The Morobe mistrust

PAPUA New Guinea’s provincial government system has long drawn criticism from those who have been concerned at the way many of the administrations operate their finances.

The details of just how bad things can become have been outlined by an inquiry into the Morobe Provincial Government.

The inquiry uncovered serious breaches across the whole range of activities, including the disappearance of money from trust accounts with banks in Lae.

Overall, the problem centres on the fact that proper records were never kept with regard to government investments, and the inquiry was unable to find any instance in which those investments paid a dividend back to the provincial government. The Morobe Development Corporation, which deals in cocoa devel opment, egg production, property man agement and a trade store, has continu ously lost money; the government kept on injecting new capital in the form of loans for several years without inquiring as to the causes of the losses. At least one loan was interest-free with no terms of repayment stipulated.

The Morobe government had in vested K 265,000 (U 55260,100) in Kum- Gie Corporation, a property renting

enterprise, which also operated at a loss.

In the case of Yalu Plantation, which produced cocoa and copra, the report said that sales were inaddequate and wage records had not been kept. Several other companies had financial records which were inadequate or which showed substantial losses.

The investigators have recommended further inquiries into how public funds of K 320,500 allocated to the province’s Subsistence Agricultural Improvement Programme (SAIP) had been spent between 1986 and 1989. Receipts and documents on some advances could not be found. The report said the banks had been unco-operative in providing details of how funds were withdrawn and by whom.

As at 1989 only about KlOOO re mained in the six trust accounts (which were spread over three different banks in Lae: Bank of South Pacific, Westpac and the Papua New Guinea Banking Cor

poration).

Search warrants managed to produce only a handful of cheques from Banking Corporation, but they did reveal that two officers of SAIP received advances of

K 36,000 in total without having ac counted for previous advances. The investigators also found that advances intended for village demonstrators as payment for running courses were not paid to the people concerned instead signatures purporting to be those of the demonstrators were, in fact, those of SAIP officers.

The report also outlined other inconsistencies and irregularities.

Among them: “Our investigation (though not finalised at this stage) has unearthed evidence showing that vari ous payments totalling K 14,570 to a local trucking and building venture were made out of illegal awarding of con tracts, and other payments totalling K 14,636 paid to the same venture through sub-contracting arrange ments.”

The report also outlined what it called serious breaches of the Salaries Tribunal Act, including the provision of houses for ministers outside the terms of the Act.

There was also breaches of travel allow ances by provincial assembly members and provincial ministers, while the Premier and the Speaker had exceeded their limit for entertainment allowances which are set at K5OOO and KlOOO respectively. □