Report by opposition claims K500m abused

National, Normal

The National, Tuesday 29th November 2011

THE national government has blown out about K500 million within three months in unbudgeted funds which will have serious deficit implications, it has been revealed.
The figure was released by the opposition in a confidential report which included a print-out of a list of expenditure and payments totalling K439,935,647.07.
But the government yesterday described as “hogwash and misleading” the claim by the opposition that there had been significant expenditure outside the budget in three months (details on page 2).
The report claimed that the handling of the funds was unlawful and expended with non-compliance of the Public Finance Management Act and Appropriation Act.
Some frontline MPs in government were also named as receiving between K5 million and K16 million. A law firm got K18 million.
The report was made in anticipation of the Supreme Court ruling on Dec 9.
It pointed out corrective actions to ensure prudent financial management were maintained by the Department of Finance.
The report said: “The payments are made from accounts receivable notional cash book (consolidated revenue) and used by the current management to draw cheques from unbudgeted claims directed by the minister for finance or acting secretary at their discretion.
“These payments are expenditures incurred not from the lawful budget appropriation, none from any lawfully established trust accounts.
“The gross misuse and misapplying of public funds and drawing from consolidated revenue fund will have serious budget deficit implications and, subsequently, result in a negative cash position and a bank overdraft balance as at the end of the 2011 fiscal year.”
It stated that the 2011 supplementary budget of K600 million had been deposited into various established supplementary trust accounts.
“This will immediately draw down the current Waigani public accounts balance into overdraft balance. The implication will be that government cheques can be dishonoured immediately.
“It will be of serious concern when cheques are dishonoured. The public and private sector will lose confidence in the government for mismanagement of public funds and will reflect negatively on the current government.”
In a media conference, Madang Regional MP Sir Arnold Amet and Wabag MP Sam Abal challenged Sir Mekere Morauta, Bart Philemon and Sir Puka Temu who have been preaching about transparency and good governance to tell everyone whether they knew of what was happening.
The conference was also attended by parliamentarians Sani Rambi, Philip Kikala, Francis Potape and Tony Aimo. They gave copies of the report with expenditure details to the media.
Abal said they had evidence to prove that the treasurer had used his powers to approve 210 project funds totalling almost K500 million which, he said, was gross mismanagement and misappropriation of public funds and the PFMA.
He said the highlands region received the bulk with K168 million, Momase got K99 million, Islands region received K98 million and Southern K63 million.
Of the amount, all but four provinces and 24 open electorates completely missed out.
Abal said more interestingly, the frontline of the purported government benefited with Speaker Jeffery Nape receiving K15 million, Don Polye K12 million, Belden Namah K16 million, Peter O’Neill K14 million, East New Britain provincial government K10 million, Sir Puka K5 million, Dr Bob Danaya K6 million and Young and Williams Lawyers K18 million.
Sir Arnold said the 2012 budget, yet to be handed down, should be a balanced budget but the people now knew that this government, since it took office, had been plundering Finance and Treasury.
“These are excessive hand-outs to individual members of parliament and ministers to keep their support. The 2012 budget will run into a deficit once it is handed down.”