and Expenditure ................................................................................................................... 1 Appropriation Statement .......................................................................................................................................... 2 Statement of Losses ................................................................................................................................................ 3 PART A: FINANCIAL STATEMENT 9.1 Audit Opinion The audit of the 2015 accounts of the Office of the Auditor General was carried out by Chartered Accounting firm, Ernst & Young.
The audit resulted in the issue of an unqualified audit report.

9.2 Statement of Receipts and Expenditure The office collected revenue totalling $546,275 and incurred a total expenditure of $3,329,803in 2015.

Details are provided in Table 9.1.
Table 9.1: Statement of Receipts and Expenditures for 2015 Description 2015 ($) 2014 ($) RECEIPTS Agency Revenue Audit Fees Miscellaneous Revenue Total Agency Revenue EXPENDITURE Operating Expenditure Established Staff Unestablished Staff 544,480 1,795 546,275 2,797,625 29,738 563,150 88 563,238 2,940,463 34,377 Office of the Auditor General Section 09: Page 1 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Description Travel & Communications Maintenance & Operations Purchase of Goods & Services Operating Grants & Transfers Total Operating Expenditure Capital Expenditure Grants & Operations Total Capital Expenditure Value Added Tax TOTAL EXPENDITURE 2015 ($) 77,358 75,979 287,302 4,531 3,272,533 2014 ($) 91,149 103,050 367,111 1,708 3,537,858 - - 57,270 3,329,803 - - 75,733 3,613,591 The total revenue decreased by $16,963 or 3%in 2015 compared to 2014 due to recovery of bulk of arrears of revenue in 2014.
The total expenditure decreased by $283,788 or 8% in 2015 compared to 2014.

The decrease was mainly due to the position of the Auditor General being vacant throughout the year and reduction in the number of contract audits issued to private firms during the year.
9.3 Appropriation Statement incurred expenditures The Office the budget of totalling $3,329,803 $4,082,574resulting in a saving of $752,771 or 18%.Details of expenditures against the budget estimates are provided in Table 9.2. in 2015 against Table 9.2: Appropriation Statement for 2015 SEG Item Budget Estimate ($) Appropriation Changes ($) Established Staff Government Wage Earners Travel & Communication Maintenance & Operations Purchase of Goods & Services Operating Grants & Transfers Special Expenditure Total Operating Costs 3,307.788 33,027 136,500 116,200 387,059 6,000 3,986,574 Capital Construction Purchases Grants & Transfers 8 9 10 TOTAL CAPITAL --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- Revised Estimate ($) a 3,307788 33,207 136,500 116,200 Actual Expenditure ($) b 2,797,625 29,738 77,358 75,979 Carry – Over ($) --- --- --- --- 387,059 287,302 6,000 --- 3,986,574 4,531 --- 3,272,533 --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- Lapsed Appropriation ($) (a-b) 510,163 3,289 59,142 40,221 99,757 1,469 --- 714,041 --- --- --- --- 38,730 752,771 13 Value Added Tax 96,000 --- 96,000 57,270 TOTAL EXPENDITURE 4,082,574 --- 4,082,574 3,329,803 Office of the Auditor General Section 09: Page 2 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ 9.4 Statement of Losses Loss of Money There was no loss of money recorded for the year ended 31 December 2015.
Loss (other than money) Loss of a fixed asset costing $3,749 was recorded during 2015.The value of the missing asset was recovered from employees concerned.

Some items were written off during the year due to wear and tear as recommended after a board of survey.
Office of the Auditor General Section 09: Page 3 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Section 10 Fiji Elections Office Grant Roles and Responsibilities Government has carried out major reforms of Fiji’s electoral system which led to the first truly democratic election in the nation’s history on 17 September, 2014.It lowered the voting age to 18 and introduced the principle of equal votes of equal value, a cornerstone of free and fair elections around the world.
It also introduced electronic voter registration to help eliminate voter fraud and changed the way political parties are registered to encourage the formation of broad-based parties, which are not based on narrow interests like geography or race.

This new electoral system is managed by the Fijian Elections Office [FEO], which has the responsibility for the registration of voters and the conduct of free and fair elections in Fiji.
The Office is run by the Supervisor of Elections, who acts under the direction of the Electoral Commission.

It also maintains the National Register of Voters and registers new political parties.

The primary role of the FEO is to lead to the democratisation of Fiji.

It prepares for and conducts national elections for Parliament, which occur every three-and-a-half to four years.

It is also responsible for conducting elections for trade unions, and will start to conduct elections for other bodies as well.
Unlike in the past, the FEO is now a permanent office that will keep a full staff year round.

This will enable it to offer career paths to its employees, conduct various elections around the country, and develop local expertise so that Fiji will no longer have to rely so heavily on foreign experts.

The FEO is provided with a budget in 2015.


This will ensure that the Office is able to operate at the necessary level in order to provide on-going training to its staff; conduct Trade Union and other elections; and continuously seek to improve Fijian electoral procedures.

FEO is looking for an affective Electoral Management System to automate the majority of the administrative aspects of elections.
In 2015, the Office intends to carry out preliminary work on drafting an appropriate tender for this system.

The FEO will continue with the Electronic Voter Registration [EVR] exercise to register potential voters each year.

Furthermore, community awareness about voter registration and voting will continue in 2015 to inform Fijians – especially those turning 18 – about the importance of voting.
The FEO will also begin work with the Ministry of Education to create a school curriculum about the various aspects of voting, including how Fiji’s electoral system works.
Table of Contents PART A: FINANCIAL STATEMENT..................................................................................................................................... 1 10.1 Audit Opinion ............................................................................................................................................................... 1 10.2 Statement of Receipts and Expenditure ...................................................................................................................... 2 10.3 Appropriation Statement ............................................................................................................................................. 2 PART A: FINANCIAL STATEMENT 10.1 Audit Opinion In 2015, the Fijian Election Office was paid a grant for its operations as per grant agreement signed between the Permanent Secretary of Finance and the Supervisor of Elections.
The grant was paid out of Head 10 of the 2015 Budget.

The outlay of funds as grants from Head 10 under the 2015 budget Fiji Elections Office Grant Section 10: Page 1 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ was audited under the audit of the Ministry of Finance as the administering Ministry which resulted in the issue of an unqualified audit report.
The audit of the Fijian Elections Office as a recipient of the grant is not included in this report and will be reported separately.

10.2 Statement of Receipts and Expenditure The expenditure incurred as grant paid to the Fijian Election Office in 2015 totalled $5,119,295in 2015 compared to expenditure of $11,582,312in year 2014.
Table 10.1 shows a single budget line expenditure of Operating Grant and Transfers to the Fijian Election Office unlike the 2014 period in they were direct recipients and administered their own budget like other ministries and departments.
Table 10.1: Statement of Receipts and Expenditure for 2015 Description RECEIPTS Commission Miscellaneous Revenue TOTAL REVENUE EXPENDITURE Operating Expenditure Established Staff Government Wage Earners Travel & Communications Maintenance & Operations Purchase of Goods & Services Operating Grants and Transfers Special Expenditures Total Operating Expenditure Value Added Tax TOTAL EXPENDITURE 2015 ($) 2014 ($) 262 15,782 16,044 1,041 219,940 220,981 --- --- --- --- --- 5,119,295 --- 5,119,295 --- 5,119,295 1,228,944 67,266 104,391 82,004 151,204 --- 8,685,682 10,319,491 1,262,821 11,582,312 Total expenditure decreased by $6,463,017 or 56% in 2015 compared to 2014.
The decrease was mainly attributed to the decrease in special expenditure due to the year 2015 being a non-election year as election was held in 2014.

10.3 Appropriation Statement The Fijian Election Office incurred expenditure totalling $5,119,295 in 2015 against a revised budget of $7,089,092resulting in a savings of $1,969,797 or 28%.

Details of expenditures against the budget estimates are provided in the appropriation statement in Table 10.2.
Fiji Elections Office Grant Section 10: Page 2 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Table 10.2: Appropriation Statement for 2015 Item Established Staff Government Wage Earner Travel & Communications Maintenance & Operations Purchase of Goods & Services Operating Grants & Transfers Special Expenditures Total Operating Expenditure Value Added Tax TOTAL EXPENDITURE Budget Estimate ($) --- --- --- --- --- 7,089,092 --- 7,089,092 --- 7,089,092 Changes ($) --- --- --- --- --- --- --- --- ---- Revised Estimate ($) --- --- --- --- --- 7,089,092 --- 7,089,092 --- 7,089,092 Actual Expenditure ($) --- --- --- --- --- 5,119,295 --- 5,119,295 --- 5,119,295 Lapsed Appropriation ($) --- --- --- --- --- 1,969,797 --- 1,969,797 --- 1,969,797 Fiji Elections Office Grant Section 10: Page 3 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Section 11 Judiciary Role and Responsibilities The Judicial Department is responsible for enhancing the quality of justice in the community by ensuring an effective and accessible Court System as the cornerstone of Justice.
The Court System will uphold the principles of impartiality, equality, fairness and access, while protecting the dignity and rights of all members of the community.

In line with the Constitution of the Republic of Fiji 2013, Chapter 5, Part A 97 (2), the courts and all judicial officers are subject only to the Constitution of the Republic of Fiji and the law, which they must apply without fear, favour or prejudice.
Table of Contents PART A: FINANCIAL STATEMENT..................................................................................................................................... 1 11.1 Audit Opinion ............................................................................................................................................................ 1 11.2 Statement of Receipts and Expenditure ................................................................................................................... 1 11.3 Appropriation Statement .......................................................................................................................................... 2 11.4 Trust Fund Account Statement of Receipts & Payments ......................................................................................... 3 PART B: AUDIT FINDINGS .................................................................................................................................................. 4 11.5 Anomalies noted in Main Trust Fund Account ......................................................................................................... 4 11.6 Significant Arrears of Revenue ................................................................................................................................ 5 11.7 Long Outstanding Balance in Operating Trust Fund Account .................................................................................. 7 11.8 Unutilised Capital Budget ......................................................................................................................................... 8 PART A: FINANCIAL STATEMENT 11.1 Audit Opinion Audit of the 2015 accounts of the Judiciary Department resulted in the issue of a qualified audit report.
The qualification was due to a variance of $726,377 between the Judicial Trust Fund Cash at bank balance of $23,664,183 in the FMIS general ledger and the Judicial Trust Fund Bank Reconciliation balance of $24,390,560 as at 31 December 2015.

Furthermore, Trust Fund Account reconciliations for suitors, maintenance and sundries trust accounts were not prepared since 31 October 1991.
11.2 Statement of Receipts and Expenditure The Department collected revenue totalling $4,371,772 and incurred expenditure totalling $27,692,107 in 2015.Refer to Table 11.1 for details.
Judiciary Section 11: Page 1 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Table 11.1: Statement of Receipts and Expenditure for 2015 Description RECEIPTS State Revenue Court Fines Court Fees Others Total State Revenue Agency Revenue Miscellaneous Revenue from Surveys Agricultural Landlord & Tenant Total Agency Revenue Total Revenue EXPENDITURE Operating Expenditure Established Staff Government Wage Earners Travel & Communications Maintenance & Operations Purchase of Goods & Services Special Expenditures Total Operating Expenditure Capital Expenditure Capital Construction Capital Purchases Total Capital Expenditure Value Added Tax TOTAL EXPENDITURE 2015 ($) 2014 ($) 2,708,400 1,352,905 21,363 4,082,668 232,826 53,952 2,326 289,104 4,371,772 19,785,891 1,131,338 1,567,814 911,564 667,243 707,064 24,770,914 1,957,474 293,185 2,250,659 670,534 27,692,107 2,466,697 1,393,338 8,691 3,868,726 175,834 35,131 - 210,965 4,079,691 18,284,760 1,003,975 1,378,543 935,378 559,619 1,038,229 23,200,504 3,091,594 689,604 3,781,198 978,137 27,959,839 The Department’s total revenue increased by $292,081 or 7 % in 2015 compared to 2014 due to the prompt payment of court fees/fines/cost and execution of warrants by the Fine Enforcement Unit to recover arrears of revenue.
The total expenditure decreased by $267,732 or 1% in 2015 compared to 2014 due to decreases in expenditure for the vessel hire for outer island court sittings.

In addition, major capital construction work scheduled at Lautoka High Court and relocation of Ba Magistrates Court were not done due to technical issues.

11.3 Appropriation Statement The Department incurred expenditure totalling $27,692,107 in 2015 against the revised budget of $40,382,832 resulting in a savings of $12,690,725 or 31%.
Details of expenditures against the budget estimates are provided in Table 11.2.
Judiciary Section 11: Page 2 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Table 11.2: Appropriation Statement for 2015 SEG Item Budget Estimate Changes ($) ($) Revised Estimate ($) a Established Staff Government Wage Earners Travel & Communications Maintenance & Operations Purchase of Goods & Services Operating Grants & Transfers Special Expenditures Total Operating Expenditure Capital Expenditure Capital Construction Capital Purchases Total Capital Expenditure Value Added Tax TOTAL EXPENDITURE 21,346,205 998,494 1,303,598 821,000 707,235 3,000 1,201,000 26,380,532 11,650,000 - 11,650,000 2,352,300 40,382,832 Actual Expenditure ($) b 19,785,891 1,131,338 1,567,814 911,564 667,243 - 707,064 24,770,914 Lapsed Appropriation ($) (a-b) 970,259 46,111 63,584 73,436 71,238 - 95,990 1,320,618 9,686,916 1,425 9,688,341 1,681,766 12,690,725 (590,055) 20,756,150 178,955 1,177,449 327,800 1,631,398 164,000 985,000 31,246 738,481 (3,000) - 803,054 (397,946) (289,000) 26,091,532 (5,610) 11,644,390 294,610 294,610 289,000 11,939,000 - 2,352,300 - 40,382,832 1,957,474 293,185 2,250,659 670,534 27,692,107 11.4 Trust Fund Account Statement of Receipts & Payments Suitors, maintenance and sundries trust fund accounts are used to deposit and make payments pursuant to the orders made by the courts.
Judiciary fund and Legal Practitioners’ trust fund accounts are used to record the interest received from the trust fund kept by the individual legal practitioners.

Table 11.3 outlines the trust fund account receipts and payments for the year.
Table 11.3: Trust Fund Account Statement of Receipts & Payments for 2015 Description RECEIPTS Suitors Fund Maintenance Fund Sundries Fund Judiciary Trust Fund Account Legal Practitioners Unit Fund TOTAL REVENUE PAYMENTS Suitors Fund Maintenance Fund Sundries Fund Judiciary Trust Fund Account Legal Practitioners Unit Fund TOTAL PAYMENTS Net Surplus Opening Balance as at 1 January Closing Balance as at 31 December 2015 ($) 2014 ($) The Trust Fund Accounts balance increased by $4,685,629 million or 23% in 2015 compared to 2014 mainly due to increase in trust receipts from Judiciary, Suitors, Maintenance and Sundries Funds.
Judiciary Section 11: Page 3 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ PART B: AUDIT FINDINGS 11.5 Anomalies noted in Main Trust Fund Account Each month the trust account must be balanced and reconciled with the trust bank account.

The names and balances of each account must be listed and the reconciliation shall be signed by the responsible officer.
Unreconciled items must be investigated and resolved promptly.1 The Department maintains three trust fund accounts namely Suitor’s Trust, Maintenance Trust and Sundries Trust accounts.

The records of trust accounts from all the district registries are maintained at headquarters for proper accountability.
Audit review of Trust Fund Accounts revealed following anomalies:  Unreconciled variance of $726,377.46 was noted between the Main Trust Fund bank reconciliation and bank statement balance as at 31 December 2015.

The variance was due to transfer of balances from old allocation to the new allocation in 2009 where the actual cash was not transferred to the new bank account by the Ministry of Finance.

The above concern was raised in previous years’ audit reports but no improvement was noted.
 Trust Fund Account reconciliations have only been updated up to 31 October 1991.

Thus the balances owed by the Department and the detailed breakdown for these balances could not be substantiated.

The delay in preparation of the reconciliations has also been highlighted in prior years audit reports but corrective action is yet to be taken.

Refer Table 11.4 for details.


Table 11.4: Balance in Trust Fund Account as at 31 December 2015 Trust Account Composition of Fund Account Balance as at 31/12/15 ($) Suitors Trust Maintenance Trust Sundries Total Trust account comprises monies pending from Suva, Lautoka and Labasa High Court cases on FNPF, Public Trustee and substantial amounts of Civil and Criminal cases.
Trust account comprises monies from maintenance payments by defendants to their spouses based on the judgments passed by the Family Law Court.

Trust account comprises monies from pending Civil and Criminal cases awaiting Court judgments.

18,709,444 1,497,470 4,178,309 24,385,223 In absence of regular reconciliations not being prepared, it was not possible to ascertain during audit the correctness of the balances reflected in the Department’s Trust Fund Accounts.
Recommendations The Department should:   continue with its concerted effort to update the pending reconciliations.

consult with Ministry of Finance to assist in the reconciliation process.

1 Finance Instructions 2010, Section 58 (3) Judiciary Section 11: Page 4 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Department’s Comments The breakdown of the variance of $726,377.46 was clearly shown in the December 2015 Reconciliation.
The variance comprised of the following:- Extra Debits Adjustment by MOF - - Less Unpresented Cheques Extra Credits Variance 52,657.06 6,087.54 681.00 784,441.06 785,122.06 58,744.60 $726,377.46 Ministry of Economy hasn't provided the monies which they had just adjusted vide JV despite the department writing to them.

All relevant documents were provided but still to date no positive response from them.
We do the reconciliations as recommended by the Auditors but the variances arise due to the reasons as stated; above which is beyond our control.

Any errors or anomalies are regularised when the reconciliations are carried out.

All variances are shown in the reconciliations which clearly show why all these balances do not tie up.

The recommendations of the Auditors are noted.

However, the department has a ledger where the balances ties up with the FMIS balances.
It is only the actual reconciliations which is behind i.e.

the detailed breakdown of monies owed by the department is not stated.

These reconciliations had not been done by the staffs who were employed in the department in the 1980's.

Had they done their job we wouldn't be in the situation we currently are in.

Nevertheless, we are trying our best to carry out the reconciliations but it is not an easy task.
Had it been behind by few years it could have been updated but to reconcile 24 years back reconciliation is quite difficult.

Current staff are trying their best so let’s see how far we can go.

Department was intending to employ extra staff as a project to specifically carry the reconciliations so that it is up to date but due to lack of office space this has been shelved for a while.

Once we are allocated with additional office space then this project can be implemented.
11.6 Significant Arrears of Revenue The credit officer must promptly follow up accounts that fall due.
If the recovery is unsuccessful after one month, the following actions shall be taken:   a demand notice for payment shall be sent to the debtor after his/her debt has been overdue for more than a month; and if the account still remains unpaid after the first demand notice was issued, a final notice shall be issued demanding payment within fourteen days.2 If a final notice had been issued to one of the debtors listed, the Principal Accounts Officer may approve the case to be referred to the Solicitor General or the Small Claims Tribunal, after considering the cost implication and the probability of recovery.3 2 Judicial Department Finance Manual 2013, Section 9.2.1 3 Judicial Department Finance Manual 2013, Section 9.2.4 Judiciary Section 11: Page 5 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ The arrears of revenue comprises of court fees, fines and cost awarded to State.
A slight decrease of $129,711 or 1% was noted in arrears of revenue in 2015 compared to 2014.
Refer to Table 11.5 for details: Table 11.5: Arrears of Revenue over Eight Year Period Year Balance Change 2008 2009 2010 2011 2012 2013 2014 2015 10,574,640 10,828,342 10,970,177 11,397,061 11,341,730 11,968,031 13,345,569 13,215,858 0 253,702 141,835 426,884 (55,331) 626,301 1,377,538 (129,711) Percentage Change (%) 0 2 1 4 0 6 12 1 ) $ ( t n u o m A 16,000,000 14,000,000 12,000,000 10,000,000 8,000,000 6,000,000 4,000,000 2,000,000 0 Arrears of Revenue 2008 2009 2010 2011 2012 2013 2014 2015 Year However, it was noted that arrears of revenue between 1 to 2 years and 2 to 5 years had increased by $220,895 (31%) and $83,436 (9%) respectively in 2015 while arrears of revenue for more than 5 years decreased by 4%.
This indicates that more revenue is falling into arrears and debt recovery procedures employed are ineffective.

Refer to Table 11.6 for Aging of Debtors.


Table 11.6: Aging of Debtors Age of Debtors Less than 1 year 1 – 2 years 2 – 5 years More than 5 years Total Debtors 2015 Amount ($) 1,620,611 940,820 1,005,849 9,648,578 13,215,858 2014 Amount ($) 1,678,769 719,925 922,413 10,024,462 13,345,569 Change ($) (58,158) 220,895 83,436 (375,884) (129,711) Percentage Change (%) (3) 31 9 (4) (1) The Department established a Fine Enforcement Unit few years back to manage the arrears of revenue.
Despite this exercise, the arrears of revenue for the Department remained substantial.

According to the Department they face challenges such as locating the defaulters as in most of the cases the defaulters do not have the fixed address, resource constraints and at times cost of recovery outweighs the outstanding revenue.
The above indicates the Department has to come up with more cost-effective strategies to collect arrears of revenue, as further delay in collecting the outstanding revenue increases the risk of revenue not likely to be collected and possible write-off.
Recommendation The Department should consult all relevant stakeholders such as LTA, Fiji Police Force, Fiji Immigration, FRCA, FNPF and Post Fiji Limited and outline the roadmap on ways to recover the arrears of revenue from the defaulters in a more cost-effective manner.

Judiciary Section 11: Page 6 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Department’s Comments The recommendation is noted.
The Department is also concerned about the vast amount of Arrears of Revenue which still remains uncollected but as mentioned in the previous years it does not have the authority nor control over the execution process as this is mainly vested in the Police Department.

As recommended by the Auditors, the Department is working closely with the Police Department in the collection of the outstanding arrears.
Transport (inclusive of driver) is provided and FEU staff accompanies Police officers who execute warrants.

But sometimes it is difficult to find the defaulters as they are no longer staying at the address initially provided by them.

In addition Police Officers are also given recharge cards to call defaulters who cannot be located.
The Department is also working with LTA so that assistance is provided by them to check if the pending arrears have been paid for at LTA which the Department is not aware of so that the record is updated.

11.7 Long Outstanding Balance in Operating Trust Fund Account Operating Trust Fund Account consists of salary deductions payable to other entities such as insurance premium deductions from employees, Fiji National Provident Fund deductions from employees.
The Department must ensure that moneys kept in Trust Fund Account are paid to relevant authorities in the following month.

The audit noted that balance in one of the Operating Trust Fund accounts for the Department with balance of $169,184 as at 31/12/15 has been accumulating over the years.

Refer to Table 11.7 for details.


Table 11.7: Balances over Five Year Period Account Number Account Description 1-11101-11999-864199 Others 2011 ($) 133,343 Ending Balance 2013 ($) 139,050 2012 ($) 135,751 2014 ($) 178,124 2015 ($) 169,184 Significant balances in the operating Trust Fund account indicates that monies kept in Trust Fund were not paid to relevant authorities on time and/or unaccounted balances are maintained in the operating Trust Fund account.
As a result, there is a high possibility that the may not be meeting some its statutory obligations and agreements with its employees in regards to FNPF and insurance premium deductions, respectively.

Recommendation The Department should review the significant dormant balance in the Operating Trust Fund account as at 31/12/15 and take appropriate action to clear the accounts.

Department’s Comments Comments of the Auditors are noted.
This account will be verified to see why there is a large amount of credit in it.

Funds deposited in this account need to be paid out so the allocation is zero.

Balances from previous years will be checked and if it needs to be paid out then it will be done so and if not then the funds will be credited to government revenue.
Judiciary Section 11: Page 7 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ 11.8 Unutilised Capital Budget The budget estimates and budget statements are to be prepared as far as practicable in accordance with internationally accepted standards.4 A revised budget of $40.4 million was allocated to the Department for 2015 which comprised of $26.1 million for operating expenditures, $11.9 million for capital expenditure and $2.4 million for VAT payments.
The audit noted that the Department did not utilize $9,611,888 or 87% of its capital budget as at 31 December 2015.

Refer to Table 11.8 for details.
Table 11.8: Capital Budget Details Item Extension of Lautoka High Court Relocation of Ba Magistrates Court Rural & Small Town Court House Upgrading of Existing Court Complex TOTAL CAPITAL EXPENDITRURE Revised ($) 7,000,000.00 1,000,000.00 494,390.00 2,500,000.00 10,994,390.00 Actuals $) 254,359.91 0.00 58,509.82 1,069,632.81 1,382,502.54 Savings ($) 6,745,640.09 1,000,000.00 435,880.18 1,430,367.19 9,611,887.46 Percentage Savings (%) 96% 100% 88% 57% 87% The above indicates that the funds allocated were not fully utilized for its intended purpose and the projects were completed within the given year to realize its benefit and meet the Department’s objective.
Not executing the budgeted programs in a timely manner would affect the service delivery of Government.

Recommendation The Department should work with key stakeholders such as Ministry of Finance (Procurement) and Public Works Department, to develop strategies to synergize the process to avoid unnecessary delays and to ensure that the capital project is completed during the fiscal year as appropriated by Parliament.
Department’s Comments Extension of Lautoka High Court Complex Considerable amount of effort was taken by the Lead Consultant in consultation with Client (Judicial) during the designing stages to move the project forward in a timely manner.

However unforeseen events were encountered during the process that greatly affected the progress of this project.

• • Variations during the design stage of the project as stated by Consultant were a major reason for delay.
Payment for additional soil drilling was required following the initial Geotech Investigation that was carried out on site by sub-contractor.

However this could not happen under the Contract Agreement.

Therefore application was made to FPO for waiver of Tender so that the drilling work can continue.

The work continues upon receipt of approval from GTB.
4 Financial Management Act 2004, Section 13 (3) Judiciary Section 11: Page 8 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ • • Clarification of the Land Title was also a cause of delay.

This issue came about when the Building Permit was lodged with the Lautoka City Council.

Further clarification was sought from the Lands Department (West) and later referred to the Director Land in HQ before issuance of permit.
Layout Plan for Storm Water Drainage was delayed as further consultation was required with Lautoka City Council and the adjoining Building owners.

Please note that this is a major project for the Department and is estimated to cost around $38m to $40m at this stage and could go up further during the construction stage.

The above issues were unforeseen from the outset and it is indeed crucial that they are resolved prior to awarding of the Contract for Construction of a project of this magnitude.
$7m was allocated for his project in 2015 however $254,359.91 was utilized on Permit fees to FEA, NFA, Ministry of Labour (OHS), Traffic Impact Assessment and EIA.

Relocation of Ba Magistrate Court Bids from five prospective Lead Consulting firms were received for Provision of Design, Documentation, Project Supervision and Management Services of the new Ba Court which was referred to MoIT (DBGA's Office) for Technical Evaluation.
The DBGA was sickly during this time and went on leave for long duration of time and eventually retired from Office.

The Project was then handed over to the Principal Government Architect.

A Technical Evaluation Report was prepared by the Principal Architect for the appointment of a lead consultant which was forwarded to client.
However when the report come to hand it had already passed the 3 months period required by GTB for Technical Evaluation and therefore the Tender was considered to be invalid subject to Ministry of Finance Circular.

Please find below chronicle of events in relation to the New Ba Court that took place commencing from May 2015 to date.

 Ministry of Finance Circular states Tender Validity Period is for 3 months from date of GTB Notification.
 GTB Notification letter received on 28/05/15 with 5 Tenderers bids.

 Memorandum with copy of bids sent to MoIT on 04/06/15 for Technical Evaluation.

 Technical Evaluation Report received on 09/07/15 by Chief Registrar.

 GTB Notification letter received on 1/09115 with Financial Proposal of 3 bidders.

 MoIT analysis of financial bids and correspondence with bidders done till October 2015.

 Notice to Tenderers # 1 on Financial Bids sent on 2/10/15.

 Consultation conducted with Director FPO.


 Advice received from FPO that Tender Validity Period has been lapsed.

 MoIT Lead Project Principal Architect absent from office on Medical Grounds.

 MoIT Director Buildings & Government Architect absent from Office — deemed resignation.

 Project on hold pending appointment of new A/DBGA.

 Consultation and advice received from FPO to re-tender.

 Consultation and Meeting conducted with Construction Implementation Unit of MOF in 2016.
 Advice received from Manager CIU to confirm on prices from Bidders and convene TEC for submission to GTB for award of consultancy.

 Email received from FPO on 11/05/16 to finalise TEC for GTB decision.

 TEC convened on 20/05/16.

Rural & Small Town Court House The funds utilised under the Rural & Small Town Court House allocation in 2015 was for the Extension of the Vunidawa Court House.

The remaining funds available from this vote were earmarked for the upgrade of Taveuni and Levuka Court.
The Department was of the view that it would be appropriate that these two projects are given to MoIT though the Divisional Engineers to undertake due to the locality of the site as it will be very costly to send private Contractors given the limited funds available.
Judiciary Section 11: Page 9 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ The MoIT (DBGA's) Office) did the Drawings for the Proposed Alteration and Refurbishment to Existing Taveuni Court House with a Class A Cost Estimates of $365,000VIP.

Proposal was submitted to FPO to engage MolT to undertake the project in line with Finance Circular Memorandum FIN 21/2/16 however this was declined by the Hon.
Minister for Finance and advise that Tender to be called for this project.

Drawings for the Proposed alteration & Upgrade to Levuka Court House were also released with a Class A Estimate of $146,000.

In lieu of the above this project was also referred to FPO for Tender.

Both the Projects are now on tender for 2016.

Upgrading of Existing Court Complexes This allocation was earmarked for renovation and upgrade of our existing Court facilities in the major towns and cities across the Country.
Bulk of the funds were utilised for the upgrade and renovation works of our Court facilities at Government Buildings and the Alteration & Refurbishment of the Nadi Court House.

Small renovation works were also undertaken at Lautoka High Court, Tavua Court and Rakiraki and joinery works for Nasinu Court.

Please note that all the renovations are undertaken subject to availability of the sites.
We normally relocate staffs to temporary accommodations with the Court premises in order to carry out renovations work to office spaces and Court Rooms.

Contractors move in with strict work programme so that work is completed on time.

However given the limited space available in our various Court facilities it has now become a difficult exercise to relocate and in addition to this the Court proceedings are held all throughout the year.
This hinders our efforts to implement the various planned projects for the year within the given timeframe and to fully utilize the budgetary allocation.

With the above drawbacks in mind we were still able to implement various projects and utilize considerable percentage of funds under Upgrading of Existing Court Complexes in 2015.
Judiciary Section 11: Page 10 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Section 12 Parliament Office Role and Responsibilities The primary function of the Parliament Office is provided for under Section 46(1) of the Constitution of the Republic of Fiji which states that: “the authority and power to make laws for the State is vested in Parliament consisting of the Members of Parliament and the President and is exercised through the enactment of Bills passed by Parliament and assented to by the President”.
The core business of the Parliament Office is to provide secretariat support and services to enable the Parliament of the Fiji to perform the above functions.
Table of Contents PART A: FINANCIAL STATEMENT ...................................................................................................................................... 1 12.1 Audit Opinion ........................................................................................................................................................... 1 12.2 Statement of Receipts and Expenditure .................................................................................................................. 1 Appropriation Statement ......................................................................................................................................... 2 12.3 PART B: AUDIT FINDINGS ................................................................................................................................................... 3 12.4 Budget Appropriation Classification ........................................................................................................................ 3 PART A: FINANCIAL STATEMENT 12.1 Audit Opinion The audit of the 2015 accounts of the Parliament Office resulted in the issue of a qualified audit report.
The basis of qualification was that expenses totalling $7,612,055 incurred by the Office in 2015 were not classified into respective expenditure groups SEG’s 1 – 13.

Therefore full financial information has not been disclosed to the users in the Statement of Receipts and Expenditures.

12.2 Statement of Receipts and Expenditure The Parliament Office recorded revenue totalling $3,578 and incurred expenditure totalling $7,612,055 in 2015.
Table 12.1: Statement of Receipts and Expenditure for 2015 Description RECEIPTS State Revenue Agency Revenue TOTAL REVENUE EXPENDITURE Operating Expenditure Parliament Office 2015 ($) 2014 ($) 1,226 2,352 3,578 1,793 --- 1,793 Section 12: Page 1 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Description Established Staff Government Wage Earners Travel & Communications Maintenance & Operations Purchase of Goods & Services Operating Grants & Transfers Special Expenditures Total Operating Expenditure Capital Expenditure Capital Construction Capital Purchase Total Capital Expenditure Value Added Tax TOTAL EXPENDITURE 2015 ($) --- --- --- --- --- 7,612,055 --- 7,612,055 --- --- --- --- 7,612,055 2014 ($) 986,586 246,701 126,747 177,489 425,276 --- 187,772 2,150,571 2,376,300 90,870 2,467,170 490,529 5,108,270 Total expenditure increased by $2,503,785 or 49% in 2015 compared to 2014.
The increase was attributed to increase in staff establishment from 47 in 2014 to 96 in 2015, increased in claim for subsistence allowance and overseas travel expenses for Members of Parliament and Secretariat.

In addition, there were increase in procurement of office equipment, furniture, office supplies and minor building maintenance works.
12.3 Appropriation Statement The Parliament Office incurred expenditures totalling $7,612,055 in 2015 against the revised budget of $8,888,234 resulting in a savings of $1,276,179 or 14%.

Details of expenditures against the budget estimates are provided in Table 12.2.
Table 12.2: Appropriation Statement for 2015 SEG Item Budget Estimate ($) Changes ($) Established Staff Government Wage Earners Travel & Communications Maintenance & Operations Purchase of Goods & Services Operating Grants & Transfers Special Expenditures Total Operating Expenditure Capital Expenditure Capital Construction Capital Purchase Total Capital Expenditure Value Added Tax TOTAL EXPENDITURE --- --- --- --- --- 8,888,234 --- 8,888,234 --- --- --- --- 8,888,234 --- --- --- --- --- --- --- --- --- --- --- --- --- Revised Estimate ($) a --- --- --- --- --- 8,888,234 --- 8,888,234 --- --- --- --- 8,888,234 Actual Expenditure ($) b Lapsed Appropriation ($) (a-b) --- --- --- --- --- 7,612,055 --- 7,612,055 --- --- --- --- 7,612,055 --- --- --- --- --- 1,276,179 --- 1,276,179 --- --- --- --- 1,276,179 Parliament Office Section 12: Page 2 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ PART B: AUDIT FINDINGS 12.4 Budget Appropriation Classification The budget papers for a financial year (the “budget year”) comprise budget estimate that specify the appropriation categories for each head appropriation in the Bill.1 The Parliament Office was allocated budget provision totalling $8,888,200 during the year 2015.
The total budget allocated to Parliament was recorded under SEG 6 – Operating Grants and Transfers.

The Parliament Office in its special purpose financial statements recorded the total expenses incurred in 2015 amounting to $7,612,055 classified as Operating Grants and Transfers under SEG 6.

The audit noted that the Parliament Office did not provide any grant to other agencies and the funds were used for the operating expenses of Parliament Office.
The operating expenses incurred were not classified into respective SEG’s 1 – 13.

Therefore full financial information has not been disclosed to the users of the special purpose financial statements.

Recommendation The Office should ensure that Agency Financial Statement discloses expenditure incurred into SEG 1 - 13.

Parliament Office Comments The purpose of SEG 6 in paragraph 3 is supported.

However, this has to be addressed by Ministry of Finance Budget division and FMIS.
Given the one – line budget for the first time in 2015, payments were reflected under one allocation under SEG 6 [Operating Grant] in the FMIS system.

We maintained a manual expenditure ledger in 2015 divided into SEG 1- 13 but did not capture every detailed spending as expected.

In 2016, the department has improved its recording system by SEGs as reflected in the 2016 1st Quarter Financial report.
Please note the budgetary provision for each expenditure item is not a fixed amount but subject to quarterly review depending on the department’s current and forecasted spending.

The office of the Secretary – General to Parliament acknowledges the assistance of OAG to officially inform Ministry of Finance of the error and adjust accordingly.
1 Financial Management Act 2004 Section 13 (2)(b)(i) Parliament Office Section 12: Page 3 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2016 ____________________________ Section 13 Independent Commissions Role and Responsibilities Fiji’s independent commissions directly serve the people in specialized areas where objective and non-political judgment is required.

The Commission applies the law independently and is a valuable tool for democratic governance.
They share the larger purpose of defending the dignity of the individual in society, keeping institutions and the people who serve the public accountable, and serving as a constant reminder that Government serves the people.

The Independent Commissions include the Human Rights and Anti-Discrimination, the Accountability and Transparency Commission and the Fiji Independent Commission Against Corruption.
- - - The Human Rights and Anti-Discrimination Commission has a responsibility under Section 45 of the Constitution to ensure that Fiji human rights laws are respected.

The Commission approaches this in three ways; educating the public, advising Government about its obligations under international law, and receiving and acting upon complaints from the public.
The Accountability and Transparency Commission is a multi-faceted office that deals with freedom of information, code of conduct issues for public officials and other areas of law concerned with the responsibility of public officials and institutions to act in ways that are accountable, transparent and accessible.

The Accountability and Transparency Commission is established under Section 121 of the Constitution.
The Fiji Independent Commission Against Corruption (FICAC) is charged with fighting corruption in the public sector of Fiji.

Its objective is to ensure that Fijians are served equally by their Government no matter what their circumstances or what issue they have before the Government.

