Pruaitch demands probe on K500m spending

THE opposition has demanded an immediate and thorough investigation into the government’s K500 million spending of public funds “not budgeted for”.
Former finance and treasury minister Patrick Pruaitch in a statement said the auditor-general and law enforcement agencies should act swiftly to investigate where these payments were made from and whether there was com­pliance with the Public Finance Ma­nagement Act, the Appropriation Act and other enabling legislations.
Pruaitch said the denials by Prime Minister Peter O’Neill and Treasurer Don Polye that those funds were from the 2011 budget, the supplementary budget and trust accounts were baseless.
“These denials are baseless because as the treasurer who brought down the 2011 budget, the supplementary budget and gave approvals for the establishment of various trust accounts for appropriations to be transferred, I am well versed with the details of the appropriations passed by parliament,” he said.
“It must be made clear that these payments for projects as claimed were never budgeted for in the 2011 budget and, sadly, arise out of shopping lists submitted and instructed by the prime minister, treasurer and other ministers in cabinet.
“These payments, as stated, are expenditures incurred not from the lawful budgetary appropriations or from any of the lawfully-established trust accounts.”
Pruaitch said he was convinced from the evidence available that the government had gone on a wild spending spree almost overnight by directing payments to be made illegally from sources other than those normally budgeted for and not in compliance with processes and procedures stipulated in the Public Finances Management Act.
“This unprecedented spending, totalling more than K477 million in such a short period of time, may create serious negative budgetary implications and may lead to negative cash flow position and force the government to call for domestic financing which will increase the domestic debt
portfolio,” he said.
He said the government elected themselves to office on a platform of fighting corruption but wasted no time in engaging in the very activity they were advocating against.
He said the acting secretary for finance, Steven Gibson, was directed and used as a puppet to approve and draw cheques out of what was referred to as the “accounts receivable cash book”.
“As a former treasurer, I am also aware that K200 million was drawn from trust accounts to reimburse monies illegally paid from the Waigani public account.
“This is unlawful and against the purpose of the trust deeds governing the establishment and operation of trust accounts,” Pruaitch said.
“I am concerned that the Department of Finance has lost control of prudent financial management practices and allowed undisciplined budget management which will lead to a serious budget deficit and, consequently, may result in a negative cash position.
“This is a serious state of affairs as it breaches the Public Finance Management Act, its procurement and accounting procedures, established trust account instruments and Appropriation Act.
“We, therefore, call for an immediate investigation by re­levant law enforcement agencies including the auditor-general’s office, Ombudsman Commission and the police fraud squad,” Pruaitch said.