Report of the Auditor-General Part IV 2014 on the Accounts of Public Authorities and Statutory Bodies
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Auditor General’s Office
Report of the Auditor-General 2014
of Papua New GuineaReport of the Auditor-General
2014
40th Independence
Anniversary
Part 4Part 4
Govt. Print – 357/220.09/2015 -
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Part 4
Report of the Auditor-General
2014on the Accounts of Public Authorities and Statutory Bodies established
under the Act of Parliament and Government Owned Companies
established under the Companies Act__________________________________________________________
Public Bodies and their Subsidiaries National Government Owned Companies
National Government Shareholdings in Other Companies
Auditor-General’s Office of Papua New Guinea
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Phone: (+675) 3012200 Fax: (+675) 325 2872 Email: agopng@ago.gov.pg Website: www.ago.gov.pg
24 July 2015
The Honourable Theodore Zurenuoc, MP
The Speaker of National Parliament
Parliament House
WAIGANI
National Capital DistrictDear Sir,
In accordance with the provisions of Section 214 of the Constitution of the Independent State
of Papua New Guinea, I forward herewith a copy of my report signed on 24th July 2015 upon
the inspection and audit of the financial statements of the Public Bodies and their subsidiaries
and National Government owned companies for tabling in the National Parliament. This
Report (Part IV) also contains information on companies in which the Government does not
hold majority interest. Section D of this Part of the Report contains information on the status
of certain entities which have ceased operations and those entities audits of which have been
in arrears. Further, the status of eleven Project Audits are summarised and the details are
covered in my Special Project Audits Report to the Parliament.Yours sincerely,
PHILIP NAUGA
Auditor-GeneralLevel 6 PO Box 423
TISA Investment Haus WAIGANI, NCD
Kumul Avenue, NCD Papua New Guinea -
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2014 AUDITOR-GENERAL’S REPORT – PART IV
TABLE OF CONTENTS
PARA SUBJECT PAGE
NO. NO.General ……………………………………………………………………………………………………………………………… v
A. Foreword …………………………………………………………………………………………………………………………… v
B. Authority to Audit …………………………………………………………………………………………………………………. v
C. Audit of Public Bodies …………………………………………………………………………………………………………..vi
D. Appointment and use of Authorised Auditors …………………………………………………………………………. viii
E. Executive Summary …………………………………………………………………………………………………………… viii
Attachments A – E ……………………………………………………………………………………………………………. xviiiSECTION A – PUBLIC BODIES AND THEIR SUBSIDIARIES
PARA SUBJECT PAGE
NO. NO.1. Foreword …………………………………………………………………………………………………………………………… 1
2. Bank of Papua New Guinea …………………………………………………………………………………………………. 3
3. Border Development Authority ………………………………………………………………………………………………. 5
3A. Papua New Guinea Maritime Transport Limited ………………………………………………………….. 9
4. Civil Aviation Safety Authority of Papua New Guinea ………………………………………………………………. 10
5. Cocoa Board of Papua New Guinea and its Subsidiary ……………………………………………………………. 17
5A. Cocoa Stabilisation Fund ………………………………………………………………………………………… 18
5B. Cocoa Pod Borer Project Fund ………………………………………………………………………………… 19
6. Cocoa Coconut Institute Limited of Papua New Guinea……………………………………………………………. 22
7. Coffee Industry Corporation Limited and its Subsidiaries ……………………………………………………….. …23
7A. Coffee Industry Fund………………………………………………………………………………………………. 24
7B. Patana No. 61 Limited…………………………………………………………………………………………….. 25
8. Government Printing Office ………………………………………………………………………………………………….. 26
9. Independence Fellowship Trust …………………………………………………………………………………………. ..27
10. Independent Consumer and Competition Commission …………………………………………………………….. 28
11. Independent Public Business Corporation and its Subsidiaries ………………………………………………… 31
11A. Aquarius No. 21 Limited ………………………………………………………………………………………….. 39
11B. General Business Trust …………………………………………………………………………………………… 43
11C. PNG Dams Limited ………………………………………………………………………………………………… 44
11D. Port Moresby Private Hospital Limited ………………………………………………………………………. 48
12. Industrial Centres Development Corporation ………………………………………………………………………….. 51
13. Internal Revenue Commission. …………………………………………………………………………………………….. 55
14. Investment Promotion Authority …………………………………………………………………………………………… 57
