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STANDING COMMITTEE ON PUBLIC ACCOUNTS Review of the Audit Report on Economic Services Sector – Audits of Government Ministries and Departments for the period 2016-2017 Financial Year PARLIAMENT OF THE REPUBLIC OF FIJI Parliamentary Paper No.
09 of 2021 February 2021 Published and printed by the Department of Legislature, Parliament House, Government Buildings, Suva TABLE OF CONTENT CHAIRPERSON‟S FOREWORD ............................................................................................................. 1 COMMITTEE MEMBERS ........................................................................................................................ 2 ACRONYMS ............................................................................................................................................ 3 INTRODUCTION ..................................................................................................................................... 4 Background ......................................................................................................................................... 4 Types of audit opinions issued ............................................................................................................ 5 COMMITTEE FINDINGS ON ECONOMIC SERVICES SECTOR ........................................................... 7 Head No.
30 – Ministry of Agriculture ...................................................................................................... 7 Head No.

32 – Ministry of Fisheries and Forests ................................................................................... 19 Head No.

33 – Ministry of Lands and Mineral Resources ...................................................................... 35 Head No.
34 – Ministry of Industry, Trade and Tourism ........................................................................ 43 Head No.

35 – Ministry of Sugar Industry .............................................................................................. 48 Head No.

36 – Ministry of Public Enterprise and Government Printing .................................................. 51 Head No.
37 – Ministry of Local Government, Town Country Planning and Environment ..................... 54 CONCLUSION ....................................................................................................................................... 75 APPENDICES ....................................................................................................................................... 77 CHAIRPERSON’S FOREWORD I am pleased to present the Committee review report on the 2017 Audit Report on Economic Services Sector.
The Economic services sector included the Ministry of Agriculture, Ministry of Fisheries and Forests, Ministry of Lands and Mineral Resources, Ministry of Industry, Trade and Tourism, Ministry of Sugar Industry, Ministry of Public Enterprise and Government Printing and Ministry of Local Government, Town Country Planning and Environment.
The Auditor-General had issued three (3) unmodified audit opinion and four (4) Modified audit opinion to the various ministries and departments financial statements that were audited under this sector.

It is important to note that Ministries and Departments that were scrutinized by the Committee were not invited for interview because of the COVID 19 restrictions that were in place at that time but were requested instead to provide written response on audit issues that were raised in the audit report.
The Committee noted that some of the Ministries had addressed some of the audit issues raised in the audit report while some are working towards resolving these internal control issues.

The Committee strongly recommends that immediate action is required by the respective Ministries and Departments Heads in order to improve financial accountability within each Ministry.
I sincerely thank all the Honourable Members of the Committee for their valuable contribution in the successful compilation of this bipartisan report, namely Hon.

Joseph Nand, Hon.

Vijendra Prakash (former MP), Hon.

Aseri Radrodro and Hon.

Ro Teimumu Kepa.

I also extend my gratitude to Hon.

Mikaele Leawere who stood in as an alternate Member.

I also wish to acknowledge the Secretariat for their support in the compilation and finalisation of this bi- partisan report.
With those few words, I commend this report to Parliament.

Hon.

Alvick Avhikrit Maharaj Chairperson 1 The substantive members of the Standing Committee on Public Accounts are as follow: COMMITTEE MEMBERS Hon.

Alvick Avhikrit Maharaj (Chairperson) Hon.

Joseph Nitya Nand (Deputy Chairperson) (Opposition Member) Hon.

Aseri Masivou Radrodro Hon.

Ro Teimumu Kepa (Opposition Member) Hon.
Vijendra Prakash (former Government Member) 2 AR BOS CIU EFT EoI FICAC FNPF FS FSC FY FMIS GPSD iTLTB JEE JV LWRM IHRDP LPO M&E MOA OAG PS PSA RFA RIE SEG SOP TMA TRCO VAT VQR ACRONYMS Accounts Receivable Board of Survey Construction Implementation Unit Electronic Fund Transfer Expression of Interest Fiji Independent Commission Against Corruption Fiji National Provident Fund Financial Statements Fiji Sugar Corporation Financial Year Financial Management Information System Government Printing Services Department iTaukei Land Trust Board Job Evaluation Exercise Journal Vouchers Land Water Resource Management Integrated Human Resource Development Programme Local Purchasing Order Monitoring and Evaluation Memorandum of Agreement Office of the Auditor General Permanent Secretary Permanent Secretary Agriculture Revolving Fund Account Requisition to Incur Expenditure Standard Expenditure Group Standard Operating Procedures Trading and Manufacturing Account Temporary Reliving Clerical Officer Value Added Tax Vehicle Quarterly Report 3 INTRODUCTION Background The 2017 Audit Report on Economic Services Sector (Parliamentary Paper No.
9 of 2019) was tabled in Parliament on Monday 11 February 2019 and was referred to the Standing Committee on Public Accounts, for its scrutiny pursuant to Standing Orders 38 (2).
Standing Orders 109 (2) (d) allows the Standing Committee on Public Accounts to “…..examine the accounts of the Republic of Fiji in respect of each financial year and reports of the Auditor-General, and for any other matter related to the expenditures of Government of the Republic of Fiji or an related body or activity (where directly or indirectly) that the Committee sees fit to review” Standing Orders 110 (1) (c) authorises the Standing Committee to “scrutinise the government departments with responsibility within the committee’s subject area, including by investigating, inquiring into, and making recommendations relating to any aspect of such a department’s administration, legislation or proposed legislative programme, budget, rationalisation, restructuring, functioning, organisation, structure and policy formulation”.
1.1 COMMITTEE PROCEDURE The Novel Coronavirus Disease renamed as COVID-19 was declared by the World Health Organization as a global pandemic on 11 March 2020.

The Parliament of the Republic of Fiji therefore undertook necessary precautionary measures to control the spread of the new virus strand outbreak.
In view of the above, pursuant to SO 112 (1) (b), the Standing Committee has the powers to “compel the production of documents or other materials or information as required for its proceedings and deliberations” The Committee had requested the Ministry‟s to provide a substantive written response to the questions raised by the Members of the Committee within a specific timeframe in relation to the 2017 Audit Report on Economic Services Sector.
The Committee scrutinized the following entities which were audited and reported by the Office of the Auditor General are as follows: 2017 AUDIT REPORT ON SOCIAL SERVICES SECTOR (PP No.

9 of 2019) No.

1.

2.

3.

4.

5.

6.

Head No.


30 32 33 34 35 37 Ministry/Department Ministry of Agriculture Ministry of Fisheries and Forest Ministry of Lands & Mineral Resources Ministry of Industry, Trade and Tourism Ministry of Sugar Industry Ministry of Local Government, Town Country Planning & Environment 1.2 COMMITTEE MEMBERS Pursuant to SO 118 (1), “A majority of the members of the standing committee shall constitute a quorum”.
The substantive members of the Standing Committee on Public Accounts are:– 4 1.

Hon.

Alvick Avhikrit Maharaj, MP (Chairperson) 2.

Hon.

Joseph Nitya Nand, MP (Deputy Chairperson) 3.

Hon.

Vijendra Prakash, MP (former Member) 4.

Hon.

Aseri Masivou Radrodro, MP (Member) 5.

Hon.


Ro Teimumu Kepa, MP (Member) Types of audit opinions issued In accordance with International Standard on Auditing:– An unmodified opinion (unqualified) is expressed when the financial statements are prepared in accordance with the Financial Management Act, Finance Instructions 2010, Finance (Amendment) Instructions 2016 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 agency.
A modified opinion (qualified) is issued 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.

A Disclaimer of Opinion is issued 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.
An Emphasis of Matter paragraph is included 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.

As at 30 September 2018, the Auditor-General issued audit opinions on 7 agency financial statements of ministries and departments in the Economic Services Sector for the 2016-2017 financial year.
Modified Audit Opinion The Auditor-General issued modified opinions for the following Ministries:  Ministry of Agriculture;  Ministry of Fisheries and Forests;  Ministry of Lands and Mineral Resources; and  Ministry of Local Government, Town Country Planning and Environment.

The above listed Ministries were issued with a modified opinion for the following reasons: 5 1.
Understatement of expenditure balance as a result of non-clearance of Standard Liability Account and Revolving Fund Advance account; 2.

Unreconciled variance in cash balance between cash ledger and bank reconciliation; 3.

Insufficient cash balance in the bank account to support cash received and utilized; 4.

Lack of supporting documents to support expenditures recorded in the Statement of Profit and Loss for Trading and Manufacturing Accounts (TMA); 5.
Lack of sufficient documents to support sales in the TMA account; 6.

Lack of supporting documents for the Trust Fund Account balances; 7.

Lack of supporting documents to substantiate occurrence of expenditure; 8.

Lack of supporting documents to substantiate revenue; 9.

Unreconciled variance of $673,811 in Land and Property Rent collected as amount recorded in the Crown Land Lease System of $12,745,771 while the FMIS general ledger had a balance of $13,419,582; and 10.
Incorrect posting of expenditure Unmodified Audit Opinion The Auditor-General issued unmodified opinions for the following Ministries:  Ministry of Industry, Trade and Tourism;  Ministry of Sugar Industry; and  Ministry of Public Enterprise and Government Printing 6 COMMITTEE FINDINGS ON ECONOMIC SERVICES SECTOR Head No.

30 – Ministry of Agriculture PART A: FINANCIAL STATEMENT 30.1 Audit Opinion The audit of the 2017 accounts of the Ministry of Agriculture resulted in a qualified audit opinion.
The qualification was due to the following: 1.

Included in the Land Water Resource Management („LWRM‟) Trust Fund Account balance is retention fund of $329,148 which has been carried forward from previous years.

The Ministry was unable to provide appropriate supporting documents to ascertain whether the retention period for the projects of which retention funds were retained are valid.
As a result, I was unable to ascertain the accuracy and obligation of the retention fund of $329,148 included in the LWRM Trust Fund Account balance.

2.

The Ministry suffered loss through expiration of drugs and livestock mortality amounting to $63,405.

Instead of being expensed, the amount was directly adjusted to the closing ending inventory balance thus overstating the cost of goods sold.

Without further qualifying the opinion above, attention was also drawn to the following matter: 3.
Internal controls over payroll expenses and management of inventory for trading activity were generally found to be weak and if not addressed promptly may result in material misstatements and possible financial losses in the future.

The Committee was informed that the LWRM Trust Fund had been reconciled and closed with balance of fund transferred to the Ministry of Waterways.

A Board of Survey („BOS‟) team was appointed to look into the issue of expired drugs and this had been written off.
The Committee noted the response of the Ministry and recommends that OAG provides an update on their next audit report.

Statement of Receipts and Expenditure 30.2 The Ministry collected revenue totaling $638,213 and incurred a total expenditure of $56,141,296 for the year ended 31 July 2017.
Statement of Receipts and Expenditure for 2017 Description Agricultural Produce & Inspection Fees License Meat Inspection Veterinary and Animal Quarantine Sale of Sheep and Wool Rest House 31 July 2017 $ 31 July 2016 $ 339 41,075 19,280 12,327 30,126 9,234 7 203 30,662 14,336 8,518 4,660 2,651 Description Rental for Quarters Registration Commission Sale of Farm Produce Clearance of previous years trust Miscellaneous Revenue Overpayment Recoveries Water Charges Rural electrification Total Revenue Established Staff Government Wage Earners Travel & Communications Maintenance & Operations Purchase of Goods & Services Operating Grants & Transfers Special Expenditure Total Operating Expenditure Capital Construction Capital Purchases Capital grants and transfers Total Capital Expenditure Value Added Tax Total Expenditure 31 July 2017 31 July 2016 61,084 6,943 24,227 32,227 41,476 280,751 77,745 661 718 638,213 12,431,521 5,444,014 774,032 2,113,395 624,846 3,169,595 2,289,910 26,847,313 17,474,568 1,078,114 8,596,684 27,149,366 35,344 2,154 14,221 21,935 --- 117,693 20,767 199 344 273,783 7,469,249 3,438,174 449,730 1,387,954 388,589 2,716,499 1,036,921 16,887,116 7,860,937 5,219 4,654,588 12,520,744 2,144,617 1,000,364 56,141,296 30,408,224 In addition, the following factors contributed to the increase in balances for some account areas: 4.
The significant increase in revenue for the 2017 financial year was attributed to the increase in miscellaneous revenue collections arising from the sale of agro inputs to farmers.

Moreover, there was also an increase in the sale of the new breeds of sheep and goat that was imported by the Ministry and the increase in salary recovery from staffs for government quarters rent during the year.

5.
5.

Capital Construction expenditure increased by $9,613,631 in 2017 compared to 2016 due to various agriculture rehabilitation programmes implemented by the Ministry after the TC Winston.

Capital programs undertaken during the year were mainly related to the Crop Extension Services Livestock Extension Services, Research, irrigation improvement and land, drainage and flood protection services provided by the Ministry.

6.
6.

Capital purchase increased in 2017 due to the implementation the Farm Mechanisation Programme which includes purchase of 10-wheeler truck and digger for the central division and purchase of six tractors for respective farmers and agriculture stations.

The Ministry also incurred expenditures for the purchase of equipment for the Agricultural Chemistry Lab during the year.
Appropriation Statement 30.3 The Audit noted that the Ministry incurred expenditure totaling $56.1 million in 2017 against a revised budget of $74.4 million in accordance with Section 19 of the Financial Management Act 2004, resulting 8 in savings of $18.2 million or 25 per cent.

The significant savings in Capital Construction expenses was mainly attributed to the delay in the tender process, vetting/finalization of contract documents and requisition to incur funds (RIE) applications.
These includes projects funds allocated under the Farm Access Roads, Construction of Office & Staff Quarters, Ginger Development Programme, Rice Revitalisation Programme Development, Export Promotion Programme, BTEC, Livestock Rehabilitation Programme, Land Drainage and Flood Protection programme that were under-utilised at year end.

Animal waste management and Fiji Agriculture Partnership Project funds were also not utilised.
The savings in Capital Grants and Transfers was due to the under-utilization of budgeted funds for land clearing, Rural and Outer Island Programme and Sheep Multiplication Programme.

The underutilization of funds was also attributed to the delay in the tender process and vetting/finalization of contract documents.
Appropriation Statement for 2017 SEG Item 3 1 2 Established Staff Government Wage Earners Travel & Communication 4 Maintenance & Operations 5 8 7 6 Purchase of Goods & Services Operating Grants & Transfers Special expenditure Total Operating Costs Capital Construction Capital Purchase 10 Capital Grants& Transfers Total Capital Expenditure Value Added Tax TOTAL 13 9 Budget Estimate 14,162,452 6,112,962 797,300 2,427,081 704,800 3,564,931 2,811,500 30,581,026 27,442,415 1,626,450 11,560,000 40,628,865 3,222,900 74,432,791 Changes Revised Estimate Actual Expenditure Lapsed Appropriation --- --- --- --- --- --- --- --- --- --- --- --- --- --- The Committee was informed of the following factors that contributed to the delay in the tender process, vetting of contract documents and Requisition to incur Expenditure application:– a) Tender Process 9 The tender process cycle was independent and the tender committee members and management are fully accountable for the processes involved.
If there was a demand for technical input such as road or civil works, it takes approximately 3 to 4 months from the calling to award of tender.

The initial concept was drawn up by the Agricultural Officers.

This proved to be a challenge in terms of getting the right scope or specifications of the tender products given that the work/products can range from machines, construction of infrastructure to renovation of office buildings and staff quarters.
The Ministry did not have the capacity to conduct electrical, civil and mechanical work due to job specification of technical people and the relocation of the Land Water Resources Management were moved to the new Ministry of Waterways.

Therefore, the Ministry continued to rely on Engineers who are with Ministry of Waterways, Ministry of Infrastructure and Transport.
There are now serious discussions at management level on the possibility of recruiting a qualified engineer to look after these tasks which would greatly fast track the process.
To help resolve this issue, the Ministry had:–  Appointed a tender committee to look after the whole tender process and also liaise with all stakeholders especially for those that require technical specifications;  The tender committee and management took a lead role in facilitating timely calling and awarding of the tender; and  The Ministry was also looked at created trade positions on civil works/engineers for timely scoping works.
b) Vetting and Finalization of Contract The Ministry relied on the Office of the solicitor general for the vetting of contracts.

The Ministry was proactive in the provision of detail and complete information in a timely manner to fast track the process.

The management had also taken a lead role in liaising directly with the Solicitor General on urgent agreements.
c) Requisition to Incur Expenditure (RIE) In 2018, the Ministry was able to obtain early approval of RIE‟s due to better planning and early submission of RIE‟s.

PART B: ASSESSMENT OF FINANCIAL GOVERNANCE 30.4 Assessment of Financial Governance The Auditor-General‟s assessment of the internal controls of the Ministry was ineffective as there were significant deficiencies identified in the internal control.
The Audit also noted that assessment on the timeliness of provision of management comments and signing of financial statements revealed ineffective.

The Committee was informed that the Ministry had worked closely with both our external and internal auditors in order to strengthen and communicate internal control policies to all staff of the Ministry.

The Ministry had worked towards strengthening and improving the following areas:– 10 1.
Control Environment a) The Ministry had taken disciplinary actions on twenty six officers since 2018.

Issue Fraud Abuse of Office Non-performance Number of Officers 5 11 10 b) The Ministry is currently investigating another thirty two officers who have breached internal control with possible disciplinary action through suspension or termination of their contracts.
Issue Fraud Abuse of Office Non-performance Number of Officers 15 6 11 c) Improved on OMRS compliance rating from 47 per cent in 2017 to 66 per cent in 2018.

The Ministry aims to achieve 90 -100 per cent in relation to OMRS compliance.

d) The Ministry had conducted 30 in-house training including overseas training to build internal capacity.

2.
2.

Risk Assessment e) The Ministry had investigated 2 cases related to fraud and also had drawn up various Standard Operating procedures to help mitigate these risks.

The Ministry also had a Compliance and Ethics Unit to train and handle all internal investigation.

3.

Control Activities f) The Ministry had developed SOPs and also trained officers on SOP to aid in internal control.
The Ministry recently engaged two consultants from the Civil Service Reform Unit to train our staff on how processes and systems could be reengineered to protect the interest of both, the government and the customers.

4.

Information and Communication g) Management had developed a Dashboard system where it tracks critical issues as well as those related to internal controls.

This allowed Executive Management to pinpoint possible deficient areas and took corrective measures early.
These were either communicated through Skype meetings with our key divisional officers or through internal circulars on process and procedures that need to be strengthened.

5.

Monitoring Activities h) The Ministry had commenced its quarterly spot check on financial procedures and also stock take for TMA.

The Divisions along with the M&E Unit had monitored their respective programs which were an on-going process.
The ministry had also strengthened its M&E unit for all capital programs with regular reporting to Executive Management.

During the last financial year, the HQ M&E unit conducted monitoring exercise for all major capital projects.

The Ministry in recognition of the importance of monitoring activities had also included this in our 5 year Strategic Development Plan.

