The 2023 Audit Report reveals that the Ministry of Lands and Mineral Resources is grappling with considerable financial management challenges that could threaten its financial stability. Although the Ministry received an unmodified audit opinion, confirming that its financial statements were accurately represented, it has struggled to resolve ongoing compliance issues affecting its operations.
A major area of concern is the Ministry’s failure to submit draft financial statements for the Land-Owning Units (LOUs) for auditing, as required by the Land Use Regulations 2011. For the current fiscal year, the Ministry’s budget was revised to $24.5 million, with actual spending recorded at $23.1 million. This has resulted in an unspent amount of $1.4 million, largely due to salary adjustments arising from vacancies and unutilized project funds, especially related to the Large and Small Island Groundwater Development initiatives.
On a positive note, the Lands Trust Fund finished the year with a robust balance of $7.8 million, generating $3.5 million in revenue against expenditures of $2.5 million. Conversely, the Minerals Trust Fund reported a troubling deficit of $1.64 million, a significant drop from last year’s surplus of $381,180. This decline has been primarily attributed to unforeseen expenses and declining revenue streams.
The report also highlighted the ongoing issue of revenue arrears, which are currently estimated at approximately $32.8 million. Although this reflects a slight improvement from $35.8 million previously, the overdue amount has remained consistently above $20 million since 2016, mainly driven by debts from various businesses. To tackle this issue, the Ministry has introduced measures to enhance revenue collection, including waiving interest, conducting site visits, and launching awareness campaigns. The auditors have advised implementing more rigorous enforcement mechanisms to boost revenue recovery efforts.
In line with previous discussions, the Ministry is working to update its outdated leasing system, which has been a significant barrier to effectively managing aged arrears. Permanent Secretary Raijeli Taga and Finance Manager Marika Qalo have expressed hope for reforms designed to improve financial practices, such as the introduction of a new debt recovery strategy and a commitment to increased transparency in managing trust funds.
Overall, these proactive initiatives signify a hopeful direction in addressing financial challenges within the Ministry of Lands and Mineral Resources. With strengthened financial governance, the Ministry is poised to enhance its operational efficiencies and ultimately serve the community better through sustainable resource management approaches.
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