What the O.P.C says

For the information of our readers, this is what the O.P.C report says about the Samoa Land Corporation. It is published here in verbatim:

SAMOA LAND CORPORATION: Financial Year audited - 01 July 2008 - 30 June 2009 Spot check - 02 Aukuso 2010; Was there any clarification? –

No. The Corporation was invited to send comments and clarifications including an update on remedial and corrective actions taken on issues raised during audit assignments. As reported by the Audit Office, there was no response when the report was finalized although the Samoa Land Corporation insisted that they have submitted their clarifications on matters raised on the 25th February 2010.

The Committee was not able to find evidence of the responses by the Management during the course of its investigations. The summary of Committee Findings base on deficiencies mentioned in the Audit Reports include:-

(ix) The Corporation did not achieve its budgeted revenue for the Financial years. An estimated actual revenue of ST$11 million fell short of the budgeted revenue for the year. The Committee confirmed that shortage in revenue earnings during the audited Financial years was due to the Corporation being overcommitted to other projects which it could not able to fund.

(x) The Committee noted an overspent of ST$2.4 million by the Corporation compared to budgeted expenditure estimated for the audited financial years.

(xi) The SLC Management seriously need to consider the implications of the Corporation’s cash flow status and should have advised the Board accordingly before approval of any project implementation which the Corporation cannot able to fund.

(xii) The Corporation during the financial year paid ST$2,848,340.00 of fixed assets to a company known as the “middle man”. The Committee confirmed that the company is based in New Zealand and its local office operating at Vaitele. The Committee raised its concern why payment of invoices for fix assets were paid in US dollars instead of New Zealand Dollars(NZD). The Committee noted it was far too expensive for the Corporation when purchasing a fixed asset or requiring any consultancy service especially dealing with only one company in the United States of America.

(xiii) The consultant fee was paid an amount of ST$123,005.51 (US$42,400) to the Consultant recommended and brought in by the middleman company to conduct operational trainings for the truck. (xiv) The Corporation land reconciliation was still incomplete at the time of the audit which the Committee should be able to identify;

(a) the movement of land;

(b) the sale or transfer of land; (c) and the actual amount of land remaining.

(xv) The Audit findings also indicated the review of trade debtors where an amount of $1.5 million tala (about 76%) of total trade debtors was made up of debtors with balances above $10,000. The Committee noted that there was no aging trial balance for trade debtors to ensure that an assessment of long outstanding accounts could be made, so that the Corporation could actually determine overdue accounts and provide a general provision of 2% on these overdue accounts as described in the summary of accounting policies.

(xvi) The purchase of land to the Samoa Land Corporations employees at 60% of the actual market price of land. Detailed Consideration: On the examination of its overall findings, it is reasonable to state that the Committee was quite unpleasant given significant number of deficiencies reported by the Audit Office within the operation of the Samoa Land Corporation. The Committee findings include:

1. Cash Flow problems: The Committee takes note of the status and implications of the cash flow of the Samoa Land Corporation. The contributing factors towards cash flow problems discovered by the Committee are:

(iv) The Corporation did not achieve its budgeted revenue as forecasted, (v) Overspending compared than budget estimates,

(vi) Over committed to projects which could not fund and no proper requirements and specifications were formally put down in a plan; The Committee confirmed that these were the most significant contributing factors to the implication of the Samoa Land Corporation Cash Flows. Further evidence discovered by the Committee include: 1.1 Land Reconciliation/Sale: The Land Reconciliation was still incomplete at the time of the audit which should show the movement in land whether it is the acquisition of new land or transfer and sale of land.

The Management confirmed implications of the Samoa Land Corporation’s cash flow which resulted in the Board’s revew of land values for sale, and the acception of a $10,000 deposit which opened the door to the public for land settlements. The decision by the Board was done under urgency, which has forced the Management to disregard its own land policies.

The Committee noted that priority were given to members of the public who paid $10,000 deposit up front. This process did not last long due to Cabinet Directive to cease all land sales.

