GRA entered into 6 contracts with SML without PPA approval – KPMG Report

The full report by the renowned auditing and advisory firm, KPMG, has revealed that the Ghana Revenue Authority (GRA) had six service contracts with Strategic Mobilisation Limited (SML), contrary to the presidency’s initial claim of three contracts.

This revelation starkly contrasts with the information in a press statement released by the Communications Director of the Presidency, Eugene Arhin, on Wednesday, April 24.

According to the report, all of these contracts were entered into and executed without approval from the Public Procurement Authority (PPA).

The full KPMG report, released by President Akufo-Addo on Wednesday, May 22, outlined the six contracts as follows: Transaction Audit Services (effective from June 1, 2018), Contract Extension (effective from January 1, 2019), External Price Verification Services (effective from April 1, 2019), Consolidation Services Agreement (Transaction Audit & External Verification Services) (effective from October 3, 2019), Measurement Audit of Downstream Petroleum Products (effective from October 3, 2019), and Addendum to Measurement for Downstream Petroleum Products Agreement (effective from July 29, 2020).

On 1 January 2019, GRA executed without PPA’s approval, and extended transaction audit services agreement with SML, renewable on a monthly basis, following the expiration of West Blue’s contract and SML’s subcontract agreement on December 31, 2018. GRA entered into six (6) service agreements with SML, utilising the single-source method, without approval from PPA.

The KPMG report said, “Evidently, GRA executed the above contracts with SML in breach of Act 663 [the Public Procurement Act] as amended.”

Following an investigation by The Fourth Estate, which uncovered numerous irregularities in the contracts between Strategic Mobilisation Limited (SML), the Ministry of Finance, and the Ghana Revenue Authority (GRA), President Akufo-Addo instructed KPMG to conduct a comprehensive audit.

The investigation revealed discrepancies in SML’s claims regarding its services aimed at tackling revenue losses in the downstream petroleum sector.

Despite SML’s assertions that its services were effectively addressing under-declaration, dilution, and diversion of petroleum products, evidence presented by The Fourth Estate showed that these functions were being carried out by other companies and the National Petroleum Authority (NPA).

Managing Director of SML, Christian Tetteh Sottie admitted to the inaccuracies and promptly removed the false claims from the company’s website.

Despite these revelations and other admitted falsehoods, Minister of Finance Ken Ofori-Atta initiated a process in 2023 to expand SML’s contracts to include the gold and oil producing sectors. This decision significantly increased the annual contract sum to over $100 million.

Following the investigation by The Fourth Estate and subsequent public outcry, President Akufo-Addo suspended the contracts and commissioned KPMG to conduct an audit and submit a report.

While the president released a press statement regarding the findings, the full report provides even more damning revelations about SML’s operations within its contracts with the Ministry of Finance and the GRA.

Source: Businessweekghana