Management Letter On the Ministry of Foreign Affairs Financial Statements For the Fiscal period ended June 30, 2016 Yusador S. Gaye, CPA, CGMA Auditor General, R. L. Monrovia, Liberia April 2019 Management Letter On the Ministry of Foreign Affairs Financial Statement For the Fiscal period ended June 30, 2016 Table of Contents 1 DETAILED FINDINGS AND RECOMMENDATIONS ........................................................6 1.1 Financial Issues ....................................................................................................6 1.1.1 Discrepancy in Financial Reporting ............................................................................. 6 1.1.2 Expenditure without Supporting Documents ............................................................. 7 1.1.3 Unusual Transaction .................................................................................................... 8 1.1.4 Procurement of Land ..................................................................................................11 1.1.5 Consultancy Contracts ................................................................................................13 1.1.6 Air tickets .....................................................................................................................14 1.1.7 Amendment to the Restated Biometric Passport Contract ......................................15 1.1.8 Payments made outside the Foreign Missions Project’s Scope ...............................16 1.1.9 Un-authorized Payment Vouchers .............................................................................17 1.1.10 Payments without evidence of approved policy .......................................................20 1.1.11 Unretired Travels Allowances .....................................................................................21 1.1.12 Bank Reconciliation .....................................................................................................23 1.2 Administrative Issues ....................................................................................... 24 1.2.1 Fixed Assets .................................................................................................................24 1.2.2 Payment vouchers not stamp PAID ...........................................................................25 1.2.3 Segregation of Duty ....................................................................................................25 1.2.4 Passport Division .........................................................................................................27 1.2.5 Training ........................................................................................................................27 1.2.6 Foreign Service Board .................................................................................................28 1.2.7 Approved Financial Manual ........................................................................................29 1.2.8 Budget Committee ......................................................................................................30 1.2.9 Fuel Distribution Policy ...............................................................................................30 1.2.10 Audit Committee..........................................................................................................31 1.2.11 Organization Chart ......................................................................................................32 1.2.12 Approved Human Resource Policy .............................................................................33 1.2.13 Strategic and Operational Plans .................................................................................34 1.2.14 Leases ..........................................................................................................................34 2 Promoting Accountability of Public Resources Management Letter On the Ministry of Foreign Affairs Financial Statement For the Fiscal period ended June 30, 2016 ACRONYMS USED Acronyms/Abbreviations/Symbol Meaning AC Audit Committee AG Auditor General BC Budget Committee BP Biometric Passports CB Cashbook Balance CBL Central Bank of Liberia CG Controller General COSO Committee of Sponsoring Organizations CPA Certified Public Accountant DMA Deputy Minister for Administration DMFA Deputy Minister for Foreign Affairs ECOWAS Economic Community Of West African States FMA Foreign Missions Account FMP Foreign Missions Project FO Finance Officer FS Financial Statements GoL Government of Liberia IA Internal Audit IAA Internal Audit Agency IAGB Internal Audit Governance Board IC Internal Control IPSAS International Public Sector Accounting Standards ISSAIs International Standard of Supreme Audit Institutions IT Information Technology LRA Liberia Revenue Authority MFDP Ministry of Finance Development Planning MIC Management Internal Control MoFA Ministry of Foreign Affairs MOJ Minister of Justice PA Project Account PD Passport Division PFM Public Financial Management PMT Project Management Team PPC Public Procurement Concessions PPCC Public Procurement Concessions Commission PV Payment Vouchers 3 Promoting Accountability of Public Resources Management Letter On the Ministry of Foreign Affairs Financial Statement For the Fiscal period ended June 30, 2016 April 11, 2019 Hon. Gbezohngar Findley Minister Ministry of Foreign Affairs Capitol Hill Monrovia, Liberia Dear Hon. Findley: Re: Audit of the Ministry of Foreign Affairs Financial Statements for the fiscal Period ended June 30, 2016. The Financial Statements of the Ministry of Foreign Affairs (MoFA) for the fiscal period ended June 30, 2016 are subject to audit by the Auditor General (AG) consistent with the Auditor General’s mandate as provided for under section 2.1.3 of the GAC Act of 2014 as well as in accordance with the Public Financial Management Act and Regulations of 2009. INTRODUCTION The audit of the MoFA financial statements for the fiscal period ended June 30, 2016 has been completed; the purpose of this letter is to bring to your attention the findings that were revealed during the conduct of the audit. SCOPE AND DETERMINATION OF RESPONSIBILITY The audit was conducted in accordance with the International Standards of Supreme Audit Institutions (ISSAIs). These standards require that the audit is planned and performed so as to obtain reasonable assurance that, in all material respects, fair presentation is achieved in the annual financial statements. An audit includes: Examination on a test basis of evidence supporting the amounts and disclosures in the financial statements; Assessment of the accounting principles used and significant estimates made by management; and Evaluation of the overall financial statement presentation. An audit also includes an examination, on a test basis, of evidence supporting compliance in all material respects with the relevant laws and regulations which came to our attention and are applicable to financial matters. The matters mentioned in this letter are therefore those that were identified through tests considered necessary for the purpose of the audit and it is possible that there might be other matters and/or weaknesses that were not identified. 4 Promoting Accountability of Public Resources Management Letter On the Ministry of Foreign Affairs Financial Statement For the Fiscal period ended June 30, 2016 The financial statements, maintenance of effective control measures and compliance with laws and regulations are the responsibility of the Management of the Ministry of Foreign Affairs. Our responsibility is to express our opinion on these financial statements. Management Personnel The Ministry of Foreign Affairs has the following personnel who handled the administrative and financial affairs of the institution for the period under audit. Table: 1 Key Management Personnel of the MoFA Name Title / Position Held Period 1. Hon. Marjon V. Kamara Foreign Minister 2015/ 2016 2. Hon. Augustine Kpehe Ngafuan Foreign Minister 2015/ 2016 3. Hon. B. Elias Shoniyin Deputy Minister/IC&EI 2015/ 2016 4. Hon. B. Elias Shoniyin Deputy Minister/ Foreign Affairs 2015/ 2016 5. Dr. Wade Elliott-Brownell Deputy Minister/ Admin. 2015/ 2016 6. Cllr. Boakai Kanneh Deputy Minister/ Legal Affairs 2015/ 2016 7. James Quiqui Comptroller 2015/ 2016 8. Jervis A. Witherspoon Chief of Protocol 2015/ 2016 APPRECIATION We would like to express our appreciation for the courtesy extended and assistance rendered by the staff of the Ministry of Foreign Affairs Team during the conduct of the audit. Yours Faithfully, 5 Promoting Accountability of Public Resources Management Letter On the Ministry of Foreign Affairs Financial Statement For the Fiscal period ended June 30, 2016 1 DETAILED FINDINGS AND RECOMMENDATIONS 1.1 Financial Issues 1.1.1 Discrepancy in Financial Reporting Observation 1.1.1.1 Section 36(1) of the PFM Act of 2009 states that “It is a general responsibility under this Act for all government officials handling public financial transactions to ensure that financial information is reported in a timely, comprehensive, and accurate manner, in the manner prescribed in this Act, under its regulations, and in instructions issued by the Minister”. 1.1.1.2 During the period under audit, we observed that the Management of the Ministry of Foreign Affairs reported in the financial statements total expenditure of US$901,237.90 for goods and services, whereas the total amount recorded in the general ledger or final trial balance for goods and