20150910 MFEM Annual Report 2014-15 Final to put on the website

MINISTRY OF FINANCE AND ECONOMIC

MANAGEMENT

ANNUAL REPORT TO THE

PUBLIC SERVICE COMMISSIONER For the year ended 30 June 2015

RICHARD NEVES

FINANICAL SECRETARY

Our Ref: FS0005-15/16

Mr Russell Thomas Public Service Commissioner Office of the Public Service Commissioner

Through E-mail: [email protected]

Kia Orana Commissioner,

Annual Report to the Public Service Commissioner for 2014/15

In accordance with section 6 of the Public Service Act 2009, I am pleased to present the Ministry of Finance and Economic Management annual report for the year ended 30 June 2015.

I confirm that to the best of my knowledge all the information contained in this report is accurate.

The Ministry will independently publish the report on its website once the preliminary financial outcome for 2014/15 has been confirmed.

Yours faithfully

Richard Neves Financial Secretary

Ministry of Finance and Economic Management 10 July 2015

MINISTRY OF FINANCE AND ECONOMIC MANAGEMENT GOVERNMENT OF THE COOK ISLANDS

Office of the Financial Secretary

PO Box 120, Rarotonga, Cook Islands Telephone + 682 22878 Facsimile + 682 23877

Email: [email protected]

CC – The Honourable Henry Puna – Prime Minister The Honourable Mark Brown – Minister of Finance

Contents

Head of Department Executive Summary ...................................................... 6

Acronyms ..................................................................................................... 10

The Ministry of Finance and Economic Management ................................... 11

Part 1: AGENCY PERFORMANCE REVIEW ..................................................... 12

1.1. Delivery of Government Priorities ..................................................................................... 12

1.1.1. National Sustainable Development Plan 2010-2015 Indicators ................................... 12

1.1.2. Head of Agency Critical Success Factors ....................................................................... 13

1.1.3. Business Plan ................................................................................................................. 15

1.1.4. Business Plan Key Achievements and Challenges By Output ....................................... 27

OUTPUT 1: Fiscal and economic advice management .............................................................. 27

OUTPUT 2: Responsible and effective fiscal and economic management ............................... 29

OUTPUT 3: Efficient administration of taxation, duties and border securities ........................ 34

OUTPUT 4: production and dissemination of relevant statistics .............................................. 39

OUTPUT 5: development coordination ..................................................................................... 42

Part 2: AGENCY PERFORMANCE IMPROVEMENT ......................................... 45

2.1.1. Leadership, Direction and Delivery Strategy ................................................................. 45

Leadership and Governance ..................................................................................................... 47

Values, Behaviour and Culture .................................................................................................. 48

Structure, Roles and Responsibilities ........................................................................................ 49

Review ....................................................................................................................................... 49

2.1.2. External Relationships ................................................................................................... 51

Engagement with Ministers ...................................................................................................... 51

Sector Contributions ................................................................................................................. 51

Collaboration and Partnerships with Stakeholders .................................................................. 53

Experiences of the Public .......................................................................................................... 53

2.1.3. People Development ..................................................................................................... 54

Leadership and Workforce Development ................................................................................. 54

Management of People Performance ....................................................................................... 54

Engagement with Staff and Employment engagement ............................................................ 55

2.1.4. Financial and Resource Management ........................................................................... 56

Asset Management ................................................................................................................... 56

Information Management ........................................................................................................ 56

Improving Efficiency and Effectiveness .................................................................................... 56

Financial Management.............................................................................................................. 57

Risk Management ..................................................................................................................... 59

Part 3: RESOURCING .................................................................................... 62

3.1. Human Resourcing ........................................................................................................... 62

3.1.1. Human Resource – Full Time Equivalent Positions as at 31 May 2015 ........................ 62

3.1.2. Expatriate Employees Appointed .................................................................................. 63

3.2. Financial Resourcing ......................................................................................................... 63

3.2.1. Total Resourcing ............................................................................................................ 63

3.2.2. Operational Funding ..................................................................................................... 63

3.2.3. Capital Funding ............................................................................................................. 64

Part 4: EMPLOYMENT RELATIONS ............................................................... 65

4.1.1. Recruitment Challenges ................................................................................................ 65

4.1.2. Employee Turnover ....................................................................................................... 65

4.1.3. Employment Disputes ................................................................................................... 65

4.1.4. Issues relating to employee conduct ............................................................................ 65

4.1.5. Technical Assistance Received by the Agency .............................................................. 65

4.1.6. Employee Capability Development ............................................................................... 67

Definitions ................................................................................................... 69

Annex 1 – MFEM Organisation Structure ..................................................... 70

Annex 2 – MFEM Travel ............................................................................... 76

Annex 3 – Capital Expenditure ..................................................................... 83

Te Mato Vai ................................................................................................................................ 83

Rarotonga Watertank Subsidy................................................................................................... 83

RMS Web Lodgement System ................................................................................................... 83

Cook Islands Government Procurement Website .................................................................... 84

Capital Distribution Fund and Outer Islands Small Capital Fund ............................................. 84

The Honourable Mark Brown MP

Minister of Finance

Richard Neves

Financial Secretary

Page 6 of 84

Head of Department Executive Summary As the central agency in charge of public finances MFEM is a key institution within the public sector of

the Cook Islands. The range of outputs provided by MFEM emphasise its current role as managing

public finances, regulating the tax system, providing policy and economic advice and promoting

ongoing development.

In undertaking its key role in the public sector and delivering on its appropriated outputs MFEM relies

on three key inputs: the ability and capacity of the people it employs; the robustness of the legislative

framework and the underlying procedures which it is responsible to administer, and the systems

employed which underpin the activities it undertakes.

Maintaining these three significant inputs has been a challenge for a number of years and will continue

to be there, MFEM needs to ensure that:

• people in MFEM have the skills to carry out their role effectively;

• legislation governing MFEM’s activities maintains the overall the public good and continue to

remain relevant to the times; and

• systems employed across government provide the transparency and information required whilst

providing potential for productivity improvements cross Government.

As a key institution of the Crown MFEM will need to continually position itself in such a manner that

it continues to maintain a level of institutional capacity and credibility on which all its stakeholders

can rely on for the provision of the outputs it is appropriated to provide but also to provide impartial

advice. This is reflected in the MFEM vision to be a competent and professional organisation, inspiring

public trust in managing public finances in pursuit of aspirations of ongoing national development.

Sharing of information is important for good policy outcomes to be achieved. The MFEM approach

towards the sharing of information is to provide it unless it is commercially sensitive, most recently

MFEM has agreed with Standard and Poors to publish the reports which are undertaken on the Cook

Islands and these are available on the website.

Modernisation of legislation has continued to be a prominent issue, two years ago the Ministry of

Finance modernised the Customs Act, it also made significant changes to the various tax Acts to ensure

reforms were made. Now changes need to occur to modernise the MFEM Act and work has been

almost completed on modernising the Statistics Act which is almost 50 years old.

Systems and the data that goes in them are particularly important to MFEM. Collection of information

needs to be done in an intelligent manner and systems needs to be built in such a manner that

information is put in once and the need for intervention is minimalized. For example border control

data is now automatically collected by immigration/customs officers who through the border control

mechanism collect the flight data and biographical data of passengers. Data on the importation of

goods is now put in by the importer, the investment into the RMS will allow for data to be input by tax

agents straight into the system.

OUTPUT 1: Fiscal and Economic Advise Management was managed through the Office of the Financial

Secretary led by Richard Neves.

• Successful management of the caretaker processes around public finance following the 2014

general election and subsequent period of uncertainty.

Page 7 of 84

• Commencing a process to review the current financial payments system in the Cook Islands with

a view to reducing the overall cost of banking services in the Cook Islands.

• Driving a culture of information sharing within the Ministry and establishing the MFEM website as

a robust source of information within the Cook Islands public sector.

• Keeping Cabinet, stakeholders and the public well informed on the fiscal.

• Working to have the second PEFA Assessment finalised in November 2014 and the report has been

finalised and is being peer reviewed. Significant improvements have been made

• Working closely with the Government in delivering two fiscally responsible budgets (2014/15 and

2015/16) which meets the government’s objectives, and also in terms of driving the development

agenda and other related legislation which is administered by MFEM.

• Continuing on in the role in sitting on the Boards of the CINSF (Chair), the BCI and the FSDA.

OUTPUT 2: Responsible and Effective Fiscal Economic Management was managed through the

Treasury Division was led by Teu Teulilo who was replaced by Russell Hynd towards the end of the

financial year

• Completed a Public Expenditure Framework Assessment (PEFA) which identified significant

improvements in the overall PFM framework.

• Implemented the requirements of the newly passed Loan Repayment Fund Act.

• Reviewed content of the Quarterly Financial Reports to meet stakeholder and timing

requirements.

• Publish draft consolidated financial statements which have been provided to the Audit Office for

review.

• Undertook a major update of the Cook Islands Financial Procedures and Policies Guidelines

Manual (CIFPPG) reflecting the(PEFA) assessment complete.

• Met the legislative requirements around budgetary matters following the 2014 general election

• Engaged with New Zealand on the management of numismatic and circulating currency processing

the approval of 95 designs at an estimated value of $0.35 million of revenue for the Cook Islands.

• Working with the Royal Australian Mint for the reintroduction of Cook Islands circulating currency

on 4 August 2015.

OUTPUT 3: Efficient Administration of Taxation, Duties and Border Securities was managed through

the Revenue Management Division which was led by Andrew Haigh.

• Implemented further income tax amendments enacted which incorporated changes to the income

tax scales and further reforms to improve the administration of revenue collection.

• Worked with global forum on the phase 2 review, the subsequent report which was made

publically available in mid-March 2015 rated the Cook Islands as being largely compliant,

• Signed tax information exchange agreements signed with Canada and the Czech Republic, whilst

the TIEAs with Italy and South Africa entered into force

• Issued a ruling of when withholding tax i should be deducted from royalty payments made to non-

residents.

• Amendments to the Customs regulations were made to increase the duty rates on cigarettes and

tobacco and passed by an Order in Executive Council in June 2015.

• Successful completion of the Outer Islands Marine Reporting Pilot Project.

• Ongoing implementation of the RMS user online interface. The project which will see the initial

phase implemented in early 2015/16 will allow tax agents to submit on behalf of their clients their

monthly Pay as You Go and VAT returns, and annual employer PAYE reconciliations on line.

• Delivered Tax Audit training to staff.

Page 8 of 84

• Implemented legislative changes to the taxation arrangements on New Zealand Superannuation

which had the effect of exempting New Zealand Superannuation as income up until 31 December

2012.

• Introducing the Tax Outreach Service within RMD.

OUTPUT 4: Production and Dissemination of Relevant Statistics was managed through the Statistics

Division which was led by Taggy Tangimetua.

• Completed the Cook Islands Strategy for the Development of Statistics (CSDS) report .

• Drafted the new Statistics Bill 2015 has been drafted after a period of consultation with

stakeholders.

• Published 40 series during 2014/15.

• Continued to enhance the international reputation, recognition and achievements of the Division.

OUTPUT 5: Development Coordination was managed through the Development Coordination

Division which was led by Peter Tierney.

• Continued a trend of improved development programme execution, the 2014/15 estimated

conversion ratio of budget to spend was 58 per cent.

• Worked with OPM to programme various sources to $33 million to undertake a Renewable energy

project for the Southern Cook Islands.

• Developed draft grant funding proposal with the Government of New Zealand combining activities

through a higher order modality partnership and also creating resources for public sector

strengthening.

• Developed Te Tarai Vaka (the Cook Islands Activity Management System) polices, tools, guidelines

and templates .

• Contributed to continued momentum of the Te Mato Vai project execution by facilitating contract

variations with CCECC and KEW.

• Achieved milestone of installing 1,700 water tanks through the community subsidy scheme.

• Converted Chinese pledges including heavy machinery ($7 million) and pearl equipment ($1

million) and facilitated new concepts for agriculture ($1 million, in delivery) and Apii Nikao school

construction ($10 million, final negotiations).

• Submitted application for MFEM accreditation for direct access to the United Nations Adaptation

Find and engaged in review process.

• Mobilised majority of funding for pearl programme and established working partnership with

Manihiki Islands Government and stakeholders.

• Co-developed vision (launched February 2015) for agricultural development with MOA and FAO

in order to encourage focus and scale up of resourcing for sector.

• Implemented new policy of quarterly financial reporting from development partners for

expenditure on Cook Islands behalf.

• Improved integration of Dynamics project module with Treasury financial system.

• Conducting a successful 2015 Development partner meeting held in February 2015 with Mitiaro

visit.

• Conducted the development awards, acknowledging those people who have greatly contributed

to the ongoing development of the Cook Islands.

• Raised awareness of issues in small grants programs for pa enua and community development.

Simplified India grant fund templates, organised briefing sessions for small grant managers and

Parliament.

Page 9 of 84

• Launched the ODA policy review 2015 establishing dialogue with non-state actors and raising

awareness of issues including graduation from ODA.

• Developed opportunity for Cook Islands to join to Pacific Parliamentary Development Programme

and facilitated mobilisation of funds for women’s economic empowerment and violence against

women activities.

Page 10 of 84

Acronyms ADB Asian Development Bank

BPS Budget Policy Statement

BCI Bank of the Cook Islands

CAC Central Agency Committee

CIG Government of the Cook Islands

CIGFPPM Cook Islands Government Financial Policies and Procedures Manual

CINSF Cook Islands National Superannuation Fund

DCD Development Coordination Division

EU European Union

FSDA Financial Services Development Agency

GDP Gross Domestic Product

GFS Government Finance Statistics

HYEFU Half Year Economic and Fiscal Update

IMF International Monetary Fund

MFEM Ministry of Finance and Economic Management

NSDP National Sustainable Development Plan 2007-11

NZAID New Zealand’s International Aid and Development Agency (now referred to as the NZ

Aid Programme, as managed by the Ministry of Foreign Affairs and Trade)

OPM Office of the Prime Minister

OPSC Office of the Public Service Commissioner

PAYE Pay As You Earn taxation

PEFA Public Expenditure and Financial Accountability

PERC Public Expenditure Review Committee

PERCA Public Expenditure Review Committee and Audit (generally refers to the Audit Office)

RMD Revenue Management Division

RMS Revenue Management System

Page 11 of 84

The Ministry of Finance and Economic Management

Front Row Sitting L-R: Erina Korohina, Rima Moo, Amy Ngatamaine, Amelia Nooapii, Peter Tierney, Andrew Haigh, Richard Neves (Financial Secretary), Taggy Tangimetua, Russell Hynd, Lavinia Tama, Etuatina

Drollett

First Row Standing L-R: Hilary Gorman, Morgan Hanks, Ngapoko Ngatamaine, Maria Ioane, Kurai Foster, Phil Eyre, Caroline Areai, Mareta Katu, Akisi Rokovunisei, Tanga Morris, Mere Charlie, Tereapii Jacob, Tepaeru

Samuela, Amelia Ngatokorua, Tiare Daniel

Second Row Standing L-R: Tai Nooapii, Stephen Matapo, Patrick Parakoti, Vaka Teroi, Elizabeth Harmon, Wayne Robati, Chiavanni LeMon, Helen Turua, Edwina Matenga, Nga Takaiti, Annie Tangimetua, Garth

Henderson, Taina Iro, Miriam Cook, Tuaine Unuia (partially obscured), Pari Teuru, Teina Tairi, Memory Akama, Tearii Maurangi, David Toleafoa, Regina Pritchard (obscured), Tamara File

Back Row Standing L-R: Pokoina Matara, Kevin Hosking, Walter Tangata, Charmaine Dolan, Dennis Heather, James Webb, Enua Pakitoa, Siva Gounder, Terry Piri, Aisake Mafua, Papamama Pokino, Marouna Ioane

Top Row L-R: Adam Sumbak, Sally Thompson

Absent: Tessa Vaetoru, Caroline Wichman, Rufina Daniel, Marian Larsen, Andrew Forbes, Irene Hafoka, Tai Tereapii, Bob Toka, Lafala Turepu, Angelia Williams, Marianna Bryson, Ana Metuarau, Jim Nimerota, Nanise

Okotai, Vanessa Jenner

Page 12 of 84

Part 1: AGENCY PERFORMANCE REVIEW 1.1. Delivery of Government Priorities

1.1.1. National Sustainable Development Plan 2010-2015 Indicators

The National Sustainable Development Plan had 81 indicators for all sectors. Each indicator has a Lead Agency who is ultimately responsible for achieving

the targets. MFEM are responsible for some aspects of Goal 1 A Vibrant Cook Islands Economy and Goal 7, Good Governance.

