By Sara Camara
MONROVIA, Liberia– Liberia’s Ministry of Finance and Development Planning (MFDP) finds itself in a precarious spotlight following a recent audit by the General Auditing Commission (GAC). The GAC has red-flagged US$2.8 million in budget irregularities for the 2024 fiscal year, yet, in a striking paradox, the same report celebrates significant strides in the nation’s financial management.
The audit, which scrutinized the Government of Liberia’s Consolidated Funds Account, casts a shadow over the MFDP and several other government entities. Two primary concerns emerged: significant overspending and a pervasive lack of crucial documentation for payments.
According to the GAC, various government bodies collectively exceeded their approved budget allocations by a combined US$2.81 million. Notable culprits include the Ministry of Public Works, which burst its budget by US$2.33 million (spending US$40.34 million against an allocation of US$38.01 million). The Liberia Airport Authority (LAA) overspent by US$98,910, and the Ministry of Labor by US$8,390. Most alarmingly, the Bureau of Concessions spent US$373,620 beyond its budget, a staggering nearly 30 percent over its approved limit.
Adding to the financial disarray, the GAC uncovered that payments totaling US$2.8 million lacked adequate supporting documentation. Critical receipts, quotations, contracts, and delivery notes were conspicuously absent. The Auditor General warned that such lapses could erode financial discipline, heighten the risk of misappropriation, and undermine the effectiveness of vital government programs.
In its defense, the MFDP emphatically denied any missing or misappropriated funds. The ministry attributed the documentation gaps primarily to “archiving and document management challenges,” citing limitations in its inherited filing and storage systems. “All transactions were executed with proper authorization and supporting records,” the MFDP stated, explaining that some documents were simply “not immediately located.” To rectify this, the ministry plans to introduce a temporary manual scanning system in 2025 and is investing in a new Electronic Document Management System (EDMS), expected to fully automate record-keeping within months.
Regarding the excess expenditures, the MFDP clarified that most reallocations fell within the 20 percent threshold permitted by the Public Financial Management (PFM) Act and Regulations, with the Bureau of Concessions being the notable exception. The ministry argued these reallocations were essential to meet urgent operational needs, such as the National Road Fund managed by the Ministry of Public Works, and to respond to unforeseen national emergencies or by-elections. “Excess expenditure over appropriation does not necessarily imply wrongdoing,” the MFDP asserted.
However, the Auditor General was unmoved. Despite the MFDP’s explanations, the GAC maintained its findings, emphasizing that management failed to provide evidence of National Legislature approval for the excess expenditures or to document them in an official Statement of Excess Expenditure, as mandated by the PFM Act of 2009. “We maintain our findings and recommendations and will follow up on implementation in subsequent audits,” the report concluded firmly.
Crucially, amidst these damning findings, the GAC audit also shines a bright light on commendable progress in Liberia’s financial governance. The 2024 report indicates a dramatic turnaround compared to the previous year. Financial statements were deemed fairly presented in all material respects. Bank reconciliations saw remarkable improvement, with 95 percent of accounts reconciled in 2024, a stark contrast to the 473 unresolved and 37 transitory accounts from 2023. Furthermore, previously undisclosed restricted cash balances are now fully reported, and transactions under the Central Bank of Liberia Sundry Account, which totaled US$18.97 million in 2023 without supporting schedules, have been fully reconciled and documented for 2024.
The MFDP seized on these positive acknowledgments, underscoring that the 2024 audit validates tangible progress in budget discipline, internal controls, transparency, and financial reporting. “The audit confirms that the government has made meaningful reforms,” the ministry declared, reiterating, “All transactions were properly executed, and the minor gaps identified relate to archiving rather than mismanagement or misappropriation.”
In essence, Liberia’s 2024 GAC audit presents a nuanced picture: a government simultaneously grappling with significant budgetary oversight challenges while making demonstrable strides towards greater financial accountability and transparency. The MFDP insists that ongoing reforms, particularly the implementation of the EDMS, will further strengthen oversight and ensure full compliance in government spending.
