Our attention has been drawn to the Monday, June 3, 2019, edition of the print and online versions of your outlet (FrontpageAfrica) under the banner headline “Who ate Ebola Money”. The story alleges that US$10million of United States Agency for International Development’s (USAID) support for the fight against Ebola was squandered on former President Ellen Johnson Sirleaf’s watch. The claim further asserted that “new pieces of information” point to alleged corruption in the management of a USAID supported program in the health sector known as FARA. The allegation of corruption is supposed to have occurred at the Ministry of Finance and Development Planning (MFDP), during which period I was honored to serve as Minister, and at the Ministry of Health (MoH). FARA, which was signed in 2011, is Fixed Amount Reimbursement Agreement.
The story written by your reporter, Alaskai Johnson, is not only false but highlights an acute misunderstanding of the implementation framework of the USAID-supported program to Liberia’s health sector known as Fixed Amount Reimbursement Agreement (FARA), enshrined with a profound misunderstanding of basic interpretation of accounting statements and written with a desire to misinform the public. Sadly, these could have been easily corrected with minimum diligence including contacting me or the relevant USAID representatives in the country. However, here are the facts about FARA which are easily verifiable:
Summary of the facts: GoL spent its own money and the United States Government reimbursed the GoL. The Report points to basic compliance, monitoring and overspending issues at the Ministry of Health over the implementation of both FARA I and II. It also speaks to the urgent skills requirement for managers and staffers at MoH. The Report asserts also that theMinistry
of Finance and Development Planning did remit all unds to MOH as agreed by the provisions established between USAID and the Government of Liberia in FARA.The Report spoke to
risks that could lead to corruption and ineffectiveness of the overall implementation of the program, if not addressed.
On FARA-1, the USAID audit report (page 7-8) says “Over thelifeof theAgreement, the Ministryof Financeprovided theMinistryof Healthwith$40,660,082 ofFARA–related funding. TheMinistryofHealthpaid outto vendors $32,102,505. TheMOH reported to USAID that MOH paid$35,088,191 to vendors. USAID provided $40,060,405 offunding to theMOF”. This means that the MOF paid to MOH $600,000 in excess of what USAID reimbursed to the GOL. The variance between what the MOF paid to MOH and what it reported to USAID of approximately $8.5million ($40.6million – $32.1million) is explained in MOH’s response to this finding on pages 13 & 14 of the audit report. In response to MOH, RUMPH and
Associates wrote on page 14 that “supporting documents for thethreetransactions listed above wereprovided to R&A, however this was subsequent to thereview being completed”.From the report, it is clear that MOF ably performed its role of channeling resources to the MOH to save Liberian lives and the MOH also performed its role. MOH has duly acknowledged the need to strengthen some of the control procedures in place to ensure the program deliver better
performance.
On FARA II, the audit report states on page 8 that “fromthestart of FARA–2 throughMarch
31, 2018, USAID provided MOF with$15,164315 of funding. TheMOFprovided theMOH with$15,148,040 into the MOH escrowaccount”.Again, every amount paid to the MOH, reimbursed by USAID.
The USAID’s RUMPH report, the basis upon which FPA did its story, made no mention of “alleged corruption” or “financial impropriety”. Considering the fact that FARA’s accounts have not been audited yet since 2012, the report raised control-related issues and how they may pose a risk to cost-effective delivery of activities earmarked as part of FARA.
USAID Support to Ebola
In the interest of transparency, here are the facts about our engagements with USAID during the Ebola crisis which led to additional USG support to the health sector, though not raised in USAID’s Rumph Audit:
When the deadly Ebola Virus attacked Liberia and killed about 5,000 of our fellow citizens, the Liberian economy declined rapidly, and challenged our fiscal position severely. All health workers across the country abandoned their posts due to the deaths of about 150 of their colleagues after unfortunately contracting the virus. As a major line of the fight against the disease, we had to act to bring them back quickly. And yet, we had no money to pay them! Such was the shattering state of the economy.
