Fiji 2025 (Agile)

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Aggregate expenditure outturn has been below the budget plan at 91.9%, 94.2%, and 94.3% for FY 2021-22, 2022-23 and 2023-24, respectively.

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Variance in expenditure outturn by administrative classification was 8.8%, 7.9% and 7.0% for 2021-22, 2022-23 and 2023-24, respectively. Main sources of the variation were various underspends and overspends among the larger spending agencies including Ministry of Health (underspend) and Fiji Roads authority (overspend).

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Variation in expenditure outturn by economic type were 6.2%, 7.2% and 7.2% for 2021-22, 2022-23 and 2023-24, respectively. Variances occurred across most categories of expenditure by economic type over the period.

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The Government maintains contingency funds for general reserves (operating and capital), salaries, construction, and natural disasters. Average contingency fund expenditure was 0.3% of total expenditures during the three-year period.

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Actual revenue was 97.2%, 93.5%, and 98.5% the approved budget for FY 2021 22, 2022-23 and 2023-24, respectively.

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The variance in revenue composition by category was 7.3%, 10.5%, and 14.3% for FY 2021-22, 2022-23 and 2023-24, respectively. Main variation in 2022-23 and 2023-24 was higher than projected direct taxes. For 2023-24 there were lower than expected indirect taxes. For 2022-23 there were higher than projected direct taxes and lower than expected grants-in-aid, recoveries and reimbursements and indirect taxes.

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Budget formulation, execution and reporting are based on an administrative and economic classification structure that produces consistent documentation comparable with those standards. For the 2023-24 budget, a common chart of accounts (CoA) was used for budget preparation, budget execution and financial reporting. The CoA does not include a functional classification segment, and there was no mapping the of coding structures into functional classification.

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The Budget documents fulfil ten elements, including the four basic elements of table 5.1

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There are no available financial reports of the Fiji Road Authority and the Fiji Water Authority for 2022-23. These are two of the five largest statutory authorities.

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There are no available financial reports of the Fiji Road Authority and the Fiji Water Authority for 2022-23. These are two of the five largest statutory authorities.

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Detailed financial reports containing information on revenues, expenses, assets, liabilities, including long-term obligations were submitted by extra-budgetary entities/units. The trust funds have submitted their reports at the same time as the whole of government statements. However, only some of the sampled statutory authorities representing 12% in terms of expenditures have submitted their reports within nine months in the last completed fiscal year 2022-23

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Based on the evidence submitted, the allocation of all transfers to the local councils from the national government for 2023-24 were determined by transparent and rules-based systems.

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The process by which subnational governments receive information on their annual transfers is managed through the regular budget calendar of the national government. The budget appropriations were released and communicated to the local government councils only just before the start of the fiscal year.

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Information on planned performance is included in ministry/agency costed operational plans. Only the Ministry of Women, Children and Social Protection had published a costed operational plan (setting outcome objectives, outputs, activities and performance indicators) for 2024-25 at the time of the assessment.

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Information on actual performance is required to be included in ministry/agency annual reports. However, no annual reports for 2023-24 have been prepared or published.

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Information on resources received by service delivery units is provided for one large Ministry. The Ministry of Health and Medical Services presents budget D B allocations, revised estimates and previous year’s actual allocations for hospitals in the annual budget estimates. The MoH also maintains records of budget allocations and actual expenditures of hospitals and regional health sub-divisions (that manage local health centers and nursing stations).

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No independent evaluations have been performance or commissioned by Ministries in the last three years. The Office of the Auditor General has conducted three performance audits in the last three years, but these are for ministries that represent only 5% of service delivery by value.

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The government made available four basic elements and at least two additional key elements of fiscal information within prescribed timeframe

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Most public corporations publish their annual reports within nine months of the end of the financial year.

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All subnational governments are significantly delayed in preparing, submitting for audit, and publishing their annual financial statements.

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The Annual Debt Report includes a consolidated table of most contingent liabilities by value. The 2024-25 Budget Supplement submitted with the budget also presents a summary table that lists contingent liabilities.

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Detailed economic analysis were conducted for only some of the investment projects.

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Prior to their inclusion in the budget, all major investment projects were prioritized by a central entity on the basis of the published guidelines.

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The budget document presents only the budget year (2023-24) for individual projects Total project costs and maintenance costs are not indicated in the estimates.

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There is evidence of a quarterly and annual monitoring of project cost and the physical progress of approved programs and projects, but not published.

