Monrovia — The National Fisheries and Aquaculture Authority (NaFAA) spent over US$3.6 million beyond its approved budget for the "Sustainable Management of Fisheries Project," according to a recent audit by the General Auditing Commission (GAC).
The GAC report states, "During the audit, we observed that management expended US$3,628,386.32 in excess of its approved budget without evidence of a supplementary budget or a no objection from the Bank." These findings are from the audit of the Liberia Sustainable Management of Fisheries Project (LSMFP) for the year ending December 31, 2023.
In response, NaFAA's Director General, Emma Glasco, refuted the GAC's findings, stating, "The auditor's assertion that the aforementioned payments were made without supporting documents is incorrect. All the payments were made with the requisite supporting documents. These documents are available at the PFMU and PIU, and we are attaching copies of contracts and bid documents for the auditor's review."
However, the GAC maintained that management's response did not adequately address the issues raised. The commission advised that, moving forward, management must ensure all payments, whether by the bank or management on behalf of the project, are within the approved budget and part of the procurement plan. The GAC emphasized that it stands by its findings and will follow up on the implementation of its recommendations during subsequent audits.
Risks
The GAC warned that NaFAA's management might be in violation of Section 24(1-2) of the PFM Act of 2009, as amended in 2019. Spending beyond the approved budget could lead to misappropriation of project funds and potentially impair the achievement of the project's objectives. Unauthorized excess disbursements could result in further misappropriation and misapplication of funds.
Recommendations
The GAC recommended that NaFAA management account for expenditures exceeding the approved budget without evidence of a supplementary or recast budget, or a no objection from the bank. The GAC also urged management to ensure that all expenditures remain within approved budget limits, and where applicable, secure supplementary approval or no objection from the bank before disbursing excess funds. Proper documentation of these actions should be maintained for administrative and audit purposes.
Furthermore, the GAC advised NaFAA to conduct periodic reconciliations between budgeted and actual revenues and expenditures, using any identified gaps to guide future revenue collection and disbursement activities. Periodic budget performance reports should be thoroughly documented and filed to facilitate future reviews.
Observation
The GAC also noted that NaFAA made payments amounting to US$2,989,161.60 without adequate supporting documents, such as contracts and bid documents, to validate the authenticity of these transactions. In the absence of proper documentation, the GAC warned that the validity, occurrence, and accuracy of payments could not be assured, leading to potential misappropriation of project funds.
The absence of adequate supporting documentation may result in fraudulent financial practices, as management could override procurement processes and disburse funds without proper oversight. The GAC called on NaFAA to account for transactions lacking adequate documentation, as detailed in Annexure 1 of the audit report. It also emphasized that all future transactions should be backed by requisite documentation, consistent with financial management regulations.
Management's Response
In its response, NaFAA reiterated that all payments were supported by the necessary documentation. These documents, according to NaFAA, are available at the PFMU and PIU, with copies of contracts and bid documents attached for the auditor's review.
The GAC also observed that management facilitated disbursements of US$36,000.00 in travel advances without evidence of approved Travel Authorization Forms. The commission noted that, without these forms, there is a risk that project funds could be used for activities unrelated to the project's operations.
To ensure accountability, the GAC urged NaFAA to ensure that Travel Authorization Forms are issued and signed for all travel-related transactions. Moving forward, management should facilitate the approval of all Travel Authorization Forms before disbursing travel per-diems, and ensure that evidence of these forms is adequately documented and filed for future review.
However, NaFAA countered this assertion, stating, "Those who traveled for the aforementioned activity were not government officials but persons implementing activities for the project." According to NaFAA, the travel was budgeted and approved, and upon return, the designated staff provided evidence of travel and submitted back-to-office reports as required.
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About the LSMFP
The Liberia Sustainable Management of Fisheries Project (LSMFP) managed by the National Fisheries & Aquaculture Authority (NaFAA), was approved by the World Bank Board of Directors on September 21, 2021, and officially became effective on December 22, 2021.
This followed a Project Preparatory Activity (PPA) Phase that spanned from January 2019 to December 2021. The project's Development Objective is to improve fisheries management and enhance livelihoods and income for the government and targeted beneficiaries.
The LSMFP also supports activities aimed at increasing the national value derived from the fisheries sector.
Key initiatives include the establishment of industrial and artisanal fish landing sites at the Mesurado Pier in Monrovia, which aim to improve conditions for industrial fish landing and support the export of high-value fish species and products, ultimately promoting sustainable marine fisheries production.
