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• Performance Audit Report on
  Payments and Acquittals of ServiceImprovement Programs (SIP)

  AUDITOR GENERALS OFFICE

  Auditor-General’s Office of Papua New Guinea

  Performance Audit on the Effectiveness of Payments and
  Acquittals of Service Improvement Programs (DSIP, PSIP and
  LLGSIP) for the Fiscal Years 2013- 2016.

  Auditor Generals’s Office of Papua New Guinea

  Telephone: 301 2200 Fax: 325 2872 Website: www.ago.gov.pg Email:
  [email protected]

• Page 2 of 73

• 25 November, 2019

  The Hon. Job Pomat, MP

  Speaker of the National Parliament

  Parliament Haus

  WAIGANI
  National Capital District

  Dear Mr Speaker,

  In accordance with Section 214 of the Constitution of the
  Independent State of Papua New Guinea,
  and the Audit Act 1989, I have undertaken an audit of selected
  aspects of the Payments and
  Acquittals process of the Service Improvement Programs over the
  period 2013-2016.

  I submit the report of this audit which is titled Performance Audit
  on the Effectiveness of Payments
  and Acquittals of Service Improvement Programs (DSIP, PSIP and
  LLGSIP) 2013-2016.

  Following its tabling in Parliament, electronic copies of the report
  will be available on the
  Auditor-General’s Office homepage https://aqo.qov.pq/.

  Yours sincerely,

  Ck.

• Page 3 of 73

• Gordon K ga- MBA, CPA

  Acting -Auditor-General

  Contents
  Acronyms and Definitions
  9
  SUMMARY AND RECOMMENDATIONS
  10
  Background
  10
  OVERALL AUDIT CONCLUSION
  11
  DIRD.
  13
  1. INTRODUCTION
  15
  BACKGROUND TO SERVICE IMPROVEMENT PROGRAM (DSIP, PSIP AND LLGSIP)
  15
  AGENCIES KEY ROLES AND RESPONSIBILITIES
  15
  ABOUT THE AUDIT
  17
  Audit Objective
  17
  Audit Approach and Methodology
  17
  Previous Audit Coverage
  17
  2. SERVICE IMPROVEMENT PROGRAMS — GOVERNANCE FRAMEWORK
  18
  INTRODUCTION
  18
  APPLICABLE LEGISLATION
  18
  GOVERNANCE AND POLICY FRAMEWORK
  19
  CONCLUSION
  20
  RECOMMENDATION 1
  21
  Department of Finance Response:
  21
  Department of Implementation and Rural Development (DIRD)
  Response: 21
  3. PAYMENTS AND ACQUITTALS OF SIP (DSIP, PSIP AND LLGSIP)
  22
  BACKGROUND
  22
  MANAGEMENT AND PAYMENTS OF DSIP, PSIP AND LLGSIP
  22
  ACQUITTALS OF DSIP, PSIP AND LLGSIP
  25

• Page 4 of 73

• CONCLUSION
  27
  RECOMMENDATION 2
  28
  Department of Finance Response:
  28
  DIRD Response:
  29
  RECOMMENDATION 3
  29
  Department of DIRD Response•
  29
  4. MONITORING AND REPORTING OF DSIP, PSIP AND LLGSIP
  30
  BACKGROUND
  30
  MONITORING AND REPORTING OF PROJECTS
  30
  COORDINATION BETWEEN DIRD AND FINANCE DEPARTMENT
  31
  Auditor General’s Office of PNGI Performance Audit Report —
  Effectiveness of Payments and
  Acquittals of the Service Improvement Program (SIP)
  Page 7

  Awareness and Training
  32
  CONCLUSION
  32
  RECOMMENDATION 4
  33
  DIRD Response:
  33
  RECOMMENDATION 5
  33
  DIRD Response:
  34

  TABLE OF FIGURES
  Figure 1: DSIP Actual Payments and Appropriations by Year
  23
  Figure 2: PSIP Actual Payments and Appropriations by Year
  24
  Figure 3: LLGSIP Appropriations and Actual Payments by Year
  24
  Figure 4: Acquittal status of DSIP
  26
  Figure 5: Acquittal Status of PSIP
  26
  TABLES
  Table 1: Service Improvement Programs — Roles and Responsibilities
  16

• Page 5 of 73

• Table 2: Service Improvement Program (DSIP, PSIP and LLGSIP)
  Appropriations and Payments 23
  Table 3: SIP Acquittal Status 2013-2016
  25

  APPENDIXES
  Details of SIP Acquittal Status
  35-37

  Auditor General’s Office of PNGI Performance Audit Report —
  Effectiveness of Payments and
  Acquittals of the Service Improvement Program (SIP)
  Page 8

  Acronyms and Definitions

  SIP Service Improvement Program- covers (DSIP, PSIP and
  LLGSIP)

  DSIP District Service Improvement Program

  PSIP Provincial Service Improvement Program

  LLGSIP Local Level Government Service Improvement Program

• Page 6 of 73

• DIRD Department of Implementation and Rural Development

  DoF Department of Finance

  OLPG and LLG Organic Law on Provincial Government and Local Level
  Government

  AGO Auditor General’s Office

  DDA District Development Authority

  PFMA Public Finance Management Act 1995 (as amended)

  MTDP Medium Term Development Plan

  DSP Development Strategic Plan

  NEC National Executive Council

  CACC Central Agency Coordination Committee

  PIP Public Investment Program

  MBC Ministerial Budget Committee

  CRF Consolidated Revenue Fund

  Consolidated The account into which all the revenue of the State
  which the Parliament has the power to
  Revenue Fund appropriate are paid and kept by Department of Finance.

  Public Debt A committee set up within the Treasury and Finance
  Department to make important
  Committee decisions to allocate funds to the agencies on a
  monthly basis. The committee is also tasked
  (PDC) to monitor and report on cash availability at the
  Consolidated Revenue Fund to disburse in
  a given month.

  PNG Papua New Guinea

• Page 7 of 73

• JDP and BPC Joint District Planning and Budget Priority Committee

  JPP and BPC Joint Provincial Planning and Budget Priority Committee

  NEFC National Economic Fiscal Commission

  PG and LLG Provincial Government and Local Level Government

  Vision 2050 is a framework which sets out PNG’s long
  term strategies to guide future

  Vison 2050 direction for the country and reflect the aspirations
  of the people of PNG. Available at
  https://www.treasury.gov.pg/html/publications/files/pub
  files/2011/2011.png.vision.2050.pdf

  Auditor General’s Office of PNG I Performance Audit Report —
  Effectiveness of Payments and
  Acquittals of the Service Improvement Program (SIP)
  Page 9

  Summary and Recommendations

  Background
  1. In 2007 the PNG National Government allocated K10 million to
  each of the Districts to be
  managed through a District Services Improvement Program (DSIP). The
  funding has continued at
  this rate each year since then, although not all districts have
  received their full entitlement over the
  period. Subsequently, the National Government established the
  Provincial Services Improvement
  Program (PSIP) in 2013 with the allocation to each Province of an
  additional K5 million for each
  District within the Province. More recently, Local Level Governments

• Page 8 of 73

• have also been allocated
  K500,000 each through the Local Level Government Service Improvement
  Program (LLGSIP). The
  Service Improvement Programs (DSIP, PSIP and LLGSIP) are intended to
  give effect to government
  decentralisation reforms in accordance with the Organic Law on
  Provincial and Local-Level
  Government (PG and LLG).
  2. The purpose of the Service Improvement Programs is to provide
  for a holistic approach to
  service delivery, involving all stakeholders including Members of
  Parliament, National Departments
  and Agencies, Provincial and District Administrations and the
  recipients themselves (the people),
  taking into account the principles of ownership, affordability,
  sustainability and leadership. The
  primary objective of the programs is to make available minimum
  service delivery standards through
  the provision of infrastructure and facilities, including essential
  services such as health, education,
  law and justice, water and sanitation, transport, communication and
  rural electrification.
  3. In order to address concerns about the program expressed by
  Members of Parliament and
  other stakeholders, a performance audit of selected aspects of the
  Service Improvement Programs
  was carried out covering the period 2013-2016. The objective of the
  audit was to determine
  whether there is:
  • Applicable legislation and a sound governance framework in
  place to manage the service
  improvement programs (DSIP, PSIP and LLGSIP);
  • Effective management of funding allocations and acquittals of
  payments made under the
  service improvement programs; and
  • Effective monitoring and reporting of service improvement
  program results against
  implementation plans.
  4. The audit did not examine the management of funds at the
  Provincial, District or Local Level,
  but was focused on the central coordinating agencies.
  5. In the early stages of the program DSIP funds were managed
  through a dedicated Trust
  Account within the Trust Division of the Department of Finance. In
  2012 the Trust Account was
  closed and the funds were transferred to the Consolidated Revenue
  Fund (CRF) and managed
  together with other public funds. In total, the annual budget
  allocation for the DSIP is K890 million
  to fund 89 Districts whilst the PSIP and LLGSIP budget allocations
  are K445 million and K157 million
  respectively, to provide funding for 22 Provinces and 314 LLGs
  across the country.
  6. Since 2013, the funding for DSIP and PSIP and the more recently

• Page 9 of 73

• introduced LLGSIP has been
  managed by the Department of Finance. Funds are released to
  respective Provinces, Districts and
  LLGs on a monthly or quarterly basis whilst the monitoring of
  acquittals and inspections of projects
  is coordinated by the Department of Implementation and Rural
  Development. The SIP

  Auditor General’s Office of PNGI Performance Audit Report —
  Effectiveness of Payments and
  Acquittals of the Service Improvement Program (SIP) Page 10

  Administrative Guidelines and Finance Instructions require that the
  disbursement of SIP funds and
  payments shall be strictly upon receipt of the previous year’s
  implementation and financial reports
  (acquittals) and subject to the availability of funds.
  7. The Department of Finance (DoF) and the Department of
  Implementation and Rural
  Development (DIRD) jointly issue SIP Administrative Guidelines and
  Finance Instructions from time
  to time to govern the management and implementation of the program.
  As noted above, the key
  legislation that provided for the establishment of service
  improvement programs is the Organic Law
  on Provincial and Local-Level Government. The applicable legislation
  for the control of public funds
  is the Public Finance Management Act 1995 (as amended).

  Overall Audit Conclusion
  8. The AGO’s review and assessment of the legislative and policy
  framework governing the
  establishment and operation of the various service improvement
  programs at the National and sub-
  National level show that in overall terms, the administrative
  arrangements are clear and
  comprehensive. In practice there are split responsibilities giving
  rise to uncertain accountability
  requirements which have acted to the detriment of the programs and
  there would be a case for the
  Government and the central agencies to consider simplifying the
  various policies, legislation and
  guidelines. The current arrangements for the DSIP, PSIP and LLGSIP
  include laws under sections 95A
  and B of the Organic Law on Provincial and Local-Level Government
  (OLPLLG); the Public Finance
  Management Act 1995 (as amended), and various Administrative
  Guidelines and Finance
  Instructions jointly issued from time to time by the Department of
  Finance and the Department of
  Implementation and Rural Development (DIRD).
  9. Any review of the service improvement program might also
  consider the way the various

• Page 10 of 73

• sub-national service improvement programs are itemised in the
  Appropriation Acts, which provide
  the legal authority for the approved budget. At present the funding
  for DSIP, PSIP and LLGSIP are
  grouped together in the Appropriation Act with the inclusive total
  amount appropriated for each of
  the Provincial Governments. Poor visibility of individual budget
  funding allocations for the service
  improvement programs currently set out in the Appropriation Act can
  lead to poor governance and
  accountability. It is important that there is a sense of confidence
  and ownership within Districts,
  Provinces and Local Level Governments. Not only to assist sub-
  national administrations, but also for
  the sake of the people the programs are intended to assist. Clear
  lines of accountability are an
  incentive to assist in the proper management of the funds and
  discourage those that may consider
  manipulating the funds for other purposes.
  10. The audit shows that the annual SIP payments made were
  significantly less than the
  amounts that had been appropriated through the budget process. There
  were very few records
  available to support the proper administration and management of the
  service improvement
  program, particularly in relation to decisions made on the
  allocation and distribution of funds to the
  respective Districts, Provinces and LLGs. In many cases SIP funds
  were unequally allocated and
  distributed. While there may be good reasons for some Provinces,
  Districts and LLGs to receive
  more funding than others, these reasons should be recorded in some
  way for accountability and
  review purposes, as well as to facilitate a shared understanding of
  the arrangements.
  11. It is a requirement of the administrative arrangements that
  prior year allocations are to be
  acquitted prior to current year payments for the service improvement
  programs. However, for the
  year 2016 only 30 per cent of the 111 total Districts and Provinces
  submitted their acquittals to the

  Auditor General’s Office of PNGI Performance Audit Report —
  Effectiveness of Payments and
  Acquittals of the Service Improvement Program (SIP) Page 11

  Department of Implementation and Rural Development for checking
  while 70 per cent remained

  outstanding. For the LLGSIP, there were no acquittal reports
  submitted to DIRD over the period

  2013-2016. In most cases the acquittal reports were submitted late

• Page 11 of 73

• to DIRD and there were

  mismatches in most acquittal figures reported against original
  payment amounts disbursed by the

  Department of Finance. This is largely caused by a lack of resources
  and skills at the District and

  Provincial level in compiling acquittal reports. As well, there is a
  capacity and funding constraint

  experienced by DIRD causing delays in carrying out monitoring and
  compliance functions in a timely

  manner.

