Audits show theft of grant funds

An aerial view of Wotje Atoll. The latest RMI Auditor General’s report to Nitijela shows that previous administration of Wotje Atoll Local Government in the 2009-2014 period diverted tens of thousands of dollars away from the requirements of grants that were supposed to support constructing a community center and a church. Photo: Isaac Marty.
An aerial view of Wotje Atoll. The latest RMI Auditor General’s report to Nitijela shows that previous administration of Wotje Atoll Local Government in the 2009-2014 period diverted tens of thousands of dollars away from the requirements of grants that were supposed to support constructing a community center and a church. Photo: Isaac Marty.

The audit for Wotje Atoll Local Government said $60,000 in funding from a Japan grant for the construction of a community center was misappropriated (embezzled) in the 2009-2014 period. Checks for $40,000 and $20,000 were issued to a company for building materials, but “based on our review of the supporting invoices, they appear fictitious as totals were even numbers of $40,000 and $20,000 for various building materials of varying costs,” the audit said.

Auditors said they went to Wotje to inspect the community center and “confirmed that it was not in existence” and no building materials could be located.

Auditors said their investigation showed that the grant funds supposed to be used for the community center were actually used to buy a boat that was operated by a family. But “no revenues from the boat were deposited into Wotje Atoll Local Government’s bank accounts,” the audit said.

Other problems cited in the audit:

• Between October 1, 2009 and September 30, 2014, Wotje Atoll Local Government (WALGov) reported total revenue of $119,595 but only $85,111 was actually deposited in its bank account.

• A $4,074 check from the Ministry of Finance to WALGov never cleared the bank and was eventually written off by Finance.

• Ministry of Finance issued a $24,950 check to purchase a pick up truck for Wotje in 2012 from funding under the Outer Island Economic Development Fund that is for improving life on the outer islands. “The vehicle is located on Majuro and being used in Majuro and is not benefiting the community on Wotje Atoll,” auditors said.

• WALGov received $20,000 from RMI’s Grant in Aid program in 2011 and 2012 for materials to build a church on Wotje. During a site visit to the northern atoll last year, auditors said the “building materials have not been received and used in the project.” A church assistant pastor told auditors “he does not know where the building materials are and claimed that the Mayor told him that the Council has borrowed the materials and will return them with funds from the ROC Outer Islands Economic Development Fund.”

In other news from the latest audit report to Nitijela, Auditor General Junior Patrick said RMI government checks being forged and cashed without authorization is a problem in the Marshall Islands. “We found during our investigation multiple incidences where government checks were forged and cashed without authorization or written consent of the payees,” said Patrick. “In these instances, perpetrators get a hold of checks belonging to someone else, endorse them, and cash them at local stores.”

Patrick said in all of the check forgeries reviewed, “checks were cashed at Asian stores operating locally.”

Because there is no law requiring written consent of the payee for someone else to cash a check, “we expect this check forgery to continue to occur.”

He recommended Nitijela adopt legislation to help stop the check forgeries from occurring.

Read more about this in the August 26, 2016 edition of the Marshall Islands Journal.