Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1697783750216.pdf (Fiji)
STANDING COMMITTEE ON PUBLIC ACCOUNTS Review of the 2016/2017 Audit Report on Statutory Authorities PARLIAMENT OF THE REPUBLIC OF FIJI Parliamentary Paper No.
05 of 2020 February 2020 Published and printed by the Department of Legislature, Parliament House, Government Buildings, Suva TABLE OF CONTENTS CHAIRPERSON‟S FOREWORD ............................................................................................................................ 3 COMMITTEE MEMBERS ....................................................................................................................................... 4 INTRODUCTION..................................................................................................................................................... 5 BACKGROUND ...................................................................................................................................................... 6 COMMITTEE FINDINGS ........................................................................................................................................ 7 COMMITTEE RECOMMENDATION ..................................................................................................................... 38 CONCLUSION ...................................................................................................................................................... 39 APPENDICES ....................................................................................................................................................... 40 APPENDIX 1 ......................................................................................................................................................... 41 2 CHAIRPERSON’S FOREWORD This report follows the Report of the Auditor General of the Republic of Fiji – 2016/2017 Audit Report on Statutory Authorities.
The 2016/2017 Audit Report on Statutory Authorities covered audit for 15 entities.

The Auditor General issued 21 audit opinions out of which 15 related to the 2016 financial statements while 4 were on the 2017 financial statements.

The Committee deliberated and compiled a report on the audit findings of 15 entities comprising of 25 audited financial statements.
For the audits undertaken on the 2016 financial year, the Auditor General issued an unmodified opinion on 13 of the financial statements audited for the various entities whilst the audit opinion on one entity was modified and one was issued with a Disclaimer of Opinion.

For the audits undertaken on the 2017 financial year, the Auditor General issued an unmodified opinion on 6 of the financial statements audited for the various entities.
The Audit Report highlights that the majority of the 15 statutory authorities are yet to be audited due to the following reasons:  Delay in submission of draft accounts for audits or draft accounts submitted were incomplete;  Delay in provision of management comments;  Delay in returning the signed audited financial statements for issues of audit opinion;  Relevant information/records not provided for audit on a timely basis; and  Authorities deciding to address issues raised in draft audit reports and resubmission of financial statements for audit.
The Committee strongly encourages the Chief Accounting Officers of the respective agencies to take responsibility for the deficiencies that have been highlighted in the audit report and work towards resolving them.

The clarifications provided to the Committee revealed that the Statutory Authorities have taken the Auditor-General's recommendation in a positive manner and are taking necessary actions accordingly.
I would like to thank the Executives of these Statutory Authorities and the Staff of the Office of the Auditor General for appearing before the Committee to provide clarifications on the issues.

I also wish to extend my appreciation to all the Honourable Members of the Committee who were part of the successful compilation of this bipartisan report namely Hon.

Joseph Nand, Hon.

Vijendra Prakash, Hon.

Aseri Radrodro and Hon.

Ratu Naiqama Lalabalavu.


On behalf of the Committee, I extend my appreciation to the Secretariat Staff for their timely support in the compilation and preparation of this report.

With those few words, I now commend this report to the Parliament.

………………………… Hon.

Alvick Maharaj Chairperson 3 The substantive members of the Standing Committee on Public Accounts are as follow: COMMITTEE MEMBERS Hon.

Alvick Avikirit Maharaj (Chairperson) Hon.


Joseph Nitya Nand (Deputy Chairperson) Hon.

Aseri Masivou Radrodro (Opposition Member) Hon.

Ratu Naiqama Lalabalavu (Opposition Member) Hon Vijendra Prakash (Government Member) 4 INTRODUCTION The 2016/2017 Audit Report on Statutory Authorities was tabled in Parliament during the May 2019 sitting and referred to the Standing Committee on Public Accounts, for its scrutiny.
Standing Order (SO) 109(2) (d) allows Standing Committee on Public Accounts to examine the accounts of the Government of the Republic of Fiji in respect of each financial year and reports of the Auditor-General, and for any other matter relating to the expenditures of the Government of the Republic of Fiji or any related body or activity (whether directly or indirectly) that the committee sees fit to review.
Standing Order 110(1)(c) authorises the Standing Committee to scrutinise the government departments with responsibility within the committee's subject area, including by investigating, inquiring into, and making recommendations relating to any aspect of such a department's administration, legislation or proposed legislative program, budget, rationalisation, restructuring, functioning, organisation, structure and policy formulation.
COMMITTEE PROCEDURE The Committee conducted a review on the 2016/2017 Audit Report on Statutory Authorities.

The Members formulated questions on the control issues identified by the Auditor General and invited the Statutory Authorities to provide clarifications of the issues.

The agencies that provided evidence to the Committee include: 1.

Public Rental Board; 2.

Civil Aviation Authority of Fiji; 3.

Fijian Competition and Consumer Commission; 4.

Fiji Teacher‟s Registration Authority; 5.


Investment Fiji; 6.

Fiji Meats Industry Board; 7.

Fiji National Sports Commission; 8.

Film Fiji; 9.

Fiji National Council for Disabled Persons; 10.

Fiji Higher Education Commission; 11.

Land Transport Authority; 12.

Fiji Revenue and Customs Services; 13.

Fiji Roads Authority; 14.

Consumer Council of Fiji; and 15.

Maritime Safety Authority of Fiji COMMITTEE MEMBERS The substantive members of the Standing Committee on Public Accounts are: 1.

Hon.
Hon.

Alvick Maharaj (Chairperson) 2.

Hon.

Joseph Nand (Deputy Chairperson) 3.

Hon.

Vijendra Prakash (Member) 4.

Hon.

Aseri Radrodro (Member) 5.

Hon.

Ratu Naiqama Lalalabalavu (Member) 5 BACKGROUND Annual financial statements are prepared by the statutory authorities.
It is important for the management to ensure that the preparation and fair presentation of the financial statements are in accordance with International Financial Reporting Standards and requirements of applicable laws and regulations.

The 2016/ 2017 Audit Report on Statutory Authorities covered audit for 15 entities.

The Auditor General issued 21 audit opinions out of which 15 related to the 2016 financial statements while 4 were on the 2017 financial statements.
For the audits undertaken on the 2016 financial year, the Auditor General issued unmodified opinion on 13 of the financial statements audited for the various entities while the audit opinion on one entity was modified and one was issued with Disclaimer of Opinion.

For the audits undertaken on the 2017 financial year, the Auditor General issued unmodified opinion on 6 of the financial statements audited for the various entities.
The Auditor General has highlighted some common findings which include control weaknesses which could cause or is causing severe disruption to the process or on the ability of an auditee to achieve process objectives and comply with relevant legislation.
The Audit Report also highlights that about half of statutory authorities are yet to be audited due to the following reasons:  Delay in submission of draft accounts for audits or draft accounts submitted were incomplete;  Delay in provision of management comments;  Delay in returning the signed audited financial statements for issues of audit opinion;  Relevant information/records not provided for audit on a timely basis; and  Authorities deciding to address issues raised in draft audit reports and resubmission of financial statements for audit.
Abridge financial statements are presented in the Audit Report for each statutory authority.

The abridged statements of financial performance reflects revenue, expense and net income while the abridge statements of financial position presents the authorities assets and liabilities.

6 COMMITTEE FINDINGS 1.

PUBLIC RENTAL BOARD Audit Opinion The audit of Public Rental Board for the financial year 2016 resulted in the issuance of unmodified opinion.
Public Rental Board - Abridged Statement of Financial Performance Description 2016 ($) 3,882,818 163,521 84,684 4,131,023 690,755 983,479 Rental Revenue Operating Revenue Interest Revenue Total Operating Income Depreciation Staff Costs Other Operating Expenses 1,149,390 Finance Cost Total Expenditure Net Profit for the year 229,538 3,053,162 1,077,861 2015 ($) 3,511,301 154,259 42,812 3,708,372 662,459 1,020,899 1,416,472 248,600 3,348,430 359,942 Net profit substantially increased by 199% or $0.7 million in 2016 compared to 2015.
This was mainly due to the increase in rental revenue generated by the housing flats and decrease in total expenditures, specifically, repairs and maintenance.
Public Rental Board - Abridged Statement of Financial Position Description Cash Investments Other Assets Property, Plant & Equipment Total Assets Creditors Deferred Revenue Borrowings Employee Entitlements Total Liabilities Net Assets 2016 ($) 5,486,265 95,893 436,961 29,241,863 35,260,982 2,804,938 694,569 9,274,604 330,038 13,104,149 22,156,833 2015 ($) 6,776,564 77,585 156,222 28,424,228 35,434,599 3,317,847 756,152 10,014,712 266,916 14,355,627 21,078,972 Net assets increased by just over $1 million or 6% in 2016 compared to 2015.
This was mainly attributed by the decreases in creditors, deferred revenue and borrowings.

