The Ministry of Finance and Development Planning (MFDP) of Liberia has lauded the 2024 General Auditing Commission (GAC) Audit Report, emphasizing the significant strides made in financial management, budgetary control, and accountability under the current administration. The report’s “Qualified” opinion, a notable improvement from the “Adverse” opinion in 2023, signifies substantial progress in these areas. This positive shift underscores the effectiveness of implemented reforms, leading to enhanced budget discipline, improved documentation and internal controls, greater transparency in cash and debt management, more accurate reconciliation processes, and more reliable financial reporting. The report highlights a marked transformation in the reliability of financial statements. While the 2023 statements were deemed materially misstated and unreliable due to widespread control failures, the 2024 statements are considered fairly presented in all material respects. This achievement reflects a significant improvement in documenting transactions accurately and comprehensively.
The GAC report details specific examples of progress made. For instance, the 2023 report flagged US$18.97 million recorded under the Central Bank of Liberia (CBL) Sundry Account without supporting documentation. In contrast, the 2024 report confirms full disclosure and reconciliation of all transactions related to this account. Furthermore, the 2024 report reveals the complete disclosure of externally restricted cash balances, a critical element missing from the 2023 financial statements. Bank account reconciliation also saw dramatic improvement, with 95% of accounts reconciled in 2024 compared to a significant number of unreconciled accounts in 2023. The remaining 5% of accounts have been flagged for closure, illustrating the ongoing commitment to sound financial practices.
Contrary to public speculation, the GAC report does not allege any misappropriation or missing funds at the MFDP. Supporting documentation was available for all payments processed, with the exception of transactions totaling US$2.8 million. This discrepancy, attributed to challenges in locating original documentation within the stipulated timeframe provided to the auditors, highlights the limitations of the current document management system. The difficulty stems not from malfeasance but from the cumbersome archival process and the sheer volume of records accumulated over multiple fiscal years. The MFDP is actively working on improvements by implementing a hybrid approach comprising ongoing manual document scanning and moving towards an electronic document management system (EDMS).
The MFDP acknowledges the challenges posed by the existing document archiving system, which has proven inadequate for efficiently storing and retrieving documents. This is being addressed through a two-pronged approach. Firstly, a manual scanning process has been initiated for all documents supporting transactions starting in 2025. This meticulous approach will create a digital backup and improve accessibility. Secondly, the MFDP is investing in an EDMS to automate document storage and retrieval. This system, expected to be fully operational shortly, will significantly streamline the audit process and ensure readily available documentation for all transactions. The combination of these measures underscores the Ministry’s commitment to transparency and accountability.
The GAC report also addressed instances of expenditure exceeding budget appropriations. The MFDP clarified that such overruns do not automatically imply wrongdoing, as unforeseen circumstances, such as by-elections and emergencies, can necessitate urgent expenditures. Established budget execution procedures allow for such contingencies, including the utilization of contingency reserve funds and interagency budget transfers below a specified threshold that do not require legislative approval. While the GAC identified US$2.88 million in excess appropriations, the MFDP clarified that, with the exception of the Bureau of National Concessions, all other expenditures remained within the permissible limits. The Bureau’s excess expenditure, attributed to an intervention to avert a potential crisis, was duly reported to the Legislature in regular budget reports, demonstrating transparency and accountability.
In summation, the 2024 GAC report showcases significant advancements in public financial management under the current administration. The transition from an “Adverse” to a “Qualified” audit opinion reflects a concerted effort to enhance transparency, accountability, and budgetary discipline. While challenges related to document archiving persist, the MFDP has implemented measures to rectify these issues through manual scanning and the upcoming EDMS. The report affirms that no funds were misappropriated or missing, with the documented exception being attributable to archival challenges, not malfeasance. The government’s response demonstrates a commitment to continuous improvement and strengthening public financial management practices for the benefit of Liberia.
