The Auditor-General’s latest report has issued modified audit opinions on all 32 financial statements reviewed for Provincial Councils, saying the results “reflected negatively on the iTaukei Affairs Board and the provincial councils”.
This is stated in the Audit Report on Provincial Councils – Volume 7 that was tabled in Parliament last week.
“Some councils are improving in their financial reporting and record keeping and thus were provided with qualified audit opinion compared to the disclaimer of opinion for these councils in the preceding years,” the report noted.
“This can be further improved and sustained through continuous efforts. Urgent and close attention should be given to address matters which have been highlighted in the Auditors’ reports and the significant matters raised in management letters.”
The Auditor-General said “quality and timely financial reporting continue to be a concern despite the recommendations for improvement in my earlier reports”.
“Delays in submission of financial statements for audit prevents the Auditor-General from providing opinions on them in a timely basis and informing Parliament and other stakeholders of the outcome of such audits.”
While acknowledging the iTaukei Affairs Board’s role, the report said “the board’s efforts are noted for facilitating training for the council’s finance personnel, however, it should be consistent and effective.
“Good governance and internal controls are generally lacking across the councils and should be given due consideration for effective control over the councils’ operations.
“This should include demand of financial accountability and transparency by those charged with governance from the custodians of the financial system.”
The audit noted “some improvement has been noted in the record management; however, the councils should continue to strengthen this area to ensure that it is sustainable.
“Some provincial councils had made large investments and/or provided loans and advances to provincial companies.
“However, it lacks sufficient documentation of ownership of their investments in these companies due to absence of share certificates or loan agreements.”
The Auditor-General said the iTaukei Affairs Board (iTAB) and the provincial councils should take decisive steps to tackle ongoing audit qualifications for provincial councils.
“The provincial councils need to improve the process in preparing and reviewing monthly account reconciliations of all account balances,” stated the report.
“Timely and accurate reconciliations are critical to addressing discrepancies that contribute to audit qualifications.
“Improving the quality and timeliness of financial statements should be given the utmost priority.”
The auditor also raised concern on investment oversight.
“Continuous improvement in maintaining accurate and updated records/information for the investments of provincial councils with respective provincial holding companies should be done.
“These records should include share certificates, lists of investments, and dividends received to ensure transparency.”
The auditor also said governance improvements are equally vital at the councils.
“The Finance and Audit Committee should include personnel with strong accounting backgrounds, capable of understanding financial reports and the Independent Auditors Report.”
These members should be equipped to “ask the right questions to the custodians of the council’s funds,” ensuring robust oversight.