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The government maintains records of holdings of all categories of financial assets. All financial assets held by government are also recorded in the annual financial statements which are prepared in accordance with international financial standards. The annual financial statements show the change in value of assets from previous financial year. Records of the cash balances of extrabudgetary units are maintained in quarterly reports and annual financial statements. The 2024-25 Budget Supplement also presents information on the Shares and Portfolio allocations in State-Owned Enterprises as at 31 July 2024. The Budget Supplement also provides data on SOE portfolio performance but there is no reporting of the performance of government loans.

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The Ministry of Lands and Mineral Resources maintains a national register of state-owned land. There is no central government register of non-financial assets. Asset registers are maintained by relevant ministries and agencies. An annual board of survey is required to be undertaken by officers who are independent of the officer responsible for the custody of the assets but, this is not provided to the legislature or public.

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The Financial Management Act (FMA) requires financial and non-financial assets, as well as statement of changes in net assets to be included in the annual financial statements submitted to parliament. Procedures for the disposal of financial and non-financial assets are established. The Finance Instructions 2010 set out the requirements on the disposal of non-financial assets. Information on the disposal of assets is included in the Budget Estimates and Annual Financial Statements submitted to parliament and published.

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A debt management information system (Meridian) is in place that records, analyzes and reports public sector debt. Domestic and foreign debt and guaranteed debt records are complete, accurate, and updated annually. Records are updated daily, and reconciliations performed monthly and reports prepared quarterly. Comprehensive management and statistical reports covering debt service, stock, and operations are produced quarterly and an Annual Debt Report is published annually.

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The Financial Management Act 2004 (FMA) gives sole authority to borrow money to the Minister of Finance. The Act also gives authority to the government to issue guarantees, but these must be authorized by parliament. Annual borrowing is approved by the legislature via the annual budget estimates and annual appropriation acts. Central Government Debt is managed by a single agency, the Ministry of Finance, through a dedicated Debt Management Unit. A Debt Accounting Manual and Guarantee Policy document have been developed.

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The most recent Debt Management Strategy covering the period 2024-26 was approved in February 2024. The current strategy covers existing and projected debt and includes objectives and quantitative targets on debt stock, interest rates and exchange rates as well as risk indicators and aligns with the key policies outlined in the government’s 2024-25 Budget Supplement. The Debt Management Unit also prepare an Annual Debt Report that reports against the government’s debt management strategy and includes details of debt stock composition, debt servicing and borrowing, and contingent liabilities (including government guarantees). A Debt Management Strategy has been completed for the last three fiscal years.

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Forecasts for GDP and inflation were provided for the budget year and two forward years in FY2021-22, FY2022-23, and FY2023-24. For the same period, there were no interest rate and exchange rate forecasts provided as part of the budget documentations. The GDP and inflation forecasts are prepared by the Macroeconomic Technical Committee and endorsed by the Macro Policy Committee chaired by the RBF Governor and include the Permanent Secretaries for Ministries of Finance, Industry Trade and Tourism, PM’s Office, and others.

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The medium-term fiscal frameworks for FY2021-22, FY2022-23 and FY2023 24 outline revenue, expenditure, and budget balance forecasts, supported by tax measures, expenditure priorities, a debt management strategy, and quarterly fiscal performance reports to track and adjust budget execution. There were however no forecasts of Revenue by Type provided in the FY22/23 budget.

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The fiscal strategy provides an account of how the key macroeconomic variables could be impacted by variations in revenues and expenditures. Variations in the debt/GDP ratio as a result of movements in revenues and expenditures and the primary balance. These are summarized in the MTFF Table for each fiscal year. A DSA is presented as part of the fiscal analysis.

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Fiscal strategies for FY2021-22, FY2022-23, and FY2023-24 were approved by the Cabinet before each budget year, based on assessments of prior economic and fiscal performance. Impacts of revenue measures, expenditure priorities, financing options, and debt management impacts, are summarized in the MTFF and submitted to Parliament.

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The fiscal strategies identify clear medium-term fiscal targets in terms of revenues, expenditures, net deficit and debt to GDP ratio.

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Quarterly fiscal performance reports detail revenue collection, spending, and debt to keep the Cabinet informed. These reports provide an opportunity for the government to review and adjust budget parameters to align with broader budget objectives.

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The FY2024-25 budget is categorized by administrative, economic, and program classifications, with estimates for FY2024-25 provided, but outer year estimates assumed unchanged for most programs.

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No budget ceiling is issued for ministries for the budget year and two forward years in the FY2024-25 Budget Circular.

