Lebanon’s central bank (BDL) has formally reappointed consulting firm Alvarez & Marsal to conduct a comprehensive forensic audit on the period from October 2019 through the end of 2023, in a move aimed at uncovering possible misuse, embezzlement, and waste involving more than $20 billion in depleted foreign reserves.
The announcement, made in coordination with the finance and justice ministries, reflects renewed commitments by BDL to disclose how public funds and central bank reserves were managed during Lebanon’s financial collapse.
A senior official described the decision as a significant step toward applying international accounting standards to investigate allegations of financial misconduct tied to the rapid depletion of central bank reserves following the onset of Lebanon’s economic crises nearly seven years ago.
According to BDL, the audit is part of a joint institutional effort to review a period marked by large-scale financial interventions carried out by the bank on behalf of both public and private sector entities.
The selection of Alvarez & Marsal is particularly significant because the firm previously conducted a forensic audit of the central bank’s accounts covering 2015 to 2020. Officials believe the new review could build on earlier findings submitted to the Finance Ministry and provide a clearer accounting of how funds were spent.
A senior official told Asharq Al-Awsat that the audit and its expected findings could reshape Lebanon’s financial recovery strategy by establishing a credible basis for restructuring financial data, supporting legal accountability efforts, recovering misappropriated funds, and advancing reforms long demanded by international donors and financial institutions, particularly the International Monetary Fund and the World Bank.
Scrutiny of Subsidy Programs
The audit will focus heavily on subsidy programs approved by successive Lebanese governments between 2019 and 2023, involving billions of dollars in transfers and payments, as well as funds provided by the central bank to public institutions and government agencies.
It will also examine international transfers made by BDL to commercial banks’ overseas accounts.
According to the central bank, the primary objective is to determine whether all transfers and payments - particularly those tied to subsidy programs - were legally authorized, reached their intended beneficiaries, and were used for their stated purposes without misuse or exploitation of public funds.
The central bank said the audit would assist the finance and justice ministries in identifying and prosecuting individuals or entities that may have improperly benefited from subsidy funds or diverted them from their intended purposes. Once completed, the report will be formally submitted to both ministries.
Preliminary estimates indicate the renewed audit will examine at least $11 billion spent on consumer subsidy programs during the period, much of it allocated to fuel subsidies. Large quantities of subsidized fuel were allegedly smuggled into Syria through illicit trade networks while Lebanese motorists queued at gas stations.
Consumer subsidy programs were also marred by major loopholes, including support for luxury goods that offered little benefit to ordinary citizens. At the same time, subsidized Lebanese products reportedly appeared at discounted prices in markets abroad, including Syria, Kuwait, Cyprus, and other Arab and European countries.
There were similar concerns son medicine and medical supply subsidies, amid allegations of hoarding and artificial shortages despite extensive public support. Lists of subsidy recipients and traders had previously been referred by the central bank to public prosecutors, but investigations have so far produced few meaningful results.
