Liberia: General Auditing Commission Raises Eyebrow on COVID-19 Account Signatories; Wants Finance Ministry Back Out
MONROVIA – The massive corruption that occurred during the Ebola epidemic in Liberia has put the General Auditing Commission on its heels to caution the Executive Committee on COVID-19 to be very cautious of how funds coming in for the fight against coronavirus are disbursed.
Report by Lennart Dodoo, [email protected]
FrontPageAfrica has obtained a copy of a letter from the GAC addressed to the head of the Executive Committee on Coronavirus (ECOC), reminding the committee that due to the lessons learned from the Ebola crisis, audit would be conducted for accountability and transparency of the COVID-19 funds.
“The amount involved in the fight against the COVID-19 would be substantial and, normally when a huge sum of money is expended over a shorter period of time in a weak financial management and control environment the potential for fraud, waste and abuse is very high,” the GAC noted and made several recommendations for screws to be tightened to avoid possible fraud and misuse of funds.
The GAC recommendations
The General Auditing Commission wants the ECOC headed by Madam Mary Broh to ensure that a centralized financial management system and control is established to manage the accounting for the fund.
The GAC also recommended the segregation of duties in the fund management process in order to reduce the risk of erroneous and inappropriate actions like the approval function, accountability and reconciling function, the delivery function, among others.
All ministries and agencies receiving funding for the containment of COVID-19 should establish a separate accounting and reporting system for the COVID-19 funds.
In the event of the procurement of goods and services during this national health emergency, the ECOC should contact the Public Procurement and Concessions Commission (PPCC) for the necessary guidance.
All payments by recipient entities for goods and services should be well documented with original receipt, invoices and goods received notes. Where payments are made to individuals such as military personnel, police officers and healthcare workers, among others, here must be a space provided for their names, signatures and telephone numbers for the amounts received. Alternatively, since payments maybe made by direct deposit or mobile money to the accounts or mobile numbers of these servicemen and women.
All payments made for both goods and services should be done consistent with the Tax Provision of the Revenue Code of Liberia Act of 2000 as amended in 2011.
“The amount involved in the fight against the COVID-19 would be substantial and, normally when a huge sum of money is expended over a shorter period of time in a weak financial management and control environment the potential for fraud, waste and abuse is very high.”– Yusador S. Gaye, Auditor General, Liberia
Finance Ministry Questioned over Control
In the same vein, the GAC raised eyebrow on the list of Finance Ministry employees who are one the management committee. “I’m wondering what will be their roles and what happens to their current roles at the MFDP. Are you seconding these staff for the period? Will they be held accountable for reporting and audit purposes?” the Auditor General, Madam Yusador Gaye questioned in her communication to the Ministry of Finance and Development planning.
The GAC also raised issues with the signatories to the COVID-19 account.
From the GAC’s observation, the signatories listed for both the Liberian dollars and the United States Dollars accounts could checks independently.
The signatories to the accounts are Finance Minister (A) the Comptroller (B); NPHIL Director (A) and Comptroller (B) and the Deputy Finance Minister for Fiscal Affairs (A) and the Comptroller (B).
The GAC insisted that a “centralized management and control would serve as a mitigating factor against multiple self-accounting units in our weak control environment” the GAC stated in the letter.
The GAC advised that due to the Ministry of Finance and Development Planning’s role in setting policies, guidance and procedures for financial management, it should not be involved with the direct operations of the funds.
The GAC recommended that the Ministry of Finance rather set out a clear guidelines and reporting requirements on the COVID-19 funding; and monitor and evaluate the outcome.
Lessons from Ebola
The Ebola-related audits of Liberia documented substantial waste and abuse of funds, and pointed to key lessons learned for the COVID-19 crisis. One such lesson is that if governments and donors are not clear on the role Supreme Auditing Institutions like the General Auditing Commission should play in auditing emergency funds, it creates space for misunderstandings and reduced accountability
For example, in Liberia an investigation by Red Cross auditors revealed that US$2.7m disappeared in fraudulently overpriced supplies, or in salaries for non-existent aid workers. In Sierra Leone, Red Cross staff apparently colluded with local bank workers to skim off over $2m while in Guinea, where investigations are ongoing, around $1m disappeared in fake customs bills”
During the audits of several Ebola funds, it was observed that documentation justifying transactions were either lacking or incomplete in many instances. This ranged from lack of evidence that purported recipients received payments to lack of information on retirement details, invoices, receipts, and a failure to maintain proper record on the distribution of fuel.
Due to the emergency, it was also noted that huge amounts of cash were withdrawn for day-to-day use. However, it was also noted that the controls over the management of cash was weak, leaving those in charge of the cash at risk. Also, in at least one instance, excess cash withdrawn to pay for the compensation of employees were not returned to the bank until the auditors raised the issue.
There were also breach of procurement laws as high value procurements were made in contravention of the procurement rules. Single sourcing of good and services, poorly drafted contracts, and lack of due diligence over fund availability before commitments were all observed.
Audits of the Ebola funds also observed that different types of allowances, including hazard allowance, were paid to individuals. It was noted that in some cases, there was no authority or guidance on the payment of allowances. Doubts were raised about whether some recipients were entitled to the allowances. Additionally, it was suspected that allowances were paid to fictitious persons in some cases.
Supplies such as fuel were said to be purchased and distributed, without evidence that they were distributed to the intended users, indicating that supplies might have been diverted to personal use, among others.