NSDP Priority Areas and Goals Commentary

1. A Vibrant Cook Islands Economy The MFEM Contribution towards a vibrant Cook Islands economy is a contribution towards macroeconomic stability through a sustainable approach towards fiscal management and ongoing structural economic reform.

MFEM takes an evidence based approach to the provision of economic advice to the Government which focussed on maintaining fiscal discipline, investing in public infrastructure with a positive economic return and ensuring tax policy provides for a competitive tax system which provides adequate revenue for the Crown.

7. Good Governance MFEM has undertaken significant information to collate and disseminate a range of information.

MFEM has led the process of utilising information technology to automate processes, sharing information, make information accessible

MFEM continues to improve accountability and transparency of public financial management 2015 Public Expenditure and Financial Accountability Assessment (PEFA) demonstrates the significant gains which have been made during the period from 2011-2015.

Page 13 of 84

1.1.2. Head of Agency Critical Success Factors

The Financial Secretary, Richard Neves was extended until mid-December 2015, the critical success factors were the ones from the previous contract and

have been reported on below.

Critical Success Factors Commentary

Leading and coordinating the development, review and

implementation of the Department of Finance and Economic

Management policies in line with the National Sustainable

Development Plan (NSDP).

The Ministry achieve this through the membership of the NSDC, and the

development of the Budget which is closely aligned to the NSDP.

Working collaboratively with other agencies and relevant stakeholders

in the development of a Governance Sector Strategy, in particular,

those strategies that are relevant to Finance and Economic

Management.

The Ministry worked closely with a number of agencies in developing the NSMP

and working on the Governance Sector Strategy which is included in the NSDS.

Much of the work relates to improving communications and processes between

agencies which is discussed further on.

Development and Implementation of a National Aid Management

Policy.

The ODA policy was passed in cabinet in September 2011. In March 2013 the

implementation plan was finalised. Progress on the implementation plan is very

positive and we are progressing in each of our stated goals:

Strengthening governance and management of aid effectiveness at all levels.

Strengthening partnerships in the coordination and delivery of aid.

Ensuring accountability of aid to achieving sustainable development results.

A peer review was undertaken in late 2013 and the Ministry is now working

with development partners improving their systems and interaction with

MFEM to improve implementation.

A further review of the ODA policy will commence during 2015/16

Working to resolve financial management issues in the Outer Islands. The Ministry of Finance and Economic Management took over the processing

of Outer Island Accounts on 1 July 2013.

There are some difficulties which are encountered in relation to

communications.

Page 14 of 84

Critical Success Factors Commentary

A new funding formula was finalised in the 2013/14 budget and this has now

been put in to place to accompany the new outer islands administration

framework.

MFEM is now working more closely with outer islands and ensuring that they

obtain accredited accountants to prepare the basic financial material that they

are obliged to provide.

Working collaboratively with the Central Agency partners in pursuing

greater efficiency and effective performance of the Public Service.

A continued focus on the efficiencies of government has seen a great emphasis

on implementing the HRM payroll system and the new cookislands.gov.ck

system, consolidation of an Asset Management system and procurement.

Work has now commenced for centralisation of financial management.

Institutionalize a framework towards reducing the commercial rates

with the banks.

A banking review was undertaken by Sam Knowles and a report provided to

Cabinet and published on July 2012.

A response on behalf of the Government has been provided by Cabinet for the

next phase which involves a number of different agencies.

Interest rates have reduced over time.

Have now commenced a process to investigate the possibility and benefits of

the Cook Islands joining the New Zealand payments system.

Page 15 of 84

1.1.3. Business Plan

1 Fiscal Economic Advice and Management

Key Deliverable 14/15 Manager with

lead

responsibility

Completed Work done to date

Government receives robust and frank advice relating to

fiscal and economic issues. Cabinet rely on the Financial

Secretary/MFEM as its chief financial, taxation and

economic adviser.

Richard Neves Yes Advice continuously provided through individual

briefings with the Minister as well as with the Prime

Minister and the rest of Cabinet.

Minister and Cabinet are well informed regarding the fiscal

and economic position of the Cook Islands Government on

a monthly basis

Richard Neves Yes Cabinet is well informed on the Fiscal Position and

updated reports are provided on the quarterly position

and these are then provided publically. Additionally all

statutory required reports and updates have been

provided , Cabinet are provided with briefings.

A Ministry who is considered the best in the Cook Islands

and the Pacific.

Richard Neves Yes The second PEFA Assessment took place from

November 2014 and the report has been finalised and

is being peer reviewed. Significant improvements have

been made

A reliable management team which drives performance in

the Ministry.

Yes The team meets on a regular basis to coordinate the

efforts of the Ministry.

All Divisions work towards timely and accurate information

being provided. All Divisions working closely in data

exchange and reducing the burdens on private sector and

other Ministries.

Richard Neves Yes There has been considerable amount of work,

particularly in statistics with the new CISDS which is

aimed at using administrative data for the collation of

statistics, reducing the need to go out to businesses

and RMD which will provide online access to the RMS

reducing the burden on taxpayers.

Page 16 of 84


lead

responsibility


A Ministry which supports the policy outcomes sought by

Government by working with Ministries and Cabinet to

ensure that policies undertaken by Government are

financially and economically responsible.

Richard Neves Yes The Ministry has worked closely with the Government

in delivering two fiscally responsible budgets (2014/15

and 2015/16) which meets the government’s

objectives, and also in terms of driving the

development agenda.

Various committees and boards reflect sensible approaches

which are financially sound and which are in broad

coherence with Government policy.

Richard Neves Yes The Financial Secretary continued his role in sitting on

the Boards of the CINSF, the BCI and the FSDA, in those

Boards, he is the Chair of the CINSF.

Page 17 of 84

2 Responsible and effective fiscal and economic management.


lead

responsibility


Improve reconciliation and clearance of suspense accounts on a monthly basis. Teu

Teulilo/

Russell

Hynd

Yes

Establish a policy on arrears to determine accounts that are not paid within 30

days from the date of invoice.

Teu

Teulilo/

Russell

Hynd

No A draft policy has been developed and is currently

going through the approval process

Complete a debt sustainability analysis annually. Teu

Teulilo/

Russell

Hynd

Yes DSA was completed for the 2014/15 Budget and

Half-year Update, including economic projections

of the debt position

Reconciliation of debt system completed on a monthly basis Teu

Teulilo/

Russell

Hynd

Yes

Financial management information system. Phase one: tender and acquire

system and training.

Teu

Teulilo/

Russell

Hynd

No Have commenced a process to understand client

requirements and ascertaining current system

capabilities.

Enhance content and timeliness of Quarterly Reports to stakeholder

requirements.

Teu

Teulilo/

Russell

Hynd

Yes

Complete and submit 2011/2012 crown consolidation for audit. Teu

Teulilo/

Yes CIG Consolidated Financial Statements passed to

the Audit Office on the 19th of December, 2014

Page 18 of 84


lead

responsibility


Russell

Hynd

Complete and submit 2012/2013 crown consolidation for audit. Teu

Teulilo/

Russell

Hynd

Yes Draft CIG Consolidated Financial Statements

passed to KPMG on 6 January, 2015 for quality

assurance and disclosure requirements

confirmation. And provided to Audit on 18 May,

2015. These Draft Accounts are posted on the

MFEM website .

Update the Cook Islands Financial Procedures and Policies Manual to reflect

recommendations of the Public Expenditure and Financial Accountability (PEFA)

assessment conducted in October 2013.

Teu

Teulilo/

Russell

Hynd

Yes

Develop complaints process Teu

Teulilo/

Russell

Hynd

Yes

Include clause into tender documents to identify appeal process. Teu

Teulilo/

Russell

Hynd

Yes

Publish via procurement website to the top 3-5 bidders and prices for

transparency and to avoid perception of conflict of interest.

Teu

Teulilo/

Russell

Hynd

Yes Publish only the successful bidder and not the top

3-5.

Page 19 of 84


lead

responsibility


Table budget 2014/15 in Parliament by 30th June 2014. Teu

Teulilo/

Russell

Hynd

Yes The Budget 2014/15 was tabled and passed in

October 2014. The delay was a result of Parliament

being dissolved in April and the General Elections

being held in July which delayed the budget

process until a Government was formally in place.

Clearly articulate a rule/policy on the administration of the Contingency Fund

(operating and capital)

Teu

Teulilo/

Russell

Hynd

Yes A contingency policy has been developed and

inserted into the procedures manual which applies

to all ministries and crown agencies.

Publish Budget Policy Statement and Half Year Fiscal and Economic Update by

31st December 2014.

Teu

Teulilo/

Russell

Hynd

Yes Note that the Half Year Fiscal and Economic

Update was published before the 31 December as

per the MFEM Act. The BPS was published before

31 of March.

Conduct second PEFA formal assessment by June 2015. Teu

Teulilo/

Russell

Hynd

Yes The second PEFA Assessment took place from

November 2014 the report has been finalised,

preliminary outcomes released and the report is

now being approved.

Preparation of the pre-election Economic and Fiscal Update as per the MFEM

Act.

Teu

Teulilo/

Russell

Hynd

Yes A pre-election Economic and Fiscal update was

published on the 30th April after the General

Elections were announced. Election costings were

also produced for all political parties.

Extending to a four year time horizon, this includes the current budget year and

three forward years.

Teu

Teulilo/

Russell

Hynd

Yes Budget 2014/15 included a four year time horizon

as recommended from the PEFA self-assessment

report.

Page 20 of 84


lead

responsibility


Map the Medium Term Budgeting Framework into functional/sub functional

classification.

Teu

Teulilo/

Russell

Hynd

Yes This was published in Budget 2014/15, along with

classification of functions of Government

(COFOG). The budget demonstrates the ten main

functions as required under the PEFA self-

assessment.

The Budget includes primary services and published annually. (Resources

available to primary service units such as Education and Health).

Teu

Teulilo/

Russell

Hynd

Yes This was included in the latest PEFA report and

both the ministry of Education and Health have

published this information on their websites to

ensure information is available to the wider public.

Publish prior year’s budget out turn. Teu

Teulilo/

Russell

Hynd

Yes This was published in Budget 2014/15 the 2014/15

Half-year Update and the Budget 2015/16.

Establish Internal Audit within MFEM with structured work plan. Teu

Teulilo/

Russell

Hynd

No Tender process has been completed and it is

anticipated that a contract will be awarded in early

2015/16.

Internal audit report on Payroll and procurement system internal control Teu

Teulilo/

Russell

Hynd

Yes Preparation of Terms of Reference to engage

external services to provide Internal audit

function.

Increase the market share of Cook Islands commemorative coins. Teu

Teulilo/

Russell

Hynd

No Working with government of New Zealand on

issues around the Cook Islands numismatic

programme and usage of the Queen's effigy.

Awaiting final guidelines from New Zealand

Implement circulation of a new set of Cook Islands coins by June 2015. Teu

Teulilo/

No All coins have been minted and transported to

the Cook Islands. Launch will be on 29 July 2015

and officially on 4 August 2015

Page 21 of 84


lead

responsibility


Russell

Hynd

Decentralise data input of timesheet information by June 2015. Teu

Teulilo/

Russell

Hynd

Yes With the exception of the Pa Enua, this has been

implemented for ALL Rarotonga based agencies.

Automate tax certificates Teu

Teulilo/

Russell

Hynd

Yes Tax certificates were produced for all public

servants for the 2014 tax year and distributed

and consolidated information provided to RMD.

Self-service access available to all public servants by June 2015. Teu

Teulilo/

Russell

Hynd

Yes With the exception of the Pa Enua, this has been

implemented for ALL Rarotonga based agencies.

Page 22 of 84

3 Efficient administration of taxation, duties and border security


lead responsibility


Tax and customs revenues are collected on behalf of

government in a timely manner.

Andrew Haigh Yes Revenue collected is within 3% of forecast, note

that revenue is subject to economic conditions

and we have only collected 6 months.

A less burdensome process for taxpayers and more efficient

process from MFEM.

Andrew Haigh No Commenced the development of a web-

lodgement system for RMD. User acceptance

testing has been completed and it is anticipated

to go live in early 2015/16 the delay in the

budget passage has led to implementation in

July 2015

Employment of a Tax Outreach officer Andrew Haigh Yes The employment of a Tax Outreach Officer to

implement our new Tax Outreach Program.

Sufficient information to have been collected, compliance

from taxpayers, revenue collected. Process and legislative

changes to enhance revenue collection and efficiencies.

Andrew Haigh Yes Work is of ongoing nature, increased resources

provided in the budget to continue with

compliance efforts. Changes to legislation have

allowed for improved processes around the

provision of RMD numbers to improve

compliance outcomes.

An expanded Tax Information Exchange network with relevant

countries.

Andrew Haigh Yes Positive Phase two report from the Global

Forum. TIEA’s signed with Czech Republic and

Canada.

Effective facilitation of goods and people movement at the

aviation and maritime borders whilst ensuring revenue is

collected.

Andrew Haigh Yes

Page 23 of 84

4 Production and dissemination of relevant statistics


lead responsibility


Statistical information to be delivered in a timely

manner as per the scheduled publication.

Taggy Tangimetua Yes The Statistics Division published 40 series during 2014/15,

these include:

• 12 monthly Tourism and Migration Statistics

• 4 Consumer Price Index (CPI)

• 4 Banking Statistics

• 4 Tax Statistics

• 4 Vital and Population estimates

• 4 International Statistics

• 4 Gross Domestic Product (GDP) and

• 4 Miscellaneous series covering a range of statistics

such as climate, building approvals, aircraft

movement, air cargo, and motor vehicle registration.

Planning and consultation with key stakeholders on

data requirements to achieve national policy

frameworks

Taggy Tangimetua Yes The focus this year has been improving banking and

balance of payment statistics, working closely with FSC

and IMF-PFTAC.

Participation in IMF General Data Dissemination

Systems( workshop and mission planned for May 2014,

July 2015)

Taggy Tangimetua Yes Following on from the implementation of GDDS in May

2014, Statistics is preparing for an IMF Mission in July

2015 to check progress

Explore other avenues of data dissemination such as

workshops, brochures/ pamphlets; websites, etc.

Taggy Tangimetua Yes Work has commenced on an information brochure to

improve community knowledge about statistics, leading

to timely dissemination of results

Finalising the statistical data audit to be included in the

National Strategy for the Development of Statistics

(NSDS)

Taggy Tangimetua Yes Have completed a draft of the NSDS plan following

extensive stakeholder consultations. Following from that

a new statistics Act will be drafted following approval of

the statistics policy

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5 Effective and efficient financial and program management systems for monitoring of ODA


lead responsibility


A transparent and robust financial and activity

management system

Peter Tierney No Completed Activity Management System (Te Terai Vaka),

implementation currently in roll out. Now in the final stages of

ensuring that the financial and project components of the

Dynamics system are fully operational.

Improved transparent access to development information

to allow better planning, monitoring and evaluation.

Peter Tierney No Accounting and financial reporting moved to Treasury in Oct

2014.

Training held for Dynamics. Implementation and some training

on Te Tarai Vaka. All reports being published on MFEM website

and where appropriate in media. Implemented quarterly

financial reporting with development partners. Still having

issue with smaller development partners.

Accurate, timely and quality, information that meets the

needs of stakeholders.

