Mission Statement - Ghana Audit Service

Transcription

Mission
Statement
The Ghana Audit Service exists
To promote
·
good governance in the areas of transparency,
accountability and probity in the public financial
management system of Ghana
By auditing
·
to recognized international auditing standards the
management of public resources
And
·
reporting to Parliament
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TRANSMITTAL LETTER
Ref. No.: AG.01/109/Vol.2/41
Office of the Auditor-General
Ministries Block ‘O’
P. O. Box MB 96
Accra
Tel.: (0302) 662493
Fax: (0302) 675496
2 August 2011
Dear Madam Speaker,
REPORT OF THE AUDITOR-GENERAL ON THE
PUBLIC ACCOUNTS OF GHANA – PUBLIC BOARDS,
CORPORATIONS AND OTHER STATUTORY
INSTITUTIONS FOR THE PERIOD ENDED
31 DECEMBER 2009
I am pleased to forward my annual report to you on the Public
Accounts of Ghana – Public Boards and Corporations to be tabled in
the House in pursuant to Article 187(5) of the 1992 Constitution of the
Republic of Ghana.
2.
The report is in three parts. Part I provides overall summary of
significant findings and recommendations. Part II gives summary of
findings and recommendations according to each Sector Ministry,
while Part III provides details of my findings.
3.
Madam Speaker, my office scrutinises public spending on
behalf of Parliament and therefore encouraging proper and prudent
stewardship of the public purse by Public Boards and Corporations
continues to be my priority. Encouraging accountability, improved
public services and high standard of financial management continues
to be my objective and I hope that the time will soon come when all
i
Report of the Auditor-General on the Public Accounts of Ghana – Public Boards, Corporations and Other
Statutory Institutions for the period ended 31 December 2009
public servants will spend resources with the same care exhibited in
spending their own funds. Accordingly, the greatest professional
satisfaction for me is not only the disclosure of errors, waste and
losses, but also the evidence of Public Boards and Corporations
willingness to correct unsatisfactory situations.
4.
Madam Speaker, I look forward to serving Parliament by
conducting independent and high quality audits on all the statutory
accounts. To this end, I once again wish to renew my appeal for the
support of Parliament in creating an enabling environment for the
Audit Service to achieve its mission and vision.
Acknowledgement
5.
I am grateful to the contracted audit firms and my staff in the
execution of the annual audit and for their assistance in preparing this
report.
6.
I also appreciate the co-operation and support of Chief
Executives, Chief Finance Officers and their staff during the conduct
of audits.
7.
Finally, I want to acknowledge the noteworthy contributions of
Public Accounts Committee to good governance and prudent
stewardship by reviewing my reports and reinforcing
recommendations to the Public Boards and Corporations for better
financial management.
Yours sincerely,
AUDITOR-GENERAL
THE RT. HON. SPEAKER
OFFICE OF PARLIAMENT
PARLIAMENT HOUSE, ACCRA
ii
Statutory Institutions for the period ended 31 December
Contributors
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KPMG
Eddie Nikoi Accounting Consultancy
Egala, Atitso & Associates
State Enterprises Audit Corporation
At-Ernest Dawlah
PricewaterhouseCoopers
Ernst & Young
Osei Kwabena & Associates
Pannel Kerr Forster
Adds Consult
Asamoah Bonsu & Co.
Nii Quaye-Mensah & Associates
Opoku Andoh & Co.
Benning, Anang & Partners
Morrison & Associates
Asafo-Adjaye & Partners
Kuffour & Associates
Deloitte & Touche
Tetteh Addico & Co.
Darko, Sarpong & Co.
Osei Owusu-Ansah & Associates
James Quagraine & Co.
Sammy Tsahey & Associates
Asante Wiredu & Associates
Veritax Associates
Ayew Agyeman Turkson & Co.
John Kay & Co.
Ahima-Adonteng & Associates
iii
Statutory Institutions for the period ended 31 December 2009
CORPORATIONS AND OTHER STATUTORY
INSTITUTIONS FOR THE PERIOD ENDED
31 DECEMBER 2009
TABLE OF CONTENTS
Transmittal letter
Contributors
Introduction
Para
Page(s)
1–4
i – ii
iii
1
5 – 20
2–6
21-26
7-8
27-93
9-25
94-115
116-123
124-135
136-142
143-155
156-172
26-29
29-31
31-34
34-36
36-38
39-41
173-178
179-194
42-43
44-46
PART I
Summary of significant findings and
recommendations
Audit opinion
PART II
Summary of findings and recommendations
by Ministries
PART III
MINISTRY OF ENERGY
1.
Tema Oil Refinery
2.
National Electrification Project
3.
Ghana National Petroleum Corporation
4.
Volta River Authority
5.
Energy Commission
6.
Public Utilities Regulatory Commission
(PURC)
7.
Electricity Company of Ghana Limited
8.
Bui Power Authority
Report of the Auditor-General on the Public Accounts of Ghana – Public Boards, Corporations and
Other Statutory Institutions for the period ended 31 December 2009
9.
Bulk Storage & Transportation
Company Limited
195-226
MINISTRY OF FINANCE AND ECONOMIC
PLANNING (MoFEP)
10.
Students’ Loan Trust Fund
227-244
11.
Ghana Cocoa Board
245-272
12.
MoFEP – EFID’s Grant 2006-9
273-282
13.
National Insurance Commission
283-294
14.
Securities and Exchange Commission
295-306
15.
National Lottery Authority
307-316
16.
Bedrock Venture Capital Finance
317-333
Company Limited
17.
Public Procurement Authority
334-342
18.
Cocoa Marketing Company Limited
343-366
19.
Venture Capital Trust Fund
367-375
20.
Revenue Agencies Governing Board
376-390
(RAGB)
21.
Internal Audit Agency
391-413
22.
Economic Management Capacity
Building Project
414-420
47-53
53 – 57
57 – 62
62 – 64
65 – 66
67 – 69
69 – 71
71 – 75
75 – 77
77 – 81
81-83
84 – 86
86 - 90
90 – 92
MINISTRY OF EDUCATION
23.
24.
25.
26.
27.
28.
29.
30.
31.
Education Sector Project (ESSEP)
Ghana Institute of Management and
Public Administration (GIMPA)
University of Cape Coast
Management Development and
Productivity Institute (MDPI)
Ghana Education Trust Fund
University of Winneba
University of Ghana Business School
National Board for Professional
and Technician Examinations
Ghana Academy of Arts and Sciences
421-428
429-443
92 – 94
94 – 96
444-455
456-468
97 – 99
100 – 102
469-477
478-490
491-502
503-509
102 - 104
104 – 107
107 – 110
110 – 112
510-522
112 – 114
32.
33.
34.
35.
Hotels, Catering & Tourism (HOTCAT)
Institute of Professional Studies
Ghana Institute of Languages
Accra Polytechnic
523-541
542-568
569-612
613-623
114 – 118
118 - 123
123 - 129
130 – 131
MINISTRY OF WATER RESOURCES, WORKS AND
HOUSING
36.
37.
38.
39.
Ghana Water Company Limited
Water Resources Commission
Architectural and Engineering
Services Ltd.
Tema Development Corporation
MINISTRY OF HEALTH
40.
Ghana Aids Commission
41.
Nurses and Midwives Council
42.
Pharmacy Council
43.
Medical and Dental Council
624 – 637
638 – 651
132 – 135
135 – 137
652 – 682
693 – 698
138 – 142
142 – 146
699 – 710
711 – 721
722 – 740
741 – 752
146 – 149
149 – 151
152 - 155
155 – 158
MINISTRY OF ENVIRONMENT, SCIENCE AND
TECHNOLOGY
44.
45.
46.
47.
48.
49.
50.
51.
52.
53.
Water Research Institute (CSIR)
Institute of Industrial Research (IIR)
Root and Tuber Crops Project
Animal Research Institute
Building and Road Research Institute
Environmental Protection Agency
National Environment Fund
Science and Technology Policy
Research Institute (CSIR)
Plant Genetic Resources Research
Institute (CSIR)
Food Research Institute (CSIR)
753 – 761
762 – 778
779 – 790
791 – 806
807 – 816
817 – 834
835 – 844
845 – 857
158 – 160
160 – 163
163 – 165
166 – 169
169 – 171
171 – 174
175 - 176
177 – 179
858 – 874
180 – 183
875 – 883
183 – 185
MINISTRY OF CHIEFTAINCY AND CULTURE
54.
55.
56.
57.
58.
Centre for National Culture
National Theatre of Ghana
Kwame Nkrumah Memorial Park
Du Bois Centre
National Commission on Culture
884 – 891
892 – 912
913 – 936
937 – 948
949 – 959
MINISTRY OF LANDS, FORESTRY AND MINES
59.
Land Administration Project (LAP)
960 – 967
60.
Minerals Commission – Inspectorate
968 – 976
Division
61.
Forestry Commission
977 – 1038
62.
Precious Minerals Marketing
Company Limited (PMMC)
1039 – 1048
185 – 187
187 – 191
191 – 195
195 – 198
198 – 200
200 – 202
203 – 205
205 – 217
217 – 219
WILDLIFE DIVISION SUPPORT PROJECT
63.
64.
65.
66.
Mole National Park
Kyabobo National Park
Ministry of Lands Forestry and
Mines
Wildlife Division Support Project
(Head Office)
1049 – 1057
1058 – 1063
219 – 221
221- 223
1064 – 1072
1073 - 1077
223 – 225
225 – 226
COMMUNITY FORESTRY MANAGEMENT PROJECT
67.
68.
69.
70.
71.
Ministry of Lands, forestry and
Mines
Wildfire Management Project of
the Forestry Commission
Minerals Commission Secretariat
Minerals Commission
Office of the Administrator of Stool
Lands
1078 – 1089
1090 – 1104
226 – 228
229 – 232
1105 – 1114
1115 – 1129
232 – 234
234 – 237
1130 – 1135
237 – 239
MINISTRY OF LOCAL GOVERNMENT AND RURAL
DEVELOPMENT
72.
Decentralisation Secretariat
1136 – 1146 239 – 241
73.
Accra Metropolitan Assembly
(AMA)
1147 – 1156 241 – 243
74.
Kumasi Metropolitan Assembly
(KMA)
1157 – 1166 244 – 246
75.
Tema Metropolitan Assembly
(TMA)
1167 – 1180 246 – 248
76.
Tamale Metropolitan Assembly
(TAMA)
1181 – 1192 248 – 250
MINISTRY OF TRADE AND INDUSTRIES
77.
Export Development and Investment 1193 – 1212
Fund (EDIF)
78.
Ghana Standards Board
1213 – 1227
79.
GIHOC Distilleries Company Limited 1228 – 1249
80.
Ghana Investment Promotion Centre 1250 – 1266
81.
Ghana Trade Fair Company Limited 1267 – 1280
82.
Ghana Export Promotion Council
1281 – 1293
MINISTRY OF COMMUNICATION
83.
National Communication Authority
84.
E-Ghana Project –
IDA Credit 4226-GH
MINISTRY OF INFORMATION
85.
Graphic Packaging Limited
86.
Ghana Publishing Company Limited
87.
New Times Corporation
88.
Graphic Communications Group
Limited
89.
Ghana News Agency
251 – 254
254 – 257
257 – 261
261 – 263
264 – 266
266 – 268
1294 – 1307
268 – 271
1308 – 1316
271 – 273
1317 – 1330
1331 – 1341
1342 – 1360
273 – 276
276 – 277
278 – 281
1361 – 1377
1378 – 1397
281 – 284
284 – 287
MINISTRY OF JUSTICE AND ATTORNEY-GENERAL
90.
General Legal Council
1398 – 1434
287 – 294
MINISTRY OF FOOD AND AGRICULTURE (MOFA)
91.
92.
Department of Crop Services
West Africa Agricultural
Productivity Programme (WAAPP)
Grains and Legumes Development
Board
Northern Rural Growth
Programme ADF
Directorate of Crop Services
93.
94.
95.
1435 – 1446
1447 – 1462
294 – 297
297 – 300
1463 – 1472
300 – 302
1473 – 1482
1483 – 1495
302 – 304
304 – 307
1496 – 1506
307 – 309
1507 – 1521
1522 – 1535
1536 – 1552
1553 – 1573
309 – 312
312 – 314
314 – 317
317 – 321
1574 – 1578
1579 – 1604
321 – 322
322 - 326
MINISTRY OF TOURISM
96.
Ghana Tourist Board
OTHER AGENCIES
97.
98.
99.
100.
101.
102.
State Enterprises Commission
Electoral Commission
National Population Council
National Media Commission
National Commission for Civic
Education
ICOUR Limited
CORPORATIONS AND OTHER STATUTORY INSTITUTIONS
FOR THE PERIOD ENDED 31 DECEMBER 2009
Introduction
The audit of the accounts of Public Boards, Corporations and
Other Statutory Institutions for the period ended 31 December 2009 has
been conducted in accordance with Article 187(2) of the 1992
Constitution of the Republic of Ghana.
2.
The objective of the audit is to express an opinion on the accounts
submitted to me by each Public Board, Corporation and Other Statutory
Institutions for my examination.
3.
I also evaluated the adequacy of the system of internal financial
controls, compliance with relevant legislations, stated accounting
policies and applicable financial rules and regulations of these
organisations.
4.
Matters raised in this report are among those which came to my
notice during the period ended 31 December 2009. The observations and
recommendations arising out of the audits were discussed with
management of the affected Institutions and comments received, where
appropriate, have been incorporated in this report. The report is in three
parts:
 Part I provides a summary of the significant audit findings and
recommendations;
 Part II provides the significant findings and recommendations
according to sector Ministries; and
 Part III deals with the details of findings and recommendations.
Report of the Auditor-General on the Public Accounts of Ghana (Public Boards, Corporations and other Statutory
Institutions.) for the period ended 31 December 2009
1
PART I
SUMMARY OF SIGNIFICANT FINDINGS AND
RECOMMENDATIONS
5.
Presented in Table 1 is the financial impact of these irregularities
according to their nature.
Table 1: Summary of financial irregularities for the period ended 31
December 2009.
Type of
Irregularities
No.
Outstanding
Debts/Loans/Recoverable
Charges
Cash Irregularities
Payroll Irregularities
Procurement
Irregularities
Tax Irregularities
Stores Irregularities
Contract Irregularities
Total
1
2
3
4
5
6
7
%
Amount
(US$)
Amount
(GH¢)
Total
Amount
(GH¢)
37.07
2,062,226
143,876,746 146,815,006
53.39
0.49
0.02
22,695
-
211,429,961 211,462,297
1,943,595
1,943,595
69,781
69,781
0.67
7.77
0.59
100.0
164,882
2,249,803
2,659,959
2,659,959
30,772,354 30,772,354
2,099,656
2,334,580
392,852,052 396,057,572
6.
Table 1 shows that the irregularities in monetary terms totalled
GH¢396,057,572 which included US$2,249,803 converted into cedis at
the prevailing exchange rate of GH¢1.4248 to the US$1 as at 31
December 2009.
2
Total
Sector Ministry
Min. of Energy
Min. of Finance
Min. of Education
Min. of Water Resources,
Works & Housing
Min. of Health
Min. of Environment,
Science & Technology
Min. of Chieftaincy &
Culture
Min. of Lands, Forestry &
Mines
Min. of Trade & Industry
Min. of Communication
Min. of Justice &
Attorney-General
Min. of Food &
Agriculture
Other Agencies
Payroll
Irregularities
GH¢
56,556
451,977
650,320
363,835
GH¢
205,671,005
45,149
463,028
46,090
Cash
69,781
6,149
2,659,959
Report of the Auditor-General on the Public Accounts of Ghana – Public Boards, Corporations
and Other Statutory Institutions for the period ended 31 December 2009
-
794,717
211,429,961
22,695
604,128
143,876,746
2,062,226
20,515
1,943,595
-
-
5,907
5,570
1,020
-
71,327
12,975
-
98,785
-
524,550
30,084
1,147,688
6,202
29,536
648,590
-
7,500
-
43,873
30,772,354
164,882
-
3
2,099,656
-
96,494
639
-
-
-
2,400,106
-
17,122,163
1,054,726
113,852
-
19,046
1,631
-
593
96,065
-
200
-
5,931
4,088
23,516
-
2,371
8,132
-
GH¢
147,327
1,855,196
9,378
291,636
US$
51,030
-
Contract
Irregularities
18,275
187,297
Stores
IrregulariTies
GH¢
30,523,689
152,211
-
Tax
Irregularities
GH¢
8,990
351,992
11,889
2,184,503
-
Procurement
Irregulari
ties
GH¢
69,781
-
21,597
20,000
US$
2,000
8,923
-
Irregularities
-
Outstanding
Debts/Loans/Recoverable Charges
GH¢
US$
124,121,451
1,107,981
1,000,000
185,481
14,599
-
Table 2: Summary of Financial Irregularities according to Sector Ministries
Outstanding debts/loans/recoverable charges – GH¢146,815,006
7.
These irregularities relate to loans and outstanding trade
debtors resulting from management not being proactive in transacting
business and not taking utmost care in granting credits. They also
arose as a result of management complete disregard for the purpose of
subventions, ineffective debt collection mechanism, dishonoured
cheques, non-maintenance of an effective debt and credit policy, nonreconciling of accounts to confirm debts, apathy of management
towards debt recovery and no clear guideline directives with regard to
accounting treatment of these debts.
8.
I recommend that management of Public Boards and
Corporations should be more proactive in transacting business and
take utmost care in granting credits. I also advise that management
should undertake periodic reconciliation of account balances and put
in place effective debt collection mechanism.
Cash irregularities – GH¢211,462,297
9.
Cash irregularities include misapplication of funds, nonretirement of imprest, embezzlement, non-payment of Internally
Generated Funds into Consolidated Fund, understatement of revenue
and unauthorised payments. These occurred as a result of lack of
proper internal checks and internal control weaknesses, lack of
managerial supervision over accounts section, failure of accountants
to supervise the work of cashiers, failure by management to put in
place measures which would ensure prompt retirement of imprest, no
effective system to monitor revenue, improper keeping of records in
the accounts department, lack of proper co-ordination among key
departments and management disregard of the provisions of the
Financial Administration Regulations (FAR).
10.
I recommend that management of Public Boards and
Corporations should enhance supervision over accounting staff,
strengthen their internal controls and ensure prompt retirement of
imprest. I also advise that management should adhere to the
4
provisions of the FAR and put in place an effective system to monitor
revenue.
Payroll irregularities – GH¢1,943,595
11.
These irregularities mostly relate to non-deletion of separated
staff after their termination dates, wrong computation of allowances
and payment of allowances without approval. This was due to
managements failure to supervise payrolls, lack of reconciliation
between payroll and general ledger sections, no effective supervision
in accounts department and delay in notifying Controller and
Accountant-General of separated staff coupled with inability of
Controller and Accountant-General to immediately comply with the
directive to delete names of separated staff.
12.
I recommend proper supervision of payrolls and accounts
department by management. I also recommend timely notification to
Controller and Accountant-General of names of separated staff for
early deletion.
Procurement irregularities – GH¢69,781
13.
Procurement irregularities consist mainly of sourcing of proforma invoices from the same supplier, single sourcing and nonadherence to the provisions of the Public Procurement Act, 2003 (Act
663). Lack of supervisory control over procurement accounted for
this.
14.
I therefore recommend that management of the respective
organisations should adhere strictly to the provisions of the Public
Procurement Act, 2003 (Act 663).
Tax irregularities – GH¢2,659,959
15.
These were caused by absence of adequate and effective
management supervision in ensuring timely remittance of taxes, lack
of communication between procurement department and supply
agencies and failure by finance officers to act in accordance with the
statutory tax laws. This resulted in non-deduction of withholding
5
taxes, non-deduction of taxes on allowances, failure to transact
business with VAT registered suppliers and failure to obtain VAT
invoices/receipts from suppliers.
16.
I recommend once again that accounts officers should be
sanctioned for non-deduction of withholding taxes and non-deduction
of taxes on allowances. I also recommend that management of
Institutions and finance officers should act in accordance with
statutory tax laws and transact business with only VAT registered
suppliers.
Stores irregularities – GH¢30,772,354
17.
These irregularities mostly comprised stock shortages,
pilfering, non-existent stocks included in schedules and not routing
items through stores. These came about due to ineffective supervision,
lack of internal checks, absence of qualified schedule officers and
absence of adequate and effective stock management system.
18.
I recommend proper supervision over store items. Management
should employ qualified schedule officers and should put in place
effective stock management system.
Contract irregularities – GH¢2,334,580
19.
These mainly relate to overpayment of contract sum, variations
of conditions of contract without following procedures, nonspecification of the mode of payment and deliveries in contract
agreements, failure to comply with tendering procedures, ineffective
control over contracts and no transparency in the disbursement of
funds and award of contracts.
20.
I therefore urge management to strengthen controls over
contracts and comply with tendering procedures. I also recommend
that responsible officials for the overpayment of contract sum be
surcharged with the difference.
6
AUDIT OPINION
21.
Out of 103 Institutions audited, 100 submitted their accounts
for validation. The accounts were prepared in accordance with
generally accepted accounting principles. My office was satisfied, in
all material respects that the audited financial statements complied
with Ghana Accounting Standards and the relevant legislations and in
my opinion they presented a true and fair view of the financial
position and performance of the Agencies.
Submission of accounts
22.
100 out of the 103 Public Boards, Corporations and Agencies
covered in 2009 submitted their financial statements for audit whilst
the remaining 3 failed to submit theirs for auditing as at the time of
reporting. Consequently, I am unable to report on the current status of
the 3 defaulting organisations to provide accountability assurance to
Parliament.
23.
Failure of the organisations to prepare their financial statements
also deprived stakeholders of effective financial planning and decision
making.
24.
Staff constraints, indifference attitudes towards the preparation
of financial statements and lack of adequate knowledge in basic
accounting principles by some Accounting Officers resulted in the late
or non-submission of the accounts to my office in violation of Section
54(2) of the Financial Administration Act (FAA), (Act 654). The lack
of concern shown by some Chief Executives towards the preparation
of the accounts caused such infractions.
25.
These problems indicate that there is room for Agencies to
improve upon their processes for preparing their financial statements
and annual reports. In particular, more attention needs to be given in
compliance with the submission deadline of 31 March.
26.
To enhance accountability and timely stewardship of public
funds as well as effective financial management, I reiterate that sector
Ministries should take remedial measures to ensure that Public
7
Boards, Corporations and statutory Institutions, as a matter of
urgency:
 fill the position of Heads of Account Units with personnel with
the requisite skill and experience;
 institute measures which would bridge the capacity gap of
accounts officers;
 resource their account departments to enable them clear the
backlog of outstanding accounts and submit them for audit by
31 December 2011;
 install computerised accounting software to accelerate the
production of financial statements for audit; and
 sanction any Chief Executive who fails to prepare and submit
for audit the organisation‟s financial statement by the 31 March
deadline.
8
PART II
SUMMARY OF FINDINGS AND
RECOMMENDATIONS
MINISTRY OF ENERGY
TEMA OIL REFINERY
27.
Due to lack of proper co-ordination among key departments of
the Company and apparent internal control weaknesses reconciliation
on Association of Oil Marketing Companies (AOMCs) accounts led to
total adjustment amounting to GH¢74,271,005.00 for third party
stock. We recommended that Management should ensure proper coordination between the departments especially commerce, sales and
finance departments. Also, regular reconciliation of third party stocks
with AOMC‟s should be carried out in order to account for stocks
appropriately.
28.
Despite restructuring of Ghana Commercial Bank overdraft
facility of GH¢124million into a long term loan, the Company
continued to pay finance cost on the overdraft amounting to
GH¢70million. We recommended to Management to request GCB to
transfer the amount of GH¢70million from overdraft account into a
loan account in accordance with the agreed terms in order to reduce
the finance cost the Company is incurring on the overdraft facility.
29.
We noted that certain stock items valued at GH¢30,523,689.00
by Management were not included in the stock schedule, defeating the
basis of their valuation. We recommended to Management to ensure
that there exist appropriate supporting schedules and reports for all
items of stock in their records.
30.
Our audit of cost of sales revealed an additional charge of
GH¢120million not related to sales for the period payable to five bulk
oil suppliers of finished products. We recommended that Management
should ensure that all entries made into cost of sales account are
9
properly accounted for in order to avoid over or under statement of
cost of sales figure.
31.
We noted adjustments amounting to GH¢11.4million entered in
the financial statements to reflect omission of certain transactions
related to demurrage some dating as far back as 2005. We
recommended that Management put in measures to monitor, track and
have records of all demurrage and possible demurrage charges from
suppliers of products and crude promptly.
ENERGY COMMISSION
32.
An amount of GH¢121,451.00 owed to National Petroleum
Authority remained outstanding and showed no movement between
2008 and 2009 because of delay to meet and reconcile their accounts
to confirm the debt. We recommended that a final reconciliation be
made as early as possible and the debt settled.
PUBLIC UTILITIES REGULATORY COMMISSION
33.
We noted that Property, Plant and Equipment valued at
GH¢109,059.00 had not been embossed as owned by the Commission.
We recommended that these be embossed with the Commission‟s
identification numbers in order to safeguard them from losses.
BUI POWER AUTHORITY
34.
Contrary to Section 7 of the BPA Act (2007) an amount of
GH¢52,626.00 was paid to Board members as allowances without
approval. We recommended that approval be sought for all allowances
paid in compliance with the requirements of the Act.
BULK OIL STORAGE AND TRANSPORTATION
COMPANY LIMITED
35.
Laxity in the implementation of tax laws resulted in nondeduction of withholding tax of GH¢8,989.77 from some payments
10
made by the Company. Management was advised to comply with the
provision as stipulated in the IRS Act 592.
36.
Due to irregular product quantity reconciliations between the
Accounts and Sales and Marketing Departments quantities of products
sold to Chase Petroleum during the year as recorded by the Sales and
Marketing Departments were not the same quantities used by the
Accounts Department to determine the BOST margin for the same
products. We recommended regular product quantity reconciliations
between the Accounts and Sales and Marketing Departments.
Supervisory controls should be strengthened at the Depots to improve
upon the accuracy of information provided to these Departments.
37.
Due to ineffective supervision over construction of pipelines
two invoices amounting to GH¢31,114,369.00 were paid by the
financing banks without their certification by Management. We
recommended that BOST should agree with the Banks and the
contractor to honour only invoices certified by BOST.
MINISTRY OF FINANCE AND ECONOMIC PLANNING
GHANA COCOA BOARD
38.
We noted huge outstanding balances on staff Provident Fund –
GH¢174,139.00, SSF – GH¢277,837.00 and PAYE – GH¢351,991.00
not remitted to the relevant authorised agencies within the statutory
period. We recommended that management must institute effective
monitoring to avoid possible delays in remitting statutory deductions.
In the meantime, management should make all efforts to pay the
outstanding debts to the statutory bodies.
39.
We noted understatement of stock amounting to
GH¢152,210.91 due to errors in quantities and omissions at Cocoa
Clinic. We recommended that the stock valuation should be reviewed
and checked by a responsible officer to forestall the recurrence of
differences in future.
11
COCOA MARKETING COMPANY LIMITED
40.
We noted absence of documents to support ownership of plant
and equipment valued at GH¢376,204.00 procured on behalf of CMC
by COCOBOD. We recommended that efforts be made to have
COCOBOD transfer the original documents into the name of CMC.
41.
Due to irregular reconciliation between staff debtors general
ledger and the balance generated through periodic loan repayment
print-outs, we noted unexplained difference of GH¢1,015,040.00. We
recommended an immediate investigation and regular reconciliation
of the staff debtors account.
42.
We noted absence of supporting schedule for ex-staff debtors
amounting to GH¢66,738.00. We recommended to Management to
come out with a schedule to enable recovery to be made.
REVENUE AGENCIES GOVERNING BOARD (RAGB)
43.
Our review disclosed that two former staff owed the Board a
total amount of GH¢26,203.28 at the time of their separation in June
and August 2009. We recommended that Management pursue
recovery of the balance of GH¢26,203.28.
44.
Two former staff who owed the Board an amount of
GH¢29,497.64 as at the time of separation in June and August 2009
respectively refunded only GH¢3,294.36 in July 2010 leaving a
balance of GH¢26,203.28. We however noted that no effort was being
made to redeem the indebtedness. As this could lead to loss of the
Board‟s funds, we recommended that management pursue recovery of
the outstanding amount.
45.
Purchases amounting to GH¢252,647.21 were not routed
through stores for documentation to provide evidence of receipt and
approval of use in contravention of Chapters 0502 and 0601 of Stores
Regulations 1984.
For accountability, we recommended that
12
subsequent purchases be routed through stores before use in
compliance with the above stated regulations.
INTERNAL AUDIT AGENCY
46.
Contrary to Section 66 of the Public Procurement Act, 2003
(Act 663) the Internal Audit Agency awarded consultancy services to
two Consultants, Proweb Solutions and Price Waterhouse Coopers at
an amount of GH¢15,488.00 and GH¢40,817.00 respectively without
alternate quotations or an approval from the Public Procurement
Authority for sole sourcing. We recommended that the Agency
comply with relevant provisions in its procurement dealings in order
to obtain value for money.
47.
Management of Internal Audit Agency failed to furnish details
of disbursements of GH¢37,529.08 from Commonwealth Funds for
Technical Cooperation. We recommended that Management provide
the details for review.
MANAGEMENT DEVELOPMENT AND
PRODUCTIVITY INSTITUTE
48.
Due to the absence of regular reconciliation between General
Ledger balances and schedule totals we noted material differences
amounting to GH¢21,450.00. We recommended that the difference be
corrected and advised that there should be regular reconciliation
between the payroll and general ledger section of the accounts
department.
NATIONAL BOARD FOR PROFESSIONAL
AND TECHNICIAN EXAMINATIONS
49.
Due to failure to obtain a Police Report in violation of Chapter
1616 of Stores Regulation 1984, only GH¢900.00 out of GH¢2,147.97
incurred by the Board in repairing an official vehicle involved in an
13
accident was refunded by the alleged guilty driver, leaving an
outstanding balance of GH¢1,247.97 as at the time of reporting. We
recommended that in future police report should be obtained in all
accidents in order to apportion blame and assign responsibility of cost
recovery to persons found guilty. We also recommended that the
outstanding cost of repairs of GH¢1,247.97 be recovered from the
alleged guilty driver, otherwise the driver of the official vehicle as at
the time of the accident should be surcharged.
GHANA ACADEMY OF ARTS AND SCIENCES
50.
We noted an overpayment of GH¢2,949.15 in the arrears of the
special allowance paid in 2008. Management was advised to recover
the amount from the respective staff. We also advised responsible
officials to comply with directives, rules and regulations in the
performance of their duty; otherwise they would be surcharged
accordingly for any future losses.
HOTEL, CATERING AND TOURISM TRAINING
INSTITUTE (HOTCATT)
51.
Though HOTCATT had no mandate, we noted that Internally
Generated Funds (IGF) amounting to GH¢3,025.00 was retained and
used on operational expenses in contravention of FAR 17(b). We
recommended that management seek approval for the retention and
subsequent use of its IGF; otherwise the IGF should be paid into the
Consolidated Fund in compliance with FAR 17(b).
52.
Due to laxity in supervision, fuel totalling GH¢2,900.00
purchased during the review period was not recorded in the respective
vehicle log books contrary to Chapter 1604 of Stores Regulations
1984. We recommended that management put proper controls in place
to ensure that drivers properly account for fuel purchases.
14
INSTITUTE OF PROFESSIONAL STUDIES
53.
Due to lack of internal check, David Cleland Chinery, an
Accounts Officer could not account for Internally Generated Funds
(IGF) collections of GH¢40,254.00 out of which GH¢7,700.00 has
been refunded with the intervention of the Police. To safeguard the
Institute‟s scarce financial resources, we recommended that the
Finance Officer improves on internal checks in the accounts office and
management intensify efforts in pursuing the case with the Police for
recovery of the outstanding amount of GH¢32,554.00.
54.
Contrary to Section 30(2) of the FAA and Ministry of Finance
and Economic Planning‟s (MoFEP) directives, management procured
goods and services valued at GH¢77,079.90 from non-VAT registered
persons resulting in a loss of revenue of GH¢11,561.99 to the state.
We recommended that management ensure compliance with the above
stated regulations; otherwise the responsible officials would be
surcharged for any future losses.
55.
Items valued at GH¢44,334.76 were not routed through stores
before use because management failed to ensure adherence to Chapter
0523 of Stores Regulations 1984. As the absence of stores
documentation on the items could result in short supplies, pilfering
and fictitious purchases, we advised that all future procurements
should be routed through stores.
GHANA INSTITUTE OF LANGUAGES
56.
Contrary to FAR 171(b), though GIL was migrated onto the
payroll of the Controller & Accountant General, yet it received
personnel emolument grants totalling GH¢625,639.20 from National
Council for Tertiary Education which was misapplied to meet other
operational activities and staff loans without approval from the
Minister of Finance and Economic Planning. We recommended that
management ensure the refund of the misapplied funds into the
Consolidated Fund without delay, failing which the amount should be
recovered from subsequent subventions released by NCTE and paid
immediately into the Consolidated Fund.
15
57.
Cash irregularities which included unpresented and unacquitted
payment vouchers as well as unaccounted for funds amounting to
GH¢99,926.06 and US$8,922.45 were noted. We recommended that
management ensure strict adherence to the relevant provisions of the
Financial Administration Act and Regulations and the strengthening
of internal controls over revenue collection and disbursement to
minimize the irregularities.
58.
Due to ineffective monitoring and granting of further loans to
defaulters, only GH¢3,924.00 representing 2.6% out of
GH¢148,703.62 loans granted to staff in Accra and Kumasi offices
had been recovered as at the time of reporting, resulting in a balance
of GH¢144,779.62 or 97.4% yet to be refunded. We also noted that
GH¢40,909.82 out of the total loans granted were not recorded in the
respective staff ledgers. We advised management to ensure that staff
loan ledgers are updated and strenuous efforts made to recover the
outstanding balance as early as possible.
59.
As a result of poor internal control environment and lack of
internal audit reviews, fuel coupons purchased amounting to
GH¢5,031.00 were omitted from the fuel coupons register and
remained unaccounted for as at the time of reporting. We
recommended that the officer in-charge be made to account for the
fuel coupons. We also advised management to improve on internal
controls and make the internal audit more responsive to its
responsibilities to forestall any abuse.
60.
Due to lapses identified and discrepancies between the
financial statements and accounting records, we could not validate and
certify the Institute‟s financial statements for 2008 and 2009 presented
for audit. We recommended that proper books of account be kept and
the financial statements re-prepared and presented for audit as soon as
possible.
16
MINISTRY OF WATER RESOURCES, WORKS
AND HOUSING
GHANA WATER COMPANY LIMITED
61.
As a result of poor debt recovery system, advances to
contractors amounting to GH¢876,322.00 were still outstanding some
dating back to 2002. We recommended that the true status of the
balances be established and the amount involved recovered.
ARCHITECTURAL AND ENGINEERING
SERVICES LIMITED
62.
Contrary to Social Security and tax laws, the Company owed a
total outstanding amount of GH¢1,438,561.00 in 2009 in respect of
Social Security, PAYE and VAT. We urged strict compliance with all
statutory obligations in order not to attract penalties.
63.
The Company failed to remit rent deductions payable to
Government for 2008 and 2009 amounting to GH¢46,090.00. We
advised management to make efforts to settle the arrears.
TEMA DEVELOPMENT CORPORATION
64.
Management failed to furnish us with authority/approval letter
for some of the variations carried out on the new office building
amounting to GH¢905,969.00 and details of fluctuations totalling
GH¢72,905.00 were also not made available for audit scrutiny. We
requested Management to explain the variations and current
fluctuations.
MINISTRY OF HEALTH
NURSES AND MIDWIVES COUNCIL
65.
We noted that as at the time of reporting, after periods of 559
and 541 days of the contractual date and making payments of
17
GH¢99,555.75 respectively out of GH ¢110,617.50 for the purchase of
three vehicles, only two had been supplied. We recommended that
management should through MoH formally demand the immediate
delivery of the vehicle or abrogate the contract and recover the
advance payment from the supplier. We also advised that future
contract agreements should specify the mode of payment and
deliveries in order to apportion blame for defaults.
PHARMACY COUNCIL
66.
Due to poor internal control environment at the Kumasi
Regional Office, Seidu A. Pelpou, the former Regional Accountant
failed to account for IGF totalling GH¢18,275.00 out of
GH¢226,526.00 collected. We advised management to ensure that the
case, which is being investigated by the Police, is expedited for the
full recovery of state funds. Additionally, we recommended the
strengthening of internal controls in the regional office.
67.
Our payroll audit revealed that a former staff was paid
GH¢1,778.28 between November 2009 and January 2010 as unearned
salaries. We also observed that contrary to FAR 104(c), management
failed to recover an advance of GH¢7,600.00 granted her before her
resignation. Management was advised to recover the total amount of
GH¢9,378.28 and ensure that ex-employees‟ salaries are stopped
immediately after separation in conformity with FAR 297. We also
advised management to put in place measures which would ensure
recovery of advances granted to prevent a recurrence of the anomaly.
MEDICAL AND DENTAL COUNCIL
68.
Management transacted business totalling GH¢15,809.00 with
non-VAT registered suppliers in violation of Section 183(4) of the
FAR, 2004. As the anomaly resulted in the loss of GH¢2,371.35 tax
revenue accruing to the state, we advised management to transact
business with only VAT registered suppliers in order to contribute to
the revenue generation of the state.
18
69.
Due to the absence of a qualified officer handling the stores, we
noted that procurement transactions amounting to GH¢ 23,516.00
were omitted from the store ledgers, contrary to the provisions of the
relevant financial and stores regulations. We recommended to
management to train and assign an officer the responsibility of store
keeping.
MINISTRY OF ENVIRONMENT, SCIENCE
AND TECHNOLOGY
ANIMAL RESEARCH INSTITUTE
70.
Contrary to the Institute‟s policy on retirement of accountable
imprests within two weeks after transacting business, we noted
imprests totalling GH¢91,427.13 in the names of 44 staff at the end of
the year including deceased and retired staff. We recommended that
the unretired imprest either be recovered from the entitlement of the
deceased and retired staff or from the retired staff and from the next of
kin of the deceased. In addition, the Accountant must ensure that the
amount outstanding against the names of those in active service is
deducted. We also recommended a more effective monitoring of
imprests in accordance with the Institute‟s policy.
71.
Non-adherence to tax and SSNIT laws resulted in the
indebtedness of the Institute to the tune of GH¢292,973.14 regarding
statutory payments. We advised Management to settle the total
outstanding indebtedness of GH¢292,973.14.
NATIONAL THEATRE OF GHANA
72.
Cash irregularities such as unaccounted for revenue of
GH¢39,956.86 and unpresented payment vouchers amounting to
GH¢15,076.58 were noted. We recommended that the amount of
GH¢39,956.82 be accounted for and the payment vouchers located
and submitted for audit, failure of which the amount of GH¢55,033.44
should be recovered from the responsible officers.
19
73.
Management failed to deduct and remit to the Commissioner of
Internal Revenue Service withholding tax on GH¢164,816.26 paid as
overtime allowance to staff of the Theatre contrary Section 28 (1) (i)
(ii) of Internal Revenue Regulation. We recommended that
management comply with the above provision of the tax law in
subsequent payments or responsible officials would be surcharged
with future tax losses.
KWAME NKRUMAH MEMORIAL PARK
74.
Contrary to FAR 39(2c) the Accountant made payments
totalling GH¢39,073.54 for goods and services without supporting
documents for authentication. We recommended to management to
ensure that the relevant documents are obtained to substantiate the
payments; otherwise the amount should be recovered from the
Accountant and Approving Officer.
75.
Due to non-compliance with provisions of the Internal Revenue
Act, 2000 (Act 592) the Accountant failed to withhold tax totalling
GH¢1,512.36 on payments of various allowances to workers and for
goods and services supplied. Similarly, the Accountant failed to
deduct the required tax on personnel related allowances amounting to
GH¢27,698.21 paid. We recommended that the Accountant adhere to
the relevant IRS laws; otherwise he would in future be surcharged for
loss of state funds.
DU BOIS CENTRE
76.
Our review revealed that out of an amount of GH¢1,232.13
handed over by the former Accountant to the incumbent in November
2009 only GH¢549.00 was lodged into the Centre‟s account in
January 2010 resulting in an unaccounted balance of GH¢683.13. We
recommended that the outstanding balance of GH¢683.13 be
immediately accounted for by the current Accountant, otherwise the
amount should be recovered from him.
20
NATIONAL COMMISSION ON CULTURE
77.
Various items purchased worth GH¢3,846.82 did not pass
through store for documentation to facilitate an effective audit trail for
confirmation of receipt and use in violation of Chapter 0502 of Stores
Regulations 1984. To prevent diversion of goods and subsequent loss
of funds, we recommended that all future purchases be taken on ledger
charge before payments are effected.
78.
We noted that GH¢1,275.00 worth of fuel purchased and
allegedly issued to drivers was not recorded in the respective vehicle
log book to ensure judicious use. The omission, which was against
FAR 183, was as a result of ineffective supervision. Management was
advised to educate the drivers on the need for keeping proper
logbooks and improve upon supervision over the drivers.
FORESTRY COMMISSION
79.
We noted that seven timber contractors owed the Commission a
total amount of US$507,863.00 in respect of Annual Timber Right
Fees. We recommended that Management take the necessary action to
collect the accumulated unpaid annual right fees.
80.
Due to ineffective debt recovery system, Timber Contractors
and Negotiated Banks owed the Commission a total of
GH¢11,689,591.00 as at 31 December 2008. We recommended that
Management critically review the indebtedness of the contractors and
negotiated banks and make adequate provisions for doubtful balances.
Also management should improve upon its debt recovery system in
order to collect all outstanding debts.
GIHOC DISTILLERIES COMPANY LIMITED
81.
Due to poor management of cash, we noted write off of an
amount of GH¢610,851.00 including an alleged embezzlement of
21
funds totalling GH¢348,863.00 by some staff in 2008 as contained in
Special Investigation Report. We recommended that Management
restate the amount in the books until the police investigation is
completed. Management should also improve upon management of
cash.
GHANA EXPORT PROMOTION COUNCIL
82.
Contrary to FAR 15 and 18 only GH¢13,989.00 out of a total
revenue collection of GH¢17,776.00 for way bills and exporters
registration/ renewal fees was lodged into the Council‟s account due
to the absence of an effective system to monitor revenue collection
and lodgements. We recommended that the responsible official lodge
the outstanding amount of GH¢3,787.00 into the Council‟s account
and submit the pay-in-slip for audit scrutiny. We also recommended
that regular revenue collection and lodgement returns be generated by
the Accountant and reviewed by management.
83.
Contrary to Chapters 1604 and 1605 of the Stores Regulations
1984 and lack of supervision, drivers of five vehicles failed to record
the receipt of fuel, oil and lubricants totalling GH¢6,950.56 in the
respective vehicle log books. Consequently, monthly rate of fuel
consumption for the vehicles was not computed. As the omissions
made it difficult to ascertain the efficiency in the use of fuel, oil and
lubricants allocated to the vehicles, we recommended that the
Transport Officer step up supervision and ensure that drivers complied
with the stores regulations stated.
GHANA NEWS AGENCY
84.
In spite of recommendations made in our previous audit report
coupled with poor credit policies, total receivables for the year
reviewed amounted to GH¢475,422.66 out of which only
GH¢242,269.39 was collected leaving an outstanding amount of
GH¢233,153.27 or 49%. We reiterated that the Head of the business
22
unit should review the credit policy and map up effective debt
collection strategy to recover the outstanding amount.
85.
Due to inadequate segregation of duties and lax supervision, we
noted that cash irregularities which included unaccounted for revenue,
unacquitted and unpresented payment vouchers amounted to
GH¢32,535.75. Management was advised to enforce segregation of
duties and effectively supervise the work of delegated staff to ensure
strict compliance with relevant laws and regulations.
86.
Fuel issued to six drivers amounting to GH¢17,249.61was not
accounted for. The Accountant could also not account for
GH¢9,510.00 worth of fuel coupons. We therefore recommended that
the drivers and Accountant produce evidence of the use of the fuel in
furtherance of the Agency‟s programmes, failing which the amount of
GH¢17,249.61 and GH¢9,510.00 should respectively be recovered
from them.
We also advised management to strengthen its
supervisory role.
87.
Purchases amounting to GH¢5,930.81 were not routed through
stores in contravention of Chapters 0502 and 0601 of Stores
Regulation 1984. As this could facilitate diversion and /or non
procurement of stores, we recommended that all future purchases be
routed through stores before use.
MINISTRY OF JUSTICE
GENERAL LEGAL COUNCIL
88.
We noted cash irregularities including direct disbursement of
collection, unaccounted for revenue, misapplication of funds,
unpresented payment vouchers and unretired imprests amounting to
GH¢1,109,015.40, £6,970.00 and US$6,202.00. We recommended
that the unaccounted revenue be accounted for and the misapplied
funds paid directly into the Consolidated Fund immediately in the
absence of an approval for retention and use of IGF. We also
recommended that the outstanding payment vouchers be submitted for
23
scrutiny, otherwise the amount should be recovered from the paying
officer. In relation to the unretired imprest we recommended that
these be retired or the amount involved adjusted to the personal
account of the officers concerned in compliance with FAR 288(1).
89.
The Accountant of the GLC failed to obtain VAT invoices/
receipts for payments which included a VAT charge of
GH¢12,974.71. For proper accountability of the tax, we recommended
that management ensure that the suppliers involved either issue the
appropriate invoices/ receipts or refund the VAT charged into the
School‟s account without delay.
OTHER AGENCIES
NATIONAL POPULATION COUNCIL
90.
In contravention of FAR 297(1) our payroll audit disclosed that
unearned salaries totalling GH¢20,515.45 were paid into the bank
accounts of ten former members of staff between March 2008 and
June 2009. We recommended that management request the respective
banks to transfer the amounts into the Consolidated Fund if not
withdrawn, otherwise the unearned salaries recovered from the former
employees and this office informed accordingly. We also advised
management to immediately notify C&AGD of any separated staff in
future for prompt deletion from the payroll.
NATIONAL MEDIA COMMISSION (NMC)
91.
Contrary to Section 84(1) of the Internal Revenue Act, 2000
(Act 592), management failed to deduct income tax from staff
allowances totalling GH¢16,200.00. Additionally, 15% tax of
GH¢6,148.5 was not withheld from consultancy payments amounting
to GH¢40,989.94. We recommended that the taxes be recovered and
remitted to Internal Revenue Service (IRS) to avoid sanctions. We
also recommended that management adhere to provisions of the tax
law in subsequent payments.
24
92.
In accordance with Section 18(3) of the National Media
Commission Act, 1993, management in January 2002 submitted to the
Public Services Commission (PSC) for approval draft terms and
conditions of Service for employees of the Commission; however, the
document was yet to receive endorsement as at the close of our audit
in June 2010, eight years after the submission. We recommended that
management submit an up-dated document to the PSC and pursue its
approval in order to facilitate operational efficiency.
NATIONAL COMMISSION FOR CIVIC EDUCATION
93.
In contravention of FAR 1(4), the former Regional Director
and the Programme Officer failed to hand-over all financial records on
UNICEF and UNESCO funds amounting to GH¢126,270.00 for child
right programmes for the period reviewed. As a result, we could not
substantiate transactions totalling GH¢18,785.00 out of the amount
receipted. We recommended that the former officers either account for
the grants or be held liable for a refund. We recommended also that
management ensure that employees handed-over financial and
accounting records as well as assets of the Office in accordance with
the FAR when relieved of their duties.
25
PART III
DETAILS OF FINDINGS AND RECOMMENDATIONS
MINISTRY OF ENERGY
TEMA OIL REFINERY
Introduction
94.
This report relates to the management issues of Tema Oil
Refinery (TOR) for the year ended 31 December 2008.
MANAGEMENT ISSUES
Going concern
95.
Tema Oil Refinery (GH) Limited has over the years been
making losses and the loss of GH¢395 million in the 2008 financial
year resulted in an overdrawn Income Surplus position of GH¢535
million.
96.
An analysis of the balance sheet reveals that the company‟s
current liabilities exceeds its current assets by GH¢709 million and its
net assets have reduced from GH¢68 million as at year end 2007 to a
net liability position of GH¢463 million as at year end 2008.
97.
The above-mentioned state of affairs means the company
cannot settle all its liabilities in its normal operations without support
from its shareholders, rises serious concerns regarding the company as
a going concern. We have received a letter of support from the
Government of Ghana reconfirming government‟s commitment in
ensuring that TOR remains a viable company.
Handling of third party stocks – GH¢74,271,005
98.
Our review of the reconciliation on Association of Oil
Marketing Companies (AOMC) accounts highlighted certain
adjustments amounting to GH¢23,271,780 passed into cost of sales
26
accounts as a result of errors made in accounting for third party stock.
An example was the sale of finished product brought in by Fraga Oil
which was meant to be sold to the mines (accompanied by a letter
from NPA to that effect). TOR however, sold the products locally and
this resulted in additional payments of GH¢2,183,303 by TOR to
Fraga Oil. Other errors on third party stocks brought in by Cirrus Oil,
Vitol S.A, Chase Petroleum among others also led to adjustment of
GH¢48,815,922 into the cost of sales accounts.
99.
The net results of the above led to a restatement of the
comparative information (2007) of 2008 financials since some of the
errors detected date back to 2005 and 2006.
100. This implies that the number of errors highlighted in
reconciling AOMCs balances clearly gives an indication of lack of
proper co-ordination among the key departments of the company and
apparent internal control weaknesses.
101. We recommended that Management ensure proper coordination
between the departments especially between commerce, sales and
finance departments. Also, regular reconciliation of third party stocks
with AOMCs should be carried out in order to account for stocks
appropriately.
Overdraft restructuring – GH¢124 million
102. Our enquiries from management revealed that during the 2008
financial year, Ghana Commercial Bank (GCB) restructured an
amount of GH¢124 million of the overdraft liability of the company
into a long term loan.
103. Consequently, the objective of reducing the company‟s finance
cost is defeated if the company keeps paying finance cost on the
overdraft amount it has restructured.
104. We recommended to Management to request GCB to transfer
an amount of GH¢70 million from the overdraft account into a loan
27
account in accordance with the agreed terms in order to reduce the
finance costs the company is incurring on the overdraft liability.
105. Management responded that the purported GH¢70 million loan
from GCB did not materialise. The only amount received to
restructure the overdraft at GCB was GH¢54 million from Barclays
Bank and this was accordingly recorded as a loan in the books.
Stock
106. Our review disclosed that certain items were non-existent at the
year-end but were included in the schedule. Management was unable
to furnish us with stock listing with the respective unit prices for the
items included in the list below:
Item
Maintenance Materials
Chemicals
Miscellaneous
Goods Received not invoiced
Total
Amount
GH¢
25,352,934
2,568,611
598,355
2,003,789
30,523,689
107. As a result, the financial statements might be distorted by errors
in the stock value.
108. We recommended to Management to ensure that there exist
appropriate supporting schedules and reports for all items of stock in
their records.
Cost of sales adjustments – GH¢120 million
109. Our review of cost of sales revealed an additional charge of
GH¢120 million not related to sales during the period. This was as a
result of adjusted entries passed to correct a liability gap of GH¢120
million against the company payable to bulk oil suppliers of finished
products namely: Cirrus, Bulkship, Vitol, Chase, and ADDAX.
28
110. As such, the cost of sales account had certain unsupported
entries and this may be over or under stated.
111. We recommended that management ensure that all entries
made into the cost of sales account are accounted for properly.
Demurrage charges – GH¢11.4 million
112. In the conduct of our audit, we noted adjustments amounting to
GH¢11.4 million entered in the financial statements to reflect
omission of certain transactions related to demurrage.
113. The demurrage charges for the supply of finished products
were mainly from Vitol with omissions dating as far back as 2005,
2006, and 2009. An outstanding amount of US$4.5 million relating to
the period between 2006 and 2008 is yet to be agreed upon by TOR
and VITOL.
114. We were therefore of the view that management had no
measures in place to monitor and track demurrage charges in the
financial statements. Omission of the demurrage charges in the cost
of sales account for all the periods mentioned above means they were
distorted.
115. We recommended that Management put in measures to
monitor, track, and have records of all demurrage and possible
demurrage charges from suppliers, products and crude.
NATIONAL ELECTRIFICATION PROJECT
Introduction
116. This report relates to the audited accounts of the Ministry of
Energy‟s National Electrification Project for the year ended 31
December 2006.
29
Operational results
117. The Project incurred an operating deficit of ¢0.29 billion in
2006 compared with a surplus of ¢2.44 billion in 2005 representing a
decrease of 111.9%. Presented in Table 1 are the performance
indicators.
Table 1: Income and expenditure statement for 2006
Income
Grants
Other Grants
Total Income
Expenditure
Direct Project Expenses
Administrative & General
Expenses
Total Expenditure
Surplus/(Deficit)
2006
¢’Billion
11.22
158.75
169.97
2005
¢’Billion
24.91
13.09
38.00
%
Change
(55.0)
1,112.8
347.3
166.14
4.12
33.60
1.96
394.5
110.2
170.26
(0.29)
35.56
2.44
378.8
(111.9)
118. Total Income increased by 347.3% from ¢38.00 billion in 2005
to ¢169.97 billion in 2006. The increase was mainly attributed to
1,112.8% increase in Other Grants. This includes HIPC, SIML and
MDRI funds.
119. Total Expenditure also increased to ¢170.26 billion in 2006
from ¢35.56 billion in 2005, a rise of 378.8%. This was as a result of
394.5% increase in Direct Project Expenses mainly attributed to a
significant increase in payments made to contractors..
Financial position
Table 2 presents the financial position of the Project as at 31
December 2006
30
120.
Table 2: Financial position as at 31 December 2006
Income
Fixed Assets
Current Assets
Current Liabilities
Net Assets
Current Ratio
2006
¢’Billion
0.20
7.77
11.74
(3.77)
0.7:1
2005
¢’Billion
0.40
7.62
11.55
(3.53)
0.7:1
%
Change
(50.0)
2.0
1.6
6.8
121. Fixed Assets, which stood at ¢0.40 billion in 2005 decreased by
50.0% to ¢0.20 billion in 2006. The decrease was due to depreciation
charges.
122. Current Assets increased marginally from ¢7.62 billion in 2005
to ¢7.77 billion in 2006, representing an increase of 2.0% as a result of
an increase in bank and cash balance.
123. Current Liabilities also rose marginally from ¢11.55 billion in
2005 to ¢11.74 billion in 2006, representing an increase of 1.6% thus
registering an unfavourable liquidity position as indicated by a current
ratio of 0.7:1 (2005:0.7:1).
GHANA NATIONAL PETROLEUM CORPORATION
Introduction
124. This report relates to the audited accounts of the Ghana
National Petroleum Corporation (GNPC) for the year ended 31
December 2009.
Operational results
125.
Presented in the table 3 are the performance details:
31
2009
GH¢
2,181,680
Income
Sales Revenue
Cost of Sales
Non-Trading Income
Total Income
2008
GH¢
-
%
Change
-
(1,564,891)
10,177,424
10,794,213
8,699,871
8,699,871
17.0
24.1
10,081,490
7,202,907
40.0
57,819
10,139,309
654,904
39,249
604,420
7,846,576
853,295
47.3
(100.0)
29.2
(23.2)
Expenditure
Administrative
&
Expenses
Financial Charge
Exceptional Item
Total Expenditure
Surplus
General
126. Total Income rose by 24.1% from GH¢8,699,871 in 2008 to
GH¢10,794,213 in 2009. This was due to a GH¢2,181,680 sales
revenue recorded in 2009 as against nothing for 2008.
127. Total Expenditure also increased by 29.2% from
GH¢7,846,576 in 2008 to GH¢10,139,309 in 2009 due to increases in
administrative & general expenses and financial charges. The rise in
administrative & general expenses resulted mainly from increases in
personnel emoluments and general administrative expenses whilst the
increases in bank charges and audit fees accounted for the rise in
financial charges. This resulted in a 23.2% fall in the surplus for the
year from GH¢853,295 in 2008 to GH¢654,904 in 2009.
Financial position
The highlights of the Corporation‟s financial position are presented
in the table 4.
128.
32
Table 4: Balance sheet as at 31 December 2009
Item
Non-Current Assets
Current Assets
Current Liabilities
Non-Current Liabilities
Net Assets
Current Ratio
2009
GH¢
77,006,912
230,408,371
190,167,365
62,824,182
54,423,736
1.2:1
2008
GH¢
25,634,801
39,887,637
6,583,408
14,012,161
44,926,869
6.1:1
%
Change
200.4
477.6
2,788.6
348.4
21.1
129. Non-Current Assets rose by 200.4% from GH¢25,634,801 in
2008 to GH¢77,006,912 in 2009. This was due to a 5,434.0% rise in
Petroleum Projects during the year.
130. Current Assets increased by 477.6% from GH¢39,887,637 in
2008 to GH¢230,408,371 in 2009 due mainly to a rise in crude,
finished products and non-trade stocks.
131. Current Liabilities increased by 2,788.6% from GH¢6,583,408
in 2008 to GH¢190,167,365 in 2009. This was due to two short-term
loan facilities contracted from Ecobank Ltd. and BNP Paribas which
amounted to GH¢178,398,439.
132. Non-Current Liabilities rose by 348.4% from GH¢14,012,161
in 2008 to GH¢62,824,182 in 2009 due to a medium term loan from
jubilee partner financing.
133. Net Assets as a result rose by 21.1% from GH¢44,926,869 in
2008 to GH¢54, 423,736 in 2009.
