An audit report from KPMG on the contracts signed between the Ghana Revenue Authority (GRA) and Strategic Mobilisation Ghana Limited (SML) shows that there is not full transparency on the part of the latter.
According to KPMG, SML did not provide GRA supporting documents or relevant information to verify the investment it has made in the contracts signed from 2018 to 2023.
KPMG made this known when it revealed that the government would be liable to pay Strategic Mobilisation Ghana Limited (SML) a return on investment equivalent to the fair value of SML’s investment in its contract with the Ghana Revenue Authority (GRA) should it terminate its contract without cause.
According to KPMG in its audit report on the contract between GRA and SML, the total investment value in the contracts for the transaction audit, external price verification services, and downstream petroleum audit services amounts to US$44,044,180.00.
The total investment value in the contract for the upstream petroleum audit and minerals audit services amounts to US$133,486,722.51.
Therefore, the total investment value for all the services provided by SML to GRA amounts to US$177,530,902.51.
However, “SML had yet to implement the upstream petroleum audit and minerals audit services, and therefore, there could be no assessment as to whether GRA would derive value or benefit from that service.”
Should the government decide to terminate the contract, KPMG recommended that GRA verify the investment of any of the services that were provided by SML.
Regarding the downstream petroleum audit services, KPMG determined that there was an incremental volume of 1.7 billion litres and an incremental tax revenue of GHS 2.45 billion for the period under review.
“There were also qualitative benefits, including a 24/7electronic real-time monitoring of the outflow and partial monitoring of inflows of petroleum products at depots where SML had installed flowmeters,” the report added.
The downstream petroleum sector refers to the final stage in the petroleum industry, where refined petroleum products are distributed and sold to consumers. This sector includes activities such as refining, storage, transportation, and marketing of petroleum products. Examples of downstream activities include operating refineries, distributing fuels to gas stations, and selling petroleum products to end-users like consumers and businesses.
The upstream petroleum sector is the initial stage of the petroleum industry, which involves exploration, drilling, and production of crude oil and natural gas. This sector focuses on locating and extracting crude oil and natural gas from underground reserves. Activities in the upstream sector include geological surveys, drilling exploratory wells, and operating oil and gas production facilities. The products extracted in the upstream sector are then processed and refined in the downstream sector for distribution and sale to consumers.
Meanwhile, as part of his recommendations, President Akufo-Addo has directed that the fee structure under the contract be changed from a variable to a fixed fee structure.
This change is expected to enhance transparency and accountability in the collaboration between GRA and SML, ensuring that the government receives value for money.
“…it is important to review the contract for downstream petroleum audit services, particularly the fee structure. Given the experience and proficiency of SML over the last four years of providing this service, the President has directed that the fee structure be changed from a variable to a fixed fee structure. Other provisions of the contract worth reviewing include clauses on intellectual property rights, termination, and service delivery expectations,” the report from the Presidency added.
Below is the full report by President Akufo-Addo.
