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OFFICE of the AUDITOR GENERAL Republic of Fiji REPORT OF THE AUDITOR-GENERAL OF THE REPUBLIC OF FIJI 2019 Audit Report on Social Services Sector PARLIAMENT OF FIJI PARLIAMENTARY PAPER NO.
27 OF 2021 Location : Level 8, Ratu Sukuna House 2-10 MacArthur Street Suva, Fiji Postal Address Telephone Email Website : P O BOX 2214, Government Buildings Suva, Fiji : (679) 330 9032 : info@auditorgeneral.gov.fj : www.oag.gov.fj OFFICE OF THE AUDITOR GENERAL Promoting Public Sector Accountability and Sustainability through our Audits 6-8TH Floor, Ratu Sukuna House 2-10 McArthur St P. O.
Box 2214, Government Buildings Suva, Fiji Telephone: (679) 330 9032 Fax: (679) 330 3812 E-mail: info@auditorgeneral.gov.fj Website: http://www.oag.gov.fj File: 102 01 June 2021 The Honorable Ratu Epeli Nailatikau Speaker of the Parliament of the Republic of Fiji Parliament Complex Gladstone Road SUVA.
Dear Sir 2019 AUDIT REPORT ON SOCIAL SERVICES SECTOR In accordance with section 152(13) of the Constitution of the Republic of Fiji, I am pleased to transmit to you my report on the Social Services Sector for 2019 excluding Head 23 – Ministry of Housing and Community Development.
A copy of the report has been submitted to the Minister for Economy who as required under section 152(14) of the Constitution shall lay the report before Parliament within 30 days of receipt, or if Parliament is not sitting, on the first day after the end of that period.

Yours sincerely Ajay Nand AUDITOR-GENERAL Encl.


REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 The Office of the Auditor-General – Republic of Fiji The Office of the Auditor-General is established as an Independent Office by the Constitution of the Republic of Fiji.
Its roles and responsibilities include audit of the accounts of the Consolidated Fund and whole of Government financial statements and annual appropriation statement required to be included in the whole of Government annual report for a financial year under the Financial Management Act 2004.

The audit extends to the accounts of all money received or held by a State entity, whether or not for purposes of Government.

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

This report satisfies these requirements.

As a result of its mandate, the Office of the Auditor-General has a distinctive view of the entire public sector of matters affecting financial and non-financial performance.
We use this perspective to achieve our vision of excellence in public sector auditing by providing comprehensive analysis and value-adding recommendations.

The Office of the Auditor-General notes the impact of its reports to Parliament on the ordinary citizens and strives for accuracy and high quality reporting including recommendations which are not only value-adding to the entity subject to audit but its customers, the general public as well.
_______________________________________________________________________________________________ REPORT ON SOCIAL SERVICES SECTOR 1 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 TABLE OF CONTENTS AUDITOR-GENERAL’S FOREWORD ................................................................................................ 3 1.0 2.0 3.0 Sector Summary ......................................................................................................... 6 AUDIT OPINION RESULTS .......................................................................................... 7 Assessment of Financial Governance ..................................................................... 11 3.1 3.2 3.3 3.4 3.5 3.6 Internal control framework ..................................................................................... 11 Internal controls ....................................................................................................... 12 Preparation of draft 2018-2019 agency financial statements ................................ 12 Quality of draft financial statements by entities ................................................... 13 Timeliness of draft financial statements for entities ............................................ 13 Timeliness of Provision of Management Comments and Signing of Financial Statements ............................................................................................................... 13 4.0 Result summary – Financial Governance ................................................................ 14 _______________________________________________________________________________________________ REPORT ON SOCIAL SERVICES SECTOR 2 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 AUDITOR-GENERAL’S FOREWORD I am pleased to present the report on the Social Services Sector.
Permanent Secretaries and those charged with governance of the agencies under the Social Services Sector are responsible for the preparation and fair presentation of the financial statements in accordance with International Public Sector Accounting Standards Cash Basis and requirements of Finance Management Act 2004 and other applicable laws and regulations.
This implementing and maintaining internal controls relevant to the preparation of financial statements that are free from material misstatement, whether due to fraud or error, selecting appropriate accounting policies, and making accounting estimates that are reasonable in the circumstances.

includes designing, responsibility It is important to note that the deficiencies highlighted in this report were identified during our audit and may have been subsequently resolved.
These have been included in this report as they impacted on the overall system of control of the ministries and departments as at 31 July 2019.

The vision of the Office of the Auditor-General of “Promoting Public Sector Accountability and Sustainability through our audits” will be achieved when audits are completed on time and reported to Parliament on a timely basis.
Majority of the agencies have been very cooperative throughout the audit process, however, some agencies have not given the work of my office sufficient priority.
The completion of audits of 2018-2019 and prior year Agency Financial Statements and timely preparation of the respective years’ Sector Audit Reports to parliament has been hampered due to the following: (i) Draft Agency Financial Statements submitted considerably late for audit or drafts submitted within the set timeline are found to be not acceptable hence need to be resubmitted.

(ii) Considerable delay in providing comments to draft management letters.
(iii) Cancellation of Exit Meetings or non-confirmation of date and time for Exit Meetings.

(iv) Not providing supporting documents to support management comments for audit verification prior to finalization of management letters.

(v) Delay in signing audited accounts and Management Representation Letters and returning them for issue of the Audit Report.

As a consequence of these delays, I modified my reporting approach to parliament in the past by issuing the Sector Audit Reports in volumes.
However, the Chairperson of the Standing on Public Accounts (PAC) indicated to me in his letter dated 18 September 2020, that the modified reporting approach was causing difficulty to the Committee in its examination and scrutiny of the reports.
_______________________________________________________________________________________________ REPORT ON SOCIAL SERVICES SECTOR 3 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 To effectively deal with the challenges I have described above, meet the expectations of the PAC and achieve the vision of OAG, I have approved the following key changes in processes of the OAG in preparing reports to parliament.
• In the event management comments are not received and/or exit meetings are not confirmed by the agency/entity audited, the Final Management Letter will be issued after 14 days from issue of Draft Management Letters (Audit Memorandum).

It will be assumed that management has agreed to the audit findings reported in the Draft Management Letter.

Significant matters will be included in the report to parliament.
• Where signed accounts with Management Representation Letter for issue of audit report are not returned within seven days from date of issue for signature, audited financial statements will be included in the report to parliament with relevant comments.

• In cases where management comments or information provided during the audit are found to be false, misleading or incorrect upon audit verification, the matter will be dealt in accordance with section 7(1)(d) of the Audit Act 1969.
Section 7(1)(d) states that “in the performance of his or her functions under section 152(2) of the Constitution of the Republic of Fiji and of his or her duties under this Act, the Auditor-General may examine upon oath, declaration or affirmation (which oath, declaration or affirmation the Auditor-General hereby empowered to administer) all persons whom her or she may think to examine respecting the receipt or expenditure of money or the receipt or issue of any stores affected by the provisions of this Act and respecting all other matters or things whatsoever necessary for the due performance and exercise of the duties and powers vested in him or her.” Section 7 (3) of the Act further states that “Any person examined pursuant to the provisions of section (1)(d) who gives a false answer to any questions put to him or her or makes a false statement on any matter knowing or believing it to be true shall be deemed to be guilty of perjury and shall be liable to be prosecuted and punished accordingly.” The relevant provisions of the Act will also be applied to cases where records and/or information required for audit purposes are not provided when requested during the audit and are produced after the issue has been reported in the Draft Management Letter or Draft Audit Report or not provided at all.
The changes in processes have been brought to the attention of Permanent Secretaries, Heads of Independent Bodies and Commissions and those charged with governance in agencies which are subject to my audit on 01 April 2021.

The audit for Heads 23 - Ministry of Housing and Community Development has been completed and issued for signing on 20/04/21.

As at 27/05/21, the Ministry was yet to return the signed audited accounts to enable me to issue my audit opinion.
The delay was largely due to the restrictions brought about by the containment zones and movement restrictions due to COVID-19 pandemic.

The results of the audit of the Head 23 will be included in my subsequent reports to Parliament.
_______________________________________________________________________________________________ REPORT ON SOCIAL SERVICES SECTOR 4 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 This report contains summaries and my analysis of the audit findings, the quality and timeliness of financial reporting by agencies under the Social Services Sector, the audit opinions issued on the financial statements and the key reasons for such opinions, internal control assessments, other significant level recommendations aimed to strengthen financial reporting, governance and internal controls.
from the audits and high identified issues The issues discussed in this report require the immediate attention and prompt actions by the Permanent Secretaries and those charged with governance of the agencies to improve financial accountability by the Ministries and Departments.
Ajay Nand AUDITOR-GENERAL Date: o1 June 2021 _______________________________________________________________________________________________ REPORT ON SOCIAL SERVICES SECTOR 5 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 1.0 SECTOR SUMMARY This report includes the audit for agencies under the Social Services sector, namely: Head 21 Head 22 Head 24 Head 25 Head 26 Ministry of Education, Heritage and Arts Ministry of Health and Medical Services Ministry of Women, Children and Poverty Alleviation Ministry of Youth and Sports Higher Education Institutions Results of our Audits - Quality and Timeliness of Financial statements Of the four agencies reported in this report, the audit resulted in the Auditor-General issuing modified audit opinion on three agencies.
The details are contained in Section 2.0.

The submission of acceptable draft financial statements for audit were generally delayed impacting the timeliness of financial statements.
_______________________________________________________________________________________________ REPORT ON SOCIAL SERVICES SECTOR 6 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 2.0 AUDIT OPINION RESULTS The main outcome of the audits are independent auditors’ reports on the agency financial statements that were produced and submitted to the Auditor-General.
Comparatively, for the financial years 2017-2019, the quality of the agency financial statements for the agencies under the Social Services Sector has not improved.

This indicates that significant matters reported in the independent auditors’ report are not given adequate attention as a result, these matters remain unresolved resulting in modified audit opinion.

For financial year 2019, four agencies were issued with modified audit opinion compared to four agencies for financial year 2018.
The following table presents comparison of the results of our audit for last three financial years for ministries and departments under the Social Services Sector.

Ministry/Department 2018-2019 Financial Year 2017-2018 Financial Year Audit Opinion Type 2016-2017 Financial Year Audit Opinion Type Audit Opinion Type Date Audit Report Signed 14/04/21 21.

Ministry of Education, Heritage and Arts 22.

Ministry of Health and Medical Services 24.

Ministry of Women, Children and Poverty Alleviation 25.
Ministry of Youth and Sports Modified Modified Unmodified 18/03/21 Modified Modified Modified 04/01/21 Modified Modified Unmodified 11/08/21 Unmodified Unmodified Unmodified The graphical presentation below provides a comparison of the results of our audit for last three financial years for ministries and departments under the Social Services Sector.
Comparsion of Audit Opinions from 2017 - 2019 Financial Years Social Services Sector 3.5 3 2.5 2 1.5 1 0.5 0 2019 2018 2017 Unmodified Modified In accordance with International Standards on Auditing, we express an unmodified opinion (unqualified) when the financial statements are prepared in accordance with the Financial _______________________________________________________________________________________________ REPORT ON SOCIAL SERVICES SECTOR 7 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 Management Act 2004, Finance Instructions 2010 and with relevant legislative requirements.
This type of opinion indicates that material misstatements, individually or in the aggregate, were not noted in our audit which would affect the financial statements of an entity.
We issue a modified opinion (qualified) when having obtained sufficient appropriate audit evidence, we conclude that misstatements, individually or in the aggregate, are material, but not pervasive, to the financial statements; or we are unable to obtain sufficient appropriate audit evidence on which to base the opinion, but the auditor concludes that the possible effects on the financial statements of undetected misstatements, if any, could be material but not pervasive.
An Emphasis of Matter paragraph is included in the auditor’s report to highlight an issue that will help the user better understand the financial statements.

And an Other Matter paragraph highlights a matter that is relevant to users’ understanding of the audit report.
The reporting framework on which the agency financial statements of Ministries and Departments are prepared are based on the Financial Management Act 2004, Financial Management (Amendment) Act 2016, Finance Instructions 2010, and Finance (Amendment) Instructions 2016.

Based on the above, we issued modified audit opinion for agencies on the following grounds: Ministry of Education, Heritage and Arts 1.
Included in Operating Grants and Transfers account balance of $108.1 million is bus fare assistance program amounting to $29.5 million.

The Ministry was not able to provide the detailed breakdown of payments made to the supplier amounting to $5.1 million.

As such, the accuracy and completeness of the Operating Grants and Transfers account balance reflected in the Statement of Receipts and Expenditure could not be confirmed.

2.
2.

Unreconciled variances exist between the FMIS general ledger and the Ministry’s payroll reports for both Established Staff and Government Wage Earners of $606,092 and $731,875, respectively.

Consequently, the accuracy of the Established Staff and Government Wage Earners balances recorded in the Statement of Receipts and Expenditure for the year ended 31 July 2019 could not be established.

Without further qualifying the opinion expressed, attention was also drawn to the following matters: 1.
Internal controls over revenue, administration of the Free Education Grant, reconciliation of accounts and records management were generally weak.

These relate to misallocation of revenue, non-compliance to the policy on utilisation of Free Education Grant in accordance with prescribed percentage allocation and non-provision of accounting records for audit verification.

If these issues are not addressed promptly, it will result in material misstatements and possible financial losses.

2.
2.

The administration and management over the Bus Fare Scheme were generally found to be weak as highlighted in the Performance Audit Report on the Administration and Management of Bus Fare Assistance through E-ticketing for School Children, Elderlies and Person with Disability (Parliament Paper No.

71 of 2020).
71 of 2020).

_______________________________________________________________________________________________ REPORT ON SOCIAL SERVICES SECTOR 8 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 Ministry of Health and Medical Services 1.

The Ministry recorded Capital Construction expenditures of $21.7 million in the Statement of Receipts and Expenditure for the year ended 31 July 2019.
The Ministry was unable to provide the payment and journal vouchers to support capital expenditures totalling $4.7 million.

As a result, the completeness and accuracy of the capital construction expenditures could not be confirmed.

2.

Unreconciled variances exist between the FMIS general ledger and the Ministry’s payroll report for both Established Staff and Government Wage Earners for $5.1 million and $4.7 million respectively.
Consequently, the accuracy of the Established Staff and Government Wage Earners balances recorded in the Statement of Receipts and Expenditure for the year ended 31 July 2019 could not be established.

3.

There was no movement for the Sahyadri Trust Fund Account during the year.
The opening balance of $20,609 was qualified in the 2018 financial statements as the Ministry was not able to provide a detailed listing of the closing balance of $20,609 which included contributions from the patients and Government’s assistance to approved patients.

As a result, the accuracy and completeness of closing balance of $20,609 reflected in the Sahyadri Trust Fund Account Statements of Receipts and Payments could not be substantiated.

4.
4.

Receipts totalling $26,705 were not recorded in the FMIS general ledger for the Cardiology Services Trust Fund Account.

As a result, the total receipts and closing balances were understated by the same amount at year ended 31 July 2019.

5.

An unreconciled variance of $26,683 exists between the FMIS general ledger and the Bank Reconciliation statement for the Cardiology Services Main Trust Fund Account.
Consequently, the accuracy of the closing balance reflected in the Cardiology Services Trust Fund Account Statement of Receipts and Payments for the year ended 31 July 2019 could not be established.

6.

Expenditures totalling $12,060 were not posted to the FMIS general ledger for Fiji Children's Overseas Treatment Trust Fund Account.

As a result, total expenditure and closing balance were understated by the same amount at year ended 31 July 2019.

7.
7.

An unreconciled variance of $10,586 exists between FMIS general ledger and the Bank Reconciliation statement for the Fiji Children's Overseas Treatment Trust Fund Account.

Consequently, the accuracy of the closing balance reflected in the Fiji Children’s Overseas Treatment Trust Find Account Statement of Receipts and Payments for the year ended 31 July 2019 could not be established.

8.
8.

Internal controls over purchases and procurement, receipting and recording of Trust Fund revenue, reconciliation of accounts and records management were generally weak and if not addressed promptly will result in material misstatements and possible financial losses.

9.

Internal controls for the Bulk Purchase Scheme Trading and Manufacturing Account over receipting and payments were generally weak.
This relates to price charged that were not in accordance with the approved price list and the understatement of utility costs which is not paid for by the Bulk Purchase Trading and Manufacturing Account.

_______________________________________________________________________________________________ REPORT ON SOCIAL SERVICES SECTOR 9 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 10.
The list of patients treated under Fiji Children's Overseas Treatment Trust Fund were not made available for audit.

11.

A total of $55.9 million was incurred by the Ministry of Civil Service for the payment of personal emoluments and FNPF for the doctors employed by the Ministry of Health and Medical Services.

The Ministry of Civil Service was responsible for the administration of these expenditures in accordance with the budget approved by Parliament.
Ministry of Women, Children and Poverty Alleviation 1.

The Statement of Receipts and Expenditure includes Operating Grants and Transfers of $120.5 million.

Included in this amount were the various Social Welfare Scheme payments totalling $116 million.

An unreconciled variance of $365,360 existed between the General Ledger balance of $116 million and the actual payments made totalling $115.7 million for the year ended 31 July 2019.
Consequently, the accuracy and completeness of Operating Grant and Transfers of $120.5 million reflected in the financial statements could not be established.

2.

An unreconciled variance of $453,794 existed between FMIS general ledger and the Ministry’s payroll report for Established Staff.

Consequently, the accuracy of the Established Staff expenditure recorded in the Statement of Receipts and Expenditure for the year ended 31 July 2019 could not be established.
_______________________________________________________________________________________________ REPORT ON SOCIAL SERVICES SECTOR 10 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 3.0 ASSESSMENT OF FINANCIAL GOVERNANCE This section evaluates the effectiveness of the internal controls maintained by 4 Ministries and Departments.
Internal controls are processes designed and implemented by Permanent Secretaries, Heads of Departments and other personnel of Ministries and Departments to provide reasonable assurance about the achievement of a ministry or department’s objectives with regard to reliability of financial reporting effectiveness and efficiency of operations, and compliance with applicable laws and regulations.

The term “control” refers to any aspects of one or more components of internal control.
Permanent Secretaries, Heads of Departments and other personnel of Ministries and Departments are responsible for the preparation of the financial statements in accordance with the Financial Management Act 2004, Financial Management (Amendment) Act 2016 and Finance Instructions 2010, and for such internal control as they determine is necessary to enable preparation of financial statements that are free from material misstatements, whether due to fraud or error.
Internal control issues noted during our audit are reported to the Permanent Secretary or Head of Department of Ministries and Departments.

Our overall assessment of the financial governance of the agencies reported under the Infrastructure indicate no improvement around internal control, the financial statement preparing processes and responses to the Office of the Auditor-General.

Details of our assessment is provided under section 4.0 – Results Summary Financial Governance.
3.1 Internal control framework During our audits, we assess the design and implementation of controls to ensure that they are suitably designed to prevent, detect and correct material misstatements.

Where audit strategy requires, we also test the operating effectiveness to ensure the internal controls are functioning as designed.

A deficiency occurs when internal controls are unable to prevent, detect or correct errors in the financial statements or where controls are missing.
A significant deficiency is a deficiency that either alone or in combination with multiple deficiencies may lead to a material misstatement in the financial statements.

It requires immediate management action.


_______________________________________________________________________________________________ REPORT ON SOCIAL SERVICES SECTOR 11 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 3.2 Internal controls Internal controls are categorized against the following five components of internal control.

3.3 Preparation of draft 2018-2019 agency financial statements On 29 May 2019, Permanent Secretary for Economy issued Circular No.
09/2019 to Permanent Secretaries, Heads of Departments, High Commissioners and Ambassadors in Fiji Foreign Missions in which procedures for closing of 2019 accounts and times were detailed.

When ministries and departments achieve the key focus areas highlighted by the Permanent Secretary for Economy by the given dates, they are more likely to prepare accurate and timely draft financial statements for audit.
_______________________________________________________________________________________________ REPORT ON SOCIAL SERVICES SECTOR 12 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 Rating Year-end close process assessment  Effective  Generally effective  Ineffective All 10 key processes completed by due date Five of 10 key processes completed within two weeks of due date Less than five of 10 key processes completed within two weeks of due date 3.4 Quality of draft financial statements by entities The extent of audit adjustments made to draft financial statements indicates the effectiveness of an entity’s internal review processes before the accounts are submitted for audit.
We assessed the quality of financial statements by the impact these adjustments had on the total expenditures, operating results or net assets of the entity subject to our audit.

Rating Quality of draft financial statements assessment  Effective  Generally effective  Ineffective No adjustments were required Adjustments on total expenditure, operating results/net assets were less than one percent Adjustments on total expenditure.
operating results/net assets were more than one percent 3.5 Timeliness of draft financial statements for entities To assess the timeliness of acceptable draft financial statements, we have compared the date the draft financial statements were due and the date it was received.
Rating  Effective  Generally effective  Ineffective Timeliness of draft financial statements assessment Acceptable draft financial statements received before or on 15 October 2019 Acceptable draft financial statements received on or before 31 October 2019 Acceptable draft financial statements received after 31 October 2019 3.6 Timeliness of Provision of Management Comments and Signing of Financial Statements To assess the timeliness of provision of management comments and signing of financial statements, we have compared the date the draft management letter and audited financial statements were issued to entity and the date management comments and signed accounts were received.
Accordingly, we have assessed timeliness for Social Services Sector as: Rating  Effective Rating  Ineffective Timeliness of Management Comments Received Within 21 days from issue of Draft Management Letter Timeliness of Signed Financial Statements Received After 15 days from issue of Financial Statements for signing _______________________________________________________________________________________________ REPORT ON SOCIAL SERVICES SECTOR 13 4 1 S F S C M Q E Y T A M C I A C A R E C 7 1 ‘ 8 1 ‘ 9 1 ‘ 7 1 ‘ 8 1 ‘ 9 1 ‘ 7 1 ‘ 8 1 ‘ 9 1 ‘ 7 1 ‘ 8 1 ‘ 9 1 ‘ 7 1 ‘ 8 1 ‘ 9 1 ‘ 7 1 ‘ 8 1 ‘ 9 1 ‘ 7 1 ‘ 8 1 ‘ 9 1 ‘ 7 1 ‘ 8 1 ‘ 9 1 ‘ 7 1 ‘ 8 1 ‘ 9 1 ‘ 7 1 ‘ 8 1 ‘ 9 1 ‘                                                                                                                         e g a t i r e H , , .
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9 1 0 2 Y L U J 1 3 – REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR Section 21 Ministry of Education, Heritage and Arts Roles and Responsibilities Government upholds education as the most effective pathway to growing the Fijian economy, enriching Fijian society, and advancing the upward mobility of the Fijian people.
Through today’s unprecedented access to all levels of education, more Fijians are armed with higher levels of skills and knowledge, opening new doors of opportunity and allowing new industries to take root by employing local talent.

Over the past decade, Government’s consistent and targeted investment in the education of Fijian students has led to the historic achievement of universal primary education, and given a record number of Fijian children access to secondary and tertiary education.
The Ministry of Education, Heritage and the Arts (“Ministry‟) is responsible for building a knowledge-based society, ensuring that Fiji’s young people have equitable access to high quality education at all levels of the Fijian education system.

To better serve Fijian teachers and students, the Ministry is currently undergoing an organisational restructure that will streamline its systems and strengthen its capacity to more effectively respond to the current needs of the sector.
Further, this ongoing structural modernisation will provide strategic oversight for mapping out the long-term development of Fiji’s education system, allowing the Ministry to adapt to the demands of rapid technological advances and globalisation.
This restructure will be complemented by the work planned on reviewing the national curriculum to ensure the content and mode of delivery nurtures innovation amongst young Fijians, inspires them to set big goals and equips them with a strong foundation to pursue and achieve their goals.

Within the Ministry, the Department of Heritage & Arts is charged with safeguarding Fiji’s rich cultural and natural heritage.
In addition, increased resources have been provided for the cultivation and conservation of various art forms, including those that highlight Fiji’s cultural heritage.
Table of Contents PART A: FINANCIAL INFORMATION ................................................................................................... 3 21.1 Audit Opinion .......................................................................................................... 3 21.2 Appropriation Statement – Head 21 ........................................................................ 4 21.3 Appropriation Statement – Head 26 ........................................................................ 5 PART B: SIGNIFICANT MATTERS ........................................................................................................ 6 21.4 Records Not Provided ............................................................................................ 6 21.5 Variance between FMIS and Payroll Report (Recurring Issue) ............................... 7 21.6 Collection of Government Boarding School Fees ................................................... 8 21.7 Ration Rates for Boarding Schools ......................................................................... 9 21.8 Accounting for donor fund .................................................................................... 11 21.9 Misallocation of Expenditure ................................................................................. 12 21.10 Bus Fare Assistance (Recurring Issue)................................................................. 13 21.11 Free Education Grant (Recurring Issue) ............................................................... 15 21.12 Administration of Free Education Grant (Recurring Issue) .................................... 16 21.13 Anomalies in Accountable Advance (Recurring Issue) .......................................... 18 21.14 FHEC Revenue Incorrectly Posted (Recurring Issue) ........................................... 19 21.15 Under-Utilisation of Capital Expenditure Budget (Recurring Issue) ....................... 20 PART C: ASSESSMENT OF FINANCIAL GOVERNANCE..................................................................... 22 21.16 Internal Controls ................................................................................................... 22 21.17 Submission of FY 2018-2019 Draft Agency Financial Statements ........................ 23 21.18 Quality of Draft Financial Statements by entities ................................................... 23 21.19 Timeliness of draft financial statements ................................................................ 24 Ministry of Education, Heritage and Arts Section 21: Page 1 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR 21.20 Timeliness of Provision of Management Comments and Signing of Financial Statements ........................................................................................................... 24 APPENDIX 1: ANALYSIS OF GOVERNMENT BOARDING SCHOOL FEES REVENUE 25 Ministry of Education, Heritage and Arts Section 21: Page 2 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR PART A: FINANCIAL INFORMATION 21.1 Audit Opinion The audit of the 2019 accounts of the Ministry of Education, Heritage and Arts resulted in a modified audit opinion with Emphasis of Matters paragraphs.
The qualifications were as follows: 1.

