I. Budget reliability
Scores by Dimension
Overall Indicator Score
1. Aggregate expenditure outturn
B
Notes:
1.1 Aggregate expenditure outturn
B
Notes:
Aggregate expenditure outturn was between 90 and 110 percent of the approved aggregate expenditures in two of the last three fiscal years (2016/17 and 2018/19).
2. Expenditure composition outturn
D+
Notes:
2.1 Expenditure composition outturn by function
C
Notes:
Variance in expenditure composition by function was less than 15 percent in all three years, but it was more than 10 percent in two of the last fiscal years (2016/17 and 2018/19).
2.2 Expenditure composition outturn by economic type
D
Notes:
Variance in expenditure composition by economic type exceeded 15 percent for each fiscal year.
2.3 Expenditure from contingency reserves
A
Notes:
The average level of expenditure charged directly to the Contingency Fund was less than 1 percent of the original budget.
Notes:
3.1 Aggregate revenue outturn
D
Notes:
Actual revenues were less than 92 percent of budgeted revenues in 2017/18 and 2018/19.
3.2 Revenue composition outturn
C
Notes:
Variance in revenue composition was more than 10 percent in all three years.
II. Transparency of public finances
Scores by Dimension
Overall Indicator Score
4. Budget classification
C
Notes:
4.1 Budget classification
C
Notes:
Budget formulation, execution, and reporting are based on administrative and economic classifications comparable with GFS standards.
Notes:
5.1 Budget documentation
B
Notes:
Budget documentation fulfils all required information benchmarks except for: (i) financial assets; (ii) summary information of fiscal risks; (iii) explanation of budget implications of new policy initiatives; and (iv) quantification of tax expenditures.
6. Central government operations outside financial reports
D+
Notes:
6.1 Expenditure outside financial reports
D
Notes:
As donor-funded expenditures are not reported in annual financial statements, more than 10 percent of budget expenditures are not included in annual financial statements of the Consolidated Fund Account.
6.2 Revenue outside financial reports
D
Notes:
As noted, revenues outside of government financial reports are more than 10 percent of total revenues.
6.3 Financial reports of extrabudgetary units
B
Notes:
As externally funded project expenditures are reported annually, detailed financial reports of most of the extrabudgetary expenditures are submitted to the government.
7. Transfers to subnational governments
D+
Notes:
7.1 System for allocating transfers
D
Notes:
The horizontal allocation of some transfers to Counties and Districts from the central government is not determined by transparent, rule-based systems.
7.2 Timeliness of information on transfers
C
Notes:
Counties and districts receive information about annual transfers from national governments, usually when the proposed budget is published on the MFDP website.
8. Performance information for service delivery
D
Notes:
8.1 Performance plans for service delivery
D
Notes:
A framework of performance indicators relating to the outputs or outcomes is published by the Ministries of Education and Health, but, taken together, they account for less than 25 percent of the budget.
8.2 Performance achieved for service delivery
D
Notes:
Ministries and agencies do not use to publish an annual performance report or any comparable report.
8.3 Resources received by service delivery units
D
Notes:
No documentation was provided showing that surveys were conducted regarding estimates of resources received by service delivery units for at least one major department.
8.4 Performance evaluation for service delivery
D
Notes:
The evaluation of the efficiency or effectiveness of services was conducted by the M&E Unit of the MFDP. However, this unit accounts for less than 25 percent of the budget. Also, it is not required to publish the results.
9. Public access to fiscal information
D
Notes:
9.1 Public access to fiscal information
D
Notes:
Only the Annual Budget Execution Report and the Audit Reports from the General Auditor were made available to the public in a timely manner.
III. Management of assets and liabilities
Scores by Dimension
Overall Indicator Score
10. Fiscal risk reporting
D
Notes:
10.1 Monitoring of public corporations
D
Notes:
Most SOEs do not submit their annual reports to the SOE Financial Reporting and Coordination Unit of the MFDP.
10.2 Monitoring of subnational governments
D
Notes:
Annual reports concerning the financial position and performance of Counties and Districts are not published in a timely manner.
10.3 Contingent liabilities and other fiscal risks
D
Notes:
The central government entities and agencies do not quantify significant contingent liabilities in their financial reports.
11. Public investment management
D+
Notes:
11.1 Economic analysis of investment proposals
B
Notes:
Economic analyses are conducted to assess most major investment projects. The analyses are reviewed by an entity other than the sponsoring entity.
11.2 Investment project selection
D
Notes:
As most of the projects are externally financed projects (for which there is no pipeline and central review process), less than 25 percent of the major investment projects are prioritized by a central entity.
11.3 Investment project costing
D
Notes:
Projections of the total capital cost of major investment projects are not included in the budget documents.
