GH¢2.25 bn from COCOBOD's GH¢12.3 bn debt should be recovered from government - Auditor-General

Joseph Boahene Aidoo Joseph Boahen Aidoo

Thu, 1 Sep 2022 Source: www.ghanaweb.com

GH¢12.301 billion has been recorded as the total debt of the Ghana Cocoa Board - COCOBOD - the Auditor-General's report for 2021 has stated.

According to the report, COCOBOD officials were charged to cut back on its increasing finance cost following the swelling indebtedness seen in the past years.

The report which has been addressed to Alban Bagbin, the Speaker of Parliament stated that, “we urged management to deploy and implement effective plans and strategies that would lead to the reduction of the Board’s [COCOBOD] indebtedness within the medium to long term.”

In identifying the absence of sustainable debt plans coupled with the lack of effective long-term cost control measures resulting in this state of affairs, the Auditor-General said, "the Board did not provide us with any effective plans to reduce its debt burden into the future,” warning that the situation could lead to crippling of the cocoa industry.

"We noted during our review of the 2019/2020 approved budget statement that COCOBOD expended an amount of ¢230.70 million on the principal repayment amount of a 10-year loan with Bank of Ghana (BoG) which was not included in the approved budget for 2019/2020 financial year. We advised Management to ensure that all the Board’s activities are adequately provided for in its estimates and ensure that it operates within its approved budget”.

The 2021 Auditor-General’s report further charged COCOBOD to engage the Ministry of Finance to recover GH¢2.25 billion that the government owed the cocoa regulator as of September 30, 2020.

The report explained that this was because of the supply of cocoa beans to Genertec International Corporation (GIC), government’s revenue support on the producer price of cocoa and excess export duties paid by the COCOBOD for GIC on cocoa beans exported.

The report also said its review of the recovery of seed funds from Licence Buying Companies (LBCs) revealed that management could not recover seed funds and accrued interest totalling GH¢47.024 million from LBCs for more than four cocoa seasons contrary to the provisions in the law.

“We urged management to recover the amount from the banks that guaranteed these facilities for the companies failing which the Board should pray the court to lift the veils of incorporation of these defaulting companies to demand the total indebtedness from the Directors and personalities behind these companies,” the report stressed.

Cocoa Marketing Company

The Auditor-General's report identified that the company’s receivable ageing report revealed that a total of $179.572 million debt was overdue as of 30th September 2020.

“To effectively manage the recovery of the debts, we recommended to Management to institute innovative measures to collect the debt,” the report stated.

Quality Control Company Limited

The Quality Control Company Limited - QCC - was identified by the A-G's report to have invested an amount of GH¢500,000 in a vehicle loan investment account at the UMB Investment Holdings Limited (UMB IHL) contrary to the investment policy of the Ghana Cocoa Board.

The Auditors recommended that the Management of COCOBOD should avoid placing the Company funds in similar investment houses.

Cocoa Research Institute of Ghana

The Auditor-General's report noted the lack of effective control over the utilisation and accountability of monies lead to unretired imprest totalling GH¢878,586 by November 30, 2020.

The report, therefore, recommended that the amount be converted into advances against the officers and recovered from their salaries.

Find below the full report.


Source: www.ghanaweb.com
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