US 2020 Report On Liberia Suggests Ways To Improve Fiscal Transparency

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In its recommendations, the report urged the Liberian government to ensure that the budget is substantially complete and off-budget accounts are subject to adequate audit and oversight

Monrovia – The annual  U.S. State Department Fiscal Transparency Report, which assesses whether governments around the world meet the minimum requirements of fiscal transparency,   has recommended ways the Liberian government can improve its performance.

The minimum requirements of fiscal transparency include having key budget documents that are publicly available, substantially complete, and generally reliable.  The review includes an assessment of the transparency of processes for awarding government contracts and licenses for natural resource extraction. According to the State Department, fiscal transparency is a critical element of effective public financial management, helps build market confidence, and underpins economic sustainability.  It also fosters greater government accountability by providing a window into government budgets for citizens, helping citizens hold their leadership accountable, and facilitating better-informed public debate.

In its recommendations, the report urged the Liberian government to ensure that the budget is substantially complete and off-budget accounts are subject to adequate audit and oversight.

The report also suggested that the government produce and publish a supplemental budget when actual revenues and expenditures do not correspond to those in the enacted budget.

The report recommended that the government make the supreme audit institution’s reports publicly available within a reasonable period of time and ensure that the criteria and procedures used to award natural resource extraction contracts and licenses are consistent with the requirements set by law or regulation. It also called for the making basic information on all-natural resource extraction awards publicly available.

During the review period, the report credited the government for making budget documents and information on debt obligations easily accessible to the general public, including online.  

Nevertheless, the report averred that budget documents, were not substantially complete.  “Significant deviations between projected and actual revenues during the review period, however, undercut the reliability of budget information.  Liberia’s supreme audit institution did not make its audit reports publicly available within a reasonable period of time.  The criteria and procedures for awarding natural resource extraction licenses and contracts were outlined in law, although there have been reports of corruption and inconsistent application of regulations in practice.  Basic information on some, but not all, natural resource extraction awards was publicly available.”

The report describes the minimum requirements of fiscal transparency developed, updated, and strengthened by the Department in consultation with other relevantd federal agencies.  It reviews governments that were originally identified in the 2014 Fiscal Transparency Report and Equatorial Guinea.  It assesses those that did not meet the minimum fiscal transparency requirements and indicates whether those governments made significant progress toward meeting the requirements during the review period of January 1 – December 31, 2019. 

In the wake of the report’s release, FrontPageAfrica has learned that the government of Liberia is reportedly requesting a meeting with the State Department to understand the basis of the report when last year was about massive reform and tmfusxal transparency. The government has reportedly been sharing fiscal data with the International Monetary Fund for almost a year now.

The government says it has made the recast budget available on the Ministry of Finance and Development Planning website.

“During the review period, budget documents and information on debt obligations were widely and easily accessible to the general public, including online.  Budget documents, however, were not substantially complete.  Significant deviations between projected and actual revenues during the review period, however, undercut the reliability of budget information.  Liberia’s supreme audit institution did not make its audit reports publicly available within a reasonable period of time.”

– U.S. State Department 2020 Report on Fiscal Transparency

The Annual reviews of the fiscal transparency look at governments that receive U.S. assistance in a bid to help ensure U.S. taxpayer funds are used appropriately and provide opportunities to dialogue with governments on the importance of fiscal transparency.

The report identifies the significant progress made by each government to publicly disclose national budget documentation, contracts, and licenses, which is additional to information disclosed in previous years.  It makes specific recommendations of short- and long-term steps such government should take to improve fiscal transparency.  Finally, it includes a detailed description of how funds appropriated by the Act are being used to improve fiscal transparency including benchmarks for measuring progress.

The report includes a description of how governments fell short of the minimum requirements.  It outlines any significant progress being made to disclose publicly national budget documentation, contracts, and licenses.  It also provides specific recommendations of short- and long-term steps governments should take to improve fiscal transparency.  Finally, the report outlines the process the Department followed in completing the assessments and describes how U.S. foreign assistance resources have been used to support fiscal transparency.

While a lack of fiscal transparency can be an enabling factor for corruption, the report does not assess corruption.  A finding that a government “does not meet the minimum requirements of fiscal transparency” does not necessarily mean there is significant corruption in the government.  Similarly, a finding that a government “meets the minimum requirements of fiscal transparency” does not necessarily reflect a low level of corruption.

In carrying out its evaluation, the Department recognizes specific circumstances and practices of fiscal transparency differ among governments while ensuring minimum fiscal transparency requirements are met in order to enable meaningful public participation in budgeting processes.

The 2020 fiscal transparency review process evaluated whether the government publicly disclosed key budget documents, including expenditures broken down by ministry and revenues broken down by source and type.  The review process also evaluated whether the government has an independent supreme audit institution or similar institution that audits the government’s annual financial statements, and whether such audits are made publicly available.  The review further assessed whether the process for awarding licenses and contracts for natural resource extraction is outlined in law or regulation and followed in practice, and whether basic information on such awards is publicly available.  The Department applied the following criteria in assessing whether governments met the minimum requirements of fiscal transparency.

The Department assessed the following governments as meeting the minimum requirements of fiscal transparency for 2020:  Afghanistan, Albania, Argentina, Armenia, Bosnia and Herzegovina, Botswana, Brazil, Bulgaria, Burkina Faso, Cabo Verde, Chile, Colombia, Costa Rica, Côte d’Ivoire, Croatia, Czech Republic, El Salvador, Estonia, Fiji, Georgia, Ghana, Greece, Guatemala, Guyana, Honduras, Hungary, India, Indonesia, Israel, Jamaica, Jordan, Kazakhstan, Kenya, Kosovo, Kyrgyz Republic, Latvia, Lithuania, Malaysia, Malta, Marshall Islands, Mauritius, Mexico, Micronesia (Federated States of), Moldova, Mongolia, Montenegro, Morocco, Namibia, Nepal, North Macedonia , Panama, Paraguay, Peru, Philippines, Poland, Portugal, Romania, Samoa, Senegal, Serbia, Seychelles, Sierra Leone, Singapore, Slovakia, Slovenia, South Africa, Sri Lanka, Thailand, Timor-Leste, Togo, Tonga, Trinidad and Tobago, Tunisia, Turkey, Uganda, and Uruguay.

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