2.

Included in Operating Grants and Transfers account balance of $108.1 million is bus fare assistance program amounting to $29.5 million.

The Ministry was not able to provide the detailed breakdown of payments made to the supplier amounting to $5.1 million.

As such, the accuracy and completeness of the Operating Grants and Transfers account balance reflected in the Statement of Receipts and Expenditure could not be confirmed.
Unreconciled variances exist between the FMIS general ledger and the Ministry’s payroll reports for both Established Staff and Government Wage Earners of $606,092 and $731,875, respectively.

Consequently, the accuracy of the Established Staff and Government Wage Earners balances recorded in the Statement of Receipts and Expenditure for the year ended 31 July 2019 could not be established.

The Emphasis of Matters paragraphs included the following: 1.
Internal controls over revenue, administration of the Free Education Grant, reconciliation of accounts and records management were generally weak.
These relate to misallocation of revenue, non-compliance to the policy on utilisation of Free Education Grant in accordance with prescribed percentage allocation and non-provision of accounting Ministry of Education, Heritage and Arts Section 21: Page 3 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR records for audit verification.

If these issues are not addressed promptly, it will result in material misstatements and possible financial losses.

2.
2.

The administration and management over the Bus Fare Scheme were generally found to be weak as highlighted in the Performance Audit Report on the Administration and Management of Bus Fare Assistance through E-ticketing for School Children, Elderlies and Person with Disability (Parliament Paper No.

71 of 2020).
71 of 2020).

21.2 Appropriation Statement – Head 21 The Ministry collected revenue totalling $4.0 million in 2019 and incurred expenditure totalling $521.5 million against a revised budget of $535.4 million resulting in a saving of $13.9 million or 2.6%.

Details of expenditure against the revised budget are provided in Table 21.1.
Table 21.1: Appropriation Statement for 2019 – Head 21 SEG Item Established Staff & Wage Government Earners Travel Communication Maintenance Operations Purchase of Goods & Services Operating Grants & Transfers Special expenditure & Capital Grants Transfers Total Expenditure Value Added Tax Capital Budget Estimate ($) 371,504,639 Changes ($) Revised Estimate ($) 6,924,247 378,428,886 Actual Expenditure ($) 378,426,056 6,389,576 --- 6,389,576 6,261,943 Lapsed Appropriation ($) 2,830 127,633 2,079,080 (384,400) 1,694,680 1,259,731 434,949 2,689,455 (425,666) 2,263,789 1,898,272 365,517 22,399,486 (5,424,802) 16,974,684 16,156,636 818,048 108,271,646 798,771 109,070,417 108,119,583 950,834 3,256,309 (1,540,100) 1,716,209 1,065,928 650,281 Total Operating Costs 516,590,191 (51,950) 516,538,241 513,188,149 Capital Construction 6,642,292 303,470 6,945,762 2,381,736 Capital Purchase 1,570,685 --- 1,570,685 752,805 3,350,092 4,564,026 817,880 & 7,100,000 99,604 7,199,604 3,967,157 3,232,447 15,312,977 403,074 15,716,051 7,101,698 8,614,353 3,462,545 (351,124) 3,111,421 1,249,197 1,862,224 TOTAL 535,365,713 --- 535,365,713 521,539,044 13,826,669 Significant budget savings of $8.6 million in Capital Expenditure was largely due to the delay in the processing of applications for building grants from schools.
The delay resulted from the extension of closing date for submission of applications, the high number of applications received and meeting the requirements of the Ministry of Economy’s CIU.

There were also delays in tender approvals for capital projects.
Ministry of Education, Heritage and Arts Section 21: Page 4 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR 21.3 Appropriation Statement – Head 26 The Higher Education Institutions incurred expenditure totalling $85.2 million in 2019 against a revised budget of $123.8 million resulting in savings of $38.6 million or 31.2%.

Details of expenditure against the revised budget are provided in Table 21.2.
Table 21.2: Appropriation Statement for 2019 - Head 26 SEG Item 6 10 Operating Grants & Transfers Total Operating Costs Capital Grants Transfers Total Expenditure TOTAL Capital Budget Estimate ($) 104,789,107 Changes ($) Revised Estimate ($) Actual Expenditure ($) Lapsed Appropriation ($) --- 104,789,107 73,972,559 30,816,548 104,789,107 --- 104,789,107 73,972,559 30,816,548 & 19,000,000 --- 19,000,000 11,233,743 7,766,257 19,000,000 --- 19,000,000 11,233,743 7,766,257 123,789,107 --- 123,789,107 85,206,302 38,582,805 Significant budget savings were largely due to the following: 1.
Savings of $30.8 million in Operating Grants and Transfers was due to the partial release of Quarter 3 grants and more so the non-release of Quarter 4 grants to higher education institutions such as the Fiji National University, University of the South Pacific and the Centre for Appropriate Technology & Development.

Approval to release the grants was not provided by the Ministry of Economy.

2.
2.

Savings of $7.7 million in Capital Grants and Transfers was due to partial and non-release of quarterly capital grants to institutions such as the Fiji Museum, Fiji National University Nasinu and Labasa campuses and the Fiji Maritime Academy.
Ministry of Education, Heritage and Arts Section 21: Page 5 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR PART B: SIGNIFICANT MATTERS The Audit Act 1969 require, amongst other things, that the Auditor-General must report on other significant matters which the Auditor-General wishes to bring to the attention of Parliament.
Other significant matters highlighted in this report, include control weaknesses which could cause or is causing severe disruption to the process or on the ability of an auditee to achieve process objectives and comply with relevant legislation.

It is likely that these issues may have an impact on the operations of the Ministry in future, if necessary action is not taken to address them.
It is important to note that the deficiencies detailed in this report were identified during our audit and may have been subsequently resolved by the Ministry.

These have been included in this report as they impacted on the overall system of control of the Ministry as at 31 July 2019.
21.4 Records Not Provided The Manager Finance is responsible for the safekeeping and proper maintenance of all accounting records or documents.1 The following records were not provided for audit verification: • Detail breakdown for payments of $5.09 million made to the supplier for the Bus Fare Scheme.

Refer to Table 21.3 for details.


Table 21.3: Detail of payments as not provided – Bus Fare Scheme Payee Vendor A Total Cheque Number 207935 1062809 Date Voucher ID 22/02/2019 04/10/2018 576580 556654 Voucher Amount ($) 4,000,000 1,098,222 5,098,222 • Text books distribution listings to schools - The Ministry prints and distributes text books annually to all schools and in 2019 incurred expenditures totalling $2.9 million.
Records for the distributions of textbooks including the number of textbooks distributed to schools were not maintained.

• Payment vouchers and supporting documents for expenditures totalling $338,363.26.

Refer to Table 21.4 for details.
Table 21.4: Payment vouchers not provided 1 Ministry of Education Finance Manual 2017, Section 19.2.1 Ministry of Education, Heritage and Arts Section 21: Page 6 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR Cheque Number 222852 219218 193151 190028 208927 60597 Total Date Amount ($) 26/07/2019 155,872.12 12,120.00 25/06/2019 16,692.78 29/10/2018 94,503.07 1/10/2018 48,880.44 5/03/2019 10,294.85 22/05/2019 338,363.26 Root cause/Implication Poor records management and the absence of effective monitoring and supervisory checks in the accounting function.
Recommendation The Ministry should improve supervisory checks in its accounting function and also strengthen its records management practices to ensure that documents to support expenditures are appropriately maintained.

Agreed Management Action Audit comments noted.

Ministry was not able to provide all detail breakdown of payments made to the relevant supplier for the Bus Fare Scheme.

This was mainly because of sudden change in staffing without any handing over.
The records were also not found in the staff computer devices.

Ministry had exhausted multiple avenues but no records were located.

However, Ministry wishes to advise Audit that moving forward, Ministry will ensure that all records of detail breakdown of payments made is stored and kept both electronically and physically.

Text book distribution listing is being kept from 2021 as FEMIS has Textbook Module which consists of data on textbooks distributed.
Also, EMS has records of textbook distributed to the schools.

2020 we started using FEMIS 2021 onwards all onwards all information available in Officers Responsible Manager Procurement, Manager Finance, Manager Grants and Director Asset Management Unit 21.5 Variance between FMIS and Payroll Report (Recurring Issue) Salaries and wages constitute a major portion of the agency’s budget.
Proper controls over engaging new employees, salary payments and resignations reduce the risk of fraudulent or unauthorised payments, inaccurate payroll reports and invalid pay rates.2 We noted variances of $606,092 and $731,876 between the balances recorded in the FMIS general ledger and the Ministry’s payroll report for Established Staff and Government Wage Earners, respectively.
2 Ministry of Education Finance Manual 2013, Part 4 - Introductory Paragraph Ministry of Education, Heritage and Arts Section 21: Page 7 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR Refer to the Table 21.5 below for details of the variances.
Table 21.5: Variances in payroll FMIS Personal Emoluments as at 31/07/19 319,212,285 Established Staff ($) Add Allowances Add Overtime Add Relieving Staff Total FMIS General Ledger Balance Total Payroll System Report Less Manual payments as at 31/07/19 Variance Root cause/Implication 26,888,528 1,000 415,257 346,517,070 341,837,449 4,073,529 606,092 Government Wage Earners ($) 5,643,637 --- 6,122 64,860 5,714,619 6,446,495 --- (731,876) Lack of reconciliation performed between the FMIS general ledger and Payroll Reports, which is currently not a requirement of the Ministry’s Finance Manual.
Recommendation The Ministry should incorporate into the Finance Manual the requirement to carry out reconciliation of weekly and fortnightly payroll report against FMIS general ledger.

Agreed Management Action MEHA from this financial year has successfully prepared payroll reconciliation to reflect and record details of all expenses posted in SEG1 and SEG2.

The GL is always correct.


There are some transactions not captured in payroll report since the payroll software does not have provision to capture those transactions such as manual payments, journal adjustments, direct payments (compensations, contingency), salary reversals and Ministers emoluments & allowance.

This financial year the GL reconciliation for SEG1 and SEG2 is well prepared and details of transactions are well defined.

GL versus payroll reconciliation is available for audit purpose.
Officer Responsible Manager Finance 21.6 Collection of Government Boarding School Fees Each Accounting Head must ensure that: a) revenue is recorded against the correct account as per the Chart of Accounts; b) the Ministry of Finance (FMIS) is consulted before collecting a totally new revenue type; c) the recording of revenue is reconciled monthly with the Ministry of Finance; d) the Ministry of Finance is advised of any errors or discrepancies within 10 working days after the end of each month; and Ministry of Education, Heritage and Arts Section 21: Page 8 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR e) VAT is correctly accounted for and remitted as required.3 Audit review and analysis of fees revenue received from Government boarding schools revealed a variance of $54,514 between the balance recorded in the FMIS general ledger of $382,380 and the balance of $436,894 that should have been collected according to the school rolls.
Refer to Appendix 1 for the analysis done.

Root cause/Implication The lack of adequate checks through reconciliation process on the revenue collection and recording has resulted in the variance in boarding fees revenue.

Recommendation The Ministry should strengthen the reconciliation process by undertaking a comprehensive analysis of the school rolls and boarding fees collected.

Agreed Management Action The audit is noted.


The Ministry will conduct comprehensive review of boarding fees collection, receipting and deposits.

Appropriate analysis will be done such as quarterly reconciliation of border roll and revenue receipts books.

Reports will be prepared and checked against GL and arrears of revenue report.

School Principals, Bursars and Clerical Officers will be reminded via MEMO to carefully handle the enrolment and receipting of boarders.
The receipts will be carefully examined to note the payments done are for current or previous terms.

Officer Responsible Manager Finance 21.7 Ration Rates for Boarding Schools The ration rates ranging from $50 - $70 per term for student boarders in government boarding schools was approved in 1994.

We noted that the ration rate has not been reviewed for over 25 years and was not sufficient to meet the current cost of consumption for students (boarders).
In addition, the Ministry was not able to confirm the basis of deriving the ration rates of $50 per student per school term.

Refer to Table 21.6 below for the analysis of ration return for Term 2 of 2019: 3 Finance Instruction 2010, Section 21(1) Ministry of Education, Heritage and Arts Section 21: Page 9 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR Table 21.6: Details of Ration Returns - Term 2 of 2019 No of Students No.
of Days Ration Rate per student per term ($) Ration Rate per student per day ($) Actual Consumpti on for term 2, 2019 ($) (A) (B) (C) (D) = C/B (E) Actual Consumpti on per student per day ($) (F) = E/ (A * B) Variance ($) (G) = D - F Ratu Kadavulevu School 960 90 Adi Cakabau School 96 454 Queen Victoria School 780 90 Nasinu Secondary School 299 96 Root cause/Implication 50 0.56 153,174.70 50 50 60 0.52 95,706.74 0.56 216,156.11 0.63 130,473.12 1.77 2.20 3.08 4.55 (1.21) (1.68) (2.52) (3.92) Regular review of ration rates for the boarding schools has not been undertaken over the years.
Recommendation The Ministry should consider a thorough review of the ration rates for Government boarding schools to account for the current cost of consumption.

Agreed Management Action Audit comments noted.

We agree over the years, the budget and the per child allocation did not match.
The amount of the child has been removed from the management handbook because different schools have different circumstances, including supplementary foods from farms, charging parents for boarding and thirdly by fundraising.

This complements the amount of money that we give.

Moving forward we will analyse the boarding students roll in government versus non-government school.
The analysis will reflect the cost to run the boarding facility with similar boarding roll at government versus non-government school.

Four (4) Government boarding schools have boarding facility farms and gardens; Ratu Kadavulevu School, Queen Victoria School, Adi Cakobau School and Bucalevu Secondary School.

These four schools have livestock in farms such as cattle, pigs and poultry.

The livestock are utilized in meals therefore, $50 ration rate / boarding fees is sustainable.
Other five (5) government boarding schools do not have livestock.

They have gardens of root crops, tree crop and vegetables.

Ration rate / boarding fees range from $60 to $70 in these schools.

The boarding facility funded by MEHA caters for fuel, schools services, farm & ground machinery, farm expenditure, food, materials & stores.

Government boarding schools food supply is sustainable and there are no complains of stock shortage or malnutrition.
Officer Responsible Manager Finance Ministry of Education, Heritage and Arts Section 21: Page 10 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR 21.8 Accounting for Donor Fund An official government receipt must be issued for all monies received.4 Agencies must ensure that all commitments and invoices are promptly and accurately recorded in the accounting system to meet management and external reporting needs.5 The purpose of this Policy is to encourage accountability in the handling of donor funds.6 The Ministry received on 28/11/2018 a donation of $F20,000 from an embassy to fund the Special Education Program.
We noted the following anomalies: • There was no receipt issued to the donor for funds received.

• A review of SLG 84 accounts in FMIS general ledger indicated that there was no account on special education program in the 2019 financial year.

• On 11/02/19, an accountable advance for $20,000 was issued to a staff of the Ministry.

And on 18/02/19, revenue receipt No.

904124 of the same amount was issued by the Ministry’s cashier to the same officer for clearance of accountable advance.
No other supporting document was produced as acquittal.

The unit responsible for the implementation of the Special Education Program project confirmed not utilising the fund.

We were unable to establish if the amount advanced to the Ministry’s staff was retired or acquitted and deposited to the Consolidated Fund Account.

Root cause/Implication The findings indicate revenue receipting and SLG 84 guidelines were not followed.

There is a potential risk of misappropriation of donor funds.
Recommendation The Ministry should ensure that the requirements of the Finance Manual and any other guidelines governing the receipting and utilisation of donor funds are complied with.

Agreed Management Action Audit comment is noted.

SOP has been developed for donor funds.

Other checklists are available such as ad-hoc donor funds.

The Officer involved has been dismissed and the case is with FICAC for litigation proceedings.
The Ministry will ensure that the donors name is written on the revenue receipt issued instead of the officer’s name receiving the accountable advance.

Fund will be transferred to Ministry of Economy so an SLG 84 account is activated and accountable advance is properly acquitted and monitored by both Ministry of Education and Economy.
4 Finance Instructions 2010, Section 20 (6) 5 Finance Instructions 2010, Section 53 (1) 6 SLG 84 Reporting Guide, Section 3.1 (v) Ministry of Education, Heritage and Arts Section 21: Page 11 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR Officer Responsible Manager Finance 21.9 Misallocation of Expenditure The Accounts Officer Finance/ Ledgers shall enter details on payment vouchers in an Expenditure Ledger.

The ledger shall record: I. II.

III.

IV.


V. date of payment and name of payee; type and amount of payment; cheque and payment voucher number; expenditure account; cumulative totals.7 Any errors or misallocations must be immediately adjusted by way of journal vouchers.8 Review of a sample of payment vouchers revealed that the Ministry had charged expenditures to incorrect allocations in the FMIS general ledger.

Refer to the Table 21.7 below for details.
Table 21.7: Expenditure posted to incorrect allocations in the FMIS GL Date 11/03/2019 Voucher Number 578377 Amount ($) Particulars 1,848.37 Payment for Electricity Charges for January 2019 Allocation Posted to Correct Allocation SEG 3 Telecommunications SEG 4 Power Supply 22/11/2018 563042 1,719.34 Electricity Bill for October 2018 11/06/2019 587525 1,324.34 Electricity Bill for 12/03/2019 578579 1,376.78 Electricity Bill for May 2019 01/07/2019 May 2019 590080 36,000.00 Payment for Monthly Goodwill Rent from January 2018 - June 2019.
SEG 3 Telecommunications SEG 3 Telecommunications SEG 3 Telecommunications SEG 5 Consumables for Course Practical SEG 4 Power Supply SEG 4 Power Supply SEG 4 Power Supply SEG 5 Property Lease & Rent 26/07/2019 593810 42,000.00 Payment for Supply of Milk & Weetbix SEG 9 Boat & Outboard Motor Engine SEG 5 Free Milk Programme Root cause/Implication Lack of supervisory checks in the reconciliation process to ensure that expenditures are charged to the correct allocations at the close of accounts.
The misallocation of expenditures is sometimes due to insufficient funds available in the relevant allocations.
7 Ministry of Education, Finance Manual 2017, Section 2.8.14 8 Ministry of Education, Finance Manual 2017, Section 16.3.4 Ministry of Education, Heritage and Arts Section 21: Page 12 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR Recommendations The Ministry should: • vire funds from allocations with savings during the financial year to ensure that expenditures are correctly reflected.
• ensure supervisory checks in the reconciliation process are strengthened to ensure that mis- postings of expenditures are identified and adjusted in a timely manner.

Agreed Management Action Audit comments are noted.

Moving forward this is what we have been doing; this financial year the procurement, grants and payments team ensure to seek period cash flow and virement.

Internal budget books will be prepared and provided to team leaders in finance to enable them to check the active allocations.
Internal training and awareness will be provided to ensure those who input allocations in FMIS use correct allocations for procurement and payments.

If additional funding is required in any allocation then period cash flow and virements shall be done in accordance with guidelines and checklists.

Officer Responsible Manager Finance 21.10 Bus Fare Assistance (Recurring Issue) The Ministry engaged “Company A” to facilitate transport assistance scheme for school students through electronic ticketing.
(E-Ticketing) Issues relating to the bus fare assistance programme were raised in the Performance Audit report on the “Administration and Management of Bus Fare Assistance through E-Ticketing for the School Children, Elderlies and Persons with Disability”; Parliament Paper No.

71 of 2020.

Refer to the summary below for details.


Administration of the Program • • • • The Policy on Transport Assistance, which was due for review in 2016, and Standard Operating Procedures (SOPs), to include the responsibilities of the e-ticketing service provider as required under the Electronic Fare Ticketing Act 2014 is yet to be carried out.

There was no formal agreement (Service Level Agreement) between the Ministry of Education and the e-ticketing service provider.
Although complaints are recorded, there is no clear process in the manner in which feedback is to be provided to the complainant.

Policies and processes for declaration of conflict of interest for officers involved in the program has not been developed by the Ministry to manage conflicts.
Ministry of Education, Heritage and Arts Section 21: Page 13 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR Management of the Performance of the Program • • • • There has been an absence of acceptable data governance process where agreements are made to ensure that relevant information such as exception reports on the actual use of cards, travel patterns and behaviour of eligible students are captured and monitored.
Regular reconciliation has not been carried out between the records kept by the Ministry against the records kept by the e-ticketing service provider.

Our review of the MEHA internal audit report in May 2020 revealed six findings that are related to the Bus Fare Assistance program.
For example, inconsistencies were noted in the approval and rejection of applications on bus fare assistance provided on the zoning of students based on their residential address even though the head of school considerably monitors this limit.

The Transport Assistance Unit (TAU) is working towards implementing the recommendations made in respect of these issues.
A significant number of anomalies were noted in the student bus fare assistance application process which needs to be addressed by the Policy on Transport Assistance.

Data Analytics • There were inconsistencies between the records maintained by the ticketing service provider and the Ministry of Education.
Root cause/Implication In the absence of the agreement, the interest of government is not protected and the Ministry may not be able to hold “Company A” responsible for not meeting the deliverables of the bus fare assistance program.

The Ministry did not implement stringent monitoring of the funds disbursed.

In the absence of accounting records and supporting documents, the accuracy and completeness of the account balances recorded in the FMIS general ledger could not be substantiated.
Recommendations The Ministry should ensure that: • An agreement is drawn between Ministry and the e-ticketing service provider for the facilitation of transport assistance scheme for school students through electronic ticketing.

• Policy on Transport Assistance is reviewed and also update the SOPs to address the risks associated with the Bus Fare Assistance program through e-ticketing, amend outdated information and incorporate updated e-ticketing services application and guidelines.
• Processes are improved so that confirmation on income of parents of students applying for assistance under the program can be obtained from the Fiji Revenue and Customs Service.

• Zoning policy is strictly adhered to for bus fare assistance given to school students.

Agreed Management Action Ministry has drafted a service agreement and is currently under consultation process.
The requirements and responsibilities of both the Ministry and E-Transport Service Provider are clearly outlined in the draft service Ministry of Education, Heritage and Arts Section 21: Page 14 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR agreement.

These will be aligned to the revised Transport Assistance Policy and the SOP for Transport Assistance.
Ministry assures Audit that the service agreement will be finalized and vetted before the next financial year.

Ministry also highlights that no reconciliation was done due to short of staff.

Ministry however, assures audit that proper reconciliations against General Ledger and the amount disbursed and redeemed will be carried out with effect from this Financial Year.

The Ministry is also currently in process of finalizing the Transport Assistance Policy and the SOP.
The Policy and SOP will be implementing processes that will strengthen the internal controls around Transport Assistance and will outline regular reporting and monitoring of E-Transport Services and confirmation on income.
Section 4.2 and 4.3 of the draft Policy respectively states that “Parents/Guardians shall be required to provide documentation as requested by MEHA to substantiate their income and MEHA will enter into a data-sharing Memorandum of Understanding with the FRCS to enable verification of parental/guardian income declarations”.
The draft policy also covers adherence to the zoning policy as per Section 4.11 “Priority for transport assistance will be given to eligible students residing within their school’s home zone as defined in the Policy on School Zoning in Fiji (for urban schools only).

PSEHA has the discretion to approve transport assistance for other students residing outside their school’s home zone as determined necessary”.
Officer Responsible Manager Grant 21.11 Free Education Grant (Recurring Issue) The Free Education Grant (FEG) amount paid to each School is determined by the number of students on the audited school rolls and will not be adjusted for student transfer after the completion of the class audit in Fijian Education Management Information System (FEMIS).

The amount of FEG paid per student is determined by an equitable formula approved by the Permanent Secretary of Education.
We noted the following anomalies with regards to the free education grants: Primary school grant A variance of $2.2 million existed between FMIS general ledger and total amount of primary schools grant recorded by the Grants Section of the Ministry.

Refer to Table 21.8 below for details.


Table 21.8: Variance in Free Education Grant Year 1 – 8 School Grant Amount as per General ledger Grant Paid to Primary Schools as per MEHA Grant Section records (Term 3 2018, Term 1 and 2 2019) Variance Secondary school grant Amount ($) 33,592,150 35,764,533 (2,172,383) A variance of $286,571 also existed between FMIS general ledger and total amount of secondary schools grant paid by the Ministry as per the record maintained by the Grant Section.
Refer to Table 21.9 below for details.
Ministry of Education, Heritage and Arts Section 21: Page 15 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR Table 21.9: Variance in Free Education Grant Year 9 – 13 School Grant Amount as per General ledger Grant Paid to Primary Schools as per MEHA Grant Section records (Term 3 2018, Term 1 and 2 2019) Variance Root cause/Implication Amount ($) 29,600,813 29,887,384 (286,571) The Ministry did not reconcile the FMIS general ledger balance for school grants with the expected grant to be paid according to the school rolls in the FEMIS.
Variances between critical records may indicate the existence of errors and omissions.

Recommendation The Ministry should improve the reconciliation process between the FMIS general ledger and the FEMIS records and investigate and resolve variances identified.

