The General Auditing Commission(GAC) has conducted the audit of the payroll of the National Port Authority (NPA) for the period January 1, 2022 to December 31, 2023 consistent with the Auditor General’s mandate as provided for in Section 2.1.3 of the GAC Act of 2014. The NPA Payroll compliance audit was commissioned May 27, 2024 and findings conveyed in the report were formally communicated to the authorities of the NPA for their responses.
Based on the audit work performed, because of the significance of the non-compliance matters noted in the Basis for Conclusion, the NPA Payroll processes were not in compliance with applicable laws, regulations and policy of the Government of Liberia(GoL) including the NPA Act of 1967 and amended in 1970, Revenue Code of Liberia Act of 2011, Decent Work Act of 2015, the PFM Act of 2009 as amended and restated 2019, and NASSCORP New Act published 2017.
During the compliance audit of the NPA Payroll processes, the GAC identified several significant issues that have led to its adverse conclusion. According to the GAC Audit Report, a copy of which is in possession of this paper, the NPA management did not comply with the NPA Act of 1967 and amended in 1970, Revenue Code of Liberia Act of 2011, Decent Work Act of 2015, the PFM Act of 2009 as amended and restated 2019, and NASSCORP New Act published 2017due to the following reasons: Duplicated Positions Management was not in compliance with its approved organogram as there were duplicated positions (Senior Directors, Directors, Assistant Directors, Managers, Assistant Managers, Coordinators, etc) in various departments contrary to the approved hierarchical structure/chain of command of the NPA and line of reporting. ‘‘ The duplication of positions has a pervasive impact on the entity’s compliance with relevant laws, regulations, or standards, causing material noncompliance and raising concerns about the NPA management’s adherence to the required compliance framework,’’ says the GAC Audit Report.
The following irregularities are noted with the NPA personnel management systems: No evidence that Management approved its human resource policies and procedures to guide human resource activities.
No evidence Management approved salary structure instituted at the NPA. No evidence that Management established an automated centralized payroll management system to facilitate the effective payroll management of the entity. Total payroll expenses per ledger amounts did not reconcile with total expenditure recorded in the financial statements for the years ended December 31, 2022 and December 31, 2023. Daily attendance logs were not adequately supervised or monitored by staff of the Human Resource Department. Personnel assigned at the out ports (Buchanan, Greenville and Harper) are processed on the payroll without reference to the signed daily attendance log.
No evidence that Management conducted performance evaluation of its employees during the fiscal periods under review as required. Management did not comprehensively catalog approved job descriptions for each personnel at all levels of the organization. No evidence that Management maintained essential personnel records such as letter of applications, contracts, credentials, job description, term of reference, etc. for its employees and contractors/consultants. Management did not develop policies to guide its operations for the following; Honorarium and Advances, Approved Financial and Administrative Manual, Approved Strategic and Operational Plans, Policy on Scholarship, Retirement and Death Policy.
Management did not comprehensively document adjustments (joiners, leavers, promotions, demotions, suspensions, etc.) on a periodic basis for the period under review. Management had not documented a training and development plan. ‘‘These irregularities are in violation of Regulation C.8 (3) (h) of the PFM Act of 2009, amended and restated 2019. The Committee of Sponsoring Organizations (COSO) of the Treadway Commission Framework that requires Board’s oversight responsibilities including providing advice and direction to management, constructively challenging management, approving policies and transactions, and monitoring management’s activities,’’ asserts the GAC Audit Report.
Unremitted Revenue Management did not remit into Government of Liberia(GoL) General Revenue Account a total of US$1,696,218.70 and US$1,982,237.75 as employees and contractors’ income taxes for the fiscal periods ended December 31, 2022 and December 31, 2023 respectively. ‘‘The NPA management is in violation of Section 905 (a & e) of the Revenue Code of Liberia (2000) as amended in 2011 which considers managements of entities as a withholding agents on behalf of the Government of Liberia. The NASSCORP Management did not remit to NASSCORP employees’ contributions amounting to US$125,159.48 and US$825,055.61 for the fiscal periods ended December 31, 2022 and December 31, 2023 respectively. Also, there is no evidence of supporting document provided for Employer’s contribution for the month of April 2022.’’
