SALARIES PAID TO MINISTRIES and AGENCIES

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					      REPUBLIC OF LIBERIA




    ANNUAL FISCAL OUTTURN FY2009/10


          MINISTRY OF FINANCE
              OCTOBER 2010




1
                                                                                           CONTENTS

Executive Summary .......................................................................................................................................................................................... 4
1.       Public Finance Performance .............................................................................................................................................................. 5
     1.1.        Original budget appropriations.............................................................................................................................................. 5
     1.2.        Revenue .............................................................................................................................................................................................. 7
     1.3.        Expenditure ...................................................................................................................................................................................... 9
         1.3.1.           Appropriation & Allotment ............................................................................................................................................ 9
         1.3.2.           Commitment........................................................................................................................................................................ 11
         1.3.3.           Cash Expenditure.............................................................................................................................................................. 12
         1.3.4.           Expenditure analysis ...................................................................................................................................................... 13
         1.3.4.1.              Payroll ............................................................................................................................................................................... 16
     1.4.        Cash flow analysis....................................................................................................................................................................... 26
     1.4.1.           Bank accounts.......................................................................................................................................................................... 27
     1.5.        Debt stock and service payments ....................................................................................................................................... 30
         1.5.1.           Domestic Debt .................................................................................................................................................................... 30
         1.5.2.           External Debt ...................................................................................................................................................................... 31
2.       Recent Macroeconomic developments & prospects........................................................................................................... 34
3.       Government Fiscal Policy ................................................................................................................................................................. 36
     3.1.        Recent Fiscal Policy .................................................................................................................................................................... 36
     3.2.        Fiscal Policy Outlook ................................................................................................................................................................. 38
4.       Conclusion and outlook ..................................................................................................................................................................... 42
Annex of public finance tables.................................................................................................................................................................. 44




2
Charts:

Chart 1: Revenue analysis ......................................................................................................................................................................... 9
Chart 2: Salaries paid to ministries and agencies................................................................................................................... 19
Chart 3: Total amount committed for fuel ................................................................................................................................... 21
Chart 4: Construction works ................................................................................................................................................................. 24
Chart 5: Cars commiteed by ministries and agencies .......................................................................................................... 25
Chart 6: Bank balances ............................................................................................................................................................................. 28
Chart 7: GDP Growth in Liberia .......................................................................................................................................................... 33
Chart 8: Inflation in Liberia ................................................................................................................................................................... 35


Tables:

Table 1: Original Revenue Projections 2009/10 ....................................................................................................................... 6
Table 2: Original Appropriation 2009/10 ...................................................................................................................................... 6
Table 3: Revenue Collection Performance ..................................................................................................................................... 8
Table 4: FY 2009/10 Appropriation and allotment by sector........................................................................................ 10
Table 5: Allotment analysis ................................................................................................................................................................... 11
Table 6: Commitment analysis ............................................................................................................................................................ 12
Table 7: Cash expenditure by functional sector ...................................................................................................................... 13
Table 8: Cash expenditure by economic classification ....................................................................................................... 13
Table 9: Budget execution analysis .................................................................................................................................................. 14
Table 10: Aggregate expenditure analysis .................................................................................................................................. 15
Table 11: Expenditure analysis by economic classification ............................................................................................ 15
Table 12: PRS expenditure analysis ................................................................................................................................................ 16
Table 13: Commitment against cash by quarter ..................................................................................................................... 16
Table 14: Revenue - Expenditure analysis .................................................................................................................................. 26
Table 15: Cash flows FY 2009/10 ................................................................................................................................................... 266
Table 16: Analysis of Closing Balance ............................................................................................................................................ 27
Table 17: FY 2009/10 Bank account balances.......................................................................................................................... 29
Table 18: Domestic debt stock ............................................................................................................................................................ 30
Table 19: Domestic debt service payments ................................................................................................................................ 31
Table 20: External debt Service Payments.................................................................................................................................. 32




3
EXECUTIVE SUMMARY

During the fiscal year 2009/10, the National Legislature approved a total of US$371.9 million, representing
an increase of nearly 25 per cent over the preceding year’s Budget of US$298 million.

 The revenue projection was more ambitious compared to the previous year’s budget; partly due to a
significant increase during the budget deliberation process at the National Legislature. Projections made
rose from US$347.0 million to US$371.9 million. This represents an upward adjustment of US$24.9 million,
or 7.2 per cent from the proposed Budget submitted by the President to the Legislature. Aggregated
revenue generated during the fiscal year was US$287.7 million, 22 per cent higher than the previous year,
yet equally lower than the original budget. Tax revenue increased by 13 per cent compared to fiscal year
2008/09 while non-tax sources realized a 262 percent increase. Compared with the projection non-tax
revenue was 50% lower, while tax revenue was 9% lower. Unanticipated changes in concessionary income
from Bong Mines/China Union accounted for both gains and shortfalls in non-tax revenue. The annual
budget initially incorporated US$43 million from this source but realized only US$20 million.

In terms of the composition of revenue sources, the original budget envisaged a share of 67 percent from
taxes, 27 from non-tax sources and 6 percent from external grants. This was compared to 84 percent from
taxes, 6 percent from non-tax sources and 10 percent from grants in the previous year. Nevertheless, actual
performance in fiscal year 2009/10 was 78 percent of returns in tax revenue, 18 percent in non tax and 5
percent in grants. This highlights the fact that both non-tax and grant sources are unreliable and contingent
on various internal and external factors .

On the expenditure side, total allotment and commitment increased by only 17.6 and 17 per cent
respectively. As a result, allotment from the appropriation remained as low as 83 per cent when compared
to 2008/09. Similarly the share of commitment was 79 per cent of the appropriation. This performance on
both allotment and commitment is largely on account of the lower revenue intake which ultimately led to
the adoption of a stringent risk management strategy of holding back about 15.7% of the original
appropriation.

Consistent with the cash-based balanced budget, expenditure performance has been driven by the revenue
performance. Consequently, there have previously been serious revenue shortfalls as a result of delays in
one-off payments from concessional agreements. The Ministry of Finance has therefore adopted a risk
management strategy (adopted by the House Committee on Finance, Ways & Means) to help mitigate the
impact of shocks created during budget execution. Monthly allotment of appropriation was guided by
efficient budget management and it was ensured that obligations are paid according to contractual terms
and available resources.




4
1. PUBLIC FINANCE PERFORMANCE

1.1. ORIGINAL BUDGET APPROPRIATIONS

This Fiscal Outturn fulfills the Ministry of Finance’s reporting requirements under Section 36[4] of the PFM
law. Pursuant to this, the Ministry of Finance through the Office of the President submitted on May 11,
2009, a draft budget of US$347.0 million to the National Legislature for ratification. During the ensuing
deliberations, the budget projection was increased by US$24.9 million or 7.2 percent, bringing the final
ratified budget to US$371.9 million. Included in this was US$2.8 million of unspent revenue from the
previous year of 2008/09. The revenue forecasts contained in the draft budget were underpinned by the
following core assumptions:

    1.    Nominal GDP growth of 5 per cent, a 37.5 per cent drop from the previous year’s growth of 8 per
         cent due principally to impacts of the global financial and economic crisis;
    2.   Average inflation of 3.3 per cent;
    3.   Increase in GST rate from 7 per cent to 8 per cent and 10 per cent for GSM service providers and
         alcoholic beverages as well as an increase in the excise on commodities with adverse social
         consequences;
    4.   Reduction in PIT and CIT rates from a maximum of 35 per cent to 25 per cent;
    5.   Maintenance of the CIT rate at 35 per cent for GSM communication companies;
    6.   The consummation of three key concession contracts- i.e. Western Cluster, China Union and BHP
         Billiton;
    7.   Continued freeze on import duty on rice equivalent of revenue foregone of about US$8 million;
    8.   Exchange rate of US$1.00 to L$66.00.

The revenue forecast was subdivided into three major components: Tax, Non-Tax and External grants. It
was expected that 66 per cent of total resources would come from tax revenue, 28 per cent from non-tax
revenue and 6 percent from external grant and direct budget support. An amount of US$2.8 million was
also included as unspent appropriation from FY2008/2009. The detailed revenue forecasts are presented
in Table 1.




5
TABLE 1: ORIGINAL REVENUE PROJECTIONS 2009/10

                                                                                                                    Variance vs. Variance vs.
                                               Forecast     Share of  Outturn      Share of  Forecast    Share of    Forecast       Outturn
                                               2008/09       total    2008/09       total    2009/10      total      2008/09        2008/09
                                              US$ million      %     US$ million      %     US$ million     %                  %y/y
Total revenue                                       277.7      100%        234.9      100%       369.1      100%            33%            57%
 Total tax revenue                                  203.0        73%       199.6        85%      246.8        67%           22%            24%
  Taxes on income and profits                         54.5       20%         65.8       28%        54.2       15%             0%          -18%
   o/w Individuals                                   20.2         7%        39.7       17%        25.6         7%           27%          -36%
   o/w Corporate                                     27.9       10%         25.9       11%        28.6         8%            3%           11%
  Taxes on property                                     1.8       1%           1.4       1%          2.1       1%           17%            47%
  Taxes on goods and services                         52.6       19%         43.1       18%        58.7       16%           12%            36%
   o/w Sales taxes                                   11.5         4%          9.2        4%       14.2         4%           23%           53%
   o/w Excise taxes                                    3.9        1%          5.0        2%          5.9       2%           53%           18%
   o/w Motor vehicles                                  3.5        1%          1.8        1%          3.7       1%            6%          108%
   o/w Maritime revenue                              16.0         6%        13.0         6%       21.3         6%           33%           64%
  Taxes on international transactions                 77.2       28%         88.0       37%      101.9        28%           32%            16%
   o/w Imports                                       76.2       27%         87.6       37%        95.7       26%            26%             9%
   o/w Exports                                         1.0        0%          0.4        0%          6.2       2%          527%        1593%
  Other taxes                                         17.0        6%           1.3       1%        29.9        8%           76%         2229%
   o/w Social Development Funds                      13.2         5%          0.0        0%       20.4         6%           54%              …
 Total non-tax revenue                                74.7       27%         11.6        5%      101.0        27%           35%          767%
  o/w Rent, including one-off payments               47.2       17%           3.1        1%       84.0       23%            78%        2629%
 Grants                                                 0.0       0%         23.6       10%        21.3        6%              …          -10%
Source: Department of Revenue, Ministry of Finance


In line with the principles of the current cash-based budget system, the amount of projected expenditure
was equal to the revenue estimates of US$371.9 million. This represented a 24.8 per cent increase over the
projected expenditure for FY2008/2009 and a 48.5 per cent increase over the total commitment for the
same fiscal year. As shown in Table 2, the Budget was appropriated to five sectors, with the Public and
Administrative Services Sector (PASS) receiving US$92.38 million; General Claims getting US$78.70
million; the Social and Community Services Sector (SCSS) with US$80.27 million; the Economic Services
Sector (ESS) receiving US$72.56 million, and the Rule of Law and Public Safety Sector (RLPS) with
US$48.00 million. As part of the commitment to ensure that spending policies are aligned with the PRS, the
Government of Liberia allocated 60 per cent of the 2009/10 National Budget towards the Poverty
Reduction Strategy (PRS) activities, 2 per cent higher than the previous fiscal year’s (2008/09) allocation of
58 per cent.

Compared to the outturn, the largest expected increases were found in the Economic Services and General
Claims Sectors. The significant increase in the ESS was on account of substantial allocations for road
construction, and rehabilitation of public buildings. Expenditure on capital acquisitions was expected to
double and a large increase in debt payments was also projected. The increases in the Rule of Law and
Public Safety, Social & Community Services and Economic Services Sectors underpinned the Government of
Liberia’s commitment to direct more resources towards PRS related activities. Public and Administrative
Services sector remained constant, reflecting government’s reallocation efficiency policy from
Administrative activities to service delivery.

Additionally, as Liberia reached the HIPC completion point, opportunity is once again available to borrow
prudently for investment purposes. Going forward, government’s borrowing will be directed towards
financing investments with sufficient social, economic or financial returns.


6
TABLE 2: ORIGINAL APPROPRIATION 2009/10



                                            Appr.       Percentage      Appr.     Percentage Change in 09/10
                                           2008/09        of total     2009/10      of total   Appr vs. 08/09
                                            US$ m             %         US$ m          %           %y/y
Appropriation by functional sector              298.1                       371.9                         25%
Public and Admin Services                        74.5           25%          92.4         25%             24%
Rule of Law and Public Safety                    36.8           12%          48.0         13%             30%
Social and Community Services                    63.1           21%          80.3         22%             27%
Economic Services                                51.6           17%          72.6         20%             41%
General Claims                                   72.1           24%          78.7         21%              9%
Appropriation by economic classification        298.1                       371.9                         25%
Personnel Expenses                               95.3           32%         120.7         32%             27%
Goods and Services                               75.5           25%          89.1         24%             18%
Transfers and Subsidies                          38.2           13%          53.3         14%             40%
Capital Expenditure                              47.9           16%          66.9         18%             40%
Capital Transfers                                27.6             9%         25.5           7%            -8%
Domestic and Foreign Debts                       13.6             5%         16.4           4%            21%
Source: Departments of Expenditure and Budget, Ministry of Finance



1.2. REVENUE

Total spendable resources for FY2009/2010 amounted to US$295 million, made up of US$287.7 million in
current revenue and a US$7.3 million balance brought forward from FY2008/2009. The FY2009/2010
generated revenue of US$287.7 million was 22 percent higher than the previous year, butUS$84.2 million
or 22.6 percent lower than the projected amount.

Tax revenue increased by 13 percent compared to FY2008/2009 while non tax sources grew by an
unprecedented 257 percent increase over the same period. Compared to FY2009/2010 projections,
however, both tax revenue and non-tax revenue underperformed by 9 percent and 50 percent respectively.
This revenue shock was attributable, in large part, to unforeseen challenges in receiving the signature
bonus from the Bong Mines/China Union concession for which only about half of the originally budgeted
US$ 43 million was realized during the course of the fiscal year.

Taxes on income and profits: Among the different kinds of tax revenue, taxes on income & profits,
particularly those from individual income and profits, performed quite satisfactorily, achieving 11 percent
growth on the FY2008/2009 outturn and 29 percent over the projection. This increase was spurred by
better tax awareness, compliance from individual taxpayers and better administration. Corporate income
taxes also showed continuous growth due to the improved quality of services being provided to large
taxpayers to enhance their compliance.

Property taxes remained a major challenge in tax administration during FY2009/2010. The situation was
somewhat mitigated by the granting of tax amnesty to property owners through an Executive Ordinance.
Notwithstanding, property taxes in FY2009/10 amounted to $1.6 million, 20 percent below the current
year projection and only 14 percent higher than the FY2008/2009 outturn. A plan for sustained future
7
public sensitization, including awareness of the amnesty is anticipated to improve compliance in
subsequent years and thereby increase collection.