It accomplishes this by educating the public and public –sector workers and officials about corruption, inviting the public to bring cases of corruption forward and investigating complaints of corruption.
Table of Contents PART A: FINANCIAL STATEMENT .......................................................................................................................................... 1 13.1 13.2 13.3 Audit Opinion .......................................................................................................................................................... 1 Statement of Receipts and Expenditure ................................................................................................................. 2 Appropriation Statement ........................................................................................................................................ 2 PART A: FINANCIAL STATEMENT 13.1 Audit Opinion The audit of the 2015 grants budgeted under Head 13 Independent Commission resulted in the issue of an unqualified audit report.
This report focusses only on the payments of grants as administered by the Ministry of Finance and Office of the Attorney General.

Separate reports are prepared on the utilization of grants by Independent Commissions.
Independent Commissions Section 13: Page 1 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – SEPTEMBER 2016 ____________________________ 13.2 Statement of Receipts and Expenditure The total grant paid from Budgetary Head 13 Independent Commissions totalled $9,053,686 in 2015 which increased by $486,686 or 5% compared to 2014.
Table 13.1: Head 13 – Independent Commissions Abridged Statement of Receipts and Expenditure in 2015 Description EXPENDITURE Operating Operating Grants and Transfers Total Operating Expenditure TOTAL EXPENDITURE 2015 ($) 2014 ($) 9,053,686 9,053,686 9,053,686 8,585,000 8,585,000 8,585,000 13.3 Appropriation Statement The Abridged Appropriation Statements for Budgetary Head 13 Independent Commissions below shows total grants paid in 2015 totalled $9,053,686 against a revised budget of $9,514,121 resulting in savings of $460,435 or 5%.
Refer Table 13.2 for details: Table 13.2: Head 13 - Appropriation Statement for 2015 SEG Item Budget Estimate ($) Changes ($) Revised Estimate ($) Actual Expenditure ($) Lapsed Appropriation ($) 6 Operating Transfers TOTAL Grants & 10,249,200 (735,079) 9,514,121 9,053,686 10,249,200 (735,079) 9,514,121 9,053,686 460,435 460,435 The 2015 Budget for the Accountability and Transparency Commission was not utilised during the year.
Grants paid to the Human Rights and Anti – Discrimination Commission totalled $550,000 and $8,503,686 was paid to the Fiji Independent Commission Against Corruption [FICAC].

Accounts of the Fiji Independent Commission Against Corruption accounts for 2015 have been audited while the Fiji Human Rights and Anti – Discrimination Commission is yet to submit for audit the accounts for the periods 2008 to 2015.
The non- appointment of Director and Commissioners are the reasons provided for late submission of accounts for audit.

Independent Commissions Section 13: Page 2 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Section 14 Office of the Director of Public Prosecutions Role and Responsibilities The Office of the Director of Public Prosecutions is an independent office established by the Fijian Constitution.
The Director of Public Prosecutions [DPP] is responsible for instituting and conducting criminal proceedings in Fiji.

The Office does not conduct criminal investigations.

In most cases the investigation is done by the Fiji Police Force, which then presents the DPP with a brief containing the evidence it has collected.

Before launching a prosecution, the DPP examines the evidence to determine if there is a reasonable chance of conviction and if a prosecution is in the public interest.
Should the DPP be satisfied on both counts, the DPP launches criminal proceedings.

The Office prosecutes all criminal trials before the High Court, as well as prosecutes criminal appeals before the Court of Appeal and the High Court.

The Office also takes over cases of special difficulty or those relating to the public interest in the Magistrates' Courts.
The Director has the right to take over criminal proceedings that have been instituted by another person or authority and to discontinue, at any stage before judgement is delivered, criminal proceedings, except for those instituted by the Fiji Independent Commission Against Corruption.
Table of Contents PART A: FINANCIAL STATEMENT .................................................................................................................................. 1 14.1 Audit Opinion ............................................................................................................................................................ 1 14.2 Statement of Receipts and Expenditure ................................................................................................................... 1 14.3 Appropriation Statement .......................................................................................................................................... 2 14.4 Statement of Losses ................................................................................................................................................ 2 14.5 Trust Fund Account Statement of Receipts and Payments ..................................................................................... 3 PART A: FINANCIAL STATEMENT 14.1 Audit Opinion The audit of the 2015 financial statements of the Office of the Director of Public Prosecutions resulted in the issue of an unqualified audit report.
14.2 Statement of Receipts and Expenditure The Office of the Director of Public Prosecutions collected revenue totalling $1,985 and incurred a total expenditure of $4,696,316 in 2015.
Office of the Director of Public Prosecutions Section 14: Page 1 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Table 14.1: Statement of Receipts and Expenditure for 2015 Description RECEIPTS Commission Agency revenue TOTAL RECEIPTS EXPENDITURE Operating Established Staff Government Wage Earners Travel & Communications Maintenance & Operations Purchase of Goods & Services Special Expenditures Total Operating Expenditure Value Added Tax TOTAL EXPENDITURE 2015 ($) 2014 ($) 1,985 - 1,985 5,384 110 5,494 2,742,310 172,886 236,680 387,655 797,761 117,259 4,454,551 241,765 4,696,316 2,463,914 182,121 238,453 327,753 900,653 117,761 4,230,655 258,639 4,489,294 Total expenditure increased by $207,022 or 5% in 2015 compared to 2014.
The increase in expenditure was mainly attributed to increase in established staff cost due to renewal of contract with salary increment for legal officers and increase of employers FNPF contribution from 8% to 10%.

14.3 Appropriation Statement The Office incurred expenditure totalling $4,696,316 in 2015 against the revised budget of $5,715,089 resulting in savings of $1,018,773 or 18%.

Details of expenditures against the budget estimates are provided in Table 14.2.
Table 14.2: Appropriation Statement for 2015 SEG Item Established Staff Government Wage Earners Travel & Communication Maintenance & Operations Purchase of Goods & Services Special Expenditure Total Operating Expenditure Value Added Tax TOTAL EXPENDITURE Budget Estimate ($) 3,284,259 163,504 249,930 337,200 1,264,496 120,000 5,419,389 295,700 5,715,089 Changes ($) (333,260) 54,760 21,500 132,000 125,000 - - - - Revised Estimate ($) 2,950,999 218,264 271,430 469,200 1,389,496 120,000 5,419,389 295,700 5,715,089 Actual Expenditure ($) 2,742,310 172,886 236,680 387,655 797,761 117,259 4,454,551 241,765 4,696,316 Lapsed Appropriation ($) 208,689 45,378 34,750 81,545 591,735 2,741 964,838 53,935 1,018,773 14.4 Statement of Losses The Office of the Director of Public Prosecutions did not report any loss of money or assets during the financial year ending 31/12/15.
Office of the Director of Public Prosecutions Section 14: Page 2 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ 14.5 Trust Fund Account Statement of Receipts and Payments Table 14.3: Trust Fund Account Statement of Receipts and Payments 2015 Description RECEIPTS Forfeited Assets Fund DPP Trust Account Total Receipts PAYMENTS Forfeited Assets Fund DPP Trust Account Total Payments 2015 ($) 2014 ($) 8,430 8,585 17,015 48,801 16,798 65,599 694 80 774 2 2 Net (Deficit)/Surplus (48,584) 772 Opening Balance as at 1 January 178,657 177,885 Closing Balance as at 31 December 130,073 178,657 The Trust fund account consists of balances held for forfeited assets and Director of Public Prosecutions trust account.
Office of the Director of Public Prosecutions Section 14: Page 3 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Section 15 Ministry of Justice Roles and Responsibilities Maintaining thorough records about the people and businesses living and operating within Fiji is an essential function of Government that allows it to improve the services it offers.
The Ministry of Justice is responsible for the efficient and professional administration of the legal registries under its portfolio.

The Ministry deals specifically with the registration of land titles, births, deaths, marriages, companies, business names, credit unions, moneylenders, bankruptcies, and wound-up companies.

The Registrar of Titles Office is responsible for the registration of land titles, deeds, charitable trusts and religious bodies.
The Office of the Official Receiver is responsible for the proper administration of the Bankruptcy and Companies Act and the execution of court orders.

The Ministry is also responsible for the Administration of the Justice of the Peace Unit, which provides notary services for official documents.
Table of Contents PART A: FINANCIAL STATEMENTS ..................................................................................................................................... 1 15.1 Audit Opinion ............................................................................................................................................................ 1 15.2 Statement of Receipts and Expenditure ................................................................................................................... 2 15.3 Appropriation Statement .......................................................................................................................................... 2 15.4 Statement of Losses ................................................................................................................................................ 3 PART B: AUDIT FINDINGS ..................................................................................................................................................... 3 15.5 Trust Fund Accounts not Disclosed in Financial Statement ..................................................................................... 3 15.6 No Board of Survey for Drawings ............................................................................................................................. 4 15.7 Issue of Cash Cheques ............................................................................................................................................ 5 15.8 Anomalies in Reconciliations of Bankruptcy and Liquidation Cash Account ............................................................ 6 15.9 Absence of Standard Operating Procedures ........................................................................................................... 7 15.10 Significant Number of Vacant Positions ................................................................................................................... 8 15.11 Junior Officers Acting On Senior Positions
 .............................................................................................................. 9 15.12 Appointment of Temporary Relieving Clerical Officers (TRCOs) ............................................................................. 9 15.13 Non Compliance with Service Agreement by Service Provider ............................................................................. 11 15.14 Missing Receipt Book ............................................................................................................................................. 13 15.15 Non-renewal of Moneylenders Licences ................................................................................................................ 14 15.16 Non Submission of Annual Returns ....................................................................................................................... 15 15.17 Poor Record Keeping by Official Receivers Office ................................................................................................. 15 APPENDIX 15.1: Details of Vacant Position of the Ministry ................................................................................................ 18 PART A: FINANCIAL STATEMENTS 15.1 Audit Opinion The audit of the 2015 accounts for the Ministry of Justice resulted in the issue of a qualified audit report.
The qualification was as follows: The Ministry maintains the Official Receiver Company bank account with a credit balance of $652,634 and the Official Receiver Bankruptcy bank account with a credit balance of $183,648.
Section 15: Page 1 Ministry of Justice REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Although, cash deposited into both accounts are trust monies, the Ministry did not prepare and submit Trust Fund Account Statement of Receipts and Payments together with the special purpose financial statements.

In addition, details of both accounts were not recorded in the FMIS general ledger.
15.2 Statement of Receipts and Expenditure The Ministry collected revenue totaling $1,619,088 and incurred expenditure totaling $3,869,241 in 2015.

Refer Table 15.1 for details.
Table 15.1: Statement of Receipts and Expenditure for 2015 Description RECEIPTS State Revenue Miscellaneous Fees Registration Fees Licence Fees Other State Revenue Total State Revenue Agency Revenue Other Agency Revenue Total Agency Revenue TOTAL REVENUE EXPENDITURE Operating Expenditure Established Staff Unestablished Staff Travel & Communication Maintenance & Operations Purchase of Goods & Services Operating Grants and Transfers Special Expenditure Total Operating Expenditure Capital Expenditure Construction Purchases Total Capital Expenditure Value Added Tax TOTAL EXPENDITURE 2015 ($) 2014 ($) 1,004,158 563,307 49,563 2,060 673,579 726,943 42,864 2,896 1,619,088 1,446,282 - - 1,619,088 - - 1,446,282 1,843,054 159,435 116,044 540,835 201,030 11,500 314,517 3,186,415 - 463,132 463,132 219,694 3,869,241 1,880,302 134,749 138,202 490,602 178,612 11,500 332,097 3,166,064 28,665 555,984 584,649 238,883 3,989,596 Total revenue increased by $172,806 or 12% in 2015 compared to 2014 due to new BDM offices being opened in the country and increase in public awareness.
Total expenditure decreased by $120,355 or 3% in 2015 compared to 2014 mainly due to reduction in capital expenditure.

15.3 Appropriation Statement The Ministry incurred expenditure totaling $3,869,241 in 2015 against the revised budget of $4,775,095 resulting in a savings of $905,854.

Details of expenditure against the revised budget estimate are provided in Table 15.2.
Ministry of Justice Section 15: Page 2 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Table 15.2: Appropriation Statement for 2015 SEG Item Budget Changes Revised Actual Lapsed Estimate ($) ($) Estimate ($) Expenditure ($) Appropriation ($) Operating Expenditure Established Staff 1,979,563 (104,536) 1,875,027 1,843,054 Government Wage Earners Travel & Communication Maintenance & Operations Purchase of Goods & Services Operating Grants & Transfers 147,514 230,400 586,000 179,500 11,500 42,288 (46,724) 107,199 107,829 - Special Expenditure 996,718 (272,058) 189,802 183,676 693,199 287,329 11,500 724,660 159,435 116,044 540,835 201,030 11,500 314,517 Total Operating Expenditure 4,131,195 (166,002) 3,965,193 3,186,415 Capital Expenditure Capital Construction Capital Purchase Total Capital Expenditure 13 Value Added Tax TOTAL EXPENDITURE 4,775,095 15.4 Statement of Losses - 300,000 300,000 343,900 - 166,002 166,002 - - - 466,002 466,002 343,900 - 463,132 463,132 219,694 4,775,095 3,869,241 31,973 30,367 67,632 152,364 86,299 - 410,143 778,778 - 2,870 2,870 124,206 905,854 There was no loss of money and fixed asset recorded for the year 2015.
However, items worth $42,749 were written off, following the Ministry’s Board of Survey conducted in early 2016 for the year 2015.

PART B: AUDIT FINDINGS 15.5 Trust Fund Accounts not Disclosed in Financial Statement The receipts and payments of Trust money must be recorded in a separate cashbook or set of ledger accounts.1 Each month the Trust account must be balanced and reconciled with Trust bank account.
The names and balances of each account must be listed and the reconciliation shall be signed by the responsible officer.2 All payments must be immediately recorded in the Financial Management Information System.3 The Ministry maintains two bank accounts namely Official Receiver Company and Official Receiver Bankruptcy.
The Ministry uses the Official Receiver Company bank account to deposit receipts from liquidated companies or persons and payments to companies or persons to clear their outstanding accounts.

The Official Receiver Bankruptcy bank account is used to deposit receipts from bankrupt persons or someone on their behalf and payments to clear their outstanding accounts.
1 Finance Instruction 2010, Section 58 (2) 2 Finance Instruction 2010, Section 58 (3) 3 Finance Instruction 2010, Section 15 Ministry of Justice Section 15: Page 3 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ As at 31/12/15 both bank accounts had a total credit balance of $836,286.11.

Refer to Table 15.3 for details of the bank accounts maintained by the Ministry.
Table 15.3: Details of Trust Accounts Account Name Official Receiver Company – Liquidation Official Receiver Bankruptcy Total Balance As At 31/12/15 ($) 652,637.94 183,648.17 836,286.11 The audit noted that although cash deposited into both accounts are trust monies, the Ministry did not account them as trust fund.

In addition the Ministry did not prepare and submit Trust Fund Account Statement of Receipts and Payments together with the Special Purpose Financial Statements.
Due to laxity on the part of the Ministry accounting Officers, the Trust Fund accounts were also not recorded in the FMIS general ledger.

As a result the Ministry of Finance does not have any control over the Trust Fund accounts maintained by the Ministry.

Recommendation The Ministry should ensure that all the Trust Fund accounts are recorded in the FMIS general ledger and disclosed in its financial statements.
Ministry’s Comments The Ministry acknowledges that the bank account for liquidation and bankruptcy matters was never included in the FMIS general ledger.

This could be due to the fact that the Ministry of Finance does not provide budgetary allocation to Official Receivers office in terms of its operations or performance of its duties.

The funds are derived from administration of debtors’ estate.
However, we have always submitted our records to audit team for audit purposes even though it was not included in the FMIS general ledger.

In fact, audit team did not raise any concerns regarding the non-disclosure till this year.

The Ministry took immediate steps to address this issue and has ensured that both accounts are in the FMIS general ledger.
15.6 No Board of Survey for Drawings The Permanent Secretary must appoint a Board of Survey to conduct a physical stock take of all cash on hand and other stocks held in safes at least once a year.4 The audit noted that the Ministry did not carry out Board of Survey for unpresented cheques as at 31/12/15.

Hence, the correctness of total unpresented cheques of $269,090 as at 31/12/15 could not be ascertained.

The findings indicate lack of supervision and monitoring by Senior Officers.
4 Finance Instruction 2010, Section 31(5) Ministry of Justice Section 15: Page 4 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Recommendations The Ministry should ensure that:   Board of Survey of unpresented cheques is carried out at the end of the year; and adequate supervision and monitoring is provided by the Senior Officers to their subordinates.
Ministry’s Comments The Ministry did carry out the Board of Survey for Drawings as opposed to the finding by the audit team.

However, the Board of Survey was not presented on 31/12/15 but on 14/06/16.

The reason for delay was the confusion regarding the new format hence submitted in June this year.

15.7 Issue of Cash Cheques Not negotiable or crossed cheques are safer than cash cheques.

Ministries and department should issue not negotiable cheques to avoid misappropriation of cash.
The audit noted that the Ministry wrote several cash cheques totalling $1,035,898 from the Official Receiver Company bank account and $11,325.82 from the Official Receiver Bankruptcy bank account during the year 2015.

Refer to Table 15.4 for details.
Table 15.4: Details of Cash Cheques Issued Month Official Receiver Company ($) Official Receiver Bankruptcy ($) January February March April May June July August September October November December Total 96,141.59 76,290.28 116,157.04 70,994.14 99,601.92 97,196.40 89,165.17 70,606.79 77,220.68 100,513.38 73,869.37 68,141.48 1,035,898.24 700.00 1,787.50 700.00 500.00 300.00 700.00 600.00 593.04 2,563.77 576.82 1,754.69 550.00 11,325.82 Due to poor internal controls, lack of supervision and monitoring in the Accounts Section, cash cheques were issued by the Ministry.
There is a high risk of misappropriation of funds with issue of cash cheques.

Ministry of Justice Section 15: Page 5 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Recommendation The Ministry should cease issuing cash cheques from the Official Receiver Company and Official Receiver Bankruptcy bank accounts.

Ministry’s Comments The Ministry acknowledges that large number of cash cheques were issued previously.
However, we have ceased the issuance of cash cheque to creditors and are issuing non-negotiable cheques to creditors in liquidation matters.

Cash cheques are only issued for the payment of wages for the employees of wound up companies.

15.8 Anomalies in Reconciliations of Bankruptcy and Liquidation Cash Account Cash at bank balance should be reconciled to general ledger balance on a monthly basis.
The details of unpresented cheques and other reconciling items should be attached to the reconciliation statement.5 The Principal Accounts Officer must verify balances in the bank reconciliations to the cashbook, bank statements, unpresented cheque list and the previous month’s bank reconciliation before certifying it.6 The audit noted the following anomalies:  The Ministry’s bank reconciliation statement for the Official Receiver Company Account showed credits totaling $14,068.43 and unpresented cheques totaling $1,300 which were not updated in the cash book as at 31/12/15.
The credits and unpresented cheques were carried forward from previous years.

In addition receipts totaling $8,675.11 stated in the bank reconciliation was not credited in the bank statements and hence not deposited into the bank account as at 31/12/15.

No actual cash exists with the Ministry for receipts not credited and hence the receipts will not be credited by the bank in future.
 The Ministry’s bank reconciliation statement for the Official Receiver Liquidation Account showed credits totaling $12,297.31, debits totaling $22,337.76 and unpresented cheques totaling $3,130 which were not updated in the cash book as at 31/12/15.

The total credits, debits and unpresented cheques have been carried forward from previous years.

In addition stale cheques totaling $1,283.50 were still appearing in the unpresented cheques listing.
The finding indicates the lack of basic knowledge in preparation of bank reconciliations by the Ministry’s accounting staffs.

The non-clearance of direct credits, debits and non-updating of cash books will be carried forward in the future if the Ministry is unable to identify and clear these amounts.
5 Ministry of Justice Finance Manual 2013, Section 6.4.9 6 Ministry of Justice Finance Manual 2013, Section 6.4.11 Ministry of Justice Section 15: Page 6 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Recommendations The Ministry should:     ensure that cash account reconciliations are properly carried out on a monthly basis in order to minimize future adjusting entries; ensure that all the reconciliations are properly maintained; take appropriate action to identify and clear the adjusting entries carried forward from prior years; and investigate the poor record keeping of Trust Fund cash account and take appropriate disciplinary action.
Ministry’s Comments Official Receiver accounts were being handled by their own accounts officer.

In 2012, accounts section within the Ministry of Justice took over the accounts from Official Receiver.

The accounts section had to reconcile accounts for previous years hence this caused delay in reconciling accounts for 2012, 2013, 2014 and 2015.In order to reconcile, we need to check the source document, check the statements in the internal database and get confirmation from third parties like banks.
This takes time as our internal database is only accessible in one computer, the software is out-dated and we cannot install this software in any other computer.

The application is so slow that it takes too much time to verify the records during reconciliation.

Currently, we are printing out all debtors and creditors statements so that ITC can develop an application which can be accessed in more than 1 computer thus verification can be done efficiently.
15.9 Absence of Standard Operating Procedures Standard Operating Procedures (SOPs) are written instructions intended to document how to perform a routine activity.

It ensures consistency and quality, and is a useful tool to communicate important corporate policies, government regulations, and best practices.
The audit noted that the SOPs used by the following Registries of the Ministry are still in the draft format:  Births, Death and Marriage Office  Titles Office  Companies Office  Official Receivers Office SOPs ensure that procedures are applied consistently by all staffs.

It also ensures that all tasks are carried out in compliance with the set guidelines.

In the absence of SOPs, the procedures may not be applied consistently by all staff.
Recommendation The Ministry should ensure that SOPs are finalised for all four Registries under the Ministry.

Ministry of Justice Section 15: Page 7 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Ministry’s Comments The Ministry agrees that currently the complete SOP for the Ministry is not in place and we are targeting within our annual work plan in 2016 to ensure that all SOP for all positions and the processes are developed and documented.
15.10 Significant Number of Vacant Positions All substantive vacant posts that are funded in the Budget shall be advertised and processed.7 The Ministry had 173 approved staff establishment for the year 2015.

However, a total of 50 or 29% of the total positions in the Ministry were vacant as at 31/12/15.

The vacant positions comprised of 46 established and 4 Government Wage Earner positions.

Refer to table 15.5 for details.


Table 15.5: Details of Vacant Positions Payroll Established Staff Government Wage Earner Total: Approved Establishment 106 67 173 Actual Establishment 60 63 123 Vacant Positions 46 4 50 The audit also noted that most of these positions were vacant since 2012 and were not filled as of the date of audit on 7/3/16.

In addition, several of the vacant positions were at senior level.

Refer to table 15.6 for details.


Table 15.6: Details of Vacant Senior Positions Years Number of vacant positions 2016 2015 2014 2013 2012 87 50 50 50 50 Number of Senior Posts Vacant (Above SS02 Grade) 9 9 9 9 9 The findings indicate failure by the Ministry to make timely appointments to the vacant positions.

The large number of vacancies weakens the controls in place through lack of reviews and segregation of duties and increases the risk of fraud.
Recommendation The Ministry should carry out a review of staff requirement and ensure vacant positions are filled.

Management comments The Ministry agrees that in total, 87 vacancies exist for the Ministry.

By the end of 2015, 50 vacancies existed and in 2016, the Ministry of Finance approved 37 existing project posts to be absorbed as part of the ministry establishment.
7 Policy on Staff Establishment of the Public Service Section 6.3.4.1 Ministry of Justice Section 15: Page 8 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ From the total 87 posts in the Ministry, the first 47 posts have been earmarked to be advertised in the Fiji Sun within the 2nd quarter of 2016.
15.11 Junior Officers Acting On Senior Positions The Officer who is selected to act on a senior position must have all the competencies, qualifications, experience, and if necessary the appropriate registration, to enable them to carry out the acting role effectively.

If the employee is not fully qualified for the acting role the acting must be restricted and alternative arrangements need to be made to ensure full compliance.

The Ministry had total of 50 vacant positions as at 31/12/15.
The audit noted that the positions vacant were mostly for senior positions and junior Officers were acting on some of these senior positions.

For example, a Clerical Officer (EDP Number 63596) was acting as a Senior Administrative Officer in the Official Receivers Office.

Similarly, an Executive Officer (EDP Number 53485) was acting on the position of Principal Administrative Officer in the Registrar Generals Office.
The audit also noted instances where the junior Officers acting on senior positions did not meet the minimum qualification requirement for the positions they were acting on, details of minimum qualifications were not in the personal file and some files were not provided for audit verifications.

Refer to Appendix 15.1 for details of officers acting on the vacant positions and their qualifications.
The findings indicate that the Ministry did not consider officers qualifications when appointing them on senior positions to act.

There is a high risk of poor decision-making.

Recommendation The Ministry should take appropriate action to ensure vacant positions are filled by qualified officers.

Ministry’s Comments The Ministry agrees that junior officers are acting on senior positions.
In agreement to above, we assure that this problem will be addressed once the vacancies are advertised and substantively filled and we are confirmed to commence work on this from April 2016.
15.12 Appointment of Temporary Relieving Clerical Officers (TRCOs) The Equal Employment Opportunity Policy is intended to provide all Public Service officers with a guide to fairness and equity in employment decisions in the areas of recruitment, promotion, transfer and training on the basis of merit.8 The Ministry advertised 65 Clerical Officer positions in August to assist in the digitization of the Titles Office records which includes unbinding of books, sorting of records, scanning of documents and data entry.
The Ministry appointed 45 Officers on TRCO positions.

The remaining 20 positions were left vacant.

Audit review of the Officers personal files revealed the following anomalies.
8 General Orders 2011 Section 1224 (b) Ministry of Justice Section 15: Page 9 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________  The Minimum Qualification Requirement (MQR) for the positions was pass in Form 7, relevant work experience, ability to formulate individual work plan, working knowledge of computers and its applications and ability to follow directions and meet tight and immovable deadlines.
However several TRCO’s appointed did not have details of MQR in their personal files.

Refer to table 15.7 for details.
Table 15.7: Details of Officers with no Details of MQR FNPF Number 19097 2595295 2554370 2540250 2621259  Before either a letter of appointment or contract of appointment is issued, a candidate selected for appointment must undergo medical examination and be passed as being in all respects physically and mentally fit by an authorised Medical Officer.9 The employee must have a satisfactory police record.10 The Ministry did not obtain Police and Medical Clearance for several TRCOs prior to their appointment.
The Police and Medical Clearance were obtained for only eight TRCOs.

Refer to table 15.8 for details.
Table 15.8: Details of TRCOs without Police and Medical Clearance FNPF 2918689 19097 2595295 2554370 00436 2533917 MK0068 WY235 2572336 2508607 2220456 2535887 2621259 MN12623016P MN12915586H 27681 2576772 9 General Orders 2011 Section 203 (a) 10 General Orders 2011 Section 203 (b) Ministry of Justice Section 15: Page 10 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ FNPF 2922760 MN12927839C-00 2722301 2710221 MN12927859J-00 2607544 2619833 2211793 2927470 2603557 MN12721973L 2708859 2408592 2712882 MN12921780P-00 2726567 2619769 MN12923476W MN12606778U 2006536 The findings indicate that the Ministry did not follow proper recruitment procedures to recruit TRCOs.
As a result the Ministry may not have appointed the right calibre of officers.

Recommendation The Ministry should ensure that proper recruitment procedures are followed for recruiting TRCO’s into the civil service.

Ministry’s Comments The Ministry agrees that there is a need for transparency in terms of all appointments.
Ministry agrees to the recommendations provided and as a matter of ensuring good governance and transparency, we will ensure to make it mandatory that all appointments, regardless of appointment status will require the candidates to provide their police clearance and medical report prior to confirmation of appointment.
15.13 Non Compliance with Service Agreement by Service Provider The Ministry engaged a Service Provider to provide birth, death and marriage certificates to the people of Fiji since late 2008.

A service agreement between the Ministry and Service Provider was signed on 3/9/08 for issuing birth, death and marriage certificates to the people of Fiji from the nominated branches throughout Fiji.

Audit review of the BDM services provided by the Service Provider revealed the following anomalies.
Ministry of Justice Section 15: Page 11 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________  The Service Provider was to deliver all monies received for the Ministry directly to the Ministry by cheque.

Service Provider shall make this payment within 7 days from the end of each month.11 However, the revenue collected by Service Provider were not paid to the Ministry within seven days after the end of each month.
Except for the month of August, the Service Provider paid the revenue collected from issuing BDM certificates after significant delays for all the other months.

Refer to table 15.9 for details.
Table 15.9: Delay in Delivery of Monies by the Service Provider Months Amount ($) January February March April May June July August September October November December 24,623.80 17,608.80 16,484.10 16,037.90 7,707.30 13,896.60 16,175.90 13,519.40 16,599.60 15,642.30 16,599.10 13,756.30 Date Revenue Due to Ministry by Service Provider 7/2/15 7/3/15 7/4/15 7/5/15 7/6/15 7/7/15 7/8/15 7/9/15 7/10/15 7/11/15 7/12/15 7/1/15 Date Revenue Paid to the Ministry by Service Provider 13/2/15 26/3/15 13/5/15 13/5/15 29/6/15 9/7/15 10/8/15 7/9/15 2/11/15 26/11/15 22/12/15 5/2/16 Days Revenue Payments Delayed 6 19 36 6 22 2 3 - 26 19 15 29  The Service Provider shall be responsible for delivering the point of sale data file to the Ministry in a compressed format via e-mail on a daily basis.
The Service Provider did not deliver any point of sale data file to the Ministry since the service agreement was signed on 3/9/08.

The Ministry did not follow up with Service Provider for non- submission of point of sale data file.

Although the issue was also highlighted in the 2014 Audit Report, no corrective actions were taken by the Ministry.

 The Ministry should keep a record of the total number of certificate pages issued, number used and number unused by the Service Provider for the year.
The Ministry did not maintain record of the total number of certificate pages issued to Service Provider and the unused certificates held by Service Provider prior to 1/1/2015.

In addition, the Ministry issued total of 75,000 blank certificates to the Service Provider in 2015.

However the Service Provider remitted revenue for 80,953 certificates which excluded the spoilt certificates.

This indicates that the Service Provider had a large number of unused certificates as at 1/1/15.
However, the Ministry did not have any records of these unused certificates on hand with the Service Provider at the beginning of the year 2015.

The findings indicate that the Ministry did not properly monitor compliance of service agreement by the Service Provider.
11 Service Agreement between the Ministry and the Service Provider Clause 2.2 Ministry of Justice Section 15: Page 12 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Recommendations The Ministry should:     ensure the Service Provider submits revenues due to the Ministry within seven days from the end of each month; ensure the Service Provider submits the point of sale data file to the Ministry in a compressed format via e-mail on a daily basis; ensure the Service Provider returns all spoilt certificates to the Ministry within seven working days; and keep record of the total number of certificate pages issued, number used and number unused by Service Provider for the year.
Ministry’s Comments Delay in Delivery of monies by Service Provider.

The Ministry notes the irregularities in the submission of monies due to the Ministry within the timeframe required in the service agreement.

We are working to rectify this existing issue.

Non-Compliance by Service Provider on delivery of point of sale data file to the Ministry We agree that the point of sale date file was not submitted to the Ministry.

We did not follow-up to ensure compliance.


Following your audit findings, we have conveyed our concerns to Service Provider and they have acknowledged their oversight on this and have agreed to send the sale data file on a daily basis.
15.14 Missing Receipt Book If a receipt book is missing, the Principal Accounts Officer shall arrange advertisement in at least two daily newspapers specifying the serial numbers of the book and a statement disowning any liability incurred through unauthorised use of that receipt book.

The advertisement must be placed within two days of notification of the loss.12 The Ministry issued 20 receipt books to Government Service Centre (GSC) Suva starting from serial number 295101 to 296100 on 1/12/15.
The audit noted that one of the receipt books with serial number 295801 to 295850 was not included in the lodgements on 10/12/15 as it was missing.

The finding indicates lack of monitoring and supervision by senior officers for revenue receipts.

There is a high risk of misappropriation of revenue.

Recommendations The Ministry should investigate the matter and take appropriate disciplinary action against those responsible.
12 Ministry of Justice Finance Manual 2013 ,Section 5.8.7 Ministry of Justice Section 15: Page 13 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Ministry’s Comments The Ministry is now arranging for the advertisement.

In addition, the Head of Sections have been informed to adhere to the requirements of the Financial Manual and to immediately report to the Principal Accounts Officer on any case concerning missing receipt books.
15.15 Non-renewal of Moneylenders Licences Every moneylender, whether carrying on business alone or as a partner in a firm, shall take out annually in respect of every address at which he carries on his business as such a moneylender’s licenses which shall expire on the thirty-first day of December in every year.

13 A significant number of money lenders did not renew their money lenders licence every year for the past three years.
However, the Ministry did not take any action to verify whether these money lenders ceased to operate or were operating illegally.

Refer to table 15.10 for details of money lenders who did not renew their licence.
Table 15.10: Money Lenders Who Did Not Renew Their Licence 2013 – 2015 Years Number License Issued 2015 2014 2013 378 335 335 Number Licence Not Renewed In The Following Year 271 172 141 The audit also noted that the Ministry did not conduct any inspection of the licensed money lenders to ensure whether they were complying with Money Lenders Act.

The Ministry does not have proper monitoring system for money lenders licences.
Absence of a good monitoring system could result in illegal money lenders and non-compliance to the provisions of the Money Lenders Act.

Recommendations The Registrar of Companies should ensure that:   a proper monitoring system for the money lenders is in place; and money lenders comply with the Act through regular reviews.

Ministry’s Comments The Ministry notes the audit comments and agrees that we have significantly lagged behind in our core area of monitoring and ensuring compliance.
We have failed to take the required steps to ensure adherence by those who have been approved to operate as licensed moneylenders.

The Ministry notes that it requires a great deal of resources and manpower to ensure monitoring and compliance and views that it will make further requests in the upcoming budget submissions on the much needed funds to ensure that all requirements concerning compliance to the Money Lenders Act is fulfilled.

13 Moneylenders Act [Cap.
234], Section 5 (1) Ministry of Justice Section 15: Page 14 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ 15.16 Non Submission of Annual Returns Every company having a share capital, once at least in every year makes a return.14 Every company not having a share capital shall, once at least in every calendar year, make a return.15 The audit noted that some Government Commercial Companies have not submitted their annual returns to the Registrar of Companies Office for considerable period of time.
Refer to Table 15.11 for examples.

Table 15.11: Annual Returns not submitted by Government Commercial Companies Government Commercial Companies Company A Company B Company C Company D Company E Company F Company G Company H Company I Company J Company K Last Annual Return Submitted 31/12/13 31/12/07 No file 31/12/10 17/10/02 31/12/11 31/12/00 31/12/12 31/12/01 02/10/06 No file The Ministry does not have proper monitoring system for the submission of annual returns.
Absence of a good monitoring system could result in non-compliance to the provisions of the Companies Act.

Recommendation The Registrar of Companies should have a proper monitoring system to ensure all companies submit their annual returns in accordance with the Companies Act.

Ministry’s Comments The comments and recommendations by the Auditors are noted..

The Registrar of Companies Office continues to send reminders to ALL registered companies for annual returns lodgment to our Office.
These reminders are a success as note that the companies are now filing annual returns.

15.17 Poor Record Keeping by Official Receivers Office Creating and looking after records is central to the responsibilities of a public official.

Records provide information on what, where and when something was done and why and under what authority a decision was made.

It also provides evidence of government and individual activity and promotes accountability and transparency.
Audit review of the Official Receivers records noted the following anomalies: 14 Companies Act [Cap 247], Section 127 (1) 15 Companies Act [Cap 247], Section 128 (1) Ministry of Justice Section 15: Page 15 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________  The Official Receivers Office has the responsibility to keep proper records for all bankruptcy and insolvency cases with its current status.
The Official Receivers Office did not maintain a database to keep track of cases which are either pending or closed.

The current status of the pending cases was not updated in the case files.

In addition, bankruptcy and insolvency cases opened since the 1980’s were still open.

As a result, the audit could not ascertain the accuracy and completeness of the bankruptcy and insolvency cases.
 All notices and other documents for the service of which no special mode is directed may be sent by post to the last known address of the person to be served therewith.16 The Official Receivers Office did not have proof of identification such as photographs in the bankruptcy and insolvency case files.

Details such as addresses and place of employment were not maintained in the files.

As a result, the Ministry will not be able to track or publish the identification of the defaulters in the media.
 A Disaster Recovery Plan should be in place to ensure that all records are secure from data security breaches and natural disasters.

The Official Receivers Office did not have any offsite backups and Disaster Recovery Plan for all the bankruptcy and insolvency case files.

Not having a disaster recovery plan in place can put the Ministry at a high risk of records destroyed in a natural disaster or fire and loss of records.
 Scheduled reviews of credit limits are critical to ensure settings are appropriate for individual debtors.

Routinely monitoring the days outstanding is useful in identifying adverse trends in the debtor’s ledger and ensuring prompt action.

The Official Receivers office did not carry out any review of the outstanding debt to trace the frequency of debtor payments.

In addition, there were no indicators or “red flags” to alert the office if a debtor has been defaulting payments.
As a result, there is a high risk that debtors will continue to default debts which will increase the amount of bad debts for the Ministry.

 The Office has been following the fees structure outlined in the Bankruptcy Act 1978.

Apart from the VAT adjustment, the fees and charges have not been reviewed to reflect the current cost of providing the services.

Lack of resources and poor tracking system affects the service delivery of the Ministry.
Poor debt recovery mechanism could result in substantial loss of government revenue.
These issues were highlighted in the 2013 and 2014 Audit Report but no improvements have been noted 16 Bankruptcy Act [Cap 48], Section 127 Ministry of Justice Section 15: Page 16 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Recommendations The Ministry should:    ensure that record keeping at the Official Receivers Office is computerized to enable the Office to easily track the cases referred to them; ensure that the Official Receiver maintains proper records of the individuals/directors including their photograph; and prepare a Disaster Recovery Plan (DRP) for the Official Receivers Office.
Ministry’s Comments The anomalies highlighted by the Auditors are noted.