1.2 Infrastructure Development Projects: The Samoa Land Corporation have been involved in Investment Project Developments. The Committee noted a few unsuccessful ones which caused more implication to its cash flow. These include: Faleata Golf Course, golf carts, golf cart batteries; floodlights, landscaping etc; Sale of Water Rig Drill and accessories from America; Construction of the Salelologa market; Purchase of vehicles and other fixed assets from overseas; Office Headquarters at Tuanaimato Complex; Purchase of lexus vehicle; Construction of the Vaitele Market;

1.3 Ministerial Support: The Committee through its findings discovered expenditures noted as ministerial support as part of Samoa Land Corporation’s contribution to the Office of the Minister. Listed below were amounts recorded as Ministerial Support by the SLC:- 2006 $8,429.00 2007 $110,989.00 2008 $139,491.00 2009 $159,596.00 2010 $96,440.00 2011 $186,714.00 2012 $4,278.00 TOTAL $705,937.00 The total amount when the additional cost for purchasing the Lexus vehicle which the Samoa Land Corporation bought at the prize of ST$399,105.90, (refer note 6.2), then the actual cost of the vehicle is $1,105,042.90. The Committee noted that most of the ministerial support provided for the Office of the Minister was during the last Parliamentary Term, 2006 to 2011.

However, the Committee believes that in accordance with Government or Cabinet procedures, most of the Ministerial Support derives from the Output of the portfolio of the Minister. The Minister for Natural Resources and Environment during this period was responsible for the Samoa Land Corporation, so the ministerial support should have come from the Output of the Ministry of Natural Resources and Environment (MNRE).

1.4 Allocations for Advisory Committees. Allocations for Advisory Committees for the Minister recorded for the Financial Years include: 2006 $8,429.00 Z007 $110,989.00 2008 $139,491.00 2009 $317,780.00 2010 $369,380.00 2011 $290,260.00 2012 $47,020.00 TOTAL $1,024,440.00 The Committee feels that allocations for Advisory Committees should be paid for by the Ministry of Natural Resources and Environment. It should not be paid from Public Bodies Funds.

1.5 Employees of the Samoa Land Corporation: Employees of the Samoa Land Corporation were entitled to several staff benefits. The entitlements include:- -Entitlement to 60% special price for quarter acre land. -Entitlement to bonuses at the end of each financial year despite how the staff performed. This entitlement include bonuses which last up to 2 normal pay weeks, or even more. The benefits entitlement are paid without any deduction of PAYE tax. -The appointment of the Former General Manager for the South Pacific Games as a Technical Adviser with a salary of $80,000 per annum. This post was not advertised but was a direct appointment. -Special Appointment of a Private Secretary for the Minister at a salary of $60,000 per annum. The private secretary key responsibility is to record every Board meeting the Minister was a Member of.

2. Purchasing of fixed assets from overseas Companies. Water Drilling Rig. The Committee during the course of its investigations confirmed payment of a sum of $2,192,210.90 to a private company known as “middle man” for purchasing of a second hand water drilling rig from the United States of America. The breakdown of total payment include $1,899,968 for the truck, plus import duty of $292,242.10. The Committee raised its concern questioning the Samoa Land Corporation why this transaction was paid in US dollars while the Company is based in New Zealand.

2.1 As highlighted in the Auditor’s report, it was too expensive for the Corporation especially dealing with only one company and the cost incurred for such second hand water drilling rig. Subsequently, the Committee discovered accumulated costs paid to the middle man company when other specifications were brought in later. In addition, the of the middle man company in New Zealand added more costs to this project. The Committee believes that it would have been very cost effective if the Samoa Land Corporation followed Government’s procurement policies procedures in the beginning o this project.

2.2 The failure by the Samoa Land Corporation to comply with existing Government Tender and procurement procedures. These matters was explained to the Committee as a direct result of the then Minister putting pressure on everyone (Tender’s Board) to allow what is clearly against the interest of the Government and the public to proceed with the purchasing of the water rig drill from America through a New Zealand based company.

