AUDITOR-GENERAL'S REPORTON MDAs FOR 2011
REPUBLIC OF GHANA
REPORT
of the AUDITOR GENERAL
on the
PUBLIC ACCOUNTS OF GHANA
for the year ended
31 DECEMBER 2011
MINISTRIES, DEPARTMENTS AND OTHER AGENCIES
OF THE CENTRAL GOVERNMENT
Our Vision
To be one of the leading Supreme Audit Institutions in the world,
developing professional, excellent,
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REPORT OF THE AUDITOR-GENERAL ON THE PUBLIC ACCOUNTS OF GHANA – MINISTRIES,
DEPARTMENTS AND OTHER AGENCIES (MDAs) FOR THE FINANCIAL
YEAR
ENDED 31 DECEMBER 2011
TABLE OF CONTENTS
Para- Pages graphs
Transmittal letter i
PART I
|
Introduction
|
1
|
1
|
|
Audit objectives
|
3
|
1
|
|
Summary of
significant findings and
|
|
|
|
Recommendations
|
5
|
2
|
Summary of
findings and
PART II
Recommendations by MDAs 28 12
PART
III DETAILS OF
FINDINGS
|
Auditor-General’s Report on the Public Accounts of Ghana, MDAs – 31 December 2011
|
Ministry of
Lands, Forestry & Mines
|
1429
|
389
|
|
Ministry of Foreign Affairs
& Regional Integration
|
1457
|
399
|
|
Ministry of Water
Resource Works &
Housing
|
1476
|
407
|
|
Ministry of
Information & National Orientation
|
1498
|
413
|
|
Ministry of
Communication
|
1511
|
416
|
|
Ministry of
Trade
|
1514
|
418
|
|
Office of
Government Machinery
|
1517
|
419
|
|
Ministry of
Defence
|
1535
|
424
|
|
Ministry of
Local Govt. Rural Dev.
|
1592
|
442
|
|
Ministry of
Chieftaincy Affairs
|
1605
|
445
|
|
Ministry of
Employment &
Social Welfare
|
1611
|
447
|
|
Ministry of
Road & Transport
|
1629
|
452
|
|
Ministry of
Tourism
|
1658
|
461
|
|
Ministry of
Justice & Attorney General
|
1661
|
462
|
|
Other Agencies
|
1755
|
486
|
Auditor-General’s Report
on
the Public Accounts of Ghana, MDAs – 31 December 2011
TRANSMITTAL
LETTER
Ref. No.AG.01/1/09/Vol.2/53
Office of
the Auditor-General
Ministries Block “O” P.O. Box M.96
Accra
Tel. (0302)662493
Fax (0302)675496
29 June 2012.
Dear Madam Speaker,
AUDITOR-GENERAL’S REPORT ON THE PUBLIC ACCOUNTS OF GHANA – MINISTRIES, DEPARTMENTS AND
OTHER
AGENCIES (MDAs)
FOR THE YEAR ENDED 31ST DECEMBER, 2011
In accordance with Article 187(5) of the 1992 Constitution, I have the honour and privilege to present to Madam Speaker, to be tabled before the House, my Annual
Report on the Public
Accounts of Ghana – Ministries, Departments and Other Agencies of Government
(MDAs) for the financial year ended 31st December
2011.
2. Significant irregularities arising from the audit have been highlighted
in the report, in line
with Section 13 of the Audit
i Auditor-General’s Report on the Public Accounts of Ghana,
MDAs
– 31 December 2011
Service Act, 2000 (Act 584). I have
also drawn attention to several
instances of non-compliance with financial and other regulations,
as well as errors that occurred in transactions. These are the results
of systemic
weaknesses
that
have
persisted overtime and other break-downs in internal controls. I have provided recommendations which, if implemented, can serve to reduce
the incidence of the irregularities and
correct the causes of the
conditions reported on.
3. I wish to note that although the Controller
and Accountant General has issued
the accounting procedures
manual for
the
MDAs the MDAs still
have
challenges
in the preparation of financial statements in accordance with the requirements of the FAA (Section 41).
4. Madam Speaker,
my report has been presented in three
parts. Part 1 of the report contains the Introduction and Objectives; Part 2
summarises the significant findings per each MDA and Part III
is about the full details of
all matters contained in
the
report.
Acknowledgement
5. I would like to thank the Chief Directors and Management as well as staff
of all the MDAs audited for their cooperation and assistance extended
to my
staff during
the
discharge
of
my
mandate.