Agreed Management Action The financial year budgetary provisions determine the grants to be paid out.

Ministry will not be in a position to pay grants outside the budgetary provisions.
Grant payments to Schools are subject to Grant payment conditions, therefore only those Schools grants are released that have updated its spending details, Class audits and has submitted in the Annual Financial Statements.

Ministry has started with effect from 2020 with its restructure of the grant management processes.
The School Management Handbook has been reviewed to strengthen the accountability requirements for schools to achieve increased efficiencies and effectiveness with grant funds and the Financial Management Arrangement Policy has been implemented to further enforce this.

The FEMIS system is currently been reviewed and realigned to meet the requirements as stated in the School Management Handbook.
One process review with effect from Term 1, 2020 is to have the grant payment schedule generated directly from FEMIS whereby grant for each school per term is calculated through FEMIS after verifying the class roll and removing non-eligible students.

In order to strengthen the internal control procedures, Ministry with effect from Term 1, 2020 has implemented reconciliations of amounts paid out from FMIS general ledger against grant eligibility for Schools which is calculated from FEMIS.
The reconciliations are done for each school on a termly basis to ensure that the correct amount of grant is paid and any variance is identified, noted and explained.

Officer Responsible Manager Grant 21.12 Administration of Free Education Grant (Recurring Issue) A review of the schools audited financial statement for the Free Education Grant (FEG) for the 2019 financial period revealed that the grants were not always utilised in accordance with the percentage allocations prescribed in the FEG Policy.
Ministry of Education, Heritage and Arts Section 21: Page 16 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR We noted that grants were not always utilised in accordance with the percentage allocations prescribed in the FEG Policy.

Schools had exceeded the percentage allocations.

Refer to Tables 21.10 and 21.11 for more details.

Table 21.10: Primary schools – grants not utilised as per FEG Policy School Registration No.
Administration/ Management & Office Operations 30% Building and Compound Maintenance IT, Computer Library & Textbooks PEMAC & Science Equipment 20% 15% 10% 10% Stationeries Table 21.11: Secondary schools - grants not utilised as per FEG Policy School Registration No.
Administration & Office Operations 30% Building and Compound Maintenance 20% IT, Computer and TEST- Materials 15% Library Books & Textbooks Stationery 15% Physical Education, Arts, Music and Science Equipment 10% 6% 6% 5% 1% 10% 9% 13% 8% 13% 12% 15% 10% Root cause/Implication The schools did not comply with the requirements of the Free Education Grant Policy.
Recommendation The Ministry should regularly monitor the utilisation of the grant to ensure that they are utilised in accordance with the FEG Policy.

Agreed Management Action As per the School Management Handbook 2020, it is the role of the School Head to monitor budget expenditure and prepare Virement requests in consultation with the SMC.

The Ministry has drafted and developed a SOP for monitoring of governance and financial management practices in Schools which is currently under internal consultation.
This SOP will ensure that there is a standardized approach to monitoring of Governance and Financial Management Practices in Schools.

This monitoring is particularly important as it will ensure that school grants are being utilized in the most effective and efficient way, and thereby achieving the maximum impact on teaching and learning.
The Ministry has also drafted and developed a monitoring checklist for school Ministry of Education, Heritage and Arts Section 21: Page 17 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR governance and financial management which will assist Officers in monitoring schools and identifying areas of concerns and red flags of non-compliances to the sections of the School Management Handbook 2020, including utilization of grant in accordance with the percentage allocations prescribed in the FEG policy.
This checklist is also under internal consultation and will be implemented once approved.

The School Management Handbook 2020 clearly outlines the process of virement process for the School to request transfer of funds when they exceed an allocation.

The Ministry is currently in process of automating a virement requests from Schools and approval controls will be built into this to ensure PSE approves it.
The ministry has recently redesigned the virement request form to include a compliance check list to make ensure that all virements requests are following the process set out in the Handbook 2020.
Officer Responsible Manager Grant 21.13 Anomalies in Accountable Advance (Recurring Issue) Where an advance has not been acquitted within seven days of travel, the Principal Accounts Officer shall effect recovery through a salary deduction from the concerned officer’s salary within six (6) fortnights.9 Upon clearance of the advance, the Accounts Officer Payments/Clerical Officer Claims shall update the debtors register, offset the advance account and debit the appropriate expenditure account.10 The audit of the Revolving Fund Account revealed the following: 1.
As at 31 July 2019, the Ministry’s Revolving Fund Account (RFA) had an outstanding balance of $207,739.

The Ministry, on 2 November 2018 requested for a write-off of a balance of $143,158 from Ministry of Economy as the officers concerned were no longer employed by the Ministry.

The unretired advances have not been recovered.

The remaining balance of $64,581 comprised of accountable advances not retired from 2017 to 2019.

2.

Outstanding balance of $23,427 was not retired by staffs issued with advances.
Table 21.12: Outstanding balance of $23,427 not retired EDP No.

95625 85527 Total Outstanding Balance ($) Comments 21,559 Deductions from salary was done till pay 16/2019 .The staff resigned on 02/08/2019 thus outstanding balance of $21,559 was not recovered by the Ministry.

1,868 Deductions from salary was done till pay 19/2019 and the outstanding balance was $1,868.40.

23,427 The RFA balance as at 31/07/20 has reduced to $175,921.
9 Ministry of Education Finance Manual 2013, Section 10.1.14 10 Ministry of Education Finance Manual 2013, Section 10.1.16 Ministry of Education, Heritage and Arts Section 21: Page 18 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR Root cause/Implication Ineffective controls and lack of supervisory checks in the administration of the accountable advances.
Non-retirement of advances on timely basis has resulted in the understatement of expenditure in the statement of Receipts and Expenditure for the year.

Recommendation The Ministry should ensure that accountable advances are retired on timely basis or effect recovery through salary deductions as stipulated in the Ministry’s Finance Manual.

Agreed Management Action The audit comments are noted.
The Finance unit from this financial year conducts weekly meetings and detailed discussion is done to ensure accountable advance progress is noted.

The relevant officers taking advance are reminded of retirement due dates via phone call and email.

In case of late retirement, penalties are immediately charged and recovery processes are implemented.
Officer Responsible Manager Finance 21.14 FHEC Revenue Incorrectly Posted (Recurring Issue) The Assistant Accounts Officer Revenue shall prepare a journal voucher or journal entry input form before posting revenue transactions into the general ledger.

The journal voucher for an adjustment should outline: i. ii.

iii.

reason for raising adjustments; the accounts that should be debited and credited; the amount debited and credited to each account.
11 The Fiji Higher Education Commission (FHEC) collected a total of $44,785 registration fees as at 31/07/19.

It was noted that only $37,490 of the total registration fees received was posted to the FMIS general ledger with the remaining $7,295 not recorded in the general ledger.

Moreover, the Ministry incorrectly posted the registration fees of $9,790to examination result fees allocation12 and $27,700 to the Fiji Teachers Registration Authority allocation13 .
The registration fee allocation14 had nil balance in 2019.

11 Ministry of Education Finance Manual 2013, Section 5.5.5 12 Allocation No.

1-21101-21999-279999 13 Allocation No.

1-21101-21999-230319 14 Allocation No.


1-21101-91012-230319 Ministry of Education, Heritage and Arts Section 21: Page 19 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR Root cause/Implication The issue indicates the existence of inadequate supervisory checks in the accounting function, specifically, the reconciliation and closing of accounts.
As a result, registration fee was understated by $37,490 and examination result fee and Fiji Teachers Registration Authority was overstated by $9,790 and $27,700 respectively.

The Ministry’s total revenue was understated by $7,295.

Recommendation The accounts reconciliation process should be strengthened through improved supervisory checks and monitoring.
Agreed Management Action The officer in-charge of revenue was confused with the two allocations as FTRA allocation is 12110121999230319 and FHEC is 1211019101223031.

Therefore, the officer misposted FHEC revenue to FTRA revenue allocations.

As of to date the officer is able to identify the differences of the two allocations, as a result the FHEC revenue is correctly posted.
Officer Responsible Manager Finance 21.15 Under-utilization of Capital Expenditure Budget (Recurring Issue) The Ministry was appropriated a revised budget of $15.7 million to meet its capital expenditure for 2019.

We noted that the Ministry only utilised $7.1 million or 45% of the total budget resulting in unutilised budget of $8.6 million or 55% at year end.

There was a decline in capital expenditure utilisation rate when compared to 2018.
Root cause/Implication Delay in the closing date for submission of building grant by schools and cumbersome selection process for the high number of applications from schools.

There were also delays in receiving tender approvals.

Recommendation The Ministry should review the processes and procedures governing the utilisation of building grants and other capital expenditure allocations and ensure proper planning and timely implementation of the capital projects.
Ministry of Education, Heritage and Arts Section 21: Page 20 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR Agreed Management Action Underutilization of funds in the 2018/19 financial year was something beyond our control as former PS had instructed through Circular 63 to extend closing date for building grant submission.

This attracted 512 applications from schools with proposal over $52M.
A lot of red tape was instituted in selection process and by the time RIE was approved, the financial year was over.
Officer Responsible Director Asset Management Unit Ministry of Education, Heritage and Arts Section 21: Page 21 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR PART C: ASSESSMENT OF FINANCIAL GOVERNANCE 21.16 Internal Controls During our audits, we assess the design and implementation of controls to ensure that they are suitably designed to prevent, detect and correct material misstatements.
Where audit strategy requires, we also test the operating effectiveness to ensure the internal controls are functioning as designed.

A deficiency occurs when internal controls are unable to prevent, detect or correct errors in the financial statements or where controls are missing.

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

It requires immediate management action.


Internal controls are categorised against the following five components of internal control.
A summary of assessment of key controls based on our audit was as follows: Control Environment Risk Assessment Control Activities    Information & Communication Control  Monitoring Activities  In view of the above, we have assessed the internal controls of the Ministry as: Rating  Ineffective Internal control assessment Significant deficiencies identified in internal controls Ministry of Education, Heritage and Arts Section 21: Page 22 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR 21.17 Submission of FY 2018-2019 Draft Agency Financial Statements On 29 May 2019, Permanent Secretary for Economy issued Circular No.
09/2019 to Permanent Secretaries, Heads of Departments, High Commissioners and Ambassadors in Fiji Foreign Missions in which procedures for closing of 2019 accounts and times were detailed.

When Ministries and Departments achieve the key focus areas highlighted by the Permanent Secretary for Economy by the given dates, they are more likely to prepare accurate and timely draft financial statements for audit.
Based on information received, we have assessed the year-end close process as: Rating Year-end close process assessment  Generally Effective 7 out of 10 key processes completed within due date 21.18 Quality of Draft Financial Statements by entities The extent of audit adjustments made to draft financial statements indicates the effectiveness of an entity’s internal review processes before the accounts are submitted for audit.
We assessed the quality of financial statements by the impact these adjustments had on the operating results or net assets of the entity subject to our audit.

Our assessment for the Ministry was: Rating  Ineffective Quality of draft financial statements assessment No adjustments were required but issues identified resulted in a qualified audit opinion.
Ministry of Education, Heritage and Arts Section 21: Page 23 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR 21.19 Timeliness of draft financial statements To assess the timeliness of acceptable draft financial statements, we have compared the date the draft financial statements were due and the date it was received.
Accordingly, we have assessed timeliness as: Rating  Ineffective Timeliness of draft financial statements assessment Acceptable draft financial statements received after 31 October 2019 21.20 Timeliness of Provision of Management Comments and Signing of Financial Statements To assess the timeliness of provision of management comments and signing of financial statements, we have compared the date the draft management letter and audited financial statements were issued to entity and the date management comments and signed accounts were received.
Accordingly, we have assessed timeliness as: Rating  Ineffective Rating  Effective Timeliness of Management Comments Received After 21 days from issue of Draft Management Letter Timeliness of Signed Financial Statements Received Within 5 days from issue of Financial Statements for signing Ministry of Education, Heritage and Arts Section 21: Page 24 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR APPENDIX 1: ANALYSIS OF GOVERNMENT BOARDING SCHOOL FEES REVENUE School Registration No.
Rate per Term 1825 2538 2541 1638 1504 1057 2392 1310 1215 ($) 50.00 50.00 50.00 70.00 60.00 70.00 60.00 50.00 50.00 School Roll Term 3 of 2018 ($) 456 830 830 118 26 95 241 208 174 Expected Fees Term 3 2018 ($) 22,800.00 41,500.00 41,500.00 8,260.00 1,560.00 6,650.00 14,460.00 10,400.00 8,700.00 School Roll Term 1 of 2019 ($) 429 780 1,010 139 45 116 284 189 180 Expected Fees Term 1 2019 ($) 21,450.00 39,000.00 50,500.00 9,730.00 2,700.00 8,120.00 17,040.00 9,450.00 9,000.00 School Roll Term 2 of 2019 ($) 430 748 960 135 47 105 284 208 174 Expected Fees Term 2 2019 Total Expected Fees ($) 21,500.00 37,400.00 48,000.00 9,450.00 2,820.00 7,350.00 17,040.00 ($) 65,750.00 117,900.00 140,000.00 27,440.00 7,080.00 22,120.00 48,540.00 10,400.00 30,250.00 8,700.00 26,400.00 Total 155,830.00 166,990.00 162,660.00 Less partially paid fees Less Withdrawals Less Arrears of Revenue (Excluding Technical College of Fiji) Less Term 2 boarding fees posted in period 1/2020 Total Expected Fees Balance as per General Ledger Variance 485,480.00 4,578.00 26,190.00 13,878.00 3,940.00 436,894.00 382,380.29 54,513.71 Ministry of Education, Heritage and Arts Section 21: Page 25 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR Section 22 MINISTRY OF HEALTH AND MEDICAL SERVICES Roles and Responsibilities The Ministry of Health and Medical Services is responsible for the promotion of health and well- being, protection of life and prevention & cure of disease, injuries and substance abuse.
The Ministry of Health and Medical Services for the financial year 2018 --2019 was budgeted for the following measurable/verifiable improvement in outcomes for the citizens of Fiji.

• Upgrade nursing quarters and maritime facilities • Increase in service delivery outcome under broad priority areas such as Non-Communicable Diseases, Maternal & Child Health and Communicable Diseases including environmental health and disaster preparedness.
Increase in primary health care outcomes by expanding outreach programmes, improving continuum of care and improving quality and safety standards at health facilities.

Increase in availability and accessibility of medicinal products and medical equipment to ensure effective service delivery.
• • Table of Contents PART A: FINANCIAL INFORMATION ..................................................................................................... 3 22.1 Audit Opinion ............................................................................................................ 3 22.2 Appropriation Statement ........................................................................................... 4 22.3 Trading and Manufacturing Account ......................................................................... 6 22.4 Trust Fund Account .................................................................................................. 8 PART B: SIGNIFICANT MATTERS .......................................................................................................... 11 22.5 Limitation of scope with records not provided (Recurring Issue) ............................. 11 22.6 Poor Records Management .................................................................................... 13 22.7 Variance between FMIS GL and Payroll Report (Recurring Issue) ......................... 14 22.8 Other Payroll Anomalies ......................................................................................... 15 22.9 Significant Payment of Overtime (Recurring Issue) ................................................ 16 22.10 Significant Savings in Capital Budget (Recurring Issue) ......................................... 17 22.11 Absence of contract between the Ministry and Service Providers ........................... 19 22.12 Other non-compliance with the Finance Manual ..................................................... 21 22.13 Expenditure Charged to Wrong Allocation (Recurring Issue) .................................. 22 22.14 Misallocation of Revenue ....................................................................................... 22 22.15 Condition of Health Facilities .................................................................................. 23 22.16 Anomalies - Cardiology Services Trust Fund Account ............................................ 26 22.17 Anomalies - Fiji Children's Treatment Trust Fund Account ..................................... 27 22.18 Other Anomalies in Underline Accounts ................................................................. 29 22.19 Anomalies noted in Free Medicine Program (Recurring Issues) ............................. 30 22.20 Fiji Pharmaceutical and Biomedical Services (Recurring Issue) ............................. 32 22.21 Bulk Purchase Scheme (Recurring Issue) .............................................................. 33 22.22 Variance in Pharmaceutical Stock (Recurring Issue) .............................................. 34 22.23 Fixed Assets Register not updated (Recurring Issue) ............................................. 35 22.24 Absence of Risk Management Policy ..................................................................... 36 PART C: ASSESSMENT OF FINANCIAL GOVERNANCE ....................................................................... 38 22.25 Internal Controls ..................................................................................................... 38 22.26 Submission of FY 2018-2019 Draft Agency Financial Statements .......................... 39 22.27 Quality of Draft Financial Statements by entities..................................................... 39 22.28 Timeliness of draft financial statements .................................................................. 40 22.29 Timeliness of Provision of Management Comments and Signing of Financial Statements ............................................................................................................. 40 Ministry of Health and Medical Services Section 22: Page 1 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR POOR RECORDS MANAGEMENT .......................................................................... 41 APPENDIX 22.1: PROCUREMENT ANOMALIES ............................................................................... 42 APPENDIX 22.2: APPENDIX 22.3: EXPENDITURE CHARGED TO INCORRECT ALLOCATIONS .................................. 44 APPENDIX 22.4: AUDIT SITE VISIT – CWM HOSPITAL .................................................................... 46 APPENDIX 22.5: AUDIT SITE VISIT – NAKASI HEALTH CENTRE ..................................................... 50 APPENDIX 22.6: AUDIT SITE VISIT – NAUSORI HEALTH CENTRE .................................................. 50 STORAGE SPACE AT FPBS .................................................................................... 53 APPENDIX 22.7: APPENDIX 22.8: MISSTATED REVENUE IN BPS TMA ..................................................................... 54 APPENDIX 22.9: BPS ITEMS – DIFFERENT CODE & DIFFERENT SELLING PRICE ........................... 60 ITEMS WITH ZERO UNIT COST .............................................................................. 61 APPENDIX 22.10: Ministry of Health and Medical Services Section 22: Page 2 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR PART A: FINANCIAL INFORMATION 22.1 Audit Opinion The audit of the 2019 accounts of the Ministry of Health and Medical Services resulted in a modified audit opinion.
The qualifications were as follows: Operating Fund • • The Ministry recorded Capital Construction expenditures of $21.7 million in the Statement of Receipts and Expenditure for the year ended 31 July 2019.

The Ministry was unable to provide the payment and journal vouchers to support capital expenditures totalling $4.7 million.

As a result, the completeness and accuracy of the capital construction expenditures could not be confirmed.
Unreconciled variances exist between the FMIS general ledger and the Ministry’s payroll report for both Established Staff and Government Wage Earners for $5.1 million and $4.7 million respectively.

Consequently, the accuracy of the Established Staff and Government Wage Earners balances recorded in the Statement of Receipts and Expenditure for the year ended 31 July 2019 could not be established.

Sahyadri Trust Fund Account • There was no movement for the Sahyadri Trust Fund Account during the year.
The opening balance of $20,609 was qualified in the 2018 financial statements as the Ministry was not able to provide a detailed listing of the closing balance of $20,609 which included contributions from the patients and Government’s assistance to approved patients.

As a result, the accuracy and completeness of closing balance of $20,609 reflected in the Sahyadri Trust Fund Account Statements of Receipts and Payments could not be substantiated.
Ministry of Health and Medical Services Section 22: Page 3 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR Cardiology Services Trust Fund Account • • Receipts totalling $26,705 were not recorded in the FMIS general ledger for the Cardiology Services Trust Fund Account.

As a result, the total receipts and closing balances were understated by the same amount at year ended 31 July 2019.
An unreconciled variance of $26,683 exists between the FMIS general ledger and the Bank Reconciliation statement for the Cardiology Services Main Trust Fund Account.

Consequently, the accuracy of the closing balance reflected in the Cardiology Services Trust Fund Account Statement of Receipts and Payments for the year ended 31 July 2019 could not be established.
Fiji Children’s Overseas Treatment Trust Fund • • Expenditures totalling $12,060 were not posted to the FMIS general ledger for Fiji Children's Overseas Treatment Trust Fund Account.

As a result, total expenditure and closing balance were understated by the same amount at year ended 31 July 2019.

An unreconciled variance of $10,586 exists between FMIS general ledger and the Bank Reconciliation statement for the Fiji Children's Overseas Treatment Trust Fund Account.
Consequently, the accuracy of the closing balance reflected in the Fiji Children’s Overseas Treatment Trust Find Account Statement of Receipts and Payments for the year ended 31 July 2019 could not be established.
Other Matters • • • • Internal controls over purchases and procurement, receipting and recording of Trust Fund revenue, reconciliation of accounts and records management were generally weak and if not addressed promptly will result in material misstatements and possible financial losses Internal controls for the Bulk Purchase Scheme Trading and Manufacturing Account over receipting and payments were generally weak.
This relates to price charged that were not in accordance with the approved price list and the understatement of utility costs which is not paid for by the Bulk Purchase Trading and Manufacturing Account.

The list of patients treated under Fiji Children's Overseas Treatment Trust Fund were not made available for audit.
A total of $55.9 million was incurred by the Ministry of Civil Service for the payment of personal emoluments and FNPF for the doctors employed by the Ministry of Health and Medical Services.

The Ministry of Civil Service was responsible for the administration of these expenditures in accordance with the budget approved by Parliament.
22.2 Appropriation Statement The Ministry collected revenue totalling $6.3 million in 2019 and incurred expenditure totalling $273.5 million against a revised budget of $334.9 million and savings of $61.4 million or 18%.

Details of expenditure against the revised budget are provided in Table 22.1.
Ministry of Health and Medical Services Section 22: Page 4 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR Table 22.1: Appropriation Statement for 2019 SEG Item Established Staff & & Wage Government Earners Travel Communication Maintenance Operations Purchase of Goods & Services Operating Grants & Transfers Special expenditure Total Operating Costs Capital Construction Capital Purchase Capital Grants Transfers Total Expenditure Value Added Tax TOTAL Capital & Budget Estimate ($) 134,782,388 Changes ($) (2,123,918) Revised Estimate ($) 132,658,470 Actual Expenditure ($) 130,362,299 Lapsed Appropriation ($) 2,296,171 19,606,078 2,123,918 21,729,996 21,655,372 74,624 6,811,364 407,334 7,218,698 6,514,006 704,692 17,168,763 670,050 17,838,813 15,558,794 2,280,019 67,341,393 792,616 68,134,009 58,690,257 9,443,752 972,520 --- 972,520 696,920 275,600 13,307,176 259,989,682 44,877,058 12,084,800 3,500,000 230,000 2,100,000 (2,100,000) --- --- 13,537,176 262,089,682 42,777,058 12,084,800 3,500,000 6,373,581 239,851,229 21,688,922 5,245,730 74,425 7,163,595 22,238,453 21,088,136 6,839,070 3,425,575 60,461,858 (2,100,000) 58,361,858 27,009,077 31,352,781 14,508,708 334,960,248 --- --- 14,508,708 334,960,248 6,641,710 273,502,016 7,866,998 61,458,232 The budget savings were largely due to the following: 1.
Savings of $2.3 million in Established Staff was due to the high number of vacant positions not filled during the year.

2.

Savings of $2.3 million in Maintenance and Operations was due to processing issues of the biomedical services and spare parts and delay in the time of arrival into the country.

3.

Savings of $9.4 million in Purchase of Goods and Services: i.

Annual procurement plans /estimated time of arrival of orders received were late from abroad; iii.

ii.
ii.

Minor works funding had been centralised to Headquarters for better management and control by Ministry of Economy.

Fund control was strict and funding was only provided if relevant requirements of the Standard Operating Procedures were followed; and For drugs and vaccines, this were roll-over orders which were paid in the first quarter of the 2019/2020 financial year.
This was because of the period dictated by the technical team for orders, space issues in the warehouse, production schedules and expiries that limits the Ministry from having everything delivered as one-off during the year.

This will always be the case as the Ministry has a routine ordering system as and when required.

For bedding & linen, the tender was approved in February 2020 hence funds were not fully utilised.

4.
4.

Grants to the Productive & Family Health Association and National Food and Nutrition Centre were not released resulting in the savings of $275,600 in Operating Grants and Transfers.
The Ministry of Health and Medical Services Section 22: Page 5 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR Memorandum of Agreement for the Productive & Family Health Association was not renewed whilst the National Food and Nutrition Centre now operates under Ministry of Health & Medical Services.

5.

Savings of $7.2 million in Special Expenditure: i.


Most allocations were pledged and were under requisition (‘R’) against donor budget, which were not always approved.

As these were special expenditure funds, expenditure fluctuations affected the trend of utilisation.

ii.

There was a decrease in the number of litigation cases resulting in underutilisation of indemnity charges.

6.
6.

Savings of $21.0 million in Capital Construction was because the budget was utilised based on the progress of individual projects.

Various other factors that resulted in the budget not being fully utilised include delays in processes such as tender, contracts, delays in progress of work and the unfavourable weather condition, unavailability of construction materials and delays in commencement of project.
Most of the major capital works are not within the control of the Ministry as these are administered through the Ministry of Economy’s Construction Implementation Unit (CIU).

7.

Savings of $6.8 million in Capital Purchases: i.

Delay in the tender process for the MRI intended for CWMH.

ii.

Major equipment purchases planned such as the CWMH boiler was delayed due to the tender process.
By the time all processes were completed, the Ministry was unable to utilise the funds due to lapse in funding appropriation.

Another major tender that was not awarded was the for furniture, fixtures and equipment for the new Ba Hospital under the Public Private Partnership (PPP) as there were a misunderstanding by the Ministry on what was to be provided by the incoming company.

iii.
iii.

