Far away in the Dam city of Akosombo, a very damming audit report of Akosombo Hotel, which established acts of corruption, fraud and financial irregularities against some public officers kept the Bureau for National Investigation (BNI) working for several months.
Before the BNI could up thier investigations, the General Manager (GM) of Akosombo Hotel, Mr. Edem Kpodo, unwillingly sacrificed his job to compensate for his dismissal, whilst officers from the office of the former president and other government agencies caught in the net quickly run to the government to refund monies they illegally squandered.
As at Press time, government sources told the Chronicle, that various sums of local and foreign currencies have been recovered.
The highlights of the fndings of the internal audit report include cases of double payments for goods supplied to the hotel, window dressing of accounts, irregular accounting treatment of deposit refunds, tax evasion etc.
The all-indicting 24-page report began with the treatment of cash deposit refunds by the General and Finance Managers.
The refunds are in respect of monies paid in advance by government agencies to the hotel's management for seminars/conferences which did not take place.
"We observed an irregular accounting treatment of cash deposit refunds in respect of conferences and seminars. Ministries, Departments and Government Agencies (MDA's) mostly paid these deposits, yet open or personal cheques were cashed over the bank counter on account of these refunds"
What it means is that monies which were paid by these ministries, and government agencies, including the Castle, Osu, in respect of conferences which did not take place were not credited to the accounts of the respective agencies.
Rather, the management of the hotel colluded with officials from those departments and issued personal cheques to enable them to cash the money over the counter.
Hardcopy evidence indicate that between January 1999-December 2000 alone, a total refund of ?175,404,560 and US$2,931 and ?336,500 was made through separate cheques.
On paper, the beneficiaries were mainly government institutions and agencies, but it turned out later that 18 personal cheques were issued to various individuals amounting to ?175,404,560.
One personal cheque valued at USD $2,931 was also issued in the name of a beneficiary while another personal check was issued at a value of ?336,500 contrary to existing banking regulations.
Meanwhile, documentation by the Hotel regarding cheques drawn created a misleading impression that these cheques were properly drawn as institutional or crossed cheques.
It was stated in the payment vouchers, cheque stubs and cashbooks that the money had been paid to the beneficiary institutions.
The Hotel's monthly Bank Statements also confirmed that individuals cashed the cheques over the counter at the Ghana Commercial Bank, Akosombo and ECOBANK, Accra.
Investigations revealed that the designated schedule officer in charge of the cash refunds was flicked aside by the General and Finance managers, who exclusively handled the deal and made themselves sole signatories to the cash deposit account.
The General Manager admitted that they erred in handling the refunds but emphasized that the "hotel management did not obtain any personal gains from those transactions."
When questioned about the motive for issuing personal cheques, the G-M explained that they decided to be "discreet because of the personalities involved."
He further indicated that he decided to handle the transaction exclusively with the Finance Manager in order to protect classified information about such personalities from getting to the subordinate staff.
But the Finance Manager distanced himself from the deal when reached and explained that the practice was in existence before he assumed office in November 1999.
He noted that at one time he objected to the General Manager's directive that he should prepare such a cheque, but his boss told him that he (GM) would take personal responsibility for the outcome of any such refunds.
The Financial Manager continued that after further protests, he was made to believe that that instructions were coming from the Office of the former President J. J. Rawlings, adding that he (Financial Manager) had no alternative but to resign from the employment of the Hotel. Indeed he resigned.
Evidence was also provided that a company called FURNAT GH. Ltd was paid twice for supplying 12 folding beds to the Hotel last year despite sufficient information that the invoice/demand notice had been honoured earlier on.
The management of the Hotel was exposed for the improper adjustment of staff debtor balance.
The report states that "The General manager's 1999 Staff debtor balance stood at ?15.5 million. This balance was window dressed by an adjustment debiting the Income Surplus Account and crediting the staff debtor account."
Other findings were that even though there was no evidence of payment of water bills by the Hotel to its parent company, the Volta River Authority (VRA), management of the hotel stated on paper that they were paying ?100,000 every month for water bills.
The amount of water bills was increased from ?100,00 to ?300,000 per month after February 2000.
Upon the persistent enquiries of a team of auditors, a bill amounting to ?1,222,734,032.41 was prepared and delivered to the Hotel management to cover the period of May 1997 to December 2000.
But the Finance Manager said the bill, which represented an average monthly consumption of ?36 million was unrealistic and flawed in computation.
He added that until the time of audit, the Akosombo Finance was not raising bills for payment.
The team of investigators recommended among other things that an urgent meeting be convened between Akosombo Town Management, Akosombo Finance and the Hotel management for a permanent resolution of the water consumption pattern and billing queries.
"While this is being resolved, the Hotel should immediately pay some reasonable amount on account to cover the cost of water consumed for the past three years, " it said.
The report also noted that the GM hijacked the functions of administration, public relations, purchasing and marketing and fused all into his office.
Another significant revelation was that the GM also hijacked the procurement needs of the Hotel assets, which ranged from housekeeping materials to food and beverages.
"Indeed he is the sole procurement officer of almost every single need of the hotel from the domestic and foreign sources the General Manager is the sole person who approves purchases and so it means that he approves his own purchases.
Thus, the purchasing process is initiated and completed by one person and this causes breakdown of the internal control system." the report revealed.
It was stated categorically that the procurement process as it stood was subject to abuse by the General Manager and that consequently, the Hotel's internal controls were jeopardized or weakened by the manner in which the GM handled things.
The report further noted that instances, where value for money are not made, no effective sanction will be applied since the G-M on whom the power to sanction rests was the same person who acted as the purchasing officer.
It is worthy to note that issues of control weakness were reported in all the audit reports on the operations of the Hotel and yet the practice, improper as it is, still persisted.
According to the report, almost all the contractors who undertook services for the Hotel evaded tax, as the 5% withholding tax was not exacted even though the amounts involved were above the statutory threshold of ?500,000.
Among the companies who were cited for tax evasion were Gardens and Construction company's monthly charge of ?2m for grounds and garden maintenance.
Lesanto Enterprise which charged about ?1 million for fumigation against snakes in the Hotel and D.N. Odonkor for receiving over ?2million in respect of upholstery sewing.
The report warned that "the anomaly is a breach of statutory provisions of SMCD 5, which renders the Hotel liable to prosecution if the Internal Revenue Service (IRS) stumbles upon these omissions which may be interpreted as a willful act"
The GM maintained that it was an oversight but the Finance Manager said it was due to protests by some contractors against the deductions.
It was recommended that taxes should be deducted at source from payments made to suppliers that fall within the statutory threshold of ?500,000.
Also, most journals passed on completed jobs or assets were not signed by the initiator.
The journals were also not authorized before they were inputted.
This is viewed against the background that the initiator is the same person who inputs the journal on the mechanized accounting software.
Several irregularities were also identified in the handling of Petty Cash.
It also became evident that Petty Cash Vouchers were not stamped "paid" to avoid recycling.
In addition, reimbursements were not checked/reviewed by a responsible official to serve as a check on the cashier.
Chronicle contacted Mr. Kpodo over the allegations a month ago but could not get any comments.
As at press time, Mr. Kpodo was reported ill.
The VRA, on their part confirmed the story as well as the resignation of Mr. Edem Kpodo.
