Auditor-General flags risk as Bua Provincial Council transfers rental income to a company with no provincial shares
The Auditor-General has raised concerns over the Bua Provincial Council’s move to transfer rental income from its properties to a company in which the council does not hold any shares. The concerns are outlined in the Audit Report on Provincial Councils – Volume 7, tabled in Parliament last week.
The council resolved on October 8, 2019, to form a company to manage its rental properties, including Naulumatua House and Rest House. The company was registered on February 19, 2021. From January 1, 2022, the rental income from these properties was redirected to the bank account of this company. A company search showed that the council has no shareholding in the company, and three directors were appointed at the Bua Provincial Council Bose Ni Yasana meeting held on November 19, 2020.
Auditors noted that the status is transitional and the Asset Transfer contract is still being worked on. Once the asset transfer process is finalised, the asset value will become the council’s shareholding in the company. The Auditor-General warned that, because the council has no formal shareholding, its legal relationship with the company cannot be fully established.
Context and broader reform efforts
The findings come amid wider concerns raised by the Auditor-General about governance and financial reporting across Fiji’s provincial councils. The Audit Report highlights that several councils have faced delays in submitting financial statements, varied opinions on their accounts, and weaknesses in internal controls and record management. These issues have spurred calls for stronger oversight, enhanced governance practices, and more robust financial reporting across all councils.
In response, the iTaukei Affairs Board and provincial councils are pursuing reforms, including training for finance personnel, strengthening finance committees, and improving monthly reconciliations and documentation for investments and asset ownership. A concerted push to clear audit backlogs and improve accountability is ongoing, with a generally cautious but hopeful outlook about future improvements in transparency and governance.
Implications for the council and residents
For Bua, the key implication is ensuring that any asset or rental income under provincial control is formally owned or properly documented as a shareholding, to establish clear legal relationships and accountability. As the Asset Transfer contract progresses, officials and residents will be watching to see whether ownership and governance arrangements align with public-interest obligations and financial reporting standards.
Additional commentary
This case underscores a broader trend: oversight bodies are increasingly focusing on asset ownership, documentary trails, and the formalization of governance structures within provincial councils. While the path to full reform is ongoing, the emphasis on asset clarity and stronger governance mechanisms is aimed at restoring public trust and improving the stewardship of public resources.
Summary
The Auditor-General’s note on Bua’s rental income arrangement fits into a wider pattern of governance and financial reporting challenges across Fiji’s provincial councils. The ongoing asset-transfer process, combined with broader reforms and capacity-building efforts, offers a pathway toward stronger accountability and transparent management of public assets.
Note: The article reflects ongoing developments in governance reforms and the audit context within Fiji’s provincial councils. The overall tone remains focused on accountability, process improvements, and potential positive outcomes as reforms take root.
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