The 2022 Auditor General Report has uncovered total irregularities of ¢15.059 billion among Public Boards, Corporations and other Statutory Institutions.
The discovery included $1.477 billion converted into Ghana cedis at the prevailing exchange rate of ¢8.5760 to US$1 as of December 31, 2022 and £61,748 converted into Ghana cedis at the prevailing exchange rate of ¢10.3118 to £1 as of December 31, 2022.
This is a decrease of 13.9% or ¢2.424 billion from the ¢17.483 billion recorded in 2021.
According to the report, most of the irregularity categories decreased in 2022 compared with the 2021 financial year even though 113 Institutions were audited and reported on in 2022 compared with the 101 Institutions audited and reported in 2021.
It is important to note that the 2022 total irregularities of GH¢15.059 billion was made up of a recoverable amount of ¢15,012 billion and an administrative infraction of ¢47.285, million.
The administrative irregularities were made up of procurement irregularities and other procedural infractions and lapses in public financial management. These administrative irregularities, the report said, do not connote loss of funds.
Outstanding Debts/ Loans Recoverable
The Outstanding Debts/Loans Recoverable stood at ¢14.964 billion.
These irregularities represent inter-governmental agencies debts, trade debtors, staff debtors, outstanding loans and cash locked up in nonperforming investments.
Included in this figure are $741.929 million, $515.202 million, $215.775 million and ¢1.402 billion due from customers of Ghana National Gas Limited Company, Bui Power Authority, Ghana National Petroleum Corporation and Northern Electricity Distribution Company (NEDCo) respectively.
The absence of effective debt collection policies, non-existence of credit controls to recover the debts and Managements’ indifferent posture towards loan recovery, the report, said, contributed significantly to these conditions.
The Auditor-General recommended that Management of Public Boards, Corporations, and other Statutory Institutions should strictly adhere to rules and regulations with regards to debts management.
“They should also put in place proper policies for the management of loans and other receivables as well as ensuring that loans and debts are repaid on due dates to avoid or minimise the occurrence of bad debts”, it added.
Cash irregularities
The cash irregularities amounted to ¢23.513 million.
Cash irregularities related to the misapplication of funds, payments not authenticated and payment of Board Allowances to Council Members without Ministerial approval.
Out of the total figure, ¢14.473 million represented unrecovered staff advances paid to employees of Ghana Water Company Limited.
These, the report said, occurred because of poor oversight responsibility and nonexistent controls. Other contributory factors were finance officers’ failure to properly file and keep records, Management’s failure to ensure the security and safety of vital documents, Management’s inertia in complying with procedures stipulated in the Public Financial Management Act, and poor accounting systems.
The Auditor-General therefore urged the Management teams of the Public Boards, Corporations, and other Statutory Institutions to strengthen supervisory controls over their finance officers and ensure that they adhere to the provisions of the Public Financial Management Act, 2016 (Act 921).
He also recommended the authentication of all payment vouchers, prompt payment to bank and full retirement of accountable imprest on due dates.
Payroll irregularities
The payroll irregularities were estimated ¢11.486 million.
These lapses were caused by the failure of Management to exercise due diligence, and the tolerance of officers in charge of payroll validation in reviewing payment vouchers to ensure salaries were paid to only those who were entitled as well as payroll related irregularities.
They were also caused by Management’s failure to notify banks to stop the payment of unearned salaries. The Controller and Accountant-General’s Department also did not promptly delete names of separated staff when notified to do so. In other instances, Management also did not transfer statutory deductions in respect of social security contributions.
The Auditor-General recommended to the Management teams of the affected Institutions to promptly notify the bankers of the separated staff to withhold and pay to the Auditor General’s Recoveries account all unearned salaries.
He also recommended that officers in charge of payroll should exercise due care in the discharge of their duties as well as ensuring that 1st and 2nd tier contributions for their employees are promptly and regularly transferred to the various pension schemes.
Procurement irregularities
The procurement irregularities were estimated at ¢42.710 million.
These irregularities occurred as a result of Managements’ noncompliance with the provisions of the Public Procurement Act, 2003 (Act 663) as amended. Out of the total irregularities, ¢37.681 million represented variation of contract without the approval of the Central Tender Review Committee in respect of the construction of Youth Resource Centres by the National Youth Authority.
The Auditor-General Report recommended that managements of the various Institutions should undertake procurement transactions strictly in accordance with the provisions of the Public Procurement Act, 2003 (Act 663) as amended.
Other irregularities included Tax Irregularities of ¢12.856 million and Contract Irregularities of ¢4,574 million.
The recoverable amount constitutes inter-governmental agencies debts, other overdue receivables, locked up investments, unpaid taxes, unretired imprest and advances and loans given to employees of various institutions.
The administrative irregularities comprise infractions that arose from procurement irregularities, overdue payables, and the payment of penalties due to delayed payments to suppliers.