  12. The decentralised nature of SIP funding arrangements means there
  is a requirement for

  sound corporate governance and accountability arrangements. This in
  turn drives the need for high

  levels of cooperation between the central agencies in the
  implementation of corporate governance

  strategies. These strategies must clearly identify possible fraud
  risks and how these risks will be

  managed and minimised. One way to minimise the risk of fraud and
  malfeasance is to regularly

  monitor and report on the program, and conduct reviews to address
  any shortcomings that

  emerge. However, the coordination arrangements between the
  Department of Finance and DIRD in

  terms of sharing data and information relating to SIP payments and
  acquittals was poor and largely

  ineffective. There is a gap between the process of monitoring of
  acquittals for SIP funds, managed

  by DIRD and subsequent payments being made, managed by Finance. The
  SIP Administrative

  Guidelines and Finance instructions are intended to address this
  problem, but the coordination

  arrangements are not operating as intended and should be reviewed.

  Recommendations

• Page 12 of 73

• Set out below are the recommendations identified during the course
  of this audit.

  To provide a stronger legislative basis for program
  funding, the AGO recommends that

  1the Department of Finance and Department of
  Implementation and Rural
  Recommendation 1
  1 Development work closely with the Treasury
  Department and the Central Agencies

  Paragraph 2.14 ! Coordination Committee (CACC) to ensure that the
  detail of funding allocations for the

  service improvement programs (DSIP, PSIP and LLGSIP)
  are clearly itemised and

  ■ included in the Appropriation Bill for approval in
  Parliament.

  Agency Responses

  DoF:

  Confirmed. The budget line items for SIP (DSIP, PSIP and LLGSIP)
  funding allocation are included in the total amount

  appropriated for each of the Provincial Budget Allocations contained
  in the Appropriation Bill. The creation of Chart of

  Accounts (CoA) codes that aligns with the budget codes or Budget
  lines falls within the jurisdictions of Treasury

  Department. Treasury is responsible to allocate budget codes to all
  State Departments, Statutory Bodies and

  Provincial Governments to frame their budgets in line with the COAs.
  Department of Finance is responsible for fiscal

  implementation of the budget to respective State Agencies in line
  with the CoA codes created by Treasury. Finance has

  raised this issue numerous times with Treasury to create and
  allocate separate budget codes for respective grants

  that must be reflected in the Budget Book for each fiscal year. As
  we migrate from the use of Program Budget System

• Page 13 of 73

• (PBS) to IFMS in creating COAs, the IFMS system in future will
  enable creation of CoAs that should align with the

  separate budget codes for SIP funds.

  DIRD:

  Agree. SIP has percentage allocation to key sectors however
  itemising as the law requires needs to be addressed as

  AGO report recommends. It is being explored together with Department
  of Finance (DoF) through the IFMS rollout to

  Provinces and Districts.

  Auditor General’s Office of PNGI Performance Audit Report —
  Effectiveness of Payments and

  Acquittals of the Service Improvement Program (SIP) Page 12

  To ensure that payments are allocated and
  distributed to the Provinces, Districts and
  LLGs in a transparent way and in timely manner and
  on an equitable basis, the AGO

  recommends that:

  • The Finance Department develop clear policy
  criteria with transparent
  Recommendation 2
  payment vetting process to be followed in the
  management and distributions
  Paragraph 3.20 of SIP funds, and

  • The Finance Department strictly adheres to the
  SIP Administrative Guidelines

  and Finance Instructions by ensuring that SIP
  payments are paid out to
  Provinces, Districts and LLGs only upon
  receipt of the certified acquittal

• Page 14 of 73

• reports of their previous funds allocated as
  recommended by DIRD.

  Agency Responses

  DoF:

  Confirmed. It was noted that there were no proper administration and
  management of SIP funds and unequal
  distribution of funds to respective Provinces, Districts and LLGs.
  The SIP funds transfers were inconsistent and not in
  compliance to Financial Instruction (DoF) and the Administrative
  Guidelines (DIRD) as most decisions were very much
  influenced by Politics. Also disbursement of next lots of SIP funds
  to Provinces and Districts should be based on

  submission of the previous acquittal reports by MPs. However, this
  was not complied with due to Political influence.

  Confirmed. Distribution of SIP funds at various levels were subject
  to political decisions. The distribution and payment

  of SIP funds for DSIP, PSIP and LLGSIP was entirely based on the
  then government’s political decisions which directed
  Secretary Finance to deliberate and make payments accordingly. The
  disbursement of SIP funds should be left alone
  with the head of agency to deliberate in accordance with the
  established Financial Instruction and Administrative
  Guidelines. As such this had resulted in abuse of established
  processes.

  Confirmed. Department of Finance (DoF) and DIRD couldn’t perform
  their mandated roles and responsibilities in
  management and coordination of SIP funds due to political
  interference. Under the existing SIP fund arrangements;
  Department of Finance is responsible specifically for providing
  direction and support in financial policy formulation,
  financial accounting system, financial management and accounting
  procedures and reporting requirement. Likewise,
  DIRD is responsible to coordinate SIP reviews and monitor and report
  on acquittals as per the projects inspections and
  verifications. The next lots of SIP funds were supposed to have been
  disbursed based on submission of acquittal

  reports on previous funds allocation. Although the roles and
  responsibilities of the both agencies were clearly stated in
  the Finance Instruction and Administrative Guideline, both policy
  guidelines were not complied with due to extreme
  political pressure. Only if the two agencies were left alone to do
  what they were mandated to do as per the Finance
  Instruction and Administrative Guideline without any political
  interference the SIP funding would have been better
  managed.

• Page 15 of 73

• DIRD:

  Agree. Department of Finance (DoF) should adhere to the
  Administrative Guidelines/Finance Instruction of SIP to instil
  good governance and accountability that will ensure delivery of
  impact services out of the 10% national budget
  appropriated to the sub-national administrations (22 Provinces, 89
  Districts and 314 LLGs) over those years.

  The AGO recommends that the DIRD and its management
  should ensure that

  Recommendation 3 appraisals and certification of acquittal reports
  submitted by Provinces and Districts
  are completed in a timely manner and the acquittal
  database system is regularly
  Paragraph 3.21 updated with the monetary value of the acquittals
  submitted for management
  purposes.

  Agency Response

  DIRD:

  Agree. DIRD has major staff under-capacity problem and inconsistent
  funding support for SIP implementation

  monitoring field patrols which has seriously affected its core
  mandate of supporting sub-national administrations in
  guiding service delivery.

  Auditor General’s Office of PNGI Performance Audit Report —
  Effectiveness of Payments and

  Acquittals of the Service Improvement Program (SIP) Page 13

  The AGO recommends that:

  (a) the DIRD should ensure that program
  coordination, monitoring and reporting of SIP
  Recommendation 4 funded projects at the sub-national level is
  completed on a regular basis and

  Paragraph 4.20 (b) quarterly and annual management status reports

• Page 16 of 73

• are compiled and submitted to
  government authorities for decision making purpose
  concerning the program as
  required under the SIP Administrative Guidelines
  and Finance Instructions.

  Agency Response

  DIRD:

  Agree. However, DIRD takes its role seriously as evidenced by its
  five year corporate plan and yearly work plans but

  affected by inconsistent SIP implementation monitoring funds and
  under capacity of staff because the DIRD’s Wing
  responsible for SIP coordination has less than 15 officers
  responsible for monitoring and reporting on the expenditure
  of K1.2billion or about 10% of the national budget appropriated to
  sub-national administrations each year.

  The AGO recommends to ensure effective submission
  of SIP acquittal reports by
  Recommendation 5 Districts, Provinces and LLGs; the DIRD should
  foster close coordination and working

  Paragraph 4.21 relationship with Department of Finance in terms of
  sharing data and information
  relating to monitoring reports and acquittals.

  Agency Response

  DIRD:

  Agree with the findings. Main problem now continues to be the lack
  of coordination between DIRD and DoF to strictly
  comply with SIP Administrative Guidelines and its Finance
  Instructions to ensure the huge budget appropriations to
  sub-national administrations receiving SIP funds are based on
  performance instead of frontloading in contrary to the
  established guidelines and related laws.

• Page 17 of 73

• Auditor General’s Office of PNGI Performance Audit Report —
  Effectiveness of Payments and

  Acquittals of the Service Improvement Program (SIP) Page 14

  1. Introduction

• Page 18 of 73

• This chapter provides an overview of the Services Improvement
  Programs (DSIP, PSIP and LLGSIP)
  and the audit.

  Background to Service Improvement Program (DSIP, PSIP and LLGSIP)
  1.1 Service delivery in PNG has been affected by the progressive
  devolution of powers from the
  national government to sub national governments after independence.
  In 1977 the Organic Law on
  Provincial Government (OLPG) as passed, which provided authority for
  sub-national governments
  to provide and administer services. The OLPG attempted to
  decentralise responsibility for delivery
  of services, but it didn’t clearly allocate responsibilities between
  the levels of government. Further
  decentralisation came in 1995 with the enactment of the Organic Law
  on Provincial Governments
  and Local Level Governments (OLPGLLG), which was a significant
  administrative change and was an
  attempt to clarify the responsibilities of provincial and local
  level governments. The 2014 District
  Development Authority Act was an amendment to the OLPGLLG and
  further decentralised
  administrative functions to the District level.
  1.2 Prompted by these government decentralisation reforms, financial
  development programs
  and policy initiatives were designed and established to complement
  these reforms. Firstly, for the
  Districts funding was made available through the District
  Development Program (DDP) which then
  became the District Service Improvement Program (DSIP) in 2007, when
  the National Government
  allocated K10 million to each of the 89 Districts in Papua New
  Guinea. In 2013, the Provincial
  Service Improvement Program (PSIP) was introduced where Provinces
  were allocated K5 million per
  Open Electorate. More recently K500,000 was also allocated to each
  Local Level Government (LLG)
  through the Local Level Government Service Improvement Program
  (LLGSIP). In total, the annual
  budget allocation for the DSIP is K890 million to fund 89 Districts
  whilst the PSIP and LLGSIP budget
  allocations are K445 million and K157 million respectively, to
  provide funding for 22 Provinces and
  314 LLGs across the country.
  1.3 The purpose of the Service Improvement Programs is to provide
  for a holistic approach to
  service delivery, involving all stakeholders including Members of
  Parliament, National Departments
  and Agencies, Provincial and District Administrations and the
  recipients themselves (the people),
  taking into account the principles of ownership, affordability,
  sustainability and leadership. The
  primary objective of the programs is to make available minimum

• Page 19 of 73

• service delivery standards through
  the provision of infrastructure and facilities, including essential
  services such as health, education,
  law and justice, water and sanitation, transport, communication and
  rural electrification.

  Agencies Key Roles and Responsibilities
  1.4 The agencies with key roles and responsibilities in relation to
  the operations of the Service
  Improvement Programs are summarised in table 1 below.

  Auditor General’s Office of PNGI Performance Audit Report —
  Effectiveness of Payments and
  Acquittals of the Service Improvement Program (SIP) Page 15

  Table 1: Service Improvement Programs – Roles and Responsibilities

  Organisation Key role (s) and Functions

  National Parliament Approval of the National
  Budget inclusive of the DSIP, PSIP and LLGSIP through the
  Appropriation Acts and
  related legislation.

  National Executive Council (NEC) Approve new policy as
  required and issue NEC Decisions on any changes regarding the
  policy and administration
  guidelines.
  Approval of SIP budget
  estimates.

  Ministerial Budget Committee (MBC) Setting parameters of the
  total envelope of budget funding including SIP.
  Making recommendations to
  the NEC in relation to the priority spending areas of
  Government.

  Public Debt Cash Flow Committee Provides advice and
  recommendations on Government financing, debt and budget matters
  (PDC) and monitor and report on
  Public Account cash flows on a monthly basis to the Secretaries
  of the Department of Finance
  and Treasury.

  Central Agencies Coordination The committee is chaired by
  Chief Secretary to the Government with membership
  Committee (CACC) including heads of

• Page 20 of 73

• Departments of Prime Minister and NEC, Treasury, Finance, National
  Planning and Monitoring,
  Personnel Management, Justice and Attorney General, and
  Department of Provincial and
  Local-Level Government Affairs.
  The CACC makes
  recommendations to the MBC and NEC on proposed budget funding.

  Treasury Department Formulate the Medium Term
  Fiscal Strategy (MTFS).
  Allocate and release
  warrants authorities of SIP.
  Coordinate and monitor
  budget and Fiscal Responsibility Reporting.

  Finance Department Specifically responsible for
  providing direction and support in financial policy formulation,
  financial systems
  development and maintenance, financial and accounting information
  processing, financial
  management and accounting procedures, monitoring of financial
  performance against the
  Budget, and legislative compliance and financial reporting
  requirements for the whole
  of Government.

  Department of Implementation and Coordinate SIP reviews and
  monitor and report on acquittals as well as project inspections
  Rural Development (DIRD) and verifications.
  Provide awareness and
  training at the sub-national level on acquittals compilation and
  reporting requirements.
  Undertake planning,
  budgeting and managing grants and projects under the Rural
  Development Program; provide
  oversight on the implementation of Micro-Public
  Investment Program (PIP),
  and coordinating reform processes and implementation at sub-
  national level.

  Department of National Economic and Conducts a periodic cost of
  services study to estimate the cost of government’s services
  Fiscal Commission (NEFC) delivery obligations for
  grant calculation, policy development and budget purposes. The
  NEFC also reports on
  Provincial functional Grants.