Taxes on goods and services (sales taxes on goods and services, excise taxes, motor vehicles taxes, taxes
on permissions and maritime) registered US$48.7 million, a moderate 16 percent over receipts from the
previous fiscal year, but fell short of FY2009/2010 forecast by 17 percent. This is a departure from
previous periods when the outturns in this category out-performed projections. Although the government
continues to put in place more vigorous tax enforcement and administration mechanisms, the taxes in this
group are generally contingent on economic activities, which have suffered somewhat from the effects of
the international financial difficulties.

Taxes on international trade performed less favorably in FY2009/2010 than at any time in the past four
fiscal years. Proceeds from international trade amounted to US$91.8 million, a meager 2.7 percent increase
over the FY2008/2009 outturn and a 10 percent under-performance against the original projection. The
drop in collection arose principally from a slowdown in operations at the Freeport of Monrovia where tax
collection was automated with the introduction of the ASYCUDA software and tax administration system.
With the Freeport collectorate alone averaging almost 40% of total receipts from international trade, the
transitional delays arising from the introduction of the new system affected overall performance of taxes
on international trade.

TABLE 3: REVENUE COLLECTION PERFORMANCE

                                                                                                                                       2009/10 Growth over
                                              July-June (Actual)                        Risked Budget     July-June (Actual)      Actual     Budget      Risked Bud.
                                                   2008/09          Budget 2009/10         2009/10             2009/10           2008/09     2009/10      2009/10
                                             US$ mn       % sha.   US$ mn    % shar   US$ mn     % shar   US$ mn      % sha.                   %y/y
Total revenue                                    234.9                369.1              309.3               288.0                   +22.6       -22.0           -6.9
 Total tax revenue                               197.3        84.0    246.7      66.9    215.2       69.6    224.7        78.0         13.9        -8.9           4.4
  Taxes on income and profits                     63.2        26.9     54.2      14.7     49.7       16.1     70.2        24.4         11.0        29.5          41.1
   o/w Individuals                                37.1       15.8      25.6       6.9     24.7        8.0     40.0       13.9           7.9       56.6          62.0
   o/w Corporate                                  26.1       11.1      28.6       7.7     25.0        8.1     30.1       10.5         15.4          5.3         20.4
  Taxes on property                                 1.3        0.6      2.1       0.6       2.0       0.7       1.7        0.6         23.5       -19.3         -17.8
  Taxes on goods and services                     42.0        17.9     58.8      15.9     50.2       16.2     48.7        16.9         16.1       -17.0          -3.0
   o/w Sales taxes                                 9.4         4.0     16.3       4.4      9.9        3.2     10.9         3.8        16.1       -33.0          10.5
   o/w Excise taxes                                3.9         1.7      6.0       1.6      5.4        1.8      9.1         3.2       135.2        52.9          68.2
   o/w Motor vehicles                              1.8         0.8      3.7       1.0      2.9        0.9      2.6         0.9        42.1       -30.9         -12.1
   o/w taxes on perm.                             13.9         5.9     11.6       3.1     11.6        3.7      9.8         0.9       -81.6       -77.9         -14.7
   o/w Maritime revenue                           13.0         5.5     21.3       5.8     20.5        6.6     16.3         3.4       -24.2       -53.7         -20.4
  Taxes on international transactions             89.4        38.1    101.9      27.6     90.7       29.3     91.8        31.9          2.7         -9.8          1.2
   o/w Imports                                    88.0       37.5      95.7     25.9      87.4      28.2      91.4       31.7           3.8        -4.5           4.6
   o/w Exports                                     1.4         0.6      6.2       1.7      3.4        1.1      0.5         0.2       -67.8       -92.7         -86.6
  Other taxes                                       1.4        0.6     29.9       8.1     22.5        7.3     12.3         4.3       777.3        -58.9         -45.4
   o/w Social Development Funds                    0.1         0.0     20.4       5.5     17.0        5.5     10.9         3.8    10755.4        -46.7         -36.0
 Total non-tax revenue                            14.1         6.0    101.0      27.4     68.6       22.2     50.3        17.5       256.7       -50.2          -26.7
  o/w Rent, including one-off payments             2.5         1.1     20.9       5.7     58.2      18.8      40.6       14.1      1526.7         93.7         -30.3
 Grants                                           23.5        10.0     21.3       5.8     25.5        8.2     13.0         4.5        -44.6      -39.0          -49.0
Source: Department of Revenue, Ministry of Finance


Non-tax revenue: Total non-tax revenue projection was US$101.9 million, of which US$63 million, or 62
percent, was expected from one time concessional payments from, among others, Western Cluster (US$18
million), Bong Mines/China Union (US$40 million) and BHP Billiton (US$5 million). Actual collection,
however, remained at US$50.3 million, just under 50 percent of the projected level. In the case of Bong
Mines/China Union, merely US$20 million was realized, due to the negative impact of the financial crisis
and concessions were not ratified during the fiscal year as anticipated.



8
CHART 1: REVENUE ANALYSIS


    400                                                                                                                         4.5%
                                                                       10.0%              5.8%               8.2%
            US$m
    350                      21.3                                      6.0%                                                    17.5%
                                                                                         27.4%              22.2%
    300                     101.0           25.5
                                                             13.0
    250                                     68.6             50.3
              23.5
    200       14.1
                                                                       84.0%
    150                                                                                                                        78.0%
                                                                                         66.9%              69.6%
                            246.7
    100                                    215.2            224.7
             197.3
                           Grants                                                          Grants
     50                    Total non-tax revenue                                           Total non-tax revenue
                           Total tax revenue                                               Total tax revenue
      0
            July-June       Budget         Risked          July-June   July-June    Budget 2009/10      Risked Budget          July-June
             (Actual)      2009/10         Budget           (Actual)    (Actual)                           2009/10              (Actual)
            2008/09                       2009/10          2009/10     2008/09                                                 2009/10
      Source: Department of Revenue, Ministry of Finance                  Source: Department of Revenue, Ministry of Finance




1.3. EXPENDITURE

1.3.1. APPROPRIATION & ALLOTMENT

Risk Management Strategy: A thorough reassessment of the revenue projections for FY2009/2010
revealed that some US$59.7 million or 16 percent of the US$371.9 million revenue projections were
unrealizable. On the expenditure, US$58.5 million or 15.7% of the projected budget was deemed
unspendible. The difference of US$1.2 million came from extraordinary sources used to mitigate the effect
of the risk on public expenditure. The distribution of the budget risk among various functional categories
was as follows: US$17.02 million from General Claims, US$1.5 from Public Corporations, US$18.5 million
resulting from across-the-board adjustments to specific objects of expenditure, and US$21.9 million
determined through a prioritized, PRS sensitive adjustment by M+As. In the final analysis, only US$313.4
million or 84.5 percent of the approved budget was initially available for allotment.

Virements (Budgetary Transfer): Altogether, a total of US$14.8 million was shifted among budget lines,
M+As and functional sectors during the course of FY2009/2010. However, these shifts did not alter the
total resource envelope and the balanced budget policy remained intact.

Allotment: During the period under review, total allotment amounted to US$308.6 million, representing 83
per cent of the adjusted appropriation, but US$13 million or 4.5 percent in excess of the actual amount
available to spend (revenue plus brought-forward) outturn of US$295.7 million. This mismatch resulted
from the fact that allotments are normally processed on the basis of unrestricted cash balance at the start


9
of the month plus revenue projection for the month, hence, a revenue disturbance during the month when
allotments has already been issued could result in a revenue – allotment mismatch.

TABLE 4: FY 2009/10 APPROPRIATION AND ALLOTMENT BY SECTOR

                Original                              Adjusted       Processed                   Total
   Sector    Appropriation Transfers Risk Factor Appropriation       Allotment Reversals      Allotment
PASS                   92.4         5.3         -13.0        84.7           89.1     1.3               87.9
RLPSS                  48.0         1.7          -5.7        43.9           45.0     0.6               44.4
SCSS                   80.3         3.5          -8.2        75.6           69.6     1.2               68.3
ESS                    72.6         4.4         -14.5        62.4           62.3     3.5               58.8
GC                     78.7       -14.8         -17.0        46.9           53.4     4.1               49.3
TOTAL                 371.9         0.0         -58.5       313.4          319.3    10.7             308.6
Source: Department of Budget, Ministry of Finance


Reversals:- A total of US$10.7 million of processed allotment was reversed. Of this amount, US$4.1 million
was affected from the General Claims, while US$3.5 million was from Economic Services Sector. The high
reversals were largely on account of the risk strategy employed for which ministries and agencies were
constrained to re-appropriate before undertaking further expenditure. The bulk of reversals came under
GC, which account for 38.31% of total reversals; or 7.68% of the Processed Allotment for GC. The smallest
reversal, as a proportion of total reversals, is in RLPSS: 5.61% of total reversals. As a proportion of the
Processed Allotment this is also the smallest reversal. ESS sees a reversal of 5.62%; PASS a reversal of
1.46% and SCSS a reversal of 1.72%.




10
TABLE 5: ALLOTMENT ANALYSIS

                                                    Annual Actual
                                     2009/10 Share 2010/11 Share Growth
                                      US$ m      %    US$ m       %    %y/y
Allotment by functional sector          262.4           308.6            18%
Public and Admin Services                79.5     30%    87.8      28%   10%
Rule of Law and Public Safety            38.0     14%    44.4      14%   17%
Social and Community Services            64.9     25%    68.3      22%    5%
Economic Services                        45.1     17%    58.8      19%   30%
General Claims                           35.0     13%    49.3      16%   41%
Allotment by economic classification    262.4           308.6            18%
Personnel Expenses                       95.3     36%   114.0      37%   20%
Goods and Services                       80.2     31%    73.2      24%   -9%
Transfers and Subsidies                  37.3     14%    46.7      15%   25%
Capital Expenditure                      37.5     14%    41.3      13%   10%
Capital Transfers                         0.0      0%    19.5       6%      …
Domestic and Foreign Debts               12.2      5%    13.9       5%   14%
Source: Department of Budget, Ministry of Finance


1.3.2. COMMITMENT

For the purpose of this report, commitment refers to Government’s acknowledgment that it will formally
obligate funding. Consistent with Government commitment control measure, only US$292.7 million out of
the allotted US$308.6 million was effectively committed reflecting Government’s balance cash based
budget policy. The residual allotment lapsed in accordance with the Budget Act.

Commitment for the period under review amounted to US$292.7, an increase of 17 per cent over
FY2008/09. By functional classification, the highest increase of 45 per cent was seen on General Claims,
largely on account of transfers to the counties in the form of funds for social developments. Consequently it
is one of the sectors exhibited percentage share increase over the total commitment in the fiscal year from
13.5 per cent of last year to 16.6 per cent in fiscal year 2009/10.




11
TABLE 6: COMMITMENT ANALYSIS

                                                          Annual Actual
                                         2008/09      Share 2009/10       Share   Growth
                                         US$ m        %      US$ m        %         %y/y
Commitment by functional sector             250.5              292.7                 17%
Public and Admin Services                    76.0      30%       86.2      29%       13%
Rule of Law and Public Safety                36.8      15%       43.8      15%       19%
Social and Community Services                61.1      24%       66.0      23%        8%
Economic Services                            42.8      17%       48.3      17%       13%
General Claims                               33.7      13%       48.4      17%       44%
Commitment by economic classification       250.5              292.7                 17%
Personnel Expenses                           91.4      37%     113.9       39%       25%
Goods and Services                           73.4      29%       71.3      24%       -3%
Transfers and Subsidies                      40.9      16%       45.9      16%       12%
Capital Expenditure                          33.8      13%       31.5      11%       -7%
Capital Transfers                              0.0      0%       15.0       5%         …
Domestic and Foreign Debts                   11.0       4%       15.1       5%       37%
Source: Department of Expenditure, Ministry of Finance


1.3.3. CASH EXPENDITURE

Cash Expenditure represents amounts drawn from the bank account opened for budget execution for the
fiscal year 09/10. The methodology for reporting cash expenditure has changed between 08/09 and 09/10,
so the cash outturn for 09/10 is not directly comparable to the cash outturn in 08/09. In O8/09, the cash
expenditure was US$231.5m in ‘accounting cash expenditure’ – the amount of cash which hit the
government’s bank accounts between 1 July 2008 and 30 June 2009. For 2009/10 fiscal year, the
methodology has changed to report ‘Budget cash expenditure’ –the cash expenditure which is directly
related to commitments made against the 09/10 Budget. This excludes cash payments at the beginning of
the fiscal year which relate to commitments made in the previous fiscal period, and includes cash payments
after 30 June 2010 which fulfills commitments made against the 09/10 Budget. The opening of separate
accounts for revenue and expenditure has made it possible to easily track revenue and expenditure
operational funds.

Cash expenditure for the fiscal year 2009/2010 was US$277.62 Million representing 94.74 percent of the
total commitment for the same period.




12
TABLE 7: CASH EXPENDITURE BY FUNCTIONAL SECTOR

                                          Outturn    Share
                                          2009/10
                                           US$m          %
By functional sector
Public & Administrative Sector                85.1       30.7%
Rule of Law & Public Safety                   42.8       15.4%
Social and Community Services                 65.0       23.4%
Economic Services & Public Corporation        45.8       16.5%
General Claims                                38.9       14.0%
Total Cash Expenditure                       277.6
Source: Department of Expenditure, Ministry of Finance

Of the total cash of US$277.62 million, US$113.81 million or 41.00 percent was for Personnel cost,
US$70.74 million or 25.50 per cent for Goods & Services, US$44.23 million or 15.94 percent went to
Transfer & Subsidy. Capital Expenditure accounted for US$33.80 million or 12.21 percent while Domestic
and External debts accounted for US$9.94 million and US$5.1 million or 3.58 per cent or 1.84 per cent,
respectively.
TABLE 8: CASH EXPENDITURE BY ECONOMIC CLASSIFICATION

                                Outturn      Share
                                2009/10
                                 US$m           %
By economic classification
Personnel                         113.81         41.0%
Goods & Services                   70.74         25.5%
Transfers & Subsidies              44.23         15.9%
Capital Expenditure                33.80         12.2%
Domestic Debt                       9.94          3.6%
External Debt                       5.10          1.8%
Total Expenditure                  277.6
Source: Department of Expenditure, Ministry of Finance



1.3.4. EXPENDITURE ANALYSIS

Appropriation, Allotment, and Commitment: The total appropriated budget for fiscal year 2009/10
indicated an increase of nearly 25 per cent over FY2008/2009. The total allotment and commitment,
though significantly lower than original appropriation, showed slight increases from prior year, with 17.6
and 17 per cent respectively. Allotment from the appropriation remained as low as 83 per cent compared
to 88 percent in FY2008/2009. Similarly, commitment as a proportion of appropriation was 79 percent
compared to 84 percent in the previous fiscal year. In keeping with the cash-based balanced budget, MoF
13
managed to avoid commitment exceeding revenue and allotment. On the whole the actual expenditure for
FY2009/2010 was a lower proportion of appropriation in comparison to FY2008/2009. This was primarily
due to:

         The adoption of a Risk Management Strategy by the Government of Liberia to mitigate the impact of
         the short fall revenue intake;
         Allotment and commitment for capital expenditure in the first half of the fiscal year 2009/2010
         were restrained.;
         Collaborative efforts with the Public Procurement & Concession Commission and the General
         Services Agency to monitor the procurement process have help to streamline cost.


