Monrovia – FrontPageAfrica has reliably learned from sources both in the Ministry of Finance and Development Planning (MFDP) and the Central Bank of Liberia that the MFDP has not been able to close the accounts and balance the books for Fiscal Year 2016/17 since June 30.
This important process should be one of the core functions of the Minister of Finance and Development Planning.
FPA’s investigation shows that Minister Boima Kamara was out of the country attending a conference in Addis Ababa during that critical period.
Sources inside the GAC have also informed FPA that this is the first time that the GAC has not been able to successfully complete a year-end close of government accounts and so they don’t even know how the books for FY16/17 will be credibly audited.
The purpose of “drawing the line” on June 30, according to our GAC source, is to ensure that expenses that were not committed at the end of the fiscal year are not paid.
FPA has learned that without knowing the final fiscal numbers and getting the list of the commitments and encumbrances, the Ministry of Finance can pay whatever they want to pay no matter what time they were committed.
Efforts made by FPA to get Minister Kamara to comment on the matter proved futile as this paper was informed that he was out of the country.
Several attempts to contact the Comptroller General, Hassan Kiazolu, also did not materialize.
From the side of the Liberia Revenue Authority (LRA), this paper gathered that the LRA usually presents the final revenue numbers by July 1st because all monies collected after June 30th should be deposited into the next fiscal year’s account consistent with Section 27(3) of the Public Finance Management Act of 2009.
The National Legislature will not be able to complete the passage of the National Budget for FY17/18 if this critical information from prior fiscal year is not available.
Analysts say that any attempts to complete an election year budget half of which will be inherited by the new government midway into the fiscal year in the absence of such critical information will make the budget less credible and impractical because just in case there is a deficit, there will be less money available to spend which could strangulate the new government that is installed in January 2018.
Regulations I.18 of the PFM Act 2009 defined the fiscal year of the Government of Liberia as the period between July 1 and June 30 of the following year and it goes further to indicate in Regulations I.16 (1) that the “Accounts should be closed and balanced off on the last working day of financial year.”
The Regulations go further in I.16 (6) to say that “Closing the public accounts for any financial year shall conclude the accounting for that year and no further adjustment shall be made to them.” It is against this backdrop that June 30th has been an historically important date in our public financial management because that is when all commitments must be made in the system and accounting books closed.
FPA has been following this process since the days of Antoinette Sayeh.
Historically, and for the last 11 years, the General Auditing Commission (GAC) has positioned staff at the Ministry of Finance on the last day of the fiscal year in order to “draw the line.”
Usually, by the next morning, the country is aware of what the final expenditure numbers are and within a few days, the final revenue numbers are usually known, thus presenting a true fiscal picture for the year.
In fact, the Ways and Means committees of the Legislature usually rely on this number to finalize the “revenue envelop” for the next fiscal year because the numbers will show whether there will be a carried forward amount in the Consolidated Account at the Central Bank of Liberia or whether there will be deficit. Based on what the number shows, the next fiscal year’s numbers are adjusted appropriately.
In the past, from Ministers Sayeh to Augustine Ngafuan and Amara Konneh, the year-end closure had been a very busy period and has been taken seriously.
Fiscal and economic observers believe all this was done in the interest of accountability and transparency. Speaking to MFDP and CBL staff and some economists over the weekend, most argue that the GoL cannot regress on this key aspect of accountability that presents a true fiscal health of the government and some wondered why the current Minister of Finance Boima Kamara has not taken this seriously.
Section 27 Expiration of Appropriation at End of Fiscal Year
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All un-allotted appropriations and all uncommitted allotments will lapse at the end of the fiscal year.
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All balances of appropriations committed but not disbursed prior to the end of the fiscal year, shall be available for the settlement of those obligations within 90 days from the end of the preceding fiscal year. All such balances not disbursed after 90 days following the end of the preceding fiscal year shall be moved to government Consolidated Account. The recording, accounting, and reporting of such undisbursed balances shall be set out in accounting regulations to be issued under this Act and shall be consistent with the provisions of sections 33, 34 and 35 of this Act.
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In order to facilitate proper accounting and reconciliation of the Consolidated Fund, the Minister shall establish new bank accounts at the start of each fiscal year for the collection of revenues against the new fiscal year’s budget. After 90 days following the end of the preceding fiscal year, all accounts established for the execution of the budget of the preceding fiscal year shall be closed and balances therein transferred to the new accounts established for the new fiscal year.
I.16. Closure of Accounts
(1) At the close of business of the last working day of each month or financial year, whichever is applicable, the accounts shall be balanced off.
(2) The receipts and payments that belong to a period or a financial year other than the reporting period or fiscal year shall be shown in the accounts and the details shall be given in the notes to the accounts.
(3) Except as provided for in any enactment, no moneys shall be transferred from the appropriation to:
(a) a deposit account; or to any other agency, for the purpose of meeting payments after the close of a financial year.
(4) Where any payment has been properly charged to an advance account before the end of the financial year, or has been incorrectly charged to an appropriation account, the Comptroller-General may adjust the payments to the correct appropriation account after the end of the financial year as if the expenditure authorities had not lapsed.
(5) The Comptroller-General shall not later than 30 days before the end of the financial year, inform heads of departments of the date of final closure of the accounts and heads of departments shall ensure that their own accounts are in agreement with the public accounts before the date of final closure.
(6) Closing the public accounts for any financial year shall conclude the accounting for that year and no further adjustment shall be made to them.
(7) Closure of the public accounts shall not debar any claim, proceedings or transactions arising from the closure and any transaction or adjustment arising from closed accounts shall be recorded in the public accounts of the year in which such transaction or adjustment is made.
I.18. Fiscal Year
The fiscal year of Government shall run from the 1st day of July until the 30th day of June the following year.