PUBLIC ACCOUNTS OF GHANA - PUBLIC BOARDS, …

REPORT of the AUDITOR GENERAL on the

PUBLIC ACCOUNTS OF GHANA -PUBLIC BOARDS, CORPORATIONS

AND OTHER STATUTORY INSTITUTIONS

FOR THE YEAR ENDED

31 DECEMBER 2012

To be one of the leadingSupreme Audit Institutions

in the world, deliveringprofessional, excellent, and

cost effective auditing

Our Vision

REPUBLIC OF GHANA

Report of the Auditor-General on the Public Accounts of Ghana – Public Boards, Corporations

and Other Statutory Institutions for the year ended 31 December 2012

REPORT OF THE AUDITOR-GENERAL ON THE

PUBLIC ACCOUNTS OF GHANA –

PUBLIC BOARDS, CORPORATIONS AND OTHER

STATUTORY INSTITUTIONS FOR THE YEAR ENDED

31 DECEMBER 2012

TABLE OF CONTENTS Para Page(s)

Para Page(s)

Introduction 1-4 1

PART I

Summary of significant findings and 5-21 2-6

recommendations

Audit opinion 22-28 6-8

PART II

Summary of findings and

recommendations by Ministries 29-138 9-35

PART III

Details of findings & Recommendations

No. Department Para Page(s)

Ministry of Health

1. Ghana College of Physicians & Surgeons 139-179 36-42

2. Nurses & Midwives Council 180-210 42-48

3. National Health Insurance Authority (NHIA) 211-272 48-60

4. Ghana Aids Commission 273-302 60-69



Ministry of Chieftaincy & Culture

5. Kwame Nkrumah Memorial Park 303-333 69-74

6. National Theatre of Ghana 334-355 74-78

7. Ghana Dance Ensemble 356-368 78-81

8. W.E. Dubois Centre 369-409 81-87

9. Abibigromma Theatre Company 410-421 87-90

10. National Commission on Culture 422-437 90-93

Ministry of Education

11. University of Ghana 438-461 93-99

12. UoG – School of Pharmacy 462-473 99-101

13. UoG – School of Public Health 474-481 101-103

14. UoG – Medical School 482-494 103-106

15. UoG – Central Administration 495-503 106-108

16. UoG – School of Allied Health Sciences 504-512 108-110

17. UoG – School of Nursing 513-521 110-112

18. UoG – Dental School 522-530 112-114

19. Noguchi Memoral Inst. for Med. Research 531-539 114-116

20. Kwame Nkrumah Univ. of Sc. & Techno. 540-567 116-121

21. GIMPA 568-581 121-124

22. GIMPA Executive Conf. Centre (GECC) 582-584 124

23. Accra Polytechnic 585-602 125-128

24. National Service Secretariat 603-668 128-140

25. National Accreditation Board 669-683 141-144

26. University of Education – Winneba 684-702 144-148



Ministry of Lands, Forestry & Mines

27. Office of the Administrator of Stool Lands 703-728 148-153

28. Land Registration Div. of the Lands Comm. 729-756 153-158

29. Public & Vested Lands Mgt. Div. of Lands

Commission 757-768 158-160

Ministry of Justice

30. Law Reform Commission 769-785 160-163

31. CHRAJ 786-822 163-169

Ministry of Interior

32. National Disaster Management Orgn. 823-831 169-171

Ministry of Communication

33. Postal & Courier Services Reg. Comm. 832-849 172-174

Ministry of Energy & Petroleum

34. Ghana National Petroleum Corporation 850-864 175-177

35. Energy Commission 865-887 177-181

36. National Petroleum Authority 888-903 181-184

37. Ghana Grid Company Ltd. 904-914 184-186

38. Takoradi Area Office 915-926 187-189

39. Kumasi Area Office 927-930 189-190

40. Bulk Oil Storage Transp. Co. Ltd (BOST) 931-939 190-192

41. Unified Petroleum Prime Fund 940-948 192-194

42. Energy Commission – Energy Fund 949-957 194-195



Ministry of Finance & Economic Planning

43. Rural & Agricultural Finance Programme 958-976 196-200

44. Venture Capital Trust Fund 977-988 200-202

45. Ghana Cocoa Board 989-1004 202-206

46. Students Loan Trust Fund 1005-1014 206-208

47. Public Procurement Authority 1015-1023 208-210

48. National Insurance Commission 1024-1032 210-212

49. Bank of Ghana 1033-1071 212-219

Ministry of Information

50. Graphic Packaging Limited 1072-1087 220-223

51. Ghana Broadcasting Corporation 1088-1108 223-227

52. Graphic Communication Group Ltd. 1109-1124 228-230

53. National Film & Television Inst. 1125-1133 231-232

54. New Times Corporation 1134-1154 233-236

Ministry of Water Resources Works & Housing

55. Tema Development Corporation 1155-1168 236-239

56. Water Resources Commission 1169-1178 239-241

57. State Housing Company Limited 1179-1193 241-244

Ministry of Trade & Industries

58. Ghana Standards Board 1194-1205 244-246

59. Ghana Heavy Equipment Limited 1206-1221 246-249

60. Ghana Supply Company Limited 1222-1231 249-251



Ministry of Roads & Highways

61. Ghana Highway Authority 1232-1245 251-254

Ministry of Local Govt. & Rural Devt.

62. Northern Regional Poverty Reduc. Prog. 1246-1261 254-257

63. Inst. of Local Govt. Studies 1262-1270 257-259

Ministry of Transport

64. Ghana Airports Company Limited 1271-1283 260-263

65. Ghana Maritime Authority 1284-1294 263-265

Ministry of Food & Agriculture

66. Small Farms Irrigation Project 1295-1311 265-268

Ministry of Environment, Sc. & Technology

67. Soil Research Inst. (CSIR) 1312-1321 269-271

68. Science & Tech. Policy Res. Inst. (CSIR) 1322-1330 271-273

69. Environmental Protection Agency 1331-1341 273-275

70. Inst. of Industrial Research (IIR)-

Council for Science & Indus. Research 1342-1350 276-277

71. Environmental Protection Agency

- National Environmental Fund (NEP) 1351-1363 278-280

72. Forestry Research Inst. of Ghana 1364-1375 280-283

73. Animal Research Institute 1376-1388 283-286

74. Crops Research Institute 1389-1405 286-289



Other Agencies

75. National Pensions Regulatory Auth. 1406-1430 289-294

76. National Devt. Planning Commission 1431-1442 294-296

77. Internal Audit Agency 1443-1453 297-298



Contributors

Ernst & Young

Kwame Asante & Associates

Osei Kwabena & Associates

Asamoah Bonsu & Co.

State Enterprises Audit Corporation

Kuffour & Associates

Egala, Atitso & Associates

Deloitte & Touche

Opoku Andoh & Co.

James Quagraine & Co.

Pannel Kerr Forster

MGI Labban Hyde

ADDS Consult

John Kay & Co.

Johnson Arkaah & Co

Sammy Tsahey & Associates

Morrison & Associates

Baker Tilly Andah & Andah

VT Consult

Odoro, Nyarko & Associates

Benning, Anang & Partners

Akus Consult

Baah & Associates

Boating Offei & Co

Robert Azu & Partners



Ref. No. AG.01/109/Vol.2/62

Office of the Auditor-General

Ministries Block ‘O’

P. O. Box MB 96

Accra

Tel.: (0302) 662493

Fax: (0302) 662493/

(0302) 675496

10 September 2013

Dear Mr. Speaker,




STATUTORY INSTITUTIONS FOR THE PERIOD ENDED

31 DECEMBER 2012

In accordance with Article 187(5) of the 1992 Constitution of

the Republic of Ghana, I have the privilege to submit my annual

report on the Public Accounts of Ghana- Public Boards and

Corporations to you, to be tabled in the House.

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. Mr. Speaker, as part of the structures in place to promote good

governance, encouraging proper and prudent stewardship of the public

purse by Public Boards, Corporations and other statutory institutions

continues to be my priority. Promoting accountability, efficient and

effective use of the tax payers money remain my objective and it is

my hope that a time will soon come when all public servants will

spend resources with the same care exhibited in spending their own

TRANSMITTAL LETTER


and Other Statutory Agencies for the year ended 31 December 2012

income. In this regard, the greatest professional satisfaction for me is

not only the disclosure of errors, waste and losses, but also the

willingness to correct unsatisfactory situations.

4. Mr. Speaker, I look forward to serving Parliament by

conducting independent and high quality audits on all the statutory

accounts. If my office is to play this vital role effectively as expected,

it must be provided with resources to do the job at the right time. 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 for the

execution of the annual audit programme.

6. I also acknowledge the co-operation and support of Chief

Executives and Chief Finan2ce Officers in the course of the audits.

7. Finally, I would like to thank the Public Accounts Committee

for their contributions to good governance and prudent stewardship by

reviewing my reports and reinforcing recommendations to the Public

Boards and Corporations for better financial management.

Yours faithfully,

AUDITOR-GENERAL

THE RT. HON. SPEAKER

OFFICE OF PARLIAMENT

PARLIAMENT HOUSE

ACCRA

Report of the Auditor-General on the Public Accounts of Ghana – Public Boards, Corporations, and 1

Other Statutory Institutions for the period ended 31 December 2012




STATUTORY INSTITUTIONS FOR THE YEAR ENDED

31 DECEMBER 2012

Introduction

The audit of the accounts of Public Boards, Corporations and

other statutory Institutions for the period ended 31 December 2012

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 after examination.

3. I also evaluated the adequacy of the system of internal controls,

compliance with relevant legislations, stated accounting policies and

applicable financial rules and regulations of these organizations.

4. Matters raised in this report are among those which came to my

notice during the period ended 31 December 2012. The observations

and recommendations arising out of the audits were discussed with

managements 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

2 Report of the Auditor-General on the Public Accounts of Ghana – Public Boards, Corporations, and


PART I

SUMMARY OF SIGNIFICANT FINDINGS AND

RECOMMENDATIONS

5. Presented in Table 1 is the financial impact of the irregularities

with Table 2 showing the irregularities according to Sector Ministries.

Table 1: Summary of financial irregularities for the period ended 31

December 2012.

N

o

Type of

Irregularities

% Amount

GH¢

Amount

US$

Total Amount

GH¢

1 Outstanding

Debtors/ Loans/

Recoverable

charges

84.0 1,696,447,138.54 3,325.00 1,696,453,352.63

2 Cash Irregularities 5.8 114,953,516.99 745,455.00 116,346,697.84

3 Payroll

Irregularities

- 251,805.19 - 251,805.19

4 Procurement

Irregularities

2.5 50,492,451.95 - 50,492,451.95

5 Tax Irregularities 0.1 1,072,001.80 - 1,072,001.80

6 Stores

Irregularities

- 629,683.13 - 629,683.13

7 Contract

Irregularities

7.6 60,497,496.22 50,000,000.00 153,942,496.22

Total 100 1,924,344,093.82 50,748,780.00 2,019,188,488.76

6. Table 1 shows that the irregularities in monetary terms totaled

GH¢2,019,188,488.76 which include US$50,748,780.00 that was

converted into cedi at the prevailing exchange rate of GH¢1.8689 to

the US$1 as at 31 December 2012. My comments on the irregularities

are provided in the succeeding paragraphs.

Rep

ort

of

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itu

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the p

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1 D

ecem

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Tab

le 2

: S

um

mary

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Fin

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Irre

gu

lari

ties

acc

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roll

Irreg

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Irreg

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s G

H¢

US

$

GH

¢

US

$

GH

¢

GH

¢

GH

¢

U S$

GH

¢

GH

¢

US

$

Min

of

Hea

lth

298

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6,3

16

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- 1

1,8

94

,951

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- 6

,639

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31,2

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27,4

61

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- -

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83,8

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Outstanding debts/loans/recoverable charges –

GH¢1,696,453,352.63

7. These irregularities represent trade debtors, staff debtors and

outstanding loans. Absence of debt collection policy or credit

controller to retrieve the debt and managements apathy towards loan

recovery contributed significantly to the anomalies. Also improper

maintenance of records on debtors, absence of debtors aging analysis,

no documentation on loan agreements stipulating the terms and

conditions, failure to ensure that loans are repaid and managements

non compliance with rules and regulations accounted for these

irregularities.

8. I recommend that management of Public Boards, Corporations

and other statutory Institutions should strictly adhere to rules and

regulations pertaining to debts. They should put in place proper

policy on granting of loans and should ensure that adequate measures

are put in place to ensure repayment of loans on due dates to avoid or

mitigate the occurrence of bad debts.

Cash irregularities – GH¢116,346,697.84

9. Cash irregularities comprise misapplication of funds, over

estimation of funds needed, outstanding imprest, payments not

authenticated and cash shortages. These occurred as a result of poor

supervision, lack of control, management’s failure to review approved

budgets and failure of paying officers to demand receipts for

payments made. They also arose as a result of accountants’ failure to

properly file and keep records, management’s failure to ensure the

security and safety of vital documents, non monitoring of customers

payment schedules non maintenance of returned cheques register and

the lax of management in ensuring that accountants adhere to the

stipulation of the Financial Administration Act and other relevant

regulations coupled with poor accounting system.

10. I therefore urge management of Public Boards, Corporations

and other statutory Institutions to strengthen supervisory controls over

Accountants and ensure they adhere to the stipulations of the

Report of the Auditor-General on the Public Accounts of Ghana – Public Boards, Corporations, and 5 Other Statutory Institutions for the period ended 31 December

Financial Administration Act and other relevant regulations. I also

recommend authentication of all payment vouchers, review of

approved budgets and prompt retirements of imprest.

Payroll irregularities – GH¢251,805.19

11. These lapses were caused by failure of management to exercise

due diligence and failure of officers in charge of payroll to review

payment vouchers to ensure that salaries were paid to only those who

were entitled.

12. They were also caused by management’s failure to notify

bankers to stop payments of unearned salaries. They mostly comprise

payments of unearned salaries to separated staff, non-payment to chest

of unearned salaries and payment to staff members who were not

entitled to receive those salaries.

13. I advise management of the affected institutions to promptly

notify bankers of separated staff to withhold and pay to chest all

unearned salaries. I also recommend that officers in charge of payroll

should exercise due care in the discharge of their duties.

Procurement irregularities – GH¢50,492,451.95

14. These irregularities occurred as a result of management

procuring goods and services without recourse to procurement

committees of the various institutions and going contrary to the

provision of the procurement Act.

15. I once again recommend that management of the respective

institutions should transact procurement dealings strictly in

accordance with the provisions of the Public Procurement Act, 2003

(Act 663).

Tax irregularities – GH¢1,072,001.80

16. Tax irregularities relates to misapplication of tax revenue,

failure to pay statutory deductions on due dates as required by law and

non- adherence to provisions in the tax laws. They also relate to

transacting of business with non VAT registered persons.



17. I recommend that Finance Officers should strictly adhere to the

tax laws to ensure that all tax revenue are promptly collected and paid

to the responsible revenue agencies.

Stores irregularities – GH¢629,683.13

18. These irregularities include, non documentation of store items

and fuel not accounted for, resulting from absence of store ledgers,

lack of awareness of officers assigned to store duties, inadequate

supervision, deficient and improvised log books and managements

failure to procure records.

19. I recommend the strengthening of controls over store items,

improved supervision and procurement of store ledgers. I also

recommend the training of officers assigned to store duties and the

strict adherence to the store regulations and Financial Administration

Regulations.

Contract irregularities - GH¢153,942,496.22

20. These mainly relate to non-performance of contract, variations

of conditions of contract without following procedures, non-

specification of mode of payments and the failure to deliver in

contract agreements and ineffective control over contracts.

21. 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.

AUDIT OPINION

22. Most of the financial statements submitted for validation were

prepared under generally accepted accounting principles and my

office was satisfied in all material respects that the 96 audited

financial statements complied with the Ghana Accounting standards

and relevant legislation. In my opinion they presented a true and fair

view of the financial position and performance of the organizations.


Accounts submission

23. In the year 2012, two out of a total of 74 Public Boards and

Corporations audited, failed to submit their financial statements at the

time of writing this report. As such I am unable to report on the

current status of the two defaulting organizations to provide

accountability assurance to Parliament.

24. The failure by organizations to prepare financial statements

stifles effective planning and decision making by stakeholders.

25. Once again, we noted that, the lack of accounting knowledge

by some accounting officers, staff constrains, apathy of some Chief

Executives and the failure of some governing Boards of these

organisations to ensure the preparation of the accounts caused delays

in the submission of financial statements or their non-submission.

26. There is still the need for organizations to improve upon their

processes for preparing their financial statements and annual reports

and pay more attention to compliance with the submission deadline of

31 March each year.

27. As stated in my previous reports, to enhance accountability and

timely stewardship of public funds, I recommend that Sector Ministers

as a matter of urgency should take remedial measures to ensure that

Public Boards, Corporations and Statutory Institutions:

Fill the position of Heads of Accounts Units, with personnel

with the requisite skill and experience;

Install computerized accounting software to accelerate the

production of financial statements for audit;

resource their accounts departments to enable them clear

the back log of outstanding accounts and submit them for

audit by 31 December 2012;

Ensure that governing Boards are responsive to their role;



Sanction any Chief Executive who fails to prepare and

submit for audit the organization’s financial statements by

the 31 March deadline; and

Sanction any official whose inaction resulted in these and

future irregularities to serve as a deterrent to others.

Conclusion

28. The operational result and financial positions of the Public

Boards, Corporations and other Statutory Institutions during the year

under review, could have been healthier if there had been effective

supervision of schedule officers. I reiterate my advice to management

to strengthen their Internal Audit Units to support and ensure sound

financial practice in accordance with the Internal Audit Agency Act

2003, (Act 658). I also recommend that management should institute

or strengthen the Audit Report Implementations Committees within

the organizations in accordance with Section 30 of the Audit Service

Act 2000 (Act 584) to ensure that recommendations made in this

report are duly implemented.


PART II

SUMMARY OF FINDINGS AND

RECOMMENDATIONS BY MINISTRIES

MINISTRY OF HEALTH

GHANA COLLEGE OF PHYSICIANS AND SURGEONS

29. We noted differences between figures in the draft financial

statements and the underlying records of the College. Expenditure

figures in the financial statement did not match actual expenditure

recorded in the cash book, hence making the statements misleading.

We referred the financial statements to the Accounts Officer to effect

the necessary corrections and re-submit them for validation, which has

not been done.

30. Eleven payment vouchers amounting to GH¢10,533.91 were

not presented for audit. We recommended that, the head of accounts

produces the payment vouchers for our examination or consider the

payments disallowed and the total amount refunded to the College’s

account. Management should also improve upon the filing and

custody of records.

31. Payments valued at GH¢4,508.78 were without official receipts

from suppliers of goods and services for authentication. We

recommended that the Accountant should obtain the official receipts

from the organizations involved and our office notified for

verification. Failure of which the Accountant should be surcharged

with the amount involved.

32. The Hospitality Section of the College made payments outside

Ghana amounting to GH¢141,885.12 without approval of the

Controller and Accountant General and prior approval of the Minister.

We recommended that management comply with the tenets of the

regulation and should in future seek the approval of the Controller and

Accountant General and the Minister before foreign payments are

made.



33. Management withheld taxes totalling GH¢16,507.00 in

contravention of Section 87(1) Part X of the Internal Revenue Act

2000. We recommended to management to remit the amount involved

without further delay.

34. Various items worth GH¢20,321.13 purchased during the

period under review did not pass through store records. To avert

diversion and other stores irregularities, we recommended that all

future purchases should be routed through stores to provide an

effective audit trail thereby ensuring accountability.

35. An unearned salary and allowance of GH¢5,891.80 was paid to

Freda Ocansey for the period of July and August 2011, after she had

resigned on 20 June 2011 due to management’s failure to ensure the

stoppage of her salary. We recommended that the amount of

GH¢5,891.80 be retrieved from Freda Ocansey and the Administrative

Manager sanctioned for his inaction.

36. An amount of GH¢57,613.23 was paid as salary arrears to

Benjamin O. Andoh who was dismissed and later re-instated from the

non tax revenue without approval from the Ministry of Finance. We

recommended that the amount of GH¢57,613.23 should be recovered

into the College’s account through the Controller and Account

General’s Department since the expenditure was salary related.

37. No environmental permit was obtained before operating the

hospitality section which led to the payment of an unbudgeted penalty

fees of GH¢1,000.00 to the Environmental Protection Agency. We

recommended that in future the appropriate authorities should be

consulted before setting up any business.

38. Though the College had an Audit Report Implementation

Committee (ARIC) as required by Section 30 of the Audit Service Act

2000 (Act 584), most of the recommendations made in the previous

audit report were not implemented because the committee was not

responsive to its role. We recommended that management should

ensure that the ARIC performs its function as required by law.


NURSES AND MIDWIVES COUNCIL

39. An amount of GH¢2,000,000 released in July 2011 for the

completion of the suspended Office complex has been invested in

Treasury Bills instead of continuing with the project. We

recommended that management should apply laid down procedures

and abrogate the contract for non-performance and re-package the

remaining works for tendering and award to a competent contractor.

40. The Council paid an amount of GH¢31,222.80 to M/S Western

Automobile Center Ltd. in August 2009 for the supply of one Nissan

Urvan bus. As at the time of writing, the Company was yet to supply

the vehicle. The Council risks losing this money if not pursued. We

recommended that strenuous effort should be made to recover the

amount from the company.

41. The Council failed to remit Pay-As-You-Earn (PAYE) and

Social Security deductions of GH¢9,196.96 made from contract

(temporal) employees’ salaries for the period under review to the

appropriate authorities. Additionally, an amount of GH¢17,677.15 of

the statutory deductions which had accumulated over the years were

yet to be paid. The practice deprived the state of accrued tax revenue

and the employees were also denied the right of saving towards their

pension. We recommended that the accumulated statutory deductions

totalling GH¢26,874.11 should be remitted to the appropriate

authorities immediately to avoid penalties and employees’ losses.

NATIONAL HEALTH INSURANCE AUTHORITY

42. Levies collected by the Value Added Tax (VAT) service and

Social Security and National Insurance Trust (SSNIT) on behalf of

NHIA Scheme were not ceded to the Authority on time. As a result

CAGD owed a total amount of GH¢113,065,642 and

GH¢185,543,194.77 for 2008 and 2009 respectively and could

adversely impact on the smooth running of the Authority’s operations.

We recommended that management should consistently monitor the

remittances from the Revenue Agencies as well as the CAGD to



ensure that revenue accruing to the Health Insurance Fund are

remitted to the NHIA as and when they are due in accordance with the

provisions of Act 650.

43. Management failed to withhold the required 5% tax on

payments made for works and services totalling GH¢146,503 resulting

in a loss of tax revenue of GH¢7,325 accruing to the state. We

recommended that management should adhere to Section 88(1) of

Act 592 which requires withholding tax agencies to be held liable and

pay to the Commissioner any withheld tax and advised future

compliance with Section 84(2) of Act 592 for the avoidance of

penalties.

44. Some receipts obtained totalling GH¢131,409 in 2008 and

2009 from Samatra Hospital, a service provider for claim payment to

them had a different name as Samatra Hospital staff Welfare

Association rather than Samatra Hospital. We recommended that

internal control in cash management be strengthened. Also,

management is advised to take the appropriate legal actions against

the officials involved in this act to retrieve the misappropriated funds.

45. A total amount of GH¢56,418 was disbursed to various

facilities without the approval of the Board or District Co-ordinator.

We recommended that management should ensure that appropriate

levels of authorization and approval are sought before payments are

effected.

46. We observed a difference of GH¢1,166,183 between revenue

reported by the Denu Scheme as transfer from Head office and the

amount reported by the Head office as transfers to the scheme. We

recommended that these differences should be investigated and the

required remedial action taken.

47. We did not sight Gambaga Mutual Health Insurance Scheme

receipts of an amount totalling GH¢70,295 being payment made to

some service providers in 2008. To prevent disputes which might


result in double payment, we recommended that management should

ensure that receipts are obtained after every payment. All supporting

documents should also be attached to payment vouchers raised.

48. An amount of GH¢158,526 purported to have been transferred

by the NHIA to the Nanomba North Mutual Health Scheme could not

be traced to the bank statement of the scheme. We recommended that

head office liaises with the scheme to have this difference investigated

and reconciled. Also, the officer in charge of the transfer of the funds

must be held liable if the loss of funds is established.

49. GH¢900,000 was withdrawn from the claims account of the

Oguaaman Mutual Health Insurance Scheme and deposited into a

purported investment account. However, no evidence of the

investment of this amount was made available for our review. We

recommended that management should ensure that these transfers are

followed up to where ever they have been invested. All investments

and interest accrued must be retrieved and paid into the scheme

account. We also recommended that in the event of any losses the

responsible officials should be held liable.

50. An amount of GH¢617,393 purported to have been transferred

from the NHIA to Wa Municipal Mutual Health Insurance Scheme

could not be traced in the scheme’s cash book and bank statements.

We recommended that regular reconciliation should be done between

the Authority and the Scheme to rectify such differences and the

officer in charge of the transfers must be held liable for any losses.

51. The Authority had made a total payment of GH¢3,598,750 on

behalf of some Mutual Health Scheme providers for some claims over

the period under review. However, these amounts were not accounted

for by the schemes. We recommended that the NHIA should always

advice the schemes of any payments made to any service provider on

behalf of the schemes. The procedure for direct payment of claims to

service providers should be streamlined such that the process is

initiated from the schemes.



52. We noted during our review a difference of GH¢2,482,130

between transfers recorded by Bantama Mutual Health Insurance

Scheme and the NHIA. The amount reported by the NHIA as

transferred to the scheme did not agree with the receipts verified at the

scheme. We recommended that the NHIA and the management of the

Bantama NHIS liaise to investigate this difference and have them

reconciled. Any losses should be accounted for by the responsible

officials.

53. Claims paid to some service providers amounting to

GH¢246,418 were made prior to vetting of the claims. We

recommended that measures be put in place to ensure claims are fully

vetted before funds are paid out so as to promptly identify and correct

any anomalies. The NHIA should also put in place measures to ensure

there are no undue delays in the payment of claims that would

necessitate the payment of claims in advance pending the vetting

process.

GHANA AIDS COMMISSION

German International Cooperation (GIZ)

54. Management of the Project failed to withhold taxes totalling

GH¢1,072 from payments made to suppliers of goods and services. To

improve inflows into the Consolidated Fund, we recommended that

management should comply with the relevant provisions of the tax

law; otherwise responsible officers would be surcharged accordingly

for any future losses.

Ghana Employers Association (GEA), Accra

55. Payment vouchers totalling GH¢2,809 were not signed by the

recipients to acknowledge the receipt of the payment. We therefore

advised management to ensure that these and subsequent payments are

receipted by beneficiaries otherwise the paying officer should be held

liable for a refund.


MINISTRY OF CHIEFTAINCY AND CULTURE

KWAME NKRUMAH MEMORIAL PARK

56. Cash payments ranging between GH¢1,050.00 and

GH¢3,519.58, amounting to GH¢195,981.50 was made to suppliers of

goods and services during the two years under review resulting in the

loss of GH¢9,799.08 in withholding tax revenue. We recommended

that management should desist from the practice, failing which

culpable officers would be surcharged with any future loss of tax

revenue.

57. The Accountant failed to produce the bank statements for

Internally Generated Funds (IGF) amounting to U$455.00 allegedly

lodged at Bank of Ghana (BoG) between May and July 2010 and

reported as revenue in the 2010 financial statement for confirmation.

We recommended to management to communicate with BoG and

confirm the existence of the account and our office informed for

verification.

58. Special imprest amounting to GH¢5,700.00 advanced in

November 2010 and September 2011 to Officers for NAFAC 2010

and 2011 Founder’s day celebration respectively have not been retired

as at the time of reporting. We advised the Accountant to ensure full

retirement of the imprest or the Officers be made to refund the various

amounts given to them.

59. Purchases totalling GH¢146,499.66 were made without

obtaining at least three quotations from suppliers. We advised that in

future, management should either seek prior approval from the Public

Procurement Board before engaging in single source procurement or

obtain at least three different quotations for the selection of the most

responsive quote to obtain transparency and fair pricing.

60. Management transacted businesses totalling GH¢146,497.66

with non-VAT registered suppliers. The act deprived government of

GH¢21,974.64 in VAT revenue. We advised management to strictly

adhere to the provisions of Act 654.



NATIONAL THEATRE OF GHANA (NTG)

61. Withholding taxes amounting to GH¢2,720.43 have not been

paid to the Commissioner, Domestic Tax Revenue Division (DTRD)

of the Ghana Revenue Authority (GRA). We also noted under

deduction of withholding tax of GH¢742.50 on sitting allowances paid

to Board members. To improve inflow of funds into the Consolidated

Fund, we advised management to ensure that the total tax of

GH¢3,462.50 is paid to the DTRD without delay and also put in place

arrangements to recover the amount of GH¢742.50 from the Board

members.

62. Payment vouchers valued at GH¢21,753.85 supposedly raised

for activities within the period under review were not presented for

authentication. Management was advised to ensure that the payment

vouchers are provided together with the supporting documents for our

verification or the amount treated as unjustified expenditure and

recovery made accordingly.

63. Fuel worth GH¢3,800.00 allegedly issued to the driver of

vehicle No. GR 2019 T for official use could not be accounted for as a

result of non-maintenance of a log book. We recommended that

management should procure a vehicle log book for the above

mentioned vehicle and ensure that details of fuel issued are duly

recorded by the driver and officers using the vehicle to certify

journeys undertaken to ensure accountability and efficient use of fuel.

Meanwhile, management should ensure that the fuel amounting to

GH¢3,800.00 is accounted for, failing which the amount should be

recovered to NTG’s bank account.

GHANA DANCE ENSEMBLE

64. Fuel coupons amounting to GH¢2,260.00 issued to vehicle

number GT1862 Y for official use, were not fully accounted for in the

drivers log book. We recommended that, adequate control measure


should be instituted to ensure that fuel usage is properly managed for

the benefit of the Ensemble.

W. E. DUBOIS CENTRE

65. Management made cash instead of cheques payments

amounting to GH¢152,827.35 in settlement of its obligations. This

practice resulted in the loss of GH¢7,641.37 in withholding tax

revenue. We recommended to management to desist from the practice

and adhere to the provision of the FAR.

66. The Accountant made payments amounting to GH¢52,529.57

to various suppliers and service providers without obtaining official

receipts. We could therefore not determine whether the intended

beneficiaries received the amount involved. For proper accountability

and transparency in the utilisation of public funds, we advised

management to ensure that the paying officer obtains the receipts for

these and subsequent payments, failing which the amount should be

recovered.

67. The Cashier could not account for non tax revenue of

GH¢404.00 and $687.38 collected during the period reviewed,

depriving the Centre of the use of the money. We advised

management to recover the amounts from the Cashier and improve on

internal controls and managerial reviews to prevent a recurrence of the

anomaly.

68. Management failed to remit to the Domestic Tax Revenue

Division (DTRD) of the Ghana Revenue Authority (GRA) taxes

amounting to GH¢566.63 withheld from payments totalling

GH¢11,332.60 made to suppliers of items purchased. In another

development, two companies were paid a sum of GH¢50,070.00 for

which the withholding tax of GH¢2,503.50 was not deducted. We

recommended to management to ensure prompt recovery of the tax

and payment of all withheld taxes in order to contribute to the revenue

generation drive of the state and to avoid sanctions.



69. Management transacted business totalling GH¢22,668.49 with

non-VAT registered suppliers, depriving the state of VAT revenue

amounting to GH¢3,400.27 as a result. We advised management to

adhere to the provision of Act 654.

70. Management’s failure to promptly inform the Controller and

Accountant General’s Department for the stoppage of the salary of

Mr. Ayang Oliver who retired on 4 May 2011 resulted in the payment

of unearned salary of GH¢358.26. We advised prompt recovery of the

amount from the ex-employee or his bankers to government chest.

71. The Centre’s official drivers failed to record fuel worth

GH¢1,181.00 purchased in their respective vehicle log books. We

recommended strict supervision over drivers and the prompt logging

of fuel purchased for the official cars.

ABIBIGROMMA THEATRE COMPANY

72. Due to management’s failure to immediately notify the

Controller and Accountant General’s Department (C&AGD) to delete

the names of separated staff from the payroll, two former employees

were paid a total of GH¢3,128.94 as unearned salaries contrary to

Regulation 298 of L.I. 1802. We recommended that management

recover the amount from the affected officers and lodge same into the

consolidated fund, failing which the amount involved should be

surcharged to the spending officer.

NATIONAL COMMISSION ON CULTURE

73. Goods and services worth GH¢20,496.00 were purchased from

non VAT registered persons which resulted in the loss of

GH¢3,074.40 in VAT/NHIL revenue accruing to the state. We

advised management to comply with the dictates of the above cited

regulation; otherwise defaulting officers would be surcharged with

any loss of government revenue in future.


74. Though vehicle log books were allocated to pool vehicles,

drivers failed to record fuel coupons worth GH¢1,250.00 issued for

official use as a result of lax supervision. To ensure judicious use of

fuel, we recommended that the Transport Officer should step up

supervision and the drivers made to account for the fuel coupons

failing which the amount should be recovered into the Commission’s

bank account.

MINISTRY OF EDUCATION

UNIVERSITY OF GHANA

VOLTA HALL

75. Visiting Professor at the Department of Modern Languages

was hosted by the Hall in 2008. The total rent charged amounted to

US$3,352 as at 30 June 2008. However, the rent due had still not

been settled as at 31 December 2009. We recommended that

management of the Hall should follow up to the Department of

Modern Languages and ensure that the rent due is settled.

Institute of Statistical Social and Economic Research

76. The Institute failed to withhold taxes amounting to GH¢3,303

on allowances paid to research assistants, members of staff and other

personnel engaged by the Institute to work on their projects. We

recommended that withholding taxes should be deducted from all

payments made to officers and the deducted taxes paid to the Internal

Revenue Service.

Basic School

77. Pupils indebtedness to the school amounted to GH¢53,202 as at

31 December 2009. We recommended that management of the school

should ensure that arrears of fees are collected promptly from fee

defaulters before final examinations are written. Also, overdue and

doubtful debts should be written off.



Guest Centre

78. A total amount of GH¢169,922 was owed the Centre as at 31

December 2009. Out of this amount three (3) Units of the University

constituted about 50% of the total debts owed the Centre. We

recommended that management should expedite action on the

recovery of the debts to enhance the Centre’s liquidity position.

KWAME NKRUMAH UNIVERSITY OF SCIENCE

AND TECHNOLOGY

College of Art and Social Science

79. A total of GH¢41,724 advanced to staff members of the various

faculties to organize specific programs had not been accounted for.

We advised management to ensure that efforts are made to get the

officers concerned to account for the advances and/or refund them

through their monthly salary deduction.

Basic School

80. An amount of GH¢40,400 was used to buy assorted exercise

books from the University Printing Press to be distributed to the basic

schools. However, we were unable to confirm whether the said

amount had been used for their intended purpose because our request

for the list showing how the distribution was made proved futile. We

recommended that management as a matter of urgency, investigate

this issue and establish procedures to avert future occurrence.

81. Additionally, loans totalling GH¢1,885 have been given to the

Students’ Representative Council (SRC) at the Provost’s office and no

effort was made for the repayment of the loan. We therefore advised

management to retrieve the amount from the SRC.

ACCRA POLYTECHNIC

82. An officer who resigned on 1 August 2011 had his name

deleted from the payroll on 1 January 2012, a delay of five months

which resulted in the payment of unearned salaries of GH¢3,035.44.


We recommended that efforts be made by management to recover the

total amount of GH¢3,035.44 from the ex-employee, pay same to

Government chest and obtain a Treasury Receipt for our verification.

83. Two officers who were granted three years study leave each

with pay failed to serve the required five-year bond term before

leaving the School. The officers also failed to refund a total of

GH¢109,559.32 being salaries and allowances paid them while

studying in contravention of the bond requirements. We recommended

to management to take the necessary steps to recover the amount with

interest at the prevailing bank rate from the officers or their guarantors

and pay same to government chest without further delay.

NATIONAL SERVICE SECRETARIAT

84. Management failed to refund to chest a total amount of

GH¢49,679,748.05 representing excess funds released for payment

of personnel allowances and overpayment of allowances recovered

contrary to Regulation 45 of the Financial Administration Regulations

( FAR) 2004 (L.I 1802). We recommended that the above stated

amount and future overpayment recoveries should be paid to chest

without any further delay. At the instance of the audit a request was

made to the Controller and Accountant General for an account number

for payment of the excess funds.

85. We did not sight the payment vouchers for 122 payments

totalling GH¢1,314,173.01. Such act undermines controls provided

for in disbursement of funds. We recommended that management

produce the payment vouchers or the responsible officials should

refund the amount involved into the Secretariat’s account.

86. Forty-one payment vouchers totalling GH¢218,074.78 were not

properly acquitted with adequate and appropriate documentations. The

occurrence was due to the Accountant’s failure to ensure that payment

vouchers were supported with the relevant documents for

authentication. We recommended that the Accountant produces the

necessary documents or refund the amount involved into the

Secretariat’s account.



87. Imprest totalling GH¢409,292.35 granted to members of staff

to run various programmes was not accounted for even though the

programmes had been completed. This was made possible because no

measures had been put in place to enforce the prompt retirement of

imprest. We recommended that the officers involved should be made

to account for the moneys received without any further delay or the

amount should be adjusted to the personal accounts of the imprest

holders in accordance with Section 288 (1) of FAR.

88. Management failed to promptly remit withholding taxes of

GH¢9,527.12 to the Domestic Tax Revenue Division (DTRD) of the

Ghana Revenue Authority (GRA). We recommended that

management adhered strictly to the above stated regulation and remit

the amount and any future tax withheld without delay to the

Commissioner of the DTRD for the avoidance of penalties.

89. Goods worth GH¢66,206.00 were procured by single sourcing.

We also noted instances where purchases were not supported with

relevant documents among other irregularities. We recommended that

management complies strictly to the laid down procedures as the non-

compliance with relevant provisions of Act 663 blurs transparency

and could compromise value for money.

90. A contract awarded for the printing of ‘T’-shirts worth

GH¢30,400.00 was fragmented into nine lots and awarded to one

contractor thus circumventing the procurement procedures. We

recommended that management comply strictly with the Procurement

Act in order to obtain value for money in its procurement dealings.

91. Procedures for variation of contract were not fully complied

with as a water bottle project awarded at an initial cost of

GH¢472,672.80 was irregularly varied to GH¢856,597.67. The

variation which represented 81% of the original contract amount was

attributed to additional works. We recommended that the additional

works should be repackaged separately and awarded in accordance

with the existing laws.


92. Incomplete records were maintained for the Farm Projects.

Consequently, out of a total amount of GH¢593,744.23 invested in the

farms, management produced records to account for an amount of

GH¢82,741.86 leaving a balance of GH¢511,002.37 unaccounted for.

We also noted that management failed to carry out feasibility studies

to inform the investments in the farms. We recommended that in

future, management should ensure the viability of projects before

sinking funds into them. We also advised management to comply with

FAR 1, prepare and present the consolidated farm account for audit.

We further advised management to in future maintain proper records

and books of accounts on the farm to avert such recurrences.

NATIONAL ACCREDITATION BOARD

93. A contract signed with Somuah Information Systems Company

Limited on 24 December 2010 for the design, development and

implementation of a comprehensive Accreditation Management

Information System (AMIS) which was to be completed by 13 June

2012 was 40% complete as at 31 June 2012. To forestall any

consequential cost overrun, we recommended that management

should urge the consultant to come out with a stringent time table for

the early completion of the work, failing which cost fluctuations

should be borne by the company.

UNIVERSITY OF EDUCATION WINNEBA

94. Student debtors from Kumasi and Accra Centers totaled

GH¢108,458 for the period reviewed. We recommended that

management should write to all student debtors to pay their debts or

withhold their certificates till their debts are paid.

MINISTRY OF LANDS, FORESTRY AND MINES

OFFICE OF THE ADMINSTRATOR OF STOOL LANDS

95. A revenue collector, Mr. Richard Anin Mensah was interdicted

and surcharged with GH¢2,500.00 in 2010 for printing and using fake



receipt books in the collection of revenue resigned in September 2011

without paying the amount. We recommended that management

should conduct a thorough investigation into the case, institute

measures to forestall a recurrence and recover the amount of

GH¢2,500.00 from the defaulting revenue collector.

96. Seven revenue collectors delayed for periods ranging between

12 and 199 days in paying revenue of between GH¢108.50 and

GH¢160,670.72 collected to the Chief Collector in contravention of

FAR 15(1). To forestall revenue leakage, we recommended that

management should step up supervision over revenue collection and

ensure that the Revenue Collectors comply with the provision of the

financial regulation stated. We also recommended that interest at the

prevailing bank rate be charged against defaulting officers as

disciplinary action to prevent any future delays and to serve as a

deterrent to others.

97. Due to delayed deletion of names from the payroll, 16

separated staffs were paid unearned salaries totalling GH¢41,431.81

during the period under review. We recommended that efforts be

made by management to recover the unearned salaries to Government

chest and produce evidence to confirm the refund.

LAND REGISTRATION DIVISION OF THE

LANDS COMMISSION

98. Management extended the service period of 14 national service

personnel to December of the two years reviewed without approval

from the Commission thereby incurring an unbudgeted cost of

GH¢11,703.72 being allowances paid them. In order not to throw the

budget of the Division into disarray, we recommended that in future,

management should budget for and seek approval from the

Commission for the engagement of temporary staff.

99. Management engaged in single source procurement of goods

and services amounting to GH¢13,738.81. We advised management to


comply with the dictates of the PPA to ensure fairness, transparency

and value for money in its procurement dealings.

100. Our audit revealed that management procured goods worth

GH¢5,322.00 from non-VAT registered entities. This resulted in the

loss of GH¢798.30 in VAT/NHIL revenue. We recommended to

management to comply with the provision of the above stated

regulation.

101. The storage facility for land documents was not spacious,

leaking and had neither fire extinguishers nor emergency exit. We also

noted that due to lack of shelves or cabinets, some of the documents

were kept on the bare floor making retrieval for referencing very

difficult and exposing them to fast deterioration. To ensure efficiency

as well as safeguard the documents, we urged management to make

provision in future budgets for funds to acquire a bigger

accommodation with the necessary facilities for the records room.

Meanwhile, management should provide shelves or pallets for the

documents on the bare floor to be arranged.

PUBLIC AND VESTED LANDS MANAGEMENT DIVISION

OF LANDS COMMISSION (PVLMD)

102. Disbursements totalling GH¢282,555.00 were made without

the necessary supporting documents for authentication. As the

anomaly could lead to illegitimate payments, we urged management

to desist from the practice and ensure that the payments are supported

with relevant documents, failure which the authorizing and paying

officers should be surcharged with the amount involved.

103. Management contracted East Legon Lodge to provide hotel

accommodation services to the Commission without competitive

tendering. We advised management to desist from the practice and act

in accordance with the dictates of Act 663 in order that value for

money would be obtained in its future procurement dealings.

104. Contrary to the provisions of the Audit Service Act , 2000 (Act

584), the Commission had not established an Audit Reports



Implementation Committee (ARIC) to implement recommendations

of audit and other monitoring reports. We advised that an ARIC

should be constituted immediately.

MINISTRY OF JUSTICE

LAW REFORM COMMISSION

105. Purchases amounting to GH¢5,228.00 were made from a non-

VAT registered person. Consequently, VAT/NHIL revenue of

GH¢784.20 was lost to the state. We recommended that in future, all

purchases should be made from VAT registered persons; otherwise

officers responsible for the loss of revenue would be surcharged with

the amount involved.

106. Drivers failed to record fuel amounting to GH¢986.00 in

respective vehicle log books in contravention of Store Regulation

1604 as a result of laxity in supervision. We recommended effective

supervision over drivers and strict compliance with the store

regulation cited. We also advised management to ensure that the

drivers account for the unlogged fuel; failing which the amount should

be recovered from them.

COMMISSION ON HUMAN RIGHTS AND

ADMINISTRATIVE JUSTICE (CHRAJ)

107. Imprest totalling GH¢22,512.00 granted to five officers of the

Commission to run various programmes were neither retired nor

adjusted to their personal account even though the programmes had

long been executed. To forestall unspent imprest being held up by

imprest holders to the detriment of the Commission, we recommended

that the officers involved be made to account for the imprest taken or

the amounts be adjusted to a personal advance account in their names

as stipulated by Regulation 288 of the FAR,2004 (L.I. 1802).


108. Notwithstanding our previous audit recommendation coupled

with the Controller and Accountant General’s directives, the

Commission failed to refund to government chest an amount of

GH¢89,551.79 resulting from overstatement made in request for funds

for the payment of personnel emolument. Management was advised to

refund the amount without any further delay. We also recommended

to management to ensure that henceforth, accurate data is submitted

for the release of funds to prevent a recurrence, otherwise the

responsible officers would be held liable for a refund of the excess

funding.

109. Management circumvented provisions of the PPA, 2003 (Act

663) in the procurement of the accommodation for its Commissioner.

We recommended that management should be circumspect and adhere

to the dictates of the PPA in such future transactions to avoid waste

and for programme objectives to be achieved.

110. Out of the total 5% withholding tax of GH¢88,529.00 for the

three year period reviewed, management remitted only GH¢36,145.00

to the Domestic Tax Revenue Division (DTRD) leaving a balance of

GH¢52,384.00. We urged management to pay the outstanding tax and

ensure prompt and regular payments in future.

111. Various purchases amounting to GH¢34,994.89 were not

routed through stores before use in violation of Store Regulation

0502. For accountability of stores, we recommended that supervision

must be strengthened and the storekeeper should keep proper records

on the Commission’s receipts and issue of items purchased.

112. Though management had constituted an Audit Reports

Implementation Committee (ARIC) in accordance with Section 30 of

the Audit Service Act 2000 (Act 584), the Committee was apparently

inactivate as we could not obtain minutes of its meetings for our

review. For prompt implementation of recommendations in audit and

other monitoring reports, we recommended that the ARIC should be

made more responsive to its functions.



MINISTRY OF COMMUNICATIONS

POSTAL AND COURIER SERVICES REGULATORY

COMMISSION

113. The Accountant withheld a total amount of GH¢6,924.64 from

payments made to suppliers of goods and services which was yet to be

remitted to the Domestic Tax Revenue Division (DTRD) of the Ghana

Revenue Authority (GRA). We also noted that tax amounting to

GH¢3,147.21 were not withheld on allowances paid to

Commissioners and staff of the Commission. These lapses deprived

the state of tax revenue for its programmes. We recommended that the

tax revenue should be paid to the DTRD GRA without delay.