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Strategic and operational plans are prepared for all ministries, but majority are not fully costed. Most expenditure policy proposals in the annual budget reflect the objectives in the strategic plans. As well, the ministry budget format is closely aligned to the structure of its strategic plans. However, as few plans are costed this dimension is scored D.

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The FY2023-24 fiscal performance reports analyze revenues and expenditures against both Original and Revised Budget estimates, highlighting variances and their causes. Insights from these assessments inform annual budget adjustments and shape the next MTFF.

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There’s a clear schedule to guide budget preparation. However, ministries A are given more than six weeks to complete and submit their budget proposals. For the 2024-2025FY, the Baseline Budget was distributed on 16/02/24 and submission was due on 05/04/24.

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The FY2024-25 circular provides comprehensive information to guide budget preparation. Baseline budgets instead of budget ceiling are issued by the Ministry of Finance based on the previous year’s spending level, one-off expenditures and rate of implementation.

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The annual budgets in the last three completed fiscal years were submitted to Parliament less than the stipulated time for a C, hence this is rated D.

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The budget estimates, fiscal strategy, MTFF and supplementary documents are provided to Parliament for their review. The Standing Orders provide sufficient time and opportunity for MPs to scrutinize the budget.

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The Standing Orders outline the process for Parliamentary scrutiny of the budget, allowing at least six days for Members to review the Bill and budget documents before debate. The Committee of Supply plays a central role, and stakeholders, including CSOs, the private sector, and government entities, can contribute through written submissions.

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The budgets for FY2021-22, FY2022-23, and FY2023-24 were approved by Parliament prior to the new fiscal year taking effect.

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The Finance Management Act 2004 and related Finance Instructions provide the legal framework for in-year budget amendments, virement of funds, and emergency funding. In FY2023-24, all actions regarding fund transfers and emergency expenditures adhered strictly to these legislative provisions, ensuring accountability and transparency.

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The Fiji Revenue and Customs Service (FRCS) collects 89% of all central government revenues, i.e., “most” for the purposes of this assessment. Taxpayers are provided with extensive information, guidance, and support on their obligations and rights including redress. The laws and other data are fully up to date. There is an education and outreach program to assist taxpayers, which is documented. The FRCS website and portals provide access to the laws and other guidance materials, as well as details on tariffs.

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The FRCS website sets out the Compliance Improvement Strategy (CIS), which sets out the approach to compliance risk management. This includes approaches to: improving voluntary compliance through enhanced guidance; education, awareness, and personal assistance; addressing taxpayer negligence through audits and penalties; and punishing tax evasion with investigations, penalties, raids and prosecutions. The CIS focuses on high-risk sectors, which are each discussed in the strategy – specifically it specifies the various taxpayer segments, which include filing via the taxpayer online service; managing medium-term risk through the Micro, Small and Medium Enterprises (MSME) sector; and Gold Card Service and Authorized Economic Operator—primarily for large taxpayers. The strategy prioritizes highest risk, large, and medium taxpayers.

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Audits and investigations are based on the priorities set out in the CIS. Implementations exceeded plans with FRCS completing 109% of compliance cases, 104% of audits, and 125% of investigations.

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FRCS monitors and manages the largest element of revenue arrears. Tax Revenue arrears amounted to F$240.5 million as at the end of FY2023-24, i.e. 7.5% of total revenue collections. FRCS provide ageing analysis highlighting arrears older than 12 months being 57.7%.

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FRCS and other BCG revenues are collected and recorded into the FMIS daily, these revenues represent “all” for the purposes of this assessment—EBU collections are immaterial, i.e., less than one percent. A summary of collections with analysis by revenue type is prepared monthly and consolidated into a report by MoF.

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All BCG Revenues are deposited directly into CFA Accounts maintained and controlled by Treasury.

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Assessments and collections are managed through the Accounts Receivable module of FRCS’s SAP system. Reconciliation is fully automated from A A assessment, through to collection, and deposits to the bank. Uncollected amounts are reflected as tax debtors (arrears) which have ageing analysis in the system.

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Balances on all bank accounts for budgetary central government are summarized daily in the daily Cash Movement Balance (CMB). This listing collates data on CFA bank accounts (36 in number), plus Trust fund accounts and Accounts for operations of overseas missions. By their nature Trust Fund Accounts are not fungible for budget execution purposes. In addition to the CFA accounts mentioned above, Line Ministries use “drawing accounts” for their payments, which are zero-balancing with balances swept to the CFA accounts at the end of the day. CFA Accounts are many and are held with RBF and 6 separate commercial banks. They include multiple revenue collection accounts, expenditure accounts, and several special purpose accounts. Transfers between accounts are manual, there is no automatic sweeping of account balances (other than drawing accounts). Cash funds are not consolidated from a fungibility perspective.