2.3 The General Manager informed the Committee that a Tender process was carried out for the purchase of the Water Rig Drill. Unfortunately, the Corporation was not able to provide evidence of such process including a public notice calling for bids. The Committee also noted that the Tender’s Board was not informed concerning the following: (i) a supporting letter will be attached from the Samoa Water Authority for the purchase of the water rig drill, and (ii) that the Samoa Water Authority will work collaboratively through importing the water rig drill. Unfortunately, the General Manager in its letter denied any of their affiliation and they have never been consulted by the Samoa Land Corporation with regards to their opinion on the sale of the water truck.

The Committee believe that it was the Samoa Land Corporation land subdivision at Falelauniu was the main focus for purchasing the water rig drill. But the Committee noted that it was the operation of the Samoa Water Authority’s water rig drill at the Falelauniu sub-division that it finally managed to get water isolation.

2.4 The Chairperson of the Tender’s Board at the time was criticised during Cabinet meetings regarding the delay of the tendering process. The laws regulating policies and procedures governing the operations of the Samoa Land Corporation should always be abide by the Management and Board, including the Minister at the time, only then can proper control and accountability be achieved within the Government Ministries and State Owned Enterprise.

Committee’s Observations: The Committee raised their concerns of the process over the involvement of the middle man company from New Zealand in most projects carried out by the Corporation is extremely unacceptable. It would have been very cost effective if normal procurement policies and tendering process were considered.

The Committee feels that access to information technology and usage of the internet can easily determine which market price around the world is the cheapest and convenient without rendering any service from a middleman company;

(1) Quotes provided to the Tenders Board were submitted in a very unsatisfactory way, and the failure by the Samoa Land Corporation to comply with existing Govt tender and procurement procedures in these matters was explained to the Committee as a direct result of the then Minister putting pressure on everyone (Tender Board) to allow what is clearly against the interest of the public and the private sector to awarding all querries to the middleman company. However, copies of quotes were presented to the Committee and one of the invoice which was printed on one of a middleman company letterhead. The Committee confirmed that the original price approved by Cabinet for the purchase of the truck was not paid accordingly: Quotes provided to us in one very unsatisfactory, but it was inconsistent which therefore made a mockery of the objectives of the whole tender and quotes process of Government.

(ii) The Committee evidence proved that the total amount incurred by the SLC on purchasing the water rig drill is as follows: Cost approved by Cabinet ST$1,196,067.93; (or US$450,000) Cost paid by the Samoa Land Corporation ST$2,192,210.90 Difference in price total ST$996,142.97 The actual price as per Cabinet Directive is ST$1,196,067.93; from the total cost of the truck stands at ST$1,089,750.78, plus ST$106,317.15 as consultant fee.

Or to convert into US Dollars which is US$410,000 for the truck (Drilling Rig) and US$40,000 for the technician/consultant. Unfortunately, based on the Committee evidence the total cost of the truck plus its accessories equals to ST$2,192,210.90. A total of ST$1,899,968.10 for the truck, plus freight duty of ST$292,242.80. Thus implies that ST$996,142.97 or 83% exceeded the original cost for purchasing the truck, as approved by Cabinet.

The Committee believes that approval of additional costs of ST$996,142.97, should have been referred back to Cabinet for approval as normal Government procurement procedures. The Samoa Land Corporation being unable to verify normal procedures truly implied that no submission was forwarded to Cabinet for approval. The Management of the Samoa Land Corporation has violated requirements of Public Finance Management Act relating to Government procurement policies.

3. Middleman Company: The Committee focused its findings on the operations of the middleman company based in New Zealand as reported by the Audit Office. The Committee later found out that although this company is based in New Zealand, but it is managed and operated by a Samoan businessman living in New Zealand. The Committee confirmed that this company now has an agent at Vaitele, The Committee also confirmed that the full name of the middleman company is SEYLECK GLOBAL SUPPLIES (SGS).

3.1 A tremendous amount of expenditure was paid by the Samoa Land Corporation to the Middleman company 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.

a. The Committee noted that it has been a while since the Samoa Land Corporation and the Middleman company have been working together collaboratively. In July 2007, the Samoa Land Corporation issued payments of ST$3.5 million to the Seyleck Global Supplies Co Ltd, and another transaction in December 2008, for fixed assets which include 3 motor vehicles, computer set, heavy equipment, golf equipments. In 2010, Committee found evidence of an amount of ST$986,449.09 for heavy machinery, survey fees & expenses, repairs and maintenance of machines and golf course, purchases of pro-shop, and safety gears. The Committee believes that conducting surveys and repair maintenance work shall be paid in local currency and portion of VAGST for our economy. Unfortunately, all of these transactions were paid in New Zealand and US Dollars.

