July 2013 FrontpageAfrica; A closer examination of records and circumstances surrounding the alleged diversion of some $US13 million dollars given the Liberian government by the European Union suggests that the Ministry of Finance complied fully with the PFM and National Budget Laws in dealing with the EU budget support to the post-war nation.
As the EU prepares to continue its support to the health sector by providing additional funding under its 11th EDF, the facility through which it administers aid support to the GOL, analysts believe the EU has received the appropriate explanation from the GOL and has decided to continue financing through the “sector budget support” mechanism, a framework introduced some three years now.
However, Multiple sources in both government and international circles acknowledged to FrontPageAfrica that there is a problem over the lack of coordination and communication between the Ministries of Health and Finance with a senior Executive Mansion source speaking to FrontPageAfrica strictly on condition of anonymity that the issue could have been easily resolved had the two ministers taken time to understand one another.
Health Minister Controls Sector
FrontPageAfrica has gathered that the money was indeed wired from Brussels directly into the General Revenue Account and an appropriate Government Flag receipts were issued erasing earlier suggestions that the funds were inappropriately used.
Last week a delegation from the EU visiting Liberia reportedly had closed-doors meetings with President Ellen Johnson-Sirleaf, Health Minister Dr. Walter Gwenigale and Finance Minister Amara Konneh at which time sources inform FrontPageAfrica it was enforced by the EU that the Health Sector is under controlled of the Health Minister. Thus, the Minister of Finance should always liaise with him when making spending decisions that affect the Heath Sector.
Equally, the source told FrontPageAfrica, Minister of Health should understand that the Health Ministry is not the Health Sector and spending on other entities in the sector does constitute spending on health. “The money does not have to be given to Health Ministry before it constitutes health sector spending. This is a simple issue of communication that could have been avoided. It is good that our public financial management system is still intact and that the public is still paying attention,” said a source who was privy to those discussions.
Funds Never Diverted
Finance Minister Konneh averred to FrontPageAfrica via phone on the weekend that the European Union support to the government of Liberia was never diverted or missing. “All monies paid by the European Union and other Development Partners to the Government of Liberia as budget support were deposited into the General Revenue Account at the Central Bank of Liberia,” Minister Konneh told FrontPageAfrica.
Konneh explained that appropriate flag receipts were issued and not only were flag receipts issued, but the monies were booked in the Government of Liberia “Tax Administration System. “There is no single shred of evidence that the EU or any other money was withdrawn from the CBL for purpose other than Government’s business. Absolutely no one pocketed any US$13 million.
Finance Ministry officials explained that the EU support to Liberia is not any kind of extra money but was in fact, a part of the approved FY12/13 National Budget. “The US$672 million approved FY12/13 National Budget included the EU $13 million. The EU $13 million was part of the total revenue envelop that was appropriated by the National Legislature. It was included under the “GRANT” component of the Budget,”
The total grant in the National Budget was US$45 million broken down as follows:
USAID (FARA), US$ 8.9 million; African Dev. Bank, US$12.2 million; European Union (EU) US$24.5 million; EU General Budget Support, US$11.3 million and EU Sector Budget Support, US$13.2 million.
According the Finance Minister, all of the US$45 million received from various partners were deposited into the General Revenue Account at the Central Bank of Liberia. More importantly, the EU $13 million health sector support was included in the Health Sector Budget as per the FY12/13 approved Budget. Page 43 of the approved FY12/13 National Budget shows that total appropriation for the Health Sector is approximately US$71 million. The same page shows that Health Sector expanded only US$44 million in FY11/12. Of the US$44 million spent on Health Sector, US$6 million came from donors broken down as follows: The French government donated US$1 million and USAID (FARA) donated US$4.8 million. This means that Government of Liberia contributed US$39 million to the Health Sector in FY11/12. That the FY12/13 budget shows US$71 million for Health Sector, means that a total of US$32 million was added to the Health Sector Budget.
