The Electricity Company of Ghana (ECG), according to the Auditor-General’s report for 2021, single-sourced goods worth several millions of US dollars and Ghana cedis, as well as thousands of pounds and euros without seeking approval from the Public Procurement Authority (PPA).
“We reviewed a sample of eighty (80) foreign and local orders for goods and noted that a total amount of US$33,864,855.98, €945,742.17, GB£729,161.38 and GH¢5,373,100.00, respectively, were procured under single-source without the approval of Public Procurement Authority (PPA)”, the A-G said, adding: “We further advised the management to seek approval from Public Procurement Authority whenever single source methods are to be used and justify the reasons”.
The Auditor-General added: “We noted during our procurement audit that the annual procurement plan of ECG was not prepared and reviewed quarterly or periodically to conform to the available budget allocations for the Company”.
Also, “the Entity Tender Committee should ensure that the annual procurement plan of the Company is prepared and reviewed periodically, at least quarterly to conform to the availability of funds and prioritising the procurement needs to the budgetary allocations”.
Read below other relevant findings from the A-G’s Department:
We noted that management did not withhold taxes on payments relating to goods and services procured from 30 suppliers, resulting in tax loss totaling US$73,918.88, €5,524.32 and GH¢29,243.28. We recommended that, Management should pay the tax amount of US$73,918.88, €5,524.32 and GH¢29,243.28, to the Commissioner of Ghana Revenue Authority (GRA) and recover same from the payees and furnish our office with the receipts for verification.
Management delayed in remitting a total amount of GH¢12,069,302.12 being taxes withheld from payments for goods, services, works during the 2019 financial year.
We urged Management to always ensure that taxes withheld are remitted to the Commissioner General of GRA promptly to avoid sanctions and delay of inflows into the Consolidated Fund.
Our review of the payroll disclosed that payments in respect of PAYE deductions for January and February 2019 amounting to GH¢10,075,056.86 were paid on 2nd January 2020 instead of 15th February and 15th March 2019 respectively.
We advised Management to ensure proper supervision of schedule officers responsible for statutory payments to ensure that, liabilities are paid as and when they fall due and within the timelines as stipulated by the tax laws to avoid payments of penalties.
Management of ECG over spent their approved expenditure budget for the 2019 fiscal year by GH¢1,824,639,713.30.
We urged Management to desist from such practices in future to promote efficient and effective budgetary control system. 34. We noted, during our review of the Bank Reconciliation Statements for ECG Shipping Account No 1441000303335 with EcoBank and ECG Materials Account No 1081130000901 with GCB Ltd that total credits of GH¢11,360,602.40 and GH¢10,781,687.57, respectively were not investigated and reported to the appropriate Banks for remedial actions to be affected.
This brings the total outstanding credits in the two (2) Bank Accounts to GH¢22,142,289.97.
We urged Management to ensure that the Mangers of the two Banks are immediately contacted to resolve this anomaly for our inspection.
We noted in our review of Bank Reconciliation Statement for the period under review that, the reconciliation statements prepared for the period between July-December 2019 on ECG’s Shipping Account with Ecobank, disclosed a total wrong debit amounting to GH¢4,810,835.56. We urged Management to ensure that the Mangers of the two Banks are immediately contacted to resolve this anomaly for our inspection.
ECG ordered goods from outside Ghana totaling US$6,671,100.00 in 2018 and 2019. These goods were supplied by the foreign manufacturers and shipped directly to ECG in 2019. However, our comparison of the order prices with the Manufacturing prices disclosed that ECG incurred extra cost of US$2,861,793.00 in dealing with the local suppliers instead of engaging the manufacturers directly. We recommended that ECG should deal with foreign Manufacturers directly as much as possible to achieve value for money unless the items are produced by local suppliers.
