Bad govt practice continues

 THE government’s long history of deplorable accounting practices continued in 2010, the Auditor-General has reported.

Corporate governance, internal audit controls, regular financial reporting requirements, budgetary and funds controls, bank reconciliations, assets management, procurement and payment procedure, personnel management, and trust accounts management were some of the important elements of proper accounting procedures found wanting.

Of the 18 national departments whose account books were examined by the Auditor-General, none passed comment and criticism.

The National Departments and Agencies Report II of 2010 was tabled in Parliament in February this year.

Internal controls, for which these departments have been criticised, were processes designed the world over to provide reasonable assurance that a public organisation abides by the applicable laws and regulations and ensured reliability of financial reporting and effectiveness and efficiency of operations.

Weak or dysfunctional internal controls basically meant that departments could not monitor or manage well enough to prevent, detect or correct serious errors or fraud.

The Auditor-General observed in his report: “The rests of the testing of accounts and controls in 2010 revealed weaknesses of such magnitude that material errors could have been processed or misappropriation and fraud could have occurred.

“Poor financial management, fraud and corruption are complex development issues in PNG and they can take many forms.

“Weaknesses in financial management and corrupt practices legitimises bad governance and diverts funding and energy away from development plans and achievement of national goals. Poor financial management, coupled with misuse of public money, has contributed to a decline in service delivery to the public. 

“And since Independence, financial mismanagement and corruption have had detrimental impacts on PNG’s development processes.”

The blame for this state of the accounts has once again been placed on the top management of each department and agency.

“The onus of responsibility in ensuring compliance with legislative, managerial and procedural requirements rests with heads of departments and agencies and their senior management,” the AG reported.

And yet, in the case of many departments, where the AG wrote to senior management pointing out weaknesses, there had been no responses up to the date of presentation of the report to Parliament.