TABLE 9: BUDGET EXECUTION ANALYSIS


                                                              % of non-                                            % of risk   Growth
                               Fiscal year       % of        contingent             Fiscal year     % of original  adjusted      over
                                2008/09     appropriation Budget                     2009/10       appropriation appropriation 08/09*
 Ministry/Sector                  US$m            %                                    US$m                         %
Original Appropriation            298.2         100%                                   371.9           100%                     24.7%
Risk Adjusted Appropriation       270.3          91%            100%                   313.4            84%          100%        5.1%
Allotment                         262.4          88%            97%                    308.6            83%          98%        17.6%
Commitment                        250.5          84%            93%                    293.0            79%          93%        17.0%
Cash                              231.5          78%            86%                    277.6            75%          89%
Source: Departments of Budget and Expenditure, Ministry of Finance
* for Cash Expenditure, inter-year comparison is not valid because a different methodology has been used in each year: Budget Cash for 2009/10,
and Accounting Cash for 2008/09

Commitment versus Allotment:– Of the US$308.63 (83% of appropriation) that was allotted, effective
commitment was US$293.04 million, representing 94.9 per cent of the total allotment. In keeping with the
cash based balanced budget rule and existing expenditure control regulations, commitment did not exceed
revenue outturn.

The total budget for the reporting period was US$371.90million representing an increase of US$73.7
million or 24.7 per cent over FY2008/2009 budget of US$298.2 million. Allotment totalled US$308.7
million or 17.6 percent more than allotment for the previous year. Commitment for the same period
amounted to US$291.9Million representing a 16.5 per cent increase over FY2008/2009 commitment of
US$250.5million. This was a reflection of the Government’s desire to expand its resource absorption
capacity by increasing spending. Compared to 88 percent absorption rate for FY2008/2009, commitment-
to-appropriation ratio for FY2009/2010 was 79 percent against the original appropriation of US$371.9
million but 93 percent of the risk-adjusted budget of US$313.4 million.




14
TABLE 10: AGGREGATE EXPENDITURE ANALYSIS

                                         % of Orig.
                               FY09/10       Appr.
Appropriation                    371.9        100%
Risk Adjusted Appropriation      313.4         84%
Allotment                        308.6         83%
Commitment                       292.7         79%
Disbursed expenditure            292.4         79%
 CMC approvals                   242.5         12%
 EDP                               44.3         1%
 Direct debit                       5.6         1%
Cash Expenditure                 277.6         75%
Bal. In appropriation              63.3        17%
Bal. In risked appropriation        4.8         1%
Bal. In allotment                  16.0         4%
Source: Departments of Budget and Expenditure

TABLE 11: EXPENDITURE ANALYSIS BY ECONOMIC CLASSIFICATION

                                                                                                                 % of
                                Allotment              % of Appr.        Commitment        % of Allot   Cash    Comm.
Sectors                                                    %               US $ m              %       US $ m     %
Personnel                                 114.0                  94.5%            113.9          99.9%    113.8   99.9%
Goods and Services                         73.2                  82.2%              71.3         97.4%     76.7 107.6%
Transfers and Subsidies                    46.7                  87.6%              45.9         98.3%     44.2   96.4%
Capital Expenditure                        41.3                  61.8%              31.5         76.1%     13.5   43.0%
Capital Transfers                          19.5                  76.5%              15.0         77.0%     14.3   95.0%
Debt Payments                              13.9                  84.9%              15.1        108.3%     15.0   99.6%
Total                                     308.6                  83.0%            292.7          94.8%    277.6   94.9%
Source: Departments of Budget and Expenditure, Ministry of Finance




PRS alignment: - Noting that all poverty reduction strategy (PRS) related appropriation was 60 percent of
total budget, the Ministry of Finance tracked the actual amount that was spent on core high profile PRS
deliverables, i.e. infrastructure (Public Works), social services (education, health and WATSAN), and
economic revitalization (agriculture). In order to achieve PRS objectives government expenditure policy is
designed to finance critical areas identified in the strategy. Furthermore, the PRS committed the
Government to allocate available resources to such areas acknowledged as having direct impact on poverty
reduction and improving the living standard of citizens. Concomitant this with aim, a total of US$ 119.3
million or 32 per cent has been allocated to the basic PRS service delivery sectors including health,
education, roads, agriculture, water and sanitation. However, their share from the total allotment and
commitment were relatively lower; allotment and commitment to the aforesaid sectors remained 31.6 %
29% of the respective totals. Obviously these sectors incorporate relatively more capital expenditures than
others, and as capital expenditure is the first victim in the process of cutting expenditures expenditure in
these sectors is likely to fall to a larger degree.
15
TABLE 12: PRS EXPENDITURE ANALYSIS

                             Original
                            Appropriati                                July-June Outturn
                                on        Allotment   % of Appr.     Commitment       % of Allot. Cash % of Comt.
 Ministry/Sector                                                                          %       US$      %
Public Works                       39.9         30.8         77.1%             20.8         67.6% 19.1      91.9%
Education Sector                   43.3         39.8         92.0%             38.7         97.3% 38.7     100.0%
Health Sector                      27.3         21.2         77.7%             20.1         94.8% 20.1     100.0%
Agriculture Sector                  7.3          4.4         60.2%              4.2         96.7%   4.0     95.7%
WATSAN (LWSC &MCC)                  1.5          1.4         91.1%              1.4         98.6%   1.3     97.6%
Total                             119.3         97.6        81.8%              85.3         87.4% 83.4      97.8%
Source: Departments of Budget and Expenditure, Ministry of Finance

Quarterly Analysis of allotment: It was also observed that allotments for the fourth quarter of the fiscal
year registered the highest amount at US$ 93.9 million (30.4%) of the total US$ 308.7million compared to
23.1, 23.9 and 22.1 % of the 3rd, 2nd and 1st quarter’s allotments respectively. This was unlike the previous
fiscal years where spending Ministries & Agencies requested more funding in order to jumpstart
operations at the fiscal year by frontloading requests for capital expenditure. This change was largely
attributed to the risk management strategy in the face of revenue shortfall early in the execution stage. As
the revenue situation improved slightly at the close of the fiscal year, allotment was increased in the fourth
quarter.

Quarterly commitment vs. cash: A comparison of commitment against cash on a quarterly basis reveals a
negative in some quarters; this is due to the roll over effect of commitment into cash.

TABLE 13: COMMITMENT AGAINST CASH BY QUARTER




1.3.4.1.    PAYROLL

The Financial record, of employees’ salaries, deductions and net salaries is processed in the Liberian
Dollars Electronic Data Processing Units (EDP), in the Department of Expenditure, Ministry of Finance.
During the year under review, the Electronic data processing section was able to successfully implement
and achieve governments’ goal for the payment of GOL Line ministries and agencies salaries on or before
the 20th of each month.

These activities were accomplished by setting up timeline for receiving and processing transactions from
line ministries and agencies. A transaction includes additions, deletions, deduction (insurance/salary),
16
change of name, salary change, transfer, promotion etc, of employee’s process through their various
ministries and the Civil Service Agency.

The Ministry of Finance established a Direct Deposit Scheme to decentralize the payments of civil servants
salaries in line with its institutional reforms. This effort is aimed at reducing the burden on government
employees within the rural areas, while ensuring strong financial accountability within the salary payment
process as well as promoting a national banking culture. This effort was expanded to six (6) out of the eight
(8) licensed commercial banks outside the epicenter of Montserrado County. Counties in which the scheme
is operational are Montserrado, Bong, Margibi, Lofa, Grand Capemount, Maryland, Grand Gedeh, Nimba and
Grand Bassa. Those counties yet to be included on the scheme are Bomi, Gbarpolu, Rivercess, Rivergee,
Sinoe and Grand Kru due to the non existence of banks in these counties.




17
                               MINISTRY OF FINANCE
                    PAYMENT TO DIRECT AND NON-DIRECT DEPOSIT
                        FOR FISCAL PERIOD ENDED 2009/2010
                                                                Number of
 NO.      MINISTRIES AND AGENCY                                 Employees        GROSS
                              MINISTRIES & AGENCIES UNDER DIRECT DEPOSIT
      1   National Legislature                                           2026   2,525,971.18
      2   Ministry of State                                               486     630,315.15
      3   Ministry of National Security                                   284     698,893.20
      5   Bureau of State Enterprises                                      24      32,435.00
      6   Ministry of Finance                                            1237   1,643,038.61
      7   Ministry of Planning                                            121     152,684.09
      8   Civil Service Agency                                            117     158,711.06
      9   General Service Agency                                          330     369,985.00
     10   National Food Assistant Association                              56      62,580.00
     11   Liberia Institute of Public Administration                       55      65,735.00
     12   Ministry of Gender & Development                                124     160,140.00
     13   Ministry of Foreign Affairs                                     320     404,971.82
     14   Ministry of Labor                                               170     196,930.15
     15   Ministry of Public Works                                        453     625,246.36
     16   Ministry of Information                                         304     346,549.55
     17   Center of National Documents & Records                          106     125,665.00
     18   Agriculture & Industrial Training Board                          34      46,390.00
     19   Ministry of Youth & Sports                                      180     220,235.00
     20   Ministry of Commerce                                            297     345,140.00
     21   Ministry of Postal Affairs                                      271     317,425.82
     22   Ministry of Transport                                           281     332,591.36
     23   Liberia Institute of Statistics & Geo-In                         91     221,530.00
             MINISTRIES & AGENCIES UNDER DIRECT DEPOSIT and NON DIRECT DEPOSIT
     1    Judiciary                                                      1492   1,881,125.64
     2    Ministry of Justice                                            3411   4,076,736.03
     3    Ministry of Internal Affairs                                   3871   4,246,044.55
     4    Ministry of Education                                          9815  15,924,039.39
     5    Ministry of Health                                             1980   2,429,374.03
     6    Ministry of Lands, Mines & Energy                               532     642,458.30
     7    Ministry of Agriculture                                         296     375,005.00
                           MINISTRIES & AGENCIES UNDER NON DIRECT DEPOSIT
     1    Pension                                                       15368   5,048,758.82
          TOTAL                                                                44,306,705.11
                                                                                         -
          GRAND TOTAL                                                 44,132  44,306,705.11




18
CHART 2: SALARIES PAID TO MINISTRIES AND AGENCIES


                                  SALARIES PAID TO MINISTRIES and AGENCIES
                                                                       Series1

                                      Pension                                 5,048,758.82

                     Ministry of Agriculture       375,005.00
         Ministry of Lands, Mines & Energy          642,458.30
                         Ministry of Health                  2,429,374.03
                      Ministry of Education                                                     15,924,039.39
                 Ministry of Internal Affairs                          4,246,044.55
                         Ministry of Justice                          4,076,736.03
                                   Judiciary               1,881,125.64

      Liberia Institute of Statistics & Geo-In     221,530.00
                         Ministry of Transport      332,591.36
                     Ministry of Postal Affairs     317,425.82
                       Ministry of Commerce         345,140.00
                   Ministry of Youth & Sports      220,235.00
     Agriculture & Industrial Training Board      46,390.00
  Center of National Documents & Records          125,665.00
                      Ministry of Information       346,549.55
                     Ministry of Public Works        625,246.36
                             Ministry of Labor     196,930.15
                   Ministry of Foreign Affairs      404,971.82
        Ministry of Gender & Development          160,140.00
   Liberia Institute of Public Administration     65,735.00
        National Food Assistant Association       62,580.00
                      General Service Agency        369,985.00
                          Civil Service Agency    158,711.06
                          Ministry of Planning    152,684.09
                           Ministry of Finance             1,643,038.61
                  Bureau of State Enterprises     32,435.00
                 Ministry of National Security        698,893.20
                              Ministry of State      630,315.15
                          National Legislature                 2,525,971.18



The fiscal year 2009/2010 began with 48,773 employees. During the period, a total of 4,113 employees
were added through the regular, supplementary, and pension payroll. Of the total addition of 4,113
employees in the fiscal year, 1,950 employees representing 47.41 percent were new recruitments made
during the period. 321 or 7.8 percent were the number of employees that were reinstated during the
period. Supplementary payroll employees accounted for 1,279 or 31.10 percent of the total addition while
563 or 19.87 percent were employees that were added as the result of pension during the fiscal year
2009/2010. The pensioners were in two categories: regular payroll pensioners (employees who goes
through the regular civil servant processes for employment and retired honorably either due to age or
tenure) and non payroll pensioners (employees who do not go through the regular civil servant process, for
example, security officers-SSS, LNP, etc.). The total pension accounted for 15,368 employees or 35% of the
overall payroll. The fiscal year closed with 44,132 employees, which was the net effect of the additions and
deletions made during the period. The totals of 7,482 employees were deleted during the period. Of the
total deletion, 1,126 employees or 15.05 percent were as a result of dismissal. 8 employees or 0.11 percent
were employees that resigned; 1,860 employees or 24.86 percent were deleted due to Ministry of Finance
vigorous payroll cleanings exercise; 459 employees or 6.13 percent were employees that were deleted
19
from the regular payroll and transferred to the pension payroll. 342 employees or 4.57 percent were
deleted due to death, while 3,687 employees were deleted as the result of the General Auditing Commission
(GAC) audited reports for the period. Of the total names recommended by the GAC for deletion, the total of
2,028 or 55 percent were vetted and placed back on the payroll.




20
Amount for Fuel was committed by ministries and agencies during the year. See chart below depicting the
amount committed.
CHART 3: TOTAL AMOUNT COMMITTED FOR FUEL




The total amount spent for personnel cost in the fiscal year 2009/2010 was 113.9m. Of this amount, payroll
(L$) accounted for US$44.3m or 38.9 percent while allowances accounted for US$68.72m or 60.33 percent
and other personnel accounted for 0.88 or 0.7 percent . Below is a table showing spending entities and the
amount spent during the period under review.


