Monrovia — The General Auditing Commission (GAC) has uncovered serious governance and management lapses at the Liberia Electricity Corporation (LEC), raising questions about oversight, operational planning, and major agreements with key power projects.
The audits cover fiscal years ending June 30, 2018, 2019, 2020, 2021, the Special Budget Year (SBY) 2021, and fiscal years 2022 and 2023.
According to the GAC, the LEC Board of Directors failed to demonstrate effective oversight, contrary to Regulation M.12 of the Public Financial Management Act (PFM Act) of 2009, as amended in 2019, which mandates boards of state-owned enterprises to ensure the efficient management of financial resources and proper governance structures.
The audit also cited a breach of OECD corporate governance principles, which require boards to operate with clear leadership, accountability, and defined procedures.
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No Evidence of Board Meetings or By-Laws
Auditors reported that between July 2018 and December 2021, there was no evidence of any board meetings being held. Minutes of meetings were not provided, and there was no proof of established committees, such as audit, risk, nomination, or remuneration committees — structures that are critical to transparency and oversight.
The report warned that the absence of board by-laws and regular meetings severely undermined strategic oversight, allowing management to operate without checks and balances.
“Failure to develop a by-law that will guide the activities of the Board may lead to arbitrary decisions by members of the Board,” the report cautioned.
GAC Recommends Urgent Governance Reforms
The Auditor General recommended that LEC management immediately collaborate with relevant authorities to develop, approve, and operationalize board by-laws and governance policies. These should clearly define the board’s composition, roles, responsibilities, meeting schedules, and oversight mechanisms.
The GAC further advised that minutes of all board and committee meetings be properly documented, signed, and archived for future reference and accountability.
In response, LEC management informed the GAC that a Governance Review Committee had been established to draft the corporation’s constitution and by-laws. The management also submitted a draft copy of the governance code for review.
The Auditor General acknowledged the management’s commitment but said the GAC will “follow up on the implementation of the recommendations during subsequent audits.”
LEC Lacked Approved Strategic and Operational Plans
Another major lapse highlighted in the audit was the absence of approved strategic and operational plans to guide LEC’s operations during the years under review.
According to Regulation D.19 of the PFM Act, each government entity is required to prepare a strategic plan outlining its mission, goals, and measurable outputs, while Regulation D.22 mandates that such plans be reviewed and aligned with national fiscal policies.
However, the GAC observed that LEC “operated the entity without evidence of approved strategic and operational plans,” raising concerns that the corporation lacked clear direction for achieving short-, medium-, and long-term goals.
The commission highlighted that this gap in governance could prevent the corporation from identifying and implementing short-, medium-, and long-term goals, thereby impairing its overall performance and achievement of organizational objectives.
“During the audit, we observed that Management operated the entity without evidence of approved strategic and operational plans for the periods under audit. Risk: Short, medium and long-term goals of the entity may not be identified, pursued and implemented, thereby impairing the achievement of the organization’s objectives,” the GAC report noted.
The report warned that this deficiency could result in arbitrary decision-making and impair the entity’s ability to meet its objectives.
Management Cites Expired Business Plan
In its defense, LEC management said it previously operated under a five-year business plan (2019-2023), which has since expired. A new strategic plan covering 2025-2030 has reportedly been drafted and submitted to the Board for approval.
“LEC had a 5-year business plan from 2019-2023, which expired. A new (strategic) plan has been prepared and submitted to the Board of Directors covering the period 2025 to 2030… However, we note the recommendation regarding the operational plan,” LEC management stated.
The Auditor General, however, maintained that no evidence of board approval was provided for either the expired business plan or the new draft.
“We observed no evidence that the five-year business plan was segmented into operational plans on an annual basis,” the GAC noted, maintaining its findings.
The commission said it would continue monitoring the LEC’s compliance with its recommendations to ensure improved corporate governance, strategic planning, and accountability in future audits.
The audit report also uncovered financial and operational irregularities in the LEC agreements with private electricity distributors–LIBENERGY, JEP, and LIBANGO–raising fresh concerns about transparency and accountability in the management of the nation’s energy sector.