We reached out to our development partners, and the United States Government (USG)
responded in kind to assist the Government of Liberia (GoL) to respond to this challenge through USAID Liberia. The severity of the crisis, coupled with the credibility of the system we had built combined with our skillful negotiations, got the Americans to agree to our request for $10million to fund the Liberian Dollar Payroll Component for the health workers under the Ministry of Health. Technically, this was a performance-based budget support reimbursable only after USAID validated GoL’s pre-financed claims.
Under that arrangement, the GoL would underwrite (pre-finance) the monthly salary disbursements to civil servants in the health sector through the direct deposit scheme we had set up for workers at the commercial banks of their choosing. This helped us deal with corruption related ghost names that was a perennial problem in the Liberian public sector, particularly in the education and health sectors. This, therefore, required the Ministry of Health to submit health workers’ payroll to the Ministry of Finance (MFDP), and the MFDP would then proceed to deposit workers’ pay directly in their respective accounts at the various commercial banks. Once the direct-deposit payments were completed, USAID hired the services of the Internal Audit Agency (IAA) to audit all payments to the commercial banks. MFDP then communicated with USAID for reimbursement. USAID then reimbursed the GoL through the Consolidated Revenue Account Number 02-205-30000-211 at the CBL directly from USAID in Washington, DC via CBL’s corresponding bank, the Federal Reserve Bank of New York (see reimbursement claim No. 5). Again, for clarity purposes, MFDP’s only role was to pre-finance the activities while
MOH and USAID agreed on the list of workers.
Finally, we welcome the recent pronouncement by President George Weah to review audit reports completed in the last ten years. We also welcome efforts to report same in the press. Actually, we believe this action will not only enhance and build much needed credibility in economic governance which our country desperately needs now, but also, it may assist in clearing the air about many looming false perceptions and unsubstantiated allegations about corruption, such as this story which is being reported in your respectable news organ. May I also urge that we commit ourselves to finding out the truth and actually searching the public records to avoid the real risk of defeating this important national exercise with erroneous smears and unnecessary gimmicks before it can even get started. To do so, would be to undermine the purpose of the President’s pronouncement and the actual fight against corruption which we wholeheartedly welcome. We are ready to provide clarity and supporting documents for fiscal transactions during our tenure.
Response to FrontpageAfrica story: “Who ate Ebola Money”
Dear Mr. Editor,
Our attention has been drawn to the Monday, June 3, 2019, edition of the print and online versions of your outlet (FrontpageAfrica) under the banner headline “Who ate Ebola Money”. The story alleges that US$10million of United States Agency for International Development’s (USAID) support for the fight against Ebola was squandered on former President Ellen Johnson Sirleaf’s watch. The claim further asserted that “new pieces of information” point to alleged corruption in the management of a USAID supported program in the health sector known as FARA. The allegation of corruption is supposed to have occurred at the Ministry of Finance and Development Planning (MFDP), during which period I was honored to serve as Minister, and at the Ministry of Health (MoH). FARA, which was signed in 2011, is Fixed Amount Reimbursement Agreement.
The story written by your reporter, Alaskai Johnson, is not only false but highlights an acute misunderstanding of the implementation framework of the USAID-supported program to Liberia’s health sector known as Fixed Amount Reimbursement Agreement (FARA), enshrined with a profound misunderstanding of basic interpretation of accounting statements and written with a desire to misinform the public. Sadly, these could have been easily corrected with minimum diligence including contacting me or the relevant USAID representatives in the country. However, here are the facts about FARA which are easily verifiable:
Summary of the facts: GoL spent its own money and the United States Government reimbursed the GoL. The Report points to basic compliance, monitoring and overspending issues at the Ministry of Health over the implementation of both FARA I and II. It also speaks to the urgent skills requirement for managers and staffers at MoH. The Report asserts also that theMinistry
of Finance and Development Planning did remit all unds to MOH as agreed by the provisions established between USAID and the Government of Liberia in FARA.The Report spoke to
risks that could lead to corruption and ineffectiveness of the overall implementation of the program, if not addressed.
