New Democrat (Monrovia)
Paul Yeenie Harry
2 May 2011
An audit report in possession of this paper reveals that the Government’s duty free privilege granted to certain institutions, profit and non-for-profit, has been widely abused, with the Liberian people losing millions of US dollars to a lot of institutions, including hugely profitable Lebanese businesses, UNMIL and GOL.
The General Auditing Commission (GAC) audit report – which covered the 2006/2007, 2007/2008, and 2008/2009 financial periods, and which was released last week – indicates that the Ministry of Finance’s Duty Free program was characterized by financial irregularities, control deficiencies, including failure to exercise internal controls, failure to follow the provisions of the Revenue Code of 2000, etc.
The Report states: “The Duty Free program administered by the Ministry of Finance was marred with irregularities. These irregularities occurred because there was a complete lack of implementation of the internal policy on the Duty Free and the provisions contained in the Revenue Code of 2000. Internal controls were also generally lacking, thus casting serious doubts on the effective execution of the Duty Free program and the reliability of financial information derived from Duty Free transactions.”
The report continues: “During my examination of documents, I observed that there were a number of application forms for duty free granted to various categories of beneficiaries with the total CIF value of US$14,532,024.69 and a waiver of US$1,166357.80 which were not recorded in the report for the period under review. This was due to failure by the then Director of Duty Free Felix T. Nagbe to supervise and enforce internal control procedures for the 2006-2009 fiscal years. I could not therefore ascertain the completeness of application forms provided during the audit.
“In addition, I noted cases where there were variances between the Cost, Insurance and Freight (CIF) value on the duty free entries and the duty free monthly reports. The value of over and understatements amounted to US$99,606.30 and ten million six hundred six thousand seven hundred twelve dollars two cents (10,606,712.02) respectively.
“I observed instances where duty free was granted to twenty- one (21) Government Ministries and Agencies in the total amount of US$437,879.50 without some or all of the supporting documents.
“In addition, I noted that application for duty free from UNMIL were not signed and stamped With single unique stamp to indicate that they had been officially authorized by the mission to apply for duty free. The duty free granted on the basis of such application forms from UNMIL amounted to US$681,298.91
“Fifteen (15) International NGOs were granted duty free without evidence of some or all of the documents required. The value of the duty waived in this case amounted to US$110,780.36.
“Similarly, sixteen (16) medical institutions were granted duty free without evidence of some or all of the documents required. The value of the duty waived in the case amounted to US$63,917.23.
“My review of documents established that duty free was being awarded by the former Director and the Commissioner of Customs and excise Mr. Felix S.T. Nagbe and G. Alphonso Gaye respectively, without reference to the items as per the contract or concession agreement. I noted instances where the items for which duty free was awarded differed with the approved list in the contract or concession agreement. Duty Free totaling US$343,034.70 was granted to Sethi Brothers on materials that were not stated in the agreement to benefit from duty free privilege.
Overall, both financial and administrative activities undertaken by the Duty Free Section Management during the period under review were characterized by financial irregularities and control deficiencies. The irregularities noted amounted to US$3,199,980.79.”
The audit document reveals that during the entire period (2006-2009), the total duty waived, as reported by the Duty Free Division at the Ministry of Finance, was US$80,858,247.93 – US$5,918,080.00 in 2006, US$23,801,138.39 in 2007, US$2,944,997.60 in 2008 and US$48,194,031.94 in 2009.
The two directors of the Duty Free Division during the period under review were Felix Nagbe, May 2006 – November 2009; and Ms. Ameria Sangbe, December 2009 – present.
Meanwhile, The GAC, through its outgoing Auditing General John Morlu, has recommended the restitution of the funds lost in the process from those playing greater roles in the administration of the Duty Free Division.
The Report recommends: “The former Director of Duty Free Felix T. Nagbe should be made to account for the duty waived in the amount of US$ US$1,166,357.80 that was not reported on the duty free report for the period under review. This amount represents a material loss to the Government of Liberia.
‘The former Head of the Duty Free Section, Felix T. Nagbe and former Commissioner of Customs and Excise G. Alphonso Gaye should be made to restitute US$ US$12,996.05 while Felix Nagbe and Decontee King Sackie should be made to restitute US$75,323.53, as these local NGOs granted duty free did not meet the criteria but were granted duty free.
“The former Director Felix T. Nagbe, and the former Commissioner of Customs and Excise G. Alphonso Gaye should be made to restitute US$437,879.50, as these 21 Government Ministries and Agencies granted duty free did not meet the criteria but were granted duty
free.
“The former Director Felix T. Nagbe, of the Duty Free Section and former Commissioner of Customs and Excise Alphonso Gaye should be made to restitute US$292,530.26, representing duty free granted outside of the policy.
“The former Director Felix T. Nagbe and former Director of Customs and Excise Mr. Alphonso Gaye should be made to restitute for US$69,352.04 while Felix T. Nagbe and Mrs. Decontee King Sackie the Commissioner of Customs and Excise should be made to restitute US$41,428.32, as the 15 International Non-Governmental Organizations granted duty free did not meet the criteria but were granted duty free.
“The former Director Felix T. Nagbe and former Commissioner of Customs and Excise Mr. Alphonso Gaye should be made to restitute US$63,917.23 as the 16 medical institutions granted duty free did not meet the criteria but were granted duty free.
“Director Felix T. Nagbe, the former Head of the Duty Free Section and former Commissioner of Customs and Excise Mr. G. Alphonso Gaye should be made to restitute US$109,887.94, as the 19 Companies and Concessions granted duty free did not meet the criteria but were granted duty free.
“Director Felix T. Nagbe, the former Head of the Duty Free Section and the former Commission of Customs and Excise Mr. Alphonso Gaye should be made to restitute US$40,563.48, as the 17 educational institutions granted duty free did not meet the criteria but were granted duty free.
“Former Duty Free Director Felix T. Nagbe and former Commissioner of Customs Alphonso Gaye should be made to restitute US$343,034.70 into Government Revenue Account. As noted the duty free privilege in the tune of US$343,034.70 granted to Sethi Brother by Felix T. Nagbe and Commissioner G. Alphonso Gaye was unjustifiable as these were materials not stated in the agreement that needed not to be covered under the Duty Free window granted Sethi Brothers. Former Director Felix T. Nagbe of the Duty Free Section of the Ministry of Finance and former Commissioner Alphonso Gaye, Bureau of Customs and Excise should be sanctioned by the Ministry of Finance for granting Duty Free to Sethi Brothers that was not warranted as per the agreement.”
In the midst of continuous reports and revelations of corruption in the Sirleaf-led government, it’s not known how the Liberian people and their government, whose resources have reportedly been misused, misapplied, misappropriated and so forth, will react to the latest audit report.
Our investigation continues.
AllAfrica – All the Time
Visit link:
Duty Free Jamboree