26 June 2014

Liberia: NPA, RIA in the Dock - Audit Cites Flaws, Irregularities in Operations

Monrovia — Transparency and accountability remains a major challenge for the Government headed by Nobel laureate Ellen Johnson Sirleaf. Her critics blame the lack of political will in prosecuting corruption and other acts of improprieties as the major reason for the continuation of a broken system that is creating an easy means for fraudsters.

Audit reports of several ministries and agencies of government have pointed to lack of proper internal controls and other procedures in safeguarding state resources, but since some of these audits were conducted more than six years ago, some entities audited are yet to implement recommendations contained in audit reports.

The Public Accounts Committee (PAC) at the National Legislature has been reviewing audit reports submitted to the Legislature by the GAC, conducting public hearings with auditees and the auditors in a bid to verify the findings of the audit reports. In its findings the PAC has been recommending amongst others that some individuals who served positions in government during the audited period restitute funds that were not accounted for during their reign.

A day after the committee recommended to the plenary of the body for former Minister of Gender Varbah Gayflor, former Personnel Director Stephen Bundo and Former Comptroller Stephen Forkpa should jointly be held accountable to make restitution of US$ 35, 576 to be deposited into an escrow account to be established by the Minister of Finance, the committee has again made recommendations concerning the Roberts International Airport and the National Port Authority.

Based on the General Auditing Commission report on the Roberts International Airport (RIA), the PAC in its report said, Paragraph 248 and 249 of the Auditor General's report recommend that the Managing Director of the RIA Abraham T. Simmons be sanctioned for violating the PPCC Act, 2005 provisions punishable under section 138.

Comptroller Confirms audit findings

The GAC recommended that in keeping with the PPCC act of 2005 the Managing Director, Abraham T. Simmons should be made to restitute the amount of US$ 35,950.00 into the corporation account, as payment made to a purported company he contracted to supply the RIA vehicle but failed to do so, thus causing loss to the RIA. According to the committee during the hearing, the Comptroller of the RIA confirmed the fact that payment was indeed made for the vehicle but it was never delivered to the RIA.

"The Committee recommends that Mr. Abraham T. Simmons should be sanctioned for violating the PPCC Act, 2005 provisions punishable under sectioned 138(1) of the PPCC Act, 2005 and that he restitutes the amount of US$ 35,950.00," the Committee recommended.

$120K bogus waiver

The committee's report also disclosed that the GAC found the RIA liable of irregularities and management override, stating an incident where the Managing Director Julius D. Dennis, Jr., unilaterally granted Comium Liberia Inc. a waiver of US$ 120,000 without the consent of the board of directors. The AG further observed that due to poor bookkeeping and inaccurate accounting the corporation failed to establish, from its own documents available, that Comium Liberia Inc., has an outstanding balance of US$ 37, 454 to pay to the corporation.

"The committee objects to the unilateral decision of former Managing Director of the RIA, Mr. Julius D. Dennis to grant a waiver of US$ 37,454 to Comium without the consent and approval of the Board of Directors", the PAC stated.

The committee continued "The Committee believes the waiver was inherent with fraud and an abuse of power by Mr. Julius Dennis. During the hearing, the Management of RIA admitted that the amount in question has almost fully recovered with a balance of 6,000.00 therefore, the committee recommends that a balance uncovered amount US$ 6,000.00 of the waiver, be recovered and deposited into an escrow account to be established by the Minister of Finance at the Central Bank of Liberia and flag receipt provided to the AG for verification,".

NPA weak policies

The legislative committee report also indicated that during audits conducted by the GAC on the National Port Authority (NPA) it was observed that landed properties of the Port were flout with fragrant violation of its own established lease policies.

According to the GAC, the NPA Incorporated of the Lease agreements was far lower than what is stipulated in the NPA's extant lease policies to the institution. It also cited ineffective managerial control and the understatement of lease agreements that created losses and lapses for the institutions' failure to pay liability due to the NPA.

At a Public hearing, according to the committee's report the NPA Managing Director Madam Matilda Parker, expressed strong reservation about inconsistencies with the lease policies at the NPA and in some instances the Board of Directors override of most of the policies.

"As a matter of policy to remedy these inconsistencies, she mentioned that the current management team is working towards improving the lease policies at the NPA. She also admitted that the observation contained in the report are not contestable," the Committee said.

In further comments the Legislative committee said, conflict of interest by lawyers representing the NPA and leaseholders was observed as it was stated that the Henries and Henries Law firm represented by Cllr. Cooper Kruah provided retained legal services to the NPA at a Monthly flat rate of US$ 1,000.00 and interestingly, Cllr. Kruah also served as the legal counsel for some NPA lease tenants such as Dong Young/Puk Yank fisheries, building material center and west Africa enterprises.

As a result, the committee recommended that Parker investigates the issue of conflict of interest; write a report to both the auditor general and the committee. The audit report stated that the Auditor General met with Cllr. Kruah where he admitted being retained legal service provider for Dong Young/Puk Yank fisheries stating that he was providing legal services for the company before he joined the NPA.

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