Long before one of the world’s leading auditors, Ernst & Young, was appointed by the European Commission to conduct a systems and financial audit of the Liberian Petroleum Refining Company (LPRC) from the period of October 1, 2003 to June 30, 2004, most Liberians see the institution as a breeding ground for waste and corruption.
Like the Liberian Produce Marketing Association (LPMC), the Liberian Broadcasting Service (LBS), the Liberian Electricity Corporation (LEC), the Liberian Water and Sewer Corporation (LWSC), and many more are money-wasting bureaucracies that are poorly managed and inefficient to be taken seriously.
Those corporations are not alone in the downward spiral that defines their existence; but are as cluttered as the ill-defined roles they played in the Liberian political system. Like the corporations, the various ministries are also run poorly and inefficiently, and are also occupied by friends, cronies and career job seekers whose reasons for being on this Earth is to work in government to survive in Liberia’s tough economic climate.
Since its incorporation in 1978, LPRC has gone from being a state-run promising institution that imports, distributes, and sells petroleum products to Liberians and foreign nationals, to that of a corrupt institution with an imaginary on-site ATM where appointed officials often looked forward to getting rich by stealing money, petroleum and petroleum products.
It is also a workplace where individuals often negotiate their own oil deals with private companies, as it was during the tenure of Sirleaf-appointee and former Manager Director, Harry A. Greaves Jr., who was known notoriously to do things his way.
While it is true that the October 1, 2003 to June 30, 2004 audit of LPRC was commissioned during the interim administration of Gyude Bryant, the report made it clear that the “Auditor General has never performed any audit of LPRC,” but did not specify the period in question. “According to information gathered, since the creation of the company, the Auditor General has not been able to carry out an audit of LPRC because of the refusal of the former Manager Directors,” the report states.
The audit report also speaks of a “worn-out and obsolete refinery with obsolete technology,” and “a workplace where management do not keep a fixed asset file itemized by category of assets, which can be reconciled with the GL (Government of Liberia).”
“There is no bank reconciliation” the report reads “to validate the accuracy of statements and trial balance, and a place where accounting vouchers are destroyed, and opening balances of general ledgers are not justified. The occurrence of posting errors, arithmetical errors in trial balance also made it clear there is a serious lack of autonomy of the management of the company.”
The latter, according to the report, “puts a lot of pressure on LPRC in order to grant donations to Government officials or bodies, or to take in charge of government expenses not directly linked with the company’s activities. It is a place where “he company has not prepared a document describing the accounting principles used to record transactions,” which makes “the reliability of recordings of LPRC’s accounting not satisfactory.”
“Petty cash inventory” according to the audit report “is not systematically done at the end of each month, nor on a surprise bases. The cash counted could not be reconciled with the cash register; the petty cash register was not updated; the date and description of transactions are not properly indicated; and the balance of the cash at the end of each day is not indicated. Many cash vouchers were outstanding, some of which dating back to April 2004, and not yet recorded in the register.”
“In this context, it is very likely that irregularities or embezzlements of cash can remain unnoticed for long periods,” the report said. However, supporting documents for expenses, and gasoline provided to officials has been wrongly posted, while there is no profit remitted to government under the form of dividends during the audited period. In general, “we found unexplained discrepancies between outstanding balances confirmed by importers of petroleum products and their corresponding accounts receivable balances in the books at LPRC,” the report reads.
“The structure of the organization chart appears rather coherent with three principal divisions each headed by a Deputy Manager Director and three sections directly attached to the Manager Director.” According to the same audit report, “the Board of Directors does not make written comments and observation on the quarterly budget performance,” and in fact “there is no process of evaluation procedure of the company’s activities by the Board of Directors.”
However, “the company had an overall regular staff of 595 people as of the end of 2004. The actual employees add up to approximately 750 by taking into account the casual employees (34), the cadets and internship students (31) and the petroleum sports team (86). The interviews held with management and other personnel revealed a preponderance of non-qualified personnel who represents around 90% of the total staff. As a whole, all services and departments are overstaffed. The permanent staff number is plethoric compared to the current activities of the company.”
“The legal documents do not give precise details on supervision of the company by authorities, nor on the way in which this must be done. There is, in particular, no procedure governing the relationships between the Board of Directors and the ministries in charge of Energy and Finance.”
The unceremonious departure of Harry A. Greaves Jr., exposed the troubles and obvious decline of LPRC. Greaves’ departure also revealed the obvious lack of a coordinated structure like an independent Board of Directors, or a watch dog Inspector General to curb corruption, seek prosecution, and end the abuse of power.
As it appears, Greaves’ Board of Directors and the rest of the team at the time collaborated and protected each other as a way of getting away with “murder,” as the individuals allegedly stole the financial and petroleum resources of LPRC day in and day out to satisfy their selfish objectives.
It is unknown whether President Sirleaf, who ran as a reformer and wholeheartedly pledged to the Liberian people to fight corruption, ever looked at the audit report or even took any concrete steps to change the corrupt organizational culture at LPRC?
LPRC has been poorly managed for too long and seen as a place to work, steal, and get rich quick. LPRC is also a place where just about anyone who does not have the experience or college education can be appointed by rebel factions, political leaders or political friends, a sad and powerful testimony of public service in Liberia.
With such a damaging audit report, one would think President Sirleaf would appoint a competent and respectable Manager Director at LPRC, who is willing to change the culture of corruption and bring needed respect to that body. As we all know now, Sirleaf appointed T. Nelson Williams.
On Mr. Williams’ watch, LPRC Chairman Negbalee Warner resigned after he delivered a scathing report in 2012 about the corrupt environment at his former organization. At issue was a $22 million contract awarded to the Scottish company, Motherwell Bridge Limited (MBL), for the rehabilitation and modernization of the Petroleum Storage Terminal (PST). What actually troubled Negbalee Warner and investigators is the fact that the contract had no actual amount or price.
Another red flag and discrepancy was a payment of $900,000 made to Motherwell Bridge Limited by Managing Director, T. Nelson Williams, without the authorization of the Board amid the absence of a performance guarantee security, which should have been posted by Motherwell Bridge Limited, as required by the contract.
This case has since been shoved under the rug as it is with other high-profile cases in the Sirleaf administration. Since President Sirleaf is the juror, the prosecutor and the judge, this case and other cases involving corruption and malfeasance cannot be prosecuted unless she approves of what should be done, which is unfortunate.
From what I know, most modern democratic countries do not have a government-run national petroleum refinery waiting around for appointed officials to steal from to get rich quick. In those societies, those petroleum refineries are private industries that strives to make a profit.
Get rid of or privatize LPRC, and use the money on other worth national projects the Liberian people can use.