  National Planning and Monitoring Develops and formulates SDP
  and MTDP and coordinate with DIRD and provide advice on
  new and ongoing development
  policy and programs.

  Department of Works Assist Districts and
  Provinces in provision of standards design and documentations

• Page 21 of 73

• including monitoring and
  supervision of projects.

  Auditor General’s Office of PNGI Performance Audit Report —
  Effectiveness of Payments and
  Acquittals of the Service Improvement Program (SIP)
  Page 16

  1.5 The Joint District and Joint Provincial Planning and Budget
  Priority Committees (JDP/JPP and
  BPC) are responsible for overseeing all aspects of planning and
  budgeting for each District and
  Province.

  About the Audit
  1.6 Recently, there have been concerns raised by key government
  agencies and authorities,
  individual Members of Parliament and the media more broadly, about
  the administration of the
  Service Improvement Programs. There were also outstanding issues
  identified in earlier audit work
  conducted by the AGO relating to the delay and/or non-payments and
  acquittals of service
  improvement program funds.
  1.7 Accordingly, the AGO considered the audit was important due to
  the significant amount of
  public funds allocated in the annual budget and spent on Service
  Improvement Programs (DSIP,
  PSIP and LLGSIP). The audit did not examine the management of funds
  at the Provincial, District or
  Local Level, but was focused on the central coordinating agencies.
  Audit Objective
  1.8 The objective of the audit was to determine whether there is:
  • Applicable legislation and a sound governance framework in
  place to manage the service
  improvement programs (DSIP, PSIP and LLGSIP);
  • Effective management of funding allocations and acquittals of
  payments made under the
  service improvement programs; and
  • Effective monitoring and reporting of service improvement
  program results against
  implementation plans.
  Audit Approach and Methodology
  1.9 To address the audit objective, audit tests were developed in
  the following key areas:
  • Evaluation of key policy documents including SIP Administrative
  Guidelines and Finance
  Instructions, Corporate Plans, Policy Papers and Budget
  Manuals, and relevant legislation;
  • Examination and analysis of SIP actual financial payment
  records against annual budgetary
  appropriations, acquittal records and performance monitoring

• Page 22 of 73

• reports as well as review and
  assessment of systems, processes and procedures in place with
  Department of Finance and
  DIRD; and
  • Confirmation through interviews and questionnaires with key
  responsible Officers at
  Department of Finance and DIRD.
  Previous Audit Coverage
  1.10 A previous AGO audit report Service Delivery Performance in the
  Provinces of New Ireland
  and Milne Bay – 1 January 2013 to 31 December 2014 focused on the
  provision of services under
  the Provincial Services Improvement Program (PSIP), the District
  Services Improvement
  Program (DSIP) and the various Function Grants. The report made
  six recommendations to
  improve service delivery, including that finance instructions be
  strengthened to provide clearer
  guidance to Provincial and District Administrators and Treasurers
  and the need for proper
  recordkeeping and accountability in districts and provinces.

  Auditor General’s Office of PNGI Performance Audit Report —
  Effectiveness of Payments and
  Acquittals of the Service Improvement Program (SIP) Page 17

  2. Service Improvement Programs – Governance

  Framework

  This chapter considers key aspects of the Service Improvement
  Program’s governance, including the roles and
  responsibilities of those parties involved in administering the
  programs.

  Introduction
  2.1 With budget appropriations exceeding K1.3 billion for DSIP,
  PSIP and LLGSIP each year, the
  administration of the services improvement program constitutes core
  business and a substantial
  commitment for the Government of PNG. It is therefore, expected that
  the responsible agencies
  have established and maintain a sound system of governance that will
  enable effective and
  accountable administration of funds within the specifications of the
  governing legislation and
  policies, as well as broader government legislation such as the
  Public Financial Management Act
  1995 (as amended).

  Applicable Legislation
  2.2 The specific legislation that gives effect to the creation and
  establishment of the service

• Page 23 of 73

• improvement program (DSIP, PSIP and LLGSIP) is the Organic Law on
  Provincial and Local-Level
  Government. Sections 91 (1) and (2) of the Organic Law on Provincial
  and Local-Level Government
  state that the National Government shall provide to the Provincial
  and Local-Level Governments,
  Grants in the form of Administrative Support grants; Development
  Grants, Town and Urban
  Services Grants; and Economic Grants. These Grants are to be
  provided annually to the Provincial
  Governments and Local-Level Governments.
  2.3 Sections 95A and 95B of the Organic Law on Provincial and
  Local-Level Government provides
  for the District Support Grants and Provincial Support Grants
  respectively. Section 95A (1) (7) states
  that the National Government shall make a District Support Grant in
  respect of each Open
  Electorate which is to be used in accordance with District Support
  Grant Guidelines issued by the
  National Executive Council.’ Sub-sections (2), (3), (4), and (5)
  provide that the minimum amount of
  District Support Grant shall not be less than K300,000 and/or
  K500,000 per Open Electorate and
  shall be determined by the NEC and National Economic and Fiscal
  Commission in consultation with
  the Head of the Department of Finance and the Head of the Department
  responsible for planning
  matters.
  2.4 In determining the amount to be paid to respective open
  electorates, the National Economic
  and Fiscal Commission shall take into consideration the details of
  other grants made available to
  the Provincial Governments and Local-Level Governments. The National
  Government shall, within
  the first month of each quarter of each fiscal year, make a payment
  of all monies due for the
  purpose of the District Support Grant for that quarter to the Joint
  District and Joint Provincial
  Planning and Budget Priority Committees (JDP/JPP and BPC) committee
  and to the Member

  Section 95A (1), (7) of the OLPG and LLG stated that for each year
  the National Government shall out of monies lawfully available
  for the purpose, make a District Support Grant in respect of each
  Open Electorate which to be used in accordance with District
  Support Grant Guidelines issued by the National Executive Council
  from time to time specifying the purposes for which may be used,
  and the manner in which it shall be disbursed and accounted for, and
  other administrative arrangements pertaining to it.
  Auditor General’s Office of PNGI Performance Audit Report —
  Effectiveness of Payments and
  Acquittals of the Service Improvement Program (SIP) Page 18

• Page 24 of 73

• representing the open electorate respectively. Section 95B (1) also
  states that the NEC shall, from
  time to time, issue Provincial Support Grant Guidelines.
  2.5 The annual Appropriation Act passed in Parliament also provides
  authority for budget
  funding to be released for the service improvement program. Although
  there was no separate
  budget line item for either DSIP, PSIP or LLGSIP stated in the Act
  for the years under review (2013-
  2016); the AGO noted that the DSIP, PSIP and LLGSIP funding
  allocations are included with the total
  amount appropriated for each of the Provincial Government budget
  allocations contained in the
  appropriation.
  2.6 Other legislation that has a role to play in the governance and
  control of public funds are the
  National Constitution, District Development Authority Act 2014 and
  the Public Finances
  (Management) Act 1995 (as amended). Section 211(1) of the
  Constitution states that all monies of
  or under the control of the National Government for public
  expenditure shall be dealt with and
  properly accounted for in accordance with the law. Section 117 of
  the Public Finance
  (Management) Act creates the legal authority for the Secretary of
  Finance to issue Financial
  Instructions for, among other things, the better control and
  management of public money and
  public property.

  Governance and Policy Framework
  2.7 As required under the relevant legislation; Finance
  Instructions and Administrative
  Guidelines were issued by the NEC, and the Departments of Finance,
  and Implementation and Rural
  Development at various stages to regulate each of the Service
  Improvement Programs. Finance
  Instructions were issued to guide agencies on the administrative
  management and spending of the
  service improvement program funds on a sectoral basis. Initially,
  Finance Instructions supported by
  an NEC Decision, directed that the spending of SIP funds would be
  broken down into six sectors
  with the following percentage allocations:
  • 30% – Infrastructure Services Support,
  • 20%- Health Service Improvement,
  • 20% Education Service Support,
  • 10%- Law and Justice Services,
  • 10%- Economic Sector Support, and
  • 10%- Administration.2
  2.8 A later NEC Decision in 2014 and subsequent Administrative
  Guidelines and Finance

• Page 25 of 73

• Instruction, directed specific SIP funding allocation to additional
  sub-sectors including Public
  Servant Housing (District and LLG), Skill Gap Training (District and
  LLG), Communication
  Infrastructure, and Micro-Credit Scheme (Optional) to be included
  within the existing key sectors.
  The later SIP Administrative Guidelines provides that the funding
  percentage allocation of the
  sectors be left open and the level of funding received by the
  Sectors should reflect the needs and
  priorities of the Provinces and Districts. This was a significant
  departure from the previous Finance

  2 The 10% allocated for administration is further broken down as
  follows; 3% for general administration support
  (including JPP/JDP and BPCs and Project Management), 3% for MPs
  Electoral Support Fund, and 4% for project
  mobilisation costs including scoping, design and supervision.
  Auditor General’s Office of PNGI Performance Audit Report —
  Effectiveness of Payments and
  Acquittals of the Service Improvement Program (SIP) Page 19

  Instructions and Guidelines discussed above which specified
  percentage funding allocations for
  sector programs.
  2.9 The SIP Administrative Guidelines outline the key principles of
  the PSIP, DSIP and LLGSIP
  which are: greater ownership, affordability, value-adding,
  sustainability, leadership, and optimum
  resource utilisation. Underpinning the key principles is the
  Government’s Policy of Achieving
  National Equity in Development through the Strengthening of Basic
  Service Infrastructure. The
  theme of the policy encapsulates the spirit of the PSIP, DSIP and
  LLGSIP and is directly related to the
  Ten Guiding Principles of the then Medium Term Development Plan
  (MTDP 2010-2015), DSP (2010-
  2030) and Vision 2050.3
  2.10 The Organic Law on Provincial and Local-Level Governments and
  the Appropriation Act
  provides the legal basis and foundation for the establishment and
  operation of the service
  improvement program (DSIP, PSIP and LLGSIP). The AGO found that the
  governance and policy
  framework established to govern the service improvement program
  (DSIP, PSIP and LLGSIP) was
  clear. The SIP Finance Instructions and Guidelines provide a
  detailed framework for the governance
  and management of the service improvement program including
  requirements for strategic
  planning; coordination and management of the program, selection of
  projects to be funded by SIP;

• Page 26 of 73

• selection of service providers; payments and acquittals; the day-to-
  day management of funds; and
  ongoing management and supervision and monitoring of projects. As
  noted above, the audit did
  not extend to project implementation or the system of allocation of
  funds at the sub-national level.
  2.11 The AGO noted that the Appropriation Acts, which provide the
  legal authority to fund the
  program, did not clearly state or separately itemise amounts
  allocated to DSIP, PSIP and LLGSIP. The
  Appropriation Act does contain a funding allocation for the service
  improvement program overall,
  but this means that the individual components allocated for DSIP,
  PSIP and LLGSIP are grouped
  together in the total amount appropriated for each of the Provincial
  Government budget
  allocations under the national budget. Under these conditions,
  neither the funding agencies, nor
  the recipients can adopt a systematic approach to monitoring to
  determine how much funding has
  been allocated or how much of a project has been implemented. It
  also means that there is a low
  level of confidence about whether or not the funding allocations
  will be received which impacts the
  sense of ownership and custodianship from the Districts, Provinces
  and LLGs that are responsible
  for implementing the projects.

  Conclusion
  2.12 The established governance and policy framework to regulate
  funding for the service
  improvement program is robust, sound and clear. Specifically the
  various Administrative Guidelines
  and Finance Instructions jointly issued by Department of Finance and
  DIRD from time to time to
  assist with management, control and accountability of the program.
  2.13 Although the governance and policy framework is robust, the
  funding allocation system
  does not facilitate end-to-end financial management and lacks many
  desirable system controls for
  detecting inconsistencies in the amount of funds released compared
  to the funds appropriated.
  This inhibits the sub-national Government’s ability to set and
  monitor local compliance with
  eligibility and reporting requirements. The current system also has
  many shortcomings from the
  central agencies’ perspective as it also impacts on sound financial
  management practices. In
  particular, the system has no capacity for tracking allocations
  against budget or to identify incorrect

  3 https://www.treasury.gov.pg/html/publications/files/pub fiies/
  2011/2011.png.vision.2050.pdf
  Auditor General’s Office of PNGI Performance Audit Report —

• Page 27 of 73

• Effectiveness of Payments and
  Acquittals of the Service Improvement Program (SIP) Page 20

  payments made from the schedules. This can increase the risk of
  duplicate payments, and cause
  uncertainty when updating project management records or processing
  variations.

  Recommendation 1
  2.14 To provide a stronger legislative basis for program funding,
  the AGO recommends that the Department of
  Finance and Department of Implementation and Rural Development work
  closely with the Treasury Department and
  the Central Agencies Coordination Committee (CACC) to ensure that
  the detail of funding allocations for the service
  improvement programs (DSIP, PSIP and LLGSIP) are clearly itemised
  and included in the Appropriation Bill for approval
  in Parliament.
  Department of Finance Response:
  Confirmed. The budget line items for SIP (DSIP, PSIP and LLGSIP)
  funding allocation are included in the total
  amount appropriated for each of the Provincial Budget Allocations
  contained in the Appropriation Bill. The
  creation of Chart of Accounts (CoA) codes that aligns with the
  budget codes or Budget lines falls within the
  jurisdictions of Treasury Department. Treasury is responsible to
  allocate budget codes to all State
  Departments, Statutory Bodies and Provincial Governments to frame
  their budgets in line with the COAs.
  Department of Finance is responsible for fiscal implementation of
  the budget to respective State Agencies in
  line with the CoA codes created by Treasury. Finance has raised this
  issue numerous times with Treasury to
  create and allocate separate budget codes for respective grants that
  must be reflected in the Budget Book for
  each fiscal year. As we migrate from the use of Program Budget
  System (PBS) to IFMS in creating COAs, the
  IFMS system in future will enable creation of CoAs that should align
  with the separate budget codes for SIP
  funds.

