The Ministry of Finance has said it is not to blame for the National Youth Employment Programme (NYEP) overspending its budget by about 900%.
According to the 2013 Auditor General’s report, the then NYEP now Youth Employment Agency (YEA) spent close to GHc200 million instead of its budgetary allocation of GHc20 million in 2012, without proper justification.
Payments to four companies including Zeera Group, Asontagba Cottage Industries, Ghana Management Services and Craft Pro as well as allowances to some NYEP beneficiaries account for the over-expenditure.
But responding to questions at the Public accounts committee, Deputy Minister of Finance, Cassiel Ato Forson said the ministry released the monies to prevent the cancellation of already signed contracts which could have cost the country more in judgment debts.
He explained that the Ministry of Youth and Sports had contracted some companies for some projects “and they were asking the Ministry of Finance to make a payment.”
“At that point the Ministry of Finance looked at the implications as to failure on the part of the Ministry, what it will mean for the overall fiscal management. It was then agreed that there are clauses in there that adds additional cost to the state by a pineal rate and a possibility of a judgment debt issues and others. For that matter the Ministry had two options; failure to pay or wait until 2013 and make proper budget allocation
for them and then pay that over the next year. That will actually mean that we would have to make provision for additional cost outside the total
Ato Forson told the PAC that because the Finance Ministry at the time was operating a centralized vault, which was available to the sector minister, “he [Finance Minister] decided to allocate part of the centralized vaults that is available to the Ministry of Finance to the Ministry of Youth and Sports for the purposes of paying for those expenditures. At the end of the day, we did not exceed the appropriations, the appropriations were intact.”
“The re-allocation only happened when we moved money from the centralized vaults to the Ministry of Youth Employment for the purposes of paying for this debt. Therefore the Ministry made a payment of GHc199 million to the Ministry of Youth Employment. It is also important that I state that every single request the Ministry of Finance received came from the Ministry of Youth and Sport, they were verified and payments were made at a point.”
The Deputy Minister further told the PAC that the Ministry relied on section 21(1) of the Financial Administration Act to initiate such processes.
He mentioned some of the companies that benefited from the payments to include: “Zeera Group of companies, we have beneficiary allowances for all NYEP, we have a company called Ghana management services, Craft Pro limited and Asontagba cottage industries.”
Meanwhile, a member of the public Accounts Committee and MP for Atiwa East, Abena Osei Asare insisted that the budget overran was as a result of reckless judgment on the part of the Ministry of Finance.
The Ghana Youth and Entrepreneurial Development Agency (GYEEDA), which was a public initiative targeted at youth development however failed to achieve its purpose as it was characterized by shady deals and corrupt activities.
Following reports of mismanagement of state funds, government in 2012 ordered for an investigation into activities of GYEEDA and subsequently terminated the contracts with the various companies. Former GYEEDA boss, Abuga Pele and Philip Assibit were later hauled before court for the various roles they played in the programme.
The name was subsequently changed from GYEEDA to NYEP and later to YEA.