The Sydney Morning Herald Monday, May 11, 2009 Charges Fly Over Corruption in Timor by Lindsay Murdoch in Darwin - THE East Timorese Government has admitted that corrupt officials are "well established" in areas such as tax, customs and procurement as a row deepens over highly paid foreign advisers.
The Finance Minister, Emilia Pires, blames the opposition Fretilin party for the corruption, saying the Government is under attack because of "our refusal to partake in the corrupt
practices of a small few".
"There is no corruption in my office except for that which was established by the former [Fretilin] government and it is being stamped out slowly, which is why the Ministry of Finance is now the target of these unwarranted attacks," Ms Pires said.
For weeks Fretilin, the largest political party, which lost power in 2007, has alleged growing corruption in government departments in Dili, particularly the Ministry of Finance.
The party leaked documents to Timorese journalists last month revealing that foreign advisers in East Timor, some of them Australian, were being paid more than Australia's Prime Minister.
Fretilin yesterday asked the Prosecutor-General, Ana Pessoa, to investigate claims of a vendetta against an Australian adviser in the Finance Ministry, Graham Daniel, over what he is paid.
Ms Pires will today release documents in Dili showing that when retilin was in power it authorised salaries to foreign advisers as high as $US568,000. Some of the contracts were paid from Fretilin's state budget while most of the present foreign advisers in Dili are on World Bank contracts.
Australian business people have complained about the awarding of contracts. The Government awarded a $US400 million contract to a Chinese Government-owned company to build two power plants without calling for open tenders.
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REPÚBLICA DEMOCRÁTICA DE TIMOR-LESTE
MINISTÉRIO DAS FINANÇAS
Gabinete da Ministra
- Ano de Reforma -
No: ______/GMF/2008
9 January 2009
To,
The Prime Minister,
Government of Timor Leste
Subject: Retirement of Outstanding Advances
The Ministry of Finance has been giving advances to all Ministries by way of Petty Cash and Imprest. Petty cash advance is meant to be used to meet the administrative requirements of each Ministry whereas Imprest Advances are generally given to Ministries to be transferred to their units in Districts so as to enable the latter to meet their administrative requirements. Fresh advances should normally not be given by the Ministry of Finance unless old advances are fully retired. However, due to pressure from Ministries for the urgent requirement of funds to take care of exigencies, the Treasury has been giving fresh advances without waiting for the detailed statement regarding the use of advances. Instructions have been issued from time to time stressing the need to retire these advances expeditiously. The Director of the National Treasury had issued a letter to all Ministries on 9 October 2008 asking them to retire all advances by 25 October and send all details of expenditure to the Treasury by that date.
It is noted with regret that the total outstandings against all Ministries is now $8.836 million. A list detailing the outstanding advances against each Ministry is attached herewith. The unaccounted for advances relate to the period beginning February 2008 onwards.
Large outstandings are a matter of concern and are unsustainable and unacceptable. Keeping such huge amounts of money in office safes is not a desirable state of affairs either. It poses great risk to security of both personnel and cash and such a practice should be discouraged. It is quite possible that some Ministries could have opened bank accounts to keep the money in safe custody. Opening of any bank account without the explicit approval is illegal. We need to know details of such accounts.
The details of expenditure against the advances given to Ministries are to be sent to the Treasury for accounting for the same with the relevant documentation. If expenditure has been incurred there is no reason why these advances should not be accounted for quickly. The longer the delay in accounting for them the greater would be the difficulties in booking them to the right heads as the necessary documentation could get lost with the passage of time.
The Ministry of Finance has to close its’ books of accounts at the end of the current financial year. All advances have to be fully accounted for and included in the annual accounts which have to be audited and placed before the National Parliament. It would not be in the interest of the Government to present annual accounts which show a very large outstandings against advances given by the Ministry of Finance to other Ministries.
I would request you to ask all Ministers to order their Directors of Administration and Finance to give the following information by 15 December without fail:
i) submit details of expenditures against
a) petty cash advances; and
b) imprest advances
ii) all unspent balances should be deposited in the Government account in BPA under intimation to the Treasury;
iii) details of official bank accounts, if any, that have been opened by your Ministry which could be either in the name of the Ministry, a Directorate in the Ministry, or an official in the Ministry;
vi) All bank accounts that have been opened without the permission of the Treasury have to be closed immediately under intimation to the Ministry of Finance.
I will issue separate instructions governing the release of advances in the financial year 2009 wherein it will be stressed that no advances will be given to any Ministry unless the previous ones have been completely retired. This may cause some administrative inconvenience, but if irresponsible behaviour results in millions of dollars lying unaccounted for stern action is called for.
Emilia Pires
Minister
Palácio do Governo, Edifício 5, 1.º Andar
+ 670 - 333 95 10 + 670 – 3312 467
Díli, Timor-Leste
Typically true of Australian government.
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