19 May 2017

Liberia: GAC Uncovers Financial Improprieties With Executive Mansion Renovation Project

Monrovia — The Executive Mansion - seat of Liberia's executive branch of government - has over the last 11 years been a monument stripped of glory geographically standing before the Judiciary and the Legislature.

The historic building suffered a fire outbreak during Liberia's 159th Independence celebration.

The fire gutted the fourth floor where President Ellen Johnson Sirleaf was hosting her fellow heads of states that came for the celebrations.

The magnitude of the fire reportedly rendered the floor unusable to the President - dislodging her into the Ministry of Foreign Affairs where she has since been running the country.

There have been concerns within the public domain why the seat of the presidency has been neglected by President Sirleaf and why the renovation was taking forever to complete. Citizens have expressed fears that the next President may not have a legitimate home upon assuming office in January 2018.

Amid doubts and uncertainty over the renovation of the Mansion, a General Auditing Commission (GAC) audit on the renovation of the building uncovered several financial improprieties that could be responsible the delay in the renovation.

"It was observed that for the periods under audit a total amount of US$8,000,000.00 was appropriated for fiscal years 2006/2007 through 2009/2010 for the Executive Mansion Renovation Project per the approved National Budgets without evidence of allotment," the GAC observed.

Background

The audit of the Executive Mansion Renovation Project is the first undertaken by the Auditor-General of Liberia on the Executive Mansion Renovation Project.

It was requested by President Sirleaf and under the statutory mandate of the Auditor-General as provided for under section 2.1.3 of the GAC Act of 2014.

The audit covered from July 1, 2006 to December 31, 2015.

The Executive Mansion was constructed from 1960 to 1963.

The project was designed and supervised by Department of Public Works and Utilities (Ministry of Public Works ) and Stanley Engineering Company of Africa while the Construction Contractor was Liberian Construction Corporation (LCC).

It was officially dedicated on January 3, 1964. Since its completion in 1963, there had been three major rehabilitation works Executed on the Composite Building Elements/Systems.

The first renovation/rehabilitation work was executed during 1988/89 under the reign of the late President Samuel K. Doe and the second Renovation work was executed during the tenure of former President Charles G. Taylor in the year 1997-1998.

On July 26, 2006, during the National Independence day Celebration, there was an outbreak of Fire, reportedly due to Electrical Defects which burned and damaged many building elements primarily the Fourth Floor Central Section, accommodating the Presidential and Adjoining Offices.

The third major Executive Mansion Renovation Project as a result of the fire incident in July2006 is managed by the Ministry of State for Presidential Affairs and the Ministry of Finance and Development Planning.

The renovation contracts was awarded in three phases; first phase contract was for the fourth floor, the second phase was the remaining seven floors and the third was to undo all the works of previous contract by scraping the entire building.

The first and second Phases of the contract was awarded to Qingjian International Lib Group Development co. Ltd and the third phase of the contract was awarded to CESAF Lib.

Additionally, there were 5 (five) contractors who performed various functions relating to the renovation project

The total value of contracts awarded is US$31,705,072.

The government has paid US$15,769,800.21 to the contractors per the vouchers provided by the Ministry of State for Presidential Affairs and Ministry of Finance and Development Planning.

Some Key Findings

Under the period under review, it was observed by the GAC that US$8 million was appropriated for fiscal years 2006/2007 through 2009/2010 for the Executive Mansion Renovation Project per the approved National Budgets without evidence of allotment. In addition, US$1.5 million was transferred from the appropriation during the 2007/2008 fiscal year without documenting the purpose of the transfer.

Former Minister of State, Dr. Rudolph McClain (deceased), Deputy Minister for Administration, Loris M. Shannon and Pearine Parkinson, Deputy Minister for Administration (2006-2012), Elva Richardson, Deputy Minister for Administration (2013) Harry B. Sando, Comptroller, and Procurement Specialist Eric Willor managed the renovation project.

Noting that the budgetary appropriation without evidence of allotment could cast doubt on the regularity of the budgetary process and transfers made without purpose or intent could deny assurance that the funds were used for the intended purpose, the Auditor General recommended that management of the Ministry of State for Presidential Affairs and Ministry of Finance and Development Planning provide substantive justification for the appropriation in the national budget for the renovation of the Mansion without making the allotments.

The Auditor General recommended that the management of the renovation project provide justification for appropriating fund and transferring funding without providing evidence for the purpose of the transfer from the amounts appropriated for the Executive Mansion Renovation Project in the fiscal year 2007/2008.

But the Ministry of State, according to the GAC, contended that there were no amounts appropriated in the Ministry of State's budget during FY 2006/07 2009/10 for the Executive Mansion Renovation Project per the approved National Budget.

The ministry added that there were no funds transferred to its budget for the renovation during the periods.

According to the Ministry of State, there were several governmental buildings, including all the Presidential Palaces, the Executive Pavilion, the Centennial Pavilion and the Unity Conference Center, that were under the direct care and supervision of the Ministry of State for Presidential Affairs.

Appropriation and allotments for the maintenance and renovation during the periods (FY 2006/07 to Fy2009/10) were mainly intended to cover expenses arising from maintenance of those buildings. Total Appropriation for those periods, according to the ministry, did not exceed US$ 2,000,000.

However, the GAC noted that the Ministry of Public works is the statutory body responsible for the construction and renovation of public buildings and not the Ministry of State for Presidential Affairs. "The Executive Mansion construction was initially supervised by the Ministry of Public Works in 1960.

The Ministry should have supervised the renovation project and not the Ministry of State.

Therefore, the Ministry of State for Presidential Affairs and the Ministry of Finance and Development Planning should account for the appropriations and transfer in the National Budget relating to maintenance and renovation of the executive mansion" the Auditor General opined.

Payments Without Documents

According to the GAC, it was observed during the conduct of audit that the Ministry of State for Presidential Affairs did not provide supporting documentation for US$5,161,767.22 of the US$8,496,564.97 expended for the fiscal years 2012-2014.

Additionally, Ministry of State did not provide support documentation for US$$185,000.00 of the payment of US$205,000 made to Milton and Richards on a contract dated June 1, 2008 for the Executive Mansion Renovation Project.

In its defense, the Ministry of State told the GAC that the payments were processes by the Ministry of Finance and Development Planning via the Executive Mansion Escrow Account set up by the Finance Ministry.

The Ministry further argued that appropriations and allotments for these payments were directly controlled by Ministry of Finance with Ministry of State playing a marginal role.

However, the Auditor General counter argued that payments of checks out of the escrow account are co-signed by the Deputy Minister of State for Presidential Affairs for Administration and the Comptroller and Accountant General, the Ministry of Finance and Development Planning; therefore, co-signing checks is not a "marginal role" as asserted by the Ministry of State.

It was again observed US$75,000.00 appropriated for the Executive Mansion Renovation was disbursed to Liberia Agency for Empowerment (LACE) from the Escrow account at the Global Bank Limited without evidence as to the services provided.

Again, the Ministry of State said it was unable to address the unexplained payments in Escrow Account at Global Bank that was controlled exclusively by Ministry of Finance.

"Ministry of State was not signatory to this account. Kindly revert to the Ministry of Finance and Development Planning to information concerning those unexplained payments," it wrote in response to the GAC.

But the GAC noted that, "The Ministry of State for Presidential Affairs was a co-signatory to the escrow account during the transaction.

The unexplained payment from the account was co-signed by the Deputy Minister of State for Presidential Affairs for Administration, Mrs. Shannon, on October 7, 2015.

Therefore, the Management of the Ministries of State for Presidential Affairs and Finance and Development Planning should account for the unexplained withdrawal."

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