This article is an excerpt from the 2021 edition of The Art of Tendering: A Global Due Diligence Guide, which is available for purchase.
In its February 2020 judgment in Fiji Independent Commission Against Corruption v Laqere, the High Court of Fiji sentenced two Public Works Department employees to seven years’ imprisonment and another to five years’ imprisonment for their role in a fraud scheme that involved facilitating the processing of false payments for office supplies. The Court’s judgment included a summary of multiple counts over a three-month period during which the false payments were processed.
As the Court summarized, the first accused held the position of Assistant Accounts Officer within the Public Works Department and was employed for 19 years prior to her suspension where her responsibilities “within the period material to this case included passing bills for payment, checking schedules, checking and passing payment vouchers, checking and editing reports from EDP, liaising with section Chief Clerk on day to day running of sections” as well as “carrying out reconciliation of suspense account, preparation of expenditure report, signing cheques, supervising accounts clerical officers, attending to queries regarding accounts and expenditure, banking and General Ledger reconciliation of Dominion Cash Account and any other duties assigned by the Accountant as required.”
As the Court further summarized, the defendant used accomplices to bypass the checks and balances that were put in place to protect against misappropriation in spending, and then turned a blind eye to the improper processing of 27 fraudulent transactions totaling over $75,000:
Cheque Signatories
Procedurally, cheque signatories are authorized persons either through their appointment they are vested with such duty or through their positions they held within the various Department or the Ministry. Two authorized persons are required to sign a cheque. The requirement of two signatories is a control mechanism aimed at preventing fraud of government funds.
The first person is the signatory and the second person is the counter signatory of the cheque. Both persons have a fiduciary duty to properly check the cheque with other supporting source documents are in order before they put their respective signatures. As a cheque signatory, it was the 1st Accused duty to verify important information attached to the batch of documents submitted before she puts down her signature on the Cheques.
The 1st Accused was an experienced and mature officer at DECE, and in carrying out her duties as an Assistant Accounts Officer within the time period of the offence, she was a signatory to the Government cheques for DECE Operating Fund Account and Trade and Manufacturing Accounts. At the relevant period, the 1st Accused was not based at the Accounts Section of DECE but based at the Mechanical Section of DECE. She knew this breached financial and accounting instructions and regulations, thus failing to perform her duty with due diligence and care. Furthermore in all the payments vouchers, the procedures were not followed as to the various people who were signing in the Checked by column, Passed for Payment and certify column were either not authorized to do so or they did not check all the source documents were attached and verified. Apart from the discrepancies noted above in relation to the Payment Vouchers, it was identified that the Requisitions were photocopied and reused in other transactions. There were no Deliver Dockets attached in any of the 27 transactions to show the delivery was done.
In all the Purchase Orders attached to the Payment Vouchers, the person signing in the authorized column was not authorized and did not have the authorized limit to approve the amount for each of the PO’s which the 1st Accused could have easily picked, if she did her duty properly it could have been easily rectified, instead she willingly signed Cheques for those bogus payments.
The 1st Accused failed to cross check the FMIS records and the printed PO’s which on record showed that all orders were CANCELLED in the FMIS system. All payments were in breach of the Financial Management Information system (FMIS) of Government and she entirely disregarded those breaches. As a cheque signatory, it was her duty to verify if payments are done properly with FMIS compliance. (Refer to Annexure A). The Payment was done to either Crazy Office Supplies or Entire Office Supplies Limited between 01 February 2010 to the 31st May 2010.
The person signing in the Payment Vouchers certified column was not authorized to be signing on behalf of DECE or the Senior Accounts Officer (SAO). Failure to cross check the FMIS record and other details in the Payment Vouchers, the 1st Accused failed to exercise due diligence, thus resulting in the payment being made to Crazy Office Supplies and Entire Office Supplies Limited.
Therefore, in respect of the 27 Cheques mentioned in paragraph 15(i) above, a total of FJD$76,931.57 was paid to Crazy Office Supplies and Entire Office Supplies Limited. The gain was to the said companies due to the 1st Accused arbitrary act of signing on the Cheques without properly checking the source documents attached with the Cheques. The 1st Accused knew that there were a number of irregularities and breaches to the standard financial and accounting procedures and regulations, but she wilfully kept a blind eye and went ahead and signed all the 27 Cheques (Refer to the Annexure A).
The long sentences imposed on the former employee and her accomplices illustrates how some jurisdictions maintain a low-tolerance approach to the misappropriation of public funds, which serves as a strong deterrent for others who may be tempted to engage in similar schemes. Other jurisdictions should consider strengthening their sanctions to deter similar conduct within their own public sector institutions.
