Monrovia – The audit of the Executive Mansion Renovation Project is the first undertaken by the Auditor-General of Liberia on the Executive Mansion Renovation Project. It was requested by the President of Liberia and commissioned by the Auditor-General, under the statutory mandate of the Auditor General as provided for under section 2.1.3 of the GAC Act of 2014. The audit covers from July 1, 2006 to December 31, 2015.
The Executive Mansion was constructed from 1960 to 1963.The project was designed and supervised by Department of Public Works and Utilities (Ministry of Public Works ) and Stanley Engineering Company of Africa while the Construction Contractor was Liberian Construction Corporation (LCC). The project was officially dedicated on January 3, 1964. The Executive Mansion is the seat of the Executive Branch of the Government of the Republic of Liberia. Since the completion of the Executive Mansion in 1963, there had been three major rehabilitation works executed on the Composite Building Elements/Systems.
The first renovation/rehabilitation work was executed during 1988/1989 under the Government of the late President Samuel K. Doe and the second renovation work was executed during the tenure of former President Charles G. Taylor in the year 1997/1998. On July 26, 2006, during the National Independence Day Celebration, there was an outbreak of fire, reportedly due to electrical defects which burned and damaged many building elements primarily the Fourth Floor Central Section, accommodating the Presidential and adjoining offices. Due to the 2006 fire, The Government of Liberia initiated the third renovation on the executive Mansion. The Government has awarded 7 (seven) contracts for the renovation of the Executive Mansion amounting to US$31,705,072 during the audit periods. The Government has paid US$15,769,800.21 to the contractors per the documents provided by the Ministry of State for Presidential Affairs and Ministry of Finance and Development Planning.
Audit Observations and Findings
The GAC observed that a total amount of US$8 million was appropriated for fiscal years 2006/2007 through 2009/2010 for the Executive Mansion Renovation Project per the approved National Budgets without evidence of allotment. Additionally, as per the Ministry of Finance Development Planning template, an amount of US$1,500,000.00 was transferred from the appropriation during the 2007/2008 fiscal year without documenting the purpose of the transfer. In response to the GAC’s observation the Management of the Ministry of State for Presidential Affairs said – “The Ministry wishes to inform you that there were no amounts appropriated in the Ministry of State’s budget during FY 2006/07 2009/10 for the Executive Mansion Renovation Project per the approved National Budget. There were also no funds transferred to the Ministry’s Budget for the E.M. Renovation Project during those periods”.
The MOS Management further said US$2 million was allotted in the National Budget during the periods for maintenance of Executive Buildings. However, the GAC indicated that it obtained the information from the budget appropriations in the General Claims Segment of the National Budget. The budget description clearly stated “Substantial Maintenance and Renovation/Executive Mansion”. The Ministry of State for Presidential Affairs should be aware of all appropriations in the National Budget on its behalf. According to the GAC, it submitted a copy of the Management Letter/Draft Report to the Minister of Finance and Development Planning (MFDP) on 14 July 2016. The Deputy Minister of MFDP wrote and requested 15 August 2016 to respond to the Management Letter/Draft Report. Up to the time of this report, the GAC did not receive any response from the MFDP.
Therefore, the GAC says the Managements Ministry of State for Presidential Affairs and the Ministry of Finance and Development Planning should account for the appropriations and transfer in the National Budget relating to maintenance and renovation of the Executive Mansion. The GAC also observed during the audit that US$5,161,767.22 of the payments made on the various contracts did not contain supporting documentation during the fiscal years 2012-2014. In response to the GAC the Ministry of State said the that payments were processed by Ministry of Finance and Development Planning via the Executive Mansion Escrow Account set up by MOFDP. The MOS directed GAC to contact the MFDP stating “Appropriations and allotments for these payments were directly controlled by Ministry of Finance with Ministry of State playing a marginal role. As such, please revert to Ministry of Finance and Development Planning to provide the payment vouchers which should have all supporting documents” In view of the unsupported payments, the GAC says the Managements of the MOS and MFDP should be held accountable for the unsupported payments from the escrow account. The GAC further observed during the audit that the Ministry of Land Mines and Energy (MLME) disposed of scrap from the Executive Mansion Renovation project by inviting two scrap companies namely North Star Industries Inc. and Universal Impex Inc. to submit competitive offers for two piles of scraps estimated at ten metric tons without the involvement of General Services Agency (GSA).
Further, the GAC audit noted documents reviewed showed the MLME sold the scrap to North Star Industries Inc., the highest bidder, for US$500.00 and US$1,100.00, respectively. According to the GAC report, the Management of the Ministry of State for Presidential Affairs responded to the GAC that “The Ministry of State is not in the position to provide justification regarding the thought process that went into the decision to direct MLME to dispose of the Executive Mansion scrap instead of GSA. The letter in question was written by the late Minister of State who in no longer around to address such an inquiry”.
The GAC says the statement by the MOS Management that “The letter in question was written by the late Minister of State who in no longer around to address such an inquiry” is unacceptable as Government is continuous and decisions in government are collective.
