Filed in by Olando Testimony Zeongar – 0776819983/0880-361116/life2short4some@yahoo.com
Monrovia – A latest report on findings conducted by the General auditing Commission (GAC), into how some US$25 million intended to mop-up excess liquidity of the Liberian currency from the country’s fast-dwindling economy, has been released, with millions being unaccounted for by the George Weah-led government.
The fact-finding probe conducted by the GAC has found that the mop-up exercise was carried out with monetary transactions taking place in most instances where receipts were not issued.
Except for three (3) beneficiaries, including WEST AFRICA FISHERIES, NEXIUN PETROLUEM, and TOTAL Liberia Inc., all three entities with a total amount of US$2,507,380.00, no receipts were issued to the total number of beneficiaries contacted and interviewed during GAC’s field verification.
Unlike the recent US$25 million mop-up exercise, the GAC says inquiry of past procedures for mopping up of excess liquidity conducted by the Central Bank of Liberia (CBL) showed that receipts were produced during sale of United States dollars for Liberian dollars.
While GAC has unearthed that there are variances in how the US$25 million mop-up exercise was conducted, Finance and Development Planning Minister, Samuel D. Tweah and CBL Governor, Nathaniel Patray are trading blame, with the pair not being clear as to how actually the mop-up exercise was ordered to be executed.
Governor Patray indicated to the GAC through a documented review questionnaire that the Mop-Up Exercise was authorized by TEMT, while Finance Minister Tweah, who is also Chairman of TEMT, indicated that TEMT did not issue the CBL a written instruction for the Mop-Up Exercise; rather, the Mop-up Strategy was authorized by TEMT.
Howbeit, GAC established that minutes of meetings of the Finance Minister Tweah headed TEMT, show that TEMT mandated CBL to carry out the Mop-Up Exercise and also authorized the CBL to re-infuse the mopped-up funds into the economy through commercial banks, a move commercial banks in the country.
GAC says Samuel Tweah’s TEMT and the CBL did not provide evidence of the authorization to re-infuse the mopped up Liberian dollars into the economy as per the MOU.
On Monday, 16 July 2018, President Weah through an address to the nation announced the immediate infusion of US$25 Million by the CBL to mop up excess liquidity of Liberian Dollars from the economy that at the time had just begun plummeting, with the local currency taking a free fall and inflation soaring very high.
Upon the president’s directive, the CBL then got to work, signing a MoU with the Government of Liberia to use a portion of the International Foreign Exchange Reserve in the amount of US$25 million to intervene in the foreign exchange market to mitigate the volatility in the exchange rate.
The MoU stated that the Weah-led government should refund the US$25 million on or before December 31, 2018, and so in furtherance of such agreement, CBL authorities approved the establishment of a Special Escrow Account on July 19, 2018 to hold mopped up Liberian dollars in accordance with the CBL procedures.
However, according to GAC, there was no corresponding United States Dollars Account opened to hold the US$25 million to be drawn from the International Foreign Exchange Reserve Account for the purpose of the Mop-up Exercise.
The GAC did not note any transaction with narrative on the International Foreign Exchange Reserve Account held with the Federal Bank of New York that is related to the US$25 million mop-up exercise, but A letter dated April 22, 2019 from Executive Governor Patray revealed that the CBL Operational Fund was used for the US$25 million Mop-up Exercise, according to GAC.
But instead of US$25 million, GAC found that the funds used for the mop-up was just US$17 million; US$15M for direct mop-up and $2M auction to TOTAL Liberia, Inc. which were traced to the CBL Operational Vault Account.
‘Criteria for beneficiaries’
The CBL’s Foreign Exchange Sales Auction Rules and Regulation, revised September 2013, which identified commercial banks, licensed foreign exchange bureaus, other businesses and members of the public as participants eligible to participate in the bank’s auction, documents provided by the Department of Research, Policy and Planning at the CBL recommended for the FX auction to be conducted with businesses in these categories; Major Importers 60%, Small Liberian Businesses 25% and Foreign Exchange Bureaus 15% to apportion the US$25 Million earmarked for the Mop-up Exercise using the rate of L$ 155: US$ 1 which was approved by the Deputy Governor for Operations, Honorable Charles E. Sirleaf, the GAC report says.
But, “The Banking Department of the CBL disbursed the United States Dollars in the ratios of 51.8% to Fx bureaus and the remaining 48.2% to major importers and small businesses contrary to the approved recommendation,” GAC noted.
