NIC in Fraud, Waste and Abuse

Rep. Fallah.jpg

The National Investment Commission (NIC) has been found liable for considerable financial irregularities and failure to follow the procurement process of the Public Procurement Concession Commission (PPCC) as well as to develop strategic and operational plans.

In the report of the Auditor General of the General Auditing Commission (GAC) on the National Investment Commission (NIC) for the Fiscal Years 1 July 2010 to 30 June 2013, the report said the failure of the NIC to provide financial records to support the expenditure made during the fiscal year has increased the risk of fraud, waste and abuse within the Commission.

The Deputy Auditor General for Audit at the GAC, Mr. Wesley Nakeen, made the presentation yesterday to the Joint Public Account Committee at the Joint Chamber of the Legislature during a one-day Public Hearing of the NIC, which brought to the fore 11 key witnesses.

The Legislature, through the PAC exercises oversight to review the audit report produced by the GAC and subsequently recommend to the Executive for prosecution.

The GAC stated that the management of NIC, comprising former Chairman, Mr. O. Natty B. Davis; Executive Director, Ms. Ciata A. Bishop; and Comptroller Nathaniel Kohn could not provide vouchers, general ledgers and financial statements to support expenditure amounting to US$686,985.47 (2010/2011) and US$719,796 (2011/2012).

“NIC maintained seven bank accounts with three banking institutions. There was no evidence that the Finance Department conducted monthly bank reconciliation on the accounts and failure to prepare bank reconciliation could lead to untimely detection of errors, omissions or undetected loss and could result to the misstatement of the financial statements,” the GAC said.

The GAC added: “The Management of NIC requested lease holders to deposit lease payments totaling US$129,550 directly to NIC MIP’s account at the Liberia Bank for Development & Investment (LBDI).”
It added: “There was no evidence that NIC sought approval from the Minister of Finance to deposit lease payment in the account at LBDI. Management did not provide for US$73,850 of lease payments.”

The GAC indicated that the NIC Management made overtime payment of US$4,304.37 without justification, and making overtime payments without evidence of work performed could increase the risk of unbudgeted expenditure, waste and abuse.

“The NIC Management did not follow the PPC process in the procurement of fuel amounting to US$68,454.93 for the period 2012/2013. Payments were made to vendors who were not registered dealers of fuel. There was no evidence that Crosswords, Bashir Business Center and Cactus Motor were engaged in the supply of fuel as registered dealers,” the GAC report stated. “Making purchases to vendors that are not in the line of service could lead to conflict of interest and deny the achievement of value for money.”

Meanwhile on the administrative procedures, the report said the NIC failed to produce strategic and operational plans that could lead to NIC misdirecting its resources and not prioritizing resources to areas that may best achieve the entity’s objectives.

“There was no evidence the NIC Management had put in place a disaster recovery plan to help recover transaction data and information to ensure business continuity. The failure to establish a disaster recovery plan may result in the complete loss of transaction data and information in the aftermath of disaster,” the report noted.

The report emphatically said there was no evidence NIC had put in place a risk assessment process for identifying, analyzing and evaluating organizational risks, and also, there was no evidence that the organization has a risk management policy to mitigate internal and external risks that could severely impact the achievement of the institution’s objectives.

“The absence of a risk assessment process could lead to NIC Management not being aware of potential risks that exist within its business operations,” the reported further said.

However, the current Chairman and Executive Director of the NIC, Etmonia David Tarpeh and George Wisner, in their individual opening statements said they were not in the know of what happened during 2010 – 2012 because they were not there, but however conveyed the documents to the appropriate persons who have been held liable in the reports.

The former Executive Director of the NIC and current Executive Director of the National Bureau of Concession, Madam Ciata Bishop said there wasn’t adequate time given her to respond to the GAC, arguing that she acknowledged receipt of the document last week Friday.

The chairman on the 16-man Joint Public Accounts Committee (PAC), Rep. Thomas Fallah deferred the public hearing to Monday, October 31, at same venue and time.


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