Alvarez & Marsal (A&M), the firm hired by the Lebanese government to conduct a forensic audit of the Banque du Liban (BDL), recently asked the central bank a series of questions, many of which went unanswered or half-answered.
This came with the BDL’s refusal to hand over certain documents necessary for the audit, which it says is in accordance with the law.
This has forced the audit to come to a halt because the company received no more than 43% of the information it needs to proceed.
The Questions
The full list containing Alvarez & Marsal’s questions has been obtained by Forbes Middle East, along with the answers/documents that the central bank provided, and the ones it did not provide.
Here is a list of the most notable of the unanswered and partially-answered questions and requests, as presented by A&M to the central bank.
Unanswered Requests/Questions:
- All written finance policies, procedures, processes, manuals, guidelines, etc. in place at any time from 2015 to date.
- Overview document and description of finance procedures for approving and processing payments.
- Full and complete extract in text format of all BDL general ledger accounts for the period 1 January 2015 to 30 June 2020.
- Copies of all Management Accounts and internal financial reporting for the period 2015 to 2019 and to 30 June 2020.
- List of past and current BDL employees with title and function from 1 January 2015 to date.
- Listing of all the financial institutions that the BDL has received deposits from and holds balances with, with outstanding balances.
- Breakdown of the movement in commercial bank deposits over time at a customer and group level, from 1 January 2015 to 30 June 2020.
- Detailed listing and composition of the BDL’s foreign currency reserves and liabilities and all movement from 1 January 2015 to 30 June 2020.
- List of all customers between 1 January 2015 and 30 June 2020.
- A listing of all the financial engineering transactions conducted from 1 January 2015, with an explanation of the rationale for the transactions and supporting documentation prepared as part of the approval process.
- Detailed calculations and supporting documentation in relation to Post Balance Sheet adjusting events, Cash, Receivables, Payables, Impairments, and Third-Party Balances, for the year-end audits from 2015 to 2019.
- All directors reports or other opinions concerning corporate governance from auditors or otherwise from 1 January 2015 to date.
- A&M to be provided with Reader Access to the BDL accounting systems, with the necessary permissions/authority levels to run ad hoc queries and download the results/reports, during A&M onsite work.
- BDL staff that have unrestricted and immediate access to hard copy or electronic accounting records and related support for all transactions and accounting entries from 1 January 2015 to 30 June 2020, as may be requested by A&M during onsite work.
- Copies of all Governance Committee Charters in effect between 1 January 2015 to date.
- List of all BDL policies relating to fraud, risk, and compliance, including all revisions, from 2015 to date.
- Complete mapping of fraud-related controls and related process documentation.
- Compendium of all Policies and Procedures in place from 2015 onwards with dates of creation, revision, and implementation.
- Fraud/transaction monitoring alerts metrics and results from 2015 to date.
- List of all complaints and whistleblower reports received by the BDL, and of fraud-related cases opened by it, from 1 January 2015 to date.
- Details of all current or completed fraud/complaint investigations for the period 1 January 2015 to date.
- Copies of current bank risk assessment(s).
- English language copy of the BDL’s Corporate Governance Manual.
- English language copy of the BDL’s Code of Conduct.
- Schedules of dates and attendees of the BDL’s Anti-Fraud training conducted 1 January 2015 to date, and copies of related materials.
- The BDL’s E-list.
- Breakdown of customers/transaction volume/revenue details by-product from 1 January 2015 to 30 January 2020.
- Provide the ability to connect A&M laptops to BDL’s systems or alternatively provide work stations (or laptops) for A&M employees to work on for the duration of the engagement.
Partially-Answered Requests/Questions
- Detailed breakdown of each asset class of the BDL and their movement from 1 January to date.
- Detailed breakdown of each category of liability of the BDL.
- Minutes of meetings and Board papers from 1 January 2015 to date.
- Copies of all Employee Handbook/Code of Conduct/Staff Accountability or similar policies in place from 1 January 2015 to date.
- Provide key contact person (mobile number and email address) for each of the following: Lead project coordinator from the BDL side, IT systems support, security detail, information request management, and scheduling meetings.
For the majority of the unanswered requests, the central bank said that the requested information is confidential and cited the Code of Money and Credit.
It’s important to note that much of the missing information is vital for the audit and A&M cannot conduct its work in its absence.
