The FSM National OPA's latest follow-up Performance Audit on the FSM Professional Premiums Program covering FY 2016-2018 entitled, Limited Capacities at the Division of Personnel Affects the Administration of the Professional and Market Place Premium Program, was submitted to the Congress and President on May 14, 2019.
You can access the full report by visiting the FSM website at www.fsmopa.fm
or download the report
OFFICE OF THE CHUUK STATE PUBLIC AUDITOR
PRESS RELEASE NO. 2018-01
The Office of the Chuuk State Public Auditor (OCPA) announces the release of Audit Report No. 2018-01, a performance audit entitled Faichuk Educational Development and Research Project (FEDRP): With Issues on Expenditures and on Performance Outcomes and Deliverables, which covered the fiscal year 2016 to 2017. The audit report is available for public viewing online at http://www.fmocpa.com. Likewise, printed copies are available at the OCPA in Nepokos, Weno, Chuuk.
Public Auditor,
Manuel Jr San Jose
The Public Auditor’s authority is based on the Chuuk State Constitution Article VIII Section 9 and Truk State Law 6-21 which states in part: “The Auditor shall conduct audits of all financial transactions of all branches, departments, offices, agencies, and instrumentalities of the government, and of all accounts kept by or for them.”
We conducted the performance audit in accordance with US General Audit Standards.
The objectives of this audit included determining if (a) the spending of the project funds complied with relevant FSM/Chuuk laws and regulations, agreement, and with the terms and conditions of the contract; and, (b) the agreed output and outcomes for the project were effectively accomplished.
Based on our audit, we conclude that certain practices and expenditures of Rauchholz International Consulting (RIC) were not in accordance with laws, regulations and the terms and conditions of the agreement. One of the most important requirements of an entity receiving grant money is to establish and maintain financial management and internal control system. We found that the RIC had inadequate financial management and internal control system. The weakness in internal control over the project expenditures is an indicative of higher risk. The contract with the RIC, which was documented using a Memorandum of Understanding (MOU), requires that the RIC should comply with all applicable laws, rules, and regulations. In addition, the grant terms and conditions of the notice of grant award also require compliance with all laws and regulations governing the use of federal grant funds. Specifically, our audit has disclosed the following weaknesses:
1. Inadequate Financial Management System;
2. No Proper Segregation of Function in the Approval of Transactions
3. Inadequate Handling of Cash and Cash in Bank;
4. Expending of Funds for Certain Salaries and Wages Did Not Follow Laws and Regulations;
5. Expending of Funds for Certain Travels Did Not Follow Regulations and the Restriction on the use of the Funds for Foreign Travel;
6. Certain Expenditures Charged to Consumable were Not Allowable;
7. Certain Expenditures Charged to Contractual Account was not Properly Supported and/or Unallowable;
8. No Written Policies on Recording and Maintenance of Fixed Assets;
In addition, we found that there were inadequate delivery of project output and accomplishment of outcomes. Some activities need to be defined with measures that would demonstrate impact and benefits to the student.
We offered numerous recommendations to improve the issues and weaknesses noted in our audit.
We received ‘Management Response’ to the findings, which were mostly in disagreement. We included such response in the final report.
Read the report online
Download the report.
Printed copies are available from the OCPA in Nepokos, Weno, Chuuk.
Office of the Chuuk State Public Auditor P.O Box B Weno, Chuuk FM 96942
Tel: 691.330.8832/8835; Fax 691.330.8840