The Ministry had also budgeted for the incinerators, however, due to the continuous failure of existing incinerators, the Ministry made the decision to explore engaging technical consultants to guide the purchase of appropriate incinerators.

8.

Only the claims for dialysis subsidy received were processed and paid resulting insavings of $3.4 million in Capital Grants and Transfers.
22.3 Trading and Manufacturing Account The Bulk Purchase Scheme (BPS) is the commercial arm of the Ministry of Health’s Fiji Pharmaceutical & Biomedical Supply Centre which has a revolving fund ceiling of $500,000.

The primary purpose of the BPS is to engage in the acquisition and the sale of affordable pharmaceutical products in Fiji.

Since its inception in 1981, the BPS was established to source pharmaceuticals both for the Government and non-government sector.
The volume in terms of the inventory for BPS to sustain gave it the capacity and edge to negotiate for low prices with international suppliers/traders and manufacturers.

These low price have also benefited patients accessing health services via the private sector and non-government organization.
Ministry of Health and Medical Services Section 22: Page 6 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR Table 22.2: TMA - Manufacturing Account – Bulk Purchase Scheme Description Sales Total Revenue Opening Stock of Finished Goods Add: Purchases Less: Closing Stock of Finished Goods Cost of Goods Sold Gross Profit Transferred to Profit & Loss Statement 2019 ($) 498,713 498,713 34,785 415,187 449,972 37,633 412,339 86,374 2018 ($) 464,573 464,573 5,975 338,735 344,710 34,785 309,925 154,648 Table 22.3: TMA - Profit and Loss Statement – Bulk Purchase Scheme Description Income Gross Profit Transferred to Profit & Loss Statement Expenses Salaries and Related Payments Travel Domestic & Communications Lease & Rental Payments Office Up keep & Supplies Special Fees and Charges Total Expenses Net Profit 2019 ($) 2018 ($) 86,374 154,648 44,343 1,234 17,257 173 101 63,108 54,076 1,912 16,514 272 396 73,170 23,266 81,478 Table 22.4: TMA – Balance Sheet – Bulk Purchase Scheme Description Current Assets Cash at Bank Finished Goods VAT Receivable Accounts Receivables Total Current Assets Liabilities Total Liabilities Net Assets Equity Accumulated TMA Surplus TMA Surplus Capital Retained to CFA Net Profit Total Equity 2019 ($) 2018 ($) 508,892 37,633 16,489 11,353 574,367 550,479 34,786 13,545 --- 598,810 --- --- --- --- 574,367 598,810 1,103,016 (551,915) 23,266 574,367 1,069,247 (551,915) 81,478 598,810 Ministry of Health and Medical Services Section 22: Page 7 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR 22.4 Trust Fund Account Trust money is to be accounted for separately from public money and other money.
Trust money is to be kept in a separate bank account pending its withdrawal for use.

The Ministry of Health and Medical Services operated and maintained five main trust fund bank accounts details of which are discussed below.

However, the decision not to extend the Sahyadri contract has led to the closure of the Trust Fund account.
CWM Hospital Staff Amenities The Trust Fund account was set up for the emergency purchases of medicines, consumables or other medical items that staff members urgently require for patient care.

The trust account has a balance of $25,571 as at 31 July 2019.
Detailed statements for trust receipts and payments are provided below: Table 22.5: Main Trust Fund Account – CWM Hospital Staff Amenities Description Receipts Total Receipts Payments Total Payments Net (Deficit) Opening Balance as at 01/08/18 Closing Balance as at 31/07/19 Cardiac Taskforce Account 2019 ($) --- --- 25 25 2018 ($) 4,901 4,901 13,198 13,198 (25) (8,297) 25,596 25,571 33,893 25,596 The Trust Fund account was set up to assist in the catering of annual visit by SDA Open Heart Cardiac Surgery.
Cash donations from sponsors and supporting companies are deposited into this account.

The fund is used for registration fees for doctors, nurses and farewell functions for the Cardiac Surgery team at the end of the visit.

As at 31 July 2019, the account had a balance of $862.
Detailed statements for trust receipts and payments are provided below: Table 22.6: Main Trust Fund Account – Cardiac Taskforce Description 2019 ($) 2018 ($) Receipts Total Receipts Payments Total Payments Net (Deficit) --- --- --- --- --- --- --- 66 66 (66) Ministry of Health and Medical Services Section 22: Page 8 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR Description Opening Balance as at 01/08/18 Closing Balance as at 31/07/19 Fiji Children’s Overseas Treatment Fund 2019 ($) 2018 ($) 862 862 928 862 The Children’s Overseas Treatment Trust Fund was initially established in the 1990s to assist in sending children overseas for operations and other treatments not available in Fiji, before the Ministry established its overseas treatment funding and guidelines.
The source of funds for this account has been donations from sponsors and supporting companies.

Over the years, with the Ministry providing more overseas treatment in addition to other civil society organisations assisting, the fund has been used to procure medicines, consumables, assist families with passports/visa preparation.
The trust account receives donations from local and overseas donors which is used to buy medication and consumables related to children’s treatment not available through government funding.

The balance of this accounts as at 31 July 2019 was $286,473.
Detailed statements for trust receipts and payments are provided below: Table 22.7: Main Trust Fund Account – Fiji Children’s Overseas Treatment Description Receipts Total Receipts Payments Total Payments Net Surplus Opening Balance as at 01/08/18 Closing Balance as at 31/07/19 Cardiology Services Fund 2019 ($) 30,000 30,000 10,476 10,476 2018 ($) 20,774 20,774 16,557 16,557 19,524 4,217 266,949 286,473 262,732 266,949 The Trust Fund was set up for the purchase of expensive cardiology investigation consumables.
These consumables are used for diagnostic and therapeutic angiography.

The source of funds for this account is the fees charged for the cardiology investigations offered.

The closing balance as at 31 July 2019 was $591,745.
Detailed statements for trust receipts and payments are provided below: Ministry of Health and Medical Services Section 22: Page 9 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR Table 22.8: Main Trust Fund Account – Cardiology Services Description Receipts Total Receipts Payments Total Payments Net Surplus/(Deficit) Opening Balance as at 01/08/18 Closing Balance as at 31/07/19 Sahyadri Trust Fund 2019 ($) 139,520 139,520 133,545 133,545 2018 ($) 300,861 300,861 531,149 531,149 5,975 (230,288) 585,770 591,745 816,058 585,770 The Sahyadri Trust Fund was established following the Joint Venture agreement entered into between the government through the Ministry of Health and Sahyadri Speciality Pacific Hospital Ltd in July 2012.
The purpose was to provide various services in cardiology, neurology and joint replacements as well as providing specialised doctors, trained paramedical staff, technicians and other health related speciality services to the general public of Fiji.

The joint venture agreement dated 12 July 2012 expired on 16 September, 2017.
In absence of a formal arrangement between Sahyadri and the Ministry of Health & Medical Services., this Trust account will be closed and the remaining amounts will be transferred to government revenue.

The Trust account had a balance of $20,609 as at 31 July, 2019.

The Ministry was unable to provide a detailed listing of the closing balance of $20,609, which included contributions from the patients and government’s assistance to approved patients.
As a result, the opening balance was a basis of qualification in the 2018 Agency Financial Statements.

An approval for the closure of the Sahyadri Trust Fund was received on 3 June 2020.

All remaining balances in the account will be transferred to the Consolidated Fund Account.
Table 22.9: Main Trust Fund Account – Sahyadri Description Receipts Total Receipts Payments Total Payments Net (Deficit) Opening Balance as at 01/08/18 Closing Balance as at 31/07/19 2019 ($) 2018 ($) 1,190,999 1,190,999 1,509,315 1,509,315 (318,316) --- --- --- --- --- 20,609 20,609 338,925 20,609 Ministry of Health and Medical Services Section 22: Page 10 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR PART B: SIGNIFICANT MATTERS The Audit Act 1969 requires, amongst other things, that the Auditor-General must report on other significant matters which the Auditor-General wishes to bring to the attention of Parliament.
Other significant matters highlighted in this report, include control weaknesses which could cause or is causing severe disruption to the process or on the ability of an auditee to achieve process objectives and comply with relevant legislation.

It is likely that these issues may have an impact on the operations of the Ministry in future, if necessary action is not taken to address them.
It is important to note that the deficiencies detailed in this report were identified during our audit and may have been subsequently resolved by the Ministry.

These have been included in this report as they impacted on the overall system of control of the Ministry as at 31 July 2019.
22.5 Limitation of scope with records not provided (Recurring Issue) The Principal Accounts Officer is responsible for the safekeeping and proper maintenance of all accounting records or documents.1 The Ministry was unable to provide for audit verification critical records such as payment vouchers, invoices, receipts to substantiate expenditures incurred and revenue totalling $5.4 million and $57,018 respectively.

Refer to Table 22.10 and 22.11 for details.
Table 22.10: Expenditures without supporting documents Date Cheque Number SEG 3 –Travel and Communications 320177 320437 26/09/18 21/11/18 10/12/18 11/12/18 15/02/19 03/07/19 03/07/19 320557 320563 320800 321171 321171 Amount ($) 18,586.95 44,967.88 12,733.18 15,151.43 11,735.36 16,096.76 24,093.58 321171 Total 03/07/19 27,645.27 171,010.41 SEG 4 – Maintenance and Operations 14/02/19 14/02/19 14/02/19 16,853.75 16,853.75 16,853.75 39852 39852 39852 25/07/19 49685 Total 14,872.04 65,433.29 Date Cheque Number Amount ($) SEG 7 – Special Expenditures 03/04/19 320947 197,049.67 SEG 8 – Capital Construction 04/12/18 30/10/18 14/02/19 18/06/19 320519 320351 39855 46095 Total Overall Total 1,976,469.70 233,216.00 177,689.77 2,302,922.60 4,690,298.07 5,435,302.87 Date Cheque Number SEG 5 – Purchase of Goods and Amount ($) Services 25/09/18 26/10/18 26/02/18 21/03/19 28/06/19 20/11/18 03/04/19 03/04/19 28/06/19 33097 34441 990000018 282 41254 46877 35296 41868 41868 46893 25,045.87 67,374.60 34,140.54 23,055.05 52,147.94 11,477.06 10,131.63 14,495.41 12,472.00 48681 11/07/19 28/03/19 41518 02/04//19 41949 Total 12,497.09 7,552.29 16,121.95 286,511.43 SEG 6 – Operating Grants & Transfers 20/12/18 37180 25,000.00 1 Ministry of Health Finance Manual 2014, Section 18.1.3 Ministry of Health and Medical Services Section 22: Page 11 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR Table 22.11: Revenue Receipts not provided Period Journal No.
Rental for Official Quarters 29/03/19 Hospital Fees 21/08/18 23/08/18 07/08/18 TR1513 Total TR4532 TR1768 TR1849 Total Health Fumigation 13/09/18 17/10/18 Total Overall Total TR8833 TR5517 Amount ($) 1,371.15 1,371.15 1,009.20 11,870.95 4,646.40 17,526.55 17,736.89 0,383.70 38,120.59 57,018.29 In addition, the following other records were also not provided for audit: SEG 8 – Capital Construction • Contract agreement for the extension of the CWM Maternity hospital (Yanjian Group Ltd); • Public Private Partnership (PPP) Agreements between Aspen and Ministry of Health and Medical Services; • Government Tender Board (GTB) approval document (WSC 1/2018) to Yanjian Group for the Extension of the CWMH Maternity Unit – Civil Works; • Contract between Ministry of Health and Medical Services and Yanjian Group Limited for construction of Navosa Hospital; • Contract between Ministry of Health and Medical Services and Yanjian Group Limited for Navua hospital boundary and fence landscaping; and • Evidence of performance bond could not be verified for the following projects: Navosa Hospital (Yanjian as contractor); Navua hospital for fencing and landscaping works; Extension of CWMH Maternity Unit Civil Works by Yanjian Group Limited and Maintenance of CWM Maternity Unit Washrooms by Rams Maintenance.
Main Trust Fund Account Fiji Children's Treatment Trust Fund Account Bank Audit Certificate; • • Detailed listing of patients who have made payments/contributions in 2018/2019 for Sahyadri Trust Fund Account; and List of patients treated under the Fiji Children's Treatment Fund.

• Root cause/Implication Poor records management where documents have not been properly maintained for ease of reference and to support the expenditures incurred and revenue received.
There is high risk of mismanagement of funds in the absence of adequate audit trail and documentary evidence.

Ministry of Health and Medical Services Section 22: Page 12 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR Recommendations • The Ministry should improve records management to ensure that documentary evidence is maintained, properly stored and are easily made available for audit.
• The Ministry should carry out a review of its accounting function including policies, procedure and the roles and responsibilities of all officers in the Finance Section.

Agreed Management Action The Ministry will ensure that proper record keeping is done, and the requested audit information / documents is provided accordingly.

Improvements have been made to the filing process in Accounts and it envisaged that this will assist in locating the vouchers and receipts and providing these documents.
Officer Responsible Head of Finance, Head of Fiji Pharmaceutical Biomedical Services and Principal Administrative Secretary (PAS) 22.6 Poor Records Management The Principal Accounts Officer is responsible for the safekeeping and proper maintenance of all accounting records or documents.2 We noted that payment vouchers and supporting documents were not properly maintained and stored.

The following were noted: • • • • Payment vouchers were not filed in order.
Difficulties in retrieving documents as EFT and cheque payment vouchers were filed together and the files were not clearly labelled with Cheque/EFT numbers but only with dates.

Documents were stacked on the floor.

The store room was congested with boxes of old records and other items kept in the store room.

Refer to Appendix 22.1 for illustrations.

Root cause/Implication Poor records management increases the risk of fraud and misappropriation in the absence of audit trail.
Recommendations • The Ministry should improve records management by ensuring that documents are organised and filed in chronological order for ease of reference.

• The Ministry should carry out a review of its accounting function including policies, procedure and the roles and responsibilities of all officers in the Finance Section.
2 Ministry of Health Finance Manual 2014, Section 18.1.3 Ministry of Health and Medical Services Section 22: Page 13 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR Agreed Management Action After the destruction of old records till 2012, space has been created.

The cleaning of the records room and filing of records is ongoing.
Officer Responsible Head of Finance 22.7 Variance between FMIS GL and Payroll Report (Recurring Issue) Salaries and wages constitute a major portion of the agency’s budget.

Proper controls over engaging new employees, salary payments and resignations reduce the risk of fraudulent or unauthorised payments, inaccurate payroll reports and invalid pay rates.3 We noted variances between the FMIS general ledger and the Payroll Report for Established Staff and Government Wage Earners.
Refer to Table 22.12 below for details.
Table 22.12: Variances in Payroll FMIS Personal Emoluments as at 31/07/19 Add: Overtime Allowances Relieving Staff Project Staff paid from SEG 5, 6 and 7 Total FMIS GL Less Payroll Report Variance between GL and Payroll Report Root cause/Implication Established Staff ($) 111,991,394 5,969,288 1,072,087 380,908 544,588 119,958,265 114,817,931 5,140,334 Unestablished Staff ($) 18,650,551 890,582 484,219 127,696 -- 20,153,048 24,861,683 (4,708,635) The Ministry’s Finance Manual does not require reconciliation to be performed between the FMIS general ledger with the payroll report.
Recommendations • The Ministry should incorporate into the Finance Manual the requirement to carry out reconciliation of weekly and fortnightly payroll report against FMIS general ledger.

• The Ministry should carry out a review of its accounting function including policies, procedure and the roles and responsibilities of all officers in the Finance Section.
3 Ministry of Health Finance Manual 2014, Part 4, Introductory paragraph Ministry of Health and Medical Services Section 22: Page 14 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR Agreed Management Action The variance that exist in payroll and FMIS system is due to direct payments done for manual payments, reversals and leave compensation which is captured in GL but not in payroll therefore GL is overstated and payroll is understated.
There are some adjustments and misposting also which is captured in GL and not in payroll.

As a way forward we will monitor and reconcile the payroll data against FMIS every fortnightly pay.
Officer Responsible Head of Finance 22.8 Other Payroll Anomalies The salary reconciliation shall be signed by the Head of Salaries and forwarded to the Principal Accountant and endorsed by PSHMS, with a copy to the Ministry of Economy, within one week from the pay date.4 Salaries/Wages for project staff were budgeted under the respective project allocations.
It was noted that a total of $553,900 paid out of the Personal Emoluments (SEG 1) to project staff were not journalised to the respective project allocations in SEGs 5 – 7.

Refer to Table 22.13 for details.


Table 22.13: Project staff paid from SEG 1 EDP Number Salary Amount ($) Correct Allocation (SEG 5) 92837 96150 96916 96939 Total Correct Allocation (SEG 6) 63196 96875 97037 98654 34668 Total 46,627.14 20,506.50 22,215.38 19,041.75 108,390.77 43,296.63 28,605.45 32,038.10 22,215.38 19,041.75 145,197.31 EDP No.
Salary Amount ($) Correct Allocation (SEG 7) 96541 96539 96540 32278 32049 33986 33449 96138 33478 96873 14,428.13 14,428.13 14,428.13 40,553.70 59,945.18 32,038.10 32,038.10 20,506.50 47,684.02 24,261.72 Total 300,311.71 Overall Total 553,899.79 Root cause/Implication The issue indicated the inadequate supervisory checks in the accounting function, specifically, the reconciliation and closing of accounts.
4 Ministry of Health Finance Manual 2019, Section 4.6 Ministry of Health and Medical Services Section 22: Page 15 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR As a result, SEG 1 was overstated by $553,900 and SEGs 5, 6 and 7 were understated by $108,391, $145,197 and $300,312 respectively.

Recommendations • The accounts reconciliation process should be strengthened though improved supervision and monitoring.
• The Ministry should carry out a review of its accounting function including policies, procedure and the roles and responsibilities of all officers in the Finance Section.

Agreed Management Action The irregularities between HRMIS and payroll data is noted.

To strengthen the monitoring process Salaries section will payroll reports to HR to reconcile HRIMS data with payroll to identify any mismatch in records.

This process will be used to update the payroll.


In addition, termination reports will be submitted to HR Unit as well to work on upcoming contract expiry so that employees are paid on time.

Officer Responsible Head of Finance 22.9 Significant Payment of Overtime (Recurring Issue) Salaries and wages constitute a major portion of the agency’s budget.
Proper controls over engaging new employees, salary payments and resignations reduce the risk of fraudulent or unauthorised payments, inaccurate payroll reports and invalid pay rates.5 We noted that officers in the X-ray and Pathology Departments worked excessive overtime with allowances paid were more than double their annual salary.

This was also noted for the 2018 financial year.

Refer Table 22.14 for details.


Table 22.14: Significant payments of overtime allowances EDP Number Annual Salary ($) Total Overtime Allowance Paid ($) 96758 93435 91110 97040 63764 22,528.74 26,283.53 26,283.53 16,832.82 22,215.38 42,496.07 30,255.43 67,483.36 17,786.43 11,950.60 Percentage over Salary 189% 115% 257% 106% 54% *Figures for annual salary, gross salary and total overtime allowance were extracted from payroll system.
5 Ministry of Health Finance Manual 2014, Part 4, Introductory paragraph Ministry of Health and Medical Services Section 22: Page 16 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR Root cause/Implication Due to the lack of staff in this field of work, the officers are required to work overtime, and are on call or pull through the next shift so that public service is not affected.

In addition, vacant positions have not been filled.
Excessive overtime hours worked without rest can lead to fatigue and stress posing significant risk to the quality of services provided by these staffs.

Recommendation The Ministry should ensure that any vacant positions that relate to X-ray and Pathology Departments are filled to minimise excessive overtime work.

Agreed Management Action The high overtime cost incurred is from the Nursing and Health Allied cadres.
Some contributing factors are shortage of staff and absence of nurses on shift due to sick leave.

Overtime is payable in this instance for other nurses recalled to cover the shift.

As a way forward management will need to work closely with the HR Unit to ensure that posts are filled to avoid shortage.

Director of Nursing will need to re-organise the staff roster and re- direct work to accommodate short fall of nurses in other wards affected due to absence of nurses on sick leave.
Officer Responsible Head of Finance and Head of HR 22.10 Significant Savings in Capital Budget (Recurring Issue) Each year the Appropriation Act and the Budget Estimates set out details of the appropriations that Cabinet approves for spending by each agency.6 We noted significant savings from the budgetary allocations for capital construction and capital purchases.

Refer to Table 22.15 for details.
Table 22.15: Capital expenditure allocations with significant savings Allocation Account Description Capital Construction 1-22101-22101-080224 Divisional Deployment Projects 1-22101-22101-080229 Construction of Biomedical Equipment 1-22101-22101-080422 New Naulu Health Centre 1-22101-22101-080423 Upgrade & Maintenance of Urban Hospitals and Inst Quarter Revised Budget ($) Actual Expenditure ($) Savings ($) Savings (%) 1,000,000 417,322 582,678 58% 250,000 400,000 0 0 250,000 100% 400,000 100% 1,000,000 403,387 596,613 60% 6 Finance Instructions 2010 – Section 7 Ministry of Health and Medical Services Section 22: Page 17 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR Allocation Account Description 1-22101-22101-080424 Maintenance of Health Centres & Nursing Stations 1-22101-22101-080425 Extension of CWM Emergency Department 1-22101-22101-080426 Extension of CWM Maternity Unit 1-22101-22101-080428 Construction of Lodoni Health Centre 1-22101-22101-080429 Construction of Ba Hospital Final Payments 1-22101-22101-080431 Upgrade of Valelevu Health Centre 1-22101-22101-080432 Upgrade of Valelevu Health Centre 1-22101-22101-080435 Navua Hospital Boundary – Fence/Landscape 1-22101-22101-080437 Construction of Navosa Sub- Divisional Hospital 1-22101-22101-080499 Upgrade of Labasa Hospital 1-22101-22101-080699 Fiji Centre for C D Control 1-22401-85101-080999 Maintenance FPBS Property Capital Purchases Capital Construction 1-22101-22101-090133 Purchase of Equipment – Urban Hospital 1-22101-22101-090153 New Equipment HC, NS 1-22101-22101-090174 1-22401-85101-090308 Biomedical Supplies Urban ICT Infrastructure & Network Hospital 1-22401-85101-090309 Dental Equip Purch Hospitl & Sub Divisional Hsp 1-22401-85101-090313 MRI Machine CWM Total Root cause/Implication Revised Budget ($) Actual Expenditure ($) Savings ($) Savings (%) Delay in the tendering process resulting in the funds not being utilised at year end.
In addition, planning processes employed by the Ministry for capital expenditures are weak and not working as expecting.

Recommendation The Ministry should review the current planning process for capital projects and strengthen procurement timeliness and compliance to the procurement regulation.

Agreed Management Action The budget in the capital projects are mostly allocated based on the project estimates (best case scenario) however, the expenditure is based on the: 1.
Actual progress of works in Capital construction and 2.

Actual procurement of equipment in capital purchases.

Ministry of Health and Medical Services Section 22: Page 18 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR Proper planning processes will be put in place to ensure maximum use of funding allocated.

Officer Responsible Principal Administrative Secretary (PAS) and Asset Management Unit (Headquarters).
22.11 Absence of contract between the Ministry and Service Providers Public tenders must be called for any procurement of goods, services or works valued at $50,001 or more, unless a Tender Board has approved an exemption in accordance with Procurement Regulation 30-(1).7 The Board may approve that tenders procedures be waived where there is only one supplier capable of supplying the goods, services or works.8 A written contract or agreement must be entered into with the approved tenderer for the supply of the goods, services or works tendered.9 All property, plant or equipment with a value in excess of $2,000 or more must be recorded in the - (a) asset module of the financial management information system; and (b) asset register for those without the financial management information system.10 Laundry Service The Ministry engaged a laundry service provider for the CWM Hospital after the Boiler Room caught fire on 26th May 2019.
Complying with the requirements of the procurement regulation in relation to the tender process for a new supplier was waived by the Minister for Economy due to the urgency of the laundry services.

It was noted that there was no written contractual agreement established when the supplier was engaged by the Ministry.

Payments made to the Laundry Services from June 2019 to October 2020 totalled $814,228.
Bio-medical Supplier Two payments totalling $330,000 (VIP) was made to a company for the supply of six (6) operating theatre lights with steel brackets for the Lautoka Hospital.

It was noted that these payments were made in the absence of a written contract agreement.

Furthermore, only three operating theatre lights were physically verified during the audit to have been delivered at the minor operating theatre.
The Hospital Head Administrator confirmed that no other operating lights was received by the hospital, except for the three already installed.

We were also unable to verify whether the theatre lights and steel brackets have been recorded in the Fixed Assets Register as it was not provided during the audit.
Supplier of oxygen and medical air 7 Ministry of Health and Medical Services Finance Manual 2014 Section 2.3.1 8 Procurement Régulations Section 48(1) 9 Finance Manual 2014 Section 2.4.17 10 Finance Instructions 2010, Section 46 (1) Ministry of Health and Medical Services Section 22: Page 19 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR We noted that there was no written contract agreement established with the supplier of oxygen and medical air.
Payments made to the vendor during the 2019 financial year totalled $3.8 million.

The vendor was the sole supplier of oxygen, medical air and refill of liquid oxygen.

The Ministry on 21/06/2019 paid the same vendor $129,722 for the temporary relocation and permanent infrastructure upgrade of medical oxygen main as part of the CWM Maternity Extension & Upgrading project.

As of 21/06/20, the Company is yet to provide upgraded appropriate sized tank to the Ministry.
Root cause/Implication The expectations of the Ministry of the service providers and the obligation of each party including the purpose for which the payments are made are not explicitly expressed in the absence of a written contract agreement.

