Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1697772833979.pdf (Fiji)
EXCELLENCE IN PUBLIC SECTOR AUDITING REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI Volume 2 Audit Report on General Administration Sector 2016 PARLIAMENT OF FIJI PARLIAMENTARY PAPER NO.100 OF 2017 EXCELLENCE IN PUBLIC SECTOR AUDITING REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI Volume 2 Audit Report on General Administration Sector 2016 CONTENTS Volume 1: Audit Report on the Whole of Government Financial Statements and Annual Appropriation Statement 2016 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 July 2016 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 Economy Ministry of i-Taukei Affairs Ministry of Defence, National Security and Immigration Ministry of Employment, Productivity and Industrial Relations Ministry of Foreign Affairs Office of the Auditor General Fijian 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 Department of Information Technology and Computing Services Ministry of Civil Service 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 Economy Ministry of I – Taukei Affairs Ministry of Defence, National Security and Immigration Ministry of Employment, Productivity and Industrial Relations Ministry of Foreign Affair Office of the Auditor General Fijian Elections Office Judiciary Parliament Independent Commissions Office of the Director of Public Prosecutions Ministry of Justice Fiji Corrections Service Ministry of Communications – Department of Information Department of Information Technology and Computing Services Ministry of Civil Service Ministry of Rural and Maritime Development and National Disaster Management Republic of Fiji Military Forces Fiji Police Forces REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ____________________________ Section 1 Office of the President Roles and Responsibilities Under the Constitution of the Republic of Fiji, the President is the Head of State and the Executive Authority of State.
The President is also the Commander-in-Chief of the Republic of Fiji Military Forces and performs ceremonial functions for the military in this capacity.

The President is also the Chancellor of the Order of Fiji and oversees the recognition of both citizens and non-citizens for their contributions at the community, national and international levels that help Fiji develop as a nation.

The President is apolitical and symbolizes national unity for all Fijians.
The President’s responsibilities include approving all Constitutional appointments, opening each annual session of Parliament with an address outlining the policies and programmes of the Government, assenting to Bills passed by Parliament receiving the credentials of foreign diplomats and conducting State Visits to strengthen Fiji’s diplomatic and foreign relations.

The President also maintains an active programme of community engagements.
The Office of the President’s primary role is to assist the President in fulfilling all constitutional, official and ceremonial obligations.

They provide direct policy advice on matters of national interest by providing a full range of administrative, protocol, domestic and landscape services on a daily basis.

The Office of the President also coordinates security services to the President through the Republic of Fiji Military Forces and the Fiji Police Force.
Table of Contents PART A: FINANCIAL STATEMENT ................................................................................................................................. 1 1.1 Audit Opinion ............................................................................................................................... 1 1.2 Statement of Receipts and Expenditure ..................................................................................... 1 1.3 Appropriation Statement ............................................................................................................. 2 PART B: AUDIT FINDINGS ............................................................................................................................................... 3 1.4 Anomalies noted in the Revolving Fund Account ....................................................................... 3 PART A: FINANCIAL STATEMENT 1.1 Audit Opinion The audit of the 2016 accounts of the Office of the President resulted in the issue of a qualified audit report.
The basis for the qualified opinion is that prior year balances in the Revolving Fund Account totalling $776,847 were cleared by posting to various expenditure allocations without adequate supporting documents being provided to audit, thus overstating expenditure of the Office in the current period by the same amount.
1.2 Statement of Receipts and Expenditure The Office of the President recorded revenue totalling $676 and incurred expenditure totalling $1,784,193 for the seven months period ended 31 July 2016.

Refer to Table 1.1 for details.
Office of the President Section 01: Page 1 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ____________________________ Table 1.1: Statement of Receipts and Expenditures for 2016 Description REVENUE State Revenue Total Revenue EXPENDITURES Operating Expenditure Established Staff Government Wage Earners Travel & Communications Maintenance & Operations Purchase of Goods & Services Total Operating Expenditure Capital Expenditure Capital Construction Capital Purchase Total Capital Expenditure Value Added Tax TOTAL EXPENDITURES 2016 ($) 676 676 2015 ($) 1,416 1,416 380,706 111,735 866,952 265,878 118,421 1,743,692 --- --- --- 40,501 1,784,193 653,316 194,920 370,396 519,975 172,270 1,910,877 1,381,386 157,999 1,539,385 377,541 3,827,803 The financial year end for Government was changed from 31 December to 31 July in accordance with the Financial Management (Amendment) Act 2016.
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.

Travel and communication costs increased by $496,556 or 134% in 2016 compared to 2015.

This was mainly due to retirement of previous year balances from the Revolving Fund Account.
In addition, the proposed capital projects for 2016 could not be implemented due to Cyclone Winston and change in government financial period.

1.3 Appropriation Statement The Office of the President incurred expenditure totalling $1,784,193 in 2016 against the budget of $3,428,146 resulting in savings of $1,643,953 or 48%.

The large savings was due to the budget being for the whole of 2016 while expenditures were only for seven months up to 31 July 2016.
Details of expenditures against the budget estimates are provided in Table 1.2.
Table 1.2: Appropriation Statement for 2016 SEG Item Budget Estimate ($) Changes ($) Established Staff Government Wage Earners Travel & Communication Maintenance & Operations Purchase of Goods & Services Total Operating Expenditure 649,621 230,604 311,900 483,400 157,400 1,832,925 (242,000) (100,000) 576,384 (202,600) (31,784) --- Revised Estimate ($) a 407,621 130,604 888,284 280,800 125,616 1,832,925 Actual Expenditure ($) b 380,706 111,735 866,952 265,878 118,421 1,743,692 Lapsed Appropriation ($) (a-b) 26,915 18,869 21,332 14,922 7,195 89,233 Office of the President Section 01: Page 2 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ____________________________ SEG Item Budget Estimate ($) Changes ($) Revised Estimate ($) a Actual Expenditure ($) b Lapsed Appropriation ($) (a-b) 8 Capital Expenditure Capital Construction Total Capital Expenditures 1,384,821 1,384,821 13 Value Added Tax 210,400 TOTAL EXPENDITURE 3,428,146 --- --- --- --- 1,384,821 1,384,821 --- --- 1,384,821 1,384,821 210,400 40,501 169,899 3,428,146 1,784,193 1,643,953 PART B: AUDIT FINDINGS 1.4 Anomalies noted in the Revolving Fund Account Travel advance allocation is used to record all the travel advances made for all official travel.
The travel advance shall be charged to the advances account until cleared through submission of the acquittals.1 The Revolving Fund Account allocation (1-01101-01101-570301) for the Office had a debit balance of $3.25 as at 31/07/16, a decrease of $776,847.06 when compared to the 2015 closing balance.

Refer to Table 1.3 for travel advance balances in the account for the past five years.

Table 1.3: Revolving Fund Account Balance over the five year period.
Ending Balances 2016 (31/07/16) 2015 2014 2013 2012 Amount ($) 3.25 776,850.31 746,326.03 146,818.31 42,851.66 The audit noted the following anomalies:  Journal vouchers shall be used to correct accounting errors and make other required transfers between accounts.2 Journal vouchers must be numbered in sequential order.

Supporting documents shall be attached to the voucher.3 The Accounts Officer or Senior Assistant Secretary must check that: i. ii.

iii.
iii.

all relevant details are included on the voucher; balances are adequately supported; and the correct accounts have been debited or credited Journal vouchers totalling $832,424.99 were raised to clear the outstanding balances in the Revolving Fund Account which were brought forward from previous years.
It was noted that 1 Office of the President Finance Manual 2015 Section 10.1.9 2 Office of the President Finance Manual 2015 Section 16.1.1 3 Office of the President Finance Manual 2015 Section 16.1.3 Office of the President Section 01: Page 3 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ____________________________ journal vouchers were not adequately supported with relevant supporting documents to substantiate the adjustment.

Refer to Table 1.4 for details.
Table 1.4 Details of JVs used to clear Accountable Advance Particulars Mispostings - RFA/ Retirement Petty Cash Mispostings - RFA/ Retirement Petty Cash Clear 2013 - 2015 Balance-JV 07/16 Clearance of advance balances Clearance of advance balances Total Date of Adjustment Amount ($) 31/07/16 31/07/16 31/07/16 31/01/16 30/06/16 48,885.44 6,689.24 733,246.37 31,554.27 12,049.67 832,424.99 The clearance of the balance without adequate supporting documents indicates lack of supervisory checks and controls in the Accounts Section which could result in unauthorised adjustments.
In addition, the clearance of previous year’s balances from the current year’s budgetary allocation has resulted in expenditure in the Statement of Receipt and Expenditure as at 31 July 2016 being misstated.

 The Senior Assistant Secretary, Principal Assistant Secretary or Official Secretary must not certify a payment as correct unless they are satisfied that the expenditure account it is charged to is correct.
4 By nature Revolving Fund Account should contain transactions relating to travel advances which are cleared within seven days.

The audit noted in 2016, a sum of $55,577.93 was debited in the Revolving Fund Account of which $48,531.22 or 87% was related to procurement of goods and services.

It was noted that this was done due to unavailability of funds in the relevant expenditure allocations.
Channelling the procurement of goods and services from the Revolving Fund Account indicates circumvention of standing government finance policies and regulations.

The above anomalies indicate absence of proper management of the Revolving Fund Account and lack of proper supervisory checks being carried out.
Recommendations The Office should ensure that:  Journal Vouchers raised are properly supported with relevant documents before it is posted into the general ledger;  all accountable advances issued are retired within the stipulated timeframe and the  relevant expenditure allocation is debited; the use of accountable advance allocation is restricted to recording of travel advances; and  underline accounts are not used to make procurements of goods and services.
If the need arise for additional funds in a SEG/allocation, the Office should consider applying for virement to transfer the funds between the SEGs or seek additional funding from Ministry of Economy.

4 Office of the President Finance Manual 2015 Section 2.8.4.v Office of the President Section 01: Page 4 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ____________________________ Management Comments The Office acknowledges the findings and recommendations with appreciation.
The issues arose because of a series of factors including the absence of a dedicated accounts officer position and a fully-fledged accounts section for 16 years up to 2014; the lack of institutional strengthening and capacity- building leading to the serious lack of financial management capabilities; and among other things, the absence of a dedicated space for accounting records.
However, to address the issues raised and, importantly, to ensure that they do not recur, the Office has implemented a major re-organisation including establishing a dedicated Accounts Officer position; creating a fully-fledged accounts section with three accounting staff; recruiting qualified and experienced accounting staff; and creating a dedicated and secure space for the management and safekeeping of accounting records.

The Office undertook a lot of developments from 2012 to-date.
These developments are a significant transformational shift that will ensure the Office of the President manages its finances in accordance with the Finance Management Act and Financial Instructions.

Following the clearance of all the outstanding accounts in 2016 with the support of the Ministry of Economy, the Office is determined to ensure that the issues highlighted by the Auditor-General will not recur.
The Office’s focus now is on continuous learning and increased monitoring of accounting procedures to ensure compliance.

Office of the President Section 01: Page 5 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 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 Govern ment 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 Cabinet.
It liaises with and seeks input from Government Ministries to provide the Prime Minister with policy advice.

Under the Prime Minister’s guidance, the OPM’s work includes but is not limited to projects of particular priority for Government, such as rural and outer island development, small and community grant projects and the development of specific industries which require a national focus.
Table of Contents PART A: FINANCIAL STATEMENT ........................................................................................................................................ 1 1 2.1 Audit Opinion 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 ..................................................................................................................................................... 4 2.5 Advance Payment 4 2.6 Anomalies in Operating Trust Account....................................................................................................................... 5 2.7 Visa Card Expenses not acquitted ............................................................................................................................... 6 2.8 Capital Projects Undertaken by RFMF under the Small Grants Scheme .................................................................... 8 2.9 Anomalies noted in Mahogany Industry Council Trust Fund Account ..................................................................... 14 Appendix 2.1: Trust Fund Account for 2016 - Chinese Grant .......................................................................................... 16 Appendix 2.2: Trust Fund Account for 2016 – Taiwan Grant .......................................................................................... 16 Appendix 2.3: Trust Fund Account for 2016 – Retention Fund ........................................................................................ 17 Appendix 2.4: Trust Fund Account for 2016 – Mahogany Industry Council Fund ............................................................ 17 PART A: FINANCIAL STATEMENT 2.1 Audit Opinion The audit of the 2016 accounts of the Office of the Prime Minister resulted in the issue of an unqualified audit report.
However, attention was drawn to the Mahogany Industry Council Trust Fund Statement of Receipts and Payments which includes receipts for License fees of $1,110,987.

It was noted that monthly reconciliations were not performed between the logs harvested/ sold by Fiji Hardwood Corporation Limited and the fees collected for licenses issued.

In addition, the Council was yet to determine the total receivables for the Trust Fund Account as at 31 July 2016.
Office of the Prime Minister Section 02: Page 1 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ____________________________ 2.2 Statement of Receipts and Expenditure The Office of the Prime Minister recorded revenue totalling $47,664 and incurred expenditure totalling $5,964,743 for the seven months period ended 31 July 2016.

Refer to Table 2.1 for details.
Table 2.1: Statement of Receipts and Expenditure for 2016 Description RECEIPTS 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 Capital Expenditure Capital Grants & Transfers Total Capital Expenditure Value Added Tax TOTAL EXPENDITURE 2016 ($) 2015 ($) 47,664 47,664 954,654 954,654 1,464,308 275,447 813,869 478,457 146,342 512,690 146,605 3,837,718 2,036,944 2,036,944 90,081 5,964,743 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 12,553,160 The financial year end for Government was changed from 31 December to 31 July in accordance with the Financial Management (Amendment) Act 2016.
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.

Travel and Communication expenditure for the financial period ending 31 July 2016 amounting to $813,869 mainly consisted of costs related to the official local/overseas engagements for the Honourable Prime Minister as the Head of State and his entourage.
The Capital Grant and Transfer expenditure for the financial period ending 31 July 2016 was $2,036,944.

The reduction in the expenditure was mainly due to the management’s heavy involvement in Cyclone Winston rehabilitation work, short financial period and the tender processes involved for implementation of planned projects.
2.3 Appropriation Statement The Office of the Prime Minister incurred expenditure totalling $5,964,743 in 2016 against the revised budget of $15,499,425 resulting in a savings of $9,534,682.

The large savings was due to the budget being for the whole of 2016 while expenditures were only for seven months up to 31 July 2016.

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 – JUNE 2017 ____________________________ Table 2.2: Appropriation Statement for 2016 SEG Item Operating Expenditure Established Staff Government Wage Earners Travel & Communication Maintenance & Operations Purchase of Goods & Services Operating Grants & Transfers Special Expenditure Total Operating Costs Capital Expenditure Capital Grants & Transfers Total Capital Expenditure Value Added Tax TOTAL EXPENDITURE Budget Estimate ($) Appropriation Changes ($) Revised Estimate ($) Actual Expenditure ($) Lapsed Appropriation ($) 2,936,529 537,276 2,207,720 783,700 429,900 815,000 258,100 7,968,225 7,200,000 7,200,000 331,200 15,499,425 --- --- (105,000) (95,000) 109,007 --- 90,993 --- 2,936,529 537,276 2,102,720 688,700 538,907 815,000 349,093 7,968,225 --- --- --- --- 7,200,000 7,200,000 331,200 15,499,425 1,464,308 275,447 813,869 478,457 146,342 512,690 146,605 3,837,718 2,036,944 2,036,944 90,081 5,964,743 1,472,221 261,829 1,288,851 210,243 392,565 302,310 202,488 4,130,507 5,163,056 5,163,056 241,119 9,534,682 2.4 Trust Fund Account Statement of Receipts and Payments The Office of the Prime Minister maintains the following Trust Fund Accounts: 1.
Chinese Grant Trust Fund Account – records grants that are provided by the Chinese Government to the Fiji Government through bilateral agreements.

The grant agreement outlines the purpose and conditions for the utilisation of the funds.

The balance in this account as at 31 July 2016 was $360,930.

Refer to Appendix 2.1 for details.

2.

Taiwan Grant Trust Fund Account – records grants that are provided by the Taiwanese Government to the Fiji Government through bilateral agreement.
The grant agreement outlines the purpose and conditions for use of the funds.

Balance in the account as at 31 July 2016 was $50,080.

Refer to Appendix 2.2 for details.

3.

Retention Fund Account – maintains retention funds for various projects as per conditions of the contract agreements.

Funds held in this account will be paid out to contractors when certificate of completion is submitted and all conditions of the contract agreement have been met.
Balance in the account as at 31 July 2016 was $953,810.

Refer to Appendix 2.3 for details.

4.

Mahogany Trust Fund Account – records proceeds from mahogany licenses which are received monthly from mahogany license holders.

This account was previously maintained by the Treasury Section of Ministry of Economy and was transferred to Office of the Prime Minister in August 2015.

Balance in this account as at 31 July 2016 was $2,068,910.Refer to Appendix 2.4 for details.
Office of the Prime Minister Section 02: Page 3 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ____________________________ PART B: AUDIT FINDINGS 2.5 Advance Payment An advance is a transfer of cash to finance the provision of goods, services or works not yet delivered.1 Advance payment in Government is synonymous with travel advances, pro forma invoice; executed contracts and any form of payment made to suppliers prior to the delivery or completion of goods, services or works.2 The Office of the Prime Minister (OPM) signed an agreement with Water Authority of Fiji (WAF) on 13/06/16 for water supply works project to be carried out at Natutale Primary School and Wauosi Nursing Station.
An advance payment of $146,000 was paid to Water Authority on 20/06/16 through cheque number 83133.

The audit noted that the project commencement and completion date was not stated in the signed agreement and as at the date of audit (21/11/16) works were yet to commence.

According to the OPM, the delay was attributed to the WAF’s work load and schedule.

Delay in executing the project defeats the objective of the advance payment made to the Authority.
Recommendation The OPM should follow up with the Water Authority of Fiji on project status and strategies to expedite the project commencement and completion.

Management Comments The office has noted the audit recommendation.

For the Natutale Primary School and Wauosi Nursing Station, the WAF undertook a reassessment of the project in September 2016.

OPM had been consistent in following through with the WAF representatives on the project implementation since the deposit of the cheque on 22 June 2016.
The initial assurance was given on September 29, 2016 that the survey and estimate has been completed and WAF was preparing a business case to be discussed in the project appraisal committee, they further advice that once the business case is approved they will work in implementing the Project.

On 14 November 2016, the WAF had advice that the project is expected to start late November 2016(in-house) or if outsource than it was forecasted for February 2017 and it was yet to be approved.
From the December 16, 2016 follow-up, WAF a business case was submitted to the Project Quality Assurance Team, from their vetting had requested technical details and upon resubmission approval was expected by the end of December 2016.

Another follow-up on February 13, 2017 and the WAF response dated 20 February 2017 advice that the Project was approved in principle and were on the verge of tendering out the project.
1 Advance Payment Policy 2013 – Section 2.1 2 Advance Payment Policy 2013 – Section 2.2 Office of the Prime Minister Section 02: Page 4 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ____________________________ WAF Tender process began on 8 March 2017 and anticipates to award the Contract by the 1st week of May 2017, the work to commence on the last week of May 2017.
As to date – The project construction will commence on 9 June 2017, approximately 3 to 4 weeks construction and the commissioning date is scheduled on 31 July 2017.

OPM will follow through with WAF for a monthly report and quarterly verification will also be undertaken based on the report.
As for the existing Memorandum of Agreement (MOA), WAF is expected to submit the followings:  within two weeks at the completion of the project a report to be submitted; and  within one month of the completion of the project a financial acquittal report to be submitted .
2.6 Anomalies in Operating Trust Account Trust money is money that the agency is holding in trust (it does not include creditor payments such as salary deductions or money that is held in a separate “trust fund” which is not a true trust).
As stipulated in the Act and Finance Instructions, trust money is to be kept in a separate bank account and accounted for separately from “public money” and “other money”.3 Audit review of the Operating Trust Account reconciliations showed that the OPM was maintaining and administrating two trust fund accounts namely the Sporting Trust Fund (1-02101-02101-899988) and Miscellaneous Trust Fund (1-02101-02999-899988) which had closing balance of $577,456 and $62,795, respectively.
 The Sporting Trust Fund account was transferred from Ministry of Youth and Sports to the OPM in 2012 on the directive of the Honourable Prime Minister.

The account was primarily used to retain funds received from corporate bodies for sports sponsorship before the OPM distributes the amount to the relevant sporting bodies.
Upon clearance of the sponsorship amount by the OPM to the relevant sporting bodies, two and half percent of the total fund received was retained in the Sports Trust Fund Account to assist minor sporting bodies on the approval and directive of Honourable Prime Minister.

However, it was noted that payment has not been made from the funds retained since 2012.

As at the date of audit4 the OPM was in the process of establishing Standing Operating Procedures/policy (SoPs) on the utilization of the fund.
The funds kept in this account constitute trust monies paid by sponsors, other non-government organisations and business enterprises for specific purposes and does not originate from the Government thus constitute trust money similar to trust money maintained in the Fund 9 FMIS general ledger.

 The Miscellaneous Trust Fund account was used primarily to retain proceeds from the sales of books namely “The Three Legged Stool” and “Ratu Sukuna Biography”.
Details of when the account was opened was not available at the OPM.

Therefore, the purpose of the fund and how it should be utilized could not be determined.

There has been no movement in this account for the seven months period ending 31 July 2016.
3 Pro – forma Finance Manual – Part 15 – Paragraph 1 4 27/01/17 Office of the Prime Minister Section 02: Page 5 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ____________________________ In absence of a proper documentation and policy guidelines on the use of the trust accounts, the objectives of the trust accounts may not be clearly understood and achieved.
Recommendations The Office should:  formulate SoPs on utilization of the funds in held in the trust accounts;   consider transferring the two trust accounts to the Main Trust general ledger under Fund 9 in the FMIS with separate bank accounts; and re-consider the need to maintain the Miscellaneous Trust account for proceeds from sale of books.

Management Comments The Office has noted the audit recommendation.
Sporting Trust Fund The Office has been liaising with Ministry of Economy and Ministry of Youth and Sports for the establishment of a separate Trust Account for Sporting Trust Fund which is currently held under the Operating Trust.

In a meeting with the Chief Accountant of Ministry of Economy, the Office has been informed to formulate a guideline for the Trust Account and establish a trust deed to open a new trust account.
The Office has been liaising with Ministry of Youth and Sports to formulate a draft framework outlining the guidelines for the Fund especially for minority Sports.

The last consultation with Ministry of Youth and Sports was in March 2017 and we anticipate new guidelines for the funds by 31 July 2017.
In the absence of the policy guidelines for the Sporting Trust Fund, the Office has a standard operating procedure for the payment process Miscellaneous Trust Account – “The Three Legged Stool” and “Ratu Sukuna Biography” Funds are currently sitting in this trust Account due to lack of information on the process involved regarding its establishment.

The Office is currently gathering information in regards to the purpose and the establishment of the Account.
From records gathered it was noted that the account was established on 9th November, 1973.

The status of the account will be determined once accurate and relevant information for the account is obtained so that funds can be transact to its correct allocation.

The office will consult Chief Accountant, Ministry of Economy and SG’s Office on how best to manage the funds.
2.7 Visa Card Expenses not acquitted Credit card maintenance and monitoring is the responsibility of the Accounting Head within each ministry and department.5It is the responsibility of the designated reconciliation clerk within each ministry and department to examine and reconcile the credit card bank statement and the individual receipts produced by the card user on a monthly basis.6 5 Credit Card Policy 2016 – Section 6.1 6 Credit Card Policy 2016 – Section 7.1 Office of the Prime Minister Section 02: Page 6 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ____________________________ Any transaction appearing on the credit card bank statement that is not supported by a signed receipt is to be personally reimbursed by the card holder 7 days upon return.
Proper justification needs to be provided to the reconciliation clerk and the accounting head to support the non-availability of the receipt.7 The visa card with a credit limit of $50,000 is used to cater for the Honourable Prime Minister’s accommodation and incidental expenses while on official trip overseas.
Audit review of reconciliations for the Visa card account revealed that visa card expenses amounting $6,492.11 were cleared without acquittals/invoices from overseas suppliers contrary to Section 7 of the Credit Card Policy 2016.

Refer to Table 2.3 for details.

Table 2.3: Details of Unsupported Payments Date 19/02/16 Cheque No.
82785 Company A 20/06/16 83132 Company A Total Payee Description Being PM's visa card top up for the month of December 2015 & January 2016 Being PM's visa card top up for the month of May 2016 Amount ($) 9,428.16 Unacquitted Amount ($) 3,368.87 14,721.26 2,699.41 24,149.42 6,068.28 According to the Principal Accounts Officer, the above charges were accidently debited to the Office credit card and a refund was being arranged.

However, as at the date of audit8 refund was yet to be received.
The audit finding indicates control weaknesses in the administration of the credit card payments which may result in payments being made for fraudulent transactions.
Recommendations The Principal Accounts Officer must ensure that:   individual receipts for payments made through the credit card are submitted to the Accounts Section within seven days of return from a trip; immediate action is taken to recover any incorrect charges made to the credit card; and  necessary arrangement is made for refund of the amount incorrectly charged.

Management Comments The office has noted the audit recommendations.
Tabulated below are the responses on issues raised: Date 19/02/16 Cheque No 82785 Payee Description Company A Being PMs visa card top up for the month of 2015 & December Amount ($) 9,428.16 Un-acquitted Amount 3,368.87 Response The un-acquitted amount of $3,368.87was the result of visa Card 7 Credit Card Policy 2016 – Section 7.3 8 30 January 2017 Office of the Prime Minister Section 02: Page 7 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ____________________________ Date Cheque No Payee Description Amount ($) Un-acquitted Amount Response January 2016 that scam worldwide.
happens The Bank has been about informed the transaction fraudulent and the Office has requested for the refund of $3,368.87.

OPM has an on-going discussion with the Bank for this issue.

20/06/16 83132 Company A Being PM’s visa card top up for the month of May 2016 14,721.26 2,699.41 The Hon.
Prime Ministers are Secretary/PSO the following up on balance refund of amounting to $2,699.41 2.8 Capital Projects Undertaken by RFMF under the 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.9 The ultimate aim of the Scheme is to empower the beneficiaries to be self-sustainable through working in partnership with the Government and ultimately taking full ownership of projects that actually originated from them.
The Small Grants Scheme has largely assisted communities in the areas of Education, integrated village development, youth development, women’s groups and minority group settlement development The Office of the Prime Minister (OPM) and the Republic of Fiji Military Forces Engineers Regiment entered into a 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:  Inspect and submit monthly work progress report to the Permanent Secretary, Office of the Prime Minister on the fifth 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 utilized on the project by the Republic of Fiji Military Forces Engineers Regiment.
9 Office of the Prime Minister, Official Website – www.pmoffice.gov.fj Office of the Prime Minister Section 02: Page 8 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ____________________________  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.10 In 2015, the OPM awarded the Republic of Fiji Military Forces Engineers Regiment to carry out 11 projects related to renovation and construction of new classroom/building and teacher’s quarters totalling $1,385,360.21.
Audit review of these projects revealed that four projects worth $425,427.73 were incomplete as at the date of audit and for some of the completed projects, monthly progress reports, financial acquittal, completion certificate and engineer’s certificate were yet to be submitted to the OPM.
Refer to Table 2.4 for details: Table 2.4: Construction Projects undertaken by RFMF Project Name Location Completed Projects Assistance Voivoi Kindergarten – Legalega, Nadi Completion of the partly constructed Voivoi Kindergarten Building Project Cost ($) 56,560.75 Batirilagi Primary School – Macuata, VanuaLevu of Construction 1X2 teachers quarters and 1X4 classroom block for Batirilagi Primary School 247,804.57 Nailagotabua Primary School – Naloto, Verata, Tailevu Annesly Primary School - Toorak, Suva Napuka Cakaudrove, Vanualevu - Vugalei District School – Tailevu 80,871.40 158,923.85 147,808.55 involved Primary Nailagotabua School the renovation of five school five building teachers’ quarters.
and Construction of a 1 X 5 Classroom at Annesly Primary School Napuka - Construction of 1 x 3 concrete classroom block and 1 x 2 Bedroom Teacher Quarters Renovation of School Building 209,774.43 Remarks in December 2015 The project was completed commissioned on 27/01/16.

However,  financial acquittal report was not submitted by the RFMF to the OPM.

completion/Engineers certificate was pending from RFMF.
 The project was completed However,  monthly progress reports were not submitted by in November 2016.

 RFMF to the OPM.

completion/Engineers certificate was pending from RFMF.

The project was completed However,  monthly progress reports were not submitted by in September 2016.

RFMF to the OPM.

 completion/Engineers certificate was pending.

Project had been completed in September 2016 and commissioned on 22/11/16.

However, monthly progress reports were not submitted by RFMF to the OPM.
The project was completed in December 2015 and commissioned in January 2016.

However,  financial acquittal report was not submitted by the RFMF to the OPM.

 completion/Engineers certificate was pending.

Project was completed and commissioned November 2016.
However,  monthly progress reports were not submitted by in 10 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 Office of the Prime Minister Section 02: Page 9 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ____________________________ Project Name Location Assistance Project Cost ($) Remarks RFMF to the OPM.
completion/Engineers certificate was pending.

 58,188.93 The project was completed by December 2015 and commissioned on 29/01/16.

However,  financial acquittal report was not submitted by the RFMF to the OPM.

completion/Engineers certificate was pending.


Filimoni Rt Memorial School Sorokoba, Ba – Rt Filimoni Memorial School - Construction of Walkway, Fencing and Renovation Works Total Completed Projects 959,932.48  On-Going Projects Ba Methodist High School – Ba Renovation works barracks female mess at hall Methodist High School to and Ba 50,519.16  The project was 85% complete as at 31/12/15.
Due to Tropical Cyclone Winston, the Mess Hall sustained extensive damages which the OPM is currently resolving to address.

Naivicula District School – Tailevu Renovation of school building and construction 1X2 bedroom teachers quarters at Naivicula District School  Monthly progress reports were not submitted.

156,812.00  The project was 70% complete as at 31/12/16.

The project was on hold due to redeployment of RFMF troops after Tropical Cyclone Winston.
 According to the Project Officer at OPM the pending work has recommenced and scheduled to be completed by end of February 2017.

 Monthly progress reports were not submitted.

Ratu Luke Primary School – Bua Renovation of Ratu Luke Primary School 99,388.96  The project was 85% complete as at 31/12/16.

The project was on hold due to redeployment of RFMF troops after Tropical Cyclone Winston.

According to the Project Officer at OPM the work was scheduled to re-commence from February 2017.
 Monthly progress reports were not submitted.

Holy Family Primary School – Macuata, Vanua Levu Construction of 1 X 4 Block Classroom & Renovation to school buildings for Holy Family Primary School 118,707.61  The project was 75% complete as at 31/12/16.

 According to the Project Officer at OPM the work was scheduled to re-commence from February 2017.

 Monthly progress acquittal reports were not submitted by RFMF to the Office.
Total On-Going Projects Grand Total 425,427.73 1,385,360.21 Office of the Prime Minister Section 02: Page 10 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ____________________________ According to the OPM, the delay in the completion of the project and submission of the progress/acquittal report was due to the redeployment of staffs and resources to the Tropical Cyclone Winston rehabilitation works.
Non-submission of the monthly progress reports by the RFMF indicates the project was not vigorously followed-up by the OPM.

In absence of the acquittal records and engineers report it could not be ascertained if the funds were used for its intended purpose and required building standard was complied.

Recommendation The OPM should follow up the pending documents from RFMF and keep track of on-going capital projects to ensure its timely completion.
Management Comments The office has noted the audit recommendation.

Completed Projects For the seven (7) completed projects the RFMF has confirmed the submission of the outstanding Financial Acquittals by April 2017.
COMPLETED PROJECTS Project Name, Location Assistance Project Cost ($) Remarks Voivoi Kindergarten, Legalega, Nadi Completion of the partly constructed Voivoi Kindergarten Building Batirilagi Primary School, Macuata, Vanua Levu Construction of teachers 1x2 quarters and 1x4 classroom block for Batirilagi Primary School 56,560.75 The project was completed in December 2015 commissioned on 27/01/16.
However;  Financial acquittal report was not submitted by the RFMF to the OPM  Completion/Engineers certificate was pending from RFMF.

247,804.57 The project was completed in November 2016.

However;  The monthly progress reports was not submitted by RFMF to the OPM  Completion /Engineers certificate was pending from RFMF.
Nailagotabua Primary School Naloto, Verata, Tailevu - in Nailagotabua Primary School involved the renovation of five school building and five teachers quarters Office of the Prime Minister 80,871.40 The project was completed in September 2016.

However;  The monthly progress reports were not submitted by RFMF to the OPM.

 Completion/Engineers certificate was pending.

DCFO Response as at 29 March 2017  RFMF will submit the financial acquittal to OPM by July 2017.

 Project was commissioned by the Hon.


Prime Minister on 25.02.17  Completion Certificate from RFMF.

received  RFMF will submit financial acquittals to OPM by 31 July 2017 .

 RFMF has submitted financial acquittals to OPM on 04/11/16.

 RFMF has submitted acquittals for Admin, contingency and ration cost.
They are working on the acquittals for Section 02: Page 11 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ____________________________ COMPLETED PROJECTS Project Name, Location Assistance Project Cost ($) Remarks Annesley Primary School, Toorak, Suva Construction of a 1x5 classroom at Annesley Primary School 158,923.85  Project had been in September completed 2016 and commissioned on 22/11/16.

However, the monthly progress reports were not submitted by RFMF to the OPM.
Napuka Cakaudrove, Vanualevu Napuka of construction 1x3 concrete classroom block and 1x2 bedroom teachers quarters 2015 147,808.55 The project was completed in December and commissioned in January 2016.

However;  Financial acquittal report was not submitted by the RFMF to OPM.
Vugalei District School, Tailevu Renovation school building of Ratu Filimoni Memorial School Sorokoba, Ba – Filimoni Ratu Memorial School – Construction of walkway, fencing renovation and works  Completion/Engineers certificate pending.

209,774.43 Project was completed and in November commissioned 2016.

However;  The monthly progress report was not submitted by RFMF to the OPM.

 Completion/Engineers certificate was pending.

2015 58,188.93 The project was completed by and 29/1/16.
December commissioned However;  Financial acquittal report was not submitted by the RFMF to the OPM  Completion /Engineers certificate was pending DCFO Response as at 29 March 2017 the building materials and will submit by the end of June 2017.

 RFMF has submitted acquittals for Admin, contingency and ration cost.

They are the working on the acquittals for building materials and will submit by the end of June 2017.

 RFMF will submit the financial acquittal by end of June 2017.


 Acquittal was received at OPM in November 2016.

It was assessed and to RFMF returned Engineers.

 RFMF will resubmit the financial acquittal to OPM by June 2017.

Total Completed Projects 959,932.48 Ongoing Projects As for the four (4) ongoing projects, one is completed and three are currently ongoing.
The Desk Officers will follow-up with the RFMF on a monthly progress report of the projects together with the Financial Acquittals at the end of the project.
ONGOING PROJECT Project Name, Location Assistance Ba Methodist Renovation Office of the Prime Minister Project Cost ($) 50,519.16 Remarks  The project was 85% DCFO Response as at 29th March 2017  Report has been Section 02: Page 12 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ____________________________ ONGOING PROJECT Project Name, Location High School, Ba Naivicula District School, Tailevu Assistance Project Cost ($) Remarks works to female and barracks mess hall at Ba Methodist High School Renovation of school building and construction of 1x2 bedroom teachers quarters Naivicula District School at complete as at 31/12/15.
Due to Tropical Cyclone Winston, the mess hall sustained extensive damages which the OPM is currently resolving to address.

 The project was 70% completed as at 31/12/16.

The project was on hold due to redeployment of RFMF after troops Cyclone Tropical Winston.

156,812.00 work  According to the Project the Officer at OPM has pending and recommended scheduled be completed by end of February 2017. to  DCFO Response as at 29th March 2017 received.
RFMF The engineers will be submitting a report to OPM by June 2017 .

 RFMF has that confirmed project was completed by May and will 2017 the submit financial acquittal by end of June 2017.

Ratu Luke Primary School, Bua to Renovation Ratu Luke Primary School 99,388.96  Monthly progress reports were not submitted.

 The project was 85% completed as at 31/12/16.

The project was on hold due to redeployment of RFMF after troops Tropical Cyclone Winston.
 Renovation work is 95% in progress and is scheduled to be completed by end of June 2017.

 According to the Project Officer at OPM the work was re- commence from February 2017. scheduled to 118,707.61 Holy Family Primary School, Macuata, Vanua Levu Construction of 1x4 classroom block & to renovation school building for Holy Family Primary School scheduled  The project was 75% completed as at 31/12/16.

 According to the Project Office at OPM the work was re- commence from February 2017.
 Monthly progress acquittal reports were not submitted by RFMF to the Office.

to  The project was commissioned by the Hon.

Prime on Minister 23.02.17.

 Acquittals will be by June submitted RFMF by 2017.

Total On-Going Projects Grant Total 425,427.73 1,385,360.21 As the way forward for OPM projects engagement under the RFMF: i.

A Memorandum of Agreement (MOA) signed between the two parties for the transfer of the Small Grant Schemes project fund to the RFMF Trust Accounts.
Office of the Prime Minister Section 02: Page 13 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ____________________________ ii.

The MOA to include the timeline for the undertaking of the project from the start date to the completion date.

iii.

Monthly reconciliation is undertaken for each project and a copy send to the Ministry of Economy iv.

v. vi.

from the RFMFER.

A Monthly Physical & Monthly Report to be submitted on the 7th working day of the new month from the RFMFER.
A quarterly monitoring will be undertaken by the DCFO Desk Officers in verifying projects implementation progress on the ground.

A final project report to be submitted 4 weeks after the completion of the project together with the financial acquittal report to OPM.

The MOA to include the timeline for the undertaking of the project from the starting date to the completion date.
2.9 Anomalies noted in Mahogany Industry Council 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 should be signed by the responsible officer.
Un-reconciled items must be investigated and resolved promptly.11 In performing its functions, the Council has the power to determine how the proceeds of sale of mahogany timber are to be distributed or used, including the amounts that are to be paid to the State, as reimbursement of costs incurred in connection with the mahogany industry or for use in the repayments of debt owed by Fiji Hardwood Corporation Limited that have been guaranteed by the State or set aside for reforestation or other purpose.
The audit noted Mahogany trust funds totalling $321,241 previously held in the Ministry of Economy’s Miscellaneous Trust Fund Account was transferred into the newly opened Mahogany Industry Council Fund Account (MICFA) held with the HFC Bank on 04/08/15 and maintained by the OPM.

The remaining balance of $44,164 was transferred to the MICFA in May 2016.
The current practise is that the Fiji Hardwood Corporation Limited (FHCL) harvest and sells the log to Licensee and also bills them the license fees charged on cubic meters and the grade of log, reforestation fees and branding fee.

Licensee pays these fees to FHCL who then forwards the cheque to OPM.
Audit review of the MICFA revealed the following anomalies:  The OPM does not have Standard Operating Procedures (SoPs) on the use of the trust fund;  Monthly reconciliations are not being performed by the OPM on the Mahogany log harvested against the licence fees collected as at 31 July 2016;  There are five grades of log harvested for which the rate varies.
No independent monitoring/spot checks was carried out by the OPM since August 2015 on the operation and billing process of FHCL to Licensee;  The rates used by the FHCL to levy licence fee to Licensee is not gazetted or formalised by the Mahogany Industry Council; and  The fees are only disclosed as License Fee in the Statement of Receipt and Payments (Agency Financial Statement).

(It is not referenced to the purpose the fees is being received).
11 Finance Instruction 2010, Section 58(3) Office of the Prime Minister Section 02: Page 14 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ____________________________ It was noted that as at the date of audit12 the OPM was in process of reconciling the records and rectifying the anomalies identified.

In absence of the monthly reconciliations, the audit could not ascertain the total trust fund revenue due to be collected from licensees.
Recommendations The OPM should:  ensure that monthly reconciliation of Trust Fund Account is carried out and unreconciled item(s) are promptly investigated and resolved;  develop SoPs for the operation of the trust fund;  assess and formalize the license fee levy; and  carry out independent monitoring and checks on the operation and billing process of the FHCL to Licensees.

Management Comments The Office has noted the audit recommendation.
The Office is conducting monthly Trust Fund Bank Reconciliation which is submitted to Ministry of Economy.

Mahogany Industry Council Fund reconciliation is targeted to be completed next week with consultations involving Ministry of Economy, Ministry of Public Enterprises, OAG, Office of the Solicitor General and Fiji Hardwood Corporation Ltd.

In addition, the new mahogany licenses regime will most likely to be rolled out by August 2017 including improved accounting controls namely: i. ii.

iii.
iii.

FHCL to facilitate invoicing, receipting, depositing of funds unlike the current arrangement where OPM and MOE facilitated the deposits; FHCL to facilitate follow ups monthly reconciliations and follow up on arrears with license holders; FHCL to provide monthly reconciliation reports to OPM and MOE OPM and FHCL will also formally notify and follow up with the current license holders by mid - June 2017 on the arrears with the license and replanting fees for logs supplied since June 2011.
12 31/01/17 Office of the Prime Minister Section 02: Page 15 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ____________________________ Appendix 2.1: Trust Fund Account for 2016 - Chinese Grant Account RECEIPTS Interest Refunds Total Receipts PAYMENTS Assistance to Schools Assistance to Settlements Assistance to Other Integrated Projects Netball Fiji Sponsorship Withholding Tax Transfer to Retention Fund Account Withdrawal Transfer – Bank Fees Total Payments Net Surplus/(Deficit) Adjustment of Foreign Cheque Opening Balance as at 1 January 2016 ($) 2015 ($) 178 8,948 9,126 1,370 8,210 9,580 --- --- --- --- 18 --- 40 58 119,260 9,877 494,862 80,000 274 937,873 40 1,642,186 9,068 --- 351,862 (1,632,606) 8,400 1,976,068 Closing Balance as at 31 July 2016/ 31 December 2015 360,930 351,862 Appendix 2.2: Trust Fund Account for 2016 – 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 Withdrawal Transfer – Bank Fees Total Payments Net Surplus / (Deficit) Opening Balance as at 1 January Closing Balance as at 31 July 2016/ 31 December 2015 2016 ($) 2015 ($) 21 41,849 --- 41,870 --- --- --- 43 43 41,827 8,253 50,080 119 - 211,893 212,012 113,900 170,787 5,000 --- 289,687 (77,675) 85,928 8,253 Office of the Prime Minister Section 02: Page 16 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ____________________________ Appendix 2.3: Trust Fund Account for 2016 – Retention Fund Account 2016 ($) 2015 ($) 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 474 --- --- --- --- --- --- 474 40 47 87 925 175,971 330,431 431,471 5,000 4,830 5,000 953,628 20 185 205
 387 953,423 953,423 - Closing Balance as at 31 July 2016/ 31 December 2015 953,810 953,423 Appendix 2.4: Trust Fund Account for 2016 – Mahogany Industry Council Fund Account 2016 ($) For the period from 17/07/15 to 31/12/15 ($) RECEIPTS Interest Transfer from Ministry of Finance/Economy License Fees Reversal Withholding Tax Total Receipts PAYMENTS Bank chargers Withholding Tax Total Payments Net Surplus Opening Balance as at 1 January Closing Balance as at 31 July 2016/ 31 December 2015 8,478 44,164 1,110,987 76 1,163,705 76 923 999 1,162,706 906,204 2,068,910 1,628 321,451 583,490 --- 906,569 39 326 365 906,204 - 906,204 Office of the Prime Minister Section 02: Page 17 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 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 2016 accounts of the Office of the Attorney General resulted in an unqualified audit opinion.
3.2 Statement of Receipts and Expenditure The Office of the Attorney General recorded revenue totalling $196,241 and incurred expenditure totalling $8,469,241 for the seven months period ended 31 July 2016.

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 – JUNE 2017___________________________________ Table 3.1: Statement of Receipts and Expenditure for 2016 Description RECEIPTS State Revenue Hotel License Trademark and Patent Registration 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 31 July 2016 ($) 31 December 2015 ($) 40,757 19,974 3,520 8,152 115,383 187,786 8,455 196,241 1,723,001 170,292 149,504 306,894 913,153 4,680,361 282,782 8,225,987 - - 243,254 8,469,241 246,100 35,958 7,960 12,812 78,821 381,651 12,600 394,251 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 The financial year end for Government was changed from 31 December to 31 July in accordance with the Financial Management (Amendment) Act 2016.
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.

3.3 Appropriation Statement The Office of the Attorney General incurred expenditure totalling $8,469,241 in 2016 against a revised budget of $18,278,344, resulting in savings of $9,809,103 or 54%.
The large savings was due to the budget being for the whole of 2016 while expenditures were only for seven months up to 31 July 2016.

Details of expenditures against the revised budget are provided in Table 3.2.
Table 3.2: Appropriation Statement for 2016 SEG Item Established Staff Government Wage Earners Travel & Communications Maintenance & Operations Purchase of Goods & Services Operating Grants & Transfers Office of the Attorney General Budget Estimate ($) 3,829,134 177,362 226,750 372,300 1,783,973 10,360,825 Changes ($) (90,000) 90,000 - 102,000 (29,200) (48,200) Revised Estimate ($) 3,739,134 267,362 226,750 474,300 1,754,773 10,312,625 Actual Expenditure ($) Lapsed Appropriation ($) 2,016,133 97,070 77,246 167,406 841,620 5,632,264 1,723,001 170,292 149,504 306,894 913,153 4,680,361 Section 03: Page 2 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017___________________________________ SEG Item 7 10 13 Special Expenditures Total Operating Expenditure Capital Expenditure Capital Grants & Transfers Total Capital Expenditure Value Added Tax TOTAL EXPENDITURE Budget Estimate ($) 1,205,000 17,955,344 - - 323,000 18,278,344 Changes ($) (24,600) - Revised Estimate ($) 1,180,400 17,955,344 Actual Expenditure ($) 282,782 8,225,987 Lapsed Appropriation ($) 897,618 9,729,357 - - - - - - 323,000 18,278,344 - - 243,254 8,469,241 - - 79,746 9,809,103 Office of the Attorney General Section 03: Page 3 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017______________________________________ Section 4 Ministry of Economy Role and Responsibilities The Ministry of Economy manages the finances of Government.
It ensures that public funds are used as its elected leaders intend and that all spending adheres to Fijian law.

The work of the Ministry of Economy 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 Economy 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 reforms, 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 the Ministry of Economy, the Strategic Planning Office (SPO) formulates and coordinates the implementation of the national development plan including monitoring of Annual Corporate Plans, capital projects and climate change, and providing input to the Office of the Prime Minister.

The Office also coordinates with the budget division on operating expenditure.
The Fiji Bureau of Statistics [FBOS] is responsible for the analysis and publication of all statistical information in a timely and coherent manner.
Table of Contents PART A: FINANCIAL STATEMENT ....................................................................................................... 2 4.1 Audit Opinion ............................................................................................................................. 2 4.2 Head 4, 50, 51, 52, and 13 - Statement of Receipts and Expenditure ...................................... 2 4.3 Appropriation Statement - Head 4, 50, 51, 52, and 13.............................................................. 5 4.4 Statement of Losses .................................................................................................................. 8 4.5 Fiji Procurement Office Trading & Manufacturing Activity – Profit & Loss Statement ............... 8 4.6 Fiji Procurement Office Trading & Manufacturing Activity - Balance Sheet .............................. 9 4.7 Office Accommodation and Government Housing Trading & Manufacturing Activity – Profit & Loss Statement .......................................................................................................................... 9 4.8 Office Accommodation and Government Housing Trading & Manufacturing Activity – Balance Sheet ..................................................................................................................................... 10 4.9 Consolidated Trust Account Statement ................................................................................... 11 4.10 Governance Issues.................................................................................................................. 12 AUDIT FINDINGS ........................................................................................................... 14 PART B : ..................................................................................................................................... 14 Head 4 4.11 Irrecoverable Surcharge Amount ............................................................................................ 14 4.12
14 4.12 Installation of Accessories on Leased Vehicles ...................................................................... 15 4.13 Delay in Clearing Goods from Wharf ....................................................................................... 17 4.14 Follow-Up on Previous Year Accounting and Control Anomalies Raised ............................... 18 Ministry of Economy Section 04: Page 1 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017______________________________________ PART A: FINANCIAL STATEMENT 4.1 Audit Opinion The audit of the 2016 accounts of the Ministry of Economy resulted in the issue of an unqualified audit opinion.
4.2 Head 4, 50, 51, 52, and 13 - Statement of Receipts and Expenditure Head 4 – Ministry of Economy The Ministry of Economy budget is appropriated as Head 4 in the 2016 Budget Appropriation Act with Fiji Procurement Office (FPO), Strategic Planning Office (SPO) and Fiji Bureau of Statistics (FBOS).

The Ministry of Economy recorded revenue totalling $1,762,592,179 and incurred expenditure totalling $45,624,908 for the seven months period ended 31 July 2016.
In addition, total payments of $10,335,087 were made by third parties on behalf of the Ministry.

Refer to Table 4.1 for details.
Table 4.1: Head 4 – Consolidated Statement of Receipts and Expenditure in 2016 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 Ministry of Economy 31 July 2016 Payment by Third Party ($) ($) 31 December 2015 (Restated) ($) Payment by Third Party (Restated) ($) Section 04: Page 2 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017______________________________________ Description 31 July 2016 Payment by Third Party ($) ($) 31 December 2015 (Restated) Payment by Third Party (Restated) ($) Capital Construction Capital Purchases Capital Grants and Transfers Total Capital Expenditure Value Added Tax TOTAL EXPENDITURE --- --- 5,641,266 5,641,266 397,829 45,624,908 ($) --- --- 6,500,000 6,500,000 604,718 77,480,472 The financial year end for Government was changed from 31 December to 31 July in accordance with the Financial Management (Amendment) Act 2016.
The financial statements for the period ended 2016 reflect transactions for a seven months period whereas the financial statements for the year ended 2015 is for a twelve month period, thus the significant variances with the comparative balances.

Head 50 – Miscellaneous Services The Ministry incurred expenditure amounting to $217,293,889 from Head 50 for the seven months period ended 31 July 2016.

Refer to Table 4.2 for details.
Table 4.2: Head 50 - Statement of Receipts and Expenditure in 2016 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 31 July 2016 ($) 31 December 2015 ($) 687,163 1,740,196 19,432,100 7,298,933 2,803,397 31,961,789 --- 5,954,755 176,701,594 182,656,349 2,675,751 217,293,889 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 The total expenditure increased by $40,717,773 or 23% in 2016 compared to 2015.
This was due to the increase in Capital Grants and Transfers expenditure arising from payment of housing assistance under Help for Homes Initiative to people affected by Tropical Cyclone Winston.
Ministry of Economy Section 04: Page 3 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017______________________________________ Head 51 – Pensions, Gratuities and Compassionate Allowances The Ministry incurred expenditure amounting to $20,754,067 from Head 51 for the seven months period ended 31 July 2016.

Refer to Table 4.3 for details.


Table 4.3: Head 51 - Statement of Receipts and Expenditure in 2016 Description EXPENDITURE Operating Expenditure Pensions Gratuities Compassionate Allowance TOTAL EXPENDITURE 31 July 2016 ($) 31 December 2015 ($) 16,193,233 886,487 3,674,347 20,754,067 30,554,331 1,528,107 6,795,881 38,878,319 The financial year end for Government was changed from 31 December to 31 July in accordance with the Financial Management (Amendment) Act 2016.
The financial statements for the period ended 2016 reflect transactions for a seven months period whereas the financial statements for the year ended 2015 is for a twelve month period, thus the significant variances with the comparative balances.

Head 52 – Finance charges on Public Debt Finance Charges on Public Debt amounted to $240,484,614 in 2016 compared $972,409,393 in 2015.
Details are shown in Table 4.4: Table 4.4: Head 52 - Statement of Receipts and Expenditure in 2016 Description EXPENDITURE Operating Expenditure Finance Charges on Public debt – Miscellaneous Payment Finance Charges on Public debt – Overseas Loans Finance Charges on Public debt – Domestic Loans TOTAL EXPENDITURE 31 July 2016 ($) 31 December 2015 ($) 2,612,686 7,564,667 61,077,127 635,306,062 176,794,801 329,538,664 240,484,614 972,409,393 The financial year end for Government was changed from 31 December to 31 July in accordance with the Financial Management (Amendment) Act 2016.
The financial statements for the period ended 2016 reflect transactions for a seven months period whereas the financial statements for the year ended 2015 is for a twelve month period, thus the significant variances with the comparative balances.
Ministry of Economy Section 04: Page 4 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017______________________________________ Head 13 – Independent Commissions (Fiji Independent Commission Against Corruption) The operating grants and transfers of $4,428,374 was paid to Fiji Independent Commission Against Corruption to finance its operations.

Refer to Table 4.5 for details.


Table 4.5: Head 13 - Statement of Receipts and Expenditure in 2016 Description EXPENDITURE Operating Operating Grants and Transfers TOTAL EXPENDITURE 31 July 2016 ($) 31 December 2015 ($) 4,428,374 4,428,374 8,503,686 8,503,686 The financial year end for Government was changed from 31 December to 31 July in accordance with the Financial Management (Amendment) Act 2016.
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 twelve month period, thus the significant variances with the comparative balances.

4.3 Appropriation Statement - Head 4, 50, 51, 52, and 13 Head 4 – Ministry of Economy The Ministry incurred expenditure totalling $45,624,908 against a revised budget of $84,142,135 resulting in savings of $38,517,277 or 46%.
The significant savings was primarily due to the budget being for twelve months while expenditures incurred were only for seven months up to 31 July 2016.

Details of expenditure against the budget estimates are provided in Table 4.6.
Table 4.6: Head 4 - Appropriation Statement for 2016 SEG Item Grants Established Staff Unestablished Staff Travel & Communication Maintenance & Operations Purchase of Goods & Services Operating Transfers Special Expenditure Total Operating Costs Capital Transfers Total Capital Expenditure Value Added Tax TOTAL Grants and & Budget Estimate ($) 13,987,021 513,681 1,017,301 1,238,996 2,009,834 Changes ($) (97,681) 66,960 8,184 --- 22,537 Revised Estimate ($) 13,889,340 580,641 1,025,485 1,238,996 2,032,371 Actual Expenditure ($) 6,233,315 336,503 414,112 649,569 1,456,979 Lapsed Appropriation ($) 7,656,025 244,138 611,373 589,427 575,392 49,512,062 --- 49,512,062 28,904,974 20,607,088 3,689,404 71,968,299 11,500,000 11,500,000 673,836 84,142,135 --- --- --- --- --- --- 3,689,404 71,968,299 11,500,000 11,500,000 673,836 84,142,135 1,590,361 39,585,813 5,641,266 5,641,266 397,829 45,624,908 2,099,043 32,382,486 5,858,734 5,858,734 276,007 38,517,227 Ministry of Economy Section 04: Page 5 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017______________________________________ Head 50 – Miscellaneous Services The Ministry of Economy administers Miscellaneous Services under Appropriation Head 50.
The funding provided for 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 Economy.

These funding is disbursed under the authority of the Permanent Secretary for Economy.1 The Ministry incurred expenditure totalling $217,293,889 in Head 50 in 2016 against a revised budget of $304,135,946 resulting in savings of $86,842,057 or 29%.
The significant savings was primarily due to the budget being for twelve months while expenditures incurred were only for seven months up to 31 July 2016.

Details of expenditure against the budget estimates are provided in Table 4.7.
Table 4.7: Head 50 - Appropriation Statement for 2016 SEG Item 1 3 5 6 7 9 10 13 & Grants of Goods & Established Staff 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 ($) 6,000,000 4,723,600 32,000,879 Changes ($) (2,000,000) --- 207,000 Revised Estimate ($) 4,000,000 4,723,600 32,207,879 Actual Expenditure ($) 687,163 1,740,196 19,432,100 Lapsed Appropriation ($) 3,312,837 2,983,404 12,775,779 14,687,400 --- 14,687,400 7,298,933 7,388,467 8,810,000 66,221,879 18,417,091 133,741,335 152,158,426 5,755,641 224,135,946 (207,000) (2,000,000) --- 82,000,000 82,000,000 --- 80,000,000 8,603,000 64,221,879 18,417,091 215,741,335 234,158,426 5,755,641 304,135,946 2,803,397 31,961,789 5,954,755 176,701,594 182,656,349 2,675,751 217,293,889 5,799,603 32,260,090 12,462,336 39,039,741 51,502,077 3,079,890 86,842,057 The Ministry redeployed $80 million from Head 43 – Fiji Roads Authority budget into Head 50 to fund payments for Help for Homes Initiative.
Head 51 – Pensions, Gratuities and Compassionate Allowance Appropriation Head 51 - Pensions, Gratuities, and Compassionate allowance is also administered by the Ministry of Economy.

The allocation is for expenditures relating to Government Pensioners, Ex- Parliamentarian, Ex-Prime Minister and Presidents, Ex-Chief Justice, Retired Judges and Service Pensioners.
The Ministry incurred expenditure totalling $20,754,067 in Head 51 in 2016 against a revised budget of $42,343,400 resulting in savings of 21,589,233 or 51%.

The significant savings was primarily due to the budget being for twelve months while expenditures incurred were only for seven months up to 31 July 2016.

Details of expenditure against the budget estimates are provided in Table 4.8.
1 2016 Budget Ministry of Economy Section 04: Page 6 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017______________________________________ Table 4.8: Head 51 - Appropriation Statement for 2016 SEG Item Budget Estimate ($) Changes ($) Revised Estimate ($) Actual Expenditure ($) Lapsed Appropriation ($) 11 Pensions, Gratuities and Compassionate allowance TOTAL 42,343,300 42,343,300 --- --- 42,343,300 20,754,067 21,589,233 42,343,300 20,754,067 21,589,233 Head 52 – Finance Charges on Public Debt Appropriation Head 52 – Charges on Account of Public Debt was allocated for the repayment of domestic and overseas loans.
The Ministry incurred expenditure totalling $240,484,614 in Head 52 in 2016 against a revised budget of $436,626,600 resulting in savings of $196,141,986 or 45%.

The significant savings was primarily due to the budget being for twelve months while expenditures incurred were only for seven months up to 31 July 2016.

Details of expenditure against the budget estimates are provided in Table 4.9.
Table 4.9: Head 52 - Appropriation Statement for 2016 SEG Item 12 Finance Charges on Public Debt TOTAL Budget Estimate ($) 436,626,600 436,626,600 Changes ($) --- --- Revised Estimate ($) Actual Expenditure ($) Lapsed Appropriation ($) 436,626,600 240,484,614 436,626,600 240,484,614 196,141,986 196,141,986 Head 13 – Fiji Independent Commission Against Corruptions (FICAC) The Ministry incurred expenditure totalling $4,428,374 in Head 13 in 2016 against a revised budget of $8,480,987 resulting in savings of $4,052,613 or 48%.
The significant savings was primarily due to the budget being for twelve months while expenditures incurred were only for seven months up to 31 July 2016.

Details of expenditure against the budget estimates are provided in Table 4.10.
Table 4.10: Head 13 - Appropriation Statement for 2016 SEG Item Budget Estimate ($) Changes ($) Revised Estimate ($) Actual Expenditure ($) Lapsed Appropriation ($) 6 Operating Transfers TOTAL Grants & 8,480,987 8,480,987 --- --- 8,480,987 4,428,374 8,480,987 4,428,374 4,052,613 4,052,613 Ministry of Economy Section 04: Page 7 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017______________________________________ 4.4 Statement of Losses The Ministry of Economy did not record any loss of cash or revenue in 2016.
However, items worth $172,754 were written off following the Board of Survey conducted by the Ministry in 2016.

4.5 Fiji Procurement Office Trading & Manufacturing Activity – Profit & Loss Statement The Fiji Procurement Office (FPO) operates a Trading Manufacturing Account (TMA) selling Fiji flags.

The TMA was transferred from the former Government Supplies Department, a retail arm of Government.
The Profit & Loss Statement – Trading & Manufacturing Activity showed a net profit of $497,740 as at 31 July 2016 compared to $998,624 in 2015.

The sales decreased by $534,504 or 48% in 2016 as the financial year for the Government was changed from 31 December to 31 July as stipulated in the Financial Management (Amendment) Act 2016.
The financial statement for the period ended 2016 reflect transactions for a seven months period whereas the financial statements for the year ended 2015 is for a twelve month period, thus the significant variances with comparative balances.

Refer to Table 4.11 for details.
Table 4.11: Profit & Loss Statement - Fiji Procurement Office Description Income Sales Cost of Finished Goods Sold Gross Profit Expenses Direct Labour Maintenance & Operations Other Expenses Total Expenses Net Profit 31 July 2016 ($) 31 December 2015 ($) 578,427 (19,918) 558,509 --- 57,084 3,685 60,769 497,740 1,112,931 ( 20,875) 1,092,056 4,117 53,064 36,251 93,432 998,624 Ministry of Economy Section 04: Page 8 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017______________________________________ 4.6 Fiji Procurement Office Trading & Manufacturing Activity - Balance Sheet The net assets of the FPO TMA in 2016 totalled $1,117,111.
Refer to Table 4.12 for details.
Table 4.12: Balance Sheet Description Deposits & Deductions VAT Refund Total Liabilities Equities TMA Surplus Transferred to Consolidated Fund TMA Accumulated Surplus Net Profit Total Equity 31 July 2016 ($) 31 December 2015 ($) --- (47,556) (47,556) (49,293) --- (49,293) (4,787,404) (4,762,420) 5,406,775 497,740 1,117,111 5,211,660 998,624 1,447,864 TOTAL LIABILITIES & EQUITY 1,069,555 1,398,571 Current Assets Cash at Bank Finished Goods Accounts Receivable TOTAL ASSETS 994,411 75,144 --- 1,069,555 1,303,509 95,062 --- 1,398,571 4.7 Office Accommodation Manufacturing Activity – Profit & Loss Statement and Government Housing Trading & The Office Accommodation was transferred from the Public Service Commission to provide housing to eligible civil servants.
In 2009, the responsibility of the function was extended to commercial rental to interested members of the public resulting in the establishment of the TMA in 2011.