The Committee noted the explanation given by the Ministry and recommends that it improves its financial governance structure/framework.
11 PART C: OTHER SIGNIFICANT MATTERS a) Non-Preparation of Wages Reconciliation Audit noted that the Ministry did not prepare the wages reconciliation for all the pays during the 2016- 2017 financial year.

The last reconciliation was prepared for pay number 10/2016.

As at date of audit, the Ministry was still in the process of updating the reconciliations backlog.

The Ministry had noted the audit recommendation and put on all concerted effort to update the period reconciliation.
The Committee noted the delays in the preparation of wages reconciliation.

Therefore, the Committee recommends that the Ministry should ensure that salaries and wages reconciliations are prepared on a timely basis.

b) Anomalies in Salary Reconciliation Balances The audit review of the certified salary reconciliations prepared by the Ministry and noted the following anomalies:– 1.
The salary reconciliation for 3 pays were not provided to audit despite numerous requests, hence the audit could not review the reconciliations for accuracy.

This includes the fortnightly salary reconciliation for pay numbers 16/2016, 26/2016 and 13/2017.

2.

Variances were noted between the opening balance of the current pay reconciliation and ending balance from the previous pay reconciliation for pay numbers 18/2016 to 22/2016 and pay 24/2016.
No explanation was provided by the Ministry to explain the variances.
Variance in Opening and Closing Monthly Salary Reconciliation Pay Number 17/2016 18/2016 19/2016 20/2016 21/2016 22/2016 23/2016 24/2016 Opening Balance as per Reconciliation ($) Closing Balance as per Reconciliation ($) --- 389,729.77 389,656.79 395,436.95 384,289.95 422,670.79 383,933.12 404,425.83 394,270.62 390,143.71 396,899.26 385,903.40 426,765.85 383,933.12 404,912.75 392,653.07 The Committee was informed that the Ministry invited the Salary Section from the Ministry of Economy to conduct training on issues highlighted above on 5 May 2019.
The training was instrumental in our performance in the 2018/2019 FY where our reconciliation on salary and wages was consistent and the required information was correctly submitted to the Ministry of Economy.

The Ministry was strived to maintain the same for the 2019/2020FY.
The Committee was concerned on the delays by the Ministry in addressing these reconciliation anomalies especially regarding salary reconciliation which increases the risk of errors and fraudulent salary payments occurring within the Ministry.

12 The Committee recommended that the Ministry should provide trainings, supervision and monitoring on a regular basis to its staff.

Salary reconciliation should be prepared and monitored on a regular basis.

3.
Governance Issue - Trading and manufacturing Account Operation The Audit review of internal control environment for the Trading and Manufacturing Accounts operated by the Ministry revealed the following weaknesses:  The Ministry of Agriculture did not have an approved Business Plan during the 2016/2017 financial year for the operation of the TMAs contrary to section 29 of the Finance Instructions 2010;  The Ministry had also not instituted specific policies and procedures to guide key financial processes and controls for the management of its TMA sales, expenditure, personnel expenditure, inventory and its liabilities;  Proper monitoring of the TMA operational activities was not carried out by the Ministry during the year.
Monthly stock reports were not submitted while monthly financial reports were not prepared in order to assess the TMAs financial performance during the year and determine its profitability or viability.

The Committee was informed that the Ministry had prepared a business plan however; it was not submitted to the Ministry of Economy.

There were some amendments required by the PS on the report.

This had been updated and will be incorporated in this year‟s report.
The Committee was further informed that the Ministry in its efforts to address its TMA governance issue had:  Created an Assistant Accountant post who now is responsible for the monthly submission of financial reports, monitoring TMA sales, liabilities and expenditure;  The Ministry has also improved its processes whereby Divisions are submitting their monthly return in a timely manner whereby deficiencies are detected early.

This report includes monthly stock take and loss of livestock report.
 Appointed an agricultural officer to review its TMA operation and draw up operational SOPs.
RECOMMENDATIONS (i) The Committee concurred with the recommendation of the Auditor-General that the Business Plan is approved by the Permanent Secretary and a copy is submitted to Ministry of Economy by 30 June every year; (ii) The Committee encouraged the Ministry to strengthen its monitoring activities of the TMA operations and financial performance; and 13 (iii) The Committee recommended that the Ministry adheres to the Financial Instruction 2010- Section 29.

4.
4.

Inventory Obsolescence and Mortality of Livestock The audit noted that the Ministry suffered loss through expiration of drugs and livestock mortality amounting $63,405 during the year.

It was also noted that instead of the cost of the drugs/animals being expensed, it was directly adjusted to the closing inventory balance thus overstating the cost of the goods sold.
Details of Expired Stock and Livestock Mortality Items grouping Item Tylan Soluble CCD Amprolium Utozyme Pessaries 10's Xylazil 100 Dimmitrol 200mg tabs Equivac T Recombitek C6 Savlon Pig Cattle Drugs (Expired) Livestock Total Value ($) 113.70 132.70 3,354.45 782.10 119.70 44,021.25 3,400.00 152.00 1,613.00 9,716.00 63,404.90 The Committee was informed that the Ministry had recruited three veterinarians that help management ensure proper forecasting of stocks were carried out, avoid overstocking, assisting our clerks in forecasting threshold of expired drugs, monitor monthly stock return and submit quarterly stock take whereby expired drugs could be detected early and boarded.
At the same time new stock can be ordered on time to replenish existing stock.

In regards to livestock mortality, the Ministry had worked with a consultant to address worm resistance, frequent dog trapping and safely close up stock at night.
The Committee noted the explanation given by the Ministry and recommended that the Ministry should take corrective measures such as proper procurement planning, frequent stock monitoring, improve public awareness and provide adequate trainings to livestock supervisors and farm hands.

5.
5.

Variances in inventory quantity during annual stock take Audit noted that the physical count of inventory noted significant variances between the inventory quantity as per the stock cards and the actual quantity of inventory physically held in stock.
Details of inventory items with variance Item Quantity in stock Quantity as per Variance Unit cost Value stock cards 18kg barbed wire 25kg barbed wire 0 109 25 119 (25) (10) ($) 110.00 120.00 ($) 2750.00 1200.00 14 Item Quantity in stock Quantity as per Variance Unit cost Value stock cards 3 ft goat fence 4 ft goat fence Pine Post - 1.8m x 75mm Pine Post - 1.8m x 100mm Pine Post - 1.8m x 125mm Pine Post - 1.8m x 150mm Pine Post - 3m x 100mm Pine Post - 3m x 125mm Pine Post - 3m x 150mm Total 0 50 311 522 132 119 30 5 213 90 0 245 417 300 352 99 56 255 (90) 50 66 105 (168) (233) (69) (51) (42) ($) 110.00 130.00 12.50 14.50 ($) 9900.00 6500.00 825.00 1522.50 22.50 3780.00 30.50 7106.50 30.50 37.00 55.50 2104.50 1887.00 2331.00 39,906.50 Moreover, it was noted that the inventory cards were not updated on a regular basis and the Ministry could not reconcile the above variances during the stocktake.
Ministry‟s comments in the Audit Report stated that the anomalies between the physical and the inventory records were due to poor and inadequate record keeping.

This was due to the following:–  There was no regular stock take and updating of inventory; and  The CUT unit was also challenged with lack of staff.
Going forward, the Ministry would address the above issues by:– o Reviewing the processes of inflow & outflow of inventories; o Undertake quarterly stock take from the new financial year; o Job descriptions of the three casual labourer positions, recorder has been prepared to be advertised for recruitment in the next financial year; o Expression of Interest (EOI) for the AACUT positions had been prepared for recruitment; o All sales and inventory documents to be countersigned by AO CUT weekly; and o Conduct monthly stock take and update inventories with countersigning by AO CUT.
The Committee noted with concern that this was an on-going issue as this reflected poorly on improper record management of the Ministry.

The Ministry should ensure that proper inventory records are maintained and stock cards are updates on a regular basis.

The Ministry should consider conducting monthly stocktake to detect and investigate stock variance.

6.
6.

Anomalies in TMA closing inventory for drugs The Audit review of the stock take report for drugs noted the following anomalies:  Drugs were being valued at the selling price contrary to Section 39 of the Finance Instructions 2011.

As a consequence, the valuation of drugs was overstated by $32,000.

15  The closing stock balance for drugs included expired stock of $17,835.16 which were kept at the Vatuwaqa VET Stores.
However, the amount did not include the expired stock kept in other clinics in Fiji as the clinics did not state the expired date of items in their TMA annual stocktake report.

 Different unit prices were used to value the closing inventory balances for livestock (cattle) for each of the different stations namely the Koronivia Research Station and Sigatoka Research Station.

The weight of the cattle was not considered when valuing the cattle held at the Koronivia Research Station.
The Ministry‟s commented in the audit report and stated that the audit comments were noted.

For the 2017/2018 financial year the stock value at cost price would be used instead of the stock selling price.

The Ministry would appoint a BOS team to include a veterinarian to certify the proposal for the writing off of expired drugs.

7.

Difference in prices of cattle at Koronivia and Sigatoka The cattle at Koronivia were of the dairy breeds of cattle imported from New Zealand in 2011.
They‟re pure Friesian dairy breeds‟ pregnant cows and growing heifers and bulls.

They were brought in to rehabilitate the farms where the animals were condemned due to brucellosis.

The cattle were primary grown for milk production.

The price was set at a standard of $1000.00 per head for adult mature cattle and $250.00 per head for younger animals less than 6 months of age.

A committee was set up by the Ministry of Agriculture, which had operated on the approved mentioned price.
At point of sale the weight was not considered due to the fact that it was government initiative to support the dairy industry in Fiji.

The price for the New Zealand cattle was approved by the Ministry.

A proposal will be prepared to consider a price restructure to match the dilution of the genetics in the stock and also the status.

No sale will be conducted due to the positive TB status of the Koronivia farm.

The cattle at Sigatoka were all beef breed type and they‟re primarily raised to produce meat.
The breeds were crosses of Limousine, Santa Gertrudis, Hereford, Brahman breeds.

The stocks were weighed at point of sale to determine the cost per head with the class/age of the animal.

The cattle at Sigatoka were sold at the approved government rates.

The Committee was informed that the Ministry had taken necessary measures to inform sections to abide with the procurement regulations accordingly and this included the recording of stock at cost price.
The 2018-2019 financial stock take report had been reported on cost price and not on sales price.

8.

Anomalies noted in Main Trust Fund (LWRM) Audit noted that the main trust fund account had a balance of $817,357.60 as at 31 July 2017 out of which a sum of $ 329,147.89 related to retention monies which were carried forward from prior years and were not paid out of the account when the defects liability period for the projects had expired.
Details of Retention Monies carried forward from prior years Name of Company Company A Company B Contract/RR Number RR # 321709 Not Provided Amount ($) 11,463.78 18,000 16 Name of Company Company C Company D Company E Company F Company G Company H Company E Company D Company E Company I Company J Company H Company D Company I Company K Company L Company M Company N Company N Company O Company P Company Q Company M Total Contract/RR Number RR # 663020 (CTN # WSC 01/2009) (CTN # WSC 14/2010) (CTN # WSC 16/2010) (CTN # WSC 19/2010) (CTN # WSC 20/2010) (CTN # WSC 21/2010) (CTN # WSC 29/2010) (CTN # WSC 30/2010) (CTN # WSC 31/2010) (CTN # WSC 41/2010) (CTN # WSC 44/2011) (CTN # WSC 157/2011) (CTN # WSC 218/2012) (CTN # WSC 219/2012) (CTN # CSC 21/2013) (CTN # WSC 32/2013) (CTN # WSC 43/2013) (CTN # WSC 110/2013) (CTN # WSC 159/2013) (CTN # CSC 35/2014) (CTN # CSC 21/2013) (CTN # WSC 37/2014) Amount ($) 2,490.33 558.29 1,261.63 722.53 171.71 21,916.32 15,987.00 4,397.69 29,054.84 301.36 39,284.93 10,465.77 314.03 12,546.03 7,297.31 5,414.20 65,116.51 34,610.84 19,690.65 11,145.86 2,153.03 3,743.25 11,040.00 329,147.89 The Ministry‟s commented in the audit report stated that the audit comment was noted.
The trust fund account was no longer handled by the Ministry of Agriculture but now handled by the Ministry of Waterways.

Necessary adjustments were processed and unidentified balances were currently being verified before transfer was made to Revenue.

This would be finalised within the current financial year.

9.

Unsubstantiated TMA VAT charges Audit noted that although Ministry of Agriculture‟s TMA was exempted from VAT, the general ledger showed a VAT payable balance of $22,113.13.
It was noted that this amount had been carried forward from prior years without any action taken by the Ministry to rectify the balance.

As a result, the VAT payable amount was incorrectly stated in TMA balance sheet.

The Committee was informed that the Ministry had collected the source document related to TMA VAT charges and had completed the necessary adjustments.

10.
10.

Long Outstanding Underline Accounts Audit review of the Underline Accounts reconciliation revealed the following anomalies:  “VAT from provision of goods and services” component of Operating Trust Fund Account had accumulated from previous years to $184,970.53 and comprised of 50 per cent of the closing balance $367,233.77 as at 31 July 2017.
17  “Withholding tax payable” component of SLG 84 Account had accumulated from previous years to $160,170.95 of which $159,799.59 was yet to be cleared by the Ministry.
Long Outstanding Underline Accounts Account Description 1-30101-30999- 863201 VAT from provision of goods and services Withholding Tax Payable Actual 2017 (184,971) Actual 2016 (163,082) Actual 2015 (162,376) Actual 2014 (166,018) Actual 2013 (139,538) 1-30101-30101- 840602 The increasing liability balances indicate that VAT and withholding taxes were not remitted to the Fiji Revenue and Customs Service (FRCS) on a timely manner.
Delays in payments to FRCS may result in the Ministry incurred penalties for late payment.

(160,171) (164,125) (159,800) --- --- The Ministry‟s commented in the audit report and stated that the audit comments were noted.

The Ministry of Agriculture had been consistent in its VAT payments to FRCS.

The brought forward balance of withholding tax which amounts to $159,799.59 was the accumulated balance from previous years (2013).
This consisted of mispostings and provisional tax deducted from contractors engaged by the Ministry.

The Ministry was liaising with the Ministry of Economy on ways to appropriately adjust this outstanding amount.

11.

Unauthorized losses recorded in the Statement of Losses As at the date of audit the losses amounting to $39,420 disclosed in the Statement of Losses was not endorsed by the Permanent Secretary and forwarded to the Permanent Secretary of the Ministry of Economy for approval.
The losses include Loss of Assets (Office Equipment) of $9,996 and Loss of Assets (Livestock) of $29,424.

The Ministry commented in the audit report and stated that the Ministry had established a fixed assets register.

The Board of survey officer should exercise procedure and apply provision 14.1 on incurred losses for every losses incurred (AFM 2017).

Quarterly reports on losses should be submitted to PSA and PS Economy a week after the end of each quarter vide AFM 14.2 of 2017.
The Committee noted with concern the amount of losses disclosed in the Statement of Losses which was not endorsed by the Permanent Secretary and forwarded to the Permanent Secretary of the Ministry of Economy for approval.

Therefore, the Committee strongly recommends that the Ministry should strictly adhere to its Finance Manual to only disclose approved write offs in the Statement of Losses.

18 Head No.
18 Head No.

32 – Ministry of Fisheries and Forests PART A: FINANCIAL STATEMENT 32.1 Audit Opinion The audit of the 2017 accounts of the Ministry of Fisheries and Forests resulted in a qualified audit opinion.

The reasons for the qualification were as follows: Operating Fund Account 1.

Expenditures amounting to $276,181 were not recorded in the Statement of Receipts and Expenditure for the year ended 31 July 2017.
This amount related to unrecorded expenditures of $191,147 paid from Standard Liability Account 84 and retired Accountable Advances of $85,034 for the current year which were not cleared from the Revolving Fund Account.

As a result, the expenditure balance of $23,012,137 for the year ended 31 July 2017 is understated by $276,181.

Trading and Manufacturing Account 2.

3.

4.

5.

There was an unreconciled variance of $104,597 between the bank reconciliation and the Cash at Bank general ledger balance.
Consequently, I am not able to confirm the accuracy and completeness of the Cash at Bank balance of $1,896,419 recorded in the TMA Balance Sheet as at 31 July 2017.

The Ministry paid a sum of $2.5 million to the Trading and Manufacturing Activity (TMA) account from its operating budget for the purpose of salvaging logs after Tropical Cyclone Winston.

Out of this amount, a sum of $301,451 was utilised for this purpose in 2017 leaving a balance of $2,198,459 as at 31 July 2017.
The cash at bank balance of $1,896,419 recorded in the TMA Balance Sheet was not sufficient to support the remaining balance of $2,198,459.

The Ministry recorded total expenses of $1,288,574 in the TMA - Profit and Loss Statement for the year ended 31 July 2017.

The Ministry was not able to provide documentations to support expenditures totalling $515,515.

As a result, the Auditor-General was not able to verify the accuracy and completeness of the total expenses recorded in the Profit and Loss Statement.
The Ministry recorded sales of $1,161,623 in the TMA - Trading Account for the year ended 31 July 2017.

The Ministry was not able to provide documentations to support transactions totalling $306,623.

As a result, the Auditor-General was not able to verify the accuracy of the Sales amount recorded in the Trading Account.

Trust Fund Account 6.

The Ministry did not maintain a detailed listing of the beneficiaries of the Trust Accounts.
Consequently, the Auditor-General was not able to substantiate the completeness of the closing balances of $190,095 reflected in the Statement of Receipts and Payments for the Trust Fund Account.

Without further qualifying the above opinion, attention was drawn to the following: 19  The Ministry did not carry out a board of survey to verify the existence and condition of the assets under its authority contrary to Section 49 of the Finance Instruction 2010.
 The TMA account continued to operate at a loss for eight consecutive years from 2010.

 There was an overall excess of liabilities over assets of $111,344 in the TMA balance sheet as at 31 July 2017.

The Committee noted with concern that the Ministry did not carry out a board of survey to verify the existence and condition of the assets under its authority contrary to Section 49 of the Finance Instruction 2010.
Even though the TMA account continues to operate at a loss for eight consecutive years from 2010, there was an overall excess of liabilities over assets of $111,344 in the TMA balance sheet as at 31 July 2017.
The Ministry had rectified the records in the Statement of Receipts and Expenditure for the year ended 31 July 2017 as follows:  SLG 84 Account had been reconciled and recorded accordingly  The Ministry had requested the Ministry of Economy to write off the un-reconciled accountable advances carried forward from the previous years.

 The Ministry had reviewed their Accountable Advance implementation processes as they had implemented advance checklist.
For all advance less than $20k this must be approved by the Conservator of Forests and Director Corporate Services.

Advances over $20k but less than $50k must be approved by the Permanent Secretary for Forestry.

 True Trust Fund Account for One Third Subsidy Scheme had been referred to Ministry of Fisheries.

 The Ministry had improved their revenue collection strategies on scaling fees for the Native Timber and miscellaneous revenue.
Timber Revenue System (TRS) data have been implemented at HQ Accounts Section whereby data sent from the divisions is reconciled with FMIS GL Account.

