SAI FSM National releases inspection report on the Anti-Human Trafficking Victims' Shelter

24 June 2022

Palikir, Pohnpei: The Office of the National Public Auditor (ONPA) releases Inspection Report No. 2022-02, titled “SELECTION AND PROJECT IMPLEMENTATION OF THE ANTI-HUMAN TRAFFICKING VICTIMS’ SHELTER IN POHNPEI STATE WAS FOUND WITH ISSUES OF NON-COMPLIANCE AND TRANSPARENCY”.

We carried out this inspection following an anonymous complaint received at our office. This inspection was conducted in accordance with the Quality Standards for Inspections and Evaluations issued by the Council of the Inspectors General on Integrity and Efficiency (CIGIE).

Based on our inspection, we found the following issues pertaining to the victims’ shelter at Pohnpei state, including the administration and implementation of the relevant public laws PL21-42 (Victim Shelter and Services) and PL21-185 (Build Anti-Trafficking Shelters in Pohnpei, Yap and Kosrae) as appropriated by the FSM Congress.

The inspection disclosed the following findings:

1. Location of the victims’ shelter in Pohnpei State does not promote confidentiality and safety;

2. Questions costs worth $48,476.98 relating to victims’ shelter

3. Allottee did not sufficiently describe in detail the plan for implementing and sustaining the AHT shelter; and

4. DOJ did not complete the bidding process that it started and was not transparent in selecting the final contractor.

Copies of the full report are also available at the ONPA office in Palikir, Pohnpei.

PDF of ONPA press release #2022-03

SAI Papua New Guinea develops Strategic Plan with external stakeholder input

8 April 2022

On Wednesday 6 April 2022, the Auditor-General’s Office (AGO) of Papua New Guinea hosted its key external stakeholders at a planning workshop.

The workshop was arranged as part of a strategic planning project co-funded with the Pacific Association of Supreme Audit Institutions (PASAI). External stakeholder views had not informed previous strategic plans.

The Auditor-General of Papua New Guinea, Mr Gordon Kega, opened the session and later remarked how useful it was.

“The workshop was great opportunity for us to get to know some of our key stakeholders better, and for those with an interest and influence in PNG to discuss the challenges faced by our office,” he said.

Attendees included the Secretary of the Public Accounts Committee, the Chair of the Independent Commission Against Corruption, and representatives from Transparency International, the Papua New Guinea Council of Churches, top tier audit firms, the Australian High Commission Papua New Guinea, audited entities and local research institutes.

Participants in the half-day workshop discussed what they saw as the primary value of the AGO and what can be done to support the AGO to have a greater impact.

Workshop participants in discussion

SAI FSM National releases inspection report on CFSM–Pohnpei public projects for Sokehs Municipality

2 February 2022

Palikir, Pohnpei: The Office of the National Public Auditor (ONPA) announces the release of Inspection Report No. 2022-01, titled “VALUE FOR MONEY AND THE INTENTION OF THE LAW ARE NOT ACHIEVED DUE TO NON-COMPLIANCE AND INEFFECTIVE OVERSIGHT OVER CFSM PUBLIC PROJECTS AT SOKEHS MUNICIPALITY”

Below are the two (2) FSM Congress funded public projects that we inspected:

1. Sokehs Municipal Government Retaining Wall
   a. Public Law 20-125 of September 22, 2018 to appropriate, among others, $54,500 for the above project; [Allottee: Secretary, FSM Department of Transportation, Communication & Infrastructure]
   b. Public Law 20-178 of April 11, 2019 to appropriate, among others, an additional $40,000 for the same project above; [Allottee: President, FSM]

2. Sokehs Municipal Government Community Water Projects
   a. Public Law 20-141, of October 26, 2018 to appropriate, among others, $20,000 for the above project. [Allottee: Chief Magistrate, Sokehs Municipal Government]

The FSM Department of Finance & Administration (DoFA) was responsible for the allotment of funds and processing of disbursements.