The TMA was solely responsible for semi- commercial nature that caters for commercially renting out of quarters.2 The Profit & Loss Statement – Trading & Manufacturing Activity showed a net profit of $3,751,882 as at 31 July 2016 compared to $1,731,324 in 2015.

This was attributed to the increase in Total income by $1,621,400 or 57% in 2016.
Refer to Table 4.13 for details.
2 Office Accommodation & Government Housing, Construction Implementation Unit, Ministry of Economy TMA Business Plan 2016 Ministry of Economy Section 04: Page 9 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017______________________________________ Table 4.13: Profit & Loss Statement – Office Accommodation and Government Housing Description Income Other income Expenses Direct Labour Maintenance & Operations Other Expenses Total Expenses Net Profit 31 July 2016 ($) 31 December 2015 ($) 4,489,251 2,867,851 --- --- 737,369 737,369 3,751,882 32,248 25,200 1,079,079 1,136,527 1,731,324 4.8 Office Accommodation Manufacturing Activity – Balance Sheet and Government Housing Trading & In 2016, the net assets of the activity totalled $4,561,636 which increased by $3,740,714 or 456% compared to 2015 due to increase in Cash at Bank by $3,695,264 or 356%.
Refer to Table 4.14 for details.
Table 4.14: Balance Sheet Description Accounts Payable Deposits & Deductions Total Liabilities Equities TMA Surplus Transferred to Consolidated Fund TMA Accumulated Surplus Net Profit Total Equity TOTAL LIABILITIES & EQUITY Current Assets Cash at Bank Accounts Receivable TOTAL ASSETS 31 July 2016 ($) 31 December 2015 ($) 36,333 136,991 173,324 --- 218,425 218,425 (3,735,666) (3,724,498) 4,545,420 3,751,882 4,561,636 2,814,096 1,731,324 820,922 4,734,611 349 4,734,960 1,039,347 --- 1,039,347 Ministry of Economy Section 04: Page 10 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017______________________________________ 4.9 Consolidated Trust Account Statement The Ministry had seven types of main trust fund accounts, details of which are as follows:  Performance Bond - These are performance bonds for tenders awarded by Fiji Procurement Office for  which payments are made according to the tender contracts.
IHRDP Trust Account - Integrated Human Resource Development Programme (IHRDP) account is used for the 1/3 contribution received for projects in small communities.

This account is maintained by National Strategic Planning.

 Government Tuna Stabilisation Fund - This is the bunker fuel levy of $0.04 per litre collected from foreign fishing vessels from March 2014 to March 2016, in accordance with the Tuna Stabilisation Fund policy.

Monies will be reverted to Ministry of Fisheries.


 Winston Trust - This account is used for donations received for Cyclone Winston relief from various donors.

Donors either directly deposit funds into the bank accounts, or issued cheques which are received and receipted at the Treasury Section in the Ministry of Economy.

 Group Insurance Trust Account - This trust account receives insurance payment and after assessment pay-out is made to the nominees of the Insurance Policy Holders upon their death.
 Miscellaneous Fund v Others - This account was opened following Cabinet decision "Effective management of trust monies - FIN 60/16" CP (09)72 of 16/06/09.

Surplus funds in Agency trust bank accounts was transferred into the Consolidated Trust Fund account.

The funds in the consolidated trust fund account will be used for investments and to fund Government's expenditures during tight cash flow situation.
 ODA Performance and Tenancy Bond - Tenancy bonds are paid by tenants for occupation of quarters on rent.

Total trust funds for the Ministry increased by $6,419,296 or 52% in 2016 compared to 2015 due to creation of new trust fund accounts at various commercial banks for Prime Minister’s National Disaster Relief and Rehabilitation to receive donations following Tropical Cyclone Winston and Government Tuna Stabilisation Fund – Bunker Levy (FRCA).

Refer to Table 4.15 for details.
Table 4.15: Trust Account Description Opening Balance 1 January Receipts Performance Bond - Tender Deposit, Performance Bond, Retention & Bank Interest IHRDP Trust Account - Lawaki Bakery Community Contribution Government Tuna Stabilisation Fund - Bunker levy (FRCA) & Interest Prime Minister’s National Disaster Relief and Rehabilitation: Cyclone Winston - Donation, Interest & Bank Reversal Group Insurance Trust - Insurance proceeds Miscellaneous Fund v Others - Bank Interest ODA Performance and Tenancy Bond - Funds received from Performance, Tenancy Bond, Bank Reversal & Interest Total Receipts Ministry of Economy 31 July 2016 ($) 12,459,423 31 December 2015 ($) 10,216,898 1,468,636 94,799 7,165,730 10,767,003 487,551 26,798 192,674 3,412,561 32,346 --- --- --- 2,000,676 --- 20,203,191 5,445,583 Section 04: Page 11 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017______________________________________ Description Payments Performance Bond - Tender Deposit, Performance Bond, Retention & Bank Interest IHRDP Trust Account - Lawaki Bakery Community Contribution Government Tuna Stabilisation Fund - Bunker levy (FRCA) & Interest Prime Minister’s National Disaster Relief and Rehabilitation: Cyclone Winston - Donation, Interest & Bank Reversal Group Insurance Trust - Insurance proceeds Miscellaneous Fund v Others - Bank Interest ODA Performance and Tenancy Bond - Funds received from Performance, Tenancy Bond, Bank Reversal & Interest Total Payments Closing Balance 31 July 2016 ($) 31 December 2015 ($) 1,860,732 86,673 3,582,859 8,012,356 237,084 3,829 362 847,494 46,618 --- --- --- 2,308,946 --- 13,783,895 3,203,058 18,878,719 12,459,423 4.10 Governance Issues Each month, the Accounting Head must provide a signed and dated report to the Permanent Secretary to advise whether all reconciliations and checks required in the agencies finance manual have been carried out; and the current status of any unresolved issue external or internal audit issue.3 Audit noted that the monthly signed report was not provided
 to the Permanent Secretary contrary to section 60 of the Finance Instructions 2010.
Other control issues which were noted in the Ministry for the financial period ended 31 July 2016 were as follows:  Annual Corporate Plan and Strategic Plan was not developed.

 Unresolved audit issues continued in the new financial year.

Refer to section 4.14 for matters raised as “follow-up” issues.

 The following administrative controls were absent:  Formal monthly meetings of section heads were not held.
 The Office Accommodations Trading and Manufacturing Account section did not provide the following records contrary to Section 7 (1) (a) and (b) of Audit Act.

 Provisional tax reconciliations from January to July 2016; and  Handing over statements as at 31/12/15.
The Office Accommodation Unit was transferred from Public Service Commission to Construction Implementation Unit (CIU) within Ministry of Economy with effect from 1/1/16; 3 Finance Instructions 2010 - Section 60 (1) Ministry of Economy Section 04: Page 12 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017______________________________________  The following records were also not provided for audit review contrary to Section 7 (1) (a) and (b) of the Audit Act.
 Report on work done on Rice Raising Project from 2015 to 2016; and  Individual Work Plan for officers employed in Construction Implementation Unit (CIU).

Refer to the Table 4.16 for details.
Table 4.16: Individual Work Plan not Provided EDP Salary Paid ($) Individual Work Plan Provided 61065 92087 60021 91521 95565 95548 95549 47578 61978 93246 94247 92721 63850 53821 90701 61942 63022 80,000 No 45,000 No 45,000 No 45,000 No 15,000 No 15,000 No 15,000 No 39,452 No 29,530 No 29,530 No 35,000 No 25,000 No 19,069 No 19,069 No No 19,069 No 12,659 No Resigned in 2016  Ministry’s Internal Audit and Governance Division carried out an investigation for recipients who breached the Help for Home initiative.
However, a copy of the investigation report was not made available to audit.

Non-submission of records required for audit purposes is a serious breach of the Audit Act 1969.

Recommendations The Ministry should ensure that:  the Annual Corporate Plan and Strategic Plan are developed to document its deliverables and performance indicators;  all records requested for audit is provided in compliance with the 2013 Constitution and Audit Act 1969.
Ministry’s Comments Audit findings and recommendations are acknowledged.

In view of the audit findings, Ministries comments are as follows: Ministry of Economy Section 04: Page 13 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017______________________________________  We acknowledge that ACP was not prepared.

This was mainly due to non-finalization of the National Development Plan.
 Handing Over Statement – the Office Accommodation was first with DS FAM and was later transferred to CIU, there was no Handing over statement submitted.

PART B : AUDIT FINDINGS Head 4 4.11 Irrecoverable Surcharge Amount The Surcharge Unit was established under the Financial Management Act 2004, Part 10 Division 2, Section 67-71.
Its main function is to recover cost of assets or money lost by Government through negligence.4 Upon death or termination of the surcharged officer during the period mentioned in (2) above, full recovery of the outstanding amount must be made from any dues outstanding by Government to the surcharged officer.5 The audit noted that the total surcharge amount for on-going cases and irrecoverable cases as at July 2016 was $362,965.89 and $472,091.65, respectively totalling to $835,057.54.
Refer to Table 4.17 for details.
Table 4.17: On-going cases and Irrecoverable Surcharge Cases Cases On-Going Cases Civil Case Damage to Government Vehicle Loss of Government Property Loss of Government Funds Unauthorised Expenditure Total Irrecoverable Surcharge Cases BOS Deficit Civil Case Damage to Government Vehicle Loss of Government Property Loss of Government Funds Unauthorised Expenditure Total Grand Total Amount ($) Percentage (%) 22.57 69.57 2.75 2.74 2.36 100.0 2.33 3.58 46.50 13.42 19.86 14.31 100.0 81,930.69 252,533.29 9,981.05 9,941.76 8,579.10 362,965.89 10,977.57 16,906.88 219,513.57 63,367.39 93,759.90 67,566.34 472,091.65 835,057.54 4 http://www.economy.gov.fj/sections/iagg.html 5 Finance Instructions 2010 - Section 65 (4) Ministry of Economy Section 04: Page 14 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017______________________________________ Ineffective recovery procedures and prolonged recovery period has resulted in accumulation of surcharge amount.
The irrecoverable surcharge cases accounts for 56.5% of the total surcharge balance of $835,057.34 and could lead to write off as the officers with debts have resigned, retired, migrated, deceased and terminated.

Recommendation The Ministry should employ stringent recovery measures to recover outstanding amounts from on- going cases to avoid write offs.

Ministry’s Comments The Ministry has taken a number of approaches to ensure the recoveries of surcharge.

1.
1.

Recovery to be within the surcharged officers’ contract period; 2.

Regular review of surcharge arrears; 3.

Increase of surcharge deductions to those nearing retirement dates and completion of contract.

4.

Signing of Debt Agreement with surcharged officers with significant surcharge amounts.

5.
Allotment of mobile to contact officers in remote locations 4.12 Installation of Accessories on Leased Vehicles The Lessee agrees with the Lessor that any accessories, parts, tyre replacements and tools which now or thereafter are supplied with or are attached to a Leased Vehicle described in the Order and Acknowledgement Form and the Acknowledgement of Delivery Form shall be or become part thereof and shall be deemed to be included in the term "Leased Vehicle" herein, except that the Lessor may, with respect to accessories fitted by the Lessee with the prior written approval of the Lessor, elect to require the Lessee to remove the same and make good and damage of such fitting or removal.6 The Lessee shall not without the written consent of the Lessor make any additions, improvements or alterations to the Vehicle and if the Lessee does so, it will, immediately upon being required to do so in writing by the Lessor, reinstate the Vehicle to its original state at the Lessee's cost and expense.7 The Ministry leased a number of vehicles from the respective franchise dealers for its daily operations as per the lease agreement.
The audit noted that the Fiji Bureau of Statistics (Bureau) division installed canopies and other accessories to eight of its leased vehicles totalling $51,829.55.

However, written approval from the lessor to install the canopies and other accessories on the leased vehicles was not produced for audit verification.

In addition, the expenditure for installation of canopies and other accessories was not budgeted for in the 2014, 2015 and 2016 budget estimates.
Hence, the expenditures were funded from budgets allocated for repairs and maintenance, employment and unemployment survey, population demography household survey and population census.

Therefore, the expenditure of $51,829.55 was not properly authorised.

Refer to Table 4.18 for details.
6 Master Operating Lease Agreement between Bank of the South Pacific, The Government of the Republic of Fiji and Toyota Tsusho (South Sea) Ltd dated 06/07/2011 – Clause 7.1 7 Master Lease Agreement between VB Holdings Ltd and The Government of the Republic of Fiji dated 17/04/2014 – Clause 9.1 Ministry of Economy Section 04: Page 15 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017______________________________________ Table 4.18: Details of Leased Vehicles with canopies without Lessor’s approval Registration No.
YEAR – 2014 GP 401 GP 714 YEAR – 2015 GP 778 YEAR – 2016 GP 715 GQ 253 GQ 265 GQ 295 GQ 291 TOTAL Accessories Installed Supply and Install Canopy Supply and install canopy, side steps and weather shield Supply and install canopy, side steps and weather shield Supply and Install Canopy Supply and install canopy and weather shield Supply and install canopy and weather shield Supply and install canopy, weather shield and bonnet protector Supply and install canopy, weather shield and bonnet protector Amount ($) 6,024.45 Payment Date 7/4/14 7,900.00 16/12/14 Payment Voucher 23670 00005 7,900.00 30/1/15 00002 6,200.00 1/6/16 00012 17,659.45 6/9/16 4532 6,145.65 18/10/16 4944 51,829.55 The above is a breach of the lease agreements that could result in additional cost to the Ministry if the canopies are removed at the expiry of the lease agreements.
Recommendations The Ministry should ensure that:  vehicle lease agreements are complied with at all times;  prior approval is obtained from the lessor for additions, improvements or alterations to the leased vehicles; and  expenses incurred are budgeted for to avoid unauthorised payments.

Ministry’s Comments Audit Recommendations are noted .For our type of work we need four-wheel drive covered vehicles.
The twin cabs are not our choice vehicles however we have had make do with them as these were the type of vehicles given to us.

Our Pajero fleet are quite old and are no longer safe to take into areas with poor road conditions or in difficult terrain.

The vehicles are used to transport our staff for field visits so we need to carry bags, survey documents and other survey tools.

With the canopies fitted, these materials can be placed in the back to allow the transporting of 3 staff.
Even with the canopies we still have our stuff covered with dust but they do provide sufficient protection.

The current fleet of twin cabs (with canopies) are really not suitable for transporting survey officers to the more remote rural locations, as they can only carry 3 passengers at a time so in some cases there is a need to make two trips.
Ministry of Economy Section 04: Page 16 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017______________________________________ The above justification is provided by Bureau of Statistics in terms of staff safety and urgency of the matter.

However Bureau of Statistics accepts that this was an oversight on their part in failure to communicate with HQ (Ministry of Economy) in particular with Government Fleet Management Unit to obtain necessary approvals.
The decision taken at that time was in the best interest of the safety of official documents and staff In terms of Budget, then it is always the case if a particular procurement has been approved then Ministry/Department needs to source from within if possible.

Ministry through its Government Fleet Management Unit has informed all the Ministries and Departments that any installation of accessories in Government leased Vehicles needs prior approval from the lessor.
4.13 Delay in Clearing Goods from Wharf 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.8 The audit noted that a container shipment of medicines consigned for the Fiji Pharmaceutical and Biomedical Services (FPBS) via Suva wharf remained uncleared by the Fiji Procurement Office (FPO) for 253 days due to an oversight.

Therefore, the Ministry had to pay a sum of $48,984.60 for the uncleared item.
Refer to Table 4.19 for details.

Table 4.19: Details of Payment Date Cheque No.

Amount ($) Details 24/3/16 5052 48,984.60 Being payment of ports charges for un-cleared container for 253 days.

The negligence of FPO officers resulted in wastage of public funds.

Recommendation The Ministry should ensure that goods received at the wharf are cleared on time to avoid loss of public funds.

Ministry’s Comments Audit Recommendations are noted.
The Ministry is putting in place strategies to ensure that this incident is not repeated.

The bond checking has been re-introduced whereby stakeholders and shipping agents’ permission are requested for warehouses to be physically inspected for any pending government consignments that need to be cleared.

Currently the process is for Ministries and Departments to advice of inbound consignments upon receipt of arrival notice which was not the case in this instance.
The agency’s advice was received 76 days later upon follow up from the shipping agent hence the delay should not be attributed to the negligence of officers involved.
8 Ministry of Economy, Finance Manual 2015 – Part 2 Introduction Ministry of Economy Section 04: Page 17 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017______________________________________ 4.14 Follow-Up on Previous Year Accounting and Control Anomalies Raised During the 2016 audit, the status of the matters reported in the previous year was followed up.

These matters have remained outstanding as actions are yet to be taken by the board to resolve them.
The status of outstanding issues is set out below: Ministry of Economy Section 04: Page 18 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017______________________________________ Table 4.20: Follow-up on Previous Year Accounting and Control Anomalies Issues Recommendations Current Status Management’s Proposed Action Ministry of Economy Regularity Audit – Head 50 Miscellaneous Services SLG 84 Reconciliations not submitted to FMIS Division The following anomalies were noted on the SLG 84 reconciliations: (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) Bureau of Statistics; b) Ministry of Foreign Affairs; c) Fijian Elections Office; d) Judiciary Department; e) Public Service Commission; f) Ministry of Women, Children & Poverty Alleviation; g) Ministry of Fisheries & Forests; h) Ministry of Lands and Mineral Resources; i) Ministry of Industry, Trade and Tourism; j) Ministry of Sugar; k) Ministry of Infrastructure & Transport; l) Ministry of Local Government, Housing & Environment; and m) 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 Ministry of Economy for The Ministry should ensure that funds reconciliations transferred from Head 50 are prepared receiving ministries and submitted to the Ministry of Economy.

Negative ending balances identified should be corrected.
the by Several Ministries and have Departments negative balances in SLG 84 accounts as at 31 July 2016.

We duly agree that this was the issue in 2015.

As a way its budget forward, Ministry of Economy; division have requested Ministries and Departments to acquit the SLG 84 funding before the next request is made.

Acquittals are available with Budget Division.

through Follow up FMIS have revealed that they are now receiving reconciliations from most of the Ministries and Departments.
For those Ministries and Departments that are not submitting the SLG 84 reconciliation to FMIS, will be dealt with accordingly by the Chief Accountant.

Section 04: Page 19 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017______________________________________ Issues Recommendations Current Status Management’s Proposed Action ledger balances and audit was not able to establish the correctness of these balances which indicate lack of monitoring and supervision.
Regularity Audit – Head 4 Reoccurring Monthly Reconciliations of Underline Accounts not verified at FMIS Section The audit noted that the reconciliation were not submitted to the Ministry of Economy within the set- timeframes.

Audit further noted that there was no evidence that the reconciliation were being verified 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 being submitted after 2 to 4 months has elapsed.

 The ministry should ensure that reconciliations submitted by the respective ministries are reviewed by the Head of FMIS.

 The ministry should follow up respective if not with the Permanent Secretaries are reconciliation submitted out on time Ministry’s Comments its oversight Audit Recommendations is acknowledged.
Ministry of in Economy for Government’s role overseer for reconciliations have been repeatedly reminding Accounting Heads at the monthly meetings to ensure that reconciliations are carried out correctly and in timely manner.

If Ministries & Departments fail to adhere to MOE recommendations, then Chief Accounting Officers; who in this case are the Permanent Secretaries should be blamed.

Audit Recommendations are noted.


For those Issues noted by the auditors which are recurring, Ministry is putting concerted efforts to rectify these issues.

Ministry of Economy Section 04: Page 20 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 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 Back Log i-Taukei Affairs Board Audit ........................................................................................ 3 5.5 Unsigned Agreement with Native Reserve Commission ............................................................ 5 5.6 Scholarship Bond Recovery Balances Not transferred to TSLB ................................................. 5 5.7 Diversion of Funds without Proper Approval ............................................................................... 6 PART A: FINANCIAL STATEMENT 5.1 Audit Opinion The audit of the 2016 accounts of the Ministry of i-Taukei Affairs resulted in an unqualified audit opinion.
Ministry of i-Taukei Affairs Section 05: Page 1 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ____________________________ 5.2 Statement of Receipts and Expenditure The Ministry recorded revenue totalling $19,571 and incurred expenditure totalling $6,033,591 for the seven months period ended 31 July 2016.

Refer to Table 5.1 for details.
Table 5.1: Statement of Receipts and Expenditure for 2016 Description 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 July 2016 ($) 31 December 2015 ($) 17,967 1,604 19,571 31,260 1,986 33,246 1,275,161 98,642 56,793 155,490 105,788 3,272,351 603,858 5,568,083 2,342,137 155,618 71,452 275,045 80,763 5,589,394 666,587 9,180,996 389,586 389,586 426,838 426,838 Value Added Tax 75,922 109,896 TOTAL EXPENDITURE 6,033,591 9,717,730 The financial year end for Government was changed from 31 December to 31 July in accordance with the Financial Management (Amendment) Act 2016.
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.

5.3 Appropriation Statement The Ministry of i-Taukei Affairs incurred expenditure totalling $6,033,591 against a revised budget of $11,464,415 resulting in savings of $5,430,824 or 47%.
The large savings was due to the budget being for the whole of 2016 while expenditures were only for seven months up to 31 July 2016.

Details of expenditure against the budget estimates are provided in Table 5.2.
Table 5.2: Appropriation Statement for 2016 SEG Item 1 2 Established Staff Government Wage Earners Ministry of i-Taukei Affairs Budget Estimate ($) 2,491,546 114,400 Changes ($) (219,287) 57,022 Revised Estimate ($) 2,272,259 171,422 Actual Expenditure ($) 1,275,161 98,642 Lapsed Appropriation ($) 997,098 72,780 Section 05: Page 2 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ____________________________ SEG Item Travel & Communications Maintenance & Operations Purchase of Goods & Services Operating Grants & Transfers Special Expenditures Total Operating Expenditure Capital Expenditure Capital Grants & Transfers Total Capital Expenditure Value Added Tax Budget Estimate ($) 80,212 265,500 94,000 6,545,900 1,051,259 10,642,817 688,798 688,798 132,800 TOTAL EXPENDITURE 11,464,415 Changes ($) 5,665 - 83,100 - 73,500 - - - - - Revised Estimate ($) 85,877 265,500 177,100 6,545,900 1,124,759 10,642,817 688,798 688,798 132,800 Actual Expenditure ($) Lapsed Appropriation ($) 56,793 155,490 105,788 3,272,351 603,858 5,568,083 389,586 389,586 75,922 29,084 110,010 71,312 3,273,549 520,901 5,074,733 299,212 299,212 56,878 11,464,415 6,033,591 5,430,823 PART B: AUDIT FINDINGS 5.4 Back Log i-Taukei Affairs Board Audit A grant agreement must provide for the organisation or person receiving the grant to agree to keep proper files and accounting records in relation to the grant and to make these files and records available upon request by the administering agency or the Auditor General.
1 Where required under Finance Instruction 16-(8), the recipient shall prepare an acquittal report.

The acquittal report shall provide financial statement (audited if practicable) for grants/projects of $20,000 or more.2 The Ministry paid a total of $3.2 million in grants to i-Taukei Affairs Board.

Refer to Table 5.3 for details.


Table 5.3: Details of Allocation of Funds Recipient I-Taukei Affairs Board Provincial Councils Na Mata Turaga ni koro Allowance Mata ni Tikina Allowance Total Actuals ($) 1,987,292 509,259 25,000 536,500 214,300 3,272,351 Although quarterly reports have been provided by the Board to the Ministry, the accounts of the Board have not been audited since 2008.

Refer to Table 5.4 for details.
1 Ministry of Finance Instruction 2010 – Section 16 (3) 2 Ministry of i- Taukei Affairs Finance Manual 2015 - Section 3.3.1 (3) Ministry of i-Taukei Affairs Section 05: Page 3 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ____________________________ Table 5.4: Details of pending audited financial statements for i-TAB Year 2008 2009 2010 2011 2012 2013 2014 2015 Total Remarks Actual Grant Amount ($) 14,547,214 Yet to be submitted for audit 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 the timely submission of annual accounts for audit, there is a risk that funds provided by the Ministry are not being utilised for its intended purpose.
Recommendations  The Ministry should ensure that the i-Taukei Affairs Board provides the audited financial statements in a timely manner; and  To improve compliance, the Grant Agreement between the Ministry, and i-Taukei Affairs Board should include the submission of draft financial statements for audit as one of the key deliverables of the Board.
Management Comments Current Status for Annual Accounts Submission Station Ba Bua Cakaudrove Kadavu Lau Lomaiviti Macuata Nadroga Naitasiri Namosi Ra Rewa Serua Tailevu TAB Last Audited Accounts 2000 2002 2001 2001 2002 2004 2004 2001 1999 2000 1999 2001 2001 2001 2000 2017 March PAC Update on Annual Accounts Submission to OAG 2002-2006 2003-2007 2004-2007 2002-2007 2003-2006 2005-2007 2005-2007 2002-2007 2000-2007 2001-2007 2000-2007 2002-2006 2002-2005 2002-2005 2001-2007 Current Status of Annual Accounts Submission to OAG 2002-2007 2003-2007 2004-2007 2002-2007 2003-2007 2003-2007 2004-2007 2002-2007 2000-2007 2001-2007 2000-2007 2002-2007 2002-2007 2002-2007 2001-2007 Remarks on Target to Submit Annual Accounts up to 2007 Target Submission – 89 Annual accounts Achieved – 89 Annual accounts submitted to OAG The Board targets to submit 93 annual accounts in 2017 i.e.
i-TAB: 2008-2016 accounts (9years) and 14 Provincial Councils accounts for 6 years (2008-2013).
Ministry of i-Taukei Affairs Section 05: Page 4 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ____________________________ 5.5 Unsigned Agreement with Native Reserve Commission A grant agreement must provide for the organisation or person receiving the grant to agree to keep proper files and accounting records in relation to the grant and to make these files and records available upon request by the administering agency or the Auditor-General.
3 The Ministry disbursed a sum of $153,975 to the i-Taukei Reserve Commission in 2016.

The grant was provided to assist the Commission in meeting its operational needs.

The audit noted that the grant agreement between the Ministry and the i-Taukei Reserve Commission for the financial year 2016 was not signed by both parties until 17/02/17 or more than six months after the financial year had lapsed.

However, the Ministry continued to disburse funds to the Commission without the signed agreement.
Failure to have a signed agreement prior to the release of grant indicates that the agreement is not legally binding and may result in funds not being utilised for the intended purpose.

Recommendation The Ministry should ensure that the grant agreement is signed on a timely basis and prior to disbursement of funds.

Management Comments The comment highlighted is duly noted however the holdup was due to the amendment made to the Grant Agreement from 12 months to 7 months financial period 2016.
5.6 Scholarship Bond Recovery Balances Not transferred to TSLB The Tertiary Scholarships and Loans Board (TSLB) was established by the Tertiary Scholarships and Loans Decree 2014 to handle all administration of scholarships effective from 18 December 2013.

All administration of scholarship is to be handled by TLSB from 2014.

All Scholarships records including the Scholarships 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 balances for scholarship bond recovery were still reflected in the Ministry’s general ledgers despite the transfer of the administration of scholarships to the TSLB from 2014.

Refer to Table 5.5 for details.
Table 5.5: Scholarship Bond Recovery Account Balance Account Type Account Description Domestic Bank Balances 1-05101-05101-520415 Term Loans Receivable -Clearing Account 1-05101-05101-391206 BSP/CNB-Indigenous Affairs Scholarship Pay Loan-FAB (investing revenue) 2016 ($) 2015 ($) 2014 ($) 116,158 600,331 575,550 (15,843) (24,821) (169,295) 3 Finance Instructions 2010 – Section 16(3) Ministry of i-Taukei Affairs Section 05: Page 5 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ____________________________ In addition to the above, the Ministry’s state revenue included loans amounting to $15,843 recovered from students in 2016 whilst the scholarship administration has been transferred to the Tertiary Scholarships and Loans Board in 2014.
Despite the issue being raised in previous years audit reports, no action has been taken to address the issue.

The delay in transfer bond recovery balances to the TSLB has resulted in the Ministry recording revenue which it is no longer required to collect.

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.
Management Comments DCS will be meeting with Mr Kenneth Brown (Principal Accounts Officer – Treasury) to discuss on transfer of Scholarship Bond Recovery Account to TSLB.
5.7 Diversion of Funds without Proper Approval In cases where it has been determined that funds approved for this initiative has been used for other purposes other than what it was approved for, the Chief Accountant - Treasury with the approval of the Permanent Secretary of Finance shall deactivate the account.4 The Ministry of Economy had allocated funds from Head 50 to the Ministry totalling $37,676 for the purchase of the Ministry’s new office equipment through the standard liability account allocation 1- 05101-05101-840101.
The audit noted that the Ministry spent $24,882 for the purchase of new office equipment and the remaining balance of $12,794 was used to pay for NEC employee wages for which prior approval of Ministry of Economy was not obtained.
Refer to Table 5.6 for details: Table 5.6: Details of funds utilization Date Cheq/EFT # Particulars 10/05/16 4215 29/06/16 4652 Payment of 13 x Dell Optiplex 3020SFF Business Class & 1 Dell Latitude Series Business Notebook Payment of Various Inkjet & Coloured Ink Total for new office equipment purchases Payment of NEC Employee Wages Total funds allocated for new office equipment Amount ($) 24,282 600 24,882 12,794 37,676 Remarks Funds Utilised purpose for intended Funds Utilised purpose for intended Funds Utilised for purposes it was not intended for.
The above finding indicates non-compliance to government finance regulations.

4 Standard Liability Account (SLG 84) Reporting Guide Appendix 1 – Paragraph 10.1 Ministry of i-Taukei Affairs Section 05: Page 6 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ____________________________ Recommendations The Ministry should ensure that:  funds are utilised for the purpose it has been approved for; and  disciplinary action is taken against responsible officers for any future non-compliance.
Management Comments The findings of the auditors are hereby noted.

The Ministry admits that this was an oversight on our part and we have strengthened our verification process and to strictly adhere to the Ministry Finance Manual and Financial guidelines to ensure that it is not repeated.
Ministry of i-Taukei Affairs Section 05: Page 7 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017____________________________________ SECTION 6 MINISTRY DEFENCE, OF SECURITY AND IMMIGRATION NATIONAL Roles and Responsibilities Ensuring the safety and security of the Fijian people is one of Government’s most sacred obligations.

This is something that only Government can do, and it goes to the core of people’s faith in their Government.
The Ministry of Defence, National Security and Immigration ensures peace and stability in Fiji by coordinating and supervising all activities and functions of Government concerned directly with national security.

The Ministry the implementation of security-related legislation and policy initiatives, managing national crises and emergencies, aerial surveillance and search-and-rescue operations.
is responsible for Through the Security Forces Division, it coordinates with the Fiji Police Force and Republic of Fiji Military Forces on security matters.

The Security and Assessment Divisions are responsible for the coordination of Government’s intelligence and security requirements.

Government is also responsible for managing and protecting Fiji’s borders to ensure the legal and orderly flow of citizens and visitors in and out of the country.
The Department of Immigration is responsible for facilitating clearance of all inward and outward passengers, vessels and aircrafts, detention and deportation, combating the trafficking of persons, determining refugee status and managing migration.

The Department issues passports, visas, permits and citizenship.
Table of Contents PART A: FINANCIAL STATEMENTS ..................................................................................................................................... 1 6.1 Audit Opinion ...................................................................................................................................... 1 6.2 Statement of Receipts and Expenditure ............................................................................................. 2 6.3 Appropriation Statement ..................................................................................................................... 2 PART B: AUDIT FINDINGS ..................................................................................................................................................... 3 DEPARTMENT OF DEFENCE AND NATIONAL SECURITY ...................................................................... 3 6.4 Accounting for Security License Fees ................................................................................................ 3 6.5 Provisional Tax not withheld ............................................................................................................... 4 DEPARTMENT OF IMMIGRATION .............................................................................................................. 5 6.6 Unreconciled Passport Revenue ........................................................................................................ 5 6.7 Untimely Preparation of Reconciliations ............................................................................................. 6 Incorrect Payment of VAT ................................................................................................................... 7 6.8 PART A: FINANCIAL STATEMENTS 6.1 Audit Opinion The audit of the 2016 accounts of the Ministry of Defence, National Security and Immigration resulted in a qualified audit opinion.
The qualification was due to the following: Ministry of Defence, National Security and Immigration Section 6: Page 1 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017____________________________________  There was an unreconciled variance of $94,196.80 between the receipts generated by Integrated Border Control Management System (IBMS) and manual receipts issued and the amount posted in the General Ledger (FMIS).
6.2 Statement of Receipts and Expenditure The Ministry of Defence, National Security and Immigration recorded revenue totalling $7,241,900 and incurred expenditure totalling $4,356,762 for the seven months period ended 31 July 2016.
Table 6.1: Statement of Receipts and Expenditure for 2016 Description REVENUE State Revenue Agency Revenue Total Revenue EXPENDITURE Established staff Government wage earners Travel and communications Maintenance & operations Purchase of goods and services Operating grants and transfers Special expenditures Total Operating Expenditure Capital Constructions Capital grants and transfers Total Capital Expenditure Value Added Tax Total Expenditure 31 July 2016 ($) 31 December 2015 ($) 7,197,715 44,185 7,241,900 11,174,929 46,472 11,221,401 2,472,932 181,412 180,951 408,727 617,027 10,708 284,695 4,156,452 16,227 29,951 46,178 4,178,502 308,732 321,520 549,157 1,077,042 30,826 348,933 6,814,712 - - - 154,132 313,693 4,356,762 7,128,405 The financial year end for Government was changed from 31 December to 31 July in accordance with the Financial Management (Amendment) Act 2016.
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.

Capital expenditure in 2016 included expenses incurred for the construction of the National War Memorial and War Museum and the Integrated Passport Issuance System.
6.3 Appropriation Statement The Ministry of Defence, National Security and Immigration incurred expenditure totalling $4,356,762 in 2016 against a revised budget of $9,241,159, resulting in a saving of $4,884,397 or 53%.

The large savings was due to the budget being for the whole of 2016 while expenditures were only for seven months up to 31 July 2016.

Details of expenditure against the revised budget are provided in Table 6.2.
Ministry of Defence, National Security and Immigration Section 6: Page 2 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017____________________________________ Table 6.2: Appropriation Statement for 2016 SEG Item Established Staff Unestablished Staff Travel & Communication Maintenance & Operations Purchase of Goods & Services Operating Grants & Transfers Special Expenditure Total Operating Costs Capital Constructions Capital Grants and Transfers Total Capital Expenditure Value Added Tax TOTAL Budget Estimate ($) 4,322,710 277,249 217,930 567,837 1,140,872 35,200 489,061 7,050,859 1,060,000 750,000 1,810,000 380,300 9,241,159 Changes ($) (265,839) 57,639 52,955 152,459 76,861 0 (74,075) 0 0 0 0 0 0 Revised Estimate ($) 4,056,871 334,888 270,885 720,296 1,217,733 35,200 414,986 7,050,859 1,060,000 750,000 1,810,000 380,300 9,241,159 Actual Expenditure ($) 2,472,932 181,412 180,951 408,727 617,027 10,708 284,695 4,156,452 16,227 29,951 46,178 154,132 4,356,762 Lapsed Appropriation ($) 1,583,939 153,476 89,934 311,569 600,706 24,492 130,291 2,894,407 1,043,773 720,049 1,763,822 226,168 4,884,397 PART B: AUDIT FINDINGS DEPARTMENT OF DEFENCE AND NATIONAL SECURITY 6.4 Accounting for Security License Fees Each journal voucher or input form shall be checked by the Accounts officer who must ensure that: i. ii.
iii.

vouchers are adequately supported; dollar values are accurately computed; the correct account codes have been debited or credited.1 The audit noted that all revenue receipts were posted to the Security License Fees allocation (1-06101- 00000-230400) irrespective of their nature.

Refer to Table 6.3 for details.
Table 6.3: Examples of other receipts posted in Security License Fees allocation Receipt Number 122660 122662 122666 122674 122677 122678 122690 122691 122696 122702 122704 122719 122736 Travel expenditure Joji & Alipate ATT 24-27/08/16 Particulars Being refund of double payment Receipt Date 05.02.16 10.02.16 Refund of Deposit AG's conference 16.02.16 01.04.16 Retirement of Accountable advance 15.04.16 29.04.16 01.06.16 02.06.16 06.06.16 15.06.16 15.06.16 30.06.16 29.07.16 Internet charges RFMF (RESF) Accountable advance payment Incidental retirement New Zealand PM's visit Reimbursement Accommodation & OPR Refund for refreshment Meal allowance -MSG Amount ($) 1,895.65 100.00 15,916.60 115.00 44.10 10,000.00 300.00 295.50 1,844.75 202.00 364.00 220.00 535.50 1 Ministry of Defence –Finance Manual Section 5.5.6.
Ministry of Defence, National Security and Immigration Section 6: Page 3 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017____________________________________ As a result of the above, there was a variance of $21,410 between revenue reflected in the Ministry’s 2016 Agency Financial Statements and the general ledger.

Details are shown in Table 6.4.


Table 6.4: Variance in revenue between financials and general ledger Revenue Security Industry License Fees Financial Statement ($) 22,775 General Ledger ($) 44,185 Variance ($) 21,410 Accounting for the above receipts under Security Licenses Fees revenue has resulted in the revenue and respective expenditure allocations from which refunds or reimbursements were sourced from being misstated.
Recommendations The Department should:   ensure that revenue is posted to correct allocation; and liaise with Ministry of Economy to create specific revenue allocations for other revenue collected by the Department.

Department’s Comments The Ministry wishes to acknowledge the finding and recommendations of the Auditor General’s Office.

We totally agree to the finding of the mis-posting of all receipts were posted to security license fees allocation which should be irrespective of their nature.
The Ministry has also taken corrective action to eliminate such action from continuing into the future.

The following are the proposed way forward as the corrective action to be undertaken by the Ministry: a.

The IWP of the Account officials inclusive of the Manager Corporate has been reviewed and to reflect in detail that that the process to be follow to avoid mis-posting as highlighted above; b.
The process will be articulated into the Standing Operating Procedures [SOP] that the Ministry will be developed to improve its systems and processes; c. The Manager Corporate Services Business Plan will incorporate the changes that are highlighted above to ensure proper monitoring of procedures; and d. The Ministry have also developed a checklist to ensure that the full processes are followed in line with the SOP.
6.5 Provisional Tax not withheld A business making commission payment or payment under a contract for services where there is a written agreement is required to withhold 5% withholding tax (also known as provisional tax)… 2 The Department engaged a consultant to prepare the National Security Strategy and draft papers for the National Security Council.

The audit noted that provisional tax was not deducted and remitted to Fiji Revenue & Customs Authority from the consultancy fees paid to the consultant.
A sum of $21,236.28 was paid to the consultant.

Failure to deduct and remit provisional tax is a violation of the Income Tax Act.

2 FRCA Fiji Tax & Customs Summary – Clause 19 Ministry of Defence, National Security and Immigration Section 6: Page 4 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017____________________________________ Recommendation The Ministry should ensure that provisional tax is deducted from any commission payment or payments made under a contract for services.
Department’s Comments The Ministry acknowledges the finding of the Audit Team and also the recommendation of the Auditor General.

We do confirm that the oversight on the Ministry’s part is the non-payment of the provisional tax that was not deducted and remitted to Fiji Revenue & Customs Authority [FRCA] from the consultancy fees paid to the consultant.
As a way forward, it is proposed that we undertake the following proposals:  Engage with the Ministry of Economy on processes to be carried out by the Ministry to rectify this oversight;  Possibly seek the support of the consultant in the payment of the tax to FRCA;  Ensure that provisional tax is deducted from any commission payment or payments made under a contract for services; and  Further, we will incorporate this as part of our improvement in the SOP that we are developing.
We will also as part of our improvement and alignment to SOP’s we will also incorporate these in into the IWP’s of the Accounts Officer and all the processing line of the accounts section.
DEPARTMENT OF IMMIGRATION 6.6 Unreconciled Passport Revenue Each Accounting Head must ensure that the recording of revenue is reconciled monthly with the Ministry of Finance.3 The audit noted an unreconciled variance of $94,196.80 between the receipts generated by Integrated Border Control Management System (IBMS) and manual receipts issued and the amount posted in the General Ledger (FMIS).

Refer Table 6.5 below for details.
Table 6.5: Variance in revenue balances Receipts as per IBMS generated (new) report Revenue collected overseas – Receipts posted by Foreign Affairs and Ministry of Economy Receipts as per Manual record (4 stations) Total Receipts collected from January - July 2016 Balance as per GL FMIS 1-06201-70999-230306 Variance Total Receipts (VIP) $ VAT ($) 5,153,286.00 425,500.68 2,255,432.06 186,228.34 Actual Receipts (VEP) $ 4,727,785.32 306,228.54 2,069,203.72 7,103,217.58 7,197,414.38 94,196.80 Furthermore, the Department did not have any supporting documents for overseas remittances (immigration revenue collected overseas) totalling $306,228.54 that were posted in the general ledger by the Ministry of Economy and Ministry of Foreign Affairs.
3 Finance Instruction 2010 – Section 21 (1) (c) Ministry of Defence, National Security and Immigration Section 6: Page 5 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017____________________________________ The audit finding indicates that the Accounting Head responsible did not ensure that the IBMS records and manual receipts to the General Ledger (FMIS) were properly reconciled and relevant supporting documents were held for amounts remitted from overseas.
Recommendations The Department must:   ensure that the passport revenue as per the IBMS system and manual receipts are reconciled with the general ledger balance at the end of each month and variances are investigated and rectified; and ensure that supporting documentation is maintained for all funds remitted from overseas before these are posted to the general ledger and documentation is provided for audit verification.

Department’s Comments Your comments are noted.


The International Border Management System (IBMS) is software purchased by the Department in 2012 to automate its processes.

Of the 11 modules one is the receipting module whereby all revenue collected by the Department for its services is done electronically.

This system is not linked to government’s FMIS so all revenue receipted by IBMS is journalized and posted to FMIS daily.
Also, note that Fiji embassies around the world also provide Immigration services to current and former Fiji citizens in the respective countries and collect revenue for the service rendered.

This revenue is sent to the Ministry of Foreign Affairs who raises the necessary journals to be posted directly to FMIS, the Department do not have records of these transactions.

This is the reason there is a difference in the revenue balance between FMIS and IBMS.
In reconciling the difference highlighted in the report we determined that the Ministry of Foreign Affairs posted revenue to FMIS totalling $306,299.91.

This figure will not appear in the IBMS.

Also, the revenue receipted manually will not appear in the IBMS as it is posted directly to FMIS using the journal voucher.

There are four revenue streams that the Department receipts manually, namely Issue fees, Appeal fees, Uplift of Prohibited Immigrant fees, and Bond fees.
Other contributing factors to manual receipting include power outages and natural disasters that affect the supply of power hence; the cashiers have to resort to manual receipts so our services can continue.

Total revenue of $1,889,087.91 was manually receipted for the period 1/1-31/7/16.
6.7 Untimely Preparation of Reconciliations Within 3 days of receiving the monthly general ledger reports from the Ministry of Economy, CO- Reconciliation/the Assistant Accounts officer shall reconcile the ledger balances to the general ledger reports and prepare a ledger reconciliation statement.4 Audit review of the Department’s underline accounts revealed that monthly reconciliations were not prepared in a timely manner.
Instances were noted where reconciliations were prepared after two months of receiving the monthly general ledger reports from Ministry of Economy.

Failure to prepare the reconciliations on timely manner may result in errors and incorrect postings not being detected in a timely manner.
4 DOI Finance Manual 2013 s.16.3.3 Ministry of Defence, National Security and Immigration Section 6: Page 6 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017____________________________________ Recommendation The Department should ensure that underline accounts reconciliations are prepared within 3 days of receiving the monthly general ledger reports from the Ministry of Economy.

Department’s Comments Your comments are noted.


The Department has ensured that ledger is updated and will be available for sighting upon request.
6.8 Incorrect Payment of VAT Value Added Tax (VAT) is a tax on spending that is levied on the supply of goods and services in Fiji at the rate of 9%, with effect from 1 January, 2016.5 Audit review of the monthly VAT returns revealed that department calculated VAT at 15% resulting in an over payment of VAT to Fiji Revenue and Customs Authority amounting to $254,919.69.

Refer to Table 6.6 for details.
Table 6.6: Calculation of VAT output/input Details Jan 2016 paid in Feb 2016 Feb 2016 paid in Mar 2016 Mar 2016 paid in Apr 2016 Apr 2016 paid in May 2016 May 2016 paid in Jul 2016 Jun 2016 paid in Jul 2016 TOTAL Total Supplies subject to VAT Output Total Tax Vat paid on Local Supplies (Input Tax) Amount Pay–Audit6 Department calculation Variance To (45,126.94) (47,007.79) (52,686.51) (49,742.49) (31,065.01) (29,290.95) (254,919.69) The above anomaly could have been avoided if the Senior Accounts Officer responsible was conversant with the changes in the VAT rates.
Recommendations  The Department should liaise with FRCA and offset the VAT overpaid with the current VAT payable; and  The Senior Accounts Officer should be cautioned for the oversight.

Department’s Comments 5 http://www.frca.org.fj/value-added-tax/ 6 Calculation performed by audit based on 9% VAT Ministry of Defence, National Security and Immigration Section 6: Page 7 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017____________________________________ Your comments are noted.
The Department will make arrangements with FRCA, as we have done before, to offset the overpaid VAT with the current VAT payable.
Ministry of Defence, National Security and Immigration Section 6: Page 8 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 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.
Table of Contents PART A: FINANCIAL STATEMENT ........................................................................................................................................ 1 7.1 Audit Opinion ............................................................................................................................................................. 1 7.2 Statement of Receipts and Expenditure .................................................................................................................... 2 7.3 Appropriation Statement ........................................................................................................................................... 2 7.4 Trust Fund Account Statement of Receipts and Expenditure ................................................................................... 3 Occupational Health and Safety Trust Statement of Receipts and Payments ............................................... 3 7.4.1 Child Labour Unit Trust Statement of Receipts and Payments ...................................................................... 4 7.4.2 Employment Relations Agency Trust Statement of Receipts and Payments ................................................. 4 7.4.3 National Employment Centre Trust Statement of Receipts and Payments .................................................... 4 7.4.4 7.4.5 OHS Consultancy Services, Workmen’s Compensation and Wages Dispute Trust (WBC) Statement of Receipts and Payments .................................................................................................................................................. 5 PART B: AUDIT FINDINGS ..................................................................................................................................................... 6 7.5 Excessive Annual Leave ........................................................................................................................................... 6 7.6 Over Expenditure
 ...................................................................................................................................................... 7 7.7 Anomalies for Internal Audit ...................................................................................................................................... 8 7.8 Misallocation of Expenditure ..................................................................................................................................... 9 7.9 Stale Cheques not Journalised for Drawings Account ............................................................................................ 10 7.10 Anomalies noted in Main Trust Funds Accounts ..................................................................................................... 11 PART A: FINANCIAL STATEMENT 7.1 Audit Opinion The audit of the 2016 accounts of the Ministry of Employment, Productivity and Industrial Relations resulted in the issue of a qualified audit report.
The qualification issue related to the Drawings Account balance of $206,037 which include stale cheques totaling $97,416 which were not journalized at financial year end.

As a result, the Drawings Account balance and expenditure of the Ministry was overstated by $97,416.
Ministry of Employment, Productivity and Industrial Relations Section 07: Page 1 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ____________________________ 7.2 Statement of Receipts and Expenditure The Ministry collected revenue totalling $3,935 and incurred expenditure totalling $7,628,074 for the seven months period ended 31 July 2016.

Refer to Table 7.1 for details.
Table 7.1: Statement of Receipts and Expenditure for 2016 Descriptions July 2016 ($) 2015 ($) RECEIPTS State Revenue Commission Total State Revenue Agency Revenue Miscellaneous 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 Purchase Total Capital Purchase Value Added Tax TOTAL EXPENDITURE 1,793 1,793 2,142 2,142 3,935 30 30 - - 30 4,081,620 2,454,055 199,965 202,746 307,370 158,373 349,949 310,717 775,654 785,038 30,384 137 3,420,581 8,082,537 7,331,647 13,827,479 493 493 295,934 - - 1,478,430 7,628,074 15,305,909 The financial year end for Government was changed from 31 December to 31 July in accordance with the Financial Management (Amendment) Act 2016.
The financial statements for the period ended 2016 reflect transactions for a 7 – 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.

7.3 Appropriation Statement The Ministry incurred expenditure totalling $7,628,074 in 2016 against the revised budget of $17,284,164 resulting in savings of $9,656,090 or 55%.
The large savings was due to the budget being for the whole of 2016 while expenditures were only for seven months up to 31 July 2016.

Details of expenditures against the budget estimates are provided in Table 7.2.
Table 7.2: Appropriation Statement as at 31 July 2016 SEG Item Budget Estimate ($) Changes ($) Revised Estimate ($) a 1 2 Established Staff Government Wage Earners 4,309,847 199,971 (110,268) 110,268 4,199,579 310,239 Ministry of Employment, Productivity and Industrial Relations Actual Expenditure ($) b 2,454,055 202,746 Lapsed Appropriation ($) (a-b) 1,745,524 107,493 Section 07: Page 2 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ____________________________ SEG Item Travel & Communications Maintenance & Operations Purchase of Goods & Services Operating Grants & Transfers Special Expenditures Total Operating Expenditure Capital Purchase Total Capital Expenditure Value Added Tax TOTAL EXPENDITURE Budget Estimate ($) 372,495 440,300 1,379,900 55,000 9,425,651 16,183,164 50,700 50,700 1,050,300 17,284,164 Changes ($) (5,000) 70,310 (45,310) (10,000) (10,000) --- --- --- --- --- Revised Estimate ($) a 367,495 510,610 1,334,590 45,000 9,415,651 16,183,164 50,700 50,700 1,050,300 17,284,164 Actual Expenditure ($) b 158,373 310,717 785,038 137 3,420,581 7,331,647 493 493 295,934 7,628,074 Lapsed Appropriation ($) (a-b) 209,122 199,893 549,552 44,863 5,995,070 8,851,517 50,207 50,207 754,366 9,656,090 7.4 Trust Fund Account Statement of Receipts and Payments 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 (WBC) 7.4.1 National Occupational Health and Safety Trust Statement of Receipts and Payments The National Occupational Health & Safety Education and Accident Prevention Trust Account collected $813,827 and made payments totalling $721,833 for the seven months period ended 31 July 2016.
Table 7.3: OHS Education and Accident Prevention Trust Statement of Receipts and Payments Descriptions RECEIPTS OHS Trust Fund Total Receipts PAYMENTS OHS Trust Fund Total Payments Net Surplus Balance as at 1 January Closing Balance as at 31/07/16 July 2016 ($) 2015 ($) 813,827 813,827 1,925,298 1,925,298 721,833 721,833 91,994 5,241,937 5,333,931 1,409,169 1,409,169 516,129 4,725,808 5,241,937 Ministry of Employment, Productivity and Industrial Relations Section 07: Page 3 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ____________________________ 7.4.2 Child Labour Unit (CLU) Trust Statement of Receipts and Payments The Child Labour Unit Trust Account did not collect any receipts but made payments totalling $2,759 for the seven months period ended 31 July 2016.
Table 7.4: CLU Trust Statement of Receipts and Payments Descriptions RECEIPTS CLU Trust Fund Total Receipts PAYMENTS CLU Trust Fund Total Payments Net (Deficit)/Surplus Balance as at 1 January Closing Balance as at 31/07/16 July 2016 ($) 2015 ($) - - 10,995 10,995 2,759 2,759 (2,759) 7,406 4,647 4,566 4,566 6,429 977 7,406 7.4.3 Employment Relations Agency Trust (ERT) Statement of Receipts and Payments The Employment Relations Agency Trust Account received a sum of $69,096 and made payments totalling $3,234 for the seven months period ended 31 July 2016.
Table 7.5: ERT Trust Statement of Receipts and Payments Descriptions RECEIPTS ERT Trust Fund Total Receipts PAYMENTS ERT Trust Fund Total Payments Net Surplus Balance as at 1 January Closing Balance as at 31/07/16 July 2016 ($) 2015 ($) 69,096 69,096 231,702 231,702 3,234 3,234 65,862 335,865 401,727 3,448 3,448 228,254 107,611 335,865 7.4.4 National Employment Centre (NEC) Trust Statement of Receipts and Payments The National Employment Centre Trust Account received funds amounting to $16,619 and made payments totalling $1,752 for the seven months period ended 31 July 2016.
Table 7.6: NEC Trust Statement of Receipts and Payments Descriptions July 2016 ($) 2015 ($) RECEIPTS NEC Trust Fund 16,619 47,307 Ministry of Employment, Productivity and Industrial Relations Section 07: Page 4 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ____________________________ Descriptions Total Receipts PAYMENTS NEC Trust Fund Total Payments Net Surplus /(Deficit) Balance as at 1 January Closing Balance as at 31/07/16 July 2016 ($) 16,619 1,752 1,752 14,867 195,357 210,224 2015 ($) 47,307 353,425 353,425 (306,118) 501,475 195,357 7.4.5 OHS Consultancy Services, Workmen’s Compensation and Wages Dispute Trust (WBC) Statement of Receipts and Payments This account comprises of Wages Disputes, Workmen’s Compensation and OHS Consultancy.
The purpose of the respective accounts are as follows:  Workmen’s compensation – compensation that is paid to workmen and their dependents are first placed in the trust account before it is paid to them.

 Wages dispute – has the arrears of wages owed by employers to workmen.

These are first placed in the trust account before it is paid out to them.

 OHS consultancy – OHS officers usually carry out overtime for clients.
Overtime is paid into the trust account by clients and is later paid out to OHS officers.

Also, the project officer’s salaries are paid from OHS Trust Account to OHS consultancy from where it is being paid to relevant SEGs.

The WBC Trust Account received a sum of $3,432,382 and made payments totalling $2,874,941 for the seven months period ended 31 July 2016.
Table 7.7: WBC Trust Statement of Receipts and Payments Descriptions RECEIPTS Workmen’s Compensation Wages Dispute OHS Consultancy Total Receipts PAYMENTS Workmen’s Compensation Wages Dispute OHS Consultancy Total Payments Net Surplus Balance as at 1 January Closing Balance as at 31/7/16 July 2016 ($) 2,422,812 202,646 806,924 3,432,382 2,049,903 225,043 599,995 2,874,941 557,441 1,324,795 1,882,236 2015 ($) 4,189,213 562,328 1,427,482 6,179,023 3,963,750 644,541 1,200,155 5,808,446 370,577 954,218 1,324,795 Ministry of Employment, Productivity and Industrial Relations Section 07: Page 5 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ____________________________ PART B: AUDIT FINDINGS 7.5 Excessive Annual Leave The Permanent Secretary or Head of Ministry shall ensure scheduling of leave to avoid bulging of leave entitlements at any time of the year.
Officers may be allowed to carry over up to a maximum of ten working days leave entitlement from one leave year to the next.1 Due to Government’s stringent control of funds, the compensation of accumulated leave will not be entertained and officers are encouraged to utilize their accumulated leave on a piece meal basis.2 Audit noted that leave compensation totalling $32,579.67 was paid to some staffs in the financial year upon their resignation or retirement from service.
Refer to Table 7.8 for details: Table 7.8: Details of Leave Compensation Date EDP Details Cheque No 5809 21/7/16 55550 5258 10/5/16 62928 Compensation of leave for the following: •29.75 consecutive days of annual leave - $6,839.18 •28 consecutive days of long service leave- $4,597.76 •759.5 time off hours at year 2003 salary- $5,986.38 Leave compensation of 42 days =58.8 consecutive days 39535 21/4/16 54480 leave compensation of 20.25 days(19 days of annual leave carried forward to new leave year in 2016), 20.25 days balance= 28.35 consecutive days Total Amount ($) 17,423.32 9,569.70 5,586.65 32,579.67 Audit also noted from the annual leave records of the Ministry that some officers have accumulated leave balance in excess of 10 working days.
The above finding indicates that the Ministry was not able to effectively manage the annual leave of its staffs.

Recommendation The Ministry should ensure that annual leave of staffs are rostered and staffs encouraged to take leave when due.

Ministry’s Comments The Auditor’s comments are noted.

The Ministry is trying its best to improve management of leave.

We have prepared leave schedules and are reminding staffs at the beginning of each month to take their leave as planned.
The Ministry will adhere to the Regulations governing the administration of leave as stipulated in the General Orders.

1 General Order 705 (c) 2 PSC Circular No.
53/2009 – Effective Leave Administration dated 03/11/09 Ministry of Employment, Productivity and Industrial Relations Section 07: Page 6 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ____________________________ 7.6 Over Expenditure The Senior Accountant or Accountant 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 and the expenditure account it is charged to is correct.
3 Agencies must ensure that there is no over-expenditure and that the accounts are paid and charged correctly to allocations within the 2016 financial year.

All payments for expenditure incurred in 2016 should be made by 4:00pm on 22nd July 2016.4 Audit of payments revealed the following instances which indicate over expenditure of the Ministry:  The Ministry made payments totalling $44,901.75 for some of expenditure which related to financial year ending 31 July 2017.
These payments were made towards the end of the financial year 2016 and were based on an estimate.

Refer to Table 7.9 for details.

Table 7.9: Details of Advance Payments Date Details EFT No.
22/7/16 05836 Estimated payment for mobile usage for month of August 22/7/16 05835 Estimated payment for telephone usage for month of August 22/7/16 05814 Estimated payment for power supply for month of August 20/7/16 05794 Estimated payment for fuel expenses for month of August Total Total Amount5 ($) 3,536.45 10,040.50 17,154.80 14,170.00 44,901.75  The Ministry paid a sum of $16,093.84 for overdue electricity account of Ministry of Civil Service which is yet to be reimbursed.
Refer to Table 7.10 for details.

Table 7.10: Details of payments not reimbursed Date EFT No.

Details 07/06/16 05483 Payment made on behalf of Ministry of Civil Service from Ministry of Employment, Productivity and Industrial Relations for overdue accounts of electricity usage Total Amount6 ($) 16,093.84 The above payments indicate that the Ministry was utilizing budgetary savings at financial year end which were for the entire year.
Recommendations The Ministry should:  ensure that the practice of advance payments to utilize budgetary savings is ceased immediately; and 3 Ministry of Employment, Productivity and Industrial Relations Finance Manual 2013- Section 2.8.4,p art (i), (ii), (v) 4 Ministry of Finance Circular- Circular No.
04/2016, Objective 7.2.1 5 Vat Inclusive Tax Amount 6 Vat Inclusive Tax Amount Ministry of Employment, Productivity and Industrial Relations Section 07: Page 7 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ____________________________  follow up with Ministry of Civil Service for the re-imbursement.

Ministry’s Comments This was a normal practice by the Ministry for years.

We will seek the advice of Ministry of Economy on preparing advance payment in the future.
For the reimbursement of fund from Ministry of Civil Service to Ministry of Employment Productivity and Industrial Relations, we may not be able to prepare a Journal now since the 2016 account is closed however we will make sure this is not repeated in the future.
7.7 Anomalies in engagement of ISO Auditor The guiding principles of procurement requires that any procurement of goods, services or works shall be issued so as to promote value for money and maximize economy and efficiency and the ethical use of government resources.

7 Permanent Secretaries and Heads of Departments were advised that all Government contracts are to be vetted by the Solicitor General’s Office during negotiations stage and as well as prior to its execution.
This is to ensure that the Government’s legal recourse and exposure are properly considered and protected.8 Due diligence is an integral part of the evaluation process that must be completed prior to awarding of the contract.

During this phase, government agencies must check all the terms and conditions against the supplier’s information as well as seek further information from the relevant authorities to verify the information provided.
The process of due diligence will enable the Ministry to test the contractor’s ability to fully perform the required standard of work.

9 The Senior Accountant or Accountant must not certify a payment as correct unless they are satisfied that there is documentation that the works have been carried out.

10 The Permanent Secretary of Finance under FI 72 (1) has the authority to authorize the conduct of any audit of an agency for the purposes specified in the FI.
11 The Ministry contracted “Independent European Certificate (ASIA) Sdn.

Bh” located in Malaysia to carry out audit of ministry’s standing order procedures in view of aligning it to ISO 9001 certification.

A total sum of $272,116.5212 was paid to the consultants to carry out this audit.
Audit review revealed the following anomalies in the above engagement:  Documentary evidence was not provided to audit for ascertaining the selection process of the consultant;  There was no evidence to indicate that the agreement with the consulting company was vetted by the Solicitor-General’s Office; and  Payment of $37,560.8913 made through cheque 39598 of 20/5/16 for balance of 50% of the Compliance audit and auditor’s travelling expenses was not properly supported.
7Fiji Procurement Regulation 2012, section 3 (1) 8Public Service Circular 33/2013 on Government Contract and Ministry of Finance Circular 3/2013, clause 4.1 and 3.3 9Ministry of Finance Circular 8/2013, clause 2.3 and 2.4 – Conducting Due Diligence Prior to Finalizing Contracts 10Ministry of Employment, Productivity and Industrial Relations Finance Manual 2013- Section 2.8.4 (ii) 11 Ministry of Employment, Productivity and Industrial Relations Finance Manual 2013-Section19.1.1 12 VIP as per FMIS General Ledger allocation- 1-07101-07101-050301 13 VIP Ministry of Employment, Productivity and Industrial Relations Section 07: Page 8 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ____________________________ Refer to Table 7.11 for details Table 7.11: Detail of major payments made to Independent European Certificate (ASIA) Date Cheque No.
18/3/16 39478 18/3/16 39477 20/5/16 39598 Total Amount14 ($) Details Remarks 165,497.20 Being payment to “Independent European Certficate (ASIA) Sdn.