Donors chipped in
In essence, FrontPageAfrica has been informed, the US$32 million to the Health Sector Budget derived from donors who chipped in US$28 million, USAID (FARA), US$14 million;; EU Budget Support US$13 million; French Government, US$ 1 million; Government of Liberia, US$4 million
The breakdown, according to the ministry suggests that the Health Sector Budget did include the US$13 million from EU. “To make an argument that Health Sector did not get the US$13 million from EU means that Health Sector Budget would have to be US$84 million. This cannot be the case because the National Legislature only approved US$71 million for Health Sector inclusive of the US$13 million from the EU.”
Despite the breakdown, critics and financial experts are raising concerns over why the Mof and the government took so long to respond to the allegations and controversy surrounding the mystery of the funds from the EU intended to combat maternal mortality and morbidity.
The controversy heightened suspicions that authorities had diverted funds to combat one of the major causes of deaths to mothers and newborns in Liberia which ranks 7th in the world for highest rate of maternal mortality. Chad, Somalia, Sierra Leone, Central African Republic, Burundi and Guinea-Bissau are all worse. In 2012 there was an infant mortality rate of 72.71 out of 1,000 births, in 2009 138.24 out of 1,000 and in 2006 there were 155.76 out of 1,000. Liberia is 18th in the world for infant mortality. Globally, in 2010 there were 770 maternal deaths out of 100,000 live births; in 2008 there were 990 out of 100,000.
The report heightened fears that the European Union could cut millions of dollars in funding to Liberia unless the government could explain how EURO 10 million (US$13 million) intended for the health sector to combat Maternal Mortality and Morbidity was expended in less than four months without reaching the fund’s intended target.
The controversy was triggered by a letter written by Finance Minister Amara Konneh on February 7, 2013 in which Minister Konneh notified Minister Gwenigale that the EU funds to combat maternal mortality and morbidity was available and requested Minister Gwenigale to provided the Ministry of Finance with an account number where the funds could be deposited.
In the letter, Minister Konneh acknowledged that the funds were indeed intended to combat maternal morbidity. “I wish to present my compliments and inform you that the government of Liberia has signed a financing agreement with the European Union (EU) for support to the National Health Plan and the Road Map for accelerating the Reduction of Maternal Morbidity and mortality in Liberia, funding under the 10th European Development Fund Package,” the minister wrote.
Konneh wrote that the first fixed tranche had been disbursed amounting to US$13,000,000.00 into the Government’s Revenue Account to have this money transferred to the Ministry of Health and Social Welfare and to improve our accuracy in reporting, kindly send us the Bank Account details to which this money is to be remitted and an implementation plan for its usage as soon as possible.”
Letters trigger dilemma
Dr. Gwenigale replied Minister Konneh on February 21, 2013 and provided the MoF with the account number of the Health Ministry.
Wrote Gwenigale:”I present my compliments and thank you for confirming that the Government of Liberia has signed a financing arrangement with the European Union for support to the Maternal Health Plan and Road Map for accelerating the Reduction of Maternal Morbidity and mortality in Liberia. You further stated that US$13,000,000.00 is in the government ‘s revenue account and is ready to be transferred to the Ministry of health and social welfare. The Ministry’s implementation plan, as previously discussed is to place the funds in the MH&WSC sector pool fund (HSPF) to be managed, disbursed, monitored and reported in accordance with donor to the HSPF and upon signing the joint financing arrangement with the MG&SW, the Ministry of Finance will sit as a donor on the HSPF Meeting Committee. The HSPF steering committee receives project proposals from the MG&SW that are aligned with the ten-year national health plan and after thoroughly reviewing proposal’s program and budget; they authorized the funding for the projects. The HSPF issues quarterly and annual reports, as well as annual audited financial and risks reports to the HSFP steering Committee and general public.”
Minister Gwenigale went on to give the account number of the MoH but the funds were never deposited there.