The non-remittance, the GAC says is a violation of Chapter 89.16 (a) of National Social Security and Welfare Corporation (NASSCORP) New Act published 2017 which requires that the contribution payable under the act in respect of an employee shall comprise contribution payable by the employee (hereinafter referred to as the employee’s contribution) and shall be paid to the Corporation.
A total number of thirty-one (31) employees and eighty-nine (89) contractors with a total salary of US$215,505.00 and US$409,488.00 respectfully did not show up during the GAC physical verification (head count) exercise.
Management avers that 13 Employees were suspended, 11 contractors were also under suspension and two employees travelled to China. No evidence was provided to validate the Management’s claims which contravene Regulation T(5) (1)of the PFM Act states that, a Head of government agency shall cause the immediate stoppage of payment of salary to a public servant when that public servant has: (a) been absent from duty without permission or reasonable cause for a period as stipulated in the administrative regulations of the establishment.
Noncompetitive Recruitment of Staff Management noncompetitively recruited five hundred seventy-five (575) employees for the periods ended December 31, 2022 and December 31, 2023. Furthermore, Management recruited staff for key positions (Assistant Managers, Managers, Administrative Managers, Directors Senior Directors, etc.) who did not have the requisite credentials.
The Noncompetitive Recruitment process is not in line with Section 55 (3) of the Act creating the National Port Authority which empowers the Board of Directors to develop policy to guide the NPA administration in executing its function for the smooth operation of the Port.
Among other things, the GAC recommends that Management should develop, approve and operationalize an organogram that details established hierarchical structure, clearly defined reporting channels and authorities and responsibilities within the entity. The approved organogram should be reflective of the current operations and practices at the entity. Evidence of approved organogram should be adequately documented and filed to facilitate future review.
Meanwhile, Liberia’s Auditor General P. Garswa Jackson Sr. acknowledges the Management’s acceptance of the GAC’s findings and recommendations and vows to follow-up on the implementation of the recommendations during subsequent audit. Auditor General Jackson further recommends that management should develop, approve and operationalize human resources policies and procedures for the effective and efficient operations of human resources activities of the entity. 6
Alternatively, Management should adopt and operationalize the Decent Work Act of 2015 to guide the human resources activities of the entity. Evidence of approved policies and procedures or adoption of the Decent Work Act of 2015 should be adequately documented and filed to facilitate future review. Going forward, Management should perform periodic review to ensure consistency of approved human resources policies and practices at the entity.
He also recommends that management should procure and operationalize a functional payroll system to facilitate complete, accurate and real-time recording of all payroll transactions of the entity. An automated control should be established such that transactions (along with supporting documents) posted by a junior staff must be reviewed and approved by senior personnel before the transactions appear in the payroll ledger. Going forward, an automated linkage should be created between the payroll ledger, trial balance and the financial statements to facilitate completeness and accuracy of the financial statements. Management should also facilitate the operationalization of the electronic document management system by ensuring all relevant source and supporting documents for payroll transactions are scanned, attached to the transactions in the payroll and accounting software, archived and maintained to facilitate future review.
Individuals who managed the administrative and financial matters of NPA for the period under audit are Mr. Bill Twehway, former Managing Director( September 5, 2018 to September 12, 2022 ), Madam Diana Nebo, former Managing Director( September 14, 2022 to January 19, 2024 3), Mr. Vakuma S. Dukuly, former Comptroller( October 2018 to December 2022 4), Mr. Gabriel Bull, former Comptroller( December 19, 2022 to March 11, 2024 5) and Mr. Pewee S. Flomoku, former HR Executive Director( August 5, 2019 to March 8, 2024).
Mr. Sekou A. M. Dukuly, Current Managing Director( January 2024 to present), Mr. James R. Bernard Current DMD/Administration( January 2024 to present and Mr. Emmanuel Horton Current DMD/Operations January 2024 to present.
