Monrovia – The credibility of the Central Bank of Liberia (CBL) continues to face scrutiny following President Joseph Boakai’s appointment of James Wilfred as Acting Deputy Governor of the bank. Prior to his appointment, the General Auditing Commission (GAC) had identified Wilfred in its audit report as one of the current CBL staff members who defaulted on repaying a debt of US$90,933.24 as of December 31, 2023.
By Gerald C. Koinyeneh, [email protected]
When contacted for comment on his current standing with the CBL, Wilfred promised to respond but had not done so by the time of publication.
Wilfred is not alone in this matter. He is among seven current CBL seconded staff members who have defaulted on loan repayments, collectively owing the bank US$240,634.80. The total amount owed to the bank by both current and former staff stands at US$712,687.80.
GAC Observations
The GAC audit revealed several issues. It observed that defaulted staff loan files lacked evidence of loan balances being set off against the provident fund or severance of separated staff, as required by Section 9.1 of the Employee Loan Policy. Additionally, there was no evidence that separated staff with defaulted loan balances had completed the Loan Consent and Repayment Plan Form, and defaulted staff loan files did not contain repayment schedules or loan amortization schedules.
Moreover, the audit found no evidence that the legal department had initiated legal proceedings against the securities pledged by separated defaulting staff. There were also no copies of demand letters or proof that collaterals were being liquidated. In addition, there was no evidence that staff on secondment at regional institutions, whose loans had automatically been classified as defaulted, were making monthly installments. The audit also noted the absence of meeting minutes from the Loan Review and Evaluation Committee during the period under review.
The GAC reported that the bank’s non-performing or defaulted loan portfolio amounted to US$472,053.00 for separated staff and US$240,634.80 for seconded staff.
According to the GAC, the failure to initiate and complete the loan consent and repayment plan form for exiting employees could impair loan repayment and facilitate the misappropriation of the entity’s funds. Non-payment of approved installments on staff loans could also disrupt cash flow and lead to non-compliance with staff loan agreements.
The GAC further noted that failing to take legal action against defaulting separated staff could result in a loss of funds and non-compliance with Sections 9.0, 9.1, and 9.2 of the August 2023 CBL Employee Staff Loan Policy.
Recommendations
The GAC recommended that CBL management provide substantive justification for not ensuring the completion of the Loan Consent and Repayment Plan Form by exiting employees. Management should also justify why legal action was not initiated against defaulted separated staff in accordance with the policy.
Management should engage the defaulted separated staff and initiate a payment plan for full settlement of all outstanding obligations. The payment plan should be agreed with and signed by both parties and Management should facilitate full compliance to the terms of the agreed payment plan. For defaulters who cannot be reached or who fail to comply with approved payment plan, Management should institute legal actions. This process should be initiated and fully operationalized within ninety (90) days after the issuance of the Auditor General’s Report to the National Legislature.
GAC’s Recommendations
The GAC also recommended that, going forward, Management ensure that all exiting staff with outstanding loan obligations complete the Loan Consent and Repayment Plan Forms. Management should evaluate the staff’s outstanding obligations against pledged collateral and amend for any variation, and facilitate periodic reviews and reconciliation of the staff loan portfolio. Non-repayment issues should be investigated and corrective actions taken promptly.
The GAC called for proper documentation of the staff loan portfolio, including detailed schedules of loans, analysis of repayments and outstanding balances, approved loan forms, and evidence of pledged collateral evaluation reports. These should be filed to facilitate future reviews.
CBL’s Response
In response to the findings, the CBL noted that many of the staff in question did not go through formal separation procedures with the bank. Those who did follow the formal process completed the necessary documentation.
The CBL stated, “Management has mandated the relevant departments to send demand letters to all defaulters, informing them to regularize their obligations to the bank. Failure to do so will result in the bank taking appropriate actions, including legal measures. Management is also in the process of establishing a recovery team to follow up on all uncollected loans from former staff.”
The credibility of the CBL has been under question following the damning audit report that led to the suspension of the bank’s Executive Governor, Alloysius Tarlue, by President Boakai. Amid the controversy, Nyemadi D. Pearson, Deputy Governor for Operations, resigned, raising concerns about the timing of her departure.
“Resignation in the middle of a damaging audit report that could be traced to her and other individuals?” questioned Anderson Miamen, Executive Director of the Center for Transparency and Accountability in Liberia (CENTAL). “Has it been established that Madam Pearson, Deputy Governor, is not involved in the discrepancies and financial malpractices reportedly carried out at the Central Bank of Liberia? Or is this about pressuring people to resign to create space for others?”
CENTAL and other observers are closely following the developments at the CBL, hoping that the audit, prosecution, and other processes are conducted impartially and with the intention of achieving true accountability for the reported excesses.
