Liberia: Millions Vanish in Thin Air – Preliminary Audit of COVID-19 Fund Reveals

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Monrovia – A preliminary audit report has uncovered that the Government of Liberia’s COVID-19 budget as being expended by the National Public Health Institute of Liberia (NPHIL) and the Ministry of Health (MOH) was not approved by the Legislature in line with the Public Finance Management (PFM) Law of Liberia.

The audit, conducted by the Internal Audit Agency (IAA) under the supervision of its former Director General, Emmanuel B. Nyeswa before his sudden death, also revealed that the expenditure of fund was marred by inconsistencies that could lead to the misapplication and misappropriation of the funds. As a result, the IAA said the health of thousands of Liberians could be jeopardized and ultimately lead to loss of lives.

Background of the Fund

Right after Liberia recorded its first Covid-19 case on March 16, 2020, President Weah set up the Special Presidential Advisory Committee on Corona Virus (SPACOC) to build a robust national control, coordination and command mechanism in order to contain the spread of the deadly disease.

The Incident Management System (IMS) was activated at NPHIL with the then Director General of NPHIL, Dr. Mosoka Fallah serving as the Incident Manager and Head of the Response Team from February 2, 2020 to April 15, 2020.

On April 16, 2020, the responsibility for the management of COVID-19 response was transferred to the Minister of Health, Dr. Wilhelmina Jallah, as chairperson of the IMS, assisted by several officials from both the Ministry of Health and NPHIL.

Comingling of COVID-19 Fund

Although the IAA did not point out whether the total COVID-19 response budget was realized, it noted that the Government of Liberia’s initial support to the COVID-19 funds in the tune of US$750,000 and a cash donation of US$246,300 were comingled or mixed with the Ministry of Health operational account at the Central Bank of Liberia from February 2, to April 13, 2020.

Out of the donated amount, President Weah contributed US$50,000; UBA, US$150,000, Ecobank, US$20,000, the Deputy Finance Minister for Fiscal Affairs, US$2,000 and AFEENET, US$24,300.

By comingling the fund, the IAA said, the IMS breached the Emergency Standing Operation Procedure Sub Section 7: “COVID-19 IMS Bank Account and Signatories” which states:

“The COVID-19 IMS shall operate a banking account at the Central Bank of Liberia or a commercial bank as deemed fit. The account shall be operated in dual currencies of USD and LRD and shall be managed by the following signatories:

  1. Chair of the Incident Management System (MOH)——– A
  2. Deputy Incident Management System (MOH)————–A
  3. Deputy Incident Management System (NPHIL)_———–A
  4. County Response Coordinator (NPHIL)—————–A
  5. Deputy Incident Management System for Finance &Administration (NPHIL)—B
  6. Chief Accountant (MOH)  —————————————————————–B

As a result of the mixing of fund, the IAA stated: “Funds may not be properly accounted for and could lead to misapplication and misappropriation. The situation could lead to increase in cases that could overwhelm the Health System and result to loss of many lives.”

The IAA also claimed that it did not receive bank statements and reconciliation reports for the period February to April 2020 despite several requests made to the IMS Team.

The IMS refusal, the IAA said, made it difficult to verify the actual funds received and deposited for the fight against the pandemic, as well as, expenditure made thereof for the period mentioned. The IAA further noted that there is possibility of unusual transactions going undetected due to the absence of bank statements.

In addition, the IAA pointed out that the MOH and IMS’ joint account at the CBL, if not authorized by the Comptroller General, would contradict the PFM law which states that any public officer who opens or operates any bank account for a Government Agency, which is not authorized by the Comptroller-General is in breach of financial disciplines as defined in sub regulation 20(1).

“Any bank that opens an account for any Government Agency without the authority of the Comptroller-General is in breach of these regulations and liable to be sanctioned by the Central Bank of Liberia. The balance of every bank account as shown in a bank statement shall be reconciled with the corresponding cashbook balance at least once every month; and the reconciliation statement shall be filed or recorded in the cash book or the reference to the date and number thereof.”

