-Says Mop-up exercise “didn’t address issues of monitoring, segregation of duties”
It is now known that the General Auditing Commission (GAC) did not do an audit of the US$25 million mop-up exercise to stabilized hike in the rate of exchange between the Liberian dollar and the US dollars last year.
In her report to President George Manneh Weah in May, the Auditor General, Yusador S. Gaye just dated May 2019, she said: “Because this engagement is not an audit or a review of financial statements, we did not provide any assurance be it reasonable or limited.”
Mrs. Gaye said the GAC exercise was based on “Engagement Letter of March 22, 2019 in which it was agreed to perform an Agreed-Upon Procedures (AUP) in relation to the US$ 25 Million Mop-up Exercise mandated by the Technical Economic Management Team (TEMT) and implemented by the Central Bank of Liberia (CBL). “
What the “agreed-upon procedures” are were not spelled out but the report said Finance Minister Samuel Tweah denied given any specific written confusion, but a minutes showed that the TEMT approved the conduct of the mop-up exercise.
The GAC’s report said a letter dated April 22, 2019 from Executive Governor Nathaniel R. Patray, III revealed that the CBL Operational Fund was used for the US$25Million Mop-up Exercise.
In 1.1.8 of the findings, “”the meetings minutes of TEMT show that TEMT mandated CBL to carry out the MopUp Exercise and also authorize the CBL to re-infuse the mopped-up funds into the economy.”
Regarding the procedures for disbursement of the US$25 million, the GAC findings show that there were flaws in the disbursement procedure. “
The two page Standard Operating Procedures developed to guide the conduct of the US$25 Million Mop-up Exercise did not address the issues of monitoring, segregation of duties, etc, according to the GAC findings.
They are spelled out in several counts of the GAC’s findings.
“2.4.6 There was a variance of US$ 1,466,783.00 between the summary list of beneficiaries and the detailed report per beneficiaries prepared and submitted by the CBL.
“2.4.7 Except for three (3) beneficiaries with a total amount of US$2,507,380.00 listed in the table below, no receipts were issued to the total number of beneficiaries contacted and interviewed during our field verification. Inquiry of past procedures for mopping up of excess liquidity conducted by CBL showed that instruments (receipts) were produced during sale of United States dollars for Liberian dollars.
The meetings minutes of TEMT show that TEMT mandated CBL to carry out the MopUp Exercise and also authorize the CBL to re-infuse the mopped-up funds into the economy.
Part II, count 4 (d) of the CBL Act requires that the CBL shall have functional independence, power and authority to conduct foreign exchange operations.
The report said that money issued from the vault daily and disbursed to beneficiaries from the bank’s United States Dollars operational vault was not posted to the bank’s accounting system in real time. For example money taken from the vault between the periods July 17 – 31, 2018 was not posted to the vault until August 1, 2018 in lump sum amounts.
According to section 1.4.1 of the GAC report, “The CBL authorities approved the establishment of a Special Escrow Account on July 19, 2018 to hold mopped up Liberian dollars in accordance with the CBL procedures.“
1.4.2 There was no corresponding United States Dollars Account opened to hold the US$25 Million to be drawn from the International Foreign Exchange Reserve Account for the purpose of the Mop-up Exercise.
The GAC did not note any transaction with narrative on the International Foreign Exchange Reserve Account held with the Federal Bank of New York that is related to the US$25Million Mop-up Exercise.
In section 1.5.2, the GAC says “A letter dated April 22, 2019 from Executive Governor Nathaniel R. Patray, III revealed that the CBL Operational Fund was used for the US$25Million Mop-up Exercise.
The report adds in section 1.5.3 that The funds used for the Mop-up, US$15M for direct mop-up and $2M auction to TOTAL Liberia, Inc. were traced to the CBL Operational Vault Account. “
The flawed procedure of the disbursement and the discrepancies in the mop-up exercise discovered by the GAC confirm similar things revealed in the Kroll and PIT reports few months ago.