INL_-_JAMS_II_PWS_(final_draft).pdf

United States Department of State Bureau of International Narcotics and Law Enforcement Affairs

PERFORMANCE WORK

STATEMENT

Justice Administration and Management Support Project

Ministry of Justice Institutional Assessment and Capacity Building Plan ii

TABLE OF CONTENTS

ACRONYMS AND ABBREVIATIONS ....................................................................................................... v

HISTORY/BACKGROUND.........................................................................................................................vii

I. INTRODUCTION

1.1 Overview and Purpose

1.2 S c o p e … … … … …… … … … … …… … …… … … … … ……

1.3 Background

1.3.1 Mandate and Key Functions of the Ministry of Justice

1.3.2 The Department of Administration and Public Safety

1.4 The Assessment Process

1.4.1 The HICD Model

1.4.2 The Assessment

II. ASSESSMENT FINDINGS

2.1 Strategic Level

2.1.1 Strategic Planning

2.1.2 Organizational Structure

2.1.3 Strategic Level: Key Performance Improvement Area and Impact Chart

2.2 Financial Management

2.2.1 Budget Preparation and Approval

2.2.2 Budget Execution

2.2.3 Cash and Bank Management

2.2.4 Accounting and Reporting

2.2.5 Internal Controls and Auditing

2.2.6 Financial Management: Key Performance Improvement Area and Impact Chart

2.3 Human Resources

2.3.1 Organization, Staffing and Capacity

2.3.2 Human Resource Planning

2.3.3 Recruitment and Selection

2.3.4 Compensation and Benefits

2.3.5 Performance Management

2.3.6 Staff Training and Development

2.3.7 Staff Time and Attendance

2.3.8 Staff Advocacy and Employee Disputes/Labor Relations

2.3.9 Human Resources: Key Performance Improvement Area and Impact Chart

2.4 Procurement

2.4.1 Process Management

2.4.2 Bid/Tender Administration

2.4.3 Compliance

2.4.4 Staff Output

2.4.5 Procurement: Key Performance Improvement Area and Impact Chart

2.5 Asset Management

2.5.1 Standard Operating Procedures

2.5.2 Asset Acquisition and Distribution

2.5.3 Receiving and Registry

2.5.4 Inventory and Monitoring

2.5.5 Asset Maintenance and Disposal

2.5.6 Staff Training and Development

2.5.7 Asset Management: Key Performance Improvement Area and Impact Chart

2.6 Information Technology

2.6.1 Planning and Organization

2.6.2 Staff Policies and Guidelines

2.6.3 Infrastructure and Equipment

2.6.4 Service Provision

2.6.5 IT Staff Professional Development

2.6.6 Employee Computer Proficiency

2.6.7 ICT: Key Performance Improvement Area and Impact Chart

2.7 Monitoring and Evaluation

2.7.1 Organizational Structure

2.7.2 Planning and Implementation

2.7.3 ICT Infrastructure

2.7.4 M&E: Key Performance Improvement Area and Impact Chart

2.8 Conclusion

III. CAPACITY BUILDING PLAN

3.1 Strategic Level

3.1.1 Systems

3.2 Financial Management

3.2.1 Policies and Procedures

3.2.2 Systems

3.2.3 Staff Training and Development

3.2.4 Technology

3.3 Hum an Resources

3.3.1 Policies and Procedures

3.3.2 Systems

3.3.3 Staff Training and Development

3.4 Procurement

3.4.1 Policies and Procedures

3.4.2 Systems

3.4.3 Staff Training and Development

3.4.4 Technology

3.5 Asset Management

3.5.1 Policies and Procedures

3.5.2 Systems

3.5.3 Staff Training and Development

3.6 Information Technology

3.6.1 Policies and Procedures

3.6.2 Systems

3.6.3 Staff Training and Development

3.6.4 Technology

3.7 Monitoring and Evaluation

3.7.1 Policies and Procedures

3.7.2 Systems

3.8 Conclusion

ACRONYMS AND ABBREVIATIONS

AfT Agenda for Transformation

ARIC Audit Recommendation and Implementation Committee

BIN Bureau of Immigration and Naturalization

CSA Civil Service Agency

DEA Drug Enforcement Agency

FMPP Financial Management Policies and Procedures

GEMS Governance and Economic Management Support

GOL Government of Liberia

GSA General Services Agency

HICD Human and Institutional Capacity Development

HR Human Resources

IFMIS Integrated Financial Management and Information System

IFB Invitation for Bid

INL Bureau of International Narcotics and Law Enforcement Affairs

INL - JAMS Bureau of International Narcotics and Law Enforcement Affairs Justice Administration and Management Support Project

IPSAS International Public Sector Accounting Standards

IT Information Technology

KPI Key Performance Indicator

LAN Local Area Network

LIBTELCO Liberian Telecommunications Company

LNP Liberia National Police

M&E Monitoring and Evaluation

MFDP Ministry of Finance and Development Planning

MOJ Ministry of Justice

MOPT Ministry of Posts and Telecommunications

MTEF Medium Term Expenditure Framework

PFMA Public Financial Management Act

PPCA Public Procurement and Concessions Act

PPCC Public Procurement and Concessions Commission

RFP Request for Proposal

RFQ Request for Quotation

SME Subject Matter Expert

SOP Standard Operating Procedure

TOR Terms of Reference

TWG Technical Working Group

USAID United States Agency for International Development

UTM Unified Threat Management vii

HISTORY/BACKGROUND

Strengthening rule of law in Liberia by increasing capacity at institutions like Liberia’s Ministry of Justice (MOJ) continues to pose significant challenges for the Government of Liberia (GOL) and its development partners. Implemented by IBI International on behalf of the U.S. Department of State’s Bureau of International Narcotics and Law Enforcement Affairs (INL), the project supports building the capacity of the MOJ to improve its performance and the overall function of the justice sector.