MINISTRY OF ENERGY

GHANA NATIONAL PETROLEUM CORPORATION

114. Our review of trade debtors revealed that there is a dispute over

an amount of GH¢2,125,347 owed by Sage Petroleum Limited to

GNPC. We advised management of GNPC to follow up on an appeal

made to the National Petroleum Authority (NPA) for arbitration and

take the necessary action to recover the debt in order to save the

Company from any financial distress.

ENERGY COMMISSION

115. An amount of GH¢135,000 was paid to a Landlord in respect

of Land for office building at Tesano by the Commission. However,

the deal to acquire the land did not go through and the amount is yet to

be refunded. We recommended that effort should be made to recover

the amount from the land owners so that it could be used to meet other

operational activities of the Commission.


116. An amount of GH¢5,121 owed by former staff of the

Commission had seen no movement for several years. We

recommended that efforts should be made to recover the debts from

the affected persons and in future measures should be put in place to

avert such recurrences of losing public funds.

117. An amount of GH¢150,000 was released by the Ministry of

Energy to the Commission to meet its budgetary requirements

following a request by the Commission. This amount has been in the

books since 2009 and no effort has been made to pay back. We

recommended that a follow-up should be made to the Ministry to

confirm the status of the amount to enable appropriate action to be

taken for fair reporting so as to enhance decision making.

NATIONAL PETROLEUM AUTHORITY

118. An amount of GH¢26,152 owed by Energy Commission in

2010 was still outstanding as at the time of reporting. We

recommended that management should recover the amount owed by

the Energy Commission.

119. As a result of an overpayment of GH¢6,379.69 on each of the 4

Toyota Corolla vehicles purchased by the Authority from Western

Automobile Ghana Ltd, a total amount of GH¢25,494.96 was

overpaid to the latter. We recommended that NPA should make

strenuous efforts to recover the overpaid amount from Western

Automobile Ghana Ltd.

GHANA GRID COMPANY LIMITED

120. A review of monthly fuel dipping report compared with book

balance at Prestea revealed a shortage of 908 litres over a period of 4

months. The persistent experience of such shortage may result in

losses to the Company, therefore we recommended that management

should investigate the cause of the shortages, apportion blame, recover

where necessary and take appropriate measures to address it.



MINISTRY OF FINANCE AND ECONOMIC PLANNING

RURAL AND AGRICULTURAL FINANCE

PROGRAMME

121. IFAD funds amounting US$745,000 was invested into a fixed

deposit account with Ecobank. Besides, we could not obtain the

investment certificate for the fixed deposit made. Again, there was no

agreement on file nor correspondence showing duration or rate of

interest on the investment. We advised that where funds are used for

purposes other than that provided in the financing agreement prior

approval should be sought from the funding agency to prevent any

displeasure which might negatively affect the furtherance of the

Project. Management should also obtain the necessary certificate for

the investment to ensure that the right amount of interest is paid and

on time.

VENTURE CAPITAL TRUST FUND

122. Amount due from loan defaulters amounted to GH¢333,344 as

at the end of December 2012. The Trust Fund introduced a

Development Assisting Fund which a lot of people took advantage of

and had the loan but woefully failed to adhere to the repayment terms

resulting in the outstanding debt. We recommended that management

should make the necessary efforts, even including legal action to

recover the loan from defaulters.

GHANA COCOA BOARD

123. Members of staff who were given imprest to the tune of

GH¢22,553 in 2010/2011 had since not accounted for the imprest

amounts even after completion of the programme. We recommended

that the affected staff should immediately be made to account for the

total outstanding amount or be held liable for a refund by deductions

from their salaries.


BANK OF GHANA

124. Bank of Ghana (BoG) has a controlling interest in the Central

Securities Depository, International Bank PLC and Ghana

International Bank payment and settlement systems. However none

of these subsidiaries prepare financial returns to Bank of Ghana, the

holding company, so as to properly track and monitor their financial

performance. This situation also results in significant delays in

getting consolidated financial statements readily for review. We

advised BoG to put in place measures which would ensure proper

monitoring of financial performance of its subsidiaries and for early

presentation of trial balance for preparation of its Consolidated

Accounts.

125. A short term loan facility granted by BoG to the National

Investment Bank (NIB) of GH¢60,000,000 due on 20 September 2009

and further extension to 31 March 2010 remained unpaid as at the

time of reporting. We also did not sight any security backing the loan.

Similarly BoG granted a Bridging Facility to GCB under an MOU

made up of a cedi equivalent of US$25,000,000 and US$50,000,000

.However the bridging facility of US$ 50,000,000 remained unsettled

as at the time of reporting. We recommended that management

should take necessary steps to ensure that all loans are governed by

valid loan agreement.

126. Withholding taxes deducted on payments for goods and

services in excess of GH¢50 had not been paid to the Commissioner

of DTRD promptly within the stipulated period. Consequently

withholding tax payable to the tune of GH¢625,875.95 had

accumulated as at 31 December 2011. We advised management to

comply with the requirements of Section 87(1) of Act 594 by

remitting these immediately and subsequent withheld taxes should be

remitted by the 15 of the month following the month of deduction for

the avoidance of penalties.



MINISTRY OF INFORMATION

GRAPHIC PACKAGING LIMITED

127. Raw materials purchased worth GH¢140,073 since August

2011 for the production of labels for Blue Skies Limited were still in

stock. This was because Blue Skies Ltd changed its label. We

recommended that efforts should be made to use the material in time

to prevent them from becoming obsolete whilst at the same time

releasing the locked up capital.

128. A total debt of GH¢ 11,130 owed G-Pack by 3 companies have

seen no movement since 2009. We advised management to intensify

its debt collection effort as this could worsen the existing financial

distress position of the Company.

GHANA BROADCASTING CORPORATION

129. Debtor’s balances totalling GH¢796,258 had been reduced to

GH¢333,778 while some totalling GH¢446,166 had been written-off

without authorization. Management is advised to come up with a

clearly documented policy for the handling of overdue debts. Also,

any debt written off or reduced should be authorized by the Board and

approved in line with existing regulations.

GRAPHIC COMMUNICATION GROUP LIMITED

130. The intercompany balance with G-Pack Limited did not agree

with that of Graphic Communication Group Limited. The balance as

at 31 December 2011 as per GCGL general ledger was GH¢1,078,694

but that of G-Pack general ledger was GH¢1,048,626 resulting in a

difference of GH¢30,068. We recommended that management

prepares reconciliation between the subsidiary and the parent

company accounts and any differences noted should be investigated

and resolved.


MINISTRY OF WATER RESOURCES,

WORKS AND HOUSING

TEMA DEVELOPMENT CORPORATION

131. We sighted a letter referenced SCR/LCD/353/42 dated 13/4/10

revealing the Corporation’s indebtedness to Land Commission to the

tune of GH¢16,574,567(£7,705,517) being unpaid rent spanning a

period of 23 years. Management however, objected to the amount

being claimed by the Lands Commission. We advised that

management should have a discussion with the authorities of Land

Commission to resolve the issue.

MINISTRY OF TRADE AND INDUSTRIES

GHANA STANDARDS BOARDS

132. The Board auctioned two (2) saloon cars and five Pick-up

valued at GH¢26,300 by State Transport Company (STC). However

there were no receipts to confirm receipt of the auction proceeds and

subsequent payment made into the Non-Tax Revenue Account at the

Bank of Ghana. We recommended that management should produce

the relevant documents to confirm the receipts of the auction proceeds

and subsequent payment into the Non Tax Revenue Account and

advised that an official of the Board should be present whenever any

item of the Board is to be auctioned in order to ensure proper

accountability.

GHANA HEAVY EQUIPMENT LIMITED

133. A total amount of GH¢1,213,643 had been standing on Debtors

accounts for over four years without any movement. Management

was advised to make strenuous effort to recover the debt and in

instances of unrecoverable appropriate action should be taken in line

with existing regulations.



MINISTRY OF ROADS AND HIGHWAYS

GHANA HIGHWAY AUTHORITY

134. Imprest amounting to GH¢5,891 was not retired at the Ashanti

Regional Office. Management should ensure that the amount involved

should be retrieved from the concerned officers.

OTHER AGENCIES

NATIONAL PENSIONS REGULATORY AUTHORITY

135. The Authority retained an amount of GH¢87,450.00 being

100% of Internally Generated Funds (IGF) collected without any

legislative approval. We advised management to disclose collections

of all non tax revenue to the Ministry of Finance and Economic

Planning (MoFEP) and also seek approval for retaining the IGF

otherwise the revenue should be paid into the Consolidated Fund.

136. Allowances paid to board members and sub-committee

members were not subjected to 10% withholding tax totalling

GH¢3,382.00. We urged management to comply with the tax law and

to remit the amount in default to the Domestic Tax Revenue Division

(DTRD) of the Ghana Revenue Authority (GRA).

137. Fuel purchases of GH¢36,000.00 made during the year were

not entered in either the fuel register or the vehicle log books to

facilitate proper accountability in contravention of Chapter 1604 of

Stores Regulation 1984 because the records were not being

maintained. We advised management to ensure that all fuel purchased

are recorded in the fuel register before issues are made. Additionally,

the management should ensure that vehicle logbooks are maintained

for all vehicles for drivers to record receipt or purchase of fuel, oil and

lubricant whilst officers using the vehicles certify journey undertaken.


NATIONAL DEVELOPMENT PLANNING COMMISSION

138. Management retained National Service Personnel as a result of

which Service Activities funds amounting to GHȼ53,275.50 was

misapplied in the payment of their allowances to the detriment of

planned activities. We advised management to institute an

appropriate Scheme of Service to allow for the engagement of the

requisite staff needed for its operations. We also advised management

to consider in the interim the option of dissociating the retained

National Service Personnel from the Commission onto the National

Youth Employment Programme (NYEP).



PART III

DETAILS OF FINDINGS AND

RECOMMENDATIONS

MINISTRY OF HEALTH

GHANA COLLEGE OF PHYSICIANS AND SURGEONS

Introduction

139. This report relates to the audited accounts of the Ghana College

of Physicians and Surgeons for the year ended 31 December 2011.

MANAGEMENT ISSUES

Disparities between the financial statement figures and the

underlying records

140. One of the financial duties of a head of department is to ensure

that annual accounts of the department are correctly prepared, signed

and submitted to the various stakeholders, three months after the end

of the year.

141. Besides management of the College not submitting the draft

financial statements on time, we also noted that the financial

statements were flouted with errors. Our review disclosed differences

in figures between the draft financial statement and the underlying

records. Below are some of the disparities.

Account head cash book figure financial stmt figure variance

Telecom 3,785.22 5,735.00 (1,949.78)

Advert Nil 2,823.00 (2,823.00)

Fuel & lub. 12,349.00 10,399.00 1,950.00

Insurance 109.16 10,099.00 (9,989.84)

Duty/prof Allw 72,336.16 51,467.00 20,869.16

Fuel allowance 15,144.00 24,432.00 (9,288.00)

Housing sub. 37,012.02 43,828.00 (6,815.98)

Depreciation 698,540.00 141,556.00 546,984.00


142. These lapses were due to the negligence of the Accounts

officer who failed to ensure that the correct figures were posted from

the cashbook to the general ledger, and the trial balance extracted for

the preparation of the financial statements. Management also relented

in its supervisory role.

143. This made the draft financial statements misleading as values

reported were different from the actual expenditures incurred. We

therefore referred the statements to the Accounts Officer to effect the

necessary corrections and re-submit them for validation. This has not

been done as at the time of reporting.

Unpresented payment vouchers GH¢10,533.91

144. Regulation 1(c) of the FAR enjoins any public officer

responsible for the custody, care and use of public stores, to keep

proper records of all transaction and to produce the records for

examination when called upon to do so by the Minister or the Auditor-

General.

145. In violation of the aforementioned regulation, 11 payment

vouchers totalling GH¢10,533.91 were not presented for audit. As a

result, we could not ascertain the propriety or otherwise of the

payments. The drift from laid down procedure could give rise to

fictitious expenditure and provide opportunity for abuse.

146. The irregularity was attributed to making payments before

raising the necessary vouchers and the inability to properly file and

preserve paid vouchers for audit.

147. We recommended that, management produces the payment

vouchers for our examination or the total amount involved recovered

from the paying officer. Management should also improve upon its

filing system and custody of records.

Payments without official receipts GH¢4,508.78

148. Contrary to Regulation 28 of the FAR, three service providers

failed to issue official receipts for payments amounting to

GH¢4,508.78.



149. The anomaly was due to poor supervision by the Principal

Accountant.

150. The absence of valid receipts and other relevant documents to

authenticate payments cast doubt on the genuineness of the

transactions.

151. We therefore recommended that, the Accountant should obtain

the official receipts from the organizations involved and our office

informed for verification or the amount involved surcharged to the

Accountant, to which management agreed.

Unauthorised foreign payments for goods in the Hospitality

Department

152. Regulation 42(1) of the FAR, 2004 (L.I.1802) states that,

“Payments outside Ghana shall be made only under the specific

authority of the Controller and Accountant-General (C&AG) with

prior approval of the Minister in accordance with approved

estimates”.

153. Contrary to the above regulation, the Hospitality Department of

the College made foreign purchases of food stuffs amounting to

GH¢141,885.12 between January and December 2011 without

specific authority from the C&AG. The modalities for the foreign

payment were also not approved by the Minister. 154. The anomaly we noted was due to Management’s ignorance of

the above regulations which is not an excuse. We recommended that

in future the above regulations should be adhered to if foreign

payments are to be made.

PAYE not remitted to DTRD - GH¢16,507.00

155. Part X Section 87(1) of the Internal Revenue Act 2000 requires

a withholding agent to pay to the Commissioner a tax that has been

withheld within 15 days after the end of the month in which the

payment, subject to withholding tax, is made by the withholding

agent.


156. Contrary to the above law, we noted that a total amount of

GH¢16,507.00 being accumulated PAYE withheld by management of

the College had not been remitted to the Commissioner, DTRD of

GRA as at the time of reporting.

157. The anomaly was because management grossed over the above

regulation and this has denied the state of the much needed revenue

for its developmental projects.

158. We recommended and management agreed to remit the whole

amount of GH¢16,507.00 to the Commissioner of the DTRD without

delay.

Purchases not routed through stores GH¢20,321.13

159. Stores regulations 0502 and 0604 requires that goods received

should be recorded in the appropriate ledger and tally cards, and issue

of same made on authority of properly signed requisition.

160. In contravention of the aforementioned regulation we observed

that stores items worth GH¢20,321.13 purchased between January and

December, 2011 did not pass through the stores records of the

College. They lack evidence of their acquisition and consumption.

This situation was attributed to breakdown of controls over the

procurement procedures and the purchase of goods.

161. This omission could lead to diversion of goods and other store

malpractices. We therefore recommended that, all future purchases

should be taken on ledger charge before payments are made.

Meanwhile management of the College should take steps to account

for the goods involved.

Unearned salary and allowances - GH¢5,891.80

162. Our review of the College’s salary payment vouchers disclosed

that Freda Ocansey who resigned on the 20 June 2011 was paid salary,

car maintenance and utility allowances up to August 2011, amounting

to GH¢5,891.70. We noted that though the Rector wrote to the bank to



stop her June salary on 21 June 2011, the Administrative Manager on

behalf of the Rector also wrote another letter referenced

GCPS/Administration/HR/05, to the bank to release her June salary,

enabling her to collect the subsequent month’s salaries.

163. The lack of coordination between the Administrative Manager

and the Rector resulted in the lapse. The Accountant also failed to

notify the Controller and Accountant General for the stoppage of her

salary.

164. Payment of unearned salaries to separated staff, drain

government coffers and deprived the state of the much needed funds

for development.

165. We accordingly advised management to recover the amount of

GH¢5,891.70 from Freda and pay same to chest without further delay,

failure of which the Administrative Manager whose inaction caused

the loss should be surcharged with the amount involved.

166. Management in response stated that it would liaise with

Ocansey’s bankers to ascertain if the unearned salaries had been paid

to Controller and Accountant General’s account.

Payment of salary arrears and allowances from IGF without any

authority

167. Section 5(a) of the Retention of Funds Act (Act 735) states that

“despite any other provision in any enactment to the contrary;

Internally Generated Funds can only be utilised when the activities on

which the expenditure will be incurred have been programmed and

approved in that Ministry’s, Department’s and Agency’s expenditure

budget by Parliament.”

168. Management however paid an amount of GH¢57,613.23 as

salary arrears and allowances to Benjamin O. Andoh who was

dismissed and later re-instated by a court ruling. The payment was

made from the non tax revenue without Parliamentary authority.


169. Management explained that Minister of Health vide letter no.

MOHA.003 dated 8 August 2011 gave approval for the College to use

its non tax revenue to pay the officer.

170. We were of the opinion that management should have sought

financial clearance from the Ministry of Finance and Economic

Planning for the Controller and Accountant General Department

(C&AGD) to effect the payment since the expenditure was salary

related.

171. We recommended that, the officer’s salary should be

regularised and the amount of GH¢57,613.23 recovered through the

C&AGD, failing which the Authorising and Approving Officers be

surcharged. We also urged management to adhere to the provisions of

Act 753 in subsequent transactions.

Payment of penalty fees to Environmental Protection Agency -

GH¢1,000.00

172. The establishment of any facility which could have an effect on

the environment requires environmental permit from the

Environmental Protection Agency (EPA). The violation of this

requirement attracts a penalty charge.

173. Management of the College failed to obtain environmental

permit before operating its hospitality management section. This

omission resulted in the payment of a penalty of GH¢1,000.00 to the

EPA. The financial cost of GH¢1,000.00, which distorted the

budgetary allocation of the College, could have been avoided if

management had complied with existing rules and regulations.

174. We recommended and management agreed that in future it

would seek permission from the appropriate authorities before setting

up any such facility; otherwise negligent officers would be surcharged

with future loss of funds.

Non implementation of the previous audit recommendations

175. 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 reports as well as

directives of Parliament to address weaknesses and irregularities in

MDA’s.

176. We noted that, though the College has an Audit Report

Implementation Committee (ARIC) in place, most of the

recommendations made in the previous Audit report had not been

implemented. Management also failed to respond to our previous

management letter referenced CAD/DA/VOL.1/01 dated 11 May

2012 in contravention of Section 29 of Act 584.

177. We attributed this to the failure of ARIC to be responsive to its

role.

178. We recommended that, Management of the College should

ensure that, the ARIC performs its function as required by law. We

also advised management to endeavour to respond to audit reports

within the stipulated time to ensure best management and sound

financial practices.

179. Management in response requested that the contents of the

previous audit report to be made known to them to enable them

respond appropriately. We could not agree with management’s

demand as the previous report was addressed to the College.

NURSES AND MIDWIVES COUNCIL

Introduction

180. This report relates to the audited accounts of the Nurses and

Midwives Council for the year ended 31 December 2011.

Operational results

181. The Council recorded a surplus of GH¢1,461,372.63 in 2011

which represents an increase of 41.7% as against that of 2010 which

amounted to GH¢1,031,440.52. Table 1 shows the details of the

performance indicators.


Table 1: Comparative income statement for 2011 and 2010

Income

2011

GH¢

2010

GH¢

%

Change

Subvention 489,852.15 513,481.27 (4.6)

Internally Generated Fund

(IGF)

5,492,415.20 3,183,102.28 72.6

Interest received - 63.48 -

Total Income 5,982,267.35 3,696,647.03 61.8

Expenditure

Personnel Emoluments 527,619.16 461,916.14 14.2

Administrative Activities 1,152,064.90 679,914.57 69.4

Service Activities 2,841,210.66 1,523,375.40 86.5

Total Expenditure 4,520,894.72 2,665,206.11 69.6

Income Surplus 1,461,372.63 1,031,440.52 41.7

182. The Council’s total income increased by 61.8% from

GH¢3,696,647.03 in 2010 to GH¢5,982,267.35 in 2011. The rise in

income was mainly due to an increase in IGF by 72.6% from

GH¢3,183,102.28 in 2010 to GH¢5,492,415.20 in 2011. This resulted

from increase in enrollment into the Council’s scheme thereby giving

rise to the registration fees which is the main component of the IGF.

183. Total expenditure of the Council also increased by 69.6% from

GH¢2,665,206.11 in 2010 to GH¢4,520,894.72 in the year under

review. Administrative expenditure rose by 69.4% from

GH¢679,914.57 in the previous year to GH¢1,152,064.90 in 2011 due

mainly to increase in expenditure on Committee of Council

Allowance, Allowances and others and Operational Enhancement

Expenses.

184. Similarly, Services Activities increased by 86.5% from

GH¢1,523,375.40 in 2010 to GH¢2,841,210.66 in 2011 mainly as a

result of expenditure incurred on hotel accommodation and local

consultancy.

Financial position

185. Presented in Table 2 is the financial position of the Council as

at 31 December 2011.



Table 2: Balance sheet as at 31 December 2011

2011

GH¢

2010

GH¢

%

Change

Non-Current Assets 396,904.14 424,890.80 (6.6)

Investment 2,000,000.00 - -

Current Assets 2,317,400.93 2,801,167.53 (17.3)

Current Liabilities 34,466.66 7,592.55 354.0

Net Asset 4,679,838.41 3,218,465.78 45.4

Accumulated Fund 4,679,838.41 3,218,465.78 45.4

Non-current assets

186. The Council’s non-current assets went down by GH¢27,986.66

representing 6.6% decrease, from GH¢424,890.80 in 2010 to

GH¢396,904.14 in 2011.The decrease was mainly due to depreciation

of non-current asset of the Council for the year under review.

187. The investment in 2011 was due to the purchase of a 91 day

treasury bill during the year under review. The investment was

purchased with the GH¢2,000,000.00 released by government for the

completion of the Council’s office complex.

188. Current assets also decreased by 17.3% from GH¢2,801,167.53

in 2010 to GH¢2,317,400.93 in 2011. The decrease was largely due to

decline in Bank balance.

189. Total Net Assets of the Council appreciated by 46.2% from

GH¢3,218,465.78 to GH¢4,706,712.52 in 2011.

190. The current ratio for the year was 67.2:1 as against 368.9:1 in

2010. Though the ratio had fallen drastically, it continued to depict

the Council’s ability to meet its short term obligations as and when

they fall due.


MANAGEMENT ISSUES

Delay in construction of office complex

191. The construction of an office block for N&MC was awarded on

contract to M/S Cymain (Ghana) Limited in September 2004 for an

initial contract sum of GH¢1,319,137.09 and was expected to be

completed by August 2005. We noted that work came to a standstill in

2006 at 40% stage of completion which was attributed to lack of

funds. Four interim payment certificates amounting to

GH¢531,637.18 had so far been paid to the contractor.

192. The project was revived in July 2011, six years after the

expected completion date and the contract sum reviewed to

GH¢1,850,000.00. Though management requested for and Central

Government released an amount of GH¢2,000,000.00 in July 2011 for

the completion of the Project, we noted that management had rather

invested the funds in 91 days Treasury Bills. Our physical inspection

revealed that materials already installed were deteriorating due to

exposure to the weather.

193. Management intimated that the stoppage of the project was due

to the Contractor’s inability to perform even though resources were

available.

194. From the foregoing, we recommended that management should

abrogate the contract, repackage the remaining works for tendering

and award to a competent contractor to complete the project on time

in order to safeguard investment made and avoid increased cost on the

project.

195. Management responded it was frustrated with the undue delays

and inconvenience caused by the lack of progress exhibited by the

contractor and consultants on the project and are making strenuous

effort to find a speedy solution to the impasse.

Failure to supply vehicle

196. We noted that the Council entered into an agreement with

Western Automobile Center Limited in July 2009 for the supply of



one Nissan Urvan bus at a cost of GH¢34,692.00 and made a total

payment of GH¢31,222.80 representing 90% of the total cost in

August 2009. The Company however failed to deliver the bus to the

Council as at the time of reporting.

197. Our review of the contract agreement revealed that the mode of

payment and delivery was not specified in the agreement; hence the

company was not bound to immediately deliver the bus even after

receiving 90% of the cost.

198. The Council risks losing this amount as several efforts made

since 2009 for the supply of the vehicle has proved futile.

199. We recommended that strenuous effort including taking legal

action should be made to compel the Company to deliver the bus or

refund the money immediately to the Council.

200. Management responded that the agreement for the procurement

of the bus was entered into by Ministry of Health and as such,

management had through Ministry of Health enforced all the

necessary legal rights under the contract to address the matter.

Management further stated that it shall not relent in pursuing delivery

of the vehicle or a refund of monies already paid.

Unpresented payment vouchers

201. Notwithstanding Regulation 1(a) of FAR 2004 (L.I. 1802)

which requires public officers responsible for the custody, care and

use of public stores to keep proper records of all transactions and

produce records of the transactions for inspection when called upon to

do so by the Minister, the Auditor-General or any officers authorised

by them, 17 payment vouchers totalling GH¢199,079.90 were not

presented for our examination.

202. This irregularity was attributed to the failure of the accounts

office to properly file and maintain essential records.


203. Non submission of the payment vouchers for audit examination

denies assurance that the disbursements made were legitimate and in

the interest of the Council. The situation could also encourage

fictitious payments.

204. We recommended that management should trace and produce

the payment vouchers for examination, failure of which the head of

accounts and paying officer should be surcharged with the amount

involved.

205. Management stated that the situation occurred due to various

audit inspection exercise encountered in 2012 and promised to make

every effort to make the PV’s available for audit scrutiny.

Failure to remit income tax and SSF contribution – GH¢9,196.96

206. Section 87(1) of the Internal Revenue Act, 2002 requires a

withholding agent to pay to the Commissioner a tax that has been


payment, subject to withholding tax is made. Also, the National

Pension Act 2008 (Act 766) provides that, every employer shall remit

all the 18.5% total contribution on behalf of each worker to Social

Security & National Insurance Trust Fund (SSNIT) within the 14 days

of the contribution period.

207. The Council failed to remit PAYE and SSF contribution

deducted from 14 contract employee’s remuneration totalling

GH¢2,557.33 and GH¢6,639.63 to the Domestic Tax Revenue

Division (DTRD) of Ghana Revenue Authority (GRA) and Social

Security and National Insurance Trust Fund (SSNIT) respectively in

contravention of the above stated laws. Our further review disclosed

that the Council had accumulated the statutory deductions to the tune

of GH¢17,677.15 over the years and failed to remit them contrary to

the law.

208. Failure to adhere to these laws deprived the state of the use of

the accrued tax revenue on its development projects. The practice also

denied employees the privilege and the right of saving and receiving



additional earnings from employer’s contribution into their pension

fund.

209. We recommended that the employees SSF contribution

together with the employer’s part which adds up to 18.5 % of

employees’ earnings, should be paid to SSNIT immediately. We also

recommended that the income tax deducted from the employees’

earnings over the years should be remitted to the DTRD without delay

to avoid the payment of penalties.

210. Management responded that an account was not available to

enable it pay the SSNIT contribution and that an account has now

been set up and payment will be made. Management further stated

that the nonpayment of the PAYE was an oversight and promised to

make payment to the DTRD of GRA immediately.

NATIONAL HEALTH INSURANCE AUTHORITY (NHIA)

Introduction

211. This report relates to the audited accounts of National Health

Insurance Authority (NHIA) for the period 1 January 2008 to 31

December 2009.

Operational results

212. The operations for the year closed with a deficit of

GH¢16,839,909 as compared to a surplus of GH¢96,990,959 in 2008.

Presented in Table 3 are the performance indicators for the period

under review.

Table 3: Performance indicators for 2009 and 2008 Income 2009

GH¢ 2008 GH¢

% Change

Levies Income 329,459,129 277,713,403 18.6

Investment Income 75,962,096 42,795,270 77.5

Grant - 16,846,000 (100.0)

IDA Funding 142,433 1,866,450 (92.4)

Other Income 1,001,042 47,442 2,010.0

Total Income 406,564,700 339,286,565 19.8


Expenditure

Direct support to scheme

operations

370,889,990 197,205,348 88.1

Support to Partner Institutions 41,179,224 39,272,681 4.5

Expenditure on IDA Project 1,312,151 147,349 790.5

Gen. and Adm. Expenses 10,023,244 5,670,228 76.8

Total Expenditure 423,404,609 242,295,606 74.7

(Deficit) / Surplus (16,839,909) 96,990,959 (117.4)

213. Total Income went up by 19.8% or GH¢67,272,135 to register

GH¢406,564,700 in 2009 as compared with the 2008 figure of

GH¢339,286,565. Levies and Investment Incomes were the major

contributors to the Authority’s Income for the periods under review

contributing 18.6% and 77.5% respectively.

214. Total Expenditure also went up by 74.7% from

GH¢242,295,606 in 2008 to GH¢423,404,609 in 2009. The increase

in Total Expenditure was mainly due to an 88.1% rise in Direct

Support to the Scheme’s operations, contributing 95% of Total

Expenditure.

Financial position

215. The financial position of the Authority as at 31 December 2009

is presented in Table 4.


Item 2009

GH¢

2008

GH¢

%

Change

Non-Current Assets 43,457,343 25,962,441 67.4

Current Assets 545,115,348 460,923,386 18.3

Current Liabilities 141,405,981 22,879,206 518.1

Net-Current Assets 403,709,367 438,044,180 (7.8)

Net Assets 447,166,712 464,006,621 (3.6)

Current Ratio 3.9:1 20.1:1

216. Non-Current Assets made up of Property, Plant and

Equipment went up by 67.4% from GH¢25,962,441 in 2008 to



GH¢43,457,343 in 2009. This was due to additions to all items of

non- current assets nature within the year.

217. Current Assets which stood at GH¢ 460,923,386 in 2008 went

up to GH¢545,115,348 in 2009, an increase of 18.3%. This was due to

a 4.7% increase in Investments and a Promissory Note from Ghana

Government.

218. Current Liabilities increased by 518.1% from GH¢22,879,206

in 2008 to GH¢141,405,981 in 2009. This was made up of Accounts

Payable only.

219. The Authority’s Liquidity ratio at the year end was 3.9:1 (2008:

20.1:1).Although the ratio decreased, the Authority is in a good

position to meet its short term obligations as and when they fall due.

MANAGEMENT ISSUES

Significant deficit between growth in expenditure and income

220. We noted that the year on year growth rate in expenditure of

the Authority was significantly higher than the rate of growth in

income. Details are show in the following Table:

Year Income

GH¢

Expenses

GH¢

Difference

GH¢

2006 165,354,900 85,735,508 79,619,392

2007 249,256,891 126,416,301 122,840,590

2008 330,772,959 216,110,024 114,662,935

2009 406,103,662 427,072,360 (20,968,698)

Cumulative 1,151,488,411 855,334,193 296,154,219

221. There is the risk that the National Health Insurance Scheme

may not be able to fund its recurring costs from operational revenue in

the future if this trend is not reversed immediately. This poses a going

concern risk on the sustainability of the Scheme that is being managed

by the Authority.


222. We recommended that:

a) Management should intensify the cost curtailment and cost

containment measures so as to reduce the operational costs

of running the scheme;

b) Alternative and additional funding sources should be

explored to increase the revenue base of the Authority;

c) Management should take another look at the structural and

operational system of the NHIA and the various District and

Mutual Health Insurance to identify areas where there are

inefficiencies and potential leakages that might be

contributing to the escalation of expenses.

Late remittance by Controller and Accountant General’s

Department to NHIA

223. We noted that levies collected by the Value Added Tax (VAT)

Service and the Social Security and National Insurance Trust (SSNIT)

on behalf of the National Health Insurance Authority Scheme were

not ceded to the Authority on time.

224. The CAGD owed a total amount of GH¢113,065,642 and

GH¢185,543,194.77 for 2008 and 2009 respectively. This implied that

the Authority was denied access to these amounts needed for the

running of its operations and the execution of its mandate under the

NHIA Act.

225. This situation could have adverse impact on the smooth

running of the Authority’s operations if not checked.

226. We recommended that management should consistently

monitor the remittances from the Revenue Agencies as well as the

CAGD to ensure that revenue accruing to the Health Insurance Fund

are remitted to the NHIA as and when they are due in accordance with

the provisions of Act 650.



Taxes not withheld - GH¢7,325

227. Section 84(2) of the Internal Revenue Act, 2000 (Act 592)

requires that payment for goods and services that exceed the threshold

of GH¢50 be subject to 5% withholding tax.

228. Section 88(1) of Act 592 also states that “A withholding agent

who fails to withhold tax in accordance with this subdivision is

personally liable to pay to the Commissioner the amount of tax which

has not been withheld, but the withholding agent is entitled to recover

this amount from the payee.

229. Our audit, however, revealed that management failed to

withhold 5% tax on payments made for works and services totalling

GH¢146,503, resulting in a loss in tax revenue of GH¢7,325 accruing

to the state.

230. We recommended that management should comply with the

withholding tax provisions of the Internal Revenue Act so as to avoid

any tax penalties on the Authority.

Payment voucher and supporting document not available –

GH¢50,000

231. Regulation 1 of the Financial Administration Regulations

(FAR) 2004 L.I. 1802 requires any public officer responsible for the

financial business on behalf of the government of Ghana to keep

records of all transactions and to produce records of all transactions

for inspection when called upon to do so by the Minister, the Auditor-

General, the Controller and Accountant-General or any officer

authorized by them.

232. During our review we observed that payments to Duakwah

Salvation vide PV number P/04/06/08 and supporting documents for

an amount of GH¢50,000 to Swedru Government Hospital was not

presented for audit.

233. The occurrence, completeness, and accuracy of the

GH¢50,000 claim payment could not be ascertained.


234. We recommended that all supporting documents for payments

are properly filed in a manner that would be easily retrieved for other

reviews. We recommended further that the affected PV and

supporting document should immediately be presented for audit,

otherwise the responsible officials should be held accountable for the

above stated amount.

Receipts for claims with different service providers name-

GH¢131,409

235. During our audit we noted that some receipts obtained in 2008

and 2009 from Samatra Hospital, a service provider for claims

payment to them had a different name as Samatra Hospital staff

welfare Association instead of Samatra Hospital.

Details of these receipts are listed below:

Date Details Cheque

No.

Amount

GH¢

24/7/09 Samatra Hospital Welfare Ass. 001291 50,000





Total 131,409

236. According to the scheme manager the old scheme manager and

accountant connived with the accountant at the Samantra Hospital to

have moneys meant for claims paid into the hospital’s welfare

account.

237. This has resulted in misappropriation of GH¢131,409 by the

Scheme Accountant.

238. We recommended that internal control around cash and bank

balances be strengthened. Also, management is advised to take the

appropriate legal actions against the officials involved in this act to

retrieve the misappropriated funds.



Disbursement not approved by the District coordinator or the

Board – Denu

239. We noted during our audit that disbursements including the

following were made to various facilities without the approval by the

Board or District Coordinator:

Date Description Amount (GH¢)

21/12/09 Being payment of 45% August 2009

Claim to KDH 38,347.78

21/12/09 - 18,070.11

Total 56,417.89

240. The lack of authorization and approvals might lead to

misappropriation of funds.

241. We recommended that management should ensure that

appropriate levels of authorization and approval are sought before

payments are effected.

Differences between amounts reported by the Denu Scheme as

transfers from Head Office and amounts provided by Head Office

as transfers to the Schemes – GH¢1,166,183

242. We noted differences between revenue of the scheme

(representing transfers received from Head Office) and the amount

reported by the Head Office as transfers to the Scheme. These

differences are as follows:

Revenue per financial Revenue per NHIA

Statement of the Scheme records on transfer to Scheme Difference

GH¢ GH¢ GH¢

3,684,615 2,518,432 1,166,183

243. The bank statements of the Scheme were also not available for

our review to ascertain the accuracy, completeness, and measurements

of the revenue of neither the scheme nor the transfers provided by the

Head Office. We were made to understand that the person in charge

is on interdiction and the information is not kept on file.


244. The inaccuracies reported may create an avenue for

misappropriation of funds.

245. We recommended that these differences should be investigated

and the required remedial action taken.

Non-compliance with loan agreement

246. We noted that a loan taken by the Scheme Manager of the

Dormaa Municipal Mutual Health Insurance Scheme (Martin

Amponsah) in June 2008 was not being paid as agreed. The amount

paid out of the GH¢10,000 taken in July 2008 was GH¢2,520 leaving

a balance of GH¢7,480 as at December 2008.

247. This indicates that funds meant for the Scheme’s activities are

locked up leaving core duties of the Scheme undone.

248. We recommended that management should ensure that the

agreed deductions are made and paid back to the Scheme coffers as

soon as possible.

Receipts not sighted – GH¢70,295 (Gambaga Mutual Health

Insurance Scheme)

249. During our review, we did not sight receipts of payments made

to some service providers. Details of these transactions are shown

below:

Date P.V. No. Amount (GH¢)

10/03/2008 Nov. 37 776

21/10/2008 Oct. 156 2,359

22/01/2008 Jan. 09 7,472

11/12/2008 Dec. 199 8,838

11/12/2008 Dec. 198 10,470

11/12/2008 Dec. 200 13,371

4/11/2008 Nov. 161 27,009

Total 70,295

250. There is every indication that payments made can be disputed

since there is no evidence of collection of money and might result in



double payment. Audit trail is also lost when there is no third party

confirmation of transactions undertaken.

251. For authenticity of payments, we recommended that

management should ensure that receipts are obtained after every

payment. All supporting documents should also be attached to

payment vouchers raised.

Unavailability of funds transferred from Authority to the

Nanumba North Mutual Health Scheme – GH¢158,525.50

252. We noted during our audit that an amount of GH¢158,525.50

purported to have been transferred by the NHIA to the Nanumba

North Mutual Health Scheme could not be traced to the bank

statement of the Scheme.

253. The lapse was due to lack of supervision and regular reviews

by the Internal Audit Unit, which could result in loss of much needed

funds to promote the objective of the Authority.

254. We recommended that head office liaises with the Scheme to

have this difference investigated and reconciled. Also, the officer in

charge of the transfer of the funds must be held liable for the loss of

the funds.

Withdrawal from claims account for supposed investment not

accounted for GH¢900,000

255. We noted during our audit that an amount totalling

GH¢900,000 was withdrawn from the claims account of the

Oguaaman Mutual Health Insurance Scheme and deposited into a

purported investment account. However, no evidence of the

investment of this amount was available for our review. We also did

not sight evidence of the amount being paid to the Scheme. Details of

the transfer are shown as follows:


Date of transfer Amount GH¢

4/03/2009 400,000

12/05/2009 200,000

18/06/2009 300,000

Total 900,000

256. The transfer of these amounts from the claims accounts to an

investment may result in funds being locked up in investment when

these funds are needed to pay claims to service providers.

257. Additionally, the non-availability of evidence regarding the

existence of this supposed investment raises concerns over the use of

the Scheme’s funds.

258. We recommended that management should ensure that these

transfers are followed up to wherever they have been invested. All

investment and interest accrued must be retrieved and paid into the

Scheme’s account. We also recommended that the responsible

officials should be held liable in the event of any losses.

Transfer of funds from NHIA to Scheme not accounted for:

GH¢617,393.40

259. We noted during our audit of the Wa Municipal Mutual Health

Insurance Scheme that an amount of GH¢617,393.40 purported to

have been transferred from the NHIA could not be traced in the

Scheme’s cash book and bank statements. The details are as follows:

Date Details Amount GH¢

22/01/09 2nd Re-Insurance 306,049.95

30/07/09 9th Re-Insurance 311,343.45

Total 617,393.40

260. The completeness and accuracy of subsidy expense disclosed

on the financial statements of the NHIA is in doubt. It may also result

in misappropriation of funds.

261. We recommended that regular reconciliation should be done

between the Authority and the Schemes to rectify such differences and

the officer in charge of the transfers must be held liable for any losses.



Payments not accounted for - GH¢3,598,749.60

262. We noted that the Authority had made a total payment of

GH¢3,598,749.60 on behalf of some mutual health scheme providers

for some claims over the period under review. However, these

amounts were not accounted for by the Schemes. Details of these

schemes are as follows:

Scheme Name Amount

GH¢

Ablekuma Health Insurance Project 926,867.00

Amansie East Mutual Health Insurance Scheme 61,825.53

Asokwa Sub-Metro Mutual Health Insurance

Scheme

486,110.20

Assinman Mutual Health Insurance Scheme 735,527.33

Birim South Mutual Health Insurance Scheme 357,266.05

Ga Mutual Health Insurance Scheme 537,289.49

Kpeshi Mutual Health Insurance Scheme 493,864.00

Total 3,598,749.60

263. The system could be abused as it is exposed to the risk of

double payment if the provider who had received direct payment from

the NHIA fraudulently makes claims from the scheme against the

same invoices and service providers.

264. We recommended that the NHIA should always advice the

Schemes of any payments made to any service provider on behalf of

the schemes.

265. The procedure for direct payment of claims to service providers

should be streamlined such that the process is initiated from the

schemes.

266. We also proposed that the transactions should be recognized as

an income and an expense in the books of each scheme concerned.

This would ensure the completeness and accuracy of records


maintained by each scheme in respect of their finances. Meanwhile

the above stated amount should be accounted for.

Differences between transfers recorded by Bantama Mutual

Health Insurance Scheme and the NHIA – GH¢2,482,130

267. We noted during our review that, the amount reported by the

NHIA as transferred to the scheme did not agree with the receipts

verified at the scheme as detailed below:

Date Description Transfers

Per

NHIA

Records

GH¢

Transfer

Per

Scheme

Records

GH¢

Difference

GH¢

14/04/08 - - 583,419 583,419

18/07/08 3rd Quarter

Subsidy

- 388,946 388,946

16/08/08 Indebtedness - 1,233,935 1,233,935

17/12/08 Reinsurance 2,206,301 2,482,131 275,830

Total 2,206,301 4,688,431 2,482,130

268. The implication is that the completeness of transfers to the

Bantama MHIS as well as the amount of subsidy expenses recorded

on the financial statements by the NHIA could not be validated.

269. We recommended that the NHIA and the management of the

Bantama MHIS liaise to investigate these differences and the

necessary remedial action taken. Any losses should be accounted for

by the responsible officials.

Claims not vetted – GH¢246,418.11

270. We noted during our audit that claims paid to some service

providers amounting to GH¢246,418.11 were made prior to vetting of

the claims. Details of these payments are as follows:



Scheme Name Amount GH¢

Gambaga Mutual Health Insurance Scheme 25,677.16

Ga Mutual Health Insurance Scheme 65,642.61

New Juabeng Mutual Health Insurance Scheme 155,098.34

Total 246,418.11

271. There is the risk of overpayment to the service providers

especially when after vetting, the total deductions/rejections are more

than the balance on the outstanding payments.

272. We recommended that measures be put in place to ensure

claims are fully vetted before funds are paid out so as to promptly

identify and correct any anomaly. The NHIA should also put in place

measures to ensure there are no undue delays in the payment of claims

that would necessitate the payment of claims in advance pending the

vetting process.

GHANA AIDS COMMISSION

Introduction

273. This report covers the audited financial statements of the

various Projects under Ghana Aids Commission for the year ended 31

December 2011.

Ghana Education Service/School Health Education Programme

(GES/SHEP)

Operational Results

274. Total Income for the year under review was GH¢125,553

comprising transfers from Ghana Aids Commission (GAC) on

4/4/2011 and 21/12/2011 of GH¢46,500 and GH¢79,053 respectively.

Performance indicators are shown in Table 5.


Table 5: Income Statement for 2011.

Income

2011

GH¢

Transfer from GAC 125,553

Expenditure

Planning & Administration 5,039

Monitoring & Evaluation 103,586

Total Expenditure 108,625

Surplus 16,928

275. Total Expenditure was GH¢108,625 in 2011. Significant

among the expenditure are review meetings and transport and travels,

constituting about 70% and 21% respectively of the total expenditure.

276. The Surplus at the close of year 2011 was GH¢16,928 and this

amount had since been transferred to the Accumulated Fund account.

277. The Accumulated Fund of the Programme for the year stood at

GH¢63,564, comprising opening balance of GH¢46,636 and Excess of

Income over Expenditure of GH¢16,928.

Family Health International (FHI), Accra

278. Total Income released in 2011 was GH¢616,529 comprising

transfers from Ghana Aids Commission (GAC) on 22 August 2011

and 22 September 2011 of GH¢150,000 and GH¢466,529

respectively. Table 6 provides a summary of the Project’s




Table 6: Income Statement for 2011

Income

2011

GH¢

Transfer from GAC 616,529

Expenditure

Human Resources 148,023

Sub-Sub Recipients 242,046

Promote low risk behavior 174,063

Outreach CT Services 10,863

Orientation of Out-of-School Peer Education 132,465

Planning and Administration 60,105

Monitoring and Evaluation 42,605

Office Surplus 16,549

Direct Cost 25,893

Indirect Costs (Overheads) 196,989

Total Expenditure 1,049,601

Excess of Expenditure Over Income (433,072)

279. Total Expenditure for the year 2011 stood at GH¢1,049,601.

Significant among the expenditure included Human Resources and

sub-sub Recipients which contributed about 14% and 23%

respectively of the total expenditure. Promote low risk

behavior/Reduce stigma & discrimination and indirect cost

(overheads) also contributed about 17% and 19% of the total

expenditure. This indirect cost (overheads) represents charges for

Family Health International (FHI) Global Overhead cost for

implementing donor funded programs.

280. The Project closed the year with a deficit of GH¢433,072

which had been transferred to the Accumulated Fund Account.

German International Cooperation (GIZ), Accra

281. Total Income released for the year under review was

GH¢539,897. This was made up of transfers from Ghana Aids

Commission (GFR 8 Account) on 19 July 2011 and 22 September


2011 of GH¢169,652 and GH¢370,245 respectively. A summary of

the operational results for the year under review is provided in Table

7.


Income

2011

GH¢

Transfers from GAC (GFR & Account) 539,897

Expenditure


Training 17,201


Procurement & Supply Management Costs 977

Counselling and Testing 149,169

Overheads & General Administration 138,308

BCC-Communication Outreach and

MARPS

105,834

Publication of Work Place Policy 12,821


Excess of income over Expenditure 33,217

282. Total Expenditure for the year 2011 was GH¢506,680. Notable

among the expenditure for the year were counseling and testing which

constituted about 29% of the total expenditure. Resource Persons

Allowance of GH¢82,654 or 55% contributed to the high figure of

counseling and testing. Overheads (management) Expenses (about

13% of Programme funds channeled through GIZ Headquarters in

Benin) of GH¢92,591 swelled Overheads and General Administration

to GH¢138,308.

