Rejoinder: Auditor-General Morlu wants Big Bucks to Curb Corruption
By James K.B. Kamara, CPA, CIA
Liberia government has never been audited, so how do citizens know how government in managing public finances and programs. Can genuine accountability ever be achieved without independent auditing of government institutions?
Without an audit by ECOWAS and E&Y, would Liberia be prosecuting Chairman Bryant, former Speaker Edwin Melvin Snowe, and a slue of other former public servants? The GEMAP formed its foundation in the audit of the 5 state owned enterprises and Central Bank of Liberia. Could Liberians have allowed GEMAP without a professional audit of those institutions to establish the factual basis of gross economic malfeasance on the part of government functionaries?
Can Mr. Dempster invest his funds in an institution that is not independently audited, at least once a year? According to data retrieved from the AG Blue Print and Budget, European Commission is spending on average US$301,000 to audit a typical institution, albeit some more riskier than others. Can Liberia afford to hire an outside accounting firm to perform a quality audit of the Ministry of Finance, Internal Affairs, Commerce, etc?
The Liberian public ought to ponder these questions,
as they seek to participate fully in the democratic
dispensation unfolding in our nation.
Liberia is, indeed, a sad story. As the oldest country in Black Africa, we still continue to demonstrate traits that make us a laughing stock around the world. Our nationalistic—or patriotic outer layer—is so porous, so thin, so egocentric that anyone with six ‘pieces of silver’ is capable of controlling our minds to do dishonorable things that can neither benefit our people nor deliver the nation from its present state of decadence.
So what kind of people are Liberians? Are Liberians so self-centered that even after a long self-inflicted civil madness that decimated a quarter million lives, we still encourage Nicodemus’ behaviors and practice Judas’ Kisses at the detriment of our people and nation? What kind of people are we—a nation that breeds miscreants, unprincipled praise-singers, who wallow in deceit and plant seeds of dishonesty and seamless convictions just to maintain a diabolical status quo that has pulled this country into the abyss of underdevelopment and poverty for centuries?
It is so pathetic—and dishonorable—for people to be conscienceless. They defend everything in which they have vested interest. They lambaste and berate all things that will interfere with their parochial interest. And they get away with such a practice because the country is enameled in faked patriotism, lackluster pretense and uncanny culture that have produced noncommittal people who think the people—or the masses—can always be fooled. In most cases, they get the silent nod of our political leadership, who also frantically fight to preserve the status quo to continue business as usual. These are the agents of anti-change; people who masquerade as working for the masses, but in reality, are only interested in preserving their own status at the expense of the masses.
This is Liberia’s real dilemma. The country has bred countless number of people, who celebrate all that is bad for the country and despise all that will move the nation forward and change people’s lives for the better. The supply line for ‘stooges’ and ‘yes men’ are, therefore, never exhausted. They come in all shapes and forms. They are readily available to beat the largest drum to vilify any positive change that will curtail unscrupulously entrenched practices. These are people who relish in gossips, rumors and half-truths. They discourage any leadership from ‘showing the light’ and from ‘leading the right way’ for the people to follow. For them, it is in their best interest for the people to remain under the canopy of darkness and ignorance to be exploited, abused and dehumanized.
This is the case with Francis Ruel Dempster’s piece titled—An Analysis of Auditor-General Morlu’s Proposal to the National Legislature—published on The Perspective website. Dempster’s article shows how many of our so-called professionals go all out of their way to stifle change and perpetuate a system that least benefits our people. And Dempster’s action is not unique. Many like him have, over the years, desecrated themselves for selfish gains. Their overriding interest has been purely personal rather than public. Yet, they make the loudest noise. They will be the first to shout patriotic slogans. They will be the first to beat their chests and condemn others for perpetuating despicable social vices. They will be the first to raise their voices to defend the masses in a grandiose display of disguised hypocrisy. Dempster is a child of that world. At least his article says so. I am not.
But let’s examine Dempster’s charade for its merits, if there are any, and demerits. First, he qualifies himself as a ‘principal civil servant’, well-versed in the business of government finances. Beautiful. He, therefore, impresses on Liberians that he knows the ‘in and out’ of Liberia’s financial and budgetary interactions. Wonderful!
