It is a 36% increase above the 2020 forecast of GH12.85 billion. Financial irregularities in public boards and enterprises have cost more than GH50.8 billion in the last five years.
The GH17.5 billion discovered in 2021 was mostly the result of a GH6 billion credit power sale to Volta River Authority (VRA) and Northern Electricity Distribution Company (NEDCo) customers.
The majority of the inconsistencies involved cash, tax, wages, debts and loans, stores and procurement, contracts, rent, and credit power sales.
Aside from cash locked up in nonperforming investments on recoverable loans and outstanding debts, there were certain financial transgressions of GH4.7 billion owed by VRA customers and GH1.2 billion owed by NEDCo customers for power delivered.
The debts developed as a result of FX power sales, mining, sales of power to ministries, departments, and agencies (MDAs), sales of power locally, and the COVID-19 power relief, according to the audit report today.
The Auditor-General blamed the debts on a lack of an effective debt collection mechanism, a lack of credit controls to recover the loans, and management indifference to loan recovery.
In order to eliminate or reduce the occurrence of bad debts, he advised the management of public boards and corporations to put in place appropriate rules for the administration of loans and other receivables. These policies should ensure that loans and debts were returned on time.
Cash irregularities of GH505 million were also discovered in the 2021 audit of public boards and organizations, primarily as a result of misappropriation of funds, budget overruns, payment of board allowances to council members without ministerial consent, and payments that were not verified.
GH230 million of the GH505 million in cash irregularities was unbudgeted spending by the Ghana Cocoa Board (COCOBOD) for the principal repayment of a 10-year loan with the Bank of Ghana; this expense was not included in the approved budget for the 2019 and 2020 financial years.
The Auditor-General clarified that the violations happened as a result of inadequate supervisory responsibilities and missing controls.
Therefore, he asked management of public boards and businesses to tighten supervision over their finance professionals and make sure they followed the guidelines of the Public Financial Management Act, 2016, Act 921.
Content created and supplied by: Bronzeman (via Opera
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