Recently this outlet independently published a detail investigation surrounding a General Auditing Commission (GAC) report regarding the financial report of the National Road Fund (NRF), where it was revealed that several petroleum companies had defaulted in the payment of their financial obligation with the Liberian Government for the fiscal year (2019/2020).
In part one of this detail investigation by the GNN it was also revealed that the former Auditor General of Liberia, Madam Yusador S. Gaye (Late), performance audit report released in February, 2021on Road Maintenance and Rehabilitation in Liberia captured nine oil and gas companies were indebted to the National Road Fund (NRF) in the amount of US$22,212.538.00 for petroleum tax levied for road maintenance and rehabilitation, as of June 30, 2020.
The GAC report further named nine petroleum companies include Conex Petroleum Service, (US$8,126,797.00), Srimex Oil and Gas Company (US$4,763, 129.00), Kailondo Petroleum( 167,271.00), Petro Trade (US$1,087,347.00) and Aminata & Sons (US$2,804, 030.00). while others include MOTC (US$1,736,894), Nexium Petroleum (US$488,260) West Oil Investment (US$2,858, 565) and NP Liberia (US$190, 245.00), according to the GAC, the total amount of US$22.212,538 is been owned by the companies mentioned above with the Liberian Government.
In part two of this investigation, GNN briefly detailed a communication from the Auditor General of the General Auditing Commission (GAC), Mr. P Garswa Jackson Sr., dated March 11, 2022 addressed to the Head of the National Road Fund, Boniface D. Satu, under the heading: “Auditor General’s Report On The Financial Statement Audit Of The National Road Fund (NRF) For the Period July 1, 2019 To June 30, 2020.”
Auditor General’s Report on the audit of the
National Road Fund (NRF) Financial Statement for the Fiscal period ended June 30, 2020
AUDITOR GENERAL’S REPORT
March 11, 2022
Mr. Boniface D. Satu
National Road Fund (NRF)
Dear Mr. Satu:
AUDITOR GENERAL’S REPORT ON THE FINANCIAL STATEMENT AUDIT OF THE NATIONAL ROAD FUND (NRF) FOR THE PERIOD JULY 1, 2019 TO JUNE 30 2020.
“We have audited the accompanying financial statements of the National Road Fund (NRF) for the period July 1, 2019 to June 30 2020. 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, 2020, 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.
Basis for Opinion
We conducted our audit in accordance with the 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.
We are 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.
Emphasis of Matter Receivables Due from Petroleum Importers
We draw attention to Table #3 of the financial statements in which Management reported the total of US$ 22,212,538.00 as receivables due from petroleum importers for fuel levy charges. A net variance of (US$6,164,455.01) exists between the receivables reported in the financial statements and the amount confirmed by petroleum importers that responded to our inquiry.
Due to the importers’ failure to fully confirm the accounts receivables in Table 3 of the financial statements, we were unable to satisfy ourselves as to the existence, completeness, and collectability of the account receivables.
Furthermore, for the period under audit, the NRF Management did not disclose in the financial statements, commitments to contractors totaling US$6,100,508.38. The Outstanding commitment is an obligation against the total cash balance of US12,936,639.00 brought forward as at 30th June 2020. There is a restriction of US$6,100,508.38 brought forward commitment on the closing cash balance reported in the financial statements. Our opinion is not qualified in respect of the above matters.
Management is responsible for the preparation and fair presentation of the financial statements in accordance with IPSAS Cash Basis, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, Management is responsible for assessing its ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to cease operations, or has no realistic alternative but to do so. The NRF Management is responsible for overseeing the Project’s financial reporting process.
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISSAIs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements”, the communication sent to the NRF boss and signed by the Auditor General of the Republic of Liberia, P. Garswa Jackson noted
For his part, the NRF boss financial statement dated August 31, 2020 said, “The Financial Statements as set out on pages 14 to 19 have been prepared in accordance with the provisions of the Public Financial Management Act of 2009 and in compliance with the Cash Basis International Public Sector Accounting Standards (Cash IPSAS), adopted by the Government of Liberia.
In accordance with the provisions of the Public Financial Management (PFM) Act of 2009, I am responsible for the control of and accounting for public funds received, held, and expended for and on behalf of the National Road Fund of Liberia.
Under the provisions of the same Act, I am required to prepare unaudited Final Account of the National Road Fund of Liberia to be submitted to the Minister of Finance and Development Planning, two months after the end of the financial year to which it relates.
However, I have delegated the preparation of the unaudited Final Account to the Finance Officer for my transmittal to the Minister, as provided in the attendant Regulations of the Public Financial Management Act of 2009. Accordingly, I am pleased to submit the required year end Public Account of the National Road Fund of Liberia Name in compliance with the PFM Act and its attendant Regulations. I have provided, and will continue to provide, all the information and explanations as may be required in connection with the financial statements presented therein.
In preparing these Financial Statements, the most appropriate accounting policies have been consistently applied and supported by reasonable and prudent judgment and estimates. To the best of my knowledge and belief, these Financial Statements agree with the books of accounts, which have been properly kept.
I accept responsibility for the integrity of these financial statements, the financial information they contain and their compliance with the provisions of the Public Financial Management (PFM) Act of 2009”, Mr. Satu in his communication to the GAC noted.
Part three of this report, the success story of the National Road Fund (NRF), we will also look at the Act that created it, and the responsibilities of those in charge of its operation since its enactment in 2016.