Kubis on Forensic Audit: Proof of the Pudding is in the Eating

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UN Special Coordinator for Lebanon Jan Kubis said Lebanon’s parliament vote in favor of a sweeping financial audit of the state institutions can only be judged when it is genuinely put into implementation.

“A strong political signal from the parliament, endorsing a broad forensic audit,” said Kubis, adding “the proof of the pudding is in the eating and it starts with the first bite.”

Media reports on Saturday voiced doubts about the actual intention of political leaders in Lebanon to implement the audit, which if conducted, would reveal the extent of their involvement in corruption.

Lebanon's parliament voted Friday in favour of a sweeping financial audit of state institutions, a week after a consultancy firm terminated its contract to audit the central bank over missing data.

The International Monetary Fund and France are among creditors demanding an audit of Lebanon's central bank as part of urgent reforms to unlock financial support, as the country faces a grinding economic crisis.

But the central bank has claimed that provisions including Lebanon's Banking Secrecy Law prevent it from releasing some of the necessary information, a charge the justice ministry and legal experts have disputed.

Parliament on Friday voted to rule out this justification, clearing the way for the forensic audit to take place, Speaker Nabih Berri said after the parliament session.

"The accounts of the central bank, government ministries... financial institutions, municipalities and all other (public) assets are equally subject to a forensic audit without hindrance or the excuse of bank secrecy (laws)," he was quoted as saying by state media.

Berri said the decision came in response to President Michel Aoun's calls for parliament to facilitate the audit process.

New York-based Alvarez and Marsal scrapped its agreement with the government last week, saying the central bank had failed to hand over the required information.

The move sparked widespread criticism of Lebanon's authorities.

The country, which defaulted on its debt this year, is experiencing its worst economic crisis in decades and is still reeling from a devastating explosion at the port that gutted entire neighbourhoods of Beirut on August 4.

Both are widely blamed on government corruption and incompetence.

Lebanon is in desperate need of donor funds and talks with the IMF have been on hold since July pending reforms.

The forensic audit of the Banque du Liban (BDL) is one of the main points of the government's economic rescue plan, approved at the end of April.

Several officials, including the finance minister, have said the government is expected to replace Alvarez and Marsal with another consultancy firm soon.

Comments 3
Missing samiam 1 month

He knows the Lebanese ruling class well: all talk, and NO action. Why didn't they do this when the auditing firm was here instead of making a big show about it after the fact?

Missing samiam 1 month

He knows the Lebanese ruling class well: all talk, and NO action. Why didn't they do this when the auditing firm was here instead of making a big show about it after the fact?

Default-user-icon just a friend (Guest) 1 month

ok, fine... but who will perform these round of audits..? and above all will they be free of charge? who is going to pay for it, Mr Speaker or the Lebanese people...? same story for A&M firm, the contract has been terminated, but they will send the invoice anyway...