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Welcome to Sunday Chronicle blogspot. Sunday Chronicle is a leading weekly newspaper in Papua New Guinea. It is a community oriented paper and highlights positive issues and developments of the week. We hope this medium of communication can keep you abreast of the happenings and events in the country and abroad.

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This week's local news - July 18 - 21, 2013.

Sunday, April 4, 2010

Royalty trust accounts in chaos


THE PNG Department of Petroleum has breached the Oil and Gas Act by not paying the landowners their royalties monthly.

This was highlighted by the Parliament Public Accounts Committee (PAC)report that was tabled in Parliament last month.

And the PAC said in its report that Royalty Trust Accounts should be given to some agency credible to manage.

A PAC report titled, "The Public Accounts Committee Report on the Inquiry into the keeping of the Government Trust Accounts for the Financial Years 2000-2008", said the case has worsened with the
Department of Petroleum since 2005 where Royalty Trust accounts are in a chaotic state.

"This Department seems to have decided to act precisely as it wants with both public and trust monies and to keep no records of those dealings," the PAC said.

According to the PAC, the AG raised concern that the Department did not compile its bank reconciliation for the six Trust accounts under its control from 31st May 2007 until June 2008.

The PAC said the AG requested records of expenditure from Trust Accounts totaling K29, 426,980 but nothing was received.

Other findings by the AG are;
  •  Payments were made on an irregular basis
  • Trust Accounts for Gobe and Kutubu recorded nil payments since 31st December 2007, and this is a breach of the Oil and Gas Act 1998 which stipulates that all royalties are to be paid monthly.
  • The Trust accounts contain K80 million which should be invested and no interest has been paid into these accounts during the period May 30 to April 30, 2008.
  • The AG could not ascertain whether total payments of K6,724,203 made from Trust Accounts in the period 31st December 2007 to 30 April 2008 were made to correct persons as no disbursement records were produced.
Other areas of concern were that the development expenditure from these Trust Accounts totaling more than K47 million in 2007 showed among others incorrect expenditure vote was used for payments totaling more than K20 million and project payment of over K100,000 had no Central Supply and tender Board compliance.

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