In January-February of 2015, INL - JAMS conducted an assessment of the MOJ in the areas of financial management, human resources, procurement, asset management (including fleet management and maintenance), information technology, and monitoring & evaluation. The purpose of this assessment was to identify deficiencies and develop interventions to build the organization’s human and institutional capacity.

The strategic level issues were addressed by adopting an approach that takes a long- term view towards enhancing the MOJ’s capacity. T he approach involved the development of a Ministry-wide strategic plan followed by a re- examination of the Department of Administration and Public Safety’s organizational structure. This helped promote both effectiveness and efficiency with respect to achieving strategic objectives.

INL - JAMS enhanced the financial management function at the MOJ by focusing on policy and procedure development, including process mapping and embedded controls.

The project would require a broadened focus to include capacity building in the form of training and technical assistance to strengthen compliance and reinforce sound financial management practices.

Because it is a process-driven function, INL - JAMS devoted significant attention to the area of human resources (HR) through the development of standard operating procedures, terms of reference, resource analysis, and process mapping. For follow-on years, additional activities, namely the development of systems designed to help the MOJ develop its HR function while ensuring compliance with all relevant Civil Service Agency (CSA) and GOL regulations are needed.

To comply with the Public Procurement and Concessions Act (PPCA), revised policies and procedures in procurement management and related systems will be required at the MOJ. INL - JAMS has developed these tools. The follow-on efforts must develop additional activities related to implementing the recommended solutions such as re-engineering processes, systems development and staff training will be implemented. The desired end result will be a procurement function that is efficient, transparent and responsive to the needs of end users.

viii

All asset management policies should promote the optimum utilization of MOJ assets.

Establishing an Asset Management Section in June of 2015 will be a major step forward in this direction. The assessment report suggested a focused effort predominantly on creating standard operating procedures and process mapping. With these tools in hand, the emphasis would shift to capacity building. A number of targeted training activities will provide staff in the newly-created section with the knowledge base needed to perform their jobs well.

Limited resources and a lack of investment in ICT infrastructure have made it difficult for the Department of Administration and Public Safety to function effectively. The Contractor shall assessment revealed that support for the development of policies and procedures coupled with targeted investments in key ICT infrastructure are required.

These activities will set the stage for further capacity building and related investments.

An ongoing monitoring and evaluation (M&E) function is essential if the Department of Administration and Public Safety is to develop systematically. INL - JAMS assisted the MOJ in developing M&E policies and procedures while establishing an appropriate organizational framework for operationalizing a robust M&E system. This system will engage all sections within the Department with an eye for improving performance consistent with the Ministry’s overall strategic direction. The project will support the development of an M&E unit, establishing a comprehensive M&E and knowledge management system with appropriate IT tools and software. Training will be provided on the components of an M&E system.

A separate Performance Monitoring Plan (PMP) is being developed to facilitate tracking the project’s progress through Key Performance Indicators (KPIs). The PMP, which will be dynamic in nature, will guide the JAMS team and other stakeholders to make the necessary adjustments for better outcomes throughout the project.

1 INL – JAMS II: Ministry of Justice Institutional Assessment and Capacity Building

I. INTRODUCTION

1.1 Overview and Purpose

Based on the findings of the assessment team, capacity-building activities will be developed and prioritized for annual implementation, targeting key performance gaps within the MOJ’s Department of Administration and Public Safety. In partnership with the Ministry, prioritization and implementation will be guided by cost-benefit considerations.

The resulting project work plan that emerges each year will include a closer monitoring and evaluation component that re-assesses performance gaps together with the effectiveness of solutions. The outcomes of these re-assessments will be used to inform implementation and make adjustments whenever or wherever needed.

1.2 Scope

Creating strong administrative functions within the Department of Administration and Public Safety, through the project, is expected to strengthen the support the Department will be able to provide to the justice sector in Liberia. The Contractor shall target an enduring organizational constraint: lack of capacity to perform essential administrative tasks – a deficit which impedes the operation of MOJ and its constituent organizations.

In partnership with the Ministry, the Contractor shall identify needs and implement durable solutions designed to improve its administrative functions. Such functions include strategic planning, financial management, human resources, procurement, asset/fleet management, information and communication technology, and monitoring and evaluation.

