Authority told to review insurance premiums

By Joyetter Feagaimaali'i 06 November 2019, 1:00PM

The Fire and Emergency Services Authority (F.E.S.A.) has been asked to review the insurance premiums for their vehicles to ensure they are not paying more than they should.

The caution comes from Controller and Chief Auditor, Fuimaono Camillo Afele, in his report to Parliament for financial year 2016-2017.

“The authority’s total written down value of all its vehicles as at 30 June 2017 was $465,269.38,” the report reads.

“The sum insured for these vehicles was $1,419,955 and total net premium paid for those sum insured was $44,531.79.  

“The Authority should review sum insured that they are not paying more than they should. This issue was also raised in previous management letter.”

In response to the issue, F.E.S.A. said they had taken the recommendation on board.

“The Authority is reviewing sum insured of all vehicles once the premiums are due for payment,” the report said.

“There are still specialized vehicles that require extra care and are insured slightly above their written down book values. This will be closely monitored in the new financial year.”

Another issue outlined by the Auditor was the number of misposted transactions, to the tune of $106,464.52.

In response, F.E.S.A. noted the mispostings was the result of the “difference in understanding of finance staff and chart of accounts and relevant line item to charge to.”

The following is what the Auditor said about F.E.S.A:

  3.14 Samoa Fire and Emergency Services Authority Financial Year Audited 1 July 2016 to 30 June 2017

 1. Personal files were not updated regularly. The rate on IMS payroll does not match the rates of personal files. 

 Management response: The variances in rates derive from the 3% general increase by the government in 2014 which has not been filed in the personal files. Recommendation noted for future.

 2. There is no evidence that a senior member of the staff has checked lodgment before banking. Management response: Recommendation noted. Finance Division had recruited an additional Finance Officer towards the end of 2016.

 3. The authority’s total written down value of all its vehicles as at 30 June 2017 was $465,269.38. The sum insured for these vehicles was $1,419,955 and total net premium paid for those sum insured was $44,531.79.  The Authority should review sum insured that they are not paying more than they should. This issue was also raised in previous management letter.

Management response: Recommendation noted. The Authority is reviewing sum insured of all vehicles once the premiums are due for payment. There are still specialized vehicles that require extra care and are insured slightly above their written down book values. This will be closely monitored in the new financial year.

 4. The Authority’s fixed assets are not insured except for motor vehicles. Management response: insurance for buildings are included in the policies for government buildings currently with NPI. Recommendation noted for future action.

 5. A number of misposted transactions were identified that add up to the value of $106,464.52. 

Management response: Mispostings result from difference in understanding of finance staff n chart of accounts and relevant line item to charge to. Recommendation noted and will review the existing chart.

 6. The authority’s cash balance in their bank account at year end is $1,178,263. Management response: Recommendation noted and current cash balance will be reviewed. There are 3 major projects anticipated in the new year that the Board has approved which will utilize cost savings at the end of 2017. These projects include a new Faleata Station’s Mechanical Workshop, Replacement Fire Alarm Panel and a new Fire Station at Faleolo.

 7. The Authority’s building was last revalued in 2010.

Management response: Recommendation noted. The Authority will look to re-value the building in the new financial year.

By Joyetter Feagaimaali'i 06 November 2019, 1:00PM
Samoa Observer

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