Allegationsof unlawful use of revenue collection by Government Officers – Auditor recommends dismissals

Transparency Vanuatu has been provided with a copy of the Audit Report which precisely details the allegation of unlawful use of revenue collection by certainDepartment of Quarantine officers. The 15 page Audit Report dated 25 November 2010 contains information outlining the mismanagement and alleged misappropriation of public funds.

It is important to understand that the Auditor General is mandated by the Expenditure Review and Audit Act 1998 to audit, investigate and report on matters that affect the management of Public funds. In this matter it was the Audit objective to determine whether revenue collected by the Department of Quarantine during the period from 2009 to mid June 2010 was fully accounted for and in particular to substantiate the allegation made against a Quarantine Officer.

As the matter is related to Government Officials it is important to shed light to some of the relevant laws and regulations. The Public Financial and Economic Management Regulation CAP 244section 1.3 provide interpretation for “revenue collector. “Revenue collector means any person authorised in writing by the Director of Finance to accept money on behalf of the Government of Vanuatu; Section 8.5“An officer who is not a designated revenue collector: (a)must not, under any circumstances, accept Government revenue from any person for any reason; and (b) must direct any person attempting to give them revenue to the Department of Finance or to the nearest appropriate revenue collector.

Section 8.7.(1)stated thatCollected revenue or public money must not be used for any private purpose whatsoever.(2) A revenue collector must not lend or advance, for any purpose, collected revenue or other public money for which he or she is accountable to the Government. (3) Revenue collected must not be used to pay directly for Government expenditure. However, at remote locations, with approval in writing from the Director of Finance, revenue collected may be used to reimburse payment imprests. Otherwise, all revenue collected must be banked complete and intact”.
Section 8.12.(1) stated that ; “An officer with cash under his or her control must not under any circumstances: (a) use such cash for any personal purpose, no matter how temporary; or (b) loan or draw such cash against any IOU or other similar document; or”
Section 8.13. (1)stated that; “A revenue collector is responsible for safeguarding and balancing any revenue received by him or her. (2) A revenue collector must have sole access to his or her revenue holding.(3)Any revenue stored overnight must be secured in a suitable safe storage facility.”
Section 8.14.(1)stated that “ It is the responsibility of the Head of Ministry to ensure that adequate safe custody facilities are provided to officers under his or her control who, through the course of their duties, are accountable for any cash. (2) It is the responsibility of the Head of Ministry to ensure that all due precautions are taken to prevent the loss or theft of such cash”.
Section 8.18.(4) stated that “The revenue collector must ensure that all revenue received is paid into the bank on a daily basis. (5) Float amounts for cash holdings must be issued by standing imprest”.

Sectoin 8.23. (2)stated that “It is the duty of every officer to immediately bring to the attention of his or her senior officer any circumstances which cause him or her to believe that there is a suspected loss, shortage, irregularity, fraud or theft of any public money”.
The Public Service Act CAP 246 Section 34. (1)stated that “every employee, director-general, director or senior administrator (as the case may be), must in the course of his or her employment in the Public Service: –(d) act with care and diligence; and(f) observe and comply with all applicable laws”.

The practice of the QuarantineDepartment Officers using revenue collections which is left unaccounted for an amount of Vt 3,501,089 to meet their minor expenses and have been borrowing from the revenue collections for their own personnel uses without any proper records maintained.
The Audit report has revealed the following findings;
• Revenue unaccounted for amounted to Vt 3,501,089
• Revenue collections used for private purposes by the officers of the department
• Shortfalls in revenue collected and deposit
• Missing cash under the custody of Senior executive officer
• Cash holding facilities required for safe keeping of revenue collected
• Cash count discrepancies
• Non- Compliance with the Public Financial Regulations
Allegations on the unlawful use of revenue collections within the department clearly state that officers involved in this matter show lack of a sense of duty in the use of public money and of which reflects their lack of care and responsibility to minimize and prevent further loss of public money.

Based on the Findings, the Auditor has made recommendation to the Public Service Commission for consideration and action. The recommendations includes the:
• Dismissal of the Director of the Department of Quarantine and inspections services
• Dismissal of the Senior Executive Officer of the Department of Quarantine and Inspection Services
• Dismissal of the Director General of Agriculture, Quarantine, Forestry, and Fisheries
And
• Appropriate measures must be taken to recover the Vt 3,501,089 un-deposited revenue collections
• Any officer found engaged in embezzlement of public funds activities be dismissed
And
• DG of Agriculture, Quarantine, Forestry and Fisheries to:
• Issue warnings to director and officers against borrowing public funds
• Recruit a permanent finance officer
• Instruct all officers to observe and comply with Public Financial Regulations
• Instruct the finance officer to undertake daily depositing of revenues collected in the government cashier
• Director of Quarantine and Inspections Services to:
• Immediately recover the other shortfalls detected by audit
• Ensure all adequate cash holdings are provided in all places where revenue is collected
• Ensure proper internal control procedures over collection of government revenue be established in the Department and are effectively enforced to minimize fraudulent activities.
• DG of finance and Economic Management to:
• Instruct the Director of Finance and Treasury to ensure regular checks are conducted over cash deposited against DP 7 forms and accompanying cash receipts and immediately follows –up any shortfalls in cash deposits.

The question remains about whether the recommendations made by the Auditor General have been successfully implemented or not. Perhaps the relevant authorities can make a media release about this. But the other point is how sad and frustrating it is to see such systematic disregard for the rules and regulations by these public servants. Government services depend on proper revenue collection. Public revenue is not a private cash fund for officials to stick their hands into as if it was their own pocket. This sets a very bad example.
Revenue collectionshould be every ones responsibility to maintain control and safeguard it in ensuring that it is used in an accountable way and therefore minimize fraudulent activities.

>>The ideas and opinions expressed in this article are those of the writer and are not necessarily those of the Vanuatu Daily