We agree that the Official Receivers Office does not have a proper database to record, lack of control mechanism in place to justify proof of identification on debtors and directors of insolvency cases, absence of offsite backups and Disaster Recovery Plans and absence of review of fees and charges.

Ministry confirms to work on these areas for improvements.
Ministry of Justice Section 15: Page 17 Senior Administrative Officer Principal Accounts Officer Assistant Accounts Officer Official Receivers Assistant Accounts Officer Payments/ Ledgers Senior Secretary REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ APPENDIX 15.1: Details of Vacant Position of the Ministry Item Vacant Post Grade Salary Vacant Since Details of Acting MQR Met (Yes/No) General Administration and Accounts SS02 $29,530 30/3/15 Officer on SS03 Grade EDP Yes Number 62364 acting on SS02 since 1/1/16.
AC01 $44,720 22/5/13 Officer on AC02 Grade EDP Number 48413 acting on AC01 1/1/16.

AC04 $21,497 6/11/12 Officer on SS05 Grade EDP No No Number 90887 acting on AC04 since 25/5/15.

AC04 $21,497 6/11/12 Officer on SS05 Grade EDP Yes SS03 $23,458 Statistician Executive Officer SP03 SS04 $23,458 $19,069 Number 92767 acting on AC04 since 1/7/15.

16/7/12 Officer on SS05 Grade EDP Number 90890 acting from 26/10/15 to 25/01/16.

6/11/12 No one acting on this position.


26/6/12 Officer on SS05 Grade EDP Number 95132 acting since 1/1/16.

Clerical Officer SS05 $12,659 6/11/12 TRCO held against substantively vacant post since 19/7/13.

Clerical Officer SS05 $12,659 6/11/12 TRCO held against substantively 10 Technical Assistant Companies Office 11 12 13 Principal Administrative Officer Senior Administrative Officer Assistant Registrar TG06 $12,659 6/11/12 No one acting on this position.

vacant post since 20/8/13.


SS01 $39,452 6/11/12 Retired Officer on SSO2 Grade EDP Number 45075 re-engaged since 30/3/15.

SS02 $29,530 SS03 $23,458 18/8/12 Officer on SS04 Grade EDP Number 64671 acting since 01/07/15.

31/12/12 Officer on SS05 Grade EDP Number 90893 acting since 1/7/15.

Yes - No details of Qualifications in the Officers person file.

Yes Yes - No details of Qualifications in the Officers person file.
No No 14 Clerical Officer SS05 $12,659 31/12/12 TRCO held against substantively Yes vacant post since 25/7/12.

15 Clerical Officer SS05 $12,659 6/11/12 TRCO held against substantively 16 17 18 Clerical Officer Clerical Officer SS05 SS05 $12,659 $12,659 vacant post since 12/2/13.

6/11/12 No one acting on this position.

6/11/12 TRCO held against substantively vacant post since 1/3/13.

Technical Assistant Official Receiver's Office TG06 $12,659 6/11/12 No one acting on this position.

File not provided.
- Yes - Ministry of Justice Section 15: Page 18 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Item Vacant Post Grade Salary Vacant Since Details of Acting 19 20 21 22 Senior Administrative Officer Senior Administrative Officer Administrative Officer (D/Official Receiver) Executive Officer SS02 $29,530 SS02 $29,530 SS03 $23,458 SS04 $19,069 Births, Deaths & Marriages 23 24 25 Principal Administrative Officer Senior Administrative Officer Senior Assistant Registrar SS01 $39,452 SS02 $29,530 SS02 $29,530 26 Administrative Officer SS03 $23,458 27 Administrative Officer SS03 $23,458 6/11/12 Officer on SS05 Grade EDP Number 63596 acting since 1/1/15.
10/12/12 Officer on SS03 Grade EDP Number 53464 acting since 1/1/15.

16/1/12 Officer on SS05 Grade EDP Number 93119 acting since 20/9/15.

6/11/12 Officer on SS05 Grade EDP Number 60522 acting since 20/9/15.

6/11/12 Officer on SS04 Grade EDP Number 53485 acting since 1/1/15.

6/11/12 Officer on SS04 Grade EDP Number 53903 acting since 1/1/15.

31/7/14 Officer on SS04 Grade EDP Number 60138 acting since 1/4/15.

6/11/12 Officer on SS05 Grade EDP Number 63016 acting since 1/4/15.
11/2/15 Officer on SS04 Grade EDP Number 60648 acting since 11/2/15.

28 Clerical Officer SS05 $12,659 23/4/12 TRCO held against substantively 29 Clerical Officer SS05 $12,659 30 Clerical Officer SS05 $12,659 31 Clerical Officer SS05 $12,659 SS05 SS05 $12,659 $13,191 vacant post since 1/7/15.

1/4/11 TRCO held against substantively vacant post since 13/8/12.

Appointment terminated on 6/1/16.

3/9/12 TRCO held against substantively vacant post since 9/9/13.
23/5/14 TRCO held against substantively vacant post since 23/11/15.

6/11/12 No one acting on this position.

4/10/12 No one acting on this position.

SS05 $18,420 7/8/15 No one acting on this position.

SS05 $13,191 1/3/13 No one acting on this position.

SS05 $12,659 1/10/15 No one acting on this position.

MQR Met (Yes/No) File not provided.

No details of Qualifications in the Officers person file.

No No details of Qualifications in the Officers person file.


Yes No details of Qualifications in the Officers person file.

No details of Qualifications in the Officers person file.

Yes File not provided.

File not provided.

File not provided.

File not provided.
- - - - - 32 33 34 35 36 Clerical Officer Steno Typist / Typist Steno Typist / Typist Data Entry Operator Data Entry Operator Titles Office Ministry of Justice Section 15: Page 19 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Item Vacant Post Grade Salary Vacant Since Details of Acting 37 38 Principal Legal Officer Deputy Registrar of Titles LG03 $45,529 SS02 $29,530 39 40 Executive Officer Executive Officer SS04 SS04 $19,069 $19,069 25/6/12 Principal Legal Officer from AG Chambers acting since 11/1/16.
6/11/12 Officer on SS03 Grade EDP Number 49837 acting since 1/1/15.

6/11/12 No one acting on this position.

6/11/12 Officer on SS05 Grade EDP Number 90994 acting since 5/11/15.

MQR Met (Yes/No) File not provided.

No details of Qualifications in the Officers person file.

- Yes 41 Clerical Officer SS05 $12,659 6/11/12 TRCO held against substantively Yes vacant post since 16/7/13.

42 Clerical Officer SS05 $12,659 6/11/12 TRCO held against substantively vacant post since 16/7/13.
43 Clerical Officer SS05 $12,659 6/11/12 TRCO held against substantively vacant post since 17/7/13.

44 Clerical Officer SS05 $12,659 6/11/12 TRCO held against substantively TG06 $12,659 6/11/12 TRCO held against substantively vacant post since 16/7/13.

vacant post since 23/8/13.

File not provided.

No details of Qualifications in the Officers person file.

Yes Yes TG06 $10,102 6/11/12 No one acting on this position.
- 45 46 Technical Assistant (Book Binding) Technical Assistant (Book Binding) Ministry of Justice Section 15: Page 20 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Section 15A Fiji Corrections Service Roles and Responsibilities The Fiji Corrections Service is responsible for the safety and security, the humane treatment and the provision of relevant and appropriate behavioral intervention programmes for all those committed to our custody by the Courts.
Under the framework of the Peoples’ Charter for Change Peace and Progress and the Fiji Corrections Act 2006 and the 2013 Constitution, Chapter 2; Section 26, Chapter 5; Section 98,99,100,101,102,118,119, Chapter 6; Section 130, Chapter 7 and 8 , the Department has continuously focused on enhancing the quality of custodial care, reviewing the relevancy and effectiveness of inmates’ rehabilitation programmes, developing its human resources capacity and capability, promoting the effective and efficient use of resources and its active participation in the major Government reforms to modernize the service.
Table of Contents PART A: PART B: FINANCIAL STATEMENTS .............................................................................................................................. 1 15A.1 Audit Opinion ............................................................................................................................................................ 1 15A.2 Statement of Receipts and Expenditure ................................................................................................................... 1 15A.3 Appropriation Statement .......................................................................................................................................... 2 15A.4 Trust Account Statement of Receipts and Payments ............................................................................................... 3 15A.5 Trade and Manufacturing Account ........................................................................................................................... 3 AUDIT FINDINGS .............................................................................................................................................. 5 15A.6 Variance between TMA Bank Reconciliation Balance and FMIS General Ledger Cash at Bank Closing Balance .
5 15A.7 Non Proper Inventory Recording System ................................................................................................................. 5 15A.8 Liabilities Recognized Contrary To the Nature of the Account ................................................................................. 8 15A.9 Write-Offs ................................................................................................................................................................. 8 15A.10 Conflict of Interest ................................................................................................................................................... 9 15A.11 Purchases Made Without Tender Board Approval ................................................................................................. 13 15A.12 Discrepancies in Tally Card Records ..................................................................................................................... 14 15A.13 Anomalies Noted In Procurement of Goods and Services ..................................................................................... 15 APPENDIX 15A.1: Examples of Purchases & Deductions Made For Naboro Mart Limited ............................................. 18 PART A: FINANCIAL STATEMENTS 15A.1 Audit Opinion The audit of the 2015 accounts of the Fiji Corrections Service resulted in the issue of an unqualified audit report.
15A.2 Statement of Receipts and Expenditure The Department collected total revenue of $100,440 and incurred expenditure totaling $34,814,004 in 2015.

Refer to Table 15A.1 below for details.
Fiji Corrections Service Section 15A: Page 1 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Table 15A.1: Statement of Receipts and Expenditure for 2015 Description RECEIPTS State Revenue Miscellaneous Fee Agency Revenue TOTAL REVENUE EXPENDITURE Operating Established Staff Unestablished Staff Travel and Communication Maintenance and Operations Purchase of Goods and Services Operating Grants and Transfers Special Expenditure Total Operating Expenditure Capital Expenditure Construction Purchases Total Capital Expenditure Value Added Tax TOTAL EXPENDITURE 2015 ($) 2014 ($) Total revenue increased by $37,865 or 60.5% due to Department taking over cremation segments at Vatuwaqa and Nasinu cemeteries.
Total expenditure increased by $3,278,007 or 10% in 2015 compared to 2014.

The increase was mainly due to increase in operating costs relating to Established staff as funds were allocated for appointment of 105 recruits as approved by Cabinet Decision No.

356 dated 23rd October 2012 for recruitment of 315 Correction Officers’ within 3 year effective 2013 – 2015.
Major increase was also noted in Special Expenditure which was attributed to the Poverty Alleviation Programme for inmates upon completion of their custodial sentence for enhancing their livelihood which was held by Department of Social Welfare prior to 2015.

The Department provided assistance to 103 inmates during the year.

Moreover, the Department also incurred expenditure for the Pacific Islands Regional Conference for Women’s in Corrections held in July 2015 at Holiday Inn Suva.
In addition, capital construction costs also increased significantly due to timely implementation of capital construction projects.

These included construction of new Lautoka Remand Centre including construction and completion of Block 1 – Accommodation Building, New Administration Office and commencement of fencing works.

The department also utilized funds allocated for construction of New Lautoka Womens’ facility.
15A.3 Appropriation Statement The Department incurred a total expenditure of $34,814,004 against the revised budget of $38,047,300 resulting in a savings of $3,233,296 or 8%.

Details of expenditure against the budget estimate are provided in Table 15A.2.
Fiji Corrections Service Section 15A: Page 2 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Table 15A.2: Appropriation Statement for 2015 SEG Item of Goods & Established Staff Government Wage Earners Travel & Communication Maintenance & Operations Purchase Services Operating Grants & Transfer Special Expenditure Total Operating Costs Construction Purchases Total Capital Expenditure Value Added Tax TOTAL EXPENDITURE Budget Estimate ($) 21,599,258 34,656 440,670 1,663,500 Change ($) (1,129,483) --- 53,496 474,201 Revised Estimate ($) 20,469,775 34,656 494,166 2,137,701 Actual Expenditure ($) 19,093,500 32,510 446,788 2,005,808 Lapsed Appropriation ($) 1,376,275 2,146 47,378 131,893 3,188,928 506,163 3,695,091 3,493,123 201,968 46,260 500,000 27,473,272 7,619,150 820,000 8,439,150 2,134,878 38,047,300 (27,450) 123,073 --- (135,747) 135,747 --- --- --- 18,810 623,073 27,473,272 7,483,403 955,747 8,439,150 2,134,878 38,047,300 16,113 594,548 25,682,390 6,264,343 909,922 7,174,265 1,957,349 34,814,004 2,697 28,525 1,790,882 1,219,060 45,825 1,264,885 177,529 3,233,296 15A.4 Trust Account Statement of Receipts and Payments Table 15A.3: Trust Account Statement for 2015 Trust Fund Account 2015 ($) 2014 ($) Receipts Prisoners Cash Total Receipts Payments Prisoners Cash Total Payments Balance as at 1 January 2015 CLOSING BALANCE 319,570 319,570 145,762 145,762 283,581 457,389 265,388 265,388 188,010 188,010 206,203 283,581 15A.5 Trade and Manufacturing Account Table 15A.4: Manufacturing Account for 2015 Manufacturing Account Opening Raw Material Add: Purchases Less: Closing Raw Materials Raw Material Used Add: Opening Work in progress Add: Direct Labour Less: Closing Work In Progress Cost of Goods Manufactured transferred to Trading Account 2015 ($) 116,530 1,681,591 150,988 1,647,133 2,725 30,945 58,031 2014 ($) 17,799 1,566,462 116,530 1,467,731 --- 8,265 2,725 1,622,772 1,473,271 Fiji Corrections Service Section 15A: Page 3 REPORT OF THE AUDITOR
 GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Table 15A.5: Trading Account for 2015 Trading Account Sales Opening stock Add: Cost of Manufactured Goods Less: Closing Finished Goods Cost of Goods Sold Gross Profit transferred to Profit & Loss Statement 2015 ($) 2,462,430 440,123 1,622,772 459,387 1,603,508 2014 ($) 1,634,800 262,905 1,473,271 440,123 1,296,053 858,922 338,747 Table 15A.6: Profit & Loss Statement for 2015 Profit and Loss Statement Income Gross Profit transferred from Trading A/C Other Income Total Income Expenses Travel & Communication Maintenance & Operation Other Expenses Special Expenses VAT Total Expense Net Profit Table 15A.7: Balance Sheet for 2015 2015 ($) 2014 ($) 858,922 --- 858,922 3,363 367,082 --- --- --- 370,445 488,477 338,747 --- 338,747 823 87,467 --- --- --- 88,290 250,457 Balance Sheet 2015 ($) 2014 ($) Assets Cash at Bank Debtors Raw Material Work in progress Finished Goods Total Assets Liability Deposit, Deduction and Retention Money Total Liability Net Assets Equity Appropriation from CFA and TMA Operation TMA Accumulated Surplus Net Profit Net Equity 315,781 151,745 150,988 58,031 459,387 1,135,932 (4,982) (4,982) 1,140,914 116,751 535,686 488,477 1,140,914 162,368 ---- 116,530 2,725 440,123 721,746 9,313 9,313 712,433 116,751 345,225 250,457 712,433 Fiji Corrections Service Section 15A: Page 4 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ PART B: AUDIT FINDINGS 15A.6 Variance between TMA Bank Reconciliation Balance and FMIS General Ledger Cash at Bank Closing Balance The officer(s) authorized to access the FMIS shall ensure that all transactions or postings that lead to differences in the three (3) records (Bank Statement, Cash Book & GL [FMIS] for the current reporting months bank reconciliation statement are to be: (a) Supported with documentary evidence; and (b) Adjusted and cleared off to respective records within the next month1.
As at 31/12/2015, there was a variance of $186,576.77 between closing bank reconciliation balance and FMIS general ledger balance.

The variance was caused by posting errors and outstanding electronic funds transfers that were not posted to the general ledger.

Although in 2016 the Department identified and made adjustment totalling $174,180.27 in the general ledger to rectify the issue, a variance of $12,396.50 remains to be resolved.

Refer Table 15A.8 below for details.


Table 15A.8: Variance between Bank Reconciliation Closing Balance and FMIS General Ledger Particulars Bank Reconciliation Closing Balance General Ledger Balance [4-15251-71999-540101] Variance Amount ($) 303,384.56 489,961.33 186,576.77 Adjustments made in 2016 ($) (174,180.27) Amount ($) 303,384.56 315,781.06 12,396.50 Lack of timely reconciliation and corrective actions has resulted in the overstatement of the Cash at Bank balance as at 31 December 2015.
Recommendations   The Department should ensure variances between bank reconciliation and FMIS general ledger balances are investigated and rectified in a timely manner.

The Department must comply with TMA Policy at all times.

Management Comments The Fiji Correction Services agrees that there were variances existing in its TMA bank reconciliation as at 31st December.

Majority of variances existing have been addressed through Journal Vouchers and resolved in 2016.
15A.7 Non Proper Inventory Recording System Inventories which are material in value must be recorded in an inventory system2.

The Production Supervisor must record all manufacturing jobs on a job record sheet.

The job record sheet shall provide the job number, type of work carried out, number of hours spent on job and materials used3.
1 TMA Policy June 2015 – Section 7.7 2 Finance Instructions 2010 – Section 37 Fiji Corrections Service Section 15A: Page 5 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ The Department operates 7 TMA’s namely Poultry, Bakery, Crops, Joinery, Piggery, Tailor and Vegetables.

The audit noted that the Department did not maintain proper inventory records to substantiate the quantity of TMA production and movement of inventory for the year ended 31/12/15.
Closing inventory balance reflected in the financial statement was determined through a physical stock count which was not checked against any record of stock movement during the year.

Analysis of production to sales was also not possible due to lack of records.

Refer Table 15A.9 below for an analysis of production and sales carried out during audit.
Table 15A.9: Sales of Individual TMA’s in 2015 TMA’s Sales as per the Production Report ($) Sales as per GL Variance ($) ($) Comments Bakery 167,076.41 Crops Not Provided 272,785.99 Not provided January - July Production Report not submitted.

Only August till December reports were submitted.

291,777.86 Not provided There was no record kept as on how many bags of cassava, bundles of Dalo and/or tonnes of Ginger were harvested.
Joinery Piggery 113,318.50 Not Provided 136,018.51 608,148.40 Not provided Only the count of Piglet was noted.

There were no records on (22,700.01) Variance noted Honey Poultry 435.00 633,384.00 435.00 668,908.77 Tailor 399,897.99 369,064.07 how many pigs were available for sale in a particular month.

- No variance noted (35,524.77) Apart from sale of eggs, the TMA sold meat birds and cockerel, but there were no records of how many meat birds and cockerels were ready for sale on a particular month.
30,833.92 The variance is because of production of ready-made clothes which was sold during Hibiscus festival and road shows and no record were kept for these.

Clothes that were not sold were kept in the bulk, now upon completion of the new tailor outlet, these stock are kept in the store ready for sale.

Vegetable Not 115,569.19 Not provided There was no record of how many bundles or bags of Provided vegetables were harvested in a particular month.
Total 2,462,707.79 Not provided In addition, except for revenue collection, stock take and procurement, Standard Operating Procedures (SOPs) outlining the operations of individual TMA’s daily operation were not provided for audit review.

The risk of pilferage for inventory is high given the lack of proper inventory management system.

Recommendations  The Department should ensure that proper inventory records are maintained for respective TMA’s and reconciled on a monthly basis.
 The Department should develop SOPs outlining TMA processes.

3 Fiji Corrections Service Finance Manual Section 6.2.3 Fiji Corrections Service Section 15A: Page 6 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Management Comments The department concurs with the audit findings that the department’s TMA Units did not maintain proper inventory records to substantiate the quantity of TMA production and movement of inventory for the year ended 31/12/15.
However the ending inventory amount in the financial statement was determined through a physical stock count.

The departments also conducts stock take on monthly basis within 3rd of the new month to ensure proper inventory records of respective TMA’s are computed and submitted on quarterly basis to Ministry of Finance (Asset Management unit).

The Enterprise agrees with the recommendation provided by Office of the Auditor General.
Keeping track of what is happening in respective SBU’s requires some records, a good record do not ensure the SBU’s will be successful, however success is unlikely without them Keeping records of production is critical which assist the respective SBU’s to analyze what worked and what did not, analysis are made if production was the same as previous years or not.

Combining these records with the cash flow records will enable each SBU’s to see that if they were profitable or not.
Recommendation I “The department should ensure to maintain proper inventory records for respective TMA’s and reconciled on a monthly basis” Upon discussion with each SBU’s team leader an understanding was made that effective immediately each SBU will keep and submit their production report together with monthly return at the end of each month upon reconciling against the sales.

The team leaders and TMA officers has the responsibility for timely submission of production report.
Staff officer Enterprise (SOE) from TMA has the responsibility to check and ensure production report to be submitted to TMA Supervisor (BDM) Head Quarters without failure.

Previous years it was noted that no production report was kept due to insufficient accounting background of officers and team leaders, thus to correct that, timely training has been conducted by Business Development Manager, Staff officer Enterprise and Accounts Officer.
Recommendation II “The department should develop a Standard Operating Procedure outlined TMA processes and made available upon request” In comparison with any other SOP, it is developed to guide officers and respective SBU’s for effective operating processes to be in place.

It establishes guidelines for Enterprise unit in line with Agency Financial Manual taking into account the nature and environment of TMA Operations.
Currently TMA Enterprise has developed three (3) SOPs’ for effective operation which includes; Revenue Collection and Reporting, Procurement, and Stock Take.

Taking into consideration of recommendation 1, it is important to develop SOP which will guide TMA officers and Team Leaders in proper record keeping and timely submission of monthly return.
Discussion with TMA staff have been made to provide guideline which shall assist Accounts section (NHQ) in developing Standing Operating Procedures for each respective SBU, assisting the team leader in maintaining a very reliable production report which is matched against sales.

The SOP shall be available for officers by June 2016 in line with Agency Financial Manual which shall assist them in there submission of monthly returns and production reports.
Fiji Corrections Service Section 15A: Page 7 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ 15A.8 Liabilities Recognized Contrary To the Nature of the Account A liability is a present obligation of the entity arising from past events, the settlement of which is expected to result in an outflow from the entity of resources embodying economic benefits.4 Liabilities, revenues and sales, gains, and owner equity and stockholders' equity accounts normally have credit balances.
These accounts will see their balances increase when the account is credited.

Contrary to the nature of liability account, the audit noted that the Department recognized liability with debit balance of $4,982 in its financial statements as at 31/12/15.Refer Table 15A.10 below for details.
Table 15A.10: Liability Account Showing Debit Balance Account Description 4-15200-00000-860000 Liability - Deposits and Retention Money Amount ($) 4,982.06 As a result audit was not able to substantiate the accuracy of the liabilities balance recorded in the financial statements as at 31/12/15.

Recommendation The Department should ensure that correct nature of balances is reflected in its financial statements.

Management Comments The debit balance of $4,982.06 reflects on the general ledger.
This figure has accumulated from vat allocation which is for Bakery, Joinery and Tailor.

A credit balance reflects that there were high vat paid on purchase compared to less vat on sales, whereas debit balance reflects on the GL, that there was less vat paid on purchases compared to high vat on sales.

Individual SBU vat allocation for Bakery, Joinery and Tailor as at 31 December 2015 I. II.

III.
III.

Bakery 4-15252-91151-863201 Joinery 4-15255-91151-863201 Tailor 4-15258-91151-863201 (6,528.36) 285.15 11,225.27 15A.9 Write-Offs The Accounts Officer is responsible for maintaining ledgers and reconciling balances in such ledgers to ensure the accuracy of financial information and the timeliness of management reports.5 The audit noted that in 2016, the Ministry of Finance approved the following adjustments to the Department’s general ledger balances for the year ended 31/12/15.
Refer Table 15A.11 for details.
4 GAAP Conceptual Framework for Financial Reporting 5 Fiji Correction Services Finance Manual 2013, Section 16 Fiji Corrections Service Section 15A: Page 8 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Table 15A.11: Write-offs Approved by Ministry of Finance General Ledger Account Description Amount ($) Remarks Fund 1 Accounts Receivables 1-15201-71999-560615 1-15201-71999-560607 1-15201-99011-560616 1-15201-71999-560621 Total PD LICI 400 PD Fines & Treasury PD Handy Finance PD FPS Credit Union (2,249.65) Has a double posting from 2012 (4,924.40) Has a double posting from 2013 (60.00) Has a double posting from 2013 (304.50) Has a double posting from 2012 (7,538.55) Fund 4 Cash 4-15251-71999-540101 TMA Dominion Cash ANZ 62,573.87 Clerical Error and EFT Issued in December 2014 but presented in January 2015.
The above write- off indicates lack of monitoring and improper account balance reconciliations in prior years.

Recommendations   The Department should ensure that valid transactions are posted into the general ledger and proper reconciliations are carried out on a timely manner.

The Department should carry out regular review of accounts which are static and consult Ministry of Finance to ensure that balances are fully supported and are valid amounts.
Management Comments The balances tabulated in the report were sitting as liabilities [SLG 86] way back in 2012 and 2013.

All balances should be read as credit balances in the liability account; unfortunately it was hanging as debit balances without any contra credit to offset the liability.

MoF made the recommendation to shift the debits to Accounts Receivable [SEG 56] since no write off should be performed in the liability account [SLG 86].
Actually MoEs write-off recommendation was welcomed taking into account the long pending debit balance in a liability account, is to be cleared off once for all, considering there were no real monetary losses incurred.

The fund 4 clerical error as alluded in the report cannot really be justified as an error.

If the issue is an error, a JV should be raised to address the error.
This so called error is beyond FCS control where-by FMIS has made a stand not to capture the payment in the current accounting period but did so in the next accounting period.

The clerical input has been completed accordingly by complying with the accounting processes but, as already mentioned the authority to capture the validity in accounting periods is not at the liberty of FCS.
15A.10 Conflict of Interest The public sector officials are expected to have the highest ethical standards particularly for integrity and honesty.

Public sector officials are expected to disclose, and take reasonable steps to avoid, any conflict of interest (real or apparent) in connection with employment in the public service.

An employee must use public resources and assets in a proper way.
A public sector employee must not make improper use of official information or of the employee's duties, status, power or authority in order to gain a benefit or advantage for the employee or for anyone else.

Fiji Corrections Service Section 15A: Page 9 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ A conflict of interest arises where two different interests intersect.
In the public sector, a conflict of interest exists where a person’s duties or responsibilities to a public entity could be affected by some other separate (and usually private) interest or duty that he or she may have.

Conflicts can exist if the circumstances create a risk that decisions may be influenced, regardless of whether the individual actually benefits.

The perception of competing interests, impaired judgement or undue influence can also be a conflict of interest.
Conflicts might occur if individuals have, for example:  a direct or indirect financial interest;  non-financial or personal interests; or  conflicts of loyalty where decision-makers have competing loyalties between an organisation they owe a primary duty to and some other person or entity.

Conflicts of interest can bring decision-making into disrepute, if not well-managed.

Often the perception of conflict is alone enough to cause concern.
This can lead to reputational damage and undermine public confidence in the integrity of the institution.6 Public officials are expected to make decisions and act without consideration of their private interests.
Public service being a public trust, the improper use of a public service position for private advantage is regarded as a serious breach of professional integrity.7 The officers of the Fiji Correction Services Department set up a private company, Naboro Mart Limited (also referred to as Naboro Mini Mart) as a business venture in 2011.

The business operates retail shops at four major corrections facilities namely, Naboro, Suva, Natabua and Vaturekuka.
The business venture sells directly to staffs mainly on credit and also has been supplying certain products to the Fiji Correction Services Department.

In addition to selling groceries, the company has also been assisting staff with the refinancing and debt consolidation, car sales and housing.

The department facilitates direct salary deductions for staffs for the repayment of staff loan or credit sale from the company.
The audit noted the following instances of conflict of interest in the Department: 1) The FCS officers are operating a private company, Naboro Mart Limited on the FCS premises in Naboro, Suva, Natabua and Vaturekuka.

Locating the shops, a private business operation, on government premises poses a conflict of interest on the official and management of the Department as they have direct interest in the shops and are utilising public resources (premises: land and/or building) for their own private benefits.
Refer to Table 15A.12 for ownership details of the Naboro Mart Limited business as per business registration: Table 15A.12: Directors for Naboro Mart Limited EDP Number 91281 70694 64927 Business Occupation8 Director Director Director & Company Secretary Shares Held 2,500 2,500 2,500 6 Adapted from report on Conflict of Interest - UK National Audit Office 2013 7 Organisation for Economic Co-operation & Development 2003 Managing Conflict of Interest in the Public Service 8 Form No.
203 dated 13/10/2011 Fiji Corrections Service Section 15A: Page 10 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ EDP Number 70813 Business Occupation8 Director Total Shares Shares Held 2,500 10,000 2) In 2015, the audit noted that the Department paid Naboro Mart Limited a sum totalling $882,528.17 in relation to staff deductions for their personal credit purchases made from Naboro Mart Limited and purchase of goods for Department’s operation.
Refer to Appendix 15A.1 for details.

Review of payroll records revealed that there were excessive deductions for some officers who were paying as high as 92% of their weekly pay to the Naboro Mart Limited.

The department breached the maximum allowable deductions of 50% of gross wages in facilitating deductions for the Naboro Mart Limited.
3) The audit further noted that Naboro Mart Limited paid $90,000 and $116,5009 to Fiji Corrections Service Welfare and Sports Association Fund (FCSWAF) in 2014 and 2015 respectively.

Staffs also contribute $5 per fortnight through salary deductions towards the FCSWAF.

The department’s close business dealings with the Naboro Mart Limited serve mainly the interest of the members of the Naboro Mart Limited and the FCS Welfare and Sports Association Fund.
4) Naboro Mart Limited has also been reported to be supplying certain products even though it is not an approved government vendor for contracted supplies.

5) Audit visit to Naboro Complex on 26/11/15 revealed that a Prison Officer Class B (EDP # 70990) was employed by the Department at an annual salary of $19,671 and was working full time as a Manager for the private company, Naboro Mart Limited.
Despite being paid by government, the officer was serving only the interests of the owners of the private company instead of government.

6) The audit also observed that Warden’s rugby records and FCS Welfare and Sports Association Fund are maintained by former Commissioner‘s Secretary (EDP number 58834) based at FCS Headquarters.

The Department is also operating Fiji Correction Services Savings and Credit Union (FCSSCU) at the Suva Correction Centre.
Review of the vehicle running sheets during audit revealed that Department’s operational vehicles were used by the private company, Naboro Mart Limited and staff (private) credit union.

Refer to Table 15A.13 below for examples.


Table 15A.13: Examples of Mis-use of Department’s Operational Vehicles Date GP681 14/09/15 15/09/15 GP793 16/10/15 16/10/15 Opening Mileage Closing Mileage Mileage (km) Remarks 18103 18139 38746 38764 18117 18147 38753 38765 14 Minimart run 8 Minimart run 7 Conveying credit union officer 1 Minimart run The above findings highlight instances of abuse and conflict of interest for officers of the Fiji Correction Services.
The creation and consequently, locating the shops of the Naboro Mart Limited on government premises pose the major source of conflict of interest for FCS staffs.

Serving personal and private interests with government resources contravene the code of conduct.

The trust placed on public officers with perceived and actual conflict of interest will be eroded.
9 From 24/03/15 to 23/11/15 Fiji Corrections Service Section 15A: Page 11 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ The resources used including time of officers used to facilitate the operation of the Naboro Mart Limited and the Credit Union does not serve public or government interest.

These are private interests which are in conflict with the public interests.
Procurements from the Naboro Mart Limited and excessive deductions from staff towards the company are ultimately targeted at boosting the profitability of the company owned by the officers of the Department.

The company benefited from the official information and powers of the officers to arrange procurements and excessive deductions.
Recommendations The Department should:      ensure that staffs are not involved in carrying out private business activities during working hours; conflict of interest of staffs is properly declared and managed.

recover the salary for the Officer (EDP # 70990) from Naboro Mart Limited since he was paid by Government while working for Naboro Mart Limited.

its resources and assets are used only for authorised and official purposes and not for the private benefits of the staffs.
ensure that the operation of private shops belonging to Department officials on Government premises is discontinued.

Management Comments We concur with the audit findings and acknowledge the issues being highlighted within the audit findings 7.1.

The FCS, had in 2011 set up Naboro Mart Limited, which had resulted upon the failure of its Co-operative Shop operated from Naboro Corrections Centre.
The Naboro Mart limited was incorporated by the Management to assist its officer’s residing within the Naboro Corrections Centre with their day to day retail shop needs.

In order for Naboro Mart Limited to be registered under the Companies Act, it was required to submit names of its directors as office bearers.
Thus, the directors being nominated including the Commissioner of Corrections had on direct vested interest or any forms of benefit remitted on their nominations as directors for Naboro Mart Limited.

Moreover, due to convenience to the staffs of Naboro Corrections Centre upon incorporation of Naboro Mart Limit the other shops was also opened within other divisions such as western (Lautoka), Central Eastern (Suva) and Northern (Vaturekuka) to assist and provide similar service to other officers’.
The department was facilitating direct deduction for Naboro Mart Limited as irrevocable deductions since 2011 for staffs purchasing goods on credit.

These staffs had eventually agreed with the Naboro Mart Limit for such amounts to be deducted on fortnightly basis.

The Naboro Mart limited was remitting funds as dividend on monthly basis to Fiji Corrections Services Staffs Welfare and Sports, which initially funded the growth of Naboro Mart Limit.
These funds were later provided through the Fiji Corrections Service Staffs Welfare to member of FCS as finances for education, property and other commitments as approved by the Commissioner of Corrections.

The FCS TMA had procured certain goods from Naboro Mart Limited to sustain its operations caused by urgency of situation and distance with National Headquarters.
However, the department had stopped such purchasing from Naboro Mart Limited and ensures compliance to approved Government Contractors by implementing proper TMA structure and through implementation of adequate procurement procedures.
The Fiji Corrections Service had assigned Prison Officer Class B (EDP # 70990) to Naboro Mart Limited for supervision of Inmates working with Mart Limited as part of Job Placement Initiative by the Fiji Corrections Fiji Corrections Service Section 15A: Page 12 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Service.
Thus, the Officer has no interest with the Naboro Mart Limited and is solely held responsible for ensuring security for Inmates attached at Naboro Mart Limited.

The use of Vehicles for runs for church parade is being for official activity of the department considering its quarterly activity for Staff Welfare and discipline.
The other runs for Minimart, conveying credit Union officer and dropping rugby team is for departments re- creational and staffs’ spiritual activities and approved in-line within the vested powers of the Commissioner of Corrections Services similar to the powers vested to the Commissioner of Police and the Commander of RFMF.
Furthermore, the department has its own standing orders, Commissioners orders and Corrections Act 2006 as applicable legislations instead of PSC Code of Conducts which is not applicable to the Fiji Corrections Service.

The Department is now intending to wind-up the Mart Limited operating within government premises as a way- forward to address the issues being highlighted.
15A.11 Purchases Made Without Tender Board Approval Public tenders must be called for any procurement of goods, services or works valued at $50,001 or more, unless a Tender Board has approved an exemption in accordance with Procurement Regulation 30-(1).10 The audit noted that from February 2015 to October 2015, the Department purchased livestock feeds11 from a Company for amount totalling $422,463 without any tender contrary to the Department’s Finance Manual Section 2.3.1.
Refer to Table 15A.14 below for details of payment made to the Company: Table 15A.14: Details of Payments Made To One Company without Any Tender Date 19/02/15 19/03/15 17/04/15 13/05/15 29/05/15 24/06/15 07/08/15 17/08/15 08/09/15 25/09/15 06/10/15 23/10/15 EFT Number 366 398 424 441 450 480 516 526 551 578 586 617 Amount ($) 1,000 58,188 44,615 8,900 8,900 71,580 41,605 3,750 65,445 1,125 7,095 110,260 422,463 Proper procurement procedures were not followed by the Department in procuring goods from the Company and there is a high risk of unauthorized purchases being made without tender board approval.
The risk of collusion with unauthorized suppliers is also high.
10 Fiji Corrections Service – Finance Manual –Section 2.3.1 11 layer mesh, broiler and grower finisher, broiler grower, grower crumble, pig wiener and grower, layer birds, layer chicken starter, meat birds and egg trays Fiji Corrections Service Section 15A: Page 13 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Recommendation The Department should ensure that Tender Board approval is sought for the procurement of goods and services valued more than $50,000 as required under Section 2.3.1 of the Department’s Finance Manual.
Management Comments We concur with the audit finding that public tender must be called for any procurement of goods, service or works valued at $50,001 or more, unless a tender board has approved an exemption in accordance with procurement regulation 30-(1).

The department had purchased livestock feed from XXX XXX (company) without any tender board approval for its TMA activities.
The feeds were purchased by the department on the understanding that XXX XXX (company) was the best feed supplier for Layer Birds and Pig feeds.
The department had experienced lower egg productions whilst purchasing feeds from other feeds vendors and also experienced high Layer birds mortality with feeds purchased from other sources Thus, to ensure compliance to Procurement Regulation the department had advertised public tender, which closed on 17th March, 2016 for supply of Commercial Poultry and Pig feeds for FCS TMA.
15A.12 Discrepancies in Tally Card Records When inventory items are purchased, the inventory bookkeeper shall record them in the inventory register.12 The Inventory Bookkeeper shall maintain the inventory register to record incoming and outgoing inventories.13 The Inventory Bookkeeper shall ensure that the register is kept up to date at all times.14 Audit visit to the Korovou Stores on 12/01/2016 noted the following anomalies: 1) Shortage of $359.48 of toothpaste indicating that the stock cards were not updated for movement of toothpaste from the stores.
Refer to Table 15A.15 below for details of the variance.

