K300 million cost overrun due to excess people

An estimated K300 million is incurred through cost overruns in the public service payroll annually.

This figure is attributed to under budgeting as well as excess people on the government payroll.

Chief Secretary to Government, Isaac Lupari, said this during the announcement of the revised Public Finance Management Act in Port Moresby recently.

He stated that the substantial amount of money could be used for development purposes.

“Ever year we incur almost about K300 million cost overruns, raising salaries. This is money that we can spend to improve the lives of our people.

“I’m told that (this) attributed to under budgeting as well as having too many people on the payroll.

“For example, it should be one position, one person, on one pay. But on our payroll system, we having two to three people paid on the same position, as a result, K300 million cost (over) runs every year,” said Lupari.

The ongoing reforms are continuing to compliment the amended PFMA and the stringent compliance guidelines entailed within them, stated the chief secretary. This will address unwarranted procurement of services, which also incur unbudgeted costs.

“Because every person within the organisation suddenly becomes section 32 officers, making commitment without the approval of the Section 32, who is the chief accounting officer of that agency.

“And we can talk about many even in my department, junior officers are making commitment, procuring services, car hires, what not, (and) the list goes on.

“It affects our budget. Every year we have outstanding liabilities that are not procured in compliance with the financial management act.”

Lupari said from where he sits, the biggest challenge in the public service is introducing discipline in financial management. And the amended PFMA will introduce that.

“We had many amendments in the past. But I think this amendment really talks about prudency, protection against fraud, and protection against abuse, and also make every government agency, departmental heads, and others accountable for every decisions that we make,” he said.

Cedric Patjole