Bhd’ for the 50% payment of compliance audit, and 100% payment of surveillance audit year 2016.
Cost benefit analysis not provided for the expenditure 45,805.27 VAT charge reversal and withholding tax for payment made through cheque 39478 of 18/3/16 the 50% of 37,560.89  Balance of Compliance audit and  Airfare, and land transport costs borne by international auditors Cost benefit analysis not provided for the expenditure ISO Company failed to provide supporting documents to claim payment such as invoice with itinerary for airfare, 3 quotations for airfare and reason for the 4th auditor taking different route (transit Australia) for which the Ministry borne the cost.
Total 248,863.36 The audit findings indicate the engagement of the consultant was not properly managed and the proper processes were not followed for payment.

Recommendations The Ministry should ensure:   contracts should are vetted by the Solicitor General’s Office prior to engagement; and payments made are properly supported.

Ministry’s Comments Yes, we agree that the original Contract with the ISO Certification Company “INDEPENDENT EUROPEAN CERTIFICATION (ASIA) SDN.
BHD” in 2013 was vetted by the SG’s Office.

However, we cannot trace any records.
7.8 Misallocation of Expenditure Expenditure of money appropriated by an Appropriation Act may be incurred only in accordance with the authorisation effected by the Appropriation Act as indicated in the Act and any applicable appropriation categories specified in relation to the head of appropriation.15 Each year the Appropriation Act and the Budget Estimates set out details of the appropriations that Cabinet approves for spending by each agency.16 14 VIP 15 Financial Management Act 2004 – Section 14 (1) Ministry of Employment, Productivity and Industrial Relations Section 07: Page 9 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ____________________________ Audit review of a sample of payments revealed instances where payments were incorrectly allocated in the general ledger.
Refer to Table 7.12 for examples.

Table 7.12: Expenditure Recorded Contrary to Budget Appropriation of Recorded In Anomalies Date 14/3/16 Cheque No.
39469 07/4/16 39687 04/2/16 4700 Amount ($) 12,384.4717 Payment Description Expenditure for fee of Master’s program for Ministry’s Doctor -(Unit- AVME801) 13,002.2018 Payment for fee of Master’s program for Ministry’s Doctor -(Unit- AVME802) 1-07103-91011-050405 (Training- OHS Promotion) 1-07103-91011-050405 (Training- OHS Promotion) 8,220.18 Purchase of Laptops for OHS training.
1-07103-91011- 050810- (OHS Board Allowance) on the Approved understanding that it will once be refunded NOHSAB would sit, however $12,384 was not refunded to Training allocation.

NOHSAB related expenditure paid from operating expenditure 9 The laptops purchased were solely for the purpose of OHS training, however OHS Board allowance allocation was utilised transferring without back.
TOTAL 33,606.55 Incorrect allocation of payments resulted in misstatement of Training -OHS Promotion account allocation and OHS Board Allowances account allocations at financial year-end.

Recommendation The Ministry should ensure that expenditures are recorded in the correct general ledger allocation.

Ministry’s Comments We will abide by your recommendation and we will make sure this is not repeated in future.
7.9 Stale Cheques not Journalised for Drawings Account Specimen signatures of cheque and encashment signatories, and details of any conditions of appointment, must be submitted to the Chief Accountant.19 The Accounting Head must make all attempts to issue stop notices for all cheques that have remained un-presented for more than 6 months.20 16 Finance Instructions 2010 – Section 7 17 VIP 18 VIP 19 Finance Instruction Section 33, subsection 1 20 Finance Instruction Section 33, subsection 2 Ministry of Employment, Productivity and Industrial Relations Section 07: Page 10 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ____________________________ Stale cheques (those which are at least 6 months old) must be reviewed each month to determine the need for a replacement cheque.
Where a replacement cheque is not required, action should be taken to clear it.21 The audit noted that stale cheques amounting to $97,415.89 existed in the unpresented cheque listing of the Drawings account as at 31 July 2016.

Refer to Table 7.13 for details.
Table 7.13: List of stale cheques Stale Cheque 38809 39258 39259 39261 39263 39276 39281 39353 39354 39356 39357 39358 39359 39360 39362 39365 Total Date Payee Amount ($) 19/08/15 ANARE TOMASI BULEWA 273.75 17/12/15 17/12/15 17/12/15 17/12/15 21/12/15 21/12/15 29/12/15 29/12/15 29/12/15 29/12/15 29/12/15 29/12/15 29/12/15 29/12/15 29/12/15 BILLUM CILIA LIGANIMASI TAU JOSHUA SEMISI SERU TAUBALE KALEVATI DROTAKI NACANIELI NARABE VAR AKARIVA MATANIWAI CHARLES STINSON ISOA VATURARABA JOPE SAREWA APIMELEKI KATONIB JOAPE KUINIKORO LORESIO JOPE TUILA N VEGA WAISEA SULIWALIWA 1,095.00 2,190.00 1,095.00 2,190.00 938.57 938.57 9,855.00 9,855.00 9,855.00 9,855.00 9,855.00 9,855.00 9,855.00 9,855.00 9,855.00 97,415.89 The above finding indicates that review of bank reconciliations were not effectively carried out.
Non-reversal of stale cheques has resulted in the balance of Drawings account and expenditures of the Ministry being overstated as at 31 July 2016.

Recommendation The Ministry should ensure that bank reconciliations properly reviewed and adjustments made where necessary.

Ministry’s Comments Please note that all the payments that were highlighted was for the Christmas Island veteran.

The exercise was a one-off payment and was only budgeted in 2015.
There were some consultations with Ministry of Economy in regards to the payment for Christmas Island.

The recommendation was to void the cheque but not cancel the voucher, which we did in 2016.

This is due to funding issues.

7.10 Anomalies noted in Main Trust Fund Account The Senior Accountant is responsible for the safekeeping and proper maintenance of all accounting records or documents.
22 21 Finance Instruction Section 33, subsection 2 22 Ministry of Employment, Productivity and Industrial Relations Finance Manual 2013- Section 18.1.3 Ministry of Employment, Productivity and Industrial Relations Section 07: Page 11 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 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 authorized to operate on it.23 Trust money is to be kept in a separate bank account.24 All agency bank accounts must be kept in the name of the agency or the official title of a unit within the agency.25 Trust money is money that the agency is holding in trust (it does not include creditor payments such as salary deductions or money that is held in a separate ‚trust fund‛ which is not a true trust) As stipulated in the Act and Finance Instructions, trust money is to be kept in a separate bank account and accounted for separately from “public money” and “other money”26.
Audit review of the Main Trust Fund Accounts revealed the following anomalies:  Credit balances totaling $30,921 as at 31/07/16 which have been brought forward from previous years could not be substantiated.

Refer to Table 7.14 for details.
Table 7.14: Unsubstantiated Main Trust Balances Allocation Account Name Amount ($) Comments 9-07101-07003-895002 Workmen’s Compensation 9-07101-07004-895003 Wages Dispute Total (7,956) The lump sum amount is carried forward in every month’s reconciliation without any details (22,965) The lump sum amount is carried forward in every month’s reconciliation without any details (30,921)  A variance of $920.68 was noted between the bank reconciliation and cash book reconciliation for the combined trust funds accounts.27 In absence of the supporting documents, the accuracy of the credit balance of $30,921 could not be established.
Therefore, there is a risk that the Main Trust Fund Accounts may be overstated by $30,921.

Although the variance is insignificant, there is a risk that it may increase to a significant amount in future.

Recommendations The Ministry should:  make concerted efforts to substantiate the credit balance; and  ensure that variance of $920.68 is investigated and rectified.

Ministry’s Comments This was an ongoing issue which was carried forward from 2008.
The Ministry was able to reconcile the Wages Disputes account.

There is a variance of $22,965.16 in which we will need Ministry of Economy advice.

For the Workman’s Compensation issue, the Ministry will need technical advice from Ministry of Economy to try to solve this issue.
23 Finance Instructions 2010- Section 32 (1) 24Finance Instructions 2010- Section 32 (3) 25 Finance Instructions 2010- Section 32 (4) 26 Ministry of Employment, Productivity and Industrial Relations Finance Manual 2013- Part 14 27Workmen’s Compensation, Wages Dispute and OHS Consultancy.
Ministry of Employment, Productivity and Industrial Relations Section 07: Page 12 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ____________________________ The new format was issued from Ministry of Economy in 2014.
Ministry of Employment, Productivity and Industrial Relations Section 07: Page 13 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ____________________________ Section 8 Ministry of Foreign Affairs Roles and Responsibilities Since adopting its “Look North Policy”, Fiji has become more confident in the conduct of its foreign policy.
Fiji has forged new relations with countries on all corners of the globe – in the Middle East, Latin America, Europe, Africa and Asia – and has assumed a greater voice in international forums, such as the United Nations, where it has been a strong advocate for other small island nations on issues like climate change.

Fiji’s commitment to the independent conduct of its foreign policy has enabled it to determine its own destiny.

Fiji intends to be a friend to all and enemy to none.
At the same time, Fiji is committed to working closely with the international community to bring about peace, justice, dignity and respect for all the world’s peoples.

Fiji is equally determined to continue to strengthen its leadership role in the region, working with its neighbours to resolve the great challenges Pacific island countries face to develop their economies and improve the lives of their peoples.
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 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.

The Ministry maintains diplomatic relations with as many countries as possible and in co-ordination with the line ministries focuses on promoting and advancement of Fijian interests in the areas of tourism, employment opportunities, and investment and trade.
In 2015, Government hosted the ACP/EU Joint Parliamentary Assembly held in June and the PIDF Summit which was attended by the Deputy PM Thailand held in August.
Table of Contents PART A: FINANCIAL STATEMENT .......................................................................................................................................... 2 8.1 Audit Opinion ................................................................................................................................... 2 8.2 Statement of Receipts and Expenditure ................................................................................................. 2 8.3 Appropriation Statement ..................................................................................................................... 3 PART B: AUDIT FINDINGS ....................................................................................................................................................... 3 8.4 Unreconciled Variance in Overseas Mission Bank Reconciliation ................................................................ 3 8.5 Revenues Collected by Overseas Missions ............................................................................................ 5 8.6 Significant amount of unretired accountable advance ............................................................................... 6 8.7 Variance in Ministry’s reconciliation and FMIS balance ............................................................................. 8 8.8 Anomalies noted for overseas travel ..................................................................................................... 9 8.9 Officers not bonded for overseas training ............................................................................................. 12 8.10 Capital Purchase expenditure allocation understated .............................................................................. 13 8.11 Anomalies noted in Foreign Missions monthly acquittal reports ................................................................. 15 8.12 Absence of supporting documents to verify payment of post allowances ..................................................... 16
16 8.13 Inconsistent Rates used to calculate Travel Allowances .......................................................................... 17 Appendix 8.1: Examples of revenue collected by overseas mission and not remitted to the relevant agencies ............ 20 Appendix 8.2: Outstanding advances to officer’s and Ministries/ Department ........................................................... 21 Ministry of Foreign Affairs Section 08: Page 1 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ____________________________ Appendix 8.3: Details of negative accountable advance balance ............................................................................ 23 PART A: FINANCIAL STATEMENT 8.1 Audit Opinion The audit of the 2016 accounts of the Ministry of Foreign Affairs resulted in the issue of an unqualified audit report.
8.2 Statement of Receipts and Expenditure The Ministry of Foreign Affairs collected revenue totalling $235,374 and incurred expenditure totalling $26,171,606 for the seven months period ended 31 July 2016.

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 2016 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 2016 ($) 2015 ($) The financial year end for Government was changed from 31 December to 31 July in accordance with the Financial Management (Amendment) Act 2016.
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.
Total revenue increased by $175,032 or 290% in 2016 compared to 2015 due to the introduction of new postings whereby revenue earned from services rendered in missions are being reflected in Ministry of Foreign Affairs Section 08: Page 2 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ____________________________ revenue allocation (Standard Revenue Group 27) and not in operating trust SLG 86 as was the previous practice.
8.3 Appropriation Statement The Ministry incurred expenditure totalling $26,171,606 in 2016 against the revised budget of $42,968,947 resulting in savings of $16,797,341 or 40%.

The large savings was due to the budget being for the whole of 2016 while expenditures were only for seven months up to 31 July 2016.

Details of expenditure against the budget estimates are provided in Table 8.2.
Table 8.2: Appropriation Statement for 2016 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 14,001,156 3,966,645 2,790,014 11,305,027 932,510 4,107,066 2,297,900 39,400,318 1,256,973 586,456 1,843,429 1,725,200 42,968,947 (410,253) 22,000 142,343 (598,318) 3,631 1,060,393 (444,988) (225,192) 225,192 225,192 ---- Revised Estimate ($) a 13,590,903 3,988,645 2,932,357 10,706,709 936,141 5,167,459 1,852,912 39,175,126 1,256,973 811,648 2,068,621 1,725,200 42,968,947 Actual Expenditure ($) b 8,112,472 2,314,685 2,213,025 7,866,241 439,574 3,709,985 622,943 2,5278,925 46,927 252,278 299,205 593,476 26,171,606 Lapsed Appropriation ($) (a-b) 5,478,431 1,673,960 719,332 2,840,468 496,567 1,457,474 1,229,969 13,896,201 1,210,046 559,370 1,769,416 1,131,724 16,797,341 PART B: AUDIT FINDINGS 8.4 Unreconciled Variance in Overseas Mission Bank Reconciliation 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 budgetary expenditure allocation.

1 Finance Instruction 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 – JUNE 2017 ____________________________ The cash held in overseas missions’ bank accounts totalled $7,918,927.29.
However, an unreconciled variance of $2,450,487.71 was noted between the FMIS general ledger balance $7,508,292.42 and the bank reconciliation of $5,057,804.71.

Refer to Table 8.3 for details.
Table 8.3: Variance in Bank Reconciliation and FMIS General Ledger Account Number Missions 1-08103-80102-510106 1-08103-80101-510107 1-08103-81001-510202 1-08103-80501-510401 1-08103-80701-510502 1-08103-80201-510504 1-08103-80201-510506 1-08103-80201-510507 1-08103-80301-510601 1-08103-81101-510801 1-08103-81102-510802 Washington 1-08103-80301-510901 1-08103-80405-510900 1-08103-80406-510901 1-08103-80601-510901 1-08103-80801-510902 1-08103-80401-510903 1-08103-80402-510905 1-08103-80403-510905 1-08103-80401-510908 1-08103-80401-510909 1-08103-80401-510910 1-08000-00000-510000 Fiji Consulate General Sydney FHC Canberra FHC London Fiji Embassy Tokyo FHC Wellington FHC Beijing Beijing RMB Account Beijing VISA Account Fiji Mission Brussels FHC UN Adis Ababa Cash Account Fiji Embassy Abu Dhabi Fiji Embassy Korea Bank in Kular Lumpur Closing Balance for PNG FHC New Delhi Fiji Embassy Indonesia Fiji Embassy Brazil Jakarta Rupiah Account India IND Rupee Account India Rental Account Total Overseas Bank Balances FMIS Balance as at 31/07/16 919,008.76 337,725.00 239,214.64 1,202,393.71 606,110.10 359,804.85 1,513.33 19,025.53 358,009.24 333,770.60 109,747.05 148,563.97 856,412.87 455,044.31 435,162.58 168,461.16 60,143.06 184,307.61 400,906.42 186,223.18 33,184.10 93,560.35 7,508,292.42 Bank Reconciliation Balance as at 31/07/16 - 1,806.74 63,589.20 1,186,943.03 520,568.80 136,144 (133,831.54) 11,799.07 304,554.48 285,509.28 157,670.41 154,494.11 636,660.70 376,578.17 445,502.81 209,391.05 105,886.38 259,254.93 209,170.30 21,714.65 39,012.59 65,385.55 5,057,804.71 Variance 919,008.76 335,918.26 175,625.44 15,450.68 85,541.30 223,660.85 135,344.87 7,226.46 53,454.76 48,261.32 (47,923.36) (5,930.14) 219,752.17 78,466.14 (10,340.23) (40,929.89) (45,743.32) (74,947.32) 191,736.12 164,508.53 (5,828.49) 28,174.80 2,450,487.71 The audit also noted that Fiji Consulate General Sydney was closed and transferred to Ministry of Industry, Trade & Tourism during the month of April 2016.
However, balance of $919,008.76 was still appearing under the Ministry’s head in the FMIS general ledger.

As a result, the audit could not ascertain the accuracy of the balances appearing under the above allocations in the FMIS general ledger.
Recommendations The Ministry should ensure that:  overseas missions bank balance is reconciled with the FMIS general ledger bank balance on a monthly basis and any foreign exchange gains or losses are adjusted immediately; and  balance of accounts at Fiji Consulate General Sydney are transferred to the Ministry of Industry, Trade & Tourism in consultation with the Ministry of Economy.
Ministry of Foreign Affairs Section 08: Page 4 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ____________________________ Ministry’s Comments The Ministry is currently undertaking new measures in the Missions acquittal postings as well as format of Mission’s Cash Account [Seg51] reconciliations whereby transactions are individually reflected in appropriate accounts and gain and loss are accounted monthly.
The new posting introduced reflects all monies received from Mission into Ministry’s revenue account in GL whereas in previous practice, they are reflected in Trust Fund allocations.

For expenses incurred in Missions are all accounted in respective Mission’s expenditure account whereas in previous practice, RBC account was used to debit respective expenses.

The Ministry wishes to assure of the required GL adjustments to be made with regards to the Fiji Consulate General Sydney.
8.5 Revenues Collected by Overseas Missions Fiji Mission’s in overseas collects revenue on behalf of other government departments in Fiji.

The revenue collected by the Missions is deposited into their respective overseas bank accounts and is deducted from the monthly remittances made to the Missions by the Ministry of Foreign Affairs.

However, the audit noted that the Ministry of Foreign Affairs does not remit this revenue (actual cash) to the relevant Ministries/Departments.
Further review of the 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 by all the Missions for the month and credits the respective government department’s revenue allocation without any actual cash being remitted to the respective Ministries/Departments.
The revenue collected is held in the Missions overseas bank accounts and recorded in the Overseas Cash (SAG 51) allocation.

Hence, the cash was available to the Missions to meet their operational expenses.

Refer to Appendix 8.1 for examples.

 The overseas Missions charged administrative fees in addition to the prescribed fees and charges for the services provided.

The administrative fees charged were not approved by Ministry of Economy.
The administrative fees collected by the overseas Missions were posted into the Operating Trust account instead of a revenue account.

However, the Ministry following the audit query raised for the financial period ended 2015 on the current treatment, journalized all the postings from 01/01/16 to 31/07/16 to the miscellaneous revenue allocation.

In addition, the Operating Trust account only had book entries and no actual cash was held by the Ministry.
Refer to Table 8.4 for the balances of administrative fees in FMIS Operating Trust account; Table 8.4: Operating Trust Account balance as at 31/07/16 in Allocation Description 1-08103-80101-863101 1-08103-80102-863101 Admin Contributions Foreign Mission Admin Contributions Foreign Mission Amount ($) (239,444.54) (330,157.99) Ministry of Foreign Affairs Section 08: Page 5 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ____________________________ Allocation Description 1-08103-80201-863101 1-08103-80401-863101 1-08103-80701-863101 1-08103-81001-863101 1-08103-81102-863101 Total Admin Contributions Foreign Mission Admin Contributions Foreign Mission Admin Contributions Foreign Mission Admin Contributions Foreign Mission Admin Contributions Foreign Mission Amount ($) (49,269.33) (3,261.14) (131,018.25) (23,961.59) (8,100.51) (785,213.35) The above findings show that the revenues collected by overseas missions were not properly accounted for by the Ministry.
Recommendations The Ministry should:    ensure that all revenues collected on behalf of other ministries/department by the overseas missions are deducted the respective Ministries/Departments; their remittances and remitted from to formalize the administrative fees to be charged by the Missions to facilitate the request or applications for government services; and ensure all the funds collected from the administrative fees are deducted from the overseas mission remittance, deposited into the Consolidated Fund Account and posted to the Ministry’s revenue allocation accordingly.
Ministry’s Comments The Ministry is currently accounting revenue by debiting Mission’s cash [Seg 51] and crediting Ministry’s miscellaneous revenue and other agencies account [Immigration, Justice].

The cash evolved within the whole of government cash system With the current arrangement, Immigration Department is recognizing credit send from Ministry of Foreign Affairs through BLC journals within.

It is to be noted that either of the system can be used and NOT both.
Its either directly crediting other agency accounts (Immigration & Justice) as per access given to us by Finance; or not to pass credit at all but issue cheque instead directly to these agencies.

To deposit actual cash in CFA will require us to make prior consultations with MOE, Missions and other government agencies in terms of processes and procedures that need to be implemented.
8.6 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.4 If an advance has not been fully expended, the travelling officer must repay the balance within seven days of completing travel.5 4 Ministry of Foreign Affairs and International Co-operation Finance Manual 2013 – Section 6.1.10 5 Ministry of Foreign Affairs and International Co-operation Finance Manual 2013 – Section 6.1.11 Ministry of Foreign Affairs Section 08: Page 6 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ____________________________ 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.6 The Accountant must also record the travel advance in the Accountable Advance Register.7 Any arrears of payments for an Accountable advance shall be repaid first before any other advance is allowed by the PSFA & IC.8 Audit review of the Revolving Fund Accounts records revealed the following anomalies:  The Ministry had an outstanding Accountable Advance of $99,457.12 as at 31/07/16.
It was noted that some of the advances have outstanding from previous years.

Refer to Appendix 8.2 for details.

 Out of the $76,315.04 of Accountable Advance payments reviewed during audit, a total of $41,858.28 or 55% of the advances paid was neither recorded in the Advance Register nor retired.

Refer to Table 8.5 for examples.

Table 8.5: Example of accountable advance not retired in 2016 Particulars Amount ($) Audit remarks Officers Name Date 92464 02/09/15 Cheque No.
33143 93764 30/11/15 33418 Payment of advance for Levuka summit Payment of advance for IAEA fund PS Foreign Affairs 25/01/16 33551 Payment for establishment of Ethiopia 13931 13/05/16 33858 92464 2/09/15 33143 Payment of advance for Litia Mawi Payment of advance for Levuka summit Total 550.46  Not retired  Not recorded in the Register 7,991.00  Not retired  Not recorded in the Register 20,009.22  Not retired  Not recorded in the Register 10,367.60  Not retired  Not recorded in the Register 2,940.00  Not retired  Not recorded in the Register 41,858.28  The audit also noted that the Ministry continued to issue additional Accountable Advance to officers even though previous advances were not cleared.
The Ministry also did not take any action to recover the outstanding advances.

Refer to Table 8.6 for examples.
Table 8.6: Failure to Retire Prior Years Advance Officers 93764 TR PS Foreign Affairs 49168 JT 2015 ($) 7,991.00 222.00 2016 2014 ($) ($) 800.00 (394.39) 631.00 - 1,000.00 20,747.36 (131.72) 1,000.00 - 600.00 564.00 - 1,413.88 Total ($) 8,396.61 853.00 21,615.64 1,600.00 1,977.88 6 Ministry of Foreign Affairs and International Co-operation Finance Manual 2013 – Section 6.1.13 7 Ministry of Foreign Affairs and International Co-operation Finance Manual 2013 – Section 6.1.10 8 Ministry of Foreign Affairs and International Co-operation Finance Manual 2013 – Section 6.1.6 Ministry of Foreign Affairs Section 08: Page 7 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ____________________________  Negative accountable advance balances amounting $2,405.33 were noted in the reconciliations contrary to the nature of the account.
Refer to Appendix 8.3 for details.

 Accountable advances with “misposting” description was noted in the RFA reconciliation which were carried over from prior years.

However, the Ministry did not take corrective action to clear them from RFA accounts.

Refer to Table 8.7 for details.
Table 8.7: Details of RFA Balances with “Mispostings” Description Description Year Amount Misposting Misposting Misposting Misposting Misposting Misposting Misposting Misposting Misposting Misposting Misposting Misposting 2013 2013 2013 2013 2014 2014 2015 2015 2015 2015 2015 2016 ($) 2,820.00 5,000.00 2,428.00 22,267.00 (26,653.26) (13,008.99) 484.00 410.00 124.60 54.00 (869.40) (299.45) The above findings show that responsible officers did not perform their duties properly and diligently.
As a result, public funds are held up as outstanding accountable advance.

Recommendations The Ministry should:  make direct deduction of salaries to recover all outstanding Accountable Advances; and  review the administration of accountable advances and consider taking disciplinary action against responsible officers for failing to recover the advances on a timely basis.

Ministry’s Comments Accountable advance has been retired but not updated into the system.
Majority of the advances for 2016 were retired and updated in the System as per attached listing.

For other years, we are currently working on adjusting and rectifying these outstanding advances.

8.7 Variance in Ministry’s reconciliation and FMIS 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.
In essence, this account should have a zero balance.

A monthly reconciliation is to be prepared and forwarded to the Ministry of Finance.

At the end of the financial year, the RBC accounts should be zerorized to allow the new postings in the next financial year9 9 Ministry of Finance Circular No.
21/13, Section 3.5 Ministry of Foreign Affairs Section 08: Page 8 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ____________________________ A variance of $1,801,080.94 was noted between the Ministry’s reconciliation balance and the FMIS general ledger balance as at 31/07/16.
Refer to Table 8.8 for details: Table 8.8: RBC – FMIS General Ledger vs Reconciliation Account Type Account Description 1-08101-08101-525202 RBC Foreign Mission FMIS as at 31/07/16 ($) July Reconciliation ($) (1,801,080.94) 0 Variance ($) 1,801,080.94 It was noted that the variance was due to differences between May 2016 closing balance and June 2016 opening balance amounting to $389,014.77 and June 2016 closing balance and July 2016 opening balance of $1,412,066.17.
As a result of the above anomalies, audit was not able to substantiate the accuracy of the RBC account for the period ended 31 July 2016.

Recommendations   The Ministry should investigate and rectify the variances noted between its reconciliation statements and the FMIS General Ledger; and The Ministry should ensure that proper monthly reconciliations are prepared and errors and omissions are promptly detected and rectified.
Ministry’s Comments The Ministry scheduled RBC report and prepared reconciliations when processing period for July 2016 was still open and clearance was still being carried out hence, the amount of $1,801,080.94 not been cleared from the RBC account reconciliations.

8.8 Anomalies noted for overseas travel 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.10 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.11 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.12 Audit review of overseas travel made by the Honourable Minister revealed unauthorised claim of per- diem allowance and overpayment of per-diem/daily allowances on a number of instances.

Refer to Table 8.9 for details.


10 Ministry’s Finance Manual 2013 – Part 2 Expenditure 11 Ministry’s Finance Manual 2013 - Section 2.8.4(i) 12 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 9 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ____________________________ Table 8.9: Examples of Overpayment of Per Diem and Daily Allowance Payee Cheque Number Overpaid Allowance ($) Anomalies Minister 33599 dated 08/02/16 1,014.91  As per Cabinet decision dated 19/01/16, Minister was approved to attend the PSIDS Ministerial Troika Meeting to be held in Tonga from 10-12 February 2016 where airfare and accommodation was funded by the Government of Sweden as communicated by the Cabinet office.
The Ministry was responsible to cater for costs of meal and incidentals for the travel.

 The Minister was paid full per-diem of $2,345.30 for which the Minister claimed that accommodation was not provided and that the actual accommodation cost was funded from the per diem paid by the Ministry.
Minister 33766 dated 07/04/16 4,343.04  The Ministry did not provide any documentation as evidence that the accommodation was not provided by the Government of Sweden thus it is deemed the Ministry overpaid the Minister for accommodation portion (55%) of the per-diem allowance amounting $1,014.91.

The Ministry paid 3 days per diem allowance from 14/04/16 to 16/04/16 to the Minister while on his “private medical check-up” in Shanghai, China totalling $4,343.05.
The Minister was not entitled to per diem allowance while on private medical treatment overseas.

Airline fare to China cannot be determined as it was lumped together in the travel itinerary.

Minister 33855 dated 12/05/16 2,998.44  The Cabinet approved the Minister to attend bilateral meeting in Kuala Lumpur, Abu Dhabi and afterword travelling to Addis Ababa for the opening of this new mission.13 The Minister stayed in Seoul for 2 nights from 19/05/16 to 20/05/16 which was not approved by Cabinet.
The Minister travel to Seoul and payment of per diem allowance was unauthorised.

 Also, the Minister was authorised to travel to Kuala Lumpur by Cabinet.

However, no reason was provided to audit for not undertaking this visit.

Minister 33869 dated 16/05/16 3,155.51  The Minister travelled for bilateral meetings in Abu Dhabi and Addis Ababa for the opening of the new mission.
In addition to his per diem (full UN rate, 50% top up and daily allowance of FJ$250), a further advance of $3,155.51 was paid to the Minister to cater for additional accommodation expenditure incurred.

However, receipts for actual accommodation expenditure paid from the advance incurred by the Minister was not provided to substantiate/justify this payment.

Minister 34040(B/B) dated 07/07/16 3,427.54  The Minister travelled to Honiara to attend the PIDF and MSG meeting from the 12/07/16 to 14/07/16.
A total of $10,812.10 was paid in per- diem allowance for this travel for 7days (09/07/16 -15/07/16).
 According to the audit calculation based on the UN per-diem rate provided by the Ministry of Economy, the total allowance including per- 13 Cabinet Decision dated 02/05/16 Ministry of Foreign Affairs Section 08: Page 10 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ____________________________ Payee Cheque Number Overpaid Allowance ($) Anomalies diem, 50% top-up and daily allowance to be paid to the Minister was $7,384.56.
 Hence the Minister was overpaid by $3,427.54 in per diem allowance for this trip.

Minister 26617A/B dated 09/05/13 4,618.00  The Cabinet approved the Minister to travel to attend a Ministerial Meeting in Abu Dhabi from 15/05/13 to 31/05/13, proceed to Astana from 22/05/13 to 24/05/13 and then the Minister to proceed to Shanghai, China for his “medical check-up”.

The Minister was scheduled to depart Nadi for Abu Dhabi on 15/05/13 and arrive back in the country on 31/05/13.
The Minister travelled and stayed in Seoul for 3 days (16/05/13, 17/05/13 and 29/05/13) which was not approved by the Cabinet.

The Minister was paid full per diem allowance for 3 days totalling $2,427.

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

 Also, the Ministry paid per diem allowance totalling $2,191 to the Minister while he was on his private medical check-up in Shanghai China from 25/05/13 to 27/05/13.
The Minister was not entitled to per diem allowance while on private medical treatment overseas.

Total 19,557.44 Although, similar concern was raised by audit in the previous audit reports, as at the date of audit14 no documentary evidence was provided by the Ministry to justify the overpayments of allowance made to the Minister in 2015 totalling $39,451.89.

Furthermore, the Ministry was unable to provide the Cabinet approval for travels made by the Minister detailed in Table 8.10.
Table 8.10: Cabinet approval not provided for travels made Payee Cheque Number Minister 33695 dated 07/03/16 Minister 33329 dated 28/10/15 Minister 33284 dated 13/10/15 Anomalies Allowance Paid ($) 2,241.79 Minister travelled to Bali, Indonesia from 21/03/16 to 25/03/16 to attend the Bali Process Ministerial Conference.

However, audit was not able to substantiate this release since Cabinet Approval was not provided for audit purposes.
2,251.91 The Minister was paid per diem of $2,251.91 for official travel to Niue from the 03/11/15 to 08/11/15 to attend the SPC Conference & Meeting.

However, audit was not provided with the Cabinet approval for this trip.

5,605.58 The Minister travelled to Port Vila Vanuatu to attend the MSG Foreign Affairs Ministers Meeting from 13/10/15 to the 14/10/15.

However Cabinet approval was not provided to audit.
The above findings indicate lack of proper checks in the Ministry’s Accounts Section which had resulted in payment of incorrect travel allowances.

14 23/01/17 Ministry of Foreign Affairs Section 08: Page 11 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ____________________________ The overpayment of travel allowances has resulted in loss of public funds.
Recommendations The Ministry should:  ensure per diem allowance is paid to the Minister in accordance with the Cabinet approval; and  investigate the recurring anomalies highlighted.

Ministry’s Comments The Ministry sought clarification from the Office of the former Minister now the Minister for Defence.

Hon.

Minister response for Cheque No 33599 dated 08/02/16: The Government of Sweden only paid air fare and I had to pay for my accommodation from the per diem provided.

Hon.
Hon.

Minister response for Cheque No 26617A/B dated 09/05/13: I had meetings in Seoul that were arranged by the Fiji Embassy in Seoul in my capacity as Minister for Foreign Affairs.

I had my medical check-up but also worked as I had bilateral meetings with the Chinese Ministry of Foreign Affairs officials from Beijing and that all the trips were approved by the Hon.

Prime Minister.
Prime Minister.

The Ministry awaits response from Missions (Beijing and Seoul) on the official copies of the outcome of the bilateral meetings conducted by the Minister on the mentioned trips.
8.9 Officers not bonded for overseas training An Officer receiving training at Government expense, including any on aid made available by donor countries and organizations, must be bonded before they proceed on training either on pay or without pay to serve in the Public Service or elsewhere for a specified period.15 Civil servants shall be bonded if they are attending a training program that is valued at $2,000 and above.16 All civil servants shall serve their bond in Fiji by working in the Public Service or the sponsoring Ministry, after attending training locally or overseas.17 Ministries and departments shall be responsible for all initial bonding arrangements for officers.18 Audit review of various trainings attended by the Ministry staff revealed that the Ministry did not bond officers who attended local/overseas training costing above $2,000.
Refer to Table 8.11 for examples.

Table 8.11: Examples of Officers not bonded for training attended costing above $2,000.

EDP no.
81776 63905 Training Program Duration Capacity Building for Diplomats held in Seoul, Korea June 30th to July 16 2016 62nd Professional Course for Foreign Diplomats held in New Delhi, India July 26th to August 26th 2016 15 General Orders 2011 Section 901 (a) (i) 16 Policy on Bonding in the Public Service Section 2.3.1.10 17 Policy on Bonding in the Public Service Section 2.5.1 18 Policy on Bonding in the Public Service Section 2.6.1.1 Ministry of Foreign Affairs Section 08: Page 12 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ____________________________ EDP no.
90886 Training Program Duration Diplomatic Training for Junior Officers held in Sri Lanka 1st to13TH August 2016 64691,92464, 92790,PF770, 95150 92463, PF735, PF702, PF767 (Temporarily Reliving Officer) Young Leaders Training held in China May 23rd to June 10th 2016 for Diplomats 2016 Seminar from Pacific Island Countries held in Beijing, China.

5th May to 25th May 2016 PF651 (TRO), 61550, 92228, 95107, 94971, 91391, 90947 2016 China-Fiji Seminar on Integration of Business Culture held in Beijing, China.
22nd June to 5th July 2016 95460, 95106 92790 Australia Participation Program held in Canberra, Australia.

International DFAT in Graduate Training 29th August to 28th October 2016 Language & Culture Program for Junior Diplomats held in Seoul, Korea.

22nd August to 29th September 2016 In the absence of the above officers not being bonded, there is a risk that government may lose out on its investments should the employee decide to leave the public service.
Recommendation The Ministry should ensure that all staffs attending trainings above $2,000 are bonded in accordance with PSC bonding policy.

Alternatively, the Ministry can develop its own bonding policy.
Ministry’s Comment The Ministry is currently working on a draft Training and Bonding policy and will be strictly adhering to all bond requirements.The Ministry believes in capacity building opportunities for all staff and does not discriminate between permanent and temporary staff in accordance with Section 26 of 2013 Constitution.
8.10 Capital Purchase expenditure allocation understated The AAO Payments and AAO Missions must input data on a daily basis and ensure all transactions for the month are posted before the monthly cut-off date set by the Ministry of Finance.19 The Principal Accounts and Senior Accounts Officer must check every morning that all transactions from the previous day are updated in GL.20 The Brussels and Abu Dhabi Mission acquired a vehicle each during the year at a cost of $161,824.48 and $214,682.22, respectively.
Audit review of the capital purchase general ledger allocation revealed that the above payments were not fully posted into the FMIS general ledger, therefore the capital purchase expenditure was understated by $237,977.
Refer to the Table 8.12 below for details: 19 Ministry of Foreign Affairs & Int’l Cooperation Finance Manual 2013 – Section 12.2.4 20 Ministry of Foreign Affairs & Int’l Cooperation Finance Manual 2013 – Section 2.9.13 Ministry of Foreign Affairs Section 08: Page 13 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ____________________________ Table 8.12: Capital purchase expenditure not posted into FMIS general ledger Date 17/07/16 Description Journal ID/ Cheque ID JV 81096 Payment made to BMW for purchase of new BMW vehicle for Brussels Embassy.
The Ministry had a budgetary allocation for purchase of vehicle.

However, the actual cost of the vehicle exceeded the budgeted amount by $23,294.48.

$138,530 of 27/07/16 1289 did The Ministry vire this funds additional allocation to post the remaining balance of $23,294.48.

not into Payment made to Emirates Motor Company of Mercedes Benz vehicle for the Abu Dhabi Embassy.
purchase for Amount ($) Expenditure Allocation 161,824.48 1-08103- 80101-090169 Amount posted in GL ($) 138,530.00 Amount not posted in GL ($) 23,294.48 214,682.22 1-08103- - 214,682.22 80101-090168 The actual cost of $214,682.22 for purchase of vehicle was not posted to its respective general ledger allocation as at the date of audit.21 Total 237,976.70 The above findings indicate that necessary checks were not carried out to ensure that expenditures were promptly posted to the general ledger.
Recommendations The Ministry should ensure that:  expenditure is incurred are within the budgeted amount; and  necessary checks are carried out to ensure that expenditure incurred is correctly recorded and posted in the respective general ledger expenditure account on a timely manner.
Ministry’s Comments The Ministry admits that it is an overlook on our part as we were trying to post all the Missions expenditures into the GL system prior to the closing of accounts in July 2016 and the beginning of the financial year from August 2016.

We intend to address the understated transaction of $23,294.48 during the Audit Adjustment period through virement.
21 20/12/16 Ministry of Foreign Affairs Section 08: Page 14 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ____________________________ 8.11 Anomalies noted in Foreign Missions monthly acquittal reports The Senior Accounts Officer-Missions is responsible to check, reconcile, verify and monitor all Fiji Overseas Missions monthly drawings account against their bank account statements, financial acquittals submitted monthly to headquarters, before these acquittals are uploaded into the Financial Management Information System.22 The Ministry remits Foreign Missions monthly budgets to finance their operating expenditures.
At the end of each month, Foreign Missions are required to submit hard copies of financial acquittal reports to headquarters for recording the transactions in the general ledger.

Audit review revealed the following anomalies:  A total of $18,219,676 was incurred in mission expenditures as at 31 July 2016.
There was no evidence to indicate that the mission acquittals were being reviewed and checked by the Senior Accounts Officer (Missions) to ensure accuracy and completeness of mission expenditures posted into FMIS.

 In addition, the monthly expenditures from the acquittal reports are summarised according to nature of expenditure incurred using MS Excel worksheet converted in Fiji Dollars and posted in the general ledger.
The spread sheet was not checked/authorised by the Principal Accounts Officer before recording in the general ledger.

 On a number of instances, mission expenditure was not posted on a monthly or transaction basis.

Instead, bulk posting was done.

Refer to Table 8.13 below for examples.
Table 8.13: Details of Bulk Postings noted in General Ledger Date Posted 07/2016 07/2016 07/2016 07/2016 07/2016 Journal ID Mission Particulars 81078 81104 81082 81099 81076 New Delhi Abu Dhabi Brussels PRUN Geneva Jan-Jun 2016 Posting Jan-July 2016 Posting Jan-Jun 2016 Posting Jan-Jul 2016 Posting Jan-Jun 2016 Amount ($) 721,624.85 1,203,534.02 697,603.14 1,644,102.05 981,264.98  The following overseas missions did not submit their monthly acquittals to the Ministry for verification.
Instead, MS Excel worksheets were provided.

Refer to Table 8.14 for details.

Table 8.14: Details of Acquittals not received from the Overseas Mission Mission Months Beijing Addis Ababa January to July 2016 February to July 2016  A variance of $620,099 was noted between the actual expenditure incurred as rental expenses for the occupancy of premises by Missions/diplomats and the amount that was posted in the FMIS rental expenditure allocations.
No explanations were provided by the Ministry for the variance.

Refer to Table 8.15 for details.
22 Staff Board Paper No: 32/2015 Ministry of Foreign Affairs Section 08: Page 15 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ____________________________ Table 8.15: Variance between Actual Expenditure and FMIS Posting Foreign Missions New Delhi Seoul Brussels Abu Dhabi Beijing Ethiopia Washington Tokyo Papua New Guinea PRUN Jakarta Total General Ledger Balance ($) 476,227.47 456,470.01 283,031.86 608,745.54 553,076.20 334,008.57 324,397.27 352,864.41 598,199.65 596,792.04 329,826.30 4,913,639.32 Actual Expenditure ($) 259,357.74 289,579.34 132,795.51 535,615.98 480,206.68 325,701.52 321,789.73 352,081.71 607,315.18 616,935.79 372,160.78 4,293,539.96 Variance ($) 216,869.73 166,890.67 150,236.35 73,129.56 72,869.52 8,307.05 2,607.54 782.70 (9,115.53) (20,143.75) (42,334.48) 620,099.36 The above findings indicate lack of proper checks in the Ministry’s Accounts Section.
As a result, there is a high risk of Mission expenditures recorded in the general ledger being misstated.
Recommendations The Ministry should ensure that:  the Senior Accounts Officer-Missions and the Principal Accounts Officer perform regular reviews on Foreign Mission acquittals before these are posted into the general Ledger;  Mission expenditures are posted on a monthly and transaction level basis;  all acquittal reports are received and vetted for accuracy on a timely manner; and  investigate the variance noted and implement corrective measures.
Ministry’s Comments The Ministry has developed a checklist for a list of things to be verified upon receiving acquittals from Missions.

Any anomalies identified is communicated back to the Mission as part of our feedback and this is addressed immediately.

The Ministry is committed to conduct postings on a monthly basis into the GL.

This, has been regularly highlighted to all stakeholders –HQ and Missions.
8.12 Absence of supporting documents to verify payment of post allowances All accounting staffs are responsible for proper maintenance and safekeeping of accounting records and documents, giving the Accounting Head the responsibility in implementing a sound internal control system to oversee this matter.23 Audit review of several personal files for diplomats engaged in Foreign Missions revealed that records such as marriage and birth certificates were missing from their files.
Refer to Table 8.16 for examples.
23 Finance Instruction 2010 – Section 59 Ministry of Foreign Affairs Section 08: Page 16 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ____________________________ Table 8.16: Absence of Records from the Personnel Files EDP Number 53844 Post & Mission Counsellor-Tokyo 94897 First Secretary-Tokyo 94249 First Secretary-Abu Dhabi 63903 57397 91491 93832 Second Secretary-Abu Dhabi Counsellor-Jakarta Counsellor-Brussels First Secretary-Brussels 44843 65411 First Secretary-Brazil Second Secretary-Wellington Missing Records Marriage Certificate Certificate of children Marriage Certificate Certificate of children Marriage Certificate Certificate of children Marriage Certificate Marriage Certificate Marriage Certificate Marriage Certificate Certificate of children Marriage Certificate Marriage Certificate and Birth and Birth and Birth and Birth Type of Allowance Paid Post Allowance at married rate and child allowance Post Allowance at married rate and child allowance Post Allowance at married rate and child allowance Post Allowance at married rate Post Allowance at married rate Post Allowance at married rate Post Allowance at married rate and child allowance Post Allowance at married rate Post Allowance at married rate Although similar concerns were raised in previous years’ audit reports, no improvement has been noted.
In absence of above supporting documents, the audit was not able to verify the accuracy of post allowances paid to the diplomats concerned.

The above finding indicates that the Ministry paid post allowances without verifying the personal records of diplomats hence increasing the risk of fraudulent or unauthorised payments.

Recommendation The Ministry should ensure that the personal files of the diplomats are updated with the necessary supporting documents pertaining to payment of post allowances.
Ministry’s Comments The Ministry admit problems encountered in its internal filing system and is embarking on generally improving its overall filling system through adequate staffing and internal SOPs for filing.

The Ministry’s Corporate Service Division is collating all due supporting documents to update personal records and ensures that Personal Files will have all the required information in future, particularly for those in the Mission.
8.13 Inconsistent Rates used to calculate Travel Allowances Heads of Missions or officers serving at an overseas mission are entitled to be paid per diem at the applicable UN rate whilst on official duty in any other location away from the mission where the officer is required to spend more than 24 hours.24 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.25 24 Public Service (Diplomatic and Counselor Services) Regulations 2006 Section 40 25 Part 2 Expenditure: Ministry of Foreign Affairs Finance Manual Ministry of Foreign Affairs Section 08: Page 17 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ____________________________ Audit review of travel allowances paid to the diplomats on official travel to Fiji revealed varying rate of per diem allowance claimed.
Refer to Table 8.17 for details.
Table 8.17: Payment of per diem allowance Cheque No Payee 203953 Counsellor- Malaysia UN Per Diem Rate USD ($) 481 High Commissioner- PNG Ambassador- Jakarta High Commissioner- PNG Acting High Commissioner- New Delhi First Secretary- Jakarta 1283 B/WDL 1317 106 101477 Total 311 243 311 505 250 Official Travel Days 7 5 7 5 13 8 Total USD ($) 3,367 1,555 1,701 1,555 6,844 2,000 Total FJD ($) Details of Travel 7,305.27 The Counsellor travelled to Fiji for official purposes from 09/02/16 to 19/02/16.
3,373.83 The High Commissioner travelled to Fiji to attend the MSG Meeting from 29/02/16 to 04/03/16.

3,651.00 The Ambassador travelled to Fiji for official purposes from 26/03/16 to 04/04/16.

3,276.44 The High Commissioner travelled to Fiji for official purposes from 05/04/16 to 10/04/16.

14,213.91 The acting High Commissioner travelled to Fiji for official purposes from 22/05/16 to 04/06/16.

4,182.35 The First Secretary travelled to Fiji for official purposes from 16/07/16 to 02/06/16.
36,002.80 According to the Ministry, the per diem rate claimed was based on the United Nations approved per diem rate for the diplomats posted to Fiji.

In addition, the payment of per diem allowance was made from the respective missions account.

Although the diplomats travelled to Fiji from their respective Missions to attend their respective official duties, the cost of living was the same for all diplomats while in Fiji.
Not having the standardised per-diem rate for all the travels made by the Diplomats to Fiji could result in loss of public funds through varying rates of per diem allowance claimed by them during their stay in Fiji.
Recommendations  The Ministry should develop a standardized policy on the payment of travel allowance for the diplomats on their official travel to Fiji;  The Ministry should also consider paying the subsistence allowance at a reasonable rate to those diplomats opting to stay in their official residence and for those diplomats opting to stay in the hotels while in Fiji should retire their travel allowance; and  Supervisory controls and checks at the Missions and Headquarters should be strengthened to avoid such discrepancies from incurring in future.
Ministry’s Comments For any travel by Officers based in HQ, the per diem rate is obtained from Ministry of Economy – which is the UN per diem Rate.
However, as for Missions, our advice to them is to use the same UN Per diem rate for any payment on travel per diems; Ministry of Foreign Affairs Section 08: Page 18 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ____________________________ The modes of paying per diem allowance for diplomats visiting Fiji is expected to be addressed in the draft FOSR as well as the draft Mission’s Finance Regulations/Manual; and agree for stricter controls and checks at Missions and HQ Ministry of Foreign Affairs Section 08: Page 19 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ____________________________ Appendix 8.1: remitted to the relevant agencies Examples of revenue collected by overseas mission and not Month Description Total Amount ($) CANBERRA January February March April May June July Total – Canberra WELLINGTON January February March April May June July Total – Wellington WASHINGTON January February March April May June July Total –Washington Total Immigration Fees for 2016 Immigration Fees for 2016 Immigration Fees for 2016 Immigration Fees for 2016 Immigration Fees for 2016 Immigration Fees for 2016 Immigration Fees for 2016 Immigration Fees for 2016 Immigration Fees for 2016 Immigration Fees for 2016 Immigration Fees for 2016 Immigration Fees for 2016 Immigration Fees for 2016 Immigration Fees for 2016 Immigration Fees for 2016 Immigration Fees for 2016 Immigration Fees for 2016 Immigration Fees for 2016 Immigration Fees for 2016 Immigration Fees for 2016 Immigration Fees for 2016 3,385.57 2,471.45 2,666.05 3,693.59 4,286.40 2,556.88 853.83 19,913.77 22,651.77 23,530.83 15,194.58 20,685.50 22,289.97 37,015.53 20,180.54 161,548.72 4,167.52 3,057.71 6,520.82 4,535.82 3,267.29 3,616.10 9,338.14 34,503.40 215,965.89 Ministry of Foreign Affairs Section 08: Page 20 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ____________________________ Appendix 8.2: Department Outstanding advances to officer’s and Ministries/ Name Date Ending Balance ($) PL PL EC PL TV
 Ministry of Information RM TV Director of Immigration YO SE JK MK M AK WL WL JV MT MT MR Total 2013 JV IB TV KS PT Total 2014 PL PS Foreign Affairs NM NM LS LS SM IB WV TF MT MC LN SK SR JT AS JV RC UW VK ST MV 26/02/13 07/03/13 07/03/13 21/03/13 12/04/13 03/05/13 20/05/13 28/05/13 11/06/13 08/07/13 23/07/13 07/08/13 29/08/13 20/09/13 04/09/13 07/11/13 08/11/13 15/11/13 02/08/13 05/08/13 17/07/13 28/02/14 05/03/14 06/03/14 25/04/14 07/08/14 23/01/15 28/01/15 17/02/15 18/02/15 05/03/15 23/04/15 22/04/15 06/05/15 12/05/15 22/05/15 10/06/15 11/06/15 31/07/15 31/07/15 31/07/15 27/08/15 28/08/15 01/09/15 02/09/15 23/09/15 23/09/15 25/09/ Ministry of Foreign Affairs Section 08: Page 21 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ____________________________ Name Date Ending Balance ($) AK TR JT SK FW PE TR SD BC Total 2015 AV JT PS Foreign Affairs E P FW PS Foreign Affairs SB TR KS AY BC UW TR UW LM JT K NV MT RC AT MT VL VL FQ S B K R MT RD PS Foreign Affairs SD Total 2016 Grand Total 02/10/15 08/10/15 23/10/15 05/11/15 30/11/15 28/10/15 17/12/15 02/12/15 02/12/15 22/01/16 25/01/16 28/01/16 18/02/16 01/03/16 16/03/16 24/03/16 22/04/16 26/04/16 08/04/16 08/04/16 13/04/16 26/05/16 06/05/16 13/05/16 13/05/16 13/05/16 06/05/16 01/06/16 03/06/16 06/06/16 10/06/16 11/06/16 11/06/16 24/06/16 06/07/16 06/07/16 12/07/16 15/07/16 20/07/16 20/07/ 459.00
345.00 200.00 50.00 6,000.00 1,513.05 459.00 4,040.00 3,437.25 100.00 610.00 180.00 1,000.00 54,871.51 99,457.12 Ministry of Foreign Affairs Section 08: Page 22 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ____________________________ Appendix 8.3: Details of negative accountable advance balance Names AV GB I B AY TA AM AT NC LR AV AR MC RR RR AR FW ST PS Foreign Affairs PS Foreign Affairs TK AT EP VD BC T Total Date 26/03/13 26/03/13 05/04/13 10/04/13 01/05/13 03/05/13 27/06/13 16/08/13 06/09/13 11/10/13 03/12/13 03/12/13 17/04/14 25/04/14 18/09/14 19/09/14 19/09/14 07/10/14 20/11/14 13/03/15 05/05/15 01/06/15 29/09/15 20/11/15 20/11/15 Amount ($) (71.20) (18.00) (40.00) (6.14) (18.00) (97.97) (26.40) (15.00) (60.00) (40.52) (27.09) (74.30) (60.00) (29.10) (594.39) (394.39) (405.88) (76.72) (55.00) (84.00) (30.00) (39.98) (112.25) (9.00) (20.00) (2,405.33) Ministry of Foreign Affairs Section 08: Page 23 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 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 Audit Opinion ............................................................................................................................ 1 9.2 Statement of Receipts and Expenditure ................................................................................... 1 9.3 Appropriation Statement ........................................................................................................... 2 9.4 Statement of Losses ................................................................................................................. 3 PART A: FINANCIAL STATEMENT 9.1 Audit Opinion The audit of the 2016 accounts of the Office of the Auditor General was carried out by a 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 $188,186 and incurred a total expenditure of $1,957,050 for the seven months period ended 31 July 2016.

Details are provided in Table 9.1.
Table 9.1: Statement of Receipts and Expenditures from January to July 2016 Description 2016 ($) 2015 ($) RECEIPTS Agency Revenue Audit Fees Miscellaneous Revenue Total Agency Revenue EXPENDITURE Operating Expenditure 186,998 1,188 188,186 544,480 1,795 546,275 OFFICE OF THE AUDITOR GENERAL Section 09: Page 1 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017_____________________________ Description Established Staff Unestablished Staff 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 2016 ($) 1,670,641 16,759 56,195 41,188 149,471 4,279 1,938,533 2015 ($) 2,797,625 29,738 77,358 75,979 287,302 4,531 3,272,533 - - 18,517 1,957,050 - - 57,270 3,329,803 The financial year-end for Government was changed from 31 December to 31 July in accordance with the Financial Management (Amendment) Act 2016.
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.

9.3 Appropriation Statement The Office incurred expenditures totalling $1,957,050 from January to July 2016 against a revised budget of $2,564,712 resulting in a saving of $607,662 or 23.7%.
The large savings was due to the budget being for the whole of 2016 while expenditures were only for seven months up to 31 July 2016.

Details of expenditures against the budget estimates are provided in Table 9.2.
Table 9.2: Appropriation Statement from January to July 2016 SEG Item Budget Estimate ($) Appropriation Changes ($) Revised Estimate ($) Actual Expenditure ($) Carry– Over ($) Lapsed Appropriation ($) Established Staff Government Wage Earners Travel & Communication Maintenance & Operations Purchase of Goods & Services Operating Grants & Transfers Special Expenditure Total Operating Costs 1,967,025 22,037 96,375 73,216 360,059 6,000 2,524,712 Capital Construction Purchases Grants & Transfers 8 9 10 TOTAL CAPITAL --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- 1,967,025 22,037 96,375 73,216 360,059 6,000 --- 2,524,712 1,670,641 16,759 56,195 41,188 149,471 4,279 --- 1,938,533 --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- 296,384 5,278 40,180 32,028 210,588 1,721 --- 586,179 --- --- --- --- 13 Value Added Tax 40,000 --- 40,000 18,517 --- 21,483 TOTAL EXPENDITURE 2,564,712 --- 2,564,712 1,957,050 --- 607,662 OFFICE OF THE AUDITOR GENERAL Section 09: Page 2 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017_____________________________ 9.4 Statement of Losses The Office of the Auditor General did not report any loss of money or assets during the financial period ending 31 July 2016.
OFFICE OF THE AUDITOR GENERAL Section 09: Page 3 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 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.
Table of Contents PART A: FINANCIAL STATEMENT ....................................................................................................... 1 10.1 Audit Opinion ............................................................................................................................... 1 10.2 Statement of Receipts and Expenditure ..................................................................................... 1 10.3 Appropriation Statement ............................................................................................................. 2 PART A: FINANCIAL STATEMENT 10.1 Audit Opinion The audit of the 2016 accounts of the Fijian Elections Office resulted in an unqualified audit opinion.
10.2 Statement of Receipts and Expenditure The Fijian Elections Office recorded revenue totalling $416 and incurred expenditure totalling $3,508,815 for the seven months period ended 31 July 2016.
Table 10.1: Statement of Receipts and Expenditure for 2016 Description RECEIPTS July 2016 ($) 2015 ($) Fijian Elections Office Grant Section 10: Page 1 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ____________________________ Description Commission Miscellaneous Revenue TOTAL REVENUE EXPENDITURE Operating Expenditure Established Staff Government Wage Earners Travel & Communications Maintenance & Operations Purchase of Goods & Services Operating Grants and Transfers Special Expenditures Total Operating Expenditure Value Added Tax TOTAL EXPENDITURE July 2016 ($) 416 - 416 2015 ($) 262 15,782 16,044 --- --- --- --- --- 3,508,815 --- 3,508,815 --- 3,508,815 - - - - - 5,119,295 - 5,119,295 - 5,119,295 The financial year end for Government was changed from 31 December to 31 July in accordance with the Financial Management (Amendment) Act 2016.
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.

10.3 Appropriation Statement The Fijian Elections Office incurred expenditure totalling $3,508,815 in 2016 against a revised budget of $6,388,552 resulting in a savings of $2,879,737 or 45%.
The large savings was due to the budget being for the whole of 2016 while expenditures were only for seven months up to 31 July 2016.

Details of expenditures against the budget estimates are provided in the Appropriation Statement in Table 10.2.
Table 10.2: Appropriation Statement for 2016 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 ($) --- --- --- --- --- 6,388,552 --- 6,388,552 --- 6,388,552 Changes ($) --- --- --- --- --- --- --- --- ---- Revised Estimate ($) --- --- --- --- --- 6,388,552 --- 6,388,552 --- 6,388,552 Actual Expenditure ($) --- --- --- --- --- 3,508,815 --- 3,508,815 --- 3,508,815 Lapsed Appropriation ($) --- --- --- --- --- 2,879,737 --- 2,879,737 2,879,737 The expenditure and budget shown in Table 10.1 and Table 10.2 refer to budget provided through the Ministry of Economy.
This audit report focuses only on the disbursement of grants from the Ministry of Economy to the Fiji Elections Office.

Fijian Elections Office Grant Section 10: Page 2 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ____________________________ The audit of Fiji Elections Office will be reported together with audit reports on other statutory authorities.
Fijian Elections Office Grant Section 10: Page 3 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 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 Unsubstantiated Variance in Main Trust Fund Account ........................................................................................... 4 11.6 Main Trust Reconciliation and Listing not up to date ............................................................................................... 5 11.7 Significant Arrears of Revenue ................................................................................................................................ 6 11.8 Capital Expenditure .................................................................................................................................................. 8 PART A: FINANCIAL STATEMENT 11.1 Audit Opinion The audit of the 2016 accounts of the Judiciary Department resulted in the issue of a qualified audit report.
The qualification issue relates to a variance of $501,308 which existed between the Judiciary Trust Fund Cash at bank balance of $25,779,288 in the FMIS general ledger which includes Suitors, Maintenance and Sundries Trust accounts and the Judicial Trust Fund Bank Reconciliation balance of $25,277,980 as at 31 July 2016.

In addition, the Trust Fund reconciliation for Suitors, Maintenance and Sundries Trust accounts have not been updated since May 1992.
11.2 Statement of Receipts and Expenditure The Department collected revenue totalling $2,706,168 and incurred expenditure totalling $15,882,885 for the seven months period ended 31 July 2016.

Refer to Table 11.1 for details.
Table 11.1: Statement of Receipts and Expenditure for 2016 Description RECEIPTS State Revenue Court Fines Court Fees Judiciary July 2016 ($) December 2015 ($) 1,582,734 921,119 2,708,400 1,352,905 Section 11: Page 1 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ________________ Description 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 July 2016 ($) 9,222 2,513,075 152,456 38,349 2,288 193,093 2,706,168 11,764,622 679,488 1,130,737 508,421 442,198 426,320 14,951,786 645,931 99,913 745,844 185,255 15,882,885 December 2015 ($) 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 The financial year end for Government was changed from 31 December to 31 July in accordance with the Financial Management (Amendment) Act 2016.
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.

11.3 Appropriation Statement The Department incurred expenditure totalling $15,882,885 in 2016 against the revised budget of $44,016,519 resulting in a savings of $28,133,634 or 64%.
The large savings was due to the budget being for the whole of 2016 while expenditures were only for seven months up to 31 July 2016.

Details of expenditures against the budget estimates are provided in Table 11.2.
Table 11.2: Appropriation Statement for 2016 SEG Item 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 Judiciary Budget Estimate Changes ($) ($) 25,383,526 1,057,495 1,376,098 941,000 981,600 3,000 1,385,000 31,127,719 (66,510) 66,510 --- --- --- --- --- --- Revised Estimate ($) a 25,317,016 1,124,005 1,376,098 941,000 981,600 3,000 1,385,000 31,127,719 Actual Expenditure ($) b 11,764,622 679,488 1,130,737 508,421 442,198 --- 426,320 14,951,786 Lapsed Appropriation ($) (a-b) 13,552,394 444,517 245,361 432,579 539,402 3,000 958,680 16,175,933 11,200,000 --- 11,200,000 645,931 10,554,069 Section 11: Page 2 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ________________ SEG Item Budget Estimate Changes ($) ($) 9 13 Capital Purchases Total Capital Expenditure Value Added Tax TOTAL EXPENDITURE 238,000 11,438,000 1,450,800 44,016,519 --- --- --- --- Revised Estimate ($) a 238,000 11,438,000 1,450,800 44,016,519 Actual Expenditure ($) b 99,913 745,844 185,255 15,882,885 Lapsed Appropriation ($) (a-b) 138,087 10,692,156 1,265,545 28,133,634 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 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 July July 2016 ($) December 2015 ($) Judiciary Section 11: Page 3 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ________________ PART B: AUDIT FINDINGS 11.5 Unsubstantiated Variance 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 as a Main Trust fund.
Audit review of Main Trust Fund Account revealed the following anomalies:  A variance of $501,308 existed between general ledger balance and bank reconciliation of the Main Trust Fund Account.

Refer to Table 11.4 for details.