283. The German International Cooperation (GIZ) registered a

surplus of GH¢33,217 which has since been transferred to

Accumulated Fund Account.



MANAGEMENT ISSUES

Failure to withhold taxes of GH¢1,072.00

284. Contrary to Section 84(2) of Act 592, we noted that

management of the Project failed to withhold taxes totalling

GH¢1,072 from payments made to suppliers of goods and services.

285. The Table below shows instances of payments made to Ecube

Limited without deducting withholding tax.

P.V.

No.

Details Amount

GH¢

5%

WHT

GH¢

11/06 Printing of Poster 3,500 125

11/07 Printing of Poster 4,720 236

11/09 Printing of Fliers 8,500 425

11/10 Poster Framing 4,720 236

21,440 1,072

286. Consequently, a tax revenue of GH¢1,072 accruing to the

state was lost.

287. To improve inflows into the Consolidated Fund, we

recommended that management should comply with the relevant

provisions of the tax law; otherwise responsible officers would be

surcharged accordingly for any future losses.

International Labour Organisation (ILO), Accra


comprising transfers from Ghana Aids Commission (GAC) (GFR 8

Account) on 28 February 2011 and 12 July 2011 of GH¢205,163 and

GH¢154,330 respectively. Presented in Table 8 are the details of the



Table 8: Performance Indicators for 2011

Income

2011

GH¢

Transfers from GAC (GFR 8 Account) 359,493

Expenditure



Training 160,402

Communication 121,048


Operations & Maintenance 33,274


Excess of Expenditure over Income (139,905)

289. Total Expenditure for the year 2011 stood at GH¢499,398.

Significant among the expenditure included Training and

Communication which constituted about 32% and 24% of the total

expenditure respectively. HIV/AIDs Peer Educators training of

GH¢124,892 or 78% contributed to the high figure of Training

Expenses.

290. The ILO recorded a deficit of GH¢139,905 at the end of the

year which had since been transferred to the Accumulated Fund

Account.

Ghana-West African Program to Combat

AIDS & STI (WAPCAS), Accra

291. Total Income released for the year under review was

GH¢1,006,868. This was made up of transfers from Ghana Aids

Commission (GFR8 Account) on 11 February 2011, 20 July 2011 and

23 September 2011 of GH¢17,400; GH¢199,126 and GH¢790,342

respectively. The operational result for the period under review is

shown in Table 9.




Income

2011

GH¢

Transfer from GAC (GFR8 Account) 1,006,868

Expenditure


Training 125,444

Infrastructure Equipment 8,764




Overheads 41,972

Total Expenditure 1,057,572


292. Total Expenditure for the year 2011 was GH¢1,057,572.

Notable among the expenditure for the year under review were

Human Resources and Communication, which constituted about 22%

and 49% respectively of the total expenditure. Expenses on Peer

Education (Female Sex Workers) of GH¢310,380 or 60% Swelled

Outreach/Communication expenses to GH¢516,032.

293. The excess of expenditure over income resulted in an

operational deficit of GH¢50,704 which had since been transferred to

the Accumulated Fund Account.

Ghana Employers Association (GEA), Accra

294. The GEA realized a total income of GH¢239,257 during the

year under review, which comprised of transfers from GAC Global

Fund Account on 18 March 2011 and 20 July 2011 of GH¢89,042 and

GH¢150,215 respectively. Presented in Table 10 is the sumarised

income and expenditure account.



Income

2011

GH¢

Transfer from GAC Global Fund Account 239,257

Expenditure



Training 21,698



Technical Assistance 23,937

Overheads 844



295. Total Expenditure for 2011 stood at GH¢252,615. Significant

among the expenditure for the year under review were Human

Resources and Communication which constituted about 35% and 27%

respectively of the total expenditure.

296. At the end of the financial year the GEA recorded a deficit of

GH¢13,358 which had been transferred to the Accumulated Fund

Account.

Unreceipted payments – GH¢2,809.00

297. Our examination of records revealed that two payment

vouchers totalling GH¢2,809.00 were not signed by the recipients to

acknowledge the receipt of the money. Details of the transactions are

shown below.

P.V. No.

Recipient

Amount

GH¢

09/012 Angela Eshan 1,504.50

09/013 Christopher 1,304.50

2,809.00



298. We attributed the irregularity to the failure of the paying officer

to ensure that every relevant document related to the payment is

signed to signify the propriety of the transaction. This could lead to

moneys not paid to intended persons.

299. We therefore advised management to ensure that these and all

subsequent payments are receipted by beneficiaries otherwise, the

paying officer should be held liable for a refund.

Ghana Business Coalition against HIV & AIDS (GBCA) Accra


comprising transfers from Ghana Aids Commission (GFR& Account)

on 4/3/11 and 18/8/11 of GH¢116,428 and GH¢116,428 respectively.

Presented in Table 11 are the details of the performance indicators.

Table 11: Performance Indicators for 2011

Income

2011

GH¢

Transfer from GAC (GFR8 Account) 232,856

Expenditure

Human Resource 144,934


Training & Education 27,420


Overheads 542


Excess of Income over Expenditure 5,065

301. Total Expenditure for the year under review stood at

GH¢227,791. Notable among the expenditure was Human Resource

which constituted about 64% of the total expenditure. Staff salaries

and wages of GH¢142,833 or 98% accounted for the high figure of the

human resource expenses.


302. The GBCA registered a surplus of GH¢5,065 at the end of the

financial year and has since been transferred to the Accumulated Fund

Account.

MINISTRY OF CHIEFTAINCY AND CULTURE

KWAME NKRUMAH MEMORIAL PARK

Introduction

303. This report relates to the audited accounts of the Kwame

Nkrumah Memorial Park for the period 1 January 2010 to 31

December 2011.

Operational results

304. In 2011, total income registered an increase of 11.1% from

GH¢228,470.34 to GH¢253,780.27. An increase of 12.9% in

Internally Generated Funds accounted for this. Table 12 presents the


Table 12: Comparative income and expenditure statement for

2011 and 2010

Income

2011

GH¢

2010

GH¢

%

Change

Subvention 10,150.17 12,767.94 (20.5)

IGF 243,630.10 215,702.40 12.9

Total 253,780.27 228,470.34 11.1

Expenditure

Allowances 60,866.48 78,273.73 (22.2)

Administration 151,342.92 115,004.00 31.6

Services 7,065.00 8,815.00 (19.6)

Investment 32,697.00 23,334.70 40.1

Total 251,971.40 225,427.46 11.8

Surplus 1,808.87 3,042.88 (40.6)

305. Expenditure incurred in 2011 totaled GH¢251,971.40 as

against GH¢225,427.46 in 2010 registering an increase of 11.8%.

Increases in Administration expenses and Investment of 31.6% and

40.1% respectively accounted for the overall expenditure increase of



11.8%. The increase in Administration cost was largely due to the rise

in Contract Cleaning and Maintenance of Plant/Machinery/Equipment

and the increased cost in Rehabilitation of Sculpture accounted for the

rise in Investment.

306. The Park recorded an operational surplus of GH¢1,808.87 in

the current year as against GH¢3,042.88 in 2010; a reduction of

40.6% over the previous year’s surplus.

Financial position

307. The details of the financial position of the Park are shown in

Table 13.

Table 13: Financial position as at 31 December 2011

2011

GH¢

2010

GH¢

% Change

Cash at bank 6,830.77 4,321.90 58.0

Advance – Staff 667.51 1,367.51 (51.2)

Total 7,498.28 5,689.41 31.8

Current liabilities - -

Accumulated

Fund

7,498.28 5,689.41

308. Non-current assets were not declared in the financial

statements of the Park. Fixed assets, according to management were

yet to be valued and included in the financial statements. Current

assets which were mainly bank balance and staff advances increased

from GH¢5,689.41 in 2010 to GH¢7,498.28 in 2011, a rise of 31.8%

as a result of an increase of 58.0% in the bank balance.

309. During the period, there were no recorded current liabilities.


MANAGEMENT ISSUES

Loss of tax as a result of cash payments - GH¢9,799.08

310. Regulation 48(2) of L.I. 1802 stipulates, “a head of department

shall ensure, as far as it is consistent with the convenience of the

public and the control of transactions, that collections or payments are

made by cheque, bank transfer or direct payment to bank accounts”.

311. Management contravened the above stated regulation by

making cash payments ranging between GH¢1,050.00 and

GH¢3,519.58, totalling GH¢195,981.58 during the period reviewed.

The Acting Director’s failure to ensure that cheques he signed were in

the names of payees stated on the payment vouchers gave cause to this

practice.

312. The holding of high cash balances could lead to

misappropriation of funds and burglary in this spate of armed robbery.

It also resulted in the loss of GH¢9,799.08 in withholding tax revenue.

313. We recommended and management agreed to stop making cash

payments for financial obligations of the Park, failing which culpable

officers would be surcharged with any future loss of tax revenue.

Unconfirmed lodgement of revenue - US$455.00

314. Regulation 12 of the FAR, 2004 (L.I. 1802) states, “A person

entrusted with custodial duties for public and trust moneys shall

protect the public and trust moneys against unlawful diversion from

their proper purposes and against accidental loss, and locate such

moneys so as to facilitate the efficient and economical discharge of

public financial business.”

315. Our audit of non-tax revenue revealed that US$455.00 was

collected as part of gate fees between May and July 2010 and

allegedly lodged into the dollar account of the Park at Bank of Ghana

(BoG). Though this amount was reported as revenue in the 2010

financial statement, we could not verify its existence because there

were no bank statements from BoG for confirmation.



316. The Accountant explained that since July 2010, the account

had been inactive so BoG might have transferred it to a dormant

account without the knowledge of management of the Park.

317. We were of the opinion that management failed to protect the

public funds and prevent unlawful diversion as otherwise required by

the FAR cited. Management’s inaction could defeat the purpose for

which the revenue was generated.

318. We recommended to management to communicate with BoG

and ensure a reversal of the account so that the money could be

applied for the proper purpose for which it was generated.

319. Management in its response indicated that it will convene a

meeting with officials of BoG for the account to be reactivated and the

amount withdrawn into the Park’s cedi account.

Imprest not accounted for - GH¢5,700

320. Regulation 283(b) of L.I. 1804 states that “Special imprest

issued for making a particular payment or group of payments must

fully be retired by the date specified in the approval to operate the

imprest.”

321. We observed on the contrary that special imprest amounting to

GH¢5,700.00 advanced between November 2010 and September 2011

to the Director and five other staff for NAFAC 2010 and 2011

Founder’s day celebration respectively have not been retired as at the

time of reporting.

322. The Accountant’s failure to ensure that the advances were

accounted for immediately the programmes were executed as required

by the FAR stated above resulted in this anomaly which could lead to

the misuse of unspent imprest.

323. We advised management to ensure the retirement of these

imprest or the full amounts recovered from the recipients in

accordance with FAR 288(1).


324. Management stated that it would take necessary steps to have

the imprest retired and also prevent a recurrence of the lapse.

Non adherence to procurement law - GH¢146,499.66

325. Section 43(1) of the PPA states “The procurement entity shall

request quotations from as many suppliers or contractors as

practicable, but from at least three different sources”.

326. We noted during the examination of payment vouchers that

management made purchases to the tune of GH¢146,499.66 without

obtaining at least three quotations from suppliers in violation of the

provision of the PPA aforementioned.

327. As a result, we could not determine the reasonableness of the

prices at which the items were bought. Consequently, economy,

transparency and assurance of value for money in the procurement

process could be compromised.

328. We advised that in future, management should either seek prior

approval from the Public Procurement Board before engaging in

single source procurement as mandated by Section 40 of Act 663 or

obtain at least three different quotations for the selection of the most

responsive quote.

329. Management in response stated that it had ceased from single

source procurements and promised to adhere strictly to relevant

provisions of the PPA.

Purchases from non-VAT registered suppliers - GH¢21,974.65

330. Contrary to Section 30(2) of the FAA 2003 which entreats all

MDAs and MMDAs to transact business with only VAT registered

suppliers, we noted that management transacted business worth

GH¢146,497.66 with non VAT registered suppliers.

331. Management’s failure to adhere to the provision of the FAA

denied government of GH¢21,974.65 in VAT revenue.



332. We urged management to desist from transacting business with

non VAT registered suppliers in adherence to the law otherwise

responsible official would be held liable for any future losses.

333. Management agreed to comply with the dictates of the FAA in

subsequent transactions.

NATIONAL THEATRE OF GHANA

Introduction

334. This report is in relation to the audited accounts of the

National Theatre of Ghana for the two year period 1 January 2010 to

31 December 2011.

Operational results

335. Operations for the year under review turned a deficit of

GH¢307,460.31 in 2010 into a surplus of GH¢67,546.14 in 2011.

Details of the performance indicators are shown in Table 14:

Table 14: Income statement for 2011

Income 2011

GH¢

2010

GH¢

%

Change

Government Subvention 886,715.61 496,149.43 78.7

Internally Generated Fund 636,072.93 501,388.77 26.9

Sundry Income 6,856.16 14,264.46 (51.9)

Total 1,529,644.70 1,011,802.66 51.2

Expenditure

Personnel Emoluments 649,179.76 370,333.26 75.3

Programme Development 163,748.37 265,736.35 (38.4)

Administrative Expenses 506,443.54 504,256.17 0.4

Travel & Transport 76,423.64 73,237.54 4.4

Maintenance & Renewals 50,132.50 86,173.50 (41.8)

Total 1,462,098.56 1,319,262.97 10.8

Surplus/(Deficit) Income 67,546.1 (307,460.3) (122.0)


336. Total income increased by 51.2% from GH¢1,011,802.66 in

2010 to GH¢1,529,644.70 in 2011. Government subvention, which

was the main source of income, contributing 58.0% of total income,

increased by 78.7% from GH¢496,149.43 in 2010 to GH¢886,715.61

in 2011. Internally Generated Fund (IGF) which was 41.6% of total

income, increased by 26.9% from GH¢501,388.77 in 2010 to

GH¢636,072.93 in 2011.

337. Total Expenditure increased by 10.8% from GH¢1,319,262.97

in 2010 to GH¢1,462,098.56 in 2011. Personal Emoluments which

accounted for 44.4% of total expenditure, increased by 75.3% from

GH¢370,333.26 in 2010 to GH¢649,179.76 in 2011 as a result of

increase in staff salaries, thereby accounting largely for the rise in

total expenditure. Programme Development expenditure dropped by

38.4% from GH¢265,736.35 in 2010 to GH¢163,748.37 in 2011 and

Maintenance & Renewals also decreased by 41.8% from

GH¢86,173.50 in 2010 to GH¢50,132.50 in 2011. Administrative

expenses however increased slightly by 0.4% from GH¢504,256.17 in

2010 to GH¢506,443.54 in 2011, while Travel & Transport expenses

also increased by 4.4% from GH¢73,237.54 in 2010 GH¢76,423.64 in

2011.

338. A sumarised balance sheet position as at 31 December 2011 is

shown in Table 15.

Table 15: Financial position as at 31 December 2011 2011

GH¢

2010

GH¢

%

Change

Fixed Assets 1,558,299.61 1,533,795.99 1.6

Current Assets 111,918.10 80,110.34 39.7

Current Liabilities 184,396.75 195,631.51 (5.7)

Net current assets (72,478.65) (115,521.17) (37.3)

Total assets 1,485,820.96 1,418,274.82 4.8

Financed by

Govt. Equity 1,940,250.00 1,940,250.00 -

Income Surplus (454,429.04) (521,975.18) (12.9)

Total 1,485,820.96 1,418,274.82 4.8



Fixed assets

339. Fixed assets appreciated marginally by 1.6% from

GH¢1,533,795.99 in 2010 to GH¢1,558,299.61 in 2011 due to the

acquisition of plant, office equipment and furniture.

Current assets

340. Current assets comprised bar stock, accounts receivables and

cash and bank balances. These increased by 39.7% from

GH¢80,110.34 in 2010 to GH¢111,918.10 in 2011. An increase of

151.1% in cash and bank balances accounted mainly for the rise in

current assets. Debts owed the Theatre (accounts receivable)

decreased from GH¢51,236.96 in 2010 to GH¢46,622.93 in 2011; a

reduction of 9.0%. Management was urged not to relent in its effort at

pursuing the recovery of all outstanding debts.

Current liabilities

341. Current liabilities reduced from GH¢195,631.51 in 2010 to

GH¢184,396.75 in 2011, a fall of 5.7%. The reduction was as a result

of the payment of 41.5% out of the amount owing for water

consumption.

Acid- test ratio

342. The Theatre recorded an acid test ratio of 0.57:1 in 2011 as

compared with the 2010 ratio of 0.38:1 indicative that management

would not be able to meet its short term obligations as and when they

fall due. We advised management to strive to improve the operational

performance of the Theatre to meet the standard enterprise ratio of

1:1.

MANAGEMENT ISSUES

Tax irregularities - GH¢3,482.93

343. Section 87 of Internal Revenue Act 2000 (592) provides that

withholding taxes should be deducted from the payment of goods and

services procured and remitted to the district tax office within 15 days

after the month in which the eligible payments were made.


344. During our review of payment vouchers, we however noted

that withholding taxes amounting to GH¢2,720.43 deducted between

April 2010 and December 2011 from payments made to suppliers of

goods and services have not been paid to the Commissioner, DTRD of

the GRA.

345. We also noted that the Accountant withheld 5% tax from the

sitting allowances of the Board members instead of 10% as stated in

Part IV of the First Schedule to the above stated Act, resulting in

under-deduction of tax amounting to GH¢742.50.

346. The foregoing situation which resulted from laxity on the part

of the Accountant adversely affected inflow of funds into the

Consolidated Fund.

347. We advised management to ensure that, the unremitted

withheld tax of GH¢2,740.43 is paid to the DTRD of the GRA

without delay. We recommended also that, the amount of GH¢742.50

which was the shortfall on the tax withheld on Board members sitting

allowances should be paid to the revenue authority and subsequently

recovered from the members.

348. Management accepted the recommendation for compliance and

stated that on the issue of the tax on sitting allowances, it needed to

study the schedule quoted above for appropriate action.

Payment vouchers not presented for audit

349. Contrary to Regulation 1 of the FAR, payment vouchers valued

at GH¢21,753.85 supposedly raised for various activities during the

period under review were not presented for audit.

350. Consequently, the authenticity of the payments could not be

determined.

351. We attributed this lapse to the Accountant’s failure to keep

proper records and lack of managerial supervision over the work of

the Accounts Section.



352. We recommended, and management accepted to ensure that the

payment vouchers together with the supporting documents are located

for our examination, failing which the Accountant should be made to

refund the amount involved.

Official vehicle without log book

353. We noted that an official vehicle No. GR 2019 T belonging to

the National Theatre had no vehicle log book. In effect, a total

amount of GH¢3,800.00 worth of fuel allegedly issued to the driver of

the above mentioned vehicle could not be accounted for in

contravention of Chapter 1604 of Stores Regulations 1984 which

states that a Vehicle Log Book shall be maintained for each

government vehicle to record all receipts of fuel and journeys

undertaken.

354. We could therefore not ascertain whether the fuel issued was

used in the interest of National Theatre and blamed the above situation

on management’s failure to acquire a log book for the vehicle.

355. We recommended and management accepted to ensure that a

vehicle log book is provided for the above mentioned vehicle and also

to ensure that details of fuel issued are record by the driver and

journeys made duly signed for by the officer using it, to ensure

accountability and efficient use of fuel.

GHANA DANCE ENSEMBLE

Introduction

356. This report relates to the audited accounts of Ghana Dance

Ensemble for the period 1 January 2011 to 31 December 2012.

Operational result

357. Though the operations of the year under review ended in a

surplus of GH¢19,193.75, it registered a drop of GH¢10,312.61 or

34.9% compared to the previous year’s surplus of GH¢29,506.36.

Table 16 is the performance indicators.



Income 2012

GH¢

2011

GH¢

Change

GH¢

%

Change

G O G 419,141.08 332,148.16 86,992.92 26.1

I G F 96,814.00 78,271.50 18,542.50 23.7

Total 515,955.08 410,419.66 105,535.42 25.7

Expenditure

Employee

compensation

415,037.50 323,242.50 91,795.00 28.3

Administration 81,723.83 57,670.80 24,053.03 41.7

Total 496,761.33 380,913.30 115,848.03 30.4

Surplus/Deficit 19,193.75 29,506.36 (10,312.61) (34.9)

358. Ghana Dance Ensemble recorded a total income of

GH¢515,955.08 in 2012 against GH¢410,419.66 in 2011 representing

an increase of 25.7%. Government subvention, which was the main

source of income, contributing 81.2% of total income, increased by

26.1% from GH¢332,148.16 in 2011 to GH¢419,141.08 in 2012 as a

result of increase in releases for employees’ compensation. Internally

Generated Fund (IGF) which is solely Performance fees increased to

GH¢96,814.00 from GH¢78,271.50 in 2011 an increase representing

23.7%.

Expenditure

359. Total expenditure for the year 2012 increased to

GH¢496,761.33 from GH¢380,913.30 in 2011 representing 30.4%.

Employees’ compensation witnessed a rise of GH¢91,995.00 in 2012

from GH¢323,242.50 in 2011 to GH¢415,037.50 in 2012 representing

a 28.3% increase. The increase in employees’ compensation was due

to salary increase by the Central Government.

360. Administrative expenses increased from GH¢57,670.80 in

2011 to GH¢81,723.83 in 2012 representing an increase of 41.7%.

Significant among the administrative expenses were running cost of

vehicle which increased from GH¢6,214.00 in 2011 to GH¢9,300.00

in 2012 and medical expenses also increasing by GH¢4,178.78 from

GH¢4,509.82 to GH¢8,688.61 in 2012.



Financial position

361. The Ensemble’s balance sheet as at 31 December 2012 is

provided in Table 17.


2012

GH¢

2011

GH¢

Change

GH¢

%

Change

Non-current asset 12,560.73 13,489.52 (928.79) (6.9)%

Current asset 128,603.89 104,438.28 24,165.61 23.1%

Total 141,164.62 117,927.80 23,236.82 19.7%

362. Non-current assets dropped to GH¢12,560.73 in 2012 as

against GH¢13,489.52 in 2011 representing a 6.9% fall. This was due

to an increase in accumulated depreciation charged. However, current

assets increased by GH¢24,165.61 or 23.1%, from GH¢104,438.28 in

2011 to GH¢128,603in 2012. The increase was due to a deposit of

cash amounting to GH¢35,435 against the supply of a vehicle. The

increase in current assets mainly contributed to the increase in total

assets by 19.7% from GH¢117,927.80 in 2011 to GH¢141,164.62 in

2012.

363. Ghana Dance Ensemble registered no current liabilities.

MANAGEMENT ISSUES

Fuel coupons not accounted for- GH¢2,260.00

364. Section 31(1) of the FAA states “a head of department is

accountable for the government stores from time of acquisition to the

time they are of no further use or value to government. The Act also

states that 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.”

365. We observed during the period reviewed that, fuel coupons

totalling GH¢2,260.00 issued by the accounts officer to vehicle No.

GT1862 Y was not recorded in the vehicle log book.


366. We attributed the omission to management’s failure to

effectively supervise and monitor the use of fuel. We were therefore

unable to ascertain whether the fuel was used in the interest of Ghana

Dance Ensemble.

367. To ensure transparency in the use of fuel and avoid recurrence

of this irregularity, we recommended that the driver should account

for the use of the unrecorded fuel; otherwise the amount should be

recovered. Additionally, management should step up supervision and

ensure that, the drivers are given adequate training on the maintenance

of vehicle logbook.

368. Management accepted our recommendation and assured us of

compliance.

W. E. DUBOIS CENTRE

Introduction

369. This report is in relation to the audited accounts of the W.E.

Dubois Centre for the period 1 January 2010 to 31 December 2011.

Operational results

370. Income for the period rose by 98.8% from GH¢97,589.75 in

2010 to GH¢193,991.29 in 2011. The significant increase was due to a

52.2% increase in Internally Generated Funds (IGF). Presented in

Table 18 is the Centre’s performance for the period.

Table 18: Comparative income statement for 2011 and 2010 Income

2011 GH¢

2010 GH¢

% Change

Subvention 70,677.49 21,021.77 236.2

Other Income (IGF) 116,543.80 76,567.98 52.2

Refunds 6,770.00 -

Total 193,991.29 97,589.75 98.8

Expenditure

Personal Emoluments 83,124.45 31,806.73 161.3


Service Expenses 18,118.55 3,866.02 368.8

Total Expenditure 217,919.61 90,120.57 141.8

Surplus/Deficit (23,928.32) 7,469.18 (420.4)



371. Total Expenditure for 2011 increased from GH¢90,120.57 in

2010 to GH¢217,919.61 in 2011 representing an increase of 141.8%.

Personnel Emoluments which is one of the components of total

expenditure increased significantly, from GH¢31,806.73 in the

previous year to GH¢83,124.45 in 2011, an increase of 161.3%.

372. The rise was attributed to an increase in staff salaries resulting

from the implementation of the Single Spine Salary Structure.

Administrative expenses rose by 114.3% from GH¢54,447.82 in 2010

to GH¢116,676.61 in 2011. The cost of rewiring of the whole office

and land scrapping to beautify the museum largely accounted for the

increase. Service expenses rose from GH¢3,886.02 in 2010 to

GH¢18,118.55 in 2011.

373. The significant rise of 368.7% over the last year’s expenditure

was due to the purchase of new equipments for the Centre’s Guest

House.

374. An operational deficit of GH¢23,928.32 was recorded in 2011

as against a surplus of GH¢7,469.18 in 2010.

Financial position

Non-current assets

375. The Centre’s balance sheet did not include non-current assets.

Management explained that most of the buildings had still not been

valued and even though it was its desire to do so, financial constraints

had delayed the valuation. Management however hopes to get the

valuation done in the near future.

Current assets

376. Current assets fell by GH¢15,802.23 or 57.6%, from

GH¢27,454.83 in 2010 to GH¢11,652.60 in 2011. The significant

reduction in cash and bank balance accounted for the fall.


Current liabilities

377. In 2011, total liability was GH¢8,126.09 as against a nil

balance in 2010. The Centre purchased a Nissan pick-up truck from

Modern Auto Service and the amount represents the remaining

balance yet to be settled. The net assets of the Centre for the period

under review therefore stood at GH¢3,526.51.

378. The Centre’s liquidity position as depicted by its current ratio

of 1.4:1 indicates that the Centre can meet its short term obligations

when they fall due.

MANAGEMENT ISSUES

Cash payments resulting in loss of tax revenue - GH¢7,641.38

379. Regulation 48 of L. I. 1802 mandates a head of department to

keep cash holdings to the absolute minimum consistent with the

official discharge of public financial business by ensuring that

collections or payments are made by cheque, bank transfer or direct

payments to bank accounts.

380. We noted during our examination of payment vouchers that the

use of cheques, bank transfers or direct payment to bank accounts was

rather minimal. We observed that cash amounting to GH¢61,282.26

and GH¢91,545.35 were paid in 2010 and 2011 respectively.

381. As a result of management’s failure to adhere to the provision

of the above stated regulation, withholding tax of GH¢7,641.38 due

the state were not deducted and subsequently paid to the relevant

authority. Also, the practice could lead to uncontrolled expenditure.

382. We recommended and management agreed to desist from the

practice and comply with the stipulation of the aforementioned FAR.

Payments without official receipts - GH¢52,529.57

383. Regulation 28 of the FAR requires that official receipts should

be obtained for all payments made.



384. We however noted that no official receipts were provided to

support payments totalling GH¢52,529.57 made to service providers

during the review period. We attributed the irregularity to failure of

the paying officer to demand the relevant receipts from the recipients

to authenticate the payments. We could therefore not determine

whether the payments were made to the intended beneficiaries.

385. For proper accountability and transparency in the utilisation of

public funds, we advised management to ensure that the paying officer

obtains the receipts for these and subsequent payments; otherwise the

amount should be refunded.

386. Management stated that efforts would be made to obtain the

receipts for our perusal.

Unaccounted for revenue - GH¢404.50 and $687.38

387. FAR 17 stipulates that a head of department shall ensure that

all non-tax revenue is efficiently collected and immediately lodged in

the designated Consolidated Fund Transit bank account except in the

case of Internally Generated Fund (IGF) retained under enactment.

388. We however noted that between January and August 2010, out

of GH¢1,207.50 IGF collected, only GH¢803.00 was accounted for,

leaving a difference of GH¢404.50. The lapse was due to instances

where there were no entries in the cash book and the understatement

of revenue recorded.

389. We also observed that out of US$1,354.00 realised during the

period, the Cashier banked only US$666.62 leaving an outstanding

balance of US$687.38 unaccounted for. Lack of managerial reviews

and supervision occasioned this lapse which deprived the Centre of

much needed funds to execute planned programmes.

390. We advised management to recover the amount from the

Cashier and improve on internal controls and managerial reviews to

prevent a recurrence of the anomaly.


391. Management in response stated that most of the amounts were

not credited lodgments. We however opined that the preparation of

monthly bank reconciliation statements which management failed to

ensure could have exposed this anomaly and recommended that the

outstanding amounts should be investigated and appropriate action

taken.

Tax irregularity - GH¢2,503.50

392. In contravention of Section 87(1) of the Internal Revenue Act,

our audit revealed that management failed to remit to the DTRD of

GRA taxes amounting to GH¢566.63 withheld from purchases worth

GH¢11,332.60.

393. In another development, management paid an amount of

GH¢50,070.00 to Modern Automobile and Biz Geo Company without

deducting GH¢2,503.50 as withholding tax.

394. Management’s inability to withhold and pay the taxes promptly

to the Commissioner could distort the revenue projections of the state

and attract penalties to the detriment of the Centre.

395. We advised management to remit the amount involved to the

DTRD and obtain a receipt for our inspection and in future put in

place the mechanisms necessary to ensure compliance with the tax

law.

396. Management subsequently paid the withheld tax of GH¢566.63

on 17 April 2012 and presented an exemption letter from Ghana

Revenue Authority in favor of Modern Autos Services but the period

for exemption was for the 2012 financial year.

397. We therefore requested management to ensure full payment of

the withholding tax of GHȼ2,503.50 which was not deducted from

payments to Modern Autos Service and Biz Geo to the revenue

agency.



Purchases from non-VAT registered suppliers

398. We noted that contrary to Section 30(2) of the FAA, 2003

which requires all MDAs and MMDAs to transact business with only

VAT registered suppliers, management transacted business worth

GH¢22,668.49 with non-VAT registered suppliers.

399. Consequently, the state was denied VAT/NHIL revenue of

GH¢3,400.27.

400. The lapse was attributed to management’s failure to adhere to

the provisions of the above stated Act.

401. We recommended and management agreed to transact business

with suppliers who are VAT registered in order to generate revenue

for the state.

Unearned salary - GH¢358.26

402. Our payroll review disclosed that Mr. Ayang Oliver, who

retired on 4 May 2011, continued to receive salary until the end of

July 2011. A total net unearned salary of GH¢358.26 was as a result

paid into his bank account.

403. The lapse was due to management’s delay in notifying C&AG

to delete the separated staff’s name from the payroll and the bank to

withhold the amount and subsequently pay same into the Consolidated

Fund.

404. Management’s inaction which violated Regulations 297 and

298 of L. I 1802 could result in the loss of the amount.

405. We therefore advised management to promptly recover the

amount from either the ex-employee or his bankers if it has not been

withdrawn into the Consolidated Fund and in future ensure strict

adherence to the financial regulations cited.

406. Management agreed to comply and to put in the necessary

controls to curtail future occurrences.


Fuel purchased not accounted for - GH¢1,181.00

407. The Centre failed to maintain records for fuel worth

GH¢1,181.00 purchased for two official vehicles with registration

Nos. GV 5123 D and GV 764 E. The anomaly contravened Chapter

1604 of Stores Regulations 1984 which requires the maintenance of

vehicle log books to record journeys undertaken and particulars of

receipt of fuel, oil and lubricants.

408. The omission could encourage diversion and misuse of fuel.

409. We recommended that the drivers should account for the fuel,

failing which the amount of GH¢1,181.00 should be recovered and

paid into the Centre’s bank account. We also recommended that

sufficient controls be instituted by management to ensure that drivers

log all fuel purchased or issued to them.

ABIBIGROMMA THEATRE COMPANY

Introduction

410. This report relates to the audited accounts of the Abibigromma

Theatre Company for the period 1 January 2011 to 31 December

2012.

Operational results

411. The Theatre Company ended its operations for 2012 with a

surplus of GH¢4,823.04 as against the previous year’s surplus of

GH¢4,521.10 representing an increase of 6.7%. The main

performance indicators are shown in Table 19.


GH¢ 2011 GH¢

% Change

Government Subvention 5,100.09 6,603.39 (22.8)

Internally Generated Fund 81,764.90 33,140.20 146.7

Others 1,408.00

Total 88,272.99 39,743.59 122.1

Expenditure


Total 83,449.95 35,221.68 136.9

Excess Expenditure/Income 4,823.04 4,521.91 6.7



Income

412. Total income registered an increase of 122.1% from

GH¢39,743.59 in 2011 to GH¢88,272.99 in 2012. The IGF, which

was the main source of income, contributed 92.6% of total income. It

increased significantly by 146.7%, from GH¢33,140.20 in 2011 to

GH¢81,764.90 in 2012. This was due to increase in theatre

performances especially in second cycle institutions and outside

Ghana. Government subvention, which was also 5.8% of total

income, decreased by 22.8% from GH¢6,603.39 in 2011 to

GH¢5,100.09 in 2012. Other Income contributed a meager 1.6% of

total income.

Expenditure

413. Total expenditure, mainly administrative expenses, increased

by 136.9% from GH¢35,221.68 in 2011 to GH¢83,449.95 in 2012.

The high increase in expenditure on production cost from

GH¢13,331.80 in 2011 to GH¢32,424.44 in 2012 and the payment of

long service award of GH¢17,040.92 accounted largely for this.

Financial Position

414. A sumarised balance sheet of the Theatre Company as at 31

December 2012 is provided in Table 20


2012

GH¢

2011

GH¢

%

Change

Current Assets 11,900.98 7,417.23 60.5

Current Liabilities 339.29

Net Assets 11,900.98 7,077.94 68.1

Current Assets

415. Current assets comprised Costumes and Props, Bank Balance

and Debtors. This went up from GH¢7,417.23 in 2011 to

GH¢11,900.98 in 2012 representing a 60.5% rise.


416. This was due to increase in bank balance by 89.3%, rising

from GH¢4,361.65 in 2011 to GH¢8,258.00 for the year under review

resulting from increased receipts from theatre performances. Debtors

increased by 49.3% from GH¢1,190.95 in 2011 to GH¢1,778.55 in

2012. The debtors figure included advances due from retired and

resigned staff amounting to GH¢1,190.95 with some dating as far

back as 1997. The ineffective loan recovery system instituted by

management accounted for this. Management was advised to put in

place an effective loan recovery mechanism, which would ensure full

recovery of all debts.

Accumulated Fund

417. The accumulated fund of the Company increased to

GH¢11,900.98 in 2012 as against GH¢7,077.94 in 2011.

MANAGEMENT ISSUES

Unearned salary – GH¢3, 128.94

418. Our payroll audit disclosed that two separated officers of the

Theatre Company were wrongly paid a total salary of GH¢3,128.94 in

violation of Regulation 297 of L.I.1802 which requires a head of

department to immediately cause the stoppage of payment of salary to

a public servant separated either by death, resignation or vacation of

post.

419. We attributed the irregularity to management’s failure to

inform the Controller and Accountant-General immediately the above

officers were separated for their names to be deleted from the payroll.

Management’s inaction led to the state losing scarce resources which

could be channeled into developmental projects.

420. We recommended that the unearned salary should be recovered

from the separated officers or their bankers if the monies have not

been withdrawn and lodged into the Consolidated Fund, otherwise the

spending officer and accountant whose inaction caused the loss should

be surcharged. Management should also institute measures against

future occurrence.



421. Management stated that the Accountant General’s Department

was informed but no evidence was provided to this effect. However,

management assured us that it will verify from the various banks to

ascertain if the moneys had been returned to chest.

NATIONAL COMMISSION ON CULTURE

Introduction

422. This report relates to the audited accounts of the National

Commission on Culture for the period 1 January 2010 to 31 December

2011.

Operational result

423. The operation of the Commission for 2011 ended with a

surplus of GH¢123,176.41 as compared with the 2010 surplus of

GH¢233,478.21, which showed a reduction of 47.2%.

424. The Commission’s total income for 2011 was GH¢549,065.13

as against GH¢527,323.50 for 2010, representing an increase of 4.1%.

Government subvention which was the main source of income

representing 96.5% of total income increased by 5.7%, from

GH¢501,277.50 in 2010 to GH¢530,025.13 in 2011 accounting for the

rise in total income. The other source of income, Other Income

however reduced to GH¢19,040.00 in 2011 from GH¢26,046.00 in

2010, representing a fall of 27.0% Presented in Table 21 are the




GH¢

2010

GH¢

%

Change

Subventions 530,025.13 501,277.50 5.7

Others 19,040.00 26,046.00 (27.0)

Total 549.065.13 527,323.50 4.1

Expenditure

Administration Expenses 98,685.98 62,241.75 58.6

Personnel Emolument 325,782.74 194,705.45 67.3

Programmes 1,420.00 25.886.26 (94.5)

Service - 11,021.83 -

Total 425,888.72 293,855.29 44.9

Surplus/Deficit 123,176.41 233,468.21 (47.2)

425. Total expenditure for 2010 and 2011 was GH¢293,855.29 and

GH¢425,888.72 respectively. This showed an increase of 44.9%. The

sharp rise of 67.3% in Personnel Emolument from GH¢194,705.45 in

2010 to GH¢325,782.74 in 2010 as a result of salary increase and

payment of arrears contributed largely to the increase in total

expenditure.

Financial position

426. The components of the Commission’s financial position are

shown in Table 22:

Table 22: Balance sheet as at 31 December 2011 Item 2011

GH¢

2010

GH¢

%

Change

Non-current assets 708,151.29 608,594.88 16.4

Current asserts 31,057.18 6,913.62 349.2

Current liabilities 696.02 696.00 0.0

Net assets 738,512.45 614,812.50 20.1

Represented by

Accumulated Fund 731,872.53 608,696.12 20.2

Car Loan Revolving Fund 6,639.92 6,116.38 8.6

Total 738,512.45 614,812.50



427. In 2011 fixed assets of the Commission increased to

GH¢708,151.29 from GH¢608,594.88 in 2010, representing a rise of

16.4% as a result of addition to buildings.

428. Current assets increased by 349.2% to GH¢31,057.18 during

the period under review as compared with GH¢6,913.62 in the

previous year. This was due to a 228.4% increase in debtors and a

382.2% rise in bank balance as a result of the receipt of late

subvention for 2011, Current liabilities did not show any change.

429. The current ratio of 44.6:1 in 2011 as against 9.9:1 in 2010

showed a marked improvement and with that the Commission can

meet its short-term obligation when it falls due.

MANAGEMENT ISSUES

Procurement from non VAT registered persons - GH¢20,496.00

430. Regulation 183(4) of the Financial Administration Regulation

(FAR) 2004 states that a department shall procure government stores

from only Value Added Tax (VAT) registered persons or entities and

any department that requires an exemption for any specific case shall

apply to the Minster with the necessary justification.

431. On the contrary, we noted that the Commission procured

stationery from Upstairs Complex and services from Akosombo

Continental Hotel amounting GH¢20,496.00 without VAT/NHIL

invoice to support the payments, indicative that the companies were

not VAT registered entities. There was also no approval from the

Minister for the Commission to procure from the non VAT registered

entities as otherwise required by the financial regulation.

432. Non-compliance with the FAR resulted in the loss of

GH¢3,074.40 in VAT/NHIL revenue accruing to the state.

433. We therefore recommended and management agreed to adhere

to the above cited provisions of the FAR in subsequent transactions or

responsible officials surcharged for any future losses.


Improper maintenance of vehicle log book

434. Stores Regulations 1604 and 1605 require among others that

the full particulars of fuel, oil and lubricants shall be entered up daily

in the log book by the driver and at the end of each month the rate of

fuel consumption shall be computed in kilometres per litres and

recorded in the log book.

435. During our review of transport management, we observed that

though vehicle log books were allocated to pool vehicles, the transport

officer failed to ensure full compliance with the above quoted

regulations. The reason for this lapse was partly due to instances

where fuel drawn was recorded only in monetary value without the

corresponding quantity in litres. We also observed instances where

fuel amounting to GH¢1,250.00 out of GH¢6,860.00 worth issued to

official vehicles were not recorded in any of the log books.

436. Due to these lapses, we could not confirm whether the fuel not

logged was actually used in the furtherance of the Commission’s

programmes. We could also not confirm the efficiency of the

Commission’s vehicles and the reasonableness of the use of the fuel

worth GH¢6,860.00 bought during the review period.

437. We recommended that in future, management should ensure

that fuel drawn by all vehicles are recorded in both quantity and value

in the log books by the drivers failing which the drivers should be

held liable for a refund of the amount involved. Also, monthly average

fuel consumptions should be computed by each driver and reviewed

by the transport officer to inform management decision.

MINISTRY OF EDUCATION

UNIVERSITY OF GHANA

Introduction

438. This report is in respect of the consolidated audited accounts of

the University of Ghana for the period 1 January 2007 to 31

December 2009.



Operational results

439. Table 23 presents the performance indicators for the last two

years.

Table 23: Performance indicators for 2009 and 2008

Income

2009

GH¢

2008

GH¢

%

Change

Government Grant 47,257,617 46,165,148 2.4

Internally Generated Fund 38,176,202 23,056,612 65.6

Total Income 85,433,820 69,221,760 23.4

Expenditure

Staff Emoluments 41,999,231 34,052,764 23.3

Other Expenditure 38,393,467 23,493,262 63.4

GET FUND Projects 3,190,622 5,305,416 (39.9)


Surplus/(Deficit) 1,850,499 6,370,318 (70.9)

440. Total Income realized for 2009 amounted to GH¢85,433,820,

thus registering an increase of GH¢16,212,060 or 23.4% over the

previous year’s figure of GH¢69,221,760. Internally Generated Funds

(IGF) contributed 44.7% of total income for year 2009 whilst

Government Grants accounted for 55.3%. The increase in IGF was

mainly attributed to the rise in Student Academic fees and Student

Registration and Exams fees.

441. Total Expenditure increased by 32.9% from GH¢62,851,442 in

2008 to GH¢83,583,321 in 2009. The rise was mainly due to

increases in Staff Emoluments, Staff Training Expenses, Repairs and

Maintenance of Property, Utility and Financial Services expenses.

442. The School’s operations for 2009 ended with a surplus of

GH¢1,850,499 as against a surplus of GH¢6,370,318 reported in the

previous year, representing a decrease of 70.9%.


Financial position

443. Presented in Table 24 is the sumarised balance sheet as at 31

December 2009.


2009

GH¢

2008

GH¢

%

Change

Long Term Investment 12,252,764 11,171,625 9.7

Current Assets 35,186,028 32,122,466 9.3

Current Liabilities 12,804,235 14,384,391 (10.9)

Net Current Assets 22,381,793 17,738,075 26.3

Net Total Assets 34,634,556 28,909,701 19.8


444. Long Term Investment which was made up of equity in UGEL

and other Long-term Investments increased by 9.7% from

GH¢11,171,625 in 2008 to GH¢12,252,764 in 2009. This was as a

result of 9.8% rise in Equity in UGEL.

445. Current Assets increased by 9.3% from GH¢32,122,466 in

2008 to GH¢35,186,028. This was largely due to a 22,134.3% rise in

Staff Personal Accounts.

446. The decline in Current Liabilities from GH¢14,384,391 in 2008

to GH¢12,804,235 in 2009 was mainly due to reduction in Sundry

Creditors and Provisions made.

447. The Current ratio of 2.7:1 (2008:2.2:1) showed the School is

solvent and can meet its short term obligations when they fall due.

MANAGEMENT ISSUES

Volta Hall

Rent Arrears: - US$3,325.00

448. We noted that Professor A. Oladosu, a visiting Professor at the

Department of Modern Languages was hosted by the Hall in 2008.

The total rent charged amounted to US$3,325.00 as at 30 June 2008.



However, the rent due had still not been settled as at 31 December

2009. We recommended that management of the Hall should follow

up to Department of Modern Languages and ensure that the rent due is

settled.

449. Management indicated that a letter was written to the Director

of Finance to demand the payment but this was yet to be settled.

Institute of Statistical Social and Economic Research

Non-deduction of withholding taxes - GH¢3,302.80

450. We observed during the audit that withholding taxes amounting

to GH¢3,302.80 were not deducted on the allowances paid to research

assistants, members of staff and other personnel engaged by the

Institute to work on its projects. This practice impact adversely on the

inflow into the Consolidated Fund. The breakdown is as follows:

Project

Amount

Paid

GH¢

Tax

(10%)

Project Management 6,500 650.00

Honorarium 6,538 653.80

Data Management 7,580 758.00

Research Methods 4,660 466.00

Honorarium 7,750 775.00

Total 33,028 3,302.80

451. We recommended that withholding taxes should be deducted

from all payments made to personnel on the project and the deducted

taxes paid to the Commissioner of the Domestic Tax Revenue

Division of the Ghana Revenue Authority to enhance cash flow into

the consolidated fund.

Basic School

Pupils Indebtedness - GH¢53,201.70

452. We noted that Pupils indebtedness to the school amounted to

GH¢53,201.70 as at 31 December 2009, an increase of 27% over the


previous year. Out of the total indebtedness, an amount of

GH¢25,592.24 represented outstanding fees owed by School Leavers

and Pupils who have been withdrawn between 1990 and 2009. The

remaining amount of GH¢27,609.46 relates to fees owed by existing

Pupils.

453. We were of the view that this affects the smooth running of the

school’s programme and objectives.

454. We recommended that Management of the School should

ensure that arrears of fees are collected promptly from fee defaulters

before final examinations. Also stringent measures should be adopted

to recover the debts from pupils who have left the School. Where

recovery is doubtful, appropriate steps should be taken in line with

existing regulation to write off the debts.