ONPA carried out this inspection following a written request from the Honorable Speaker Albert Johnny, 10th Sokehs Municipal Council who expressed his concerns on the unsatisfactory completion of the two projects. We found funds being wasted and/or subjected to issues of oversight and compliance, which led to the abandoned Water System Project in Pohras, Sokehs and the tilted Retaining Wall situated next to the Sokehs local Municipal Government compound. Below is the summary of our findings:

(i) Incomplete planning and changing orders for the Sokehs Retaining Wall Project resulted in the increase of an initial contract award of $48,392.80 to $94,500;
(ii) Questioned costs of $17,824.61 is due to lack of proper planning and oversight for the Community Water Project; and
(iii) Payment requests for the Sokehs Retaining Wall project were not authorized by the Allottee as required by the FMR.

Our inspection was conducted in accordance with the Quality Standards for Inspections and Evaluations issued by the Council of the Inspector Generals on Integrity and Efficiency (CIGIE) in the US federal government.

Copies of the full report are also available at the ONPA office in Palikir, Pohnpei.

PDF of ONPA press release #2022-02

Timeline met on the completion of the single audits for the FSM National and State governments for FY 2020

10 January 2022

Palikir, Pohnpei: The Office of the National Public Auditor (ONPA), through this press release statement is pleased to inform that the Single Audits for the FSM National and State Governments for the fiscal year 2020 have been completed as of December 31, 2021.

The audits, which are conducted annually are a requirement of the Amended Compact Agreement between the United States of America and FSM. The timeline for completion of audits for each fiscal year is on June 30th each year, or nine (9) months after the end of each fiscal year. However, due to the Coronavirus pandemic, the due date of audits for the fiscal year 2020 was extended to December 31, 2021.

The Heads of the Finance Departments for the primary governments as well as the chief executives and their chief financial officers for the component units, were ably responsible for the preparation of financial reports, internal controls and compliance that facilitated the audits’ completion on schedule.

The Public Auditor commends the management for all the FSM single audit entities and the independent CPA firm (Deloitte & Touche) for executing their responsibilities and ensuring that the FSM Governments meet the timeline for the completion of single audits as it is a crucial requirement of the Amended Compact.

You can access all the single audit reports.

PDF of ONPA press release #2022-01

SAI FSM releases report on 2020 Social Security Benefits

8 October 2021

Palikir, Pohnpei: This is to announce the issuance of our new inspection report on the FSM Social Security Benefits for calendar year 2020, January through December. This inspection was initiated through an anonymous complaint that was received at our Compliance Investigation Division (CID) hotline. The complaint contained allegations of “mismanagement of the Social Security Administration (SSA) funds.” The complainant alleged that “there are some beneficiaries over 65 years of age who are receiving 100% of social security benefits even while they are gainfully employed.” We conducted this inspection in accordance with the Quality Standards for Inspections and Evaluations (QSIE) issued by the Council of the Inspectors General on Integrity and Efficiency (CIGIE).

Based on our inspection, we found instances of overpaid benefits that were not recovered for 5-7 years. Our findings reflect the need to strengthen the management and operations capacity of the FSMSSA, including the need to improve internal controls and mechanisms that affect the processing of application for benefits, the monitoring of active beneficiaries and detection of ineligible beneficiaries.

The inspection disclosed the following findings:

a) Uncollected debt of over $27,000 is linked to overpaid retirement benefits to members that were reported to have continued to receive 100% benefits even after returning to active employment;
b) FSM SSA does not have sufficient measures in place to effectively monitor and adjust payments to beneficiaries who have passed; and
c) Unaccounted contributions indicate lack of reconciliation and untimely posting to members’ accounts.

Printed copies of the Inspection Report are available at the ONPA located in Palikir, Pohnpei.

PDF of ONPA Press Release #2021-08

SAI FSM releases report on Kosrae Postal Services collections and deposits

4 October 2021

Palikir, Pohnpei: This is to announce the issuance of our new inspection report on the FSM Postal Services, Kosrae Branch Office covering its revenue collections and deposits for the months from October 2020 through January 2021. This inspection was initiated based on a request by the Acting Postmaster General who had concerns of potential violations of the Financial Management Regulations (FMR 2019 version), which requires the deposit of revenue collections no later than the next business day. This inspection was conducted in accordance with the Quality Standards for Inspections and Evaluations issued by the Council of the Inspectors General on Integrity and Efficiency (CIGIE).

