Monrovia – A report by the General Auditing Commission (GAC) has uncovered several financial discrepancies at the Liberia Institute for Public Administration (LIPA).
Report by Henry Karmo [email protected]
The discrepancies, according to GAC include “Undisclosed Bank Account and Reconciliation, Payments without Adequate Supporting Documentation and Payments to Third Party,” amongst others.
In the report, which covered the auditing period, auditors reported that during the conduct of the audit, the management of LIPA failed to disclose summary of cash balance in its Eco-bank Account (001014700378801) titled Liberia Institute of Public Administration (LIPA).
Auditors wrote: “The balance per the bank statement at June 30, 2013 was US$96.85. Further, there were many inaccuracies observed on the bank reconciliation statements prepared by the LIPA Management.”
The request by GAC for the presentation of bank reconciliation statements did not state reconciliation for only active accounts.
The GAC argued in its report that it is standard financial management requirement to prepare reconciliation for both active and inactive bank accounts as their combined closing balances at the close of the fiscal period should constitute the actual cash balance of the entity.
“The undisclosed Eco-bank account was obtained by the GAC through confirmation letters issued to various banks requesting banking information of LIPA. There were no bank reconciliation statements prepared for this account and its closing balance was not included in the cash balance at the close of the fiscal period 2013/2014.”
According to the GAC report, LIPA management’s assertion that the undisclosed account reported in the GAC report is “not correct” cannot be materially supported. This account mentioned in the audit report was obtained directly from the bank through the GAC confirmation procedure.
The report also accused LIPA management of failing to address the inaccuracies between its bank reconciliation statements and its cash book. Therefore, the LIPA management is in breach of Regulation A. 20 of the PFM Act of 2009.
It was observed during the conduct of the audit that payment made for various items in the amount of US$11,315.00 and L$371,913.00 were without adequate support documentation.
The report is recommending that LIPA management provides the necessary supporting documents for the purchase of items and that in the absence of the response by management, management is in breach of Regulation A.20. of the PFM Act of 2009.
It was also observed during the conduct of the audit that the LIPA Management made payments to several employees amounting to US$14,358.00 for daily subsistence and incidental allowances for foreign and domestic travels without evidence that these allowances were retired and/or accounted for.
Also, it was observed that the LIPA management did not obtain at least three quotations required to purchase air tickets for travels in compliance with the PPCC Act of 2010.
It is being recommended in the report that in the absence of retirement of travel advances; the entire amount should be recovered from those who failed to submit their travel settlement forms. For those who have left LIPA, the entity should also recover the amount from them in line with the travel ordinance.
It was observed during the conduct of the audit that the LIPA management made multiple payments amounting to US$54,238.00 to several individuals and/or employees of the entity rather than the service providers.
It was also observed during the conduct of the audit that the LIPA Management did not prepare and present financial statements in accordance with the Cash Basis International Public Sector Accounting Standards (IPSAS), standards as adopted by the Government of Liberia.
It was observed during the conduct of the audit that the LIPA management wrote and issued checks to vendors out of numerical sequence.
Twenty-five checks were missing from the numerical sequence of checks recorded in the entity’s cashbook for the period audited. Further, there was no evidence that checks written out of sequence were canceled and/or voided by the LIPA management. Copies of the missing checks were requested but were not provided.
In the audit, LIPA management is being accused of not having a policy on petty cash and therefore, was subjected to the GOL’s Petty Cash Threshold as established by the amended and restated PFM Act.
Multiple petty cash replenishment requests exceeded the required threshold of US$200.00 monthly and management failed to provide the petty cash replenishment report with the supporting transactions details.