7 Other Significant Matters - 2016 i. Unallocated Government Subsidy The Committee was informed that the balance of 2017 subsidy amounted to $423,662 was not fully utilised in 2017 due to the following reasons:  delay in completion of the two projects at Kalabu and Savusavu low cost housing  increase in rent for flats after general maintenance due to the rent freeze.
The balance subsidy was fully utilised in 2018 after completion of the two projects.

ii.

Reminder Notices Not Issued The Committee was advised that the reminder notices were issued on a timely manner but the copies of notices were not filed in the respective tenant files.

However, the Public Rental Board has reviewed this process.
The arrears recovery process is as follows:  Generate Month-end report from Navision System for all tenant arrears;  Categorize this arrears into age groups;  New arrears occurring in the report are sent reminder notice;  Discuss with tenants and enter into a repayment arrangement on the arrears;  If tenant dishonor the arrangement after 14 days, a second reminder notice is sent to the tenant; If tenant still dishonor the arrangement, a Notice to Vacate is served to the tenant; If tenant do not pay or vacate, the case is referred to the small claims tribunal or the solicitors for final eviction.
  The current practice is to file the copies of notices that are being issued in in tenant files after tenant acknowledges the notices.

The arrears decreased in 2017 as compared to 2016 by 11% and further decreased in 2018 by 32%.

8 2.

CIVIL AVIATION AUTHORITY OF FIJI Audit Opinion The audit of Civil Aviation Authority of Fiji for the financial year 2016 resulted in the issuance of unmodified opinion.
Civil Aviation Authority of Fiji - Abridged Statement of Financial Performance Description Revenue Revenue from operations Other operating income Finance income Total Revenue Expenditure Administrative expenses Operating expenses Personal expenses Total Expenditure Operating profit before tax Income tax expense Net (Loss)/Profit after tax Other comprehensive income Change in fair value of investments Total comprehensive income for the year 2016 ($) 5,407,031 325,431 54,248 5,786,710 1,278,449 1,206,654 2,926,981 5,412,084 374,626 654,215 (279,589) 556,699 277,110 2015 ($) (Restated) 5,772,327 305,438 29,625 6,107,390 1,208,819 1,372,758 2,725,658 5,307,235 800,155 132,433 667,722 463,916 1,131,638 The Authority recorded a net loss of $279,589 compared to a net profit of $667,722 in 2015, a decrease of $947,311 or 141.87%.
The decrease was mainly due to an increase in income tax expense by $521,782 in 2016 due to write-back of deferred tax asset amounting to $602,851 to expense which related to prior year tax losses as these could not be carried forward after lapse of four years.

In addition, the grant revenue from Government decreased by $624,101 or by 46.72% in 2016 compared to 2015.
Civil Aviation Authority of Fiji - Abridged Statement of Financial Position Description Assets Cash and cash equivalents Trade receivables Investments Other current assets Property, plant and equipment Other non-current assets Total Assets Liabilities Creditors and other payables Employee benefits Total Liabilities Net Assets 2015 ($) (Restated) 1,253,118 424,124 8,051,523 1,491,857 4,826,289 1,454,144 17,501,055 640,316 241,512 881,828 16,619,227 2016 ($) 1,604,080 75,777 9,608,222 1,030,685 4,616,219 783,407 17,718,390 702,288 119,765 822,053 16,896,337 9 Net assets of the Authority increased by $277,110 or 1.67% in 2016 compared to 2015.
This was mostly attributed to increase in investments (increase in fair value) by $1,556,699 or 19.33% compared to 2015.

Other Significant Matters – 2016 i.

Enterprise Risk Management The Committee was informed that the electronic enterprise risk register was developed by the senior staff of the Authority with assistance from Insurance Brokers, Marsh Pte Ltd in 2017.

However, a separate Risk Register independent of Insurance brokers was finalised in 2018.
The enterprise risk register includes administrative, technical and operational risks some of which are insurable.

The Authority in liaison with the insurance brokers continues to conduct a review of all insurance policies and risks insurability on an annual basis at the time of their expiry or as appropriate including the Authority‟s own review of risks outside insurability.
The Authority identifies risks by “level of risk” affecting or likely to affect its operations and measured with control effectiveness against the severity of risks.

The risk assessment process used by the Authority generally follows the global risk management standards where risks are identified according to the severity of the Consequence and Likelihood of it eventuating.
The Authority uses the previously developed risk register for both insurable and non-insurable risks and updates it through consultation with senior staff on an annual basis.

The various steps from identifying risks and updating a Risk Register are as follows: 1.

2.

3.

4.

5.

6.

Develop and update Risk Register.

Assign Accountabilities.

Evaluate Existing Controls.

Review Severity Risks Mitigation.

Initiate Reporting Procedures.

Monitor and Review Risks.


Audit Opinion The audit of Civil Aviation Authority of Fiji for the financial year 2017 resulted in the issuance of unmodified opinion.
Civil Aviation Authority of Fiji - Abridged Statement of Financial Performance Description Revenue Other Operating Income Total Revenue Administrative Expenses Operating Expenses Personnel Expenses Total Expenditure Net Financing Income Operating profit before tax Income Tax Expense Net loss after tax Other comprehensive income Change in Fair Value of Investments 2017 ($) 5,481,747 402,541 5,884,288 1,372,549 1,514,496 2,891,100 5,778,145 112,099 218,242 (481,483) (263,241) 2015 ($) (Restated) 5,407,031 325,431 5,732,462 1,278,449 1,206,654 2,926,981 5,412,084 54,248 374,626 (646,878) (272,252) 1,206,182 556,699 10 Description Revaluation of Property, Plant and Equipment, net of tax Total comprehensive income for the year 2017 ($) 1,847,543 2015 ($) (Restated) --- 2,790,484 284,447 Net loss of the Authority declined by $9,011 or by 3% in 2017 compared to 2016.
In addition, Total comprehensive income increased by $2,506,037 or by 881% in 2017 compared to 2016.
This was attributable to the following:   Increase in revaluation gain for Unit Trust of Fiji Units due to better market price of the units as at 31 December 2017 compared to 2016; and Increment in property Civil Aviation Authority of Fiji - Abridged Statement of Financial Position Description Assets Cash and Cash Equivalents Trade Receivables Income Tax Refundable Other Assets Investments Property, Plant and Equipment Intangible Assets Deferred Income Tax Asset Total Assets Liabilities Trade and Other Payables Income Tax Payable Employee Benefits Deferred Income Tax Total Liabilities Net Assets 2017 ($) 748,130 146,248 --- 1,082,546 11,814,404 6,608,966 352,924 --- 20,753,218 738,883 4,669 95,620 592,757 1,431,929 19,321,289 2015 ($) (Restated) 1,604,080 75,777 3,780 1,026,905 9,608,222 4,616,219 210,821 207,054 17,352,858 702,288 --- 119,765 --- 822,053 16,530,805 Net assets increased by $2.79 million or 16.88% in 2017 compared to 2016.
This was mainly attributed to the significant increase in property, plant and equipment and investments which increased by $1.99 million and $2.2 million respectively.

These increases were mainly due to the revaluation of PPE and Unit Trust of Fiji investment.

Other Significant Matters – 2017 ii.


Anomalies in Consultancy Agreement The Committee was informed that the tender to procure a Management Database was first advertised in July/August 2015 and attracted interests from 5 local and 1 overseas vendors.

This was based on an initial Scope of Works developed by the Authority.

However, after the proposals were presented by the vendors, it was noted that the Scope had to be re-done for which there were no expertise within CAAF.
Subsequently, and after further review, it was decided that instead of CAAF attempting to revise the Scope of Works, and face the same predicament of lack of technical expertise in house, a Consultant or Project Manager be hired to do a scoping work to be advertised.

The plan was to involve the consultant for all phases of the work until implementation of the entire database.
11 Phase I In view of the above, the scoping for the database was re-advertised in March 2016 and the Contract awarded to the Digital Group of Suva based on an hourly basis.

The hourly rate and the estimated project timeline of 6 - 8 weeks were used to arrive at the project cost of $55,520.00.

The Digital Group brought in an expert from abroad for preparation of Phase I to establish High Level Requirement (HLR) and a Request for Proposal (RFP) document.
A fixed timeline was not considered since the deliverable and the final outputs not only depended on the Consultant but also on the Authority‟s staff being available when required by the Consultant for discussions since most staff for the database project are technical staff who could not be available when required due to prior operational commitments.
Also, since the project scope perimeters and the magnitude were not initially understood, a fixed timeline was not insisted on as it would have penalized the Authority as well for delay on its part.