The vision of INL – JAMS is for the MOJ to have sufficiently developed its institutional capacity, along with relevant supporting human resources and enabling environment components, to direct and utilize its financial, human and material resources effectively towards fulfilling its mandate in the justice sector. The objectives of the Contractor are to ensure that:

1. Management and administrative systems and key organizational functions of the

MOJ conform to minimum internal standards and GOL laws;

2. The MOJ performs key administrative functions in an efficient, effective and timely manner without contractor oversight; and

3. GOL laws and procedures governing key administrative functions are adapted and implemented at the MOJ.

When fully implemented, the Contractor’s end result will represent the cornerstone of the INL’s engagement with the justice sector in Liberia.

1.3 Background

1.3.1 Mandate and Key Functions of the Ministry of Justice

The Ministry of Justice is the GOL’s foremost organizational entity charged with ensuring internal stability and justice throughout the country. The current mission of the MOJ is to provide “a reliable legal system appropriately structured and well-resourced to promote the rule of law, security and safety, and access to justice for the government and people of Liberia and our development partners.”

In addition to the Ministry’s core functions (e.g., litigation, codification, corrections, taxation, and economic affairs), the MOJ oversees a variety of auxiliary organizations responsible for civilian security, including the Liberia National Police, the Bureau of Immigration and Naturalization, the National Fire Service, the National Bureau of Investigation, and the Drug Enforcement Agency. Key GOL functions are spelled out in the Executive Law1 of the Republic of Liberia approved on May 11, 1972. This legislation directs the Minister of Justice to:

1. Procure the proper evidence for, and conduct, prosecute, or defend all suits and proceedings in the courts in which the Republic of Liberia or any officer thereof, as to such officer, is a party or may be interested;

2. Institute all legal proceedings necessary for law enforcement;

3. Furnish opinions as to legal matters and render services requiring legal skill to the

President and other agencies of the executive branch of the Government;

4. Oversee the codification of Liberian statutory law and the editing and printing of the Supreme Court opinions, and of such of the opinions of the Minister of Justice as he may deem valuable for preservation in book form;

5. Supervise the correctional system and the commitment and treatment of prisoners;

6. To the extent stated in the Aliens and Nationality Law, administer the laws relating to the admission, deportation and naturalization of aliens, and the regulation of aliens within Liberia;

7. Supervise the activities of the National Bureau of Investigation, the National Central Bureau, and the national police force;

8. Oversee all Government activities relating to the prevention and control of fires;

and

9. Direct the administration of the Vehicle and Traffic Law.

1 The Executive Law, Liberian Law Codes Revised, Volume III, Chapter 22, (June 9, 1972), page 393.

The Minister of Justice is appointed by the President by and with the advice and consent of the Senate. This individual oversees all MOJ core functions (hereinafter referred to as MOJ Central) as well as the auxiliary agencies.

1.3.2 The Department of Administration and Public Safety

Those administrative functions deemed essential for the effective operation of the MOJ are provided by the Department of Administration and Public Safety (hereinafter referred to as the Department) at the Ministry’s principal office in Monrovia. Decentralized management structures also exist at the county and district level; the scope of the JAMS project currently does not extend to the county and district levels of the MOJ.

The Department is headed by the Deputy Minister for Administration and Public Safety with the support of an Assistant Minister. Like the Minister, the Deputy Minister of Justice for Administration and Public Safety is appointed by the President. In the event of the Minister’s disability, death, resignation or removal, this individual is intended to succeed the Minister until his/her return or until a successor is appointed.

The following functional areas fall under the direct jurisdiction of the Department:

• Finance Section

• Personnel Section

• Press and Public Affairs

• Procurement Section

• Manpower Section

• Internal Audit Section

• Maintenance Section

• Public Safety Section

Within these organizational sub-units, the capacity building shall be focused on the separate but related areas of: (1) finance; (2) human resources; (3) procurement; (4) information technology; (5) asset management; and (6) existing monitoring and evaluation activities.

Although the MOJ is the cornerstone of Liberia’s justice system, it faces many challenges.

In addition to its capacity deficits, the MOJ suffers from unclear lines of authority, inadequate financial management practices, sub-optimal staffing patterns, and low levels of technical capacity.

As a result, the Liberia’s Ministry of Justice is unable to provide proper oversight of its constituent organizations or efficiently allocate resources to fulfill its mandate.

1.4 The Assessment Process

1.4.1 The HICD Model

The Human and Institutional Capacity Development (HICD) model was used to structure this assessment. Developed by USAID, HICD represents a systematic process for identifying organizational performance gaps, isolating their root causes, and addressing them with performance solution packages. The process takes into consideration three levels of performance: the organizational level, the process level, and the individual performer level. Appropriate monitoring and evaluation systems facilitate continuous improvement, since the organization is viewed as an adaptive system that needs to constantly respond to the changing environments in which it operates. When implemented rigorously, HICD provides organizations with the tools they need to enhance performance in ways that lead to measurable results.

