Monrovia — The long-held public suspicions about the first branch of government appears to have been confirmed by a damning audit report from the General Auditing Commission (GAC). The audit, conducted at the request of Senate President Pro Tempore Nyonblee Karnga-Lawrence, has revealed significant issues within the Liberian Senate's financial management and governance systems.
Following her unanimous election as President Pro Tempore, Senator Karnga-Lawrence, like House Speaker Fonati Koffa, committed to subjecting the Senate to an audit, something that has never happened in decades. True to her word, she mandated the GAC to conduct a system review of the Senate's financial management and accounting processes from 2018 to March 31, 2024.
The GAC's report identifies numerous issues, including shortcomings in governance, budget management, financial reporting, cash handling, and procurement.
Governance Failures
The audit revealed that the Senate failed to provide approved strategic and operational plans, senior management meeting minutes, and monitoring and evaluation reports necessary for effective oversight of senatorial activities. The absence of an operational plan means that short, medium, and long-term goals may not be clearly identified or pursued, potentially jeopardizing the Senate's objectives. The GAC warned that this lack of guidance could lead to arbitrary decisions that may not comply with applicable laws and regulations.
The GAC recommended that the Senate's management develop, approve, and implement a strategic plan covering at least five years, detailing the resources and strategies needed to achieve its goals. Annual operational plans should also be developed to expedite the implementation of these strategic goals, with periodic monitoring and assessment to ensure compliance.
The audit further noted the absence of a functional Monitoring and Evaluation (M&E) Committee to oversee the implementation of planned activities within approved timelines. This lack of oversight, the GAC said, violates the Public Financial Management (PFM) Act of 2009, as amended in 2019. Without effective monitoring and evaluation, the Senate's deliverables may not meet approved specifications, risking misapplication and misappropriation of resources.
Budget Management Issues
The GAC found that the Senate lacked evidence of a functional budget committee or unit to prepare comprehensive annual budgets, including projections of revenue and expenditures. The audit recommended that the Senate establish an internal budget committee, with documentation of attendance records, meeting minutes, and periodic reports to ensure transparency and accountability.
In addition, the GAC observed that the Senate exceeded its approved budget for the fiscal year 2022 without securing a supplementary budget. The audit also uncovered irregularities related to the budget and payment processes concerning grants.
The audit revealed that the Senate's 2023 budget included a line item labeled "Grants" totaling US$2,583,601. However, there was no evidence of policies or procedures governing the management of these grants. Payments were made from the "Grants" budget line for expenses such as salaries, operational costs, and printing, which had already been budgeted under other categories. The GAC warned that this lack of oversight could lead to arbitrary decisions and non-compliance with laws and regulations, potentially hindering the Senate's objectives.
Discrepancies in Operational Expenses
The audit also uncovered discrepancies in the Senate's operational expenses. The budget for 2023 included a line item for "Operational Expenses" totaling US$4,865,000. However, payments from this budget line were made for activities that had already been budgeted under other line items, such as committee hearings and report distribution.
Additionally, the GAC found a significant discrepancy between the amount reported in the Ministry of Finance and Development Planning's (MFDP) Fiscal Outturn Reports and the Senate's Integrated Financial Management Information System (IFMIS) ledger. The report noted an unexplained variance of US$7,511,193 between the two records.
The audit also highlighted that the Senate exceeded its approved budget for the fiscal period 2018/2023 without evidence of a supplementary budget, potentially violating the PFM Act. The GAC warned that such unauthorized excess expenditures could lead to the misappropriation of public funds and impair the Senate's ability to achieve its objectives.
Management's Response
In response to the audit, Senate Pro Tempore Karnga-Lawrence acknowledged the findings and recommendations. She pledged that the Liberian Senate would adopt a series of financial policies, procedures, and internal controls to enhance transparency, accountability, and overall effectiveness in its financial and governance operations. She also stated that the Senate would collaborate with the GAC and other financial institutions to develop a financial management system in line with Liberia's PFM laws.
"As it stands, this report is based on a non-systematic financial regime, and its findings do not conform to a breach of any system that was not followed at the Legislature," she said.
Dede Sandiman, Assistant Minister for Fiscal Affairs, supported the Pro Tempore's justification, stating, "There is no wrong because it is lawful. What makes it wrong is when laid down procedures are ignored. No physical cash was moved to any accounts. Some reallocations were due to off-budget spending, such as the recent repatriation and resettlement of Liberians from Ghana. We await the investigation."
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Budget Law Concerns
Financial analysts have noted that the Budget Transfer Act of 2008 was originally designed to govern national budget execution when the Budget Bureau was in operation. However, after the Budget Bureau was integrated into the Ministry of Finance and the PFM Act of 2009 was enacted, the relevance of this law has diminished.
Analysts argue that in this case, adherence to the original intent of the Budget Transfer Act is not evident. They pointed out that the MFDP initiated budget transfers before the final budget book was published, raising questions about the appropriateness of such actions without legislative approval.
The GAC report comes amid allegations that the executive branch altered the 2024 budget after it was passed by the House and signed by the president. This has prompted Speaker Koffa to seek authority from the House of Representatives' leadership to appoint a joint committee with the Senate to thoroughly investigate the allegations.
These developments follow a FrontPage Africa investigation revealing the 55th Legislature's refusal to address complaints by the chairpersons of the Public Accounts Committees of the House and Senate regarding possible alterations to the approved 2024 budget.
