Govt. responds, dismisses O.P.C. recommendations

The long awaited Government response to the Officers of Parliament Committee’s (O.P.C.) report which backed claims about “corrupt practises” within certain government bodies has finally been tabled in Parliament.

The O.P.C, Chaired by Associate Minister, Muagututagata Peter Ah Him, was tasked to investigate the Controller and Chief Auditor’s reports for 2010 and 2011. In the reports, Chief Auditor, Fuimaono Camillo Afele highlighted several instances of mismanagement and corrupt practises in the government.

The O.P.C report backed the Controller and Chief Auditor’s report. What’s more, the O.P.C recommended legal action against the public servants found to have been involved in the “corrupt practises.”

The O.P.C report was tabled in Parliament in April last year.

The Standing Orders require the government to respond within 90 days.

The response, tabled this month, is dated 12 October 2014. It was addressed to the Speaker of the House, La’auli Leuatea Polata’ivao.

The five-page response (published on right) to the O.P.C.’s 70-page report dismisses the majority of the Committee’s findings and recommendations. That is just eight per cent of the paper and ink dedicated to the response to the 2009-10 and 2010-11 Controller and Chief Auditor’s reports, penned by the O.P.C. And, according to government, it is not even complete.

“The official response to the Committee’s report for the Public Accounts 2007-2008 will be tabled separately,” the government’s response reads.

“As this reflects the responses on specific issues raised as well as clarifications provided by the Ministry of Finance.

“On key areas such as actual results compared to budget estimates, the relevance of Output budgeting and allocation of resources, as well as the controls put in place to monitor Grant and 1Loan financed projects.”

While the government’s response is listed on the January Order Paper, at the time of press it had yet to be debated by Parliament, which is currently sitting.

Looking at the original O.P.C. report, it dealt in detail with no less than 12 Ministries, 14 if you include the Office of the Clerk of the Legislative Assembly and the Office of the Electoral Commissioner.

The Government deals with only nine of these, most with a simple paragraph. In regards to Public Bodies, the O.P.C. reports on 12 (out of 25), with 18 pages alone set aside to discuss the issues of the Samoa Land Corporation (S.L.C.). In seven short paragraphs, the government addresses some of the issues raised.

Systematically attempting to justify a number of issues raised by the Committee and out right dismissing the questionable practices raised by both the Controller and Chief Auditor Fuimaono C.G. Afele, claims which were supported by the O.P.C, in regards to the S.L.C.’s alleged breach of the Public Finance Management (P.F.M.) Act 2001.

For example, the O.P.C. notes that a “tremendous amount of money” was paid by the Samoa Land Corporation to the middleman company – Seyleck Global Supplies - without complying with normal and proper tender procedures.

“The Committee believe that the Management of the Samoa Land Corporation has violated requirements of Public Finance Management Act relating to government procurement of assets,” the Committee’s report reads.

This above comment was into reply to what the Fuimaono originally raised in his 2009-10 Annual Report.

“The Corporation paid $2,848,340 Tala to one company as a ‘middle man’ in most of the purchases that were made form overseas,” the Chief Auditor wrote.

“The company is based in New Zealand but most of the invoices received were in U.S.D. (United States Dollars) instead of New Zealand Dollars (N.Z.D.).

“It was too expensive for the Corporation especially dealing with only one company when purchasing any fixed asset or requiring any service such as consultancy services.”

In its response to O.P.C’s report, the government says there is no evidence to suggest that anyone involved “obtained any monetary or other benefit” in relation to the use of a middleman company.

“In relation to the issue of middleman for identified projects,” the government’s response reads.

“The main issue identified in the O.P.C. report was the non compliance of S.L.C. with government tender requirements.

“There is, however, no evidence to suggest that the Minister or anyone else in S.L.C. obtained any monetary or other benefit by direct appointment of the middleman company.”

However, the O.P.C. in its report never spoke of “monetary or other benefit” being paid to the Minister or other parties associated with the middleman’s use.

It only questioned the amount that was spent, not in tala but rather U.S. or N.Z. dollars, on using the middle man and that the practices “violated” the requirements of the P.F.M.

In regards to this issue the O.P.C. then went on to make recommendations accordingly.

“That government take seriously, the usage by the Samoa Land Corporation (S.L.C.) or any other government Ministry or Corporation, or the procurement of goods and fixed assets, and to strengthen the adherence to Government procurement policies under the terms and conditions for the purchase of fixed assets, including bids in the tender process,” the O.P.C.’s recommendation reads.

