Liberia: GAC Begins Audit of GoL's Domestic Debts

With funding from the African Development Bank and its development partners, the General Auditing Commission (GAC) has announced the commencement of an independent audit of all Government domestic debts in the country.

The objective of the audit, according to GAC Auditor General, P. Garswa Jackson, Sr., is intended to assess the adequacy and effectiveness of controls over the GoL domestic debt portfolio and debt management strategy(ies) and evaluate documentation supporting domestic debt claims and payments to vendors.  

He said the audit will allow the government to conclude on all domestic debts submitted between 1980 to 2021, which will serve as a basis for the development of the comprehensive database (Commonwealth Meridian System) for the domestic debts management system at the Debts Management Unit at the Ministry Of Finance and Development Planning (DMU/MFDP).  

Speaking at a press conference in Monrovia over the weekend, the Auditor General revealed that the Government through the Ministry of Finance in 2008 commissioned a study to verify the authenticity of claims submitted and reached a conclusive recommendation whether to accept or reject those claims. 

He said KPMG (Ghana), which is an auditing firm, was contracted to conduct a comprehensive audit on all vendor claims and other domestic debts that were accumulated during the period between January 1982 and October 2003 and arrears incurred on these debts from October 2003 to January 2006.  

According to him, KPMG (Ghana) at the end of its exercise, classified the claims it vetted as either “Valid, Invalid or Contestable.” Some of the valid claims have been settled. However, currently, there is no comprehensive database to indicate whether or not a claim has been fully settled.  

He said as of August 27, 2020, the MFDP through the Debt Management Unit (DMU) received vendor claims and arrears in the amount of one hundred twenty-four million, fourteen thousand United States dollars (US$124,014,000.00) and eleven million forty-nine thousand (L$11,049,000.00).

Auditor Jackson said these recorded claims as well as those outstanding in the KPMG audit report need to be further validated and negotiated to devise a realistic settlement plan. 

He said to provide independent evidence to the GoL on the validity of claims, and to finalize the validation of GoL’s domestic debts and arrears, the MFDP has decided on another round of verification of the authenticity of claims submitted between 1980 and 2021 to obtain a recommendation on the validity of all claims within this period. 

Mr. Jackson noted that for the Government to conclude the validity of claims, domestic debts, and arrears, the Government through the MFDP, in collaboration with the African Development Bank, has engaged the services of the General Auditing Commission (GAC) to verify the authenticity of claims submitted between 1980 and 2021.

Auditor Jackson said the GAC is also expected to provide recommendations on the validity of each claim, domestic debt, and arrears which will enable the proper development of a comprehensive database (Commonwealth Meridian System) of the domestic debt management system at the Debt Management Unit.    

The GAC boss indicated that after the completion of the audit, he will submit the report to the National Legislature with a copy to the President and other stakeholders in keeping with our mandate as provided under Section 4.2 of the GAC Act of 2014.  

Mr. Jackson said the ultimate deliverables of the domestic debt audit are to establish a final draft “validated” database of domestic debts and to recommend a set of standardized policies and qualification criteria for subsequent claims qualifying as domestic debts. 

According to him, the achievements of these goals will aid the Government plan, budget for, and liquidating valid debts while it mitigates the accumulation and disbursement of invalid claims. 

He noted that the GAC recognizes the significance of the GoL Domestic Debt Audit, as prudent debt management is cardinal for economic growth and domestic debt constitutes about 11% of the national budget. 

He said, "We also appreciate the enormity of resources committed to this exercise and the importance and urgency the African Development Bank and the Government of Liberia have attached to this project. We are committed to playing our part to ensure that we provide reasonable assurance over the validity and authenticity of claims submitted between 1980 and 2021, as well as providing prudent recommendations for debt management going forward." 

He further disclosed that the audit commenced on October 27, 2021, and is expected to be concluded on April 29, 2022, with the issuance of the Auditor General’s report. Potential claims can be submitted from Monday, December 13, 2021, to Saturday, February 26, 2022. Documentation of claims submitted at the Debt Management Unit which is a part of the current database does not need to resubmit unless otherwise stated.