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Glaring Errors In 2016 Auditor-General’s Report

Glaring Errors In 2016 Auditor-General’s Report
At yesterday’s press conference revealing the errors in the Auditor-General’s Report from left: Deputy Auditor-General Sairusi Dukuno, Auditor-General Ajay Nand, Permanent Secretary for Economy Makereta Konrote and Chief Accountant for the Ministry of Economy Pankaj Singh in Suva on August 31, 2017. Photo: Jone Luvenitoga
September 01
11:03 2017

Auditor-General Ajay Nand yesterday apologised for glaring errors in the 2016 report.

Unfortunately, for the 2016 report, certain media and others had made observations and arrived at conclusions before the proper scrutiny of the Public Accounts  Committee.

He said these observations and conclusions had been based on the misinformation in the report.

He said: “I would like to sincerely apologise to the Fijian people for the errors in the 2016 report and I wish to assure the Fijian public that this will not happen again under my watch.”

He said the errors arose because of the archaic audit practices within the Office of the Auditor-General.

Mr Nand said the report in question was tabled in Parliament on July 11, 2017. He said it had a number of errors which needed to be corrected and clarified.

Mr Nand said he intended to review the capacity and capability of the staff at the Office of the Auditor-General.

“Reforms are underway to modernise the audit process and methodology and do away with archaic practices that do not enable the true audit position to be correctly reflected,” he said.

He thanked the Permanent Secretary for Economy, Makereta Konrote, and chief accountant for highlighting the errors in the report.

He highlighted the key errors in the 2016 report:

The 2016 report incorrectly highlighted the non-submission of audited accounts for some entities which amounted to a total value of $245.07 million; in fact, a number of draft

accounts were already submitted to the Auditor-General’s Office and a number of agency reports have already been audited. I will provide a list to the media on this.

The statement that purchases worth $2,593,374 of ‘family packs’ for Cyclone Winston victims were not properly procured.

However, Mr Nand said this procurement was done in accordance with the Procurement Regulations 2010, which permits the Ministry to make such purchases during times of emergency.

The 2016 report states that the approval from the Ministry of Economy was not obtained by the Ministry of Women, Children and Poverty Alleviation in relation to budgeted purchases totalling $6,947,335.

Mr Nand said the Ministry of Economy, however, did not have the power to approve transactions for other Budget sector agencies; approval of transactions is granted by the relevant permanent secretary. The Ministry of Economy merely confirms the availability of funds in the budget for the agency.

The 2016 report raised an issue in relation to use  of funds to the tune of $4,600,000 for the sugarcane replanting programme when the  funds were earmarked for sugar rehabilitation post-Cyclone Winston.

Mr Nand said this was not an issue as the use of funds for the ‘Sugar Development Program’ (Head 35) for the purpose of cane replanting is within the ambit of the objective of the Sugar Development Program, which is to increase cane production.

The 2016 report raised the issue of missing share certificates with a value of $14,684,469 in relation to shares owned by the State.

Mr Nand said entities such as the International Finance Corporation and International Bank for Reconstruction and the Development did not issue share certificates, so such certificates could not be missing.

“This has been confirmed in writing by both organisations”. Moreover, third party confirmations were given by the State Owned Enterprises (SOE’s) advising the value of investment by Government.  He said this gave the assurance and confirmation of Government’s investment as provided by the directors of SOE’s. He also said given that there were no new equity investment during the period report, the office, in line with the modern audit practices could have relied on the share certificates previously provided by the Ministry of Public Enterprises.

He said the public needed to know that the whole of the Government report was unqualified.

He said it meant there were no significant with the financial statements and “this finding remains the same.”

He stated that during his term as the Auditor-General he would ensure more professional and qualified people were appointed and that they engage in an open merit and recruitment selection process.

Mr Nand further said the office was working to improve all external and internal communications to ensure that the reports prepared by their office correctly reflected the true audit position of the Government’s account.

He added that the Auditor-General’s Office intended to compile a supplementary report to the 2016 report to correct the errors in the report.

He said he would table the report via the Attorney-General and Minister for Economy Aiyaz Sayed-Khaiyum at the next Parliament sitting so that when the public scrutiny took place it was not based on fundamental erroneous material.

Edited Naisa Koroi

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