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Audit Report revealed


A political appointee in the Opposition office has questioned Ministry of Provincial Government and Institutional Strengthening (MPGIS) capability to manage the 100 percent increase of the Provincial Capacity Development Fund (PCDF).

This comes after an Audit Report by the Office of Auditor-General for the periods from 1st April 2012 – 31 December 2014 and 1st April 2016 – 31 March 2017 on the Renbel Province revealed interesting findings on how substantial amount of funds have not been accounted for.

The 2016-2017 OAG findings also revealed that some of the Province’s funds, have not been recorded and a register to keep track of revenue collected and payments made were not established to make it easy for checking and reconciliation of Provinces financial records.

This includes simple control mechanism such as the introduction of Special Imprest Register, performance of Bank Reconciliations (regular), revenue collection records and regular review of Provinces General Ledger to check and verify financial position and finances in general.

MPGIS permanent secretary, Stanley Dick Pirione told the Malaita Executive during their meeting in Auki early this year that the PCDF that targets Provinces small scale infrastructure developments is increasing it from $30 million to $60 million.

However, Kosui, an economist by profession, said the announcement of an increase of 100% to the PCDF is good news to the Provinces but is the Ministry of Provincial Government and Institutional Strengthening (MPGIS) capable of administering, monitoring and management of the funds disbursed to the Provinces?

“Under the current funding arrangement, provinces receive funding based on how they perform according to minimum requirements standards set by the Ministry.

“Assessments are done at the end of each financial year by technical people in specific areas to assess how the Provinces implement recommendations and relevant standards that align each province financial and other system’s management and administration to the SIG procurement processes and Public Finance Management Act (PFMA),” he said.

Kosui said while the 100 percent increase in funding is good news to the Provinces, it also leaves a lot of questions to be asked on how the MPGIS is able to get things under control, when some cases of corruption, abuse and misuse of funds have not been addressed.

He said the OAG has found that there was significant business and financial risks in the handling and management of Renbel Province’s finances which require further investigations or prosecution of those that involve in the mismanagement of the Provinces financial resources.

The OAG findings revealed that for the periods from 1st April 2012 – 31st December 2014 the following have been found:

  1. Premier collected licenses fees without depositing them in the Provinces bank account
  2. Misappropriation of $1.2 million of Provincial funds
  3. Awarding of PCDF to private company and construction of the Kia Koe Lodge
  4. Incurred $4 million in expenses on accommodation at the Heritage Park Hotel
  5. Mismanagement of funds that led to accumulated arrears that resulted in non-payment of Provincial direct-employee’s salaries for a period of 15 consecutive months

For the revenue’s collected in the periods from 2012 – 2014, a total of $3.08 million was collected from Samlinsan Logging Company, Bintan Mining, Mugaba Atoll, Eth Global Investment and Partners. From OAG findings, details of the revenue collected was sighted but unable to confirm if they are deposited in the bank accounts because the deposit books are missing.

In all, a total of $3.2 million was collected as revenue from companies operating in Renbel Province and a summary of their records revealed that OAG failed to ascertain how the funds have been used.

“These issues need to be put in order before any funds procured under the PCDF is nothing but a wastage of public funds.

“While the 100% increase in PCDF is good news to the Provinces, it is also important that the MPGIS ensure that financial management and administration of the funds are improved by 100% to ensure investment in the PCDF is not another hole that public funds are wasted,” he added.