South Dakota, USA: The United States government through its international aid and development agency USAID, today released its investigative report into the missing Liberian banknotes, and the US$25 million mopping exercise carried out by the Ministry of Finance and Central bank of Liberia.
The 67-page report include some redacted information which auditors cited, was done for security purposes.
Below, are highlights of the report:
1.The CBL ordered new currency totaling LRD 15.0 billion from Crane Currency in two tranches in 2016 and 2017. Communications between the CBL and the Legislature indicate that there was no clear or consistent strategy driving the process to circulate new banknotes from inception to conclusion. As a result, this raised the risk of unintended negative economic effects, including high inflation and the rapid depreciation of the LRD.
2. Legislature approval was granted on May 17, 2016 for the CBL to print new banknotes totaling LRD 5.0 billion. However, Crane AB was awarded an initial contract on May 6, 2016 by the CBL to print new banknotes totaling LRD 5.0 billion, eleven days before the Legislature approval was granted.
3. Legislature approval was not granted in the same manner as 2016 for the CBL to print a second tranche of new banknotes totaling LRD 10.0 billion in 2017.
4. Crane AB was awarded the second contract in June 2017 by the CBL to print new banknotes totaling LRD 10.0 billion, four weeks before two officials from the Legislature requested that the CBL replace all legacy banknotes.
5. The CBL procured the services of Crane AB for both contracts without adhering to its own internal tendering policies for procurement.
6. The actual value of new banknotes printed by Crane AB to Liberia totaled LRD 15.506 billion, therefore new banknotes totaling LRD 0.506 billion were printed by Crane AB above the initial contractual amount of LRD 15.0 billion.
7. Records provided by Crane AB and its logistics company provided a documentation trail for new banknotes totaling LRD 15.506 billion having been shipped by Crane AB. Records also show that the CBL paid Crane AB for new banknotes totaling LRD 15.506 billion. However, delivery documentation provided by the CBL indicated that Crane AB printed and shipped a greater quantity of banknotes to Liberia.
8. Of the new banknotes printed and shipped by Crane AB totaling LRD 15.506 billion, the CBL had injected new banknotes totaling LRD 10.146 billion into the Liberian economy without removing from circulation (and destroying) the equivalent quantity/value of legacy banknotes.
9. Under the direction of the Minister of Finance, the President’s Economic Management Team conducted a separate USD 25.0 million exercise to “mop-up” excess LRD banknotes with USD banknotes. At the time of Kroll’s review, this resulted in LRD 2.3 billion (USD 15.0 million)3 being purchased by the CBL from local businesses and foreign exchange bureaus, in an attempt to address the depreciation of the Liberian Dollar. This action was undertaken by the CBL without a clearly documented strategy.
10. Kroll’s independent counts of the physical cash balances in each of the CBL’s three operational vaults could not be reconciled with the CBL’s corresponding financial accounting records.
The report explains in detail, each above highlight; giving step-by-step procedural tactics employed in its investigation.
Chief among the highlights are the difference of L$1,944,000,000 (One billion, nine hundred and forty-four million) that were overprinted and cannot be accounted for, and the US$25 million mopping exercise carried out by the CBL upon instruction from the Minister of Finance that cannot be properly accounted for. In addition, the infusion of L$6.387 billion into the Liberian economy by the CBL without removing and destroying old banknotes from circulation, is another highlight to ponder.
The full report can be found on the USAID website….