Prior to 1956, the General Auditing Office (GAO) was established by an Act of the National Legislature, as the Bureau of Audits, to pre audit requisitions, vouchers and payroll in connection with the disbursement of public moneys. This was amended under Chapter 32, section 740-744 of the Executive Law of Liberia in 1956 to audit all accounts of the Government of Liberia in the manner prescribed in the Revenue and Finance Law of Liberia.
In 1972, the Executive Law of Liberia was amended, with its Chapter 53, Sections 1-11, establishing the General Auditing Office (GAO). Under this law, the Auditor General was reporting directly to the President.
In June 2005, an Act was passed by the National Legislature of Liberia to amend Chapter 53.2 of the Executive Law of 1972 which granted the General Auditing Commission status of autonomous agency of Government amendable to the National Legislature of Liberia. The 2005 amendment makes Chapter 53 of the Executive Law comply with Article 89 of the 1986 Liberian Constitution, which named GAC as one of the three autonomous Commissions in Liberia. However, this amendment did not bring the GAC to full compliance with the 1977 LIMA and the 2007 Mexico reaffirmation.
In recognition of the limitation and the legal ambiguities of the June 2005 amendment, the development partners through the GEMAP and under the leadership of the European Union engaged a Legal expert to draft a new Law that will enable the GAC to fully comply with the 1977 LIMA standards and the 2007 Mexico reaffirmation.
Duties of the Auditor General The functions of the Auditor General are derived from Chapter 53, section 53.3 of the 1972 Executive Law of Liberia. The Act stipulates that, "The Auditor-General shall be the officer of the Government principally responsible for conducting comprehensive post audits, special financial investigations, reconciliation's and analyses, and continuous audits on a routine basis. He shall;
- "Once a year perform audits of all Government agencies and Government organizations and examine, to the extent he deems necessary, all transactions and accounts relating to the receipt, disbursement, and utilization of public monies;
- "Perform audits of all property accounts and transaction of all Government agencies and Government organization; such audits shall be conducted as far as practicable at the place or places where the property and records are located and shall include an evaluation of the effectiveness of internal control and other methods of safeguarding the assets of the Government;
- "Perform audits of withdrawals of money within the responsibility of the Government as started in the appropriation acts or financial obligations by the order of Ministry of Finance.
- "Inspect the books of account of banks and financial institutions to verify the amounts of Government monies, securities, and other assets hypothetical or on deposit, or otherwise require written bank confirmations of Government monies, securities, and other assets under control of such banks or financial institutions;
- "Inspect the books of account of privately owned commercial and manufacturing establishments for the purpose of verifying transactions with Government agencies and Government organizations, requiring outside written confirmations of accounts receivable and employing such other extended audit procedures as are necessary;
- "Prescribe auditing standards and develop and implement auditing procedures, methods, and techniques appropriate to government accounting practices; and (g) "Require any Government official or employee or other person to testify on oath as a witness in matters pertaining to financial transactions which involve the use or custody of Government monies or assets.
The GAC has a large audit scope. Section 53.1 of the Executive Law defined the audit mandate of the GAC, dividing the mandate into two distinct categories, as reflected below:
- "The term ''Government Agency", means every ministry, bureau, board, commission, institution, authority, organization, enterprise, officer, employee, or other instrumentality of the Government including commonwealths, cities and townships, local authorities, and political units of the Republic;
- The term, "Government Organization" means every enterprise, authority, monopoly, factory, or other industrial or commercial facility, corporation, utility, company, lending or financial institution, or other instrumentality which is wholly or partly owned by the Government. The estimated number of institutions and programs in the mandate is eighty-five (85) government departments, ministries, agencies and public corporations. Additionally, the mandate also requires GAC to audit local governments, other municipalities, embassies and diplomatic missions.