Monrovia – A recent audit conducted the general Auditing Commission of Liberia on the Roberts International Airport has found series of financial irregularities during the operations of the institution from December 31, 2008 to December 31, 2012. The report was recently submitted to the Legislature.
“The GAC has therefore, recommended that the former Chairman of the board (Mr. Musa Bility) and the former Head of the LAA (Madam Ellen Corkrum) should be held accountable for all transactions made during the period they became signatories to RIA’s account.
Also, the former LAA Managing Director (Madam Ellen Corkrum) should be made to provide all supporting documentation from October 1, 2012 to December 31, 2012 amounting to US$2,110,948.28 or be made to account for said amount”-recommendations of General Auditing Commission on Roberts International Airport and Liberia Aviation Authority.
According to the report, RIA financial statements presented for audit did not provide assurance as to the accuracy and completeness of RIA’s operations for the years ended 31 December 2012 and of their respective income and cash flow statements.
“No proper books of account have been kept by the RIA Management,” the report stated.
“The financial statements were prepared inconsistent with the requirements of the United States Generally Accepted Accounting Principles (US GAAP), the financial reporting framework management indicated it adopted; and the management did not implement International Financial Reporting Standards as required by the Government of Liberia for State Owned Enterprises (SOEs)”, the audit noted.
The GAC Audit report revealed that the former Chairman of the board, Mr. Musa Bility, and the former Head of the Liberia Aviation Authority (LAA), Madam Ellen Corkrum, became signatories to the operational account of the RIA, thus compromising their oversight abilities as board members. The report indicated that the bank confirmation for signatories revealed three signatures: Ellen K. Corkrum, Massaquoi M. Kamara and Musa Bility.
“GAC also observed during the audit that withdrawals amounting to US$2,110,948.28 were made from October 1, 2012 to December 31, 2012 from RIA’s bank account number XXX at the Liberian Bank of Development and Investment. There was no supporting vouchers or other supporting documentation to validate these withdrawals.
Management of RIA attributed the absence of supporting documents to the former LAA Managing Director, Ellen Corkrum who they indicated took away most of the documents for the transactions carried out from October 1, 2012 to December 31, 2012.”
The GAC recommended in its report the former Chairman of the board (Mr. Musa Bility) and the former Head of the LAA (Madam Ellen Corkrum) be held accountable for all transactions made during the period they became signatories to RIA’s account.
“Also, the former LAA Managing Director (Madam Ellen Corkrum) should be made to provide all supporting documentation from October 1, 2012 to December 31, 2012 amounting to US$2,110,948.28 or be made to account for said amount”, the report furthered.
RIA’s financial statements reported the entity procured fuel and lubricant amounting to US$3,362,227.00 for the five years under audit, according to the GAC report.”
Management submitted documentation for only 2010, amounting to US$ 495,996.00. Additionally, there was no evidence that management adhered to the Public Procurement and Concessions Act in the procurement of fuel and lubricant amounting to US$2,866,231.00 for four of the five years.”
The GAC observed that RIA contravened procurement procedures during the review of transactions amounting to US$21,696.69, related to the purchase of laptops and accessories by the former General Manager, James E. Banks, in 2011.
The GAC audit also revealed that the laptops were purchased out of personal funds by the General Manger, who was later reimbursed by RIA’s management.
“There was no evidence of Public Procurement and Concessions Act compliance by the General Manager, or documented evidence of the considerations supporting the choice of procurement method used for the purchase of the laptops by the former GM.”
Citing further violations, the GAC report stated “Section 6.13.4 of RIA’s standard operating manual requires Flight Operations to record summarize and prepare consumption report at the end of each month on mileage for each aircraft that fuels at the airport, so as to reflect the true value of throughput fees collected during the fiscal period.
Throughput fee was introduced in 2006 at a rate of 0.01 per gallon. The fee per gallon was increased from 0.01 cents to 0.03 cents per gallon in 2008.”
However, the GAC stated that there was no evidence that RIA’s management was preparing monthly reports of jet fuel supplied to enable management monitor the quantity of fuel supplied by TOTAL Liberia to various airlines.
“The GAC requested TOTAL Liberia to provide fuel logs to authenticate the quantity of fuel supplied to various airlines during the periods under audit.
TOTAL Liberia provided aggregated figures of monthly quantity supplied, which failed to disclose total quantity supplied to each airline. As a result, for the five years under audit, the GAC could not provide assurance on the completeness of Throughput revenue of US$ 721,444.”
The report stated that the RIA Management failed to provide ground handling contract between RIA and Jet-Xpress.
The GAC noted that although there is a contractual agreement for office space rental between RIA and Jet Xpress, it observed that the agreement had different terms of payments when compared with other rental agreements between RIA and other airlines, stating management failed to provide explanation for the variation.
During the audit, the GAC stated that it was not provided evidence of board minutes to justify payments in the amount of US$353,354.55 to board members for quarterly meetings and sitting fees.
In the absence of board resolutions or a communication from the appointing authority setting board remuneration, the GAC was unable to determine the basis upon which board fees were determined.
Additionally, the GAC observed that from 2008 to 2012, the amount of US$20,853.50 was paid to board members for board gratuity such as Christmas bonus. There was no evidence of a policy or board resolution to justify such disbursements.
For the five years under audit, the GAC observed that the Management of RIA paid bonuses to employees for all five years.
The entity did not provide evidence to justify the basis for the bonuses paid. The GAC observed that bonuses were also paid in 2010 when the RIA reported a net loss of (US$352,728.00).
Furthermore, the GAC observed that Board fees and other benefits paid to the Board Chair and members were not subjected to Withholding Tax, as required under Sections 201(b)(1) and 905(a-b) of the Revenue Code of Liberia, 2000.
“There was no evidence that withholding tax on board fees were deducted and subsequently remitted to the consolidated account.
The audit also revealed that Board Members were paid in advance on a monthly basis in the absence of board resolution to justify the advance payments”, stated the report.
The GAC furthered that during the conduct of the audit, the Management of RIA paid consultancy service fees to Lockheed Martin in the amount of US$625,331.69 in 2009 and 2010. Management also paid consultancy service fees to PAE Government Services, Inc., in the amount of US$550,600 in 2011.
“There was no evidence of RIA’s management adherence to the Public Procurement and Concessions Act; neither did the GAC see evidence of a contractual agreement between the two consulting firms and the RIA.
Management indicated that the entity’s failure to adhere to the Public Procurement and Concessions Act was due the fact that Government of Liberia – not the RIA – contracted the two firms to provide the consulting services.
“Because of the significance of the matters described above and others in the report, the GAC has not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion”, noted the audit.
The RIA issue became very controversial from Madam Corkrum secretly left the country and while in the United States of America she became making revelations about alleged corruption by Liberia government officials.
She secretly recorded several government officials where in some of the recording, these officials were gossiping about each other.
Madam Corkrum was indicated along with others on multiple criminal charges including economic sabotage and others.
The case is still pending before the court.