Phase II Once the HLR was completed as part of Phase 1 for the estimated cost of $55,520.00, the tender was advertised locally and on the CAAF website which attracted ROI‟s from 14 vendors of which three were shortlisted for submission of their proposals (RFP‟s).
All the shortlisted vendors were from abroad with whom at least two rounds of presentations from each of them, including many correspondences by email seeking clarifications took place.

One vendor came over to CAAF whilst others presented through skype or conference calls.
Once tenders were received, the Authority retained the same Consultant, who by now had an intimate knowledge of the CAAF requirements and also of the tenders received, to proceed to Phase 2 to include additional work up to project commissioning stage.

This added to the initial estimate of $55,520.00 which was for scoping alone.
Phase 2 of the project involved the following:  Review of Proposals submitted by vendors;  Evaluation of the proposals submitted by the vendors;  Evaluation of the shortlisted products;  Answer queries from vendors;  Arrange for presentations from vendors;  Prepare proposal review report;  Prepare Gap Analysis Report;  Prepare requirement traceability matrix;  Working out a solution for the integration of two separate databases;  Working out a solution to integrate several existing databases with the proposed database;  Working out a solution to integrate the connectivity‟s between the database and the existing and proposed New Website;  Prepare Cost benefit analysis report;  Prepare recommendation report.
The scoping project as per Phase I and additional work as per Phase II by „The Digital Group‟ was completed in 2018 for $150,975.00.

The recommendations by the Digital Group was referred to the Board for approval, however, for due diligence, the Board requested for a peer review of the project which is in progress.

12 3.
12 3.

FIJIAN COMPETITION AND CONSUMER COMMISSION Audit Opinion The audit of Fijian Competition and Consumer Commission for the financial year 2016 resulted in the issuance of unmodified opinion.
Fijian Competition and Consumer Commission Abridged Statement of Financial Performance Description Government Grant Other Income Total Income Personnel Expense Operating Expenses Administrative Expenses Depreciation Total Expenditure Net Surplus 31 July 2016 $ 1,016,194 75,873 1,092,067 666,440 139,179 62,325 42,803 910,747 181,320 Restated 31 Dec 2015 $ 1,524,258 77,045 1,601,303 1,014,146 296,651 81,035 75,432 1,467,264 134,039 Consistent with the changes in the financial year of Government, the Commission changed its financial year from 31 December to 31 July.
The financial statements for the period ended 2016 reflect transactions for a seven-month period whereas the financial statements for the year ended 2015 is for a 12-month period.

Thus, the significant variances with the comparative balances.
Fijian Competition and Consumer Commission Abridged Statement of Financial Position Description Cash at bank and on hand Deposits Other receivables Property, Plant & Equipment Total Assets Accounts Payable Other current liabilities Deferred Income – Non-current Total Liabilities Net Assets 31 July 2016 $ 798,642 9,963 22,801 185,976 1,017,382 449,526 38,595 79,032 567,153 450,229 Restated 31 Dec 2015 $ 352,824 10,260 53,767 220,661 637,512 220,407 26,593 121,603 368,603 268,909 The net assets position of the Commission increased for the seven months period ended 31 July 2016 compared to 12 months period ended 31 December 2015.
This was due to high cash balance held for the seven months period.

13 Audit Opinion The audit of Fijian Competition and Consumer Commission for the financial year 2017 resulted in the issuance of unmodified opinion.
Fijian Competition and Consumer Commission - Abridged Statement of Financial Performance Description Government Grant – Operational Other Income Total Income Personnel Expense Operating Expenses Administrative Expenses Depreciation Total Expenditure Net Surplus 2017 (12 months) ($) 2,278,656 140,649 2,419,305 1,352,394 333,444 214,881 98,092 1,998,811 420,494 2016 (7 months) ($) 1,016,194 75,873 1,092,067 671,497 138,813 57,634 42,803 910,747 181,320 The Commission recorded a net surplus of $420,494 in 2017 compared to $181,320 in 2016.
The increase in net surplus was due to the Commission changing its financial year in 2016 and as such 2017 financial year is being reported for 12 months while 2016 financial year reported for 7 months.
Fijian Competition and Consumer Commission Abridged Statement of Financial Position Description Cash and Cash Equivalents Deposits Trade and Other receivables Property, Plant & Equipment Total Assets Trade and Other Payable Deferred Income Other Liabilities Total Liabilities Net Assets 2017 (12 months) ($) 630,274 31,556 644,138 450,037 1,756,005 214,512 666,326 4,444 885,282 870,723 2016 (7 months) ($) 798,642 9,963 22,801 185,976 1,017,382 449,526 113,183 4,444 567,153 450,229 Net assets increased by $420,494 or 93% in 2017 compared to 2016.
The increase in net assets was due to 2017 financial year being reported for 12 months while 2016 financial year reported for 7 months.

The major increase of $621,337 was noted in trade and other receivables which was due to the delay in receipt of government grant for last quarter which is recorded as receivable.

Other Significant Matters – 2016 &2017 There were no control issues that were identified by the Auditor General.

14 4.
14 4.

FIJI TEACHER’S REGISTRATION AUTHORITY Audit Opinion The audit of Fiji Teacher‟s Registration Authority for the financial year 2016 resulted in the issuance of unmodified opinion.
Fiji Teacher’s Registration Authority – Abridged Statement of Financial Performance Description Government grant Amortization Total Income Depreciation expense Employee benefit expense Administrative expenses Interest expenses Total Expenditure Surplus for 13 months period ended 13 Months Period Ended 31 July 2016 ($) 462,969 4,335 467,304 17,317 299,384 88,409 4,239 409,349 57,955 The Authority recorded a surplus of $57,955 for the 13 months period ended 31 July 2016.
In 2009, the Fiji Teachers Registration Board (FTRB) was under the Ministry of Education as a Department.

In 2013, through a Cabinet Decision CP (13) 61 FTRB was declared a Government Statutory body which was renamed as Fiji Teachers Registration Authority (FTRA).

Up until June 2015 FTRA‟s cash flow and payments were handled by Ministry of Education.

The Authority commenced to manage its own affairs from 01 July 2015 and has been audited for the first time.
Fiji Teacher’s Registration Authority – Abridged Statement of Financial Position Description Cash and short term deposits Prepayment and other assets Property, plant and equipment Total Assets Trade payable and other accruals Deferred revenue Obligations under finance lease Employee entitlement Total Liabilities Net Assets 31 July 2016 ($) 58,724 140 83,840 142,704 2,500 28,822 44,427 9,000 84,749 57,955 The Authority recorded net asset of $57,955 for the 13 months period ended 31 July 2016.
Other Significant Matters – 2016 There were no control issues that were identified by the Auditor General.

15 5.

INVESTMENT FIJI Audit Opinion The audit of Investment Fiji for the financial year 2016 resulted in the issuance of unmodified opinion.
Investment Fiji - Abridged Statement of Financial Performance Description Income Government grant Registration Fees Trade Promotion Income Other Income Total income Expenditure Administrative expenses Depreciation Finance Cost Operating expenses Personnel expenses Trade Promotion - Expenses Total expenditure Net (deficit) / surplus for the year 2016 ( 7 months) ($) 1,091,831 218 41,284 25,805 1,159,138 155,839 50,327 --- 202,002 789,859 39,968 1,237,995 (78,857) 2015 (12 months) ($) 1,739,130 459 321,290 40,801 2,101,680 392,631 78,061 559 330,414 820,435 341,254 1,963,354 138,32 Consistent with the changes in the financial year of Government, the Commission changed its financial year from 31 December to 31 July.
The financial statements for the period ended 2016 reflect transactions for a seven-month period whereas the financial statements for the year ended 2015 is for a 12-month period.

Thus the significant variances with the comparative balances.

However, personnel expenses which were proportionately higher in 2016 for the 7 month period compared to 2015.

