The Auditor-General is to recover more than GH¢ 2 billion lost to the state due to financial irregularities by public and statutory organisations which occurred in 2012 alone.
A perusal of the 2012 Auditor-General’s Report shows the loopholes that resulted in the losses to the state.
They resulted from irregularities in cash and payroll management, tax and procurement, stores and contract irregularities and outstanding debtors, loans and recoverable charges.
According to the report, the state lost more than GH¢116.3 million to cash irregularities arising out of the misapplication of funds, overestimation of funds needed, outstanding imprest, payments not authenticated and cash shortages.
Some of the losses have occurred as a result of poor supervision, lack of control, management’s failure to review approved budgets and failure to demand receipts for payments made.
The report also highlights the failure of some accountants to properly file and keep records, management’s failure to ensure the security and safety of vital documents and the laxity in ensuring that accountants adhere to what is stipulated in the Financial Administration Act and other relevant regulations.
Payroll irregularities also led to the financial loss of GH¢251.8 million to the state. The payroll lapses, according to the report, were caused by failure of management to exercise due diligence and failure of officers in charge of payroll to review payment vouchers to ensure that salaries were paid to only those who were entitled.
The report also accuses the management of some public organisations of failing to notify bankers to halt the payment of unearned salaries.
The loopholes were mostly in the areas of payment of unearned salaries to separated staff, non-payment to chest of the unearned salaries and payment to staff members who were not entitled to receive those salaries.
The loopholes also resulted in procurement irregularities of more than GH¢50.5 million in 2012. This, according to the report, occurred in the procurement of goods and services without recourse to the procurement committees, contrary to the provisions in the Public Procurement Act.
There were also misdeeds in the areas of tax irregularities resulting in losses of some GH¢1,072 million to the state.
The tax irregularities related to misapplication of tax revenue, failure to pay statutory deductions on due dates as required by law and non-adherence to provisions in the tax laws. They also included transacting of business with non-VAT registered persons.
According to the 2012 report, the state lost GH¢629.7 million in the areas of store management of some public organisations.
These irregularities include, non-documentation of store items and fuel not accounted for, resulting from absence of store ledgers; lack of awareness of officers assigned to store duties; inadequate supervision; deficient and improvised log books and managements’ failure to procure records.
Contract irregularities were also captured in the report, showing losses to the tune of GH¢153.9 million to the state.
The anomalies in contract sums mainly relate to non-performance of contract, variations of conditions of contract without following procedures, non-specification of mode of payments and the failure to deliver in contract agreements and ineffective control over contracts.
Again, the state lost more than GH¢1,696,453 million on outstanding debts, loans and recoverable charges.
These irregularities represent trade and staff debtors and outstanding loans. Absence of debt collection policy or credit controller to retrieve the debt and managements’ apathy towards loan recovery contributed significantly to the anomalies.
The Auditor-General also cited improper maintenance of records on debtors, absence of debtors, aging analysis, no documentation on loan agreements stipulating the terms and conditions, failure to ensure that loans are repaid.
Losses contribute to infrastructure deficit
These losses which are due to financial irregularities are more than three times what the Urban and Feeder roads departments require this year to maintain and expand the urban and feeder roads across the country.
This is because the Department of Feeder Roads require a little of over GH¢24,331 million while the Urban Roads Department needs a little of over GH¢83,991 million
The Roads and Highways Minister, Alhaji Inusah Fuseini, has said in an interview that the road fund has, as at September 2014, disbursed some GH¢74,717 million, which represents almost 92 per cent of the Ghana Highway Authority’s budget.
While the minister is upbeat that the government is halfway through the completion of the gang of six roads, he concedes that some of the road projects have slowed due to inadequate funding.
The amount is more than five times the GH¢228.9 million disbursed to the Ghana Highway Authority through the road fund for road maintenance in 2013. – Daily Graphic