K1.9m ravaged

Main Stories, National

The National – Monday, July 4th 2011


A TOTAL K1.9 million of the development budget has been committed in just three months and much of it in questionable projects, an investigation reveals.

The investigation, conducted by private law firm, Korowi Lawyers, into the Department of National Planning further asserted that a network of senior workers have been awarding themselves lucrative contracts from the development budget to their own companies.

The report, hastily put together in a short space of time on the directions of rein­-

stated secretary, Joseph Lelang, contained names of the senior officers, their companies and instances of the alleged transac­-

tions along with cheque details. 

Copies had been sent to Acting Prime Minister Sam Abal and the fraud squad.

The report cited acting secretary Ruby Zarriga and Minister Paul Teinsten as ha­ving turned a blind eye on the actions of 

the senior officers. Both were recommended for serious disciplinary actions.

Nearly K23 million out of a K30 million, allocated under the church-state partnership programme, was reported to have disappeared leaving only K22,000 in the till as of June 1.

The report further recommended that a number of projects totalling K33.7 million would need to be further investigated while some 17 payments, totalling K14.3 million, were made without any project documentation received.

Other recommendations were:  

.That head of department to commence disciplinary proceedings and refer officers to the police fraud and anti-corruption squad for criminal investigation;

.Use the proceeds of Crime Act to recover all monies paid out as well as repossessing tangible properties;

.For the acting prime minister to commission an inquiry into this year’s development budget by allowing for independent investigators;

.To discipline acting secretary Ruby Zarrigga and minister Paul Teinsten; and 

.To abolish the Department of National Planning and Monitoring and transfer all financial powers to Treasury Department, the adoption of one appropriations Act and transfer of policy and planning functions to the Prime Minister’s Department.

A total K1.9 billion, which comprised 90% of the national government component of the K4.2 billion development budget, was alleged to have been mismanaged.

The balance of the budget comprised foreign aid monies, of which 75% was from AusAID.

The K1.9 billion in total warrant authorities were reportedly released by the Department of Treasury of which K735 million in project monies were placed under trust accounts held by the Department of Finance.

A remainder of K1.2 billion was released to projects by the Department of National Planning and Monitoring over three months from March to May.   

While lengthy future scrutiny would reveal what had happened to all the funds, several incidences of mismanagement of the development budget programmes were discovered and contained in the report.

For example, the district market programme was allocated K20 million under the budget. Of this, a total K10.442 million was released in two batches leaving a balance of K9.558 million. However, the report revealed a nil-balance with the money transferred or diverted elsewhere.

It was further revealed that certain districts did not acquit previous funds but still continued to receive funding. These included Telefomin, Imbonggu and Talasea markets.

The report revealed that senior managers of the department received much of these funds through several private companies (registered with IPA) to benefit themselves and their cronies.

A total K30 million was allocated to social development funds governed by the church-state partnership framework and executed between the state and church partners in October 2008.

It was reported that between March and May this year, a total of K7,160,263.66 was released to projects without records for the balance of K22,817,321.34. 

The balance as of June 1 was only K22,415.