  Department of Implementation and Rural Development (DIRD) Response:
  Agree. SIP has percentage allocation to key sectors however
  itemising as the law requires needs to be
  addressed as AGO report recommends. It is being explored together
  with Department of Finance (DoF)
  through the IFMS rollout to Provinces and Districts.

• Page 28 of 73

• Auditor General’s Office of PNGI Performance Audit Report —
  Effectiveness of Payments and
  Acquittals of the Service Improvement Program (SIP) Page 21

  3. Payments and Acquittals of SIP (DSIP, PSIP and
  LLGSIP)

  This chapter examines the payment and acquittal process for the
  Service Improvement Program’s financial
  framework, including the roles and responsibilities of those parties
  involved in administering the programs.

  Background
  3.1 Section 10 of the PFMA 1995 (as amended) explains that there
  shall be a Public Fund for the
  National Government as well as for each of the Provincial or Local-
  Level Governments established
  under the Organic Law on Provincial and Local—Level Governments. In
  the case of the National
  Government, the Public Fund consists of the Consolidated Revenue
  Fund and Trust Fund. For the
  Provincial, District and Local-level Governments the Public Fund
  consists of the Provincial Treasury
  Operating Account, the District Treasury Operating Account and LLG
  general revenue fund
  respectively. Public monies are paid into the respective accounts
  depending on the nature of the
  funds and how each funding allocations are intended to be used for
  service delivery under the
  respective program.

  Management and Payments of DSIP, PSIP and LLGSIP

• Page 29 of 73

• 3.2 As noted in Chapter 2 above, at the inception of the Service
  Improvement Program, SIP
  funds were deposited into a Trust Account managed by the Department
  of Finance within the
  department’s trust account division. This arrangement was in place
  until 2012, when the SIP Funds
  were transferred to the Waigani Public Account and managed by the
  Department of Finance,
  together with the Consolidated Revenue Fund. The funds are released
  to respective Provinces and
  Districts on a monthly and/or quarterly basis. Section 4.3 of the
  SIP Administrative Guidelines states
  that the disbursement of SIP funds to Districts and Provinces is
  strictly upon receipt of the previous
  year’s implementation physical and financial reports (acquittals)
  and availability of funds.
  3.3 The AGO examined the SIP financial records and information
  maintained at the Department
  of Finance as well as assessing the administration and management
  process involving the
  payments of DSIP, PSIP and LLGSIP. The audit found that a total of
  K4.5 billion was paid and
  disbursed by the Department of Finance to respective Districts,
  Provinces and LLGs for service
  improvement programs over the 4 year period under review
  (2013-2016). This amount is some
  K600 million less than the total budget appropriation of K5.1
  billion over the same period.
  3.4 The financial records show clearly that the annual SIP payments
  made over the 4 year
  period 2013-2016 (specifically payments for PSIP and LLGSIP) were
  less than the annual budgeted
  amount with significant variances noted in actual payments made
  against the appropriated
  amount. Similarly, Provinces and Districts may receive their
  allocations at different times of the
  year. In addition, there was no proper administration and management
  of SIP funds in relation to
  decisions made on the allocation and distributions of funds to the
  respective Districts, Provinces
  and LLGs.
  3.5 This is a significant issue for the delivery of projects where
  progress is monitored and
  reported annually. Proper project management and final delivery
  depends to a very large extent on
  funding certainty. With very few provinces receiving 100 per cent of
  the funding necessary to carry

  Auditor General’s Office of PNGI Performance Audit Report —
  Effectiveness of Payments and
  Acquittals of the Service Improvement Program (SIP) Page 22

  out projects means that provincial governments are required to

• Page 30 of 73

• provide additional funding from

  their own sources, if available. The extent to which this occurs
  varies from province to province.

  3.6 Table 2 and Figures 1, 2 and 3 below show the variances
  between SIP appropriations and

  payments made over the 4 year period under review (2013 -2016).

  Table 2: Service Improvement Program (DSIP, PSIP and LLGSIP)
  Appropriations and

  Payments

  DSIP PSIP
  LLGSIP

  Year Approp’n Actual Variance Approp’n Actual
  Variance Approp’n Actual Variance
  (Kina) (Kina) (Kina) (Kina) (Kina)
  (Kina) (Kina) (Kina) (Kina)

  2013 890m 890m Nil 445m 445m
  Nil 157,000 88,000 69,000

  2014 890m 884.5m 5.5m 445m 197.5m
  247.5m 157,000 138,350 18,650

  2015 890m 635.1m 254.9m 445m 355.1m
  89.9m 157,000 30,700 126,300

  2016 890m 879m 11m 220m 200.9m
  19.1m 157,000 31,367 125,633

  TOTAL 3.56 billion3.29 billion271.4m 1.56 billion1.19
  billion356.6m 628,000 288,417 339,583

• Page 31 of 73

• Figure 1: DSIP Actual Payments and Appropriations by Year

  DSIP Appropriation and Payments

  1000

  900

  800

  700

  600
  -0
  500

  ■ DSIP Appropriations (K)
  400

  300
  DSIP Payments (K)

  200

  100

  0

  2013 2014 2015 2016

  Years

  Source. AGO analysis

• Page 32 of 73

• Auditor General’s Office of PNGI Performance Audit Report —
  Effectiveness of Payments and

  Acquittals of the Service Improvement Program (SIP)
  Page 23

  Figure 2: PSIP Actual Payments and Appropriations by Year
  Source. AGO analysis
  Figure 3: LLGSIP Appropriations and Actual Payments by Year
  Source: AGO analysis
  3.7
  The audit also found that there was a lack of clear policy criteria
  and sound payment vetting
  processes in place. The AGO expected to find guidance from the
  Public Debt Cash flow Committee
  (PDC) and/or National Economic Fiscal Commission (NEFC) providing
  leadership and control over
  the processes to approve and decide on the monthly and/or quarterly
  allocation of SIP funds by the
  Department of Finance to the respective Provinces, Districts and
  LLGs as required under the OLPG
  and LLG. In the absence of guidance and control from the designated
  authorities, decision making
  around the distribution and payments of SIP funds to Districts,
  Provinces and LLGs is open to other
  influences.
  I
  500
  450
  400
  350
  E300
  E 250
  2. 200
  150

• Page 33 of 73

• 100
  50
  0
  ■ PSIP Appropriations (K)
  PSIP Payments (K)
  2016
  2014
  2015
  Years
  2013
  PSIP Appropriation and Payments
  2013
  2014
  2015
  2016
  Years
  LLGSIP Appropriation and Payments
  ■ LLGSIP Appropriations (K)
  – LLGSIP Payments (K)

  180
  160
  140
  120
  0
  -a
  100
  a
  80
  60
  40
  20
  0
  Auditor General’s Office of PNGI Performance Audit Report —
  Effectiveness of Payments and
  Acquittals of the Service Improvement Program (SIP)
  Page 24

  3.8 A consequence of this arrangement is that SIP funds were
  frequently released and paid to
  Provinces, Districts and LLGs by the Department of Finance without
  prior receipt of certified
  acquittals of the previous funding allocation. This is a clear
  breach of SIP Administrative Guidelines
  and relevant Financial Instructions and the PFMA.
  3.9 The overall system would operate in a more open and
  transparent way if the responsible
  agencies (Department of Finance and Department of Implementation and
  Rural Development) in
  charge of managing and coordinating the payments and monitoring
  acquittals of SIP funds worked
  more closely together to ensure the effective management of payments
  and acquittal of SIP funds.

• Page 34 of 73

• Acquittals of DSIP, PSIP and LLGSIP
  3.10 As required under the SIP Administrative Guideline 1B/2014 and
  relevant provisions of the
  PFMA, the acquittal of previous DSIP, PSIP and LLGSIP funds (both
  physical and financial reports) by
  Provinces, Districts and LLGs is important in order to qualify for
  the next round of funding
  allocations. As well, acquittals are an important control mechanism
  to aid in providing transparency
  and accountability of public funds. The Department of Implementation
  and Rural Development
  (DIRD) is the lead agency in charge of coordinating, monitoring and
  reporting rural development
  progress. It is responsible for the acquittal of DSIP, PSIP and
  LLGSIP funding and maintaining records
  relating to SIP for each fiscal year.
  3.11 From the analysis of acquittals and other DIRD records, the AGO
  noted that the number of
  acquittals submitted by respective Districts and Provinces was slow
  over the period from 2013-
  2016. Most Districts and Provinces did not submit their DSIP and
  PSIP acquittal reports to DIRD for
  the fiscal years 2015 and 2016. Of the 111 total Provinces and
  Districts across the country, only 33
  had submitted their PSIP and DSIP acquittal reports for the year
  2016 whilst the other 78 remained
  outstanding. There were also a number of Provinces and Districts
  with outstanding acquittal reports
  for the years 2013 and 2014. At the time of audit fieldwork, for the
  LLGSIP there had been no
  acquittal records of any kind submitted to DIRD from any of the 314
  LLGs in the country. These
  outstanding reports should be compiled and submitted to DIRD as
  required under SIP
  Administrative Guidelines and relevant financial management laws.
  3.12 The table and graph below shows the summary of SIP acquittals
  status by Provinces,
  Districts and LLGs obtained and analysed during the time of audit
  early in 2018. Details of SIP
  acquittal status is attached as Appendixes 1-3.
  Table 3: SIP Acquittal Status 2013-2016

  PSIP DSIP
  LLGSIP

  1 2013- Acquittals not submitted 3 15
  314

  2013- Acquittals submitted and appraised and 19 74
  0
  monitored

  2 2014- Acquittals not submitted 8 27

• Page 35 of 73

• 314

  2014- Acquittals submitted and appraised and 14 62
  0
  monitored

  Auditor General’s Office of PNGI Performance Audit Report —
  Effectiveness of Payments and
  Acquittals of the Service Improvement Program (SIP)
  Page 25

  3 2015- Acquittals not submitted 14
  52 314

  2015- Acquittals submitted and appraised and 8
  37 0

  monitored

  4 2016- Acquittals not submitted 16
  62 314

  2016- Acquittals submitted and appraised and 6
  27 0

  monitored

  Figure 4: Acquittal status of DSIP

  DSIP Acquital Submission Status

  100

  80

• Page 36 of 73

• 60

  40

  20

  0

  2013 2014 2015 2016

  Years

  ■ Not Submitted ■ Submitted

  Source: AGO analysis

  Figure 5: Acquittal Status of PSIP

  PSIP Acquital Submission Status

  25

  20

  U 15
  a
  ‘›
  2 10
  0.

  5

• Page 37 of 73

• 2013 2014 2015 2016

  Years

  ■ Not Submitted ■ Submitted

  Source. AGO analysis

  Auditor General’s Office of PNGI Performance Audit Report —
  Effectiveness of Payments and

  Acquittals of the Service Improvement Program (SIP)
  Page 26

  3.13 Although a number of SIP acquittals had been submitted by
  Districts and Provinces to DIRD
  as outlined in the charts above, there were significant mismatches
  between the SIP payment
  amounts and acquittal figures reported for the years 2013 and 2014.
  For instance in 2014, Dei
  District in Western Highlands Province received a K10 million DSIP
  payment. However, from the
  acquittal status record maintained by DIRD, only K3.9 million was
  reported as having been
  acquitted. There is no record or explanation of the K6.1 million
  differences between the amount
  paid by the Department of Finance and the amount acquitted to DIRD.
  3.14 At the end of 2017, the DIRD was still working on the appraisal
  and monitoring of acquittal
  reports for the years 2015 and 2016 that had been submitted by
  Provinces and Districts. As a result,
  the full and complete SIP acquitted amounts were not available for
  audit in the DIRD database
  system. The AGO noted that in most cases, acquittal reports were
  submitted late to DIRD and the
  required compliance checks conducted by the department are
  comprehensive and time consuming.
  It is also apparent that District and Provincial administrations do
  not feel obliged to submit acquittal
  reports in a timely way in order to comply with the annual timetable
  specified for SIP acquittal
  reporting requirements in the SIP Administrative Guidelines and
  Finance Instructions.

• Page 38 of 73

• 3.15 The variable level of compliance in the submission of SIP
  acquittal reports by Provinces,
  Districts and LLGs as well as the mismatches in acquittal figures
  against amounts paid is an indicator
  of poor management, and suggests the acquittal system is operating
  ineffectively. The AGO noted
  that there are insufficient skilled resources devoted to compiling
  acquittals at the Provincial and
  District level. This is compounded through a lack of capacity and
  funding within DIRD to enable the
  appraisal and monitoring of acquittals in a timely manner and to
  update the system records
  accordingly.