Table 11.4: Variance between Bank Reconciliation and FMIS Cash at Bank Balance Particulars Balance as per Bank Reconciliation Balance as per FMIS Cash at Bank (SAG 52) Variance Amount ($) 25,277,979 25,779,287 501,308 Audit was advised that the variance was due to the 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 Ministry of Economy.
The above variance increases risk of overstatement of the Trust Account cash at bank balance.

In addition, there is risk that the Department may not have adequate funds to meet the payments of the trust.

 There is unreconciled variance of $618,546 between the Main Trust fund cashbook reconciliation and bank statement balance for these accounts as at 31 July 2016.
 A variance of $13,548 was also noted between the Trust Fund Account balance (SLG 89) and the Cash at bank balance (SAG 52) in the FMIS general ledger as at 31 July 2016.

Refer to Table 11.5 for details.


Table 11.5: Variance in FMIS Trust Fund Account and FMIS Cash at Bank Balance Particulars FMIS Cash at Bank Balance FMIS Trust Fund Account Balance Variance Amount ($) 25,779,287.72 25,765,740.12 13,547.60 The above findings indicate that reconciliations were not properly reviewed on a regular basis contributing to unreconciled variances.
As a result of the variances noted, audit was not able to ascertain that all receipts and payments had been properly accounted in the Main Trust Fund Account.
1 Finance Instructions 2010, Section 58 (3) Judiciary Section 11: Page 4 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ________________ Recommendation The Department should ensure that trust fund account bank statement balance, trust fund cash at bank balance in FMIS general ledger and trust fund account balance in FMIS general ledger is reconciled on a monthly basis and any errors or omissions noted are investigated and resolved promptly.
Department’s Comments Department has three different Trust Fund Accounts which are the Main Trust Fund (Suitors & Sundries), Judiciary Fund and LPU Trust Fund.

The variances in the three accounts i.e.

between the ledger and bank were as follows as at 31st July 2016.
Main Trust Fund Ledger Balance - $24,831,959.94 Bank Balance - $24,213,413.87 Difference $ 618,546.09 Judiciary Fund Ledger Balance - $401,462.43 Bank Balance - $518,566.07 Difference $117,103.64 LPU Trust Fund Ledger Balance - $545,865.35 Bank Balance - $545,999.66 Difference $ 134.31 The total variance for all the Trust Accounts comes to $501,308.12.

The details of the variances were stated in the reconciliations.
Whilst the comments of the Auditors are noted, we would like to inform that these irregularities had been occurring for quite some time and it is difficult to regularize all these variances within a short period of time.

We are trying to get things in order which was outstanding for many years.

Hopefully we are able to resolve the variances by 31st July 2017 so that our next AFS reflects the correct balances.
As for the funds of $734,677.41 not provided by Ministry of Economy, various emails had been sent but still no progress.

11.6 Main Trust Reconciliation and Listing not up to date Each month the Trust accounts shall be balanced and reconciled with trust bank account.

The names and balances of each account shall be listed and the reconciliation shall be signed by the responsible officer.
Un-reconciled items should be investigated and resolved promptly.2 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.

The audit noted that the trust reconciliations have not been prepared since May 1992.

Thus the balances owed by the Department and the detailed breakdown for these balances could not be substantiated.
Refer to Table 11.6 for details.

2 Finance instruction 2010, Section 69.3 Judiciary Section 11: Page 5 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ________________ Table 11.6: Balance in Trust Fund Account in 2016 Trust Account Suitors Trust Maintenance Trust Sundries Total Composition of Fund Account 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.

Balance as at 31/7/16 ($) 18,804,973.08 1,531,498.05 4,481,941.21 24,818,412.34 It is apparent that the Department is 24 years behind in its reconciliations and this has been raised in previous audits.
According to the Department they are facing resource constraints in going back through old records and documents.

In the absence of up-to-date reconciliations, the audit was not able to ascertain the correctness of the balance reflected in the Department’s trust fund accounts.

Recommendation The Department should consider employing additional resources to update the trust account reconciliations.
Department’s Comments As explained in the last year’s response, we are trying to update the reconciliations but to reconcile 24 years accounts is a big task.

We do understand the importance of the reconciliations but we cannot do much as this backlog has been there from the previous years.

As per the recommendations of the Auditors, department will only be able to engage temporary officers to carry out the reconciliations once we have space to accommodate them.
11.7 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.3 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.4 The arrears of revenue comprises of court fees, fines and cost awarded to state.
3 Judicial Department Finance Manual 2013, Section 9.2.1 4 Judicial Department Finance Manual 2013, Section 9.2.4 Judiciary Section 11: Page 6 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ________________ Audit review of arrears of revenue revealed following anomalies:  Arrears of revenue reconciliation was not prepared as at 31/7/16 for submission to the Ministry of Economy and Auditor General’s Office.

Instead a reconciliation dated 30/6/16 was provided.
 Arrears of revenue increased by $245,297 or 2% as at 30/06/16 compared to 2015.

Despite the efforts made by the Department to reduce the arrears of revenue, a significant balance of $13,461,155 in arrears of revenue still exists as at 30/6/16.

Refer to Table 11.7 for details.
Table 11.7: Arrears of Revenue over Eight Years and 7 Month Period Year Balance ($) 10,574,640 2008 10,828,342 2009 10,970,177 2010 11,397,061 2011 11,341,730 2012 11,968,031 2013 13,345,569 2014 2015 13,215,858 30/6/16 13,461,155 Change ($) Percentage Change (%) 253,702 141,835 426,884 (55,331) 626,301 1,377,538 (129,711) 245,297 2 1 4 0 6 12 1 2 16,000,000 14,000,000 12,000,000 ) $ ( 10,000,000 t n u o m A 8,000,000 6,000,000 4,000,000 2,000,000 0 Arrears of Revenue 2008 2009 2010 2011 2012 Year 2013 2014 2015 31/06/2016 The audit also noted that the arrears of revenue between 1 to 2 years and 2 to 5 years had increased by $15,499 (2%) and $284,966 (28%), respectively as at 30/6/16 while arrears of revenue for more than 5 years amounted to $9,901,397.
Refer to Table 11.8 for details.
Table 11.8: Aging of Debtors Age of Debtors Less than 1 year 1 – 2 years 2 – 5 years More than 5 years Total Debtors 30/6/16 Amount ($) 1,312,624 956,319 1,290,815 9,901,397 13,461,155 2015 Amount ($) 1,620,611 940,820 1,005,849 9,648,578 13,215,858 Change ($) -307,987 15,499 284,966 252,819 245,297 Percentage Change (%) -19% 2% 28% 3% 2% Although the Department has established a Fine Enforcement Unit in 2007 to manage the arrears of revenue, the arrears of revenue for the Department remain substantial.
There is also a high risk that some of the debts listed in the Table 11.8 may not be recoverable due to reasons such as deaths, unemployment and migration of debtors.

However, the Department has not carried out any analysis on the debts which are over 5 years old to assess its recoverability.

Further delay in collecting the outstanding revenue will increase the risk of revenue not likely to be collected which may result in write-off and eventually result in loss of revenue for government.
Recommendations The Department should:  consider employing additional officers in the Fine Enforcement Unit if delays are being caused by lack of human resources; Judiciary Section 11: Page 7 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ________________   carry out a comprehensive review of arrears of revenue especially arrears over 5 years in view of establishing arrears which may not be recoverable; and ensure that the Arrears of Revenue report prepared for the Agency Financial Statement is as at the balance date.
Department’s Comments 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 with the Police Department.

As recommended by the Auditors, the department had written to Ministry of Economy for additional staff to be employed in the Fine enforcement Unit but it hasn’t been approved.
The department is intending to have an analysis carried out as recommended by the Auditors and make a submission for write off of Arrears of Revenue over 5 years which may not be recoverable.

We always ensure the Arrears of Revenue Report is prepared according to the date of AFS but due to the sudden change in the financial year and some miscommunication with Ministry of Economy, the correct date was not taken into account.

We ensure this won’t happen again.


11.8 Capital Expenditure It is imperative that amount allocated for capital expenditure is utilized effectively so that the Department’s operations become are more efficient and effective.

Audit review of Department’s 2016 Appropriation Statement revealed that the Department only utilized $645,931 for capital expenditure from the $11,200,000 allocated.
Lapse of appropriation indicates that the Department was not effective in planning and implementing its capital expenditures.

The strategic objectives of Department may not be achieved if planned capital projects are not implemented on a timely basis.

Recommendation The Department should properly plan and implement its capital projects in future.

Department’s Comments Comments of the Auditors are noted.
The department is trying its best to have the capital projects implemented as planned but due to some unforeseen circumstances it is not able to do so.

The CIU of Ministry of Economy is now handling most of the capital projects, thus we anticipate more projects to be implemented for the department as per the allocated funds.
Judiciary Section 11: Page 8 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017______________________________________ Section 12 Parliament Office Roles and Responsibilities The primary function of the Parliament 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 is to provide secretariat support and services to enable the Parliament of Fiji to perform the above functions.
Table of Contents PART A: FINANCIAL STATEMENTS ..................................................................................................................................... 1 12.1 Audit Opinion ...................................................................................................................................... 1 12.2 Statement of Receipts and Expenditure ............................................................................................. 1 12.3 Appropriation Statement ..................................................................................................................... 2 PART A: FINANCIAL STATEMENTS 12.1 Audit Opinion The audit of the 2016 accounts of the Parliament Office resulted in an unqualified audit opinion.
12.2 Statement of Receipts and Expenditure The Parliament Office recorded revenue totalling $18,519 and incurred expenditure totalling $5.6 million for the seven months period ended 31 July 2016.
Table 12.1: Statement of Receipts and Expenditure for 2016 Description REVENUE State Revenue Agency Revenue Total Revenue EXPENDITURE Established staff Government wage earners Travel and communications Maintenance & operations Purchase of goods and services Operating grants and transfers Special expenditures 31 July 2016 ($) 31 December 2015 ($) 17,129 1,390 18,519 2,608,147 196,070 724,319 414,333 616,446 750,000 72,800 1,121 1,598 2,719 3,898,000 269,989 807,487 1,257,096 537,103 750,000 92,380 Parliament Office Section 12: Page 1 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017______________________________________ Description Total Operating Expenditure Capital Constructions Capital grants and transfers Total Capital Expenditure Value Added Tax 31 July 2016 ($) 5,382,115 31 December 2015 ($) 7,612,055 - - - 193,838 - - - Total Expenditure 5,5575,953 7,612,055 The financial year end for Government was changed from 31 December to 31 July in accordance with the Financial Management (Amendment) Act 2016.
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 increase in expenditure for Purchases of Goods and Services in 2016 was due to procurement of office equipment and furniture and fittings during the year.
Operating grant remained constant and included allocated funding to political parties for the running of their Parliamentary Offices as follows:  Fiji First Party - $480,000  SODELPA - $225,000  National Federation Party - $45,000 12.3 Appropriation Statement The Parliament Office incurred expenditure totalling $5.6 million in 2016 against a revised budget of $9.8 million, resulting in a saving of $4.2 million or 43%.
The large savings was due to the budget being for the whole of 2016 while expenditures were only for seven months up to 31 July 2016.

Details of expenditure against the revised budget are provided in Table 12.2.
Table 12.2: Appropriation Statement for 2016 SEG Item Budget Estimate ($) Changes ($) Revised Estimate ($) Actual Expenditure ($) Lapsed Appropriation ($) Established Staff Unestablished Staff Travel & Communication Maintenance & Operations Purchase of Goods & Services Operating Grants & Transfers Special Expenditure Total Operating Costs Capital Constructions Capital Grants and Transfers Total Capital Expenditure Value Added Tax TOTAL - - - - - 9,850,878 - 9,850,878 - - - - 9,850,878 - - - - - - - - - - - - - - - - - - 9,850,878 - 9,850,878 - - - - 9,850,878 - - - - - 5,382,115 - 5,382,115 - - - 193,838 5,575,953 4,468,763 4,468,763 (193,838) 4,274,925 Parliament Office Section 12: Page 2 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017_____________________________ Section 13 Independent Commissions Grant Roles and Responsibilities Fiji’s independent commissions directly serve the people in specialised areas where objective and non-political judgment is required.
These commissions apply the law independently, and are valuable tools for transparent and accountable 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.
A sum of $15.9 million is provided to fund the operations of the five Independent the Commissions: Accountability and Transparency Commission, Information Commission, Public Service Commission and the Fiji Independent Commission Against Corruption.
the Human Rights and Anti-Discrimination Commission, the Freedom of Table of Contents PART A: FINANCIAL STATEMENTS ..................................................................................................................................... 1 13.1 Audit Opinion ...................................................................................................................................... 1 13.2 Statement of Receipts and Expenditure ............................................................................................. 1 13.3 Appropriation Statement ..................................................................................................................... 2 PART B: AUDIT FINDINGS ..................................................................................................................................................... 3 13.4 Backlog Audited Financial Statement ................................................................................................. 3 13.5 Expenditure Classification .................................................................................................................. 5 PART A: FINANCIAL STATEMENTS 13.1 Audit Opinion The audit of the 2016 accounts for grants paid to the five Independent Commissions were conducted separately in conjunction with the line Ministry/Department responsible for administering the funds allocated under Head 13 of the budget estimates.
13.2 Statement of Receipts and Expenditure The Independent Commissions incurred expenditure totalling $7,214,461 for the seven months period ended 31 July 2016.
Table 13.1: Statement of Receipts and Expenditure for 2016 Description EXPENDITURE Established Staff Operating grants and transfers Total Operating Expenditure 31 July 2016 ($) 31 December 2015 ($) 398,656 6,815,806 7,214,462 9,053,686 9,053,686 Independent Commissions Section 13: Page 1 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017_____________________________ Description Total Expenditure 31 July 2016 ($) 7,214,462 31 December 2015 ($) 9,053,686 The financial year end for Government was changed from 31 December to 31 July in accordance with the Financial Management (Amendment) Act 2016.
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.

13.3 Appropriation Statement The Independent Commissions grant totalled $7,214,462 in 2016 against a revised budget of $15,882,939 resulting in savings of $8,668,477 or 54%.
The large savings was due to the budget being for the whole of 2016 while expenditures were only for seven months up to 31 July 2016.

Details of expenditure against the revised budget are provided in Table 13.2.
Table 13.2: Appropriation Statement for 2016 SEG Item Budget Estimate ($) Changes ($) Revised Estimate ($) Actual Expenditure ($) Lapsed Appropriation ($) 1 6 Established Staff Operating Grants & Transfers Total Operating Expenditure --- 15,882,939 15,882,939 Total Expenditure 15,882,939 --- --- --- --- --- 15,882,939 15,882,939 398,656 6,815,806 7,214,462 (398,656) 9,067,133 8,668,477 15,882,939 7,214,462 8,668,477 The Human Rights and Anti Discriminations Commissions were allocated $1,164,352 for the year 2016.
The Attorney General’s Office is responsible for administration of this fund in accordance to the budget.

For the period ending 31 July 2016, expenditure totalling $194,059 was incurred under this appropriation.

Public Service Commission was allocated $5,502,530 for the year 2016 to cater for salaries and allowances and other expenses for contracted Permanent Secretaries.

The Ministry of Civil Service is responsible for the administration of this fund in accordance to the budget.
For the transitional period ending 31 July 2016, expenditure totalling $2,592,029 was incurred under this appropriation.

No operating grant was paid out of this allocation but the salaries and other related expenses for Permanent Secretaries were directly charged to this allocation.

Fiji Independent Commission Against Corruption was allocated $8,480,987 for the year 2016.

The Ministry of Economy is responsible for the administration of this fund in accordance to the budget.
For the period ending 31 July 2016, expenditure totalling $4,428,374 was incurred under this appropriation.

However, no expenditure was incurred on the budgetary allocations provided for the Accountability and Transparency Commission and Freedom of Information totalling $635,070 and $100,000, respectively for the period ended 31 July 2016.
Independent Commissions Section 13: Page 2 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017_____________________________ PART B: AUDIT FINDINGS 13.4 Backlog Audited Financial Statement The accounts of the Fiji Human Rights Commission must be audited by the Auditor General.1 The Fiji Human Rights Commission shall provide to the Office of the Attorney- General a final audit report in accordance with this clause no later than two months after the period under audit.2 The audit noted that the last audit of the accounts of the Fiji Human Rights Commission was carried out in year 2008 for the 2007 accounts.
The Fiji Human Rights Commission has not been audited since 2008 even though quarterly reports have been provided to Attorney- General Office for the release of grants in 2016.

Refer to Table 13.3 for details.


Table 13.3: Details of Backlog Financial Statements Year Grant Amount ($) Remarks Fiji Human Rights Commission 2008 2009 2010 2011 2012 2013 2014 2015 2016 Total 950,000 802,500 415,000 361,999 465,309 412,500 550,000 550,000 194,0593 4,701,367 Accounts are yet to be submitted to Auditor General’s Office for audit since 2008.

The delay in submission of audited accounts indicates that necessary action was not taken against the Commission prior to release of grants.
The significant delay in audit of the Commission’s accounts also increases the risk of unauthorized expenses and diversion of funds.

Recommendation The Fiji Human Rights Commission accounts should be prepared and audited within two months at the end of each financial year in accordance with clause 7.3 of the Grant Agreement.
Office Comments Section 45(2) of the Human Rights Commission Act expressly provides that “with the prior written approval of the Minister, any Commissioner may from time to time, by writing under his or her hand, delegate to any employee of the Commission any of the Commissioners powers under this Decree, except this power of delegation and the power to make any report under this Decree”.
Furthermore, pursuant to part 15 of the Human Rights Commission Finance Manual, the responsibility of the preparation of financial reports is assigned to the Director, the Deputy Director and Accountant.

Procedurally, the Deputy Director is responsible for coordinating the preparation of a monthly management report outlining the performance of the Commission including the formulation of a financial performance report.
The Accountant of the Commission is required to submit a financial performance report including (i) actual revenue collected against forecast (ii) actual 1Fiji Human Rights Commission Decree 2009 – Section 16 (2) 2 2016 Grant Agreement Between Attorney General Office & Fiji Human Rights & Anti-Discrimination Commission – Clause 7.3 3 This is the amount of Grant released for January to July 2016 Independent Commissions Section 13: Page 3 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017_____________________________ expenditure to date against budget for each activity/output and each SEG (iii) actual expenditure to date and commitments against budget for each output/activity and each SEG.
Since 2008 however, the Commission has been functioning without a Chairperson and Commissioners.

The Commission was without a Director and Deputy Director in 2009.

The Principal Legal Officer assumed the responsibilities of the Officer in Charge in 2009 until 2011 when the Accountant took over the responsibilities of the Officer in Charge.

It is imperative to note that since 2008, the officers of the Commission have failed to comply with the requirements of the Finance Manual.
The Commission, however, has had periodic Operation’s Audit conducted by the Auditor General.

The last Operations Audit was conducted in 2014 and the next is scheduled for later this year.

Pursuant to section 45 (2) of the Fijian Constitution, the President on the advice of the Constitutional Offices Commission appointed a Chairperson and four Human Rights Commissioners in May 2015.

In February 2016, the Board appointed a substantive Director.
Following these appointments, the Commission conducted a full ‘board of survey’ in 2016 verifying the existence and physical health of all assets dating back to 1999.

The Board of Survey reported missing items for which the Commission has instituted disciplinary proceedings including the termination of contract of service for three staff.

Furthermore, the Commission has also conducted an Audit of the Complaints department in 2016 which revealed understatement of complaints received by the Commission.
Assistance was also sought from the Fiji Revenue and Customs Authority to audit the Commission’s accounting software.

The Commission, therefore, has made serious efforts in strengthening institutional governance since the appointment of the Commissioners and the Director.
Way Forward In order to comply with the national legislations on financial accountability, the Commission will appoint a qualified auditor on project term who will undertake the responsibility of preparing the financials and submission to the Office of the Auditor General.

The appointment will be made by June 2017.
The timelines are as follows: Year 2008 financials 2009 financials 2010 financials 2011 financials 2012 financials 2013 financials 2014 financials 2015 financials 2016 financials Targets 30 November 2017 – submit to Board 15 December 2017 – submit to OAG 08 June 2018 – submit to Board 29 June 2018 – submit to OAG 30 November 2018 – submit to Board 21 December 2018 – submit to OAG 12 April 2019 – submit to Board 26 April 2019 – submit to OAG 09 August 2019 – submit to Board 30 August 2019 – submit to OAG 06 December 2019 – submit to Board 20 December 2019 – submit to OAG 10 April 2020 – submit to Board 01 May 2020 – submit to OAG 07 August 2020 – submit to Board 28 August 2020 – submit to OAG 04 December 2020 – submit to the Board 22 December 2020 – submit to OAG Furthermore, the Commission has formulated a financial manual.
By 2020, the Commission envisages to fully implement a standardised financial reporting mechanism compliant with International Financial Reporting Standards and national legislations.
Independent Commissions Section 13: Page 4 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017_____________________________ 13.5 Expenditure 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.4 The Public Service Commission was allocated $5,502,530 under Head 13 Independent Commission 2016 budget.
The total budget allocated was recorded under SEG 6 – Operating Grants and Transfers and the actual expenditure incurred as at 31 July 2016 was $2,193,373.

Moreover, total expenditure of $398,656 was also incurred under SEG 1 of Head 13 without an approved budget.

The Ministry of Civil Service administered the allocation for Public Service Commission Budget Head 13 and it was used to cater for payment of salaries, allowances and other related payments for all permanent secretaries in the civil service.
No grant was paid from the allocation.

The classification of the budget allocation for the Public Service Commission (Head 13) under SEG 6 – Operating Grant and Transfers may be inappropriate as the budget was used for payment of salaries and allowances of appointed Permanent Secretaries in Government.

Recommendation The operating expenditure allocation in Head 13 Public Service Commission should be classified appropriately to relevant Special Expenditure Groups (SEG).
Ministry’s Comments The recommendation is agreed.

4 Financial Management Act 2004 Section 13 (2)(b)(i) Independent Commissions Section 13: Page 5 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 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 judgment 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 ................................................................................................................. 3 14.5 Trust Fund Account Statement of Receipts and Payments ...................................................... 3 PART A: FINANCIAL STATEMENT 14.1 Audit Opinion The audit of the 2016 accounts of the Office of the Director of Public Prosecutions resulted in an unqualified audit opinion.
14.2 Statement of Receipts and Expenditure The Office of the Director of Public Prosecutions recorded revenue totalling $9,515 and incurred expenditure totalling $2,780,374 for the seven months period ended 31 July 2016.
Office of the Director of Public Prosecutions Section 14: Page 1 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017___________________________________ Table 14.1: Statement of Receipts and Expenditure for 2016 Description RECEIPTS Commission Agency revenue TOTAL RECEIPTS EXPENDITURE Operating Established Staff Government Wage Earners Travel & Communications Maintenance & Operations Purchase of Goods & Services Special Expenditures Total Operating Expenditure Value Added Tax TOTAL EXPENDITURE 31 July 2016 ($) 31 December 2015 ($) 9,515 - 9,515 1,985 - 1,985 1,520,985 111,494 156,083 290,283 604,984 - 2,683,829 96,545 2,780,374 2,742,310 172,886 236,680 387,655 797,761 117,259 4,454,551 241,765 4,696,316 The financial year end for Government was changed from 31 December to 31 July in accordance with the Financial Management (Amendment) Act 2016.
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.

Total revenue increased by $7,530 or by 379% in 2016 compared to 2015.

This was due to reimbursement of $7,951 for Director of Public Prosecution travel to attend the New York Financial Crimes Symposium as a Speaker.
14.3 Appropriation Statement The Office incurred expenditure totalling $2,780,374 in 2016 against a revised budget of $6,057,643 resulting in savings of $3,277,269 or 54%.

The large savings was due to the budget being for the whole of 2016 while expenditures were only for seven months up to 31 July 2016.

Details of expenditures against the revised budget are provided in Table 14.2.
Table 14.2: Appropriation Statement for 2016 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 ($) 3,398,480 188,033 244,930 337,200 1,565,000 120,000 5,853,643 204,000 6,057,643 Changes ($) (232,000) 26,000 20,000 106,000 145,000 (65,000) - - - Revised Estimate ($) 3,166,480 214,033 264,930 443,200 1,710,000 55,000 5,853,643 204,000 6,057,643 Actual Expenditure ($) 1,520,985 111,494 156,083 290,283 604,984 - 2,683,829 96,545 2,780,374 Lapsed Appropriation ($) 1,645,495 102,539 108,847 152,917 1,105,016 55,000 3,169,814 107,455 3,277,269 Office of the Director of Public Prosecutions Section 14: Page 2 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017___________________________________ 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 period ending 31 July 2016.
14.5 Trust Fund Account Statement of Receipts and Payments The Office of the Director of Public Prosecutions maintains Public Prosecution and Forfeited Assets Trust Fund Account.

The Public Prosecution Trust Fund Account recorded a balance of $82,085 for the financial period ending 31 July 2016.

The Office recorded receipts totalling $2,747 and expenses totalling $379 resulting in surplus of $2,368 for the seven months period ended 31 July 2016.
Details of receipts against the payments are provided in Table 14.3.
Table 14.3: Public Prosecution Trust Fund Account Statement of Receipts and Payments 2016 Description RECEIPTS Lawyers’ Prosecution Training Fees Interest Total Receipts PAYMENTS Court Order for transfer to Forfeited Asset Fund Refund of Lawyers’ Prosecution Training Fees Bank Fees Total Payments Net Surplus 31 July 2016 ($) 31 December 2015 ($) Re-stated 2,700 47 2,747 - 300 79 379 2,368 8,500 82 8,582 8,339 - 142 8,481 101 Opening Balance as at 1 January 79,717 79,616 Closing Balance as at 31 July 82,085 79,717 The Forfeited Assets Trust Fund Account recorded a balance of $353,846 for the financial period ending 31 July 2016.
The Office recorded receipts totalling $295,173 but did not incur any expenses resulting in surplus of $295,173 for the seven months period ended 31 July 2016.

Details of receipts and payments are provided in Table 14.4.
Table 14.4: Forfeited Asset Trust Fund Account Statement of Receipts and Payments 2016 Description RECEIPTS Court Order for transfer from DPP Trust Account Proceeds from sale of forfeited assets Office of the Director of Public Prosecutions 31 July 2016 ($) 31 December 2015 ($) Re-stated - 205,440 8,339 - Section 14: Page 3 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017___________________________________ Description Proceeds of the mortgagee sale Interest Total Receipts PAYMENTS Purchase of Computer hardware and other equipment for Fiji Police Force Bank Fees Total Payments 31 July 2016 ($) 89,623 110 295,173 - - - 31 December 2015 ($) Re-stated - 95 8,434 48,801 1 48,802 Net Surplus/(Deficit) 295,173 (40,368) Opening Balance as at 1 January 58,673 99,041 Closing Balance as at 31 July 353,846 58,673 Office of the Director of Public Prosecutions Section 14: Page 4 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017____________________________ Section 15 Ministry of Justice Roles and Responsibilities Department of Justice The Ministry of Justice is responsible for the efficient and effective 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, money lenders, bankrupt people, wound up companies.
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 Trust Fund Account Statement of Receipts and Payments ...................................................... 3 PART B: AUDIT FINDINGS ..................................................................................................................................................... 4 15.5 Improper Recording of Trust Fund Account Balance in FMIS Ledger ..................................... 4 15.6 Absence of Detailed Listings for Official Receivers Trust Fund Account Balances ................. 5 15.7 Drawings Reconciliation ........................................................................................................... 6 15.8 Revolving Fund Account (RFA) ................................................................................................ 7 PART A: FINANCIAL STATEMENTS 15.1 Audit Opinion The audit of the 2016 accounts for the Ministry of Justice resulted in the issue of a qualified audit report.
The qualifications were as follows:  The Trust Fund Account was first reflected in the FMIS general ledger in 2016.

Included in the Official Receiver Liquidation Trust and the Official Receiver Bankruptcy Trust Account Statement of Receipts and Payment are opening balances of $647,508 and $176,520, respectively.

Due to the lack of appropriate supporting documents, I was not able to substantiate the opening balances.
 In addition to the above, the Ministry did not maintain a detailed listing of the beneficiaries of the Trust Account.

Hence, the completeness of the closing balances of $617,248 and $219,630, respectively as reflected in the Statement of Receipts and Payments for the Official Receiver Liquidation Trust and Official Receiver Bankruptcy Trust could not be substantiated.
Ministry of Justice Section 15: Page 1 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017____________________________ 15.2 Statement of Receipts and Expenditure The Ministry collected revenue totaling $1,418,274 and incurred expenditure totaling $2,292,721 for the seven months period ended 31 July 2016.

Refer to Table 15.1 for details.
Table 15.1: Statement of Receipts and Expenditure for 2016 Description RECEIPTS State Revenue Miscellaneous Fees Registration Fees Licenses Fees Other State Revenue Total State Revenue TOTAL REVENUE EXPENDITURE Operating Expenditure Established Staff Government Wage Earners Travel and Communications Maintenance and Operations Purchase of Goods and Services Operating Grants and Transfers Special Expenditure Total Operating Expenditure Capital Expenditure Capital Construction Purchase Total Capital Expenditure Value Added Tax TOTAL EXPENDITURE 2016 ($) 2015 ($) 874,921 525,782 15,104 2,467 1,418,274 1,004,158 563,307 49,563 2,060 1,619,088 1,418,274 1,619,088 1,189,941 108,126 82,922 307,213 69,248 --- 216,434 1,973,884 207,238 36,927 244,165 74,672 2,292,721 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 The financial year end for Government was changed from 31 December to 31 July in accordance with the Financial Management (Amendment) Act 2016.
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 increase in Capital Construction expenditure in 2016 by $207,238 was due to the construction of new Births, Deaths and Marriage (BDM) offices around the country.
15.3 Appropriation Statement The Ministry incurred expenditure totaling $2,292,721 in 2016 against the revised budget of $4,879,321 resulting in savings of $2,586,600 or 53%.

The large savings was due to the budget being for the whole of 2016 while expenditures were only for seven months up to 31 July 2016.

Details of expenditure against the 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 – JUNE 2017____________________________ Table 15.2: Appropriation Statement for 2016 SEG Item Established Staff Government Wage Earners Travel & Communications Maintenance & Operations Purchase of Goods & Services Operating Grants & Transfers Special Expenditures Total Operating Expenditure Construction Purchase Total Capital Expenditure Value Added Tax TOTAL EXPENDITURE Budget Estimate ($) 2,601,907 147,514 258,000 616,000 179,500 11,500 350,000 4,164,421 400,000 140,000 540,000 174,900 4,879,321 Changes ($) (50,000) 10,000 (60,000) --- (50,300) --- 211,200 60,900 --- (60,900) (60,900) --- --- Revised Estimate ($) 2,551,907 157,514 198,000 616,000 129,200 11,500 561,200 4,225,321 400,000 79,100 479,100 174,900 4,879,321 Actual Expenditure ($) 1,189,941 108,126 82,922 307,213 69,248 --- 216,434 1,973,884 207,238 36,927 244,165 74,672 2,292,721 Lapsed Appropriation ($) 1,361,966 49,388 115,078 308,787 59,952 11,500 344,766 2,251,437 192,762 42,173 234,935 100,228 2,586,600 15.4 Trust Fund Account Statement of Receipts and Payments The Ministry of Justice maintains the Official Receiver Liquidation and the Official Receiver Bankruptcy Trust Accounts.
The Official Receiver Liquidation Trust Fund Account recorded a balance of $617,248 for the financial period ending 31 July 2016.

The Ministry recorded receipts totalling $950,071 and payments totalling $980,331 resulting in deficit of $30,260 for the seven months period ended 31 July 2016.

Details of receipts against payments are provided in Table 15.3.
Table 15.3: Payments 2016 Official Receiver Liquidation Trust Fund Account Statement of Receipts and Descriptions RECEIPTS Debtors search and petition fee/Bond/Proof of Debt Bankruptcy Total Receipts PAYMENTS Partial, Full and Final Payment Of Creditors Total Payments 2016 ($) 2015 ($) 950,071 1,068,300 950,071 1,068,300 980,331 1,942,248 980,331 1,942,248 Net Surplus/(Deficits) (30,260) (873,948) Balance as at 1 January 647,508 1,521,456 Balance as at 31 December 617,248 647,508 The Official Receiver Bankruptcy Trust Fund Account recorded a balance of $219,630 for the financial period ending 31 July 2016.
The Ministry recorded receipts totaling $91,854 and payments totaling $48,744 resulting in surplus of $43,110 for the seven months period ended 31 July 2016.
Ministry of Justice Section 15: Page 3 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017____________________________ Details of receipts against payments are provided in Table 15.4 Table 15.4: Payments 2016 Official Receiver Liquidation Trust Fund Account Statement of Receipts and Descriptions RECEIPTS Debtors search and petition fee/Bond/Proof of Debt Bankruptcy Total Receipts 2016 ($) 2015 ($) 91,854 150,631 91,854 150,631 PAYMENTS Partial, Full and Final Payment Of Creditors Total Payments 48,744 48,744 114,671 114,671 Net Surplus/(Deficits) 43,110 35,960 Balance as at 1 January 176,520 140,560 Balance as at 31 December 219,630 176,520 PART B: AUDIT FINDINGS 15.5 Improper Recording of Trust Fund Account Balance in General Ledger The receipt and payment of trust money must be recorded in a separate cash book or set of ledger accounts.1 The Ministry of Justice has recorded a credit balance of $836,879 under the Standard Liability Group (SLG) 89 whilst the corresponding debits are reflected under their respective Standard Asset Group (SAG) 52 account.
Refer to Table 15.5 for details.

Table 15.5: Official Receiver Bankruptcy and Liquidation Trust Fund Account Ledger Balances Description SAG 52 Allocation Amount ($) SLG 89 Allocation Liquidation Trust 9-15101-15999-520401 9-15101-91991-520401 Bankruptcy 617,249 9-15101-15999-895061 219,630 9-15101-91991-895062 Amount ($) (617,249)) (219,630) The audit noted that these accounts have been reflected in the FMIS general ledger for the first time in 2016.
The Ministry had been previously maintaining manual cash book, bank statements and cash at bank reconciliations only.

The opening balance of $647,508 for the Liquidation Trust and $176,520 for the Bankruptcy Trust reflected in the Statement of Receipts and Payments could not be substantiated.

The audit also noted that the Main Trust ledger balances consisted of just one bulk posting into each of the two accounts without details of receipts and payments made available for audit review.
1 Finance Instructions 2010, Section 58 (1) Ministry of Justice Section 15: Page 4 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017____________________________ Furthermore, the account names of the two bank accounts in the general ledger are stated as “Generated Account” without any distinction on whether it is for the Bankruptcy or Liquidation trust account.
It is evident that the Ministry did not follow proper transition from their manual records to the FMIS in ensuring that the complete sets of transaction in the manual cash book were captured into the FMIS system.

As such, no reliance could be placed on the accuracy and completeness of the Main Trust ledger balances during the audit.
Recommendations The Ministry should:   avoid bulk postings into the general ledger; and ensure that receipts and payments in the Trust Accounts are posted in the general ledger.

Ministry’s Comments The bulk postings in the general ledger account for the Official Receiver Liquidation Trust Account and Bankruptcy Trust Account was done by the Ministry of Economy.

Prior to 2016, the Ministry did not have the general ledger account for the Official Receiver’s Trust Account.
In 2016, the Office of the Auditor General recommended that the Ministry Of Justice should create a general ledger account which we have complied with last year and now all receipts and payments in the Trust Account are posted in the general ledger.
15.6 Absence of Detailed Listings for Official Receivers Trust Fund Account Balances Within 5 days after the end of each month, the Assistant Accounts Officer shall prepare a trust reconciliation to reconcile trust account balances to the ledger total and the trust bank account.2 Details of balances must be attached to the reconciliation statement.3 The Ministry maintains two separate Bank Accounts for the Official Receiver Bankruptcy Accounts and the Official Receiver Liquidation Accounts.
The Bankruptcy Accounts maintains records of receipts and payments for individuals under receivership whilst the Liquidation Accounts maintains records of receipts and payments for companies under provisional liquidation.

Details of cash at bank balances for the Official Receivers Bankruptcy and Liquidation Trust Fund Accounts as at 31 July 2016 are shown in Table 15.6.
2 Ministry of Justice Finance Manual 2011, Section 14.4.1, p 89 3 Ministry of Justice Finance Manual 2011, Section 14.4.2, p 89 Ministry of Justice Section 15: Page 5 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017____________________________ Table 15.6: Official Receiver Trust Account Balances Description Liquidation Trust Bankruptcy Trust Total Amount ($) 617,249 219,630 836,879 The audit noted that detailed listing of the balances for companies and individuals under provisional liquidation and receivership as at 31 July 2016 were not held.
It is apparent that the Ministry has not been monitoring the balances as per Cash book against the corresponding debtors’ accounts which has contributed to the problem.

In view of the above, the audit could not place any reliance on the completeness of the closing balances of the Official Receivers Liquidation and Bankruptcy Trust Account.

Recommendation The Ministry should ensure that the records of individual debtors are updated and reconciled against the Trust Fund Account Balance.
Ministry’s Comments We noted the audit finding and state that the debtors records and statements are not compiled listings however the statements are kept in respective debtor’s folders.

Based on the audit findings, we are in the process of compiling detailed listings for Official Receivers Trust Fund Account Balances.
15.7 Drawings Reconciliation The Principal Accounts Officer 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.4 The audit noted that there were variances between the Drawings Account reconciliation and the general ledger balance.

Refer to Table 15.7 for details.


Table 15.7: Variance in the Drawings Reconciliation Department General Ledger Ministry of Justice ($) 184,921 Unpresented Cheque List ($) 182,810 Difference ($) 2,111 Preparing monthly reconciliation statements is ineffective if variances noted in the Ministry’s books of accounts or the FMIS general ledger are not promptly rectified.
4 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 – JUNE 2017____________________________ Recommendations The Ministry should:  investigate and rectify the variances noted between its reconciliation statements and the general ledger; and  ensure that proper and accurate monthly reconciliations are carried out.
Ministry’s Comments The variance between the drawings reconciliation and the general ledger was due to mis-postings of the sum of $2,111.50 by the Ministry of Economy.
15.8 Revolving Fund Account (RFA) Reconciliation is an internal control mechanism established to ensure the accuracy of financial reports being produced not only at ministry/department level and/but most importantly at whole of government level.5 The Accounts Officer must reconcile all accounts to be submitted to Ministry of Finance within two weeks after the closing of each monthly account.6 The Principal Accounts Officer must verify all the reconciliations before signing and submitting it to Ministry of Finance.7 The audit noted the Ministry did not provide reconciliations for the following Revolving Fund Accounts as at 31 July 2016.
Refer to Table 15.8 for details.

Table 15.8: Reconciliations not provided Account No.

Account Description Amount 1-15101-15999-570101 AR Prepaid Expenses 1-15101-15999-570304 Surcharges ($) (47) (5,279) Moreover, it was noted that the Revolving Fund Account (SAG 57 – Asset Account) had closing credit balance of $4,661 as at 31 July 2016.

The above findings show the ineffective internal controls that exist within the Ministry.
Recommendation The Ministry should comply with the procedures relating to the preparation and submission of reconciliation statements.
5 Ministry of Justice Finance Manual 2013 – Section 16.2.4 6 Ministry of Justice Finance Manual 2013 – Section 16.2.5 7 Ministry of Justice Finance Manual 2013 – Section 16.2.6 Ministry of Justice Section 15: Page 7 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017____________________________ Ministry’s Comments For the overall credit balance of $4,661.41 for the Revolving Fund Account, the Ministry of Economy had posted the sum of $2,111.50 twice in the FMIS while the balance of $438.41 will be cleared during the current financial year.
Ministry of Justice Section 15: Page 8 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017____________________________ Section 15A Fiji Corrections Service Roles and Responsibilities Fiji Corrections Services The Fiji Corrections Service is responsible for the safety and security, the humane treatment and the provision of relevant and appropriate behavioural 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: FINANCIAL STATEMENTS ..................................................................................................................................... 1 15.A1 Audit Opinion ............................................................................................................................ 1 15.A2 Statement of Receipts and Expenditure ................................................................................... 1 15.A3 Appropriation Statement ........................................................................................................... 2 15.A4 Trust Fund Account Statement of Receipts and Payments ...................................................... 3 15.A5 Trade and Manufacturing Account ........................................................................................... 3 PART B: AUDIT FINDINGS ..................................................................................................................................................... 4 15.A6 Unsubstantiated Accounts Receivable ..................................................................................... 4 15.A7 Variances in TMA Cash at Bank ............................................................................................... 6 15.A8 Lack of Guideline on Operation of Prisoners Trust Fund Account ........................................... 8 15.A9 Expenditure recorded contrary to the Appropriation Provided ............................................... 10 PART A: FINANCIAL STATEMENTS 15.A1 Audit Opinion The audit of the 2016 accounts of the Fiji Corrections Service resulted in the issue of an unqualified audit report.
15.A2 Statement of Receipts and Expenditure The Fiji Corrections Services recorded revenue totalling $63,533 and incurred expenditure totalling $16,861,453 for the seven months period ended 31 July 2016.

Refer to Table 15A.1 for details.
Fiji Corrections Service Section 15A: Page 1 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017____________________________ Table 15A.1: Statement of Receipts and Expenditure for 2016 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 31 July 2016 ($) 31 Dec 2015 ($) The financial year end for Government was changed from 31 December to 31 July in accordance with the Financial Management (Amendment) Act 2016.
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.

15.A3 Appropriation Statement The Department incurred a total expenditure of $16,861,453 against the revised budget of $39,419,626 resulting in savings of $22,558,173 or 57%.
The large savings was due to the budget being for the whole of 2016 while expenditures were only for seven months up to 31 July 2016.

Details of expenditure against the revised budget estimate are provided in Table 15A.2.
Table 15A.2: Appropriation Statement for 2016 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 Fiji Corrections Service Budget Estimate ($) 21,599,258 34,656 490,670 1,793,000 3,285,432 46,260 605,650 27,854,926 9,440,000 660,000 Change ($) (208,760) --- --- 166,352 Revised Estimate ($) 21,390,498 34,656 490,670 1,959,352 Actual Expenditure ($) Lapsed Appropriation ($) 11,205,824 20,361 261,005 1,291,048 10,184,674 14,295 229,665 668,304 --- 3,285,432 2,047,053 1,238,379 --- --- (42,408) --- 42,408 46,260 605,650 27,812,518 9,440,000 702,408 4,821 125,256 14,955,368 1,275,618 157,521 41,439 480,394 12,857,150 8,164,382 544,887 Section 15A: Page 2 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017____________________________ SEG Item 13 Total Capital Expenditure Value Added Tax TOTAL EXPENDITURE Budget Estimate ($) 10,100,000 1,464,700 39,419,626 Change ($) 42,408 --- --- Revised Estimate ($) 10,142,408 1,464,700 39,419,626 Actual Expenditure ($) 1,433,139 472,946 16,861,453 Lapsed Appropriation ($) 8,709,269 991,754 22,558,173 15.A4 Trust Fund Account Statement of Receipts and Payments Table 15A.3: Trust Account Statement for 2016 Trust Fund Account Receipts Prisoners Cash Total Receipts Payments Prisoners Cash Total Payments Net (Loss)/Surplus Balance as at 1 January 2015 CLOSING BALANCE 31 July 2016 ($) 31 Dec 2015 ($) 26,730 26,730 43,759 43,759 (17,029) 457,389 440,360 319,570 319,570 145,762 145,762 173,808 283,581 457,389 15.A5 Trade and Manufacturing Account Table 15A.4: Manufacturing Account for 2016 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 Table 15A.5: Trading Account for 2016 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 31 July 2016 ($) 150,988 872,459 142,969 880,478 58,031 10,905 108,721 31 Dec 2015 ($) 116,530 1,681,591 150,988 1,647,133 2,725 30,945 58,031 840,693 1,622,772 31 July 2016 ($) 1,508,348 459,387 840,693 396,308 903,772 31 Dec 2015 ($) 2,462,430 440,123 1,622,772 459,387 1,603,508 604,576 858,922 Fiji Corrections Service Section 15A: Page 3 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017____________________________ Table 15A.6: Profit & Loss Statement for 2016 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 2016 Balance Sheet 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 31 July 2016 ($) 31 Dec 2015 ($) 604,576 --- 604,576 --- 169,008 --- --- --- 169,008 435,568 858,922 --- 858,922 3,363 367,082 --- --- --- 370,445 488,477 31 July 2016 ($) 31 Dec 2015 ($) 639,420 241,118 142,969 108,721 396,308 1,528,536 315,781 151,745 150,988 58,031 459,387 1,135,932 (2,303) (2,303) 1,530,839 (4,982) (4,982) 1,140,914 122,883 972,388 435,568 1,530,839 116,751 535,686 488,477 1,140,914 PART B: AUDIT FINDINGS 15.A6 Unsubstantiated Accounts Receivable The Accounts Officer shall prepare a quarterly report on the level of outstanding and overdue debts.
This report shall be included in the quarterly management report to the Commissioner of Correction Services.
The report must outline: (i) the amount outstanding but not yet due; (ii) the total for each overdue age category; (iii) name of each debtor within each age category; and (iv) the recovery actions taken for each overdue debt.1 1 Fiji Corrections Services Agency Manual – Section 9.3.1-9.3.3 Fiji Corrections Service Section 15A: Page 4 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017____________________________ The aging of overdue debts shall be within the following categories:2 Not Yet Due Overdue 0-3 months 4-6 months 7-9 months 10-12 months Overdue Overdue Overdue Within the first week of each month, the Officer in Charge shall prepare a list of debts that are not yet due and those that are overdue.3 Audit review of TMA debtors revealed the following anomalies: (i) A variance of $27,700 was noted between the general ledger balance and debtors listing as at 31/07/16.
Refer to Table 15A.8 for details.
Table 15A.8: Variances between Debtors listing and FMIS Particulars GL balance: 4-15200-00000-56000 Less: Debtors listing - Tailor Debtors listing – Joinery Debtors listing – Bakery Debtors listing – Poultry Debtors listing – Other Debtors listing – Piggery Variance Amount ($) 241,118 19,520 13,201 43,400 121,515 13,148 2,634 213,418 27,700 (ii) The Department did not prepare individual debtors reconciliation showing opening balance, movements and closing balance as at 31/07/16.
(iii) The Department did not prepare debtors ageing report as at 31/07/16.

The above findings indicate the existence of weak controls in receivables management which could result in errors and omissions and fraud not being detected on a timely basis.
Recommendations Fiji Corrections Services must ensure that:  debtor reconciliations are prepared on a monthly basis and ageing report is prepared;  the reported variance is investigated and rectified; and  recovery action is instigated against long outstanding debtors.

Management Comments The Tailor and Joinery debtors as listed in the report correlates to that on the ground, the variance raised in the report is from the debtors of the Poultry SBU.
2 Fiji Corrections Services Agency Manual – Section 9.3.4 3 Fiji Corrections Services Agency Manual – Section 9.2.2 Fiji Corrections Service Section 15A: Page 5 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017____________________________ The department has adhered to the comments made by the audit team to which a directive has now been issued that there will no more collecting cheques for payment of outstanding balances.
Improvement was also made to the debtor’s record for the 2016 -2017 period and has progressed well with the debtors ageing report as shown below: 15.A7 Variances noted in TMA Cash at Bank The Accounts Officer should ensure that all irregularities in the Bank Reconciliation is investigated and rectified within 7 work days and all irregularities are documented.4 For credit sales, the Supervisor Trading and Manufacturing Account shall prepare a sales invoice and delivery docket (if delivery is required).
The original invoice shall be handed to the purchaser and the copies retained.5 The Officer in charge of Correction Institutions must promptly follow up accounts that fall due.
If recovery is unsuccessful after one month, the following actions shall be taken: a) No further credit shall be extended to the debtor; b) A demand notice for payment shall be sent to the debtor after his/her debt has been overdue for more than one month; and c) If the account remains unpaid after the first demand notice was issued, a final notice shall be issued demanding payment within fourteen days.6 The audit noted that as at 31 July 2016, there was a variance of $15,859 between the Cash Book balance and the Bank Reconciliation Statement.
Refer to Table 15A.9 for details.
Table 15A.9: Variances in Cash at Bank Reconciliation Figures Description General Ledger Balances Opening balance – 01/01/16 Add: Receipts – 01/01/16 – 31/07/16 Less: Payments - 01/01/16 – 31/07/16 Amount ($) 489,961 1,480,689 (1,331,231) 4 Fiji Corrections Services Agency Finance Manual, Part 6, Section 6.5.4 5 Fiji Corrections Services Agency Finance Manual, Part 6, Section 6.4.6 6 Fiji Corrections Services Agency Finance Manual, Part 9, Section 9.2.1 Fiji Corrections Service Section 15A: Page 6 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017____________________________ Description Closing balances as per Cash Book Bank Reconciliation Statement Closing Balance as per Bank Statement Add: Lodgements not yet credited Less: Un-presented Cheques Closing Balance as per Bank Reconciliation Variance Amount ($) 639,419 627,483 - (3,923) 623,560 15,859 The audit noted also that a significant portion of the variance consists of outstanding debtors from 2015 and 2016 who have issued cheques as payment for various TMA goods which were later dishonoured by the bank.
Refer to Table 15A.10 for details.
Table 15A.10: Unpaid TMA Debts through Dishonoured Cheques Description Dishonored Cheques January Dishonored Cheques – Drawer 775864 Dishonoured Cheque at 28.07.15 Dishonoured Cheque – 16.1.15 (392) Dishonoured Cheque – 16.1.15 (390) Dishonoured Cheque – 16.1.15 (394) Dishonoured Cheque – 16.1.15 (395) Dishonoured Cheque – 16.1.15 (396) Dishonoured Cheque – 16.1.15 (397) Total Amount ($) 3,730 4,884 1,246 520 520 600 690 1,058 300 13,548 Variances in reconciliations could lead to fraud and misappropriation of funds resulting in write-offs in future.
Dishonoured cheques indicate that credit worthiness of customers are not determined prior to sale of goods on credit.

Credit sales not administered properly can also result in write-off of debts.
Recommendations Fiji Corrections Services must ensure that the:  reported variance is investigated and rectified;  credit facilities over to customers whose cheques have been dishonoured are reviewed and discontinued if necessary; and  necessary action is taken to recover debts arising from dishonoured cheques.. Management Comments This dishonoured cheques records were carried forward from the 2015 financial period.

Check and balances were made against the Bank Statements from 2015 to July 2016.
From the listing of dishonoured cheques shown in the report; only one cheque that was actually dishonoured is chq number 775864 -$4,884.00.

The other dishonoured cheques highlighted cannot be confirmed, whether it’s a cheque or receipt serial numbers.
Fiji Corrections Service Section 15A: Page 7 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017____________________________ The variances between FMIS GL balance and the Bank Reconciliation balance cannot be ascertained that it contains the dishonoured amount due the Cash Basis and Accrual Basis of accounting inter-woven in our revenue collection for TMA.

FCS will rectify this issue through the implementation of the AR Module in the FMIS.
This module will eliminate the accrual process completely and other delays of updating in the FMI system correlating to the transactions completed on the Ground.

Submission will be made to the Commissioner of Correction for approval of implementation.
15.A8 Lack of Guideline on Operation of Prisoners Trust Fund Account Details of balances must be attached to the reconciliation statement.7 Subject to subsection (2)- a) b) the supervisor, in the case of any person sentenced to imprisonment, whether by one sentence or cumulative sentences, for any period not exceeding twelve months; or the Controller, in the case of any person who is serving a sentence of imprisonment for any period exceeding twelve months and who is within twelve months of his earliest possible date of release with remission, -may, with the written consent of such person, release him to undertake public work outside the prison.8 Such person may, in addition to the public work which he is required to perform under this section, undertake for remuneration such other work as the supervisor or the Controller may approve.9 Subject to the provisions of this Act, every convicted criminal prisoner may be kept to labour, within or without the precincts of any prison, in any employment that may be prescribed and may be paid such remuneration in respect thereof as may be prescribed.10 The audit noted the following anomalies in relation to the operation of the Prisoner’s Trust Fund Account: (i) The general ledger showed a balance of $440,360.23 as at 31/07/16 for which details were not made available for audit purposes; (ii) Partial withdrawals were noted from Prisoners Trust Fund Account without any proper policy guidelines; (iii) The portion of the Prisoners Income which is to be transferred to government through the Consolidated Fund Account could not be ascertained by audit; and (iv) Approved Standard Operating Procedures (SoPs) were not prepared for receipt and payment of money into the Prisoners Trust Fund Account.
Hence the basis on which income is recorded in Trust Fund Account could not be determined.

Refer to Table 15A.11 for details.
Table 15A.11: Deficiencies Noted on the Prisoners Main Trust Fund Account Purpose Criteria Remarks Safekeeping of cash in the The full 100% of money deposited into the Trust Account is eligible -No policy guideline 7 Fiji Corrections Services Agency Finance Manual, Part 15, Section 15.4.2 8 Prisons Act (Cap 86),Section 61(1) 9 Prisons Act (Cap 86),Section 61(5) 10 Prisons Act (Cap 86),Section 62(1), p 31 Fiji Corrections Service Section 15A: Page 8 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017____________________________ Purpose Criteria possession of inmates upon their admission Job placement – When Prisoners with less than 12 months their sentences are offered work upon attachments satisfactory progress.
left on to inmates upon their discharge Draft Job Placement Policy- Section 5.0  60% to inmates bank accounts  40% to Trust Account which will be transferred to Consolidated Fund at the end of the year  On early release for employment, then 90% to inmates bank accounts and 10% to Trust Account which will be transferred to Consolidated Fund at the end of the year.
 On full release 100% to inmates Remarks -No list provided -No list of inmates with 60% -No evidence of funds transferred to CFA as at 31/07/16 Income earned by inmates from TMA Commercialisation The full 100% of money earned from Prisoners engagement in TMA Activity is kept in Trust to be paid to Prisoners.
-No policy guideline -No list provided In the absence of approved SoPs, there is a high risk of inconsistency in the operation of the Trust Fund Account which can lead to fraud and misappropriation of funds.

Recommendations Fiji Correction Services must ensure that:  SoPs are prepared and approved for the operation of the Prisoners Trust Fund Account; and  the closing balance as at 31 July 2016 is substantiated with relevant supporting documents.
Management Comments The Prisoners Cash Trust Fund Account was guided by the amended CAP 86 – Prisons Act.

The Prisoners Cash Trust Account has expanded its nature as we have introduced more Rehabilitation Programs for inmates such as the Art Gallery for paintings sold, job placements, sugarcane harvesting and pine propping.
There was a written memorandum by the then Commissioner Mr. Ioane Naivalurua on the portion of payment for the pay-out of paintings by the inmate sold at the Art Gallery which was a 60% for the inmate and 40% for government, for the painting materials requested by inmates.
The Job Placements was initiated during the then Commissioner Mr. Ifereimi Vasu and this was done through the signing of an Memorandum of Agreement between the companies that will take on the inmate on a temporary basis to work in their organisation whilst under the custody of the Fiji Corrections Service.

The pay-out portion is similar to the paintings a 60% and 40%.

The last two earnings by the inmates are from the sugarcane harvesting and pine propping which is also a 60% and 40% pay-out.
This undertaking were done through the advice of the then Commissioner Ifereimi Vasu in agreement with FSC and Fiji Pine.

FCS will review and amend the financial policies on all latest development as guidelines and will incorporate these policies into the Financial Manual for a guideline on the Operation of the Prison Trust Fund.
Fiji Corrections Service Section 15A: Page 9 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017____________________________ 15.A9 Expenditure recorded contrary to the Appropriation Provided The expenditure of money appropriated by an Appropriation Act from the consolidated fund or any other fund may be incurred only in accordance with the authorisation effected by the Appropriation Act as indicated in the Act.11 The appropriation for power supply ($500,000) and water, sewerage and fire services ($170,000) was appropriated for the year 2016 accordingly.12 The audit noted that part of expenditure incurred for water, sewerage and fire services totalling $35,812 was recorded as “Repair & Maintenance –Lland” ($25,180)13 and “Electricity” ($10,632)14 expenditure.
In addition, “electricity” expenditure of $3,432 was recorded as “Water, Sewerage and Fire services” expenditure.

As a result, water, sewerage and fire services expenditures in understated ($32,379) while electricity ($7,200) and repair and maintenance - land ($25,180) expenditure has been overstated for the financial period ending 31 July 2016..
The misallocation of expenditures indicate that proper checks were not carried out by accounting officers prior to posting or the different allocations were used due to sufficient funding not being available in the allocations from which the expenditures should have been incurred.

The mispostings have resulted in the expenditures for the respective allocations being misstated at financial year end.
Recommendation Fiji Corrections Services should ensure that expenditures are recorded in the correct allocations.

Management Comments The misallocation is noted and the reversal was not made due to the time constraints including the change of office of the accounting head (former SAO) thus divulging the corrections to these misallocations.
These payments were made due to the urgency of the matter, as the institutions safety and security demands that water and electricity should never be disconnected because it is directly linked to the National Security Issues of Government.

Virement was also made to address the shortfall to which it was returned back to its allocation.
11 Financial Management Act 2004 – Division 2 – Activity 1 – General Administration - Section 14 (1) 12 2016 Budget Estimate – Fiji Corrections Service – Page 85 13 Payment ID number 9469 14 Payment ID number 642892 and 8927 Fiji Corrections Service Section 15A: Page 10 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017_____________________________ Section 16 Ministry of Communication Department Communication of Information and Roles and Responsibilities Modern technology can create many opportunities for media, businesses, education, health and finance.
It provides access to a world of information and helps keep families and communities, often separated by vast distances, connected.

Government is committed to spreading the benefits of technology to all Fijians – to bridge the digital divide between the rural and urban, the rich and the poor.

The benefits of technological advances should be equally accessible to all Fijians and not just the elite.
In pursuit of this goal, 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.

The Ministry comprises the following Departments: Information, Communication and Information Technology and Computing Services.
Table of Contents PART A: FINANCIAL STATEMENT..................................................................................................................................... 1 16.1 Audit Opinion ............................................................................................................................... 1 16.2 Statement of Receipts and Expenditure ..................................................................................... 1 16.3 Appropriation Statement ............................................................................................................. 2 16.4 Trust Fund Account Statement of Receipts and Payments ........................................................ 3 PART A: FINANCIAL STATEMENT 16.1 Audit Opinion The audit of the 2016 accounts of the Department of Information and Communication resulted in an unqualified audit opinion.
16.2 Statement of Receipts and Expenditure The Department of Information and Communication recorded revenue totalling $8,728 and incurred expenditure totalling $1,771,227 for the seven months period ended 31 July 2016.
Table 16.1: Statement of Receipts and Expenditure for 2016 Description RECEIPTS State Revenue Revenue from Production of Film 31 July 2016 ($) 31 December 2015 ($) 606 1,844 Department of Information and Communication Section 16: Page 1 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017_____________________________ Description Licence Telecom and TV Other State Revenue Total State Revenue Agency Revenue Miscellaneous Total Agency Revenue TOTAL REVENUE EXPENDITURE Operating Expenditure Established Staff Government Wage Earners Travel & Communication Maintenance & Operations Purchase of Goods & Services Operating Grants & Transfers Special Expenditure Total Operating Expenditure Capital Expenditure Capital Construction Capital Purchases Capital Grants and Transfers Total Capital Expenditure 31 July 2016 ($) 31 December 2015 ($) 42 - 648 8,080 8,080 8,728 632,650 78,164 114,302 57,463 395,590 283,150 150,665 1,711,984 - - - - 990 - 2,834 - - 2,834 1,192,628 138,256 193,740 127,079 541,718 1,179,139 77,659 3,450,219 - - - - Value Added Tax 59,243 139,214 TOTAL EXPENDITURE 1,771,227 3,589,433 The financial year end for Government was changed from 31 December to 31 July in accordance with the Financial Management (Amendment) Act 2016.
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 overall revenue of the Ministry increased by $5,894 due to increase in miscellaneous revenue due to refund of airfare from Asia Pacific Telecommunity for a 2015 training held in Japan.
16.3 Appropriation Statement The Department incurred expenditures totalling $1,771,227 in 2016 against a revised budget of $7,710,545 resulting in a budget savings of $5,939,318 or 77%.

The large savings was due to the budget being for the whole of 2016 while expenditures were only for seven months up to 31 July 2016.

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 – JUNE 2017_____________________________ Table 16.2: Appropriation Statement for 2016 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 ($ 1,652,292 156,613 270,302 203,520 870,072 1,297,598 2,880,000 7,330,397 Changes ($) --- 5,500 --- --- (6,100) 600 --- --- Revised Estimate ($) 1,652,292 162,113 270,302 203,520 863,972 1,298,198 2,880,000 7,330,397 Actual Expenditure ($) 632,650 78,164 114,302 57,463 395,590 283,150 150,665 1,711,984 Lapsed Appropriation ($) 1,019,642 83,949 156,000 146,057 468,382 1,015,048 2,729,335 5,618,413 --- --- --- --- 380,148 7,710,545 --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- 380,148 59,243 320,905 7,710,545 1,771,227 5,939,318 16.4 Trust Fund Account Statement of Receipts and Payments The Department of Communication maintains the Telecommunication Development Trust Fund Account.
The Department of Communication Trust Fund Account recorded a balance of $21,428,144 for the financial period ending 31 July 2016.

Receipts totalling $3,794,026 were collected and while payments totalling $2,253,152 were made resulting in surplus of $1,540,874 for the seven months period ended 31 July 2016.

