Monrovia — The General Auditing Commission (GAC) has presented four (4) audit reports to the National Legislature through the Joint Public Accounts Committee with copies sent to the President of Liberia in line with the Auditor General's statutory mandate as provided under sections 5.3 and 53.7 of the Executive Law of 1972.
The four audit reports are (a) the GOL's Consolidated Fund Financial Statements Audit for the fiscal year 2010/11, (b) the GOL's Consolidated Fund Financial Statements Audit for the fiscal year 2011/12, (c) William V.S. Tubman University audit for the fiscal years 2009/2010 through2011/2012 and (d) GOL's Subsidies to Cuttington University for the fiscal years 2006/2007 through 2011/2012.
The objectives of GOL's Consolidated Fund Financial Statements audit for the fiscal years 2010/11 and 2011/2012 were to express opinions on the Consolidated Funds financial statements for the two fiscal periods and to verify compliance with extant laws and regulations. Furthermore, reviews were undertaken to ensure that the audit satisfied the requirements of Section 53.7 of the Executive Law of 1972.
The objectives of the audit of GoL's Subsidies to Cuttington University for the fiscal years 2006/2007 through 2011/2012 were, among others, to obtain assurance that: subsidies appropriated by the National Legislature and disbursed to the Cuttington University were duly managed and accounted for; and financial transactions undertaken were in line with the Budget Laws, Financial Rules of Liberia and the Public Financial Management Act and its Regulations of 2009 as well as the PPC Act of 2005 and 2010 amendment.
The objective of the audit of the Tubman University (TU) for the fiscal years 2009/2010 through 2011/2012 were to evaluate the integrity of the systems operated by the TU in discharging its statutory mandate, and whether in practice the systems had been adhered to. The audit thus involved reviews as would enable the GAC to appropriately report on the attainment of the University's mandate, in line with Chapter 53.7 of the Executive Law of 1972.
The GAC observed during the audit of the Consolidated Funds financial statements for 2010/2011 and 2011/2012, that two (2) guidelines exist in governing the preparation of the Consolidated Fund financial statements, e.g., the combination of Regulation I.12, Public Financial Management Act Regulations and Government of Liberia policy statement on the adoption of the International Public Sector Accounting Standards (IPSAS) Cash Basis of Accounting. The application of the two guidelines produces two different sets of CF financial statements that cannot be reconciled with each other, thus impacting the validity of such statements produced.
The reports for the two fiscal years observed no evidence to indicate that Ministries, Agencies that form part of the Consolidated Fund financial statements for the period under review had prepared and presented quarterly financial statements to the Auditor-General, Minister of Finance and Comptroller General for the formulation of quarterly and yearly Consolidated Fund Financial Statements as required by law.
During the audit of the 2010/2011 Consolidated Funds Statements, there was no evidence that the Comptroller and Accountant General had prepared bank reconciliations on a monthly basis. Furthermore, the reports observed that there was no evidence that daily reconciliations on the general revenue account between the Bank Payment Slips with the manager's check receipt and matching the revenue to the daily collections listing and subsequently the bank statements were conducted. The Comptroller and Accountant General only submitted reconciliation for the month of June 2011 and the cashbook for April, May and June 2011 instead of the required twelve months according to the GAC.
The report observed that GAC requested expenditure vouchers for the fiscal year 2010/2011 amounting to US$135,498,835.65 for five ministries (Finance, Agriculture, Internal Affairs, Public Works and Education)from the Comptroller and Accountant General as a basis for comparison of the respective total expenditure presented in the Consolidated Fund financial statements. However, the Comptroller and Accountant General provided the GAC vouchers amounting to US$41,580,109.92 leaving a variance of US$93,918,725.75 which the Comptroller and Accountant General did not provide documentation.