Inadequate controls over recording of fixed assets which could result in the inability of the Ministry to identify items which are missing or unserviceable.
The risk of unauthorised purchases and collusion with suppliers is high when proper procurement procedures are not complied with.

Recommendations The Ministry should ensure that: • • • Contract agreements are established between the Ministry and the service providers before payments are made.

Fixed assets purchased are recorded in the Fixed Assets Register in accordance with Section 46 of the Finance Instructions 2010.

Investigate the non-delivery of operating theatre lights that have been fully paid.
Agreed Management Action Laundry – A contract agreement with the service provider will be signed under new tender.

Due to emergency, Waiver approval was sought by CWMH thus there was no contract agreement in place.

Agree that all assets be entered in the Asset Register as and when they are purchased - Ministry will be working with Ministry of Economy to improve this.

A new National Fixed Asset Register exercise is being undertaken by the Ministry of Economy.
This will resolve the updating of the Asset registers.

Agree with the OT lights issue to be investigated.

The Ministry will ensure that Tender Board approval is sought for the procurement of goods and services valued more than $50,000.
Officer Responsible Principal Administrative Secretary (PAS) Asset Management Unit and Head of Finance Ministry of Health and Medical Services Section 22: Page 20 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR 22.12 Other non-compliance with the Finance Manual The Accounting Head or accounts supervisor must not certify a payment as correct unless they are satisfied that: i. ii.

iii.

iv.
v. it is in accordance with an LPO, indent, contract, invoice or other authorisation; there is documentation that the goods, services or works have been received; sufficient uncommitted funds are available for payment of the account; the account is not fraudulent and has not been previously paid; the expenditure account it is charged to be correct.11 From the samples for expenditure records audited, the following anomalies were noted: • • • • • • • Payment vouchers and supporting documents were not stamped “PAID”.
Purchase orders were not attached to payment vouchers.

There were no delivery dockets to evidence delivery of goods/services.

Pro-forma invoices were used to facilitate payments of goods and services.

Officers authorising payments above approval limits.

Copies of National Health card to confirm that patients were recipients for kidney dialysis were not disclosed.

Dialysis report sheets of patients not provided.

Refer to Appendix 22.2 for details.


Root cause/Implication Weak supervisory checks within the accounting function resulting in non-compliance with payment/procurement procedures.

Recommendations The Ministry should strengthen supervisory control and monitoring with the accounting function to ensure compliance with the requirements of the Finance Manual.
The Ministry should carry out a review of its accounting function including policies, procedure and the roles and responsibilities of all officers in the Finance Section.

Agreed Management Action The Ministry will ensure that the procurement guidelines are followed.

Proper checks are done by PAO/SAO/AO to ensure all SOP's are filled in and is strict on processing the request for payments and procurement.

Segregation of duties is also followed at the Ministry.
Officer Responsible Head of Finance 11 Ministry of Health and Medical Services Finance Manual 2014, Section 2.8.5 Ministry of Health and Medical Services Section 22: Page 21 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR 22.13 Expenditure Charged to Wrong Allocation (Recurring Issue) Details of each invoice or other source document for a payment must be promptly and accurately entered into the fields provided, these includes – (a) the correct tax code; (b) the ledger account it is charged to.
We noted that expenditures were posted to wrong allocations in the FMIS general ledger.

Refer to Appendix 22.3 for details.

Root cause/Implication The Ministry did not rectify the misallocation which indicated that supervisory checks were not carried out by the accounting function.

Recommendation The Ministry should ensure that supervisory checks with the accounting function is strengthened to ensure that all transactions are posted to the correct allocations in the FMIS general ledger.
Agreed Management Action The Ministry has restricted access to allocation by officers.

Officers can only access allocations for their respective cost centres.

Any mis-postings are journalised on a timely manner.
Officer Responsible Head of Finance 22.14 Misallocation of Revenue After reconciling details in the cashbooks, the accounts supervisor shall submit the cashbooks, duplicate receipts and lodgement forms to the data entry clerk for posting into the General Ledger.12 We noted from the sample selected that revenue receipts were charged to incorrect allocations in the FMIS general ledger.

Refer to Table 22.16 for examples.

Table 22.16: Misallocation of revenue Date Receipt No.
27/08/18 678822 (TR4220) 27/08/18 678824 – 678825 Amount ($) Description 43.55 Health Fees - Sawani Village 87.10 Health Fees - Nagaivatu and Viria Village Allocation Revenue Receipt was Posted to Hospital Fees 1-22101-22999-230312 Hospital Fees 1-22101-22999-230312 Correct Allocation License & Others 1-22101-22999-230499 License & Others 1-22101-22999-230499 12 Ministry of Health Finance Manual 2019, Section 5.5.3 Ministry of Health and Medical Services Section 22: Page 22 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR Date Receipt No.
(TR4220) Amount ($) Description Allocation Revenue Receipt was Posted to Correct Allocation 28/08/18 678829 521.85 Health Fees - Princeway (TR4220) Ltd - Nausori 11/09/18 704366 1148.90 Quarantine fees (TR9162) 31/10/18 788715 4,919.23 Quarantine Fees (TR0174) 05/11/18 7788721 (TR0187) 2,795.56 Fiji Health Radiation Board Fees 02/08/18 682779 – 3,735.60 Reimbursement of 682780 (TR3334) medical standby for COP 23 and birth notification 30/08/18 678836 – 168.02 Building fees Hospital Fees 1-22101-22999-230312 Health Levy 1-22101-22999-229999 Health Levy 1-22101-22999-229999 Health Levy 1-22101-22999-229999 Health Levy 1-22101-22999-229999 License & Others 1-22101-22999-230499 Health Fumigation & Quarantine 1-22101-22999-230311 Health Fumigation & Quarantine 1-22101-22999-230311 Hospital Fees 1-22101-22999-230312 Hospital Fees 1-22101-22999-230312 Health Levy 1-22101-22999-229999 License & Others 1-22101-22999-230499 678837 (TR7230) 13/07/18 675739- 675741 (TR4334) 2,608.00 Health license, medical report and imprest reimbursement Rental –Official Quarters 1-22101-22999-270202 License & Others 1-22101-22999-230499 Hospital Fees 1-22101-22999-230312 Root cause/Implication The Ministry did not rectify the misallocation which indicated that supervisory checks were not carried out by the accounting function.
Recommendations The Ministry should ensure that supervisory checks with the accounting function is strengthened to ensure that all transactions are posted to the correct allocations in the FMIS general ledger.

The Ministry should carry out a review of its accounting function including policies, procedure and the roles and responsibilities of all officers in the Finance Section.
Agreed Management Action The revenue clerks at various divisions and sub-divisions were advised to be vigilant in terms of postings of revenue allocation.

The revenue clerks from HQ will conduct regular visits to the cost centres to conduct appropriate checks and also conduct on the job training on revenue allocations and postings.
Officer Responsible Head of Finance 22.15 Condition of Health Facilities During the audit, a number of health facilities were visited with the following defects noted: Ministry of Health and Medical Services Section 22: Page 23 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR CWM Hospital Maternity Rest room - Defects were noted at the CWMH Maternity restroom after maintenance was completed on 7 August, 2019.
Refer to Appendix 22.4 for illustrations captured during the site visits.

Inpatient Pharmacy • • • • • • A faulty refrigerator was used resulting in medicine packets getting wet from ice forming inside the refrigerator.

Gallons of chemicals were stacked next to the refrigerator.

Crisper drawer was used to collect Sodium Hypochlorite that was leaking from its gallon.

Chemical was leaking onto the floor.

Damaged ceiling with ceiling lights also not in working condition.
Cables were exposed to water leaking from the ceiling.

Blood Bank & Cytology lab • • Machines in the Cytology Lab, Blood Bank Unit and Donor Blood Service were not operational.

Damaged seats used by the public in the Donor Blood Service Unit.

Mammogram Screening Lab • • Damaged open ceiling causing water to sip into the Lab.

Mammogram machine covered in plastic to keep away water leaking from the open ceiling.

Dental unit - Water leaks into the Dental Department when it rains.
Kitchen - Damaged ceiling in the dietician's room.

Operating theatre • • • • Nakasi Centre - 11/06/20 Health Refer Appendix 22.5 for illustrations Open ceiling at the new operating theatre recovery room.

Collapsed ceiling at the new operating theatre.

The Health Centre has only one suction machine in use and is not always operational [Suction machines are used to remove substances such as blood, saliva, mucus and vomit from a person’s airway].
Electrical power points - Most of the power points are not operational and at times affects operations.

Nausori Centre – 11/06/20 Health Outpatient Refer Appendix 22.6 for illustrations • • The building is old requiring major renovations.

The air-conditions were damaged and not working in rooms where there were x- ray machines and computers.

The rooms were also stuffy and dusty.

• Drain blockage and flooding - The outpatient area faces an issue of drain blockage and flooding during heavy rains.
This leads to minor flooding in the waiting area and poses a health risk to patients.

Ministry of Health and Medical Services Section 22: Page 24 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR Maternity Unit • Renovation work needed in the drainage, sewerage, and air conditioning - The maternity unit has a major sewerage and drainage problems.
A lot of the sinks, taps and toilets were not working and there was a leak in the sewerage system which poses a major health risk.

In addition, air conditioners were damaged and have not been working for a while.

Windows were also without louver blades.

Lack of Auto Clave Machine - The maternity hospital is in need of a new auto clave machine.

An auto clave machine is used to sterilize equipment used in delivery to remove bacteria.
Telephone extensions issue - Most of the telephone extensions were not working and have not been for some time and is affecting operations.

• • Dental - The dental department needed renovations and a new air conditioning unit to ensure that the environment is conducive for the staff and patients.

Air conditions have not been working for some time.

Root cause/Implication Lack of monitoring and coordination between the relevant units on the upkeep, maintenance, refurbishment of hospitals and facilities.
Recommendations • The Asset Management Unit should strengthen its monitoring process to ensure that the hospitals and its facilities are maintained.

• The Asset Management Unit should strengthen its monitoring process to ensure maintenance and refurbishment works are of good quality as agreed to in the contract.
Agreed Management Action As a way forward, it would be appropriate if the unit (AMU (HQ)) are given the role to monitor and initiate /identify areas for improvements to Cost Centres as recommended herewith.

Currently there were resource constraints at the Asset Management Unit to monitor all the minor works projects at all health facilities.

Nadi Sub-divisional Hospital - The anomalies identified herewith were Issues were also highlighted by the Ministry of Infrastructure (MoIT) team to the contractor.
It has now been agreed that the contractor will not paid for all the incomplete works.

Officer Responsible Principal Administrative Secretary (PAS), Asset Management Unit (Headquarters) & SAO Western (Divisional Medical Officer West).
Ministry of Health and Medical Services Section 22: Page 25 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR 22.16 Anomalies - Cardiology Services Trust Fund Account Within 5 days after the end of each month, the trust officer shall prepare a trust reconciliation to reconcile trust account balances to the ledger total and the trust bank account.13 All revenue receipted to be updated at Hospital and Divisional Level in the FMIS on a daily basis for reporting and audit purposes.14 Any errors or misallocations must be immediately adjusted by way of journal vouchers.15 We noted the following anomalies: • • • • • Reconciliation of accounts were not performed on a monthly basis.
Consolidated reconciliations statements were prepared for the months of August 2018 to May 2019 and June to July 2019 on 02/07/19 and 13/08/2019 respectively.

Receipts totalling $26,705 were not posted to the FMIS general ledger.

Consequently, there was a variance between the FMIS general ledger cash account and balance as per bank audit certificate.
Patients earning below $16,000 per annum are exempt from paying for angioplasty treatment.16 There was no procedure in place for Cardiology to verify the earnings of patients coming in for treatment.

Monthly reconciliation was not performed to reconcile the total fees collected with the number of patients treated.

Patient register book was not updated for patients who have paid their fees.

Audit could not determine if patients have been treated or not.
Root cause/Implication Delay in performing account reconciliations will result in the accumulation of errors that may not be identified in a timely manner.

Proper procedures were not in place requiring the verification of whether patients meet the income eligibility criteria, as this is the basis for charging applicable fees.

In addition, fees collected were not reconciled against the number of patients treated.

Failure to implement proper procedures increases the risk of fraudulent activities.
Recommendations • Supervisory function in the Accounts Section should be improved to ensure that monthly reconciliation of accounts is performed on time, transactions are correctly posted in the FMIS general ledger and proper procedures established and complied with.

• The Ministry should carry out a review of its accounting function including policies, procedure and the roles and responsibilities of all officers in the Finance Section.
13 Ministry of Health Finance Manual 2014, Section 15.4.1 14 Ministry of Health Finance Manual 2014, Section 5.5.10 15 Ministry of Health Finance Manual 2014, Section 16.3.4 16 Legal notice No.

46 (2013) Ministry of Health and Medical Services Section 22: Page 26 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR Agreed Management Action The CWM Hospital is now improving the preparations and submissions of reconciliations on a monthly basis.
They will also ensure that all transactions (Revenue) are posted in the FMIS general ledger.

The current reconciliation submitted to Ministry of Economy is for the month of September 2020.
Officer Responsible Head of Finance 22.17 Anomalies - Fiji Children's Treatment Trust Fund Account Within 5 days after the end of each month, the trust officer shall prepare a trust reconciliation to reconcile trust account balances to the ledger total and the trust bank account.17 Immediately after payment has been effected, the cashier must stamp “paid” on all vouchers and supporting documentation to avoid any double payments.18 All payments, including VAT, must be immediately recorded in the financial management information system and an Expenditure Ledger.19 The officer requesting the use of the funds shall complete the Request for Funds form and submit to the office of Medical Superintendent (MS).20 Any errors or misallocations must be immediately adjusted by way of journal vouchers.21 The Children’s Overseas Treatment Trust Fund was initially established in the 1990s to assist in sending children overseas for operations and treatments not available in Fiji before the Ministry of Health and Medical Services had established its overseas treatment funding and guidelines.
We noted the following anomalies: • • • Reconciliation of the trust fund accounts were not performed on a monthly basis.

One consolidated reconciliation was prepared on 31/07/19 for the months of September 2018 to May 2019 and another prepared on 21/05/2020 for the months of June and July 2019.

List of patients who have made payments/contributions during the year 2018/2019 and details of consumables purchases for patients and list of patients treated/diagnosed were not provided for audit review.
Payment vouchers and supporting documents were not stamped “PAID”.

Refer to Table 22.17 for examples.

Table 22.17: Payments vouchers and supporting documents not stamped “PAID” Date 22/02/2019 29/05/2019 31/07/2019 01/03/2019 18/09/2018 Total Cheque No.

261 263 266 262 247 Amount ($) 2,074 1,337 1,622 159 5,068 10,260 17 Ministry of Health Finance Manual 2014, Section 15.4.1 18 Ministry of Health Finance Manual 2014, Section 2.8.7 19 Finance Instructions 2010.
Section 15 20 CWMH SOP for use of Trust Funds, Section A, II,(a) 21 Ministry of Health Finance Manual 2014, Section 16.3.4 Ministry of Health and Medical Services Section 22: Page 27 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR • Payments totalling $12,060 were not posted to the FMIS general ledger.

Refer to Table 22.18 for details.

Table 22.18: Payments not posted to FMIS GL Date Cheque No.
Amount ($) 06/12/18 253 04/01/19 259 15/02/19 260 25/04/19 248 26/02/19 261 29/05/19 263 31/07/19 266 01/03/19 262 Total 855 5,232 360 420 2,074 1,337 1,623 159 12,060 • As at 31/07/19, a variance of $10,586 existed between the FMIS general ledger of $286,472 and bank reconciliation statement balance for the trust Children’s Overseas Treatment Trust Fund account of $275,886.
Root cause/Implication Weak supervisory function in the Accounts Section resulting in delays in performing reconciliations of accounts with errors and omissions not detected in a timely manner.

Non-compliance with the Standard Operating Procedures for CWMH Trust Funds increases the risk of unauthorised/double payments.
Recommendations • Supervisory function in the Accounts Section should be improved to ensure that monthly reconciliation of accounts is performed on time and requirements of the Finance Manual and complied with.

• The Ministry should carry out a review of its accounting function including policies, procedure and the roles and responsibilities of all officers in the Finance Section.
Agreed Management Action The audit recommendation is noted and CWMH, who manages the Fiji Children’s Treatment Trust fund account, will ensure that posting are done to the FMIS General on a monthly basis, and reconciliations are prepared and submitted on a regular and timely basis.

Reconciliation submitted till September 2020.


Officer Responsible Head of Finance Ministry of Health and Medical Services Section 22: Page 28 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR 22.18 Other Anomalies in Underline Accounts The Principal Accounts Officer shall certify and date the reconciliation.
If required by the Ministry of Economy, the reconciliation statement shall be forwarded to them by the date specified by the Ministry.22 Within 3 days of receiving the monthly general ledger reports from the Ministry of Economy, the Senior Accounts Officer Ledgers shall reconcile the ledger balances to the general ledger reports and prepare a ledger reconciliation statement.23 We noted the following anomalies: • Reconciliation of these underline accounts were not performed on time resulting in the late submission of reconciliation statements to the Ministry of Economy for Interdepartmental Clearance Account (IDC), BLC Account, Imprest and Drawings Accounts.
Refer to Table 22.19 for details.
Table 22.19: Late submission of monthly reconciliations to Ministry of Economy Month Date Submitted to Ministry of Economy Months Lapsed Month Date Submitted to Ministry of Economy Months Lapsed Drawings Western Division 20/11/18 August 2018 20/11/18 September 2018 21/01/19 November 2018 05/03/19 January 2019 July 2019 January 2019 Drawings Northern Division 20/11/18 August 2018 20/11/18 September 2018 21/01/19 November 2018 02/02/19 December 2018 January 2019 July 2019 05/03/19 10/09/19 3 2 2 2 2 3 2 2 2 2 2 IDC Account August 2018 March 2019 July 2019 05/10/18 08/05/19 02/09/19 Imprest Account August 2018 September 2018 February 2019 March 2019 05/10/18 22/08/19 22/08/19 08/05/19 BLC Account August 2018 – April 2019 21/05/19 20/11/18 10/09/19 Drawings Headquarters August 2018 September 2018 10/09/19 October 2018 November 2018 21/01/19 05/03/19 January 2019 02/10/19 July 2019 2 2 2 2 11 6 2 9 3 11 11 2 2 3 22 Ministry of Health Finance Manual 2014, Section 16.3.7 23 Ministry of Health Finance Manual 2014, Section 16.3.3 Ministry of Health and Medical Services Section 22: Page 29 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR • • One consolidated reconciliation statement was prepared for BLC account for the nine months from August 2018 to April 2019 and was submitted to Ministry of Economy on 21/05/2019.
No evidence that the drawings account reconciliation statements were endorsed by the Principal Accounts Officer, which indicated that reconciliation statements were not checked for accuracy and completeness.

Refer Table 22.20 for details.


Table 22.20: Drawings Account reconciliation not checked by PAO Headquarters Western Division December 2018 December 2018 January 2019 February 2019 July 2019 January 2019 February 2019 March 2019 Northern Division January 2019 February 2019 July 2019 Root cause/Implication Lack of monitoring and supervision in the Accounts Section is a contributing factor to the above.
Delay in performing reconciliations of accounts will result in errors and omissions not detected in a timely manner.

Recommendations • Supervisory function in the Accounts Section should be improved to ensure that monthly reconciliation of accounts is performed on time and requirements of the Finance Manual and complied with.

• The Ministry should carry out a review of its accounting function including policies, procedure and the roles and responsibilities of all officers in the Finance Section.
Agreed Management Action All reconciliations are prepared and submitted to Ministry of Economy on a monthly basis, and are certified by the Principal Accountant and endorsed by the Permanent Secretary.

Officer Responsible Head of Finance 22.19 Anomalies noted in Free Medicine Program (Recurring Issues) The program aims to provide quality healthcare with easy access to price-controlled medicines, including for non-communicable diseases, free of charge to all Fijians who earn less than $20,000 a year.
The Ministry was allocated a budget of $10 million for the program out of which a total of $8.7 million was spent.

Audit reviews noted the following: Ministry of Health and Medical Services Section 22: Page 30 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR • • It is not a requirement for pharmacies to submit reports to the Ministry at regular intervals on the stock of medicines dispensed and the balance at the end of that period.
Therefore, the Ministry is unable to determine, at any point in time, how much stock is available at each pharmacy.

The Ministry purchased $364,240.50 worth of medicine that were not included in the free medicine program list.

Refer to Table 22.21 for details.
Table 22.21: Medicines procured from the Free Medicine Scheme Date Cheque Number Payee 27/03/2019 44908 Alphamed Pty Ltd 29/03/2019 44936 02/04/2019 44979 Nordisk Novo Pharmacauticals Limited South Austral Pty Invoice Number 19651 19663 19729 19812 19844 Description Adreline Injection 1MG/ML, Pack size- 5AMPS/PK.UNIT Clexane Grad/PFS (Enoxapirin Injection) 80mg Minirin 4MCG x 1ML x 10 Triumeq tablets (Dolutegravir/Abacavir/Lamivudine) 19869 Diflucan Vial IV (Fluconazole Injection) 100mg/50mL 1's 9820003037 Mixtard 30 100 IU/ML 1x10ML 9820003071 Mixtard 30 100 IU/ML 1x10ML Protaphane 100 IU/ML 1x10 ML 9820003048 Mixtard 30 100 IU/ML 1x10ML 6577 8690 9341 10026 10108 Imipramine tab 25mg pack of 28 tabs Water for injection, 100ml ECG Gel tube, 250ml, box of 40; ECG Gel tube Glutaraldehyde 2% solution, 5L; Chlorhexidine/Cetrimide 1.5%, 500ml; Povidone Iodine, 10% Aqueous Solution, 500ml Etchant Liquid Bottle 7mL Total Amount ($) 6,763.64 11,836.36 69,962.12 4,935.94 47,272.73 4,804.55 12,944.98 51,779.94 51,779.94 4,218.03 20,439.91 8,317.81 65,472.10 3,712.45 364,240.50 • • There are no written agreements with private pharmacies engaged in the Free Medicine Scheme.
The Ministry has not disclosed in the notes to the financial statements, the monetary value of closing stock of medicines held by private pharmacies engaged in the Free Medicine Scheme as at 31 July 2019.

Root cause/Implication In the absence of a reporting requirement from the pharmacies on the balance of medicines held, timely replenishment of medicine would not be done by the Ministry.

This can result in the public not being able to access free medicine when required.
The purchase of other medicines apart from those in the free medicine program means that funds were utilised for purpose other than intended.

In the absence of written agreements, the expectations of the Ministry in meeting the objectives of the scheme is not clearly communicated.

The Ministry may not be able to hold private pharmacies responsible for not achieving the objectives of the scheme.
Ministry of Health and Medical Services Section 22: Page 31 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR Recommendation The Ministry should review/reform the scheme and develop guidelines on stock management, utilisation of budget, and contract agreements with pharmacies.

Agreed Management Action The FMP reform is currently underway, and is expected to roll out in phases.
The pilot roll out had already initiated and the second revised phase will be initiated in the next few months.

Under this model (second phase), retail pharmacies will be dispensing FMP listed products from their own inventory and billing Ministry of Health and Medical Services for reimbursements.

This will address majority of the issues concerning stock availability with retailers.
In the next few weeks, price ceilings will be determined for the FMP products which the retailers will adhere to, while dispensing products and submitting their claims to the Ministry post roll out.

SOP's have already been developed and contracts will also be in place for this revised model.

Second phase roll out will be initiated with contracts too.
Officer Responsible Head of Fiji Pharmaceutical and Biomedical Services 22.20 Fiji Pharmaceutical and Biomedical Services (Recurring Issue) Storage of inventories shall be the responsibility of the storekeepers.

The storekeeper must ensure that: i. ii.

iii.

iv.
iii.

iv.

v. adequate space is available for incoming stock as and when required; storage facilities are properly secured; stocks are kept in an orderly manner allowing for safe access; stocks are handled with care and well stored so as to reduce the risk of damage; and quantity of stock is closely monitored to avoid excess holdings or shortages.24 We noted the need for additional proper storage space for pharmaceuticals.

Refer to Appendix 22.7 for illustrations.


Root cause/Implication Lack of space has resulted in pharmaceuticals being stored in areas not conducive for storage.

Recommendation The Ministry should consider additional proper storage space to cater for the increasing stock of pharmaceuticals.
24 Ministry of Health Finance Manual 2014, Section 8.2.1 Ministry of Health and Medical Services Section 22: Page 32 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR Agreed Management Action Through the end to end review of the supply chain completed in December 2019, the need for additional storage was recommended therein.

A mini Warehouse will also be constructed at the Northern Division by JICA.
Officer Responsible Head of Fiji Pharmaceutical and Biomedical Services 22.21 Bulk Purchase Scheme (Recurring Issue) Goods or services shall only be sold at the prices set out in the Schedule of Prices as recommended by the Commerce Commission.25 The storekeeper shall keep an inventory card for each inventory item to determine the value of items.

Each card must provide the following details: i. ii.

iii.

iv.
iii.

iv.

v. date and description of each item purchased quantity purchased and cost price; quantity sold and at which price; quantity remaining and price; and expiry date.26 Any errors or misallocations must be immediately adjusted by way of journal vouchers.27 We noted the following anomalies in the review of the Bulk Purchase Scheme (BPS) TMA.

• Bulk purchase scheme revenue were misstated as a result of differences between the price charged and the approved price list.

Refer Appendix 22.8 for details.


• Review of BPS price list revealed that identical items were coded differently with different selling prices.

