The tender led to the assignment of Alvarez & Marsal to conduct the audit. This period was determined as the period that witnessed financial interventions carried out by the Central Bank for the benefit of entities in the public and private sectors.
The Central Bank statement said that the scope of the audit included the support program approved by successive governments at the time, which included transfers and payments amounting to several billion US dollars, funds placed by the Bank of Lebanon at the disposal of public institutions and government bodies, in addition to the transfers made by the Bank of Lebanon to commercial banks via international transfers to their accounts abroad.
The audit aims to verify whether all payments and transfers, especially those related to support programmes, were made pursuant to legal authorizations and authorizations and in accordance with approved principles, and that the funds reached the authorized and clearly identified beneficiaries, and that they were used for the purpose specified for them, and without any violation, misuse or exploitation of public funds.
The decision to entrust Alvarez and Marshall to audit the Central Bank’s assets is gaining prominent importance in the reform path required internationally, especially by the International Monetary Fund. It also gains great significance because it reflects a serious commitment not only from the Central Bank, whose governor had announced this approach since assuming his duties, but also from the Ministries of Finance and Justice, which were involved in this path through coordination and cooperation to facilitate the conduct of the outsourcing tender on its way to implementation.
In the practical explanation for this step, the path of the investigation, which has been awaited for years into the fate of the money spent on support programs for fuel, food, consumer goods, and medicines during the financial collapse stage, from the Central Bank’s reserves, has taken its course to reveal the parties that benefited from the support decision, which practically led to the waste of more than 20 billion dollars of depositors’ money.
The audit company’s report, upon completion, will provide the government with the legal document that can be relied upon to prosecute perpetrators within the framework of achieving accountability and providing transparency in identifying sources of wasted funds, which will gain the state’s credibility in establishing its ability to implement its external obligations.
It should be noted that this award is not the first for the company. Rather, it had obtained a similar contract from the Ministry of Finance, signed in September 2021 by the then Minister of Finance, Youssef Al-Khalil, to audit the Central Bank’s accounts and determine the size of the financial gap and those responsible for it. The completion of the report was delayed for the duration of the contract, so it was delivered to Al-Khalil, who refrained from publishing it and submitting it to the Council of Ministers until August 2023. The information available today reveals that the deadline specified in the contract for the company to complete its work reaches the end of the current year.
It is stated that the contract goes beyond investigating the support program to include all transfers that occurred from the Central Bank to the state and for its benefit, and includes the army, the Electricité du Liban, the Ministry of Foreign Affairs and other departments or agencies that witnessed unjustified spending. It also includes transfers made by banks abroad.
The information reveals that the support programs wasted about $9 billion spent by the government, and the Central Bank asks the company to audit and investigate the purpose of using these funds, in a way that provides the Ministry of Justice and Judiciary with documents that allow it to move and prosecute the perpetrators. The importance of the audit lies in that it will allow the Central Bank to recover the funds owed by the state, after its true size is revealed through a process characterized by transparency and following international standards.
The information reveals that the new report expected from the “AlvarezMarshal” company differs from the previous report in terms of the objectives that have become more specific and focused, and extends to the period between 2019 and 2023, while the first report assumed the task of forensic auditing of the Central Bank’s accounts for the period between 2015 and 2020.