According to the GAC, it found glaring compliance failures and weak oversight in the electricity supply and distribution arrangements in Maryland, River Gee, Grand Gedeh, Nimba, and Bong counties, as well as with the LIBANGO Super Vendor Contract.
LIBENERGY Agreement
The GAC observed that no evidence existed of check and revenue meters at input points for measuring electricity supplied and sold in the Maryland, River Gee, and Grand Gedeh distribution areas. The auditors also found no record of a fixed assets register, no monthly billing and collection reports, and no documentation of energy supplied by Côte d’Ivoire’s Compagnie Ivoirienne d’Électricité (CIE) since the agreement’s inception in March 2023.
The report further revealed that there was no evidence to show that LIBENERGY, the distributor, remitted any government revenue share to the LEC and that maintenance of power lines was poor, with overgrown bushes and unkept transmission corridors posing risks to service continuity.
The GAC concluded that such lapses expose the sector to “underreporting and collection gaps in revenue,” potential mismanagement of government assets, and breaches of contractual terms.
“In the absence of installations of the required infrastructure, electricity received and subsequently distributed may not be comprehensively determined,” the audit noted. “This may lead to underreporting and collection of source revenue from electricity distribution.”
Recommendations
The GAC urged LEC management to justify its failure to enforce the terms of the agreement and to account for all revenue collected by LIBENERGY but not remitted. It further recommended that the corporation immediately install check and revenue meters at all input points, develop and operationalize a fixed assets register; require monthly billing and collection reports from LIBENERGY; ensure periodic inspection of power lines and equipment; and collect the government’s share of revenue on a monthly basis.
In its response to the GAC, LEC’s management said it had taken steps to strengthen oversight of the LIBENERGY agreement, including the appointment of a Contracts Manager to coordinate contract monitoring and the establishment of a Rural Electrification Unit to complement those efforts.
“An engagement framework was developed and work began in earnest,” the LEC stated. “Currently, a Rural Electrification Unit is fully functional, complementing the contracts manager in ensuring that all conditions specified in the contract are adhered to.” The LEC also claimed it had provided supporting documentation to demonstrate its progress toward improving contract compliance and monitoring.
However, the Auditor General’s Office rejected LEC’s explanation, saying the management’s assertions “did not adequately address the issues raised.”
The GAC maintained that LEC had failed to provide any substantive justification for not enforcing the terms of the LIBENERGY agreement or for not accounting for revenue collected but not remitted to the corporation.
This finding comes as Liberia continues to struggle with settling electricity bills owed to Côte d’Ivoire–the main supplier of power to the southeastern region through CIE–which has, at times, threatened to disconnect supply over unpaid debts.
JEP Agreement: Faulty Metering, Weak Oversight
In Bong and Nimba counties, the GAC reported similar failings under the JEP Electricity Supply Agreement. JEP is owned by renowned businessman Floyd Toma. The audit found that the check meter at the Ivorian input point had been damaged for about three years, leaving no system to accurately measure energy imports and sales.
According to the GAC, there was no evidence that check and revenue meters were installed at the input points to measure electricity supply, distribution, and billing. The audit further revealed that the check meter at the Ivory Coast input point had been damaged for about three years, making it impossible to verify the actual amount of electricity imported and consumed in Liberia.
The auditors quoted JEP management as saying that LEC had been unable to install a functional check meter at the input point in Ivory Coast since the start of the agreement.
Owned and operated by Tomah Seh Floyd, Sr., Jungle Energy Power (JEP) was established in 2017 and received its operating license from the Liberia Electricity Regulatory Commission (LERC) in 2021. The company holds a 25-year contract with the Liberia Electricity Corporation (LEC) to supply electricity to rural communities, including those along the Liberia-Guinea border.
JEP operates under a Power Purchase Agreement (PPA) between the LEC and Côte d’Ivoire’s Compagnie Ivoirienne d’Électricité (CIE), which provides 41 megawatts of power to JEP. The company sells the electricity, with profits shared among JEP, LEC, and CIE.
No Financial or Activity Reports
The audit also found no record of periodic financial or operational reports submitted by JEP to LEC — a key requirement to determine the Government of Liberia’s share of revenue, manage fixed assets, and evaluate the quality of power delivered to end users.