Peter Tierney No Te Tarai Vaka policy, process and templates available online.

Project financial reconciliations through monitoring and

quarterly financial reporting.

Embed Activity Management System across government

to ensure effective delivery.

Peter Tierney Yes Held stakeholder workshops and beginning to pilot Te Tarai

Vaka. Has been utilised for making assessments on the water

tank subsidy programme, Te Mato Vai and the Southern Group

RE project.

Implement NIE roadmap Peter Tierney Yes Application submitted 5 Dec 2014 and currently being

reviewed.

Stakeholder Communication plan in place Peter Tierney No Draft initially consulted and major revisions required.

Increase ODA conversion rate through accurate

forecasting and reporting

Peter Tierney Yes The 2014/15 estimated conversion ratio of budget to spend

was 58 per cent with total recorded ODA spend in order of $37

million from a budgeted $63 million.

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lead responsibility


Deliver successful annual Development Partner Meetings Peter Tierney No Development Partner Meeting conducted successfully.

Engaging with development partners on policy challenges

and higher level modalities

Peter Tierney No Te Tarai Vaka established, a higher modality partnership has

been drafted for final approval by the Government of New

Zealand to govern the bilateral programme from 2015/16 to

2018/19.

Increase engagement with national development partners

(e.g. private and civil society organisations) utilising CSO

engagement model

Peter Tierney Yes Consulted on stakeholder engagement plan, increased

engagement with Chamber of Commerce. Significant

consultation and engagement regarding DPM. Held Te Tarai

Vaka session for CSOs and private sector organisations.

Increasing use of national systems through harmonised

development activity

Peter Tierney No Te Tarai Vaka development and roll out. Quarterly reporting.

Relevant findings from Peer Review promoted and

implemented where possible. Programmed GEF-6 Funds into

existing RE program.

Strategic advice on Official Development Assistance

available to stakeholders including national

implementation risk assessments

Peter Tierney No Risk assessment is a key component of Te Tarai Vaka which

requires some embedding. ODA Policy Review delayed.

Transition from traditional bilateral arrangements (which

are likely to be reduced) to further utilise regional support

mechanisms

Peter Tierney No Now working with the UN on harmonising the efforts of the

various UN agencies so that UN activities are delivered as one.

Not in MFEM’s direct control and still awaiting feedback from

the UN.

Embedding Development Effectiveness principles such as

ownership, alignment, harmonisation, managing for

results and mutual accountability

Peter Tierney No Continuing to communicate Peer Review and PEFA

recommendations to development partners and within the

public sector and other stakeholders.

Planning for an UNDAF review, JCFD review held during DPM.

Development and roll out of Te Tarai Vaka.

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1.1.4. Business Plan Key Achievements and Challenges By Output

OUTPUT 1: FISCAL AND ECONOMIC ADVICE MANAGEMENT

Back: Richard Neves, James Webb

Front: Memory Akama, Marona Ioane,Teina Tairi, Etuatina Drollet

In the 2014/15 business planii MFEM outlined that the strategic objectives to be achieved through

Output 1 were:

• a well led Ministry, where staff are confident in their capacities and aim to be the best they can

be.

• the Ministry provides information in a timely manner to all stakeholders

• a Ministry that drives responsible policy outcomes from Government

• participation on various committees and Boards adds value and ensures coherent policies across

government and SOE’s;

The outcomes arising from Output1 are predominantly driven by the activities of the Office of the

Financial Secretary in cooperation with all the Divisions within MFEM.

Achievements:

• Successful management of the caretaker processes around the management of public finances

and the costing of party manifesto’s during the 2014 general election and subsequent period of

uncertainty.

• Commencing a process to review the current financial payments system in the Cook Islands with

a view to reducing the overall cost of banking services in the Cook Islands.

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• Driving a culture of information sharing within the Ministry and establishing the MFEM website as

a robust source of information within the Cook Islands public sector.

• Advice was continuously provided through individual briefings with the Minister as well as with

the Prime Minister and the rest of Cabinet.

• Cabinet was well informed on the Fiscal Position and updated reports are provided on the

quarterly position and these are then provided publically. Additionally all statutory required

reports and updates have been provided, Cabinet are provided with briefings.

• The second PEFA Assessment took place from November 2014 and the report has been finalised

and is being peer reviewed. Significant improvements have been made

• The team meets on a regular basis to coordinate the efforts of the Ministry.

• There has been considerable amount of work, particularly in statistics with the new CISDS which

is aimed at using administrative data for the collation of statistics, reducing the need to go out to

businesses and RMD which will provide online access to the RMS reducing the burden on

taxpayers.

• The Ministry has worked closely with the Government in delivering two fiscally responsible

budgets (2014/15 and 2015/16) which meets the government’s objectives, and also in terms of

driving the development agenda.

• The Financial Secretary continued his role in sitting on the Boards of the CINSF, the BCI and the

FSDA, in those Boards, he is the Chair of the CINSF.

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OUTPUT 2: RESPONSIBLE AND EFFECTIVE FISCAL AND ECONOMIC MANAGEMENT

Back: Teina Tairi, Vaka Teroi, Pari Teuru, Terry Piri, James Webb, Siva Gounder, Aisake Mafua, Tearii

Maurangi,

Middle: Memory Akama, Caroline Areai, Edwina Matenga, Miriam Cook, Mary Charlie, Tiare Daniel,

Taina Iro,

Front: Akisi Rokovunisei, Lavinia Tama, Russell Hynd, Tepaeru Samuel, Tereapii Jacob (Missing: Lafala

Turepu, Ana Metuarau)

In the 2014/15 business planiii MFEM outlined that the strategic objectives to be achieved through

Output 2 were:

• the efficient and effective management of public funds and debt through greater automation and

improved institutional processes;

• to be recognised in the region as a leader in public financial management;

• the reporting of financial information to Government, Heads of Ministries and the public is

comprehensive and easy to comprehend at various levels of knowledge;

• the reporting of financial information to Government on a timely manner;

• to improve government procurement systems and processes

• the Budget of the Government is regularly presented in a timely manner to Parliament to fit in

with the new Finance and Executive Committee’s timeframe for improved scrutiny.

• a budget process which is considered and linked to the National Sustainable Development Plan

which allows for greater community input.

• a holistic annual budget document covering the major activities of Government for the budget

and forward estimates and which links back to the NSDP and Budget Policy Statement.

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• effective systems of internal controls for salary and non-salary expenditure across Government.

• Sufficient Cook Islands currency to cover economic requirements and increasing revenue above

the previous averages from numismatic sales.

• effective management of –Payroll system across Government.

The outcomes arising from Output 2 are predominantly driven by the activities of the Treasury

Division, which is comprised of four sub-divisions:

• Crown Accounting - The recording function of the Ministry, which consists mainly technical

accounting staff with their main role is to ensure that reporting is accurate so that decisions are

made on reliable information.

• Budget and Economic Policy - the whole of government budgeting function working in

conjunction with Output 1;

• Funds Management – the payment arm of the Ministry, managing the Crown’s cash-flow

requirements, bank deposits and the debt management system.

• Payroll – processing of the public sector payroll.

This output is a very traditional function found within any government system, much of the reforms

and changes that have been made resulted from an initial Public Expenditure Framework Assessment

in 2011iv, which led to a roadmap of actions to be undertaken, these included:

• improving measures of accountability across government;

• further reducing systemic vulnerabilities to corruption;

• better transparency and more regular provision of key fiscal information to the general public;

• greater involvement of the legislature in scrutinising public finances and the annual budget law;

• improved control in budget execution; and

• improving financial management capacity across government

A more thorough review of these can be viewed through the MFEM website. A follow up PEFA was

conducted in a two phase process, which encapsulated an initial self-assessment which was completed

in April 2014 followed by a formal assessment which was completed in December 2014. The high level

outcomes of the PEFA assessment was circulate publically in February 2015 during the 2015

development partners meeting.

In February 2015 both Teu Teulilo (Treasury Operations Manager) and Elizabeth Tommy (Crown

Accounts Manager) who had a significant input into the overall Division. Teu was replaced by Russell

Hynd in May 2015, and Elizabeth by Siva Gounder in June 2015.

Achievements:

The completion of a Public Expenditure Framework Assessment (PEFA) in November 2014 following

an initial self-assessment process. The final version is now working through the IMF internal systems.

The final report is expected to be available for discussion at Development Partner Roundtable in

2015/16.

The Preliminary outcomes have been made available for some time and were initially presented in the

context of the Development Partners Meeting in February 2015, significant improvements in the

overall PFM framework from 2011 were observed, and these include:

• budget credibility,;

• arrears monitoring;

• comprehensiveness of budget documentation;

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• transparency of allocation to sub-national governments;

• public access to reports on resources received by service delivery units;

• adherence to the budget preparation calendar;

• debt sustainability analysis;

• transparency of taxpayers obligations; effectiveness of taxpayers registration;

• collection system, frequency and timeliness of debt reporting;

• payroll controls;

• publication of bid opportunities and contract awards;

• completeness and timeliness of bank reconciliation processes; and

• completeness of financial statements, and consistency of accounting policies.

Implemented the requirements of the newly passed Loan Repayment Fund Act., which included:

• the completion of a debt sustainability analysis which was included in the 2014/15 Budget, the

2014/15 Half-year Update and the 2015/16 Budget, including economic projections of the debt

position of the Cook Islands.

• following a tender process the engagement of an external service provider to assist with the

management of the fund (ANZ and Bancorp Treasury Services);

• preparation of a report on the sustainability of the borrowings of $12.9 for the renewable energy

project in the Southern Cook Islands:

Reviewed content of the Quarterly Reports to meet stakeholder and timing requirements. Once

reports were complete media was used to communicate the outcomes and they were posted onto

the MFEM web site.

A change in approach regarding the publication of consolidated financial statements of the Crown.

MFEM will now consolidate the financial statements, and publish the draft which is then provided to

the Audit Office for review. In this regard the following were achieved:

• Successful audit signoff of 2011/12 Crown account on 29 April, 2015.

• Draft Consolidated Financial Statements for the 2012/13 year were passed for audit on the 18th

May, 2015. These Draft Accounts will be posted onto the MFEM website for information;

• The 2012/13 Audit is in progress as at June 2015 and as per the audit arrangement letter

consolidated Crown financial statements are scheduled to be signed off on 15th November, 2015.

Undertaking a major update of the Cook Islands Financial Procedures and Policies Guidelines Manual

(CIFPPG) to reflect the recommendations of the Public Expenditure and Financial Accountability (PEFA)

assessment completed, major changes included:

• Part D Section 4 Financial Reporting;

• Part D Section 10 Ministerial Offices Handover Process ;

• Part D Section 20 Cash Re-call;

Meeting the legislative requirements around budgetary matters following the 2014 general election

were met, these included the:

• tabling of the 2014/15 Budget which was passed in October 2014 (delays resulted from the

dissolution of Parliament April and the General Elections being held in July 2014 which delayed

the budget process until a Government was formally in place;

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• publication of the Half Year Fiscal and Economic Update was published before the 31st December

as per the MFEM Act. The BPS was published in February 2015, well ahead of its due date 31

March 2015; and

• tabling of the Budget 2015/16 Budget which was passed in June 2015.

Implemented changes on the framework around the budget and forward estimates which are

provided in the budget documentation, this included:

• presenting estimates of revenue and expenditure on a four year time horizon (as recommended

from the PEFA self-assessment report Both the 2014/15 and 2015/16 budget);

• presenting the estimates in a functional/sub functional classification under the UN functions of

Government (COFOG). The budget demonstrates the ten main functions as required under the

PEFA self-assessment.

• identifying resources available to primary service units such as education and health adopted from

the 2014/15 budget onwards. Both the Ministry of Education and Health have published this

information on their websites to ensure information is available to the wider public.

Making a number of improvements to the procurement processes in the Cook Islands to assist

agencies in strengthening internal processes, improve value for money outcomes and also provide

greater transparency and accountability around procurement outcomes:

• An updated policy was approved December 2014 the “Purchase and Sale of Goods and Services

Cook Islands Government Policy” which applies to all Ministries, Departments and Agencies

(MDAs);

• The development of a procurement complaint process which can be found under section 41-43 of

the updated policy that now provides guidance on how to manage complaints;

• The recruitment of a new Procurement Officer recruited in late 2014/15, with the specific

responsibility to provide sound advice with regards to government procurement process,

planning, implementation, management and best practice to MDAs.

• Revamping of the Cook Islands procurement website portal to enable improved information on

current opportunities and actual outcomes;

• Releases of revamped and consolidated set of guidelines/templates on the underlying tender

processes which include both tender document and contract templates, these documents are

used only as templates to assist MDAs with preparing appropriate tender documents and to

comply with procurement requirements but can be amended to suit their particular purchase or

sale.

Fully implementing the new Pay Global system across the agencies of Government, major

achievements included:

• the full decentralisation of data input of timesheet information by June 2015. With the exception

of the Pa Enua, this has been implemented for all Rarotonga based agencies;

• the full automation of generation of tax certificates for all staff in the Cook for the 2014 tax year

in January 2015, tax certificates were generated and circulated to staff either through the email

system directly or through the nominated central point in the agency (if they were not on the

cookislands.gov.ck network);

• the implementation of E-access to Pay Global implemented for all staff in the Cook Islands

Government except the Pa Enua. E-access allows staff to login and view personnel information

particular to them, for example, leave balances.

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Continuing on with the management of numismatic and circulating currency:

• processing the approval of 95 designs at an estimated value of $0.35 million of revenue for the

Cook Islands;

• working with the Government of New Zealand on processes and systems around the design and

approval process for the design of coins by the Realm of new Zealand;

• working with the Royal Australian Mint for the reintroduction of Cook Islands circulating

currency; and

• launching of the new circulating currency on the 4 August 2015 to coincide with the 50 years of

self-government celebrations.

Challenges:

The lack of depth of financial management skills across the public sector is concerning, the

decentralised approach taken by the Cook Islands in regard to financial management is sub optimal.

Across the public sector there is an estimated 60 full time equivalents (including some Treasury staff)

who are devoted to financial management at an estimated cost in the range of $1.2 to 1.5 million.

Information technology and capability in the Pa Enua remains and ongoing issue , the 2013 Crown

Accounts are currently with Auditors who have highlighted the ongoing issues with Pa Enua accounting

practices.

Accounting systems and approaches continue to differ throughout the Public Sector which makes

building consistent procedures and training staff difficult, recent changes such as a standard chart of

accounts have improved this, but it is a fundamental skill base issue.

Recruitment of qualified experienced positions is difficult in the Cook Islands, firstly there is a lack of

highly skilled workers and the rates of pay within the public sector remain uncompetitive.

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OUTPUT 3: EFFICIENT ADMINISTRATION OF TAXATION, DUTIES AND BORDER SECURITIES

From Left to Right Back Row: Papamama Pokina, Pokoino Matara, Patrick Parakoti, Stephen Matapo,

Wayne Robati, Walter Tangata, Gina Pritchard, Irene Hafoka, Marouna Ioane.

Middle Row: Maria Ioane, Elizabeth Harmon, Kuria Foster, Ngapoko Ngatamaine, Adam Sumbak,

David Toleafoa.

Front row: Chiavanni Le’Mon, Rima Moo, Amy Ngatamaine, Amelia Nooapii, Nga Takaiti, Andrew

Haigh (Manager) Phillip Eyre, Sally Thomson

Absent: Andrew Forbes, Rufina Daniel, Caroline Wichman, Bob Toka (Aitutaki Office)

In the 2014/15 business planv MFEM outlined that the strategic objectives to be achieved through

Output 3 were:

• improving the efficiency of collecting taxes and import duties through greater improvements in

automation with other agencies;

• ensuring taxpayers were aware of their obligations and their responsibility to comply and pay

taxes and duties on time.

• ensuring secure borders where movement is facilitated quickly with minimal inconvenience whilst

ensuring revenue is collected.

