Ghana loses over GHc2.065billion To financial irregularities in 2011 – Auditor General

Story by: Attah-Effah Badu

Cash embezzlements, payroll irregularities, unrecovered debts, procurement and tax irregularities by over 80 public boards, corporations, and institutions landed Ghana in a whopping loss of GH¢2,067,745,512 in 2011, according to the country’s Auditor General.

This revelation was contained in the latest Auditor General’s report submitted to parliament a few weeks ago for consideration and action.

According to the report, out of the total figure, misapplication of funds, embezzlements, unverified payments and uncredited  bank lodgements  as a result of poor control environment and ineffective  internal audit units at the various public boards, corporations  and statutory institutions resulted in GH¢1,965 ,052,672 in cash irregularities alone.

This amount constituted 95.5% of all financial irregularities identified by the Auditor General in the financial operations of the different public boards and organisations. The total loss includes US$50,309,512 converted into cedis at the prevailing exchange rate of Gh¢1.5467 to the US$1 as at 31st December 2011.

Outstanding debts in the year amounted to 4.8% of the anomalies translating into GH¢ 99,170,464.

According to the report, the outstanding debts owed to these bodies are as a result of ineffective debt management systems and lackadaisical attitudes of managements to put in place strong measures to promptly collect debts when they fall due.

The Auditor General, Mr Richard Q. Quartey, in the report recommended that  management of public boards, corporations and other statutory bodies should put in place adequate mechanisms towards debts recovery to ensure prompt recoveries on  due dates to mitigate or avoid the occurrence of bad debts.

To avoid cash irregularities Mr. Quartey, further recommended that the boards and other statutory institutions should improve the control environment, including the establishment and effective operation of internal audit units and enhance the supervision over accounting staffs.

“I also recommend the prompt retirement of imprests, authentication of all payment    vouchers and early credit lodgements”, the AG said in his report.

 In the case of tax irregularities which resulted in the loss of Gh¢303,596, the Auditor General says it was caused by the failure of finance officers to diligently act in accordance with statutory tax laws resulting in non-deduction of withholding tax, and delays in payment of withholding tax to Domestic Tax Revenue Division (DTRD) of the Ghana Revenue Authority (GRA). He advised finance officers to strictly adhere to tax laws.

The report also revealed a loss of GH¢1,795,607 to payroll irregularities during the same period. The report noted that this form of irregularity mostly included the non-deletion of separated staff from the institution’s payroll after their termination dates. It added that the lack of coordination between the Accounts office and the various    administrative heads was responsible for the lack of deletion of the ghost names.

The Auditor General called for coordination between departments of government institutions and the swift notification of respective bankers of former staff to withhold salaries paid into their bank accounts in error. The report also urged the recovery of all the wrongful payments made to the said employees.

He said to enhance accountability and timely stewardship of public funds as well as effective financial management, sector Ministers must as a matter of urgency take remedial measures to ensure that Public Boards and statutory institutions adopt measures to prevent these loses.