Refer to Appendix 22.9 for details.

• There were items with zero-unit cost.

Refer to Appendix 22.10 for details.

• Understatement of utility costs which was not paid by the Bulk Purchase Scheme (BPS) Trading and Manufacturing Account (TMA) but by the Fiji Pharmaceutical and Biomedical Services (FPBS).
Root cause/Implication Weak supervisory function in the management of TMA resulting in customers have been incorrectly charged.

Recommendation Supervisory function in the management of the TMA should be improved to ensure that customers are charged the approved prices and that expenses are correctly posted and reflected in the accounts.
25 Ministry of Health Finance Manual 2014, Section 6.4.1 26 Ministry of Health Finance Manual 2014, Section 8.1.6 27 Ministry of Health Finance Manual 2014, Section 16.3.4 Ministry of Health and Medical Services Section 22: Page 33 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR Agreed Management Action The operations of the Bulk Purchase Scheme has also been considered in the supply chain review and audit recommendations will be taken into account when considering the reforms needed.
Furthermore, the FPBS Accounts team, who directly deals with the Bulk Purchase Scheme will conduct regular reviews in the current system to identify and rectify the different coding of the same items as highlighted herewith in this audit issue.
Officer Responsible Head of Fiji Pharmaceutical and Biomedical Services & Senior Accounts Officer Fiji Pharmaceutical Biomedical Services 22.22 Variance in Pharmaceutical Stock (Recurring Issue) The PSHMS/DMO’s shall appoint two stock take officers, one of whom is independent of the inventory function, to undertake a stock take of all inventories at least once a year.

The stock take officers shall count the stock and verify it to the inventory register.
The stock take officers shall prepare their stock take report noting any surplus, damaged, obsolete or unaccounted stock and their recommendations.28 The stocktaking officers must ensure that: i. ii.

iii.

stocks are properly stored; actual stock corresponds to supporting records; and records are properly maintained and up to date.29 We noted instances where the quantity of stock recorded in the Stock Card did not reconcile with the quantity recorded in the system.

Refer to Table 22.22 below for details.
Table 22.22: Variances in Pharmaceutical Stock Item Code Item Description Item Category 0030 00322 Uritix100 00987 Fetal monitor chart paper 03560 Wipes alcohol Benztropine Injection 2mg/2ml Drug Drug Consumable Laboratory Quantity as per System 1,030 906 68 701 Quantity as per Physical Verification 610 978 720 358 Variance 420 (72) 652 343 In addition, as at July 2020, the 10ml Gentamicin ear drops (drug code 02246) in stock of 172 bottles valued at $3,753 had expired in October 2019.
The average cost of each bottle was $21.82.

Refer to the figures below for details.
28 Ministry of Health and Medical Services Finance Manual 2014, Section 8.3.1, 8.3.2 & 8.3.3 29 Ministry of Health and Medical Services Finance Manual 2014, Section 6.3.2 Ministry of Health and Medical Services Section 22: Page 34 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR Figure A & B: Ear drop which had expired in October 2019 Root cause/Implication Stock cards are not updated in a timely manner when there is movement in stock.
Recommendation The Ministry should strengthen controls over management of Pharmaceutical Stock by regularly updating stock cards when there is movement in stock.

Agreed Management Action The Ministry will continue with its internal control processes already implemented to curb the issues of updating and recording of stock tally cards.
The current internal processes implemented are as follows: • • • Continuous refresher training and workshops on inventory management Enforcing responsibilities or ownership to the department supervisors; Regular monitoring of departments concerned; However, the supply chain reform and recommendations will also help strengthen controls especially the need for an accurate and robust inventory software system.

Officer Responsible Head of Fiji Pharmaceutical and Biomedical Services.
22.23 Fixed Assets Register not updated (Recurring Issue) All property, plant and equipment acquired with a cost in excess of $2,000, shall be recorded in the assets module of the Financial Management Information System (FMIS) or a fixed assets register for those without the FMIS.30 All agencies must maintain a Fixed Asset Register (FAR) until the asset module of the financial management information system is implemented.
Details to be recorded in 30 Finance Instructions 2010, Section 46 (1) Ministry of Health and Medical Services Section 22: Page 35 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR the asset register should include, at a minimum – description; cost or fair value; date of acquisition (where known); make, model and identification number, where applicable; and location.31 The Fixed Asset Register (FAR) for the Western Division was not provided for audit, although the register for the 2019 was prepared and made available for Central Eastern and Northern Divisions.
Root cause/Implication In the absence of a complete Fixed Asset Register, the risk of theft and misappropriation of assets is high.

Recommendation The Ministry should ensure that the Fixed Assets Register is maintained and updated regularly.

Agreed Management Action The continuity and consistency of update is still a challenge.

The Ministry will be working with the Ministry of Economy (pilot program) to improve this issue as the same issues are faced by other Ministries.
Officer Responsible Principal Administrative Secretary (PAS) Asset Management Unit.

22.24 Absence of Risk Management Policy It is a good practice to establish a risk management framework, to have the Ministry’s Management, and respective Divisional Heads, to jointly plan, implement, monitor, and take action on evolving risks affecting the Ministry.

The Ministry has established a Draft Risk Management Policy at the end of July 2018.

However, it was noted that the policy is still in its draft form.
In addition, the disaster recovery plan and fraud risk policy have not been developed by the Ministry.

Root cause/Implication This is an indication of weak governance and accountability function to drive the risk management framework.

Recommendation The Ministry should formalise the risk management policy and develop its disaster recovery plan and fraud risk policy.

Agreed Management Action The Ministry will ensure that the draft Risk Management Policy is reviewed and approved accordingly.
31 Finance Instructions 2010, Section 46 (2) Ministry of Health and Medical Services Section 22: Page 36 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR Officer Responsible Heads of Finance and Asset Management Ministry of Health and Medical Services Section 22: Page 37 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR PART C: ASSESSMENT OF FINANCIAL GOVERNANCE 22.25 Internal Controls During our audits, we assess the design and implementation of controls to ensure that they are suitably designed to prevent, detect and correct material misstatements.
Where audit strategy requires, we also test the operating effectiveness to ensure the internal controls are functioning as designed.

A deficiency occurs when internal controls are unable to prevent, detect or correct errors in the financial statements or where controls are missing.

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

It requires immediate management action.


Internal controls are categorized against the following five components of internal control.
A summary of assessment of key controls based on our audit was as follows: Control Environment Risk Assessment Control Activities    Information & Communication Control  Monitoring Activities  In view of the above, we have assessed the internal controls of the Ministry as: Rating  Ineffective Internal control assessment Significant deficiencies identified in internal controls Ministry of Health and Medical Services Section 22: Page 38 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR 22.26 Submission of FY 2018-2019 Draft Agency Financial Statements On 29 May 2019, Permanent Secretary for Economy issued Circular No.
09/2019 to Permanent Secretaries, Heads of Departments, High Commissioners and Ambassadors in Fiji Foreign Missions in which procedures for closing of 2019 accounts and times were detailed.

When Ministries and Departments achieve the key focus areas highlighted by the Permanent Secretary for Economy by the given dates, they are more likely to prepare accurate and timely draft financial statements for audit.
Based on information received, we have assessed the year-end close process as: Rating Year-end close process assessment  Ineffective 7 out of 10 key processes completed after due date 22.27 Quality of Draft Financial Statements by entities The extent of audit adjustments made to draft financial statements indicates the effectiveness of an entity’s internal review processes before the accounts are submitted for audit.
We assessed the quality of financial statements by the impact these adjustments had on the operating results or net assets of the entity subject to our audit.

Our assessment for the Ministry was: Rating Quality of draft financial statements assessment  Ineffective Adjustments on net assets were more than 1%, in addition errors and misstatements resulted in the qualified audit opinion.
Ministry of Health and Medical Services Section 22: Page 39 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR 22.28 Timeliness of draft financial statements To assess the timeliness of acceptable draft financial statements, we have compared the date the draft financial statements were due and the date it was received.
Accordingly, we have assessed timeliness as: Rating  Ineffective Timeliness of draft financial statements assessment Acceptable draft financial statements received after 31 October 2019.

Two additional draft financials were received on 03/03/20 and 25/06/20 respectively.
22.29 Timeliness of Provision of Management Comments and Signing of Financial Statements To assess the timeliness of provision of management comments and signing of financial statements, we have compared the date the draft management letter and audited financial statements were issued to entity and the date management comments and signed accounts were received.
Accordingly, we have assessed timeliness as: Rating  Ineffective Rating  Effective Timeliness of Management Comments Received After 21 days from issue of Draft Management Letter Timeliness of Signed Financial Statements Received Within 5 days from issue of Financial Statements for signing Ministry of Health and Medical Services Section 22: Page 40 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR APPENDIX 22.1: POOR RECORDS MANAGEMENT Figure 1: Payment vouchers were not filed in order Figure 2: EFT payment vouchers stored together with cheque payment vouchers – not in sequence Figure 3: Files stacked on the floor Figure 4: Files stacked on the floor Figure 5: Files stacked on the floor Figure 6: Other items taking up space in the store room Figure 7: Boxes of old payment vouchers stacked along the passage making it difficult to move around the store room Figure 8: Boxes of old payment vouchers stacked along the passage making it hard to move around the store room Figure 9: Cheque numbers/EFT numbers not marked on cover files Ministry of Health and Medical Services Section 22: Page 41 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR APPENDIX 22.2: PROCUREMENT ANOMALIES Date Cheque No.
Amount ($) Description Purchase orders not attached to payment voucher 09/07/2019 47771 250,392 Being payment to the payee for the payment of Claim 9 Architectural Consultancy.

09/07/2019 47769 100,000 Being payment to the payee for the payment of claim 14 - 21/07/2019 46315 129,722 Being payment for Container Pipeline Rerouting - CWM Hospital 29/07/2019 49997 2,107,625 Being payment for claim 10 for the extension & upgrading of New Maternity Unit claim 1 & 2.

Architectural Consultancy.

Navosa hospital.


29/07/2019 49999 2,397,751 Being payment for claim 11 for the extension & upgrading of New Navosa hospital.

Payment vouchers and supporting documents not stamped “PAID” 21/07/2019 46315 129,722 Being payment for Container Pipeline Rerouting - CWM Hospital Maternity Unit claim 1 & 2.
13/09/2018 32781 1,006,402 Being payment for supply of phase 3 items as per GTB 19/2015 8/07/2019 47670 17,025 Being payment to the Northern Dialysis Centre for cost of treatment provided to the Northern patients.

and CTN 56/2015.

Delivery dockets not provided 4/01/2019 37920 151,376 Being payment for purchase of operation theatre lights with steel brackets.

426,957 Being payment for supply of hospital beds to health facilities.
18/10/2018 34292 Pro-forma invoice attached 26/10/2018 34492 Officer authorising payments above approval limit 29/11/2018 320483 4/12/2018 320520 16/05/2019 44296 226,982 Being payment for supply installation & Commissioning of Anaesthetic machines.

504,587 Being payment of compensation of payments.

45,872 Being payment of compensation.

22,362 Being payment of 50% dialysis subsidy for treatment provided to the Northern patients as per documents attached.
PAO authorised the payment which is over his approval limit of $15,000.

17,025 Being payment to the Northern Dialysis Centre for cost of treatment provided to the Northern patients as per attached and dialysis report sheet.

PAO authorised the payment which is over his approval limit of $15,000.

26,147 Being advanced payment to the above named payee for Kidney Dialysis treatment at Labasa.

This payment will assist for payment of medicines, consumables and machine services.
PAO authorised the payment which is over his approval limit of $15,000.

8/07/2019 47670 11/12/2018 36456 Copies of National Health card confirming that the patient is a recipient for kidney dialysis not attached 16/05/2019 44296 22,362 Being payment of 50% dialysis subsidy for treatment provided to the Northern patients.

8/07/2019 47670 17,025 Being payment to the Northern Dialysis Centre for cost of treatment 11/12/2018 36456 provided to the Northern patients.
26,147 Being advanced payment to the above named payee for Kidney Dialysis treatment at Labasa.

This payment will assist for payment of medicines, consumables and machine services.

22/07/2019 49601 8,550 Being payment for 50% dialysis subsidy (June) for the treatment provided to Northern patients.

Dialysis report sheets of patients not attached 16/05/2019 44296 22,362 Being payment of 50% dialysis subsidy for treatment provided to the Northern patients.
Ministry of Health and Medical Services Section 22: Page 42 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR Date Cheque No.

11/12/2018 36456 Amount ($) 26,147 Being advanced payment to the above named payee for Kidney Dialysis treatment at Labasa.

This payment will assist for payment of medicines, consumables and machine services.
Description Ministry of Health and Medical Services Section 22: Page 43 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR APPENDIX 22.3: EXPENDITURE CHARGED TO INCORRECT ALLOCATIONS Date Cheque Number Amount ($) Description SEG expenditure was incorrectly Posted to Correct SEG 26/09/18 33262 22,834.99 MOH Data IP Link August 2018 (TFL) SEG 3 – Overseas Medical Consultancy SEG 3 – Telecommunications 06/05/19 321025 20,898.16 Payment of Lease Offer for the SEG 5 – Minor Works SEG 5 Nausori Highland Nursing Station 11/10/18 33785 23,633.03 Payment of mercy flight SEG 5 - Rations (medical evacuation) 05/06/19 45687 26,009.17 Payment of mercy flight SEG 5 – Rations (medical evacuation) 24/07/19 49991 51,853.21 Payment of mercy flight SEG 5 – Rations (medical evacuation) 14/12/18 36697 47,870.00 Payment of claim 1 for upgrading & reconstruction of Lautoka Hospital SEG 8 – Upgrade of Valelevu Health Centre 29/11/18 320483 504,587.00 Being payment of compensation SEG 9 – Capital Purchases 04/12/18 320520 45,872.00 Being payment of compensation SEG 9 – Capital SEG 5 – Charter of Aircraft SEG 5 – Charter of Aircraft SEG 5 – Charter of Aircraft SEG 8 – Upgrade and maintenance of Urban Hospitals SEG 7 – Indemnity Charges SEG 7 – Indemnity Charges SEG 7 – Special Expenditures 16/05/19 44296 22,362.00 Being payment of 50% dialysis subsidy for treatment provided to the Northern patients 08/07/19 47670 17,025.00 Being payment to the Northern 22/07/19 49601 11/12/18 36456 Dialysis Centre for cost of treatment provided to the Northern patients 8,550.00 Being payment for 50% dialysis subsidy (June) for the treatment provided to Northern patients 26,147.00 Being advanced payment to the above named payee for Kidney Dialysis treatment at Labasa for approx 21 patients Purchases SEG 10 – Capital Grants & Transfers SEG 10 – Capital Grants & Transfers SEG 7 – Special Expenditures SEG 10 – Capital Grants & Transfers SEG 7 – Special Expenditures SEG 10 – Capital Grants & Transfers SEG 7 – Special
 Expenditures 4/01/2019 44493 15,579.33 Being payment for HIV test kit SEG 4 – Bio Spare 31/05/19 45276 133,112.66 TFL Bill Various Various 258,806.68 Various expenses including water bills, ration and payments for oxygen and laundry Parts and Maintenance SEG 4 – Water, Sewerage and Fire Services SEG 4 – Power Supply – GL 1-22202-81201- 040499 SEG 5 – Purchases of Goods and Services SEG 3 – Telecommunication Various SEGs Various Various 69,087.49 Various expenses including cleaning services and meal allowances SEG 4 – Power Supply – GL 1-22203-84201- 040499 Various SEGs Various Various 186,247.17 Various expenses including travel, ration, toners and travel 18/02/19 39914 31,418.83 Payment for Energy Fiji Limited bill SEG 4 – Power Supply – GL 1-22204-83201- 040499 SEG 5 - PC-Non Communicable 20/06/19 321140 21,547.75 Payment for Energy Fiji Limited bill SEG 5 - PC-Non Communicable Various SEGs SEG 4 – Power Supply SEG 4 – Power Supply Ministry of Health and Medical Services Section 22: Page 44 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR Date Cheque Number Amount ($) Description SEG expenditure was incorrectly Posted to Correct SEG 11/07/19 45440 575,830.25 Payment for vaccines SEG 5 – Drugs SEG 5 – Vaccines 10/07/19 45426 76,841.42 Payment for laboratory items SEG 5 – Consumables SEG 5 – Laboratory 17/06/19 45302 541,575.49 Payment for consumables SEG 5 – Vaccines SEG 5 – Consumables 15/07/19 45458 27,625.62 Payment for consumables SEG 5 – Vaccines SEG 5 – Consumables 25/04/19 45068 21,964.19 Payment for consumables SEG 5 - Vaccines SEG 5 - Consumables 8/02/19 44672 619,658.11 Payment for consumables 27/03/19 44908 17,918.45 Payment for consumables 27/03/19 44908 19,157.58 Payment for consumables 02/04/19 44963 154,505.78 Payment for consumables 2/04/19 44979 10,890.56 Payment for consumables 17/07/19 45480 174,692.29 Payment for consumables Various Various 35,440.37 Payment for medivac expenses Various Various
 7,505.51 Payment for catering, meal claim, electricity bill and safety shoes Various Various 442,782.38 Payment for travel, hire of rental, fuel, catering, electrical works, water tank, office chair, compressor, generator, water pump, sofa, building materials and aircraft services.
SEG 5 – Free Medicine Program SEG 5 – Free Medicine Program SEG 5 – Free Medicine Program SEG 5 – Free Medicine Program SEG 5 – Free Medicine Program SEG 5 – Free Medicine Program SEG 5 Outsourcing – GL 1-22101-22101- 059149 SEG 5 Outsourcing – GL 1-22203-84201- 059149 SEG 5 Outsourcing – GL 1-22303-84101- 059149 SEG 5 – Consumables SEG 5 - Consumables SEG 5 - Consumables SEG 5 - Dressing SEG 5 - Consumables SEG 5 - Consumables SEG 5 – Charter of Aircraft Various SEGs Various SEGs 28/11/2018 320473 229,357.80 Being payment of compensation SEG 7 – Medical HR Contingencies SEG 7 – Indemnity Charges 09/10/2018 320246 91,743.12 Being payment of indemnity charges 30/01/2019 320748 37,000.00 Being payment of indemnity charges 17/05/2019 44344 182,770.92 Payment for construction claims 28/06/2019 46888 125,005.62 Payment for construction claims SEG 7 – Medical HR Contingencies SEG 7 – Indemnity Charges SEG 7 – Medical HR Contingencies SEG 7 – Indemnity Charges SEG 7 - Kidney Dialysis Treatment Centre SEG 8 – Capital Construction SEG 7 - Kidney Dialysis Treatment Centre SEG 8 – Capital Construction Ministry of Health and Medical Services Section 22: Page 45 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR APPENDIX 22.4: AUDIT SITE VISIT – CWM HOSPITAL CWM HOSPITAL MATERNITY WASHROOM Figure 10: Missing shower head (Ante- Natal Ward) Figure 11: Damaged new tap Figure 12: Damaged ceiling for staff bathroom at Maternity Unit Figure 13: Damaged washroom with Out of Order sign on the door Figure 14: Missing shower knob CWM HOSPITAL - INPATIENT PHARMACY Figure 15: Wet medicine packets Figure 16: Ice forming in the refrigerator Figure 17: Chemical was leaking unto the floor Ministry of Health and Medical Services Section 22: Page 46 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR Figure 18: Gallons of chemicals stacked next to the fridge Figure 19: Crisper drawer used to collect Sodium Hypochlorite leaking from the gallon Figure 20:
 Damaged ceiling and lights not working Figure 21: Cables exposed to water leaking from ceiling CWM HOSPITAL - BLOOD BANK & CYTOLOGY Figure 22: Blood Bank refrigerator not working Figure 23: Faulty Digital Freezer thermometer Figure 24: Thin-prep not operating due to the lack of filters Ministry of Health and Medical Services Section 22: Page 47 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR Figure 25: Centrifuge not working Figure 26: Damaged seat at the Donor Blood Service CWM HOSPITAL - MAMMOGRAM SCREENING LAB Figure 27: Damaged open ceiling causing water to leak in Figure 28: Mammogram machine covered in plastic to keep away water leaking from open ceiling CWM HOSPITAL - DENTAL UNIT Figure 29: Water leaking into Dental Department Figure 30: Damaged ceiling in dietician's room Figure 31: Open ceiling at the new operating theatre recovery room Ministry of Health and Medical Services Section 22: Page 48 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR Figure 32: Collapsed ceiling at the new operating theatre Figure 33: Collapsed ceiling at the new operating theater Ministry of Health and Medical Services Section 22: Page 49 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR APPENDIX 22.5: AUDIT SITE VISIT – NAKASI HEALTH CENTRE Figure 34: Faulty suction machine (the only suction machine in the Health centre) Figure 36: Faulty Power point APPENDIX 22.6: AUDIT SITE VISIT – NAUSORI HEALTH CENTRE Figure 37: Renovation needed – building structure is old Figure 38: Renovation needed – building structure is old Figure 39: Renovation needed - building structure is old Figure 40: Renovation needed – lack of space and building structure is old Figure 41: Renovation needed Figure 42: Renovation needed Ministry of Health and Medical Services Section 22: Page 50 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL
 SERVICES SECTOR Figure 43: Renovation needed Figure 44: Renovation needed for toilets Figure 45: Renovation needed for male toilets Figure 46: Faulty air-condition unit at x-ray room Figure 47: Faulty air condition unit at outpatient area Figure 48: Poor drainage at outpatient area that causes flooding during heavy rain Figure 549: Poor drainage Figure 50: Outpatient records room – air-condition unit not working Figure 51: Outpatient records room – lack of space and ceiling leaks when there is heavy rain Figure 52: Maternity Unit – Drainage and leakage in the sewer system Figure 53: Maternity unit – damaged sink Figure 54: Maternity unit – damaged sink Ministry of Health and Medical Services Section 22: Page 51 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR Figure 55: Damaged toilet Figure 56: Toilet out of order at the Maternity Unit Figure 57: Dental records room Figure 58: Maternity labour room – missing louver blades and faulty air- condition unit Figure 59: Maternity labour room – missing louver blades and faulty air- condition unit Figure 60: Air-condition unit not working in Dental department Figure 61: Renovation needed in Dental department Figure 62: Renovation needed in Dental department Figure 63: Broken windows Ministry of Health and Medical Services Section 22: Page 52 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR APPENDIX 22.7: STORAGE SPACE AT FPBS Figure 68: Pharmaceuticals were stored in the aisle Figure 69: Pharmaceuticals were stored up to ceiling Figure 70: Pharmaceuticals were stored in the aisle Figure 71: Pharmaceuticals were stored on top of cold storage room Figure 72: Pharmaceuticals were stored in energy room due Ministry of Health and Medical Services Section 22: Page 53 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR APPENDIX 22.8: MISSTATED REVENUE IN BPS TMA Date Receipt Number Item Code Quantity
 sold as per receipt Item Price (VIP) per unit as per price list ($) Price as per receipt ($) Sub total as per audit ($) D = A x B Sub total as per receipt ($) Variance ($) 1/10/2018 1/10/2018 1/10/2018 1/10/2018 1/10/2018 1/10/2018 1/10/2018 1/10/2018 1/10/2018 1/10/2018 1/10/2018 1/10/2018 1/10/2018 1/10/2018 1/10/2018 1/10/2018 2/10/2018 2/10/2018 2/10/2018 2/10/2018 2/10/2018 2/10/2018 2/10/2018 2/10/2018 2/10/2018 2/10/2018 2/10/2018 2/10/2018 2/10/2018 2/10/2018 2/10/2018 2/10/2018 2/10/2018 2/10/2018 2/10/2018 2/10/2018 2/10/2018 2/10/2018 2/10/2018 3/10/2018 3/10/2018 3/10/2018 3/10/2018 3/10/2018 3/10/2018 3/10/2018 4/10/2018 4/10/2018 4/10/2018 4/10/2018 4/10/2018 4/10/2018 4/10/2018 4/10/ A B C 13.21 12.70 15.00 21.80 12.70 2.00 12.70 44.00 12.70 44.00 12.70 44.00 40.00 40.00 12.70 2.00 13.00 15.00 31.00 44.00 12.70 0.01 0.03 0.05 21.80
E = A x C (1.60) (14.82) 1.07 (3.20) 6.40 (3.20) (5.48) (6.40) (2.74) (6.40) (2.74) (5.34) (5.34) (3.20) 3.20 (0.24) (14.82) (59.40) (2.74) (16.02) 7.07 (3.02) 41.82 1.07 (2.74) (3.20) (2.74) (3.20) 1,872.00 (11.40) 0.48 (2.74) (3.20) (2.74) 0.20 0.20 6.40 (2.74) (1.60) (2.74) 148.00 (2.74) (2.74) (6.40) (29.70) 8.67 (29.64) (0.11) (2.74) 4.11 (5.48) (14.82) (2.74) Ministry of Health and Medical Services Section 22: Page 54 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR Date Receipt Number Item Code Quantity sold as per receipt Item Price (VIP) per unit as per price list ($) Price as per receipt ($) Sub total as per audit ($) D = A x B Sub total as per receipt ($) Variance ($) 4/10/2018 4/10/2018 4/10/2018 4/10/2018 4/10/2018 4/10/2018 4/10/2018 4/10/2018 4/10/2018 4/10/2018 4/10/2018 4/10/2018 4/10/2018 4/10/2018 4/10/2018 4/10/2018 4/10/2018 4/10/2018 4/10/2018 3/01/2019 3/01/2019 3/01/2019 3/01/2019 3/01/2019 4/01/2019 4/01/2019 4/01/2019 4/01/2019 4/01/2019 4/01/2019 4/01/2019 4/01/2019 4/01/2019 4/01/2019 4/01/2019 4/01/2019 4/01/2019 4/01/2019 4/01/2019 4/01/2019 4/01/2019 4/01/2019 4/01/2019 7/01/2019 7/01/2019 7/01/2019
 7/01/2019 7/01/2019 7/01/2019 7/01/2019 7/01/2019 7/01/2019 7/01/2019 7/01/2019 7/01/2019 7/01/2019 7/01/ A B C E = A x C 25.40 4.29 38.10 31.00 80.00 15.00 15.00 30.00 21.80 44.00 44.00 15.00 21.80 40.00 40.00 31.00 12.70
(3.20) 0.03 (4.80) (29.70) (10.68) (14.82) (14.82) (29.64) 1.07 (2.74) (2.74) (14.82) 1.07 (5.34) (5.34) (29.70) (1.60) 8.67 (0.03) 0.09 (2.74) (2.74) (2.74) (14.82) (26.00) (0.18) 4.11 (5.34) (14.82) (2.74) (14.82) 45.00 16.00 36.00 36.00 (40.40) (2.74) 1.07 (14.82) (5.48) 0.25 0.15 (5.34) (14.82) (5.34) (2.74) (14.82) (5.34) (5.34) 4.11 (5.34) (14.82) (14.82) (2.74) 4.11 (5.34) 4.11 Ministry of Health and Medical Services Section 22: Page 55 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR Date Receipt Number Item Code Quantity sold as per receipt Item Price (VIP) per unit as per price list ($) Price as per receipt ($) Sub total as per audit ($) D = A x B Sub total as per receipt ($) Variance ($) 7/01/2019 7/01/2019 7/01/2019 8/01/2019 8/01/2019 8/01/2019 8/01/2019 8/01/2019 8/01/2019 8/01/2019 8/01/2019 8/01/2019 8/01/2019 8/01/2019 8/01/2019 8/01/2019 8/01/2019 8/01/2019 8/01/2019 9/01/2019 9/01/2019 9/01/2019 9/01/2019 9/01/2019 9/01/2019 9/01/2019 9/01/2019 9/01/2019 9/01/2019 9/01/2019 9/01/2019 9/01/2019 9/01/2019 9/01/2019 9/01/2019 9/01/2019 9/01/2019 10/01/2019 10/01/2019 10/01/2019 10/01/2019 10/01/2019 10/01/2019 10/01/2019 10/01/2019 10/01/2019 10/01/2019 11/01/2019 11/01/2019 11/01/2019 11/01/2019 11/01/2019 11/01/2019 11/01/2019 11/01/2019 11/01/2019 11/01/ 05622
A B C E = A x C (5.34) (14.82) (2.74) 3.20 (5.34) (14.82) (10.68) (5.48) (16.16) (5.34) (4.04) (5.34) (5.34) (2.74) (14.82) (2.74) 6.40 10.00 (4.04) (5.34) 1.80 (3.46) (2.74) (5.34) (59.40) (5.34) (2.74) (88.92) (12.12) (2.74) (2.74) (0.99) (2.74) (7.20) (0.18) (16.60) (2.74) (20.20) (44.46) (5.34) (9.60) (3.20) 0.45 (1.00) 5.04 (0.36) 0.16 0.18 0.18
 1.07 (8.22) (29.64) 4.11 (5.34) (14.82) (10.68) (2.74) Ministry of Health and Medical Services Section 22: Page 56 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR Date Receipt Number Item Code Quantity sold as per receipt Item Price (VIP) per unit as per price list ($) Price as per receipt ($) Sub total as per audit ($) D = A x B Sub total as per receipt ($) Variance ($) 11/01/2019 11/01/2019 11/01/2019 11/01/2019 11/01/2019 11/01/2019 11/01/2019 11/01/2019 11/01/2019 11/01/2019 11/01/2019 11/01/2019 14/01/2019 14/01/2019 14/01/2019 14/01/2019 14/01/2019 14/01/2019 14/01/2019 14/01/2019 14/01/2019 14/01/2019 14/01/2019 14/01/2019 14/01/2019 14/01/2019 14/01/2019 14/01/2019 14/01/2019 14/01/2019 14/01/2019 14/01/2019 14/01/2019 1/05/2019 1/05/2019 1/05/2019 1/05/2019 1/05/2019 1/05/2019 1/05/2019 1/05/2019 1/05/2019 1/05/2019 1/05/2019 1/05/2019 1/05/2019 1/05/2019 1/05/2019 1/05/2019 1/05/2019 1/05/2019 1/05/2019 1/05/2019 1/05/2019 1/05/2019 1/05/2019 1/05/ A B 41.26 2.08 42.01 34.66 0.07 1.65 34.66 41.26 8.13 4.26 4.34 4.32 9.62 41.26 2.08 1.30 0.18 41.26 0.18 1.49
C E = A x C (2.74) 3.20 4.11 (5.34) (51.20) (0.60) (5.34) (2.74) (0.15) (0.15) 0.25 0.06 0.04 (2.74) 3.20 (29.70) (14.82) (2.74) (14.82) (24.33) 0.18 (89.10) (0.18) 0.06 (0.12) (0.98) 6.40 (2.74) (14.82) 4.11 (5.34) (14.82) (2.74) (10.68) (14.82) (3.20) 4,710.00 (16.00) 0.06 (2.74) (2.74) 4.11 (5.34) (2.74) (2.74) (14.82) (52.20) 18.96 (4.80) 8.22 (10.68) (14.82) (6.40) (10.60) (16.00) (0.24) (4.04) Ministry of Health and Medical Services Section 22: Page 57 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR Date Receipt Number Item Code Quantity sold as per receipt Item Price (VIP) per unit as per price list ($) Price as per receipt ($) Sub total as per audit ($) D = A x B Sub total as per receipt ($) Variance ($) 1/05/2019 1/05/2019 1/05/2019 1/05/2019 1/05/2019
 1/05/2019 2/05/2019 2/05/2019 2/05/2019 2/05/2019 2/05/2019 2/05/2019 2/05/2019 2/05/2019 2/05/2019 2/05/2019 2/05/2019 2/05/2019 2/05/2019 2/05/2019 2/05/2019 2/05/2019 2/05/2019 2/05/2019 2/05/2019 2/05/2019 2/05/2019 2/05/2019 2/05/2019 2/05/2019 2/05/2019 2/05/2019 2/05/2019 2/05/2019 2/05/2019 3/05/2019 3/05/2019 3/05/2019 3/05/2019 3/05/2019 3/05/2019 3/05/2019 3/05/2019 3/05/2019 3/05/2019 3/05/2019 3/05/2019 3/05/2019 3/05/2019 6/05/2019 6/05/2019 6/05/2019 6/05/2019 6/05/2019 6/05/2019 6/05/2019 6/05/ A B C 12.70
E = A x C (59.28) 31.00 4.11 (5.34) (14.82) (2.74) 0.02 (10.68) (2.74) 4.20 (32.00) (282.80) 7.40 1.07 (5.48) 0.48 (2.74) (1.60) 1.07 (5.34) (1.60) (0.01) (2.74) (14.82) (467.52) 17.00 (16.00) (12.27) (0.24) 8.40 12.00 28.00 12.00 6.00 (5.34) (90.00) 46.50 (6.40) (2.74) (14.82) (5.48) (0.48) (29.70) (11.18) (6.40) (11.18) 2.66 (3.20) (3.20) (9.60) (5.48) 4.11 (5.34) (14.82) (14.82) (5.34) (2.74) Ministry of Health and Medical Services Section 22: Page 58 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR Date Receipt Number Item Code Quantity sold as per receipt Item Price (VIP) per unit as per price list ($) Price as per receipt ($) Sub total as per audit ($) D = A x B Sub total as per receipt ($) Variance ($) 6/05/2019 6/05/2019 6/05/2019 6/05/2019 6/05/2019 6/05/2019 6/05/2019 6/05/2019 7/05/2019 7/05/2019 7/05/2019 7/05/2019 7/05/2019 7/05/2019 7/05/2019 7/05/2019 7/05/2019 7/05/2019 7/05/2019 7/05/2019 7/05/2019 7/05/2019 7/05/2019 7/05/2019 7/05/2019 7/05/2019 7/05/2019 7/05/2019 8/05/2019 8/05/2019 8/05/ 06887
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1 ( REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR Section 24 Ministry of Women, Children and Poverty Alleviation Roles and Responsibilities The Ministry of Women, Children and Poverty Alleviation (‘Ministry’) is responsible for providing services and administering programmes that protect Fiji’s most vulnerable groups.
The Ministry’s work provides a social safety net that uplifts disadvantaged Fijians, creating a more level playing field in Fijian society.

