The NEWS (Monrovia)
10 November 2008
Monrovia — Audit conducted by the General Auditing Commission (GAC) on the National Social Security and Welfare Corporation (NASSCORP) covering the financial year 2005/6 and 20067 have revealed over spending and other illegal payments of honorarium and stipend to board members.
The report indicated that between July 2005 and July 2007, the Board of Directors of NASSCORP awarded four increases in the remuneration it established and paid itself. The report added that the changes in the remuneration occurred at intervals of about six months within the above period, noting that as of July 2007, the remuneration of the Board enjoyed averaged 196% over and above that earned in July 2005.
However, the report said it was unclear what considerations triggered the changes and the remuneration levels the Board decided on.
According to the GAC, though NASSCORP Decree is explicit that the Director General of the entity shall not receive Board remuneration, the current Director General Francis Cabbah and his immediate predecessor participated in honorarium and stipend payments made to the Board amounting to US$17,750.
GAC audit also discovered that other members of the Board, though not entitled to honorarium and bonus, received same.
The report added that these payments came to US$190,645 and advances amounting to US$27,250 were also paid to some Board Members, regardless of the fact that this is not provided for in the NASSCORP's Decree.
The GAC audit report also pinpointed that some members of the Board did not attend Board meetings, yet collected honorarium/stipends.
"The practice of the Board establishing remuneration to be paid to itself could prove draining to the Corporation, as there are no checks and balances on the level of remuneration it may decide to pay itself.
NASSCORP Board of Directors involvement in financial transactions of the corporation implies that the Board plays an executive role in the governance of the corporation rather than a supervising or over-sight Board, as provided for in the NASSCORP Decree," the GAC audit further revealed.
The audit said the current salaries enjoyed by all NASSCORP personnel (both management and other personnel) are without approval from competent authorities, as provided for in NASSCORP Decree.
The Director General salary is by the dictates of NASSCORP Decree, required to be approved by the President of the Republic. According to the audit report, despite instruction from President Ellen Johnson-Sirleaf not to increase his salary and his deputies, NASSCORP's Director General ignored the President's directive.
The GAC audit report also disclosed that NASSCORP did not adhere to the provisions of the Public Procurement and Concessions Commission (PPCC) Act in procurement of goods and services.
"Procurement methods provided for, depending upon thresholds for goods and services bought, as stipulated in the Act were not followed.
Consequently, control procedures provided for under the various levels of competitive bidding for efficient screening and selection of lowest responsive evaluated bidder were not undertaken.
Similarly, procurement of long-term assets was beset with irregularities. In some instances, there were no documents to support the purchases made, whilst others were not acquired on the basis of at least three quotations.
The procurement procedure used by the Corporation before the advent of the PPCC Act was also not adequate," the report stressed.
Furthermore, the report said long-term assets reported in the cash book and Inventories Register did not coincide with DVs amounts in certain instances.
According to the report, as at 30 June 2007, a number of the Corporation's vehicles, as detailed per Annexure (6), were yet to be accounted for. The above lapses observed denied assurance that all goods and services procured in the periods under review were obtained, and also procured on the basis of lowest responsive evaluated bids.
On account of this, the reporting of financial performance and position for 2005/6 and 2006/7 was again distorted.
The audit report said NASSCOROP management used rate of per-diem not provided for in the extant Executive Ordinance No. 8 for payment of both management personnel and other personnel of the Corporation, who undertook foreign travels from 2007 onwards.
The non-compliance with the existing regulatory framework resulted in over-payment of US$6,671 of per diem allowances to some NASSCORP management personnel and other staff.
Additionally, documentation required by the regulatory framework to support payment for foreign travels were not sighted in many instances, adding that management's non-compliance with the regulatory framework could cost the Corporation substantially.
The GAC also unraveled US$27,500 supposedly paid to some government officials as commission for facilitating the discharge of Government of Liberia (GOL) indebtedness to NASSCORP was fraught with irregularities.
These payments, according to the report, were channeled through some staff of NASSCORP, some of whom claimed that they gave back monies received from the Deputy Director General (DDG).
The GAC report added that the Deputy Director General accepted receiving the money for distribution to the Ministry of Finance staff, but could not provide evidence of the disbursements made.
GAC report: "Instead of the established procedure instituted by the Corporation for its disbursements, six instances were noted where letter payment instructions, with total value of US$515,434.61, were issued by Management of NASSCORP without supporting Disbursement Vouchers, to effect payments to Promoting Accountability, Transparency, Integrity and Fiscal Probity."
The audit report also detailed how NASSCORP's investment portfolio is embedded with inadequacies and lack of profitability.
Records on NASSCORP's investment portfolio as at 30 June 2007 were wholly inadequate, as there was no evidence on conceptualization of investment projects, surveys undertaken to determine the feasibility and profitability of projects, analysis of conceptualized project to ensure compatibility with NASSCORP's financial profile as well as compilation of strategic action plan for management decision making on investment projects.
"As at 30 June 2007, of the 33 investments with conservative value of US$11,481,579.80 which available records indicated were comprised in NASSCORP Investment Portfolio, 18 were non-performing and their recoverability was in doubt," the report noted, adding "the 18 non-performing investments had a conservative value of US$9,733,067.13.
GAC warned that the Corporation may suffer legal damages from legal actions taken against it by parties and construction firms that had worked on some of the Corporation's landed properties.
The GAC report said the corporation's efforts at recovering its delinquent investments had so far been met with minimal success. Management intention to pursue the recovery through the courts could prove costly, and even with that, there was no certainty that the intended action would yield results.
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