 The Ministry had improved on the internal control environment and risk management strategies to curb any anomalies.

The Committee during the time of its deliberation on the Ministry of Fisheries and Forests were faced with challenges in getting appropriate responses because now the Ministry had been separated into two (2) as compared to the time of audit.
The Committee was informed that the total of $2.5 million paid into the TMA Account for the purpose of salvaging of logs after TC Winston are paid from respective sites to Nasinu as detailed below.
Name Of The Company Remarks Total Amount Till December 2017 $149,951.87 $380,235.04 $116,732.82 $646,919.73 Kishore Kumar New Time Limited Nadarivatu Sawmillers Total The Committee still concerned that whilst the Financial Year ended on 31/07/2017, the Operations continued until December 2017 and there is still a variance of $43,338.73 between the ending Bank Balance figure for audit and Ministry.
Hauling of Logs from Dawasamu and Navua Hauling of logs from Nadarivatu Hire of Loaders for Mobilization of Logs In Yard 20 32.2 Statement of Receipts and Expenditure The Ministry collected revenue totalling $2,718,654 and incurred a total expenditure of $23,012,137 for the year ended 31 July 2017.

Revenue mainly comprised of Native Timber Measurement, Sale of Fish & Ice, Off-shore Fisheries Management fees, Access Fees, Application Fees, Activity Fees, Permitting Fees and Miscellaneous Revenue.
Statement of Receipts and Expenditure for 2017 Description Native Timber Measurement Sale of Fish and Ice Offshore fees Other fees Total Revenue Established staff Government wage earners Travel and communications Maintenance and operations Purchase of goods and services Operating grants and transfers Special expenditures Total Operating Expenditure Capital construction Capital purchases Total Capital Expenditure Value added tax Total Expenditure 32.3 Appropriation Statement 31 July 2017 332,913 389,814 1,653,606 342,321 2,718,654 7,368,289 2,589,736 652,581 2,251,312 1,009,182 767,116 1,639,374 16,277,590 5,335,191 420,869 5,756,060 31 July 2016 228,092 232,490 751,141 176,979 1,388,702 4,801,264 1,278,765 412,304 1,791,308 779,516 690,517 955,788 10,709,462 4,824,823 539,040 5,363,863 978,487 841,512 23,012,137 16,914,837 The Ministry incurred expenditure totalling $23.01 million in 2016-2017 against a revised budget of $27.06 million, resulting in a saving of $4.05 million or 15 per cent.
Appropriation Statement for 2017 SEG Item Established staff Government wage earners Travel & communication Maintenance & operations Purchase of goods & services Budget Estimate Changes Revised Estimate 7,468,758 1,901,012 (98,086) 694,009 7,370,672 2,595,021 Actual Expenditure 7,368,289 2,589,736 Lapsed Appropriation 2,383 5,285 684,578 2,404,240 1,073,830 (28,918) (125,292) (47,818) 655,660 2,278,948 1,026,012 652,581 2,251,312 1,009,182 3,079 27,636 16,830 21 SEG Item 6 7 8 9 Operating grant & transfers Special expenditure Total Operating Expenditure Capital construction Capital purchases Total Capital Expenditure Value added tax 13 Total Expenditure Budget Estimate Changes Revised Estimate 804,524 (37,407) 767,117 Actual Expenditure 767,116 Lapsed Appropriation 1 3,288,729 (127,099) 3,161,630 1,639,374 1,522,256 17,625,671 229,389 17,855,060 16,277,590 1,577,470 7,825,040 400,000 (249,615) 23,108 7,575,425 423,108 5,335,191 420,869 2,240,234 2,239 8,225,040 (226,507) 7,998,533 5,756,060 2,242,473 1,210,200 (2,882) 1,207,318 978,487 228,831 27,060,911 --- 27,060,911 23,012,137 4,048,774 Audit noted that the significant savings were noted in the following areas: i) SEG 7  Reducing Emissions from Deforestation and Forest Degradation (World Bank) - $1,509,284 ii) SEG 8  Cyclone Rehabilitation – Construction of Fisheries Institutional Buildings – $984,111  Upgrade of Office and Quarters for Fisheries - $396,544  Upgrade of Office and Quarters for Forestry- $200,000  Construction of Multi Species Hatchery in Ra - $395,812 The savings were due to Forestry Officers engaged in the rehabilitation work carried out after TC Winston and skeleton staffs were left behind to look after the projects.
PART B: ASSESSMENT OF FINANCIAL GOVERNANCE 32.4 Assessment of Financial Governance The Auditor-General had assessed the internal controls of the Ministry as ineffective.

The assessment of the yearend close process, timeliness of management comments and the timeliness of signed financial statements received were also ineffective.

PART C: OTHER SIGNIFICANT MATTERS 1.


Revenue Anomalies Audit noted the following anomalies from review of revenue records:  The Timber Revenue System (TRS) was not integrated with the FMIS general ledger;  A variance of $59,263 was noted between the audit calculation and the FMIS general ledger for Timber Measurement Fees revenue; and  Variances were noted between Off-shore Revenue Summary Report and FMIS general ledger balances for Management, Access and Observer Fees.
22 The Committee was informed that the Ministry has taken steps to address the issues raised as follows:  TRS Revenue update and TRS Data base had been stored at the HQ Accounts Section to reconcile the revenue input from the divisions daily.
This was to reconcile the TRS data base inputs from the divisions against FMIS inputs at HQ;  The Ministry had developed an additional feature to the TRS system which automatically updates the FMIS records at HQ when revenue was entered from divisions by the Data Entry Operator; Variances could be monitored and corrected before reconciliation was done at the end of the month;  Staff training was conducted on revenue collection, Timber Revenue System Data Input Guidelines, FMIS users refresher training;  Debtor Register was being maintained;  Quarterly Revenue inspection was being conducted; and  Close monitoring of revenue and surprise checks on revenue collectors.
The Committee have noted the explanation given by the Ministry of Fisheries and recommends that the OAG provides an update to the Committee in its next audit.

2.

Unsubstantiated Accounts Receivable (AR) Balances Audit noted that the Ministry had substantial Accounts Receivable balances totalling $677,339 as at 31 July 2017 which had been carried forward from prior years.

In addition, audit noted the following anomalies: 1.
The Ministry did not maintain a debtor‟s register and listing for the balance outstanding as at 31 July 2017.

As such, our audit was not able to ascertain the existence of the accounts receivable balance; and 2.

The Ministry did not take follow-up on the outstanding balance of $677,339 as at 31 July 2017 in accordance with the debt recovery procedures in its Finance Manual.
The Committee was informed that the Ministry had requested for write off on these substantial amount to the Ministry of Economy on two occasions; one on 11th Sept 2018 and 2nd February 2019.

The Ministry had the evidence that all the receipts was lodged but due to system failure and incomplete process in the FMIS these amounts was still hanging in the system as outstanding thus the reason for request for write off.
The Ministry had taken the following steps to improve the debt recovery procedures:  Strengthened revenue collection strategy at HQ against FMIS and reconcile daily with the division revenue lodgements.

 Revenue checklist had been implemented on weekly basis for the divisions to update on their revenue collection.

 Debtor‟s Register had being maintained.

 Quarterly Revenue inspection was being conducted.

 Close monitoring of revenue and surprise checks on revenue collectors.
23 The Committee noted that this was a recurring issue as highlighted in previous years report and was concerned on the steps taken by the Ministry to request for write-off the amount of $677,339.

The Committee recommended that proper training, supervision and monitoring should be conducted to staff in the Ministry.

3.

Non-Clearance of Balances in Revolving Fund Account (RFA) As at 31 July 2017, the Ministry‟s Revolving Fund Account (RFA) had an outstanding balance of $378,271.
Audit review of the RFA revealed a number of anomalies.

Revolving Fund Account Anomalies Account Allocation 1-32101-32999-570101 Balance as at 31/7/17 8,704 1-32101-32999-570301 366,874 Audit Comments Detailed breakdown of the balance was not provided for audit review.

Thus our audit was not able to substantiate the correctness of the balance of $8,704 Expenditures totalling $85,034 were fully expended and acquitted for the financial year 2016/2017.
However, the appropriate expenditure allocation was not debited.

Supporting documents for accountable advance totalling $250,543 were not provided.

As such, our audit could not substantiate whether the advances were retired and whether the advances were used for the purpose it was given.

Prior Year Expenditures totalling $31,297 were fully expended and acquitted for the financial year ending 31/7/16.

However, the appropriate expenditure allocation was not debited.
Thus prior year expenditure was understated by $31,297.

1-32102-32999-570301 Total 2,693 $ 378,271 Balances carried forward from prior years.

The above findings indicated ineffective controls and supervisory checks in the administration of the RFA by the Ministry.

As a result, the expenditure in the Statement of receipts and Expenditures was understated by $85,034.
The Ministry‟s comment in the audit report stated that we had deactivated the 3 allocations and all the balances carried to the existing RFA allocation.

The Committee noted the Ministries explanation and request the OAG to provide an update on this issue in the next audit report.

4.

Anomalies in the Drawings Account Audit review of Drawings Account revealed the following anomalies:  The Ministry‟s unpresented cheque list included stale cheques/EFT amounting to $66,267.
24  There were differences between the total unpresented cheque listing and the FMIS general ledger.

The Committee was informed that the Ministry had rectified the variances noted between its reconciliation statements and general ledger and adjusted accordingly in FY 2017/2018.

The issue had been resolved and the Ministry was now up to date with all its reconciliations and submits by the 15th of each month.
This had been made possible by the recruitment of a qualified and experienced Senior Accounts Officer (SAO) who was responsible to ensure that monthly financial reports were submitted on time to the Ministry of Economy.

The Committee noted the Ministries explanation and request the OAG to provide an update in the next audit report.

5.
Overspending of funding received from Head 50 Audit review of the Accounts Payable Account noted the following anomalies:  The account had a debit balance totalling $191,147 which was contrary to the nature of the account; Account Allocation Description Debit Credit Details of Debit Balances Balance as at 31/7/17 110,208 1-32301-78999-840101 1-32301-78999-840102 1-32301-78999-840102- 009 Total Water life Company- Environment Assessment Biological Sampling Initiative WCPFC 13 460,295 350,087 64,153 574,802 41,544 516,472 22,609 58,330 191,147  The Ministry could not provide evidence that acquittals were prepared and submitted to Ministry of Economy; and  Prior year balances carried forward since 2016 totalling $7,506 are yet to be cleared.
Prior Year balances carried forward Account Allocation Description 1-32101-32999-840602 1-32301-78999-850202 Withholding Tax Payable Observer Levy Fee Total Balance as at 31/7/16 (5767) (1739) Debit Credit Balance as at 31/7/17 --- --- --- --- (5767) (1739) (7506) The Ministry‟s commented in the audit report and stated that the Ministry had agreed to the findings of the OAG.

As of to date the Ministry had improved on the ITTO SLG account which had a Credit balance.
The Committee noted the Ministry’s explanation and request the OAG to provide an update in the next audit report.

25 6.

Unsubstantiated Operating Trust Account balances Audit noted that contrary to the nature of the account, the Operating Trust Fund Account had debit balances amounting to $42,756.

Audit was also not able to substantiate Operating Trust Account balances totalling $1,792,396.
Moreover, the Operating Trust Account closing balances had been increasing for the past four years due to VAT returns not being filed.

The Ministry of Forestry informed the Committee that Operating Trust Fund Account reconciliation had been done and submitted to Ministry of Economy before 15th of every month.

Ministry had rectified the balance in the Operating trust account and adjusted it accordingly.

The challenge was in reconciling prior years‟ balance for adjustments.
The Ministry of Fisheries informed the Committee that the issue had been rectified and the Ministry had been registered with VAT.

VAT payments for 2018/2019 for $177,923.04 and $36,949.25 quarterly payment for 2019/2020 had been made.

The Committee noted the Ministry’s explanation and request the OAG to provide an update in the next audit report.

7.
7.

Expenditure Charged to Incorrect Allocation Audit noted that the review of a sample of payment vouchers revealed that the Ministry charged expenditures to wrong allocations.
Details of Expenditures Charged to Wrong Allocations Date Payment ID Amount ($) Posted to Description 1/11/2016 14418 12,724 SEG 09 23/11/16 76506 200 SEG 08 17/03/17 77277 4,890 SEG 08 28/03/17 77358 2,456 SEG 08 29/03/17 77377 2,634 SEG 08 24/0517 77814 2,160 SEG 08 31/05/17 77873 3,786 SEG 08 20/06/17 18398 16,497 SEG 08 29/06/17 18438 31,044 SEG 08 Total 76,391 Capital Purchase Capital Construction Capital Construction Capital Construction Capital Construction Capital Construction Capital Construction Capital Construction Capital Construction 26 Correct Expendit ure Group SEG 03 SEG 04 SEG 04 SEG 04 SEG 04 SEG 04 SEG 04 Description Travel and Communications Maintenance and Operations Maintenance and Operations Maintenance and Operations Maintenance and Operations Maintenance and Operations Maintenance and Operations SEG 03 Travel and Communications SEG 04 Maintenance and Operations The Committee was informed that the Ministry has implemented the following measures to avoid charges to incorrect allocation:  Ensure that all transactions were posted to their correct allocation in the FMIS general ledger;  Misposting were corrected simultaneously and posted into the FMIS general ledger;  Virement application had been implemented to curb over expenditure;  Adjustments in our cash flow to achieve monthly expenditures;  Compost Report was extracted on weekly basis whereby weekly reconciliation was done to avoid incorrect postings and adjustments of negative balances;  The Ministry had put in place close monitoring of payments and AP user modules;  All procurement was cross checked with procurement checklists with correct allocation stated to be used; and  Accounts checklist was implemented which provided guidance in procurement, budget allocation balance and approval to process.
JVs were done to correct misallocation of purchases.

The Committee noted the Ministries explanation and request the OAG to provide an update in the next audit report.

8.

Committing Current Year Budgetary Allocation for Prior Years Expenditure for which goods and services The Ministry had committed expenditures received/provided in the financial period ended 31 July 2017.
Audit noted that majority of the expenditures related to accountable advances issued in 2016 that were charged to SEG 8 – Capital Construction in 2017 through journal voucher No.
321058. totalling $84,816 Details of prior year Expenditures recorded in the 2016/2017 financial year Date Payment ID Amount Details of Payments 22/11/16 14838 29,924 12/1/2016 28/01/16 10/2/2016 16/02/16 17/02/16 1/6/2016 1/6/2016 Total 74864 74956 9288 9420 9425 11478 11479 1,200 4,226 22,793 2,984 10,368 5,427 84,816 Being payment for outstanding account, Invoice # 15927 dated30/05/16, 15953 dated 21/06/16, 15954 dated 21/06/16 and 15997dated 28/07/16.
Photo frames for Hon Minister‟s Room Opening of the Office at the Multi Species Hatchery in Caboni, Ra Province Monitoring of Community based and trailed lines within Cakaudrove Consultation after TC Winston Regularization of Good Will payment to customary fishing rights owners Subsistence claim for rehabilitation –Pearl (Spat Collection) Extension of Seaweed cluster farms within the Macuata province Payment of previous year‟s invoices from the FY 2016/2017 budget resulted in funds not being utilised by the Ministry for the purposes it was appropriated by Parliament.
The Ministry‟s commented that they agree to the findings and the way forward is to ensure that all outstanding are cleared within current financial year.

27 The Committee notes the Ministries explanation and request the OAG to update in the next audit report.

9.
9.

Anomalies in the Fisheries Main Trust Fund Account Audit review of the Ministry of Fisheries 1/3 Subsidy Scheme Main Trust Fund account and related records revealed the following anomalies:–  The Trust Fund account was established to account for monies obtained from the one-third contributions from fishermen.
However, approval for use of the account to deposit retention monies was not provided for audit review;  Standard Operating Procedures for operating the Main Trust Fund Account for the revised purpose was not provided for audit; and  Detailed listing for the closing balance of $190,095 as at 31 July 2017 was also not maintained by the Ministry.

The Ministry‟s comment in the audit report stated that they agreed to the findings and would develop SOP‟S for the Special Retention Trust Account.
Transfer of this Trust Account yet to be made as FMIS and Ministry of Fisheries had been notified on the transfer.

The Committee noted the Ministry’s explanation and request the OAG to update in the next audit report.

10.

Surcharge for Late Payment of FNPF Employer’s Contribution Audit noted that the Ministry paid amounts totalling $26,400 as surcharge for late payment of the ten per cent employer‟s contribution to the Fiji National Provident Fund.
This related to FNPF wages for the month of January 2017 that was paid in March 2017 instead of February 2017.

The Ministry‟s commented that the way forward will be to ensure that there is no late payment of FNPF.

The Committee noted the Ministries explanation and request the OAG to provide an update in the next audit report.

11.
11.

Variance between Bank Reconciliation and FMIS General Ledger Audit review of the bank reconciliation for the Trading and Manufacturing Account revealed a variance of $104,596 between closing bank reconciliation balance and FMIS general ledger balance.
Audit noted that variance was due to the Ministry using incorrect unpresented cheque listing in the July 2017 bank reconciliation; the July bank reconciliation prepared by the Ministry showed unpresented cheque listing balance of $126,013 which included $ 98,828 worth of cheques presented as at July 2017 and $5,769 worth of cheques recorded twice in the unpresented cheque listing.
Moreover, the OAG noted in its audit the variance of $969 between the amounts for cheque number 5096 recorded in the unpresented cheque listing of $309 and the amount presented in the bank statement of $1,278.

28 It was further noted that there was shortfall of $197,533 in the bank statement for the deferred Income of $2,198,548 recognised in TMA balance sheet.

The Ministry‟s commented that they acknowledged the audit findings and were putting in concerted effort to rectify those issues.
The Committee noted the Ministry’s explanation and request the OAG to provide an update in the next audit report.

12.

Journal Adjustments Passed without adequate Supporting Documents Audit noted that the Ministry posted journal vouchers into the FMIS general ledger without supporting documents.

Audit also noted that the original journal vouchers were misplaced and the Ministry prepared journals in response to audit query.

Journal Voucher No.

321070 was also not made available for audit purpose.
In addition, the Ministry processed batch number 321064 to transfer charges between Operating Funds Account (Fund 1) and the TMA (Fund 4).

The Ministry‟s commented that they concurred with the audit findings and as a way forward they would ensure that all necessary documents were attached to the payment voucher and journal and retained for audit purposes.

Journal Vouchers had been carried out to rectify the inter funding done on Fund 1 and Fund 4 for the 2017 – 2018 Financial year.
The Committee noted the Ministry’s explanation and request the OAG to provide an update in the next audit report.

13.

Failure to Lodge VAT Returns Audit noted that the Ministry did not lodge VAT returns for its Operating Fund and Trading and Manufacturing Accounts for the year ended 31 July 2017.

The last VAT return lodged for Trading and Manufacturing account was lodged in July 2013.
VAT returns for the Operating Fund account were not lodged for the months of August-December 2016, January, February, April, May and July 2017.

