Monrovia — Liberia’s domestic debt records are plagued with significant breaches and irregularities as the General Auditing Commission (GAC) has declared over US$678 million in vendor claims and arrears invalid. The findings expose serious weaknesses in the government’s financial oversight systems.
The comprehensive audit, covering the period from January 1, 1980, to December 31, 2024, reviewed 784 vendor claims and instruments valued at nearly US$771 million and L$5.06 billion. Of these, 442 claims worth US$678.8 million and L$4.8 billion–representing approximately 88 percent and 95 percent of claims in US and Liberian dollars respectively–were rejected.
The main reasons for rejection were the lack of original supporting documents and widespread non-compliance with financial regulations.
The report highlights systemic failures within the Ministry of Finance and Development Planning (MFDP) and its Debt Management Unit (DMU).
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The audit found that most invalid claims lacked essential documentation such as payment vouchers, invoices, contracts, delivery notes, and official acknowledgments. This absence undermines the legitimacy and accuracy of Liberia’s domestic debt figures, increasing the risk of fund misappropriation, duplicate payments, and inflated debt.
Further concerns arose with 77 vendor claims worth over US$105 million and L$1.7 million, which could not be verified due to missing or incomplete evidence. Additionally, the MFDP authorized payments exceeding US$216 million without proper validation documents including payment vouchers, checks, job completion certificates, or delivery notes, raising transparency issues.
The audit also criticized the MFDP for failing to conduct bank reconciliations on accounts used for domestic debt payments. Such reconciliations are essential for accuracy, fraud detection, and cash flow management.
Moreover, the Public Debt Management Procedures Manual was found to lack clear guidelines on key operational controls including debt reconciliation between ministries, validation after fiscal periods, mandatory reporting to government authorities, debt assessment and write-offs, and the definition of domestic debt consistent with international standards.
Weak internal controls and unclear procedures have resulted in widespread non-compliance with relevant laws and regulations. The audit highlighted irregularities such as non-approval of claims by responsible authorities, absence of physical verification of assets tied to claims, and risks of duplicate payments. These issues could significantly inflate the reported debt and expose public funds to misuse.
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To remedy these problems, the audit recommended that all claims above US$250,000 require approval by the Minister of Finance, Minister of Justice, and Governor of the Central Bank before being recorded.
It also called for physical verification of assets, strict retention of original documents, and implementation of a comprehensive electronic document management system to support record-keeping and auditing. Routine reconciliation of claims was urged to prevent invalid or duplicate entries.
In response, the MFDP acknowledged the audit’s findings and pledged to reconcile validated claims with its records to facilitate payment of legitimate debts.
However, the Ministry challenged the invalidation of 50 rollover instruments such as Treasury Bonds, Treasury Bills, and Promissory Notes, citing that interest servicing had begun on these instruments. The GAC rejected this argument, stating the Ministry failed to provide adequate supporting documentation such as permanent claim notes, official acknowledgments, loan agreements, approvals, and proof of disbursement.
The audit exposes Liberia’s vulnerabilities in domestic debt management spanning over four decades and underscores the urgent need for reforms to enhance accountability, safeguard public resources, and rebuild trust in government financial management. The General Auditing Commission confirmed it will continue monitoring the implementation of its recommendations to ensure compliance with relevant laws and strengthen Liberia’s debt management framework.
