MONROVIA – FrontPageAfrica has obtained a copy of a memo sent to Mr. Thomas Doe Nah, Commissioner General of the Liberia Revenue Authority (LRA) informing him of how millions of millions of United States and Liberia dollars paid as taxes have not been reflecting in the Consolidated General Revenue Account at the Central Bank of Liberia (CGRA).
The audit was conducted on the Direct Transfer Payments between the commercial banks and the Government of Liberia’s (GOL) Consolidated General Revenue Account (CGRA) at the Central Bank of Liberia covering the years 2017, 2018 and 2019.
Mr. Albert Peters, Assistant Commissioner for Audit, Administrative & Technical Affairs at the LRA spearheaded the audit along with the Internal Audit Agency (IAA), FrontPageAfrica gathered.
FrontPageAfrica has not been able to establish Mrs. Gifty Lama, who was discovered dead along with Mr. Peters in the back seat of his car during the early morning hours of October 2, 2020, link to the audit.
However, Mrs. Lama and Mr. Peters though working in different departments maintained an intimate friendship which both families have described as a “father-daughter relationship. She served as Manager for Taxpayers Service at the LRA.
Mr. Emmanuel Nyeswa who headed the IAA also died mysteriously eight days after their deaths. He reportedly fell from the first floor of his house after hanging out with some friends on Friday, October 9 into Saturday, October 10.
The auditors were tracing millions of United States and Liberian dollars in taxes that the Central Bank of Liberia (CBL) had reportedly failed to sweep into the government’s general consolidated account as per standard operating procedures.
The Internal Audit performed the audit for purposes of ascertaining the accuracy, completeness, reliability and validity of amount of taxes commercial banks collected and remitted to government’s CGRA at the CBL in accordance with memorandum of understanding.
Internal Audit planned and performed the audit to obtain sufficient and appropriate evidence to determine whether the amount of taxes remitted by commercial banks to GOL’s CGRA at CBL accurately and completely reflects the true and fair amount of taxes collected by the commercial banks for the period under audit.
The Auditors obtained annual bank statements from commercial banks for the years 2017, 2018 and 2019 and CBL swift confirmation reports for all remittances made by commercial banks to the Central Bank of Liberia for the same period. The Auditors analyzed and reviewed all the bank statements for deposits received from taxpayers and remittances made to the Central Bank of Liberia. The Auditors also interviewed key management staff of commercial banks and the CBL for purposes of corroborating information gathered from documents and records of revenue transactions performed during the period under audit.
The audit discovered that over the three-year period US$17,580,280.37 and L$2,346,657,844 of taxes paid into transitory accounts at various commercial banks were not remitted to the consolidated general account at the Central Bank of Liberia.
Based on the analysis and evolution of commercial banks’ statements, CBL’s swift confirmation reports and comparison with revenue data in LRA’s Tax Administration System (TAS) for the period under audit, the Auditors identified the following issues:
For the year 2017, revenue transactions amounting to US$2,043,813.75 and LD$327,130,712.16 on commercial banks’ statements were not captured in the 2017 CBL swift confirmation reports and therefore not reflected in the government’s Consolidated General Revenue Account.
In 2018 also, revenue transactions amounting to US$8,357,651.67 and LD$1,131,749,625.77 on commercial banks’ statements were not captured in the 2018 CBL swift confirmation reports and therefore not reflected in the government’s CGRA.
And in 2019, revenue transactions amounting to US$14,700,701.70 and LD$887,777,506.07 on commercial banks’ statements were not captured in the 2019 CBL swift confirmation reports and therefore not reflected in GOL’s CGRA.
Swift confirmation report is a confirmation report prepared by the beneficiary bank (CBL in this case) that funds have reached the beneficiary account.
“The Central Bank of Liberia and commercial banks need to provide explanations for these irregularities (amounts reflected on commercial banks’ statements as remittances to GOL’s Consolidated Revenue Account at CBL but not reflected in CBL’s Swift Confirmation Reports and GOL’s CGRA) for purposes of accurately, completely and reliably accounting for taxes collected on behalf of Government of Liberia in accordance with memorandum of understanding,” the Memo sent by Mr. James Kerkulah, Chief Audit Executive noted.
What the Experts Think
GoL entered an MOU with commercial banks to collect taxes on her behalf to remit same to its CGRA at CBL. The commercial banks statements reviewed by the auditors show that these revenues were remitted but the CBL statements at the receiving end show no confirmation of receipt via swift nor do the CGRA reflects these receipts.
This could possibly mean that the commercial banks did their part and fully disclosed these transactions via their statements but their Government counterpart (CBL) statements either omitted these transactions or have other reasons for which they didn’t reflect them.
The inquiry in the memo is seeking full disclosure on these transactions as they tend to breach the double-entry principle which requires that debit on one end should reflect a corresponding credit on the other.
A financial expert who opined on the matter said while it is possible the CBL may not have reflected these amounts in the CGRA, it is also possible that tellers at the commercial banks may have been canceling payment receipts in the system and taking the cash or transferring same into private accounts.
However,, the expert who once worked for the LRA said for such to happen, some individuals at the CBL including the Director of Banking, Deputy Director for Banking, the Analyst, and the person responsible for barfing may have connived with tellers at the bank.
The expert added that there is also the possibility of the commercial banks reflecting the amounts on their statements just for audit and accountability purposes while the actual money is not swept to the CBL.
Central Bank and commercial banks tellers are given access by LRA to use the Tax Administration System (TAS) for the collection of Government Revenue while all commercial banks operating revenue transitory accounts are to sweep to the government’s revenue accounts at the CBL as per the procedures governing transitory accounts.
A transitory account is one where funds are kept for a day or two before the money moves to the account of the real beneficiary.
The Transitory Revenue Accounts at the commercial banks are used for the collection of fees from activities under the statutory mandates of the various ministries and agencies and is covered under a memorandum of understanding from the Ministry of Finance, for the payment of inland taxes and customs duties.
Commercial banks may delay in sweeping collected revenue to the General Revenue Account which the CBL would later transfer to the Consolidated General Revenue Account.
It is also likely that a commercial bank may sweep and CBL fail to credit the government revenue account or the CBL may hold the collection and credit government revenue account several days later.
Under the Ministry of Finance and Development Planning Administrative Regulation NO. PFMA-01/MOF/R/02 2010, all funds collected through the Transitory Revenue Accounts on a certain business day shall be swept into the General Revenue Account at the CBL by the commercial bank on the “next clearing day” by check, debit instruction or by electronic payments. The sweep shall cover deposits made for the certain business day(s) until the next “clearing day”. The commercial bank may also credit the offshore account of the CBL in settlement of the amounts due provided that all current balances at the CBL are insufficient to settle amounts due. The swift acknowledgment of the transfer on the stipulated sweep shall be required. For electronic transfers, all transfer related charges shall be on account of the commercial banks.
The regulations also state that if any Commercial Bank fails to submit the agreed report on the first clearing day of the week, and that failure continues for forty-eight hours after the report due date, the defaulting Commercial Bank shall pay a penalty of L$50,000 for each day of default starting from the original due date. Such amount shall be debited to the Commercial Bank’s current account by the CBL upon written notification by the MOF and shall be credited to the General Revenue Account. Story Culled from FPA/Lennart Dodoo
Main Photo: Thomas Doe Nah, Revenue Authority Director