Auditor-General’s Report
on the
Public
Accounts of Ghana, MDAs – 31
December 2011 ii
6. I would also like to acknowledge my staff in the Central
Government Audit Department for the continued good work they have done and the members of the
entire Audit Service and their
contributions in several ways to the production of my report. My thanks also go to the Audit Service Board for their continued support in ensuring the delivery of quality auditing services.
7. Madam Speaker, last but not the least, I wish to express my sincere appreciation to the august House of Parliament, especially the Public Accounts Committee, for
the
cooperation that
has
existed between the Committee
and my Office in the consideration and handling of Auditor-General’s Reports that have been
presented to the
House.
Yours Sincerely,
|
AUDITOR-GENERAL THE
RIGHT
HONOURABLE SPEAKER
OFFICE OF PARLIAMENT
PARLIAMENT HOUSE
ACCRA
iii Auditor-General’s Report on the Public Accounts of Ghana, MDAs – 31 December 2011
PART I
REPORT OF THE AUDITOR-GENERAL ON THE PUBLIC ACCOUNTS
OF
GHANA – MINISTRIES,
DEPARTMENTS AND OTHER AGENCIES (MDAs) FOR THE FINANCIAL YEAR
ENDED
31 DECEMBER 2011
Introduction
In
accordance with Article 187(2) of the 1992 Constitution, I have audited the accounts of Ministries, Departments and Agencies of Government (MDAs) for the financial year ended 31 December
2011. I present herewith the results of the financial and regularity audit of the MDAs. The report contains matters of significance that I believe ought to be brought to the attention of the
House.
2. In performing the audit I took into consideration the Financial Administration
Act, 2003
(Act
654),
the Financial
Administration Regulations, 2004, the Public Procurement Act, 2003 (Act 663), and other relevant legislation regulating public
financial
management in Ghana, as well as international auditing standards and best
practices.
Audit objectives
3. I am enjoined by Section 13 of the Audit Service Act, 2000 (Act 584) to examine, in such manner as I think fit, the financial operations of MDAs and ascertain, among other things,
whether in
my opinion:
1 Auditor-General’s Report
on
the Public Accounts of Ghana, MDAs – 31 Dec. 2011
· monies have
been expended for the purposes for which they were appropriated by Parliament and
expenditures have been made as authorised;
· essential records have been maintained and the rules and procedures applied were sufficient to safeguard and control public interest and property;
and
· all public monies have been fully accounted
for and rules and procedures applied have been sufficient
to secure an effective check on the
assessment, collection and proper
allocation of revenue.
4. Guided by the above objectives I also reviewed key areas of MDAs’ internal control systems and risk management to ensure and encourage proper and
prudent management of public funds and
resources. Issues, conclusions
and recommendations included in this
report, intended to improve and further deepen financial
management
and controls, were discussed with the MDAs.
Significant findings and recommendations
5. As in previous
reports, this year’s audit disclosed poor cash management
practices resulting
in failure to pay revenue collected
into the Consolidated
Fund,
tax irregularities
and
un-authorised payments as well as non-availability of adequate records on revenue collected. We noted also instances of inadequate controls over the administration
of procurement, payroll and contracts.
Auditor-General’s Report on the Public Accounts of Ghana, MDAs – 31 Dec. 2011 2
6. We
discussed our
findings with
heads of the MDAs
and incorporated their responses in management letters that were subsequently issued to them. We also made available
the drafts of matters
intended for inclusion in
this
report for
the
comments of affected MDAs before
the
report was
finalized
in order that conclusions and comments reported would be based
on accurate and up to
date facts. Some MDAs responded
whereas others did not.
7. The overall financial impact of the weaknesses and irregularities identified amounted to GH¢118,820,175.66,
US$246,744.24 and GBP136,084.22. This is set out in Table 1 of this report while in
Table 2 these have been
analysed
according to irregularities pertaining to each MDA.
