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Audit Report Caught AG ‘Red-Handed’ with GHc67m judgement debt

The office of the Attorney General’s Department (AG) has come under severe scrutiny for paying a judgement debt of over GHS67 million to Construction Pioneers, a firm in construction without Cabinet’s approval.

The Auditors General in its Report covering the year 2016 on Ministries, Departments and Agencies (MDA’s ) caught the AG ‘Red Handed’ for paying approximately GH¢67,380,718.201017, to CP firm without cabinet approval.

The heading of the Audit Report titled, “Failure to seek cabinet approval before paying judgement debt of GH¢67,380,718.20 1017,” stated that, “a review of the bank statement of the Ministry disclosed that a payment of GHc67,380,718.20 (direct debit) was made to Construction Pioneers as judgement debt on behalf of the state without any reference to Cabinet.”

“The Ministry could not provide any documentation with regards to the Court Judgement. Management’s failure to investigate the cause of the direct debit for appropriate action resulted in the anomaly. We recommended that all payment above the threshold be referred to cabinet for approval. Management should also obtain the court judgement and all relevant documents to authenticate the payment,” theAudit Report read.

The payment were made in two trenches. On February 20, 2015 the Attorney General paid Construction Pioneers an amount of. GHS 42,820,418.48 and on April 1, 2015 ,Construction Pioneers was again paid GHS 24,560,299.72 , making a total GHS67,380,718.20 .

This, the Auditor General faulted the Ministry for paying such amount of money without any form of documentation with regards to the Court Judgement.

According to th Auditor Report, “the Ministry of Finance Budget Implementation Instructions 3.8 state that, Judgement Debt Payment pose a significant risk to effective budget implementation.

It added that, as part of measures to implement the new guidelines issued by government to ensure sanity in the payment of Judgement Debt and settled claims, all Judgement Debt claims exceeding GH¢10,000,000.00 should be submitted to cabinet for approval prior to final settlement and payment.

“The Attorney-General may however, authorise settlement of claims up to the upper limit of GH¢10,000,000 and that MDAs which incur Judgement Debt by their action or inaction will bear the full cost of servicing these debts from their approved budget,” the Report further cited..

This was discovered when the Ministry of Justice and Attorney General took its turn at the Public Accounts Committee sitting this week on Tuesday March12, 2019.

Even though the Attorney General and Minister of Justice, Ms Gloria Akufo, who led the team, defended the Ministry action and tended in a Cabinet’s Decision Note authorizing the said payments, members of the Public Accounts Committee said, they were not impressed.

“This happened because of the non availability of documents at the time of the Audit. The decision note of Cabinet was received at our office on about 4th August 2013. So, yes it has been received but perhaps it was not readily available. Perhaps it goes to record keeping because we have different registries and so it is very difficult to track.”

“We have tried to overcome that using the computers now to record the mails that come [in] so that it becomes easier for us to trace these documents. I do apologize because I think perhaps at the time, when the exercise was carried out, if this document was available then perhaps the queries wouldn’t have arisen,” theAttorney General defended.

Nevertheless, the Committee advised that all payment above the GHc10 million threshold be referred to Cabinet for approval and that management should also obtain the court judgement and all relevant documents to authenticate the payment.

Dr James Klutse Avedzi, stressed the need for reduction of debt as well as taking into consideration to the root causes, so the nation do not unnecessarily plunge into debts ship.

Beside the non cabinet approval judgement debt, the Registrar-General’s Department was also taken on for some financial irregularities on its procurement of stationery.

The Audit report quoted that, “Section 21(5) of the Public Procurement Act, 2003, (Act 663) states that, a procurement entity shall not divide a procurement order into parts or lower the value of a procurement order to avoid the application of the procedures in the public procurement Act.

“The review of procurement procedures disclosed that, the department made fragmented procurement of stationery, amounting to GH¢478,143.21. This could lead to uncompetitive prices and loss of discount on bulk purchases,” the Auditor General’s report stated.

The Committee, therefore, recommended that management should strictly adhere to the provisions in the Procurement Act.

The department apologized for the infraction, but not without the condemnation of Committee Chairman, James Avedze Klutse.

The Attorney General again apologized and explained that, “it was due to the circumstances at that time. We didn’t have enough resources to take care of everything at a go. We needed to break it up in order to pay for it. We didn’t have much at that time in our accounts. We sincerely apologize for that and we have taken the recommendation to strictly adhere to the provisions of the Act.”

The Committee continue sitting on Wednesday to scrutinize other MDAs on their financial performance management.

Source: therepublicnewsotherepublicnewsonline.com/Felix Nyaaba

 

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