  Conclusion
  3.16 Section 10 of the Public Finance Management Act 1995 (as
  amended) requires the
  establishment of a Public Account for the National Government. The
  Organic Law on Provincial and
  Local Level Government also requires the establishment of an
  operating account for Provincial and
  Local — Level Governments. All public monies are to be paid into
  these public operating accounts
  contingent upon the nature of the funds to be used for public
  service delivery. The DSIP, PSIP and
  LLGSIP funds are managed by the Department of Finance together with
  the Consolidated Revenue
  Fund (CRF) and funds are paid to Provinces and Districts on a
  monthly or quarterly basis. It is also a
  requirement of the SIP Administrative Guidelines and Finance
  Instructions that the disbursement of
  SIP funds to the respective Provinces and Districts is to be
  strictly upon receipt of acquittal reports
  of the previous funding allocations.
  3.17 The payment and acquittal process is not assisted by the lack
  of clear policy criteria and
  sound payment vetting processes in place. The AGO expected to find
  guidance from the Public Debt
  Cash flow Committee (PDC) and/or National Economic Fiscal Commission
  (NEFC) providing
  leadership and control over the processes to approve and decide on
  the monthly and/or quarterly
  allocation of SIP funds by the Department of Finance to the
  respective Provinces, Districts and LLGs
  as required under the OLPG and LLG. In the absence of guidance and
  control from the designated
  authorities, decision making around the distribution and payments of
  SIP funds to Districts,
  Provinces and LLGs is open to other influences.
  3.18 The SIP annual payments were inconsistent with the annual
  budgeted amounts with
  significant variances noted in actual payments made against the
  appropriated amount. There were

• Page 39 of 73

• Auditor General’s Office of PNGI Performance Audit Report —
  Effectiveness of Payments and
  Acquittals of the Service Improvement Program (SIP) Page 27

  few records available to support the decisions made on the
  allocation and distribution of funds to
  the respective Districts, Provinces and LLGs. In many cases DSIP,
  PSIP and LLGSIP funds were
  unequally allocated and distributed resulting in some Provinces,
  Districts and LLGs receiving more
  funding whilst others received reduced payments or in some cases
  nothing at all for their
  monthly/quarterly allocations. The AGO noted that payments can be
  delayed at times due to cash
  flow issues within the central allocating agencies. Nevertheless
  interruptions to or uncertainties
  around funding cause difficulties in the proper implementation of
  service delivery in the Provinces
  and Districts. At the same time, one of the key controls, the
  requirement to acquit previous SIP
  payments before new payments are made, is not enforced which is a
  clear breach of SIP
  Administrative Guidelines.
  3.19 The AGO concluded that the process of management of SIP
  payments and acquittals was
  largely ineffective as the rules and procedures are either not
  followed or there are no penalties or
  consequences for non-compliance. In order to address the issues
  identified in the payments and
  acquittals of SIP (DSIP, PSIP and LLGSIP), the AGO makes the
  following recommendations.

  Recommendation 2
  3.20 To ensure that payments are allocated and distributed to the
  Provinces, Districts and LLGs in a
  transparent way and in timely manner and on an equitable basis, the
  AGO recommends that:
  • The Finance Department develop clear policy criteria with
  transparent payment vetting process to
  be followed in the management and distributions of SIP funds,
  and
  • The Finance Department strictly adheres to the SIP
  Administrative Guidelines and Finance
  Instructions by ensuring that SIP payments are paid out to
  Provinces, Districts and LLGs only upon
  receipt of the certified acquittal reports of their previous
  funds allocated as recommended by DIRD.
  Department of Finance Response:
  Confirmed. It was noted that there were no proper administration and
  management of SIP funds and
  unequal distribution of funds to respective Provinces, Districts and
  LLGs. The SIP funds transfers were
  inconsistent and not in compliance to Financial Instruction (DoF)

• Page 40 of 73

• and the Administrative Guidelines (DIRD) as
  most decisions were very much influenced by Politics. Also
  disbursement of next lots of SIP funds to Provinces
  and Districts should be based on submission of the previous
  acquittal reports by MPs. However, this was not
  complied with due to Political influence.
  Confirmed. Distribution of SIP funds at various levels were subject
  to political decisions. The distribution and
  payment of SIP funds for DSIP, PSIP and LLGSIP was entirely based on
  the then government’s political
  decisions which directed Secretary Finance to deliberate and make
  payments accordingly. The disbursement
  of SIP funds should be left alone with the head of agency to
  deliberate in accordance with the established
  Financial Instruction and Administrative Guidelines. As such this
  had resulted in abuse of established
  processes.
  Confirmed. Department of Finance (DoF) and DIRD couldn’t perform
  their mandated roles and responsibilities
  in management and coordination of SIP funds due to political
  interference. Under the existing SIP fund
  arrangements; Department of Finance is responsible specifically for
  providing direction and support in
  financial policy formulation, financial accounting system, financial
  management and accounting procedures
  and reporting requirement. Likewise, DIRD is responsible to
  coordinate SIP reviews and monitor and report on
  acquittals as per the projects inspections and verifications. The
  next lots of SIP funds were supposed to have
  been disbursed based on submission of acquittal reports on previous
  funds allocation. Although the roles and
  responsibilities of the both agencies were clearly stated in the
  Finance Instruction and Administrative
  Guideline, both policy guidelines were not complied with due to
  extreme political pressure. Only if the two

  Auditor General’s Office of PNGI Performance Audit Report —
  Effectiveness of Payments and
  Acquittals of the Service Improvement Program (SIP)
  Page 28

  agencies were left alone to do what they were mandated to do as per
  the Finance Instruction and
  Administrative Guideline without any political interference the SIP
  funding would have been better managed.
  DIRD Response:
  Agree. Department of Finance (DoF) should adhere to the
  Administrative Guidelines/Finance Instruction of
  SIP to instil good governance and accountability that will ensure
  delivery of impact services out of the 10%
  national budget appropriated to the sub-national administrations (22
  Provinces, 89 Districts and 314 LLGs)
  over those years.

• Page 41 of 73

• Recommendation 3
  3.21 The AGO recommends that the DIRD and its management should
  ensure that appraisals and
  certification of acquittal reports submitted by Provinces and
  Districts are completed in a timely
  manner and the acquittal database system is regularly updated with
  the monetary value of the
  acquittals submitted for management purposes.
  Department of DIRD Response:
  Agree. DIRD has major staff under-capacity problem and inconsistent
  funding support for SIP implementation
  monitoring field patrols which has seriously affected its core
  mandate of supporting sub-national
  administrations in guiding service delivery.

  Auditor General’s Office of PNGI Performance Audit Report —
  Effectiveness of Payments and
  Acquittals of the Service Improvement Program (SIP) Page 29

  4. Monitoring and Reporting of DSIP, PSIP and
  LLGSIP

• Page 42 of 73

• This chapter considers the Monitoring and Reporting requirements for
  SIP funding and program reviews.

  Background
  4.1 The decentralised nature of SIP funding arrangements coupled
  with a trend towards the
  outsourcing of functions in the provinces and districts has
  increased the opportunity for fraudulent
  activity. The requirement for sound corporate governance and
  accountability emphasise the need
  for high levels of cooperation between the central agencies in the
  implementation of corporate
  governance strategies. These strategies must clearly identify
  possible fraud risks and how these
  risks will be managed and minimised. One way to minimise the risk of
  fraud and malfeasance is to
  regularly monitor and report on the program, and conduct reviews to
  address any shortcomings
  that emerge.
  4.2 Section 9.6 of the SIP Administrative Guidelines 1B/2014
  requires that the DIRD shall
  coordinate SIP program reviews with the Department of National
  Planning and Monitoring, the
  Department of Finance, the Treasury, the Department of Provincial
  and Local Government Affairs
  and the Department of Works to physically verify reports from the
  Provinces, Districts and Local
  Level Governments when and where required.
  4.3 Further, section 9.7 of the SIP Administrative Guidelines 1B/
  2014 also states that the DIRD
  shall provide quarterly implementation reports of both physical and
  financial status of the PSIP,
  DSIP and LLGSIP to the Central Agency Coordination Committee (CACC),
  the Department of
  National Planning and Monitoring, the Department of Provincial and
  Local Level Government Affairs
  and other relevant agencies.
  4.4 The DIRD Corporate Plan emphasised the key roles and
  responsibilities that DIRD
  undertakes in relation to public service delivery which include;
  • planning,
  • budgeting and managing grants and projects under the Rural
  Development Program, and
  • providing oversight on the implementation of the Public
  Investment Program (PIP) including
  the service improvement program (DSIP, PSIP and LLGSIP), and
  coordinating reform
  processes and implementation at the sub-national level.

  Monitoring and Reporting of Projects
  4.5 To comply with the requirements of the SIP Administrative
  Guidelines 1B/2014 and relevant

• Page 43 of 73

• Financial Instructions, the DIRD under its Corporate Plan and
  Organisational Structure, established a
  Monitoring Unit with regional offices that conducts routine
  monitoring and inspections of projects
  funded under DSIP, PSIP and LLGSIP. The Unit maintained a database
  system in MS Excel that
  incorporates records and data relating to SIP acquittals for each
  year, including project monitoring
  and inspection reports.
  4.6 Based on annual work plans and programs, the Project
  Coordinators from DIRD are
  deployed to the Provinces and Districts to physically inspect and
  verify the projects to ensure that
  Auditor General’s Office of PNGI Performance Audit Report —
  Effectiveness of Payments and
  Acquittals of the Service Improvement Program (SIP) Page 30

  the projects funded and reported actually exist and represent value
  for money. The monitoring and
  inspection of projects is usually completed after appraising the
  acquittals submitted by Provinces
  and Districts. A monitoring and inspection report is produced at the
  end of monitoring trips by the
  Officer in charge, which is then consolidated into quarterly and
  annual management reports
  showing the status of all the DSIP, PSIP and LLGSIP acquittals.
  These are subsequently passed to the
  Central Agencies Coordinating Committee (and NEC) and other relevant
  government agencies for
  information and decision making purposes as appropriate, concerning
  the service improvement
  program.
  4.7 The audit found that the work plans and programs in use by the
  DIRD Monitoring Unit were
  soundly based. However, the actual implementation of monitoring and
  inspection work plans for
  the period under review (2013-2016) was less than expected. Most of
  the Provinces and Districts
  were not visited by DIRD project inspection teams to have their SIP
  funded projects inspected and
  verified. In 2016 only 16 Districts and 3 Provinces were visited by
  the DIRD project monitoring and
  inspection team which is only 17 per cent of the 111 Districts and
  Provinces across the country.
  Whilst the focus of the project monitoring and inspection was on
  DSIP and PSIP, the audit found
  that there was no monitoring and inspection of projects funded under
  LLGSIP for the period under
  review.
  4.8 It was also noted that during the time of audit, most of the
  acquittal reports submitted by
  Provinces and Districts for the year 2015 and 2016 were not yet
  fully appraised and certified by

• Page 44 of 73

• DIRD. The MS Excel data base system had not been updated to capture
  the monetary value of the
  acquittals submitted by Provinces and Districts. The lack of
  progress in assessing and certifying
  acquittals in a timely manner made it difficult for the AGO to
  cross-check and verify the SIP
  acquitted amounts against the payment amounts disbursed by the
  Department of Finance as
  discussed in Chapter 3. The delays in monitoring and inspection of
  the service improvement
  program (DSIP, PSIP and LLGSIP) were largely caused by the late
  submission of acquittal reports by
  Districts and Provinces as well as funding constraints and capacity
  issues within DIRD, which
  adversely impacted on its ability to fund the travel necessary to
  effectively carry out project
  inspections in a timely manner.

  Coordination between DIRD and Finance Department
  4.9 The administration and management of DSIP, PSIP and LLGSIP at
  the national level was
  placed under the Department of Finance and DIRD. The Finance
  Department is responsible for
  managing and disbursing the payments to the Provinces and Districts
  whilst the DIRD is in charge of
  coordination, monitoring and reporting of SIP performance and
  acquittals. Splitting key roles and
  accountabilities between two different agencies (Finance Department
  and DIRD) in the
  management and monitoring of SIP presents a number of risks to
  successful program delivery. In
  order to establish the effectiveness of the monitoring and reporting
  oversight of the payments and
  acquittals process of the SIP funds, the AGO assessed the
  coordination between the two
  departments in the context of data and information sharing.
  4.10 AGO review and assessment found that there was no close
  coordination between DIRD and
  the Finance Department in sharing of data and information relating
  to payments and acquittals of
  SIP funds as required under the SIP Administrative Guidelines and
  relevant Finance Instructions.
  The management controls were lacking as SIP funds were disbursed to
  Provinces and Districts by
  the Finance Department without receiving certified acquittals and
  monitoring reports from DIRD of
  the previous funding allocations. The monitoring and reporting of
  projects and acquittals by DIRD

  Auditor General’s Office of PNGI Performance Audit Report —
  Effectiveness of Payments and
  Acquittals of the Service Improvement Program (SIP) Page 31

• Page 45 of 73

• has lagged and subsequent payments are made by the Department of
  Finance on a monthly or
  quarterly basis without prior knowledge of project status.
  4.11 The AGO also found that the DIRD and other monitoring agencies
  such as the Department of
  Works were also not working in close cooperation to ensure effective
  monitoring of the SIP funds,
  which led to a breakdown in the controls surrounding the usage and
  accountability of SIP funds at
  the sub-national level.
  Awareness and Training
  4.12 Apart from monitoring and reporting of SIP acquittals, the DIRD
  is also required to carry out
  awareness of SIP Administrative Guidelines and reporting
  requirements as well as providing
  necessary training on capacity building at the Provincial and
  District level. The awareness and
  training carried out by DIRD was targeted towards equipping key
  personnel such as the provincial
  Treasurers and Administrators with the knowledge and skills required
  to compile acquittal reports
  and comply with administrative reporting requirements.
  4.13 The AGO found that one of the factors contributing to the non-
  acquittal of SIP funds over
  the years was the lack of awareness and training provided by DIRD to
  the Districts and Provincial
  level on the SIP Administrative Guidelines and reporting
  requirements. Due to a low level of
  awareness of the potential for the provision of training and
  coaching by DIRD, most of the key
  personnel such as Treasurers and Administrators at the District and
  Provincial level did not have
  sufficient knowledge and skill required to compile acquittal reports
  to comply with SIP reporting
  requirements. The lack of funding within DIRD also contributed to
  the low level of awareness and
  training provided as it impacted on the Department’s ability to fund
  monitoring trips to the
  Provinces and Districts in order to conduct training relating to the
  reporting requirements and
  compilation of acquittal reports.

