“Liberia’s Budget Shocker: US $10 Overspent- Where Did the Money Go?”
A rejoinder (Part I)

By: Ruel Francis Dempster

The Perspective
Atlanta, Georgia
November 8, 2007


The recently published Annual Fiscal Outturn Report 2006/2007 carried on the Ministry of Finance (MOF) website did present an appearance of overspending by most Agencies of government. But, was there any actual overspending? In the aggregates of the report, Government appropriated US $134.98 million and spent US $ 134.65 million. This leaves an unspent appropriation of at least $330.000. Now, where did the reported US $10 million overspending come from? While unspent appropriation may not be desirable for a country with enormous needs, it is certainly better than overspending the Budget.

That FPA caption is indeed misleading. The bottom line is that the Government did not overspend the National Budget. It does, however, appear that almost all Agencies of government overspent their appropriations. If this was true, it would be a violation of the statutes. Hence, making such action by Heads of Agencies subject to prosecution. Technically, the Budget should neither be overspent or under spent. But, given the reality of the Liberian situation, room might be made for under spending.

Apparently, overspending is not an issue at the juncture. As stated in the MOF report, there was a Legislative allocation for Civil Servants Salary Adjustment which was not carried in the respective appropriations of the Agencies of government. It was a separate lump sum allocation within the overall budget made available during the spending process. Hence, Agencies were authorized to spend a total of $9 million above their respective budget ceilings for salary adjustments. Additionally, there was an allocation of US $27.83 million ($36.83 less $9 million for salary adjustments) for Other Institutions, Entities and General Other claims. Out of this amount, $20.86 million was spent – leaving a balance of $6.97 million allocated to other predetermined spending needs of government. Hence, there appears to be a total of US 15.97 million ($9 million plus $6.97 million) allocated to agencies of government during the spending process. This is all legitimate; since it was pre-approved by the Legislature. Hence, apparent overspending balances out with apparent under spending in designated areas. No need for alarm - in this instance.

The MOF figures seem flawed because the premise and methodology may be off track. Most of the revised appropriation figures produced by the Bureau of the Budget (see 2007/2008 budget published on the MOF website) are not in sync with those reflected in the Adjusted Appropriation of the MOF fiscal outturn report. Why should the Adjusted Appropriation figures reported by the Ministry of Finance not be in harmony with the National Budget figures transmitted by the Budget Bureau? In a case of doubts, who’s figures should we rely on? BOB or MOF? Who is legally authorized to provide expenditure estimates for Government? BOB or MOF? The statutes are clear.

There seems to be a serious capacity problem when –as reportedly revealed by a General Auditing Commission (GAC) source – unprocessed vouchers may have been considered as actual expenditures of an Agency of Government. What else has not been publicly reported? Aren’t there other Agencies with situations similar to that of the GAC.

It may be advisable for the Fiscal Outturn Report 2006/2007 to be officially recalled by the Minister of Finance without delay. Already, FPA has revealed that “the GAC is in the process of commencing audits with figures generated by the Ministry of Finance for government institutions and programs forming the basis of these audits.” Let us avoid another “Budget Soap Opera.”

In the process of national budget making – in Liberia, there is a key factor of synchronization of the process which produces harmony. Institutions must work together to make sure that the figures tie in. There are numerous professionals out there who are interested in analyzing the fiscal performance report and contributing to fiscal reform. Hence, they anxiously await a release of the actual figures to commence the process.
Contact: mrdempster@msn.com

© 2007 by The Perspective
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