Home > Corruption, Papua New Guinea, Politics > Auditor General: DSIP ineffective and of limited value, payments should be suspended

Auditor General: DSIP ineffective and of limited value, payments should be suspended

The Auditor General has presented to Parliament his report on the District Service Improvement Program for 2012/13.

The report concludes there has been “ineffective spending of DSIP grants”, “potential misuse of DSIP funds”, “limited accountability” and “likely instances of fraud and misappropriation”.

The Auditor-General says these problems are the result of “a pervasive breakdown in the DSIP governance framework”.

“The widespread and pervasive problems… show the program needs significant changes to its management and implementation”.

The Auditor’s key recommendation is that no further finds should be released to individual Districts until they can show a process of strategic planning and implementation of a sound governance structure.

Download the full Auditor Generals Report [1.9MB]

Other key findings include:

  • “There has been limited value from the DSIP funds granted when compared against the original investment criteria”
  • “Significant underspending on water supply and sanitation, law and justice, rural communication and electrification and health”
  • “Pressure from local MPs to ignore governance procedures to distribute funds to politically expedient projects”

The DSIP was introduced in 2007 to take a holistic approach to service delivery at a District level. The program was to include all stakeholders including MPs, National Departments and Agencies, Provincial Administrators, District Administrations and the people themselves.

The Auditor General recommends

  • “Substantial amendments are needed to the framework for administering and governing funding of the DSIP
  • “Education and assistance is needed in the Districts…to reinforce the need for good governance and planning in spending pubic funds”
  • “Better processes of accountability are needed to ensure DSIP funds are well pen incuding the application of penalties for non-compliance

The auditors report is based on an audit of 22 of the 89 Districts and tracked the spending of DSIP funds totalling K532 million.

Over 25% of the spending, over K116 million, was “on projects  where expenditure is unsupported or projects incomplete / abandoned”

“Over K39 million spent on other non-DSIP related expenditure. Over K58 million spent on vehicles and heavy equipment with limited application towards DSIP objectives”

According the the national budget each Disrict is supposed to revive K14 million in DSIP funds each year, K66 million in total 2008 – 2012. However the Auditor General found DSIP amounts received by each of the 22 District’s studied varied significantly – from K16 million (South Bougainville) to K36 million (Goroka) – see graph below.

No explanation was found by the auditor for the discrepancies and the report does not draw any conclusions on the reasons for the apparent discrimination between Districts.


Some Districts have also received substantial “unidentified deposits” into their DSIP bank accounts totally outside the DSIP. The largest of these unidentified deposits are K4,278,580 (Usino Bundi) K5,291,500 (Yangoru Saussia) K4,200,060 (Kainantu) K1,299,500 (North Waghi) and K1,000,000 (North Fly).

Here are examples of some of the failed projects uncovered in the audit:








  1. October 7, 2014 at 9:26 pm

    Full credit to the Auditor General’s Office for a vivid report, that relays data in an easy to read fashion. It is great to have such detailed reporting available online. They have a huge load, and support a lot of other institutions admirably; often without praise. They should be praised for being one of the few institutions to provide rich reporting on government accounts, with a lot of revealing special inquiries.

  2. Daniel Katie
    October 11, 2014 at 11:32 am

    what does the png laws says about this, can the concerned member be prosecuted if still be a member. if the member lost his seat in 2012 general election can he also be prosecuted.

  1. No trackbacks yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: