Oro Disaster Funds Raped by Authorities
National Reports
Senior public servants in the province and their cronies, in collusion with the banks, helped themselves to about K5 million of the total K18 million relief funds between 2007 and 2009, the auditor-general said in the report to the manager of the state-established Oro Restoration Authority, Sinai Brown.
As a result, there were no major capital works and significant maintenance to restore services and infrastructure damaged by the cyclone in November 2007.
Assistant auditor-general Gordon Kega, who was in charge of the investigation, recommended that all signi-ficant payments to individuals should be checked and individuals prosecuted for defrauding the state.
The 11-page report to Brown, a copy of which was made available to The National, said 87 individuals were paid a total of K4,610,147 “for unknown services”. Neither Brown nor Northern administration officials could be contacted to comment on the report.
The auditor-general’s office concluded that no proper financial statements were kept for the Oro provincial disaster and emergency account between 2007 and last year, confirming doubts in the minds of Northern MPs who had raised concerns in Parliament in the past 18 months about where the cyclone relief funds had been expended.
Kega noted that both the Public Finance (Management) Act and the Disaster Management Act were breached and officers from the provincial disaster and emergency office did not cooperate or assist in his audit probably because it did not maintain basic and essential accounting books and records.
It recommended criminal prosecution against self-appointed financial delegates, including bank account signatories, and officers who had “fraudulently and illegally paid themselves”.
The auditor-general noted discrepancies and flaws where K1.735 million in open cheques were cashed, open cheques of K1.023 million with no records being paid out and, in one instance, a total of K800,982 from the Provincial and Local Level Government Department was paid to individuals.
In this instance, six individuals were paid the money into their personal bank accounts “for services which were not known” – the highest being K235,120 and the lowest K66,700.
“These payments are deemed suspicious in that the funds were transferred into personal accounts. Such action warrants further investigation, these payments are likely to be fraudulent receipts of funds earmarked for the disaster relief caused by Cyclone Guba.”
In relation to the K1.023 million open cheques transactions, the bank presented copies to the audit which showed no payee names, no endorsements as well as no indication in complying with the banks’ clearance procedures.
“It is suspected that a collusion may have existed between the bank official and the open cheque payee in an attempt to conceal an illegal act.”
The auditor-general noted also that 24 companies and organistions were paid various amounts totalling K1.8 million for goods and services, but this could not be verified because proper records were not kept.
It recommended to Brown that proper investigations should be done “to prosecute all the perpetrators of fraud . . . including all bank signatories, disaster officials, senior government officers, individuals and bank officers”.
The auditor-general was especially concerned about the failure of the Provincial and Local Level Government Department to conduct any audit or investigations into the operations of the Oro disaster operations.
Senior public servants in the province and their cronies, in collusion with the banks, helped themselves to about K5 million of the total K18 million relief funds between 2007 and 2009, the auditor-general said in the report to the manager of the state-established Oro Restoration Authority, Sinai Brown.
As a result, there were no major capital works and significant maintenance to restore services and infrastructure damaged by the cyclone in November 2007.
Assistant auditor-general Gordon Kega, who was in charge of the investigation, recommended that all signi-ficant payments to individuals should be checked and individuals prosecuted for defrauding the state.
The 11-page report to Brown, a copy of which was made available to The National, said 87 individuals were paid a total of K4,610,147 “for unknown services”. Neither Brown nor Northern administration officials could be contacted to comment on the report.
The auditor-general’s office concluded that no proper financial statements were kept for the Oro provincial disaster and emergency account between 2007 and last year, confirming doubts in the minds of Northern MPs who had raised concerns in Parliament in the past 18 months about where the cyclone relief funds had been expended.
Kega noted that both the Public Finance (Management) Act and the Disaster Management Act were breached and officers from the provincial disaster and emergency office did not cooperate or assist in his audit probably because it did not maintain basic and essential accounting books and records.
It recommended criminal prosecution against self-appointed financial delegates, including bank account signatories, and officers who had “fraudulently and illegally paid themselves”.
The auditor-general noted discrepancies and flaws where K1.735 million in open cheques were cashed, open cheques of K1.023 million with no records being paid out and, in one instance, a total of K800,982 from the Provincial and Local Level Government Department was paid to individuals.
In this instance, six individuals were paid the money into their personal bank accounts “for services which were not known” – the highest being K235,120 and the lowest K66,700.
“These payments are deemed suspicious in that the funds were transferred into personal accounts. Such action warrants further investigation, these payments are likely to be fraudulent receipts of funds earmarked for the disaster relief caused by Cyclone Guba.”
In relation to the K1.023 million open cheques transactions, the bank presented copies to the audit which showed no payee names, no endorsements as well as no indication in complying with the banks’ clearance procedures.
“It is suspected that a collusion may have existed between the bank official and the open cheque payee in an attempt to conceal an illegal act.”
The auditor-general noted also that 24 companies and organistions were paid various amounts totalling K1.8 million for goods and services, but this could not be verified because proper records were not kept.
It recommended to Brown that proper investigations should be done “to prosecute all the perpetrators of fraud . . . including all bank signatories, disaster officials, senior government officers, individuals and bank officers”.
The auditor-general was especially concerned about the failure of the Provincial and Local Level Government Department to conduct any audit or investigations into the operations of the Oro disaster operations.
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