The U.S. State Department’s 2021 fiscal transparency report on Liberia has recommended several steps to the government here, to improving financial transparency in the public sector, including a need to make budget documents publicly available within a reasonable period of time.https://www.state.gov/reports/2021-fiscal-transparency-report/
Liberia flunk the U.S. State Department 2021 Fiscal Transparency report, released recently in Washington, D.C.
The report further recommends, among others, that the Government of Liberia makes state-owned enterprise debt publicly available, ensures the budget is substantially complete and off-budget accounts are subject to adequate audit and oversight.
It suggests producing and publishing a supplemental budget when actual revenues and expenditures do not correspond to those in the enacted budget and ensures the supreme audit institution meets international standards of independence.
The U.S. suggests making supreme audit institution audit reports publicly available within a reasonable period of time, and that ensuring the criteria and procedures used to award natural resource extraction contracts and licenses are consistent with the requirements set by law or regulation, and making basic information on natural resource extraction awards publicly available.
The report notes that during the review period, the Government of Liberia did not make its budget documents, including the executive budget proposal, enacted budget, and end-of-year report, publicly available in a reasonable period of time.
It says information on debt obligations, with the exception of state-owned enterprise debt, was widely and easily accessible to the general public, including online, but foreign assistance receipts, largely project-based, were neither adequately captured in the budget nor subject to the same audit and domestic oversight as other budget items.
“Significant deviations between projected and actual revenues during the review period undercut the reliability of budget information. The supreme audit institution did not meet international standards of independence and did not make its audit reports publicly available within a reasonable period of time.”
The State Department says the criteria and procedures for awarding natural resource extraction licenses and contracts were outlined in law, although there have been reports of corruption and inconsistent application of regulations in practice, saying, basic information on some, but not all, natural resource extraction awards were publicly available.
The report found that 74 of the 141 governments reviewed during the period met minimum requirements of fiscal transparency, while seventeen of the 67 governments that did not meet minimum requirements made significant progress.
“Fiscal transparency is a critical element of effective public financial management, helps build private market confidence, and underpins economic sustainability”, it says, stressing that It fosters greater government accountability by providing a window into government budgets for citizens, helping citizens hold their leadership accountable, and facilitating better-informed public debate.
Congressionally mandated annual fiscal transparency reviews provide opportunities to engage in dialogue with governments on the importance of fiscal transparency, particularly important given the need for significant economic, health, and social spending to offset the shocks of COVID-19.
It describes the minimum requirements of fiscal transparency, reviews 141 governments, most of which were identified as recipients of U.S. assistance in the 2014 Fiscal Transparency Report, and further assesses governments that did not meet the minimum fiscal transparency requirements during the review period of January 1 – December 31, 2020.
The report also indicates whether governments that did not meet those requirements made significant progress to publicly disclose national budget documentation, contracts, and licenses during the review period and that the Department of State evaluated the public availability, substantial completeness, and reliability of budget documents, as well as the transparency of processes for awarding government contracts and licenses.
It says beginning with this review period, if a government has a sovereign wealth fund, it must disclose its source of funding and general approach to withdrawals from the fund.
“Fiscal transparency informs citizens how government revenues and tax revenues are spent and is a critical element of effective public financial management. Transparency provides citizens a window into government budgets and helps hold governments accountable. It helps build market confidence and sustainability. The Congressionally mandated Fiscal Transparency Report (FTR) is a tool to identify deficiencies and support needed changes”, the report emphasizes. Report