Abolish LPRC and the Ministry of Information 

Sunday, November 22, 2009

Tewroh-Wehtoe Sungbeh

     Long before one of the world’s leading auditors, Ernst & Young, was appointed by the European Commission to conduct a systems and financial audit of the Liberian Petroleum Refinery Corporation (LPRC), from the period of October 1, 2003 to June 30, 2004, most Liberians knew the institution, whose acronym, (LPRC) is as famous as the name of nation’s capital to be a breeding ground for waste and corruption than actually being a repository of the nation’s energy supplies. 

     Like LPRC, the Liberian Produce Marketing Association (LPMC), the Liberian Broadcasting Service (LBS), the Liberian Electricity Corporation (LEC), the Liberian Water and Sewer Corporation (LWSC), and many more are money-wasting bureaucracies that are not only inefficient but are poorly managed that most Liberians know them only for occupying the space they operate from than for what they actually do for the Liberian people.

     The corporations are not alone in the downward spiral that defines them, but are as cluttered as their mission statements and the ill-defined roles they played in the Liberian political system. The various ministries often occupied by cronies of the president, as well as competent and incompetent career bureaucrats, and non-career bureaucrats are plagued by inefficiencies and corruption; and are also part of a system of government whose roles, purpose, and mission are as deadly, archaic and irrelevant as their policies, which failed miserably to meet the pressing realities of modern Liberia; and also failed to meet the needs of the Liberian people. It is from that perspective I wrote on this page in 2007, that the Ministry of Information be abolished.

     However, the Liberian Petroleum Refinery Corporation (LPRC), incorporated in 1978, pursuant to the Liberian Business Corporation Act, grants exclusive rights to LPRC for the importation, sales, and distribution of petroleum products within the Republic of Liberia (dated July 26, 1989), and granted the rights to designate it suppliers, as well as enter into exclusive supply agreement with any foreign or domestic corporation upon the approval of the President of Liberia.

      Since its incorporation a little over three decades ago, LPRC has gone from being a promising institution that imports, distributes, and sells petroleum products to Liberians and foreign nationals, to that of a corrupt workplace where appointed officials often looked forward to get rich by stealing money and petroleum; and also a place where those individuals often negotiate their own oil deals with private companies as it was during the tenure of Sirleaf-appointee former Manager Director, Harry A. Greaves Jr., who was more of a national embarrassment than actually working effectively in the interest of the Liberian people.

     While it is true that the October 1, 2003 to June 30, 2004, audit of LPRC was commissioned during the interim administration of Gyude Bryant, the report made it clear that the “Auditor General has never performed any audit of LPRC,” but did not specify the period in question. “According to information gathered, since the creation of the company, the Auditor General has not been able to carry out an audit of LPRC because of the refusal of the former Manager Directors,” the report states.

     The audit report speaks of a worn-out and obsolete refinery with obsolete technology, and a workplace where management do not keep a fixed asset file itemized by category of assets, which can be reconciled with the GL (Government of Liberia). There is no bank reconciliation to validate the accuracy of statements and trial balance, and a place where accounting vouchers are destroyed, and opening balances of general ledgers are not justified. The occurrence of posting errors, arithmetical errors in trial balance also made it clear “there is a serious lack of autonomy of the management of the company. The latter,” according to the report “puts a lot of pressure on LPRC in order to grant donations to Government officials or bodies, or to take in charge of government expenses not directly linked with the company’s activities.” It is a place where “the company has not prepared a document describing the accounting principles used to record transactions,” which makes “the reliability of recordings of LPRC’s accounting not satisfactory.”

      “Petty cash inventory" according to the audit report "is not systematically done at the end of each month, nor on a surprise bases. The cash counted could not be reconciled with the cash register; the petty cash register was not updated; the date and description of transactions are not properly indicated; and the balance of the cash at the end of each day is not indicated. Many cash vouchers were outstanding, some of which dating back to April 2004, and not yet recorded in the register."