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An annual cash plan is prepared at the start of the financial year and updated monthly on the basis of actual cash inflows and outflows.

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Warrants are issued at the start of the year for the full 12 months budgeted spending. Cash Flow Forecast identify incidences of potential/projected cash shortfalls. No such shortfalls were experienced during the year. Budgetary Units are therefore able to plan their expenditures for at least 6 months, based on budget appropriation and cash/commitment releases.

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During FY2023/24, budget adjustments were undertaken twice per redeployment #1 F$103.6 million and #2 F$7.9 million—totaling F$111.5 million for the whole year. This equates at just 2.7% of total annual expenditures. The adjustments were undertaken fully in accordance with the FMA 2004, as evidenced in PI-18.4.

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Fiji does not incur expenditure arrears, as it requires all current year liabilities to be settled prior to the end of the financial year. Treasury circular 60/36 (dated March 2024) established deadlines for releasing local purchase orders (LPOs) at the end of the financial year. All payables were cleared before the end of the financial year in the past 3 financial years, except for a small residual balance incurred by Trading and Manufacturing Accounts (TMAs). Total arrears amounted to only $1,493 for all 3 years which is a fraction of one percent

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Monitoring of arrears is undertaken through the FMIS purchase order and accounts payable modules. Commitments (LPOs) and accounts payable are recorded on a daily basis and the data is available immediately. Data recorded against these transactions includes, incurring MDA, amount, supplier, expense category, and date (for ageing).

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The new payroll system is automated and integrated with the new FMIS. However, it is not currently integrated with the HR system. The payroll system maintains the established staffing and additions and amendments to the payroll (including promotion) undergo automated budgetary control checks and are also checked against approved staffing lists. The new payroll system covers the whole of BCG and EBU payroll costs are immaterial.

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Payroll changes are invariably processed in a timely manner. Anecdotally, some payroll amendments for rural staff (primarily teachers and health workers) may be processed in a subsequent fortnightly payroll run, but these are extremely small. OAG undertakes full audit of the MDAs including payroll transactions—discussions with OAG confirmed timely payroll processing and absence of retroactive adjustments which would be significantly less than 1% of the total payroll bill.

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(As with the previous Payroll System), the new payroll system operational at the time of assessment has strong automated system controls. The system enforces segregation of duties through user responsibilities and approvals hierarchies. The system produces robust audit trails of all payroll system activity.

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Internal audit has implemented a risk-based approach to audit and has implemented a program of dedicated Internal Audits of Payroll. Payroll audits cover all line Ministries and over the past 3 years audits have been undertaken on a risk basis in 18 ministries, including all the large ministries, including Education, Health, Defense, Police, Military Forces, amongst others. OAG audits transactions of all line Ministries including auditing of all payrolls, including the existence of any ghost workers. The OAG confirmed during discussions that the payroll controls are effective, and no control weaknesses (such as existence of ghost workers) were detected.

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Detailed data is available for FPO procurement activity, but this is only partial in respect of total Central Government procurement. Furthermore, no consolidate procurement plans are available. No data was available on any of the procurement undertaken by EBUs. Consequently, this is scored D

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In the absence of EBU data no analysis by procurement method was possible. Furthermore, in the absence of any consolidated APPs, there is no data on the totality of procurement planned and undertaken.

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Per Table 24.3 only one element is met by all procuring entities, i.e., bidding opportunities. The legal and regulatory framework (for procurement) and procurement statistics are only published for FPO. Neither FPO nor EBUs publish procurement plans; contract awards; or data on complaints. As the requirement is only met for one element, this dimension is rated D.

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For FPO procurement (for line Ministries) the PS Finance reviews complaints so is not involved in procurement except for MoF procurement. All other CG entities, the procuring entity is involved in hearing the complaints. Hence item (i) is not met, and dimension therefore is rated D.

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Segregation of duties is clearly laid down and adequately observed in most of the processes of authorization, asset custody, recording, reconciliation, and audit. Further documentation and clarification of details are needed in some steps particularly within the MOF.

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Comprehensive expenditure commitment controls are in place and effectively limit commitments to projected cash availability and approved budget allocations.

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Most payments were significantly compliant with regular payment procedures. Most exceptions were properly authorized in advance and justified.

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Internal audit is operational for almost all central government entities representing 97% of expenditures, and all of revenues.

