Introduction
The Ministry of Finance (MoF) has to be radically restructured to make it an effective fiscal policy tool of the Liberian government. Fiscal policies are public policies “regarding taxation and spending” to achieve economic goals. Currently, the Ministry performs three major functions for the Liberian government- (a) government revenue collection (receipts) function, (b) government expenditure and debt management function, and (c) government general accounting function. The accumulation of these services by the Ministry of Finance has resulted in a mammoth government bureaucracy with a very poor internal control structure. Therefore, this paper is intended to suggest how Dr. Sayeh could restructure the MoF to make it an effective and efficient instrument in the implementation of government fiscal policies.

(A) Government revenue collection function. The Revenue Division at the Ministry of Finance is headed by the Deputy Minister for Revenue. The division through its various departments including customs & excise, real estate, corporate and individual taxes, and income tax, among others, collects government revenues.

(B) Government expenditure and debt management function. The government expenditure and debt management division is headed by the Deputy Minister for Expenditure and Debt Management. It is primarily responsible for the accumulation and monitoring of both domestic and external obligations of the Liberian government.

(C) The general accounting function. The Bureau of General Accounting performs accounting of the transaction processes undertaken by the government of Liberia. According to Mr. Wallace Powell, the former Comptroller General at the MoF from 1986 to 1989, the MoF uses a single-entry booking keeping system. The accounting system at the MoF is not based on the double-entry bookkeeping system. Also, the Liberian government does not produce standard sets of financial statements based on the authority of any internationally recognized accounting body.

Analysis
A sound internal control system requires the separation of the authorization, receipt (custody), and disbursement functions. It serves as a process by which an organization governs its activities to effectively and efficiently safeguard its resources. The execution of the receipt and disbursement functions by the MoF undermine the concept of the separation of responsibility, accountability; effectively and efficiently safeguarding assets in its fiscal policy implementation. Elsewhere in Africa, countries including Ghana, Uganda, and others recognized these structural weaknesses which resulted in corruption in the revenue collection processes, and separated their revenue receipt and disbursement functions. According to U4-Utstein Anti-Corruption Centre (WWW.U4.no/projects), these semi-independent revenue authorities were established to improve revenue collections in the face of corruption in the revenue collection processes.

The Ministry of Finance is the fiscal policy conduit of the Liberian government. The MoF is responsible for the expenditures the government incur to provide goods and services, and how it finances (taxation and borrowing) the expenditures. Therefore, the expenditure and debt management function of the MoF is consistent with the recognition by Ghana, Uganda and others, to separate the revenue collection and disbursement functions in view of the weaknesses in the MoF internal control structure. However, the BGA function should come directly under the authority of the Office of the Comptroller General because the office should be responsible for financial administration, and strengthening financial stability at the MoF. It would help to ensure coherence, efficiency and effectiveness. The weaknesses in Liberia’s financial management system have contributed to widespread corruption, inefficiency, ineffectiveness and incoherence in the implementation of government fiscal policies by the MoF.

The general accounting system at the MoF is not based on the double-entry accounting
system. The system does not provide for recording of every transaction in two accounts.
The major advantage of the double-entry accounting system is it provides check and
balance to ensure accounts are always in balance. This factor could be responsible for
the failure of the Liberian government to produce a set of financial statements based on
the authority of any internationally recognized accounting body that include Statement of
Net Assets, Statement of Activities, Statement of Revenues, Expenditures and Changes in
Fund Balances, and the required supplementary schedules on an annual basis.

In view of these weaknesses in government financial reporting system, and the lack of transparency and accountability in government transaction processes, the international community has incorporated the Integrated Financial Management Information System (IFMIS) as a key component of the Governance and Economic Management Assistance Program (GEMAP) to ensure accountability and transparency in Public Financial Management (PFM). According to the protocol signed by the former Transitional Government of Gyude Bryant, the IFMIS system includes expenditure and procurement modules. The expenditure and procurement modules will be interfaced with the internet based procurement system, and the treasury system provided by the United States government. Therefore, Finance Minister Sayeh should consider the following recommendations for implementation due to the observable weaknesses in the MoF internal control structure:

Recommendations
· The introduction of legislation to establish the Liberia Revenue Authority (LRA). The authority should be autonomous of the Ministry of Finance. The LRA should comprise employees of the Bureau of Revenue, Bureau of Customs and Excise, Bureau of Revenue Audit, and all other bureaus at the MoF engage in the collection or generation of government revenues. The responsibilities of the LRA should be to dispense the tax laws of Liberia in a “fair and equitable manner”, collects all taxes (personal income, corporate, real estate, business royalties, fees, among others) in and out of Liberia. The LRA should be headed by an Executive Director, and other officials to be prescribed by law. The establishment of the LRA will address the inherent weakness in revenue generation process at the MoF that has contributed to corruption and inefficiency. This mission is consistent with the recognitions by Ghana, Uganda, and others which resulted in the separation of their revenue function from their expenditure and debt management function.