     "In this context, it is very likely that irregularities or embezzlements of cash can remain unnoticed for long periods,” the report said. However, supporting documents for expenses, and gasoline provided to officials has been wrongly posted, while there is no profit remitted to government under the form of dividends during the audited period. In general, “we found unexplained discrepancies between outstanding balances confirmed by importers of petroleum products and their corresponding accounts receivable balances in the books at LPRC.”

      “The structure of the organization chart appears rather coherent with three principal divisions each headed by a Deputy Manager Director and three sections directly attached to the Manager Director,” the audit report said. However, according to the same audit report, “the Board of Directors does not make written comments and observation on the quarterly budget performance," and in fact “there is no process of evaluation procedure of the company’s activities by the Board of Directors.”

     However, according to the same report, “the company had an overall regular staff of 595 people as of the end of 2004. The actual employees add up to approximately 750 by taking into account the casual employees (34), the cadets and internship students (31) and the petroleum sports team (86). The interviews held with management and other personnel revealed a preponderance of non-qualified personnel who represents around 90% of the total staff. As a whole, all services and departments are overstaffed. The permanent staff number is plethoric compared to the current activities of the company.”

     “The legal documents do not give precise details on supervision of the company by authorities, nor on the way in which this must be done. There is, in particular, no procedure governing the relationships between the Board of Directors and the ministries in charge of Energy and Finance.”

     That is so true then and now because the overly expected and unceremonious departure of Harry A. Greaves Jr., exposed the troubles and obvious decline of LPRC, an organization whose ability to be what it was created to be has been hampered by incompetent and corrupt officials in previous administrations and the present one; many of whom turned that organization into their personal ATM machines, and a place to get rich quick.

    The brute and unilateral way in which Greaves made decisions and ran the organization revealed the problems at LPRC, and also revealed the obvious lack of a coordinated structure that defines the supervision of personnel and the organization, even when there supposed to be other mechanisms in place such as the Board of Directors who supposed to have stopped the abuse of power and the theft of resources. 

     As it appears, the Board of Directors, the Manager Director and the rest of the team collaborated and protected each other as a way to get away with “murder,” as the individuals stole the financial and petroleum resources of LPRC day in and day out to satisfy their selfish objectives. It also shows some light into how Greaves’ predecessors ran LPRC, in terms of the lack of transparency, accountability, supervision, and decision-making, a reality that continues to haunt and destroy LPRC today.

       It is unknown whether President Sirleaf, who ran as a reformer, and wholeheartedly pledged to the Liberian people to fight corruption when she campaigned for the presidency in 2005, ever looked at the audit report, or ever took any concrete steps to change the corrupt organizational culture at LPRC? With such a damaging audit report, one would think President Sirleaf would jump on it immediately by appointing a competent and respectable Manager Director at LPRC, who is willing to change the culture of corruption there. As we all know now, the disgraced Harry A. Greaves Jr., was her choice.

     Because LPRC has been poorly managed for too long and seen as a place to work, steal, and get rich; and obviously a place where just about anybody who does not have the experience or college education can be appointed by rebel factions, political affiliations or through family connections, is a sad and powerful testimony of public service in Liberia.

     From what I know, most modern democratic countries do not have a government-run national petroleum refinery waiting around for appointed officials to steal from to get rich. In those societies, most petroleum refineries are private industries that strive to make profits, and most Information Ministries are propaganda tools quasi-democratic and repressive regimes used to squash political dissent and spread lies among the population to remain in power indefinitely. 

       Like the Ministry of Information whose Minister, Laurence Bropleh has been suspended indefinitely by President Sirleaf for alleged corruption, and like the directionless and corruption-plagued Liberian Petroleum Refinery Corporation (LPRC), whose Manager Director, Harry A. Greaves Jr., was recently fired for alleged corruption by the same president, tells us all that both organizations has outlived their usefulness and must be abolished.