MINISTRY OF HEALTH AND SOCIAL WELFARE AUDIT OF …

1 Quality in Everything We Do THE GOVERNMENT OF LIBERIA MINISTRY OF HEALTH AND SOCIAL WELFARE AUDIT OF THE HEALTH SECTOR POOL FUND FOR THE PERIOD MARCH 15, 2008 TO JUNE 30, 2009 SEPTEMBER 2009 THE GOVERNMENT OF LIBERIA MINISTRY OF HEALTH AND SOCIAL WELFARE AUDIT OF THE HEALTH SECTOR POOL FUND FOR THE PERIOD MARCH 15, 2008 TO JUNE 30, 2009 September 2009 E LIST OF ABBREVIATIONS AND ACRONYMS Abbreviations Meaning ADEC Accounts/Data Entry Clerk AHA Africa Humanitarian Action AMA Assistant Minister for Administration ANC Ante Natal Care ARI Acute Respiratory Tract Infection ARV Anti-Retro Viral BoB Bureau of the Budget BPHS Basic Package of HEALTH Services County HEALTH Officers CA Chief Accountant CHT County HEALTH Team CHW Community HEALTH Worker CMO Chief Medical Officer DFID Department for International Development DMA Deputy Minister for Administration DOTS Directly Observed Treatment.

2 Short Course Expanded Program of Immunization EOC Emergency Obstetric Care EY Ernst & Young EYGAM Ernst & Young Global AUDIT Methodology FRA Fiduciary Risk Assessment GDN Good Delivered Note GoL Government of Liberia GRN Goods Receiving Note HMIS HEALTH Management Information Systems Integrated Management of Childhood Illnesses Maternal and Child HEALTH IA Internal AUDIT IOUs I Owe You IPSA International Public Sector Accounting Standards JFA Joint Financial Agreement LIBR National Reference Library LPO Local Purchasing Order MCH Maternal and Child HEALTH ME Monitoring and Evaluation MERCI Medical Emergency and Relief International MoF MINISTRY of Finance MOHSW MINISTRY of HEALTH and SOCIAL WELFARE MSG Monitoring and Steering Group NACP National AIDS Control Program NBDC National Budget and Disbursing Chief NHP National HEALTH Plan NPA National Programme Accountant NPFA National Procurement, Fixed Assets, Stores and Payroll Accountant OFM Office of Financial Management OIC Officer in Charge (PHC clinic) OPD Out Patient Department THE GOVERNMENT OF LIBERIA MINISTRY OF HEALTH AND SOCIAL WELFARE AUDIT OF THE HEALTH SECTOR POOL FUND FOR THE PERIOD MARCH 15, 2008 TO JUNE 30, 2009 September 2009 E LIST OF ABBREVIATIONS AND ACRONYMS (CONT D) Abbreviations Meaning PA Physician s Assistant PCT Project Coordination Team (MOHSW)

3 PD Procurement Director PF Pool Fund PFA Pool Fund Accountant PFM Pool Fund Manager PFS Pool Fund Secretariat PFSC Pool Fund Steering Committee PHC Primary HEALTH Care PMU Pentecostal Missions Unlimited PPCC Public Procurement and Concessions Commission, Act 2005 PPG Payment Policy Guidelines PRS Poverty Reduction Strategy PRSP Poverty Reduction Strategy Paper PwC PricewaterhouseCoopers RH Reproductive HEALTH RN Registered Nurse SGBV Sexual and Gender Based Violence SIFC Senior International Financial Controller STI Sexually Transmitted Infection TB Tuberculosis TBA Traditional Birth Attendants TM Traditional Midwives TOR Terms of reference TTM Trained Traditional Midwives UNHCR United Nations High Commissioner for Refugees UNICEF United Nations Children s Education Fund VCT Voluntary Counseling and Testing WHO World HEALTH Organization THE GOVERNMENT OF LIBERIA MINISTRY OF HEALTH AND SOCIAL WELFARE AUDIT OF THE

4 HEALTH SECTOR POOL FUND FOR THE PERIOD MARCH 15, 2008 TO JUNE 30, 2009 September 2009 E TABLE OF CONTENTS SECTION PAGE REF 1. TRANSMITTAL LETTER 1 2. EXECUTIVE SUMMARY Background of the assignment Scope of the AUDIT and methodology AUDIT objectives Pre- AUDIT steps Output of the AUDIT Financial highlights Oversight governance Status of financial management Summary of key findings and recommendations Conclusion 2-11 3. FINANCIAL STATEMENTS A. HEALTH Sector Pool Fund Account General Information Independent Auditors report Balance sheet Statement of income and expenditure Statement of cash flows Notes to the financial statements B.