This was mostly attributable to filling up of some vacant positions in 2016 by Investment Fiji.
Investment Fiji - Abridged Statement of Financial Position Description Assets Cash on hand and at bank Receivables Property, plant and equipment Total Assets Liabilities Trade creditors and accruals Payable to Ministry of Finance Provisions for employee entitlement Deferred grant income Total Liabilities Net Assets 2016 ( 7 months) ($) 1,011,485 292,069 337,558 1,641,112 71,582 522,500 72,638 142,202 808,922 832,190 2015 (12 months) ($) 935,134 32,149 373,670 1,340,953 101,470 275,000 53,435 --- 429,905 911,048 Other Significant Matters – 2016 There were no control issues that were identified by the Auditor General.
16 Audit Opinion The audit of Investment Fiji for the financial year 2017 resulted in the issuance of unmodified opinion.
Investment Fiji - Abridged Statement of Financial Performance Description Government grant Registration fees Trade Promotion income Other income Total income Administrative expenses Depreciation Operating expenses Personnel expenses Trade Promotion - expenses Total expenditure Net surplus/(deficit) for the year/period 2017 ( 12 months) ($) 2,136,580 286 504,697 4,721 2,646,284 269,030 95,835 515,971 1,338,977 323,932 2,543,745 102,539 2016 (7 months) ($) 1,091,831 218 41,284 25,805 1,159,138 155,839 50,327 202,002 789,859 39,968 1,237,995 (78,857 Investment Fiji recorded net surplus of $102,539 for the financial year ending 31 July 2017 compared to deficit of $78,857 in 2016.
The surplus in 2017 is mainly attributable to the full calendar year (12 months) in 2017 compared to 7 months reporting in 2016.
Investment Fiji - Abridged Statement of Financial Position Description Cash on hand and at bank Receivables Property, plant and equipment Total Assets Trade creditors and accruals Payable to Ministry of Finance Provisions for employee entitlement Deferred grant income Total Liabilities Net Assets 2016 (7 months) ($) 927,882 283,521 675,274 1,886,677 181,880 545,023 82,842 142,202 951,947 934,730 2016 (7 months) ($) (Restated) 1,011,485 310,603 337,558 1,659,646 90,115 522,500 72,638 142,202 827,455 832,191 Investment Fiji recorded increase in the net assets which increased by $102,539 or 12% in 2017 compared to 2016.
The increase in net assets was mainly attributable to acquisition of CRM software amounting to $313,974 in 2017.

Other Significant Matters – 2017 There were no control issues that were identified by the Auditor General.

17 6.

FIJI MEATS INDUSTRY BOARD Audit Opinion The audit of Fiji Meats Industry Board for the financial year 2016 resulted in the issuance of unmodified opinion.
Fiji Meats Industry Board - Abridged Statement of Financial Performance Description Operating Revenue Other Income Total Revenue Changes in Inventories – finished goods Raw Materials and Consumables used Staff Cost Depreciation Other Operating Expenses Finance Cost Total Expenses Net (Loss)/Profit from Operations Other comprehensive Income Total Comprehensive (Loss)/Income 2016 ($) 3,235,586 122,696 3,355,282 853,035 221,753 974,330 299,776 1,065,627 67,987 3,482,508 (127,226) --- (127,226) 2015 ($) 3,337,475 149,940 3,487,415 800,752 165,847 990,899 309,248 1,117,913 78,604 3,463,263 24,152 --- 24,152 The company recorded a net loss in 2016 compared to the previous year as a result of decrease in revenue from its abattoir operations and increase in operating costs.
The cost of operating and maintaining the abattoir increased due to the high number of cattle being slaughtered for tuberculosis, high chemical expenses and utility costs and also the maintenance of abattoir equipment.
Fiji Meats Industry Board - Abridged Statement of Financial Position Description Cash Investments Trade and Other Receivables Inventory Property, Plant & Equipment Total Assets Trade Creditors and Payables Deferred Income Interest Bearing Borrowings Total Liabilities Net Assets 2016 ($) 39,099 201,957 423,063 67,174 1,873,805 2,605,098 197,424 361,100 913,342 1,471,866 1,133,232 2015 ($) 111,223 249,950 440,985 85,658 2,049,228 2,937,044 226,960 434,700 1,014,926 1,676,586 1,260,458 The decrease in net assets in 2016 compared to the previous year was largely due to the low cash balance at year end, decrease in term deposits held and decrease in property, plant and equipment.
Repayments of term loan resulted in the decrease in total liabilities.

18 Other Significant Matters – 2016 i.

Accounting Manual not Reviewed since 2011 The committee was informed that the Management and Board have reviewed the Finance Manual.

The new manual reflects current fees and prices of FMIB products, buying prices of livestock for slaughter and fine tuning existing controls.

ii.
ii.

Anomalies in Procurement Procedures The Committee was advised that the Board is in the process of formulating additional policies.

The Board has decided to further fine tune the finance manual together with its internal policies.

These include operational policy, communication and public disclosure policy, company vehicle usage policy, procurement policy, HRM policy, OHS policy, sexual harassment policy, corporate governance policy and internet/social media policy.
The Board will hire a consultant who would further look at the above policies.

iii.

Absence of Policy for Variation in ‘Magiti’ Prices The Committee was informed that the changes in “Magiti” prices are approved by the CEO as and when required as per the financial instruction.

The prices are subject to change as the buying price fluctuates.

19 7.
19 7.

FIJI NATIONAL SPORTS COMMISSION Audit Opinion The audit of Fiji National Sports Commission for the financial year 2016 resulted in the issuance of unmodified opinion.
Fiji National Sports Commission - Abridged Statement of Financial Performance Description Operating revenue Other Operating revenue Total Revenue Expenses Sports Grant Expenses International Coaches Salary expenses Personal Expenses Operating Expenses Other Expenses Total Expenses Net Surplus/(Deficit) 2016 (7 months) ($) 7,689,703 40,399 7,730,102 6,328,996 736,843 241,556 153,640 73,543 7,534,578 195,524 2015 (12 months) ($) 5,936,981 65,565 6,002,546 4,042,344 1,442,006 407,738 267,117 116,732 6,275,937 (273,391 The Commission recorded net surplus of $195,524 in 2016 compared to a net deficit of $273,391 in 2015.
The net surplus in 2016 was significantly attributable to increase in total revenue which substantially increased by 29% or $1.73 million in 2016 compared to 2015.

This was due to increase in grant allocation due to the Rio Olympic Games held in 2016.
Fiji National Sports Commission - Abridged Statement of Financial Position Description Cash and cash equivalents Other current assets Property Plant & equipment Total Assets Trade and Other Payables Employee entitlements Deferred revenue Finance lease liability Total Liabilities NET ASSETS 2016 (7 Months) ($) 959,897 13,258 244,420 1,217,575 436,740 21,189 433,119 68,402 959,450 258,125 2015 (12 months) ($) 205,216 7,655 295,758 508,629 162,728 20,963 157,299 105,038 446,028 62,601 Net assets increased by $195,524 or 312% in 2016 compared to 2015.
This was mainly due to the increase in cash and cash equivalent balance due to the Rio Olympic Game Event held in 2016.

Audit Opinion The audit of Fiji National Sports Commission for the financial year 2017 resulted in the issuance of unmodified opinion.
20 Fiji National Sports Commission - Abridged Statement of Financial Performance Description Operating Revenue Other Operating revenue Total Revenue Expenses Sports Grant Expenses International Coaches Salary expenses Personal Expenses Operating Expenses Other Expenses Total Expenses Net Profit 2017 (12 months) ($) 6,434,203 100,899 6,535,102 4,764,848 860,409 446,447 283,604 131,616 6,486,924 48,178 2016 (7 months) ($) 7,689,703 40,399 7,730,102 6,328,996 736,843 241,556 153,640 73,543 7,534,578 195,524 The Commission‟s net profit declined by $147,346 or by 75% in 2017 compared to 2016.
The decline was mostly attributable to decline in operating activities in 2017 for the Commission compared to 2016.

The major reason for the decline was due to Rio Olympic Games Event which was held in 2016 and as such operating activities of 2016 was higher compared to 2017.
Fiji National Sports Commission - Abridged Statement of Financial Position Description Cash and cash equivalents Other current assets Property, plant & equipment Total Assets Trade and other payables Employee entitlements Deferred revenue Finance lease liability Total Liabilities NET ASSETS 2017 (12 Months) ($) 752,177 15,563 282,034 1,049,774 126,223 23,069 583,469 10,710 743,471 306,303 2016 (7 Months) ($) 959,897 13,258 244,420 1,217,575 436,740 21,189 433,119 68,402 959,450 258,125 Net assets increased by $48,178 or 19% in 2017 compared to 2016.
Decline in liabilities was noted to be more than decline in assets.

This was mainly attributed to the significant decline in trade and other payables which declined by $310,517 or by 71% in 2017 since the grant was for the full twelve months in 2017 which enable the Commission to clear their dues.

Other Significant Matters – 2016 & 2017 There were no control issues identified by the Auditor General.

21 8.
21 8.