• Robust and credible information to Government on revenue collection performances

The activities of the division are directly aligned with Output 3 is predominantly driven by the Revenue

Management Division, which is comprised of 2 sub divisions:

• Taxation – Revenue Management Division is responsible for the collecting taxes and duties on

behalf of the Crown. We administer the Income Tax Act 1997, Value Add Tax Act 1997

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• Customs – Customs Cook Islands is responsible for protecting our borders ensuring that the

movement of goods, our people, our natural resources, our plants & animals are safe and healthy

in line with the standards set out in the Customs Legislation.

The Output focuses on the collection of direct and non-direct taxation revenue on behalf of the Crown

as dictated by the relevant legislation in such a way that all taxpayers are treated fairly and equally. In

2014/15 the Division is estimated to have collected approximately $105 million of revenue on behalf

of the Crown.

The Division provides a number of services including advice to taxpayers on their legal responsibilities

and how to comply with these. They also assist in the calculation and assessment of taxes, collection

of taxes, issuance of tax refunds, the conducting of audits, and the providing of advice to Government

on the effectiveness of tax law.

The Division works on the basis of the charter it has with taxpayers, which it outlines the rights and

obligations as a taxpayer which include:

• how the staff in the Division will work with the taxpayer;

• the reliability of advice and information;

• ensuring confidentiality and privacy;

• applying a consistent and equitable approach; and

• ensuring people are aware of their rights and obligations.

Much of the work in RMD has been driven by the need to:

• implement from actions which were contained in the 2013 Tax Review to automate and simplify

the system and ensuring that the Cook Islands has a competitive regime which remained simple

and equitable; and

• continue efforts that ensure that the Cook Islands meets its international obligations in regard to

having mechanisms in place for the appropriate exchange of information with other jurisdictions.

Up until 30 June 2015, 29 of the 31 recommendations have been implemented. The only outstanding

actions were:

• The tax treatment of superannuation be considered as a stand-alone review.

• E-filing of tax returns and payments to be made available by 1 January 2015.

• On 1 August 2015 phase one for online e-filing of PAYE/VAT returns and payments will go live.

• By 29 February 2015 Phase two for Individuals and Company returns and payments will go

live.

Achievements:

During 2014/15 a range of further income tax amendments enacted, these included:

• modifying the income tax scales to apply from 1 January 2015;

• adding that payments received under the Welfare Act 1989 is employment income;

• on 8 October 2014 legislation was enacted to refund tax collected from recipients of New Zealand

Superannuation;

• modifying the mandatory requirements for Banks to acquire RMD numbers on behalf of all; and

• clarifying beneficiaries of international trusts and their taxability in the Cook Islands.

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The Cook Islands has continued to work with global authorities in a multilateral and bilateral way to

conform to the standards around the exchange of tax information. The Cook Islands has focussed on

working with the OECD global forum to address the risks to tax compliance, the Cook Islands is one of

the jurisdictions that had agreed to implement transparency and exchange of information for tax

purposes.

• During 2014/15 the Cook Islands worked with the Global Forum to examine the legal and

regulatory framework for transparency and exchange of information (EOI) in the Cook Islands as

well as the practical implementation of that framework. The subsequent report which was made

publically available in mid-March 2015 outlined the Cook Islands practical experience with

exchanging information. vi

• Pleasingly, the report rated the Cook Islands as being largely compliant, and that in particular the

Cook Islands has adequate laws requiring the availability of and access to information, and that in

practice has effective systems in place for the monitoring and enforcement of these obligations.

• The Global Forum recommended that the Cook Islands clarify its legislation governing the

maintenance of underlying accounting records and to monitor the effectiveness of the new

accounting record keeping obligations. The amendments that the Financial Services Development

Authority (FSDA) had to make were to the Foundations Act, and other Acts. The second part of

the recommendation was for RMD to continue to handle its TIEA request in a timely manner,

which we are continuing to do.

• Additionally, 20 tax information exchange agreements have been signed. South Africa and Italy

came into force early 2015. The outstanding four countries that have yet to come into force are

Canada, Czech Republic, Greece and Faroe Islands.

• It is expected that a TIEA will be signed with Spain early in 2015/16 and work has commenced on

a TIEA between the Cook Islands and Portugal.

In continuing to improve the transparency and consistency on issues which require clarity the Collector

provided a ruling of when withholding tax vii should be deducted from royalty payments made to non-

residents. RMD have now issued four rulings, these are as follows:

• accommodation provided to employees;

• taxable / non-taxable allowances;

• taxation of land transactions; and

• withholding tax on royalty payments

Amendments to the Customs regulations were made to increase the duty rates on cigarettes and

tobacco and passed by an Order in Executive Council on 1 July 2015. Changes to legislation around

the production of certificates of origin were prepared but remain at Parliament at this stage.

Successful completion of the Outer Islands Marine Reporting Pilot Project

Ongoing implementation of the RMS user online interface. The project which will see the initial phase

implemented in early 2015/16 will allow tax agents to submit on behalf of their clients their monthly

Pay as You Go and VAT returns, and annual employer PAYE reconciliations on line. Tax agents will also

be able to view their clients tax status online. At the same time banks are now establishing online

payment capacity for electronic payments of amounts due. Online user was commenced in late June

2015. It should be noted that are around 1,500 VAT registered.

Tax Audit training delivered to staff

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Risk based auditing training module has been delivered to all of audit and in some parts to Debt and

counter staff. This took approximately 10 hours with a 33 page training guide developed by Gina

Pritchard.

The training packages for:

• Information requests section 220

• Access to inspect documents section 219

• Income tax risk reviewing

• VAT risk reviewing

• Transfers to offset arrears; and

• Compliance Plan

• The Compliance Plan training will be delivered on 9th July 2015. VAT, Income Tax risk

reviewing and transfers to offset arrears is due to be delivered during the week ending 17th

July 2015.

• Information request training - to be delivered week ending 24th July 2015

• Access to inspect documents - to be delivered week ending 31st July 2015

Implementing the legislative changes to the taxation arrangements on New Zealand Superannuation

which had the effect of exempting New Zealand Superannuation as income up until 31 December

2012. As at 30 June 2015, there were 244 active pensioners in the Cook Islands, 152 were voluntarily

complying and 30 remained to be located, and work was continuing on with a further 62

Superannuintants who were not complying (around 25 per cent).

Introducing the Tax Outreach Service within RMD.

The new outreach officer has been actively involved in developing an information package to inform

the public of the Tax Advisory services available and the contact numbers to use. The information

was delivered around the business community and market vendors to promote the Tax services

available. The outreach office,

• Is mainly dealing with small businesses.

• New sole traders tax compliance issues from what do to I need to do,

• Becoming a pensioner for the first time.

• Withholding tax issues from account in the name of infants etc.

• Developing the knowledge in the e-file system so that information can be rolled out to the tax

agent first and working with these groups to easy transition.

More and more of the public are seeking her assistance council to assist in their individual tax

enquiries. Having such a position within the Tax division has proven to be a beneficial addition.

Challenges:

Distance with outer islands – physical distance makes the provision of tax and Customs services, plus

auditing costly and time consuming in the outer islands.

Automatic Exchange of Information (AEOI). As a background, countries around the world are engaging

in the AEIA to tackle offshore tax evasion and other forms of noncompliance. The OECD has been

actively facilitating AEOI by creating the legal framework, developing technical standards, providing

guidance and training. It is widely practised and is a very effective tool to counter tax evasion and to

increase voluntary tax compliance. The framework of AEOI is based around the US model that was

enacted in 2010 (FATCA) requiring withholding agents to withhold 30 percent of gross amounts of

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certain US connect payments made to foreign financial institutions unless financial institutions agree

to perform specific due diligence procedures to identify and report information about US persons that

hold accounts with them to the US tax authorities. Many institutions have opted to implement FATCA.

Financial institutions in the Cook Islands that hold accounts for US citizen are required to put the

systems in place to provide the FATCA related information VIA their local Tax Authorities) unless

prearrangement agreements have been made for them to send the information directly to the US.

There are approximately 40 to 60 countries that have agreed to participate with the FIRST AEOI to

take place on 1 September 2018.

Based on the model template of the Netherlands presented in Manila in April 2015 the challenges for

the Cook Islands to implement the Common Reporting Standard (CRS) are as follows,

• legislation – Privacy impact assessment - Data protection provisions – Confidentiality and data

safeguards – non reporting Financial Institutions provisions – voluntary disclosure - Data quality –

definition of fiscal residency.

• Receiving the information from Financial Institutions (FI).

• Compliance – How to involve each FI in the system.

• Receiving information from jurisdictions – use for pre filled tax returns.

• Organisational aspects – Who will do what when project ends: audits, mandates, monitoring,

notifications etc.

• Transmission format.

• CRS guidance, ask and engage with industry.

Adopting a readymade system as undertaken by the Netherlands model may cost about $800K plus

ongoing Service Agreement fees or implementing a shared system between partners is preferred.

Ongoing compliance issues

There is a continual need to improve voluntary compliance and increase the revenue performance in

areas where we see the most risk and want to focus on the following risk groups in the next year,

these would include:

• Accommodators;

• Lessors;

• fishing industry;

• PAYE avoiders and defaulters (employer);

• market vendors;

• trade people operating outside the system;

• new businesses ;

• tax avoidance structures; and

• NZ Superannuitants.

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OUTPUT 4: PRODUCTION AND DISSEMINATION OF RELEVANT STATISTICS

Back Row: Kevin Hosking, Tuaine Unuia, Enua Pakitoa,

Front Row: Annie Tangimetua, Mareta Katu, Taggy Tangimetua (Manager), Tanga Morris, Amelia

Ngatokorua

Absent: Jim Nimerota, Veia Teio (currently at USP)

In the 2014/15 business planviii MFEM outlined that the strategic objectives to be achieved through

Output 4 were:

• ownership of a credible statistical series of data which is produced in a timely fashion and which

is recognised as the primary source of factual information of the Cook Islands.

• improved decision-making and enhanced productivity within the Division

• productivity of division enhanced

• improve co-ordination with line ministries producing statistics

The outcomes arising from Output 3 are delivered by the Statistics Division which is the country’s

main source of national official statistics. Statistics produced by the Division play a direct and

significant role in the formation and monitoring of government policies. The principle functions of

the Statistics Division are to:

• collect, compile, analyse, abstract, and publish statistics on the Cook Islands economic, financial,

production, environmental and social matters;

• make or construct statistical estimates, forecasts, projections and statistical models;

• define, lay down, and promote standard concepts, procedures, definitions and classifications for

use in official statistics; and

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• to inform other government departments on the suitability of statistical projects initiated or

carried on by them.

Most of the statistics found on the MFEM website are collected and compiled in the Statistics

Division while some have been collected from other sources in a form ready for publication. Where

other agencies are involved, this is cited.

Achievements:

The Cook Islands Strategy for the Development of Statistics (CSDS) report was completed and action

plans costed. The purpose of this strategy was to guide the production and dissemination of reliable

official statistical information in a timely manner which will contribute to the development of the

nation, in particular it:

• responds to the needs for information of planning authorities;

• improves macro-economic and financial management by better reflecting the structure and

tendencies of the economy; and

• provides improved information for users in general.

The CSDS has five key objectives, they are to:

• improve the flow of information among users and producers of statistics;

• develop and strengthen legal and policy responsibility for the Cook Islands NSS;

• develop and strengthen statistical capacity in the NSS;

• provide a framework for monitoring and evaluation for national planning processes (this includes

reporting mechanisms to national, regional and international conventions); and

• provide strategic directions and appropriate mechanisms for guiding and accelerating the

development of sustainable statistical capacity.

The new Statistics Bill 2015 has been drafted after a period of consultation with stakeholders. The

Statistics Act Amendment Bill will update the 1966 Act to reflect the data needs, collection modalities

and governance mechanisms for the Cook Islands and is based on international best practice. The

‘data revolution’ as well as the technologies for collecting and analysing statistical data and

information have evolved to levels which were not envisaged over fifty years ago. The amendments

foremost protect and safeguard the rights of individuals to the confidentiality of information collected

under the authority of the Government Statistician, while allowing for the use of the many ‘digital’

forms of data now available to compile official statistics. The bill also increases the penalties for non-

compliance and refusals to provide the statistical information requested by the Government

Statistician.

The most significant amendment to the legislation is the formation of a Statistics Advisory Council,

which will be responsible for oversight of the official statistics produced by all agencies in the national

statistical system.

The Statistics Division published 40 series during 2014/15, these include:

• 12 monthly Tourism and Migration Statistics

• 4 Consumer Price Index (CPI)

• 4 Banking Statistics

• 4 Tax Statistics

• 4 Vital and Population estimates

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• 4 International Statistics

• 4 Gross Domestic Product (GDP) and

• 4 Miscellaneous series covering a range of statistics such as climate, building approvals, aircraft

movement, air cargo, and motor vehicle registration.

The continued effort to enhance the international reputation, recognition and achievements of the

Division, these include the

• Chief Electoral/Government Statistician - only pacific Islander to receive invitation to attend and

assess the British elections

• Inclusion of the Statistician on regional coordinating bodies, including the:

- Vice Chair to the Pacific Statistics Steering Committee (PSSC)

- Chair to Administrative Data Working Group (ADWG)

- Pacific Island Australia New Zealand Electoral Administrators Advisory Group

- Civil Registration Vital Statistics (CRVS) Committee Member

• Jim Nimerota and the only Pacific Statistician to receive United Nations Bowen Memorial prize for

most outstanding performance on the 4 months SIAP Official Statistics training course.

Challenges:

The Statistics Division also provides underlying support for other functions of government. There is

always the need to balance the core statistical business processes with parliamentary, referendum

and local government elections.

NSDS put on hold for five months due to the NSDS coordinator travelling overseas for Statistical

Training.

The Household Expenditure Survey is a crucial piece of economic information which is required for

ongoing policy formulation. Whilst there is a general understanding of the importance of the

census, little understanding exists around the Household Expenditure Survey. Funding for the survey

will need to be sourced from development partners unless a decision is made to undertake census’

at longer intervals.

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OUTPUT 5: DEVELOPMENT COORDINATION

Back: Tai Nooapii, Hillary Gorman, Charmaine Dolan, Tamara File

Front: Erina Korohina, Morgan Hanks, Peter Tierney

Absent: Vanessa Jenner, Nanise Okotai

In the 2014/15 business planix MFEM outlined that the strategic objectives to be achieved through

Output 5 were:

• the effective and efficient financial and program management systems for monitoring of ODA;

• engagement with local and international development partners;

• institutional arrangements which oversee Official Development Assistance is coordinated,

effective and adding value;

• strengthening regional relationships; and

• ensuring ongoing development effectiveness.

The outcomes arising from Output 5 are delivered by the Development Co-ordination Division. The

Division is directed by the Cook Islands Official Development Assistance (ODA) Policy and reports to

the National Sustainable Development Commission (NSDC).

The ODA policy states that the achievement of the Cook Islands development outcomes will be

supported by the effective and efficient use of ODA aligned to the National Sustainable Development

Plan (NSDP). The Division fosters relationships with a broad range of development partners to broker

coordinated arrangements. These activities are increasingly delivered through diverse partnerships at

a variety of levels including local government, civil society, private sector and national government

agencies.

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The Division seeks to provide high quality development advice to partners including Ministers,

government agencies, committees, community groups, private interest groups and donors. The

Division hosts the country liaison office of the Asian Development Bank and contributes to the

development of concessional loans and blended financing arrangements with other partners like

European Investment Bank and Development Partners like the People's Republic of China.

Achievements

Continuing a trend of improved development programme execution. The 2014/15 estimated

conversion ratio of budget to spend was 58 per cent with total recorded ODA spend in order of $37

million from a budgeted $63 million.

• The equivalent comparison for 2013/14 was 37 per cent, 2013/14 48% (adjusted from 54% after

audit).