Details of receipts against payments are provided in Table 16.3.
Table 16.3: Trust Fund Account Statement of Receipts and Payments for 2016 Descriptions RECEIPTS Levy fees from Telecommunication Companies Pay Reimbursement Interest Total Receipts PAYMENTS DTV Expenses Tele-centre Expenses Bank Fees Total Payments 2016 ($) 2015 ($) (Re-stated) 3,781,662 73 12,291 3,794,026 1,881,838 371,221 93 2,253,152 6,080,193 - 20,480 6,100,673 6,257,384 448,021 199 6,705,604 Department of Information and Communication Section 16: Page 3 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017_____________________________ Descriptions 2016 ($) 2015 ($) (Re-stated) Net Surplus/(Deficit) 1,540,874 (604,931) Balance as at 1 January 19,887,270 20,492,201 Balance as at 31 July 21,428,144 19,887,270 Department of Information and Communication Section 16: Page 4 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 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 A: FINANCIAL STATEMENT 16A.1 Audit Opinion The audit of the 2016 accounts of the Department of Information Technology and Computing Services resulted in the issue of an unqualified audit opinion.
16A.2 Statement of Receipts and Expenditure The Department recorded revenue totalling $21,851 and incurred expenditure totalling $6,721,644 for the seven months period ended 31 July 2016.

Details are provided in Table 16A.1 below.
Table 16A.1: Statement of Receipts and Expenditure for 2016 Description RECEIPTS State Revenue Commission Total State Revenue Agency Revenue Miscellaneous Revenue 31 July 2016 ($) 31 December 2015 ($) 130 130 77 77 21,721 21,483 Department of Information Technology and Computing Services Section 16A: Page 1 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ____________________________ Description Total Agency Revenue TOTAL REVENUE EXPENDITURE Operating Expenditure Established Staff Government Wage Earners Travel & Communications Maintenance & Operations Purchase of Goods & Services Special Expenditure Total Operating Expenditure Capital Expenditure Capital Construction Capital Purchases Capital Grants & Transfers Total Capital Expenditure Value Added Tax TOTAL EXPENDITURE 31 July 2016 ($) 31 December 2015 ($) 21,721 21,851 21,483 21,560 915,699 19,639 836,909 884,631 2,213,462 1,314,153 6,184,493 - 18,072 - 18,072 519,079 6,721,644 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 1,635,844 13,459,771 The financial year end for Government was changed from 31 December to 31 July in accordance with the Financial Management (Amendment) Act 2016.
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.

16A.3 Appropriation Statement The Department of Information Technology and Computing Services incurred expenditure totalling $6,721,644 in 2016 against a revised budget of $18,702,728 resulting in savings of $11,981,084 or 64%.
The large savings was due to the budget being for the whole of 2016 while expenditures were only for seven months up to 31 July 2016.

Details of expenditure against the revised budget are provided in Table 16A.2.
Table 16A.2: Appropriation Statement for 2016 SEG Item Established Staff Unestablished staff Travel & Communications Maintenance & Operations Purchase of Goods & Services Special Expenditure Total Operating Cost Capital Expenditure Capital Construction Capital Purchase Budget Estimate ($) 3,219,765 32,172 1,614,392 2,186,000 4,304,760 2,000,000 13,357,089 Changes ($) (3000) 3,000 - - - - - Revised Estimate ($) 3,216,765 35,172 1,614,392 2,186,000 4,304,760 2,000,000 13,357,089 Actual Expenditure ($) 915,699 19,639 836,909 884,631 2,213,462 1,314,153 6,184,493 Lapsed Appropriation ($) 2,301,066 15,533 777,483 1,301,369 2,091,298 685,847 7,172,596 50,000 3,744,639 - - 50,000 3,744,639 - 18,072 50,000 3,726,567 Department of Information Technology and Computing Services Section 16A: Page 2 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ____________________________ SEG Item 10 13 Capital Grants & Transfers Total Capital Expenditure Value Added Tax TOTAL EXPENDITURE Budget Estimate ($) 300,000 4,094,639 1,251,000 18,702,728 Changes ($) - - - - Revised Estimate ($) 300,000 4,094,639 1,251,000 18,702,728 Actual Expenditure ($) - 18,072 519,079 6,721,644 Lapsed Appropriation ($) 300,000 4,076,567 731,921 11,981,084 16A.4 Statement of Losses The Department did not report any loss of money or assets during the financial period ending 31 July 2016.
However, items worth FJ$252,373 & US$203,032 were written off and boarded in 2016 following a board of survey.

Department of Information Technology and Computing Services Section 16A: Page 3 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ____________________________ Section 17 Ministry of Civil Service Roles and Responsibilities Articles (125) and (126) of the Constitution outline a devolved system of governance and authority provided to the Permanent Secretaries of Government.
The Ministry of Civil Service has been created to oversee and implement necessary central guidelines in line with the Government’s view of Civil Sector Reform which was undertaken to produce a more accountable, effective and professional Civil Service with the ultimate aim of providing quality service to the public.
The Ministry comprises of three main divisions: the Policy Division, responsible for the assessment of overarching government policies to ensure consistency and fairness within the Civil Sector’s Human Resource policies; the Central Training Division, to coordinate central training programs that are necessary to facilitate the up-skilling of civil servants; and the Corporate Service Division, to administer the day-to-day activities of the Ministry.

The Ministry has been allocated $5.8 million.
Table of Contents PART A: FINANCIAL STATEMENT ................................................................................................................................. 1 17.1 Audit Opinion ............................................................................................................................... 1 17.2 Statement of Receipts and Expenditure ..................................................................................... 1 17.3 Appropriation Statement ............................................................................................................. 2 PART B: AUDIT FINDINGS ............................................................................................................................................... 3 17.4 Challenges for establishing Ministry of Civil Service .................................................................. 3 17.4.1 Management of Fixed Assets ................................................................................................... 3 Lack of documentary records for inherited account balances.............................................. 4 17.4.2 Anomalies in Operating Trust Account .................................................................................... 5 17.4.3 Anomalies in maintenance of Payroll accounts ...................................................................... 7 17.4.4 PART A: FINANCIAL STATEMENT 17.1 Audit Opinion The audit of the 2016 accounts of the Ministry of Civil Service resulted in the issue of a qualified audit report.
The qualification was that the Ministry of Civil Service under Budget Head 17 recorded Miscellaneous Revenue of $1,002,443 for the period ended 31 July 2016.

This could not be verified as the Ministry was not able to provide appropriate audit evidence to support the balances.

17.2 Statement of Receipts and Expenditure The Ministry of Civil Service under its Head 17 recorded revenue totalling $1,002,443 and incurred expenditure totalling $1,968,218 for the seven months period ended 31 July 2016.
Refer to Table 17.1 for details.
Table 17.1: Statement of Receipts and Expenditures for 2016 Ministry of Civil Service Section 17: Page 1 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ____________________________ Description RECEIPTS Agency Revenue TOTAL REVENUE EXPENDITURES Operating Expenditure Established Staff Government Wage Earners Travel & Communications Maintenance & Operations Purchase of Goods & Services Operating Grants & Transfers Special Expenditures Total Operating Expenditure Value Added Tax TOTAL EXPENDITURE 2016 ($) 1,002,443 1,002,443 1,221,347 57,617 86,150 80,692 13,049 475,863 --- 1,934,718 33,500 1,968,218 The Ministry of Civil Service was established in 2016 under the civil service reforms to replace the former Public Service Commission.
The Ministry’s mandate is substantively different from the former PSC and its budgetary funding was not assessed in line with the former PSC as the programmes and outputs are not the same.

Thus the Ministry of Civil Service is considered as a new entity.

The financial year end for Government was changed from 31 December to 31 July in accordance with the Financial Management (Amendment) Act 2016.
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.

17.3 Appropriation Statement The Ministry of Civil Service incurred expenditure totalling $1,968,218 in 2016 against the budget of $5,810,200 resulting in a savings of $3,841,982 or 66%.
The large savings was due to the budget being for the whole of 2016 while expenditures were only for seven months up to 31 July 2016.

Details of expenditures against the budget estimates are provided in Table 17.2.
Table 17.2: Appropriation Statement for 2016 SEG Item Established Staff Government Wage Earners Travel & Communication Maintenance & Operations Purchase of Goods & Services Operating Grants & Transfers Total Operating Expenditure Budget Estimate ($) 3,506,460 226,189 161,250 221,300 420,755 1,201,900 5,737,854 13 Value Added Tax 72,346 TOTAL EXPENDITURE 5,810,200 Changes ($) ---- ---- ---- ---- ---- ---- ---- --- --- Revised Estimate ($) 3,506,460 226,189 161,250 221,300 420,755 1,201,900 5,737,854 Actual Expenditure ($) 1,221,347 57,617 86,150 80,692 13,049 475,863 1,934,718 Lapsed Appropriation ($) 2,285,113 168,572 75,100 140,608 407,706 726,037 3,803,136 72,346 33,500 38,846 5,810,200 1,968,218 3,841,982 Ministry of Civil Service Section 17: Page 2 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ____________________________ PART B: AUDIT FINDINGS 17.4 Challenges for establishing Ministry of Civil Service The Ministry of Civil Service was created with effect from 1 January 2016 to oversee and implement necessary central guidelines in line with the Government’s view of Civil Sector (Service) Reform which was undertaken to produce a more accountable, effective and professional Civil Service with the ultimate aim of providing quality service to the public.1 The audit noted that a proper handing over of the records, financial accounts and assets from the de- established Public Service Commission was not done to the newly created Ministry of Civil Service or to other relevant ministries.
17.4.1 Management of Fixed Assets Physical assets provide a vital resource base that supports the delivery of outputs by the agency.

Therefore it is important to ensure that:    assets are safeguarded and properly maintained; assets are used for official purposes only; all assets held by the agency are used efficiently.2 The accounts officer shall be responsible for maintaining the fixed assets register.

The fixed assets register shall provide the following details: i. ii.

iii.

iv.
iii.

iv.

v. date of acquisition (including if asset was acquired by transfer, gift or second-hand) and cost; description; serial number and model; location; other relevant information (e.g.
if asset is sold or written off).3 The accounts officer must ensure that the fixed assets register is kept updated.4 The audit noted that although most of the fixed assets used by the Ministry were from the former Public Service Commission (PSC), there was no evidence to indicate that that these were properly handed over.

A Fixed Assets Register was also not maintained to record the assets that were taken over by the Ministry.
In the absence of proper records being maintained, it was not possible to determine that all assets belonging to the former Public Service Commission were properly accounted.

Recommendations  The Ministry should record al assets held in a Fixed Assets Register which should be maintained up-to-date.
; and 1 2016 Budget Statement 2 Pro – Forma Finance Manual 2011 – Part 11 3 Pro – Forma Finance Manual 2011 – Section 11.2.1 4 Pro – Forma Finance Manual 2011 – Section 11.2.2 Ministry of Civil Service Section 17: Page 3 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ____________________________  The Ministry should formally notify Ministry of Economy on the lack of handing over and accountability of assets previously administered by the PSC so that improvements can be made going forward.
Ministry’s Comments When the PSC was decommissioned at the end of 2015, many of its responsibilities moved to other ministries, yet the Ministry of Civil Service continues to be held responsible for the accounts of the former PSC.
This reflects no account reconciliations upon closure at the end of 2015, no effective handover of balances or accounts to ministries taking on the former PSC responsibilities under the machinery of government change and no new accounts created for the new Ministry of Civil Service.

While the Ministry of Civil Service commenced from 1 Jan 2016, its permanent secretary and staff appointments began around May 2016.
This left a gap between the disestablishment of the PSC and the establishment of the new Ministry, which has resulted in most of these audit findings.

No asset registers were handed over to the Ministry of Civil Service from the former PSC, nor were all assets of the former PSC handed over to the Ministry, as it was moved from the former PSC premises with many of the assets remaining behind.
While the permanent secretary initiated a stock count and board of survey to identify which assets had been handed over, the stock on hand could not be verified back to the former PSC asset registers.

The Ministry of Civil Service is constructing a fixed asset register based on the assets identified as handed over from the former PSC and any new asset procurements.
While there have been informal discussions on this matter with the Ministry of Economy, this Ministry will now formally advise the Ministry of Economy of the lack of proper handover of the asset register, assets and other PSC records, as per the recommendation.

The Ministry will also provide feedback to the Ministry of Economy on the lessons learned from the disestablishment of the PSC.
17.4.2 Lack of documentary records for inherited account balances The Accounting Head is responsible for the safekeeping and proper maintenance of all accounting records or documents.5 The revenue collector shall maintain a cashbook in which he/she shall enter on a daily basis the following details: i. ii.

iii.
iii.

date of receiving cash or cheques and name of payer; receipt number and amount received; revenue account code.6 The revenue collector must total the cashbook at the end of the day and give it to the accounts supervisor for checking.
The accounts supervisor must sign the cashbook after checking the details in the cashbook against the issued receipts, money on hand and bank lodgement forms.7 After reconciling details in the cashbooks, the accounts supervisor shall submit the cashbooks, duplicate receipts and lodgement forms to the data entry clerk for posting into the General Ledger.8 5 Pro – Forma Finance Manual 2011 – Section 18.1.3 6 Pro – Forma Finance Manual 2011 – Section 5.5.1 7 Pro – Forma Finance Manual 2011 – Section 5.5.2 8 Pro – Forma Finance Manual 2011 – Section 5.5.3 Ministry of Civil Service Section 17: Page 4 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ____________________________ The Ministry’s general ledger recorded an amount of $1,002,442.54 as revenue under Operating Revenue – Other Revenue & Surplus (SRG 27) for the period ended 31 July 2016 and PSC Scholarship Lending Fund (SAG 61) accounts balance of $1,463,143.
The audit noted the PSC Scholarship Lending Fund (SAG 61) balance decreased by $346,402.34 for the period ended 31 July 2016.

However, supporting documents were not maintained at the Ministry to support the operating revenue amounting to $1,002,442.54 and the reduction in PSC Scholarship Lending Fund account balance by $346,402.34.

Refer to Table 17.3 for details.

Table 17.3: Details of Unsubstantiated Balances Account No.
Account Description PSC Scholarship Lending Fund 1-17301-02999-611116 1-17201-64101-279999 Miscellaneous Revenue 1-17301-02999-279999 Miscellaneous Revenue Total Amount ($) 346,402.34 749,269.87 253,172.67 1,348,844.88 As a result, the audit was not able to ascertain the accuracy and validity of the above stated balances for the period ending 31 July 2016.
Recommendation The Ministry should ensure that all accounting records are safeguarded and properly maintained to ensure that all the Ministry’s account balances are sufficiently supported.

Ministry’s Comments Please refer to previous comments under 8.1.1.

These balances relate to responsibilities that transferred from the PSC to the Ministry of Economy, not the Ministry of Civil Service, however there was never an effective reconciliation or transfer of accounts.
17.4.3 Anomalies in Operating Trust Account Trust money is money that the agency is holding in trust (it does not include creditor payments such as salary deductions or money that is held in a separate “trust fund” which is not a true trust).
As stipulated in the Act and Finance Instructions, trust money is to be kept in a separate bank account and accounted for separately from “public money” and “other money”.9 Within 5 days after the end of each month, the trust officer shall prepare a trust reconciliation to reconcile trust account balances to the ledger total and the trust bank account.

Details of balances must be attached to the reconciliation statement.
The trust officer shall certify and date the reconciliation statement after ensuring that all balances in the statement are verified to supporting documents.

The trust officer must submit the trust reconciliation to the Accounting Head within 10 days after the end of the month.

10 The audit noted the following anomalies in the operation of the Operating Trust Fund Account.
9 Pro – forma Finance Manual – Part 15 – Paragraph 1 10 Pro – forma Finance Manual - Section 15.4.1 – 15.4.4 Ministry of Civil Service Section 17: Page 5 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ____________________________  The balance in the account was $667,660.28 as at 31 July 2016.

Majority of the balance was made up of transactions made by the former Public Service Commission in 2015 which was not regularized.

Refer to Table 17.4 below for details.


Table 17.4: Details of Accounts with a Significant Balances carried forward to 2016 Account No.
Description 1-17305-02999-861701 1-17301-02999-861901 1-17351-02999-861929 1-17301-02999-861309 1-17301-02999-861923 1-17101-02999-899988 1-17301-02999-861106 Deduction for Rent of Government Quarters PD Tax Arrears/PAYE Payroll Deduction PSC Bond Quarters 388 PD PSC Scholarship Loan Payroll Deduction Agriculture Miscellaneous Fund v Open 390 PD Government Water Rates Charges Amount ($) 428,940.66 80,941.64 84,071.07 12,499.24 4,491.89 2,804.63 1,340.00 615,089.13   The Payroll Deduction PSC Bond Quarters account balance as at 31 July 2016 amounted to $85,911.78 which was not transferred to TMA Liabilities account when the administration of quarters was transferred to Ministry of Economy with effect from 1 January 2016.
The Ministry’s Operating Trust Fund account has 108 sub accounts out of which 75 sub accounts are inactive.

These accounts were inherited from the former PSC.

 A variance of $42,920.99 existed between the Ministry’s reconciliation and the general ledger as at 31 July 2016.

Refer to Table 17.5 below for details.


Table 17.5: Variance between the Ministry’s Reconciliation and the General Ledger Reconciliation As at 31/07/16 ($) General Ledger (FMIS) As at 31/07/16 ($) 624,739.29 667,660.28 Variance ($) 42,920.99 The above findings are a result of proper planning and handing over not done when the former Public Service Commission was de-established.
Recommendations The Ministry should ensure that:  monthly reconciliations are carried out which are checked by immediate supervisors.

Any variances noted should be investigate and rectified; and  the Ministry should liaise with Ministry of Economy to regularize carried forward balances and close off inactive accounts.

Ministry’s Comments Reconciliations are now carried out on a timely basis.
The Ministry is liaising with the Ministry of Economy on closing inactive accounts and handing over these balances as they do not relate to MCS responsibilities.
Ministry of Civil Service Section 17: Page 6 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ____________________________ 17.4.4 Anomalies in maintenance of Payroll accounts 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.11 The audit of the payroll of the Ministry revealed the following anomalies:  salaries and wages monthly reconciliation for the financial period ending 31 July 2016 were not prepared on a timely manner,  payment vouchers/records for manual payments amounting to $177,824 for salaries, advertisement and leave compensation were not provided for audit verification.
 Operating expenditure amounting $131,505 was posted to Established Staff expenditure allocation (SEG 1).

In addition, it was noted the payment vouchers were not stamped “PAID” after payment had been made.

Refer to Table 17.6 for details.


Table 17.6: Details of Payments incorrectly posted to the Established Staff Allocation Date 19/05/16 08/04/16 08/04/16 08/03/16 26/02/16 30/06/16 02/06/16 10/05/16 10/05/16 14/03/16 17/03/16 11/05/16 19/04/16 11/05/16 11/04/16 12/05/16 12/05/16 17/03/16 17/03/16 31/03/16 11/04/16 17/03/16 10/05/16 22/03/16 Total Cheque No.
38024 4222 4187 4158 5977 4298 4276 4242 4241 4163 4182 4247 38100 4248 4232 4251 4250 4177 4185 4217 4231 4186 4156 4197 Payee Description JS JS JW JW PB NH BW EP AB FC AS C1 C2 C3 C4 C5 C6 C7 C7 C8 C9 C10 C11 C12 Refund to JS and 1 day per diem allowance.
Payment of hotel accommodation Reimbursement of travelling expenses Reimbursement Reimbursement of travelling expenses PSC board member allowance Reimbursement of travelling expenses Reimbursement for shipment of personal effects Reimbursement for shipment of personal effects Lease agreement Reimbursement of recharge cards School fees Re - payment of PS cocktail at the museum PS’s retreat PS’s cocktail invitation cards Hotel accommodation Hotel Accommodation Hotel Accommodation Hotel Accommodation PS’s cocktail PS’s cocktail Catering Service for PS’s Interviews Hotel accommodation Dog post quarantine Amount ($) 12,211 4,017 12,978 808 4,444 6,250 5,864 3,906 3,304 5,000 25 6,928 3,837 39,440 165 2,786 3,120 4,905 4,905 3,183 1,580 410 526 913 131,505 Posting of operating expenditure in to SEG 01 Payroll allocation has resulted in the operating expenditure being understated which payroll expenses have been overstated.
The authenticity of unsupported expenditures could not be determined.
11 Finance Instructions 2010 – Section 17 (7) Ministry of Civil Service Section 17: Page 7 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ____________________________ Recommendations The Ministry should:    ensure that payroll reconciliations are prepared in a timely manner; ensure that payment vouchers and supporting documents are properly kept and maintained; ensure that operating/non-payroll expenditures are not posted to SEGs 1 and 2 in the general ledger and misallocations are adjusted in a timely manner; and  ensure all payment vouchers are stamped “PAID” immediately after the payment.
Ministry’s Comments The recommendations are agreed.

These processes are now in place.

Ministry of Civil Service Section 17: Page 8 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017______________________________________ Section 18 Ministry of Rural and Maritime Development and National Disaster Management Role and Responsibilities The Ministry of Rural and Maritime Development and National 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.

This includes self-help programs and work on non-cane access roads, maritime roads and housing assistance.
The Ministry runs the Committee for the Better Utilization of Land 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, marriages, issuing licences and collecting licence and permit fees.
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.

Correspondingly, the Ministry implements climate change mitigation programmes.
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 Double Posting of Revenue .................................................................................................................................... 4 18.5 Incomplete Board of Survey ..................................................................................................................................... 5 18.6 Unauthorised Journal Vouchers .............................................................................................................................. 6 18.7 Revolving Fund Account not properly maintained ................................................................................................... 6 18.8 Procurement Procedures not followed .................................................................................................................... 8 18.9 18.10 Non Compliance with Standard Operating Procedures for Non – Cane Access Roads ........................................ 10 18.11 Non Compliance with Standard Operating Procedures for Self Help
 Projects ....................................................... 12 18.12 Significant Arrears of Revenue .............................................................................................................................. 15 18.13 Drawings Account Not Properly Maintained ........................................................................................................... 17 18.14 Governance Issues ................................................................................................................................................ 19 SPECIAL AUDIT FOR TROPICAL CYCLONE WINSTON ...................................................................................................... 21 18.15 NORTHERN DIVISION .......................................................................................................................................... 21 18.16 EASTERN DIVISION ............................................................................................................................................. 30 18.17 CENTRAL DIVISION .............................................................................................................................................. 33 _____________________________________________________________________________________________ Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 1 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017______________________________________ 18.18 WESTERN DIVISION ............................................................................................................................................ 34 Appendix 18.1: Trust Fund Account – Provincial Development and Prime Ministers Disaster Relief Rehabilitation .......... 44 Appendix 18.2: Examples of Journal Vouchers Not Approved ........................................................................................... 45 Appendix 18.3: Anomalies in the Procurement
 of Goods & Services ................................................................................. 47 Appendix 18.4: Projects with Anomalies under the Self Help Programme in the Central Division ..................................... 50 Appendix 18.5: Reconciliation of Orders and Invoices for Food Ration Procurements - Commissioner Eastern Division .
52 Appendix 18.6: Invoice Different from Purchase Order ...................................................................................................... 56 Appendix18.7: Examples of Purchases Made Without Appropriate Supporting Documents .............................................. 58 ___________________________________________________________________________________________________ PART A: FINANCIAL STATEMENTS 18.1 Audit Opinion The audit of the 2016 accounts of the Ministry of Rural and Maritime Development and National Disaster Management resulted in the issue of an unqualified audit opinion.
18.2 Statement of Receipts and Expenditure The Ministry recorded revenue totalling $794,739 and incurred expenditure totalling $31,403,894 for the seven months period ended 31 July 2016.

Refer to Table 18.1 for details.
Table 18.1: Statement of Receipts and Expenditures for 2016 Description RECEIPTS State Revenue License Arms License Liquor License Trading Other State Revenue Total State Revenue Agency Revenue Miscellaneous TOTAL REVENUE EXPENDITURES Operating Expenditure Established staff Unestablished staff Travel & communication Maintenance & Operations Purchase of goods & services Operating grants & transfers Special expenditures Total Operating Expenditure Capital Expenditures Capital Construction Capital Purchases Capital Grants & Transfers 2016 ($) 2015 ($) --- _____________________________________________________________________________________________ Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 2 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017______________________________________ Description Total Capital Expenditure Value Added Tax TOTAL EXPENDITURES 2016 ($) 7,660,824 1,858,671 31,403,894 2015 ($) 17,441,877 969,320 29,926,149 The financial year end for Government was changed from 31 December to 31 July in accordance with the Financial Management (Amendment) Act 2016.
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 increase in expenditure by $1,477,745 or 5% in 2016 compared to 2015 was mainly due to increase in Special Expenditure which increased by $12.2m or 539% as a result of expenditure relating to Tropical Cyclone Winston.
18.3 Appropriation Statement The Ministry incurred expenditure totalling $31,403,894 against the revised budget of $36,905,498 resulting in a savings of $5,501,604 or 15%.

The large savings was due to the budget being for the whole of 2016 while expenditures were only for seven months up to July 2016.

Details of expenditures against the budget estimates are provided in Table 18.2.
Table 18.2: Appropriation Statement for 2016 SEG Item Budget Estimate ($) Changes ($) Revised Estimate ($) Established Staff Government Wage Earners Travel & Communication Maintenance & Operations Purchase of Goods & Services Operating Grants & Transfers Special Expenditure Total Operating Costs 5,418,201 1,522,827 422,160 944,800 896,910 683,504 1,170,460 11,058,862 (79,842) --- 39,527 74,696 (46,233) --- 15,417,069 15,405,217 5,338,359 1,522,827 461,687 1,019,496 850,677 683,504 16,587,529 26,464,079 Actual Expenditur e ($) 3,845,814 1,297,563 391,995 871,284 729,762 307,089 14,440,892 21,884,399 Capital Expenditure Capital Construction Capital Purchases Capital Grants & Transfers Total Capital Expenditure 4,690,000 200,000 20,207,436 25,097,436 (3,871,351) --- (12,920,340) (16,791,691) 818,649 200,000 7,287,096 8,305,745 795,898 192,740 6,672,186 7,660,824 13 Value Added Tax 749,200 1,386,474 2,135,674 1,858,671 TOTAL EXPENDITURE 36,905,498 --- 36,905,498 31,403,894 Carry Over ($) --- --- --- --- --- --- --- --- --- --- --- --- --- --- Lapsed Appropriati on ($) 1,492,545 225,264 69,692 148,212 120,915 376,415 2,146,637 4,579,680 22,751 7,260 614,910 644,921 277,003 5,501,604 _____________________________________________________________________________________________ Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 3 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017______________________________________ 18.4 Trust Fund Account Statement of Receipts and Payments The Ministry received a sum of $11,215,631 from public as contribution for various projects and donations for the Disaster Relief Rehabilitation.
The Ministry utilized a total of $12,833,163 for various projects and for Disaster Relief operation.

Refer to Appendix 18.1 for details.
PART B: AUDIT FINDINGS 18.5 Double Posting of Revenue Within 3 days of receiving the monthly general ledger reports from the Ministry of Finance, the Accounts Officers shall reconcile the ledger balances to the general ledger reports and prepare a ledger reconciliation statement.1 Any errors or misallocations must be immediately adjusted by way of journal vouchers.2 The audit noted that the Ministry posted the revenue tolling $32,254 twice in the general ledger by erroneously creating a journal voucher twice.
Refer to Table 18.3 for details.

Table 18.3: Journal Voucher for Double Posting of Revenue JV No.

Account Description Amount BLC 248/7/16 BLC 298/7/16 BLC 294/7/16 BLC 295/7/16 CND BLC 2016 CND BLC 2016 HQ BLC 2016 HQ BLC 2016 ($) 1,266 1,266 30,988 30,988 As a result, revenue is overstated by $32,254 in the general ledger.

The audit finding indicates that the Accounts Officer did not reconcile the ledger balances to the general ledger report.
As such, the double posting was not identified and corrected in a timely manner.

Recommendation The Ministry should ensure that the ledger balances are reconciled to the general ledger reports in a timely manner and errors or misallocations are adjusted accordingly.

Management Comments The Audit comments are duly noted.
1 Ministry of Rural and Maritime Development and Disaster Management, Finance Manual 2013, Section 14.1.1 2 Ministry of Rural and Maritime Development and Disaster Management, Finance Manual 2013, Section 14.1.2 _____________________________________________________________________________________________ Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 4 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017______________________________________ 18.6 Incomplete Board of Survey All Permanent Secretaries shall appoint a Board of Survey annually to determine whether government plant, equipment and inventories under his or her control are in working condition or serviceable; unserviceable or obsolete; or surplus to the requirements of that agency.3 The Chairperson of the Board of Survey shall not be an officer of that Ministry or Department.4 Annual boards of survey must be conducted by 3 officers who are independent of the officer responsible for the custody of the assets.
A written record must be kept of each board of survey and must be signed and dated by the officers undertaking it.5 The audit noted that the Ministry did not conduct the Board of Survey for Commissioner Eastern Division while the Board of Survey was completed for other Divisions as at 31/07/16.

No board of survey was carried out by the Ministry in 2015.
In addition, the audit noted that the Board of Survey team appointed to carry out the survey for other Divisions (Western, Northern and Western) included the Procurement Officer and the Assets Management Officer from headquarters both of whom were directly responsible for asset management.

Similarly, contrary to section 24(3) of the Procurement Regulations 2010, the Chairperson of the Board of Survey team was a staff from Corporate Department.
Similar audit concerns have been raised in previous years which demonstrate the inability of the Ministry’s staff to follow procedures and the ineffective supervisory checks over the control and safeguard of fixed assets.

Ineffective controls on the management of fixed assets increases the risk of theft and misuse of fixed assets belonging to the Ministry.
Recommendation The Ministry should ensure that the Board of Survey for all Divisions are carried out annually in accordance with Section 49 of the Finance Instruction and Section 24 of the Procurement Regulations 2010.

Management Comments  The Ministry has noted the Audit comments and conducted BOS for CED Office in 2017 and submit to MoE on 3/5/17;and  The Ministry has taken into account Audit comments on the appointment of BOS members.
3 Procurement Regulations 2010 - Clause 24 (1) 4 Procurement Regulations 2010 - Clause 24 (3) 5 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 – JUNE 2017______________________________________ 18.7 Unauthorised Journal Vouchers Only the Manager Finance or Accounts Officer shall approve journal adjustments.6 Once the journal voucher has been approved, it shall be posted into the appropriate ledger and the general ledger system.7 The audit noted that several journal vouchers were posted in the general ledger (FMIS) without the approval of Manager Finance or Accounts Officer.
Examples are provided in Appendix 18.2.

The audit findings indicate lack of monitoring by the Manager Finance or Accounts Officer on the processing of journal vouchers.

Hence there is a high risk of fraudulent or incorrect journal entries passed and processed into the general ledger.

Recommendation The Manager Finance must ensure that only approved journal vouchers are posted into the general ledger.
Management Comments  The Ministry has noted the Audit comments and will ensure that all JV’s are approved by MF.

 Job rotation has also been carried out within the Accounts Dept.

and identified JV’s have been updated onto the JV register.
18.8 Revolving Fund Account not properly maintained A travelling officer shall recoup the travel advance within seven days of completing travel by submission of an acquittal report with supporting documents.8 If an advance has not been fully expended, the travelling officer must repay the balance within seven days of completing travel.9 Where an advance has not been acquitted within seven days of travel, the Manager Finance shall effect recovery through a salary deduction from the concerned officer's salary within six fortnights.10 Interest on all advance will accrue at the rate set by the Ministry of Economy from time to time.
The current rate is 12% per annum.11 Upon clearance of the advance, the Accounts Clerk shall update the debtors register, offset the advance account and debit the appropriate expenditure account.12 Audit review of Revolving Fund Account revealed the following anomalies:  The outstanding accountable advance balances are not subsequently cleared on a timely basis.

The outstanding balance as at 31/7/16 was $62,516, which was yet to be cleared as at the date13 of audit.
However, the Manager Finance did not initiate recovery through salary deduction from the concerned 6 Ministry of Rural and Maritime Development and Disaster Management, Finance Manual 2013, Section 14.1.2 7 Ministry of Rural and Maritime Development and Disaster Management, Finance Manual 2013, Section 14.1.5 8 Ministry of Rural and Maritime Development and Disaster Management, Finance Manual 2013, Section 8.1.11 9 Ministry of Rural and Maritime Development and Disaster Management, Finance Manual 2013, Section 8.1.12 10 Ministry of Rural and Maritime Development and Disaster Management, Finance Manual 2013, Section 8.1.14 11 Ministry of Rural and Maritime Development and Disaster Management, Finance Manual 2013, Section 8.1.15 12 Ministry of Rural and Maritime Development and Disaster Management, Finance Manual 2013, Section 8.1.16 13 31/12/16 _____________________________________________________________________________________________ Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 6 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017______________________________________ officer's even though the advances were not retired within seven days.
Refer to the Table 18.4 for details.
Table 18.4: Outstanding Accountable Advance as at 31/07/2016 Particulars Outstanding balance from 2015 Outstanding balance from January 2016 Outstanding balance from February 2016 Outstanding balance from March 2016 Outstanding balance from April 2016 Outstanding balance from May 2016 Outstanding balance from June 2016 Outstanding balance from July 2016 Total outstanding balance Amount ($) 23,837 1,189 325 15,056 2,439 506 15,281 3,883 62,516  The Accountable Advance Register was not updated during the year.
 The retirement of accountable advance through JV 51/6/16 and JV 52/6/16 could not be substantiated due to lack of supporting documents.

Refer to Table 18.5 for details.

Table 18.5: Journal Vouchers Raised Without Adequate Supporting Documents JV No.
Account Description Account Allocation Debit ($) Credit ($) 51/06/16 Boards & Committees 1-18101-68999-050801 19,553 1-18101-68999-030101 11,369 1-18101-68999-570301 52/06/16 Administrative Expense 1-18101-68999-070201 1-18101-68999-570301 Travel Advance Account Advance Account 8,734 30,922 8,734  Accountable advance reconciliations were not prepared in a timely manner.

Refer to Table 18.6 for details.


Table 18.6: Monthly Reconciliation Dates Month January February March April May June July Date Reconciliation Prepared 8/6/16 9/6/16 9/6/16 10/6/16 28/6/16 18/7/16 12/10/16  The payment of $13,913 to Company A. for the purchase of dry rations was facilitated through Revolving Fund Account.
Discussion with the officer concerned revealed that it was a misallocation, _____________________________________________________________________________________________ Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 7 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017______________________________________ which was to be journalised to SEG 7.

However, as at the date14 of audit, the amount was yet to be journalised.
Failure to subsequently clear the Revolving Fund Account balances could result in understatement of expenditure and the risk of losses is high when recoveries are not made.

In addition, there is a high risk of errors and omissions not being detected if monthly reconciliations are not prepared on time.

The clearance of accountable advance without supporting documentation is a serious issue which the Ministry should not entertain as it can result in misappropriation of funds.
Recommendations The Ministry should ensure that:    officers retire their accountable advances within seven days from return from trip and recoveries are made from salaries for those that do not retire on time; the Accountable Advance register is kept up to date; investigation is carried out on all accountable advances that were retired without supporting documents; and  monthly reconciliations are prepared in a timely manner.

Management Comments  The Ministry has noted the Audit comments.
 The Ministry has put in place stringent measures to recover outstanding arrears and retirement from officers concerned with 12% interest.

 A statement reminding the officers taking accountable advance is now issued once payment is received by the  officer.

Statement highlights to the officer the relevant standing policies relating to retirement of accountable advances and consequences of non-compliance to standing policies.
18.9 Procurement Procedures not followed The Manager Finance is responsible for the safekeeping and proper maintenance of all accounting records or documents.15 Manager Finance must make sure the following checks are done before authorising any payment; review vendor invoices for accuracy by comparing charges to purchase order, verify that the goods and services purchased have been received, perform monthly reconciliation of operating ledgers to ensure accuracy and timeliness of expenses, make sure that the expenses accounts used have enough funds and are correct and make sure that invoices are paid in a timely manner.
16 14 31/12/16 15 Ministry of Rural and Maritime Development and Disaster Management, Finance Manual 2013, Section 17.2.1 16 Ministry of Rural and Maritime Development and Disaster Management, Finance Manual 2013, Section 15.2.3 _____________________________________________________________________________________________ Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 8 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017______________________________________ All assets acquired with a cost in excess of $2000, shall be recorded in the assets module of the Financial Management Information System (FMIS) or a fixed assets register for those without FMIS.17 The procurement officer must ensure that the fixed assets register is kept updated.18 The procurement officer shall record items valued at less than $2,000 but more than $200, in an expendable items register.19 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.20 Immediately after payment has been effected, the Manager Finance or Accounts Officer must stamp “paid” on all vouchers and supporting documentation to avoid any double payments.21 In circumstances where it is necessary to make an advance payment for goods received through shipment from overseas, and for contractual agreements if stated as such, approval must be sought from the Chief Accountant (Treasury).22 Audit review of procurement of goods and services noted instances where relevant supporting documents were not attached to payment vouchers as outlined below.
 Competitive quotes not obtained;  Local purchase orders not sighted;  Chief Accountant’s (Treasury) approval not obtained for advance payment;  Assets procured were not recorded in the fixed assets register;  Procurement done from incorrect allocation;  Payment vouchers and the supporting documents not stamped paid; and  Payment vouchers were not certified / authorised by the Manager Finance.

Refer to Appendix 18.3 for details.


The above findings show non-compliance with procurement and accounting regulations that govern the operations of the Ministry hence increasing the risk of loss of public funds through uneconomical purchases and mismanagement of funds.
Recommendations The Ministry must ensure that:    the competitive quotes are obtained for procurements above $1,000 and below $50,000; local purchase orders are issued when procuring any goods, services or works; approval of the Chief Accountant is obtained for advance payments; 17 Ministry of Rural and Maritime Development and Disaster Management, Finance Manual 2013, Section 9.1.3 18 Ministry of Rural and Maritime Development and Disaster Management, Finance Manual 2013, Section 9.2.2 19 Ministry of Rural and Maritime Development and Disaster Management, Finance Manual 2013, Section 9.2.5 20 Procurement Amendments Regulations 2012 – Section 4 (a) 21 Ministry of Rural and Maritime Development and Disaster Management, Finance Manual 2013, Section 2.8.9 22 Finance Instruction 2010, Section 14 (8) _____________________________________________________________________________________________ Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 9 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017______________________________________     payment vouchers are authorised or certified by the Manager Finance; all fixed assets and expandable items purchased are recorded in the Fixed Asset Register; immediately after the payment has been effected, all vouchers and supporting documentation are stamped ‘paid’ to avoid any double payments; and payments are recorded in the correct expenditure accounts.
Management Comments  Procurement internal controls will now be more vigilantly observed and HOD’s have been advised and cautioned accordingly to ensure these issues are addressed at Divisional levels.

 As for HQ, the Director Corporate will be requiring monthly updates which the PS will be regularly briefed on to ensure all officers concerned are continually reminded and ensure strict adherence to standing policies.
 Management is adamant on penalizing non-compliant officers by reflecting this on their performance assessments as they fall due.

HOD’s and Divisional Commissioners have been briefed on this decision.
18.10 Non Compliance with Standard Operating Procedures for Non – Cane Access Roads The project proposal forms are to be received by the Provincial Administrator or District Officers by no later than 30th July every year for the next financial year.23 Provincial Administrators and District Officrs who are to be assisted by Public Works Department or other recognised government agencies to monitor road works and provide a monthly progress report to the Divisional Commissioners.24 Monitoring and evaluation are to be conducted by respective road works management teams at the following four levels: Community; Provincial and District Level; (i) (ii) (iii) Divisional level (Planning and Coordination Cell); and (iv) Headquarters (Research and Development Unit).25 Audit review of Central Division projects for non-cane access roads revealed the following anomalies:  Memorandum of Understanding (MOU) between the Ministry and the contractors did not include liability period, variations, payment structure, project important clauses such as defect commencement and completion dates;  Although standard project proposal forms were filled but it was not endorsed by the Provincial Administrators prior to 30 July; and the monitoring reports were not provided.
 Refer to Table 18.7 for examples.
23 Ministry of Rural and Maritime Development Standard Operating Procedure – Part VI, Section 4.2 24 Ministry of Rural and Maritime Development Standard Operating Procedure – Part VI, Section 8.2 25 Ministry of Rural and Maritime Development Standard Operating Procedure – Part VI, Section 8.1 _____________________________________________________________________________________________ Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 10 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017______________________________________ Table 18.7: Examples of Projects for Non-Cane Access Roads Project Waisere Farm Road Cheque No.
15285 Date 18/07/16 Amount ($) 48,299 The MOU did not include important clause such as defect liability period, variations, payment structure, project commencement and completion dates.

Remarks 15300 20/07/16 The standard project proposal form was filled; however, it was endorsed by the Provincial Administrator on 18/4/16 and not 30/07/15.

No monitoring reports were provided.

Vunalagi Farm Road 2515 01/07/16 45,950 MOU was signed but not dated.
Also, it did not include important clause such as defect liability period, variations, payment structure, project commencement and completion dates.

2582 15/07/16 The standard project proposal form was filled; but was endorsed by the Provincial Administrator on 30/11/15 and not 30/07/15.

No monitoring reports were provided.

Namuamua Farm Road 2445 27/06/16 44,250 MOU was signed but not dated.
Also, it did not include important clause such as defect liability period, variations, payment structure, project commencement and completion dates.

The standard project proposal form was filled; but, it was endorsed by the Provincial Administrator on 30/11/15 and not 30/07/15.

No monitoring reports were provided.


Vuci Road Farm 15271 15/07/16 15301 20/07/16 44,000 The MOU did not include important clause such as defect liability period, variations, payment structure, project commencement and completion dates.

The standard project proposal form was filled; however, it was endorsed by the Provincial Administrator on 13/4/16 and not 30/07/15.

No monitoring reports were provided.


Total (Sample Only) 182,499 The audit findings indicate that government’s interests were not adequately protected in the contracts.

In the absence of important clauses, there is a high risk that the contractors may fail to complete the projects on time and in accordance with the approved scope leading to cost variations.
Recommendations The Ministry should ensure that: _____________________________________________________________________________________________ Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 11 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017______________________________________    the MOU’s include important clauses such as defect liability period, variations, payment structure, project commencement and completion dates which are vetted by the Solicitor General’s Office prior to execution; the project proposal forms are received by the Provincial Administrator or District Officers by no later than 30th July every year for the next financial year; and the Provincial Administrators and District Officers provide monthly progress report to the Divisional Commissioners.
Management Comments  The Audit comments have been noted.

 The Ministry will ensure to follow these recommendations and abide by the relevant rules and regulations.
18.11 Non Compliance with Standard Operating Procedures for Self Help Projects Provincial Administrators/District Officers are to be assisted by the recipient Community Project Management teams to monitor projects on a regular basis and provide progress reports to Divisional Commissioners on a monthly basis.26 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.27 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.28 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).29 Contribution can be in kind in cases where communities, groups and individual do not have the capacity to pay cash contribution.
The monetary value of in kind contribution should be equivalent or more to the one third cash contribution and this be determined by the Divisional Commissioners in consultation with their respective Provincial Administrators.30 The application/project proposal forms are to be received by the Provincial Administrator or District Officers no later than 30th of July every year for the next financial year.31 Audit review of Self Help Projects in the Central Division revealed the following anomalies:  The standard project proposal forms were filled but it was not endorsed by the Provincial Administrators prior to 30 July as stated in the Standard Operating Procedures (SOP); 26 Ministry of Rural, Maritime Development Standard Operating Procedure – Part IV, Section 8.2 27 Ministry of Rural, Maritime Development Standard Operating Procedure – Part IV, Section 7.5 28 Ministry of Rural and Maritime Development Standard Operating Procedure – Part IV, Section 7.4 29 Ministry of Rural and Maritime Development Standard Operating Procedure – Part IV, Section 8.1 30 Ministry of Rural and Maritime Development Standard Operating Procedure – Part IV, Section 2.4 31 Ministry of Rural and Maritime Development Standard Operating Procedure – Part IV, Section 4.2 _____________________________________________________________________________________________ Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 12 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017______________________________________  Monitoring reports were not provided as stated in the SOP;  Completion certificates were not sighted/provided;  One third contribution in kind by the grant recipient could not be substantiated;  Memorandum of Understanding (MOU) was not signed by the Divisional Commissioners and recipient; and  Financial acquittal or assessment reports were not attached to the payment vouchers.
Refer to Appendix 18.4 for examples.

A review of the project monitoring reports for Rewa and Serua Province revealed that out of the sixteen projects visited by the Ministry between 2010 and 2014, seven projects were unsuccessful.

Refer to Table 18.8 for details.
Table 18.8: Example of Failed Projects for Self Help Programme Project Name Year Project Cost ($) Assistance Provided Reasons for failure Serua Province A-Farmers Group 2011 2,556 10,000 Dalo suckers Rewa Province Ploughing Project 2010 3,000 Procurement of 1x14 to aid disc harrow tractor and boost ploughing services B-Farming Project 2010 5,000 Land Preparation Fish Pond 2013 C - Youth Farm 2013 7,274 Construction of fish pond/supply of water pump/ provision of fish feed 11,962 Land Preparation D- Land Preparation 2014 10,000 Land Preparation No consultations were undertaken with the group pre and post implementation; poor project design; suckers were distributed to villagers some of whom were not members of the group.
The new disc harrow was purchased for a second hand tractor; no feasibility study was conducted to ascertain the viability of the project.

Poor project design and monitoring.

This was initially an individual project which was later group oriented after land issues arose.

It was evident that no consultations were held with the community.

Even though consent for the use of the land was obtained, the clan disagreed on the project execution on the land.
Poor project coordination between responsible agencies; lack of monitoring feedback during the implementation stage.

This is a case of poor project design with lack of consultations.

The project site is only covered with cassava and about 10 mounds of yams and overgrown with bushes.

Evidently, the youth group did not live up to the objectives laid out in the project proposal which can also be attributed to lack of monitoring.

No project folder available.


Lack of project monitoring to identify weaknesses and find solutions to address them.

Poor record keeping as there was no folder for this project available at the district office.
_____________________________________________________________________________________________ Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 13 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017______________________________________ Project Name Year E Breeder Project 2012 Project Cost ($) Assistance Provided Reasons for failure 9,018 Maintenance of Piggery Shed and installation of bio- digester Even though project materials were delivered to the project site, as of today there still has been no works undertaken for the full implementation of the project.
Total 48,810 In addition to the above, the audit noted that Central Division failed to maintain a consolidated list of all applications received for projects stating the basis on which selection was been made for projects to be assisted.

As such, the audit could not determine if the selection of the recipients was made in an open and transparent manner.
Failure of projects may have resulted from inadequate technical support during the implementation stage and the lack of monitoring and progress assessments.

As a result, the objectives of the self-help programme, which is to promote and assist rural dwellers in the construction of small infrastructure projects and to provide income generating projects may not have been fully achieved and could result in wastage of public funds.
Recommendations  The Commissioners and the Provincial Administrators should ensure that all completed projects are certified by the respective technical officers after completion;  The Ministry must ensure that where necessary, a Memorandum of Understanding is signed by the Divisional Commissioner and the recipients;  The Ministry must ensure that the project proposal forms are received by the Provincial Administrator or District Officers no later than 30th July every year;  The Ministry must ensure that the Provincial Administrators and District Officers provide monthly progress reports or assessment reports to the Divisional Commissioners;  The Ministry must ensure that the community’s one third contributions is clearly quantified (in-kind/cash) for all self-help projects for which assistance is provided;  The Ministry should ensure that proper feasibility studies on sustainability of projects are carried out before funds are released; and  The Ministry should ensure that records are kept for all self-help project applications received with selection criteria used clearly stated.
_____________________________________________________________________________________________ Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 14 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017______________________________________ Management Comments  The comments are duly noted and the issues highlighted herein will be thoroughly addressed with the Divisional Commissioners and Divisional Planning Officers to ensure proper execution of projects from initiation to completion stage as dictated by the SOP.
 A review of the SOP’s with a view of updating any out-dated clauses and minimizing any possible gaps or loopholes between SOP requirements and generally accepted practices.

18.12 Significant Arrears of Revenue Accounts which are overdue must be promptly followed up in accordance with the debt recovery procedures in the Finance Manual.32 The arrears of revenue comprise of outstanding licence fees.
The audit noted that the Ministy had substantial arrears of revenue amounting to $917,430 as at 31/7/16 which has been increasing steadily over the years.

Arrears of revenue over the last five years is shown in Table 18.9.
Table 18.9: Arrears of revenue 2012 – 2016 Year 2012 2013 2014 2015 2016 Amount ($) 495,059 656,688 756,568 753,843 917,430 Increase (%) - 33 15 (0.4) 22 Furthermore, the aging of debtors report shows that 77% or $704,980 of the total arrears are more than one years old of which a sum of $85,313 has been outstanding for more than five years.

Refer to Table 18.10 for details.


Table 18.10: Age of Debtors Age of Debts 3 months 6 months 9 months 1 year & above 2 – 5 years Over 5 years Total Amount ($) 12,947 163,295 36,207 244,838 374,830 85,313 917,430 Percentage (%) 1.4 17.9 4.0 26.7 41.0 9.0 100 There is a very high risk that long outstanding arrears of revenue may not be recoverable.
32 Finance Instruction 2010, Section 41 _____________________________________________________________________________________________ Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 15 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017______________________________________ It was also noted that the Ministry is yet to implement proper debt recovery procedures which has resulted in the late collection of license fees as detailed in Table 18.11.
Table 18.11: License Fees Received in 2016 Date Receipt No.
Description 13/01/16 13/01/16 13/01/16 15/01/16 13/01/16 13/01/16 21/01/16 21/01/16 13/01/16 13/01/16 21/01/16 21/01/16 21/01/16 29/01/16 29/01/16 29/01/16 29/01/16 29/01/16 29/01/16 16/03/16 16/03/16 16/03/16 16/03/16 16/03/16 16/03/16 16/03/16 16/03/16 16/03/16 16/03/16 16/03/16 Total (Sample Only) 584315 Annual fees for year 2013 584313 Annual Fees for year 2014 584314 Annual fee for year 2014 584324 Annual fee for 2014 584311 Annual Fees for year 2015 584312 Annual Fees for year 2015 584330 Annual fee for 2014 584331 Annual fee for 2014 584311 Annual Fees for year 2015 584312 Annual Fees for year 2015 584328 Annual fees for 2015 584329 Annual fees for 2015 584332 Annual fee for 2015 981352 Annual fees for 2015 981353 Annual fees for 2015 981354 Annual fees for 2015 981355 Annual fee for 2015 981356 Annual fee for 2015 981359 Annual fee for 2015 981606 Annual fee for 2015 981607 Annual fee for 2015 981608 Annual fee for 2015 981609 Annual fee for 2015 981610 Annual fee for 2015 981611 Annual fee for 2015 981612 Annual fee for 2015 981613 Annual fee for 2015 981614 Annual fee for 2015 981615 Annual fee for 2015 981616 Annual fee for 2015 Amount ($) The high arrears of revenue is a result of the poor monitoring of the annual licence fee collection.
Outstanding licence fees also indicates that some businesses are operating without a valid licence.

Recommendations  The Manager Finance in consultation with Divisional Commissioners should maintain list of businesses required to pay liquor licenses and ensure that fees are paid in a timely manner.
Notices should be issued to businesses which have not paid the annual licence fee;  The Ministry should ensure that a debt recovery procedure is developed and implemented immediately; and _____________________________________________________________________________________________ Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 16 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017______________________________________  The Ministry should assess the recoverability of the arrears of revenue to ensure that it is correctly reflected in books.
Management Comments  Audit comment is noted.

 The Arrears relate mostly to overdue business licenses and work plans have now been put in place by Divisional Commissioners through the Divisional Accounts Officers and PA’s & DO’s to ensure collection of arrears as well as proper documentation of inactive or dormant businesses for writing off their bad debts.

Specific attention has been given to those arrears that fall into the over 2 years & above category.
18.13 Drawings Account Not Properly Maintained The Accounts Officer must reconcile all accounts to be submitted to Ministry of Finance within two weeks after the closing of each monthly account.33 The PS shall appoint three officers to be part of a Board of Survey to conduct a physical stock take of all money on hand and other stock held in safes.34 Audit review of Drawing Account revealed the following anomalies:  The board of survey was only carried out by two officers;  The drawings reconciliation was not performed in a timely manner.
Refer to Table 18.12 for dates the monthly reconciliation were prepared.
Table 18.12: Monthly Reconciliation Dates Month Headquarters Central Eastern Western Northern Date Reconciliation Prepared for each Division January February March April May June July 7/4/16 7/4/16 17/5/16 19/5/16 20/6/16 11/7/16 28/10/16 22/7/16 4/5/16 Consolidated Reconciliation Date not Stated 20/6/16 22/6/16 29/7/16 Not Stated 7/12/16 Not Stated 15/4/16 2/6/16 21/6/16 18/7/16 7/12/16 7/12/16  The unpresented cheque listing for Headquarters, Central Division and Eastern Division consisted of Electronic Fund Transfer payments (EFT) as unpresented.
Refer to Table 18.13 for details.

Table 18.13: Examples of EFT Payments Included in Unpresented Cheque Listing Date Cheque No.
Amount ($) Head Quarters 33 Ministry’s Finance Manual 2013, Section 15.2.4 34 Ministry’s Finance Manual 2013, Section 6.2.1 _____________________________________________________________________________________________ Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 17 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017______________________________________ Date Cheque No.
Amount ($) 11/05/2016 11/05/2016 11/05/2016 29/02/2016 29/02/2016 29/02/2016 29/02/2016 29/02/2016 30/06/2016 30/06/2016 Central Division 22/03/2016 22/03/2016 22/03/2016 22/03/2016 22/03/2016 22/03/2016 22/03/2016 Eastern Division 05/02/2016 4187 4188 4189 3959 3960 3961 3962 3963 4184 4243 2230 2231 2232 2233 2234 2235 2236 1837 Total 712 2,250 810 161 544 290 251 141 14,151 8661 37,040 1,733 290 157 35 30 30 2,948 70,232  A variance of $55,559 was noted between the unpresented cheque listing/general ledger balance and board of survey report.
The Acting Manager Finance explained that the board of survey had errors and needed to be conducted again.

However, as at the date35 of audit, the board of survey was not corrected and resubmitted for audit verification.

Refer to Table 18.14 for details.


Table 18.14: Comparison of Unpresented Cheque Listing, General Ledger and Board of Survey Unpresented Cheque Listing Balance ($) General Ledger Balance ($) 308,410.15 308,410.15 Board of Survey Report Balance ($) 363,969.41 Variance ($) 55,559 The absence of proper checks in Accounts Section is a contributing factor to such anomalies.

Absence of regular reconciliations will result in the Ministry failing to detect irregularities, errors and omissions in a timely manner.
Recommendations  Supervisory controls and checks should be strengthened in the Accounts Section to avoid such discrepancies.
35 31/12/16 _____________________________________________________________________________________________ Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 18 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017______________________________________  The Ministry should ensure that the Drawings Account is reconciled monthly and any errors or omissions noted are investigated and adjusted accordingly.
Management Comments  Responsible officers in the Divisional and HQ accounts units have been tasked to conduct the BOS and monthly reports will be submitted accordingly to the PS for scrutiny and endorsement.

 As a supervisory control, the Director Corporate is now also roped into the process to ensure accountability assisting the PS & A/MF.
18.14 Governance Issues Each month, the Accounting Head must provide a signed and dated report to the Permanent Secretary to advise whether all reconciliations and checks required in the agencies finance manual have been carried out; and the current status of any unresolved issue external or internal audit issue.36 An effective and cost effective system of internal control will ensure that wastage of funds, over expenditure and abuse of system, processes and resources do not occur.37 The preparation of management reports allows senior management to analyse the standing of the agency for a particular period and assists in meeting the management responsibilities imposed by the Act.
Timely and accurate management are necessary for effective management decisions.

As well, annual reports and financial statements act as an accountability tool for external stakeholders to assess the operations and performance of the agency.38 The Manager Finance is responsible for the safekeeping and proper maintenance of all accounting records or documents.39 The audit noted that the monthly signed report was not provided to the Permanent Secretary.
As such, the following internal controls were not in place for the financial period ended 31 July 2016:  The following accounting reconciliations were not prepared on a timely basis: - Consolidated Main Trust Fund bank reconciliation was prepared for Westpac account for the month January to July on 28 October 2016; - Main Trust Fund bank reconciliations for BSP account was also not prepared on time.

Refer to Table 18.15 for details.
Table 18.15: Date BSP Bank Reconciliation Prepared Month January - March April - July Date Reconciliation Prepared 12/4/16 9/11/16 36 Finance Instructions 2010 - Section 60 37 Ministry’s Finance Manual 2013 – Part 15: Internal Control – Introductory Paragraph 38 Ministry’s Finance Manual 2013 – Part 16: Reporting – Introductory Paragraph 39 Ministry of Rural and Maritime Development and Disaster Management, Finance Manual 2013, Section 17.2.1 _____________________________________________________________________________________________ Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 19 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017______________________________________ - Bank Lodgement Clearance (BLC) reconciliations were also prepared late.
Refer to Table 18.16 for details; and Table 18.16: Date BLC Reconciliation Prepared Month January - March April - May June – July Date Reconciliation Prepared 30/6/16 Date not stated 8/9/16 - The date prepared was not stated in SLG 89 and operating trust reconciliations.
 The following administrative internal controls were absent: - The Monthly Management Reports outlining the performance of the Agency was not prepared for the financial period 1 January 2016 to 31 July 2016; - The Monthly Revenue Reports and Revenue Chart for revenue collectors were not prepared contrary to section 5.6 of the Ministry’s Finance Manual 2013; - No gift register was maintained by the Ministry contrary to section 5.3.13 of the Ministry’s Finance Manual 2013; - The Ministry does not have a Risk Management Policy; - The Ministry does not have an IT Strategic/Steering Committee; - The Ministry does not have an approved IT Strategic Plan; and - The Ministry does not have a Disaster Recovery Plan.
The non-preparation of regular financial and performance reports may hinder the effective decision making by management.

Absence of regular reconciliations will result in the Ministry failing to detect irregularities in respective accounts on a timely manner.

Recommendation The Permanent Secretary must ensure that all the monthly reports and reconciliations are prepared in a timely manner as required by the Finance Manual 2013 and Finance Instructions 2010.
Management Comments Monthly update on reconciliations and any unresolved issues will be provided to the DS and the PS on a weekly basis and with any other report he may require.
_____________________________________________________________________________________________ Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 20 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017______________________________________ SPECIAL AUDIT FOR TROPICAL CYCLONE WINSTON 18.15 Northern Division 18.15.1 Losses Incurred Due to Condemned Goods The storekeeper must ensure that stock are handled with care and well stored so as to reduce the risk of damage.
40 The audit noted a huge quantity of condemned goods at the bulk storage in Nabouwalu, Savusavu and Taveuni equivalent to a total cost of wastage amounting to $19,410.

Refer to Table 18.17 for details.
Table 18.17: Details of Condemned Goods Value in Nabouwalu, Savusavu and Taveuni Bulks Item Quantity Unit cost ($) Total Cost ($) Remarks 3 bags 1 bag 1 bag 33 cans * 425 grms 2 bags 2 bags 1 bag 62 cans * 425 grms 20 bags 8 bags 2 bags 336 cans * 200 grms 1 bag 4 bags 26bags 6 bags 8 bags 59 cans * 425grms Savusavu Bulk 50kg Normal flour 45kg Rice 25kg split peas Tin fish (mackerel) 50kg Normal flour 45kg Rice 25kg split peas Tin fish (mackerel) 10kg Normal flour 50 kg Rice 50kg Sugar Farmers C/beef 10kg Normal flour 50kg Normal flour 50 kg Rice 50kg Sugar 25kg split peas Tin fish (mackerel) Subtotal wastage costs – Savusavu bulk Taveuni Bulk 410 cans * 425grms Tin fish (mackerel) 6 cans * 200 grms Corned beef 80 bags 50kg Normal flour 41 bags 45 kg Rice 19 bags 50kg Sugar 6 bags 25kg split peas 144 cans * 425grms Tin fish (mackerel) Powdered milk 11 pkts * 450grms Subtotal wastage costs – Taveuni bulk Nabouwalu Bulk $58.48/bag $48.99/bag $43.50/bag $2.68 /can $58.48/bag $48.99/bag $43.50/bag $2.68/can $11.70/bag $50.91/bag $101.42/bag $2.19/can $11.70/bag $58.48/bag $50.91/bag 101.42/bag $43.50/bag $2.68/can $2.68/can $2.19/can $58.48/bag $48.99/bag 101.42/bag $43.50/bag $2.68/can $5.63/pkt 175 Damaged packaging 49 44 88 Dented cans 117 Damaged packaging and infested.
98 97 166 Dented cans during transportation 234 Partly wet 407 Torn packages 202 Partly wet 736 Dented and damaged labelling 12 Partly wet 234 Torn package and partly wet 1,324 Torn package 609 Torn package 348 Torn package 158 Dented cans 5,098 1,099 Damaged/dented cans during 13 transportation 4,678 Wet during transportation 2,009 Damaged/open bags 1,927 Damaged/ wet 261 Damaged/ wet 386 Damaged/ dented 62 Damaged during transportation 10,435 40 Pro-forma Finance Manual 2011 – s8.1.3 _____________________________________________________________________________________________ Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 21 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017______________________________________ Item Quantity 50kg Normal flour Corned beef 5 bags 34 cartons (48 * 200grms) Unit cost ($) $58.48/bag $105.44/ctn Total Cost ($) 292 Wet Remarks 3,585 Open and blown up cans (fallen during unloading process at Nabouwalu wharf) Subtotal wastage costs - Nabouwalu bulk Total Equivalent Wastage Costs – Northern Division 3,877 19,410 It was noted that the items have been damaged mainly during the loading/unloading process due to improper handling of goods and during the shipment of these items from Suva by sea.
However, intentional denting/damaging of the items cannot be also ruled out.

Recommendations The Divisional EOC Coordinator should ensure that:  measures are put in place to ensure that rations are properly handled to avoid damage and eventual wastage of taxpayers’ monies; and  all future procurements of food rations are facilitated from the approved suppliers in the Northern division instead of Suva in order to avoid wastage due to damage during shipment of goods from Suva by sea.
Management Comments Yes we fully agree with the recommendation made by the auditors.