The GAC further observed that LEC failed to conduct inspections of JEP’s operations, including distribution, maintenance, and installation activities, and had not reviewed the company’s finances, accounts, or information systems.
In addition, there was no evidence that LEC prepared monthly statements of liabilities detailing amounts due from JEP as required under the agreement.
Risks and Implications
The GAC warned that the absence of meters, records, and oversight mechanisms exposes the power sector to serious financial and operational risks.
The audit further warned that weak recordkeeping and lack of inspections could result in mismanagement, revenue losses, and potential contract breaches, undermining the government’s ability to ensure fair returns from third-party operators.
To address these lapses, the GAC called on LEC management to justify its failure to enforce the terms of the agreement and to take urgent corrective actions, including installing functional check and revenue meters at input points; ensuring JEP prepares and submits monthly billing and collection reports; enforcing timely payment of the government’s revenue share; conducting periodic inspections of JEP’s operations; and requiring regular financial and activity reports to track performance and revenues.
LEC management, in its response, claimed it had taken steps to strengthen contract monitoring. It said a Contracts Manager had been appointed to coordinate the monitoring of franchise agreements, and that a Rural Electrification Unit had been established to complement this effort.
“An engagement framework was developed and work began in earnest,” LEC stated. “Currently, a Rural Electrification (RE) Unit is fully functional, complementing the contracts manager in ensuring that all conditions specified in the contract are adhered to.”
Despite these claims, the GAC said LEC’s response did not adequately address the core issues identified during the audit.
The GAC maintained its findings and recommendations, emphasizing that it will follow up on their implementation in subsequent audits.
LIBANGO: No Record of Tokens Sold, Poor Oversight…
The GAC exposed major lapses and irregularities in the management of the LIBANGO Super Vendor Contracts — a key component of the Liberia Electricity Corporation’s (LEC) prepaid electricity system — citing missing records, weak oversight, and unverified revenue figures from token sales.
According to the GAC, there was “no evidence of total tokens sold by LEC to LIBANGO on an annual basis” and no record of “tokens subsequently sold to end users by LIBANGO.”
No Record of Token Sales or Commission Reconciliation
The auditors also found no periodic sales reports from LEC to verify total revenues generated from token sales or to confirm the commissions paid to LIBANGO. In addition, there was no evidence that LEC conducted the required biennial compliance assessments of LIBANGO, as stipulated in the Super Vendor Agreement.
Cyberattack and Insurance Oversight
The GAC also noted that LEC failed to conduct or provide any independent assessment following a major disruption in August 2023, reportedly linked to a cyberattack on LIBANGO’s systems. The report found no evidence of an internal review by LEC on the integrity and security of LIBANGO’s IT infrastructure during and after the incident.
In addition, the auditors observed that LEC did not assess or verify insurance coverage for LIBANGO’s operations during the disruption period, as required under Article 20 (“Insurance”) of the contract, which mandates that LIBANGO maintain insurance on its assets and operations and provide annual proof to LEC.
The GAC warned that the lack of proper documentation and reconciliation creates serious risks of revenue loss and financial misstatement.
The audit further cautioned that without regular reviews of third-party contracts and services, LEC risks contract breaches and revenue shortfalls, potentially undermining the government’s financial interests in the electricity sector.
GAC Recommendations
The GAC recommended that LEC submit a comprehensive annual report detailing the number of tokens sold and associated commissions, and that it strengthen its financial management systems to ensure full accountability.
The GAC called on LEC to link its Microsoft Dynamics accounting system with LIBANGO’s financial management platform for real-time monitoring and reconciliation of token sales and commissions; create a subsidiary ledger to record all tokens sold, re-sold, and associated commissions, conduct periodic reconciliations among tokens generated, sold, and recorded in bank statements, carry out a biennial review of LIBANGO’s compliance with the Super Vendor Agreement; and maintain documentation of all reconciliations and compliance reviews for future audits.
LEC’s Response
In its response, LEC said it had attached a comprehensive report of sales to LIBANGO and corresponding commissions paid. The corporation explained that commissions were calculated based on deposits made by LIBANGO into LEC’s bank accounts.