Working with OPM to programme the Cook Islands allocation in 6th Global Environment Fund round

with unspent Japanese tied aid (PEC), the European Energy Facility grant and ADB borrowings existing

Renewable energy project for the Southern Cook Islands increasing project budget to $33 million.

Developed draft grant funding proposal with the Government of New Zealand combining activities (30

million over 3 years 2015-2018) through a higher order modality partnership and also creating

resources for public sector strengthening.

Developed Te Tarai Vaka (the Cook Islands Activity Management System) polices, tools, guidelines and

templates . Te Tarai Vaka policy, process and templates available online at www.mfem/ams.gov.ck.

Held stakeholder workshops and began pilot of Te Tarai Vaka on New Zealand funded activities.

Contributed to continued momentum of the Te Mato Vai project execution by facilitating contract

variations with CCECC and KEW, providing project and donor reporting and organising governance

group meetings.

Achieved milestone of installing 1,700 water tanks through the community subsidy scheme.

Converted Chinese pledges including heavy machinery ($7 million) and pearl equipment ($1 million)

and facilitated new concepts for agriculture ($1 million, in delivery) and Apii Nikao school construction

($10 million, final negotiations).

Submitted application for MFEM accreditation for direct access to the United Nations Adaptation Find

(5th Dec 2014) and engaged in review process.

Mobilised majority of funding for pearl programme and established working partnership with Manihiki

Islands Government and stakeholders that will enable Ministry to exit from project.

Co-developed vision (launched February 2015) for agricultural development with MOA and FAO in

order to encourage focus and scale up of resourcing for sector.

Implemented new policy of quarterly financial reporting from development partners for spends on

Cook Islands behalf. New Zealand, ADB, UNDP and European Union started reporting.

Improved integration of Dynamics project module with Treasury financial system by adapting software

to specific needs of managing development activities and organising staff/administrator training and

transferring accounting and financial reporting to Treasury (Oct 2014).

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Conducting a successful 2015 Development partner meeting held in February 2015 with Mitiaro visit.

New, more inclusive partner meeting format developed with a mix of workshops and formal reviews

(NZ, UN, Water and Sanitation sector.) Increased engagement with Chamber of Commerce, private

sector organisations, nongovernmental organisations and government departments.

Conducted the development awards, acknowledging those people who have greatly contributed to

the ongoing development of the Cook Islands.

Raised awareness of issues in small grants programs for pa enua and community development.

Simplified India grant fund templates, organised briefing sessions for small grant managers and

Parliament.

Launched the ODA policy review 2015 establishing dialogue with non-state actors and raising

awareness of issues including graduation from ODA. Introduced new concepts such as total support

for development and opportunity to shift in focus to south-south cooperation, climate finance and

domestic resource mobilisation as a strategy to graduation from ODA.

Developed opportunity for Cook Islands to join to Pacific Parliamentary Development Programme and

facilitated mobilisation of funds for women’s economic empowerment and violence against women

activities.

Challenges:

Maintaining knowledge and practice of relevant effective development practice across public sector

in order to continue to improve conversion ratio in the context of staff turnover in DCD.

Finalising negotiations for a final higher order modality with New Zealand.

Completing integration of Te Tarai Vaka with national systems. This is delayed by need to map better

linkages to budget (financial approvals) and develop quality control processes (IC, NSDC approval).

In addition, steps such as risk assessment and formal appraisal are new and require more time to

inform actors and negotiate take on new responsibilities to ensure application of proposed policy

(e.g. social and environmental safeguards). Formal policy decision to adopt the system has been

wrapped into the ongoing ODA policy review process.

Coordinating and holding regionally funded programmes accountable. Quarterly reporting from

regional partners such as SPREP, SPC, FFA, regional programmes of UN agencies has not been

successful. UNDP is reporting on one project SRIC. Other UN agencies directly managing programs on

behalf of the Cook Islands (i.e. WHO, FAO) are not yet reporting although there is an agreement in

principle to progress towards the Delivering as One approach.

Ensuring accuracy of financial data, it took longer than expected to develop useful reports and ensure

information from dynamics project module reconciles with the general ledger. All transactions back

to 01 July 2012 have been reviewed. An operations manual requires to be completed to

Confirming number of installations (reconciliation of Ministry of Health and Infrastructure Cook

Islands statistics) of sanitation systems required for release of the final tranche of EU budget support

under EDF 10.

Engaging the general public in partners meetings and linking pa enua to existing small grants

programmes.

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Negotiating with NZ for use of remaining cyclone recovery funds (CRRP and ARC) for ongoing

development needs of pa enua.

Part 2: AGENCY PERFORMANCE IMPROVEMENT 2.1.1. Leadership, Direction and Delivery Strategy

Agency Changes Anticipated for 2015/16

As the central agency in charge of public finances MFEM is a key institution within the public sector of

the Cook Islands. The range of outputs provided by MFEM emphasise its current role as leading the

management of public finances, regulating the tax system, providing policy and economic advice and

promoting ongoing development.

In undertaking this key role in the public sector and delivering on its appropriated outputs MFEM relies

on three key inputs: firstly, the ability and capacity of the people it employs; secondly, the robustness

of the legislative framework and finally, the underlying procedures which it is responsible to

administer; and the systems employed which underpin the activities it undertakes.

The challenge has been and will continue to be in to the future is how to ensure, that:

• people in MFEM have the appropriate skill base to carry out their role effectively;

• legislation governing MFEM’s activities maintains the overall the public good and continue to

remain relevant to the times; and

• financial and other administrative systems employed across government provide the transparency

and information required whilst providing potential for productivity improvements cross

Government.

MFEM is a larger employer in the Crown, it employs around 83 people on a full time basis and then

has a further 14 people who provide assistance (predominantly customs) on a part time basis. This

represents around 10 per cent of the General Government Sector (excluding Crown Agencies and

SOE’s).

All these people are important and contribute to the overall outputs of the Ministry. In this regard a

significant amount of effort goes into improving the ability of people through ongoing on the job

training and mentoring, individual pursuit of qualifications from external training providers, technical

training provided through MFEM or other government agency such as the OPSC and the provision of

technical assistance which often comes from international agencies and also to provide opportunities

for people to attend workshops.

What has been clearly demonstrated in the past are that skills gained within MFEM are marketable

not only locally but internationally. Informal feedback demonstrates that the majority of employees

enjoy working at MFEM but that they wish to pursue other opportunities, often these opportunities

present an increase in the remuneration of the employee which MFEM have difficulty in matching.

That is good for the employee and enhances the reputation of MFEM as an employer who can provide

opportunities for staff, the downside, obviously is that MFEM must accept that this will continue and

that ongoing capacity building and to some degree supplementation will be required.

As a key institution of the Crown MFEM will need to continually position itself in such a manner that

it continues to maintain a level of institutional capacity and credibility on which all its stakeholders

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can rely on for the provision of the outputs it is appropriated to provide but also to provide impartial

advice. This is reflected in the MFEM vision to be a competent and professional organisation, inspiring

public trust in managing public finances in pursuit of aspirations of ongoing national development.

The two PEFA assessments demonstrate quite clearly that MFEM has progressed significantly in terms

of public financial management in recent years. MFEM is not simply the bookkeeper of the Crown it

is a trusted adviser to the Government on key financial and economic issues facing the country.

Nevertheless, advice is always contestable and for that reason the advice MFEM provides needs to be

robust and be able to stand up to scrutiny demonstrating that advice that is provided has been done

in the interest of all Cook Islanders and the Government.

In this regard the continual promulgation of information in the areas in which it has coverage is

extremely important. MFEM will need to ensure that there is a continual flow of information available

to all stakeholders in the community and the region. The MFEM website is recognised as a reliant

information base, but with that comes additional effort which is required to explain things further,

particularly in the areas of revenue management, development coordination and statistics.

The MFEM approach towards the sharing of information is to provide it unless it is commercially

sensitive, most recently MFEM has agreed with Standard and Poors to publish the reports which are

undertaken on the Cook Islands and these are available on the website.

Modernisation of legislation has continued to be a prominent issue, two years ago the Ministry of

Finance modernised the Customs Act, it also made significant changes to the various tax Acts to ensure

reforms were made. Now changes need to occur to modernise the MFEM Act and work has been

almost completed on modernising the Statistics Act which is almost 50 years old.

Systems and the data that goes in them are particularly important to MFEM. Collection of information

needs to be done in an intelligent manner and systems needs to be built in such a manner that

information is put in once and the need for intervention is minimalized. For example border control

data is now automatically collected by immigration/customs officers who through the border control

mechanism collect the flight data and biographical data of passengers. Data on the importation of

goods is now put in by the importer, the investment into the RMS will allow for data to be input by tax

agents straight into the system.

Ultimately this frees up resources to undertake a greater analytical role on the data that is collected

by the Crown to better inform decision making.

Space and quality of accommodation continues to remain a concern, resourcing is tight, but the

Ministry will continue to find efficiencies to deliver on its objectives.

There will be leadership changes in the senior executive during 2015/16 which will have some impact

on the direction of MFEM. There will be a change in Financial Secretary from Richard Neves to Garth

Henderson during the course of the year, a recent change has occurred with the head of Treasury with

Russell Hynd taking the helm, and the eventual replacement of Peter Tierney as the head of the

Development Coordination Division.

A unique approach in allowing for a genuine period of transition at the Financial Secretary level will

enable a continuity of approach on a number of issues whilst allowing the incoming Financial

Secretary, Mr Garth Henderson the opportunity to manage the activities of the Ministry and develop

the ongoing budgetary, economic and development strategy in line with the next iteration of the

National Sustainable Development Plan.

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Apart from the changes in personnel which will be expected in 2015/16, there are also the challenges

of meeting the needs of a more modern administrative process and structure. The outcomes and

recommendations in the functional review of government in 2011 have been reiterated in a recent

exercise undertaken by the Office of Public Service Commissioner on the need to strengthen the public

service.

MFEM will need to take a prominent role in managing the transition from an administratively

decentralised environment relying on manual processes to a more dynamic centralised environment,

which still provides for decentralised decision making but increases productivity alongside improving

transparency and accountability.

There will also be a need for greater emphasis on continued reform and continued structural

improvements to the economy and the manner by which the public sector as a consumer, investor

and regulator interacts with the private sector to maximise productivity and economic prospects.

RMD will be implementing the first phase of online user access to the revenue management system

(RMS), a continuation of the practice of automation building on the process of automation that has

been incorporated into the automation of border controls and goods processing.

DCD will be reviewing the ODA policy and fine tuning the Te Tara Vaka system for the evaluation of

activities funded by either government or development partners.

In the statistical area, there will be the ongoing implementation of the CISDA and moving away from

manual input of data to dedicating resources towards greater analytical activities.

Treasury will also begin the significant work which will see the centralisation of many financing

functions away from Ministries, this will need to focus on system, legislative and cultural changes

within the Ministry and across government.

Statistics will be planning for the enactment of the new statistics legislation and the launch and

implementation of the CSDS. The Statistics Division will need to assume a leadership role in

coordinating the larger National Statistics System on top of producing all regular statistical series

assigned to the CISO. This will see some reweighting of workload to see one of the senior statistical

analysts managing the CSDS process.

Leadership and Governance

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From Left to Right : Rear - Garth Henderson, Richard Neves, Russell Hynd Front- Peter Tierney, Taggy

Tangimetua, Andrew Haigh, Etuatina Drollet.

Senior Leadership

The executive team consisting of the Division Heads Andrew Haigh, Teu Teulilo, Taggy Tangimetua and

Peter Tierney and the current Financial Secretary, Richard Neves and Garth Henderson who will

assume the post halfway through the 2015/16. The team has a collective approach towards the

leadership of the Agency.

There is a significant awareness amongst the Division managers that ultimately the performance of

their Division and the Ministry is reliant on a cohesive and supportive culture in the Ministry which

works together.

The Ministry also hold regular sessions with senior managers across the Ministry to continually look

at issues and work plans, these are held approximately every six months. This enables a way to begin

to instil a sense a collective approach towards solving problems and begins to embed a culture of

united leadership.

Values, Behaviour and Culture

The Ministry has continually had the vision of striving for excellence.

It has a set of personnel policies to guide the behaviour and culture of staff, but these have now been

superseded by the new policies issued by the OPSC.

Staff are encouraged to demonstrate those behaviours which are consistent with being a good public

servant, including honesty, integrity, service orientated, respect and transparency, and the public

service code of conduct has been circulated amongst all staff.

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The Ministry aims to be the premier public financial institution in the Pacific, this requires a continual

effort of improvement and reform.

This is achieved through constant reviews, such as the PEFA and the more recent Peer Review.

MFEM has no tolerance approach towards corruption, the MFEM website has been chosen to host

anti-corruption material to assist members of the public with the processes which they can use to

report on issues of concern.

Structure, Roles and Responsibilities

The MFEM organisational structure is provided at Annex 1.

Organisational Planning, Structures and Practices

The agency and its processes have been reviewed a number of times, and continually so. Following

the Wanklyn review there have been two Public Expenditure Framework Assessments (PEFA) which

undertaken in 2010 and 2014. The Pacific Forum Secretariat peer review was undertaken in late 2013

by peers in the Pacific, and the Revenue Management Division administrative processes were

reviewed in 2013 by the International Monetary Fund and the Statistics Division has major review

with the NSDS.

These reviews are useful in the sense of continually ensuring we are focussed on meeting our core

objectives but focussing on new ways of doing things and also new requirements which will be

forthcoming into the future.

MFEM has four sub divisions and also the Office of the Financial Secretary, the five areas correlate

with the outputs of the Ministry.

• OUTPUT 1: Fiscal and Economic Advice Management – Office of the Financial Secretary

• OUTPUT 2: Responsible and Effective Fiscal and Economic Management – Treasury Division

• OUTPUT 3: Efficient Administration of Taxation, Duties and Border Securities – Revenue

Management Division

• OUTPUT 4: Production and Dissemination of Relevant Statistics – Statistics Division

• OUTPUT 5: Development Coordination – Development Coordination Division

The management team meet weekly to coordinate the efforts of MFEM, share information,

coordinate management and share resources where required, particularly when issues arise which

require to be dealt with.

Responsibility and Accountability

All personnel have current job descriptions to which they work against and to which they are

accountable. Performance assessment is conducted against these job descriptions. The nature of

MFEM is that there are occasions where things appear out of the ordinary which have to be dealt with.

It is acknowledged that Job descriptions cannot capture every detail of a person’s work environment

and these are accounted for by the Division Heads when working with staff.

Review

It is predominantly a regulatory authority and policy advisor. In this regard it is more difficult to

monitor policies and programmes as the results framework is based on quantitative measures such as

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revenue collection targets, compliance levels, and budget execution, these are more operational as

such, but are regularly reviewed.

Nevertheless, MFEM introduced ‘Te Tarai Vaka' an Activity Management System which is designed to

streamline and overcome a haphazard approach to project and programme management in a way

that is culturally based and fosters learning the craft especially at the local level.

Initially the system has been utilised to evaluation development partner activities.

Development partners have certain requirements they want us to meet in order to access

development assistance. In the past the approach has often been fragmented and ineffective.

Te Tarai Vaka draws on the way in which we traditionally and meticulously approach the task of

fashioning a new vaka. Whatever the size of the ‘vaka’ and its eventual purpose, the way in which we

approach the project has certain basic steps.

Te Tarai Vaka has three phases, we have talked extensively with our elders and leaders about terms

and methods that have served us well through this process in the past.

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2.1.2. External Relationships

Engagement with Ministers

As the key adviser on financial and Economic matters the Ministry must be respected by members of

Cabinet, in particular, the Minister of Finance as the portfolio Minister and the Prime Minister as the

head of the Government.

Maintaining excellent relationships with both occupants is a key to success in terms of assisting the

Government of the day achieving its priorities but to also ensure that MFEM continues to be influential

in the overall development of policy by Government.

In this regard the Ministry continues to work closely with all members of the Cabinet, in particular the

Minister. The Financial Secretary meets regularly with the Minister, and once a week goes through an

agenda outlining MFEM’s advice on issues going to Cabinet.

Sector Contributions

The Ministry of Finance and Economic Management works closely in many facets of Government and

as a central agency works closely with other central agencies such as the Public Service Commission,

Crown Law and the Office of the Prime Minister.

The Ministry is formally involved in the following committees, the:

• Central Agencies Committee;

• National Sustainable Development Committee;

• Project Steering Group for Te Mato Vai;

• Infrastructure Committee; and

• Anti-corruption committee

The Financial Secretary is a member of the Financial Services Development Agency, the Bank of the

Cook Islands and the Cook Islands National Superannuation Fund where he is currently the Acting

Chair.

The Revenue Management Division has worked closely:

• with MFAI (Immigration) on the development of the Cook Islands Border Management System.

• as a member of the transnational crime unit with Police and Immigration.

• at the border with the Ministry of Agriculture (Bio-Security), MFAI (Immigration), Health, Police,

Airport Authority and Tourism Corporation.

• Work with FIU on monitoring cash movements.

The Development Coordination Division continues to work hard in regard to the implementation of

the development agenda with on-going collaboration across government ministries, private sector

and NGO/private actors.

Te Mato Vai is a collaborative effort of the Ministry of Infrastructure and Planning (MOIP), the Ministry

of Health (MoH), and the Ministry of Finance and Economic Management (MFEM). While MOIP

overseas the design and construction of the project, MoH monitors the water quality, and MFEM the

overall coordination of the project. Even further, it is a partnership between the Cook Islands, People’s

Republic of China and New Zealand.

Statistics led the development of a Statistical Master plan which has established a National Statistical

System (NSS) is to bring all players in the data production industry together, working as a team.

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Treasury have worked on improving the coordination between government agencies on the annual

budget process. Treasury led the centralisation of ICT in government by expanding on the

‘cookislands.gov.ck’ network in consultation with the OPM ICT division. Alongside PSC Treasury have

led the implementation of the centralised payroll/HRM system. Treasury will now move to

centralising financial management services across the public sector.

Working across Government

MFEM works closely in many facets of Government and as a central agency works closely with other

central agencies such as the OPSC, Crown Law and OPM. MFEM is formally involved in the following

committees

• Central Agencies Committee;

• National Sustainable Development Committee;

• Project Steering Group for the Southern Group Renewable Energy project;

• Project Steering Group for Te Mato Vai;

• Infrastructure Committee; and

• Anti-corruption committee

The Financial Secretary is a member of the Financial Services Development Agency, the Bank of the

Cook Islands and the Cook Islands National Superannuation Fund where he is currently the Acting

Chair.

The Revenue Management Division has worked closely:

• with MFAI (Immigration) on the development of the Cook Islands Border Management System.

• as a member of the transnational crime unit with Police and Immigration.

• at the border with the Ministry of Agriculture (Bio-Security), MFAI (Immigration), Health, Police,

Airport Authority and Tourism Corporation.

• Work with FIU on monitoring cash movements.

The Development Coordination Division continues to work hard in regard to the implementation of

the development agenda with on-going collaboration across government ministries, private sector

and NGO/private actors. In summary it has been involved in:

• water and sanitation sector where it facilitated working group meetings on water policy work of

MOH;

• small grants programmes, supporting reviews and simplification of systems to suit needs of target

groups;

• Ministry of Agriculture (MOA) where it has been involved with purchasers, farmers, business and

education sector to contribute to next stage of the MOA plan.

• Pearl revitalisation working with island government and farmers

• Renewable Energy programme, facilitated Northern completion and planning for Southern group.

Also supporting sustainable system of tariffs, operations and maintenance.

• Infrastructure Programme, working with Infrastructure Committee and supported development

of NIIP.

Statistics developed the CISDS which will see it working closely with other agencies in government on

the collection and dissemination of data and statistics..

Treasury have worked on improving the coordination between government agencies on the annual

budget process. Treasury led the process of implementing pay global and will now commence a

process which will centralise administrative aspects of public financial management.

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Collaboration and Partnerships with Stakeholders

MFEM covers a wide range of activities and issues, and so it has a disparate set of stakeholders with

whom it must deal with. Stakeholders include the public in general, other agencies of government,

development partners, Ministers, members of Parliament, the media and many others.

MFEM tries to understand it’s stakeholders and meet their needs or concerns, likewise MFEM also

works to have stakeholders appreciate issues which the agency may have or approaches it wishes to

pursue for the general public good.

The basic principle which underlies MFEM’s approach is to continually form strong working

partnerships with stakeholders recognising that a one size fits all approach does not work equally

across the range of stakeholders. Lessons are shared amongst senior managers and different

approaches are shared.

ON a general basis MFEM:

• maintains working relationships with donor partners at the institutional and personal level;

• engages frequently with members of Cabinet;

• engages with Members of Parliament, and responses (where appropriate) on various issues;

• engages with organised groups in civil society and the chamber of commerce; and

• works hard to provide as much information where it can, and meet requests if they are reasonable

and information is available.

Experiences of the Public

Monitoring

Monitoring of public experiences is not undertaken in systemic way. Whilst media monitoring occurs

and to respond to issues if and when they arise.

The approach taken differs through each Division. Each Division has a variety of public stakeholders

with whom it deals. The Revenue Management Division has an outreach officer.

DCD have continued interaction with the public and a social media presence.

The Treasury do not deal with the general public on a day to day basis.

RMD has now employed an outreach officer who will continually interact with tax payers.

Expectations

The agency with the highest public visibility is RMD as they are the regulatory arm of MFEM dealing

with revenue collection. In terms of tax, there is a tax payers charter and also the ongoing meetings

with tax agents to exchange views on various issues.

A code of conduct has been developed. This is in line with the World Customs Organisation’s Arusha

Declaration revised in 2003, where it identifies the need to develop a comprehensive code of conduct

which sets out in very practical and unambiguous terms the behaviour expected of all Customs

personnel.

Service Design Improvement

In terms of service design improvement MFEM focusses on ensuring that the resources of the agency

are geared towards greater cohesion and productivity to deliver improved services. A number of

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reviews have been done in the past and these have formulated the response to MFEM’s service

delivery, coupled with public feedback which comes in over time.

2.1.3. People Development

Leadership and Workforce Development

Alignment with Strategy

MFEM is a larger employer in the Crown, it employs around 83 people on a full time basis and then

has a further 14 people who provide assistance (predominantly customs) on a part time basis. This

represents around 10 per cent of the General Government Sector (excluding Crown Agencies and

SOE’s).

All these people are important and contribute to the overall outputs of the Ministry. In this regard a

significant amount of effort goes into improving the ability of people through ongoing on the job

training and mentoring, individual pursuit of qualifications from external training providers, technical

training provided through MFEM or other government agency such as the OPSC and the provision of

technical assistance which often comes from international agencies and also to provide opportunities

for people to attend workshops.

What has been clearly demonstrated in the past are that skills gained within MFEM are marketable

not only locally but internationally. Informal feedback demonstrates that the majority of employees

enjoy working at MFEM but that they wish to pursue other opportunities, often these opportunities

present an increase in the remuneration of the employee which MFEM have difficulty in matching.

MFEM is also an approved training employer for the New Zealand Institute of Chartered Accountants.

Leadership Capability

Building overall management and leadership capability is recognised as a need by the Ministry. Firstly,

there is an identified group of approximately 20 to 25 staff who are nominated as the senior managers,

they are bought together on a regular basis to be across the work of the Ministry as a whole, to assist

in business plan development and overall monitoring of progress.

The bigger Divisions also have delegated leadership responsibilities as well and this is monitored by

the Division Heads.

Targeting Development

The Ministry has a multi layered approach to personnel development. Firstly, there is individual

development, a proportion of staff attended courses that would improve their own ability such as

those made available through the University of the South Pacific and other institutions. The Table

below provides further details.

Management of People Performance

Completed Performance Appraisals

The Divisions are progressively working through their performance appraisals of staff. The appraisal

system across the agency differ by Division, a legacy from previous years. MFEM will work with OPSC

to implement a consistent approach towards performance appraisals.

Performance Excellence

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MFEM continually pursues excellence from its staff, excellence is rewarded in some cases through a

salary bonus and/or recognition through either the team of the quarter or the individual of the

quarter.

Poor Performance

Performance is managed at a Division level, the approach differs to suit the circumstances of the

situation. Whilst localised approaches are taken, ultimately if there is continual performance issue

then employees are put on formal warnings and efforts are made to address issues which may be

leading to the poor performance.

Continual poor performance will ultimately lead in dismissal provided the employees has been

provided with a reasonable opportunity to improve.

Engagement with Staff and Employment engagement

MFEM tries to have a positive engagement with staff by supporting the staff in their development and

encouraging social cohesion through a number of events outside of the immediate workplace.

Employee relations are handled at a Divisional Level, quarterly meetings are held with staff of the

Ministry to outline Ministry wide issues. Employment relations on broad terms are handled at the

Executive Level.

MFEM holds meetings of staff on a regular basis. During 2014/15 meetings outlined the work plan for

2014/15, the transition to the new Financial Secretary, farewells for departing staff, raising awareness

on the anti-corruption campaign and code of conduct released by the OPSC.

The Ministry continues to promote recognition including the employee of the quarter which goes

towards outstanding performance. The recent online survey undertaken by OPSC provides some

indicative work that could be done to better ascertain the views of staff. There is no collective

representative team to advocate on staff matters.

Page 56 of 84

2.1.4. Financial and Resource Management

Asset Management

There are aspects of asset management which are done at a whole of government level, these include

the building which is managed by CIIC and the computer servers which are managed centrally by the

Office of the Prime Minister with Assistance from MFEM.

Local assets such as computers, vehicles, furniture and other fittings are maintained regularly so that

they last beyond their useful accounting life and then we return to the bidding process through the

CFC for replacing those things which cannot be expensed.

Information Management

MFEM is a large user of Information Technology, the MFEM Website is considered to be one of the

more up to date ones across government. MFEM staff have been trained to be able to update content

on to the website, removing the reliance on just one person. The Ministry also uses twitter, Facebook

and an email subscription system to update users.

On behalf of Government MFEM runs the HRMIS in conjunction with OPSC – A payroll system that is

up to date with official information of all government employees kept and in sync with the HR system

managed by the PSC. This has now begun to be rolled out to all agencies for the HR management and

will reduce the burden on agencies for record keeping on leave etc. It is envisaged this will be rolled

out to all SOE’s including the BCI.

The Revenue Management System is used to manage taxpayers information, scoping has now

commenced to expand the RMS to have an online presence and allow for users to input their tax

information online.

The Treasury Division and the Development Coordination Division utilise Microsoft Dynamics as the

tool to undertake financial reporting and manage accounting.

The Statistics office utilise PC Trade and manage the departure cards by making a facsimile through

the use of a specialised scanner which then makes that card available for users in MFEM, MFAI and

Tourism.

Improving Efficiency and Effectiveness

MFEM will rely on three major aspects of activity to improve efficiency and effectiveness. Firstly, by

improving institutional processes and systems. MFEM is a central agency relying on other institutions

for information, particularly financial. Ultimately there is a need for a central Financial Management

Information System (FMIS) which will assist in a more coordinated and accountable approach towards

financial management, this year the Treasury outlined a generic chart of accounts which were to be

used by all agencies for reporting purposes.

The Cook Islands Financial Policies and Procedures manual is also being continually updated to

accommodate the needs of MFEM and line agencies.

The Ministry is also now scoping for an online availability of the RMS. This will allows tax payers or

their agents to have access to RMD information on the tax payer online and will allow for decentralised

input, allowing for large efficiency gains to be made within RMD as the keying in information from tax

payers reduces. Additionally it is expected that RMD will be able to pre populate significant

information in order that tax payers are able to accurately report their income.

Page 57 of 84

The automation of goods processing will lead to a reduced need for the input of data by the Statistics

office allowing for the efforts of staff to be focussed on higher value activities, such as analysis.

Secondly the ability of the individual is crucial to improving effectiveness, and ongoing development

in this regard, both of a personal nature and institutional through development opportunities and on

the job training will greatly assist in this area.

Financial Management

Appropriation Variance Report

Operating Expenditure Budget Actual Variance % Var

Personnel Expense 2,862,137 2,848,514 13,622 0.5%

Operating Expense 581,939 552,984 28,955 5.0%

Depreciation Expense 128,530 128,530 (0) 0.0%

Total Expenditure 3,572,606 3,530,028 42,577 1.2%

Trading Revenue 750,278 750,278 0 0.0%

Net Expenditure 2,822,328 2,779,751 42,577 1.5%

Capital Expenditure Budget Actual Variance % Var

Capital Appropriation 7,954,599 4,826,963 3,127,636 39.3%

On Behalf of the Crown Budget Actual Variance % Var

Payments 15,805,316 11,157,117 (4,648,199) -29.4%

Revenue 103,801,024 97,939,928 (5,861,096) -5.6%

Operational Expenditure

MFEM achieved an operational surplus from its operations in 2014/15 of $43,000.

Of this amount MFEM has used some savings for whole of Government expenditures which include

the payment of departure tax on behalf of the Vakas and payments for hosting of the IMFPFTAC event

which the Government agreed to host post 2014/15 budget.

The delays in recruiting an internal auditor have also contributed to the surplus, but these resources

were not used and were returned to the Budget at the end of the financial year.

Capital Expenditure

The Ministry administered a range of capital activities resourced through development partners and

the Cook Islands Government, these included investments in the:

• Te Mato Vai Rarotonga water partnership;

• Rarotonga water tank subsidy;

• Automated Border Management System;

• Government IT Network System;

• RMS web lodgement system;

• Cook Islands Procurement IT system; and

Page 58 of 84

• The Capital distribution Fund.

Further details on the actual outcomes are provided at Annex 3.

Revenues and Payments On Behalf of the Crown

These amounts are either collected on behalf of the Crown or payments made on behalf of the Crown,

trends in these are reflected in the Quarterly Financial Statements which are released during the year

and available on the MFEM website.

The Revenue received on behalf of the Crown reflect the taxes and duties collected by RMD.

Value Added Tax

Actual VAT revenue collected in 2014/15 was $1.894 million below the 2014/15 Budget estimate (-4

per cent) but above the amount collected in 2013/14. The full year impact of the VAT rate increase to

15 per cent and steady economic activity did not contribute as significantly as initially estimated. A

major factor has been the static demand for energy generated by Te Aponga Uira which is believed to

be the result of increased demand being met through localised renewable energy production.

Additionally VAT revenue collections were impacted by VAT refunds on significant capital purchases

by Te Aponga where on new generation equipment. The latter is not expected to be an ongoing

trend.

Income Tax

Actual income tax revenue collected in 2014/15 was below 2014/15 Budget estimate by $0.828

million (-4 per cent).

Company Tax

Actual company tax collected in 2014/15 was $0.569 million below the 2014/15 Budget estimate (-5

per cent). This is mainly attributable to lower profitability in the domestic banking sector as the banks

actually wrote off a number of long standing non-performing loans. Non-performing loans in the

financial sector have been reduced significantly and this is not anticipated to be an ongoing feature.

Import Levies

Actual import levies collected in 2014/15 were $2.009 million below the 2014/15 Budget estimate (-

16 per cent). This is mainly attributable to the continued practice of wholesalers pre-purchasing

tobacco products to avoid increased excises aimed at reducing NCD’s. Additionally the new online

customs process introduced in the final quarter of the year may have also contributed to the drop by

enabling a higher proportion of imports to be managed through deferred tax. This approach creates a

deferral of approximately 1-2 months in import levies received by the Crown.

Withholding Tax

Actual withholding tax collections were $2.223 million above the 2014/15 Budget estimate. This

relates to withholding taxes collected mostly on dividends and royalties paid overseas. No estimate

is made for these payments at budget time as they are difficult to predict.