The Ministry‟s commented that they agreed to the audit findings as Operating Fund VAT had already lodged except for the TMA VAT return and they were currently working on it.

The Committee noted the Ministry’s explanation and request the OAG to provide an update in the next audit report.

14.
14.

Officer Authorising Payments above Approved Limit Audit noted that the Principal Accounts Officer, Senior Accounts Officer and the Accounts Officer were approving payments above their approval limits contrary to Section 2.3.1.of the Departments of Fisheries Finance manual.

The Ministry‟s commented that they agree to the audit findings and as a way forward procurement delegations have been revised and staffs are trained on procurement practices.
29 The Committee noted the Ministry’s explanation and request the OAG to provide an update in the next audit report.

15.

Procurement Anomalies Audit noted the following anomalies in the review of procurement of goods and services.
Date Payment ID Amount Particulars No Local Purchase Order issued 11,443 5049 9/6/2017 6973 12/4/2017 6949 Competitive quotes not obtained 11,443 9/6/2017 5049 6,973 12/4/2017 6949 Being payment for breakdown – electrical works Being payment for repair of sawmill motor bearing and varnishing motor & repair of control panel switch board Being payment for breakdown – electrical works Being payment for repair of sawmill motor bearing and varnishing motor & repair of control panel switch board No Invoice 28/04/17 6973 Being payment of royalty charges for the extraction of logs in Nakuvu for the TMA Nasinu operation.
Payment Voucher and Supporting Documents not stamped „‟PAID‟‟ 13,426 1/3/2017 6895 11,954 5/5/2017 6991 5760 3/4/2017 77411 13358 5/5/2017 17527 8015 Being payment of account for the log extraction and cartage from Nakavu toTUD/Nasinu at a total volume of 73.699m3 at $170.00 per cubic meter.
Being payment for Nakavu round logs with a total volume of 35.509m3 at a rate of$170/m3 Being payment of 1st upfront payment for quotation dated 21/03/17, last payment for the construction of workshop in Lakeba Pine Scheme.
Being payment for construction works carried out by the above vendor in Lakeba-invoice # Lakeba 002 Competitive Quotes sought from same vendors 3/4/2017 77411 13,358 Being payment of 1st upfront payment for quotation dated 21/03/17 5/5/2017 17527 30/05/17 17961 for the construction of Lakeba pine scheme workshop 8,015 Being payment for construction works carried out by the above vendor in Lakeba -invoice # Lakeba 002 5,343 Being payment of balance for PO91011016660, inv# Cicia 002, Cicia 003, as dated on the 13/07/17 for the construction of Cicia shed and invoice #1 28/06/17 78072 9,125 Being payment of INV #Lakeba 003 as dated on the 25/05/2017, last 26/07/17 18999 payment for the construction of workshop in Lakeba Pine Scheme 8,669 Being payment of balance for PO91011016660, inv# Cicia 002, Cicia 003, as dated on the 13/07/17 for the construction of Cicia shed and invoice #1 Missing Payment Voucher and Supporting documents 23/12/16 6853 28,441 PV and supporting documents could not be located 30 The absence of Competitive quotations, stamped Paid and missing payment vouchers and supporting documentations were contrary to the requirements of Section 2.4.2, 2.9.10,2.9.3, of the Departments Finance manual.
The Ministry‟s commented that the Ministry had strengthened its internal control and accounts staffs were trained to be more vigilant in preparing payment and journal vouchers and ensures that all supporting documents were attached before processing payments.

Supporting documentation now included in a checklist that requires three quotes.

The Committee noted the Ministry’s explanation and request the OAG to provide an update in the next audit report.

16.
16.

Purchases Made Without Tender Board Approval The audit highlighted that the Ministry was making payments exceeding $50,000 to two logging contractors (Company A and Company B) without approval of the tender board contrary to Section 2.4.1 of the Departments Finance Manual.
Payments made without Tender Date Payment ID Amount ($) Company A 7/10/2016 7/10/2016 11/10/2016 18/10/16 14/11/16 5/12/2016 23/12/16 1/3/2017 28/03/17 5/5/2017 7/7/2017 Company B 25/07/17 19/07/17 6/7/2017 1/6/2017 6/6/2017 29/06/17 23/06/17 26/06/17 24/05/17 6/4/ Date 29/03/17 Payment ID 6940 Amount ($) 6,782 It was also noted that payments continued to be made to Company A after the agreement 39 ceased on 31 December, 2016.
In addition, audit was not provided with documentary evidence to determine the selection process for Company A and Company B.

Moreover, Company A was not registered with the Registrar of Companies.

The Ministry‟s commented that they agreed to the findings and prior procurement practices in the TMA had been investigated at the initiation of the PS and the report had been forwarded to the FICAC.
Also Delegations had been changed and an employee from Ministry of Economy had been seconded to the Ministry to oversee the TMA.

The Committee noted the Ministry’s explanation and request the OAG to provide an update in the next audit report.

17.

Absence of Risk Management Policy The audit review on the Ministry‟s Corporate Governance process revealed that there was no risk management framework in place contrary to the Section 59 of the Finance Instruction.
As a result, the Ministry did not have written policies, procedures and guidelines to manage the risks associated with the following:  Fraud control and anti-corruption;  Disaster recovery and business continuity; and  Assessment of potential conflict of interest.

The Ministry‟s commented that they agreed to the findings and would review the risk management policy from the Ministry of Civil Service to see how it could be adapted.
The Committee noted the Ministry’s explanation and request the OAG to update in the next audit report.

18.

Finalisation of Financial Statements The audit of the financial statements of the Ministry of Fisheries and Forestry for the year ended 31 July 2017 was finalised after the deadline contrary to Section 69 of the Finance Instruction 2016.
The delay in the finalisation of the audit was due to the delayed submission of documents for audit purposes and the delays due to the amendments made to the financial statements.

There was also an audit adjustment of $47,677 passed on 02 February 2018 in the FMIS general ledger for Main Trust Fund Account.

The Ministry‟s agreed to the findings and was in the process of improving its document retention to allow for a better position to finalise its Financial Statement in a timely manner.
32 The Committee noted the Ministry’s explanation and request the OAG to update in the next audit report.

19.

Finance Manual not Signed by Permanent Secretary for Ministry of Forests The Ministry of Forests did not have an approved Finance Manual since 2013.

Based on audit findings, the absence of an approved Finance Manual contributed to non-compliance with internal controls and accounting process by Ministry staffs during FY 2016-2017.
The Ministry agreed to the audit findings, the new draft Finance Manual being amended after the first review by the PS Office.

It would finalise shortly once the processes and delegations had been updated as requested.

The Committee noted the Ministry’s explanation and request the OAG to update in the next audit report.

20.

Board of Survey (BoS) Report Not Submitted The Ministry on 14 July 2017, appointed a team to carry out the annual BoS for Northern, Western and Southern and Eastern Division.
However, it was noted that Ministry‟s BoS for the year ended 31 July 2017 was not completed for the four divisions above.

The Ministry‟s commented that the Board of Survey was completed late for the four divisions for the year ending 31/07/2017 – this was on going during the time of audit.

BOS Report has been completed and forwarded to the Ministry of Economy.

The Board of Survey for 2017-2018 is about to be finalised.
The Committee noted the Ministry’s explanation and request the OAG to provide an update in the next audit report.

21.

Payroll Variance between FMIS and Payroll Summary Report A variance of $1,301,404 was noted between the Wages balances for Unestablished Staff in FMIS against the Payroll Summary Report.

The Ministry agreed to the findings as way forward was to strengthen its wages and salary reconciliation inputs and edits.
A way forward to combat the anomalies on the salaries and wages section of the Ministry had provided an updated status report on weekly basis to the Human Resources Department for verification.

A checklist had been developed for checking of edits against inputs.

In addressing this issue and way forward the Ministry of Economy Salaries and Wages Section had conducted training with the Ministry of Forests Accounts staff to rectify the weaknesses.
The Committee noted the Ministry’s explanation and request the OAG to update in the next audit report.

22.

Viability of Trading & Manufacturing Account (TMA) 33 Audit review of the Ministry‟s TMA - Profit & Loss Statement revealed that the trading account operation had been operating at a loss for the last eight years.
Losses in the last 8 years Account 31/07/17 31/07/16 31/12/15 31/12/14 31/12/13 31/12/12 31/12/11 31/12/10 Income Expenses Net Loss ($) 1,141,781 1,288,573 (146,792) ($) 10,153 43,263 (33,110) ($) 15,578 59,026 (43,448) ($) 40,927 107,240 (66,313) ($) 31,517 40,125 (8,608) ($) ($) ($) (43,061) 63,492 (106,553) (27,043) 119,152 (146,195) 10,784 64,475 (53,691) The Ministry‟s commented that the Ministry had agreed to the findings that the TMA had been running at a loss for the last (8) years and the Bank reconciliation were not updated at the time of the audit.
The way forward to rectify these issues, the Ministry had seconded someone from the Ministry of Economy to run the TMA while its operation was being reviewed.

A business manager and operation manager role for the TMA had been created.

The Committee noted the Ministry’s explanation and request the OAG to update in the next audit report.

23.
23.

Trading and Manufacturing Activity Support Initiatives Audit review of the FMIS general ledger revealed that as at 31 July 2017, only $301,451 or 12 per cent had been utilised for this purpose with $2,198,459 remaining unutilised.

Furthermore, as at the date of audit, the Ministry did not maintain a work plan, status report and detailed plan for the utilisation of the balance of funds.
In addition, the TMA cash balance as at 31 July 2017 of $1,896,419 was not sufficient to support the remainder of these funds which is recorded as Deferred Income in the TMA Balance Sheet.

The Committee noted the Ministry’s explanation and request the OAG to provide an update in the next audit report.

34 Head No.
34 Head No.

33 – Ministry of Lands and Mineral Resources PART A: FINANCIAL STATEMENT 33.1 Audit Opinion The audit of the 2017 accounts of the Ministry of Lands and Mineral Resources resulted in a qualified audit opinion.

The reasons for the qualification were as follows: 1.

There was an unreconciled variance of $673,811 in Land and Property Rent collected as recorded in the Crown Land Lease System of $12,745,771 and FMIS general ledger balance of $13,419,582.
Consequently, the Auditor-General could not confirm the accuracy and completeness of Land and Property Rent of $13,419,582.

2.

Expenditure amounting to $157,174 in the Statement of Receipts and Expenditures did not relate to the financial year 2016-2017.

This amount related to the posting of an unsupported journal voucher of $105,570 to clear prior year‟s Revolving Fund Account balances and the recording of $51,304 expenditure in 2016-2017 for goods and services received in 2017-2018.
As such, the expenditure balance for the year ended 31 July 2017 was overstated by $157,174.

The Committee was informed that the Ministry has strengthened its internal processes through daily verification and reconciliation of revenue received together with Cash Analysis against the CLLS revenue records.

Concerning RFA, the Ministry had strictly adhered to the appropriate procedures in the issuance and clearance of Accountable Advance.
The Committee noted with concern that this was an ongoing issue from previous reports and would encourage the Ministry to explore all avenues practicable to allow for timely collection of arrears.

33.2 Statement of Receipts and Expenditure The Ministry collected revenue totalling $15,781,820 and incurred a total expenditure of $23,994,403 for the year ended 31 July 2017.
Revenue mainly comprised of Land and Property Rent, Fees charges, Fines and Penalties, Revenue from Surveys & Sale of Navigations, Mining Fees and Miscellaneous.
Statement of Receipts and Expenditure for 2017 Description State revenue Agency revenue Total Revenue Established staff Government wage earners Travel and communications Maintenance and operations Purchase of goods and services 31 July 2017 14,853,717 928,103 15,781,820 31 July 2016 8,081,875 910,791 8,992,666 4,938,536 601,682 373,944 4,199,700 428,920 8,525,583 792,564 863,762 5,711,341 779,418 35 Description Operating grants and transfers Special expenditures Total Operating Expenditure 31 July 2017 31,422 792,412 17,496,502 31 July 2016 21,069 194,931 10,758,782 Capital construction Capital purchases Capital grants and transfers Total Capital Expenditure 4,347,581 580,754 498,401 5,426,736 2,683,696 811,072 127,111 3,621,879 Value added tax 1,071,165 1,025,328 Total Expenditure 23,994,403 15,405,989 33.3 Appropriation Statement The Ministry incurred expenditure totalling $23.99 million in 2016-2017 against a revised budget of $31.05 million, resulting in a saving of $7.06 million or 23 per cent.
Significant savings were in the following areas: 1.

NLTB Payments (SEG 4) $893,807; 2.

Development of State Land (SEG 8) $1,709,642; 3.

Upgrade of Geodetic Datum (SEG 8) $1,029,801; 4.

Land Bank Investment (SEG 10) $2,241,576; and 5.

Value Added Tax (SEG 13) by $458,835.


The savings were due to the following:  SEG 10 Capital Grants and Transfers - savings in the Land Bank Investment budget due to the amendments to lot sizes to increase the lot numbers for both Vunimasei and Yako residential subdivision projects.

The amendments meant that the Ministry had to go through the tender process and approvals again and this delayed the development works that was budgeted.
 SEG 8 Capital Construction - savings in Development of State Land allocation due to the unfavourable weather conditions which impeded the execution of the development work.

 SEG 4 Maintenance and Operations –savings in budget for rent for land leased to the State which depended on the renewal of these leases before payment is made to iTLTB and the number of Schedule A and B land reverted to iTLTB.
Appropriation Statement for 2017 SEG Item 1 2 3 4 Established staff Government wage earners Travel & communication Maintenance & operations Budget Estimate Changes Revised Estimate Actual Expenditure 8,883,506 859,517 707,200 6,870,550 (127,259) (15,000) 210,092 (139,933) 8,756,247 844,517 917,292 863,762 8,525,583 792,564 6,730,617 5,711,341 Lapsed Appropriation 230,664 51,953 53,530 1,019,276 36 SEG Item Budget Estimate Changes Revised Estimate Actual Expenditure Purchase of goods & services Operating grant & transfers Special expenditure Total Operating Expenditure Capital construction Capital purchases Capital Grants and Transfer Total Capital Expenditure 825,000 32,100 820,165 18,998,038 7,147,000 630,000 2,740,000 10,517,000 22,000 --- --- 847,000 32,100 820,165 (50,100) 18,947,938 50,100 630,000 2,740,000 50,100 10,567,100 --- --- 779,418 31,422 792,412 17,496,502 7,197,100 580,754 498,401 5,426,736 Lapsed Appropriation 67,582 678 27,753 1,451,436 2,849,519 49,246 2,241,599 5,140,364 Value added tax Total Expenditure 1,530,000 31,045,038 1,530,000 --- --- 31,045,038 1,071,165 23,994,403 458,835 7,050,635 PART B: ASSESSMENT OF FINANCIAL GOVERNANCE The assessment of the internal controls of the Ministry was outlined below: Control Environment Ineffective Risk Assessment Control Activities Generally effective Ineffective Information and Communication Control Generally effective Monitoring Activities Effective The audit also noted ineffectiveness in the timeliness of draft financial statements, timeliness of management comments and timeliness of signed financial statements received.
PART C: OTHER SIGNIFICANT MATTERS 1.

Variance between Crown Land Lease System & FMIS General Ledger The total state revenue collected by the Ministry for the year 31 July 2017 was $14,853, 717.

Out of these $13,419,582 or 90 per cent was for land and property rent.

Audit noted a variance of $673,811 between the Land and Property Rent Revenue collected in Crown Land Lease System and the FMIS general ledger balance as at 31 July 2017.
The variance was due to expired leases in CLLS for which posting of revenue could not be done.

In addition, land rentals collected by Fiji Sugar Corporation on behalf of the Ministry were not submitted to the Ministry with detailed listings of the lessees.

Consequently, CLLS was not updated.

The Committee was informed that the Ministry had strengthened its internal processes through daily verification and reconciliation of revenue received together with Cash Analysis against the CLLS revenue records.
The variance was due to: 1.

The expired leases not updated to the CLLS for those agencies that make one off payments for large listings of lessees such as FSC, Post Fiji and Housing Authority.

Payment was received in bulk from FSC but upon updating this payment to the individual account (oracle system) it shows that their lease has been expired; and 2.

The inconsistency in the timeframe for processing the renewal of leases.
The Ministry‟s mitigation actions were as follows: 37  Activate expired leases accounts in CLLS for the purpose of receipting and deactivate them at the end of the process.

 Review of SOPs to ensure consistent and timely renewal of leases.

The Committee noted the Ministry’s explanation and request the OAG to provide an update in the next audit report.

2.
2.

Clearing of Prior Year’s Revolving Fund Account Balance to Expenditure Account Audit review of the Revolving Fund Account revealed that the Ministry had raised Journal Voucher (JV) 231051 totalling $105,870 to clear the outstanding balances in the Revolving Fund Account which were brought forward from 2012.

It was noted that the journal voucher was not supported with relevant supporting documents to substantiate the adjustment.
The clearance of prior year‟s balance to current year expenditure allocation had resulted in the total expenditure being overstated by $105,870 for the financial year ending 31 July 2017.

The Ministry‟s comments states that the management duly acknowledge to the recommendation made.

The Ministry is duly adhering to the timeframe of clearing advance as stipulated in the Financial Instruction 2010.

This is a one-time clearance for the previous year‟s balances.
The Committee noted the Ministry’s explanation and request the OAG to provide an update in the next audit report.

3.

Committing Current Year Budgetary Allocation for Subsequent Years Expenditure The Department of Mineral Resources had prepared cheques totalling $51,304 for which the goods, service or work had not been received/provided as at 31 July 2017.

The audit noted that this was done to commit current year budgetary allocations.
The commitment of funds for subsequent years expenditure had resulted in the total expenditure being overstated by $51,304 for the financial year ending 31 July 2017.

The Ministry had ensured that all expenditure incurred was cleared within the same financial year.

All payments were facilitated through Electronic Fund Transfer.

This is monitored through reconciliation.


The Committee concurred with the Auditor-General‟s recommendation to ensure that;  Funds were not committed unnecessarily and comply with Closing of Accounts Circular No.

04/2017; and  There was adequate documentation that the goods, services or works have been received prior to approving any payment.

4.

Significant Arrears of Revenue The audit noted that the Ministry had substantial arrears of revenue amounting to $21.8 million as at 31 July 2017.
Over the past five years, arrears of revenue have remained above $20 million.

38 It was noted that 18 per cent of the debtors totalling $3.9 million were more than 5 years old.

In addition, the review of the arrears of revenue report prepared by the Ministry revealed that the Ministry did not include arrears of revenue for expired leases totalling $13.5 million.