The Human and Institutional Capacity Development Framework for Liberia JAMS

1. Conduct a diagnostic of MOJ’s organizational performance vis-à-vis its mandate

Conduct Change Management and Visioning Exercise

2a. Conduct capacity assessments along functions and against a set of established intl.

standards as well as GOL law/policy:

• Financial

Management

• Procurement

• Asset

Management

• HR

Management

• Information

2b. Define desired capacity along each function

Define and Prioritize Capacity Gaps

2c. Define current capacity along each function

3a. Develop a performance solutions package (PSP) in the form of capacity development programs along each function

3b. Develop a

Performance Management System (PMS) for MOJ and project

PMP

3c. Craft MOU

4a. Implement solutions

4b. Track performance along:

-Progress Markers (PM) related to embedding of solutions

- Key Performance Indicators (KPI) related to overall functional performance

4c. Continue change management and communication activities

Technology

• Monitoring &

Evaluation

5. Use the PMS as a “management” and “re-assessment” tool and make corrections in Performance Solution Package (PSP) implementation and accordingly

HICD is unique. It views organizations as adaptive systems with interrelated functions that respond to changing environments. Desired performance is defined and compared to actual performance in predetermined areas. This approach gives analysts the information they need to define and analyze performance gaps and uncover root causes related to six performance factors – information, resources and tools, incentives, knowledge and skills, capacity (e.g., the ability of employees to acquire new skills, etc.), and motives.

Since the goal of HICD is to improve organizational performance, measures are established and constantly monitored to ensure that interventions are successful. These measures are integrated into all activities.

The methodology has five phases:

• Assessments will provide baselines and improvement opportunities across each change dimension,

• Leading to the Design of roadmaps representing agreed-upon solutions, or interventions,

• Followed by Implementation of changes,

• Resulting in Sustained improvements through continuous monitoring activities, and

• Integrating Change Management processes throughout.

1.4.2 The Assessment

In January-February of 2015, INL-JAMS conducted an assessment of the MOJ in the areas of financial management, human resources, procurement, asset management (including fleet management and maintenance), information technology, and M&E. The purpose of this assessment was to identify deficiencies and develop interventions to build the organization’s human and institutional capacity.

INL-JAMS utilized the HICD model to perform this assessment. The process was heavily informed by the tools and insights provided by the Governance and Economic Management Support (GEMS) program funded by USAID. GEMS is a five-year program designed to strengthen public sector capacity in Liberia. It works with key ministries, agencies and state-owned enterprises to build capacity, provide training, and promote organizational growth and development.

Six subject matter experts (SMEs) focusing on specific administrative areas conducted the assessment. An institutional assessment advisor knowledgeable about the HICD method supplemented this team to provide overall guidance regarding the approach and other methodological issues.

From the MOJ, a Technical Working Group (TWG) representing each functional area was established to liaise with INL-JAMS staff, both during the assessment and throughout the implementation of the project. All TWG members were invited to participate in an HICD workshop to convey a thorough understanding of the approach. This helped to establish and maintain support as the assessment process unfolded.

Examples provided by GEMS and supplemented by legislative and regulatory documents were instrumental in developing initial performance indicators in each administrative area. In addition to serving as assessment tools, these indicators provided a basis for formulating recommendations and defining quantifiable Key Performance Indicators (KPIs) for inclusion in the MOJ’s monitoring and evaluation (M&E) plan.

Face-to-face interviews in conjunction with documentation reviews were the primary data-gathering methods used throughout the assessment. Documents consulted included the:

• Agenda for Transformation;

• Public Financial Management Act of 2009 and related regulations;

• Public Procurement & Concessions Act (as amended in 2010) and related regulations;

• Liberia Medium Term Expenditure Framework Manual;

• GOL Financial Management Policies and Procedures Manual, 2013;

• Internal Audit Strategy for the Government of Liberia, 2010;

• Internal Audit Act, 2013;

• General Services Agency Manual for Asset Management;

• Standing Order for the Civil Service, 2012; and

• Civil Service Agency policies and manuals.

Interviews targeted those stakeholders with first-hand knowledge regarding the indicators being assessed. These included MOJ line managers and staff, senior officials, and beneficiaries/end-users of administrative services, including beneficiaries/end-users in MOJ central as well as its auxiliary agencies and other organizational units, such as the Bureau of Corrections and Rehabilitation, etc. This approach allowed the INL – JAMS advisors to capture different perspectives and conduct a balanced assessment.

Performance gaps were identified and analyzed, after which root causes were determined.

This two-step process frequently involved additional interviews, process mapping exercises, and more in-depth documentation reviews. Key issues and challenges were identified and recommendations were formulated with MOJ staff input. Thanks to the HICD approach, a clear understanding of the fundamental causes of performance gaps provided a solid foundation for developing solutions.

Based on the findings of the assessment team, interventions were identified and consolidated for inclusion in the capacity building plan. The plan included in section III of this document features a strong M&E component designed to facilitate re- assessments of the effectiveness of all interventions on an ongoing basis. The findings of these re-assessments will be used to inform the performance solution packages and their ongoing implementation, making adjustments whenever or wherever needed.

II. ASSESSMENT FINDINGS

Liberia’s Ministry of Justice seeks to provide a reliable legal system that is appropriately structured and well-resourced to promote the rule of law, security, safety and access to justice for the government and people of Liberia. Toward that end, the strategic and operational capacity of the MOJ was assessed. Findings are synthesized below according to each functional area assessed. To maintain brevity, the Key Performance Improvement Areas are given priority focus within each narrative.