MANAGEMENT ISSUE
Codification of fixed assets
134. We noted during our audit that some assets purchased during
the last two years had still not been embossed with the corporation‟s
identification. This could result in their theft without notice.
33
135. We recommended that all assets purchased be codified and
such identification embossed on them.
VOLTA RIVER AUTHORITY
IDA CREDIT NOS. 4092GH AND 4213GH
RE: 330KV WAPP COASTAL TRANSMISSION BACKBONE
(330KV ABOADZE – VOLTA TRANSMISSION LINE)
PROJECT
Introduction
136. This report relates to the audited financial statements of Volta
River Authority‟s IDA Credit Nos. 4092GH and 4213GH, RE: 330KV
WAPP Coastal Transmission Backbone Project for the year ended 31
December 2009.
Operational results
137. Resources for the year under review stood at US$23,780,830.
This represented a significant increase of 37% as compared to a total
amount of US$17,358,246 in 2008. The details of the Project‟s
performance are shown in table 5.
Table 5: Resources and expenditure statement for 2009
Resources
Loan Draw-downs
VRA‟s Contribution
Total Resources
2009
US$
10,845,791
12,935,039
23,780,830
2008
US$
12,825,969
4,532,277
17,358,246
%
Change
(15.4)
185.4
37.0
11,191,274
1,775,819
85,754
16,790,396
250,048
80,284
(33.3)
610.2
6.8
1,652,869
6,763,798
28,451
-
5,709.5
100
Expenditures
Goods, Supply and Installation
Consultancy Services
Interest during Construction
Capitalised
Exchange Fluctuation
Compensations for right of way
34
Other Project Overhead Costs
Total Expenditure
Project Special Bank Account –
Ecobank
311,316
21,780,830
2,000,000
209,067
17,358,246
-
48.9
25.4
23,780,830
17,358,246
37.0
138. Total Expenditure was made up of disbursement on the Project.
This increased from US$17,358,246 in 2008 to US$21,780,830 in
2009, representing a rise of 25.4%. The rise in expenditure was due to
increases in Consultancy Services, Exchange Fluctuation on foreign
debt capitalized and Compensations for Right Of Way which recorded
a figure of US$6,763,799 as against nil expenditure in the previous
year. At the year end, US$2,000,000 was transferred to open Project
Special Bank Account at Ecobank, Accra Main.
Financial position
139. The Project‟s financial position is presented in the table 6.
Long-Term Assets
Current Assets
Total Assets
Financed By:
Long-Term Borrowings
VRA‟s Accumulated Contribution
Net Income
2009
US$
42,680,655
3,545,242
46,225,897
2008
US$
21,269,334
1,170,500
22,439,834
%
Change
100.7
202.9
106
28,395,908
17,801,109
28,880
17,550,117
4,866,070
23,647
61.8
265.8
22.1
140. The Project‟s Long-Term Assets in 2009 stood at
US$42,680,655, a rise of 100.7% over US$21,269,334 recorded in
2008. The Long-Term Assets comprised Accumulated Project Costs
of which Goods, Supply and Installation contributed immensely to the
increase in 2009.
141. Current Assets increased by 202.9% from US$1,170,500 in
2008 to US$3,545,242 in 2009. The increase was due to Ecobank
35
balance of US$2,000,097 attached to IDA4213 GH in the year under
review.
142. The Loan facility contracted for the Project increased by 61.8%
from US$17,550,117 in 2008 to US$28,395,908 at the close of 2009.
VRA‟s accumulated contribution to the Project went up by 265.8%,
from US$4,866,070 in 2008 to US$17,801,109 in 2009 due to
additions of US$12,935,039 during the year.
ENERGY COMMISSION
Introduction
143. This report relates to the audited accounts of the Energy
Commission for the year ended 31 December 2009.
Operational results
144. Total Income registered an increase of 32.9% from
GH¢2,495,571 in 2008 to GH¢3,315,715 in 2009. Revenue Grant
alone accounted for GH¢3,141,247 or 94.7% of Total Income and
showed an increase of 39.7% over the 2008 figure of GH¢2,248,165.
The increase in Revenue Grant was as a result of a significant rise of
102.1% in subvention from the Government of Ghana from
GH¢823,528 in 2008 to GH¢1,664,385 in 2009. Shown in table 7 are
the performance indicators of the Commission.
Income
Revenue Grants
Other Income
Total Income
Expenditure
Personnel Emoluments
Admin. and General Expenses
Service Activity expenses
Total Expenditure
36
2009
2008
GH¢
GH¢
3,141,247 2,248,165
174,468
247,406
3,315,715 2,495,571
%
Change
39.7
(29.5)
32.9
1,035,235
775,199
1,347,077 1,112,180
826,238
815,928
3,208,550 2,703,307
33.5
21.1
1.3
18.7
145. Total Expenditure of the Commission rose by 18.7% from
GH¢2,703,307 in 2008 to GH¢3,208,550 in 2009. A substantial
portion of the Commission‟s expenses was in Personnel Emoluments
which registered GH¢1,035,235 as against GH¢775,199 incurred in
2008, representing an increase of 33.5%. Administration and General
Expenses Cost also experienced an increase of 21.1% from
GH¢1,112,180 incurred in 2008 to GH¢1,347,077 in 2009.
146. The Commission had a net surplus of GH¢107,165 compared
with a deficit of GH¢207,736 recorded in 2008.
Financial position
147. A summarized balance sheet position as at 31 December 2009
is shown in table 8.
Non Current Assets:
Fixed Assets
Fixed Deposit
Investment
Total
Current Assets
Currents Liabilities
Net Current Assets
Net Assets
Current Ratio
2009
GH¢
2008
GH¢
278,306
500,000
245,779
500,597
778,306
351,952
303,068
48,884
827,190
1.2:1
746,376
265,248
179,864
85,384
831,760
1.5:1
%
Change
13.2
(0.1)
4.3
32.7
68.5
(42.7)
(0.5)
148. Non-Current Assets stood at GH¢778,306 at the close of 2009
(2008: GH¢746,376), showing a growth of 4.3%. Fixed Deposit
Investment alone constituted 49.3% (GH¢500,000) of Non-Current
Assets. The growth of 4.3% was mainly attributed to additions to
Motor Vehicles and Computers and Accessories in 2009.
37
149. Current Assets rose by 32.7% to GH¢351,952 in 2009 (2008:
GH¢265,248). The increase was due to a 39.4% rise in Rent
Prepayments in the year 2009 of GH¢ 216,557 (2008: GH¢155,331).
150. Current Liabilities increased by 68.5% from GH¢179,864 in
2008 to GH¢303,068 in 2009. This resulted from a rise in accounts
payables.
151. The Commission‟s liquidity position as shown by the current
ratio of 1.2:1 (2008: 1.5:1) indicated the Commission‟s inability to
discharge its short-term obligations falling due.
MANAGEMENT ISSUES
Accounts payable - National Petroleum Authority
152. For good accounting practice, items that remain in the books
for a long time should be identified and efforts ought to be made to
clear them.
153. We observed that an amount of GH¢121,451 owed to National
Petroleum Authority as a result of cost sharing arrangement had
recorded no movement between 2008 and 2009. The amount remained
outstanding because the two Institutions were yet to meet to reconcile
their accounts to confirm the debt.
154. The delay could lead to the amount standing in the books for a
long time.
155. We recommended that a final reconciliation be made as early
as possible and the debt settled. Management stated that the
reconciliation would be done at the end of 2010 to settle issues on
payment obligations.
38
PUBLIC UTILITIES REGULATORY COMMISSION (PURC)
Introduction
156. This report relates to the audited accounts of the Public Utilities
Regulatory Commission (PURC) for the year ended 31 December
2009.
Operational results
157. Income, consisting of Ghana Government Subvention, funds
from donor agencies and other income declined from GH¢2,333,709
in 2008 to GH¢2,035,400 in 2009, a decrease of 12.8%. This was
mainly attributed to a reduction in the World Bank and DFID grants.
158. Total Expenditure made up of personnel, administrative and
service cost went down to GH¢1,826,227 in 2009 as against
GH¢2,367,380 in 2008 representing a decrease of 22.9%. The decline
in service cost by 68.7% from GH¢ 1,018,177 in 2009 to GH¢
318,715 in 2008 resulting from decreases in travel and transport cost
and consultancy charges accounted for the fall in total expenditure.
159. A net income of GH¢209,173 was recorded in 2009 as against
a loss of GH¢33,671in 2008. This has since been transferred to the
Accumulated Fund account.
160.
Performance component is shown in table 9.
Income
Expenditure
Net Income
2009
GH¢
2,035,400
1,826,227
209,173
2008
GH¢
2,333,709
2,367,380
(33,671)
%
Change
(12.8)
(22.9)
721.2
Financial position
Shown in table 10 is the financial position of the Commission as at 31
December 2009.
39
Non-Current Assets
Current Assets
Current Liabilities
Net Current Assets
Net Assets
Current Ratio
2009
GH¢
332,561
142,778
68,587
74,191
406,752
2.1:1
2008
%
GH¢
Change
170,838
94.7
171,528
(16.8)
144,787
(52.6)
26,741
177.4
197,579
105.9
1.2:1
161. Non-Current Assets rose by 94.7% from GH¢170,838 in 2008
to GH¢332,561 in 2009 as a result of acquisitions of assets during the
year.
162. Current Assets decreased from GH¢171,528 in 2008 to
GH¢142,778 in 2009, recording a decrease of 16.8% due to a
reduction in cash and bank balances.
163. Current Liabilities fell from GH¢144,787 in 2008 to
GH¢68,587 in 2009, a decrease of 52.6%. The decrease was attributed
to payments made to trade creditors.
164. Net Current Assets rose from GH¢26,741 in 2008 to
GH¢74,191 in 2009 representing, an increase of 177.4%.
165. Net Assets increased from GH¢197,579 in 2008 to
GH¢406,752 in 2009, representing an increase of 105.9% as result of
the net income recorded.
166. The liquidity position as measured by the current ratio of 2.1:1
showed a healthy position and this implied that the Commission can
meet its short term liabilities falling due.
40
MANAGEMENT ISSUES
Allowances paid to outgoing commissioners
167. In spite of directive from the Office of the President which
terminated the payment of monthly allowances to Commissioners, the
Controller and Accountant-General Department (CAGD) paid
allowances for March and April to some Commissioners amounting to
GH¢3,930.
168. Management stated that the CAGD was notified and the
payment of the allowances had ceased adding that the current Board
has decided to write off the unearned allowances paid to the former
Commissioners.
169. We were of the view however that this was an illegitimate
payment and should therefore be recovered from the beneficiaries.
Embossment of property, plant and equipment
170. We noted that Property, Plant and Equipment valued at
GH¢109,059 had not been embossed as owned by the Commission.
171. We recommended that these be embossed with the
Commission‟s identification numbers in order to safeguard them from
losses.
172. Management responded that for security reasons, it was not
mandatory to have the Commission emboss its vehicles adding that
the computers, office equipment, furniture and the Lithographer had
been embossed.
41
ELECTRICITY COMPANY OF GHANA LIMITED
ENERGY DEVELOPMENT AND ACCESS PROJECT
IDA CREDIT NO. 4356 – GH AND ACGF GRANT NO.TF
090450
Introduction
173. This report is on the audited financial statements of Electricity
Company of Ghana Limited‟s portion of IDA Credit No. 4356-GH
and ACGP Grant No. TF090450 for the year ended 31st December
2009.
Operational results
174. Total Income and Expenditure for the period under review
broke-even. Total Income for 2009 of US$13,317,966 registered a
marginal increase of 2% over the previous year‟s figure of
US$13,058,240. The Project‟s resources were made up of Loan and
Grant drawn downs of US$10,999,884 (2008: US$600,270).
Operational results are shown in table 11.
Table 11: Income statement for 2009
Resources
Loan and Grant
ECG‟s Contribution
Total Resources
Expenditure
Works and Goods
Training
Consultancy
Total Expenditure
Transfer to open Special Account
of Ecobank and International
Bank, Accra
42
2009
US$
10,999,884
2,318,082
13,317,966
2008
US$
12,457,970
600,270
13,058,240
%
Change
(11.7)
286.2
2.0
12,374,756
333,110
610,100
13,317,966
5,892,670
165,570
6,058,240
110.0
101.2
119.8
-
7,000,000
-
175. Total Expenditure for the period under review which equalled
Total Income, increased by 119.8% from US$6,058,240 in 2008 to
US$13,317,966 in 2009. This was attributed to increases in Works
and Goods from US$5,892,670 in 2008 to US$12,374,756 in 2009,
representing a rise of 110.0%. Training cost increased by 101.2%
from US$165,570 in 2008 to US$333,110 in 2009 with Consultancy
Services cost recording US$610,100 in 2009.
Financial position
Shown in table 12 is the financial position as at 31 December 2009
176.
Long Term Assets
Current Assets
Total
Financed by
Long Term Loans (IDA 4356 –
GH)
ACGF Grant
ECGs Contribution
Interest Earned
Total
2009
2008
US$
US$
21,259,897 6,420,261
5,213,084 6,682,784
26,472,981 13,103,045
15,071,331
%
Change
231.1
(22.0)
102.0
8,457,970
78.2
8,386,524 4,000,000
2,918,352
600,270
96,774
44,805
26,472,981 13,103,045
109.7
386.2
116.0
102.0
177. Long-Term Assets or accumulated project cost went up by
231.1% from US$6,420,261 in 2008 to US$21,259,897 in 2009 due to
additions to distribution assets, motor vehicles, computers and
accessories and increase in training and consultancy cost.
178. Current Assets however decreased by 22.0% from
US$6,682,784 in 2008 to US$5,213,084 in 2009. The decrease in
Bank Balances (IDA Special Account and ACGF Special Account)
accounted for the fall.
43
BUI POWER AUTHORITY
Introduction
179. This report relates to the audited financial statements of Bui
Power Authority for the year ended 31 December 2009.
Operational results
180. Bui Power Authority was set up to oversee the construction and
operation of the Bui Hydroelectric Project. The dam is currently under
construction and is expected to be completed by 2013 and as a result
the financial statements of the Authority comprise only a balance
sheet shown in table 13 and other disclosure notes. There was no
profit and loss account as the dam was not yet operational.
181. Bui Power Authority is not a party to any of the loan
agreements and has therefore not recognised any liability in its
financial statements.
Financial position
ASSETS
Capital work in progress (work certified)
Advance Payments
Prepaid Insurance
Represented by:
Accounts Payable
Retention
Investment by the Republic of Ghana
US$
164,030,230
79,752,021
25,000,000
16,256,485
16,403,023
236,122,743
182. The Capital Work In Progress represents the total amount of
work certified by Bui Power Authority as at the balance sheet date on
the Bui Hydro Electric Project.
183. Advance payments represent an interest free loan advanced by
the Employer to the Contractor for mobilisation and design.
44
184. Prepaid Insurance represents the premium on credit insurance
taken as a condition in the loan agreements with the China Export and
Credit Insurance Corporation of China.
185.
The retention figure represents 10% of total work certified.
186. The components of the Investment by the Republic of Ghana
were: GOG Counterpart Funds US$53,368,014; Exim Bank
Concessional Loan US$78,727,365; Exim Bank Buyers Credit
US$104,027,364.
MANAGEMENT ISSUES
Extra Claims on diversion channel not in line with Contract
187. We noted from our review of the contract document that the
total quantity of concrete (item 5.02.01) for river diversion works is
18,000m3. Payment for the total quantity had been claimed by
Interim Payment Certificates (IPC3). However, from our review of
Interim Payment Certificate (IPC4), we noted that the supporting
documents used for a claim for conventional Concrete (main dam) of
902.55 m3 were identical to the supporting documents used for the
claim for „concrete‟ (river diversion channel) in IPC3. From our
review of the supporting documents attached to IPC4 and discussions
with the resident engineer, there was no evidence that the employer
had varied the conditions of the contract in line with sub-clauses 13.1
and 13.3 of the contract.
188. The effect is that, the claim made by the contractor for the
902.55 m3 is not appropriate, as it has not been approved by the
employer. Further, granted that the claim was valid, there has been an
overpayment of $51,030.17. This is because the unit cost for concrete
(river diversion channel) and conventional concrete (main dam) are
$223.43 and $279.97 respectively and payment has been made to the
contractor using the higher rate.
45
189. Management should ensure that all payments to the contractor
are in line with the contract. Where there are variations, the
procedures set out in the contract should be followed and adequately
documented.
190. Management responded that, per the design, a portion of the
river diversion channel forms a part of the main dam and was
therefore constructed according to the specifications for the Dam. The
portion of the river diversion channel that was claimed in IPC4 is part
of the main dam and so the claim was correct.
No evidence of approval for Board allowances paid
191. We noted during the audit that an amount of GH¢52,626 was
incurred by the authority on Board allowances. Management was not
able to provide evidence that the allowances had been approved as
required by the Act.
192. The Authority had not complied with Section 7 of the BPA Act
(2007).
193. We recommended that approval be sought for all allowances
paid in compliance with the requirements of the Act.
194. Management responded that the allowances that are paid to the
current Board are the same as what were paid to the previous Board.
Management assumed that the allowances had already been authorised
and so had communicated with and obtained oral approval from the
Minister of Energy that the rates used for the previous Board could be
continued. Management however informed us that the process would
be formalised.
46
BULK OIL STORAGE AND TRANSPORTATION
COMPANY LIMITED
Introduction
195. This report is on the audited accounts of Bulk Oil Storage and
Transportation Company Limited (BOST) for the year ended 31
December 2008.
Operational results
196. BOST recorded an operating loss of GH¢21,698,360 as against
an operating profit of GH¢9,480,482 in the previous year, representing
a fall of 328.9%. This was attributed to a 183.2% rise in Selling,
General and Administrative Expenses incurred in the year under
review. The performance indicators for the period are detailed in table
14:
Turnover
Cost of Sales
Gross Profit
Other Income
Finance Charges
Selling, General &
Administrative Expenses
Net (Loss) / Profit for the
year
2008
GH¢
308,977,402
(278,813,637)
30,163,765
63,147,003
(19,347,465)
(95,661,663)
2007
GH¢
277,714,872
(263,350,016)
14,364,856
44,984,285
(16,084,774)
(33,783,885)
%
Change
11.3
5.9
110.0
40.4
20.3
183.2
(21,698,360)
9,480,482
(328.9)
197. Total income of BOST, which was made up of turnover and
other income was GH¢372,124,405 in 2008 as compared to
GH¢322,699,157 in 2007, showing an increase of 15.3%.
198. Total expenditure increased by 25.7% from GH¢313,218,675
in 2007 to GH¢393,822,765 in 2009. This was due to increases in
Finance Charges from GH¢16,084,774 in 2007 to GH¢19,347,465 in
2008; and a rise in Selling, General and Administrative Expenses from
47
GH¢33,783,885 in 2007 to GH¢95,661,663 in 2008. The major items
that accounted for the increase in selling, general and administrative
expenses were realized exchange loss – GH¢31,228,589 (2007:
GH¢2,253,580); unrealised exchange loss – GH¢26,026,374 (2007:
GH¢1,351,637); haulage – GH¢12,794,258 (2007: GH¢9,123,428);
and shipping – GH¢4,090,729 (2007: GH¢1,212,274).
Financial position
Table 15 provides the summarised balance sheet as at 31 December
2008
Non-Current Assets
Current Assets
Current Liabilities
Net Assets
Current ratio
2008
GH¢
186,647,698
303,240,296
273,594,545
216,293,449
1.1:1
2007
GH¢
120,791,667
188,289,022
135,057,808
174,022,881
1.4:1
%
Change
54.5
61.1
102.6
24.3
199. Non-Current Assets rose from GH¢120,791,667 in 2007 to
GH¢186,647,698 in 2008, registering a 54.5% increase. The increase
was largely due to the acquisition of new assets totalling
GH¢75,524,691.
200. Current Assets increased significantly by 61.1% from
GH¢188,289,022 in 2007 to GH¢303,240,296 in 2008. This was as a
result of increases in inventories from GH¢52,279,731 in 2007 to
GH¢120,729,090 in 2008, marketing securities from GH¢6,427,287 in
2007 to GH¢13,432,265 in 2008 and cash at bank from
GH¢19,743,739 in 2007 to GH¢53,031,035 in 2008.
201. Current Liabilities went up by 102.6% from GH¢135,057,808
in 2007 to GH¢273,594,545 in 2008. The increase was attributed to a
rise in short-term loans to finance the Company‟s letters of credit from
GH¢43,335,081 in 2007 to GH¢243,001,413 in 2008. Accounts
payable and accruals at the close of 2008 was GH¢26,209,952 (2007:
GH¢87,516,504).
48
202. Net Assets was GH¢216,293,449 at the end of 2008 (2007:
GH¢174,022,881).
203. The liquidity position as measured by the current ratio was
1.1:1 for the period under review (2007: 1.4:1) depicting the inability
of the Company to meet its short term obligations falling due.
MANAGEMENT ISSUES
Withholding taxes not deducted – GH¢8,989.77
204. We noted that taxes worth GH¢8,989.77 were not withheld
from some payments made by the Company. Details of these
transactions are shown in the table below:
Date
PV/JV
Number
28/01/2008
2117
09/05/2008
2477
23/09/2008
4224
03/03/2008
8886
03/07/2008
2606
Transaction
DOPCO – Dec. ‟07 $55,575
Trf, Environmental FAMB
AT & V
DOPOO-DBB –
$29,000
Ground Rent for
APD – TDC
Trfs, $25,000 to
TOTAL – SCB Spec
Total
Amount
GH¢
53,907.75
Withholding tax
not deducted
(GH¢)
2,695.39
19,500.00
975.00
33,071.60
1,653.58
9,348.00
934.80
27,310.00
2,731.00
8,989.77
205. The non-payment of these amounts denied the state the use of
potential revenue for development.
206. Management was advised to comply with the provision as
stipulated in the IRS Act 592.
207. Management responded that the Environmental Management
Associates payment was in respect of 30% advance mobilisation and
49
so it was not taxed. However, total tax component was deducted from
the subsequent payments.
Rent contracts not available
208. We could not obtain copies of the tenancy agreements or
contracts signed between BOST and the Oil Marketing Companies
(OMCs) occupying offices at selected BOST depots for the year under
review.
209. We recommended that rent contracts should be renewed and
both parties should sign and appropriate copies filed.
210. Management responded that the contracts expired in 2008. In
2009, new contract has been sent to the OMCs but not all have signed
and/or paid.
Difference in product sales quantities between Accounts and the
Sales and Marketing Departments
211. We noted that the quantities of products sold to Chase
Petroleum during the year under review as recorded by the Sales and
Marketing Department were not the same quantities used by the
Accounts Department to determine the BOST margin for the same
products. Details are shown in the table below:
PETROL (SUPER)
Month
January
February
March
April
May
September
November
December
50
Quantity as per
Sales & Marketing
Department
(Litres)
3,618,850
4,989,400
4,489,750
5,405,750
1,364,650
3,054,800
13,098,750
7,739,950
Quantity as per
Accounts
Department
(Litres)
3,713,350
5,038,900
4,714,750
5,630,750
1,459,150
3,117,800
13,098,250
7,766,950
Difference
(Litres)
94,500
49,500
225,000
225,000
94,500
63,000
500
27,000
DIESEL (AGO)
Month
January
February
March
April
May
June
August
September
October
December
Quantity as per
Sales & Marketing
Department
(Litres)
5,784,650
11,275,100
9,039,650
8,860,500
7,640,000
9,087,050
6,163,650
8,276,200
10,399,450
9,859,650
Quantity as per
Accounts
Department
(Litres)
6,104,150
11,365,100
9,606,650
9,405,000
8,067,000
9,559,000
9,163,650
8,789,200
10,398,450
10,049,150
Difference
(Litres)
319,500
90,000
567,000
544,500
427,000
471,950
3,000,000
513,000
500
189,500
212. This situation, if not checked, may lead to under or over
invoicing of customers as well as misstatement of the revenue balance
in the financial statements.
213. We therefore recommended that there be regular product
quantity reconciliations between the Accounts and Sales and
Marketing Departments. Supervisory controls should be strengthened
at the depots to improve upon the accuracy of the information
provided to these reporting departments.
214.
Management accepted the recommendation.
AT & V Invoices not certified by BOST
215. The Company had entered into a joint loan agreement with
Export and Import Bank (EX-IM) and Citi Bank to fund the
Construction of pipelines by AT & V, an American Construction
Company. By this agreement, the Bank would pay for the cost of AT
& Vs services to BOST.
216. We however noted that except for the first draw-down made by
AT & V on 3 April 2008, the subsequent two draw-downs made in
September 2008 and March 2009 respectively were not certified by
51
the Company, that is, the bank paid these amounts (GH¢23,870,793
and GH¢7,243,576) directly to AT & V having received the Invoices
from them without certification from BOST.
217. The effect is that AT & V may present any bill for services not
rendered or may get away with substandard work and yet be paid.
218. We recommended that BOST agree with the bank and
contractor to honour only invoices certified by BOST.
No evidence of Board of Directors’ approval for investment in BT Worcon
219. We did not sight any evidence of the Board of Directors‟
(BOD) approval for an amount of GH¢70,000 used to purchase 70,000
shares in BT Worcon on 13 February 2008.
220. Non-involvement of the Board in major investment decisions
precludes effective monitoring of the activities of Management.
221. We recommended that the Board of Directors be involved in all
major investment decisions now and in the foreseeable future.
222. Management responded that the BOD was being updated with
the development of the project and a member of the Board was even
appointed to serve as Board member of the special purpose company
resulting from the investment in BT Worcon.
Signatories to bank accounts not updated
223. We noted that the following persons who were no longer in the
employment of BOST still maintained their mandate as signatories to
various BOST bank accounts.
52
Bank
Prudential Bank
The Trust Bank
Standard Chartered Bank
Stanbic Bank
Signatories to the Account
Yaw Koduah Sarpong
Frederick Bob Asram
Nicholas Samari
Harry Owusu
Kobina Nyamekye Eshun
Yaw Koduah Sarpong
224. According to the Finance Manager, the Company has requested
the banks to take out the names of these ex-staff but this had not been
effected. This could create an avenue for fraud as ex-staff could make
unauthorised withdrawals from the Company‟s accounts.
225. We recommended that Management intensify efforts to ensure
that ex-staff do not continue as signatories of the Company‟s accounts
several months after their separation.
226. Management responded that the Banks have been informed and
it would follow up to ensure the necessary corrections are effected.
However, The Trust Bank relates to the Kumasi Depot Account for
which the signatories are still relevant.
STUDENTS LOAN TRUST FUND
Introduction
227. This report relates to the audited accounts of the Students Loan
Trust Fund for the year ended 31 December 2009.
Operational results
228. Total Income of the Fund including Administrative Grant,
Interest on loans , Investment Income, registered an increase of
40.6% from GH¢1,403,529 in 2008 to GH¢1,973,065 in 2009. This
was mainly due to a 202% increase in Administrative Grant from
GH¢400,000 in 2008 to GH¢1,208,000 in 2009. Table 16 provides the
income and expenditure statement for 2009.
53
Items
Income
Expenditure
Employment Cost
Travel & Transport
Financial & Professional Charges
Administration & Other Expenses
Provision for Bad Debts
Total Expenditure
Income Surplus/(Deficit)
2009
GH¢
1,973,065
2008
GH¢
1,403,529
%
Change
40.6
600,686
145,091
14,386
882,092
164,086
1,806,341
166,724
455,561
166,104
22,822
605,496
123,099
1,373,082
30,447
31.9
(12.7)
(37.0)
45.7
33.3
31.6
447.6
229. Total Expenditure incurred in 2009 was GH¢1,806,341 as
against GH¢1,373,082 in 2008, representing an increase of 31.6%.
230. The increase in expenditure on Employment Cost was due to an
increase in Medical Expenses and Salaries, Wages & Allowances.
231. The decrease in Financial and Professional Charges was largely
attributed to the fall in expenses on Bank Charges and Audit Fees.
Significant increases in Repairs & Maintenance, Disbursement
Charges, Rent and Depreciation led to the rise in Administrative and
Other Expenses Expenditure. Increase in Provision for Bad &
Doubtful Debts Expenditure was as a result of the estimated 1% of
Outstanding Loan Balance for the year 2009.
232. An Income Surplus of GH¢166,724 was recorded at the close
of the year reviewed, compared with GH¢30,447 for the preceding
year, representing an increase of 447.6%
Financial position
Table 17 provides a summarised balance sheet as at 31 December
2009.
54
233.
Table 17: Balance sheet as at 31December 2009
Non-Current Assets
Current Assets
Current Liabilities
Net Current Assets
Net Assets
Current Ratio
2009
GH¢
35,607,119
5,912,885
229,634
5,683,251
4,850,033
36,440,337
25.8:1
2008
GH¢
19,112,279
5,063,890
65,625
4,998,265
1,728,931
22,381,613
77.2:1
%
Change
86.3
16.8
250.0
13.7
180.5
62.8
234. The Fund‟s Non-Current Assets went up by 86.3% from
GH¢19,112,279 in 2008 to GH¢35,607,119 in 2009. The increase was
due mainly to the large increase in Student Loans from
GH¢18,688,812 in 2008 to GH¢34,607,119 in 2009, recording an
increase of 85.2%.
235. Current Assets of the Fund recorded a marginal increase of
16.8% from GH¢5,063,890 in 2008 to GH¢5,912,885 in 2009. There
was substantial increase in Cash at Bank from GH¢462,125 in 2008 to
GH¢3,796,783 in 2009, an increment of 721.6%. However,
Investments declined by 60.1% from GH¢4,496,923 in 2008 to
GH¢1,796,219 in 2009.
236. Non-Current Liabilities made up of Deferred Income increased
from GH¢1,728,931 in 2008 to GH¢4,850,033 in 2009, showing a
huge leap of 180.5%. Current Liabilities made up of Accounts Payable
and Accruals increased sharply by 250.0% from GH¢65,625 in 2008
to GH¢229,634 in 2009. This was largely due to increase in Sundry
Creditors from GH¢33,577 in 2008 to GH¢192,182 in 2009.
237. Liquidity outlook as measured by a current ratio of 25.8:1
(2008; 77.2:1) remained very favourable, indicating the ability of the
Fund to discharge its short term obligations as and when they fall due.
238. Accumulated Fund of the Fund grew by 62.8% from
GH¢22,381,613 in 2008 to GH¢36,440,337 in 2009 due to additional
55
Capital Grants and Income Surplus of GH¢13,892,000 and
GH¢236,337 respectively.
MANAGEMENT ISSUES
Purchase not approved by Entity Tender Committee
239. We observed that during the supply of MacAfee Anti-Virus
Total Protection Software at a cost of GH¢8,500 by Alpha Computer
System, the approval threshold was breached. The Chief Executive
Officer of the Fund whose limit did not exceed GH¢5,000 approved
and authorised for payment an invoice of GH¢8,500 as a technical
service provided by the vendor.
240. This was contrary to schedule 3 of the Public Procurement Act
(Act 663), which indicates the threshold for approval authority for
Goods, Works, Technical Services and Consulting Services.
241. We recommended that Management of the Trust Fund adhere
strictly to the procurement threshold schedule to ensure transparency
and efficiency in public procurement.
Three pro-forma invoices sourced from one and same supplier
242. For the supply of three Dell Optiplex 755 Personal Computers
at a total cost of GH¢4,975.80, the proforma invoices used were not
obtained from genuine sources. We observed that one of the invoices
from Data Source (GH) Ltd had no address, telephone number(s) and
official stamp or signature. The 2nd invoice from Stennet (GH) Ltd.
which had a single phone number of 020-7992642 on it was from
Nana Serebour, the Managing Director of Office Plus, the Company
which was awarded the contract to supply the Computers. We were of
the opinion that the Procurement Officer sourced for the proforma
invoices from the same supplier, a practice which contravenes the
provisions of the Procurement Act, Act 663, Section 42.
56
243. We recommended that, Management should make sure that
these invoices are sourced from genuine suppliers so that the
organisation obtains value for its procurements.
244. Management responded that the breach occurred during the
tenure of the former Chief Executive adding that systems have been
put in place to ensure that all procurements are pre-audited to prevent
a recurrence of the lapse.
GHANA COCOA BOARD
Introduction
245. This report relates to the audited accounts of the Ghana Cocoa
Board for the financial years ended 30 September 2008 and 2009.
Operational results
246. The Board recorded a net profit of GH¢56,089,750 in the year
under review, as against GH¢21,930,321 in 2008, an increase of
155.8%. Table 18 provides the performance indicators.
Income
Gross Turnover
Other Income
Total Income
Expenditure
Cost of Sales
Expenses
Export & Local Duty
Total Expenditure
Net Profit
2009
2008
GH¢
GH¢
2,464,455,036 1,411,702,318
110,553,079
63,515,657
2,575,008,115 1,475,217,975
%
Change
74.6
74.1
74.6
2,259,604,633 1,280,899,543
173,839,904
126,135,311
76.4
37.8
85,473,828
46,252,800
2,518,918,365 1,453,287,654
56,089,750
21,930,321
84.8
73.3
155.8
247. Total Income increased by 74.6% from GH¢1,475,217,975 in
2008 to GH¢2,575,008,115 in 2009. The increase was as a result of a
rise in both Export and Local sales of cocoa beans. Other income
57
includes interest received, sundry sales, grading and sealing of cocoa
and rent received. This rose by 74.1% mainly as a result of significant
increases in interest received, and grading and sealing of cocoa.
248. Total Expenditure went up by 73.3% to GH¢2,518,918,365 in
2009 from GH¢1,453,287,654 in 2008 due to increases in Cost of
Sales, Administrative & General Expenses and Export and Local
Duty. Staff cost accounted mainly for the increase in Administrative
& General Expenses.
Financial position
249.
The Board‟s financial position is summarised in table 19.
Table 19: Balance sheet as at 30 September 2009
Non-Current Assets
Current Assets
Current Liabilities
Net Current Assets
Deferred Income
Net Assets
Current Ratio
2009
2008
GH¢
GH¢
110,916,275
82,292,768
513,104,976 815,512,840
346,144,904 218,314,621
166,960,072 597,198,219
1,432,324
3,973,206
%
Change
34.8
(37.1)
58.6
(72.0)
(64.0)
276,444,023 243,135,073
1.5:1
3.7:1
13.7
250. Non-Current Assets rose from GH¢82,292,768 in 2008 to
GH¢110,916,275 in 2009. The increase was as a result of additions to
Property, Plant and Equipment. Loans and Investments, components
of non- current assets however, reduced by 17.7%.
251. Current Assets also reduced by 37.1% from GH¢815,512,840
in 2008 to GH¢513,104,976 in 2009 due to a reduction in Accounts
Receivable and Cash and Bank Balances.
252. Current Liabilities on the other hand increased by 58.6% from
GH¢218,314,621 in 2008 to GH¢346,144,904 in 2009. This was due
to an increase in Accounts Payable by 80.4%.
58
253. As at the end of 30 September 2009, Ghana Cocoa Board had
fully paid its Long-Term Loans.
254. The liquidity position measured by a current ratio of 1.5:1
(2008:3.7:1) fell below the benchmark of 2:1 thus indicating the
inability of the Board to meet its short term debts when they fall due.
MANAGEMENT ISSUES
Debtors confirmation - CPC
255. We received a response to the circularization made to CPC
disputing the amount of their indebtedness to Ghana Cocoa Board.
Balance per COCOBOD books - GH¢74,283,443.09
Balance per CPC books
- GH¢72,216,298.65
256. An essential element in an effective control environment
requires the preparation and submission of statement of Accounts, to
major customers on a regular periodic base. All disputed balances and
differences should be reconciled and resolved periodically.
257. Failure on the part of management to undertake a periodic
reconciliation of account balances with major trading customers could
result in debtors balances being misstated in the accounting records
and the financials.
258. We recommended that reconciliations between Ghana Cocoa
Board and CPC Limited be undertaken regularly to facilitate the
determination at any particular point in time outstanding balance due.
259. Management responded that its investigations revealed the
difference of GH¢2,067,144.44 between COCOBOD balance
(provided by CMC) and that of CPC represents Cocoa delivery to
CPC captured by CMC in 2008/2009 financial year for which CPC
captured in its books as 2009/2010 delivery.
59
Huge outstanding closing balances on statutory deductions
260. We noted, in the course of the audit, huge outstanding balances
on staff Provident Fund – GH¢174,139.06, SSF – GH¢277,837.98 and
PAYE – GH¢351,991.81. These amounts were duly deducted from
staff salaries but Cocoa Research Institute had failed to remit same to
the relevant authorised agencies within the statutory period.
261. Statutory deductions should be remitted to the authorised
agencies within the required period. Absence of adequate and
effective management supervision in ensuring the timely remittance of
statutory deductions could result in the Institute being sanctioned by
the authorised agencies. Penalties could also be levied on the Institute
and remitting of these outstanding deductions could prove to be a
financial burden on the Institute‟s Cashflow.
262. We recommended that management institute effective
monitoring to avoid possible delays in remitting statutory deductions.
Reconciliation with the authorizing agencies should be carried out as
and when necessary. Management accepted the recommendation.
Depreciation fund
263. The Board had not complied with Section 28 of the Ghana
Cocoa Board Law (PNDC.81). The Board, per Section 28 of the
Ghana Cocoa Board Law 1989 (PNDC 81) is required to have a
Depreciation Fund and operate a Depreciation Reserve Account with a
Commercial Bank. We were of the view that the replacement of the
Board‟s assets could be a big financial burden in the future if no
provision is made but the Board was of the opinion that it has enough
investments to hedge for the purpose of assets replacement.
264. We therefore advised management to implore upon the
Parliamentary Sub-committee on Finance, through the Board of
Directors, for a review or annulment of the section.
265. Management responded that it will seek the Board of Directors‟
approval to implement the recommendation.
60
Debtors’ circularisation
266. We did not receive any response to the circularization letters
sent to the following companies with respect to their balance with
Quality Control Division (QCD). The Companies include:
GH¢
Transroyal Company – Casualty
13,139.36
DioJean Company Limited – Casualty
12,826.09
Cocoa Marketing Company Ltd.- Disinfestations 2,978,733.91
Leamax Limited – Grading and Sealing
6,694.00
Royal Commodities Limited – Grading and Sealing
5,941.54
Maersk Line Tema – Grading and Sealing
6,071.97
Scanship Limited Takoradi – Grading and Sealing
5,464.05
Delmas Limited – Grading and Sealing
5,037.96
267. An important procedure in substantiating debtors‟ balances is
to circularize them. Responses received give the assurance that the
balances are fairly stated and can be relied upon. Any difference
should be investigated and addressed. QCD does not maintain an
effective debt and credit control policy. No third party confirmation
has been received on their total indebtedness. The amount stated by
Cocoa Board cannot be substantiated.
268. We recommended that reconciliation between Quality Control
Division and the companies be undertaken regularly for each party to
ascertain at any particular point its indebtedness. Reminder letters
should be sent to these companies emphasizing the importance to
respond.
269. Management accepted the recommendation and stated that the
debt by Cocoa Marketing Company Limited (CMC) dates back to the
late 1990s. It had made several attempts to reconcile with the
company but it seems CMC did not have any records on the
indebtedness. Management informed us that services rendered to the
Company within the last five years have always been paid for.
Management further stated that approval would therefore be sought to
write off the debts from the books and added that with regard to the
61
other debtors, some of the companies have since settled part of their
debts.
Cocoa Clinic
Stock valuation
270. We observed some errors with regard to quantities and
omissions. These were made known to the schedule officer for
correction.
271. An adequate and effective stock management system ensures
accurate valuation of stock to facilitate the determination of materials
consumed and balances held at the end of the financial year. There
was also lack of adequate supervision in compiling stock list before
valuation resulting in understatement of stock by GH¢152,210.91.
272. We recommended that the Stock Valuation be reviewed and
checked by a responsible officer to forestall the recurrence of
differences in future. Management responded that the problem was
purely human error.
(MOFEP)
DFID’S SUPPORT FOR GHANA’S PUBLIC FINANCIAL
MANAGEMENT CAPACITY BUILDING PROGRAMME
(DFID GRANT 2006 – 9)
Introduction
273. This report is on the audited accounts of the DFID support for
Ghana Public Financial Management Capacity Building Programme
for the year ended 31 December 2009.
Operational results
274. Table 20 is a summary of the Project‟s Operations as at 2009.
62
Table 20: Statement of Project’s sources and uses of funds for
2009
Income
Disbursement from Grant
Expenditure
Public Expenditure Tracking
Survey
Revenue Agency Activity
Public Procurement Authority
Activities
Capacity Building For Budget
Division
Treasury Realignment
Project for Financial Analysis
Unit
MOFEP Budget
Equipment
Bank Charges
Advance to Implementing
Agency
Account Payable – PPA
Account
Payable
–
Withholding Tax
Total Expenditure
Cash at Bank balances as at
31 Dec.
2009
£
2,286,685.56
2008
£
1,656,651.39
%
Change
38.0
236,079.75
187,658.98
25.8
59,706.40
900,000.00
59,706.40
862,884.51
-
118,364.09
118,364.09
-
21,022.38
207,718.44
21,022.38
99,503.44
108.8
294,726.96
155,398.24
1,240.09
33,350.32
155,398.24
1,240.09
462,032.71
(92.8)
(18,691.13)
(13,991.13)
(394,944.08)
(3,394.06)
(95.3)
312.2
1,994,924.41
1,569,472.70
27.1
291,761.15
87,178.69
234.7
4.3
275. Total Receipts for the project for the period under review
increased by 38.0% from £1,656,651.39 in 2008 to £2,286,685.56 in
2009. This was due to an additional DFID Grant of £630,034.17
for the year.
276. Total Expenditure for the year also increased by 27.1% from
£1,569,472.70 in 2008 to £1,994,924.41 in 2009. This was mainly
due to increases in funds for Public Expenditure Tracking Survey and
Project for Financial Analysis Unit.
63
277. The Project recorded a 234.7% rise in Cash and Bank Balances
as at 31 December 2009 from £87,178.69 in 2008 to £291,761.15 in
2009.
Financial position
The highlights of the Project‟s financial position are presented in table
21.
Item
Non-Current Assets
Current Assets
Current Liabilities
Net Current Assets
Current Ratio
2009
2008
£
£
1,994,256.35 1,505,778.13
325,111.47
549,211.40
32,682.26
398,338.14
2,286,685.56 1,656,651.39
10.0:1
1.4:1
%
Change
32.4
(40.8)
(91.8)
38.0
278. Non-Current Assets which was made up of Non-Capital
Expenditure and Fixed Assets increased by 32.4% from £1,505,778.13
in 2008 to £1,994,256.35 in 2009. This mainly resulted from
additional expenditure incurred on non capital expenditure.
279. Current Assets however decreased by 40.8% from £549,211.40
in 2008 to £325,111.47 in 2009. This was due to a 92.8% drop in
Advances made to Implementing Agencies.
280. Current Liabilities also decreased by 91.8% from £398,338.14
in 2008 to £32,682.26 in 2009, due to a 95.3% reduction in Accounts
Payable to Implementing Agencies.
281. Net Current Assets rose by 38.0% from £1,656,651.39 in 2008
to £2,286,685.56 in 2009 due to the sharp drop in Current liabilities.
282. The Project‟s current ratio of 10.0:1 (2008: 1.4:1) showed that
it can meet its short-term obligations falling due.
64
NATIONAL INSURANCE COMMISSION
Introduction
283. This report covers the audited accounts of the National
Insurance Commission (NIC) for the year ended 31 December 2009.
Operational results
284. The summarised operations of the Commission are provided in
table 22
Item
Income
Expenditure
Surplus
2009
GH¢
3,973,151
3,517.350
455,801
2008
GH¢
3,047,820
2,696,563
351,257
%
Change
30.4
30.4
29.8
285. Total Income increased by 30.4% from GH¢3,047,820 in 2008
to GH¢3,973,151 in 2009. This was due mainly to a 25.3% rise in
Levies on Insurers from GH¢1,879,082 in 2008 to GH¢2,354,249 in
2009.
GH¢2,696,563 in 2008 to GH¢3,517,350 in 2009. This was largely
attributed to a 28.9% rise in Staff Cost and 120.3% rise in Director‟s
Emoluments.
287. The Commission recorded a surplus of GH¢455,801 in 2009 as
against GH¢351,257 in 2008, representing a 29.8% rise.
Financial position
288. The details of the Commission‟s financial position as at 31
December 2009 are shown in table 23.
65
Items
Non-Current Assets
Current Assets
Current Liabilities
Net Current Assets
Net Assets
Current Ratio
2009
GH¢
898,126
2,616,429
415,188
2,201,241
3,099,367
6.3:1
2008
GH¢
1,042,965
1,715,485
77,449
1,638,036
2,681,001
22.1:1
%
Change
(13.9)
52.5
436.1
34.4
15.6
289. Non-Current Assets was made up of fixed assets and equity
shares in GIC. This dropped by 13.9% from GH¢1,042,965 in 2008 to
GH¢898,126 in 2009 due to the disposal of some fixed assets and
depreciation charge for the year.
2008 to GH¢2,616,429 in 2009 as a result of a 63.5% and 63.3% rise
in Accounts Receivable and Bank and Cash Balances respectively.
291. Current Liabilities also rose by 436.1% from GH¢77,449 in
2008 to GH¢415,188 in 2009 due to increases in its elements such as
accrued water and electricity bills, and outstanding PAYE and SSF
payments.
292. The Commission‟s current ratio of 6.3:1 (2008:22.1:1) depicts
its ability to meet its short-term financial obligations when they fall
due.
MANAGEMENT ISSUE
Payment of Ground Rent to Lands Commission
293. We noted that the Commission was not paying annual ground
rent to Lands Commission in accordance with the indenture.
294. As this may attract penalties, we advised management to ensure
that all arrears and current rents are paid immediately.
66
SECURITIES AND EXCHANGE COMMISSION
Introduction
295. This report covers the audited accounts of Securities and
Exchange Commission for the year ended 31 December 2009
Operational results
296. Presented in table 24 are the performance details for the
Commission.
Income
Ghana Government Subvention
Other Income
Total Income
Expenditure
Emoluments & Allowances
Adm. Activity Expenses
Service Activity Expenses
Total Expenditure
Surplus
2009
GH¢
1,083,290
1,094,836
2,178,126
2008
GH¢
953,980
2,960,392
3,914,372
%
Change
13.6
(63.0)
(44.4)
786,547
755,346
559,092
2,100,985
77,141
686,612
796,902
308,331
1,791,845
2,122,527
14.6
(5.2)
81.3
17.3
(96.4)
297. Total Income of the Commission decreased by 44.4% from
GH¢3,914,372 in 2008 to GH¢2,178,126 in 2009. This was because
Other Income dropped by 63% from GH¢2,960,392 in 2008 to
GH¢1,094,836 in 2009 due to decreases in income generated from
transactions levy, prospectus approval fees, interest on staff loans and
the absence of FINSSP support.
298. Total Expenditure increased by 17.3% from GH¢1,791,845 in
2008 to GH¢2,100,985 in 2009. This was attributed to a 14.6% rise in
Emoluments and Allowances and an 81.3% rise in Service Activity
Expenses. Increases in cost for foreign training and conferences and
hotel accommodation accounted for the upward movement in service
activity expenditure.
67
299. The Commission recorded an operational
GH¢77,141 in 2009 as against GH¢2,122,527 in 2008.
surplus
of
Financial position
300. A summary of the financial position of the Commission is
presented in table 25.
Item
Non-Current Assets
Current Assets
Current Liabilities
Net Current Assets
Net Assets
Current Ratio
2009
GH¢
1,955,131
2,934,078
9,750
2,924,328
4,879,459
301.0:1
2008
GH¢
2,064,031
2,762,324
24,037
2,738,287
4,802,318
115.0:1
%
Change
(5.3)
6.2
(59.4)
6.8
1.6
301. Non-Current Assets decreased by 5.3% from GH¢2,064,031 in
2008 to GH¢1,955,131 in 2009 due to depreciation charge for the
year.
302. Current Assets rose by 6.2% from GH¢2,762,324 in 2008 to
GH¢2,934,078 in 2009. The rise was due to increases in Short-Term
Investments, Receivables and Repayments.
303. Current Liabilities on the other hand decreased by 59.4% from
GH¢24,037 in 2008 to GH¢9,750 in 2009.
304. The Current Ratio of 301.0:1 (2008:115.0:1) showed a
favourable position depicting the ability of the Commission to
discharge its short term obligations as and when they fall due.
MANAGEMENT ISSUES
Accountable imprest – US$2,000
305. We noted that some members of staff, who were given
accountable imprest amounting to US$2,000 to travel outside the
68
country between March and October 2009, had not retired the imprest
after their return during the financial year. We were unable to
authenticate whether the money was used in the interest of the
Commission. Details are shown below.
Date
Name
17/3/09
15/4/09
30/10/09
30/10/09
Gladys Aryeetey
Gladys Aryeetey
Gladys Aryeetey
Ashong-Katai
Total
Amount
US$
400
1,000
300
300
2,000
Amount
GH¢
580
1,450
435
435
2,900
306. We recommended that Management ensure that affected
members retire promptly all imprest given them; otherwise, they
should be prevented from travelling outside the country. Subsequently
any member who takes imprest should retire it as soon as he returns
from the assignments.
NATIONAL LOTTERY AUTHORITY
Introduction
307. This report covers the audited accounts of the National Lottery
Authority (NLA) for the financial year ended 31 December 2009.
Operational results
308. The performance indicators of the Authority are shown in table
26.
Income
Lotto Intake
Miscellaneous Income
Total Income
Expenditure
Direct Operating Expenses
2009
2008
GH¢
GH¢
124,712,367 116,500,002
3,135,330
7,365,158
127,847,697 123,865,160
101,068,977
7,006,634
%
Change
7.0
(57.4)
3.2
96,329,986
5,808,587
4.9
20.6
69
Service Charges
Total Expenditure
Surplus
8,498,769
7,652,018
776,577
301,984
117,350,957 110,092,575
10,496,740 13,772,585
11.1
157.2
6.6
(23.8)
GH¢127,847,697 in 2009. This was due to a 7.0% rise in Lotto Intake
in the year. Miscellaneous income which comprised income from
investment, sundries, and income from mobi game dropped by 57.4%
because of a significant fall in the income recorded from mobi game .
GH¢110,092,575 in 2008 to GH¢117,350,957 in 2009. This was due
to a 20.6% rise in Personnel Emoluments and a 157.2% rise in Service
Charges. Increases recorded in legal expenses, staff training &
development cost largely accounted for the rise in service charges.
311. The Authority recorded a surplus of GH¢10,496,740 in 2009 as
against GH¢13,772,585 in 2008 representing, a decrease of 23.8%.
Financial position
312.
The Authority‟s financial position is provided in table 27.
Item
Fixed Assets
Current Assets
Current Liabilities
Net Current Assets
Net Assets
Current Ratio
2009
2008
GH¢
GH¢
13,820,551 12,623,495
8,218,562 11,996,189
7,881,339 8,555,284
337,223 3,440,905
14,157,774 16,064,400
1.0:1
1.4:1
%
Change
9.5
(31.5)
(7.9)
(90.2)
(11.9)
313. Fixed Assets increased by 9.5% from GH¢12,623,495 in 2008
to GH¢13,820,551 in 2009.
This was due to additions of
GH¢2,034,469 within the year.
70
314. Current Assets dropped by 31.5% from GH¢11,996,189 in
2008 to GH¢8,218,562 in 2009. The decline was due to decreases in
Inventory, Trade Debtors and Cash and Bank Balances.
315. Current Liabilities also decreased by 7.9% from GH¢8,555,284
in 2008 to GH¢7,881,339 in 2009. This was due to reductions in
Accounts Payables and Short-Term Loans.
316. The Authority‟s current ratio of 1.0:1 (2008: 1.4:1) shows a
drop indicating the Authority‟s inability to meet its short-term
financial obligations as and when they fall due.
BEDROCK VENTURE CAPITAL FINANCE
COMPANY LIMITED
Introduction
317. This report covers the audited accounts of Bedrock Venture
Capital Finance Company Limited (BVCF) for the year ended 31
December 2009.
Operational results
318. The details of the operations of the Fund are provided in table
28.
Table 28: Income and expenditure accounts for 2009
Income
Operational Income
Operational Expenses
Salaries & Wages
Fund Managers Fees
Bank Charges
Sundry, Printing &
Stationery
Board Fees
Rent
Audit & Accountancy Fees
2009
GH¢
43,047
2008
GH¢
-
%
Change
-
22,227
303,979
2,204
15,592
297,632
1,684
42.6
2.1
30.9
5,744
29,870
37,970
7,000
988
33,894
35,316
5,000
481.4
(11.9)
7.5
40.0
71
Provision for Depreciation
Total Operational
Expenses
Operational Profit/(Loss)
Interest Income
Net Loss for the year
6,642
6,641
0.0
415,636
(372,589)
311,481
396,747
(396,747)
37,816
4.8
(6.1)
723.7
(61,108)
(358,931)
(83.0)
319. Total Operational Income of the Venture Fund was GH¢43,047
in 2009 compared with the 2008 nil figure. The income was mainly
from returns on loans made to some client companies. Nonoperational Income ( Interest Income) largely from placement of funds
with National Investment Bank yielded a 723.7% increase to
GH¢311,481 in 2009 as against GH¢37,816 in 2008. The increase was
due to the fact that more funds (GH¢1,453,088 at 2009 year end) were
placed in Fixed Deposit/Call Accounts.
320. Total Operational Expenses marginally went up by 4.8% to
GH¢415,636 in 2009 as against GH¢396,747 in 2008. The increase
was mainly due to increases in the Wages and Salaries Bill, Printing,
Stationery and Sundry Expenses.
321. The year ended with a net loss of GH¢61,108 (2008:
GH¢358,931). The 83% improvement in the Venture Fund‟s 2008 loss
position was the effect that Non Operational Income of GH¢311,481
had in reducing the Operational Loss for the year from GH¢372,589 to
a net loss of GH¢61,108 in 2009.
Financial position
322.
Presented in Table 29 is the Fund‟s financial position
Table 29: Assets and liabilities as at 31 December 2009
Non-Current Assets
Plant, Properties & Equipment
Investment
Total Non-Current Assets
Current Assets
72
2009
GH¢
18,112
3,077,803
3,095,915
304,745
2008
GH¢
24,369
789,298
813,667
2,669,902
%
Change
(25.7)
289.9
280.5
(88.6)
Current Liabilities
Net Current Assets
Net Assets
Current Ratio
147,085
157,660
3,253,575
2.1:1
168,887
2,501,015
3,314,682
15.8:1
(12.9)
(93.7)
(1.8)
323. Total Non-Current Assets increased by 280.5% to
GH¢3,095,915 in 2009 from GH¢813,667 in 2008. Properties, Plant
and Equipment decreased by 25.7% to GH¢18,112 (2008:
GH¢24,369) solely due to Depreciation Charge for the year.
Investments on the other hand recorded a 289.9% increase to
GH¢3,077,803 in 2009 as against GH¢789,298 in 2008 due to total
additional investment of GH¢2,288,505 made in Fixed Deposit/Call
Accounts, Equity and Loans Portfolio.
324. Current Assets dropped by 88.6% to GH¢304,745 in 2009 as
against GH¢2,669,902 in 2008. The drop was mainly due to
placement of most of the Fund‟s Cash and Bank Balances in longterm fixed, equity and loan investment portfolio resulting in Cash and
Bank Balances reducing to GH¢289,396 in 2009 (2008:
GH¢2,664,810).
325. Current Liabilities recorded a decrease of 12.9% to
GH¢147,085 in 2009 from GH¢168,887 in 2008. The reduction was
due to a net reduction in Creditors and Accruals.
326. The Venture‟s liquidity position remained favourable despite
the current ratio dropping to 2.1:1 (2008: 15.1:1). The Venture is thus
capable of meeting its short-term financial obligations as and when
they fall due.
MANAGEMENT ISSUES
Shareholding Structure
327. The shareholding structure of the Fund at the time of audit
(June 2010) was as follows:
73
S/No
Shareholder
Class A
National
Investment Bank
(NIB)
(20%)
State Insurance
Company (SIC)
(20%)
Class B
National
Investment Bank
(NIB)
(20%)
Venture Capital
Trust Fund
(VCTF) (20%)
Total
Subscribed
Capital
(US$)
Capital
not called
up
(US$)
Call up
Capital
(US$)
Paid
Capital
(US$)
Unpaid
Capital
(US$)
2,000,000
1,000,000
1,000,000
1,000,000
NIL
2,000,000
1,000,000
1,000,000
1,000,000
NIL
2,000,000
1,000,000
1,000,000
1,000,000
NIL
4,000,000
2,000,000
2,000,000
1,000,000
1,000,000
10,000,000
5,000,000
5,000,000
4,000,000
1,000,000
328. We noted that on December 26 2007, members agreed on the
shareholding structure of Bedrock Venture Capital Finance Company
Limited. However, shareholding Agreement made available for audit
was not signed though management informed us that the signed copy
was available. We were unable to confirm the shareholders‟
agreement.
329. We also observed that there was unpaid capital to the
equivalent of $1,000,000 due from VCTF thus, depriving the Bedrock
Venture of working capital as the shareholders‟ fund, at this state,
remained its main source of funds. Further, not withstanding
management‟s explanation that basis of charging management fee is
in accord with industry practice, we observed that Management Fees
remained high as it was charged on the subscribed and not on the
called up and/or paid up capital.
330. We therefore advised that Management address the above
shortcomings on the Company‟s share structure and management fees.
Management should consider requesting shareholders to call in unpaid
shares.