As such, the arrears of revenue report is understated by $13.5 million as at 31 July 2017.
The Committee was informed that the Ministry had undertaken the following strategies to resolve the issue: Issuance of notices and flyer on rental;  Waiver of interest incentive;  Site visits to lessees and conducting awareness on rental payments;   Accepting undertaking with lessees to clear rental arrears within a respective period;  Media publicity;  Options on mode of payments to lessees; and  Draft debt and revenue management policy formulated The committee was further informed that the team had been successful as they were enforcing the above mentioned strategies and this had resulted in an increase in rental collection.
The Committee noted with appreciation the actions taken by the Ministry in the collection of outstanding revenue and recommends that the OAG provide an update in its next audit report.

5.

Rent of $0.10 charged on Active Leases According to clause 10 the Crown Land Act 1978 part 2, Leases.

Leases shall be subject to reassessment of the rent at each 10th year of the term of the lease.

Audit review of the CLLS revealed that the Ministry was charging rent on active leases for as low as 10 cents.
The audit noted that this was due to the absence of reassessment clause in the lease agreement and reassessment not carried out as required in the Crown Land Act.

Leases without Re-Assessment on Active Leases Account No.

Lease No.
File Reference 10618 10625 12507 12541 24873 25635 25644 26190 20214 000020 001924 039149 AN12541 003163 003469 01850 090173 120413 4/16/3917 4/16/2614 4/16/2033 4/16/3882 4/07/983 4/10/1027 4/10/1431 4/10/2260 4/10/1886 Lease Start Date 27/3/20 01/01/49 01/01/47 01/01/56 07/01/57 04/01/61 01/01/75 01/01/62 01/01/69 Last Valuation Date 27/03/70 01/01/74 01/01/72 01/01/81 01/07/82 01/07/79 01/01/85 01/01/62 01/01/69 Lapse in Reassessment 47 years 43 years 45 years 36 years 35 years 38 years 32 years 55 years 48 years Response from Chief Value No assessment clause in the lease agreement Rent Amount ($) 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 1.00 39 The Committee was informed that the leases did not have a re-assessment clause hence the $0.10 will continue till expiry.
The Ministry could only wait for the lease to expire and renewed leases to include reassessment clause.

The Committee noted the Ministry’s explanation and request the OAG to provide an update in the next audit report.

6.
Trust Fund Account Anomalies Audit review of Trust Fund Accounts (TFA) revealed the following anomalies:  the Ministry did not maintain a TFA cashbook and an updated TFA ledger for Lands Department as required by section 15.2.1 of the Ministry‟s Finance Manual 2013;  breakdown of payments recorded in the Land Trust Fund account statement were not provided as   at date of audit; the Ministry did not maintain a detailed listing of the beneficiaries of the TFA; and from the samples tested, audit noted that the Department of Lands has not paid out Value Added Tax (VAT) collected from land lessees.
The VAT portion were kept in the Trust Fund Account.

 Variance of $7,069 was noted between the Mineral Resources Department Cashbook Reconciliation balance of $4,379,239 and the FMIS general ledger balance of $4,386,308.

 Stale cheques were appearing the Mineral Resources Department‟s unpresented cheque listing as at 31 July 2017.

The Ministry‟s commented that they had improved and update the Trust Fund Account for that current financial year.

The Ministry was currently practicing as recommended.
The Ministry had also worked on the list of stale cheques before the end of every six month.

The Committee noted the Ministry’s explanation and request the OAG to provide an update in the next audit report.

7.

Anomalies in Operating Trust Fund Account The audit noted dormant accounts totalling $17,425 were still reflected in the Department of Lands Operating Trust Fund Account since 2013 and were yet to be cleared as at 31 July 2017.
The Committee was informed that the Ministry had carried out relevant verifications and had formalised request to the Ministry of Economy to transfer all carry forward balances as revenue to government.

The Committee noted the Ministry’s explanation and request the OAG to provide an update in the next audit report.

8.
8.

Anomalies in the Drawings Account Audit review of Drawings Account revealed the following anomalies:  The Department of Lands unpresented cheque list included stale Cheques/EFT‟s amounting to $451,782.

40  There were differences between the unpresented cheque listing when compared to the FMIS general ledger and the board of survey report for the Department of Lands.

 The Department of Mineral Resources did not carry out a board of survey for the unpresented cheques as at 31 July 2017.
The Ministry‟s commented recommendations made by the OAG.

that the Management duly acknowledged the audit issues and The Committee notes the Ministry’s explanation and request the OAG to update in the next audit report.

9.

VAT Returns not lodged From the review of the Ministry‟s Statement of VAT Account, audit noted that the Ministry did not lodge VAT returns for the 2016/2017 financial year.
The last VAT return prepared was for the month of June 2016 and lodged to Fiji Revenue and Custom Services (FRCS) on 8 September 2016.

The Committee was informed that the issue on VAT has been sorted out and the Ministry is paying VAT on revenue to FRCS.

The Committee noted the Ministry’s explanation and request the OAG to provide an update in the next audit report.

10.
10.

Expenditures Charged to Wrong Allocation Audit noted that the review of the payments vouchers noted that the Ministry charged expenditures to the wrong allocations during the year.

The above findings indicate that the Ministry did not regularise the mispostings during the closing of accounts process which had resulted in Travel and Communication expenditure being understated by $25,416 for the year ended 31 July 2017.
The Committee was informed that the Ministry had ensured that all relevant expenditures were charged from the relevant budgetary allocations.

In cases where relevant funds were not available proper processes such as virements and period cash flows were pursued to meet the cost.

The Committee noted the Ministry’s explanation and request the OAG to provide an update in the next audit report.

11.
11.

Absence of Risk Management Policy Audit noted that the review of the Ministry‟s Corporate Governance revealed that there was no risk management framework in place.
As a result, the Ministry did not have written policies, procedures and guidelines to manage the risks associated with the following: • • • Fraud control and anti-corruption; Disaster recovery and business continuity; and Assessment of potential conflict of interest 41 The audit finding also indicated that currently the Ministry did not have an established governance and accountability function to drive the risks management framework.
The Committee was informed that the Ministry is currently drafting the Policy and should be finalised by the year 2020.

The Committee noted the Ministry’s explanation and request the OAG to provide an update in the next audit report.

12.

Finalisation of Financial Statements The audit of the financial statements of the Ministry of Lands and Mineral Resources for the year ended 31 July 2017 was finalised after the above deadline.
The delay in the finalisation of the audit was due to the following:  delay in submission of management comments to the draft management letter;  amendments made to the financial statements; and  time taken by the Ministry to sign and return the audited financial statements and Management Representation Letter for issue of the audit report.

The Ministry commented that they acknowledged the audit findings and will ensure that this was not repeated in future.

42 Head No.
42 Head No.

34 – Ministry of Industry, Trade and Tourism PART A: FINANCIAL STATEMENT 34.1 Audit Opinion The audit of the 2017 accounts of the Ministry of Industry, Trade and Tourism resulted in the issuance of an unqualified audit opinion.

34.2 Statement of Receipts and Expenditure The Ministry of Industry, Trade and Tourism collected state revenue totalling $592,824 and incurred a total expenditure $71,572,115 for the year ended 31 July 2017.
Statement of Receipts and Expenditure for 2017 DESCRIPTION 31 July 2017 31 July 2016 State Revenue TOTAL REVENUE Established staff Government wage earners Travel and communications Maintenance & operations Purchase of goods and services Operating grants and transfers Special expenditures Total Operating Expenditure Capital Construction Capital Purchases Capital Grants and Transfers Total Capital Expenditure ($) 592,824 592,824 2,991,913 378,719 343,636 899,072 261,026 18,985,482 10,800,463 34,660,311 30,710 1,445,565 35,006,707 36,482,982 ($) 727,479 727,479 1,700,033 221,837 212,157 402,602 193,551 6,569,031 3,302,537 12,601,748 --- --- 21,422,280 21,422,280 Value Added Tax 428,822 347,750 TOTAL EXPENDITURE 71,572,115 34,371,778 The Committee was informed of the following list of entities that were given the Capital Grant and the monitoring process of the grant: (i) Tourism Fiji – Marketing Grant  Monitoring was done through quarterly assessments of marketing and financial reports against Key Performance Indicators detailed in the Service Agreement.
KPIs specify targets and key deliverables for the financial year.

Monitoring was undertaken on a quarterly basis through performance assessment against the KPIs.

In addition, Tourism Fiji had a Board of Directors who regularly monitors performance and utilisation of funds.

43 (ii) Micro and Small Business Grant  The Micro and Small Business Grant was another project that was fund through Capital Grant.

The project received a total of $6.4 million for the 2016-2017 financial year.
The assistance provided through the MSBG had been far reaching to the smallest of businesses that had been recognised to have the capability to make a difference, not only in their lives but that of their communities and the Fijian economy as a whole.

The Ministry through its Monitoring and Evaluation Unit monitors all its projects to gauge the utilisation of the funds provided through capital grant.

MSBG pre-approval desktop and field assessment and validation were undertaken.
Post-disbursement field monitoring was undertaken within 6 months of the disbursement of funds.

This was followed by regular annual monitoring and assessment of projects.

Therefore, the performance of successful recipients was monitored through a first inception in 6 months after disbursements of funds, followed by regular monitoring on an annual basis.

(iii) Northern Development Programme  The Northern Development Programme was the third project that was provided Capital Grant.
This programme attempts to promote Vanua Levu‟s economic growth, trade and competitiveness in the local and global economy and increase household incomes and reduce poverty.

The programme has a Monitoring Team stationed in Labasa.

Every funded project was visited as soon as funds were disbursed.

Monitoring was on-going from then on to ensure proper utilisation of funds and sound business performance.

Data on employment, livelihood and on asset base was also captured through the monitoring exercise.
The Committee was informed on the expenditure of $30,710 that was spent on Lami Co-operative Office.

 The Lami Co-operative Office was the Co-operative Training Centre provisionally registered as Co- operative College of Fiji under Fiji Higher Education Commission.

Co-operative members need guidance in business and financial management.

The trainings offered by the CCF provide members with knowledge to successfully and sustainably operate their co-operative businesses and make informed decisions.
The trainings provided by CCF include: Financial Literacy, Start Improve Your Business, Co-operative Management, Basic Book Keeping, Bee Keeping and Leadership.

The sum of $30,710 was spent on upgrading works which were the basic infrastructure improvements required for the FHEC registration process.

The Committee was further informed the details of the Northern Development Programme.
 The Northern Development Programme was to promote Vanua Levu‟s economic growth, trade and competitiveness in the local and global economy and increase household incomes and reduce poverty.

The Programme provided holistic and systematic development of MSMEs through business and technical skills training, business mentoring and grant equity financing.

The programme provided equity assistance to MSMEs through grants to cover a portion of the total project cost.
The balance of the project cost was provided by commercial banks.

Proposals were made by applicants using a standard application form together with business plans and supporting documents.
44 NDP Equity Grant Distribution for FY 2016/2017 Disbursement $ 316,915.49 $ 316,125.79 $ 633,041.28 Recipients 0 49 41 0 90 Quarter 1 2 3 4 Sector Fishing Dalo & Yaqona Sugar Cane Farming Livetsock Farming Timber Farming Goat Farming Vegetable Farming Bee Keeping Integrated Farming Sheep & Cattle Dairy/Retail Business Sheep Farm Beef Farming Tailoring & Screen Printing Cattle Restaurant Canteen Total Total Value NDP Grant Distribution According to Sector for FY 2016/2017 Value Other Lender $157,743.16 $36,855.11 $44,026.05 $12,500 $2,500 $145,155.04 $31,686.61 $12,500 $42,347.54 $71,638.27 $10,000 Value Other Lender $160,173.18 $38,015.70 $52,064.99 $28,880 $2,025 $199,395.79 $50,072.86 $18,503 $41,860 $189,664.87 $5,000 Total Per Sector 23 4 5 2 1 24 4 2 3 10 1 $317,916.34 $74,870.81 $96,091.04 $41,380 $4,525 $344,550.83 $81,759.47 $31,003 $84,207.54 $261,303.14 $15,000 4 2 1 2 1 1 90 $15,660 $16,593 $2,298 $19,038.50 $10,000 $2,500 $633,041.28 $12,459.07 $11,930.81 $1,000 $41,962.73 $5,000 $2,693 $860,701 $28,119.07 $28,523.81 $3,298.00 $61,001.23 $15,000 $5,193 $1,493,742.28  Monitoring - the Programme had a monitoring team stationed in Labasa.
Every funded project was visited as soon as funds were disbursed.

Monitoring was ongoing from then on to ensure proper utilisation of funds and sound business performance.

Data on employment, livelihood and on asset base was also captured through the monitoring exercise.

34.3 Appropriation Statement The Ministry incurred expenditure totalling $71.6 million in 2017 against a revised budget of $77.0 million resulting in savings of $5.4 million or 7 per cent.
The savings was mainly attributed to operating expenditure.
Appropriation Statement for 2017 SE G 1 Item Budget Estimate Changes Revised Estimate Actual Expenditure Lapsed Appropriation Established staff 3,748,592 (88,410) 3,660,182 2,991,913 668,269 45 SE G Revised Estimate Actual Expenditure Lapsed Appropriation Item Government wage earners Travel & communication Maintenance & operations Purchase of goods & services Operating grant & transfers Special expenditure Total Operating Expenditure Capital construction Capital purchases Capital Grants and Transfer Total Capital Expenditure Budget Estimate 365,575 451,300 1,000,300 342,500 17,670,176 13,943,729 37,522,172 Changes 88,410 3,159 195,239 (11,980) 1,335,542 (1,552,670) (30,710) 453,985 454,459 1,195,539 330,520 19,005,718 12,391,059 37,491,462 --- 2,700,000 35,545,088 38,245,088 30,710 --- --- 30,710 30,710 2,700,000 35,545,088 38,275,798 378,719 343,636 899,072 261,026 18,985,482 10,800,463 34,660,311 30,710 1,445,565 35,006,707 36,482,982 75,266 110,823 296,467 69,494 20,236 1,590,596 2,831,151 --- 1,254,435 538,381 1,792,816 1,236,500 77,003,760 Value added tax Total Expenditure 807,678 5,431,645 The Committee was informed that one key factor that led to a number vacant position was the high demand for similar skills by other agencies, which led to the Ministry not being able to secure the right skills and expertise.
In addition, it was difficult to secure personnel for highly technical positions.

Another reason for the savings, were the realignment and streamlining of positions.

428,822 71,572,115 1,236,500 77,003,760 --- --- The Committee was further informed that the Ministry incorporated a flatter structure which led to more efficient channel of communication, resulting in better utilisation of resources.
The Ministry continued its work and smooth operations, the Heads of Departments took on additional responsibilities and staff were multi-tasking and taking on additional responsibilities.

Audit noted that the Ministry did not utilise all funds for the Office of the Trade Commissioner - Papua New Guinea as the office was in the process of being set-up resulting in savings in the special expenditure allocation.
The reduction in price of laboratory equipment purchased compared to the quoted price contributed to savings for capital purchases.

The Committee was informed that the Honourable Prime Minister had announcement the establishment of the Fijian Trade Commission to Papua New Guinea during his inaugural Trade and Investment Mission to PNG in April 2013.
Consequently, the Fijian Trade Commissioner to PNG was appointed on 4 November 2016 to facilitate and capitalize on the vast opportunities present between in Fiji and PNG in terms of trade, investment, tourism, labour mobility and many more.

The Fijian Trade Commission to PNG formally commenced its operations in Port Morseby in July 2017.
The role of the Trade Commission was to not only to promote trade and investment opportunities between Fiji and PNG but also to Vanuatu, Solomon Islands, New Caledonia and Timor Leste, in order to maximise the Trade Commission‟s presence in the Region.

The function of the Trade Commission was to also provide assistance to its stakeholders and ensures the effective promotion of Fijian made products and services in PNG.
Fiji experienced trade tensions with PNG in relation to PNG‟s Beef-Ox-Palm, Trukai Rice and biscuits in 2017.

PNG during that time had threatened a ban for some Fijian imports in retaliation against Fiji.

The Trade Commission had provided support and intervened to resolve the issues through fostering communication between the competent authorities of Fiji and PNG.
46 34.4 IHRDP Trust Fund Account - Statement of Receipts and Payments The Integrated Human Resource Development Programme Trust Fund Account recorded a balance of $146,687 for the financial period ending 31 July 2017.

Receipts totalling $61,927 were recorded compared to expenses totalling $39 resulting in the surplus of $84,799.

The Committee raised concerns in terms of the Ministry receiving $61,927 from community however; no payments were made in 2017.
The Committee was informed that IHRDP became part of the Ministry in the 2016/2017 financial year.

The Trust Fund lacked policy framework which the Ministry established.

Until the Trust Fund Policy and Standard Operating Procedures were vetted and signed on 5 March 2018, no payments were done.

Thus was important to ensure accountability and transparency.

The funds received by the Ministry were properly accounted for and kept as the savings of the respective community.
PART B: ASSESSMENT OF FINANCIAL GOVERNANCE The Committee noted that the OAG assessment of the Ministry‟s internal control environment, timely submission of draft financial statements, quality of financial statements submitted for audit and the signing of the financial statements had been rated to be very effective in general.

The Committee noted with appreciation the efforts put in by the Ministry staff and its resources in allowing the OAG to effectively carry out its audit in a timely manner.
47 Head No.

35 – Ministry of Sugar Industry PART A: FINANCIAL STATEMENT 35.1 Audit Opinion The audit of the 2017 accounts of the Ministry of Sugar Industry resulted in the issuance of an unqualified audit opinion.

35.2 Statement of Receipts and Expenditure The Ministry of Sugar Industry collected revenue totalling $16,123 and incurred a total expenditure of $27,290,454 for the year ended 31 July 2017.
The Committee was informed that the Government in 2012 introduced Cane Access Road Program to revive the sugar industry and provide grant assistance to the cane farmers to upgrade/rehabilitate the cane access roads to efficiently transport canes to mills for processing and ensure consistent supply of cane to the mills to minimise mill stoppages.
Initially, the Ministry of Sugar Industry was handling facilitation of this program which was transferred to FSC since 2016/2017financial year in view the magnitude of resources required for efficiently manage and achieve the desired outcome.

A Can Access Road Task Force team compromising of Ministry of Sugar Industry, Sugar cane Growers Council and FSC representatives was setup to implement the new change.
The scope of work involved grading and gravelling of CARs, culvert works and installation of small to medium sized crossings covering mill areas in Penang, Rarawai, Lautoka and Labasa.

These roads were vital components of the cane supply chain, being the primary means by which harvested cane was supplied to the mils to ensure that mill stoppages were minimised and that cane farmers were able to earn revenue through the successful delivery of their cane.
FSC through the tender process chooses the suppliers of CAR works in each sector and the road committee which was made of growers from the area signs off on the form stated that works carried out were satisfactory.

Cane Access Roads grant was used to do temporary repairs to cane access roads.

