The National, Friday, 27th May 2011
By FRANK SENGE KOLMA
THE system of trust accounts into which millions of kina has been parked since 2006 has failed to ensure the proper and lawful handling of public monies or to effect government policy, the Public Accounts Committee has reported to parliament.
This had result in failed development and service delivery, it said.
Accounting of trust accounts in which some K6 billion of excess money from high commodity prices were kept and spent had collapsed by 2007 and had not improved to this year.
PNG may never know how much exactly these windfall gains had evaporated since the last of these funds were expended in 2009.
The PAC reported widespread and significant misconduct, misappropriation and defalcation by trustees or signatories across the whole span of government from national agencies right down to the district level.
Not one agency of government complied with all trust accounting requirements and almost all obeyed none of the requirements and this situation still prevailed this year.
Among others, the PAC listed the following:
.Trust managers regularly breached their duties and
obligations with no fear of
detection or punishment;
.There was no reliable register of trust, accounts, bank accounts, trust instruments or monies held in the accounts;
.Neither the PAC nor the government knew or could ascertain the number of trust accounts, the amount of money in them, the true balance of trust accounts, the identity of trustees, the terms of trust instruments or any other incident of the trusts;
.Trust accounts were regularly overdrawn – a legal impossibility;
.Departments responsible for service delivery, co-ordination, development and applying appropriated monies for these purposes had failed to do so and treated trust monies as they pleased – often acting on political direction or pressure;
.Trust accounts which had been closed and which had been unused for years were still operating;
. Trust accounts recorded as having nil balance actually had funds at the bank while accounts which purportedly had balances actually had nil balance; and
. By 2007 the Finance Department had engaged in illegal, unconstitutional and significant mishandling and application of trust accounts and funds under its control.
The list of failures ran on so much so that the PAC reported that it, the auditor-general and fiscal good governance had been held hostage to intentional, planned and deliberate refusal by government bodies to act lawfully and to account properly.
The committee recommended that the government should embark urgently on a programme of training and capacity building for officers charged with handling and applying public monies.
It further recommended the establishment of training colleges and ongoing courses of training and retraining throughout the country.
“This misconduct has been so significant that it has derailed national service delivery and national development and very largely rendered government impotent to effect
its plans and policies,” the PAC report into the 2007 public accounts stated.
“In many ways, this single collapse of accountability has, and continues to, impoverish and marginalise many of our citizens through failed health, education and other service provision.”
The committee recommended to parliament to reassert the full financial systems for the benefit of all citizens who own the money collected and is spent by government every year.