Failures a feature of Audit report
The financial year ended 31 March 2009 was a busy and eventful one for the Audit Office.
Audit’s annual report to Parliament was tabled in the House by its Minister, Deputy Prime Minister Sir Terepai Maoate when the Parliament resumed on Monday 24 November 2009.
Director Paul Allsworth reported that in 2009, the Office tabled in total 81 reports to Parliament, covering 55 financial audits, including the Crown financial statements for 30 June 2007, 16 special review or performance reports and 10 annual stock-take audit reports.
In regard to prosecutions or pending cases, the report says:
“Certain special reviews and investigations which relate to the expenditure of public funds have resulted in senior managers and officials, a Member of Parliament and some private sector persons being charged in the High Court for alleged offences under the Crimes Act.
These involve the Tourism Corporation Offices’ in Auckland and Rarotonga, and the going Police investigation termed, Operation Slush. These legal proceedings have either been completed, partly completed or are in progress before the High Court. Our oversight and probity functions have led to detecting public corruption, including travel, misappropriation of public funds, misuse of position and authority and conflicts of inter Most of these instances have resulted in criminal proceedings through Crown Law Police.”
The Director has reported some major concerns and he says they are grouped separately into reoccurring and unattended failures and new concerns that require immediate attention.
He reports the reoccurring and unattended failures as follows;
“• The absence of a Code of Conduct for public servants and Leadership Code Parliamentarians. Our special review reports indicated breaches of conflicts of interest a misconduct by senior public servants and Members of Parliament. Codes of conduct should be seen as a tool for encouraging good governance practices to ensure that:
1. Governance structures and processes are effective and transparent, and
2. They operate as a good employer.
• Appropriation overspending and poor management of public funds are a major area concern. The Office of the Public Service Commissioner critically needs to monitor a report such occurrences, and if unjustified, carry out the appropriate measures under the HoM’s employment contract.
Failure to comply with the Cook Islands Government Financial Policies and Procedures Manual (CIGFPPM) by Ministries and Crown Agencies.
This seems to be a regular finding across the board in most of our special review audit reports. The failure to comply sometimes intentional but sometimes resulting from a lack of awareness of the CIGFPP: Of concern is the lack of disciplinary measures and penalties provided against public officials who fail to comply with the CIGFPPM. The absence of proper disciplinary measures a penalties will only see the Special Reviews Division report on the same recurring issues. I think it is prudent that consideration be given as to what measures and actions can be taken encourage full compliance of the CIGFPPM.
The failure and delay by Ministries and Crown Agencies to action the recommendations arising from our audit reports.
It is also evident that Ministries and Crown Agencies have failed to implement and enforce proper internal controls within their business operations which in some cases have lead to mismanagement of public resources. These ultimately lead to a general waste of public resources.
The Director also reports on new concerns which are;
“Accountability Failures
• At the Minister’s Support Office level, at present there are no oversight procedures relating to the performance and practices of Chief Executive Officers (CEO’s). Employment contracts have in the main, not been implemented and budgeted expenditure for the offices have no prescribed outputs and definitions. Of concern, resulting from our review of Minister’s Offices, particularly are the CEO’s of the Office of the Prime Minister and Minister of Environment.
• It appears that Government, through Cabinet, has not been receiving quality policy and high level managerial advice on certain major projects and initiatives. As a result, adverse and negative repercussions have been continuously portrayed both in the media and among key Crown Agencies. This practice is not conducive to prudent and sustained good governance and it may affect the efficient, economical and effective performance of the Crown.”
The Director reports that his priorities for 2009/2010 will cover;
“-A complete review of the PERCA Act 1995/1996, with appropriate amendments to be submitted for approval by the Minister and Cabinet in early 2010. The aim is to introduce a new Public Audit Act, separate from the functions of PERC.
-Improving the governance structures of the Office, with our stakeholders and Parliament.
-Improving the general management of the Office, including the budget requirements, staffing resources and overall quality control systems.”
How did the Office fare financially at year’s end? Allsworth’s report mentions that PERCA and Audit while appropriated $1,051,837 for the year, they spent $1,015,681 and after taking into account trading revenue, ended the year with a surplus of $10,762. In the 2008 year the surplus was just $8.
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