US$1M Unaccounted For at Liberia’s National Investment Commission


Monrovia – An audit report of the General Auditing Commission (GAC) on the National Investment Commission (NIC) for the years 2010 to 2013 shows several improprieties by the management of the NIC amounting to over one million United States dollars being unaccounted for.

Report by Henry Karmo[email protected]

“Upon my assumption as head of the NIC we met an institution that was barely in functional. The National investment Commission was housed within the national archive and portion of said building was occupied by the Archive and many of the employees because of there was nowhere for them to sit and no desk and equipment to work with were sitting under the tree” – O. Natty B. Davies

Former Boss Says Commission Ran Under A Tree

At a hearing held by the Legislature Public Account Committee (PAC) on Friday, February 3, 2017, officials representing the NIC including its former chairman, O. Natty B. Davis, failed to provide documentations to counter the GAC report, but blamed the lack of documents forces of nature.

The GAC report claims that there was no evidence that the NIC management had put in place a disaster recovery plan to help recover transaction data and other information to ensure business continuity.

The failure to establish a disaster recovery plan may result in the complete loss of transaction data and information in the aftermath of disaster,” the report stated.

Richford Garty, who still works at the NIC as director of finance told the PAC, that an effort by the NIC to renovate the roof on the portion of the building the documents were, there was a heavy rain downpour of rain which destroyed the documents, making them unable to provide what the GAC asked for.

Supporting the finance officer’s claim, Natty B concurred that during the year under audit, staffers of the commission were constrained to operate from under the tree in the compound of the commission, making it difficult to locate documentations.

“Upon my ascension as head of the NIC, we met an institution that was barely functional.

The National investment Commission was housed within the national archive and portion of said building was occupied by the Archive and many of the employees, because of there was nowhere for them to sit and no desk and equipment to work, with were sitting under the tree.”

Davies was appointed chairman of the NIC, replacing Richard Tolbert.

Among many things, the GAC report claims that the Chairman, Executive Director and Comptroller of NIC could not submit vouchers, general ledgers and financial statements to support expenditure amounting US$686,985.47 (2010/2011) and US$719,796.00 (2011/2012)

“Management’s failure to provide financial records to support the expenditure made during the fiscal years increases the risk of fraud, waste and abuse

“It is the responsibility of the NIC Management to preserve its assets and the records of its transactions by either backing up data or storing pertinent transaction records to mitigate the risk of loss.

 “The NIC Management exposed Government assets to risk by its failure to take steps that could have prevented damage to Government properties. The Management of NIC failed to secure Government properties and transaction records entrusted to it, therefore the management should be held accountable,” the report stated.

The GAC report furthered that financial statements provided by the management of NIC during the course of the audit did not contain accounting policies and explanatory notes, and a comparison of budget verses actual (when an entity makes publicly its approved budget); two of the basic requirements of IPSAS cash basis.

“Failure to prepare financial reports based on the Government of Liberia adopted financial reporting framework could undermine Government’s effort to strengthen financial accountability and controls over public receipts and expenditure was one major shortfalls of the NIC noticed during the audit period.”

On the issue of bank account, the audit report revealed the NIC maintained seven bank accounts with three banking institutions and no evidence to show that the finance department conducted monthly bank reconciliation on the accounts.

“Failure to prepare bank reconciliation could lead to untimely detection of errors, omissions or undetected loss and could result to the misstatement of the financial statements.

The Management of NIC requested lease holders to deposit lease payments totaling US$129,550.00 directly to NIC MIP’s account at the Liberia Bank for Development and Investment (LBDI) with no evidence that NIC sought approval from the Minister of Finance to deposit lease payment in the account at LBDI and Management did not provide receipts for US$73,850 of lease payments according to the report.

The 2010-2013 audit report also highlighted that the NIC Management made overtime payment of US$4,304.37 without justification. Making overtime payments without evidence of work performed, something the auditors said, could increase the risk of unbudgeted expenditure, waste and abuse.

No Compliance with PPC and Travel Ordinance 

In another discovery, the GAC said the purchase of air tickets without a minimum of three quotations; non-retirement of foreign trips by the NIC Chairman and staff; no evidence of approval of trip made by the Executive Director; incidental allowance payments not accounted for, absence of documentation such as boarding passes to validate the travel were part of the discovery made.

“NIC employees served as consultants while in the employ of NIC in violation of the PPC Act. Management did not provide evidence of the payment of consultancies contract net of taxes.

Payment of fees for services to existing NIC employees may lead to conflict of interest and undermines accountability and transparency. Non-remittance of taxes denies Government of the needed tax revenue. Management should be held accountable for the violation of the PPC,” the report stated.

“An employee of NIC, Prince N. Karpeh, received payments amounting to US$4,580 on behalf of a consultant, Diasmer P. Bloe and there was no evidence of a written authorization from the consultant that payment should be made to Mr. Karpeh. The report also added that the email was written to Chairman Davies and not Mr. Karpeh. 

Additionally, the email was not a communication authorizing NIC to make payment to Mr. Prince Karpeh or Chairman Davies.

The GAC also claimed that the NIC Management did not follow the PPC process in the procurement of fuel amounting to US$68,454.93 for the period 2012/2013. Payments were made to vendors who were not registered dealers of fuel. There was no evidence that Crosswords, Bashir Business Center and Cactus Motor were engaged in the supplied of fuel as registered dealers the report claim.

“There was no evidence NIC had put in place a risk assessment process for identifying, analyzing and evaluating organizational risks. Also, there was no evidence that the organization has a risk management policy to mitigate internal and external risks that could severally impact the achievement of the institution’s objectives.

Failure to strengthen the institution’s internal audit function could limit the scope of the unit’s activities; increase the risk of management interference in the work of internal audit, thereby compromising the reliability and integrity of financial and operational information,” the report claims.