It aims to break down barriers of gender, disability, age, and economic standing, allowing all Fijians to fully participate in society and benefit from the nation’s growing prosperity.

The Ministry oversees three departments, namely: Department of Social Welfare, the Department of Women and the Poverty Monitoring Unit.
The Department of Social Welfare administers Fiji’s well reformed social welfare programmes, with key focus of ensuring all Government assistance is well targeted and administered in a transparent and accountable manner.

It is equally committed to ensuring that these programmes do not create a culture of dependency, focusing efforts and energy on graduating Fijian families and individuals from “welfare to workfare”.
Through the Department of Women, the Ministry is responsible for providing Fijian women and girls, particularly those in rural communities, with the skills and education they need to participate as equal members in society.

It works to provide the necessary support to enable them to bring about positive changes for themselves, for their families and for their communities.
The Poverty Monitoring Unit monitors and reports on the impact of Government’s Poverty Alleviation Programme under the Integrated National Poverty Eradication Programme framework across ministries and agencies.
Table of Contents PART A: FINANCIAL INFORMATION ..................................................................................................... 3 24.1 Audit Opinion ............................................................................................................ 3 24.2 Appropriation Statement ........................................................................................... 4 24.3 Trust Fund Account .................................................................................................. 5 PART B: SIGNIFICANT MATTERS .......................................................................................................... 7 24.4 Variances in the Scheme Allocation ......................................................................... 7 24.5 Payroll Variance between FMIS General Ledger and Payroll Report ........................ 8 24.6 Significant Number of Vacant Positions .................................................................. 10 24.7 OMRS Guideline for Temporary Appointments not followed ................................... 10 24.8 Anomalies in Revolving Fund Account (RFA) ......................................................... 11 24.9 Non-Compliance to Health and Safety Act.............................................................. 12 24.10 Non-compliance with internal controls on procurement and payments - Recurring Issue 13 Ministry of Women, Children and Poverty Alleviation Section 24: Page 1 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR 24.11 Misallocation of expenditures - Recurring Issue ..................................................... 14 24.12 Finalisation of the Financial Statement - Recurring Issue ....................................... 16 24.13 Risk Management Framework - Recurring Issue .................................................... 17 24.14 National Council for Older Persons Not Established as Body Corporate - Recurring Issue 17 PART C: ASSESSMENT OF FINANCIAL GOVERNANCE ........................................................................ 19 24.15 Internal Controls ..................................................................................................... 19 24.16 Submission of FY 2018-2019 Draft Agency Financial Statements .......................... 20 24.17 Quality of Draft Financial Statements by entities..................................................... 20 24.18 Timeliness of draft financial statements .................................................................. 21 24.19 Timeliness of Provision of Management Comments and Signing of Financial Statements ............................................................................................................. 21 APPENDIX 24.1: OHS ISSUES .............................................................................................................. 22 Ministry of Women, Children and Poverty Alleviation Section 24: Page 2 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR PART A: FINANCIAL INFORMATION 24.1 Audit Opinion The audit of the 2019 accounts of the Ministry of Women, Children and Poverty Alleviation resulted in a modified audit opinion.
The qualifications were as follows: 1.

The Statement of Receipts and Expenditure includes Operating Grants and Transfers of $120.5 million.

Included in this amount were the various Social Welfare Scheme payments totalling $116 million.

An unreconciled variance of $365,360 existed between the General Ledger balance of $116 million and the actual payments made totalling $115.7 million for the year ended 31 July 2019.
Consequently, the accuracy and completeness of Operating Grant and Transfers of $120.5 million reflected in the financial statements could not be established.

2.

An unreconciled variance of $453,794 existed between FMIS general ledger and the Ministry’s payroll report for Established Staff.

Consequently, the accuracy of the Established Staff expenditure recorded in the Statement of Receipts and Expenditure for the year ended 31 July 2019 could not be established.
Other Matters included the following: • Internal controls over procurement were generally found to be weak.

In addition, the detailed listing of officers who have yet to retire accountable advance as reflected in the Revolving Fund Account was not maintained by the Ministry.
Ministry of Women, Children and Poverty Alleviation Section 24: Page 3 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR • The administration and management over Bus Fare Scheme were generally weak as highlighted in the Performance Audit Report on the Administration and Management of Bus Fare Assistance through E-ticketing for School Children, Elderly and Person with Disability.

(Parliament Paper No.


71 of 2020) • The National Council for Older Persons Act 2012 establishes the National Council for Older Persons (NCOP) to be a body corporate.

However, the NCOP is still operating as part of the Ministry of Women, Children and Poverty Alleviation.

24.2 Appropriation Statement The Ministry collected revenue totalling $13,519 in 2019 and incurred expenditure totalling $140.6 million against a revised budget of $145.8 million resulting in savings of $5.2 million or 3.6%.
Details of expenditure against the revised budget are provided in Table 24.1.
Table 24.1: Appropriation Statement for 2019 SEG Item 1 Established Staff 2 Unestablished Staff 3 Travel & Communication 4 Maintenance & Operations Budget Estimate ($) 8,124,022 1,723,960 559,500 Appropriation Changes ($) 118,299 1,466,170 67,294 Revised Estimate ($) 8,242,321 3,190,130 626,794 8,230,732 3,190,110 626,365 Actual Expenditure ($) Lapsed Appropriation ($) 1,130,000 98,775 1,228,775 1,227,896 11,589 20 429 879 366 5 Purchase of Goods 2,681,404 (143,032) 2,538,372 2,538,006 & Services 6 Operating Grants & 107,807,757 13,187,127 120,994,884 120,492,360 502,524 Transfers 7 Special Expenditure Total Operating Costs 8 Capital Construction 9 Capital Purchase 10 Capital Grants & Transfers Total Capital Expenditure 13 Value Added Tax TOTAL 4,333,395 126,360,038 (610,413) 3,722,982 14,184,220 140,544,258 3,033,407 139,338,876 2,500,000 50,000 3,100,000 (1,393,245) --- --- 1,106,755 50,000 3,100,000 217,953 --- 686,523 689,575 1,205,382 888,802 50,000 2,413,477 5,650,000 (1,393,245) 4,256,755 904,476 3,352,279 987,200 132,997,238 8,401 995,601 12,799,376 145,796,614 339,730 140,583,082 655,871 5,213,532 The budget savings were largely due to the following: (a) Savings of $502,524 under SEG 6 - Operating Grant & Transfers: I. II.
Late release of grants to relevant organisations for persons with disability due to delayed submission of audit reports to the Ministry.

Administrative issues on staffing the Fiji National Council for Disability Persons.

(b) Savings of $689,575 under SEG 7 - Special Expenditure: Ministry of Women, Children and Poverty Alleviation Section 24: Page 4 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR I. II.

III.

IV.
III.

IV.

For the allocation towards promoting and supporting the economic empowerment of persons with disability, there was slow implementation of the program by the Fiji Disabled People’s Federation.

Late release of funding from the allocation for implementation of rights of persons with disability and involvement of officers in the Home Care program.
Delays in meeting the requirements of the Requisition to Incur Expenditure (RIE) process for the release of funds under the Executive Support Unit allocation.

Child Protection Programme (UNICEF) allocation was not utilised as the donor made direct payments to vendors.

(c) Savings of $888,802 under SEG 8 - Capital Construction was a result of the delays in construction by the contractor for Barefoot College in Nadogo, Macuata.

(d) Savings of $2.4 million under SEG 10 - Capital Grants & Transfers: i. ii.
iii.

For Welfare Graduation Programme, the 2nd RIE request was not released as the Ministry did not meet requirements for the RIE request of the Ministry of Economy.

Budgeted funds for Capital Grants to Organisations for Persons was not fully utilised.

Upgrade of State Homes for the Elderly allocation was not fully utilised.

24.3 Trust Fund Account The Ministry maintains a Help for Home Trust Fund Account.
The Trust Fund caters for refunds to Fijians whose houses sustained damages during TC Winston and had self-funded the repairs.
Refunds were made as follows with the maximum amount which can be reimbursed:  Roofing damage (partial or full) or destruction of supporting walls and home is on squatter land or land under a “vakavanua ” arrangement or similar arrangement - $1,500  Partially damaged roof - $1,500  Fully damaged roof - $3,000  Destruction of roof and supporting walls - $7,000 As at 31 July 2019, the Ministry had a credit balance of $190,047 in the Help for Home Main Trust Fund Account.
Except for bank fees, there were no payments made from this account during financial year 2018/2019 as stated on Table 24.2.
Table 24.2: Statement of Trust Account Description Opening Balance Receipts: Revenue Returned Cheque’s Total Receipts Payments: Bank Fees 31 July 2019 ($) 31 July 2018 ($) 190,107 --- --- --- --- 60 980,000 10,500 990,500 62 Ministry of Women, Children and Poverty Alleviation Section 24: Page 5 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR Description Help for Homes Refund Payment to Recipients Total Payments 31 July 2019 ($) 31 July 2018 ($) 800,331 800,393 --- 60 Closing Balance as at 31 July 190,047 190,107 Ministry of Women, Children and Poverty Alleviation Section 24: Page 6 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR PART B: SIGNIFICANT MATTERS The Audit Act 1969 requires, amongst other things, that the Auditor-General must report on other significant matters which the Auditor-General wishes to bring to the attention of Parliament.
Other significant matters highlighted in this report, include control weaknesses which could cause or is causing severe disruption to the process or on the ability of an auditee to achieve process objectives and comply with relevant legislation.

It is likely that these issues may have an impact on the operations of the Ministry in future, if necessary action is not taken to address them.
It is important to note that the deficiencies detailed in this report were identified during our audit and may have been subsequently resolved by the Ministry.

These have been included in this report as they impacted on the overall system of control of the Ministry as at 31 July 2019.
24.4 Variances in the Scheme Allocation 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.1 We noted significant variances when comparing the monthly pay-out reports with the general ledger balances of the individual schemes under SEG 6 - Operating Grants and Transfers allocation.

Refer to Table 24.3 for details of variances.
Table 24.3: Variance between Social Protection Scheme Pay-out Report and General Ledger Scheme Social Pension Scheme Poverty Benefit Scheme Care & Protection Allowance Disability Allowance Scheme Bus Fare Allowance Scheme Total Pay-out Report ($) 49,865,027 38,380,573 9,269,079 5,087,963 13,114,080 115,716,722 GL Amount ($) 50,921,567 39,237,767 9,821,782 4,506,877 11,594,0802 116,082,073 Variance ($) 1,056,540 857,194 552,703 (581,086) (1,520,000) 365,351 In addition, there was no segregation of duty for the loading of bank files and validation to the correct recipients’ bank accounts.
Root cause/Implication The above was mainly due to the absence of reconciliation between the pay-out reports and the general ledger, which resulted in the misallocation of Social Protection Schemes payments in the FMIS general ledger not being detected on time for adjustment.
1 Finance Instructions 2010 Section 59(1) 2 General ledger amount $11,619,636 less other Bus Admin cost $25,556 equals $ 11,594,080 Ministry of Women, Children and Poverty Alleviation Section 24: Page 7 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR Recommendations The Ministry should: • perform monthly reconciliation of Social Welfare Pay-outs Report against the FMIS general • ledger; and strengthen internal controls on bank pay-outs such as segregation and rotation of duties in the loading of bank files and performance of reconciliations.
Agreed Management Action The Ministry has noted the recommendation; however, the Ministry will ensure to appoint a responsible officer who will perform the reconciliation.

Bank payout list are compiled from district offices.

It is done by the assigned clerical officers.

A district office has one clerical officer and performs this task as per their job description.
At HQ level, the consolidation of the payout list from all districts is again a manual process and requires one to perform all the possible checking within a limited timeframe.

This is again done as per one’s job description.

Rotation of duties may be a challenge if there is only one officer recruited for that job description at different locations.

The issue may be better resolved with the development of a payout system which will have security features and access to officers with different privileges.
It would require verification of records on any amendments and before final payout by the authorized officers only.

Ministry had some discussion with Ministry of Economy’s FMIS section on this and is currently liaising with the consultant.

Officers Responsible Principal Accounts Officer /Senior System Analyst/Assistant Director Family Services.
24.5 Payroll Variance between FMIS General Ledger and Payroll Report Reconciliation is an internal control mechanism established to ensure the accuracy of financial reports being produced not only at ministry/department level and/but most importantly at whole of government level.3 We noted variances between the FMIS general ledger and the Ministry’s payroll report balances for both SEG 1 - Established Staff and SEG 2 - Government Wage Earner.

Refer to Table 24.4 below for details.
Table 24.4: Variance between Payroll Report and General Ledger Payroll Summary Analysis PE-Salaries (FMIS GL) Add Allowances (FMIS GL) Add Overtime Add Relieving Staff Established Staff ($) 7,500,151 42,990 - - Government Wage Earner ($) 2,408,766 150,338 376,209 9,992 3 Ministry of Women, Children & Poverty Alleviation Finance Manual 2013 - Section 17.2.4 Ministry of Women, Children and Poverty Alleviation Section 24: Page 8 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR Payroll Summary Analysis Established Staff ($) Total Salaries - FMIS Less Payroll Summary Report as at 31/07/2019 (Less)/Add Salaries for Project Officers and Salaried Staff Variance 7,543,141 5,606,426 (1,482,921) 453,794 Government Wage Earner ($) 2,945,305 4,957,878 1,925,703 (86,870) Root cause/Implication The need to reconcile the FMIS general ledger balances to the Payroll Reports is not specified in the Ministry’s Finance Manual, thus reconciliation between these two records are not performed.
Recommendation The Ministry should incorporate into the Finance Manual the requirement to carry out reconciliation of weekly and fortnightly payroll report against FMIS general ledger.

Agreed Management Action SEG 1: The Ministry notes the variance in SEG 1.

The Ministry as per table in SEG 2 has identified that the total number of salaried staff being paid on a weekly basis during the period was 112 out of the 259 staff being paid.
The total amount of salary (established officers paid weekly) identified in the GWE payroll if all the Officers worked for the whole year amounted to $2,055,466.92 The variance however is $118,752.87.

This variance reflects the point in time Officers were appointed as the above figure of $2,055,466.92 is calculated if all the 112 officers work for the full year.

The other contributing factor to the variance is that the P2P stated a higher salary, however Officers were being appointed at a lower rate e.g.
the Disability Unit Welfare Officers in the P2P was reflecting pay as $28,605, however officers were appointed on WOII level with a salary of $22,574.

The recommendation is noted, however reconciliation mechanism has been put in place, to reconcile staff on the ground through MAR and Payroll report on a monthly basis.

In addition, the Ministry has reconciled with MOE on both Payroll and P2P for alignment of Post against Salary into the next FY budget.

This is done in agreement with the Ministry.


SEG 2: The Ministry notes the variance highlighted in SEG 2.

The Ministry has always been under budgeted in SEG 2.

One of the reasons on the over expenditure is the overtime done by Government Wage Earners.

A contributing factor is the number of Driver’s positions.

There are 52 vehicles in allocated to the Ministry, however we only have 37 drivers posts which means that there were 15 more vehicle without Drivers.
As a result, we hired around the same number of drivers to ensure the full utilization of the new vehicles being leased to Government.

The Ministry is putting measures to curb the over-expenditure.

In addition, the Ministry has reconciled with MOE on both Payroll and P2P for alignment of Post against Salary into the next FY budget.

This is done in agreement with the Ministry.
Ministry of Women, Children and Poverty Alleviation Section 24: Page 9 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR Officer Responsible Principal Assistant Secretary 24.6 Significant Number of Vacant Positions All vacant positions (both substantive and temporary) will be advertised for a minimum period of one week, through the means deemed appropriate with regards to the term of the positions and the skills, knowledge and abilities required to perform the duties of the position.4 We noted that the Ministry had a significant number of vacant positions at year end.
There was a total of 156 vacant positions or 41% of the total establishment not filled as shown below.

Table 24.5: Vacant positions Description Staff Established Positions as per P2P 31 July 2019 Number of Vacant Positions % Vacant Root cause/Implication Established Staff Government Wage Earners Total 289 121 42% 94 35 37% 383 156 41% The Ministry’s Corporate Services Section was not fully staffed to ensure that the recruitment process was promptly carried out.
Recommendation The Corporate Services Section should be adequately resourced to carry out the recruitment process for the Ministry.

Agreed Management Action The Ministry has noted the recommendation and the Ministry’s recruitment plan has been established.
Officer Responsible Principal Assistant Secretary 24.7 OMRS Guideline for Temporary Appointments not followed Section 2.5 of the Open Merit Based Recruitment and Selection guideline (OMRS) state that the guideline applies to all positions in ministries, including government wage earners, temporary and 4 Open Merit Based Recruitment and Selection guideline (OMRS) - Section 3.3 Ministry of Women, Children and Poverty Alleviation Section 24: Page 10 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR project staff and to all appointments including promotions, secondments and acting on higher positions.
We noted that the Ministry does not follow the OMRS guideline for the recruitment Temporary Officers (TRCO).

Of the 33 TRCO appointments verified, none complied with the requirements of the open merit recruitment process.