Table 1: Summary of financial
irregularities for 2011
|
Irregularities
|
%
|
GH¢
2011
|
US$
2011
|
GBP
2011
|
GH¢
2011 Total
|
GH¢
2010 Total
|
|
Tax Irregularities
|
44.22
|
52,807,322.72
|
|
13,824.11
|
52,838,612.21
|
72,414,244
|
|
Cash Irregularities
|
28.43
|
33,583,678.14
|
76,883.31
|
122,260.11
|
33,972,751.25
|
94,545,872
|
|
Outstanding Loans
|
4.78
|
5,602,153.84
|
73,306.18
|
|
5,709,276.16
|
4,665,375
|
|
Payroll
|
0.86
|
909,278.80
|
76,496.25
|
|
1,021,062.77
|
498,259
|
|
Stores/Procurement
|
0.65
|
780,027.67
|
|
|
780,027.67
|
684,375
|
|
Contracts
|
20.88
|
24,946,637.32
|
|
|
24,946,637.32
|
283,578
|
|
Rent Arrears
|
0.18
|
191,077.17
|
20,058.50
|
|
220,388.66
|
82,838
|
|
Total
|
100.0
|
118,820,175.66
|
246,744.24
|
136,084.22
|
119,488,756.04
|
173,174,541
|
8. My comments on the irregularities are provided in the ensuing paragraphs while the ruling
conversion rates of the various
foreign
currencies involved, as at 31 December 2011, are set out below:
3 Auditor-General’s Report
on
the Public Accounts of Ghana, MDAs – 31 Dec. 2011
GH¢1.4613 - US$1.00
GH¢2.2634 - £1.00
Tax irregularities and others – GH¢52,838,612.21
9. Various taxes due for payment to IRS/CEPS & VAT, Divisions under the Ghana Revenue
Authority,
which remained uncollected during the period being reported on stood at GH¢52,807,322.72 and GBP13,824.11 respectively. Most of the irregularities
arose from poor supervision of schedule officers and failure to enforce tax laws and
financial regulations, as well as failure by Management of MDAs to
sanction offending staff.
10. I, once
again, recommend that the Ghana
Revenue Authority as well as Chief Directors and responsible officials at MDAs should strengthen supervision and internal control procedures in the management of public financial business and apply necessary sanctions
against offending officers
and
clients/organizations that default in settlement of
their tax obligations.
Cash irregularities – GH¢33,972,751.25
11. Cash irregularities recorded for this period totaled
GH¢33,972,751.25. The incidence
of
cash irregularities
occurred mainly
through:
Auditor-General’s Report
on
the Public Accounts of Ghana, MDAs – 31 Dec. 2011 4
Ø Misappropriation
of revenue/other receipts;
Ø
Failure by Accounting Officers to properly acquit payment vouchers or produce them for inspection and validation;
Ø
Failure to recover funds from dishonoured cheques issued by businesses/organizations and individuals in settlement of their
tax and other obligations;
Ø Imprests not accounted for;
Ø Unauthorised expenditure;
Ø
Non-availability of records on revenue collected and failure to present value books for inspection;
12. The incidence of cash irregularities was more pronounced in the
underlisted Ministries:
Justice and Attorney General GH¢16,375,045.05
Health GH¢12,089,459.63
Education GH¢ 2,621,482.63
MoFEP GH¢ 2,004,238.00
|
Employment and Social Welfare
|
GH¢
|
276,723.53
|
|
Youth and
Sports
|
GH¢
|
237,864.70
|
|
Defence
|
GH¢
|
81,039.61
|
|
Other Agencies
|
GH¢
|
84,758.12
|
13. I recommend the strengthening
of internal controls
over the collection and disbursement of cash and adherence to the provisions
of FAA 2003 and FAR 2004, Financial Memoranda, etc.
5 Auditor-General’s Report
on
the Public Accounts of Ghana, MDAs – 31 Dec. 2011
Stores/Procurement irregularities – GH¢780,027.67
14. Irregularities relating to Stores and procurement amounted to GH¢780,027.67 during the review period. The irregularities related to purchases not taken on ledger
charge, contract variations, payments for uncompleted works and fuel coupons not properly accounted for. Failure to adhere to the Public Procurement Act, and Store Regulations brought about this situation. Poor supervision of subordinate
officers and
non application of sanctions was
another contributory factor.
15. I recommend the strengthening of supervision and monitoring as well as compliance
with the provisions of the Public
Procurement Act and other regulations.
Outstanding loans – GH¢5,709,276.16
16. Outstanding loans has continued
to be an issue because often loans are granted without specifying terms of recovery and responsible officials fail to monitor performance while the beneficiaries
also do not willfully ensure that the loans granted them
are being recovered. An amount of GH¢3,442,296.60
out of the total is in respect
of wrongful payment of vehicle insurance premium by Ministry of Health which ought to be recovered from the
beneficiaries.
