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Sierra Leone News: RMFA sign Le50bn loan with HFC Mortgage

The Deputy Auditor General of the Audit Service Commission Sierra Leone, Wilson Bell, said their 2016 audit on the Road Maintenance Fund Administration (RMFA) has revealed that they signed an agreement with Commerce and Mortgage Bank Plc former HFC Mortgage and Finance Bank, for a revolving loan of Le50 billion. He said after the agreement RMFA secure a loan of Le33.9 billion from the revolving loan agreement, which is against the Road Maintenance Fund Administration Act of 2010. He said the Act did not make mandate for such loan without Parliamentary approval. He said after their audit they contacted management of RMFA on the said breach of the Act but outlined that the management in their reply to the auditor stated, “They are a body corporate hence can procure loans when once they have board approval and guarantee by Ministry of Finance and Economic Development.” Bell said RMFA made certain payments to contractors but after termination of such contracts contractors did not refund money. One such example was a Le1.4 billion payment to BEGEC/TP by RMFA for a contract that was terminated but the company did not refund the payment. The Deputy Auditor General said the RMFA management responded that the company had acquired some machinery and according to RMFA the machines belong to them. They are going to also allow the company to use the machines and proceeds thereafter will be recovered to refund the Le1.4 billion. The management of RMFA awarded another $34 million USD contract to the same company in a joint venture with another company. It was also made known at the COI that RMFA in the past 10 years were engaged in activities that were outside their scope and Act, including non-road related activities. According to Section 17(1) of the RMFA Act it states that, “The fund shall be used to defray the cost of maintenance of the core roads network.” But when contacted the management told the auditing team that they are mandated by Section 17(2) of the same Act to do everything they had been doing in the past ten years.


By Mohamed Kabba

Twitter: @chikakabba

Wednesday March 20, 2019.