74
Non submission of audited financial statements by investee
companies
331. Contrary to the Company‟s fund Guidelines, four out of the
five companies in which Bedrock has equity investment failed to
submit audited financial statements. The only submitted financial
statement was defective in that the Directors‟ report was signed by
only one Director while the Balance sheet was not signed.
332. The non availability of financial statements of investee
companies did not make it possible to among other things confirm
Bedrock‟s investments in these companies, determined dividend
earned by Bedrock and the proportion of equity holdings in those
companies.
333. We advised that Fund managers should enforce the clause on
Financial Reporting and Auditing of all investee companies.
PUBLIC PROCUREMENT AUTHORITY
Introduction
334. This report relates to the audited financial statement of Public
Procurement Authority for the year ended 31 December 2009.
Operational results
335. Total Income for the year under review decreased by 8.6%
from GH¢2,541.833 in 2008 to GH¢2,324,141 in 2009, even though
Government Subvention, a major source of the Authority‟s Income
increased significantly by 58.0% from GH¢1,204,916 in 2008 to
GH¢1,903,736 in 2009. The decline in Total Income was due to nonreceipt of support from the Department For International Development
(DFID). Performance indicators are shown in table 30:
75
Income
Expenditure
Short-Term Training
Personal Emoluments
General & Administrative
Expenses
Depreciation
Others
Total Expenditure
Surplus/(Deficit)
2009
2008
GH¢
GH¢
2,324,141 2,541,833
408,127
879,170
620,259
%
Change
(8.6)
917,675
733,777
407,921
(55.5)
19.8
52.1
168,727
158,626
449,958
425,929
2,526,241 2,643,928
(202,100) (102,095)
6.4
5.6
(4.5)
98.0
336. Total Expenditure also decreased by 4.5% from GH¢2,643,928
in 2008 to GH¢2,526,241 in 2009. The decrease was mainly as a
result of 55.5% decline in Short–Term Training Expenses, even
though General and Administrative Expenses arose by 52.1% from
GH¢407,921 in 2008 to GH¢620,259 in 2009.
337. The year 2009 ended with a deficit of GH¢202,100 as against a
deficit of GH¢102,095 recorded in 2008. This represents an
unfortunate increase of 98.0%, thus depicting a worsening operating
performance of the Authority.
Financial position
338. Presented in table 31 is the financial position of the Authority
as at 31 December 2009.
Fixed Assets
Current Assets
Current Liabilities
Net Assets
Current Ratio
76
2009
GH¢
287,083
9,403
159,105
137,381
0.1:1
2008
GH¢
179,614
259,880
239,402
200,092
1.1:1
%
Change
59.8
(96.4)
(33.5)
(31.3)
339. Fixed Assets stood at GH¢287,083 as at 2009 as against
GH¢179,614 in 2008. The acquisition of Motor Vehicles, Computers,
Office Equipment and Furniture and Fittings accounted for the
increase in Fixed Assets.
340. Current Assets decreased by 96.4% during the period under
review. This was as a result of a sharp reduction in Bank Balance from
a favourable balance of GH¢191,058 in 2008 to an overdrawn balance
of GH¢92,376 in the current year.
341. Current Liabilities also decreased by 33.5% to GH¢159,105 in
2009 from GH¢239,402 in 2008. Payments to IRS on Withholding
Tax and PAYE accounted for the fall.
342. The current ratio of the Authority was 0.1:1 (2008: 1.1:1)
indicating an unfavorable liquidity position for the Authority to meet
its short-term debts falling due.
COCOA MARKETING COMPANY (GHANA) LIMITED
Introduction
343. This report covers the audited accounts of Cocoa Marketing
Company (Ghana) Limited for the year ended 30 September 2008 and
2009.
Operational results
344. The Company‟s operations for the year 2009 rose by
21,722.4% to a profit before tax of GH¢2,935,110 as against
GH¢13,450 in 2008. Presented in table 32 are the performance
indicators.
Income
2009
2008
GH¢
GH¢
Sales Commission
12,581,230 7,336,668
Share of FOB
17,448,161 11,870,705
Other Income
3,178,969 1,329,070
Total Income
33,208,360 20,536,443
%
Change
71.5
47.0
139.2
61.7
77
Expenditure
Operating Expenses
Personnel Cost
Establishment Cost
Administrative Cost
Prof. & Financial Charges
Depreciation
Total Expenditure
Profit before Tax
14,211,351 8,309,856
11,552,028 7,691,603
3,228,251 3,286,105
455,415
619,759
173,398
155,091
652,807
460,579
30,273,250 20,522,993
2,935,110
13,450
71.0
50.2
(1.8)
(26.5)
11.8
41.7
47.5
21,722.4
GH¢33,208,360 in 2009. The increase was due to a rise in revenue
realised from the Share of FOB, Sales Commission and Other Income.
The increases in revenue from home ownership fund and sundries
accounted largely for the sharp rise in other income.
2008 to GH¢30,273,250 in 2009. The increase was due to increases in
Operating Expenses, Personnel Cost, Depreciation and Professional &
Financial Charges. The significant rise in operating expense was
attributed to increases in expenditure on warehouse rent and port
transportation.
Financial position
347. Presented in table 33 is the balance sheet as at 31 December
2009
Item
2009
2008
GH¢
GH¢
Non-Current Assets
2,001,184
1,294,760
Current Assets
26,321,316 23,859,963
Current Liabilities
1,823,956
7,685,242
Net Current Assets
24,497,360 16,174,721
Net Assets
26,498,544 17,469,481
Current Ratio
14.4:1
3.1:1
78
%
Change
54.6
10.3
(76.3)
51.5
51.7
348. Non-Current Assets grew by 54.6% from GH¢1,294,760 in
2008 to GH¢2,001,184 in 2009. The increase was due to additions to
Furniture and Equipment, Motor Vehicles and Computers.
349. There was a 10.3% increase in Current Assets from
GH¢23,859,963 in 2008 to GH¢26,321,316 in 2009. The rise in Trade
Receivables and Short-Term Investments accounted for the increase.
350. Current Liabilities fell significantly by 76.3% from
GH¢7,685,242 in 2008 to GH¢1,823,956 in 2009 and this was largely
due to the 89.0% drop in Other Payables and Accruals.
351. The Company‟s liquidity ratio of 14.4:1 (2008: 3.1:1) showed
that the Company is in a better position to discharge its short-term
debts as and when they fall due.
MANAGEMENT ISSUE
Shareholding in Cocoa Marketing Company (UK) Limited
352. We could not sight any evidence of the shareholding of Cocoa
Marketing Company (Ghana) Limited in its subsidiary (Cocoa
Marketing Company (UK) Limited).
353. We were made to understand that, Ghana Cocoa Board has
99% of the shares of Cocoa Marketing Company (Ghana) Limited to
the effect that the ownership of Cocoa Marketing Company (UK)
Limited is uncertain. The Cocoa Marketing Company (Ghana)
Limited‟s share in the UK subsidiary is not supported by any evidence
of shares issued.
354. We recommended that the ownership of CMC (UK) Limited be
regularised by obtaining a share certificate to support the shares held
in CMC (UK) Limited.
355. Also, the claim by COCOBOD that it owns 99% of the Shares
of CMC (UK) Limited with only 1% owned by CMC (GH) Limited
should be resolved to avoid any doubts regarding the ownership.
79
356. Management responded that it was making efforts to regularize
the shareholding in CMC (UK) Ltd.
Ownership of property, plant and equipment
357. We noted that CMC Ltd did not have documents to support its
ownership in respect of the following property, plant and equipment
which were procured on their behalf by COCOBOD:
Fork Lift
Weighing System
Total
Cost
GH¢
58,045
318,159
376,204
358. CMC risks losing the assets in times of dispute in the absence
of title deeds.
359. Management accepted our recommendation that efforts be
made to have COCOBOD transfer the original documents into the
name of CMC Ltd.
Staff Debtors
360. We noted that there was an unexplained difference of
GH¢1,015,040 between the general ledger balance and the balance
generated through the Periodic Loan Repayment print-outs as follows:
Balance per General Ledger
Balance per Periodic Loan Repayment print-outs
Unexplained Difference
GH¢
2,421,842
1,406,802
1,015,040
361. For fair reporting and to enhance decision making, we
recommended an immediate investigation and subsequent
reconciliation of the staff debtors account.
80
Overpayment of contract price
362. We noted that there was an overpayment of an amount of
GH¢147,326.78 of 163.5% on the original contract sum of
GH¢90,123.39, thus leading to the overall contract sum of
GH¢237,450.17. This amount was paid to Appro-Tech Impex Ltd for
the rehabilitation of Bungalow No. C1/16, Cocoa Villa, Takoradi.
363. This was in contravention of Part IX, Section 85(1) of the
Public Procurement Act, 2003 (Act 663) which states that, except in
cases of extreme urgency, where there will be an aggregate increase in
the original amount of the contract by more than 10 percent of the
original price, a procurement entity shall inform the appropriate
Tender Review Board in the case of a contract subject to review by
the Tender Review Board of any proposed extension, modification or
variation order with reasons.
364. We recommended that Management should always refer to the
appropriate Part and Section of the Procurement Act, 2003 (Act 663)
and act in strict accordance to avoid any possible sanctions from the
Public Procurement Authority and also Management should seek
Board ratification of the excess amount.
Ex-staff debtors
365. We noted that there was no schedule in support of the balance
of GH¢66,738 standing against ex-staff debtors. We were therefore
unable to verify the existence of the balance.
366. We recommended that effort be made to come out with a
schedule in support of the GH¢66,738.
VENTURE CAPITAL TRUST FUND
Introduction
367. This report covers the audited accounts of Venture Capital
Trust Fund for the year ended 31 December 2009.
81
Operational results
368. The details of the operations of the Fund are provided in table
34:
Table 34: Income and expenditure account for 2009
Income
Interest Income
Economic Management &
Capacity Building Project
Support
Others
Total Income
2009
GH¢
5,456,324
177,603
2008
GH¢
3,069,055
118,011
%
Charge
77.8
50.5
15,421
5,649,348
3,187,066
-
1,711,689
13,200
43,893
7,000
48,513
1,824,295
3,825,053
1,066,325
30,000
45,655
6,000
71,326
1,219,306
1,967,760
60.5
(56.0)
(3.9)
16.7
(32.0)
49.6
94.4
77.3
Expenditure
Board Fees
Board Expenses
Audit Fees
Depreciation
Total Expenditure
Surplus / (Deficit)
369. Total Income of the Fund amounted to GH¢5,649,348 in 2009,
representing a 77.3% increase over the 2008 figure of GH¢3,187,066.
The increase was mainly due to a 77.8% increase in Interest Income
and 50.5% increase in Economic Management and Capacity Building
Project Support. The rise in interest income arose from increases in
interest of investments with GCB, ADB and Fidelity Bank Limited.
370. Total Expenditure for the same period amounted to
GH¢1,824,295 in 2009 as against GH¢1,219,306 in 2008, registering
an increase of 49.6%. This was due to a 60.5% rise in Administrative
Expenses mainly resulting from increases in expenses on seminars,
workshop and conferences, consultancy fees and staff training cost.
371. The year ended with a surplus of GH¢3,825,053 as compared
to a GH¢1,967,760 in 2008, recording an increase of 94.4%.
82
Financial position
Presented in table 35 is the financial position as at 31 December 2009
Table 35: Asset and liabilities as at 31 December 2009
Fixed Assets
Investments
Current Assets
Current Liabilities
Net Current Assets
Net Assets
Current Ratio
2009
GH¢
49,461
5,416,496
25,910,085
240,347
25,669,738
31,135,695
107.8:1
2008
GH¢
93,479
4,241,731
23,138,397
162,965
22,975,432
27,310,642
142.0:1
%
Change
(47.1)
27.7
12.0
47.5
11.7
14.0
372.
Fixed Assets decreased by 47.1% from GH¢93,479 in 2008 to
GH¢49,461 in 2009. The reduction was mainly due to Depreciation
Charge. Investment in securities increased by 27.7% from
GH¢4,241,731in 2008 to GH¢5,416,496 in 2009 due to a 230.4%
increase in Fidelity Equity Fund II and 43.6% increase in Sorghum
Farmers investments.
373. Current Assets rose marginally by 12.0% to GH¢25,910,085 in
2009 from GH¢23,138,397 in 2008. This was as a result of increases
in Accounts Receivable and Bank and Cash Balances.
2008 to GH¢240,347 in 2009 as a result of an increase in Accruals.
375. Although a decrease in the Fund‟s liquidity position was
recorded, it was still strong enough and this indicates that the Fund
could meet its short-term financial obligations as and when they fall
due.
83
REVENUE AGENCIES GOVERNING BOARD (RAGB)
Introduction
376. This report relates to the audited accounts of the Revenue
Agencies Governing Board for the period 1 January 2008 to 31
December 2009.
Operational results
377. Presented in the table 36 are the performance indicators
Income
Retention
Other Income
Total
2009
GH¢
4,054,753
472,195
4,526,948
2008
GH¢
3,211,088
76,240
3,287,328
%
Change
26.3
519.4
37.7
1,456,127
1,871,587
266,367
3,594,081
932,867
1,041,824
1,469,534
879,001
3,390,359
(103,031)
39.8
27.4
(69.7)
6.0
1,005.4
Expenditure
Personnel cost
Administration Cost
Service cost
Total
Surplus/(Deficit)
378. Total income showed an increase of 37.7% from
GH¢3,287,328 in 2008 to GH¢4,526,948 in 2009. RAGB‟s main
source of income was made up of 3% share of the total Retention
Income of the three Revenue Agencies. The Board‟s retention income
showed an increase of 26.3% from GH¢3,211,088 in 2008 to
GH¢4,054,753 in 2009. The significant increase in other income by
519.4% from GH¢76,240 in 2008 to GH¢472,195 in 2009 was due to
contributions from the Revenue Agencies towards the Aflao Project.
379. Total expenditure increased marginally by 6.0% from
GH¢3,390,359 in 2008 to GH¢3,594,081 in 2009. The rise in total
expenditure was due to increases in personnel cost of 39.8% from
GH¢1,041,824 in 2008 to GH¢4,526,948 in 2009 and upward
movement of administration cost by 27.4% from GH¢1,469,534 in
84
2008 to GH¢1,871,587 in 2009. Included under Administration cost is
depreciation which constituted 18.8% of the cost of GH¢1,871,587 in
2009. Service cost on the other hand dropped by 69.7% from
GH¢879,001 in 2008 to GH¢266,367 in 2009.
380. The Board therefore ended 2009 with an operational surplus of
GH¢932,867 representing an increase of 1,005.42% from a deficit of
GH¢103,031 in 2008.
Financial position
381. Shown in table 37 is the financial position of the Board as at 31
December 2009.
Items
Non-current asset
Investment
Current Assets
Current Liabilities
Net Current Assets
Net Assets
2009
GH¢
604,041
1,962,410
888,065
83,188
804,877
3,371,328
2008
GH¢
503,223
685,917
1,306,983
57,661
1,249,322
2,438,461
%
Change
20.0
186.1
(32.1)
44.3
(35.6)
38.3
382. Non-current assets increased by 20.0% from GH¢503,223 in
2008 to GH¢604,041 in 2009 due to the acquisition of additional
assets during the year.
383. Current assets of the Board made up mainly of sundry debtors,
bank balance and cash on hand declined by 32.1% to GH¢ 888,065 .
This was due to a drop in its elements. Current liabilities however
went up by 44.3% resulting mainly from increases in outstanding
PAYE due IRS and payment owed SSNIT-Rent/ Electricity.
384. Net Asset increased by 38.3% from GH¢2,438,461 in 2008 to
GH¢3,371,328 in 2009.
85
385. The liquidity position as measured by a current ratio at the end
of 2009 stood at 10.7:1 (2008: 22.7:1) puts the Board in a healthy
position to meet its short-term debts falling due.
MANAGEMENT ISSUES
Separated staff indebtedness – GH¢26,203.28
386. Our payroll review disclosed that two former staff, Nana Akua
Agyei and Fred Charles Anson owed the Board loan amounts of
GH¢13,351.64 and GH¢16,146.00 as at the time of separation on
10/6/09 and 26/8/09 respectively.
387. As at July 2010, 13 and 10 months respectively after
separation, Nana Akua Agyei had paid only GH¢500.00 out of her
outstanding amount while Fred Anson‟s 2009 salary arrears of
GH¢2,794.36 was used to defray part of his indebtedness, leaving
outstanding balances of GH¢12,851.64 and GH¢13,351.64
respectively.
388. In our opinion, management‟s failure to ensure that the officers
made commitments to refund the loans before their departure
accounted for this lapse, which could result in bad debts of
GH¢26,203.28. Consequently, this could negatively affect the fund
growth and deny other officers of the facility.
389. We recommended that management pursue recovery of the
outstanding amount of GH¢26,203.28.
390. Management informed us that Fred Charles Anson has
subsequently proposed to settle his indebtedness between September
2010 and December 2011.
INTERNAL AUDIT AGENCY
Introduction
391. This report relates to the audited accounts of the Internal Audit
Agency for the period 1 January 2008 to 31 December 2009.
86
Operational results
392. The Internal Audit Agency recorded a surplus of
GH¢69,401.08 in 2009 as against a deficit of GH¢12,982.18 in 2008,
registering an improvement over the 2008 deficit of 634.6%. Table 38
provides the performance indicators.
Income
GOG-Subvention
Sundry Income
Total Income
2009
GH¢
2,298,236
20,888
2,319,124
2008
GH¢
1,840,277
139,986
1,980,263
%
Change
24.9
(85.1)
17.1
1,079,501
675,265
336,493
158,464
2,249,723
69,401
447,183
905,478
488,566
152,018
1,993,245
(12,982)
141.4
(25.4)
(31.1)
4.2
12.9
634.6
Expenditure
Administration
Service
Depreciation
Total Expenditure
Excess
Income/Expenditure
of
393. Total Income mainly included Government Subvention and this
increased by 17.1% from GH¢1,980,263 in 2008 to GH¢2,319,124 in
2009. The significant decrease in other income was attributed to non
receipt of funds on World Bank and GOG special projects in 2009.
394. Total Expenditure increased by 12.9% moving from
GH¢1,993,245 in 2008 to GH¢2,249,723 in 2009. Showing significant
increase was Personnel Emoluments moving from GH¢447,183 in
2008 to GH¢1,079,501 in 2009, an increase of 141.4%.
Financial position
395. A summary of the Agency‟s financial position as at 31
December 2009 is shown in the table 39:
87
2009
GH¢
Non-Current Assets
Current Assets
Current Liabilities
Net Current Assets
Net Assets
Liquidity ratio
309,373
500,583
28,827
471,756
781,129
17.4:1
2008
GH¢
467,837
276,192
32,817
243,375
711,212
8.4:1
%
Change
(33.9)
81.2
(12.2)
93.8
9.8
396. Non-Current Assets showed a decrease of 33.9% moving from
GH¢467,837 in 2008 to GH¢309,373 in 2009. There was no addition
to non-current assets in 2009. The decrease was as a result of
depreciation charge for the year.
397. Current Assets increased from GH¢276,192 in 2008 to
GH¢500,583 in 2009, due to increases in Stocks and Cash and Bank
Balances.
398. Net Assets increased marginally by 9.8% rising from
GH¢711,212 in 2008 to GH¢781,129 in 2009. The liquidity position
shown above puts the Agency on a favourable level implying that it
can meet its short-term obligations falling due.
MANAGEMENT ISSUES
Refund of course fees to Armstrong Amanor – GH¢7,620
399. We noted that an amount of GH¢7,620 was refunded to
Armstrong Amanor after completing a course in Executive MBA
(Finance). Though reference was made to the Education and
Development Policy Document of the Agency the effective date of the
document could not be established. Additionally, Amstrong Amanor
had not entered into any Bond with the Agency before proceeding
with the course.
88
400. The practice might be a drain on the Agency if staff are not
lawfully bonded whilst their course fees are absorbed, since the
possibility of a staff leaving the Agency for a better-paid job is very
high after upgrading him/herself.
401. We recommended that Armstrong Amanor payback the
GH¢7,620 to the Agency since the refund to him had no legal basis.
Secondly, Management should have the Employee Education and
Capacity Development policy approved by the Board without delay.
402. Management responded that the Agency would sign a two-year
bond with Armstrong Amanor.
No Alternative Quotations for consultancy services
403. Contrary to Section 66 of the Public Procurement Act, 2003(
Act 663) the Internal Audit Agency awarded consultancy services to
two consultants, Proweb Solutions and Price Waterhouse Coopers at
an amount of GH¢15,488 and GH¢40,817 respectively.
404. We did not sight any alternative quotations or an approval from
the Public Procurement Authority for sole sourcing.
405. The practice has the tendency of blurring transparency and
competitiveness as a result of which the Agency might not obtain
value for money.
406. We recommended that the Agency must comply with relevant
provisions in its procurement dealings in order to obtain value for
money.
Failure to adhere to an agreement on study tour
407. Contrary to the agreement between the World Bank and the
Internal Audit Agency that four staff should undertake a study Tour,
the Agency selected five staff.
408. This amounted to misapplication of grant and had the potential
of preventing other programmes from being undertaken.
89
409. We recommended that the cost of the additional staff on the
study tour be borne by the Agency and not charged to the grant.
Details on disbursement of Commonwealth Funds for Technical
Co-operation not provided – GH¢37,529.08
410. We noted that an amount of GH¢37,529.08 was lodged in
respect of funds receipts which was explained to have come from the
Commonwealth Fund.
411. We could not obtain details as to how the fund was disbursed.
Our request to have the agreement or document covering the receipts
for review could not be met. Also how it was treated in the financial
statement could also not be established.
412. We could therefore not comment on the receipt and utilisation
of the fund to provide accountability assurance to stakeholders.
413. We recommended that Management of the Internal Audit
Agency provide the details for review.
ECONOMIC MANAGEMENT CAPACITY BUILDING
PROJECT
(OFFICE OF THE PRESIDENT)
PUBLIC SECTOR REFORM SECRETARIAT
Introduction
414. This report relates to the audited accounts of the Public Sector
Reform Secretariat (Office of the President) for the year ended 31
December 2009.
Operational results
415. The details of the operations of the Project are provided in table
40:
90
Table 40: Receipts and Expenditure account for 2009
Receipts
Funding
Direct Payments
Refund by PSR
Interest Earned
Total Income
Expenditure
Service Delivery Improvements
Subvented Agencies
Organisational Restructuring of
Civil Service
General Technical Assistance
Operational Cost & Office
Administration
Human Resource Framework
Property & Equipment
Total Expenditure
(Deficit)
2009
US$
1,237,254
485
1,237,739
2008
US$
2,204,597
1,865,360
30,325
44
4,100,326
%
Change
(43.9)
1,002.3
(69.8)
123,579
33,980
546,548
105,917
1,302,538
792,902
16.7
(97.4)
(31.1)
278,775
263,371
682,669
569,485
(59.2)
(53.8)
11,172
46,676
1,304,101
(66,362)
262,538
399,176
4,115,225
(14,899)
(95.7)
(88.3)
(68.3)
345.4
416. Total receipts decreased by 69.8% from US$ 4,100,326 in 2008
to US$ 1,237,739 in 2009. The drop in funding representing funds
received from the International Development Association and non
receipt of direct payments largely accounted for the decrease.
417. Total expenditure also registered a decrease of 68.3% from
US$4,115,225 in 2008 to US$1,304,101 in 2009. This was attributed
to a significant decreases in all expenditure items.
418. The year ended with a deficit of US$66,362 in 2009 as against
US$14,899 in 2008.
Financial position
419. Provided in the table 41 is the financial position as at 31
December 2009.
91
Non-Current Assets
Current Assets
Accumulated Fund
2009
(US$)
14,230
14,230
2008
(US$)
80,592
80,592
%
Change
(82.3)
(82.3)
420. Current Assets, which comprised Bank Balance decreased by
82.3% from US$80,592 in 2008 to US$14,230 in 2009 due to the
large drop in bank balance . The Project had no obligations to meet as
at the year end.
EDUCATION SECTOR PROJECT (EDSEP)
IDA CREDIT NUMBER 38650-GH
SECTOR CAPACITY BUILDING COMPONENT
Introduction
421. This report relates to the audited accounts of Education Sector
Project (EdSeP) (IDA Credit Number 38650-GH) Sector Capacity
Building Component for the year ended 31 December 2008.
Operational results
422. The Project made a surplus of US$90,640 in 2008 as compared
with a deficit of US$67,415 in the previous year. Comparative figures
for the two years 2008 and 2007 are summarised in table 42.
Income
Funding
Interest Income
Sale of Bidding Documents
Total Income
92
2008
US$
1,312,105
1,245
756
1,314,106
2007
US$
4,308,072
817
15,001
4,323,890
%
Change
(69.5)
52.4
(95.0)
(69.6)
Expenditure
Civil Works
Goods
Consultants
Services
Training
Operating Costs
Exchange Loss
Total Expenditure
Surplus / (Deficit)
&
999,317
83,430
85,236
1,260,794
2,538,825
505,024
(20.7)
(96.7)
(83.1)
54,660
825
1,223,466
90,640
85,873
789
4,391,305
(67,415)
(36.3)
4.6
(72.1)
234.5
423. Total Income received reduced from US$4,323,890 in 2007 to
US$1,314,106 in 2008, representing a decrease of 69.6%. This was
attributable to reduction in all revenue sources except Interest Income.
424. Total Expenditure dropped from US$4,391,305 in 2007 to
US$1,223,466 in 2008, a decrease of 72.1%. The reduction was due to
a fall in expenditure on Civil Works, Goods, Consultants Services &
Training and Operating Costs.
Financial position
425. Financial position as at 31 December 2008 is presented in table
43.
Item
2008
2007
%
US$
US$
Change
Current Assets
885,931
660,960
34.0
Current Liabilities
333,095
198,764
67.6
Net Current Assets
552,836
462,196
19.6
Current Ratio
2.7:1
3.3:1
426. Current Assets increased by 34.0% from US$660,960 in 2007
to US$885,931 in 2008. This was due to increase in Bank Balances.
427. Current Liabilities went up by 67.6% from US$198,764 in
2007 to US$333,095 in 2008. The increase was due to a rise in
Certified Works not paid for and Retention Held.
93
428. The Sector can meet its short-term obligations even though its
liquidity position measured by the current ratio fell from 3.3:1 in 2007
to 2.7:1 in 2008.
GHANA INSTITUTE OF MANAGEMENT AND
PUBLIC ADMINISTRATION (GIMPA)
Introduction
429. This report is related to the audited accounts of Ghana Institute
of Management and Public Administration (GIMPA) for the year
ended 31 December 2008.
Operational results
430. Total Income went up by 39.6% from GH¢9,263,229 in 2007 to
GH¢12,935,153 in 2008. This increase was due mainly to a rise in
student numbers for the Graduate School which also led to an increase
in the hospitality services provided.
2007 to GH¢10,825,140 in 2008. This was attributed mainly to a
41.5% rise in Personnel Emoluments and a 21.3% increase in
Administrative and General Expenses. The significant increase in
depreciation charge accounted mainly for the rise in administration
and general expenses. Presented in table 44 are the details of the
performance indicators.
Income
2008
GH¢
Income
Total Income
12,935,153
Expenditure
4,602,246
Administrative
& General 3,746,574
Expenses
Other Operating Cost
2,476,320
Total Expenditure
10,825,140
Surplus / (Deficit)
2,110,013
94
2007
GH¢
%
Change
9,263,229
39.6
3,252,646
3,089,938
41.5
21.3
2,187,706
8,530,290
732,939
13.2
26.9
187.9
432. The Institute recorded a surplus of GH¢2,110,013 for the year
under review as against GH¢732,939 in 2007, showing a 187.9% rise.
Financial position
433. Presented in table 45 are the movements in the financial
positions for the two comparative years.
Item
Non-Current Assets
Current Assets
Current Liabilities
Net Current Assets / Liabilities
Net Assets
Current Ratio
2008
GH¢
9,939,186
3,332,789
3,090,485
242,304
10,181,490
1.1:1
2007
GH¢
9,186,352
2,162,351
2,356,138
(193,787)
8,992,565
0.9:1
%
Change
8.2
54.1
31.2
225.0
13.2
434. Non-Current Assets increased by 8.2% from GH¢9,186,352 in
2007 to GH¢9,939,186 in 2008. This was due to a 7.0% increase in
Property, Plant and Equipment resulting from acquisitions and a
18.6% increase in Deposits. The deposits represent payment towards
the acquisition of State Construction Corporation yards in Kumasi,
Takoradi and Tamale to operate satellite campuses and payments to
Green Trade Limited for the supply of kitchen equipment.
435. Current Assets rose by 54.1% from GH¢2,162,351 in 2007 to
GH¢3,332,789 in 2008. This was mainly due to a 99.0% increase in
Debtors and Prepayments. The debtors was made up of programme
debtors, staff loans and advances
436. Current Liabilities increased by 31.2% from GH¢2,356,138 in
2007 to GH¢3,090,485 in 2008. This resulted from a 28.9% increase
in Prepaid Academic Fees.
The Institute‟s current ratio of 1.1:1 (2007: 0.9:1) fell below the
benchmark of 2:1 thus indicates its inability to meet its short-term
obligations when they fall due.
95
MANAGEMENT ISSUES
Bank overdraft - GH¢277,869
437. We observed that the following bank balances per the cash
book were overdrawn at the end of the year to the tune of
GH¢277,869 while the total favourable balance per the other cash
book was GH¢576,075.
Bank
Ghana Commercial Bank
Unibank (US$)
Unibank Call Account
Unibank Main
Total
438.
Amount (GH¢)
10,044.97
15,179.46
70.72
252,573.85
277,869.00
The implications are that:
1) Cash balances were not effectively managed
2) Bank accounts were not effectively monitored
3) The Institute could incur high bank charges
439. We recommended that the bank accounts be effectively
managed to ensure that they are not unduly overdrawn.
440. Management responded that an effective Cash Management
System has been put in place to avoid the recurrence of overdrawn
bank account.
Insurance of buildings
441. We observed that the buildings of the Institute were not
covered by any insurance policy.
442. The Institute stands the risk of losing its property without any
compensation should fire or any disaster occur.
443. We recommended that the Institute take immediate steps to
ensure that the buildings are insured. Management responded that
GIMPA‟s All Risk Policy for 2010 includes insurance of buildings.
96
UNIVERSITY OF CAPE COAST
Introduction
444. This report is in respect of the audited accounts of the
University of Cape Coast for the year ended 31 December 2008.
Operational results
445. Total Income for the year ended 31 December 2008 amounted
to GH¢65,200,091, thus showing an increase of 59.8% over the
previous year‟s figure of GH¢40,795,301. The increase was due to
significant increases in Government Grant, Research Grant and
Donations received. The large increase in other operating profit
resulting from increases in revenue from the University mortuary and
maintenance income project also accounted for the rise in total
income. Table 46 presents the performance indicators.
Income
2008
2007
GH¢
GH¢
Government Grant
36,710,637 19,892,909
Research Grant
62,277
26,943
Donations Received
336,792
164,285
Admissions Fees
17,697,659 13,697,300
Examination Fees
3,913,209 3,144,139
Miscellaneous Income
6,161,057 3,643,031
ICT Net Profit
43,163
156,147
Other Operating Profit
275,297
70,547
Total Income
65,200,091 40,795,301
Expenditure
Academic Expenses
26,137,823 18,988,556
Library Acquisitions
1,604,285
759,469
Research
306,376
178,727
4,509,770 3,912,740
Students & Staff Facilities
8,168,462 5,649,928
Estate Services
6,949,609 4,779,630
Pensions & Gratuity
815,762
674,670
%
Change
84.5
131.1
105.0
29.2
24.5
69.1
(72.4)
290.2
59.8
37.7
111.2
71.4
15.3
44.6
45.4
20.9
97
Miscellaneous Expenses
Total Expenditure
Surplus
1,791,955 1,074,862
50,284,042 36,018,582
14,916,049 4,776,719
66.7
39.6
212.3
446. Total Expenditure increased from GH¢36,018,582 in 2007 to
GH¢50,284,042 in 2008, representing an increase of 39.6%. The
increase was due to the increases in the various expenditure items as
shown in table 46.
447. The School‟s operations for 2008 ended with a surplus of
GH¢14,916,049 as against GH¢4,776,719 reported in the previous
year 2007.
Financial position
448. Shown in table 47 is the financial position as at 31 December
2008
Item
2008
2007
GH¢
GH¢
Tangible
Assets
and 50,615,335 36,556,173
Investments
Current Assets
17,332,616 9,509,793
Current Liabilities
10,522,973 9,166,834
Net Assets
57,424,977 36,899,131
Current Ratio
1.6:1
1.0:1
%
Change
38.5
82.3
14.8
55.6
449. An increase in Fixed Assets (Tangible Assets and Investments)
of 38.5% was registered as it went up from GH¢36,556,173 in 2007 to
GH¢50,615,335 during the year under review. The increase was as a
result of 28.1% increase in Investments and the acquisition of Motor
Vehicles and Equipment during the year.
450. Current Assets increased by 82.3% to GH¢17,332,616 in 2008
from GH¢9,509,793 in 2007. This was as a result of 226.3% increase
98
in Departmental Stock and Stores and 89.3% increases in Cash and
Bank Balances.
451. Current Liabilities went up 14.8% from GH¢9,166,834 in 2007
to GH¢10,522,973 in 2008. The increase was mainly due to the 13.5%
increase in payables to Contractors and Other Creditors and 32.9%
increase in Accruals and Other Balances.
452. Liquidity as depicted by a current ratio of 1.6:1 (2007:1.0:1)
appears not to be favourable indicating the inability of the University
to meet its short-term obligations when they fall due.
MANAGEMENT ISSUE
Overdue debt – GH¢37,432.27
453. We noted that an amount of GH¢37,432.27 was due from
Samuel Kwarfo Opare as being special advance, imprest and
embezzlement. Details are shown below:
Subject
Special Advance
Imprest
Embezzlement
Amounts
GH¢
5,329.92
1,500.00
30,602.35
37,432.27
454. We recommended that this amount be treated as sundry debtors
and efforts be made to retrieve these monies from guarantors as we
did not see much effort from the University authority for the retrieval.
455. Management responded that the embezzlement case has been
reported to the police.
99
MANAGEMENT DEVELOPMENT AND PRODUCTIVITY
INSTITUTE (MDPI)
Introduction
456. This report relates to the audited accounts of the Management
Development and Productivity Institute (MDPI) for the year ended 31
December 2008.
Operational results
457. Table 48 is a summary of performance during the period under
review.
Income
Government Subvention
Internally Generated Funds
Total Income
Expenditure
Personal Emoluments
Service Activities
Administration
Total Expenditure
Surplus/(Deficit)
2008
GH¢
418,264
732,050
1,150,314
2007
GH¢
347,399
415,593
762,992
%
Change
20.4
76.1
50.8
450,059
250,592
388,990
1,089,641
60,673
335,996
132,333
273,955
742,284
20,708
33.9
89.4
42.0
46.8
193.0
458. The Institute‟s Total Income increased by 50.8% from
GH¢762,992 in 2007 to GH¢1,150,314 in 2008. The increase was
largely due to a 76.1% rise in Internally Generated Funds which
comprised revenue from In-Plant Training and gain on Foreign
Currency Translation.
459. Total Expenditure increased by 46.8% from GH¢742,284 in
2007 to GH¢1,089,641 in 2008. The increase was mainly due to
general increases in all expenditure items. The large increase in
Service activity‟s expenditure was due to expenditure on other
courses.
100
460. The Institute recorded a surplus of GH¢60,673 in 2008 as
against GH¢20,708 in 2007 representing a 193.0% increase over the
previous year.
Financial position
461. Table 49 provides the financial position as at 31 December
2008.
Non-Current Assets
Current Assets
Current Liabilities
Net Current Asset
Net Assets
Current Ratio
2008
GH¢
416,841
474,560
206,804
267,756
684,597
2.3:1
2007
GH¢
418,408
349,860
144,344
205,516
623,924
2.4:1
%
Change
(0.4)
35.6
43.3
30.3
9.7
462. Non-Current Assets decreased marginally by 0.4% from
GH¢418,408 in 2007 to GH¢416,841 in 2008. This was due to Capital
Grants received set off against Property, Plant and Equipment.
463. Current Assets increased by 35.6% from GH¢349,860 in 2007
to GH¢474,560 in 2008. This was largely due to increases in Stocks,
Government Treasury Bills and Cash and Bank Balances.
464. Current Liabilities also increased by 43.3% from GH¢144,344
in 2007 to GH¢206,804 in 2008. This increase was largely due to rises
in M.D.P.I Savings Scheme, Other Creditors, Staff Incentives and
Audit Fees.
465. Current ratio fell from 2.4:1 in 2007 to 2.3:1 in 2008. The
decrease however will not affect the short-term solvency of the
Institute since 2.3:1 continued to be above the bench mark.
101
MANAGEMENT ISSUES
Differences in staff loan balances
466. Our audit revealed material differences between ledger
balances and the schedule total that supported these balances. The
following are the breakdowns:
Loan
Car/Motor Bike
Salary Advance
Special Loan
Rent Advance
Other Loans
Purchase for Staff
Total
Ledger
Balances
26,284
1,534
17,407
11,745
7,839
1,249
66,058
Schedule
Totals
24,675
104
3,399
10,131
6,289
44,598
Difference
1,609
1,430
14,008
1,614
1,550
1,249
21,460
467. This anomaly was due to lack of reconciliation between the
payroll and general ledger section of the accounts department. This
could result in Staff Debtors balance not being reliable and lead to loss
of funds.
468. We recommended that the differences be corrected and advised
that there should be regular reconciliation between the payroll and
general ledger section of the accounts department. We also
recommended that data for loans granted and deductions from payroll
should be the source of updates in the ledger.
GHANA EDUCATION TRUST FUND
Introduction
Education Trust Fund (GETFUND) for the year ended 31December
2009.
102
Operational results
470. Total Revenue of the Fund rose by 72.3% from GH¢1,463,267
in 2008 to GH¢2,520,650 in 2009 as a result of an increase in
Operational Allocations and Other Income. The increase in other
income arose mainly from the rise in hostel management income.
471. Total Expenditure also showed an upward movement of 72.2%
from GH¢1,365,449 in 2008 to GH¢2,351,652 in 2009. The rise
resulted mainly from increases in staff salaries &allowances, board
fees and expenses, maintenance & running of vehicles and hostel
management expenses.
472. Consequently, the Fund recorded a 72.8% increase in surplus to
GH¢168,998 in 2009 as against the 2008 figure of GH¢97,818.
Detailed in table 50 are the performance indicators.
Revenue
Operational Allocations
Investment Income
Other Income
Total Revenue
Expenditure
General and Administration
Surplus
2009
GH¢
1,800,000
720,650
2,520,650
2008
GH¢
1,000,000
200,000
263,267
1,463,267
%
Change
80.0
173.7
72.3
2,351,652
168,998
1,365,449
97,818
72.2
72.8
Financial position
473. Presented in table 51 is the summarised Balance sheet of the
Fund as at 31 December 2009.
103
Non-Current Assets
Current Assets
Current Liabilities
Net Assets
Current Ratio
2009
GH¢
24,163,079
151,053,227
157,546,252
17,670,054
1.0:1
2008
GH¢
23,565,581
83,537,593
86,430,334
20,672,840
1.0:1
%
Change
2.5
80.8
82.3
(14.5)
474. Non-Current Assets, made up of property, plant & equipment,
investment properties and construction work-in-progress marginally
rose by 2.5% from GH¢23,565,581 in 2008 to GH¢24,163,079 in
2009.
475. Current Assets however registered a significant rise of 80.8%
from GH¢83,537,593 in 2008 to GH¢151,053,227 in 2009. This was
due to an increase of GH¢103,014,773 due from MOFEP, which
represents 88.2% of the Current Assets.
476. Current Liabilities rose by 82.3% in 2009 from GH¢86,430,334
in 2008 to GH¢157,546,252 in 2009. This was largely attributed to
increase in the amounts due to beneficiaries.
477. The Fund‟s current ratio stood at 1.0:1 in 2009 compared with
1.0:1 in 2008 indicating that the Fund would not be able to discharge
its short term obligations as and when they fall due.
UNIVERSITY OF EDUCATION – WINNEBA
Introduction
478. This report is on the audited accounts of the University of
Education – Winneba for the year ended 31 December 2009.
Operational results
479. The performance indicators for the period are shown in table
52.
104
Income
Government Subvention & Other Grants
Donor Funds
Fees and other Income
Total Income
Expenditure
Administration Activity
Service Activity
Investment
Total Expenditure
Surplus
2009
GH¢
19,990,964
2,474
21,477,499
41,470,937
2008
GH¢
20,163,747
8,441
13,569,021
33,741,209
%
Change
(0.9)
(70.7)
58.3
22.9
20,573,306
5,891,079
4,504,328
1,374,345
32,343,058
9,127,879
16,782,721
5,173,206
3,196,796
959,516
26,112,239
7,628,970
22.6
13.9
40.9
43.2
23.9
19.6
480. Total Income increased by 22.9% from GH¢33,741,209 in
2008 to GH¢41,470,937 in 2009. This was due to a 58.3% rise in
Fees and Other Income from GH¢13,569,021 in 2008 to
GH¢21,477,499 in 2009.
481. Total Expenditure rose by 23.9% from GH¢26,112,239 in 2008
to GH¢32,343,058 in 2009.
Increases in cost of Personnel
Emoluments, Administration, Service Activity and Investment
accounted for the rise. The increase in Administration cost was due to
rises in bank charges, management allowances and council/
subcommittee meetings expenses.
482. The significant increase in sandwich/remedial programme
expenses largely resulted in the rise in service activity cost whilst the
rise in investment cost was due to additions to ICT equipment &
software, administration and other equipment.
483. The University recorded a surplus of GH¢9,127,879 in 2009 as
against GH¢7,628,970 in 2008, representing a 19.6% rise.
105
Financial position
484. Table 53 shows the movement in the financial position of the
University:
Item
Non-Current Assets
Current Assets
Current Liabilities
Net Current Assets
Net Assets
Current Ratio
2009
GH¢
17,847,351
20,885,172
2,584,654
18,300,518
36,147,869
8.1:1
2008
GH¢
13,958,037
13,798,053
744,791
13,053,262
27,011,299
18.5:1
%
Change
27.9
51.4
247.0
40.2
33.8
485. Non-Current Assets rose by 27.9% from GH¢13,958,037 in
2008 to GH¢17,847,351 in 2009. This was as a result of additions to
Property, Plant, and Equipment.
Accounts Receivable and a 48.6% rise in Investment.
2008 to GH¢2,584,654 in 2009. This was due to a rise in Accounts
Payable and Overdraft Facility.
488. The current ratio of the University fell from 18.5:1 in 2008 to
8.1:1 in 2009. The decrease, however would not affect the short term
solvency of the University since it exceeded the benchmark.
MANAGEMENT ISSUE
High cost of repairs of certain vehicles - GH¢40,475.23
489. We noted that funds disbursed for repairs of certain University
vehicles were on the high side. Some of these vehicles have been in
use for between five and eight years and appeared to be old. The total
106
cost for repairs of five of such vehicles amounted to GH¢40,475.23.
These vehicles are:
Vehicle
GW 4874 T
GR 8424 T
GT 8185 X
GV 902 R
GT 2515 V
Total
No. of years in use
8 yrs
7 yrs
4 yrs
10 yrs
7 yrs
Amount
GH¢
9,757.65
8,856.66
7,925.85
7,464.50
6,470.57
40,475.23
490. We view this as a drain on the limited financial resources of
the University and recommended that management consider
auctioning some of the above listed vehicles and replace them with
new ones.
UNIVERSITY OF GHANA BUSINESS SCHOOL
Introduction
491. This report relates to the audited accounts of University of
Ghana Business School (UGBS) for the year ended 31 December
2009
Operational results
492. Total Income realised for the year under review amounted to
GH¢9,773.754, thus registering an increase of GH¢3,211,122 or
48.9% over the previous year‟s figure of GH¢6,562,632. Internally
Generated Funds (IGF) contributed 68.7% of total income for year
2009 whilst Government Subvention accounted for the rest, thus
31.3%. The increase in total income was mainly attributed to the rise
in IGF resulting from increases in MBA and EMBA fees.
close year 2009 at GH¢9,103,816, representing an increase of 43.5%.
The rise was mainly due to expenditure increase in Travelling and
Transport, General Administration and Other Expenses, Educational
Expenses, Residence Services and General Maintenance Expenses.
107
494. The School closed the financial year with an operational
surplus of GH¢669,938 representing an increase of GH¢449,954 or
204.5% over that of the previous year which stood at GH¢219,984.
Performance indicators are presented in table 54.
Income
Grant
Total Income
Expenditure
Honorarium
Travelling and Transport Expenses
General Administration & Other
Expenses
Educational Expenses
Residence Service
Official Entertainment Expenses
General Maintenance
Total Expenditure
Surplus
2009
GH¢
3,060,370
6,713,384
9,773,754
2008
GH¢
2,585,345
23,776
3,953,511
6,562,632
%
Change
18.4
69.8
48.9
3,471,535
950,837
475,120
1,323,007
2,699,204
843,348
278,723
829,083
28.6
12.7
70.5
59.6
825,435
118,061
398.230
1,541,591
9,103,816
669,938
488,256
73,633
292,248
838,153
6,342,648
219,984
69.1
60.3
36.3
83.9
43.5
204.5
Financial position
495. Presented in table 55 is the summarised balance sheet as at 31
December 2009
2009
2008
GH¢
GH¢
Current Assets
3,962,313
3,467,065
Current Liabilities
93,730
268,420
Net Assets
3,868,583
3,198,645
Financed By
Accumulated Fund
3,868,583
3,198,645
Current Ratio
42.3:1
12.9:1
108
%
Change
14.3
(65.1)
20.9
20.9
496. An increase in Net Assets of 20.9% was registered as Total
Assets went up from GH¢3,198,645 in 2008 to GH¢3,868,583 during
the year under review. Investments, which is made up of Fixed
Deposits and Call Account accounted for 64.0% of Current Assets.
497. The decline in Current Liabilities from GH¢268,420 in 2008 to
GH¢93,730 in 2009 was mainly due to 65.1% improvement in
settlement of accruals.
498. The Accumulated Fund of the school recorded an increase of
20.9%, from GH¢3,198,645 in 2008 to GH¢3,868,583 in 2009, as a
result of the significant surplus realised during the year.
499. The School‟s current ratio is in a favourable position to meet its
short-term obligations as they fall due.
MANAGEMENT ISSUE
Credit balances on loans and advances – GH¢2,410.99
500. We observed that some of the staff loans and advances
balances were in credit to the tune of GH¢2,410.99 as detailed below.
PV
8900/004
8900/007
8900/014
8900/017
8900/034
8900/035
8900/036
8900/081
8900/082
8900/089
8900/108
8900/109
8900/112
8900/130
8900/181
Total
Name
Boachie-Danquah Yaw
Osei-Safo Kwame
Aboagye A. Q. Q
Domfeh Kwame Ameya
Abor Joshua
Kyereboah-Coleman Anthony
Adjasi Charles Komla
Omane David
Torgbor Samuel Obodai
Sulley Yartey
Felli Raymond A.
Peace-Biney Jerome
Acolor Frederick K.
Dadzie Albert
Sackey Joycelyn
Amount
GH¢
341.53
79.96
11.66
74.22
0.01
153.00
480.16
11.60
281.75
220.00
0.03
82.58
550.00
51.16
73.33
2,410.99
109
501. The implication is that the School was indebted to the above
listed staff as a result of over deductions or errors on the part of the
Officer in charge.
502. We recommended that management investigate the credit
balances on loans and advances to staff for refund or write off.
NATIONAL BOARD FOR PROFESSIONAL AND
TECHNICIAN EXAMINATIONS
Introduction
503. This report relates to the audited accounts of National Board
for Professional and Technician Examinations for the year ended 31
December 2009.
Operational results
504. Total income registered a decrease of 7.3% from
GH¢1,067,306.77 in 2008 to GH¢989,782.98 in 2009. Government
subvention, which remained the major source of income, dropped
marginally by 4.2% because book and research allowances were not
fully received from government before the close of the year under
review. Internally Generated Funds (I.G.F.)/Other Income likewise
went down by 11.0%. This was mainly due to a fall in receipt of Exam
and Certificates Fees which constituted the major source of IGF
revenue in 2009 resulting from the withdrawal by Kumasi and
Sunyani Polytechnics from NABPTEX control. Table 56 shows the
Income
I.G.F./ Other Income
Total
Expenditure
Personnel emoluments
General Administration
110
2009
GH¢
558,808.98
430,974.00
989,782.98
2008
GH¢
583,116.82
484,189.95
1,067,306.77
%
Inc./ Dec.
(4.2)
(11.0)
(7.3)
499,717.95.
400,535.21
491,647.69
273,506.20
1.64
46.4
Service
Total
Excess
Income/Expenditure
127,073.74
1,027,326.90
(37,543.92)
227,393.14
992,547.03
74,759.74
(44.1)
3.5
(150.2)
505. Total expenditure of the Board rose marginally by 3.5 % from
GH¢992,547.03 in 2008 to GH¢1,027,326.90 in 2009. The rise of
46.4% in the Board‟s General Administration expenses mainly as a
result of payments on hire of equipment and rent of office building
accounted for the increase in total expenditure. The Board recorded a
net loss of GH¢37,543.92 compared with a surplus of GH¢74,759.74
for 2008, thus showing a decline of 150.2 % in its operational
performance.
Financial position
Total Fixed Assets of the Board increased by 5.9% from
GH¢178,304.27 in 2008 to GH¢188,786.22 at the end of 2009, due to
the purchase of new equipment.
506. Current Assets dropped by 70.2% from GH¢70,935.47 in 2008
to GH¢20,909.60 in 2009 resulting from decreases in bank and
debtors. The Board had no outstanding commitments to settle at the
end of the financial year.
MANAGEMENT ISSUE
Outstanding repair cost on accident vehicle - GH¢1,247.97
507. Contrary to Chapter 1616 of Stores Regulation 1984, no Police
Report was obtained for an accident involving an official vehicle with
registration No. GE266Y driven by the Deputy Executive Director.
Consequently, only GH¢900.00 out of GH¢2,147.97 incurred by the
Board in repairing the vehicle was refunded by the driver of the other
vehicle alleged to be guilty, leaving an outstanding balance of
GH¢1,247.97 as at the time of reporting.
111
508. We recommended that in future police report should be
obtained in all accidents in order to apportion blame and assign
responsibility of cost recovery. We also recommended that the
outstanding cost of repairs of GH¢1,247.97 be recovered from the
alleged guilty driver, otherwise the Deputy Executive Director should
be surcharged.
509. Management accepted our recommendation, but stated that the
Police who were a party to the arbitration before the repairs were still
investigating the case.
GHANA ACADEMY OF ARTS AND SCIENCES
Introduction
510. This report covers the audited accounts of the Ghana Academy
of Arts and Sciences for the period 1 January 2008 to 31 December
2009.
Operational results
511. The year 2009 ended with a surplus of GH¢294.43 as against
GH¢77,598.28 for 2008, registering a significant reduction of 99.6%.
512. Presented in table 57 is a summary of the income and
expenditure account of the Academy for the year ended 31 December
2009.
2009
2008
%
Income
Subvention
Others
Total
Personal emolument
Administration
Service
Total
Surplus/Deficit
112
GH¢
309,257.18
5,393.22
314,650.40
248,905.20
54,678.95
10,771.82
314,355.97
294.43
GH¢
275,826.84
40,955.61
316,782.45
166,305.78
60,087.72
12,790.67
239,184.17
77,598.20
Change
12.1
(86.8)
(0.7)
49.7
(9.0)
(15.8)
31.4
(99.6)
513. Total income for the year decreased by GH¢2,132.05 from
GH¢316,782.45 in 2008 to GH¢314,650.40 in 2009. This decrease
was due to a drop of 86.8% in other sources of income from
GH¢40,955.61 in 2008 to GH¢5,393.22 in 2009.
514. Total expenditure on the other hand registered an increase of
31.4% from GH¢239,184.17 in 2008 to GH¢314,355.97 in 2009. This
was due to a rise in personnel emolument as a result of salary increase.
Financial position
515. Fixed assets stood at GH¢34,764.78 in 2009, representing a
decrease of GH¢6,025.30. The decrease was due to depreciation of the
assets.
516. Current assets conversely increased by GH¢7,999.53 due to
increase in stock of publications and cash at bank. Included in the cash
balance is an amount of GH¢1,506.59 for the Academy‟s dollar
account at Bank of Ghana. We noted that over the years the amount
had been the same. Management could not provide us with the initial
dollar amount deposited in the account, alleging that efforts to trace
the account proved futile. We recommended that management take
appropriate action on the account to ensure accurate disclosure.
517. Accumulated fund registered a marginal increase of
GH¢1,974.23, a rise of 1.5% from GH¢134,002.20 in 2008 to
GH¢135,976.43 in 2009.
MANAGEMENT ISSUES
Absence of Audit Reports Implementation Committee (ARIC)
518. We observed that contrary to Section 30 of the Audit Service
Act 2000, Act 584 no ARIC had been established by the Academy.
The absence of ARIC could result in the non-implementation of
recommendations made in audit and other monitoring reports. We
recommended and management agreed to constitute one without
further delay.
113
Overpayment of special allowance – GH¢2,949.15
519. Our audit disclosed that 10 members of staff of the Academy
were overpaid a total of GH¢2,949.15 in arrears of special allowance
for the period January 2008 to May 2008. This resulted from wrong
computation of the special allowance by the Accountant, alluding it to
oversight.
520. We were of the opinion that there was no effective supervision
in the Accounts Department because of the absence of a substantive
Finance Director. Such anomalies could put financial stress on the
Academy‟s funds needed for other developmental programmes.
521. Management was advised to recover the overpayment from the
respective staff. We also advised responsible officials to exercise due
diligence in the performance of their duty, otherwise they would be
surcharged accordingly for any future losses.
We further
recommended that managerial supervision be improved in the
Accounts Office.
522. Management responded that the Accounts Department has been
directed to recover the overpayment of special arrears from salaries of
affected officers, which it decided to spread over an 18 months period
with effect from June 2010.
HOTEL, CATERING AND TOURISM TRAINING
INSTITUTE (HOTCATT)
523. This report covers the audited accounts of the Hotel, Catering
and Tourism Institute for the period 1 January 2008 to 30 June 2009
before its merger with Ghana Institute of Management and Public
Administration (GIMPA).
114
MANAGEMENT ISSUES
Retention and use of IGF without legislative approval GH¢3,025.00
524. Regulation 17 (b) of L.I 1802 stipulates that, “the head of
department shall ensure that all Non-Tax Revenue is immediately
lodged into the designated Consolidated Fund transit bank‟s accounts
except in the case of Internally Generated funds retained under an
enactment”.
525. Contrary to the provisions of the FAR, management used total
IGF of GH¢3,025.00 to meet operational expenses without legislative
approval. We also noted that management did not disclose the IGF in
budgets of the respective years.
526. To enhance the pooling and efficient allocation of government
resources, we recommended that management seek approval for the
retention and subsequent use of its IGF; otherwise the amount should
be paid into the Consolidated Fund. Additionally, IGF of the Institute
should be projected in budgets in compliance with Regulation 159 of
L.I 1802.
527. Management explained that over the years, the funds were used
to supplement the inadequate budgetary allocation of the Institute and
that it had initiated action at obtaining approval for the retention of the
IGF.
Fuel not recorded in vehicle log books - GH¢2,900.00
528. Chapter 1604 of Store Regulations provides that a vehicle
logbook shall be maintained for each vehicle and shall always be
carried on the vehicle. Journeys undertaken shall be recorded and the
driver shall enter up daily on the logbook full particulars of receipt of
fuel, oil and lubricants.
529. Our audit revealed that GH¢2,900.00 worth of fuel coupons
allegedly purchased and issued to official vehicles were not recorded
in the respective vehicle log books in breach of the regulation stated
115
above. The omission was as a result of lack of supervision over the
drivers that could lead to diversion of fuel and eventual loss of state
funds.
530. We recommended that management put proper controls in
place to ensure that drivers properly account for fuel purchases.
Management responded that it had charged the drivers to record the
fuel issued to them in the logbooks.
Failure to withhold tax – GH¢326.88
531. The Accountant failed to withhold the statutory 5% tax on
payment for goods and services acquired for the Institute amounting to
GH¢5,096.75 in contravention of Section 84(2) (a) and (b) of the
Internal Revenue Act 2000 (Act 592).
In a related development, we noted that the Accountant did not deduct
Pay As You Earn (PAYE) tax of GH¢72.04 from a payment of
GH¢720.49 being salary difference accruing to a staff. These
omissions resulted in the state losing GH¢326.88 in tax revenue.
532. Management explained that this was an oversight and that
about 99% of the period‟s transaction attracted withholding tax, which
was accordingly remitted to IRS.
533. To forestall loss of state revenue, we recommended that the
Accountant be more diligent in the performance of his duties by
complying fully with the tax law.
Management noted that the staff, who was on pension, has been
written to, to pay the amount of GH¢72.04 involved to the
Commissioner of IRS.
Unearned salary of a separated staff - GH¢281.28
534. Contrary to Regulation 297 of L.I 1802, management failed to
cause the immediate stoppage of payment of salary to a staff who died
in September 2008.
116
535. As a result of the delay in informing the Controller and
Accountant-General and the deceased staff‟s bankers for the stoppage
of the salary, GH¢281.18 unearned salary was paid into the separated
staff‟s bank account between September 2008 and February 2009.
