24 Sep 2013

Solomons finance ministry pulling out all stops against fraud

4:47 pm on 24 September 2013

A top official at the Solomon Islands finance ministry says it is doing all it can to stop fraud.

The comment follows the discovery of almost US$2 million worth of financial irregularity related to a programme for the building of hospitals and clinics involving both AusAid and government money.

The finance permanent secretary says eight public servants have been suspended while the matter is investigated.

Shadrach Fanega says in the past ministry of finance auditors have investigated isolated cases of fraud, but recent system improvements mean internal auditors can now monitor for improper payments. Annell Husband spoke to him.

SHADRACH FANEGA: That access has just been relayed to the internal auditors three weeks ago. That's when they have been able to compile together a report and uncover this series of irregular payments, and that this has happened not just now, it has happened since last year.

ANNELL HUSBAND: And it could have happened before that, if there was no... This could be one of the reasons it seems why there's millions of dollars going in, but not really huge amounts to show for it.

SF: Exactly. So it's because of the systems and the access we now have to the transactions that we've been able to uncover this.

AH: And you said that access was only granted three weeks ago.

SF: About three weeks ago.

AH: Is that when the system was modified to allow that?

SF: The system has been modified slowly, the different kinds of systems we now have. Although the systems are still in the heating stages, but the fact that they have now provided this access to the internal auditors [Indistinct] they've been able to monitor and uncover this.

AH: From what you're saying just there it's not likely that this is going to happen again, I guess, because the people in these positions will know that they can be audited in this way.

SF: That's the hope, that with the assistant managers that we now have people would think twice about doing something not so proper.

AH: Is there any way, though, of absolutely stopping them from doing it?

SF: We are taking the exercise slowly. [Indistinct] I could not guarantee we'd be able to stop this immediately, but at least it should give a signal that we will not tolerate or let this just happen. But certainly we are working towards ensuring that the system is improved, the financial instructions are improved, the manuals for procurement are improved. And of course with the exclusive [Indistinct] of our financial management act that should be able to enhance our ability to curb these kinds of practises.