2.1 Strategic Level

2.1.1 Strategic Planning

The MOJ does not have a current strategic plan that documents its desired mission, vision, and strategic objectives. This lack of strategic direction at the Ministry level has led to an excessive degree of administrative autonomy within the organizational sub-units.

These units have grown at varying rates, and have adopted different strategies and visions with respect to the future. Since these units rely on the Department of Administration and Public Safety to support their operations, the uncoordinated growth of these units has resulted in significant challenges for the Department in responding to their unique needs. This hinders the Department’s ability to consistently provide highest-quality service.

The lack of a current, organization-wide strategic plan to ensure that the Ministry functions in a coordinated, well-planned manner is a debilitating factor that has led to uneven performance in areas like procurement, asset management, information and communication technology, human resources, and financial management. Net effects include an inability to plan workflow, suboptimal resource allocation, and inadequate planning for future growth.

2.1.2 Organizational Structure

The organizational structure of the MOJ is complex and not localized within MOJ Central’s office. The MOJ is headed by a Minister who is responsible for operations of the institution. It includes several separate agencies, each having its own director or commissioner. The ministry is sub-divided into bureaus headed by assistant ministers.

The Department of Administration and Public Safety has an opportunity to support all of these areas within the MOJ through their administrative functions.

The MOJ has grown significantly, but the Department has not been realigned to accommodate that growth. This has led to unclear lines of authority and responsibility, inadequate financial management, inefficient staffing, and decreased levels of technical capacity.

The net effect of this growth is an outdated organizational structure that could negatively affect the Ministry’s ability to ensure peace and stability in post-conflict Liberia. A systematic re-examination of this structure is needed to reform the MOJ and build its capacity as an effective, efficient and responsive organization.

2.1.3 Strategic Level: Key Performance Improvement Area and Impact Chart

Key Performance Improvement area and its respective impact are summarized below:

Key Performance Improvement Area

Impact

A lack of Ministry-wide strategic planning

Unclear strategic direction making it difficult for the Department of Administration and Public Safety to provide effective administrative support services; lack of a broad context for organizational activities and resource inputs.

Organizational structure lacking a clear chain of command, caused by significant growth without necessary reorganization.

Ineffective administrative management and service delivery; lack of alignment to the MOJ’s mandate.

2.2 Financial Management

The financial management of public resources of the GOL are generally regulated and governed by the Public Financial Management Act and Regulations (PFMA), the Public Procurement & Concessions Act and Regulations (PPCA), and the Internal Audit Act (IAA). The GOL has also adopted the Cash Basis International Public Sector Accounting Standards (IPSAS) as the standard for financial reporting for all government ministries, agencies and commissions.

The Finance Section has the responsibility for the efficient and effective financial management of the MOJ. In addition, the Finance Section provides support (e.g., review of payment vouchers, etc.) to the following auxiliary agencies of the Ministry: (1) the Bureau of Immigration; (2) the Drug Enforcement Agency; (3) the Liberia National Police;

(4) the National Police Training Academy; and (5) the National Fire Service.

The Finance Section is headed by a Comptroller who reports to the Assistant Minister for Administration. This individual is supported by sixteen staff members, including a Chief Accountant.

The PFMA has categorized financial management of public funds into five areas: (1) Budget Preparation and Approval; (2) Budget Execution; (3) Cash and Bank Management;

(4) Accounting and Reporting; and (5) Internal Control and Internal Audit. The basic objective of the financial management assessment was to evaluate the MOJ’s financial management compliance with relevant laws, regulations, and other administrative guidance of the GOL. The five areas mentioned above were assessed, and the key performance improvement areas were identified and are addressed below.

2.2.1 Budget Preparation and Approval

2.2.1.1 Medium Term Expenditure Framework Budget

The PFMA requires all GOL ministries and agencies to prepare Medium Term Expenditure Framework (MTEF) budgets. These budgets provide a link between the GOL’s Agenda for Transformation (AfT), its five year national development plan, and its annual budgeting cycle.

There are two main phases of MTEF budgeting:

1. Strategic Phase - provides ministries and agencies an opportunity to review their priorities and strategies before allocating their resources; and

2. Operational Phase - the ministries and agencies develop their detailed budget based on priorities agreed upon during the strategic phase.

The GOL’s AfT contains five pillars, or foundations for generating inclusive growth: 1) Peace, Security and the Rule of Law; 2) Economic Transformation; 3) Human Development; 4) Governance and Public Institutions; and 5) Cross-cutting Issues. Each of these pillars is supported by a group of relevant ministries and agencies.

The MOJ is a lead ministry of the first pillar mentioned above, the Peace, Security and Rule of Law Sector, which includes the following ministries and agencies: a) Ministry of National Defense, b) Special Security Services, c) National Security Agency, d) National Bureau of Investigation, e) Human Rights Commission, f) Judiciary, and g) Law Reform Commission.