536. We recommended that management take the necessary steps to
recover the money from the next of kin of the deceased staff if the
money has been withdrawn or request the bank to refund it to
Government chest.
Management stated that a letter had been sent to the deceased‟s
bankers to pay the money to Government chest.
Failure to respond to management letter
537. Section 29 of the Audit Service Act, 2000, (Act 584) provides
that, the Auditor-General or any authorised person acting on his behalf
shall as a result of an audit conducted issue observations to the
management of the audited organisation and the comment made by
management should be returned to the Auditor-General within 30 days
after the receipt of the observations.
538. Section 29(2) of the same Act further states that “any person
who fails to reply to the audit observations within the period specified
shall, if the Auditor-General so desires have his emoluments and
allowances withheld for so long as the person fails to comply”.
539. As at the time of reporting, management had not responded to
our previous management letter referenced CAD/DA/46/Vol.1/20
dated 12 May 2009. Management‟s non-compliance with the
regulation amounted to breach of financial discipline, which would
result in recurrence of irregularities highlighted in the report.
540. To avoid sanctions by the Auditor-General, we recommended
that management respond to audit observations within the stipulated
period.
117
541. Management apologised for the anomaly and noted that the
reply to our previous management letter was ready but failed to
furnish us with a copy.
INSTITUTE OF PROFESSIONAL STUDIES
Introduction
542. This report covers the audited accounts of the Institute of
Professional Studies for the year ended 31 December 2008.
Operational results
543. The Institute realised an operating surplus of GH¢2,071,934.14
in 2008 as against GH¢297,821.38 recorded in 2007. This represents
an increase of 595.7% over that of the previous year figure and was
largely due to the 53.2% rise in income matched by a 19.1% rise in
expenditure.
544. Presented in table 58 are the comparative performance
indicators for 2008 and 2007 financial years.
Income
GetFund
Internally Generated Fund
Investment Income
Total Income
Expenditure
Utilities
Sanitation Charges
Office Consumables
Printing, publications &
Research
Rent
Motor Vehicle Expenses
118
2008
GH¢
2,696,332.93
961,207.54
4,038,932.67
18,245.95
7,714,719.09
2007
GH¢
1,999,001.85
691,814.36
2,335,690.41
10,542.54
5,037,049.16
%
Change
34.9
38.9
72.9
73.1
53.2
3,023,251.54
133,563.83
43,013.01
285,577.07
211,323.76
2,337,203.11
125,620.30
22,514.07
211,424.48
227,869.25
29.4
6.3
91.0
35.1
(7.3)
48,096.58
122,579.24
18,528.74
205,775.79
159.6
(40.4)
Repairs & Maintenance
Admission & Examination
Expenses
Charges & Fees
Training / Conference /
Workshop Cost
Staff Development &
Welfare
Governance
Total Expenses
Surplus / (Deficit)
97,620.97
282,933.34
127,626.82
239,757.41
(23.5)
18.0
342,186.13
46,138.48
281,710.24
163,678.99
21.5
(71.8)
211,745.68
133,864.54
58.2
794,755.32
5,642,784.95
2,071,934.14
643,654.04
4,739,227.78
297,821.38
23.5
19.1
595.7
545. Total Income for the year under review rose by 53.2% to
GH¢7,714,719.09 as compared to the previous year‟s figure of
GH¢5,037,049.16. The rise was as a result of significant increases of
72.9% and 73.1% in IGF and Investment Income respectively.
Government Subvention and Internally Generated Funds contributed
35.0% and 52.4% respectively of Total Income for the year.
546. Total
Expenditure for the period amounted to
GH¢5,642,784.95 as against GH¢4,739,227.78 recorded in 2007. This
showed an increase of GH¢903,557.17 representing 19.1% over the
previous year‟s expenditure.
547. Personnel Emoluments accounted for 53.6% of Total
Expenditure and its upward movement by 29.4% was due mainly to
pay increase during the year. Staff Development and Welfare
Expenses witnessed a sharp increase in the year‟s expenditure by
58.2%. This was largely due to increase in payment of retirement
benefits and high cost of drugs and medical supplies. Even though the
figure for Rent Expense looked immaterial, it witnessed astronomical
increase of 159.6% over the previous year‟s figure and this was due to
increase in payment of rent-residential.
548. Motor Vehicle Expenses and Training/Conference/Workshop
Cost on the other hand decreased by 40.4% and 71.8% respectively.
The reduction was as a result of prudent measures taken by
119
Management to control the usage of fuel and lubricants for official
vehicles and control over payment of out-station allowance.
Financial position
549. Table 59 provides a summarised balance sheet of the Institute
as at 31 December 2008
Non-Current Assets
Current Assets
Current Liabilities
Long-Term Liabilities
Net Assets
Current Ratio
Represented By:
Accumulated Funds
Revaluation Surplus
2008
GH¢
5,612,328.06
1,745,737.18
57,858.00
1,113,485.44
7,300,207.24
30.17:1
2007
GH¢
4,347,408.21
927,488.52
46,623.64
5,228,273.09
19.89:1
%
Change
29.1
88.2
24.1
39.6
5,542,505.24
1,757,702.00
3,470,571.09
1,757,702.00
59.7
-
550. Additions to Non-Current Assets were in the form of Office
Equipment, Computers and Accessories, Land & Building and
Furniture & Fittings amounting to GH¢1,564,734 in 2008 as a result
of which Non-Current Assets rose by 29.1% to GH¢5,612,328.06.
551. Current Assets were made up of Accounts Receivables,
Investment and Bank Balance. The Institute‟s investment figure
(Fixed Deposit) increased significantly from GH¢250,000 in 2007 to
GH¢950,000 in 2008.
552. Current Liabilities made up of Accounts Payable also increased
by 24.1% from GH¢46,623.64 in 2007 to GH¢57,858 in 2008.
553. Net Assets was GH¢7,300,207.24 at the end of 2008 (2007:
GH¢5,228,273.09), a rise 39.6%.
120
554. The Institute‟s Current Ratio was 30.17:1 in 2008 as against
19.89:1 in 2007. This showed a favourable liquidity position depicting
the ability of the Institute to meet its short-term debts when they fall
due.
555. The Accumulated Fund of the Institute recorded an increase of
GH¢2,071,934.14 from the 2007 figure of GH¢3,470,571.09 to
GH¢5,542,505.24 in 2008 as a result of the surplus recorded during
the year.
MANAGEMENT ISSUES
Unaccounted for funds - GH¢32,554.00
556. Investigations instituted by management in 2008 revealed that
Mr. Chinery, an Accounts Officer used five General Counterfoil
Receipt (GCR) Books to collect IGF totalling GH¢40,254.00 which he
failed to account for.
557. The matter was reported to the Police who assisted in the
recovery of GH¢7,700.00 out of the amount. Subsequently, the officer
was dismissed and the balance of GH¢32,554.00 remained unpaid as
at the time of reporting.
558. This anomaly was attributed to lack of internal check, as Mr.
Chinery‟s failure to comply with the Finance Officer‟s memo dated 4
May 2006 to Account Officers not to accept cash payments was not
detected early for corrective action to be taken.
559. To safeguard the Institute‟s scarce financial resources, we
recommended that the Finance Officer improves on internal check in
the accounts office and management intensify efforts in pursuing the
case with the Police for recovery of the outstanding amount of
GH¢32,554.00.
121
560. According to management, the Institute was pursuing the case
with the Police to retrieve the outstanding balance of GH¢32,554.00.
Management also stated that measures have been taken to forestall
recurrence of the anomaly.
Failure to obtain VAT/NHIL invoices
561. We noted that three companies who transacted business with
the Institute charged VAT/NHIL totalling GH¢ 702.37 but
VAT/NHIL Invoices were not issued contrary to Section 19 of the
Value Added Tax (VAT) Regulations 1998, (L.I 1646) because the
paying officers failed to demand them.
562. In the absence of the approved invoices, the suppliers/service
providers were not bound to remit the tax revenue of GH¢702.37 to
the VAT Commissioner.
563. To ensure proper accountability of the tax, we advised the
paying officer to obtain the VAT/NHIL invoices from the suppliers or
the tax amount of GH¢702.37 should be refunded.
564. Management stated that the affected companies have been
contacted by the Finance Officer to rectify the anomaly.
Purchases from non -VAT registered persons
565. Section 30(2) of the Financial Administration Act (FAA) 2003
stipulates that “except as determined by the Minister and subject to
any other enactment, government stores shall be procured from only
Value Added Tax registered persons”.
566. We noted however that the Institute procured goods and
services valued at GH¢77,079.90 from non-VAT registered persons.
This practice led to a loss of VAT/NHIL revenue of ¢11,561.99 to the
state.
567. Management explained that the anomaly resulted from lack of
communication between the Procurement department and the
supplying agencies.
122
568. We recommended and management agreed to ensure
compliance with the above stated regulations and in future act
accordingly.
GHANA INSTITUTE OF LANGUAGES
Introduction
Institute of Languages for the period 1 January 2008 to 31 December
2009.
MANAGEMENT ISSUES
Misapplication of releases for Personal Emolument GH¢625,639.20
570. Our payroll review disclosed that the Institute‟s payroll was
migrated to CAGD in August 2008. We noted that neither CAGD nor
GIL informed NTCE of this development. Consequently, the Institute
continued to receive its PE releases from NCTE from that date to
August 2009.
Management retained the total amount of
GH¢625,639.20 received and misapplied it to meet rent advance,
special loans, salary advance and operational expenses contrary to
Regulation 171 (2b) of L.I. 1802 which states, “under no circumstance
shall expenditure under personal emoluments (PE) be vired for other
purposes without approval of the Minister”.
571. Management in response stated that steps had been taken to
regularise the transactions adding that the necessary measures would
be put in place to prevent a recurrence of the anomaly.
572. In our opinion management‟s failure to report the excess
remittance of funds was attributed to its intention to suppress the
monies for the purposes enumerated above, which could disrupt
government‟s planned programmes.
123
573. We therefore recommended that management ensure the refund
of the misapplied funds totalling GH¢625,639.20 into the
Consolidated Fund without delay, failing which the amount should be
recovered from subsequent subventions to be released from NCTE
and immediately paid into the Consolidated Fund. We also
recommended improved information flow amongst government bodies
charged with various responsibilities over institutions.
Payment vouchers not presented for audit - GH¢ 74,760.81
574. Payment vouchers amounting to GH¢97,070.25 for various
activities within the period under review were not presented for audit.
Consequently, we could not determine the authenticity of the
payments.
575. We attributed this lapse to the Accountant‟s failure to keep the
records in a manner that facilitated easy access for reference as
enjoined by FAR 262 and lack of managerial supervision over the
accounts section.
576. Management alluding to misfiling, presented vouchers
amounting to GH¢20,309.44 leaving payment vouchers totalling
GH¢74,760.81 yet to be presented.
577. We advised management to step up supervision and ensure that
the outstanding vouchers are traced and submitted for our
examination, failing which the Accountant should be made to refund
the amount involved. We recommended also that records be well kept
and made easily accessible.
IGF not banked - GH¢ 15,565.25
578. Our audit disclosed that out of a total IGF of GH¢418,533.97
realized, GH¢402,968.72 was banked leaving an amount of
GH¢15,565.25 unaccounted for as at the time of reporting.
124
579.
The summary is as follows:
Account Name
Year
Transbureau
2008
-do2009
Main Account
2009
Revolving Fund 2008
Total
Collections
GH¢
61,753.52
56,987.55
271,634.48
28,158.42
418,533.97
Bankings
GH¢
57,008.25
56,789.25
261,969.61
27,201.61
402,968.72
Balance
GH¢
4,745.27
198.30
9,664.87
956.81
15,565.25
580. The Accountant‟s failure to supervise the work of the cashiers
as well as lack of proper internal check contributed to this irregularity,
which could result in loss of funds.
581. We recommended that the cashiers for the various accounts be
immediately made to account for the amount involved; otherwise the
sum should be recovered from them. We also advised the Accountant
to allocate responsibilities such that internal check and supervision
would be effectively improved.
582. Management accepted our recommendation and informed us
that it had written to the two cashiers to refund the respective
shortages.
Poor recovery of staff loans - GH¢144,800.62
583. We noted during the audit that out of GH¢139,248.80 granted
to Accra Campus staff members as rent advance and special loans in
2008 and 2009, only GH¢3,924.00 had been recovered, leaving a
balance of GH¢135,324.80 as at the time of reporting.
584. Although the Accountant informed us that letters had been
written to CAGD to effect deductions of the loans from respective
staff‟s salaries, efforts to obtain the letters and details of the loans to
be deducted for our review proved futile.
585. Our visit to the Kumasi and Tamale campuses in August 2010
further revealed that, five tutors who benefited from advances totalling
GH9,475.82 have failed to refund these loans.
125
586. Though management wrote to four tutors to refund the loans
granted them, they failed to comply with the directive in contention
that the Controller and Accountant General had not paid their salary
arrears. One tutor was however granted study leave without pay
without any measures put in place to recover an advance of
GH¢2,000.00.
587. Furthermore, we observed that out of the total loans granted, an
amount of GH¢113,894.00 did not reflect in the respective staff
ledgers. The omissions contravened FAR 111, which requires that a
head of department who is administering any class of advances should
keep accounts that show all advances and recoveries made.
588. The lapse made it difficult for us to ascertain the staff debtors‟
balances at the end of relevant financial years.
589. The above lapses, which resulted from management‟s disregard
of the provisions of the FAR, could result in depletion of the
Institute‟s funds and stifle the growth of the revolving fund if
management had not misapplied excess PE grants from NCTE. This
situation could lead to loss of funds thereby preventing other staff
from benefiting from the facility.
590. We advised management to ensure that staff loan ledgers are
updated and
strenuous efforts made to recover the outstanding
balance as early as possible. We also advised management to adhere
to the provisions of the FAR stated above, desist from misapplying
funds and be circumspect in granting subsequent advances in order not
to deplete its finances.
591. Management indicated that the loan ledger had been updated
and arrangements made for the recovery of the outstanding loans.
592. Our follow-up on management‟s response however revealed
that loans amounting to GH¢72,985.82 were recorded leaving a
balance of GH¢40,909.00 yet to be brought to book.
126
Payments not supported with appropriate documents - US$
8,922.54
593. Best accounting practice requires payment vouchers authorised
and approved for payment to be supported with the originals of
appropriate documents to authenticate the payments.
594. We however noted that payment voucher No. Aug/1/08 of
26/8/08 for $6,760.54 being cost of air tickets and other expenses
incurred on two Cuban lecturers was supported with photocopies
instead of original copies of the bills in violation of best cash
management practice.
595. As the Institute stood the risk of making double payment, we
advised that the Accountant should provide the original bills to justify
the payment; otherwise the amount should be recovered into the
Institute‟s bank account.
596. In another development, vouchers amounting to $2,162.00
were not supported with requests, memos and statement of
expenditure, invoices, payment orders and payee confirmation of
receipt for authenticity. Furthermore, we noted that two payments
amounting to GH¢1,080.55 were made to Mini Motors, Kumasi, for
the same maintenance work carried out on vehicle No. GV 495 V.
597. We attributed the lapse to poor supervision and lack of
coordination between the transport and accounts offices, and improper
keeping of records in the accounts section, which could lead to loss of
funds.
598. We advised management to step up its supervisory role and
ensure that the vouchers for $2,162.00 are properly acquitted and the
overpayment of GH¢540.00 refunded; otherwise, the amount should
be recovered from the Approving and Authorising Officers who failed
to ensure that the payments were substantiated.
599. Management responded that due process was followed and the
payment vouchers adequately substantiated. However, it had tasked
127
the responsible accounting officers to trace the documents to acquit
the payments. Management accepted our recommendation to ensure
that the overpaid amount of GH¢540.00 is recovered from Mini
Motors without delay and in future, the activities amongst units
properly coordinated to prevent recurrences of the lapse.
Unretired imprest- GH¢9,600.00
600. We noted that advances totalling GH¢9,600.00 granted to
seven officers between February 2008 and December 2009 to
undertake various activities had neither been retired nor advanced to
the imprest holder‟s personal account as at time of reporting; a period
of 10 and 32 months respectively after the imprests were paid.
601. The failure by management to put in place measures which
would ensure the prompt retirement of imprest caused the anomaly.
We could therefore not authenticate whether the amount was used in
the interest of the Institute.
602. We advised management to ensure that the imprests are retired
by the officers involved otherwise the respective amounts should be
treated as personal advances to the imprest holders in accordance with
FAR 288(1).
603. According to management measures have been put in place to
ensure that imprests are promptly retired.
Fuel purchased not accounted for – GH¢5,031.00
604. The Accounts Officer in charge of fuel coupons could not
provide us with records of fuel coupons purchased and issued between
January 2008 and July 2008 amounting to GH¢15,000.00. However,
records at the transport section showed that coupons received from
Accounts and issued out during the same period amounted to
GH¢13,169 leaving GH¢1,831.00 worth of fuel coupons un-accounted
for during that period.
128
605. We again noted that between August 2008 and December 2009
where the records were available, out of GH¢45,000.00 worth of
coupons purchased, only GH¢41,800.00 were recorded and issued out,
leaving a balance of GH¢3,200.00 un-accounted for.
606. We attributed the anomaly to ineffective internal control
procedures and lack of internal audit reviews, which could result in
misuse of the fuel coupons and ultimately loss of funds.
607. We advised that the officer in-charge should be made to
account for the fuel coupons totalling GH¢5,031.00. We also
recommended that management should improve on internal controls
and make the internal audit more responsive to its responsibilities.
Financial statements not certified
608. Section 38(2) of the Financial Administration Act, 2003 (Act
654) requires that financial statements should be prepared in
accordance with generally accepted accounting principles. It is
management‟s responsibility therefore to provide records and
information, which confirm and disclose all reported balances.
609. Contrarily, we noted some discrepancies in the Institute‟s
accounting records that underpin the financial statements from 2007 to
2009. The anomalies were due to lack of supervision, non-compliance
with financial regulations, and disregard to recommendations made in
our previous audit reports.
610. The lapses compromised the reliability of the financial
statements. As a result, we could not certify the financial statements to
inform stakeholders‟ decision-making on financial matters.
611. We recommended that the Accountant investigate the
differences, correct the financial statements accordingly and re-submit
them for audit.
612. Management stated that the anomalies that had persisted since
2005 would be rectified and the financial statements finalised and
submitted for validation.
129
ACCRA POLYTECHNIC
Introduction
613. This report relates to the audited accounts of Accra Polytechnic
for the year ended 31 December 2008.
Operational results
614. The year 2008 ended with an operational surplus of
GH¢297,401.86 which represented a decrease of 52.8% over the
previous year‟s surplus of GH¢629,485.90. Table 60 is a summary of
the School‟s performance indicators.
Income
Total Income
2008
GH¢
3,571,208.49
1,887,928.04
5,459,136.53
2007
GH¢
2,181,543.06
1,509,296.58
3,690,839.64
%
Change
63.7
25.1
47.9
3,723,942.33
574,792.59
862,999.75
5,161,734.67
297,401.86
1,718,832.31
387,931.44
954,589.99
3,061,353.74
629,485.90
116.7
48.2
(9.6)
68.6
(52.8)
Expenditure
Personal Emolument
Administration Expenses
Total Expenditure
Surplus
615. Total income increased by 47.9% while expenditure increased
by 68.61%. The related increase of the expenditure over the income
by 20.7% was mainly due to salary payment, which was made in
advance before the receipt from the government in the following year
2009.
Financial position
616. The School‟s fixed assets which stood at GH¢10,390,303.23 in
2007 went up by 24.3% to register GH¢12,912,242.59 at the end of
2008. The increase was due to additional assets acquired through
GETFUND and Internally Generated Fund during the period.
130
617. Current Assets also rose from GH¢ 2,608,230.22 in 2007 to
GH¢3,532,500.44 in 2008. This increase resulted mainly from
increase in cash and bank balances by 67% over the previous year‟s
balance.
618. Current Liabilities also went up 49.6% from GH¢1,987,344.21
in 2007 to GH¢2,972,142.58 in 2008.
619. The School liquidity ratio stood at 1.2: 1 in 2008, an indication
of its inability to meet short-term obligations falling due.
MANAGEMENT ISSUE
Separated staff with outstanding loan balances - GH¢837.11
620. Our payroll review revealed that four officers who were
separated from the School between January and November 2008 had a
total unpaid loan balance of GH¢837.11 as at the time of reporting.
621. The Accountant explained that management was conscious of
the provisions of FAR 116 which states, “the outstanding balance of
any advance to public officer becomes debt to government and is fully
recoverable at the date of the public officer‟s leaving the service” but
as at the time of separation, the employees had no financial benefits
that could be used to offset their indebtedness.
622. To forestall the loss of funds, we recommended that
management recover the loans from the staffs‟ loan guarantors as
early as possible and also put effective measures in place to ensure
that subsequent loans granted are recovered in accordance with
conditions of the loan.
623.
Management accepted our recommendation for compliance.
131
MINISTRY OF WATER RESOURCES, WORKS
AND HOUSING
GHANA WATER COMPANY LIMITED
Introduction
624. This report covers the audited accounts of the Ghana Water
Company for the year ended 31 December 2008 and 2009.
Operational results
625. Table 61 provides a summary of the operational performance
during the period under review.
Income
Sale of Water
Other Income
Total Income
Expenditure
Production
Transmission/Boostering
Distribution
Commercial/Marketing
General Administration
Loan Interest
Exchange Loss
Total Expenditure
(Deficit)
2009
GH¢
103,049,295
3,815,618
106,864,913
2008
GH¢
98,899,406
5,809,658
104,709,064
%
Change
4.2
(34.3)
2.1
40,620,370
1,858,888
14,543,125
12,938,918
29,920,747
2,970,069
17,245,560
120,097,677
(13,232,764)
45,607,220
4,530,120
9,485,657
11,765,902
36,424,002
2,799,998
27,776,755
138,389,654
(33,680,590)
(10.9)
(59)
53.3
10
(17.9)
6.1
(38.0)
(13.2)
(60.7)
626. Total Revenue rose marginally by 2.1% from GH¢104,709,064
in 2008 to GH¢106,864,913 in 2009. This was largely due to a 4.2%
increase in sale of water. Included under sundry income were bank,
interest incomes from the drilling unit and base & central workshop,
and sundry income. Sundry income which represents receipts from
sale of obsolete stock, tender documents, laboratory services
performed for other companies mainly accounted for the decline in
other income.
132
627. Total Expenditure for the year under review amounted to
GH¢120,097,677 as against GH¢138,389,654 recorded in 2008. This
shows a decrease of GH¢18,291,977 or 13.2% over the previous
year‟s figure. This was due to decreases in Production Expenditure,
Transmission/Boostering and General Administration expenses.
Financial position
628. The financial position of the Company is provided in table 62:
Non-Current Assets
Current Assets
Current Liabilities
Net Current Asset
Net Assets
Current Ratio
2009
GH¢
620,506,299
86,317,947
88,698,918
(2,380,971)
618,125,328
1.0:1
2008
GH¢
516,285,240
74,490,518
76,371,979
(1,881,461)
514,403,779
1.0:1
%
Change
20.2
15.9
16.1
26.5
20.2
629. The Company‟s Non-Current Assets increased by 20.2% from
GH¢516,285,240 in 2008 to GH¢620,506,299 in 2009 due to the
acquisition of Structures, Machinery and Equipment and Motor
Vehicle. Construction-In-Progress also increased.
2008 to GH¢86,317,947 in 2009. This was largely due to increases in
Trade Receivables from Government and private customers as well as
staff loans and advances.
631. Current Liabilities also increased by 16.1% from
GH¢76,371,979 in 2008 to GH¢88,698,918 in 2009. This was because
of an increase in current portion of Long-Term Loan which has arisen
due to non-payment as a result of a rise in exchange rates.
632. The Company‟s liquidity ratio of 1.0:1 in 2009 as against 1.0:1
in 2008 shows that, the Company cannot discharge its short-term
debts as and when they fall due.
133
MANAGEMENT ISSUES
Advances to contractors - GH¢876,322
633. A total amount of GH¢876,322 was advanced to various
contractors since 2002. The breakdown is as follows:
Name of Contractor
Biwater international
Drilling Unit
Central Workshop (Tema)
All Goods Electricals
Quans International
Atwimama Construction Ltd
C S T Ltd
Madara Ltd
Total
Amount (GH¢)
18,526
7,853
5,979
6,586
879
5,965
827,534
3,000
876,322
634. The accuracy and recoverability of the amount may be
doubtful. We recommended that the true status of the balances be
established and the amount involved recovered.
Unaccountable water
635. Our review of the operations of production and customer care
departments revealed that treated water distributed to consumers could
not be properly accounted for either due to wastage or illegal activities
ranging between 37% and 70% during the year under review. This
loss, though considered by management as normal, seems too high in
terms of measuring the effectiveness and efficiency of management
and the company as a whole. The unaccountable water could lead to
huge loss of revenue to the company.
636. We recommended that Management, as a matter of urgency,
consider avenues of reducing these losses drastically to improve cash
flow.
134
637. Management responded that metering ratio has been stepped
up, customer survey exercise has been conducted and customer billing
has started in respect of customers who were receiving water but were
not being billed. Management added that security over data in respect
of billing has been improved.
WATER RESOURCES COMMISSION
Introduction
638. This report relates to the audited financial statements of Water
Resources Commission for the financial years ended 31 December
2008 and 2009
Operational results
639. The Commission‟s Total Income decreased by 23.1% from
GH¢1,297,336 in 2008 to GH¢997,552 in 2009, even though there was
38.9% increase in Internally Generated Fund from GH¢279,276 in 2008 to
GH¢387,807 in 2009. The fall in Other Income from GH¢1,018,060 in
2008 to GH¢609,745 in 2009, accounted for the decrease in Total Income.
640. The operational results are shown in table 63.
Income
Income (IGF)
Other Income
Total Income
Expenditure
General Administrative Expenses
Net Income for the year
2009
GH¢
387,807
609,745
997,552
2008
GH¢
279,276
1,018,060
1,297,336
%
Change
38.9
(40.1)
(23.1)
979,437
18,116
973,444
323,892
0.6
(94.4)
641. Net Income recorded a decrease of 94.4% from GH¢323,892 in
2008 to GH¢18,116 in 2009. The decline in total income and the rise
in total expense which represents general administration expenses in
2009 contributed to the decrease in net income. The decline in total
income was due to the drop in other income resulting mainly from the
decrease in Danida Grants.
135
642. General Administrative Expenses increased marginally by
0.6% from GH¢973,444 in 2008 to GH¢979,437 in 2009. This was
due to a rise in salaries, depreciation cost and contributions / donations
made during the year.
Financial position
643.
Shown in table 64 is the financial position as at 31 December 2009
Non- Current Assets
Current Assets
Current Liabilities
Net Assets
Current Ratio
Represented by:
Accumulated Fund
Development Fund
2009
GH¢
461,718
415,677
8,346
860,704
49.8:1
2008
GH¢
411,234
468,014
28,314
850,934
16.5:1
%
Change
12.3
(11.2)
(70.5)
1.1
809,205
59,845
791,089
59,845
2.3
-
644. Non-Current Assets grew by 12.3% from GH¢411,234 in 2008
to GH¢461,718 in 2009. The increase was attributed to additions of
GH¢180,587 to the existing assets.
645. Current Assets decreased by 11.2% from GH¢468,014 in 2008
to GH¢415,677 in 2009. The reduction was as a result of a decrease in
Bank Balance.
646. Management of Current Liabilities improved, registering a
reduction of 70.5% over 2008 figure of GH¢ 28,314 to GH¢8,346 in
2009.
647. The Current ratio further improved from 16.5:1 in 2008 to
49.8:1 in 2009. This indicated the Commission‟s ability to meet its
short-term financial obligations as and when they fall due.
136
MANAGEMENT ISSUES
Project excluded from Water Resources Commission’s 2009
Financial Statements
648. Our review of Water Resources Commission‟s 2009 financial
statements revealed that certain Projects undertaken had been
excluded from the financial statements. This came to light when bank
balances were examined using Ecobank‟s Bank Certificate which
showed that Water Resources Commission was operating other
projects but failed to disclose them in 2009 draft financial statement.
They are:
Name of Project
European Union
WRC – IWRM
WRC – IWRM
WRC - NDSU
Amount
GH¢403,800.00
GH¢14,097.98
€5,764.30
US$6,280.35
Note: IWRM – Integrated Water Resources management
NDSU – National Dam Safety Unit
WRC – Water Resources Commission
649. Management should ensure that all projects are documented
and included or disclosed in the financial statements.
650. Management responded that, they did not disclose them
because the European grant was to be used for an 18 month period
from November 18, 2009 to May 14 2011. However, the amount was
received on December 18, 2009 and the first payment effected on
January 13, 2010.
651. With regards to the other projects, most of the activities were
not core to the Commission which facilitated such activities.
However, some staff benefited where training was involved.
137
ARCHITECTURAL & ENGINEERING
SERVICES LIMITED
Introduction
652. This report relates to the audited accounts of the Architectural
& Engineering Services Limited (AESL) for the year ended 31
December 2009.
Operational results
653. Total Income registered a decline of 20.4% from
GH¢5,157,543 in 2008 to GH¢4,107,498 in 2009. The decline was as
a result of a fall in Consultancy Fees from GH¢4,932,803 in 2008 to
GH¢3,873,791 in 2009, a fall of 21.5%. Other Income on the other
hand registered 4.0% marginal increase of GH¢233,707 against the
2008 figure of GH¢224,740. Presented in table 65 is the operational
performance of AESL for 2009.
Income
Fee Income (Direct Income)
Other Incomes
Total Income
Expenditure
General & Administration
Total Expenditure
Profit/Loss before Tax
2009
GH¢
3,873,791
233,707
4,107,498
2008
GH¢
4,932,803
224,740
5,157,543
%
Change
(21.5)
4.0
(20.4)
4,470,292
4,470,292
(362,794)
4,341,639
4,341,639
815,904
3.0
3.0
(144.5)
654. Total Expenditure of the Service which comprised General and
Administration Expenses increased by 3.0% from GH¢4,341,639 to
GH¢4,470,292 in 2009. A substantial portion of the General &
Administration Expenses was in Staff Salaries and Related Cost
accounting for 73.9% of total expenditure and increased from
GH¢2,057,813 to GH¢2,570,632 in 2009, representing an increase of
3.0%.
138
655. Consequently, the net profit before tax fell by 144.5% from a
profit of GH¢815,904 in2008 to a loss of GH¢362,794 in 2009.
Financial position
is shown in table 66:
Table66: Financial position as at 31 December 2009
Fixed Assets
Capital Work in
Progress
Total
Current Assets
Currents Liabilities
Net Current Assets
Net Assets
Current Ratio
2009
GH¢
11,170,902
146,092
11,316,994
3,292,214
2,351,947
940,267
12,257,261
1.4:1
2008
GH¢
11,357,041
141,566
11,498,607
3,037,992
1,916,545
1,121,447
12,620,054
1.6:1
%
Change
(1.6)
3.2
(1.6)
8.4
22.7
(16.2)
(2.9)
657. Total Fixed Assets of the Service declined by 1.6% from
GH¢11,357,041in 2008 to GH¢11,170,902 at the end 2009. The
decrease was attributed to the depreciation charge and disposal of
Motor Vehicle and Furniture and Equipment in 2009.
658. Capital Work in Progress increased by GH¢4,526 or 3.2% from
GH¢141,566 in 2008 to GH¢146,092 in 2009.
659. Total Current Assets rose by 8.4% to GH¢3,292,214 in 2009
(2008: GH¢3,037,992). Client balances of GH¢2,927,653 alone
constituted 88.9% of Total Current Assets.
GH¢1,916,545 in 2008 to GH¢2,351,947 in 2009. Prominent among
Current Liabilities were Sundry Creditors of GH¢1,637,038 which
largely comprised outstanding statutory deductions payable to VAT,
SSNIT and IRS.
139
661. The Company‟s liquidity position as shown by the current ratio
of 1.4:1 (2008: 1.6:1) indicated AESL‟s inability to discharge its short
term obligations when they are due.
MANAGEMENT ISSUES
Non –Compliance with Social Security and Tax Laws
662. The VAT, Social Security and the IRS laws require prompt
payment of moneys withheld.
663. We however noted that total amounts payable in respect of the
following statutory bodies were:
STATUTORY BODY
VAT
SOCIAL SECURITY
IRS (PAYE)
Total
2009
GH¢
730,781
207,081
500,699
1,438,561
2008
GH¢
523,749
156,754
429,274
1,109,777
664. Not only were the outstanding amounts not paid off but also
part of the current year‟s liabilities was left unpaid.
665. These are statutory payments and the failure to pay attracts
penalty which in turn increases cost. We attributed the lapse to the
cash strapped position of AESL.
666. We recommend that the Company take steps to settle the debts
without further delay to avoid penalties. Also management should put
in place measures which would discontinue the carrying of huge
balances on these accounts from year to year.
667. Management promised to step up its recovery efforts and as
well intensify job acquisition drive so as to have funds to liquidate the
debts.
140
Rent deductions on behalf of Government
668. A Head of Department is responsible for efficiently collecting
and remitting rent payable to Government promptly.
669. The Company failed to remit rent deductions payable to
Government in 2008 totalling GH¢39,812 and again accumulated an
additional amount of GH¢6,278 in 2009.
670. Lack of Management‟s commitment to pay off promptly the
Rent held in trust had denied the Government much needed funds to
execute its programmes.
671.
We advised Management to make efforts to settle the arrears.
672. Management responded that efforts would be made to pay off
the arrears.
Indebtedness of Mr. Adu Boakye (former staff)
673. Best management practise requires that an officer, who fails to
return to work to serve his bond on completion of his studies, must
pay a penalty according to the terms stipulated in the agreement, or his
guarantors should be held liable.
674. Mr. Adu Boakye, who was bonded to return to work after a two
year study leave with pay contract resigned at the end of the study
leave. He was therefore billed with GH¢14,598.52, being his two
years pay, less his terminal benefits but failed to pay the penalty.
675. We advised Management to recover the amount from the
officer, failing which his guarantors should be held liable.
676. Management stated it had commenced action to recover the
amount due from his guarantors.
Encroachment on Weija Lands
677. Best practice on assets management provides that it is the duty
of Management to ensure that all company assets are safeguarded.
141
678. The Company‟s lands at Weija, of which part is occupied by
the Geotechnical Department and Staff quarters, are said to have been
encroached upon. Other lands at Ofankor and Koforidua are suffering
from the same fate.
679. Management‟s inability to fence the lands affected in order to
prevent encroachment had resulted in the illegal occupation. The
Company stood the risk of losing the affected lands.
680. We recommend that Management seek the necessary assistance
to stop the encroachment and fence off the whole areas.
681. According to Management, at Weija, a favorable judgment was
received on one developer while the rest are at various stages at the
courts and National Security. Also, ten plots of land have been given
elsewhere in Koforidua in exchange for the encroached lands there.
682. We again advised Management to intensify its efforts to take
back its lands and safeguard them.
TEMA DEVELOPMENT CORPORATION
Introduction
683. This report relates to the audited accounts of the Tema
Development Corporation for the 2008 and 2009 financial years.
Operational results
684. Presented in table 67 is the summarised operational
performance of the Corporation
142
Income
Rentals & Estate Development
Direct Expense
Gross Profit on Rentals &
Estate Development
Sundry Income
General Administrative Expenses
Net Profit on Rentals & Estate
Development
Profit on Sale of Non Current
Assets
Investment Income
Dividend Income
Net Profit before Tax
Corporate Tax
Profit after Tax
2009
GH¢
9,425,731
2008
GH¢
9,790,604
%
Change
(3.7)
2,650,573
4,342,452
(39.0)
6,775,158
564,994
6,525,372
5,448,152
412,067
4,967,694
24.4
37.1
31.4
814,780
892,525
(8.7)
11,170
1,232,471
2,058,421
514,605
1,543,816
55,740
214,147
920
1,163,332
290,833
872,499
(80.0)
475.5
(100.0)
76.9
76.9
76.9
685. The Total Rental and Estate Development Income declined by
3.7% to GH¢9,425,731 in 2009 from GH¢9,790,604 in 2008. This
was largely due to a 34.7% or GH¢1,919,858 decline in the Sale of
Serviced Plots/Houses from GH¢5,527,898 in 2008 to GH¢3,608,040
in 2009. Other Income from Investment significantly registered an
increase of 475.5% due to increases in fixed deposits at NIB and
Amalgamated Banks to bring Profit from Rental and Estate
Development of GH¢814,780 to a Net Profit before Tax of
GH¢2,058,421in 2009 from the GH¢1,163,332 achieved in 2008.
686. Total Expenditure represented by General Administrative
Expense increased by 31.4% from GH¢4,967,694 in 2008 to
GH¢6,525,372 in 2009, largely due to increases in the Marketing
Expenses, Maintenance Of Office Building, huge Exchange Loss of
GH¢828,185 and 61.2% increase in Staff Welfare from GH¢725,114
in 2008 to GH¢1,168,794 in 2009.
143
Financial position
687. A summary of the Corporation‟s financial position as at 31
December 2008 and 2009 is shown in table 68:
Non-Current Assets
Plant, Properties &
Equipment
Investments (Long-Term)
Current Assets
Current Liabilities
Net current Assets
Net Assets
Current Ratio
2009
GH¢
5,485,090
2008
GH¢
5,561,123
%
Change
(1.4)
40,006
5,525,096
18,164,225
10,037,658
8,126,567
13,651,663
1.8:1
40,006
5,601,129
16,800,141
9,232,200
7,567,941
13,169,070
1.8:1
(1.4)
8.1
8.7
7.4
3.7
688. Plant, Properties and Equipment registered a marginal decline
of 1.4% or GH¢ 76,033 to GH¢5,485,090 in 2009 from the 2008
amount of GH¢ 5,561,123. The decline was the result of
the
depreciation charge and disposals of motor vehicles and residential
buildings.
689. Current Assets increased by 8.1% to GH¢18,164,225 in 2009
from GH¢16,800,141 in 2008. This was due to increases in Cash and
Bank Balances, Short-Term Investments and Rent/Sundry Debtors.
690. Current Liabilities went up by 8.7% from an amount of
GH¢9,232,200 in 2008 to GH¢10,037,658 in 2009. This arose due to
increases in Sundry Creditors, Serviced Plot Deposit and Deposits for
Houses.
691. Net Total Assets of the Corporation grew marginally by 3.7%
or GH¢482,593 from GH¢13,169,070 in 2008 to GH¢ 13,651,663 in
2009.
144
692. The Corporation‟s liquidity position for the year vis-à-vis that
for 2008 as measured by a current ratio was the same 1.8:1 in 2008
and 1.8:1 in 2009. As this falls below the benchmark of 2:1 it
indicates that the Corporation would be unable to pay its short-term
debts when they fall due.
MANAGEMENT ISSUES
Construction and completion of additional houses
693. We observed that certificates on contracts awarded to a
contractor are not separated when separate contracts are awarded to
the same contractor.
694. The practice of bulking the contracts relating to the same
contractor resulted in difficulty of separating previous works done
which are independent of each other. Thus, the determination of
outstanding balances or works done on each separate contract could
not be readily ascertained.
695. We advised that Management ensures that works done on each
contract are separately monitored from others so that the outstanding
balances/works done on each contract can be determined at any point
in time.
Variations in valuation of contract for the construction of T.D.C
new office complex
696. We observed that per final valuation dated 30/07/08, Certificate
No. 7 amounting to GH¢195,670 was paid to M/S EMEFS
Construction Limited. The position of the contract as at 30 July, 2008
on certificate No. 7 (Valuation 6) was as follows:
145
GH¢
Contract sum
Variations
Adjustment of Prime Cost etc
Total
Less Omissions
Total
Add: Previous Fluctuations
Current Fluctuations - Materials
- Labour
Less: Direct Payment to
Subcontractors
Previous Payments ( Cert. No. 6)
346,092
5,400
67,505
933,893
2,685,389
GH¢
2,165,611
905,969
1,840,829
4,912,409
1,513,350
3,399,059
418,997
3,818,056
3,619,282
198,774
697. We therefore requested the authority/approval letter for some
of the variations carried out on the building amounting to
GH¢905,969 for audit scrutiny. Also details of current fluctuations
amounting GH¢72,905 were not made available for audit inspection.
698. The final contract sum of GH¢3,818,056 could therefore not be
authenticated. We therefore asked Management to explain the
variations and current fluctuations on certificate No 7 (Valuation 6).
MINISTRY OF HEALTH
GHANA AIDS COMMISSION
MULTISECTORAL HIV/AIDS PROGRAMME (MSHAP)
Introduction
699. This report relates to the audited accounts of Ghana Aids
Commission – Multi-Sectoral HIV/AIDS Programme (MSHAP) for
the year ended 31 December 2009.
146
Operational results
700. Operations for the year closed with a surplus of US$6,930,519
compared with a deficit of US$263,796 in 2008, an increase of
US$6,666,723 or 2,527.2%. Presented in table 69 are the performance
indicators for the period.
Income
Receipts from Donors
Government of Ghana Funds
Other Income
Total Income
2009
US$
2008
US$
%
12,798,051
663,720
43,099
13,504,870
8,633,996
857,201
77,239
9,568,436
48.2
(22.6)
(44.2)
41.1
1,955,523
2,637,948
(25.9)
203,851
4,414,977
6,574,351
6,930,519
158,098
6,508,594
9,304,640
263,796
28.9
(32.2)
(29.3)
2,527.2
Change
Expenditure
Operating & Project Management
Cost
Capital Expenditure
Sub. Projects
Total Expenditure
Surplus/(Deficit)
701. Total Income increased by 41.1% to US$13,504,870 in 2009
from US$9,568,436 in 2008. This was due to a rise of 48.2% in
Receipts from Donors, which accounted for 94.8% of Total Income
for the year under review.
702. Government of Ghana Counterpart Funds decreased by 22.6%
from US$857,201 in 2008 to US$663,720 in 2009 and Other Income
which includes transfers from other projects interest on accounts and
recoveries also decreased by 44.2% from US$77,239 in 2008 to
US$43,099 in 2009. The drop was as a result of a 76.6% decrease in
transfers from other projects and non receipt of miscellaneous income.
703. Total Expenditure decreased by 29.3% to US$6,574,351 in
2009 compared to US$9,304,640 in 2008. The decrease was mainly
due to a 32.2% drop in Sub – Projects and 25.9% drop in Operating
147
and Project Management Costs. Sub – Projects disbursements alone
accounted for 67.2% of the Total Expenditure for the year.
Financial position
704. The Commission‟s financial position for the period under
review is presented in table 70.
Item
Current Assets
Current Liabilities
Net Current Assets
Current Ratio
2009
US$
7,916,260
7,515
7,923,775
1,053.4:1
2008
US$
1,108,190
43,144
1,065,046
25.7:1
%
Change
614.3
(82.6)
644.0
705. Current Assets, which comprised mainly of cash at bank and
Accounts Receivable and Prepayments increased by 614.3% from
US$1,108,190 in 2008 to US$7,916,260 in 2009. The increase was
mainly due to a rise in Bank Balances of US$6,975,932 or 786.7%
resulting from increases in the various accounts.
706. Current Liabilities on the other hand decreased by 82.6% from
US$43,144 in 2008 to US$7,515 in 2009. This resulted from the
substantial payment or reduction of Accrued Expenses.
707. The significant growth in current assets as against the drop in
current liabilities led to a healthy liquidity position as measured by a
current ratio of 1,053.4:1 (2008:25.7:1), an indication that the
Commission can conveniently meet its short-term obligations as and
when they fall due.
MANAGEMENT ISSUE
Failure by Ghana HIV & AIDS Network (Ghanet) to refund
GH¢21,597
708. We noted from our review that the above NGO was suspended
on the 2009 contract for performance and requested to refund an
148
amount of GH¢21,597 to the Commission by 12 February 2010.
Ghanet has however failed to do so and this could result in GAC funds
being misapplied.
709. We recommended that the Commission put pressure on Ghanet
including legal action to get the money back.
710. Management responded that Ghanet has been reconstituted
recently and it has new leadership and that every effort is being made
to get back the outstanding money. Relevant documents have since
been submitted to the Attorney-General‟s Office solicitors for the
Ghana Aids Commission to assist in the recovery.
NURSES AND MIDWIVES’ COUNCIL
Introduction
711. This report covers the audited accounts of the Nurses and
Midwives Council (NMC) for the year ended 31 December 2009.
Operational results
712. The Council recorded an excess income over expenditure of
GH¢666,468.22 as against GH¢482,035.12 recorded in 2008,
representing an increase of 38.3% in 2009. The performance
indicators are shown table 71.
Item
Total Income
Less Expenditure
Personal Emolument
Administration
Service
Total Expenditure
Income surplus
2009
GH¢
2,837,460.28
2008
GH¢
2,260,227.32
%
Change
25.5
447,460.35
546,152.04
1,177,379.67
2,170,992.06
666,468.22
605,066.78
302,617.80
870,507.53
1,778,192.11
482,035.12
(26.0)
80.5
35.3
22.1
38.3
149
713. Total income of the Council, made up of subvention, donor
funds and internally generated funds (IGF), rose by 25.5% from
GH¢2,260,227.23 in 2008 to GH¢2,837,460.28 in 2009. Prevalent in
this increase was a 42.8% rise in IGF from GH¢1,623,330.41 in 2008
to GH¢2,317,498.36 in 2009. The rise in IGF was due to an increase
in charges and fees and establishment of 30 more schools. Conversely,
total subvention for the period fell by 19.2% from GH¢635,433.37 in
2008 to GH¢513, 341.92 in 2009.
714. Total expenditure of NMC also increased by 22.1% from
GH¢1,778,192.11 in 2008 to GH¢2,170,992.06 in the year under
review. Administrative expenditure rose by 80.5% from
GH¢302.617.80 in the previous year to GH¢546,152.04 in 2009 due
mainly to increases in expenditure on printed material and stationery.
Similarly, service expenditure increased by 35.3% from
GH¢870,507.53 in 2008 to GH¢1,177,379.67 in 2009 mainly as a
result of expenditure incurred on local hotel accommodation and
foreign travels.
Financial position
715. The Council‟s fixed assets appreciated by 62.3% from
GH¢242,929.41 in 2008 to GH¢394,364.34 in 2009 due to the
acquisition of motor vehicles, office equipment, furniture, fixture and
fittings as well as computer and accessories.
716. There was a marginal increase in stock value of 0.5% from
GH¢103,563.51 in the previous year to GH¢104,074.54 in 2009.
Additionally, the increase in bank balance by 35.3% from
GH¢1,174,064.12 in 2008 to GH¢1,589,030.63 in 2009 was attributed
to the late release of the fourth quarter subvention. As a result, the
current assets of the Council went up by 40.3% from
GH¢1,277.627.63 in 2008 to GH¢1,792,660.92 in 2009.
717. The Council however had no current liabilities as at end of the
period under review, thus there was no short-term obligation to be
met.
150
MANAGEMENT ISSUE
Unsupplied vehicle
718. In July 2009, Ministry of Health (MoH) on behalf of NMC
entered into an agreement with Western Automobile Centre for the
purchase of three vehicles valued at GH 110,617.50 to be delivered
within 90 days after signing of the contract. Though we did not sight
a bank guarantee which was a pre-requisite for any payment, NMC
on 3 August 2009, paid an amount of GH¢ 99,555.75 representing
90% of the total cost to the supplier. We however noted that as at the
time of reporting, after periods of 559 and 541 days of the contractual
date and making payments respectively only two vehicles had been
supplied. We also noted that the payment made to Western
Automobile Centre included 68% of the cost of the unsupplied Nissan
Urvan Bus.
719. In our opinion the lapse was due to non specification of the
mode of payment and deliveries in the contract agreement, as a result
of which the supplier was not bound to immediately deliver the
vehicle. We were also of the view that the failure to demand the bank
guarantee from the supplier before making the advance payment
contrary to the agreement also contributed to the anomaly.
720. We recommended that management should through MoH
formally demand the immediate delivery of the vehicle or abrogate the
contract and recover the advance payment from the supplier. We also
advised that future contract agreement should specify the mode of
payment and deliveries in order to apportion blame for defaults. We
further recommended that in future all necessary documents should be
obtained as required by the contract agreement before any payments
are made.
721. Management accepted our recommendation and informed us
that a letter had been written to Western Automobile Centre to remind
them about the need to supply the vehicle or refund the advance
payment made.
151
PHARMACY COUNCIL
Introduction
722. This report covers the audited accounts of the Pharmacy
Council for the year ended 31 December 2009.
Operational results
723. The Council made a surplus of GH¢103,966.04 in the period
reviewed as against GH¢1,469.73 for the previous year. This
represented an increase of 6,974.0% and resulted from marked
increases in the elements of total income not matched by increases in
the components of total expenditure. Presented in table 72 are the
Income
Subvention (GoG)
(IGF)
Donor Pool Fund
Total
Expenditure
Personal Emolument
Administration
Service
Investment
Total
Surplus
2009
GH¢
1,030,426.01
1,075,931.62
2008
GH¢
849,881.15
1,034,878.35
%
Change
21.2
4.0
31,007.00
2,137,364.69
18,430.00
1,903,209.50
68.2
12.3
956,845.41
689,364.04
348,847.47
38,341.73
2,033,398.65
103,966.04
823,853.15
536,509.13
421,758.51
119,618.98
1,901,739.77
1,469.73
16.1
28.5
(17.3)
(68.0)
6.9
6,974.0
724. Total income increased by 12.3% from GH¢1,903,209.50 in
2008 to GH¢2,137,364.69 in 2009. Government Subventions, which
accounted for 48.2% of total income, increased by 21.2% during the
year under review. Internally Generated Fund (IGF), which
represented 50.3% of the Council‟s income thus its major source of
income, also increased marginally by 4.0% in 2009. Donor Pooled
Funds accounted for 1.5% of total income and this registered a sharp
increase of 68.2% in the period reviewed.
152
725. Total Expenditure registered an increase of 6.9% from
GH¢1,901,739.77 in 2008 to GH¢2,033,398.65 in 2009. Personnel
emoluments went up by 16.1% due to an increase in staff salaries.
Administrative expenses also rose by 28.5% due mainly to increases
in professional allowance and fees, repairs on office building and
maintenance of official vehicles. Service Activity on the other hand
fell by 17.3% from GH¢421,758.51 in 2008 to GH¢38,341.73 in 2009.
This was mainly because no expenditure was incurred on continuing
education programme for pharmacists, stakeholders dissemination
meeting, and health fair. Investment Activity cost also decreased by
68% for the year under review, from GH¢119,618.998 to 2008 to
GH¢38,341.73 in 2009 because no vehicle was purchased neither was
rehabilitation of office building undertaken.
Financial position
726. Net Current Assets which stood at GH¢32,349.18 as at
31December 2008 increased by GH¢103,966.04 or 321.4% to close
the year at GH¢136,315.22 as a result of increases in the bank balance
of IGF and GOG. Current assets of the Council made up of its bank
balances grew by 151.9% from GH¢ 6207.79 in 2008 to
GH¢100,487.83 in 2009. Current liabilities recorded a 29.6 % rise
from GH¢46,272.46 in 2008 to GH¢59,951.25 in 2009.
727. The liquidity position of the Council as measured by a current
ratio of 6.7:1 (2008: 2.6:1) implied that it can meet its short term debts
as and when they fall due.
728. Accumulated Fund or Fund Balance went up by
GH¢103,966.04 or 321.4% from a previous amount of GH¢32,349.18
to GH¢136,315.22 in 2009 because of the significant surplus
registered.
MANAGEMENT ISSUES
Unaccounted IGF – GH¢18,275.00
729. FAR 15 enjoins any public officer or revenue collector who
collects or receives any public and trust moneys to issue official
receipts for them and pay same into the relevant Public Fund Bank
Account within twenty-four hours.
153
730. Our review disclosed that due to the poor internal control
environment at the Kumasi Regional Office, Mr. Seidu A. Pelpuo, the
former Regional Accountant, in contravention of the above stated
regulation made over and under banking of revenue collected.
731. We noted for instance that in March 2009, out of a total
revenue collection of GH¢64,650.00, only GH¢55,946.00 was banked
resulting in an underpayment of GH¢8,704.00 for the month.
Conversely in April 2009, revenue realised amounted to
GH¢10,305.00 whilst lodgement for that month was GH¢17,255.00
resulting in an overpayment of GH¢6,950.00. By this practice, a sum
of GH¢18,275.00 of the Council‟s IGF was neither banked nor
accounted for as at 31 December 2009.
732. Management informed us that the irregularity was detected in
the January to June 2009 returns Mr. Seidu Pelpuo forwarded to head
office and the issue is currently under Police investigation.
733. We recommended that management ensure that the case with
the Police is expedited for the full recovery of the Council‟s funds.
Additionally, we recommended the strengthening of internal controls
in the Regional Offices.
734. Management responded that as at March 2010 he had refunded
GH¢3,000.00 and that a standing order of GH¢250.00 had been
established between Seidu Pelpou the former Accountant of the
Council to refund the remaining balance.
Unearned salary and unpaid salary advance – GH¢9,378.28
735. Due to delay on the part of management in notifying the
Controller and Accountant-General (C&AG) to stop the salary of a
former staff, Rita Sam was wrongly paid three months salary totalling
GH¢1,778.28 between November 2009 and January 2010. We also
observed that contrary to FAR 104(c), management failed to recover
an advance of GH¢7,600.00 granted her before her resignation.
154
736. Management was advised to recover from her the total amount
of GH¢9,378.28 and ensure that ex-employees salaries are stopped
immediately after separation in conformity with FAR 297. We also
advised management to put in place measures which would ensure
recovery of advances granted to prevent a recurrence of the anomaly.
737. As at June 2011, Rita Sam had paid an amount of GH¢2,400
out of the debt resulting in a balance of GH¢6,978 yet to be recovered.
Management informed us she has agreed to refund the outstanding
amount through the issuance of a monthly post dated cheque of
GH¢200 to settle any liabilities.
Absence of Audit Reports Implementation Committee (ARIC)
738. Section 30 of the Audit Service Act 2000, Act 584 provides
that an institution, body or organization, which is subject to auditing
by the Auditor-General, must establish an Audit Reports
Implementation Committee (ARIC). It is the duty of the ARIC to
ensure that the head of the organization pursues implementation of
matters in all audit reports as well as the Auditor-General‟s reports
endorsed by Parliament. The ARIC is also enjoined under Section
30(2) (b) of the Act to issue annual statements showing the status of
the implementation of recommendations made in audit reports.
739. We observed that no ARIC had been established by the
Council.
The absence of ARIC could result in the nonimplementation of recommendations made in audit and other
monitoring reports.
740. We recommended and management agreed to constitute one
without further delay.
MEDICAL AND DENTAL COUNCIL
Introduction
741. This report covers the audited accounts of the Medical and
Dental Council for the financial years ended 31 December 2007 and
2008.
155
Operational results
742. Operations for the year under review closed with a decrease of
37.4% in the surplus income, from GH¢90,458.11 in 2007 to
GH¢56,587.46 in 2008. The operational performance of the Council is
presented in table 73.
Income
Sundry Income
Total
Expenditure
Service Expenses
Investment
Total
Surplus Income
2008
GH¢
154,638.33
574,567.50
11,878.85
741,084.68
2007
GH¢
131,352.96
369,222.29
372.76
500,948.01
%
Change
17.7
55.6
3,086.7
47.9
119,989.55
208,464.31
287,476.40
68,566.96
684,497.22
56,587.46
104,523.55
141,474.11
150,483.24
14,009.00
410,489.90
90,458.11
14.8
47.4
91.0
389.5
66.8
(37.4)
Income
743. Total income witnessed an increase of 47.9% from
GH¢500,948.01 in 2007 to GH¢741,084.68 in 2008. Government
subvention, which was 20.9% of total income, increased by 17.7%
from GH¢131,352.96 in 2007 to GH¢154,638.33 in 2008. Internally
Generated Fund (IGF) which comprised retention, registration and
examination fees as well as fees from continuing professional
development programmes was the main source of income of the
Council. This contributed 77.5% of total income, increasing by 55.6%
from GH¢369,222.29 in 2007 to GH¢574,567.50 in 2008. Sundry
income, comprising bank interest and foreign currency translation
gain, contributed 1.5% of total income. Its significant rise was due to
increases in the translation gain and bank interest.
156
Expenditure
744. Total expenditure of which Personal Emoluments and
administrative expenses accounted for 17.5% and 30.5% respectively,
increased by 66.8% to GH¢684,497.22 from the 2007 figure of
GH¢410,489.90. The increases in expenditure on office cleaning,
printing and publication, foreign travels and travel and transport
accounted largely for the rise in administration expense. Service
activity expenses which was 42% of total expenditure, increased by
91% from GH¢150,483.24 in 2007 to GH¢410,489.90. This was
largely due to increases in expenditure on continuing medical
development and training and conferences. An amount of
GH¢68,566.96 was incurred in acquiring office equipment, furniture
and computer and it‟s accessories for the Council.
Financial position
Current assets
745. Current assets comprised debtors and cash and bank balances.
This went up by 38.0% from GH¢149,114.99 in 2007 to
GH¢205,702.45 in 2008. Staff debtors decreased by 9.2% from
GH¢22,565 in 2007 to GH¢20,494 in 2008.
746.
The Council had no short-term obligation to meet.
Accumulated Fund
747. The accumulated fund of the Council stood at GH¢205,702.45
(2007: GH¢149,114.99).