· The expenditure, debt management, and government financial reporting should remain the primary responsibilities of the MoF. Therefore, the Finance Minister should merge the Bureau of General Accounting with the Office of the Comptroller General to strengthen the capacity of the office. Appoint three Deputy Comptrollers to assist the Comptroller General. Deputy Comptroller for Expenditure Management, Deputy Comptroller for Financial Analysis (accounting, financing reporting, etc), Deputy Comptroller for Revenue, and a Chief Information Officer responsible for information technology services. The responsibilities of the comptroller’s office should include providing accounting and financial services, developing accounting and financial policy for the government of Liberia, preparing monthly financial reports, and supervising the fiscal affairs of local government, among others.

· The government of Liberia should adopt the Governmental Accounting Standards Board (GASB) authority given that the Liberian government does not base its financial reporting on the authority of any internationally recognized accounting body. GASB is the authoritative body that sets governmental accounting standards in the United States of America. The objectives of GASB are “to establish and improve standards of state and local governmental accounting and financial reporting that will result in useful information for users of financial reports and guide and educate the public, including issuers, auditors, and users of those financial reports” (WWW.gasb.org). In addition, the finance ministry should implement fund accounting in view of the absence of any authoritative accounting system being used by the government. A fund accounting system separates revenue and expenses by fund. The major advantage of fund accounting is that it would allow the Liberian government to track and report the activity of a particular fund. In addition, a fund accounting system classifies fund based on their functional classification.

· The Finance Minister should request technical assistance from United States Agency for International Development (USAID) to assist Liberia in the implementation of the GASB standards. The advantages of adopting GASB as government accounting authority are several, (a) most senior level government accounting professionals obtained their accounting education in the United States, (b) Most Liberian accountants in the Diaspora have their education and training in United States, (c) Liberian business schools use United States text books for their accounting education, and (d) Liberian auditing standards are guided by American Institute of Certified Public Accountants (AICPA) authority.

· Each government ministry or agency should perform its own accounting function and submits the report to the Office of the Comptroller General of the MoF. The MoF should prepare a Comprehensive Annual Financial Report (CAFR) on an annual basis. The financial report should be audited by a reputable accounting firm annually. A Chief Financial Officer (CFO) should be appointed at each ministry, and he/she should be trained in fund/governmental accounting. The fund accounting system could be part of the IFMIS system scheduled to be implemented by the government of Liberia, or an accounting system such as J.D Edwards could be implemented and interfaced with IFMIS. . For example, Sierra Leone has a variation of fund accounting component to its IFMIS system.

· Each ministry or state agency should appoint an inspector general that will report directly to the Auditor General (AG) of the Republic of Liberia. The government of Liberia should enforce the May 2005 amendment to 1972 Bureau of General Auditing Act that mandated the AG to report directly to the legislature on an annual basis (AFID Liberia Anti-Corruption Scoping Study Report, December 2005). The public corporations should appoint internal auditors that will report directly to the board of directors of each public corporation. The rationale for these reporting requirements is to minimize corruption, improve transparency, and consequently establish a strong internal control system within government functionaries to safeguard the assets of the Liberian people.

· The government should recruit professional Liberians to work with the USAID experts to develop the framework for the implementation of GASB standards in Liberia. Additionally, the government should recruit local universities business graduates to train them in the theory and practice of fund accounting to serve as staff to their more experienced counter-parts.

· The issue of human resource capacity building has been a major problem in many of the developing countries where IFMIS has been implemented. It is a common problem with the introduction of high technology in any low capacity country. Therefore, the government of Liberia should recruit a consortium of professional Liberian staff to participate in the implementation of the IFMIS. The recruitment and training of Liberian professionals would enable the accounting system and information system architecture implemented to be sustainable.

Conclusion
The implementation of these reform measures by Dr. Sayeh will strengthen the government of Liberia revenue collection capacity, financial reporting system, accounting services and information technology management. Liberia is at a crossroad in its socio-economic development efforts; hence, the time is now to implement the reform agenda that will separate critical functions in government revenue receipt and disbursement functions to help bring out accountability, transparency and responsibility in public sector financial management.

About the author: Winsley S. Nanka is a Certified Public Accountant (CPA) and a writer. He is a Senior Associate at a Pittsburgh based public accounting firm. He can be reached at cokienanka@aol.com