Table 15A.15: Discrepancies in Colgate Toothpaste Tally Card as at 12/01/2016 Toothpaste Balance Unit Price VIP ($) Amount ($) Tally Card record 1,716 Physical verification 1,544 Variance 172 2.09 3,586.44 2.09 3,226.96 359.48 2.09 2) On 11/08/15, the Department purchased 5000, 100g of herbal toothpaste15.

Review of the tally cards revealed that only 2,000 herbal Colgate’s were recorded for the same invoice number.
The audit noted that 3,000 packets toothpaste costing $6,270 was not recorded in the tally card.

If tally cards are not updated, the management is not in a position to determine the quantity of any stock it has at any point in time.

The above also increases the risk of unauthorized sale, theft subsequently resulting in loss to government.
12 Fiji Corrections Centre – Agency Finance Manual – Section 8.1.2 13 Fiji Corrections Centre – Agency Finance Manual – Section 8.1.3 14 Fiji Corrections Centre – Agency Finance Manual – Section 8.1.4 15 EFT 6329, Tax Invoice Number 48468 – 11/08/15 Fiji Corrections Service Section 15A: Page 14 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Recommendations  The Department should ensure that the tally cards are regularly updated and verified against physical stock; and  The Store man should be disciplined for not updating the movements of inventory in the tally cards.
Management Comments The Fiji Corrections Service concurs with Audit findings that the inventory bookkeeper shall record items purchased in the inventory register.

The Inventory Bookkeeper shall ensure that the register is kept up to date at all times.

The department had taken necessary disciplinary actions against persons’ responsible for update of tally cards and inventory controls.
The department had imposed recovery measures for all missing inventories and discrepancies within tally cards upon an internal Investigation.

The department had also developed procedures for ensuring monthly stock takes and to ensure that the tally cards are regularly updated and verified against the physical stocks.

15A.13 Anomalies Noted In Procurement of Goods and Services The proper management of expenditure is fundamental to ensuring value-for-money in delivering services to the community.
As well, having cost-effective internal controls within the purchasing and payments system plays an important part in ensuring that waste of funds, over-expenditures and corruption do not occur.16 The Accounts Officer or the Assistant Accounts Officer must not certify a payment as correct unless they are satisfied that it is in accordance with an LPO, indent, contract, invoice or other authorization and there is documentation that the goods, services or works have been received17 A local purchase order shall be issued when procuring any goods, services or works from an organization within Fiji, unless a contract or agreement has been entered into.18 Competitive quotes, instead of public tenders, may be called for procurements $50,000 and less unless the Commissioner has approved an exemption in accordance with Procurement Regulation 29-(3).19 Audit of payment records revealed the following weaknesses in the procurement process.
Refer to Table 15A.16 below for details and comments on the last column.
16 Fiji Corrections Services – Finance Manual – Part 2 Expenditure (opening statement) 17 Fiji Corrections Services - Finance Manual 2013 – Section 2.8.4 18 Fiji Corrections Services – Finance Manual – Section 2.5.1 19 Fiji Corrections Services – Finance Manual – Section 2.3.2 Fiji Corrections Service Section 15A: Page 15 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Table 15A.16: Examples of Payments Anomalies Date Payee Payment for Payment ID Amount ($) Comments 25/09/15 10/02/15 6/03/15 28/07/15 Enterprise Unit (TMA) Enterprise Unit (TMA) Enterprise Unit (TMA) Enterprise Unit (TMA) Purchase of bread.
6636 22,266.53 Rations (Poultry) for Naboro, Suva, Nasinu and Academy Purchase of yellow Physical Training inmates uniform, uniform, hats and overall Purchase of bread 4505 13,697.64 4692 8,637.00 No Local Purchase Order raised 6116 21,999.45 Procurement Anomalies from Fund 4 (TMA’s) Naboro Mart 14/05/15 Limited Purchase of Food Rations for inmates working at TMA and also materials requested from each TMA 444 54,553.18  The Department purchased rations totalling $7,082.10 from Naboro Mart Limited despite the Fiji Procurement Office (FPO) having a list of approved suppliers20.
Naboro Mart Limited is not an approved supplier by FPO.

 The inmates were also provided rations from TMA (Fund 4) despite it being budgeted in Fund 1.

This indicates double dipping of ration.

 Local purchase Orders the were not for amount of $54,553.18 raised 26/01/2014 A Supplier Cartage of poultry manure 357  Competitive quotes were not obtained for the purchase of Television Set & Antenna worth of $1,068 and Fabric Materials worth $18,589.13.
2,400.00  Invoice dated 23/12/14 paid on 27/01/15  No Local Purchase Order Raised The above finding shows disregard to procurement and accounting regulations by the Department.

Hence, there is a high risk of fraud and misappropriation of funds in the Department.

Recommendations  The Department must ensure compliance with regulations relating to procurements at all times.
2020 CTN 188/2014, CTN 157/2014 & CTN 162/2014 Fiji Corrections Service Section 15A: Page 16 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Management Comments The department acknowledges the audit findings.
However, the following remarks contributed to the incurrence as noted by the Audit; Date Payee Payment for Comments Department Comments 25/09/15 10/2/15 Enterprise Unit (TMA) Enterprise Unit (TMA) 6/3/15 Enterprise Unit (TMA) 28/07/15 Enterprise Unit (TMA) of Purchase Bread Ration (Poultry) Naboro, for Suva , Nasinu and Academy of Purchase Yellow Physical Training Uniform, Inmates Uniform, and Overall Purchase Bread hats of Procurement Anomalies from Fund 4 (TMAs).
14/5/15 Naboro Mart Limited Purchase of Food Rations for Inmates working and at TMA Materials No Purchase Orders were raised as the supplies were on demand basis, which was eventually determined by daily Inmates Numbers.

The Order for Uniforms was needed urgently and only FCS TMA had the ability to supply in-time.

No Purchase Order Raised  Not Approved Supplier.

 Double Dipping of Food Ration.

 Local Purchase Order.


 Competitive Quotes obtained not by findings as The department acknowledges this was the approved the Commissioner of Corrections for for Inmates Working Various TMA Business Units.

However, this matter is with FICAC and before Court.

26/1/2014 A supplier Cartage Poultry Manure of No Purchase Order Raised The department acknowledges the findings as the vendor was the based engaged availability of Manure and urgent need for Manure to be Cleared from the available Farm.
Supplier was just within the site of manure and was engaged due to in-time availability and cheaper price cartage.

on Further to the highlighted issue, the Account department will ensure compliance to the requirements of the Finance Manual at all times and ensure person(s) responsible for Logistic support are aware of the processes to avoid such incidents in future.
The department will also ensure procurement process and that Local Purchase Orders for items to be purchased and the goods are procured from approved tendered suppliers.
Fiji Corrections Service Section 15A: Page 17 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ APPENDIX 15A.1: Examples of Purchases & Deductions Made For Naboro Mart Limited Date Cheque Number Amount ($) Particulars 8/01/2015 9/01/2015 13/01/2015 4190 4195 4207 1,025.00 Payment for the Established deductions for Pay 15/15 39,723.76 Payment for Established deduction for Pay 01/15 1,075.00 Payment of deduction for Pay 02/15 for Unestablished officers purchasing of goods from Naboro, Lautoka and Korovou Mini Mart.
20/01/2015 4242 1,075.00 Payment of deductions for Pay 03/15 for Unestablished officers purchasing of goods from Naboro, Lautoka and Korovou Mini Mart 28/01/2015 4279 1,195.00 Payment of deductions for Pay 04/15 for Unestablished offices purchasing of goods from Naboro, Lautoka and Korovou Mini Mart.
13/02/2015 4442 1,170.00 Payment of deduction for Pay 06/15 for Unestablished officer purchasing of goods 18/02/2015 4475 5/03/2015 4594 from Naboro, Lautoka and Korovou Mini Mart 43,945.00 Payment of deductions for Pay 07/15 for Unestablished officers purchasing of goods from Naboro, Lautoka and Korovou Mini Mart ($1040.00), and; Payment of deductions for Pay 01/15 for Established officers purchasing of good from Naboro, Lautoka and Korovou Mini mart.
43,570.00 Payment of deduction for Pay 09/15 for Unestablished officers purchasing goods from Naboro, Lautoka and Korovou Mini Mart ($1065.00), and; payment of Established Deductions Pay 15/15 from 26/02 - 11/03/15 ($42505.00) 18/03/2015 19/03/2015 4719 4735 42,405.00 Payment for the Established deductions for Pay 06/15 1,215.00 Payment of deduction for Pay 11/15 for Unestablished officers purchasing of goods from Naboro, Lautoka and Korovou Mini Mart 27/03/2015 4819 1,215.00 Payment of deduction for Pay 12/15 for Unestablished officers purchasing of goods from Naboro, Lautoka and Korovou mini mart 1/04/2015 4865 43,585.00 Payment of deductions for Pay 07/15 for Establish Officers purchasing of goods from Naboro, Lautoka and Korovou Mini Mart 10/04/2015 4947 745.00 Payment of deduction for Pay 14/15 for Unestablished officers purchasing of 15/04/2015 4985 goods from Naboro, Lautoka and Korovou Mini Mart 43,600.00 Payment of deduction for Pay 15/15 for Unestablished officers purchasing of goods from Naboro, Lautoka and Korovou Mini Mart ($645.00),and; payment made for the Established deduction for Pay 08/15 22/04/2015 5045 795.00 Payment of deduction for Pay 16/15 to the above payee for Unestablished officers 29/04/2015 30/04/2015 5110 5136 purchasing of goods from Naboro, Lautoka and Korovou Mini Mart.
45,275.00 Payment made to the above payee for the Established deduction for Pay 09/15 875.00 Payment of deduction for Pay 17/15 for Unestablished officers purchasing of goods from Naboro, Lauyoka and Korovou Mini Mart 5/05/2015 5143 875.00 Payment of deductions for Pay 18/15 for Unestablished officers purchasing of 13/05/2015 14/05/2015 5214 5239 goods from Naboro, Lautoka and Korovou Mini Mart 47,185.00 Payment made for Established deduction for Pay 10/15 700.00 Payment of deduction for Pay 19/15 for Unestablished officers purchasing of goods from Naboro, Lautoka and Korovou Mini Mart 21/05/2015 5318 700.00 Payment of deduction for Pay 20/15 for Unestablish officers purchasing of goods from Naboro, Lautoka and Korovou Mini Mart 2/06/2015 5463 1,100.00 Payment of deductions for Pay 22/15 for Unestablished officers purchasing of 15/06/2015 2/07/2015 5642 5806 goods from Naboro, Lautoka and Korovou Mini Mart.
1,150.00 Payment for the sub contribution for Pay 12/15 413.17 Payment made for leave compensation to EFTX-5806 (Reapi Sauwea) of 35 days that was due to her after contract expired on 23/06/15; less Naboro Mini Mart deduction 15/07/2015 5944 1,100.00 Payment of deduction for Pat 28/15 for Unestablished officers purchasing of goods from Naboro, Lautoka and Korovou Mini Mart.
Fiji Corrections Service Section 15A: Page 18 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Date Cheque Number Amount ($) Particulars 22/07/2015 6025 52,040.00 Being payment made for Pay 15/15 Payment of deduction for Pay 29/15 for Unestablished officers purchasing of goods from Naboro, Lautoka and Korovou Mini Mart.
the Established deductions to 28/07/2015 6078 1,050.00 Payment of deduction for Pay 30/15 for Unestablished officers purchasing of 4/08/2015 5/08/2015 6148 6153 goods from Naboro, Lautoka and Korovou Mini Mart.

50,180.00 Being payment made for the Established deduction for Pay 16/15 1,025.00 Being payment of deductions for Pay 31/15 for Unestablished officers purchasing of goods from Naboro, Lautoka and Korovou Mini Mart.
13/08/2015 6255 1,135.00 Payment of deduction for Pay 32/15 for Unestablished officers purchasing of 19/08/2015 25/08/2015 6313 6341 goods from Naboro, Lautoka and Korovou Mini Mart 50,830.00 Being payment made to the Established deductions for Pay 17/15 1,135.00 Payment of deduction for Pay 33/15 for Unestablished officers purchasing of goods from Naboro, Lautoka and Korovou Mini Mart 7/09/2015 6426 1,235.00 Payment of deduction for Pay 35/15 for Unestablished Officers purchasing of Goods from Naboro, Lautoka and Korovou Mini Mart.
17/09/2015 18/09/2015 6529 6541 50,475.00 Payment of deduction for Established deductions for pay 19/15 1,185.00 Payment of deduction for Pay 37/15 for Unestablished officers purchasing of goods from Naboro, Lautoka and Korovou Mini Mart 24/09/2015 6604 1,135.00 Payment of deductions for Pay 38/15 for Unestablished officers purchasing of goods from Naboro, Lautoka and Korovou Mini Mart 30/09/2015 8/10/2015 6643 6714 50,345.00 Payment for the Established deductions for Pay 20/15 1,135.00 Payment of deductions for Pay 40/15 for Unestablished officers purchasing of goods from Naoro, Lautoka and Korovou Mini Mart.
26/10/2015 6872 1,135.00 Payment of deduction for Pay 42/15 for Unestablished officer purchasing of goods from Naboro, Lautoka and Korovou Mini Mart 29/10/2015 6930 48,210.00 Payment of deduction for Pay 22/15 to the above payee for established officers purchasing of goods from Naboro, Lautoka and Korovou Mini Mart.
30/10/2015 6941 1,160.00 Payment of deduction for Pay 43/15 for Unestablished officers purchasing of goods from Naboro, Lautoka and Korovou Mini Mart 5/11/2015 7013 1,110.00 Payment of deduction for Pay 44/15 for Unestablished officers purchasing of 12/11/2015 7054 49,590.00 goods from Naboro, Lautoka and Korovou Mini Mart Payment of deduction for Pay 23/15 for Established officers purchasing of goods from naboro, Lautoka and Korovou Mini Mart ($48680.00), and; Payment of deduction for Pay 45/15 for Unestablised officers purchasing of goods from Naboro, Lautoka and Korovoy Mini Mart ($910.00) 20/11/2015 7159 910.00 Payment of deducton for Pay 46/15 for Unestablished officers purchasing of goods from Naboro, Lautoka and Korovou Mini Mart.
27/11/2015 7240 965.00 Payment of deduction for Pay 47/15 for Unestablished officers purchasing of goods from Naboro, Lautoka and Korovou Mini Mart.

4/12/2015 7380 960.00 Payment of deduction for Pay 48/15 for Unestablished officers purchasing of goods from Naboro, Lautoka and Korovou Mini Mart 28/08/2015 6369 1,235.00 Payment of deductions for Pay 34/15 for Unestablished officers purchasing of 10/09/2015 6480 goods from Naboro, Lautoka and Korovou Mini Mart.
2,084.00 Payment for the purchase of 1 x Modyl Automatic washing machine 7.5kg for women correction center ($899), and; payment of deduction for Pay 36/15 for Unestablished officers purchasing from Naboro, Lautoka and Korovou Mini Mart ($1185.00) 3/09/2015 6410 56,182.50 Payment of deduction for the Established deduction for Pay 18/15 and boarding kit 22/01/2015 19/06/2015 16/02/2015 22/05/2015 10/07/2015 4255 5695 4456 5336 5894 Fiji Corrections Service – inmates.
39,373.76 Payment made for the Established deductions for Pay 02/15 400.00 Payment for the purchase of 10 500LTR carton of Fiji Water to QM stores for COMCORs use.

7,296.68 Purchase of vegetable seeds for the Naboro Farm 10,880.00 Purchase of aluminum pots for QM stores 699.00 Purchase of MODYL LED screen.
Section 15A: Page 19 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Date Cheque Number Amount ($) Particulars 15/07/2015 10/08/2015 23/11/2015 14/05/2015 3/03/2015 5957 6218 7191 5248 4561 800.00 Purchase of Fiji water.

11,377.50 Purchase of mess plates ($10,678.50) and 32 inch flat TV screen ($699) for medium correction center ($699).

2,592.80 Payment made for the purchase of chemicals and seedlings for food security.
16,800.00 Purchase for construction of open vale house at Naboro for check point office 150.00 Payment for reimbursement of funds for Bhika for the flight to Labasa due to itinerary error and ticketing arrangement made to Fiji airways.
Total 882,528.17 Fiji Corrections Service Section 15A: Page 20 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Section 16 Department Communication of Information and Roles and Responsibilities The Ministry of Communication is responsible for providing coordination, support and leadership on all matters of policy, law, regulation and strategy for the Information, Communication and Technology [ICT] sector.
Following Government restructure after the General Election in 2014, the Ministry now comprises the following Departments: Information and Communication.

The new, streamlined Department is responsible for informing the people of Fiji about Government’s policies, programs and plans.
The Department disseminates information by producing television and radio programs, publishing a biweekly newspaper, managing the Government website and social media accounts and issuing news releases about important Government initiatives.

The Department is also the link between Government and the media, making sure reporters have the information they need to cover Government activities.
The Department is responsible for providing daily media monitoring reports to the Prime Minister and Cabinet Ministers.

It also plays a very important role during natural disasters by providing timely and accurate updates to the media and the public.

The Department of Information comprises five Units: News, Policy, Research, Radio, and Film and Television.
The Department of Communications mission is to provide efficient, competitive, cost- effective and accessible telecommunication and postal services to all Fijians.

The Department also works closely with the Telecommunications Authority of Fiji in ensuring that proper monitoring, compliance and regulatory oversight of the sector is maintained.
Table of Contents PART A: FINANCIAL STATEMENT..................................................................................................................................... 1 16.1 Audit Opinion ............................................................................................................................................................... 1 16.2 Statement of Receipts and Expenditure ...................................................................................................................... 2 16.3 Appropriation Statement ............................................................................................................................................. 2 16.4 Trust Fund Account Statement of Receipts and Payments ........................................................................................ 3 PART B: AUDIT FINDINGS .................................................................................................................................................. 4 16.5 No coordination of receipts by receipting agency on behalf of Ministry ...................................................................... 4 PART A: FINANCIAL STATEMENT 16.1 Audit Opinion Audit of the 2015 accounts of the Department of Information and Communication resulted in the issue of a qualified audit report.
The basis of qualification was that the trust receipts totalling $15,186,286 received on behalf of the Department were not supported by the receiving agency, Commerce Commission.
Department of Information and Communication Section 16: Page 1 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ 16.2 Statement of Receipts and Expenditure The Department of Information and Communication collected total revenue of $2,834 and incurred total expenditure of $3,589,433 in 2015.
Table 16.1: Statement of Receipts and Expenditure for 2015 Description RECEIPTS State Revenue Revenue from Production of Film Licence Telecom and TV Other State Revenue Total State Revenue Agency Revenue Miscellaneous Total Agency Revenue 2015 ($) 2014 ($) 1,844 990 --- 2,834 1,260 4,941 60 6,261 --- --- 20,021 20,021 TOTAL REVENUE 2,834 26,282 EXPENDITURE Operating Expenditure Established Staff Government Wage Earners Travel & Communication Maintenance & Operations Purchase of Goods & Services Operating Grants & Transfers Special Expenditure Total Operating Expenditure Capital Expenditure Capital Construction Capital Purchases Capital Grants and Transfers Total Capital Expenditure 1,192,628 138,256 193,740 127,079 541,718 1,179,139 77,659 3,450,219 1,429,517 138,946 231,958 143,868 643,144 856,078 250,793 3,694,304 --- --- --- --- --- --- --- --- Value Added Tax 139,214 212,415 TOTAL EXPENDITURE 3,589,433 3,906,719 Total expenditure decreased by $317,286 or 8% in 2015 compared to 2014 mainly due to savings arising from unutilized budgetary provisions for vacant established positions which were not filled during the year.
16.3 Appropriation Statement The Department incurred expenditures totalling $3,589,433 in 2015 against the budget of $7,433,013 resulting in a budget savings of $3,843,580 or 52%.

The significant savings is mainly due to funds allocated for special expenditures not being fully utilised during the year.

Details of expenditures against the budget estimates are provided in Table 16.2.
Department of Information and Communication Section 16: Page 2 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Table 16.2: Appropriation Statement for 2015 SEG Item Established Staff Government Wage Earners Travel & Communication Maintenance & Operations Purchase of Goods & Services Operating Grants & Transfers Special Expenditure Total Operating Expenditure Capital Expenditure Capital Construction Capital Purchases Capital Grants & Transfers Total Capital Expenditure 13 Value Added Tax Total Expenditure Budget Estimate ($ 1,608,334 170,513 258,302 194,520 891,072 1,348,690 2,400,000 6,871,431 Changes ($) --- --- 35,000 20,000 (55,000) --- --- --- --- --- --- --- 561,582 7,433,013 --- --- --- --- --- --- Revised Estimate ($) a Actual Expenditure ($) b Lapsed Appropriation ($) (a-b) 1,608,334 170,513 293,302 214,520 836,072 1,348,690 2,400,000 6,871,431 --- --- --- --- 1,192,628 138,256 193,740 127,079 541,718 1,179,139 77,659 3,450,219 --- --- --- --- 415,706 32,257 99,562 87,441 294,354 169,551 2,322,341 3,421,212 --- --- --- --- 561,582 139,214 422,368 7,433,013 3,589,433 3,843,580 16.4 Trust Fund Account Statement of Receipts and Payments The Telecommunication Development Trust Fund Account is maintained by the Department of Communication.
The trust receipts included levies charged by the Commerce Commission to telecommunication operators that are directly deposited into the Department’s bank account.

Funds are used for the ICT development purpose.
Table 16.3: Trust Fund Account Statement of Receipts and Payments for 2015 Descriptions RECEIPTS Trust Receipts Total Receipts PAYMENTS Trust Payments Total Payments 2015 ($) 2014 ($) 15,186,286 15,186,286 12,859,958 12,859,958 8,675,504 8,675,504 2,379,990 2,379,990 Net Surplus 6,510,782 10,479,968 Balance as at 1 January 13,376,488 2,896,520 Balance as at 31 December 19,887,270 13,376,488 Department of Information and Communication Section 16: Page 3 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ PART B: AUDIT FINDINGS 16.5 No coordination of receipts by receipting agency on behalf of Ministry When trust money is received, the trust officer shall issue an official trust receipt to the payer.
Details of receipts shall be entered into the trust cashbook.1 The Department’s Trust Fund account Statement of Receipts and Payments includes trust receipts of $15,186,286.

The trust receipts included levies charged by the Commerce Commission to telecommunication operators and this is directly deposited into the Department’s bank account with effect from 01/01/15.
However, the Department did not prepare any reconciliation between the amount levied and received by the Commerce Commission on behalf of the Ministry.

Furthermore, the Department does not have a policy guideline on the usage of the trust funds.

All payments from the trust fund were approved by the Permanent Secretary and the Minister.

It was noted that funds were mostly used for ICT related purposes.
At the time of audit, audit noted that the Department was in process of formulating its policy guideline.

In absence of revenue reconciliation between the Department and Commerce Commission records, the audit could not determine whether the total revenue recorded in the Trust Fund account have been correctly stated.
Recommendations The Department should:   liaise with the Commerce Commission on the submission of monthly remittance report; advice the respective telephone operators to advise the Department of their payment of any direct bank deposits to advise the bank with narration of the name of the paying entity for records purposes; and  set a timeline to have a Trust Fund Usage Policy Guideline finalised.

Department’s Comments Management acknowledges the findings highlighted in the Audit report for 2015.
Recommendations are also noted for further improvement.

Revenues (Deposits) were posted to the general Ledger with assistance of the bank statements as source documents in absence of receipts.

Accurate and full details were not available, therefore receipts were not issued.

Levy is charged by Commerce Commission, hence all remittances by respective companies are made directly to them.
Department had liaised with Fiji Commerce Commission (FCC) to obtain details for levy deposits made directly into Trust Fund Account.

Received details and figures are currently being reconciled with bank statements before the official receipts are issued.

Department will ensure for future deposits, details are received on a monthly basis.
1 Department’s Finance Manual 2013, Section 14.2.1 Department of Information and Communication Section 16: Page 4 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Section 16A Department of Information Technology and Computing Services Role and Responsibilities The primary role of DITCS Services is to support the Government in the provision of ICT capabilities on a secure platform that will showcase opportunities and enhance public sector efficiency, professionalism for the Government and its employees.
One of DITCS Service’s strategic priorities is to transform or re-engineer government services across all Government agencies through the realization of the e-Government strategy.

This holistic strategy adopts the three legged stool approach, focusing on People, Processes and Technology.
In collaboration with other Government agencies, corporate sectors, NGOs and other stakeholders, DITCS Services will develop, promote, coordinate and support strategies that foster services excellence through the utilization of e-Government Application tools.
Table of Contents PART A: FINANCIAL STATEMENT ...................................................................................................................................... 1 16A.1 Audit Opinion .............................................................................................................................................................. 1 16A.2 Statement of Receipts and Expenditure ..................................................................................................................... 1 16A.3 Appropriation Statement ............................................................................................................................................ 2 16A.4 Statement of Losses .................................................................................................................................................. 3 PART B: AUDIT FINDINGS ................................................................................................................................................... 3 16A.5 Unutilised Funds for Upgrade of Ministries and Departments ICT Projects ............................................................... 3 16A.6 Digitization of Registrar of Titles, Companies and Birth, Death and Marriages Records ........................................... 5 16A.7 Capital Budgets Not Utilised ...................................................................................................................................... 6 16A.8 Private Public Partnership With “Software Provider” .................................................................................................. 7 16A.8.1 Software’s to be Developed and Timeframe is Silent in the Software Agreement .......................................... 7 16A.8.2 Lack of Documents to Substantiate Payment made to “Software Provider” ................................................... 8 16A.8.3 Non- compliance to Software Agreement Clauses by “Software Provider” ..................................................... 9 16A.8.4 Anomalies in Incidental Payments made to “ITC Management” ................................................................... 10 16A.9 Follow – up Prior Year Audit Issue ........................................................................................................................... 12 PART A: FINANCIAL STATEMENT 16A.1 Audit Opinion The audit of the 2015 accounts of the Department of Information Technology and Computing Services resulted in the issue of an unqualified audit report.
16A.2 Statement of Receipts and Expenditure The Department collected revenue amounting to $21,560 and incurred expenditure totalling $13,459,771 in 2015.
Details are provided in Table 16A.1 Department of Information Technology and Computing Services Section 16A: Page 1 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Table 16A.1: Statement of Receipts and Expenditure for 2015 Description RECEIPTS State Revenue Commission Total State Revenue Agency Revenue Miscellaneous Revenue Total Agency Revenue TOTAL RECEIPTS EXPENDITURE Operating Expenditure Established Staff Government Wage Earners Travel & Communications Maintenance & Operations Purchase of Goods & Services Special Expenditures Total Operating Expenditure Capital Expenditure Capital Construction Capital Purchase Capital Grants & Transfers Total Capital Expenditure 2015 ($) 2014 ($) 77 77 21,483 21,560 862 862 24,578 25,440 1,547,614 39,690 1,444,937 1,093,081 2,360,832 1,690,921 8,177,075 --- 3,456,754 190,098 3,646,852 1,693,649 36,532 1,562,489 1,093,153 2,331,116 1,757,713 8,474,652 60,650 1,033,216 --- 1,093,866 Value Added Tax 1,635,844 1,181,734 TOTAL EXPENDITURE 13,459,771 10,750,252 Total expenditure increased by $2,709,519 or 25.2% in 2015 compared to 2014 due to increase in the number of other Ministries and Departments Information Technology Infrastructure Capital upgrade projects and allocation of budget for National Switch.
16A.3 Appropriation Statement The Department of Information Technology and Computing Services incurred expenditure totalling $13,459,771 in 2015 against a revised budget of $26,271,188 resulting in saving of $12,811,417 or 48.8%.

Details are provided in Table 16A.2.
Table 16A.2: Appropriation Statement for 2015 SEG Item Budget Estimate ($) Appropriation Changes ($) Established Staff Government Wage Earners Travel & Communications Maintenance & Operations Purchase of Goods & Services Special Expenditures 3,219,765 32,172 1,602,000 2,185,000 4,782,620 2,000,000 (7,845) 7,845 19,752 (19,752) --- --- Revised Estimate ($) a 3,211,920 40,017 1,621,752 2,165,248 4,782,620 2,000,000 Actual Expenditure ($) b 1,547,614 39,690 1,444,937 1,093,081 2,360,832 1,690,921 Lapsed Appropriation ($) (a-b) 1,664,306 327 176,815 1,072,167 2,421,788 309,079 Department of Information Technology and Computing Services Section 16A: Page 2 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ SEG Item Budget Estimate ($) Appropriation Changes ($) Total Operating Expenditure 13,821,557 8 9 10 Capital Expenditure Capital Construction Capital Purchase Capital Grants & Transfers Total Capital Expenditure 13 Value Added Tax 50,000 8,527,531 1,000,000 9,577,531 2,872,100 --- --- --- --- --- --- Revised Estimate ($) a 13,821,557 Actual Expenditure ($) b 8,177,075 Lapsed Appropriation ($) (a-b) 5,644,482 50,000 8,527,531 1,000,000 9,577,531 --- 3,456,754 190,098 3,646,852 50,000 5,070,777 809,902 5,930,679 2,872,100 1,635,844 1,236,256 TOTAL EXPENDITURE 26,271,188 --- 26,271,188 13,459,771 12,811,417 16A.4 Statement of Losses There was no loss reported for the Department in 2015.
However, items worth $101,181 were boarded in 2015 following the annual survey.

PART B: AUDIT FINDINGS 16A.5 Projects Unutilised Funds for Upgrade of Ministries and Departments ICT The Department of Information Technology and Computing Services (DITCS) is responsible for the upgrade of all Ministries’ and Departments’ Information Communication and Technology (ICT) systems.
The Accounting Head is responsible for designing a system of internal control for any new initiative or projects undertaken by the agency.1 The DITCS was provided $6,727,5312 to carry out a number of projects for other Ministries and Departments.

During the year DITCS disbursed $1,341,541 or 20% to various Ministries and Departments for purchase of software and IT related works.

Refer to Table 16A.3 for details.
Table 16A.3: Amounts Released from DITCS Ministries/ Department Purpose Labour Health Justice Integrated Labour Market Information System Purchase of Warehouse Management System IT Purchase – Ministry of Health Digitization of Registrar of Tittles, Companies and Birth Death and Marriages (BDM) Budget ($) 3,000,000 1,000,000 400,000 1,000,000 Actual Expenses ($) 224,607 - 400,000 133,804 Funds Vired Out ($) - - - 865,553 Savings ($) 2,775,393 1,000,000 - 643 Fisheries and Forestry Upgrade of ICT Infrastructure for the Ministry Upgrade of ICT Infrastructure for the Ministry Agriculture Fiji Geospatial Information System Programme Lands 635,000 542,531 150,000 271,987 163,379 147,764 - - - 363,013 379,152 2,236 1 DITCS Finance Manual 2014, Part 17, Section 17.1.2 2 2015 Budget Estimate Department of Information Technology and Computing Services Section 16A: Page 3 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Ministries/ Department Total Purpose Budget ($) 6,727,531 Actual Expenses ($) 1,341,541 Funds Vired Out ($) 865,553 Savings ($) 4,520,437 The audit noted the following anomalies.
 Funds should be utilised for the purpose it was allocated for in the budget.

Out of a total of $6,727,531, DITCS only disbursed $1,341,541 to six ministries and departments for purchase of software or IT related works.

Hence, a total of $5,385,990 of the funds remained utilised.

Out of the six ministries and departments, only Ministry of Justice and Ministry of Land utilized almost all of the funds which were allocated.
Savings of $ 4,520,437 was transferred to Ministry of Economy Consolidated Fund Account (CFA) at the end of the year.

 When funds are disbursed to other ministries and departments, acquittal reports should be obtained on how funds were used.

It was noted that DITCS did not obtain acquittal reports from the ministries and department who were given the funds for IT related works.
The DITCS only requested for the acquittals from the respective ministries/department when audit requested for the acquittal reports.

As at the date3 of audit four out of six ministries/departments4 did not submit the acquittal report.

 DITCS shall monitor the progress and scrutinize all acquittals received for funds provided to other ministries/departments to ensure that funds are used for the purpose it was provided for and projects are implemented according to plan and set timelines.
there was no evidence the six However, ministries/departments were supervised and monitored by DITCS.

The DITCS did not have any knowledge on the status and the quality of the work done by these ministries/departments as at 31/12/15.

the IT related works undertaken by that The findings indicate that the DITCS did not review the plans and arrangement made by the ministries and departments before disbursing funds to them.
In addition, there was a lack of supervision and monitoring of the IT related works undertaken by a number of ministries/departments.

As a result substantial amount of funds disbursed to a number of ministries/departments for IT related works were not used and works were either not undertaken at all or not completed.
Recommendations The DITCS should:   monitor the progress and scrutinize all acquittals received for funds provided to other ministries/departments to ensure that funds are used for the purpose it was provided; and; follow up with the ministries/department on the work done for the funds provided in 2015.
3 15/02/16 4 Includes Ministry of Justice, Ministry of Agriculture, Ministry of Fisheries & Forestry and Ministry of Lands Department of Information Technology and Computing Services Section 16A: Page 4 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Department’s Comments Comments on Findings The audit found that of the $6.7m that DICTS was provided for projects, $1.3m was disbursed and the $4.5m that was not spent was returned to Ministry of Finance Consolidated Fund Account.
Management understands that this is the correct procedure to follow with regard to return of unspent funds.

Management agrees that funds disbursed to other Ministries should be acquitted.

Presumably the receiving Ministry or Department should be responsible for this, not DITCS.

Comments on Recommendations Agree- the Department will continue to monitor progress and scrutinise all acquittals as they are received.
Agree- the Department will also attempt to follow up with receiving Ministries who have not yet provided an acquittal in 2015.

16A.6 Digitization of Registrar of Titles, Companies and Birth, Death and Marriages Records Priority for funding under Public Sector Investment Program (PSIP) to be given to Departments that have prepared proper project plans and whose projects are in a “state of readiness” for implementation.
 The DITCS was allocated $1,000,000 ($1,150,000 VIP) in its 2015 budget for Ministry of Justice to digitize Registrar of Tittles, Companies and Birth, Death and Marriages records.

The DITCS provided $153,875 (VIP) to Ministry of Justice to purchase 10 scanners and 15 i5 computers costing $126,500 and $27,375, respectively.

The scanners were to be used for scanning Registrar of Tittles, Companies and Birth, Death and Marriages records.
The Ministry has 15 million titles to be scanned and uploaded as part of its digitization program.

As of 4/2/16, the Ministry only managed to scan 1 million titles after working double shift.

 The DITCS paid $1,400,000 to purchase Storage Area Network (SAN) at the DITCS datacenter and $1,032,885 for Oracle Server.

The audit noted the SAN was used by “ITC Management” at DITCS datacenter while Oracle Server was not in use.
The audit further noted that DITCS vired $865,553 (VEP) from the funds allocated for the digitization of the Ministry of Justice projects to meet the shortfalls in the procurement of SAN and Oracle Server.

The findings indicate lack of proper planning and budgeting for IT projects included in the Public Sector Investment Program.

The funds were vired out from the digitization of the Ministry of Justice projects for other works.
As a result, scanners for the digitization of Registrar of Tittles, Companies and Birth, Death and Marriages records were inadequate to meet the objectives.
Department of Information Technology and Computing Services Section 16A: Page 5 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Recommendations The DITCS should:   ensure that the projects budgeted for Ministry of Justice is implemented on a timely manner and funds are used for purpose it has been allocated for; and consider providing additional high output scanners to expedite the digitization process.
Department’s Comments Comments on Findings The observation relate to project planning and delivery, rather than financial management.

Comments on Recommendations Agree in principle – the Department will continue to observe best practice project management methods to track effective project delivery against plans.

Agree in principle – the Department will review progress towards digitization and assess whether to change the project approach, in consultation with Ministry of Justice.
16A.7 Capital Budgets Not Utilised The DITCS will be responsible for the project management and implementation of the project, including overseeing components that are outsourced.

The DITCS was provided $1,350,000 in its 2015 budget estimates to carry out four IT projects, namely Disaster Recovery Site, Central VOIP, Fiji Pay and National Switch.

Audit review of these projects revealed the following anomalies.
 The DITCS only utilised $190,098 or 14% out of the $1,350,000 allocated for the four IT projects that were planned for the year ended 31/12/15.

Funds totalling $190,098 was used for only one project (National Switch) out of the four projects that were supposed to be implemented during 2015.

The DITCS did not carry out any work on the three projects, namely Disaster Recovery Site, Central VOIP and Fiji Pay projects.

Refer to Table 16A.4 for details of funds used for each project.
Table 16A.4: Un-utilized Capital Budget Description Disaster Recovery Site Central VOIP- This will provide Government with a central and secure communication and data exchange system, which is also cheaper to run than a traditional telephone system.

Fiji Pay – The idea behind the project was to create a prepaid card that allows people to pay for Government services.
National Switch – provided for work on the National Switch to which all banks and financial institutions will be required to Revised Budget ($) 50,000 300,000 500,000 Actual ($) Variance ($) % of Under Utilisation - - - 50,000 300,000 100 100 500,000 100 500,000 190,098 309,902 62 Department of Information Technology and Computing Services Section 16A: Page 6 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Description Revised Budget ($) Actual ($) Variance ($) % of Under Utilisation connect meaning that consumers and businesses will enjoy vastly improved electronic services and reduced transaction costs.
 The sum of $198,017 paid for the National Switch project also included payment of $9,617 for installation and training cost.