5 HEALTH Sector Pool Fund and Disbursement Account Receipts and Payments Accounts Independent Auditors report on compliance 12-26 4. MANAGEMENT LETTER Matrix of significant AUDIT findings Internal control issues and recommendations Financial management issues and recommendations Compliance issues and recommendations 27-61 5 FRAUD, ERRORS AND IRREGULARITIES 62 6 LESSONS LEARNT AND NEXT STEPS 63-64 7 APPENDICES List of Pool Fund Steering Committee and Program Coordination Team List of some documents reviewed Summary of activities and funding received Persons contacted during the course of the AUDIT Copy of bank confirmation response letter Management verbatim comments 65-76 TRANSMITTAL LETTER Ernst & Young Chartered Accountants G15, White Avenue Airport Residential Area Box KA 16009, Airport Accra, Ghana Tel: +233 2177 4275 / 9868 / 9223 / 2091 Fax: +233 2177 8894 A member firm of Ernst & Young Global Limited Partners: Ferdinand A.

6 Gunn, Wilfred Okine, Kwadwo Mpeani Brantuo, Victor C. Gborglah 1 September 21, 2009 The Deputy Minister of Administration MINISTRY of HEALTH and SOCIAL WELFARE Capital Bye Pass Monrovia, Liberia Attention: Hon. Vivian Cherue, Dear Hon. Cherue, MINISTRY OF HEALTH AND SOCIAL WELFARE AUDIT OF THE HEALTH SECTOR POOL FUND FOR THE PERIOD ENDED JUNE 30, 2009 We are pleased to present our final AUDIT report on the AUDIT of the MINISTRY of HEALTH and SOCIAL WELFARE HEALTH Sector Pool Fund for the period March 15, 2008 to June 30, 2009. Our report is structured as follows: Section 1: This transmittal letter.

7 Section 2: Executive summary. Section 3: Financial statements and reports thereon. A. Pool Fund Account. B. Pool Fund Disbursement Account. Section 4: Management letters. Section 5: Fraud, Error and Irregularities. Section 6: Lessons learnt and next steps. Section 7: Appendices. We would like to express our appreciation to the management and staff of the MINISTRY of HEALTH and SOCIAL WELFARE and the Pool Fund Secretariat for their cooperation and assistance during the course of the AUDIT . Yours truly, Kwadwo Mpeani Brantuo PARTNER Email: For: Ernst & Young Chartered Accountants Accra EXECUTIVE SUMMARY THE GOVERNMENT OF LIBERIA MINISTRY OF HEALTH AND SOCIAL WELFARE AUDIT OF THE HEALTH SECTOR POOL FUND FOR THE PERIOD MARCH 15, 2008 TO JUNE 30, 2009 September 2009 E 2 Executive summary Background of the assignment The Government of Liberia (GOL) acting through the MINISTRY of HEALTH and SOCIAL WELFARE (MOHSW) is committed to ensuring the accessibility of effective HEALTH services at every level of the HEALTH system.

8 However, the large number of HEALTH actors in Liberia presents an enormous challenge to achieving alignment behind the National HEALTH Plan (NHP) and has resulted in excessive transaction costs for the government in addition to posing associated risks of high levels of aid duplication and inefficiency. In close consultation with its Development Partners, the Government of Liberia (GOL) therefore established a HEALTH Sector Pool Fund in March 2008. This is a closely supervised or co-managed pool fund, under the oversight of a Pool Fund Steering Committee (PFSC), chaired by the Minister of HEALTH and SOCIAL WELFARE . The MOHSW has established a Pool Fund Secretariat (PFS) is managed by PricewaterhouseCoopers (PwC) Associates Africa Limited, a firm of chartered accountants, which is an integral part of the MOHSW Office of Financial Management (OFM) that is responsible for providing centralized accounting, disbursement, and financial reporting services for all funds that are managed by MOHSW.

9 Contributing donors Donors who have signed up Joint Financing Agreements (JFA) with the GoL and contributing to the Pool Fund include: United Kingdom s (UK) Department for International Development (DFID); Irish Aid; United Nations Children s Education Fund (UNICEF); and United Nations High Commissioner for Refugees (UNHCR). In accordance with the JFAs, allocations from the Pool Fund are based on proposals initiated by MOHSW for the purpose of implementing the NHP. The proposal must initially be discussed and agreed by the PFSC, which will ensure consistency with the aims of the NHP and review of performance, reporting and AUDIT , as outlined in the JFA.

10 Scope of the AUDIT and methodology We were engaged to perform the AUDIT of the operations and transactions of the financial resources made available for the MOHSW HEALTH Sector Pool Fund for the program of work by all sources based on the JFA entered by contributing donors and the Government of Liberia. The AUDIT covered the period March 15, 2008 to June 30, 2009. Although the Pool Fund was established in March 2008, the AUDIT period was extended June 30, 2009, to align the pool fund fiscal year with that of the MOHSW. We executed the AUDIT in accordance with International Standards on Auditing (ISA) and conformed to the International Standards on Auditing and International Organization of Supreme AUDIT Institutions (INTOSAI) and guided by the relevant provisions of the JFA, MOUs, the provisions of the PPCC Act 2005, and the conditions of the relevant financing agreements.