On FARA-1, the USAID audit report (page 7-8) says “Over thelifeof theAgreement, the Ministryof Financeprovided theMinistryof Healthwith$40,660,082 ofFARA–related funding. TheMinistryofHealthpaid outto vendors $32,102,505. TheMOH reported to USAID that MOH paid$35,088,191 to vendors. USAID provided $40,060,405 offunding to theMOF”. This means that the MOF paid to MOH $600,000 in excess of what USAID reimbursed to the GOL. The variance between what the MOF paid to MOH and what it reported to USAID of approximately $8.5million ($40.6million – $32.1million) is explained in MOH’s response to this finding on pages 13 & 14 of the audit report. In response to MOH, RUMPH and
Associates wrote on page 14 that “supporting documents for thethreetransactions listed above wereprovided to R&A, however this was subsequent to thereview being completed”.From the report, it is clear that MOF ably performed its role of channeling resources to the MOH to save Liberian lives and the MOH also performed its role. MOH has duly acknowledged the need to strengthen some of the control procedures in place to ensure the program deliver better
performance.
On FARA II, the audit report states on page 8 that “fromthestart of FARA–2 throughMarch
31, 2018, USAID provided MOF with$15,164315 of funding. TheMOFprovided theMOH with$15,148,040 into the MOH escrowaccount”.Again, every amount paid to the MOH, reimbursed by USAID.
The USAID’s RUMPH report, the basis upon which FPA did its story, made no mention of “alleged corruption” or “financial impropriety”. Considering the fact that FARA’s accounts have not been audited yet since 2012, the report raised control-related issues and how they may pose a risk to cost-effective delivery of activities earmarked as part of FARA.
USAID Support to Ebola
In the interest of transparency, here are the facts about our engagements with USAID during the Ebola crisis which led to additional USG support to the health sector, though not raised in USAID’s Rumph Audit:
When the deadly Ebola Virus attacked Liberia and killed about 5,000 of our fellow citizens, the Liberian economy declined rapidly, and challenged our fiscal position severely. All health workers across the country abandoned their posts due to the deaths of about 150 of their colleagues after unfortunately contracting the virus. As a major line of the fight against the disease, we had to act to bring them back quickly. And yet, we had no money to pay them! Such was the shattering state of the economy.
We reached out to our development partners, and the United States Government (USG)
responded in kind to assist the Government of Liberia (GoL) to respond to this challenge through USAID Liberia. The severity of the crisis, coupled with the credibility of the system we had built combined with our skillful negotiations, got the Americans to agree to our request for $10million to fund the Liberian Dollar Payroll Component for the health workers under the Ministry of Health. Technically, this was a performance-based budget support reimbursable only after USAID validated GoL’s pre-financed claims.
Under that arrangement, the GoL would underwrite (pre-finance) the monthly salary disbursements to civil servants in the health sector through the direct deposit scheme we had set up for workers at the commercial banks of their choosing. This helped us deal with corruption related ghost names that was a perennial problem in the Liberian public sector, particularly in the education and health sectors. This, therefore, required the Ministry of Health to submit health workers’ payroll to the Ministry of Finance (MFDP), and the MFDP would then proceed to deposit workers’ pay directly in their respective accounts at the various commercial banks. Once the direct-deposit payments were completed, USAID hired the services of the Internal Audit Agency (IAA) to audit all payments to the commercial banks. MFDP then communicated with USAID for reimbursement. USAID then reimbursed the GoL through the Consolidated Revenue Account Number 02-205-30000-211 at the CBL directly from USAID in Washington, DC via CBL’s corresponding bank, the Federal Reserve Bank of New York (see reimbursement claim No. 5). Again, for clarity purposes, MFDP’s only role was to pre-finance the activities while
MOH and USAID agreed on the list of workers.
Finally, we welcome the recent pronouncement by President George Weah to review audit reports completed in the last ten years. We also welcome efforts to report same in the press. Actually, we believe this action will not only enhance and build much needed credibility in economic governance which our country desperately needs now, but also, it may assist in clearing the air about many looming false perceptions and unsubstantiated allegations about corruption, such as this story which is being reported in your respectable news organ. May I also urge that we commit ourselves to finding out the truth and actually searching the public records to avoid the real risk of defeating this important national exercise with erroneous smears and unnecessary gimmicks before it can even get started. To do so, would be to undermine the purpose of the President’s pronouncement and the actual fight against corruption which we wholeheartedly welcome. We are ready to provide clarity and supporting documents for fiscal transactions during our tenure.
Sincerely, AMK