THE CORRUPT ATTORNEY GENERAL OF PNG.. PART 3


Part.1 and 2 report published in social media captured some of the critical matters which of course requires a full-scale investigation into the Administration and financial affairs of the Department of Justice and Attorney General. This is a part.3 investigation report which focuses mainly on the payment authorized by Secretary for Justice before the close of 2020 which further stresses the qualification of payments and whether these payments were applied to the intended purpose and in accordance with the Department annual work.  These payments include the followings;

; Payment for Accommodation & Conference

Observation

The purpose of the creation of the Budget Steering Committee (BSC) was to assess the availability of funds, review requisitions against source documentation and endorse for processing of payments before the Secretary grant his Section.32 approval before the actual cheque payment is collected for a particular service. 

This means that all release of funds for expenditures, irrespective of the amount to apply on a planned activity would have to pass through the Budget Screening Committee (BCS) for transparency purposes.

This arrangement appears to be one of the control procedure developed to protect or minimize abuse of funds and apply them to areas not relevant to work programs.

In December,2020, a total of K425,082.60 was paid in advance for accommodation and conference purpose to GateWay Hotel and Lamana Hotel as depicted  in the table below;



 Findings

An extravagant advance payment of K150,000 made to GateWay Hotel per cheque # 024148 and 021319 dated 12/12/2020 and 15/12/2020 were paid without service being rendered to the Department.

A further K18,480.00 as per cheque # 021804 dated 25/02/2020 paid to GateWay Hotel was a final payment for Dr Eric Kwa,s family accommodation.

Similarly the Advance payment made to Lamana Hotel were all without service being rendered to the Department

A test conducted to ascertain whether these payments were vetted by the Budget Steering Committee revealed that these payments were authorized by Secretary without endorsement from the Committee.

These payments were made contrary to circular instruction issued from the Office of Chief Secretary stopping the use of HOTEL facilities and encouraging the use of Convention Centre and APEC Haus for meeting and conference purpose.

Implication

Section 32 approval granted for these payments without endorsement from Budget Steering Committee (BSC) gives no assurance whether these payments were made in the interest of the Department. Furthermore, the Budget Steering Committee (BSC) was used as a scapegoat in this instance

Payments made in advance without provision of service are in breach of the GoPNG standard procurement procedure.

Section 32 approval granted for the payment of K18,480.00 for the Secretary’s family accommodation has comprised his position as Secretary for Justice.

Noncompliance or adherence to the circular instruction from the Chief Secretary’s office banning the use of Hotels for accommodation and conference amount to insubordination. 

1. Hire of Motor Vehicle from one Supplier

Observation

Emanated from the new business practice introduced to the Department was the use of

       preferred service provider.  Island Mobile Hire Car Ltd is one of the nominated preferred service providers which the Department has opted to use to provide Hire Car service. 

Island Mobile Hire Car was paid K234,217.50 for various hire including purchase 2x15

       seater buses, while Budget Rent a Car was paid K124.743.00 for 2 months hire as 

       shown in the table below;



 Findings

Advance payment of K75,751.50 made Island Mobile Hire Car was for service not rendered to the Department. Island Mobile Hire Car is one of the preferred service providers and such advance payment made to this company appears suspicious.

Furthermore, payment of K118,800 was paid to Island Mobile Hire Car for the purchase of 2x15 seater buses which are not visible at the Department office premises. 

A test conducted to ascertain whether these payments were vetted by the Budget 

  Steering Committee revealed that these payments were authorized by Secretary without endorsement from the Committee.

These payments apparently were paid out of Vote # 11644- Brief-Out and Vote# 23159 

      - Audit Recovery. Funds allocated under these votes are to pay for cases outsourced to external Law firms and to carry out an audit on all the PIP projects in consultation with the Department of National Planning and Monitoring.

Implication

The introduction of a preferred service provider has resulted to this situation where one 

 particular company is given all the business while others miss out, thus undermining 

the Government initiative to promote SME growth in the Country.

In this instance, section 32 authority was abused as the Budget Steering Committee

        (BSC)  did not endorse and confirm availability for these payments to be processed.

No formal written quotations from three (3) deferent service providers were obtained to

        conform with GoPNG procurement requirement

2. Payments for Consultancy Services


Observation

In 2020, DJAG was able to engage consultants to develop SLOS Framework for a

newly introduced program and for Assets Management software. The Consultant engaged to develop SLOS Framework were Lawyers and others from deferent background while the Asset Management software Consultant is a local Company. 

The details of payment made to these individuals and Companys are listed in the table 

below;

Findings

The individuals who participated in the development of SLOS Framework are associates of Dr Eric Kwa- Secretary for Justice was paid between K20,000 to K32,000 in the month of December 2020 while DAG has capable in house Lawyers and Administrators who can be used to develop the SLOS Frame Work at no cost.

A Company- Femili PNG Inc was paid K100,000 for a Partnership Arrangement in Addressing what?. DJAG is not a charity organization to give out money for work that can be done internally.

Akia & Associates Lawyers were paid K86,999.00 for a support Project. What is the support project for and how will it benefit the Department?

Kumulsoft Limited was amongst the other three (3) suppliers invited to develop an Assets Management program for the Department. No decision was made to accept any of these three (3) service providers, however, Kumul Soft Limited was paid K50,000.00 without a formal service level contract agreement. This is a clear breach of the GoPNG procurement requirement.