Guest Centre

Debtors Balances - GH¢169,922.42

455. We observed that a total amount of GH¢169,922.43 was owed

the Centre as at 31 December 2009. Out of this amount three units of

the University constituted about 50% (GH¢84,716.88) of the total

debts owed the Centre. The debts of these Units have also increased

significantly in the year 2009.

456. The nonpayment of the debt could make the Guest house run

into financial distress with its attendant implications. Below are the

Units and their respective debts and increments over the period.

Name of Unit

2009

GH¢

2008

GH¢

%

Change

Registrar’s Office 39,473.14 12,053.34 227.5

P.D.M.S.D. 12,774.85 7,142.55 78.9

Public Affairs Directorate 32,468.89 25,608.49 26.8

84,716.88 44,804.38

457. We recommended that management should ensure that Units of

the University settle their debts promptly to enhance the Centre’s

liquidity position. Alternatively, the debts owed by the Units of the



University could be off set against the annual 50% of net profit returns

the Guest Centre pays to the main University.

Physical Development and Municipal Service Directorate

(PDMSD)

Internal Revenue Office

Collection of debts

458. Our audit disclosed weaknesses in the collection of electricity

and water bills from tenants who used the University’s resources to

promote their business activities. We noted that most of the tenants

did not pay for electricity bills at their premises. Notable among the

defaulters are the under listed tenants who did not pay any bill for the

year 2009:

Client Payment for

the year 2009

A/c No Bal at year end

31/12/2009(GH¢)

Amagamated

Networks None 219

21,803.81

Felicia Tendar None 224 382.60

Gladys Boatemaa None 201 266.60

Elitopher None 208 2,192.70

Media Designs Gh¢400 215 731.33

Trendy Fashion None 217 310.81

Kingdwosco None 221/258 11,460.21

Total 37,148.06

459. The lapse could be attributed to ineffective follow up of these

debts to ensure that the defaulters settle their bills on time or were

disconnected.

460. Consequently this would negatively affect the cash flow

position of the University.

mailto:BAL@YEAR%20END%2031/12/2009(GH¢)

mailto:BAL@YEAR%20END%2031/12/2009(GH¢)


461. We recommended that stringent measures are taken to have

these defaulters settle their debts and subsequently pay for all utility

services used.

UNIVERSITY OF GHANA

SCHOOL OF PHARMACY, COLLEGE OF HEALTH

SCIENCES

Introduction

462. This report covers the audited accounts of the University of

Ghana, School of Pharmacy, college of Health Sciences for the

seventeen month period ended 31 December 2009.

Operational results

463. Total Income received in 2009 was GH¢369,036 comprising

Subvention and Grants of GH¢221,640 which represented 60.1% of

the total income and Internally Generated Income of GH¢147,396

accounted for 39.9% of total income. Personnel Emoluments of

GH¢189,472 accounted for 85.5% of the Subvention and Grants

received during the year.

464. Presented in Table 25 are the operational details.


Income

2009

GH¢

Subvention and Grants 221,640

Internally Generated Income 147,396

369,036

Expenditure

Personnel Emoluments 183,658

General and Admin. Expenses 40,368

Financial charges 36

Procurement of Fixed Assets 37,234

261,294

Surplus 107,742



465. Total Expenditure for the year under review was GH¢261,294.

Significant among the expenditure included personnel emoluments of

GH¢183,658 representing 70.3% of the total expenditure and general

and administrative expenses of GH¢40,368 and procurement of fixed

assets of GH¢37,233 accounted for 15.4% and 14.2% respectively of

the total expenditure. Salaries and wages of GH¢178,601 accounted

for 97.2% of the personnel emoluments.

466. The School’s operation for the year ended with a surplus of

GH¢107,742 which had been transferred into the accumulated fund.

Financial Position

467. Table 26 presents the financial position of the School.

Table 26: Financial Position as at 31 December 2009

2009

GH¢

Current Assets 110,042

Current Liabilities 2,300

Current Ratio 47.8:1

468. The Current Assets at the end of the seventeen month period

was GH¢110,042. This largely comprised Cash and Bank balances of

GH¢107,420 and Inventory of GH¢2,622. Cash and Bank balances

accounted for 97.6% of the Current Assets.

469. The corresponding current liabilities was GH¢2,300.00 and this

represented outstanding audit fees.

470. The Current ratio of the School stood favourably at 47.8:1 in

2009 indicating that the School would be able to meet its short term

debts as and when they fall due


MANAGEMENT ISSUES

Absence of fixed assets register

471. We noted that fixed assets register was not kept to record

details of the assets belonging to the School. This weakness had the

potential of making the School’s assets vulnerable to theft as well as

exchanging one make of equipment for another without detection.

472. We attributed the weakness to lax supervision by management.

473. We therefore recommended that a fixed asset register should be

maintained to take record of assets acquired.

UNIVERSITY OF GHANA

SCHOOL OF PUBLIC HEALTH, COLLEGE OF HEALTH

SCIENCES

Introduction

474. This report relates to the audited accounts of the University of

Ghana, School of Public Health, College of Health Sciences for the

year ended 31 December 2009.

Operational Results

475. Total Income of the School of Public Health, which was

made up of Government Subvention and Internally Generated Income

rose from GH¢1,153,040 in 2008 to GH¢1,981,357 in 2009. The rise

of 71.8% was a result of 40.1% increase in Government Subvention

and 150.8% increase in Internally Generated Income. The rise in

Internally Generated Income was largely due to collection of school

fees of GH¢508,217 in 2009 and 14,176.1% increase in Other Income

from GH¢980.00 in 2008 to GH¢139,906 in 2009. Table 27 provides

details of the main performance indicators.




Income

2009

GH¢

2008

GH¢

%

Change

Government Subvention 1,152,482 822,542 40.1

Internally Generated Income 828,875 330,499 150.8

1,981,357 1,153,040 71.8

Expenditure

Personnel Emolument 1,161,218 706,381 64.4

General and Admin.

Expenses

376,284 247,010 52.3

Finance Expenses 3,898 1,639 137.8

Procurement of fixed Assets 203,016 177,187 14.6

1,744,417 1,132,217 54.1

Surplus/(Deficit) 236,940 20,824 1,037.8

476. Total Expenditure for the year under review also increased

significantly by 54.1% from GH¢1,132,217 in 2008 to GH¢1,744,417

in 2009. The increase was mainly due to significant increases in

Personnel Emoluments, General and Administrative Expenses and

Finance Expenses. Personnel Emoluments which went up by 64.4%

was mainly due to 65% increase in Salaries and Allowances from

GH¢628,615 in 2008 to GH¢1,037,364 in 2009. The 52.3% increase

in General and Administrative Expenses was as a result of increases in

telephone and Fax/Internet Subscription bills and short course

Administrative expenses.

477. The School of Public Health registered an operational surplus

of GH¢236,940 during the year, compared with GH¢20,824 recorded

in the preceding year, representing a rise of 1,037.8%.

Financial Position

478. Table 28 provides the financial position of the School as at 31

December 2009.


Table 28: Financial Position as at 31 December 2009

2009

GH¢

2008

GH¢

%

Change

Current Assets 1,613,951 1,256,854 28.4


Net Assets 439,455 209,843 109.4



2008 to GH¢1,613,951 in 2009. The increase in Current Assets was

mainly due to increases in Cash and Bank Balances at the year-end

and Accounts Receivable.

480. Current Liabilities also increased by 12.2% from

GH¢1,047,011 in 2008 to GH¢1,174,497 in 2009. This was largely

due to significant rise in Grant Balances from GH¢643,118 in 2008 to

GH¢801,086 in 2009.

481. The Current ratio measuring the liquidity position of the School

was 1.37.1 in 2009 as against 1.20:1in 2008, an indication that the

School would be unable to meet its short term obligations as and when

they fall due.

UNIVERSITY OF GHANA MEDICAL SCHOOL

COLLEGE OF HEALTH SCIENCES

Introduction

482. This report relates to the audited accounts of the University of

Ghana, Medical School, College of Health Sciences for the year ended

31 December 2009.

Operational Results

483. Total Income for the year under review fell marginally by 0.9%

from GH¢11,115,283 in the previous year to GH¢11,018,187.00 in

2009. The decrease was as a result of reduction in Subvention and

Grants and a fall in Internally Generated Income for the year under

review. Table 29 shows the performance components for the period

under review.




Income

2009

GH¢

2008

GH¢

%

Change

Subvention and Grant 7,826,665 7,883,525 (0.7)

Internally Generated Income 3,191,522 3,231,758 (12)

Total Income 11,018,187 11,115,283 (0.9)

Expenditure

Personnel Emolument 9,638,239 7,415,268 30.0

General and Admin.

Expenses

860,878 691,315 24.5

Financial Charges 50,550 29,120 73.6

Procurement of Fixed Assets 405,515 217,563 86.4


Surplus/(Deficit) 63,005 2,762,017 (97.7)

484. Total expenditure increased by 31.1% from GH¢8,353,266 in

2008 to GH¢10,955,182 in 2009. The increase was mainly due to

30% increase in Personnel Emolument; 24.5% increase in General and

Administrative Expenses and 86.4% increase in Procurement of Fixed

Assets. The rise in Personnel Emolument was largely due to increases

in salaries and wages, Pension and Gratuity and Book and Research

Grant. The rise in General and Administrative Expense was due to

increase in repairs and maintenance of building and motor vehicles.

485. Procurement of fixed Assets increased because of acquisitions

of additional assets such as furniture, fixtures and fittings; laboratory

equipment and office equipment during the period.

486. As a result of high expenditure for the period under review, the

School recorded a surplus of GH¢63,005 compared with

GH¢2,762,017 recorded in the previous year, representing a drop of

97.7%.

Financial Position

487. Presented in Table 30 is the financial position of the School as

at 31 December 2009.



Income

2009

GH¢

2008

GH¢

%

Change

Current Assets 5,149,457 5,132,429 0.3


Net Assets 3,312,460 3,249,455 1.9


488. Current Assets grew marginally by 0.3% from GH¢5,132,429

in 2008 to GH¢5,149,457 in 2009. The marginal growth was as a

result of increase in short-term Investments from GH¢1,010,611 in

2008 to GH¢1,676,898 in 2009 and a decrease in Cash and Bank

balance from GH¢3,640,717 in 2008 to GH¢2,717,757 in 2009.

489. Even though, Accounts Payable and Accruals shot up to

GH¢1,605,468 from GH¢1,577,966 in 2008, a 24.1% drop in Grants

Balances caused Current Liabilities to decrease by 2.4% from

GH¢1,882,975 in 2008 to GH¢1,836,997 in 2009.

490. The Medical School’s liquidity ratio of 2.8:1 (2008:2.7:1)

appeared favourable and indicated its ability to meet short-term

liabilities as and when they fall due.

MANAGEMENT ISSUES

Dormant Accounts-GH¢ 15,918.90

491. During our examination of the accounts, we noted that the

following accounts had been dormant over the years, thus, without

any movements:

Description

Amount

GH¢

National Westminister Bank Current Account 3,759.76

National Westminister Bank Fixed Deposit 11,504.75

Bank of Ghana 630.16

GCB – New Burkit Tumor Project 13.81

GCB – Savings Account 10.43

Total 15,918.90



492. In our view the non-movement in the accounts for such a long

period could provide avenue for financial malpractices.

493. We therefore recommended that efforts should be made to

investigate these dormant accounts and appropriate action taken to

prevent any financial malpractices and advised management to make

available the bank statements for monthly reconciliation and

certification.

494. Management responded that it had contacted the University of

Ghana London Office for 2009 and 2010 bank statement of National

Westminster bank but all efforts have proved futile adding that efforts

have been made to close the remaining dormant accounts.

UNIVERSITY OF GHANA, CENTRAL ADMINISTRATION


Introduction


Ghana, Central Administration, College of Health Sciences for the

year ended 31 December, 2009.

Operational Results

496. The Central Administration’s total income for the year was

GH¢1,446,619 compared to GH¢1,054,077 in 2008, representing an

increase of GH¢392,542 or 37.2%. This was due to an increase of

GH¢360,195 in Internally Generated Income.

497. Even though Subvention and Grants was the major source of

income to the Central Administration, it went up marginally by 4.5%

to GH¢749,100 from GH¢716,754 in 2008. Internally Generated

Income which constituted about 48.2% of the Total Income, rose

sharply by 106.8% to GH¢697,519 from GH¢337,324 in 2008. The

sharp rise in Internally Generated Income was mainly due to the

significant increase in Tuition Fees – College share from GH¢265,630

in 2008 to GH¢642,306 in 2009. Comparative figures for the two

years are provided in Table 31 as follows:



Income

2009

GH¢

2008

GH¢

%

Change

Subvention and Grants 749,100 716,754 4.5

Internally Generated Income 697,519 337,324 106.8

1,446,619 1,054,077 37.2

Expenditure

Personnel Emolument 919,673 633,523 45.2

General and Administrative

Expenses

347,688 356,108 (2.4)

Finance Charges 4,631 2,497 85.5


1,297,805 1,015,659 27.8

Surplus/(Deficit) 148,814 38,418 287.4

498. Total Expenditure for the year under review also increased by

27.8% from GH¢1,015,659 in 2008 to GH¢1,297,805 in 2009. The

increase was mainly due to significant increases in personnel

emoluments, finance charges and procurement of fixed assets.

Personnel Emoluments which rose by 45.2% was mainly due to

increase in salaries and allowances from GH¢590,520 in 2008 to

GH¢860,086 in 2009 or a rise of 45.6%.

499. The Central Administration recorded a surplus of GH¢148,814

for 2009 as against GH¢38,418 registered in 2008, representing an

increase of 287.4%.

Financial Position

500. Table 32 provides the financial position of the University for

the year under review.


2009

GH¢

2008

GH¢

%

Change

Current Assets 547,999 209,114 162.1

Current Liabilities 323,438 206,338 56.8

Net Assets 224,562 2,776 7,990.8




501. Current Assets increased by 162.1% from GH¢209,114 in 2008

to GH¢547,999 in 2009. The increase in Current Assets was mainly

due to the 246.9% increase in Cash and Bank balance at the year-end.

502. Current Liabilities also increased by 56.8% from GH¢206,338

in 2008 to GH¢323,438 in 2009. This was largely due to significant

rise in the accounts payable.

503. The Current ratio measuring the liquidity position of the

University was 1.7:1 in 2009 against 1.0:1 in 2008. As a result, the

University would be unable to meet its short term obligation as and

when they fall due.

SCHOOL OF ALLIED HEALTH SCIENCES


UNIVERSITY OF GHANA

Introduction

504. This report relates to the audited accounts of the School of

Allied Health Sciences – College of Health Sciences, University of

Ghana for the year ended 31 December 2009.

Operational results

505. The operational results for the period under review are shown

in Table 33.



Income 2009

GH¢

2008

GH¢

%

Change

Subvention & Grant 1,655,931 1,378,909 20.1

Internally Generated Fund 487,300 311,823 56.3

Total Income 2,143,231 1,690,732 26.8

Expenditure

Personnel Emoluments 1,299,434 965,529 34.6

Gen. & Admin. Expenses 445,972 418,247 6.6

Financial Charges 7,730 5,094 51.7



Surplus 191,640 259,314 (26.1)

506. Total Income rose by 26.8% from GH¢1,690,732 in 2008 to

GH¢2,143,231 in 2009. The rise was largely due to a 56.3% increase

in Internally Generated Fund (IGF). Revenue items which contributed

significantly to increase in IGF include students Registrations, Interest

on saving, Income on Investment and Residential Facility User Fee.

Grants for Personnel Emoluments and Subvention for Service

Activities accounted for the increase in Subvention and Grants.

507. Total Expenditure also registered a 36.3% rise from


due to a 336.5% increase in Procurement of Fixed Assets. Significant

increases in the purchase of office equipment and Motor Vehicle

contributed to the rise in procurement.

508. The year ended with a surplus of GH¢191,640 as against

GH¢259,314 recorded in 2008, showing a drop of 26.1%.

Financial Position

509. The details of the financial position are shown in Table 34.




2009

GH¢

2008

GH¢

%

Change

Current Assets 1,147,573 827,686 38.6

Current Liabilities 88,244 91,338 (3.4)

Net Current Assets 1,059,329 736,348 43.9



to GH¢1,147,573 in 2009. This was due to a 1330.1% and 54.9% rise

in Investments and Accounts Receivables respectively.

511. Current Liabilities on the other hand decreased by 3.4% to

GH¢88,244 in 2009 from GH¢91,338 in 2008. Reduction in the

Provision for Part-time Lectureship and Provision for Audit Fees

accounted for the fall.

512. The liquidity position of the School as depicted by an increase

in the current ratio of 13.0:1 (2008: 9.1:1) showed that the School has

enough resources to meet its short-term debts when they fall due.

SCHOOL OF NURSING – COLLEGE OF HEALTH

SCIENCES, UNIVERSITY OF GHANA

Introduction

513. This report relates to the audited accounts of the School of

Nursing-College of Health Sciences of the University of Ghana for the

year ended 31 December 2009.

Operational Results

514. Details of the performance indicators are provided in Table 35.



Income 2009

GH¢

2008

GH¢

%

Change

Subvention & Grants 510,026 559,918 (8.9)


Total Income 1,404,676 1,207,651 16.3

Expenditure

Personnel Emoluments 459,734 548,918 (16.2)

Gen. & Administrative Expenses 791,992 552,779 43.3

Financial Charges 2,606 3,493 (25.4)

Procurement of Non-Current Assets 30,913 14,568 112.2


Surplus 119,431 87,893 35.9


GH¢1,404,676 in 2009. Subvention and Grants accounted for 36.3%

of total income for the year while Internally Generated Fund (IGF)

accounted for 63.7%. The fall in Subvention was attributed to

decreases in receipts for Personnel Emolument and Administrative

and Service Activities. Internally Generated Fund on the other hand

went up mainly because of increases in receipt of Students Fees, Hire

of Bus, College Infrastructural Development Levy, Technology

Services, Medical Services and Seminar & Workshop Levy.

516. Total Expenditure also increased by 14.8% from

GH¢1,119,758 in 2008 to GH¢1,285,244 in 2009. The increase was

due mainly to a 43.3% rise in General and Administrative Expenses

and 112.2% rise in Procurement of Non-Current Assets. Prominent

amongst the contributors to the rise in General and Administrative

Expenses were payment made to the University of Ghana,

Tuition/Student Fees Refund and Honorarium Expense.

517. The operations of the School ended with a surplus of

GH¢119,431 (2008: GH¢87,893) a rise of 35.5% over that of the

previous year.



Financial Position

518. Shown in Table 36 is the financial position as at 31 December

2009.

Table 36: Balance Sheet as at 31 December 2009

Item 2009

GH¢

2008

GH¢

%

Change

Current Assets 594,230 540,057 10.0


Net Current Assets 547,962 428,531 27.9



to GH¢594,230 in 2009. This was due to a 14.3% and 50.4% increase

in Cash and Bank balances and Accounts Receivable respectively.

520. Current Liabilities made up of only Account Payables

decreased by 58.5% from GH¢111,526 in 2008 to GH¢46,268 in

2009.

521. The School recorded a current ratio of 12.8:1 (2008: 4.8:1)

indicating its ability to meet its short-term obligations as and when

they fall due.

DENTAL SCHOOL - COLLEGE OF HEALTH SCIENCES,

UNIVERSITY OF GHANA

Introduction


Ghana Dental School – College of Health Sciences for the year ended

31 December 2009

Operational results

523. The summary of the Dental School’s operations for the period

under review is provided in Table 37.


Table 37: Performance indicators for 2009

Income

2009

GH¢

2008

GH¢

%

Change

Subvention &Grant 1,093,790 1,158,207 (5.6)


Total Income 1,994,442 1,819,066 9.6

Expenditure

Personnel Emolument 1,274,683 1,131,851 12.6

Gen. & Admin. Expenses 461,566 498,571 (7.4)

Finance Charges 5,845 4,599 27.1



Surplus 54,763 141,289 (61.2)

524. Total Income for the period increased by 9.6% from

GH¢1,819,066 in 2008 to GH¢1,994,442 in 2009. This was mainly

due to a 36.3% rise in Internally Generated Fund. The increase in IGF

was largely due to increases in Clinic Receipts, Miscellaneous

Receipts, Students Fees and Faculty Practice.

525. Total Expenditure went up by 15.6% from GH¢1,677,777 in

2008 to GH¢1,939,679 in 2009. The increase was mainly due to a

12.6% rise in Personnel Emoluments and 27.1% increase in Finance

Charges. The increases in Salaries and Allowances and Book and

Research Grant accounted for the rise in Personnel Emoluments.

General and Administrative Expenses on the other hand fell by 7.4%

due to reductions in Repairs and Maintenance of Vehicle and

Examination Expenses.

526. The operational result for the period closed with a surplus of

GH¢54,763, showing a fall of 61.2% over the previous figure.

Financial Position

527. Table 38 shows the financial position of the School as at 31

December 2009.




2009

GH¢

2008

GH¢

%

Charges

Current Assets 444,300 390,043 13.9





to GH¢444,300 in 2009. This was as a result of 19.9% rise in Cash

and Bank Balances.

529. Current Liabilities decreased by 1.2% from GH¢53,190 in

2008 to GH¢52,552 in 2009. This was as a result of full settlement of

indebtedness’ to Ghana Medical and Dental Council.

530. The current ratio of 8.5: 1 (2008; 7.3:1) showed the School is

solvent and can meet its short term obligations when they fall due.

NOGUCHI MEMORIAL INSTITUTE FOR MEDICAL

RESEARCH - COLLEGE OF HEALTH SCIENCES,

UNIVERSITY OF GHANA

Introduction

531. This report relates to the audited accounts of Noguchi

Memorial Institute for Medical Research for the year ended

31December 2009.

Operational results

532. Details of the performance indicators are provided in Table 39.



Income

2009

GH¢

2008

GH¢

%

Charge

Subvention & Grants 2,492,697 2,400,306 3.8


Other Income 108,740 32,031 239.5

Total Income 3,051,623 2,818,194 8.3

Expenditure

Personnel Emoluments 2,323,019 2,099,954 10.6

Gen. & Admin. Expenses 626,303 460,285 36.1


Procurement of Fixed Assets 113,951 121,877 (6.5)


(Deficit)/Surplus (13,887) 131,617 (110.6)


GH¢3,051,623 in 2009. This change was due mainly to a 239.5% rise

in Other Income. The significant increase in receipts from Interest on

Investments and Donations accounted for the rise in Other Income.

Receipts from Parasitology test, Institutional charges, Consultancy

Fee and Hire of Bus caused the rise in IGF.

534. Total expenditure went up by 14.1% from GH¢2,686,577 in

2008 to GH¢3,065,510 in 2009. The change was due to increases in

Personnel Emoluments and General and Administrative Expenses.

These elements constituted 75.8% and 54.9% respectively to Total

Expenditure.

535. The operations of the Institute ended with a deficit of

GH¢13,887 as against a Surplus of GH¢131,617 recorded in 2008.

Financial Position

536. Table 40 shows the financial position of the Institute as at 31

December 2009.



Table 40: Balance Sheet as at 31 December 2009.

Item 2009

GH¢

2008

GH¢

%

Change

Current Assets 3,688,170 3,709,758 (1.0)


Net Current Assets 238,255 252,143 (5.5)

Current Ratio 1.1:1 1.1;1

537. Current Assets dropped by 1 % from GH¢3,709,758 in 2008 to

GH¢3,688,170 in 2009. This was due to decreases in Bank and Cash

Balances and Investments.

538. Current Liabilities also fell by 0.2% from GH¢3,457,615 in

2008 to GH¢3,449,915 in 2009. Reduction in Grant Balances

accounted for the fall.

539. The liquidity position of the Institute as depicted by a current

ratio of 1.1:1 for the period was unhealthy. This implied that the

Institute could barely meet its short-term obligations as and when they

fall due.

KWAME NKRUMAH UNIVERSITY OF SCIENCE

AND TECHNOLOGY

Introduction

540. This report relates to the consolidated audited financial

statements of the Kwame Nkrumah University of Science and

Technology for the year ended 31 December, 2010.

Operational results

541. Total income for the year increased by 44.8% from

GH¢73,190,468 in 2009 to GH¢105,992,628 in 2010. This was due to

a 45.3% rise in Income from Regular Sources as well as a 39.8% rise

in miscellaneous Income. The rise in Income from Regular sources

was largely due to increases in income from Main KNUST operations


from GH¢54,054,943 in 2009 to GH¢79,058,484 in 2010. Income

from Institute of Distance Learning also contributed GH¢7,396,602

this year as no revenue was generated in the previous year by the Unit.

The rise in miscellaneous Income was largely due to increases in fees

from hospital and revenue from KNUST Guest House of 11% and

100% respectively.

542. The components of income and expenditure for the period are

shown in Table 41.

Table 41: Consolidated Income statement for 2010 Income 2010

GH¢

2009

GH¢

%

Change

Income from Regular Sources 97,146,945 66,861,797 45.3

Miscellaneous Income 8,845,683 6,328,671 39.8

105,992,628 73,190,468 44.8

Expenditure

Teaching Faculties 47,019,849 32,956,177 42.7

Research & Outreach 1,135,308 982,675 15.5

General Education Expenses 7,896,420 7,320,613 7.9

Library Expenses 985,311 806,832 22.1

Central Administration 5,346,243 3,611,023 48.1

Staff/Students Faculties 11,030,493 7,086,698 55.7

Municipal Services 10,037,677 7,144,755 40.5

Miscellaneous 1,669,658 1,071,404 55.8

Depreciation 1,958,363 1,453,157 34.8

7,079,322 62,433,334 39.5

Excess Income/Deficit/Over

Expenditure

18,913,306

10,757,134

75.8

543. Total Expenditure for the year under review amounted to

GH¢87,079,322 as against GH¢62,433,334 recorded in 2009, an

increase of 39.5% over the previous year’s expenditure.

544. The increase was mainly due to expenditure increase in

Teaching Faculties by 42.7%; Central administration by 48.1%, staff

and student facilities by 55.7% municipal services and miscellaneous

by 40.5% and 55.8% respectively. The increases in expenses on



College of Engineering, College of Art and Social Science, College of

Health Science; College of Agric & Natural Resources and Institute of

Distance Learning largely accounted for the rise in Teaching Faculties

expenses. The increase in expense on hospital largely accounted for

increase in staff and student faculties expenses. High costs of

expenses on electricity, sewerages & water system accounted for the

increases in municipal services.

545. The operational results for the period closed with a surplus of

GH¢18,913,306 as compared with GH¢10,757,134 recorded in 2009,

thereby showing a 75.8% increase.

Financial position

546. Presented in Table 42 is the Consolidated financial position of

the University as at 31 December, 2010.

Table 42: Consolidated financial position as at 31 December 2010

2009

GH¢

2008

GH¢

%

Change


Current Assets 41,581,536 24,783,244 67.8


Net Assets 43,925,961 23,401,394 87.7


547. Non-Current assets which stood at GH¢13,904,361 in 2009

went up to GH¢19,374,855 in 2010, an increase of 39.4%. The

increase was due to a 34% rise in property, plant and equipment. The

investment which was GH¢47,025 in 2009, rose significantly to

GH¢712,763, an increase of 1,416%.


2009 to GH¢41,581,536 in 2010. This was as a result of increases in

short-term investments from GH¢5,931,644 in 2009 to

GH¢15,941,792 in 2010 and inter-department Account Debits from

GH¢144,695 in 2009 to GH¢5,939,680 in 2010.



GH¢15,286,211 in 2009 to GH¢17,030,430 in 2010. The increase in

accruals and other credit balances from GH¢590,892 in 2009 to

GH¢2,422,189 in 2010 accounted for the variation.

550. The University recorded a current ratio of 2.4:1 (2009: 1.6:1).

This shows that the University can meet its short term obligations

when they fall due.

MANAGEMENT ISSUES

College of Art and Social Science

Special Advances not accounted for – GH¢41,724.09

551. Examinations of the general ledger and special advance

registers of the College revealed that a total of GH¢41,724.09

advanced to members of staff of various faculties to organize specific

programs had not been accounted for. Details are shown below:

S/No. Year Faculty No. of staff

holding adv.

Amount

GH¢

1 2007 Design Press 1 100.00

2 2008 Art 9 7,126.94

3 2008 Design Press 3 4,522.00

4 2008 Business School 3 16,179,85

5 2008 Business School 1 1,400.00

6 2008 Art 10 12,395.30

41,724.09

552. The practice contravened regulation 288(2) of the FAR which

provides that imprest issued for making a particular payment must be

fully retired by the date specified in the approval to operate the

imprest.

553. The irregularity was caused by management’s failure to

establish procedures for the prompt retirement of the imprest.

554. As a result, we were unable to determine whether the funds

released were spent as required.



555. We therefore advised management to ensure that, efforts are

made to get officers concerned to account for the advances and/or be

adjusted to their personal account as stipulated in the aforementioned

regulation.

556. Management responded that the special advances mentioned

will be investigated.

Loans of GH¢1,885.00 to Students’ Representative Council

557. We noted that loans totalling GH¢1,885.00 were granted to the

Students’ Representative Council (SRC) at the Provost’s office and no

effort was made for the repayment of the loan. Details are shown

below:

PV No. 217 of 10/01/2010 GH¢ 885.00

PV NO. 327 of 31/08/2010 GH¢ 1,000.00

GH¢1,885.00

558. The possibility of incoming SRCs objecting to the repayment

cannot be ruled out if proper records are not maintained.

559. We therefore advised management to retrieve the amount from

the SRC. Management responded that, it will investigate the issue

raised.

Staff and Students - University Hospital

Large Quantities of expired drugs at Hospital Premises

560. We noted that the hospital had 118 pieces of unserviceable

items and large quantities of expired drugs at its premises. A letter

signed by the Director of the Hospital and dated 12 April 2010 was

addressed to the Registrar of the University requesting a Board of

Survey to dispose of the unserviceable items and the expired drugs.

As at October 2011, when the audit team visited the hospital, the

items were still at the premises causing congestion at the hospital. The

omission was because the University authorities had not given the

situation the needed attention.


561. We recommended that a board of survey as matter of urgency,

is constituted to destroy or dispose of these items.

562. Management in response stated that a board of survey is yet to

be constituted to destroy these items.

Basic schools

Distribution list for exercise books purchased not provided

563. We noted that, an amount of GH¢40,400.00 was used to buy

assorted exercise books from the University Printing Press to be

distributed to the basic schools. Our request for the list as to how the

distribution was made to the pupils in the primary school proved

futile.

564. We could therefore not confirm whether the exercise books had

been used for their intended purposes.

565. This lapse was as a result of management’s failure to ensure

that procedures established for the printing, storage and distribution of

the books were followed.

566. We recommended that in future management should ensure

that the items are received into stores and proper records maintained

on them to avert reoccurrence.

567. In response, management said that it will investigate the issue

and take the necessary corrective measures.

GHANA INSTITUTE OF MANAGEMENT AND PUBLIC

ADMINISTRATION (GIMPA)

Introduction

568. This report is related to the audited accounts of Ghana Institute

of Management and Public Administration (GIMPA) for the year

ended 31 December 2011.



Operational results

569. Total Income went up by 23.1% from GH¢23,402,868 in 2010

to GH¢28,813,926 in 2011. The increase was due to a rise in all the

revenue components of the Institute, comprising Business School,

(51.9%), Other Schools (16.4%) and Other Sources (31.7%). The

major Components that contributed to the increase were receipts from

Greenhill College, Graduate Unit, School of Governance and

Leadership, Law School, Consultancy Services and Hospitality

Services.

570. Total Expenditure of the Institute rose by 31.6% from

GH¢20,548,079 in 2010 to GH¢27,036,998 in 2011. This was

attributed mainly to a 29.0% rise in Personnel Emoluments, 41.7%

increase in Administrative and General Expenses and a rise of 36.2%

in Repairs and Maintenance. Increase in Salary and Allowances

accounted for the rise in Personnel Emoluments whilst Electricity

Expenses and Printing and Stationery largely accounted for the

increase in Administrative and General Expenses.

571. Table 43 presents sumarised income and expenditure

statements for 2011 and 2010.


Income 2011

GH¢

2010

GH¢

%

Change

Income 28,813,926 23,402,868 23.1

Expenditure


Operating Expenses 6,949,817 5,463,703 27.2

Adm. & General Expenses 6,561,659 4,631,385 41.7

Travelling & Transport 638,870 524,947 21.7

Repairs & Maintenance 1,498,864 1,100,747 36.2


Surplus/ (Deficit) 1,776,928 2,854,789 (37.8)


572. The Institute recorded a surplus of GH¢1,776,928 for the year

under review as against GH¢2,854,789 in 2010 showing a 37.8% fall.

Financial Position

573. Presented in Table 44 are the movements in the financial

positions for the two Comparative years.

Table 44: Balance Sheet as at 31 December 2011 2011

GH¢ 2010 GH¢

% Change

Non – Current Assets 15,486,915 11,624,352 33.2

Current Assets 9,071,157 8,186,316 10.8


Non – Current Liabilities 1,345,813 32,199 4,079.7


Net Assets 19,207,651 15,064,343 27.5


574. Non-Current Assets increased by 33.2% from GH¢11,624,352

in 2010 to GH¢15,486,915 in 2011. This was due to a 36.9% increase

in Property, Plant, and Equipment resulting from acquisitions and

11.1% increase in Long Term Investment.

575. Current Assets rose by 10.8% from GH¢8,186,316 in 2010 to

GH¢9,071,157 in 2011. This resulted from increases in Debtors and

Prepayments and Short Term Investment.

576. Current liabilities registered an increase of 12.7% from

GH¢4,746,325 in 2010 to GH¢5,350,421 in the year reviewed.

Increase in prepaid academic fees resulted in the upward trend.

577. The Institute’s Current ratio of 1.7:1 (2010:1.7:1) fell below the

benchmark of 2:1 thus indicating its inability to meet its short term

obligations when they fall due.

MANAGEMNET ISSUES

Bank Accounts

578. During the years under review the Institute opened four new

bank accounts with various banks without the Council’s authorization.



579. We commented on the number of bank accounts maintained by

the Institute in our previous management letter but the situation had

not improved. As at 31 December 2011 the Institute was operating 41

bank accounts. There were as many as five current accounts with one

branch of a bank and the purpose for which some of the bank accounts

were opened could not be justified. The numerous bank accounts

maintained appear to be more than needed to operate the business of

the school effectively. We also noted several instances where bank

reconciliation statements had not been prepared on timely basis.

580. We recommended that Council’s approval should be sought

before new bank accounts are opened. Additionally, a thorough

review of the number of bank accounts operated by the Institute

should be undertaken with a view to reducing the number. To deal

promptly with errors on bank transactions, reconciliation statements

must be prepared monthly.

581. Management indicated it is seeking Council’s ratification in

respect of the opening of new bank accounts and added that nineteen

(19) of the bank accounts have been closed in 2012.

GIMPA EXECUTIVE CONFERENCE CENTRE (GECC)

Debtors - GH¢31,438

582. At the end of the year 2011, the amount of debts outstanding

was GH¢31,438. As at the time of reporting GH¢26,055 had been

paid leaving a balance of GH¢5,383. Long outstanding debts might be

difficult to recover and this situation was attributed to the failure of

management to put in place debt recovery measures.

583. We recommended that Management should institute a credit

policy for its clients which should be strictly adhered to.

584. Management responded that the debt has further reduced to

GH¢3,862 and efforts are being made to collect the outstanding

amount.


ACCRA POLYTECHNIC

Introduction

585. This report is in relation to the audited accounts of Accra

Polytechnic for the year ended 31 December 2011.

Operational results

586. Total income registered an increase of 39.4% from

GH¢8,992,594.83 in 2010 to GH¢12,538,448.07 in 2011. Government

Subvention which accounted for 70.6% or GH¢7,351,202.78 of total

income in the year under review increased by 43.1%. The remainder

consisted of Internally Generated Fund (IGF) which rose by 34.6%

from GH¢3,853,630.05 in 2010 to GH¢5,187,245.29 in 2011. The rise

was mainly due to increase in receipts from Tuition Fees, Hostel Fees,

Internal Examination Fees and Part-time Programmes. Presented in

Table 45 are the performance indicators.


Income

2011

GH¢

2010

GH¢

%

Change

Government Subvention 7,351,202.78 5,138,964.78 43.1

Internally Generated Fund 5,187,245.29 3,853,630.05 34.6

Total 12,538,448.07 8,992,594.83 39.4

Expenses

Personnel Emoluments 7,721,928.41 5,123,257.21 50.7

Administration Activity

Expenses 1,532,752.07 1,200,169.64 27.7

Service Activity Expenses 2,737,503.26 2,298,366.95 19.1

Total 11,992,182.74 8,621,793.80 39.1

Excess of

Income/Expenditure

546,265.33

370,801.03 47.3

587. Expenditure incurred in 2011 totaled GH¢11,992,182.74 as

against GH¢8,621,793.80 in the previous year; representing an

increase of 39.1%. The expenditure component included Personnel

Emoluments of GH¢7,721,928.41 (2010: GH¢5,123,257.21)

representing 64.4% of total expenditure in 2011 which increased by

50.7%, accounting largely for the rise in total expenditure. The rise in



Personnel Emoluments was mainly as a result of increase in salaries as

well as Book and Research Allowance of workers in 2011. Service

Activity Expenditure registered GH¢2,737,503.26 in 2011 (2010:

GH¢2,298,366.95); representing a rise of 19.1%. This was due to

increase in payments for Night Allowance, Admission Expenses, Staff

Development Cost, Examination Expenses and Repairs and

Maintenance of Buildings including the Hostel block.

588. Administration Activity Expenditure in 2011 amounted to

GH¢1,532,751.07 (2010: GH¢1,200,169.64), representing an increase

of 27.7%. Increase in Maintenance of Equipment, Machinery and

Plant, Local Tuition fees, Sub Council Expenses, Foreign Travel Cost

and Fuel and Lubricants cost contributed to the rise in Administration

Expenditure.

589. Operational Surplus of GH¢546,265.33 was realized during the

year, compared with GH¢370,801.03 recorded in the preceding year,

which showed an increase of 47.3%.

Financial position

590. The Institute’s non-current assets represented by fixed assets

and building work -in-progress registered GH¢12,947,535.82 in 2011

compared with GH¢12,286,747.12 in 2010, a growth of 5.4%. The

increase in non-current assets resulted mainly from addition to Land

and Building, Computers, Projectors and Accessories, Motor Vehicles

and Plant, Machines & Equipments in 2011.

591. Current assets appreciated from GH¢7,101,178.43 in 2010 to

GH¢7,293,025.94 in 2011, representing an increase of 2.7%. This

resulted from an increase of 21.3% in the cash in hand and bank

balance.

592. Liquidity outlook as portrayed by a current ratio of 0.5:1 (2010:

1.1:1) fell below the standard requirement of 2:1 indicating that, the

School would not be able to meet its current obligations as and when

they fell due.


MANAGEMENT ISSUES

Unearned salaries - GH¢3,035.44

593. Regulation 298(3b) of the FAR , 2004 mandates the head of a

public institution to cause the immediate stoppage of payment of

salary of separated staff by notifying the bank to repay into the

Consolidated Fund any salary or other payments credited to a public

servant’s bank account when he or she becomes a separated staff.

594. We noted that an officer, Emmanuel Adu Gyamfi who resigned

on 1 August 2011 had his name deleted from the payroll on 1 January

2012, a delay of five months, resulting in the payment of

GH¢3,035.44 in unearned salaries.

595. Management’s failure to promptly notify the bank to repay the

salary credited to the former staff into the Consolidated Fund in

accordance with FAR 298(3b) contributed to the anomaly.

Management’s inaction could result in the loss of GH¢3,035.44 to the

state.

596. We recommended that efforts be made by management to

recover the amount, pay same to Government chest and obtain a

Treasury Receipt for our verification. We also urged management to

promptly notify the bankers of successive separated staff to place an

embargo on their salaries and transfer same into the Consolidated

Fund.

597. Management in response stated that the salary arrears due the

officer, which amounted to GH¢3,800.65 would be used in defraying

the erroneous salaries paid him.

Failure of sponsored staff to serve bond - GH¢109,559.32

598. To ensure that an Institution is not deprived the benefit of

investing in the building of its human resource capacity, officers

granted study leave with pay to pursue courses must be bonded.

599. Article 15.6 of the Conditions of Service (CoS) for senior staff

and senior members of Polytechnic Teachers Association of Ghana



(POTAG) dated 1 June 2006 provides that beneficiary staff on

approved study leave must be bonded to serve the school for five

years on completion of their course. The CoS further provides that

beneficiaries who fail to serve their bond should be made to refund all

salary and any benefits enjoyed whiles on study leave with pay.

600. We observed that two officers who were sponsored by the

Polytechnic to pursue further studies failed to serve the required five

years bond term before leaving the School. The officers also failed to

refund a total amount of GH¢109,559.32 paid them as salaries and

allowances while studying.

601. We observed that the defaulting staff failed to perform their

part of the agreement, in spite of several efforts by management to

enforce the terms of the bond. Their failure to serve the bond

adversely affected the human resource capacity and financial

resources of the School.

602. We recommended and management accepted to intensify

efforts to recover the amount of GH¢109,559.32 from the two

separated staff or their guarantors.

NATIONAL SERVICE SECRETARIAT

Introduction


Service Secretariat for the period 1 January 2009 to 31 December

2011.

Operational results

604. The National Service Secretariat (NSS) ended its operations for

the year 2011 with a surplus of GH¢30.20 million as against the

previous year’s surplus of GH¢21.12 million representing an increase

of GH¢9.08 million or 43.0%. The increase in surplus was as a result

of decline in expenditure of 6.0%. The main performance indicators of

the last two years are shown in Table 46.



Income 2011

GH¢

2010

GH¢

%

Change

Government

Subvention

154,448,649.89 154,589,536.64 (0.1)

Internally

Generated Fund

2,915,549.57 1,916,997.93 52.1

Other Income 197,284.90 108,760.56 81.4

Overpayment

Recovery

279,135.90 258,292.96 8.1

Total Income 157,840,620.26 156,873,588.09 0.6

Expenditure

Personal

Emolument

11,787.45 2,491,248.10 (99.5)

National Service

Allowance

124,254,838.78 130,351,231.08 (4.7)

Administrative

Expenses

1,520,435.74 1,762,554.37 (13.7)

Service Expenses 1,203,822.75 829,139.10 45.2

Other payments 129,742.51 21,250.05 510.6

Depreciation 522,100.33 295,258.63 76.8

Total

Expenditure

127,642,727.56 135,750,681.33 (6.0)

Surplus/Deficit 30,197,892.70 21,122,906.76 43.0

605. Total income for 2011 rose by GH¢0.97 million, from

GH¢156.87 million in 2010 to GH¢157.84 million due to increase in

Internally Generated Fund by GH¢1.0 million or 52.1%. The rise in

IGF was due to increase in service charge and sale of farm produce.

606. Total expenditure also decreased by GH¢8.11 million or 5.9%,

from GH¢135.75 million in 2010 to GH¢127.64 million in 2011. The

decrease was mainly due to decline in both personnel emoluments

(NSS was migrated onto the Controller and Accountant General’s

mechanized payroll during 2011 financial year) and National Service

Allowance, which also saw a reduction in the number of volunteers

deployed.



Financial Position

607. The overall financial position of the Secretariat showed a

downward movement in the net assets from GH¢34.62 million in

2010 to GH¢15.55 million in 2011. Presented in Table 47 is the

financial position of the Secretariat as at 31 December 2011.


Item 2011

GH¢

2010

GH¢

%

Change

Non Current Assets 4,461,183.09 3,333,123.73 33.8

Current Assets 61,310,180.89 31,359,200.66 95.5

Current Liabilities 50,224,616.17 72,650.34 69,032.0

Net Current Assets 11,085,564.72 31,286,550.32 (64.6)

Net Assets 15,546,747.81 34,619,674.05 (55.1)


608. Non-Current Assets increased by 33.8% from GH¢3.33 million

in 2010 to GH¢4.46 million in 2011. The increase was due to

acquisition of bungalows, office equipments and vehicles.

609. Current Assets registered an increase of 95.5% from GH¢31.36

million in 2010 to GH¢61.31 million in 2011. The sharp rise in cash at

Bank contributed significantly to the increase in current assets.

610. Current Liabilities also rose by GH¢50.15 million, or

69,032.0%, from GH¢72.6 thousand in 2010 to GH¢50.22 million in

2011. The increase was attributed to accumulation of overpayment

recoveries yet to be remitted to the Controller and Accountant-General

(Consolidated Fund). We observed that the Secretariat was not

recognizing the accumulated overpayment recoveries as a liability. At

the instance of the audit team this was corrected to reflect the true

position, hence the sharp rise in the current liabilities.

611. The liquidity position of NSS is indicated by a current ratio of

1.2:1 for 2011 as compared with 431.64:1 the previous year, shows

that short term obligations cannot be met when they fall due.


MANAGEMENT ISSUES

Failure to return overpayment recoveries to chest

612. Regulation 45 of FAR 2004 states that “If any expenditure is

made in excess of amounts actually due, the overpayment shall be

recovered immediately and paid into the accounts from which it was

originally paid and the officer concerned shall report the circumstance

immediately to the head of department or the appropriate authority”.

613. Our scrutiny disclosed that during the 2009/2010 and

2010/2011 service years, amounts of GH¢129,590,611.80 and

GH¢182,541,407.38 were estimated and released to the Secretariat to

pay National Voluntary Service Personnel (NVSP) and National

Service Personnel (NSP) allowances respectively. We however

observed that a total amount of GH¢111,693,180.97 and

GH¢151,228,318.81 were utilized ¢for the respective periods out of

the amounts released, leaving a balance of GH¢17,897,430.83 and

GH¢31,313,088.57 for the same period.

614. We also noted that over payment recoveries amounting to

GH469,228.65 returned from the regions to the National Service

Head Office during the years reviewed, which should have been paid

to chest were also kept in the Secretariat’s account.

615. We further observed that as at 31 December, 2011, the

Secretariat Personnel Account balance stood at GH¢60,881,536.58,

which included the accumulated overpayment recoveries amounting to

GH¢49,679,748.05 over the periods yet to be refunded into chest.

616. The above situation was made possible because management

failed to adhere to the above stated regulation. By this action, the

Secretariat denied the Government of the needed funds for other

developmental and financial commitment.

617. We recommended that the amount of GH¢49,679,748.05, being

over payment recoveries should be paid to chest without further delay.

618. At the instance of the audit, a request was made to C&AG for

an account number for payment of the excess funds.