MANAGEMENT ISSUES
Procurements from non-VAT entities
748. A review of procurement transactions revealed that contrary to
FAR 183(4), management transacted business totalling GH¢15,809.00
with non VAT registered suppliers of goods and service. Tax revenue
of GH¢2,371.35 was lost to the state as a result of management‟s
failure to comply with FAR 183 (4).
157
749. We advised management to transact business with only VAT
registered suppliers in order to contribute to the revenue generation of
the state.
Poor record keeping for stores
750. Contrary to provisions of the Stores Regulations and FAR, we
noted that Stores Received Advice (SRA) did not support some
procurement transactions recorded in the store ledger. We also
observed that procurements amounting to GH¢23,516.00 were not
routed through stores.
751. These omissions which we attributed to the absence of a
qualified schedule officer in our opinion increased the risks of errors
in accounting for stores, non-delivery or diversion of stores.
Furthermore, costs charged to the accounts as reported at the end of
the year may not be accurate.
752. Management accepted our recommendation to ensure that all
procurement transactions comply with the relevant provisions of the
financial and stores regulations. On our recommendation that an
officer should be trained and assigned the responsibility of handling
the store, management informed us that in the interim, it had directed
an Accounts officer to take temporary charge of the stores.
MINISTRY OF ENVIRONMENT, SCIENCE AND
TECHNOLOGY
WATER RESEARCH INSTITUTE (CSIR)
Introduction
753. This report relates to the audited accounts of the Water
Research Institute (CSIR) for the year ended 31 December 2008.
158
Operational results
754. Total Income increased from GH¢2,132,329 in 2007 to
GH¢3,541,283 in 2008, resulting in an increase of 66.1%. The
increase was mainly due to 62.5% and 105% rise in Recurrent Grant
and Consultancy Fees respectively. The performance indicators are
shown in table 74:
Income
2008
2007
GH¢
GH¢
Income
3,541,283 2,132,329
Total Income
3,541,283 2,132,329
Expenditure
2,033,380 1,664,091
Travelling & Transport
36,032
39,629
83,301
93,759
Expenses
95,471
27,016
Training & Conf. Expenses
42,341
Consultancy Expenses
886,792
157,527
Depreciation
216,471
152,303
Total Expenditure
3,393,788 2,134,324
Surplus / (Deficit)
147,495
(1,995)
%
Change
66.1
66.1
22.2
(9.1)
(11.2)
253.4
462.9
42.1
59.0
(7,493.2)
755. Expenditure increased from GH¢2,134,324 in 2007 to
GH¢3,393,788 in 2008, registering an increase of 59.0%. This was
due to increases of 22.2% in Personnel Emoluments, 253.4% in
Repairs & Maintenance, 462.9% in Consultancy Expenses and 42.1%
rise in Depreciation Expenses. The significant rise in repairs and
maintenance cost resulted from increases in repairs and maintenance
on vehicles, office and bungalow buildings as well as office
equipment.
756. The year‟s operation ended with a surplus of GH¢147,496 as
against a deficit of GH¢1,995 recorded in 2007.
159
Financial position
757. Shown in table 75 is the summarised balance sheet as at 31
December 2008
Item
Fixed Assets
Current Assets
Current Liabilities
Net Current Assets / Liabilities
Net Assets
Current Ratio
2008
GH¢
305,729
1,267,961
365,565
902,396
1,208,125
3.5:1
2007
GH¢
194,678
668,436
65,445
602,991
797,669
10.2:1
%
Change
57.0
89.7
458.6
49.7
51.5
758. The Institute acquired additional Fixed Assets during the year
thus increasing the value of Fixed Assets to GH¢305,729 compared to
GH¢194,678 in 2007, showing a rise of 57.0%.
759. Current Assets rose by 89.7% to GH¢1,267,961 at the end of
2008. The increase was mainly due to an increase of 94.9% in Bank
and Cash Balances to GH¢1,189,375 in 2008. (2007: GH¢610,138).
760. Current Liabilities also registered a significant increase of
458.6% to GH¢365,565 during the same period as a result of the sharp
increase in Creditors and Accruals of which GH¢178,645 was owed to
Amalgamated Bank.
761. Liquidity, as measured by a current ratio, decreased from
10.2:1 in 2007 to 3.5:1 in 2008. The Institute, however, could
discharge its short-term obligations as they fall due.
INSTITUTE OF INDUSTRIAL RESEARCH (I.I.R)
Introduction
762. This report is on the audited accounts of the Institute of
Industrial Research for the year ended 31 December 2009.
160
Operational results
763. The operational results for the year ended 31 December 2009
are summarised in table 76:
Income
Total Income
Expenditure
Financial Charge
Administrative & General Expenses
Total Expenditure
Surplus/(Deficit)
2009
GH¢
1,786,179
109,163
1,895,342
2008
GH¢
1,560,608
134,054
1,694,662
%
Change
14.5
(18.6)
11.8
1,459,611
34,943
39
32,675
434,138
1,961,406
(66,064)
1,249,229
18,292
1,690
18,716
352,390
1,640,317
54,345
16.8
91.0
(97.7)
74.6
23.2
19.6
(221.6)
to GH¢1,895,342 in 2009. This was due to a 14.5% rise in
Government Subvention.
765. Total Expenditure rose by 19.6% to GH¢1,961,406 in 2009
from GH¢1,640,317 in 2008. Personnel Emoluments, Repairs and
Maintenance, Travelling and Transport, and Administrative and
General Expenses rose by 16.8%, 91.0%, 74.6% and 23.2%
respectively. The rise in repair and maintenance cost resulted from
increases in repairs and maintenance on motor vehicles and office
furniture and fittings whilst the increase in vehicle running expenses
accounted for the rise in travelling & transport cost.
766. The Institute‟s operational results ended with a deficit of
GH¢66,064 in 2009 as against a surplus of GH¢54,345 in 2008,
representing a 221.6% drop.
161
Financial position
767. Table 77 provides the balance sheet position as at 31 December
2009
Non-Current Assets
Current Assets
Current Liabilities
Net Current Assets/Liabilities
Net Assets
Current Ratio
2009
GH¢
301,464
302,533
430,103
(127,570)
173,894
0.7:1
2008
GH¢
190,337
425,845
376,224
49,621
239,958
1.1:1
%
Change
58.4
(29.0)
14.3
(357.1)
(27.5)
768. Non-Current Assets rose by 58.4% from GH¢190,337 in 2008
to GH¢301,464 in 2009 due to additions to Property, Plant and
Equipment.
769. Current Assets decreased by 29.0% from GH¢425,845 in 2008
to GH¢302,533 in 2009. This was due to a 17.1% decrease in
Accounts Receivables and a 35.7% decrease in Cash and Bank
balances.
2008 to GH¢430,103 in 2009, as a result of an increase in Accounts
Payable.
771. Net Assets dropped by 27.5% from GH¢239,958 in 2008 to
GH¢173,894 in 2009. Liquidity as measured by the current ratio
decreased from 1.1:1 in 2008 to 0.7:1 in 2009. This implies that the
Institute does not have enough resources to meets its short-term
obligations as they fall due.
MANAGEMENT ISSUES
Non-Current Assets
772. We observed that the cost of a new block which houses the
laboratories of the Chemistry and Material Divisions was not captured
162
in the financial statements. The cost did not reflect in the capital work
in-progress either, even though the project had been completed.
773. This implies that the Non-Current Assets amount has been
understated.
774. We recommended that Management make effort to find out the
cost of the new block so that it would be captured in future financial
statements.
775. Management informed us that all documents concerning the
new block have now been received and the cost ascertained adding
that this would be incorporated in 2010 accounts.
Insurance
776. We observed that there was no insurance policy covering both
the building and other assets apart from the vehicles.
777. This implies, no claims could be made in case of fire or natural
disaster resulting in a loss to the Institute.
778. We recommended that efforts be made to insure the assets of
the Institute.
CSIR-ROOT AND TUBER CROPS PROJECT
Introduction
779. This report relates to the audited accounts of the CSIR-Root
and Tuber Crops Project for the year ended 31 December 2009.
Operational results
780. Total Income registered an increase of 8.8% from GH¢723,543
in 2008 to GH¢786,919 in 2009. This resulted from the increase in
recurrent grants for the year. The sharp drop in other income was due
to the decline in receipts from the sale of farm produce. The
operational performance of the Project is shown in table 78.
163
Income
Total Grant For The Year
Other Income
Total Income
Recurrent Expenditure
Establishment & Administrative
Expense
Employment Cost
Research Expenses
Total Expenditure
Income Surplus/(Deficit)
2009
GH¢
786,867
52
786,919
2008
GH¢
722,704
839
723,543
%
Change
8.9
(93.8)
8.8
8,927
13,244
(32.6)
705,909
54,986
568
1,573
771,963
14,956
642,137
2,456
54,974
5,167
1,733
719,711
3,832
9.9
0.02
(89.0)
(9.2)
7.3
290.3
781. Expenditure incurred in 2009 totalled GH¢771,963 as against
GH¢719,711 in 2008, representing an increase of 7.3%. The
expenditure component included Establishment & Administrative
Expenses: GH¢8,927 (2008: GH¢13,244) representing a decrease of
32.6%.
782. The decrease in expenditure on Establishment and
Administrative Expenses was because no expenditure was incurred on
Postage, Telephone & Telex, Internet Charges, Office Consumables,
Honorarium Allowance and Generator Running Expenses.
783. The decrease in Repairs and Maintenance Expenditure was
largely attributed to the sharp drop in expenses on Office Equipment
and Motor Vehicle and nil expenditure on Research Equipment,
Office Building, Farm House and Boundary Protection.
784. An excess of income over expenditure of GH¢14,956 was
recorded at the close of 2009 compared with GH¢3,832 in 2008,
registering an increase of 290.3%
164
Financial position
785. Shown in table 79 is the financial position of the Project as at
31 December 2009.
Table 79: Balance Sheet as at 31 December 2009
Non-Current Assets
Current Assets
Total Assets
Current Liabilities
Net Assets
2009
GH¢
1,431
158,186
159,617
10,037
149,580
2008
GH¢
3,275
151,466
154,741
20,117
134,624
%
Change
(56.3)
4.4
3.2
(50.1)
11.1
786. The Project‟s Non-Current Assets went down by 56.3% from
GH¢3,275 in 2008 to GH¢1,431 in 2009. The decrease arose because
of depreciation charges.
787. Current Assets recorded a marginal increase of 4.4%, moving
from GH¢151,466 in 2008 to GH¢158,186 in 2009.
788. Current Liabilities made up of Account Payable decreased by
50.1% from GH¢20,117 in 2008 to GH¢10,037 in 2009. This was
largely due to decrease in Accruals from GH¢14,723 in 2008 to
GH¢1,406 in 2009.
789. Liquidity outlook as measured by a current ratio of 15.8:1
(2008: 7.5:1) remained very favourable, indicating the ability of the
Project to discharge its short-term obligations as and when they fall
due.
790. Net Assets grew by 11.1% from GH¢134,624 in 2008 to
GH¢149,580 in 2009.
165
ANIMAL RESEARCH INSTITUTE
Introduction
791. This report relates to the audited accounts of the Animal
Research Institute of the CSIR for the year ended 31 December 2009.
Operational results
792. Total income rose from GH¢2,487,590 in 2008 to
GH¢2,914,285 in 2009, representing 17.2%. Government Grant
accounted for 93.4% of the Total Income for 2009. The rise in other
income resulting from gains on revaluation of live stock and foreign
exchange mainly accounted for increase in total income.
793. Total expenditure stood at GH¢2,879,579.00 in 2009 from
GH¢2,287,000.00 in 2008 showing a rise of 25.9%. Employment
Cost of GH¢2,407,246 accounted for 83.6% of the total expenditure
during the period under review. The increase in research allowance
accounted for the sharp increase in research expenses.
794. The Institution recorded a surplus of GH¢34,706 in 2009
compared with GH¢200,590 in 2008 a decline of 82.7% as shown by
the performance indicators in table 80.
Income
Grants
Other Income
Total Income
Expenditure
Establishment &
Administration
Employment Cost
Travelling & Transportation
Financial Charges
Research
166
2009
GH¢
2,721,906
192,379
2,914,285
2008
%
GH¢
Change
2,452,109
11.0
35,481
442.2
2,487,590
17.2
237,884
144,673
64.4
2,407,246
37,197
82,391
11,494
64,856
1,978,738
28,694
69,644
2,926
23,104
21.7
29.6
18.3
292.8
180.7
Depreciation
Total Expenditure
Surplus
38,511
2,879,579
34,706
39,221
2,287,000
200,590
(1.8)
25.9
(82.7)
Financial position
795. Table 81 provides the financial position as at 31 December
2009
Table 81: Balance Sheet as at 31December 2009
Non Current Assets
Current Assets
Current Liabilities
Net Current Assets
Current Ratio
2009
GH¢
160,349
1,235,908
997,247
238,661
1.2:1
2008
GH¢
187,191
955,714
820,907
134,807
1.2:1
%
Change
(14.3)
29.3
21.5
77.0
796. The Non-Current Assets of the Institution stood at GH¢160,349
in 2009 as against GH¢187,191 in 2008 registering a decrease of
14.3% due to depreciation charge for the year.
797. Current Assets rose from GH¢955,714 in 2008 to
GH¢1,235,908 in 2009, an increase of 29.3%. This increase was
mainly due to 67% rise in Inventories.
798. Current Liabilities also increased by 21.5% in 2009 from
GH¢820,907 in 2008 to GH¢997,247 in 2009 as a result of an increase
in Accounts Payable.
799. The current ratio stood at 1:2:1 as against 1:2:1 in 2008,
showing the Institute‟s inability to meet short term obligations falling
due.
MANAGEMENT ISSUES
Un-retired imprest - GH¢91,427.13
800. In accordance with the policy of the Institute all accountable
imprests are supposed to be retired 2 weeks after transacting business
on behalf of the Institute.
167
801. We however noted during the audit that imprests totalling
GH¢91,427.13 given to 44 officers to undertake various official duties
on behalf of the Institute and due to be retired were not retired as at
the close of the year. The accountable imprest holders are categorised
as follows:
No
Amount (GH¢)
i.
Retired staff
9
11,769.79
ii.
In active service (at post) 32
71,434.14
iii.
Deceased
3
8,223.20
802. Failure to retire imprest does not ensure accountability as the
fund could either be misapplied or appropriated. We recommended
that
i.
The unretired imprest should either be recovered from the
entitlement of the deceased and retired staff, or if already paid
the amount should be recovered from the retired staff and from
the next of kin of the deceased.
ii.
The Accountant must ensure that the amount outstanding
against the names of those in active service is deducted at
source from their monthly salaries.
803. Management informed us that Staff in active service would be
given two weeks ultimatum to retire their imprest while those about to
go on retirement will have their benefits on hold till they retire their
imprest. Meanwhile Management‟s advice and approval would be
sought to write off the imprest balance of the deceased staffs.
Non compliance with Social Security and tax law
804. We observed under payments to IRS on deductions from
workers salaries for December 2009. Total deduction for December
2009 was GH¢18,633.95. whilst total payment to IRS for the same
period totalled GH¢10,501.81. Also, the Institute owed SSNIT an
amount of GH¢284,841.00 as at 31 December 2009.
168
805. Since these are statutory obligations and failure to fulfil them
could attract sanctions, management was advised to settle its total
outstanding debts as soon as practicable.
806. Management informed us that the differences were due to
difference in payroll deduction and under release of subvention to
SSNIT and IRS by Controller and Accountant General Department
though payroll data was submitted to them. Meanwhile a letter had
been written to the Institute‟s Head Office notifying them of the short
fall in the release of SSNIT and the PAYE subvention by C&AGD
since all deductions are made by the Institute and forwarded to its
Head Office.
BUILDING AND ROAD RESEARCH INSTITUTE
Introduction
807. This report relates to the audited accounts of the Building and
Road Research Institute for the year ended 31 December 2009.
Operational results
808. The Institute continued to incur deficit in its operations from
2007 to 2009. The current deficit of GH¢151,196 showed an
unfavourable increase of 105.4% over the previous year‟s figure of
GH¢73,618.
809. Total income stood at GH¢3,705,941 in 2009 compared with
GH¢3,032,595 in 2008, representing an increase of 22.2%.
810. Government Grants of GH¢3,530,960.00 accounted for 95.3%
of the total income for the period under review. The rise in other
income which was largely the result of the increase in total income
was due to increases in rent receivables, sales of bricks and wood fuel
and pozo cement.
169
811. Total expenditure increased from GH¢3,106,213 in 2008 to
GH¢3,857,137 in 2009 or 24.2%. This was mainly due to an increase
in Employment Cost which accounted for 84.4% of the total outflows
for the current year.
812.
82:
Details of the performance indicators are summarised in table
Income
Government Grant
Consultancy Income
Other Income
Total Income
Expenditure
Establishment &
Administration
Employment Cost
Travelling & Transportation
Financial Charges
Total Expenditure
Surplus
2009
GH¢
3,530,960
(62,051)
237,032
3,705,941
2008
GH¢
2,826,691
40,877
165,027
3,032,595
%
Change
24.9
(251.8)
43.6
22.2
423,677
330,522
28.2
3,256,723
78,616
96,882
1,239
3,857,137
(151,196)
2,576,200
66,959
95,231
37,301
3,106,213
(73,618)
26.4
17.4
1.7
(96.7)
24.2
105.4
Financial position
813. Presented in table 83 is the Institute‟s financial position.
Fixed Assets
Current Assets
Current Liabilities
Net Current Asset
Net Asset
Current Ratio
170
2009
GH¢
10,260,992
222,044
578,730
(356,686)
9,904,307
0.4:1
2008
GH¢
849,709
234,686
533,425
(298,739)
550,970
0.4:1
%
Change
1,107.6
(5.4)
8.5
19.4
1,697.6
814. The Fixed Assets of the Institute increased from GH¢849,709
in 2008 to GH¢10,260,992 in 2009. This was due to the revaluation
of land and building as well as additions to other Fixed Assets. The
increase in Capital Work-In-Progress also accounted for the rise..
815. Current Assets however decreased from GH¢234,686 in 2008
to GH¢222,044 in 2009 or 5.4% due to a reduction in Accounts
Receivables.
816. Current Liabilities increased from GH¢533,425 in 2008 to
GH¢578,730 in 2009 resulting in an unhealthy liquidity position as the
current ratio stood at 0.4:1 in 2009 as against 0.4:1 in 2008, indicating
that the Institute cannot meet its short-term financial obligations as
and when they fall due.
ENVIRONMENTAL PROTECTION AGENCY
Introduction
817. This report relates to the audited financial statement of
Environmental Protection Agency for the years ended 31 December
2009 and 2008.
Operational results
818. Operations for the year closed with a surplus of GH¢323,898
compared with GH¢70,546 recorded in year 2008, registering a rise of
359.1%. Operational performance indicators are shown in table 84.
Income
Government Subvention & Grant
SBS-NREG Fund
Other Income
Total Income
2009
GH¢
3,362,699
1,291,461
711,653
30,013
5,395,826
2008
GH¢
1,889,350
891,668
22,522
2,803,540
%
Change
78.0
44.8
100
33.3
92.5
171
Less Expenditure
Service Activities
Expenses
Total Expenditure
Excess of Income over
Expenditure
2,346,076
1,123,344
1,583,206
1,716,939
523,654
476,549
36.6
114.5
232.2
19,302
5,071,928
323,898
15,852
2,732,994
70,546
21.8
85.6
359.1
819. Total Income for the Agency grew by 92.5% from
due to a significant rise of 78.0% in Government Subvention and
Grant from GH¢1,889,350 in 2008 to GH¢3,362,699 in 2009.
Internally Generated Funds (IGF) went up by 44.8% from
GH¢891,668 in 2008 to GH¢1,291,461 in 2009. The rise in IGF was
due to increases in receipts from EIA permit, pesticides registration
and chemical clearance.
820. Similarly, expenditure increased significantly by 85.6% from
GH¢2,732,994 in 2008 to GH¢5,071,928 in 2009. This was due to an
increase in all the expenditure items. Prominent among the increases
were service activity and general &administrative expenses cost. The
increases in programme activities and travelling & transport cost
accounted for the sharp increase in service activity cost whilst the
increase in staff development cost resulted in the rise in general &
administrative expenses.
Financial position
821. The Agency‟s financial position is presented in table 85:
Non Current Assets
Current Assets
Current Liabilities
Net Asset
Current ratio
172
2009
GH¢
5,521,994
1,952,242
55,159
7,419,077
35.4:1
2008
GH¢
376,501
1,410,556
73,849
1,713,208
19.1:1
%
Change
1,366.7
38.4
(25.3)
333.1
Non-Current Assets rose from GH¢376,501 in 2008 to GH¢5,521,994
in the year under review, a rise of 1,366.7%. This was occasioned by
additions in Motor Vehicles of GH¢184,365; Machinery and
Equipment GH¢4,693,938 and Furniture and Fittings of GH¢12,592.
822. Current Assets registered an increase of GH¢541,686 in 2009
from GH¢1,410,556 in 2008 to GH¢1,952,242 in 2009. The large
increase in Cash and Bank balances which constituted over 75.0% of
the Total Current Assets accounted for the increment.
823. Current Liabilities however, reduced from GH¢73,849 in 2008
to GH¢55,159 in 2009, registering a reduction of 25.3%. Payments of
Accounts Payable and Accruals accounted for the decrease.
824. Total Net Assets increased from GH¢1,713,208 in 2008 to
GH¢7,419,077 over the period largely due to an increase in NonCurrent Assets.
825. The Current ratio of 35.4:1 (2008: 19.1:1) indicated a
favourable liquidity position of the Agency.
MANAGEMENT ISSUES
Omission of Income: GH¢9,395.00
826. Our observation revealed that two receipt books of various
fees received totalling GH¢ 9,395.00 were not entered into the
Income Account in the ledger, thus resulted in understating EPA‟s
Income for the year 2009. Details are shown below:
Receipts No.
351 - 400
951 - 1000
Amount
GH¢3,219.00
6,176.00
GH¢9,395.00
827. The effect is that proper reporting and planning will not be
achieved as there is an understatement of income. Income could also
be lost and not accounted for.
173
828. We recommended that all receipts of income be properly
accounted for in the ledgers and prompt bank reconciliation made.
829. Management responded that the two receipt books were
mistakenly omitted from the accounts. Correction has been made for
the omission.
GC-Net banking transactions
830. We noted that EPA has been connected to the GC Net to
facilitate the clearance of chemical and pesticides from the ports.
Ghana Commercial Bank and Ecobank were mandated to collect fees
on behalf of EPA before permits could have been issued to importers.
831. We however, noted that the EPA could not do any
reconciliation since the opening of these bank accounts simple
because information is not enough to identify the individual payments
made to the banks.
832. Secondly, we noted that EPA did not receive the prior approval
of the Controller and Accountant General‟s Department and not
mandated to operate these bank accounts, therefore could not access
these bank accounts. As at 31 December 2009, bank balances were:
GCB
Ecobank
-
GH¢5,370.00
81,105.00
GH¢86,475.00
833. The effect is that the amounts are accumulating in these
accounts and yielding no interest to the organisation but losing their
value.
834. We recommended that the Governing Board and Controller and
Accountant-General together with EPA management should resolve
any bottlenecks surrounding the opening and operating of the bank
accounts.
174
NATIONAL ENVIRONMENT FUND
Introduction
835. This report relates to the audited financial statements of
Environmental Protection Agency National Environment Fund for the
year ended 31 December 2009.
Operational results
836. Total Income of the Fund rose by 38.4% to GH¢4,141,611 in
2009 from GH¢2,992,805 in 2008. The increase was due to a
significant rise of 35.1% and 91.9% in income from Levies and Other
Income respectively. The increase in the other income was attributed
to interest realized from Investment. Table 86 below depicts the
performance indicators for the period under review.
Table 86: Performance indicators for 2009
Income
Income from Levies
Other Income
Total Income
Less Expenditure
Monitoring and Investigation
Environmental Education
Research and Studies
Human Resource Development
Processing and Management Fees
Administrative & Other Expenses
Total Expenditure
Excess of Income over Expenditure
2009
GH¢
3,810,858
330,753
4,141,611
2008
GH¢
2,820,453
172,352
2,992,805
%
Change
35.1
91.9
38.4
146,636
121,870
88,009
1,253,566
313,245
1,923,326
2,218,285
67,951
200,835
71,894
876,668
805,312
2,022,660
970,145
79.3
22.4
43.0
(61.1)
(4.9)
128.7
837. Total Expenditure on the other hand was reduced by 4.9% to
GH¢1,923,326 in 2009 from GH¢2,022,660 in 2008. This reduction
was as a result of prudent economic policy instituted to cut down costs
where Administrative and Other Expenses went down by 61.1% from
GH¢805,312 in 2008 to GH¢313,245 in 2009.
175
838. Excess of Income over Expenditure recorded an increase of
128.7% from GH¢970,145 in 2008 to GH¢2,218,285 in 2009. This
amount had been transferred to the Accumulated Fund Account.
Financial position
839. The financial position of the Fund is shown in table 87.
Non-Current Assets
Current Assets
Current Liabilities
Net Assets
Current Ratio
2009
GH¢
512,794
4,990,417
402,600
5,100,611
12.4:1
2008
GH¢
647,113
2,238,950
3,738
2,882,326
599.0:1
%
Change
(20.8)
122.9
10,670.5
77.0
840. Non-Current Assets of the Fund registered a decrease of 20.8%
from GH¢647,113 in 2008 to GH¢512,794 in 2009 due to depreciation
charge.
841. Current Assets however, increased by 122.9% from
GH¢2,238,950 in 2008 to GH¢4,990,417 in 2009. The rise in
Investment from GH¢1,323,456 in 2008 to GH¢4,166,538 in 2009
contributed significantly to the increase in Current Assets.
842. Current Liabilities also increased by 10,670.5% from
GH¢3,738 in 2008 to GH¢402,600 in 2009. The sharp increase was
due to a GH¢394,832 rise in Other Accruals.
843. Net Assets stood at GH¢5,100,611 at the end of 2009 as against
GH¢2,882,326 in 2008.
844. The liquidity position of the Fund as indicated by current ratio
stood favourably at 12.4:1 in 2009 (2008: 599.0:1). This means that
the Fund would be able to meet its short term debts when they fall
due.
176
SCIENCE & TECHNOLOGY POLICY RESEARCH
INSTITUTE (CSIR)
Introduction
845. This report relates to the audited accounts of Science &
Technology Policy Research Institute of Council for Scientific &
Industrial Research for the year ended 31 December 2007.
Operational results
846. Total Income of the Institute recorded a growth of 59.1% or
GH¢175,753 increasing from GH¢297,382 in 2006 to GH¢473,135 in
2007. This was mainly due to increase in Other Income to the
Institute of 365.2%, though Government Subvention also went up
marginally by 16.8%. The rise in other income was due to increases in
project income and other miscellaneous income.
Performance
indicators for 2007 are presented in Table 88 below:
Income
Other Income
Total Income
Expenditure
Depreciation
Audit Fees
Total Expenditure
Excess
Income
over
Expenditure
2007
GH¢
305,102
168,033
473,135
2006
GH¢
261,265
36,117
297,382
%
Change
16.8
365.2
59.1
219,466
215,537
24,121
1,563
460.687
12,448
165,011
86,809
9,364
1,250
262,434
34,948
33.0
148.3
157.6
25.0
75.5
(64.4)
847. Total Expenditure increased from GH¢262,434 in 2006 to
GH¢460,687 in 2007, registering an increase of 75.5%. The increase
in total expenditure was the result of a significant rise in
Administrative Expenses and Depreciation. The procurement of
177
additional office equipment and motor vehicles accounted for the
increase in depreciation cost.
848. The Institute closed the financial year with an operational
surplus of GH¢12,448 representing a decrease of 64.4% over that of
the previous year which stood at GH¢34,948. The fall in surplus was
as a result of the upsurge in total expenditure.
Financial position
849. Provided in table 89 is the Institute‟s Balance Sheet as at 31
December 2007.
Non-Current Assets
Current Assets
Current Liabilities
Total Net Assets
Current Ratio
2007
GH¢
80,382
110,642
93,907
97,117
1.2:1
2006
%
GH¢ Change
34,596
132.3
68,704
61.0
18,631
404.0
84,669
14.7
3.7:1
850. Non-Current Assets rose from GH¢34,596 in 2006 to
GH¢80,382 in the year under review to record an increase of 132.3%.
The rise was as a result of acquisition of additional motor vehicles and
office equipment.
851. Current Assets also witnessed an increase of 61.0% in the
current year to GH¢110,642 from GH¢68,704 in the previous year. A
significant increase in specifically sundry debtors accounted for the
rise.
852. Current Liabilities registered a substantial increase of 404.0%
from GH¢18,631 in 2006 to GH¢93,907 in 2007. The increase was
attributed to a sharp rise in sundry creditors.
178
853. The liquidity position of the Institute as measured by the
current ratio of 1.2:1 (2006:3.7:1) showed an unhealthy position as the
Institute would not be able to meet its short-term obligations as and
when they fall due.
MANAGEMENT ISSUE
Sundry Debtors
854. Government Subventions are earmarked for specific purposes
and should not be utilised for internal transfers. We however noted
that, included in the balance of Sundry Debtors for year 2006 was a
brought forward figure of GH¢20,000 from year 2005, being funds
due from CSIR Head Office – Corporate Finance. This represents the
total of various amounts requested by Head Office, which was said to
be irrecoverable.
855. We noted that there was complete disregard for the purpose of
the subvention by Management and no clear guideline directive from
Director of Finance with regard to accounting treatment in the books.
Overstatement of the Sundry Debtors balance in the financial
statement will distort working capital ratio.
856. We recommended that Management give clear cut guidance on
how such inter-unit transfers should be captured in the accounting
books and Government Subventions should be utilised for the purpose
for which they are earmarked.
857. Management responded that the observation was well noted
and the normal practice of strictly utilising Government Subvention
for their intended purpose would always be complied with.
179
PLANT GENETIC RESOURCES RESEARCH
INSTITUTE (CSIR)
Introduction
858. This report covers the audited accounts of Plant Genetic
Resources Research Institute of Council for Scientific and Industrial
Research (CSIR) for the period 1 January 2008 to 31 December 2009.
Operational results
859. Total Income of the Institute increased marginally by 2.7%
from GH¢1,656,609 in 2008 to GH¢1,701,264 in 2009. Government
Subvention which was a major component of the Institute‟s income
increased marginally by 3.1%. However, other income for the period
declined by 13.6%. Table 90 shows the performance indicators.
Income
Other Income
Total Income
Expenditure
Employment Cost
Financial Charges
General Administrative
Expense
Depreciation Charges
Total Expenditure
Surplus/(Deficit)
2009
GH¢
1,665,112
36,152
1,701,264
2008
GH¢
1,614,747
41,862
1,656,609
%
Change
3.1
(13.6)
2.7
1,338,365
39,709
25,495
51,339
139,253
1,181,372
39,854
16,810
68,442
115,785
13.3
(0.4)
51.7
(25.0)
20.3
54,251
1,648,412
52,852
25,938
1,448,201
208,408
109.2
13.8
(74.6)
Total expenditure increased by 13.8% from GH¢1,448,201 in 2008 to
GH¢1,648,412 in 2009. The increase was mainly as a result of a rise
in employment cost, financial charges, depreciation charge and
general administrative expense. The increase in charges of bank
interest accounted for the rise in financial charges whilst depreciation
180
charge went up due to procurement of additional fixed assets. General
administrative expense also went up because of increases in meetings
and conferences cost and research expenses.
860. The Institute‟s operational results, however, recorded a
decrease in surplus of 74.6% from GH¢208,408 in 2008 to
GH¢52,852 in 2009. This amount was transferred to the income
surplus account.
Financial position
861. Shown in Table 91 below is the financial position of the
Institute as at 31 December 2009.
Non-Current Assets
Current Assets
Current Liabilities
Net Asset
Current Ratio
2009
GH¢
425,747
163,522
5,393
583,876
30.3:1
2008
GH¢
328,325
116,809
7,961
437,173
14.7:1
%
Change
29.7
40.0
(32.3)
33.6
862. Non-Current Assets registered an increase of 29.7% from
GH¢328,325 in 2008 to GH¢425,747 in 2009. The increase was
largely due to acquisition of new assets namely motor vehicle, office
equipment, furniture, fixture and fitting, farm equipment and additions
in cold room work-in-progress.
863. Current Assets increased by 40.0% from GH¢116,809 in 2008
to GH¢163,522 in 2009. A rise in stocks, debtors and prepayments
and cash and bank balances accounted for the increase.
864. Current Liabilities, however, dropped by 32.3% from
GH¢7,961 in 2008 to GH¢5,393 in 2009. The reduction was attributed
to settlement of creditors.
181
865. The liquidity position of the Institute as indicated by a current
ratio stood favourably at 30.3:1 in 2009 (2008:14.7:1). This means
that the Institute would be able to meet its short term debts when they
fall due.
MANAGEMENT ISSUES
Differences in SSF Deductions and payments – GH¢6,795.37
866. We noted that discrepancies between S.S.F. deductions and
remittance by the Controller and Accountant-General‟s Department
(C&AGD) and SSF deductions on the payroll by the Institute has
resulted in GH¢6,795.37 over payment recorded in the source
documents examined.
867. Management‟s failure to liaise with the C&AGD to reconcile
has resulted into this discrepancy and could result in a loss of revenue
to the Institute.
868. Discrepancies noted between SSF remittance by CAGD and
SSF deductions are shown below.
CLIENT’S SCHEDULE
5%
12.5%
Total
GH¢
GH¢
GH¢
January 1,552.09 3,880.23 5,432.32
February 1,568.86 3,922.15 5,491.01
March
1,576.25 3,940.63 5,516.88
April
1,576.25 3,940.63 5,516.88
May
1,607.35 3,957.71 5,565.06
June
1,586.08 4,025.85 5,611.93
July
1,587.55 3,968.86 5,556.41
August
1,866.78 4,666.96 6,533.74
Month
Total
PAYMENTS REMITTED
5%
12.5%
Total
Diff.
GH¢
GH¢
GH¢
GH¢
2,048.54 4,453.91 6,502.45 1,070.13
2,048.54 4,453.91 6,502.45 1,011.44
2,048.54 4,453.91 6,502.45
985.57
2,048.54 4,453.91 6,502.45
985.57
2,048.54 4,453.91 6,502.45
937.39
2,048.54 4,453.91 6,502.45
890.52
2,048.54 4,453.91 6,502.45
946.04
2,048.54 4,453.91 6,502.45
(31.29)
6,795.37
869. We recommended that Management liaise with the C&AGD to
reconcile and resolve the differences in SSF remittance and the
records of the Institute.
182
870. Management agreed to the discrepancies and notified corporate
CSIR Finance Directorate about the overpayment and immediate
action to rectify the situation.
Registration documents of vehicles purchased
871. We noted that corporate CSIR bought a Yamaha Terrain motor
vehicle costing GH¢9,949.99 for the Institute. No registration
documents were made available to ascertain its ownership. However,
the cost of the vehicle was disclosed as an interest free loan in the
accounting records.
872. Management failed to liaise with Corporate CSIR to clarify the
ownership status of the Yamaha vehicle.
873. Management should liaise with Corporate CSIR to resolve the
ownership status of these assets to ensure proper disclosure in the
financial statements for completeness.
874. Management in its response promised to secure the documents
soon.
FOOD RESEARCH INSTITUTE (CSIR)
Introduction
875. This report relates to the audited accounts of Food Research
Institute (CSIR) for the financial year ended 31 December 2009.
Operational results
876. The performance components for the review period are shown
in table 92.
183
Income
Recurrent Grant
Other Income
Total Income
Expenditure
Establishment & Administrative
Expenses
Employment Cost
Financial & Professional changes
Total Expenditure
Surplus/ (Deficit)
2009
GH¢
2,108,084
260,183
2,368,267
2008
GH¢
2,299,730
149,380
2,449,110
%
Change
(8.3)
74.2
(3.3)
340,473
270,826
25.7
2,033,485
28,564
62,268
5,587
2,470,377
(102,110)
1,854,343
33,285
57,884
3,125
2,219,463
229,647
9.7
(14.2)
7.6
78.8
11.3
(144.5)
877. Total income of the Institute recorded a decline of 3.3% in the
period under review from GH¢2,299,730 in 2008 to GH¢2,108,084 in
2009. This was due mainly to an 8.3% reduction in Recurrent Grant.
878. Total expenditure on the other hand, recorded an 11.3% rise
from GH¢2,219,463 in 2008 to GH¢2,470,377 in 2009. Employment
cost and establishment and administrative expenses accounted for
9.7% and 25.7% rise respectively.
879. The Institute recorded a deficit of GH¢102,110 in 2009 as
compared to a surplus of GH¢229,647 in 2008.
Financial position
Shown in table 93 is the financial position of the Institute as at 31 December
2009
184
Item
Non-Current Assets
Current Assets
Current Liabilities
Net Current Assets
Net Assets
Current Ratio
2009
GH¢
255,501
563,434
438,301
125,133
380,634
1.3:1
2008
GH¢
236,379
457,512
298,433
159,079
395,458
1.5:1
%
Change
8.1
23.2
46.9
(21.3)
(3.7)
880. Non-Current Assets registered an increase of 8.1% from
GH¢236,379 in 2008 to GH¢255,501 in 2009. This was attributed to
additions to furniture and fittings and motor vehicles.
881. Current Assets recorded an increase of 23.2% from
GH¢457,512 in 2008 to GH¢563,434 in 2009.
882. Current Liabilities, increased by 46.9% from GH¢298,433 in
2008 to GH¢438,301 in 2009.
883. The liquidity position of the Institute stood at 1.3:1 in 2009 as
compared to 1.5:1 in 2008 as measured by a current ratio indicates the
inability of the Institute to meet its short term obligations as and when
they fall due.
CENTRE FOR NATIONAL CULTURE
Introduction
884. This report relates to the audited accounts of the Centre for
National Culture for the two-year period ending 31 December 2009
Operational results
885. In 2009 total income of the Centre amounted to
GH¢390,008.89 compared with GH¢297,944.44 recorded in 2008,
representing an increase of 30.9%. Government subvention
185
constituted GH¢358,983.65 or 92.0% of total income and showed an
increase of 37.2% over the 2008 figure of GH¢261,732.19. Sundry
income representing income derived from ground rent, affiliation fees,
hire of hall, tuition fees and sales of exhibits constituted
GH¢31,025.24 (2008: 36,212.25), representing a decline of 14.3%.
The decline was as a result of failure to mobilise ground rent from
recalcitrant debtors. Table 94 shows the performance indicators.
Table 94: Income and expenditure account for 2009
Income
Gov't Subvention
Sundry Income
Total
Expenditure
Personal Emolument
Administrative Exp
Service Exp
Total
Expenditure
2009
GH¢
358,983.65
31,025.24
390,008.89
2008
GH¢
261,732.19
36,212.25
297,944.44
%
Change
37.2
(14.3)
30.9
255,111.16
52,116.74
38,329.00
345,556.90
44,451.99
215,499.04
44,128.68
32,432.75
292,060.47
5,883.97
18.4
18.1
18.2
18.3
655.5
886. Total expenditure of the Centre rose by 18.3% from
GH¢292,060.47 in 2008 to GH¢345,556.90 in 2009. A substantial
portion of the Centre‟s expenses was in Personal Emoluments which
registered GH¢255,111.16 as against GH¢215,499.04 incurred in
2008, representing an increase of 18.4%.
887. The Centre recorded an income surplus of GH¢44,451.99
compared with GH¢5,883.97 for 2008, thus showing a rise of 655.5%
in its operational performance. The increase was attributed to the
increase of 37.16% in Government Subvention during the year.
Financial position
888. Total Assets of the Centre grew by 40.1% from
GH¢104,969.89 to GH¢ 147,018.64 at the end of 2009. The liabilities
186
of the Centre which were mainly general deposit and sundry creditors
stood at GH¢14,052.46 (2008: GH¢16,455.70) representing a fall of
14.6%.
MANAGEMENT ISSUES
Failure to purchase from VAT registered persons
889. Section 30 (2) of the FAA 2003 stipulates that all MDAs and
MMDAs should procure government stores from only Value Added
Tax (VAT) registered persons.
890. We noted however, that the Centre procured goods and services
valued at GH¢794.56 from non-VAT registered suppliers.
Management‟s non-compliance with the law led to the loss of tax
revenue of GH¢119.18 to the state.
891. We recommended and management agreed to adhere to the
provisions of the FAA in future procurement dealings.
NATIONAL THEATRE OF GHANA
Introduction
892. This report covers the audited accounts of the National Theatre
of Ghana for the period 1 January 2008 to 31 December 2009.
Operational results
893. The operations for year 2009 ended with a surplus of
GH¢71,808.00 as against GH¢95,881.00 recorded in 2008,
representing a decline of 25.1%. Table 95 shows the performance
details:
187
Income
Operating Income
Subvention
Other Income
Total
Expenditure
Programme Development
Personnel Emolument
Admin Expenses
Travel & Transport
Maintenance, Repairs &
Renewal
Other Recurrent Expenditure
Total
Surplus/Deficit
2009
GH¢
535,175.00
488,851.00
78,846.00
1,102,872.00
2008
% Increase/
GH¢
(Decrease)
528,565.00
1.3
337,534.00
44.8
15,325.00
414.5
881,424.00
25.1
167,768.00
276,953.00
451,814.00
64,665.00
50,908.00
173,867.00
210,466.00
294,813.00
54,584.00
27,038.00
(3.5)
31.6
53.3
18.5
88.3
18,956.00
1,031,064.00
71,808.00
24,775.00
785,543.00
95,881.00
(23.5)
31.3
(25.1)
894. Total income went up by 25.1% from GH¢881,424 in 2008 to
GH¢1,102,872 in 2009. The increase was due to a rise in subvention
by 44.8% from GH¢337,534 in 2008 to GH¢488,851 in 2009 and
largely by a 414.5% rise in other income from GH¢15,325 in 2008 to
GH¢78,846 in 2009. The rise in other income resulted mainly from
increases in investment income and bank interest received
895. Total expenditure rose by 31.3% rise from GH¢785,543 in
2008 to GH¢1,031,064 in 2009. With the exception of Programme
Development and other recurrent expenditure, the remaining
expenditure items went up.
Significant among them was
Maintenance, Repairs and Renewal registering an increase of 88.3%
from GH¢27,038 in 2008 to GH¢50,908 in 2009, Administration
Expenses went up by 53.3% from GH¢294,813 in 2008 to GH¢
451,814 in 2009, Personnel Emolument also rose by 31.6% from
GH¢210,466 in 2008 to GH¢276,953 in 2009.
896. The increases in costs on maintenance of equipment as well as
building and ground resulted in the rise in maintenance, repairs and
renewal expenses. The rise in administrative expenses was largely due
188
to increases in communication, printing and stationery,
protocol/refreshment, and medical cost. Expenditure incurred on staff
packages, insurance on motor vehicle and staff also contributed to the
rise in administrative expenses.
Financial position
897. The Theatre‟s non-current assets stood at GH¢1,395,605 in
2008. This however went up by 6.9% to register GH¢1,492,096 in
2009 due to procurement of additional assets amounting to
GH¢189,227.
898. Current Assets dropped marginally by 5.8% from GH¢332,012
in 2008 to GH¢312,758 in 2009. The drop was due to decreases in
accounts receivable by 8.1% from GH¢160,533 in 2008 to
GH¢147,577 in 2009 and cash and bank balance by 6.2% from
GH¢168,773 in 2008 to GH¢158,354 in 2009.
899. Current liabilities also dropped by 38.7% from GH¢128,751 in
2008 to GH¢939 in 2009. The drop was due to a decline in
outstanding electricity bill of 79% from GH¢96,157 in 2008 to
GH¢19,601 in 2009.
900. The year ended with a current ratio of 3.9:1 indicating the
Theatre‟s favourable position to meet its short-term obligations falling
due.
MANAGEMENT ISSUES
Unaccounted for revenue - GH¢39,956.82
901. We noted during our audit that contrary to FAR 18 which
provides that all revenue collected should be banked in gross before
disbursements are made, GH¢1,066,948.7 or 91.9% out of total
revenue collection of GH¢1,161,504.79 was banked whilst the
remaining 3.4% amounting to GH¢39,956.82 was not accounted for
by the Accountant
189
902. Out of the total amount banked, we observed that
GH¢54,579.18 or 4.7 % of the total revenue was disbursed directly
from the collections. We also noted that this was concealed by raising
cash cheques, which were withdrawn, added to the unspent revenue
balance before banking; resulting in delayed banking of the revenue
collected.
903. Management explained that the lapse occurred as a result of
suppliers of goods and services demanding cash instead of cheque
payment.
904. This practice, which could be abused through temporary
borrowing, and other cash manipulations also led to the loss of tax
revenue since no tax was withheld on the payments to suppliers.
905. We advised management to desist from such improper
spending and ensure that the outstanding revenue of GH¢39,956.82 is
accounted for or the Schedule Officer, authoring and approving
officers be held liable for a refund. We further advised management to
adhere to the regulation stated above.
906. Management informed us that measures would be put in place
to ensure that all revenue collected is banked intact.
Unpresented payment vouchers – GH¢15, 076.58
907. The Accountant could not produce for audit 22 payment
vouchers amounting to GH¢15,076.58. The lapse was attributed to
poor filing of the payment vouchers in violation of FAR 262, which
enjoins a departmental head to ensure that financial and accounting
records are preserved in a manner that facilitates ready access for
reference.
908. We could therefore not determine the propriety or otherwise of
the expenditure in the absence of the vouchers.
190
909. Management was advised to ensure compliance with FAR 262
and make efforts to trace and present the outstanding 22 payment
vouchers for audit, otherwise the paying officer should be held liable
for a refund of the amount of GH¢15, 076.58.
Overtime payment not taxed
910. Contrary to Section 28(1) (i) (ii) of the Internal Revenue
Regulations management paid a sum of GH¢164,816.26 as overtime
allowance during the period under review without withholding the
required tax.
911. Management‟s inaction deprived the government of revenue
needed for its development programmes and this omission could also
attract sanctions.
912. We therefore recommended that management comply with the
above provision in subsequent payments, failure of which responsible
officials would be surcharged for revenue losses to the state.
KWAME NKRUMAH MEMORIAL PARK
Introduction
913. This report covers the audited accounts of the Kwame
Nkrumah Memorial Park for the financial years ended 31 December
2008 and 2009.
Operational results
914. Total income registered an increase of 60% from GH¢
119,378.00 in 2008 to GH¢190,985.53 in 2009. The increase was
mainly due to a 63% rise in the Internally Generated Fund (IGF)
realised due largely to increases in gate and car park proceeds.
Presented in table 96 are the Park‟s performance indicators.
191
Income
Subvention
IGF
Total
Expenditure
Allowances (PE related)
Administration
Service
Total
Surplus/Deficit
2009
GH¢
15,789.57
175,195.96
190,985.53
2008
GH¢
11,911.22
107,466.78
119,378.00
%
Change
32.6
63.0
60.0
65,450.51
121,217.34
2,636.93
189,304.78
1,680.75
42,784.59
84,379.21
3,385.00
130,549.16
(11,171.16)
53.0
43.7
(22.1)
45
115.0
915. Expenditure incurred in 2009 totalled GH¢189,304.78 as
against GH¢130,549.16 in the previous year, representing an increase
of 45%. The expenditure component was made up of Personnel
Emoluments (P.E) related allowances of GH¢65,450.51 (GH¢
42,784.59 in 2008), GH¢121,217.34 for Administration
(GH¢84,379.21 in 2008) and Service Activity amounted to
GH¢2,636.93 (GH¢3,385 in 2008). The 53% and 43.7% increases in
P. E related allowances and Administrative expenses respectively
accounted for the rise in total expenditure. The increase in the P.E
related allowances arose due to a rise in salary whilst the purchase of
furniture, payment of water bills and contract cleaning mainly caused
the rise in administrative expenses.
916. An operational surplus of GH¢1,680.75 was recorded during
2009 as against a deficit of GH¢11,171.16 in 2008.
Financial position
917. The Park did not declare any non-current asset in the financial
statement. Management explained that the fixed assets of the Park
were yet to be valued and included as an asset in the financial
statement.
192
918. There were no current liabilities for the period. Therefore the
liquidity outlook was represented by the current assets which were
made up of bank and debtors balances totalling GH¢2,646.53
indicating the solvency position of the Park.
MANAGEMENT ISSUES
Payment vouchers not properly acquitted - GH¢39,073.54.00
919. We observed that payments made for goods and services
totalling GH¢39,073.54 were without supporting documents such as
memos, invoices, payment orders and official receipts for
authentication. The Accountant‟s non-compliance with FAR 39 (2c)
and the failure of the Approving Officer to ensure that the above
stated FAR was adhered to resulted in the anomaly.
920. Management agreed to our recommendation to obtain the
relevant documents to support the payment vouchers involved;
otherwise the amount should be recovered from the Accountant and
Approving Officer.
Failure to withhold tax
921. Contrary to provisions of the Internal Revenue Act (Act 592),
we noted that salary related allowances totalling GH¢27,698.21 of
temporary workers were not taxed. Similarly, the Accountant failed to
deduct an amount of GH¢513.45 from various allowances paid to
other workers of the Park.
922. In a related development, 5% withholding tax of GH¢998.91
was not deducted from the payments of goods and services worth
GH¢19,978.20 in spite of the recommendation in our previous audit
report and in contravention of the relevant provisions of the tax law.
923. The irregularity which we attributed to the failure of the
Accountant to comply with the above stated regulations did not
enhance cash flow into the Consolidated Fund.
193
924. We advised the Accountant to adhere to the relevant IRS laws
to avoid loss of state funds and sanctions; otherwise he would be
surcharged for future losses.
925.
Management accepted our recommendation for compliance.
Overpayment of allowance to former Director - GH¢592.79
926. Our payroll review disclosed that from February 2009 to
December 2009 the former Director, Mr. Kweku Manu-Asiamah was
overpaid maidservant allowance to the tune of GH¢592.79. Although
management reported the overpayment to the Controller and
Accountant General‟s Department (C&AGD) vide letter number
KNMP/4.3/248 dated 19 November 2009 for necessary action, the
excess payment was not recovered from Mr. Manu-Asiamah‟s salary
until he retired in March 2010.
927. C&AGD‟s inaction which was in contravention of FAR 45
which states “overpayment shall be recovered immediately and paid
into the account from which it was originally paid”, resulted in a drain
on the government limited financial resources.
928. The former Director however requested for time to refund the
amount involved.
929. We demanded that the former Director should be specific and
advised management to pursue recovery of the amount to chest.
Irregular procurement of goods and services
930. Management failed to comply with the procurement procedures
set out in the Public Procurement Act, 2003 (Act 663) in acquiring
goods and services. There were neither procurement plans contrary to
Section 21(1) of Act 663 to support annual programmes of the Park
nor Tender Committee to ensure that procurement procedures
prescribed by the Act were followed.
194
931. User departments therefore initiated and carried out the
purchase of goods and services as and when the need arose. The
practice blurred transparency as a result of which value for money
might not be achieved.
932. Additionally, purchased goods totalling GH¢19,046.72 were
not routed through stores. Though our follow up revealed that the
goods were procured and used in the furtherance of the objects of the
Park, the foregoing situation lends itself to diversion of stores,
amongst other store malpractices.
933. We recommended and management agreed to comply with the
relevant provisions of the PPA in obtaining goods and services for the
Park. Management also accepted our recommendation to route all
purchases through stores in accordance with Chapters 0502 and 0601
of Stores Regulations, 1984.
Failure to procure from VAT registered entities
934. We observed that management failed to transact business with
VAT registered persons or entities in procurement of its goods and
services, contrary to Regulation 183(4) of L.I 1802.
935. We drew management attention to the need to comply with the
above stated regulation in order to contribute to the revenue
generation of the state.
936. Management explained that due to insufficient funding, its
goods and services were most often procured on small scale from
suppliers whose capital was below the threshold required by VAT
Service hence the lapse, but agreed to subsequently procure all goods
and services from only VAT registered suppliers.
DU BOIS CENTRE
Introduction
937. This report covers the audited accounts of the Du Bois Centre
for the two year period ended 31 December 2009.
195
Operational results
938. The Centre ended the year with an operational surplus of
GH¢11,760.16 as against a deficit of GH¢1,135.07 in 2008. Total
income for 2009 amounted to GH¢89,056.31 as compared with the
previous year‟s figure of GH¢53,296.07, thus, registering an increase
of GH¢35,760.24 or 67.1%. This increase was mainly due to the grant
received for the ASWARD programme as well as GH¢9,243.58 or
28.5% rise in the Internally Generated Funds from the 2008 figure of
GH¢32,424.50 to GH¢41,668.08 in 2009. Presented in table 97 are
the revenue performance indicators:
Income
Grants & Other Income
Total
2009
GH¢
20,784.62
41,668.08
26,603.61
89,056.31
2008
GH¢
20,871.57
32,424.50
53,296.07
%
Increase/
Decrease
(0.4)
28.5
100
67.1
Expenditure
939. Total Expenditure for 2009 amounted to GH¢77,296.15 as
against GH¢54,431.14 recorded in 2008. This showed an increase of
GH¢22,865.01 or 42.0% over the previous year‟s expenditure. The
increase was largely due to increase in the Centre‟s service activity
expenses, which registered a 236.9% increase as a result of the
ASWARD programme that was ran in 2009. The indicators are
shown in table 98:
Table 98: Expenditure statement for 2009
Expenditure
Personal Emoluments
Administration
Service
Total
Excess of
Income/Expenditure
196
2009
GH¢
15,644.86
36,705.28
24,946.01
77,296.15
2008
GH¢
15,866.47
31,160.14
7,404.53
54,431.14
% Increase/
Decrease
(1.4)
17.8
236.9
42.0
11,760.16
(1,135.07)
1,136.1
Financial position
940. Current Assets for 2009 amounted to GH¢20,047.35 as against
GH¢8,281.69, representing an increase of GH¢11,765.66 or 142.1%
over the 2008 figure. This was mainly due to increase in bank balance.
The current assets for 2009 were made up of cash and Bank balances
of GH¢17,309.30 and account receivable of GH¢2,738.05. The
current liabilities on the other hand was made up of GH¢31.70 owed
to authors of books sold at the souvenir shop and GH¢30.00
refundable deposit made against hiring of the Centre‟s plastic tables
and chairs.
941. The Accumulated Fund recorded an increase from
GH¢8,225.49 in 2008 to GH¢19,985.65 or 143.0% in 2009 due to
excess of income over expenditures amounting to GH¢11, 760.16.
MANAGEMENT ISSUES
Unaccounted for funds - GH¢ 683.13
942. Contrary to FAR 15 which requires any public officer who
collects or receives public funds to pay them into the relevant bank
account within 24 hours of receipt, we observed that the former
Accountant failed to promptly bank moneys collected resulting in a
cash holding of GH¢1,232.13 as at the time the incumbent Accountant
took over in November 2009. A further review revealed that only
GH¢549.00 out of the above stated amount was lodged in January
2010 leaving a balance of GH¢683.13 outstanding.
943. The current Accountant accepted responsibility for the
unaccounted amount of GH¢683.13 at a meeting held between the
audit team, the current and previous Accountants. This situation,
which we attributed to lack of managerial reviews, has a high risk of
cash misappropriation.
944. At the instance of the audit the accountant refunded the
difference of GH¢683.13 into the Centre‟s coffers.
197
945. We recommended that management ensure strict compliance
with FAR 15 and in subsequent years, a board of survey be constituted
to certify year-end cash on hand.
946. Management explained that the anomaly was due to the late
arrival of the internal auditor prior to the departure of the accounts
officer and that the matter would be referred to the Chief Director.
Overdue debts - GH¢200.00
947. We noted that, a tenant, Emi Root Flavours owed rent to the
tune of GH¢630.00 since August 2009. The lapse was due to the fact
that management was yet to finalise a new tenancy agreement
following the expiry of the previous agreement in March 2009.
948. At the instance of the audit the Company paid an amount of
GH¢420 into the Centre‟s account resulting in an outstanding balance
of GH¢200, which we advised management to recover.
NATIONAL COMMISSION ON CULTURE
Introduction
949. This report covers the audited accounts of the National
Commission on Culture for the period 1 January 2008 to 31 December
2009.
Operational results
950. The Commission recorded an excess income of GH¢5,992.75
as against GH¢136,297.22 recorded in 2008 representing a decrease of
95.6% in 2009. Presented in table 99 are the performance indicators.
Item
Total Income
Less Expenditure
Personal Emoluments
Admin Activities
198
2009
GH¢
270,614.75
2008
GH¢
509,560.13
%
Change
(46.9)
166,110.17
43,603.00
290,636.84
45,963.62
(42.8)
(5.1)
Service Activities
Programmes
Workshop
Total Expenditure
Excess of
Income/Expenditure
10,552.30
44,356.36
264,621.83
5,992.75
11,934.50
20,673.95
4,054.00
373,262.91
136,297.22
(11.6)
114.6
(29.1)
(95.6)
951. Total income of the Commission fell by 46.9% from
GH¢509,560.13 in 2008 to GH¢270,614.75 in 2009. Prevalent in this
decrease was a 54.0% fall in subvention from GH¢492,973.13 in 2008
to GH¢226,613.10 in 2009. The significant percentage decrease in
subvention was as a result of a decreases in releases for investment
activity from GH¢144,438.17 to GH¢ 6,347.63 or 95.6% respectively.
952. Total expenditure decreased from by 29.1% from
GH¢373,262.91 in 2008 to GH¢264,621.6 in 2009. This was mainly
due to decreases in personal emolument by 42.8%. Administration
cost also decreased by 5.1% from GH¢45,963.62 in 2008 to
GH¢43,603.00 in 2009 whilst expenditure on service activity
decreased by 11.6% from GH¢11,934.50 in 2008 to GH¢10,552.30 in
2009.
