GAC Grades NRF Audit “Fair” -Describes Findings as “Unqualified Opinion”

In the wake of the controversy surrounding the observations made in the audit report conducted on the National Road Fund (NRF) by the General Auditing Commission (GAC), information gathered through the audit report has revealed that the GAC maintained that despite some of the observations made in the report, there was nothing material enough to implicate NRF in any financial malpractices, and has also commended the management of NRF for the cooperation and level of professionalism exhibited throughout the audit period.

In a letter dated March 11, 2022 from the Auditor General of Liberia, P. Garswa Jackson, and addressed to Mr. Boniface Sartu, Manager/CEO of the National Road Fund, under the heading: “Unqualified Opinion”, the audit indicated that with some of the observations made, nothing was found in it to implicate the agency in any financial malpractices.

“We have audited the accompanying financial statements of the National Road Fund (NRF) for the period July 1, 2018 to June 30 2019. These financial statements comprise the statement of Receipts and Payments, Statement of Comparison of budget and actual amounts, statement of financial position for the year then ended, and a summary of significant accounting Policies and other explanatory information.

“In our opinion, the accompanying financial statements of National Road Fund (NRF) present fairly in all material respects, the Statement of Receipts and Payments as at June 30, 2019, Statement of Comparison of Budget and Actual Amounts and a summary of other accounting policies and explanatory notes for the fiscal period then ended in accordance with International Public Sector Accounting Standards (IPSAS) Cash Basis of Accounting”, part of the letter said.

The Analyst gathered from the communication the basis of the opinion as was stated by the letter, which said: “We conducted our audit in accordance with International Standards of Supreme Audit Institutions (ISSAIs). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report”.

The letter described the entity as “independent of the National Road Fund (NRF) in accordance with the Code of Ethics for Supreme Audit Institutions together with the ethical requirements that are relevant to our audit of the financial statements and we have fulfilled our other ethical responsibilities in accordance with these requirements.

“We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion”, the letter concluded.

Meanwhile appearing on the live Spoon TV Talk Show on Wednesday evening, May 18, 2022, the General Manager/Chief Executive Officer of the National Road Fund, Mr. Boniface D. Sartu and the Comptroller General of Liberia, Mr. Janga A. Kowo, provided more clarity on the observations in the audit report and debunked the claims that there was a trail of missing money that should have been remitted to the account of the National Road Fund from the Consolidated Account of the government as provided by the Act that created the NRF in 2016.

“So to put you on track, we normally collect fuel levies of .25 cent from petrol purchased which are collected by the Liberia Revenue Authority and remitted to the Consolidated Account of the government and at the end the NRF receives the money in her account for the use of its intended purpose. For the two fiscal years 2018/19 and 2019/20, the amount of $53 m was collected and the government remitted $28m in the 2018/19 fiscal year, remaining $24 million from where $7million was remitted to NRF in the 2019/20 fiscal year and $18 remained in the government consolidated account”, Sartu said while giving the breakdown of how the money was expended.

Providing more clarity on why the $24,866,637.54 was not remitted to the NRF, Sartu who had earlier stated that the NRF became operational in May 2018 after it was created in 2016, said that the government had made a request to use the money due to the many challenges it was experiencing at the time that borders on meeting its obligations to pressing national needs ranging to inability of the government to pay civil servants’ salaries and the challenges posed by the advent of the COVID-19.

Sartu’s statement was corroborated by Comptroller General Kowo who asserted that the said money was legally transferred by the national government to other areas to address key sectors of the economy that needed funds more than the construction, maintenance and rehabilitation of roads such as health care, education, payment of salaries of civil servants, etc.

“It was in the wisdom of the President and the Minister of Finance to approach the national legislature given the many challenges the country was facing at the time to redirect certain resources to areas that are pressing. So when the decisions are taken by the national legislature who are the representatives of the people, it becomes law and we are under obligation to comply. The international partners were consulted and briefed though we consult the development partners all the time”, Kowo said.

When asked what they made of the observations of the GAC audit report that could point to acts of corruption, both of them stoutly objected to the insinuation and maintained that the report should be read and understood from the context it was written and not for anyone to input something out of what was said.

“We are all witnesses to the audit reports of the GAC. GAC is a professional agency and we are also happy that the GAC pointed out the various fee levies, certain quantum of resources were collected, certain funds were utilized and in the wisdom of the GAC all documents were produced and the audit point to clean outcome”, Kowo said.

Kowo also clarified that the American Ambassador to Liberia did not ask for the audit report from them but was concerned about the performance of the NRF and its activities concerning the construction, maintenance, and rehabilitation roads in the country. He said that while on a field trip to assess the status of roads in the country with development partners, both the American and EU ambassadors raised the issue of the performance and from the field trip they were convinced about what the NRF was doing.

When a question was reintroduced about what they made of the audit report with all the observations that some money and or payments were not approved by the NRF management, the NRF boss, Sartu said there is nothing in the report that suggested corruption practices as in normal audit reports there are always issues of observations from one thing to another but what matter is whether these observations are enough reasons to point to corruption or not.

He maintained that there are internal mechanism put in place at NRF with a strict monitoring process from the development partners and that in fact there was a resolution taken by the ministerial committee chairing the NRF board that verified that all payments carried out at the entity and the GAC report was to further vindicate NRF that nothing was done against any ethical practices.

“In the wisdom of the GAC, if they have seen anything material enough, they would have raised the issues and indicted NRF, because in every audit reports, there will be issues like some money short, not properly applied, not reported, etc, but at the end of the day you look at the context of the report if there is anything material enough to warrant the outcome of being termed corrupt. I think the journalist who reported the story did not understand what is meant by “unqualified opinion”, which implies that there was nothing in the report to suggest any indictment or being an adverse report”, Sartu noted.

Going further to provided the foundational problem associated with what he called “the receivable issues”, Sartu who has been in the saddle of affairs at NRF since it was created in 2016 through a competitive process, said in the past petroleum importers collected the levies on behalf of the government and remit the same to government consolidated account for onward remittance to the NRF account but at some time it created some bottlenecks as the collection and remittance of said funds became cumbersome.

“That was one of the many challenges we encountered and thanks to President Weah, the legal issues surrounding the collection of the levies were resolved and payment of the levies is now being handled at the level of the Liberia Revenue Authority (LRA)”, Sartu said.

He said it is important to note that investment in road construction, maintenance and rehabilitation is a huge capital intensive venture and from what is expected to be done in Liberia, the funds to the disposal of the agency are not enough but through innovation, there has been tremendous achievements during the period under review, naming funds some community roads constructed in Monrovia that link communities in Paynesville, Gardnersville, Mount Barclay as well as major roads across the country whose funding are being provided or to be provided from the NRF.

For his part in his parting note Comptroller Kowo said that the government attaches serious importance to the construction, maintenance, rehabilitation roads in the country and that as of now the challenges faced by the government from the initial stage of the administration are now over. He said currently, the government has been pre-remitting money to the NRF even before any collection has been done.

“Yes there were initial difficulties that made the government to transfer some money meant for NRF to other pressing needs , for example, during the COVID, some of the SOEs, RIA, LWC, etc did not have money to pay salaries of employees and we have to make the intervention with funds. But now I can tell you that we are even pre-remitting money to NRF before the levies are collected by LRA. The government has made available US$30 M in the national budget for roads and in few days from now, the government is going to pay $10M to the contractors handling the RIA road just as the government has committed resources to the Lofa Road, the Sanniquellie –Loguatuo, Ganta-Saclepia, Saclepia-Tappita road, etc”, he concluded.

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