Energy Ministry Causes GH¢1.7 Billion Loss To The State

20Ghana lost GH¢1,803,646,727 as a result of financial errors and irregularities committed by public boards, corporations and other statutory institutions.

The loss, according to the Auditor-General’s Report for the 2014 fiscal year, arose out of the breakdown of internal controls.

The loss, according to the report, occurred between January 1 and December 31, 2014.
The report has since been presented to Parliament.

Standing tall among the list of offenders are agencies under the Ministry of Energy, with financial irregularity totalling GH¢1,717,636,490.

The irregularities cover outstanding debts, loans and recoverable charges, cash, payroll, procurement, tax, store and contracts.

For the Ministry of Energy alone, GH¢1,704,679,561 was registered under outstanding debts, loans and recoverable charges.

Institutions named under the Energy Ministry are the Ghana Electrification Scheme, the Electricity Company of Ghana (ECG), the Ghana National Petroleum Corporation (GNPC), the National Petroleum Authority (NPA), the Unified Petroleum Price Fund, the Ghana Atomic Energy Commission and the Radiological & Medical Science Research Institute.

The report indicated that there was the need for steps to be taken immediately to rectify weaknesses identified in the financial control systems of the indicted institutions.

National Electrification Scheme

Under the National Electrification Scheme, it was realised that contrary to the administrative directives establishing the scheme, three organisations had not remitted a total amount of GH¢616,636 to the Consolidated Fund.

The report added that the Public Utilities Regulatory Commission (PURC) owed the scheme GH¢10,979,533 as of December 31, 2013 and remitted only GH¢100,000, resulting in an outstanding balance of GH¢10,879,533.

“As a result, the total amount owed the scheme by these four institutions as of December 31, 2013 stood at GH¢11,496,169,” the report said.

It was the recommendation of the Auditor-General that the management of the scheme ensure that all levies collected were remitted to the fund without delay.

GNPC

It indicated that sections of the petroleum agreements empowered the GNPC to audit the operations of the partners in the oil industry.

However, the report observed that the management of the corporation had not exercised that right directly so far.

It recommended that management should exercise the right to audit the petroleum partners without further delay.

It said contrary to Section 30 of the Audit Service Act, 2000 (Act 584), the GNPC had failed to constitute an Audit Report Implementation Committee (ARIC).

“We recommend that management should constitute an ARIC without any further delay,” it stated.

An amount of US$50,000,000 advanced to the Ministry of Finance in December 2013 by the GNPC which was to be repaid within three months had not been paid as of the time of the audit.

Also, GH¢102,537,354, representing the net effect of assets and liabilities transferred to the state by the GNPC, had been outstanding since 2010.

The report advised management to intensify its efforts to recover those outstanding amounts, noting that during a review it was observed that some state-owned enterprises (SOEs) owed the GNPC to the tune of US$92,112,277.

NPA

For the NPA, the report observed that GH¢1,813,271, representing provision for bad debts in 2012, was repeated in the year under review.

Management of the authority was, therefore, urged to follow up the non-recoverable portion of the amount and seek its approval with adequate reasons to write-off the figure, otherwise the balance ought to be adjusted to reflect the current estimate.

Petroleum Commission

The report observed that rates, fees and charges by the Petroleum Commission did not have parliamentary approval.

It was recommended that management of the commission use the appropriate channels to have its rates, fees and charges approved to have legal support.

It was also noted that purchases made by the commission totalling GH¢24,122 were not accompanied by Value Added Tax (VAT) receipts, contrary to the VAT Act.

Public Utilities Regulatory Commission

It said due to the inability of the management of the Public Utilities Regulatory Commission to collect GH¢10,761,277.11 from the Ghana Grid Company (GRIDCo), the commission was unable to distribute levies due to beneficiaries in full.

“We recommend that management should ensure that the amount of GH¢10,761,277.11 is collected from GRIDCo and henceforth all revenues are received as and when they are due,” the report said.

Source: Daily Graphic

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