Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1697726470864.pdf (Fiji)
REPORT OF THE AUDITOR-GENERAL OF REPUBLIC OF FIJI AUDIT REPORT ON STATE - OWNED ENTITIES & STATUTORY AUTHORITIES FOR 2015 PARLIAMENT OF FIJI PARLIAMENTARY PAPER NO.

128 OF 2017 REPORT OF THE AUDITOR-GENERAL OF REPUBLIC OF FIJI AUDIT REPORT ON STATE - OWNED ENTITIES & STATUTORY AUTHORITIES FOR 2015 PARLIAMENT OF FIJI PARLIAMENTARY PAPER NO.
128 OF 2017 OFFICE OF THE AUDITOR-GENERAL – REPUBLIC OF FIJI Location : Level 8, Ratu Sukuna House 2-10 MacArthur Street Suva, Fiji Postal Address : P O BOX 2214, Government Buildings Suva, Fiji Telephone : (679) 330 9032 Email : info@auditorgeneral.gov.fj Website : www.oag.gov.fj Office of the Auditor General – 2015 financial audits _________________________________________________________________________________________________ Report on state-owned entities & statutory authorities 1 Office of the Auditor General – 2015 financial audits The Office of the Auditor-General – Republic of Fiji The Office of the Auditor-General is established as an Independent Office by the Constitution of Republic of Fiji.
Its roles and responsibilities include expressing an opinion on the financial statements of state-owned entities.

These audits are carried out by the Auditor-General on behalf of Parliament.

At least once every year, the Auditor General must report to Parliament on the audits conducted and on other significant matters the Auditor-General wishes to bring to the attention of Parliament.

This report satisfies these requirements.


The Office of the Auditor-General notes the impact of its reports to Parliament on the ordinary citizens and strives for accuracy and high quality reporting including recommendations which are not only value-adding to the entity subject to audit but its customers, the general public as well.
_________________________________________________________________________________________________ Report on state-owned entities & statutory authorities 2 TABLE OF CONTENTS Office of the Auditor General – 2015 financial audits 1.0 Introduction ..................................................................................................................... 5 2.0 Types of audit opinions issued ....................................................................................... 6 3.0 Results of our audits ....................................................................................................... 7 3.1 Quality and timeliness of financial reports ................................................................. 7 3.2 Audit opinions issued .................................................................................................. 7 3.2.1 Modified opinions ..................................................................................................... 7 3.2.2 Unmodified opinions ................................................................................................. 7 3.3 Other significant matters ............................................................................................. 7 3.4 Internal controls ........................................................................................................... 8 3.5 Delays in completion of audits .................................................................................... 9 3.6 Entities not subject to audit by Auditor General ...................................................... 10 3.7 Audit conclusion .................................................................................................... 11 3.8 Reference to comments ............................................................................................. 12 4.0 Context ........................................................................................................................... 13 4.1 Legislative framework ................................................................................................ 13 4.2 Government Commercial Companies & Commercial Statutory Authorities (GCCs/CSAs) .................................................................................................................... 13 4.3 Statutory Authorities .................................................................................................. 14 5.0 Types of agencies .......................................................................................................... 15 6.0 Audit Opinion results ..................................................................................................... 16 6.1 Modified audit opinions ............................................................................................. 17 Fiji Broadcasting Corporation Limited (FBCL) ........................................................... 17 Post Fiji Limited (PFL) .................................................................................................. 17 Public Rental Board (PRB) ........................................................................................... 17 Maritime Safety Authority of Fiji (MSAF) ..................................................................... 18 Water Authority of Fiji (WAF) ....................................................................................... 18 6.2 Emphasis of Matter .................................................................................................... 19 Public Rental Board ...................................................................................................... 19 Maritime Safety Authority of Fiji .................................................................................. 19 Water Authority of Fiji ................................................................................................... 19 Land Transport Authority (LTA) ................................................................................... 20 Sugar Industry Tribunal ................................................................................................ 20 Fijian Elections Office ................................................................................................... 20 _________________________________________________________________________________________________ Report on state-owned entities & statutory authorities 3 Office of the Auditor General – 2015 financial audits Fiji Higher Education Commission .............................................................................. 21 6.3 Disclaimer of Opinion ................................................................................................. 22 National Substance Abuse Advisory Council ............................................................. 22 6.4 Other Significant Matters ........................................................................................... 23 6.4.1 Airports Fiji Limited ................................................................................................. 23 6.4.2 Post Fiji Limited ...................................................................................................... 25 6.4.3 Fiji Electricity Authority ........................................................................................... 26 6.4.4 Fiji Broadcasting Corporation Limited ..................................................................... 27 6.4.5 Fiji Roads Authority ................................................................................................ 28 6.4.6 Copra Millers of Fiji Limited (CMFL) ....................................................................... 29 6.4.7 Maritime Safety Authority of Fiji .............................................................................. 30 6.4.8 Public Rental Board ............................................................................................... 32 6.4.9 Water Authority of Fiji ............................................................................................. 33 6.4.10 Fiji Development Bank (FDB) ............................................................................... 35 6.4.11 Fiji Development Bank Nominees Ltd ................................................................... 35 6.4.12 Housing Authority of Fiji ....................................................................................... 36 6.4.13 Film Fiji ................................................................................................................ 37 6.4.14 Sugar Industry Tribunal ........................................................................................ 38 6.4.15 Fiji Higher Education Commission ........................................................................ 39 7.0 Assessment of Internal Controls .................................................................................. 40 7.1 Auditing internal controls .......................................................................................... 40 7.2 Internal controls ......................................................................................................... 40 7.3 Quality of draft financial statements by entities ....................................................... 42 7.4 Timeliness of draft financial statements for entities ................................................ 42 8.0 Results summary ........................................................................................................... 43 Appendix A: Audits not complete as at 31 October 2017 .................................................. 45 Appendix B: Audit Opinion Results .................................................................................... 47 Appendix C: Entities not subject to audit by the Auditor-General ................................... 50 Appendix D: Responses from entities ................................................................................ 52 Appendix E: Glossary .......................................................................................................... 68 _________________________________________________________________________________________________ Report on state-owned entities & statutory authorities 4 Office of the Auditor General – 2015 financial audits 1.0 Introduction All state-owned entities prepare annual financial statements.
Directors and management of these entities are responsible for the preparation and fair presentation of the financial statements in accordance with International Financial Reporting Standards and requirements of applicable laws and regulations.
This responsibility includes designing, implementing and maintaining internal controls relevant to the preparation of financial statements that are free from material misstatement, whether due to fraud or error, selecting appropriate accounting policies, and making accounting estimates that are reasonable in the circumstances.
The Auditor-General is responsible, on behalf of Parliament, for audit of the accounts of all state- owned entities except for its own office and those entities which may be exempted by law.

The Auditor-General may conduct audits in the manner considered appropriate but must ensure that they are conducted in a competent manner having regard to assessment of effectiveness of any relevant internal control system.
The Auditor-General must carry out the audit in accordance with the relevant provisions of the standards on auditing issued by the Fiji Institute of Accountants or other relevant standards considered appropriate.

Following completion of an audit, the Auditor General must give an opinion on each set of financial statements audited.

In addition, an audit memorandum or management letter should be issued to the responsible authority for each entity audited.
The Auditor General’s responsibility is to express an opinion on these financial statements based on his or her audit in accordance with the International Standards on Auditing (ISA).

Those standards require the Auditor General to comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements.

The procedures selected depend on the auditor’s judgment including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
In making those risk assessments, the auditor considers internal controls relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control.
An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

This report summarizes our analysis of the internal controls of state-owned entities for which audit opinions were issued on the 2015 financial statements and the timeliness and quality of financial reporting by these entities.
It is important to note that the deficiencies detailed in this report were identified during our audit and may have been subsequently resolved by the entity.

These have been included in this report as they impacted on the overall system of control of the entities during 2015.
_________________________________________________________________________________________________ Report on state-owned entities & statutory authorities 5 Office of the Auditor General – 2015 financial audits 2.0 Types of audit opinions issued In accordance with International Standard on Auditing, we express an unmodified opinion (unqualified) when the financial statements are prepared in accordance with the International Financial Reporting Standards and with relevant legislative requirements.
This type of opinion indicates that material misstatements, individually or in the aggregate, were not noted in our audit, which would affect the financial statements of an entity.
We issue a modified opinion (qualified) when having obtained sufficient appropriate audit evidence, we conclude that misstatements, individually or in the aggregate, are material, but not pervasive, to the financial statements; or we are unable to obtain sufficient appropriate audit evidence on which to base the opinion, but the auditor concludes that the possible effects on the financial statements of undetected misstatements, if any, could be material but not pervasive.
An adverse opinion is expressed when we, having obtained sufficient appropriate audit evidence, conclude that misstatements, individually or in the aggregate, are both material and pervasive to the financial statements.

We issue a Disclaimer of Opinion when we are unable to obtain sufficient appropriate audit evidence on which to base the opinion, and we conclude that the possible effects on the financial statements of undetected misstatements, if any, could be both material and pervasive.
We include an Emphasis of Matter paragraph in the audit report to highlight an issue that will help the user better understand the financial statements.

We also include an Other Matter paragraph to highlight a matter that is relevant to users’ understanding of the audit report.
_________________________________________________________________________________________________ Report on state-owned entities & statutory authorities 6 Office of the Auditor General – 2015 financial audits 3.0 Results of our audits As at 31 October 2017, we issued 29 audit opinions on the 2015 financial statements for the various entities.