Based on our inspection, we found that the revenue collections for the FSM Postal Office located in Kosrae State were not deposited on time as required by the FMR. We also found some instances of missing records of collections within the period of our inspection scope under the management of the former Acting Postmaster for the FSM Postal Office in Kosrae, who voluntarily resigned prior to the start of this inspection. Our inspection also revealed the need to strengthen and improve the monitoring and oversight function by the Headquarters over the operations of the FSM Postal Office in Kosrae State.

The inspection disclosed the following findings:

1. The FSM Post Office in Kosrae did not comply with the FMR pertaining to the requirements for depositing the daily collections on the next business day; and

2. Effective oversight by the Headquarters is necessary to ensure compliance to laws and regulations and to prevent any financial losses to the FSM Postal Service.

Printed copies of the Inspection Report are available at the ONPA located in Palikir, Pohnpei.

PDF of ONPA Press Release #2021-07

Impact through independence - supreme audit institutions

2 September 2021

From the Transparency Times, the newsletter of Transparency International New Zealand:

“Having an independent government auditor is an important pillar of a well-functioning National Integrity System.

Independence is vital to this function. If an SAI is not properly recognised and resourced within their country’s legislative framework, it is difficult for them to drive impact in the financial management system. To be effective they have to be independent of those they audit, and protected against outside influence.

This will increase credibility and confidence in their work. A strong, independent SAI is essential for a country’s good governance and public financial management.”

The full article

SAI FSM National releases second performance audit report on the Pacific Island Regional Oceanscape Program

20 July 2021

Palikir, Pohnpei FM: We have completed our second performance audit on the Pacific Island Regional Oceanscape Program (PROP) funded by International Development Association – World Bank (WB). The PROP project is a five-year project which the FSM National Oceanic Resources Management Authority (NORMA) has been implementing since May 2015 when the Financing Agreement between the WB and FSM was initially formalized. The objective of the PROP Project is to strengthen the shared management of selected Pacific Island oceanic and coastal fisheries, and the critical habitats upon which they depend.

This performance audit was requested by the Executive Director of National Oceanic Resource Management Authority (NORMA) as required by the Financial Agreement and covers the period FY2018 – FY2020 up to January 2020; however, relevant information up to FY2021 was also used to come up with the findings, recommendations and conclusions that reflect recent implementation updates. The focus of our audit was on Components 1 & 4 only of the PROP project, as Component 2 had been completely implemented by the Department of Resources & Development while Component 3 is not applicable to FSM. Our office had carried the 1st performance audit on the PROP project for the period March 2015 to September 2017 (issued on Audit Report No. 2018-01), and an audit follow-up report was issued on Audit Report No. 2020-03.

We conducted this audit performance in accordance with the generally accepted government audit standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives.

We noted that the PROP project was set to end in September 30th 2020 and later extended for another year to September 30th 2021 following a restructure proposal by FSM. Based on our audit, we concluded the following:

a) Project development objectives are anticipated to be achieved by the new closing term of the project (September 2021) despite the delays in implementation of activities as:

i. NORMA continues to implement project activities relating to institutional strengthening and capacity building; activities that relate to meeting Disbursement Linked Indicators (DLI) for strengthened management tuna fisheries; and activities that are based on the annual work plan and budget; and

ii. NORMA has not fully met the required DLI targets even though it is up to date with its disbursement.

b) Lack of required support from Forum Fisheries Agency (FFA) and other challenges delayed full implementation of project activities under Component four (4) as:

i. FFA did not provide initial required support needed for procurement activities, documentation for national level project procurement processing and daily implementation of the PROP project;

ii. There was no Procurement Specialist until late September 2017 and no recruitment for both Finance Officer and Safeguard Specialist to assist FSM PROP project; and

iii. NORMA encountered difficulty in obtaining timely approvals for procurement.

c) NORMA is in process of implementing strategic steps to sustaining the activities currently funded by World Bank including formalization of an approved 5-years Strategic Plan 2018-2023 and finalizing the FSM National Oceanic Fisheries Investment Policy 2018-2023.

