Dr Valentin Kwasi Mensah, a renowned auditor and chartered accountant, has challenged Auditor General’s (AG) reports when he spoke on the theme: ‘The AG’s audit of state-owned enterprises (SOEs) and its compliance with the Public Financial Management rules: A critical evaluation’.
This was a session which formed part of the Institute of Chartered Accountants, Ghana’s, (ICAG) corporate governance faculty lecture.
Dr Mensah revealed that, expenditures and outstanding receivables owed to Ministries, Departments and Agencies (MDAs), as well as State-Owned Enterprises (SOEs) has been misinterpreted by the Auditor General’s (AG) reports as losses to the state.
Dr Mensah from his research and analysis of the reports explained that, more than ninety percent (90%) of the most noted financial irregularities captured in the AG’s reports were amounts owed to state institutions, other government agencies and customers of utility companies but ended up being misconstrued as financial losses.
Dr Mensah making reference to the 2021 annual auditor general’s report elaborated that, of the GH¢17.5 billion that was reported as financial irregularities, more than ninety-six per cent (96%) could be described as doubtful and questionable. That, he said, was on the basis that the amount quoted were not losses but payments yet to be received and expenditures.
“The public outcry that often greeted the release of the AG report and the revelations of irregularities were understandable, given that the country needed to police every penny mobilised for national development.”
Dr Valentin Kwasi Mensah
Communicate Right Information To The Public
Dr Mensah urged the Ghana’s Auditor General to convey correct reports to the public and educate the public on the fact that the majority of the recurring reported irregularities were neither losses nor the results of corruption and infractions by public officials.
“There were delayed payments and expenditures that were not captured appropriately. I charge the AG to endeavour to clarify the figures when reporting them to help manage public expectations and reduce the rising distrust of the public in the SOEs, MDAs and the state in general.”
Dr Valentin Kwasi Mensah
He advised the AG of Ghana to adopt a useful approach for reporting irregularities provided by the Auditor-General of South Africa.
“The South African AG’s approach distinguished between irregular expenditure (all non-compliance as currently reported by the AG) and material irregularity (non-compliance applicable to fraud, theft and to a breach of duty that the AG is required to surcharge and disallow.”
Dr Valentin Kwasi Mensah
Dr Valentin Mensah also advised the Institute of Chartered Accountant (ICAG) to rise up to play its vital role as the regulator of the accountancy and audit profession, to make the nation feel its impact as a strong professional establishment by coming out with pronouncements on such matters of national interest as to what the A-G can do and cannot do.
“The State Interest and Governance Authority (SIGA) and the Ministry of Finance will need to engage the Audit Service and the SOEs in order to streamline the appointment process of independent auditors for the SOEs.
“The participation of SIGA, ICAG and the Registrar of Companies is required here to ensure the interests of the SOEs are secured in the appointment of qualified auditors specified by the Companies Act 992.”
Dr. Valentin Kwasi Mensah
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