Tuesday, June 22, 2010

Response to GAC’s Allegations of Financial Strangulation

Response to GAC’s Allegations of Financial Strangulation
Source: http://www.liberianforum.com/Press-Releases/Response-to-GACs-Allegations-of-Financial-Strangulation.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+liberianforum%2FQQsQ+%28LiberianForum.Com%29&utm_content=Yahoo%21+Mail

Written by Ministry of Finance

Saturday, 19 June 2010

The Ministry of Finance strongly rejects as false and misleading media reports that the General Auditing Commission was being financially strangulated.

The report claims that the Ministry of Finance has taken US$432,000 from GAC’s FY2009/2010 appropriation.

The truth of the matter is that the Government’s financial position during the current fiscal year has been characterized by uncertainties in revenue flows. The FY2009/2010 Budget contained some inherent risks from the time the budget was approved in mid 2009. In August the assessed revenue risk was US$35.9 million or 9.6% of the US$371,9 million budget. In October the risk has escalated to US$58.5 million or 15.7% October. Consequently, an equal amount was frozen from the expenditure side. The risk profile as we go towards the end of the fiscal year has further deteriorated, necessitating further cuts across government.

While the overall expenditure cut contained in the budget risk management strategy concluded in October 2009 was 15.7%, some agencies were treated with special preferences compared to others. The GAC happened to be one of such agencies that were prioritized. At the onset, US$432,000 was frozen out of the GAC’s US$3.7 million, but US$200,000 was returned by way of budgetary transfers.

Thus the net amount frozen out of GAC’s budget was US$232,000 or 6.2%, which is far smaller compared to other Ministries and Agencies of Government. Ministry of Public Works’ budget was reduced by 18%, Ministry of Agriculture 17.1%, Ministry of Finance 15.3%, Governance Commission 13%, Judiciary 12.5%, Ministry of Defense 10% and Liberia Anti-Corruption Commission 6.3%.

It is therefore clear that even when the rest of Government was sharing the burden imposed by low revenue performance, the GAC was given the priority while others experienced more severe budgetary reductions. That the GAC authorities could attempt to mislead the public in the face of these glaring reality, which they are very much aware of, is disingenuous to say the least.

The Ministry of Finance therefore detests and considers as infantile the GAC’s continuing habit of provoking unnecessary controversies by constantly preferring to discuss financial management issues in the press just for the sake of creating controversies where they don’t exist. The only immediate gain for the perpetrators of such acts is to invoke undeserved sympathies and public favor. In spite of more stringent measures, other agencies of government are proceeding with the judicious management of their available resources and the GAC should do likewise for prudent financial management is the key deterrent to fraud, waste and abuse.

Nevertheless, the Ministry of Finance will not be drawn into unnecessary distractions as it has more urgent and pressing national priorities to deal with.

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Everyone is a genius. But if you judge a fish on its ability to climb a tree, it will live its whole life believing that it is stupid. – A Einstein

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