Liberia: General Auditing Commission Audit Finds Irregularities in Pro-Poor Loan Scheme
MONROVIA – The General Auditing Commission has completed and submitted the Small Business Pro-Poor Development Fund Loan Scheme (SBPDF) to the Legislature and a copy to the President of Liberia consistent with the GAC Act of 2014. The audit covers July 1, 2019, to June 30, 2020.
The President of Liberia, on December 19, 2018, launched a US$3,000,000 Small Business Pro–Poor Development Fund Loan Scheme (SBPDF) aimed at empowering struggling Liberian businesses per the Executive Mansion website to overcome their long-time spectators’ role in the Liberian economy.
The GAC observed that US$1,000,000 was deposited in the account designated for the Pro-Poor Loan scheme as at July 31, 2020. Of this amount, The Managements of the Liberian Bank Development and Investment (LBDI) and Ministry of Commerce MoCI have disbursed US$533,317 to recipients.
The GAC further observed that the loans were disbursed to beneficiaries in Liberian Dollars instead of the United States dollars which is the currency the Government placed with Liberian Bank Development and Investment (LBDI) for purpose of the loan. The GAC says the disbursements of the loan in United States Dollars would enable the beneficiaries to avoid added costs associated with the purchase of United States dollars on the market, thereby maintaining more cash for growth and wealth creation which are key objectives of the SBPDF funds.
The audit noted that the loans were not disbursed to beneficiaries across the country consistent with Count 7 of the MOU between the Government of Liberia and the Liberian Bank for Development and Investment which states,” that LBDI shall ensure that the disbursement of funds is spread across the country with at minimum two businesses in each of the fifteen (15) countries of Liberia benefiting. The loans were disbursed to beneficiaries in only four (4) of the 15 counties with 75.6 percent of the loan portfolio disbursement concentrated in Montserrado County.
The GAC further observed that nine beneficiaries of the SBPDF loan scheme who received a total amount of US$216,785 did not submit all documents to LBDI as required by the MOU.
The GAC noted that 10 of the 16 beneficiary businesses, constituting 62.5%, did not pay their loan installments when due; as such, most of the loan accounts were in default from 15 days to 248 days.
The GAC noted that on March 29, 2019, the Management of MoCI paid US$33,216 to Business Start-Up Services (BSC) to provide business skills training service for 11 Micro-finance Institutions (MFI) without evidence of a binding contract, a competitive procurement process and a valid tax clearance Furthermore, the GAC observed that amount paid to train the 11 institutions for five (5) days appears to be high for the services provided.
Also, payment amounting to US$8,380.80 was made from the Small Business Pro-Poor Development Fund Loan Scheme for the purpose of advertising the loan scheme without evidence of advertisement.
Finally, the audit noted that the MOU entered into between the Government of Liberia and LBDI was not attested to by the Minister of Justice though the document made provision for the Minister’s signature, which according to the audit report, Management admitted was an oversight.
Meanwhile, the GAC recently submitted to the National Legislature audits of the Government of Liberia Special Accounts Held at the Central Bank of Liberia for the fiscal period July 1, 2012, to June 30, 2018, Eligible Expenditure of the Central Agricultural Research Institute for the Fiscal Year July 1, 2019, to June 30, 2020, Performance Audit of the Customs Cargo Clearance Process at Liberia Sea and Land Borders for the Fiscal Years July 1, 2016, to June 30, 2019, and Performance Audit on the Collection and Disposal of Solid Waste in Monrovia from July 1, 2016, to June 30, 2019.