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HONIARA, Solomon Islands (Solomon Star, Nov. 14) – Prime Minister Sir Allan Kemakeza and his ministers used more than SB$25,000 (US$3,500) of public funds in November 2002 to hire a dive boat for a picnic trip.

The manner in which the funds were acquired was not procedural, and therefore illegal, according to a Special Audit Report into the Department of Forestry, Environment and Conservation.

The hired boat was owned by Dalgro Limited - a logging company.

According to the Audit Report, the SB$25,559 (US$3,580) hire for the boat was deducted from the royalty payment made to the Government by Dalgro.

"These advances or royalty payments have in fact been diversions of revenue from the Consolidated Fund.

"The $25,559 (US$3,580) hire was not recorded as either revenue due from royalty or expenditure.

"Accordingly, both the revenue and expenditure amounts have been understated in the government accounts.

"On this basis, we consider that all advances of revenue whether to finance properly authorized expenditures in the Appropriation Act or not, are inconsistent with proper established procedures and therefore illegal," the Report stated.

It recommended that the imprested account be referred to appropriate authorities for investigation.

The matter of the hire of the dive boat is contrary to Public Finance and Audit Act and no further transactions of this nature should be carried out, the Report says.

This illegal advance of royalty payment from Dalgro by Sir Allan and his ministers was one of the many irregularities highlighted in the Special Audit Report.

Another incident singled out in the report was an advance of SB$54,762 (US$7,672) received by a former Agriculture minister from a logging company.

On March 24, 2003, the then Agriculture minister, wrote to Silvania Plantations Products Limited, requesting SB$54,762 (US$7,672).

The funds were needed to meet the travel costs of the minister and one official to attend the South West Pacific Ministers for Agriculture Meeting in Suva.

The request was made due to the fact that the Government was unable to meet these costs as result of cash flow problems.

The Report said the SB$54,762 (US$7,672) was subsequently deducted from a royalty payment of SB$418,939 (US$58,693) made to the Government.

"We consider this to be an improper use of government revenue and is contrary to section 35(1) of the Public Finance and Audit Act and chapters 3 and 5 of the Financial Instructions.

"We recommend that any further advances be prohibited and that if they are made by staff, then the full force of the law should be taken against the officers involved," the Report suggested.

Another episode involves the former Commissioner of Forests, who was since terminated.

The Auditor Report says on April 9, 2002, the former Commissioner requested from Bulacan International, an ex-gratia payment of SB$50,000 (US$7,000).

He specifically requested that the payment be made as a bank check to the Forestry Division and a proper receipt will be issued.

On June 24, 2003, the former Commissioner issued another letter to the logging company.

He stated that "in the event that my other letter for request is not accepted, the Forestry Division wish to inform you that your company has incurred infringements which you are liable to pay.

"You have been served with infringement notices, which you fail to honor.

"In good faith we believe that you would pay but since we need the money now, we will cash the Bank Guarantees and allow the shipment to go."

Bulacan issued a check for SB$50,000 (US$7,000) for cash on June 25, 2003. The former Commissioner received and signed for the amount.

"The amount of the ex-gratia payment was subsequently deducted from a duty payment of SB$146,009 (US$20,455) made to Customs and Excise on 29 June 2003.

"These funds have not been accounted for and it is understood that these are part of the unauthorized ex-gratia payment that were made for Fisheries and Forestry staff," the Audit Report stated.

In total, the Audit Report found that staff in the Department of Forestry, Environment and Conservation received a total of SB$1.5 million (US$210,150) in unlawful ex-gratia payments.

November 15, 2005

Solomon Star: http://www.solomonstarnews.com

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