FILM FIJI Audit Opinion The audit of Film Fiji for the financial year 2016 resulted in the issuance of unmodified opinion.
Film Fiji - Abridged Statement of Financial Performance Description Government Grant Sponsorship and Ticket sales – Kula Awards Other Revenue Total Revenue Expenses Administrative Expenses Promotional Expenses Personal Expenses Depreciation Other Expenses Total Expenses Net Surplus/(Deficit) 31 July 2016 (7 months) ($) 491,235 88,978 17,703 597,916 255,493 102,401 211,381 17,061 2,000 588,336 9,580 31 Dec 2015 (12 months) ($) 751,642 67,285 36,776 855,703 308,174 189,297 352,607 30,131 3,813 884,022 (28,319) Film Fiji recorded net surplus of $9,580 in 2016 compared to a net deficit of $28,319 in 2015.
Film Fiji changed its financial year from December to July in 2016 and hence the 2016 financial year is for 7 months only.
Film Fiji - Abridged Statement of Financial Position Description Cash and cash equivalents Receivables Other current assets Property Plant & equipment Total Assets Trade and Other Payables Employee entitlements Deferred revenue Provisions Total Liabilities Net Assets 31 July 2016 (7 months) ($) 387,790 33,392 20,674 107,701 549,557 53,119 20,103 107,702 12,000 192,924 356,633 31 Dec 2015 (12 months) ($) 282,656 34,375 59,368 108,120 484,519 5,331 14,015 108,120 10,000 137,466 347,053 Film Fiji recorded net assets of $356,633 in 2016 compared to $347,053 in 2015.
This was mainly due to increase in cash holding in 2016.

Other Significant Matters – 2016 i.

Lack of VAT Reconciliation The Committee was advised that the VAT payable and VAT refunds are reconciled on a monthly basis against VAT Notice of Assessments received from the Fiji Revenue and Customs Service.

Film Fiji carries out yearly VAT reconciliation against the Statement of Account for VAT.

22 9.
22 9.

FIJI NATIONAL COUNCIL FOR DISABLED PERSONS Audit Opinion The audit of Fiji National Council for Disabled Persons for the financial year 2016 resulted in the issuance of unmodified opinion.
Fiji National Council for Disabled Persons - Abridged Statement of Financial Performance Description Government Grant Other Income Total Receipts Salaries, Wages and Related Expenses European Union Projects National Disability Week Travel and Subsistence Telephone Fax Board and Committee Expenses Maintenance and Repairs International Disable Persons Day Fiji Vocational Technical Training for Disabled People Workshop/Training Programs Caregiver Allowance Office Equipment Other Expenses Total Expenditure Net Surplus/(Deficit) for the year 2016 (7 Months) ($) 227,500 15,669 243,169 130,364 9,007 10,245 1,215 7,539 13,813 9,550 --- 11,000 --- 2,240 1,348 27,022 223,343 19,826 2015 (12 Months) ($) 290,000 37,906 327,906 208,427 110,369 11,337 1,778 12,147 18,899 12,938 11,140 1,208 10,714 4,080 5,831 37,741 446,609 (118,703 Consistent with the changes in the financial year of Government, the Council changed its financial year from 31 December to 31 July.
The financial statements for the period ended 2016 reflect transactions for a seven-month period whereas the financial statements for the year ended 2015 is for a 12-month period.

Thus the significant variances with the comparative balances.
Fiji National Council for Disabled Persons - Abridged Statement of Financial Position Description Cash Telephone Deposit Total Assets Total Liabilities Net Assets 2016 (7 Months) ($) 31,722 600 32,322 --- 32,322 2015 (12 Months) ($) 11,896 600 12,496 --- 12,496 Net assets increased by $19,826 million or 159% in 2016 compared to 2015.

This was mainly attributed to the net surplus incurred for the period ended 31 July 2016.
The increase in net surplus was mainly due to decrease in expenditure as only 7 months expenditure is recorded due to change in Government‟s fiscal year.

Other Significant Matters – 2016 i. Non-Adoption of International Financial Reporting Standards for Small Medium Entities (IFRS for SME’s) 23 The Committee was informed that the Council has a cash basis system which consists of receipts and payments.
The Council has installed a program called Standss Paymaker Version 4.5.91B Windows for Wages and Salaries.

The accountant has undergone training process and the system has been implemented in 2019. ii.

Absence of a Comprehensive Accounting Manual The Committee was informed that the council is engaged in the compilation and finalization of a financial manual to ensure that all accounting tasks are carried out in compliance with the set guidelines in the accounting procedures manual.
The financial manual will be tabled in the next council meeting.

24 10.

FIJI HIGHER EDUCATION COMMISSION Audit Opinion The audit of Fiji Higher Education Commission for the financial year 2016 resulted in the issuance of unmodified opinion.
Fiji Higher Education Commission - Abridged Statement of Financial Performance Description Government Grant MFAT grant EU PAC TVET Release of deferred income Conference collection Other refunds Total Operating Income Depreciation and amortization expense Salaries and Wages Operating expenses Total Operating Expenses Deficit for the year 2016 (7 Months) ($) 841,424 --- --- 42,229 147,198 20,122 1,050,973 37,302 696,143 615,604 1,349,049 (298,076) 2015 (12 Months) ($) 1,359,599 134,678 105,000 50,206 --- 704 1,650,187 50,206 1,096,364 778,727 1,925,297 (275,110 Consistent with the changes in the financial year of Government, the Commission changed its financial year from 31 December to 31 July.
The financial statements for the period ended 2016 reflect transactions for a seven-month period whereas the financial statements for the year ended 2015 is for a 12-month period.

Thus the significant variances with the comparative balances.
Fiji Higher Education Commission - Abridged Statement of Financial Position Description Cash and cash equivalents Receivable from staff Other debtors, deposits and prepayments Property plant and equipment Intangible assets Total Assets Trade payables and accruals Deposits Provisional Tax Provision for annual leave Deferred Income Total Liabilities Net Assets 2016 (7 Months) ($) 2,306,490 --- 37,118 233,946 166,610 2,744,164 82,826 --- 6,012 26,799 2,310,891 2,426,528 317,636 2015 (12 Months) ($) 669,410 213 80,338 218,196 133,292 1,101,449 72,334 7,341 982 50,468 430,390 561,515 539,934 The Commission‟s net asset decreased by $222,298 or 41% in 2016 compared to 2015.
This was due to increase in deferred income by $1,880,501 or 437% when compared to 2015.

25 Other Significant Matters – 2016 i. Non-disclosure of grants administered by the Commission The Committee was informed that the grants are given from the Ministry straight to the institutions.

It does not come to the Commission.

It goes straight from the Ministry of Economy and Ministry of Education straight to the institutions.
The Commission only administers the acquittal process which is done on a quarterly basis.

ii.

Absence of Grant Agreement The Committee was informed that 42 percent of the funding is provided by the Government grant that the Commission receives from the Fiji Government; 58 percent is provided by the New Zealand Ministry of Foreign Affairs and Trade.

These are the grant agreements that the Commission has in place for this financial period.

26 11.
26 11.

LAND TRANSPORT AUTHORITY Audit Opinion The audit of Land Transport Authority for the financial year 2016 resulted in the issuance of unmodified opinion.
Land Transport Authority - Abridged Statement of Financial Performance Description Grant received Other income Total Revenue Administration expenses Operating expense Other expenses Total Expenditure Loss for the period 2016 (7 Months) ($) 8,763,652 1,094,551 9,858,203 6,116,913 3,882,322 790,724 10,789,959 (931,756) 2015 (12 Months) ($) 13,041,562 1,451,134 14,492,696 8,692,064 5,977,649 811,665 15,481,378 (988,682) Consistent with the changes in the financial year of Government, the Authority changed its financial year from 31 December to 31 July.
The financial statements for the period ended 2016 reflect transactions for a seven-month period whereas the financial statements for the year ended 2015 is for a 12-month period.

Thus, the significant variances with the comparative balances.
Land Transport Authority - Abridged Statement of Financial Position Description Cash and cash equivalents Receivables Inventories Property, plant and equipment Total Assets Creditors and other accruals Owing to Government consolidated account Capital grant Provisions Finance Lease Liability Total Liabilities Net Assets 2016 (7 Months) ($) 1,968,488 342,416 781,167 14,527,018 17,619,089 1,419,712 336,705 9,404,790 1,118,706 635,850 12,915,763 4,703,326 2015 (12 Months) ($) 1,639,570 266,237 758,142 14,644,985 17,308,934 1,738,493 44,615 8,282,935 748,522 859,287 11,673,852 5,635,082 Consistent with the changes in the financial year of Government, the Authority changed its financial year from 31 December to 31 July.
The financial statements for the period ended 2016 reflect transactions for a seven-month period whereas the financial statements for the year ended 2015 is for a 12-month period.