  Conclusion
  4.14 The SIP Administrative Guidelines requires DIRD to coordinate
  program reviews with the
  Department of Finance and other relevant agencies and provide
  quarterly and annual management
  implementation reports covering both the physical and financial
  status of DSIP, PSIP and LLGSIP to
  the Central Agency Coordination Committee (CACC) and other relevant
  government agencies and
  authorities.
  4.15 The DIRD Corporate Plan is an overarching strategic management
  tool that provides

• Page 46 of 73

• directions and a roadmap for the organisation to achieve its
  objectives. It also emphasises the key
  roles and responsibilities of DIRD in relation to public service
  delivery which is to provide oversight
  on the implementation of the Micro-Public Investment Program (PIP)
  including the service
  improvement program (DSIP, PSIP and LLGSIP) and coordinating reform
  processes and
  implementation at the sub-national level. The DIRD under its
  Organisational Structure also
  established a Monitoring Unit that conducts routine monitoring and
  inspection of projects funded
  under DSIP, PSIP and LLGSIP.
  4.16 Although the DIRD conducted routine monitoring and inspections
  of projects and SIP
  acquittals, there was a level of under-performance in the
  implementation of monitoring plans and
  programs across the country. Many of the Districts and Provinces
  were not visited by DIRD to have
  their projects inspected and verified for the period under review
  (2013- 2016). There was also a
  lack of action taken by DIRD in appraising and certifying acquittals
  of reports submitted by
  Auditor General’s Office of PNGI Performance Audit Report —
  Effectiveness of Payments and
  Acquittals of the Service Improvement Program (SIP) Page 32

  Provinces and Districts for the years 2015 and 2016 which made it
  difficult for the audit to cross
  check and verify the acquittal amounts against payments disbursed by
  the Finance Department.
  4.17 The coordination between DIRD and the Finance Department in
  terms of sharing data and
  information relating to SIP acquittals and payments was ineffective.
  There was a gap in the
  monitoring process of payments and acquittals of SIP funds in which
  payments were disbursed by
  Finance Department without receiving certified acquittals reports
  from DIRD of the previous
  funding allocations. This is contrary to the SIP Administrative
  Guidelines and Finance Instructions.
  Coupled with a lack of coordination by DIRD with other monitoring
  agencies such as the Works
  Department there is some doubt that the controls designed to ensure
  effective monitoring of SIP
  projects have been effective. Moreover there was a lack of awareness
  and training carried out by
  DIRD at the sub-national level on SIP acquittals and administrative
  reporting requirements which
  contributed to a poor outcome of SIP acquittal reports submitted by
  Districts and Provinces over
  the years 2013-2016.
  4.18 The AGO concluded that the monitoring and reporting of SIP

• Page 47 of 73

• acquittals and programs was
  largely ineffective as DIRD was faced with resourcing challenges in
  carrying out its monitoring roles
  and responsibility required under the SIP Administrative Guidelines
  and Finance Instructions. The
  delays in monitoring and reporting of SIP acquittals and programs
  was caused by various factors
  such as the lack of funding allocated in the budget to carry out
  monitoring as well as broader
  capacity and manpower issues experienced by DIRD. There was also a
  lack of awareness and
  training provided at the sub-national level to equip key personnel
  like Provincial Treasurers and
  Administrators with the necessary knowledge and skills required to
  prepare acquittal reports and
  comply with administrative reporting requirements.
  4.19 In order to address the issues identified in the monitoring and
  reporting of SIP projects and
  acquittals, the AGO makes the following recommendations:

  Recommendation 4
  4.20 The AGO recommends that
  (a) the DIRD should ensure that program coordination,
  monitoring and reporting of SIP
  funded projects at the sub-national level is completed on a
  regular basis and
  (b) quarterly and annual management status reports are compiled
  and submitted to
  government authorities for decision making purpose concerning
  the program as required
  under the SIP Administrative Guidelines and Finance
  Instructions.
  DIRD Response:
  Agree. However, DIRD takes its role seriously as evidenced by its
  five year corporate plan and yearly work
  plans but affected by inconsistent SIP implementation monitoring
  funds and under capacity of staff because
  the DIRD’s Wing responsible for SIP coordination has less than 15
  officers responsible for monitoring and
  reporting on the expenditure of K1.2billion or about 10% of the
  national budget appropriated to sub-national
  administrations each year.

  Recommendation 5
  4.21 The AGO recommends to ensure effective submission of SIP
  acquittal reports by Districts,
  Provinces and LLGs; the DIRD should foster close coordination and
  working relationship with

  Auditor General’s Office of PNGI Performance Audit Report —
  Effectiveness of Payments and
  Acquittals of the Service Improvement Program (SIP) Page 33

• Page 48 of 73

• Department of Finance in terms of sharing data and information
  relating to monitoring reports and
  acquittals.
  DIRD Response:
  Agree with the findings. Main problem now continues to be the lack
  of coordination between DIRD and DoF
  to strictly comply with SIP Administrative Guidelines and its
  Finance Instructions to ensure the huge budget
  appropriations to sub-national administrations receiving SIP funds
  are based on performance instead of
  frontloading in contrary to the established guidelines and related
  laws.

• Page 49 of 73

• Auditor General’s Office of PNGI Performance Audit Report —
  Effectiveness of Payments and
  Acquittals of the Service Improvement Program (SIP) Page 34

  Appendixes – Details of SIP Acquittals Status 2013 – 2016
  No
  Region
  Province
  Electorate
  13 KEY
  2013
  14
  KE
  KEY
  2014
  15
  2015
  KEY
  Y
  16
  KEY
  Y
  2016
  Comments
  1
  Highlands 1
  EHP
  EHP Regional
  ,
  2013 SIP acquittal submitted,
  appraised & monitored
  6
  2014 SIP acquittal submitted,
  appraised & monitored
  8
  2015 SIP acquittal submitted &
  appraised/under appraisal
  11
  2016 SIP acquittal submitted &
  appraised/under appraisal
  2
  Highlands 1
  EHP
  Daulo
  2013 SIP acquittal submitted,
  3
  appraised & monitored
  6
  2014 SIP acquittal submitted,
  appraised & monitored
  8

• Page 50 of 73

• 2015 SIP acquittal submitted &
  appraised/under appraisal
  10
  2016 Yet to submit SIP acquittals
  3
  Highlands 1
  EHP
  Goroka
  3
  2013 SIP acquittal submitted,
  ppr ised & monitored
  c
  °
  2014 SIP acquittal submitted,
  appraised & monitored
  0
  2015 SIP acquittal submitted &
  °
  appraised/under appraisal
  11
  2016 SIP acquittal submitted &
  appraised/under appraisal
  4
  Highlands 1
  EHP
  1013 SIPacquittal submitted,
  3
  appraised & monitored
  ,
  °
  Lufa
  2014 SIP acquittal submitted,
  appraised & monitored
  0
  2015 SIP acquittal submitted &
  °
  appraised/under appraisal
  ii
  2016 SIP acquittal submitted &
  appraised/under appraisal
  5
  Highlands 1
  EHP
  Obura Wonenara
  2013 SIP acquittal submitted,
  3
  appraised & monitored
  c
  °
  2014 SIP acquittal submitted,
  appraised & monitored
  0,
  2015 SIP acquittal submitted &
  °

• Page 51 of 73

• appraised/under appraisal
  11
  2016 SIP acquittal submitted &
  appraised/under appraisal
  6
  Highlands 1
  EHP
  Okapa
  2013 SIP acquittal submitted,
  3
  appraised & monitored
  6
  °
  2014 SIP acquittal submitted,
  appraised & monitored
  0
  2015 SIP acquittal submitted &
  °
  appraised/under appraisal
  3.3.
  2016 SIP acquittal submitted &
  appraised/under appraisal
  7
  Highlands 1
  EHP
  Henganofi
  2013 SIP acquittal submitted,
  3
  appraised & monitored
  °
  6
  2014 SIP acquittal submitted,
  appraised & monitored
  0
  2015 SIP acquittal submitted &
  °
  appraised/under appraisal
  n
  2016 SIP acquittal submitted &
  appraised/under appraisal
  8
  Highlands 1
  EHP
  Unggai Bena
  2013 SIP acquittal submitted,
  3
  appraised & monitored
  6
  2014 SIP acquittal submitted,
  appraised & monitored
  2015 SIP acquittal submitted &
  8
  appraised/under appraisal
  n

• Page 52 of 73

• 2016 SIP acquittal submitted &
  appraised/under appraisal
  9
  Highlands 1
  EHP
  Kainantu
  2013 SIP acquittal submitted,
  3
  appraised & monitored
  6
  2014 SIP acquittal submitted,
  appraised & monitored
  8
  2015 SIP acquittal submitted &
  appraised/under appraisal
  3.3.
  2016 SIP acquittal submitted &
  appraised/under appraisal
  10
  Highlands 1
  1 iwaka
  Jiwaka Regional
  3
  2013 SIP acquittal submitted,
  appraisedraised & monitored
  6
  2014 SIP acquittal submitted,
  appraised & monitored
  North Waghi
  8
  2015 SIP acquittal submitted &
  appraised/under appraisal
  n
  2016 SIP acquittal submitted &
  appraised/under appraisal
  -1
  11
  Highlands 1
  liwaka
  appraised & monitored
  °
  6
  2014 SIP acquittal submitted,
  appraised & monitored
  0
  2015 SIP acquittal submitted &
  °
  appraised/under appraisal
  n
  2016 SIP acquittal submitted &
  appraised/under appraisal
  12
  Highlands 1
  Jiwaka

• Page 53 of 73

• Anglimp South Waghi
  2013 SIP acquittal submitted,
  3
  appraised it monitored
  6
  2014 SIP acquittal submitted,
  appraised & monitored
  2015 SIP acquittal submitted &
  8
  appraised/under appraisal
  10
  2016 Yet to submit SIP acquittals
  13
  Highlands 1
  Jiwaka
  Jimi
  013 SIP acquittal submitted,
  3
  appraised & monitored
  6
  °
  2014 SIP acquittal submitted,
  appraised & monitored
  2015 SIP acquittal submitted &
  8
  appraised/under appraisal
  10
  2016 Yet to submit SIP acquittals
  14
  Highlands 1
  Simbu
  Simbu Regional
  2013 SIP acquittal submitted,
  3
  appraised & monitored
  i
  6
  2014 SIP acquittal submitted,
  appraised & monitored
  2015 Yet to submit SIP acquittals
  7
  10
  2016 Yet to submit SIP acquittals
  15
  Highlands 1
  Simbu
  Gamine
  2013 SIP acquittal submitted,
  3
  appraised & monitored
  °
  2014 SIP acquittal submitted,
  appraised & monitored
  2015 SIP acquittal submitted &

• Page 54 of 73

• 8
  appraised/under appraisal
  11
  2016 SIP acquittal submitted &
  appraised/under appraisal
  16
  Highlands 1
  Simbu
  Karamui Salt-Nomane
  2013 SIP acquittal submitted,
  3
  appraised & monitored
  6
  2014 SIP acquittal submitted,
  appraised & monitored
  2015 SIP acquittal submitted &
  S
  appraised/under appraisal
  u.
  2016 SIP acquittal submitted &
  appraised/under appraisal
  17
  Highlands 1
  Simbu
  Kundiawa Gembogl
  2013 SIP acquittal submitted,
  3
  appraised & monitored
  6
  2014 SIP acquittal submitted,
  appraised & monitored
  2015 SIP acquittal submitted &
  6
  appraised/under appraisal
  10
  2016 Yet to submit SIP acquittals
  18
  Highlands 1
  Simbu
  Chuave
  2013 SIP acquittal submitted,
  3
  appraised & monitored
  c
  °
  2014 SIP acquittal submitted,
  appraised & monitored
  0
  2015 SIP acquittal submitted &
  °
  appraised/under appraisal
  n.
  2016 SIP acquittal submitted &
  appraised/under appraisal

• Page 55 of 73

• 19
  Highlands 1
  Simbu
  Kerowagi
  2013 SIP acquittal submitted,
  3
  appraised & monitored
  °
  6
  2014 SIP acquittal submitted,
  appraised & monitored
  0
  2015 SIP acquittal submitted &
  °
  appraised/under appraisal
  u.
  2016 SIP acquittal submitted &
  appraised/under appraisal
  20
  Highlands 1
  Simbu
  Sinasina Yongomugl
  2013 SIP acquittal submitted,
  3
  appraised & monitored
  6
  2014 SIP acquittal submitted,
  appraised & monitored
  2015 SIP acquittal submitted &
  8
  appraised/under appraisal
  n
  2016 SIP acquittal submitted &
  appraised/under appraisal
  21
  Highlands 2
  Enga
  Enga Regional
  ,
  2013 SIP acquittal submitted,
  ra
  4
  appraisedPP
  & monitored
  2014 Yet to submit SIP acquittals
  7
  2015 Yet to submit SIP acquittals
  10
  2016 Yet to submit SIP acquittals
  22
  Highlands 2
  Enga
  Wapenamanda
  2013 SF acquittal submitted.

