Review SML fee structure; Downstream petroleum audit service needed – Akufo-Addo to GRA, MoF

President Akufo-Addo has directed the Ghana Revenue Authority (GRA) and the Ministry of Finance to review the revenue assurance contract with Strategic Mobilisation Limited (SML) and provide downstream petroleum audit services.

In a statement signed by the Communications Director of the Presidency, Eugene Arhin disclosed that, on Wednesday, 27th March 2024, President Akufo-Addo received the final report of the audit conducted by KPMG regarding the transactions between the Ghana Revenue Authority (GRA) and Strategic Mobilization Ghana Ltd (SML).

In development to the report the president received, the audit findings by KPMG recommended the need for a review of the revenue assurance contract and provide a downstream petroleum audit, which the president has accepted to.

“There is a clear need for the downstream petroleum audit services provided by SML. GRA and the State have benefited from these services since SML commenced providing them. There has been an increase in volumes of 1.7 billion litres and an increase in tax revenue to the State of GHS 2.45 billion. KPMG also observed that there were qualitative benefits, including a 24/7 electronic real-time monitoring of outflow and partial monitoring of inflows of petroleum products at depots where SML had installed flowmeters and six levels of reconciliation done by SML.”

“This minimises the occurrence of under-declarations. However, 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 president further highlighted that some contracts within the SML deal may be terminated. Deals such as “The upstream petroleum audit and minerals audit services have not yet been commenced, and no payments have been made in respect of those services; therefore, they may be terminated.

“However, given that the upstream petroleum audit and minerals audit services could prevent significant revenue leakages, the President has directed that the Ministry and GRA conduct a comprehensive technical needs assessment, value-for-money assessment, and stakeholder engagements before implementing such services.

“The transaction audit and external price verification services may also be terminated. According to KPMG’s findings, GRA obtained partial value or benefit for those services. This was also due to a lack of monitoring on the part of GRA to ensure that SML performed the services as stipulated in the contracts. KPMG’s investigation found that GRA has introduced external price verification tools as part of ICUMS, among its other functions.”

Source: Myrepubliconline