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Liberia: ‘Report of Corruption, Inconsistent Application of Regulations, Uncle Sam Slams Transparency Lapses

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TRANSPARENCY CONCERNS: A Fiscal Transparency Report from the US State Department has urged the Liberian government to make supreme audit institution audit reports publicly available within a reasonable period of time and ensure the criteria and procedures used to award natural resource extraction contracts and licenses are consistent with the requirements set by law or regulation and make basic information on all natural resource extraction awards publicly available.

Washington – A Fiscal Transparency Report from the US State Department has recommended a major overhaul if Liberia’s fiscal transparency is to be improved.

The report released this week says Liberia could improve its fiscal transparency by ensuring the budget is substantially complete and off-budget accounts are subject to adequate audit and oversight.

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

During the review period, the report notes that budget documents and information on debt obligations were widely and easily accessible to the general public, including online.

The report also said that foreign assistance receipts, largely project-based, were neither adequately captured in the budget nor subject to the same audit and domestic oversight as other budget items. The report however added that budget documents made it difficult to identify natural resource revenues.

The report notes that while the information in publicly available budget documents was generally reliable, the country’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 noted.

The US fiscal report describes the minimum requirements of fiscal transparency developed, updated, and strengthened by the Department in consultation with other relevant 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, 2018. The report also provides a description of the use of the Fiscal Transparency Innovation Fund.

The Department’s fiscal transparency review process assesses whether governments meet minimum requirements of fiscal transparency. For the purpose of this report, 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. Fiscal transparency is a critical element of effective public financial management, helps build market confidence, and underpins economic sustainability. Fiscal transparency 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.

“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”

Fiscal Transparency Report from the US State Department

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

Section 7031(b) of the FY 2019 SFOAA requires the Secretary of State to “update and strengthen” minimum requirements of fiscal transparency for each government receiving assistance appropriated by the Act as identified in the 2014 Fiscal Transparency Report. It further requires the Department to make or update any determination of “significant progress” or “no significant progress” in meeting the minimum requirements of fiscal transparency for each government that did not meet the minimum requirements. Through authority delegated from the Secretary in Delegation of Authority 245-2, the Deputy Secretary of State made those determinations for 2019.

The fiscal transparency determinations may change from year to year due to updating and strengthening minimum requirements of fiscal transparency as required by law, changes in governments’ performance on public financial management, or new information coming to the Department’s attention. As a result, some governments may fall short of these requirements, despite in some cases maintaining or even improving their overall level of fiscal transparency.

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.

The Department and USAID have begun obligating a planned total of $4.5 million in FY2018 Economic Support Funds through the FTIF to support 15 projects in the following countries: Algeria, Armenia, Ecuador, Ethiopia, Guinea, Haiti, Liberia, Maldives, Namibia, Niger, Seychelles, The Gambia, Trinidad and Tobago, and Uganda. Congressional notifications of these funds are forthcoming. The projects are targeted to advance efforts by government and civil society to enhance fiscal transparency and public financial management practices and to improve public awareness and involvement in the expenditure of public resources. (The projects involving Seychelles and Trinidad and Tobago required and received additional internal review and approval because they are high-income countries, and, as a general matter, the United States does not use foreign assistance resources to fund programs benefiting developed countries.)

The Department assessed the following governments as meeting the minimum requirements of fiscal transparency for 2019: 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, Moldova, Mongolia, Montenegro, Morocco, Namibia, Nepal, North Macedonia (formerly Republic of Macedonia), Panama, Paraguay, Peru, Philippines, Poland, Portugal, Romania, Senegal, Serbia, Seychelles, Sierra Leone, Singapore, Slovakia, Slovenia, South Africa, Sri Lanka, Thailand, Timor-Leste, Tonga, Trinidad and Tobago, Tunisia, Turkey, Uganda, and Uruguay.

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