Looking now to the land benefits afforded to S.L.C. staff, specifically the 60 per cent discount on purchased property, the O.P.C. noted the Auditor General’s findings in regards to this matter.

“The Audit made clear reference to land being sold to the Samoa Land Corporation’s employees at a special offer of 60 per cent from its market price,” the O.P.C. report reads.

“The General Manager (Afoa Arasi Tiotio) also confirmed that staff members can also buy half acre land at this special price.

“The Management was asked during Committee hearings with regards to (the) sale of land to the public who are not staff members?”

the O.P.C. report reads.

“There is a subdivision a quarter acre land registered under the name Kolea, this land was bought at a price of $35,000, by [sic] the time when the value of a quarter acre land stood at $52,000.

“The sale of two quarter acre land to the General Manager, the two subdivisions at the Kolea subdivision, was sold at a price of $21,120.00 per piece.

“But the value of each subdivision at the time was $52,200 per piece, the same price member of the public paid.

“The price for a single quarter acre piece is $31,320 or 60 per cent of $52,200, pursuant to Board of Director’s resolution.

“The Committee believes that the value price that should have been paid to the General Manager should have been $31,320 per piece.

“Questions were being asked as to whether these benefits could reasonably be conceived as normal employment benefits and not too excessive.”

In response to this the government noted that the Board approved this employment perk.

“On land benefits, there is a policy, approved by the Board which allows S.L.C. employees to buy land from S.L.C. at 60 per cent of the market value,” the government’s response reads.

“This was the variation provided relating to the purchase of the General Manager’s land highlighted in the O.P.C. report”.

However, the price noted by the O.P.C. that the General Manager paid for the listed land comes in at 40 per cent of the value, not the 60 per cent as approved by the S.L.C. Board.

In its response, the government also discusses the expenses incurred by Faumunia, who was the then Minister of Environment.

“The ministerial expenses also included allocations for the Advisory Committees for the Salelologa Township and Land Sub Committeess which assist S.L.C. with collection of land rental and fees,” the government’s response reads.

In its report, the O.P.C. listed the amount spent on ‘Advisory Committees’ for the (then) Minister.

From 2006-2012, $1,024,440 tala was spent on these committees.

“The Committee feels that allocations for Advisory Committees should be paid for by the Ministry of Natural Resources and Environment,” the O.P.C. report reads.

“It should not be paid from Public Bodies Funds.”

One of the most vocal M.P.s to about these reports has been the Individual Voter’s Member Papalii Niko Lee Hang.

He was phoned for comment about this in light of the government’s response to his Committee’s report, but at the time of press none was forthcoming.

However, in the wake of the lack of government response for so long, the Associate Minister for Public Enterprise has threatened that if the government did not take the recommendations from the O.P.C. seriously Papalii said in April last year that he was prepared to go to Court over the matter.

“I have the things here signed by the Minister all ready for Court if required,” Papali’i told the Samoa Observer then.

“I can safely say that collusion to defraud public funds has been done.

“So it’s not the end, it’s just the beginning.”

According to Papali’i, the O.P.C “didn’t make up these recommendations for nothing.

They need to be implemented and (put to) action.” Asked if it was not enough that a Cabinet Minister has resigned, he said: “Well, if justice is not only seen but being done, it has to go to Court.”

Papali’i said back then that justice must be served.

“This is totally not fair,” he said, adding that public servants must be “held accountable for the amount of millions” that have been “mismanaged and abused.”

“It’s not right for someone to misuse public funds - only $1,000 or less and they serve a jail term of 3-6 months. So where’s the justice here?," he asked.

“We fought very hard for this case and it took us a long time to investigate. It’s downright corruption.

“How can they deny the facts that are out there?

“They know the rules, they didn’t play by the rules, they went ahead and did their own thing, knowingly breaking the rules.

“Corruption is anything to do with fraud and whatever ways of gaining personal gains, that’s corruption.”

The outspoken M.P. has also called for the resignation of Afoa as the General Manager of S.L.C.

A call that, to date, has seeming fallen on deaf ears.

The government’s responses on the Report of the Officers of Parliament Committee’s Reports of (sic) the Controller and Chief Auditor to the Legislative Assembly for the Periods Ended June 30 2010 and June 30 2011 is republished in full: