The Public Accounts Committee has highlighted the need for a Policy Framework, monitoring review, reporting and financial evaluations of any guarantee that Government has undertaken.

In their Special Investigation report into the audited reports of 2006-2009, the Committee highlighted that after 2000, Government undertook to become guarantees to Rewa Rice Limited for $1.9 million and Fiji Sports Council totaling $920,000 from 2001, 2002 and 2005.

The Committee even highlighted that a large component of guarantees and contingent liability as a percentage of the Gross Domestic Product for the country from 2001 until 2003 and added that a payment total of more than $206 million since 1995 in default cases of loan repayment and there was a large recurring default payment.

The Committee highlighted that there was an element of risk in Government guaranteeing entities and therefore proper management and careful monitoring was essential.

The Committee also highlighted that the guarantee process was solely conducted by the Ministry of Finance and that it excluded several essential factors like the guarantee ceiling, specification of purposes to which guaranteed loans were provided, as well as the market valuation for collateral.

Concerns were also raised that the monitoring was limited to desk reviews and in some cases no visits were made to the guaranteed entities.

As a recommendation, the Committee has called for the involvement of an advisory Board, the Ministry Of Public Enterprises to be involved in the guarantee approval process.