ON May 15, 2002, then minister for Finance, Planning and Rural Development, Andrew Kumbakor, issued trust instrument for the establishment of a trust account to be called Sepik Highway Roads and Bridges Maintenance and Other Infrastructure Trust Account.
The objective of the trust was “to hold all monies received from the National Government, provincial government, local level government and any other donor agencies”.
Following the 2002 elections, the trust was kept but its name was changed, at least publicly, to the East Sepik Highway trust fund.
Persistent public complaints, including from Members of Parliament, alleging gross abuse of this fund, the permanent Parliamentary Public Accounts Committee conducted an inquiry on May 8-9, 2006.
The PAC requested the Auditor-General to undertake an audit of the Sepik Highway, Roads and Bridges Maintenance and Other Infrastructure Trust Account for the period May 2002 to the May 31, 2006.
The Auditor-General’s Office completed its investigation and provided management letters to the East Sepik provincial administrator and the acting secretary of Finance Department on July 12, 2006, requesting responses by July 26, 2006.
The East Sepik provincial administrator met with the Auditor-General’s Office staff on July 26, 2006, to discuss audit issues and subsequently responded in writing to the management letter in writing on Aug 1, 2006.
The PAC reported that the responses of many of the managers “was self-serving and ultimately these officers sought refuge in a claim that the committee had no jurisdiction to hold the inquiry at all”.
The PAC said of this kind of responses: “It is perfectly clear to this committee that these officers believe that they would never be called to account for their actions and did not intend to account for them.”
The purpose of the inquiry conducted by the PAC was to make full and complete examination of the manner in which the trustees of the Sepik Highways, Roads and Bridges Maintenance and Other Infrastructure Trust Account controlled transactions with or concerning public monies passing into and out of the account, accounted for those monies , protected the position of the Independent State of Papua New Guinea, complied with the trust instrument, complied with the requirements of law for the operation of such an account, controlled and monitored expenditure and generally conducted themselves as trustees.
The inquiry also sought to make a full and complete examination of the manner in which the Finance Department, its responsible officers and the relevant provincial administrations controlled, recorded, accounted for and acquitted transactions of public monies into and out of the trust account and, thereby, protected the State by complying with and requiring in others a compliance with all relevant laws.