Concealment of US71,500 Transaction

With detail illustration, the IAA reported that a check valued US$71,500 (CK#00000101) in favor of  one Quaqua Pewee, an internal staff of NPHIL, was encashed through the Central Bank on May 4, 2020 without any voucher. The check was not recorded in the cashbook; adjustment was made on the May 2020 bank reconciliation report as bank error, the Auditing House said.

In addition, the IAA said the error was not corrected on the June 2020 bank statement and was not adjusted on the June 2020 reconciliation as error. Instead, the amount was concealed in the bank reconciliation report, which suggests an intention to conceal the audit trail.

Concealment of information is an indication of fraud; as such, funds may not be used for the intended purpose, the IAA noted.

No Evidence of Advanced Payment Liquidation

Under this session of the audit report, the IAA revealed that the Ministry of Health made advance payments in the names of personnel valued at US$7,261 and L$2,900,800 and there was no evidence of liquidation for cash advances paid to employees.

Some of the advancement payment covered DSA for contractors, publicity and material repairs, among others. For example on February 14, 2020, an amount of US$1,350 with voucher PV-01606 was advanced to Mr. Lansana M. Kromah for DSA for ten contractors in Region One and Two.

On February 14, 2020, US$500 with voucher PV-01804 was awarded to one Victoria Smith-Mulbah for vehicle servicing and repairs and March 10, 2020, US$500 with voucher PV-01804 advanced to Elizabeth H. Kwemi to purchase consumables for CMO’s office.

On April 3, 2020, US$297 with voucher PV-02032 advanced payment was made to Calvin Coleman for MoH’s CPU usage backup for the Ministry’s website; on Aril 6, 2020, L$686,000 with voucher PV-02048 was advanced to Ministry of Information Cultural Affairs and Tourism (MICAT), but the IAA did not receive any liquidation report and no listing of media institutions that received the cash. Again on April 13, 2020, the sum of L$2,116,800 was advanced to MICAT but No liquidation report, disbursement or activities log.

The Auditing House also reported that on April 9, 2020, L$98,000 was advanced to Annette Beikor for Installation of doors at 14 military Hospital, but no liquidation report, and on June. 9, 2020, US$2,514 was advance to Victor A. Momoh to purchase assorted items for repair and maintenance of the 14 military hospital’s generators; while on June 22, 2020, US$2,000 was issued to Sobor George to negotiate replay of interviews, reproduction of the interviews on CD’s and tapes, securing CD’s and tapes for reproduction process, publication of PR article, etc. However, there is no liquidation report of the amount.

The action, as discovered by the IAA, is in violation of the PFM Regulation, which, among other things, called for a sum of money advanced to a person for a particular purpose to be replenish or amount spent be recouped when necessary by submission of receipts and paid payment vouchers to the head of government agency for approval. Failure to retire advance payments could lead to personal gain, the IAA said.

Payments made without valid contracts

According to the IAA, a total of 902 service contracts valued US$355,960 were submitted for review; and sampled 50 contracts that were traced to the payroll representing 5.54% of the total. It observed that hazard payments made to all 50 persons for February, March and April 2020 were without signatures and approved contracts.

The action, according to the IAA violates the PFM law and the COVID-19 Resource Management Emergency Standard Operating Procedures (ESOP). The finding indicates that hazard payments could be made without services being performed; and funds intended for hazard payments could be misapplied and objectives of fighting COVID-19 may not be achieved.

Allowance valued US$79,212 Not Accounted For

In its draft audit, the IAA further stated that it reviewed payment vouchers totaling US$188,740 written to Rhoda K. Wiah, Konah D. Roberts and Michael Howard to pay March 2020 allowances for personnel working under various pillars and observed that US$79,212 could not be accounted for.

Discrepancy in Disbursements of Compensation

The IAA also noted that Payment voucher # 01604 February 14, 2020 in the amount of US$9,450 (CBL 00218125) was raised and encashed by one Mercy J. Musah to pay casual laborers at Star Base.