Thus there is significant variance with the comparative balances in some cases.

27 Other Significant Matters – 2016 i.


Errors in Draft Financial Statement Submitted for Audit The Committee was advised that the authority has taken on board the recommendations on disclosures and the accounting treatment highlighted by Office of the Auditor General.
The authority has put in place the following measures to ensure that the draft financial statements submitted are free from errors:  All adjustments are accompanied with proper explanatory notes to the Financial Statements  Postmaster revenue is no longer recorded as receivables as advised by the Office of the Auditor General  The reconciliation of the accruals account are now carried out on monthly basis and monitored to ensure only genuine expenses are accrued.
The authority is following all review processes to ensure that the future Financial Statements are free from errors.

ii.

Recording of Cashier Shortage as Receivables The Committee was advised that as of July 2016, the Authority recognized receivables amounting to $21,783, relating to misappropriation of cash by staff at Nadi Town office in 2013 amounting to $18,006 and destruction of Labasa Office by fire in 2014 with a cash loss of $3,777.
The Authority has written off the balance on 21 July 2017 as these receivables could not be recovered.

However, the Authority has placed the following measures to ensure that cash is not misappropriated:  The Authority has signed a Memorandum of Understanding with BSP on 17 August 2018 for overnight safekeeping of cash to ensure cash is not misappropriated by theft or fire in future.
 The Authority has embedded stringent controls in the system whereby receipt cancellation has been removed from the system which prevents the Customer Service Officers from directly cancelling receipts without the various levels of checks and approvals by the Branch Managers to prevent staff from fraudulently taking cash through cancelling receipts.
 From 29 October 2018, the Authority has replaced the Regional Managers setup to individual Branch Managers dedicated to respective branches for better control, monitoring and accountability of revenue processes and cash handling.

 The Authority has also reviewed the minimum qualification requirements for Customer Service Officers to ensure that skilled staff is hired with some financial qualifications.

28 12.
28 12.

FIJI REVENUE AND CUSTOMS SERVICE Audit Opinion The audit of Fiji Revenue and Customs Service for the financial year 2016 resulted in the issuance of unmodified opinion.
Fiji Revenue and Customs Service - Abridged Statement of Financial Performance Description State Revenue Less: Payment to government Grants from Government Fees and Charges Other Income Total Agency Revenue Employee Costs Recurrent Expenditure Total Expenditure Net Surplus for the year Other Comprehensive Income Total Comprehensive Income 31 July 2016 (7 Months) ($) 1,314,322,381 (1,314,322,381) 23,261,526 4,666,257 5,187,703 33,115,486 19,203,944 6,762,632 25,966,576 7,148,910 5,425,707 12,574,617 31 Dec 2015 (12 Months) (Restated) ($) 2,354,035,377 (2,354,035,377) 39,736,956 7,078,710 3,131,647 49,947,313 32,168,358 10,561,562 42,749,920 7,217,393 --- 7,217,393 Consistent with the changes in the financial year of Government, FRCS changed its financial year from 31 December to 31 July.
The financial statements for the period ended 2016 reflect transactions for a seven-month period whereas the financial statements for the year ended 2015 is for a 12-month period.

Thus the significant variances with the comparative balances in some cases.

Other income increased by $2,056,056 or 66% in 2016 due to the revaluation gain from the investment property.

Similarly, other comprehensive income increased by $5,424,707 or 100% due to the revaluation gain from land and building.
Fiji Revenue and Customs Service - Abridged Statement of Financial Position Description Cash at bank Investments Other Current Assets Property, Plant and Equipment Total Assets Current Liabilities Deferred Grant Income Total Liabilities Net Assets Total Equity 31 July 2016 (7 Months) ($) 35,363,223 33,461,093 2,460,533 26,736,518 98,021,367 5,070,825 21,539,622 26,610,447 71,410,920 71,410,920 31 Dec 2015 (12 Months) (Restated) ($) 25,497,734 32,984,852 6,810,720 16,492,758 81,786,064 4,942,088 18,007,673 22,949,761 58,836,303 58,836,303 Total assets increased by $16,235,303 or 20% in 2016.
This was due to the increase in Property, Plant and Equipment by $10,243,760.

In addition, the change in the financial year contributed to the increase in cash at bank by $9,865,489 or 39%.

Total liabilities increased by $3,660,686 or 29 16% in 2016 as compared to 2015.

This was due to the increase in deferred grant income by $3,351,949.

Other Significant Matters – 2016 i.


Contingent Assets and Liabilities The Committee was informed that the recommendation by the Office of Auditor General has been taken into consideration and necessary changes have been done.

ii.

Ownership of Land and Buildings The Committee was advised that the initial transfer was done through FRCA Act, which formally gave the legal right to FRCA of those assets.

Scheme plan has been prepared and is lodged with Ministry of Lands for the issuance of formal lease.
30 13.

FIJI ROADS AUTHORITY Audit Opinion The audit of Fiji Roads Authority for the financial year 2016 resulted in the issuance of unmodified opinion.
Fiji Roads Authority - Abridged Statement of Financial Performance At period end Grants and contributions Amortisation of deferred income Other Income Total Income Employee related expenses Maintenance Depreciation and amortization Other operating expenses Total Operating Expenditure Deficit for the period Total Other Comprehensive Income Total Comprehensive (Loss)/Income 2016 (7 months) 31 July ($) 10,136,746 103,584,724 227,202 113,948,672 2,035,661 51,761,478 73,502,382 10,854,906 138,154,427 (24,205,755) --- (24,204,755) 2015 (12 months) 31 December ($) 17,804,425 146,605,738 1,240,285 165,650,448 3,595,570 115,280,305 115,072,390 21,417,904 255,366,169 (89,715,721) 3,505,794,232 3,416,078,511 Consistent with the changes in the financial year of Government, the Authority changed its financial year from 31 December to 31 July.
The financial statements for the period ended 2016 reflect transactions for a seven-month period whereas the financial statements for the year ended 2015 is for a 12-month period.

Thus the significant variances with the comparative balances.

The significant variance in the total comprehensive income was due mainly to the accounting of revaluation reserve as other comprehensive income in 2015.
Fiji Roads Authority - Abridged Statement of Financial Position At period end Cash and cash equivalents Receivables Other Current Assets Property, plant and equipment Intangible Assets Total Assets Payables Provision Deferred Income Total liabilities Net Assets 2016 (7 months) 31 July ($) 109,560,052 3,935,487 129,825,285 8,802,947,890 36,623 9,046,305,337 79,130,077 43,840,142 662,790,518 785,760,737 8,260,544,600 2015 (12 months) 31 December ($) 137,320,297 2,639,269 132,460,557 8,739,358,937 52,603 9,011,831,663 93,993,617 45,880,891 630,971,980 770,846,488 8,240,985,175 The slight increase in net assets for the 7-month period in 2016 compared to the 12-month in 2015 was mainly due to the increase in the value of property, plant and equipment.
31 Other Significant Matters – 2016 i.

Lack of Proper Reconciliations of Donated Fixed Assets The Committee was informed that Fiji Roads Authority has temporality shelved the ERP system as the organization is still undergoing a restructure and the mapping processes under the consolidated budget.

The need for ERP in FRA will be re-evaluated at the end of 2020 by when we expect to have the organizational structure and departmental operating procedures finalized.
As for the Assets Management System, FRA is currently using two platforms namely Road Assets Maintenance & Management and Environmental Systems Research Institute – Geographic Information System.

FRA has had these platforms in use for over the two years and is in the process of evaluating the benefits against alternative database soft wares that can provide real time assets valuation.
By the end of 2020 FRA intends to have in place an AMS that can facilitate Operation and Maintenance and at the same time can provide real time valuation report.

32 14.

CONSUMER COUNCIL OF FIJI Audit Opinion The audit of Consumer Council of Fiji for the financial year 2016 resulted in the issuance of unmodified opinion.
Consumer Council of Fiji - Abridged Statement of Financial Performance At period end Government Grant Grant from EU Sundry Income Deferred Grant Income Total Income Depreciation Rent and rates Salaries, wages and related payments Telephone and postage charges Travelling expenses National Consumer Helpline Office expense Advertising Sundry expenses Total Expenditure Net (Deficit)/Surplus for the year 2016 (7 months) 31 July ($) 564,144 9,161 6,658 22,175 602,138 22,175 35,609 351,260 8,165 3,122 44,453 20,069 34,547 107,136 626,536 (24,398) 2015 (12 months) 31 December ($) 663,274 54,566 808 24,522 743,170 24,522 61,200 484,239 11,851 11,154 --- 19,943 7,930 104,665 725,504 17,666 Consistent with the changes in the financial year of Government, the Council changed its financial year from 31 December to 31 July.
The financial statements for the period ended 2016 reflect transactions for a seven-month period whereas the financial statements for the year ended 2015 is for a 12-month period.

