LIBERIA: By US$66 Million in 18 Months to Ministries and Agencies MFDP Under Disbursed Legislative Approved Budgetary Appropriation …GAC Audit Report discloses

The Ministry of Finance and Development Planning (MFDP) under disbursed Legislative Approved Appropriation of US$ US$ 8,306,090 to 94 ministries and agencies during the fiscal year July 1, 2021 to June 30, 2021 and US58,071,420 to 53 to ministries and agencies for the Special Budget Year July 1, 2021 to December 31, 2021 (US$66,377,510 for both periods), according to the audit of Government of Liberia (GOL) Consolidated Funds Account Financial Statements submitted by the Auditor General of the Republic of Liberia to the National Legislature.

The Special Budget Year is the result of the change of the Government of Liberia’s fiscal year from July 1 – June 30 to January to December 31.

The Ministries and Agencies affected in fiscal year July 1, 2020 to June 30, 2021 are the Ministry of Education US1,337,510, Ministry of Justice, US$707,050, Ministry of National Defense US$490,290 the Judiciary US$436,890, among others. During the Special Budget Year July 1, 2021 to December 31, 2021, the Ministries and Agencies affected include Ministry of Public Works US12,005,650, Ministry of Health US6,915,280, Ministry of Education, US$2,818,910, Ministry of Finance and Development Planning, US$13,753,190, among others.

At the same time, Note 2 of the audited financial statements of the Consolidated Fund of the Government of Liberia for the fiscal year July 1, 2020 to June 30, 2021 and the Special Budget Year showed that Cash and Cash Equivalents which comprise the Government’s account held at the Central Bank of Liberia at June 30, 2021 amounted to US42.62 million, while the Treasury Balances as at December 31, 2021 was US$ 0.7 million, respectively.

In the transmittal letter to the Speaker of the House of Representatives and President Pro-Tempore of the Liberian Senate, the Auditor General indicated that given the significance of the matters raised in this report, the GAC urges the Honorable Speaker and Members of the House of Representatives and the Honorable President Pro- Tempore and Members of the Liberian Senate to consider the implementation of the recommendations conveyed in the report with urgency.

Regulation E.7 (1) (2) of the Public Financial Management Act of 2009 as amended and
restated 2019 requires that a head of government agency shall inform the sector minister
or appropriate authority immediately of any circumstances that are likely to affect materially
the budgetary results either through revenue and expenditure or other receipts and
payments of the Government agency.

According to the report, facilitating unauthorized under disbursements of approved appropriation to Government of Liberia entities may impair the achievement of the entities’ mandates and objectives Therefore, the GAC has recommended that Management should provide substantive justification for facilitating unauthorized under disbursement of approved appropriation to some GoL ministries and agencies and going forward, Management should ensure that all under disbursements of approved budgetary allotments to GoL ministries and agencies are approved by the National Legislature.

The Management of the MFDP indicated in its response to the Management Letter that “Where circumstances arise in which the operating requirements of a Government Agency make it necessary to rearrange the budget provision for sub-heads, items or sub-items or sub-sub-items within the ambit of a single head, savings under one classification may be utilized to provide for extra expenditure under another without affecting the total funds to be disbursed from the head. (2) The Deputy Minister of Budget, may approve reallocation of appropriations to promote efficiency in government, to support changes in program enacted by the National Legislature to take effect during the year, and to provide resources he deems necessary for an agency to render essential basic services.

However, the Auditor maintained in his position that references and exhibit provided by Management did not adequately address the issues raised, therefore the GAC maintained its position that Management should ensure that all under disbursements of approved budgetary allotments to GoL ministries and agencies are approved by the National Legislature.