Liberia: GAC Audit Uncovers Multiple Financial Anomalies at National Disaster Management Agency - FrontPageAfrica
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Capitol Hill, Monrovia – The Legislative Public Accounts Committee has conducted a public hearing into the findings of the General Auditing Commission (GAC) audit of the National Disaster Management Agency (NDMA) for the fiscal period from June 30, 2020 to July 30, 2021. The audit report accuses the agency of several financial irregularities.
The GAC audit reveals numerous issues, including the lack of comparative financial information, misstated opening and closing balances, undisclosed bank accounts, irregularities in bank balance reconciliation, unreconciled salary expenditures, transactions recorded in bank statements but missing from financial records, undisclosed donor assets, non-remittance of Goods and Services Tax (GST), procurement irregularities, and transactions without adequate documentation.
Paragraph 1.4.16 of the Revised Cash Basis IPSAS (2017) mandates that, unless otherwise permitted or required by the standard, comparative information must be disclosed for all numerical data in the financial statements. This applies to all entities, except when the standard is applied for the first time. It also requires that comparative information be included in narrative and descriptive sections when relevant to understanding the current period’s financial statements.
The GAC report highlights that the NDMA management did not disclose prior year information in the Statement of Cash Receipts and Payments, the Statement of Comparison of Actual Amounts and Budget, or the notes to the financial statements, as required by the standards for comparability purposes.
Furthermore, under part 1.3.15 of the Revised Cash Basis IPSAS (2017), all entities must present a Statement of Cash Receipts and Payments, disclosing the beginning and closing cash balances, total cash receipts, total cash payments, and major sub-classifications. This requirement ensures that the financial statements provide comprehensive information about the entity’s cash balances and any changes during the reporting period in an accessible and understandable format.
The audit also found that an amount of US$67.89, recorded as the closing cash balance for the Fiscal Year 2018/2019, was not carried forward as the opening balance for the next Fiscal Year (2019/2020). As a result, no opening cash balance was recorded for the fiscal year 2019/2020.
Additionally, the Auditor General observed that the closing cash balance for the fiscal year ending June 30, 2020, was misstated. The financial statements reported a closing balance of US$1,245.98, but the actual closing cash balance should have been US$5,003.09, resulting in a discrepancy of US$3,757.11.
The audit report further noted that the NDMA failed to disclose an EcoBank account (account number 6100063162) with a balance of US$690.76 as of June 30, 2020. Moreover, there was no evidence that total bank credits amounting to US$3,225 and total bank debits of US$2,534 from the undisclosed account were recorded.
The National Disaster Management Agency (NDMA) was established to implement the National Disaster Management Policy and coordinate the national disaster management system, involving both state and non-state actors at national, county, district, and chiefdom levels. The agency’s primary focus is addressing disaster-related issues to reduce vulnerabilities to both natural and human-induced hazards.
The policy outlines several key objectives, including enhancing national and local capacity to minimize disaster risks, preventing and mitigating the adverse impacts of hazards within the framework of sustainable development, and establishing a functional legal and institutional framework for effective governance.
It also emphasizes capacity building, clear role allocations, and integrating disaster risk reduction into development, recovery, and humanitarian response plans. Ultimately, the policy aims to contribute to national risk management efforts for sustainable development.
Despite its crucial role in disaster response, the NDMA has faced chronic underfunding.
The agency has often been overwhelmed when responding to disasters such as floods and fires due to a lack of resources. Over the years, NDMA authorities have called for increased budgetary and donor support to enhance its response capabilities.
However, the financial irregularities revealed by the General Auditing Commission (GAC) could pose a significant obstacle to securing additional funding. The responsibility now lies with the current management to implement the GAC’s recommendations and take the necessary steps to improve financial management. Doing so will be critical to ensuring the agency can continue to fulfill its mission and strengthen its ability to respond to future disasters.