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Internal audit activities are focused on the adequacy and effectiveness of internal control. A self-assessment type of quality assurance process is put in place within the internal audit function, while waiting for the establishment of an internal audit committee in government. Audit activities meet professional standards, including focus on high-risk areas

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Annual audit programs exist. The majority of the programmed BCG audits were completed, but the estimated value was only around 15% of the audits planned as of the last completed fiscal year.

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All of the audited BCG entities in the last three fiscal years have provided at least partial response within 12 months. Majority of the recommendations have at least partial response from the auditees.

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Bank reconciliation statements were prepared on a monthly basis and available within a month for the Consolidated Fund Accounts. The same was said for statutory authorities; however, no evidence was submitted for the statutory authorities.

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There were three clearing accounts used but fully cleared as of end of 2023-24. Reconciliation was undertaken monthly and cleared with zero balance before the end of the last fiscal year.

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All imprests and accountable advances are monitored and reconciled monthly and cleared within a month. There is zero balance as of the end of each month and at year-end of the last fiscal year.

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Access and changes to records is restricted and recorded, and results in an audit trail. There is an operational body, unit or team in charge of verifying financial data integrity.

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The monthly interim financial statements compare the actual with the annual budget by administrative classifications and by economic classifications as presented in the budget document. The report includes transfers made to independent offices and off-budget entities.

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Except for some months during 2024, the monthly reports for 2023-24 were issued within two weeks. The longest time lag was three months

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There are no major data concerns. The report is useful for budget execution analysis as it compares the monthly actual with the annual budget both by economic and administrative classifications. Every monthly report also compares the year todate actual receipts and payments with the yearly budget.

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Financial reports for budgetary central government were prepared annually and were comparable with the approved budget. They contained information on at least revenue, expenditure, financial assets, financial liabilities, guarantees, and long-term obligations

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Financial reports for budgetary central government for the last completed fiscal year were submitted for external audit within 6 months of the end of the fiscal year.

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There was consistency of the national standards overtime. All the FMA and the IPSAS-Cash mandatory requirements were complied with. Most of the encouraged disclosures in the IPSAS-Cash were included in the reports. The modifications from cash basis were all disclosed in the Notes (2.1; 17; and 18).

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Financial reports including revenue, expenditure, assets, and liabilities of all central government entities have been audited using ISAs during the last three completed fiscal years. The audits have highlighted any relevant material issues and systemic and control risks. Central government audits do not include EBUs although they are all audited separately by the OAG. The individual financial statements of all ministries and departments and the combined whole of government financial statements are audited by the SAI according to ISA15s. The audits for the whole of government accounts for FY2020-21, FY2021-22 and FY2022-23 have been completed, and audit reports have been issued.

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The audit report for FY 2020-21 was submitted to the legislature within 9 months of receipt of the accounts, FY2021-22 was submitted to the legislature within six months of receiving the accounts. The audit for FY2022-23 was completed within four months after receiving the accounts and will be submitted at the next sitting of Parliament. the performance is scored at C

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The follow-up on audit recommendations is included in the Auditor General’s Report to Parliament for the Whole of Government for FY 2020-21 and FY2021 22. Issues identified as “Recurring” relate to prior year issues that were followed up during the audit. The audit of FY2022-23 was just completed, and it includes a section in the audit report on the follow-up of audit recommendations; hence, the performance is scored at B.

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The involvement of the Constitutional Offices Commission and Minister of Finance in the process of the appointment of the SAI head impairs the independence of the Auditor General. The SAI has a broad mandate and powers to perform its functions and duties. The process for budget approval is largely influenced by the executive government, hence the performance is scored at D.

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In FY 2021-22, most of the audit reports were scrutinized over 12 months after receipt, mainly due to the impact of COVID-19 restrictions and lockdowns in 2020 and 2021. In FY 2022-23 and FY 2023-24, there was also a delay of 12 months before audit reports are scrutinized and reviewed, the performance is assessed as D.

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In-depth hearings on key findings of audit reports take place regularly with responsible officers from all audited entities which received a qualified or adverse audit opinion or a disclaimer, hence the performance is assessed as A. While there is no specific document titled as an Action Plan, the entities provide the PAC with written responses to queries on how they plan to address significant audit issues.

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The public accounts committee makes recommendations on actions to be implemented by the executive and systematically follows up on their implementation during hearings. Hence, the performance is assessed as A

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All hearings are conducted in public. Committee reports are published on the Parliament website. Hence, the performance is assessed as A.