Thus, the significant variances with the comparative balances.
Consumer Council of Fiji- Abridged Statement of Financial Position At period end Cash on hand and at bank Other current assets Property, plant and equipment Total Assets Accounts payables and accruals Provision for annual leave Deferred Grant Unutilized capital grant VAT payable Total Liabilities Net Assets 2016 (7 months) 31 July ($) 168,302 17,493 136,462 322,257 33,945 16,686 136,461 67,890 4,920 259,902 62,355 2015 (12 months) 31 December ($) 103,180 14,208 93,050 210,438 19,515 11,120 93,050 --- --- 123,685 86,753 Consistent with the changes in the financial year of Government, the Council changed its financial year from 31 December to 31 July.
The financial statements for the period ended 2016 reflect 33 transactions for a seven-month period whereas the financial statements for the year ended 2015 is for a 12-month period.

Thus the significant variances with the comparative balances.

Other Significant Matters – 2016 There were no control issues highlighted by the audit.

34 15.
34 15.

MARITIME SAFETY AUTHORITY OF FIJI Audit Opinion The audit of Maritime Safety Authority of Fiji for the financial year 2016 resulted in the issuance of unmodified opinion.
Maritime Safety Authority of Fiji - Abridged Statement of Financial Performance At period end Government operating grant Qualification and Licensing Ships Inspections Aids to Navigation levies Interest Income Other Income Total Revenue Staff Cost Administration Expenses Depreciation Expenses Other Operating Expenses Loss on sale of fixed assets (net) Total Expenditure Total Comprehensive Loss 2016 ($) 2,635,216 208,168 196,782 469,319 99,404 59,340 3,668,229 1,681,374 574,467 648,527 803,565 3,013 3,710,946 (42,717) 2015 ($) --- 361,123 298,118 805,669 86,694 50,884 1,602,488 1,700,476 606,538 718,208 838,727 36,049 3,899,998 (2,297,510 All grants extended to the Authority from 2011 to 07 March 2016 were treated as capital contribution in accordance with the circular issued by the Ministry of Public Enterprises of the Cabinet Decision No.
357 of 2012.

However, this circular was rescinded as per Cabinet Decision No.

59 of 2016.

As such, effective from 08 March 2016, the accounting treatment of grants/or special funding given to the Authority is in accordance with IFRS for SMEs.

Due to the treatment of Government grant as revenue in 2016, the Authority recorded a comprehensive loss of $42,717 compared to a loss of $2,297,510 in 2015.
Maritime Safety Authority of Fiji - Abridged Statement of Financial Position As at 31 December Cash & Cash Equivalents Held-to-maturity investments Trade and Other Receivables Prepayments and Deposits Inventory Property, plant & equipment (Non-current) Total Assets Trade and Other Payables Provision for employee entitlement Grants received in advance Deferred Income – Government grant Total Liabilities Net Assets 2016 ($) 5,545,905 2,820,311 555,437 63,537 150,400 8,861,337 17,996,927 543,832 119,497 299,614 1,065,879 2,028,822 15,968,105 2015 ($) 4,511,973 2,743,520 378,845 57,477 --- 8,675,442 16,367,257 242,003 114,432 --- --- 356,435 16,010,822 The decrease in net assets by $42,717 was largely due to the increase in liabilities.
The increase in liabilities was due to booking of grants received in advance and booking of deferred grant.

35 Increase in total assets were also noted which was largely due to increase in cash at bank, held-to- maturity investments and property, plant and equipment.
Other Significant Matters – 2016 i. Overstatement of Assets The Committee was informed that a letter was written to Ministry of Infrastructure and Transport dated 22nd June 2016, informing on the collapse of newly built light houses and if the remedial work could be carried out by the Ministry on its own cost.

To date only Cakau Momo Reef and Curacoa Rock has been restructured by MoIT.

No Official Correspondence has been received regarding the reconstruction.
Remedial action and reconstruction Remedial action and reconstruction of other lighthouse structures remains pending.

The expected useful life of a light structure is 50 years.

This is in accordance with the specification supplied with the design by DBGA.

Investigation was carried out by the gazette under water surveyor which identified the following root cause:  Structural base had no penetration in the sea bed  Based culverts were resting on the sea bed with gaps packed with sand bags.
 Pouring of concrete was through manual methods without using concrete pumps as a result concrete was not binded with aggregate due to concrete washing in the salt water as in was manually filled into the base.

 There was only a single „H‟ beam pile driven into the sea bed to hold the whole structure.

MSAF was consulted on the design phase and not on the construction phase which was entirely under Ministry of Infrastructure and Transport control.
MoIT is responsible for the structural failure as they were in-charge of the construction.

The Current leaning light houses have remained the same with no remedial work carried out.

The light is in operation; however the structure is not repaired and is not safe for access.

Remedial works were carried out of Curacoa Rock and Cakau Momo Reef Light via MoIT funds.

The cost of the re-construction was not disclosed.

The totally collapsed Light Houses remain under water and have not been replaced.
The initial cost of the Light House (Mouva Reef) was $197,450 and Narara Island Light were $193,326, however the replacement is pending.

As discussed with DBGA and Marine Structural Contractors, MSAF will review the designs and construction methodology.

In Additional MSAF will have independent check on the structural design.
There are multiple issues raised and MSAF is looking at the technicalities of the issues and will get the MSAF board to take into consideration of the issues and look at best practice.

We are currently reviewing all MSAF finance processes.

MSAF deliverables include invoices to Shipping Agents who are major contributors to MSAF revenue.

Ship Agents normal accounting practice is to invoice Principals on month end for payment os ships expenses.

Upon payment, shipping agents will clear accounts with MSAF.
ii.

Income Tax Exemption Status MSAF advised the Committee that a memorandum was written to the Permanent Secretary for Ministry of Economy from Permanent Secretary for Ministry of Infrastructure and Transport daed 22nd June 2018 for extension on Income Tax Exemption for MSAF from 2013 to 2018.

MSAF have had meetings with FRCA on to issue and the MSAF awaits the reply to correspondence between 36 Ministry of Economy ad Ministry of Infrastructure and Transport.
Approval on extension of Income Tax Exemption is granted by Ministry of Economy dated 10th December 2018. iii.

Establishment of Marine Spill Pollution Advisory Committee The Committee was informed that the current balance of Environment Levy Fund is $848,736.25 as of 31 August 2019 and in Term Deposit, the invested figure is $6.46m.

MSAF have written to the Line Ministry for the appointment of the Marine Spill Advisory Committee in 21st May 2018 and reminder letter was written on 7th January 2019.
Currently, no appointment has been made and MSAF will continue to pursue with the line Ministry on the appointment.

iv.

Incomplete Ships System Software Database The Committee was informed that old data fields were different compared to the new database field format.

For migration of old system to new system, data were manually entered where approximately 3000 ship entries by 15 fields in each.

The uploading for the remaining ships data has been completed.
MSAF is now using the database for its ships online survey approval process.

Training was conducted in phases with all relevant MSAF staffs to fully utilize the database by the Software Provider.

MSAF Database and Records staff does internal training to all MSAF offices located around Fiji.

This also includes trainings for newly recruited relevant staffs.

The version of the software is BMC Footprints Version 12.1.09 Build 44.9 installed in 2016.
The current version is useable for the intended purpose and version changes are not needed.

37 COMMITTEE RECOMMENDATION The Committee after conducted its consultations with all relevant entities covered on this audit report in relation to all audit issues that were raised have agreed to the following recommendations: 1.

The Committee recommends that improvements be made on the timely submission of the financial statements be done on timely basis and the quality of the report.

2.
2.

The Committee recommends the improvement on control weaknesses and deficiencies which can prevent severe disruption to achieve the audit objectives and comply with relevant legislation.

3.

The Committee recommends that all relevant information/records/risk register are properly kept for timely submission for audit.

4.

The Committee recommends that all financial statements be prepared in accordance with International Financial Reporting Standards and Medium-sized Entities (“IFRS for SMEs”).
38 CONCLUSION The Committee notes that the Auditor General has issued Unmodified (unqualified) opinions issued on 87% of the 2016 and 100% of the 2017 financial statements audited.

This is a positive reflection on the authorities.

However, the authorities need to give close attention to the deficiencies highlighted under other significant matters.

