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Report of the Auditor-General – 2009 on the Control of and on Transactions with Or Concerning the Public Monies and Property of Papua New Guinea PART III

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Report of the Auditor-General – 2009 on the Control of and on Transactions with Or Concerning the Public Monies and Property of Papua New Guinea PART III Report of the Auditor-General – 2009 on the control of and on transactions with or concerning the public monies and property of Papua New Guinea PART III Provincial Governments Local-level Governments Hospital Boards Business Arms and Subsidiary Corporations Provincial Authorities Other Audits Phone: (+675) 3012200 Fax: (+675) 325 2872 Email: [email protected] Website: www.ago.gov.pg 24 October, 2011 The Honourable Jeffery Nape, MP Speaker of the National Parliament Parliament House WAIGANI National Capital District Dear Mr Speaker, In accordance with the provisions of Section 214 of the Constitution of the Independent State of Papua New Guinea, I have the honour to transmit to the National Parliament Part III of my Report for the year 2009. The Part III 2009 report covered the periods from 2006 to 2008. This report embodies the results of audits of each of the Accounts of Provincial Governments and Local-level Governments, their Business Arms, Funds and Trusts, Hospital Boards and the District Treasuries on the usage of the District Improvement Program funds. Yours sincerely, PHILIP NAUGA Acting Auditor-General REPORT OF THE AUDITOR-GENERAL PART III FOR YEAR 2009 TABLE OF CONTENTS SUBJECT PAGE NO. FOREWORD 1 1. ROLE OF THE AUDITOR-GENERAL AND AUDIT MANDATE…......… 3 • Role of the Auditor-General………………………………………… 3 • Mandate of the Auditor-General………………………………….… 4 2. SCOPE OF THE AUDIT………………………………………………..…… 6 • Introduction…………………………………………………….…… 6 • Organic Law on Provincial Governments and Local-level 6 Governments....................................................................................... • Provincial Governments and Local-level Governments……….…… 7 • Hospital Boards………………………………………………….…… 7 • Business Arms and Subsidiary Corporations……………………… 8 • Provincial Authorities……………………………………….……… 8 • Other Audits………………………………………………….……… 9 • Appointment of an Agent Auditor………………………….……… 9 • Disposal of Audits…………………………………………………… 9 3. CONTROL ENVIRONMENT ……………………………………………… 14 • Introduction……………………………………………………..…… 14 • Responsibilities of the Management ………………………………… 14 • Responsibility of the Auditor-General …………………………….. 15 • Details of Controls Issues…………………………………………..… 15 • Conclusion……………………………………………........................ 20 . 4. RESULTS OF THE AUDITS OF FINANCIAL STATEMENTS………… 22 • Audit Opinion…………………………………….............................. 22 • Financial Statements of Provincial and Local-level Governments. 23 • Financial Statements of Hospital Boards…………………….……. 33 • Financial Statements of Business Arms………………………..…… 34 • Financial Statements of Provincial Authorities……………...……… 37 • Other Audits………......................................…………………..…… 39 • Audit Fees……………………………………………………….…… 39 • Tabling of Reports…………………………………………………… 40 5 RESULTS OF AUDITS PER PROVINCE……………………………..…… 41 • Autonomous Government of Bougainville………………………… 41 • Central Province…………………………………………………….. 54 • East New Britain Province……………………………………….… 62 • East Sepik Province…………………………………………….…… 72 - i . • Eastern Highlands Province…………………………………..……. 85 • Enga Province………………………………………………….……… 99 • Fly River Province……………………………………………..……. 103 • Gulf Province………………………………………………………… 109 • Madang Province…………………………………………………… 117 • Manus Province……………………………………………………… 125 • Milne Bay Province…………………………………………………. 133 • Morobe Province……………………………………………………. 138 • New Ireland Province………………………………………………. 147 • Oro Province………………………………………………………… 150 • Sandaun Province…………………………………………………… 160 • Simbu Province……………………………………………………… 168 • Southern Highlands Province……………………………………… 171 • West New Britain Province………………………………………… 173 • Western Highlands Province………………………………………. 177 6. DISTRICT SERVICES IMPROVEMENT PROGRAMME…………..... 181 • Executive Summary......................................................................... 181 • Summary of Findings....................................................................... 188 • Gumini District................................................................................. 188 • Chuave District................................................................................. 190 • Kerowagi District............................................................................. 192 • Sinasina Yongomugl District.......................................................... 195 • Okapa District.................................................................................. 196 • Kainantu District............................................................................. 198 • Henganofi District........................................................................... 199 • Lufa District.................................................................................... 201 • Maprik District............................................................................... 204 • Wewak District............................................................................... 207 • Angoram District............................................................................ 210 • Huon Gulf District.......................................................................... 213 • Nawaeb District............................................................................... 215 • Lae District....................................................................................... 218 • Bulolo District................................................................................... 220 • Samarai District................................................................................ 222 • Alotau District.................................................................................. 224 • Kerema District................................................................................ 225 • Kikori District.................................................................................. 229 • Moresby South District.................................................................... 231 • Moresby North West District.......................................................... 234 • Sohe District...................................................................................... 236 • Ijivitari District................................................................................. 239 • Kandrian District............................................................................. 243 • Talasea District................................................................................. 245 • Kokopo District................................................................................ 249 • Gazelle District................................................................................. 252 • Rabaul District.................................................................................. 254 • North Bougainville District............................................................. 255 • Central Bougainville District........................................................... 258 ACKNOWLEDGEMENT............................................................... 260 - ii - FOREWORD My Report to the National Parliament for 2009 is being presented in four parts as follows: • Part I of my Report deals with the Public Accounts of Papua New Guinea (this will be tabled in early 2010). • Part II of the Report deals with National Government Departments (this will be tabled in early 2010). • Part III (this Part) of my 2009 Report deals with audits of the Provincial Governments, their Public Bodies and Subsidiary Corporations, Local-level Governments, Hospital Boards and some Trust Funds and District Services Improvement Program. It should be noted that with effect from 1996 fiscal year, an audit opinion on the financial statements of each Provincial Government is being issued in accordance with the requirements of the Organic Law on Provincial Governments and Local-level Governments 1995. Major financial and accounting issues which require remedial action to be taken by the Provincial Government and Local-level Government, Hospitals and government- owned businesses will be summarized in this Part of my Report in future; these issues have been taken up with the respective Provincial Administrators or Executive Management in our management letters. • Finally, Public Bodies and Subsidiaries, National Government-owned Companies and National Government’s share holdings in Other Companies are covered in Part IV of my Report. This was tabled in late 2009. Part III Report It should be noted that with effect from 1996 fiscal year, I have been issuing an audit opinion on the financial statements of each Provincial Government in accordance with requirements of the Organic Law on Provincial Governments and Local-level Governments, 1995. The audits included reviews of governance arrangements and examinations of internal controls in place at the time the audits were conducted. All audit findings have been reported in entity’s management for their comments. This (Part III) Report provides summary of significant internal control weaknesses identified, and types of audit opinions expressed in the audits. Major financial and accounting issues which require remedial action to be taken by the Provincial and Local-level Government, Hospitals and government-owned businesses have been summarized in this Part of my Report; these issues have been taken up with the respective Provincial Administrators or Executive Management in our management letters. Audited financial statements together with the audit opinions were also provided to the relevant Minister(s) and to the Department
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