In adherence to President Akufo-Addo’s recent directives regarding its agreement with Strategic Mobilization Ghana Limited (SML), the Ghana Revenue Authority (GRA) has terminated the Audit and External Verification Service Contract (AEVS) with SML.
Additionally, the GRA has instructed the suspension of the Upstream Petroleum and Minerals Revenue Audit components of the contract, pending further examination of the contract particulars.
Furthermore, the GRA has opted to modify the measurement audit for the Downstream Petroleum Products Contract by transitioning to a fixed fee structure. The Authority has also announced its intention to thoroughly reassess other aspects of the contract, including service delivery expectations, termination clauses, and intellectual property rights.
The GRA disclosed this in a letter entitled “Compliance with Presidential Directives on Recommendations in KPMG Report on the Transactions Between GRA and SML,” dated May 3, 2024, signed by its Commissioner General, Ms Julie Essiam, and addressed to the Managing Director of Strategic Mobilisation Ghana Limited (SML)
The GRA letter has been distributed to several key individuals, including Vice President Dr. Mahamudu Bawumia, Chief of Staff Mars Akosua Frema Osei Opare, Secretary to the President Nana Bediatuo Asante, Finance Minister Mohammed Amin, the Director of Legal at the Ministry of Finance, and the Deputy Commissioner responsible for Legal Affairs at the GRA.
“This is about the presidential directives dated 18 April 2024 on the recommendations of KPMG concerning the Contract for Consolidation of Revenue Assurance Services between the Government of Ghana acting per the Ministry of Finance, Ghana Revenue Authority (GRA) and Strategic Mobilisation Ghana Limited (SML).
“Following the directives of the President, GRA has undertaken a thorough review of the Consolidation of Services (Transaction Audit and External Verification Services) contract dated 3 October 2019, the Measurement Audit for Downstream Petroleum Products Contract dated 3 October 2019, and the Contract for Consolidation of Revenue Assurance Services (Upstream and Minerals Audit) contract dated 25 October 2023,” the GRA letter read.
“Based on the review, the following actions are to be taken: First, The Transaction Audit and External Verification Services Contract will be terminated. Secondly, the Measurement Audit for Downstream Petroleum Products Contract will be amended.
“Specifically, the fee structure will be revised to a fixed fee structure. In addition, other provisions such as service delivery expectations, termination, and intellectual property rights will be subjected to a thorough review.
“Thirdly, the Upstream Petroleum and Minerals Revenue Audit portions of the Contract for Consolidation of Revenue Assurance Services cannot take effect until a comprehensive technical needs assessment, value-for-money assessment, and relevant stakeholder consultations have been achieved,” the GRA letter to SML further read.
GRA-SML investigations
President Akufo-Addo received the KPMG report on April 2, 2024, three months after commissioning the audit firm to investigate the GRA-SML deal. After reviewing the report, the government issued a press statement endorsing KPMG’s recommendations in full. As part of this adoption, the government directed the GRA to review the deal among other directives.
On January 2, 2024, President Akufo-Addo appointed and tasked KPMG, a leading audit, tax, and advisory services firm, to immediately audit the transaction between the Ghana Revenue Authority (GRA) and Strategic Mobilization Ghana Ltd (SML). This contract aimed to enhance revenue assurance in the downstream petroleum sector, the upstream petroleum production, and minerals and metals resources value chain.
The President’s directive was communicated through a statement from the communications directorate of the Jubilee House, signed by the director of communications at the presidency, Eugene Arhin. The audit’s terms of reference included six objectives:
- Conduct an audit to determine the rationale or needs assessment performed before GRA’s contract approval and assess how the arrangement aligns with specific needs.
- Assess the appropriateness of the contracting methodology, verifying compliance with legal standards and industry best practices in the procurement process for selecting SML.
- Evaluate the degree of alignment between current activities and the stipulated contract scope, identifying any deviations.
- Assess the value or benefit that SML has provided to the GRA through this engagement.
- Review financial arrangements, including pricing structures, payment terms, and resolution of any financial compliance issues.
- Submit a report on findings and appropriate recommendations regarding the above objectives.
“President Akufo-Addo further tasked KPMG to complete the assignment in two weeks and submit appropriate recommendations to him. The President also directed the Ministry of Finance and GRA to provide KPMG with whatever assistance they will require for the conduct of the audit and has also directed the Ministry of Finance and the Ghana Revenue Authority to suspend the performance of the contract, pending the submission of the audit report, including any payments presently envisaged under its terms,” the Jubilee House statement further read.