In Compliance Audit GAC hooks JFK … discovers Several Financial Irregularities

The General Auditing Commission(GAC) has concluded a compliance audit of the John F. Kennedy Medical Center. The compliance audit has been conducted in compliance with relevant laws and regulations consistent with the Auditor General’s mandate as provided for in Section 2.1.3 of the General Auditing Commission (GAC) Act of 2014 as well as in accordance with the Public Financial Management (PFM) Act and Regulations of 2009. 

Adverse Conclusion Based on the audit work performed, the GAC  found that, because of the significance of the matters noted in the Basis for Adverse Conclusion, the financial transactions and operations of the John F. Kennedy Medical Center are not in compliance with stated laws and regulations for the fiscal year ended June 30, 2018. 

‘‘Basis for Adverse Conclusion we identified multiple issues of significant materiality that affect the operations of the John F. Kennedy Medical Center. These issues can be categorized as follows:  Management did not provide supporting documents (Payment Vouchers, invoices, receipts, delivery notes, contracts, service completion certificate, etc.) for expenditures totaling L$10,209,835.90.  Management did not provide financial statements in line with the GoL reporting framework, International Public Sectors Accounting Standards (IPSAS Cash Basis of 2017).  Management did not provide detailed ledgers for expenditure amounting to US$8,298,340.00 as reported in the Budget Performance report. 
 A variance of US$661,240.02 for internally generated revenue was observed between the Bank Statements Accounts and the Budget Performance Report,’’ the GAC Audit Report asserted. 

 Management did not provide a list and values of grants and donations / contributions made to JFKMC by various individuals, institutions. Management made payments amounting to US$1,062,036.80 for contract awarded to ADI Contractors Incorporated without evidence of the following contract document: ➢ The advertisement of the Expression of Interest (EOI) for pre-qualification; ➢ The detailed scope of works and technical specification; ➢ The company’s quotation; ➢ The procurement Committee Minutes along with the Notice of award; ➢ The Contractor’s business registration, audited financial statements, company profile, and resume(s); ➢ The project document and its appendices; ➢ Certificate of Completion; to justify the regularity of the transactions. Auditor General’s Report On The Compliance Audit of the John F. Kennedy Medical Center (JFKMC) For the period July 1, 2017 to June 30, 2018 6 Promoting Accountability of Public Resources • Transactions amounting to L$140,000.00 and US$862.00 was paid as DSA to staff for foreign travels without evidence of retirement.

 There was no evidence of Management deducting and remitting into the GoL General Revenue Account the amount of L$227,765.72 as income tax withheld from Consultants and Contractors (pool staff).  Management did not prepare bank reconciliation statements for the following months (July to June 2017/2018). 

The following irregularities were associated with the JFKMC Assets Management System: ➢ There was no evidence of a fixed assets management policy. ➢ The fixed assets register did not contains all the relevant columns. ➢ The fixed assets register was not regularly updated. ➢ There was no evidence of periodic physical verification of assets by Management ➢ There was no evidence of movement of assets form. ➢ There was no history of disposal of assets. 

Management made salary payments amounting to L$39,708,610.68 for (153) individuals who were not on the personnel listing. • Management did not provide evidence of payment amounting to L$6,807,555.49 representing employees’ contributions to NASSCORP. • Management did not maintain essential personnel records such as letter of applications, employment letters, contracts, credentials, job description appointment, Personnel Action Notice (PAN), etc. • Ten (10) staff of JFKMC have met the requirements for retirement but were still employed with the institution.
Meanwhile, the GAC via its Auditor General has written a TRANSMITTAL LETTER to the SPEAKER OF THE HOUSE OF REPRESENTATIVES AND THE HONORABLE PRESIDENT PRO- TEMPORE OF THE HOUSE OF SENATE.
 ‘‘We have undertaken a compliance audit of the John F. Kennedy Medical Center (JFKMC) for the fiscal year July 1, 2017 to June 30, 2018. The audit was conducted in line with Section 2.1.3 of the General Auditing Commission (GAC) Act of 2014. Findings conveyed in this report were formally communicated to the authorities of the John F. Kennedy Medical Center (JFKMC) for their responses. The reportable issues were submitted through a Management Letter. Where responses were provided, they were evaluated and were incorporated in this report. Given the significance of the matters raised in this report, we urge the Honorable Speaker and Members of the House of Representatives and the Honorable Pro- Tempore and Members of the Liberia Senate to consider the implementation of the recommendations conveyed in this report with urgency,’’ AG Mr. P. Garswa Jackson Sr., added in his Transmittal Letter to the First Branch of Government.