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K2million MP
SWEEPING changes have been announced at
Finance and Planning Department following fresh revelations of fraud and
abuse of processes.
The changes, designed to instill control and prevent fraud and abuse,
were initiated by Chief Secretary Isaac Lupari.
This followed an instance where a politician from the Highlands walked
into the Department of Planning and Monitoring and picked up a K2
million cheque meant for development projects in his province and cashed
it the same day.
This occurred despite a direction from the Chief Secretary to the
department to freeze payments of funds known as Special Support Grants,
a source said.
Mr Lupari ordered the freeze due to widespread violation of guidelines
in the disbursement of these funds.
He has also ordered a review and a detailed report of disbursements of
these funds since 2003.
The source said Mr Lupari was angry that officials at Planning
Department, which manages the funds, ignored his directions and that the
Central Bank cleared the cheque for the politician to cash without
checking with Finance or Planning.
Part of the sweeping changes would see the Department of Planning lose
its self accounting status. This means it can no longer print and
disburse cheques. That function has been transferred to the Department
of Finance.
Also, Finance Secretary Gabriel Yer, has issued instructions to
commercial banks not to authorise same day clearance of cheques.
He urged that all Government cheques paid from accounts held at the Bank
of PNG must have a mandatory seven-day clearance.
“This means that with immediate effect, the practice of same-day
clearance and encashment of Government cheques, with the exception of
salaries and travel allowances, will cease,” Mr Yer said in a statement.
He said the seven-day clearance conforms to normal banking practice and
gives adequate time for checks and balances, proper examination and
certification before cheques are cashed. This will also avoid
third-party negotiation of cheques.
Nr Yer said this applies to all Government cheques drawn from all
Government departments, provincial governments and local-level
governments.
He added that cheques drawn must be made payable to the person named as
the payee, not written out for cash payment.
 
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