The two letters were bolstered by an email response to FrontPageAfrica by Tomas Niklasson, Chargé d’affaires for the Delegation of the European Union to Liberia who explained that the European Parliament, approved a grant of EUR 42 million for a sector budget support programme, recognizing that fighting maternal mortality is a priority in Liberia.
Niklasson explained that following an assessment of the pre-conditions previously agreed with the Government of Liberia and in line with the Financing Agreement, a first tranche of EUR 10 million was disbursed in December 2012 by the EU to the Treasury (Central Bank).
Added Kiklasson: “The purpose of the EU programme is to support the implementation of the National Health Plan and to the Road Map for reducing Maternal Mortality and Morbidity using sector budget support as implementing modality. This means that the payments to the Treasury are done according to several conditions of progress in the implementation of the health plan and the road map as well as in the achievement of annual targets for the health sector including maternal health. Sufficient funding of the sector is a condition for progress in the implementation of the sector plan and the road map.”
Niklasson warned that if the sector does not have the necessary level of funding, there is a risk of low performance in the sector and, consequently, no payment or limited payment from the EU programme. “In conclusion, the EU guidelines on budget support are not prescriptive regarding the use of EU funds which, after payment to the Treasury, are fully merged with the funds provided by the Government of Liberia. However, satisfactory progress in the health sector needs to be proved before each new payment.”
Sierra Leone example encouraging
The mystery surrounding the missing EU funding has triggered interests in Liberia’s war against maternal mortality and morbidity with many wondering why Liberia is still lagging behind when other countries, especially, Sierra Leone, where local communities are being encouraged to rate their clinics and demand more from their healthcare services in a bid to cut that country’s high maternal mortality. One in every 21 women in Sierra Leone is at risk of death in child birth. Maternal death rates are falling, but an initiative to speed up progress has just been launched with the backing of the UK’s Department for International Development which is why the campaign there is aimed at empowering local communities to force healthcare up the political agenda by giving them the evidence they need to fuel arguments for higher standards.
But despite EU support in Liberia, most pregnant mothers are finding it difficult to get quality care.
Hospitals not feeling impact
At the Phebe Hospital in Suakoko, Bong County, for example where a FrontPageAfrica reporter visited recently, conditions are said to be deplorable with very little impact being felt by pregnant mothers. For many, the life and death of a mother and child depend on more than just the expertise of medical staff. Whether women have received pre-natal advice or not is proving significant.
Beatrice Thompson gave birth to a healthy baby girl on the hospital’s ward on a recent sweltering Monday marveled that giving birth on a hospital ward has become second nature. But for another woman, who asked for anonymity, visiting Phebe, the only referral hospital in central Liberia, was an unfamiliar experience and a last resort. The care the maternity nurses were able to provide was not enough to save the life of her child, who was delivered minutes after Beatrice’s boy began crying.
The staff at the hospital called it a “macerated birth” and say the baby died in the womb at least one day before being born – which was before her mother arrived at the hospital in serious pain. The staff at Phebe Hospital said they are on the forefront of the fight to reduce maternal mortality. Since the establishment of Phebe more than 50 years ago, the hospital has pioneered efforts with other institutions to provide quality, free pre-natal services.
These medical efforts have been accompanied by community outreach to local religious leaders, many of whom now deliver messages on family planning and safe childbirth during the widely attended Friday prayers.
Dr. Jefferson Sibley, the hospital administrator told FPA recently that contributions to the curbing of maternal mortality and morbidity would go a long way in the fight for little but crucial things like procuring fuel oil for the hospital’s ambulance. “The ambulance helps to go far distances in conveying expectant mothers to the hospital to curb maternal death. But we are still faced with the issue of procuring fuel for the vehicle because the funds are inadequate,” he said.
With so much riding on Liberia’s political renewal, critics say the government needs to do more to ensure that donor funding reaches the intended targets. But despite the long-awaited response from the Ministry of Finance, observers say the MoF needs to go a step further in explaining why the administrator of the Jackson F. Doe Hospital and Health Minister Gwenigale denied receiving the money.