FRA’s Financial Turmoil

A comprehensive and detailed investigation is slated to follow the alleged financial mismanagement and contractual irregularities within the Fiji Roads Authority (FRA) spanning from July 2020 to July 2023.

The Minister for Public Works, Mete­orological Services, and Transport, Ro Filipe Tuisawau, disclosed this move after receiving the outcomes of a spe­cial audit conducted by the Office of the Auditor General (OAG).

Upon the appointment of the FRA board in April 2023, Ro Filipe high­lighted the immediate identification of systemic and governance break­downs, coupled with a severe cash flow crisis draining the organisation.

He said: "FRA had fully utilised its 2022/2023 capital budget allocation within five months without any capi­tal expenditure funds for the remain­ing seven months until July 2023."

The crisis deepened with substan­tial FRA arrears owed to contractors, prompting the board to take decisive action.

In collaboration with the line minis­try and the Ministry of Finance, the board secured a $50 million overdraft facility to settle arrears exceeding $40 million, enabling contractors to promptly resume crucial mainte­nance work from May to the present.

The findings of the audit revealed a total cost variation and escalation of $405 million, primarily facilitated and approved by the former board through flying minutes.

Key issues highlighted in the report include the absence of preliminary and feasibility studies, changes in project scope without calling for fresh tenders, inconsistencies in cost esca­lation formula application by Rip & Remake contractors under the main­tenance programme, and the use of retention funds by the FRA due to its cash flow crisis.

Additionally; the audit identified the absence of specific budgets for emer­gency works arising from natural dis­asters, as well as a significant number of vacant key and middle manage­ment positions crucial to FRA func­tions.

Ro Filipe acknowledged the gravity of the situation and the need to ad­dress the crisis promptly.

He further said: "The board has engaged a consultant to prepare its strategic plan and to reform the organisation, making it more efficient and effective in delivering its service while incorporating the audit's rec­ommendations."

The OAG auditors provided nine key recommendations, which both the ministry and the board are committed to implementing.

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