SADA blows GHc5m on block machines

The Savannah Accelerated Development Authority (SADA) is in the news again following the expenditure of close to GHc5 million on block making machines.

The Hydraform Interlocking block making machines, numbering 50, which are said to have no commercial viability, are said to be locked up in a warehouse; and they cost the taxpayer GHc4,653,513.

This was contained in the 2014 Report of the Auditor-General on the accounts of the country’s public boards, corporations and other statutory institutions.

Interestingly, the contract, given to an entity called MZI Company Limited for the importation of the machines in October 2012, did not go through competitive tendering process.

According to the report, the SADA management also failed to produce the contract documents such as service agreement and bill of quantities for examination by auditors.

“We further observed that all the 50 machines were still locked up in a warehouse at SADA premises, two years after they were procured,” the report said, adding, “The continuous keeping of the machines in the warehouse defeats the purpose for which the taxpayers’ money was committed to the project.

“It said the management’s failure to think through the commercial viability of the project and its implementation before procuring the machines accounted for the anomaly,” the report underscored.

It further said the SADA management told auditors it had advertised and received bids for the sale of the equipment after management had earlier been entreated to develop strategies to put the machines to good use to avoid waste or be sanctioned for causing financial loss.

According to the Auditor-General, the SADA management made payments totalling GHc508,940.00 without the necessary expenditure documents including receipts and memos, among others, in contravention of the FAR 39 (2).

Giving the breakdown, the report said SADA management paid GH¢469,000.00 on December 3, 2014, being 70% of corn shellers to an unknown company, and GHc35,820.00 to MZI Co. for training materials for the use of the Hydraform on January 6 the same year as well as another GHc4,120.00 as payment for janitorial services to Top Zone Co Ltd on May 29, 2014.

“The Finance Director’s failure to ensure that supporting documents were obtained before making the payments accounted for the irregularity,” it noted, adding, “This practice could be an avenue for financial impropriety.”

The SADA management, the report said, also failed to recover GHc21,849,175.85 given to Technical Service Operators (TSP) as the cost of farming inputs for farmers’ groups.

It said only GHc995,924.00, representing 4.36% out of a total amount of GHc22,845,099.85, released to the company was recovered.

Furthermore, the report said two companies in Ejura and Kumasi delayed the payments of GHc816,000 to SADA and the continuous delay in the payments could constitute bad debt if the authority did not act fast.

According to the report, there was overpayment of mobilisation fees to 30 TSPs, totalling GHc284,433 from SADA, claiming, “Our audit discovered that management relied on the expected, instead of the actual hectares of land cultivated, to pay mobilisation for the 2013 farming season.”

It noted, “The situation is locking up the much-needed capital of the authority for other important projects.”

It also said that the TSPs again failed to pay 2013 and 2014 instalments of the sale of corn shellers, totalling GHc272,000.

The SADA management again embarked on procurements without VAT invoices from six suppliers, amounting to GHc57,060, and as a result, the government was denied tax revenue of GHc8,883.75.