• Page 56 of 73

• 3
  appraised & monitored
  5
  2014 SIP acquittal submitted &
  appraised/under appraisal
  8
  2015 SIP acquittal submitted &
  appraised/under appraisal
  10
  2016 Yet to submit SIP acquittals
  23
  Highlands 2
  Enga
  Kompiam Ambum
  2(113 SIP acquittal submitted,
  3
  appraised & monitored
  5
  2014 SIP acquittal submitted &
  appraised/under appraisal
  7
  2015 Yet to submit SIP acquittals
  11
  2016 SIP acquittal submitted &
  appraised/under appraisal
  24
  Highlands 2
  Enga
  Kandep
  2513 SIP acquittal submitted,
  3
  appraised & monitored
  c
  ‘
  2014 SIP acquittal submitted &
  appraised/under appraisal
  7
  2015 Yet to submit SIP acquittals
  10
  2016 Yet to submit SIP acquittals
  25
  Highlands 2
  Enga
  Wabag
  ‘2013 SIP acquittal submitted,
  3
  appraised & monitored
  ,
  3
  2014 SIP acquittal submitted &
  appraised/under appraisal
  7
  2015 Yet to submit SIP acquittals
  50

• Page 57 of 73

• 2016 Yet to submit SIP acquittals
  26
  Highlands 2
  Enga
  Lagaip Pogera
  2013 SIP acquittal submitted,
  appraised & monitored
  0
  3
  2014 SIP acquittal submitted &
  appraised/under appraisal
  7
  2015 Yet to submit SIP acquittals
  10
  2016 Yet to submit SIP acquittals
  27
  Highlands 2
  Hela
  Hela Regional
  1
  2013 Yet to submit SIP acquittals
  4
  2014 Yet to submit SIP acquittals
  7
  2015 Yet to submit SIP acquittals
  10
  2016 Yet to submit SIP acquittals
  28
  Highlands 2
  Hela
  Tad Pod
  2013 SIP acquittal submitted &
  appraised/under appraisal
  ,
  3
  2014 SIP acquittal submitted &
  appraised/under appraisal
  7
  2015 Yet to submit SIP acquittals
  w
  2016 Yet to submit SIP acquittals
  29
  Highlands 2
  Hela
  Komo Magarima
  1
  2013 Yet to submit SIP acquittals
  4
  2014 Yet to submit SIP acquittals
  7
  2015 Yet to submit SIP acquittals
  10
  2016 Yet to submit SIP acquittals
  30

• Page 58 of 73

• Highlands 2
  Hela
  Koroba Lake Kopiago
  2013 Yet to submit SIP acquittals
  4
  2014 Yet to submit SIP acquittals
  2015 Yet to submit SIP acquittals
  7
  10
  2016 Yet to submit SIP acquittals
  31
  Highlands 2
  SHP
  SHP Regional
  2
  2013 SIP acquittal submitted &
  appraised/under appraisal
  5
  2014 SIP acquittal submitted &
  appraised/under appraisal
  7
  2015 Yet to submit SIP acquittals
  10
  2016 Yet to submit SIP acquittals
  32
  Highlands 2
  SHP
  Imbongu
  21113 SIP acquittal submitted &
  appraised/under appraisal
  4
  2014 Yet to submit SIP acquittals
  7
  2015 Yet to submit SIP acquittals
  10
  2016 Yet to submit SIP acquittals
  33
  Highlands 2
  SHP
  !alibi.] Pangia
  3 2013 SIP acquittal submitted,
  appraised & monitored
  c
  ‘
  2014 SIP acquittal submitted &
  appraised/under appraisal
  7
  2015 Yet to submit SIP acquittals
  10
  2016 Yet to submit SIP acquittals
  34
  Highlands 2
  SHP
  Kagua Erave

• Page 59 of 73

• 1
  2013 Yet to submit SIP acquittals
  4
  2014 Yet to submit SIP acquittals
  7
  2015 Yet to submit SIP acquittals
  10
  2016 Yet to submit SIP acquittals
  35
  Highlands 2
  SHP
  Mendi Munhu
  21./13 SIP acquittal submitted &
  2
  appraised/under appraisal
  c
  ‘
  2014 SIP acquittal submitted &
  appraised/under appraisal
  0
  2015 SIP acquittal submitted &
  °
  appraised/under appraisal
  10
  2016 Yet to submit SIP acquittals
  36
  Highlands 2
  SHP
  Nipa Kutubu
  2013 SIP acquittal submitted &
  appraised/under appraisal
  5
  2014 SIP acquittal submitted &
  appraised/under appraisal
  7
  2015 Yet to submit SIP acquittals
  12
  2016 SIP acquittal submitted,
  appraised & monitored
  Auditor General’s Office of PNGI Performance Audit Report —
  Effectiveness of Payments and Acquittals of the Service Improvement
  Program (SIP)
  Page 35

  37 Highlands 2 HP WHP Regional
  2 2013 SIP acquittal submitted & 5 2014 SIP acquittal
  submitted & 8 2015 SIP acquittal submitted & 31 2016
  SIP acquittal submitted &

  appraised/under appraisal appraised/under
  appraisal appraised/under appraisal
  appraised/under appraisal

• Page 60 of 73

• WHP Tambul Nebilyer
  01 SIP acquittal submitted, c 2014 SIP acquittal
  submitted & 2015 SIP acquittal submitted & n 2016 SIP
  acquittal submitted &
  38 Highlands 2

  3 appraised & monitored appraised/under
  appraisal o appraised/under appraisal
  appraised/under appraisal

  WHP
  3013 SIP acquittal submitted, 2014 SIP acquittal
  submitted & 7 2015 Yet to submit SIP acquittals
  39 Highlands 2 Hagen Central
  5
  10 2016 Yet to submit SIP acquittals

  appraised & monitored appraised/under appraisal

  WHP
  2013 SIP acqu ttal su m tted, 2014 SIP acquittal
  submitted & 7 2015 Yet to submit SIP acquittals 10 2016
  Yet to submit SIP acquittals
  40 Highlands 2 Del
  5

  appraised & monitored appraised/under appraisal

  WHP Mul Baiyer
  acqui a su , 2014 SIP acquittal submitted
  & • 2015 SIP acquittal submitted & 11 2016 SIP
  acquittal submitted &
  41 Highlands 2
  5

  3 appraised & monitored appraised/under
  appraisal o appraised/under appraisal
  appraised/under appraisal

  42 Momase 1 Madang Madang Regional
  3 2013 SIP acquittal submitted, 5 2014 SIP acquittal
  submitted 7 2015 Yet to submit SIP acquittals 10 2016
  Yet to submit SIP acquittals

  appraised & monitored & appraised/under
  appraisal

  2013 SIP acquittal submitted, c 2014 SIP acquittal
  submitted 7 2015 Yet to submit SIP acquittals 2016
  Yet to submit SIP acquittals
  43 Momase 1 Madang Madang Open

• Page 61 of 73

• 10

  3 appraised & monitored & appraised/under
  appraisal

  Madang Middle Ramu
  2013 SIP acquittal submitted, 2014 SIP acquittal
  submitted 2015 SIP acquittal submitted & 11 2016
  SIP acquittal submitted &
  44 Momase 1

  appraised & monitored & appraised/under
  appraisal 8

  5 appraised/under
  appraisal appraised/under appraisal
  Madang Bogia
  2013 SIP acquittal submitted & c 2014 SIP acquittal
  submitted n 2015 SIP acquittal submitted & 2016
  Yet to submit SIP acquittals
  45 Momase 1
  8 10

  2 appraised/under appraisal • & appraised/under
  appraisal appraised/under appraisal

  Madang
  2013 SIP acquittal submitted, c 2014 SIP acquittal
  submitted 2015 SIP acquittal submitted & 2016
  SIP acquittal submitted &
  46 Momase 1 Usino Bundi
  11

  3 appraised & monitored • & appraised/under
  appraisal 8 appraised/under appraisal
  appraised/under appraisal

  Madang Raicoast
  2013 SIP acquittal submitted, c 2014 SIP acquittal
  submitted 2015 SIP acquittal submitted & 2016
  Yet to submit SIP acquittals
  47 Momase 1
  10

  3 appraised & monitored • & appraised/under
  appraisal 8 appraised/under appraisal

  Madang
  2013 SIP acquittal submitted, 2014 SIP acquittal
  • 2015 SIP acquittal submitted & 11 2016 SIP acquittal
  submitted &
  48 Momase 1 Sumkar

  appraised & monitored 6 submitted, appraised &

• Page 62 of 73

• o appraised/under appraisal appraised/under
  appraisal

  49 Momase 1 Morobe Morobe Regional
  3 2013 SIP acquittal submitted, 5 2014 SIP acquittal
  submitted 8 2015 SIP acquittal submitted & 10 2016
  Yet to submit SIP acquittals

  appraised & monitored & appraised/under
  appraisal appraised/under appraisal

  Morobe
  2013 SIP acquittal submitted, 4 2014 Yet to submit SIP
  acquittals 7 2015 Yet to submit SIP acquittals 2016 Yet
  to submit SIP acquittals
  50 Momase 1 Finchaffen
  10

  3 appraised & monitored

  Morobe
  2013 sly acquittal submitted, 0 2014 SIP acquittal
  submitted 7 2015 Yet to submit SIP acquittals 2016
  Yet to submit SIP acquittals
  51 Momase 1 Markham
  10

  3 appraised & monitored • & appraised/under
  appraisal

  Morobe
  2 2013 SIP acquittal submitted & c 2014 SIP acquittal
  submitted 7 2015 Yet to submit SIP acquittals 2016
  Yet to submit SIP acquittals
  52 Momase 1 Tewai Siassi
  10

  appraised/under appraisal & appraised/under
  appraisal

  53 Momase 1 Morobe Menyamya
  1 2013 Yet to submit SIP acquittals 4 2014 Yet to submit
  SIP acquittals 7 2015 Yet to submit SIP acquittals 10 2016
  Yet to submit SIP acquittals

  54 Momase 1 Morobe Nawaeb
  1 2013 Yet to submit SIP acquittals 4 2014 Yet to submit
  SIP acquittals 7 2015 Yet to submit SIP acquittals 15 2016
  Yet to submit SIP acquittals

  55 Momase 1 Morobe Bulolo

• Page 63 of 73

• 2013 Yet to submit SIP acquittals 2014 Yet to submit SIP
  acquittals 7 2015 Yet to submit SIP acquittals 10 2016 Yet
  to submit SIP acquittals

  4

  Morobe
  2013 SIP acquittal submitted, 4 2014 Yet to submit SIP
  acquittals 7 2015 Yet to submit SIP acquittals 2016 Yet
  to submit SIP acquittals
  56 Momase 1 Kabwum
  10

  3 appraised & monitored

  Morobe
  2013 SIP acquittal submitted, 2014 SIP acquittal
  submitted 7 2015 Yet to submit SIP acquittals 2016
  Yet to submit SIP acquittals
  57 Momase 1 Huon Gulf
  10

  3 appraised & monitored 5 & appraised/under
  appraisal

  Morobe
  2013 SIP acquittal submitted, c 2014 SIP acquittal
  submitted 2015 SIP acquittal submitted & 2016
  SIP acquittal submItted &
  58 Momase 1 Lae
  11

  3 appraised & monitored • & appraised/under
  appraisal o appraised/under appraisal
  appraised/under appraisal

  59 Momase 2 ESP East Sepik Regional
  3 2013 SIP acquittal submitted, 4 2014 Yet to submit
  SIP acquittals 7 2015 Yet to submit SIP acquittals 10 2016
  Yet to submit SIP acquittals

  appraised & monitored
  ESP Vangoru Saussia
  2013 SIP acquittal submitted, 4 2014 Yet to submit SIP
  acquittals 7 2015 Yet to submit SIP acquittals 2016 Yet
  to submit SIP acquittals
  60 Momase 2
  10

  3 appraised & monitored

• Page 64 of 73

• ESP Wewak
  2013 SIP acquittal submitted, c 2014 SIP acquittal
  submitted 0 2015 SIP acquittal submitted & 2016
  Yet to submit SIP acquittals
  61 Momase 2
  8 10

  3 appraised & monitored & appraised/under
  appraisal appraised/under appraisal

  ESP Arnbunti Drekirkir
  2013 Yet to submit SIP acquittals c 2014 SIP acquittal
  submitted 2015 SIP acquittal submitted & 2016
  Yet to submit SIP acquittals
  62 Momase 2
  10

  • 8

  & appraised/under appraisal appraised/under appraisal

  ESP
  2013 acquittat submitted, c 2014 SIP acquittal
  submitted 7 2015 Yet to submit SIP acquittals 10 2016
  Yet to submit SIP acquittals
  63 Momase 2 Angoram

  3 appraised & monitored • & appraised/under
  appraisal

  ESP
  2013 SIP acquittal submitted, 2014 SIP acquittal
  7 2015 Yet to submit SIP acquittals 2016 Yet to submit
  SIP acquittals
  64 Momase 2 Maprik
  6
  10

  3 appraised & monitored submitted, appraised
  &

  65 Momase 2 ESP Wosera Gawi
  2013 SIP acquittal submitted, 2014 SIP acquittal
  7 2015 Yet to submit SIP acquittals 10 2016 Yet to submit
  SIP acquittals