‘Legitimacy of beneficiaries’
In order to determine the legitimacy of the beneficiaries, the GAC requested documents related to the beneficiaries of the US$25Million Mop-Up Exercise from the CBL, the Ministry of Commerce and Industry and the Liberia Business Registry.
The GAC also confirmed prior to the field visit the name, location and contact of each beneficiary as per the list submitted to the country’s supreme auditing firm by the CBL.
“For the period July 17 to October 26, 2018, CBL recorded US$15 Million as the amount sold to 281 businesses and foreign exchange bureaus by direct mop-up while US$2,000,000.00 was recorded as the amount sold to TOTAL Liberia Inc., through a special auction,” said GAC.
However, the GAC noted several exceptions regarding the legitimacy of beneficiaries during its field visit.
Entities with exceptions discovered by the GAC during its field visit including 15 entities listed by the CBL but such entities indicated that they did not participate in the Mop-Up Exercise, yet, were recorded to have received US$491,769.00.
Another category of entities with exceptions are 27 that participated in the Mop-Up Exercise per CBL Records but not registered per Liberia Business Registry Records, yet they are recorded as receiving US$702,680.00.
Some 52 other entities recorded to have received US$1,092,292.00, participated in the Mop-Up Exercise per CBL Records but did not answer or reply to the GAC telephone calls and text messages.
Eight entities recorded to have received US$163,446.00, participated per CBL Records in the Mop-Up Exercise but were not in operation during the GAC’s field visit.
‘No necessary supporting documents’
The GAC probe into circumstances surrounding the US$25 million intended for the mop-up exercise, found that two transactions with the total amount of LR$ 1,064,000.00 purchased from a business (PECEE Business) and a bureau (The Empowerment FXB) were without the necessary supporting documents such as pay-in-slips (deposit slips), cash request returned slips to support the transactions.
Additionally, the GAC report notes that the money issued from the vault daily and disbursed to beneficiaries from the CBL’s United States Dollars operational vault was not posted to the bank’s accounting system in real time.
“For example money taken from the vault between the periods July 17 – 31, 2018 was not posted to the vault until August 1, 2018 in lump sum amounts,” the GAC report states, adding, that even the lump sum amounts posted were without supporting schedules.
All pre-numbered cash issue notes used to record cash supplied to Head Teller for onward disbursement to team leaders were not processed to the vault account, according to the GAC report, which added that all pre-numbered cash return notes for United States Dollars not sold for a given day were not processed to the vault.
‘Variances’
The GAC findings also detected discrepancies in the transaction of the mop-up exercise, noting that Teams one, two, three, four and five were deployed in the field and their payment records reconciled with the cash officer vault record. However, team six, which was stationed at the CBL and issued the highest portion of the mop-up exercise cash from CBL vault in the sum of US$11,271,993.00 or its equivalent of LRD23,521,038.00, payment records did not reconcile with the cash officer vault records.
Domah Conto, head of Team-6, cash returned equals US$2,838,028.00 or LRD8,399,328.00, while payment per vault record stands at US$8,433,905.00 or LRD15,121,710.00, but his payment record is US$8,312,194.00 or LRD15,000,000.00, accounting for a variance between vault record and team-six report, which amounts to a whooping US$121,711.00 or LRD121,710.00.
The GAC report catalogs several variances in the mop-up exercise as follows:
“There was a variance of US$ 1,466,783.00 between the summary list of beneficiaries and the detailed report per beneficiaries prepared and submitted by the CBL.”
“There was a variance of LR$ 540,619.00 between the daily report presented by the CBL and the pay in slips per beneficiary.”
“There was a variance of LR$360,000.00 between the cash returned per the daily report and the cash receipt/ ledger for the Cash Officer.”
“There was a variance of LR$ 959,928,000 between the total amount of Liberian Dollars mopped up per the Liberian Dollars Special Mop-Up Account at February 27, 2019 and the CBL Press Statement dated March 5, 2019.”
The mop-up exercise Liberian Dollars Special Escrow Account Statement had a balance of LR$959,928,000.00 as at February 27, 2019, but GAC reports that it could not perform a physical count of the mopped up fund as its auditors were told there was no mopped-up money left to be counted.
“As at February 4, 2019 the Mop-up Liberia Dollar Special Escrow Account showed a zero balance,” says the GAC.
