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Public boards lose GH¢850 million to procurement irregularities - Report

Fotojet  2.png Analysis of procurement processes from 2011 to 2021 has shown that public boards have lost GH¢850M

Tue, 17 May 2022 Source: thebftonline.com

A decade’s analysis of procurement processes from 2011 to 2021 has shown that public boards have lost some GH¢850million to procurement irregularities, a joint report by IMANI and the African Centre for Energy Policy (ACEP) has revealed.

The amount, the think-tanks said, is different from the value of financial irregularities recorded by state corporations and other statutory institutions – as well as stores of the various Ministries, Departments, and Agencies (MDAs) within the same period.

The report, on the theme "Is Ghana’s Public Procurement System Hurting or Saving," attributed the loss to the absence of standards and professionalism in procurement; lack of PPA laws enforcement; weak safeguard mechanisms; weak internal audit systems; and weak regulatory oversight, leading to increased procurement irregularities.

Other reasons for the high amount of irregularities, the report stated, include flagrant abuse of the PPA Act by public institutions and weak and ineffective contract management.

Reference was made to the construction of the BOST Head Office, Ghana Maritime Authority’s installation of a vessel information traffic management system, and the Ghana Ports and Harbour Authority’s award of contract to non-tenderers as some incidents that were fraught with anomalies.

The analysis also disclosed that the Ministry of Foreign Affairs and Regional Integration recently made huge payments for no work done toward the construction of the Riyadh Missions in Saudi Arabia.

“The use of wrong methods by the Ghana Maritime Authority from 2015-2018 through a requested quotation instead of national competitive tender led to a loss of GH¢1.3million, and GPHA’s use of single sourcing without the approval of the PPA Board from 2017-2019 led to GH¢6.3million in losses,” the document indicated.

Indeed, in 2017 the AG’s report cited the purchase of over 10 million value books costing about GH¢17.8million which remained unused.

Similarly, over 14 million booklets procured for some ministries at a cost of GH¢21.5million were not in use by the agencies resulting in a procurement loss of GH¢39.4million in value on books wasted.

Despite the clear financial loss, the report stated that no sanctions were imposed on the various institutions involved.

Both IMANI and ACEP concluded that the current public procurement system is a major revenue leakage point for the government, adding: “Weak oversight of the PPA and lack of political will to fully enforce the sanctions regime in the Public Procurement Authority Act 2016 (Act 914) are the major drivers of increased procurement irregularities among public institutions.

“With the executive’s huge influence over the procurement system, political patronage networks, clientelism, and interference will be inevitable,” the think tanks added.

The two entities however recommended that the Ministry of Finance must integrate the Ghana Electronic Procurement System (GHANEPS) with GIFMIS, and ensure that Internal Auditors have full access to the GIFMIS.

It suggested that the PPA must collaborate with the Office of the Chief Justice to establish a Financial Administration Court with the Due Diligence Unit at the PPA resourced to consider critical issues such as beneficial ownership when evaluating procurement applications.

Source: thebftonline.com
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