Dempster begins by displaying a defeatist mentality—very typical of dishonest Liberian professionals. He says Liberians should weigh funding the GAC to fight fraud, waste and abuse against other national concerns like insecurity, ignorance, disease and poverty. Dempster fails to understand that insecurity, ignorance, disease and poverty are by-products or residues of a society well-entrenched in fraud, waste and abuse. Contain these vices and see whether insecurity, ignorance, disease and poverty will not be contained or nearly eliminated.
Our principal civil servant lacks the insight to understand that a nation becomes insecure when fraud, waste and abuse exist. He also fails—and miserably for that matter—to understand that if the country’s resources are well managed and utilized, ignorance will give way to knowledge for government will invest in education and other learning centers for the citizenry to benefit; disease will be contained because government will improve the country’s health system to maintain a healthy population for increased economic production. As for poverty, Dempster could not even fathom the correlation between poverty and fraud, waste and abuse. The prevalence of the latter is responsible for the astronomical poverty that engulfs Africa and other developing countries.
Otherwise, why would Liberia be so impoverished given the country’s small population and abundant natural resources? Does Dempster know that the political violence that engulfed Liberia was due principally to the unequal distribution of wealth and rampant corruption in public places? Let Dempster reflect on happenings in Liberia’s body politic.
Now Dempster shows that his worldview is acutely limited
when he says the GAC should only focus on auditing rather
than provide oversight of government’s stewardship
of public funds and programs. He thinks another government
institution should handle such matter. Such view shows
• The author has a narrow perspective of auditing. He sees the GAC as an auditing bureau…that counterchecks numbers to see whether debit and credit synchronize; whether the books are balanced. Well, Dempster, auditing entities around the world do not only tally numbers. They analyze, interpret and translate those numbers into measurable matrices for policymakers to better allocate public funds for the public good, and protect public assets for the public good.
• The author is out of touch with the inner working of modern-day auditing institutions. Does he know that auditing entities are now populated with engineers, managers, economists, researchers, medical personnel, psychologists, journalists, security personnel and other professionals rather than only accountants and/or auditors? All he needs to do is to visit the website of other highly performing supreme audit institutions in Africa and the West, where he claimed to reside. The auditing entities are becoming more policy-driven in their quest to protect the public coffers and ensure that public programs are implemented accordingly. Unfortunately, the author, whether consciously or unconsciously, agrees that the GAC is responsible to ensure compliance and financial management.
• The ‘learned’ principal civil servant is an advocate of big government. He insinuates that the oversight of public funds “should be provided by another appropriate institution of government.” Like his mentors, who continue to suggest the creation of ‘duplicate’ institutions, he comes full cycle by saying that if the GAC is allowed to exercise such responsibilities, Liberia will be creating another “super institution”. Again, the author sees the GAC from a fuzzy lens, refusing to look at the big picture. All he sees is a new entity germinating to overburden our people with huge salaries and fewer results.
Dempster does not see the GAC blueprint as a document committed to helping the administration fight fraud, waste and abuse. Instead, he calls it “ambitious”. He thinks another institution should be ‘created’ or ‘empowered’ to restore confidence in government and help the legislators, whose capability he questions, to provide proper oversight of government. He refuses to see that national auditing institutions also audits performance/implementation of policy and programs—which is called performance auditing. GAC and other supreme audit institutions are also empowered to ensure that adequate and sufficient internal controls are in place to safeguard and protect assets of the public.
This is why the framers of the Liberian constitution specifically mentioned the GAC as one of three autonomous institutions empowered to protect the national coffers. One who protects also monitors, Dempster! The National Elections Commission cannot conduct elections without creating the enabling environment and monitoring election trends over a certain period of time. This is one way the Elections Commission makes informed decisions on strategies and activities. The Civil Service Commission protects civil servants, but it also monitors them.
Yet, Dempster says our political “structure and culture” encourages the delegation of authority to other institutions for “checks and balances in government.” Who told Dempster that the GAC is just a loose institution? He does not even know that the GAC, by law, now reports directly to the National Legislature since 2005 when President Sirleaf, then a commissioner for Good Governance, recommended that the GAC report directly to the Legislature as an independent institution. In the past, it reported to the Executive Branch of Government. I am extremely baffled that Dempster did not even know this simple fact before he launching into a tirade as to who monitors the GAC. Let the readers know that a man who is claiming to analyze a piece does not even know the basis factual foundation.