Departure Tax

Page 59 of 84

Departure tax collections were $0.830 million above the 2014/15 Budget estimate (11 per cent). While

the numbers of visitor arrivals during 2014/15 has been close to expectations, the increase is

attributable to a greater proportion of tourists being required o pay departure tax (persons 12 years

of age and above) than anticipated at the time of the Budget.

Trading Revenue

Trading revenue is earned by agencies of the Crown for the provision of goods and services such as

border control services, fees for waste disposal and various types of permits etc. Further analysis is

provided in Appropriation Analysis Section.

The two major payments managed by MFEM are the underwrite of the long haul routes to Los Angeles

and Sydney operated by Air New Zealand and the payment of the Toa guarantee which both came in

below budget.

Audit Report (Most Recent)

The MFEM accounts for 2013/14, 2012/13 and 2011/12 have been audited and unqualified.

Risk Management

Identification

Risks are managed in a hierarchical manner. MFEM works closely on the CAC in an oversight capacity

to identify risks generally to the Crown and prepare for an appropriate response and advice to Cabinet.

Initially risks are initially dealt with at a Division level and discussed at the senior management level

to identify the adequate and appropriate response. Likewise, whole of Government risks may be

bought back to MFEM for a response and action.

The Revenue Management Division is primarily responsible for the collection of revenue, the primary

risk for that particular area is evasion of payment of taxes and/or duties. For 2015/2016 the RMD

compliance plan identified risks around three key areas and we have developed a plan around these

three key objectives.

• Encourage Compliance – our plan make it easier for taxpayers.

• Detect Compliance – our Compliance Risk plan drives our audit activity

• Deter Non Compliance – enforcement measures around penal tax/prosecution and debt

collection for high risk cases.

The Treasury Management Division is primarily responsible for responsible and effective fiscal

management. There are two primary Risk identification tools used to identify financial risk in the public

sector.

• In 2011 the Cook Islands Government in conjunction with the IMF completed a Public Expenditure

and Financial Accountability (PEFA) assessment to assess the quality of public financial

management in the public sector. This report is the cornerstone of risk identification and was

updated in late 2014 with a draft report released in January 2015.

• Crown Audit completes annual audits of all the financial statements of Crown Agencies and the

consolidated Crown Accounts. Treasury Management reviews all audit reports and uses these as

a key risk identification tool.

In addition in June 2015 the Cook Islands Government in conjunction with the United Nations

Development produced the HACT macro assessment to ensure adequate awareness of the public

financial management (PFM) environment in which development agencies provide cash transfers to

Page 60 of 84

implementing partners. The HACT (harmonized approach to cash transfers) framework includes not

only the financial environment but also includes national procurement capacity, exchange rate

volatility and the presence of informal/black markets.

Individual Crown Agencies receiving development funding were also assessed through the HACT

framework on a “micro” level assessing risks of financial systems and capacity in each agency.

The Development Coordination Division works closely with Crown Law to review process is in place

to manage risks to the Ministry and crown for commercial risk and risk related to new grant funding

arrangements and variations.

As part of Te Tarai Vaka activity management system a risk management framework has been

developed. This will need to be implemented in 2015/16 to enable

Management of Risk

Management of Risk is informed by the PEFA Assessments, Crown audit and other reports such as the

HACT assessments. In 2011 the PEFA 2011-2015 Roadmap was developed by the Cook Islands

Government to identify and prioritise risk management strategies for risks identified by the PEFA

assessment. The roadmap provides input into annual plans and is reviewed 6 monthly to ensure

progress is made and risks are being managed appropriately.

Progress is also managed through annual reports and review of audit outcomes.

A revised PEFA roadmap will be developed in 2015/16 from the 2nd PEFA assessment once the final

report is released.

2015/16 Business plans include the introduction of an internal audit function and a project to

centralise and improve financial systems, both of which will enhance transparency and our capability

to manage financial risk.

Audit and risk committee

There is no formal audit and risk committee.

Funding for the internal audit function was removed from MFEM after it remained vacant for more

than six months. The Executive Management team meets on a weekly basis to discuss various issues.

Any risks on a Divisional basis or an MFEM basis will get dealt with in that forum. In 2014/15 ongoing

funding (which was not utilised) was provided and MFEM put out to tender the provision of internal

audit services to the local market.

A contract for services is expected to be confirmed early in 2015/16. The risks discussed include

financial, political and physical (in the case of threatening disasters).

Stakeholders

MFEM takes a conservative approach towards risk as required by the MFEM Act. Ultimately it aims

to ensure that overall risks to the Crown are minimised in terms of incurring financial liabilities either

through the incurring of expenditure or the loss of revenue.

Engagement

MFEM does try to engage with stakeholders and the wider community in understanding the risks and

consequences of its interventions. It is acknowledged that more could be done in this area.

Page 61 of 84

Balance

MFEM does where it can try to identify risks as early as it can and identify appropriate levels of risk

taking and balance this with other objectives?

Page 62 of 84

Part 3: RESOURCING 3.1. Human Resourcing

3.1.1. Human Resource – Full Time Equivalent Positions as at 31 May 2015

Fiscal

Economic

Advice and

Management

Responsible,

Effective Fiscal

Economic

Management

Efficient

Administration of

Taxation, Duties

and Border

Securities

Production and

Dissemination of

Relevant Statistics

Development

Coordination

TOTAL

Full time Filled Government 5 18 32 101 7 72

Donor 1 1 2

Vacant Budgeted 4 2 1 7

Unbudgeted 1 (senior

economist)

1 (trainee) 2

Sub-total FTE: Full time 7 23 34 12 7 83

Part time Filled Government 14 14

Donor

Vacant Budgeted

Unbudgeted

Sub-total FTE: Part time 0 0 14 0 0 14

Casual Filled Government 3 3

Donor

Vacant Budgeted

Unbudgeted

Sub-total FTE: Casual 0 0 3 0 0 3

Total FTE (FULL+PART+CASUAL) 7 23 51 12 7 100

1 One fulltime staff (Statistics Clerk) is currently away studying on LWOP.

Page 63 of 84

3.1.2. Expatriate Employees Appointed

Position title Output/ Division Was the Public Service

Commissioner consulted

before this appointment

was made? Yes/No

Financial Secretary Fiscal Advice Yes

Treasury Operations Manager* Treasury Operations Yes

Crown Accounts Manager Treasury Operations Yes

Crown Accountant Treasury Operations Yes

Finance and Numismatic Officer Treasury Operations Yes

Treasurer/Collector/Comptroller Revenue Management Yes

Senior Tax Auditor Revenue Management Yes

Senior Tax Auditor Revenue Management Yes

Senior Policy and Research

Officer*

Development Coordination Yes

Programme Managers Development Coordination Yes

Programme Managers Development Coordination Yes

3.2. Financial Resourcing Note: how well does the Agency manage government financial commitments to achieving its Agency

Outputs? Illustrate how funds were distributed, if there were any overspending/ under spending;

the challenges; the achievements.

3.2.1. Total Resourcing 14/15

Projected

15/16

Projected

16/17

Projected

17/18

Projected

Total

4 Years

Net Appropriation 2,822,328 2,792,328 2,792,328 2,792,332 11,194,317

Trading Revenue 503,500 503,500 503,500 503,500 2,014,000

Official Development Assistance 24,493,000 15,854,000 7,795,000 7,795,000 55,937,000

Total Resourcing 27,818,828 19,149,828 11,090,832 11,090,832 69,150,316

3.2.2. Operational Funding Output 1

Fiscal

Advice

Output 2

Fiscal and

Economic

Management

Output 3

Taxation

Output 4

Statistics

Output 5

Develop

ment

Coordina

tion

Output 6

Corporate

Services

TOTAL

Personnel 141,895 692,178 1,278,298 262,638 207,850 32,500 2,615,359

Operating 35,227 143,868 130,067 11,000 32,871 228,906 581,939

Depreciation 9,098 13,828 74,314 9,145 22,145 - 128,530

Gross Appropriation 186,220 847,374 1,480,179 282,783 262,866 261,406 3,325,828

Trading Revenue 3,500 500,000 503,500

Net Appropriation 186,220 846,374 982,679 282,783 262,866 261,406 2,822,328

Page 64 of 84

3.2.3. Capital Funding

The Ministry administered a range of capital activities resourced through development partners and

the Cook Islands Government, these included investments in the:

• Te Mato Vai Rarotonga water partnership;

• Rarotonga water tank subsidy;

• Automated Border Management System;

• Government IT Network System;

• RMS web lodgement system;

• Cook Islands Procurement IT system; and

• The Capital distribution Fund.

Output 1

Fiscal Advice,

186,220 , 7%

Output 2

Fiscal and

Economic

Management ,

846,374 , 30%Output 3

Taxation, 982,679

, 35%

Output 4

Statistics, 282,783

, 10%

Output 5

Development

Coordination,

262,866 , 9%

Output 6

Corporate Services,

261,406 , 9%

Page 65 of 84

Part 4: EMPLOYMENT RELATIONS 4.1.1. Recruitment Challenges

There were no significant challenges in recruiting for particular positions in 2014/15.

4.1.2. Employee Turnover

Position title Output/ Division Reason for leaving:

Resignation/retirement/

dismissal/contract

completed Treasury Operations Manager Treasury Management Resignation

Crown Accounts Manager Treasury Management Resignation

Senior Crown Accountant Treasury Management Resignation

Economic Analyst Treasury Management Resignation

Outer Island Finance Officer Treasury Management Resignation

Senior Budget Analyst Treasury Management Resignation

Budget Analyst Treasury Management Resignation

Budget Analyst Treasury Management Resignation Payroll Officer Treasury Management Resignation

Reception Treasury Management Resignation

Programme Manager Development Coordination Resignation

Programme Manager Development Coordination Resignation

Senior Tax Auditor Revenue Management Resignation

Debt and Return Collection Officer Revenue Management Resignation

Tax Officer Revenue Management Resignation

Customs Officer Revenue Management Resignation

Cashier Counter Clerk Revenue Management Resignation

4.1.3. Employment Disputes

Specify the issue * Total

Casual Customs Officers

and access to leave.

Staff are paid a higher hourly rate in lieu of the absence of leave

entitlements which are available to full time service.

This has been clarified to casual staff and also referred to the OPSC for

clarification.

4.1.4. Issues relating to employee conduct

There were no issues in MFEM relating to employee conduct as outlined in the Cook Islands

Government Code of Conduct policy.

4.1.5. Technical Assistance Received by the Agency

Description/ Title of technical

assistance (TA)

project/programme

Duration Output/ Division Name of

donor

partner(s)

Funding

Value ($)

Costing of the National Strategy

for the Development of

Statistics (NSDS) and final draft

of Report

1 week Policy – Statistics SPC NA

Technical training 1 week National Accounts -

Statistics

PFTAC NA

Technical training 1 week Balance of Payments -

Statistics

PFTAC NA

Page 66 of 84

Description/ Title of technical

assistance (TA)

project/programme

Duration Output/ Division Name of

donor

partner(s)

Funding

Value ($)

Application to Adaptation Fund

Board

9 months DCD EU-SPC $66,250

Application to Adaptation Fund

Board

4 months DCD UNEP $33,000

National Infrastructure

Investment Plan

1 year DCD ADB USD245,000

Development Partners Meeting

Support

3 months DCD NZ $22,000

Development Partners Meeting

Media Program

3 months DCD UNESCO $5,000

Te Tarai Vaka and Procurement

Support

1 year DCD NZ $32,000

Microsoft Dynamics Training

and Support

1 year DCD NZ $35,000

Page 67 of 84

4.1.6. Employee Capability Development

Name Date Where To Name of Training

Days for

training Funded By

Tearii Maurangi Jun-15 Nadi, Fiji Fiscal Forecasts 3

Australian

Govt

Pari Teuru Aug-14 Suva, Fiji Disaster Management 3

Pacific Island

Forum

Lavinia Tama May-15 Samoa Climate Finance 4

SP

Commission

Edwina Matenga Mar-15 Canberra Procurement 2

Australian

Govt

James Webb Apr-15 Maldives Public Debt Management 4 ADB

Miriam Cook Feb-15 Suva, Fiji Disaster Risk Management 3

Pacific Island

Forum

Akisi Jul-14 Suva, Fiji IPSAS Workshop PIFTAC

Siva Gounder Jul-14 Nadi, Fiji Government Finance Statistics

IMF and

Australian

Bureau of

Statistics

Jim Nimerota Japan

Second Training Group on Improving Capacity

for the Production of Official Statistics relating to

MDG Indicators (ICPOS2) 18 Weeks JICA

Jim Nimerota USP CI Campus

OS101 Official Statistics and National Statistics

Systems

1xSemester

(part time) CISO

Anne Tangimetua New Zealand Work Attachment with Stats NZ 1 Month Stats NZ

Anne Tangimetua In Country (Distance Learning) IT Administration courses 1 Semester CISO

Mareta Katu In Country (Distance Learning) IT Administration courses 1 Semester CISO

Mareta Katu Samoa Electoral Bridge Training 2 Weeks PIANZEA

Tuaine Unuia Samoa Electoral Bridge Training 2 Weeks PIANZEA

Taggy Tangimetua USP CI Campus PGrad in Economics

1 month

Intensive CISO

Page 68 of 84

Name Date Where To Name of Training

Days for

training Funded By

Kevin Hosking Fiji Statistical Classification Methodology workshop 1 week SPC

Amelia Nooapii On the Job training GDP Technical training 1 week PFTAC

Amelia Nooapii On the Job Training BOP Technical Training 1 week PFTAC

Tanga Morris On the Job training BOP Technical Training 1 week PFTAC

Tanga Morris In Country Leadership Training 1 week MFEM

Tanga Morris In Country Job Description Writing 1 week OPSC

Amelia Nooapii On the Job training GDP Technical training 1 week PFTAC

Amelia Nooapii On the Job Training BOP Technical Training 1 week PFTAC

Tanga Morris On the Job training BOP Technical Training 1 week PFTAC

Tanga Morris In Country Leadership Training 1 week MFEM

Tanga Morris In Country Job Description Writing 1 week OPSC

Marion Larsen Fiji Market Access and PSR Workshop 1 Week Pacer Plus

Tessa Vaetoru In Country Job Description Writing 1 week MFEM

Maria Ioane Australia PALS energy efficiency 1 week NZ Aid

Stephen Eraio New Zealand Drugs Training 1 Week NZ Customs

Chiavanni Le’mon New Zealand RMS Web Training 1 Week MFEM

Amelia Nooapi New Zealand RMS Web training 1 week MFEM

Philip Eyre New Zealand RMS Web Training 1 Week MFEM

Page 69 of 84

Definitions

Agency means any public service department, instrument, or agent of the Government and includes a body corporate or organisation that is wholly owned

or controlled by the Crown

Employee is any person who is an employee of the Public Sector

Employee benefits are benefits available to employees that include, but are not limited to: leave, superannuation, motor vehicle and phone use

Employer means the Public Service Commissioner or Heads of Public Sector Agencies, or their delegated authority

Employee types Explanations

Full time Is an employee who works a minimum of 35 hours per week, has regular hours of work each week and has a reasonable

expectation to be employed for at least 35 hours per week. They are entitled to employee benefits.

Part time Is an employee who works less than 35 hours per week, with regular hours of work each week and have a reasonable

expectation of working these hours each week. They are entitled to employee benefits on a pro rata basis.

Casual Is an employee who works irregular or intermittent hours, or is employed for short term work. They are not entitled to

most employee benefits, but are still entitled to remuneration on public holidays when they work or are rostered to

work on these days

Expatriate employee is a foreign employee who is not a Cook Islander or permanent resident of the Cook Islands

Independent Contractors are contracted to provide services and are bound by the terms and conditions of their contract. They are not employees and do

not receive employee benefits

Organisational Staffing Structure means the Agency’s approved staffing structure

Public Service Commissioner means the Public Service Commissioner appointed under Article 73 of the Constitution and Section 5 of the Public Service Act

Public Sector includes Public Service Departments, Island Governments, Agencies, Offices of Parliament, Ministerial Support Offices, State Owned

Enterprises, and Other agencies

Page 70 of 84

Annex 1 – MFEM Organisation Structure

Page 71 of 84

Office of the Financial Secretary

Page 72 of 84

Treasury

Page 73 of 84

Revenue Management

Page 74 of 84

Statistics

Page 75 of 84

Development Coordination Division

Page 76 of 84

Annex 2 – MFEM Travel MFEM documents all travel attended by employees and the costs, these can be found on the website. During 2014/15, 31 people travelled overseas to

either attend meetings or workshops at a total cost of $27,571.