We thank the Executive Director for NORMA for requesting our audit services.

Objectives of the World Bank funded PROP project implemented by NORMA is anticipated to be achieved by the extended timeline despite the delays – Audit report no. 2021-04

PDF version of media release

FSM National Public Auditor outlines non-compliance in Yap State public projects inspection report

29 April 2021

Press Release 2021-05

The FSM National OPA's latest Inspection Report entitled Compliance Issues Found in the Administration and Implementation of the CFSM Yap State Public Projects funded under Public Law 21-43 in the Yap State; Key Officials Keen To Make Improvement was submitted to the Congress and the President on 22 April 22 2021.

You can access the full report by visiting our website at www.fsmopa.fm.

Office of the Chuuk State Public Auditor releases assessment report on its performance

The Office of Chuuk State Public Auditor (OCPA) is releasing the assessment report on its performance. The assessment was conducted in September 2019 as part of a regional initiative implemented as part of the United Nations Development Programme’s (UNDP) Strengthening of Public Finance Management and Governance in the Pacific Project (PFM) funded by the European Union (EU) and implemented by the United Nations Development Programme (UNDP) in partnership with the Pacific Association of Supreme Audit Institutions (PASAI). This project aims to strengthen oversight over public financial management in the Pacific region, through improving the budgetary scrutiny, public financial oversight and accountability capacities of parliaments, supreme audit institutions and civil society within the region, aligning with international public financial oversight and accountability standards, and fostering citizen engagement and oversight.

The OCPA’s performance was assessed against the International Standards of Supreme Audit Institutions (ISSAIs). It followed the methodology prescribed by the Supreme Audit Institutions’ Performance Measurement Framework (SAI-PMF) issued by the International Organization of Supreme Audit Institutions’ (INTOSAI) Working Group on the Values and Benefits of SAIs.

The assessment was conducted by an independent team comprising two members: Mrs Sinaroseta Palamo-Iosefo, PASAI Director of Practice Development (Team Leader) and Ms Alice Etse, Audit Manager from the FSM State of Pohnpei Office of the Public Auditor (POPA).

The assessment was comprehensive and covered six domains with a set of pre-determined performance indicators under each domain. These indicators are either within the control or outside of the control of the OCPA. The six domains are as follows:

A. Independence and Legal Framework

B. Internal Governance and Ethics

C. Audit Quality and Reporting

D. Financial Management, Assets and Support Services

E. Human Resources and Training

F. Communication and Stakeholder Management

Office of Chuuk State Public Auditor Performance Report (PDF)

Assessment Report on OCPA Performance (PDF of media release)

Office of the Chuuk State Public Auditor releases blueprint for strengthened independence

This is to announce the release of a blueprint for strengthened independence of the Office of the Chuuk State Public Auditor (OCPA). It includes an analysis of the strengths, weaknesses, challenges, opportunities, and threats to the independence of the OCPA, and the formulation of corresponding strategies and plan for implementation that can help overcome or address such challenges and threats.

The ‘Strengthening of Public Finance Management and Governance in the Pacific Project’ (PFM) is funded by the European Union (EU) and implemented by the United Nations Development Programme (UNDP) in partnership with PASAI. This project aims to strengthen oversight over public financial management in the Pacific region, through improving the budgetary scrutiny, public financial oversight and accountability capacities of parliaments, supreme audit institutions and civil society within the region, aligning with international public financial oversight and accountability standards, and fostering citizen engagement and oversight.

The important role of the public auditor’s office is to contribute and help in promoting efficiency, accountability, effectiveness, and transparency of public administration. Among others, the auditor’s office helps the government to improve performance, enhance transparency, ensure accountability, maintain credibility, fight corruption, promote public trust, and foster the efficient and effective receipt and use of public resources for the value and benefits of their citizens.

The fact is that the public auditor’s office can accomplish its tasks more objectively and effectively only if it is independent and protected against any influence.

