MONROVIA: Srimex, an oil and gas company, owned by one of Liberia’s leading business tycoons, Musa Hassan Bility, along with other business entities, has been seriously entangled in enormous debts originating from the National Road Fund.
Bility who is globally, a controversial personality and vocal Liberian politician is the embattled Chairman of the opposition Liberty Party (LP).
According to authoritative reports and dossiers, Bility’s Srimex is owing the National Road Fund (NRF), a whopping US$4, 753,129 while another petroleum company, identified as Conex Petroleum Service, is indebted to the NRF in the amount of US$ 8,126,797.
The State-owned General Auditing Commission (GAC), has reported to the National Legislature that its “review of financial documents of the National Road Fund (NRF) for the fiscal years (2019/2020) listed companies” that are owing the Liberian government.
GAC’s former Auditor-General, Madam Yusador S. Gaye (late), “PERFORMANCE AUDIT REPORT’ released in February 2021, On Road Maintenance and Rehabilitation in Liberia captured at least nine oil and gas companies including Srimex that are indebted to the National Road Fund (NRF) in the amount of US$22, 212, 538.00 for petroleum tax levied for road maintenance and rehabilitation, as of June 30, 2020.
According to the GAC report, the nine petroleum companies include Conex Petroleum Service, US$ 8,126,797; Srimex Oil and Gas Company, US$4,753,129; Kailondo Petroleum, US$167,271; Petro Trade, US$1,087,347 and Aminata & Sons, US$2,804,030.
Others are MOTC, US$1,736,894; Nexium Petroleum US$488,260; West Oil Investment, US$2,858,565; and NP Liberia, US$190,245.
The total amounts owe the GOL for the National Road Fund, according to the GAC, is US$22,212,538.
GAC said the petroleum companies’ records were contained in the National Road Fund’s (NRF) Financial Statement 2019/2020, provided by the Management of the National Road Fund’s (NRF).
However, in an apparent attempt to clarify some of the GAC’s concerns in the audit report, the National Road Fund said “All transfers to the Road Fund shall be made into the Road Fund Account designated by the Minister of Finance and Development Planning and established in this Act.”
NRF authorities told GAC auditors that “where funds are to be transferred from, or through the MFDP, the Minister of Finance and Development Planning shall agree on a schedule of transfers with the National Road Fund Manager prior to the commencement of each fiscal year.”
NRF added that “All agencies, other than the MFDP, mandated to collect user charges identified in this Act, shall: (a) Set up mechanisms for the transfer of funds to the Road Fund Account; (b), Prepare annually and at least 4 months in advance of each fiscal year, a forecast of funds that will be made available to the Road Fund, including an analysis of factors, which may affect the flow of funds as planned; (c) Prior to the commencement of each fiscal year, agree with the National Road Fund Manager a schedule of transfers to be made throughout the fiscal year.”
The NRF, in its response, also informed the GAC auditors that “all transfers to the Road Fund Account shall be accompanied by a statement of account, providing details of the amount transferred, a breakdown of sources if applicable, the basis of the allocation and evidence of receipts on which the allocation has been based. The above statement is part of the Road Fund Act that gives support to the above finding.”
Relative to the Liberia Revenue Authority (LRA) fuel levied collection, the NRF response to the GAC stated that the “Liberia Revenue Authority fuel levies collection reconciled reports for the periods 2018- 2019 to 2019 / June 2020 amounted to United States Dollars equivalence of $48,364,114.
Of this amount, the Ministry of Finance and Development Planning transferred to the National Road Fund Escrow Account at Central Bank of Liberia a total of US$28,005,540 equivalent.
NRF manager told GAC that “during the fiscal year 2019/2020, US$7,000,000.00 was withheld from the Funds collected by LRA as the NRF direct budgetary support to the Government of Liberia as per the approved National Budget 2019/2020 by the National Legislature.
The MFDP wrote the NRF requesting US$7 million for budget support for 2019/2020 and this amount was approved by the Inter-Ministerial Steering Committee (IMSC) of the NRF in an IMSC called meeting at which time a resolutions was passed by the Committee.”