21
                           Ministry of Finance
            Payment of Allowance of Ministry and Agencies
               For the fiscal period ended June 30, 2010
A I T B                                                       79,648.00
BUREAU OF STATE ENTERPRISE                                    49,188.00
C D A                                                        119,516.00
C N D R A                                                    182,228.00
CIVIL SERVICE AGENCY                                         447,997.52
ENVIRONMENTAL PROTECTION AGENCY                              334,800.00
FORESTRY DEVELOPMENT AUTHORITY                              2,160,892.00
GENERAL ALLOWANCE EQUALIZATION FUND                            6,000.00
GENERAL AUDITING COMMISSION                                 2,468,013.00
GENERAL SERVICES AGENCY                                      306,763.00
GOVERNANCE COMMISSION                                        525,156.00
HONORARIUM                                                   208,250.00
HUMAN RIGHTS COMMISSION                                      366,038.00
L I B R                                                      160,843.00
L I P A                                                      352,789.00
L I S G I S                                                  916,127.00
L R R R C                                                    503,117.00
LIBERIA ANTI- CORRUPTION COMMISSION                         1,017,667.00
LIBERIA BROADCASTING SYSTEM                                  298,259.00
LIBERIA COPY RIGHT OFFICE                                     40,634.00
LIBERIA INDUSTRIAL PROPERTY SYSTEM                            24,538.00
MIN. OF FOREIGN AFFAIRS                                     3,715,346.91
MIN. OF INTERNAL AFFAIRS                                    1,127,903.23
MIN. OF YOUTH & SPORTS                                       384,021.85
MINIMUM SALARY ADJUSTMENT FUND                                15,220.00
MINISTRY OF AGRICULTURE                                     1,033,710.36
MINISTRY OF COMMERCE                                         331,583.09
MINISTRY OF EDUCATION / CENTRAL                             2,881,409.97
MINISTRY OF FINANCE                                         5,322,557.82
MINISTRY OF GENDER & DEV                                     265,550.15
MINISTRY OF HEALTH & WELFARE                                3,289,110.18
MINISTRY OF INFORMATION                                      482,781.45
MINISTRY OF JUSTICE                                         6,988,674.85
MINISTRY OF LABOUR                                           655,623.85
MINISTRY OF LANDS & MINES                                    789,633.70
MINISTRY OF NATIONAL DEFENSE                                4,848,001.00
MINISTRY OF NATIONAL SECURITY                                155,050.48
MINISTRY OF PLANNING                                         469,978.47
MINISTRY OF POSTAL AFFAIRS                                   368,999.12
MINISTRY OF PUBLIC WORKS                                    2,115,813.09
MINISTRY OF STATE                                           1,347,147.00
MINISTRY OF TRANSPORT                                        531,777.05
MONROVIA CONSOLIDATED SCHOOL SYS                             169,377.91
N B I                                                        289,999.00
N F A A                                                       26,532.00
N S A                                                        700,224.00
NATIONAL COMM. ON HIGHER EDUCATION                           172,536.00
NATIONAL COMMISSION ON DISABILITIES                          106,386.00
NATIONAL ELECTIONS COMMISSION                               1,669,849.00
NATIONAL INVESTMENT COMMISSION                               396,852.00
NATIONAL LEGISLATURE                                        7,574,823.76
PROFESSIONAL                                                  57,020.00
PUBLIC PROCUMENT AND CONCESSION                              553,795.00
RETIREMENT BENEFITS FOR FORMER LEGISLATORS                    64,000.00
S S S                                                       2,366,561.00
SAVERANCE PAYMENTS FOR NCDDRR CLOSURE                        603,777.00
THE JUDICIARY                                               5,358,723.21
VICE PRESIDENT OFFICE                                        396,702.00
WEST AFRICAN EXAMINATION COUNCIL                             526,632.00




22
                  Allowance Paid to Ministries and Agencies
                                                      Series1




               WEST AFRICAN EXAMINATION COUNCIL                  526,632.00
                                VICE PRESIDENT OFFICE           396,702.00
                                         THE JUDICIARY                                        5,358,723.21
        SAVERANCE PAYMENTS FOR NCDDRR CLOSURE                 603,777.00
                                                  S S S                 2,366,561.00
     RETIREMENT BENEFITS FOR FORMER LEGISLATORS            64,000.00
                PUBLIC PROCUMENT AND CONCESSION               553,795.00
                                         PROFESSIONAL      57,020.00
                                NATIONAL LEGISLATURE                                              7,574,823.76
                 NATIONAL INVESTMENT COMMISSION              396,852.00
                   NATIONAL ELECTIONS COMMISSION                     1,669,849.00
             NATIONAL COMMISSION ON DISABILITIES          106,386.00
           NATIONAL COMM. ON HIGHER EDUCATION              172,536.00
                                                 N S A         700,224.00
                                               N F A A    26,532.00
                                                  N B I     289,999.00
              MONROVIA CONSOLIDATED SCHOOL SYS             169,377.91
                              MINISTRY OF TRANSPORT           531,777.05
                                    MINISTRY OF STATE              1,347,147.00
                           MINISTRY OF PUBLIC WORKS                     2,115,813.09
                          MINISTRY OF POSTAL AFFAIRS        368,999.12
                                MINISTRY OF PLANNING         469,978.47
                     MINISTRY OF NATIONAL SECURITY         155,050.48
                      MINISTRY OF NATIONAL DEFENSE                                        4,848,001.00
                          MINISTRY OF LANDS & MINES               789,633.70
                                  MINISTRY OF LABOUR             655,623.85
                                   MINISTRY OF JUSTICE                                            6,988,674.85
                           MINISTRY OF INFORMATION              482,781.45
                      MINISTRY OF HEALTH & WELFARE                               3,289,110.18
                           MINISTRY OF GENDER & DEV         265,550.15
                                 MINISTRY OF FINANCE                                          5,322,557.82
                  MINISTRY OF EDUCATION / CENTRAL                              2,881,409.97
                              MINISTRY OF COMMERCE          331,583.09
                            MINISTRY OF AGRICULTURE             1,033,710.36
                MINIMUM SALARY ADJUSTMENT FUND            15,220.00
                              MIN. OF YOUTH & SPORTS        384,021.85
                            MIN. OF INTERNAL AFFAIRS            1,127,903.23
                             MIN. OF FOREIGN AFFAIRS                            3,715,346.91
                LIBERIA INDUSTRIAL PROPERTY SYSTEM        24,538.00
                            LIBERIA COPY RIGHT OFFICE     40,634.00
                       LIBERIA BROADCASTING SYSTEM          298,259.00
            LIBERIA ANTI- CORRUPTION COMMISSION                 1,017,667.00
                                               LRRRC         503,117.00
                                            L I S G I S        916,127.00
                                                L I P A     352,789.00
                                                L I B R    160,843.00
                         HUMAN RIGHTS COMMISSION            366,038.00
                                         HONORARIUM        208,250.00
                           GOVERNANCE COMMISSION             525,156.00
                           GENERAL SERVICES AGENCY          306,763.00
                     GENERAL AUDITING COMMISSION                         2,468,013.00
          GENERAL ALLOWANCE EQUALIZATION FUND             6,000.00
                  FORESTRY DEVELOPMENT AUTHORITY                       2,160,892.00
               ENVIRONMENTAL PROTECTION AGENCY              334,800.00
                                 CIVIL SERVICE AGENCY        447,997.52
                                            C N D R A      182,228.00
                                                 C D A     119,516.00
                         BUREAU OF STATE ENTERPRISE       49,188.00
                                                A I T B   79,648.00




23
Of the total US$19,107,843.00 for the fiscal year 2009/2010 committed the ministry of Public Works
accounted for US$14,240,162.00 representing 74.53 percent of the total commitment on construction
works. Next was the LIGIS followed by the Judiciary accounting for US$1,100,000.00 and 950,000.00 with
percentage of 5.76 and 4.98 respectively. See below a chart depicting the details of amount committed for
construction works.
CHART 4: CONSTRUCTION WORKS




24
Of the total of US$6,996,783.00 committed for cars, that 46.8 percent was committed for four spending
entities. The entities are: Ministry of Public Works US$476,742; Ministry of Agriculture US$ 566,880;
Ministry of Justice accounted for 1,123,545.00; LISGIS accounted for US$524,480 and Ministry of Internal
Affairs accounted for US$587,972.00. See below detail of amount committed for Ministries and agencies
Cars.
CHART 5: CARS COMMITEED BY MINISTRIES AND AGENCIES




25
1.4. CASH FLOW ANALYSIS

A total of US$288 million was generated, while US$ 7.8 million was added from the previous year unspent
cash balance which aggregated the fiscal year revenue to US$ 295.8 million. On the expenditure side,
US$308.6 million was allotted, whereas actual commitment was limited to US$ 292.7 million or about 98
per cent of the available envelope.
TABLE 14: REVENUE - EXPENDITURE ANALYSIS

Account                                                Amount % of Total
Current Revenue                                          288.0     +97.4
Revenue from Prior Period b/f                              7.8      +2.6
Amount available to spend                                295.8   +100.0
Allotment                                                308.6   +104.3
Commitment                                               292.7     +99.0
Cash                                                     277.6     +93.9
Variance
 b/w amount available & allotment                         -12.9          -4.3
 b/w amount available & commitment                          3.1          +1.0
 b/w amount available & cash                               18.2          +6.1
Source: Departments of Revenue, Budget and Expenditure, Ministry of Finance

TABLE 15: CASH FLOWS FY 2009/10


                                    Opening                      Amt    Commitm          Closing
                                    Balance      Revenue      Available   ent             Bal.
Month                                                       US$ million
Closing balance of prior fiscal year                                                       55.64
Amount to provided for outstanding checks, prior year obligations                          40.12
Monthly cash flows
Jul-09                               15.52         22.67        38.19           -10.64     27.55
Aug-09                               27.55         13.61        41.16           -17.53     23.63
Sep-09                               23.63         16.41        40.04           -24.23     15.82
Oct-09                               15.82         24.53        40.35           -25.03     15.32
Nov-09                               15.32         17.03        32.35           -18.61     13.74
Dec-09                               13.74         26.63        40.37           -24.65     15.72
Jan-10                               15.72         46.43        62.15           -23.70     38.45
Feb-10                               38.45         18.56        57.01           -25.13     31.88
Mar-10                               31.88         23.34        55.22           -18.86     36.35
Apr-10                               36.35         27.65        64.00           -26.66     37.35
May-10                               37.35         19.13        56.48           -24.66     31.82
Jun-10                               31.82         31.99        63.81           -53.08     10.73
Source: Departments of Revenue and Expenditure, Ministry of Finance




26
1.4.1. BANK ACCOUNTS

The Government of Liberia (GOL) operated ten bank accounts (4 United States dollar currency and 6
Liberian dollar currency) with the Central Bank of Liberia for the consolidated funds of GOL. The ten bank
accounts comprise five bank accounts operated up to fiscal year 2008/09 and are referred to as the old
bank account and 5 bank accounts opened solely for the execution of the fiscal year 2009/10 budget and
are referred to as the new bank accounts. The five new bank accounts opened for the execution of the fiscal
year 2009/10 budget comprise two bank accounts (United States dollars & Liberian dollars) for revenue,
two bank accounts (United States dollars & Liberian dollars) for expenditure and one Liberian dollar bank
account for payroll. The opening of separate bank accounts for revenue and expenditure put an end to the
co-mingling of revenue and expenditure in a single bank account. This was a major problem in reconciling
GOL’s bank account. Before the end of the FY 09/10, the five old bank accounts were closed and the
balances transferred to the new bank accounts for FY 09/10.

At the end of the fiscal year 2009/10 the balances in the five bank accounts were UDS$57,041,681.29 and
L$509,781,233.75. The aggregate closing bank balance using the exchange of LD 71:1USD is
US$64,221,700.67. The US$64,221,700.67 has been adjusted to US$10.73m based on outstanding checks
and other related transactions that are expected to be disbursed from GOL’s bank accounts. See Appendix
II for analysis of the US$64,221,700.67.
TABLE 14: ANALYSIS OF CLOSING BALANCE

                                            Cash Flows Analysis on Closing Balance
                                              For the period Ended June 30, 2010
                  Payroll Acct.   Operation Acct.   Revenue Acct.      Total        Operation Acct.   Revenue Acct.       Total
Month             139/140 (L$)       138 (L$)           137 L$       US$ Equv.        138 (US$)         137 US$        Per Month
July 31, 2009      4,319,683.83        12,719.38     11,833,411.25     227,687.53     3,434,546.20    11,530,890.16   15,193,123.89
Aug. 31, 2009      5,942,576.60     1,378,191.58     57,289,396.37     910,002.32     1,021,253.03    17,347,202.43   19,278,457.78
Sept. 30, 2009     5,364,406.63       652,581.68     48,181,918.42     763,364.88     5,519,289.99     8,148,187.22   14,430,842.09
Oct. 31, 2009      5,495,940.09     2,803,120.54     26,389,527.24     488,571.66     6,979,886.55    10,517,031.68   17,985,489.89
Nov. 30, 2009      5,356,265.96     1,979,287.95     63,217,313.48     993,702.36    13,513,035.15     7,443,960.94   21,950,698.45
Dec. 31, 2009      4,230,560.69     3,431,755.05     67,365,646.90   1,056,731.87    10,117,134.63     9,533,629.87   20,707,496.37
Jan. 31, 2010      1,150,107.75     7,321,981.18    192,165,197.49   2,825,877.27     1,898,154.72    41,661,826.05   46,385,858.04
Feb. 28, 2010        756,627.57     7,965,186.97     63,044,538.59   1,010,793.71     8,428,886.78    25,867,945.25   35,307,625.74
March 31, 2010       758,916.77     4,229,805.33    141,627,975.24   2,065,023.91    15,151,880.05    21,049,020.34   38,265,924.30
April 30, 2010     1,948,230.62     5,062,109.61     60,646,564.32     952,914.15    16,344,122.39    19,384,855.04   36,681,891.58
May 31, 2010       3,853,670.67     1,747,088.30    328,853,718.31   4,710,626.44    21,697,091.58    12,040,998.17   38,448,716.19
June 30, 2010    117,840,061.29   167,326,179.30    224,614,993.16   7,180,017.38    37,483,948.66    19,557,734.63   64,221,700.67




27
CHART 6: BANK BALANCES




Of the 64,221,700.67 million bank balance, the GOL Operation account accounted for 37, 483,948.66
million or 58.37 percent. GOL Revenue account accounted for 19,557,734.63 million or 30.45 percent. The
Liberian Dollar was converted at a rate of L$71:US$1. The converted GOL Liberian Dollars Operation
account accounted for 2,356,706.75 million or 3.67 percent, while the converted Revenue Account
accounted for 4.93 percent or 3,163,591.45 million. The converted GOL Payroll Account accounted for 2.58
percent or 1,659,719.17 million.