Dempster sees the proposed GAC budget as unrealistic given other competing interests. He talks about program priorities and where does GAC come in. Dempster is either in a dream world or is refusing to accept reality. The international community thinks Liberia is underdeveloped due to lack of accountability and transparency. It particularly calls for the strengthening of the GAC to rein in economic criminals. The GAC may not be of priority to Dempster and the Budget Bureau, but it ranks high for Liberia’s development partners, international financial institutions and donors.
Does he understand that the government Poverty Reduction Strategy will be a political farce if the country is consumed in fraud, waste and abuse? Meager resources will hardly make their rounds to beneficiaries. The Poverty Reduction Strategy is a waste of time and a political showmanship if the country is consumed in fraud, waste and abuse. Safeguard national resources and poverty will dissipate in thin air. I think most reasonable Liberians get the point.
Dempster insists that the GAC is part of the budget committee. Well, Dempster, you miss the point. The GAC used to be. Now, it is not. And the reason is simple. The GAC belongs to the Legislature, which is under obligation to scrutinize the budget. And the GAC is the institution the legislators depend on for advice on the budget. That’s why the new Auditor-General, John Morlu, officially informed the Budget Director, Augustine Ngafuan, that it would be a conflict of interest to formulate the budget and later vet it for comprehension. Can one be an accuser and a judge at the same time in the same matter?
As an institution of the Legislative Branch of government, is it not prudent to submit the GAC budget to the legislators? Dempster raises issue with this standard practice. In democratic countries, including Ghana, Sierra Leone, Mali, America, Canada etc, auditing entities submit their budgets directly to the national legislatures. And they do not sit on any budget committee for they have to vet and scrutinize the budget. But our principal civil servant thinks this practice is an abomination—and a sacrilege. We think it is the beginning of independence and credibility for the GAC.
Now the Budget director says Liberia’s next fiscal budget is $150 million. So Liberia is worth just that—a whole country, eh? Well the auditor general will have the opportunity to scrutinize the budget this time round, if he is given the support to recruit capable manpower from Liberia and the Diaspora. He is under no illusion that he can do this all along, that is why he is asking for 35 capable Diaspora Liberians in his budget submission (Dempster, read the budget again). We hope the reported budget is comprehensive and inclusive.
My experience with past governments in Liberia and other parts of Africa makes it hard for me to believe that Liberia is worth just $150 million. I know many African governments exclude certain revenues from the national budget. They, instead, share the unreported revenues. This is the beginning of fraud. Other times, officials of the budget bureau actually connive with public institutions to commit economic extortion. One African country’s budget director actually allocated a huge amount to a nominal technical educational institution that gave him kickback every time withdrawals were made. In Liberia, this is why officials from the Budget Bureau and Finance Ministry will not be happy to see the voucher system go. It is a fertile ground for extortion and fraud. I wonder what Dempster will say now that the Legislators have unanimously passed a bill to scrap the voucher system---at least as it applies to them.
How can a man want to continue a system that has institutionalized economic extortion and kickback in Liberia? Ask anyone—including ministers—who has had to deal with the budget process and vouching in Liberia, they will tell you that it is the first introduction to institutionalized fraud. Everyone pushing budget and voucher paper wants their own cut—the usual 10% of the total before approval. And Dempster wants the GAC to become party to such fraud scheme?
Dempster seems bent on creating confusion when he says that fighting fraud, waste and abuse is a collective responsibility. The GAC blueprint, in fact, calls for the strengthening of the country’s justice system to prosecute economic crimes to achieve accountability and transparency. The blueprint says given the nation’s weak justice system, it would be hard to prosecute economic criminals identified in future audits, so it calls for the establishment of an Economic Crimes court.
Our financial guru even questions the allocation of
computers for the GAC. A revamped GAC, I presumed, is
going to be computer-infested interlinked for efficiency
and coordination. This is how all functioning auditing
entities worldwide look like. But Dempster says this
is unrealistic to provide “power supply for the
215 computers being requested” for “80 %
of the employees” to have access to computers
in year one.
