…Accuses GAC of Data Error
The National Social Security
and Welfare Corporation (NASSCORP) in Liberia has registered strong reservations against the unprofessional, unethical and irresponsible conduct of the audit conducted by the General Auditing Commission (GAC) at the corporation.
Presenting for the first time, its official response which detailed findings of the audit report to members of the National Legislature, last Friday, at a public hearing conducted by the House Standing Committee on Public Accounts and Expenditure, NASSCORP Director-General, Francis M. Carbah said the refusal of Auditor General John S. Morlu to separate the audit periods under different administrations, creates the impression that all the transactions took place during the current administration.
The NASSCORP Boss pointed out that the misrepresentation of USD1,417,166.51 which the audit report termed as “Financial Irregularities and malpractices”, represents disbursement made over several years by various administrations but the audit report recklessly presented the impression that this management is responsible to account for this amount.
Mr. Carbah intimated that the current management took over the affairs of the Corporation on February 3, 2006 and that prior to commencing the audit, the Auditor general defined the audit period from July 1, 2005 through June 30, 2007.
Strangely, he added, the audit period expended further back and included figures for transactions that occurred as far back as 2003.
The Director General said the intent and purpose of the GAC obviously was to distort the fact, misrepresent and mischaracterize this Administration and the Board and create a deliberate false impression.
The NASSCORP Director-General said for what the GAC alleges as irregular and unaccounted expenditure which totaled US$1,417,166.51, the sum of US$1,010,896.51 is for transactions which occurred prior to February 3, 2006, when the Board and management assumed the mantle of authority of NASSCORP, therefore, the management and Board bear no responsibility for these sums of money nor are they putting up and defense for activities that took place under previous administrations and boards.
The Director-General told members of the National Legislature that they have come to present to the august body one by one, the detailed figures of the USD406,270.00 which consists of transaction for the period under review.
The Director-General clarifies a stance in the GAC audit on Board remuneration paid to the Director-General in the amount of US$10,650 from February 2006 to June 2007 for which the GAC termed as irregular and should be refunded.
The NASSCORP boss drew the attention of the Legislators to Section 89.4 of the People’s Redemption Council (PRC) Decree #14, which states, “The Director-General shall receive a salary to be established by the Board of Directors subject to the approval of the President. The other members of the Board, in their capacities as such, shall not receive salaries but receive stipend for each meeting attended and all the expenses incurred in attending duties of the Corporation”
He said the PRC Decree also recognizes the Director-General as member of the Board, therefore, the phrase “The other members of the Board” does not excludes the Director-General, and as such, he is entitled to Board remuneration.
He regretted the stance of the Auditor General to renounce stipend and sitting fees paid to the Board of Director in the tune of US$106, 900 for the period February 2006 to June 2007.
He said the Auditor General contradicted himself, because after he had quoted Section 89.4 of the PRC Decree in the very audit report, he again declared as illegal the stipend and sitting fee paid to the Board members, something which the NASSCORP Boss noted is a clear misrepresentation of Section 89.4 of PRC Decree #14 and the Auditor General should rescind his stance.
On the issue of US$93,917.00 paid as per diem for foreign travel over a two-year period, the Director-General said, it was done in line with the 1988 General Regulations of NASSCORP which authorizes the Board to establish the financial policies and approve the Corporation’s budget, which provides for planned expenditure including travel expenses.
The National Social Security and Welfare Corporation management has also expressed serious concern about the misrepresentation of the Corporation’s Regulations by the General Auditing Commission (GAC) and willfully accusing the management of excessive administrative expenditure.
The audit report of the GAC contended that the Management and Board of Directors exceeded expenditure limits imposed by NASSCORP Regulations, as well as exceeded the Budget for the fiscal period 2006/2007. The Auditor General based his accusation on Regulation 61, paragraph 1, of the General Regulations of NASSCORP which places the limit of Administrative Expense at 1.2% of total insurable earning.
Addressing member of the National Legislature at a public hearing conducted by the House Standing Committee on Public Accounts and Expenditure, NASSCORP Director General Francis M. Carbah said, contrary to the assertion of the Auditor General, the management did not exceed the expenditure limit imposed by the General Regulation of 1988.
Director General Carbah said the Auditor General refers to Regulation 61, paragraph 1, of the Regulations which places the limit of Administrative Expenses at 1.2% of total insurable earning, but regretted that the Auditor General for the purpose of misleading the Liberian people, deliberately and willfully employed a fraction of the Regulation 61 to explain the intent and purpose of the entire Regulation, and cleverly omitted Section 2 of the Regulation 61 to suit his own purpose.
He intimated that Section 2 of the regulations states that the administrative expenditure incurred under paragraph 1 shall be distributed among the National Pension Fund and the Employment Injury Fund in ratio of two-thirds and one-third respectively. Provided that the Board may, during the first two years of operation of part II of the Decree, authorize such relaxation in paragraph 1 or paragraph 2 or both as it may deem necessary.
He explained that the management communicated to the Auditor General on June 6, 2006 outlining reasons regarding the decision of the Board to relax the limit but he pays no heel to the explanations.
The Board among others , according to the Director General, took the decision to relax limit on administrative expenditure, because the Social Security Contribution base, the denominator and key determinant of the limit which the Auditor General referred to, has undeniably and obviously dwindled to below 50% of the level in 1988 when the standard was adopted for an economy that was flourishing at the time and that the decline in the contribution base is owing to the prevailing state of depressed economic activities and very high unemployment in the country.
The Board also made mention of the new sets of cost variables into the general operating environment in Liberia since the civil crisis, that is self-power generation and the associated cost of fuel, maintenance, additional labor which were not there in 1988 that has increased the cost of administering any entity in our country.
Filed under: Uncategorized
