Leakage of public purse: GH¢17.4 bn missing …A-G attributes losses to irregularities, non-compliance to laws

The Auditor-General (A-G) has detected financial irregularities amounting to GH¢17,483,483,539 by public boards, corporations and other statutory institutions for the 2021 financial year ending December 31. 

Attributing the irregularities to non-compliance to provisions of the Public Financial Management Act, Public Procurement Authority Act, and lack of due diligence by officers, the A-G said the irregularities cut across cash, payroll, procurement, tax, stores and contracts. 

The amount represents a 36 per cent (GH¢4,627,310,913) increase in the GH¢12,856,272,626 irregularities recorded in 2020.

“This [increase] was occasioned mainly by credit power sales of GH¢6,043,083,274 to Volta River Authority (VRA) and the Northern Electricity Distributing Company (NEDCo) customers.

“[The breakdown is] GH¢4,764,760,731 due from customers of VRA and GH¢1,278,322,542 due from customers from NEDCo for power supplies in respect of forex power sales, local power sales, mines power sales, government, Ministries, Departments and Agencies, power sales and Government of Ghana COVID-19 power relief,” the report signed by Johnson AkuamoahAsiedu, the A-G, explained. 

The report which has since been transmitted to Parliament pursuant to Article 187(5) of the 1992 Republican Constitution reported that outstanding debt, loans recoverable and credit power sales irregularities amounted to GH¢16,355,145,068 of the GH¢17.4 billion irregularities. 

The defaulters, the report said, included trade debtors, staff debtors and outstanding loans and cash locked up in non-performing investments. 

“The absence of effective debt collection policies, non-existence of credit controls to recover the debts and managements’ indifferent posture towards loan recovery contributed significantly to these conditions.  

“Also, improper maintenance of records on debtors, the absence of debtors’ ageing analysis, non-documentation of agreements stipulating the terms and conditions of loans, failure to ensure that loans are repaid and managements’ non-compliance with rules and regulation accounted for these irregularities,” the 764-page report observed. 

Cash irregularities in relation to misapplication of funds, budget overruns, payments not authenticated and payment to board members without ministerial approvals, the report said, amounted to GH¢505,800,397. 

Out of this amount, the report said GH¢230,700,424 represented “unbudgeted expenditure” by the Ghana Cocoa Board in the principal repayment on a ten-year loan with the Bank of Ghana which was not included in the approved budget for the 2019/2020 financial year.

“These occurred because of poor oversight responsibility and non-existent controls. Other contributory factors were finance officers’ failure to properly file and keep records, managements’ failure to ensure the security and safety of vital documents, non-maintenance of returned cheque registers, management’s inertia in complying with procedures stipulated in the Public Financial Management Act and poor accounting systems,” the report revealed. 

On payroll irregularities of GH¢8,243,954, the report said this occurred because of the failure of managements to exercise “due diligence” and tolerance of officers in charge of payroll validation to review payment vouchers to ensure that salaries were paid to only those who were entitled as well as payroll related irregularities. 

Procurement irregularities, the A-G said amounted to GH¢ 306,769,261, and tax irregularities GH¢23,572,832. 

Stores irregularities which summed up to GH¢173,954, the report said, was as a result of non-documentation of store items, lack of awareness of officers assigned to store duties and inadequate supervision.

 In the area of contract irregularities –GH¢283,778,072 – the report said it was as a result of payment of construction projects not undertaken by the various boards and corporations. 

In a raft of recommendations, the A-G urged the strict adherence to rules and regulations with regards to debt management, and strengthened supervision over finance officers at the various Ministries, Departments and Agencies across the country.  

BY JULIUS YAO PETETSI

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