IPNews-Monrovia: An Act of the National Legislature of June 2005, amending Chapter 53.2 of the Executive Law of 1972, grants the General Auditing Commission the status of an autonomous agency of Government. This places Chapter 53, Section 53.1 of the Executive Law in compliance with Article 89 of the 1986 Liberian Constitution, which provides that “the General Auditing Commission once a year, shall perform audits of all Government agencies and Government organizations and examine, to the extent deemed necessary, all transactions and accounts relating to the receipts, disbursements, and utilization of public monies”.

The mandate of the GAC, among other things, further states that “the GAC shall perform audits of all property accounts and transactions of all agencies and Government organizations; such audits shall be conducted as far as practicable at the place or places where the property and records are located and shall include an evaluation of the effectiveness of internal control and other methods of safeguarding the assets of the Government.” It says, the process shall “include audits of withdrawals of money within the responsibility of the Government as stated in the appropriation acts or financial obligations by the Auditor General’s Annual Report for Calendar Year which ends December 31, each year.”

Now, an investigation by the Independent Probe, in the course of ‘Following the Money”, a project of transparency and accountability in the public sector,   has established that it has been nearly six and seven years respectively since the General Auditing Commission last audited both the National Social Security and Welfare Corporation-NASSCORP, in 2016 and the National Elections Commission-NEC in 2012, contrary to the mandate provided for by Law granting the GAC to conduct periodic audits of all government institutions. In a financial statement report of the National Social Security and Welfare Corporation (NASSCORP), the General Auditing Commission (GAC), reported to the Public Accounts Committee (PAC), of the National Legislature that the accounting standard codification (ASC 310-10-35 (FAS 114) – ‘Accounting by Creditors for Impairment of a Loan’- under U.S. GAAP, which requires that an entity applies the incurred-loss approach to the recognition of loan impairment. A loan is considered impaired if “it is probable that a creditor will be unable to collect all amounts due according to the contractual terms”.

This being the case, the GAC during the audit and the analysis of the outstanding loan receivable balances, observed that the Management of NASSCORP appears not to have performed any impairment assessment on the loans issued from contributors’ funds for fiscal periods 2013/2014 and 2014/2015 although there were significant indicators of impairment on the loans.

The report named Morris American Rubber Company, of receiving 650,000 loan between May & September 2013, with an interest of 61,543 to be paid August -2014, which has since expired with only 117,031 been paid, while outstanding loans of 532,969 remain unaccounted for. Another recipient of the NASSCORP unrecovered loan, was the Premier Developer’s JV, receiving 1,258,670, in July 2012, with an interest of 75,000, to be paid on Nov-2016, which has since expired with no report of payment made of 1,258,670, representing a total outstanding loan by NASSCORP in the tone of 117,031 1,791,639. Regrettably, the principal amount borrowed by Premier Developers JV of US$1,258,670, including an amount of US$8,670 which relates to consulting fees for monitoring activities of the Premier Estate Housing Project, were identified by the GAC indicators of impairment on loans of having no evidence of perfection of collateral security to recover the value of interest.

The company has been closed due to significant financial challenges from the drastic fall on world rubber prices. The Independent Probe, following the trail, established that the GAC advised that failure to conduct impairment assessment on loans may lead to loss of principal and interest, and ultimately return for contributor’s funds.

Additionally, the GAC recommended that the management of NASSCORP performs an adequate assessment of the recoverability of receivable balances, using current available information on those receivables including repayment frequency. Any uncollectible balances should be written off the books.

In response to these uncollected loans inquiries, authorities of NASSCORP responded that the loans given were part of its desire for economic recovery by promoting value added production in the rubber sector, including NASSCORP’s desire to diversify its own investment portfolio to improve profitability.

NASSCORP justified that MARCO being one of the largest privately own rubber farms and employer in Margibi County, sought to rehabilitate its operations after the civil crisis including its 500 ton per day crumb rubber processing plant to produce crumb rubber for exports; yet Marco, has not remitted the required repayment for the loan to the government of Liberia.

With all these unsettled answers, the Independent Probe embarked on seeking redress through an FOI request with GAC Auditor General Yusador S. Gaye, requesting a copy of an audit conducted on the operations of the National Social Security & Welfare Corporation, for the periods 2014-2016.

But the in response to the FOI request made by IPNews, the GAC said it has just commenced an audit into NASSCORP operations and books since 2016; this comes as a breach of the mandate provided for by law to conduct said audits annually.

In a related development, the Independent Probe made a similar FOI request to the National Elections Commission-NEC. The elections ministering body has received millions of dollars since its last audit was conducted in 2012.

At that time, the auditing of the NEC was necessitated by indictment of then top management team members comprising its former NEC Chairman, James M. Flomoyan and four others from the Commission for various accounting offenses while serving in their various positions during the periods 2006 – 2012.

According to the Act creating the National Elections Commission, it is required that the NEC submits an annual budget to Liberia’s Budget Bureau for consideration and approval. Upon approval of the budget, funds are paid in a timely manner, according to the planned expenditure, into an account established by the NEC. International donor support was critical in both the 2005 and 2011 national elections, although less so during the 2011 elections.

While the NEC has not published its 2011 elections budget report, the investigation reveals that the 2010 – 2011 budget is estimated at over USD 38 million, of which over USD 27 million (70 per cent) came from international donors.

During the 2010/2011 electoral cycles, funds from gender mainstreaming projects were intermittently redirected to processes regarded as more critical to the success of the national elections, such as voter registration, poll worker training and technology acquisitions, and others, for which the commission is yet to provide a comprehensive report.

Importantly, the accountability requirements of NEC mandates that NEC publish an annual updated strategy, together with an annual plan and the funding provision for that year, as agreed with the Budget Bureau. It is also required to submit annual reports to the National Legislature and the president of Liberia on its general operations.

The commission is also required to publish an annual report and an externally audited set of accounts related to its achievements and activities compared to the annual plan. The report must reflect sources and usage of Liberian government and external funds and other resources, which still remains a titanic drama. Investigation continues as Part II follows next

For more on this developing story, stay log onto www.independentprobe.com ; Facebook: The Independent Probe Newspaper; Twitter: Independentprobe, Linkedin: Independentprobe.

 This article was brought to you by the project: “Transparency and Accountability in the Public Sector”, with focus: “Following the Money”. With support from OSIWA