Monrovia — Acclaimed civil society organization Integrity Watch-Liberia has raised an alarm over the allocation of US$156.7 million in the draft National Budget for Fiscal Year 2023 to several government ministries and institutions without the provision of expenditure reports to the National Legislature in keeping with the Public Financial Management (PFM) Law of Liberia.
It can be recalled that on December 5, President George Manneh Weah, through the Deputy Finance Minister for Budget and Development Planning, Tanneh Geraldine Brunson, submitted to the House of Representatives the US$777.94 million draft National Budget for Fiscal Year 2023 to the National Legislature
The submission of the budget was delayed. It violated the PFM Law which calls for its submission by the Executive, at least two months before its passage.
But addressing a news conference in Mango Town, Virginia Township outside Monrovia on Tuesday, December 20, the Executive Director of Integrity Watch-Liberia Harold Aidoo disclosed that after conducting an extensive analysis of six sectors of the draft National Budget for FY 2023, his group has established that some ministries and government institutions were not in full compliance with the PFM Law.
He named some of those ministries and institutions that did not provide expenditure reports for last FY 2022 and were allocated huge sum of monies in the current draft National Budget as: the Ministry of Health (US$57.1M), Phebe Hospital and School of Nursing Education (US$1.7M), Liberia Board for Nursing and Midwifery (US$0.179), Liberia Pharmacy Board (US$0.168), National AIDS Commission (US$0.571), Jackson Fiah Doe Memorial Hospital (US$2.5M) and the National Public Health Institute of Liberia (US$2.9M).
Others are: The Ministry of Education (US$49.2M), University of Liberia (US$18.8M), William V. S. Tubman University (US$6.2M), Grand Bassa University (US$1M), Independent National Human Rights Commission (US$1.2M), and the Liberia Agency for Community Empowerment (US$5.5M).
The rest are: General Auditing Commission (US$5.7M), Financial Intelligence Unit (US$1.4M) and the Ministry of Agriculture (US$2.6M).
Mr. Aidoo disclosed that despite the failures of heads of these ministries, agencies and institutions to provide their expenditure reports to the National Legislature prior to the allocations of funding to them for FY 2023, the executive branch went ahead and allocated the amount of US$156.7M to them in the current budget.
According to him, the amount appropriated to these entities in the draft financial envelope for FY 2023, represents about 45.2% of the entire budgetary allocation.
He wondered why anti-graft institutions like the FIU and the GAC would renege on providing performance and expenditure reports of their previous allocations despite being “poorly funded” by the government, noting that, “when spending entities receive monies, they must account for the monies they received.”
“The Policy Notes of six budget sectors, representing all 62 institutions under the Health, Education, Security and Rule of Law, Social Development Services, Transparency and Accountability, and Agriculture sectors have been reviewed and analyzed. Our findings reveal that 16 out of the 62 institutions comprising the six (6) sectors did not provide reports of achievements under the FY2022 and planned objectives for FY2023. Total aggregate budget estimates of all those institutions without Achievements for FY2022 and Planned Objectives for FY2023 projected at US$156.7 million, representing 45.2% of the combined total of the six sectors budget of US$346.8 million.”
Undermining accountability and transparency
He maintained that placing US$156.7 million at the disposal of these institutions without past performance reports and planned objectives undermines accountability and transparency.
Mr. Aidoo added that the move is also in clear violation of Regulation D.4 (4) of the Amendment and Restatement of the PFM Law of 2009.
Regulation D.4 (4) of the Amendment and Restatement of the PFM Law of 2009 states that: “Spending agencies must submit their budget requests within the parameters, timeframe and format set forth in the budget call circula.”
He added that considering the concept of “value for money and affordability” as one of the principles of the PFM Law, these allocations made to non-complaint ministries and institutions pose huge “risks to prudent fiscal management and undermine government’s efforts in fiscal transparency and accountability.”