Auditor-General’s Report
on
the Public Accounts of Ghana, MDAs – 31 Dec. 2011 6
17. There is the need for fund managers to observe provisions in the financial regulations regarding the granting of loans and their full recovery.
Payroll overpayments – GH¢1,021,062.77
18. Payroll irregularities involved mostly unearned salaries paid to separated staff as well as irregularities in pension payments and the failure to ensure timely deletion of the names of separated
persons. A total amount of GH¢909,278.80
and US$76,496.25 were recorded in the period under review. This is proving to be an area of significant loss of funds
to
the
Government and it is time to seek a more
workable solution between MDAs and the Controller and Accountant
General’s Department to delayed deletion of names of separated
staff and pensioners. There
is
as
well
required,
a
mechanism where
individuals who have wrongly been
paid or been beneficiaries
of unearned
salaries and the bankers
of persons face sanctions for not returning
promptly such unearned
monies when called
upon to do so.
19. I again recommend
intensification
of
coordination
between Finance and Human Resource Units within MDAs in their responsibility for
payroll management and the prevention as well as
recovery of unearned salaries paid to unauthorised personnel.
7 Auditor-General’s Report
on
the Public Accounts of Ghana, MDAs – 31 Dec. 2011
Contract irregularities
– GH¢24,946,637.32
20. This year, the value of reported irregularities in contract administration is significantly higher as a result of contract
management lapses
that occurred particularly
at
the
Ministries of
Health, Defence, Roads and Transport, Education and Employment and Social Welfare.
21. I recommend that MDAs should
endeavour to adhere strictly to the provisions of
the Public Procurement Act with respect to single source
procurement, the tendering and
award of contracts and also
monitor
progress of
execution of contracts to avoid incidences of improper contract variations, payments for work not done, abandonment
of works, etc.
Staff rent arrears – GH¢220,388.66
22. Rent arrears
owed by staff continue
to feature in my reports because of failure to convey appropriate information to the Controller and Accountant
General and problems
in
payroll administration. Managements of some MDAs did not ensure
deduction of rent that was due from the salaries of their
staff. This year the amount involved was
GH¢191,077.17 and $20,058.50.
23. There is the need for Management of MDAs to ensure that appropriate inputs are
submitted to Controller and Accountant General and rent due is deducted at source
from the salaries
of staff. The Auditor-General’s Report
on
the Public Accounts of Ghana, MDAs – 31 Dec. 2011 8
maintenance
of a proper database,
monthly reconciliation with payroll records
and effective
monitoring can ensure this.
Conclusion
24. The cataloguing
of
financial
irregularities
in my Report
on MDAs and Other Agencies has become an annual ritual that seems to have no effect because affected MDAs are not seen to be taking any effective action to address the basic problems of lack of
monitoring and supervision and non-adherence to legislation put in place to
provide effective financial management of public resources. Whatever
efforts have been made by MDAs in the past has not been effective
enough to deal with the issues of non-compliance and
outright disregard for established order in the conduct of public financial
business.
25. I am not satisfied
with
the
performance
of
some Chief Executives and other responsible officials in the management
of
public resources and safeguarding
of public
property and I call for more effective action from the Ministry of Finance
and Economic Planning, as the lead Agency of Government in the administration
of the public purse, to ensure that MDAs comply with the Financial Administration
Act,
the Financial Administration Regulations, the
Public Procurement Act as well as the Audit Service Act which calls
for the establishment of Audit Report Implementation Committees
9 Auditor-General’s Report
on
the Public Accounts of Ghana, MDAs – 31 Dec. 2011
whose work can
assist in addressing many
of the lapses
that are
mentioned in this
report.
26. I also call for the strengthening and recognition of Internal Audit Units established within the MDAs and the facilitation of their role which can help to reduce the incidence of irregularities that are reported
annually by the Auditor-General.
27. It is my hope that these measures, if properly responded to, shall bring
about a more vibrant public service and allow sufficient time to focus on and address wider
systemic issues
that will bring about achievement of the objectives of Government’s
public sector reform programme.