The lead ministry or agency within a sector has the primary responsibility for the sector meeting its goals and objectives, as aligned with the AfT. The GOL’s MTEF budget guidelines call for sector working group meetings where key stakeholders in the sector meet to discuss the overall plan and strategy for the sector. The meetings should include the head of the lead government ministry (in this case, the Minister of Justice), who should chair the meeting; the lead development partner, who should co-chair the meetings; the Ministry of Finance and Development Planning (MFDP), who is the Pillar Manager; the Liberia Development Alliance; and key representatives from Civil Society.

During the strategic phase of this process, all GOL entities, including the MOJ, are required to: (1) examine/re-examine their programs and priorities to ensure alignment with the AfT and sector priorities; (2) develop medium-term plans with defined goals and objectives; and (3) associate costs with their respective strategic plans.

As the primary entity responsible for the rule of law and the Chair of the Security and Rule of Law sector, the MOJ should be actively involved in the strategic phase of the MTEF budget process for the Rule of Law sector. This involvement should include the active participation of key MOJ stakeholders and decision makers, especially senior officials. This active involvement was not evident at the time of assessment, particularly in the sector planning stage.

Limited participation in the MTEF process results in weak linkages between the country’s national development framework and MOJ programs. At the Ministry level, this translates into initiatives which are neither clearly articulated nor fully implemented.

This has hindered the development of a long-term strategy supported by a financial plan.

The root causes of the MTEF budget not being fully implemented by the MOJ are two-fold. The first of these is a lack of awareness regarding the MTEF framework and its requirements. While this framework is only two years old, it is gradually leading to a shift in the way budgeting is done in Liberia.

The second root cause is the lack of a Ministry-wide strategic plan capable of providing a point of reference for coordination with other GOL entities and AfT/national development plan objectives. Without a clear articulation regarding organization priorities and strategies, participation in the MTEF framework could be of limited utility, both to the MOJ and the GOL as a whole.

2.2.1.2 Budget Committee

The PFMA requires each ministry and agency to establish a Budget Committee responsible for reviewing and formulating the organization’s strategic plan based on the policies of the GOL; allocating resources based on objectives, outputs and activities;

coordinating and consolidating the budget; and monitoring and evaluating budget performance, among other responsibilities. The PFMA also stipulates the composition of the Budget Committee.

Due primarily to a lack of awareness regarding PFMA and its related regulations, the MOJ does not have a Budget Committee as required by the PFMA. The absence of an appropriately structured and well-functioning Budget Committee could result in a number of negative outcomes for the Ministry. Among these could be a failure to allocate resources consistent with its priorities and other inefficiencies. It could also cause the Ministry to be in noncompliance with MTEF budget regulations.

2.2.2 Budget Execution

2.2.2.1 Communicating Approved Budgets to Cost Centers

After the budget is approved, the Ministry of Finance and Development Planning (MFDP) authorizes ministries and agencies to spend appropriated funds provided by the MFDP in the form of allotments. According to the PFMA, approved budgets should be disseminated to heads of cost centers for use in implementing their activities.

The assessment revealed that the MOJ distributes the approved budget to some heads of cost centers. However, the approved budget should be available to all relevant stakeholders, including senior officials and heads of cost centers, as required.

Failing to provide this information can lead to poor implementation, inadequate control with respect to expenses, and an inability to achieve goals and objectives. It could also lead to inappropriate and/or unnecessary transfers of funds between line items and/or budget units.

The root cause of the MOJ not communicating the approved budget to all relevant stakeholders is the lack of full knowledge of MTEF budgeting.

2.2.2.2 Policies and Procedures

The MOJ’s written policies and procedures, which are intended to guide the budget execution process (including payments, accounting for financial transactions, and cash management), are included in a draft Financial Management Policies and Procedures Manual. Since the manual already exists in a draft form, the next step will include updating the manual, obtaining approval, and disseminating it to the staff.

The Deputy Minister for Administration and Public Safety, who is responsible for approving financial management policies and procedures, returned in February 2015 after an extended absence, so it should now be possible to get this manual approved.

The lack of documented and disseminated guidelines is likely to cause inconsistency in budget execution, leading to inaccurate and misleading financial information, so the revision and approval of this manual is a top priority.

2.2.3 Cash and Bank Management

2.2.3.1 Bank Reconciliation

PFMA guidelines regarding cash and bank management apply to all ministries and agencies. These guidelines address signatory authorities, approvals needed for opening bank accounts, bank account maintenance, and cash flow planning.

The GOL Financial Management Policies and Procedures Manual recommends that all ministries and agencies prepare monthly bank account reconciliation. In compliance with the GOL financial management policies, as of mid-January 2015, the MOJ had reconciled all of its bank accounts through November of 2014 at the time of the assessment.

However, it was observed that although the reconciliation form included the names of the preparer, reviewer, and the person approving the reconciliation, there were no dates indicating when the reconciliation was prepared, reviewed, and/or approved. It was also observed that some of the reconciliation forms did not have corresponding check numbers associated with outstanding amounts.

Without knowing when the bank reconciliation was prepared, reviewed, and/or approved, it is difficult to determine whether the reconciliations were prepared in accordance with established schedules. This is significant since delays in preparing bank reconciliations could result in errors that are not detected or corrected in a timely manner.