The Divisional EOC had made a request that the rations for the North be loaded on trucks via Roll on Roll off through Nabouwalu and Savusavu to minimise unnecessary handlings and at the same time minimise damage and wastage.

We agree with the comments that procurement of stores should be done in the North and POs to be placed with the approved suppliers.
18.15.2 Diversion of Rations Procured for Northern Division Procurements of one month food rations for the Northern division was facilitated by the National Disaster Management Office in Suva through the future operations team with the LPOs being issued on 28 February 2016.

The rations were temporarily stored at the Mechanical, FPO and Nausori Airport hangar bulk before they were to be shipped to the Northern Division.
However, the audit noted that the large quantity of food ration supplies procured for the Northern Division that were stored at these bulk storgae were diverted to the Central and Eastern division.

Refer to Table 18.18 for details.
_____________________________________________________________________________________________ Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 22 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017______________________________________ Table 18.18: Details of Northern Division Rations Diverted to Other Divisions Item Quantity Way bill / Delivery docket reference Delivery Date Remarks 50kg Normal flour 485 bags Way bill no.
0752 / 09/03/16 D/docket 506604 Items diverted Mechanical Stores.

to Commissioner Central from 45kg Rice Milk (24/carton) 50kg Sugar Corned beef Tin fish 595 bags Way bill no.

0777 / 5066034 D/docket 130 ctns (Mechanical stores) 229 bags 469 ctns D/docket (FPO bulk) 277 ctns 004671 18/03/16 Items diverted to Commissioner Eastern (Iloilovatu) for ration distribution in Southern Lau.
18/03/16 These items were approved by the Permanent Secretary for Rural Maritime Development & National Disaster Management through a minute request written by Person A of the Commissioner Eastern office.

However, the minute request did not specify the goods being requested for Southern Lau distribution were stocks procured for the Northern division.
The diversion of the above rations would have resulted in areas earmarked for distribution in the Northern Division not being covered for ration distribution as intended.

Refer to issue 18.15.4 for areas not covered with ration distribution in the Northern Division.

The above finding denotes poor logistics planning to ensure that all rations procured for a particular division are delivered in full on a timely basis.
Recommendations  Disciplinary actions should be instigated against the officers responsible for diverting rations.

 Ration distribution should be improved in future.

Management Comments Yes we fully agree with the comments, if food rations were delivered by trucks to the North this can avoid diversion after long hours of storage at the bulk.
18.15.3 Considerable Delay in Shipment of Rations to the Northern Division Procurements of one month food rations for the Northern division was facilitated by the National Disaster Management Office in Suva through the future operations team with the LPOs issued on 28 February 2016.

Physical stock count at the Mechanical and FPO bulk on 24/03/16 noted the following items in stock being balance of one month’s food rations procured for the Northern Division.

Refer to Table 18.19 for details.
_____________________________________________________________________________________________ Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 23 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017______________________________________ Table 18.19: Stock Count Balance of Northern Division Rations as at 24/03/16 Item Unit Sugar Powdered milk Long grain rice Split peas Mackerel oil Canola oil Corned beef Flour 50kg bags Cartons 50kg bags 25kg bags Cartons Cartons Cartons 50kg bags Mechanical yard (Qty.)
FPO bulk (Qty.)

Total quantity 1,075 944 1,045 303 210 0 123 466 0 0 170 1,000 621 141 2,183 0 1,075 944 1,215 1,303 831 141 2,306 466 The audit noted that the above items were kept in the stores for almost a month and were yet to be shipped to the Northern Division as intended for the one month food ration distribution.
Moreover, due to the extended storage period and constant moving and restacking of these items to make way for other incoming items, some of these items have been damaged or dented, hence escalating costs of wastage due to damaged goods.

Recommendation Management should ensure that the rations are shipped to the Northern Division at the earliest date to avoid further loss of taxpayers’ funds to damaged goods.
Management Comments Yes we fully agree to the comments we are accessible by Roll On Roll Off boats that berths in Nabouwalu and Savusavu.

18.15.4 Insufficient Food Rations for Distribution Procurements of one month food rations for the Northern Division was facilitated by the National Disaster Management Office in Suva through the future operations team with the LPOs issued on 28 February 2016.
The audit noted that food rations were procured for distribution to the areas detailed in Table 18.20 in the Northern Division.

However, as at audit date (31/03/16), one month after procurements were made, the items were yet to be distributed to affected areas.
Table 18.20: Food Ration Yet to be Distributed to these Areas Areas (EAs) Bua Province 20100000 Nasarowaqa Vill, Drainivuga , SPAD Ltd Comp., Nakutubuco , Suvani ,Bavotu, Vunisea, Koro, Nadepo, Y- Corner, Matasarosaro , Matadogo, Delainaivi, Qarabi, Nasimede 20100020 Namuavoivoi Vill, Totogo, Sevusomo, Sasake, Naselesele, Soti, Droca, Nababiu _____________________________________________________________________________________________ Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 24 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017______________________________________ Bua Province Areas (EAs) 20100030 Korokadi,Korokadi Ind.
Sch, Vakale 20100040 Kavula Vill, Banikea Vill, Waibunabuna, Nakadrudru Govt St, Veiseiseivula 20100080 Cobue (part), Bua Dist.

Sch, Bua Indian sch, Bua Nursing Station 20100090 Cobue, Vatubogi, Vatubogi Primary School, Logani Discussions with the Provincial Administrator Bua revealed that the food ration items in stock were not sufficient to cater for the population in these areas.
The non-distribution of food rations to the above areas is a direct result of the diversion of Northern Division rations to the Eastern and Central Division.

Recommendations  Management should ensure that diversion of food rations procured for a division is ceased with immediate effect.

 Disciplinary actions should be instigated against the officers responsible for the diversion of the above food rations.

Management Comments Yes we fully agree to the comments.
We had sent our recommended ration schedules with population listings with villages/settlements.

This did not eventuate because purchases done by FPO were based on 2007 population Census figure causing lot of discrepancies on our deliveries.

18.15.5 Unaccounted Rations Upon receipt of the goods, services or works, the receiving officer shall verify that their receipt in good order and that the invoice is in accordance with the LPO.
If the quantity of the goods received is less than shown in the suppliers invoice or delivery note, the receiving officer shall furnish a report to the Administration Manager who shall arrange a claim against the supplier or carrier.

41 The audit noted that a total of 9 cartons of corned beef transported from Suva to Nabouwalu/Savusavu via the Vatulawa were unaccounted for upon unloading of the goods at the Nabouwalu and Savusavu jetty.
The total quantity shipped as per the Government Shipping Service shipping receipt noted that 1,000 cartons of corned beef were in the consignment as released from the stores and loaded on board.

However, the actual total quantity received by the Provincial Administrator Bua (491ctns) and Provincial Administrator Cakaudrove (500ctns) was only 991 cartons.
A way bill document was also prepared for the consignment but this was not signed by the relevant officers releasing the items from the stores, transporting officer and receiving officer.
41 Pro-forma Finance Manual 2011 – s2.5.16 _____________________________________________________________________________________________ Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 25 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017______________________________________ The above finding indicates that the goods may have been offloaded during the shipment of the goods.
Recommendations  The unaccounted rations should be immediately investigated and referred to relevant authorities if required; and  DISMAC officers should accompany all goods being shipped to outer islands and sign off all way bills.

Management Comments Yes we agree to the comments, to our understanding there should always be a SUPER CARGO CLERK in every deliveries, who shall be responsible to see that the consignment are delivered in good care to its destination.
18.15.6 Weaknesses in Procurement Process Upon receipt of the goods, services or works, the receiving officer shall verify that their receipt in good order and that the invoice is in accordance with the LPO.

If the quantity of the goods received is less than shown in the suppliers invoice or delivery note, the receiving officer shall furnish a report to the Administration Manager who shall arrange a claim against the supplier or carrier.
42 Audit review of the item description, quantity and unit price of goods supplied as per the supplier’s invoices and delivery dockets for rations procured by the Commissioner Northern Division noted the following anomalies.

Table 18.21: Anomalies in Procurements Date PO number Item 01/03/16 PO93991-003173 Powdered Milk (Ctns) Qty.
ordered 12 ctns 26/02/16 PO93991-003146 03/03/16 PO93991-003188 Long Grain Rice(45kg) Flour (50kg) Split peas (25kg) Powdered Milk (ctn) Cooking Oil(ctn) Flour (50kg) 63 bags 28 bags 28 bags 17 ctns 14 ctns 154 bags Amount ($) Remarks 1,152 Invoice/ Delivery docket no.

796368 received for the supply of these items was not signed by the officer receiving the goods.

Hence it was not possible to determine whether goods have been actually delivered.
3,339 No delivery docket provided for all 1,753 1,268 2,444 824 the items.

10,507 Supplier invoiced for 154bags as per of invoice 03/03/16 quantity received as per delivery docket no.

275054 of 03/03/16 was only 73 bags.

no.


SAL/12156678 actual but 42 Pro-forma Finance Manual 2011 – s2.5.16 _____________________________________________________________________________________________ Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 26 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017______________________________________ Date PO number Item 25.02.16 PO93991-003141 Long Grain Rice (45kg) Qty.
ordered 2 bags Amount ($) Remarks 162 No delivery docket provided for these items.

The above denotes weaknesses in the procurement process and the failure to address the above may result in goods ordered not being received, hence resulting in overpayment.
Recommendations  The Divisional EOC Coordinator should ensure that a detailed reconciliation of all quantity of rations ordered and actual quantity delivered and unit price invoiced by the suppliers before payments are made; and  Only authorized officers should be assigned to receive the goods and signing the invoices/delivery dockets after verification of the purchase orders.
Management Comments Yes we fully agree to the comments, NDMO and FPO to conduct training on issues regarding procurement and other aspects of stock control and stock movements in any EOC bulk.

Most officers engaged in the exercise had never had experience in this process before.

FPO to reintroduce Stores Regulation.

18.15.7 Improper Storage of Goods Storage of inventories shall be the responsibility of the storekeepers.
The storekeeper must ensure that storage facilities are properly secured, stocks are kept in an orderly manner and stock are handled with care and well stored so as to reduce the risk of damage.

Access to the inventory stores shall be limited to the storekeeper.
All other officers shall be restricted from entering storage facilities unless approval is granted by the storekeeper 43 Audit site visit to the Naqere Ration Distribution Centre in Savusavu on 14/03/16 showed that sacks of rations supplies including flour, rice, sugar and split peas) were stored on the roadside and covered by tarpaulins exposing these goods to adverse weather conditions.

Refer to pictures below.
Rations temporarily stored on the roadside in Naqere, Savusavu (14/03/16) 43 Pro-forma Finance Manual 2011 – s8.1.3 _____________________________________________________________________________________________ Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 27 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017______________________________________ It was explained that the food rations were being temporarily stored on the roadside due to the insufficient storage space at the Naqere bulk.
There is a high risk of rations being infested due to the perishable nature of these items, hence increasing health risks to members of the public who consumed them.

Failure to address the above may result in further wastages hence loss of taxpayers’ funds.

Recommendations The Divisional EOC Coordinator should ensure that:  all goods are properly stored in a safe storage area at all times; and  proper storage areas are identified for any future disaster operations.
Management Comments Yes we fully agree with the comments that the North really needs storage facilities, which is why most rations we stacked outside along the road side in Savusavu as our bulk was full.

18.15.8 Records of Stock In/Out at the Bulk not Standardized – DO Taveuni As a best practice, each agency must have in place a cost-effective system of internal controls which safeguards money and property against loss.
The Store man shall maintain register of all items to record incoming and outgoing of items.

The register shall provide the following information: i) Date of acquisition and order number reference; ii) Number of items received and cost price; iii) Suppliers details; iv) Date of issue of inventory and nature of issues (for example, transfer of processing); v) Issue reference (authority such as requisition order); vi) Quantity issued; and vii) Balance.
44 The audit noted that the stock/tally records of quantity of stock in/out maintained by the District Officer Taveuni were not standardized.

For instance, the quantities of tin fish received were recorded in the number of tins received while the quantities issued were recorded in both cartons and tins issued.

A similar observation was noted for records of milk and cooking oil which were recorded in both cartons and packets/bottles.
In addition, there were two sets of tally cards maintained with one set not being updated since the first day of operations.

Hence, the quantity of items distributed could not be properly reconciled.
44 Pro-forma Finance Manual 2011 – s2.5.16 _____________________________________________________________________________________________ Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 28 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017______________________________________ The audit findings indicate a high risk of loss of rations through pilferage.
Recommendations The EOC coordinator should ensure that:  quantity of goods distributed matched against the delivery dockets and the total distributed is reconciled against the total quantity of goods received and balance in stock; and  any discrepancies noted should be investigated and disciplinary action taken against responsible officers where necessary.

Management Comments Yes we agree with the comments.

We need to train officers how to run stores.

NDMO and FPO to conduct training.


18.15.9 Reconciliation of Ration Distribution in Taveuni Reconciliation is the control measure to ensure that at least two sets of records are in agreement.

Reconciliation provides assurance that all items purchased, received at the stores and distributed to the end users, have been accounted for.
Audit review of the food ration distribution operations and records in Taveuni revealed that food ration distribution details as per the delivery notes/distribution lists were recorded in MS Excel spreadsheets but could not be reconciled to the total quantity of items received and delivered from the bulk.

The audit finding indicates that in the absence of proper reconciliations being carried out, there is a high risk of loss of goods through the pilferage of supplies.
Recommendations The EOC coordinator should ensure that:  Quantity of goods distributed are matched against the delivery dockets and the total distributed reconciled against the total quantity of good received and balance in stock; and  Any discrepancies noted should be further investigated and disciplinary action considered where necessary.

Management Comments Yes we fully agree to the comments.
We recommend that in future qualified store man should run EOC stores to look after taking stock on charge and stock movement.

At the same time they are able to do stock take at the end of every movement to determine surplus and deficits or pilferage within the physical stock count to tally up with the tally cards.
_____________________________________________________________________________________________ Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 29 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017______________________________________ 18.16 Eastern Division 18.16.1 Excessive/Unauthorised Supply of Food Rations Upon receipt of the goods, services or works, the receiving officer shall verify that their receipt in good order and that the invoice is in accordance with the LPO.
If the quantity of the goods received is less than shown in the suppliers invoice or delivery note, the receiving officer shall furnish a report to the Administration Manager who shall arrange a claim against the supplier or carrier.

45 Manual Local Purchase Orders no.735651 – 735670 totalling $1,411,568 were issued on 21/02/16 for supply of food ration for Lomaiviti, Northern Lau, Southern Lau and Yasayasa Moala based on the estimated number of adults/children per village.
Reconciliations of suppliers’ invoices/delivery dockets against the Eastern Division’s approved purchase orders for food rations on 21/02/16 revealed that there was excessive and unauthorised purchase of tin fish, powdered milk and canola oil amounting to $240,095.

Refer to Table 18.22 for details.

Table 18.22: Summary of Items Ordered and Supplied Total Qty.

ordered (cartons) 4,001 420 1,007 Item Tin fish Powdered milk Canola oil Total Total Qty.

supplied (cartons) Excess Qty.


supplied (cartons) Excess Amount ($) 6,711 701 1,383 2,710 281 376 197,905 37,019 5,171 240,095 Refer to Appendix 18.5 for the detailed reconciliation of LPOs and suppliers invoices/delivery dockets.

The above finding denotes weaknesses in controls over the procurements exacerbated by the absence of a proper reconciliation mechanism to keep track of the quantity of goods ordered and supplied.
Possibility of collusion between the suppliers and the officers involved in the procurement of the goods cannot be ruled out.
Recommendations The Ministry should ensure that:  a proper reconciliation mechanism is put in place to ensure that all future orders are properly monitored and reconciled in terms of item description, brands, unit prices and quantity ordered and supplied; and  a thorough investigation is to be carried out and disciplinary actions should be instigated against those officers responsible.
45 Pro-forma Finance Manual 2011 – s2.5.16 _____________________________________________________________________________________________ Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 30 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017______________________________________ Management Comments The item was over supplied due to the following reasons: a.
We admit that a mistake had occurred which was caused by oversight because we had been loading the items in the middle of the night till morning to allow for the boat to set sail the next day as per the directives given.

TC Winston hit Fiji on the 20th of February and we were directed to supply food on the 22nd day of February.

There was not enough time given to fully make a thorough check on the supplies hence error occurred.
b. Secondly the strategy for the Eastern Division was to use the Iloilovatu to start distributing from Koro and all the affected islands in the Eastern Division c. Fortunately for the Eastern Division, Company Shipping A offered their vessels and were used for transporting rations to Ovalau, Vanuabalavu, Gau, Nairai and Batiki.
d. MV Iloilovatu after supplying food rations to Koro returned and food items were properly stacked at the Warehouse at the FPO awaiting shipment for the next round of ration distribution.

e. Population data provided for the preparation of 1st Round Food Distribution was for 2007 and population on the ground differs after Provincial Administration reported that minority were left out.
After consultation with the MOH, who also have records of population data, it was found that there were differences and MOH record was more by close to double.

This resulted in rations reordering and verbal approval was given to divert food items to those that were left out.

f. We regret the mistake made by the team and the team assures that this will not happen again.
18.16.2 Items as per the Suppliers Invoices not Matching with LPO’s Issued Upon receipt of the goods, services or works, the receiving officer shall verify that their receipt in good order and that the invoice is in accordance with the LPO.

If the quantity of the goods received is less than shown in the suppliers invoice or delivery note, the receiving officer shall furnish a report to the Administration Manager who shall arrange a claim against the supplier or carrier.
46 Manual Local Purchase Orders no.735651 – 735670 totalling $1,411,567.88 were issued on 21/02/16 for supply of food ration for Lomaiviti, Northern Lau, Southern Lau and Yasayasa Moala based on the estimated number of adults/children per village.

The audit noted that items supplied as per the invoices received/signed did not reconcile with item description and quantity as per the approved LPOs issued.

Refer to Table 18.23 for details.

Table 18.23: Details of LPO’s and items supplied LPO No.
735651 LPO Amount ($) Items and qty.

ordered 8,176.50 Purchase order of 59ctns for powdered milk Actual items and qty.
supplied 377 cartons of corned mutton 658 cartons of tin fish 735652 22,217.48 Purchase order for 2,595.5 * 4kg 46 Pro-forma Finance Manual 2011 – s2.5.16 _____________________________________________________________________________________________ Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 31 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017______________________________________ LPO No.

735653 LPO Amount ($) Items and qty.


ordered bag sugar 9,109.33 Purchase order for 187 cartons of cooking oil Actual items and qty.

supplied 735670 72,284.68 735657 104,771.70 Purchase order for 433 cartons of corned beef.

Purchase order for 627 cartons of corned beef.

283 cartons of tin fish, 26 cartons of powdered milk and 58 cartons of canola oil were supplied on this order by the supplier.
494 cartons of tin fish, 53 cartons of powdered milk and 97 cartons of canola oil were supplied on this order by the supplier.

The above finding denotes that due diligence checks were lacking to ensure that invoices are properly verified before being signed by the officers responsible.

Weaknesses in controls over the procurements have exacerbated due to the absence of a proper reconciliation mechanism to keep track of the quantity of goods ordered and supplied.
Recommendation The Ministry should ensure that a proper reconciliation mechanism is put in place to ensure that all future orders are properly monitored and reconciled in terms of item description, brands, unit prices and quantity ordered and supplied.

Management Comments 1.

The recommendation given by the audits was taken into consideration and the office of the CED accepts the fact that it did not carry out the necessary checks and reconciliation to ensure stores are safeguarded.

2.
2.

In this instance because of the urgency to send rations to the affected population, verbal notes were given to the suppliers via phone to supply the necessary stores required by the Eastern Emergency Operation Centre (EECC).

3.

This prompted suppliers, who already has PO’s, to supply the needed items, so supplier makes sure that goods supplied do not exceed the value of the invoice even though suppliers have orders which contains which were initially ordered.

4.
4.

Corned Mutton was also ordered due to the unavailability of corned beef from the supplier and also there was an instruction from National Controller for the cessation of the procuring of corned Beef and Mutton.

All these instruction came when the Purchase orders were with the suppliers.

18.16.3 Absence of Reconciliation of Food Ration Distribution Reconciliation is the control measure to ensure that at least 2 sets of records are in agreement.
Reconciliation provides assurance that all items purchased, received at the stores and distributed to the end users, have been accounted for.
_____________________________________________________________________________________________ Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 32 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017______________________________________ Review of the food ration distribution operations and records for the Eastern Division noted that food ration distribution details were recorded in an MS Excel spreadsheets which were not been reconciled to the total quantity of items received from the supplier and delivered from the bulk.
Therefore, the objective of maintaining these records was not fully achieved indicating a high risk of goods being unaccounted due to pilferage.

Recommendations The EOC coordinator should ensure that:  quantity of goods distributed are reconciled against the delivery dockets and the total distributed to be matched against the total quantity of good received and balance in stock; and  any discrepancies noted should be further investigated and disciplinary action taken against the officers responsible.
Management Comments The office of the CED will not deny the fact that due diligence was not done in relation to the procurement and delivery of stores, as was indicated earlier that the situation inhibits the addressing of issues being highlighted.

Due to lack of personnel coupled with the lack of qualification in the areas of inventory procurement/Control in the office, certain internal control procedures have to be bypassed.
As was mentioned earlier that the situation the nation is facing at that time does not allow for proper/careful scrutiny of personnel appointed to this section.

The office of the CED has put in place measures to minimise errors and inconsistencies that may arise.

18.17 Central Division 18.17.1 Reconciliation Reconciliation is the control measure to ensure that at least 2 sets of records are in agreement.
Reconciliation provides assurance that all items purchased, received at the stores and distributed to the end users, have been accounted for.

Rations and donated items are delivered to the victims of the Cyclone who reside in villagers, settlements or evacuation centres.

Representatives of the victims who could be Turaga Ni Koro or Division Advisory Counsellors receive the items on behalf of the victims.
They sign the delivery note or a delivery sheet which is then submitted to the Division EOC to be recorded.

The audit noted that although details of the delivery note or delivery sheet were recorded in an MS Excel spreadsheet in the Division EOC, no officer in the Centre was designated to actually reconcile the items that was released from the Warehouse to the items that were received by the victims or their representatives.
_____________________________________________________________________________________________ Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 33 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017______________________________________ The audit further noted that when delivery notes were obtained, the Officer in Charge at the Warehouse did not raise concern if differences were noted between what was released from the Warehouse and what was received by the victims or their representatives.
Lack of proper reconciliation of stores received and distributed indicates the risk of pilferage of stores.

Recommendation The Division EOC should delegate an officer to reconcile the items that have been distributed from the Warehouse and the items that have been received by the victims.
Management Comments The DEOC was informed on the need for reconciliation and a verification group was tasked accordingly but due to the outbreak in the Division, they were tasked to attend to this issue from the Controller.

Due to the demand of time and effort needed in order to maintain the outbreak, the task was inconsistent.

DEOC was aware of the inconsistencies but could not update the record submitted by the Warehouse Team.
Team Central duly noted the recommendation and will make improvement in the next operation 18.18 Western Division 18.18.1 Variances in Stock Records against FPO As a best practice, each agency must have in place a cost effective system of internal controls which safeguards money and property against loss.

The Store man shall maintain register of all items to record incoming and outgoing of items.
The register shall provide the following information: i) Date of acquisition and order number reference; ii) Number of items received and cost price; iii) Suppliers details; iv) Date of issue of inventory and nature of issues (for example, transfer of processing); v) Issue reference (authority such as requisition order); vi) Quantity issued; and vii) Balance.

47 All donated items received in Lautoka were recorded first at the Fiji Procurement Office before it was stored at the Nadovu Warehouse.
Upon receipt at the Nadovu Warehouse, a delivery docket was also signed to acknowledge the receipt of the items.

The Senior Officer at the Warehouse, Nadovu updated the tally cards from the documentation relating to the issue and the receipt of items.
47 Pro-forma Finance Manual 2011 – s8.1.3 _____________________________________________________________________________________________ Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 34 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017______________________________________ Reconciliation of tally cards with the records maintained at the Fiji Procurement Office on 23/03/2016 revealed that some items recorded at the FPO were not recorded it the tally cards maintained at the Warehouse.
Refer to Table 18.24 for details.
Table 18.24: Unaccounted Items at the Warehouse Date of delivery Reference AID Item Description Unit Quantity 27/02/16 27/02/16 27/02/16 27/02/16 27/02/16 27/02/16 27/02/16 27/02/16 27/02/16 27/02/16 9/3/2016 1/3/2016 1/3/2016 4/3/2016 8/3/2016 8/3/2016 8/3/2016 8/3/2016 8/3/2016 8/3/2016 16/03/16 16/03/16 10/03/16 11/03/16 11/03/16 12/03/16 16/03/16 21/03/16 21/03/16 21/03/16 FPO D/D No.3854 FPO D/D No.3854 FPO D/D No.3854 FPO D/D No.3854 FPO D/D No.3854 FPO D/D No.3854 FPO D/D No.3854 FPO D/D No.3854 FPO D/D No.3854 FPO D/D No.3854 FPO D/D No.3865 FPO D/D No.3859 FPO D/D No.3909 FPO D/D No.3908 FPO D/D No.3864 FPO D/D No.3864 FPO D/D No.3864 FPO D/D No.3864 FPO D/D No.3864 FPO D/D No.3864 FPO D/D FPO D/D FPO D/D No.3866 FPO D/D No.3867 FPO D/D No.3867 FPO D/D No.4751 FPO D/D No.3869 FPO D/D No.3873 FPO D/D No.3873 FPO D/D No.3872 World Food Programme (WFP) Mobile Storage Units India India India India India India India India India India JICA Care Australia Direct Relief Direct Relief UNICEF UNICEF UNICEF UNICEF UNICEF UNICEF UNICEF UNICEF UNICEF Koica Koica IOM (Isle of Man) Aid UNFPA China China Biscuits Dry Milk Maggie Noodles Yippee Noodles ATTA Salt RML Medicine MSD Karnal Medicine SAF JANG Medicine MSG N Delhi Medicine Mattress Soap Pharmaceuticals Pharmaceuticals Cotton Wool ORS Medication Retinol Medication Folic Acid Multiple Micronutrient Amoxilin Amoxilin Amoxilin School in a Box Kit Water Biscuits Relief Goods Reagent Kit Tent Tent Carton Carton Carton Carton Bag Bag Carton Carton Carton Carton Carton Carton Pallets Pallets Rolls Carton Carton PAC Carton Carton Carton Pallets Pallets Carton Carton Packages Carton Pieces Pieces Pallets 234 150 700 114 40 10 67 40 105 201 25 443 20 4 5,000 300 2 50 69 60 121 5 6x8 500 200 3,385 12 3,076 530 20 The audit further noted that the records showed in the tally cards differed with the records maintained at the Fiji Procurement Office as shown in Table 18.25.
Table 18.25: Variances Noted on Warehouse Records against the FPO Records Item Origin Records at Warehouse Records with FPO 3,286 Variance Tent Family Tent Tarpaulin 50x4 Tent Dome Camping _____________________________________________________________________________________________ Ministry of Rural and Maritime Development and National Disaster Management 3,446 300 67 226 China Aid India JICA JICA 160 300 (53) 8 120 218 Section 18: Page 35 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017______________________________________ Item Origin Records at Warehouse Thermal Mattress School in a Box JICA UNICEF 210 500 Records with FPO 47 452 Variance 163 48 Due to proper reconciliations not being carried out, there is a high risk of loss of stores through theft or misappropriation.
Recommendations The Divisional EOC Coordinator should:     carry out a stock take of rations under his authority; ensure that stock cards are opened and maintained for all ration supplies received and delivered out of the warehouse; ensure that the stock/tally cards are updated on a daily basis; and ensure that reconciliation is carried out with the DHL records.

Management Comments Concur with the audit comments.

Note that the procedure outlined above is good in normal peace times.
Records kept at FPO are goods or items received by them and not necessarily the number of items held at the warehouse.

It is only a matter of reconciliation of figures and items because items of similar class are received directly at the warehouse without FPO knowledge.

FPO is not the controlling point or entry point of relief items at Divisional level.
18.18.2 Variances in Stock Records against “Logistics Company B” Records As a best practice, each agency must have in place a cost effective system of internal controls which safeguards money and property against loss.

The Store man shall maintain register of all items to record incoming and outgoing of items.
The register shall provide the following information: i) Date of acquisition and order number reference; ii) Number of items received and cost price; iii) Suppliers details; iv) Date of issue of inventory and nature of issues (for example, transfer of processing); v) Issue reference (authority such as requisition order); vi) Quantity issued; and vii) Balance.

The audit noted that as at 23/03/16, a physical stock take was not carried out by the officers at the Warehouse.
The Storeman had updated the tally cards based on the documents it maintained relating to _____________________________________________________________________________________________ Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 36 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017______________________________________ items received at and issued from the Warehouse as at 23/03/2016.
On 23/03/2016, Logistics Company B carried out a physical stock take at the Warehouse.

The audit noted that some of the items highlighted in the records obtained from Logistics Company B were not recorded in the tally cards maintained at the Warehouse.

Examples are shown in Table 18.26.
Table 18.26: Items on Physical Stock Take but not Recorded in Warehouse Tally Cards Item description Apple Silky Rice Bucket Oxfam type Cambridge onions bags 50 kgs Cement bags 50 kg bags Chinese Food Supplies (Unknown Product) Elemaz Generators Emergency relief goods Japan Emergency relief goods JICA Fiji water Iodised salt 50 kgs Kiwi blue water Living Water 10 litres Maggi 2 minute noodles MSU Frames MSU Halls NZ flow water 1.5 spring water Portable Toilet Seat Pump 400 ml water Rehydration Salts Wash clean Scrub Soap Water 6 litres signature range WHITE RICE Whole Wheat Category Food Item (UBD) Non Food Item Food Item (UBD) Non Food Item Food Item (UBD) Non Food Item Non Food Item Non Food Item Food Item (UBD) Food Item (UBD) Food Item (UBD) Food Item (UBD) Food Item (UBD) Shelter Shelter Food Item (UBD) Non Food Item Food Item (UBD) Medical Non Food Item Food Item (UBD) Food Item (Gov) Food Item (UBD) Quantity 22 77 136 25 78 8 59 2 19 16 76 36 0 7 13 42 2 9 40 245 9 15 28 The audit also noted that there were variances in the physical stock recorded by Logistics Company B compared to the stock recorded in the tally cards maintained at the Warehouse.
Refer to Table 18.27 for examples.
Table 18.27: Items accounted for by Logistics Company B on Physical Stock Take but not Recorded in Warehouse Tally Cards Variance Item Origin Bottle Water 1.5litres Family Tent Generator (Honda) Generator ELEME Hygiene Kit Reel Cord Shelter Tool Kit Tarpaulin 50x4 Tent (A, B, C, D) _____________________________________________________________________________________________ Ministry of Rural and Maritime Development and National Disaster Management Not known India NDMO Suva JICA NDMO Suva JICA NDMO Suva JICA UNICEF 482 35 12 8 10 9 119 5 52 Section 18: Page 37 Logistics Company B Stock Count 18 16 3 9 300 9 201 41 16 Warehouse Tally Card 500 51 15 17 310 18 320 46 68 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017______________________________________ The audit finding indicates that proper stores records were not maintained and reconciled indicating high risk of loss of stores through theft and misappropriation.
Recommendations The Divisional EOC Coordinator should:     carry out a stock take of rations under his authority; ensure that stock cards are opened and maintained for all ration supplies received and delivered out of the warehouse; ensure that the stock/tally cards are updated on a daily basis; and ensure that reconciliation is carried out with the Logistics Company B records.

Management Comments Comments noted and concurred with.
We are now working on the refurbishments and renovations of the Lautoka yard.

But then even so all relief rations received are receipted using CRV (certificates receipt vouchers) and items issued are recorded on CIV (certificates issue vouchers).

Logistics Company B spent only two days in the West and pulled out because they could not work in the harsh conditions that our men are exposed to.
We do not carry out logistics audit at the height of an operation especially relief operations of this magnitude and which is highly fluid.

18.18.3 Population Figures The quantity of rations to be purchased is dependent on the size of the population where victims of the Cyclone are located.

This population is sourced from the data provided by the Bureau of Statistics, iTaukei Affairs Board, and survey carried out by the EOC immediately after the Cyclone.
The audit noted that the data provided from these sources did not reconcile with the number of victims existing after the Cyclone.

As a result, rations that were purchased were more than what was required.

Examples are shown in Table 18.28.
Table 18.28: Excess Purchases Made Districts Ba Tavua Size of Population 46,649 21,905 Fortnightly Family Packs (Quantity) 23,326 10,952 Distributed (Quantity) Surplus noted as at audit visit on 15/03/2016 14,150 7,842 Quantity 9,176 3,110 Amount ($) 376,216 127,510 The audit visit to the two districts on 15/03/2016 showed that the surplus family packs purchased were covered by a tarpaulin and stored outside the yard exposed to the risk of theft and damage due to adverse weather conditions.
_____________________________________________________________________________________________ Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 38 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017______________________________________ The audit finding indicates that the data provided by the different sources were not reliable and resulted in excess purchases of rations.
Recommendation The Ministry should maintain a population database which should be updated after every emergency relief supply.

Management Comments There was never any over-purchase or excessive purchase but it was actually the opposite for we had to make extra purchase when confirmed numbers are received.

The audit comments are noted.

18.18.4 Nadarivatu District Officer District Officers are appointed to be stationed at the Districts to administer and manage the District Operations.
The audit noted that the District Officer, Nadarivatu was not stationed at Nadarivatu but at the Nadovu Warehouse in Lautoka, even though Nadarivatu was also one of the severely affected areas following Cyclone Winston.

No explanation was provided for absence of the officer from Nadarivatu.

The audit noted that on 29/02/2016, the Division issued a PO 003727 to Supplier A for $39,062 for supply of one month’s ration for the Nadarivatu District.
On 02/03/2016, the Division again issued PO 003762 to Supplier A for $38,853 supply of one month’s ration for the District.

In addition to this, the Division issued PO 003763 to the same supplier for $56,829.21 to supply another month’s ration.

The issue three purchase orders totalling $134,744 within three days with similar narration indicates possible duplicate ordering and/or lack of proper information on the ration needs at Nadarivatu.
The problem was further aggravated due to the absence of the District Officer from the station.

Recommendation The District Officer should be stationed at the District in times of emergency to ensure that correct information is provided when required.

Management Comments The comments are noted.
_____________________________________________________________________________________________ Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 39 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017______________________________________ 18.18.5 Verification of Charges Upon receipt of the goods, services or works, the receiving officer shall verify that their receipt is in good order and that the invoice is in accordance with the LPO.48 Most of the purchases for food rations were made from Supplier A.
After comparing purchase orders issued to the supplier to the invoices received from the supplier, the audit noted the following anomalies:  There were instances where items ordered were not supplied; and  There were instances where the prices used in the purchase order were different from the prices shown in the invoice.

Examples are shown in Appendix 18.6.


Due to over-reliance on one supplier for supply of goods , there is a high risk of price manipulation and short-supply which might go unnoticed if responsible officers are not vigilant.

Recommendation The Divisional EOC accounts should ensure that proper reconciliation is conducted before any payment is made to the supplier and alternate suppliers are considered for future purchases.

Management Comments The audit comments are duly noted.
18.18.6 No Documentation of Authority to Purchase Family Packs If a state of emergency is declared under a written law, the Minister of Economy may authorise such government expenditure to meet the emergency as is approved by the Cabinet, where (a) the money involved has not already been appropriated; or (b) the money has already been appropriated for another purpose.49 The audit noted that on 07/03/2016, the Division had started purchasing family packs rather than bulk purchases of rations at a rate of $41 per pack for the victims situated in the Districts of Lautoka, Ba, and Tavua.
No documentation was provided on the authority given to purchase the family packs and not bulk purchases.

Compared to purchases made in bulk, purchases made in family packs were found to be more expensive.

Details of purchases of family packs purchased as at 21/03/2016 are shown in Table 18.29.
48 Finance Manual, 2013 Section 2.5.9 49 Financial Management Act 2004 Para 24 (1) _____________________________________________________________________________________________ Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 40 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017______________________________________ Table 18.29: Family Packs 2 Weeks Ration Purchased for 3 divisions Date Vendor 07/03/16 07/03/16 07/03/16 07/03/16 07/03/16 07/03/16 07/03/16 15/03/16 15/03/16 15/03/16 14/03/16 Total Supplier A Supplier A Supplier A Supplier A Supplier A Supplier A Supplier A Supplier A Supplier A Supplier A Supplier A Purchase Order No.
92991-003816 92991-003820 92991-003821 92991-003822 92991-003823 92991-003824 92991-003825 92991-003872 92991-003872 92991-003872 92991-003862 Total Cost ($) 351,452 351,452 253,462 449,032 170,314 407,950 407,950 42,550 97,680 8,806 52,726 $2,593,374 It is prudent to create balance between need and financial implications of decisions made in state of emergency.
Recommendation The rationale and authority for decisions made in emergency situations which have financial implications should be properly documented for information and records.

Management Comments The decision to purchase family packs was from the Hon.

PM and the AG who is also the Minister of Economy together with the Commissioner West.
18.18.7 Poor Maintenance of Accounting Records The Divisional Emergency Operation Centre (DEOC) is formed to administer and manage the operations of assistance provided to the division.

All requests for assistance, approval, and other details relating to the request for assistance should be facilitated by the DEOC.50 During the five weeks of operations, the audit noted several instances where appropriate supporting documents were not attached when the Purchase Orders were raised for rations.
As a result, the audit could not ascertain whether all requests for the purchase of rations were genuine.

Refer to Appendix 18.7 for examples.

The Finance Team did not comply with its Finance Manual on maintaining proper process of purchases.

Without sufficient supporting documentation, there is a risk of items not delivered, misappropriation of funds and items purchased without immediate need.
50 Standard Operational Procedure for DISMAC Operation Team 2016 _____________________________________________________________________________________________ Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 41 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017______________________________________ Recommendations The Divisional EOC should ensure that:  accounting records and supporting documents are properly filed and made available for audit purpose; and  Going forward, a template should be prepared to document the request or the purpose of the purchase of ration needed, approval and the amount requested for the purchase.
The template should also be attached with a table showing the calculation of how the amount stated in the template or the amount requested to be utilised for the purchase, is calculated.

Management Comments All payments have been done.

However, Audit recommendations are noted.


18.18.8 No Delivery Notes at the District Offices As a control measure that items released from the Warehouse are distributed and received by the end user, a delivery note is filled and signed accordingly with the details of the end user shown in the delivery note.

The audit visit on 23/03/2016 revealed that rations were received at the districts of Ba and Tavua without proper delivery dockets being signed.
Refer to the following for examples:  A total of 23,326 fortnightly family packs costing $956,366 were purchased for the District of Ba.

However, delivery notes were sighted at the Warehouse in Ba for only 9,754 packs.

A total of 13,562 packs worth $556,042 which were said to have been delivered could not be substantiated as delivery notes were not sighted;  A total of 10,952 fortnightly family packs costing $449,032 were purchased for the District of Tavua.
However, delivery notes were sighted at the District for only 8,452 packs.

A total of 3,300 packs worth $135,300 which were said to have been delivered were not supported by delivery notes.

Due to the lack of delivery notes, the audit could not substantiate whether all rations were delivered to the districts.

There is a high risk that pilferage of items occurred during the carting of items from Lautoka to the outer districts.
Recommendations The Divisional EOC Coordinator should ensure that:  Delivery dockets are used for all future distribution of rations and aid items.

 Persons receiving the items should provide the following on the delivery dockets; 1.

Name of person receiving the items 2.

Contact details (mobile) 3.


Actual Time the goods delivered _____________________________________________________________________________________________ Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 42 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017______________________________________ 4.

Signature 5.
Vehicle registration number Management Comments Noted _____________________________________________________________________________________________ Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 43 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017______________________________________ Appendix 18.1: Trust Fund Account – Provincial Development and Prime Ministers Disaster Relief Rehabilitation 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 2016 ($) 2015 ($) --- 64,556 166,245 14,403 --- 40,289 10,898,368 31,770 --- 163 649 238,854 397 152 159,134 1,013,086 27,578 336 Total Receipts 11,215,631 1,440,349 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 Net (Deficit)/Surplus --- 89,039 161,438 --- --- 59,817 12,461,704 61,165 --- 2 34 280,893 505 35 111,343 1,077,198 7,040 3,538 12,833,163 1,480,588 (1,617,532) (40,239) Add Balance as at 1 January 4,612,367 4,101,313 Add: Net Adjustment --- 551,293 Closing Balance as at 31 December 2015 2,994,835 4,612,367 _____________________________________________________________________________________________ Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 44 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017______________________________________ Appendix 18.2: Examples of Journal Vouchers Not Approved Date Journal Voucher No.
26/07/2016 12/08/2016 22/07/2016 No Date No Date No Date 4/01/2016 No Date No Date No Date No Date No Date No Date No Date No Date No Date No Date 27/06/2016 No dates No dates No dates 21/03/2016 7/04/2016 No dates No dates No dates No dates 17/06/2016 23/05/2016 17/06/2016 8/06/2016 23/05/2016 17/03/2016 10/03/2016 1/06/2016 23/05/2016 No date No date 15/03/2016 18/03/2016 21/03/2016 1/04/2016 1/04/2016 No dates No dates 1/06/2016 17/06/2016 BLC1428/07/16 JV26/07/16 BLC1232/07/16 BLC1132/03/16 BLC418/01/16 BLC1273/06/16 JV04/01/16 BLC245/01/16 BLC240/01/16 BLC242/01/16 BLC959/04/16 BLC1117/04/16 BLC304/01/16 BLC337/02/16 BLC344/02/16 BLC346/02/16 BLC1134/06/16 JV 23/6/16 BLC38/3/16 BLC47/3/16 BLC46/3/16 BLC66/3/16 BLC106/4/16 BLC53/3/16 BLC394/4/16 BLC40/3/16 BLC44/3/16 8/06/2016 10/05/2016 9/06/2016 4/06/2016 9/05/2016 1/03/2016 BLC50/3/16 BLC562/6/16 BLC 373/5/16 BLC 41/3/16 BLC 42/3/16 BLC 55/3/16 BLC 65/3/16 BLC 68/3/16 BLC 82/3/16 BLC 83/3/16 BLC 272/5/16 BLC 273/4/16 BLC 560/5/16 BLC 770/6/16 Amount ($) _____________________________________________________________________________________________ Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 45 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017______________________________________ Date Journal Voucher No.
Total (Sample Only) Amount ($) 32,134,053 _____________________________________________________________________________________________ Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 46 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017______________________________________ Appendix 18.3: Anomalies in the Procurement of Goods & Services Date Cheque/ EFT No.
Details Amount $ Remarks Commissioner Eastern Division 17/06/16 12209 Payment for Earthmoving 11,750  No LPO sighted.

 Competitive quotes were not obtained.

18/3/16 12028 Clutch for GP222 2,905 Expenditure charged to SEG 5 instead of SEG 4.

29/6/16 12252 District Fuel Order 2,366 Expenditure charged to SEG 5 instead of Commissioner Central Division 13/07/16 15267 Payment for purchase of 5 x 4 bay mobile compactor 22/07/16 15311 Payment for purchase of laptop for Serua Office SEG 4.
12,000  Chief Accountant’s (Treasury) approval not obtained for advance payment.

 Goods not received as at the date51 of audit.

 Compactors not recorded in fixed asset register.

3,522  Laptops not recorded in fixed asset register.

 No LPO sighted.
 No LPO sighted.

14/07/16 15268 Purchase of outboard engine boat 6,824  No LPO raised since the procurement 13/7/16 2479 8/4/16 2282 01/04/16 15132 14/06/16 2378 Payment for purchase of laptop and desktop computers for CCD & district office Payment for purchase of sofa set and 2 microwave for CCD Office Payment of meal claim was done after the cutoff date for LPO.

 Capital procurement done from SEG 10 instead of SEG 9.

12,420 Laptop and desktop computers not recorded in fixed asset register.
3,037 Sofa set and microwaves not recorded in fixed asset register.

19,215 The meal claim was paid from SEG 1 instead of SEG 3. for PA 11,324  Chief Accountant’s (Treasury) approval Purchase of Tailevu/Rewa office furniture not obtained for advance payment.

 Three (3) quotations were not obtained.

 No LPO sighted.

 Commissioner’s approval not sighted.

 Furniture’s not recorded in fixed asset register.

4,939 Payment made from SEG 5 instead of SEG 3.


1,165 The bill was paid from SEG 5 instead of SEG 3.
Head Quarters 30/6/16 JV35/6/16 7/7/16 4484 Payment of telephone bill for the month of May 2016 Bill for April 2016 20/7/16 34969 Payment of WHT & VRC 5,726 The payment was made from SEG 5 51 31/12/16 _____________________________________________________________________________________________ Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 47 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017______________________________________ Date Cheque/ EFT No.
Details Amount $ Remarks 22/7/16 34983 Refurbishment of library instead of SLG 84 and SEG 13.

10,300 The payment was made from SEG 5 instead of SEG 9.

22/7/16 34992 Refurbishment of library 2,575 The payment was made from SEG 5 22/4/16 4147 Hire of chopper instead of SEG 9.

6,787 The payment was done from SEG 4 (Fuel & Oil – HQ) instead of SEG 7 (TCW allocation).

4,311 Carpets not recorded in fixed asset register.
Purchase of carpets for PS room Purchase of 2 APEX 4 bay mobile compactor – Corporate Section Purchase of 10 office computers 5,000 4 bay mobile compactor not recorded in Fixed Asset Register.

17,300 Computers not recorded in Fixed Asset Register.

Purchase of 4 bay compactor – Accounts Section 4,800  4 bay compactor not recorded in Fixed Asset Register.
22/4/16 11/5/16 20/6/16 15/7/16 4146 4192 4390 4541 15/6/16 4356 Purchase of 6 gas burners 30/6/16 34923 Payment of VAT for the month of May  The payment voucher and supporting documents not stamped paid.

1,372 Gas burners not recorded in fixed asset register.

1,048,750  The Vat was paid from SEG 7 instead of SEG 13.

01/07/2016 34954 22/07/2016 34984 Being payment of Claim No.

6 for the Construction of Kumi Coastal Protection Contract WSC -122/2015 Being payment of Claim No.
7 for the Construction of Kumi Coastal Protection Contract WSC -122/2015.

 Only the sum of $623,735 was journalised to SEG 13 while $425,015 is still to unavailability of fund in SEG 13. voucher in SEG 7 due supporting remains and 46,470 Payment documents not stamped paid.

30,043  Payment voucher and supporting documents not stamped paid.

 Payment voucher not signed by the authorising officer.

18/07/2016 4550 Being payment of Claim No.


04 for the Wainibokasi bank protection WSC 154/2015 river 79,833  Payment voucher and supporting documents not stamped paid.

 Payment voucher not signed by the 22/07/2016 4617 22/07/2016 4617 22/07/2016 4598 Being payment of balance of claim no.

4 for the Wainibokasi river bank protection WSC 154/2015 (balance paid out from Naivakacau Project $31,673.26) Being payment of 5% retention balance of claim No.
4 $31,673.26 WSC 154/2015 Being payment of 5% retention balance of claim No.

1-3 WSC authorising officer.

31,673 Supporting documents not stamped paid.

1,584 Payment voucher and supporting documents not stamped paid.

17,596 Payment voucher not sighted/provided.


_____________________________________________________________________________________________ Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 48 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017______________________________________ Date Cheque/ EFT No.
Details Amount $ Remarks 22/07/2016 34991 22/07/2016 34981 154/2015 Being payment of retention for the 2016 DRR project Being payment of provisional tax for Claim No.

4 balance WSC 154/2015 Being payment of provisional tax for for Multi Works & Viti Vanua contracts WSC 154/2015 & WSC 122/2015 Commissioner Western Division 6/5/16 3490 Supply of tyres GP218 35,677 Payment voucher and supporting documents not stamped paid.

1,453 Payment voucher and supporting documents not stamped paid.
9,330 Payment voucher and supporting documents not stamped paid.

1,119 Expenditure charged to SEG 5 instead of SEG 4.

9/5/16 11/5/16 24/5/16 24/5/16 3503 3515 3608 3608 Recharge cards 110 Expenditure charged to SEG 5 instead of SEG 3.

Service of vehicle GP839 560 Expenditure charged to SEG 5 instead of SEG 4.

4 x new tyres GN485 1,395 Expenditure charged to SEG 5 instead of SEG 4.

Tyres 1000-20-16PR for GN124 1,145 Expenditure charged to SEG 5 instead of SEG 4.
Commissioner Northern Division 23/2/16 20462 Fuel for PA Bua - DISMAC 2,592 Expenditure charged to SEG 5 instead of SEG 4.

23/2/16 20462 5 x 200 litre Diesel - TCW 1,487 Expenditure charged to SEG 5 instead of SEG 4.
1,460,455 _____________________________________________________________________________________________ Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 49 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017______________________________________ Appendix 18.4: Projects with Anomalies under the Self Help Programme in the Central Division Name of Project Poultry Farm Date 07/06/16 03/06/16 22/06/16 22/06/16 Cheque No.
2366 2355 2442 2438 Pond Fish Project 07/06/16 08/07/16 22/06/16 30/06/16 15291 15286 2443 2485 Amount ($) 23,600 Completion certificate not provided as required under section 7.5 of Remarks the SOP for self-help; No monitoring report were provided as required under section 8.1 and 8.2 of the SOP for self-help; The standard project proposal form was filled; however, it was endorsed by the Provincial Administrator on 1/12/15 and not 30/07/15 as stated in the SOP; and The in kind contribution made by the recipient that is labour and a carpenter as stated in the project proposal could not be quantified equivalent to 1/3 contribution while $24,041.95 was funded by the government.
12,166 No monitoring report were provided as required under section 8.1 and 8.2 of the SOP for self-help; The standard project proposal form was not provided as required under section 4.2 of the standard operating procedure for self-help; and The in kind contribution made by the recipient could not be determined as nothing was stated in the project paper as their 1/3 contribution while $13,082.81 was funded by the government.
However during site visit on 13/10/16 the recipient’s confirmed that they did not contribute anything.
Village Engine Project 30/05/16 2344 5,024 Completion certificate not provided as required under section 7.5 of the standard operating procedure for self-help; No monitoring and assessment report were provided as per the standard operating procedure for self-help; The standard project proposal form was filled; however, it was endorsed by the Provincial Administrator on 30/11/15 and not 30/07/15 as required under section 4.2 of the standard operating procedure for self-help; and The unsigned copy of the MOU was provided between the Divisional Commissioner and the recipient.
Sandalwood Nursery 04/07/16 2524 5,208 Completion certificate not provided as required under section 7.5 of the standard operating procedure for self-help; The unsigned copy of the MOU was provided between the Divisional Commissioner and the recipient; No monitoring report were provided as required under section 8.1 and 8.2 of the standard operating procedure for self-help; and The standard project proposal form was filled; however, it was _____________________________________________________________________________________________ Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 50 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017______________________________________ Name of Project Date Cheque No.
Amount ($) Remarks Disable Association endorsed by the Provincial Administrator on 3/12/15 and not 30/07/15 as required under section 4.2 of the standard operating procedure for self-help.
21/07/16 2619 18,343 Completion certificate and financial acquittal not provided as per the standard operating procedure for self-help; No monitoring and assessment report were provided as per the standard operating procedure for self-help; and The standard project proposal form was filled; however, it was endorsed by the Provincial Administrator on 13/4/16 and not 30/07/15 as required under section 4.2 of the standard operating procedure for self-help.
Boat Engine and 05/07/16 2544 16,190 Completion certificate not provided as required under section 7.5 of the standard operating procedure for self-help; No monitoring report were provided as required under section 8.1 and 8.2 of the standard operating procedure for self-help; The standard project proposal form was not provided as required under section 4.2 of the standard operating procedure for self-help; The in-kind contribution from the community was not quantified by the Ministry; and 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.
Total 80,531 _____________________________________________________________________________________________ Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 51 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017______________________________________ Appendix 18.5: Reconciliation of Orders and Invoices for Food Ration Procurements - Commissioner Eastern Division Items LPO No.
/ Date Purchase Order Details Unit cost Amount ($) Quantity ordered (cartons) 1,618 167.1 270,423.49 735664 21/02/16 of Corned beef / mutton of Sub-total for PO 735664 735670 21/02/16 Sub-total for PO 735670 735657 of21/02/16 Sub-total for PO 735657 735667 21/02/16 Sub-total for PO 735667 735651/52/53 of 21/02/16 735651/52/53 of 21/02/16 Sub-total for PO 735651/52/53 of 1,618 433 166.94 270,423.49 72,284.68 433 72,284.68 627 167.1 104,771.70 627 104,771.70 382 166.55 63,622.10 382 63,622.10 0 0 0 0 0 0 0 0 0 Total for Corned beef/ mutton Tin Fish 735664 3,060 3,237 of 511,101.97 163451.69 50.5 Qty.
of cartons supplied (converted) 850 (521) 433 42 (26) 420 (258) 110 169 1,51752 18 123 141 247 247 511 511 336 41 377 2,793 600 Invoice/Delivery details Invoice Amount ($) Invoice No./Date Unit cost D/Docket No./Date Qty.
Excess /(Shortage) cartons supplied for each POs Amount Excess / (Shortage) Invoiced ($) 105.28 161.60 105.44 105.28 176.57 176.68 180.24 180.24 89,484 69,973 4,429 44,216 19,423 29,859 257,383 3,244 22,170 25,414 I748732 of 22/02/16 I748724 of 22/02/16 I748797 of 22/02/16 I748756 of 22/02/16 I748939 of 23/02/16 I749081 of 24/02/16 9218 of 22/02/16 9213 of 22/02/16 9228 of 22/02/16 9221 of 22/02/16 9233 of 23/02/16 9240 of 24/02/16 1750009 of 6/02/16 1749659 of 5/02/16 9250 of 26/02/16 9249 of 25/02/16 180.24 44,520 1749080 of24/02/16 9239 of 24/02/16 (101) (13,040) (292) (46,870.48) 44,520 (380) (60,251.84) 180.24 92,104 1749559 of 5/02/16 9246 of 25/02/16 92,104 129.00 28,481.77 180.24 59,364 1749011 of 3/02/16 9235 of 23/02/16 180.24 7,244 1749056 of 3/02/16 9237 of 23/02/16 66,608 486,029 34,668 57.78 I748730 of 22/02/16 9217 of 22/02/16 377.00 66,607.98 (267) (25,072.74) 52 Converted quantity of cartons received (326grms) _____________________________________________________________________________________________ Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 52 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017______________________________________ Items LPO No.
/ Date 21/02/16 Purchase Order Details Unit cost Amount ($) Quantity ordered (cartons) 38,582 1,023 of of Sub-total for PO 735664 735670 21/02/16 Sub-total for PO 735670 735667 21/02/16 Sub-total for PO 735667 735651/52/53 of 21/02/16 Sub-total for PO 735651/52/53 735657 of 21/02/16 Sub-total for PO 735657 Total for Tin Fish 735664 21/02/16 of Powdered milk Sub-total for PO 735664 735670 of 281 0 0 38,824 0 Qty.
of cartons supplied (converted) 600 300 825 600 766 562 4,253 36 247 283 150 873 Unit cost 57.78 57.78 57.78 57.78 57.78 64.30 64 64 64 64 Invoice/Delivery details Invoice Amount ($) Invoice No./Date D/Docket No./Date Qty.
Excess /(Shortage) cartons supplied for each POs Amount Excess / (Shortage) Invoiced ($) I748740 of 22/02/16 I748756 of 22/02/16 I748726 of 22/02/16 I748729 of 22/02/16 I of 22/02/16 I749437 of 25/02/16 9219 of 22/02/16 9221 of 22/02/16 9215 of 22/02/16 9216 of 22/02/16 9227 of 22/02/16 9245 of 25/02/16 1750009 of 6/02/16 1749659of 25/02/16 9250 of 26/02/16 9249 of 25/02/16 1749559 of25/02/16 1749560 of25/02/16 9246 of 25/02/16 9247 of 25/02/16 34,665 17,334 47,669 34,668 44,260 36,136 249,401 2,315 15,882 18,1927 9,645 56,133 65,778 1,016 85,949 283 18,197 259 27,196 658 58 38,020 1749056 of 23/02/16 9237 of 23/02/16 658 494 494 6,711 88 132 16 88 53 377 4 38,020 658 38,020 64.29 28,544 1749091 of24/02/16 9241 of 24/02/16 64.29 135.51 135.51 135.83 135.79 135.56 135.61 28,544 399,934 11,925 17,887 2,173 11,949 7,185 51,120 542 494 2,710 28,544 197,905 I748730 of 22/02/16 I748724 of 22/02/16 I748740 of 22/02/16 I748729 of 22/02/16 I748939 of 23/02/16 9217 of 22/02/16 9213 of 22/02/16 9219 of 22/02/16 9216 of 22/02/16 9233 of 23/02/16 I750009 of 26/02/16 9250 of 26/02/16 96 12,296 _____________________________________________________________________________________________ Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 53 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017______________________________________ Items LPO No.
/ Date Purchase Order Details Unit cost Amount ($) Quantity ordered (cartons) of 21/02/16 Sub-total for PO 735670 735657 21/02/16 Sub-total for PO 735657 735667 21/02/16 Sub-total for PO 735667 735651/52/53 of 21/02/16 Sub-total for PO 735651/52/53 of Sugar Total for Powdered Milk 735664 21/02/16 735667 21/02/16 735652 21/02/16 Total for Sugar of of of Canola Oil 735664 21/02/16 of Sub-total for PO 735664 735670 21/02/16 of Sub-total for Qty.
of cartons supplied (converted) 22 Invoice/Delivery details Invoice Amount ($) Invoice No./Date Unit cost D/Docket No./Date Qty.
Excess /(Shortage) cartons supplied for each POs Amount Excess / (Shortage) Invoiced ($) 135.61 2,984 I749659 of 25/02/16 9249 of 25/02/16 26 53 53 107 107 138 138 701 100 0 0 100 461 300 114 875 7 51 58 3,526 26 3,526.06 135.61 7,188 I749080 of 24/02/16 9239 of 24/02/16 7,188 53 7,187.75 135.61 14,511 I749559 of 25/02/16 9246 of 25/02/16 14,511 27 3,471.10 135.61 18,715 I749057 of 23/02/16 9238 of 23/02/16 18,715 95,060 79 281 10,538.76 37,019.49 101.42 10,142 I748743 of 22/02/16 9220 of 22/02/16 39.28 39.29 39.43 38.16 38.16 10,142 18,108 11,788 4,495 34,391 267 1,946 2,213 I748797 of 22/02/16 I748725 of 22/02/16 I748939 of 23/02/16 9228 of 22/02/16 9214 of 22/02/16 9233 of 23/02/16 I750009 of 27/03/16 I749659 of 25/02/16 9250 of 26/02/16 9248 of 25/02/16 (14,496) (111,899.1 1) 206 1,768.14 58 2,213.32 _____________________________________________________________________________________________ Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 54 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017______________________________________ Items LPO No.
/ Date Purchase Order Details Unit cost Amount ($) Quantity ordered (cartons) of of PO 735670 735657 21/02/16 Sub-total for PO 735657 735667 21/02/16 Sub-total for PO 735667 735651/52/53 of 21/02/16 Sub-total for PO 735651/52/53 Total for Canola Oil 0 0 0 0 0 152 48.6 7,387 152 187 7,387 48.8 9,109 Qty.

of cartons supplied (converted) 97 97 204 204 149 Invoice/Delivery details Invoice Amount ($) Invoice No./Date Unit cost D/Docket No./Date Qty.
Excess /(Shortage) cartons supplied for each POs Amount Excess / (Shortage) Invoiced ($) 38.16 3,812 I749091 of 24/02/16 9241 of 24/02/16 3,812 97 3,811.57 39.29 8,016 I749670 of 25/02/16 9251/9252 of 25/02/16 8016 52 628.88 39.32 5,858 I749057 of 23/02/16 9238 of 23/02/16 187 1,007 48.8 9,109 49,119 149 1,383 5,858 54,290 (38) 376 (3,250.98) 5,170.93 _____________________________________________________________________________________________ Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 55 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017______________________________________ Appendix 18.6: Invoice Different from Purchase Order PO No.
PURCHASE ORDER INVOICE Items Unit Qty VIP Amount ($) Items Unit Qty VIP Variance ($) Amount ($) Comments Normal Flour 50kg 965 58.47 56,423.55 Normal Flour 50kg 673 58.47 39,348.69 Tuna Cartons 2009 59.23 118,993.07 92991-3731 - Ocean Mack in N/Oil Ocean Mack in T/Sauce 24x410gm 745 67.44 50,241.53 24x410gm 1264 66.48 84,029.58 Sugar Sugar - Sugar 6x4kg 1127 46.8 52,748.78 50kg 481 79 37,999.00 Sugar 50kg 38 78.99 3,001.71 92991-3763 Sugar 48kg 59 46.8 2,761.20 Sugar 50kg 35 79 2,765.11 92991-3742 Tin Fish Carton 862 67.44 58,133.28 Ocean Mack in T/Sauce 24x410gm 862 66.48 57,304.98 84,029.58 52,748.78 (68,751.54) (17,074.86) The invoice increased by $15,934.47 compared to the PO; The increase was due to items supplied differed from items ordered; No documentation of approval was provided for the difference in items ordered against items supplied; Tuna price increased by $8; The Summary of Invoice worked out by the Supplier was $513.15 more than the audit.
At the same cost $2,765.11, Supplier A supplied only 1750kg at 35 bags of 50kg; The Order was for 59 bags of 48kg sugar totalling 2832kg; The prices differed in the supply of Tinned fish because the order was Tuna whilst Ocean Mack was supplied.

(34,997.29) (828.3) 3.91 92991-3708 Sugar 50kg 6 79 474 Sugar 50kg 6 87.67 526.01 52.01 Supplier A charged $87.67 for 6 bags instead of $79.