Mr. Aidoo said though his group does not intend to speculate on whether or not these non-compliant ministries and governmental institutions would use their FY 2023 allocations to run and sponsor campaign activities for the ruling party in 2023 elections, it strongly believes that the appropriation millions of dollars to them ahead of an election year is risky and unacceptable.
“What is evident is that these entities failed to report or account for the monies that they were given. This is a serious accountability issue and it constitutes a serious risk in financial management and fiscal transparency because, you cannot have entities consuming a whooping or huge chunk of the budget and not reporting for it.”
He indicated that though all of these non-complaint ministries and governmental institutions have their own internal financial systems that by law, should report on the expenditure of tax payers and donors’ monies allocated to them in the budget, they all have failed to do so up to present.
Mr. Aidoo stated that no international partner or donor would be willing to give additional funding to these entities if they failed to provide reports on the funds previously provided.
He added that government, especially the executive branch should not continue to allocate resources to these non-compliant ministries and institutions as doing so will be “unjust” to the Liberian people.
Failing to exercise oversight
The constitutional responsibilities of members of the National Legislature are oversight, representation and lawmaking.
But Mr. Aidoo observed that the appropriation of US$156.7 Million to these ministries and governmental institutions by the executive is due to the failure of members of the National Legislature to adequately exercise their oversight responsibility.
“The Legislature as a whole has been very weak in her oversight (responsibility). If the Legislature was robust, the non-compliance of many of these ministries and agencies would not have happened. Now we are taking about giving them additional US$156.7M which is 42% of the budget. This is unacceptable for us to give ministries and agencies monies and they do not account for how these funds were utilized. We hope that this will be a clarion call for the oversight committees at the Legislature to act.”
Mr. Aidoo pledged that his institution will engage the National Legislature on “these “grave accountability issues” which undermine fiscal transparency and accountability by providing the technical expertise to enhance their works.
He called on lawmakers to raise these germane issues when heads of the non-compliant ministries and governmental institutions appear to defend their allocations in the draft national budget for FY 2023 during public hearings.
“These entities fall under the Executive and the Legislature must demand accountability from them for the usage of the Liberian people monies and we should just give them whatever for their Christmas’ monies and they do not account for it.”
Mr. Aidoo said members of the National Legislature will bear a greater responsibility if it fails to ensure that reports are submitted by heads of these non-compliant ministries and governmental institutions prior to the passage of the draft National Budget for FY 2023 that is currently before them.
He pointed out that in the future, the current situation will continue to persist, by making the Executive branch feels unaccounted to the citizens while utilizing tax payers’ monies if lawmakers renege on executing their oversight responsibility.
“We cannot continue to have this kind of oversight where the executive freedom and can do whatever they want in the absence of proper accountability of the Liberian people’s monies.”
Mr. Aidoo said lawmakers, including the media; civil society organizations should be more robust in exercising their constitutional and respective functions and hold heads of these non-complaint ministries and institutions accountable, especially at the time the country is moving towards the crucial 2023 elections.
Actions to implement budget
Speaking further, Mr. Aidoo pointed out that the CSO group, however, observed that specific options have been selected by the government for the implementation of the FY2023 budget.
He named some of those options under revenue generation as the amendment to the Revenue Code of 2011, which primarily target migrating from Goods and Services Tax (GST) to Value Addition Tax (VAT); and the reviewing the Tax Exemptions List with the objective to suspend beneficiaries of Executive Orders and Investment Incentives which is expected to yield approximately US$15 million.
“We take note of the joint implementation arrangements and look forward to the Ministry of Finance and Development Planning, Liberia Revenue Authority and the Bureau of State Owned-Enterprises.”
Under expenditure, he observed that the government intend to provide a newfunding of additional US$3 million for drugs, vaccines and medical supplies, new funding of US$2.5 million for elimination of registration fees and all forms of financial burdens imposed on parents in public schools, aimed at retaining enrolment rates, new policy to disaggregate the budget of the Ministry of Education to reflect public spending by county and de-concentrating financial management from central government to make more functional and operational County School Boards under the jurisdiction of the County Education Officer.
