IPNEWS: Few weeks ago, another damning audit report by the General Auditing Commission rocked several government entities, particularly the Central Bank of Liberia sparking controversy among ordinary Liberians.
Now, a Financial Statement Audit of the National Road Fund by the General Auditing Commission has revealed how over US$6,164,455.01 remains unaccountable for after it was established that serious discrepancies persisted between receivables reported and actual amount confirmed by petroleum importers here.
The General Auditing Commission audited NRF’s financial statements from July 1, 2019, to June 30, 2020.
According to the GAC, these financial statements comprise a statement of Receipts and Payments, a Statement of Comparison of budget and actual amounts, a statement of financial position for the year that ended, and a summary of significant accounting Policies and other explanatory information.
However, the Commission observes that the Management of National Road Fund during the period under review reported a total of US$ 22,212,538.00 as receivables due from petroleum importers for fuel levy charges with a net variance of (US$6,164,455.01) between the receivables reported in those financial statements and the amount confirmed by petroleum importers the GAC spoke with.
It notes that, as indicated in the financial statements, the GAC could not substantiate the existence, completeness, and collectability of the accounts receivables due to importers’ failure to confirm them fully.
Outstanding Commitments
Furthermore, the Audit Report also reveals that for the period under audit, NRF Management did not disclose in its financial statements commitments to contractors totaling US$6,100,508.38, noting that the outstanding commitment is an obligation against the total cash balance of US12,936,639.00 brought forward as of 30 June 2020.
The Report further observes that the closing cash balance reported in the NRF’s financial statements is restricted by a brought-forward commitment of US$6,100,508.38.
“We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion,” Auditor-General P. Garswa Jackson, Sr., informed the former Manager of the National Road Fund, Mr. Boniface D. Satu, in written communication.
He reminds that NRF Management is responsible for preparing and fair presenting the financial statements in accordance with IPSAS Cash Basis and for such internal control as management determines necessary to enable the preparation of financial statements free from material misstatement, whether due to fraud or error.
“In preparing the financial statements,” AG Jackson continues, “Management is responsible for assessing its ability to continue as a going concern, disclosing, as applicable, matters related to going concerned and using the going concern basis of accounting unless management either intends to cease operations or has no realistic alternative but to do so. The NRF Management is responsible for overseeing the Project’s financial reporting process.”
Auditor’s Responsibility
On the other hand, he says the GAC’s objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error and to issue an auditor’s report that includes an official opinion.
“Reasonable assurance,” the AG further notes, “is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISSAIs will always detect a material misstatement when it exists.”
He says misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users made based on these financial statements.
Statement of Responsibilities
In his response, Mr. Satu argues that the most appropriate accounting policies have been consistently applied and supported by reasonable, prudent judgment and estimates in preparing these financial statements.
“To the best of my knowledge and belief, these Financial Statements agree with the books of accounts, which have been properly kept. I accept responsibility for the integrity of these financial statements, the financial information they contain, and their compliance with the provisions of the Public Financial Management (PFM) Act of 2009”, he defends.
Satu further justifies that, in accordance with the provisions of the Public Financial Management (PFM) Act of 2009, he is responsible for controlling and accounting for public funds received, held, and expended for and on behalf of the National Road Fund of Liberia.
He explains that under the same Act, he is required to prepare the unaudited Final Account of the National Road Fund of Liberia to be submitted to the Minister of Finance and Development Planning two months after the end of the financial year to which it relates. However, according to him, he delegated the preparation of the unaudited Final Account to the Finance Officer for transmittal to the Minister, as provided in the attendant Regulations of the Public Financial Management Act of 2009.
As it stands, the NRF, under the Management of Mr. Benedict Satu, is yet to explain the net variance of (US$6,164,455.01) as detected by the GAC.