NAME WHERE TO NAME OF MEETING OFFICIAL

DATES

FUNDED BY WEBSITE WHERE

AVAILABLE

AMOUNTS

COVERED BY

MFEM

Per

Diem

Air

Fares

Accom. Total

Philip Eyre Wellington,

NZ

UAT Testing for RMS 30-3 Jul MFEM 955 1,841 836 3,632

Chiavanni LeMon Wellington,

NZ

UAT Testing for RMS 30-3 Jul MFEM 1,337 2,192 965 4,494

Amelia Nooapii Wellington,

NZ

UAT Testing for RMS 30-3 Jul MFEM 1,337 2,192 859 4,388

Richard Neves Nadi, Fiji High Level

dialogue/workshop on

enhancing macroeconomic

resilience to natural

disasters and strengthening

fiscal frameworks in Pacific

islands

22-25

Jun

PFTAC and

Australian

Government

www.pftac.org 0 0 0 0

Tearii Maurangi Nadi, Fiji Workshop on enhancing

macroeconomic resilience to

natural disasters and

strengthening fiscal

frameworks in Pacific islands

22-25

Jun

PFTAC and

Australian

Government

www.pftac.org 0 0 0 0

Marion Larsen Nadi, Fiji Market access and PSR

workshop

22-26

Jun

Pacer Plus 0 0 0 0

Andrew Haigh Koror, Palau 17th OCD Annual Conference 22-24

Jun

MFEM 672 2,906 700 4,278

Page 77 of 84


DATES


AVAILABLE

AMOUNTS

COVERED BY

MFEM

Per

Diem

Air

Fares

Accom. Total

Garth Henderson Suva, Fiji 11 EDF Regional Steering

Committee for the Pacific

16-17

Jun

EU

Taggy Tangimetua Suva, Fiji Paris21 Data Dissemination

Workshop

1-5 Jun Paris21 0 0 0 0

Taggy Tangimetua Nadi, Fiji Pacific Statisticians Steering

Committee (PSSC) Bi-Annual

Meeting

25-29

May

SPC 0 0 0 0

Walter Tangata KL, Malaysia MTCP: International course

for ASEAN and PIF countries

senior officers of Customs on

narcotics identification and

narcotics law enforcement.

18-29

May

The Royal Malaysian

Customs Academy

(AKMAL)

0 0 0 0

Mareta Katu Suva, Fiji PIANZEA Bridge Workshop 5-15

May

PIANZEA http://www.pi

anzea.org

0 0 0 0

Taggy Tangimetua London, UK UK 2015 Election

Assessment Mission

2-9 May Commonwealth

Parliamentary

Association (CPA) UK

and CPA-NZ

http://www.uk

-

cpa.org/events

-projects/uk-

election-

assessment-

mission/

0 0 0 0

Garth Henderson Baku,

Azerbaijan

ADB Governors Annual

Meeting

1-5 May MFEM http://adb.org 777 4,669 1,505 6,951

Richard Neves Jakarta,

Indonesia

Asia-Pacific High-Level

Consultation on Financing

for Development

29-30

Apr

ESCAP/MFEM 0 168 0 168

Andrew Haigh Nadi, Fiji Compliance Planning

Workshop

28-1

May

Page 78 of 84


DATES


AVAILABLE

AMOUNTS

COVERED BY

MFEM

Per

Diem

Air

Fares

Accom. Total

Kevin Hosking Nadi, Fiji Workshop on commonly

used statistical classifications

in the pacific

27-1

May

SPC http://www.sp

c.int/sdd

0 0 0 0

Philip Eyre Manila,

Philippines

Automatic Exchange of

Information

27-29

Apr

Asian Development

Bank

http://adb.org 0 0 0 0

Andrew Forbes Manila,

Philippines

Automatic Exchange of

Information

27-29

Apr

Asian Development

Bank


David Toleafoa Suva, Fiji Extractive industry:

Leveraging impact of fiscal

regimes for investment and

growth.

14-16

Apr

Fiji Revenue and

Customs Authority

MFEM

600 0 400 1,000

Taggy Tangimetua Auckland,

New Zealand

UNFPA Asia Pacific Dialogue

on Post 2015 Development

Agenda

7-10

Apr

UNFPA http://country

office.unfpa.or

g/pacific

0 0 0 0

Kevin Hosking Geneva,

Switzerland

Cook Islands Delegation to

Geneva as NGO

representative for the Cook

Islands

1-12

April

Disability rights fund

(DRF)

0 0 0 0

Edwina Matenga Manila,

Philippines

Procurement Meeting 30-31

Mar

Asian Development

Bank


Peter Tierney Manila,

Phillipines

Global partnerships

Workshop

23-27

Mar

Asia Pacific

Development

effectiveness Facility

0 0 0 0

Nga Takaiti Suva, Fiji Arrear, filling and payment

workshop

23-26

Mar

PFTAC https://pftac.o

rg

0 0 0 0

Andrew Haigh Suva, Fiji Tax Administration

Workshop

4-6 Mar PFTAC https://pftac.o

rg

0 0 0 0

Page 79 of 84


DATES


AVAILABLE

AMOUNTS

COVERED BY

MFEM

Per

Diem

Air

Fares

Accom. Total

Philip Eyre Suva, Fiji Tax Administration

Workshop

4-6 Mar PFTAC https://pftac.o

rg

0 0 0 0

Richard Neves Canberra,

Australia

Meeting with Royal

Australian Mint

3-4 Mar MFEM 533 1,607 2,140

Maria Ioane Canberra

and Sydney,

Australia

Pacific appliance labelling

and standards and lighting

workshop

23-27

Feb

Secretariat of the

Pacific Community

https://spc.org 0 0 0 0

Kevin Hosking Nadi, Fiji Pacific Regional Conference

of Disability 2015

16-20

Feb

Pacific Disability

Forum (PDF)

Website:

www.pacificdis

ability.org

0 0 0 0

Angelia Williams Canberra,

Australia

Public Financial

Management

16-27

Feb

P/ADF/MFEM 520 0 0 520

Lavinia Tama Lima, Peru conference of the parties

serving as the meeting of the

parties to the Kyoto protocol

1-12

Dec14

UNFCCC 0 0 0 0

Andrew Haigh Mexico City,

Mexico

Competent authorities

AEOI Training

1-2

Dec14

3-5

Dec14

MFEM 1,000 3,742 1,587 6,329

Angelia Williams Suva, Fiji NZ International

development studies

network biennial conference

(NZ).

Regional ODA evaluation

workshop (KL)

27-3

Dec14

Japanese

Government

http://www.ge

ography.otago.

ac.nz/devent_c

onference_201

4

253 0 0 253

Edwina Matenga Suva, Fiji NZ International

development studies

network biennial conference

27-3

Dec14

Japanese

Government

http://www.ge

ography.otago.

ac.nz/devent_c

253 0 0 253

Page 80 of 84


DATES


AVAILABLE

AMOUNTS

COVERED BY

MFEM

Per

Diem

Air

Fares

Accom. Total

(NZ).

Regional ODA evaluation

workshop (KL)

onference_201

4

Taggy Tangimetua Bangkok,

Thailand

Ministerial conference on

civil registration and vital

statistics

24-28

Nov14

SPC 0 0 0 0

Adam Sumbak The Hague,

Netherlands

Organisation for the

Prohibition of Chemical

Weapons (OPCW) 16th

Annual Meeting of National

Authorities

26-29

Nov14

OPCW www.opcw.org 0 0 0 0

Walter Tangata Apia, Samoa To meet cruise shipping

Samoa and perform Customs

clearance as it enters Cook

Islands

22-4

Dec14

Matina Travel 0 0 0 0

Wayne Robati Cairns,

Australia

Pacific region immigration,

identity and intelligence

program. Level1

PRIIP/Intelligence.

Introduction to Intelligence.

7-13

Nov14

NZ Government 0 0 0 0

Andrew Haigh Berlin,

Germany

Global Forum on

transparency and exchange

of information for tax

purposes annual meeting

28-29

Oct14

MFEM 750 3,500 1,500 5,750

Philip Eyre Suva, Fiji Taxpayer Services

Management

27-31

Oct14

PFTAC 0 0 0 0

Amelia Ngatokorua Suva, Fiji PFTAC regional national

accounts statistics seminar

27-31

Oct14

PFTAC 0 0 0 0

Page 81 of 84


DATES


AVAILABLE

AMOUNTS

COVERED BY

MFEM

Per

Diem

Air

Fares

Accom. Total

Pokoina Matara Niue,

Palmerston

and Aitutaki

Enter and Clear Cruise vessel

MV Silver Explorer

20-25

Oct14

Matina Travel 0 0 0 0

Taggy Tangimetua Nadi, Fiji Pacific Statistician Steering

Committee (PSSC)

20-24

Oct14

Walter Tangata Singapore Regional training course for

Customs authorities of states

parties in Asia on technical

aspects of the transfers

regime of the chemical

weapons convention

14-17

Oct14

OPCW 0 0 0 0

Ngapoko

Ngatamaine

Wellington,

New Zealand

PACER PLUS Workshop on

Rule of Origin

2-3

Oct14

EU-OCTA 0 0 0 0

Peter Tierney Apia, Samoa Workshop developing

funding proposals for

adaptation

15-20

Sep14

MFEM http://www.si

ds2014.org/

600 1,300 1,000 2,900

Tuaine Unuia Apia, Samoa Pacific Islands Australia New

Zealand Electoral

Administration (PIANZEA)

Bridge workshop

22-26

Sep14

PIANZEA 0 0 0 0

Peter Tierney Apia, Samoa UN Conference on Small

Island Development States

(SIDS)

26-4

Sep14

MFEM http://www.si

ds2014.org/

1,125 1,300 1,280 3,705

Jim Nimerota Tokyo,

JAPAN

Improving Capability in

Producing Official Statistics

Relating to MDGs Indicators

(Junior-Middle Level)

12Aug-

20

Dec14

JICA 0 0 0 0

Page 82 of 84


DATES


AVAILABLE

AMOUNTS

COVERED BY

MFEM

Per

Diem

Air

Fares

Accom. Total

Maria Ioane Christchurch,

NZ

Customs Induction Training 4-22

Aug14

MFEM

NZ Customs

2,000 1,071 0 3,071

Kevin Hosking Nadi, Fiji Gender Statistics and HR

reporting

4-8

Aug14

SPC 0 0 0 0

Andrew Haigh Suva, Fiji PITAA Heads meeting 23-25

Jul14

PFTAC 0 0 0 0

Adam Sumbak Delhi, India Organisation for the

prohibition of chemical

weapons (OPCW) 12th

annual meeting of member

state parties from the Asia-

Pacific region.

16-18

Jul14

MFEM

OPCW

www.opcw.org 0 0 260 260

Akisi Rokovunisei Suva, Fiji 2014 International

Accounting Standards

Workshop

21-25

Jul14

PFTAC www.imf.org 0 0 0 0

Siva Gounder Nadi, Fiji Regional GFS: Balancing the

framework seminar

21-30

Jul14

PFTAC www.abs.gov.a

u;

www.imf.org

0 0 0 0

Kevin Hosking Nadi, Fiji Regional GFS: Balancing the

framework seminar

21-30

Jul14

PFTAC www.abs.gov.a

u;

www.imf.org

0 0 0 0

Richard Neves Honiara,

Solomon Is

Forum Economic Ministers'

Meeting (FEMM)

8-11

Jul14

MFEM

PFTAC/PIFS (airfares)

987 0 702 1,689

Page 83 of 84

Annex 3 – Capital Expenditure

The original capital expenditure plan for which MFEM was responsible is provided below, in some

instances, particularly in the case of Te Mato Vai, budget execution is reliant on other development

partners such as China and New Zealand.

2014/15 2015/16 2016/17 2017/18

Te Mato Vai Cook Islands Contribution 4,296 12,741 3,760 0

Te Mato Vai Local Management 560 0 0 0

Rarotonga Water Tank Subsidy 873 0 0 0

Procurement Website 150 0 0 0

RMS Web lodgement System 275 0 0 0

Chinese Pearl Equipment 500

Total MFEM 6,654 12,741 3,760 0

Capital Distribution Fund (CIG) 200 200 200 200

Outer Islands Small Capital Fund (CIG) 110 110 110 110

Total on Behalf of Crown 310 310 310 310

Te Mato Vai

Stage 1 of Te Mato Vai is expected to be physically completed by December 2015. Stage 2 has gone

through a tender process, the results of which are expected to known by November 2015.

Rarotonga Water tank Subsidy

The Rarotonga water tank subsidy has seen an:

• increase in the water storage capacity of Rarotonga by a nominal 9,450,000 litres;

• provided 1,575 households and non-government organisations with improved fresh water supply,

The rate of installation has fallen and is assumed to continue at the current rate until completion in

December 2015. with 1,575 tanks installed, the programme has currently reached 78.3% of its

outcome set in 2012 with six months remaining.

RMS Web Lodgement System

The RMS web lodgement system will improve services to the public by allowing tax agents to register

and file tax monthly PAYG and VAT returns online, and also have access to the RMS system to see

client’s tax statements.

This first phase of the RMS web lodgement system has now been under user acceptance testing and

is expected to be launched in early 2015/16 after an initial delay caused by the election. A further

$300,000 was provided in 2015/16 to expand the online service to income tax for companies and

individuals.

Page 84 of 84

Cook Islands Government Procurement Website

There is a significant effort being undertaken to improve procurement overall within government,

central to this effort is the continual improvement of the central online procurement portal

(www.procurement.gov.ck) to ensure the private sector are kept informed of current and future

contracting opportunities.

Capital Distribution Fund and Outer Islands Small Capital Fund

The Ministry of Finance and Economic Management (MFEM) administers a Capital Distribution Fund

for small capital including vehicles and equipment. This fund is allocated on a priority basis by the

Capital Fund Coordinating Committee. In 2014/15, around $172,000 was spent on the following items:

• Twenty vehicles for the use at the constitutional celebrations and FEMM -$597,000;

• Air conditioning Units for the courthouse - $17,363;

• Replacement van for Ministry of Education - $35,990; and

• Bulk Computer Purchases for government agencies on cookislands.gov.ck - $119,107.

The Outer Islands Small Capital Fund, also administered by MFEM, is for small capital purchases such

as ICT equipment and machinery parts, a set amount is allocated to each island.

i http://www.mfem.gov.ck/images/Withholding_Tax_on_Royalty_Payments.pdf ii http://www.mfem.gov.ck/mfemdocs/treasury/654-budget-book-2-201415/file iii http://www.mfem.gov.ck/mfemdocs/treasury/654-budget-book-2-201415/file iv http://www.mfem.gov.ck/pfm-road-map v http://www.mfem.gov.ck/mfemdocs/treasury/654-budget-book-2-201415/file vi http://www.mfem.gov.ck/mfemdocs/ceo/819-20150319-ps-global-forum-phase-2-peer-review/file

And http://www.oecd.org/ctp/global-forum-on-transparency-and-exchange-of-information-for-tax-purposes-

peer-reviews-cook-islands-2015-9789264231450-en.htm vii http://www.mfem.gov.ck/images/Withholding_Tax_on_Royalty_Payments.pdf viii http://www.mfem.gov.ck/mfemdocs/treasury/654-budget-book-2-201415/file ix http://www.mfem.gov.ck/mfemdocs/treasury/654-budget-book-2-201415/file

Documents

20150910 MFEM Annual Report 2014-15 Final to put on the website