28
TABLE 15: FY 2009/10 BANK ACCOUNT BALANCES

         FISCAL YEAR 2009/2010 BANK ACCOUNT BALANCES
 ACCOUNT TITLE                      ACCOUNT #   BANK BALANCE
 GOL OPERATIONS A/C               0220530000138  37,483,948.66
 GOL REVENUE A/C                  0220530000137  19,557,734.63
 Sub-Total                                       57,041,683.29
 LRD ACCOUNTS
 GOL OPERATION A/C                0120530000138 167,326,179.30
 GOL REVENUE A/C                  0120530000137 224,614,993.16
 GOL PAYROLL A/C                  0120530000140 117,840,061.29
 Sub-Total                                      509,781,233.75
 United States Dollors Equavilent                 7,180,017.38
 TOTAL                                           64,221,700.67
Note: the Liberian Dollars was converted at a rate of L$71: US$1


Additionally, Section 27(2) of the Public Financial Management Act of 2009 states that; “All balance of
appropriations committed but not disbursed prior to the end of the fiscal year shall be available for the
settlement of those obligations within 90 days from the end of the preceding fiscal year…” In fulfillment of this
Law, the department disbursed the total of $43,721.414.88 reducing the account balance from US$
64,221,700.67 to US$20,500,285.79. The total outstanding check(s) against the US$20,500,285.79 is/are
US$9,770,473.11. This brings the net bank balance to US$10,729,812.68 at the close of the fiscal period.

Of the total US$ 43,721,414 cleared in the 90 days window, July accounted for US$23,020,776 or 52
percent; August accounted for 8,940,832 or 21 percent, while September accounted for US$11,759,807 or
27 percent.

The Public Administrative Services Sector accounted for US$9,881,169 or 23 percent of the total cleared
checks; the Rule of Law & Public Safety accounted for US$2,644,838 or 6 percent; Social & Community
Service Sector accounted for US$ 15,091,501 or 34 percent; Economic Services Sector accounted for
US$5,628,045 or 13 percent; Public Corporations Sector accounted for US$344,982 or 1 percent and Other
General Claims accounted for US$10,130,880 or 23 percent.

Personnel Cost accounted for US$8,773,949 or 20 percent; Goods & Services US$ 12,819,822 or 29 percent;
Transfers & Subsides accounted for US$15,046,641 or 34 percent; Capital Expenditure accounted for
US$5,816,148 or 13 percent; Domestic Debt accounted for US$ 872,853 or 2 percent; and External Debt
accounted for US$392,000 or 0.9 percent of the total amount.




29
1.5. DEBT STOCK AND SERVICE PAYMENTS

1.5.1. DOMESTIC DEBT

As of June 30, 2010, total valid domestic debt stock amounted to US$284.3million, indicating a decline of
US$6.3milion or approximately 2.2% compared to the debt stock reported for the same period of the
previous fiscal year. Of this amount, US$270.2million or 95.0% represented obligations to financial
institutions, namely, the Central Bank of Liberia (CBL), the Liberia Bank for Development and Investment
(LBDI), and Ecobank Liberia Limited. The remaining 5% represented obligations to other domestic debt
holders, which include rental and vendor arrears, Pre-NTGL salary arrears, and Non EDP payroll arrears.
TABLE 16: DOMESTIC DEBT STOCK

                                    FY08/09           FY09/10        FY09/10
                                                      Principal             Ending
PAYEE                              Prin. Bal B/F      Repayment      Principal Bal.
DOMESTIC DEBT
Financial Institutions
CBL                                          266.4            3.6              262.8
ECO                                             0.9           0.2                0.7
LBDI                                            7.5           0.7                6.8
Sub-total Fin. Institution                   274.7            4.5              270.2
Other Debt Holder
NPA COMPULSORY LEAVERS                          0.6           0.3                0.3
GUTHRIE PLANTATION WORKERS                      0.4           0.4
VENDOR ARREARS                                  6.3           0.6                5.6
PRE-NTGL SALARY ARREARS                         4.8           0.6                4.3
Non-EDP Payroll Arrears                         3.9                              3.9
Sub-total Other Debt Holder                   15.9            1.8               14.1
GRAND TOTAL                                  290.61           6.33             284.27
Source: Debt Management Unit, Ministry of Finance

DOMESTIC DEBT SERVICE
During the period under review, total domestic debt service amounted to US$9.94M. Of this amount,
US$6.34M or approximately 63.8% represented principal repayment and US$3.6M or 36.2% represented
interest payment. As a result of the principal repayment of US$6.34M, coupled with Government’s no
borrowing policy during the fiscal year, total domestic debt stock decreased by approximately 2.2% from
US$290.6M at the beginning of FY2009/10 to US$284.3M at the end of FY2009/10. The table below shows
the percentage of debt service payment per category of domestic creditor.




30
TABLE 19: DOMESTIC DEBT SERVICE PAYMENTS

                                           FY09/10           FY09/10            FY09/10
                                           PRINCIPAL         INTEREST           TOTAL
PAYEE                                      REPAYMENT         PAYMENT            PAYMENT
DOMESTIC DEBT
Financial Institutions
CBL                                            3.6                       3.4               7.0
ECO                                            0.2                       0.0               0.2
LBDI                                           0.7                       0.2               0.9
Sub-total Fin. Institution                     4.5                       3.6               8.1
Other Debt Holder                              -                         -                 -
NPA COMPULSORY LEAVERS                         0.3                                         0.3
GUTHRIE PLANTATION WORKERS                     0.4                                         0.4
VENDOR ARREARS                                 0.6                                         0.6
PRE-NTGL SALARY ARREARS                        0.6                                         0.6
Sub-total Other Debt Holders                   1.8                                         1.8
 Total Domestic Debt Service                     6.3                      3.6                9.9
Source: Debt Management Unit, Ministry of Finance

1.5.2. EXTERNAL DEBT

On the external front, as at June 30, 2010, total external debt portfolio amounted to US$1,553.0million, a
decrease of approximately US$229.1M or 12.9% over end June 2009 figure of US$1,782.1 million. This
decrease in total stock of public and publicly guaranteed external debt during the period under review was
primarily due to the following reasons;

     •   Interim debt relief provided by bilateral creditors,
     •   Reconciliation of external debt conducted at end 2009, and
     •   Debt service payments to large multilateral institutions including the World Bank, the IMF and the
         African Development Bank (AfDB) group.

Of the total external debt stock at end June 2010, US$1,006.68 million represented obligations to
multilateral creditors, US$525.82million represented bilateral credits while US$20.54million represented
commercial credits.

EXTERNAL DEBT SERVICE 1
Furthermore, during the period under review, a total of US$5.7M was paid. Of this amount, approximately
68.4% or US$3.9million represented payment to IDA of the World Bank; 7% or US$0.4million accounted for
payment to the AfDB Group; and 24.6% or US$1.4million constituted payment to the IMF.



1 NOTE: PAYMENT TO UNESCO IS NOT CONSIDERED AN EXTERNAL DEBT SERVICE AS IT IS NOT A PART OF THE EXTERNAL DEBT STOCK.



31
TABLE 17: EXTERNAL DEBT SERVICE PAYMENTS

                                       FY09/10          FY09/10           FY09/11
                                       Principal        Interest
                                       Repayment        Payment           Total Payment

World Bank (IDA)                                3.3                 0.6             3.9
IMF Payment                                                         0.4             0.4
ADB                                             1.1                 0.3             1.4
Total External Debt                             4.5                 1.2             5.7
Source: Debt Management Unit, Ministry of Finance

DEBT RELIEF GRANTED LIBERIA UNDER THE HIPC PROCESS
On June 29, 2010 Liberia reached completion point under the Enhanced HIPC initiative. The Boards of the
World Bank and the IMF determined that Liberia had taken the necessary policy actions to reach the
completion point, and is therefore qualified for debt relief from both the HIPC Initiative and the
Multilateral Debt Relief Initiative (MDRI). The implication of this relief is that Liberia will no longer face a
heavy burden for debt service in respect of its budget revenue, and therefore is expected to utilize freed-up
revenue for poverty reduction and enhancement of its development plans.

By reaching the completion point, the IMF and the World Bank have both joined their efforts to support a
total of US$4.6 billion of debt relief for Liberia. Of this amount of debt relief, multilateral creditors are
expected to deliver US$1.5 billion out of a total multilateral stock of more than US$1.6 billion at end June
2007, with the IMF contributing a total of US$730 million (the IMF’s biggest ever HIPC contribution for a
single country), and contribution from the World Bank totaling US$374 million.

Furthermore, after reaching the HIPC completion point, Liberia also becomes eligible for further debt relief
of US$66.9 million from the World Bank and US$17.2 million from the African Development Bank under
the Multilateral Debt Relief Initiative (MDRI); beyond-HIPC assistance from the IMF of US$173 million, and
US$0.9 million from the EU Special Debt Relief Initiative.

Liberia is the 29th country to reach the completion point, which officially marks the end of the HIPC
process.




32
                                                               Republic of Liberia
                                           Summary of HIPC Assistance to Liberia by Category of Creditor
                                                              As at June 30, 2010
                        Nominal Values                                                           Present Values
                                                                                                             Anticipated
                        Updated                                                                 Anticipated    Post CP                   Anticipat
                      debt stock at Debt stock at          Updated debt Debt stock at           Post CP HIPC Additional       Total       ed Post
                      DP (end Jun CP (end Jun Interim HIPC stock at DP CP (end Jun Interim HIPC Traditional   Bilateral    Assistance/    CP Debt
         Creditor         07)           09)       Relief   (end Jun 07)     09)        Relief    Assistance Assistance     Debt Relief     stock

I Multilateral           1,615.4     1,066.4          549.0      1,576.4        890.2        686.2        634.5     -        1,320.7        255.7
II Bilateral             1,549.4         686.0        863.3      1,538.6        712.0        826.6        581.9    36.4      1,444.9         93.7
     Paris Club          1,420.4         561.7        858.7      1,411.9        590.3        821.6        481.1    36.4      1,339.1         72.8
     Non-Paris Club        129.0         124.3          4.7        126.7        121.7          5.0        100.9     -          105.9         20.8

III Commercial           1,233.9          20.5      1,213.4      1,233.9         20.5      1,213.4         19.9     -        1,233.3           0.6

     Total             4,398.7      1,773.0        2,625.7      4,348.9      1,622.7      2,726.2      1,236.3    36.4      3,998.9        350.0




33
2. RECENT MACROECONOMIC DEVELOPMENTS & PROSPECTS

The past three years have witnessed unprecedented turmoil in the world’s financial markets, enormous
swings in international commodity prices, triggering a global economic crisis of monumental proportions
and a global recession that ranks second only to the Great Depression of the 1930s. These events had just
begun to unfold as the Government launched its medium-term socio-economic and growth framework –
the Poverty Reduction Strategy (PRS). The advent of global economic meltdown provided the backdrop
against which the Liberian economy has managed to sustain growth and job creation, although at a pace
well below that envisioned when the PRS was crafted.

Today, the global economic picture is showing some promising pictures. The global economy has evolved
better than expected with activity recovering at varying speeds; Sub-Saharan Africa is weathering the
global crisis well, and its recovery is expected to be stronger than other recoveries following past global
downturns2. The International Monetary fund stressed the role of policy support to attain sustainable
recovery including an expansionary monetary policy and a stimulus fiscal policy. However, Liberia’s
ability to move robustly to effect stimulus fiscal policies was constrained by the limited fiscal space coupled
with the zero borrowing requirements of our HIPC completion Point triggers. Looking further ahead, it is
projected that the world economy is poised for further recovery but at varying speeds across and within
regions. Global growth is projected to reach 4 ¾ percent in 2010 and 4¼ 2011. Advanced economies are
now expected to expand by 2¾ percent in 2010 and by 2¼ percent in 2011, following a decline in output of
more than 3 percent in 2009. Growth in emerging and developing economies is projected to be over 6 ½
percent during 2010–11, following a modest 2½ percent in 20093.

In the face of this global reality the Government and people of Liberia have continued the difficult task of
rebuilding an economy that has been all but completely destroyed by years of conflict. In the course of the
rebuilding and economic recovery exercise, GDP growth picked up steadily from 2004 to 2007, and reached
a peak of 9.4 per cent. As the food and fuel price shock of early 2007, and credit crunch of early 2008,
pushed the world’s major economies into recession, growth in Liberia slowed to 7.1 per cent. In 2009, and
2010 the Liberian economy was estimated to have grown by 4.6 per cent. The current IMF forecast for
growth in 2010 is 6.3 per cent as the economy rebounds from the effects of the global financial and
economic crisis.




2   IMF Economic Outlook, October 2010
3   Ibid.
34
CHART 7: GDP GROWTH IN LIBERIA                                    CHART 8: INFLATION IN LIBERIA


 10                                                                40
            %y/y                      9.4                                %y/y
     9                                                             35
     8                         7.8                                 30
     7                                        7.1                  25
                                                            6.3
     6                                                             20
     5                 5.3
                                                                   15
                                                      4.6
     4                                                             10
     3                                                              5
                2.6
     2
                                                                    0          Food and non-alcoholic
     1                                                                         beverages
                                                                    -5
     0                                                                         General Index
                                                                   -10
           2004 2005 2006 2007 2008 2009 2010
                                                                     Jan-07     Oct-07    Jul-08      Apr-09   Jan-10
         Source: Macro Fiscal Analysis Unit, Ministry of
         Finance and IMF Staff estimates                            Source: Central Bank of Liberia


Limitations in the availability of data continue to pose serious setbacks in breaking down the sources of
growth with great accuracy, but current estimates suggest the agriculture and services sectors continue to
account for the majority of growth as delays in the resumption of activities in mining and timber sectors
persist.

As world food prices soared in the first half of 2008, the rate of inflation in Liberia was pushed up sharply
from 8.6 per cent in October 2007 to a peak of 26.5 per cent in August 2008. Inflation steadily declined in
late 2008 and early 2009 as domestic food price inflation eased and imported fuel prices fell. Since then,
inflation has been broadly stable through 2009, at between 6 and 9 per cent, but edged higher between
January and April of 2010. However, it started to decline in May 2010 and reached 2.5 percent in June
2010. This was due to a very low (1.4 percent) inflation of food and non-alcoholic beverages which
accounts for almost 45 percent of the general rate of inflation weight.




35
3. GOVERNMENT FISCAL POLICY

3.1. RECENT FISCAL POLICY

The preparation and presentation of the Budget for the fiscal year 2009/10 was underpinned by the
expectation of a robust macroeconomic growth outlook. The reality was the reverse - where the external
impacts of a financial crisis threw a wrench in the economic and financial cog of the Liberian economy.
Even in light of these hurdles, the Government of Liberia continued to pursue a fiscal policy designed to:-

     •   Ensure sustained, accelerated, broad-based economic growth with particular emphasis on
         increasing Government’s investment in infrastructure; and strengthening the rural economy in
         accordance with the poverty alleviation strategies of the PRS.
     •   Continue tax reforms for widening the tax base and reducing the revenue deficit to a target that will
         allow sustainable growth in the economy by creating more fiscal space.
     •   Formulate expenditure plans to complete outstanding PRS-related projects.
     •   Restructure subsidies to decrease their impact on the nation’s finances.
     •   Foster a robust enabling environment for investment through private and public/private initiatives.
     •   Focus on an integrated development of physical infrastructure such as roads, water supply and
         access to transportation.
     •   Increase in fiscal discipline and the promotion of fiscal empowerment in Government institutions to
         ensure fiscal accountability, transparency and responsibility.

