- Integrity Watch Liberia alarms
Integrity Watch Liberia Executive Director, Herold Aidoo, says the Liberian Legislature is setting a dangerous path for the country by continuously allocating huge portions of taxpayers' money to ministries, agencies and commissions that fail to account for usage of allotments for the previous fiscal period.
Addressing reporters Tuesday, 20 December at his office in the township of Virginia outside Monrovia, Mr. Herold said though he can't say reason why those entities failed to provide performance report for the period under review, it is prudent that Legislature make sure public entities abide by the Public Financial Management (PFM) law.
He raised the alarm here while releasing findings of the institution's analysis of the draft FY2023 National Budget recently submitted to the 54th Legislature and recommendations thereof.
Mr. Herold said the work is as a result of an extensive analysis of six (6) sectors of the FY2023 draft national budget and monitoring outcome of implementation of the FY2022 national budget as well as tracking of ministries, agencies and commissions that did not submit performance reports for the period under review.
According to him, the Policy Notes of six (6) budget sectors, representing all 62 institutions under Health, Education, Security and Rule of Law, Social Development Services, Transparency and Accountability, and Agriculture were reviewed and analyzed.
"Our findings reveal that 16 out of the 62 institutions comprising the six (6) sectors did not provide reports of achievements under the FY2022 and planned objectives for FY2023", he notes.
The Integrity Watch Liberia executive director gathers that total aggregate budget estimates of those institutions without achievements for FY2022 and Planned Objectives for FY2023 is projected at US$156.7 million in the draft budget, which is 45.2 percent of the combined total of the six sectors' budget of US$346.8 million.
"Placing US$156.7 million at the disposal of these institutions without past performance reports and planned objectives undermines accountability and transparency", he further observes.
He names key government institutions that didn't submit performance report for 2022, including Ministry of Health, National Public Health Institute and Liberia Pharmacy Board, among others, under the health sector.
In the education sector, he points to the Ministry of Education, University of Liberia, William V.S. Tubman University, while on Security, the Independent National Commission on Human Rights, and the Ministry of Agriculture.
Others include General Auditing Commission and Financial Intelligence Unit under transparency and accountability.
Mr. Aidoo notes that the act of government entities' refusal to submit budget performance report is a clear violation of Regulation D.4(4) of the Amendment and Restatement of the PFM Act of 2009, which he says states "Spending agencies must submit their budget requests within the parameters, timeframe and format set forth in the budget call circular."
He warns that considering the concept of "Value for money and affordability" as one of the principles of the PFM Law, these allocations pose huge risks to prudent fiscal management and undermines government's efforts in fiscal transparency and accountability.
At the same time the civil society organization recommends to the Legislature through both houses' standing committees on appropriation in line with constitutional mandates to compel all non-complaint institutions in respect of the omission of budget policy notes in the Draft National Budget FY2023, to provide same, ahead of or during their respective budget hearings and to mandate the Ministry of Finance and Development Planning to incorporate those policy notes in the approved national budget to be published eventually by the Executive.
He calls on government to enshrine legislative provisions (prohibitions and sanctions) in the FY2023 Budget Law relating to the omission of complete budget policy notes for each spending entity during preparation and submission of subsequent Draft National Budgets to the Legislature, beginning FY2024.
He says government should prescribe sanctions for non-compliance affecting all spending entities, including the Ministry of Finance and Development Planning, for any failure of enforcement of the law.
He adds that pursuant to Section 10 of the Amendment and Restatement of the PFM Act of 2009, there is need to promulgate supplementary regulations consistent with legislative enactments that prohibits non-compliance with the Budget Call Circular as well as indicates specific sanctions for non-compliant institutions on budgeting and budget planning.
"Our research findings from the Fact Sheet of the Draft National Budget confirmed the Government has expressed interest and commitment to implement some of the recommendations during Pre-Budget Consultations under the Government's adopted Public Participation Mechanism" he adds.
Meanwhile, Mr. Aidoo applauds the government for committing to implement two of four revenue options as recommended by citizens through Pre-Budget Consultations, including committing to implement 6 of 20 expenditure options, as recommended by citizens through Pre-Budget Consultations.
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He narrates that specific options selected by the government for implementation during FY2023 include Revenue Amendment to the Revenue Code of 2011, which primarily targets migrating from Goods and Services Tax (GST) to Value Addition Tax (VAT); Reviewing the Tax Exemptions List with the objective of suspending beneficiaries of Executive Orders and Investment Incentives that are expected to yield approximately US$15 million.
"We take note of the joint implementation arrangements and look forward to the Ministry of Finance and Development Planning, Liberia Revenue Authority and the Bureau of State Owned-Enterprises."
He says while Integrity Watch Liberia recognizes effort and commitment of government in the promotion of transparency and accountability, response of the government to recommendations from citizens during the Pre-Budget Consultations be included in the Budget Preface, besides the Budget Fact Sheet.
Integrity Watch Liberia seeks to promote inclusive sustainable development and democratic governance characterized by gender equity and respect for the rule of law and accountability.