Auditor-General’s Report
on
the Public Accounts of Ghana, MDAs – 31 Dec. 2011 10
Table 2: Summary of irregularities classified according to
MDAs|
No
.
|
Ministry of
|
Tax Irregularities
|
Cash Irregularities
|
Outstanding Loans
|
Payroll
|
Stores/
Procure
ment
|
Contract
|
Rent Arrears
|
Grand Total
|
||||||||
|
|
GH¢
|
£
|
GH¢
|
US$
|
£
|
GH¢
|
US$
|
GH¢
|
US$
|
GH¢
|
GH¢
|
GH¢
|
US$
|
GH¢
|
US$
|
£
|
|
|
1
|
Chieftaincy Affairs
|
|
|
|
|
|
2,92 7.00
|
|
|
|
|
|
|
|
2,92 7.00
|
|
|
|
2
|
Justice and
Attorney General
|
19,691.00
|
|
16,278,703.00
|
65,929.00
|
|
|
|
8,790.00
|
|
|
|
|
|
16,307,184.00
|
65,929.00
|
|
|
3
|
Local Govt
& Rural
Devpt
|
|
|
6,056.00
|
|
|
|
|
|
|
11,331.00
|
|
|
|
17,387.00
|
|
|
|
4
|
MTOR
|
|
|
1,911.00
|
|
|
|
|
|
|
|
|
|
|
1,911.00
|
|
|
|
5
|
Finance & Econ.Planning
|
52,582,370.00
|
|
2,004,238.00
|
|
|
|
|
49,676.00
|
|
4,993.00
|
|
2,917.00
|
|
54,644,194.00
|
|
|
|
6
|
Defence
|
55,401.62
|
|
81,039.61
|
|
|
|
|
|
|
254,786.06
|
11,304,636.85
|
|
|
11,695,864.14
|
|
|
|
7
|
Roads and
Transport
|
|
|
|
|
|
|
|
20,062.82
|
36,817.74
|
|
48,169.34
|
|
|
68,232.16
|
36,817.74
|
|
|
8
|
Information and
Reg Integ
|
|
|
23,230.06
|
|
|
136,119.41
|
|
3,071.50
|
|
|
|
|
|
162,420.97
|
|
|
|
9
|
Youth and Sports
|
|
|
237,864.70
|
|
|
|
|
16,130.07
|
|
24,738.50
|
|
|
|
278,733.27
|
|
|
|
10
|
Employment & Social Welfare
|
|
13,284.11
|
35,927.53
|
|
122,260.11
|
|
|
|
3,084.91
|
|
20,587.53
|
426.64
|
|
56,941.70
|
3,084.91
|
136,084.22
|
|
11
|
Education
|
27,552.40
|
|
2,621,482.63
|
|
|
2,600.00
|
|
451,364.47
|
|
160,272.84
|
86,081.00
|
|
|
3,349,353.34
|
|
|
|
12
|
Interior
|
|
|
18,144.03
|
|
|
|
|
8,2 73.19
|
|
24,846.14
|
|
|
|
51,263.36
|
|
|
|
13
|
Government
Mactionery
|
|
|
55,163.00
|
|
|
|
|
10,913.02
|
|
|
|
6,029.53
|
|
72,105.55
|
|
|
|
14
|
Communication
|
|
|
6,249.58
|
|
|
|
|
|
|
|
|
|
|
6,249.58
|
|
|
|
15
|
Water Res Works
& Housing
|
|
|
31,421.25
|
|
|
270,935.00
|
|
|
|
36,773.30
|
|
|
|
339,129.55
|
|
|
|
16
|
Trade
and
Industry
|
|
|
|
|
|
|
|
|
|
674.00
|
|
|
|
674.00
|
|
|
|
17
|
Lands Forestry &
Mines
|
|
|
8,030.00
|
|
|
6,840.00
|
|
11,967.21
|
|
2,473.00
|
|
935.00
|
20,058.50
|
30,245.21
|
|
|
|
18
|
Foreign Affaris
|
|
|
|
10,954.31
|
|
|
73,306.18
|
|
36,593.60
|
|
|
|
|
|
140,912.59
|
|
|
19
|
Health
|
122,307.70
|
|
12,089,459.63
|
|
|
5,182,732.43
|
|
272,487.28
|
|
259,139.83
|
13,461,829.53
|
180,769.00
|
|
31,568,725.40
|
|
|
|
20
|
Other Agencies
|
|
|
84,758.12
|
|
|
|
|
56,543.24
|
|
|
25,333.07
|
|
|
166,634.43
|
|
|
|
Total
|
52,807,322.72
|
13,824.11
|
33,583,678.14
|
76,883.31
|
122,260.11
|
5,602,153.84
|
73,306.18
|
909,278.80
|
76,496.25
|
780,027.67
|
24,946,637.32
|
191,077.17
|
20,058.50
|
1 18,820,175.66
|
246,744.24
|
136,084.22
|
|