However, a site visit to the Data Centre on 12/02/16 confirmed that hardware security modules were not installed and were kept in a carton.

The findings indicate poor project management.

As a result, funds provided for in the budget were not utilized and the projects were not implemented.
Recommendations The DITCS should:   ensure that all IT projects are properly planned and adequate arrangements made to implement the projects as soon as funds have been provided; and ensure that projects undertaken are properly supervised and monitored at all phases including planning, implementation and completion.

Department’s Comments Comments on Findings Most of the issues raised appear to be related to project management, governance and scheduling.
The finding that indicates “DITCSs poor project planning, supervision and monitoring is the sole reason for failure to implement indicates that a deeper analysis of the issues was not undertaken.

Very few complex projects are delivered according to the initial plan.
Factors such as external project governance, sourcing of goods and services in a competitive market, the ebb and flow of resources, balancing of competing priorities and unforeseen changes to the environment all have an impact on project delivery.

Comments on Recommendations As noted in 8.1.2 above, the Department will continue to observe best practice project management methods to track effective project delivery against plans.
As above, project monitoring is an integral element of project management and the Department will ensure that projects are appropriately monitored.
16A.8 Private Public Partnership with “Software Provider” 16A.8.1 Agreement Software’s to be developed and Timeframe is Silent in the Software The Government engaged the services of “Software Provider” to design, create, implement and maintain software solutions with intend to revolutionize its processes and products using information technology platforms to make its services more user friendly, accessible and economical for the Fijians.
Department of Information Technology and Computing Services Section 16A: Page 7 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ The Government entered into a Private Public Partnership with “Software Provider” through a Head Agreement on 28 September 2012 which was subsequently terminated on 24 April 2014 and new Software Agreement entered on 24 April 2014.
The number of software to be developed by “Software Provider”, its commencement date and the target dates of completion for each software development project was not specified in the Software Agreement or agreed on an annual basis.

As such, the audit could not ascertain the number of projects “Software Provider” planned to undertake on a yearly basis, its date of commencement, date of completion and the current status of each software development project.
In absence of the software projects and timeframe specified in the contract could result in delay in realization of government objective for delivering its services through its e-governance programs and to make DITCS the IT hub for all Government Ministries and Government Controlled Companies.
Recommendation The DITCS should prepare an annual agreement of software programs to be developed by “Software Provider”, its commencement date, the date of completion and the current status of each software development project and monitor the progress against it.

Department’s Comments Comments on Findings Management noted that “Software Provider” and the Fijian Government are complying with the terms of the Software Agreement.

Comments on Recommendations The Department will obtain a list of hardware.
16A.8.2 Provider” Lack of Documents to Substantiate Payment made to “Software Given that the revenues are on usage basis and in consideration for investments being made by Software Provider in terms of the time and effort spent, and as a risk mitigation strategy, Parties agreed that Software Provider will be paid on transaction click or USD 500,000 per year whichever was higher, for a period of seven years.5 The DITCS has been paying USD 125,000 per quarter to Software Provider since 2013.
As at 31/12/15, DITCS has paid a total of US$1,125,0006to Software Provider.

The audit noted that all payments made to “Software Provider” were approved by the Steering Committee.
However, the audit could not substantiate whether payments made to “Software Provider” were justified in terms of value for money derived as details of the work done by “Software Provider” were 5 Software Agreement between the Ministry and Software Provider dated 24/04/14, Section 5.1 6 FJ $2,280,772 Department of Information Technology and Computing Services Section 16A: Page 8 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ not stated in the invoice submitted for payment.
In addition, no other record of work done by “Software Provider” was provided to audit to verify the payments.

As a result the audit could not confirm the payment totaling FJD $2,280,772 made to “Software Provider” as at 31/12/15 was correct and justified.

Recommendation The Department should ensure that all relevant documents are kept in the registry or attached with the payment vouchers for audit reference and verification.
Department’s Comments Comments on Findings The findings note that the minimum payment due to “Software Provider” under the existing contract is USD 500,000 per year (USD 125,000 per quarter).

This is the amount that is being paid to “Software Provider”.

This amount is payable regardless of transaction clicks or work completed, so there is no inconsistency regarding payments.
Comments on Recommendations If future payment invoices vary from the minimum that is provided for under the contract, the Department will ensure that these are fully justified and documented by “Software Provider”.

16A.8.3 Non- compliance to Software Agreement Clauses by “Software Provider” The DITCS signed Software agreement with “Software Provider” on 24/4/14.

Audit review of the software agreement noted that “Software Provider” did not comply with several clauses in the agreement as provided below.
 “Software Provider” shall obtain professional liability insurance coverage to ensure that proper insurance of its software products and its personnel, and shall take out and maintain sufficient liability, to cover for risks incurred while providing its services.7 However, no professional liability insurance covers were obtained by “Software Provider” for its software products and its personnel, and to cover for risks incurred while providing its services.
In the absence of indemnity covers, the DITCS may not be able to hold “Software Provider” liable for any damages.

 “Software Provider”, for all the software applications it has developed and delivered, will perform all necessary maintenance and/or build-up of the client’s systems.8 However, no details were provided to audit to establish the number of software developed and delivered by “Software Provider” or any back up for the software developed.
 All software created by “Software Provider” may be reviewed as and when needed by the Client by an independent advisory committee.
The advisory committee shall consist of information 7 Software Agreement between Ministry and Software Provider dated 24/04/14, Section 9.5 8 Software Agreement between Ministry and Software Provider dated 24/04/14, Section 9.7 Department of Information Technology and Computing Services Section 16A: Page 9 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ technology experts appointed by the Steering Committee to ensure that the software meets industry standards, is suitable for the Client’s needs and has continuity of purpose.9 However, an independent advisory committee was yet to be formed by the Steering Committee.
In absence of independent review, there is a risk in terms of its vulnerability against hacking, user friendliness, security features and long term stability.

 Parties agree that a copy of the most recent version of the source codes will be kept in escrow with independent third party to be mutually agreed and appointed.10 However, the source codes kept in escrow with independent third party could not be established as management could not provide any such details.
The findings indicate that due diligence was not exercised to ensure that “Software Provider” complied with the terms and conditions of the software agreement for the management of DITCS.

Recommendation The Steering Committee should ensure that “Software Provider” complies with the software agreement.
Department’s Comments Comments on Findings Management notes that “Software Provider’s” non-compliance with the software agreement is presumed rather than definite, due to the supporting material not being reviewed during the audit, rather than the material not existing.

Management also noted that if “Software Provider” has not obtained any indemnity covers, the Department can still hold “Software Provider” liable for damages.
However, the software agreement does require such indemnities to be held and the Department will enforce this and any other conditions that “Software Provider” currently does not comply with.

Comments on Recommendations Management agrees with the recommendation and will request the Steering Committee to ensure “Software Provider” complies with the terms of the agreement.
16A.8.4 Anomalies in Incidental Payments made to “ITC Management” The Client will pay “ITC Management”, through DITCS, an annual management fee of US$250,000 to be paid on a quarterly basis.11 The Client shall bear incidental expenses, by prior written approval of the Steering Committee, which includes travel, accommodation, work permits and visa applications.12 The DITCS paid incidental fees totaling $123,985 in 2015 to “ITC Management” for the period 1/9/12 to 31/3/14.
9 Software Agreement between Ministry and Software Provider dated 24/04/14, Section 20.1 10 Software Agreement between Ministry and Software Provider dated 24/04/14, Section 6.2 11 Management Agreement, Clause 8.1 12 Management Agreement, Clause 13.1.5 Department of Information Technology and Computing Services Section 16A: Page 10 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ The audit could not substantiate the incidental expenses paid to “ITC Management” as details of the services provided and the supporting documents for incidental expenses such as accommodation bills and the air ticket were neither attached to the payment vouchers nor provided for audit verification.
In addition, audit could not ascertain if the prior approval was obtained by the ITC Management from the Steering Committee.

Refer to Table 16A.5 for incidental expenses paid by Department to “ITC Management”.
Table 16A.5: Incidental Expenses Paid To “ITC Management” in 2015 Year Amount Paid (US$) Expense Type September 2012 – December 2012 14,106.70 Travel and Accommodation January 2013 – December 2013 24,732.67 Travel and Accommodation January 2014 – March 2014 18,106.99 Travel and Accommodation Total 56,946.36 Discussions with the Acting Senior Accounts revealed that the relevant supporting documents are maintained by the Steering Committee and will be produced to audit.
However, as at date of audit13 no supporting documents were provided for audit verifications.

The above indicates weak internal controls in place to ensure that all payments are properly supported with proper documentations.

In the absence of proper documentations, there is a high risk or misappropriation of public funds.
Recommendations The Management should ensure:   all supporting documents for payment made are maintained by DITCS; and that prior approval is obtained from the Steering Committee before payments are made to “ITC Management”.

Department’s Comments Comments on Findings As noted in the audit findings, the “relevant supporting documents’ are maintained by the Steering Committee, and any payments are approved by the Steering Committee.
The Department has no authority to ask the Steering Committee to produce these documents.

This is not a failure of the Department’s internal controls.

Comments on Recommendations Not all supporting documents can be maintained by the Department, as some of these originate from and are the property of the Steering Committee.

The Department will continue to ensure that approvals are obtained by the Steering Committee prior to payment being made.
13 16/2/15 Department of Information Technology and Computing Services Section 16A: Page 11 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ 16A.9 Follow – up Prior Year Audit Issue The Steering Committee shall formulate a procurement policy for the procurement of all ICT goods, services and works by DITCS.
All ICT goods and services procured by the Steering Committee shall be in accordance with the procurement policy.14 In its General Report to Parliament for 2013,15 the Auditor General reported that Contracts were awarded by DITCS without Approved Procurement Policy.
The Auditor General also reported that: (i) (ii) The Annual procurement policy was yet to be put in place; and Various purchases were approved by the Steering Committee without any reference to a procurement plan aligned to the procurement policy.
The audit followed up on this matter and noted that there was no progress on the finalization of the DITCS Procurement Policy as required under section 14(1) of the DITCS Decree 2013 despite the anomaly was highlighted in the Auditor General’s General Repot to Parliament.

The audit follow up on this matter revealed the following.
 DITCS procurement policy was still in a draft stage and was undergoing vetting process from the members of the steering committee;  A copy of draft policy was not provided to audit, thus the audit could not confirm whether a draft procurement policy exist and  Although DITCS was currently using the Fiji Procurement Regulation, its procurement did not go through Fiji Procurement Office.

The audit noted that there was a significant delay (2013 – 2015) in finalising the procurement policy.
The DITCS was not able to explain the reasons for the delays in finalising the Procurement Policy by the Steering Committee.

Recommendation Compliance should be made with DITCSS Decree 2013 and actions taken to finalize DITCS Procurement Policy.

Department’s Comments Comments on Findings Management notes that the ICT Procurement Policy has not been finalized and in its absence ICT purchasing was guided by the Fiji Procurement Regulation.
Comments on Findings Management agrees with the recommendation to ensure the policy is finalized.

14 Reform of DITCSS Decree No.
17 of 2013, Section 14.1 & 14.3 15 Audit Report on Government Ministries & Department, 2013, Volume 2 Department of Information Technology and Computing Services Section 16A: Page 12 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Section 17 Public Service Commission Roles and Responsibilities The Public Service Commission under Section 126 (1)of the 2013 Constitution is responsible for the following functions: (a) (b) (c) (d) To appoint permanent secretaries with the agreement of the Prime Minister; To remove permanent secretaries with the agreement of the Prime Minister; To institute disciplinary action against permanent secretaries; and To make such other appointments and perform such other duties, functions and responsibilities as may be prescribed under written laws.
The Public Service Commission’s statutory function is under Section 11 of the Public Service Act, 1999.
Table of Contents PART A: FINANCIAL STATEMENT ........................................................................................................................................ 1 17.1 Audit Opinion ............................................................................................................................................................... 1 17.2 Statement of Receipts and Expenditure ...................................................................................................................... 2 17.3 Appropriation Statement ............................................................................................................................................. 3 17.4 Trading and Manufacturing Account (TMA) – Government Quarters ......................................................................... 3 PART B: AUDIT FINDINGS ..................................................................................................................................................... 4 17.5 Agency Financial Statement ....................................................................................................................................... 4 Performance Bond Account not disclosed .................................................................................................. 4 Performance Bond Account Anomalies ....................................................................................................... 5 17.6 Trading and Manufacturing Account (TMA) ................................................................................................................ 6 Receivables not reflected In the General Ledger records ........................................................................... 6 Quarters Income and Bond not transferred from Operating Trust ............................................................... 6 Poor Record Keeping for TMA - Government Quarters .............................................................................. 7 TMA Journals Not Provided for Audit .......................................................................................................... 8 Details of Journal Posted and not Provided to Audit ....................................................................... 9 17.6.1 17.6.2 17.6.3 17.6.4 APPENDIX 17.1: 17.5.1 17.5.2 PART A: FINANCIAL STATEMENT 17.1 Audit Opinion The audit of the 2015 accounts of the Public Service Commission resulted in the issue of aqualified audit report.
The basis of qualification wasas follows: Trust Fund Account 1.

Performance bond totaling $191,222 which were collected from contractors for maintenance and upgrading of government quarters and were kept in Trust Fund account as at 31/12/15 were not reflected in the FMIS General Ledger.

Public Service Commission Section 17: Page 1 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Trading and Manufacturing Account (TMA) 2.
Receivables totaling $356,441 in the TMA Account for the year 2015were also not recorded as revenues for the year in the FMIS general ledger.

3.

Rent and bond collected through direct salary deductions totaling $2,619,302 and quarter’s bond totaling $84,071 into operating trust fund account were not disclosed in the TMA Income Statement and Balance Sheet, respectively.

4.

The Commission incorrectly credited remittance of $1,142,345 into the Maintenance and Operations account of the Ministry of Finance.
5.

Journal vouchers totaling $2,867,851 for adjustments in rental of Official quarter’s allocation and Bond Government Quarters allocation totaling $215,019 were not provided for audit review.

17.2 Statement of Receipts and Expenditure The Commission collected revenue totalling $3,144,110 and incurred total expenditure of $38,587,428 in 2015.
Table 17.1: Statement of Receipts and Expenditure for 2015 Description RECEIPTS Agency Revenue TOTAL REVENUE EXPENDITURE Operating Expenditure Established Staff Government Wage Earners Travel & Communications Maintenance & Operations of Goods Purchase Services Operating Grants & Transfers Special Expenditures Total Operating Expenditure Capital Expenditure Construction Purchase Grants & Transfers Total Capital Expenditure Value Added Tax TOTAL EXPENDITURE & 2015 ($) 2014 Restated ($) 3,144,110 3,144,110 441,800 441,800 4,075,661 272,362 153,433 26,978,899 365,104 1,084,397 716,129 33,645,985 - 579,900 - 579,900 4,361,543 38,587,428 4,333,906 250,271 233,922 26,077,668 409,708 1,052,842 660,582 33,018,899 - 895,983 - 895,983 4,175,495 38,090,377 Total agency revenue increased by $2,702,310 or 611.7% in 2015 compared to 2014.
This was mainly due to re-invoicing of all students under the old Public Service Commission Scholarship scheme to correct the negative receivables amount persistent over the past years.
Public Service Commission Section 17: Page 2 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Total expenditure increased by $497,051 or 1.3% in 2015compared to 2014 due to the increase in wages costs for all Government Wages Earnersand increase in repairs and maintenance costs of office equipment.
17.3 Appropriation Statement The Public Service Commission incurred expenditure totalling $38,587,428 in 2015 against the revised budget of $43,131,770 resulting in a savings of $4,544,342.

Details of expenditure against the revised budget are provided in Table 17.2.
Table 17.2: Appropriation Statement for 2015 SEG Item Established Staff Government Wage Earners Travel & Communications Maintenance & Operations Purchase of Goods & Services Operating Grants & Transfers Special Expenditures Total Operating Costs Capital Expenditure Construction Purchase Grants & Transfers Total Capital Expenditure Value Added Tax TOTAL EXPENDITURE Budget Estimate ($) 4,433,563 237,993 166,250 29,935,509 453,255 1,251,900 1,000,000 37,478,470 - 800,000 - 800,000 4,853,300 43,131,770 Revised Appropriation Estimate Changes ($) ($) 4,604,063 170,500 280,493 42,500 (5,000) 161,250 31,500 29,967,009 375,755 (77,500) 1,089,900 (162,000) --- 1,000,000 --- 37,478,470 --- - --- 800,000 --- - --- 800,000 4,853,300 --- --- 43,131,770 Actual Expenditure ($) 4,075,661 272,362 153,433 26,978,899 365,104 1,084,397 716,129 33,645,985 - 579,900 - 579,900 4,361,543 38,587,428 Lapsed Appropriation ($) 528,402 8,131 7,817 2,988,110 10,651 5,503 283,871 3,832,485 - 220,100 - 220,100 491,757 4,544,342 17.4 Trading and Manufacturing Account (TMA) – Government Quarters Table 17.3: Income Statement Description Income Rental Income Total Income Expenditure Direct Labour Travel and Communication Maintenance and Operations Total Expenditure Net Profit 2015 ($) 2014 ($) 2,867,851 2,867,851 4,605,833 4,605,833 32,248 27,624 1,076,655 1,136,527 1,731,324 28,869 34,381 3,637,484 3,700,734 905,099 The net profit for the TMA increased by $826,225 or 91.3% in 2015 compared to 2014.
This was attributed to decrease in maintenance and operations expenditure by $2,560,829 or 70.4% compared to 2014 and travel and communication by $6,757 or 19.7% compared to 2014.

Whilst rental income decreased by $1,737,982 or 37.7%, the corresponding decrease in expenditure was the determining factor for increase in net profit for the year 2015.
Public Service Commission Section 17: Page 3 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Table 17.4: Balance Sheet Description Asset Cash at Bank Total Asset Liability Deposits and Deductions Equity Accumulated Fund Total Equity and Liability 2015 ($) 2014 ($) 1,039,347 1,039,347 1,429,251 1,429,251 218,425 55,009 820,922 1,039,347 1,374,242 1,429,251 Total equity and liability decreased by $389,904 or 27.3% compared to year 2014 and attributed to decrease in cash at bank by $389,904 or 27.3% with corresponding increase in deposit and deduction during 2015 by $163,416 or 297.1% compared to year 2014.
PART B: AUDIT FINDINGS 17.5 Agency Financial Statement 17.5.1 Performance Bond Account not disclosed The receipts and payments of Trust money must be recorded in a separate cashbook or set of ledger accounts.1 Each month the Trust account must be balanced and reconciled with Trust bank account.
The names and balances of each account must be listed and the reconciliation shall be signed by the responsible officer.2 All payments must be immediately recorded in the Financial Management Information System.3 The Commission maintained a bank account from 1 October 2014 to deposit performance bond collected from the contractors carrying out maintenance and upgrading of government quarters.

The audit noted that the Trust receipts totalling $191,221.59 was not recorded in the FMIS general ledger.
Details of performance bond receiced were not maintained and bank reconciliations for the accountwere not prepared for the year 2015.

The audit findings reflect lack of proper record keeping and accounting by the Principal Accounts Officer.
Recommendations The Ministry of Financeand Public Service Commissions Accounts should ensure that:   all the Trust accounts are recorded in the FMIS general ledger; and monthly reconciliations between the general ledger and the trust account are prepared and checked for any material misstatement or omission.
1 Finance Instruction 2010, Section 58(2) 2 Finance Instruction 2010, Section 58 (3) 3 Finance Instruction 2010, Section 15 Public Service Commission Section 17: Page 4 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Ministry’s Comments This responsibility has been moved to the Ministry of Economy 17.5.2 Performance Bond Account Anomalies The receipts and payments of Trust money must be recorded in a separate cashbook or set of ledger accounts.4 Each month the Trust account must be balanced and reconciled with Trust bank account.
The names and balances of each account must be listed and the reconciliation shall be signed by the responsible officer.5 All payments must be immediately recorded in the Financial Management Information System.6 The audit noted that performance bonds received by the Commission were not deposited into the TMA Performance Bond bank account.

The former Accounts Officers could not explain which bank accountthe bond monies were deposited to.
In addition, a sum of $6,980.74 was receipted under the FPO Trust account instead of the performance bank account.

Refer to Table 17.5 for details.
Table 17.5: Details of Receipts not reflected in the Bank Account Quarters Numbers 11 Richards 12 Richards 13 Richards 93 –Lawaqa 94 –Lawaqa 95-Lawaqa 101-Lawaqa Contractor Performance Bond ($) Receipt Remarks Building Works Contractor 10,730.00 Building Works Contractor Building Works Contractor 11,100.00 Number Commercial Bank Cheque Number 415187, Receipt 018636 Commercial Bank Cheque Number 415186, Receipt 018636 Number in deposited Not the Performance Bond account maintained at Bred Bank account.
Account Number: 00233280019 180 Veiuto Maintenance Contractor 6,980.74 Receipt 430595 Number Receipted under FPO Trust Fund Receipt The findings indicate that should depositors demand for refund of performance bond, it would be difficult to track theperformance bonds deposited.
Recommendations Ministry of Finance should ensure that:    all amounts receipted are properly recorded in a performance bond register; all amounts received are deposited and recorded in the TMA Performance Bond bank account;and investigateand establish the bank accounts in which bond monies were deposited.
4 Finance Instruction 2010, Section 58(2) 5 Finance Instruction 2010, Section 58 (3) 6 Finance Instruction 2010, Section 15 Public Service Commission Section 17: Page 5 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Ministry’s Comments This responsibility has been moved to the Ministry of Economy.
17.6 Trading and Manufacturing Account (TMA) 17.6.1 Receivables notreflected In the General Ledger records All Accounts receivable at the end of the year should be recorded in the FMIS general ledger to reflect the correct amounts in the TMA.

The Commission provides government quarters on rent to public at current market rate and for the civil servants at a rate of 8% of their annual gross salaries.
The audit noted that the Commission did not account for receivables totalling $356,440.76and related revenues in the FMIS General Ledger.

Refer to Table 17.6 for details.

Table 17.6: Accounts Receivable Amounts Not Reflected in General Ledger Rent Receivable Rental Arrears – Market Rent Rental Arrears – Vacated Tenants Rental Arrears – Direct Deductions by Salary Total Amount ($) 94,875.56 39,012.36 222,552.84 356,440.76 As a result, the total rental income wasunderstated by $356,440.76.
Recommendation The Ministry of Finance should ensure that TMA Accounts Receivable is reviewed to fully reflect the correct balance of Accounts Receivable.

Ministry’s Comments This responsibility has been moved to the Ministry of Economy.

17.6.2 Quarters Income and Bond not transferred from Operating Trust The Operating Trust Account is used to record the payroll deductions from the employees from each pay.
The Commission directly deducted rent from salaries of officers’ salaries who occupy government quarters totalling $2,619,301.58.

However rental deductions were not reflected as income in the FMIS ledger.

The Commission also maintained bond received from tenants for rental purposestotalling $84,071.07which were are also not reflected as rental bond in TMA liabilities.

Refer to Table 17.7 for details.
Public Service Commission Section 17: Page 6 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Table 17.7: Details of Rent Income and Bond in the Operating Account Allocation Number Allocation Rent Income ($) Bond Liability ($) 1-17305-02999-861701 Deduction for Rent of Government Quarters 428,940.66 1-17351-02999-861701 Quarters Salary Deduction 2,190,360.92 1-17351-02999-861929 Payroll Deduction Bond-Quarters Total 2,619,301.58 84,071.07 84,071.07 The findings indicate thatTMA total income was being understated by $2,619,301.58 whilst TMA liability understated by $84,071.07.
Recommendations The Ministry of Finance should ensure that:  the amounts are transferred from the operating trust account for rental deductions are recorded as TMA income and bond held are reflected as rental bond deposits under TMA Liabilities.

Ministry’s Comments This responsibility has been moved to the Ministry of Economy.

17.6.3 Poor Record Keeping for TMA - Government Quarters All the records shall be properly and securely maintained and readily made available for audit verification on request.
It also provides evidence of government and individual activity and promotes accountability and transparency.

Audit review of the maintenance and upgrading records for TMA government quarters noted the following anomalies.
 Remittance to Ministry of Finance totaling $1,142,344.80 were recorded as Maintenance and Operations expenses allocation;  Payment vouchers and supporting documents for maintenance and upgrading of government quarters were not provided for audit review; and  Records for maintenance cost for each government quarters, records of performance bond, progress reports, actual commencement and completion dates were not made available.
The findings indicate that the Commission did not maintain proper records for the maintenance and upgrading of government quarters.

Recommendation The Ministry of Finance should maintain proper records by having separate files for each project and details of bonds, payments by regularly updating into these files.
Public Service Commission Section 17: Page 7 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Ministry’s Comments This responsibility has been moved to the Ministry of Economy.
17.6.4 TMA Journals Not Provided for Audit Journal vouchers shall be used to correct accounting errors and make other required transfers between accounts.7Once the relevant ledgers have been updated, the journal vouchers together with the supporting documents shall be forwarded to the Accounting Head or Accounts Supervisorfor filing.8 The Commission posted journals totalling $2,867,851.01 in the Rental for Official quarters and Bond Government Quarters allocations totalling $215,018.99 in the Trading and Manufacturing Account.
 However journalvouchers for rental for Official quarters totaling $2,878,220.80 being credit entries and $10,369.79 in debit were not provided for audit despite several requests.

Refer to Appendix 17.I for details of journals posted.

The findings indicate the laxity to maintain proper records relating to government quarters.

Recommendation The Office Accommodation Unit should ensure that accounting records such as journals are made readily available for audit review.
Ministry’s Comments This responsibility has been moved to the Ministry of Economy.
7 Public Service Commission, Pro-forma Finance Manual 2013, Section 16.1.1 8 Public Service Commission, Pro-forma Finance Manual 2013, Section 16.1.7 Public Service Commission Section 17: Page 8 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ APPENDIX 17.1: Details of Journal Posted and not provided to Audit Journal 022005 022011 022018 022019 022034 022043 Journals in Rental for Official Quarters Debit Amount ($) Credit Amount ($) 509,318.42 134,448.53 Journal Description JV 08/01/15 JV 14/02/15 162,260.74 12,456.57 JV 10/3/2015 JV 11/03/15 185,211.87 177,655.65 JV 16/04/15 – JV 17/04/15 JV 26/5/15 Journal Journals in Bond Government Quarters Account Journal Description Debit Amount ($) Credit Amount ($) 400.00 JV8/01/15 022005 TMA001 022011 AP2237 022018 52,741.47 Transfer PSC Bond from 02 to 17 JV14/02/15 5,700.00 Refund Bond JV10/3/15 3,500.00 of 1,000.00 AP2823 200.00 022046 230,661.12 JV 33/5/15 AP8362 800.00 022053 022061 AP9412 142,089.50 JV 13/6/15 AP9087 600.00 (6,875.85) 177,252.46 JV 12/7/15 TELD BOND AP1265 AP1437 1,000.00 25.00 022069 (600.00) JV 8/8/15 AP4415 500.00 022071 (2,800.00) JV 10/8/15 AP6066 677.00 022074 AP7534 022082 022087 022096 022098 022106 022113 136,835.40 JV 13/8/15 (93.94) Refund of Rent and 124,581.75 33,186.59 Bond JV 2/10/15 JV 7/10/15 385,187.65 2,399.97 181,929.42 282,745.16 JV17/10/15 JV 2/11/15 JV 5/12/15 JV 13/12/15 800.00 476.61 116.85 125.00 175.00 2,000.00 AP6987 022034 022043 AP7533 022053 AP1819 022061 AP2848 AP2848 022074 AP0868 AP0170 AP0172 AP0200 75.00 Public Service Commission of Refund Bond Payment Refund Bond Quarters 129 Domain Refund Bond Quarters 166 Refund Refund Bond Payment Refund Bond Quarters 195 Veiuto Quarters 224 Stoddard Road Refund Bond JV16/04/15 - JV17/04/15 JV26/5/15 Quarters 124 Imthurn JV13/6/15 Refund JV12/7/15 Bond Refund Payment Bond Refund Payment JV13/8/15 2,000.00 5,050.00 9,000.00 2,125.00 1,500.00 Refund Bond Domain 75.00 Refund Bond 230.80 Refund Bond Refund Bond of 109 of of of
 Section 17: Page 9 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Journals in Rental for Official Quarters Journal Debit Amount ($) Credit Amount ($) Journal Description Journal Journals in Bond Government Quarters Account Journal Description Debit Amount ($) 230.80 Credit Amount ($) AP0200 AP7534 AP9752 20.00 75.00 AP9752 230.80 022082 022096 AP3799 1,000.00 AP5886 2,000.00 AP0353 443.65 AP1084 15,818.80 AP1084 AP1084 AP9768 022106 022113 AP7305 213.78 86.23 406.78 3,000.00 AP9591 239.76 119.23 92,455.32 of Refund Bond Refund of Rent & Bond of Refund Bond Refund Bond JV2/10/15 JV17/10/2015 of of Refund Bond Refund Bond Quarters 8 Clearance Water Quarters 85 Bill of Bond Performance Payment Refund Bond FC716 KF2811 41,144.23 31,314.00 JV5/12/15 JV13/12/15 Refund Bond of Bill Payment for Quarters 118 Garvey Total (10,369.79) 2,878,220.80 32,336.06 247,355.05 Public Service Commission Section 17: Page 10 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Section 18 Ministry of Rural, Maritime Development and National Disaster Management Role and Responsibilities Government is committed to improving the provision of services to Fijians living in rural, peri-urban and maritime areas, ensuring that all people across the country enjoy the same level of attention.
Government believes that every Fijian has the right – no matter where they live – to the same access to such things as sealed roads, electricity, water, education, health and telecommunications.

The Ministry of Rural and Maritime Development and Disaster Management manages and coordinates Government’s rural and maritime development programs.
Guided by the socio-economic rights enshrined in the Fijian Constitution, the Ministry is focused on providing Fijians with the things they need to empower themselves and support their families.

The Ministry’s programs are targeted at generating economic growth and improving living standards in Fiji’s rural and maritime communities, which include self-help programs, work on non-cane access roads, maritime roads, and housing assistance.
The Ministry runs the Committee for the Better Utilization of Land [CBUL] which is tasked to help landowners put their land to productive use.

The Ministry also provides support services to rural, peri-urban and maritime communities, such as registration of births, deaths and marriages, issuing licenses and collecting license and permit fees.

Under the Disaster Management portfolio, the Ministry helps Fiji prepare for natural disasters and respond in their aftermath.
The Ministry is also responsible for the implementation of the National Disaster Management Strategy as required by the 1995 National Disaster Management Plan and the National Disaster Management Act 1998, covering disaster prevention, mitigation, preparedness, response, emergency operations, relief and rehabilitation.
Table of Contents PART A: FINANCIAL STATEMENTS ...................................................................................................................................... 2 18.1 Audit Opinion 2 18.2 Statement of Receipts and Expenditure ................................................................................................................... 2 18.3 Appropriation Statement .......................................................................................................................................... 3 18.4 Trust Fund Account Statement of Receipts and Payments ..................................................................................... 4 PART B: AUDIT FINDINGS ....................................................................................................................................................... 4 18.5 Write Off for Receivables and Trust accounts.
......................................................................................................... 4 18.6 Board of Survey reports not provided ...................................................................................................................... 5 18.7 Unsubstantiated Expenditure – Main Trust Fund Account ....................................................................................... 6 Long Outstanding Project deposits in the Trust Fund Account ................................................................................ 7 18.8 18.9 Poor Implementation and other Anomalies for Self Help Projects ........................................................................... 8 18.10 Non-Issuance of Purchase Order for Emergency Water Supply ............................................................................ 11 18.11 Absence of Delivery Dockets & Competitive Quotations ....................................................................................... 12 18.12 Payment Made for Incomplete Non Cane Access Road ........................................................................................ 14 18.13 Rural Housing Assistance – Delay in Construction ................................................................................................ 17 18.14 Anomalies Noted for Public Sector Investment Program – Northern Division........................................................ 19 18.15 Inadequate Management of Project Materials/Items at Top Yard Store ................................................................ 21 Section 18: Page 1 Ministry of Rural and Maritime Development and National Disaster Management REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ APPENDICES ........................................................................................................................................................................... 24 APPENDIX 18.1: Follow Up Prior Year Audit Issues
 ................................................................................................ 24 APPENDIX 18.2: Western Divisions – Rural Housing Assistance Anomalies ....................................................... 25 APPENDIX 18.3: Western Division Non Cane Access Roads Anomalies .............................................................. 26 APPENDIX 18.4: Northern Division Non Cane Access Roads Anomalies ............................................................. 28 APPENDIX 18.5: Western Division Self Help Projects ............................................................................................. 29 Northern Division Self Help Projects ............................................................................................ 30 APPENDIX 18:6: Northern Division PSIP – Kubulau Duplex Quarters ................................................................... 30 APPENDIX 18:7: Project Funds Received But Project Have Not Initiated ............................................................. 31 APPENDIX 18:8: APPENDIX 18:9: Details of Unclaimed Wages for Deceased Employee Not Yet Paid .......................................... 32 APPENDIX 18:10: Walu Bay Top Yard Store Anomalies ........................................................................................... 33 ___________________________________________________________________________________________________ PART A: FINANCIAL STATEMENTS 18.1 Audit Opinion The audit of the 2015 accounts of the Ministry of Rural, Maritime Development and National Disaster Management resulted in the issue of a qualified audit report.
The qualification was as follows: The Board of Survey was in progress during the audit and as such the audit could not substantiate the Statement of Losses (other than money) contrary to section 49(2) of Finance Instructions 2010.

18.2 Statement of Receipts and Expenditure The Ministry of Rural, Maritime Development and National Disaster Management collected revenue totalling $1,209,158 and incurred a total expenditure of $29,926,149 in 2015.

Refer Table 18.1 below for details.
Table 18.1: Statement of Receipts and Expenditures for 2015 Description RECEIPTS State Revenue License Arms License Liquor License Trading Other State Revenue Total State Revenue Agency Revenue Miscellaneous TOTAL REVENUE EXPENDITURES Operating Established staff Unestablished staff Travel & communication Maintenance & Operations Purchase of goods & services Operating grants & transfers Special expenditures Total Operating Expenditure 2015 ($) 2014 ($) 657 696,403 204,901 61,008 962,969 --- 790,504 373,384 106,576 1,270,464 246,189 1,209,158 31,721 1,302,185 5,286,723 1,411,416 569,360 902,938 620,262 464,195 2,260,058 11,514,952 4,888,807 1,411,400 339,629 862,941 579,061 38,019 2,172,947 10,292,804 Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 2 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Description Capital Expenditures Capital Construction Capital Purchases Capital Grants & Transfers Total Capital Expenditure Value Added Tax TOTAL EXPENDITURES 2015 ($) 2014 ($) 2,603,261 199,715 14,638,901 17,441,877 969,320 29,926,149 2,169,090 3,026,226 17,908,733 23,104,049 1,126,433 34,523,286 The decrease in revenue by $93,027 or 7% was mainly due to the decrease in receipt of liquor licenses fees, registration fees and building plan fees.
The total expenditure decreased by $4,597,137 or 13% in 2015 compared to 2014 as a result of the decrease in capital grants and transfers fund allocated to the Ministry during the year.

18.3 Appropriation Statement The Ministry incurred expenditure totalling $29,926,149 against the revised budget of $32,107,650 resulting in a savings of $2,181,501 or 6%.

Details of expenditures against the budget estimates are provided in Table 18.2 below.
Table 18.2: Appropriation Statement for 2015 SEG Item Established Staff Government Wage Earners Travel & Communication Maintenance & Operations Purchase of Goods & Services Operating Grants & Transfers Special Expenditure Total Operating Costs Capital Expenditure Capital Construction Capital Purchases Capital Grants & Transfers Total Capital Expenditure Actual Expenditure ($) Carry Over ($) Budget Estimate ($) 5,598,467 1,452,029 422,160 835,950 825,910 683,504 1,274,000 11,092,020 Changes ($) (37,354) 1,639 162,258 91,613 (79,515) (109,878) 1,358,069 1,386,832 Revised Estimate ($) 5,561,113 1,453,668 584,418 927,563 746,395 573,626 2,632,069 12,478,852 5,286,723 1,411,416 569,360 902,938 620,262 464,195 2,260,058 11,514,952 3,030,000 200,000 16,797,438 20,027,438 (89,559) --- (1,283,839) (1,373,398) 2,940,441 200,000 15,513,599 18,654,040 2,603,261 199,715 14,638,901 17,441,877 Lapsed Appropriation ($) 274,390 42,252 15,058 24,625 126,133 109,431 372,011 963,900 337,180 285 874,698 1,212,163 5,438 0 0 0 0 0 0 0 0 0 0 0 0 0 13 Value Added Tax 988,192 (13,434) 974,758 969,320 TOTAL EXPENDITURE 32,107,650 --- 32,107,650 29,926,149 --- 2,181,501 Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 3 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ 18.4 Trust Fund Account Statement of Receipts and Payments Total closing balance of the Trust Fund account for the Ministry increased by $511,054 or 12% in 2015 due to net adjustment of $551,293 made to the account in 2015.
Refer Table 18.3 for details: Table 18.3: Trust Account Account RECEIPTS Environment Trust Tender Deposits Rural Housing Deposits Scheme II Unclaimed Wages Community Contributions Rural Housing Scheme I Prime Minister’s Officer Disaster & Rehabilitation Trust Fund One – Third Self Help Projects Cities Trust Total Receipts PAYMENTS Environment Trust Tender Deposits Rural Housing Deposits Scheme II Unclaimed Wages Community Contributions Rural Housing Scheme I Prime Minister’s Officer Disaster & Rehabilitation Trust Fund One – Third Self Help Projects Cities Trust Total Payments 2015 ($) 163 649 238,854 397 152 159,134 1,013,086 27,578 336 1,440,349 2 34 280,893 505 35 111,343 1,077,198 7,040 3,538 1,480,588 2014 ($) 1,000 107,353 229,247 6,524 6,300 121,265 4,015,995 101,718 --- 4,589,402 --- 25,761 150,863 2,236 --- 267,472 2,487,081 99,660 --- 3,033,073 Net (Deficit)/Surplus (40,239) 1,556,329 Add Balance as at 1 January 4,101,313 2,544,984 Add: Net Adjustment 551,293 --- Closing Balance as at 31 December 2015 4,612,367 4,101,313 PART B: AUDIT FINDINGS 18.5 Write Off for Receivables and Trust accounts.
Subject to this or any other Act, the Minister of Finance may write off losses in respect of public money, state assets and agency assets.1 The Finance Instructions may require each budget sector agency: (a) To undertake appropriate recovery action for losses; 1Financial Management Act 2004 – section 34(1)(a) Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 4 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ (b) (c) To maintain a register of losses containing the details required to be recorded by the Finance Instructions; and To include details about losses and recovery action in the audited financial statements to be included in the agency’s annual report.2 The audit noted that the Ministry of Finance approved the following write-off to the Ministry’s general ledger balances for the year ended 31/12/15.
Refer Table 18.4 for details.

