Finance Ministry’s PSDI Loan Scheme:US$965.4K Missing

first_imgDr. James Kollie, Maritime Commissioner, was former Deputy Minister for Fiscal Affairs (MFDP) and signed all the loan approvals. President Sirleaf wants him to return from his trip abroad to answer to the audit.12 loan recipients disappear without traceBy Alvin WorziAn audit report on the Ministry of Finance and Development Planning (MFDP) has revealed that 24 borrowers who received cash loans amounting to US$965,400 have not made any repayment, according to the arrangement.The report also says an additional twelve (12) businesses received an amount of US$545,700, but none could be located anywhere in Liberia, and the telephone contacts of the individuals who owned these businesses were permanently switched off.The loan, through the Private Sector Development Initiatives (PSDI), was meant to financially strengthen Liberian owned businesses, which were expected to repay, and the repayments would revolve or be disbursed to other Liberian businesses.PSDI is a project established in 2014 at the MFDP to provide loans to Liberian owned small and medium sized enterprises (SMEs). The process would have created jobs and accelerated the participation of Liberian owned businesses in the economy.According to the auditors, during 2014 to 2016, the project disbursed US$2,274,400 to forty-six (46) borrowers. The report reveals that Dr. James F. Kollie, former Deputy Minister for Fiscal Affairs (MFDP), signed all the loan approvals while serving in the position.“Documents reviewed showed that out of an initial amount of US$1,991,900 that was disbursed to thirty-six (36) customers, only US$282,500 has been recovered. The recovered amount was re-disbursed to an additional ten (10) customers, thereby raising the portfolio to US$2,274,400. This means that the initial disbursement of US$1,991,900 is still outstanding,” the report states.Out of forty-six (46) borrowers, only Garson Incorporated, located on 11th Street, Sinkor, believed to be owned by Dr. James Kollie, paid its obligation of US$150,000 plus US$10,500 interest, amounting to a total repayment of US$160,500. Garson Incorporated’s account statement reveals that the institution has only an US$11.00 obligation outstanding.The Internal Audit Unit (IAU) of the Ministry of Finance and Development Planning conducted the financial and operational audit of the Private Sector Development Initiatives (PSDI).It said in May 2014, MFDP entered into a Memorandum of Understanding with the Liberia Bank for Development and Investment (LBDI) to partner and establish an account (GE Fund) through which the borrowers would receive their loans.The report also establishes that there was a Memorandum of Understanding reached between MFDP and LBDI to run the PSDI loan activities together; however, customers’ evaluation-vetting was squarely done by MFDP.However, the evaluation-vetting conducted by MFDP-PSDI Desk provided many loopholes for default.For example, there was no collateral to back the loan; many borrowers used the borrowed funds as start-up for their businesses, while there is no evidence of comprehensive market survey on file. This created a serious impediment for recovery, thereby defeating the project’s objective for the revolving fund.The modus operandi of the MOU, which was signed by MFDP, MOJ and LBDI, outlines as follows: that the Ministry of Finance shall recommend beneficiaries of the GE Fund to LBDI and submit application packages containing the following: business registration, business proposal/plan, and tax clearance, among others.Loans were disbursed to either businesses owned by MFDP staff, or businesses with whom they have close connections, “and some of those businesses have not paid a cent against their obligation,” the report says.The businesses include LELAH INC (US$40,000), Pure Life Incorporated (US$ 65,000), People’s Water Company Liberia LTD (US$65,700), South East Water Company (US$75,000), and Zianab Business Center (US$20,000).From 2014 to 2016, US$4,111,450 was credited at different intervals. Of the US$4,111,450, US$1,665,454.91 was transferred to the PSDI loan account for loan disbursements, while the balance of US$2,445,995.09 was withdrawn on multiple check transactions.“Our attention is drawn to a specific LBDI check number 133866, valued at US$1,648,037. We observed that the check was written as debit to the LPSEGF Account and correspondingly deposited to another account called GOL Operational Account (A/C Number 02-2-0530000182) at the CBL. Details are highlighted in the findings,” the report says.In Dr. James Kollie’s press statement he posted on Facebook, he denied any wrongdoing and said:“My attention is being drawn to an ongoing audit of the Private Sector Development Initiative (PSDI) over which I provided general supervision when I served as Deputy Minister of Finance. I am grateful to the President for affording me the opportunity to respond fully to the claims, assertions and accusations made in the draft audit report.“Although I was the subject of the audit, contrary to best practice, and until only a few days ago, I was never notified or interviewed by the auditors. My first encounter with the auditors was on June 2, a day after the draft report was issued.“Of course, these are challenging political times for our country. As such, it is easier to pass public judgments before we hear all the facts, and or muddle what ought to be important professional engagements with political motivations. I fully understand that this is the country in which we live and these are ongoing consequences of a life in public service.“However, I wish to assure the country and our international partners that I served the Ministry of Finance and Development Planning with dedication and professionalism, and conducted businesses there within the boundaries of the law and acceptable best practices.As such I intend to cooperate fully, as I have always done, to assist in satisfying this ongoing audit as well as reconfirm my continued commitment to financial probity and high standards of accountability in our country.“Without trying to further prejudice the draft audit report, I want to refrain from addressing specific claims or accusations made in the report at this time, and once again, assure Madam President and the entire country that I will fully cooperate with the audit and ensuing investigations for I am confident that I did nothing wrong.“As requested, I am returning to the country immediately.“Difficult as it may be, I urge all to keep an open mind as we deal with this draft audit report which was leaked with obvious sinister motives and prejudicial intentions.”On Thursday, President Ellen Johnson Sirleaf in a brief radio statement said “preliminary results of an ongoing audit process of the Private Sector Development Initiative at the Ministry of Finance & Development Planning, commissioned by the Minister of Finance, revealed some shocking outcomes and results that officials at the Ministry of Finance & Development Planning were making loans to themselves in violation of the law.”The President said the audit, which covers the period from 2014 to current, is being executed by the Internal Audit Agency.She said while the process is still ongoing, “We can say with a high degree of confidence that such a scheme set up at the PDSI is clearly a conflict of interest and will be dealt with by the full weight of the law.“Therefore, I have ordered the principal administrator of the program during the audit period, Commissioner of Maritime Affairs Hon. James Kollie to return to Liberia from his official trip to assist in the audit and answer all of the issues associated with it.”Meanwhile, the Minister of Finance is ordered to have a full audit report before the President within two weeks (June 23) for further action.The president said: “We…will leave no stone unturned in the interest of the nation.”Share this:Click to share on Twitter (Opens in new window)Click to share on Facebook (Opens in new window)last_img

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