Systemic errors on the part of MOJ or bank staff could, if not detected early, require significant work to correct and result in inaccurate financial reports.

2.2.3.2 Petty Cash

The MOJ maintains a petty cash float of US$2,000 for the purchase of miscellaneous items, and has the appropriate forms, authority and approval processes for managing its petty cash. However, petty cash is kept in a safe along with the MOJ’s blank checks. One of the essential principles of internal control is to assign responsibilities to specific employees.

Control is more likely to be optimal when only one person is responsible for a given task.

Several Finance Section staff members have access to the MOJ’s safe. These include the Comptroller, Chief Accountant, Special Assistant to the Comptroller, and Petty Cash Custodian. It was also evident that no audits or “surprise” petty cash counts had been conducted that anyone could remember. The root cause of this lack of effective control is the absence of written policies or procedures to guide staff members regarding appropriate controls over cash.

With several staff having access to the safe, it may be difficult, if not impossible, to assign responsibility should an issue or problem arise. In addition, the absence of audits or “surprise” cash counts could lead to errors and/or a misappropriation of funds not being detected in a timely manner, thus reducing the probability that losses will be recovered

2.2.4 Accounting and Reporting

2.2.4.1 Financial Statements

The GOL has adopted the cash basis IPSAS as its standard for financial reporting and requires all ministries and agencies to adhere to it. Additional guidance is provided by the PFMA. The PFMA requires the MOJ to prepare general purpose financial statements within two months after the end of each fiscal year. PFMA regulations also require that quarterly financial reports (budget performance reports) be submitted to the MFDP within 15 days after the end of each quarter.

At the time of the assessment, the MOJ was in the process of preparing its fiscal year 2013- 14 general purpose financial statements to the MFDP, which was due to the MFDP in August, 2014. In addition, even though the quarterly reports for the periods ending on September 30, 2014 and December 31, 2014 had been prepared in compliance with the PFMA, they had not been submitted as required.

The MOJ’s 2012-13 general purpose financial statements were prepared using an Excel template. This template, however, did not completely conform to cash basis IPSAS requirements, as it did not include a comparison of the approved budget with actual amounts, nor did it include the cash basis IPSAS-required notes to the financial statements.

Delays in submitting financial information that conforms to cash basis IPSAS standards is likely to impair the relevance of such information.

The root cause of these delays is a lack of capacity in the Finance Section. Preparing financial statements is currently the responsibility of the Chief Accountant. This individual has many other pressing responsibilities, including budgeting and other accounting functions.

2.2.4.2 Accounting for Transactions

The GOL uses IFMIS accounting software; however, the full accounting and financial reporting module is not installed at the MOJ. As a result, the Finance Section cannot account for its operational, donor and other project funds using IFMIS. By the same token, it cannot account for other revenues generated by the MOJ, nor can it create general ledger reports or prepare the financial statements required by PFMA regulations using

IFMIS.

Because the MOJ has limited access to IFMIS modules, not all of its financial transactions are tracked and recorded in one integrated accounting software system. The Finance Section, in order to perform its financial management responsibilities, has supplemented the recording and tracking of financial transactions, including donor funds, with both manual and other automated systems, such as books, ledgers, and Microsoft Excel spreadsheets. Financial data has to be extracted from several sources and reformatted to be combined with other data to create financial reports, which is a time-consuming process.

The end result of this limited accessibility to relevant IFMIS modules is delays in processing financial information and reports. It could also lead to inaccurate financial information due to manually extracting, combining and reformatting data from error-prone manual and automated systems. Compounding the latter is the fact that errors made by Finance staff when entering transactions into IFMIS cannot be easily corrected by staff. Such errors can be only be corrected by the Comptroller & Accountant General’s Office at the MFDP using that office’s IFMIS system.

Without accurate financial reports, MOJ officials and policy makers are unable to make informed decisions or effectively plan for future activities.

2.2.5 Internal Controls and Auditing

2.2.5.1 Organizational Structure of the Finance Section

For internal control purposes, the GOL Financial Management Policies and Procedures Manual (hereinafter the Financial Management Manual) recommends that all ministries and agencies adopt an organizational structure that includes two deputy comptrollers -one for accounting and the other for budget. This is particularly important given the complexity of the MTEF budget process. This process includes budget preparation, approval, execution, reporting, and monitoring. It is an ongoing process that unfolds throughout the year.

The MOJ currently lacks appropriate senior-level staff in its Finance Section (e.g., a Deputy Comptroller for Budget or Deputy Comptroller for Accounting). Both positions are recommended by the GOL Financial Management Policies and Procedures Manual.

At the time of the assessment, the MOJ had been discussing having a senior-level person manage the MTEF budget function.

Because there is no staff member fully conversant with all MTEF requirements or capable of managing the budget process consistent with GOL requirements, the MOJ is not fully compliant with all applicable budget regulations.

2.2.5.2 Staffing

The GOL Financial Management Manual also provides guidance regarding the internal control structure of each ministry and agency. This structure should incorporate organizational entities staffed by qualified and competent individuals capable of assuming key responsibilities.

