Should the Draft Budget Be Approved As Is (The A-Z Challenges)?

By R. Tombekai Senwah

The Perspective
Atlanta, Georgia
August 27, 2012

Honorable Speaker and Members of the Legislature:

The National Draft Budget, presently before your honorable body for Review and Approval, has generated enormous public interest. Our International Partners and the Liberian public are watching to see if due diligence will be accorded this historic (Liberia’s first Medium Term Expenditure Framework budget) task.

There is misinformation circulating that delay in passage of the Budget is preventing employees from being paid their salaries and benefits. Hence, the budget should be hurriedly passed. As you may know, Liberia’s Financial Management (PFM) Act of 2009 dispels this notion as it provides for the “Minister of Finance to collect revenues and approve expenditures, in line with the proposed budget, up to one twelfth (1/12) of the budget of the previous fiscal year.” Hence, Finance Minister Amara Conneh has ably seized the opportunity and is executing this mandate.

Mr. Speaker and members of the Legislature, Section 10 of the Budget Law of 2011/12 clearly stipulates: “to avoid delays in the passage of the FY 2012-13 Budget, the President shall submit the said 2012-13 draft budget on or before April 30, 2012. Additionally, the President shall fully comply with the provisions of Session 2209: Presentation of the Budget of the Revenue Code of Liberia (2000) and the 2009 Public Financial Management Act. Each spending entity of Government shall, prior to submission of the FY 2012-13 Budget to the Legislature, present to the Legislature a Budget Performance Report covering the first three quarters of FY 11-12 budget. This report shall be the basis upon which the Legislature will determine the effectiveness of the respective entities funded in this FY 11/12 budget.”

The Executive has failed to meet the budget submission deadline and not a single entity of Government complied with the mandate of reporting? Section -6: of the FY 2011/12 budget law states that “each spending entity for which appropriations have been made in this budget shall submit a Quarterly Performance Report to the House of Representatives and the Senate with explanatory notes of the qualitative and quantitative results of spending the appropriations therein provided.” Is that not a law? Is non-compliance not a bridge of both the budget law and the public financial management law? Are there not remedial measures for violations stipulated in the PFM Regulations? The excuse of a request for an extension of the budget submission deadline does not hold as it was advanced after the violation. Let us uphold the rule of law.

I do not fault you (the Legislature) for delay in passage of this Budget which was submitted beyond the statutory deadline. Please urge your colleagues (Members of the Ways, Means and Finance Committees) to work expeditiously, but cautiously to ensure we have a good final product - in consonance with the law - that will meaningfully impact the lives of your citizens and guide the country’s growth and development. Our International Partners are anxiously awaiting passage of the budget in order to commence releasing committed funds. But, the challenge to review and approve the current draft budget is the greatest ever since the beginning of the incumbency of the Ellen Johnson-Sirleaf Government. Preparing the budget in the context of a Medium Term Expenditure Framework (MTEF) is an extraordinary challenge to the Sirleaf Administration. Spending entities were challenged by the annual Line-item based budgeting of the past; therefore, it is not surprising that the MTEF budget is posing an even greater challenge/ problem. To conclude analysis and review of this budget without obtaining the views of knowledgeable experts will not be doing justice to the process. Hence, is advisable to seek the views of the GAC, the Universities (UL and CU), the LICPA, Civil Society and two veteran consulting firms/consultants , prior to conclusion of your review process. Anything short of this may not be in the best interest of Liberia and the Liberian people. This budget review exercise should not be taken lightly. It is an obligation to do due diligence to this assignment.

The Challenges of this Budget

Mr. Speaker and Honorable Members of the Legislature, have you verified if the budget is balanced? Can you speak to the employment level of any entity of government, or government in general? Can you attest to critical obligations of Government being in this budget? When a budget is made and does not:

A. Indicate the past, present nor future employment levels within the context of its mandated Medium Term Expenditure Framework (MTEF), or any context;

B. Take into consideration the legitimate obligations of Government such as, the National Savings Bond Scheme, realistically assessed accumulated domestic debts, outstanding rental obligations, salary arrears, and the attendant interests of bonds and debts;

C. Address the dual-salary, low salary, and disproportional salary system (only in Liberia does a minister make less than USD 300 in salary; only in Liberia most employees cannot make a budget on an annual basis because his allowance/salary is discretionary, while that of his/her bosses are not);

D. Adhere to the Public Financial Management Laws and Regulations as regards format for presentation, submission of financial statements and presentation of reports within time-frames (The PFM Law requires agencies of government to make quarterly reports on the impact of Budgetary Transfers -both internal and external - to the Ministry of Finance; and by extension, such reports, which formed part of the budgetary process in the past, along with the first three quarters reports should be transmitted to the National Legislature);