3.1 Quality and timeliness of financial reports The financial statements of most entities audited were timely and generally of good quality.
However, further improvements can be made to enhance the quality and timeliness of submission of financial statements for our audit.

3.2 Audit opinions issued 3.2.1 Modified opinions We issued modified opinions on five of the 2015 financial statements completed for the various entities with one entity issued a disclaimer of opinion.

Audit opinions of a number of entities was modified due to a circular issued by the Ministry of Public Enterprises on Cabinet Decision No.
357 of 2012 which required accounting for all government grants received from 1 January 2011 as capital contributions.
We advised the Ministry that this was a departure from the International Financial Reporting Standards for Small and Medium-sized Entities (IFRS for SMEs) Section 24 – Government Grants and International Accounting Standard (IAS) 20 - Accounting for Government Grants and Disclosure of Government Assistance which require government grants to be recognised in profit or loss as income when grant proceeds are receivable or when performance conditions are met.
Consequently, on 16 March 2016, the Ministry advised all state-owned entities to account for the grants as required by the IAS.

The affected entities have agreed to make the required adjustments in the 2016 financial statements.

3.2.2 Unmodified opinions We issued unmodified opinions on 23 or 79% of the 2015 financial statements audited for the various entities.

This means that material misstatements were not noted in majority of the entities which were audited.
3.3 Other significant matters The Audit Act 1969 requires, amongst other things, that the Auditor-General must report on other significant matters which the Auditor-General wishes to bring to the attention of Parliament.

Other significant matters highlighted in this report, include control weaknesses which could cause or is causing severe disruption to the process or on the ability of an auditee to achieve process objectives and comply with relevant legislation.
It is likely that these issues may have an impact on the operations of the entities in future, if necessary action is not taken to address them.
_________________________________________________________________________________________________ Report on state-owned entities & statutory authorities 7 Common findings which have been reported under other significant matters include the following: Office of the Auditor General – 2015 financial audits • Fixed assets were carried at zero book values although these assets were used by entities in their operations.

Consequently, the depreciation expense has not been charged on these assets.
• Physical verification of fixed assets was not carried out to determine their existence, condition and use.

As a result, it was not possible to determine that all assets belonging to entities were used to generate economic activity for the respective entities.

• Some entities did not have the desired number of board members to promote good corporate governance practises.
• Fixed Asset Registers were not updated on a timely basis or did not contain the required information which could lead to misstatement of fixed asset balances.

• Fixed assets relating to core-business of certain entities were not insured hence increasing business continuity risk in times of disasters.

3.4 Internal controls Good internal controls provide reasonable assurance that an entity is achieving its objectives relating to operations, reporting and compliance.
We assess the financial controls used by the public sector entities using the following five key elements: Control environment – actions, attitudes and values that influence daily operations (i) (ii) Risk assessment – processes for identifying, assessing and managing risk (iii) Monitoring activities – oversight of internal controls for existence and effectiveness (iv) (v) Control activities – policies, procedures, and actions taken to prevent or detect errors Information and communication – systems to inform staff about control responsibilities When we identify that internal controls in any of these elements are missing or are not operating as intended, we refer to them as control deficiencies (audit finding).
If we identify that a control deficiency, either alone or in combination with other deficiencies, may lead to a material misstatement in the entity’s financial statements, we refer to this as a significant audit finding.

If we identify a deficiency (audit finding) with any of these internal controls as part of our audits, we report the finding to the entity’s management.
The Results Summary in Section 8; Page 44 shows the strength of controls in key elements for entities for which 2015 financial statements were audited.

Our audit indicated that Controls Activities was an area where majority of the significant deficiencies were identified.
_________________________________________________________________________________________________ Report on state-owned entities & statutory authorities 8 Office of the Auditor General – 2015 financial audits 3.5 Delays in completion of audits The table below shows the status of audits as at 31 October 2017.

Type of entity Government Commercial Company1 Commercial Statutory Authority Re-organized entities Statutory Authorities Total no.

of.
of.

Entities Audited 92 4 3 28 Audits up-to- date Audits delayed % Delayed 5 3 2 15 4 1 1 13 44 25 33 46 Audit of six Government Commercial Companies, Commercial Statutory Authorities and Re- organized entities have been delayed.

Similarly, audits of about half of statutory authorities are also yet to be completed.
Audits of state-owned entities have not been completed primarily due to the following: • Delay in submission of draft accounts for audits or draft accounts submitted were incomplete; • Relevant information/records not provided for audit on a timely basis; and • Entities deciding to address issues raised in draft audit reports and resubmission of financial statements for audit.

Efforts are being made to complete the audit of accounts which have been received.
Details of audits not completed are provided in Appendix A.
1 Auditor-General no longer auditor for Fiji Hardwood Corporation Ltd 2 Assets Fiji Limited established on 13 November 2015 _________________________________________________________________________________________________ Report on state-owned entities & statutory authorities 9 3.6 Entities not subject to audit by Auditor General The Auditor-General did not audit the financial statements for a number of entities as their governing bodies had appointed Chartered Accountant firms as external auditors.
Details of entities together with the audit requirements are shown in Appendix C. Office of the Auditor General – 2015 financial audits _________________________________________________________________________________________________ Report on state-owned entities & statutory authorities 10 Office of the Auditor General – 2015 financial audits 3.7 Audit conclusion Unmodified (unqualified) opinions were issued on majority of the 2015 financial statements audited which reflects very positively on the entities.
However, close attention should be given to address matters which have been emphasized in audit reports including those included as other significant matters in management letters.

Timely preparation of quality draft annual financial statements is a major issue which needs to be addressed by those charged with governance of several state-owned entities.
Delays in submission of financial statements for audit prevents the Auditor-General from giving an opinion on them on a timely basis and informing Parliament and other stakeholders of the outcome of such audits.

Furthermore, other significant findings arising from audit of entities for which the Auditor-General is no longer the external auditor cannot be reported to Parliament under the current legislative framework.
Therefore proper consideration should be given prior to change of auditors for state- owned entities.

Identification, valuation and proper accounting of fixed assets needs to be significantly improved in most entities which were audited.

This is particularly important due to huge investments made by entities in fixed assets.

Opportunities also exist for insurance of critical assets so that business continuity risk can be properly mitigated in times of disasters.
The involvement of line ministries in improving accountability in state-owned entities is noted.

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

It has been noted that it becomes challenging for entities to prepare annual accounts when these have not been done for some time resulting in a backlog.

Line ministries can encourage entities to prepare and submit draft financial statements for audit annually.
_________________________________________________________________________________________________ Report on state-owned entities & statutory authorities 11 Office of the Auditor General – 2015 financial audits 3.8 Reference to comments The comments provided by entities following the audit have been incorporated in this report.

We provided a full copy of the report with request for comment to Ministry of Public Enterprises.
We also provided extracts of the report with request for comment to entities referred to in the report.

Copies of standard letters issued are in Appendix D. As at 13 December 2017, we received responses from a number of entities.

The responses are also in Appendix D. Comments received subsequently would be provided to the Standing Committee on Public Accounts when this report is discussed.
_________________________________________________________________________________________________ Report on state-owned entities & statutory authorities 12 Office of the Auditor General – 2015 financial audits 4.0 Context 4.1 Legislative framework The following legislation establishes the financial accountability frameworks and legislative time frames to complete financial statements audits for state-owned entities.
Entity Type Legislative Framework Legislative Timeframe Commercial Government Companies, Commercial Statutory Authorities, Re-organized Entities • Public Enterprises Act 1996 • Finance Management Act 30th April 2004 Statutory Authorities • Legislation establishing entity and related regulations • Finance Management Act • 3-6 months following end of financial year • Not specified/ as soon as 2004 • Finance Management (Amendment) Act 2016 practicable The respective legislative frameworks indicate the minimum requirements for financial accountability and reporting such as: • Good governance • Financial management and performance • Entity’s performance against corporate intent or plan • Financial reporting • Annual reports 4.2 Government Commercial Companies & Commercial Statutory Authorities (GCCs/CSAs) Each year, GCCs and CSAs are required to present the Annual Reports containing: • Operations of the company or authority and those of subsidiaries during the financial year.
• Audited consolidated financial statements in case of those which have subsidiaries.

• Auditor’s report on the financial statements.


• Contain such information as may be necessary to show the financial performance of the company or authority and its subsidiaries, including comparison of its performance with its statement of corporate intent The Minister responsible for Public Enterprises is required to lay before Parliament the statement of corporate intent of company or entity for that year together with the annual report and audited financial statements for preceding financial year.
_________________________________________________________________________________________________ Report on state-owned entities & statutory authorities 13 Office of the Auditor General – 2015 financial audits 4.3 Statutory Authorities Each year, statutory authorities are required by the legislation governing their operations to submit an annual report containing the audited financial statements and the audit report on the financial statements which are tabled in Parliament by the Minister responsible for the authority.
The audited financial statements are used by a broad range of users such as parliamentarians, non- governmental organisations, donor agencies, employees, suppliers, lenders and the general public.

The Auditor-General’s audit opinion on these financial statements gives assurance to the users that the financial statements are accurate and can be relied upon.
_________________________________________________________________________________________________ Report on state-owned entities & statutory authorities 14 Office of the Auditor General – 2015 financial audits 5.0 Types of agencies A number of government entities have been reorganized to be: • More efficient and productive; • More accountable; • better organized; and • provide good return on investment.
Government Commercial Companies The primary objective of every government company is to operate as a successful business, be profitable and efficient compared to businesses in the private sector.