  3 appraised & monitored 6 submitted, appraised
  &

  66 Momase 2 Sandaun Sandaun Regional

• Page 65 of 73

• 3 2013 SIP acquittal submitted, 4 2014 Yet to submit
  SIP acquittals 7 2015 Yet to submit SIP acquittals 15 2016
  Yet to submit SIP acquittals

  appraised & monitored

  3 2013 SIP acquittal submitted, 2014 SIP acquittal
  2015 SIP acquittal submitted & 2016 Yet to submit SIP
  acquittals
  67 Momase 2 Sandaun Aitape Lumi
  10

  appraised & monitored 6 submitted, appraised &
  8 appraised/under appraisal

  2013 SIP acquittal submitted & c 2014 SIP acquittal
  submitted o 2015 SIP acquittal submitted & 2016
  Yet to submit SIP acquittals
  68 Momase 2 Sandaun Nuku
  8 10

  2 appraised/under appraisal • & appraised/under
  appraisal appraised/under appraisal

  69 Momase 2 Sandaun Vanimo Green
  1 2013 Yet to submit SIP acquittals 4 2014 Yet to submit
  SIP acquittals 7 2015 Yet to submit SIP acquittals io 2016
  Yet to submit SIP acquittals

  2013 SIP acquittal submitted, c 2014 SIP acquittal
  submitted 2015 SIP acquittal submitted & 2016
  Yet to submit SIP acquittals
  70 Momase 2 Sandaun Telefomin
  n

  3 appraised & monitored • & appraised/under
  appraisal o appraised/under appraisal

  71 New Guinea Islands AROB AROB REGIONAL
  2013 SIP acquittal submitted, 6 2014 SIP acquittal
  9 2015 SIP acquittal submitted, 11 2016 SIP acquittal
  submitted &

  appraised & monitored submitted, appraised &
  appraised & monitored appraised/under appraisal

  72 New Guinea Islands AROB Central Bougainville
  2013 SIP acquittal submitted, 2014 SIP acquittal
  7 2015 Yet to submit SIP acquittals 10 2016 Yet to submit
  SIP acquittals

• Page 66 of 73

• 3 appraised & monitored 6 submitted, appraised
  &

  73 New Guinea Islands AROB South Bougainville
  1 2013 Yet to submit SIP acquittals 4 2014 Yet to submit
  SIP acquittals 7 2015 Yet to submit SIP acquittals io 2016
  Yet to submit SIP acquittals

  AROB
  2013 SIP acquittal submitted, c 2014 SIP acquittal
  7 2015 Yet to submit SIP acquittals 2016 Yet to submit
  SIP acquittals
  74 New Guinea Islands North Bougainville
  6
  10

  3 appraised & monitored submitted, appraised
  &

  75 New Guinea Islands ENB ENB Regional
  2013 Yet to submit SIP acquittals 4 2014 Yet to submit SIP
  acquittals 8 2015 SIP acquittal submitted & 11 2016 SIP
  acquittal submitted &

  appraised/under appraisal a praised/under ap raisal

  3 2013 SIP acquittal submitted, c 2014 SIP acquittal
  submitted • 2015 SIP acquittal submitted & 2016
  SIP acquittal submitted &
  76 New Guinea Islands ENB Gazelle
  11

  appraised & monitored & appraised/under
  appraisal o appraised/under appraisal
  appraised/under appraisal

  Auditor General’s Office of PNGI Performance Audit Report —
  Effectiveness of Payments and Acquittals of the Service Improvement
  Program (SIP)
  Page 36

  2013 SII, acquittal submitted & 4 2014 Yet to
  submit SIP acquittals 7 2015 Yet to submit SIP acquittals

• Page 67 of 73

• 10 2016 Yet to submit SIP acquittals
  77 New Guinea Islands ENB Pomio

  2 appraised/under appraisal

  ENB Rabaul
  LW .3 SIP acquittal submitted, 2014 SIP
  acquittal 7 2015 Yet to submit SIP
  acquittals 30 2016 Yet to submit SIP acquittals
  78 New Guinea Islands
  6

  3 appraised & monitored submitted,
  appraised &

  21)1,3 SIP acquittal submitted, 2014 SIP
  acquittal 7 2015 Yet to submit SIP
  acquittals is 2016 Yet to submit SIP acquittals
  79 New Guinea Islands ENB Kokopo

  3 appraised & monitored 6 submitted,
  appraised &

  80 New Guinea Islands Manus Manus Regional
  2 2013 SIP acquittal submitted & 5 2014 SIP
  acquittal submitted 7 2015 Yet to submit SIP
  acquittals 11 2016 SIP acquittal submitted &

  & appraised/under appraisal
  appraised/under appraisal

  Tr.iasne,diauc”qudi7tralafritald, 2014 SIP
  acquittal 7 2015 Yet to submit SIP
  acquittals 10 2016 Yet to submit SIP acquittals
  81 New Guinea Islands Manus Manus
  6

  3 appraised & monitored submitted.
  appraised &

  82 New Guinea Islands NIP New Ireland
  Regional 2013 SIP acquittal submitted &
  2014 SIP acquittal submitted 2015 Yet to submit
  SIP acquittals 10 2016 Yet to submit SIP acquittals

  2 appraised/under appraisal 5 &
  appraised/under appraisal 7

  NIP Kavieng

• Page 68 of 73

• 2013 SIP acquittal submitted, 2014 SIP
  acquittal 2015 SIP acquittal submitted,
  10 2016 Yet to submit SIP acquittals
  83 New Guinea Islands
  6 9

  3 appraised & monitored submitted,
  appraised & appraised & monitored

  Namatanai
  2015 SIP acquittal submitted, 2014 SIP acquittal
  submitted, 2011 Yet to submit SIP acquittals
  10 2016 Yet to submit SIP acquittals
  84 New Guinea Islands NIP
  7

  3 appraised & monitored 6 appraised &
  monitored

  85 New Guinea Islands WNB WNB Regional
  8 2013 BIPda&cquittaltsubdmitted, 6 2014 SIP
  acquittal submitted, 7 2015 Yet to submit SIP
  acquittals 10 2016 Yet to submit SIP acquittals

  appraised & monitored

  2013 SIP acquittal submitted & 2014 SIP acquittal
  submitted & 2015 Yet to submit SIP acquittals
  10 2016 Yet to submit SIP acquittals
  86 New Guinea Islands WNB Kandrian
  Gloucester

  2 appraised/under appraisal 5 appraised/
  under appraisal 7

  87 New Guinea Islands WNB Talasea
  2013 SIC acquittal submitted, 2014 Yet to submit
  311-, acquittals 2011 5IP acquittal submitted &
  10 2016 Yet to submit SIP acquittals

  3 appraised & monitored 4
  8 appraised/under appraisal

  88 Southern Central Central
  Regional 2 2013 SIP acquittal submitted &
  4 2014 Yet to submit SIP acquittals 7 2015 Yet to
  submit SIP acquittals 10 2016 Yet to submit SIP
  acquittals

  appraisal

• Page 69 of 73

• !ff.3aelr,diauconftral & 2014 Yet to submit
  511-‘ acquittals 2015 Yet to submit SIP acquittals
  10
  89 Southern Central Abau
  2016 Yet to submit SIP acquittals

  2 appraised/under appraisal 4
  7

  90 Southern Central Rigo
  1 2013 Yet to submit SIP acquittals 4 2014 Yet to
  submit SIP acquittals 7 2015 Yet to submit SIP
  acquittals 10 2016 Yet to submit SIP acquittals

  Central
  21/13 SIP acquittal submitted & e o submit
  acquittals 2015 SIP acquittal submitted &
  11 2016 SIP acquittal submitted &
  91 Southern Goilala

  2 appraised/under appraisal 4
  8 appraised/under appraisal appraised/
  under appraisal

  92 Southern Central Kairuku Hiri
  1 2013 Yet to submit SIP acquittals 4 2014 Yet to
  submit SIP acquittals 7 2015 Yet to submit SIP
  acquittals 10 2016 Yet to submit SIP acquittals

  93 Southern Gulf Gulf Regional
  2 2013 SIP acquittal submitted & 5 2014 SIP
  acquittal submitted & 7 2015 Yet to submit SIP
  acquittals 10 2016 Yet to submit SIP acquittals

  appraised/under appraisal appraised/under
  appraisal

  94 Southern Gulf Kerema
  1 2013 Yet to submit SIP acquittals 4 2014 Yet to
  submit SIP acquittals 7 2015 Yet to submit SIP
  acquittals 10 2016 Yet to submit SIP acquittals

  2013 Yet to submit SIP acquittals 2014 SIP acquittal
  submitted, 2015 Yet to submit SIP acquittals
  10
  95 Southern Gulf Kikori
  2016 Yet to submit SIP acquittals

  1 6 appraised &

• Page 70 of 73

• monitored 7

  96 Southern Milne Bay Milne Bay
  Regional 8 2013 SIP acquittal submitted,
  6 2014 SIP acquittal submitted, 8 2015 SIP
  acquittal submitted & 10 2016 Yet to submit SIP
  acquittals

  appraised pp sed/under
  appraisal

  !gf,rarlacaqu’i:aits’urrrnditted, acquittal
  sourbedmitted, ‘2’017111-‘acquittal submitted &
  11 2016 SIP acquittal submitted &
  97 Southern Milne Bay Alotau

  3 appraised & monitored 6 appraised &
  monitored 8 appraised/under appraisal
  appraised/under appraisal

  98 Southern Milne Bay Kiriwina
  Goodenough 2013 SIP acquittal submitted,
  2014 SIP acquittal submitted, 2015 Yet to submit
  SIP acquittals 10 2016 Yet to submit SIP acquittals

  3 appraised & monitored 6 appraised &
  monitored 7

  99 Southern Milne Bay Esa’ala
  2013 SIP acquittal submitted, 2014 Oct to submit
  SIP acquittals 4 2015 Yet to submit SIP acquittals
  11 2016 SIP acquittal submitted &

  3 appraised & monitored
  7 appraised/
  under appraisal

  100 Southern Milne Bay Samara) Murua
  2013 SIP acquittal submitted, 2014 Yet to submit
  SIP acquittals 7 2015 Yet to submit SIP acquittals
  10 2016 Yet to submit SIP acquittals

  3 appraised & monitored 4

  101 Southern NCD NCD Regional
  3 2013 SIP acquittal submitted, 4 2014 Yet to
  submit SIP acquittals 7 2015 Yet to submit SIP

• Page 71 of 73

• acquittals 10 2016 Yet to submit SIP acquittals

  NCD !grr
  ac&qunglits7bedm lead, 4 2014 Yet to submit SIC
  acquittals 7 2015 Yet to submit SIP acquittals
  10 2016 Yet to submit SIP acquittals
  102 Southern POM North West

  3 appraised & monitored

  21313 SIP acquittal submitted, 4 2014 Yet to submit
  SIP acquittals 7 2015 Yet to submit SF acquittals
  10 2016 Yet to submit SIP acquittals
  103 Southern NCD POM North East

  3 appraised & monitored

  2013 S113 acquittal submitted,, 4 2014 Yet to submit
  SIP acquittals 7 2015 Yet to submit SIP acquittals
  11 2016 SIP acquittal submitted &
  104 Southern NCD POM South

  3 appraised & monitored
  appraised/under appraisal

  105 Southern Oro Oro Regional
  3 2013 SIP acquittal submitted, 6 2014 SIP
  acquittal submitted, 8 2015 SIP acquittal
  submitted & 10 2016 Yet to submit SIP acquittals

  appraised
  Oro Sohe
  ac&qumit?a’Ilts’uTmditted !.1′,’4.adac&c,`,Ta`itsourbe,
  „ditted, !rrrii auccludralaspur’itstemd& 10
  2016 Yet to submit SIP acquittals
  106 Southern

  3 appraised & monitored 6 appraised &
  monitored 8 appraised/under appraisal

  Oro Ijivitari
  2013 SIP acquittal submitted, 2014 SIP acquittal
  submitted, 2016 SIP acquittal submitted &
  11 2016 SIP acquittal submitted &
  107 Southern
  6

  3 appraised & monitored appraised &

• Page 72 of 73

• monitored 8 appraised/under appraisal
  appraised/under appraisal

  108 Southern Western Western
  Regional 3 2013 SIP acquittal submitted,
  4 2014 Yet to submit SIP acquittals 7 2015 Yet to
  submit SIP acquittals 10 2016 Yet to submit SIP
  acquittals

  appraised & monitored

  109 Southern Western North Fly
  1 2013 Yet to submit SIP acquittals 4 2014 Yet to
  submit SIP acquittals 7 2015 Yet to submit SIP
  acquittals 10 2016 Yet to submit SIP acquittals

  110 Southern Westem South Fly
  1 2013 Yet to submit SIP acquittals 4 2014 Yet to
  submit SIP acquittals 7 2015 Yet to submit SIP
  acquittals 2016 Yet to submit SIP acquittals

  111 Southern Westem Middle Fly
  1 2013 Yet to submit SIP acquittals 4 2014 Yet to
  submit SIP acquittals 7 2015 Yet to submit SIP
  acquittals 2016 Yet to submit SIP acquittals

  Total
  111 111 111
  111
  111 0

• Page 73 of 73

• Auditor General’s Office of PNGI Performance Audit Report —
  Effectiveness of Payments and Acquittals of the Service Improvement
  Program (SIP)
  Page 37