The Integrated Finance Management System (IFMS) which is widely used by all Government Agencies which is managed by Finance &Treasury Department. It is noted that this system has the Assets Management Module which can make available on request by respective Agencies. Whilst we already have such service available on the existing system, there was no need to acquire a new system.

A test conducted to ascertain whether these payments were vetted by the Budget Steering Committee revealed that these payments were authorized by Secretary without endorsement from the Committee.

Implication

The individuals who provided the consultancy services are close associates of Dr Eric Kwa- Secretary for Justice and are Public Servants. 

Brief-out vote (23159) was used to pay for the consultancy fees to each of the individuals and Companys. It is understood that this particular Vote (2359) is restricted to pay Law Firms who are handling cases for the State.

K436,499.00 paid out for consultancy service appears to be an unnecessary cost. Instead, this money should be invested on productive activities, such as infrastructure projects  which would benefit the Department

The payment of K50,000 to Kumul soft Limited made prior to the signing of the service level agreement is in breach of the procurement process.

3. Payments Authorized by Secretary for his own benefit (2019 to 2020)

Departmental employment Contract attracts a number of benefits which include, Housing allowance, Motor Vehicle allowance and Contract Gratuity payment. Although the Secretary is entitled for the receipt of these benefit he is not supposed to authorize the payment which is related to his own use. Tabulated below are expenses authorized by Secretary himself;



 Findings

The Department paid K315,364.26 to Ela Motors Limited for his official vehicle which is appropriate. However, he has to declare whether to own it when his term of the contract expires. If he is to own it , he has to forego his car allowance to pay for the cost of this vehicle. At present, he continues to receive his car allowance.

The advance contract gratuity of K94,710 and K32,343.33 paid in 2019 and 2020 for his children’s school fee should be reimbursed through his salary deduction. Instead, he has instructed the Department to reimburse these expenses.

Secretary and family took occupancy of GateWay Hotel for more than six (6) months in 2019 at the expense of the Department. The Department paid K358,100 for his accommodation at GateWay Hotel, while he continued to receive his housing allowance.

Implication

Failure to declare his intention to own the vehicle after the expiry of his employment contract and continue to receive car allowance would mean that the vehicle will become the state property

Should he declares his intention to own the vehicle, necessary arrangement has to be made to effect salary deduction, otherwise his action is viewed to be double Deeping..

Department is not to be used to reimburse the advance contract gratuity paid for his children school fee. Failure to use his own funds to reimburse the advance payment is deed as double Deeping

Secretary should reimburse all the moneys paid for his accommodation at Gate Way Hotel through salary deduction or forego his housing allowance to offset the cost paid for his accommodation. 

Secretary has performed a risky transaction to authorized payments relating his own expenditures, thus placed the integrity of the Department in disrepute. 


Conclusion

The Department of Justice & Attorney General is  the Central Agency of the Government which is vested with important roles and responsibility will remain, while the Leaders who are appointed to lead the Department will come and exist.   Dr Eric Kwa- has been entrusted to take charge of the Department and implement the direction of the Government, instead he has introduced new business practices, thus diverted his attention on work that a line Manager is required to discharge. Consequently he has exposed himself to be a failed Secretary. 

 The allegations of misappropriation of funds against Dr Eric Kwa- Secretary for Justice which was

 widely circulated in the social media has attracted a lot of commentaries from the public  must be

  properly investigated by relevant authorities and necessary action has to be instituted accordingly. This is another report which had been prepared to ascertain whether the committee established as part of the expenditure control mechanism was used to endorsed the payments and whether the standard procurement procedures was followed before the section 32 approval was granted for these payments made in December,2020

Payments for accommodation & conferences to Gate Way Hotel, Motor vehicle hires and Consultancy Service which amount up to K1, 270,541.00 are comprised of advance payment and  outstanding payments. Investigation further revealed that these payments should come out of Good & Services appropriation, instead come out of activity votes appropriate for specific purposes. 

Furthermore, Dr Eric Kwa in his capacity as the Secretary for Justice knowingly authorized his own expenditures while holding the S32 authority, thus contrary to the Public Finance Management Act.  

It is understood that annual budget appropriation is made against an annual activity work plan and programs, hence this investigation further reveals that Brief-out and Audit Recovery & loss appropriations were applied for purchase of capital items, hire of consultants, Hotels accommodation and conference facilities. Did Secretary Kwa sought approval from Secretary Finance prior to making commitments out of these Activity Votes? It would be interesting to see what the Finance Secretary would say about this action.

The Department of Justice and Attorney General as you are aware is one of the lead Central Agencies of the public sector, unblemished, unique in its functions and services, prior to his appointment as Secretary. By comparison those good programs and work culture instilled and adopted are through out of the window as frustrated lawyers are leaving and other seniors officers displaced and are exiting the department due to lack of leadership and directions hence staff morale is at rock bottom but obvious mismanagement and micro managing style which is detrimental and damaging the high performing rating and productivity level attained previously by the department.

It is about time now for the people in authority to understand and see the plea for justice that is being addressed through this media and take appropriate action to rescue the Department before its integrity is diminished in the hand selfish Secretary who is unable to embrace the Government’s initiative in fighting corruption, instead encouraging it more and more.  


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