Commerce Ministry’s Absence Proves Guilt in Japanese Rice Donation

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Members of the joint Public Accounts, Audit and Expenditure Committee of the Legislature have said that the continuous non-appearance of key witnesses from the Ministry of Commerce at Public Hearings on the 8,612.2722 metric tons of the 2008 Japan KR rice donation to Liberia will be considered proof of guilt.

On Wednesday, February 8, the joint PAC Chairman, Representative Thomas Fallah, said the committee has written the Commerce Ministry on four different occasions to appear alongside the General Auditing Commission (GAC) to answer various claims levied against it as stated in the audit report.

The Ministry of Commerce has repeatedly refused to honor the committee’s request with no justification, Rep. Fallah said.

According to Fallah, who is also the Representative for Montserrado County District #5, the Commerce Ministry was written on May 6, 2016; May 19, 2016; June 2, 2016 and February 1, 2017, but failed to appear for all the hearings.

The joint PAC of the Legislature examines reports produced by the Auditor General of the General Auditing Commission (GAC) and all anti-graft agencies on the value of money in compliance with Section 37.6 of the Public Financial Management (PFM) Act of 2009 and Rule 51 of the Interim Financial Management Rules

In the report, the then AG (John S. Morlu II) observed that the rice donated was not handled in line with the bilateral agreement and exchange of notes signed between the governments of Liberia and Japan, which caused the loss of US$831,624.09 from under-pricing, missing bags, and other irregular (unaccounted) transactions.

Members of the committee, who were present during Wednesday’s hearing, included Reps. Garrison Yealue and Clarence Massaquoi, Senator Dallas A.V. Gueh, among others. The committee termed the action by the Ministry of Commerce as a “deliberate attempt to undermine the Public Accounts Committee and above all to diminish the work of the General Auditing Commission in the eyes of the public as a meaningless institution.”

The irate lawmakers said there is a need to levy the necessary punitive action on the Commerce Ministry to serve as a deterrent to other ministries and agencies that may want to emulate its bad example.

The lawmakers said the Commerce Ministry’s actions suggest that the ministry is guilty of the charges levied against it as enshrined in the GAC audit report.

Following hours of debate on the matter, Representative Clarence Massaquoi made a motion for the committee to accept the GAC audit report on the Japanese grant.

They also unanimously agreed that punitive actions be taken against the Commerce Ministry and that such recommendations should be communicated to President Ellen Johnson Sirleaf.

It may be recalled that in 2008, the Government of Japan provided 8,612.2722 metric tons of KR rice as Japan Food Aid to Liberia. The donation was aimed at helping to stabilize the price of the country’s staple food on the Liberian market.

The GAC’s audit report was commissioned by former Auditor General John S. Morlu II on May 1, 2010.

There was an agreement through the exchange of notes that the minimum revenue to be generated from the sale of donated rice would be US$4,035,552.52 or its equivalent L$256,257,556 with exchange rate of L$3.60 to US$1.
Given the quantity of rice supplied by the Government of Japan, the minimum price was set at US$14.12 per bag of rice.

The Inter-Ministerial Committee, based on market conditions at the time, adjusted the price to US$11.50 without a written approval from the Government of Japan or an amendment to the bilateral agreement.

This resulted in an overall under-pricing variance of US$734,046.59 and contributed significantly to the overall revenue loss of US$831,624.09. This loss in revenue was due to the purported damaged bags of rice, according to the AG report.

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