2016 MDAs audit: A-G uncovers GHC2m rot

The Auditor-General's (A-G) Department has uncovered financial irregularities totaling GHS2,053,622,215.68 after its audit of public accounts of the country’s Ministries, Departments and other Agencies (MDAs) for the year 2016.

This was contained in the A-G’s annual report for the year under review.

Below is the summary of the report and recommendations:

SUMMARY OF IRREGULARITIES

I have summarized the financial weaknesses and other irregularities under seven broad categories as follows:

* Tax Irregularities

* Cash Irregularities

* Outstanding debts/loans

* Payroll Irregularities

* Contract Irregularities

* Rent payment Irregularities and

* Stores/Procurement Irregularities.

Audit Results

2. The overall financial impact of weaknesses and irregularities identified in the course of my audit amounted to GHS2, 165,542,375.14.

Cash irregularities – GHS2, 053,622,215.68

3. Total cash irregularities noted during the period amounted to GHS 2,053,622,215.68 which was 95% of the total irregularities. These irregularities which cut across MDAs were attributable to the underlisted incidences among others:

- Unapproved/unjustified disbursement

- Dishonoured cheques

- Unaccounted revenue

- Unsupported payment vouchers

- Unauthorised transfers

- Funds to bank not credited

- Unpresented payment vouchers

- Payment of public funds into personal bank accounts

- Belated/non-lodgement of public funds

- Unaccounted funds

- Misapplication of funds

- Unauthorised use of IGF

4. Included in the total cash irregularity of GHS 2,053,622,215.68 was an amount of GHS 1,561,434,333.31 which was withdrawn from the petroleum revenue accounts without the knowledge of TOR management.

5. I recommended that heads of MDAs should continue to strengthen their controls over the collection and disbursement of cash and other funds and ensure strict adherence to the provisions of FAA, 2003 (Act 654) and FAR, 2004 (LI 1802), etc.

Tax irregularities – GHS 42,866,490.70

6. Included in this tax irregularity was 100 registered VAT traders who filed their returns at the MTO and STO but owed a total of GHS 11,934,957.00 as at December 2015.

7. The irregularities could be traced mainly to failure on the part of the Ghana Revenue Authority to collect tax revenue and also apply measures and sanctions stipulated in Sections 135(2) and 136 of the Internal Revenue Act, 2000 (Act 592) for tax administration.

8. I recommended that GRA management should strengthen monitoring and supervision of the work of subordinate staff and other schedule officers.

Management should also take steps to improve efficiency in tax administration and collection and follow up on overdue taxes while applying sanctions as prescribed by the tax laws.

Stores/Procurement irregularities – GHS 35,940,445.43

9. Stores and procurement irregularities noted during the period amounted to GHS 35,940,445.43. Included in this irregularity was an amount of GHS 23,450,000.49 involving procurement of 46,600 units of Street lighting Lamps from Vision and Sports Enterprise by the Ministry of Local Government, but was not paid for after delivery on 18 July 2016.

10. These irregularities were due mainly to failure on the part of MDAs to follow procurement procedures prescribed in the Public Procurement Act by failing to obtain required number of quotations, splitting of procurement contracts and exceeding authorized thresholds.

11. I recommended the strengthening of supervision and monitoring by heads of MDAs as well as ensuring strict compliance with the provisions of the Public Procurement Act 2003, (Act 663) and other regulations.

Payroll irregularities – GHS 4,381,994.51

12. Payroll irregularities amounting to GHS 4,381,994.51 was recorded during the period under review. This was due mainly to payments of unearned salaries to separated staff as a result of delays in deleting their names from the payroll as well as delay in transferring unclaimed pensions and salaries to Government chest by the banks.

13. I recommended for the intensification and coordination between Finance and Human Resource Units within MDAs in their responsibility for payroll management, prevention and recovery of unearned salaries paid to unauthorised personnel.

Outstanding loans/debts – GHS 6,775,974.47

14. A significant amount of this irregularity of GHS 6,775,974.47 was a support in the form of agricultural inputs such as certified seeds, fertilizers, herbicides and vehicles to motivate farmers expand their farms which the farmers had failed to pay.

15. I recommended that stringent measures should be taken to ensure total recovery of all outstanding loans/debts.

Contract irregularities – GHS 13,006,034.86

16. Contract irregularities noted during the period under review amounted to GHS 13,006,034.86 which included GHS 12,476,152.86 as contract sum for six projects awarded by Department of Urban Roads, Accra. It also covered abandoned projects, delay in the execution, shoddy constructional works and non-execution of works after payment of mobilisation.

Rent irregularities – GHS 9,049,219.49

17. Out of the total irregularity of GHS 9,049,219.49, I identified a total indebtedness of GHS 6,657,597.90 by institutions and 18 individuals in respect of ground and staff rent in the Sekondi Metropolis.