Dempster is insinuating that we allocated money for renovation without identifying the building that would house the GAC. This is unfortunate. I think Dempster did not read the budget and other attachments. If he did, he probably is more interested in distorting the facts than contributing to debates about the budget. The Old Executive Mansion was mentioned in the Budget. And that it was stated Milton and Richards, the Architectural firm in Liberia was finishing costing of the project to renovate the Old Executive Mansion. How Dempster did not read that?
For instance, he says Diaspora Liberians should get involved in the new GAC. The first budget line says exactly that. In fact, anyone reading the budget can see that the FIRST LINE on the budget was salaries for 35 Diaspora Liberians. So what is Mr. Dempster talking about? Mr. Morlu’s proposed budget for the GAC is a three year budget, of which a significant portion is in salaries for Diaspora Liberians to come home and assist him in building the GAC. Let Mr. Dempster show the Liberian people a blueprint or a Liberian government official with a plan to incorporate Diaspora Liberians in moving the nation forward? The GAC budget is the first we have seen that actually present a number for Diaspora Liberians.
Dempster also suggests that the National Budget Committee
be involved in the planning of the GAC budget. Such
action kills the spirit of independence envisaged by
our international partners and undermines government’s
pronouncement to institute accountability and transparency.
It is regrettable that a young professional like John Morlu, who has committed his time, resources and energy, is already facing the wraths of people, like Dempster, who hate change and will do anything to stifle efforts being made to move the country forward. Show me one government agency that has submitted a blueprint or an action plan since President Sirleaf came to power. At least Morlu provided a 116-page dossier for Liberia and the international community to see where he wants the GAC go. The blueprint, well in line with international best practices as recommended by INTOSAI and the LIMA Declaration, gives us a glimpse of what a new GAC would achieve in 3 years.
So where the blueprints for other institutions, especially the Budget Bureau, the Finance Ministry and other entities. How can Liberians judge the work of your hands? How do we know that your goals and objectives were achieved? Do many government entities do end-of-year evaluations—or conduct performance audits? Or financial audits? Or system audits? Well, Dempster thinks auditing is not all that important; after all, with auditing we are likely to uncover fraud, waste and abuse that can lend a few folks behind bars for a long time.
Failure to read the Blueprint and Budget led Dempster to make the wrong recommendations. Dempster’s recommendations are already addressed in Morlu’s budget and blueprint. In one of recommendations, he writes: “That the proposed scope of work and authority of the GAC be thoroughly reviewed. That input is sought from Liberian and non-Liberian experts.” Unfortunately for Dempster, the blueprint has already addressed this issue when it suggested that the National Legislature review the Act that created the GAC in line with LIMA Declaration and modeled nations like Ghana, America, and Botswana. Did not Mr. Dempster read this in both the budget and blueprint? In fact, the Constitution of Ghana dealing with its own SAI and the LIMA declaration, along with multiple reference links, were all provided in the GAC Blue Print.
How can Dempster assume Morlu has not already sought international input from Liberians and non-Liberians? I know that this document was circulated among Liberians since December 2006, and it has been revised. As far as I know, Liberian economists, accountants, MBAs, etc have had their inputs.
Mr. Dempster further argued, “That the GAC utilizes
the next two months to revise its plan while testing
auditing methodology. That capable certified Liberian
accountants in the Diaspora be contacted to assist in
planning and execution in year one.” Here again,
the capable young man, Morlu has already answered this
for Mr. Dempster. In fact, anyone reading the budget
can see that the FIRST LINE on the budget was salaries
for 35 Diaspora Liberians. So what is Mr. Dempster talking
Faulty Analysis of the Budget---Forgetting Alternative Options
Another problem with Dempster’s writing is that he says Diaspora Liberian professionals have not taken Morlu’s challenge to analyze the budget. Well, he failed to realize that so many of us, who have been in this business for a long time and continue to do so, believe Morlu budget is not only just reasonable, but it understates the volume and complexity of the job at hand. I believe that he cannot do all he wants to do with the meager budget he is requesting.
How in the world can he do all of this on a US$6.6 million budget? I have been in this business long to know what it take to conduct an audit. Morlu said it correctly when he analyzed the cost of the audits conducted of Liberian government institutions, sponsored by the European Union. He stated that there is indeed a linear relationship between the volume and complexity of the institution and the cost of the audit. The fact that Liberian government has NEVER been audited, how can anyone argue that the cost of the audit for the first time will not be prohibitively high?
