The 2020 Auditor General’s Report has uncovered massive irregularities in the use of public funds by public boards, corporations and other statutory institutions over the last five years. According to the report, these irregularities committed by these state institutions between 2016 and 2020, have increased by GHȼ 12.13 billion.
These irregularities include outstanding debtors, cash irregularities, payroll irregularities, tax irregularities, procurement irregularities, stores irregularities and contract irregularities.
Specifically, the report reveals that from a figure of GHȼ 718.08 million in 2016, total irregularities increased to GHȼ 12.002 billion in 2017 but declined to GHȼ 3.007 billion in 2018.
However, the total irregularities increased to GHȼ 5.46 billion in 2019 before galloping to GH¢12.85 billion at End-December 2020.
According to the report, the rise in the figure was occasioned mainly by a surge of GH¢5.207 billion in outstanding debtors/loans/recoverable component of the total irregularities for the period ending 31st December 2020.
Outstanding Debts
Another important area covered by the current report is the outstanding debts which comprises trade debtors, staff debtors and outstanding loans. Included in the figure is an amount of GHȼ5.487 billion due from customers for power supplies in respect of Forex Power Sales, Local Power Sales, Mines Power Sales, Other Local Power Sales, Government Ministries, Departments and Agencies Power Sales, and other Power Related Recoverables as at 31 December 2019.
Meanwhile, the Auditor General’s Report attributed this to the absence of effective debt collection policies, non-existence of credit controls to recover the debts and management’s indifferent posture towards loan recovery contributed significantly to these anomalous conditions.
Also, the report cites improper maintenance of records on debtors, the absence of debtors’ ageing analyses, non-documentation of agreements stipulating the terms and conditions of loans, failure to ensure that loans are repaid and management’s non-compliance with rules and regulations accounted for these irregularities.
Cash Irregularities
Furthermore, the report uncovered GH¢1.80 billion of cash irregularities out of which GH¢442.73 million represented cash locked up in non-performing investment by SSNIT.
According to the report, these cash irregularities related to the misapplication of funds, payments not authenticated, and payment of board allowances to council members without ministerial approval.
The Auditor General’s department attributed these cash irregularities to 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, non-maintenance of returned cheque registers, among others.
Need to strengthen control mechanisms
Consequently, the report urges the Managements 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).
Also, it recommends the authentication of all payment vouchers, prompt payment to bank and full retirement of accountable imprest on due dates. It therefore, advises managements of the various Institutions to undertake procurement transactions strictly in accordance with the provisions of the Public Procurement Act as amended.
The report notes that the operational results and financial positions of the Public Corporations and other Statutory Institutions during the period under review, could have improved if there had been effective supervision of schedule officers.
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