Today, Friday, the Lebanese Ministry of Energy raised fuel prices by about 40 percent, in a move that came after warnings issued by the Minister of Energy that state subsidies for fuel were unsustainable.
Lebanon is suffering from a severe fuel crisis that threatens to cut off electricity to essential services such as hospitals.
Today, Friday, Lebanon signed a new agreement with Alvarez & Marcel, a restructuring consultancy, to carry out a criminal audit of the accounts of the Central Bank of Lebanon.
A statement by the Lebanese Ministry of Finance said that Alvarez & Marcel will submit an initial report to it within 12 weeks from the date of initiating criminal audits, which is a basic requirement for Lebanon to secure foreign aid.
International donors and the International Monetary Fund require this audit. In July of last year, the Lebanese government agreed to open a criminal audit, in an attempt to find out the causes of the financial collapse in Lebanon and to reveal those responsible.
The audit ran into difficulties in November when Alvarez & Marsal pulled out, saying it had not obtained the information it needed from the central bank.
But parliament in December agreed to declassify bank documents for one year, after much debate among Lebanese officials about the possibility of declassifying certain information. In April, the Finance Ministry said the central bank had agreed to hand over some documents.
Youssef Khalil was appointed Minister of Finance in a recently formed government, a year after a political crisis that exacerbated Lebanon’s economic suffering.
The new Lebanese government says it is committed to resuming talks with the International Monetary Fund and preconditions for receiving aid, which include restructuring the banking sector and public debt.
Last year saw talks with the International Monetary Fund derailed after politicians and bankers challenged the amount of financial losses monitored by a financial recovery plan put forward by the government.
What is a forensic audit?
The criminal audit is much deeper than the financial audit, and it continues for months or years, and its aim is to discover illegal operations, fraud, forgery, embezzlement of public funds and illegal transfers outside the country if they occur.
In line with this investigation, a criminal judicial file is formed if suspicions are established. The financial forensic audit aims at a detailed scrutiny, that is, looking deeply into the numbers and processes and ensuring their legality and validity.
If there is anything related to corruption of all kinds, the auditor can investigate it, and not just make sure that the numbers match the assets and liabilities.
Many inside Lebanon are calling for this scrutiny to be conducted.
Lebanon is experiencing one of its worst economic crises in modern history. Three quarters of the Lebanese are classified as poor, according to the United Nations. Over the past two years, the Lebanese currency has lost 90% of its value.