| Solomon Islands : Integrity Scorecard Report > Sub-Category: State-Owned Enterprises | ||
| Indicators | Score | |
| 67 | Is there an agency, series of agencies, or equivalent mechanism overseeing state-owned companies? | 100 |
| 68 | Is the agency, series of agencies, or equivalent mechanism overseeing state-owned companies effective? | 20 |
| 69 | Can citizens access the financial records of state-owned companies? | 80 |
Indicator and sub-Indicator Details
| 67 | Is there an agency, series of agencies, or equivalent mechanism overseeing state-owned companies? | |||||||
| 67: In law, is there an agency, series of agencies, or equivalent mechanism overseeing state-owned companies? | ||||||||
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Comments: The question mentions "companies", but not state-owned corporations. The Investment Corporation of the Solomon Islands looks after state-owned companies, but not state-owned corporations. The Economic Reform Unit at the Ministry of Finance is in the process of setting up a monitoring function for the state-owned corporations, but currently just an officer not an agency is responsible. References: Investment Corporation of Solomon Islands Act, Cap 143, of the Solomon Islands, 1996 Consolidation, [ LINK ]
Peer Review Comments: SOEs are also audited by the Auditor-General.
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| 68 | Is the agency, series of agencies, or equivalent mechanism overseeing state-owned companies effective? | |||||||
| 68a: In law, the agency, series of agencies, or equivalent mechanism overseeing state-owned companies is protected from political interference. | ||||||||
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Comments: Investment Corporation of Solomon Islands Act, Cap 143, S.8: "The Minister may, after consultation with the Chairman, give to the Board such directions of a general character as to the policy to be followed by the Board in the performance of its functions as appear to the Minister to be necessary and the Board shall give effect thereto." The Auditor General's office is protected from political interference. References: Investment Corporation of Solomon Islands Act, Cap 143, S.8. Laws of the Solomon Islands, 1996 Consolidation, [ LINK ]. The law explicitly subordinates the board to decisions of the minister. In the case of state-owned enterprises, the relevant legislation is the State Owned Enterprises Act 2007, S.20, [ LINK ]: "(1) Every State Owned Enterprise and every subsidiary of every State Owned Enterprise shall have as its auditor the Auditor-General. (2) Without limiting subsection (1), the board of a State Owned Enterprise may, after consultation with the Auditor-General and if its Responsible Minister so approves, appoint a person or firm that is qualified for appointment as an auditor of a company to be an additional auditor of the State Owned Enterprise or any subsidiary of a State Owned Enterprise. (3) For the avoidance of doubt, section 20(1) applies notwithstanding section 35(2) of the Public Finance and Audit Act."
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| 68b: In practice, the agency, series of agencies, or equivalent mechanism overseeing state-owned companies has a professional, full-time staff. | ||||||||
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Comments: References: Tony Hughes, Transparency International & Chairman of the Board of SOLTAI, Interview, May 10, 2009, Honiara (answering with regard to "companies" and therefore the Investment Corporation of the Solomon Islands.) Robert Cohen, Group Audit Adviser, Office of the Auditor General, Interview, May 8, 2009 (answering with regard also to state-owned enterprises says "no" since there is only one member of staff, but an intention to expand.) The Auditor General's Office has had difficulty obtaining staff able to audit the more complex accounts of state-owned enterprises.
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| 68c: In practice, the agency, series of agencies, or equivalent mechanism overseeing state-owned companies receives regular funding. | ||||||||
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Comments: References: Tony Hughes, Transparency International & Chairman of the Board of SOLTAI, Interview, May 10, 2009, Honiara (answering with regards to "companies" and therefore the Investment Corporation of the Solomon Islands says "no" since funding is dependent on dividends and only one company, Solomon Telekom, pays dividends.) Robert Cohen, Group Audit Adviser, Office of the Auditor General, Interview, May 8, 2009 (answering with regard also to state-owned enterprises says "no" since there is only one member of staff, but an intention to expand.)
Peer Review Comments: This is admittedly a little confusing as the Auditor-General also 'oversees' SOEs in relation to finances, and it is funded.
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| 68d: In practice, when necessary, the agency, series of agencies, or equivalent mechanism overseeing state-owned companies independently initiates investigations. | ||||||||
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Comments: References: Tony Hughes, Transparency International & Chairman of the Board of SOLTAI, Interview, May 10, 2009, Honiara Robert Cohen, Group Audit Adviser, Office of the Auditor General, Interview, May 8, 2009
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| 68e: In practice, when necessary, the agency, series of agencies, or equivalent mechanism overseeing state-owned companies imposes penalties on offenders. | ||||||||
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Comments: References: Tony Hughes, Transparency International & Chairman of the Board of SOLTAI, Interview, May 10, 2009, Honiara Robert Cohen, Group Audit Adviser, Office of the Auditor General, Interview, May 8, 2009
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| 69 | Can citizens access the financial records of state-owned companies? | |||||||
| 69a: In law, citizens can access the financial records of state-owned companies. | ||||||||
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Comments: They can do so through the Companies Registry. References: Tony Hughes, Transparency International & Chairman of the Board of SOLTAI, Interview, May 10, 2009, Honiara Robert Cohen, Group Audit Adviser, Office of the Auditor General, Interview, May 8, 2009
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| 69b: In practice, the financial records of state-owned companies are regularly updated. | ||||||||
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Comments: References: Tony Hughes, Transparency International & Chairman of the Board of SOLTAI, Interview, May 10, 2009, Honiara Robert Cohen, Group Audit Adviser, Office of the Auditor General, Interview, May 8, 2009
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| 69c: In practice, the financial records of state-owned companies are audited according to international accounting standards. | ||||||||
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Comments: For statutory corporations, the Auditor General's Office has responsibility, but needs to bring in outside support to deal with accounts that are typically more complex than those for other parts of the government. For state-owned companies, the entity concerned would normally appoint their own auditor, although possibly with some communication with the Investment Corporation of the Solomon islands. There are currently moves to enable the Auditor General to assume responsibility for state-owned companies, as well as statutory corporations. This will require some increasing of the capacity within the Auditor General's Office. References: Tony Hughes, Transparency International & Chairman of the Board of SOLTAI, Interview, May 10, 2009, Honiara Robert Cohen, Group Audit Adviser, Office of the Auditor General, Interview, May 8, 2009 Eric Muir, Acting Auditor General, Interview by telephone, May 19, 2009
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| 69d: In practice, citizens can access the financial records of state-owned companies within a reasonable time period. | ||||||||
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Comments: References: Tony Hughes, Transparency International & Chairman of the Board of SOLTAI, Interview, May 10, 2009, Honiara Robert Cohen, Group Audit Adviser, Office of the Auditor General, Interview, May 8, 2009
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| 69e: In practice, citizens can access the financial records of state-owned companies at a reasonable cost. | ||||||||
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Comments: References: Tony Hughes, Transparency International & Chairman of the Board of SOLTAI, Interview, May 10, 2009, Honiara Robert Cohen, Group Audit Adviser, Office of the Auditor General, Interview, May 8, 2009
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