Table 18.4: Details of write-off approved by Ministry of Finance Nature of Account Liability General Ledger Account Various – SEG 89 Accounts Receivable Various – SEG 56 Description Various Trust Fund Liability Employee Deduction Amount ($) 551,293 40,175 Write-off submission comments by the Ministry The Ministry was not able to substantiate the difference between the two bank balance and the FMIS general ledger balance.
These were debits sitting in the Operating Trust Fund Account and were transferred to SAG 560600 in order for the Funding process to commence in our Trust Fund Allocations.

Poor reconciliations and lack of monitoring has resulted unreconciled variances being carried forward from previous years until the write off in the 2015 accounts.
Recommendations   The Ministry should ensure that monthly reconciliations are properly carried out and reconciled to the FMIS records and any variances are investigated and adjusted promptly.

Supervisory checks should be strengthened to prevent such discrepancies from recurring.

Ministry’s Comments The recommendations are noted.

The write-off was approved to regularize the books.
18.6 Board of Survey reports not provided Annual board of survey must be conducted by three officers who are independent of the officer responsible for the custody of the assets.

A written record must be kept of each board of survey and must be signed and dated by the officers undertaking it.3 The audit noted that the Ministry failed to submit the Board of Survey report for the year 2015 for audit review as the survey was in progress.
In the absence Board of Survey reports, the Statement of Losses (Other than money) maybe incomplete.

In addition, there is risk of loss or damage to assets not being detected on timely basis.
2Financial Management Act 2004 – section 35 3 Finance Instruction 2010 – Section 49(2) Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 5 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ The above issue was highlighted to the Ministry last year.

However, the Ministry failed to implement audit recommendation.
The risk of loss of assets and their condition and use for intended purpose is high when BOS reports are not prepared in a timely manner.

Recommendation The Director Corporate Services should ensure that a Board of Survey is carried out annually in accordance with Section 49 of the Finance Instruction and a copy is readily available for audit verification.

Ministry’s Comments The recommendations are noted.


The Procurement Unit at Headquarters has taken the initiative to visit the various Divisions to ensure that the annual Board of Survey is being carried out.
18.7 Unsubstantiated Expenditure – Main Trust Fund Account The Manager Finance is responsible for the safekeeping and proper maintenance of all accounting records or documents.4 Audit could not substantiate expenditures totalling $144,229 as the Ministry did not produce the relevant records required for audit review.

Refer Table 18.5 below for details.


Table 18.5: Details of Documents not produced for Audit Verification Cheque # Date Amount ($) Nature of the Amount as per Trust Fund Statement ($) 26 16/02/15 77,194 Prime Minister’s office Disaster & Rehab Fund 852 31/08/15 10,090 Rural Housing Scheme I 829 01/06/15 19,999 843 21/07/15 30,546 Remarks/ Anomaly Release of funds from Trust Account for the food ration assistance to the Tikina of Vutia Rewa affected by the sewer pipe repair works.
There was no acquittal submitted to audit to determine how the fund was used.

Payment for the supply of building material.

There was no report submitted to audit to determine if the materials have been delivered to the recipients.

Payment for the supply of building material to five applicants There was no report submitted to audit to determine if the materials have been delivered to the recipients.
Payment for the supply of building material to four applicants There was no report submitted to audit to determine if the materials have been delivered to the recipients.

817 05/03/15 6,400 Rural Housing Scheme II Purchase of Building material for Vunidogoloa Community Hall.

There was no report submitted to audit to determine if the materials have been delivered to the recipients.
Total 144,229 4 Ministry of Rural, Maritime Development and National Disaster Management, Finance Manual 2013 - Section 17.2.1 Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 6 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ In the absence of records and supporting documents, transactions recorded in the general ledger for amount totaling $144,229 could not be substantiated.
As such there is high risk of fraudulent and unauthorized payments.

Recommendation  The Manager Finance should strengthen record keeping in the Accounts Division to ensure that all accounting records are properly kept and submitted to audit upon request.

Ministry’s Comments The recommendations are noted and vouchers have been filed accordingly and will be done so in future.
Further OAG’s Comments The Ministry did not produce acquittals and delivery dockets to substantiate the expenditure incurred by the Ministry.

18.8 Long Outstanding Project deposits in the Trust Fund Account The proper management of expenditure is fundamental to ensuring value for money in delivering services to the community.
As well, having cost effective internal controls within the purchasing and payments system plays an important part in ensuring that waste of funds, over-expenditure and corruption do not occur5.

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

The names and balances of each account must be listed and the reconciliation shall be signed by the responsible officer.

Un-reconciled items must be investigated and resolved promptly6.
As at 30/09/15, the Ministry’s Main Trust Fund Account balance amounted to $3,950,800.

The balances in this account relates to Rural Hosing Deposit, Unclaimed Wages, Community Contribution for Self-help projects and the Prime Minister’s National Disaster and Rehabilitation Fund.

The audit review of the Trust Fund Account Reconciliation noted that project funds are still maintained dated back from 2003.

No records were kept at the Ministry to determine whether the projects have been completed.
Refer Table 18.6 below and Appendix 18.8 for details.

Table: 18.6 Details of Project Funds Received Without Any Project Records Project Funds Rural Housing Assistance Scheme II PM's Relief & Rehabilitation Lau Grant to Self-Help Projects: 1/3 Contribution Total Amount ($) 170,229 72,528 1,680 244,437 In addition, the audit noted that amounts totalling $5,858 is maintained in the Trust Fund account in relation to unclaimed wages for deceased workers received from other organisations.
Wages held in the account have not been paid out to the beneficiaries for more than 10 years.

Refer to Appendix 18.9 for details.


5 Ministry of Rural and Maritime Development and Disaster Management, Finance Manual 2013 – Part 2 66 Finance Instructions 2010 – Section 58(3) Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 7 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ The audit findings indicate lack of proper monitoring of projects and associated project funds.
In addition, unclaimed wages kept in Trust Fund account for more than 10 years indicates lack of proper monitoring of funds in the account by Accounting Officers.

Recommendations   The Ministry should investigate the previous year’s unutilized contributions and ensure that pending projects are completed first before initiating new projects.

The Ministry must ensure that proactive measures are taken to identify the beneficiaries of unclaimed wages to process payments.
The Corporate Services section should consult the relevant stakeholders to identify the legal beneficiaries so that payment can be made to avoid carry forward of the balance to the next accounting period.

Ministry’s Comments The above comments and recommendation are noted and every effort will be taken to ensure that pending projects are completed and beneficiaries are identified.
Further the Ministry has also begin to apply appropriate measure by withholding the process of new projects whilst it first clears unclaimed funds in its Trust Fund Account.
18.9 Poor Implementation and other Anomalies for Self Help Projects Provincial Administrators/District Officers are to be assisted by the recipient Community Management teams to monitor projects on a regular basis and provide progress reports to Divisional Commissioners on a monthly basis.7 Upon completion of a project, Provincial Administrators and District Officers are to forward a physical acquittal report to the Divisional Commissioners in the form of a completion certificate.8 The self-help project benefits the individuals, groups and community to improve their sources of livelihood.
Such project includes resource based and other cottage and niche market activities which utilize local resources and provide the needs of the local communities.9 A standard Memorandum of Understanding (MOU) where necessary is to be signed between the Divisional Commissioners and the recipient community on the use of a 'project' especially on machine related equipment.10 Monitoring and Evaluation are to be conducted by respective project management teams at the following four levels: community; provincial and district level; divisional level (Planning and Coordination Cell); and HQ (Development Unit).11 The audit noted poor implementation of self-help projects.
The following anomalies were noted:  Project yet to be completed, even though all the materials have been delivered as recipients now face financial issues in the completion of the projects;  Completed water project failed to successfully deliver water to all individual homes as members continue to face transportation of freshwater from the source to their homes.
7 Ministry of Rural, Maritime Development Standard Operating Procedure – Part IV, Section 8.2 8 Ministry of Rural, Maritime Development Standard Operating Procedure – Part IV, Section 7.5 9Ministry of Rural, Maritime Development Standard Operating Procedure – Part IV, Section 2.1(ii) 10 Ministry of Rural and Maritime Development Standard Operating Procedure – Part IV, Section 7.4 11Ministry of Rural and Maritime Development Standard Operating Procedure – Part IV, Section 8.1 Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 8 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Refer Table 18.7 of projects reviewed.
Table 18.7: Details of Poor Implementation of Self Help Projects Name of Project Date Cheque No.

Amount ($) Audit site visit observation Commissioner Western Division Commissioner Western Division 14/9/15 2294 15,584 Delay in completion of the project.

Poultry Farming Project The timeframe for the project was 6-8 weeks upon supply of goods12.

Hence the project should have been completed by 14/11/15.

Audit visit on 19/11/15 noted the project was incomplete and materials lying idle.
12/4/15 1491 18,475 Completion certificate not provided as required under section 7.5 of the standard operating procedure for self-help; Refer figure Appendix 18.5.1 for site visit verification.
Koro 2 Settlement Water Project Commissioner Northern Division 11/05/15 1077 06/08/15 1412 06/05/15 19988 Fish Pond Project Eastern Division No monitoring report as required under section 8.1 and 8.2 of the standard operating procedure for self-help; The project failed to supply continuous water supply to the 70 families13 homes as required in the project paper; Refer figure Appendix 18.5.2 for site visit verification.
11,000 The audit visit to the 2 fish ponds constructed noted that the ponds were empty and dry.

5,264 307 Discussions revealed that this was due to shortage of fresh water supply indicating that the Ministry failed to determine the source of fresh water supply before proceeding with the project.

Refer to appendix 18.6.1 showing empty ponds.


Kadavu Fisherman Project (23 feet Fibre Glass Boat) 24/8/15 1195 The Ministry failed to enter into a MOU between the Divisional Commissioner and the recipient as required under section 7.4 of the standard operating procedure for self-help; 20,660 Uprising Youth Project (2 x 60HP Yamaha Engine) Completion certificate was not provided as required under section 7.5 of the standard operating procedure for self-help.
The Ministry failed to enter into a MOU between the Divisional Commissioner and the recipient as required under section 7.4 of the standard operating procedure for self-help; 21/10/15 1373 19,800 Project profile not endorsed by CED as required under section 6.2 of the standard operating procedure for self-help.
Natokalau Housing Scheme 08/05/15 1005 10,706 12 Project Proposal Form – Section 6 13 Project Proposal Form for Koro # 2 Water Project Tavua– Section 4(a) Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 9 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Mualevu Footpath Project 29/05/15 1049 1,400 No monitoring report as required under section 8.1 and 8.2 of the standard operating procedure for self-help.
Total 103,196 Failure to properly record and monitor progress of the projects, safeguard and endorse project papers may result in delay in implementation and completion of self-help projects.

In the absence of completion certificate, there is a risk that the project may not be surveyed, evaluated and certified by Technical Officer to ensure that it is completed satisfactorily to the required standard.
Recommendations  The Ministry should ensure that projects are completed as stated in the project proposal forms.

 The Commissioners and the Provincial Administrators should ensure that all completed projects are certified by the respective technical officers after completion.

 The Ministry must enter into a standard Memorandum of Understanding (MOU) where necessary between the Divisional Commissioners and the recipient community on the use of project especially on machine related equipment.
Ministry’s Comments The Ministry has strengthened its monitoring capability to ensure regular monitoring and evaluation of all its funded projects.

The Ministry Management Team will be more vigilant and its monitoring team will be working collaboratively with the Planning Unit at the Divisional level to ensure projects are implemented according to the scope of work and within the specified timeline and approved budget as articulated in the project paper.
This should help in early detection of any shortcomings and their immediate rectification for the realisation of project objectives.

The Ministry will ensure that completion certificate certified by the technical officers is verified by the Divisional Planning Officer and, if need be, accompanied by pictures before payment is done.
The Ministry will ensure that where necessary a Memorandum of Understanding (MOU) is entered into between the Provincial Administrators/District Officers and the project recipient(s) specifying the roles of the recipient(s) in the timely implementation and satisfactorily completion of projects, including the use of project-related equipment by the recipients .

CND Fish Pond The project was initiated and recommended for funding by Ministry of Fisheries.
They were engaged as technical advisor towards the phases of implementation.

The fisheries officer confirmed in the proposal that the soil was tested and can contain water for fish pond project.

During the audit inspection last year, the division was facing a long dry spell that also had affected the water source.

According to the applicant, the pond starts to fill and contain water.

The team are working on the improvement of plumbing works to ensure free flow of water to the pond.
Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 10 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ CWD POULTRY FARMING PROJECT The Applicant, in his SHP Application, stated that the 6-8 weeks timeline for project implementation was a favorable conditions.

The SHP Proposal stated that the Turaga ni Koro were to assist the applicant in the implementation of the project.
When the project was twice visited, it was evident that the applicant was not receiving any help from any other community members neither any assistance from the Turaga ni Koro.

The applicant was only able to progress in his construction works when the Carpenter he requested was free to help and also the applicant was paying for the carpenter’s expenses himself.

This project is progessing slowly because of the above.

The comments is noted .


KORO 2 SETTLEMENT WATER PROJECT The community of Koro# 2 Tavua in their SHP Application stated that the Community will fully undertake the implementation of the Project once Government supplies the necessary materials.

Applicant clearly states in the SHP Application that the whole community will undertake the Project.

The community timeline for the project implementation was not honoured by applicant and community as a whole.

The auditors comments are noted.


This project will be revisited to rectify the shortfalls.

It should be noted that as the SHP conditions, it is the applicant(receiver) who is responsible for its implementation and completion .

CED  The Provincial Administrator Kadavu had signed MOU on behalf of the Ministry and the project owner.

Pictorial evidence and a copy of sign MOU is attached with the Project Paper.

 The project paper had been endorsed by CED as being required by Section 7.4.
 The Office of Commissioner Eastern will ensure that it enters into an agreement with project owner and a copy will be sent to Auditor General’s Office as soon as the copy is received.

 Non availability in the Shipping Services however the Commissioner Eastern Division will ensure that projects is monitored and copies of Completion Certificate sent to Office of Auditor General.
18.10 Non-Issuance of Purchase Order for Emergency Water Supply A Local Purchase Order (LPO) shall be issued when procuring any goods, services or works from an organization within Fiji, unless a contract or agreement has been entered into.14 The audit noted that the Ministry did not issue Purchase Order to the following company for carting of emergency water to the various rural settlements and villages.

Refer Table 18.8 for details.


Table 18.8: Details of Payment Made to Companies without issuing Purchase Order Date Cheque No.

Details Western Division 30/10/15 17/11/15 Northern Division 2457 2345 Carting of emergency water to villages & settlements that urgently need emergency water to the various settlements in Nadroga/Navosa.
Amount ($) 11,970 9,979 14 Ministry of Rural and Maritime Development and National Disaster Management, Finance Manual 2013 – Section 2.5.1 Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 11 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Cheque No.
Details Date 18/08/15 19/08/15 19/08/15 3/12/15 27/11/15 1497 1509 1512 2285 2286 18/09/15 1731 18/09/15 25/11/215 1733 2240 18/09/15 1734 4/12/15 2298 Total Emergency Water Operation in Labasa from 27th of July to 1st of August Emergency Water Supply in Labasa from 29th of July to 10th of August 2015 Emergency Water Operation in Labasa from the 3rd to the 9th of August 2015 Emergency Water Operation in Bua from 22nd September to the 22nd October.
Emergency Water Operation in Labasa from the 2nd to the 14th of November 2015.

Emergency Water Operation in Labasa from 24th August to the 03rd September 2015 Emergency Water to drought stricken areas in Seaqaqa Payment being made for the hire of contractor for Emergency Water Operation for the 27th October to 07th of November 2015 Emergency Water Operation in Savusavu for the 10th August to the 2nd September 2015 Emergency Water to drought stricken areas in Seaqaqa.
Amount ($) 4,230 5,715 3,780 12,240 7,110 6,344 3,240 5,940 5,850 6,165 82,563 Processing payments without proper documentation increases the risk of double and fraudulent payments.

Recommendation The Divisional Accountant should ensure that a purchase order is issued when procuring any goods and services.

Ministry’s Comments CND LPO were not issued for this exercise since contractors engaged have signed the contract agreement and were working according to the guideline set under the contract.
Engaged Contractors engaged were send to various areas depending on the requests received daily.

Therefore the distance they cover differs from each other.

CWD This follow -on from the drought (long dry spell) operation in the Western Division explained above.

There were no Government contracted trucks in the Nadroga/Navosa area and the only trucking company with water delivery tanks and water pumps were with the company in question.
Due to urgency of this drought operation and the many areas to be responded to, trips cannot be pre- determined and the issuing of LPO was a cumbersome exercise as we cannot wait for this process at the expense of the affected populace.

Memorandum of Agreement (MOA) was drawn and Provincial Administrator Nadroga/Navosa office directed the engagement of the trucks in the area with payments done on invoice.

Audit comments are noted.
18.11 Absence of Delivery Dockets & Competitive Quotations A minimum of three competitive quotes must be obtained for the procurement of goods, services or works valued at $1,000 and more but $50,000 and less.15 The quotation process is intended to ensure that the agencies receive value for money based on fair competition and ethical dealing.16 15 Procurement (Amendment) Regulation 2012 – Section 29 (1) 16 Fiji Procurement Regulation – Guide to procurement process for purchases below $50,000, Section 4.0.
Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 12 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ The Accounts Officers must not certify a payment as correct unless they are satisfied that it is in accordance with an LPO, indent, contract, invoice or other authorization; there is documentation that the goods, services or works have been received.17 Contrary to the above regulation, the audit noted that the Ministry failed to obtain competitive quotes and delivery dockets for the following payments record.
Refer Table 18.9 below for details.

Table 18.9: Water Supplies Showing absence of competitive quotes and delivery dockets– Emergency Date Cheque No.
Western Division Particulars Amount ($) Anomalies 18/05/15 18366 Cartage of freshwater to malolo Island 29/07/15 1862 30/07/15 1880 30/10/15 2457 17/11/15 2345 Northern Division 2285 3/12/15 27/11/15 2286 18/09/15 1731 18/09/15 1733 25/11/15 2240 18/09/15 1734 4/12/15 2298 Cartage of freshwater to yalobi village in Yasawa Island Cartage of freshwater to nacula health centre & naisilisili village in Yasawa Island and yanuya Island in Malolo.

Freshwater Cartage villages in nadroga/navosa.


to various settlements & from in Labasa Emergency Water Operation in Bua from 22/09/15 to 22/10/15.

Emergency Water Operation in Labasa from the 02/11/15 to 14/11/15.

Emergency Water Operation 24/08/15 to 03/09/15.

Emergency Water to drought stricken areas in Seaqaqa Emergency Water Operation in Savusavu for the 27/10/15 to 07/11/15.

Emergency Water Operation in Savusavu for the 10/08/15 to 02/09/15.

Emergency Water to drought stricken areas in Seaqaqa.
No delivery dockets and only one quotation sighted Only one quotation sighted 9,500 10,500 No delivery dockets for Malolo delivery and only one quotation 24,000 11,970 No quotations sighted 9,979 No quotations sighted Competitive obtained quotation not Quotation not obtained 12,240 7,110 6,344 3,240 5,940 5,850 6,165 112,838 In the absence of competitive quotes the audit was not able to establish that the procurement process received value for money based on fair competition and ethical dealing.
Failure to produce delivery dockets indicates risk of fraud.
17 Ministry of Rural and Maritime Development and National Disaster Management, Finance Manual 2013- Section 2.8.4 (i) & (ii) Section 18: Page 13 Ministry of Rural and Maritime Development and National Disaster Management REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Recommendations   The Ministry should ensure that competitive quotes are obtained for procurements above $1,000 as required under the procurement regulations.
The Ministry must obtain confirmation of delivery to establish that the services have been rendered prior to releasing payments.

Ministry’s Comments CND Competitive Quotes were not obtained since contractors engaged in the Emergency Water Operation had to attend to requests received from various areas as and when required.

Tallyman from WAF always accompanies a delivery truck and signs on the forms to confirm that water have been delivered.

The tallyman and the driver both signed on the tally sheet.
CWD This is again an extension of the drought operations explained above and this is for the Western Division Maritime Zone.

Note that there is only one barge water carting service provider in the Division, thus the engagement of the company as there are no other company to provide any other quotation.

Misplaced delivery docket kindly noted.

Audit comments noted.
18.12 Payment Made for Incomplete Non Cane Access Road Non Cane Access Roads Scheme is focused towards the construction of new farm roads to open up areas that have potential for commercial agro-based activities.18 Non cane access roads are those that provide access for commodities other than sugarcane in rural isolated areas.19 The Manager Finance or Accounts Officer must not certify a payment as correct unless they are satisfied that there is documentation that the works have been carried out.
20 Review of the payments made for the non-cane access roads for the Western and Northern Division noted that full payments were made for incomplete work.
Refer to Table 18.10 for details: 18Ministry of Rural and Maritime Development Standard Operating Procedure – Part VI, Section 1.1 19Ministry of Rural and Maritime Development Standard Operating Procedure – Part VI, Section 2.1 20Rural and Maritime Development and Natural Disaster Management Finance Manual 2013 - section 2.8.4 (ii) Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 14 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Table 18.10: Payments Made for Incomplete Non Cane Access Roads Name of Road Date Cheque No Amount ($) Particulars Audit Remarks Western Division Naduadua Farm Road 1538 16/04/15 29,000 Payment made for 3.0km of road for the following: -Clearing, Grubbing, Formation & Drainage - $11,000.
-Gravelling - $18,000 -No evidence of graveling done.

Payment certified by Engineer (EDP # 92423) on 15/05/15.

-Refer to Figure appendix 18.3.1 for detail site visit.

-Overpayment of $4,000.


$25,000 while $29,000] the Ministry paid amount [Contract Amount was totalling Namilamila Farm Road Tokoni Farm Road 1629 18/05/15 28,800 Payment made for 3.6km of road for the following: - Clearing, Grubbing, Formation & Drainage - $6,800 - Gravelling - $22,000 1532 14/04/15 25,000 Payment made for 2.9km of road for the following: - Clearing, Grubbing Formation & Drainage - $10,000 - Gravelling - $15,000 Only 0.9 km of road graveled for 3.6km of payment being made.
Payment certified by Engineer (EDP # 92423) on 15/05/15.

Refer Figure appendix 18.3.3 for detail site visit.

--Little evidence of gravelling done for 2.9km of road.

Payment certified by Engineer (EDP # 92423) on 15/05/15.

Refer appendix 18.3.2 for detail site visit.

Northern Division 1576 1796 2244 1576 1796 2244 Valetokoni Village Access Road Naduru Village Access Road 01/09/15 01/10/15 26/11/15 43,632 Payment made for 4km of road.
-Only 1.3 km of road was constructed contrary to the 4km paid to contractor.

Payment certified by Engineer (EDP # 21787) on 26/11/15.

01/09/15 37,525 01/10/15 26/11/15 Payment made for 4km of road.

1531 24/08/15 44,942 1796 01/10/15 Nabubu Village Access Road Payment made for 4km of road.

Total 208,899 -Refer to appendix 18.4.1 for detail site visit.

-Only 3 km of road was constructed contrary to the 4km paid to contractor.

Payment certified by Engineer (EDP # 21787) on 26/11/15.
- Refer to appendix 18.4.2 for detail site visit.

-Only 2 km of road was constructed contrary to the 4km paid to contractor.

Payment certified by Engineer (EDP # 21787) on 01/10/15.

-- Refer to appendix 18.4.3 for detail site visit.


Failure to properly certify and approve the payments of non-cane access roads increases the risk of Section 18: Page 15 Ministry of Rural and Maritime Development and National Disaster Management REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ fraudulent payments and corrupt practices which may not be detected in a timely manner thus increases the loss of taxpayers’ funds.
As such, the risk of losses for Government increases as additional costs would be incurred for upgrading the roads to a useable condition if the contractor fails to successfully complete the works as per the required standard.

Recommendations    The Ministry should inquire on the deficiencies and negligence noted in the projects and take appropriate actions to correct and strengthen internal controls.
Appropriate action should be taken against the engineer for approving the payments for incomplete work.

The Ministry should recover the amount overpaid from the Contractor.

Ministry’s Comments CND These were the roads which were reprioritized for Rakenitai and Rabi farm Road project.

Due to time limitation the project paper was done without the scope of work from the RFMF Engineer.

All the work was completed and certified by the RFMF engineer as per completion certificate.
We accept that there were differences in the length of the road quoted in the project paper and the actual work that was done but the work was done as per expected.

We do agree with the points highlighted and we ensure that we will improve and strengthen our internal controls CWD NAMILAMILA FARM ROAD –NCAR Namilamila Farm Road is not a new Farm Access Road.

It is 3.6 km in length and this access road came under the Sigavou Farming Project under the Ministry of Agriculture.
This Farm Access Road is used by Farmers from Nasukamai, Nailuva, Nauria and Sovusovu Settlement.

The said 3.6 km road was constructed and completed in 2014.

Due to the frequent use of the road and to avoid overgrowth and ensuring that the road remain usable, it was requested in 2015 for Namilamila Farm Access Road to have road maintenance works and improvements be made where possible on the existing roads.
Road maintenance and improvements were carried out on different portions of the road and not the entire 3.6 km length road.

Yaqona, Dalo and other Agricultural produce farmers greatly depend on this Farm Access Road.

There are no funds for the Upkeep and Maintenance of Farm Access Roads such as the Namilamila Farm Road.

Maintenance works were done on portions where farmers were using for access and not the entire 3.6 km.
NADUADUA FARM ROAD –NCAR Contractors initial Plant and Equipment Mobilization cost stated in the Quote was quickly exceeded when mobilization work commenced.

The initial pilot cut plan for the road had to change in a few areas due weak soil structures.

Areas where initially thought to have pilot cuts on the side of the descending slopes had to be moved further inward, thus more earth moving works were necessary together with additional machinery thus additional costs were incurred.
The change in the original Farm Road plan is a major contributor to additional costs being gained thus gravelling works were not able to be carried out.
Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 16 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ TOKONI FARM ROAD –NCAR Similar to Naduadua Farm Road the contractors initial Plant and Equipment Mobilization cost was quickly exceeded when mobilization work commenced.

Tokoni Settlement consists of mainly farmers.


These farmers only mode of transport is on horseback and transportation of farm produce is mainly on horses.

The access road budget allocation of $25,000.00 could only accommodate a pilot cut and a number of culverts, drainage works and formation in a number of areas.

Gravelling works could not be accommodated.

Locality of Tokoni Farm Road and gravel sites is too far.
An additional allocation is needed to solely transport gravel from nearby gravel pits 18.13 Rural Housing Assistance – Delay in Construction The proper management of expenditure is fundamental to ensuring value for money in delivering services to the community.
As well, having cost effective internal controls within the purchasing and payments system plays an important part in ensuring that waste of funds, over-expenditure and corruption do not occur21 Rural housing assistance aims at eliminating homelessness in rural Fiji through the provision of affordable, durable and cyclone resistant structures.
The assistance is operated on a cost sharing ratio of one third by the potential homeowner and two thirds by Government.22 Upon completion of a project, Provincial Administrators and District Officers are to forward a physical acquittal report to the Divisional Commissioners in the form of Completion Certificate.23 The audit site visit inspection revealed that the following houses have not been completed even though all the materials have been fully delivered and are kept unused at the recipient’s compound for two to three months.
Refer to Table 18.11 for details.

Table 18.11: Incomplete Houses under the Rural Housing Assistance Scheme Recipient Western Division Location Comments S. K. Tonuve Village, Bemana, Navosa V. B. Vatiyaka, Sorokoba, Ba Eastern Division N. W. Qarani, Gau, Lomaiviti All the materials have been supplied on 03/09/15 and the house was expected to be completed on 31/10/2015 which is 6 to 7 weeks after the delivery of materials.
Audit site visit verification on 19/11/2015 reveal that the house is still yet to be completed.

Refer to appendix 18.2.2 for detail site visit.

All the materials were supplied on 09/06/15, and the house was expected to be completed on 08/08/2015 which is 6 to 8 weeks after the delivery of materials.

Audit site visit verification on 19/11/2015 revealed that construction is yet to commence.

Project was delayed as the expected completion date is 6 to 8 weeks.
Refer to appendix 18.2.1 for detail site visit.

Progress Report indicates the house is 100% complete.

Audit was unable to verify the completion certificate, as it was not maintained in the recipient’s Project File.
21Ministry of Rural and Maritime Development and Disaster Management, Finance Manual 2013 – Part 2 22Ministry of Rural and Maritime Development Standard Operating Procedure – Part VI, Section 7.1 23Ministry of Rural and Maritime Development Standard Operating Procedure – Part IV, Section 7.5 Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 17 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ W. P. K. V. Vagadaci, Levuka, Lomaiviti Mabula,Cicia ,Lau Progress Report indicates the house is 100% complete.
Audit was unable to verify the completion certificate, as it was not maintained in the recipient’s Project File.

Progress Report indicates the house is 100% complete.

Audit was unable to verify the completion certificate, as it was not maintained in the recipient’s Project File.

Delay in the use of materials for house repair increases the risk of theft, misuse and damage of housing materials thus wastage of government funds.
In the absence of completion certificate, there is a risk that the project was not surveyed, evaluated and certified by a technical engineer and officer to ensure that it is completed satisfactorily to the required standard.

Recommendations   The Commissioners, Provincial Administrators and District Officers should ensure that agreements are made with recipients of assistance to ensure that materials are used within a reasonable timeframe.
The Provincial Administrators and the District Officers should ensure that all constructions works and completed projects are certified technical officers after completion and the completion certificates to be maintained in their Project files.

Ministry’s Comments S. K. –PAP Mr S. K., 57 years old, is amputated on both limbs and in his initial request he requested a separate unit all to himself.
When the materials were delivered on site and upon the request the Turaga ni Koro, and Mr K’s children, it was requested that his disability to be taken into consideration.

The plan to have a totally separate unit was no longer accepted because of Mr K’s accessibility to the kitchen, bathroom and toilet.

A new plan was needed for an extension to his existing structure.

The new plan had to be conducive and to accommodate all of Mr S.K’s age, health, physical and mobility needs.
The standard RHU PAP Plan was not suitable for this project.

RHU Unit was approached to redraw a new plan without purchasing additional materials.

This plan had to be sought from our RHU Unit at Ministerial HQ, Suva.

And when it came to the time to commence construction work, the carpenter earmarked was engaged in another village in the same Tikina.

Carpenter to be engaged to carry out construction works is not required or enforced to work according to a timeline.
The Carpenter’s labor is solely borne by the Applicant.

Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 18 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Mr S.K usually crawls up and down the ramp like structure to access his kitchen, bathroom and toilet facilities all located separately from the structure (pictured above) V. B, Mr V B’s initial application was a 4 bedroom house totally more than $30,000.00.
Following the advice and consultation with DO Ba’s Office Mr B. agreed to be assisted with a 24 x 16 Structure.

Upon approval of RIE and issuance of LPO to Carpenters Hardware for material delivery, the office was again delivered with the plan for the 4 bedroom structure and request made that Mr B. will purchase additional materials from the RHA given in order for him to construct his 4 bedroom home.
Materials were delivered to Mr B’s residence in Vatiyaka, Ba from the allocated funding and Mr B was to purchase the additional materials for the completion of his 4 bedroom house.

CED The Divisional will ensure that completion certificate and project file have to be in order together with pictorial evidences and copy to be sent to Auditor General Office.

All projects have been 100% completed.


Further OAG’s Comments The Commissioner Eastern Division did not submit to audit the records such as completion certificate and pictorial evidence to substantiate the expenditure incurred by the Ministry.

18.14 Division Anomalies Noted for Public Sector Investment Program – Northern The Public Sector Investment Program (PSIP) consists of a three -year pipeline of capital projects for funding through Government and development partners.
The objectives of the PSIP are to produce a set of sound and viable projects that can be funded either domestically or by external sources; to enhance the efficiency and effectiveness of public sector investment; to raise the level of public sector investment relative to GDP and overall investment levels; to package and programme capital investment projects to an international standard in order to attract donor financing; and to effectively plan and manage external donor financing.24 Monitoring and Evaluation are to be conducted by respective project management teams at the following four levels: community; provincial and district level; divisional level (Planning and Coordination Cell); and HQ (Development Unit).25 A clerk of works is to be assigned to monitor and endorse the satisfactory completion construction stages prior to release of payments.26 The Ministry will conduct monthly site monitoring to provide and update on the construction to the parties and other stakeholders.27 Clause 2.3 of the contract agreement for the two projects states that the projects are to be completed on 18th December 2015.
The Manager Finance or Accounts Officer must not certify a payment as correct unless they are satisfied that there is documentation that the works have been carried out.28 Audit scrutiny of the Public Sector Investment Program Project (PSIP projects) revealed the following anomalies: 24Public Sector Investment Program Manual – September 2009 – Part 1 & 2 – Introduction and Objective 25Ministry of Rural, Maritime Development Standard Operating Procedure – Part V, Section 8.1 26Tender Board Approval letter dated 01/09/2015 – WSC 126/2015(Rabi Health Centre) & WSC 127/2015 (Kubulau) 27Clause 4.5 of the contract agreement between the Ministry and the Contractor for Rabi and Kubulau project 28Ministry of Rural, Maritime Development and National Disaster Management Finance Manual 2013 - section 2.8.4 (ii) Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 19 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________    There was no technical report or certification from the building engineer for completion of various stages of work; Incomplete project after the completion timeframe; Monthly project status and monitoring report were not filed and produced to audit to determine the status of the project.
Refer Table 18.12 and Appendix 18.7 of projects reviewed.

Table 18.12: Detail of PSIP Project Anomalies Date Chq No.

Northern Division 03/12/15 2122 03/12/15 2291 09/11/15 2114 03/12/15 2291 Total Name of Project Amount ($) Audit Remarks of Construction Kubulau Duplex quarters for stage 1 and 2. of Construction Kubulau Duplex quarters for stage 3.

Construction of Duplex Rabi quarters for stage one and two.

of Construction Rabi Duplex quarters for stage three.
 60,865 The invoice for stage 3 was not endorsed by the building engineer and there was no technical report from the building engineer to determine the completion for stage 3 to the required building plan.

 No monitoring report and progress reports submitted to 116,401  audit to determine status of these projects.

The date of practical completion is 18/12/2015.29 Site visit30 verification on 11/12/15 reveals that the Kubulau duplex quarters were still in progress.
Refer to appendix 18.7.1 for detail site visit verification.

 66,332 The invoice for stage 3 was not endorsed by the building engineer and there was no technical report from the building engineer to determine the completion for stage 3 to the required building plan.

 Delayed in completion as the contract agreement stated that project to be completed on 18/12/201531 as per date of practical completion.
 No monitoring report and progress reports submitted to audit to determine status of these projects 130,131 373,729 Failure to properly certify and approve the payments of PSIP Project increases the risk of fraudulent payments and corrupt practices which may not be detected in a timely manner thus increases the loss of taxpayers’ funds.

In the absence of proper certification from the building engineer, the quality of construction works to the required building standard may be compromised.
As such, the risk of losses for Government increases as additional cost would be incurred to complete the construction works if the contractor fails to successfully complete the works as per the required standard.

Failure to monitor the progress of projects may result in the delay in implementation and completion of the projects.
29Clause 2.3 of the contract agreement, Appendix A of the terms of Agreements for Works - The practical completion shall be 4.00pm on the last day of the 12 weeks which is 18/12/2015.

30 11th December 2015 - Date of site visit verification to Northern Division 31Clause 2.3 of the contract agreement, Appendix A of the terms of Agreements for Works - The practical completion shall be 4.00pm on the last day of the 12 weeks which is 18/12/2015.
Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 20 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Recommendations  The Divisional Officers, Provincial Administrator and Planning Officers should ensure that community projects are monitored on a monthly basis and reported to the Commissioner and the Permanent Secretary.

 Progress reports should be filed in the project files for records and status followed up.
All agreements should be competently vetted.

 The Ministry and the Division should investigate the anomalies highlighted above and take appropriate actions to correct and strengthen internal controls.

 The Ministry and the Division should ensure that due diligence checks are performed prior to releasing payments to the contractors.
Ministry’s Comments CND We do agree with the points highlighted by the Auditor General Office taking into consideration the Major Tender Board approval letter highlighting the need to engage a clerk of works to monitor and endorse the satisfactory completion of the construction stages.

However, we wish to also highlight the reasons of our action.

During the release of payment for stage 1 and 2 we did engage the clerk of works to monitor and endorse the satisfactory of completion stages.
However given that we were towards the end of the year and had also exhausted our operating expenditure, we therefore requested the Director Building if it was possible for them to appoint a clerk of works from the Office of the Divisional Engineer Northern.

However we were advised that there is no experience Officer in the North who can read the architectural drawings.

(Copy of email attached).


Based on this we again wrote to Fiji Procurement Office if it is possible for them to release part of both contingency cost to meet the travelling and other expenses for the clerk of Works.

(Copy of letter attached).

However we were verbally advised by FPO that this request cannot be tabled at a Major Tender Board Meeting as this was supposed to be accommodated by our Office.
Given that the contractor was very much ahead with its construction work and taking into consideration our financial situation and the timeframe for closing of accounts we therefore recommended the release of payment after receiving the work progress report from the contractor.

We hope that our situation will also be taken into consideration and be rest assured that we will improve from our mistakes.
18.15 Inadequate Management of Project Materials/Items at Top Yard Store Inventory purchasing, storage and recording should be efficiently managed to ensure that there is a sufficient level of inventories when needed, while minimizing the cost of holding inventory and the risk of stock becoming obsolete or damaged.32 Storage of Inventories shall be the responsibility of the store man.
The Store man must ensure that adequate storage space is available for incoming stock as and when required, stocks are handled with care and well stored so as to reduce the risk of damage and quantity of stock is closely monitored to avoid excess holdings or shortages.33 An audit inspection at the store house at Top Yard, Walu Bay on 04/12/15, revealed the following anomalies: 32Ministry of Rural and Maritime Development and National Disaster Management, Finance Manual 2013 – Part 7 33 Ministry of Rural and Maritime Development and National Disaster Management, Finance Manual 2013 – Section 7.2.1 Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 21 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ 1) Damaged and obsolete items were occupying space within the yard.
These included hardened/damaged bags of cement which were not delivered to the project sites.

Refer to Figure 18.10.1 of Appendix 18.10 for details; 2) Unaccounted building materials and other items were found to be lying outside the yard which was been there for some years.

Refer to Figure 18.10.2 of Appendix 18.10 for details; 4) 3) A motor vehicle and a brush cutter which did not belong to the Ministry were stored in the yard and have been occupying space within the yard.
Refer to Figure 18.10.3 of Appendix 18.10 for details; Some spare items (standard items) which were bought for projects in prior years are still kept at the Store, and are used on a needs basis by the Ministry for current projects.

Refer to Figure 18.10.4 of Appendix 18.10 for details; Since project files were not maintained, it was not possible to determine during audit that project materials were delivered to sites in the maritime islands and these were received by the correct recipients.
Refer to Table 18.13 for details.

5) Table 18.13: Project Material files not maintained at the Store Chq No.
Project Recipient Date 28/5/15 30/04/15 07/05/15 1049 981 993 21/10/15 1373 29/5/15 29/5/15 30/5/15 08/05/15 1049 1049 11037 1005 Koroi Vakanaivalu(Cicia, Lau) – RHA Neumi Waqa (Qarani/Navukailagi) – RHA William Pilate (Vagadaci/Levuka/Lomaiviti)- RHA Uprising Youth Project (Nawaikama, Gau, Lomaivit) – SHP Mualevu Footpath Project (Mualevu, Lauj) –SHP Natokalau Housing Scheme (Matuku, Lau) –SHP Natokalau Housing Scheme(Matuku, Lau) –SHP Natokalau Housing Scheme(Matuku, Lau) –SHP Remarks Project materials file not maintained by the Top Yard Store.
Hence, audit was not able to establish that the materials were delivered to correct recipients.

Amount ($) 14,241 14,241 14,241 19,800 1,400 6,583 1,142 10,706 Although a similar audit findings was reported in the 2014 Auditor General Report, no action has been taken to take corrective action and address the issue.
Stocking of project building materials and other items is a waste of taxpayer’s funds allocated to the Ministry, depriving the development and assistance of communities and individuals in need of government assistance.

Recommendations  The Officer in Charge of the Top Yard Store should ensure that files for projects for which materials are received are properly maintained at the Store.
Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 22 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________  The Officer in charge should also ensure that unserviceable items, damaged and obsolete stock are removed from the yard to allow proper storage space for the new project building materials and other items.
 Project Officers at the division should ensure that Project materials are delivered to the Project recipients on the next available vessel so that stockpiling of materials can be avoided or minimized.

Ministry’s Comments When receiving stores at the Yard, the storeman opens new file for individual projects and at the same time records all items received in the Tally Card.

All incoming stores are checked by the Gateman before they are handed over to the storeman.
Outgoing stores, however, are verified by the storeman and two (2) other officers at the Yard before the final check by the Gateman.

For the stores destined to the maritime islands, the storeman fills the bill of landing while delivery docket for materials delivered within the mainland.

Copies of bills of landing and delivery dockets are filed in the individual project files and Tally Card updated accordingly for information and reference.
The Ministry will ensure that project materials for the divisions, especially eastern and northern, are shipped at the next available boat while items such as cement are still useable.

The Ministry will ensure that all unserviceable items, damaged and obsolete stock are removed from the store to allow proper storage for new project materials and other items.
CED The Division will ensure to work with Rural Housing Unit for recording of all project materials in the Eastern Division and project materials to be delivered on time.

Further OAG’s Comments The Ministry did not submit to the bill of landing for those items delivered to the maritime Islands to substantiate the expenditure incurred by the Ministry.
Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 23 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ APPENDICES APPENDIX 18.1: Follow Up Prior Year Audit Issues GR No: Recommendation Management Comments Action Taken Vol.

2 Issue 19.8 The Manager Finance should ensure that revenue dues are collected on a timely basis to avoid further of accumulation arrears balance.
to The Ministry is working in with Tikina Councils our efforts identify which business are still in operation and those that are no longer operating to enable us to determine the fees that are due.

Issue Arrears of Revenue As at 31/12/15, the Ministry’s arrears of revenue amounted to $753,843 compared to $863,381 in 2014, an increase of $106,813.

Refer to table below for details of arrears of revenue for the past 6 years.
Year 2010 2011 2012 2013 2014 2015 Amount ($) Per cent Movement 507,898 499,358 495,059 656,688 756,568 753,843 (2) (1) 33 15 (0.3) Recommendation The Ministry should ensure that corrective actions are promptly taken to resolve recurring issues.

Ministry’s Comments The Ministry did not submit any comments.
Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 24 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ APPENDIX 18.2: Anomalies Western Divisions – Rural Housing Assistance Figure 18.2.1: V B, Vatiyaka, Sorokoba, Ba Insert: Foundation of old structure that the house will be rebuilt Insert: Materials delivered however construction is yet to commence Figure 18.2.2: S K ‘s, Tonuve Village, Bemana, Navosa Insert: Construction yet to be completed Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 25 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ APPENDIX 18.3: Western Division Non Cane Access Roads Anomalies Figure 18.3.1: Naduadua Farm Road Insert: No evidence of gravelling done on the road however completion certificate endorsed and payment for gravelling made for the road length of 3.0km Figure 18.3.2: Tokoni Farm Road Insert: Little evidence of gravelling found, however scope and estimates required a length of 2.9km to be gravelled Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 26 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Figure 18.3.3: Namilamila Road Insert: Only 0.9km of Road graveled as opposed to the 3.6km provided under the scope and estimate which was paid for by the Ministry.
Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 27 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ APPENDIX 18.4: Northern Division Non Cane Access Roads Anomalies Figure 18.4.1: Valetokoni Access Road Insert: Only 1.3km of road constructed as opposed to the 4km indicated in the project paper and paid for by the Ministry Figure 18.4.2: Naduru Access Road Insert: Only 3km of road constructed as opposed to the 4km indicated in the project paper and paid for by the Ministry Figure 18.4.3: Nabubu Access Road Insert: Only 2km of road constructed as opposed to the 4km indicated in the project paper and paid for by the Ministry Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 28 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ APPENDIX 18.5: Western Division Self Help Projects Figure 18.5.1:– Poultry Farming Project (Korolevu Village, Navosa).Materials has been lying idle as at the date of the audit site visit verification on 19/11/15.
Figure 18.5.2: Showing individuals for Koro 2 Settlement Water Project (Tavua) collecting water to take it to their homes since the water supply did not reach individual homes/settlement as in the project proposal.
Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 29 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ APPENDIX 18:6: Northern Division Self Help Projects Figure 18.6.1: The two fish ponds were still in dry condition as per audit site visit verification on 09/12/15.
APPENDIX 18:7: Northern Division PSIP – Kubulau Duplex Quarters Figure 18.7.1: The audit site visit verification on the completion date, 11th December 2015 reveal that the Kubulau Duplex quarters were still in progress.

Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 30 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ APPENDIX 18:8: Project Funds Received But Project Have Not Initiated Date Receipt No.
Details Amount ($) Division Rural Housing Assistance Scheme II Mr. U.N. Mr. R.N.

Mr. S.R.T.

Mr. W.B.

Mr. L.S.

– Lautoka Mr. L.R – CWD Mr. V.Q.

– CWD Mr. T.N.

– CWD Mr. S.S. – Nadroga Mr. B.M.N.– Rakiraki Mr. J.N.

– Rakiraki Mr. L.S.

Ms L.A. Mr. P.D.

- Rakiraki Mr. V.C.

- CWD Mr. J.T.- CWD Mr. E.R.

-Lautoka Mr. P.S.- Lautoka Mr.U.N.

Mr.M.R.

Cikobia Tikina Mr. M.T.

Cikobia Tikina Mr. M.S.

Mr.J.T.

Mr.P Mr. J.D.

– Tubou Mr.J.K.

Ms. V. Y. Mr.J.

F. Mr. J.S.

Mr. J.M.

Mr. E. M. Mr. M.Y.


Mr. J. V. Mr. T. S. Vanuaso Village Ms. L.L.

Mr. L.R.

Mr. F.T.

Mr. N. B. Mr. T.S.

Mr. M.W.

Mr. A.T. Mr. M.T.
Mr. E.M. 16/04/2012 04/10/2012 27/12/2012 04/12/2012 21/05/2012 08/06/2012 13/06/2012 08/06/2012 23/05/2012 25/05/2012 19/06/2012 13/12/2012 13/12/2012 24/12/2012 12/02/2013 23/01/2013 25/01/2013 13/02/2013 30/05/2013 23/05/2013 01/08/2006 08/08/2006 16/11/2012 14/12/2012 25/04/2012 22/08/2012 20/08/2012 14/08/2012 30/08/2012 31/08/2012 19/07/2012 12/09/2012 18/09/2012 05/11/2012 11/12/2012 10/24/2012 19/07/2012 16/01/2013 05/02/2013 26/03/2013 10/06/2013 06/03/2013 28/08/2013 05/02/ Unknown Western Western Western Western Western Western Western Western Western Western Western Western Western Western Western Western Northern Northern Northern Northern Eastern Eastern Eastern Eastern Eastern Eastern Eastern Eastern Eastern Eastern Eastern Eastern Eastern Eastern Eastern Eastern Eastern Eastern Eastern Eastern Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 31 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Date Receipt No.
Details PM's Relief & Rehab Lau Daliconi Village comm Kabara Tikina FDFB Namuka-I-lau Co-op Tulaki Farm Mecahnisation Muaninuku Village Sea-Wall Navakaraunintu Village Raviravi Village Committee, 27/03/2007 28/07/2005 18/08/2005 15/09/2003 18/05/2005 16/01/2007 12/06/2007 02/05/2007 729526 312178 312182 Waciwaci Project 620806 312155 457994 729534 129830 Self-Help: 1/3 Contribution 654801 654802 654083 654804 654805 30/07/2009 04/09/2009 21/09/2009 30/09/2009 09/10/2009 Mr. E.R.
Nakawa Village Brush Cutter Matadrawe Settlement Chainsaw Matadrawe Settlement Chainsaw Delaivunilagi Farm Project Chainsaw Total Ministry’s Comments Amount ($) Division 15,850 5,940 1,000 12,000 5,425 5,500 11,000 15,813 Eastern Eastern Eastern Eastern Eastern Eastern Eastern Eastern 600 600 180 100 200 244,437 Unknown Commissioner Eastern will ensure that all outstanding projects will be priorities in 2017 with new set of Budget.
APPENDIX 18:9: Yet Paid Details of Unclaimed Wages for Deceased Employee Not Date Receipt No.
Received From 11/07/2000 17/09/2001 27/12/2001 27/12/2001 28/01/2002 06/02/2002 20/11/2002 18/12/2002 03/04/2003 18/02/2004 26/07/2004 10/07/2014 Total 555672 555684 586827 586830 586919 842189 217807 217877 281825 690150 900520 670104 FSC – R.N FSC – K.D FSC – VARIOUS FSC – VARIOUS FSC – N.D J.B FSC – R.J FSC LTD FSC LTD EGM – A.K EGM - SNR Ministry of Health - Payments of wages Amount ($) 156 922 277 775 221 115 493 128 349 265 36 2,121 5,858 No.
of Years Funds with the Ministry 13 12 12 12 11 11 11 11 10 9 9 1 Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 32 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ APPENDIX 18:10: Walu Bay Top Yard Store Anomalies Figure 18.10.1: Damaged and Obsolete Materials in the Yard Old Machines (Yamaha Engines, a photocopy machine, and a water pump) An old car and worn out tyres Hardened and damaged cement Figure 18.10.2: Unaccounted Materials on the Yard Concrete Sinks Iron Rods Figure 18.10.3: Ministry of Rural and Maritime Development and National Disaster Management Items not owned by the Ministry and stored in the yard Section 18: Page 33 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Motor Vehicle Brush Cutter Figure 18.10.4: Extra Items (Standard Items) maintained in the Yard Old Chainsaws and other items Louvre blades and other items Other building materials stored as standard items other building materials stored as standard items Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 34 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Section 19 Fiji Military Forces Role and Responsibilities The Republic of Fiji Military Forces [RFMF] is responsible for upholding and defending the Fijian Constitution.
Its primary responsibility is to ensure peace and security within the country for the benefit of all Fijians.

It also makes a significant contribution to United Nations Peacekeeping operations in troubled areas around the world.

As part of its contribution to the wellbeing of the Fijian people, the RFMF’s Engineering Corps carries out an extensive range of development projects across the country that improve the living conditions of ordinary Fijians, particularly those in rural areas.
The RFMF’s naval division provides surveillance of Fiji’s maritime zone and operates a costal radio station for all vessels within Fijian waters as required by the International Law of the Sea.
Table of Contents PART A: FINANCIAL STATEMENTS ................................................................................................................................ 1 19.1 Audit Opinion ............................................................................................................................................................ 1 19.2 Statement of Receipts and Expenditure ................................................................................................................... 2 19.3 Appropriation Statement ........................................................................................................................................... 3 19.4 Consolidated Trading and Manufacturing Account................................................................................................... 3 PART B: AUDIT FINDINGS ............................................................................................................................................... 4 19.5 Anomalies in the Operation of Engineers Project Trust Fund Account .................................................................... 4 19.6 Anomalies Noted in the Trading and Manufacturing Account .................................................................................. 6 19.7 Operating Trust Fund Account ................................................................................................................................. 7 Items Not Taken on Charge ..................................................................................................................................... 7 19.8 19.9 Purchase Orders not Issued Prior to Service Delivery ............................................................................................. 8 19.10 Unauthorised Procurement of Uniform Accessories ................................................................................................. 9 19.11 Planned Capital Projects not
 Undertaken............................................................................................................... 10 19.12 Over Spending In Projects Undertaken by the Force Engineer.............................................................................. 12 19.13 Local Purchase Orders Raised Only to Regularize Payments ............................................................................... 13 APPENDIX 19.1: Example of Items Not Taken on Charge in the Tally Cards ................................................................. 14 APPENDIX 19.2: Payments Made in 2015 for 2013 and 2014 Outstanding Invoices ..................................................... 19 APPENDIX 19.3: Purchase Orders Issued After Procurement of Goods and Services ................................................. 20 APPENDIX 19.4: Services Delivered on or before Invoice and Purchase Orders .......................................................... 21 PART A: FINANCIAL STATEMENTS 19.1 Audit Opinion The audit of the 2015 accounts of the Fiji Military Forces resulted in the issue of a qualified audit report due to the Force not including the Trust Fund Account Statement of Receipts and Payments for Fiji Military Forces Section 19: Page 1 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ RFMF Engineers Project Fund Account with receipts totaling $1,985,410 and payments totaling $2,921,204 not recorded in the FMIS general ledger.
19.2 Statement of Receipts and Expenditure The Force collected revenue totaling $434,901 and incurred expenditure totaling $85,091,759 in 2015.

Refer Table 19.1 below for details.
Table 19.1: Statement of Receipts and Expenditure for 2015 Description RECEIPTS State Revenue Agency Revenue TOTAL RECEIPTS EXPENDITURE Operating Expenditure Established Staff Government Wage Earners Travel and Communications Maintenance and Operations Purchase of Goods and Services Special Expenditures Total Operating Expenditure Capital Expenditure Capital Construction Capital Purchase Total Capital Expenditure 2015 ($) 2014 ($) 224,420 210,481 434,901 202,700 234,060 436,760 66,433,336 358,572 1,632,985 2,744,631 4,932,234 1,729,613 77,831,371 63,633,628 364,136 1,739 ,705 3,603,990 4,813,457 4,397,545 78,552,461 2,902,607 2,046,969 4,949,576 771,786 --- 771,786 Value Added Tax 2,310,812 2,376,983 TOTAL EXPENDITURE 85,091,759 81,701,230 Total expenditure increased by $3,390,529 or 4% in 2015 compared to 2014 mainly due to:  Established Staff costs increased by $2,799,708 or 4% in 2015 compared to 2014 largely due to increase in employer’s contribution on FNPF from 8% to 10%.
 Capital Construction costs increased by $2,130,821 or 276% in 2015 compared to 2014 due to on- going capital projects and new projects undertaken for the year 2015, which included Black Rock Mess Hall Project, upgrading of Sukanaivalu Barracks, renovation/upgrade of infrastructure, upgrade of Logistic Support Unit Complex, upgrade of 3FIR and RFMF infrastructure and amenities.
 Capital Purchases increased by $2,046,969 or 100% in 2015 compared to 2014 due to purchase of communication equipment for the Naval Division and military training warlike stores for the Logistic Support Unit.
Fiji Military Forces Section 19: Page 2 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ 19.3 Appropriation Statement The Force incurred expenditure totaling $85,091,759 against a revised budget of $103,317,114 resulting in savings of $18,225,355 or 18%.

Details of expenditure against the budget estimates are provided in Table 19.2.
Table 19.2: Appropriation Statement for 2015 SEG Item Operating Expenditure Established Staff Government Wage Earners Travel & Communications Maintenance & Operations Purchase of Goods & Services Special Expenditures Total Operating Expenditure Capital Expenditure Capital Construction Capital Purchase Total Capital Expenditure Budget Estimate ($) Changes ($) Revised Estimate ($) (a) Actual Expenditure ($) (b) Lapsed Appropriation ($) (a-b) 74,550,391 256,531 1,006,890 4,096,710 5,249,711 1,143,000 86,303,233 (3,607,846) 102,041 730,000 (399,000) 575,536 773,227 (1,826,042) 70,942,545 358,572 1,736,890 3,697,710 5,825,247 1,916,227 84,477,191 66,433,336 358,572 1,632,985 2,744,631 4,932,234 1,729,613 77,831,371 4,509,209 --- 103,905 953,079 893,013 186,614 6,645,820 12,995,281 300,000 13,295,281 --- 1,772,000 1,772,000 12,995,281 2,072,000 15,067,281 2,902,607 2,046,969 4,949,576 10,092,674 25,031 10,117,705 13 Value Added Tax 3,718,600 54,042 3,772,642 2,310,812 1,461,830 TOTAL EXPENDITURE 103,317,114 --- 103,317,114 85,091,759 18,225,355 19.4 Consolidated Trading and Manufacturing Account The Plant Pool TMA was formed in 1978 to construct and develop roads to the inaccessible parts of rural areas in Fiji.
Initial machinery and support vehicles were provided through donations of the Australian Government.

The Plant Pool TMA is operated on semi-commercial basis focusing on social and development obligations of the country.

It operates from the Queen Elizabeth Barracks in Nabua.

Hydrographic TMA operates under the Fiji Naval based at Togalevu to provide accurate oceanographic information efficiently in order to meet national defense and civil requirements.
Table 19.3: Manufacturing Account Manufacturing Account Opening Raw Material Add: Purchases Less: Closing Raw Materials Raw Material Used Add: Direct Labour Cost of Goods Manufactured transferred to Trading Account 2015 ($) 5,387 --- --- 5,387 --- 5,387 2014 ($) 5,387 --- 5,387 --- --- --- Fiji Military Forces Section 19: Page 3 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Table 19.4: Trading Account Trading Account Sales Plant Pool Hydro-graphic Opening Finished Goods Hydro-graphic Add: Cost of Manufactured Goods Hydro-graphic Less: Closing Finished Goods Hydro-graphic Cost of Goods Sold Hydro-graphic Gross Profit transferred to Profit & Loss Statement Table 19.5: Profit & Loss Statement 2015 ($) 2014 ($) 929,791 31,031 960,822 13,016 5,387 18,403 23,342 (4,939) 965,761 2,172,882 27,197 2,200,079 8,062 --- 8,062 13,016 (4,954) 2,205,033 Profit and Loss Statement 2015 ($) 2014 ($) Income Gross Profit transferred from Trading A/C Total Income Expenditure Maintenance & Operation Other Expenses Special Expenses Total Expenditure Net (Loss)/ Profit Table 19.6: Balance Sheet 965,761 965,761 506,385 473,770 53 980,208 (14,447) 2,205,033 2,205,033 659,511 816,999 164 1,476,674 728,359 Balance Sheet 2015 ($) 2014 ($) Assets Cash at Bank Accounts Receivable Inventory VAT Receivable Total Assets Equity TMA Accumulated Surplus TMA Deficit Total Equity 928,691 290 23,342 124,872 1,077,195 1,396,910 (319,715) 1,077,195 1,019,495 289 18,403 116,087 1,154,274 1,473,989 (319,715) 1,154,274 PART B: AUDIT FINDINGS 19.5 Anomalies in the Operation of Engineers Project Trust Fund Account All payments, including VAT, shall be immediately recorded in the financial management information system and an expenditure ledger.1 Each agency must include a statement of receipts and expenditure in its annual financial statements.2 1 Finance Instructions 2010, Part 3, Section 15 2 Finance Instructions 2010, Part 12, Section 71 Fiji Military Forces Section 19: Page 4 REPORT OF THE AUDITOR GENERAL
 OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ A bank account for public money, other money or trust money must only be established with the approval of the Chief Accountant, who must inform the bank of the agency officers authorised to operate on it.3All bank accounts must be reconciled monthly.
The bank reconciliation shall list the outstanding cheques and other reconciling items and be signed and dated by the responsible officer4 The Force Engineers Project Trust Fund balance comprised of the funds received from various Ministries / Departments for the capital works to be undertaken by the Force Engineer.

This account has been in operation since 2011.


Audit review of the Force Engineers Project Trust Fund account revealed the following anomalies:  The project fund account which included total receipts of $1,985,410 and total payments of $2,921,204 for the year 2015 were not recorded in the FMIS general ledger.

 The Trust Fund Statement of Receipts and Payments for the Force Engineers Project Trust Fund account for the year ended 31/12/15 were not submitted for audit.
 The Force opened an Engineers Project Trust Fund account with Bank of South Pacific (BSP).5 The Force Engineer Project Trust Fund account had a balance of $568,666 as at 31/12/15.

However, the account is operating without an approval from the Ministry of Finance.

 The bank reconciliations for January to December 2015 for Force Engineers Project Trust Fund account was not signed by the Staff Officer – TMA Project and checked and approved by the Chief Staff Officer Finance.
The above findings indicate disregard of the financial regulations that are in place to ensure that trust fund accounts are operated in an open and transparent manner and proper accountability is maintained.
Recommendations The Force should ensure that:     all transactions are recorded in the FMIS general ledger as and when incurred; the annual financial statements include the Trust Fund Statement of Receipts and Payments for the Project Trust Fund account; proper approval is obtained from Ministry of Economy for the operation of the Force Engineers Project Trust Fund account and also liaise with Ministry of Economy to open the FMIS general ledger account; and bank reconciliations are checked and approved on a monthly basis.
Force’s Comments OAG findings and recommendations are acknowledged.

RFMF has met with officials from the Ministry of Economy regarding the operation for the Force Engineers Project Trust Fund Account and have agreed on the following: - I. II.

RFMF is to reconcile the bank balance to projects currently on-going.
Once completed, funds to be transferred to CFA with the project listing and balances; All new projects funds to be receipted and operated under SLG84; 3 Finance Instructions 2010, Section 32.1 4 Finance Instructions 2010, Section 32.6 5 BSP Bank Account Number 6652519 Fiji Military Forces Section 19: Page 5 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ III.

IV.
IV.

Acquittals are to be submitted to the client and MoF progressively and when projects are completed; and Timeline to complete the transfer as at (i) above is 31st July 2016.

19.6 Anomalies Noted in the Trading and Manufacturing Account Annual board of survey must be conducted by 3 officers who are independent of the officer responsible for the custody of the assets.
All assets which are not accounted for in the board of survey must be investigated to determine the appropriate recovery or write off action6 Audit noted that the stock take was carried out by the officers directly involved in maintaining and accounting for the stock without consultation for the involvement of external auditor, Auditor General’s Office as observers.

Therefore the stock take was not carried out independently.

Refer to Table 19.7 for closing stock take details.
Table 19.7: TMA Hydrographic Inventory Stock Take Balance As At 31 December 2015 Items Stock Certificate balance ($) Lautoka to Yasawa Kadavu-Western portion Kadavu-Northern portion Plans in Kadavu Vanua Levu-Natewa Bay Southern portion Vanua Levu-Somosomo to Rabi Natewa Bay to Nanuku passage Lakeba passage to Kabara Fiji Nautical Almanac 2015 edition Total 594 2,916 1,404 1,080 1,458 4,590 1,836 8,316 1,512 23,706 As a result, audit was not able to determine the accuracy of closing stock balance of $23,342 reflected in the Consolidated TMA – Trading Account at year end.
Recommendations The Force should:  ensure that annual boards of survey are conducted by Officers who are independent from the custody of the TMA stock; and  consult external auditors to observe annual stock take as part of stock take process.

Force’s Comment OAG findings and recommendations are noted.
6 Finance Instructions 2010, Section 49 – 2,3 Fiji Military Forces Section 19: Page 6 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ 19.7 Operating Trust Fund Account Any errors or misallocations must be immediately adjusted by way of journal vouchers.

The ledger reconciliation statement shall be forwarded to the Chief Staff Officer Finance.

The Chief Staff Officer Finance must ensure that: I.

All balances are accurate and adequately supported; II.
Any misallocations or outstanding balances from the previous month have been journalized to the correct allocation code.7 Operating trust fund comprise of superannuation contributions (FNPF), Tax Arrears/PAYE, Fines, Government Water Rates Charges and other credit union savings.

Audit review of the operating trust fund account records revealed a variance of $2,194,631.32 between the Force’s reconciliation statement and the FMIS general ledger balance as at 31 December 2015.
Refer to Table 19.8 for details.

Table 19.8: Variance in Force’s Reconciliation and FMIS Balance Particulars FMIS Operating Trust Fund balance Force Operating Trust Fund reconciliation Variance Amount ($) (3,529,939.23) (5,724,570.55) 2,194,631.32 At the time of audit on 29/8/16, the Force was still liaising with the Ministry of Economy to rectify the anomaly.

As a result, the correctness of the Operating Trust Fund Account balance as at 31 December 2015 could not be established.
Recommendation The Force should liaise with the Ministry of Economy to rectify the variances noted between its reconciliation and the FMIS general ledger.

Force’s Comments OAG findings and recommendation is noted.

The initial reconciliation statement for December was compiled from the first General Ledger reports.

As at current date the final report is yet to be provided by MoE.

Once this is generated a final reconciliation statement will be submitted.
19.8 Items Not Taken on Charge Store ledger cards are to be used by all accounting units using Class A stores and all other accountable stores.8 7 Force Finance Manual 2014, Section 16.3.4,16.3.6 8 Force Standing Order 1973, Volume 2, Section 2.2.14 Fiji Military Forces Section 19: Page 7 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Audit noted that the items worth $854,241 procured in 2015 by the respective stores such as Supplies, Logistic Support Unit (LSU), Engineers, Medical and Plant Pool stores were not taken on charge in the tally card by the respective quarter masters.
Refer to Table 19.9 and Appendix 19.1 for further details.

Table 19.9: Items Not Recorded in the Tally Card Sections Value of Stores Not Recorded ($) Supplies Logistic Support Unit Medical Engineer Unit Plant Pool Total 87,595 649,309 14,123 18,391 84,823 854,241 The poor record keeping of stores was due to general lack of supervisory checks to ensure items procured during the year are taken on charge when received and the tally cards are properly maintained.
Poor record of stores will deprive the Force of information pertaining to levels of stores held, procurement made during the year, the movement of stores.

This could also lead to short delivery and missing stores due to theft or pilferage.
Recommendations The Force must ensure that:    adequate supervisory checks are in place to ensure stocks are promptly taken on charge when received; and stock card contains basic information such as date of acquisition, quantity received, quantity issued and date of issue etc.

consideration is given to an automated stock management system.

Force’s Comments OAG finding and recommendation is noted.
The Force will ensure that all procurements of Class A stores are taken on charge with all necessary information to be entered on the tally cards.

19.9 Purchase Orders not Issued Prior to Service Delivery Each year the appropriation act and the budget estimates set out details of the appropriations that Cabinet approved for spending by each agency.9 All invoices received in an accounting period should be paid in that accounting period.
This will ensure that funds budgeted for the next accounting period would be utilized for that accounting period.

9 Finance Instructions 2010, Section 7 Fiji Military Forces Section 19: Page 8 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ It was noted that the Force paid expenses totaling $43,586.71 in 2015 for procurements made in 2013 and 2014.

Refer to Appendix 19.2 for details.


In addition the Force did not issue purchase orders for the procurements made totaling $43,586.71 in 2014 and 2013.

The purchase orders were raised in 2015 to facilitate the payments.

The finding indicates disregard to controls for procurement of the goods and services.

In addition the Force may also face difficulties in terms of cash flow for meeting past years’ commitments from the current year’s budget.
Recommendations The Force must ensure that:   expenditures pertaining to current period are met from the current period’s budgetary provisions; and local purchase orders are raised for all procurements made.

Force’s Comments OAG findings and recommendations are noted.

The Force makes every effort to clear invoices in the accounting period that the liability occurred.

As part of the financial year end exercise all open purchase orders in the FMIS system are cancelled.
Though the Purchase Order is cancelled, if the item has been received, RFMF is obligated to pay the company.

Therefore when statements received from companies show outstanding invoices from previous years it is reconciled and verified by the Units.

Once claims are substantiated, payment is done subject to the availability of funds.

Furthermore to address this issue the RFMF Finance Logistics and Acquisition Directorate has formed a Finance Monitoring Team (FMT).
This team is responsible for monitoring the clearance of purchase orders in the current accounting period and advising managements on progress.

It should also to be noted that a copy of cancelled PO is attached to all paid vouchers.
19.10 Unauthorised Procurement of Uniform Accessories Having the cost effect internal controls within the purchasing and payments system plays an important part in ensuring that waste of funds, over-expenditures and corruption do not occur.10 The Force purchased uniform accessories worth $139,182 from a supplier in 2014.

Audit noted that the Force did not obtain competitive quotes for uniform accessories purchased amounting to $87,182.50.
In addition, purchase of uniform accessories worth $51,778 was made without purchase orders during 2014 for which payments were made in year 2015.

Refer to Table 19.10 for details.

Table 19.10: Details of Procurements Made from Supplier without Competitive Quote & Local Purchase Order (LPO) Invoice Date Invoice No.
27/05/14 436 Items Supplied Amount ($) Officers Responsible Remarks Sash Crimson Officers 11,654.50 Requesting Officer Regimental Number: 23637 Rank: Staff Sergeant 3 competitive quotations not obtained – LPO regimental number 26808 approved by 10 Force Finance Manual 2014, Introductory Statement Part 2, Expenditure page.2 Fiji Military Forces Section 19: Page 9 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Invoice Date Invoice No.
Items Supplied Amount ($) Officers Responsible Remarks 27/05/14 437 Thermo Mat 23,750.00 Recommending Officer Regimental Number: 27913 Rank: Major Approving Officer Regimental Number: 25424 Rank: Lt.
Colonel 23/07/14 448 Waist sash crimson (red) 4,238.00 03/07/14 443 Stable Belts 30,000.00 08/07/14 444 White gloves 3,190.00 18/07/14 447 Cotton flannel 1,100.00 15/07/14 446 11/07/14 445 Total Shoulder sash (red) Infantry lanyards (red) 3,250.00 10,000.00 87,182.50 3 competitive quotations not obtained – LPO regimental number 26808 approved by 3 3 3 No LPO and LPR raised competitive and quotations not obtained No LPO and LPR raised and competitive quotations not obtained No LPO and LPR raised and competitive quotations not obtained No LPO and LPR raised and competitive quotations not obtained No LPO and LPR raised and competitive quotations not obtained No LPO and LPR raised and competitive quotations not obtained 3 3 3 The audit finding shows disregard to proper procurement process by the officers involved in purchase of uniforms and those facilitating payment despite non-compliance with the procurement regulations.
Recommendation The Force should ensure that procurement procedures are followed whereby competitive quotations are obtained, local purchase orders are raised and all current year payment commitments are settled during the year.

Force’s Comments OAG findings and recommendations are acknowledged.

It should be noted that payments made to the company were based on the fact that the RFMF had ordered, received and distributed the military accessories procured from the Company.
However in accordance with directives the RFMF will convene a Board of Inquiry (BOI) into the non-adherence to Procurement Regulations and take necessary actions on findings and recommendations of the Board.

19.11 Planned Capital Projects not Undertaken The annual Budget Estimate for 2015 outlines capital projects that are to be carried out by the Fiji Military Force.
An audit review of the capital projects revealed the following anomalies:  The Force was allocated $2.3m during 2015 to conduct extensive repair on the Kiro Patrol Boat to increase its life expectancy and sea worthiness for another 25 years.
Fiji Military Forces Section 19: Page 10 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ The Force has been requesting for funds to carry out the repair works since 2013 for which $2.3m was provided in 2013, 2014 and 2015 budgets.

However, the Force only used $1.8 m in 2013.

The funds provided in 2014 and 2015 budget were not used at all for repair works on the Kiro Patrol Boat and were returned to Ministry of Economy.
According to the Force there was no expertise available locally to undertake the maintenance work.

However, there was no evidence to indicate that expertise from overseas was considered.

 In 2015 Budget Estimate, the Force was allocated $287,500 for Phase 1 - Construction of a seawall and river wall at the Naval Training Base.

In 2014, the Force was also allocated $115,000 for the project.

Audit noted that no capital works have been carried out as at 31/12/15.
 A sum of $7.5m was allocated in 2015 for the Black Rock Integrated Peacekeeping Centre (BRIPC) project to create a military training camp for peacekeeping operations training and relocate 4FIR in order to provide a military capability near Nadi International Airport.

As at 31/12/15 only $7,538 was utilized for the BRIPC project.

According to the Force, the planned work for 2015 was not carried out because of the delay in finalising the award of tender.
The findings indicate the Force poor project planning and coordination.

As a result, funds provided in the budget were not utilised and the projects were not implemented.

Therefore no economical benefit was realised from funds provided in the Budget Estimates.
Recommendations The Force should:   ensure that all capital projects are properly planned, scheduled and implemented following approval of Budget Estimates; and investigate and take appropriate action against officers responsible for delaying the implementation of these projects.

Force’s Comments OAG finding and recommendations are acknowledged.
The RFMF had commenced on processing the invitation for Tender for the Black Rock Integrated Peacekeeping Center (BRIPC) in early 2015 and there are other obstacles which hinder the processes such as: i. ii.

iii.

In late February 2015, Government policy changed by separating the Tender processes for the Design of the project and the actual construction or building phase.
This would mean an average of 3 months duration for processing bids to design before a successful bidder is selected; Upon awarding the contract, the successful bidder would need an additional 45 weeks before the final design is ready for submission.

From time when the tender was advertised till the final design product is made available, it would take a total of 13 months to complete so therefore the final design would be available by the end of June 2016.
It is totally impossible for the RFMF to utilise the $7.4m within that duration; and Once the final design is available, only then the Force can commence on the tender process which is from July to December 2016 for the construction or implementation phase of the projects.

Only then can the Force utilise the $7.4m which was allocated for the project.
Fiji Military Forces Section 19: Page 11 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ 19.12 Over Spending In Projects Undertaken by the Force Engineer The proper management of expenditure is fundamental to ensuring value-for-money in delivering services to the community.
As well, having cost-effective internal controls within the purchasing and payments system plays an important part in ensuring that waste of funds, over-expenditures and corruption do not occur.11 Audit review of capital construction projects undertaken by the Force for other ministries and departments revealed cost overrun on a number of projects.
For instance, although budget of $965,077 allocated for Rotuma Hospital Phase 1 Project, the actual expenditure incurred by the Force was $1,103,367 resulting in cost overrun by $138,289 or 14%.

