From the House by Pesi Fonua

There was a sense of disbelief in the Tongan Parliament last week when it was reported by an independent auditor that the Audit Office had a number of abnormalities and “a style of working which left room for cheating.”

The report revealed that the Auditor General had used a private bank account to receive money from government bodies and trusts for overtime work, and that income tax was not deducted from the overtime payments made to his staff.

When questioned by the House on the abnormalities, the former Auditor General Pohiva Tu'ionetoa, who is now a Cabinet minister, claimed that the overtime payment for his staff “was not government money”, and he was paying his staff tax free. “It was for them to figure out how to pay their tax and according to the independent auditor that was not very wrong,” he said.

The independent report presented to the House was the first audited report of the Tonga Government Audit Office by an external audit agency, and performed by Grant Thornton, a New Zealander, covering the period from 30 June 2009 to 30 June 2013.

The report was presented to the House by the Chairman of the Standing Committee on Finance, the Minister of Finance, Hon. Dr ‘Aisake Eke, during a four-day sitting 16-19 March.

The former Auditor General Pohiva Tui‘onetoa is now Tonga’s new Minister of Police, Commerce and Tourism. He was Tonga’s Auditor General from 1983 to 2014, before he was elected as a People’s Representative for the Tongatapu Constituency No. 10 last November.

Initially, the Auditor General’s Office came under the Prime Minister. However, after the enactment of the Public Audit Act 2007 the office came under the Speaker of the Tongan Parliament, and it was specified that an external audit agency was to audit the Audit Office annually.

First external audit

Prior to this, the Auditor General’s Office had never been audited by an independent auditor. The first external audit report was completed last year and covered a four years period.

It revealed that it had become common practice for government boards or trusts, which were late with their annual financial reports, to pay the Auditor General and his staff to work overtime. The Auditor General would give these bodies quotations and the payments were transferred to an Auditor General’s private bank account, from which he would pay his staff when they worked overtime on these late accounts.

According to the report, payments included those made by the Tonga Broadcasting Commission, Tonga Water Board, Mordi Tonga Trust, the “Retirement Forfeited Benefits Payment” and the Tonga Cooperative Federation.

Conflict of interest

The External Auditor’s report stated that the exact amounts that were paid to the Auditor General for the overtime work were not known. There was also concern over an obvious conflict of interest over the irregular payments for the work and the responsibility of the Auditor General.

He also pointed out that there were figures in records of the Auditor General and those of the Treasury that did not match, and that some of the salary vouchers kept by the Auditor General had not been approved by the Treasury.

There were also more missing invoices in 2009 and 2010 compared to between 2011-14.

The independent audit found that while the Auditor General’s report was not incorrect, at the same time it was not perfect because of the unknown amounts that were paid out without tax deductions. He stressed that “this style of work left room for cheating”.

Hon. Pohiva Tu'ionetoa, who is now the Minister of Police, Commerce and Tourism, told the House that with regards to not disclosing the overtime payments, that it was a rare occasion, “it was not much of a legal infringement” and that it was not a matter of great concern for the auditor.

“Not very illegal”

In reply, Lord Fusitu‘a, a lawyer and Noble’s Representative, told the House that he had never heard of such a classification as a minor legal infringement. He stressed that all civil servants overtime payments were taxable. “But I am thankful that the Cabinet minister has introduced a new approach, tax free, and this is a new element in the law that a certain behaviour ‘is not very illegal’,” he said.

However, Hon. Tui‘onetoa insisted that the money received “from clients for the overtime payment of staff was not government money.” He stressed that it was money paid for work that was done outside working hours.

The House entered into a long winding debate over the overtime practice, but they did not get into other interesting details in the external auditor's report, which was translated into Tongan.

In the end, Mateni Tapueluelu, the People’s Representative for Tongatapu Constituency No. 4 moved for the House to pass the report of the Standing Committee on Finance and for disputed issues to be sorted out later.

However, Samiu Vaipulu, the People’s Representative for Vava‘u Constituency No. 15 reminded the House that once they passed the report they could no longer comment on it in the House.

Withdrawn

In the end the Chairman of the Standing Committee on Finance, Hon. Dr ‘Aisake Eke moved for the report to be withdrawn. The withdrawal was seconded by the Minister of Land, Lord Ma‘afu.

The Chairman of the Whole House Committee, Hon. Semisi Sika withdrew the report and returned it to the Standing Committee on Finance for further deliberations. Hon. Pohiva Tui‘onetoa is also a member of the committee.

The Standing Committee on Finance is made up of:

• Hon. ‘Aisake Eke Minister of Finance (chairman)
• Hon. Poasi Tei, Minister of Public Enterprises;
• Semisi Sika, Chairman of the Whole House Committee;
• Lord Nuku, the Deputy Chairman of the Whole House Committee;
• Lord Tu‘ivakano, the Speaker of the House;
• Lord Tu‘i‘afitu, Deputy Speaker of the House;
• Hon. Tevita Lavemaau, Minister for Revenue Collection and Customs;
• Lord Tu‘ilakepa, the Vava‘u No. 2 Nobles’ Representative.