Monrovia — The latest audit by the General Auditing Commission (GAC) of the Consolidated Fund financial statements for the fiscal year from January 1, 2023, to December 31, 2023, has uncovered that ten government ministries, agencies, and commissions in Liberia spent a total of US$96,137,404--far exceeding their approved budgets.
Among these institutions, the Financial Intelligence Agency (FIA), the Ministry of Finance and Development Planning (MFDP), and the National Security Agency (NSA) collectively overspent by US$90.2 million without legislative approval.
The audit report revealed that the NSA exceeded its authorized budget by US$56 million, the MFDP by US$28 million, and the FIA by US$6 million. The GAC said the Ministry of Finance provided no evidence that these significant excess expenditures were approved by the National Legislature, nor did they submit the required Statement of Excess Expenditure to the Legislature and the Office of the President, as mandated by the Public Financial Management (PFM) Act of 2009, amended and restated in 2019.
According to the GAC, these violations constitute a breach of financial discipline under Regulation A.20 of the PFM Act. Sanctions for such breaches can include suspension, demotion, surcharging for the loss of public funds, penalties, and prosecution, depending on the severity of the violation.
The GAC, led by Auditor General Garswa Jackson, Sr., has called on the Ministry of Finance and heads of these institutions to account for the unauthorized expenditures. The GAC emphasized the need for proper justification and documentation for any excess spending and insisted that all future expenditures over authorized limits be approved by the National Legislature.
"Management should provide substantive justification for facilitating unapproved excess expenditure to some GoL ministries and agencies. Management should account for the excess expenditures over approved budget without evidence of supporting documents. Going forward, Management should ensure that all expenditures over authorized limits are approved by the National Legislature."
Risk of Non-Compliance
The GAC warned that unauthorized disbursements over the approved appropriations could lead to underfunding of other government entities and may result in the misappropriation or misapplication of public funds. The commission also noted that such actions are non-compliant with Regulation E (8) (1) - (4) of the PFM Act.
Ministry of Finance's Response
In its response, the MFDP cited fiscal year 2023 as a pivotal period for Liberia, marked by unprecedented challenges, including managing national security during a crucial election year and ensuring full funding for the National Elections Commission (NEC). The ministry argued that these extraordinary circumstances necessitated urgent and substantial financial support, particularly for the NSA, to maintain national security amid emerging threats.
The MFDP justified its actions by stating that traditional budgetary and disbursement processes were inadequate to address the security threats faced by Liberia, both internally and from regional instability. The ministry stressed that the government had to prioritize a flexible and rapid response to safeguard the nation and its democratic processes.
"In light of the sensitive nature of national security, the traditional budgetary and disbursement processes were deemed inadequate. Rigid adherence to routine procedures could have inadvertently compromised the effectiveness of security measures and left the state vulnerable to emerging threats. This realization prompted a reevaluation of how resources were allocated and managed, emphasizing the need for flexibility and rapid response capabilities," the ministry said.
The ministry also noted that government agencies would provide detailed expenditure reports on the funds disbursed under these extraordinary circumstances.
Auditor General's Position
However, the Auditor General reiterated that the MFDP provided no evidence of legislative approval for the significant excess expenditures. The AG maintained the audit findings and recommendations, stating that the ministry's actions were a breach of financial discipline as per the PFM Act. The GAC will follow up on the implementation of its recommendations in subsequent audits.
The GAC report also observed that the MFDP management under-disbursed the approved appropriation for 88 government ministries and agencies by a total of US$20,326,937.92. The MFDP did not provide evidence of any notice or warning of significant or material budget variations to the sector ministers or the Minister of Finance and Development Planning, as required by the Public Finance Management (PFM) Act of 2009, as amended and restated in 2019.
Furthermore, the GAC noted from a sample of payment vouchers that the MFDP facilitated payments amounting to US$4,269,311.42 without adequate supporting documents, such as payment receipts, quotations, contracts, expenditure/liquidation reports, delivery notes, or job completion certificates where applicable. These documents are necessary to validate the legitimacy of the transactions.
Sign up for free AllAfrica Newsletters
Get the latest in African news delivered straight to your inbox
The report also highlighted the MFDP disbursed a total of US$2,817,996.98 as transfers to institutions and private entities that were not included in the budget. This amount includes US$2.5 million allocated toward the construction of the PHP Park in Monrovia.
However, this payment appears to contradict former President George Weah's statement during the groundbreaking ceremony for the park. According to a New Dawn publication on August 6, 2021, President Weah indicated that the PHP Park project was a result of his request for cooperation and assistance from the United Arab Emirates (UAE) during his visit there in 2019. He mentioned that the project was part of several infrastructural developments proposed by the UAE, and at no point did the President or his officials indicate the Liberian Government would contribute US$2.5 million toward the construction of the park.
Given the significance of the issues raised in this report, the GAC urges the Speaker and members of the House of Representatives, as well as the Pro-Tempore and members of the Liberian Senate, to urgently consider implementing the recommendations contained in it.
