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 Guinea

    Report of the Auditor-General

    2014
    40th Independence
    Anniversary
    Part 4

    Part 4
    Govt. Print – 357/220.09/2015

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  • Part 4
    Report of the Auditor-General
    2014

    on 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

  • Page 3 of 396

  • Page 4 of 396

  • 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 District

    Dear 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-General

    Level 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 ……………………………………………………………………………………………………………. xviii

    SECTION 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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  • PARA SUBJECT PAGE
    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 ………………………………………………………………………………………… 314

    SECTION 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 ……………………………………………………………………………………………………………… 328

    81.1 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 ………………………………………………………………………. 339

    Acknowledgements ………………………………………………………………………………………………………….. 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