There was insufficient funding to construct permanent roads or hire expertise to determine road worthiness for the transport of cane.
Road Committees based on past experiences determine that the quality of road was worthy enough to last for the crushing season.
Statement of Receipts and Expenditure for 2017 Description RECEIPTS Agency Revenue Miscellaneous TOTAL RECEIPTS EXPENDITURE Operating Expenditure Established Staff Government Wage Earners Travel & Communications Maintenance & Operations 31 July 2017 31 July 2016 16,123 --- 16,123 344,614 57,838 116,745 107,499 48 --- --- --- 166,318 22,857 37,701 51,085 Description Purchase of Goods & Services Operating Grants & Transfers Special Expenditures Total Operating Expenditure Capital Expenditure Capital Construction Capital Grants & Transfers Total Capital Expenditure Value Added Tax TOTAL EXPENDITURE 31 July 2017 31 July 2016 33,880 2,014,947 146,625 2,822,148 269,419 24,131,525 24,400,944 67,362 27,290,454 13,131 2,009,347 221,305 2,521,744 2,745,866 14,322,100 17,067,966 252,194 19,841,904 35.3 Appropriation Statement The Ministry of Sugar incurred expenditures totalling $27,290,454 in 2017 against a revised budget of $27,510,345 resulting in savings of $219,891 or 1 per cent.
Appropriation Statement for 2017 SEG Item Established staff Government wage earners Travel & communication Maintenance & operations Purchase of goods & services Operating grant & transfers Special expenditure Total Operating Expenditure Capital construction Capital purchases Capital Grants and Transfer Total Capital Expenditure Budget Estimate Changes 502,567 68,731 88,000 99,000 23,000 2,014,947 645,000 3,441,245 (60,665) 9,468 44,124 30,584 16,001 --- (490,512) (451,000) Revised Estimate 441,902 78,199 132,124 129,584 39,001 2,014,947 154,488 2,990,245 Actual Expenditure 344,614 57,838 116,745 107,499 33,880 2,014,947 146,625 2,822,148 Lapsed Appropriation 97,288 20,361 15,379 22,085 5,121 --- 7,863 168,097 3,000,000 --- 20,722,100 23,722,100 (2,723,325) --- 276,675 --- 3,419,424 24,141,524 696,099 24,418,199 269,419 --- 24,131,525 24,400,944 Value added tax Total Expenditure 347,000 27,510,345 (245,099) 101,901 --- 27,510,345 67,362 27,290,454 7,256 --- 9,999 17,255 34,539 219,891 PART B: ASSESSMENT OF FINANCIAL GOVERNANCE The Committee noted that the OAG assessment of the Ministry‟s internal control environment, timely submission of draft financial statements, quality of financial statements submitted for audit and the signing of the financial statements had been rated to be effective in general.
PART C: OTHER SIGNIFICANT MATTERS 1.

Breaches of Internal Controls for Payment of Goods According to the Ministry of Sugar Finance Manual Part 2, the Accounts Officer must not certify a payment as correct unless viz a viz it is in accordance with an LPO details.
49 Audit noted that the Ministry paid a sum of $3,711.90 on cheque number 2693 dated 06/09/16 in the name of an employee of the Ministry for the purchase of basic utilities from a supplier for use by inmates engaged in cane cutting program at the Rakiraki Sector.

There was no LPO raised, no invoice received and the cheque was not paid out to the supplier but instead paid to the staff of the Ministry.
The Committee was informed that the employee was no longer employed by the Ministry and her case had been referred to FICAC for investigation.

The Committee was further informed that Internal Control Policy was being drafted and the reason for the delay was due to the absence of a referral policy to work from and therefore Ministry of Sugar Industry had to create its own policy.

The final draft will be forwarded to Ministry of Economy for vetting by December 2019.
The Committee noted the various comments and recommends that a further updates to be prepared by the OAG in its next audit report.

2.

Absence of Risk Management Policy According to section 59 of Finance Instruction 2010 each agency must have in place a cost effective system of internal controls which safeguards money and property against loss, avoids or detects accounting errors and avoids unfavourable audit reports.
The audit review of the Ministry‟s Corporate Governance revealed that there was no risk management framework in place.
As a result, the Ministry did not have written policies, procedures and guidelines to manage the risks associated with the following:  Fraud control and anti-corruption;  Disaster recovery and business continuity; and  Assessment of potential conflict of interest The Committee was informed that at the time of formulating this report the Ministry had created a risk management policy which provided guidance to the management of risk.

This had been vetted by the Ministry of Economy Policy Division.
The Committee was further informed that once the policy was in place, training will be provided to staffs across the Ministry to ensure they were aware of the policy and were able to identify and report on any suspicious activity.

Also, the Ministry of Economy‟s Internal Audit Division had been encouraged to conduct regular auditing of the Ministry for greater accountability and transparency.
The Committee noted with appreciation the efforts put in by the Ministry‟s staff and its resources in allowing the OAG to effectively carry out its audit in a timely manner.

50 Head No.

36 – Ministry of Public Enterprise and Government Printing PART A: FINANCIAL STATEMENT 36.1 Audit Opinion The audit of the 2017 accounts of the Ministry of Public Enterprise was resulted in the issuance of an unqualified audit opinion.
36.2 Statement of Receipts and Expenditure The Ministry collected agency revenue totalling $83,909 and incurred a total expenditure of $3.4 million for the year ended 31 July 2017.
Statement of Receipts and Expenditure for 2017 Description Agency revenue Total Revenue 31 July 2017 83,909 83,909 31 July 2016 53,892 53,892 Established staff Government wage earners Travel and communications Maintenance & operations Purchase of goods and services Operating grants and transfers Special expenditures Total Operating Expenditure Capital Purchase Capital grants and transfers Total Capital Expenditure Value Added Tax 1,981,073 348,579 61,003 420,154 32,786 --- 475,844 3,319,439 46,700 --- 46,700 83,837 1,169,718 180,792 45,076 250,950 34,821 4,620,000 41,225 6,342,582 --- 3,958,334 3,958,334 38,899 Total Expenditure 3,449,976 10,339,815 Revenue mainly comprised of sale of publications by the Government Printing Department.
There was no operating and capital grants in 2017 compared to 2016 where grants were allocated to the Biosecurity Authority of Fiji.

This had resulted in the significant decline in total expenditure in 2017.

Special expenditures increased by $434,619 in 2017 compared to 2016 due to office refurbishment works carried out in 2017.
36.3 Appropriation Statement The Ministry incurred expenditure totalling $3.4 million in 2017 against a revised budget of $13.9 million, resulting in a saving of $10.5 million or 75 per cent.

The large savings was due to the non- payment of operating and capital grants to the Biosecurity Authority of Fiji and vacant positions not filled in the Government Printing Department in 2017.
51 The Biosecurity Authority of Fiji did not submit any request for operating and capital grants totalling $9.05 million as it had sufficient funds which were held unutilized from previous years.

In addition, the Authority reimbursed the Government a total unutilized grant of $11.8 million on 7 June 2017.
SEG Item Appropriation Statement for 2017 Budget Estimate Changes Revised Estimate Established staff Government wage earners Travel & communication Maintenance & operations Purchase of goods & services Operating grant & transfers Special expenditure Total Operating Expenditure Capital purchases Capital Grants and Transfer Total Capital Expenditure Value added tax Total Expenditure 3,085,745 404,249 100,300 606,000 84,500 6,055,046 475,000 10,810,840 46,700 3,000,000 3,046,700 118,200 13,975,740 (76,000) --- --- 30,000 --- --- 46,000 --- --- --- --- --- --- PART B: ASSESSMENT OF FINANCIAL GOVERNANCE Actual Expenditure 1,981,073 348,579 61,003 420,154 32,786 --- 475,844 3,319,439 Lapsed Appropriation 1,028,672 55,670 39,297 215,846 51,714 6,055,046 45,156 7,491,401 46,700 --- 46,700 --- 3,000,000 3,000,000 3,009,745 404,249 100,300 636,000 84,500 6,055,046 521,000 10,810,840 46,700 3,000,000 3,046,700 118,200 13,975,740 83,837 3,449,976 34,363 10,525,764 The Committee noted that the OAG assessment of the Ministry‟s internal control environment, timely submission of draft financial statements, quality of financial statements submitted for audit and the signing of the financial statements had been rated to be very effective in general.
PART C: OTHER SIGNIFICANT MATTERS 1.

Significant Arrears of Revenue – TMA Accounts Receivable As at 31 July 2017, the Government Printing Departments TMA balances on accounts receivables amounted to $922,866.

Audit noted a variance of $680,598 between the Arrears of Revenue Return prepared by the Government Printing Department and the general ledger records.
The Government Printing Department explained that the variance was due to the inclusion of normal printing charges, component of overtime payment, and gazette subscriptions in the General Ledger.

When receipting was done, the total invoice amount inclusive of overtime payment and subscription was initially receipted into Fund 4.

However, overtime payments and subscriptions had to be accounted for in Fund 1.
The subsequent raising of cheque from Fund 4 to transfer amount into Fund 1 were not reflected in the aged arrears listing, hence the large variance between the General Ledger balance and the Arrears of Revenue listing.

Moreover, the Government Printing Services Department (GPSD) underwent numerous changes in its Head Number.

(ORG No.)
(ORG No.)

Since 2014, due to these changes, the Department could not access the old 52 Head Number in the GL, thus the difficulty in obtaining the report to provide evidence to the variances.

The Department normally consulted with Ministry of Economy on issues that were beyond their jurisdiction.

The GPSD had been liaising with the FMIS Section of Ministry of Economy to identify variances between the Aging report and the General Ledger.
The Committee noted with appreciation the efforts put in by the Ministry staff and its resources in allowing the OAG to effectively carry out its audit in a timely manner.

The Committee further recommends that an update be provided by OAG in its next audit report.

53 Head No.
53 Head No.

37 – Ministry of Local Government, Town Country Planning and Environment PART A: FINANCIAL STATEMENT 37.1 Audit Opinion The audit of the 2017 accounts of the Ministry of Local Government, Town Country Planning and Environment resulted in a qualified audit opinion.

The reasons for the qualifications were as follows: 1.
Revenue totalling $444,780 reported in the Statement of Revenue and Expenditure could not be substantiated as the Ministry could not provide the journal vouchers to support adjustments recorded in the general ledger.

As such, the audit was unable to verify the completeness and accuracy of revenue recorded in the Statement of Revenue and Expenditure.

2.
2.

The Ministry was unable to provide appropriate supporting documents included payment vouchers to substantiate payments totalling $874,931 and $1,171,987 for Operating Account and Main Trust Account, respectively.

As such, the audit was unable to satisfy if these payments were properly processed and recorded in the Statement of Revenue and Expenditure and Environment Trust Fund Account.

3.
3.

Expenditure totalling $302,733 related to Operating Grants and Transfers were recorded as Capital Construction expenditure in the Statement of Revenue and Expenditure.

As such, the Operating Grants and Transfers Expenditure was understated and Capital Construction Expenditure is overstated in the Statement of Revenue and Expenditure by $302,733.

4.

The Environment Trust Fund account had a closing balance of $4,530,939 for year ended 31 July 2017.
The Ministry did not maintain proper records including cash book, journal vouchers and payment vouchers.

As a result, there was unreconciled variance of $2,500,755 between the general ledger balance and the bank reconciliation.

Due to the variance, the audit was unable to ascertain the accuracy of the closing balance of the Environment Trust Fund Account.
Attention was also drawn to the state of internal controls of the Ministry where necessary controls such as timely reconciliations were not performed for Drawings Account, Accounts Payable, Operating Trust Fund, Environment Trust Fund Account, Advances, Salaries and Wages Account during the year.

These are critical areas of the Ministry‟s operation and if not addressed promptly may result in financial losses or financial irregularities in the near future.
The Committee was informed that the Ministry had maintained the journal vouchers to support adjustments recorded in the general ledger.

During the 2017 Internal Audit of the Ministry the original records were taken up by the Internal Auditors of Ministry of Economy for auditing and were later returned to the Ministry on 20/8/2018.

This was after the 2017 Agency Financial Statement of the Ministry was endorsed by Auditor-General.
On 21st August 2018, the Ministry had written a letter to the Auditor-General to review the accounting records which could eliminate some of the audit queries raised on the missing accounting records for journal vouchers.

Currently the Ministry has recruited 1 out 4 of Accounts Personnel in Accounts Section to increase the staffing capacity to effectively and efficiently provide the financial support services to avoid such anomalies in future.
The Ministry had also implemented in house Capacity Building Training, Coaching and Mentoring programs to educate 54 staffs on procedures and processes pertaining to accounting records.

Ministry of Local Government had already upgraded the Head of the Finance team from Senior to Manager Level during 2018-19 budget.

The posting of misallocation of expenditure occurred as result of the input of data by the Temporary Relieving Clerical Officer during the vouchering process to facilitate the payment.
The Ministry agreed that payment related to the Naboro Landfill Subsidy was captured under Naboro Landfill Stage 2 Construction.

The Ministry acknowledged that there was a misposting in the journal.

The Ministry had now finalized the recruitment and on boarding of the Accountant position that commenced on the 26th of August, 2019.

The Assistant Account Officer would commence from the 11th September, 2019.
The addition of the two new personnel would ensure that the finance team would provide efficient and effective services.

The final two of the four advertised positions [Senior Accounts Officer and Assistant Accounts Officer] would be on board by the end of October, 2019.

The variance of $1,033,867.93 between Trust Revenue Account and Bank Account resulted when Department of Environment was merged with other Ministries over the years.

No accurate reconciliations were carried out.


The variance occurred due to mispostings and adjustments of previous years.

In 2018, as a way forward, the Ministry with the assistance from FMIS Division of Ministry of Economy had under took the reconciliation exercise from the inception of the Environment Trust Fund Account.
The said account was reconciled and adjusted and the unsubstantiated variances that had resulted from previous years misposting had been submitted via a Memorandum for Book Entry Adjustment to Ministry of Economy on 14/10/2018.

On 16th August 2019, the Ministry for Local Government obtained confirmation from Ministry of Economy that requested for book entry adjustment was still in progress.
In 2018, Ministry of Local Government with the assistance from Financial Management Information System [FMIS] -Ministry of Economy had undertaken the reconciliation exercise of the four underlined accounts and the status was as follows: 1.

Drawings Account - Reconciliation completed.

2.

Trust Fund Account - Reconciliation completed.

3.

Operating Trust Account - Reconciliation completed.

4.

RFA Account - Reconciliation completed.


The unsubstantiated variances arising from previous years misposting had been submitted to Ministry of Economy for book entry adjustments on the 14th October, 2018.
The Committee acknowledges that although at the time of compiling this report, the Department of Environment had been changed into a New Ministry of Waterways and Environment; it was very concerned on the lax attitude taken by staffs in the operational performance of the Ministry during the fiscal year.
37.2 Statement of Receipts and Expenditure The Ministry of Local Government, Town Country Planning and Environment collected revenue totalling $444,780 and incurred a total expenditure of $18,231,575 for the year ended 31 July 2017.
55 Statement of Receipts and Expenditure for 2017 Description RECEIPTS State Revenue Town and Country Planning Fees Commission Total State Revenue Agency Revenue Miscellaneous Revenue Total Agency Revenue TOTAL RECEIPTS EXPENDITURE Operating Expenditure Established Staff Government Wage Earners Travel & Communications Maintenance & Operations Purchase of Goods & Services Operating Grants & Transfers Special Expenditures Total Operating Expenditure Capital Expenditure Capital Construction Capital Purchase Capital Grants & Transfers Total Capital Expenditure 31 July 2017 31 July 2016 31 July 256,537 3,430 259,967 184,813 184,813 444,780 3,308,090 292,857 218,889 277,215 147,854 910,715 1,702,929 6,858,549 721,796 810,867 9,700,886 11,233,549 31 July 174,574 4,639 179,213 165,213 165,213 344,426 1,591,961 118,901 150,819 165,289 61,609 1,310,402 1,064,429 4,463,410 1,838,461 825,688 17,814,240 20,478,389 Value Added Tax 139,477 287,086 TOTAL EXPENDITURE 18,231,575 25,228,885 During the Financial period, the details of capital grants that were paid out the Ministry [operating and capital grants] to National Fire Authority and Municipal Councils are as follows: No.
Year Council Project 2016/17 2016/17 2016/17 2016/17 2016/17 2016/17 2016/17 2016/17 2016/17 2016/17 2016/17 2016/17 2016/17 Lautoka City Council Nasinu Town Council Suva City Council Lautoka City Council Ba Town Council Nausori Town Council Tavua Town Council Sigatoka Town Council Lami Town Council Labasa Town Council Savusavu Town Council Nadi Town Council Levuka Town Council Swimming Pool project Valelevu Ground Upgrade Drainage Work Drainage Work Drainage Work Drainage Work Drainage Work Drainage Work Drainage Work Drainage Work Drainage Work Drainage Work Drainage Work Fund Disbursed in FJD$ 750,000.00 350,000.00 106,892.00 68,763.00 144,100.00 50,000.00 38,137.00 20,000.00 50,977.25 20,500.00 20,000.00 105,115.00 50,000.00 56 No.
Year Council Project 2016/17 2016/17 2016/17 2016/17 2016/17 2016/17 2016/17 2016/17 2016/17 2016/17 Nasinu Town Council Rakiraki Town Council Lautoka City Council Nasinu Town Council Rakiraki Town Council Nausori Town Council Nadi Town Council National Fire Authority National Fire Authority Suva, Nadi & Lautoka Councils Drainage Work Drainage Work Swimming Pool project Laqere Market Market Rt.
Cakobau Prince Charles Park Capex Projects Hydrants Vacuum Trucks Fund Disbursed in FJD$ 199,615.71 20,000.00 1,000,000.00 1,000,000.00 1,800,000.00 50,000.00 150,000.00 3,000,000.00 200,000.00 540,000.00 TOTAL CAPITAL PROJECTS FUNDING 9,734,099.96 Before any payments were made, the Ministry signs a Memorandum of Agreement [MOA] in between the Ministry and the Implementing Agency [Councils and National Fire Authority].
The Memorandum of Agreement, vetted by the Solicitor General Office which establishes project scope and milestones.

Based on those agreements, Request to Incur Expenditure [RIE] is prepared and funds released.

As a monitoring process, the Project Reports were received by a team of officers which included Senior Accounts Officer and Senior Administration Officer - Local Government.
Then Site visitations and some Project Committee meetings were attended by the Staffs with the Construction Implementation Unit- Ministry for Economy staffs.

Acquittals were received quarterly in accordance with the MOA.

Quarterly project performance reports are forwarded to the Ministry of Economy.
The Director of Local Government had two dedicated staffs, Senior Accounts Officer and Senior Administrative Officer, who monitored the progress of Grants disbursed and work closely with the Manager Finance on Project Management.

The Committee noted the process explanation provided by the Ministry and recommends a follow up audit from the OAG in its next audit report.
37.3 Appropriation Statement The Ministry of Local Government, Town Country Planning and Environment incurred expenditure totalling $18.23 million in 2017 against a revised budget of $25.09 million resulted in saving of $6.86 million or 27 per cent.