11.4 Investment project monitoring
C
Notes:
The total cost and physical progress of major investment projects are monitored by the implementing government unit. Standard procedures and rules for project implementation are in place, but no information about the implementation of major investment projects is published annually.
12. Public asset management
D+
Notes:
12.1 Financial asset monitoring
D
Notes:
Insufficient information is generated about non-current assets because of the current use of the cash basis IPSAS.
12.2 Nonfinancial asset monitoring
D
Notes:
The government maintains a register of its holdings of fixed assets, but it does not collect information about their usage and age.
12.3 Transparency of asset disposal
C
Notes:
Procedures and rules are established for the transfer or disposal of non-financial assets, but only partial information about transfers and disposals is included in the annual financial reports.
Notes:
13.1 Recording and reporting of debt and guarantees
B
Notes:
Domestic and foreign debt and guaranteed debt records are complete and updated monthly. Data are reconciled quarterly, but not monthly. Comprehensive statistical reports are produced quarterly and annually.
13.2 Approval of debt and guarantees
A
Notes:
The central government's contracting of loans and issuance of guarantees are made against transparent criteria and fiscal targets, and they are always approved by the Minister of Finance.
13.3 Debt management strategy
A
Notes:
A Debt Sustainability Analysis (DSA), with a horizon of at least three years, is prepared by the IMF and the World Bank under the Extended Credit Facility. It is also publicly reported. Annual reporting against debt management objectives is provided to the legislature. The government’s annual plan for borrowing is consistent with the approved strategy.
IV. Policy-based fiscal strategy and budgeting
Scores by Dimension
Overall Indicator Score
14. Macroeconomic and fiscal forecasting
B
Notes:
14.1 Macroeconomic forecasts
B
Notes:
The MFDP prepares medium-term forecasts of key macroeconomic indicators, which are included in the budget documentation submitted to the legislature. However, the projections are not reviewed by an external entity.
Notes:
The government prepares medium-term forecasts of the main fiscal indicators, including revenues, aggregate expenditures, and the budget balance. These forecasts, together with the underlying assumptions, are included in the budget documentation submitted to the legislature.
14.3 Macrofiscal sensitivity analysis
C
Notes:
The government prepares, for internal use, a range of fiscal forecast scenarios based on alternative macroeconomic assumptions. However, the budget documents do not include a discussion of forecast sensitivities.
Notes:
15.1 Fiscal impact of policy proposals
C
Notes:
The MFDP prepares estimates of the fiscal impact of all proposed changes in revenue and expenditure policy for the next fiscal year.
15.2 Fiscal strategy adoption
B
Notes:
The government has adopted, along with the last budget submitted to the legislature, a medium-term fiscal strategy, including quantitative and/or qualitative fiscal objectives.
15.3 Reporting on fiscal outcomes
C
Notes:
The government has prepared an internal report concerning the progress made against its fiscal strategy, but it was not submitted to the legislature.
16. Medium-term perspective in expenditure budgeting
D+
Notes:
16.1 Medium-term expenditure estimates
A
Notes:
The annual budget presents an estimate of expenditures for the budget year and the two following fiscal years by administrative and economic classification.
16.2 Medium-term expenditure ceilings
D
Notes:
The budget circular does not contain medium-term expenditure ceilings. Also, multi-year appropriations are not yet permitted.
16.3 Alignment of strategic plans and medium-term budgets
D
Notes:
Sector strategies have been prepared for some sectors, but they do not present a substantially complete costing of investments and recurrent expenditures. Budget proposals are not aligned with estimates presented in the strategic plans.
16.4 Consistency of budgets with previous year’s estimates
D
Notes:
Budget documents do not provide an explanation of changes to expenditure estimates between the second year of the previous medium-term budget and the first year of the current medium-term budget.
17. Budget preparation process
D+
Notes:
Notes:
A budget calendar exits, but the MACs did not have enough time to complete their detailed estimates in a timely manner.
17.2 Guidance on budget preparation
D
Notes:
A budget circular is issued to budgetary units, but it does not include ceilings for administrative or functional areas.
17.3 Budget submission to the legislature
C
Notes:
The executive has submitted the annual budget proposal to the legislature at least one month before the start of the fiscal year in all the last three years.
18. Legislative scrutiny of budgets
C+
Notes:
18.1 Scope of budget scrutiny
B
Notes:
The legislature’s review covers fiscal policies and aggregates for the coming year, as well as detailed estimates of expenditures and revenues. However, they do not cover medium-term details of expenditures and revenues.
18.2 Legislative procedures for budget scrutiny
B
Notes:
Legislative procedures include internal legislative committees, technical support, and negotiation procedures. However, public consultations have not yet taken place.
