The General Auditing Commission (GAC) is recommending that the Central Bank of Liberia (CBL) shows substantive justification and evidence for what it termed as unsolicited, unapproved, and unbudgeted Corporate Social Responsibility (CSR) payments made to seven (7) individuals and entities amounting to US$1,084,027.
This comes in the wake of damning audit report, which covered the period from January 1, 2016, to December 31, 2023, exposed a troubling pattern of financial mismanagement, particularly regarding the bank’s Corporate Social Responsibility (CSR) payments.
These payments, which should have been guided by a clear and approved policy, instead became a conduit for discretionary spending, raising serious questions about the bank’s commitment to transparency and accountability.
The Amended and Restated Act of the Central Bank of 2020, Part IV, Section 10 (1), clearly states that the powers of the Central Bank shall be vested in the Board of Governors, which is responsible for approving the annual budget of the Central Bank.
This provision is not just a formality; it is a safeguard designed to ensure that the bank’s resources are allocated and spent according to a well-defined and approved plan. However, the GAC audit revealed that the CBL’s management disregarded this legal requirement, making substantial CSR payments without an approved policy and in excess of budgeted amounts.
The audit highlighted that the CBL disbursed a total of US$1,084,027.00 in CSR payments, far exceeding the approved budget. These payments, made to various institutions and individuals, were not only unsolicited but were also executed despite warnings from the bank’s Finance Department about potential budget overruns.
Among the beneficiaries were the Liberia National Police, the Ministry of State National Security Agency, and the Monrovia City Corporation. These payments were ostensibly for contributions to the July 26 Independence Day celebrations, special security operations, and municipal reforms.
However, the lack of an approved CSR policy raises significant concerns about the justification and necessity of these expenditures.
The GAC report rightly points out the risks associated with such discretionary spending. Disbursing funds without an approved policy opens the door to potential misappropriation and financial malpractice. Moreover, making payments that exceed budgeted amounts can lead to uncontrolled spending, compromising the bank’s ability to fund its approved activities.
In an institution as critical as the Central Bank, which is tasked with maintaining the stability of Liberia’s financial system, such fiscal irresponsibility is not just negligent—it is dangerous.
In light of these findings, it is imperative that CBL management takes immediate and decisive action to rectify these issues.
The GAC has made several key recommendations that should be implemented without delay:
The CBL management must provide a thorough and substantive justification for the disbursement of significant unbudgeted CSR expenditures. This includes detailing the specific benefits these payments provided to the community and how they align with the bank’s overall mission.
Draft CSR policy must be finalized, approved by the Board of Directors, and fully operationalized. This policy should clearly define the parameters for CSR spending, ensuring that all future expenditures are within approved budget limits and are subject to rigorous oversight.
Going forward, the GAC recommends that CBL must ensure that all CSR expenditures are within the approved budget limits. In cases where additional spending is necessary, management should seek supplementary approval or a budget recast. This process should be well-documented and transparent, with all relevant records maintained for administrative and audit purposes.
The CBL’s Board of Governors must enhance its oversight role to prevent future instances of financial mismanagement. This includes regular reviews of CSR expenditures and ensuring that all payments are made in accordance with the approved policy and budget.
The findings of the GAC audit are a stark reminder of the need for accountability and reform within Liberia’s financial institutions. The Central Bank, as the custodian of the nation’s monetary policy, must set the highest standards of fiscal discipline and integrity.
The Liberian people deserve to know that their public resources are being managed responsibly and that those in positions of power are held accountable for their actions.
President Joseph Boakai and the relevant oversight bodies must take this report seriously and ensure that the necessary reforms are implemented. The time for complacency has long passed. Liberia’s financial stability and the public’s trust in its institutions are at stake.
The Central Bank of Liberia must undergo a thorough and transparent process of reform. This begins with holding those responsible for financial mismanagement accountable and ensuring that the bank’s operations are aligned with the highest standards of governance and fiscal responsibility.
Anything less would be a disservice to the people of Liberia and a betrayal of the bank’s mandate to safeguard the nation’s financial future.