Commercial Statutory Authorities Statutory Authorities have been transformed into commercial statutory authorities so that they operate along commercial lines but also undertake non-commercial activities.
Re-organized entities These government departments or state-owned entities are declared as Re-organized Entities and allows the Minister for Public Enterprises to reorganize that particular entity and enables the state as owner, to provide strategic direction to entities by setting financial and non-financial performance targets and non-commercial obligations.

Majority-owned entities Companies where 51% or more shares are owned by Government.
Expectation is that these companies will operate commercially and optimize returns to Government.

Statutory Authorities Statutory Authorities are established as body corporate by their specific legislation.

They are required to deliver various goods and services to customers.

In most cases, government grants are paid to statutory authorities for their operations, capital expenditures or special projects.
_________________________________________________________________________________________________ Report on state-owned entities & statutory authorities 15 Office of the Auditor General – 2015 financial audits 6.0 Audit Opinion results Table A summarizes the audit opinions we issued on the 2015 financial statements for state- owned entities as at 31 October 2017.
Table A Audit opinions issued by OAG for 2015 financial year Entity type Government Commercial Companies Commercial Authorities Statutory Re-organized entities Majority-owned entities Other entities Statutory Authorities Total Unmodified opinions Modified opinions Disclaimer of opinion 3 2 0 2 2 14 23 2 1 2 0 0 0 5 0 0 0 0 0 1 1 Appendix B lists the state-owned entities and the audit opinions which were issued on their financial statements.
_________________________________________________________________________________________________ Report on state-owned entities & statutory authorities 16 Office of the Auditor General – 2015 financial audits 6.1 Modified audit opinions Audit opinions were modified (qualified) due to the following reasons: Fiji Broadcasting Corporation Limited (FBCL) (IAS) 20.3 International Financial Reporting Standard/International Accounting Standard “Accounting for Government Grants and Disclosure of Government Assistance” defines government grants as assistance by government in the form of transfers of resources to an entity in return for past or future compliance with certain conditions relating to the operating activities of the entity.
Grants related to assets are government grants whose primary condition is that an entity qualifying for them should purchase, construct or otherwise acquire long-term assets.

The government grants received by FBCL meet the definition of a grant in that they constitute government assistance provided to enable FBCL to broadcast in the outer stations and local programmes.
By following the Government’s circular requiring FBCL to treat the government grant received as a capital contribution, FBCL did not in comply with the International Accounting Standard.

However on 16 March 2016, Ministry of Public Enterprises advised all state-owned entities to account for the grants as required by the standards.

FBCL has agreed to effect the requirement of the IAS in the 2016 financial statements.
Post Fiji Limited (PFL) Included in the cash and cash equivalents balance is the Remittance between Post Office (RBPO) accounts of $772,243 which is a clearing account for cash transfers between Post Masters.

The company did not carry out reconciliations of this account with Post Masters cash account.

Therefore it was not possible to perform alternative audit procedures to test its accuracy, completeness and existence due to the nature of the account.
Consequently, our audit was not able to determine whether cash and cash equivalents of $4,875,508 were fairly stated in the financial statements.

PFL has agreed to prepare thorough reconciliations and introduce more stringent controls in the management of the accounts.

Public Rental Board (PRB) Included in government equity under the Statement of Changes in Equity is government grant totaling $16,295,950.
This is a departure from IAS 20 “Accounting for Government Grants and Disclosure of Government Assistance” which requires government grants provided for the purchase or construction of assets to be recognised initially as deferred income and then recognized in profit or loss as other income on a systematic basis in the same period that the expenses are recognized.

PRB has agreed to make the required adjustments in the 2016 financial statements.
_________________________________________________________________________________________________ Report on state-owned entities & statutory authorities 17 Office of the Auditor General – 2015 financial audits Maritime Safety Authority of Fiji (MSAF) MSAF in accordance with a circular issued by the Ministry of Public Enterprises on Cabinet Decision No.

357 of 2012, accounted for all government grants received from 1 January 2011 as capital contributions.
This is a departure from the International Financial Reporting Standards for Small and Medium-sized Entities (IFRS for SMEs) Section 24 – Government Grants which requires government grants to be recognised in profit or loss as income when grant proceeds are receivable or when performance conditions are met.

MSAF has indicated that the required adjustments would be made in the 2016 financial statements.
Water Authority of Fiji (WAF) • Included in financial statements of the Authority as revenue are water and sewerage charges of $32,410,653 and Trade Receivables of water and sewerage charges amounting $10,228,694.

Receipts from these charges are government revenue which is deposited directly in the consolidated fund account of government.

International Accounting Standards (IAS) 18 has set two criteria which need to be met for revenue recognition.
One of the criteria requires that economic benefit associated with the item of revenue should flow to the entity.

Thus, the Authority has not met the recognition criteria for recording these charges as revenue.

Consequently, revenue and receivable are not fairly stated in the Statement of Comprehensive Income and Statement of Financial Position, respectively.
WAF has defended its position stating that it has an arrangement with the government, in its capacity as the Authority’s shareholder, to pay the remittances from its customers into the consolidated fund account.

The Authority’s view is that this should be treated as either a loan to the government or a distribution to the government (as the sole shareholder of the Authority).
• Opening balance of Property, Plant and Equipment amounting to $1,888,909,608 for the year ended 31 December 2010 was not subject to valuation at the time of the transfer to Water Authority of Fiji.

The valuation of these assets was carried out in 2006.

Consequently, it was not possible to confirm the valuation of the opening balance of property plant and equipment when it was transferred in 2010.

WAF has proposed for an asset valuation exercise to be carried out in 2016.
In addition, management has assigned a team to manage the physical verification exercise of WAF assets and including tagging of items in all regions.
_________________________________________________________________________________________________ Report on state-owned entities & statutory authorities 18 Office of the Auditor General – 2015 financial audits 6.2 Emphasis of Matter Audit opinions were modified with additional emphasis made in some audit reports while some had only emphasis of matters noted in the audit reports.
This was the case in respect of the following entities: Public Rental Board A long-term loan of $9 million was borrowed by government from the EXIM Bank of China in 2010 to finance the construction of the Raiwai Housing Project.

A grace period of five years has been provided on principal repayment.

However, interest is payable together with commitment and management fees during the grace period.
The Public Rental Board has not reconciled its records with that of the Ministry of Economy to take into account interest already paid by the government.

PRB management has indicated that it will hold discussion with Ministry of Economy to reconcile the borrowings and interest in 2016.
Maritime Safety Authority of Fiji • The financial statements of the Authority states that it is exempted from income tax under Section 55 of the Maritime and Safety Authority of Fiji Act 2009 for the first three years commencing 1 January 2011.

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

The Authority did not maintain appropriate documentary evidence to support its continuous tax exemption status.
MSAF has advised that follow-up correspondences have been made in consultation with the line Ministry and Fiji Revenue and Customs Service which will be pursued further.

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

The development of the software was incomplete.


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

MSAF management has advised that a full review of the software will be undertaken against the scope of works and the vendor will be notified of all variances.

Furthermore, the vendor will be instructed to carry out the incomplete tasks at the earliest with his own costs.
Water Authority of Fiji • Internal controls in the maintenance and issue of inventories need to be strengthened to avoid possible leakages.

• Project monitoring system and its documentation needs to be improved to further enhance efficiency and effectiveness in delivery of project works.

WAF Management has noted the internal control issues highlighted.

In respect of project management, it has stated that the re-structure of the former Project Management Unit (PMU) to the Planning.
Design and Construction Unit (PDC) in 2016 is a strategic move by the WAF to improve its overall efficiency and effectiveness of project management culture, project delivery, and reporting.

The overall strategy is centered round WAF’s project delivery cycle or process delivery process from project initiation right through to project closure.

WAF is currently finalizing its Project Delivery Framework (PDF) which replaces the old 2011 Project manual and the 2014 CAPEX manual.
_________________________________________________________________________________________________ Report on state-owned entities & statutory authorities 19 Office of the Auditor General – 2015 financial audits Land Transport Authority (LTA) • Leasehold land are not held in the name of the Authority.
The buildings on the land have been incorporated in the books of account of the Authority on the principal assumption that the titles of the land will be registered under the Land Transport Authority in the future.

LTA has noted comments from OAG and has taken necessary action.

Their Legal team has been advised to obtain copies of lease documents from Lands Department which is currently in process.

Thereafter, leasehold land would be amortised.


• Transactions relating to national road safety and funded through donor funds from 2011 to 2014 have not been accounted for in the financial statements of the Authority since the dissolution of the National Roads Safety Council in 2010 by way of LTA Decree No.

41 of 2010.

While the Authority has accounted for transactions for 2015, transactions for prior years is yet to be reflected in its financial statements.
Sugar Industry Tribunal Attention of the Tribunal was drawn to a sum of $328,360 owed by Fiji Sugar Cooperation (FSC) for funds utilized by the Tribunal to finance the Near Infrared Project (NIR) which is part of the Cane Quality Project administered by Fiji Sugar Cooperation.

The Tribunal utilized operating government grant to fund the project without prior approval from Ministry of Sugar.
The Tribunal has explained that it had overlooked on the need to get an approval from Ministry of Sugar when the Office had started administration of the GIS and NIR Project in 2013.

The stakeholders met and decided that Tribunal’s office will administer the two projects but no authority letter from Ministry of Sugar was obtained.

The Tribunal has advised that reimbursements totaling $269,539 have been received from the Fiji Sugar Corporation in July 2017.
Fijian Elections Office Section 9 of the Electoral Act 2014 establishes the Fijian Elections Office as an independent office.

