The 2022 Auditor-General‘s (AG) report has revealed irregularities totaling more than GH¢15.1 billion in the operations of public boards, corporations, and statutory institutions.
This amount marks a decrease of GH¢2.4 billion (13.86%) from the previous year’s figure of GH¢17.48 billion.
It is noteworthy that the irregularities for the last year were composed of over GH¢15 billion that can be recovered (recoverable amount) and an administrative infraction of GH¢47.28 million.
The recoverable amount constitutes 99.69% of the total, while the administrative portion accounts for 0.31%, representing an amount that cannot be recovered due to procurement and other irregularities.
The Auditor-General emphasizes the strict implementation of its recommendations to ensure financial discipline in managing public resources.
The irregularities primarily occurred in areas such as outstanding debts, loans, amounts recoverable, cash, payroll, procurement, tax, stores, and contracts.
Over the period from 2018 to 2022, irregularities have been a recurrent issue in public boards and corporations, amounting to more than GH¢53.87 billion.
The numbers gradually increased from GH¢3 billion in 2018 to GH¢17.5 billion in 2021, but it decreased to GH¢15.1 billion in 2022.
The report highlights that most irregularity categories decreased in 2022 compared to 2021, even though 113 institutions were audited last year, slightly more than the 101 institutions audited in 2021.
The administrative irregularities mainly comprised procurement irregularities and other procedural infractions and lapses in public financial management.
However, it is important to note that these administrative irregularities did not lead to a loss of funds.
The recoverable amount consisted of inter-governmental agency debts, other overdue receivables, locked up investments, unpaid taxes, unretired impress and advances, and loans given to employees of various institutions, as stated in the report.
On the other hand, the administrative irregularities represented infractions arising from procurement, overdue payables, and the payment of penalties due to delayed payments to suppliers.
These irregularities include inter-governmental agencies’ debts, trade debtors, staff debtors, outstanding loans, and cash locked up in non-performing investments.
For instance, the report highlighted that Ghana National Gas Limited Company is owed $741.93 million, with $515.20 million owed by the Bui Power Authority, $215.78 million by the Ghana National Petroleum Corporation (GNPC), and GH¢1.40 million by the Northern Electricity Distribution Company (NEDCo).
The irregularities were, in part, attributed to the absence of effective debt collection policies, the lack of credit controls for debt recovery, and management’s indifferent approach to loan recovery, according to the Auditor-General’s report.
Furthermore, improper maintenance of records on debtors, the absence of debtors’ aging analyses, undocumented loan agreements specifying terms and conditions, failure to ensure loan repayments, and non-compliance with rules and regulations by management were identified as contributing factors to the irregularities.
Recommendation
“We recommended that management of public boards, corporations, and other statutory institutions should strictly adhere to rules and regulations with regard to debts management,” the report stressed.
“They should also put in place proper policies for the management of loans and other receivables as well as ensuring that loans and debts are repaid on due dates to avoid or minimise the occurrence of bad debts,” the report further stated.