18.3 Timing of budget approval
C
Notes:
The legislature has approved the annual budget within one month of the start of the year in two of the last three fiscal years.
18.4 Rules for budget adjustment by the executive
C
Notes:
Clear rules exist for in-year budget changes by the executive, but they allow for significant administrative reallocations. Moreover, it is not clear that they are followed in most cases.
V. Predictability and control in budget execution
Scores by Dimension
Overall Indicator Score
19. Revenue administration
C+
Notes:
19.1 Rights and obligations for revenue measures
A
Notes:
The Liberian Revenue Authority (LRA) provides easy access and up-to-date information regarding taxpayers' obligations and rights, including appeal processes and procedures.
19.2 Revenue risk management
B
Notes:
The LRA uses a structured and systematic approach for assessing and prioritizing compliance risks for the majority of revenue streams.
19.3 Revenue audit and investigation
C
Notes:
Entities collecting most government revenues undertake audits and fraud investigations using a compliance improvement plan. However, less than 75 percent of planned audits were completed.
19.4 Revenue arrears monitoring
D
Notes:
The stock of revenue arrears at the end of the last completed fiscal year was below 10 percent of the total revenue collection for the year. However, the revenue arrears older than 12 months were more than 75 percent of the total revenue arrears.
20. Accounting for revenue
D+
Notes:
20.1 Information on revenue collections
A
Notes:
The LRA obtains weekly data from entities collecting all central government revenues. This information is disaggregated by revenue type and is consolidated into a report.
20.2 Transfer of revenue collections
A
Notes:
All tax revenues are paid directly into the Consolidated Fund Account, or transfers to the Treasury are made daily.
20.3 Revenue accounts reconciliation
D
Notes:
The LRA does not prepare a consolidated revenue accounts reconciliation.
21. Predictability of in-year resource allocation
B
Notes:
21.1 Consolidation of cash balances
A
Notes:
Bank and cash balances are consolidated daily into the TSA. However, extra-budgetary funds remain outside of the arrangement.
21.2 Cash forecasting and monitoring
A
Notes:
A cash flow forecast is prepared for the fiscal year, and it is updated monthly based on actual cash inflows and outflows.
21.3 Information on commitment ceilings
C
Notes:
Spending entities are provided with reliable information about resources available for commitments only one month in advance.
21.4 Significance of in-year budget adjustments
C
Notes:
Significant in-year adjustments are frequent. They are done in a transparent, but unpredictable way.
Notes:
22.1 Stock of expenditure arrears
D
Notes:
The stock of expenditure arrears to suppliers was more than 50 percent of the total arrears. Information about the other types of arrears was not available.
22.2 Expenditure arrears monitoring
D
Notes:
Data concerning the stock and composition of expenditure arrears is produced when annual financial statements are prepared. However, monitoring is not done for all types of arrears.
Notes:
23.1 Integration of payroll and personnel records
D
Notes:
The approved staff list, personnel database, and payroll are not directly linked. Staff hiring and promotions are controlled by a list of approved staff positions. All changes made to personnel records are reconciled manually against the previous month’s payroll data. However, monthly reconciliation data was not provided.
23.2 Management of payroll changes
D
Notes:
Changes to the personnel records and payroll are usually updated monthly, but no information was provided about personnel records and payroll updates.
23.3 Internal control of payroll
C
Notes:
Sufficient controls exist, but only to ensure integrity of the payroll data of greatest importance. Contractors were still not part of the payroll as of the time of the assessment.
Notes:
Partial payroll audits or staff surveys have been undertaken within the last three completed fiscal years. The GAC undertook a payroll audit in 2019.
Notes:
24.1 Procurement monitoring
D
Notes:
Databases regarding procurements are maintained only through the prior review mechanism, which represents less than the majority of procurement methods for goods, services and works.
24.2 Procurement methods
D
Notes:
The total value of contracts awarded through competitive methods represented much less than 60 percent of the total value of contracts in FY 2018/19.
24.3 Public access to procurement information
D
Notes:
The legal and regulatory framework for procurement, the government procurement plans, bidding opportunities, and contract awards are made available to the public. However, they represent less than the majority of procurement operations.
24.4 Procurement complaints management
C
Notes:
The procurement complaints system in Liberia meets only 3 benchmarking criteria, namely: Criteria 4) exercises the authority to suspend the procurement process; Criteria 5) issues decisions timely; and Criteria 6) issues decisions that are binding on every party, are not met.
25. Internal controls on nonsalary expenditure
B
Notes:
25.1 Segregation of duties
A
Notes:
Appropriate segregation of duties is prescribed through the entire expenditure process. Responsibilities are clearly articulated.