3.3 The Committee also confirmed that the Samoa Land Corporation is not the only Public Body affiliated to the Seyleck Global Supplies. The Electric Power Corporation also used the service of the middleman company, as well as the Samoa Airport Authority and the South Pacific Games Authority 2007. The Committee noted that it was the involvement of the Seyleck Company in the South Pacific Games in 2007, when the Samoa Land Corporation s t a r t e d negotiations with them during that period.

4. Samoa Land Corporation Estates:

4.1 As mentioned in the Audit report, there was no land reconciliation process of the Corporation estates during the audited period. There are three Trustees of Government Land at the moment which is the Samoa Trust Estate Corporation(STEC), the Samoa Land Board Commission (Land Board), and the Samoa Land Corporation(SLC), and because of the uncertainty to trace each trustee estates register, as it is difficult to reconcile land already being registered.

4.2 The Audit made clear reference to land being sold to the Samoa Land Corporation’s employees at a special offer of 60% from its market price. The General Manager 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:- (i) sale of land to the public who are not staff members? There is a subdivision a quarter acre land registered under the name Kolea, this land was bought at a Price of $35,200, by the time when the value of a quarter acre land stood at $52,200? (ii) the sale of two quarter acres of land to the General Manager, the 2 subdivision at the Korea subdivision, was sold at the price of $21,120.00 per piece, but the value of the each subdivision at the time was $52,200 per piece, the same price members of the public paid. The price for a single quarter acre peace is $31,320 or 60% of $52,200, pursuant to the Board of Director’s Resolution. The Committee believes that the value price that should have been paid by 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.

4.3 The Committee also noted irresponsible of the Samoa Land Corporation in collecting outstanding land leases. This is one of the core responsibility of the Corporation in order to earn and increase its revenue. 5. Annual Reports. In the context of submitting Annual Reports to Parliament, it has not at any time in the last six years that it has been prepared on a timely basis and forwarded to the Audit for auditing to allow tabling in Parliament as required under the Public Bodies Act 2001 and provisions of the Public Finance Management Act 2001.

Timeliness of that report back to Parliament, and accounting transparently and clearly for the uses of publicly provided resources, therefore, is fundamental to the effectiveness of the monitoring role of Parliament. The Committee noted that the Corporation has violated provisions of these Acts of Parliament. The last report by the Samoa Land Corporation tabled in Parliament was for period ended June 2005. Since then no other have been tabled which include Financial Year 30th June 2006, 2007, 2008, 2009, 2010, 2011 & 2012. The Management when querried regarding this issue, replied that some of their Annual Reports were kept in a strong room.

This is a management failure and there was no evidence found to show it ever exercised these important functions or effectively did so. 6. Other Findings: 6.1 Landscaping Contract: The Samoa Land Corporation failed to comply with existing Government tender and procurement procedures. A landscaping and Nursery company earns $16,833 per month equivalent to ST$202,000.00, annually.

The Committee confirmed that no tender process took place calling outside bids as per normal Government Procurement Policies. The Committee feels that not only that the Management has breached its own laws, but exposing the Public Entities to this unhealthy practice, but the Committee thinks it is inappropriate and unfair to the private sector. The Committee conducted its site visit to the Tuanaimato Headquarters and found out it was only this landscaping company only deals with nursery but do not do the lawn mowing of the compound. The Management confirmed that $12,000 is paid every month to this company ever since the opening of the Faleata Golf Course.

6.2 Lexus Vehicle. The Samoa Land Corporation provided the Minister with a Lexus vehicle although the Minister’s Ministerial Support under the Ministry of Natural Resources shall provide appropriate funding for the Minister. The Management of the Samoa Land Corporation confirmed that the purchase of the lexus vehicle did not go through the usual tendering process neither a submission to Cabinet.