Hence Sugar total cost increased by $52.44.


Flour Milk Tin Fish 50kg 120 58.47 7,016.40 Flour 63 115.2 7,257.60 Milk 250 67.44 16,860.00 Ocean Mack in T/Sauce 50kg 24x450gm 116 61 58.47 6,782.24 115.2 7,027.33 24x410gm 242 66.48 16,087.94 (234.16) Some items were short supplied whilst others were supplied more $7519.60.

However there was no documented approval of the variance in items.
(230.27) (772.06) 92991-3730 Oil Cartons 200 52.5 10,500.00 Oil (Soya Bean) 97 52.3 5,073.42 (5,426.58) Rice Split Peas Sugar 45kg 25kg 50kg 266 120 60 49 13,034.00 Rice 43.5 79 5,220.00 Split Peas 4,740.00 Sugar 45kg 25kg 50kg 257 116 58 49 12,591.84 (442.16) 42.79 4,963.45 (256.55) 79 4,582.19 (157.81) _____________________________________________________________________________________________ Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 56 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017______________________________________ PO No.
92991-3670 (Manual PO 735358) PURCHASE ORDER INVOICE Items Unit Qty VIP Amount ($) Items Unit Qty VIP Variance ($) Amount ($) Comments Sugar 50kg 89 79 7,031.00 Sugar 50kg 41 79 3,239.13 (3,791.87) The Tin Tuna 739 54.34 40,157.26 Sunbell Tuna 48x170gm 700 59.23 41,461.42 1,304.16 Milk 92 115.2 10,598.40 Milk 0 (10,598.40) - the noted following audit differences' - Sugar Sort supplied by 48 bags; - Tuna short supplied by 39 cartons; - Milk no supply of 92 cartons worth $10,598; - Tuna unit price increased by $5.
_____________________________________________________________________________________________ Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 57 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ____________________________ Appendix18.7: Examples of Purchases Made Without Appropriate Supporting Documents Date Total Cost ($) Purchase Order No.
24/02/16 109,872.94 PO92991-003670 Anomalies  Invoice not completely provided;  Delivery did not specify what items were delivered.

It stated pallets of goods;  Delivery did not specify what items were delivered.

It stated pallets of goods; 29/02/16 29/02/16 39,062.18 PO92991-003727 284,530.53 PO92991-003730  No details of ration given and how the amount was calculated, i.e.
Population in 29/02/16 29/02/16 01.03.16 460,513.42 PO92991-003731 284,632.50 PO92991-003740 222,673.36 92991-003742 villages, settlements, content of ration and its quantity;  Delivery notes were not signed to acknowledge receipt  Table to show calculation did not tie with the amount in the Request form and PO.

 Calculation showing in the table does not tie with the request form and the PO.
 No table to show calculation;  Invoice attached and had a variance due to different supply in Tinned fish type.

There was no approval from authority for the supply of different type of Tuna.

 No delivery notes attached 2/3/2016 38,853.13 PO92991-003762  No invoice attached;  No delivery note attached.

2/3/2016 2/3/2016 56,829.21 PO92991-003763  Delivery note did not state what items were delivered.
64,628.00 PO92991-003770  Calculation showing in the table did not tie with the request form and the PO.

07/03/2016 351,452 PO92991-003816  No invoice attached;  No delivery note attached.

07/03/2016 351,452 PO92991-003820  No invoice attached;  No delivery note attached.

07/03/2016 253,462 PO92991-003821  No invoice attached;  No delivery note attached.

07/03/2016 449,032 PO92991-003822  No invoice attached;  No delivery note attached.
07/03/2016 170,314 PO92991-003823  Table showing calculation did not tie with PO;  No invoice attached;  No delivery note attached.

07/03/2016 407,950 PO92991-003824  Table showing calculation did not tie with PO;  No invoice attached;  No delivery note attached.

07/03/2016 407,950 PO92991-003825  No invoice attached; 15/03/2016 149,036 PO92991-003872  No invoice attached; 14/03/2016 52,726 PO92991-003862  No invoice attached;  No delivery note attached.

 No delivery note attached.


Ministry of Rural and Maritime Development and National Disaster Management Section 18: Page 58 REPORT OF THE AUDITOR GENERALOF THE REPUBLIC OF FIJI – JUNE 2017________________________________ Section 19 Fiji Military Forces Role and Responsibilities The RFMF is charged with, and responsible for the defence and state security of Fiji, in the maintenance of Law and Order in land and sea and provision of maritime surveillance of Fiji’s maritime zone.
It improves the living standards of rural community through infrastructure development and youth training of life skills provided by the Engineering Corp through its Trade Training.

It also provides services to mariners through the coastal radio station (Suva Radio 3DP) for all vessels within Fiji waters as required under the International Law of the Sea and the surveying and charting of Fiji’s Exclusive Economic Zone.
Table of Contents PART A: FINANCIAL STATEMENTS ..................................................................................................... 2 19.1 Audit Opinion ............................................................................................................................ 2 19.2 Statement of Receipts and Expenditure ................................................................................... 2 19.3 Appropriation Statement ........................................................................................................... 3 19.4 Consolidated Trading and Manufacturing Account .................................................................. 4 PART B: AUDIT FINDINGS .................................................................................................................... 6 19.5 Governance Issues ................................................................................................................... 6 19.6 Operating Fund Account (OFA) ................................................................................................ 7 19.6.1 Weaknesses in Internal Control for OFA .......................................................................................................... 7 Naval Division ................................................................................................................................................... 9 19.6.2 19.6.3 Capital Construction ....................................................................................................................................... 12 19.6.4 Weak Internal Controls in the Management of Food Rations ......................................................................... 17 Breach of Government Tender Board Approval ............................................................................................. 18 19.6.5 Adopt a School Program ................................................................................................................................ 19 19.6.6
19 19.6.6 Purchase in excess of tendered amount ........................................................................................................ 20 19.6.7 Sea freight payments ...................................................................................................................................... 21 19.6.8 Variances in Payroll ........................................................................................................................................ 22 19.6.9 Revenue not fairly stated in the Financial Statements .............................................................................. 23 19.6.10 Anomalies in Underline Accounts .............................................................................................................. 24 19.6.11 19.7 Trading and Manufacturing Account ....................................................................................... 26 19.7.1 Weaknesses in Internal Control for TMA ........................................................................................................ 26 19.7.2 Weaknesses in Fuel Management ................................................................................................................. 27 Anomalies in Trading and Manufacturing Activity – Plant Pool and Hydrographic ......................................... 29 19.7.3 19.8 Project Account ....................................................................................................................... 30 19.8.1 Weaknesses in Internal Control for Project Account ...................................................................................... 30 19.9 Farm Account ......................................................................................................................... 32 19.9.1 Weakness in the Internal Control for Farm Account ....................................................................................... 32 Gift of $100,000 not deposited in the Consolidated Fund Account
 ................................................................ 34 19.9.2 19.10 Follow Up On Previous Year Accounting and Control Anomalies Raised ............................. 35 Timelines for Reconciliations submitted to Ministry of Finance ...................................................... 38 Details of Payment to various contractors for LEP of Vessel Kikau ............................................... 39 Status Work by Contractor A for LEP of RFNS Kikau and Pictures of Vessel ................................ 40 Pictures of RFNS Kikau as at the date of audit visit – 25/10/16 ..................................................... 41 Details retention paid before the defect liability period ................................................................... 42 Examples of rations purchased during the year ............................................................................. 43 Details of Manual Payments ........................................................................................................... 44 Summary of Claims Made by Farm Manager ................................................................................. 46 Items Not Taken On Charge ........................................................................................................... 47 Appendix 19.1 Appendix 19.2 Appendix 19.3 Appendix 19.4 Appendix 19.5 Appendix 19.6 Appendix 19.7 Appendix 19.8 Appendix 19.9 Republic of Fiji Military Forces Section 19 Page 1 REPORT OF THE AUDITOR GENERALOF THE REPUBLIC OF FIJI – JUNE 2017________________________________ Appendix 19.10 Purchases from a Pharmaceutical Company ................................................................................. 48 PART A: FINANCIAL STATEMENTS 19.1 Audit Opinion The audit of the 2016 accounts of the Republic of Fiji Military Forces resulted in the issue of a qualified audit opinion.
The qualification issues are as follows: 1.

Included in Total Revenue in the Statement of Receipts and Expenditure is VAT on revenue due from FRCA amounting to $29,852.

VAT receivables are only recognised under accrual basis and not under the cash basis of accounting.

Consequently, Total Revenue in the Statement of Receipts and Expenditure of $239,845 is overstated by $29,852.

2.

Included in Sales (Plant Hire) in the Consolidated TMA Trading Account is revenue amounting to $36,570 collected in 2015.
The amount was directly deposited in the bank account in 2015 but was recorded in the FMIS general ledger in 2016.

Consequently, the Sales amount of $68,478 in the Consolidated TMA Trading Account is overstated by $36,570.

3.

There was no independent audit verification carried out for the Inventory account balance of $25,362 in the Consolidated TMA Balance Sheet as at 31 July 2016.

The balance increased although there was no activity in the Manufacturing account.
Consequently, I could not confirm the accuracy and completeness of inventory amount.

4.

The RFMF did not include as part of the Financial Statements the Trust Fund Account Statement of Receipts and Payments for Engineers Project Fund Account with payments totalling $387,487 for the period ended 31 July 2016.

The Project Fund Account transactions were not recorded in the FMIS general ledger.
Without further qualifying the accounts, attention were drawn to the following matters:  The RFMF did not carry out a board of survey to verify the existence and condition of assets under its authority contrary to Section 49 of the Finance Instructions 2010.

 Internal controls in the critical areas of the RFMF’s operations were generally found to be weak and if not addressed promptly may result in financial losses in the near future.
19.2 Statement of Receipts and Expenditure The Republic of Fiji Military Forces recorded revenue totalling $239,845 and incurred expenditure totalling $54,271,941 for the seven months period ended 31 July 2016.

Refer to Table 19.1 for details of revenue collected and expenditure incurred during the year.
Republic of Fiji Military Forces Section 19 Page 2 REPORT OF THE AUDITOR GENERALOF THE REPUBLIC OF FIJI – JUNE 2017________________________________ Table 19.1: Statement of Receipts and Expenditure for 2016 Description RECEIPTS State Revenue Agency Revenue TOTAL REVENUE EXPENDITURE Operating Expenditure 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 Construction Purchases Total Capital Expenditure 31 July 2016 ($) 31 December 2015 ($) 158,215 81,630 239,845 224,420 210,481 434,901 40,997,731 198,841 1,228,969 2,521,670 3,990,946 -- 1,594,725 50,532,882 66,433,336 358,572 1,632,985 2,744,631 4,932,234 -- 1,729,613 77,831,371 1,228,066 1,508,146 2,736,212 2,902,607 2,046,969 4,949,576 Value Added Tax 1,002,847 2,310,812 TOTAL EXPENDITURE 54,271,941 85,091,759 The financial year end for Government was changed from 31 December to 31 July as stipulated in the Financial Management (Amendment) Act 2016.
The financial statement for the period ended 2016 reflect transactions for a seven-month period whereas the financial statements for the year ended 2015 is for a twelve month period, thus the significant variances with comparative balances.

The increase in expenditure for Travelling and Communication was due to deployment of personnel for Tropical Cyclone Winston Rehabilitation works in affected areas.
19.3 Appropriation Statement The Republic of Fiji Military Force incurred expenditure totalling $54,271,941 against a revised budget of $93,557,733 resulting in savings of $39,285,792 or 42%.

The significant savings was primarily due to the budget being for twelve months while expenditures incurred were only for the seven months up to 31 July 2016.

Details of expenditure against the budget estimates are provided in Table 19.2.
Republic of Fiji Military Forces Section 19 Page 3 REPORT OF THE AUDITOR GENERALOF THE REPUBLIC OF FIJI – JUNE 2017________________________________ Table 19.2: Appropriation Statement for 2016 SEG Item 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 Budget Estimate ($) Changes ($) Revised Estimate ($) Actual Expenditure ($) Lapsed Appropriation ($) 74,550,391 256,531 1,231,890 4,176,710 5,342,511 --- 1,383,000 86,941,033 4,250,000 818,400 5,068,400 1,548,300 93,557,733 (1,768,000) --- 267,000 (362,000) (214,500) --- 627,500 (1,450,000) --- 1,450,000 1,450,000 --- --- 72,782,391 256,531 1,498,890 3,814,710 5,128,011 --- 2,010,500 85,491,033 4,250,000 2,268,400 6,518,400 1,548,300 93,557,733 40,997,731 198,841 1,228,969 2,521,670 3,990,946 --- 1,594,725 50,532,882 1,228,066 1,508,146 2,736,212 1,002,847 54,271,941 31,784,660 57,690 269,921 1,293,040 1,137,065 --- 415,775 34,958,151 3,021,934 760,254 3,782,188 545,453 39,285,792 19.4 Consolidated Trading and Manufacturing Account Table 19.3: Manufacturing Account Manufacturing Account Opening Raw Material Add: Purchases Less: Closing Raw Materials Raw Material Used Add: Direct Labour Cost of Goods Manufactured transferred to Trading Account Table 19.4: Trading Account Trading Account Sales Opening Finished Goods Add: Cost of Manufactured Goods Less: Closing Finished Goods Cost of Goods Sold Gross Profit/(Loss) transferred to Profit & Loss Statement 2016 ($) 2015 ($) -- -- -- -- -- -- -- 5,387 -- 5,387 -- 5,387 -- 5,387 2016 ($) 68,478 23,342 -- 23,342 25,362 (2,020) 70,498 2015 ($) 960,822 13,016 5,387 18,403 23,342 (4,939) 965,761 Total sales decreased by $892,344 or 93% in 2016 as resources were deployed for Tropical Cyclone Winston Rehabilitation works.
Republic of Fiji Military Forces Section 19 Page 4 REPORT OF THE AUDITOR GENERALOF THE REPUBLIC OF FIJI – JUNE 2017________________________________ Table 19.5: Profit & Loss Statement Profit and Loss Statement Income Gross Profit transferred from Trading A/C Other Income Total Income Expenses Maintenance & Operation Other Expenses Special Expenses Total Expense Net Profit/(Loss) Table 19.6: Balance Sheet Balance Sheet Assets Cash at Bank Accounts Receivable Inventory VAT Receivable Total Assets Equity TMA Accumulated Surplus Transfers to Consolidated Fund Net Loss for the Period Total Equity 2016 ($) 2015 ($) 70,498 -- 70,498 141,721 127,096 -- 268,817 (198,319) 965,761 -- 965,761 483,664 496,491 53 980,208 (14,447) 2016 ($) 2015 ($) 669,224 290 25,362 143,250 838,126 1,077,195 (40,750) (198,319) 838,126 928,691 290 23,342 124,872 1,077,195 1,154,274 (62,632) (14,447) 1,077,195 Cash at bank decreased by $259,467 or 28% in 2016 as funds were utilised for ongoing projects from previous years.
Republic of Fiji Military Forces Section 19 Page 5 REPORT OF THE AUDITOR GENERALOF THE REPUBLIC OF FIJI – JUNE 2017________________________________ PART B: AUDIT FINDINGS 19.5 Governance Issues Permanent Secretaries and Heads of Departments are required to submit Annual Reports by the 31st of January of the following year and for tabling in Cabinet.
Annual Reports must be prepared by all Ministries and Departments and submitted to their respective Ministers.1 The Director Finance Logistics and Acquisition (DFLA) must ensure that the agency internal control system is reviewed on a regular basis to ensure that they are meeting the intended purpose.2 The following governance issues were noted:  RFMF is yet to prepare and submit its Annual Report for 2014 and 2015 to the Minister;  Internal controls were generally found to be weak or deficient.
Refer to Paragraph 19.6.1, 19.6.4, 19.7.1, 19.7.2, 19.8.1, and 19.9.1 for details.

Furthermore, some of the matters highlighted in 2015 audit reports are yet to be resolved.

Refer to Paragraph 19.10 for details; and  Compliance Unit of RFMF is understaffed hence is unable to effectively cover the scope of RFMF’s activities.

Without the annual report, the Minister will not be able to assess the performance of the RFMF.
Moreover, the inadequate resources in the Compliance Unit will hamper the effective and efficient operation of the Unit which assists Management in proper maintenance of controls.

Recommendations The Force must ensure that:  Annual Reports are prepared and submitted to the Minister on a timely basis;  the Compliance Unit is properly resourced; and  Management takes appropriate action to strengthen internal controls and improve compliance.

Management Comments OAG findings and recommendations are noted.
Annual Report Due to rapid staff officer turnover, the report was overlooked.

The Force will compile its annual report for 2014 and 2015 and submit this to the Minister, furthermore RFMF will ensure annual reports are prepared and submitted on time; Weak Internal Control The RFMF is now strengthening its internal control by reviewing its Standing Orders Volume 2 which was last reviewed 19 years ago, RFMF Finance Manual and relevant instructions.
The review will be in line with current changes on government policies and regulations.

1 General Order No 118 2 RFMF Finance Manual 2014 – Part 17.3.1 Republic of Fiji Military Forces Section 19 Page 6 REPORT OF THE AUDITOR GENERALOF THE REPUBLIC OF FIJI – JUNE 2017________________________________ Compliance Unit The Force is now shortlisting applicants of its two vacant posts for the Compliance Unit to perform audit functions effectively as recommended.
19.6 Operating Fund Account (OFA) The RFMF incurred expenditure totalling $54,271,941 in 2016 against the budget of $93,557,733 resulting in savings of $39,285,792 or 42%.

The following highlights the audit findings relating to OFA.

19.6.1 Weaknesses in Internal Control for OFA The Accounting Head of an agency is responsible to the Permanent Secretary for the effective design and operation of internal controls across the agency3.
All property, plant or equipment with a value in excess of $2,000 or more must be recorded in the assets module of the FMIS and the asset register.4 An annual board of survey must be conducted each year to verify the existence and condition of assets recorded on the asset register.5 All Permanent Secretaries and Head of Department are required to submit monthly reconciliations to the Ministry of Finance by the 15th of each month.6 The Staff Officer Mobility shall prepare a quarterly vehicle report on all agency vehicles.7 A copy of the report shall be forwarded to the Ministry of Finance no later than two weeks after the end of the quarter.8 Chief Staff Officer Finance must ensure that payments documents are processed correctly by having different officers assigned to approving invoices for payments; reviewing and reconciling financial records before payments are done and signing cheques.9 The Staff Officer Accounts shall maintain a revenue collector’s chart to monitor the regularity of revenue lodged by the Navy/Strategic Headquarters/ Engineer revenue collectors.10 Audit review of the system of internal controls revealed the following weaknesses:  RFMF purchased tents, photocopiers, generators, weapons and communications equipment at a total cost of $1,436,471.04 which were not recorded in the Fixed Asset Register (FAR).
Refer to Table 19.7 for examples.

Table 19.7: Examples of Equipment’s not updated in FAR Date Cheque No.
23/03/16 13387 Particulars 40 men tent x 4 Amount ($) 60,000.00 3 Finance Instruction 2010 – Section 59 4 Finance Instruction 2010 – Section 46(1) 5 Finance Instruction 2010 – Section 49(1) 6 Finance Circular No.2/13 7 RFMF Finance Manual – Part 12.7.1 8 RFMF Finance Manual – Part 12.7.4 9 RFMF Finance Manual – Part 17.2.1 10 RFMF Finance Manual 2014 – Part 5.6.1 Republic of Fiji Military Forces Section 19 Page 7 REPORT OF THE AUDITOR GENERALOF THE REPUBLIC OF FIJI – JUNE 2017________________________________ Date Cheque No.
29/03/16 13466 06/06/16 14608 20/06/16 15100 30/06/16 15326 20/07/16 74728 6/6/2016 74505 20/07/16 74729 TOTAL Particulars 20 men tent x 4 Photocopier Generator 40 men tent x1, 20 men tent x 1 Weapons Communications equipment Amount ($) 30,000.00 7,760.00 43,990.83 45,000.00 888,913.88 178,465.16 182,341.17 1,436,471.04 Moreover, the annual board of survey of fixed assets was not conducted for the financial year ending 31 July, 2016.
Therefore, these indicate the inadequate system of controls in the management of fixed assets to ascertain its existence in “good” condition or that is impaired.

Furthermore, audit could not substantiate the completeness of the Statement of Losses.

 Monthly underline reconciliations were not submitted to the Ministry of Economy on a timely basis.

Refer to Appendix 19.1 for details.

Similarly, quarterly vehicle reports were also not prepared and submitted to Ministry of Economy.
 There was no segregation of duties.

The authorised cheque signatories (EDP No.

53431, SB320, 60067 and RT471) for the RFMF Drawings Account11 are the same officers assigned to approve invoices for payments, reviewing and reconciling of financial records before payments are done.

 The revenue collector’s chart for monitoring of revenue collection was not maintained.

 The person to post listings/line and column was last updated by the Human Resource Section in 2014.
In addition, there is no consolidated approved listings of officers (master record of authorised officers) entitled for the various allowances.

As such, audit could not ascertain the completeness and accuracy of payroll.

The above findings indicate non-compliance by the Force with established policies and procedures pertaining to proper financial management and control.
Recommendations The Force should ensure that:  assets with a value in excess of $2,000 is recorded in the fixed asset register and annual board of survey is conducted for fixed assets;  monthly reconciliation is submitted to Ministry of Economy before the 15th of each month;  quarterly vehicle reports are prepared and submitted to Ministry of Economy for monitoring purposes;  work of officers in critical functions are properly segregated;  revenue collector’s chart is maintained; and  Person to Post Listing/Line and Column is updated and consolidated approved listings of officers entitled for the variance allowances are maintained and checked against payroll; 11 Bank of South Pacific Republic of Fiji Military Forces Section 19 Page 8 REPORT OF THE AUDITOR GENERALOF THE REPUBLIC OF FIJI – JUNE 2017________________________________ Management Comments OAG findings and recommendations are acknowledged.
 The fixed asset register is maintained and monitored by the Force Inventory Management Cell at Headquarter.

The IMC will be conducting stock take checks to all RFMF Units to update and confirm assets holdings from 15th May to 27th June 2017; (A copy of HQ stock takes had been forwarded to the OAG )  During the closure of an accounting period, it took FMIS 3-5 months to completely close the accounts and this affects the due date of the submission of monthly reconciliations to MoE.
However monthly reconciliations for financial ending period 31 July 2016 has been submitted to MoE and officers concerned are advised to prepare and submit monthly reconciliations to MoE before the 15th of each month;  Quarterly vehicle report will be prepared by the Logistic Support Unit of the RFMF and submitted to HQ RFMF through Chief Staff Officer Logistics for submission to MoE;  Change of signatories as recommended will be formalized and OAG will be advised accordingly.
 Revenue collector’s chart was maintained when Navy was also authorized to collect revenue.

Currently there is only one revenue collector at RFMF and that is at Strategic HQ’s.
 The implementation policy on RFMF Working Reorganization Structure have been approved by the Commander RFMF on 08 Dec 2016 whereby Line in Column will be updated accordingly with associated entitlements;(Copy of the approved restructure had being given to OAG office) and  The Force is working according to its approved establishment and OAG recommendation is noted.

19.6.2 Naval Division Physical assets provide a vital resource base that supports the delivery of outputs by the agency.
Therefore it is important to ensure that assets are safeguarded and properly maintained, assets are used for official purposes only and used efficiently.12 The following discrepancies were noted from audit review of records relating to naval vessels: 19.6.2.1 State of Naval Vessels The audit noted that only two from the five vessels owned by Fiji Navy are fully operational.

Refer to Table 19.8 for details.

Table 19.8: State of Fiji Naval Vessels as at 25th October 2016.
Navy Vessel Name Donation/Bought RFNS Kula RFNS Kikau Donated by the Australian Government in 1995.

RFNS Kiro RFNS Lautoka RFNS Levuka Bought by the Government of Fiji – 1985.

State of Vessels Operating.

RFNS Kikau has been the Life Expectancy Program (LEP) since early 2013 and as of the date of audit visit,13 the vessel is still under renovation and not operational.

RFNS Kiro ran aground on Cakauyawa Reef, off Makuluva Island on July 15, 2016 and several attempts made to salvage had been unsuccessful.
Operating.

RFNF Levuka is facing mechanical difficulties and is not fully 12 RFMF Finance Manual – Part 11: Property, Plant & Equipment 13 Tuesday 25th October, 2016.

Republic of Fiji Military Forces Section 19 Page 9 REPORT OF THE AUDITOR GENERALOF THE REPUBLIC OF FIJI – JUNE 2017________________________________ Navy Vessel Name Donation/Bought State of Vessels operational.

Moreover, since 2013, a budget of $2 million has been allocated annually for Kiro Patrol Boat Life Extension Programme.
However, the funds were not utilised and was returned to the Ministry of Economy at the end of each financial year.

The vessel ran aground on July 15, 2016 and attempts made to salvage the vessel have been unsuccessful.

Furthermore, although, the RFMF has spent a total of $1,882,394 from 2013 to July 2016 for the Life Expectancy Program of vessel RFNS Kikau, the vessel remains inoperative.14 Refer to Appendix 19.2 for details of payments.
The above findings indicate the lack of priority placed in the Life Expectancy Programmes of vessels placing strain on the vessels which are operating.

19.6.2.2 Incomplete Work on Life Expectancy Program A sum of $2million was allocated in the 2013 budget for the Life Expectancy Programme for the maintenance and upgrading of the naval ship RFNS Kikau.
Contrary to the payment schedule in the contract15, the Commander of Fiji Navy approved the final payment16 of $119,110 to the contractor following the recommendation from Officer No 3089.

The audit noted that the RFMF paid the contractor the contract amount of $549,146.

However, 78 percent of the contractual scope of works valued at $427,428 was not performed by the contractor.
Refer to Appendix 19.3 for details of incomplete work and Appendix 19.4 for the pictures portraying the state of the vessel as at 25th October, 2016.

Furthermore, the clause for delay/liquidated damages is not incorporated in the contract; as a result the RFMF was unable to claim the delay damages from the contractors that failed to complete the work within the agreed timeline.17 The above findings indicate that there is a lack of proper planning and monitoring for the upgrading of the vessels.
This has led to the considerable delay in the upgrading works and payment to the contractor for the incomplete works resulting in value of service not being obtained for public funds totalling $1.9 million.

(Appendix 19.2) 19.6.2.3 Waiver of Tender The Government Tender Board approved the waiver of tender for slipping of RFNS Kiro on 15th February 2016.
The audit noted that the RFMF engaged the contractor on 20th November, 201518 to 8th December, 201519 prior to the approval of the Government Tender Board.

A total of $283,351.9520 was paid to the contractor following the approval of the Government Tender Board.
14 As at date of audit – 25th October, 2016 15 Contract of Work between RFMF & Contractor signed on 09/10/2013 for RFNS Vessel Kikau LEP 16 Dated – 13th July, 2016 17 The contract is effective from 1 November 2013 to 31 January 2014 18 Purchase Order No: 19105-011772 Approved By: 19 Invoice No: 22017 and 22018 20 EFT No: 13094 – Dated 2nd March, 2016 Republic of Fiji Military Forces Section 19 Page 10 REPORT OF THE AUDITOR GENERALOF THE REPUBLIC OF FIJI – JUNE 2017________________________________ It is evident that the request for the waving of tender was made to regularise the procurement process and facilitate the payments to the contractor.
Recommendations The RFMF should ensure that:  all capital projects are properly planned and implemented within the year in which funds are provided;    investigation is carried out to determine the reasons the projects were not properly monitored; important clauses such as delay damages claim are included in the contract; and instructions stipulated in the Procurement Regulations are complied with.

Management Comments State of Naval Vessels OAG Findings and Recommendations are acknowledged.
In 2010, the Pacific Patrol Boats (PPB) Class RFNS Kiro was due for it Life Extension Program (LEP) refit works.

The progress of the LEP project was however greatly hampered by: i. the departure from the project in late 2012 of the Australian Project Consultant who had vast experience in PPBLEP; and ii.
the sanctions by the Australian Government on all assistance render to the LEP Project by all Australian commercial company that the Fiji Navy was engaging given that the vessel was built in Australia and had all the spare and maintenance parts for the projects.

The Fiji Navy was left with no choice but to seek other alternative service providers locally to carry out the project.
Given the magnitude of the project and the cost involved proper due diligence had to be done, apart from the extensive search, for reputable naval architectural, engineering and associated technical experience to be engaged for the project.

This process took the Navy approximately 8 months to establish in which some local companies were identified.
It took another 8 months to carry out the administrative work such as preparing of Scope of Works, drawing up of MOU and vetting by the Solicitor General’s Office.

The time span it took to complete all these activities exceeded the government financial year and it was unfortunate that funds cannot be rolled over to the next financial year.

These are main circumstances and reasons the Fiji Navy did not fully utilised the $2 million funds which it was budgeted for in 2013 for the LEP Project.
Incomplete Work on Life Extension Program OAG findings and recommendations are noted.

The Fiji Navy encountered some unforeseen problems with LEP Kikau’s contract whereby different companies were supplying different parts and work services for the overall implementation of project.
It is to be noted that the different parts and works/services complemented each other for instance the company that will install the bridge equipment will depend on the completion and installation of air condition units by another company.

At times the pre-requisite works required for the progress of subsequent works which at times have no available parts from the contracted supplier hinders the continuity and progress of the overall project.
Republic of Fiji Military Forces Section 19 Page 11 REPORT OF THE AUDITOR GENERALOF THE REPUBLIC OF FIJI – JUNE 2017________________________________ During the final stages of procurement of engine parts from overseas, and with other related works/services being put on hold pending the instalment of the engine, the Australian government offered to complete the refit.

All works were thus ceased so that a technical inspection is carried out to determine the work required to be done by the Australians.
Hence the status of the project when the audit inspection was carried out by the OAG.

The vessel has been sea-lifted to Australia in April and is currently undergoing refit.

Waiver of Tender The GTB Award was made to regularise the procurement process since the works have already been carried out on RFNS Kiro.

In 2014, the Navy had only 1 operational vessel from its fleet of 5 vessels.
This was an operationally critical time for the Navy given the vast maritime demand in the conduct of EEZ Patrols, conduct of maritime emergency Search and Rescue operations, and standing by for Humanitarian Assistance and Disaster Relief (HADR) in the event it is activated.

It was a situation where they need to hasten all processes in order to have the vessel operational again in the shortest possible time before any unforeseen circumstances or events occurs urgently demanding the Navy’s service.
Awaiting GTB approval hence was not an operational option.

Besides there are stringent timeliness in undergoing slipping since this is based on placement.

The way forward for the Navy is as follows: i. preliminary assessment works will be thoroughly conducted so that the Scope of Works can be fully ascertained so that costs can be more accurately estimated; ii.

only one company to be contracted so that the company will be held responsible and accountable if there is any breach in contract.
Furthermore a liquidity clause will be included in the contract; iii.

payments to be divided into Payment Schedules, subject to completion of phases; iv.

timely provision of progress reports will be submitted to CMDR RFMF; and v. contingency costing is to be included in the contract to cater for any variation which may arise.

19.6.3 Capital Construction A budget of $4.3 million was allocated to RFMF for capital construction.
The following discrepancies were noted from audit review of capital construction projects.

19.6.3.1.
Splitting of Contracts Splitting of contracts - means dividing contracts into smaller quantities and amounts, or dividing contract implementation into artificial phases or subcontracts, for the purpose of making it fall below the threshold requiring legislated procurement approval or circumvent the requirement of public bidding for procurements over $50,000 VIP.21 In order to differentiate and identify a split, the procurement would be classed under one of the following criteria; dividing contract implementation into artificial phases or sub-contracts for the purpose of evading or circumventing the requirements of the regulations.22 The audit noted that RFMF breached the purchasing procedures by splitting contracts into subcontracts to avoid the tender process.
Refer to Table 19.9 for details.

Table 19.9: Details of Split Projects.

Project Contractor Sub Contract Project Cost ($) Date of signing contract Renovations Contractor Re-roofing of Other 37,790 04.02.16 Total Cost Competitive Quotations were also obtained from ($) 117,540 Contractor No.1 $39,600 21 Ministry of Finance Splitting of Contracts Policy 2014 – Paragraph No.

5.1 22 Ministry of Finance Splitting of Contracts Policy 2014 – Paragraph No.
6.1(v) Republic of Fiji Military Forces Section 19 Page 12 REPORT OF THE AUDITOR GENERALOF THE REPUBLIC OF FIJI – JUNE 2017________________________________ Project Contractor Sub Contract Project Cost ($) Date of signing contract Total Cost ($) Competitive Quotations were also obtained from No.

3 Contractor No.

3 Contractor No.

2 Contractor No.

2 Contractor No.

2 Contractor No.

2 Contractor No.

3 Contractor No.

2 Contractor No.
3 to Other Ranks Mess (Queen Elizabeth Barracks, Nabua) Extension of Quartermaster s Store (Engineers) Upgrade of Married Quarters (Force Training Group) Renovations to Married Quarters (Queen Elizabeth Barracks, Nabua) Total Ranks Mess Bar Re-roofing of Other Ranks Mess Dining Hall Tiling of Other Ranks Mess Dining Hall Extension of Quartermasters Store Phase 1 Extension of Quartermaster’s Store Phase 2 Upgrade of Married Quarters 42 Upgrade of Married Quarters 43 Upgrade of Married Quarters 4 Upgrade of Married Quarters 9 42,750 04.02.16 37,000 06.02.16 36,000 25.05.16 Contractor No.2 $49,000 Contractor No.1 $46,600 Contractor No.2 $60,000 Contractor No.1 $50,600 Contractor No.3 $37,350 No competitive quotes obtained 36,000 25.05.16 72,000 44,500 19.01.16 29,750 19.01.16 74,250 Contractor No.1 $52,100 Contractor No.3 $44,857 Contractor No.
1 $42,600 Contractor No.

2 $43,000 34,000 21.03.16 Contractor No.

3 $37,780 35,220 08.02.16 69,220 Contractor No.

1 $38,400 Contractor No.

2 $43,000 333,010 The audit further noted that the contractors were engaged prior to signing of the Memorandum of Agreements (MOA) by both parties.

As such, some of the MOA were signed on or after the date the invoice was issued by the contractor.

Refer to Table 19.10 for details.


Table 19.10: Details of MOA signed after or on the same date invoice was issued by contractor Project Contractor Contract Cost ($) Date MOA signed by both parties Invoice Date Invoice Number Particulars Renovation to RFMF Infrastructure Signals Store Room Backgate Guard Room Contractor No.

2 Contractor No.

2 43,500.00 06.02.16 04.02.16 04.02.16 04.02.16 04.02.16 26,000.00 25.05.16 24.05.16 Renovation to Welfare Centre Contractor No.
2 38,000.00 25.05.16 24.05.16 24.05.16 24.05.16 040216 040216/1 040216/2 040216/3 240516/10 240516/11 240516/12 240516/14 240516/15 240516/16 Phase 1 Phase 2 Phase 3 Retention Phase 1 Phase 2 Retention payout Phase 1 Phase 2 Retention payout Upgrade of Infrastructure and Amenities Extension of Quartermasters Store Contractor No.
2 36,000.00 25.05.16 24.05.16 24.05.16 240516/1 240516/2 Phase 1 Phase 2 Republic of Fiji Military Forces Section 19 Page 13 REPORT OF THE AUDITOR GENERALOF THE REPUBLIC OF FIJI – JUNE 2017________________________________ Project Contractor Contract Cost ($) Date MOA signed by both parties Invoice Date Invoice Number Particulars Phase 1 Extension of Quartermasters Store Phase 2 Contractor No.

2 Strategic Headquarters Finance Conference Upgrade of Force Training Group Contractor No.
3 36,000.00 25.05.16 24.05.16 24.05.16 24.05.16 24.05.16 24.05.16 24.05.16 27.06.16 240516/3 240516/4 240516/5 240516/6 240516/7 240516/8 336 15,875.00 27.06.16 27.06.16 337 Upgrade of Married Quarters 42 Contractor No.
2 44,500.00 19.01.16 13.01.16 13.01.16 13.01.16 13.01.16 130116 130116/1 130116/2 130116/3 Phase 3 Retention Phase 1 Phase 2 Phase 3 Retention Phase 1 Phase 2 Phase 1 Phase 2 Phase 3 Retention Splitting of contracts results in circumvention of established procurement policies and procedures of Government which are designed to promote accountability and transparency.
19.6.3.2 Breach of terms and conditions of Memorandum of Agreements The remaining 10% of the agreed sum can be claimed at the end of the Defects Liability Period (30 days or 90 days) if there are no defects to the completed works.23 A liquidated damage of $100.00 per day shall apply.24 Contrary to the clauses in the Memorandum of Agreement, the RFMF paid the retention monies to the contractor at the completion of the project and not at the end of the defect liability period.
Refer to Appendix 19.5 for details.

Moreover, the RFMF did not exercise its right to claim for liquidated damages totalling $18,600 from contractors that did not complete the projects within the agreed timeline.

Refer to Table 19.11 for details.

Table 19.11: Details of contract completed after the agreed timeframe.

Project Contractor Contract Cost ($) Date Agreement signed Period Of works Target Completion date Date of completion No.
of Days over Female Renovation to RFMF Infrastructure Land Force Operations Block Bandroom Ablution LFC Lecture Room Renovation Quarters 4 ORS Living In Barracks Laundry Renovation to Married Contractor No.1 Contractor No.1 Contractor No.1 Contractor No.2 to Married Contractor No.3 Contractor No.2 Standard Clause for all Construction Projects with RFMF 24 Standard Clause for all Construction Projects with RFMF Republic of Fiji Military Forces Section 19 Page 14 REPORT OF THE AUDITOR GENERALOF THE REPUBLIC OF FIJI – JUNE 2017________________________________ Project Contractor Contract Cost ($) Date Agreement signed Period Of works Target Completion date Date of completion No.
of Days over Contractor No.3 Contractor No.3 Contractor No.3 Contractor No.3 Quarters 9 Upgrade of Logistic Support Unit Re-roofing of ORs Mess Bar Re-roofing of ORs Mess Dining Hall Upgrade of LSU Bay– Internal Partition Phase 1 Upgrade of Infrastructure and Amenities Replacement of SHQ Windows Re-roofing of Materials Stores Upgrade of Sukanaivalu Barracks Upgrade of accommodation Block 1 Upgrade of Accommodation Block 2 Renovations to welfare facility Renovations to transit quarters Total number of days contract was delayed Total delay damages not claimed Contractor No.5 Contractor No.6 Contractor No.6 Contractor No.2 Contractor No.5 $18,600 19.6.3.3 Inaccurate Capital Progress Report The preparation of management reports allows senior management to analyse the standing of the agency for a particular period and assists in meeting the management responsibilities imposed by the Act.
Timely and accurate management are necessary for effective management decisions.25 The audit noted a variance of $263,092.94 between the actual cost of the projects reported in the progress report26 and the FMIS general ledger.

Refer to Table 19.12 for details.
Table 19.12: Details of Variance between Progress report and FMIS Projects Progress Report FMIS Balance Variance Blackrock Integrated Peacekeeping Centre Renovation of RFMF Infrastructure Upgrade of Sukanaivalu Barracks Upgrade of Logistic Support Unit Upgrade of Infrastructure and Amenities Upgrade of Force Training Group Total ($) 279,707.00 381,280.00 280,800.00 202,430.00 300,640.00 156,828.00 1,601,685.00 SEG 8 ($) SEG 13 ($) 7,614.99 84,611.00 31,221.55 346,906.08 22,133.30 245,925.50 18,208.67 202,318.55 17,876.14 198,623.79 149,681.19 13,471.31 1,228,066.11 110,525.96 ($) 187,481.01 3,152.37 12,741.21 (18,097.22) 84,140.07 (6,324.50) 263,092.94 25 RFMF Finance Manual Part 18 26 Prepared by: Chief Staff Officer Force Development Republic of Fiji Military Forces Section 19 Page 15 REPORT OF THE AUDITOR GENERALOF THE REPUBLIC OF FIJI – JUNE 2017________________________________ Therefore, inaccurate capital progress reports were submitted to Management for information and decision-making.
19.6.3.4 Provisional tax not withheld A business making commission payment or payment under a contract for services where there is a written agreement is required to withhold 5% withholding tax (also known as provisional tax).27 The audit noted that the RFMF did not withhold 5 percent withholding tax from payments made to contractors.
Refer to Table 19.13 for examples Table 19.13: Provisional Tax Not Withheld Contractor Contractor No.1 Contractor No.2 Contractor No.3 Contractor No.4 Contractor No.5 Contractor No.6 Contractor No.
7 Particulars Total Amount Paid ($) Provisional Tax ($) Payment for capital construction works Payment for capital construction works Payment for capital construction works Payment for capital construction works Payment for capital construction works Payment for capital construction works Engineer consultation design for Blackrock project 112,457 371,557 308,872 188,687 29,358 58,261 84,611 5,6223 18,578 15,444 9,434 1,468 2,913 4,231 The RFMF has breached the statutory requirement relating to Fiji Income Tax Act, hence is exposed to penalties.
Recommendations The RFMF must:      ensure compliance with the Splitting of Contracts Policy 2014 and ensure that the approval of the Tender Board is obtained for any purchases above $50,000; ensure that a Memorandum of Agreement is signed prior to the engagement of a contractor; comply and exercise their rights as stated in the Memorandum of Agreement; ensure that progress reports submitted to management for information decision-making are accurate; and comply with the requirements of FRCA for Provisional Tax deductions for all contracted service providers.
Management Comments OAG findings and recommendations are noted.
The Force will strengthen its internal control by: 27 FRCA Fiji Tax & Customs Summary 2016 – Clause 19 Republic of Fiji Military Forces Section 19 Page 16 REPORT OF THE AUDITOR GENERALOF THE REPUBLIC OF FIJI – JUNE 2017________________________________  approval of the Major Tenders Board will be sought for any purchases above $50,000.00;  MOA are signed by both parties before the engagement of a contractor;  splitting of projects will not be entertained in the next financial year and in compliance to the MoF Splitting of Contracts Policy 2014;  Clauses in the MOA such as liquidated and ascertained damages will be closely monitored;  all progress payment will be verified by the Ministry of Infrastructure and Transport (MoIT) prior to payments this is to ensure that progress report submitted to managements for decision making are accurate in all aspects; and  Comply with requirements of FRCA for Provisional Tax deductions for all contracted service providers.
19.6.4 Weak Internal Controls in the Management of Food Rations All units will forward to Supply Company a daily rations state form.

The daily ration state form will compile the daily state (‘living in’ strength the previous day and the strength increase/decrease during subsequent 24 hrs) and the ration strength forecasts seven days in advance.28 Supply Company will compute from the information contained in the Daily Ration State the Unit’s entitlement to complete rations.
The Unit’s entitlement will be posted each day to a Ration Reconciliation Book and totalled at the end of each month.
29 When supplies are uplifted or delivered at the store the supplies will be brought on charge from the Requisition Form or the Invoice to the Ledger Stock Card.30 Unit Daily Ration States will be completed by Supply Company and breakdown of ration issues to Messes will be made on Daily Ration Demand (DRD) forms.31 Receipted DRD will be checked and then posted daily to the Ledger and Stock Card.32 Supply Company will maintain a record of the Ration Reconciliation Books showing the number of rations demanded daily by each unit and the number of rations to which the unit is entitled.
This record will show as a unit credit or debit the extent of under-drawing or overdrawing of rations and will be available to units on request at any time33.

The following weaknesses were noted from the review of the internal controls over the management of food rations.

 Units34 did not submit the Daily Ration State Form.

Instead, the Units used the Daily Ration Demand Forms to order rations from the RFMF Supply Company.
 RFMF’s Supply Company did not maintain a Ration Reconciliation Book that records the number of rations demanded and entitlements for each units.

 RFMF’s Supply Company did not prepare the Daily Ration Demand Form.

Refer to Appendix 19.6 for examples.

The above finding indicates non-compliance to regulations governing the supply and accounting of food rations hence increasing the risk of mismanagement of rations.
28 RFMF Standing Orders Volume 2 – Part 2: Supply/Inventory Accounting, Chapter 17, Par 2.17.6 29 RFMF Standing Orders Volume 2 – Part 2: Supply/Inventory Accounting, Chapter 17, Par 2.17.8 30 RFMF Standing Orders Volume 2 – Part 2: Supply/Inventory Accounting, Chapter 17, Par 2.17.15 (b) 31 RFMF Standing Orders Volume 2 – Part 2: Supply/Inventory Accounting, Chapter 17, Par 2.17.19 32 RFMF Standing Orders Volume 2 – Part 2: Supply/Inventory Accounting, Chapter 17, Par 2.17.24 33 RFMF Standing Orders Volume 2 – Part 2: Supply/Inventory Accounting, Chapter 17, Par 2.17.34 34 Officers Mess, Sergeants and Warrants Officers Mess and Other Ranks Mess Republic of Fiji Military Forces Section 19 Page 17 REPORT OF THE AUDITOR GENERALOF THE REPUBLIC OF FIJI – JUNE 2017________________________________ Recommendation The RFMF should ensure that all units including the supply company complies with instructions stipulated in the RFMF Standing Order Volume 2.
Management Comments OAG findings and recommendations are noted.

The Force Supply Company has jurisdiction and command over all the QEB Messes; so the stock and ledger cards are kept at Supply Company HQ.

It is now compulsory for all Messes to raise the Daily Ration Demand form and submit to the Supply Company for the purchasing of rations as recommended.
19.6.5 Breach of Government Tender Board Approval For the supply of fresh and frozen root crops, vegetables, fish, meat, eggs, margarine and ice cream the government has contracts mainly with Freshet International, Joes Farm and Ashabhai & Company.35 For the supply of general food items the government has contracts mainly with Morris Hedstrom, Pacific Hai An Corporation, Punja & Sons, Hardip Narayan & Sons Ltd and Ashabhai & Company.36 From a samples totalling $132,636.77 which were tested, the audit noted that RFMF purchased items valued at $13,854.80 or 10% from non-approved suppliers.
Refer to Table 19.14 for examples.

Table 19.14: Purchase of foods items from supplier other than approved suppliers.
Item Tender Actual Total Cost ($) Unit Cost ($) Total Cost ($) Variance ($) Other Supplier Biscuit Corned Beef Tuna Flakes Noodles Baked Beans RFMF Farm Cassava Pumpkin English Cabbage Chinese Cabbage Tomato Lettuce (Brown) Lettuce (Green) Eggplant French Bean Quantity Unit Cost ($) 25 178.56 58.56 33 36 1.20 1.30 3.00 2.00 1.00 6.00 4.00 1.20 2.50 44 18 18 15 36 880kg 160kg 106kg 67kg 97kg 88kg 42kg 115kg 74kg 1,100.00 3,214.08 1,054.08 495.00 1,296.00 1,056.00 208.00 318.00 134.00 97.00 528.00 168.00 138.00 185.00 39.27 213.76 103.12 51.56 83.78 1,727.88 3,847.68 1,856.16 773.40 (627.88) (633.60) (802.08) (278.40) 3,016.08 (1,720.08) 1.2 1.2 1.35 1.35 0.95 5.5 3.5 1.15 2.45 1,056.00 - 192.00 143.10 90.45 92.15 484.00 147.00 132.25 191.30 16.00 174.90 43.55 4.85 44.00 21.00 5.75 (6.30) 35 Tender No.
162/2014 , GTB Meeting No.

1/2015 dated 28th January 2015 36 Tender No.

157/2014 , GTB Meeting No.
23/2014 dated 15th December 2014 Republic of Fiji Military Forces Section 19 Page 18 REPORT OF THE AUDITOR GENERALOF THE REPUBLIC OF FIJI – JUNE 2017________________________________ Item Tender Actual Quantity Unit Cost ($) 2.50 43kg Long Bean TOTAL Total Cost ($) Unit Cost ($) Total Cost ($) Variance ($) 107.50 2.45 105.35 2.15 10,098.66 13,854.80 (3,756.14) The above finding indicates non-compliance with Government Tender Board approval which may result in uneconomical purchases or purchase of goods and services of substandard quality.
Recommendations RFMF must ensure that:  purchases are made from approved suppliers; and  justifications are obtained and documented for making purchases from non-approved suppliers.

Management Comments OAG findings and recommendations are acknowledged.

The Force purchased items from non-contracted suppliers due to the following reasons: a.

Items were urgently needed for TC Winston HADR deployment; b.
Unavailability of items with contracted suppliers; c. Poor quality of the items supplied by the contracted suppliers; and d. Proximity of supplier to the area of work.

The RFMF Farm also operates as a reserve Unit for the RFMF and provides for the institution in times of need at lower prices than the tendered prices.

The Force purchased vegetables from the time as a mitigation measure when the country faced shortages of this commodity after the aftermath of cyclone Winston.
The RFMF Logistic Support Unit (LSU) has been advised to provide evidence when contracted Suppliers cannot supply goods and services due to items out of stock.

This is to be reported in writing on the Payment Voucher.

19.6.6 Adopt a School Program Proper management of expenditure is fundamental in ensuring that value for money is obtained in delivering services to the community.
Cost effective internal controls within the purchasing and payments systems also plays an important part in ensuring that waste of funds, over – expenditures and corruption do not occur.

The RFMF transferred37 $20,000 from the Drawings Account to the TMA account as assistance in rebuilding a school that was damaged during the Cyclone Winston.
The audit noted that:   assistance was already provided to the school by the Republic of Indonesia Defence Force through the government initiative of adopt a school program; the expenditure was not budgeted for in 2016.
However, the Director Finance and Logistics and 37 Electronic Transfer Number 14373 dated 24th May 2016 Republic of Fiji Military Forces Section 19 Page 19 REPORT OF THE AUDITOR GENERALOF THE REPUBLIC OF FIJI – JUNE 2017________________________________  Acquisition (DFLA) confirmed via email38 that the Deputy Commander approved the funding to be sourced from the Operating Fund Account; the payment voucher was not authorised, the commitment ledger was not maintained and acquittals were not submitted by the RFMF Engineers to the Principal Accountant for the utilisation of funds.
Moreover, the audit could not substantiate the criteria used by RFMF for selecting the school as relevant documentation was not provided for audit verification.

As a result, other schools requiring the assistance may have been deprived from the much-needed assistance.

The risk of unauthorised expenditure is high when there is no proper authorisation of expenditure.

Recommendation The RFMF must ensure that proper approvals are obtained for expenditure of public funds.
Management Comments Under the adopt a school program the Indonesian Military Engineers Corp had adopted Queen Victoria School to repair and rebuild after damages made to the school buildings by Cyclone Winston.

RFMF engineers worked together with their counterparts in the rehabilitation works.
Parts of works required are the hire of machinery from the Plant TMA and as such RFMF contribution to the rehabilitation of works was to pay the Plant TMA which is the business arm of the Force for the hire and fuel charges of plant totalling $20,000.

The uncertified voucher was a clerical error and RFMF will ensure that all vouchers are certified prior to payment.

19.6.7 Purchase in excess of tendered amount The Government Tender Board in its Meeting No.
13/2013 on 10/07/2013 awarded the contract for the supply of winter clothing to various companies in Tender No.

CTN 46/2013.

Supplier A was contracted for the supply of 1,070 round neck Tees (short sleeve) at $25 per unit cost and for a total cost of $26,750.

Contrary to the Tender Board approval, the RFMF purchased 1,72539 round neck tees valued at $43,125, resulting in excessive purchase of t-shirts valued at $16,375.

The above has resulted in unauthorised purchases or over-expenditures.
Recommendation The RFMF should investigate the reasons for excessive purchases made and ensure compliance with the Tender Board approval at all times.

Management Comments OAG findings and recommendation is acknowledged.
38 Email from DFLA to Chief of Staff Finance dated 19th May 2016 39 Cheque Number 14414 dated 24th May 2016 Republic of Fiji Military Forces Section 19 Page 20 REPORT OF THE AUDITOR GENERALOF THE REPUBLIC OF FIJI – JUNE 2017________________________________ The Force will investigate the reasons for excessive purchases made and will ensure compliance with GTB approval at all times.

19.6.8 Sea freight payments The air baggage allowance for students and family members will be the standard 20kg.
However, on return to Fiji, students may additionally send books and papers etc.
by sea freight up to a maximum volume of one (1) cubic meter at RFMF expense.40 The SO Acts, CSO Fin or SO Trade 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 and there is documentation that the goods, services or works have been received.41 An Officer receiving training at Government expense, including any on aid made available by donor countries and organisations, must be bonded before they proceed on training either on pay or without pay to serve in the Public Service or elsewhere for a specified period.42 Arrangement for bond will for any period of study up to and including three months, for over three months up to and including one year and above one year will be bonded correspondingly.43 Audit review of sea freight payments to officers revealed the following anomalies:   sea freight payments, in some cases, were made on the strength of quotations received from the logistic companies; sea freight charges totalling $9,569.9744 were paid to the officers instead of the logistic companies.
However, the officers were yet to provide45 a copy of the invoice or bill of lading.

Moreover, the RFMF did not bond officers who had undertaken fully-funded overseas trainings.

Without the training bond, RFMF may easily lose its investment in training and development of personnel.

In the absence of relevant supporting documents, there was no evidence to indicate that the officers to whom payments were made had transported their personal equipment.
Non-compliance with regulations established to govern procurements and payments of goods and services increases the risk of mismanagement of funds.

Recommendations The Force should ensure that:  claims for reimbursement of excess baggage claims are properly scrutinised and payments are made to officers who provide the required supporting documents; and  officers are bonded prior to undertaking fully-funded overseas training.

40 Administrative Instructions No.

42 (First Revised) Paragraph 17.


41 RFMF Finance Manual – Part 2.8.4 42 General Orders 2011 – Section 901 Part A 43 Administrative Instruction No.

55 Overseas and Local Civilian Courses – Clause 5 44 Cheque Numbers: 14424, 14425, 14517 and 15480 45 As at 24th October, 2016 Republic of Fiji Military Forces Section 19 Page 21 REPORT OF THE AUDITOR GENERALOF THE REPUBLIC OF FIJI – JUNE 2017________________________________ Management Comments OAG findings and recommendations are noted.
Payment of freight on quotations will now be charged to the officer’s accountable advance.

Officers will be required to retire this through production of receipts and other documentation from freight companies.

Officers on overseas training will be required to sign a bond.
19.6.9 Variances in Payroll Reconciliation is an internal control mechanism established to ensure the accuracy of financial reports being produced.46 The Warrant Officer Pay shall record the manual payment of the appropriate input form.
The form shall be used to update the payroll records in the automated payroll system ….47 No manual payment of salary is permitted except upon written approval from the Permanent Secretary for Finance.48 The audit noted the following anomalies from the review of payroll records:  Variances were noted between the FMIS general ledger and Government Payroll System for payment of allowances.

Refer to Table 19.15 for details.


Table 19.15: Details for variance between FMIS and Government Payroll System Description Lodging Allowance Remote Allowance Service Allowance Allowances paid to married soldiers to assist in paying cost of rent and lighting charges, incurred while they are not in occupation of official quarters payable is required to undertake duty and live in a remote area of Fiji payable to a service person after taking the Oath/Affirmation of allegiance to serve in the regular Force.
to a member who Location Allowance Paid to officers and soldiers when posted for service/training in an overseas country.

Salary paid to a service person Established Staff FMIS49 ($) 4,935,410 Government Payroll System ($) 4,913,280 Variance ($) 22,130 682,874 679,534 3,340 2,818,271 2,832,237 (13,966) 26,674,918 26,672,660 2,258 5075,119,335 75,108,047 11,288  Gratuity allowance of $18,799.4051 was manually paid to an officer on 12 May 2016.
The manual payment was not updated in the government payroll system.

Similarly, review of the FMIS general ledger posting revealed that a total of $105,584.29 manual payments were made during the period.

Refer to Appendix 19.7 for details.
46 RFMF Finance Manual 2014 – Part 17.2.4 47 RFMF Finance Manual 2014 – Part 4.5.10 48 RFMF Finance Manual 2014 – Part 4.5.8 49 Total FMIS balance for Head 19 – Fiji Military Force and Head 49 – Peacekeeping Missions 50 Excluding Fiji National Provident Fund and Fringe Benefit Tax 51 Cheque # 14075 – EDP # 25441 Republic of Fiji Military Forces Section 19 Page 22 REPORT OF THE AUDITOR GENERALOF THE REPUBLIC OF FIJI – JUNE 2017________________________________ Non-reconciliation of the general ledger with payroll system can result in errors and omissions and fraud not being detected and rectified on a timely basis.
Moreover, failure to update manual payments in the government payroll system increases the risk of payroll expenditures being misstated at the end of the financial year.

Recommendations The RFMF must:  investigate the variances highlighted and ensure that general ledger and government payroll system reconciles; and  ensure that manual payments are promptly updated in the Government Payroll System.

Management Comments OAG findings and recommendations are noted.
 The RFMF will ensure that manual payments are updated into the Government Payroll System once payments being effected; The Force under the Director of Peacekeeping Operations (DPKO) are working very hard to maintain proper documentation of RFMF personnel deployed for missions; The issue was brought up to the management for information and clarification and also to HR division for information and necessary action since they are looking after the welfare soldiers; and The Force will be recruiting civilian staffs for record keeping as recommended.
Variances reported have been reconciled.

    19.6.10 Revenue not fairly stated in the Financial Statements The cash basis of accounting recognises transactions and events only when cash (including cash equivalents) is received or paid by the entity.
Audit review of revenue records revealed the following anomalies:  VAT receivable amounting to $29,852 has been recognised as revenue during the year; and  income received from marching band performance has not been recognised as operating revenue but is kept in the Band Trust Account.

The RFMF purchased new band equipment worth $408,761 during the year and charges a fee for the band to perform.

The above anomalies increase the risk of revenue being materially misstated in the financial statements.
Recommendations The RFMF must ensure that:  revenue is recorded and recognised when cash is received; and  VAT receivable recorded as revenue is reversed and adjusted to the correct allocation.

Republic of Fiji Military Forces Section 19 Page 23 REPORT OF THE AUDITOR GENERALOF THE REPUBLIC OF FIJI – JUNE 2017________________________________ Management Comments OAG findings and recommendations are noted.
Meetings with those in Hydrographic Units have been finalized and way forward has been identified and implemented herewith; and Recommendation is noted and the way forward is for RFMF to abide by the regulation stipulated in the Financial Instruction and Finance Manual.

The RFMF Band does not charge fees on official function.

The Band however is sometimes invited to perform at charity events or functions where organisers are required to assist in travel and accommodation costs.
In these instances funds are sometimes deposited in to the Band fund for ease of payments and convenience purpose.

The RFMF Band is sometimes also tasked to perform outside their (military) regimental core duties for which they are budgeted for, such as visits to affected areas post natural disasters to provide moral support to the affected citizens of Fiji.

In these instances the Band fund is used to assist their deployment.

It is to be noted that the RFMF Band is not a money generating entity.
19.6.11 Anomalies in Underline Accounts The Chief Staff Officer Finance is responsible for maintaining ledgers and reconciling balances in such ledgers to ensure the accuracy of financial information and the timeliness of management reports.52 Travelling advances must be recouped within 7 days of the completion of travel by submission of a voucher with documents to support the claim.
Where a travelling advance has not been fully expended, it must be repaid to the agency within 7 days of the completion of travel.
Where a travelling advance is not cleared within 7 working days of the completion of travel, recovery must be made from the concerned officer’s salary within 6 fortnights.53 The following anomalies were noted from audit review of the Underline accounts:  Variances were noted between the total debit and credit of the Operating Trust account, Drawings account and SLG84 reconciliation statement and FMIS general ledger.

Refer to Table 19.16 for details.
Table 19.16: Details of total debits and credits variance between Reconciliation Statement and the FMIS General Ledger Account Total Reconciliation FMIS Variance Operating Trust Reconciliation Drawings Receipts of Cheques from Other Ministries (SLG 84) Statement ($) 36,781,078 36,588,324 99,169,233 101,308,289 157,344 209,735 ($) 37,436,162 37,243,344 99,344,925 101,487,158 113,209 113,209 ($) 655,084 655,021 175,692 178,869 44,135 96,526 Debits Credits Debits Credits Debits Credits  Variance of $52,391 was noted between the reconciliation statement and FMIS general ledger for SLG 84 (Receipts of Cheques from Other Ministries).
52 RFMF Finance Manual 2014 = Part 16 53 Finance Instruction 2010 – Section 44 Republic of Fiji Military Forces Section 19 Page 24 REPORT OF THE AUDITOR GENERALOF THE REPUBLIC OF FIJI – JUNE 2017________________________________  As at 31st July 2016, the Operating Trust Account had a balance of $3,337,122 of which $3,077,393 or 92% was carried forward from prior years.

 Advances totalling $39,242 were not cleared within seven days resulting in expenditures being understated.
Refer to Table 19.17 for details.
Table 19.17: Details of advances not retired Officer No 28862 29420 29708 29181 23542 27425 29535 30965 31619 23854 27425 29193 31365 25215 28606 25542 28877 26237 25839 24416 28877 28726 30869 Total Date 15/1/15 Feb 2015 Feb 2015 16/3/15 5/5/15 14/7/15 Aug 15 Aug 15 Aug 15 29/1/16 15/4/16 15/4/16 11/5/16 20/5/16 20/5/16 24/5/16 30/6/16 30/6/16 15/6/16 16/6/16 16/6/16 21/6/16 19/7/16 Balance ($) 788 1,019 807 72 162 420 180 180 180 45 27 27 72 1,209 2,744 45 72 299 13,442 63 10,327 2,880 4,182 39,242 The above findings indicate lack of supervisory checks of the personnel responsible for preparing of reconciliations.
Failure to settle liabilities and rectify variances on time may result in write offs in future.