Root cause/Implication The Corporate Section was not adequately resourced to ensure the recruitment process is carried out.

Appointment of temporary officers are done through expression of interest to the Ministry, without being advertised.
There is high risk of biased and subjective appointments when the requirements of the recruitment process are not followed.

Recommendation The Corporate Services Section should be adequately resourced to carry out the recruitment process for the Ministry in accordance with the OMRS.
Agreed Management Action Effective immediately, all temporary positions will be advertised internally through Expression of Interest Officer Responsible Principal Assistant Secretary 24.8 Anomalies in Revolving Fund Account (RFA) The Accounts Officer shall update the debtors register, offset the advance account and debit the appropriate expenditure account upon clearance of the advance.5 The Ministry’s RFA, which records Accountable Advance, had an outstanding balance of $75,555 at year ended 31 July 2019.
The detailed report attached to the reconciliation statement did not include the outstanding balances each officer owed as at 31/07/2019.

Hence, we were not able to ascertain the correctness of the balance.

Root cause/Implication Proper reconciliation is not being carried out by the Ministry which is contributing to the issue highlighted above.

In addition, proper maintenance of accountable advance records, supervision and monitoring were lacking in the Accounts Section.
5 Ministry of Women, Children & Poverty Alleviation Finance Manual – Section 10.1.16 Ministry of Women, Children and Poverty Alleviation Section 24: Page 11 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR Recommendations The Ministry should ensure that: • accurate and proper reconciliations are prepared on a monthly basis and supervised by Accounting Heads; • outstanding accountable advances is reconciled and the debtors listing to be updated monthly; and • accountable advance register and records are properly maintained for reconciliation purposes.
Agreed Management Action The recommendation is noted by the Ministry.

Clearance of RFA for previous years has been reconciled and most charges are yet to be verified against its JV raised and records.

Also noting the previous balance from 2018 has been forward to MOE for clarification.
Officer Responsible Principal Accounts Officer 24.9 Non-Compliance to Health and Safety Act Every employer shall ensure the health and safety at work of all his or her workers.6 An employer who employs 20 or more workers in a workplace shall establish a Health and Safety committee for that workplace.
7 The Act also require that the employer to develop a policy relating to health and safety at work.8 We noted that the Ministry does not have a Health and Safety at work policy in place and a committee on health and safety has also not been established.

As such, the various OHS issues were noted in the Ministry as illustrated on Appendix 24.1.

Root cause/Implication The Ministry has breached the requirements of the Health and Safety Act 1996.
Recommendation The Ministry should comply with the requirements of the Health and Safety Act 1996.

Agreed Management Action The Ministry is liaising with Ministry of Labour on the processes to take to register the Ministry under OHS.
6 Health and Safety at Work Act 1996, Part 2 - Section 9(1) 7 Health and Safety at Work Act 1996, Part 3 - Section 18(1) 8 Health and Safety at Work Act 1996, Part 2 - Section 9(2f) Ministry of Women, Children and Poverty Alleviation Section 24: Page 12 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR Officer Responsible Principal Assistant Secretary 24.10 Non-compliance with internal controls on procurement and payments - Recurring Issue Immediately after payment has been effected, the Accounts Clerk must stamp “paid” on all vouchers and supporting documentation to avoid any double payments.
Additionally, all payment vouchers prepared by the Accounts Clerk must be certified by the Accounts Officer or the Senior Accounts Officer.9 Section 2.3.2 of the Finance Manual requires that competitive quotes must be obtained for payment less than $50,000.

Section 2.8.4 (ii) of the Finance Manual requires that payment must not be certified as correct unless there is documentation that the goods, services or works have been received.
Various anomalies relating to non-compliance with the requirement of the Finance Manual concerning procurements and payments of goods and services were noted.

These included the following: • Competitive quotations not obtained for purchases of goods and services.

• Payment vouchers and supporting documents were not stamped “PAID” once payments were processed.

• Lack of supporting documents for journal adjustments.

Refer to Table 24.6 for examples.
Table 24.6: Examples of Non-compliance with Finance Manual Date Payment ID Payee ID Amount ($) Competitive quotations not obtained 8/10/2018 8/28/2018 5/3/2019 10/30/2018 2/7/2019 2/7/2019 3/20/2019 8/30/2018 3/22/2019 4/18/2019 Payment vouchers and supporting documents not stamped PAID 3/6/2019 10/15/2018 Vendor 1 Vendor 2 Vendor 3 Vendor 4 Vendor 5 Vendor 7 Vendor 8 Vendor 9 Vendor 10 Vendor 11 22359 65679 28079 24071 26277 26289 27182 22745 27268 27872 Vendor 12 Vendor 13 26947 23412 2,335 4,095 4,044 633 340 454 400 580 3,549 300 8,568 4,837 9 Ministry of Women, Children & Poverty Alleviation Finance Manual 2013 - Section 2.8.9 Ministry of Women, Children and Poverty Alleviation Section 24: Page 13 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR Date Payment ID Payee ID 12/20/2018 11/28/2018 11/28/2018 11/28/2018 11/28/2018 3/19/2019 4/2/2019 25325 24710 24711 24715 24715 27174 27513 Lack of supporting documents Vendor 14 Vendor 15 Vendor 16 Vendor 17 Vendor 18 Vendor 19 Vendor 20 Amount ($) 19,364 18,576 80 2,042 3,450 188 17,760 Journal 09/11 Adjustment for misposting (Clearing of advance) the Women's into Institution allocation.
Reversed and posted into the WPO allocation 9,749 Root cause/Implication Non-compliance with the requirements of the Finance Manual increases the risk of double payments, unauthorised payments and creates opportunities for fraud.

Recommendation The Ministry should strengthen compliance with internal controls over procurement of goods and services.
Agreed Management Action The Ministry has noted the recommendation and has rectified some irregularities, adjustments been carried out and also noted that in future, this will not be repeated and necessary adjustments to be carried out if mispostings happens.
Officer Responsible Principal Accounts Officer 24.11 Misallocation of expenditures - Recurring Issue Senior Accounts Officer or Accounts Officer must not certify a payment as correct unless they are satisfied that the expenditure account it is charged to is correct.10 A review of the FMIS general ledger revealed misposting of expenditures in various Standard Expenditure Group (SEG).

Refer to Table 24.7 for examples.
10 Ministry of Women, Children & Poverty Alleviation Finance Manual 2013 section 2.8.4 Ministry of Women, Children and Poverty Alleviation Section 24: Page 14 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR Table 24.7: Misallocation in the Expenditure General Ledger Date Payment ID Amount ($) Posted to Allocation Correct Allocation 10/5/2019 28184 1,121 SEG 5 – Purchases of Goods & Services 12/18/2018 24867 10,418 SEG 4 – Maintenance & Operations 11/01/2019 25669 5,011 SEG 4 – Maintenance & Operations 6/10/2019 28714 6,133 SEG 4 – Maintenance & Operations 22/8/2018 22579 100,000 SEG 10 – Capital Grants & Transfer 29/05/2019 28442 10,000 SEG 10 – Capital Grants & Transfers 22/07/2019 29542 10,000 SEG 10 - Capital Grants & Transfers 07/06/2019 28705 29,170 SEG 6 - Operating Grants & Transfer SEG 3 – Travel & Communications SEG 5 – Purchases of Goods & Services SEG 5 – Purchases of Goods & Services SEG 5 – Purchases of Goods & Services SEG 6 – Operating Grants & Transfer SEG 6 - Operating Grants & Transfer SEG 6 - Operating Grants & Transfer SEG 5 – Purchases of Goods & Services The mispostings identified during the audit could not be adjusted /corrected as savings in the respective allocations were inadequate to cover the mispostings.
Root cause/Implication Accounts Officers did not properly check the allocations where the payments were to be charged before certifying payments, which indicated that expenses in each expenditure allocation were not appropriately monitored.

Recommendations The Ministry should ensure that all transactions are posted to the correct allocations in the FMIS general ledger.
If there are unavailability of funds in an allocation, the Ministry should ensure that virements of funds are considered for any savings from another allocation as required by the Financial Instructions 2010.

Agreed Management Action The Ministry has noted the recommendations.

One have been adjusted – (Organisation X) refer to FMIS printout.

Payments to (Organisation Y) – allocation has been debited correctly as this payment falls under Grants to Voluntary organizations.
Officer Responsible Principal Accounts Officer /Senior Accounts Officer Ministry of Women, Children and Poverty Alleviation Section 24: Page 15 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR 24.12 Finalisation of the Financial Statement - Recurring Issue Permanent Secretaries are requested to ensure that Accounting Heads comply with requirements to ensure that all AFS are properly prepared and financial accounts for the financial year ending 31 July 2019 are properly closed off and are ready for audit by Office of the Auditor General prior to the 31 October 2019.11 The financial statements of the Ministry for the year ended 31 July 2019 was received for audit on 28/02/20, four months after the deadline of 31 October 2019.
Second draft financial statements was submitted on 02/06/20.

Root cause/Implication The delay in the submission of the draft agency financial statements for audit was due to the late redeployment of funds which was approved by Cabinet on 4 December 2019 and uploaded onto FMIS on 16 January 2020.

The resubmission of the draft accounts for audit was due to incomplete statement of losses and disclosures.
Recommendation The Ministry should ensure that draft financial statements submitted for audit are accurate and complete.

Agreed Management Action The Ministry has noted the recommendation and will ensure to adhere to the timeline given and improve in the next financial year.

Resubmission was due to various reasons stated.
Officer Responsible Principal Accounts Officer 11 Ministry of Economy Circular 09/2019 - Closing of Accounts Processes and Procedures 2018-2019 – Section 19.2 Ministry of Women, Children and Poverty Alleviation Section 24: Page 16 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR 24.13 Risk Management Framework - Recurring Issue A review of the Ministry’s Corporate Governance revealed that there is no risk management framework in place.
As a result, the Ministry does not have written policies, procedures and guidelines to manage the following: Fraud control and anti-corruption • • Disaster recovery and business continuity Root cause/Implication The above finding was due to the lack of capacity within the Ministry to draw up a risk management framework.

In the absence of a framework, the Ministry may not be able to effectively identify risks and appropriately manage them in a timely manner.
Recommendation The Ministry should build capacity to ensure the risk management framework is put in place.

Agreed Management Action The recommendation is noted by the Ministry.

However, the mentioned plan for the Ministry will be included in COP for 2020-2021.
Officer Responsible Principal Assistant Secretary 24.14 National Council for Older Persons Not Established as Body Corporate - Recurring Issue Section 3 of the National Council for Older Persons Act 2012 states that the Council shall operate as a body corporate.

We noted that the National Council for Older Persons is yet to be established as a body corporate.

The Council operates within the Ministry and had been paid $1.1 million within the last five years, from 2015 to 2019.
Root cause/Implication Resourcing constraints is contributing to the delay in establishing the National Council for Older Persons as a body corporate.

Recommendation The Ministry should ensure that the requirements of the National Council of Older Persons Act 2012 are complied with.
Ministry of Women, Children and Poverty Alleviation Section 24: Page 17 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR Agreed Management Action The Ministry notes the audit recommendation.

The establishment of a statutory aspect via resourcing will be subject to the budgetary resourcing of the requirements to operate a statutory arm.

Thus, the Ministry will progressively implement accordingly.
Officer Responsible Principal Welfare Officer /Old Persons’ Unit Ministry of Women, Children and Poverty Alleviation Section 24: Page 18 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR PART C: ASSESSMENT OF FINANCIAL GOVERNANCE 24.15 Internal Controls During our audits, we assess the design and implementation of controls to ensure that they are suitably designed to prevent, detect and correct material misstatements.
Where audit strategy requires, we also test the operating effectiveness to ensure the internal controls are functioning as designed.

A deficiency occurs when internal controls are unable to prevent, detect or correct errors in the financial statements or where controls are missing.

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

It requires immediate management action.


Internal controls are categorized against the following five components of internal control.
A summary of assessment of key controls based on our audit was as follows: Control Environment Risk Assessment Control Activities    Information & Communication Control  Monitoring Activities  In view of the above, we have assessed the internal controls of the Ministry as: Rating  Generally effective Internal control assessment There were some deficiencies identified in internal controls Ministry of Women, Children and Poverty Alleviation Section 24: Page 19 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR 24.16 Submission of FY 2018-2019 Draft Agency Financial Statements On 29 May 2019, the Permanent Secretary for Economy issued Circular No.
09/2019 to Permanent Secretaries, Heads of Departments, High Commissioners and Ambassadors in Fiji Foreign Missions in which procedures for closing of 2019 accounts and times were detailed.

When Ministries and Departments achieve the key focus areas highlighted by the Permanent Secretary for Economy by the given dates, they are more likely to prepare accurate and timely draft financial statements for audit.
Based on information received, we have assessed the year-end close process as: Rating Year-end close process assessment  Ineffective Only four of nine key processes completed within two weeks of due date 24.17 Quality of Draft Financial Statements by entities The extent of audit adjustments made to draft financial statements indicates the effectiveness of an entity’s internal review processes before the accounts are submitted for audit.
We assessed the quality of financial statements by the impact these adjustments had on the operating results or net assets of the entity subject to our audit.

Our assessment for the Ministry was: Rating Quality of draft financial statements assessment  Ineffective No adjustments were required but the issues raised resulted in the qualified audit opinion.
Ministry of Women, Children and Poverty Alleviation Section 24: Page 20 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR 24.18 Timeliness of draft financial statements To assess the timeliness of acceptable draft financial statements, we have compared the date the draft financial statements were due and the date it was received.
Accordingly, we have assessed timeliness as: Rating  Ineffective Timeliness of draft financial statements assessment Acceptable draft financial statements received four months after the due date of 31 October 2019 24.19 Timeliness of Provision of Management Comments and Signing of Financial Statements To assess the timeliness of provision of management comments and signing of financial statements, we have compared the date the draft management letter and audited financial statements were issued to entity and the date management comments and signed accounts were received.
Accordingly, we have assessed timeliness as: Rating  Generally effective Timeliness of Management Comments Received Within 21 days from issue of Draft Management Letter Rating  Effective Timeliness of Signed Financial Statements Received Signed financial statement received within 15 days Ministry of Women, Children and Poverty Alleviation Section 24: Page 21 I R O T C E S S E C V R E S L A C O S – 9 1 0 2 Y L U J 1 3 I – ) a e r a g n k l a w i ( : 1 .
4 2 X D N E P P A 2 2 e g a P : , – 9 1 0 2 Y L U J 1 3 I – : , n e m o W f o i y r t s n M i REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR Section 25 Ministry of Youth and Sports Roles and Responsibilities The Ministry offers training to youths through five Youth Training Centres around the country, along with mobile training in rural and urban areas.
The training is run in close cooperation with other ministries, particularly the Ministries of Agriculture, Fisheries, Forests, and iTaukei Affairs.

The training is aimed at empowering young people to be productive members of the community and equipping them with the knowledge and skills to venture into specific income-earning opportunities.
The Ministry also drives sporting development in Fiji to encourage healthy lifestyle choices among Fijians of all ages, in addition to maintaining and building upon Fiji’s position as the Pacific hub for athletic competition.

The Ministry’s work falls within the framework of a number of existing policies that govern national sporting development.
Table of Contents PART A: FINANCIAL INFORMATION ............................................................. 2 25.1 Audit Opinion ............................................................................................................ 2 25.2 Appropriation Statement ........................................................................................... 2 PART B: OTHER SIGNIFICANT MATTERS ...................................................... 4 25.3 Operating Trust Account Anomalies - Recurring Issue ............................................. 4 PART C: ASSESSMENT OF FINANCIAL GOVERNANCE .................................. 6 25.4 Internal Controls ....................................................................................................... 6 25.5 Submission of FY 2018-2019 Draft Agency Financial Statements ............................ 7 25.6 Quality of Draft Financial Statements by entities....................................................... 7 25.7 Timeliness of draft financial statements .................................................................... 7 25.8 Timeliness of Provision of Management Comments and Signing of Financial Statements ............................................................................................................... 8 Ministry of Youth and Sports Section 25: Page 1 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR PART A: FINANCIAL INFORMATION 25.1 Audit Opinion The audit of the 2019 accounts of the Ministry of Youth and Sports resulted in an unqualified audit opinion.
25.2 Appropriation Statement The Ministry collected revenue totalling $89,964 in 2019 and incurred expenditure totalling $19.3 million against a revised budget of $24.1 million resulting in savings of $4.7 million or 19.5%.

Details of expenditure against the revised budget are provided in Table 25.1.
Table 25.1: Appropriation Statement for 2019 SEG Item Wage Established Staff Government Earners Travel Communication Maintenance Operations Purchase of Goods & Services & & Budget Estimate ($) 2,790,024 359,838 Changes ($) (63,704) --- Revised Estimate ($) 2,726,320 359,838 Actual Expenditure ($) 2,232,456 232,855 Lapsed Appropriation ($) 493,864 126,983 359,400 1,200 360,600 261,968 445,100 14,700 459,800 384,864 98,632 74,936 1,288,945 31,800 1,320,745 1,070,748 249,997 Ministry of Youth and Sports Section 25: Page 2 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR SEG Item Operating Grants & Transfers Special expenditure Total Operating Costs Capital Construction Capital Purchase Capital Grants Transfers Total Expenditure Value Added Tax TOTAL Capital & Budget Estimate ($) 13,345,273 1,768,808 20,357,388 --- --- 3,391,000 Changes ($) Revised Estimate ($) Actual Expenditure ($) --- 13,345,273 13,092,560 Lapsed Appropriation ($) 252,713 (25,283) 1,743,525 (41,287) 20,316,101 --- 41,287 3,391,000 --- 41,287 --- 1,209,568 18,485,019 --- 41,285 654,250 533,957 1,831,082 --- 2 2,736,750 3,391,000 41,287 3,432,287 695,535 2,736,752 347,500 24,095,888 --- 347,500 --- 24,095,888 174,443 19,354,997 173,057 4,740,891 The budget savings were largely due to the following: 1.
For Established Staff (SEG 1) of $380,411, this was due to vacant positions not filled during the financial year.

2.

Savings in Special Expenditures (SEG 7) was mainly due to the following: • A balance of $194,450 was recorded under the allocation for Youth Workers Pilot Project allocation as the appointments of youth workers were suspended until the endorsement of restructure.
• A balance of $148,618 was recorded in the Special Training allocation due to the delay in implementing empowerment training for the Eastern Division, specifically for Gau, Nairai, Batiki and Koro Islands.

• A balance of $136,140 was recorded under the Volunteer Youth Organisation Training allocation as training requests were withheld due to the delay in endorsement of Youth Grant Policy.

This was completed on 10 February 2020.

3.


Savings in Capital Grants & Transfers (SEG 10) budget was mainly due to the following: • Major savings of $1.78 million was recorded in the Construction of Rural Sports Complex allocation due to the delay in the engagement of a lead consultant for the assessment of 10 rural sports field as per the Constructions Implementation Unit requirements.
In addition, there were changes in the scope of works from the Ministry of Infrastructure and Transport due to drainage issues.

• Major savings of $288,880 was recorded in Youth Training Centre Upgrade due to the delay in obtaining Government Tender Board’s approval for the Naleba Youth Training Centre project in Labasa.

In addition, the implementation of projects for Nasau (Sigatoka) and Naqere (Savusavu) were deferred to the following financial year.
Ministry of Youth and Sports Section 25: Page 3 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR PART B: SIGNIFICANT MATTERS The Audit Act 1969 requires, amongst other things, that the Auditor-General must report on other significant matters which the Auditor-General wishes to bring to the attention of Parliament.
Other significant matter highlighted in this report, include control weakness which could cause or is causing severe disruption to the process or on the ability of an auditee to achieve process objectives and comply with relevant legislation.

It is likely that this issue may have an impact on the operations of the Ministry in future, if necessary action is not taken to address them.
It is important to note that the deficiencies detailed in this report were identified during our audit and may have been subsequently resolved by the Ministry.

These have been included in this report as they impacted on the overall system of control of the Ministry as at 31 July 2019.
25.3 Operating Trust Account Anomalies - Recurring Issue Within 3 days of receiving the monthly general ledger reports from the Ministry of Economy (FMIS), the Assistant Coordinator Finance (Ledger) shall reconcile the ledger balances to the general ledger reports and prepare a ledger reconciliation statement.
Any errors or misallocations must be immediately adjusted by way of journal vouchers.1 The Ministry maintains an Operating Trust Fund account for payroll deductions and others such as for superannuation (FNPF), insurance, deductions for Credit Union and VAT on revenue.

We noted that a sum of $20,532 has been carried forward from prior year ending 31/07/2017 and has not been rectified at the end of financial year 31/07/2019.
Refer to Table 25.2 for details: Table 25.2: Balances carried forward since 2017 Particulars 12510125101861599 – PD Others 12510125101861901 – PD Tax Arrears/PAYE 12510125101861920 – PD Employees FNPF 12510125101863201 – VAT on Revenue 12510125101899999 - Miscellaneous TOTAL Root cause/Implication Balance at Year End 31/07/19 ($) Balance as at 31/07/17 ($) (7.87) (4,617.53) (24,313.64) (70.21) (6,479.98) (7.87) (4,247.61) (10,745.81) 949.26 (6,479.98) (20,532.01) The Operating Trust Account was not properly reviewed and reconciled for the prior year’s balances.
1 Ministry of Youth & Sports Finance Manual 2017- Section 15.3.4 & 15.3.5 Ministry of Youth and Sports Section 25: Page 4 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR Recommendation The Ministry should improve the Operating Trust Account reconciliation process by strengthening supervisory checks and identifying long outstanding balances to be rectified.
Agreed Management Action The Ministry concurs with the audit finding on the operating Trust fund anomalies due to the accumulated balances within SEG 86 (Operating Trust fund) and SEG 89 (Miscellaneous Trust Fund).
Re-assessment and verification of the balances as accumulated in the General ledgers for SEG 86 and SEG 86 had been carried out through the Ministry’s Finance Team and necessary adjustments were facilitated, with the accumulated balances further requested for adjustment to the Ministry of Economy for SEG 86 dated 30 July 2018 and SEG 89 dated 30 April 2018.
The Ministry has being continuously following up on the adjustments since the submission and further written to the Ministry of Economy through the Permanent Secretary’s office on 08 November 2019.

Thus, the Ministry is continuously liaising with the Ministry of Economy on possible adjustment of balances with the Operating Trust Accounts.
The Ministry had strengthen its internal controls and standard operating procedures since the issue noted and established adequate supervision to monitoring timely reconciliation of accounts and rectification of balances to avoid such discrepancies from incurring in future.
Officer Responsible Manager Finance Ministry of Youth and Sports Section 25: Page 5 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR PART C: ASSESSMENT OF FINANCIAL GOVERNANCE 25.4 Internal Controls During our audits, we assess the design and implementation of controls to ensure that they are suitably designed to prevent, detect and correct material misstatements.
Where audit strategy requires, we also test the operating effectiveness to ensure the internal controls are functioning as designed.

A deficiency occurs when internal controls are unable to prevent, detect or correct errors in the financial statements or where controls are missing.

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

It requires immediate management action.


Internal controls are categorized against the following five components of internal control.
A summary of assessment of key controls based on our audit was as follows: Control Environment Risk Assessment Control Activities    Information & Communication Control  Monitoring Activities  In view of the above, we have assessed the internal controls of the Ministry as: Rating  Effective Internal control assessment No deficiencies identified in internal controls Ministry of Youth and Sports Section 25: Page 6 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR 25.5 Submission of FY 2018-2019 Draft Agency Financial Statements On 29 May 2019, Permanent Secretary for Economy issued Circular No.
09/2019 to Permanent Secretaries, Heads of Departments, High Commissioners and Ambassadors in Fiji Foreign Missions in which procedures for closing of 2019 accounts and times were detailed.

When Ministries and Departments achieve the key focus areas highlighted by the Permanent Secretary for Economy by the given dates, they are more likely to prepare accurate and timely draft financial statements for audit.
Based on information received, we have assessed the year-end close process as: Rating Year-end close process assessment  Generally effective Nine of Ten key processes completed within two weeks of due date 25.6 Quality of Draft Financial Statements by entities The extent of audit adjustments made to draft financial statements indicates the effectiveness of an entity’s internal review processes before the accounts are submitted for audit.
We assessed the quality of financial statements by the impact these adjustments had on the operating results or net assets of the entity subject to our audit.
Our assessment for the Ministry was: Rating  Effective Quality of draft financial statements assessment No adjustment on operating results/net assets 25.7 Timeliness of draft financial statements To assess the timeliness of acceptable draft financial statements, we have compared the date the draft financial statements were due and the date it was received.
Accordingly, we have assessed timeliness as: Ministry of Youth and Sports Section 25: Page 7 REPORT OF THE AUDITOR GENERAL OF THE REPUBLIC OF FIJI – 31 JULY 2019 – SOCIAL SERVICES SECTOR Rating  Effective Timeliness of draft financial statements assessment Acceptable draft financial statements received before 31 October 2019 25.8 Timeliness of Provision of Management Comments and Signing of Financial Statements To assess the timeliness of provision of management comments and signing of financial statements, we have compared the date the draft management letter and audited financial statements were issued to entity and the date management comments and signed accounts were received.
Accordingly, we have assessed timeliness as: Rating  Effective Rating  Effective Timeliness of Management Comments Received Within 14 days from issue of Draft Management Letter Timeliness of Signed Financial Statements Received Within 15 days from issue of Financial Statements for signing Ministry of Youth and Sports Section 25: Page 8 Back Cover www.oag.gov.fj www.oag.gov.fj