There are currently 17 staff members in the Finance Section. These include a Comptroller and Chief Accountant supplemented by several staff accountants, financial analysts, accounting clerks, and one expediter. Many staff members, however, lack adequate knowledge regarding public financial management and related regulations.

For the most part, this can be attributed to the fact that most staff members have not had sufficient training in financial management, including accounting, the MTEF budget process, or accounting software. There is also a lack of adequate training regarding some of the tools staff are required to use, such as IFMIS and Microsoft Excel.

Inadequate knowledge of what public financial management entails coupled with a lack of familiarity with GOL rules and regulations regarding the management of public funds, may result in the MOJ not fully complying with GOL regulations and guidelines governing financial management.

2.2.5.3 Financial Management Policies and Procedures

Effective internal controls require that policies and procedures be documented, communicated, and accompanied by a commitment to compliance. In order for such documentation to be useful and ensure compliance, it should also provide step-by-step instructions and detailed guidelines for collecting, analyzing, tracking, recording, processing and reporting all financial transactions.

The Finance Section has developed its own Financial Management Policies and Procedures Manual (hereinafter FMPP Manual). While the FMPP Manual covers many general processes, some sections require more specificity. They do not include step-by-step instructions, detailed guidelines, process maps, or embedded controls.

Due to the absence of an approved and disseminated FMPP Manual, staff are following unwritten processes that lack uniformity. In addition, undocumented procedures and processes that are not accompanied by step-by-step instructions and detailed guidelines may result in confusion as to how processes should be executed and could cause inconsistencies with respect to processing transactions.

2.2.5.4 IT Infrastructure

More than half of the staff members in the Finance Section require the use of computers on a daily basis to carry out their tasks. Unfortunately, the hardware and software needed for PFMA-compliant financial management are not available. At the time of the assessment, there were only four functioning computers in the Finance Section, requiring accounting staff to queue to get their tasks done.

The absence of required hardware and software results in delays with respect to processing financial transactions, sometimes resulting in non-compliance with deadlines.

2.2.5.5 Internal Audit

The PFMA and the Internal Audit Act requires all GOL ministries to establish an internal audit unit, which shall be headed by a Director. The MOJ, in compliance with the PFMA and the Internal Audit Act, has established an Internal Audit Section staffed by eleven individuals and headed by a Director. The Director is assisted by a Deputy Director, both of whom are seconded to the MOJ by the GOL Internal Audit Agency.

The Internal Audit Section at the MOJ is required to assist the MOJ in promoting effective, efficient, ethical, and economical operations by appraising the adequacy of internal controls, consistent with all applicable GOL legislations and regulations. Its responsibilities include, among others, (1) Reviewing compliance with the existing government financial regulations, instructions and procedures, (2) evaluating the effectiveness of the Internal Control Systems, (3) appraising the economy and effectiveness with which financial and other resources are being used, (4) reviewing the reliability and integrity of record keeping and reporting on financial and operating information systems, and (5) pre-auditing payments and examining documents, including allotment, procurement, commitment, payment, and reconciliation, (6) reviewing budgetary controls on issuance of allotments, commitments, expenditures, revenue collection and accounting from time to time, (7) ensuring that government physical assets are appropriately recorded and are kept under safe custody, and (8) reviewing the budgetary reallocation process to ensure legislative and administrative compliance, and advising when commitments are entered into when there is no budgetary provision or adequate cash.2

Consistent with its mission, the Internal Audit Section typically provides management with information, appraisals, recommendations, and counsel regarding the activities examined and other significant issues. The Section normally executes an approved audit work plan and performs the following tasks based on its overall strategy:

• Verify the existence of assets and recommend proper safeguards for their protection;

• Evaluate the adequacy of the system of internal controls;

• Recommend improvements in controls;

• Assess compliance with policies and procedures and sound business practices;

• Assess compliance with state laws and contractual obligations;

• Review operations/programs to ascertain whether results are consistent with established objectives and whether the operations/programs are being carried out as planned; and

• Investigate reported occurrences of fraud, embezzlement, theft, waste, etc.

The Internal Audit Section is mandated by the Internal Audit Act and the GOL Internal Audit Strategy to perform pre-and post-audits. According to the Executive Director of the GOL Internal Audit Agency and the MOJ’s Internal Audit Director, pre-audits are mostly

2 The GOL Internal Audit Strategy of an assurance and advisory nature. The pre-audit process involves the internal auditors reviewing payment documents to ensure that all required supporting documentation is part of the payment process and that these documents have the proper authorizations, reviews and approvals, while meeting the requirements of the PPCA and PFMA guidelines.

When all requirements are met, the internal auditors sign a memo attached to payment documents indicating that the documents conform to relevant requirements. If payment documents are not in compliance, the internal auditors do not have the authority to stop the payment. They may, however, prepare an advisory note to relevant MOJ officials to advise them that the payment documents are not in compliance.

Having internal auditors review and sign each and every payment document can delay the processing of financial transactions. This sometimes results in payments which are not expeditiously made.

The internal auditors are also part of the attestation process at the MOJ – they are present when goods are delivered and observe the goods delivery…