Unpresented payment vouchers - GH¢1,314,173.01

619. Contrary to Section 16 of the FAA 2003, Act 654, we did not

cite payment vouchers totalling GH¢1,314,173.01. The above

irregularity was attributed to making payments before raising the

necessary vouchers, the inability to properly preserve paid vouchers or

payments made without raising voucher.

620. Payments not supported by duly authorised payment vouchers

deny assurance of regularity of disbursements made. The omission

could give rise to fictitious expenditure and provide opportunity for

abuse.

621. We recommended that management produces the payment

vouchers for our examination, failure which the payments will be

disallowed and the Accountant and Head of Department being

signatories to the Scheme’s account, surcharged with the total amount

involved.

622. Management responded that it had retrieved the payment

vouchers for our inspection. However, a follow up indicated that the

payment vouchers were all not made available. Vouchers that were

not presented for audit totalled GH¢1,314,173.01.

623. We reiterated that strenuous effort should be made to provide

the P.Vs for inspection or the Accountant and the Head of Department

held accountable for the unpresented payment vouchers.

Unacquitted payment vouchers GH¢ 218,074.78

624. Regulation 39(1) and (2) of the FAR, 2004 states among

others, a head of department shall ensure that monies are utilised in a

manner that secures both optimum value for money and the intention

of Parliament. The head of the accounts section of a department shall

control the disbursements of funds to ensure that:


a. The officer ordering disbursements is authorised to do

so;

b. Orders are made within the powers of and the funds

available to the officer ordering disbursements; and

c. Transactions are properly authenticated to show that

amounts are due and payable.

625. On the contrary, our examination of payment vouchers for the

period under review disclosed that management failed to adhere to the

tenets of the above regulation. Our examination revealed that out of a

total of 41 payment vouchers totalling GH¢271,055.33 supporting

documents attached to acquit the payments totalled GH¢52,980.55

resulting in a shortfall of GH¢218,074.78.

626. This situation occurred because the head of Accounts and the

Authorising Officer did not exercise due care by ensuring that, the

payment vouchers were properly acquitted.

627. The absence of valid receipts and other relevant documents to

authenticate payments cast doubt on the genuineness of the

transaction. The above lapse has a high risk of abuse through the

perpetuation of fictitious payments.

628. We therefore recommended that the Authorising Officer and

Accountant should ensure that the supporting documents are made

available for our inspection failure which the Accountant should be

made to refund the total amount of GH¢218,074.48 to the Scheme’s

account.

629. In response, management stated that it had taken note, and

would ensure that the requisite supporting documents are attached to

the payment vouchers for our inspection. This had not been done as at

the time of writing this report.



Accountable imprest not accounted for - GH¢409,292.35

630. Our examination of payment vouchers revealed that monies

totalling GH¢499,292.35 advanced to officers between January 2010

and July 2011 as accountable imprest to organise various programmes

had not been accounted for even after the completion of the

programme. We also noted that management had not instituted any

action against the imprest holders who failed to retire their imprest on

the due dates.

631. This practice contravened Regulation 288(2) of FAR 2004,

which states that “failure to retire an imprest by the due date, unless

occasioned by the death or incapacity of the imprest holder is a breach

of discipline as defined in regulation 8(1)”. Failure of the officers

involved to render account for their stewardship suggests that the

money was not judiciously used for the intended purpose for which

the fund was released to them.

632. The act was as a result of lack of supervision by the

Accountant and the failure of management to put in place measures

which would compel imprest holders to account for their imprest. The

practice, if not discouraged, could lead to unspent imprest amounts

being locked up in pockets of individuals rather than being used in

furtherance of the Secretariat’s programmes.

633. We recommended that, the officers should be made to either

account for the moneys received for our verification or an advance

account be opened in their names for recovery from their salaries.

Additionally, appropriate disciplinary action should be taken against

them for breach of discipline as stipulated in Regulation 8 of the FAR.

We further advised management to put in place the necessary

measures which would compel imprest holders to promptly account

for future imprest.

634. Management accepted our observation and assured us that the

officers concerned would be made to account for the imprest received.

A follow up however revealed otherwise.


Failure to recover loan/advances granted to staff - GH¢85,352.49

635. FAR 110 states that “A head of department who has been

delegated in accordance with regulation 109 (delegation of

administering authority), shall ensure that advances issued are duly

recovered in accordance with the appropriate agreement”

636. FAR 114 also states that the duty of the head of department to

deduct advance recoveries from salary payments will not diminish the

responsibility of the public officer who has received an advance to

repay it according to the agreement and to report any failure to make

deductions from salary when due.

637. We observed that between February 2007 and September 2010,

management of the Scheme granted a total amount of GH¢114,429.48

as advances to its staff. We noted that since October 2010, the loan

deductions from the salaries of the beneficiaries ceased. The

beneficiaries however failed to report on the stoppage of the deduction

and management also failed to put mechanism in place to recover the

loans in contravention of the above stated regulation.

638. As a result, an amount of GH¢29,076.99 had been recovered

out of the GH¢114,429.48 granted, leaving an outstanding balance of

GH¢85,352.49 as at the time of reporting.

639. We recommended that necessary steps be taken to recover the

outstanding advances from the beneficiaries to avoid loss of money to

the Secretariat.

640. Management explained that following the migration of staff

salaries to Controller and Accountant General’s Department,

deductions could not be effected immediately and assured us that this

would be made in due course. We reiterated that management steps up

efforts in recovering the loans.



Withholding tax not remitted to Internal Revenue Service -

GH¢9,527.12

641. Section 87(1) of the Internal Revenue Act 2000, requires a

withholding agent to pay to the Commissioner a tax that has been


payment, subject to withholding tax, is made by the withholding

agent.

642. We noted that a total amount of GH¢9,527.12 being taxes

withheld from suppliers of goods and services between January 2010

and June 2011 had not been remitted to the Commissioner, DTRD of

the GRA in contravention of the provision of above stated tax law.

643. The lapse was occasioned by management’s failure to adhere to

the above mentioned regulation, thereby denying the state of the much

needed revenue for its developmental projects. We recommended that

management of the Scheme should remit the total sum of

GH¢9,527.12 to the relevant tax office without delay. We also advised

that in future, management should promptly remit all withheld taxes

for the avoidance of penalties and also to contribute to the state’s

revenue generation drive.

644. Management agreed to immediately pay the amount withheld

to the DTRD and assured us of the avoidance of the recurrence of the

anomaly.

Procurement from single source- GH¢66,206.00

645. Contrary to Section 43 of the Public Procurement Act 2003

(Act 663), we noted that goods and services worth GH¢66,206.00

were procured between January 2010 and July 2011 without obtaining

three quotations.

646. Management’s non-compliance with the provision of the PPA

did not provide assurance that transparency, fairness and optimum

value for money was obtained from the goods and services procured.

647. We recommended that, the Executive Director should ensure


that procurement procedures are followed in future purchases as

prescribed by Act 663. Additionally, management should institute

disciplinary action against the responsible officers who in subsequent

transactions fail to ensure that the provisions of the Act are complied

with as stipulated by Section 92 of the Public Procurement Act.

648. Management acknowledged our observation and gave the

assurance that appropriate mechanism would be put in place to avoid

this occurrence.

Fragmented purchases

649. Section 21(5) of the Public Procurement Act (PPA) states that

‘A procurement entity shall not divide a procurement order into parts

or lower the value of a procurement order to avoid the application of

the procedures for public procurement in this Act’. A contract above a

stipulated sum of GH¢5,000.00 should be packaged and advertised in

a manner that will ensure full participating of interested bidders in the

procurement procedures.

650. Contrary to the above regulation our audit review revealed that,

a contract for printing of T-shirts and caps amounting to

GH¢30,400.00 was fragmented into nine different lots in

circumvention of the Procurement Act and awarded to one contractor

M/S Debos Coterie Venture on the same day, 25 July 2011.

651. The procurement officer explained that, he was not aware of

the contract and was also not party to the award process. He indicated

that the Greater Accra Regional Director awarded the contract.

652. In our opinion, this was a deliberate action taken by

management in order to circumvent the dictates of the PPA and to

benefit individuals involved rather than the Secretariat. The

procurements therefore lacked transparency and was opened to abuse.

653. We recommended that management should comply with the

procurement Act in awarding future contracts and desist from

deliberate breach of the law for its interest. Additionally, management

should institute disciplinary action against the Procurement Unit, the



Internal Audit Unit and the Authorising officer whose inaction caused

the breach of financial discipline.

654. Management in response stated that it received a late invitation

to participate in the 2011 Policy Fair and that the ‘T’-shirts were

printed for a small group of representatives for the fair but it became

necessary to order more lots as and when it became necessary.

655. Management’s explanation was untenable as the cheques

issued for the payments were all dated 5 August 2011. We viewed the

above situation as an indication of improper planning of activity

resulting in procurements made without recourse to the law. We

reminded Management that acting contrary to the procurement law

attracts sanctions and should therefore plan its activities ahead of time.

Contract sum exceeded without approval

656. For effective management and control over contracts, a

condition for exceeding the original contract sum is to prepare

variation orders for the employer’s endorsement and approval.

Variation work in excess of 15% of the initial contract sum demands

that the contract should be packaged separately as a new contract and

tender processes followed before it is awarded.

657. Our audit revealed that the bottled water project at Media, a

suburb of Accra, awarded at an initial contract sum of GH¢456,227.80

to M/s Wonas Company Limited on 20 February 2009 was to be

completed within one and half years.

658. Our review of the records disclosed that, the contract sum was

erratically increased to GH¢856,597.67 representing an 81% increase

without recourse to laid down procedure. The Consultant explained

that management failed to allow him access to the site to enable him

carry out the necessary tests before submitting his drawings. He later

realised the site was water log and had to revise the drawings resulting

in additional works to strengthen the foundation. He also maintained

that the extension of the canteen was verbally ordered when the Board

visited the site.


659. This practice violates the procurement Act and undermines

procedures and controls established under contract management.

660. We recommended that additional works which increased the

initial contract sum should be packaged separately and regularized for

our review.

661. Management accepted our recommendation and stated that the

additions has been repackaged separately and referred to the Entity

Tender Committee for regularization and approval.

Inability to recover investment made in the farm project

662. Best investment management practice requires that before a

project/investment is undertaken, a survey should be undertaken to

determine its feasibility and profitability as well as compatibility with

the institution’s financial profile. It is also expected that records on

performance of the project should be maintained as would inform

Management/Board decision on the desirability for continued

investment in the project or otherwise.

663. Additionally, FAR 1 mandates any public officer responsible

for the conduct of financial business on behalf of Government to keep

proper records of all transactions and to produce the records for

inspection when called upon to do so.

664. We noted that during the period under review, NSS started a

number of farm projects in Ejura, Brong Ahafo Region and six other

locations. Contrary to the above expectation, our review of the farm

project proved otherwise. There were no files or proper records

maintained on the farm projects. We did not sight any documented

feasibility study or expert advice sought before commencement of the

projects.

665. A review of records made available to us indicated that

management needed to have a second look at the operations of the

farms. We observed that as at December 2011, a total amount of

GH¢593,744.23 which excluded allowances paid to personnel

working on the farm and equipment has been invested in the seven



farm projects. Total income from the sale of farm produce during the

same period was GH¢82,741.86 resulting in an excess expenditure

over income of GH¢511,002.37.

666. Much as we agree with management that this is a social but

not a profit venture aimed at encouraging the youth to take to

agriculture, we are of the view that improper record keeping leading

to losses declared would rather deter the youth from taking up such a

venture. We noted that management did not match the farm

expenditure with income with the view of evaluating the sustainability

of the venture. We were also of the view that the maintenance of

improper records would not show a true position of the project and

where huge losses are recorded rather than profits this may deter

others from venturing in the projects. As a result the purpose of

encouraging youth in agriculture might be defeated.

667. We recommended that, in future management should ensure

the viability of projects before sinking funds into them; meanwhile

management should seek expert advice on the farming projects to

make an informed decision. We also advised management to comply

with FAR 1, and as a matter of urgency prepare and submit the

consolidated farm account for audit so as to show the true position of

the project with the aim to achieve its purpose.

668. Management in response to our observation stated that the farm

project was intended to provide skills to young graduates and

encourage them to take up agriculture as alternative livelihood to curb

graduate unemployment. Management also intimated that the farm

accounts which were kept at the various farms were yet to be

consolidated in order to assess the impact of the projects.

Management further stated that it however hopes to achieve a great

impact as stocks of maize and other items were yet to be sold.


NATIONAL ACCREDITATION BOARD

Introduction


Accreditation Board for the period 1 January 2010 to 31 December

2011

Operational results

670. Total income for the year under review amounted to

GH¢3,202,116.89 as compared with the previous year’s figure of

GH¢3,154,582.92. Thus, registering an increase of GH¢47,533.97 or

1.5%. This marginal increase was largely facilitated by an increase of

GH¢246,000.69 or 21.2% in government subvention received in the

year under review and an increase of GH¢47,747.32 or 3.1% in

Internally Generated Funds which rose from GH¢1,541,132.50 in

2010 to GH¢1,588,879.82 in 2011. Presented in Table 48 are the



Income

2011

GH¢

2010

GH¢

%

Increase/

Decrease

Government Subvention 1,404,554.31 1,158,553.62 21.2

Internally Generated Funds 1,588,879.82 1,541,132.50 3.1

Grants & Interest on

Investment

208,682.76 454,896.80 (54.1)

Total Income 3,202,116.89 3,154,582.92 1.5

Expenditure

Personal Emoluments 698,975.75 626,058.46 11.7

Administration 711,976.60 600,843.49 18.5

Service Activity 1,264,748.15 1,005,094.87 25.8

Depreciation 87,884.25 15,358.29 472.2


Excess/Deficit of

Income/Expenditure

438,532.14 907,227.81 (51.7)

671. Total Expenditure for the year under review amounted to

GH¢2,763,584.75 as against GH¢ 2,247,355.11 recorded in 2010.



This showed an increase of GH¢516,229.64 or 23.0% over the

previous year’s expenditure. The rise in expenditure was largely due

to an 18.5% and 25.8% increase in administration and service

activities respectively. The appreciation of 11.7% in personnel

emolument costs as a result of increase in staff salaries and related

allowances accounted for the rise in administration expenses.

Similarly, accreditation exercises in 2011 which went up by 195.0%

or GH¢244,797.72 to GH¢370,315.10 over the 2010 accreditation

expenditure of GH¢125,517.38 occasioned the increase in service

expenditure.

672. The Board ended the year with an income surplus of

GH¢438,532.12 as against GH¢907,227.81 registered in 2010, a

reduction of 51.7%.

Financial Position

673. The financial position of the Board is shown in Table 49.


2011

GH¢

2010

GH¢

%

Change

Non-current assets 604,994.01 395,339.55 53.0

Current assets 2,257,461.69 2,048,755.53 10.2

Total Assets 2,862,455.70 2,444.095.08 17.1

Represented by

Accumulated Fund 2,746,871.50 2,308,339.36 19.0

Capital Grant –

NUFFIC Project

7,352.34 13,479.29 (45.5)

Revenue Grant – TALIF

Project

108,231.86 122,276.43 (11.5)

Total 2,862,455.70 2,444,095.08 17.1

Non-current assets

674. Fixed Assets which stood at GH¢604,994.01 in the year 2011,

registered a net increase of GH¢209,654.46 or 53.0% over the 2010


figure of GH¢395,339.55. This was largely as a result of acquisition

of vehicles, office equipment, computers and accessories as well as

furniture and fittings.

Current assets

675. Current Assets for the year under review amounted to

GH¢2,257,461.69 as against GH¢ 2,048,755.53; an increase of 10.2%

or GH208,706.16 over the 2010 figure, resulting from additions made

to short term investment and advances granted to staff.

Current liabilities

676. NAB had no current liabilities.

677. The Accumulated Fund recorded an increase to

GH¢2,746,871.50 in 2011 from GH¢2,308,339.36 in 2010 largely due

to excess of income over expenditures amounting to GH¢ 438,532.14.

MANAGEMENT ISSUES

Non-compliance with contract agreement

678. We observed during the examination of records that in 2007,

the Teaching and Learning Innovation Fund (TALIF) Project of the

World Bank agreed to fund the automation of the accreditation

process of the Board. The TALIF office consequently released to

NAB a total amount of GH¢147,126.35 made up of GH¢111,170.92

in 2007 and GH¢ 35,955.43 in February 2011. We however noted that

the project commenced in 2011.

679. Management explained that the stringent procurement

requirements of the funding agency resulted in the delay in project

execution.

680. Section 4 of the Contract Agreement for the Project valued at

GH¢125,000.00 and awarded to Somuah Information Systems

Company Limited provides that “the Consulting firm shall perform

the service during the period commencing 13 January 2011 and

continuing through 13 June 2012, or any other period as may be

subsequently agreed by the parties in writing.”



681. We noted that as at 30 June 2012, only 40% of the work

amounting to GH¢50,000.00 was completed and paid for after the

expiration of the contract period on 13 June 2012. There was no

agreement in writing as to the new completion date as otherwise stated

in the contract agreement.

682. The non adherence to the terms of the contract stated above

could be due to laxity in the contract management. This lapse could

result in cost overruns which the donor might be reluctant to fund.

683. We recommended and management agreed to urge the

consultant to come out with a stringent time table for the early

completion of work, failing which cost fluctuations should be borne

by the company.

UNIVERSITY OF EDUCATION WINNEBA

Introduction

684. This report relates to the audited accounts of University of

Education Winneba for the year ended 31 December 2010.

Operational results

685. Total income for the period increased by 23.0% to

GH¢51,019,869 from GH¢41,470,937 in 2009. This was due to a

21.5% rise in Government Subvention and Other Grants, a 3,942%

increase in Donor Funds, and a 23.9% rise in Fees and Other Income.

686. The summary of the University’s operations for the year is




Income 2010

GH¢

2009

GH¢

%

Change

Government Subvention &

Other Grant

24,298,627 19,990,964 21.5

Donor Funds 100,000 2,474 3,942.0

Fees and Other Income 26,621,242 21,477,499 23.9

Total Income 51,019,869 41,470,937 23.0

Expenditure

Personnel emoluments 26,521,151 20,573,307 28.9

Administration Cost 8,498,877 5,891,079 44.3

Service Cost 5,796,877 4,504,328 28.7

Investment Cost 1,319,215 1,374,345 (4.0)


Surplus 8,883,749 9,127,878 (2.7)


2009 to GH¢42,136,120 in 2010. The increase was as a result of a

28.9% rise in Personnel Emoluments, a 44.3% increase in

Administration Cost, and a 28.7% rise in Service Cost. Utility

charges, insurance premium, management allowance and printing &

stationary largely accounted for the increase in Administration Cost.

688. The operations of the University ended with a surplus of

GH¢8,883,749 (2009: GH¢9,127,878), a fall of 2.7% over that of

2009.

Financial position

689. Shown in Table 51 is the financial position of the University

for the period under review.



Table 51: Balance sheet as at 31 December 2010 Item 2010

GH¢

2009

GH¢

%

Change

Non-current Assets 21,327,738 17,847,350 19.5

Current Assets 24,433,177 20,885,172 17.0

Current Liabilities 970,300 2,584,654 (62.5)


Net Assets 44,790,615 36,147,868 23.9


690. Non-Current Assets which stood at GH¢17,847,350 in 2009

went up to GH¢21,327,738 in 2010, an increase of 19.5%. The

increase was due to a rise in Property, Plant and Equipment by

GH¢3,474,359 from GH¢17,804,378 in 2009 to GH¢21,278,737 in

2010. This resulted from the additions to Land/office Building, staff

Bungalows, classrooms/Laboratory and Work in Progress.


2009 to GH¢24,433,177 in 2010. This was due to increases in

Inventory, Investment, and Cash and Bank Balances.

692. Current Liabilities which was made up of Accounts Payable

and Bank Overdraft decreased by 62.5% from GH¢2,584,654 in 2009

to GH¢970,300 in 2010 due to full settlement of the Bank overdraft.

693. The liquidity position of the University as depicted by an

increase in the Current Ratio of 25.2:1 (2009: 8.1:1) showed that the

University has enough resources to meet its short-term debts when

they fall due.

MANAGEMENT ISSUES

I.E.D.E Student Debtors

694. Proper maintenance of records on debtors can result in

substantial recovery of the institution’s debts. Also, the debtors figure

disclosed in a financial statement must have a reliable supporting

schedule.


695. We observed that student debtors presented to us was for only

Kumasi and Accra Centres. The list of the 12 other centres were not

given to us. The staff of I.E.D.E explained that these were the only

debtors available. The details are shown below:

Centre GH¢

Accra 42,093

Kumasi 66,365

Total 108,458

696. The practice of nonpayment of debt might negatively affect the

efficient running of the University as the much needed funds would

not be available.

697. We recommended that management should introduce vigorous

debt collection policy which includes writing to all student debtors to

pay their debts or withhold their certificates till their debts are settled.

Land Title Registration

698. Legal and absolute ownership of properties by an organization

require the possession of title deeds to its properties. In spite of this

requirement management was yet to register the Ajumako Campus

Lands with the appropriate state department to achieve absolute title

to the Lands.

699. We therefore recommended that management take the

necessary step to register the Ajumako Campus Lands and obtain title

to all the lands for the avoidance of losses in times of disputes.

Vehicle Insurance

700. Our review of the insurance policy in place showed that the

following vehicles of the University were not insured:

No. Registration No.

1 GT 1465 X

2 GR 3179 X

3 GR 2442 G



701. We also observed that there were no copies of the registration

documents available to enable the vehicles to be insured. It is a

criminal offence against the traffic regulations to use uninsured

vehicles in Ghana. Also the University will have to bear the cost of

repairs or replacement of these vehicles and any other vehicles if they

are involved in an accident with third party vehicles.

702. We recommended that management should demand copies of

the registration documents to enable them insure the vehicles.

MINISTRY OF LANDS, FORESTRY AND MINES

OFFICE OF THE ADMINISTRATOR OF STOOL LANDS

Introduction

703. This report is in relation to the audited accounts of the Office

of the Administrator of Stool Lands (OASL) for the period 1 January

2010 to 31 December 2011.

Operational results

704. Total Income registered an increase of 3.4% from

GH¢3,888,309.97 in 2010 to GH¢4,021,035.61 in 2011. The 3.4%

rise was mainly due to a 20.4% increase in Government Funding

which rose from GH¢1,633,125.23 in 2010 to GH¢1,966,899.96 in

2011. Internally Generated Fund (IGF) which is the main contributor

to income rather showed a decline of 6.7% from GH¢2,187,645.51 in

2010 to GH¢2,040,747.05 in 2011.

705. The decline was as a result of a fall in revenue from mineral

royalties. Presented in Table 52 are the performance indicators.


Table 52: Comparative income and expenditure statement for

2011 and 2010

Income 2011

GH¢

2010

GH¢

%

Change

Public Fund (GOG) 1,966,899.96 1,633,125.23 20.4

IGF 2,040,747.05 2,187,645.51 (6.7)

Donor (LAP) 13,388.60 66,039.23 (79.7)

Bid Documents 1,500.00 (100.0)

Total Income 4,021.035.61 3,888,309.97 3.4

Expenditure

Personnel

Emoluments

1,806,899.96 1453,067.00 24.4

Administration 1,395,228.76 1,246,153.40 12.0

Service Activity 883,128.32 715,015.18 23.5

Project Expenses

(LAP)

32,150.59 47,047.17 (31.7)


Excess of

Income/Expenditure

(96,372.02) 427,027.22 (122.6)

706. Expenditure incurred in 2011 totaled GH¢4,117,407.63 as

against GH¢3,461,282.75 in the previous year, an increase of 19.0%.

The expenditure components included Personnel Emoluments which

rose by 24.4% from GH¢1,453,067.00 to GH¢1,806,899.96 in 2011 as

a result of salary increment; Administrative Expenses also rose by

12.0% from GH¢1,246,153.40 in 2010 to GH¢1,395,228.76 in 2011.

Increase in office consumables and travel and transport costs largely

accounted for the rise in Administration Expenses.

707. The Office recorded an operational deficit of GH¢96,372.02 as

against an excess income of GH¢427,027.22 in 2010, representing a

decline of 122.6%.

Financial position

708. A summary of the financial position of the Board is presented

in Table 53.



Table 53: Assets and liabilities as at 2011 and 2010

Fixed assets

709. The Office’s Fixed Assets registered GH¢1,355,512.27 in

2011 as compared with GH¢1,314,060.36 in 2010, a growth of 3.2%.

The increase in 2011 was as a result of additions to all assets of the

Office.

Current assets

710. Current assets which comprised of staff debtors and cash at

bank decreased by 37.5% from GH¢367,149.25 in 2010 to

GH¢229,325.32 in 2011 mainly as a result of decrease in the bank

balance.

711. Liquidity outlook remained strong as no current liability was

recorded.

MANAGEMENT ISSUES

Printing of fake receipts

712. Our review of records at the Brong Ahafo OASL revealed that

management constituted a sub-committee to investigate a report made

in July 2010 in which Mr. Richard Anin Mensah, Revenue Officer,

had printed fake receipt books he used for revenue collection. The

allegation was confirmed and the following recommendations made

were forwarded to Head Office:

i. Mr. Anin Mensah must be made to refund an estimated

amount of GH¢2,500.00 which could be realised from the

four books he printed.

2011 GH¢ 2010

GH¢

%

Change

Fixed Assets 1,355,512.27 1,314,060.36 3.2

Current Assets 229,325.32 367,149.25 (37.5)

Current liabilities - -

Net Assets 1,584,837.59 1,681,209.61 (5.7)


ii. He should be interdicted to pave way for further

investigation and the final determination of the case.

iii. Strict punishment should be instituted against officers who

embezzle Stool Lands revenue to serve as a deterrent.

713. We noted that apart from interdicting Mr. Anin Mensah who

later resigned on 19 September 2011 without paying the amount

involved no action was taken on the other recommendations.

714. Management’s inaction contravened Regulation 230 of the

FAR,2004 (L.I. 1802) which states that a head of department shall

ensure that adequate investigation is made of a loss and direct action

to be taken to ensure the rectification of systems, discipline of staff

and recovery of the loss.

715. The anomaly was attributed to weak controls in revenue

collection and lack of periodic management reviews of revenue

performance. The delay in carrying out further investigations for

corrective action could facilitate others to engage in similar act.

716. We recommended that management should ensure that the

provision of FAR 230 is complied with without any further delay. We

also advised management to intensify efforts in pursuing recovery of

the GH¢2,500.00 including interest at the prevailing bank interest

from Mr. Anin Mensah.

717. Management in response stated that, it was conducting further

investigations and would apply appropriate remedies and sanctions as

soon as it was satisfied with the outcome of the investigations.

718. We advised management to expedite action on its further

investigations.

Delay in accounting for revenue collected to the Chief Collector

719. Regulation 15(1) of the FAR 2004 (L.I. 1802) states that “any

public officer or collector who collects or receives public and trust



moneys shall issue official receipt for them and pay them into the

relevant public fund bank account within twenty-four hours of receipt

except in exceptional circumstances to be identified by the Minister”.

720. On the contrary, we noted that seven revenue collectors

delayed for periods ranging between 12 and 199 days in paying

revenue collected which amounted to between GH¢108.50 and

GH¢160,670.72 to the Chief Collector.

721. Lack of internal controls and weak supervisory control over the

revenue collectors resulted in the anomaly. The irregularity could

result in loss of revenue as the collectors do not have safe facilities.

The practice could also lead to previous collections being used to

account for current collections resulting in misappropriation and

ultimately, loss of government revenue.

722. We recommended that management should step up supervision

over revenue collection and ensure that the Revenue Collectors

comply with the provision of the financial regulation and the

management policy stated above.

723. Management responded that, it detected the problem and as a

result transferred the affected officers. Management added that the

revenue collectors would be constantly monitored and supervised for

the practice to be stemmed.

Unearned salaries - GH¢39,531.81

724. Contrary to Regulation 298 of L.I. 1802 we observed that 16

separated staff during the review period were paid unearned salaries

totalling GH¢41,431.81. We noted that management duly informed

the Controller and Accountant-General’s Department (C & A-GD) to

delete the ex-employees names from the pay roll. However, it took the

C & A-GD periods ranging between one and 12 months to effect the

deletions.


725. We nonetheless observed that management failed to notify the

bankers of the separated staff to stop payment of the unearned salaries

and transfer same into the Consolidated Fund contrary to the

aforementioned financial regulation. This omission could result in the

loss of the money to the state.

726. At the instance of the audit, an amount of GH¢1,900.00 was

recovered from one of the retired officers, leaving a total amount of

GH¢39,531.81 yet to be recovered.

727. We recommended that efforts should be made by management

to recover the outstanding amount of GH¢39,531.81 into Government

chest and obtain a Treasury Receipt to support the recoveries for our

verification.

728. Management stated without documentary evidence that the

banks of the separated officers were informed to transfer the unearned

salaries into the Consolidated Fund. Management also intimated that

officers who might have withdrawn moneys before the bank’s action

were being identified for the refund of the balance.

LAND REGISTRATION DIVISION OF THE LANDS

COMMISSION

Introduction

729. This report relates to the audited accounts of the Land

Registration Division of the Lands Commission for the period 1

January 2009 to 31 December 2010.

Operational results

730. Total income increased by 41.4% from GH¢1,472,039.47 in

2009 to GH¢2,081,637.51 in 2010. Donor Fund, on the other hand,

decreased by 85.6%, a decline from GH¢34,598.96 in 2009 to

GH¢4,996.74 in 2010. The increment in total income was mainly due

to a 71.9% increase in IGF from GH¢657,046.00 in 2009 to

GH¢1,129,734.00 in 2010. Other Income, also decreased by 15.8%

from GH¢339,515.10 in 2009 to GH¢285,981.30 in 2010. Table 54 is

the income statement for 2010 and 2009 reviewed.




Income

2010

GH¢

2009

GH¢

Difference

GH¢

%

Change

GoG Grant 660,925.47 440,879.41 220,046.06 49.9

IGF – Consolidated

Fund

1,129,734.00 657,046.00 472,688.00 71.9

Donor Fund 4,996.74 34,598.96 (29,602.22) (85.6)

Other Income 285,981.30 339,515.10 (53,533.80) (15.8)

Total Income 2,081,637.51 1,420,712.04 609,598.04 41.4

Expenditure

Personnel Emoluments 415,738.78 330,834.75 84,904.03 25.7

Administrative

Expense

121,880.52 92,735.44 29,145.08 31.4

Service Expense 11,156.44 2,205.00 8,951.44 406.0

Investment 39,985.09 79,098.83 (39,113.74) (49.4)

IGF – Transfer to

Consolidated Fund

1,129,734.00 657,046.00 472,688.00 71.9

Donor Fund

Programme

31,083.90 38,990.80 (7,906.90) (20.3)

Others 334,962.20 248,629.36 86,332.84 34.7

Total Expenditure 2,084,540.93 1,449,540.18 635,000.75 43.8

Surplus/(Deficit) (2,903.42) 22,499.29 (25,402.71) (112.9)

731. Expenditure incurred in 2010 amounted to GH¢2,084,540.93 as

against GH¢1,449,540.18 in 2009, an increase of 43.8%. The

expenditure components included Personnel Emoluments of

GH¢415,738.78 (2009: GH¢330,834.75) representing a 25.7%

increase; Administration Expenditure amounted to GH¢121,880.52 in

2010 (2009: GH¢92,735.44) an increase of 31.4%. Service

Expenditure was GH¢11,156.44 in 2010 (2009: GH¢2,205.00) an

increase of 406.0%. Investment Expenditure on the other hand

reduced by 49.4% to GH¢39,985.09 in the year under review, (2009:

GH¢79,098.83).

732. Donor Funded Expenditure decreased by 20.3% to

GH¢31,083.90 in 2010 (2009: GH¢38,990.83). Other Expenditure

registered GH¢334,962.20 in 2010 as against GH¢243,629.36 in


2009, resulting in a rise of 34.7% and IGF transferred to the

Consolidated Fund amounted to GH¢1,129,734.00 in 2010 (2009:

GH¢657,046.00); an increase of 71.9%, which was the main cause of

upward movement in the total expenditure.

733. An operational deficit of GH¢2,903.42 was registered in 2010

as against a surplus of GH¢22,499.29 in 2009.

Financial position

734. Table 55 provides the financial position of the Division as at 31

December 2010.

Table 55: Financial position as at 31 December 2010 Item 2010

GH¢

2009

GH¢

Difference

GH¢

%

Change

Cash-In-Hand and At-

Bank

162,318.92 207,329.23 (45,010.31) (21.7)

Advances 8,545.00 7,835.00 710.00 9.1

Total 170,863.92 215,164.23 (44,300.31) (20.6)

Current Liabilities

Sundry Creditor and

Accruals

18,406.04 84,323.07 (65,917.03) (78.2)

Other Creditors 129,400.99 153,202.05 (23,801.06) (15.5)

Total 147,807.03 237,525.12 (89,718.09) (37.8)

Net Assets 23,056.89 (22,360.89) 45,417.78.00 (203.1)

735. The Current assets of the Division registered a decrease of

20.6% from GH¢215,164.23 in 2009 to GH¢170,863.92 in 2010. This

was as a result of drop in the cash and bank balances.

736. Current liabilities, also declined by 37.8% from

GH¢237,525.12 in 2009 to GH¢147,807.03 in 2010. The decrease was

as a result of 78.2% drop in the sundry creditors and accruals.

737. Net Assets also registered GH¢23,056.89 in 2010 as against a

deficit of GH¢22,360.89 in 2009.

738. The Division recorded a current ratio of 1.2:1 indicating that it

might have difficulties in discharging its short term obligations when

they fall due.



MANAGEMENT ISSUES

Unapproved extension of national service period

739. National Service Personnel posted to organizations are to serve

for one year, from October to September, during which the office of

the National Service Scheme (NSS) is responsible for their monthly

allowance.

740. Our examination of payment vouchers revealed that

management extended the service period of 14 Service Personnel to

December of the respective years without approval from the

Commission and the National Service Secretariat.

741. The unapproved extension cost the Registry a total amount of

GH¢11,703.75, which had not been budgeted for. Management’s

action in misapplying funds could negatively affect the achievement

of planned programmes.

742. In order not to throw the budget of the Division into disarray,

we recommended that in future, management should budget for and

seek approval from the Commission and the NSS for the extension of

service period or the engagement of temporary staff.

743. Management accepted our recommendation.

Failure to obtain three quotations

744. Section 43(1) of the PPA states that, “the procurement entity

shall request quotations from as many suppliers or contractors as

practicable, but from at least three different sources”.

745. We noted during our audit that contrary to the provision of the

PPA, management purchased items worth GH¢13,738.81 without

requesting for at least three different quotations or seeking approval

from the Public Procurement Board for single sourcing in violation of

Section 40(2) of Act 663.


746. The lapse which resulted from ineffective control by

management over the procurement processes could defeat

transparency and goods could be purchased at inflated costs, thus

undermining the principle of value for money in public financial

management.

747. We advised management to comply with the dictates of the

PPA to ensure fairness, transparency and value for money in its

procurement dealings.

Purchase from unregistered VAT entities

748. Our review of records revealed that management procured

goods and services amounting to GH¢5,322.00 from non-VAT

registered entities contrary to Regulation 183(4) of the FAR.

749. Management’s failure to deal with VAT registered entities

resulted in a tax revenue loss of GH¢798.30 accruing to the State.

750. We therefore recommended that Management should comply

with the above stated regulation and deal with VAT registered entities

when procuring stores.

Inappropriate record keeping

751. Best records management practice demands that documents in

all forms should be kept in a conducive environment in order to

prevent theft and damages. Additionally, they should be arranged in a

sequential manner for easy accessibility or identification for reference.

752. We however noted that the records room or “strong room” of

the Division was in bad shape. Apart from not being spacious, it had

no emergency exit and there was evidence that the roof leaked

whenever it rained. There were also no fire extinguishers to fight any

fire outbreak. Moreover, some of the important documents were kept

on the bare floor for lack of adequate shelves or filing cabinets.

753. The foregoing situation could lead to irreparable loss in the

event of a fire outbreak. It also made difficult retrieving of records for



referencing. As a result of improper storage, documents easily get

mixed up thereby contributing to the delay in issuing of land title

certificates and other services rendered.

754. Lack of management supervision and inadequate maintenance

of buildings have resulted in the deteriorating state of the records

room.

755. With the increase in land transactions and to ensure efficiency

as well as safeguard the documents, we urged management to make

provision in future budgets for funds to acquire a bigger

accommodation with the necessary facilities for the records room so

that documents could be arranged sequentially for easy retrieval.

Meanwhile, the room should be renovated and provided with fire

extinguishers and pallets or shelves.

756. Management accepted our recommendation for

implementation.

PUBLIC AND VESTED LANDS MANAGEMENT

DIVISION OF LANDS COMMISSION

757. This report is in relation to the audited accounts of the Public

and Vested Lands Management Division of Lands Commission

(PVLMD) for the year ended 31 December 2010.

MANAGEMENT ISSUES

Expenditure without supporting documents- GH¢282,555.00

758. Contrary to Regulation 39(c) of the FAR, our audit disclosed

that 27 payment vouchers, totalling GH¢282,555.00 were without

relevant supporting documents such as invoices, statement of claims

and receipts to properly acquit the payments.

759. We could therefore not vouch the propriety or otherwise of the

expenditure in the absence of vital documentary evidence supporting

the disbursements.


760. We recommended that management should ensure the

payments are properly acquitted failing which the amount involved

should be recovered from the authorizing and paying officers, paid

into the appropriate account and our office duly notified for

verification. Management should also ensure that in future, payment

vouchers are attached with the appropriate documents before effecting

payments.

761. Management in response stated that the expenditure was

genuine and that the relevant documents had been attached to the

payment vouchers for verification. However as at the time of

reporting, the vouchers had not been made available to our office.

Hotel accommodation

762. We noted that management had entered into an agreement with

East Legon Guest Lodge to provide hotel accommodation services to

staff that were transferred to Accra and were yet to secure

accommodation without opening the contract to competitive bidding.

763. This omission contravened Section 35 (I) of the PPA which

obligates a procurement entity to procure goods, services or works by

competitive tendering.

764. From the above lapse, it was evident that management might

not have obtained value for money for a total amount of

GH¢75,551.78 paid during the period reviewed on hotel

accommodation.

765. Management was advised to comply with the provision of the

PPA in subsequent transactions.

Absence of Audit Reports Implementation Committee (ARIC)

766. 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).



767. We observed that no ARIC has been established by the

Commission. The absence of an ARIC could result in the non-

implementation of recommendations made in audit and other

monitoring reports.

768. We recommended and management agreed to liaise with the

governing body to have an ARIC established in order to facilitate the

implementation of audit recommendations.

MINISTRY OF JUSTICE

LAW REFORM COMMISSION

Introduction

769. This report is in relation to the audited accounts of the Law

Reform Commission for the period 1 January 2010 to 31 December

2011.

Operational result

770. The Commission’s total income for 2011 was GH¢369,264.37

as compared with GH¢272,953.28 in 2010, an increase of

GH¢96,311.09 or 35.3 %. This was due to increase by the same

margin in Government Subvention which is the only source of

income.

771. The total expenditure also increased by GH¢92,273.33 from

GH¢267,968.92 in 2010 to GH¢360,242.25 in 2011, an increase of

34.4%. Prevalent in this increase was a 56.4% rise in Personnel

Emolument from GH¢150,222.79 in 2010 to GH¢234,916.74 in 2011.

The increase was due to rise in salaries and related allowances for the

period. Similarly, Administrative expenditure rose from

GH¢107,845.75 in 2010 to GH¢123,121.63 in 2011, representing

14.2% increase. The rise in vehicle running cost, repairs to office

buildings and depreciation charge accounted for the increase in

Administrative expenses.


772. The Commission ended the year with a surplus of

GH¢9,022.12 as against GH¢4,984.36 in the previous year; an

increase of GH¢4,037.76 or 81.0%. The performance indicators are

shown in Table 56.


Income

2011

GH¢

2010

GH¢

%

Change

Subventions 369,264.37 272,953.28 35.3

Total Income 369,264.37 272,953.28 35.3

Expenditure


Administration 123,121.63 107,845.75 14.2

Service 2,203.88 9,900.38 (77.7)

Total Expenditure 360,242.25 267,968.92 34.4

Surplus/(Deficit) 9,022.12 4,984.36 81.0

Non – current assets

773. The Commission’s non-current assets appreciated by 39.7% to

GH¢192,211.98 in 2011 as against GH¢137,547.00 the previous year

due to the acquisition of non-current assets within the year.

Current assets

774. Current assets decreased by GH¢8,642.3 or 48.2% from

GH¢17,929.31 in 2010 to GH¢9,287.01 in 2011 as a result of a 53.3%

drop in bank balance.

Current liabilities

775. The Commission acquired a motor vehicle on credit in 2011 at

the cost GH¢ 37,000.00, hence the liability.

776. The liquidity position of the Commission indicated by a current

ratio of 0.2:1 shows that its short term obligations cannot be met when

they fall due.

Accumulated fund

777. The accumulated fund for the period rose from GH¢155,476.87

in 2010 to GH¢164,498.99 in 2011as a result of the 81.0% increase in

surplus.



MANAGEMENT ISSUES

Procurement from non VAT registered persons - GH¢5,228.00

778. Contrary to the dictates of Regulation 183(4) of the FAR, we

noted that the Commission procured goods amounting to

GH¢5,228.00 from Yelizoli Enterprise, a non-VAT registered

supplier.

779. Management’s non-compliance with the above regulation

resulted in the loss of GH¢784.20 in VAT/NHIL revenue.

780. We therefore recommended that in future, management should

ensure that purchases are made from only VAT registered

persons/entities in accordance with the provision of the

aforementioned FAR.

781. Management stated that the items which were paints were

rather bought by a contractor who was awarded a contract to paint the

offices. We hold a contrary view since the Commission paid for the

paint. We therefore maintain our recommendation, failing which

officers responsible for future loss of revenue would be surcharged

with the amount involved.

Fuel coupons unaccounted for - GH¢986.00

782. Store Regulation 1604 of 1984 provides among others that, full

particulars of receipts of fuel, oil and lubricants shall be entered up

daily in the log books by drivers of official vehicles.

783. On the contrary, we noted that fuel coupons amounting to

GH¢986.00 purchased by the Commission during the period under

review were not accounted for in the respective vehicle log books.

784. The drivers’ failure to record the fuel purchased in the

respective vehicle log books undermines the store regulation and

denies assurance that the fuel had been bought and used in the interest

of the Commission. This practice has a high risk of abuse.


785. We therefore advised and management agreed to ensure that

the drivers account for these and successive fuel purchased or hold

them liable for a refund of the amount involved.

COMMISSION ON HUMAN RIGHTS AND

ADMINISTRATIVE JUSTICE (CHRAJ)

Introduction

786. This report is in relation to the audited accounts of the

Commission on Human Rights and Administrative Justice (CHRAJ)

for the period 1 January 2009 to 31 December 2011.

Operational results

787. The Commission made a surplus of GH¢246,385.33 in 2011

which represents an increase of 5033.7% as against the previous

year’s surplus of GH¢4,799.33. Details of performance indicators for

the year last two years of 2010 and 2011 are shown in Table 57.


Income 2011 (GH¢) 2010 (GH¢) Change %Change

Subventions 9,679,594.63 6,471,461.70 3,208,132.93 49.6

Others 12,265.00 15,000.00 (2,735.00) (18.2)

Total 9,691,859.63 6,486,461.70 3,205,397.93 49.4

Expenditure:

Personnel

Emoluments 7,871,779.70 4,816,092.54 3,055,687.16 63.5

Administration 1,154,722.60 1,484,440.45 (329,717.85) (22.2)

Service 418,972.00 181,129.38 237,842.62 131.3

Total Expenditure 9,445,474.30 6,481,662.37 2,963,811.93 45.7

Income Surplus 246,385.33 4,799.33 241,586.00 5,033.7

788. Total Income of the Commission registered a 49.6% rise from

GH¢6,486,461.70 in 2010 to GH¢9,691,859.63 in 2011.The increment

in total income was largely due to a 61.5% rise in Personnel

emoluments, from GH¢4,836,253.13 in 2010 to GH¢7,808,234.89 in

2011. The upward trend resulted from the Commission’s migration

onto the Single Spine Salary Structure.



789. Income in relation to Service Activities also rose by 26.0%

from GH¢505,632 in 2010 to GH¢637,139.74 in 2011. Investment

Income which represented a 4.1% of total income increased by a

1,251.8 % from GH¢29,576 to the current amount of GH¢399,802 in

2011. However, government subvention for Administration Activities

and other Incomes fell by 24.1% and 18.2% respectively.

790. Total expenditure of the Commission also registered a 45.7%

rise from GH¢6,481,662.37 in 2010 to GH¢9,445,474.30 in 2011.

This increase as earlier on mentioned was largely due to an increase in

Personnel emoluments as a result of the migration of the Commission

onto the Single Spine Salary Structure in 2011.

791. Even though there was a 26.0% increase in Service Activity

income, the expenses relating to it increased by 131.3 % in 2011. The

rise was due to the introduction of 22 new expenditure items in 2011

instead of the only two, Overseas Conference and Training Cost

which were disclosed in previous financial statements.

Financial Position

792. The details of the financial position are shown in Table 58.


Non-current assets 2011 GH¢

2010 GH¢

% Change

Fixed Assets 456,251.97 150,194.57 203.8 Current Assets Cash and Bank Balances 48,166.96 107,622.99 (55.2)

Staff Debtors 50,144.02 52,215.04 (4.0) 98,310.98 159,838.03 (38.5)

Total Assets 554,562.95 310,032.60 78.9

Current Liabilities: Creditors 102,527.59 104,382.57 (1.8)

Net Assets 452,035.36 205,650.03 119.8

Financed by:

Accumulated Fund 452,035.36 205,650.03 119.8


793. Non-current assets increased from GH¢150,194.57 in 2010 to

GH¢456,251.97 in 2011 representing a 203.8% increase. The increase

was attributed to additional acquisition of fixed assets in 2011.

794. The Commission’s current assets which comprise Bank

balances and Staff debtors decreased by 38.5% during the year

reviewed. The fall was largely due to the drop in the bank balance in

2011.

795. Current liabilities which includes amount unpaid to C & AG

and IRS also decreased by 1.78 % from GH¢102,527.59 in 2010 to

GH¢104,382.57 in 2011.The decrease was attributed to payments

made to C & AG during the period reviewed.

