Looting Galore: Auditor General weeps for Ghana

Millions of Ghana Cedis that should have been used by the Government of Ghana to finance infrastructure and other government projects have been embezzled in the public sector. Although several contractors engaged by the Government have not been paid since October 2012, because of lack of funds, the Auditor-General has catalogued massive amounts of state funds that have either been stolen, or made untraceable.

In his report on the Public Accounts of Ghana for 2011, the Auditor expresses grave frustration about the fact that those who embezzle state funds are left to go scot-free.

He states in paragraph 24 of his 2011 report: “The cataloguing of financial irregularities in my Report on MDAs and Other Agencies has become an annual ritual that seems to have no effect because affected MDAs are not seen to be taking any effective action to address the basic problems of lack of monitoring and supervision and non-adherence to legislation put in place to provide effective financial management of public resources”.

In 2011 alone, Ghana lost a whopping GH¢173,174,541 because of financial irregularities alone. These do not include losses arising out of inefficiencies, maladministration and sheer incompetence on the part of public officers. The Auditor-General laments about “poor cash management practices resulting in failure to pay revenue collected into the Consolidated Fund, tax irregularities and un-authorised payments, as well as non-availability of adequate records on revenue collected”.

The report also covers numerous instances of inadequate controls over the administration of procurement, payroll and contracts.

It was reported that in the Internal Revenue Services, various taxes due for payment to IRS/CEPS & VAT divisions under the Ghana Revenue Authority, which remained uncollected during the period being reported on stood at Ghc52,807,322.72 and GBP13,824.11 respectively. In addition, cash irregularities caused in some 15 Ministries resulted in the loss of Ghc33.9 million.

The Auditor-General was scathing about the failure (or reluctance?) of Chief Tax Directors to apply necessary sanctions against offending officers and clients/organizations that default in settlement of their tax obligations. For example, it was noted that VAT revenue totaling Ghc56,290.36 and $25,351.35, were not receipted and accounted for by Ms. Naa Shorme Ocquaye, an Assistant Revenue Officer of Adabraka LVO.

Again, the report revealed that at the Adabraka tax office (Accra) alone, although 242 traders owed a total of more than Ghc6.1 as at 30 December 2010, distress action had not been initiated to prosecute these traders for recovery of the unpaid taxes.

It is distressing to note that all that the management of the Adabraka office could say in response was that all their efforts to recover the debts had been to no avail. This is in spite of the fact that there is adequate legislation that empowers the IRS to apply the necessary sanctions to recover the taxes.

The incidence of cash irregularities was more pronounced in the following Ministries: Justice and Attorney General- (Ghc16,375,045.05); Health -(Ghc12,089,459.63); Education -(Ghc 2,621,482.63); MoFEP -(Ghc 2,004,238.00); Employment and Social Welfare (Ghc276,723.53); Youth and Sports -(Ghc237,864.70); Defence - (Ghc81,039.61); Other Agencies - (Ghc84,758.12)

Other losses include: Stores/Procurement irregularities — Ghc780,027.67; Outstanding loans — Ghc5,709,276.16; Payroll overpayments — Ghc1,021,062.77; Contract irregularities — Ghc24,946,637.32;

As part of his conclusion, the Auditor-General stated: “I am not satisfied with the performance of some Chief Executives and other responsible officials in the management of public resources and safeguarding of public property and I call for more effective action from the Ministry of Finance and Economic Planning, as the lead Agency of Government in the administration of the public purse, to ensure that MDAs comply with the Financial Administration Act, the Financial Administration Regulations, the Public Procurement Act as well as the Audit Service Act which calls for the establishment of Audit Report Implementation Committees”