On the examination of the overall evidence, it is reasonable to state that no formal procedure was taken and the importation of the vehicle was the Boards decision. However, the Committee found out later that the vehicle purchase was not considered either in any of the Board’s meeting. The budget submission for the Financial Year to the Board’s meeting included costs of ST$400,000. The Management confirmed that this amount was for purchasing 2 separate vehicles at a price of $200,000 each, one for the Minister and the other for the Corporation.

6.3 The total cost of the Minister’s vehicle is not $200,000 as indicated in the Budget Submmission, but the actual cost is $399,105.90.

This is quite expensive compared to other Cabinet Ministers vehicles. The only concern raised by the Committee, it did not go through the usual procurement procedure.

6.4 Samoa Land Corporation Headquarters. The Committee during the examination of the overall cost incurred during the construction of the Samoa Land Corporation’s Headquarters project, it raised its concern on the total cost which was approved by Cabinet. The total evaluation of the construction work was ST$2,800,000 including taxes. The Committee during its findings found out that the contract was awarded to the second bidder with its bid of (ST$2,600,000) with no estimated cost for installing an elevator in its original bid.

The Tenders Board made its recommendation to Cabinet through the Minister of the Samoa Land Corporation at the time, to include the installation of an elevator to accommodate the second and the third floor of the Building. This was the only reason why the contract was awarded to the second bidder which has quotation costs for installation of the elevator.

Based on Committee evidence, the construction cost of the SLC Headquarters was estimated at ST$4.495,979.67. The variation difference of $1,695,979.67, exceeds the original cost. The Committee understand that any project variation has to go through the same process, to be valuated by the Tender’s Board. The Committee findings identified that variation costs incurred include:

(vii) The installation of the elevator was the main reason why the contract was awarded to the Construction company. The original cost of the project was T$180,000, but due to variations needed resulted with the import of the elevator at a price of T$490,000. The difference in variations is 172 % increase tan the original estimated cost. The Committee believes that Cabinet would have changed their decision if only the elevator was included in the original plan.

(viii)The Committee during its site visit confirmed that the Office elevator was still not working. The Management also confirmed that the elevator never worked ever since the completion of the project in 2011, till now.

The Committee raised its concern regarding the elevator which was the reason why the whole process was verified. (ix)It is important to realize that if the corporation cant achieve high standards and productive management of the public resources, then General Mangers and top Government Officials should lead by example and show the rest of those within the service under their leadership influence and control what responsible and productive management and leadership is.

(x) A breach of responsibilities by the General Manager also calls for similar response. A lot of variations were done to the construction Works, the Corporation was unable to verify the physical existence and the inclusion of these variations which were not included in the quotation. However, all variations were done by a single contract and the actual additional cost to the project increased by 60% was paid directly to this company. Some of the variations noted include

(a) the window glasses for all sections of the building;

(b) partitions for each floor of the whole building;

(c) changing the airconditioning unit for the building, and (d) the installation of the elevator.

The Committee during its consideration found out that the drawings and the original plan of the building when it was tendered out at the first time for bids did not include finishing requirements and furnishing for the three levels (completely open) except bathrooms and toilets for staff and disabilities.

The Principal Officer also confirmed that partitions and private offices were also excluded in the drawing which should have been there when it was advertised. The Committee noted that several of the construction project reviewed were unsatisfactory in a number of ways which include the variations which the Management should carefully considered in the beginning.

Towards the end of the construction work, the Committee confirmed that the Corporation paid full payment to the Contractor without deducting the withholding tax of the total cost of the project. This enhances the risk of collusion and favouritism, something evidence suggests, has occurred on an extensive basis and has violated government policies of retaining 10% of withholding tax of any services rendered to Government agencies. In addition, the Corporation also paid out to the Construction company 10% of maintenance retention of total cost of the project while the construction was still in progress.

The retention price should have paid after 12 months from the completion date of the project, and the retention as well should only be paid if the owner of the project is fully satisfied with the work done. The Committee believe that the security bid bond was used to replace the maintenance retention, which is completely inappropriate.

