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PAC questions accounts system

Manasa Kalouniviti
Wednesday, November 29, 2017

THE Ministry of Economy team led by the head of treasury, Pankaj Singh, in the absence of permanent secretary Makereta Konrote, yesterday made a presentation to the Public Accounts Committee (PAC) on the Auditor-General's (OAG) 2014 Report on the Whole of Government Financial Statements and Annual Appropriation Statements.

The OAG had issued a qualified report for 2014 and the two qualifying issues related to inadequate systems of internal control for cash at bank where the overall net errors and omissions which resulted in the overstatement of cash at bank balance by $18.8 million. The second related to the accounts receivable balance totalling $14.1m shown in the Statement of Assets and Liabilities which included $13.6m not supported with reconciliations from responsible ministries and departments.

Mr Singh said they had made vast improvements on the issue of cash balances as reported by the OAG in 2014.

"In 2015 the accounts were unqualified; the amount of $18.8 million has been reduced to around $7 million and mostly relates to TMAs," Mr Singh said.

He said they were liaising with all agencies and their FMIS section now had a monitoring team that was assisting the agencies.

"We are now adopting a whole of government approach," he said.

At this stage PAC chairman Ashneel Sudhakar asked whether it was safe for government ministries as well to be adopting cash based accounting rather than accrual based accounting as noted in the government accounts.

Mr Singh said they were currently in their transition stage to accrual accounting as far as consolidation was concerned.

"So am I correct in saying that accrual is the ideal system," Mr Sudhakar asked.

"Yes and no; accrual gives you a comprehensive picture in terms of fixed assets, in terms of your payables and receivables; it gives a complete picture," Mr Singh said.

He said some of the government agencies could not do proper cash basis reporting.

Mr Sudhakar said most of the agencies that had reported to them had experienced the same thing; the difficulty in adopting the new FMIS with the cash based old system, hence making it difficult to undertake reconciliations etc.

The PAC is chaired by Mr Sudhakar with Government members Alex O'Connor and Mohammed Dean, and Opposition members Ratu Naiqama Lalabalavu and Aseri Radrodro. Also in attendance were senior officers of the OAG and the internal audit team from the Ministry of Economy apart from Mr Singh and his team.

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