Refer to Table 19.11 for details.
Table 19.11: Details of Over Spending in the Rotuma Hospital Construction Item Administration Cost Ration Contingency Material Hire of Equipment Shipping Cost Air Travel OHS Camp-Setup Standby Generator Tools Consultation Fees Subcontracts Fees Demolition Fuel Stationery Total Budgeted Amount ($) 17,280.14 144,000.00 17,280.14 172,801.20 130,000.00 225,000.00 31,395.00 10,000.00 18,388.00 28,090.00 40,848.29 15,000.00 90,000.00 20,000.00 1,994.56 3,000.00 965,077.33 Committed Amount ($) 51,626.63 171,053.96 --- 351,814.09 31,000.00 137,871.48 22,930.40 34,540.00 --- 4,990.00 86,402.23 15,000.00 175,907.65 227.77 15,899.70 4,102.70 1,103,366.61 Balance ($) (34,346.49) (27,053.96) 17,280.14 (179,012.89) 99,000.00 87,128.52 8,464.60 (24,540.00) 18,388.00 23,100.00 (45,553.94) --- (85,907.65) 19,772.23 (13,905.14) (1,102.70) (138,289.28) The audit finding indicates costing of project works was not realistically carried out.
Recommendations The Force should ensure that:    proper planning and realistic costing of project is done.

Any variation in the cost must be justified and consulted with the respective ministries/department in a timely manner before expenses are incurred; all agreed cost variations are recovered from the respective ministries and departments so it does not affect the other capital projects with the Force; and projects are managed and completed within the budgeted cost and timeframe.
11 Force Finance Manual 2014, Introductory Statement Part 2, Expenditure, page 2 Fiji Military Forces Section 19: Page 12 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Force’s Comments OAG findings and recommendations are noted.

The Rotuma Hospital upgrade and extension is a $2m project funded by the Ministry of Health.
The Ministry of Health had been advised of the overspending and the Ministry is in the process of acquiring the remaining funds to complete the project.

The over expenditure will be regularized once the Force receives the fund from the Ministry of Health.
19.13 Local Purchase Orders Raised Only to Regularize Payments The procurement of any goods, services or works required by Ministries or Departments must be initiated either by the issue of a purchase order for any purchases of goods, services or works made locally.12 The audit noted several instances of purchase orders issued after invoice date or after goods and services were acquired from various vendors.

These purchase orders were raised by the Senior Accounts Officer - EDP No.

47648.
47648.

Refer to Appendix 19.3 and Appendix 19.4 for examples of purchase orders issued after invoice and delivery date.

The purchase orders were issued only to regularize the procurement process and facilitate payments to the vendors.

The findings indicate disregard of the rules and regulations governing procurements and poor supervisory checks in place in the Accounts Section.

There is a high risk of the existence of corrupt practices as a result of collusion with vendors.
Recommendation The Force should ensure that no procurement is made without issuing the Local Purchase Order.

Force’s Comments OAG findings and recommendations are acknowledged.

The Force will ensure that proper procurement procedures will be adhered to at all times and the respective purchasing clerks have been informed accordingly.
12 Procurement Regulations 2010, Section 21 - 3 Fiji Military Forces Section 19: Page 13 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ APPENDIX 19.1: Example of Items Not Taken on Charge in the Tally Cards Date Cheque Number Items Not Taken on Charge Quantity Unit Price ($) Total ($) Supplies (Ration) 18/3/15 27/5/15 17/6/15 15/7/15 7220 Capsicum Tomatoes Lettuce 8385 Rourou Pumpkin Carrot Baigan Chinese Cabbage Potatoes Cassava Ginger Celery Garlic English Cabbage Onions 8289 Moca/Tubua 9289 Peeled Cassava Potatoes Chinese Cabbage English Cabbage Imp Carrot Lemon Garlic Ginger Onion Celery Cucumber Rourou Tomatoes Import Pumpkin Capsicum Lettuce Long Bean Apple Oranges Chillies Eggs 23/7/15 9424 Potato Chinese Cabbage English Cabbage Carrots Lemon Garlic Ginger Onions Celery Cucumber Rourou Tomatoes Import Pumpkin Lettuce Fiji Military Forces Section 19: Page 14 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Date Cheque Number Items Not Taken on Charge Quantity Unit Price ($) Capsicum Apple Orange Chillies Eggs 28/7/15 9470 Potatoes 4/8/15 Chinese Cabbage English Cabbage Pumpkin Carrot Apples Celery Garlic Rourou 9571 Rourou Chinese Cabbage English
 Cabbage Carrot Pumpkin Onion Garlic Ginger Celery 10/8/15 9929 Potatoes Chinese Cabbage English Cabbage Imp Carrot Lemon Garlic Ginger Onion Celery Cucumber Rourou Tomatoes Import Pumpkin Lettuce Capsicum Apples Oranges Chillies Eggs Banana 10183 Ginger Potatoes Long Bean Chinese Cabbage English Cabbage Carrot Cucumber Egg Plant Lettuce Tomatoes Pumpkin 25/8/ Total ($) Fiji Military Forces Section 19: Page 15 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Date Cheque Number Items Not Taken on Charge Quantity Unit Price ($) 29/9/15 Celery 10752 Peeled Cassava Carrot Chinese Cabbage Ginger Potatoes English Cabbage Pumpkin Celery Rourou Chillies Cucumber Onion 8/10/15 21/10/15 10997 Potatoes 11120 Potatoes 28/10/15 Long Bean Chinese Cabbage Peeled Cassava English Cabbage Potatoes 11287 Peeled Cassava Chinese Cabbage English Cabbage Tubua Potatoes Carrots Onions Celery Garlic Ginger 2/10/15 26/3/15 4/9/15 20/5/15 21/8/15 6707 Lamb Curry Piece Lamb Neck BBQ chops 7339 Corned Beef 7538 Whole Chicken 8204 Eggs 10122 Beef Stew Whole Chicken Lamb Chops Fresh Fish Steak Mince Lamb Neck Pre-cooked Sausage 2
 KG Mixed Veg Ice Cream 2 litres 14/9/15 10560 Corned Beef Nescafe Sugar Salt Matches 11006 Peaches (ctn) 10/9/15 Total Logistic Support Unit (LSU) 2/7/15 9025 Chevron 1 Bar for BOD Stock Fiji Military Forces Total ($) Section 19: Page 16 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Date Cheque Number Items Not Taken on Charge Quantity Unit Price ($) Chevron 2 Bar White/Black Chevron 3 Bar White/Black Badge WO2 Black/White Badge WO1 Black/White 9266 Mozzie Net for BRC 01/15 11118 Badge Cap Fiji 'AA' for Fiji Day Parade 11118 Stable Belt 10854 Gloves Ceremonial White 10891 Button Fiji Small 'AA' for Fiji Day Parade 11262 Sword Infantry Steel for Fiji Day Parade 11487 Material White Minimothe for Female BRC 1/15 11887 Button Fiji Large 'AA' for LSU Stock 10384 Overall HD Navy Blue for Armoury Section Overall HD Khaki Safety Helmet Tinted Shade Glasses Gum Boots Mess Visor Helmet Safety Shoes High Cut Reflector Back strap Ear Muff Gloves HD PVC 11612 Bath Towel Green for M/East Issue 11740 Bath Towel Green for M/East Issue 10620 Sandal Black 10132 Florence Female Shoes for Pass out BRC 1/15
 9205 Black Boots for BOD Store 10621 Button Fiji large for Fiji Day Parade Badge Cap Fiji 'AA' 10783 Sword Infantry Steel for Fiji Day parade 11007 Belt Sword Blue for BOD stock (LSU) 10089 Tent 1 Men for 1/15 BRC 12079 Boot Calf Black For ME issue & local 11005 Boot Calf for ME issue 11511 Boot Calf Black for BOD stock (LSU) 11080 Sandal Brown for BPD stock (LSU) 7512 Fogging Machine 7916 Military Green Back Pack for BOD Stores 8535 40 Men Tent for BOD Stores 7281 Summer Socks LSU Stock 7328 Badge Cap 'AA' LSU Store Button Small 'AA' 10763 PSD Uniforms for Official Duty 10783 M16 Ceremonial Sling White for LSU Armoury 14/7/15 21/10/15 21/10/15 6/10/15 7/10/15 27/10/15 10/11/15 1/12/15 3/9/15 17/11/15 19/11/15 22/9/15 24/8/15 9/7/15 22/9/15 1/10/15 9/10/15 19/8/15 10/12/15 9/10/15 12/11/15 16/10/15 8/4/15 29/4/15 4/6/15 23/3/15 25/3/15 30/9/15 1/10/15 Total ($) 5/10/15 10819 M16 Knife Scabbard Ceremonial White For 200 49.95 9,989.98 9/10/15 LS 11005 Platoon Black Boots Size 7 Platoon Black Boots size 8 Platoon Black Boots size 9 Platoon Black Boots size 10 Platoon Black Boots Size 11 Platoon Black Boots Size 12 Fiji Military Forces 12 40 71 77 57 22
 159.00 159.00 159.00 159.00 159.00 159.00 1,908.00 6,360.00 11,289.00 12,243.00 9,063.00 3,498.00 Section 19: Page 17 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Date Cheque Number Total Medical 12/3/15 7109 20/3/15 7243 Total Engineer 23/2/15 26/5/15 6879B 8357 8/6/15 19/8/15 8676B 10091F Total Plant Pool 10/11/15 3/2/15 30/3/15 29/4/15 19/3/15 5/3/15 10/3/15 10/12/15 16/2/15 4/5/15 9/3/15 759 579 646 683 640 611 622 777 588 690 624A 9/3/15 624B 1/4/15 659 22/5/15 711 4/6/15 718 Items Not Taken on Charge Quantity Platoon Black Boots Size 13 Steel Trolley 300kg Capacity-Commercial Use Soap Dispenser With Installations Stainless Steel Pot Arm Band With Embroidery Electronic Mosquito Trap Trolley Oxygen Cylinder (GMMC COY) Wheelbarrow Heavy Duty Sanding Machine Husquarvana Chainsaw 28 Chain Adjuster Olive Green Urn APCO No Frill High Gloss Enamel Tinted Shade Hydraulic Drag Link PTO Pump Starter Assly Sleeve Unloaded Valve Rear Wheel Kit Clutch Booster Assly Steering Box Starter Motor Assly Complete Set Fender Flair King Pin Kit Clutch Kit Switch PTO Shock Absorber FRT (2) Bolt R/Cover Gasket R/Cover Leak Spring Shock Absorber Kit PTO Piston Piston Ring O ring sleeve Gasket set Lamp Head Reinforcement Head Lamp Cab Lamp Inspection Alarm Rev Blade Wiper Boom Lamp Switch Combination Comp Set Mirror Unit Price ($) 159.00 Total ($) 18,390.87
Fiji Military Forces Section 19: Page 18 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Date Cheque Number Items Not Taken on Charge Quantity Radiator Cap Oil Filter Air Sub Mirror Air Sub Secondary Pump and Seal PTO 1 2 1 1 1 5747 29/4/15 Total Grand Total Unit Price ($) Total ($) 90.00 130.00 180.00 480.00 8,000.00 90.00 260.00 180.00 480.00 8,000.00 84,822.96 854,240.24 APPENDIX 19.2: Payments Made in 2015 for 2013 and 2014 Outstanding Invoices Date EFT No.
11/6/15 8725 Invoice Date 22/11/13 22/11/13 11/11/13 Invoice No.
74667 74656 74343 CRV Date 5/15 5/15 5/15 1/12/13 5/12/13 5/12/13 3/10/13 1/10/13 18/12/13 18/12/13 21/12/13 27/11/13 27/11/13 02/11/13 16/2/15 589A 20/12/14 16/2/15 589B 7/12/14 16/2/15 589C 23/11/14 23/11/14 Total 75463 75054 75055 73218 74025 75375 75369 75477 74797 74796 74428 267 266 265 1397 1398 1399 1400 1394 1395 5/15 5/15 5/15 5/15 5/15 5/15 5/15 5/15 5/15 5/15 5/15 Date not stated Date not stated Date not stated 2015 LPO Date 2015 LPO No.
Description Amount ($) 6/5/15 6/5/15 6/5/15 6/5/15 6/5/15 16/1/15 16/1/15 19105- 011166 19105- 011167 19105- 011164 19105- 011168 19105- 011166 41915- 002877 41915- 002829 16/1/15 41915- 002826 of of of of for for for for Payment outstanding invoices goods Payment outstanding invoices goods Payment outstanding invoices goods Payment outstanding invoices goods Payment outstanding invoices goods Payment for hire of grader and bulldozer for Balaga project Hire of digger and bulldozer for making drain and formation of road-Balaga project Hire of digger for Balaga project.
for of 352.00 376.00 375.50 157.80 341.57 294.20 174.10 267.60 249.50 246.08 7,525.18 263.20 352.53 381.45 4,360.00 5,700.00 4,800.00 960.00 3,360.00 3,990.00 2,760.00 3,300.00 3,000.00 43,586.71 Fiji Military Forces Section 19: Page 19 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ APPENDIX 19.3: Purchase Orders Issued After Procurement of Goods and Services Cheque No.

Purchase Order Date Purchase Order No.


Purchase Order Raised By Engineer Project Fund Account 4662 2709 23/2/15 2709 6/2/15 4628 Senior Accounts Officer - EDP No.
47648 2709 6/2/15 4626 2749 2801 3009 3046 12/5/15 4823 16/6/15 4932 6/10/15 5323 6/11/15 5424 3051 6/11/15 5422 3069 23/11/15 5480 3070 27/11/15 5497 3081 17/11/15 5459 3081 24/11/15 5484 3081 9/11/15 5428 3089 10/12/15 5520 3096 24/11/15 5489 3098 24/11/15 5490 Description Invoice Date Delivery Date Amount ($) Purchase of food supplies for Nasivikoso Project Purchase of food supplies for Sawani Village School Project Purchase of food supplies for Naqalimave Kindergarten Project Payment for cartage of plant machinery Purchase of timber and building materials Purchase of new empty sacks Purchase of office software installation & data backup Purchase of radiator and engine short motor Purchase of building materials Final payment for Rotuma Hospital Project Purchase of food supplies for Naseva Teachers Quarters Project Purchase of food supplies for Rotuma Hospital Project Purchase of food supplies for Naloto Kindergarten project Purchase of building materials for Naleba Youth Project Purchase of food items for Ba Methodist Secondary School Project Purchase of food items for Ba Methodist Secondary 20/2/15 20/2/15 2,380.40 4/2/15 4/2/15 3,247.80 4/2/15 4/2/15 1,288.30 29/4/15 11/6/15 22/9/15 11/9/15 20/10/15 25/11/15 30/10/15 -- -- -- -- -- 09/11/15 – 12/11/15 -- 8,500.00 15,163.30 200.00 470.00 3,380.00 5,925.00 18,000.00 10/11/15 10/11/15 745.10 20/11/15 20/11/15 6,163.93 6/11/15 6/11/15 1,379.42 25/11/15 22/10/15 6,121.75 20/11/15 20/11/15 2,863.40 18/11/15 18/11/15 737.32 Fiji Military Forces Section 19: Page 20 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Cheque No.
Purchase Order Date Purchase Order No.

Purchase Order Raised By Description Invoice Date Delivery Date Amount ($) Total Plant Pool 575B 16/1/15 2828 582 29/1/15 2866 684A 31/3/15 2986 684D 17/4/15 3024 689C 17/4/15 3024 710B 17/4/15 3023 Total Grand Total Senior Accounts Officer - EDP No.

47648 Senior Accounts Officer - EDP No.

47648 Senior Accounts Officer - EDP No.

47648 Senior Accounts Officer - EDP No.

47648 Senior Accounts Officer - EDP No.
47648 School project Hire of trucks to offload soil at Mokani Landfill Project Hire of trucks to offload soil at Mokani Landfill Project Hire of digger for Balaga project Hire of digger for Balaga project 76,565.72 15/12/14 15/12/14 14,108.69 28/1/15 7/1/15 7,939.13 N/A N/A 15/3/15 15/3/15 8/3/15 26/2/15 8/2/15 29/3/15 29/3/15 29/3/15 29/3/15 29/3/15 15/3/15 5,760.00 3,850.00 6,080.00 880.00 3,070.00 3,480.00 2,120.00 3,710.00 3,660.00 2,800.00 1,440.00 6,048.00 3,840.00 4,260.00 3,850.00 5,760.00 82,655.82 159,221.54 Hire of digger for Balaga project 6/4/15 N/A Hire of digger for Balaga project 6/4/15 N/A APPENDIX 19.4: Services Delivered on or before Invoice and Purchase Orders Cheque No.
Purchase Order Date Purchase Order Raised By Description Invoice Date Delivery Date Amount ($) Supplier 4 575B 709E 697B 724D 772 656 B 636 596 16/1/15 Senior 23/2/15 17/3/15 3/6/15 20/11/15 13/3/15 10/2/15 10/2/215 Accounts Officer - EDP No.
47648 713 582 Total 14/4/15 29/1/15 Hire of truck at Mokani Landfill project for loading of soil Hire of digger at Mokani Landfill project for loading of soil Hire of truck at Mokani Landfill project for loading of soil 15/12/14 25/2/15 18/3/15 3/6/15 21/11/15 14/3/15 12/2/15 date not given 15/4/15 28/1/15 15/12/14 2/2/15 2/3/15 27/4/15 19/5/15 16/2/15 26/1/15 28/1/15 9/3/15 7/1/15 14,108.69 13,295.65 11,191.30 10,330.44 9,852.17 9,613.04 9,421.74 1,941.30 7,700.00 7,939.13 95,393.46 Fiji Military Forces Section 19: Page 21 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017 ____________________________ Cheque No.
Purchase Order Date Purchase Order Raised By Supplier 5 574 16/1/15 Senior Accounts Officer - EDP No.

47648 Description Invoice Date Delivery Date Amount ($) Hire of trucks and excavator for Daku Project.
date not given 9/12/14 7,982.61 Grand Total 103,376.07 Fiji Military Forces Section 19: Page 22 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017____________________________ Section 20 Fiji Police Force Role and Responsibilities The Fiji Police Force has the important responsibility to keep the people of Fiji safe by maintaining law and order, protecting property, and upholding the rule of law.
Every Fijian should feel secure in their homes and free to go about their daily business without any form of harassment or abuse.

Crimes need to be properly investigated, wrongdoers need to be quickly identified and cases need to be brought to trial with the necessary evidence.

To do this, Fiji needs a Police Force that is professional, well equipped and trained, adequately compensated, and supported by technology.
Table of Contents PART A: FINANCIAL STATEMENTS ....................................................................................................................................... 1 20.1 Audit Opinion ............................................................................................................................................................ 1 20.2 Statement of Receipts and Expenditure ................................................................................................................... 1 20.3 Appropriation Statement .......................................................................................................................................... 2 PART B: AUDIT FINDINGS ....................................................................................................................................................... 3 20.4 Anomalies in Underline Accounts ............................................................................................................................ 3 20.5 Raising of Journal Vouchers .................................................................................................................................... 5 20.6 Absence without Leave ............................................................................................................................................ 6 20.7 Delayed Capital Projects .......................................................................................................................................... 7 20.8 Payment of Retention ............................................................................................................................................... 9 20.9 Underline Accounts ................................................................................................................................................ 10 PART A: FINANCIAL STATEMENTS 20.1 Audit Opinion The audit of the 2015 accounts of the Fiji Police Force resulted in the issue of an unqualified audit report.
20.2 Statement of Receipts and Expenditure The Force collected revenue totalling $2,552,320 and incurred expenditure totalling $109,046,124 in 2015 as provided in the budget.

In addition, a sum of $25,466,191 was provided from Head 50 Miscellaneous Budget from the Ministry of Finance to pay the Job Evaluation Exercise arrears.

Refer to Table 20.1 below for detail of revenue collected and expenditure incurred during the year.
Fiji Police Force Section 20: Page 1 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017____________________________ Table 20.1: Statement of Receipts and Expenditure for 2015 Description 2015 ($) 2014 ($) 2,096,653 133,604 122,896 2,353,153 2,107,790 172,688 271,842 2,552,320 RECEIPTS Police Clearance Fees Licenses Fees Other Agency Revenue TOTAL RECEIPTS EXPENDITURE Operating Expenditure Established Staff Government Wage Earners Travel & Communications Maintenance & Operations Purchase of Goods & Services Operating Grants & Transfers Special Expenditures Total Operating Expenditure Capital Expenditure Construction Purchases Total Capital Expenditure Value Added Tax TOTAL EXPENDITURE * * (Funds provide from Head 50 Miscellaneous Expenditure Budget of $25,466,191 is not included in this total) 663,269 1,926,094 2,589,363 2,392,186 * 109,046,124 102,856,705 87,623,800 577,656 3,764,573 5,902,649 5,080,681 34,211 830,984 103,814,554 82,851,547 477,868 3,619,442 5,833,969 4,022,203 71,299 998,828 97,875,156 459,628 1,993,778 2,453,406 2,778,164 Total receipts increased by $199,167 or 8.5% due to increase in commission received for staff deductions and increase in the number of license and Police clearances issued.
Total expenditure increased by $6,189,419 or 5% in 2015 compared to 2014.

This was mainly due to payment of salary increments to civilian officers and lodging allowance to officers in the grade Pl 04– PL 01 vide Cabinet decision.

20.3 Appropriation Statement The Force incurred expenditure totalling $109,046,124 against the revised budget of $120,499,901 resulting in savings of $11,453,778 or 9.5%.

Details of actual expenditure against the budget estimates are provided in Table 20.2.
Table 20.2: Appropriation Statement for 2015 SEG Item Budget Estimate ($) Changes ($) Revised Estimate ($) Actual Expenditure ($) Lapsed Appropriation ($) Operating Expenditure Established staff Government Wage Earner Travel and communications Maintenance & operations Purchase of goods and services Operating grants and transfers Special expenditures Total Operating Expenditure Fiji Police Force 96,074,294 637,578 3,579,000 5,585,000 3,426,741 90,000 1,320,000 110,712,613 (4,116,125) --- 458,288 1,213,000 2,172,000 (55,788) (130,000) (458,625) 91,958,169 637,578 4,037,288 6,798,000 5,598,741 34,212 1,190,000 110,253,988 87,623,800 577,656 3,764,573 5,902,649 5,080,681 34,211 830,984 103,814,554 4,334,369 59,922 272,715 895,351 518,060 1 359,016 6,439,434 Section 20: Page 2 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017____________________________ SEG Item Budget Estimate ($) Changes ($) Revised Estimate ($) Actual Expenditure ($) Lapsed Appropriation ($) 8 9 Capital Expenditure Construction Purchases Total Capital Expenditure 4,060,000 2,640,000 6,700,000 25,873 (25,873) --- 4,085,873 2,614,127 6,700,000 459,628 1,993,778 2,453,406 3,626,245 620,349 4,246,594 13 Value Added Tax 3,087,288 458,625 3,545,913 2,778,164 767,749 TOTAL EXPENDITURE 120,499,901 --- 120,499,901 109,046,124 11,453,777 PART B: AUDIT FINDINGS 20.4 Anomalies in Underline Accounts The Force Accountant is responsible for maintaining ledgers and reconciling balances in such ledgers to ensure the accuracy of financial information and the timeliness of management reports.1 The audit review of the underline accounts noted the following anomalies:  Variances were noted between the total debit and credit of the Drawings, Inter Departmental Clearance (IDC) account and Bank Lodgement Clearance (BLC) Account reconciliation statement and FMIS general ledger.
Refer to Table 20.3 for details.
Table 20.3 Details of total debits and credits variance between Reconciliation Statement and the FMIS General Ledger FMIS Variance Account Total Reconciliation Statement ($) ($) Drawings IDC BLC Debits Credits Debits Credits Debits Credits 79,881,477.10 82,647,522.18 77,120,900.91 79,886,430.72 1,322,704.23 1,130,544.37 1,322,704.23 1,130,544.36 5,945,062.09 5,813,792.04 5,945,062.09 5,813,792.04 ($) (2,766,045.08) (2,765,529.81) (192,159.86) (192,159.87) (131,270.05) (131,270.05)  Revolving Fund Account (RFA) allocations 20-1-1-2099-570101 and 20-1-2-20101-570301 had debit balances of $114,920.52 and $432, respectively.
Since reconciliations were not provided, for audit verification, the audit could not substantiate the correctness of the above balances.

 The RFA increased by $157,643 or 202% in 2015 compared to 2014.This was due to the non- clearance of advances by officers.

Refer to Table 20.4 for details of RFA balances for the last five years.
1 Fiji Police Force Finance Manual 2014 – Part 15 Ledger Accounts Introduction paragraph Fiji Police Force Section 20: Page 3 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017____________________________ Table 20.4 Revolving Fund Account Year Balance ($) 677,466 739,708 697,909 78,131 235,774 2011 2012 2013 2014 2015  As at 31 December 2015, the Provisional Tax (Liability) account had a debit balance of $11,391.06.
 As at 31 December 2015, the Operating Trust Fund Account (TFA) had a balance of $3,319,947.63 of which $2,553,429.59 or 77% was carried forward from the previous year.

Audit review of the TFA balance for the past four years shows a significant increase in the TFA balance.

Refer to Table 20.5 for details.


Table 20.5: Trust Fund Account Trust Fund over the 4 year period Trust Fund Year Balance ($) 2012 1,993,467 2013 1,698,448 2014 2,553,430 2015 3,319,948 3,500,000.00 3,000,000.00 2,500,000.00 2,000,000.00 1,500,000.00 1,000,000.00 500,000.00 -  A variance of $5,230.63 was noted between the Trust Fund Account reconciliation statement and FMIS general ledger.
Refer to Table 20.6 for details 2012 2013 2014 2015 Fiji Police Force Section 20: Page 4 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017____________________________ Table 20.6: Details of variance between Reconciliation Statement and the FMIS General Ledger Account Trust Fund FMIS Reconciliation Statement ($) 3,314,717 3,319,947.63 ($) Variance ($) 5,230.63 Performing reconciliation of accounts is ineffective if variances between FMIS and general ledger records maintained by the Force are not rectified.
Recommendations    The Drawings, IDC and BLC account prepared by the Force should be reconciled to the FMIS general ledger.

Any variances noted should be investigated and necessary adjustments made to the relevant records.

All RFA and Trust Fund reconciliations should be thoroughly scrutinised by the Force Accountant for on a monthly basis.

The Force Accountant should ensure that debit (overdrawn) balance in Provisional Tax Account is investigated and reconciled regularly.
Management Comments All reconciliations are verified with the opening balances and we will ensure that it reconciles with the FMIS Ledgers.

Adherence will be made that reconciliations are carried out on the FMIS on the monthly reports uploaded by Ministry of Finance.

For any errors detected necessary adjustment will be made to correct it.

Currently, monthly reconciliations are prepared and submitted to Ministry of Finance.
A dedicated Trust Fund Account reconciliation clerk has been appointed: therefore we anticipate improvements in future submissions of reconciliations.

The carry forward balance in Account Receivable has been written off.

The Provisional Tax reconciliation is also submitted to Ministry of Finance and we will ensure that only Vendors applicable for Provisional tax will be deducted.

Force will ensure that the payments are remitted to FRCA in accordance with Provisional tax regulations.
20.5 Raising of Journal Vouchers Only the Force Accountant or Deputy Force Accountant shall approve journal adjustments.2 Audit review of the journal vouchers raised by the Force noted that some of the vouchers were not approved by the authorised officers.

Refer to Table 20.7 for examples.
Table 20.7: Revolving Fund Account Month Journal ID Amount ($) December 063156 6,671,564.71 2 Fiji Police Force Finance Manual 2014 – Part 15 Ledger Accounts Introduction paragraph Fiji Police Force Section 20: Page 5 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017____________________________ Month Journal ID Amount ($) December 063157 2,577,706.11 December 063160 588,801.02 The lack of reviews over the approval and processing of journal vouchers increases the risk of incorrect or erroneous journal entries being passed in the financial system.
Recommendations The Force should:   ensure all journal vouchers are approved by Force Accountant or Deputy Force Accountant before posting to the general ledger; and take appropriate action against responsible officers for posting unapproved journal vouchers to the general ledger.

Management Comments Journals 063156,063157 and 063160 are now certified by Deputy Force Accountant.

The staff that entered these journals into FMIS ledger is being transferred to another section.
Furthermore, all officers in the Ledgers sections have been advised to input data into FMIS Ledgers once it has been approved by Force Accountant or Deputy Force Accountant.
20.6 Absence without Leave No police officer appointed by the Commissioner shall be at liberty to resign or withdraw from the Force without the consent in writing of the Commissioner.3 The audit noted that Police Constable 3496 was not entitled to a salary for the period July 2012 to July 2014 as the officer was absent from work without authorisation.

This resulted in an overpayment of salaries amounting to $31,937.64.

The officer was terminated from the Force on 29th June, 2015.
Discussion with the Deputy Police Commissioner confirmed that the case is being handled by the Southern Division Complaints Unit and they will recommend that the officer be charged with criminal offence as he is no longer employed by the Force.

As at audit date, the officer’s whereabouts is unknown.

Although the issue was later highlighted to management, the discrepancy went undetected for two years.
The absence without leave resulted mainly from the lack of coordination and communication within the Force in monitoring staff movement.
3 Police Act Cap 85 – section 12 Fiji Police Force Section 20: Page 6 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017____________________________ Recommendations The Commissioner should ensure that:   internal control procedures are strengthened to avoid officers receiving wages/salary when absent from work; and recovery measures for the overpayment are put in place.
Management Comments The Fiji Police Force has control mechanism in place to monitor and track individual officer who are absent from work.

The Station Diary and Daily Deployments records are available at every Police Station to record the attendance and movement of staff on a daily basis.

For Civilian officers at Headquarters, the attendance register is kept in addition to the station diary and deployment record.
The Force also has a policy in place on procedure on reporting Absent without Leave, disciplinary offence for Absent without Leave, Daily Manpower Template In relation to recovery, the Job Evaluation Exercise payment has been forfeited and the ex-officer is evading Police.
20.7 Delayed Capital Projects Proper planning and feasibility study needs to be carried out for all capital projects to ensure that projects are completed on time and according to the predetermined design, specification and within budget.

The Force was allocated a budget (revised) of $4,085,873 for Capital Construction in 2015.

The audit noted that only $459,628 or 11% was utilised.

This was mainly attributed to the following:  The projects were not thoroughly assessed at the preliminary stage.
Discussion held with the Manager Procurement confirmed that Engineer Estimate A was used for the budget projection of capital construction.

As a result, the budget was insufficient as the actual construction cost was more that the budgeted amount.

; and  The capital construction which involved a substantial sum of public funds was not put out for public tender.

The audit noted that from the planning stage, the Force had intended to engage Ministry of Infrastructure and Transport.
The Force therefore requested for a Waiver of Tender for which one request was approved while the other requests were declined by the Minister of Finance later in the year.

Refer to Table 20.8 for details.

Table 20.8 Lack of proper planning of Capital Projects No.

Name Project of Budget Submission on 09/07/14 Approve Budget ($) Annual Procurement Plan on 30/01/15 1.

Renovation of Police Nadi Station $315,878 Ministry of Infrastructure & Transport to implement.
315,878 $315,878 of Ministry Infrastructure & Transport to implement.

Tender Process Status Project of the Nadi Station Project was not carried out.

tender No process executed but applied for Waiver of Tender for a total cost of $352,166.

This was declined by Minister of Finance on Fiji Police Force Section 20: Page 7 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017____________________________ No.
Name Project of Budget Submission on 09/07/14 Approve Budget ($) Annual Procurement Plan on 30/01/15 Tender Process Status Project of the 25/05/15 and 08/09/15.

2.

Renovation of Band Barrack A & B 3.

Renovation of Kadavu Police Quarters 4.

Refurbishment of Lautoka Police Station – West Wing $370,258 Ministry of Infrastructure & Transport to implement.

$124,082 Ministry of Infrastructure & Transport to implement.

$130,000 Ministry of Infrastructure & Transport to implement.
370,258 $370,258 of Ministry Infrastructure & Transport to implement.

124,082 $124,082 of Ministry Infrastructure & Transport to implement.

130,000 $130,000 of Ministry Infrastructure & Transport to implement not tender Project was carried out No process executed but applied for Waiver of Tender for a total cost of $509,288.

This was declined by Minister of Finance on 25/05/15 and 08/09/15 Funds for the Renovation of Police Quarters were budgeted for both Band Barracks and Kadavu Police Station.
However, due to the high cost anticipated the Band Barrack Quarters, amounting to $509,288, the renovation for the Kadavu Police Quarters was also put on hold.

No process executed but application for Waiver of Tender was approved by Minister of Finance on 29/07/15 on Class ‘A’ Estimate by Ministry of Infrastructure & Transport of $193,828.

$193,828 been Ministry Infrastructure exceeding budget of $130,000.
 Total payment of has to of tender paid for  Work has been put on hold due to degraded state of the building.

5.

Construction of Beqa Police Post & Quarters $710,000 Ministry of Infrastructure & Transport to implement.

710,000 $710,000 of Ministry Infrastructure & Transport to implement Project was not initiated due to unresolved land issues with landowners.

Lack of proper project planning and assessment is evident in the above anomalies.
Poor planning leads to inefficiency and wastage of time, money and resources.

Furthermore, the Force would not receive value for money based on unfair competitions, unethical dealings and poor quality work if it continues request for waiver of tenders for works more than $50,000.

Recommendation Proper assessment of projects with realistic costing should be done at preliminary stage.
Management Comments Nadi Police Station/Band Barrack A&B - Project has been rolled over this Year and given the re-deployment of funds, Project has been rolled over to Financial Year 2016-2017.

Tender has already been called and closed awaiting Budget announcement for further proceeding.

Kadavu Police Station - due to limited Budget provided and in order to complete Band Barrack A Project, this project was put on hold.
Lautoka Police Station - this project was put on hold due to the degraded state of building which has been completely destroyed by Cyclone Winston whereby Whole Lautoka Police Station has been closed and re-located.

Beqa- we have had land acquisition issues.

This has been relayed to the Minister of Finance through Construction Implementation Unit, whereby this Project has been eliminated from the Public Sector Investment Program.
Fiji Police Force Section 20: Page 8 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017____________________________ 20.8 Payment of Retention Retention monies are deductions made from all contract payments for capital works which are normally paid back to contractors after completion of the defects period after the completion of the contract works unless there is some defects noted after the defect period.

These monies are retained in a trust fund account.


Retention of 10% was held when payments were made to the contractor.

The first 5% was to be released after the practical completion and the second and final 5% to be released at the end of defects liability period.

The audit noted that retention monies for contractual payments were not transferred to the Trust Fund Account.

Refer to Table 20.9 for examples.


Table 20.9: Details of Retention Money not transferred to Trust Fund Date Project EFT / Cheque No.

29/12/15 21/12/15 29/12/15 18/12/15 23/12/15 21/12/15 717592 Police Barrack Sabeto 7357 PSRU Quarters No.

50 7558 Police Barrack in Vunidawa 7324 Police Quarter No.

28 in Nasinu.

7432 Police Quarter No.9 Grade 5 at Raiwaqa PS.

7392 Nayavu Police Quarters.

Contract Sum ($) 44,455 42,151 42,151 27,450 31,391 18,303 Retention Amount ($) 4,939.47.
4,215.10 4,215.10 2,745.00 3,139.10 1,830.30 As a result, the current year’s budget was utilised to pay the retention claims submitted by the contractors for the work completed in 2014.

Refer to Table 20.10 for examples.

Table 20.10: Details of Retention Money paid in 2015 Date 23/01/15 EFT / Cheque No.

712843 712848 Details Payment of 10% Retention for work completed at Vanuabalavu, Lomaloma Community Post in 2014.
Amount ($) 11,139 6,495 Remarks to The 10% retention was not posted operating trust in 2014 and as such this payment overstated expenditure.

2015 has in It is apparent that funds allocated in the Budget Estimates were not utilised for intended purpose in the year it was allocated.
Recommendation Retention funds should be transferred to the Trust Fund Account to ensure that subsequent year’s budget appropriation is not affected and that the Force will be able to meet the payments to contractors as and when due.

Management’s Comments The [former] Chief Accountant Treasury have been consulted during the Accounting Heads meeting and he has authorised the retention of funds in the Ministry of Finance Trust Account.
Fiji Police Force Section 20: Page 9 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – MARCH 2017____________________________ 20.9 Underline Accounts All Permanent Secretaries and Head of Department are required to submit monthly reconciliations to the Ministry of Finance by the 15th of each month.4 The audit noted that underline reconciliations were not submitted to Ministry of Finance on a timely basis.

Refer to Table 20.11 for details.
Table 20.11 Underline Reconciliations Months January February March April May June July August Revolving Fund Account Drawings BLC 9/10/2015 9/10/2015 1/6/2015 1/6/2015 1/6/2015 1/6/2015 9/7/2015 16/7/15 27/8/15 13/10/15 25/9/15 17/2/15 7/5/2015 12/5/2015 18/5/15 2/7/2015 13/7/15 21/8/15 22/9/15 IDC Operating Trust 4/6/2015 1/6/2015 21/5/15 8/6/2015 21/5/15 8/6/2015 21/5/15 9/6/2015 16/7/15 2/7/2015 20/7/15 16/7/15 27/8/15 21/8/15 15/9/15 24/9/15 The above indicates the lack of monitoring of submission of monthly reconciliations and balances to ensure the accuracy of the reconciliations.
Recommendations The Force Accountant:  should ensure that the underline reconciliations are prepared and submitted to Ministry of Finance on a timely basis.

 must ensure that the reconciliations are verified with the balances stated in the Statements of VAT and PAYE provided by FRCA.

 The difference of $2,725,793 should be investigated and rectified.

Management Comments A directive has been issued by the Force Accountant.

4 Finance Circular No.2/13 Fiji Police Force Section 20: Page 10