25.2 Effectiveness of expenditure commitment controls
C
Notes:
Expenditure commitment controls are in place and limit commitments to projected cash availability and approved budget allocations. However, the coverage does not include more than 75 percent of the budget expenditures in terms of value.
25.3 Compliance with payment rules and procedures
C
Notes:
The majority payments are compliant with regular payment procedures, and the majority of exceptions are properly authorized and justified.
Notes:
26.1 Coverage of internal audit
B
Notes:
Internal audit is operational for central government entities representing more than 75 percent of budgeted expenditures, as well as for government entities collecting more than 90 percent of budgeted revenues.
26.2 Nature of audits and standards applied
B
Notes:
Internal audit activities are focused on evaluations of the adequacy and effectiveness of internal controls, as well as financial compliance. However, internal audits and related controls and inspections only partially meet the professional standards of internal auditing.
26.3 Implementation of internal audits and reporting
D
Notes:
Annual audit programs exist, but there was not enough information provided to check the percentage of programmed audits being completed for the FY 2018/19.
26.4 Response to internal audits
D
Notes:
There is no evidence that management provides a partial response to audit recommendations.
VI. Accounting and reporting
Scores by Dimension
Overall Indicator Score
27. Financial data integrity
D+
Notes:
27.1 Bank account reconciliation
D
Notes:
Bank reconciliations are not prepared.
Notes:
The GoL uses cash accounting, and it has not established a system for monitoring suspense accounts on an extra-accounting basis.
Notes:
Reconciliation of advance accounts does not generally take place, even annually.
27.4 Financial data integrity processes
C
Notes:
Access and changes to records are restricted and recorded, but not all operations result in an audit trail.
28. In-year budget reports
D+
Notes:
28.1 Coverage and comparability of reports
C
Notes:
The classification allows for comparison to the budget with partial aggregation. Expenditures are covered at both the allotment and payment stages. Expenditures made from transfers to deconcentrated units are not included in the reports.
28.2 Timing of in-year budget reports
D
Notes:
Budget execution reports are prepared quarterly, but they are not issued in a timely manner.
28.3 Accuracy of in-year budget reports
C
Notes:
Expenditures are captured in quarterly reports at the payment stage. There may be concerns regarding data accuracy, which are not highlighted in the reports. An analysis of the budget execution is provided on a semi-annual basis.
29. Annual financial reports
D+
Notes:
29.1 Completeness of annual financial reports
C
Notes:
A statement on the Consolidated Fund is prepared annually. Information about revenues, expenditures and bank account balances is not complete, but the omissions are not significant.
29.2 Submission of reports for external audit
D
Notes:
Unaudited financial statements of the Consolidated Fund Account for the FY 2018/19 were published within six months by the Office of the Comptroller General to the General Auditor. However, the report was not complete, and it was not completed within 9 months after the end of the fiscal year.
29.3 Accounting standards
C
Notes:
Statements are presented in a consistent format over time, but the GAC’s reports often mention that they are not prepared in accordance with International Public Sector Accounting Standards (IPSAS) cash basis. Variations between international and national standards are not disclosed in the AFS.
VII. External scrutiny and audit
Scores by Dimension
Overall Indicator Score
Notes:
30.1 Audit coverage and standards
B
Notes:
Financial reports of central government entities representing more than 75 percent of total expenditures and revenues have been audited according to national auditing standards. The audits have highlighted relevant material issues.
30.2 Submission of audit reports to the legislature
D
Notes:
The GAC reports on financial statements were submitted to the legislature more than nine months from the date of receipt by the GAC of the AFS from the government.
30.3 External audit follow-up
C
Notes:
A formal response is usually provided by the audited entity, but it is often not complete and/or timely.
30.4 Supreme Audit Institution independence
D
Notes:
The GAC operates independently from the executive with respect to the procedures for appointment and removal of the Auditor General. However, the MFDP has significant influence on the release of the GAC’s budget. Also, the GAC had difficulties in obtaining the requested documents and information in a timely manner.
31. Legislative scrutiny of audit reports
D
Notes:
31.1 Timing of audit report scrutiny
D
Notes:
Examination of audit reports by the legislature is generally taking more than 12 months to complete.
31.2 Hearings on audit findings
D
Notes:
The PAC conducted public hearings about various special audit reports, but they did not refer to key findings of the GAC audit reports.
31.3 Recommendations on audit by the legislature
D
Notes:
The legislature provides some recommendations about actions to be implemented by the executive, but the PAC does not have a specific follow-up system. These recommendations are not specifically linked to those made by the GAC concerning the AFS.
31.4 Transparency of legislative scrutiny of audit reports
D
Notes:
Reports of the Public Accounts Committee are not published on any official website or other means that are easily accessible to the public.