Financial position
953. The Commission‟s Fixed Assets appreciated marginally by
1.7% from GH¢368,939 in 2008 to GH¢375,286.61 in 2009 due to
additions to buildings.
954. There was a decrease in debtors from GH¢3,819.00 in 2008 to
GH¢1,659.24 in 2009, registering a drop of 56.6% mainly due to
refund of car loan. Bank balance on the other hand increased from
GH¢3,292.00 in 2008 to GH¢5,094.62 in 2009, an increase of 54.8%.
Current liabilities made up of creditors increased marginally by 3.0 %
from GH¢676 in 2008 to GH¢696 in 2009. Hence with a current ratio
of 9.70:1 the Commission could meet its short-term obligations falling
due.
199
MANAGEMENT ISSUES
Fuel not accounted for
955. Section 35 (2a) of the Financial Administration Act, 2003 (Act
654) stipulates “accountability is discharged when government stores
have been consumed in the course of public business and records are
available to show that the government stores have been consumed”.
956. Contrarily, our audit revealed that GH¢1,275.00 worth of fuel
allegedly purchased and issued to drivers of five official vehicles were
not recorded in the respective vehicle log books.
957. The anomaly arose due to laxity in supervision over the drivers
and could lead to misuse of fuel. The situation also rendered it
difficult for us to authenticate whether the fuel was used in the interest
of the Commission.
958. Management was advised to educate the drivers on the need for
keeping proper log books and improve upon supervision over the
drivers.
959. Management responded that it would strengthen the monitoring
and usage of vehicles and fuel.
LAND ADMINISTRATION PROJECT (LAP)
Introduction
960. This report covers the audited accounts of Ministry of Lands,
Forestry and Mines Land Administration Project (LAP) for the year
ended 31 December 2008.
Operational results
961. Total Income for year 2008 was US$24,999,509 and this
registered an increase of 54.9% over the previous year‟s figure of
200
US$16,139,717. The increase was mainly due to a 75.0% increase in
Recurrent Cost and introduction of Grants into the project. Details of
the Project‟s Performance for 2008 are shown in table 100 below:
Resources
Civil Works
Goods
Consulting
Training, Workshops & Studies
Recurrent Cost
Grants
Total Resources
Less Expenditure
Civil Works
Goods
Consulting
Training, Workshops & Studies
Recurrent Cost
Grants
Total Expenditure
2008
2007
US$
US$
153,527
123,343
7,686,280 5,929,668
6,784,298 3,844,396
3,736,994 2,466,333
6,607,015 3,775,977
31,395
24,999,509 16,139,717
30,184
1,756,612
2,939,902
1,270,661
2,831,038
31,395
8,859,792
%
Change
24.5
29.6
76.5
51.5
75.0
100.0
54.9
795,320
375,562
1,720,585
2,891,467
100.0
120.9
100.0
238.3
64.5
100.0
206.4
962. Similarly, the 206.4% rise in Total Expenditure of
US$8,859,792 recorded in 2008 (2007: US$2,891,467) was attributed
mainly to increases in payments of Goods of US$961,292; Recurrent
Cost of US$1,110,453 and Training, Workshops and Studies of
US$895,099 as well as the payment for Consultancy Services of
US$2,939,902.
Financial position
963. Shown in table 101 is the balance sheet position as at 31
December 2008.
201
Item
Project Expenditure
Current Cost
Total Assets
Represented by:
Loan
Grants
Government of Ghana(GoG)
CIDA
Total
2008
2007
US$
US$
24,999,509 16,139,717
637,773 1,573,874
25,637,282 17,713,591
%
Change
54.9
(59.5)
44.7
1,431,392
634,300
21,980,566 15,920,609
2,110,202 1,158,682
115,122
25,637,282 17,713,591
125.7
38.1
82.1
100.0
44.7
964. Project Expenditure for the period under review was
US$24,999,509 representing 97.5% of Total Assets. The increase was
due to Grants of US$31,395 introduced into the Project and increases
in equipment cost, consulting expenses and recurrent cost in the year
under review.
965. Current Cost on the other hand decreased by 59.5% from
US$1,573,874 in 2007 to US$637,773 in 2008. The decrease was as a
result of reduction in Cash and Bank Balances over the year.
966. Total Assets grew from US$17,713,591 in 2007 to
US$25,637,282 in 2008, a rise of 44.7%. The rise was as a result of
increase in the Project Expenditure.
967. The worth of LAP was represented by Grants and loan of
US$23,411,958 (2007: US$16,554,909), Government of Ghana Fund
of US$2,110,202 (2007: US$1,158,682) and CIDA of US$115,122
(2007: NIL).
202
MINERALS COMMISSION – INSPECTORATE DIVISION
Introduction
968. This report is on the audited accounts of Minerals Commission
– Inspectorate Division for the year ended 31 December 2008.
Operational results
969. Total Income of the Division increased by 106.5% from
GH¢760,218 in the previous year to GH¢1,569,760 in the current
year. The increase was mainly due to the 135.5% increase in
operational income.
970. Total expenditure also saw a rise from GH¢543,204 in 2007 to
GH¢1,004,063 in 2008, representing an increase of 84.8%. The
upsurge was due to a general increase in all the expenditure items.
Prominent among these were increases in financial charges, travelling
and transport cost and personnel emoluments. The rise in financial
cost resulted from the increase in bank charges whilst increases in
vehicle running cost & maintenance allowance and staff fuel
maintenance accounted for the rise in travelling and transport cost.
971. The Division recorded a surplus of GH¢565,697 for the year as
compared to GH¢217,014 in 2007. This amount was transferred to the
Accumulated Fund Account. Table 102 provides performance
components for the year under review.
Income
Income
Grants
Total Income
Proj. & Operating Expenses
2008
GH¢
1,376,678
193,082
1,569,760
591,773
181,663
139,292
13,574
2007
%
GH¢
Change
584,465
135.5
175,753
9.9
760,218
106.5
301,540
131,439
54,244
8,290
96.3
38.2
156.8
63.7
203
Financial Charges
Depreciation
Total Expenditure
Surplus / (Deficit)
612
77,149
1,004,063
565,697
59
47,632
543,204
217,014
937.3
62.0
84.8
160.7
Financial position
972. Presented in table 103 is the financial position of the Division
as at 31 December 2008
Non-Current Assets
Fixed Assets
Investments
Current Assets
Stocks
Sundry Debtors
Bank Balances
Cash Balances
Total Current Assets
Current Liabilities
Sundry Creditors
Minerals Commission
Total Current Liabilities
Net Assets
Current Ratio
2008
2007
GH¢
GH¢
1,088,544
997,641
188,542
247,866
1,277,086 1,245,507
24,732
55,351
525,552
1,948
607,584
%
Change
9.1
(23.9)
2.5
3,570
3,289
92,284
1,504
100,647
592.8
1,582.9
469.5
29.5
503.7
25,593
53,110
46,165
71,758
53,110
1,812,912 1,293,044
8.5:1
1.9:1
(51.8)
35.1
40.2
973. The Non-Current Assets which stood at GH¢1,245,507 in 2007
increased marginally by 2.5% to GH¢1,277,086 in 2008. This came
about as a result of the additions in Fixed Assets.
974. Current Assets also registered an increase of GH¢607,584 in
2008 as against GH¢100,647 in 2007. The 469.5% and 1,582.9%
increases in Bank Balances and sundry debtors accounted for the
significant rise in the Current Assets. The sharp rise in sundry debtors
204
was due to an increase in rent prepayments and amount owed by staff
and Golden star resource.
975. Current Liabilities increased by 35.1% from GH¢53,110 in the
previous year to GH¢71,758 in the current year 2008.
976. The Division registered a current ratio of 8.5:1 (2007:1.9:1)
which depicts that it can easily meet its short-term obligations when
they fall due.
FORESTRY COMMISSION
Introduction
977. This report relates to the audited accounts of Forestry
Commission for the financial year ended 31 December 2008 and
2009.
Operational results
978. The Commission‟s operations for year 2009 ended with a
surplus of GH¢15,054,817, thus, reversing the net deficit of
GH¢561,674 achieved in 2008. The increase in the year‟s surplus was
largely due to a GH¢16,140,207.00 or 37.5% increase in Total
Income. The operational result is shown in Table 104.
Income
Subvention from GoG
(IGF)
Plantation Development Grant
Recurrent Grant from Donors
Total Income
Expenditure
2009
GH¢
39,489,087
2008
GH¢
10,329,686
%
Change
282.3
9,078,188
9,345,561
1,216,615
59,129,451
16,229,858
10,559,714
5,869,986
42,989,244
(44.1)
(11.5)
(79.3)
37.5
21,154,365
16,930,063
25.0
205
Expenses
Provision for Depreciation
Project Expenses
Total Expenditure
Surplus/(Deficit)
4,927,590
15,759,589
1,558,873
674,217
44,074,634
15,054,817
4,234,381
17,864,117
1,152,674
3,369,683
43,550,918
(561,674)
16.4
(11.8)
35.2
(80.0)
1.2
2,780.3
979. Total Income for the year amounted to GH¢59,129,451, thus,
registering a 37.5% or GH¢16,140,207.00 increase from
GH¢42,989,244 in 2008. The increase in revenue was largely due to
Government of Ghana (GoG) Subvention that increased by 282.3% to
GH¢39,489,087 in 2009 from GH¢10,329,686 in 2008. The
significant increase in Government Subvention was able to contain the
respective 44.1%, 11.5% and 79.3% drop in revenue from Internally
Generated funds, Plantation Development Grant and Recurrent Grant
from Donors.
980. Total Expenditure of the Commission inched up by 1.2% or
GH¢523,716 to GH¢44,074,634 in 2009 from GH¢43,550,918 in
2008. Expenditure on Personnel Emolument was up by 25% mainly
due to upward review of Salaries. Administrative and General
Expenses registered a 16.4% rise due to increased expenses incurred
on Travel and Transport and Internet Subscription. Service Activity
Expenses on the other hand, dropped by 11.8% (GH¢2,104,528) from
GH¢17,864,117 in 2008 to GH¢15,759,589 in 2009. The drop in the
activities was due to a slow down in the Reforestation Activities of the
Commission that saw investment in Plantation Development
Activities dropped by GH¢2,287,867 to GH¢10,013,080 (2008:
GH¢12,300,947).
Financial position
981. The statement of financial position of the Commission is
presented in Table 105.
206
Non-Current Assets
Plant, Properties & Equipment
Capital Work in Progress
Current Assets
Current Liabilities
Total Liabilities
Net current Assets
Net Assets
Current Ratio
2009
GH¢
3,943,215
88,774
4,031,989
32,956,616
1,002,926
12,978,067
13,980,993
19,978,549
23,007,612
2.5:1
2008
GH¢
2,989,646
3,198,957
6,188,603
15,632,168
1,513,982
11,667,494
13,181,476
3,964,674
8,639,295
1.3:1
%
Change
31.9
(97.2)
(34.8)
110.8
(33.8)
11.2
6.1
403.9
166.3
982. Plant, Properties and Equipment, which stood at GH¢2,989,646
in 2008 increased to GH¢3,943,215 in 2009, thus recording an
increase of 31.9%. The increase was due to acquisition of Motor
Vehicles, Furniture and Equipment and transfer from Capital WorkIn-Progress.
983. Current Assets which stood at GH¢15,632,168 in 2008
increased to GH¢32,956,616 in 2009, recording an increase of
110.8%, largely due to increases in Short-Term Investments and Cash
and Bank Balances.
984. Current Liabilities of the Commission also increased by 11.2%
from GH¢11,667,494 in 2008 to GH¢12,978,067 in 2009.This was the
result of increases in amounts payable to Government of Ghana and
Office of Administrator of Stool Lands (OASL) on Competitive
Bidding and Stumpage Fees.
985. The Commission‟s liquidity ratio at the year-end was 2.5:1
(2008: 1.3:1). This is indication that the Commission is in a position to
meet its short-term liabilities as and when they fall due.
207
MANAGEMENT ISSUES
Payment of annual timber right fees on natural forest by
contractors
986. We observed that an amount of US$507,863 was being owed
by the under listed companies who were granted rights to harvest
timber and were to pay annual Timber Right Fees (TRF) as indicated
against their names.
Companies
Mondial Veneer
Carpo Ltd
J.D. Kwarteng
African Hardwood
Timbers
Tepa Sawmills Co.
Anapim Company Ltd.
Oti Yeboah Complex
Total
Annual Fees (TRF)
Payable
US$
101,000.00
52,363.00
48,000.00
65,000.00
71,000.00
10,500.00
160,000.00
507,863.00
987. With the exception of Mondial Veneer, the rest had not paid
their annual right fees for the past three years (2007-2009),
Nonetheless they continue to harvest timber in the forests allotted to
them. Consequently, the Commission is deprived of revenue from
Timber Right Fees.
988. We recommended that Management take the necessary action
to collect the accumulated unpaid annual right fees or take legal action
if the need arises against the recalcitrant debtors.
989. Management responded that the timber contractors named have
refused to pay off their indebtedness in spite of continuing pressure to
recover the debt after the timber right law was repealed.
208
Indebtedness of contractors to the Commission on Plantation
Bidding
990. We observed that some contractors who were indebted to the
Commission at 31 December, 2007 were allowed to bid for new
plantation concessions without settling their indebtedness to the
Commission.
991. The following amounts were outstanding at the time of the
audit (November 2009) in respect of biddings that took place several
years ago as indicated.
Biddings
1st Competitive Bidding- First
Phase
Plantation Timber
nd
2 Competitive Bidding-Natural
Forest
3rd Competitive Bidding-Natural
forest
4th Competitive Bidding-Second
Phase
Year of
Bidding
2003
Amounts Outstanding
31/12/2008
GH¢1,725,344.83
2004
US$396,363.00
2004
US$120,500.00
2006
GH¢1,197,158.56
992. We were of the view that collection has not been pursued
vigorously as a result of which the Commission is being deprived of
potential working capital.
993. We recommended that Management institute effective debt
collection mechanism to retrieve the outstanding amounts.
The Commission’s office complex under the Financial Sector
Development Project II (FSDP II)
994. We observed that the Commission was assisted by the DFID
under the Financial Sector Development Project II (FSDP II) to build
the office complex at Achimota near GIMPA.
209
995. Additional structural adjustments were made to the initial
design for which the Commission decided to bear the cost. Funds were
therefore transferred to FSDP II Bank Account No. 1234939 at NIB,
Osu for the construction of the complex.
996.
We noted the following weaknesses during the audit:
a. No building committee was set up to supervise the
construction of the office complex. Instead the Financial
Aid Administrator acted as the Project Manager and was
solely in charge of procurements and disbursement for the
project.
b. Parts of the construction works were farmed out to
contractors without competitive tendering.
c.
The Administrator was the sole signatory to the FSDP II
Bank Account at NIB, Osu.
d. Goods and Services were procured for the office complex
without competitive tendering.
e.
As at the time of the audit the Administrator had not
rendered any account to the Commission on how funds
amounting to GH¢2,385,186.26 transferred to the FSDP II
bank account No.1234939 at NIB Osu branch from 6
November, 2004 to 31December, 2008 were disbursed.
f.
The records of the Administrator were not made available
to the auditors for scrutiny.
997. We opined that there was no transparency in the disbursement
of funds for the construction of the complex.
998. We recommended that Management ensure that proper
accounts are rendered for construction of the office building complex.
210
999. Management responded that the Project ended in 2008 and the
building was transferred to the Commission. Also, in future, all
contract payments will be made direct to any contractor from the
Commission‟s account.
Indebtedness of Contractors and negotiated banks to the
Commission
1000. We observed that the total indebtedness to the Commission by
Timber Contractors and Negotiated Banks was GH¢11,689,591 as at
31 December, 2008 with the break down as follows:
Trade Debtors:
Stumpage Fees
Competitive Bidding
Negotiated Banks
Amount
GH¢
4,484,800
5,915,060
1,289,731
11,689,591
1001. Most of the debts have been disputed by the debtors for some
years. For example Sarmatex Timber and Plywood Ltd has been
disputing its indebtedness of GH¢285,515.44 since 31 December,
2003.
1002. We therefore, consider the provision for doubtful debts of
GH¢1,471,407 in respect of the above debts to be inadequate.
1003. The Commission might be overstating its Current Assets.
1004. We recommended that Management critically review the
indebtedness of contractors and negotiated banks to the Commission
and make adequate provision for those balances which appear
doubtful. Appropriate authorisation should be sought to write off
uncollectible balances.
Wood Industry Training Centre (WITC) Debtors
1005. We observed that WITC accept orders from private individuals
and staff to manufacture furniture for them. We realized that the under
211
listed persons were indebted to WITC to the tune of GH¢17,711.60 as
indicated in the table below.
Staff Debtors
Offices
Noble Biney
Henry Atta Paidoo
Mawuna Korley
Stephen Asigri
U. Armo
Afua Adu Boahen
Total
Private Debtors
N. Serkyire
Rex Quaye
Hon. Esther
Dapaah
FSDP II
Commission
Total
Grand Total
Head Office
“
“
“
“
“
Balance
Year of
31/12/08 Completion
(GH¢)
of job
315.00
2007
2,301.00
2007
1,557.60
2008
2,262.00
2008
758.00
2007
265.50
2008
7,459.10
680.00
2,500.00
3,150.00
2008
2008
2008
3,922.50
2007
Remarks
Retired
Retired
In service
In service
In service
In service
10,252.50
17,711.60
1006. The Centre is thus being deprived of its scarce budgetary
allocation that was used to complete the jobs.
1007. We recommended that Management take appropriate measures
to recover the outstanding amounts.
1008. Management stated that it has made various contacts and
appeals to them to settle their debts before 23 July 2010.
Overseas Debtor - C & H Engineering, United Kingdom
1009. We observed that WITC had a contractual agreement with
Minarch Equeatrias Ltd now C & H Engineering of the United
Kingdom to supply processed Denya T & G. On the 10th to 19th orders
of processed Denya T & G that were shipped, payment was received
for 10th to 18th shipment. Payment for the 19th shipment which was
212
made on the 10th December, 2008 had not been received as at the date
of audit. Reference is made to Bill of lading number 857503193 dated
15th December, 2008.
1010. The Finance Manager and the Director of the Centre wrote
reminders on 23/1/09 and 9/11/09 respectively to the buyer C & H
Engineering (copied to the Commission‟s Office Manager in London,
Mr. Donkor) to confirm whether the payment for the 19th shipment
had been made.
1011. Management stated that it has made various contacts and
appeals to them to settle their debts before 23 July 2010.
1012. No response was either received from the buyer, C & H
Engineering of United Kingdom or the Commission‟s Office
Manager, Mr. Donkor.
1013. The Commission might lose the amount involved.
1014. We recommended that Management investigate the payment
for the 19th shipment of processed Denya T & G.
Collection of Existing Trade Debtors
1015. We observed that only GH¢321,092 representing 6.7% of the
trade debtors balance of GH¢4,805,891 brought forward to 2008 was
collected in year 2008 while the 2008 invoices/debit notes amounting
to GH¢7,336,236 were fully settled.
1016. The recoverability of the 2008 opening trade debtors‟ balance
is doubtful.
1017. We recommended that Management investigate the true status
of the 2008 opening trade debtors‟ balance.
1018. Management said it had been exploring all avenues to collect
all the debts on the books; these, according to Management, may
include legal action, stringent credit control and debt write-off.
213
Exporting wood products without Timber Industry
Development Division (TIDD) export permits
1019. We observed that some exporters of wood products exported
teak without TIDD Export Permits at Tema and Takoradi harbours.
1020. Management detected the malpractice in year 2008 and set up a
committee to investigate the matter and make appropriate
recommendations to forestall recurrence.
1021. It was however, noted during the audit that the malpractice
continued in year 2009.
1022. Exportation of wood without TIDD Export Permit might lead
to loss of revenue to the state and the Commission.
1023. We recommended that Management have regular interactions
with the other stakeholders at the ports such as GHAPOHA and CEPS
so as to institute effective controls to stop the exportation of wood
products without permit from TIDD.
Merchant Bank- opening accounts without authorisation
1024. Contrary to FAR 47, we observed instances where Merchant
Bank opened new accounts using exporters‟ levies paid into the bank
without the authorisation by the TIDD Management. Due to this
practice by the bank there were two accounts for each of the foreign
currency (US$, Euro and GBP) Accounts maintained at the bank.
1025. This practice might be subject to abuse.
1026. We recommended that Management advise the bank not to
open any new account without prior authorisation by the Commission
through the Controller and Accountant General.
1027. Management said it has advised the Bank to seek prior
authorisation for any new foreign account they intend to open for the
Commission.
214
African Development Bank funding without recourse to
Headquarters
1028. Contrary to the financial management policy of the
Commission which requires that any inflow and out flow of funds
should be approved by the Chief Executive or the Director of Finance
and Administration, we observed that funds were remitted to the
understated district offices of the Forest Services Division by the
African Development Bank without recourse to the Chief Executive or
Director of Finance. Below are the receipt and disbursement of funds:
District
Ofinso Forest Services Division
Sunyani Forest Services Division
Akim Oda Forest Services Division
Begoso Forest Services Division
Receipts of
Disbursement
Funds
of Funds
GH¢
GH¢
865,404
281,437
413,743
409,140
62,734
62,734
107,389
143,465
1,449,270
896,776
1029. This might result in financial abuse as it lacks adequate
controls.
1030. We recommended that Management investigate the receipts
and disbursements by the respective District Offices and also enforce
strict compliance to the Commission‟s Financial Management policy.
1031. Management responded that it has since requested the
concerned District Managers to give the Corporate Headquarters
situation reports to enable it take up the issues on receipt and
disbursements by the districts.
Delay in completion of Bomfobiri wildlife reserve office at
Kumawu
1032. We observed that on September 26 2009, the Wildlife Division
awarded an office building contract to Wood Industry Training Centre
(WITC) to be completed in three (3) months. In October 2009, WITC
was paid a total of GH¢64,473. We noted that WITC subcontracted
215
part of the office building project to E-Base Ltd of Kumasi for a sum
of GH¢49,473 in respect of concrete, block works and roofing. By
November 2009, the subcontractor had been paid GH¢40,500 without
work certificates. However, a visit to the project site revealed that the
project had not been completed and been abandoned for lack of funds.
Besides GH¢10,000 of the GH¢64,473 received by WITC could not
be accounted for by the Executive Director.
1033. Memos from the Architectural and Engineering Services Ltd
(AESL) of the Ashanti Region had recommended that the entire
superstructure of the building should be demolished due to shoddy
work done by the main Contractor and its subcontractor E-Base Ltd.
1034. We advised that WITC Management should be held liable for
the completion of the building as they did not exercise due diligence
in the award of the contact while the Executive Director is made to
account for the sum of GH¢10,000.
1035. Management responded that a letter had been written to AESL
to evaluate the job and advise WITC Management on completion of
the project. AESL has since presented a report with recommendations
on actions that need to be taken. E-Base has also written to AESL that
the recommendations had been carried out and corrections made.
Management further explained that the GH¢10,000 was taken as
imprest for the Bomfrobiri project and had since been accounted for.
Indebtedness by negotiated banks to Timber Industry
Development Division (TIDD)
1036. We observed that within the accounts receivable from
stumpage fees is an overdue amount of GH¢2,492,357 that Negotiated
Banks owe to the Division. Thus the Negotiated Banks are depriving
the Commission and the Division of valuable funds.
1037. We advised management to intensify its effort to collect the
debt from the Banks as well as adopt a system whereby interest could
be imposed on the debts which are long overdue.
216
1038. Management has since written to the banks and transfers are
being made by the Banks into the account of Timber Industry
Development Division (TIDD).
PRECIOUS MINERALS MARKETING COMPANY
LIMITED (PMMC)
Introduction
1039. This report is on the audited accounts of the Precious Minerals
Marketing Company Limited (PMMC) for the financial year ended 31
December 2009.
Operational results
1040. The Company‟s operations for the year ended with a surplus of
GH¢675,937, an increase of 34.9% over a surplus of GH¢501,121 for
2008. The operational results are shown in table 106:
Income
Revenue
Cost of Sale
Other Income
Total Income
Expenditure
Selling & Distribution Expenses
Staff Cost
Finance Cost
Taxation
Total Expenditure
Surplus
2009
GH¢
2008
GH¢
%
Change
110,850,919
(108,650,784)
1,752,153
3,952,288
35,953,885
(34,571,727)
1,584,484
2,966,642
208.3
214.3
10.6
33.2
293,436
1,348,791
1,189,713
372,118
72,293
3,276,351
675,937
129,008
1,061,230
931,546
176,697
167,040
2,465,521
501,121
127.5
27.1
27.7
110.6
(56.7)
32.9
34.9
1041. Operating Income increased by 33.2% from GH¢2,966,642 in
2008 to GH¢3,952,228 in 2009. This was mainly due to a 208.3% rise
in revenue from Gold Export, Sale of Jewellery, Polished Diamonds
and Silver.
217
1042. Total expenditure also increased by 32.9% from GH¢2,465,521
in 2008 to GH¢3,276,351 in 2009. This was mainly attributed to a
127.5% rise in Selling and Distribution Expenses as well as a 110.6%
rise in Finance Cost.
Financial position
1043. Table 107 below shows a summary of the financial position of
the company.
Table 107: Financial position as at 31 December 2009 and 2008
Item
Non-Current Assets
Current Assets
Current Liabilities
Net Assets
Current Ratio
2009
GH¢
2,302,050
8,902,416
8,023,208
18,650
3,162,608
1.1:1
2008
GH¢
1,609,205
3,072,408
2,044,606
2,637,007
1.5:1
%
Change
43.1
189.8
292.4
19.9
Property, Plant and Equipment and a 139.2% rise in Investment
Property.
1045. Current Assets rose from GH¢3,072,408 in 2008 to
GH¢8,902,416 in 2009, a rise of 189.8%. This was due to increases in
Inventories, Trade and Other Receivables and Cash and Cash
Equivalents.
GH¢2,044,606 in 2008 to GH¢8,023,208 in 2009. This was due to a
549.2% rise in Accounts Payable and Accruals and a 259.2% increase
in Loans and Borrowings.
1047. Net Assets increased by 19.9% from GH¢2,637,007 in 2008 to
GH¢3,162,608 in 2009.
218
1048. The Company‟s liquidity ratio at the end of the year was 1.1:1
(2008: 1.5:1). This indicates that the Company would not be able to
meet its short-term liabilities as and when they fall due.
MOLE NATIONAL PARK
Introduction
1049. This report relates to the validation of the assets and liabilities
at the close of the Wildlife Division Support Project (Mole National
Park Component) for the period 1 October 2008 to 30 June 2009.
Operational results
1050. Total Expenditure of €191,551 was recorded for the period
October 2008 to June 2009. There was no funding from the Royal
Netherlands Embassy within the period. Details of performance
indicators are shown in table 108.
Table 108: Statement of income and expenditure
Income
Funding
Other Income
Total Income
Expenditure
Infrastructure
Transport Costs
Other Equipment
Training and Education
Personnel Costs
Aircraft Hire
Payments on behalf of MOL
9 months to
30 June
2009
€
-
Inception to
30 Sept.
2008
€
5,166,582
2,654
5,169,236
Cum. to 30
June 2009
51,155
51,625
2,422,498
625,196
483,126
613,366
229,794
358,077
109,528
-
2,422,498
625,196
483,126
613,366
229,794
409,232
109,528
51,625
219
5,166,582
2,654
5,169,236
FM
Payments of Outstanding bal.
to IUCN
Exchange Loss
Total Expenditure
(Deficit)/Excess of Income
over Exp.
3,600
85,171
191,551
(191,551)
34,858
4,876,443
292,793
3,600
120,029
5,067,994
101,242
1051. Total Income for the Park up to 30 June 2009 stood at
€5,169,236. Total Expenditure stood at €5,067,994 from €4,876,443
as at 30 September 2008. The increase was as a result of expenses
totalling €191,551 incurred from November 2008 to 30 June 2009.
Financial position
1052. Table 109 presents a summary of the financial position.
Table 109: Financial position as at 30 June 2009
Current Assets
Current Liabilities
Net Assets
Financed by:
Accumulated Fund
As at 30 June
As at 30 Sept 2008
2009
€
€
101,242
338,514
45,721
101,242
292,793
101,242
292,793
1053. Current Assets of the Park reduced to €101,242 as at 30 June
2009 from €338,514 as at 30 September 2008. The reduction in
Current Assets was due to paying off of the Current Liabilities which
stood at €45,721 as at 30 September 2008 and meeting of total
expenses of €191,551 incurred within the period 2008 to 30 June
2009.
220
MANAGEMENT ISSUES
Interest of €4,160 on Projects Funds transferred to
Park Welfare Account without approval
1054. We observed that interest earned on fixed deposit of €102,346
(GH¢217,700) amounting to €4,160 (GH¢8,849.06) was transferred to
the Park‟s Welfare account by the management of the Park without
seeking approval from the Ministry of Lands, Forestry and Mines or
the Netherlands Embassy.
1055. The interest of €4,160 was accrued as a result of investing
€102,346 of the Project funds in fixed deposits without approval from
the Ministry of Lands, Forestry and Mines or the Netherlands
Embassy.
1056. The inability of the Management of the Park to seek approval
for the investment and transfer of interest into welfare account may
result in project activities being delayed and deny them the use of
potential revenue.
1057. We recommended that formal approval be sought from
designated officials before such transactions are undertaken
KYABOBO NATIONAL PARK
Introduction
at the close of the Wildlife Division Support Project (Kyabobo
National Park Component) for the period 1 October 2008 to 30 June
2009.
Operational results
1059. There were no transactions for the nine months ended 30 June
2009.
221
1060. Performance indicators for the period are shown in table 110.
Income
Royal
Netherlands
Embassy
Transfers from MLRM
(IUCN)
Other Income
Total Income
Expenditure
Infrastructure
Transport-Vehicle
Other Equipment
Training & Education
Personnel Costs
Exchange Loss
Total Expenditure
(Deficit)/Excess of Income
over Exp
9 months to
30 June
2009
€
-
Inception to
30 Sept.
2008
€
419,126
-
Cum to 30
June 2009
€
2,628,009
50,804
-
288
419,414
329
2,679,142
-
93,315
23,315
117,448
148,743
42,213
68,323
6,354
499,711
(80,297)
873,174
107,105
291,159
395,293
202,877
352,697
6,284
2,228,589
450,553
1061. There was no change in total income and expenditure recorded
as at 30 September 2008.
Financial position
1062. The financial position of the Park is provided in table 111
222
As at 30 June 2009
€
Current Assets
Financed by:
Accumulated Fund
137
As at 30 Sept
2008
€
137
137
137
1063. Current Assets of the Park remained at €137 as at 30 June 2009
and comprised Cash and Bank Balances only.
Introduction
at the close of the Wildlife Division Support Project (Ministry of
Lands, Forestry and Mines Component) for the period 1 October 2008
to 30 June 2009.
Operational results
1065. The Ministry incurred an expense of €35,292 for the period
October 2008 to June 2009 as compared to a deficit of €1,581,649 for
18 months to 30 September 2008.
1066. Total Income of the Ministry for the period under review was
nil whereas €1,405,397 was recorded for the period up to 30
September 2008.
1067. Details of performance indicators are shown in table 112 :
223
Income
Funding
Expenditure
Short term assistance
Transfers
Transfers
Payments for commitments
Bank Charges
Total expenditure
Deficit/Excess of expenditure/Income
9 months to
30 June 2009
€
34,997
295
35,292
(35,292)
18 months to
30 Sept 2008
€
1,405,397
80,874
1,081,649
419,126
1,581,649
(176,262)
1068. The expenditure of €35,292 was incurred on Audit Fees –
€18,918, evaluation – Floris €10,566 business plan – €5,513 and Bank
Charges - €295.
Financial position
1069. The financial position of the Ministry is provided in table 113
Income
Current Assets
Financed by:
Accumulated Fund
9 months to
30 June 2009
€
29,030
18 months to
30 Sept 2008
€
64,322
29,030
64,322
1070. As at 30 June 2009, Current Assets made up of Cash and Bank
Balances and Account Receivable stood at €29,030. The reduction in
Current Assets from €64,322 at 30 September 2008 to €29,030 as at
30 June 2009 was as a result of payment of €35,292 incurred within
the nine month period.
224
MANAGEMENT ISSUE
Long Outstanding reconciling items
1071. We noted that amount of €29,650 transferred from the Ministry
to the Mole National Part since December 27, 2007 had not been
debited to the Project‟s bank account by the Bank of Ghana. Also an
amount of €450 being withholding tax in respect of Wisdom Consult
had not been presented to IRS since September 17, 2007.
1072. We recommended that the Ministry formally notify the Bank of
Ghana for the error to be corrected. Also, the Ministry should contact
IRS through Bank of Ghana to clarify the payment of €450 since
Management claimed that the amount had been paid to IRS.
HEAD OFFICE
Introduction
at the close of the Wildlife Division Support Project (Head Office
Component) for the period 1 October 2008 to 30 June 2009.
Operational results
1074. There were no transactions for the nine months ended 30 June
2009.
1075. Details of performance indicators are shown in table 114.
Income
Expenditure
(Deficit)/Excess
9 months to
30 June 2009
€
-
18 months to
30 Sept 2008
€
277,819
(277,819)
225
Financial position
1076. Presented in table 115is the Head Office‟s financial position
Table 115: Balance sheet as at 30 June 2009
Current Assets
Current Liabilities
Financed by
Accumulated Fund
As at 30 June
2009
€
4,129
As at 30 Sept
2008
€
30
4,159
4,129
4,129
1077. There were no Current Assets for the period under review.
Current Liabilities stood at €4,129 and this represents amount paid by
Mole National Park on behalf of Head Office.
COMMUNITY FORESTRY MANAGEMENT PROJECT
(Ministry of Lands, Forestry and Mines)
Introduction
1078. This report covers the audited accounts of the Community
Forestry Management Project for the period 1 January 2008 to31
December 2009.
Operational results
1079. The components of the income and expenditure of the Project
are provided in table 116.
Table 116: Income and expenditure for 2009
Income
Cash & Bank Balance/January
Disbursement from the Loan
Transfer from ADF Special
Account
Government of Ghana Contribution
Interest Received
226
2009
US$
443,143
2,509,750
1,423,115
2008
US$
214,445
2,767,127
1,506,194
%
Change
106.6
(9.3)
(5.5)
206,477
1,945
316,000
1,532
(34.7)
27.0
Other Receipts
Exchange Gain/Loss
Total Income
Expenditure
Investment Cost
Operating Expenses
Total Expenditure
Excess of Income/Expenditure
(surplus)
2,051
84,209
4,670,690
3,045
(63,494)
4,744,849
(32.6)
232.6
(1.6)
2,177,678
1,611,381
3,789,059
881,631
2,608,142
1,693,630
4,301,772
443,077
(16.5)
(4.9)
(11.9)
99.0
1080. Total Income reduced from US$4,744,849 in 2008 to
US$4,670,690 in 2009 showing a decrease of 1.6%. This was due to
the reduction in the main components of Total Income. These were
the reduction in:
i)
Disbursement from loan, decreasing by 9.3%,
ii)
Transfer from ADF Special Account, decreasing by
5.5% and
iii)
Government of Ghana Contribution, decreasing by
34.7%
1081. Total Expenditure showed a reduction from US$4,301,772 in
2008 to US$3,789,059 in 2009 registering a decrease of 11.9%. The
reduction in Total Expenditure was due to non-incurrence of certain
expenditure such as NTSC, Seed Equipment, Social Forestry, Training
Materials and Research. Also, there were massive cuts in some major
expenditure components such as Feeder Road, Footpath and Tracks
and Computers and Office Equipment.
1082. The overall result was that the surplus moved from
US$443,078 in 2008 to US$881,631 in 2009 registering an increase of
99.0%.
Financial position
1083. The financial position of the Project is shown in table 117:
227
Table 117: Financial position as at 31 December 2009 and 2008
Property, Plant Equipment
Current Assets
Current Liabilities
Net Current Assets
Accumulated Non-Capital
Expenditure
Net Assets
Current ratio
2009
US$
1,113,335
881,638
23,176
858,462
8,703,779
2008
US$
975,634
443,143
15,176
427,967
6,555,748
%
Change
14.1
99.0
52.7
100.6
32.8
10,675,577
38.0:1
7,959,349
29.2:1
34.1
1084. Fixed Assets increased by 14.1%, moving from US$975,634 to
close at US$1,113,335 in 2009. The increase was due to purchase of
additional Property, Plant and Equipment.
1085. Current Assets which was mainly Cash and Bank Balances
showed an increase of 99.0%, moving from US$443,143 in 2008 to
US$881,638 in 2009.
1086. The Project‟s liquidity position stood at 38.0:1 in 2009 as
against 29.2:1 in 2008, thereby this puts it in a favourable position to
honour its short-term obligations falling due.
MANAGEMENT ISSUE
Fixed Assets not distributed to beneficiaries
1087. We noted that, some of the fixed assets such as maize shellers
and grinding mills were yet to be distributed to their respective
beneficiaries under the project.
1088. The delay in distribution of these machines could deprive the
beneficiaries from reaping the benefits under the project.
1089. We recommended that the items be distributed immediately to
the beneficiaries.
228
WILDFIRE MANAGEMENT PROJECT OF THE
FORESTRY COMMISSION
Introduction
at the close of the Wildfire Management Project of the Forestry
Commission for the eight month period ended 30 June, 2009.
Operational results
1091. The operational results for the eight months ended 30 June
2009 are summarised in table 118:
Table 118: Income and expenditure statement for the period
ended 30 June 2009
Income
Transfer from Royal Netherlands
Embassy
Redemption of Letters of Credit
Total Income
Expenditure
Project output
Project Wide
Exchange Loss
Total Expenditure
Excess income/Expenditure
8-month
ended
30/6/09
€
-
Inception Cum. To
to
30/6/09
31/10/08
€
€
7,847,795 7,847,795
14,041
14,041
75,807
89,848
7,923,602 7,937,643
22,894
441
23,335
(9,294)
5,164,566 5,164,566
2,697,818 2,720,712
22,395
22,836
7,884,779 7,908,114
38,823
29,529
1092. For the 8-month period to the close of the project on 30/6/09
there was no transfer from Royal Netherlands Embassy (RNE). The
total transfer for the Project from RNE stood at €7,847,795.
Redemption of Letters of Credit for the 8-month period was €14,041.
Total Income over the project life stood at €7,937,643. Total
Expenditure for the 8-month period came to €23,335. This is
composed of General Expenditure (project wide) amounting to
€22,894 and Exchange Loss of €441.
229
1093. The Total Cumulative Expenditure on the project output to
30/6/09 came to €5,164,566. Project Output Expenditure were the
expenses incurred on the six (6) main deliverables under the project.
The excess expenditure over the period stood at €9,294 but the entire
project produced a surplus of €29,529.
Financial position
1094. Table 119 provides the financial position of the Project as at 30
June 2009
Table 119: Assets and liabilities as at 30 June 2009
Current Assets
Cash and bank balances:
Special Account
Imprest
Total
Current Liabilities
Accounts Payable:
WDSP
Internal Revenue Service
Total
Net Current Assets
30/06/09
€
31/10/08
€
30,817
905
31,722
39,670
1,346
41,016
(618)
(1,575)
2,193
29,529
(618)
(1,575)
2,193
38,823
1095. At the close of the Project the Current Assets which were Cash
and Bank Balances when netted with payables produced Net Current
Assets of €29,529.
MANAGEMENT ISSUES
Undisclosed commitment at the Resource Management
Support Centre (RMSC) - €4,092
1096. With the project closing in 2008, management should have
undertaken complete analysis of account payable and commitments
outstanding for appropriate decisions to be taken on them.
230
1097. To the contrary, the cash balance of €4,092, which stood in the
books at the close of the project on 31/10/08, was later used in settling
expenses, which were neither accrued in the 2008 financial statements
nor disclosed as a commitment. Details of the expenses are noted in
the table below:
Date
1/11/08
20/11/08
24/11/08
Description
Payment to
Emmanuel Motors in
respect of servicing
of project vehicles
Payment of
outstanding night
allowance to Project
Co-ordinator
Cost of maintenance
for Project
Coordinators vehicle
Amount
GH¢
Rate of
Euro to
the Cedis
Amount
4,480
0.6744
3,021
390
0.6747
263
1,200
0.6736
808
Total
4,092
1098. The commitments disclosed in the financial statement were
understated and therefore did not present fairly the project position as
it came to an end.
1099. We recommended that as part of project closing activities,
Management should make conscious effort to ensure that all
transactions, accounts payables and commitments are identified,
valued, appropriate accruals and disclosures made in the financial
statement to aid decisions regarding the status of assets and liabilities
at the end of the project.
1100. Management responded that the expenses incurred were not
anticipated but arose after the financial audit.
231
Project vehicles allocated to ex-officials had not been paid for
1101. Two project vehicles with registration numbers GR3380U,
GR3381U were not available for our inspection during the validation
of fixed assets.
1102. We were told that the vehicles were to be auctioned to the
former officials of the project. There was no evidence of any payment
made by these ex-officials regarding the vehicles.
1103. We recommended that Management speed up the process to get
the vehicles revalued to enable the officers pay the required amount
into the Project accounts.
1104. Management responded that Mr. Francis Agurgo had
GR3381U valued by STC and that he had been written to, to make the
payment. Also, GR3380U was allocated to the former Technical
Director of the Ministry of Lands and Natural Resources.
MINERALS COMMISSION SECRETARIAT
Introduction
1105. This report relates to the audited accounts of the Minerals
Commission Secretariat for the year ended 31 December 2008.
Operational results
1106. Income increased from GH¢3,129,985 in 2007 to
GH¢3,442,120 in 2008, an increase of 10.0%. Income realised from
Exemption Fees, Sale of Publication, Search and Information,
Processing Fees, Service Fees, Resident Permit Fees, Exchange
Adjustments and Interest on Investments accounted for the rise.
1107. Project and Operating Expenses went up from an amount of
GH¢2,121,408 in 2007 to GH¢2,816,573 in 2008, registering an
increase of 32.8%. The increase was as a result of a rise in expenses
on Personnel Emoluments, Travelling and Transport, Administrative
Expenses and Repairs and Maintenance.
232
1108. A surplus of GH¢625,547 was recorded in 2008 as against
GH¢1,008,577 in 2007, representing a fall of 38.0% which was due to
the significant increase in total expenditure
1109. This has been transferred to the Accumulated surplus account.
Performance components of the year under review are shown in table
120.
Income
Project Operational Expenses
Surplus
2008
GH¢
3,442,120
2,816,573
625,547
2007
GH¢
3,129,985
2,121,408
1,008,577
%
Change
10.0
32.8
(38.0)
Financial position
1110. The balance sheet position is presented in table 121.
Fixed Assets
Investments
Current Assets
Current Liabilities
Net Current Assets
Net Assets
Current Ratio
2008
GH¢
1,110,978
1,898,413
3,009,391
2,486,416
296,636
2,189,780
5,199,171
8.4:1
2007
GH¢
1,119,539
922,195
2,041,734
2,776,786
312,756
2,464,030
4,505,764
8.9:1
%
Change
(0.8)
105.9
47.4
(10.5)
(5.2)
(11.1)
15.4
1111. The investment of GH¢922,195 in 2007 rose to
GH¢1,898,413in 2008, registering an increase of 105.9%. An
additional investment in Fixed Deposit resulted in the increase.
233
1112. The Current Assets stood at GH¢2,486,416 in 2008 as against
GH¢2,776,786 in 2007 registering a decline of 10.5%. The fall in
Trade and Investment Debtors and Bank Balances accounted for the
decrease.
1113. Net Current Assets in 2008 stood at GH¢2,189,780 compared
to GH¢2,464,030 in 2007 thus registering a fall of 11.1%.
1114. The liquidity position of the Commission as shown by the
current ratio of 8.4:1 (2007: 8.9:1) shows that the short-term liabilities
can be met as and when they fall due.
MINERALS COMMISSION
Introduction
1115. This report covers the audited accounts of Minerals
Commission for the financial year ended 31 December 2009.
Operational results
1116. The Commission‟s income surplus for the year under review
went down by 86.1% and registered GH¢584,054 as against
GH¢4,204,547 recorded in the year 2008. Presented in table 122 are
the operational details.
Table 122: Income and expenditure statement for 2009 and 2008
2009
GH¢
Income
Budgetary Support (NREG)
Total Income
Expenditure
234
2008
GH¢
%
Change
5,575,770
3,004,950
8,580,720
4,818,803
193,082
3,477,800
8,489,685
15.7
(100.0)
(13.6)
1.1
2,952,295
422,734
4,061,160
2,092,834
367,571
1,498,213
41.1
15.0
171.1
Depreciation
Total Expenditure
Surplus / (Deficit)
94,651
465,826
7,996,666
584,054
54,184
272,336
4,285,138
4,204,547
74.7
71.0
86.6
(86.1)
1117. Total income increased by 1.1% to GH¢8,580,720 (2008:
GH¢8,489,685). The increase was due to the 15.7% increase in the
Internally Generated Fund.
1118. Total Expenditure increased sharply by 86.6% to
GH¢7,996,666 in 2009 (2008: GH¢4,285,138). This resulted from the
171.1% increase in Administrative Expenses, 74.7% increase in
Repairs & Maintenance and 41.1% increase in Personnel Emoluments.
The increase in administrative expenses was largely due to a
significant rise in legal and consultancy charges, whilst the increases
in repair and maintenance cost on residential and office building
accounted for the rise in expenditure on repairs and maintenance.
Financial position
1119. The highlights of the Balance Sheet as at 31 December 2009
are provided in table 123:
Non-Current Assets
Current Assets
Current Liabilities
Net Current Asset
Total Assets
Current Ratio
2009
GH¢
4,252,674
7,236,055
343,773
6,892,282
11,488,729
21.0:1
2008
GH¢
2,199,521
8,149,432
164,703
7,984,729
10,348,953
49.5:1
%
Charge
93.3
(11.2)
108.7
(13.7)
11.0
1120. Non-Current Assets rose from GH¢2,199,521 in 2008 to GH
¢4,252,674 in 2009, an increase of 93.3%. The increase was due to
additions to Property, Plant and Equipment.
1121. There was an 11.2% decrease in Current Assets from
GH¢8,149,432 in 2008 to GH¢7,236,055 in 2009. The 30.7% decrease
235
in Cash and Bank Balances from GH¢4,926,219 in 2008 to
GH¢3,413,211 in 2009 mainly accounted for the decrease in Current
Assets.
1122. Current Liabilities on the other hand rose by 108.7% from
GH¢164,703 in 2008 to GH¢343,773 in 2009. This was because of a
144.0% rise in Accruals.
1123. The Current Ratio for 2009 was 21.0:1 (2008:49.5:1). This
indicates the Commission‟s ability to discharge its short-term debts as
and when they fall due.
MANAGEMENT ISSUES
Dishonoured Cheques
1124. The audit team observed that the underlisted organisations,
which were indebted to the Commission, arose out of dishonoured
cheques.
Date
31-12-07
10-06-08
31-05-08
Name of Company
Vanfred Mining Company
Resolute Amansie (US$15,000)
Engineering Services
Amount (GH¢)
4,750
14,765
3,000
1125. As the recoverability of these amounts might be doubtful if not
given the necessary attention, we recommended that Management take
immediate steps to recover these amounts.
1126. Management responded that reminder letters have been written
to the organisations. However, no favourable responses have been
received from them. Therefore relevant information and documentary
evidence are being put together for the Legal Department to take the
necessary action against the companies.
Bonsa-Abawie Small Scale Mining Association
1127. We observed that the Commission sold mining equipment to
Bonsa-Abawie Small Scale Mining Association for US$47,000. The
236
Association paid US$17,000 and, per the agreement, it was to pay
three equal monthly instalments of US$10,000 by May 2009 to the
Commission. As at July 2010, the outstanding balance of US$30,000
had not been paid. Undue delay in the collection of the US$30,000
might render the amount irrecoverable.
1128. We recommended that the Commission take steps to recover
the US$30,000 from the Association.
1129. Management responded that there had already been a police
arrest and detention of three executive members of the Association.
They were released upon an agreement reached for the said repayment
schedule. However, they failed to honour the agreed instalment
payments. The Legal Department of the Commission has been advised
to take immediate steps to recover the outstanding debt.
OFFICE OF THE ADMINISTRATOR OF STOOL LANDS
Introduction
1130. This report is on the audited accounts of the Office of the
Administrator of Stool Lands for the year ended 31 December 2009.
Operational results
1131. Total Income registered a decrease of 5.2% from
GH¢2,391,307.92 in 2008 to GH¢2,267,373.14 in 2009. Internally
Generated Fund which is the major source of income fell by 9.0%
from GH¢1,442,907.65 in 2008 to GH¢1,313,751.47 in 2009. The fall
was attributed to a decline in revenue from timber royalties in 2009.
Alternatively, Public Funds or Government of Ghana (GoG)
subvention rose by 3.3% from GH¢896,807.65 in 2008 to
GH¢926,381.85 in 2009. Table 124 provides the performance
indicators.
237
Income
Public Fund (GOG)
IGF
Donor (LAP)
Exchange gain
Bid documents
Total
Expenditure
Personnel emoluments
Admin. Expenses
Service expenses
Project (lap) expenses
Total
Excess/(Deficit)
2009
GH¢
926,381.85
1,313,751.47
26,339.82
0.00
900.00
2,267,373.14
2008
% Increase/
GH¢
Decrease
896,807.65
3.3
1,442,907.65
(9.0)
25,826.65
2.0
24,865.97
(100.0)
900.00
0.00
2,391,307.92
(5.2)
793,954.00
944,353.56
510,462.83
26,990.13
2,275,760.52
(8,387.38)
781,109.64
1,079,604.97
334,691.01
25,805.32
2,221,210.94
170,096.98
1.6
(12.5)
52.5
4.6
2.5
(104.9)
1132. Total expenditure increased by 2.5% from GH¢2,221,210.94 in
2008 to GH¢2,275,760.52 in 2009. This increase was largely due to an
increase of 52.5% in service expenses from GH¢334,691.01 in 2008
to GH¢510,462.83 in 2009 resulting from a rise in expenditure on
seminar/meetings, hotel accommodation and fuel purchased.
Administration expenses on the other hand registered a decrease of
12.5%, from GH¢944,353.56 in 2009 as against GH¢1,079,604.97
incurred in 2008. The fall in Administrative expenses was mainly due
to a decline in repair and running cost of some over aged official
vehicles which have been replaced in 2008. Personnel emoluments
also registered a marginal increase of 1.6% from GH¢781,109.64
incurred in 2008 to GH¢793,954.00 in 2009.
1133. The Office ended the year with a net loss of GH¢8,387.38
compared with a surplus of GH¢170,096.98 obtained in 2008, thus
showing a decline of 104.9% in its operational performance. This was
mainly due to marginal increases in the elements of the Office‟s
income and largely due to the absence of realisation of any exchange
gain during 2009.
238
Financial position
1134. Total Fixed Assets increased by 3.2% from GH¢1,081,477.10
in 2008 to GH¢1,116,822.28 at the end 2009, due to the purchase of
furniture and equipment, computer & accessories and residential
properties at the Lake Side Estates in Accra.
1135. The Current Assets decreased by 24.1% from GH¢181,092.67
in 2008 to GH¢137,360.11 in 2009 due to a fall in its components,
namely loan debtors and cash at bank. The Office had no current
liabilities at the end of the period reviewed.
MINISTRY OF LOCAL GOVERNMENT AND
RURAL DEVELOPMENT
DECENTRALISATION SECRETARIAT
Introduction
1136. This report relates to the audited accounts of Decentralisation
Secretariat for the year ended 31 December 2008.
Operational results
1137. Summarised in table 125 is the Secretariat‟s income and
expenditure statement for the period.
Table 125: Resources and expenditure account for 2008
Resources
Royal Danish Embassy-Dec. Sec.
Royal Danish Embassy-NALAG
Agence Francaise Development
(AFD)
Government of Ghana
Others
Total Resources
2008
GH¢
1,174,200
87,885
434,237
2007
GH¢
976,534
98,768
139,226
%
Change
20.2
(11.0)
211.9
10,204
81,256
1,787,782
16,788
44,055
1,275,371
(39.2)
84.4
40.2
239
Expenditure
Personnel Cost
Administrative Cost
Service Delivery
Investment Activities
Total Expenditure
Surplus/(Deficit)
16,599
207,057
918,988
163,218
1,305,862
481,920
65,776
213,857
848,120
154,056
1,281,810
(6,438)
(74.8)
(3.2)
8.4
5.9
1.9
7,585.6
1138. Total Resources increased from GH¢1,275,371 in 2007 to
GH¢1,787,782 in 2008, representing an increase of 40.2%. This was
due to 211.9% increase in Agence Francaise de Development (AFD)
and 84.4% increase in Other Resources which comprised Exchange
Gain. The Exchange Gain went up by 1,379.3% from GH¢5,493 in
2007 to GH¢81,256 in 2008.
1139. Total Expenditure increased marginally by 1.9% from
GH¢1,281,810 in 2007 to GH¢1,305,862 in 2008. This was largely
due to a drop in Personnel Cost from GH¢65,776 in 2007 to
GH¢16,599 in 2008, registering a 74.8% decrease.
1140. As a result of the excess increase in resources over expenditure,
the Secretariat recorded a significant improvement in its surplus,
rising from a deficit of GH¢6,438 in 2007 to GH¢481,920 in 2008.
Financial position
1141. Table 126 shows the financial position of the Secretariat as at
31 December 2008
Current Assets
Total Assets
Net Asset
240
2008
GH¢
1,005,579
1,005,579
1,005,579
2007
GH¢
523,658
523,658
523,658
%
Change
92
92.0
92.0
1142. Current Assets comprised advances and cash & bank balances.
This increased by 92.0% from GH¢523,658 in 2007 to GH¢1,005,579
in 2008 due to a 349.0% increase in Advances. The Secretariat had no
outstanding liabilities to meet.
1143. Net Assets represented by Accumulated Fund increased by
92%. This was largely due to increase in surplus by 7,585.6% from a
deficit of GH¢6,438 in 2007 to GH¢481,920 in 2008.
MANAGEMENT ISSUES
Acknowledgement of funds with receipts
1144. Funds received from the main financiers of the project
DANIDA were not officially acknowledged on General Counterfoil
Receipt (GCR) together with other receipts from other sources.
1145. Consequently, confirmation of all funds receipts becomes
difficult without official receipts to the extent that their application is
not in line with the purposes for which they were provided.
1146. We recommended and management accepted that General
Counterfoil Receipts (GCRs) should be issued to all donors at all
times for easier accounting and auditing.
ACCRA METROPOLITAN ASSEMBLY (AMA)
SECOND URBAN ENVIRONMENTAL SANITATION
PROJECT (UESPII) IDA CREDIT NO.3889-GH, AFD CREDIT
NO-CGH6006 01J,
NDF CREDIT NO. 430 AND AMA FUNDS
Introduction
1147. This report is on the audited accounts of the Accra
Metropolitan Assembly, Second Urban Environmental Sanitation
Project (UESP II) for the year ended 31 December 2009.
241
Operational results
1148. Total Resources decreased by 40.5% from GH¢3,449,374 in
2008 to GH¢2,053,159 in 2009. The fall was due to a 56.1% and
72.2% reductions in Replenishments and Metropolitan Assembly‟s
Funding respectively.
1149. The project resources and expenditure summary is shown in
table 127:
Resources
Bank Balance
Replenishments
Metropolitan
Assembly‟s
Funding
Direct Payments
AFD
NDF
Interest Received
Total Resources
Expenditures
Civil Works
Goods
Consultancy Services & Others
Operating Cost-Others
Total Expenditure
Balance
2009
US$
547,673
1,320,028
50,000
2008
US$
110,974
3,008,462
180,000
%
Change
393.5
(56.1)
(72.2)
89,718
44,659
1081
2,053,159
66,927
77,984
5,027
3,449,374
(33.3)
(78.5)
(40.5)
1,679,137
3,887
185,447
126,287
1,994,758
58,401
2,337,552
25,214
371,980
166,955
2,901,701
547,673
(28.2)
(84.6)
(50.1)
(24.4)
(31.3)
(89.3)
1150. The year ended with a favourable balance of US$58,401 as
against US$547,673 recorded in 2008, representing a decrease of
US$489,272 or 89.3%.
1151. Total Project Cost also decreased by 31.3% from
US$2,901,701 in 2008 to US$1,994,758 in 2009, which was largely
due to decreases in expenses on goods and Consultancy Services and
Others.
242
Financial position
1152. The Project‟s financial position is provided in table 128.
Capital Expenditure
Current Assets
Current Liabilities
Non-Capital Expenditure
Net Assets
Current Ratio
Financed by:
IDA
Accra
Metropolitan
Assembly
AFD
NDF
2009
US$
4,375,406
40,226
160,045
1,662,741
5,936,503
0.3:1
2008
US$
2,528,477
654,785
36,464
1,298,611
4,445,409
18:1
%
Change
73.0
(93.9)
338.9
28.0
33.5
5,195,099
565,145
3,785,353
515,145
37.2
9.7
111,586
77,984
66,927
77,984
66.7
-
1153. Project Capital Expenditure went up by 73.0% from
US$2,528,477 in 2008 to US$4,375,406 in 2009. This was mainly due
to capital expenditure in relation to civil works.
1154. Current Assets dropped sharply by 93.9% from US$654,785 in
2008 to US$40226 in 2009. This was as a result of decrease in Bank
Balance.