15. Kokonas Indastri Koporesen and its Subsidiaries ……………………………………………………………………. 58
15A. Papua New Guinea Coconut Extension Fund …………………………………………………………….. 60
15B. Papua New Guinea Coconut Research Fund …………………………………………………………….. 61
16. Legal Training Institute ………………………………………………………………………………………………………… 62
17. Mineral Resources Authority ……………………………………………………………………………………………….. 63
18. Motu Koitabu Council and its Subsidiary ………………………………………………………………………………… 71
18A. Tabudubu Limited ………………………………………………………………………………………………….. 73-i-
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NO. NO.19. National Agriculture Quarantine and Inspection Authority …………………………………………………………. 74
20. National Agricultural Research Institute …………………………………………………………………………………. 80
21. National AIDS Council Secretariat ………………………………………………………………………………………… 83
22. National Broadcasting Corporation ……………………………………………………………………………………….. 94
23. National Capital District Commission and its Subsidiaries ………………………………………………………… 95
23A. National Capital District Botanical Enterprises Limited ……………………………………………….. 101
23B. Port Moresby City Development Enterprises Limited ………………………………………………… 103
23C. Port Moresby Nature Park Limited ………………………………………………………………………….. 105
24. National Cultural Commission …………………………………………………………………………………………….. 107
25. National Economic and Fiscal Commission ………………………………………………………………………….. 108
26. National Fisheries Authority ……………………………………………………………………………………………….. 112
27. National Gaming Control Board ………………………………………………………………………………………….. 114
27A. National Gaming Control Board Community Benefit Fund Trust. ……………………………….. 120
28. National Housing Corporation …………………………………………………………………………………………….. 124
29. National Information and Communication Technology Authority ………………………………………………. 126
30. National Maritime Safety Authority ………………………………………………………………………………………. 127
31. National Museum and Art Gallery ……………………………………………………………………………………….. 130
32. National Narcotics Bureau ………………………………………………………………………………………………….. 135
33. National Research Institute ……………………………………………………………………………………………….. 141
34. National Road Safety Council …………………………………………………………………………………………….. 144
35. National Roads Authority……………………………………………………………………………………………………. 147
36. National Training Council ………………………………………………………………………………………………….. 153
37. National Volunteer Service …………………………………………………………………………………………………. 157
38. National Youth Commission ……………………………………………………………………………………………….. 162
39. Office of Climate Change and Development ………………………………………………………………………… 163
40. Oil Palm Industry Corporation ……………………………………………………………………………………………. 165
41. Ombudsman Commission of Papua New Guinea ………………………………………………………………….. 166
42. Pacific Games (2015) Authority …………………………………………………………………………………………… 169
43. Papua New Guinea Accident Investigation Commission …………………………………………………………. 170
44. Papua New Guinea Immigration and Citisenship Service Authority ………………………………………….. 172
45. Papua New Guinea Forest Authority ……………………………………………………………………………………. 174
46. Papua New Guinea Institute of Medical Research …………………………………………………………………. 182
47. Papua New Guinea Institute of Public Administration …………………………………………………………….. 186
48. Papua New Guinea Maritime College …………………………………………………………………………………. 189
49. Papua New Guinea National Institute of Standards and Industrial Technology …………………………. 194
50. Papua New Guinea Sports Foundation ……………………………………………………………………………….. 199
51. Papua New Guinea University of Technology and its Subsidiaries …………………………………………… 218
51A. National Analytical and Testing Services Limited. ……………………………………………………… 225
51B. Unitech Development and Consultancy Company Limited …………………………………………. 226
52. Parliamentary Members’ Retirement Benefits Fund ………………………………………………………………. 227
53. Public Curator of Papua New Guinea…………………………………………………………………………………… 228
54. Security Industries Authority ……………………………………………………………………………………………….. 232
55. Small Business Development Corporation …………………………………………………………………………… 236
56. Tourism Promotion Authority ……………………………………………………………………………………………… 237
57. University of Goroka and its Subsidiary………………………………………………………………………………… 238
57A. Unigor Consultancy Limited…………………………………… .. ……………………………….246
58. University of Natural Resources and Environment ………………………………………………………………… 247
59. University of Papua New Guinea and its Subsidiaries ……………………………………………………………. 256
59A. Unisave Limited …………………………………………………………………………………………………… 258