“Deposits are made in advance of receiving credits, and commissions are calculated on the deposits at the time of receipt,” LEC said. “This has been the mode of operation since April 2019.”
Prior to that, commissions were calculated at a fixed rate of 3.14 U.S. cents per kilowatt-hour (kWh) sold, based on a uniform tariff of US$0.35 per kWh, the management added.
However, the GAC said LEC’s response failed to address the core audit issues, particularly the absence of data on the number of tokens sold.
The GAC therefore maintained its findings and recommendations, emphasizing that it will follow up on the implementation of corrective measures in future audits.
TRANSCO CLSG — Missing Portfolio Documents, Undisclosed Returns…
For TRANSCO CLSG, the GAC audit revealed major governance and financial irregularities surrounding the LEC investment in the regional power transmission company. The findings expose the absence of critical investment documentation, lack of transparency on returns, and failure to verify key financial confirmations — issues that auditors say could lead to misstatement of financial records and potential loss of public funds.
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According to the GAC, the Financial Statements Audit of the LEC for fiscal years 2018/2019 through 2023, auditors discovered that no investment portfolio documents existed to detail the nature, duration, or value of LEC’s multimillion-dollar stake in TRANSCO CLSG.
Despite significant contributions made by the Government of Liberia through LEC — including an additional investment of US$975,000 in FY 2018/2019, bringing the total to US$2 million in subsequent years — auditors found no record of returns on the investment.
The GAC further noted that confirmation letters sent to TRANSCO CLSG during the audit period were not returned, depriving the audit team of essential evidence to verify the investments’ existence and value.
Missing Documents, Undisclosed Purpose
In its report, the GAC said there was “no evidence of the investment portfolio documents comprehensively cataloguing the nature of the investment, the period of the investment, the initial and subsequent investment requirements, the nature of and returns on investment.”
Additionally, the auditors highlighted that LEC management failed to explain or disclose the purpose of the additional US$975,000 investment made by the government during the 2018/2019 fiscal year.
This omission, according to the GAC, represents a serious breach of International Financial Reporting Standards (IFRS 9), which requires investments in equity instruments to be recognized and disclosed at fair value, along with gains or losses recorded in other comprehensive income.
Risk to Transparency and Public Funds
The GAC warned that without portfolio documentation, the completeness and valuation of the investment could not be assured, increasing the risk of misappropriation and misstated financial statements.
“Non-disclosure of information relative to the nature and purpose of the investment may impair fair presentation and full disclosure of the financial statements,” the report cautioned.
The auditors also raised concerns that the lack of return on investment and weak oversight mechanisms could lead to the non-receipt of expected benefits from the government’s contributions to the CLSG regional energy project.
GAC Calls for Action
The GAC has recommended that LEC management submit a complete copy of the TRANSCO CLSG investment portfolio document to the Auditor General’s Office, adjust and disclose, in the financial statements, full details on the investment’s nature, duration, and returns, conduct periodic reviews of investment portfolios to ensure compliance with terms and timely receipt of returns.
Management’s Response and GAC Rebuttal
In its defense, LEC management acknowledged the recommendations and claimed to have provided documentation classifying the GoL’s contribution to TRANSCO CLSG as an “Available-for-Sale Investment,” citing disclosures on page 48 of the 2020 TRANSCO CLSG Financial Statements.
However, the GAC rejected the explanation, insisting that management’s assertions “did not adequately address the issues raised.”
The Auditor General maintained that the financial statements were not adjusted to include key investment details and that the requested portfolio document was still missing, leaving the auditors unable to validate the completeness and accuracy of LEC’s reported investments.
“We maintain our findings and recommendations,” the report concluded, adding that the Commission will follow up during subsequent audits.
A Sector in Crisis
The audit’s findings underscore a deeper crisis of governance within Liberia’s energy sector — one that threatens not only financial accountability but also the reliability of power supply nationwide.
With unpaid electricity debts to Côte d’Ivoire mounting, recurring system failures, and opaque contracts with private operators, Liberia’s electricity future appears both costly and uncertain.
The GAC’s report, spanning nearly six years of audits, makes one conclusion unmistakable: the LEC has been running on autopilot — without governance, without accountability, and without a clear plan to power the nation forward.
