Weak Cash Management & Ad-hoc Payment Heighten Corruption- IMF

The Technical Assistance Report by the International Monetary Fund on Sierra Leone focusing on governance and corruption diagnostic reveals that weak cash management and ad-hoc payment decisions heighten corruption risks in arrears clearance.
The report maintained that despite the fact that the Ministry of Finance (MoF) has adopted a strategy for the clearance of arrears, there is still a challenge to address same.
“While the Ministry of Finance adopted the Arrears Clearance Strategy and improved cash management practices, revenue collections remain insufficient for covering all necessary payments,” the IMF stated.
The report noted that there is no clear prioritization of payments as many payments are “adhoc,” with decisions apparently made daily by MoF Leadership.
The IMF pointed out that the ad-hoc payment creates room for corruption in determining which suppliers and creditors get paid first.
“The mission noted corruption risks concerning the possible misallocation and diversion of funds: payments meant for clearing arrears may be redirected subject to politically motivated pressures; over-invoicing and embedded penalties inflate the amounts owed, allowing room for discretion, and creating corruption risk,” the report emphasized.