NRF says the total revenue collected by LRA in the same fiscal period (2019/2020) was over US$23 Million recast downwards to US$12 million, thus reducing the NRF revenue by US$11 million.
The NRF stressed: “We acknowledged strives made by the government in making remittances or transfer of monies collected by the LRA from fuel levies to the NRF Escrow Account and also recognized challenges that COVID-19 and other worldwide economic challenges faced by the Government of Liberia. Additionally, the 7 million budget support was communicated to our international partners by GOL / MFDP.”
Howbeit, GAC said in the course of the audit, “we interviewed six contractors working on different county roads (CICO, SSF, Quality Group of Companies, Sidani Group Holding, Cemmats Group Limited and MDMC) who indicated that the Ministry of Public Works through the National Road Fund has not been able to adhere to the payment schedules as indicated in the contracts.
For example, “payment certificates submitted for work done takes an average of 90 days to be honored against the stipulated 30 days as per the conditions of the contract. We noted through our interviews with the contractors that such delayed payments contribute significantly to the delay in the completion of works as the contractors will normally suspend work till payments are made. We further noted that most times contractors borrow money from commercial banks upon winning contracts in anticipation of repayment upon receipt of their installment as indicated in the contract document. On the contrary, they are experiencing increase interest on loans from commercial banks due to the failure of the Ministry of Public Works through the National Road Fund to pay on time,” the auditors said.
Clarifying media reports as regard claims that millions of dollars have been diverted from NRF, the Management of the National Road Fund of Liberia (NRF) says it is deeply troubled by what it refers to as misleading and unprofessional story published by a local daily.
The NRF, in a statement issued in Monrovia over the weekend mentioned that the General Auditing Commission, (GAC) issued an Unqualified Opinion with emphasis on matter relating to receivables due from petroleum importers which cannot constitute any amount of fraud, waste and abuse at the entity.
The NRF management’s reaction to the media further stated: “Per Certified Public Accounting Standards, an unqualified opinion is an audit report that has been issued with no reservations regarding the state of an audited client’s financial statements and that the auditors followed a standard opinion format to state that the financial statements are a fair representation of the financial results and condition of a client, in accordance with the applicable accounting framework.”
The NRF noted that a financial or audit report requires empirical interpretation and comprehension and as such, it is prudent for the writer to widen his scope of understanding of the content of the report by reaching out to the GAC for authoritative interpretation.
The statement mentioned that the GAC’s Opinion is a legacy issued prior to the operationalization of the National Road Fund Office in Liberia on May 1, 2018.
“All expenditure has been fully accounted for and, The GAC further highlighted in its audited report, constant violations of the Act that created the National Road Fund. The Liberia Revenue Authority collected US$53,018,871.54, covering the period July 1, 2018 through June 30, 2020, and deposited the money into the Government of Liberia Consolidated Fund Account instead of the National Road Fund Escrow Account as required by the Road Fund Act,” NRF statement said.
NRF also explained that the Consolidated Fund Account is the Government’s general revenue account that is controlled by the Ministry of Finance and Development Planning (MFDP).
Out of the US53, 018,871.54 collected, the statement said, the amount of US$28,152,231 was remitted to the NRF Escrow account, thereby leaving an unremitted amount of US$24,866,637.54.
“In the fiscal year 2019/2020, the GAC observed that the MFDP withheld the total amount of US$7,000,000.00 from the petroleum levy fees collection as National Road Fund support to the National Budget, as a result of consultative agreements between our international partners, including the International Monetary Fund and the World Bank, and also because of economic constraints due to the Covid 19 pandemic.
The management of the National Road Fund indicated to the GAC that the amount was requested by the MFDP to assist the Government meets its payroll obligations,” the statement noted.
The statement: “The report says the program objectives of the National Road Fund will not be met when funds intended for road works are used for purposes not intended.”
In a letter addressed to the National Road Fund of Liberia, and written by the Auditor-General of Liberia, he expressed an unqualified report, in which he mentioned that financial statements were fairly presented in material aspects, statements of receipts and payments as of June 30, 2020. Reading is one thing and comprehending requires a higher standard of research, scholarship and understanding of financial information,” the NRF averred.