On the audit of the 2011/2012 Consolidated Fund Financial Statements, the report observed that the Comptroller and Accountant General did not prepare monthly bank reconciliations for the Consolidated Fund for the period under review, nor were there daily reconciliations of the general revenue account. Also, the report indicated that the GAC did not find evidence that the Comptroller and Accountant General had prepared reconciliations of revenues accruing to the Government of Liberia through direct donor funding to the recipients. On account of these omissions, the GAC could not validate the Consolidated Fund Cash Balance of a deficit of ((US$20,012,000.00)) reported in the Consolidated Fund financial statements for the fiscal year 2011/12.
The reports noted that Ministries and Agencies that form part of the consolidated financial statements did not prepare financial statements for consolidation by the Ministry of Finance; In addition, the Ministry of Finance did not provide ledger records that could be used to formulate the consolidated financial statements. The GAC, according to the reports was thus unable to satisfy itself by alternative means the completeness of the amounts reflected in the consolidated financial statements for the fiscal years 2010/2011 and 2011/2012.
On the audit of Tubman University, the GAC observed that the Administration of Tubman University did not compile IPSAS Cash Basis financial statements for the three fiscal years under review, 2009/10, 2010/11 and 2011/12 as required by the Public Financial Management Act of 2009. The report further observed that the Revenue and Expenditure Statements as presented could not be validated due to the absence of cashbooks, trial balance, general ledgers, budget performance reports and notes to the statements amongst others that would facilitate the validation process. This limitation denied assurance that the revenue and expenditure statements as presented portrayed in all material respects, a true and fair view of Tubman University's operations for the three fiscal years.
The report noted that the University transacted business with 34 entities amounting to US$205,461.03 and L$ 9,997,33.38 that were not registered with the Ministry of Commerce during the audit period. Transacting with unregistered entities promotes unfair competition for businesses that are legally registered and are valid tax payers. Such a move is in violation of PPC Act, 2005 provisions.
The TU Audit report further noted that for the period under review, the Tubman University paid relocation allowances to 121 employees from the United States of America, the Philippines, Monrovia and other parts of the world paying a total amount of US$456,180 based on a relocation schedule that was not supported by documented and approved policy setting the criteria for such payments.
For the periods under audit according to the report, Cuttington University's (CU) total adjusted appropriation was US$2,919,220.00. This amount included US$508,626.00 for fiscal years 2006/2007 and 2007/2008 the university could not account for. As per the 2007/2008 budget laws, allotments to Cuttington University were to achieve the following objectives: provide room and board for students; give professional nursing instructions; provide recreational facilities; procure, install and commission a reliable students records information management system.
Except for 2007/2008 budget, the GAC did not sight spending items in CU budgetary appropriation for the rest of the fiscal years audited. The CU Management indicated that to meet its objectives, it used portion of the subsidies to purchase petroleum products to provide electricity and assorted food items for the provision of catering services to residents of the University.
The report further observed that the management of Cuttington University did not provide documents to account for a total of US$508,626.00 received from the Government of Liberia for the fiscal periods 2006/2007 and 2007/2008. The management of Cuttington informed the GAC that soft copies of the financial documents covering these two periods were unavailable because the QuickBooks accounting software that hosted CU's accounting data got corrupted. Hard copies of documents supporting the US$508,626.00 were also claimed damaged by the management of Cuttington University.
The audit of Cuttington University noted that Financial Rule 23 states that "payments on account of goods or services rendered shall be made only to the vendor or service provider". Third party payments in transactions of this nature are disallowed. However, examination of cash payment vouchers by the GAC revealed that there were 11 vouchers amounting to US$19,311.86 that were not paid in the name of individual or entities with which transactions were done but in the name of an employee of Cuttington University.
These payments were intended to purchase local food items. Further, according to the audit report, there were 3 vouchers amounting to L$333,895.00 also intended to purchase local food items that were not paid in the name of the individuals or entities with which transactions were done in violation of Financial Rule 23.
Given the significance of the matters raised in the audit reports, the GAC is therefore urging the Speaker and members of the House of Representatives, the Pro -Tempore and members of the Liberian Senate to consider the implementation of the recommendations urgently, the audit reports concluded.