01/09/2025
MFDP COMMUNICATIONS UNIT RESPONDS TO GAC AUDIT REPORT
Monrovia โ The Ministry of Finance and Development Planning (MFDP) welcomes the recently released 2024 General Auditing Commission (GAC) Audit Report of the Government of Liberiaโs Consolidated Accounts.
The report confirms substantial progress in financial management, budget discipline, and accountability under this administration.
The Government of Liberia has considerably improved in the management of the Consolidated Account.
This is evidenced by a comparative analysis of the 2023 and recently released 2024 GAC Report of the GoLโs Consolidated Accounts.
The Audit Report of 2024 describes the Audit Opinion as โQualifiedโ in contrast to a 2023 Audit Opinion that was Adverse.
The shift from an ADVERSE to a QUALIFIED audit opinion reflects meaningful reform. Improvements were made in budget discipline, documentation and internal controls, cash and debt transparency, reconciliation, and financial reporting.
Additionally, reconciliation efforts and IPSAS compliance have advanced significantly. According to the Reports, in 2023, financial statements were materially misstated and unreliable due to pervasive control failures.
In 2024, all financial statements were fairly reported in all material respect. This is a reflection of the fact that most transactions were properly documented.
Furthermore, the analysis revealed that in 2023, US$18.97M was recorded under the CBL Sundry Account without supporting schedules; while in 2024, transactions to CBL Sundry Account were fully disclosed with reconciled schedules.
Meanwhile, the audit reports of the GAC Consolidated Account for 2023 and 2024 showed that in 2023, there was no disclosure of externally restricted cash balance, while in 2024, restricted balances were fully disclosed in financial statements.
Another area of improvement in the management of the GoL Consolidated Account according to the 2024 GAC Audit Report is Bank Account Reconciliation. According to the report, in 2023, 473 bank accounts and 37 transitory accounts were not reconciled, while in 2024, 95% were reconciled, with 5 per cent flagged for closure
Contrary to some opinion in the public domain, the audit reports did not state that any money was missing or misappropriated at the MFDP. All payments were done with proper documentation.
Of the more than 700m spent in 2024, the GAC during the audit saw documentation for all transactions, except for transactions amounting to 2.8m.
This issue reflects one of the recurring challenges in audit - locating original documentation, especially given that audits are done months or years after the period being audited.
The document management system inherited by this administration leaves much to be
desired. All documents related to particular transactions are duly filed and taken to the MFDP archives for storage. Currently, the archives are overwhelmed due to limited space to store documents for multiple fiscal years.
The US 2.85m alluded to in the GAC audit relates to transactions executed in 2024 , whose documentations could not be readily found in the MFDP archives within the five-day period given to MFDP by the auditors who conducted the audit during a four-month period. Third-party verification involving line ministries involved could have helped confirm the existence of that documentation.
It is precisely in recognition of these facts that he MFDP is investing in an Electronic Document Management System (EDMS) to automate document storage. The EDMS would be fully operational in a few months. Meanwhile, until the EDMS comes into fully operational, the ministry have introduced manual scanning of all documents
supporting transactions beginning 2025.
Let it be noted that excess expenditure over appropriation does not necessarily imply wrongdoing. Situations often arise where urgent or unforeseen expenditures must be addressed, such as by-elections, and other emergencies.
The budget ex*****on process provides mechanisms for such contingencies:
The budget ex*****on process provides the mechanism for dealing with unplanned budget pressures one of which is the contingency reserve fund which is an unallocated poll of funds in the budget that can be use to give supplementary support to macs, to deal with urgent demands; furthermore, the budget transfer law provides for interagency transfer below the threshold of 2 per cent that doesnโt require legislative approval.
Where the GAC has identified the amount of 2.88 million in appropriation, with the exception of the Bureau of National Concessions, whose expenditure exceeded appropriation by US$373,000 due to intervention to stave off a brewing crisis, all other expenditures, including Public Works, remained below the 20% threshold.
The Bureau of National Concessions expenditure was duly reported to the Legislature in regular budget reports. In budget excution, it is sometimes difficult to secure prior legislative approval for urgent expenditures, particularly when the Legislature is on recess.
In conclusion, the 2024 GAC Report demonstrates a clear and significant improvement in the management of public finances under the current administration. Contrary to some public opinion, the report does not state that any funds are missing or misappropriated by MFDP.
Of the more than US$700 million executed in 2024, documentation was validated for all transactions except for US$2.8 million, which is an archiving challenge, not an indication of misappropriation.
The archiving challenge is currently being addressed through manual scanning and the soon to be introduced electronic document management system (EDMS).
The 2024 Audit Opinion is described as โQualifiedโ, in sharp contrast to the โAdverseโ opinion of 2023.
This transition reflects meaningful reforms, including improvements in budget discipline, documentation and internal controls, debt transparency, reconciliation, and financial reporting.
According to the report, in 2023 financial statements were materially misstated and unreliable due to pervasive control failures. In 2024, by contrast, the financial statements were fairly reported in all material respects, confirming that most transactions were properly documented.