He reported that the government also plans to maintain US$1 million for the continuation of the rehabilitation programmes for vulnerable youth, US$0.9 million to support implementation of the SGBV Roadmap and GRPB implementation to address gender-based violence and gender economic empowerment, and increment in budgetary allocations for the General Auditing Commission (GAC) and Liberia Anti-Corruption Commission (LACC) while at the same keeping the Financial Intelligence Unit (FIU) and Internal Audit Agency (IAA) broadly stable.
Recommendations
Meanwhile, Integrity Watch-Liberia has advanced several recommendations to the Standing Committees of both Houses of the National Legislature and the Executive branch of government to prevent government ministries, agencies and other institutions from grossly violating the PFM Law of the country and ensuring the full implementation of the National Budget.
In line with their constitutional mandates, the group called on members of the National Legislature to compel all non-compliance institutions in respect of the omission of budget policy notes in the Draft National Budget FY2023 to provide same ahead of, or during their respective budget hearings and mandate the Ministry of Finance and Development Planning to incorporate their budget policy notes in the approved national budget which will be published.
It called for legislators to enshrine legislative provisions (prohibitions and sanctions) in the FY2023 Budget Law relating to the omission of complete budget policy notes for each spending entity of the government during the preparation and submission of subsequent Draft National Budgets to the Legislature, beginning FY2024.
Sanctions
The group wants lawmakers prescribe sanctions for non-compliance affecting all spending entities, including the Ministry of Finance and Development Planning for any failure of enforcement of the law.
Integrity Watch-Liberia Challenged the Executive branch, particularly the Ministry of Finance and Development Planning to make sure topromulgate supplementary regulations consistent with legislative enactments prohibiting non-compliance with the Budget Call Circular and indicating specific sanctions for non-compliant institutions regarding budgeting and budget planning in keeping with Section 10 of the Amendment and Restatement of the PFM Act of 2009,
It also stressed the need for the ministry to give a comprehensive analysis of budget documents for implementation of recommendations from citizens through Pre-Budget Consultations under Liberia’s Public Participation Mechanism.
“Our research findings from the Fact Sheet of the Draft National Budget confirmed the Government has expressed interest and commitment to implement some of the recommendations during Pre-Budget Consultations under the Government’s adopted Public Participation Mechanism. We applaud the Government for committing to implement 2 of 4 revenue options as recommended by the citizens through Pre-Budget Consultations. We also applaud the Government for committing to implement 6 of 20 expenditure options as recommended by the citizens through Pre-Budget Consultations.”
“While we recognize the effort and commitment of the Government in the promotion of transparency and accountability, we would also in like manner like to recommend that the response of the Government to the recommendations from citizens at the Pre-Budget Consultations be included in the Budget Preface, in addition to the Budget Fact Sheet. Including Government’s response in the Budget Preface fulfills the principles of comprehensiveness as contained in the Amendment and Restatement of the PFM Act of 2009,” Mr. Aidoo maintained.
Integrity Watch Liberia is a civil society organization dedicated to promoting transparent, equitable and inclusive governance and democracy through public policy reforms.
It remains unclear whether or not these non-complaint ministries and governmental institutions will provide their expenditure reports in keeping with the PFM Law if they are press to the wall to do so by members of the National Legislature.
For several years now, members of the Legislature, especially those serving on the Joint Public Accounts and Budget Committee, have been accused of making unrealistic appropriations to line ministries and agencies with the expectation of receiving “kickbacks” following the passage of the National Budget.
The heads of these non-compliant ministries and governmental institutions are most often shielded by some lawmakers while defending their allocations during public hearings on their expenditure reports.
Some of these heads pay a visit at the offices of lawmakers who they have “good rapport” with to seek their favour of protection prior to these hearings.
They are spotted secretly entering the offices of some of these lawmakers shortly after public hearings.