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GAC stresses effective control, compliance at NRF

By Jonathan Browne

While the General Auditing Commission (GAC) grades the financial statements of the National Road Fund (NRF) as fair in all material respects, it however stresses that the NRF Management is responsible for maintenance of effective control measures and compliance with laws and regulations.

The GAC further explains that management is responsible for the preparation and fair presentation of the financial statements in accordance with International Public Sector Accounting Standards (IPSAS) Cash Basis, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether as a result of fraud or error.

The General Auditing Commission has conducted an audit of the National Road Fund for the Period July 1, 2019, to June 30, 2020.

“In preparing the financial statements, Management is responsible for assessing its ability to continue as a going concern, disclosing, as applicable, matters related to going concerns and using the going concern basis of accounting unless management either intends to cease operations or has no realistic alternative but to do so. The NRF Management is responsible for overseeing the Project’s financial reporting process”, Liberia’s Auditor General P. Garswa Jackson, Sr., writes in his report dated March 11, 2022, to the Manager of the National Road Fund Mr. Boniface D. Satu. 

On the other hand, AG Jackson notes that objectives of the General Auditing Commission during an audit are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error and to issue an auditor’s report that includes its opinion.

“Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISSAIs will always detect a material misstatement when it exists”, he cautions.

According to the Auditor General, misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

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However, the GAC audit draws specific attention to Table #3 of the NRF financial statements in which Management reported a total of US$22,212,538.00 as receivables due from petroleum importers for fuel levy charges, but observes a net variance of (US$6,164,455.01) between the receivables reported in the financial statements and the amount confirmed by petroleum importers.

“Due to the importers’ failure to fully confirm the accounts receivables in Table 3 of the financial statements, we were unable to satisfy ourselves as to the existence, completeness, and collectability of the account receivables”, the Commission reveals. 

It also notes that for the period under audit, the NRF Management did not disclose in the financial statements, commitments to contractors totaling US$6,100,508.38, adding that said outstanding commitment is an obligation against the total cash balance of US12,936,639.00 brought forward as at 30th June 2020.

“There is a restriction of US$6,100,508.38 brought forward on the closing cash balance reported in the financial statements. Our opinion is not qualified in respect of the above matters.”

But in response, the Manager of the NRF, Boniface D. Satu says he accepts responsibility for the integrity of the financial statements, the financial information they contain and their compliance with provisions of the Public Financial Management (PFM) Act of 2009.

In his official response to the audit, dated August 31, 2020, he explains that in preparing these Financial Statements, the most appropriate accounting policies have been consistently applied and supported by reasonable and prudent judgment and estimates, saying “To the best of my knowledge and belief, these Financial Statements agree with the books of accounts, which have been properly kept.”

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The New Dawn is Liberia’s Truly Independent Newspaper Published by Searchlight Communications Inc. Established on November 16, 2009, with its first hard copy publication on January 22, 2010. The office is located on UN Drive in Monrovia Liberia. The New Dawn is bilingual (both English & French).
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