The Fijian Election Office restructure of its financial management system is yet to be fully implemented to produce financial statements which are compliant with the International Financial Reporting Standards for Small and Medium Entities.

Hence the Office has been preparing its annual financial statements on cash basis of accounting.
The Fijian Elections Office advised that it was working with the supplier of the new financial management system and would be able to provide the financial statement report as a statutory entity once the systems is implemented in August 2016.
_________________________________________________________________________________________________ Report on state-owned entities & statutory authorities 20 Office of the Auditor General – 2015 financial audits Fiji Higher Education Commission The Commission collected and disclosed revenue from registration fees, annual fees and renewal of registration fees totaling $48,850 which was deposited in the consolidated fund account of the Government.
The Commission did not carry out a comprehensive survey of the institutes registered with it in 2015.

Therefore, the Commission was not in a position to determine if all institutes operating in Fiji in 2015 were registered and paid their registration fees.
_________________________________________________________________________________________________ Report on state-owned entities & statutory authorities 21 Office of the Auditor General – 2015 financial audits 6.3 Disclaimer of Opinion National Substance Abuse Advisory Council The audit of the financial statements of the National Substance Abuse Advisory Council for the year ended 31 December 2015 resulted in the issue of a Disclaimer of Opinion.
The financial statements of the Council were required to be prepared in accordance with the International Financial Reporting Standards for Small and Medium-sized Entities (“IFRS for SMEs”).

The Council was yet to comply with IFRS for SMEs as required for general purpose financial statements.

The Council has agreed to improve internal controls and adopt the required financial reporting framework in 2016.
_________________________________________________________________________________________________ Report on state-owned entities & statutory authorities 22 6.4 Other Significant Matters The following significant matters were brought to the attention of respective entity’s management.

It is likely that these issues may have an impact on the operations of the entities in future, if necessary action is not taken to address them.
Office of the Auditor General – 2015 financial audits 6.4.1 Airports Fiji Limited Long outstanding work in progress items Audit review of the Work in Progress (WIP) account revealed that certain items which were first included in WIP in 2013 and prior years and have not been transferred to property, plant and equipment subsequently.

The major item, amounting to $997,870 is in relation to the Nausori airport upgrade which is entirely dependent on the successful transfer of the land title to AFL.
Another major item of $199,050 sitting in WIP is in relation to the new Savusavu terminal building.

This amount was paid upfront to the contractor to start work on the project.

However, no work has been done on the project to date.

AFL management has noted the audit findings and has agreed to evaluate and take necessary steps to address the issues.
Accounting for assets - Nadi International Airport Modernization Project The Nadi International Airport is currently undergoing significant renovations, which commenced in October 2014.

However, the company did not record disposal or write off of any items of property plant and equipment that became obsolete as a result of this project.
AFL Management indicated that they have performed an assessment of buildings, and plant and equipment which need to be disposed as a result of the demolition of the terminal building in April 2016.

The total written down value of the assets to be disposed of at the end of the project was assessed by management to be $18,069,612.

Out of this $10,339,655 was recorded as loss on demolition of terminal assets for the year ended 31 December 2015.

These assets were also removed from the fixed asset register.
Assets with zero written down values Included in the fixed asset register are assets with an original cost amounting to $25 million which have been fully depreciated (zero written down values).

Majority of these assets relate to plant and equipment which are still being used in the company’s operations.

This suggests that management’s initial estimate of the useful life of these assets may not have been correct or had not been revised to take account of a revision in the estimated useful lives.
AFL Management has indicated that it has noted the comments and will see that pending issues are resolved diligently.

Fixed Assets Verification Audit review of the Fixed Assets Register (FAR) noted that it is not structured in a way that would enable the company to easily identify assets belonging to a specific section of the airport by location.

Therefore the company should carry out a full asset verification exercise to identify the assets which are actually in use and assets which need to be disposed.
_________________________________________________________________________________________________ Report on state-owned entities & statutory authorities 23 AFL management have maintained that the assets are sorted by asset number, cost centre, category, location and group which assists in identification.

However it was agreed that an asset verification process would also be carried out.
Office of the Auditor General – 2015 financial audits _________________________________________________________________________________________________ Report on state-owned entities & statutory authorities 24 Office of the Auditor General – 2015 financial audits 6.4.2 Post Fiji Limited Anomalies in business engagement with an International Mail Logistic Company Our audit noted that a mail logistics company based in Australia used the logo of Post Fiji Limited on its correspondence for their business dealings with various postal agencies around the world Consequently, the International Postal Agencies recognised Post Fiji Limited as the sender of all the international mails sent by the logistics company.
Audit further noted that Post Fiji Limited is invoiced by the International Postal Agencies around the world who do business with the logistic company.

In addition, under the Universal Postal Union Agreement, Post Fiji has a legal obligation to pay the International Postal Agencies and thus honor this agreement by paying the invoice amount.

To recover its costs, Post Fiji Limited invoices the logistic company for the amount it pays plus a percentage mark-up.
We carried out a review of the above arrangement and noted the following anomalies: • There was no agreement between Post Fiji Limited and the mail logistic company for the use of company’s logo; • There was no Board resolution on the approval of use of company’s logo by the mail logistic company; and • As at 31 December 2015, the logistic company owed Post Fiji Limited a sum of $4,637,730.37 or 44% of the company’s total receivable balance.
In addition, the sum of $3,501,005.21 owed by this company has been outstanding for more than 120 days.

In absence of a contract agreement and board approval, Post Fiji Limited is faced with significant reputation risk should the mail logistic company fail operate lawfully and ethically.

In addition, Post Fiji Limited is exposed to costs for which recoverability is uncertain.
Post Fiji Limited has explained that it is currently verifying the issues that have been raised to ascertain the legitimacy of their claims and will respond back to the logistic company once these checks are done.

In addition, the logistic company has ceased using Post Fiji Limited as from March 2016 for this business after it took a more aggressive approach towards their debt collection.

However, Post Fiji Limited will continue to pursue the outstanding debt with the logistic company.
Insufficient number of Board Members Sufficient number of board members with the required mix of skills, expertise and knowledge will provide the skills and experience necessary for the Board of Post Fiji Limited to operate efficiently and effectively and ensure effective decision-making and oversight.

The audit noted that currently the company’s Board is currently comprised of only two members which is not sufficient for good corporate governance.
There is a high possibility that not having sufficient number of board members is preventing the Board from effectively exercising its roles and responsibilities.

Post Fiji Limited management has informed that the Board Chairman has also highlighted to the Ministry for the size of the board to be increased.
_________________________________________________________________________________________________ Report on state-owned entities & statutory authorities 25 Office of the Auditor General – 2015 financial audits 6.4.3 Fiji Electricity Authority Property, plant and equipment form the most significant component of the Authority’s statement of financial position with an aggregate written down value of $1,029,748,000 as at 31 December 2015.
Our review of the Authority’s fixed assets schedules/registers indicated that physical verification of all property, plant and equipment was not carried out during the year.

Also, reports on verifications performed at certain locations were not available for audit review and verification.

FEA management has agreed to undertake physical verification of fixed assets via an asset count and tagging of these assets.
_________________________________________________________________________________________________ Report on state-owned entities & statutory authorities 26 Office of the Auditor General – 2015 financial audits 6.4.4 Fiji Broadcasting Corporation Limited Impairment Assessment of Plant and Equipment As per the requirements of International Financial Reporting Standards (IFRSs), assets should be assessed for indicators of impairment.
If the indicators exist, an assessment should be undertaken to determine if the value of the asset is impaired.

Our audit noted that FBCL did not carry out an assessment for impairment of its plant and equipment in 2015.

There was no documentation of impairment that had been prepared to support the carrying value of the Corporation’s network equipment.
We further noted that the digitization of network is expected to occur by 2020 and management changed the depreciation rates relating to analog network equipment from 20% to 6.67% to ensure that these assets are fully depreciated by 2020.

However, later management re-evaluated these assets and identified an adjustment of $78,927 in the current period to ensure that the assets are fully depreciated at 6.67% by 2020.
FBCL management has advised that planning works and first phase of testing for the digital TV project is now complete.

This project is managed by Ministry of Communications through Walesi Ltd which will also take over all the transmission works of all broadcasters including FBC for an annual management fee.
Following this, all faults as well as transmission and repairs and maintenance works will be handled by Walesi Ltd. After thorough assessment of fixed assets, list of equipment that will be transferred from FBCL to Walesi Ltd at an agreed price has been presented to the board of FBCL and the project management team hired by Walesi Ltd. A decision on this transfer is expected to be made soon.
The Corporation has further indicated that analog equipment will still be used simultaneously as a backup until digital is fully functional and used up to the switch over time.
_________________________________________________________________________________________________ Report on state-owned entities & statutory authorities 27 Office of the Auditor General – 2015 financial audits 6.4.5 Fiji Roads Authority Discrepancies in accounting of fixed assets Property, plant and equipment was valued (WDV) at $8.7 billion as at 31 December 2015.
Our audit noted that the Authority does not carry out reconciliations to reconcile the written- down value of donated assets to the amortized value of deferred income.

Consequently, deferred income reconciliation recorded for donated assets are not adjusted on a timely basis for revaluation and disposal of donated assets.

