Fraud is major issue

Marshall Islands Auditor General's latest report to Nitijela.
Marshall Islands Auditor General’s latest report to Nitijela.

Forty-four complaints of illegal actions on the part of government workers and officials have been lodged with the Auditor General’s office over the past two years.

In his latest report to Nitijela, issued last week, RMI Auditor General Junior Patrick said his office received “13 new allegations related to bribery in official matters, check forgeries, embezzlement, bid-rigging, abuse of public office for private gain, and misappropriation of public funds.”

This brings to 44 the total of allegations local residents have passed onto the Auditor General for investigation over the past two years. The most in a single reporting period was in the January to July period last year when the Auditor General looked into 17 complaints of illegal activity.

“Two investigations were completed and referred to the Attorney General to institute further legal proceedings,” Patrick said. “Both cases referred this reporting period were related to check forgeries, a problem we have highlighted in our previous semi-annual reports.”

This year’s audit report includes a couple of dozen reports, including the first-ever compliance audit on “procurement sourcing” in the RMI government.

Concern for government purchasing — “procurement” — violations year after year prompted the compliance audit. The report, provided to Nitijela last week, says that in nearly 30 years since Nitijela adopted the RMI Procurement Code (Act) of 1988, an office essential to regulating and overseeing government procurement has never been established.

The 1988 law created a Government Procurement Policy Office within the Chief Secretary’s office that was supposed to regulate procurement by establishing regulations governing the management, control and disposal of all supplies, serves and construction to be purchased by government.

The absence of this office and its oversight functions means the RMI Bid Committee has “no formally established policies and procedures,” the audit said.

The Bid Committee and the Ministry of Finance’s Procurement and Supply Office handle tens of millions of dollars per year in government contracts for purchasing services, equipment, supplies and construction work.

The audit also documents that in 2015, Cabinet violated RMI law on three occasions by waiving Procurement Code bidding requirements. The Auditor General pointed out that RMI law does not give Cabinet or anyone else authority to change bid rules unless this is authorized by a Nitijela law. But, said the audit, “since there are no clearly written policies and procedures in place to identify how a Cabinet Minute should be treated, the Bid Committee and the Ministry of Finance accepted the Cabinet Minute (decision) as a form of waiver as they indicated that the Cabinet Minute was treated as an executive order and acted upon it accordingly.”

Waiving bidding requirements does not ensure that government “is getting value for money spent,” said the audit.



Read more about this in the August 25, 2017 edition of the Marshall Islands Journal.