Chuuk State Debt Relief Fund shows poor record keeping and ineffectiveness at retiring debt
- Category: News
- Published: Thursday, 23 April 2020 22:03
- Written by Bill Jaynes
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By Bill Jaynes
The Kaselehlie Press
March 6, 2020
Weno, Chuuk—The Chuuk Office of the Public Auditor has released the results of its recent concluded audit on the Chuuk State Debt Relief Fund. It found that the records of debts or payables under the fund were not properly maintained. It also found that there is no clear plan on how to the retire $13 million in liabilities for claims and judgments and other payables that have been accumulating. Further, it said, that amount was not transparent to the public because it was not reported and reflected in the Financial Statement.
It said that in 2007, the Debt Relief Task Force started to manage the existing debt of $46 million that existed at that time. Because of the lack of records, auditors were unable to analyze historical balances and how the original amount has decreased through the years.
“During our audit, the Reconciliation Officer provided an outstanding payable amounting to $13 million. However, the accuracy of this payable amount is very much doubtful. The Reconciliation Officer was unable to vouch its accuracy because she said she did not keep complete records of supporting documents per claim. Additionally, she did not reconcile the system records with bank reports,” the audit said.
“Since the accuracy of details of $13 million payable were subject to question, we have decided to omit its details from publicly available reports because of the unnecessary conflict it might create for any differences. We have provided, though, such details to the members of the Debt Relief Task Force and to the Department of Administrative Services (DAS) for their reconciliation and so that an accurate amount of payable for each creditor could be established, recorded in the books and reflected in the Financial Statement; and, to the Governor and Legislature for their reference.”
Auditors recommended that the Task Force should work towards implementing and reconstructing the account records liabilities to establish firm Accounts Payables for recording and payment purposes. “Additionally, and most importantly, the Task Force should work towards implementing the defined activities in the Memorandum of Understanding between the Chuuk State Government and the Federated States of Micronesia National Government that would generate additional revenue for the Debt Relief Fund. The system management’s achievements will strongly impact the improvement in the collection of revenues, therefore, the debt relief fund,” executive summary on the audit said.