In addition to the above, the Fixed Asset Register (FAR) has not been updated to record the revaluation performed for property, plant and equipment.
FRA management while noting the audit issues has advised that it is in the process of getting a new ERP system and asset management system which will enable recording of fixed assets in an automated system instead of recording the FRA assets in MS Excel version.
_________________________________________________________________________________________________ Report on state-owned entities & statutory authorities 28 Office of the Auditor General – 2015 financial audits 6.4.6 Copra Millers of Fiji Limited (CMFL) Fixed assets not properly accounted Our review of property, plant and equipment revealed the following anomalies: • Property, plant and equipment were not properly grouped into classes of assets.
For instance, laptops, fax machines, and computers are office equipment but were classified and recorded under Furniture and Fittings; Impairment assessment of property, plant and equipment was not carried out.
A number of assets had negative written down values in the Fixed Assets Register; and • • Major renovations and alterations to existing buildings were separately recorded instead of being added to the cost of existing assets; CMFL management has agreed to take appropriate action to address the audit issues.
_________________________________________________________________________________________________ Report on state-owned entities & statutory authorities 29 Office of the Auditor General – 2015 financial audits 6.4.7 Maritime Safety Authority of Fiji Underutilization of capital grants/no board Our audit noted that capital grants disbursed by Government for various purposes such as construction of light houses and purchase of lanterns were underutilized in 2015.
Of the $3 million received, only 15% was utilized as at 31 December 2015 leaving a balance of $2.5 million as unutilized.

In addition, a board is yet to be appointed to manage the affairs of the Authority.

MSAF management indicated that in 2015 it underwent a transitional period in the appointment of the MSAF Board and changes in management.
Minor capital works less than $50,000 were undertaken whilst MSAF was in consultation with the Ministry of Infrastructure and Transport for the appointment of the MSAF Board.

Major capital works were put on hold and have been carried forward into the new financial year in 2016 before Government’s directive of the new financial year from June 2016 to May 2017.
The Permanent Secretary for the Ministry of Infrastructure and Transport has taken over the responsibility to act in the absence of MSAF Board and approve the relevant projects.

This has resulted in commencement of pending projects and utilization of funds in 2016/2017.
Marine Spill Pollution Advisory Committee not established Section 155 of the Maritime Transport Decree 2013 establishes the Marine Spill Pollution Advisory Committee, to give advice to the Authority on the following matters- (a) the National Marine Spill Response Strategy; (b) the fixing of oil pollution levies imposed under this Decree; (c) the use of the National Oil Pollution Pool; and (d) Any other matters related to marine spills that the Minister may from time to time specify by notice in writing to the committee.
The Committee shall consist of a Chairperson, the Chief Executive Officer, and such other persons, appointed by the Minister.3 The Authority collects environmental levy for the purpose of generating fund for the provision of containment equipment and response and training to react to any incidents of actual or potential threat to the marine environment.

As at 31 December 2015, more than $1.5 million has been deposited in the Environmental Levy bank account and $4 million invested as term deposits.
Our audit noted that the Marine Spill Pollution Advisory Committee has not been established as required by the Marine Transport Decree and the Marine (Pollution Levy) Regulation.

In the absence of the Marine Spill Pollution Advisory Committee, environment/pollution levy collected will remain unutilized.

MSAF has advised that the process to appoint the Marine Spill Pollution Advisory Committee is in consultation with the Ministry of Infrastructure and Transport.
In terms of the utilization of the Pollution Levy, any utilization of the funds has been accordance to Section 201 of the Maritime Transport Decree 2013 [MTD].
3 Marine (Pollution Levy) Regulations 2014 Section 156 _________________________________________________________________________________________________ Report on state-owned entities & statutory authorities 30 The Chief Executive Officer and Permanent Secretary responsible for Transport will continue to provide professional and technical advice to the Hon Minister in consultation when the need arises to utilize funds from the Pollution Levy as specified in the MTD.
Office of the Auditor General – 2015 financial audits _________________________________________________________________________________________________ Report on state-owned entities & statutory authorities 31 Office of the Auditor General – 2015 financial audits 6.4.8 Public Rental Board Rental flats not insured In determining the rent charged for the Board flats, the costs related to its construction, maintenance, insurance, interest on capital and administration costs are included.
As at 31 December 2015, net book value of building (flats) given on rent and community halls totaled $4.69 million.

Our audit noted that some rental properties and community halls were not insured due to the inability of the Board to cater for the insurance premiums.

PRB management advised that the matter has been discussed with the Board of Directors.

In 2014, the Board approved a resolution to insure all new constructions for fire going forward.
This has been done at Raiwai and will be rolled out to other new projects currently in progress at Kalabu, Savusavu and Simla which is expected to commence construction later in 2016.
The Board of Directors also approved a resolution not to insure old properties given the expensive insurance premium and there being no incidence of fire in the past few years Review of Property, Plant and Equipment Our audit noted the following anomalies in property, plant and equipment: • There was no evidence to indicate that the Board carried out an assessment for impairment of its assets.
Assets totaling $8.15 million had zero written down value recorded in the Fixed Asset Register although these assets were still used for Board’s activities; and • Buildings (Raiwai Project 1997) valued at $142,744 was recorded under property, plant and equipment although the buildings have been demolished.
PRB management has agreed that annual review of the property, plant and equipment would be carried out annually for impairment assessment _________________________________________________________________________________________________ Report on state-owned entities & statutory authorities 32 Office of the Auditor General – 2015 financial audits 6.4.9 Water Authority of Fiji High provision for water and sewerage rates debtors It is important that the Authority exhaust all avenues for collection of water and sewerage rates prior to writing off the bad debts.
Our audit noted that the Authority’s provision for rates debtors is 70% of the total water and sewerage rates debtors which is significant and indicates that the Authority may not be in a position to recover the debts from its customers.

Refer to table below for details.


Account Trade Gross receivables Provision for doubtful debts 2015 $ 2014 $ 34,297,130 32,424,030 Change $ 1,873,100 24,068,436 22,391,604 1,676,832 Eventually these debts could become bad resulting in write-offs and eventual loss of revenue to government.
WAF management has advised that the following measures have been put into place to avoid accumulation of debts for water and sewerage charges: • Establishment of a special Debt Management Team to focus on recovery of large arrears.

The team will identify debtor issues, establish contact with the debtor and discuss available repayment avenue to resolve the issues; • A new process is in place whereby all disputing customers are required to clear all their debts whilst investigation is undertaken.
In the event the customer’s claim are valid, an appropriate credit would be passed to customer’s account; • Disconnection of meters for accounts in arrears is now scheduled more promptly as disconnection is the most effective way to enforce payment of debt; • Accounts with large debt balances have been allowed to make payment arrangements to ease the financial burden.

Accounts with balance over $100 will be allowed to make payment arrangements.
Failure to adhere to the agreed repayment schedule will result in disconnection; • WAF plans to purchase 16,000 new meters in 2017 to replace faulty meters.

This will reduce the incidents of estimate bills, incorrect estimate billing and refusal to pay estimates.
Meter replacement will be an ongoing program as meters are expected to have a useful life of about 15 years; • Proper identification and contact information will be obtained from customers and uploaded on the system to facilitate debt follow-up; • WAF has established a new billing system GNTREK to facilitate efficient billing of customers, better monitoring of debts and follow-up on arrears; • For new customers registered in the new billing system the TIN number is used as the primary identity.
Hence, customers relocating to new residence, the meters are plugged off from the former site and arrears is moved to the new account in the new location; and • Lease agreements to be formalised between WAF and landowners whereby WAF would pay lease rentals to landowners for water source utilized whilst landowners would be required to pay water rates.

Alternatively, WAF and landowners can agree to provision of certain quantity of free water.
However, the terms and conditions should be clearly specified in the formal agreement.
_________________________________________________________________________________________________ Report on state-owned entities & statutory authorities 33 Office of the Auditor General – 2015 financial audits Authority’s plant and equipment not insured Our audit noted that significant assets included as part of property, plant and equipment and in particular forming part of the Authority’s water and distribution equipment were not insured.
In absence of insurance cover on the significant PPE there is increased risk of loss of Authority’s cash flow for restoration works resulting from any natural disasters.

WAF management has advised that from 2013 to 2014, the Authority’s ISR- material policy did not fully cover assets, the sum insured was $4.1m on specific locations even though the carrying amount of WAF’s assets for the same period was approximately $1.8b.
In addition, the standard provisions of the ISR cover includes a general average clause that is not beneficial to WAF as it takes into account the ratio of sum insured against the true value of the assets covered.

Hence, any claims lodges on loss incurred on covered assets would have been far less than the real costs of loss incurred under the policy.

This cover was amended since 2015 as insurer required an updated valuation to be done on WAF’s assets.
In 2017, a valuation has been requested by the Board to be done on WAF’s critical assets to facilitate necessary cover.
_________________________________________________________________________________________________ Report on state-owned entities & statutory authorities 34 Office of the Auditor General – 2015 financial audits 6.4.10 Fiji Development Bank (FDB) Allocation of provision on loan accounts Our review of the provision for loan accounts indicated that the bank maintains a sum of $16.9million as an “unallocated specific account” to cover under provision in specific account balance which is consistent from prior year.
As a result, excess provision was noted which was adjusted.

Excess provision to account balances may lead to potential understatement of loans and advances balances.

FDB management have indicated that the bank follows RBF provisioning guidelines.

However, the bank has agreed to consider re-allocating provision from the unallocated general ledger to specific accounts.
Customer credit risk rating did not agree to loan risk grades Our audit noted that the Customer Credit Risk rating of a large number of loan accounts did not agree to the loan risk grade.

Incorrect Customer Credit Risk rating and loan risk grades can lead to incorrect provisioning of loan accounts.