Can Dempster read the scope and volume of work laid out in the GAC budget and blueprint? Morlu listed 22 ministries, 22 public corporations and 22 plus “ever increasingly list of autonomous agencies.” Read the bottom of the page of the GAC budget submission dealing with “Scope and Volume” additional auditees?
Did Dempster read the budget page where in Morlu presents a comparative financial analysis? Let me remind Dempster that according to figures in the budget, it is costing the European Union, on average, US$301,000 to audit a particular institution in Liberia.
If Morlu were to extrapolate that figure and adjust it up and down depending on the complexity of the government institution, it will cost Liberia US$19 million annually on the low end to audit the Liberian government. And I believe this figure only reflects financial audits.
Reading Dempster, one could conclude that he would choose the “DO NOTHING” option in the budget, after all providing adequate funding for the GAC means there will not be a repeat of 1980 stealing of public funds. Dempster can be rest assured Morlu will not let Liberians down and tolerate that “do nothing” approach to things in Liberia.
Does Mr. Dempster want to spend US$19 million or US$6.6 million to audit Liberia?
Furthermore in order to fully appreciate Dempster’s lack of understanding of the financial profession, he argued from a uniformed position of finance and budgeting. Mr. Dempster writes, “He (Morlu) has also proposed a budget of USD $6.6 million – 13.7 times the size of his current budget of $481,057- for fiscal 2007/08.”
A sound reader could have quickly realized that the UN Panel of Experts said that the $481,057 was reduced to one-third the original size of the GAC. So if Dempster understood accounting and finance, he could have adjusted that figure up to US$1.5 million when calculating his figure. In that case his 13.7 times calculation would have been lower. But he failed to do that so that he can confuse the Liberian people.
Here is the simple math for Dempster: US$481057/33% =US$1,457,748. A seasoned financial professional would use the US$1.5 million as the baseline figure for his computation and analysis. In the accounting and finance world, we called it “adjusting” or “normalizing” the number to get a clean baseline. It could very well be that Dempster is doing budgeting as done in the 1970s and 1980s, a fundamental problem in Liberia today.
But again, Mr. Dempster is mad that the UN Panel of Experts informed the world that the government of Liberia cut down the budget of this important institution to one-third its original size.
And that there is a good reason that his Budget Bureau
cut the budget. Where is the reason? But we know that
the Budget Bureau is one of the most corrupt centers
in Liberia. Could the cut have been done to undermine
the GAC work?
Well, from the way Dempster is writing, it could be that he is doing so at the behest of someone in the Budget Bureau, or else why would Mr. Dempster even want to chastise Morlu for repeating the UN Panel of Experts statement. Facts can hurt. And facts cannot be explained away quite easily.
Well, I have learned that European Union already provides
power via a DFID issued generator. Further, the source
has indicated that the cost of renovation of the Old
Executive Mansion include a power supply system. Morlu
indicated in the Budget that Milton and Richards were
renovating the building. So it is not a budgeted line
item, because putting that in the budget would have
meant that Morlu was charging the Liberia government
for something that was already available.
Oh, Dempster, please look at the material and supplies line on the budget and the fuel for the power supply is also fully budgeted in the Budget.
Let me end here, Dempster, because I believe you do not understand the issues, nor did you read the entire 116 page dossier on FPA. As usual, you just wanted to write for writing sake, without taking a good read of the rich content in Morlu’s blueprint and budget. Some of us have learned a great deal about Liberia from reading Morlu’s past work, his Blue Print, and budget.
Dempster could begin to prepare his resume, and then go to Liberia and work without a computer, since he thinks that is indeed a bad idea for Morlu to provide computers to 80% of GAC staff. I guess he wants them to work on pencil and paper. But rest assured. The GAC itself will be audited annually and anyone caught taking even a penny in bribe to write a favorable opinion will be a goner.
So Mr. Dempster the practice of seeking bribes and kickbacks from government officials trying to get their annual budgets, budget allocations, and vouchers will not be tolerated by the GAC, so if you intend to work at the GAC, please leave behind the bad practices that accompanied your tenure as a Principal Civil Servant, Republic of Liberia. Liberians are tired of seeing their nation bleed money that could be spent to fix roads, build schools, renovate hospitals, etc. That is why auditing is so important, because it help the good government checkmate financial malfeasance.
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