Poor book-keeping by depts
THE record of losses and deficiencies of public monies reported by the Auditor-General in the 2005 Public Accounts number just 11 instances.
They totalled K6,678,977. None of the money was recovered.
Of these, 10 instances were recorded in the Department of Education totalling K78,977 and one instance recorded in Finance Department headquarters of an amount of K6,600,000 in fraudulent payment using monies held in a trust account used to hold royalty monies relating to mining operations payable to certain landowner groups.
It appears, so far as the Auditor-General’s report of Public Accounts for that year is concerned, the Education Department is the most corrupt of all the departments, provincial governments, agencies, institutions and wholly owned companies of the government .
That is until one reads the notes to the record of losses and deficiencies. It reads in part: “Division 4 of Part 28 of the Finance Instructions, issued in accordance with Section 117 of the Public Finances (Management) Act, makes it mandatory for all losses and deficiencies to be reported to (the) Chief Inspector and the Auditor-General within 14 days of the loss or deficiency being identified.
“During 2005 departments and agencies (with the exception of the Department of Education) failed to comply with this requirement with the result that losses and deficiencies reported in these accounts are substantially understated.”
The Public Accounts report for 2003 and 2004 also show the Education Department to have reported the most number of instances of losses and deficiencies with similar remarks from the Auditor-General.
It turns out the Education Department is more efficient, not less, and that the entire public service system of government has failed in consecutive years and may still be failing to fulfill a simple yet mandatory requirement in the management of public funds in Papua New Guinea. The departments are simply not keeping their books.
Does this mean that the Education Department is employing the best and the most proficient accounting brains in the country? I think not.
It takes no genius to uncover or report a loss. A salary cheque for K11,900.35 was reported missing by the would-be recipient to the Personnel Section of Central Education Office sometime in August 2004.
Upon checking, it was discovered that salary cheque No. 12327235 dated Aug 4, 2004 payable to an officer in that amount was removed from the Simbu payroll batch by an unknown person and fraudulently negotiated and cashed at a company calling itself Nasinu No. 16 Ltd at Boroko between Aug 4 and Aug 10. The matter was reported to police for investigation and prosecution of the officer concerned.
In another instance, an officer deliberately created a file for a teacher who had resigned in 2002 and fraudulently processed and paid a total of K28,931.46 in salaries and allowances into her bank account and benefited from it for her personal use until she was found out and referred to the police.
A salary cheque No. 10685089 dated Dec 12, 2003, payable to an officer amounting to K4,401.01 went missing while in custody of a dispatch clerk and an assistant dispatch clerk during the process of dispatching payroll cheques for Eastern Highlands province. Both officers were tasked to compensate for the loss incurred by them.
And so on and so forth. The cases flow on. Dates, officers’ designations, cheque numbers and when and how certain losses occurred are recorded and reported.
Quite apart from the fact that certain of the cases mentioned would make interesting case studies – how many ghost names are on the government salary roll and how many dispatch clerks are colluding to defraud other officers of their hard earned salary – the heart of the corruption issue in PNG is here revealed: Simple, well laid down, tested and tried rules of accounting are just not being followed.
From looking at all the instances reported, none would require a lot of brain power or Sherlock Holmes sleuthing but they do require patience, diligence and attention to detail – essential requirements in all accounts personnel.
Now to think that in of all the 32 national government departments and the 19 provincial governments and their administrations and the 400 plus local level governments, the many commercial statutory bodies and the wholly government owned companies, such simple checks and balances are being neglected.
It is no wonder PNG is fast descending the ladder of Transparency International down to the pits of the most corrupt nation on earth.
Government expenditure each year is limited to the funds appropriated by the Appropriation Act or Special Appropriations passed by Parliament during Budget. In practice, departments are issued with a warrant authority that gives them the right to spend public money but only to the limit of the warrant.
Departmental heads are responsible for ensuring that total expenditures incurred within their departments are within the warrant authorities issued to them.
Only the minister is empowered to authorise any expenditure in excess of appropriations.
Detailed procedures are laid down in the Finance Regulations and Instructions for commitment of expenditure and payment of claims.
All requisitions of goods or services have to be approved by designed officers. Financial delegates will then certify whether funds are available to commit the approved expenditure.
Claims received from suppliers are first checked by an examiner, before making payments. Duties and responsibilities of financial delegates, certifying officers and accounting officers are laid down in the Financial Management Manual.
Purchases over certain amounts have to be approved by the Supply and Tenders Boards. Similar rules apply for salaries and capital works and all other payments involving public funds.
Receipts require similar stringent processes of recording to ensure all government funds received are paid into the Consolidated Revenue Fund which maintains all receipts in a single fund. This is to ensure effective surveillance and control of public monies.
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