Massive fraud at KMA

An audit report covering the period between July 2007 and December 2008, has made startling revelations about the financial mismanagement and lapses in procurement procedures at the Kumasi Metropolitan Assembly (KMA).

The 60-page report issued on March 30, 2009 under the band of Mr. E. Dakorah-Bendah, District Auditor for the KMA district, discovered internal control weaknesses and infringements on the rules and financial regulations regarding the expenditure of Special Funds including District Common Funds, Highly Indebted Poor Countries (HIPC) funds and the Members of Parliament (MPs) Common Fund.


A treasury bill valued at GH¢787.50 is missing and as the Metro Finance Officer could not produce the certificate of the treasury bill, neither could a document in respect of the treasury bill be produced on request by the team of auditors.


Certificates for KMA's shares of the Metro Company and the Kumasi Abattoir valued at GH¢ 1,220.61 and GH¢400.00 respectively cannot as well be traced contributing to the loss of revenue in terms of accrued revenue and dividends.


Following this both the former Metro Finance officer and Metro Co-ordinating Director, Merrs K. A Atuah and A.A. Ampon respectively have been ordered to assist the KMA trace those documents.


An amount of GH¢209,850.02 was also mentioned as having been spent on a decongestion exercise by the Assembly in March 2007.


Some private companies, according to the report, were illegally occupying KMA buildings and offices without paying any rent for the signing of a tenancy agreement.

These companies include Precast, Fox FM; Ink and Chalk Factory and Waste Management, Electric Block.


At the precast building for instance, the report indicated that five companies including Zoomlion Waste Group, SAK-M, Towing Services and Maerskworld occupied the defunct workshop without paying rent.


The report indicated that the Assembly also failed to sign agreements with the operators of the Central Business Traffic Management Project, which has been in operation for two years.


The audit report questioned the withdrawal of about 2.4 billion old cedis, the equivalent of GH¢239,284, said to have been paid by the KMA to contractors working on the redevelopment of the Abbey's Park, undertaken by the then MP for Manhyia, Dr. Kwame Addo Kufuor.


The report said there was no mechanism to verify double payments, since the project was being financed by different sources. "No documents on the project were maintained at the KMA," the report said.


The auditors also pointed to purchases involving GH¢ 154, 197.05, which were not routed through the stores.

These involved the purchase of flour, floor tiles, building materials and kitchen appliances, as well as biscuits and toffees, for which GH¢82,608.69 was to be recovered from the authorising officers.


The KMA also made payments to the tune of GH¢116,546.88, without supporting documents like receipts and statement of expenditure.


According to the report, in spite of the well equipped workshop of the Assembly, with qualified engineers, technicians, auto electricians, vulcanisers and mechanics, maintenance of official vehicles, as well as change of oil, were done at private garages, costing the Assembly GH¢81,483.71 over the period under review, while staff continue to draw salary for doing no work at the workshop.


It was further disclosed that the Assembly awarded vehicle and security system for all taxis in Kumasi, costing GH¢272,710, to Messrs Floorzone Construction Services, without competitive bidding, contrary to Part IV, section 35 (1) of Public Procurement Act of 2003, which states that "a procurement entity shall procure goods, services or works by competitive tendering, except as provided in this part."


Even though documentation and stationary were borne by the assembly, only GH¢3.00 out of the GH¢30.00 paid by each taxi, went to KMA, with the difference of GH¢27.00 going to Messrs Floorzone Construction.