796. Accumulated Fund increased by GH¢246,385.33 or 119.81%

from the preceding amount of GH¢205,650.03 to GH¢452,035.36.

MANAGEMENT ISSUES

Accountable imprest not retired– GH¢22,512.00

797. Our examination of the payment vouchers disclosed that, a

total amount of GH¢22,512.00 granted to five officers of the

Commission to run various programmes, had neither been retired nor

treated as an advance to the imprest holders’ account as at the time of

reporting even though the programmes had ended.

798. We could therefore not determine whether the monies were

used for the intended purpose. The lapse was attributed to ineffective

supervision together with the Internal Audit Unit’s failure to review

the transactions with the view of ensuring that all imprest are

accounted for by the due date as stipulated by Regulation 288 (2) of

FAR, 2004.

799. We recommended that the officers involved be made to

account for the imprest or the sum be adjusted to a personal advance

account of the imprest holders to forestall unspent balance of imprest

being locked up in individuals’ pockets to the detriment of the



Commission. Additionally, management was advised to step up

supervision and introduce measures which would ensure prompt

retirement of imprest.

Failure to refund excess PE receipts - GH¢ 89,551.79

800. In our previous audit report reference no

B/CAD/7/9/VOL.2/174 of 5 July 2010, we recommended and the

Controller and Accountant General(C&AG) followed up with a memo

reference Number CAGD/CC/16/2011 dated 13 June 2011, directing

the Commission to refund to Government chest an amount of

GH¢89,551.79 which was in excess of request made for payment of

Personnel Emolument for the year 2010 and advice the C&AG

accordingly.

801. Notwithstanding these, the Commission failed to refund the

amount to the appropriate account, as at the time of reporting. We also

noted that the bank balance for the salaries account stood at

GH¢48,100.96 as at 31 December 2011, an indication that

GH¢41,450.83 out of the unpaid balance of GH¢89,551.79 had been

vired without authority from the Ministry of Finance and Economic

Planning.

802. The disregard for controls put in place, undermines government

policies and will also disrupt the budget.

803. Management was advised to comply with the C&AG’s

directive and pay the amount involved in full into the appropriate

account without any further delay and inform our office accordingly,

failing which the amount should be set off against subvention for the

following year .

804. Management was of the view that because it appeared before

the Public Accounts Committee on the subject as contained in the

2010 Auditor General’s report to Parliament, it should no longer

become an audit issue.


805. We disagreed with management’s stance as there was no

documentary evidence to confirm the amount had been paid to chest.

We therefore maintained our earlier recommendation.

Irregularities noted with payment of rent advance-GH¢78,120.00

806. Our audit disclosed that management paid a one year rent

advance of GH¢78,120.00 for the Commissioner in lieu of a bungalow

on 12 October 2011. Our review of the disbursement revealed that the

expenditure was not budgeted for and control procedures for single

sourcing as provided under Section 41 of the Public Procurement

Act,2003 (Act 663) was circumvented.

807. Non adherence to laid down procedures undermines controls

put in place.

808. We also noted that, former Commissioners were

accommodated in Government Bungalows and opined that the new

Commissioner should have been treated the same. The practice, if

allowed to continue could distort planned activities and lead to

financial distress of the Commission.

809. Management explained that at the time the Commissioner was

appointed, the Government Bungalow allocated to her was undergoing

renovation.

810. We were of the view that Management could have used the

funds to finance the renovation of the bungalow. We recommended

that management should be circumspect in future dealings to avoid

wasteful spending. Meanwhile we advised management to find an

alternative accommodation for the Commissioner.

811. Management acceded to our recommendation and stated that

the rent payment was not intended to be a permanent feature.

Failure to pay withholding tax - GH¢52,384.00

812. Section 87(1) of the Internal Revenue Act, Act 2000 provides

that “a withholding agent shall pay to the Commissioner, a tax that has



been withheld or that should have been withheld within fifteen days

after the end of the month in which the payment subject to

withholding tax is made by the withholding agent”.

813. In contravention of the above cited law, we observed that

between 2009 and 2011, only GH¢36,145.00 out of taxes withheld

from suppliers amounting to GH¢88,529.00 had been remitted to the

DTRD, leaving a balance of GH¢52,384.00 yet to be paid. The

anomaly was caused by management’s failure to adhere to the above

law.

814. Non-payment of taxes withheld to the DTRD deprived the

suppliers of their tax credit and the State of the much needed revenue

for developmental purposes.

815. To avoid the payment of penalty, we urged and management

agreed to pay the outstanding tax of GH¢52,384.00 and ensure prompt

and regular payments in future.

Purchases not routed through stores –GH¢350,601.00

816. Our examination of payment vouchers revealed that various

purchases amounting to GH¢350,601.00 were not routed through

stores before use in violation of Store Regulations 0502 and 0604

which requires that goods received should be recorded in the

appropriate ledger and tally cards, and issue of same made on the

authority of properly signed requisitions.

817. Though our verification revealed that the items were receipted

and used in the interest of the Commission by the respective user

ends, the procedural lapse is a recipe for diversion of store items and

other stores malpractices. Poor supervision by management over the

stores accounted for the lapse.

818. To provide proper accountability of stores, we recommended

and management accepted to step up supervision and ensure that the


storekeeper maintains the requisite stores records on the

Commission’s receipts and issue of items purchased.

Non-functioning of Audit Reports Implementation Committee

(ARIC)

819. Section 30 of the Audit Service Act, 2000 (Act 584) provides

that an institution, body or organisation, which is subject to audit by

the Auditor-General should establish an Audit Reports

Implementation Committee (ARIC).

820. It is the duty of the ARIC to ensure that the head of the

organisation pursues implementation of matters in all audit reports as

well as the Auditor-General’s Reports endorsed by Parliament.

821. We observed that although management has constituted an

ARIC, it was not operational as our request for annual statements

showing the status of implementation of recommendation was not

heeded to. Management had also not responded to our previous audit

report referenced no B/CAD.7/9/Vol.2/174 of 5 July 2010 as at the

time of reporting in contravention of Section 29 of Act 584 which

requires organizations to respond to audit reports within a period of 30

days after receipt. These were suggestive that the ARIC was inactive.

822. For prompt implementation of recommendations and

ratifications of identified weaknesses in audit and other monitoring

reports, we recommended and management agreed to make the ARIC

more responsive to its functions.

MINISTRY OF INTERIOR

NATIONAL DISASTER MANAGEMENT ORGANISATION

Introduction

823. This report is related to the audited accounts of the National

Disaster Management Organisation (NADMO) for the period 1

January 2009 to 31 December 2010.



Operational performance

824. Total Income registered an increase of 87.5% from

GH¢15,185,342.97 in 2009 to GH¢28,478,800.78 in 2010. This was

largely as a result of increase in Donations and Grants by 219.2% to

alleviate the plight of flood victims. Subvention also increased by

35.4% from GH¢10,493,100.97 in 2009 to GH¢14,206,214.26 in

2010. The performance indicators are shown in Table58


Revenue 2010

GH¢

2009

GH¢

%

Change

Subvention 14,206,214.26 10,493,100.97 35.4

Donations & Grants 14,071,845.00 4,408,274.00 219.2

USD Account 200,741.52 283,968.00 (29.3)

Total Income 28,478,800.78 15,185,342.97 87.5

Expenditure

Personnel Emolument 6,104,209.84 5,202,635.07 17.3

Service Expenditure 18,366,239.75 8,200,899.86 124.0

Administrative

Expenditure

3,738,961.55 2,363,395 58.2


Surplus/Deficit 269,389.64 (581,587.20) (146.3)

825. Expenditure over the year similarly registered a rise of 78.9%

from GH¢15,766,930.17 in 2009 to GH¢28,209,411.14 in 2010. This

was as a result of increase in Service Expenditure which recorded an

upsurge of 124.0% over the previous year, from GH¢8,200,899.86 in

2009 to GH¢18,366,239.75 in 2010 due to increase in expenditure on

relief items over the period under consideration. Administrative

Expenditure also recorded an increase of 58.2% from

GH¢2,363,395.24 in 2009 to GH¢3,738,961.55 in 2010.

826. An operational surplus of GH¢269,389.64 was registered

during the year as compared with a deficit of GH¢581,587.20

recorded in 2009.


Financial Position

827. NADMO’s financial position is shown in Table 60.


828. Non-current assets of the NADMO stood at GH¢796,084.94 in

2010 compared with GH¢545,773.10 in 2009, registering a growth of

45.9%. The increase in fixed assets was as a result of acquisitions of

land, equipment, computers, motor vehicles, fixtures and fittings and

motor bikes.

829. Current assets rose from GH¢42,799.00 in 2009 to

GH¢62,876.81 in the current year, representing an increase of 43.6%.

This was due to a 56.3% rise in the cash at bank balance.

830. Current liabilities remained the same for the two years

reviewed. Though we recommended in our previous management

letter that management should investigate and take appropriate action

on the liability which stood in the name of Ministry of Food and

Agriculture since 2003, no action has been taken. We urged

management to take the appropriate steps for the financial statements

to give a true and fair view of the state of affairs.

831. The liquidity position as depicted by the current ratio 0.9:1 was

unhealthy as NADMO would not be in a position to meet its current

liabilities when they fall due.

2010

(GH¢)

2009

(GH¢)

%

Increase/

Decrease

Non-current Assets 796,084.94 545,773.10 45.9

Current Assets

Debtors 9,901.60 9,901.60 -

Cash at bank 52,975.21 33,897.40 56.3

Current Liabilities 72,000.00 72,000.00 -

Net Assets 786,961.75 517,572.10 52.1



MINISTRY OF COMMUNICATIONS

POSTAL AND COURIER SERVICES REGULATORY

COMMISSION

Introduction

832. This report relates to the audited accounts of the Postal and

Courier Services Regulatory Commission for the period 1 January

2010 to 31 December 2011.

Operational results

833. Total income increased by 5.6% from GH¢312,636 the

previous year to GH¢330,288 in 2011 as a result of increase in

Internally Generated Funds (IGF) by 68.1%. The rise in IGF was

mainly due to a 110.0% increase in revenue derived from license fees

and forms which amounted to GH¢143,300 in 2011 as against

GH¢68,250 in 2010. Table 61 shows the performance indicators.


Income 2011

GH¢

2010

GH¢

%

Change

Subvention 179,472 222,903 (19.4)

IGF 150,816 89,734 68.1

Total 330,288 312,636 5.6

Expenditure

Personnel emoluments 121,883 111,470 9.3

Admin Expenses 226,637 193,470 17.1

Service Activity 32,310 68,262 (52.7)

Total 380,830 373,202 2.0

Deficit 50,542 60,566 16.5

834. Total expenditure increased by 2.0% from GH¢373,202 in

2010 to GH¢380,830 in 2011. This was due to a rise in administrative

activity expenditure by 17.1%, occasioned largely by an increase of

35.8% in P.E. related allowance.


835. The Commission’s operations for 2011 ended with a deficit of

GH¢50,542 as against GH¢60,565.64 in 2010, representing a

reduction of 16.5% in the deficit.

Financial Position

836. The Commission’s Fixed Assets decreased by 7.1%, from

GH¢92,228 in 2010 to GH¢85,676.00 in 2011. This was due to the

acquisition of lesser valued asset as compared to a higher valued asset

which was disposed off at a loss.

837. Similarly, current assets reduced by 45.5% from GH¢111,468

in 2010 to GH¢60,750 in 2011, due to the re-call of the Commission’s

account at Ecobank.

838. Current liability also decreased by 41.5% from GH¢13,681.64

in 2010 to GH¢7,997 in 2011 due to part settlement of the tax

liability.

839. The solvency of the Commission, shown by a current ratio of

7.6:1 meant that the Commission is in a position to discharge its short

term obligation which is mainly withheld tax and we recommended

that management should discharge this liability without delay.

MANAGEMENT ISSUE

Non-payment of withheld tax - GH¢7,997.00

840. Our examination of payment vouchers revealed that out of

withheld taxes amounting to GH¢13,681.64 in the 2010 and 2011

financial years, management remitted GH¢5,685.00 to the

Commissioner, DTRD of the GRA in 2011, leaving a balance of

GH¢7,997.00 as at 2011.

841. The above practice contravened Section 87 of the Internal

Revenue Act, 2000 (Act 592), which states that withheld taxes should

be remitted to the district tax office within 15 days after the end of the

month in which the eligible payments from which the taxes were

deducted.



842. The delay in remitting the tax denied the state of much needed

revenue. Management explained that the Commission was not able to

pay the tax promptly because government subvention was woefully

inadequate.

843. To improve inflows into the Consolidated Fund, we advised

management to desist from delays in remitting the tax and ensure

payment within the stipulated time.

844. Management promised to meet with the DTRD to negotiate

payment terms for the outstanding tax.

Non-withholding of tax - GH¢3,147.21

845. Section 84(1b) of the Internal Revenue Act, 2000 (Act 592)

stipulates among others that where a resident person other than an

individual pays fees emoluments and any other benefits to a resident

Director, Manager or Board Members a company or body of persons,

the person making the payment shall withhold tax on the gross

amount of the payment at 10%.

846. On the contrary, we noted that the Accountant failed to deduct

the appropriate taxes amounting to GH¢1,270.57 and GH¢1,876.64 in

2010 and 2011 respectively from allowances and bonus paid to

Commissioners and staff of the Commission.

847. The non-compliance with the tax law would result in the loss of

tax revenue to the state. We attributed the omission to the accounting

officer not being aware of the tax law.

848. We advised management to be abreast with the tax law and act

accordingly. We also recommended that management should remit

the total amount of GH¢3,147.21 to the tax authority and recover

same from the affected persons in accordance with Section 88(1) of

Act 592.

849. Management accepted the recommendations.


MINISTRY OF ENERGY AND PETROLEUM

GHANA NATIONAL PETROLEUM CORPORATION

Introduction

850. This report relates to the audited accounts of the Ghana

National Petroleum Corporation for the year ended 31 December

2011.

Operational result

851. The Corporation’s operations for the year under review ended

with a surplus of GH¢386,568,708, compared with a 2010 surplus of

GH¢11,077,750, an increase of 3,389.6%. The performance indicators

are shown in Table 62.


Income 2011

GH¢

2010

GH¢

%

Change

Sales Revenue 686,301,032 - -

Gov’t Royalty (189,808,531) - -

Net Sales 496,492,501 - -

Cost of Sales (54,308,652) - -

Gross Earnings 442,183,849 - -

(Loss)/Profit from Refined

Products Trading

(39,356,747) 7,511,574 (623.9)

Non-Trading Income 23,411,937 23,168,018 1.1

Total Income 426,239,039 30,679,592 1,289.3

Expenditure

Adm. & Gen. Expenses 39,670,331 19,610,842 102.4


Surplus 386,568,708 11,077,750 3,389.6

852. Total income rose by 1,289.3% from GH¢30,679,592 in

2010 to GH¢426,239,039 in 2011. This was due to a GH¢686,301,032

sale of crude oil from the jubilee Field recorded in 2011 as against

none in 2010. Out of this, a total amount of GH¢189,808,531 was paid

to Government of Ghana as royalties. The cost of sales of the Jubilee



crude oil was GH¢54,308,652 as result of which the gross earnings

from the sale of the Jubilee crude was GH¢442,183,849.

853. Total expenditure made up of only administrative and

general expenses increased by 102.4% for the year 2011 as compared

to the year 2010. The major cause of increase in the administrative

and general expenses was mainly due to a significant increase in

expenditure on foreign travels, insurance, legal fees and staff training.

Financial position

854. The highlights of the Corporation’s financial position are

presented in Table 63.


Item 2011

GH¢

2010

GH¢

%

Change


Current Assets 265,141,512 837,320,958 (68.3)


Non-Current Liabilities 53,373,908 150,407,027 (64.5)

Net Assets 313,770,022 86,653,214 262.1


855. Non-current assets rose by 60.6% from GH¢170,413,682 in

2010 to GH¢273,701,004 in 2011. This was due mainly to a 64.1%

rise in Petroleum Projects during the year.

856. Current assets of the Corporation declined by 68.3% from

GH¢837,320,958 in 2010 to GH¢265,141,512 in 2011. Significant

decreases in crude stocks (100%) and short term investment

(37,047.0%) accounted for the fall.

857. Current liabilities also decreased by 75.6% from

GH¢921,081,426 in 2010 to GH¢225,072,494 in 2011. This was due

to significant reduction in short-term loan facilities contracted from

BNP Paribas, Stanbic Bank Ghana and Ghana International Bank.


858. Non-Current liabilities fell by 64.5% from GH¢150,407,027 in

2010 to GH¢53,373,908 in 2011. This was as a result of a reduction in

a medium term loan from Jubilee Partner Financing.

859. Net Assets grew by 262.17% from GH¢86,653,214 in 2010 to

GH¢313,770,022 in 2011.

860. The liquidity status of the Corporation as depicted by the

current ratio of 1.2:1 (2010: 0.9:1) is unhealthy. This is an indication

that the Corporation might not be in a position to meet its short-term

obligations as and when they fall due.

MANAGEMENT ISSUES

Indebtedness of Sage Petroleum Limited - GH¢2,125,347

861. During the review of trade debtors we observed that Sage

Petroleum Limited owes GNPC a total amount of GH¢2,125,347.

However, Sage Petroleum Limited by the letter dated 5 April 2012

accepted liability of GH¢2,125,347 but categorically stated that it had

discharged all its obligations under the said transaction.

862. Following from the disputes, GNPC made an appeal to

National Petroleum Authority (NPA) for arbitration but as at the time

of our audit no conclusion had been communicated to GNPC.

863. We advised management to follow up on the appeal made to

NPA and take the necessary action to recover the debt in order to

save the Company from any financial distress.

864. Management however indicated that the arbitration process is

far advanced with the likely event that the corporation will be

successful in recovering the debt.

ENERGY COMMISSION

Introduction

865. This report relates to audited accounts of the Energy

Commission for the year ended 31 December 2011.



Operational results

866. The operational performance for the Commission is shown in

Table 64.


Item 2011

GH¢

2010

GH¢

%

Change

Revenue Grants 6,493,897 5,881,182 10.4

Other Income 80,137 109,788 (27.0)

Total Income 6,574,034 5,990,970 9.7

Expenditure


Admin. & General Expenses 2,315,779 1,816,869 27.5

Service Activity Expenses 1,978,098 1,393,432 42.0


Surplus / (Deficit) (33,304) 1,298,288 (102.6)


GH¢6,574,034 in 2011. This was mainly due to a 10.4% rise in

Revenue Grants. Revenue Grants was made up of subvention from

Government of Ghana, Transfer from Energy Fund, Transfer from

Regulatory Levy Account, and Capital Grant Amortised.

868. Total Expenditure registered a 40.8% rise from GH¢4,692,682

in 2010 to GH¢6,607,338 in 2011. The 56.1% rise in Personnel

Emoluments was as a result of a 51.3% increase in Gross Pay from

GH¢1,384,168 in 2010 to GH¢2,094,737 in 2011 and increases in

Employer’s SSNIT Contribution from GH¢98,213 in 2010 to

GH¢167,702 in 2011.

869. The rise in Administrative and General Expenses was mainly

due to increase in Commissioners’ allowances from GH¢220,768 in

2010 to GH¢324,805 in 2011, a rise of 47.1%.

870. Service Activity expenses which rose by 42.0% was due to a

57.9% increase in Renewable Energy Divisions activities from

GH¢206,859 in 2010 to GH¢326,619 in 2011.


871. The year ended with a deficit of GH¢33,304 as against a

surplus of GH¢1,298,288 in 2010 representing a decrease of 102.6%.

Financial position

872. A summary of the Commission’s financial position as at

31 December 2011 is shown in Table 65.


Item 2011

GH¢

2010

GH¢

%

Change

Non-Current Assets 757,731 896,706 (15.5)

Current Assets 2,109,868 1,486,291 42.0



Net Assets 2,558,046 2,112,088 21.1


873. The Commission’s non-current assets went down by 15.5%

from GH¢896,706 in 2010 to GH¢757,731 in 2011. This was as a

result of transferring Fixed Deposit Investments from Non-Current

Assets to Current Assets.

874. Following from the above, current assets recorded an increase

of 42.0% from GH¢1,486,291 in 2010 to GH¢2,109,868 in 2011.

875. Current liabilities went up by 14.3% from an amount of

GH¢270,909 in 2010 to GH¢309,553 in 2011. The increment was as a

result of a Bank Overdraft facility taken within the year.

876. Net Assets grew by 21.1% from GH¢2,112,088 in 2010 to

GH¢2,558,046 in 2011.

877. The Commission’s liquidity position of 6.8:1 in 2011 (2010:

5.5:1) showed its ability to pay its short term debts when they are due.



MANAGEMENT ISSUES

Deposit for land – GH¢135,000

878. We observed that an amount of GH¢135,000 was paid to a

landlord in respect of land for office building at Tesano by the

Commission. The deal to acquire the land did not materialise. The

assurance received from the land owners was that the amount would

be refunded but this had not been done. As such, the recoverability of

this amount is doubtful.

879. We however recommended that effort should be made to

recover the amount from the land owners so that it could be used to

meet other operational activities of the Commission.

Staff debtors – GH¢5,121

880. We noted that an amount of GH¢5,121 was owed by ex

members of staff of the Commission. However for several years now

there has been no movement in these balances. The amount might not

be recoverable leading to an inflated debtor’s balance thereby not

reflecting fair reporting.

881. We recommended that the recovery of these debts should be

pursued and in future measures should be put in place to avert such

recurrences of losing public funds.

Accounts payable – GH¢150,000

882. We observed during the audit that an amount of GH¢150,000

was released by the Ministry of Energy to the Commission to meet its

budgetary requirements following a request by the Commission. This

amount has been in the books since 2009 and no effort had been made

for its pay back.

883. The status of this amount is unclear and this has hindered any

proper accounting treatment.


884. We recommended that a follow-up should be made to the

Ministry to confirm the status of the amount to enable appropriate

action to be taken for fair reporting so as to enhance decision making.

Receipts for licenses and permits

885. During our audit, we noted instances of delays in the issuance

of notices or debit notes to clients prompting them to make payment

for the renewal of their licenses. Some clients also took unduly long

time in honoring demands made on them for the renewal of licenses

and permits.

886. There is every indication that cash inflows of the Energy

Fund might be adversely affected.

887. We recommended that mechanisms should be put in place

to ensure that debit notes are sent to clients on timely basis and

prompt follow-up should be made on clients to honor their

obligations.

NATIONAL PETROLEUM AUTHORITY

Introduction


Petroleum Authority for the year ended 31 December 2011.

Operational Results

889. The Authority’s operations for the year under review ended

with a surplus of GH¢13,035,721 compared with 2010 surplus of

GH¢12,935,200, representing an increase of 0.8%. The performance

indicators are shown in Table 66.




Item 2011

GH¢

2010

GH¢

%

Change

Income 20,424,187 17,668,571 15.6

Other Income 3,238,197 820,291 294.8

Total Income 23,662,384 18,488,862 28.0

Expenditure

General & Admin.

Expenses

9,759,230 5,351,023 82.4

Operating Cost 867,433 202,639 328.1


Surplus / (Deficit) 13,035,721 12,935,200 0.8

890. Total Income went up by 28.0% from GH¢18,488.862 in 2010

to GH¢23,662,384 in 2011. Increases in License Fees, Bulk Oil

Storage License, Unified Petroleum Price Fund (UPPF) Service

Charges and Authorisation Fees accounted for the increase in Income.

An upsurge in Investment Income, Penalty Fees and Tender

Document Fees on the other hand accounted for the rise in Other

Income.

891. Total Expenditure for the year increased by 91.4% from

GH¢5,553,662 in 2010 to GH¢10,626,663 in 2011. The major items

which accounted for the increase in Expenditure were Salaries and

Allowances (74.2%), Staff Bonus (101.8%), Telephone, Postage &

Internet (93.2%), Staff Training & Training & Seminars (162.4%) and

Quality Control & Monitoring (1,664.6%).

Financial Position

892. A summary of the Authority’s financial position as at 31

December 2011 is shown in Table 67.



Item 2011

GH¢

2010

GH¢

%

Change

Non-Current Assets 759,770 491,508 54.6

Current Assets 35,532,616 25,487,393 39.4



Non-Current Liabilities 400,000 400,000 -

Net Assets 33,802,484 20,766,763 62.8


893. The Authority’s Non-Current Assets went up by 54.6% from

GH¢491,508 in 2011 to GH¢759,770 in 2011. This was mainly due to

acquisitions during the year.

894. Current Assets recorded an increase of 39.4% from

GH¢25,487,393 in 2010 to GH¢35,532,616 in 2011. Significant

increases in Advances and Prepayment, Short Term Investment and

Cash and Bank Balance accounted for the increase.

895. Current Liabilities on the other hand declined from an amount

of GH¢4,812,138 in 2010 to GH¢2,089,902 in 2011 to register a

decrease of 56.6%. The decrease was due to reductions in Accruals

and Accounts Payable.

896. The Authority’s liquidity position of 17.0:1 in 2011 (2010:

5.3:1) showed its ability to pay its short-term debts when they are due.

MANAGEMENT ISSUES

Trade debtors - GH¢26,152

897. We observed that an amount of GH¢26,152 owed by Energy

Commission in 2010 was still outstanding as at the time of reporting

898. This if not collected will result in less cash flow needed for the

running of the Authority.



899. We recommended that management should recover the amount

owed by the Energy Commission.

900. Management indicated that the amount is recoverable and some

discussions have been initiated towards resolving the issue.

Management added that NPA will do barter trade with Energy

Commission in terms of some services that the latter can provide to

the Authority.

Overpayment of motor-vehicles acquired - GH¢25,494.96

901. We observed that there was an overpayment of GH¢25,494.96

to Western Automobile Ghana Ltd. This resulted from the

overpayment of GH¢6,379.69 on each of the 4 Toyota Corolla

vehicles which were purchased. The cost per one vehicle as stated in

the contract agreement is GH¢42,491.29 but each vehicle has been

capitalised at GH¢48,864.98.

902. This has negatively impacted on the cash position of the

Authority as funds which could have been used to meet its operational

activities had been locked up with unintended recipients.

903. We recommended that management should make strenuous

efforts to recover the difference.

GHANA GRID COMPANY LIMITED

Introduction

904. This report covers the audited accounts of the Ghana Grid

Company Limited for the year ended 31 December 2011.

Operational Results

905. Total revenue received for the year under review increased by

42.4% from GH¢167,139,000 in 2010 to GH¢237,978,000. The

major component of this which is the transmission income increased

significantly from GH¢164,950,000 in 2010 to GH¢235,563,000 in

2011, resulting from an increase in energy transmission of 9808 GWh


in 2010 to 10,800 GWh in 2011. The other components of the

revenue made up of Other Income went down by 2.5% whilst Finance

Income however rose by 35.6% in the year under review. The

performance indicators are down in Table 68.

Table 68: Statement of Comprehensive Income for 2011

2011

H¢000

2010

GH¢000

%

Change

Revenue 235,620 164,950 42.8

Direct Costs (114,615) (88,501) 29.5

Gross Profit 121,005 76,449 58.3

Other Income 1,562 1602 (2.5)

Administrative Exp. (36,281) (16,553) 119.2

Operating Profit 86,286 61,498 40.3

Finance Costs (3,231) (3,046) 6.1

Finance Income 796 587 35.6

Profit before taxation 83,851 59,039 42.0

Taxation 0 0

Profit after taxation 83,851 59,039 42.0

906. Total Expenditure of the Company for the 2011 amounted to

GH¢154,127,000 compared with GH¢108,100,000 recorded in 2010,

an increase of 42.6%. Direct operating costs went up by 29.5% from

GH¢88,501,000 in 2010 to GH¢114,615,000 in 2011. The increase

was largely due to a 74.8% increase in staff cost and a 58.3% increase

in maintenance and other spares consumed.

907. Administrative expenses also rose significantly by 119.2%.

This was due to increases in staff cost from GH¢9,240,000 in 2010 to

GH¢14,625,000 in 2011.

908. Transport and other administrative cost and exchange loss were

the other components that contributed to the increase in

Administrative Expenses.

909. Profit after taxation registered a significant increase of 42.0%

from GH¢59,039,000 in 2010 to GH¢83,851,000 in 2011.



Financial Position

910. The financial position of the Company is sumarised in Table

69.


2011

GH¢ 000

2010

GH¢ 000

%

Change


Current Assets 237,222 116,701 103.3


Non-Current Liabilities 159,913 95,697 67.1

Current ratio 2.6:1 2.5:1

911. Non-Current Assets increased by 27.0% from GH¢489,154,000

in 2010 to GH¢621,068,000 in 2011. The Non-Current Assets

included fixed assets and investments. The increase was due to the

acquisition of fixed assets within the year and gross valuation

adjustments on fixed assets.

912. Current Assets rose by 103.3% from GH¢116,701,000 in 2010

to GH¢237,222,000 in 2011. Increases in Inventories, Trade

Receivables, Prepaid Expenses, Staff Advances, and Cash and Bank

Balances accounted for the rise in Current Assets.

913. Current Liabilities also recorded a significant increase of

97.6% from GH¢45,923,000 in 2010 to GH¢90,741,000 in 2011. This

resulted from increases in Trade and Other Payables and Current

Financial Liabilities (i.e. Loans due within one year).

914. The current ratio of Ghana Grid Company Limited improved

marginally from 2.5:1 in 2010 to 2.6:1 in 2011, an indication that the

Company can meet its short-term obligations when they fall due.


MANAGEMENT ISSUES

TAKORADI AREA OFFICE

Fuel Shortage – 908 litres

915. A review of monthly fuel dipping report compared with book

balances revealed that, Prestea had been experiencing fuel shortages

almost every month. The details are shown below:

Date of

Fuel

Dipping

Physical

Stock Qty

Book Stock

Bal.

Shortage in

(litres)

2/2/2011 3800 4059 259

10/5/2011 3500 3595 95

2/6/2011 1200 1232 32

4/7/2011 7000 7522 522

Total 908

916. This may be indicative of a faulty metering being used or

unapproved fuel issues.

917. The persistent experience of such shortages may result in losses

to the Company.

918. We therefore recommended that management should

investigate the cause of the shortages, apportion blame and recover

where necessary and also take appropriate measures to address it.

919. Management responded that a group of technical men from

GOIL were sent to Prestea in August 2011 to work on the pump.

Also, a supervisor has been tasked to closely monitor the fuel issues at

Prestea.

Fuel Issues made without approval

920. We observed that fuel issued out and signed for as received by

users departments were not authorized.

Below are details of the issues.



Requisition Coupon Description Vehicle

Date 1Number Number

7/10/11 9852 120 litres of diesel GT 9589 Z

8/10/11 9853 68 litres of diesel GT 2159-10


10/10/11 9855 71 litres of diesel GN 4372 Y

12/10/11 9857 70 litres of diesel GN 2159 -10





921. Poor supervision over the transport unit by management was

accountable for the lapse which could facilitate the use of fuel not for

furtherance of the Company’s programme but for personal gain. To

ensure proper accountability of the use of fuel, users should obtain

approval for stores requisition prior to presenting the requisition to

stores for issues.

922. The Finance Officer responded that, the area always ensures

that fuel coupon is authorized before issue. However since there is

only one authorising officer for the area, his absence normally results

in fuel issued without authorization adding that another officer would

be empowered to authorise fuel issues in the absence of the

substantive area manager.

Head Office

No evidence of transmission service agreement

923. Out of 29 customer files reviewed, we observed that there was

no evidence of signed transmission service agreement between

GRIDCO and its customers. Details are shown below.

Name of Customer Name of Customer

VRA AK Textiles

ECG Owere Mines

Goldfields New Century


Name of Customer Name of Customer

Sonabel World Cool

VALCO Diamond Cement

Newmont Nat Comm Back

ILDC TV3 Network

Volta Hotel P. Township

Golden Star Free Zone Board

GH. Consolidate CIE

924. The effect is that resolving future dispute over service tariffs

may be difficult where service agreements are not available.

925. We therefore recommended that, transmission service

agreement be signed with customers in order to avoid dispute over

transmission service billing.

926. Management responded that, agreements for ECG and

SONABEL have been completed and signed after the audit field work

while draft agreements for the other customers have been discussed

and are being finalized for signature.

KUMASI AREA OFFICE

Stores issue made without approval

927. We noted that the following litres of diesel and lubricants were

issued out of stores and signed for as received by user departments but

no authorisation obtained for such issues:

Requisition Requisition Description Coupon Vehicle

Date Number Number Number

28/3/11 Not applicable 75 litres of diesel 9386 GT 2245-10

6/10/11 1111200 2 litres of lubricants 0017414 GW 594 P

6/10/11 1111201 3 litres of lubricants 0017415 GW 594 S

8/10/11 1111205 1 litres of Lubricants 0017416 GW 594 P

9/10/11 1111206 2 litres of lubricants 0017417 GW 5398 S

10/10/11 1111206 1 litres of lubricants 0017418 GS 1282 Y

928. Poor supervision over the storekeeper by management was

attributed to the lapse which could be exploited to divert store items

resulting in losses. This could impact negatively on the operations of

the Company.



929. To ensure proper accountability of store items, we

recommended that requisition for store items should be duly

authorized by the responsible senior management officer before issues

are made.

930. According to management it would ensure that in the absence

of the manager, the Acting Manager should be readily available to

approve requisition before issues are made.

BULK OIL STORAGE TRANSPORTATION

COMPANY LIMITED (BOST)

Introduction

931. This report relates to the audited accounts of Bulk Oil Storage

Transportation Company Limited (BOST) for the year ended 31

December 2010.

Operational result

932. The Company’s operations for the year under review ended

with a surplus of GH¢17,876,333 compared with a deficit of

GH¢91,148,485 in 2009, a decrease of 119.6%. The performance

indicator is shown in Table 70.


Income 2010

GH¢

2009

GH¢

%

Change

Turnover 681,311 90,110,677 (99.2)

Cost of sales 681,311 122,535,508 (99.4)

Gross Profit (loss) - (32,424,831) (100.0)

Other Income 108,832,938 76,392,682 42.5

Total Income 108,832,938 43,967,851 147.5

Expenditure

Finance Charges 40,321,870 37,003,265 9.0

Sell, Gen & Adm. Exp. 50,634,735 98,113,071 (48.4)


Net Profit (Loss) 17,876,333 (91,148,485) (119.6)


933. Total Turnover for the year decreased by 99.2% from

GH¢90,110,677 in 2009 to GH¢681,311 in 2010. The fall in Turnover

was caused by decreases in Petrol GH¢355,649 (2009:

GH¢17,140,613), Diesel: GH¢325,662 (2009: GH¢72,967,731) and

Kerosene nil (2009: GH¢2,333) during the year.

934. Cost of sales also decreased by 99.4% from GH¢122,535,508

in 2009 to GH¢681,311 in 2010. Finance charges which comprised

interest on Bank overdraft, loans, finance lease and trade Finance cost

increased by 9.0% from GH¢37,003,265 in 2009 to GH¢40,321,870 in

2010. Selling, General and Administrative Expenses decreased by

48.4% from GH¢98,113,071 in 2009 to GH¢50,634,735 in 2010.

However the 42.5% increase in Other Income from GH¢76,392,682 in

2009 to GH¢108,832,938 led to a surplus of GH¢17,876,333.

Recurrent grant income, BOST Margin, Haulage Expenditure Refund

and Pipe Line and Loading Rack Fee accounted for 84.0% of other

income.

Financial position

935. The statement of financial position for the Company is


Table 71: Assets and Liabilities as at 31 December 2010 Item 2010

GH¢ 2009 GH¢

% Change


Current Assets 148,473,572 135,092,294 9.9


Net-Current Liabilities (132,228,768) (110,945,808) 19.2

Net Assets 156,904,751 153,275,962 2.4


936. Non Current Assets, which stood at GH¢289,133,519 at the

close of 2010 increased from GH¢264,221,770 in 2009 by 9.4%. The

increase was due to additions to property, plant and equipment.

937. Current assets which was made up of Inventories, Accounts

Receivables and Prepayments, Marketable Securities, Bank and Cash

Balance increased by 9.9% from GH¢135,092,294 in 2009 to



GH¢148,473,572 in 2010. Accounts Receivables and Prepayment

largely accounted for the rise.

938. Current liabilities also increased by 14.1% from

GH¢246,038,102 in 2009 to GH¢280,702,340 in 2010. This was due

mainly to increases in Accounts Payable and Accruals, Short Term

Loans and Bank Overdraft.

939. The Company’s liquidity ratio at the end of 2010 was 0.5:1

(2009: 0.5:1). The ratio shows that the Company may not be in a

position to meet its short term liabilities as and when they fall due.

UNIFIED PETROLEUM PRICE FUND

Introduction

940. This report relates to the audited accounts of the Unified

Petroleum Price Fund (UPPF) for the year ended 31 December 2011.

Operational Results

941. The fund registered an excess expenditure over income of

GH¢9,517,362 for the financial year ended 31 December 2011 as

against a Surplus of GH¢8,669,124 recorded in 2011 representing a

decrease of 209.8%. Provided in Table 72 are the details of the

performance.

Table 72: Income statement for 2011 Item 2011

GH¢

2010

GH¢

%

Change

Fund Income 152,510,341 137,268,636 11.1

Other Income 4,798,086 6,565,286 (26.9)

Total Income 157,308,427 143,833,922 9.4

Expenditure

Freight Charges 157,446,581 127,369,074 23.6

Levy/Charges on Fund 8,698,374 7,406,411 17.5

General & Admin. Expenses 680,834 389,313 74.9

Total expenditure 166,825,789 135,164,798 23.4

(Deficit/Surplus (9,517,362) 8,669,124 (209.8)


942. The Fund’s Income increased by 9.4% to GH¢157,308,427

(2010: GH¢143,833,922). Fund Income which constituted 96.9% of

Total Income largely accounted for the rise. This resulted from

hauling petroleum products to various destinations in the Country.

Other Income however, fell by 26.9% due to reductions in Investment

Income and Interest on Call Account.

943. Total Expenditure for the period rose by 23.4%, from

GH¢135,164,798 in 2010 to GH¢166,825,789. The increase in Freight

Charges was due to increases in Freight Payable and Verification and

Inspection cost. The increases in Salary & Allowances, Staff Medical,

Staff Training and Staff Bonus largely accounted for the increase in

General and Administrative Expenses.

Financial Position

944. A sumarised balance sheet of the Fund as at 31 December 2011

is provided in Table 73.


Item 2011

GH¢

2011

GH¢

%

Change


Current Assets 38,402,223 53,765,286 (28.6)

Current Liabilities 8,661.368 14,514,411 (40.3)

Net Current Assets 29,740,856 39,250,875 (24.2)

Net Assets 29,758,726 39,276,088 (24.2)


945. Non-Current Assets dropped by 29.1% from GH¢25,213 in

2010 to GH¢17,871 in 2011 due to depreciation charge for the year.

946. Current Assets decreased from GH¢53,765,286 in 2010 to

GH¢38,402,223 in 2011, recording a fall of 28.6%. Significant

reductions in Accounts Receivable, Short Term Investment and Cash

and Bank Balance accounted for the fall.

947. Current Liabilities also fell by 40.3% from GH¢14,514,411 in

2010 to GH¢8,661,368 in 2011, due to decreases in Accounts Payable

and Accruals.



948. The Fund had enough resources to meet its short-term debts as

and when they fall due as the current ratio for the year stood at 4.4:1

(2010: 3.7:1).

ENERGY COMMISSION – ENERGY FUND

Introduction

949. This report relates to the audited accounts of the Energy Fund

of Energy Commission for the year ended 31 December 2011

Operational results

950. The fund registered an excess income over expenditure of

GH¢299,742 for the financial year ended 31 December 2011 as

against a surplus of GH¢139,106 recorded in 2010, representing an

increase of 115.5%. Provided in Table 74 are the details of the

performance.

Table 74: Income statement for 2011 2011

GH¢ 2010 GH¢

% Change

Resources

Bank Bal. at 1st Jan. 139,106 322,865 (56.9)

Project Account 3,861 - -

Petroleum Levy 1,326,646 1,142,775 16.1

Fees from Permits& Licenses 1,817,623 1,333,018 36.4

Other Income 16,107 19,215 (16.2)

Total Resources 3,303,343 2,817,873 17.2

Disbursement Promotion of Energy Efficiency and Productive uses of Electricity

888,441 523,623 69.7

Renewable Energy Resources including Solar Energy

315,197 216,655 45.5

Human Resource Development in the Energy Sector

301,783 176,572 70.9

Other Relevant Expenditure 1,498,179 1,761,849 (15.0)

Bank Charges 1 68 (98.5)

Total Disbursement 3,003,601 2,678,767 12.1

Bank Bal. at 31st Dec. 299,742 139,106 115.5


951. Total Resources received for the year under review increased

by 17.2% from GH¢2,817,873 in 2010 to GH¢3,303,343 in 2011.

952. This was due to a 16.1% rise in releases from Petroleum Levy

Account and a 36.4% rise in fees from Permits and Licenses.

953. Total Disbursements went up by 12.1% from GH¢2,678,767 in

2010 to GH¢3,003,601in 2011. The major items which accounted for

the increase in Disbursements were Promotion of Energy Efficiency

and Productive uses of Electricity which rose by 69.7%, Renewable

Energy Resources including solar energy which increased by 45.5%

and Human Resource Development in the Energy Sector which

increased by 70.9%.

Financial position

954. The financial position of the Energy Fund is sumarised in

Table 75.

Table75: Assets and liabilities as at 31 December 2011

2011

GH¢

2010

GH¢

%

Change

Current Assets 299,742 142,967 109.7

Current Liabilities - 3,861 (100.0)


Current Ratio - 37:0:1


to GH¢299,742 in 2011. This was due mainly to a 106.3% rise in

Bank Balances.

956. There were no current liabilities at the year end.

957. Hence, the Fund’s liquidity position shows that there is enough

funds to settle any liability that arises.



MINISTRY OF FINANCE AND ECONOMIC

PLANNING

RURAL AND AGRICULTURAL FINANCE PROGRAMME

Introduction

958. This report is on the audited financial statement of the Rural

and Agricultural Finance Programme of Ministry of Finance and

Economic Planning for the financial years ended 31 December 2010

and 2011.

Operational results

959. Total funds received fell marginally from US $1,600,922 in

2010 to US $1,600,852 in 2011, a decrease of US $70 due to no

contribution made to the fund by GOG in the year under review.

IFAD Loan of US $1,500,000 in 2010 was initial deposit whilst in

2011 only US $27,076 was replenished, thereby creating artificial

decrease of 98%. Other Income on the other hand went up

significantly by 781% from US $922 in 2010 to US $8,126 in 2011

due largely to huge interest earned on investment accounts.

960. Table 76 shows sources and uses of funds during the review

period.


Sources of Funds

2011

US $

2010

US $

%

Change

Balance as at 1 January 1,565,650 - -

IFAD Loan 27,076 1,500,000 (98)

GOG Contribution - 100,000 -

Other Income 8,126 922 781

1,600,852 1,600,922 -

Uses of funds

Vehicle, goals and equipment 69,151 - -

Registry management 28 - -


Other 285,312 1,709 16,595

Studies, training and

workshops

120,266 8,873 1,255

Performance based lump sum 19,894 - -

Salaries and allowances 117,518 16,085 631

Operating costs 26,091 8,605 203

Exchange difference 2,192 - -

640,452 35,272 1,716

Cash and bank balance as at

31/12/11

960,400 1,565,650 (39)

961. Total expenditure upsurged significantly by 1,716% from US

$35,272 in 2010 to US $640,452 in 2011 due largely to the acquisition

of Toyota Land Cruiser to the tune of US $69,151, payments for

technical supports such as Institutional support, training and publicity

and publication totalling US $285,312 (2010: US $1,709); increase in

studies, training and workshops expenses from US $8,873 in 2010 to

US $120,266 in 2011, a rise of 1,255%. Increase in remuneration and

allowances of the management team and other Ministry personnel

related to the project from US $16,085 in 2010 to US $117,518 in

2011 accounted for 631% rise in salaries and allowances in the year

under review. The operating cost of US $26,091 (2010: US $8,605)

or a 203% rise was due to increase in the administrative and office

running cost of the Secretariat.

962. The high expenditure in the year under review led to a 39%

drop in Cash and Bank balances from US $1,565,650 in 2010 to US

$960,400 in 2011.

Financial position

963. Presented in Table 77 is the balance sheet as at 31 December

2011.




2011

US $

2010

US $

%

Change

Non Current assets 675,724 35,272 1,816

Current Assets 960,400 1,565,650 (39)

Financed by:

IFAD Loan No. 761-GH 1,527,076 1,500,000 2

GOG Counterpart Fund 100,000 100,000 -

Other Income 9,048 922 881

Total 1,636,124 1,600,922 2

964. Non-current assets, which rose by 1,816% to US $675,724

from US $35,272 in 2010 was mainly attributed to the acquisition of a

Toyota Land Cruiser and additions to non capital expenditure such as

salaries and allowances from US $16,085 in 2010 to US $117,518 in

2011; technical support services from US $1,709 in 2010 to US

$285,312 in 2011.

965. Current assets, however, decreased by 39% from US

$1,565,650 in 2010 to US $960,400 in the year under review. The

decrease was attributed mainly to the drop in Special Account from

US $1,452,199 in 2010 to US $754, 537 in 2011.

MANAGEMENT ISSUES

IFAD funds of US $745,000 placed into fixed deposit investment

966. We noted that as at 31 December 2011, IFAD funds amounting

to US $745,000 was held in a fixed deposit investment account with

Ecobank since 2010. We did not sight any prior approval from IFAD

for this investment.

967. This practice contravened section 2.04 of the financing

agreement which indicated that, the Borrower and each Programme

Party shall use the proceeds of the Loan exclusively to finance

Eligible Expenditures in accordance with this Agreement and the

general conditions.


968. This might result in funds not being readily available to

undertake approved project activities.

969. Management explained that the project had just started and

disbursement rate was slow. Besides, to prevent funds from lying

idle, some of the idle project funds were held in fixed deposit for a

period of time in order to earn some return for the project.

970. We therefore recommended that funds are only used to finance

eligible expenditure under the Financing Agreement. Where there is

the need to use funds for purposes other than those specified in the

agreement, prior approval should be sought from the funding agency

to prevent any displeasure which might negatively affect the Project.