FDB management have indicated that they are currently working on automation to address the issue and will try to implement this at the earliest.
Deficiencies in loans and advances process control Our audit indicated that outdated valuation reports were maintained in loan files and a number of loan application forms were not placed in the file.

FDB management while agreeing with the audit finding have indicated that they would continue to strengthen compliance initiative as part of its audit compliance culture.
6.4.11 Fiji Development Bank Nominees Ltd Management services provided without valid contract Our audit noted that FDB Nominees Ltd (FDBNL) has been providing management services to Fiji Investment Corporation Limited (FICL) since August 2013 without a valid contract.

In addition, a sum of $373,750 which was owed by FICL under a contract it had with FDB Nominees Ltd for the period 2010 to August 2013 was yet to be paid.
FDBNL management has advised that since the expiry of the Management Agreement, it has been managing FICL in good faith and also that company is owing it debt.

FDBNL has also reviewed and submitted a revised Management Agreement to Ministry of Industry, Trade and Tourism on 14 April 2015.

No formal response has been received since.


_________________________________________________________________________________________________ Report on state-owned entities & statutory authorities 35 Office of the Auditor General – 2015 financial audits 6.4.12 Housing Authority of Fiji No policy on inventory provisioning There is no formal policy or guidelines on the calculation of provisions for inventory by the Authority.
Housing Authority management has indicated it will submit a draft policy to the Board for approval.
_________________________________________________________________________________________________ Report on state-owned entities & statutory authorities 36 Office of the Auditor General – 2015 financial audits 6.4.13 Film Fiji Assets with zero written-down values Our audit noted that majority of office equipment used by the Film Fiji have been fully depreciated and have zero written down values in the Fixed Assets Register.

The useful lives of these assets were not re-assessed as at 31 December 2015.
Film Fiji management has indicated that policies relating to Property, Plant and Equipment would be reviewed to ensure compliance with the relevant legislation and accounting standards.
_________________________________________________________________________________________________ Report on state-owned entities & statutory authorities 37 Office of the Auditor General – 2015 financial audits 6.4.14 Sugar Industry Tribunal Issues relating to fixed assets Our audit revealed that the following issues highlighted in prior years were yet to be addressed: • Fully depreciated with zero written down value are still in use by the Tribunal.
Useful lives of these assets have not been revised to ensure proper accounting of the assets; and • Annual survey of fixed assets has not been carried out to determine their physical existence and use.

The Tribunal has agreed to take corrective action on the issues highlighted.
_________________________________________________________________________________________________ Report on state-owned entities & statutory authorities 38 Office of the Auditor General – 2015 financial audits 6.4.15 Fiji Higher Education Commission General control deficiencies Our audit noted control deficiencies in the following areas: • Processing of payments • Procurement of goods and services • Processing of bonus payments and salary increments to staffs • Processing of payroll and accountable advances • Cash receipting and banking The Commission has agreed to take appropriate corrective action to address the anomalies.
_________________________________________________________________________________________________ Report on state-owned entities & statutory authorities 39 Office of the Auditor General – 2015 financial audits 7.0 Assessment of Internal Controls 7.1 Auditing internal controls During our audits, we assess the design and implementation of controls to ensure that they are suitably designed to prevent, detect and correct material misstatements.
Where audit strategy requires, we also test the operating effectiveness to ensure the internal controls are functioning as designed.

7.2 Internal controls Internal controls are categorized against the following five components of internal control.

• Control Environment (CE) – is the set of standards, processes and structures that provide the basis for carrying out internal controls across the entity.
These include commitment to integrity and ethical values, independence of management to exercise oversight for the development and performance of internal control, documented structures, reporting lines and appropriate authorities such as delegated levels of authority and responsibilities in the pursuit of the entity’s objectives.

It is also includes commitment to attract, develop and retain competent individuals, and holding them accountable for their internal control responsibilities.
Examples of issues which fall under this category are ethical breaches, gaps in internal controls or controls are non-existent, individuals are not held accountable for breaches in control or entities code of ethics, staff recruitment, and training and professional development, performance assessment and succession planning matters.
• Risk Assessment (RA) – involves a dynamic process for identifying and analyzing risks to achieve the entity’s objectives, forming a basis for determining how risks should be managed.

Examples of issues which would fall under this category are absence of risk management framework, operational including fraud and enterprise risks not identified, assessed and mitigated and impact of changes in business processes on controls not identified and assessed.
• Control Activities (CA) – these are established by policies and procedures to help ensure that management’s directives to mitigate risks to the achievement of objectives are carried out.

Control activities are performed at all levels of an entity and at various stages within business processes, and over the technology environment.
Examples of issues which would fall under this category are general controls relating to information technology, documentation of procedures which have in-built checks and balances which are aligned to the policies of the entity.

Specific control activities include those relating to authorization, performance reviews, information processing, physical controls, and segregation of duties.
• Information and Communication Control (IC) – information is necessary for the entity to carry out internal control responsibilities in support of achievement of its objectives.

Communication occurs both internally and externally and provides the entity with the information needed to carry out day-to-day controls.

Communication enables personnel to understand internal control responsibilities and their importance for the achievement of objectives.
_________________________________________________________________________________________________ Report on state-owned entities & statutory authorities 40 Office of the Auditor General – 2015 financial audits Examples of issues which would fall under this category are reporting to boards and line ministries of entities on matters relating to internal controls • Monitoring Activities (MA) – on-going evaluations, separate evaluations or some combination of the two are used to ascertain whether controls are present and functioning.
Findings are evaluated and deficiencies are communicated in a timely manner.

Examples of issues which would fall under this category are self-assessment by entities to determine whether internal controls are present and function.

This may include the establishment of independent internal audit functions within entities which would assist in identifying any gaps in controls.
A deficiency occurs when internal controls are unable to prevent, detect or correct errors in the financial statements or where controls are missing.

A significant deficiency is a deficiency that either or alone or in combination with multiple deficiencies may to lead to a material misstatement in the financial statements.

It requires immediate management action.
The following table outlines the rating we have used to assess internal controls: Rating Internal control assessment  Effective  Generally effective  Ineffective No deficiencies identified in internal controls Deficiencies identified in internal controls Significant deficiencies identified in internal controls _________________________________________________________________________________________________ Report on state-owned entities & statutory authorities 41 Office of the Auditor General – 2015 financial audits 7.3 Quality of draft financial statements by entities The extent of audit adjustments made to draft financial statements indicates the effectiveness of an entity’s internal review processes before the accounts are submitted for audit.
We assessed the quality of financial statements by the number of audit adjustments made to the first draft of financial statements and the impact these adjustments had on the operating results or net assets of the entity subject to out audit.
Rating Quality of draft financial statements assessment  Effective  Generally effective  Ineffective No adjustments were required Adjustments on operating results/net assets were less than five percent Adjustments on operating results/net assets were more than five percent 7.4 Timeliness of draft financial statements for entities To assess the timeliness of draft acceptable financial statements, we have compared the date the date the draft financial statements were received for audit after allowing for at least 30 days before the legislative deadlines for our audit.
Rating  Effective  Generally effective  Ineffective Timeliness of draft financial statements assessment Acceptable draft financial statements received within 60 days before legislative deadline Acceptable draft financial statements received within 30 days before legislative deadline Acceptable draft financial statements received less than 30 days before legislative deadline _________________________________________________________________________________________________ Report on state-owned entities & statutory authorities 42 Office of the Auditor General – 2015 financial audits 8.0 Results summary The following table summarizes our assessment of controls and the 2015 financial statement preparing processes across the entities which were audited.
Entity Internal controls Financial Statement Preparation Government Commercial Companies 1.

Airports Fiji Limited 2.

Fiji Broadcasting Corporation Limited CE RA CA IC MA T             3.

Fiji Public Trustee Corporation       Limited 4.

Post Fiji Limited 5.

Unit Trust of Fiji (Management)             Limited Commercial Statutory Authorities 1.

Fiji Electricity Authority 2.

Public Rental Board 3.

Housing Authority Re-organized entities 1.


Maritime Safety Authority of Fiji             2.

Water Authority of Fiji Majority- owned entities 1.

Copra Millers of Fiji Limited 2.

Pacific Fishing Company                               Limited Other entities 1.

Fiji Development Bank Nominees Limited 2.

Fiji Development Bank Statutory Authorities 1.

Fiji Roads Authority 2.

Land Transport Authority 3.


Fiji Revenue & Customs Service                               4.

Fiji Sports Council 5.

Civil Aviation Authority of Fiji 6.

Fiji Independent Commission against Corruption* 7.

Fijian Competition & Commerce                         Commission 8.

Sugar Industry Tribunal 9.

Investment Fiji 10.

Film Fiji 11.

Consumer Council of Fiji 12.


National Substance Abuse Advisory Council                               Q                           _________________________________________________________________________________________________ Report on state-owned entities & statutory authorities 43 Office of the Auditor General – 2015 financial audits Entity Internal controls Financial Statement Preparation 13.

Fiji National Sports Commission 14.


Fijian Elections Office* 15.
Fiji Higher Education Commission                      CE=Control Environment RA=Risk Assessment CA=Control Activities IC=Information and Communication Control MA=Monitoring Activities T=Timeliness of draft financial statements Q=Quality of draft financial statements * Independent Commissions _________________________________________________________________________________________________ Report on state-owned entities & statutory authorities 44 Appendix A: Audits not complete as at 31 October 2017 Office of the Auditor General – 2015 financial audits Entity Government Commercial Companies4 1.
Rewa Rice Limited Year Last Audited Comments 2012 2013 2014 Prior 2011  2.

Viti Corporation Limited  3.

