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: Russell.thomas@cookislands.gov.ck
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: richard.neves@cookislands.gov.ck

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

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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.

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• 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.

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• 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.

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• 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.

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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

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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

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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.

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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.

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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.

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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.

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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.

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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

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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.

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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.

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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

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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.

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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

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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
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 29April, 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
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
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
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.

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

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

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