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US$2.4M in Mop-up Money Questionable, GAC Report Reveals
By David A. Yates – May 17, 201946501
According to the GAC report, the TEMT, headed by Tweah (left) and the CBL, headed by Patray (right) did not provide evidence of the authorization to re-infuse the mopped-up Liberian dollars into the economy.
“Mopped-up LRD re-infused into market via commercial banks,” Tweah told GAC
By David A. Yates and Robin Dopoe
The General Auditing Commission’s forensic investigation has revealed that US$2,378,187.00 has not been properly accounted for during the US$25 million Mop-Up exercise conducted by the country’s Technical Economic Management Team (TEMT).
Meanwhile, President George Manneh Weah yesterday received the General Auditing Commission’s report into the expenditure of US$25 Million, which was intended to mop up excess Liberian dollars from the market.
According to a press release from the Executive Mansion, the report is currently under review by the President for further actions in keeping with the findings.
The GAC report on the controversial mop-up exercise under the signature of Auditor General, Yusador Gaye, revealed that US$491,769.00 was spent on 15 entities, which the Central Bank of Liberia (CBL) claimed to have participated in the mop-up exercise; however, those entities denied participation in the process.
In addition, the report said that, per CBL records, 27 entities received US$702,680.00 during the Mop-up exercise, but none of them were registered as per document review from the Liberia business registry records.
The report also said that 52 entities, per the CBL record, received US$1,092,292.00 but did not answer or reply to telephone calls or text messages from GAC auditors.
Further, the GAC report explained that 8 entities that received US$163,446.00 during the mop-up exercise, per CBL records, were not in operation during the field visit.
Table-1_Entities-With-Exceptions
The Central Bank of Liberia is part of the TEMT, which is headed by Finance Minister Samuel D. Tweah, Jr. and Nathaniel Patray. The TEMT was ordered by President George Manneh Weah in July 2018 to carry out the exercise.
However, the Kroll Associates Incorporated report noted gross discrepancies and called for ‘further understanding’ of how the mop-up exercise was conducted. The Presidential Investigative Team (PIT) report also highlighted gross discrepancies in the handling of the same mop-up exercise and went even further by saying the implementation of the exercise bordered on criminality.
The GAC report further said while authorities of CBL on July 19, 2018 approved the establishment of a special escrow account to hold mopped-up Liberian dollars; there was no corresponding United States Dollars Account opened to hold the US$25 Million to be drawn from the International Foreign Exchange Reserve Account for the purpose of the Mop-up Exercise.
“GAC did not note any transaction with narrative on the International Foreign Exchange Reserve Account held with the Federal Bank of New York that is related to the US$25 million Mop-up Exercise.
“In a letter dated April 22, 2019 from Executive Governor Nathaniel R. Patray, III revealed that it was the CBL Operational Fund used for the US$25 million mop-up exercise,” the GAC said. “The Chairman of TEMT, Minister Samuel D. Tweah, Jr, indicated that TEMT did not issue the CBL a written instruction for the Mop-Up Exercise; rather, the Mop-up Strategy was authorized by the TEMT.”
GAC report also noted that the US$15 million and US$2 million used for direct mop-up and auction, respectively, were traced to the CBL operational vault account.
The GAC report also explained that Minister Tweah indicated in his documented interview questionnaire that TEMT authorized the CBL to re-infuse the Mopped-Up Liberian Dollars into the market through the commercial banks.
However, Madam Gaye said the TEMT and the CBL did not provide evidence of the authorization to re-infuse the mopped-up Liberian dollars into the economy.
“The total of US$15 Million reported by the CBL as the amount used for the Mop-up Exercise was drawn from the CBL’s Operational Vault Account instead of the International Foreign Reserve Account as per the MOU.
“The money issued from the vault daily and disbursed to beneficiaries from the bank’s United States Dollars operational vault was not posted to the bank’s accounting system in real time. For example, money taken from the vault between the periods July 17 – 31, 2018 was not posted to the vault until August 1, 2018 in lump sum amounts. The lump sum amounts posted were without supporting schedules,” Madam Gaye explained.
The GAC report further noted that all pre-numbered cash issue notes used to record cash supplied to head teller for onward disbursement to team leaders were not processed to the vault account.
In addition, the report revealed that all pre-numbered cash return notes for United States Dollars not sold for a given day were not processed to the vault.
“Teams one, two, three, four and five were deployed in the field and their payment records reconciled with the cash officer vault record. However, team six, stationed at the CBL payment records, did not reconcile with the cash officer vault records. There was a variance of US$1,466,783.00 between the summary list of beneficiaries and the detailed report per beneficiaries prepared and submitted by the CBL,” the GAC reported.
The report said: “Except for three (3) beneficiaries with a total amount of US$2,507,380.00, no receipts were issued to the total number of beneficiaries contacted and interviewed during our field verification.
The report also noted that there was a variance of US$ 1,839.529.54 between the amounts sold per the summary report provided by the CBL for beneficiaries and the amounts actually confirmed by the beneficiary.
“Eighty-nine (89) beneficiaries with total amount of US$5,670,880.00 could not confirm the amounts in United States Dollars (US$) transacted with the CBL,” the GAC said.
The GAC report added that Governor Patray was unable to provide document claiming that the CBL in the past engaged in the occasional uses of direct mop-up exercise as a non-conventional monetary policy strategy or tool to reduce currency outside the banking system with the intention of reducing the pressure on the Liberian Dollar value.
“Team leaders interviewed informed us that during the US$25 million Mop-up Exercise, money disbursed to beneficiaries was taken into the field in hired vehicles except for team six,” the GAC report said. “There was also a variance of L$108,928,788.37 between the amounts in the summary Liberian Dollar Report per beneficiary presented by the CBL and the amount confirmed by the beneficiaries.”
The GAC report also noted that 109 beneficiaries could not confirm the amount of L$880,317,820.03 transacted with the CBL.
“Two transactions with the total amount of L$1,064,000.00 purchased from a business (PECEE Business) and a bureau (The Empowerment FXB) were without the necessary supporting documents such as pay-in-slips (deposit slips), cash request and returned slips to support the transactions,” the GAC report added.
Issues of financial malpractice have dogged the Weah administration of late, with donor countries and other stakeholders including the United Nations and the World Bank, calling on the government to properly account for or restitute monies withdrawn and misappropriated.