Yaqara Pastoral Limited  audit 2014-2015 being finalized draft Amended financial statements for 2007-2011 resubmitted 27/10/17.Audits are being finalized.

2015 audit in is progress.

However, progress of the audit is hindered by the the delay of provision required accounting records the company.

2009 accounts yet to be received by in 4.


Food Processors Fiji Limited  Commercial Statutory Authorities 1.

Fiji Meat Industry Board Re-organized entities 1.

Biosecurity Authority of Fiji  Statutory Authorities 1.

Tourism Fiji 2.

National Fire Authority 3.

Agricultural Marketing Authority   2015 & 2016 audits being finalized yet to BAF is the resubmit amended 2013 financial statements for finalization and 2014-2015 financial statements for audit.
is The 2014 Draft FS on received 01/08/17 and the audit being finalized.

2014 accounts yet to be received 2010 accounts yet to be received   4 Assets Fiji Limited declared as Re-organized Enterprise with effect from 13/11/2015 _________________________________________________________________________________________________ Report on state-owned entities & statutory authorities 45 Office of the Auditor General – 2015 financial audits Year Last Audited Comments 2012 2013 2014 Entity 4.
I-Taukei Affairs Board Prior 2011  5.

Fiji Servicemen's After-care Fund 6.

Real Estate Agents Board  7.

Fiji Rights Commission 8.

Independent Legal Services Commission 9.

Telecommunication Authority of Fiji 10.

Fiji Arts Council    11.

Fiji Medical & Dental Secretariat 12.

National Food & Nutrition Centre 13.

Fiji National Council for Disabled Persons      audit audit 2003-2004 being finalized 2015 accounts yet to be received.
2013-2015 accounts yet to be received 2008 2015 – accounts yet to be received 2014-2015 being finalized 2015 accounts yet to be received 2015 – 2004 accounts yet to be received 2015 account received on 26/9/17 2015 account received on 29/9/17 2016 account received on 5/9/17 _________________________________________________________________________________________________ Report on state-owned entities & statutory authorities 46 Office of the Auditor General – 2015 financial audits Appendix B: Audit Opinion Results The following tables present the results of our audit of 2015 financial statement for state-owned entities.
The results have been summarized into government commercial companies, commercial statutory entities, re-organized entities, majority- owned and other entities, and statutory authorities.

Government Commercial Companies Entity 1.

Airports Fiji Limited 2.

Fiji Broadcasting Corporation Limited 3.

Fiji Public Trustee Corporation Limited 4.

Post Fiji Limited 5.


Unit Trust of Fiji (Management) Limited Legislative time frame 30 April 2016 30 April 2016 Date audit report signed 20 June 2016 Unmodified Audit opinion type 6 May 20`6 Modified 30 April 2016 26 April 2016 Unmodified 30 April 2016 30 April 2016 18 May 2016 Modified 6 May 2016 Unmodified Commercial Statutory Authorities Entity 1.

Fiji Electricity Authority 2.

Public Rental Board 3.


Housing Authority Date audit Legislative time frame report signed 30 April 2016 29 April 2016 30 April 2016 4 July 2016 30 April 2016 30 December 2016 Audit opinion type Unmodified Modified Unmodified Re-organized Entities Entity 1.

Maritime Safety Authority of Fiji 2.

Water Authority of Fiji Majority-owned Entities Entity 1.

Copra Millers of Fiji Limited 2.
Pacific Fishing Company Limited Date audit Legislative time frame report signed 30 April 2016 1 June 2017 30 June 2016 26 September 2017 Audit opinion type Modified Modified Date audit Legislative time frame report signed 30 April 2016 28 May 2016 30 April 2016 19 May 2016 Audit opinion type Unmodified Unmodified _________________________________________________________________________________________________ Report on state-owned entities & statutory authorities 47 Office of the Auditor General – 2015 financial audits Other Entities Entity 1.
Fiji Development Bank Nominees Limited 2.

Fiji Development Bank Statutory Authorities Entity 1.

Fiji Roads Authority Legislative time frame 31 October 2015 31 October 2015 Date audit report signed 27 October 2015 2 November 2015 Audit opinion type Unmodified Unmodified Legislative time frame 30 April 2016 24 January Date audit report signed 2017 Audit opinion type Unmodified 2.

Land Transport Authority 31 May 2016 20 December Unmodified 3.
Fiji Revenue & Customs 30 April 2016 5 May 2016 Unmodified 2016 Service 4.

Fiji Sports Council 5.

Civil Aviation Authority of Fiji 6.

Fiji Independent Commission against Corruption 7.

Fijian Competition & Commerce Commission 8.

Sugar Industry Tribunal 9.

Investment Fiji 10.

Film Fiji 11.

Consumer Council of Fiji 12.

National Substance Abuse Advisory Council 13.

Fiji National Sports Commission 14.
Fijian Elections Office 30 June 2016 30 June 2016 31 March 2016 21 December 2016 20 July 2016 Unmodified Unmodified 12 April 2016 Unmodified 30 April 2016 24 May 2016 Unmodified 19 May 2017 Unmodified 10 May 2016 Unmodified 1 May 2017 Unmodified 20 June 2016 Unmodified 21 October 2016 Disclaimer of Opinion 23 June 2016 Unmodified Unmodified As soon as possible after end of financial year 30 June 2016 30 June 2016 As soon as possible after end of financial year As soon as possible after end of financial year No later than end of next financial year As soon as possible after end of financial year _________________________________________________________________________________________________ Report on state-owned entities & statutory authorities 48 15.
Fiji Higher Education Commission 30 June 2016 5 July 2017 Unmodified Office of the Auditor General – 2015 financial audits _________________________________________________________________________________________________ Report on state-owned entities & statutory authorities 49 Appendix C: Entities not subject to audit by the Auditor-General Office of the Auditor General – 2015 financial audits Entity Audit requirement Audited by/Comments 1.

Fiji Pine Limited As per Companies Act - 2.


Fiji Sugar Corporation As per Companies Act 3.

Fiji Airways As per Companies Act Chartered Accounting firm, BDO appointed auditor Chartered Accounting firm, PWC appointed auditor 4.

Air Terminal Services As per Companies Act - 5.

Fiji Ships & Heavy Industries Ltd Auditor-General • Auditor-General last audited 2014 financial statements.

6.

Fiji Ports Corporation Auditor-General Limited 7.

Fiji Hardwood Corporation Auditor-General Limited 8.
National Centre Micro- Finance 9.

National Trust of Fiji Auditor-General or any other independent auditor appointed by the Board Auditor-General or such other auditor approved in that behalf by the Minister responsible for finance.

as • Declared Re- organized Enterprise with effect from 13 November 2015 • Auditor-General last audited 2014 financial statements.

• Declared as Re- organized Enterprise with effect from 13 November 2015 • FHCL 2008 financial statements audited by OAG.
• On 21 March 2016, FHCL Board appointed CA firm Ernst & Young to financial audit statements for 2009- 2016. the • Aliz Pacific appointed as auditors for 2010-2015 financial statements.
Auditor appointed by Trust as follows: • 2006-2007 RP Singh & Company • 2008-2009 HN Pande & Company • 2011-2013 I Naiveli & Company _________________________________________________________________________________________________ Report on state-owned entities & statutory authorities 50 Office of the Auditor General – 2015 financial audits Entity Audit requirement Audited by/Comments • 2014-2016 HN Pande 10.

Fiji Museum Auditor appointed by the Minister of Education under Fiji Museum Act.
• Ernst & Company Young & appointed as auditor for 2005-2009 financial statements • 2010-2015 financial statements yet to be audited 11.

Tertiary Scholarship and Loans Board • KPMG appointed as auditors for 2014-2017 financial statements.

In accordance with the Audit Act (Cap.

70) and the Financial Management Act 2004; independent (b) by an auditor appointed by the Minister; or independent (c) by an auditor as so directed by the Minister for Finance.
_________________________________________________________________________________________________ Report on state-owned entities & statutory authorities 51 Appendix D: Responses from entities We provided a copy of this report to the Permanent Secretary for Public Enterprises for comments.

In addition, we provided sections of the report to the following: Office of the Auditor General – 2015 financial audits Entity Line Ministry 1.

Agriculture Marketing Authority Ministry of Agriculture 2.
Fiji Arts Council Ministry of Education 3.

Fiji Higher Education Commission Ministry of Education 4.

Human Rights & Anti- Attorney General’s Office Discrimination Commission 5.

Fiji Medical & Dental Secretariat 6.

Fiji National Council for Disabled Persons Ministry of Health Ministry of Social Welfare, Women & Poverty Alleviation 7.

Fiji Servicemen’s After-care Fund Ministry of Economy 8.

Fijian Elections Office Independent 9.

Film Fiji Ministry of Industry ,Trade and Tourism 10.
Independent Legal Services Attorney General’s Office Commission 11.

I-Taukei Affairs Board Ministry of i-Taukei Affairs 12.

Land Transport Authority Ministry of Infrastructure and Transport 13.

National Fire Authority National Fire Authority Ministry of Local Government, Housing & Environment 14.

National Food & Nutrition Centre Ministry of Education Ministry of Education 15.

National Substance Abuse Advisory Council 16.

Real Estate Agents Board Ministry of Industry , Trade and Tourism 17.
Sugar Industry Tribunal Ministry of Sugar 18.

Telecommunication Authority of Fiji 19.