Achieving such objectives is a challenge for the country as the appetite for building infrastructure and
social need is huge. In more specific manner, given the tight revenue constraints the main challenge has
been implementing expenditure policies which preserved macro-stability and ensure that public services
are sustainable, comprehensive, and efficiently provided.

Creating Fiscal Space through Expenditure Efficiency Measures: In the execution of the previous two
fiscal years budget, the government made substantial gains in revenue collection as revenues rose by close
to 58 and 15 percent compared to the preceding years of fiscal years 2007/08 and 2008/09 respectively.
Indeed, such growth was generated from a low base; and the global economic environment affected FDI
flow to Liberia in fiscal year 2009/10 and this resulted in a decline particularly in non tax revenue
generation for the period. Expenditure management for the just ended fiscal year was implemented amidst
stark reality which required adjustments in public spending. In similar fashion, serious attention was given
to prevent disruptive expenditure adjustments for priority programs by creating the necessary fiscal space
through implementing expenditure efficiency measures.

Given the constrained resource envelope and in the face of declining one –off concessional payments as
well as limited access to external financing, difficult choices and trade-offs on spending decisions posed
serious challenges. A more robust focus was employed to preserve macro-stability and ensure that public
services are sustainable, comprehensive, and efficiently provided.

Bringing donor flows on Budget:-It has been recognized by both donors and the government that direct
budget support becomes an effective way to strengthen the management of public financial systems, and
36
has helped prioritize areas of expenditure that improve access to basic services like healthcare and
education and target the poor. Based on this assumption, during the 09/10 fiscal year strenuous effort has
been exerted to design a common assessment framework to bring donors in direct budget support and
harmonize their assistance with Government priorities. The budget process, therefore initiated a strategy
to make the national budget a central instrument for coordinating donor assistance and PRS alignment.

Cash-Based Balanced Budgeting: The 2009/2010 budget was prepared following the cash based balanced
budget policy. Containing expenditure within available resources has been the government policy since the
Fiscal Year 2006/07 budget. Under a cash based budgeting system, shortfalls in expected resources within
a fiscal year are matched by cuts in expenditure. Government responds to a shortfall in expected tax
revenue by cutting expenditure, rather than covering the shortfall by domestic borrowing or/and printing
money, which could generate inflation.

While successful in improving fiscal discipline, the cash budgeting system however had severe costs in
terms of the effectiveness and efficiency of expenditure. It also undermined the reforms focused on
improving budget planning. With the budget being adjusted several times a year, it was less important for
spending ministries to focus on their budget preparation, because of the weakened role of the up-front
budget allocations in determining funding during the spending year. These problems prompted Liberia to
undertake complementary reforms to its cash management and commitment control systems. These
operate in tandem with the overall fiscal management system.

In order to operate the cash-based budget effectively, the fiscal authorities introduced a Risk Management
Strategy which was implemented throughout the fiscal year 2009/10. Accordingly, the original budget was
revised from US$371.9 million to US$313.4 million lowered by about 16 per cent. The strategy while
maintaining the cash-based budget protected poverty related expenditures on course towards achieving
the target for HIPC Completion Point.

At the start of the first quarter of the fiscal year, it was realized that serious revenue shortfalls were
imminent, largely on account of further drop in GDP forecasts influenced by global economic crisis. Among
the most significant elements of risk to the revenue forecasts were:

     •   the non-approval of the proposal to raise general GST from 7 per cent to 8 per cent and
         telecommunications GST from 7 per cent to 10 per cent
     •   Uncertainties surrounding payments from forestry and mining concessions (excluding China
         Union).

As a result of these and others, a revenue risk profile assessment was made, which showed that US$59.8
million or 16 per cent of the projected revenue of US$371.9 million was deemed uncollectible.

On the expenditure side, US$58.5 million, 15.7 per cent, was frozen out of the Budget as part of the Risk
Management Strategy to ensure that Spending Entities do not overspend revenue collection. The risk
management strategy was the culmination of a succession of series of temporary measures starting in July
with expenditure requests approved from a selected list of strategic goods and service.

While the risk management strategy was initially envisaged as a temporary austerity measure put in place
pending improvements in various economic factors that influence revenue performance, it has become
37
evident that some of the significant concessionary revenue sources may not materialize. The risk
management strategy therefore was implemented throughout the entire fiscal year and includes the
following measures:

     •   Except for the Heads of the three Branches of Government, is recommended that all GoL financed
         foreign travels for the remainder of the fiscal year will be by economy class.
     •   Review payments to financial institutions in light of reduction in view of withdrawal of their field
         staff from counties covered by Payroll Decentralization Program.
     •   Project proposals from social service delivery of M+As to be funded by SOEs.
     •   Insistence on sector ministries and agencies (those collecting administrative and service fees and
         charges) to remit internally generated funds. The FY2010/2011 appropriations for these entities
         should be contingent on their cooperation in this regard.

Debt Policy: Over the past few years the government has made great strides to achieve the two pertinent
stages of the HIPC requirements. Based on this successful track record the country’s development partners
granted about US$4.6 billion debt relief. This significantly reduces the annual cost of servicing debt. .

The Government has established a Debt Management Committee (DMC), consisting of the MoF as Chair, the
Governor of the Central Bank, the Minister of Justice, and two other members appointed by the President.
The Committee will monitor the country’s debt situation and maintain sustainable debt levels, putting in
place relevant indicators consistent with the National Debt Management Strategy.

Public Financial Management Reforms: Finally, improving the public financial management system is an
integral part of the success of the PRS and building the country’s development partners confidence. In view
of this, the government has implemented far-reaching reform process in the area of budgeting,
disbursement, cash management, reporting, internal and external auditing. It is believed that the
introduction of the new PFM Act provided a comprehensive framework for the management of public
finances.

In addition to the legal framework, the MoF has been actively strengthening specific areas of PFM over the
ended fiscal year. Among the more important achievements of the fiscal year are, the introduction of
coherent and consistent Chart of Accounts, the implementation of International Accounting Standards, the
merger of the Bureau of the Budget within the MoF; and the direct payment of civil servants salaries
through commercial banks.


3.2. FISCAL POLICY OUTLOOK

Budget year 2009/10 was a rollercoaster ride for fiscal policy. We have learned lessons from this
experience and, in addition to continuing with our fiscal aims set out in the previous section, we will
implement further fiscal strategies to ensure that Liberia meets its significant fiscal challenges, which are: -

     •   Protecting and increasing the amount of investment in the Budget in the face of large, volatile
         concession revenue from enclave sectors, and an increasing pay bill compared to tax-revenue
     •   The end of the cash-based balanced budget, presenting both opportunities and challenges for
         responsible borrowing, and ensuring government policy is non-inflationary.

38
     •   Meeting the objective of targeted, efficient government spending towards the country’s policy
         priorities.

To guide these strategies we have developed four fiscal principles:

     •   The Government needs to develop, and implement, clear fiscal rules.
     •   Expenditure should be targeted, efficient and accountable
     •   Economic allocation of Budget should meet fiscal objectives; and
     •   Revenues from non-renewal resources should be invested in Liberia’s future

With these intentions in mind the Government has developed a set of strategic responses to the fiscal
situation, which are outlined below.

1. Investment spending: This issue can be broken down into two areas:

     •   Reacting to Concession Revenues: Concessions revenue provides an enormous fiscal benefit to
         Liberia, as well as potentially large economic benefits. The income from Social Development Funds
         and other concessionary revenue was greater than US$ 30 million in the fiscal year 2009/2010.
         The income from iron ore production could reach US$ 1 billion by 2030, according to IMF best case
         scenarios, hence the potentially for significant investment is large. Concession revenue however
         also produces challenges. The inclusion of concession revenue in the revenue forecasts and budget
         has led to shortfalls in the budget in periods when those revenues did not materialize. This has led
         to cutbacks from anticipated expenditure, which has particularly impacted capital expenditure
         (which fell from US$33.8 million in 2008/2009 to US$31.8 million in 2009/2010). As a result of
         unfulfilled revenue projections the commitment expenditure was US$292.7 million, significantly
         lower than the appropriation of US$ 371.9 million.

         In reaction to this, we have put in place a Project Budget for the 10/11 Budget to channel uncertain
         concession revenues into specific capital investments. If concession revenues materialize it will
         provide additional investment expenditure and disperse the benefits from concessions through the
         wider economy. If they do not materialize it will not impact the Core Budget, which we will ensure
         contains adequate investment through a capital expenditure minimum rule.

         Going forward, large revenues from concessionary enterprises in enclave, often non-renewable
         sectors pose a particular fiscal challenge for Liberia. It is clear that revenues from non-renewable
         resources should be invested so that future generations of Liberians can share in our country’s
         wealth. Meanwhile the fact that these large fiscal revenues from economic activity in enclave
         sectors that are relatively cut off from the rest of the economy, means that the effective use of these
         fiscal revenues to develop the rest of the economy is the best way to share the benefits of this
         enclave economic activity among all Liberians.

         We propose a new fiscal rule, therefore, to channel all fiscal revenues from non-renewable enclave
         economic activity towards investment spending that will benefit the wider economy and future
         generations. In support of this, the Ministry of Planning and Economic Affairs is developing a Public
         Sector Investment Plan (based on sector plans in key areas) which will increase the focus on
         investment spending and guide these expenditures to be strategic and complementary

     •   Pay Strategy: The cost of personnel has risen between the 2008/2009 and the 2009/2010 budgets
         at a rate faster than the increase in the tax receipts. As a result it has increased as a proportion of
39
         tax revenue from 45.5% to 50.7%; it is expected to further increase in the 2010/2011 budget to
         57.8% of tax revenue. The CSA pay strategy was intended to set the 2010/2011 wage bill between
         40% and 45% of tax revenues and then see it reduce by at least 1% per year until it reached around
         a quarter of tax revenues. While the value compared to overall revenue has fallen, most likely due
         to a greater weight of non-tax revenues, this increase represents a challenge to the Government as
         the wage bill cannot continue to rise in an unsustainable way.

         The inclusion of a fiscal rule on investment may mitigate some of the effects of an increasing drift
         towards personnel expenditure, however does not entirely overcome the concern. We will implement
         the fiscal aspects of the CSA pay strategy, to ensure that the ratio of the pay bill to tax revenue falls by
         one percentage point each year.

2. End of Cash Based Balanced Budget: Now that Liberia has reached the HIPC completion point, the
   government intends to shift from a “no borrowing” policy, as was required under the HIPC
   arrangement, to the resumption of borrowing in order to finance its national reconstruction and
   development drive. Such borrowing will be consistent with maintaining a sustainable debt position
   beginning FY2010/11. The development of a domestic debt market through sale and issuance of
   treasury bills is underway, coupled with new responsibilities of the Debt Management Unit as required
   by the PFM Law and Regulations (including the monitoring of SOEs’ borrowing), operations of the DMU
   have now shifted from being reactive to being proactive.

     The end of the cash based balanced budget provides an opportunity for Liberia to have greater
     discretion and flexibility in the formation of fiscal policy, however also necessitates that measures be
     implemented to ensure that borrowing controlled and sustainable.

     As described in the Debt Management Strategy (DMS), all loans (including to SOEs) approved and
     monitored by the Debt Management Committee and to adhere to the reporting requirements set out in the
     PFM. The Government will also implement and enforce fiscal rules as laid out in the Debt Management
     Strategy. These fiscal rules include:

     •   Hold the level of debt stock (including the debt held by SOEs) below or at 60%.
     •   An annual borrowing limit for Central Government based on GDP – set at US$ 46m in FY 2010/11;
     •   Earmark borrowing only for investment purposes, to ensure intergenerational fairness in the budget
         process.

     To further strengthen Debt Management, the Government is committed to implementing the following:

     •   Fully and vigorously implement its National Debt Management Strategy;
     •   Closely work with the IMF and the World Bank to update and reconcile its data with creditors;
     •   Build the institutional and professional capacity of the Debt Management Unit (DMU) in the Ministry
         of Finance;

3. Targeting Government Spending at Government Priorities.: A recent study by the World Bank
   attested that the links between a Poverty Reduction Strategy (PRS) and the budget, whether at the
   formulation, execution, or reporting stage, are integral to the successful implementation of the PRS and


40
         vital for strengthening government accountability. According to this study4 when the two systems are
         well integrated, three benefits are likely to emerge:

         •    PRS priorities are more likely to be implemented as planned;
         •    Spending agencies can be held to better account for performance;
         •    Parliament can have an increased role in monitoring PRS outcomes;

Though significant challenges appeared to link planning and budgeting, there is a legal framework to
remove fractures in all planning and budgeting process. Reporting on the budget is also enforced by law.
The government is committed to strengthening the links between policy, medium-term planning and
budgeting and will implement the Medium Term Expenditure Framework (MTEF) over the next two years.
The Cabinet has endorsed an MTEF Strategy and Action Plan in the 09/10 fiscal year.

With regard to budget and actual outturns of PRS focused expenditures the 2009/10 Budget about 60 per
cent of the aggregated expenditure is allocated to PRS related expenditures compared to 58 per cent of
fiscal year 2008/09. It should be noted that this has been achieved despite unsatisfactory revenue outturn.

As part of the new PRS (National Vision) the development of sector plans aligned to the PRS should ensure that
budget priorities are more closely aligned with poverty reduction objectives. Such sector plans are also
necessitated by MTEF and the PSIP. In addition, we will ensure targeted government spending is reaching its
intended recipients through a new program of grassroots monitoring: the Public Expenditure Survey, which
aims to include people from outside of government in monitoring spending.

Others methods of providing improved monitoring of outputs of government spending include:-

     •       Activity-based deliverables for the new PRS (National Vision) prepared by December 2010, to be used as
             measurable objectives for Spending Entities in 2010/2011 Budget
     •       Joint monitoring and evaluation by the Ministry of Planning and Economic Affairs and the Ministry of
             Finance of the budget, PRS deliverables and the reporting of policy outputs from each Spending Entity in
             Annual and Mid-year Fiscal outturns.

Finally, while some investment may be provided by donor groups, it is a necessary role of government to
provide the framework for investment in public services and ensure that large revenues earned from
concessions builds the overall economy to ensure both societal and intergenerational fairness.




