Monrovia – The General Auditing Commission’s (GAC) latest audit of the National Social Security and Welfare Corporation (NASSCORP) paints a troubling picture of financial indiscipline at one of Liberia’s most critical state-owned enterprises — a recurring theme in the country’s public sector management.
By Gerald C. Koinyeneh, [email protected]
In its Management Letter on the financial statements for fiscal years 2022 and 2023, the GAC uncovered a string of violations ranging from unremitted taxes to millions of dollars in undocumented payments and unrecorded revenues at NASSCORP’s guest houses.
The findings highlight not only weaknesses in internal control but also persistent disregard for Liberia’s Revenue Code and Public Financial Management (PFM) Act, two key pillars meant to safeguard public resources.
A Pattern of Non-Compliance
According to the audit, NASSCORP failed to prepare its financial statements in line with International Financial Reporting Standards (IFRS), as required by law. Although management had contracted Deon & Leon International to facilitate IFRS conversion, the process remains incomplete—despite previous commitments to finalize it by 2024.
The GAC noted multiple cases of misclassification of expenditures, including petty cash transactions totaling US$6,294.40 and other expenses amounting to US$4,067.44, which were wrongly recorded under unrelated budget lines.
Even more concerning, the audit revealed that revenue collections from NASSCORP’s Kakata Guest House — US$41,558.95 in 2022 and US$45,675 in 2023 — were made without invoices, bills, or receipts. Expenditures at the guest house were reportedly approved verbally, with no supporting documentation available.
“The completeness and accuracy of revenue and expenditures may not be assured; therefore, the financial statements may be misstated,” the report cautioned.
Millions Spent Without Supporting Documents
The GAC also flagged US$3.9 million in payments made without adequate documentation — US$1,199,632.09 in 2022 and US$2,730,164.92 in 2023. While NASSCORP management later produced some missing vouchers and invoices, auditors maintained that the late submission undermined accountability and reflected poor financial discipline.
NASSCORP, in its response, admitted that its financial reports were not IFRS-compliant and said efforts were ongoing to complete the transition by the second quarter of 2025. Management added that an electronic document management system was being developed to strengthen record-keeping.
However, the Auditor General dismissed these assurances, insisting that management’s responses “did not adequately address the issues raised” — a diplomatic way of saying the explanations were insufficient and unconvincing.
Tax Violations: Over US$1.3 Million Unremitted
Perhaps the most damning finding relates to violations of the Revenue Code. The GAC discovered that NASSCORP failed to withhold and remit over US$1.3 million in Goods and Services Tax (GST) to the Liberia Revenue Authority (LRA) — a serious breach of Sections 905 (J) and (M) of the law.
Auditors found that management did not withhold and remit US$144,385.15 in GST on goods and services procured and withheld another US$1,199,890.05 from suppliers without evidence of remittance.
“Failure to withhold and remit GST may deny the Government of Liberia the much-needed tax revenue,” the GAC warned, noting that the lapses attract penalties under Section 52 of the Revenue Code.
The report also referenced a separate LRA tax assessment of US$1,874,775.27 — covering salaries and rent taxes withheld between January 2018 and October 2022 — of which only US$200,000 had been paid. The remaining arrears, including US$139,564.60, remain unsettled despite a payment plan signed in March 2023.
Management blamed the delay on a new payment arrangement being worked out with the LRA, reducing the outstanding liability to US$74,614.20. But the GAC rejected this explanation, emphasizing that management had failed to account for over US$1.2 million in GST and had not adhered to existing payment schedules.
The Broader Implications
The audit’s findings once again raise troubling questions about financial accountability and governance within Liberia’s public institutions. NASSCORP manages pension funds and social security contributions for tens of thousands of workers — making financial transparency not just a regulatory obligation, but a moral imperative.
The situation mirrors the GAC’s audit report of the Liberia Electricity Corporation (LEC), which covered fiscal years ending June 30, 2018, 2019, 2020, 2021, the Special Budget Year (SBY) 2021, and fiscal years 2022 and 2023. That audit uncovered significant governance and management lapses at LEC, raising serious concerns about oversight, operational planning, and the integrity of major power sector agreements.
In the case of NASSCORP, analysts warn that persistent lapses — including unrecorded revenues, undocumented payments, and tax non-compliance — erode public trust and deprive the government of critical revenue. They also expose the institution to potential penalties, legal challenges, and reputational damage.
The General Auditing Commission (GAC) has urged NASSCORP to fully account for all unsupported expenditures, automate its billing and documentation systems, and enforce strict compliance with both the Public Financial Management (PFM) Act and the Revenue Code of Liberia.
Unless these reforms are urgently implemented, the corporation risks becoming another cautionary tale in Liberia’s long struggle to instill fiscal discipline and accountability within its state-owned enterprises.
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