Saturday, March 03, 2012

Chief auditor slams state-owned entities


MANY chief executive officers of public bodies and state-owned corporations have no concept of effective, prudent and efficient finance management, the auditor-general has reported, The National reports.
 The report says these are the very essence of accountability and good governance.
The attorney-general disco­vered that 49 out of the 88 public bodies which are subject to audits have not submitted their 2010 financial statements.
This gross negligence, in contravention of section 63 of the Public Finance Management Act, is itself a big improvement from the previous year when 62 financial statements were not made available.
This extends back to 2002.
The attorney-general  report states: “I consider that a large number of chief executive officers do not pay sufficient attention to financial management in their entities.
“In my view, the concept of effective, prudent and efficient finance management is yet to be absorbed by many chief executive officers.”
An entity’s management is responsible for preparing and presenting financial statements for audit inspection.
That being the case, the attorney-general  in its 2010 report, recommends that there be a vigorous enforcement of section 63 of the Public Finance Management Act.
The attorney-general   further recommends that there be legislative requirement to make the renewal of contracts of chief executive officers subject to submission of financial statements and prudent financial management.
“These recommendations,” the attorney-general   states, “are to help achieve accountability and good governance in the public sector.”
Those public bodies that consistently failed to submit financial returns to the attorney-general   are:
  • National Narcotic Bureau and PNG Sports Foundation, which share dubious top honours having missed out for seven years in a row;
  • Public Curator and Unigor Consultancy Ltd (five  years);
  • Tabudubu Ltd and Port Moresby City Development Enterprises Ltd (four years);
  • National Economic and Fiscal Commission and National Volunteer Service (three years); and
  • The Unitech Development and Consultancy Company Ltd (three years).
The attorney-general said poor financial management had persisted for a long time in the public accounts of Papua New Guinea.
The attorney-general states that the failure by public bodies to comply with this legislative requirement results in:
  • The attorney-general  being unable to report adequately on the accountability of the use of public resources in a timely manner;
  • A build up of audits in arrears; and
  • The non-tabling of annual reports on performance and management by public entities in parliament

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