The Committee also emphasises on the timely preparation of quality draft annual financial statements.
This is one of the major issues which need to be addressed by those charged with governance of the authorities.

The involvement of line ministries in improving accountability in statutory authorities is noted.

However, there is room for further improvement through regular and active interaction with the authorities.

It has been noted that it becomes challenging for authorities to prepare annual accounts when these have not been done for some time resulting in a backlog.
Line ministries can encourage entities to prepare and submit draft financial statements for audit annually.

39 APPENDICES 40 APPENDIX 1: PUBLIC ACCOUNTS COMMITTEE QUESTIONS 41 QUESTIONS 2016/2017 Audit Report on Statutory Authorities 5.1 Public Rental Board Unallocated Government Subsidy What measures the Board has taken to ensure subsidy is allocated promptly and provide status of subsidy outstanding for 2017 and 2018?

Remainder Notices Not Issued What remainder notices sent on time now?
What is the process of sending the remainder notices?

5.2 Civil Aviation Authority of Fiji SIGNIFICANT FINDINGS - 2016 Enterprise Risk Management Does the Authority maintain a detailed risk register?

What is the process of identifying the Enterprise risk?

Anomalies in Consultancy Agreement What didn't the Authority see it useful to have a fixed timeline for the consulting work?

How does the Authority justify the actual cost of $150,975 against the estimated cost of $55,520?
Section 5.5 Investment Fiji Provide background of CRM system and how has it improved operation of Investment Fiji?

Section 5.6 Fiji Meats Industry Board Other Significant Matters The Committee notes that the Board is in the process of reviewing the Accounting Manual.

What is the process of the review, has it been completed and approved?

If yes, what are some new matters included in the reviewed manual?

If not, provide the reason(s) for not finalising the review.
The Board has been complying with the requirements of the Accounting Procedure Manual as far as procurement of goods and services were concerned.

Is the Board now complying with the Accounting Procedures Manual?

Please explain.

Is this issue repetitive in the 2017 audit?


(confirmation to be provided by the Office of the Auditor General) The Committee notes that changes in the approved prices for 'Magiti' sales were made without proper documented approval, rather changes are made based on verbal approvals given by the 42 Chief Executive Officer.

Has the Board addressed this issue?

Please explain and provide evidences of the documentation of the approval process of the changes in 'Magiti' prices.
Internal Controls The Assessment of the Board's internal controls noted significant deficiencies What has the Board done to strengthen internal controls?

How often does the Board review the internal controls and address weakness identified?
Timelines of draft financial statements The Committee notes that the draft financial statements were submitted for audit late (less than 30 days before legislative deadline) What were the reason(s) for the delay in submission and what mechanisms have the Board put in place to ensure that draft financial statements are submitted to OAG on time?
Quality of draft financial statements by Authorities The Committee notes that the extent of audit adjustments made to the draft financial statements indicates the ineffectiveness of the Board's internal review processes before the accounts are submitted for audit.

What has the Board done to strengthen the internal review processes before the accounts are submitted for audit to avoid undertaking substantial audit adjustments to rectify errors or misstatements?
Section 5.7 Fiji National Sports Commission What is the process of providing sporting grants?

How does the Commission ensure that the grant has met the objective of promoting sports in Fiji?

How is the international Coach's salary determined?

Section 5.8 Film Fiji GENERAL What is the quantitative benefit to the country from overseas Film Making for 2016, 2017 and 2018?

How many films making were done in 2016, 2017 and 2018?
SIGNIFICANT FINDINGS Lack of VAT Reconciliations 43 Are VAT reconciliation performed?

Provide evidence.

Section 5.11 LAND TRANSPORT AUTHORITY Errors in Draft Financial Statements submitted for Audit What measures the Authority has put in place to ensure that the draft financial statements submitted for Audit is free from errors?

Cashier Shortages What measures are there to ensure that cash is not misappropriated?
Section 5.13 FIJI ROADS AUTHORITY Lack of Reconciliation of Donated Assets What is the status of new ERP and Assets Management System?

Section 5.15 - Maritime Safety Authority of Fiji The audit of Maritime Safety Authority of Fiji for the financial year 2016 resulted in the issue of modified opinion or qualified audit opinion.
The qualification were as follows: Overstatement of Assets Note 2.14 - Impairment of Asset states that each reporting date Property, Plant and Equipment (PPE) of the Authority are reviewed to determine whether there is any indication that PPE have suffered an impairment loss.

As at the date of issue of audit, no impairment assessment of the Aids to Navigation (Lighthouse) which sustained major structural damages arising from the construction defects and Cyclone Winston was carried out by the Authority.
As a result, the Auditor-General was unable to ascertain the reasonableness and impact of it on the carrying amount of the PPE disclosed in Note 8 of the Financial Statements.

What steps that MSAF has taken to address this issue?

What is the timeline for completing this exercise?

The Ministry of Infrastructure and Transport (MoIT) constructed Lighthouse during the years 2013 to 2015 at a cost of $1,358,043.
The cost of construction of the Lighthouses was capitalized into the Property, Plant and Equipment of the Authority.

The Auditors noted that the Lighthouses constructed by MoIT from 2013 to 2015 have suffered structural failure whereby lighthouse have either leaned or totally collapsed this not in operation.

The lighthouse serves a very crucial role in aiding navigations of ships and without proper navigational lights there is a high risk of marine accidents.
For the benefit of the Committee, please briefly explain: 44 1.

What is the normal expected useful life of a light house?

2.

Significant cost was involved in the construction of the lighthouses.

Was any investigation carried out to identify the root cause of the structural failure?

What was the root cause of the structural failure?

Was MSAF consulted during the design and construction phase of the construction?

Who is responsible for the structural failure - MoIT or MSAF?

3.
3.

What is the current status of the leaned and structural damaged lighthouses?

Is it repaired and in operation?

What was the cost of the remedial work and who met the cost?

4.

What is the current status of the totally collapsed lighthouse?

Has it been replaced?

What was the cost of the replacements and who met the cost?

5.

What mechanisms are put in place by the MSAF to ensure that the above incident does not repeat in future?
Qualification 2 Not 18 - The Authority disclosed $795,144 as funds received and transferred to Governments Consolidated Fund Account (CFA).

However, the CFA Bank Statements revealed that out of the $795,144, the Authority had only transferred a total sum of $584,921.

In addition, the Authority has booked Relievable Amounting to $435,531 and Payable to Ministry of Economy amounting to $234,769 in the Statement of Financial Position.
The Authority did not prepare year-end reconciliations to support the above balances.

As a result, the Auditor-General was unable to ascertain the accuracy and completeness of these amounts disclosed in the financial statements What has the MSAF done to address this issue?

What internal controls have been implemented to ensure it is not repeated?
Income Tax Exemption Status Note 2.7 - Income Tax to the financial statements states that the Authority is exempted from income tax under Section 55 of the Maritime and Safety Authority of Fiji Act 2009 for the first three years commencing 1 January 2011.

Consequently, the tax exemption period should cease from 1 January 2014.

As at the date of issue of audit opinion, the Authority did not provide documentary evidences to support Note 2.7 and its continuous tax exemption status.
Has this issue been resolved?

If not, why not.

Establishment of Marine Spill Pollution Advisory Committee Section 155 of the Martine Transport Act 2013 establishes the Marine Spill Pollution Advisory Committee, to give advice to the Authority on the use of environmental levy.

As at the date of the audit was conducted, the Marine Spill Pollution Advisory Committee has not been established as required by the Marine Transport Act and the Marine (Pollution Levy) Regulation.

45 1.
45 1.

What is the current balance of the Environment Levy Fund?

2.

Why was there a significant delay in the appointment of the Marine Spill Advisory Committee?

What is the current status?

Incomplete Ships System Software Database The Authority invested a sum of $163,385 for the purchases and installation of a Ships System Database Software in 2015.

The development of the software was incomplete.


In the absence of the databases and required features, the new Ships System Database Software does not support the core function of Marine Investigation, Compliance and Enforcement.

The Authority carried that although all features of the new software have been installed, staff are unable to fully utilize them due to having insufficient vessel data and lack of knowledge pertaining to the software.
Transition to the new system had led to old vessel data not being transferred adequately hence staffs are now manually entering data into the system.

Significant period of time has lapsed since 2015.

For the benefit of the Committee, please briefly explain: 1.

What it took so long for the MSAF to implement and migrate the data?

2.

What is the current status of the Ships System Software Database?

3.

What the training provide by the Software Provider?

4.

What version of the Software is in use?


Software version changes, is it relevant to the needs of MSAF?

46