4   Linking PRS with National Budgets September 2008, The World Bank

41
4. CONCLUSION AND OUTLOOK

During FY 09/10, a total of US$ 287.7 million was generated, indicating an increase of 22% over the
preceding year performance but lower by the same magnitude than the original budget. In terms of the
composition of revenue sources, the original budget envisaged a share of 67 percent from taxes, 27 from
non tax and 6 percent from external grants. This was compared to 84 percent taxes, 6 percent in non tax
and 10 per cent grants contribution in the preceding year’s revenue performance. Nevertheless, actual
performance in fiscal year 2009/10 was 78 percent of returns in tax revenue, 18 percent in non tax and 5
percent in grants. Revenue from concessionary income from Bong Mines/China Union accounted for both
large gains and shortfalls in the non-tax revenue. The annual budget initially incorporated US$40 million
from this source but realized only US$ 20 million. This outcome highlights the fact that both non tax and
grant sources are unreliable and contingent on various factors.

 In line with the cash based balanced budget principle the overall expenditure performance was driven by
the revenue performance. Thus, despite a 25% increase of the total appropriation, the allotment and
commitment showed a rise of only 17.6% and 17% respectively. As a result allotment from the
appropriation remained as low as 83%; the share of commitment was 79% of the appropriation. Total
allotment of the fiscal year showed an increase of 18% over the preceding fiscal year. General Claims, and
Economic Services Sector accounted for these increases as the Government devoted more attention to
county developments and infrastructure building.

To achieve objectives envisaged in the PRS government expenditure policy is designed to finance critical
areas identified in the strategy. With this objective in mind, during the fiscal year a total of US$ 119.3
million (32%) has been allocated to the basic PRS sectors such as health, education, roads, agriculture and
water and sanitation. However, their share from the total allotment and commitment were relatively lower.
Allotment and commitment to the aforesaid sectors remained 31.6 % of the total allotment and 29% of the
total commitment. Obviously these sectors incorporate relatively more capital expenditures than others,
thus it is evident that capital expenditure is the first victim in the process of aligning expenditures with
available resources.

The fiscal year 2009/10 revenue projection was more ambitious and encompasses 57% growth from the
previous year revenue performance. On top of that the National legislation increased the proposed budget
from US$ 347.0 million to US$ 371.9 million. This was an upward adjustment of US$24.9 million, or 7.2
percent above the Ministry of Finance proposal. The revenue forecast also incorporated non–taxes and
external grants revenue which includes the uncertain concessional revenues. Actual collection, however,
was nearly 22% below the original budget. This was largely due to poor collection of non-tax revenue
which is half the original budget owing to a decline of 80% in concessional payments.

 Over the past two years the government committed to adopt cash–based balanced budgeting as part of its
fiscal austerity measures. The Ministry of Finance was forced to match shortfalls in expected resources by
cuts in expenditure, rather than covering the shortfall by domestic borrowing, which could be inflationary.

Moving revenue and expenditure outturn closer to the original budget is an indicator of a country’s credible
public finance management.. According to the 2007 Public Expenditure and Financial Accountability
(PEFA) Performance Scores, Liberia rated “B” for Aggregate expenditure outturn compared with original
approved budget; “D” for composition of expenditure outturn compared with original approved budget and
“A” for aggregate revenue outturn compared with original approved budget.
42
It should be noted that such results were generated from prudent performances in the years prior to FY
2008/09. The problems in FYs 2008/09 and 2009/10 have their justifications however; the country’s
development partners, particularly the World Bank, are rule driven.. Consequently, to maintain the
country’s track record in budget credibility and promote its smooth relationship with its development
partners it is important to be vigilant in addressing issues related to budget outturn.

One could argue that having ambitious revenue projection is recommended to add further incentive on
revenue collecting institutions. But pertinent to the country’s relation with its development partners it is
necessary to consider the potential to attain what is projected. Given the government’s cash based budget
management it is crucial to give more emphasis on revenue projection as expenditure follows actual
collection.

To this end, it is important to create awareness among the various stakeholders in the budget preparation
and approval, including the legislators, of the need to use realistic budget projections.




43
ANNEX OF PUBLIC FINANCE TABLES
                                                GRAND SUMMARY
                                         REVENUE PERFORMANCE REPORT
                                         FY 2009/10 YEAR ENDED OUTLOOK


                                                                               Inc. at      TOTAL       RISK         FY END
                                                                  ORIGINAL    Budget      APPROVED    ADJUSTED      ACTUAL AT
                                DESCRIPTION                       BUDGET      Hearing      BUDGET      BUDGET      JUNE 30, 2010

TOTAL REVENUE BASE                                                  323,697     24,058      347,755      283,809        274,992
Internal Tax Revenue                                                 95,088      8,145      103,232       87,026        105,691
Internal Other Revenue (Non-tax)                                     33,772      4,229       38,001       28,621         30,213
Maritime Revenue                                                     16,028      5,245       21,272       20,472         16,299
Internal Revenue SDF'S                                               17,367      3,000       20,367       16,967         10,855
Int. Rev. Concessionary 1Time Pmts.                                  63,000        -         63,000       40,000         20,100
Customs Tax Revenue                                                  98,443      3,440      101,883       90,723         91,835

GRANTS                                                               23,338     (2,000)      21,338       25,500         13,009
TOTAL REVENUE FORECAST                                              347,035     22,058      369,094      309,309        288,001
Uncommitted Revenue from FY08/09                                        -        2,815        7,730        2,815          7,730
                                                                                                                            -
TOTAL REVENUE BUDGET                                                347,035     24,873      376,824      312,124        295,731
TOTAL REVENUE                                                       347,035     22,058      369,094      309,309        287,989
TAX REVENUE                                                         226,925     19,830      246,755      215,188        224,679
TAXES ON INCOME & PROFITS                                            54,197        -         54,197       49,730         70,160
PROPERTY TAXES                                                        2,052        -          2,052        2,012          1,655

TOTAL TAXES ON GOODS & SERVICES(EXCL. Motor Vehicle & Maritime)      52,339      6,398       58,736       50,236         48,748
Taxes on Goods & Services (General)                                  16,278        -         16,278        9,878         10,913
Excise Taxes                                                          5,928        -          5,928        5,428          9,127
Taxes on Specific Services                                              -          -            -            -                2
MOTOR VEHICLE TAXES                                                   2,555      1,153        3,708        2,908          2,557
OTHER TAXES AND PERMSSION ON USE OF GOODS                            11,551        -         11,551       11,551          9,850
MARITIME REVENUE                                                     16,028      5,245       21,272       20,472         16,299
TAXES ON INTERNATIONAL TRADE & TRANS.                                98,443      3,440      101,883       90,723         91,835
CUSTOMS & OTHER IMPORT DUTIES                                        92,716      3,000       95,716       87,356         91,384
TAXES ON EXPORTS                                                      5,727        440        6,167        3,367            450
OTHER TAXES                                                          19,895      9,992       29,886       22,486         12,282
SOCIAL DEVELOPMENT FUNDS                                             17,367      3,000       20,367       16,967         10,855
OVERDUE TAXES                                                         2,528      6,992        9,519        5,519          1,427
                                                                                                                            -
GRANTS                                                               23,338     (2,000)      21,338       25,500         13,009
GRANTS FROM FOREIGN COUNTRIES                                           -          -            -            -              -
GRANTS FROM INTERNATIONAL ORGANIZATIONS                              23,338     (2,000)      21,338       25,500         13,009
OTHER REVENUE                                                        96,772      4,229      101,001       68,621         50,301
PROPERTY INCOME                                                      85,151      4,229       89,379       58,179         40,565
FEES & CHARGES                                                        5,354        -          5,354        4,174          4,330
FINES FOR CRIMINAL & ECON. OFFENCE                                    2,658        -          2,658        2,658          1,796
MISCELLANEOUS & UNIDENTIFIED REV.                                     3,610        -          3,610        3,610          3,610




44
                                                                 MINISTRY OF FINANCE
                                  OFFICE OF THE DEPUTY MINISTER FOR EXPENDITURE & DEBT MANAGEMENT
                                                       DETAIL OF EXPENDITURE PERFORMANCE
                                               COVERING THE PERIOD JULY 1, 2009 - SEPT. 30, 2010




                                                         ADJUSTED        CUMMULATIVE    CUMMULATIVE     CUMMULATIVE     BALANCE IN       BALANCE IN     Balance in
                                      APPROPRIATION    APPROPRIATION      ALLOTMENT     COMMITMENT        CASH EXP      ALLOTMENT       COMMITMENT     Appropriation
PUBLIC AND ADMINISTRATIVE SERVICES SECTOR
NATIONAL LEGISLATURE                      21,230,624        22,016,031     20,926,273      20,907,448      20,603,441       18,825           304,007       1,089,758
MINISTRY OF STATE                          7,272,000         8,939,187      8,903,303       8,782,556       8,183,674      120,747           598,882          35,884
VICE PRESIDENT OFFICE                      1,220,428         1,281,235      1,088,080       1,065,127       1,025,524       22,953            39,603         193,155
MINISTRY OF FINANCE                       15,046,937        15,170,436     14,206,385      13,869,051      13,205,655      337,334           663,396         964,051
MIN. OF INTERNAL AFFAIRS                   8,896,079         9,706,079      8,333,595       7,790,412       7,790,412      543,183               -         1,372,484
MINISTRY OF PLANNING                       2,239,800         2,389,800      2,233,865       2,128,930       1,773,280      104,935           355,650         155,935
CIVIL SERVICE AGENCY                       1,885,400         2,073,724      1,626,304       1,598,695       1,543,619       27,609            55,076         447,420
GENERAL SERVICES AGENCY                    1,664,400         1,812,937      1,333,916       1,293,461       1,242,321       40,455            51,140         479,021
MINISTRY OF INFORMATION                    1,744,790         1,885,717      1,366,921       1,314,474         952,197       52,447           362,277         518,796
GENERAL AUDITING COMMISSION                3,700,000         3,900,000      3,617,937       3,615,617       3,337,493        2,320           278,124         282,063
MIN. OF FOREIGN AFFAIRS                    9,547,000         9,633,705      8,414,870       8,252,704       8,252,704      162,166               -         1,218,835
LI P A                                       937,400         1,015,636        706,637         640,211         353,702       66,426           286,509         308,999
NATIONAL ELECTIONS COMMISSION              6,582,229         6,940,041      5,805,925       5,796,650       5,796,650        9,275               -         1,134,116
LI S GI S                                  3,814,230         4,237,730      3,716,777       3,660,892       3,289,119       55,885           371,773         520,953
BUREAU OF STATE ENTERPRISE                   113,621          115,460         102,159         102,159          88,579           -             13,580          13,301
NATIONAL INVESTMENT COMMISSION             1,025,000         1,031,000        819,957         819,947         819,947           10               -           211,043
GOVERNANCE COMMISSION                      1,000,000         1,000,000        889,182         889,182         753,684           -            135,498         110,818
PUBLIC PROCUMENT AND CONCESSION              970,000          970,000         818,101         780,656         618,119       37,445           162,537         151,899
C ND RA                                      482,400          547,141         468,633         419,243         223,665       49,390           195,578          78,508
ENVIRONMENTAL PROTECTION AGENCY              651,480          651,480         562,062         562,054         330,499               8        231,555          89,418
LIBERIA BROADCASTING SYSTEM                  958,135          958,135         558,290         558,290         461,958           -             96,332         399,845
LIBERIA ANTI- CORRUPTION COMMISSION        1,400,000         1,400,000      1,364,933       1,363,673       1,145,802        1,260           217,871          35,067
               PASS TOTAL                 92,381,953        97,675,474     87,864,105      86,211,432      81,792,045     1,652,673        4,419,387       9,811,369


RULE OF LAW & PUBLIC SAFETY

THE JUDICIARY                             11,662,722        12,132,722     10,672,186      10,654,767    10,550,650         17,419           104,117       1,460,536
MINISTRY OF JUSTICE                       20,270,000        21,384,029     18,882,497      18,450,867    18,228,036        431,630           222,831       2,501,532
MINISTRY OF NATIONAL DEFENSE               8,285,400         8,374,400      7,401,446       7,372,944     7,370,794         28,502             2,150         972,954
N S A                                      1,638,400         1,638,400      1,506,678       1,506,670      1,380,290                8        126,380         131,722
S S S                                      3,947,800         4,022,800      4,012,296       4,008,872      3,280,132         3,424           728,740          10,504
MINISTRY OF NATIONAL SECURITY                950,000          994,298         891,703         886,958        616,293         4,745           270,665         102,595
N BI                                         494,600          494,600         437,796         437,781        293,868            15           143,913          56,804
HUMAN RIGHTS COMMISSION                      750,000          613,156         566,827         429,411        269,419       137,416           159,992          46,329
              RLPS TOTAL                  47,998,922        49,654,405     44,371,429      43,748,270    41,989,482        623,159         1,758,788       5,282,976

SOCIAL & COMMUNITY SERVICES SECTOR

MINISTRY OF EDUCATION / CENTRAL           26,961,800        30,068,439     25,107,269      23,955,989      23,882,749     1,151,280           73,240       4,961,170
UNIVERSITY OF LIBERIA                      7,500,000         7,500,000      6,893,442       6,893,441       6,893,441               1            -           606,558
MONROVIA CONSOLIDATED SCHOOL SYS           2,038,765         2,500,083      2,219,562       2,195,838       2,195,838       23,724               -           280,521
BOOKER WASHINGTON INSTITUTION              1,646,891         1,646,891      1,527,110       1,527,106       1,523,142               4          3,964         119,781
FORESTRY TRAINING INSTITUTION                 65,345           65,345          60,060          60,060          51,484           -              8,576           5,285
CUTTINGTON UNIVERSITY                        530,482          530,482         487,373         487,183         439,155          190            48,028          43,109
NATIONAL COMM. ON HIGHER EDUCATION         1,459,576          609,576         548,883         548,835         548,835           48               -            60,693
W V S TUBMAN TECHNICAL COLLEGE             2,500,000         2,500,000      2,294,454       2,294,330       2,161,931          124           132,399         205,546
WEST AFRICAN EXAMINATION COUNCIL             600,000          740,000         692,627         690,113         591,197        2,514            98,916          47,373
EDUCATION SECTOR TOTAL                    43,302,859        46,160,816     39,830,780      38,652,895      38,287,771     1,177,885          365,124       6,330,036


