A recent audit by the General Auditing Commission (GAC) has uncovered significant financial discrepancies within the National Fisheries and Aquaculture Authority (NaFAA), revealing that the agency overspent by US$3.6 million beyond its approved budget for the “Sustainable Management of Fisheries Project (LSMFP)”. The findings have sparked concerns about financial mismanagement and potential violation of the Public Financial Management (PFM) Act.
According to the GAC audit report, NaFAA’s management expended US$3,628,386.32 in excess of the project’s approved budget for the fiscal year ending December 31, 2023. The report specifically notes that these expenditures were made without obtaining a supplementary budget or a no-objection clearance from the World Bank, which is a critical oversight given the project’s funding structure. The GAC warned that such unauthorized spending not only risks the misappropriation of project funds but also jeopardizes the achievement of the project’s objectives, which are vital for Liberia’s fisheries sector.
The GAC’s findings have raised red flags about NaFAA’s adherence to financial regulations, with potential implications for the agency’s credibility and the success of the LSMFP. The GAC emphasized that spending beyond the approved budget violates Sections 24(1-2) of the PFM Act of 2009, as amended in 2019, which mandates strict adherence to budgetary allocations to prevent financial mismanagement and ensure the effective use of public funds.
In response to the GAC’s findings, NaFAA’s Director General, Emma Glasco, strongly refuted the allegations of financial mismanagement. She asserted that all payments made under the project were supported by the necessary documentation, which, according to her, is readily available for review. “The auditor’s assertion that the aforementioned payments were made without supporting documents is incorrect,” Glasco stated.
“All payments were accompanied by the requisite supporting documents, which are accessible at the Project Financial Management Unit (PFMU) and the Project Implementation Unit (PIU). We have attached copies of contracts and bid documents for the auditor’s review.”
Despite this defense, the GAC maintained that NaFAA’s response did not adequately address the issues raised. The commission reiterated its stance that all future payments must strictly adhere to the approved budget and procurement plan. The GAC also underscored the need for proper documentation to ensure transparency and accountability in managing public funds.
The GAC’s report goes beyond the issue of budget overspending, highlighting other significant risks associated with NaFAA’s financial practices. The commission pointed out that the agency made payments totaling US$2,989,161.60 without adequate supporting documents, such as contracts and bid documents. This lack of documentation raises concerns about the validity and accuracy of these transactions, potentially opening the door to fraudulent financial practices.
The GAC warned that without proper oversight and documentation, there is a heightened risk of misappropriation of project funds. The commission called on NaFAA to account for these undocumented transactions and emphasized the need for all future expenditures to be supported by the necessary documentation, in line with financial management regulations.
Another area of concern highlighted in the GAC report is the disbursement of US$36,000.00 in travel advances without the requisite Travel Authorization Forms. The GAC noted that the absence of these forms could indicate that the funds were used for activities unrelated to the project, further compounding the risk of financial misconduct.
In response to this, NaFAA defended its actions, stating that the individuals who traveled were not government officials but project implementers. NaFAA claimed that the travel was budgeted and approved, and that all designated staff provided evidence of their travel and submitted back-to-office reports as required.
In light of these findings, the GAC has made several recommendations to NaFAA’s management. The commission urged the agency to account for all expenditures that exceeded the approved budget and to secure proper approvals for any future budget adjustments. Additionally, the GAC recommended that NaFAA conduct regular reconciliations between budgeted and actual revenues and expenditures, using these reconciliations to guide future financial planning and disbursement activities.
The GAC also advised NaFAA to ensure that all travel-related transactions are fully documented with approved Travel Authorization Forms before disbursing travel per diems. This, according to the commission, will help mitigate the risk of funds being used for unauthorized purposes and ensure that all expenditures are properly accounted for.
The Liberia Sustainable Management of Fisheries Project (LSMFP), managed by NaFAA, was approved by the World Bank Board of Directors on September 21, 2021, and officially commenced on December 22, 2021. The project aims to improve fisheries management in Liberia, enhance livelihoods, and increase income for both the government and targeted beneficiaries. Key initiatives under the LSMFP include the establishment of industrial and artisanal fish landing sites at the Mesurado Pier in Monrovia, which are intended to improve conditions for industrial fish landing and support the export of high-value fish species and products.
As the GAC continues to monitor NaFAA’s financial activities, the outcome of this audit could have far-reaching implications for the agency’s operations and the success of the LSMFP.
The findings have underscored the importance of strict adherence to financial regulations and the need for greater transparency and accountability in managing public funds, especially in projects of such national significance.
