Home Governance GAC Releases GOL Consolidated Accounts Audit Result: Bleeding Coffers!… As Report Uncovers How Liberia’s Money Was Shared

GAC Releases GOL Consolidated Accounts Audit Result: Bleeding Coffers!… As Report Uncovers How Liberia’s Money Was Shared

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MONROVIA: The acclaimed State-owned General Auditing Commission (GAC), has released the results of its compliance audit report on the Government of Liberia’s Consolidated Accounts at the Central Bank of Liberia (CBL).

According to the audit report, several Financial Management Laws including Public Financial Laws and Amended financial regulations were not followed, and most of the transactions were characterized by financial irregularities.

The audit also drew attention to the sheer scale of the true balances of the Nation’s Consolidated funds amidst different values of the balances as published by the former and current administrations of the Government of Liberia.

The efforts showed irregularities associated with the erstwhile administration, then, led by the Coalition for Democratic Change (CDC), which borrowed from the Central Bank of Liberia (CBL), a whooping US$83.05 Million.

Auditors found out that the CBL financed the Government of Liberia payroll account on November 30, 2023, in the amount of US$50.2 million for payment of salaries without any evidence of ratification by the National Legislature.

“However, Management (CBL) is in breach of Article 34 d(iii) of the 1986 Constitution of Liberia and the CBL Act of 1999 as Amended and Restated 2020,” the Auditor General of Liberia, P. Garswa Jackson, disclosed in the audit report.

“Management did not ensure that borrowing from the CBL in the amount of US$83.05Million to finance the Consolidated Fund Account on December 22, 2023, was consistent with CBL Act of 1999 as Amended and Restated 2020 and ratified by the National Legislature,” the report indicated.

The GAC report also established that several individuals and institutions received checks.
According to the GAC audit report, on December 13, 2023, three checks were released to the MCC.

They include Checks# 01524 with the amount of US$59,909.00; Check#01526 with the amount of US$60,000.00 and Check#01526, valuedUS$60,000.00.

Additionally, on January 9, 2024, the CBL released US$755,000.00 to the MCC, the audit report revealed.

The GAC report also indicated the CBL released two checks with numbers: H30 and H31, valued US$7, 799, 095 and US$23, 397, 286.00 on the same day of February 16, 2023.

Besides other top officials mentioned in the GAC reports, individuals and agencies that received outstanding checks included Lydia Johnson Nathan, US$4,500.00, with CH#01584; Mitta M. Varmah, US$4,500 with CH#0158.

According to the audit report, both Lydia and Mitta received on January 4, 2024 respectively.

Moreover, the GAC audit report shows that some individuals and agencies received payments several times.

For instance, John K. Chowoe received payments on ten (10) occasions, amounting to over US$100,000.

Other institutions such as Amanita & Son Inc.; Petrol Trade, Saksouk Shopping Center and GLOBAL BANK LIBERIA LTD among others received multiple payments, according to the GAC audit report.

While the audit did not call out specific instances of fraud, it did point to, “Consolidated Fund Account had several stale/outstanding cheques, amounting to US$9,144,138.95 and L$457,680,522.71 as at January 17, 2024, and then US$11,836,676.49 and L$457,680,522.71 as at January 19, 2024.”

The GAC audit findings seem to have corroborated concerns raised last month by Representative Richard Nagbe Koon of Montserrado County that the Central Bank of Liberia (CBL’s) decision to borrow money to the erstwhile Government, then led by former President George Weah without the Legislature’s approval violates the laws of the country.

The audit report indicated that the Government obtained additional financing of US$32.85 Million on December 23, 2023, from the CBL to subsidize the settlement of salary payments and the upholding of commitments to commercial banks.
Most of the financial transactions are without evidence of ratification by the National Legislature, something which runs contrary to Article 34 d (iii) of the 1986 Constitution of Liberia and Section 46.2 of the CBL Act of 1999.

The auditors observed irregularities associated with the Consolidated and Transitory accounts as there was no evidence that all of the consolidated accounts were reconciled on a monthly basis by MFD.

The GAC also reported that there was no evidence that cash receipts in the transitory accounts were reconciled to bills raised by the Liberia Revenue Authority (LRA), the revenue sharing agreement with entities and the sweep / amounts remitted to the Consolidated Accounts.

The audit report further asserted that revenues collected in Transitory Accounts at commercial banks were not swept timely in accordance with the Regulation H.9 of the PFM Act of 2009 as Amended and Restated 2019.

The GAC contended the risk associated with financial irregularities is that failure to prepare timely bank reconciliation may lead to untimely or non-detection of errors, omissions and fraud and Management may not fully account for all its transactions.

Besides, 2.1.12 Funds remitted from the transitory account to the Consolidated Accounts may be misstated.

Besides, funds collected by the commercial banks through the transitory accounts may not be remitted in a timely manner and this may lead to misappropriation of Government funds, the GAC averred funds.

The auditors found in many cases the CBL loan documents, the repayment of the loan principal was scheduled from 2029 to 2044, leading auditors to point to noncompliant, citing Section 46.2 of the CBL Act of 1999 as Amended and Restated 2020.

Accordingly, without going into the specifics, the audit report noted that the CBL did not prepare periodic/regular reconciliation of the Transitory Revenue Accounts domiciled at commercial banks.

“Management should facilitate timely remittance of funds collected through the transitory accounts to the Consolidated accounts consistent with the approved existing memorandum of understanding (MOUs),” the Auditor General of Liberia recommended.

The report noted that several cheques, amounting to US$11,836,676.49 and L$ 457,680,522.71 were issued beyond the statutory six (6) months period and had not been cashed by the respective payees as at January 19, 2024.

The Central Bank of Liberia (CBL) which is at the center of the audit report argued against the audit report, justifying its action.

“The CBL Management, in line with the BOG’s resolution, worked with the MFDP and the Ministry of Justice, to consummate a loan agreement due to the financial constraints cited by the President and the loan was granted. Considering the urgency expressed by the President, the MFDP is expected to seek the necessary ratifications in line with the Public Financial Management (PFM) Act. 2.1.12,” said the CBL in a statement.

“The CBL would like to clarify that the loan granted the GOL was intended to service payroll transactions as requested by the President and not for settling “operational expenditure” as suggested by the audit observation.”

The GAC said, the Consolidated Fund Account as at January 17 and 19, 2024 had reconciled balances of US$ 3,378,848.89 and US$6,918,142.97 respectively per its procedure’s performance. Details of the GAC audit report will be published in our subsequent editions.

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