Ms. Musah then entrusted US$9,075 to one Andrian Brown for disbursement to the casual laborers. Variance of US$375 could not be accounted for. However, disbursement listing showed that Andrian Brown paid USD10,125 to the laborers and there was no evidence to prove the source of the excess payment of UD$1,050.

It furthered that the signatures on the disbursement list appeared like a penmanship of a single person. In another instance, IAA observed the same workers were paid on payment voucher (PV01627, check number 00278551) on February 18, 2020 valued USD35,000 with different set of signatures. The Casual laborers may either not have been paid or may have been underpaid, which could undermine the fight against COVID-19, the IAA said.

Non-adherence to Business Registration Code with PPCC Procurement Platform

According to the IAA, on April 2, 2020, Bittar Construction Company LIMTED (registered as a construction company) was paid L$1,176,000 and L$1,225,000 on vouchers #s 02007 and 02009 for the supply and delivery of 100 pieces of leather covered mattresses and 25 pieces of television sets respectively for Star Base Observation Center, but these business registration code (G4663) is not in such line of business. The action could lead to registered vendors being denied the opportunity to compete as per the PPCC regulation; and Violation of the PPC Act and Regulation.

Lack of Procurement Plan and “No Objection” Authorization from PPCC for Contracts

The IAA also reported that the MOH and the NPHIL’s COVID-19 Incident Management Systems committed the Government of Liberia by entering into several contracts with vendors (Hotels) for rooms rental and feeding for the period February 2020 to May 2020 in the amount of U$913,675 without adherence to the Public Procurement and Concession Commission (PPCC) Law or Regulation, as there was no approved procurement plan and no evidence of “No Objection” authorization from PPCC. Owing to this, the IAA noted that the value for money may not be achieved in the contracts awarded; and lead to the Violation of the PPC Law and Regulation.

Overstated Contracts

With detailed explanation using chart, it observed that the recalculation of the Precautionary Observation Center (POC) that total contracts for COVID-19 for the period February 2 to May 6, 2020 was valued US$1,318,435 and this amount was overstated by US$84,880. the action, the IAA noted, could lead to loss to GOL revenue and undermine GOL fight against the pandemic.

In addition, the IAA recorded that from POC contracts valued US$1,318,435, the total amount of US$1,125,902 was paid from February 2 to June 30, 2020, thus leaving a balance of USD268,732.46. It was also observed that Bless 1 Luxury Resort had a contract valued USD87,640 but was paid USD208,244.20, thereby leading to an excess payment of USD120,604 without evidence of amendment to the contract for the overpayment as stated in the table below.

CONTRADICTION OF TRANSACTION

In its report, the IAA also mentioned that Simple Source, a registered Vehicle, Logistics and General Services vendor, was hired and paid for providing feeding & accommodation for POC as written on the payment voucher and cash book.  It added that in the COVID-19 national response budget, Simple Source Resources budgeted 26 rooms at the cost of US$130 per day, for 45 days amounting to US$152,100 when in fact Simple Source is a Vehicle, Logistics and General Services company.

However, the MOH and Simple Source Resources, represented by its Manager Oorunisola Ibukun Ayomide, entered into a contract for the use of its resort valued US$7,350. Instead, the IAA reported that the resort submitted an invoice for vehicle rental payment from Monrovia/RIA for 78 days at USD75.00 per day totaling US$7,350, adding “We did not see evidence of tax withholding to GOL.” owing to this, the IAA stated that the proposed budget may be incorrect and the entity could receive payment for services not provided. 

NPHIL did not submit reports for donations of items received

In addition, the audit revealed that NPHIL did not submit receiving and distribution records of donated items received for the fight against COVID-19.  According to the IAA, the Ministry of Health’s warehouse Manager submitted documents and also worked along with the auditors. However, the IAA observed that out of 33 ventilators donated to MOH, 10 were not accounted for, noting that donated items may not be fully accounted for and could be used for personal gain.

Payment Vouchers not submitted for Review

From the cashbook reviewed, the IAA uncovered that 31 payment vouchers valued at US$ 273,432.29 and L$12,581,774.60 were not submitted for review by the auditors as shown in the table. 

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