1155. Current Liabilities on the other hand increased sharply by
338.9%. The increases were due to 171.7% and 1,279.2% rise in
amount due to Contractors and Withholding Tax & VAT & NHIL
respectively.
1156. An unfavorable liquidity position was registered at the close of
the year as indicated by a current ratio of 0.3:1 (2008:18:1). This
showed the inability of the Project to meet its short-term financial
obligations as and when they fall due.
243
KUMASI METROPOLITAN ASSEMBLY (KMA)
PROJECT (UESPII)
IDA CREDIT NO.3889-GH, AFD CREDITS NO. CGH600601J
NDF CREDIT NO.430 AND KMA FUNDS
Introduction
1157. This report is on the audited accounts of the Kumasi
Metropolitan Assembly of the Second Urban Environmental
Sanitation Project (UESP II) for the year ended 31st December 2009.
Operational results
1158. Total Resources rose from US$2,596,608 in 2008 to
US$3,037,470 in 2009 an increase of 17.0%, due to an increases in
IDA and AFD Funds. Total Expenditure went up from US$2,524,982
in 2008 to US$2,967,249 in 2009, an increase of 17.5% as a result of
rises in Civil Works and Operating Cost. Bank Balances as at 31
December were US$70,221 in 2009 as against US$71,626 in 2008, a
fall 2.0%.
1159. The performance indicators are summarised in table 129
Table 129: Resources and expenditure for 2009
Resources
Expenditures
Bank Balances-31 December
2009
US$
3,037,470
2,967,249
70,221
2008
US$
2,596,608
2,524,982
71,626
%
Change
17.0
17.5
(2.0)
Financial position
1160. Presented in table 130 is the balance sheet position as at 31
December 2009.
244
Capital Expenditure
Current Assets
Current Liabilities
Net Current Assets
Net Assets
2009
US$
5,267,423
115,468
86,771
28,697
1,498,922
6,795,042
2008
US$
2,756,208
204,564
196,296
8,268
1,079,365
3,843,841
%
Change
91.1
(43.6)
(55.8)
247.1
38.9
76.8
1161. Total Capital Expenditure increased from US$2,756,208 in
2008 to US$5,267,423in 2009, an increase of 91.1% due to a rise in
IDA Civil Works which alone accounted for 97.8% of Total Capital
Expenditure.
1162. Current Assets declined from US$204,564 in 2008 to
US$115,468 in 2009, a decreased of 43.6% as a result of reduction in
Pre-Finances and Bank Balances.
1163. Current Liabilities dropped from US$196,296 in 2008 to
US$86,771 in 2009, a decrease of 55.8%. The significant reduction
was because of a drop in Pre-Finances and Creditors.
1164. Non-Capital Expenditure increased from US$1,079.365 in
2008 to US$1,498,922 in 2009, an increase of 38.9%. This was
attributed to increase in cost of Consultants‟ Services, Studies and
Training.
1165. Net Assets increased by 76.8% from US$3,843,841 in 2008 to
US$6,795,042 in 2009.
1166. The Project‟s liquidity outlook as measured by a current ratio
of 1.3:1 (2008: 1:1) remained unfavourable, thus depicting its inability
to meet short term obligations falling due.
245
TEMA METROPOLITAN ASSEMBLY (TMA)
PROJECT (UESPII) IDA CREDIT NO. 3889-GH, NDF CREDIT
NO 430 AND TMA FUNDS
Introduction
1167. This report relates to the audited accounts of Tema
Metropolitan Assembly, Second Urban Environmental Sanitation
Project (UESP II) for the year ended 31 December 2008.
Operational results
1168. Details of the performance indicators are provided in the table
131.
Resources
Bank Balalnce as at 1Jan.
Replenishment
TMA Funding
NDF Funding
Other Income
Total Resources
Expenditure
Civil Work
Good
Consultants‟ Services
Studies & Training
Operating Costs
Total Expenditure
Bank Balance as at 31 Dec.
2008
US$
31,658
739,158
70,063
30,276
871,155
2007
US$
23,897
167,710
39,662
3,913
235.182
%
Change
32.5
340.7
76.7
270.4
528,050
9,681
55,315
(82.5)
63,108
88,024
688,863
182,292
100,526
47,683
203,524
31,658
(37.2)
84.6
238.5
475.8
1169. Total Resources increased by 270.4% from US$235,182 in
2007 to US$871,155 in 2008. This was mainly due to a 340.7%
increase in Replenishment of US$739,158 from International
Development Association (IDA). There was also a 76.7% increase in
TMA Funding from US$39,662 in 2007 to US$70,063 in 2008.
Nordic Development Fund also contributed US$30,276 to resources in
2008.
246
1170. Total Expenditure for the period increased by 238.5%. This
was mainly due to a US$528,050 expenditure on Civil Works and an
84.6% increase in Operating Cost from US$47,683 in 2007 to
US$88,024 in 2008.
Financial position
1171. The financial position of the Project is provided in table 131.
Assets
Capital Expenditure:
Civil Works
Goods
Total Assets
Current Assets
Current Liabilities
Net Current Assets
Non-Current Expenditure
Net Assets
Current Ratio
2008
US$
762,813
83,681
846,494
182,292
330,080
(147,788)
603,784
1,302,490
0.6:1
2007
US$
74,000
31,658
12,338
19,320
369,673
462,993
2.6:1
%
Change
1,043.9
475.8
2,575.3
(864.9)
63.3
181.3
1172. Capital Expenditure for the period under review was
US$846,494, representing a 1,043.9% increase over that of 2007
expenditure of US$74,000.
to US$182,292 in 2008. An inflow of US$150,634 in the year
accounted for the increase.
1174. Current Liabilities also increased by 2,575.3% from US$12,338
in 2007 to US$330,080 in 2008. This was due to credits falling due
within the year. This increase in Current Liabilities resulted in an
864.9% drop in Net Current Assets.
1175. Non-Capital Expenditure increased by 63.3% from
US$369,673 in 2007 to US$603,784 in 2008. This was made up of
Consultants‟ Services, Studies and Training and Operating Costs.
247
1176. The Project recorded a current ratio of 0.6:1 (2.6:1 in 2007)
showing a weak liquidity position.
1177. Net Assets grew by 181.3% from US$462,993 in 2007 to
US$1,302,490 in 2008.
MANAGEMENT ISSUES
No contract register maintained
1178. During the audit, we noted that there was no contract register
maintained for the project to record all contracts awarded.
1179. The absence of the register would not facilitate an effective
control over contracts .
1180. We recommended that a contract register be maintained to
record all contracts under the project showing details of contracts
including cumulative payments and any outstanding balances.
TAMALE METROPOLITAN ASSEMBLY (TAMA)
– SECOND URBAN ENVIRONMENTALSANITATION
PROJECT (UESPII)
IDA CREDIT NO. 3889-GH, NDF CREDIT NO. 430 AND
TAMALE METROPOLITAN ASSEMBLY FUNDS
Introduction
1181. This report covers the audited accounts of the Second Urban
Environmental Sanitation Project (UESP II) of Tamale Metropolitan
Assembly (TAMA) for the year ended 31 December 2008.
Operational results
1182. A summary of the Project‟s resources and expenditure for the
review period is shown in table 133.
248
Income
Bank Balances at 1 January
IDA Funding
BNF Funding
TAMA
NDF Funding
Other Income
Interest Income
Exchange Gain
Total Income
Expenditure
Civil Works
Consultants‟ Services, Studies &
Training
Operating Cost – Others
Exchange Loss
Total Expenditure
2008
US$
45,969
1,965,580
4,153
213
1,448
2,234,167
2007
US$
19,550
1,813,602
140,250
31,250
5,000
118
2,009,770
%
Change
135.1
8.4
(100.0)
(86.7)
(100.0)
80.5
11.2
1,750,262
319,527
1,841,843
84,959
(5.0)
276.1
127,234
2,197,023
36,816
126
1,963,744
245.6
(100.0)
11.9
216,804
-
1183. Total Income increased by 11.2% from US$2,009,770 in 2007
to US$2,234,167 in 2008. This was due to a 135.1% increase in Bank
Balances at 1 January from US$19,550 in 2007 to US$45,969 in 2008.
1184. Total Expenditure also went up by 11.9% from US$1,963,744
in 2007 to US$2,197,023 in 2008 as a result of increases in
Consultants‟ Services, Studies and Training and Other Operating
Costs.
1185. Bank Balances as at 31 December dropped by 19.3% from
US$46,026 in 2007 to US$37,144 in 2008.
Financial position
1186. Net Assets representing long-term solvency and stability of the
Project recorded 86.9% increment.
249
1187. The financial position of the Project is summarized in table
134.
Capital Expenditure
Current Assets
Current Liabilities
Net Assets
Current Ratio
2008
US$
3,721,733
130,889
116,120
732,501
4,469,003
1.1:1
2007
US$
1,971,471
50,201
26,550
395,803
2,390,925
1.9:1
%
Change
88.8
160.7
337.4
85.1
86.9
1188. Capital Expenditure, comprised expense on civil works and
goods. This increased significantly by 88.8% due to a 91.3% rise in
expenses incurred on Civil Works from US$1,916,050 in 2007 to
US$3,666,312 in 2008.
to US$130,889 in 2008. This significant increase was due to a
US$89,570 refund to IDA to be accounted for.
1190. Current Liabilities went up by 337.4% from US$26,550 in
2007 to US$116,120 in 2008 due to an amount of US$ 89570 due
NDF.
1191. Non-Capital Expenditure rose from US$395,803 in 2007 to
US$732,501 in 2008, an increase of 85.1%. The rise was due to
increases in Consultants‟ Services and Training.
1192. The drop in the Assembly‟s project liquidity position from
1.9:1 in 2007 to 1.1:1 in 2008 indicates the Project‟s inability to meet
its short-term obligations as and when they fall due.
250
EXPORT DEVELOPMENT AND INVESTMENT FUND (EDIF)
Introduction
1193. This report is on the audited accounts of Export Development
and Investment Fund (EDIF) for the year ended 31 December 2007.
Operational results
1194. Total Revenue increased from GH¢20,645,177 in 2006 to
GH¢28,811,095 in the year under review showing a rise of 39.6%.
The increase was due to the 0.5% rise in Levies and Other Revenues
collected for the period. The 0.5% levies represents CIF value of non
petroleum imports received during the year and lodged by CEPS into
Bank of Ghana Transit Account. The rise in other revenue resulted
from the increase in investment interest.
1195. There was a corresponding rise in total expenses of 8.1% from
GH¢3,679,386 in the previous year to GH¢3,978,197 in the current
year. Operational expenses which rose by 56.0% accounted for the
increase.
1196. Operations for the year ended with a surplus of GH¢24,832,898
as compared with GH¢16,965,791 in year 2006 representing an
increase of 46.4%.
1197. Table 135 shows the summary of performance components for
the review period.
Revenue
0.5% Levies
Other Revenue
Total Revenue
2007
2006
GH¢
GH¢
24,464,053 18,609,523
4,347,042 2,035,654
28,811,095 20,645,177
%
Change
31.5
113.5
39.6
251
Expenditure
Operational Expenses
Grant Expenses
Total Expenditure
Surplus / (Deficit)
1,115,008
714,627
2,863,189 2,964,759
3,978,197 3,679,386
24,832,898 16,965,791
56.0
(3.4)
8.1
46.4
Financial position
1198. Analysis of the Financial Position is presented in table 136.
2007
2006
GH¢
GH¢
Property, Plant & Equipment
176,088
156,365
Current Assets
Accounts Receivable
41,132,131 31,573,516
Cash & Cash Equivalents
54,049,684 38,886,797
Total Current Assets
95,181,815 70,460,313
Total Assets
95,357,903 70,616,678
Current Liabilities
Accounts
Payable
&
41,752
133,425
Accruals
Net Assets
95,316,151 70,483,253
%
Change
12.6
30.3
39.0
35.1
35.0
(68.7)
35.2
1199. Non-Current Assets increased to GH¢176,088 in 2007 from
GH¢156,365 in 2006. The increase of 12.6% was as a result of
additions to Property, Plant & Equipment.
1200. The Current Assets also showed a rise of 35.1% from
GH¢70,460,313 in 2006 to GH¢95,181,815 in the year under review.
Increases in Accounts Receivable and Cash & Cash Equivalents
accounted for the rise.
1201. Current Liabilities decreased by 68.7% from an amount of
GH¢133,425 registered in 2006 as against GH¢41,752 obtained in
2007. The reduction in the amount owed to Sundry Creditors at the
end of the year accounted for the difference.
252
1202. The Accumulated Fund increased by 35.2% to GH¢95,316,151
as against GH¢70,483,253 in 2006. This was due to a 46.4% rise in
operating surplus for the period.
1203. The liquidity position of the Fund as depicted by its current
ratio of 2,279.7:1 (2006: 528.1:1) though healthy implies that the
Fund had too much idle Cash & Bank Balances, which can be
invested in securities with promising returns.
MANAGEMENT ISSUES
Outstanding obligation to EDIF not refunded
1204. A former employee, Kwame Attakora Gyan now with the
Ministry of Communications, who had an outstanding obligation to
the Fund of US$7,500 and GH¢15,535.41 being training cost and
welfare/car loans respectively as at 31 December 2007, had not made
any repayment of the outstanding amount. This act may result in loss
of funds.
1205. We recommended that Management take the necessary steps to
ensure that staff signs bond before any commitments are made with
them. Meanwhile, Management is urged to contact Kwame Attakora
Gyan to pay the outstanding amount or resort to legal action to recover
the money.
Unsighted payment vouchers – GH¢3,145
1206. FAR 39(2c) requires that the head of the accounts section of a
department shall control the disbursement of funds and ensure that all
transactions are properly authenticated to show that amounts are due
and payable.
1207. However, we did not sight payment vouchers for payments to
the tune of GH¢3,145. There were also no supporting documents
available.
253
1208. The validity of these transactions is compromised in the
absence of supporting documentation.
1209. We recommended that payment vouchers be raised and
maintained for all expenditures with supporting documents attached.
Also, Management was urged to provide the payment vouchers for
audit.
Non-availability of rent agreement between EDIF and BROLL
Ghana Limited
1210. We noted during the audit that EDIF had paid an amount of
US$113,852 to Broll Ghana Limited who are the property managers
of its current office location. However, there was no agreement or
contract signed between the two parties.
1211. In case of any dispute, resolution will be difficult since no
terms and conditions are available between the two parties.
1212. We recommended and Management agreed that a contract
highlighting the terms and conditions will soon be drawn up and
signed by all parties to authenticate the agreement.
GHANA STANDARDS BOARD
Introduction
1213. This is a report on the audited accounts of the Ghana Standards
Board for the year ended 31 December 2007.
Operational results
1214. Total Income exceeded Total Expenditure by GH¢3,080,887,
recording an improvement of 121.3% over the previous year‟s surplus
of GH¢1,391,997.
1215. Performance details are shown in table 137:
254
Income
Recurrent Grant
Total Income
Expenditure
Service Expenses
Total Expenditure
Surplus / (Deficit)
2007
GH¢
2,343,452
5,674,048
8,017,500
2006
GH¢
2,518,134
2,746,877
5,265,011
%
Change
(6.9)
106.6
52.3
2,900,091
1,384,686
651,836
4,936,613
3,080,887
2,609,912
921,793
359,584
3,873,014
1,391,997
11.1
50.2
81.3
27.5
121.3
to GH¢8,017,500 in 2007. The increase was as a result of 106.6%
increase in Internally Generated Fund This resulted largely from
increases in receipt of testing fees, destination inspection, and
verification and calibration fees.
GH¢4,936,613 in 2007, an increase of 27.5%. The increase was due to
the 11.1% increase in Personnel Emoluments, 50.2% increase in
Administration Activity Expenses and 81.3% increase in Service
Activity Expenses. The rise in service activity expenses was due to
increases in material and consumables cost, consultancy fee and travel
& transport cost. The increases in utilities, office consumables &
cleaning and repairs & maintenance cost mainly accounted for the rise
in administration activity expenses.
Financial position
1218. Table 138 presents a summarised balance sheet as at 31
December 2007.
255
Item
Non-Current Assets
Current Assets
Current Liabilities
Net Current Assets
Net Assets
Current Ratio
2007
GH¢
4,151,843
6,782,329
301,413
6,480,916
10,632,759
22.5:1
2006
GH¢
3,357,411
4,419,347
228,520
4,190,827
7,548,238
19.3:1
%
Change
23.7
53.5
31.9
54.6
40.9
1219. The Non-Current Assets went up by 23.7% from
GH¢3,357,411 in 2006 to GH¢4,151,843 in 2007. This was due to the
acquisition of additional Property, Plant and Equipment and 56.7%
increase in Capital Work-In-Progress.
1220. Current Assets also increased by 53.5% from GH¢4,419,347 in
2006 to GH¢6,782,329 in 2007. The increase of 86.4% in Cash &
Bank Balances and 410.6% increase in Debtors Balances accounted
for the rise.
1221. Current Liabilities stood at GH¢228,520 in 2006 and
GH¢301,413 in 2007, an increase of 31.9%. The 58.8% increase in
outstanding payments on Statutory Liabilities resulted in the rise.
1222. The Current Ratio was 22.5:1 for 2007 (2006:19.3:1) and this
indicated a favourable position for the Board to meet its short-term
MANAGEMENT ISSUES
Cash on hand
1223. In accordance with FAR 48(1) a head of an organisation shall
ensure that cash holdings are kept to the absolute minimum, consistent
with the discharge of public financial business.
256
1224. We observed that, the cash books for the following accounts
had huge closing cash balances as indicated below:
i.
ii.
iii.
Account Number 1
Account Number 2
Account Number 3
GH¢21,131.78
GH¢26,410.10
GH¢84,635.44
1225. Maintaining huge cash balances could lead to misappropriation
and other mishap in this state of armed robbery.
1226. We recommended that Management ensure that cash is banked
daily and intact.
1227. Management accepted the recommendation.
GIHOC DISTILLERIES COMPANY LIMITED
Introduction
1228. This report relates to the audited accounts of the GIHOC
Distilleries Company Limited for the period 1 January 2008 to
31December 2009.
Operational results
1229. Total Income registered an increase of 69.91% from
GH¢3,188,515 in 2008 to GH¢5,417,656 in 2009. This was mainly
due to a 43.39% increase in Sales from GH¢12,905,002 in 2008 to
GH¢18,503,917 in 2009. Cost of Sales also increased by 34.3% from
GH¢9,809,142 in 2008 to GH¢13,177,778 in 2009. Shown in table
139 are the performance indicators.
Income
Sales
Cost of Sales
Gross Profit
Other Income
2009
2008
GH¢
GH¢
18,503,917 12,905,002
(13,177,778) (9,809,142)
5,326,139
3,095,860
91,517
92,655
%
Change
43.4
34.3
72.0
(1.2)
257
Total Income
Expenditure
Administrative, Selling,
Distribution &Staff Cost
Financial Charges
Total Expenditure
Net Profit before tax
Provision for taxation
Net Profit after tax
5,417,656
3,188,515
69.9
3,271,304
2,513,312
30.2
175,063
3,446,367
1,971,289
557,561
1,413,728
310,420
2,823,732
364,783
166,362
198,421
(43.6)
22.1
440.4
235.2
612.5
1230. Expenditure incurred in 2009 totalled GH¢3,446,367 as against
GH¢2,823,732 in 2008, representing an increase of 22.1%. Total
Expenditure which comprised mainly of Administrative, Selling,
Distribution and Staff Cost moved from GH¢2,513,312 in 2008 to
GH¢3,271,304 in 2009, representing a 30.2%.
1231. The increase in Administrative, Selling, Distribution and Staff
Cost was largely due to an increase of 70.7% in Administrative
Expenses from GH¢925,232 in 2008 to GH¢1,579,718. However,
Directors Remuneration showed a significant drop from GH¢96,520
in 2008 to GH¢7,599 in 2009, a decrease of 92.1%.
1232. A net profit of GH¢1,413,728 was recorded in 2009 compared
with GH¢198,421 in 2008, an increase of 612.5%.
Financial position
1233. Provided in table 140 is the financial position of the Company.
Table 140: Balance Sheet as at 31/12/2009
Non-Current Assets
Current Assets
Current Liabilities
Net Current Assets
Net Assets
258
2009
GH¢
2008
GH¢
5,541,141
4,396,853
507,561
1,428,545
2,968,308
8,001,888
5,649,191
3,468,831
473,479
1,806,383
1,662,448
6,838,160
%
Change
(1.9)
26.8
7.2
(20.9)
78.6
17.0
1234. The Company‟s Non-Current Assets decreased by 1.9% from
GH¢5,649,191 in 2008 to GH¢5,541,141 in 2009. The decrease was
due to depreciation on the assets.
1235. Current Assets of the Company recorded an increase of 26.8%
from GH¢3,468,831 in 2008 to GH¢4,396,853 in 2009. Increase in
Cash and Cash Equivalent by 150.3% from GH¢440,120 in 2008 to
GH¢1,101,724 in 2009 as well as in Inventories increasing by 42.2%
to GH¢2,847,089 in 2009 (2008: GH¢2,002,391) and a short-term
Investment of GH¢150,000 accounted for the increase.
1236. Current Liabilities decreased by 20.9% from GH¢1,806,383 in
2008 to GH¢1,428,545 in 2009. This was largely due to a 20%
decrease in Trade Payables from GH¢1,449,296 in 2008 to
GH¢1,158,994 in 2009, and the payment of the bank overdraft of
GH¢357,087.
1237. Liquidity outlook as measured by a current ratio of 3.1:1 (2008;
1.9:1) remained favorable, indicating the ability of the Company to
discharge its short term obligations as and when they fall due.
1238. Equity of the Company grew by 17.0% from GH¢6,838,160 in
2008 to GH¢8,001,888 in 2009 due to the rise in income surplus from
GH¢1,760,000 in 2008 to GH¢2,924,193 in 2009, an increase of
66.0%.
MANAGEMENT ISSUES
Alleged embezzled fund written off as Bad Debts – GH¢348,863
1239. We observed that the Board of Directors passed a resolution
dated 23 August, 2010 to write off the amount of GH¢610,851 from
the company‟s books. The amount comprised uncollectible debts from
customers and unaccountable balances from some regional depots
which dated back to 2006.
1240. Included in the total amount was GH¢348,863 in respect of the
alleged embezzlement of funds by some staff in year 2008 as
259
contained in a Special Investigation Report carried out by Messrs.
Delloite & Touche, (a firm of Chartered Accountants) a copy of which
was made available to us during the audit of the company‟s 2008
account. The defalcation case is being investigated by the police.
1241. We recommended that Management re-state the amount in the
books until the police investigation is completed and when the staff
are found culpable the law should take its course.
Payments to recognized Institutions/Bodies by cash
1242. We observed that the company, at times, made huge cash
payments to some recognized institutions/bodies during the year under
review in respect of provision of goods and services.
1243. Some of such payments are enumerated below:
Date
07/03/08
8/05/08
(GH) Ltd
PV No.
1007
Amount GH¢
11,675.91
5,800.00
Beneficiary
Net2 TV
Imexco
1244. According to management, suppliers were reluctant to accept
crossed cheques as there was no guarantee that the cheques could be
fully honoured by the banks, due to cash flow challenges of the
Company during those difficult periods.
1245. With this practice of huge cash payments, fraud could easily
occur between the cashier(s) or paying officers(s) and the payee(s).
1246. We recommended that Management set up a reasonable
threshold for cash payments to outsiders/service providers.
Total Sales not accounted for in the draft accounts
1247. We observed that valid system-generated VAT sales invoices
which amounted GH¢161,804.68 (including 15% VAT) filed with
other sales invoices were not included in the total sales figure as
disclosed in the draft accounts per the various ledgers.
260
1248. These system-generated VAT invoices had the entire approved
procedural authorisation for valid executed sales, yet no trace was
existing in the system indicating a possibility of deleting every trace
of the transaction in order to determine the embezzlement of the funds
accrued from those invoices.
1249. We demanded a justification for the anomaly and
recommended that all future sales be captured in the system and also
disclosed in the draft accounts to avoid loss of revenue.
GHANA INVESTMENT PROMOTION CENTRE
Introduction
1250. This report is on the audited accounts of Ghana Investment
Promotion Centre for the year ended 31 December 2009.
Operational results
1251. Total Income increased from GH¢3,726,680 in 2008 to
GH¢3,811,093 in 2009, representing an increase of 2.3%. This was
mainly due to an increase in fee income which rose by 99.5 % from
GH¢1,447,001 in 2008 to GH¢2,886,068 in 2009. The increases in fee
from work permit/short term visas and technology transfer mainly
accounted for the rise.
1252. Total Expenditure rose from by 67.0% from GH¢2,610,912 in
2008 to GH¢4,360,679 in 2009. This was due to General and
Administrative Expenses which increased from GH¢2,602,298 in
2008 to GH¢4,356,094 in 2009, representing an increase of 67.4%.
The increases mainly in salaries & other related cost, maintenance of
office premises and the payment of SSF and PAYE penalties
accounted for the rise in general administrative expenses.
1253. The Centre recorded a deficit of GH¢549,586 in 2009 as
against a surplus of GH¢1,115,768 in 2008.
261
1254. Table 141 shows the performance components for the review
period.
Income
Expenditure
Expenditure
2009
GH¢
3,811,093
4,360,679
(549,586)
2008
GH¢
3,726,680
2,610,912
1,115,768
%
Change
2.3
67.0
(149.3)
Financial position
1255. The balance sheet position of the Centre as at 31 December
2009 is shown in table 142.
Property, Plant &
Equipment
Investments
Current Assets
Current Liabilities
Net Current Assets
Net Assets
Current Ratio
2009
GH¢
721,135
2008
GH¢
760,033
%
Change
(5.1)
1,341,286
799,295
752,626
46,669
2,109,090
1.1:1
31,798
2,238,675
353,579
1,885,096
2,676,927
6.3:1
4,118.1
(64.3)
112.9
(97.5)
(21.2)
1256. Property, Plant and Equipment reduced from GH¢760,033 in
2008 to GH¢721,135 in 2009, a reduction of 5.1%.
1257. Investment in 2009 increased to GH¢1,341,286 as against
GH¢31,798 in 2008, an increase of 4,118.1%.
1258. Current Assets reduced from GH¢2,238,675 in 2008 to
GH¢799,295 in 2009, a reduction of 64.3%. This was attributed to a
reduction in Inventory and Cash and Bank Balances.
262
1259. Current Liabilities increased from GH¢353,579 in 2008 to
GH¢752,626, in 2009, an increase of 112.9% as a result of a rise in
Sundry Creditors.
1260. Current ratio of 1.1:1 (2008: 6.3:1) shows that the Centre
cannot meet its short-term financial obligations as and when they fall
due.
MANAGEMENT ISSUES
Debt recovery
1261. We observed that the name of Michael Ohene Marfo, a former
employee of the Centre who embezzled fourteen thousand Ghana
Cedis (GH¢14,000) was omitted from debtors list given to us.
Although the culprit has been traced and charged with the offence the
amount has not been recovered.
1262. We recommended that serious efforts be made to retrieve the
money.
1263. Management response was that the case is still pending before
the court. Management has written to the police for a status report and
are still waiting to hear from them.
Directors’ remuneration
1264. We noted from the payment vouchers that the Board Members
were paid remuneration without deducting withholding taxes.
Consequently, the state is being denied some revenue.
1265. We recommended that the Centre should ensure that all
withholding taxes are deducted and paid to the relevant authorities.
1266. Management stated currently all directors‟ remuneration are
paid net of taxes.
263
GHANA TRADE FAIR COMPANY LIMITED
Introduction
1267. This report relates to the audited accounts of the Ghana Trade
Fair Company Limited for the year ended 31 December 2009.
Operational results
to GH¢1,827,668 in 2009. Operating Income constituted 80.9% and
92.3% of Total Incomes of 2008 and 2009 respectively and its
increase accounted for the rise in total income. The rise in operating
income was caused by increases in entrance fees, rent payment, and
temporary hiring. Details of the performance operators are in table
143.
Income
Operating Income
Other Income
Total Income
Expenditure
Operating Expenses
Staff Expenses
Financial Charges
Repair & Maintenance
Total Expenditure
Profit Before Tax
Taxation
Tax Provision
Profit For The Year
2009
GH¢
1,687,536
140,132
1,827,668
2008
GH¢
1,213,488
286,215
1,499,703
%
Change
39.1
(51.0)
21.9
533,074
490,433
587,949
39,252
124,724
1,775,432
52,236
473,687
446,898
392,614
13,180
45,336
1,371,715
127,988
12.5
9.7
49.8
197.8
175.1
29.4
(59.2)
13,059
39,177
31,997
95,991
(59.2)
(59.2)
1269. Total Expenditure of the Company rose by 29.4% from
GH¢1,371,715 in 2008 to GH¢1,775,432 in 2009. A substantial
portion of the Company‟s expenses was in Staff Expenses which
registered GH¢587,949 as against GH¢ 392,614 incurred in 2008, an
increase of 49.8%. Significant expenses in 2009, which formed part
264
of total expenditure were End of Service Benefit (GH¢166,684), Staff
Welfare (GH¢4,305) and Professional and Consultancy Fees
(GH¢37,898). The 197.8% 175.1% rise in financial charges and
repairs and maintenance cost accounted for the increase in total
expenditure.
The Profit before Tax declined by 59.2% from
GH¢127,988 in 2008 to GH¢52,236 in 2009.
Financial position
is shown in table 144.
Fixed Assets
Current Assets
Current Liabilities
Net Assets
Current Ratio
2009
GH¢
2,557,123
1,386,976
2,454,189
1,489,910
0.6:1
2008
GH¢
2,758,827
1,015,501
2,345,762
1,428,566
0.4:1
%
Change
(7.3)
36.6
4.6
4.3
1271. The Fixed Assets stood at GH¢2,557,123 at the close of 2009
(2008: GH¢2,758,827), showing a decline of 7.3%.
1272. Current Assets rose by 36.6% to GH¢1,386,976 in 2009 (2008:
GH¢1,015,501). The increase was due to a 63.8% rise in Debtors &
Prepayment figure from GH¢615,333 in 2008 to GH¢1,008,057 in
2009.
1273. Current Liabilities increased by 4.6% from GH¢2,345,762 in
2008 to GH¢2,454,189 in 2009. The increase was due to a 12.5% rise
in the Trade Creditors and Accruals figures from GH¢2,033,810 in
2008 t0 GH¢2,287,738 in 2009.
1274. The liquidity position showed a current ratio of 0.6:1 (2008:
0.4:1) indicative of the Company‟s inability to discharge its short term
265
MANAGEMENT ISSUES
No competitive bidding for water treatment plant installation
1275. Contrary to the Public Procurement Act, 2003 (Act 663), a
contract for the installation of water treatment plant was awarded to
Unihydro Group (GH) Limited at a cost of GH¢96,494.25.
1276. We noted minutes of emergency meetings of the Board of
Directors held on Wednesday, 21 December 2005 and Works and
Services Committee held on Wednesday, 10 February 2006 to confirm
the contract. The contract sum was estimated by the Works and
Services Committee at Cedi equivalent of US$50,600.
1277. We further noted that GH¢50,000 was paid as the first
installment to Unihydro Group (GH) Limited.
1278. Examination of contract documents on file revealed that there
were no other alternative quotations presented for evaluation before
the award. No contract award letter was also produced. The payment
was also not acknowledged by the contractor. On the whole, the
contract lacked transparency.
1279. We requested Management to provide all necessary records and
reasons to support the payment.
1280. Management failed to respond.
GHANA EXPORT PROMOTION COUNCIL
Introduction
1281. This report covers the audited accounts of the Ghana Export
Promotion Council for the year ended 31 December 2009.
266
MANAGEMENT ISSUES
Non-lodgement of revenue collected - GH¢ 3,787.00
1282. Contrary to Regulations 15 and 18 of the Financial
Administration Regulations (FAR), 2004 LI 1802 only GH¢13,989.00
out of a total revenue collection of GH¢17,776.00 for way bills and
exporters registration/ renewal fees was lodged into the Council‟s
account.
1283. The lapse was occasioned by the absence of an effective system
to monitor revenue collection and lodgement. The omission could
facilitate the misuse of collections and thereby deny the Council funds
needed for its activities.
1284. We recommended that the outstanding amount of GH¢3,787.00
be lodged into the Council‟s account and the pay-in-slip submitted for
audit scrutiny. We also recommended that all revenue collected should
be banked in full within 24 hours in compliance with the financial
regulations stated above and regular revenue collection and lodgement
returns generated by the Accountant and reviewed by management.
1285. Management was yet to respond to this observation, with an
explanation that the responsible officer is currently on retirement.
Inadequacies in the maintenance of vehicle log books
1286. A review of the log books of four out of the Council‟s five
pooled vehicles revealed that no particulars of receipt of fuel, oil and
lubricants totalling GH¢6,950.56 were entered in the respective log
books by the drivers. As a result, monthly fuel consumption rate were
not computed in breach of Chapters 1604 and 1605 of the Stores
Regulations 1984.
1287. The anomaly arose due to inadequate supervision from the head
of the transport section. We could therefore not ascertain the
efficiency in the use of fuel, oil and lubricants allocated to vehicles.
267
1288. We recommended that the officer in-charge of transport should
step up supervision and ensure compliance with the aforementioned
stores regulations. We also recommended that the drivers account for
the GH¢6,950.56 worth of fuel or be made to refund the amount into
the Council‟s account.
Failure to prepare financial statements
1289. Section 41 (1a) of the FAA, 2003 states that within a period of
three months after the end of each financial year, there shall be
prepared by the head of each department and transmitted to the
Auditor-General among other stakeholders in respect of the financial
year, accounts of the department.
1290. Contrary to the above stated requirement, the financial
statements for 2009 had not been finalised for our review as at the end
of our audit in November 2010, 11 months after the end of the 2009
financial year. We could therefore not report on the current status of
the accounts to provide accountability assurance to stakeholders. The
late preparation of the accounts could also compromise the quality of
management information that is needed to assist in decision-making.
1291. Management attributed the lapse to persistent break down of
the Council‟s main server and absence of a backup.
1292. We recommended that management take appropriate steps to
address the situation and act in accordance with the above stated
regulation.
1293. Management stated that efforts were being made to rectify the
anomaly and forestall recurrence.
MINISTRY OF COMMUNICATIONS
NATIONAL COMMUNICATIONS AUTHORITY
Introduction
1294. This report relates to the audited accounts of National
Communication Authority for the year ended 31 December 2008.
268
Operational results
1295. Shown in table 145 are the performance indicators.
Item
2008
GH¢
18,376,961
& 14,681,520
Income
Operating,
General
Operating Profit / (Loss)`
Other Income
Bad & Doubtful Debt
Net Profit / (Loss) before
Taxation
Taxation
Net Profit after Tax
2007
GH¢
4,303,097
5,133,441
%
Change
327.1
186.0
3,695,441
(830,344)
2,860,191
614,597
6,087,376
6,555,632 (6,303,123)
(545.0)
365.4
204.0
1,629,548
4,926,084 (6,303,123)
(178.2)
1296. The Authority made a Net Profit before Tax of GH¢6,555,632
in 2008 as against a Net Loss before Tax of GH¢6,303,123 in 2007.
This represented an improvement of 204.0%. The Authority recorded
a revenue of GH¢18,376,961 in 2008 against GH¢4,303,097 in 2007,
an increase of 327.1%. The significant increase of 327.1% in revenue
was mainly due to the introduction of new income generating sources,
i.e. numbering plan and microwave ink in addition to the regular
income sources.
1297. Operating, General and Administrative Expenses increased
from GH¢5,133,441 in 2007 to GH¢14,681,520 in 2008. This
represented an increase of 186.0%. The increase in Operating and
Administrative Expenses was mainly attributed to 40.2% increase in
Salaries and Related Cost, 174.5% in Overseas Travels and
Conferences, 138.7% in General Expenses, 211.4% in Monitoring
Operations, 3,429.7% In Institutional Support, 1,132.2% In Capacity
Development and Support and 98.7% in Contribution of International
Bodies.
269
Financial position
1298. A summarised balance sheet of the Authority is presented in
table 146.
Item
2008
2007
GH¢
GH¢
Fixed Assets
2,903,862
1,975,616
Current Assets
129,256,585 16,333,897
Current Liabilities
104,481,719
5,576,869
Net Current Assets
24,774,866 10,757,028
Net Assets
27,678,728 12,732,644
Current Ratio
1.2:1
2.9:1
%
Change
47.0
691.3
1,773.5
130.3
117.4
1299. Fixed Assets increased by 47.0% from GH¢1,975,616 in 2007
to GH¢2,903,862 in 2008. The increase was due to additions of
Property, Plant and Equipment.
1300. Current Assets stood at GH¢129,256,585 in 2008 compared to
GH¢16,333,897 in 2007, an increase of 691.3%. The increase was due
to the 644.3% increase in Sundry Debtors, increase of 1996.4% in
Bank and Cash Balances and 697% increase in Short-Term
Investments. The increase in Investments and cash and bank balance
was attributable to the enhanced cash flow position from operational
activities during the year under review.
1301. Current liabilities witnessed a significant rise of 1,777.3% from
GH¢5,576,869 in 2007 to GH¢104,481,719 in 2008. The walloped
increase in sundry creditors and rises in accruals and outstanding tax
amounts accounted for the rise.
1302. The Current Ratio fell from 2.9:1 in 2007 to 1.2:1 in 2008.
Consequently, the Authority would be unable to meet its short-term
obligations falling due.
270
MANAGEMENT ISSUES
Insurance cover for buildings
1303. We noted that, in spite of the huge expenditure incurred in
refurbishing the office building and premises, no insurance cover is in
place against fire or any other peril.
1304. We attributed the anomaly to oversight on the part of
management to take an insurance cover on the Office building and
premises.
1305. In the event of an unforeseen disaster, the financial burden on
the Authority could compromise its ability to continue in existence.
1306. We recommended that, as a matter of urgency, steps be taken to
have the office building insured to ensure its safeguard and security.
1307. Management accepted the recommendation and responded that
administration is currently organising the appropriate concern to
insure the buildings.
MINISTRY OF COMMUNICATIONS
E-GHANA PROJECT-IDA CREDIT 4226 – GH
Introduction
1308. This report is on the audited accounts of Ministry of
Communications, e-Ghana Project – IDA CREDIT 4226 – GH for the
period ended 31 December 2008.
Operational results
1309. The Project‟s Resources increased by 17.5% from
US$2,053,595 in 2007 to US$2,412,564 in 2008. This was largely
due to an opening Bank Balance of US$90,646 and IDA Special
Account Balance of US$995,000 as against US$287,996 recorded in
2007. The performance indicators are shown in table 147
271
Table 147: Project sources and uses of finance for 2008
Resources
Expenditure
Balance
2008
US$
2,412,564
2,108,550
304,014
2007
US$
2,053,595
967,949
1,085,646
%
Change
17.5
117.8
(72)
1310. The Project‟s Expenditure also increased significantly by
117.8% from US$967,949 in 2007 to US$2,108,550 in 2008.
1311. The increase in the Project‟s Cost as a result witnessed total
reduction in the year- end balance by 72% from US$1,085,646 in
2007 to US$304,014 in 2008.
Financial position
1312. Current Assets for the period under review dropped by 72.7%
from US$1,113,905 in 2007 to US$304,014 in 2008. The sharp
reduction in the Project Bank and Cash Accounts balances from
US$1,085,646 in 2007 to US$304,014 in 2008, largely accounted for
the overall decline.
1313. Current Liabilities registered a nil balance as against
US$28,259 recorded in 2007.
1314. Non Capital Expenditure for the period under review was
US$2,895,846 in 2008 from US$931,919 in 2007, a rise of 210.7%.
1315. Fixed Assets, which formed part of Cumulative Project
Expenditures, increased by 44.5% from US$325,006 in 2007 to
US$469,630 in 2008.
1316. The Project‟s financial position is shown in table 148:
272
Table 148: Project’s financial position as at 31 December 2008
Fixed Assets
Current Assets
Current Liabilities
Non Capital Expenditure
Net Asset
Financed by
Lon Term Loan – IDA
Interest on IDA Credit Fund
GOG Counterpart Fund
2008
US$
469,630
304,014
2,895,846
3,669,490
2007
US$
325,006
1,113,905
28,259
931,919
2,342,571
%
Change
44.5
(72.7)
210.7
56.6
3,112,623
30,969
525,898
2,098,834
10,030
233,707
48.3
208.8
125.0
GRAPHIC PACKAGING LIMITED
Introduction
1317. This report relates to the audited accounts of the Graphic
Packaging Limited for the financial year ended 31 December 2008.
Operational results
1318. Graphic Packaging Limited recorded a revenue of
GH¢1,012,424 in 2008 as against GH¢1,311,315 in 2007, representing
a 22.8% decrease. This was mainly due to a reduction in commercial
printing. The performance indicators are detailed in table 149:
Table 149: Income Statement for 2008
Item
2008
GH¢
Turnover
1,012,424
Operating Expenses
1,290,012
Operating Loss
(277,588)
Other Income / (Loss)
269,635
Profit / (Loss)
(7,953)
2007
GH¢
1,311,315
1,441,797
(130,482)
(301,146)
(431,628)
%
Change
(22.8)
(10.5)
112.7
(189.5)
(98.2)
273
1319. Operating Expenses decreased from GH¢1,441,797 to
GH¢1,290,012 over the period. This represented a 10.5% reduction
over the period and was due to a drop in Selling and Administrative
Expenses.
1320. Graphic Packaging Limited made a net loss of GH¢7,953
compared with a net loss of GH¢431,628 in 2007, a 98.2% reduction
in the loss.
Financial position
1321. The Balance sheet position is shown in table 150
Item
2008
2007
%
GH¢
GH¢
Change
Fixed Assets
821,859
865,900
(5.1)
Current Assets
1,083,933
1,048,818
3.3
Current Liabilities
910,207
643,175
41.5
Net Current Assets
173,726
405,643
(57.2)
Long-Term Liabilities
3,191,347
3,459,352
(7.7)
Net Assets
(2,195,762) (2,187,809)
0.4
1322. The Company‟s Fixed Assets decreased by 5.1% from
GH¢865,900 in 2007 to GH¢821,859 in 2008. This was as a result of
depreciation.
1323. The Current Assets improved marginally by 3.3% over the
2007 figure of GH¢1,048,818 to GH¢1,083,933 in 2008. This was due
to increases in Sundry Debtors, over paid taxes and Bank and Cash
Balances.
1324. Current Liabilities also increased from GH¢643,175 in 2007 to
GH¢910,207 in 2008, representing a rise of 41.5%. This was due to
significant increases in Trade Creditors, Bank Overdraft and InterCompany Accounts.
274
1325. The Current Ratio of the Company dropped from 1.6:1 in 2007
to 1.2:1 in 2008 indicating that its liquidity position was unhealthy and
would be unable to meet its short-term obligations as and when they
fall due.
MANAGEMENT ISSUES
Business promotion
1326. We noted during the audit that GH¢38,764 was incurred on
business promotion to win more printing contracts and to establish
strong business and marketing relations. During the course of 2007
GH¢8,635 was spent on business promotion which brought in an
income of GH¢1,311,315 whilst GH¢38,764, an increase of 349%
over 2007 generated GH¢1,012,424 a reduction of 23% against the
previous year.
1327. Considering the cash flow position and the gross profit margin
on the turnover, it is not worthwhile for a Company like packaging to
be injecting so much money into business promotion thereby
worsening their loss position.
1328. We recommended that G-Pak should reduce the expenditure on
business promotion and focus on other methods of generating income.
1329. Management responded that the world economic crises have
affected most businesses globally which equally affected G-Pak
greatly. Management made the decision to increase business
promotion cost to reduce an apparent very poor sales anticipated.
Management believed that but for the promotional plan developed,
turnover could have been unacceptable. Furthermore, in 2007 G-Pak
had in its payroll marketing staff numbering three including a
manager, costing the company an amount of GH¢27,850.50 annually.
The redundancy exercise reduced staff cost on marketing to
GH¢3,450. However, other direct marketing cost had to be increased
to maintain their clientele and at the same time prospect new clients.
275
1330. Management added that it had however taken measures to
reduce business promotion cost by encouraging cost effective
promotion programmes.
GHANA PUBLISHING COMPANY LTD
Introduction
1331. This report covers the audited accounts of the Ghana
Publishing Company limited for the year ended 31 December 2008.
Operational results
1332. The performance indicators are shown in table 151:
Income
Turnover
Other Income
Total Income
Expenditure
Operating Cost
Personnel Cost
Financial Charges
General & Adm. Expenses
Total Expenditure
Net Profit
2008
GH¢
1,623,040
59,137
1,682,177
2007
GH¢
1,433,489
14,293
1,447,782
%
Change
13.2
313.7
16.2
1,006,367
405,000
15,810
243,487
1,670,664
11,513
914,240
306,352
16,957
207,745
1,445,294
2,488
10.1
32.2
(6.8)
17.2
15.6
362.7
GH¢1,682,177 in 2008. This was due to a rise in turnover and largely
in other income. The rise in other income was due to the writing back
of provisions no longer required and an increase in rent income.
GH¢1,445,294 in 2007 to GH¢1,670,664 in 2008 as a result of
increases in Personnel Cost and General and Administrative Expenses.
Large increases in electricity and water cost and business relation
expenses accounted for the upward movement in general &
administrative expenses.
276
1335. The year ended with a net profit of GH¢11,513 compared to
GH¢2,488 in 2007, representing an increase of 362.7%.
Financial position
1336. Presented in table 152 is a summarised balance sheet as at 31
December 2008
Non-Current Assets
Current Assets
Current Liabilities
Net Current Assets
Divisional Surplus
Net Assets
Current Ratio
2008 (GH¢) 2007 (GH¢)
177,900
159,701
667,932
569,164
1,082,503
977,049
(414,571)
(407,885)
521,116
521,116
284,445
272,932
0.6:1
0.6:1
% Change
11.4
17.4
10.8
1.6
4.2
1337. Non-Current Assets increased marginally by 11.4% from
GH¢159,701 in 2007 to GH¢177,900 in 2008 as a result of
acquisitions made during the period under review.
1338. Current Assets also increased by 17.4% from GH¢569,164 in
2007 to GH¢667,932 in 2008 due to increases in Inventories and
Accounts Receivable. The significant rise in trade debtors largely
contributed to the increases in accounts receivable.
1339. Current Liabilities showed an upward movement of from
GH¢977,049 in 2007 to GH¢1,082,503 in 2008, representing a 10.8%
increase as a result of an increase in Accounts Payable and Accrued
expenses.
1340. The Net Assets rose marginally by 4.2%.
1341. The current ratio of 0:6:1(2007:0.6:1) remained unfavorable as
it indicates that the Company cannot meet its short term commitments
when they fall due.
277
NEW TIMES CORPORATION
Introduction
1342. This report relates to audited accounts of New Times
Corporation for the year ended 31 December 2009.
Operational results
1343. An analysis of significant movement in the income statement of
the current year compared with those of the previous year is shown in
table 153.
Income
Revenue/Turnover
Cost of Production
Other Income
Total Income
Expenditure
General, Administrative &
Selling Expenses
Provision for Tax
Total Expenditure
Surplus/(Loss)
2009
GH¢
6,292,942
(4,745,232)
48,742
1,596,452
2008
GH¢
5,271,580
(3,164,422)
45,648
2,152,806
%
Change
19.4
50.0
6.8
(25.8)
2,094,853
1,384,797
51.3
2,000
2,096,853
(500,401)
200,431
1,585,228
567,578
(99.0)
32.3
(188.2)
1344. The operations of the Corporation for the year 2009 showed a
decline position in performance over the previous year 2008.
1345. Total Income declined by 25.8% from GH¢2,152,806 in 2008
to GH¢1,596,452 in 2009. This resulted from a 50.0% rise in the Cost
of Production from GH¢3,164,422 in 2008 to GH¢4,745,232 in 2009.
1346. Total Expenditure rose by 32.3% from GH¢1,585,228 to
GH¢2,096,853 in 2009. This rise was attributable to a 51.3% increase
in General, Administrative and Selling Expenses over the period under
review. Increases in personnel cost and finance charges mainly caused
the rise in general administration & selling expenses.
278
1347. The Corporation‟s operational activities ended with a net loss
of GH¢500,401 as against a net profit of GH¢567,578 recorded in
2008 indicating a 188.2% drop.
Financial position
1348. The financial position of the corporation as at 31 December
2009 is summarized in table 154.
Property, Plant & Equipment
Asset/Depreciation Fund
Investment
Current Assets
Current Liabilities
Net Current
(Liabilities)/Assets
Net Assets
Current Ratio
2009
GH¢
2,311,884
259
499
2,750,282
3,149,512
(399,230)
2008
GH¢
2,127,974
259
499
3,760,200
3,462,097
298,103
%
Change
8.6
(26.9)
(9.0)
(233.9)
1,913,412
0.9:1
2,426,835
1.1:1
(21.2)
Property, Plant, and Equipment stood at GH¢2,311,884 in 2009 (2008:
GH¢2,127,974), an increase of 8.6% due to additions within the year.
1349. Current Assets showed a decrease of 26.9% from
GH¢3,760,200 in 2008 to GH¢2,750,282 in 2009. The decrease was
mainly due to a reduction in Stocks.
1350. Current Liabilities also reduced by 9.0% from GH¢3,462,097
in 2008 to GH¢3,149,512 in 2009. This resulted from partly payment
of short-term loans, trade creditors and outstanding taxation.
1351. The Corporation‟s liquidity situation needs critical attention as
the current ratio of 0.9:1 (2008:1.1:1) remained unhealthy.
279
MANAGEMENT ISSUES
Debtor balances
1352. Apart from car loans and staff imprest accounts, the
corporation has no authentic lists covering other debtors. The names,
addresses of the debtors, the specific transactions and the dates of the
transactions resulting in the debts were all not available.
1353. As a result, ageing analysis of the debts is not possible. The
Corporation might not be able to retrieve its debts and the debtors
figure in the financial statement might not be reliable.
1354. We recommended that management take immediate steps to
acquire a new software to rectify these anomalies.
Imposition of Penalty by SSNIT -GH¢98,784.59
1355. On 1 September 2009, SSNIT imposed a penalty of
GH¢98,784.59 on the Corporation as a result of non-payment of
SSNIT contributions. SSNIT agreed to spread the payment of the
penalty over a period of nine months. However, the Corporation did
not reflect the full amount of the penalty in its accounts for the year
ending 31 December 2009 but decided to charge its income statement
with only the portion paid in the year. An amount of GH¢33,000 was
paid leaving a balance of GH¢65,784.59 unpaid as at the end of the
year.
1356. The system employed by the Corporation violates the accruals
concept of accounting. There exist the possibilities of SSNIT
imposing further penalties in 2010 as the Corporation is unable to pay
its current SSNIT deduction.
1357. We recommended that the whole amount be charged against
the income statement of 2009, the period in which the agreement was
reached and advised management to comply with relevant provisions
of the SSNIT law to avoid penalties.
280
Value Added Tax on Purchases - GH¢71,327.20
1358. We observed that the Corporation purchased various items
worth GH¢71,327.20 without any indication that these payments were
covered by VAT invoices.
1359. Consequently the required tax revenue accruing to the state was
lost.
1360. We recommended that as much as possible all purchases must
be done with VAT registered traders in line with Government policy.
GRAPHIC COMMUNICATIONS GROUP LIMITED
Introduction
1361. This report covers the audited accounts of Graphic
Communications Group (GCG) Limited for the year ended 31
December 2008.
Operational results
1362. Turnover of the Group increased from GH¢20,530,478 in 2007
to GH¢25,008,592 in 2008. The rise of 21.8% was as a result of
increases in the Sales of Newspapers and Advertising.
1363. Cost of Sales also increased by 31.0% due to rises in Newsprint
Consumption, Ink and Chemicals and Photographic Materials.
1364. Total Expenditure for the year increased by 20.5% from
GH¢9,191,371 in the previous year to GH¢11,074,758 in the year
under review. The increase was due to 17.2% increase in Distribution
Expenses, 14.8% increase in Administration and General Expenses
and 200.9% increase in Finance Charges. The significant increase in
finance charges occurred as a result of upward movements in bank
charges and interest on overdraft as well as an interest accrued on
Press Project.
1365. The Graphic Communication Group Limited registered a net
profit after tax of GH¢2,456,396 (2007: GH¢2,473,787), representing
a drop of 0.7%.
281
1366. Table 155 presents a summary of the operational results for the
year under review.
Revenue
Turnover
Cost of Sales
Gross Profit
Other Income
Total Revenue
Expenditure
Distribution Expenses
Expenses
Finance Charges
Total Expenditure
Profit before Tax
Taxation
Net Profit
2008
GH¢
25,008,592
(10,731,468)
14,277,124
399,546
14,676,670
2007
GH¢
20,530,478
(8,192,020)
12,338,458
338,599
12,677,057
%
Change
21.8
31.0
15.7
18.0
15.8
3,194,505
7,137,058
2,724,836
6,219,534
17.2
14.8
743,195
11,074,758
3,601,912
1,145,515
2,456,396
247,001
9,191,371
3,485,686
1,011,899
2,473,787
200.9
20.5
3.3
13.2
(0.7)
Financial Position
1367. Shown in table 156 is the financial position of the Group for
the year under review:
2008
GH¢
Fixed Assets
Investments
Press Machine-In-Progress
Current Assets
Current Liabilities
Net Current Assets
Long Term Liabilities
Net Assets
Current Ratio
282
8,980,529
594,555
8,194,195
8,386,177
3,686,026
4,700,151
7,511,543
14,957,887
2.3:1
2007
GH¢
8,730,570
594,555
1,622,527
5,684,544
3,506,262
2,178,282
37,255
13,088,679
1.6:1
%
Change
2.9
405.0
47.5
5.1
115.8
20,062.5
14.3
1368. Fixed Assets for the year increased by 2.9%, that is from
as a result of additional assets acquired during the year.
1369. Press Machine-In-Progress also increased by 405.0% from
GH¢1,622,527 in the previous year to GH¢8,194,195 in 2008. The
increase was due to an additional amount deposited for the
construction of a Press Machine and its accessories.
1370. Current Assets also increased by 47.5% from GH¢5,684,544 in
2007 to GH¢8,386,177 in 2008. The rise was due to increases in
Trade Debtors, Bank and Cash Balances and Loan due from Graphic
Packaging Limited.
1371. The Current Liabilities of the Group increased marginally by
5.1%, from GH¢3,506,262 in the previous year to GH¢3,686,026 in
the year under review. The increase was mainly due to a rise in bank
loan and newspaper deposits. News paper deposits represent deposit
maintained by the Company as a cover for all newspaper vendors for
supplies of newspaper.
1372. The Current ratio for the period under review was 2.3:1
compared to 1.6:1 in the previous year. This improvement in the
current ratio shows that the Company can meet its short-term financial
MANAGEMENT ISSUES
Inter-Company Accounts
1373. During our audit, we observed that the inter-company balance
between Graphic Communications Group and G-PAK has increased
by 36% over the 2007 inter-company balance.
1374. In the course of the year additional loan of GH¢287,893 was
granted out of which only GH¢92,704 was repaid. Electricity
amounted to GH¢74,123, rent amounted to GH¢60,000 whiles raw
materials issued to G-PAK amounted to GH¢86,125.
283
1375. Efforts made by Graphic Packaging Limited to pay back the
loans are not encouraging at all thereby worsening the cash flow
situation of Graphic Communications Group.
1376. We recommended that Graphic Communications Group put on
hold further cash inflow to Graphic Packaging Limited until the
financial situation of Graphic Communications Group becomes
favorable.
1377. Management responded that it has decided that from July, GPAK would be responsible for the payment of its utility bills and all
raw materials issued to G-PAK would be paid monthly by G-PAK to
Graphic Communications Group Limited
GHANA NEWS AGENCY
Introduction
1378. This report covers the audited accounts of the Ghana News
Agency for the year ended 31 December 2009.
MANAGEMENT ISSUES
Non-implementation of previous audit report
1379. Section 30 of the Audit Service Act, 2000 (Act 584) requires
institutions audited by the Auditor-General to establish an Audit
Report Implementation Committee (ARIC) to see to the
implementation of recommendations made in audit and other
monitoring reports as well as directives of Parliament to address
weaknesses and irregularities in MDA‟s.
1380. We noted that while the Agency had an ARIC in place, when
we requested, minutes of its meetings could not be produced for our
examination. Consequently, recommendations made in the previous
audit report have not been implemented.
1381. We recommended and management accepted to ensure that the
ARIC performs its function as required by law.
284
High debtors balance – GH¢233,153.27
1382. In spite of recommendations made in our previous audit report
coupled with bad credit policies, we noted that out of an amount of
GH¢475,422.66 due from debtors in 2009, only GH¢242,269.39 or
50.96% had been recovered leaving a balance of GH¢233,153.27.
Analysis of debtor control ledger
Bal. b/d
ADVERT.
79,754.58
SUBSCRIPT 107,499.54
RENT
Total
187,254.12
Current
Amt. due
217,545.60
51,026.94
19,596.00
288,168.54
Total Amt.
due
297,300.18
158,526.48
19,596.00
475,422.66
Total Amt.Outg
collected
balance
186,012.93 111,287.25
45,749.46 112,777.02
10,507.00
9,089.00
242,269.39 233,153.27
1383. The increase in the debtors was as a result of management‟s
failure to implement recommendations in our previous audit report
advising management to adopt a proactive way of transacting
business, take utmost care in granting credits and hold officers liable
for breach of the conditions.
