EC blows millions without approvals, no supporting documents - A-G

The report of the Auditor-General on Special Audits carried out on selected state institutions in the year 2018 has uncovered several infractions at the Electoral Commission (EC) running into hundreds millions of cedis.

The infractions, which mainly took place between 2014 and 2016, involves expenses related to the 2016 general elections.

The Auditor-General has directed the commission to recover the monies or it will disallow the expenditure, and the authorising and approving officers shall be surcharged.

GH¢371m transferred without authorisation of the chairperson

A total of GH¢371 million (GH¢371,099,137) was transferred from the commission’s Ghana Integrated Financial Management Information System (GIFMIS) Sub-Consolidated Accounts into the commission’s operations accounts for electoral activities without the authorisation of the chairperson.

GH¢100m budget overrun capital expenditure

A review of the commission’s budget for 2016 indicates that Parliament approved a total amount of GH¢10.8 million (GH¢10,849,097) for capital expenditure.

The commission, however, expended a total amount of GH¢110.9 million (GH¢110,947,849.29) on Non-Current Assets (CAPEX), resulting in budget overrun totalling GH¢100 million (GH¢100,098,752.29), representing 923% more than the approved budget.

$6.8m unjustified excess expenditure on 100 district offices

The EC constructed 100 district offices, as well as engaged consultants at a cost of $7,500,000 and $750,000.

The Commission requested to use restricted tendering, and it was approved by the Public Procurement Authority (PPA) at a cost $8,250,000.

However, the commission awarded the contract for $15.1 million ($15,127,362.53).

This resulted in an unjustified excess expenditure of $6.8 million ($6,877,362.53).

GH¢4.1m spent on new head office that has not been occupied

The commission paid a total amount of GH¢4.1 million (GH¢4,185,688.08), including the cost of consultancy for partitioning and fitting-out the new head office, as against the budgeted amount of GH¢700,000.

The Auditor General charged management to provide correspondence on the approval of the excess funds from the Minister of Finance or face sanctions.

GH¢10.4bn tax was not paid to GRA

Contrary to the income tax laws, the commission did not withhold tax at the rate of 20% on allowances paid for electoral activities, resulting in a tax liability of GH¢10.4 billion (GH¢10,424,460).

Management explained that the practice has been that allowances to polling and field operation officials are not subjected to tax.

But the Auditor-General charged management to seek retrospective waiver from Parliament, failing which the commission should pay the amount of GH¢10.4 billion to the Commissioner-General of the Ghana Revenue Authority by December 31, 2018, and could subsequently recover the amount from the payees as prescribed by law.

The Auditor-General warned that it would institute surcharge proceedings against the management team if their recommendations are not heeded to.

Contract awarded in foreign currency

Contrary to government directives, the commission awarded various contracts, totalling $60.3 million ($60,304,736.53), in foreign currency during the period under review without clearance from the Ministry of Finance.

GH¢248,101.67 VAT/NHIL paid without invoices

Four suppliers added a total of GH¢248,101.67 as Value Added Tax (VAT) and National Health Insurance Levy (NHIL) to the cost of goods and services supplied to the commission but failed to issue VAT invoices to account for the VAT/NHIL charged.

The Auditor-General ordered the commission to obtain the VAT invoices covering the total amount of GH¢248,101.67 from the suppliers within 30 days from the receipt of the management letter, failing which the VAT portion of the payment shall be disallowed, and the authorising and approving officers shall be surcharged with the amount involved.

Twenty vendors the commission dealt with supplied goods and services totalling $36.8 million ($36,857,701.50) and GH?89 million (GH?89,085,085.35) without the statutory charges such as import duties and VAT/NHIL.

The inability of the commission to inform GRA of their challenges in obtaining parliamentary approval resulted in the loss of VAT/NHIL revenue totalling $6.4 million ($6,450,097.76) and GH¢15.5 million (GH¢15,589,889.94) and uncalculated import duty to the state.

The Auditor-General directed the commission to seek retrospective approval from Parliament as early as possible or recover the amount from the suppliers, failing which the approving and authorising officers shall be surcharged with the amount.

The Auditor-General reviewed 40 contracts awarded by the commission, and noted that 30 of them exceeded the Entity Tender Committee’s threshold as spelt out in the second schedule of the Public Procurement (Amendment) Act, 2016. However, there were no correspondence or approval from the Central Tender Review Committee (CTRC) to indicate that these contracts were reviewed or approved by them.

390 vehicles not insured

A total of 390 vehicles belonging to the commission and located in all the 10 regions have not been insured, and the Auditor-General ordered the commission to insure the vehicles within 30 days after the receipt of the management letter and inform the Auditor General’s Department for verification, failing which Section 3 (2) of the Motor Vehicle (Third Party Insurance Act) Act 1958 shall be enforced.

The commission did not maintain an Asset Register and Inventory Register to allow for monitoring, control and custody of the assets.

82 unserviceable vehicles not disposed

There was no Board of Survey to dispose of 82 vehicles that have become unserviceable and parked in the regional offices, thus exposing them to the vagaries of the weather, and thereby facilitating their deterioration.