1. This supplement provides an update on the authorities’ prior actions. The prior action to compile and develop a database of domestically-financed projects from the Ministry of Finance and Development Planning was observed. However, the prior action relating to the interim report of the forensic audit of First International Bank of Liberia Limited (FIBLL) was not observed. The CBL submitted an interim report, prepared by an internationally reputable audit firm, which outlines a work plan and a schedule for key deliverables, and describes the challenges in terms of availability of documentation. However, in staff’s views, the interim report does not detail preliminary findings of the forensic audit in line with paragraph 47 of the MEFP. This is in part because, with a delayed start to the process, there was insufficient time to reach substantive findings.
2. Despite the prior action not being met, staff supports the completion of the 5th and 6th reviews of the Extended Credit Facility. In this regard, staff notes that the audit firm initially encountered unforeseen obstacles in obtaining documentation and access to previous Board members and staff. Nevertheless, the forensic audit process is now well underway and staff will closely monitor the progress of the audit, which is supported by a detailed work plan with bi-weekly and monthly milestones including the submission of a second interim report detailing preliminary findings to the CBL by end-January 2017. Staff notes that the authorities are committed to full cooperation with the auditor to ensure on-time implementation of the audit plan. Against this background, the absence of substantive preliminary findings does not undermine the program objectives. The completion of the forensic audit and the sharing of final results with staff by end-May 2017, which is a structural benchmark for the next review, remain feasible.