Thus, the overall objective of the OCPA in this task is to pursue and achieve greater independence thru its legal (legal framework- constitutional and law) and its day-day-operation. The basic strategies include the following:

• Develop and implement enhancements in the legal framework (especially in the public auditor’s act) and in actual operations to provide for greater independence

• Implement a communication strategy.

• Advocate and engage with relevant stakeholders.

• Prepare and implement an audit strategic plan

• Request for the approval of budget for the right size of manpower for the office considering its mandate

• Monitor the independence, prepare to be accountable and lead by example.

With greater independence coupled with the right resources and right number of qualified and trained manpower, the OCPA would be able to deliver an effective value and benefits that can reasonably contribute to making a difference to the lives of Chuuk State citizens.

Pursuing greater independence for the Office of Chuuk State Public Auditor (PDF of strategy)

OCPA releases blueprint for strengthened independence (PDF of media release)

FSM Single Audits for FY-2019 Achieved by the Extended Deadline January 18, 2021

The Single Audits for the FSM National and State Governments covering the fiscal year 2019 have been completed by the extended due date of December 31, 2020. The audits are a requirement of the Compact Agreement, as amended, between the USA and FSM. They are conducted annually with the original due date on June 30th each year, or nine (9) months after the end of each fiscal year. The Audit Contract was awarded to Deloitte & Touche, and the audits are performed in accordance with the laws, auditing standards, and other requirements of the US federal government, among which includes the Single Audit Act of 1984, as amended.

Due to the coronavirus pandemic, the Single Audits for FY-2019 were postponed until December 31, 2020. It was a necessary extension given the lockdown and border restrictions which impacted audits within the FSM.

The Heads of the Finance Departments for the primary governments as well as the chief executives and their chief financial officers for the component units, were ably responsible for the preparation of financial reports, internal controls and compliance that facilitated the audits’ completion on schedule. We commend the management for all the FSM single audit entities and we also acknowledge our independent CPA firm for executing their responsibilities and ensuring that the FSM Governments achieved their annual single audits as a crucial requirement of the Amended Compact.

Going forward, steps are being taken to commence the next audit for the fiscal year 2020, which will be performed during fiscal year 2021, with the Notice to Proceed recently issued last week to our independent CPA firm.

Digital copies of all the audit reports can be accessed via the Office of National Public Auditor’s website at www.fsmopa.fm.

A Year in the Life of Pohnpei Office of the Public Auditor

Pohnpei's Office of the Public Auditor (POPA) is the state's supreme audit institution, working to ensure that public funds are spent and used as intended and are reported in a transparent and timely way.

The Year in the Life of POPA highlights some of the activities that POPA undertook or was involved in during 2020. This is to inform the public of what POPA do, the value and benefits of work in the promotion of transparency and accountability in the government for the citizens of Pohnpei.

Read the Year in the Life of POPA here.

The FSM National OPA publishes a Performance Audit on the FSM Trust Fund

The FSM National OPA's latest Performance Audit on the FSM Trust Fund: Actions are Required to Effectively and Efficiently Achieve the Goals of The FSM Trust Fund, was submitted to the Congress and the President on December 4, 2020. 

You can access the full report by visiting www.fsmopa.fm or by clicking on the link below: 

Audit Report 2021-02: The FSM Trust Fund 

FSM National OPA's latest performance audit published

The FSM National OPA's latest, Performance Audit on the Implementation of Recommendations of Audit Report No. 2019-02: Collaborative actions are needed to improve and address various issues relating to the Housing Programs, was submitted to the Congress and President on October 29, 2020. 

You can access the full report by visiting www.fsmopa.fm or by clicking on the link below: 

Audit Report 2021-01: Collaborative Actions are needed to improve and address various issues relating to the Housing Programs

POPA Conducts Training on Police Integrity

Kolonia, Pohnpei: September 9, 2020, the Pohnpei Office of the Public Auditor (POPA), Compliance Investigation Division (CID) conducted workshops on integrity, fraud and corruption for the 2020 Pohnpei Police Academy at the Pohnpei State Department of Public Safety (DPS). The invitation was sent from the Director of DPS, Patrick Carl for POPA to conduct a class instruction on corruption and fraud to the police academy trainees so they may have a better understanding and knowledge in the subject when they are conducting their duties on a daily basis.