E. Take into consideration the basic funding and recurring costs of entities in budget formulation;

F. Address pensioners plight and other obligations to national and international institutions;

G. Conform to the law on Financial Autonomy of the Judiciary (Do you have a copy of the Judiciary’s Budget submitted to the Ministry of Finance, as required by Law? Do you have the report of revenue generated by the Judiciary?) Isn’t that a requirement of the law?;

H. Provide a clear picture of the number of jobs lost as a result of unilaterally excising professional services allocations from existing appropriations, and the number of jobs to be gained as a result of investment projects (PSIP); Are you aware of the magnitude of the consequences of the disruptions;

I. Uphold/Respect the laws of the land by funding institutions which are not created by statutes (A Ministry of State for Presidential Affairs, A “Ministry of Information Cultural Affairs and Tourism”, A Ministry for Finance, Economic and Legal Affairs, among others) – Are there statutes to support the existence of these institutions and consequently their allocations? Can the statutes be made public, if they exist? Should the President of Liberia be paid from a “Ministry of State for Presidential Affairs” budget? Should it not be the reverse where the Minister of State for Presidential Affairs and his staff are paid from the budget of the Office of the President as was done during normal days? Is this an issue to side-step since it is now being brought to your attention in a public manner?;

J. Allocate funds to counties based on any reasonably logical framework;

K. Take into consideration that some entities have been statutorily abolished and have no legal or moral mandate to operate fully funded – the case of the National Bureau of Investigation and the Ministry of National Security;

L. Address the plight of Liberian Foreign Service personnel by at least adjusting their remunerations/benefits if a cost of living adjustment is not being factored into their budgets;

M. Verify information (program description and objectives – avoiding copying and pasting of old documents, and checking for mathematical accuracy) provided therein; m. Honor the legal requirements specified in the PFM Laws for format and structural change of the budget – the structure and format of the budget should not be changed without due notice to the Legislature, according to the PFM law;

N. Take into consideration the bad budget practice of placing allocations earmarked for one entity and placing it under another as the case is with foreign missions arrears of the Foreign Ministry being placing under the Ministry of Finance (Is Foreign Minister Ngafuan not best suited to manage this allocation?);

O. Adequately reflect and capture all sources of the revenues and thoroughly assess potential for revenue generation- are agencies making their optimum contribution to the Government Consolidated fund in consonance with the PFM Regulations as regards dividends; as provided for in Section 4: Capturing All General Revenues of Liberia – of the FY 2011/12 budget law? Monitoring the voluntary income tax payment schemes for contractual government and other employees on special programs (Is the Government not losing a minimum of USD 500,000 annually as a result of violations);

P. Adequately address our needs for balanced resource allocation to counties, Education services, Health services, Agriculture services, Infrastructure, Security, Cultural Re-orientation, Economic Empowerment and the administration of justice, Youth Engagement, Employment Generation;

Q. Provide supporting documents (As normally required by the General Auditing Commission –GAC- for lump-sum projects allocations, or convincingly justify them;

R. Provide funding for commitments of government – as the case is with salaries and benefits for additional members of the House of Representatives elected, obligations to utility companies (LEC and LWSC), and the Media, among others. The Minister of Finance did not allocate a dollar for the additional newly elected Representatives, provide for vehicles or needed equipment to entities, take into consideration needs and obligations of educational institutions such as the University of Liberia, Cuttington University and the WVS Tubman University – among others;

S. Capture all state owned entities – as once suggested by former Auditor General John Morlu ll;

T. Reflect the true income of Foreign Missions;

U. Present in reasonable details and a transparent manner the Foreign Aid package to curtail funding duplication;

V. Take into consideration interests on domestic debts to vendors and the National Savings Bond Scheme;

W. Account for state owned enterprises dividends, or wasteful charitable donations without honoring dividend payment commitment;

X. Does not adequately address gender challenges -inequities;

Y. Take into consideration the massively reduced operational support costs of some institutions – which impede their functions (The GAC being a typical example);

Z. Address salary inequities/discrepancies within the Executive and between the three branches of Government; Why should the budget be hurriedly approved with these issues still unaddressed and looming?

Mr. Speaker and Honorable Legislators, your Oversight Role is being monitored. This is just one test. Our International Partners and your constituents are watching. Please do the right thing! For once, do not think about your benefits, the Pet Projects and what is in it for you? Be true to your conscience.

Humbly submitted,

R. Tombekai Senwah

Monrovia, Liberia

© 2012 by The Perspective
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