Tourism Fiji Ministry of Communications and Information Technology Ministry of Industry ,Trade and Tourism The heads of these agencies are responsible for the accuracy, fairness, and balance of their comments.
_________________________________________________________________________________________________ Report on state-owned entities & statutory authorities 52 Sample letters sent Office of the Auditor General – 2015 financial audits _________________________________________________________________________________________________ Report on state-owned entities & statutory authorities 53 Office of the Auditor General – 2015 financial audits _________________________________________________________________________________________________ Report on state-owned entities & statutory authorities 54 Responses from entities Office of the Auditor General – 2015 financial audits _________________________________________________________________________________________________ Report on state-owned entities & statutory authorities 55 Office of the Auditor General – 2015 financial audits _________________________________________________________________________________________________ Report on state-owned entities & statutory authorities 56 Office of the Auditor General – 2015 financial audits _________________________________________________________________________________________________ Report on state-owned entities & statutory authorities 57 Office of the Auditor General – 2015 financial audits _________________________________________________________________________________________________ Report on state-owned entities & statutory authorities 58 Office of the Auditor General – 2015 financial audits _________________________________________________________________________________________________ Report on state-owned entities & statutory authorities 59 Office of the Auditor General – 2015 financial audits _________________________________________________________________________________________________ Report on state-owned entities & statutory authorities 60 Office of the Auditor General – 2015 financial audits _________________________________________________________________________________________________ Report on state-owned entities & statutory authorities 61 Office of the Auditor General – 2015 financial audits _________________________________________________________________________________________________ Report on state-owned entities & statutory authorities 62 Office of the Auditor General – 2015 financial audits _________________________________________________________________________________________________ Report on state-owned entities & statutory authorities 63 Office of the Auditor General – 2015 financial audits _________________________________________________________________________________________________ Report on state-owned entities & statutory authorities 64 Office of the Auditor General – 2015 financial audits _________________________________________________________________________________________________ Report on state-owned entities & statutory authorities 65 Office of the Auditor General – 2015 financial audits Response received in the E-mail Fijian Elections Office From: Mohammed Saneem Sent: Tuesday, December 5, 2017 9:40 AM To: Ajay Nand Subject: Comments on Extract from the Draft 2015 Auditor General's Report on state-owned entities and statutory authorities Bula Mr. Nand Hope this email finds you well.
I acknowledge receipt of your letter of 30 November 2017 and for the sake of expediting the reply, I thought it best to email you.

My only suggested change to the paragraph is to state the name of the law to be 'Electoral Act' and not 'Electoral Decree' Thank you very much for consulting us.
--- Mohammed Saneem (Mr.) Supervisor of Elections Fijian Elections Office _________________________________________________________________________________________________ Report on state-owned entities & statutory authorities 66 Office of the Auditor General – 2015 financial audits National Fire Authority From: Mileta Seniroqa Sent: Friday, December 8, 2017 3:22 PM To: Auditor General - Information Cc: 'Bale Tuifagalele' Subject: NFA 2014 Accounts Good afternoon Ajay We are in receipt of your letter dated 30th November requesting for an update on the status of the above accounts.
We wish to advise that we are currently working with Ernst & Young to draft our 2014 Financial Accounts and the delay has been the need to complete the bank reconciliations, update our FAR and generate the draft TB which Ernst & Young has now received.

EY plans to produce the draft 2014 financials by Friday, 15th December 2017 following which we hope that the Auditor General will be able to confirm a time for the commencement of NFA’s 2014 Audit.
We hope that you will be able to confirm with us a suitable schedule to enable the early completion of the 2014 Audit of NFA’s financials.
Vinaka Mileta Seniroqa (Mrs) Acting Chief Executive Officer | National Fire Authority _________________________________________________________________________________________________ Report on state-owned entities & statutory authorities 67 Appendix E: Glossary Term Accountability Accounting estimates Office of the Auditor General – 2015 financial audits Definition Responsibility of public sector entities to achieve their objectives in reliability of financial reporting, effectiveness and efficiency of operations, and compliance with applicable laws.
An approximation of a monetary amount in the absence of a precise means of measurement.

This term is used for an amount measured at fair value where there is estimation uncertainty, as well as for other amounts that require estimation.

Amortised Gradually write-off the initial cost of an asset.
Assessment for impairment Audit evidence Audit Memorandum Audit strategy Business continuity risk Capital works Assessment done to ensure that an entity's assets are not carried at more than their recoverable amount (i.e.
the higher of fair value less costs of disposal and value in use) A difference between the amount, classification, presentation, or disclosure of a reported financial statement item and the amount, classification, presentation, or disclosure that is required for the item to be in accordance with the applicable financial reporting framework.

Management Letter highlighting areas where improvements can be made by an entity following an audit.
The strategy that sets the scope, timing and direction of the audit, and guides the development of the more detailed audit plan Business interruption can result from natural occurrences and accidental or deliberate criminal acts.

Those interruptions can have significant financial and operational ramifications.

Over time, an organization will experience an event that will result in the loss of information, access to properties (tangible or intangible), or the services of personnel.
Exposure to those types of risks and the planning for business continuity is an integral part of an organization s risk management process.
Amount capitalized to the balance sheet for contributions by an entity to major assets owned by the entity, including expenditure on: • capital renewal of existing assets that returns the service potential or the life of the asset to that which it had originally _________________________________________________________________________________________________ Report on state-owned entities & statutory authorities 68 Term Definition Office of the Auditor General – 2015 financial audits Consolidated fund account Credit rating Customer credit Risk Deferred income Deficiencies Depreciation Estimated useful lives • capital expansion which extends an existing asset at the same standard to a new group of users.
The main bank account of the government where public monies are paid into for the operations of government.

Trust money is not paid into this account.

A credit rating is an assessment of a borrower's credit worthiness.

It takes into account their ability to repay a debt or their likelihood of defaulting.

A credit risk is the risk of default on a debt that may arise from a borrower failing to make required payments.
Deferred income) refers to money received by an entity before it provides the related goods or services to the customer.

Failing, weakness or shortcoming The systematic allocation of a fixed asset's capital value as an expense over its expected useful life to take account of normal usage, obsolescence, or the passage of time.
Estimated lifespan of a depreciable fixed asset, during which it can be expected to contribute to an entity’s operations Express an opinion A written expression of the auditor’s overall conclusion on the financial report based on audit evidence obtained.

Fraud Governance Governance Governing bodies Impairment An intentional act by one or more individuals among management, those charged with governance, employees, or third parties, involving the use of deception to obtain an unjust or illegal advantage.
Governance is defined as the manner in which those in vested authority uses its powers to achieve the institution’s objectives, including its powers to design, implement and innovate the organization’s policies, rules, systems and processes and to engage and involve its stakeholders.

The control arrangements in place at an entity that are used to govern and monitor its activities to achieve its strategic and operational goals.

A body of persons or officers having ultimate control.
They ar mainly constituted for the purpose of administration.

When an asset’s carrying amount exceeds the amount that can be recovered through use or sale of the asset.
_________________________________________________________________________________________________ Report on state-owned entities & statutory authorities 69 Office of the Auditor General – 2015 financial audits Term Definition International Financial Reporting Standards Standards adopted by Fiji Institute of Accountants for financial reporting by large and medium entities in Fiji.
Loan risk grade Rating systems measure credit risk and differentiate individual credits and groups of credits by the risk they pose.

Management Those with the executive responsibility for conducting an enti operations.

Management services Organisation and coordination of the activities of a business done by another person or entity outside the business.
Material misstatement Materiality Misstatement Other significant matters A significant difference between the amount, classification, presentation, or disclosure of a reported financial statement item and the amount, classification, presentation, or disclosure that is required for the item to be in accordance with the applicable financial reporting framework.

This relates to the size or nature of the item or error judged in the particular circumstances of its omission or misstatement.
Information is material if its omission or misstatement could influence the economic decisions of users, taken on the basis of the financial statements.

A difference between the amount, classification, presentation, or disclosure of a reported financial report item and the amount, classification, presentation, or disclosure that is required for the item to be in accordance with the applicable financial reporting framework.

Misstatements can arise from error or fraud.


Include control weaknesses which could cause or is causing severe disruption of the process or severe adverse effect on the ability of an auditee to achieve process objectives and comply with relevant legislation.

It is likely that these issues may have an impact on the operations of the entities in future, if necessary action is not taken to address them.
Provision for loan accounts A provision made to allow for the possibility that some debts due for payment in the future may never be paid.

Reasonable assurance A high but not absolute level of assurance Recognition criteria Criterion which is used to recognise assets, liabilities, expenditure and revenue in financial statements.

Revaluation The action of assessing the value of something again.
_________________________________________________________________________________________________ Report on state-owned entities & statutory authorities 70 Term Risks Standards on auditing State-owned entities Leasehold land Valuation Value-adding Work in progress Written- down value Office of the Auditor General – 2015 financial audits Definition The probability or threat of quantifiable damage, injury, liability, loss, or any other negative occurrence that is caused by external or internal vulnerabilities, and that may be avoided through preemptive action International Standards on Auditing adopted by Fiji Institute of Accountants and applied by Office of the Auditor-General for audits carried out.
Include Government Commercial Companies, Commercial Statutory Authorities, Re-Organized Entities & Statutory Authorities Real property held by a tenant (lessee) under a lease for a fixed term, after which it is returned to the owner (the lessor).

The process of determining the fair value of an asset.

Financial or non-financial gains arising from improved compliance or mitigation of risks.

The total value of the materials and labor for unfinished projects.
The value of an asset after accounting for depreciation or amortization.

Zero-book values Arises when fixed assets are fully depreciated.

_________________________________________________________________________________________________ Report on state-owned entities & statutory authorities 71