The Ministry of Finance is reported by the Office of the Auditor General to have committed extensive breaches of normal procedures and financial instructions in the disbursement of a SBD$9-Million Fisheries Project in 2007.Although the details are not made available by the OAG there are clear indications of the strong possibility that most of these were paid to MPs and their supporters and totally outside the 2007 Appropriation Act (the actual 2007 budget as passed by Parliament).
The "Fisheries Project" is one of the issues covered in an AOG Report on the "Status of Audits of Solomon Islands Government Entities as at 30th June 2008" released on the 28th August 2008. It was tabled in Parliament as the National Parliament Paper number 18 of 2008.
The Express understands that the Parliament's Public Accounts Committee has still not looked into this report.
The Report says that "the extent of breaches of normal procedures and financial instructions suggests this was a deliberate act to circumvent the process of legal use of government money."
The report adds that the manner in which the money was distributed suggests political favoritism during a critical period of political uncertainty in the government rather than considering the areas of greatest need in the country.
Out of the SBD$9-Million more than three million dollars (SBD$3.8 Million) of the project fund was paid directly to Members of Parliament under a "2007 Fisheries Micro Project."
The Report says that there were many discrepancies in relation to this payment which breached normal payment process for the legal use of government money.
Although the Report does not provide any other details relating to the whole disbursement of the funds, it also says that "a further SBD$350,000 was also paid as a direct transfer for this same Fisheries Micro Project which was not supported by adequate documentation."
The issue first emerged on the 19th November 2007 when the former Acting Permanent Secretary of the Ministry of Fisheries and Marine Resources formally requested the Office of the Auditor General (OAG) to investigate a SBD$6-Million paid out as small grants to a number of fishing projects.
The former Fisheries Acting PS wanted in particular the OAG to investigate the creation of an account known as "Rural Fisheries Enterprises Account" which had a total of SBD$9-Million that had been paid out.
The OAG June 2008 Report however points out that the 2007 Development Budget only provided funding for fishing related projects totaling SBD$4.1 Million. This included a Project Development Fund with SBD$1.1-Million, funded by the FFA and a Support to Rural Tuna Fisheries project worth SBD$3-Million funded by the Solomon Islands Government.
The June 2008 OAG Report says that the primary objective of the audit was to investigate why the Rural Fisheries Enterprises Account was established and assess whether the process for paying these grants was transparent.
One of the key findings of the OAG Report is that a total of SBD$9.3-Million which was paid out under the "Rural Enterprises account" was not made in accordance with the Appropriation Act (2007 Budget as passed by Parliament) and was not supported by a work plan.
The Report also adds that the method of distribution of the cheques was not in accordance with the normal payment procedures.
The Report describes the breaches as significant shortcomings and suggesting that political favoritism was involved at a time when a change of government was imminent towards the end of last year.
The OAG strongly recommends that further investigation be carried out into this SBD$9-Million project and to determine whether or not the money was used to buy the canoes, OBM's, eskies and other equipment fur rural community fishing enterprises.
Sources within the Ministry of Finance has informed the National Express that the transactions took place during the lobbying period at the end of last year and it is one example of how MPs have manipulated the system to get cash into their hands using methods that would make accountability for the funds difficult.