Audit Report on Whole of Government Financial Statements and Annual Appropriation Statement ...

138 Pages·2017·15.57 MB·English

EXCELLENCE IN PUBLIC SECTOR AUDITING

REPORT OF THE AUDITOR GENERAL OF THE
REPUBLIC OF FIJI

Volume 1

Audit Report on Whole of Government Financial
Statements and Annual Appropriation Statement 2015

PARLIAMENT OF FIJI
PARLIAMENTARY PAPER NO. 58 OF 2017
EXCELLENCE IN PUBLIC SECTOR AUDITING

REPORT OF THE AUDITOR GENERAL OF THE
REPUBLIC OF FIJI

Volume 1

Audit Report on Whole of Government Financial
Statements and Annual Appropriation Statement 2015

PARLIAMENT OF FIJI
PARLIAMENTARY PAPER NO. 58 OF 2017

Foreword

The 2015 accounts of Whole of Government of Republic of Fiji together with 37 Ministries and
Departments were audited during 2015, with their audit reports and relevant findings on them reported
in accordance with section 152 of 2013 Constitution of Republic of Fiji.
The audit of Whole of Government concludes with an unqualified audit report. The accounts have
been faithfully and properly kept in accordance with section 152(2) of the Constitution, section 6 of
the Audit Act and sections 46 and 47 of the Financial Management Act 2004.
However, emphasis has been made on the need to include accounts of controlled entities with those of
government ministries and departments. In addition, variances between bank reconciliation statements
and their respective general ledger accounts for Trust Fund, Trading and Manufacturing Activities,
Overseas Missions bank accounts and Drawings accounts, need to be rectified.
The financial statements of the Republic of Fiji have been presented in accordance with the Financial
Management Act 2004 with direct reference to the budget estimates of Government. Presentation and
certain disclosures have also been made in accordance with cash-basis International Public Sector
Accounting Standards (IPSAS).
The audit reports comprise off four volumes which have been presented in accordance with the budget
sectors as follows:
Volume 1 Audit Report on the Accounts and Finance of Government
2 Audit Report on the General Administration Sector
3 Audit Report on the Social Services Sector
4 Audit Report on the Economic Services and Infrastructure Sector
Volume 1 of the report should be read in conjunction with the Whole of Government financial
statements, the appropriation statement of the Republic of Fiji and my opinion expressed on them for
the year ended 31 December 2015.
Audit Opinion on respective Ministry/Department (Agency) Financial Statements
A total of 37 Agency Financial Statements were prepared in accordance with the Financial
Management Act 2004 and Finance Instructions 2010. Of these, unqualified audit reports were issued
on 20 financial statements while audit reports on 17 financial statements were qualified on the
following grounds:
 Variances were noted between reconciliations prepared by Ministries and Departments and
FMIS Ledger maintained by Ministry of Finance;
 Board of Survey was not carried out;
 Financial transactions were not recorded in the FMIS Ledger;
 Amounts reflected in Trust and Trading Manufacturing Accounts were not fully supported;
 Funds in approved budget estimates for 2015 were used for trust account expenditures; and
 Independent stock take was not done.
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Expenditure planning
Ministries and Departments concentrated spending of their budgets towards the end of 2015
(December) hence indicating lack of proper financial planning during the year. This contributed to
significant unpresented cheque balance at the end of the year placing undue strain on government cash
flows at the beginning of 2016.
Public debt
At the end of 2015, the percentage of national debt relative to GDP was 46%, a decrease of 2% when
compared to 48% 2014. In addition, percentage growth in Government debt was less than the
percentage growth in the economy indicating a slight decrease in debt burden of individuals in 2015.
The Government needs to sustain its existing resources to fund its current programs, commence new
projects as well as meet existing creditor obligations in order to maintain the level of borrowings at a
sustainable level.
Root Cause Analysis
Root cause analysis is defined as the identification of why an issue (error, problem, missed
opportunity or instance of non-compliance) occurred which is reported as audit findings in audit
reports.
Analysis of audit findings reported in Volumes 1 – 4 of the 2015 Audit Reports indicate the following
as key causes to the issues highlighted:
 People
o Inability to prepare reconciliations, investigate and rectify variances
o Supervision of work of subordinates
o Inability to manage capital projects
o Procurement processes not followed
o Payment procedures not followed
o Diversion of funds
o Conflict of interest not managed
o Records not updated
 Processes
o Delay in approval of capital projects
o Procedures for debt recovery not effective
o Policies need to be formulated in some areas
 Systems
o Automated inventory management systems not used

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CONTENTS

Volume 1: Audit Report on the Whole of Government Financial Statements and Annual
Appropriation Statement

Part 1: Whole of Government Financial Statements and Annual Appropriation Statement for
the Republic of Fiji for the Year Ended 31 December 2015

Part 2: Report of the Whole of Government Financial Statements and Annual Appropriation
Statement

Volume 2:

1. Office of the President
2. Office of the Prime Minister
3. Office of the Attorney General
4. Ministry of Finance
5. Ministry of i-Taukei Affairs
6. Ministry of Immigration, National Security and Defence
7. Ministry of Employment, Productivity and Industrial Relations
8. Ministry of Foreign Affairs
9. Office of the Auditor General
10. Elections Office
11. Judiciary
12. Parliament
13. Independent Commissions
14. Office of the Director of Public Prosecutions
15. Ministry of Justice
15A Fiji Correction Services
16. Ministry of Communication
16A Department of Information Technology and Computing Services
17. Public Service Commission
18. Ministry of Rural and Maritime Development and National Disaster Management
19. Republic of Fiji Military Forces
20. Fiji Police Force

Volume 3:

21. Ministry of Education, Heritage and Arts
22. Ministry of Health and Medical Services
23. Department of Housing
24. Ministry of Women, Children and Poverty Alleviation
25. Ministry of Youth and Sports
26. Higher Education Institutions

Volume 4:

30. Ministry of Agriculture
32. Ministry of Fisheries and Forests
33. Ministry of Lands and Mineral Resources
34. Ministry of Industry, Trade and Tourism
35. Ministry of Sugar
36. Ministry of Public Enterprise
37. Ministry of Local Government, Housing and Environment
40. Ministry of Infrastructure and Transport
49. Peacekeeping Missions
VOLUME 1

Volume 1: Audit Report on the Whole of Government Financial Statements and Annual
Appropriation Statement

Part 1: Whole of Government Financial Statements and Annual Appropriation Statement for
the Republic of Fiji for the Year Ended 31 December 2015

Part 2: Report of the Whole of Government Financial Statements and Annual Appropriation
Statement
Part 1: Whole of Government Financial
Statements and Annual
Appropriation Statement for the
Republic of Fiji for the Year Ended
31 December 2015