59B. Univentures Limited ……………………………………………………………………………………………… 261
60. Water PNG ………………………………………………………………………………………………………………………. 262-ii-
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SECTION B – NATIONAL GOVERNMENT OWNED COMPANIES
PARA SUBJECT PAGE
NO. NO.61. Foreword …………………………………………………………………………………………………………………………. 271
62. Air Niugini Limited …………………………………………………………………………………………………………….. 273
63 Livestock Development Corporation Limited …………………………………………………………………………. 278
64. Mineral Resources Development Company Limited……………………………………………………………….. 279
65. Motor Vehicles Insurance Limited ……………………………………………………………………………………….. 285
66. National Airports Corporation Limited and its Subsidiary ………………………………………………………… 289
66A. Airport City Development Limited …………………………………………………………………………… 290
67. NCD Water and Sewerage Limited (Eda Ranu) …………………………………………………………………….. 291
68. NPCP Holdings Limited and its Subsidiaries …………………………………………………………………………. 295
68A. National Petroleum Company of PNG Investments Limited. …………………………………………. 296
68B. National Petroleum Company of PNG (Kroton) Limited ……………………………………………….. 297
68C. National Petroleum Company of PNG Pipeline and Gas Supply Limited. ……………………….. 298
69. Papua New Guinea Ports Corporation Limited ………………………………………………………………………. 299
70. PNG Air Services Limited ………………………………………………………………………………………………….. 302
71. PNG DataCo Limited……………………..……………………………………………………………………304
72. PNG Power Limited …………………………………………………………………………………………………………… 306
73. Post PNG Limited …………………………………………………………………………………………………………….. 308
74. Telikom PNG Limited and its Subsidiaries ……………………………………………………………………………. 311
74A. Kalang Advertising Limited …………………………………………………………………………………….. 313
74B. PNG Directories Limited ………………………………………………………………………………………… 314SECTION C – NATIONAL GOVERNMENT SHAREHOLDINGS IN OTHER COMPANIES
PARA SUBJECT PAGE
NO. NO.75. Foreword …………………………………………………………………………………………………………………………. 317
76. Bougainville Copper Limited ……………………………………………………………………………………………….. 319
77. Gogol Reforestation Company Limited…………………………………………………………………………………. 321
78. Ok Tedi Mining Limited………………………………………………………………………………………………………. 322
79. PNG Sustainable Development Program Limited ………………………………………………………………….. 323-iii-
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SECTION D – PROBLEM AUDITS
PARA SUBJECT PAGE
NO. NO.80. Foreword………………………………………………………………………………………………………………………… 327
80.1 Exclusion of Entities from Future Reports ………………………………………………………………… 327
81. Audits in Arrears ……………………………………………………………………………………………………………… 32881.1 General ……………………………………………………………………………………………………………… 328
81.2 Responsibility for preparation of Financial Statements ……………………………………………… 328
81.3 Legislative Requirements …………………………………………………………………………………….. 329
81.4 Current Year Audits (2014 Audits) …………………………………………………………………………. 329
81.5 Status of Current Year Audits ……………………………………………………………………………….. 331
81.6 Audits in Arrears (2013 and prior years) …………………………………………………………………. 333
81.7 Long Outstanding Financial Statements …………………………………………………………………. 336
81.8 Status of Audits as at 30 June 2015 ………………………………………………………………………. 339Acknowledgements ………………………………………………………………………………………………………….. 341
Schedule A – Current Year Audits ………………………………………………………………………………………. 344
Schedule B – Status of Audits in Arrears ……………………………………………………………………………… 348
Schedule C – Long Outstanding Financial Statements ………………………………………………………….. 351
Schedule D – Non-Operational Entities and Others ………………………………………………………………. 353
Schedule E – Prior year Audits completed during 2014/2015………………………………………………….. 354-iv-
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GENERAL
A. FOREWORD
My Annual Report to the National Parliament for the 2014 financial year is presented
in four Parts. Part I deals with the Public Accounts of Papua New Guinea (PNG). Part
II deals with National Government Departments and the Provincial Treasury Offices,
whilst Part III deals with the audit of the Provincial Governments and Local-level
Governments.Part IV (this Part) of my Report deals with Public Bodies and their Subsidiaries,
Government Owned Companies and National Government‟s shareholdings in Other
Companies.This Report is divided into four sections:
Section A deals with Public Bodies and their subsidiaries;
Section B deals with National Government owned companies;
Section C deals with the Companies in which the National Government has
shareholdings; and
Section D is an additional section which provides d