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Wednesday, April 24, 2024

Liberia: Toothless GAC Can’t Handle Boakai’s CBL Audit Mandate

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Debate regarding the legality of President Joseph Boakai’s directive to the General Auditing Commission to conduct comprehensive audit of the Central Bank of Liberia has revealed how 10 years ago the auditing house was stripped off of its duties and powers were diluted.

The General Auditing Commission powers and responsibilities were significantly diminished after the 1972 law that established the entity was dismantled in 2014 during the Ellen Johnson Sirleaf administration. Boakai was Vice President when the law was altered.

Currently GAC’s authority to audit the Central Bank is restricted to the government consolidated accounts, which the Bank hosts. Requests from other authorities and people like the President to the GAC to perform audit must always be crosschecked with other laws to ensure the Auditor General has the mandate to proceed with audit engagements, the new law demands.

GAC enjoys sweeping powers under the 1972 Executive Law, auditing every public institution and individual that comes into contact with government’s finances and transactions. Even law making processes and court decisions were subject to review by the GAC in the scope of the repealed law.

John Morlu, the country’s first post war Auditor General massively utilized the strength of the law in the exercise of his duties to the extent of applying quasi-judicial power of subpoena. Morlu’s robust approach to the application of the law generated controversies and to the dislike of the then ruling establishment.

Reform proffered by international actors for the financial autonomy and security of  tenure for the GAC and its leadership turned into a complete scquashing of the 1972 law that has rendered the audit watchdog toothless in its present state.

Under the new law, the GAC roles in the inspection of public financial records and documents relating to state resources and economy are curtailed and restricted immensely. GAC, now cannot review legislative decisions. This means for instance, the GAC cannot audit or issue opinion on national budget, which is an Appropriation Act growing out of legislative processes.

While the GAC is allowed to audit public money, Section (5) of the Act narrows the definition of public money and further precludes the Auditor General from reviewing the records of state-own Enterprises and other remittances.

It reads: “money or financial assets in the custody or under the control of the State, including money that is held for the benefit of a person other than the State but does not include money held in trust or custody on behalf of non-governmental organizations or money received by State-Owned Enterprises .”

Section 5.5 Outside requests for audits or other work

  • Generally, requests from outside the General Auditing Commission to the Auditor General to carry out audits or other work shall not be accepted, except that in circumstances that members of the Legislature or the President should make a formal request to the Auditor General to carry out an audit or perform other work, the Auditor General shall consider such a formal request to assess whether it is within the legal mandate of the General Auditing Commission, and if it could be carried out using resources within the approved budget of the General Auditing Commission.

Central Bank reform in the aftermath of the 2018-19 currency crisis tightened the independence of the Bank to set it away from political interferences and manipulation in order to achieve monetary efficiency and prevent fraud and abused.

The Amendment and Restatement of the Act establishing the Central Bank of Liberia 1999,” approved on October 20, 2020 appears to render illegal the President’s push for an external audit of the Bank outside of its existing governance structures.

According to Section 60 of the Act, in the event of conflicting provisions between this Act and other laws, the provisions relating to the authority and functions of the Central Bank and matters of monetary policies shall prevail.

On auditing the act provides for a Chief Internal Auditor, External Auditor, and the Audit Committee with duties to perform periodic audits of the administration and operations of the Central Bank, provide reports and recommendations to the Board of Governors, and ensure proper risk management procedures and practices are implemented and monitored.


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