MONROVIA – Millions of United States dollars collected as levies from motorists for the purpose of constructing and maintaining roads in the country are being diverted from the National Roads Fund to other uses despite the deplorable nature of the roads in the country .

An audit of the National Road Fund conducted by the General Audit Commission for two fiscal years from July 1, 2018 to June 30, 2020, observed that millions of dollars in oil royalties paid by motorists for road maintenance and rehabilitation in Liberia are either not returned to the Roads Fund Account as required by the law establishing the National Roads Fund or spent for the intended purpose.

Chapter 2.2 of the law establishing the National Road Fund states: “All funds of the FNR shall be held in the account of the Fund from which disbursement shall be made solely for the purpose of financing the approved annual road maintenance expenditure program and directly related costs as hereby required by this Act.”

By law, the Road Fund must ensure that road assets are maintained and that sufficient funds for periodic and routine maintenance are allocated for this purpose. It is also planned to ensure that each of the categories of national, sub-national and feeder roads has a sufficient share of the total budget so that these roads can function as an integrated network; cover the cost of government-approved borrowings to extend the length of roads that can be maintained; and to ensure that the needs of the road user and those affected by the roads are taken into account in terms of safety, security and the environment.

The GAC observed in the report delivered to the National Legislature last week that the Liberia Revenue Authority collected USD 53,018,871.54 and deposited the money in the consolidated fund account instead of the national road fund account. , as required by the road fund law. The Consolidated Fund Account is the general government revenue account which is controlled by the Ministry of Finance and Development Planning (MFDP). Of this amount, according to the report, the MFDP returned US$28,152,231 to the National Road Fund, leaving a difference of US$24,866,637.54 that has not been returned.

The management of the National Road Fund provided the response below to the GAC:

The NRF has brought to the attention of the Minister of Finance and the IMSC the issue of remittance of all fuel levies to the NRF accounts not via consolidated accounts to avoid

interference with the flow of funds and avoid late payments to contractors and suppliers for road-related maintenance works. The MCC (MC-AL) has made the issue of funds flow one of the primary condition precedent. Non-compliance with this condition precedent by

the MFDP caused NRF to lose the counterpart fund of $15,000,000 which was earmarked for the road sector. We hope that this audit report will ask the Government of Liberia to see the reasons for allowing fuel taxes and other road user fees collected by the LRA to go directly to the NRF accounts and not through of the consolidated accounts of the GOL.”.

In addition, during the 2019/2020 fiscal year, the GAC observed that the MFDP withheld the full amount of US$7,000,000.00 from oil royalty collection as National Road Fund support to the national budget, in violation of the National Road Fund Act. The National Road Fund Management informed the GAC that the amount was requested by the MFDP to help the Government meet its payroll obligations. The report states that the objectives of the National Road Fund program will not be achieved when funds earmarked for road works are used for unintended purposes.

The GAC further noted that payments totaling US$379,619.5,170,693.79 and LRD$123,644,698.52 were made on payment vouchers to the National Road Fund which were not not been approved or signed by the National Road Fund Manager and Finance Officer respectively.

In addition, samples of transactional documents such as payment vouchers, contracts and certificates reviewed by the GAC showed that the management of the National Road Fund had made overpayments for goods and services in the amount of 7 $483.65.

The oil importers confirmed to the GAC through confirmation requests that they owed the National Road Fund US$6,355,221.59, while the National Road Fund accounting records showed that the importers owed US$10,978,473. which resulted in a difference of (4,623,351.41).

The GAC report further noted that the management of the National Road Fund did not disclose in the financial statements, commitments to contractors totaling USD 6,100,508.3, which imposes a restriction on the total cash balance of $12,936,639.00 carried forward to June 30, 2020.

The GAC audit report also noted that NRF management failed to maintain essential personnel records in several personnel files such as application letters, interview panel reports, proof of academic credentials , police clearances and performance reviews.

The report concluded that staff working for the National Road Fund are all contractors even though they have served the entity beyond the legal period allowed for full-time employment.

NRF reaction

In a statement released in Monrovia, the NRF argues that the GAC issued an unqualified opinion focusing on issues relating to claims owed by oil importers that cannot constitute fraud, waste and abuse within the entity.

According to Mr. Boniface Satu, CEO of NRF, Per Certified Public Accounting Standards, an unqualified opinion is an audit report that has been issued without qualification regarding the condition of an audited client’s financial statements and that the auditor followed a standard opinion format. Declare that the financial statements are a fair representation of the financial results and condition of a client, in accordance with the applicable financial reporting framework.

The NRF stated that the GAC advice is an issue prior to the operationalization of the National Road Fund office in Liberia on May 1, 2018.

However, the NRF admitted that the deductions intended for the Road Fund were not paid into the Road Fund Account within the time limits prescribed by the Law. According to them, the unpaid amounts were withheld by the Ministry of Finance for other government officials.


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