A Fiji parliamentary committee has recommended merging or privatising underperforming small public enterprises, following reviews of the Auditor General’s reports for 2019-2020 and 2021-2022.
In their review report tabled in parliament last week, the Standing Committee on Public Accounts highlighted delays and quality issues in financial statements, the need for improved financial sustainability and reduced government reliance, questioning the financial sustainability of some entities without government support.
With assets valued at F$4.2 billion and an average return on equity of just 4%, the PAC underscored the need for improvements to be made in the strategic governance and management of these entities.
The report suggests merging smaller enterprises with similar functions, such as the Fiji Meats Industry Board with Yaqara Pastoral, to improve strategic direction and cost efficiency. It also advises that enterprises focus on their core activities and achieve a 10% return on investment, with underperformers potentially privatised.
The committee also calls for increased non-operational resource sharing among smaller enterprises to reduce costs, updating of accounts by 2025, and strengthening of the Ministry of Public Enterprises’ monitoring.
Another recommendation includes the need for all public enterprises to update their accounts by 2025 and resolve any audit issues.
The committee also urged the Ministry of Public Enterprises to strengthen its monitoring of public enterprises to ensure they operate efficiently and contribute positively to the economy. It also called for a thorough review of current accounting systems across public enterprises, with a view to implementing a uniform system that ensures accurate and timely financial reporting.
The committee report, which will be debated in a future parliamentary session, builds on audits of 41 financial statements across 18 entities, revealing improvements and ongoing financial reporting issues.
The Auditor General’s 2019-2020 report (tabled in parliament on 23 September 2021) reviewed 11 financial statements for eight public enterprises and three other entities, issuing ten unmodified opinions and one modified (qualified) opinion. The 2021-2022 report (tabled on 6 April 2023) expanded the scope to 30 financial statements, covering ten public enterprises and four other entities. Of these, 25 received unmodified opinions and five were subject to modified opinions. In the 2019-2020 period, four entities out of eleven had ineffective quality, while seven were late. The 2021-2022 period showed improvements, with only two entities having ineffective quality, though seven still faced timeliness issues.