The large savings was mainly attributed to unutilised capital construction funds for waste transfer station due to the land issue with the landowners.
In addition there was savings for the construction for the Naboro Landfill Stage 2 as payments were only made upon receipt of claims from the contractor.
Appropriation Statement for 2017 SEG Item 1 2 3 Established staff Government wage earners Travel & communication Changes Revised Estimate Budget Estimate 3,231,836 165,016 211,200 61,287 87,552 134,594 3,319,388 299,610 272,487 Actual Expenditure 3,308,090 Lapsed Appropriation 11,298 292,857 6,753 218,889 53,598 57 Lapsed Appropriation 97,985 48,848 896,905 1,227,486 2,342,873 3,526,079 101,769 293,214 3,921,062 597,623 6,861,558 SEG Item Budget Estimate Changes Revised Estimate Maintenance & operations Purchase of goods & services Operating grant & transfers Special expenditure Total Operating Expenditure Capital Construction Capital purchases Capital Grants and Transfer Total Capital Expenditure 375,200 196,702 326,200 49,000 206,560 (9,858) --- 1,807,620 3,325,626 9,274,058 1,807,620 (395,211) 2,930,415 (72,636) 9,201,422 6,858,549 Actual Expenditure 277,215 147,854 910,715 1,702,929 4,247,875 900,000 9,994,100 15,081,975 --- 72,636 --- 72,636 4,247,875 912,636 9,994,100 15,154,611 721,796 810,867 9,700,886 11,233,549 Value added tax Total Expenditure 737,100 25,093,133 --- --- 737,100 25,093,13 139,477 18,231,575 The Committee was informed that the capital projects implementation program did not progress as per expectations given that the Statutory Authorities during the fiscal year had a challenge in recruiting Project Management Team and Contractors.
This was due to heavy concentration on re-construction works post Cyclone Winston.

The Committee was further informed that all funds released during 2016/17 to Municipal Councils and National Fire Authority has been fully utilized and acquittals forwarded to the Ministry of Local Government.

Major Projects, such as Namaka Municipal Market, Govind Park Stadium, Rakiraki Municipal Market, and Laqere Municipal Market are ongoing capital programs spread over 3 to 5 years national budget.
Ministry of Local Government acknowledges historical lack of capacity.

Ministry of Local Government had provided support in within its capacity to drive Government investment programs under its Budget allocation.

Post 2017/18 Ministry had aligned its major capital programs under the Construction Implementation Unit to ensure that the Government procurement fiscal policy was aligned to Capital Construction works.
As previously noted, the Ministry had addressed resources and staffing capacity during that fiscal year.

The Director of Local Government had two dedicated staffs, Senior Accounts Officer and Senior Administrative Officer, who monitored the progress of Grants disbursed and work closely with the Manager Finance on Project Management.
37.4 Main Trust Fund Account 37.4.1 Environment Trust Fund Account The Environment Trust Fund Account recorded a balance of $4,530,939 for the financial year ending 31 July 2017.

The Ministry recorded receipts totalling $4,107,698 and expenses totalling $2,358,748 were incurred resulting in a surplus of $1,748,950 for the financial period ending 31 July 2017.

The Committee was informed on the Waste and Environment Impact Assessment for which the Ministry had used $2,358,548.

a.
a.

The total payment incurred is for the operation of Naboro Landfill only.

58 Payments were made for contractors - HG Leach and community levy.

The details of the payments were as follows: b. Update on $2,345, 548 utilization are as follows: The operation of the Naboro Landfill facility was an important aspect in the Ministry‟s delivery of quality service to its customers.
As per agreement in place, HG Leach shall place a high degree of emphasis on the quality of service delivery, both as Operation Contractor and the Ministry‟s on site agent.

The main objectives for the engagement of a Contractor in place for the operation of the landfill were: 1.

A safe operation for both customers and staff.

2.

An easily accessible, readily available facility for landfill customers.

3.

A well organized and tidy operation which presented a professional image to landfill customers.

4.
4.

Maintenance and enhancement of the quality of the environment.

5.

A well-managed operation complying with internationally accepted best practice in landfill management.

6.

A high degree of refuse compaction, thus prolonging the life of the landfill.

The Naboro Landfill Trust hold all gate fees collected from the Naboro Landfill.

These funds were then used to pay the Contractor on site.
The nominated contractor submitted monthly operational claims to cover cost of operating the landfill on behalf of the Department of Environment.

These claims were aligned to the Operation Contract signed between the Department and the Operator, HG Leach (Fiji) Ltd.
Monthly claims usually cover cost of compacting waste on site, treatment of the leachate (maintenance of Aerators), maintenance of Wash Pad and Access Road and opening of landfill outside normal operational hours (Public Holidays and after hours for special disposal).
c. Brief on Community Levy On May 24, 2011 Cabinet (Annexed to the attached signed Agreement) approved the payment of Community Levy at a rate of $0.78 VEP per tonnage to the ancestral landowners of the Mataqali Bativudi in the Province of Rewa that own the land on which the Naboro landfill was situated.
The Community Levy Agreement (Attached) was signed between the Ministry of Local Government, Housing and Environment (Ministry) and the iTaukei Affairs Board (iTAB) on October 8, 2014 to set up 59 MonthPayeeAmountParticulars of the paymentAug-16HG Leach Ltd$220,771.16Being payment for operational contract for Naboro Landfill for the month of June 2016Sep-16HG Leach Ltd$223,313.11Being payment for operational contract for Naboro Landfill for the month of July 2016Nov-16HG Leach Ltd$158,228.15Being payment for operational contract for Naboro Landfill for the month of August 2016Feb-17HG Leach Ltd$348,316.53Being payment for operational contract for Naboro Landfill for the month of September & October 2016Mar-17HG Leach Ltd$161,987.23Being payment for operational contract for Naboro Landfill for the month of November 2016Jun-17HG Leach Ltd$160,847.58Being payment for operational contract for Naboro Landfill for the month of December 2016Jun-17HG Leach Ltd$156,021.60Being payment for operational contract for Naboro Landfill for the month of January 2017Jun-17HG Leach Ltd$161,155.78Being payment for operational contract for Naboro Landfill for the month of February 2017$1,590,641.14Jun-17Itaukei Land Trust Board$16,572.61Being payment for 3rd quarter community Levy for Naboro LandfillAug-16Itaukei Land Trust Board$63,937.25Being payment for 2nd quarter community Levy for Naboro Landfill$80,509.86$1,671,151.00Note, sum of $687,397 is void payment which is reflected under the receipts sum.
a working framework to enable transparent, accountable and timely pay-out of community levy to the ancestral landowners.

The Agreement stipulated that Community Levy payment was disbursed quarterly by the Ministry and the iTAB would then facilitate community levy payment to the ancestral landowners.

From 2018/19 period, the Environment Trust Fund Account was being handled by the Ministry of Waterways and Environment.
The committee noted the explanation on the Environment Trust Fund operations and recommends for further updates from the OAG in its next audit report.

PART B: ASSESSMENT OF FINANCIAL GOVERNANCE The Committee noted with concern that the OAG assessment of the Ministry‟s internal control environment, timely submission of draft financial statements, quality of financial statements submitted for audit and the signing of the financial statements has been rated to be ineffective.
PART C: OTHER SIGNIFICANT MATTERS 1.

Late submission of Draft Agency Financial Statements The Auditor-General had highlighted that there was delay in the submission of draft financial statements for audit contrary to the requirements of the Ministry of Economy circular number 4/2016 – 2016/2017 Closure of accounts procedures.
The Ministry first submitted to OAG its draft financial statements on 19th January 2018 and later resubmitted the corrected version on 27th February, 2018 which was due on 31st August 2017 for the revised fiscal year ending 31st July 2017.

Audit noted that the delay in the submission of the draft financial statements for audit was due to unavailability of appropriate staff to carry out the necessary accounting work including preparation of the financial statements.
The Committee was informed that the Ministry had addressed the above-mentioned anomalies with the recruitment of the new accounting team in their Finance department.

This was anticipated to effectively and efficiently provide timely financial support services and strictly adhere to the Closing of Accounts as per Ministry of Economy Circular and avoid any delay in the submission of the draft financial statements for audit.
The Ministry assured the committee that it had submitted their 2017-2018 Draft Financial Statements for Auditing on 22/2/2019.

The Ministry is on track to meet the timeline for this financial year.

The Committee noted the explanations given by the Ministry but still raises its concern that the ministry was yet to strictly adhere to the set timelines of the closure of Accounts Circular.
Therefore, the Committee recommends that the Ministry should ensure that adequate staffing was maintained in their accounts staff at all times to carry out the respective accounting functions.

60 2.

Records not provided for audit review – Operating Fund Account According to Sections 19.2.1 and 16.1.7 of the Ministry of Local Government Finance Manual, all accounting staffs were responsible for the proper maintenance and safekeeping of accounting records and documents.
The Senior Accountant was responsible for the safekeeping and proper maintenance of all accounting records and documents.

The following records were not provided for audit review:  Payment vouchers totalling $874,931.

 Journal vouchers totalling $444,780 to support recording of revenue in the general ledger.

Refer to Table 37.4 below for details of revenue recorded in the general ledger.
The commute noted with concern that the OAG was informed by the Ministry that the above mentioned records could not be located in the premises of the Ministry.

The Ministry had commented that with the limited resources (staff personnel) and appointment of Manager Finance in Account Section, it would ensure that safe custody of accounting records were maintained, recorded and made available for auditing whenever required.
 Measures taken to avoid the issue raised again;  All payment vouchers and other accounting records were to be binded on a daily basis  Provision of training on Maintenance of Records for Accounts Personnel  In house Capacity Building Training to motivate staffs on procedures and processes pertaining to accounting records.

 Closely monitor the works of the subordinates to ensure the procedures and processes were adhered to at all times.
In relation to the anomalies in the maintenance of accounting records, the Ministry had advised that it had taken active role in getting the secondary form of accounting records available for missing payment vouchers with assistance from Ministry of Economy.

The Committee noted the explanations given by the Ministry and recommends that the Ministry should take disciplinary actions against staff who fails to perform their roles responsibly.

3.
3.

Misstatement of Capital Expenditures According to Section 14.1 of the Finance Management Act 2004, expenditures of money appropriated by an Appropriation Act may be incurred only in accordance with the authorisation effected by the Appropriation Act.

Audit noted that Naboro Landfill subsidy expenditure was recorded as Naboro Landfill Construction expenditure in the general ledger.

As a result, the SEGS 6 & 8 expenditures did not accurately reflect the respective actual expenditures.
The Department of Environment indicated that the payments were processed by a Temporary Relieving Clerical Officer (TRCO) without proper review by the Deputy Secretary who was in charge of the payments which resulted in the misposting.

61 The Ministry stated that with the limited resources (staff personnel) and appointment of Manager Finance in Account Section, the Ministry would ensure that all payments were prepared from the accurate allocations which were relevant for its intended purposes.
The Ministry had documented their Measures taken to avoid the issue reoccurring in future:  Identify the anomalies in all underline reconciliations and undertake the adjustment exercise to ensure the reconciliation report was true & fair.

 Provision of FMIS training for Accounts Personnel  In house capacity building training to motivate staffs on procedures and processes pertaining to reconciliations.
 All underline reconciliations were to be prepared on a monthly basis  All reconciliations prepared were verified and signed copy of the reconciliation is submitted to Ministry of Economy.

 Closely monitor the works of the subordinates to ensure the procedures and processes were adhered to at all times.
In relation to the anomalies in the underline accounts reconciliations was concerned, the Ministry had taken active role in getting the variance rectified and cleared with the assistance from FMIS in 2017- 2018 accounting period.

The Committee noted the Ministry’s explanations and request further update from the OAG in its next audit report.

4.
4.

Stale cheques Not Journalised for Main Trust Account According to Section 33 (1) of the Finance Instruction 2010, Specimen signatures of cheque and encashment signatories, and details of any conditions of appointment, must be submitted to the Chief Accountant.

Further, Section 33(2) stated that Accounting Head must make all attempts to issue stop notices for all cheques that have remained un-presented for more than 6 months.
The Ministry had rectified the issue for Main Trust Account Stale cheques in 2018 accounting period except from Cheque number 327 which is included in the book entry adjustment.
The status of the cheques were as follow: Date 22/3/2012 Cheque Number 194 Amount Remarks 2,941.50 Presented in the Bank Statement on 23/3/2012 04/04/2012 30/05/2016 197 327 13,800.00 16,719 01/06/2012 17/07/2013 04/04/2012 30/03/2012 191 244 196 195 18,394.58 19,950.00 24,624.95 40,073.40 Presented in the Bank Statement on 13/4/2012 The stale cheque amounting to $16,719 has been included in the Book Entry adjustment submission which submitted to Ministry of economy of 14/10/2018 Presented in the Bank Statement on 24/1/2012 Presented in the Bank Statement on 18/7/2013 Presented in the Bank Statement on 12/4/2012 Presented in the Bank Statement on 02/4/2012 05/11/2012 199 79,040.88 Presented in the Bank Statement on 21/5/2012 62 Date 16/3/2012 Cheque Number 192 Amount Remarks 176,586.70 Presented in the Bank Statement on 19/3/2012 $392,131 The Committee noted the actions taken by the Ministry to increase its Staffing capacity in the Accounts Section.
It was anticipated that this action would effectively and efficiently provide the financial support services to avoid such anomaly in future.

The Ministry of Environment and Waterways had managed this Trust Fund.

The Committee noted the unpresented cheque listing which were revealed during the time of audit that cheques totalling to $392,131 were more than six months old which were deemed to be stale as at 31 July, 2017.

5.
5.

Records not provided for audit verification – Main Trust Fund Account Payment vouchers totalling $1,171,987 to support the expenditure recorded in the main trust general ledger expenditure account were not provided for audit review as the Ministry could not locate the records.
Details of Missing Payment Voucher Records for Main Trust Fund Account Date Cheque Number Amount Description 29/8/2016 333 220,771 TF HUD LITTER DECREE 335 338 340 AP6707 AP0477 AP0881 AP9693 63,937 29/08/2016 233,313 9/12/2016 158,228 11/3/2016 161,987 Period 08/2017 156,022 Period 11/2017 161,156 period 11/2017 16,573 Period 11/2017 Total 1,171,987 In addition to the above, journal vouchers totalling $317,894 for adjustments made in the main trust general ledger receipt account were also not provided for audit review as the Ministry could not locate the records.
Details of Missing Journal Voucher Records for Main Trust Fund Account Date Journal Voucher Number Amount Description Main Trust Account 16-Aug N/A 16-Aug 17-Apr N/A JV 51/02 6,123 R22 Import Fees - ODS Fines Environment Trust 26,532 86,900 ODS Fines Environment Trust 63 Date 16-Nov 16-Nov 17-Apr Total Journal Voucher Number JV 19/03 JV 26/11 JV 53/02 Amount Description 185,070 TF HUD Litter Decree 1,659 Environment Trust 11,610 Environment Trust 317,894 The Ministry in its management comments stated that the limited resources (staff personnel) and appointment of Manager Finance in Account Section, the Ministry would ensure that safe custody of accounting records were maintained, recorded and made available for audit whenever required.
Measures taken to avoid the issue raised again;  All payment vouchers and other accounting records were to be binded on a daily basis  Provision of training on Maintenance of Records for Accounts Personnel  In house Capacity Building Training to motivate staffs on procedures and processes pertaining to accounting records.

 Closely monitor the works of the subordinates to ensure the procedures and processes were adhered to at all times.
In relation to the anomalies in the maintenance of accounting records was concerned, the Ministry had taken active role in getting the accounting records binded on a daily basis.

6.

Variances in payroll records Audit noted that a variance of $268,110 between the Ministry‟s payroll report and the general ledger account.
While the Ministry were able to identify mispostings totalling $134,989 which were for wages and travelling expenditure recorded as salary for established staffs, satisfactory explanations were not provided for the variance of $133,121.

The Ministry indicated that the postings were done by a Temporary Relieving Clerical Officer (TRCO) without proper review by the Deputy Secretary who was in charge of the Accounts section.
The Committee was informed that the Ministry had rectified the variance of $133,121, in the payroll records.

The reason for the variance in the payroll report was that four Special Administrators were paid from Personal Emolument vote under Department of Local Government however; the expenditures for salary included the FNPF were not journalized to Special Administrators vote.
Accounting Records General Ledger Amount – SEG 1 _ Established Staff Less Payroll Report (2,497,214) Less Payroll expenditure adjustment not accounted in payroll report Total Variances Less Identified Variances - Wages recorded in SEG 1 Less Identified Variances - Travel Allowance recorded in SEG 1 Unidentified Variances 133,121 Amount in $ 3,084,324 -2,497,214 -319,000 268,110 -68,835 -66,154 133,121 64 Accounting Records Less Identified Variances - Salary for 4 Special Administrators recorded in SEG 1 Variances Amount in $ 220,255 -87,134 7.
Provisional Tax Not Retained Audit noted that the Ministry did not withhold a sum of $45,573 being 5 per cent provisional tax on payments made to the contractor.
Details of Provisional Tax not collected Date Cheque Number Amount Provisional Tax Not Deducted 2/2/2017 18/01/17 26/07/17 18/01/17 20/02/17 9/3/2017 11/5/2017 24/05/17 19/06/17 Total 43442 43355 44283 43354 43547 43628 43942 43995 44109 70,167.89 138,393.19 70,831.58 348,316.53 78,584.99 78,058.26 69,627.49 76,463.00 63,055.46 3,219 6,348 3,249 15,978 3,605 3,581 3,194 3,507 2,892 $45,573 The above finding indicated that the officer responsible for payments did not comply with the relevant legislation.
The Ministry stated that the amount had been deducted from the 2017-2018 claims and settled with FRCS but Audit was not provided with supporting documents to substantiate this.

The Ministry in its management comments stated that it was in consultation with the contractor on the non-payment of $45,573 of provisional tax from the contractor‟s claims for 2016-2017 period.

The said sum shall be deducted and remitted from the contractors claim to Fiji Revenue & Customs Authority before 30/9/2018.
The said sum of $45,573 was not deducted from the contractual payments for 2016- 2017 period however, the sum to be recovered from 2017-2018 last claim for Naboro Landfill Stage 2, Cell 2 which was due in the first quarter of 2018-2019 period upon release of Requisition to Incur Expenditure (RIE).
The Committee was informed that the Ministry has taken the following measures to avoid the audit issue raised:  Identify the anomalies in all underline reconciliations and undertake the adjustment exercise to ensure the reconciliation report were true & fair;  Provision of FMIS training for Accounts Personnel;  In house capacity building training to motivate staffs on procedures and processes pertaining to reconciliations;  All underline reconciliations were to be prepared on a monthly basis;  All reconciliations prepared were verified and signed copy of the reconciliation was submitted to Ministry of Economy; and 65  Closely monitor the works of the subordinates to ensure the procedures and processes were adhered to at all times.
The Ministry confirmed would ensure that all payments were made in consideration with valid applicable tax regulations.

8.

Trust Fund Expenditure Paid From Operating Drawings Account Audit noted that the Ministry recorded cash withdrawal totalling $348,317 through cheque 43354 of 18/01/17 from the operating drawing general ledger account to pay for main trust fund expenditures.
Details of Trust Expenditure Funded from Operating Drawings Account Date 18/1/2017 Cheque Number Payment Description 43354 September 2016 claim for Naboro landfill from Environment trust account Amount Remarks 348,317 The expense amount is recorded to the Environment Trust account.