It was during the Committee’s investigations that found out that the security/bid bond as it appeared was included only during the tendering process and it basically stands for 30 days. This insurance provides as a guarantee of funds available for all bids to declare before the actual construction starts.

Based on evidence received by the Committee, showed that the Chairman of the Board approved payment of the retention cost for maintenance cost. The Committee believe that the documents provided revealed how unsatisfactory the progress of this project went through, the headquarters was not based on any establishment and consistent specified works requirements, and it therefore made a mockery of the objectives of the whole tender and quotes process of Government.

The Committee also believe that the retention cost would have been useful for maintenance work of the elevator, and other areas of the building which requires maintenance within 12 months before it expired.

The Committee also found out that an Insurance agreement was signed before the construction began. The insurance is called the performance security bond which is 10% of the total construction cost, and it is intended for the insurance for the Corporation as the construction progresses. Based on evidence provided, it confirmed that the Corporation has violated requirements of the Insurance agreement signed between the Insurance Company relating to the release of 10% of the performance security bond to the Contractor when it has not even matured and the construction work has not been completed at the time.

The Committee based on evidence confirmed payment of ST$700,000 or 25% of the total cost to the Contractor as an advance payment before the end of construction. Clearly the Samoa Land Board and Management have breached their trust obligations to the public and their contractual, administrative and financial responsibilities to public funds. The Review Committee overseeing the project, comprising the Chairman of the Board who is the Minister at the time. The Committee believes that this is extremely unacceptable which shows quite clearly, the control and accounting purposes for which these documents were set up for, especially the progress monthly payment.

The Committee found out that an agreement was signed by having the progress monthly payment to the Contractor and reducing the time span of the project from 7 to 6 months. Unfortunately, the construction lasted 7 months and there was no reason why payment of 25% in the beginning. The Committee believes that this is what the security bid bond was intended for but the insurance was never considered by the Samoa Land Corporation during the tendering process, and decide that 25% should be paid to the Contractor at the beginning of the construction.

The Committee also found out that payment was made on 29 July 2010, while the agreement has not been signed on 6th August 2010. The failure by the Samoa Land Corporation to comply with existing Government tender and procurement procedures in these matters was totally unacceptable in the Committee’s view. To allow what is clearly against the interest of good governance when no security bond given to the Corporation at the beginning of the tendering process, and the payment of 25% of the total cost at the beginning to the Contractor when no agreement was declared and signed.

The Committee based of sol i d evidence confirmed that several aspects o f the Samoa Land Corporation construction project reviewed were unsatisfactory in a number of ways, and the failure of the Corporation to consider signing a security performance bond as a security while the project was in progress.

(xi) The Committee highlighted a significant number of deficiencies which required remedying and covers aspects relating to the construction of the Samoa Land Corporation Headquarters. The Committee believe that the variations of 60% or the amount of ST$1,695,979.67, from the original cost of ST$2,800,000, should have been referred to Cabinet for approval.

The matter was only discussed and approved by the Board of Directors of the SLC. 6.5 Development Projects; The Committee noted as part of continuing developments by the Samoa Land Corporation approved in one of its Board meetings was the construction of rental units with an estimated amount of $1.5 million tala currently under construction at Malifa.

The only concern raised by the Committee is that these types of projects are not within Samoa Land Corporation Corporate objectives but should have been awarded to the Private Sector. The Committee also revealed through its findings an initiative joint venture commitment initiated by the Samoa Land Corporation and one of a private owned company known as Farm-Tech. The Committee is doubtful of possible outcome out of this joint venture project approved by the Board.

7. Deficiencies in Management Decision Making: - Based on its findings, the Committee have come across too many decisions and actions taken by the Board and the Samoa Land Corporation Management where the decision making in each case had very significant impact on the Corporation’s cash flow; - What is disturbing and alarming to note that the Board and Corporation Management always had the impression they have unlimited authority to do whatever they may wish to do with public resources;

- The Board and Management violated requirements of Government Policies relating to procurement policies and tendering process,

- The failure of the Samoa Land Corporation to comply with their Statutory Obligations in relation to submitting Annual Reports to Parliament at the end of each Financial Year. - Failure to deduct withholding taxes of any services rendered should never have happened nor it be allowed to recur in future. - There is no point in having taxation laws which are not consistently and effectively administered and enforced, in fact laws w hich are not enforced properly, particularly failure to deduct withholding taxes requirements will result in financial inequities for the Corporation;

- Commitment by the Samoa Land Corporation to other investment which include the water rig drill projects is completely beyond the Corporation’s core objective and responsibility as stipulated by its portfolio.

