An audit into the procurement of two buses in January 2022 has held former top Finance Ministry and Civil Service Agency (CSA) officials liable for abuse of public funds and trust.
The Internal Audit Unit (IAU) of the Ministry of Finance and Development Planning (MFDP) carried out the audit on the procurement of two buses for MFDP under the Public Sector Mobilization Project (PMSP, DLI) in January 2022.
The audit report said former Deputy Minister for Administration (DMA) Ms. Rebecca Y. McGill and her immediate Deputy, Assistant Minister Patience Y. Kollie, didn't apply the necessary due care to protect government resources and the value of public money.
Further, the report said the former Director of the Civil Service Reform Directorate, Mr. Darlington Smith, and the former CSA Director-General, Mr. James A. Thompson, approved the disbursement of the payment for the buses without verifying the completion of goods and services.
Upon recommendation from the Procurement Unit headed by Director Eric Arkoi, the Audit said the contract price and the number of buses were reduced verbally, and payment was requested in full sum as in the contract without amendment reflecting the necessity of the changes.
This act, the Audit said, was in violation of the PFM Regulations.
As part of the audit, the investigating team headed by the Director of IAU, Mr. Augustus V. Vogar, was authorized to visit the CSA office on Monday, 26 February 2023, to gather information about the procurement processes and subsequent payment in favor of DUKE CARMAX, INC., the selected vendor.
Consistent with the exercise, the investigative findings highlight the materiality of the transactions and processes that characterized the initiation and execution of the procurement of the three buses of the MFDP during the period under review.
According to the report, interested parties were allowed to provide reasonable explanations for their actions and inactions about the procurement and discharge of funds entrusted to their care on behalf of the Government of Liberia.
The audit found that the Public Financial Management Unit (PFMU) paid Duke CARMAX $145,000.00 through the PSMP, DLI -Account, for two "32" seater buses.
However, the report indicated that there is a contract to consummate the procurement process for $211,797.00 for three "32-seater Zhengzhou Dongfeng GLX 2.4l 2020 model buses.
It said the contract was entered into on 17 November 2021 and ended on 31 December 2021.
The buses to be supplied were later reduced to two, and the amount was adjusted without effect on the agreed contract price, in violation of the PFM regulations.
The PFM regulation states that "an incorrect figure on a payment voucher, the supporting document, register or a document may be amended by ruling a single line through it.
It noted that it should be done so that the original entry may be read and the correct figure inserted above it may be read.
It mandates that the correct figure be inserted above the original entry and that the officer signing or certifying the document shall initial the amended entry.
The Audit stated that the Procurement executed her mandate from soliciting a bid to the award of the contract and request for payment.
However, the Audit disclosed that the procurement didn't follow up on contract administration as a fiduciary responsibility to ensure that the goods were delivered consistent with the contract terms as required on the part of the procurement unit in the Public Procure and Concession Commission (PPCC) Act of 2009 in Section 29(5) Sub-section (g) Administering the implementation and monitoring of contracts and (h) Assessment of the quality of the procured goods, works, and services.
As evidenced by the credit invoice, the report detailed that the full contract amount remains in effect as well as the 3 buses.
The delivery note indicates that three buses were delivered with the full contract amount of USD 211,797.00. However, the note states that both the delivery note and credit note did not carry the names and contacts of the goods recipients, as required by the financial rules.
By evidence of receipt attached, the audit found that Duke CARMAX issued a receipt of funds on January 24, 2022, for $142,100 US, after withholding tax deduction for the payment of two buses.
The PFMU issued a check on 21 January 2024 for $142,000.00 US, the same amount reported on the receipt issued by Duke CARMAX Incorporated.
Unlike other payments, the Audit found that the Duke CARMAX buses' procurement didn't go through the Ministry of Finance and Development Planning's Internal Audit Unit.
The investigation revealed that the Director of the Budget and Finance Unit (BFU) didn't exercise due professional care in handling the payment financing, as required by the DMA's advice and response.
"The director's action serves the purpose of abuse, waste, and wrongful discharge of public trust and money," the Audit report noted.
The BFU in keeping with the PPCC Act is a statutory member of the Procurement Committee.
Consistent with the findings and records available to the Auditors, it was suggested, among other things, that the DMA and AMA acted in an unregulated fiscal environment that led to financial indiscipline.
The DMA and AMA leadership exhibited inferior economic and financial decisions, which led to the waste and abuse of organizational resources.
That the payment does not reflect the terms as contained in the contract documents.
The Auditors further noted that making payment without financial security, as contained in the contract documents, was wilful and purposeful, amounting to an ethical breach and breach of financial discipline.
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Investigators noted that the accountability focus of the Director of BFU and the procurement unit in the transactions was underestimated and compromised.
"The custody of funds to the CSA without a control framework is risky and fungible to abuse and waste."
They noted that the Finance Section exercised disregard for internal control over cash and assets.
"That the finance section failed to exercise due diligence and professional care over the custody of funds and trust during transactional processes on behalf of the Ministry of Finance and Development Planning and the people of Liberia."
"That the conduct of the finance section amounts to [a] violation of the provisions of the public financial management law in keeping with the conduct of public officials in the execution of duty."
Additionally, the Audit said the conduct of the CSA and its designees amount to an abuse of public trust and disregard for the protection of public funds as mandated on the part of all public officials by the public financial management laws of Liberia.
"That disbursement without a physical audit verification report stating that the delivery of goods is completed establishes negligibility on the part of the Director of Finance, the Procurement Unit, and the CSA," the Audit noted.