971. Management responded that it had stopped investing

programme funds in fixed deposit investments because this was in

contravention of the Financing Agreement.

Certificate on US $745,000 invested not available

972. In a further development, we could not obtain the investment

certificate for the fixed deposit made with Ecobank since 2010.

Again, there was no agreement on file nor correspondence showing

duration or interest of the investment.

973. Best practice requires that an investment certificate indicating

rate of interest, maturity date and other correspondence should be

obtained for each investment made to facilitate monitoring of the

investment.

974. As a result of non-compliance, errors made by the bank may

not be noted and resolved on time.

975. Management explained that Ecobank indicated that it cannot

issue a certificate for the amount invested because the Project could at

any point in time instruct the bank to liquidate portions or the full

amount of investment.



976. Management should ensure that a certificate is obtained for its

investments so that this could be used for monitoring and ensure that

the right amount of interest is being paid on time.

VENTURE CAPITAL TRUST FUND

Introduction

977. This report relates to the audited financial statements of the

Venture Capital Trust Fund for the year ended 31 December 2011.

Operational results

978. The fund recorded a deficit of GH¢656,731 in the year under

review compared to a surplus of GH¢1,638,583 in 2010, showing a

fall of 140%. Table 78 provides details of the main performance

indicators.


Income

2011

GH¢

2010

GH¢

%

Change

Income 2,887,277 4,144,187 (30.3)

Expenditure

Administrative expenses 3,121,062 2,101,065 48.5

Trustees Emolument 123,595 115,879 6.7

Auditors Remuneration 12,000 12,000 -

Depreciation 92,230 56,260 63.9

Impairment charge on loan 195,121 220,400 (11.5)

Total expenditure 3,544,008 2,505,604 41.4

Surplus/(Deficit) (656,731) 1,638,583 ( 140.1)

979. Total Income decreased by 30.3% from GH¢4,144,187 in 2010

to GH¢2,887,277 in 2011. This was due to a decrease in Interest on

Fixed Deposits from GH¢4,054,599 in 2010 to GH¢2,848,273 in

2011, representing a decline of 30%. Income from Economic

management and capacity building project support also dropped from

GH¢69,588 in 2010 to GH¢31,753 in 2011. The drop in Other

Income from GH¢20,000 in 2010 to GH¢7,251 in 2011 also

contributed to the fall in income.


980. Total expenditure for 2011 however, increased by 41.4% from

GH¢2,505,604 in 2010 to GH¢3,544,008 in 2011. Administrative

expenses shot up by 48.5% and this was largely due to increases in the

payments of salaries and wages from GH¢872,263 in 2010 to

GH¢1,120,709 in 2011, and seminars, workshops and conferences

from GH¢131,646 in 2010 to GH¢571,385 in 2011. Trustees

emoluments rose marginally by 6.7%, whilst fund’s depreciation went

up drastically by 63.9%. The increase was due to charges incurred on

acquisitions of non-current assets.

Financial position

981. Shown in Table 79 is the Venture’s financial position as at 31

December 2011.

Table 79: Assets and liabilities as at 31 December 2011

2011

GH¢

2010

GH¢

%

Change

Non-current assets 11,967,919 7,768,433 54.1

Current Assets 16,985,451 23,699,152 (28.3)


Net Assets 28,546,300 31,271,175 (8.7)

Current Ratio 41.7:1 120.7:1 3.8

982. Non-current assets showed an increase of 54.1% from

GH¢7,768,433 in 2010 to GH¢11,967,919 in 2011 due to the

acquisition of additional assets worth GH¢4,810,297 during the year.

983. Current assets decreased by 28.3% from GH¢23,699,152 in

2010 to GH¢16,985,451 in 2011. This was largely due to a reduction

in Cash and Bank balances from GH¢21,959,244 in 2010 to

GH¢11,540,099 in 2011.

984. Current Liabilities rose by 107.3% from GH¢196,410 in 2010

to GH¢407,070 in 2011. This was due to an increase in Accruals from

GH¢112,410 in 2010 to GH¢323,070 in 2011.

985. The current ratio for year 2011 stood at 41.7:1 (2010:120.7:1).

Although, it had fallen it continued to remain favourable and depicts

that the Fund can pay its short term debts as and when they fall due.



MANAGEMENT ISSUES

Amount due from Loan defaulters – GH¢333,344.36

986. We noted that the Trust Fund introduced a Development

Assisting Fund which a lot of people took advantage of and had the

loan, but woefully failed to adhere to the repayment terms of the loan

agreement. As a result, a total amount of GH¢333,344.36 was owed

the Fund as at 31 December 2012.

The Table below shows the defaulters as at 31 December 2012

987. We were of the view that by the non-recovery, the Trust Fund

resources had been held up and this could frustrate its operations.

988. We recommended that management should make the necessary

efforts, even including the institution of legal action to recover the

loan from defaulters.

GHANA COCOA BOARD

Introduction

989. This report relates to the audited accounts of the Ghana Cocoa

Board for the year ended 30 September 2011.

Name Amount

GH¢

1. Quality Sport Wear Company Limited 45,281.10

2. Pro. Resolve Software Company 31,158.22

3. Eral Constructions Limited 32,277.68

4. Mattison Electro Venture 31,849.82

5. Damedel & Sons 31,713.01

6. Day Spring Glory 32,472.79

7. Kel Investment Limited 31,849.82

8 CHM Farms 32,166.72

9. Kalfrock Agencies 31,849.82

10. Belorm Farms & Transport 32,725.38

333,344.36


Operational results

990. Total Income of the Board registered a 70.8% increase,

improving from GH¢2,874,791,419 in 2010 to GH¢4,909,751,093 in

2011. Export of Cocoa beans contributed significantly to the Total

income by 79% in 2011. Turnover (sale of cocoa beans-) which is the

main source of income to the Board increased by 70.4% from

GH¢2,790,149,437 in 2010 to GH¢4,754,198,210 in 2011. This was

made up of both exports and local sales. Other Income increased by

83.8% from GH¢84,641,982 in 2010 to GH¢155,552,883 in 2011.

This increase was due to a 232% rise in interest received and a 62%

upward movement in grading and sealing of cocoa in the year under

review. Operational results for 2011 are shown in Table 80.


Income

2011

GH¢

2010

GH¢

%

Change

Sales of Cocoa Beans 4,754,198,210 2,790,149,437 70.4

Other Income 155,552,883 84,641,982 83.8

Total Income 4,909,751,093 2,874,791,419 70.8

Expenditure

Cost of sales 4,407,622,199 2,319,445,697 90.0

Admin. & General

Expenses

343,623,646 242,842,150 41.5

Export and Local duty 148,679,011 153,933,253 (3.4)

4,899,924,856 2,716,221,100 80.4

Net profit 9,826,237 158,570,319 (93.8)

991. Total Expenditure rose from GH¢2,716,221,100 in 2010 to

GH¢4,899,924,856 in 2011; an increase of 80.4% mainly resulting

from a rise in cost of sales from GH¢2,319,445,697 in 2010 to

GH¢4,407,622,199 in 2011 representing a 90% increase. A 108%

increase in the purchase of the cocoa beans and 83% sales expenses

accounted for the sharp rise in the cost of sales. Administrative and

general expenses which went up by 41.5% was mainly attributed to

increases in staff cost made up of salaries and other allowances from

GH¢137,861,781 in 2010 to GH¢205,775,996 in 2011.



992. As a result of a significant expenditure recorded in the year

under review as shown above, the net profit transferred to the Income

Surplus Account dropped by 93.8% from GH¢158,570,319 in 2010 to

GH¢9,826,237 in 2011.

Financial position

993. The financial position of the Board is provided in Table 81.

Table 81: Assets and Liabilities as at 30 September 2011

2011

GH¢

2010

GH¢

%

Change

Non-current Assets 375,259,471 165,242,855 127.1

Current Assets 1,745,071,448 746,962,423 133.6

Current Liabilities 1,892,428,013 656,934,396 188.1

Non-current Liabilities 24,784,001 20,232,429 22.5

Net Assets 203,118,905 235,038,453 (13.6)


994. Non-current assets which rose by 127.1% to GH¢375,259,471

from GH¢165,242,855 in 2010 was mainly attributed to the additions

to Land and Building, Plant and Machinery, Motor vehicles and

Furniture and Equipment.

995. Current Assets increased significantly by 133.6% from

GH¢746,962,423 in 2010 to GH¢1,745,071,448 in 2011. The rise in

Accounts Receivable and Prepaid Expenses from GH¢385,938,240 in

2010 to GH¢1,038,976,194 in 2011 representing a 169% rise

contributed significantly to the increase in current assets.


GH¢656,934,396 in 2010 to GH¢1,892,428,013 in 2011. This was

due to a GH¢1,326,849,496 or 729% rise in a bank overdraft.

997. The liquidity ratio of the Board stood at 0.9:1 in the year under

review compared to 1.1:1 in the previous year, an indication of the

Boards inability to meet its short-term debts as and when they fall due.


MANAGEMENT ISSUES

Cocoa Research Institute of Ghana

Absence of fixed assets register

998. We noted that fixed assets register was not kept to record

details of the assets belonging to the Cocoa Research Institute of

Ghana.

999. Proper assets management system requires the maintenance of

the fixed assets register capturing all relevant details of the assets

acquired.

1000. This weakness had the potential of making the Institute’s assets

vulnerable to theft as well as exchanging one make of equipment for

another without detection. We attributed the weakness to lax of

supervision by management.

1001. We recommended to management to ensure that the Estate

Officer takes the necessary steps to register all properties belonging to

the Institute. We also recommended that assets purchased for the

Institute should be labeled.

Quality Control Division

Accountable advance – GH¢22,553

1002. Contrary to the Board’s policy of retiring imprests within a

stipulated time, we noted that 3 members of staff who were given

imprest to the tune of GH¢22,553.00 in 2010/2011 had since not

accounted for the imprest amounts even after completion of the

programmes. Details are shown in the Table below:

Date Name Amount (GH¢)

4/5/11 Victor Torkornu 4,665.00



201/11 Victor Torkornu 1,200.00


02/9/10 K. B. Prempeh 4,332.00

24/9/10 Samuel Boateng 1,731.00

22,553.00



1003. This situation arose as a result of inadequate management

supervision and procedures and could result in funds of the Board not

being used in furtherance of its objective.

1004. We recommended that the affected staff should immediately be

made to account for the total amount outstanding or held liable for a

refund by deducting the outstanding amounts from their salaries.

STUDENTS LOAN TRUST FUND

Introduction

1005. This report relates to the audited accounts of the Student Loan

Trust Fund for the year ended 31 December 2011.

Operational Results

1006. Total Income of the Fund which included Administrative

Grant, Interest on Loan, Investment Income, registered an increase of

14.7% from GH¢2,221,799 in 2010 to GH¢2,548,343 in 2011. This

was mainly due to a 253.6% increase in Student Loan interest and

81.3% rise in Administrative Grant. Table 82 provides the income and

expenditure statement for 2011.


Income 2011

GH¢

2010

GH¢

%

Change

Income 2,548,343 2,221,799 14.7

Expenditure

Staff Cost 865,653 688,395 25.7


Financial & Professional

Charges

17,766 15,074 17.9

Administrative & Other

Expenses

995,226 982,658 1.3

Provision for Bad debts 184,336 183,807 0.2


Surplus / Deficit 307,400 217,760 41.2


1007. Total Expenditure incurred in 2011 was GH¢2,240,943 as

against GH¢2,004,039 in 2010, representing an increase of 11.8%.

The increase in Travelling & Transport Cost was due to an increase in

Vehicle Repairs & Maintenance cost by 109.8%. Salaries, Wages &

Allowances accounted mainly for the increase in Staff Cost was due to

adjustment in salary by 20% approved by the Board and creation of

new department.

1008. The Fund ended its operations with an operational surplus of

GH¢307,400 as against GH¢217,760 in 2010.

Financial position

1009. The Funds financial position is sumarised in Table 83.


Item 2011

GH¢

2010

GH¢

%

Change


Current Assets 3,081,159 4,218,566 (27.0)


Net Current Assets 2,944,301 4,116,781 (28.5)

Non-Current Liabilities 16,989,350 10,167,371 67.1

Net Assets 74,564,542 57,628,711 29.4


1010. The Fund’s Non-Current Assets went up by 33.8% from


due mainly to increase in Student Loans from GH¢53,130,105 in 2010

to GH¢71,379,425 in 2011, recording an increase of 34.3%. Property,

Plant & Equipment however fell by 36.9%.

1011. Current assets recorded a decrease of 27.0% from

GH¢4,218,566 in 2010 to GH¢3,081,159 in 2011. There was

substantial increase in Cash at Bank from GH¢93,172 in 2010 to

GH¢341,687 in 2011, an increment of 266.7%. However, Investments

declined by 38.3% from GH¢3,998,200 in 2010 to GH¢2,468,355 in

2011 leading to the fall.



1012. Non-current liabilities made up of deferred income increased

from GH¢ 10,167,371 in 2010 to GH¢16,989,350 in 2011, a rise of

67.1%. Current liabilities made up of Accounts Payables and Accruals

increased by 34.5% from GH¢101,785 in 2010 to GH¢136,858 in

2011. This was largely due to increase in Consultancy Services by

GH¢18,709 in 2011.

1013. Liquidity outlook as measured by a current ratio of 22.5:1

(2010: 41.4:1) remained very favorable, indicating the ability of the

Fund to discharge its short term obligations as and when they fall due.

1014. Accumulated fund grew by 21.3% from GH¢47,461.340 in

2010 to GH¢57,575,192 in 2011 due to additional Capital Grants and

Income Surplus.

PUBLIC PROCUREMENT AUTHORITY

Introduction

1015. This report relates to the audited financial statement of Public

Procurement Authority for the year ended 31 December 2011.

Operational results

1016. The year 2011 ended with a surplus of GH¢158,392 as against

a Surplus of GH¢310,298 recorded in 2010. This represents a decrease

of 48.9%. Performance indicators are shown in Table 84.


Items 2011

GH¢

2010

GH¢

%

Change

Income 2,218,308 3,081,657 (28.0)

Expenditure

Short term training 68,852 405,185 (83.0)

Personnel Emoluments - 599,219 -

Gen. & Admin. Expenses 1,361,385 824,652 65.1

Assessment of Entities 81,074 457,825 (82.3)


Provision of Website 73,722 57,810 27.5

Publicising PPA Activities 79,814 105,011 (23.9)

Dev. Of Procurement Planning

Software

7,302 18,510 (60.6)

Depreciation 273,207 190,137 43.7

Public Procurement - 24,462 -

Appeals & Complaints 45,078 61,870 (27.1)

Price Database Management - 19,006 -

Records Keeping Management

Contract Management - 7,672 -

Contracts Administration 69,482 - 100

Total Expenditure 2,059,916 2,771,359 (25.7)

Surplus / (Deficit) 158,392 310,298 (48.9)

1017. Total income for the year under review decreased by 28.0%

from GH¢3,081,657 in 2010 to GH¢2,218,308 in 2011. The decline in

total income was due to 35.4% reduction in Government Subvention

even though support from German Technical Co-operation (GTZ)

increased by 85.5%.

1018. Total expenditure also decreased by 25.7% from

GH¢2,771,359 in 2010 to GH¢2,059,916 in 2011. The decrease was

largely due to reduction in Short-Term Training Expenses, Personnel

Emoluments Cost, General and Administration Expenses and

Development of Procurement Planning Software Cost.

Financial position

1019. Presented in Table 85 is the financial position of the Authority

as at 31 December 2011.


Item 2011

GH¢

2010

GH¢

%

Change

Fixed Assets 739,934 529,639 39.7

Current Assets 160,820 179,396 (10.4)


Net Assets 608,048 447,679 35.8




1020. Fixed Assets stood at GH¢739,934 as at 2011 as against

GH¢529,639 in 2010. The increase was due to acquisition of

additional assets during the year.

1021. Current Assets decreased by 10.4% during the period under

review. This was as a result of a sharp reduction in Bank Balance

from a favourable balance of GH¢55,715 in 2010 to an overdrawn

balance of GH¢10,305 in the current year.

1022. Current Liabilities increase by 11.9% to GH¢292,706 in 2011

from GH¢261,356 in 2010. Non-payment to IRS on Withholding Tax

and increase in Accrued Audit Fees accounted for the rise.

1023. The current ratio was 0.5:1 (2010: 0.7:1) indicating an

unfavorable liquidity position for the Authority which portrays its

inability to meet its short-term debts falling due.

NATIONAL INSURANCE COMMISSION

Introduction

1024. This report is on the audited accounts of the National Insurance

Commission for the year ended 31 December 2011.

Operational results

1025. The Commission ended the year with a surplus of GH¢970,872

as against GH¢512,439 for the year ended 31 December 2010. This

represented an 89.5% rise over the previous figure. The summary of

the Commission’s performance for the period under review is shown

in Table 86.

Table 86: Income and expenditure statement for 2011

Item 2011

GH¢

2010

GH¢

%

Change

Income 5,805,893 4,559,042 27.3

Other Income 62,152 37,543 65.5

Total 5,868,045 4,596,585 27.7


Expenditure

Staff Cost 2,691,467 2,317,049 16.2

Auditors’ Remuneration 8,861 7,705 15.0

Directors’ Emoluments 634,329 465,921 36.2

Depreciation 234,128 174,709 34.0

Sticker Cost 87,940 124,200 (29.2)

Loss on Sale of Assets - 2,552 (100.0)

Others 1,240,448 992,010 25.0


Surplus 970,872 512,439 89.5

1026. Total income for the year was GH¢5,868,045 as against

GH¢4,596,585 recorded in 2010. This represented a 27.7% rise over

the 2010 figure. The increase in regular income was attributed mainly

to increases in Levies on Life Insurance, Levies on Non-Life

Insurance, and Motor Insurance. Gains on sale of Assets and Interest

on loan accounted for the increase in other income.

1027. Total expenditure rose by 19.9% from GH¢4,084,146 in 2010

to GH¢4,897,173 in 2011. The increase in total expenditure was

mainly due to a 16.2% rise in staff cost and 36.2% increase in

Directors Emoluments.

Financial position

1028. Table 87 shows a summary of the Commission’s financial

position as at the end of the year under review.


Item 2011

GH¢

2010

GH¢

%

Change

Non-Current Assets 1,083,053 943,086 14.8

Current Assets 3,670,074 2,893,384 26.8



Net Assets 4,507,808 3,574,371 26.1




1029. Non-Current Assets increased by 14.8% from GH¢943,086 in

2010 to GH¢1,083,053 in 2011. The Non-Current Assets included

property, Plant and Equipment and Equity Shares. The increase was

due to acquisition of fixed assets within the year.

1030. Current Assets also increased by 26.8% from GH¢2,893,384 in

2010 to GH¢3,670,074 in 2011. The increase resulted from increase in

Short Term Investment, Accounts Receivable and Bank and Cash

Balances.

1031. Current Liabilities which was made up of Accounts Payable

and Accruals decreased by 6.4% from GH¢262,099 in 2010 to

GH¢245,319 in 2011.

1032. The Current ratio of 15.0:1 (2010: 11.0:1) showed that the

Commission is solvent and can meet its short term obligation when

they fall due.

BANK OF GHANA

Introduction

1033. This report is on the audited accounts of the Bank of Ghana

(BOG) for the year ended 31 December 2011.

Operational Results

1034. The Bank registered a surplus of GH¢400,372,000 during the

year under review as compared to GH¢121,466,000 recorded in 2010,

representing an increase of GH¢278,906,000 or 229.6%.

1035. The operating income went up by 58.7% from

GH¢510,297,000 in 2010 to GH¢809,747,000 in 2011. A significant

portion of the surge resulted from increases in Interest and similar

income, fee and commission income and exchange differences.

1036. Interest and similar income which included interest on

overnight landing, government securities, medium/long-term notes

and bonus, interest on foreign correspondent accounts, foreign


investments and discount on Treasury bill operations rose up

significantly by 45.8%. Fee and commission income increased from

GH¢34,042,000 in 2010 to GH¢51,397,000 or a rise of 51.0%.

1037. The exchange differences which went up by 101.6% was as a

result of sharp increases in Transactional Exchange difference from

GH¢18,748,000 in 2010 to GH¢71,669,000 in 2011 and Exchange

Rate Equalization from GH¢146,844,000 in 2010 to GH¢262,209,000

in 2011. Performance indicators are shown in Table 88.

Table 88: Statement of comprehensive Income for 2011

2011 2010 %

Income GH¢’000 GH¢’000 Change

Interest and similar income 380,518 261,086 45.8

Fee and Commission Income 51,397 34,042 51

Other Operating income 38,687 45,904 (15.7)

Exchange differences 333,878 165,592 101.6

Dividend Income 5,267 3,673 43.4

Total Income 809,747 510,297 58.7

Expenditure

Interest expense and similar

charges 157,009 149,873 4.8

Administration 190,422 148,414 28.3

Premises and equipment

expenses 25,957 23,030 12.7

Current and issue expenses 27,288 60,884 (55.2)

Direct expenses 4,837 4,146 16.7

Net Impairment reversal (4307) (3,283) 31.2

Taxation 8,169 5,767 41.7

Total Expenditure 409,375 388,831 5.3

Surplus 400,372 121,466 229.6

1038. Total expenses for the year under review rose up marginally by

5.3% from GH¢388,831,000 in 2010 to GH¢409,375,000 in 2011.

The marginal increase in Interest expense and similar charges was due

to the following factors:



- Increased dealings in IMF and SDR transactions from

GH¢408,000 in 2010 to GH¢690,000 in 2011.

- Decreased Interest on money market instruments from

GH¢109,143,000 in 2010 to GH¢88,009,000 and

- Increased on repo expense and other Commissions payment

from GH¢38,408,000 in 2010 to GH¢68,308,000 in 2011.

1039. The administrative expenses went up by 28.3% from

GH¢148,414,000 in 2010 to GH¢190,422,000 in 2011. This was

mainly attributed to increases in personnel cost from GH¢102,474,000

in 2010 to GH¢124,372,000 in 2011 and other miscellaneous costs

from GH¢24,151,000 in 2010 to GH¢41,502,000 2011.

1040. Premises and Equipment expenses which rose by 12.7% was

due to increases in repairs and renewals and other expenses related to

premises and equipment.

1041. However, current and issue expenses went down drastically by

55.2%. The decrease was mainly attributed to 56.1% reduction in

notes printing cost from GH¢58,793,000 in 2010 to GH¢25,799,000

in 2011 and reduction in other currency expenses from GH¢1,039,000

in 2010 to GH¢751,000 in 2011.

Financial Position

1042. Provided in Table 89 is the Financial position as at 31

December 201.


2011

GH¢’000

2010

GH¢’000

%

Change

Non-current Assets 269,780 249,293 8.2

Current Assets 15,050,872 11,578,134 30.0


Net Assets 1,418,879 1,128,083 25.8



1043. Non-current Assets which was made up of fixed assets,

development loans and investments, increased marginally by 8.2%

from GH¢249,293,000 in 2010 to GH¢269,780,000 in 2011. The

increase was due to the acquisition of fixed assets within the year.

1044. Current Assets rose by 30.0% from GH¢11,578,134,000 in

2010 to GH¢15,050,872,000 in 2011. The rise was as a result of

increases in Gold by 17.6% of the previous figure and securities by

82.5% from GH¢5,121,302,000 in 2010 to GH¢9,346,070,000 in

2011. The major components of the securities were long-term

securities and others. Despite the impact made by the Securities,

93.1% drop by Cash and amounts due from banks from

GH¢1,283,190,000 in 2010 to GH¢88,129,000 in 2011 resulted in a

lesser percentage increase in current assets.


GH¢10,699,344,000 in 2010 to GH¢13,901,773,000 in 2011 due

mainly to increases in currency in circulation, Allocations of special

drawing rights, Deposits, Liabilities to IMF and Money Market

Instruments.

1046. The liquidity position of the Bank recorded no movement and

stood at 1.1:1 in 2011, (2010: 1.1:1), an indication that the Bank

cannot fulfill its short-term obligations as and when they fall due.

MANAGEMENT ISSUES

Accounting for petroleum fund account

1047. We noted during our audit that the assets and liabilities

resulting from transactions on the petroleum fund have been

accounted for as part of the Bank’s assets and liabilities respectively.

1048. As the bank is only managing these assets on behalf of the

government, we were of the view that these do not affect the carrying

amount of the Bank’s assets and liabilities.

1049. The lapse implied that the carrying amount of these assets and

liabilities may be overstated by the value of transactions on the

petroleum accounts.



1050. We recommended that the general ledger account codes for

assets and liabilities of the petroleum fund should be set up to net off

against each other as part of the financial statement closing process to

create a nil effect on the balance sheet.

Management of subsidiaries

1051. We noted during our review that though the Bank of Ghana

(BOG) has a controlling interest in the Central Securities Depository,

Ghana International Bank PLC and Ghana Interbank Payment and

Settlement Systems, none of these subsidiaries are made to prepare

financial returns to the Bank of Ghana, the holding company. We

noted that the BOG often relies on the balances obtained by the

auditors in their statutory audits of these subsidiaries.

1052. Subsidiaries are expected to report to their holding companies

regularly to enable the parents review the financial performance of

these subsidiaries as well as the entire group.

1053. Also, as part of the financial statements close process where

trial balances are generated and financial statements prepared for year

end audits, it is expected that the BOG would receive draft trail

balance and financial statements from their subsidiaries to facilitate

the preparation of consolidated trial balance and draft financial

statements for audit review.

1054. A result, the BOG may not be able to properly track and

monitor the financial performance of its subsidiaries. This situation

also results in significant delays in getting the consolidated financial

statements ready for review.

1055. We recommended that the BOG puts the following systems in

place.

(i) Ensure the subsidiaries submit financial returns so that it

would be possible to monitor the financial position and

performance of these companies.


(ii) Ensure the subsidiaries send unaudited trial balances early

enough after the year end so that these trial balances could

be consolidated into the trial balance and draft financial

statements that would be presented for audit.

Update of password guidelines documentation

1056. According to best practice, password controls should be

documented, implemented and enforced to ensure confidentiality of

information.

1057. However, we noted that the BOG documented its password

guidelines, outlining its password protection and configuration

requirements but the guidelines do not reflect the password

requirements for the significant applications shown below:

(1) Network application (Active Directory)

(2) T24 Globus application

(3) GIS application

1058. This may result in the risk of unauthorized access attempts

going undetected and unresolved by management. There is also the

risk of key financial data/programs being modified intentionally or

unintentionally.

1059. We recommended that management should update its password

guidelines to reflect the password requirements for the significant

application.

Loans not governed by valid contracts/agreements

1060. We noted that agreements governing short term loan facilities

granted by BOG to National Investment Bank (NIB) and Ghana

Commercial Bank (GCB) had expired and no new agreements have

been signed with these institutions.

1061. Our review of the terms of contract between BOG and NIB

dated 9 April 2009 indicated that a loan amount of GH¢60,000,000

was due on 30 September 2009. However NIB applied to BOG for an

extension of the loan duration to 31 March 2010 in a letter dated 29



September 2009. There was an extension to 31 March 2010, but the

loan still remained unpaid as at the time of reporting. The extension

to 31 March did not have any security backing it.

1062. On 19 February 2009, BOG granted a Bridging Facility to

GCB under an MOU. It was made up of a cedi equivalent of

US$25,000,000 and a US$50,000,000. Our review of the agreement

for the facility indicated that MOU was to expire by six weeks from 1

February 2009 but not later than 31 March 2009.

1063. However, as at the time of reporting, an outstanding balance of

the cedi equivalent of US$50,000,000 remained unsettled. We did not

sight a new agreement or an addendum established with GCB to

extend the terms and conditions contained in the MOU which expired

on 31 March 2010.

1064. We recommended that management should take necessary

steps to ensure that all loans are governed by valid loan agreements.

Outstanding withholding taxes not paid – GH¢625,875.95

1065. We noted in our review of accounts payable and accrued

balances that some withholding taxes deducted on payment for goods

and services in excess of GH¢50 had not been paid to the Domestic

Tax Revenue Division (DTRD) of Ghana Revenue Authority (GRA)

on time. This has led to an accumulation of withholding tax payable

to the tune of GH¢625,875.95 as at 31 December 2011.

1066. We recommended that in compliance with the requirements of

Section 80 of the Internal Revenue Act 2000 (Act 492), management

should ensure that all withholding tax deductions made are paid to the

Ghana Revenue Authority by the 15 of the month following the month

of deduction.

Excess withdrawal over direct holding account – GH¢83,000,000

1067. We noted that the Controller and Accountant-General maintain

receiving accounts for HIPC funds and withdrawal accounts for

developmental projects. The net position of the receiving and the


withdrawal accounts for the following HIPC special accounts as at 31

December 2010 showed an overdrawn position of GH¢83,000,000 as

shown below.

Name of

Account

Receipt

GH¢

Withdrawal

GH¢

Difference

GH¢

HIPC Main 173,188,631.23 243,274,233.97 70,085,602.74

MDRI sub a/c

World Bank

66,427,816.35 79,642,315.94 13,214,219.59

Total 239,616,527.58 322,916,549.91 83,300,002.24

1068. We recommended that where it becomes necessary for a

temporal advance to be granted to the government, the required

procedures outlined in the loan and Fiscal Agency Agreement

regarding temporary advances should be duly adhered to.

Government borrowing in excess of limits imposed in the BOG

Act

1069. We noted during the audit that significant balances on drawing

accounts operated by Government directly and through other

Government Institutions have led to an increase in the net exposure to

Government in excess of the ceiling that has been set by Section 30

(5) of the BOG Act. This is shown as follows:

GH¢

Loans and advances 939,661,391

Long-term Government Securities 1,276,352,270

Promissory notes receivable 2,155,715

Total loans, advances & Securities owed 2,218,169,376

Expected limit on borrowing per 530 (2) 826,400,000

Excess of borrowings over the limit 1,391,769,376

1070. We recommended that management should initiate measures to

ensure that the provisions of the Banking Act regarding loans and

advances to Government are complied with.

1071. In the event of an emergency, where the Government needs

funds, management may invoke the provisions of subsection 6 of the

BOG Act which requires that the Governor, the Minister and the



Controller and Accountant-General shall meet to decide the limit of

borrowing that should be made by Government and the Minister shall

submit a report on the issue to Parliament within seven sitting days.

MINISTRY OF INFORMATION

GRAPHIC PACKAGING LIMITED

Introduction

1072. This report relates to the audited accounts of G-PAK Limited

for the financial year ended 31 December 2011.

Operational results

1073. The company’s operations for the year 2011 ended with a net

loss of GH¢184,157 thus registering a decrease of 581.4% or

GH¢222,410 over the 2010 surplus of GH¢38,253. The decrease was

due to a 49.0% decrease in total income vis-à-vis a 39.2% rise in total

expenditure. A sumarised income statement is shown in Table 90.


Income 2011

GH¢

2010

GH¢

%

Change

Sales 1,387,695 1,367,792 1.5

Cost of sales 1,267,895 1,009,838 15.3

Gross profit 119,800 267,954 (55.3)

Other Income 17,656 1,357 1,201.1

Total Income 137,456 267,954 (49.0)

Expenditure

Admin, Selling & Gen. expenses 306,618 213,526 43.6

Interest Expenses 14,995 17,532 (14.5)

Total Expenditure 321,613 231,058 39.2

Net (loss) /Profit (184,157) 38,253 (581.4)

1074. Total Sales for the year increased marginally by 1.5% from

GH¢1,367,792 in 2010 to GH¢1,387,695 in 2011. The composition of

the sales were as follows: Calender sales - GH¢97,294 (2010:

GH¢22,426), Labels - GH¢677,290 (2010:-GH¢419,822) Magazine -


GH¢13,796 (2010: GH¢48,120), Newspapers - GH¢197,335, (2010:

GH¢230,810), Others-GH¢ 69,298 (2010: 172,489) Poster -

GH¢10,189 (2010: GH¢ 6,860).

1075. Printing of Commercial Books - GH¢ 94,602, (2010:

GH¢264,262) Skillet-GH¢ 224,300 (2010: GH¢102,830, and Title -

GH¢3,591 (2010: GH¢173).

1076. Total Expenditure went up by 39.2% from GH¢ 231,058 in

2010 to GH¢ 321,613 in 2011. This was as a result of a 43.6% rise in

Administrative, selling and general expenses which increased from

GH¢213,526 in 2010 to GH¢306,618 in 2011.

Financial position

1077. The statement of financial position of the Company is


Table 91: Assets and liabilities as at 31 December 2011

Item 2011

GH¢

2010

GH¢

%

Change

Non- current Assets 678,670 745,497 (9.0)

Current Assets 1,685,603 1,606,217 4.9



Net Assets 748,327 1,036,832 (27.8)


1078. Non –Current Assets which was made up of property plant and

equipment decreased by 9.0% from GH¢745,497 in 2010 to

GH¢678,670 in 2011. This was as a result of depreciation charges for

the period under review.

1079. Current Assets which stood at GH¢1,606,217 in 2010 increased

by 4.9% to GH¢1,685,603 in 2011. This was due mainly to a 34.1%

rise in stocks from GH¢767,223 in 2010 to GH¢1,028,929 in 2011.


GH¢1,314,882 in 2010 to GH¢1,615,946 in 2011. This was as a result

of a 1,911.8% rise in Bank overdraft.



1081. The Company’s liquidity position at the end of the year was

1.0:1 (2010: 1.2:1). This indicates that the company may not be in the

position to meet its short term liabilities as and when they fall due.

MANAGEMENT ISSUES

Purchase of raw materials – GH¢140,072.85

1082. We observed during our audit that G-PAK purchased raw

material which were meant for the production of labels for Blue Skies

Limited.

1083. These materials which were purchased in August 2011, cost the

company GH¢140,072.85. However, according to the General

Manager, the client changed its labels afterwards, so the materials

could not be used for its intended purpose and were still in stock.

1084. The implication is that the stock hold up could lead to the

locking up of capital. We recommended that effort should be made to

use the materials in time to prevent them from becoming obsolete

whilst at the same time releasing the locked up capital.

Trade debtors –GH¢11,130.00

1085. We noted during our audit that certain debtors have been in

existence since 2009 without any movement. The details are as

follows:

Name of Debtors Balance

GH¢

Guinness Ghana Limited 9,844.00

Voltic Ghana Limited 918.00

Nestle Ghana Limited 368.00

Total 11,130.00

1086. These debtors have been in existence for far too long and stood

the risk of non recovery. This could worsen the existing financial

distress of the company.


1087. We advised that management should intensify its debt

collection effort.

GHANA BROADCASTING CORPORATION

Introduction


Broadcasting Corporation for the period 1 January 2007 to 31

December 2008.

Operational results

1089. Total Income for the Corporation went up by 30.2% from

GH¢13,619,950 in 2007 to GH¢17,733,255 in 2008 mainly due to

increases of 16.9% and 79.9% in Government subvention and

Commercial Receipts respectively. The rise in Commercial Receipts

was largely due to increases in sponsorships from GH¢1,544,551 in

2007 to GH¢4,260,267 in 2008, representing 176% rise. Adverts

under Commercial Receipts also rose by 46% from GH¢3,960,671 in

2007 to GH¢5,770,232 in 2008.

1090. The summary of the Corporation’s operations for the period

under review is provided in Table 92.

Table 92: Performance indicators for 2008 and 2007 Income

2008 GH¢

2007 GH¢

% Change

Government Subvention 6,200,082 5,305,475 16.9

Commercial Receipts 10,461,477 5,816,474 79.9

Television License Fees 246,096 1,299,954 (81.1)

Other Income 825,600 1,198,047 (31.1)

17,733,255 13,619,950 30.2

Expenditure

Personnel Cost 7,063,646 6,044,752 16.9

Programme Expenses 867,128 876,692 (1.1)

Travelling and Transport 747,129 425,561 75.6

Repairs and Maintenance 581,265 418,968 38.7

Electricity and Water 1,437,087 565,040 154.3

Finance Charges 18,022 103,895 (82.7)

Other Expenses 3,479,080 2,713,236 28.2

Depreciation 3,466,729 3,553,998 (2.5)

17,660,080 14,702,142 20.1

Profit/(Loss) for the year 73,169 (1,082,192) (106.8)



1091. Revenue realized from the television license fee dropped from

GH¢1,299,954 in 2007 to GH¢246,096 in 2008, representing 81.1%

decrease. This was as a result of total reduction in Head Office’s

collection from GH¢1,208,261 in 2007 to GH¢17,548 in 2008 or a

99% reduction. The Other Income also decreased by 31.1% in 2007

to GH¢825,600 in 2008. This was because no revenue was realized

from Breakfast show, Dubbing and Dividend in the year under review.

However in 2007, revenue was generated from Breakfast show

(GH¢26,527) Dubbing (GH¢55,935) and Dividend (GH¢86,820).


2007 to GH¢17,660,086 in 2008. The rise was due mainly to

increases of 16.9% in Personnel cost; 75.6% in Transport &

Travelling, 38.7% in Repairs and Maintenance, 154.3% in Electricity

and Water expenses and 28.2% in Other Expenses. Prominent among

the contributors to the significant rise in Transport and Travelling

were the payments made on accommodation; general travelling and

transport cost. Commission expenses of GH¢306,318 in 2008 alone

accounted for the increases in other expenses.

1093. The operations of the Corporation ended with a profit of

GH¢73,169 as against a deficit of GH¢1,082,192 recorded in 2007

showing a favourable change of 106.8%.

Financial position

1094. Table 93 shows the balance sheet position as at 31 December

2008.


2008

GH¢

2007

GH¢

%

Change

Non-Current Assets 52,180,204 53,940,766 (3.3)

Current Assets 7,831,684 6,169,177 26.9


Long term Liabilities 280,053 280,053 -

Net Assets 58,636,771 58,563,602 0.1



1095. Non-Current Assets decreased marginally by 3.3% in 2008

mainly due to the provision for depreciation of GH¢3,466,729 for the

year, even though there was additions to the fixed assets.


2007 to GH¢7,831,684 in 2008. The increase in current assets was

due to the rise in Cash and bank balance from GH¢225,605 in 2007 to

GH¢1,917,382. Increase in stocks by 201% and decrease in debtors

figure of 57% respectively contributed to marginal rise in current

assets.

1097. Current Liabilities on the other hand, recorded a decrease of

13.5% from GH¢1,266,288 in 2007 to GH¢1,095,064 in 2008. The

marginal drop in Current Liabilities was the result of the variation in

bank overdraft facility from GH¢353,707 in 2007 to GH¢1,110 in

2008.

1098. The liquidity position as measured by a current ratio of 7.2:1

for 2008 and 4.9:1 for 2007 financial year indicates the ability of the

Corporation to meet its short term debts as and when they fall due.

MANAGEMENT ISSUES

Write offs and reduction in Debtors’ figure without authorization

1099. We noted that some debtors’ balances totalling GH¢796,257.63

had been reduced to GH¢333,777.91 while some totalling

GH¢446,166.11 had been written-off without authorization.

1100. Our review further revealed that the Director of Finance

authorized that practice without the consent of the Management

Board.

1101. Table following table shows the details.



(a) Debtors Balance reduction

Date Client Opening Bal.

Accounts Ledger GH¢

New Opening

Bal. (GH¢)

31/1/08 Ad Media FCB 23,837.92 14,302.75

31/3/08 AP Lintas/Media Init 207,374.46 151,426.08

30/4/08 AP Lintas/Media Init 151,426.08 45,827.41

382,638.46 211,556.24

Computerized

Ledger

30/4/08 Lintas 150,110.97 44,512.30

25/4/08 Kinapharma Ltd 58,843.56 -

31/8/08 Talent Media Consult 204,664.64 77,709.37

796,257.63 333,777.91

Difference of GH¢462,479.72

(b) Debtors Balances of GH¢446,166.11 written off

Date Name Amount (GH¢)

Manual Ledger

Business House Multimedia 3,488.34

Ghana Industry Broadcasting 11,465.32

God’s Way Hour 4,830.00

Computerised Ledger

31/8/08 Origin 8 Satchi & Satchi 48,234.93

“ Point Blank Media 34,507.30

“ Omadru Production 18,061.26

“ Wienco Ghana 74,683.31

“ Lintas Ghana 250,895.65

GH¢446,166.11

1102. We attributed this practice to lack of clear policy as a result of

which written request and authorization to support such practice are

not obtained. This could make the Company cash trapped.

1103. Management was advised to come up with a clearly

documented policy for the handling of overdue debts. There should


also be written or signed authorizations for any balances that are

written off or reduced with supporting reasons on file and additionally

this should be done in line with existing regulations.

1104. Management responded that, a Committee has been set up to

investigate this and report to management for appropriate action.

Alleged Barter transaction – GH¢309,012.00

1105. We noted that amounts totalling GH¢309,012.00 were included

in the fixed assets schedule as additions to the fixed assets for the

period under review. There were no documents available to support

these transactions.

Details provided in the Table below

Vehicle Type

Quantity

Total Cost

GH¢

Tata Buses 4 162,000.00

Tata indigo Saloon 6 95,130.00

Geely Motor Bikes 4 4,032.00

Toyota Corolla Saloon 1 22,850.00

G Wall 1 25,000.00

309,012.00

1106. A follow up revealed that, the vehicles were provided in

exchange for services provided by the Corporation (that is barter

transaction).

1107. We did not sight any evidence of approval and could not verify

the services rendered and the associated costs and the treatment of

service income in the Accounts. There was no clear and transparent

policy on barter transactions.

1108. We recommended that such policy must be scrapped or

streamlined to ensure transparency in operations.



GRAPHIC COMMUNICATION GROUP LIMITED

Introduction

1109. This report covers the audited accounts of the Graphic

Communication Group Limited for the financial year ended 31

December 2011.

Operational results

The operations of the Group ended with a turnover of GH¢30,179,406

for 2011 as against GH¢27,466,428 recorded in 2010, representing a

9.9% increase. This was largely due to a 17.3% rise in Graphic Sales

as well as a 6.2% increase in Advertising Income.

1110. Presented in Table 94 are the performance indicators.


Income 2011

GH¢

2010

GH¢

%

Change

Turnover 30,179,406 27,466,428 9.9

Cost of Sales 12,958,537 11,193,851 15,8

Gross Profit 17,220,869 16,272,577 5.8

Other Income 522,136 408,570 27.8

Total Income 17,743,005 16,681,147 6.4

Expenditure

Distribution Expenses 4,519,325 3,834,463 17.9

General & Adm. Expenses 8,395,795 6,942,750 20.9

Finance Charge 1,326,148 2,091,364 (36.6)

Exceptional Item 1,000,000 - -

Taxation 72,818 1,011,639 (92.8)


Net Profit 2,428,919 2,800,931 (13.3)

1111. Total Income increased by 6.4% from GH¢16,681,147 in 2010

to GH¢17,743,005 in 2011. This was as a result of a 9.9% and 27.8%

rise in Turnover and Other Income respectively.



2010 to GH¢15,314,086 in 2011. The increase was due to a 17.9%

and a 20.9% increase in Distribution Expenses and General and

Administrative Expenses respectively. An exceptional item of

GH¢1,000,000 made up of cost of business restructuring (redundancy

and severance cost) also contributed to the increase.

1113. The Group registered a net profit of GH¢2,428,919 for the year

under review as against a figure of GH¢2,800,931recorded in 2010,

representing a 13.3% drop.

Financial position

1114. Table 95 provides the financial position of the Group as at the

end of 2011.


2009

GH¢

2008

GH¢

%

Change


Current Assets 8,948,947 7,152,525 25.1


Net Current Liabilities (1,290,287) (150,963) 754.7

Long-Term Liabilities ( 1,300,881 3,972,864 (67.3)

Net Assets 20,131,252 18,202,333 10.6


1115. Non-Current Assets for the year increased by 1.8% from


result of additions to Fixed Assets.


2010 to GH¢8,948,947 in 2011. The increase was due to major

increases in Stocks, Trade Debtors, Tax Credits, and Bank and Cash

Balances.





result of increase in Trade Creditors, Sundry Creditors and accruals as

well as Bank Overdraft.

1118. The Groups liquidity position of 0.9:1 (2010:1.0:1) depicts its

inability to meet its short-term financial obligations when they fall

due.

MANAGEMENT ISSUES

Differences in stock records – GH¢171,710

1119. We noted during the audit that there was a difference of

GH¢171,710 between the general ledger stock balances and the

physical stock balances as at 31 December 2011.

1120. This could lead to overstatement of stock balance and theft of

stock.

1121. We recommended that management should investigate the

cause of the difference and put in measures to resolve the difference.

Difference in Intercompany balance – GH¢30,068

1122. We noted during our review that the intercompany balance

with G-Pack Ltd did not agree with that of Graphic Communications

Group Limited. The balance as at 31 December 2011 as per GCGL

general ledger was GH¢1,078,694 but that of G-Pack general ledger

was GH¢1,048,626 resulting in a difference of GH¢30,068.

1123. This could lead to intercompany accounts being misstated and

disputed.

1124. We recommended that management prepares reconciliation

between the subsidiary and the parent company accounts. Any

differences noted should be investigated and resolved.


NATIONAL FILM AND TELEVISION INSTITUTE

Introduction

1125. This report relates to the audited accounts of the National Film

and Television Institute for the year ended 31 December 2011.

Operational results

1126. Government subvention was the main source of income to the

Institute, constituting 77.9% of total income. This fell from

GH¢1,120,283 in 2010 to GH¢1,061,410 in 2011, a decrease of 5.3%.

The Institute generated other income from staff production

(GH¢25,575.00), sponsorship (GH¢10,250.00) and school fees

(GH¢194,824.00).

1127. Total expenditure decreased marginally by 7.5% to

GH¢1,208,261 in 2011 (2010: GH¢1,306,068). This was largely due

to a 87.5% fall in depreciation. The performance indicators of the

Institute are shown in Table 96.


Income

2011

GH¢

2010

GH¢

%

Change

Government Subventions 1,061,410 1,120,283 (5.3)

Expenditure

Personnel Emoluments 548,012 576,225 (4.9)

Administrative Expenses 572,113 662,076 (13.6)

Service Expenses 88,136 67,767 30.1


Net Subvention (146,851) (185,785) 20.9

Other Income 244,204 162,109 50.6

Deferred Income 55,245 69,742 20.8

Surplus/(Deficit) 152,598 46,066 231.3

1128. The Institute’s operating results for 2011 registered a surplus of

GH¢152,598 (2010: GH¢46,066) representing an increase of 231.3%.