The Committee believes that this project as well as others are extremely unacceptable;

- The Committee believes that the involvement of the middle man company from New Zealand in most projects carried out by the Corporation is extremely unacceptable. It would have been very cost effective if normal procurement policies and tendering process were considered. The Committee feels that access to information technology and usage of the internet can easily determine which market price around the world is the cheapest and convenient \without hiring any middleman company;

- The main objective behind Government’s vision to privatize Government Authorities to operate as State Owned Enterprise(SOEs) to be monitored by Board of Directors, is to generate income and declare annual dividents contributing to financing various Governments commitments and activities appropriated in Annual financial budgets from time to time.

RECOMMENDATIONS: In the conclusion of its Findings the Committee resolved to recommend:

8.1 On the examination of the overall evidence, it is reasonable to state that due to the seriousness of discrepancies and corrupt practices reported in the Chief Auditor’s Report, and that the Committee has confirmed these matters from its findings, Government is therefore recommended that these Committee findings as mentioned in the report be noted, and appropriate legal actions be implemented and applied to all those who are involved in this investigation to ensure corrupt practice and that relevant provisions of the law.

8.2 That a special performance audit be carried out in the provision of services rendered by Management of the Corporation as soon as practicable.

8.3 That Government take seriously, the usage by the Samoa Land Corporation (SLC), or any other Government Ministry or Corporation, of the so called “intermediary company” (Middleman), for any services or the procurement of goods or 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.

8.4 That the Samoa Land Corporation be ordered to submit their Annual Reports for years commencing in the year ended June 2006 up to June 2012. All these Annual Reports fall within the last Parliamentary term, in the year 2006 to 2011 and continue up to 2012.

8.5 That Government take note seriously with regards to the payment system used in paying contracts or consultants in order to comply, and to enforce the deduction of withholding taxes and remit those to the Ministry for Revenue within the specified times provided by law.

8.6 That Government takes note of employment policies in the recruitment of employees, particularly in Government Corporations, so that direct appointments be ceased forthwith, and that vacant positions be advertised, in order to give equal opportunities to those who wish to apply. 8.7 That Government takes note of the compliance of all Government Ministries and Corporations, in respect of tax legislation applied to salary or wages of any employee, so that all taxes that Government must receive are assured.

8.8 In accordance with the motive that established a Corporation, the funding of the Office of the Minister was given to the main Ministry under which the Minister is responsible for. Such arrangement is still being monitored and continued, by the Ministry of Finance and the Audit Office, on a daily basis. This will help ease the constraints on the Corporation’s budget, due to services rendered for the Minister’s Office.

8.9 That Government takes note of an efficient organisational structure and the administration of the Samoa Land Corporation, and in particular, its responsibilities and objectives that constituted its establishment.

The Committee notes that a Sports Authority has been established to be responsible for grounds and sports facilities of Government. The responsibilities of taking care of all grounds and sporting facilities that are located at Tuanaimato Sports Complex, including the Golf Course and the general maintenance of the whole grounds, must now be given to the Sports Authority. Such an arrangement will allow the Samoa Land Corporation to seriously review its mandatory responsibilities and functions and direct its effort to its priority areas.

8.10 That Government take note seriously of the Tender System using design and build concept, which allows corrupt practice or prejudice, especially in the interpretation and reading of design plans.

The Committee believes, that the provision of an actual plan at the beginning of the Tender process, gives the notion that this is the same job that will be done, with all the contractors witnessing, and in that respect, all the contractors will have equal opportunities at the tender that will be made. With this in mind, that will make things easier and the final decision of the Tender will be very transparent.