Since majority of the police officers are entry level trainees, the workshop was geared in two phases: The first part was for them to learn the impacts of fraud and how to prevent it by leading and instilling integrity, accountability and ethical conduct in their daily work activities. The other phase was focusing on how to detect and investigate fraud.

The law enforcement and police agencies had been commonly viewed as one of the most vulnerable and exposed public agencies to the risk of fraud and corruption. Police Officers are the first responders to crimes occurred in the Pohnpei State jurisdiction. They should be upholding the law and ensuring that they strive to do the right thing in all situations to keep the public a safer place which also include discouragement of fraud. They should be leading by example to increase the public confidence and trust in their work. The training went well with active participation from the attendees.

POPA and DPS along with the Office of the Attorney General currently has a signed Memorandum of Understanding (MOU) in place to collaborate and joint forces in combating fraud and corruption.

POPA Investigative Advisor, Sophia Pretrick and staff investigators Trinia Eliou and Derek Dainard of the CID conducted the workshop.

Auditing During an Emergency

The New Zealand Office of the Auditor-General (SAI New Zealand) has completed a review on the New Zealand Ministry of Health’s management of personal protective equipment (PPE) in response to Covid-19.

To read the full report, click here.

Office of the Chuuk State Public Auditor releases a Petty Cash Fund Report

OFFICE OF THE CHUUK STATE PUBLIC AUDITOR

PRESS RELEASE NO. 2020-01

The Office of the Chuuk State Public Auditor (OCPA) announces the release of an Inspection and Evaluation of Petty Cash Fund, which covered the fiscal year 2017 to 2020. Reports may be made available by request to any interested individual at the OCPA in Nantaku, Weno, Chuuk.

The Public Auditor’s authority is based on the Chuuk State Constitution Article VIII Section 9 and Truk State Law 6-21 which states in part:

“The Auditor shall conduct audits of all financial transactions of all branches, departments, offices, agencies, and instrumentalities of the government, and of all accounts kept by or for them.”

We conducted this inspection in accordance with the 2011 US Quality Standards for Inspection and Evaluation issued by Council of Inspectors General on Integrity and Efficiency.

The objective of this audit included determining the adequacy of controls on petty cash fund.

The results of the audit disclosed that the Treasury had implemented inadequate  controls  to  protect the Petty Cash Fund. Specifically, our inspection and evaluation have disclosed the following weaknesses:

1.  Inadequate Written Procedures Could Potentially Lead to Misuse, Abuse and Misappropriation of Funds Without Timely Detection

2.  Non-compliances of payments with the Existing Written Control Procedures

3.  Absence of Periodic Surprise Cash Count and Periodic Checking Could Result in Discrepancies and Missing Funds not Detected Timely.

The audit recommendations, if implemented, will strengthen the internal controls on Petty Cash Fund to prevent the risks of fraud, abuse and misuse of the petty cash funds.

The Department of Administrative Services submitted a Management Response, which was in agreement to the findings. We included such response in the final report.

Click here to read the full report.

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Office of the Chuuk State Public Auditor

P.O Box B Weno, Chuuk FM 96942

Tel: 691.330.8832/8835; Fax 691.330.8840

Website: http://www.fmocpa.com

INTOSAI Journal Spring 2020 Issue now online

The INTOSAI Journal Spring 2020 edition is now available online featuring informative articles on auditing SDG implementation and preparedness and the latest news from SAIS worldwide. It also includes a special contribution on SAI Female Leadership and an exclusive IDI article on gender initiatives.

NZ SAI shared their update on monitoring COVID-19 government spending

The NZ Office of the Auditor-General is sharing some useful approaches on how a SAI should consider monitoring public money spend during the COVID-10 pandemic. SAIs are critical in ensuring this ‘watchdog’ role and reporting to the public and Parliament about how the Government is being accountable in the use of the COVID-19 related expenditure.

Please click on this link to the full article