Inquiry finds fraud with managing logging levies in Sandaun


A Sandaun provincial administration-sanctioned audit report that inquired into the expansion of Project Development Benefit (PDB) funds for the Amanab Forest Management Area (FMA) development has exposed massive fraud and corruption.
Landowner monies totaling more than K3.5 million were siphoned off through nepotism and dubious means with senior public servants, even from outside the project area, colluding and benefiting from the corrupt deals. These were through various purported project including constructions of aid posts, water supplies, roads and school buildings in the Imonda, Amanab and Green River areas of West Sepik Province. The confidential report, which was completed in 2017 by the chief internal auditor under the auspices of the former West Sepik Provincial Administrator Henry Norm, found the practices in choosing contractors breached the Public Finance Management Act and clauses of project guidelines governing use of PDB funds.
Some very senior provincial administration officers and various contractors have been implicated in the report.
The report said the officers and others unlawfully formed a group known as the Technical Working Group/Committee and handpicked contractors whom they knew and awarded them contracts.
Few kickbacks in monies were requested from contractors too, the report found.
“There is no public tender,” the finalised report by then internal auditor Kenny Mayeni said.
“As far as this investigation is concerned, this Technical Working Group/Committee is illegally set up in violation of the Clause 11.2 of Project Guidelines.”
The audit conducted inquired into operations of the project development benefit funds, whether procurement of projects is done within the frame work of the government’s established procurement procedures, whether there were conflict of interest by committee members and projects were successfully completed based on payment made.
The audit also looked at allowances for committee members and it found that they paid themselves handsomely which was “over and above the required amounts they should receive per the resolutions”.
The Amanab project development benefit trust fund was set up to manage the various timber levies (agriculture, infrastructure, spiritual, education, education infrastructure, environment and future generation) paid by developer Vanimo Forest Products.
The break-up of levies; 40 per cent is paid to incorporated landowner groups in cash and 60 per cent is paid to Project Development Benefit Trust Fund.
The report listed various contractors, how much they were paid, and the projects they were engaged to complete but had failed miserably.
The report also detailed how contractors were selected. At that time, the report said the project development funds held at trust accounts totaled around K17 million and K8 million was invested with BSP Capital-yielding K700,000 interest annually and 25 per cent  from this was used to run the administration.

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