Recommendations The RFMF must ensure that:  Operating Trust, Drawings and SLG 84 (Receipt of Cheques from Other Ministries) accounts prepared by RFMF are reconciled to the FMIS general ledger.
Any variances noted should be investigated and necessary adjustments made; and  Travelling advances are cleared within 7 days of the completion of the travel; failing which recovery should be made from the responsible officer’s salary.

Management Comments OAG findings and recommendations are acknowledged.
Republic of Fiji Military Forces Section 19 Page 25 REPORT OF THE AUDITOR GENERALOF THE REPUBLIC OF FIJI – JUNE 2017________________________________ The way forward implemented by the Accounts Section is to create and activate a new SLG 84 Accounts to identify different projects with different allocations.

e.g.

1-19101-1999-840101-001 is for Wainibuku Project.

The Force will ensure that the travelling advances are cleared within 7 days of the completion of the travel as recommended.
19.7 Trading and Manufacturing Account The RFMF has two Trading and Manufacturing Activity (TMA) account namely the Plant Pool and the Hydrographic Service.
The Plant Pool was formed in 1978 to construct and develop roads to the inaccessible parts of rural areas in Fiji while the Fiji Hydrographic Service was transferred to the RFMF’s naval division in 2010 to provide accurate Oceanographic and Hydrographic Information and Services The following discrepancies were noted from audit review of the trading and manufacturing activities.
19.7.1 Weaknesses in Internal Control for TMA The Accounting Head of an agency is responsible to the Permanent Secretary for the effective design and operation of internal controls across the agency.54 The TMA Manager shall prepare a draft business plan documenting the planned performance and profit target of each TMA activity for the planned year and for the following three years.55 Chief Staff Officer Finance must ensure that payments documents are processed correctly by having different officers assigned to approving invoices for payments; reviewing and reconciling financial records before payments are done and signing cheques.56The TMA Manager shall be responsible for preparing and submitting to Ministry of Finance a monthly reconciliation statement within 15 days after the end of the month.57 Goods or services shall only be sold at the prices set out in the Schedule of Prices.
Any proposed changes in prices must be submitted through the Ministry of Finance to Cabinet for approval.58 Audit review of internal controls for the Trading and Manufacturing Account revealed the following weaknesses:   the planned performance and profit target for three subsequent years (2017, 2018 and 2019) was not documented in the 2016 business plan.

there was no segregation of duties.

The authorised cheque signatories (EDP No.


53431, SB320, 60067 and RT471) for the RFMF TMA Account59 are the same officers assigned to approve invoices for payments, reviewing and reconciling of financial records before payments are done.

 monthly bank reconciliations were not submitted to the Ministry of Economy on a timely basis.

Refer to Table 19.18 for details.
54 Finance Instruction 2010 – Section 59 55 RFMF Finance Manual 2014 – Part 6.1.1 56 RFMF Finance Manual 2014- Part 17.2.1 57 RFMF Finance Manual 2014 – Part 6.5.5 58 RFMF Finance Manual 2014 – Part 6.4.1 and 6.4.2 59 Bank of South Pacific Republic of Fiji Military Forces Section 19 Page 26 REPORT OF THE AUDITOR GENERALOF THE REPUBLIC OF FIJI – JUNE 2017________________________________ Table 19.18: Status of Bank Reconciliations submitted to Ministry of Economy Month January February March April May June July Hydrographic Account 27/04/2016 27/04/2016 05/05/2016 15/06/2016 Prepared on time 19/07/2016 27/09/2016 Plant Pool Account Date prepared could not be determined as cover page was missing 05/05/2016 15/07/2016 15/07/2016 19/07/2016 Signed available not made copy  Cabinet is yet to approve the rates60 at which the vehicles/plants are to be hired.
The above findings indicate the existence of weak controls which if not addressed would result in financial losses in the future.
Recommendations The RFMF must ensure that:     the business plan is prepared in accordance with Section 6.1.1 of the Finance Manual; cheque signatories are independent of the procurement process; bank reconciliations are prepared and submitted to Ministry of Economy in a timely manner; and approval for prices for plant/vehicle hire is followed up with the Ministry of Economy.

Management Comments OAG findings and recommendations are noted.
The Force has improved its internal control for financial year ending 31 July 17 by:    Officers concerned had been advised to prepare business plan in accordance with Finance Manual; and Monthly bank reconciliations for TMA are now prepared and submitted to the Ministry of Economy in a timely manner.

The charges by the Engineers TMA are still being reviewed before approval is sought from the MOE.

19.7.2 Weaknesses in Fuel Management Access to inventory stores shall be limited to the storekeeper.
All other officers shall be restricted from entering storage facilities unless approval is granted by the store keeper.61 60 With effective from: July 2011 61 RFMF Finance Manual – Part 8 – Inventory Management Clause 8.2.2 Republic of Fiji Military Forces Section 19 Page 27 REPORT OF THE AUDITOR GENERALOF THE REPUBLIC OF FIJI – JUNE 2017________________________________ The inventory bookkeeper shall maintain the inventory register to record incoming and outgoing inventory.62 The inventory book keeper shall ensure that the register is kept up to date at all times.63 Ledger cards and Petroleum Oil and Lubricants (POL) receipt issue sheets will be balances with closing balance carried forward.
POL receipt and issue sheets will be filed for audit64.

All tanks will be dipped and recorded on the POL Receipts and Issue Sheets before the first issue each day and at the end of each day65.

Reconciliation is to be carried out against the Receipt and Issue Sheet.66 Audit review67 of the fuel records at the Engineering Division revealed the following weaknesses:   The garage where the kerosene, premix, azolla and rubia were kept is not locked.

Similarly, the fuel tank is not locked when not in use.
Hence, there is a very high risk of loss of fuel through theft and misuse; the fuel management officer did not carry out daily measurement of fuel in tanks.

Consequently, the fuel inventory reconciliation was not performed; fuel purchased was not promptly recorded in the fuel inventory book; the closing stock balance was not carried forward to the subsequent month; and    discrepancies in fuel records were not promptly investigated and rectified.
The above findings indicate the existence of weak controls in fuel management and responsible officers are not discharging their responsibilities to ensure the accuracy and completeness of fuel records.

Without physical verification, it would be difficult to identify missing fuel and reconcile fuel inventory.
Recommendations The RFMF must ensure that:  controls and records over fuel management are improved; and  discrepancies in fuel are promptly investigated and disciplinary action taken against responsible officers.

Management Comments OAG findings and recommendations are acknowledged.

It is to be noted that the TMA stores its fuel for its vehicles on drums and not in tanks as reported.
However the staffs concerned had been advised accordingly to regularly update fuel records as and when there’s a movement on fuel as recommended.
62 RFMF Finance Manual – Part 8 – Inventory Management Clause 8.1.3 63 RFMF Finance Manual – Part 8 – Inventory Management Clause 8.1.4 64 RFMF Standing Orders Volume 2 – Part 3 Chapter 8 Section 2.8.10 65 RFMF Standing Orders Volume 2 – Part 3 Chapter 8 Section 2.8.11 66 RFMF Standing Orders Volume 2 – Part 3 Chapter 8 Section 2.8.14 67 Audit inspection dated 29 September 2016 Republic of Fiji Military Forces Section 19 Page 28 REPORT OF THE AUDITOR GENERALOF THE REPUBLIC OF FIJI – JUNE 2017________________________________ 19.7.3 Anomalies Hydrographic in Trading and Manufacturing Activity – Plant Pool and The profit and loss statement and the balance sheet must be prepared on an accrual basis.68 The Chief Staff Officer Finance is responsible for maintaining ledgers and reconciling balances in such ledgers to ensure the accuracy of financial information and the timeliness of management reports.69 Audit review of the Trading and Manufacturing Activity account revealed the following anomalies:  Revenue totalling $36,695 collected in 2015 has been recorded in the 2016 general ledger.
As a result, TMA sales are overstated by $36,695.

The TMA Manager confirmed that this was due to the delays in posting of direct deposits to the FMIS general ledger.

Refer to Table 19.19 for details.

Table 19.19: 2015 Direct Deposits as 2016 Receipts Date 17/11/2015 18/11/2015 29/12/2015 Amount ($) 16,956 4,140 15,600 36,696  There was a variance of $72,007 between the FMIS general ledger and the Statement of VAT account received from Fiji Revenue and Customs Authority (FRCA).
Refer to Table 19.20 for details.

 Table 19.20: Statement of VAT reconciliation to FMIS Description Closing Balance as per Statement of VAT (05/07/2016) Less: June & July Assessment VAT Refund as per FMIS Variance Amount ($) 73,145 1,902 71,243 143,250 72,007 The audit further noted that the VAT from the sale of hydrographic charts and the refund of $5,125.79 was not disclosed in the June 2016 VAT returns lodged to FRCA.
 There was no independent verification carried out for inventory balance of $25,363.

Consequently, audit could not substantiate the accuracy and the completeness of the inventory amount.

The above anomalies imply that the Trading and Manufacturing Accounts may not fairly reflect the financial performance and position of the TMA operations.
Recommendations The RFMF should ensure that: 68 Finance Instructions 2010, Section 30 (2) 69 RFMF Finance Manual 2014 - Part 16 Republic of Fiji Military Forces Section 19 Page 29 REPORT OF THE AUDITOR GENERALOF THE REPUBLIC OF FIJI – JUNE 2017________________________________  direct deposits are promptly posted to the FMIS general;  proper reconciliations are carried out and any errors are investigated and adjusted accordingly; and  year-end stocktake is independently verified.
Management Comments OAG findings and recommendations are noted.

The Force had strengthened its Internal Control by discouraging direct deposit to the bank by the clients.

All revenues are to be receipted at HQ and credited to various allocations including TMA.

It is to be noted that the Navy Hydrographic Unit is no more operating under the TMA from 01st August 2016 and being approved by the Ministry of Economy.

All funds associated to be transferred by the MoE from the TMA to the CFA.
In addition Vat Returns for the TMA will be checked by the Accounts Section to ensure that vat payments are correct in all aspects.

19.8 Project Account The Engineers Regiment operates a trust account for construction/extension of teachers’ quarters, classrooms, hospital and footbridge.

The following discrepancies were noted from an audit review of the Project Account.
19.8.1 Weaknesses in Internal Control for Project Account The Accounting Head of an agency is responsible to the Permanent Secretary for the effective design and operation of internal controls across the agency.70 Where officers are authorised to collect revenue (revenue collectors), the CSO Finance must provide them with a letter of appointment.71 The Staff Officer Ledgers shall maintain a distribution register recording all receipt books and other revenue earnings forms issued to Navy/Engineers/Strategic HQ revenue collectors.72 When cash or bank cheques are received, the revenue collector shall immediately issue an ‘official receipt’.73 The Commanding Officers of Units must maintain a Commitment Ledger in which he/she shall record all known commitments as required under Finance Instruction 13.74 The CO’s of units must ensure that the Commitment Ledger is up to date.75 Audit review of the internal controls system for the Project Account revealed the following weaknesses: 70 Finance Instruction 2010 – Section 59 71 RFMF Finance Manual 2014 – Part 5.1.1 72 RFMF Finance Manual 2014 – Part 5.2.10 73 RFMF Finance Manual 2014 – Part 5.3.1 74 RFMF Finance Manual 2014 – Part 2.7.1 75 RFMF Finance Manual 2014 – Part 2.7.3 Republic of Fiji Military Forces Section 19 Page 30 REPORT OF THE AUDITOR GENERALOF THE REPUBLIC OF FIJI – JUNE 2017________________________________ the revenue collector was not formally appointed by the Chief Staff Officer Finance;   Distribution Register was not maintained to record all receipt books issued to the revenue collectors; and  Unofficial receipts were used for receipting of revenue from 2009 to July 2016.
Refer to Table 19.21 for details.

Table 19.21: Details of receipts issued Receipt Sequence From 01 01 24401 To 100 100 24600 Date From 11/03/2009 080/4/2010 16/05/2009 To 26/05/2014 22/10/2012 currently being used  Six76 blank cheques were signed by the cheques signatories while 10377 blank cheques were pre- sign by one cheque signatory increasing the risk of misuse of funds and fraud.

 Commitment Ledger and Local Purchase Order Register was not updated.
 Reconciliations were not prepared for cash balances of $194,642.2278 and funds received from donors Ministries.

 The RFMF did not comply with the instructions from the Office of the Prime Minister in constructing a 1 x 4 classroom.

Instead, the RFMF constructed a 1x 5 classroom that resulted in the utilisation of savings from other projects totalling $28,867.8679.

Similarly, the cost overruns for some projects were financed from savings of other projects.

Refer to Table 19.22 for details.


Table 19.22: Projects overruns funded from other projects Project Name Naleba Ablution Batirilagi 1x2 T/Qrts Rotuma Hospital Amount ($) (930) (4,252) (248,444) The above findings indicate the existence of weak controls in the operations of the account which may lead to financial loses in future if immediate action is not taken to address the anomalies highlighted.
Recommendations The RFMF must ensure that:   Immediate action is taken to address the control weaknesses highlighted; and instructions and requirements stipulated in the Finance Instruction and Finance Manual are strictly complied with in future.

Management Comments OAG findings and recommendations are acknowledged.

76 Cheque Number: 3283-3288 77 Cheque Number: 3289-3392 78 As at 31 July, 2016 79 Cheque No 003207 dated 30th June, 2016.
Republic of Fiji Military Forces Section 19 Page 31 REPORT OF THE AUDITOR GENERALOF THE REPUBLIC OF FIJI – JUNE 2017________________________________ It is to be noted that the Force is in the process of closing the Engineer’s Project Fund Account and has been liaising with MOE on the way forward.

The MOE have advised the following:    that before closing the account, the RFMF is to reconcile bank records with projects.
This exercise was completed in February 2017 by RFMF and reconciliations had been submitted to the OAG office; that Funds for new projects to be receipted into GL revenue (SLG 84) .

This has now been done for all new projects undertaken; and acquittals be submitted progressively to the client and MOE and also when projects are completed.

Acquittals are now part of the new RFMF process.

The Rotuma Hospital upgrade and extension is a $2m project funded by the Ministry of Health.
The MoH 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 regularised once the Force receives the fund from MoH.

Acquittals have been provided to MoH and RFMF is expecting the reimbursement soon.

This account has been reconciled with a copy forwarded to OAG.
19.9 Farm Account 19.9.1 Weakness in the Internal Control for Farm Account The Accounting Head of an agency is responsible to the Permanent Secretary for the effective design and operation of internal controls across the agency.80 The FMF Farm will be audited every quarter and report forwarded to HQ FMF for perusal.81 All Farm expenditure must be approved by HQ FMF and the account must be kept at the FMF Canteen.82 Officers who wish to use their own motor vehicles or motor cycles in the performance of their official duties should obtain prior approval from their respective Permanent Secretary or Head of Department.
Upon approval the officer may clam for mileage allowance.83 Allowances in respect of motor vehicles and motor cycles shall be payable at the following rates or at such rates as may from time to time be authorised by the Permanent Secretary for the Public Service:- (a) Vehicles of 2001 cc or over 45 cents per km (b) Vehicles of 1451 cc to 2000 cc 42 cents per km (c) Vehicles of 1001 cc to 1540 cc 38 cents per km (d) Vehicles of 501 cc to 1000 cc 34 cents per.
km (e) Vehicles of 500 cc and under 28 cents per km.84 Audit review of the internal controls systems for the Farm Account revealed the following weaknesses:  A total of 2485 blank cheques were pre-signed by the Commanding Officer Territorial Force while the cheque book was kept by the Farm Manager who is also one of the cheque signatories for the Farm Account; 80 Finance Instruction 2010 – Section 59 81 Administrative Instruction No.

46 Section 11d) 82 Administrative Instruction No.


46 Section 11d) 83 General Order 518 84 General Order 520 85 Cheque Number: 004819 - 004842 Republic of Fiji Military Forces Section 19 Page 32 REPORT OF THE AUDITOR GENERALOF THE REPUBLIC OF FIJI – JUNE 2017________________________________  A total of $21,056 expenditures were not supported with relevant supporting documents such invoices/receipts/statements.

Refer to Table 19.23 for examples.


Table 19.23: Examples of expenditures without supporting documents.

Expenditure Total Amount ($) Transport Claim Vehicle Parts Visitors Food Items Farm Maintenance Utility Vodafone Recharge Printer Office Equipment No voucher Total 6,044 334 100 10,305 3,379 125 44 350 156 219 21,056  The Farm Manager used his personal vehicle for official duties without approval of the Commander.
Accordingly, the Farm Manager purchased spare parts, claimed for transportation cost, cleaning and fuel for the vehicle.

Refer to Appendix 19.8 for details of claims and purchases made.

The above findings indicate a high risk of fraud and mismanagement of funds in the operations of the farm.
Recommendations The RFMF must ensure that:  The Farm Manager complies with the instructions stipulated in the General Order and the Administrative Instructions; and  the anomalies highlighted are investigated and disciplinary action is taken against responsible officers.

Management Comments OAG Findings and recommendations are acknowledged.
In the newly revised approved Force structure, the Farm is now under the RFMF’s Directorate of Finance, Logistics and Acquisition for better financial management control.

Furthermore the Force is currently reviewing its Standing Orders Vol 2 which caters for Stores Accounting and Support Matters after 19 years.

Once the revised document is endorsed, all supportive administrative Instructions will also being reviewed and new processes will soon be effected including the administrative of the RFMF Farm.
The current rules and regulations are outdated and do not reflect the current changes in the RFMF.
Republic of Fiji Military Forces Section 19 Page 33 REPORT OF THE AUDITOR GENERALOF THE REPUBLIC OF FIJI – JUNE 2017________________________________ 19.9.2 Gift of $100,000 not deposited in the Consolidated Fund Account A gift received by an officer in his/her official capacity or donated to the agency must be recorded in a gift register to be maintained by the Chief of Staff HQ.86 Where the gift in the form of money, it shall be paid into the Consolidated Fund as revenue unless gift conditions specify that the money should be held in a trust account and used for a specific purpose.87 Audit review of the bank statements noted that a cheque of $100,000 was deposited into the Farm Account instead of the Consolidated Fund Account.
However, the purpose of the fund could not be determined as supporting documentation was not produced for audit verification.

It was noted that the funds were used to finance the operations of the farm.

As result, the authenticity of the funds received could not be determined.

Recommendations The RFMF must ensure that funds received from donors are processed through Ministry of Economy and deposited into the Consolidated Fund Account.
In addition, any conditions to a donation should be first be discussed and agreed with Ministry of Foreign Affairs prior to acceptance of donation and receipt of funds or goods.

Management Comments OAG findings and recommendations are noted.

It is to be noted that the donation was conditional and that it was specifically for the administration and operation of the Farm after TC Winston.

Hence the fund was receipted and deposited into the RFMF Farm Account.
It is to be noted also that the farm is in partnership with the Ministry of Agriculture and the Taiwanese Government.

The donation therefore was given in view of this holistic partnership and not specifically to the RFMF.
86 RFMF Finance Manual 2014 – Part 5.3.13 87 RFMF Finance Manual 2014 – Part 5.3.16 Republic of Fiji Military Forces Section 19 Page 34 REPORT OF THE AUDITOR GENERALOF THE REPUBLIC OF FIJI – JUNE 2017________________________________ 19.10 Follow Up On Previous Year Accounting and Control Anomalies Raised During the 2016 audit, the status of the matters reported in the previous year was followed up.

These matters have remained outstanding as actions are yet to be taken by RFMF to resolve them.
The status of the outstanding issues is set out in Table 19.24.

Table 19.24: Details of Outstanding Issues Issues Recommendations Current Status Management’s Proposed Action/Comments Non Updating of 2016 Person to Post Listing Person to post listing was not maintained by the Human Resource section.

RFMF should finalise person to post listing at its earliest.
Items Not Taken on Charge Items procured by respective stores such as Supplies, Logistics Support Unit (LSU), Engineers, Medical and Plant Pool were not taken on charge in the tally card by the respective Quarter masters.

RFMF must ensure that: Adequate supervisory checks are in place to ensure stocks are taken on charge when received; and stock card contains basic information such as date of acquisition, quantity received, quantity issued and date of issue are updated, etc.
Open Person to Post Listing was last updated in 2014.

However, the Human Resource Department the provided Troops on the Ground Report; report the the excludes of salary personnel and listings of the officers that are deployed on overseas mission.

Hence audit could not the confirm number of personnel currently employed by the RFMF.
Open Refer to Appendix 19.9 for Items not taken on Charge in 2016. have by implementation The policies RFMF on Working Reorganization been Structure the approved Commander RFMF on 08 Dec 2016 whereby Line in Column will be accordingly.

updated The RFMF P2P is still under review and should be completed by the end of the year.

of The personnel currently employed by the RFMF including salaries are captured on the Salary Reconciliation Statements.

Those are deployed on overseas mission are paid from Head 49.
A copy of the CMDR RFMF approved in column was line submitted to the OAG office.

numbers Items will be taken on charge after the BOS exercise on 15th May.
(Refer to 19.6.1) Republic of Fiji Military Forces Section 19 Page 35 REPORT OF THE AUDITOR GENERALOF THE REPUBLIC OF FIJI – JUNE 2017________________________________ Issues Recommendations Current Status Management’s Proposed Action/Comments Refer management comments on paragraph 19.6.2.1 Open, Issue on Kiro Boat has been highlighted in paragraph 19.6.2.1 Open, highlighted paragraph 19.8.1 as in Refer management comments on paragraph 19.8.1 Planned Capital Projects not Undertaken Funds provided in 2014, 2015 and 2016 budget for Kiro Patrol Boat project were not used at all and unused the funds went back Ministry of Finance.
The RFMF should: - ensure that all capital projects are properly planned and adequate arrangements made to implement the projects as quickly as possible when funds are provided; and to - investigate and take appropriate action against officers responsible for implementing these projects for their poor performance.

Similarly, a sum of $7.5m was allocated in 2015 for the Integrated Black Rock Peacekeeping Centre (BRIPC) As at 31/12/15 only $7,538 was utilised for the BRIPC project.
According to the RFMF, the planned work for 2015 was not carried out the delay because of in finalising the awarding of tender.

in Projects the RFMF Engineer Unit & Plant Pool (TMA) Overspending Undertaken by Engineer Capital construction projects undertaken by the RFMF for and ministries other departments revealed cost overruns on a number of projects in The RFMF should ensure that: - proper planning and realistic costing of project is done.
Any variation the cost must be justified and consulted with the respective ministries/department in a timely manner before incurring it; - all agreed cost variations are recovered respective ministers and departments so it does not affect the other capital project pending with the RFMF; and from the - works Officers must ensure that the project is managed and completed within the budgeted cost and timeframe.
The RFMF should verify its TMA balances and rectify errors detected to ensure balances are correctly Credit Cost of Goods Sold The RFMF’s cost of goods sold had a credit balance of $4,939 contrary to the nature the account being an of expense account Open of The cost goods sold for the year ended 31 July 2016 is $2,020.

the The operation of Hydrographic TMA had ceased operation with effect from 01 August 2016.
Republic of Fiji Military Forces Section 19 Page 36 REPORT OF THE AUDITOR GENERALOF THE REPUBLIC OF FIJI – JUNE 2017________________________________ Issues Recommendations Current Status Management’s Proposed Action/Comments Refer management comments on paragraph 19.8.1 Anomalies in the Operation of Engineers Project Trust Fund Account  Total of receipts $1,985,410 and total payments of $2,921,204 for the year 2015 were not recorded in the FMIS general ledger.
for  Statement of Receipts and Payments the Engineers Project Trust Fund Account was not included in the Agency Financial Statements The Force should ensure: All transactions are recorded in the FMIS general ledger when incurred; The annual financial statements include the Trust Fund Statement of the Receipts and Payments Project Trust Fund Account for No Open.

was revenue in collected 2016.

However, total payments made during the was year $387,487.
Open  The RFMF opened the Engineers Trust Account with the Bank of South an Pacific approval from the Chief Accountant.

without Proper approval is obtained from Ministry of Finance for the operation of the RFMF Engineers Trust account and also liaises with Ministry of Finance to open the general ledger account.

Open RFMF should The make arrangement for the pigs that are privately owned to be removed from the RFMF farm piggery.
Open The privately owned pigs will be removed when the Farm acquired pigs for its stocks.

that RFMF FARM ACCOUNT The audit noted the Farm’s piggery pan was used by former military officers to their personal stock.

rear Even though the feeding and labour engaged are paid by the former military officers it does not benefit the Farm in anyway.
Republic of Fiji Military Forces Section 19 Page 37 REPORT OF THE AUDITOR GENERALOF THE REPUBLIC OF FIJI – JUNE 2017________________________________ Appendix 19.1 Timelines for Reconciliations submitted to Ministry of Finance Months Operating Drawings IDC BLC Imprest Malaya Pension Malaya Widow Prepaid Expense Acc Advance 840101 Withholding Tax January 20/6/16 23/5/16 22/3/16 February 23/6/16 23/5/16 22/3/16 March April 23/6/16 30/6/16 23/5/16 23/5/16 6/5/2016 1/6/2016 May 5/7/2016 8/8/2016 22/3/16 Not Stated 6/5/2016 19/5/16 Not Stated 16/5/16 22/3/16 16/5/16 20/5/16 9/6/2016 12/5/2016 Jun-16 Not submitted for audit verification 20/5/16 20/6/16 6/6/2016 20/6/16 20/5/16 22/3/16 6/5/2016 14/3/16 20/5/16 Jun-16 22/3/16 11/5/2016 20/6/16 20/6/16 20/6/16 22/7/16 6/5/2016 19/5/16 Not Submitted for audit verification 30/6/16 Not prepared 11/5/2016 9/6/2016 20/6/16 No date 25/8/16 June July 25/8/16 8/8/2016 30/6/16 Not given 1/7/2016 25/8/16 25/8/16 26/8/16 9/9/2016 19/9/16 1/9/2016 17/8/16 25/8/16 25/8/16 9/9/2016 No date Republic of Fiji Military Forces Section 19 Page 38 REPORT OF THE AUDITOR GENERALOF THE REPUBLIC OF FIJI – JUNE 2017________________________________ Appendix 19.2 Details of Payment to various contractors for LEP of Vessel Kikau Contractor Particulars Amount Paid Contracted Amount ($) 549,146 Outstanding Amount ($) - Date Cheque No.
26/11/2013 1163 10/12/2014 5959 13/07/2016 15583 26/11/2013 1172 28/02/2014 1787 3/12/2013 Indent 10/2013 26/11/2013 31/07/2014 28/10/2014 27/11/2013 01/04/2014 1174 3794 5145 1185 2027 31/10/2012 58508 12/11/2012 58784 24/09/2014 4572 11/08/2014 3966 Total Contractor A Major Contractor for the Life Expectancy Program for vessel Kikau; contracted for slipping, main vessel and removal engine generator installation, removal and installation, repairs to exhaust system, gear box, circulating and system, cooling water and anchor external internal painting handling and Contractor B Payment on supply and of installation communication and navigation system on Kikau Patrol Boat Contractor C Purchase of Spare Parts for Kikau Patrol Boat Contractor D Carry out Electrical works for vessel Kikau LEP Contractor E Supply of paint for vessel Kikau LEP Contractor F Removal and re-installaiton or repair of all woodwork, domestic electrical partitions, connections, door frames , door windows and carpeting Contractor G Air-condition Refrigeration works vessel Kikau LEP and for ($) 274,573 155,473 119,100 267,756 669,391 133,878 267,756 229,906 44,643 116,541 9,833 42,960 42,960 55,953 55,953 55,953 139,120 NZD - 202,524 31,508 85,921 - 186,510 18,651 143,034 190,712 47,678 1,882,395 231,715 Republic of Fiji Military Forces Section 19 Page 39 REPORT OF THE AUDITOR GENERALOF THE REPUBLIC OF FIJI – JUNE 2017________________________________ Appendix 19.3 Status Work by Contractor A for LEP of RFNS Kikau and Pictures of Vessel No Job Description Slipping Cathodic Protection Exhaust System Main Engine Removal Main Engine Installation Generators Removal & Re-installation Propulsion Shafting, Bearings and Propeller Rudders Coupling - Vulcan and SKF Gearboxes – Propulsion Circulating & Cooling Water System Air Conditioning Seawater System Fire Main System (Pipes & Valves) Bilge Stripping System Heat Exchanges Sanitary Spaces and Fixtures Grey
 Water System - Pipes and Valves Anchor Handling and Stowage Abrasive Blast and Paint Freshwater Tanks Abrasive Blast and Paint Grey water Tanks Shell Appendages Painting External - Underwater Area Painting External - Waterline to Deck (Steel) Painting External - Main Deck Painting External - Superstructure and Mast Abrasive Blast Machinery Spaces Bilges Abrasive Blast and Paint A/C Pump Void Frames 17 - 18 Abrasive Blast - Forepeak - Frames 27 - 31.5 Abrasive Blast and Port & Starboard Wing Voids Frames 13 – 20 Paint - Engine Room Paint - Steering Gear Compartment Paint – Forepeak Painting – Magazine Painting JS and Magazine Wing Voids Painting AHU Void Paint Port & Starboard Wing Voids Frames 13 - 20 Cost ($) Incomplete Work ($) Status Of Work 103,643 20% Complete 2,198 Not Started 25,935 Not Started --- Completed 96,770 Not Started --- Completed 29,898 Not Started 7,620 Not Started 6,154 Not Started 25,310 Not Started 39,895 Not Started 3,238 Not Started 6,644 Not Started 7,180 Not Started 7,346 Not Started 5,747 Not Started 482 Not Started 8,266 Not Started --- Completed --- Completed 1,500 Not Started 14,872 Not Started 10,194 Not Started 11,614 Not Started 3,370 80% Complete 9,553 Not Started --- Completed --- Completed --- Completed --- Completed --- Completed --- Completed --- Completed --- Completed --- Completed --- Completed 427,428 Republic of Fiji Military Forces Section 19 Page 40 REPORT OF THE AUDITOR GENERALOF THE REPUBLIC OF FIJI – JUNE 2017________________________________ Appendix 19.4 Pictures of RFNS Kikau as at the date of audit visit – 25/10/16 Starboard (right side) of RFNS Vessel Kikau docked at ______ wharf on 25/10/2016 showing painting works not done by contractor A Stern (aft-most / rear side) of RFNS Vessel
 Kikau rusting and not painted by contractor A Port-Stern (left – rear side) of RFNS Vessel Kikau being grinding against the tyres since early 2013 to avoid hitting the wall.
Bow (front deck) of RFNS Vessel Kikau showing painting works not done by the contractor A RFNF Vessel Kikau Engine Room; the vessel’s engine has been removed but not re-installed by contractor A Generator of RFNF Vessel Kikau; has not been fully installed to the vessel by Contractor A Republic of Fiji Military Forces Section 19 Page 41 REPORT OF THE AUDITOR GENERALOF THE REPUBLIC OF FIJI – JUNE 2017________________________________ Appendix 19.5 Details retention paid before the defect liability period Project Contractor Contract Cost Date Project Complet ed Defect Liability Period (DLP) days Ending Date for DLP EFT Date EFT No.
Amount ($) 1 1 1 3 2 2 3 of of to to3 1 1 Force 2 Living-in Renovation to RFMF Infrastructure Nasonini Guard Room Renovation Storey Ablutions Renovation to Storey Barracks Land Operations Block LFC Lecture Room Renovations to MQ 3 Other Ranks(ORs) Living-in Barracks Laundry Renovations Welfare Center Upgrade of Logistic Support Unit Upgrade LSU Bay–Internal Partition Phase 1 Upgrade LSU Bay–Internal Partition Phase 2 Tiling of ORs Mess Dining Hall Upgrade of Infrastructure and Amenities Nabuni Upgrade SHQ Room SHQ Roofing Repairs SHQ Finance Conference Room Re-roofing Materials Stores Upgrade of Kitchen Extension Upgrade of Sukanaivalu Barracks Upgrade accommodation Block 1 Upgrade Accommodation Block 2 Renovations welfare facility Conference Road to of of of Republic of Fiji Military Forces Section 19 Page 42 REPORT OF THE AUDITOR GENERALOF THE REPUBLIC OF FIJI – JUNE 2017________________________________ Project Contractor Contract Cost Date Project Complet ed Defect Liability Period (DLP) days Ending Date for DLP EFT Date EFT No.
Amount ($) Renovations to transit quarters 6 29,000 01.07.16 90 29.09.16 11.07.16 15548 2,900 Appendix 19.6 Examples of rations purchased during the year Date Cheque No.
Particulars Amount Daily ration state prepared Ration strength forecast prepared Ration reconciliation book updated 06.06.16 14599 28.06.16 28.06.16 15243 11.07.16 15557 28.06.16 15264 Purchase of meats ORS and for Purchase of meats ORS Meats rootcrops Blackrock Purchase of meats SGTs mess Purchase of meats for Stanley - Fiji Navy ($) 5,298 Not prepared 3,967 Not prepared 6,325 Not prepared 651 Not prepared 1,719 Not prepared 28.06.16 28.06.16 28.06.16 Purchases for ORS 653 Not prepared 15245 Purchases Officers Mess for 322 Not prepared Purchases for ORS 2,593 Not prepared 04.07..16 15440 Purchase for FTG 670 Not prepared 31.03.16 13484 06.07.16 15477 12.05.16 14078 27.06.16 15225 TOTAL for ORS Fresh fish for ORS Mess Supplementary meats Mess Vegetables Blackrock Nadi Vegetables Blackrock Nadi 1,350 Not prepared 8,749 Not prepared 4,202 Not prepared 6,762 Not prepared 43,259 Not prepared Not prepared Not prepared Not prepared Not prepared Not prepared Not prepared Not prepared Not prepared Not prepared Not prepared Not prepared Not prepared No No No No No No No No No No No No No Daily ration demand prepared by Supply Company No No No No No No No No No No No No No Republic of Fiji Military Forces Section 19 Page 43 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ___________________________________ Appendix 19.7 Details of Manual Payments Payment ID Voucher Description Gratuity Payment Leave Bal 25357 P/P: 15/11/15 - 14/01/16 Rr 341629 Of 25/02/2016 341680, 341683 Revenue Receipt 5/01/2016 5/01/2016 5/01/2016 5/01/2016 5/01/2016 5/01/2016 5/01/2016 5/01/2016 5/01/2016 5/01/2016 Rr 341576 Of 08/01/2016 Rr 341576 Of 08/01/2016 Rr#341427 Reversal Of Salary 5/01/2016 5/01/2016
 5/01/2016 5/01/2016 5/01/2016 Leave Bal 25357 Leave Pay Rr#341203 Of 29/05/16 Rr# 341651 Of 18/03/16 Sea Going Allce Rr# 341651 Rr# 341657 Of Mar 16 Revsal Pay 6 Rr#341651 Rr#341657 Of Mar 16 Reversal Rr 341651 Of 18/03/2016 Rr# 341651 Of 18/04/16 P/E 24/03/16 Rr # 341655 Of 01/04/16 Rr# 341665 Of 01/04/16 Rr # 341665 Of 01/04/16 Rr#341704 Of 18 May 2016 Rr#341690 Of 04/05/2016 Rr 341576 Of 08/1/16 Rr#341658of 23 March 16 Rr#341690 Rr# 341694 Of 04/05/16 Reversal Of Salary Reversal Of Salary Rr#341692 P/P: 15/11/15 - 14/01/16 Rr#341699 F 05/05/2016 Reversal Of Salary Reversal Of Salary 5/01/2016 Amount ($) Fiji Military Forces Section 20: Page 44 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ___________________________________ Payment ID Voucher Description 73575 73576 73577 73578 13643 14330 14658 13344 14332 14036 14038 14035 12998 13751 13107 12799 13565 12654 13343 12541 12745 13644 13647 13711 14392 12638 Total 5/01/2016 5/01/2016 5/01/2016 5/01/2016 Rr#341651 Of 18 Mar 16 Rr#341692 Reversal Rvsl Pay 6 Rr#341651 Of 18/03 Rr#341703 Wcamp Reversal 8fir Rr#341693 Of 04/05/16 Rr#341692 Of 04/05/2016 P/E 10/03/16 Rr#341651 Of 18/03/16 Rr#341628 Of 19/02/16 Leave Bal 25357 Rr# 341663 Of 01/04/16 P/P: 15/11/15 - 14/01/16 Rr# 341651 Of 18/03/2016 Rr#341576 Of 08 Jan 2016 Drws Refund 29822 Rr# 341679 Of Apr 2016 Rr#341679 Of 08 Apr 16 Rr#341679 Of 08 Apr 16 Rr#341706 Of 18 May 16 Leave Pay Amount ($) 464 464 464 464 461 457 455 453 453 452 441 435 420 370 364 357 321 294 276 275 150 86 86 86 86 33 105,584 Fiji Military Forces Section 20: Page 45 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ___________________________________ Appendix 19.8 Summary of Claims
 Made by Farm Manager Cheque No.
Transportation Vehicle Parts Claim88 ($) ($) 4710 4716 4717 4718 4720 4721 4723 4724 4725 4727 4729 4730 4731 4732 4736 4741 4746 4750 4754 4756 4757 4761 4763 4765 4766 4768 4770 4772 Total Includes fuel and cleaning costs Fiji Military Forces Section 20: Page 46 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ___________________________________ Appendix 19.9 Items Not Taken On Charge Date Cheque Invoice No.
Particulars Personal Equipment 12.04.16 13687 23.06.16 15212 08.02.16 28.04.16 13.05.16 12802 13896 14088 15.06.16 28.06.16 24.05.16 13.07.16 28.06.16 14813 15265 14374 15596 15255 28.06.16 15250 23.05.16 14338 11.07.16 15509 Vaccines 05.04.16 13512 14.06.16 14766 27.05.16 149103-14903 27.05.16 19101-004338 33 863 NMP24 NMP25 NMP26 NMP27 30.05.16 149103-000836 NMP28 30.05.16 149102-000344 NMP29 178675 100187 99373 1451 1511 1342 Rations 28.06.16 15243 28.06.16 15245 04.07..16 15440 14.06.16 15226 12.07.16 15575 Capital Purchases 6/20/2016 15100 20/07/16 74728 6/6/2016 74505 20/07/16 74729 TOTAL 19357 19873 9352 10026 872 869 1374 1358 2016-AA-008 2016-AA-023 878 Mens trousers and long sleeve shirts (500 pieces each) Peacekeeping.
Mens trousers and long sleeve shirts (500 pieces each) Peacekeeping Calf boot for UNAMI & UNIFIL issue - Peacekeeping Army boots MFO 250 (Peacekeeping) Camal packs - Olive green 200 pieces (Peacekeeping) Lanyards Red Infantry (ME) 500, Engineers Lanyard Black 500 (Peacekeeping) 100 Stretcher bed for LSU stock Sam Brown Belt (100@198 each).
Purchases for BOD 200 pieces of aluminium mess tin for LSU stock Purchase of 500 military blankets for BOD stock Chevron 2 Bar LSU Stock - 1,000 002016P032 5 Gallons gun cleaning oil - LSU Armoury Waist webbing green 100 pieces 3FIR 20 pieces of 35L Urn - Olive Green (3FIR) Vaccines Vaccines Vaccines Vaccines Vaccines Vaccines Purchase of general groceries for ration packs for 84 persons for 3FIR training Nausori Highlands Purchases for ORS Purchase for FTG Groceries Groceries Groceries Generator Weapons Communications equipment Communications equipment Amount ($) Fiji Military Forces Section 20: Page 47 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017 ___________________________________ Appendix 19.10 Purchases from a Pharmaceutical Company Date Cheque No.
05.04.16 14.06.16 13512 14766 Total Amount VEP ($) 31,905 23,385 49,885 48,857 49,957 49,210 253,200 LPO date LPO No.

Invoice Date Invoice No.
17.11.15 06.05.16 27.05.16 30.05.16 30.05.16 19102-024193 19102-024731 149103-14903 19101-004338 49103-000836 49102-000344 26.01.16 NMP24 26.02.16 NMP25 09.05.16 NMP26 17.06.16 NMP27 17.06.16 NMP28 17.06.16 NMP29 Fiji Military Forces Section 20: Page 48 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017____________________________ Section 20 Fiji Police Force Role and Responsibilities The Fiji Police Force has the important responsibility of keeping the people of Fiji safe by maintaining law and order, protecting property and upholding the law.
Every Fijian should feel secure in their homes and free to go about their daily business without any form of criminal violence or intimidation.

Crimes need to be properly investigated, wrongdoers need to be quickly identified and cases need to be brought to trial through Criminal Justice System.

To do this, Fiji needs a Police Force that is professional, well equipped and trained, adequately compensated and supported by appropriate technology.
The Government has allocated the Fiji Police Force a total budget of $126.3 million.
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 Irregularities in the Operating Trust Fund Accounts ................................................................................................. 3 20.5 Revolving Fund Account .......................................................................................................................................... 6 20.6 Misallocation of Capital Purchase Appropriation ...................................................................................................... 7 20.7 Anomalies noted in the revenue ............................................................................................................................... 8 PART A: FINANCIAL STATEMENTS 20.1 Audit Opinion The audit of the 2016 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 $1,296,823 and incurred expenditure totalling $66,055,509 for the seven months period ended 31 July 2016.

Refer to Table 20.1 for details.
Fiji Police Force Section 20: Page 1 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017____________________________ Table 20.1: Statement of Receipts and Expenditure for 2016 Description 2016 ($) 2015 ($) 271,842 271,842 2,552,320 20,590 20,590 1,296,823 2,107,790 172,688 2,280,478 1,076,414 199,819 1,276,233 RECEIPTS State Revenue Police Clearance Fees Licenses Fees Total State Revenue Agency Revenue Other Agency Revenue Total Agency Revenue TOTAL REVENUE EXPENDITURES 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 * (Funds provided from Head 50 Miscellaneous Expenditure Budget of $25,466,191 is not included in this total) 87,623,800 577,656 3,764,573 5,902,649 5,080,681 34,211 830,984 103,814,554 55,524,329 389,751 2,286,845 3,464,932 1,380,823 3,023 495,221 63,544,924 459,628 1,993,778 2,453,406 2,778,164 * 109,046,124 200,000 1,605,941 1,805,941 704,644 66,055,509 The financial year end for Government was changed from 31 December to 31 July in accordance with the Financial Management (Amendment) Act 2016.
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.

20.3 Appropriation Statement The Force incurred expenditure totalling $66,055,509 against the revised budget of $126,305,357 resulting in savings of $60,249,848 or 48%.
The large savings was due to the budget being for the whole of 2016 while expenditures were only for seven months up to 31 July 2016.

Details of actual expenditure against the budget estimates are provided in Table 20.2.
Table 20.2: Appropriation Statement for 2016 SEG Item Operating Expenditure Established staff Government Wage Earner Travel and communications Maintenance & operations 1 2 3 4 Fiji Police Force Budget Estimate ($) Changes ($) Revised Estimate ($) Actual Expenditure ($) Lapsed Appropriation ($) 99,311,534 637,576 3,684,000 6,179,000 (102,158) 102,158 (119,174) 19,174 99,209,376 739,734 3,564,826 6,198,174 55,524,329 389,751 2,286,845 3,464,932 43,685,047 349,983 1,277,981 2,733,242 Section 20: Page 2 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017____________________________ SEG Item Purchase of goods and services Operating grants and transfers Special expenditures Total Operating Expenditure Capital Expenditure Construction Purchases Total Capital Expenditure Value Added Tax TOTAL EXPENDITURE Budget Estimate ($) 4,730,241 90,000 1,207,850 115,840,201 3,660,000 4,637,820 8,297,820 2,167,336 126,305,357 Changes ($) (100,000) --- ---- (200,000) Revised Estimate ($) 4,630,241 90,000 1,207,850 115,640,201 200,000 --- 200,000 --- --- 3,860,000 4,637,820 8,497,820 2,167,336 126,305,357 Actual Expenditure ($) 1,380,823 3,023 495,221 63,544,924 200,000 1,605,941 1,805,941 704,644 66,055,509 Lapsed Appropriation ($) 3,249,418 86,977 712,629 52,095,277 3,660,000 3,031,879 6,691,879 1,462,692 60,249,848 PART B: AUDIT FINDINGS 20.4 Irregularities in the Operating Trust Fund 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 Within 3 days of receiving the monthly general ledger reports from the Ministry of Economy, the Assistant Accounts Officer Ledgers shall reconcile the ledger balances to the general ledger reports and prepare a ledger reconciliation statement.2 Any errors or misallocations must be immediately adjusted by way of journal vouchers.3 Audit review of the operating trust fund account revealed the following anomalies:  The operating
 trust fund account had a credit balance of $2,365,702.07 as at 31/07/16 which included significant outstanding balances from prior years.
Refer to Table 20.3 for details.

Table 20.3: Details of Accounts with Significant Balances carried forward to 2016 Account No.
Description 1-20101-20101-863201 1-20101-20101-861517 1-20101-20101-861902 1-20101-20101-861917 VAT From Provision Of Goods & Services 307 PD Police Service Credit Union 204 PD Deposit A/C Recoverable 437 PD Improved Forestry Total Amount ($) 956,088.32 748,208.86 85,245.69 31,454.35 1,820,997.22  As at 31 July 2016, the Force’s operating trust fund accounts had overdrawn balances totalling $25,980.05.

The Force could not provide reasons for the overdrawn balances.Refer to Table 20.4 for details.
1 Fiji Police Force Finance Manual 2014 Part 15 2 Fiji Police Force Finance Manual 2014 Part 15.3.3 3 Fiji Police Force Finance Manual 2014 Part 15.3.4 Fiji Police Force Section 20: Page 3 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017____________________________ Table 20.4: Overdrawn Operating Trust Fund Accounts Account Description 241 PD CMLA 301 PD FPS Credit Union 341 PD Maintenance Suva 342 PD Maintenance Nausori 345 PD Maintenance Ba 346 PD Maintenance Lautoka 347 PD Maintenance Nadi 348 PD Maintenance Sigatoka 350 PD Maintenance Levuka 1-20101-20101-861202 1-20101-20101-861511 1-20101-20101-861533 WESRAM Finance 1-20101-20101-861537 Carpenters Fiji Ltd 1-20101-20101-861538 On Time Finance Ltd 1-20101-20101-861601 1-20101-20101-861602 1-20101-20101-861605 1-20101-20101-861606 1-20101-20101-861607 1-20101-20101-861608 1-20101-20101-861610 1-20101-20101-861616 PD Maintenance Nasinu 1-20101-20101-861701 1-20101-20101-861911 1-20101-20101-861924 Central Finance 329 1-20101-20101-861926 Payroll Deduction – Vinod Patel 1-20101-20101-861927 PD Fijian Holding Unit Trust 1-20101-20101-861930 Payroll Deduction Unit Trust of Fiji Total 357 PD Rates Suva 385 D Sports & Social Amount As at 31/07/16 ($) 148.09 107.93 1,085.20 17,808.45 589.12 940.00 525.00 87.50 30.00 60.00 110.00 50.00 240.00 40.00 1,728.00 880.00 1,260.76 250.00 40.00 25,980.05 The above findings indicate lack of proper controls and supervisory checks in the administration of the operating trust fund account.
Recommendations The Force should:    investigate and rectify carry forward balances from prior years; ensure that trust funds are not overdrawn at any time and investigate and rectify the overdrawn balances; and ensure that controls and supervisory checks in the Accounts Section is strengthened to avoid such discrepancies from incurring in future.

Management Comments We have amended the reconciliation for the mentioned months and have sent it to MOE.
 The mentioned deductions are for Special Constables Pay 08/16 dated 15/04/17 (Refer table 7.4).

These deductions are showing in payroll however it did not affect the General Ledger.

 As stated in the Draft Audit Report, these allocations are not overdrawn but rather there are some incomplete processes by MOE.

 Moreover, the payments to the under mentioned vendors were properly made as per the payroll deduction report for Pay 08/16.

 The mentioned entries will be verified with MOE and journalized.
There are also some misallocations and journals were raised to adjust the incomplete reconciliation.
Fiji Police Force Section 20: Page 4 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017____________________________ Account Description 241 PD CMLA 301 PD FPS Credit Union 1-20101-20101-861202 1-20101-20101-861511 1-20101-20101-861533 Wesram Finance 1-20101-20101-861537 Carpenters Fiji Ltd 1-20101-20101-861538 Ontime Finance Ltd 1-20101-20101-861601 1-20101-20101-861602 1-20101-20101-861605 1-20101-20101-861606 1-20101-20101-861607 1-20101-20101-861608 1-20101-20101-861610 1-20101-20101-861616 1-20101-20101-861701 1-20101-20101-861911 1-20101-20101-861924 Central Finance 329 1-20101-20101-861926 1-20101-20101-861927 1-20101-20101-861930 341 PD Maintenance Suva 342 PD Maintenance Nausori 345 PD Maintenance Ba 346 PD Maintenance Lautoka 347 PD Maintenance Nadi 348 PD Maintenance Sigatoka 350 PD Maintenance Levuka PD Maintenance Nasinu 357 PD Rates Suva 385 D Sports & Social Payroll Deduction – Vinod Patel PD Fijian Holding Unit Trust Payroll Deduction Unit Trust of Fiji Remarks Amount as at 31/07/16 ($) 148.09 Credits not loaded – Pay 8/16 107.93 Credits not loaded – Pay 8/16 1,085.20 Credits not loaded – Pay 8/16 17,808.45 Credits not loaded – Pay 8/16 589.12 Credits not loaded – Pay 8/16 940.00 Credits not loaded – Pay 8/16 525.00 Credits not loaded – Pay 8/16 87.50 Credits not loaded – Pay 8/16 30.00 Credits not loaded – Pay 8/16 60.00 Credits not loaded – Pay 8/16 110.00 Credits not loaded – Pay 8/16 50.00 Credits not loaded – Pay 8/16 240.00 Credits not loaded – Pay 8/16 40.00 Credits not loaded – Pay 8/16 1,728.00 Credits not loaded – Pay 8/16 880.00 Credits not loaded – Pay 8/16 1,260.76 Credits not loaded – Pay 8/16 250.00 Credits not loaded – Pay 8/16 40.00 Credits not loaded – Pay 8/16 Total 25,980.05 Table - Details of Accounts with Significant Balances carried forward to 2016 Account No 1-20101-20101-863201 1-20101-20101-861517 1-20101-20101-861902 1-20101-20101-861917 Total Description VAT From Provision of Goods & Services 307 PD Police Service credit Union 204 PD Deposit A/C
 Recoverable 437 PD Improved Forestry Amount ($) 956,088.32 748,208.86 85,245.69 31,454.35 1,820,997.22  The carry forward figures have accumulated from previous years since 2006.
Most of the entries were due to incomplete transaction and misallocations.

 The Force has started working on these balances.

The working of these allocations will be right from the time FMIS was implemented.

 Moreover, when FMIS system was implemented the Data entry clerks were new which also contributed towards these figures.

1.
1.

1-20101-20101-863201 - VAT From Provision of Goods & Services - $956,088.32  The payment of VAT to FIRCA was charged under the Operating Expenditures instead of Operating Trust 2.

1-20101-20101-861517 – 307 PD Police Service Credit Union - $748,208.86  The payment of the Police Officers contributions were paid to Police Credit Union but on different allocations being charged.

Example: the cheque for Police Credit Union was paid from Police Welfare Scheme which is part of the write off for 2014.
In 2015 FMIS was trying to transfer all the dormant accounts (operating trust fund account) as fund account which the Force was trying to do the payment during the closing of the financial year but operating expenditure allocation was debit instead of the operating trust fund.

Fiji Police Force Section 20: Page 5 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017____________________________ 3.
1-20101-20101-861902 – 204 PD Deposit A/C Recoverable - $85,245.69  This code was used to recover any accountable advance that was not acquitted by the officer  during his/her tour of duty but not journalized to clear the debits in the RFA.

It is also used to pay other institution such as Mataivalu Savings, Army Medical Scheme and Small Claim tribunal (Courts order) 4.
1-20101-20101-861917- 437 PD Improved Forestry - $31,454.35  The money was receipted under this allocation being funds received from other donors but not fully utilized.

The Force has placed internal control procedures now.

The Assistant Accounts Officer Salaries must check funds availability on all payroll deductions with FMIS General Ledger before facilitating a payment.
20.5 Revolving Fund Account 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.4 A ledger shall be maintained for advances, petty cash, accounts payable, revolving fund accounts, inter-departmental clearance accounts, and expenditure and commitment accounts.5 Within 3 days of receiving the monthly general ledger reports from the Ministry of Finance, the Assistant Accounts Officer Ledgers shall reconcile the ledger balances to the general ledger reports and prepare a ledger reconciliation statement.6 The Force Accountant must ensure that: i. ii.
all balances are accurate and adequately supported; any misallocations or outstanding balances from the previous month have been dealt with.7 Audit review of the Revolving Fund Account-Prepayments and Accrued Income revealed the following anomalies:  Allocations 1-20101-20999-570101 and 1-20102-20101-570301 had debit balances amounting to $114,920.52 and $432, respectively which had been carried forward from previous years.
Since detailed breakdown of these balances was not provided for audit review, the correctness of the above balances could not be substantiated.

 As at 31/07/16, allocation 1-20101-20101-570301 had a debit balance of $132,174.09 of which $120,421.01 relates to carried forward balances from previous years.

The audit was also not able to substantiate the closing balance as at 31/07/16 due to errors in the July 2016 reconciliations which were submitted for review.
The above findings indicate breakdown in controls relating to the administration of the account.

As a result, public funds are held up as outstanding accountable advance.
4 Fiji Police Force Finance Manual 2014 Part 15 5 Fiji Police Force Finance Manual 2014 Part 15:3:1 6 Fiji Police Force Finance Manual 2014 Part 15:3:3 7 Fiji Police Force Finance Manual 2014 Part 15:3:6 Fiji Police Force Section 20: Page 6 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017____________________________ Recommendations The Force should:  ensure that all relevant supporting documents for all RFA accounts are properly maintained and produced for audit scrutiny; and  investigate and rectify the long outstanding balances in the Revolving Fund Account.
Management Comments  The two other RFA allocations that is, 12010120999570101 and 12010220101570301 have been zerorized and inactivated by MOE.

 As for allocation 12010120101570301, there was variance of $11,753.08.

This amount was initiated for salary recovery under code 204.

The journals for the recoveries were made in this accounting period (2016/2017).

Therefore all advances were properly acquitted and recovery was made on late and incomplete acquittals for the financial period 2016.
 The Force has already reinforced the policy on salary recovery if advances are exceeding the seven days with the 12% interest (non refundable) chargers on late acquittals effective from Pay 18/2016.
20.6 Misallocation of Capital Purchase Appropriation Within 3 days of receiving the monthly general ledger reports from the Ministry of Economy, the Assistant Accounts Officer Ledgers shall reconcile the ledger balances to the general ledger reports and prepare a ledger reconciliation statement.8 Any errors or misallocations must be immediately adjusted by way of journal vouchers.9 The audit noted that uniform accessories worth $391,839.05 were procured from the SEG 9 Standard Equipment allocation (1-20101-20101-090160) instead of SEG 5 Uniform and Accessories and Clothing, Equipment and Stores allocations.
Refer to Table 20.5 for details: Table 20.5: Purchase of Uniform Accessories recorded in Capital Purchases Date Cheque ID Description 13/07/16 10694 Purchases uniforms accessories (Black Leather Belt, Beret Navy Blue with Red Diamond, Medal, Sam Brown Belt, File Black, Torch Megalite and Vest Accessories for stores) vide tender 150/14 for OC/Storage & Supply Unit.
Amount ($) Expenditure Allocation 391,839.05 1-20101-20101-090160 The above finding indicates misallocation of expenditure and improper use of budgetary provisions.
8 Fiji Police Force Finance Manual 2014 – Section 15.3.3 9 Fiji Police Force Finance Manual 2014 – Section 15.3.4 Fiji Police Force Section 20: Page 7 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017____________________________ Recommendations  The Force should be vigilant and ensure that the capital purchase funds are used for its intended purpose; and  The Force should also ensure that mispostings are adjusted in a timely manner so that expenditures incurred are properly accounted against the respective budgetary allocations.
Management Comments  We take note of the recommendations made herewith.

However, when the initial Tender was called for the Purchase of Police Uniform Accessories, Standard Equipment Items were was included within the tender and funds for this purchase were to be facilitated from SEG-5 (Uniform & Accessories) and SEG-9 (Purchase of Standard Equipment).
Given the urgent need of Accessories and Standard Equipment on the ground to conduct Police Operations effectively & efficiently the Agency directly debited the SEG-9 Allocations (Purchase of Standard Equipment).

 The Force will strengthen the monitoring capabilities and Virement applications will be made before any such procurement is made in future.

20.7 Anomalies noted in the revenue The Assistant Accounts Officer Revenue shall ensure that the revenue received is banked on a daily basis at least.
The lodgement form shall be prepared in triplicate detailing the deposits to be made.

10 The Assistant Accounts Officer Revenue shall prepare a journal voucher or journal entry input form before posting revenue transactions into the general ledger.11 Each Accounting Head must ensure that VAT is correctly accounted for and remitted as required.12 Audit review of revenue records revealed the following anomalies:  Considerable delays were noted in the lodgement of revenue by the Force.
Refer to Table 20.6 for details.
Table 20.6: Delays in Lodgments Station Receipt No Date Receipted Amount ($) Date Deposited Delayed Period Kadavu Police Station Kadavu Police Station Kadavu Police Station Kadavu Police Station Vunidawa Police Station Vunidawa Police Station Vunidawa Police Station Kadavu Police Station Kadavu Police Station Levuka Police Station Levuka Police Station 040843, 040844 040845, 040846 040847 040848 950025 950026 950023 040858 040859 456321 456337 08/02/16 09/02/16 12/02/16 15/02/16 29/03/16 31/03/16 02/02/16 23/03/16 15/04/16 08/01/16 19/04/16 116.20 174.40 19.00 21.80 21.50 21.50 21.50 21.80 21.80 51.10 36.30 13/07/16 13/07/16 13/07/16 13/07/16 05/04/16 05/04/16 14/03/16 21/04/16 21/04/16 13/01/16 29/04/16 5 months 5 months 5 months 5 months 7 days 5 days 1 month 29 days 6 days 5 days 10 days 10 Fiji Police Force Finance Manual Section 5.4.2 11 Fiji police Force Finance Manual Section 5.5.4 12 Finance Instructions 2010 Section 21.
(1).

e Fiji Police Force Section 20: Page 8 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017____________________________ Station Receipt No Date Receipted Amount ($) Date Deposited Delayed Period Levuka Police Station 456338 26/04/16 Total 19.00 545.90 29/04/16 3 days  Instances were noted whereby the total revenue including VAT was posted to the revenue allocation.

Refer to Table 20.7 for examples.
Table 20.7: VAT Inclusive Revenue amounts posted into FMIS Receipt No 229772 - 229793 485413 -485491 485644- 485724 485725 - 485797 485798 - 485850 486218 - 486302 486303 - 486362 486363 - 486467 486468 - 486555 486556 - 486684 Date Banked 05/01/16 – 22/01/16 18/07/16 20/07/16 21/07/16 22/07/16 25/07/16 26/07/16 27/07/16 28/07/16 29/07/16 Amount Posted VIP ($) 28,759.61 6,245.05 7,460.05 4,881.35 4,593.90 6,904.00 4,141.00 6,943.05 8,324.55 6,924.45 VAT Amount Mis-posted ($) 2,374.65 515.65 615.97 403.05 379.31 570.06 341.92 573.28 687.35 571.74  Instances were also noted whereby revenue receipts could not be located although revenue received on the receipts sequence before and after these receipts were found to be banked.
Refer to Table 20.8 for examples.

Table 20.8: Untraceable Revenue Receipts Station Taveuni Police Station Receipt No 363043 – 363050 363051 – 363064 363079 – 363081 363095 363099 – 363100 363108 363119 363123 – 363129 363133 – 363141 363143 363147 – 363152 363153 363162 – 363163 363167 – 363200 626752 626754 – 626800 626800 – 626817 626821 – 626823 367961 367964-368000 The above anomalies indicate poor controls over the receipt, accounting and banking of monies.
Delays in lodgement increase the risk of misappropriation and theft of public funds.
Fiji Police Force Section 20: Page 9 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – JUNE 2017____________________________ Recommendations The Force should: ensure that all cash received are banked intact daily;   VAT portion from the total revenue receipted is posted to relevant VAT allocation (SLG86) and remitted to FRCA on a timely basis; investigate the anomalies highlighted and take corrective measures; and   provide refresher training to revenue collectors and FMIS General Ledger Data Clerk.
Management Comments  Please refer to the tabulated response hereunder: Receipt No.
040843 - 040858 Station Kadavu Vunidawa 950023 - 950026 March 2016 Levuka 456321 - 456338 Date Receipted Lodgement Date 08/02-23/03/16 13/07/16, 21/04/16 April 2016 Remarks The delay in lodgements date were due to the following reasons:  Adverse weather condition (TC Winston)  Power disruptions  Receipting engaged operation duties in officer Police  Unavailability replacement collector of revenue  Books were kept under lock and key  According to Table 7.9, the VIP amount was posted into the FMIS system.
There were two separate batches posted amounting to $28,759.61 and $65,103.95 respectively.

The batch amounting to $28,759.61 was the January which was sent to MOE to post it for the January period.

However, MOE posted through journals instead of AR module and the VIP amount was posted.

 The same happened with the second batch.

The second batch was posted during the closing of accounts and again instead of posting the AR entries through AR module, journals were entered with the VIP amounts.
 Upon enquiring with MOE, it was advised that the journals can be raised to correct the entries through the auditors.

(Find attached the excel sheets forwarded to MOE for posting and also the email from MOE).

 The missing receipts for Taveuni PS are already under investigation.

We have appointed two new revenue collectors for Taveuni effective from 28/03/2017.

 The previous revenue collector is under investigation.
The Force will take appropriate action in providing refresher training to the Revenue Collectors and the FMIS general ledger data clerk.

An inspection and training tour will be arranged to visit all divisions to train and guide the revenue collectors in divisions.

Fiji Police Force Section 20: Page 10