Therefore, the Management of the Ministries of State for Presidential Affairs and Lands Mines and Energy should be held accountable for breach of financial discipline. The GAC further observed during the audit that there was no evidence that the MOS had Procurement Committee in place during the first phase of the Executive Mansion Renovation project, as no committee meeting minutes were provided when requested. The GAC also observed that contracts awarded to Milton and Richards Architectural/Engineering Consultancy Firm, CNQC Qingjian International (Lib) Group Development Co. Ltd, VAXS, Inc. and Cape Resources, Inc. did not meet the requirements of the Public Procurement and Concessions Act. In response the MOS management indicated, “The Ministry of State’s Procurement Committee was not an integral part of the process awarding the Executive Mansion Renovation Contracts because of the security nature of the project”. However, the GAC Report says confidential or classified expenditure should be submitted and agreed with the leadership of the National Legislature (Regulation D.14, PFM Act of 2009) to be considered as such. The Management of the Ministry of State for Presidential Affairs should have informed the Leadership of the National Legislature to classify expenditure related to the Executive Mansion Renovation Project as classified expenditure. In the absence of that, the Management of the Ministry of State for Presidential Affairs should be held accountable for the violation of the Amended and Restated PPC Act of 2010”, the report stated.
The GAC observed during the conduct of the audit that the Ministry of State for Presidential Affairs and CNQC Qingjian International (Lib) Group Development Co. Ltd. entered into two contracts on April 27, 2011 and December 19, 2012 for the renovation and rehabilitation of the Executive Mansion in the amount of US$2,896,873.69 for the Fourth Floor Renovation and the amount of US$21,891,227.49 for the Second Floor, respectively. CNQC Qingjian International (Lib) Group Development Co. Ltd received US$ 10,443,959.61 on the two contracts.
The GAC also observed that those payments were made to CNQC Qingjian International without evidence of the supervision reports and certificates of completion from the consultant, Milton and Richards Architectural/Engineering Consultancy Firm, Agent of the owner as required by the contract. The GAC reviewed the MOU dated 1 July 2015 between the Government of Liberia and QNQC Qingjian International which terminated the Executive Mansion Renovation Project contract, despite the payment of US$10,443,959.61 to the Chinese Company.
The Government of Liberia terminated the contract in a letter of termination dated 22 January 2015 effective date 31 December, 2014 due to breach of contract. Consequently, Government contracted CESAF Liberia Ltd to scrap the building and redo the renovation. Additionally, the Government and Qingjian International waived all claims against each other in the interest of “diplomatic harmony”; further, the report said the Government indicated that the contractor took away all materials and supplies in the warehouse.
According to the GAC, the waivers denied the achievement of value for money and violated PFM Regulation A. 15 which states that “(1) The head of government agency must exercise all reasonable care to prevent and detect unauthorized, irregular, fruitless and wasteful expenditure, and must for this purpose implement clearly defined business processes, identify risk associated with these processes and institute effective internal control to mitigate these risks. The expenditure was irregular, fruitless and wasteful. The report further indicated that the Ministry of State for Presidential Affairs did not exercise due diligence in authorizing payments on the contracts. The MOS should have involved the Ministry of Public Works which is clothed with the capacity to monitor and certify public building renovations.
This, according to the GAC report, led to inferior construction which resulted in waste and abuse of the nation meager resources. The GAC audit report further indicated that Milton and Richards Architectural/Engineering Consultancy Firm, Agent of the Ministry of State failed to ensure that QNQC Qingjian International executed the contract based on the terms and conditions which subsequently led to the contractor’s substandard performance, thus resulting in a wasteful expenditure of US$10,443,959.61 by the Government of Liberia. Therefore, the report holds the Managements of the Ministry of State for Presidential Affairs and Milton and Richards Architectural/Engineering Consultancy Firm jointly and severally accountable for the payment. Also, the Ministry of State for Presidential Affairs and VAXS Inc. entered into a contract on March 13, 2013 for an amount totaling US$643,995.00 for a security surveillance system specifically designed for the entire Executive Mansion Building, its perimeter and grounds including gates.
Additionally, the GAC submitted a request to the Ministry of State for Presidential Affairs for the physical verification of the electronics devices that were purportedly delivered by VAX Inc. but up to the date of issuance of the report, access to the equipment/devices has not been granted to the GAC. Therefore, the GAC says the Management of the Ministry of State should be held accountable for equipment/devices. The GAC further observed during the conduct of the audit that the asset management of the Ministry of State for Presidential Affairs could not provide for review a comprehensive inventory listing of furniture and other fixed assets acquired for the Executive Mansion before and during the renovation project for fiscal periods July 1, 2006 through June 30, 2015.
On February 24, 2016 the GAC assisted by personnel from the Ministry of State for Presidential Affairs, and CESAF Liberia Ltd conducted an inventory count on internal furniture removed from the fifth, six, seven and eight floors of the Executive Mansion by the civil contractor CESAF Liberia Ltd. The GAC noted during the physical verification that the furniture removed from the fifth floor appeared to be damaged and in deplorable condition. Management provided a list of assets purportedly in storage from the Executive Mansion. However, a GAC comparison of the list to the list provided by CESAF and GAC’s physical verification shows variances between the assets verified and the list provided by MOS. The MOS asset listing appears to be unreliable as there were many assets verified by the GAC on the CESAF asset listing but were not on the MOS assets listing. Therefore, the report says the Management of the Ministry of State for Presidential Affairs should reconcile its list with CESAF list.
The Management of MOS
Meanwhile, the GAC has submitted three additional reports including Ministry of Justice-Justice and Security Joint Program Peace Building Fund Project (MoJ-JSJP PBF) for the Period July 1, 2012 to June 30, 2015. The Audit of Phase I of the Ministry of Posts & Telecommunication Projects (National Postal Address System, Chief Information Office and Postal Expansion Projects) for the Period July 1, 2012 to June 30, 2015 and Temple of Justice Peace Building Fund Project (ToJ-PBF) for the Period July 1, 2012 to September 30, 2015 to the National Legislature with copies to the President of Liberia.