Sepik Highway Trust existed out of Government’s budget

THE Sepik Highway Trust Account, as it is known in short, existed outside of the Government’s budgetary process.
In to it was poured money that was identified as “savings” from the national purse.
Out of it poured money into whatever project that pleased the trustees, regardless of whether or not the expenditure met the trust deeds.
The trust instrument was carefully considered by the Public Accounts Committee and noted to have been “poorly drafted”.
Poorer still was the manner in which purchases and withdrawals on the trust account was done.
While the trust instrument expressly spelled out highways and bridges maintenance, the trustees introduced “other infrastructure projects” such as house, buildings and payments for contracts for service and for “financial assistance”, whatever that meant.
Former finance secretary Thaddeus Kambanei told the PAC:
“It was called “Sepik Highway Roads and Bridges and Other Infrastructure Trust Account” because the infrastructure cuts through both East and West Sepik (Sandaun) provinces.
“So, it became a vehicle for any funds that had been identified as savings to be put into the trust account then the trust account facilitates the payment out.
“… I would like to make it very clear that there has also been expenditure that goes out of the trust account which pertains to projects that are not within the fiscal framework of the Government.
“For instance, if you have MPs who chose to identify projects and get the Prime Minister to approve the project without having it actually included in the budget, then they use the Sepik Highway Trust Account as the vehicle.”
The committee concluded thus: “The trust account was not regarded as part of any Budgetary process but as a conduit for any money identified (presumably by Mr Kambanei) as “savings” (no matter what their original designated purpose) to be applied to any unfunded project that attracted political favour but for which there was no approved or budgeted funding.
“If Mr. Kambanei is correct, all it took to get money from the trust account was to attract the support of the Prime Minister and Mr Kambanei’s only function was to find the money and pay it.”