Without Authorization How the MFDP exceeded Legislative Appropriation by US$40.8M … GAC Audit Report unravels

Two Audit reports of the Consolidated Fund Financial Statements of the Government of Liberia(GoL) for the fiscal year July 1, 2020 to June 30, 2021 and the  Special  Fiscal year July 1, 2021 to December 31, 2021 tabled to the National Legislature by the General Auditing Commission (GAC)  show that the Ministry of Finance and Development Planning exceeded the authorized appropriation by the National Legislature     for 10 ministries and agencies  by US$ 21,787,430 for fiscal year July 1, 2020 to June 30, 2021 and 53 ministries and agencies by  US$ 19,015,320 for the Special Fiscal year July 1, 2021 to December 31, 2021. 

The Special Fiscal  year was a result of the change of  GoL fiscal year  from July to June to January to December.

According to the reports, the 10 ministries and agencies for the fiscal year July 1, 2020 to June 30, 2021 that exceeded their appropriation without Legislative  authorization include the Ministry of State for Presidential Affairs  US$4,800,370, Ministry of Finance and Development Planning US8,882,790, Ministry of Public Works, US$2,183,460, among others.
The 53 ministry and agencies that exceeded authorized appropriation for during the Special Budget Year July 1 to December 31, 2021 include the National Security Agency US$3,040,720, Ministry of Commerce and Industry US$3,384,300, Ministry of State for Presidential Affairs US$1,367,880, among others.

The GAC observed no evidence of disclosure of the Statement of Excess Expenditure  as required neither did it  obtain evidence of legislative approval in contravention of the Public Financial Management Act of Liberia.

According to the PFM Act of 2009 as amended and restated  2019 Section 24(1-2) ,  where, in exceptional circumstances, at the close of account for any fiscal year it is found that moneys have been expended on any expenditure in excess of the amount appropriated for it by an Appropriation Act or a Supplementary Appropriation Act or for a purpose for which no moneys have been appropriated or not appropriated, as the case may be, shall be included in a Statement of Expenditure in Excess”.
 
 The Minister (Minister of Finance and Development Planning)  shall lay every statement of expenditure in excess before the Legislature, which shall refer it to the Public Accounts Committee of the Legislature, and the Minister shall at the same time send a copy of the statement to the President.

According to the reports, there are several risks  associated with exceeding authorized allocation without legislative approval:  Facilitating unauthorized excess expenditure to Government of Liberia entities may lead to under disbursement of approved budgetary allotments to other Government entities and  unauthorized excess disbursement over approved budgetary allotment may lead to misappropriation and misapplication of public funds.

The GAC has, therefore, recommended, among others, that  Management provides substantive justification for facilitating unapproved excess expenditure to some Government of Liberia ministries and agencies,  Going forward, Management should ensure that all excess expenditures exceeding authorized limits are approved by the National Legislature and  Management should ensure that a Statement of Excess Expenditure is prepared and submitted to the National Legislature in a timely manner consistent with section 24(1-2) of the PFM Act of 2009 as amended and restated 2019.

In response to the GAC findings, the Management of Ministry of Finance and Development Planning asserted that all changes in initial approved original amounts and the final amounts in the budgets were implemented in accordance with the mentioned PFM Regulations and all supporting authorizations are maintained for administrative and audit purposes.

However, the Auditor General indicated in his position to MFDP Management Response that Management provided no evidence that it prepared and presented a copy of a Statement of Excess Expenditure to the National Legislature and a copy of the Office of the President consistent with Section 24(1-2) of the PFM Act of 2009 as amended and restated 2019. Therefore, the GAC maintains its findings and recommendations.