MINISTRY OF HEALTH & WELFARE              20,146,400        20,671,400     14,879,503      14,049,926      14,020,269      829,577            29,657       5,791,897
J F K MEDICAL CENTER                       6,100,000         6,100,000      5,440,556       4,394,911       4,394,911     1,045,645              -           659,444
PHEBE HOSPITAL                               600,000          600,000         551,960         508,248      489,347.00       43,712            18,901          48,040
LI B R                                       475,630          475,630         367,640         365,200         246,318        2,440           118,882         107,990
MIN. OF YOUTH & SPORTS                     4,580,000         4,639,582      3,220,269       3,077,264       2,841,399      143,005           235,865       1,419,313
N F A A                                       90,000          101,359          91,223          90,567          67,619          656            22,948          10,136
A I TB                                       260,000          235,986         193,614         184,761         125,861        8,853            58,900          42,372
MINISTRY OF GENDER & DEV                   1,335,073         1,398,642        865,531         753,159         631,277      112,372           121,882         533,111
MONROVIA CITY CORPORATION                  1,002,978         1,002,978        919,975         919,665         919,665          310               -            83,003
LRRRC                                        677,249          677,249         588,074         582,198         557,112        5,876            25,086          89,175
NATIONAL COMMISSION ON DISABILITIES          300,000          300,000         251,179         251,057         222,145          122            28,912          48,821
NATIONAL VETERAN BUREAU                      350,000          350,000         309,606         309,390         244,718          216            64,672          40,394
LIB. AGENCY FOR COMMUNITY EMPOWERMENT.       550,000          550,000         422,932         421,933         402,771          999            19,162         127,068
NATIONAL HOUSING AUTHORITY                   500,000          500,000         449,447         449,198         410,204          249            38,994          50,553
SUB TOTAL                                 36,967,330        37,602,826     28,551,509      26,357,477      25,573,616     2,194,032          783,861       9,051,317
                                                                                                  -

45          S&CSS TOTAL                   80,270,189        83,763,642     68,382,289      65,010,372      63,861,387     3,371,917        1,148,985      15,381,353
                                                                                                                                                                       Source:
Department of Expenditure, Ministry of Finance
                                                           ADJUSTED        CUMMULATIVE    CUMMULATIVE     CUMMULATIVE     BALANCE IN       BALANCE IN     Balance in
                                      APPROPRIATION      APPROPRIATION      ALLOTMENT     COMMITMENT       CASH EXP       ALLOTMENT       COMMITMENT     Appropriation
MINISTRY / AGENCY

ECONOMIC SERVICES SECTOR

MINISTRY OF AGRICULTURE                    7,250,000           7,431,188      4,367,846       4,233,472       3,797,996      134,374           435,476      3,063,342
MINISTRY OF LANDS & MINES                3,950,000             4,302,150      3,635,567       3,493,996      3,083,668       141,571           410,328        666,583
MINISTRY OF COMMERCE                     1,900,000             2,009,789      1,346,025       1,308,499      1,163,338        37,526           145,161        663,764
MINISTRY OF POSTAL AFFAIRS               2,000,000             2,010,057      1,321,239       1,288,329      1,004,677        32,910           283,652        688,818
C DA                                       252,223              252,223        214,788          213,717        122,370         1,071            91,347         37,435
MINISTRY OF TRANSPORT                    2,350,000             2,371,500      1,868,781       1,831,826      1,175,493        36,955           656,333        502,719
FORESTRY DEVELOPMENT AUTHORITY           3,500,000             3,500,000      2,857,656       2,848,922      2,467,368         8,734           381,554        642,344
MINISTRY OF LABOUR                       2,543,783             2,573,909      1,664,801       1,557,832      1,416,461       106,969           141,371        909,108
MINISTRY OF PUBLIC WORKS                39,900,000            40,000,000     30,780,211      20,851,822     20,117,355      9,928,389          734,467      9,219,789
LIBERIA INDUSTRIAL PROPERTY SYSTEM          50,000               50,000         41,750           41,288         18,416           462            22,872          8,250
LIBERIA COPY RIGHT OFFICE                  100,000              100,000         85,857           83,269         51,793         2,588            31,476         14,143
SUB TOTAL                                63,796,006          64,600,816     48,184,521      37,752,972      34,418,937    10,431,549        3,334,035      16,416,295

PUBLIC CORPORATIONS

LIBERIA WATER & SEWER CORP                     524,025          524,025        471,622          452,233        429,064        19,389            23,169         52,403
LP MC                                          525,000          525,000        384,803          379,803        334,989         5,000            44,814        140,197
NATIONAL TRANSIT AUTHORITY                     500,000          175,000        125,000          125,000        114,712            -             10,288         50,000
LIBERIA ELECTRICITY CORPORATION            2,000,000           2,000,000      1,605,820       1,544,523      1,544,523        61,297               -          394,180
MONROVIA TRANSIT AUTHORITY                 2,154,538           2,479,538      2,179,538       2,178,777      2,178,777           761               -          300,000
LIBERIA TELECOMMUNICATION CORPORATION      2,300,000           2,150,000      1,505,749       1,505,746      1,286,469                3        219,277        644,251
NATIONAL HOUSING & SAVING BANK                  50,000           50,000         45,433           45,153         45,153           280               -            4,567
LIBERIA INDUST. FREEZONE AUTHORITY             100,000          100,000         81,239           81,239         51,022            -             30,217         18,761
LIBERIA - LIBYAN HOLDING COMPANY               255,000          805,000        738,750          738,750        718,750            -             20,000         66,250
N I C O L                                      168,746          168,746        133,193          133,192        105,414                1         27,778         35,553
LIBERIA RUBBER DEVELOPMENT AUTHORITY           138,641          138,641         98,888           93,888         93,006         5,000               882         39,753
LIBERIA NATIONAL LOTTERY                        50,000           50,000         24,994           18,044         13,526         6,950             4,518         25,006
BUREAU OF MARITIME                                             3,236,919      3,236,919       3,236,919      2,736,919            -            500,000            -
SUB TOTAL                                  8,765,950          12,402,869     10,631,948      10,533,267      9,652,324        98,681           880,943      1,770,921

            ESS & PC TOTAL                72,561,956          77,003,685     58,816,469      48,286,239      44,071,260    10,530,230        4,214,979     18,187,216



OTHER GENERAL CLAIMS (BASE BUDGET) 5-5-01-00

PERSONNEL

MINIMUM SALARY ADJUSTMENT FUND            8,500,000            1,059,958        15,220           15,220         15,220            -                -        1,044,738
HONORARIUM                                                                                          -                             -                -              -
GENERAL ALLOWANCE EQUALIZATION FUND         150,000              47,767         6,000             6,000         6,000             -                -           41,767
PROFESSIONAL                                                     64,000         64,000           64,000         64,000            -                -              -
RETIREMENT BENEFITS FOR FORMER LEGISLATORS 250,000              210,750        208,250          208,250        100,000            -            108,250          2,500
SAVERANCE PAYMENTS FOR NCDDRR CLOSURE       645,000             603,778        603,778          603,777        603,777                1            -              -
SAVERANCE PAYMENTS                                              511,500        511,500          511,500        511,500            -                -              -
SUB TOTAL                                 9,545,000            2,495,253      1,411,248       1,408,747       1,300,497        2,501           108,250      1,084,005

CONTRIBUTIONS

PENSION CONTRIBUTIONS                      6,750,000           6,954,028      5,571,051       5,571,051      5,570,227            -               824       1,382,977
BENEFITS FOR FORMER OFFICIALS                  250,000           66,269         60,000           60,000         50,471            -              9,529          6,269
GOL CONTRIBUTION TO NSS&WC                     500,000          425,000             -               -                             -                -          425,000
SUB TOTAL                                  7,500,000           7,445,297      5,631,051       5,631,051       5,620,698           -             10,353       2,900,751


GOODS AND SERVICES                                                                                  -                             -


UNMIL AIRLIFT                              370,000               379,079       315,585          315,585        315,585            -                -           63,494
PAYROLL DECENTRALLIZATION                1,900,000             1,139,807       724,120          724,120        705,758            -             18,362        415,687
REFUGEE REPATRIATION & RELATED COSTS       100,000               28,050             -               -                             -                -           28,050
ELECTRICITY(INFAVOR OF L E C )             900,000              801,763        756,763          756,763        756,763            -                -           45,000
SPECIALIZED MATERIAL                                                                                -                             -                -              -
WATER & SEWAGE                             200,000              170,000             -               -                             -                -          170,000
TRADE AGREEMENT LEVY / ECOWAS            3,500,000             3,445,224      3,445,224       3,445,224      3,204,530            -            240,694            -
CENTRAL BANK OF LIBERIA FEES             1,300,000             1,383,891      1,335,203       1,335,203       1,335,203           -                -          722,231
CELEBRATIONS, COMMEMORATION & STATE VISIT 500,000                371,104       360,000          360,000        360,000            -                -
CONTINGENCY RESERVED FUND                1,000,000               50,000         50,000           50,000         50,000            -                -              -
NATIONAL DISASTER RELIEF FUND              250,000              125,000             -               -                             -                -          125,000
SUB TOTAL                               10,020,000             7,893,918      6,986,895       6,986,895       6,727,839           -            259,056        907,023
Source: Department of Expenditure, Ministry of Finance
46
                                                           ADJUSTED        CUMMULATIVE    CUMMULATIVE     CUMMULATIVE     BALANCE IN      BALANCE IN     Balance in
                                      APPROPRIATION      APPROPRIATION      ALLOTMENT     COMMITMENT        CASH EXP      ALLOTMENT      COMMITMENT     Appropriation

TRANSFERS AND SUBSIDIES

SUPPORT TO LIBERIAN BUSINESSES              2,000,000          1,700,000            -               -               -            -                -         1,700,000
SOCIETY GENERAL DE' SEVERANCE (SGS)           500,000           550,055         550,055         550,055        550,055           -                -               -
SUBSIDY TO NATIONAL HOUSING AND BANK          200,000           175,000          75,000          74,514         74,514           486              -           100,000
RICE STABILIZATION FUND                       500,000           420,160         400,000         400,000        400,000           -                -            20,160
MCC-WB COUNTERPART FUNDING                    200,000           182,500             -               -                            -                -           182,500
                                              200,000
TRANSFER TO LIBERIA EXTRACTIVE INDUSTRIES TRANS. IN.            200,000         200,000         200,000        200,000           -                -               -
TRANSFER TO LAND COMMISSION                   600,000           525,000         525,000         525,000        525,000           -                -               -
                                              600,000
TRANSFER TO TRUTH & RECON.COMMISSION (CLOSING COST)             850,000         850,000         850,000        850,000           -                -               -
TRANSFER TO NCDDRR (CLOSING COST)             306,000           215,921         215,921         215,921        215,921           -                -               -
NATIONAL IRON ORE COMPANY                          -             24,195          24,195          24,192         24,192               3            -               -
LAW REFORM COMMISSION                              -            415,990         415,990         415,990        415,990           -                -               -
NATIONAL AIDS COMMISSION                      100,000            66,000          66,000          66,000         66,000           -                -
                                              100,000
PROTECTION OF INTELLECTUAL RIGHTS FOR LIBERIAN ARTISTS           85,000            -                -                            -                -
STIPENDS FOR FINANCIAL MANAGEMENT TRAINEES 450,000              409,750         409,750         409,750        409,750           -                -              -
VACATION JOBS/COMMUNITY SERVICES              300,000           255,000             -               -                            -                -          255,000
TRANSFER TO L ICPA                             75,000            75,000          64,750          64,750         64,750           -                -           10,250
SOCIAL CONTRI. TO GRAND CAPE MOUNT (NOCAL) 300,000              300,000         300,000         300,000        300,000           -                -              -
SOCIAL CONTRI. RIVER CESS (NOCAL)             300,000           300,000         300,000         300,000        300,000           -                -              -
SUB TOTAL                                   6,731,000          6,749,571      4,396,661       4,396,172       4,396,172          489              -           265,250


CAPITAL ACQUISITIONS                                                                                -


SUBSTANTIAL MAINTENANCE AND RENOVATION 3,000,000               2,030,000            -               -                            -
SUB TOTAL                              3,000,000               2,030,000            -               -                            -


CAPITAL TRANSFERS

GOL COUNTY DEVELOPMENT FUND            3,000,000               3,000,000      3,000,000       3,000,000      3,000,000           -                -              -
NIMBA COUNTY (MITTAL)                  3,000,000               3,000,000      3,000,000       3,000,000       3,000,000          -                -              -
BONG COUNTY (MITTAL)                   1,000,000               1,000,000      1,000,000       1,000,000        500,000           -            500,000            -
GRAND BASSA COUNTY (MITTAL)            2,000,000               2,000,000      2,000,000       2,000,000       2,000,000          -                -              -
MARGIBI (FIRESTONE)                      160,800                160,800         160,800         160,800        160,800           -                -              -
MONTSERRADO (FIRESTONE)                   79,200                 79,200          79,200          79,200         79,200           -                -              -
SITE DEVELOPMENT AND CONST. WORKS            -                  935,000             -               -                            -                -          935,000
GRAND BASSA (NOCAL)                      150,000                150,000         150,000         150,000                          -            150,000
SINOE (NOCAL)                            100,000                100,000         100,000         100,000                          -            100,000
SINOE/GRAND KRU (NOCAL)                  100,000                100,000         100,000         100,000        100,000           -                -               -
RIVER CESS (NOCAL)                       250,000                250,000         250,000         250,000        250,000           -                -               -
MONTSERRADO (NOCAL)                      150,000                150,000         150,000         150,000        150,000           -                -               -
                                       3
BONG MINES: COMMUNITY DEVELOPMENT FUNDS,500,000                3,500,000      3,500,000       3,500,000       3,500,000          -                -               -
                                       3,000,000
WESTERN CLUSTER: COMMUNITY DEVELOPMENT FUNDS                   2,550,000            -               -                            -                -         2,550,000
                                       9,000,000
FOREST CONCESSIONS: COMMUNITY DEVELOPMENT FUNDS                2,972,218      2,110,892       1,522,149       1,522,149      588,743              -           861,326
SUB TOTAL                             25,490,000              19,947,218     15,600,892                      14,262,149      588,743          750,000       4,346,326


                                          3,609,779
PAYMENT OF PRINCIPAL TO CENTRAL BANK OF LIBERIA                4,726,462      4,726,462       4,726,462       4,484,974          -            241,488             -
PRE-NTGL SALARY ARREARS                   2,950,000            2,681,028      1,101,578       1,101,578       1,001,555          -            100,023       1,579,450
GOL RENTAL ARREARS                           500,000            427,882             -               -                            -                -        10,272,102
FOREIGN MISSION ARREARS                      150,000             127,500        125,000         125,000        125,000           -                -
PAYMENT TO OTHER DOMESTIC DEBT HOLDERS 4,200,000               3,398,896      3,398,896       3,398,896       2,983,658          -            415,238             -
SUB TOTAL                                 11,409,779          11,361,768      9,351,936       9,351,936       8,595,187          -            756,749      11,851,552


                                          5,000,000
PAYMENT OF PRINCIPAL TO MULTILATERAL ORGANIZATIONS             5,793,530      5,793,530       5,793,014      4,999,902           516          793,112             -
SUB TOTAL                                 5,000,000            5,793,530      5,793,530       5,793,014       4,999,902          516          793,112             -


                              TOTAL
GENERAL CLAIMS (BASE BUDGET )78,695,779                    63,811,575      49,267,233      33,567,815     45,902,444       592,249        2,677,520     21,354,907

GRAND TOTAL                             371,908,799         371,908,781    308,701,525     291,931,003    277,616,619     16,770,228      14,219,658     70,017,821
Department of Expenditure, Ministry of Finance




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