Can Caretaker Government Legalize Public Sector Audit?

The resigned government is now obliged to legalize the financial audit of state institutions, although some oppose allocating this jurisdiction to a resigned government because it can only convene over emergency and extraordinary situations, parliamentary sources said.

“The resigned government cannot sign a contract with a financial auditing company, because it would need a new spending contract to cover the cost of this auditing, and the government cannot secure it because it is acting in a limited caretaker capacity,” the sources added in remarks to Asharq al-Awsat newspaper.

Parliament had voted Friday in favor 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.

Economist and anti-government activist Jad Chaaban called parliament's decision "a tactic to win time."

"You didn't need the lifting of bank secrecy or anything to conduct the" audit, he said.

"The problem is again, how do you allow thieves to audit thieves?" he added, referring to authorities.

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.