Auditor-General: GH₵95m Assemblies Common Fund cash used to build private entity
These are contained in the Report of the Auditor-General on the Management and Utilisation of the DACF for the year ended December 31, 2020.
The Auditor-General recommended to the Administrator of the District Assemblies’ Common Fund (DACF) to recover the total payment of GH₵95 million from Sewerage Systems Ghana Limited.
According to the Auditor-General, it could not establish the basis for the payment of the GH₵95 million as support to a private entity with no government ownership.
To buttress this position, the auditor-general was also of the view that Article 252(3) of the 1992 Constitution does not permit allocation of the Common Fund to private entities and would be a loss to the assemblies if not recovered.
These are contained in the Report of the Auditor-General on the Management and Utilisation of the DACF for the year ended December 31, 2020.
The report said: “The Administrator of DACF paid an amount of GH₵19 million to Sewerage Systems Ghana Limited in 2019 as the outstanding amount for a GH₵95 million support to complete the Accra Waste Treatment Plant, Lavender Hill and Mudor Facility”.
The report further indicated that “the payment was only supported by a letter from the Office of the President referenced OP /CA.7 /V.3 of June 15, 2016, which indicated that “the intention of Cabinet was to provide a credit guarantee for the completion of the Accra Waste Treatment Plant, Mudor Faecal and the old ‘Lavender Hill’.
The report said in order to establish the basis for the payment of GH¢95 million to Sewerage Systems Ghana, the Audit Service conducted a review of the transaction from inception and found that the letter from the office of the President specified that the intention of Cabinet was to provide a credit guarantee for the completion of the three facilities.
It also found that “the payments commenced in 2016 with annual provision in the Approved Formula, and the then administrator did not obtain any contractual documentation to support funding to a private entity or enter into any legally binding arrangement to recover the support made to Sewerage Systems.
GH₵3.8m for no work done
The 2020 auditor-general’s report also cited the administrator of the DACF for paying to Zoomlion Ghana Limited a total amount of GH₵3.8 million (GH₵3,801,530) for no work done.
According to the report, Zoomlion was supposed to fumigate and provide SIP services for 38 newly created MMDAs for the first quarter of 2018 when the assemblies had not begun operations.
The Report of the Auditor-General on the Management and Utilisation of the DACF for the year ended December 31, 2020 said the newly created assemblies were inaugurated in March 2018 and their agreement with Zoomlion took effect from April 2018.
According to the report, the payment in 2018 contravened Regulation 39 of the now repealed Financial Administration Regulations, 2004 (L.I. 1802), which required heads of accounts to ensure that payments were authenticated as due and payable.
The auditor-general said it considered the payment to be unjustified and a loss to the fund as the allocation to the newly created assemblies did not warrant payment to Zoomlion for no work done.
However, “the administrator explained that the assemblies indicated that Zoomlion would perform extra services to cover the payment,” the report stated.
The report said the Audit Service recommended to the administrator to provide evidence of scope of work undertaken by Zoomlion to offset the payment or recover the amount of GH¢3,801,530.00 from the company.