However, the cash withdrawn are recorded in the operating drawing general ledger account misstating cash balance for drawing accounts.
Total $348,317 The Department of Environment revealed that the payment was processed by a Temporary Relieving Clerical Officer (TRCO) without proper review by the Deputy Secretary who was in charge of the payments.

The Ministry in its comments stated that upon access to records on 02/08/2018 and Bank Confirmation on the same date.
The Ministry did not withdrew funds from the Operating Bank Account Number (704835) to pay for the Main Trust fund expenditure amounting to $348,316.53 for operational claim for Naboro Landfill for the month of September and October 2017.

The said payment was processed from the Main Trust Fund Account No.

9802022948 which was presented to the bank via Westpac Cheque No.

00342 dated 20/1/2017.


There had been an error in the payment details as per FMIS, the payment for sum of $348,316.53 were wrongly matched with cheque no.

43354 and Drawings bank identification code (CNB01).

In relation to the anomalies in the underline accounts reconciliations was concerned, the Ministry had taken active role in getting the variance rectified and cleared with the assistance from FMIS in 2017- 2018 accounting period.

9.
9.

Absence of Fixed Assets Register Audit noted that the Ministry did not maintain a fixed assets register for 2016 -2017 financial year.

The Ministry has attributed the above anomalies to inadequate staffing in the Accounts Section.

The Committee was informed that the Ministry had established the Fixed Asset Register in 2017 and records the fixed assets of the Ministry as and when procured and adjustments accordingly once the uneconomical assets were boarded.
Manager Finance had adapted to fiscal instructions policy in maintaining Fixed Asset Register.

66 10.

Expenditure Not Recorded in the General Ledger Review of the Revolving Fund Account (RFA) revealed that the Ministry incurred expenditure of $54,775 for Global Environment Facility which were not retired and recorded as expenditure for the period.
Details of Global Environment Facility Payments Not Retired to Expenditure Date Cheque Number 29/09/16 42790 30/09/16 42805 4/11/2016 42988 Description/ categories Payment for catering and set in regards to Global for reception Environment Facility workshop up dinner Payment of meal to 14 Department of Environment to Global Environment Facility staff workshop in regards Payment of ABS Project awareness materials which was to be paid by GEF UNDP ABS Project.
This payment was in regards to Global Environment Facility (GEF) workshop.

29/09/16 42794 Payment for T-Shirts for the GEF meeting Total Total 32,550 225 9,000 13,000 $54,775 The above finding indicated that the Ministry did not follow up on the retirement of the funds from the donor.
The Ministry in its management comments stated that they had received the funding from United Nations Office in relation to cater for the expenditures incurred for Global Environment Facility activities in 2016-2017 accounting period which was journalized from the Revolving Fund Account.

The Ministry would ensure that expenditures shall be replenished to Consolidated Fund Account once the Donor (UNDP) remits the funding to Government.
The Committee was informed that the Ministry has taken the following measures to avoid the issue being raised again;  Provision of training on Maintenance of Records & Registers for Accounts Personnel  In house Capacity Building Training to motivate staffs on procedures and processes pertaining to accounting records.

 Closely monitor the works of the subordinates to ensure the procedures and processes are adhered to at all times.

11.
11.

Main Trust Journals Not approved Audit noted that the review of the main trust fund journal entries recorded in the general ledger system revealed that journal vouchers prepared to post these entries were not approved by Senior Accountant 67 or the Assistant Accountant.

The Ministry has attributed the above anomalies to the inadequate staffing in the Accounts Section.
The Committee was informed that with the recruitment of the Manager Finance, all journal vouchers now prior to the adjustments were endorsed before it is posted into the FMIS system.

The Committee noted the comments provided by the Ministry and concurred with the Auditor-General’s recommendation for the Ministry to strengthen compliance with its internal controls over journal adjustments and take appropriate action for any breaches.

12.
12.

Anomalies in the Operating Trust Fund Account Audit noted the following anomalies in the Ministry‟s Operating Trust Fund Account:  As at 31 July 2017, the Ministry‟s Operating Trust Fund Account had overdrawn balances totalling $41,199.

 Journal vouchers totalling $4,900 were not provided for audit verification as these could not be located.

 The Ministry did not carry out monthly reconciliations as required by the Finance Manual.
Instead it carried out an annual reconciliation for the whole year.

The Committee was informed that the overdrawn balance in the Operating Trust Fund had eventuated due to non-reconciliation of underline operating trust accounts.

In 2018, as a way forward Ministry with the assistance from FMIS Division of Ministry of Economy had undertook the reconciliation exercise on Operating Trust Fund Account.
The said account was reconciled, adjusted and the unsubstantiated variances that had resulted from previous years misposting had been submitted via a Memorandum for Book Entry Adjustment to Ministry of Economy on 14/10/2018.

On 16th August 2019, the Ministry obtained confirmation from Ministry of Economy that request for book entry adjustment is in progress.

13.
13.

Anomalies in Drawings Account Audit review of the Drawings Account reconciliation revealed the following anomalies:  The Ministry did not conduct a Board of Survey for the Drawings Account;  Cheques totalling $883,599 were more than six months old hence were deemed to be stale as at 31 July 2017.
Refer to Appendix 3 for details;  The Ministry performed year-end bank reconciliation of its Drawings Account contrary to the monthly reconciliations requirement by the section of 17.2.4 of the Finance Manual.

In addition, the reconciliation was performed in February 2018 which was six months after the end of the financial period.
68 The Ministry in its management comments stated that with the limited resources (staff personnel) and appointment of Manager Finance in Account Section, the Ministry would ensure that underline accounts reconciliation (Drawings Account) are prepared accurately and any variance to be cleared via journal voucher with relevant accounting records are endorsed by the Accounting Head before journals are processed in FMIS.
In relation to the anomalies raised for stale cheques in the Drawings Account reconciliations, the Ministry had taken active role in getting the variance rectified and clear with the assistance from FMIS before the closure of 2017-2018 accounts.
The Committee was advised of the following measures adopted by the Ministry to address the audit issue:  Provision of training on Maintenance of Records & Registers and journals for Accounts Personnel  In house Capacity Building Training to motivate staffs on procedures and processes pertaining to accounting records.

 Closely monitor the works of the subordinates to ensure the procedures and processes were adhered to at all times.

14.
14.

Untimely Preparation of Reconciliations Audit review of the general account balances revealed the following anomalies;  The Ministry did not prepare and submit monthly reconciliations for various general ledger accounts for the period of August 2016 – July 2017 contrary to the monthly reconciliation requirements in section 17.2.4 of the Finance Manual;  Ministry performed year-end reconciliations as opposed to monthly reconciliations.
The reconciliation was prepared in February 2018 which is six months after the end of the financial period.
Details of Anomalies for General Ledger Accounts Reconciliations Amount Reconciliation Audit remarks General Ledger Description and Account Drawings Account (1- 37101-37999-530301) SLG 84 (1-37000-00000- 840000) Operating Trust Fund (1- 37000-00000-860000) Main Trust Expenditure (9- 37000-00000-890000) Main Trust Cash (9-37000- 00000-520000) Advances (1-37000-00000- 570000) Date 2,387,948 22/02/18 13,817 20/02/18 17,296 22/02/18 4,530,939 21/03/18 5,564,807 22/02/18 134,886 29/09/17 Salaries Reconciliation 3,308,090 February 18 69 Reconciliations were not prepared on a monthly basis.
Instead, only one Reconciliation was prepared for the whole year.

Reconciliations prepared for the month of June and July on 22/02/2018.

Reconciliations were not prepared on a monthly basis.

Instead, only one Reconciliation was prepared for the whole year in February 2018 which was six months after the period end.

Reconciliations were not prepared on a monthly basis.

Instead, only one reconciliation was prepared for the whole year in September 2017 which was one month respectively after the period end.
All reconciliations were prepared in February 2018 which was prepared six months after the period end.
292,857 Audit remarks Amount Reconciliation General Ledger Description and Account Wages Reconciliation The Ministry in its comments stated that with the limited resources (staff personnel) and appointment of Manager Finance in Account Section, the Ministry would ensure that underline accounts reconciliation were prepared accurately on a monthly basis and any variance to be cleared via journal voucher with relevant accounting records and were endorsed by the Accounting Head before journals were processed in FMIS.
Reconciliations were not prepared Date N/A In relation to the wages reconciliation, the said reconciliation was completed by end of May 2018.

The Ministry had taken active role in getting the variance rectified and clear with the assistance from FMIS before the closure of 2017-2018 accounts.

The Committee was advised that the Ministry has adopted the following measures to address the audit query:  Provision of training on Maintenance of Records & Registers and journals for Accounts Personnel.
 In house Capacity Building Training to motivate staffs on procedures and processes pertaining to accounting records.

 Closely monitor the works of the subordinates to ensure the procedures and processes were adhered to at all times.

15.

Anomalies Noted in Accounts Payable Account Audit noted the following anomalies for expenditure recorded in the general ledger account for accounts payable: 1.

The Ministry could not substantiate expenditures recorded in accounts payable trade general ledger account.
General Ledger Account and Description 1-37301-37999-840101 AP Trade - Govt Depts.

& Agency Amount Audit Remarks 128,429 The Ministry could not provide acquittals of the amount recorded in the general ledger system.

The Ministry could not also provide the journal voucher for recording the transaction in the general ledger.

General ledger audit scrutiny revealed that the funds were transferred from account payable general ledger account 840101 to operating fund travel and account.
A communication general ledger account (SEG 3), $80,000 to Maintenance and Communication general ledger account (SEG 4) and $11,583 to Special expenditure general ledger account (SEG 7) The Ministry could not provide the reason for the transfers of funds between the general ledger accounts.

total of $36,846 were transferred to 2.

The Ministry could not provide reasons for the overdrawn account noted below for accounts payable general ledger account.

3.
3.

Our audit further noted the following anomalies for expenditures recorded as Institutional Strengthening in the general ledger account.

70 Anomalies noted for Institutional Strengthening account in SLG 84 account Date Cheque/EFT No.

Particulars 25/11/16 3568 20/01/17 43378 Accommodation package at the resort for the Global Environment Facility (GEF) UNDP PMU Annual Project Retreat on the 25th-27th November, 2016.

Being payment for the purchase of printer to be used by the Fiji R2R Project Unit.
Amount ($) 23,770 Audit Anomaly Only one competitive quote was obtained.

1,559 Documents were Not stamped and paid.

Total 4.

Journal vouchers for adjustments totalling $60,472 for accounts payable were not provided for audit $25,329 verification as the Accounts section could not locate the records.
Details of Journal Vouchers Not Produced For Audit Verification as Records Are Missing Date JV Number Amount Description SLG 84 Account Aug-17 JV 01/03/17 3,114 MLHO4 Fund 4 NBSAP Project- UNDP Apr-17 JV 52/11 53,779 Apr-17 JV 55/11 3,579 Institutional Strengthening Project - Clearance of R2R/GEF Project Institutional Strengthening Project - Lodgement 29/11/2016.

Total 5.

6.
Total 5.

6.

$60,472 It was also noted that the Ministry performed only one reconciliation for the year contrary to the monthly reconciliation requirement in the Finance Manual.

The reconciliation was prepared in February 2018 which was six months after the end of the financial period.

The Ministry also stated that the reconciliation for SLG84 was prepared.

However, this could not be substantiated as this was not provided to audit for verification.
The Ministry in its comments stated that with the limited resources (staff personnel) and appointment of Manager Finance in Account Section, the Ministry would ensure that underline accounts reconciliation were prepared accurately on a monthly basis and any variance to be cleared via journal voucher with relevant accounting records and were endorsed by the Accounting Head before journals were processed in FMIS.
In relation to the SLG84 reconciliation was concerned, the said reconciliation were completed for 2016- 2017 period.

The Ministry would rectify the debit balance in the Withholding Tax Payable account and make necessary adjustments accordingly in before the closure of 2017-2018 accounts.

The expenditure in regards to GEF UNDP PMU Annual Project Retreat, the Ministry would investigate and had taken appropriate actions in 2017-2018 period.
The justification to table 37.22 is as follows: 71 Cheque Description/Categories Amount Justifications Date 25/11/16 3568 Accommodation Package at the resort $23,770 Only one competitive quote was obtained because there was a special conference package offered to the Ministry & UNDP staff (30 Officers).
The special package included: - Accommodation-Conference Package for 2 days to conduct Special Board Meetings for the CB2, ABS & R2R Projects-Group dinner on 26th/11/16-Lunch during 2 day meeting $1,559 Documents not stamped.

Payments were sourced from the Project Fund Allocation.

Please refer to Acquittal Report attachment.

20/01/17 43378 Being payment for the purchase of printer to be used by the Fiji R2R Project.
The Ministry would ensure that all journal vouchers for underline accounts reconciliation were prepared accurately with relevant accounting records were endorsed by the Accounting Head before journals were processed.

The variance in the underline accounts reconciliation were noted and the Ministry had taken active role in getting the variance rectified and clear with the assistance from FMIS before the closure of 2017- 2018 accounts.
Measures taken to avoid the issue raised again:  Provision of training on Maintenance of Records & Registers and journals for Accounts Personnel  In house Capacity Building Training to motivate staffs on procedures and processes pertaining to accounting records.

 Closely monitor the works of the subordinates to ensure the procedures and processes were adhered to at all times.

16.
16.

Inappropriate use of Advance Account Audit noted the following anomalies for the expenditure recorded in the advance general ledger account.

 Ministry staffs were taking advances for personal purposes other than official duties or travel; and  Salary deductions were not made recovery of advance given to the staffs of the Ministry.

The Committee was informed that the Ministry has taken active role to recover the outstanding advances as per table 37.25.
The status of the advance is as follows: Date Cheque/ EFT No.

Amount ($) Payee EDP Position Purpose of Request 9/06/16 3214 500 46742 Senior Accounts Officer The funds provided will be used for personal commitments due to financial constraints.

72 Outstanding Balance ($) 500 Remarks Status Advance given not for official purpose No salary deduction Recovered sum of $470 from the officer‟s salary from Pay 19/16 to 26/16.

Remaining balance of $30 yet to be recovered.


The reminder letter will be Date Cheque/ EFT No.

Amount ($) Payee EDP Position Purpose of Request Remarks Status Outstanding Balance ($) Advance given not for official purpose No salary deduction No evidence of approval.

Payment voucher not certified.

No deduction input was made in the subsequent pays 23-26 of 2016 Advance given not for official purpose.

No salary deduction issued to the officer on 4/9/2019.
Fully recovered via RR#488469 dated 24/10/16 Fully recovered via RR#488485 dated 23/12/16 Not Recovered.

The reminder letter will be issued to the officer on 4/9/2019.

Fully recovered via RR#488480 dated 22/12/16 Not recovered.

The reminder letter will be issued to the officer on 4/9/2019.

Not recovered.

The reminder letter will be issued to the officer on 4/9/2019.

Partially recovered sum of $200 via RR#488484 dated 23/12/16.
The remaining balance to be recovered from the officers pay from 20/2019 Activate the deduction from Pay 19/2019 30/9/16 3340 300 92787 Clerical Officer 10/03/16 3342 600 46742 14/10/16 3404 300 46742 25/10/16 3429 1,000 94012 26/10/16 3436 300 46742 11/10/16 3483 300 46742 Senior Accounts Officer Senior Accounts Officer Assistant Accounts Officer Senior Accounts Officer Senior Accounts Officer 300 600 300 1,000 300 300 Officer requested funds for personal use and stated that funds will be paid back from pay 22/2016 Description in the payment voucher unclear Officer requested for funds for personal commitments due to financial constraints.
Description in the payment voucher unclear.

There was no supporting documents indicating purpose and approval.

Officer requested for funds for personal commitments.

30/09/16 42802 300 64929 IT Officer Officer 300 21/10/16 42937 1,500 90909 N/A Actions to be taken are: requested funds to assist officer financially as officer's contract remain pending with the Minister.

Officer requested funds for personal commitments.


73 1,500 Person Senior Accounts Officer Action Taken Person has been terminated Secretary to Deputy Secretary IT Officer The Ministry shall be writing to Ministry of Civil Service to seek opinion on appropriate actions that shall be taken.

The person shall be given a warning letter during the month of September, 2019.

The Permanent Secretary Ministry of Waterways and Environment shall be informed on the situation.

17.
17.

Anomalies in Payments Funds Recovery $1400 remains as outstanding balance.

During September, 2019 legal action shall be taken.

MLG - Finance has spoken to the Staff and informed that direct deductions shall commence from Pay 19.

MLG Finance shall be speaking with Accountants Ministry for Waterways and Environment for recovery.
Audit review of the payments records revealed the following anomalies:  Payment vouchers were not authorised;  Supporting documents were not attached to payment vouchers;  Supporting documents attached to payment vouchers were not stamp “PAID”; and  Expenditure was not recorded in the correct general ledger account in the general ledger system.

The Committee was informed that all staffs employed in payments during 2016/17 were no longer in employment.
Improved vigilance via recruitment of staffs at senior level shall ensure that the Ministry minimize such anomalies.

Ministry shall be preparing a financial risk management plan which shall be signed by the Permanent Secretary and implemented before 31st January, 2020 [mid of fiscal year 2019/20].
74 CONCLUSION The Committee noted that the Auditor-General had issued unmodified opinions on 43 per cent of the 2017 financial statements audited in the economic services sector and modified opinion on the 57 per cent of the audited financial statements.

Ministries need to give close attention to the deficiencies highlighted under other significant matters of the audit report.
The Committee also emphasises on the timely preparation of quality draft annual financial statements and internal control assessments.

This was one of the major issues which need to be addressed by those charged with governance.

Therefore, the Committee looks forward to the Government Ministries to implement the recommendations highlighted by the Auditor-General and the Public Accounts Committee.

A prompt action is required by these agencies to improve their financial accountability.
75 We, the undersigned Members of the Standing Committee on Public Accounts agree with the contents of this report: …………………………… Hon.

Alvick Maharaj (Chairperson) ……………………….. Hon.

Joseph Nand (Deputy Chairperson) ………………………………… Hon.

Ro Teimumu Kepa (Member) ……………………………….. Hon.


Aseri Radrodro (Member) 76 APPENDICES 77 PUBLISHED WRITTEN EVIDENCE Copies of the written evidences and supplementary responses from the 6 Ministries is accessible on provided: the http://www.parliament.gov.fj/committees/standing-committee-on-public-accounts/ Parliament following Website link the on REPORT OF THE AUDITOR GENERAL The Report of the Auditor General of the Republic of Fiji – 2017 Audit Report on Economic Services Sector (Parliamentary Paper No.
9 of 2019) can be retrieved from the Fiji Parliament website: http://www.parliament.gov.fj/wp-content/uploads/2019/02/10-Report-of-the-Auditor-General-of-the- Republic-of-Fiji-2017-Audit-Report-on-Economy-Services-Sector.pdf 78