1384. The above situation has adversely affected cash inflows and
could disrupt the achievement of GNA‟s goals.
1385. We accordingly advised the head of the business unit to review
its credit policy and map up effective debt collection to recover the
amount of GH¢233,153.27.
Shortfall in revenue collection
1386. Due to inadequate segregation of duties at the accounts office,
we noted that the Cashier belatedly banked only GH¢16,790.00 out of
GH¢17,976.19 revenue collected whilst the balance of GH¢1,186.19
was not accounted for.
1387. The foregoing situation contravened FAR 15(1) which provides
“any public officer or revenue collector who collects or receives
public and trust money shall issue official receipt for them and pay
them into the relevant public fund account within twenty four hours of
285
receipt except in exceptional circumstance to be identified by the
Minister”.
1388. We also observed that out of GH¢35,224.25 non-tax revenue
banked, the Cashier transferred only GH¢33,086.25 into the
Consolidated Fund leaving a balance of GH¢2,138.00 in the transit
account in violation of FAR 17(c) which requires that a head of
department should monitor and ensure the prompt transfer of IGF
lodged in transit banks.
1389. At the instance of the audit, the Cashier immediately
transferred the outstanding amount of GH¢3,324.19 into the
Consolidated account. Management was advised to enforce
segregation of duties at the accounts office and effectively supervise
the work of the Cashier.
Fuel and lubricants not accounted for – GH¢26,759.61
1390. Our audit of fuel and lubricants purchased for the running of
official vehicles disclosed that out of GH¢46,524.51 fuel issued to six
drivers only GH¢29,274.90 was logged in the respective vehicle log
books resulting in GH¢17,249.61unaccounted fuel.
1391. Additionally, out of GH¢24,000.00 fuel coupons purchased
from GOIL, the Accountant issued out only GH¢14,490.00 to drivers
leaving outstanding coupons amounting to GH¢9,510.00 unaccounted
for.
1392. The omissions were caused by lack of managerial supervision
over the drivers and Accountant, which could lead to loss of the
Agency‟s funds.
1393. We therefore recommended that the drivers and Accountant
produce evidence of the use of the fuel in furtherance of the Agency‟s
programme, failing which the amount of GH¢17,249.61 and
GH¢9,510.00 should respectively be recovered from them. We also
advised that management should strengthen its supervisory role.
286
1394. Management stated that the recording in the log books would
be seriously enforced.
Purchases not routed through stores – GH¢5,930.81
1395. Irrespective of provisions of Section 35(2) of Financial
Administration Act, 2003 (Act 654) which provides, “accountability
in the normal course of public business is satisfied when supplies have
been used up and consumed with records showing how and for what
purpose they have been used for”, we noted that items worth
GH¢5,930.81 purchased between April and November 2009 were not
routed through store for documentation before usage.
1396. Though our verification disclosed that the items were
purchased and used in furtherance of the objectives of GNA we were
of the view that the omission if not forestalled could lead to diversion
and or non procurement of stores resulting in loss of the Agency‟s
funds. We attributed the procedural lapse to breakdown in
procurement controls.
1397. We recommended and management accepted that, all future
purchases would be routed through stores before use.
MINISTRY OF JUSTICE
GENERAL LEGAL COUNCIL
Introduction
1398. This report relates to the audited accounts of the General Legal
Council for the period 1 January 2006 to 31 December 2009.
MANAGEMENT ISSUES
Direct spending of revenue
1399. We observed that IGF collected was not banked in gross in
contravention of FAR 22(1). Our review revealed that out of a total
revenue of GH¢81,356.28 realised during the review period, only
GH¢5,509.00 representing 55.9% was banked, GH¢28,301.48 or
287
34.8% was spent directly from the collections on operational expenses
and GH¢7,545.80 or 9.3% could not be accounted for.
1400. We were of the view that management‟s failure to introduce an
imprest system to meet petty expenditure contributed to the direct
spending of revenue collected. This situation could result in excessive
cash holdings with its attendant high risk of abuse.
1401. We recommended the introduction of a standing imprest to
meet petty and emergency payments, which are otherwise
inconvenient to disburse through the normal payment system. We
further recommended that the Accountant should account for the
outstanding amount of GH¢7,545.80, failing which the amount should
be refunded.
1402. Management produced unapproved payment vouchers totalling
GH¢1,910.00 for 2009 with the explanation that they were omitted
from the cashbook. We requested for justification of the unapproved
vouchers and accountability of the outstanding balance of
GH¢5,635.80.
1403. As at the time of reporting, the anomaly had been rectified and
the outstanding balance had been accounted for.
Misapplication of funds - GH¢1,011,956.02
1404. FAR 17(b and c) states that a head of department shall ensure
that all non-tax revenue is immediately lodged in the designated
transit bank account except in the case of IGF retained under an
enactment and monitor and ensure that the non-tax revenue lodged is
promptly transferred into the main Consolidated Fund.
1405. Though we did not sight the mandate of Ghana School of Law
(GSL) to retain its IGF, management failed over the years to transfer
the lodgements into the Consolidated Fund. Instead, we observed that
between 2006 and 2009 due to the delay in release of subvention, the
Director, GSL approved a total sum of GH¢1,011,956.02 to be
advanced from the School‟s IGF account to GLC for the payment of
staff salaries.
288
1406. We noted that though the subventions for the respective years
have been received, GLC had not refunded the amount into the
School‟s account. The practice amounted to misapplication of funds,
which adversely affected government‟s efforts at pooling financial
resources for fair distribution.
1407. We recommended that the total advance of GH¢1,011,956.02
be refunded into the IGF account and all moneys accrued transferred
into the Consolidated Fund without delay in the absence of any
approval for retention of IGF.
1408. Management stated that due to its woefully inadequate
subvention, it was unable to refund the money borrowed and added
the Attorney General is pursuing approval from the Minister of
Finance to enable GLC use its IGF to meet the expenses of the school
.
Failure to present payment vouchers for audit
1409. Contrary to Regulation 262 of L.I.1802 which provdes, “a head
of department shall ensure that financial and accounting records are
preserved in good order in a manner that facilitates ready access for
reference”, the Chief Accountant could not produce for audit scrutiny
the following payment vouchers:
i.
ii.
iii.
83 (cedi) payment vouchers totalling GH¢62,260.58
3 (pound) sterling payment vouchers totalling £6,970.00
4 (US dollar) payment vouchers totalling $6,202.00
1410. Improper filing system contributed to the observed condition
and as a result, we were unable to authenticate the payments.
1411. Management responded that the accounts department had been
tasked to locate and make available the payment vouchers to our
office.
1412. At the time of reporting, payment vouchers amounting to
GH¢5,307.30 and US$ 1,600.00 were produced for scrutiny. We
recommended that the Accountant should improve on the filing
289
system at the accounts office and ensure that the outstanding payment
vouchers are produced for our scrutiny or the paying officer should
refund the amount paid.
Failure to retire imprest - GH¢29,163.00
1413. We noted that moneys totalling GH¢29,163.00 were advanced
to two officers in 2008 to undertake various assignments for the
School. As at the time of reporting, the imprest had neither been
retired nor advanced to the officers contrary to FAR 288(1).
1414. We noted that there were no procedures for granting of
imprests to ensure their early retirement. Additionally, the Accountant
did not demand the retirement of any previous imprests before further
advances were granted. Failure to retire the imprest could result in the
misuse of the total amount advanced and/ or any outstanding balances.
1415. We recommended that the imprests be retired or the amount
involved adjusted to the personal advance account of the officers
concerned in compliance with Regulation 288(1) of the FAR. We also
recommended that management put in place measures which would
ensure timely retirement of imprest.
1416. Management in response stated that the officers concerned
have been written to, to account for those monies or refund same into
the School‟s account.
Failure to obtain VAT Invoices/ Receipts - GH¢12,974.71
1417. An examination of sampled vouchers revealed that an amount
of GH¢12,974.71 was charged by various suppliers as VAT but no
VAT invoices/ receipts were issued to compel the service providers to
account for the taxes to VAT Service.
1418. This situation arose as a result of the Accountant not
demanding the VAT invoice before paying the suppliers.
290
1419. We recommended and management agreed:
i.
To ensure that the suppliers involved either issue the
appropriate invoices or refund the VAT charged to the
GSL without delay
ii.
The Accountant would demand VAT invoices/receipts
anytime payments inclusive of VAT are made.
Failure to recover payment for non-performance - GH¢639.40
1420. Management awarded a contract to Universal Acceptances
Limited to install UPVC doors and windows for two lecture halls and
offices of the School at a contract sum of GH¢49,597.00. We noted
that evaluation of bids for award of the contract was not guided by an
engineer‟s estimate. This could result in over-pricing of the contract.
1421. Additionally, the contract agreement signed on 7 January 2008
demanded an advance payment of 70% of the contract sum instead of
the mandatory 15% mobilisation for government contracts. The
following payments were made to Universal Acceptances Limited:
Payments to Universal Acceptances Limited
Date
P.V No.
Particulars
25/03/08.
05/09/08
118/08
365/08
Total
Advance Payment
Additional Payment
Amount
GH¢
34,717.00
5,600.00
40,317.00
1422. We observed that a certificate did not support the additional
payment of GH¢5,600.00 but management claimed that the work was
80% completed. By management‟s assertion, the contractor should
have been paid an additional sum of GH¢4,960.60 instead of
GH¢5,600.00 leading to an overpayment of GH¢639.40.
291
1423. We were informed that due to a misunderstanding, the contract
was abandoned and re-awarded to Nationwide Logistics Company
Limited at a sum of GH¢9,959.00 on 7 September 2009 for
completion.
1424. The lapses noted in the award and payments of the initial
contract could be attributed to the Procurement Committee‟s failure to
comply with tendering procedures sanctioned by the Public
Procurement Act (PPA), 2003 (Act 663), which would not ensure
optimum value for money and could result in the loss of GH¢639.40
to the School.
1425. We recommended that the Procurement Committee update
itself on the procedures for the award of contracts and abide by them.
We also advised management to recover the overpayment of GH
GH¢639.40 from Universal Acceptances Limited and be guided by
relevant laws in transacting further business.
1426. Management informed us that it had initiated action against
Universal Acceptance Limited to recover the amount involved.
Stock shortage - GH¢4,088.00
1427. Notwithstanding provisions of Chapter 1202 of the Store
Regulations 1984, no stocktaking was conducted for the four years
reviewed. Our examination of store records also disclosed the
following anomalies:
i. Stores Receipt Vouchers (SRV) were sometimes not prepared
when items were received into store.
ii. In some instances where Stores Receipt Vouchers were
prepared, no entries were made on the tally cards or in the
ledger.
iii. The previous store ledger/s from which balances were
transferred into the current ledger could not be produced for us
to confirm the balances.
292
iv. Store Issue Vouchers (SIV) were not recorded in the ledger.
1428. As a result of the irregularities, our stock count revealed a
shortage of 1,022 reams of A4 paper valued at GH¢4,088.00. The
foregoing was as a result of ineffective supervision and lack of
internal check, which could result in:
i.
Stock balances being misstated on financial statements,
ii.
The errors and omissions stated above not being
detected early for
correction to be effected,
iii.
Facilitation of defalcation of store items which would
not be noticed, and
iv.
Under/ over stocking of store items
1429. We recommended the following:
i. Management should ensure compliance with the relevant
provisions of the stores regulations and maintain proper
records of all stores transactions as enjoined by FAR 1
(1).
ii.
The previous store ledger should be located and
presented for audit scrutiny.
iii.
The storekeeper, Emmanuel Ofori should either account
for the shortage declared or refund the amount involved.
iv.
Management should improve on supervision and internal
check.
1430. Management attributed the weaknesses identified to manpower
limitation and stated that it had requested for a National Service
Personnel with a purchasing and supply background from the Service
Secretariat to assist in the stores function.
293
Audit Report Implementation Committee (ARIC) not functional
1431. Regulation 196(4) of the FAR, 2004 states “every department
shall as part of its accounting and auditing functions establish an
Audit Report Implementation Committee (ARIC) in accordance with
Section 30 of the Audit Service Act 2000 (Act 584).”
1432. We noted that GLC‟s ARIC was not functional. Even though
nominees have been mentioned, the Committee was yet to be
inaugurated to hold its maiden meeting.
1433. The ARIC, if functional, would ensure the implementation of
audit recommendations and address financial matters raised in internal
monitoring reports as well. This would result in greater efficiency in
the operations of GLC.
1434. We recommended and management agreed to take necessary
steps to make its ARIC functional.
MINISTRY OF FOOD AND AGRICULTURE
DEPARTMENT OF CROP SERVICES
NERICA RICE DISSEMINATION PROJECT
ADF LOAN AGREEMENT NUMBER 2100150007161
Introduction
1435. This report covers the audited financial statement of Ministry
of Food and Agriculture, Department of Crop Services, Nerica Rice
Dissemination
Project
ADF
Loan
Agreement
Number
2100150007161 for the year ended 31 December 2009.
Operational results
1436. Total Funds received for the period under review fell
significantly from US$1,301,141 in 2008 to US$657,825 in 2009, a
decrease of 49.4% due largely to a decline in funds received from
ADF of US$334,242. Funds received from ADF constituted 96.4% of
total funds while other income (Counterpart Funding – GOG)
constituted 3.6% of total funds. The details of operational results are
shown in table 157.
294
Table 157: Statement of resources and expenditure for 2009
2009
2008
US$
US$
Funds from ADF
633,947
968,189
%
Change
(34.5)
Counterpart finding – GOG
Total
Project Cost
Goods
23,878
657,825
332,952
1,301,141
(92.8)
(49.4)
449,282
330,311
36.0
Services
Operating Cost
348,141
139,193
365,194
167,118
(4.7)
(16.7)
116,283
1,052,899
28,613
891,236
306.4
18.1
Civil Works
Total Project Cost
1437. Total Project Cost went up by 18.1% from US$891,236 in 2008
to US$1,052,899 in 2009. The decreases in Services and Operating
Cost of US$17,053 and US$27,925 respectively and corresponding
significant increases in Goods and Civil Works by US$118,971 and
US$87,670 respectively accounted for the rise in project cost.
Financial position
The Project‟s summarised balance sheet is shown in table 158.
Accumulated Project Expenditure
Current Assets
Net assets
Represented by:
ADF – Loan
GOG – Contribution
2009
US$
2,876,767
248,777
3,125,544
2008
US$
1,823,868
643,851
2,467,719
%
Change
57.7
(61.4)
26.7
2,382,192
743,352
3,125,544
1,748,245
719,474
2,467,719
36.3
3.3
26.7
1438. Accumulated Project Expenditure increased by 57.7% from
US$1,823,868 in 2008 to US$2,876,767 in 2009. This was due to
increases in Project Cost of goods, services, operating and civil works.
295
1439. Current Assets recorded a decrease of 61.4% from US$643,851
in 2008 to US$248,777 in 2009. This was largely due to a drop in
Cash and Bank Balances of AFD US Dollar Account from
US$542,820 in 2008 to US$200,459 in 2009 and GOG – Ecobank Ltd
from US$93,732 in 2008 to US$9,657 in 2009 respectively.
1440. Net worth of the Project grew marginally by 26.7% due to
increases in ADF Loan and GOG – Contribution.
MANAGEMENT ISSUES
No evidence of authorisation for payments – GH¢2,207
1441. Section 16 of FAA, 2003 states that all payments should be
adequately and properly supported by a payment voucher or certificate
duly signed by the authorised head of department and third party
documents such as invoices, receipts and other contract document for
work done, goods supplied or services rendered whether under a
contract or not.
1442. We noted that, although there were third-party supporting
documents, there was no evidence of authorisation for some payments
made during the year.
1443. As a result, the eligibility, occurrence, and completeness of the
payment detailed below could not be ascertained.
1444. Management responded that since the District Director
authorises all payments made from the account and she is also a
signatory to the account, her signing of those cheques signified her
approval for those payments.
Date /PV No.
17/8.09- 6032
19/8/09-6037
25/8/09-6038
Total
296
Details
Spare parts for motor bike GT3921U
Fuel allowance for AEAs & mgt. for Aug.
09
Cost of labour for fertilizer application
Amount
GH¢
200.00
1000.00
1007.00
2,207.00
1445. We recommended that management should ensure that all
payment vouchers supporting any transaction are duly authorised or
approved by the appropriate superior before payments are made.
1446. Management accepted the recommendation.
WEST AFRICA AGRICULTURAL PRODUCTIVITY
PROGRAMME (WAAPP)
Introduction
1447. This report relates to the audited accounts of the West Africa
Agricultural Productivity Programme (WAAPP), a 10-year
programme launched in May 2008, for the year ended 31 December
2009.
Operational results
1448. Total Funds Available increased by 47.7% from GH¢2,329,321
in 2008 to GH¢3,439,558 in 2009. Transfer from IDA Special
Account of GH¢1,273,326 alone constituted 47.2% of total funds
available in 2009. The Transfer from IDA Special Account increased
from GH¢915,229 in 2008 to GH¢1,273,326 in 2009, an increase of
39.1%. Disbursements from Loan declined marginally by 0.3% from
GH¢1,400,000 in 2008 to GH¢1,396,313 in 2009.
Table 159: Statement of receipt and expenditure for 2009
Receipts
Cash & Bank Bal. as at 1st January
Disbursements from the Loan
Refunds
Transfer from IDA Special Account
Interest Received
Total Funds Available
Expenditure
Research Grants
Goods Equip, Vehicles and Materials
Training & Consulting Service
2009
GH¢
744,540
1,396,313
19,908
1,273,326
5,471
3,439,558
2008
GH¢
1,400,000
915,229
14,092
2,329,321
%
Change
(0.3)
39.1
(61.2)
47.7
553,047
357,797
90,183
15,215
10,000
2,251.6
801.8
297
Operating Cost
Exchange Difference
Total Direct Expenditure
Other Expenditure
Total Expenditure
Cash & Bank Bal as at 31st Dec.
402,277
17,374
1,420,678
1,279,793
2,700,471
739,087
612,499
41,838
679,552
905,299
1,584,781
744,540
(34.3)
(58.5)
109.1
41.4
70.4
(0.7)
1449. Total Direct Expenditure of the Project rose by 109.1% from
GH¢679,552 in 2008 to GH¢1,420,678 in 2009. A substantial portion
of the Direct Expenses in 2009 was in Research Grants which
registered GH¢553,047 (no Research Grant was received in 2008)
1450. Goods, Equipment, Vehicles and Materials also registered
GH¢357,797 as against GH¢15,215 incurred in 2008, representing an
increase of 2,251.6%. The increase was as a result of vehicles and
equipment procured in 2009 from IDA Special Accounts. The
Exchange Loss arose as a result of differences in the exchange rates
applied to the utilised portion of the IDA transfers into the cedi
account at the beginning and the end of the period
1451. Other Expenditure also rose by 41.4% from GH¢905,299 in
2008 to GH¢1,279,793 in 2009.
Financial position
is shown in table 160:
Capital Expenditure
Current Assets
Current Liabilities
Net Current Assets
Accumulated
Expenditure
Net Assets
Current Ratio
298
Non-Capital
2009
US$
373,012
745,554
10,000
735,554
1,687,747
2008
US$
15,215
744,540
10,000
734,540
650,245
2,796,313
74.6:1
1,400,000
74.5:1
%
Change
2351.6
0.1
0.1
159.6
99.7
1453. Capital Expenditure stood at GH¢373,012 at the close of 2009
(2008: GH¢15,215).This shows an increase of 2,351.6% over the
2008 figure , as a result of Vehicles and Additional Equipment
procured in 2009.
1454. Current Assets rose by 0.1% to GH¢745,554 in 2009 (2008:
GH¢744,540). An Amount Receivable from MOFA contributed
mainly to the increase.
1455. Current Liabilities which did not experience an increase over
the 2008 figure of GH¢10,000 was made up of Accrual for Audit
Fees.
1456. Accumulated Non-Capital Expenditure went up by 159.6 %
from GH¢650,245 in 2008 to GH¢1,687,747 in 2009. The increases
in expenditure on training & consultancy services, operating cost, and
an expenditure on research grant gave rise to the upward movement in
Accumulated non- capital expenditure. Net Assets also increased by
99.7% from GH¢1,400,000 in 2008 to GH¢2,796,313 in 2009.
1457. The liquidity position of 74.6:1 (2008: 74.5:1) indicated the
Project‟s ability to discharge its short-term obligations when they fall
due.
MANAGEMENT ISSUES
Failure to put identification marks on project assets
1458. Regulation 1513 and 1711 of the Stores Regulations 1984,
require assets to be clearly and conspicuously marked for easy
identification and to reduce the risk of theft or misapplication.
1459. Contrary to Stores Regulations 1984, we observed that though
WAAPP maintains a Fixed Assets Register, the assets had not been
marked with identification marks for easy reference and control.
1460. We opined that unmarked assets could be easily pilfered or
stolen and difficult to identify in such unexpected situations.
299
1461. We advised Management to assign identification marks to the
assets and enter these codes including their Location, serial numbers
and registration numbers in the Fixed Assets Register for ease of
reference and control.
1462. Management stated it had commenced an exercise in 2009 to
mark all project fixed assets and all available information would be
entered in the Fixed Assets Register as required.
GRAINS AND LEGUMES DEVELOPMENT BOARD
Introduction
1463. This report relates to the audited accounts of Grains and
Legumes Development Board for the year ended 31 December 2009.
Operational results
1464. The Operations for the year under review ended with an
increase in the deficit from GH¢10,275 in 2008 to GH¢86,178 in
2009. A rise of 39.0% in total expenditure and a deficit arising from
the farm operations accounted for the overall deficit recorded from the
Board‟s operations.
1465. Table 161 is a summary of the Income Statement.
Income
GOG Subvention
Other Income
Total Income
Expenditure
Administrative & General Expenses
Farm Produce
Total Expenditure
(Deficit)
300
2009
GH¢
892,204
8512
900,716
2008
GH¢
834,015
20,186
854,201
%
Change
7.0
(57.8)
5.4
932,260
54,634
986,894
(86,178)
670,786
193,690
864,746
(10,275)
39.0
(71.8)
14.1
738.7
1466. Total Income increased by 5.4% from GH¢854,201 in 2008 to
GH¢900,716 in 2009. A rise in Government Subvention accounted
for the increase.
1467. Total Expenditure for the year 2009 amounted to GH¢986,894
as against GH¢864,746 recorded in year 2008. This showed an
increase of 14.1%. The rise in expenditure was due to an increase in
various items of Administrative and General Expenses.
Financial position
1468. A summary of the Board‟s financial position as at 31 December
2009 is shown in table 162
Non-Current Assets
Current Assets
Current Liabilities
Net Current Assets
Net Assets
Current Ratio
2009
GH¢
310,567
369,343
300,920
68,423
378,990
1.2:1
2008
GH¢
187,860
142,688
2,192
140,497
328,357
65.1:1
%
Change
65.3
158.8
13,628.1
(51.3)
15.4
1469. Non-Current Assets which stood at GH¢187,860 in 2008 rose
to GH¢310,567 in 2009, an increase of 65.3%. The increase was due
to additional plant & machinery as well as furniture & fittings/
equipment procured during the year.
1470. Current Assets also increased by 158.8% from GH¢142,688 in
2008 to GH¢369,343 in 2009. This was due to an increase in Cash
and Bank Balances.
1471. Current Liabilities rose from GH¢2,192 in 2008 to
GH¢300,920 in 2009. An increase of 13,628.1%. This was due to an
amount due to MOFA Agric Mech. and Seed Stock/Block Farming
which was not in existence in 2008 and a rise in Accounts Payables.
301
1472. The current ratio of the Board which was favourable in 2008
(65.1:1) reduced drastically to 1.2:1 in 2009, indicating that the Board
might not be able to meet its short-term obligations as and when they
fall due.
NORTHERN RURAL GROWTH PROGRAMME ADF
LOAN NO. 2100150015795 IFAD LOAN NO 734 0 GH IFAD
GRANT NO. 994-GH AND GOVERNMENT OF GHANA FUND
Introduction
1473. This report covers the audited Financial Statements of the
Northern Rural Growth Programme of the Ministry of Food and
Agriculture for the year ended 31 December 2009.
1474. Loan No. 734-GH and Grant No. 994 with IFAD were signed
on 12 September 2008 and Loan No. 2100150015795 with ADF was
signed on 4 March 2008.
Operational results
1475. Total Receipts for the Programme for the period under review
amounted to GH¢3,973,905.00. The main source of Income of the
Programme was from IFAD which amounted to GH¢2,140,146
representing 53.9% of the total source of income. The breakdown of
other sources were ADF of GH¢505,891 accounting for 12.7%, and
GOG of GH¢1,327,868 representing 33.4% of total sources.
Presented in table 163 are the operational details.
Table 163: Sources and application of funds for 2009
Sources
Transfers
Interest Earned
Inter Fund Transfer
Exchange Grain
Total Sources
Application
Capital Expenditure
Vehs, Goods & Equipment
302
IFAD
GH¢
2,100,000
20,234
19,912
2,140,146
12,214
ADF
GH¢
505,856
35
505,891
-
GOG
GH¢
1,312,763
35,374
(20,269)
1,327,868
Total
GH¢
3,918,619
35,374
19,912
3,973,905
26,443
38,657
Accumulated Non-Capital Expenditure
Training and Studies
343,721
Technical Assistance &
30,539
Support
Salaries and Allowances
270,043
Operating Expenses
192,574
Exchange Loss
Creditors/Debtors
Total Expenditure
Working Fund
Bank Balances
Total
(22,954)
813,922
826,136
9,621
835,757
1,304,389
2,140,146
11,274
-
88,381
7,250
443,376
37,789
1,839
104,684
271,882
297,258
15,196
(145)
23,099
26,325
225,253
26,325
251,696
26,325
251,696
479,566 1,076,172
505,891 1,327,868
15,196
1,065,500
1,104,157
9,621
1,113,778
2,860,127
3,973,905
-
1476. Total Expenditure for the same period under review was
GH¢1,104,157. These were made up of Training and Studies of
GH¢443,376 representing 40.2%, Technical Assistance and Support
of GH¢37,789 representing 3.4% of Total Expenditure and Recurrent
Cost of GH¢584,336 or 52.9%; Vehicles, Goods and Equipment of
GH¢38,657 accounted for 3.5% of Total Expenditure of the year
2009. Cash and Bank Balances as at 31 December 2009 stood at
GH¢2,860,127.
Financial position
1477. Presented in table 164 is the Project‟s summarised balance
sheet as at 31 December 2009
1478. Table 164: Financial position as at 31 December 2009
Fixed Assets
Current Assets
Net Assets
Financed by
IFAD Loan
ADF Loan
GOG Fund
IFAD
GH¢
12,214
2,087,786
2,100,000
2009
ADF
GH¢
505,856
505,856
GOG
GH¢
26,443
1,286,320
1,312,763
Total
GH¢
38,657
3,879,962
3,918,619
2,100,000
-
505,856
-
1,312,763
2,100,000
505,856
1,312,763
2,100,000
505,856
1,312,763
3,918,619
303
1479. Fixed Assets for the period under review was GH¢38,657,
representing 1.0% of Net Assets while Current Assets was
GH¢3,879,962, representing 99% of Net Assets. The composition of
Current Assets are Cash and Bank Balances of GH¢28,690,127
accounting for 73.7%; Working Fund of GH¢9,621 or 0.2% and
Accumulated
Non-Capital
Expenditure
of
GH¢1,010,214,
representing 26% of Current Assets.
MANAGEMENT ISSUE
Ineligible expenditure – GH¢8,020.76 (US$5,569.97)
1480. Included in the Statement of Expenditure (SOES) sent per
withdrawal Application No. NRGP/WA/09/003 dated 19 January,
2010 was an ineligible expenditure of US$5,569.97 (GH¢8,020.76).
1481. This resulted from the over claim of the unspent portion of an
imprest amount of GH¢23,700.00. Detailed as follows:
Imprest amount
GH¢23,700.00
Per SOE Actual amount spent
15,679.24
Over claim (Ineligible)
GH¢8,020.76
1482. We recommended that the amount of US$5,569.94
(GH¢8,020.76) be refunded and paid into the IFAD Special Account.
DIRECTORATE OF CROP SERVICES
CASHEW DEVELOPMENT PROJECT – ADF LOAN
NUMBER F/GHA/PL/AAA/2001/1/ (2100150000345)
Introduction
1483. This report is related to the audited financial statements of the
Cashew Development Project of the Ministry of Food and Agriculture
for the year ended 31December 2009.
Operational results
1484. Total Receipts for the year under review dropped by 21.2%
from US$1,012,006 in 2008 to US$797,009 in 2009. This was as a
304
result of a significant drop of 89.9% in Government of Ghana
Counterpart Funding from US$202,812 in 2008 to US$20,477.
Presented in table 165 are details of performance indicators.
Table 165: Statement of receipt and expenditure for 2009
Receipts
Transfer from ADF
Counterpart Funding-GOG
Other Income
Total Receipts
Project Cost
Goods, Equipment & Materials
Training & Consultancy
Services
Operating Cost
Total Project Cost
2009 (US$)
2008 (US$)
% Change
754,835
20,477
21,697
797,009
791,294
202,812
17,900
1,012,006
(4.6)
(89.9)
21.2
(21.2)
135,287
662,063
241,256
594,915
(43.9)
11.3
87,900
885,250
486,272
1,322,443
(81.9)
(33.1)
1485. Total Project Cost also decreased by 33.1%, from
US$1,322,443 in 2008 to US$885,250 in 2009, which was largely due
to decreases in Goods, Equipment and Materials and Operating Cost.
The decrease in Operating Cost for the year under review was as a
result of a 99.4% reduction in Travelling Cost from US$365,145 in
2008 to US$2,116 in 2009.
Financial position
1486. Table 166 shows the Project‟s financial position as at 31
December 2009
Table 166: Project’s financial position as at 31 December 2009
Accumulated Proj. Expenses
Current Assets
Net Assets
Represented by:
African Development fund
GOG – Contribution
Other Contribution
2009
US$
7,621,960
5,330,836
12,952,796
2008
US$
6,736,709
5,419,078
12,155,787
%
Change
13.1
(1.6)
6.6
11,774,536
1,013,887
164,373
11,019,701
993,410
142,676
6.8
2.1
15.2
305
1487. Accumulated Project Expenditure increased by 13.1% from
US$6,736,709 in 2008 to US$7,621,960 in 2009. The increase was as
a result of increase in Project Cost .
1488. Current Assets decreased marginally from US$5,419,078 in
2008 to US$5,330,836 in 2009, registering a 1.6% fall. The Net
Assets rose by 6.6% from US$12,155,787 in 2008 to US $12,952,796
in 2009.
MANAGEMENT ISSUES
Outstanding loan to Directorate of Crop Services – GH¢1,020
1489. Our examination of payment vouchers revealed that an amount
of GH¢2,520 of Project fund was advanced to Directorate of Crop
Services on 4th May 2009 to pay for MOFA activities. The amount
was still outstanding as at the time of the audit.
1490. The effect is that, funds that could be available for the project‟s
programme would be locked in debt.
1491. We recommended that Project Manager institute effective
measures to recover the outstanding debt.
1492. Management responded that GH¢1,500 had been recovered,
leaving a balance of GH¢1,020.00 yet to be recovered.
BOLE
Embezzlement of loan from farmers – GH¢3,700
1493. We noted during the audit that one of the Agric extension
Agents - Sylvester Kitchama in the Bole District embezzled an
amount of GH¢3,700 being monies paid to him by cashew farmers as
loan repayment for onward payment to Agricultural Development
Bank (ADB) at Wa.
306
1494. We recommended that no payment be made to any agric
extension agents; rather farmers should be encouraged to make
payment at the District Office. Meanwhile, Kitchama should be made
to refund all monies embezzled to the District Office.
1495. Management responded that the officer‟s family has taken up
the responsibility to repay the amount.
MINISTRY OF TOURISM
GHANA TOURIST BOARD
Introduction
1496. This report relates to the audited accounts of Ghana Tourist
Board for the year ended 31 December 2007.
Operational results
1497. The performance indicators for the period are shown in table
167.
Income
Government Grant
Other Income
Total Income
Expenditure
Staff Cost
Administrative Cost
Service Activity Cost
Financial Cost
Total Expenditure
Surplus/(Deficit)
2007
GH¢
1,917,228
662,008
2,579,236
2006
GH¢
2,777,102
581,285
3,358,387
%
Change
(31.0)
13.9
(23.2)
1,035,298
878,813
952,279
781
2,867,171
(287,935)
764,426
789,077
437,003
3,206
1,993,712
1,364,675
35.4
11.4
117.9
(75.6)
43.8
(121.1)
1498. Total Income dropped by 23.2% from GH¢3,358,387 in 2006
to GH¢2,579,236 in 2007. The drop was due to a 31.0% decrease in
Government Grant from GH¢2,777,102 in 2006 to GH¢1,917,228 in
307
2007. The rise in other income was attributed to an increase in
registration/ license fees and interest received on loan account.
1499. Total Expenditure however, increased by 43.8% from
GH¢1,993,712 in 2006 to GH¢2,867,171 in 2007. This was due to a
35.4% and 117.9% rise in Staff Cost and Service Activity Cost
respectively. The sharp upward movement in service activity cost was
due to increases in expenses on training and conferences, printing and
publication, travelling and transport and material& consumables.
1500. The Board recorded a deficit of GH¢287,935 for the year under
review as compared to a surplus of GH¢1,364,675 in 2006.
Financial position
1501. Table 168 shows the movement in the financial position of the
Board.
Non-Current Assets
Current Assets
Current Liabilities
Net current Assets
Net Assets
Current Ratio
2007
GH¢
1,377,513
316,652
231,504
85,148
1,462,661
1.4:1
2006
GH¢
1,270,432
622,645
142,482
480,163
1,750,595
4.4:1
%
Change
8.4
(49.1)
62.5
(82.3)
(16.4)
2006 to GH¢1,377,513 in 2007. This was due to additions to Fixed
Assets within the year.
1503. Current Assets dropped by 49.1% from GH¢622,645 in 2006 to
GH¢316,652 in 2007. The decrease was due to a reduction in Bank
and Cash Balances.
308
1504. Current Liabilities on the other hand rose by 62.5% from
GH¢142,482 in 2006 to GH¢231,504 in 2007. This was due to an
increase in Creditors and Accruals.
1505. Net Assets decreased by 16.4% from GH¢1,750,595 in 2006 to
GH¢1,462,661 in 2007.
1506. The Current ratio of 1.4:1 in 2007 (2006: 4.4:1) shows that the
Board cannot discharge its short-term debts as and when they fall due.
OTHER AGENCIES
STATE ENTERPRISES COMMISSION
Introduction
1507. This report relates to the audited accounts of State Enterprises
Commission for the financial year ended 31 December 2009
Operational results
1508. The operational results for the year under review is summarised
in table 169.
Income
Other Income
Total Income
Expenditure
Employment Cost
Maintenance. Repairs &
Renewals
Financial & Professional
Charges
Total Expenditure
Surplus
2009
GH¢
569,789
191,439
761,228
2008
GH¢
384,765
91,943
476,708
%
Change
48.1
108.2
59.7
374,567
148,099
20,202
200,518
43,073
13,271
86.8
243.8
52.2
169,528
9,128
155,996
6,478
8.7
40.9
721,524
39,704
419,335
57,373
72.1
(30.8)
309
1509. Total Income for the year rose from GH¢476,708 in 2008 to
GH¢761,228 in 2009, registering an increase of 59.7%. This was due
to a 48.1% increase in Government Subvention and a 108.2% rise in
Other Income. The rise in other income was largely caused by an
increase in consultancy income.
1510. Total Expenditure also recorded a 72.1% rise from
GH¢419,335 in 2008 to GH¢721,524 in 2009. This was due mainly to
an increase in Travelling and Transport Expenses.
1511. The year under review recorded a surplus of GH¢39,704 (2008:
GH¢57,373), showing a 30.8% drop.
Financial position
1512. Stated in table 170 is the financial position of the Commission
as at 31 December 2009.
Item
Non-Current Assets
Current Assets
Current Liabilities
Net Assets
Current Ratio
2009
GH¢
608,395
415,717
277,960
746,152
1.5:1
2008
GH¢
549,102
294,514
223,235
620,381
1.3:1
%
Change
10.8
41.2
24.5
20.3
1513. Non-Current Assets increased by 10.8% from GH¢549.102 in
2008 to GH¢608,395 in 2009. This was due to additions to Office
Equipment and Furniture and Fittings.
1514. Current Assets rose by 41.2% from GH¢294,514 in 2008 to
GH¢415,717 in 2009. This was mainly due to a 459.8% rise in Cash
and Bank Balances.
310
in 2008 to GH¢277,960 in 2009. This was as a result of a 110.5% rise
in Accounts Payable and Accruals.
1516. Net Assets grew by 20.3% from GH¢620,381 in 2008 to
GH¢746,152 in 2009. The current ratio of 1.5:1 though showed a
marginal improvement over that of 2008 (1.3:1), yet the Commission
might not be able to meet its short-term financial obligations when
due since this fell below the benchmark of 2:1.
MANAGEMENT ISSUES
Ghana Refugee Board – GH¢13,099.68
1517. Our audit revealed an aged debt of GH¢13,099.68 owed by
Ghana Refugee Board to the Commission. Our checks revealed very
little had been done to retrieve this debt. The apathy towards debt
recovery goes to deny the Commission funds that can be used for
other activities.
1518. We recommended that management make serious effort to
retrieve the debt.
GIHOC liquidation account – GH¢38,605.33
1519. We observed that an amount of GH¢38,605.33 was outstanding
in the books in respect of GIHOC liquidation account 03-2536000-0600. Correspondence between the Bank of Ghana and the Commission
indicates that this amount was rationalized on instructions of the
Controller and Accountant-General as far back as 13 April 2007.
Records show that the Controller and Accountant-General owes the
Commission in respect of GIHOC liquidation as at 31 December
2009.
1520. This implies that debtors figure in Commission books may be
misleading.
311
1521. We recommended that management take the necessary steps to
eliminate this amount from its books and hand over same to the
appropriate authority.
ELECTORAL COMMISSION
Introduction
1522. This report relates to the audited accounts of Electoral
Commission for the year ended 31 December 2008 and 2009.
Operational results
1523. The Commission realised a total income of GH¢12,942,361 in
year 2009 as against GH¢82,917,106 in 2008, a decrease of
GH¢69,974,745 or 84.4%. The decrease was due mainly to the nonallocation of enough funds for specific Grant-normal service.
Government subventions remained the major source of income to the
Commission and contributed 79.8% of Total Income. The operational
results are shown in table 171.
Income
Less Expenditure
Registration & Election
Expenses
Depreciation
Total Expenditure
Operating Surplus/(Deficit)
2009
GH¢
12,942,361
2008
GH¢
82,917,106
%
Change
(84.4)
5,267,730
9,514,447
52,944,335
14,738,685
(90.1)
(35.4)
3,743,664
18,525,841
(5,583,480)
7,139,687
74,822,707
8,094,399
(47.6)
(75.2)
(169)
1524. Total Expenditure decreased significantly by 75.2% to
GH¢18,525,841 compared with GH¢74,822,707 in 2008. This was
due to a reduction in Registration and Election Expenses which
reduced by 90.1%
312
1525. The Commission‟s operations for 2009 ended with a deficit of
GH¢5,583,480 as against a surplus of GH¢8,094,399 in 2008 or a fall
of 169%.
Financial position
1526. The financial position of the Commission is provided in table
172.
Assets Employed
Current Assets
Current Liabilities
Net Asset
Current Ratio
2009
GH¢
6,238,099
1,755,351
318,710
7,674,740
5.5:1
2008
GH¢
9,611,718
5,382,194
198,452
14,795,460
27.1:1
%
Change
(35.1)
(67.4)
60.6
(48.1)
1527. The value of Assets Employed declined from GH¢9,611,718 in
2008 to GH¢6,238,099 in 2009 representing a decrease of 35.1% as a
result of Depreciation Charges.
1528. Current Assets went down from GH¢5,382,194 in 2008 to
GH¢1,755,351 in 2009, representing a decrease of 67.4% due to a
reduction in Debtors and Cash and Bank Balances.
1529. Current Liabilities rose by 60.6% to GH¢318,710 in 2009
(2008: GH¢198,452).
Sundry Creditors, which was the only
component for current liabilities accounted for the increase.
1530. The Net Assets of the Commission dropped by 48.1% from
GH¢14,795,460 in 2008 to GH¢7,674,740 in 2009.
1531. The liquidity position of the Commission stood at 5.5:1 in 2009
as against 27.1:1 in the previous year, an indication of the
Commission‟s ability to meet its short-term obligation as and when
they fall due.
313
MANAGEMENT ISSUES
Bank balances
1532. We observed that there was an amount of US$149,286.84
standing to the credit of the Electoral Commission since January 2009.
However, the Bank certificate we received from Bank of Ghana
indicated that the account did not exist as at 31 December 2008. This
implies that the bank balances have been overstated or the account has
been closed or the amount withdrawn without the knowledge of the
Electoral Commission.
1533. We recommended that the Electoral Commission should
investigate and reconcile the account with the Bank of Ghana as a
matter of urgency.
Government capital grants – GH¢775,931.96
1534. We noted that an additional amount of GH¢775,931.96 to the
Capital Grants account which accrued in the year 2008 was not
captured in the audited accounts for the year.
1535. As such omissions might not provide fair financial reporting,
we recommended that audited accounts should always be reconciled
with the computerized financial statements.
NATIONAL POPULATION COUNCIL
Introduction
1536. This report relates to the audited accounts of the National
Population Council for the years ended 31 December 2008 and 2009.
Operational results
1537. The year 2009 ended with an operational surplus of
GH¢38,664.25 as against a surplus of GH¢28,384.97 registered in the
previous year, representing an increase of 36.2%. Presented in table
173 is the summary of the Income and Expenditure Accounts for the
year ended 31 December 2009.
314
Income
Government subvention
Others
Total
Expenditure
Personnel Emolument
Administration
Service Activity
Total
Surplus/(Deficit)
2009
GH¢
684,052.75
64,448.78
748,501.53
2008
GH¢
491,718.83
6,805.25
498,524.08
%
Change
39.1
847.0
50.1
385,887.67
201,109.87
122,839.74
709,837.28
38,664.25
259,219.92
140,867.78
70,051.41
470,139.11
28,384.97
48.9
42.8
75.4
51.0
36.2
1538. Total Income increased by 50.1% to GH¢748,501.53 compared
with GH¢498,524.08 in the previous year. This occurred mainly as a
result of increases in its components, subvention and other income.
The significant rise in other income was due to funds received for
hosting meetings and workshops on Partners in Population and
Development (PPD).
1539. Total Expenditure also witnessed an increase by 51.0% from
the previous year‟s figure of GH¢470,139.11 to GH¢709,837.28. The
increases in the elements of expenditure accounted for the rise.
Prominent among the element increases was the expenditure on
service activity. The expenditure incurred on PPD meetings and
workshops, staff development and foreign travels as well as the
expenditure increase in other seminars/ meetings and workshops
resulted in the rise of service activity expense.
Financial position
1540. Table 174 presents the financial position of the Council.
Table 174: Financial position of the Council as at 31 December
2009
Fixed Assets
Net Current Assets
Total Assets
2009 (GH¢)
236,843.35
59,897.72
296,741.07
2008 (GH¢)
236,843.35
21,233.47
258,076.82
% Change
0
182.1
15.0
315
1541. There was no change in the Fixed Assets of the Council
because no additions were made neither were they depreciated. We
advised the Council to as a matter of urgency adopt a depreciation
policy on its assets for fair reporting.
Current ratio
1542. Current assets went up by 182.1% from GH¢21,233.47 in 2008
to GH¢59,897.72 in 2009 mainly due to the increase in bank balance.
The Council had no short-term obligation to meet.
1543. The long term solvency and stability of the Council increased
from GH¢258,076.82 to GH¢296,741.07 in the current year,
representing an increase of 15.0% as a result of the operational surplus
registered.
MANAGEMENT ISSUES
Non implementation of previous audit recommendations
1544. We noted that, though the Council had an ARIC in place as
mandated by Section 30 of the Audit Service Act 2000, it was
seemingly inactive, as it had not taken any step to ensure the
implementation of recommendations made in our audit report No.
CAD/DA/55/VOL.1/10 dated 27 May 2009 on the 2006 and 2007
accounts of the Council.
1545. The inaction of the ARIC resulted in the recurrence of the
irregularities and lapses identified and communicated to management
in the letter under reference. This defeated the value that the audit
would have added to the operational management of NPC.
1546. We recommended that Management ensure that the ARIC is
more responsive to its role as required by law.
1547. Management accepted our recommendation.
316
Payment of unearned salaries to staff - GH¢20,515.45
1548. Our payroll audit disclosed that unearned salaries totalling
GH¢20,515.45 was paid into the bank accounts of ten former
members of staff between March 2008 and June 2009 contrary to the
provisions of the FAR 297(1).
1549. Management‟s delay in
Accountant General's Department
separated staff from the payroll
C&AGD to immediately comply
wrongful payments.
notifying the Controller and
(C&AGD) to delete names of the
coupled with the inability of the
with the directive resulted in the
1550. The inaction of management and the C&AGD could lead to
loss of government funds.
1551. We recommended that management should request the
respective banks to transfer the amounts into the Consolidated Fund if
not withdrawn, otherwise the amount should be recovered from the
former employees and this office informed accordingly. We also
advised management to immediately notify C&AGD of any separated
staff in future for prompt deletion from the payroll.
1552. Management responded that the amounts have not been
withdrawn as it placed an embargo on the salaries of staff concerned.
Management further stated that steps would be taken to advise the
banks to transfer the amount into the Consolidated Fund and
accordingly inform our officers for verification.
NATIONAL MEDIA COMMISSION
Introduction
1553. This report covers the audited accounts of the National Media
Commission for the period 1 January 2008 to 31 December 2009.
Operational Results
1554. Total Income registered a decrease of 24.8% from
GH¢432,090.02 in 2008 to GH¢325,069.82 in 2009. Donations on the
317
other hand registered an increase of 104%, from GH¢37,779.00 in
2008 to GH¢76,882.00 in 2009. The decline in total income was
mainly due to the late release of Government Subvention for the last
quarter of 2009 which was received in 2010. Table 175 provides the
details of the performance indicators
Income
Government
Subvention
IGF
Donations
NYEP Allowance
Total
Expenditure
Personnel
Emoluments
Administration
Service
Other Expenses
Maintenance
Total
Excess/Deficit
2009
GH¢
245,267.82
2008
GH¢
364,481.02
2,920.00
76,882.00
1,930.00
37,779.00
27,900.00
432,090.02
325,069.82
% Change
(32.7)
51.3
103.5
(100)
(24.8)
(60.3)
94,487.76
130,832.43
5,919.40
76,882.00
308,121.59
16,948.23
238,245.84
167,389.6
11,100.00
37,129.00
8,882.10
462,746.54
(30,656.52))
(21.8)
(46.7)
107.1
(100)
(33.4)
155.3
1555. Expenditure incurred in 2009 totalled GH¢308,121.59 as
against GH¢462,746.54 in the previous year, a decrease of 33.4%.
The expenditure component included Personnel Emoluments which
fell significantly by 60.3% from GH¢238,245.84 in 2008 to
GH¢94,487.76. Administration expenses also fell by 21.8% from
GH¢167,389.60 in 2008 to GH¢130,832.43 in 2009 due mainly to the
absence of NYEP allowance expenditure. The only expenditure item
which experienced an increase was other expenses which rose
significantly from GH¢37,129.00 in 2008 to GH¢76,882.00 in 2009,
an increase of 107.1%. This was because expenditure on donor
support activities increased.
318
1556. An operational surplus of GH¢16,948.23 was registered during
the year as compared with a deficit of GH¢30,656.52 recorded in
2008.
Financial Position
1557. The Commission‟s Fixed Assets stood at GH¢58,054.02 in
2009 compared with GH¢27,496.00 in 2008, a growth of 111.1%. The
increase in 2009 was as a result of the purchase of vehicles, office
equipment and furniture.
1558. Current assets
rose by
54% from GH¢34,269.23 to
GH¢52,774.71 as a result of increases in accounts receivables and
bank balances
1559. Liquidity outlook remained strong as no current liability was
recorded.
MANAGEMENT ISSUES
Absence of Audit Report Implementation Committee (ARIC)
1560. Section 30 (1) of the Audit Service Act 2000, Act 584 states
“an institution, body or organization which is subject to auditing by
the Auditor-General shall establish an Audit Report Implementation
Committee”
1561. A function of the Committee is to ensure that the head of
organization pursues the implementation of matters raised in all audit
and internal financial monitoring reports.
1562. We noted however that management had not established an
ARIC in violation of the provision of Act 584. In our view, the
establishment of ARIC would facilitate the implementation of
recommendations made in audit reports and this would assist the
Commission to prevent recurrences of weaknesses thereby ensuring
sound financial management practices.
319
1563. We therefore recommended and management agreed to comply
with the stipulation of Act 584 without delay.
Failure to deduct tax on allowances
1564. We observed that despite provisions of the tax law,
management failed to deduct income tax on allowances amounting to
GH¢16,200.00 paid in 2009 to three officers who were engaged on a
German Development Service (DED) project, contrary to Section
81(1) of the Internal Revenue Act, 2000 (Act 592).
1565. Similarly, in contravention of Section 84 of Act 592,
management failed to withhold 15% tax of GH¢6,148.50 on various
payments totalling GH¢40,989.94 made out of UNDP funds to
individuals who rendered consultancy and other services to the
Commission.
1566. Failure to deduct the tax contravened the IRS Law and had
denied the Government much needed revenue for development.
1567. We recommended that the tax be recovered and paid to the
Commissioner of IRS and subsequent allowances and fees be taxed in
accordance with Act 592.
1568. Management stated that it had taken note of the
recommendations and would immediately discuss the matter with the
donors of the fund (DED) and the persons concerned.
Terms and conditions of Service
1569. According to Section 18(3), of the National Media Commission
Act 1993, “The staff shall hold office upon such terms and conditions
as the Public Services Commission shall approve.”
1570. We observed that management in January 2002 submitted to
the Public Services Commission (PSC) for approval draft terms and
conditions of Service for employees of the Commission. However, the
document was yet to receive endorsement as at the time of our audit in
2010 eight years after the submission.
320
1571. We noted that the absence of Conditions of Service had stalled
progression of staff. The situation could lower morale of staff and lead
to a decline in productivity.
1572. We recommended that management submit an up-dated
document to the PSC and pursue its approval with the urgency needed
in order to facilitate operational efficiency.
1573. Management stated that it was discussing the issue with the
relevant authorities towards its resolution.
NATIONAL COMMISSION FOR CIVIC EDUCATION
Introduction
1574. This report covers the audited accounts of the Greater Accra
Office
of
the
National Commission for Civic Education for the period 1 January
2006 to 31 December 2009.
MANAGEMENT ISSUES
Non-disclosure of UNICEF and UNESCO accounts
1575. In violation of Regulation 1(4) of L.I. 1802 the former
Regional Director and the Programme Officer failed to hand-over
financial records on UNICEF and UNESCO funds amounting to
GH¢126,270.00 for child right programmes for the review period.
Though at the instance of the audit the records were produced, we
could not authenticate transactions totalling GH¢18,785.00 out of the
amount receipted.
1576. This was as a result of discrepancies in 2007 between amounts
on payment vouchers that were recorded in the cashbook and amounts
stated on corresponding cheque stubs. Additionally, bank statements
for that period could not be produced for the audit team to ascertain
the actual payments for the period. The table below depicts some of
the differences.
321
Payment Vouchers (PV)
Date
Number
Amount
GH¢
11/1/07 GA/01/07
600.00
22/1/07 GA/02/07 1,100.00
7/2/07
GA/04/07
300.00
Corresponding Cheque
Difference
stubs
GH¢
Date
Number Amount
GH¢
29/1/07 939856
500.00
100.00
29/1/07 939857
1000.00
100.00
21/2/07 939860
3,500.00
3,800.00
1577. The former officers‟ violation of the provisions of the
regulation stated and the anomaly noted could result in misapplication
of funds, which could adversely affect programme results and erode
donor confidence.
1578. We recommended that the former officers either account for the
grants or be held liable for a refund. We recommended also that
management should ensure that employees handed-over financial and
accounting records as well as assets of the Office in accordance with
the FAR when relieved of their duties.
ICOUR LIMITED
Introduction
1579. This report covers the audited accounts of ICOUR Limited for
the year ended 31 December 2006 and 2007.
Operational results
1580. The performance indicators are shown in table 176:
322
Income
Subvention
Transfer from Government Grant
Total Income
Expenditure
Personnel Emolument
Administrative
&
General
Expenses
Service Activity
Depreciation
Doubtful Debts
Total Expenditure
Surplus
2007
GH¢
662,159
15,877
222,339
900,375
2006
%
GH¢
Change
466,253
42.0
189,723
17.2
655,976
37.3
508,027
106,795
429,611
92,099
18.3
16.0
97,576
31,690
7,335
751,423
148,952
41,865
31,798
6,668
602,041
53,935
133.1
( 0.3)
10.0
24.8
176.2
1581. Total Income recorded an increase of 37.3% from GH¢655,976
in 2006 to GH¢900,375 in 2007. The increase was attributed to a rise
in Subvention from the Government to pay off a short-term bank loan
and also in the Company‟s Internally Generated Funds which was as a
result of an increase in farming activities during the year. Transfer was
also made from Government Grant.
1582. Total Expenditure also rose by 24.8% from GH¢602,041 in
2006 to GH¢751,423 in 2007. The rise was due mainly to an increase
in Personnel Emoluments as a result of upward adjustment in Salaries
by the Government, Administrative and General Expenses resulting
from major repairs to Vehicles and rise in Service Activities due to
expansion of Farm Activities during the year and major repair works
on Plant and Machinery.
1583. The performances resulted in a 176.2% rise in surplus from
GH¢53,935 in 2006 to GH¢148,952 in 2007.
323
Financial position
1584. Presented in table 177 are the movements in the financial
position of the Institute for 2007.
Table 177: Balance Sheet as at 31 December 2007
Item
2007 (GH¢) 2006 (GH¢) % Change
Non-Current Assets
69,274
100,963
(31.4)
Current Assets
828,150
589,284
40.5
Current Liabilities
389,207
315,105
23.5
Net Current Assets
438,943
274,179
60.1
Net Assets
508,217
375,142
35.5
Current Ratio
2.1:1
1.9:1
1585. Non-Current Assets dropped from GH¢100,963 in 2006 to
GH¢69,274 in 2007, a decrease of 31.4%. This was due to Disposals
and Depreciation Charge for the year.
1586. Current Assets registered a 40.5% increase from GH¢589,284
in 2006 to GH¢828,150 in 2007. This increase was attributed to a rise
in Accounts Receivable and in Stocks.
in 2006 to GH¢389,207 in 2007. This was due to increases in
Accounts Payable, Short-Term Loans and Bank Overdraft.
1588. The liquidity position as indicated by a current ratio of 2.1:1
showed an improvement over that of 2006 (1.9:1). This depicts that
the Company can meet its short-term obligations as and when they fall
due
MANAGEMENT ISSUES
Trade Debtors
1589. We observed a significant increase in trade debtors‟ balance
from 2005 to 2007 financial years as follows:
2007 (GH¢) 2006 (GH¢) 2005 (GH¢)
Trade Debtor
324
552,423
464,488
409,567
1590. The comparison shows a 34.9% rise from 2005 to 2007
indicating the Company‟s debt collection activity was not effective.
About 60% or GH¢331,453 of the debtor balances were more than 5
years old.
1591. Consequently working capital of the company is locked up in
trade debtors.
1592. We recommended and Management agreed to intensify its
efforts to recover the debt. However, it explained that the rise in trade
debtors was due to a credit package for farmers in 2007, and most of it
will be paid after December 2007. Management promised to employ a
credit control officer to retrieve the debts.
Disposal of Unserviceable Vehicles, Plant and Machinery
1593. We observed that unserviceable vehicles, plant and machinery
were left in the open at the Central Workshop at the mercy of the
weather. They could be disposed of so that the proceeds can be used
to service the serviceable assets.
1594. The value of these assets may fall if action is not taken
immediately to dispose them off.
1595. We advised Management to seek approval from the board to
dispose of the unserviceable assets.
Recapitalization of ICOUR Limited
1596. We observed that the Company uses short-term bank loans as
working capital to finance the services it provides to the deprived
communities on credit.
Secondly, the Company‟s plant and
machinery and vehicles have exceeded their useful lives and need to
be replaced.
1597. The Company might not be able to repay its short-term bank
loans if the Government does not recapitalise the Company.
325
1598. We recommended that Management seek additional capital
injection from Government of Ghana.
Stock Valuation
1599. We observed that physical stock was taken at the end of every
year; however, the values were not used in the preparation of the
company‟s financial statements. Rather the ledger balances were
used.
1600. Secondly, we noted differences between the system generated
stock balances at the end of the year and the general ledger balances as
follows:
Year
2007
2006
2005
System
Generated
Balances (GH¢)
203,357
168,982
96,299
General
Difference
Ledger
(GH¢)
Balances
(GH¢)
199,021
4,336
129,445
39,537
94,946
1,353
1601. The system therefore generated two different stock balances at
the end of the year.
1602. This implies the valuation of stock might not be reliable.
1603. We advised Management to use the value of physical stock at
the end of the year in the preparation of the financial statements.
Management should also investigate why the system generates two
different values for stock.
1604. According to Management the differences were as a result of
different methods used by the general ledger and the stock modules.
As a result it has therefore reported the anomalies to the software
specialist.
326

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