Financial Position

1129. Presented in Table 97 is the analysis of movements in the

balance sheet item.


Item

2011

GH¢

2010

GH¢

%

Change


Capital Work-In-Progress 331,387 331,387 -

Current Assets 226,679 233,207 (2.8)

Deferred Income 407,074 437,471 (6.9)


Net Assets 343,150 198,131 73.2



1130. Non-Current Assets rose from GH¢247,677 in 2010 to

GH¢359,902 in the year 2011, registering a 45.3% increase. This was

largely due to the acquisition of computers (GH¢40,442), Studio

Equipment (GH¢31,171) and Furniture and Fittings (GH¢49,824).

Capital Work in progress remained unchanged at GH¢331,387.

1131. Current Assets decreased by 2.8% from GH¢233,207 in the

previous year to GH¢226,679 in 2011. This was because

Prepayments, Student debtors and Staff debtors declined by 645.6%

and 24.7% respectively.

1132. Current Liabilities also fell by 5.1% to GH¢167,744 in 2011 as

against the 2010 figure of GH¢176,669. This was largely due to the

settlement of Bank Overdraft received from Bank of Ghana.

1133. Current ratio for 2011 was 1.4:1 compared to 1.3:1 at the end

of 2010. Though the liquidity position has improved over the

previous year, this fell below the bench mark of 2:1 indicating the

Institute’s inability to meet its short term financial obligations as and

when they fall due.


NEW TIMES CORPORATION

Introduction

1134. This report relates to the audited accounts of the New Times

Corporation for the year ended 31 December 2011.

Operational results

1135. The Corporation’s turnover increased from GH¢7,594,120 in

2010 to GH¢9,774,426 in the year under review. The 28.7% increase

was as a result of a rise in sale of newspapers during the year.

1136. Cost of sales increased by 28.9% to GH¢6,317,079 in the

current year as against GH¢4,900,976 in the previous year resulting in

the gross profit of GH¢3,457,347 during the year under review.

1137. A summary of operational results of the Corporation is



2011

GH¢

2010

GH¢

%

Change

Turnover 9,774,426 7,594,120 28.7

Cost of Production 6,317,079 4,900,976 28.9

Gross Profit 3,457,347 2,693,144 28.4

General, Admin.& Selling

Expenses

3,643,391 2,287,078 59.3

Net Operating Profit (186,044) 406,066 (145.8)

Other Income 93,938 90,998 3.2

Profit /(Loss) before tax (92,107) 497,064 (118.5)

Provision for Taxation 55,087.84 72,419 (23.9)

Net Profit / (Loss) (147,195) 424,645 (134.7)

1138. The General, Administrative and Selling expenses recorded a

59.3% rise from GH¢2,287,078 in 2010 to GH¢3,643,391 in 2011.

This mainly resulted from increase in Personnel cost, Premises

Expenses, Office Expenses, Finance Costs and other General

Expenses.



1139. The Corporation registered a net loss after tax of GH¢147,195

during the year as against a profit of GH¢424,645.00 in the previous

year representing a fall of 134.7%. This was transferred into the

income surplus account which reduced the balance from GH¢671,194

in 2010 to GH¢508,420, a fall of 24.3%

Financial position

1140. The Balance sheet of the Corporation as at 31 December

2011is shown in Table 99.


2011

GH¢

2010

GH¢

%

Change

Non –Current Assets 2,206,343 2,297,859 (4.0)

Current Assets 3,949,653 3,438,551 14.9


Net Current Assets/

(Liabilities)

(31,057) 40,198 (177.3)

Net Assets 2,175,286 2,338,058 (7.0)

Current Ratio 1.0:1 1.0;1

1141. There was a change in value of Non- Current Assets from

GH¢2,297,859 in the previous year to GH¢2,206,343 in the current

year, representing a fall of 4.0%. There were additions to the tune of

GH¢305,193 but this was offset by depreciation charge for the year.

1142. Current Assets however increased by 14.9% to GH¢3,949,653

in 2011 from an amount of GH¢3,438,551 in 2010. An increase in

Stock, Staff Debtors, Taxation, Cash and Bank balances accounted for

the rise.

1143. Current liabilities also increased by 17.1% over the previous

year’s figure of GH¢3,398,353 to GH¢3,980,710 for the year under

review, due to a rise in Sundry Creditors and Accrued liabilities.


1144. The current ratio of the Corporation stood at 1.0:1(2010:1.0:1).

This falls below the bench mark of 2:1 and will impede its ability to

meet its short term obligations should they fall due.

MANAGEMENT ISSUES

Management of staff Imprest

1145. Best accounting practice requires that accountable imprest

should be accounted for by the holder after execution of its intended

purpose.

1146. We noted that for the period under review, staff imprest of

GH¢50,332.00 granted to staff have not been retired despite our

highlights in the previous management reports on the inherent risk and

dangers associates with this lapse.

1147. This continues occurrence is due to management’s failure to

ensure that beneficiaries promptly retire imprest granted to them.

1148. The lax in controlling accountable imprest make the

corporation susceptible to misappropriation of funds. It may also lead

to preparation of misleading financial statement since some of these

funds might have been used in payment for some expenses which may

not be reflected in the total cost of production during the year.

1149. We recommend that stringent procedures be put in place to

check the management and control of accountable imprest so that

beneficiaries do not keep them for unreasonable long period time.

1150. Management should as matter of urgency also ensure that staff

involved accounts for the imprest of GH¢50,332.00.

Debts Age Analysis

1151. Our examination of the financial records revealed that an

amount of GH¢516,581.50 owed by existing organizations has been

outstanding for long periods without recovery.



1152. Management’s failure to pursue collection of these debts

brought about this lapse.

1153. Non-collection of these debts will affect the operations of the

Corporation which will have to depend on other sources for funding

and lieu interest charges.

1154. We recommended that Management should expedite action to

recover these long outstanding debt of GH¢516,581.50 and ensure that

in future customers clear their debts before Services are provided

them. They should also ensure that the credit department recovers

debt on time and the Debtors Register is updated with the customers’

current addresses and contact details so that the Corporation will not

lose money through bad debts.

MINISTRY OF WATER RESOURCES,

WORKS AND HOUSING

TEMA DEVELOPMENT CORPORATION

Introduction

1155. This report relates to the audited accounts of the Tema

Development Corporation for the year ended 31 December 2011.

Operational results

1156. Operations for the year closed with a surplus of GH¢3,225,350

compared with a surplus of GH¢2,758,091 in 2010, representing an

increase of GH¢467,259 or 16.9%. Presented in Table 100 is the

summarised operational performance of the Corporation.


Income

2011

GH¢

2010

GH¢

%

Change

Rentals & Estate Development 11,742,541 8,058,538 45.7

Sundry Income 2,028,439 1,550,576 30.8

Total Income 13,770,980 9,609,114 43.3


Expenditure

Direct Expenses 2,777,555 997,738 178.4

General & Admin. Expenses 8,726,905 6,651,685 31.2


Net Profit on Rental & Estate

Development

2,266,520 1,959,691 15.7

Profit on Sale of Fixed Assets 137,621 30,648 349.0

Investment Income 1,894,726 1,479,085 28.1

Dividend Income 1,600 1,500 6.7

Profit Before Tax 4,300,467 3,470,924 23.9

Corporate Tax 1,075,117 712,833 50.8

Profit After Tax 3,225,350 2,758,091 16.9

1157. The operational income of the Corporation which were from

Rental and Estate Development and Sundry Income rose from

GH¢9,609,114 in 2010 to GH¢13,770,980 in 2011, representing a

43.3% increase. Rental and Estate Development, comprising sale of

houses, sale of serviced plots, ground rent and house shop rent showed

appreciable increases.

1158. Sundry Income which is made up of income from site

plan/building permit, land leases and transfers among others increased

from GH¢1,550,576 to GH¢2,028,439, a rise of 30.8%.

1159. The total expenses of the Corporation over the review year

which is classified into Direct and General Administration and Selling

Expenses increased from GH¢7,649,423 to GH¢11,504,460,

representing an increase of 50.4%. Cost of Houses sold and Staff costs

accounted significantly for the increase.

Financial position

1160. A summary of the Corporation’s financial position as at 31

December 2011 is shown in Table 101.



Table 101: Balance sheet as at 31December 2011

2011

GH¢

2010

GH¢

%

Change

Non-current Assets 5,244,801 5,503,375 (4.7)

Current Assets 45,291,069 23,806,802 90.2



Net Assets 21,942,662 17,200,839 27.6


1161. Non-current Assets registered a marginal decline of 4.7% or

GH¢258,574 to GH¢5,244,801 in 2011 from GH¢5,503,375 in 2010.

The decline was as a result of depreciation charge and disposals of

Residential Buildings, Furniture and Fittings and Motor vehicles.

1162. Current Assets shot up by 90.2% to GH¢45,291,069 in 2011

from GH¢23,806,802 in 2010. This was due to significant increases

in Works-In-Progress (198.0%) and Short-Term Investments

(199.6%).

1163. Current Liabilities went up by 136.0% from GH¢12,109,338 in

2010 to GH¢28,593,208 in 2011. This arose due to increases in

sundry creditors, serviced plot deposits and contractors retention.

1164. Net Assets of the Corporation grew by 27.6% from

GH¢17,200,839 in 2010 to GH¢21,942,662 in 2011.

1165. The Corporation’s liquidity position for the year was 1.6:1

(2010: 1.9:1). 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

Indebtedness to Lands Commission - GH¢16,574,567

1166. In the year under review, it came to our attention through a

letter dated 13/04/10 with reference number SCR/LCD/353/42 that the


Corporation was indebted to Lands Commission to the tune of

GH¢16,574,567 (£7,705,517) in unpaid rent spanning twenty-three

(23) years.

1167. In response, management objected to the amount being claimed

by the Lands Commission because the Corporation does not hold the

39,154.3 acres used by Lands Commission to determine the bill.

Management also indicated that a meeting was being arranged to

reconcile the land size and the amount involved.

1168. We recommended that Management should have a discussion

with the authorities of Lands Commission to resolve the issue.

WATER RESOURCES COMMISSION

Introduction

1169. This report relates to the audited financial statements of Water

Resources Commission for the financial year ended 31 December

2011.

Operational results

1170. The Commission’s total income decreased by 14.3% from

GH¢2,290,488 in 2010 to GH¢1,963,995 in 2011, even though

income derived from IGF grew by 20.8% from GH¢429,553 in 2010

to GH¢518,882 in 2011. The fall in Other Income from

GH¢1,806,935 in 2010 to GH¢1,445,113 in 2011, accounted for the

decrease in Total Income. The decline in other income was mainly

due to significant downward movement in DANIDA grants and

European Union Funds by 78.8% and 49.6% respectively.

1171. The operational results are shown in Table 102.


Income 2011

GH¢

2010

GH¢

%

Change

Income (IGF) 518,882 429,553 20.8

Other Income 1,445,113 1,860,935 (22.3)

Total Income 1,963,995 2,290,488 (14.3)



Expenditure

General Adm. Expenses 2,313,643 1,515,804 52.6

Net (Loss) Income (349,648) 774,684 (145.1)

1172. General administrative expenses grew by 52.6% from

GH¢1,515,804 in 2010 to GH¢2,313,643 in 2011. The growth in

general administration expenses in 2011 was due to increases in

salaries (46.3%), Motor Vehicle Running Cost (126.1%),

Workshop/Seminar (63.3%) Community Support (306.4%), contract

for printing (155.9%) and Consultancy service fees (13.4%) over the

previous year.

1173. Net Income significantly declined from GH¢774,684 in 2010 to

a net loss of GH¢349,648 in 2011. The significant reductions in

DANIDA grants and European Union Funds and the rise in total

expenses in 2011 contributed to the decrease in net income.

Financial position

1174. Shown in Table 103 is the financial position of the

Commission as at 31 December 2011


Income 2011

GH¢

2010

GH¢

%

Change


Current Assets 587,445 1,200,875 (51.1)


Net Assets 1,294,086 1,643,734 (21.3)


Represented by:

Accumulated Fund 1,234,241 1,583,889 (22.1)

Development Fund 59,845 59,845 -

1175. Non-current Assets grew by 60.8% from GH¢482,473 in 2010

to GH¢775,695 in 2011. The increase was attributed to additions of

GH¢459,759 to existing assets.


1176. Current Assets on the other hand decreased by 51.1% from

GH¢1,200,875 in 2010 to GH¢587,445 in 2011. The reduction was as

a result of a 62.5% decrease in cash and cash equivalents.

1177. Current Liabilities registered an increase of 74.3% over 2010

figure of GH¢39,614 to GH¢69,054 in 2011. Increase in sundry

payables (111.3%) accounted for the rise.

1178. The current ratio of the Commission fell from 30.3:1 in 2010 to

8.5:1 in 2011. The decrease, however would not affect the short term

solvency of the Commission since it exceeded the benchmark.

STATE HOUSING COMPANY LIMITED

Introduction

1179. This report relates to the audited accounts of State Housing

Company Limited for the year ended 31 December 2011.

Operational results

1180. Income from the sale of houses which is the mainstay of the

Company was GH¢2,012,185, increased by 9.3% over the 2010 figure

of GH¢1,841,630. This income component constituted about 35% of

overall total income of the Company.

1181. Other income also rose by 18.4% from GH¢3,063,284 in 2010

to GH¢3,627,370 in 2011. This largely resulted from the increases in

ground rent from GH¢858,371 in 2010 to GH¢1,332,850 in 2011,

legal fees from GH¢756,774 in 2010 to GH¢947,381 in 2011 and

development and plot release fee from GH¢224,211 in 2010 to

GH¢399,409 in 2011. The performance components for the period

under review are shown in Table 104.


2011

GH¢

2010

GH¢

%

Change

Turnover 2,012,185 1,841,630 9.3

Other Income 3,627,370 3,063,284 18.4

Finance Income 46,096 128,263 (64.1)

Total Income 5,685,651 5,033,177 13.0



Expenditure

Cost of sales 1,411,181 1,263,033 11.7

Staff cost 2,271,260 1,803,994 25.9

Administrative cost 1,117,199 979,554 14.1

Selling and Distribution cost 56,536 41,935 34.8

Finance Expenses 13,240 27,239 51.4

Taxation 169,819 136,744 24.2


Net profit 646,416 780,678 (17.2)

1182. Finance Income decreased by 64.1% from GH¢128,263 in

2010 to GH¢46,096 in 2011. This happened because no interest was

received on investments during the year under review as compared to

GH¢123,835 for 2010.

1183. Total Expenditure increased slightly by 18.5% from

GH¢4,252,499 in 2010 to GH¢5,039,235 in 2011. It was made up of

cost of sales which rose to GH¢1,411,181 from an amount of

GH¢1,263,033 in 2010 due to increase in construction cost from

GH¢1,187,380 in 2010 to GH¢1,344,922 in 2011. Staff cost which

rose from GH¢1,803,994 in 2010 to GH¢2,271,260 in 2011 was as a

result of increase in salaries and wages from GH¢1,495,547 in 2010 to

GH¢1,948,512 in 2011.

1184. Selling and distribution cost increased from GH¢41,935 in

2010 to GH¢56,536 in 2011. This was largely due to an increase in

commission charges from GH¢6,112 in 2010 to GH¢29,842 in 2011.

Administrative cost which formed an integral part of total expenditure

went up by 14.1%. This was as a result of increase in legal and

professional charges from GH¢36,269 in 2010 to GH¢140,975 in

2011.

1185. Net profit however recorded a decrease of 17.2% from

GH¢780,678 in 2010 to GH¢646,416 in 2011, which has been

transferred to Income Surplus Account.


Financial Position

1186. Presented in Table 105 is the balance sheet as at 31 December

201.


2011

GH¢

2010

GH¢

%

Change

Non-current assets 2,394,075 1,827,177 31.0

Current assets 6,462,262 6,075,670 6.4


Non-current Liabilities 958,543 979,843 (22)

Net Assets 1,235,824 603,365 104.8


1187. Non-current assets registered an increase of 31% from


due to new development expenditure incurred on land, roads and

drains, water and electricity totalling GH¢647,761.

1188. Current assets also rose from GH¢6,075,670 in 2010 to

GH¢6,462,262 in 2011, representing a marginal increase of 6.4%.

This was due to increase in cash and bank balances from GH¢640,841

in 2010 to GH¢783,494 in 2011.

1189. Current liabilities also went up marginally by 5.4% from

GH¢6,319,639 in 2010 to GH¢6,661,970 in 2011, largely due to a

6.2% increase in Trade and other payables.

1190. The liquidity ratio of the Company stood at 0.97:1 in the year

under review compared to 0.96:1 in the previous year, an indication of

the Company’s inability to meet its short-term debts as and when they

fall due.

MANAGEMENT ISSUES

Tangible fixed assets not insured

1191. We noted that tangible fixed assets acquired by the Company

were not insured. The effect is that, in the event of a fire outbreak, the

Company could suffer heavy losses, which might result in its total

collapse.



1192. We therefore advised management to take appropriate steps to

have these assets properly insured to safeguard them against fire

outbreaks and losses.

1193. Management responded that, it had received insurance proposal

from Unique Insurance Company but were considering the financial

implication of the proposal.

MINISTRY OF TRADE AND INDUSTRIES

GHANA STANDARDS BOARDS

Introduction

1194. This is a report on the audited accounts of the Ghana Standards

Boards for the year ended 31 December 2010.

Operational results

1195. Total Income exceeded Total Expenditure by GH¢4,594,306,

recording an improvement of 7.7% over the previous year’s surplus of

GH¢4,265,764. Performance details are shown in Table 106.

Table106: Income statement for 2010

Income 2010

GH¢

2009

GH¢

%

Change

Recurrent Grant 2,592,205 2,021,186 28.3

Internally Generated Funds 10,521,019 9,089,570 15.7

Deferred Revenue Grant - 163,303 -

Donations 247,213 - -

Total Income 13,360,437 11,274,059 18.5

Expenditure


Administrative Expenses 3,143,155 2,259,729 39.1

Service Expenses 1,568,856 1,319,252 18.9


Surplus / (Deficit) 4,594,306 4,265,764 7.7


1196. Total Income increased by18.5% from GH¢11,274,059 in 2009

to GH¢13,360,437 in 2010. The increase was as a result of 100%

increase in Donations. This represents consumables and spare parts

received from Non-Governmental Organisations valued at invoice

amount.

1197. Total Expenditure increased from GH¢7,008,295 in 2009 to

GH¢8,766,131 in 2010, an increase of 25.1%. This was due to the

18.2% increase in Personnel Emoluments, 39.1% increase in

Administrative Expenses and 18.9% increase in Service Activity

Expenses. The increases in Utilities, Repairs and Maintenance Cost,

Medical Expenses, Honorarium and staff Welfare Expenses mainly

accounted for the rise in Administrative Activity Expenses.

Financial position

1198. Table 107 presents a sumarised balance sheet as at 31

December 2010.

Table107: Balance sheet as at 31 December 2010 Income 2010

GH¢

2009

GH¢

%

Change


Current Assets 12,965,303 10,735,394 20.8



Net Assets 24,977,918 19,772,992 26.3


1199. The non-current assets went up by 31.6% from GH¢9,281,947

in 2009 to GH¢12,210,591 in 2010. This was due to the acquisition of

additional property, plant and Equipment and 133.2% increase in

Capital Work-in-progress.

1200. Current assets also increased by 20.8% from GH¢10,735,394 in

2009 to GH¢12,965,303 in 2010. The increase of 26.9% in cash and

cash equivalent and 34.1% increase in inventories accounted for the

rise.



1201. Current liabilities stood at GH¢244,349 in 2009 and

GH¢197,976 in 2010, an increase of 19.0%. The 113.4% increase in

outstanding payments on Statutory Liabilities resulted in the rise.

1202. The current ratio was 65.5:1 for 2010 (2009: 43.9:1) and this

indicated a favourable position for the Board to meet its short-term


MANAGEMENT ISSUES

Auction of vehicles - GH¢26,300.00

1203. The Board auctioned two saloon cars and five pick-up’s valued

at GH¢26,300 by STC. We however noted that the Board did not

assign an officer to the public auction of the Board’s vehicles to

receipt proceeds that accrued from the auction sales as had been the

generally accepted practice. As a result, documents to authenticate the

receipt of proceeds which accrued from the auction sale and the

subsequent payment into the Non-Tax Revenue Account at the Bank

of Ghana were not made available for our inspection.

1204. This could lead to loss of revenue to government.

1205. We recommended that an official of the Board should be

present whenever any item of the Board is to be auctioned in order to

ensure proper accountability. Also, the Board should produce the

relevant documents for the confirmation of receipts of the proceeds

and subsequent payment into the Non-Tax Revenue Account at Bank

of Ghana.

GHANA HEAVY EQUIPMENT LIMITED

Introduction

1206. This report relates to the audited accounts of the Ghana Heavy

Equipment Limited for the year ended 31 December 2011.

Operational results

1207. The Company’s operations for the year which ended with a

profit of GH¢19,230 showed a marked improvement over the prior


year’s loss of GH¢6,411, a decrease of 400.0%. Presented in Table

108 are details of the operational results:


Item

2011

GH¢

2010

GH¢

%

Change

Sales 2,249,347 1,906,288 17.9

Less cost of sales 1,116,827 807,977 38.2

Gross Profit 1,132,520 1,098,311 3.1

Other Income 241,413 229,020 5.4

Total Income 1,373,933 1,327,331 3.5

Expenditure


Finance Cost 130,983 314,960 ( 58.4)


Net Profit/(loss) 19,230 (6,411) (400.0)

1208. Sales increased by 17.9% from GH¢1,906,288 in 2010 to

GH¢2,249,347 in 2011. This was mainly due to a 837.9% increase in

commission earned.

1209. Cost of sales of GH¢1,116,827 also increased by 38.2% or

GH¢308,850 over the previous year’s figure of GH¢807,977.00

1210. Other Income increased from GH¢229,020 in 2010 to

GH¢241,413 in 2011, representing an increase of 5.4%. This was

mainly due to interest earned on Treasury Bill in the year under

review.

1211. Total Expenditure recorded an increase of 1.6% from

GH¢1,333,742 in 2010 to GH¢1,354,703 in 2011. This was due to a

66.3% rise in Repairs and Maintenance Expenses.

Financial position

1212. Table 109 represents the Company’s financial position for the

period reviewed.




2011

GH¢

2010

GH¢

%

Change

Fixed Assets 917,729 892,817 2.8

Long Term Receivables 2,356,558 2,556,558 (7.8)

Current Assets 6,237,183 4,890,738 27.5



Total Assets 5,790,409 5,771,224 0.3


1213. Fixed Assets at the close of 2011 amounted to GH¢917,729 as

against GH¢892,817 in the preceding year, representing an increase of

2.8%. The increase was due to additions to Motor Vehicles, Furniture

and Equipment and Computer during the year.

1214. Long-Term Receivables of GH¢2,356,558, which represents an

amount receivable from the Ministry of Trade and Industry for

funding the rehabilitation of Ghana House decreased by 7.8% from

GH¢2,556,558 in 2010.

1215. Current Assets rose from GH¢4,890,738 in 2010 to

GH¢6,237,183 in 2011, indicating a 27.5% increase. This was

accounted for by an investment in treasury bills of GH¢1,882,104.

1216. Current Liabilities increased by 44.8% to GH¢3,721,016 in

2011 from GH¢2,568,889 in 2010. The increase resulted from a loan

of GH¢2,000,000 received from Ministry of Trade and Industry to

support its operations.

1217. The liquidity position as measured by the current ratio of 1.6:1

showed an unhealthy position which portrays the inability of the

Company to meet its short term obligations falling due.


MANAGEMENT ISSUES

Accounts receivables - GH¢1,213,643.22

1218. We observed that a total amount of GH¢1,213,643.22 was still

standing on Debtors accounts as at the end of the audit. Debtors’ age

analysis revealed that some debts had stood for more than four years.

1219. Some of these debts are not recoverable thus there is the need

to take appropriate action in line with existing regulations in order to

show a true and fair view of the financial statements.

1220. Management was advised to make strenuous efforts and

recover the debt and in instances of unrecoverable debts, appropriate

action should be taken in line with existing regulations.

1221. Management explained that efforts have been made to recover

the debts to the extent of sending some of them to court and

repossessing some machines for resale.

GHANA SUPPLY COMPANY LIMITED

Introduction

1222. This report relates to the audited accounts of the Ghana Supply

Company Limited for the period ended 31 December 2010.

Operational results

1223. Table 110 provides the performance indicators.


2010

GH¢

2009

GH¢

%

Change

Turnover 685,159 735,617 (6.9)

Selling, Administrative &

General Expenses

(1,487,089) (1,342,203) 10.8

Operating Loss (801,930) (606,586) 32.2

Other Income 195,841 584,682 (66.5)

(Loss) before Taxation (606,090) (21,904) 2,667.0

Taxation - - -

Loss after Taxation (606,090) (21,904) 2,667.0



1224. The Company recorded a net loss of GH¢606,090 in 2010, thus

registering a 2,667.0% increase over the 2009 net loss of GH¢21,904.

1225. Turnover for the period decreased by 6.9% from GH¢735,617

in 2009 to GH¢685,159 in 2010. The decrease was mainly due to a

68.4% reduction in Training Income and no receipt for Tender Income

in the year. Decreases in Rental Income (36.1%), Investment income

(88.5%), Exchange Gain (89.0%) and sundry Income (99.8%) mainly

accounted for the decline in other income.

1226. Operating Expenses increased by 10.8% from GH¢1,342,203

in 2009 to GH¢1,487,089 in 2010. The 113.7% increase in Director’s

Emoluments and 100.0% increase in Auditors’ Remuneration were

largely responsible for the increase in Expenses.

Financial position

1227. The highlights of the Company’s financial position are

presented in Table111.


2010

GH¢

2009

GH¢

%

Change


Current Assets 1,024,533 840,452 21.9

Current Liabilities 1,187,462 432,361 174.6

Net Assets 1,222,594 1,828,684 (33.1)


1228. Non-Current Assets fell from GH¢1,420,593 in 2009 to

GH¢1,385,523 in 2010, representing a 2.5% decrease. This was due

to depreciation charge for the period.

1229. Current Assets rose by 21.9% to GH¢1,024,533 in 2010 from

GH¢840,452 in 2009. This was largely due to increases in stocks

(100%), Trade Receivables (29.1%) and Short Term Investments

(11.6%).


1230. Current Liabilities recorded a significant (174.6%) increase

over the 2009 amount of GH¢432,361 to GH¢1,187,462 in 2010.

This was as a result of increases in Trade Payables, Bank Loans and

Bank overdraft.

1231. The increases in the Company’s Current Liabilities negatively

affected the liquidity position from 1.9:1 in 2009 to 0.9:1 in 2010,

indicating the company’s inability to meet its short-term debts as and

when they fall due.

MINISTRY OF ROADS AND HIGHWAYS

GHANA HIGHWAY AUTHORITY

Introduction

1232. This report covers the audited accounts of the Ghana Highways

Authority for the year ended 31 December, 2011.

Operational results

1233. Recurrent Grant for the period under review decreased

marginally by 2.2% from GH¢102,155,289 in 2010 to

GH¢99,884,275 in 2011. This was due to 18% fall in Road Fund

Releases (Periodic and Routine Maintenance) from GH¢87,590,343 in

2010 to GH¢71,432,537 in 2011. Internally Generated Income from

Sundry Income also dropped from GH¢2,369,428 in 2010 to

GH¢698,048 in 2011. Performance indicators are shown in Table 112


Income 2011

GH¢

2010

GH¢

%

Change

Recurrent Grant 99,884,275 102,155,289 (2.2)

Expenditure

Personal Emolument 11,697,232 11,110,148 5.3

Administrative Expenses 2,582,436 1,819,408 41.9

Service Expenses 417,895 585,350 (28.6)

Investment 85,120,299 88,209,685 (3.5)


Surplus 66,413 430,698 (84.6)



1234. Total Expenditure recorded a decrease of 1.9% from

GH¢101,724,591 in 2010 to GH¢99,817,862 in 2011, due to a 3.5%

reduction in Investment and a 28.6% drop in Service Expenses,

Personal Emolument which witnessed a rise of 5.3% was as a result

of increase in salaries and wages. Administrative Expenses which

rose from GH¢1,819,408 in 2010 to GH¢2,582,436 in 2011 was

largely due to increase in personal vehicle maintenance and

allowances from GH¢888,686 in 2010, representing a 87% rise.

1235. The Authority‘s operations for the year ended with an excess of

income over expenditure of GH¢66,413 compared with the 2010

figure of GH¢430,698, representing a fall of 84.6%

Financial position

1236. Detailed in Table 113 is the financial position of the Authority

as at 31 December 2011.


2009

GH¢

2008

GH¢

%

Change


Current Assets 29,098,743 11,810,705 146.4


Net Assets 40,587,869 23,293,293 74.2


1237. Included in the non-current assets is an Investment (acquisition

of land) of GH¢600,000 in the year under review. Fixed assets rose

from GH¢20,141,875 in 2010 to GH¢21,210,958 in 2011, recording

an increase of 10.3%. The increase was due to acquisition of

additional assets such as furniture and fittings, plant and machinery

worth GH¢2,069,083.

1238. Current assets also increased by 146.4% from GH¢11,810,705

in 2010 to GH¢29,098,743 in 2011. The increase was mainly due to


increases in Accounts Receivable from GH¢1,171,218 in 2010 to

GH¢2,247,970 in 2011 and also Bank Balance from GH¢10,357,586

in 2010 to GH¢26,539,387 in 2011. The balance on the Project Fund

Account of GH¢15,508,192 accounted for the rise in the Bank

Balance.

1239. Current Liabilities also went up by 23.8% from GH¢8,659,287

in 2010 to GH¢10,721,832 in 2011. Increase in unclaimed

compensation for the year GH¢6,385,375 (2010: GH¢877,363)

accounted for the change.

1240. Liquidity position for 2011 as depicted by a current ratio of

2.7:1 indicates a favourable status as a result of which the Authority

could discharge its short-term obligation when they fall due.

MANAGEMENT ISSUES

Accountable Imprest - GH¢5,891.19

1241. We noted that a total amount of GH¢5,891.19 was not retired at

the Ashanti Regional Office. A schedule obtained had an opening

balance of GH¢4,650.53 which did not relate to any particular person.

This occurred as a result of imprest given to staff on official

assignments but at the end of the year, the officers refused to retire the

outstanding figure.

1242. This practice is in contravention of the FAR, 2004 Part XIII

Regulation 289(1) which states that “imprest shall be retired at the

close of a financial year and any imprest not so retired shall be

adjusted to a personal advance account in the name of the imprest

holder”.

1243. We attributed this anomaly to lack of an effective monitoring

mechanism put in place by management for quick accountability of

advances given out.

1244. We therefore advised management to put in place a strong

monitoring and retrieval mechanism to forestall future reoccurrence.



Management should ensure that the amount involved is retrieved from

the concerned officers.

1245. Management responded that the recommendation had been

noted for compliance. Meanwhile, the Regional Accountant has been

directed to investigate the figure of GH¢4,650.53.

MINISTRY OF LOCAL GOVERNMENT AND RURAL

DEVELOPMENT

NORTHERN REGION POVERTY REDUCTION

PROGRAMME

IFAD LOAN NO.571-GH

Introduction


Northern Region Poverty Reduction Programme, IFAD Loan No.

571-GH under Ministry of Local Government and Rural Development

for the three (3) months ended 31 March 2012.

Operational results

1247. Total income for the Programme at the end of 3 months period

was US$76,914. This was Cash and Bank Balance brought forward

from previous year, 2011. Table 114 shows resources and expenditure

during the period. However comparison cannot be made with figures

of the corresponding period because of the difference in period

duration.

Table 114: Income statement for the 3 months ended 31 March

2012 Resources

3Months ending 31/3/2012

US$

Bank & Cash balance at 1/1/12 76,914

IFAD – Funding -

Other Income -

76,914


Expenditure

Technical assistance & studies 48,640

Training,Workshops & meeting -

Common Development Fund -

Staff travel allowances 3,349

Operation & maintenance cost 24,566

Bank & Cash balance 31/3/12 359

76,914

1248. Total Expenditure for the 3 months period amounted to

US$76,555.00. Technical assistance and studies accounted for 64% of

the total expenditure whilst operation and maintenance cost

contributed about 32% to the total expenditure.

1249. At the end of the 3 months period, a cash and bank balance of

US$359 was registered.

Financial position

1250. Shown in Table 115 is the financial position of the programme

as at 31 March 2012.

Table 115: Balance sheet as at 31 March 2012

1251. The amount recorded as Capital Expenditure was made up of

office equipment and material.

1252. Current Assets registered US$359 as at the end of the 3

months.

1253. Current Liabilities for the 3 months period went up to

US$36,366 (12 months-2011: US$18,605). The increment was due to

31 March 2012

US$

Capital Expenditure 9,360,157

Current Assets 359

Current Liabilities 36,366

Non-Capital Expenditure 4,432,845



consultancy fee of US$9,429, which did not exist in 2011 and a rise in

accrued audit fee from US$18,605 in 2011 to US$26,937 in 3 months

of 2012.

NORTHERN REGION POVERTY REDUCTION

PROGRAMME - IFAD LOAN NO. 571 – GH

Introduction


Northern Region Poverty Reduction Programme IFAD Loan No. 571

–GH under Ministry of Local Government and Rural Development for

the year ended 31 December 2011.

Operational Results

1255. Total receipts during the year decreased by 30.6% from US

$5,292,720 in 2010 to US $3,671,095 in 2011. A 41.3% decrease in

IFAD funding accounted for reduction in the total income. Other

Income which contributed about 2% of the total income was as a

result of exchange gain on foreign currency. Table 116 shows

resources and expenditure for the period. Table 116: Income statement for 2011

Resources

2011

US $

2010

US $

%

Change

Bank & Cash balance at 1/1/11 1,350,204 1,454,561 72

GOG – Funding - 34,213 (100)

IFAD Funding 2,234,520 3,803,946 (41.3)

Other Income 86,371 - -

3,671,095 5,292,720 (30.6)

Expenditure

Vehs, Office equip. & Maint. - 265,247 (100)

Techn. assistance & studies 174,927 282,037 38.0

Training , workshops & meeting 337,180 291,243 15.8

Common Development Fund 2,981,996 2,861,537 4.2

Staff travel allowances 14,413 85,515 83.1

Operation & maintenance cost 85,665 147,501 41.9

Exchange Loss - 9,436 (100.0)

District advances - 66,972 (100.0)

Bank & cash balance 31/12/11 76,914 1,283,232 (94.0)



1256. Total expenditure during the year decreased by 30.6% from US

$5,292,720 in 2010 to US $3,671,095 in 2011. The decrease in the

expenditure was largely due to decreases in technical assistance and

studies by 38%, staff travel allowance by 83.1% and operation and

maintenance cost by 41.9%.

1257. As a result of the significant reduction in income and marginal

increase in expenditure, the year 2011 closed with a bank balance of

US $76,914 as against US $1,283,232 in 2010, representing a

decrease of 94%.

Financial position

1258. Presented in Table117 is the financial position.


2011

US $

2010

US $

%

Change

Capital Expenditure 9,360,157 6,378,161 46.8

Current Assets 76,914 1,350,204 93.3

Current Liabilities 18,605 18,605 -

Non-Capital Expenditure 4,356,290 3,662,154 19.0

Current Ratio 4.1:1 72:6:1

1259. The Capital Expenditure which was made up of office

equipment and materials had not changed.

1260. Current Assets decreased to US$76,914.00 as against

US$1,350,204 recorded in the previous year. The decrease was as a

result of decrease cash and bank balance US$18.60.

1261. Consequently Current Liabilities for the period saw no change

in 2010 and 2011 recording US$18,605.

INSTITUTE OF LOCAL GOVERNMENT STUDIES

Introduction

1262. This report covers the audited accounts of the Institute of Local

Government Studies for the year ended 31 December 2011.



Operational Results

1263. The year 2011 ended with a surplus of GH¢575,033, which

represented a decrease of 375.7% over the previous year’s deficit of

GH¢208,585. Table 118 presents a summary of the Institute’s


Table118: Income Statement for 2011

Income 2011

GH¢

2010

GH¢

%

Change

Internally General Fund 4,439,009 1,473,436 201.3

Other Income 128,638 48,867 163.2

Donated Assets 18,872 - -

Total Income 4,586,519 1,522,303 201.3

Expenditure

Personnel Emoluments 793,273 422,858 87.6

Administrative Expenses 752,002 307,334 144.7

Service Expenses 2,466,211 1,000,696 146.4


Surplus / (Deficit) 575,033 (208,585) (375.7)


GH¢4,586,519 in 2011. Internally Generated Fund comprising

receipts from rental, collaborations and academic programme

accounted for 96.8% of total income for the year. Interests on Bank

Accounts, Proceeds from Sale of ILGS Journals, ICT Training and

Consultancy services accounted for the rise in other income.

1265. Total Expenditure went up by 131.8% from GH¢1,730,888 in

2010 to GH¢4,011,486 in 2011. The rise was due to a 144.7% and

146.4% increase in Administrative and Service Expenses respectively.

Increases in Depreciation charge and Audit fee accounted for the rise

in Administrative Expenses whilst the rise in expenses on Training,

Workshops and Conferences, Travel and Transportation and

Publications contributed to the increase in Service Expenses.


Financial Position

1266. Table 119 shows a summary of the Institute’s financial position

as at the end of the year reviewed.


Item 2011

GH¢

2010

GH¢

%

Change


Current Assets 531,150 93,156 470.2


Net Current Assets 412,269 (84,742) (586.5)

Net Assets 610,806 (39,715) (1,638)


1267. Non-Current Assets increased by 340.9% from GH¢45,027 in

2010 to GH¢198,537 in 2011. The increase was due to the acquisition

of fixed assets within the year.

1268. Current Assets rose by 470.2% from GH¢93,156 in 2010 to

GH¢531,150 in 2011. This was as a result of increases in Debtors and

Bank and Cash Balances. Tax Credit Debtors largely accounted for

increase in debtors.

1269. Current Liabilities on the other hand decreased by 33.2% from

GH¢177,898 in 2010 to GH¢118,881 in 2011. This was due to

reduction in Creditors and Accrued Liabilities.

1270. There was a significant improvement in the Institute’s current

ratio as it ended the year with 4.5:1 beginning from 0.5:1. This shows

that the Institute can meet its short-term obligations when they fall

due.



MINISTRY OF TRANSPORT

GHANA AIRPORTS COMPANY LIMITED

Introduction


Airports Company Limited for the year ended 31 December 2011

Operational results

1272. The Company’s operations for the year under review resulted

in a significant Net profit of GH¢29,569,863 as against

GH¢15,296,888 recorded in the previous year, representing a rise of

93.3% mainly because of non-deduction of income tax expense.

Presented in Table 120 are the performance indicators.


Total Income of the Company registered a 32.1% increase, improving

from GH¢55,483,650 in 2010 to GH¢73,304,299 in 2011. The

components of this were operating income and other operating

income. Operating Income contributed significantly to the Total

Income by 97.7% whilst Other Operating Income accounted for the

remaining 2.3%. The rise in Operating Income was mainly due to

increases in Airside, Airport passenger service charges, Airport pass

Income 2011

GH¢

2010

GH¢

%

Change

Operating Income 71,635,416 52,355,828 36.8

Other Operating Income 1,668,883 3,127,822 (46.6)

Total Income 73,304,299 55,483,650 32.1

Expenditure


Gen. & Administrative Exp. 6,652,364 7,020,124 (5.2)

Finance Costs 165,449 56,305 193.8

Income Tax Expense _ _ _


Net Profit 29,569,893 15,296,888 93.3


Royalties and Car Park receipts. However, the significant drop in

Interest Income and Exchange Difference was the cause of the fall in

Other Operating Income.

1273. Total Expenditure registered a 8.8% increase from

GH¢40,186,762 in 2010 to GH¢43,734,406 in 2011. This was mainly

due to increases in Operating Expenses and Finance Cost. Staff cost,

contract services, utility cost and Training Cost (Local /Foreign)

accounted for the high increase in operating expenses. Administrative

expenses on the other hand decreased by 5.2% due to significant

reduction in printing cost, Hajj Operations costs, Medical Expenses,

Legal fees and consultancy charges.

Financial Position

1274. Table 121 provides the financial position of the company as at

31 December 2011.


2011

GH¢

2010

GH¢

%

Change

Non- Current Assets 148,468,540 127,585,485 16.4

Current Assets 42,207,172 23,627,321 78.6


Non-Current

Liabilities

96,921,471 88,436,795 9.6

Net Assets 65,835,779 36,265,886 81.5


1275. The Company’s Non-Current Assets which stood at

GH¢127,585,485 in 2010 went up by 16.4% to register GH¢

148,468,540 in 2011. This was due to the purchase of additional Fixed

Assets and increase in Investments. Included in Property, Plant and

Equipment are Assets held under Finance lease agreement with

Ecobank Ghana Limited.



1276. Current Assets also increased from GH¢23,627,321 in 2010 to

GH¢42,207,172 in 2011 representing 78.6% rise. This rise was mainly

due to increases in the year end Bank Balance and Accounts

Receivables.

1277. Current Liabilities increased by 5.3% from GH¢26,510,125 in

2010 to GH¢27,918,462 in 2011. The rise was due to increases in

Bank Overdraft facilities granted by Stanbic Bank and Barclays Bank

during the year to augment working capital over a period of twelve

months.

1278. Though the current ratio improved in 2011 to 1.5: 1 (2010;

0.9:1) it fell below the bench mark of 2:1. This depicts that the

Company cannot meet its short- term debts as and when they fall due.

MANAGEMENT ISSUES

Additions to Property, Plants and Equipment

1279. We observed that Ghana Revenue Authority (GRA) was not

notified of the additions to Property, Plants and Equipment for the

year ended 31December, 2011 as required by the Internal Revenue

(Amended) Act, 2002 (Act 622 s.19(a).

1280. The Company would be paying a Corporate Tax of

GH¢285,465.18 (25% of GH¢1,141,860.73) which it would have

avoided. The Table below shows details:

Class of Assets Pool/ Rate (a) Cost of

Assets

GH¢ (b)

Capital

Allowance

(a & b)

Land & Building Pool 5 (10%) 743,213.30 74,321.33

Furniture &Fittings Pool 4 (20%) 9,030.00 1,806.00

Plant & Machinery Pool 2 (30%) 4,221,787.74 844,357.54

Motor Vehicles Pool6 305,250.88 91,575.26

Intangible assets

(software)

389,401.80 129,800.60

Total 5,668,683.72 1,141.860.73


1281. Failure to notify GRA of additions to Property, Plants and

Equipment within one (1) month after it has been put into use will

amount to denial of Capital Allowance (CA) in the year of additions.

1282. We recommended that the Financial Accountant takes up the

responsibility of informing the GRA of additions as he maintains the

Assets Register.

1283. Management indicated that it would file the returns

accordingly.

GHANA MARITIME AUTHORITY

Introduction


Maritime Authority for the year ended 31 December, 2011.

Operational results

1285. The operational results for the year ended 31 December, 2011

are sumarised in Table 122.


2011

GH¢

2010

GH¢

%

Change

Income 10,841,833 9,594,516 13.0

Expenditure

General & Admin. Expns 10,228,671 8,917,852 14.7

Director Emoluments 335,719 288,705 16.3

Audit Fees 36,000 25,000 44.0

Depreciation 182,919 229,833 (20.4)


Surplus/(Deficit) 58,524 133,126 (56.0)

1286. Total income of the Authority increased from GH¢9,594,516

in 2010 to GH¢10,841,833 in the year under review. The rise of

13.0% was as a result of increase in the collection of service charge

during the year by Ghana Shippers Council.



1287. Total Expenditure also registered an increase of 14.0% from

GH¢9,461,390 in the previous year to GH¢10,783,309 in the current

year. A rise in General & Administrative expenses and an increment

in staff salaries and Board allowances by 10% during the year

accounted for the increase in total expenditure.

1288. The operations of the Authority ended with a 56.0% fall in

surplus from GH¢133,126 in 2010 to GH¢58,528 in 2011.

Financial position

1289. A summary of the Authority’s financial position is presented

in Table123.


2011

GH¢

2010

GH¢

%

Change


Investment 213,999 394,367 (45.7)

799,332 1,123,616 (28.9)

Current Assets 4,333,310 3,845,026 12.7




Total Assets 4,853,762 4,795,238 1.2

1290. Non-Current Assets fell by 19.7% to GH¢585,333 in 2011

(2010: GH¢729,249). This was due to a write off on three of the

Authority’s motor vehicles which have been unserviceable for the past

two years and were awaiting disposal.

1291. Investment also fell from GH¢394,367 in the previous year to

GH¢213,999 in the Current year. The fall was as a result of

disinvestment of funds to meet operational needs of the Authority.

1292. Current Assets however experienced an increase of 12.7%,

from GH¢3,845,026 in 2010 to GH¢4,333,310 in the year under


review. A rise in Debtors, Cash and Bank balances caused the upward

movement in amount.

1293. Current Liabilities increased significantly by 60.8% to

GH¢278,880 in 2011 (2010: GH¢173,404). The increase was as a

result of a rise in Sundry Creditors, Electricity and Water,

Accountancy fees as well as SSNIT Contribution and audit fees

payable.

1294. The Authority recorded a current ratio of 15.5:1 in 2011 as

against 22.2:1 for 2010 and this continued to show a healthy liquidity

position.

MINISTRY OF FOOD AND AGRICULTURE

SMALL FARMS IRRIGATION PROJECT

Introduction

1295. This report relates to the audited accounts of Small Farms

Irrigation Project for the year ended 31 December 2009.

Operational Results

1296. Total funds received during 2009 were US$869,129. This was

made up of direct transfer from the Arab Bank for Economic

Development in Africa (BADEA). Table 124 shows total transactions

for the year and the cumulative position to date.

Table 124: Statement of financing and expenditure for 2009

Resources Total

Transaction

For the year

US$

Cumulative

to date

US$

Direct Transfer from

BADEA

868,129 5,764,620

Counterpart Funding (GOG) - 1,794,166

Internally Generated Fund - 4,863

Total Resources 868,129 7,563,649



Expenditure

Contractors Fee 384,146 -

Farmers Support Services 437,113 -

Project Implementation Unit 13,432 -

Bank Transfer 480 -

Consult Fees 32,958 -

Civil Works - 5,141,380

Consultant/Technical

Services

- 868,899

Vehicles - 572,011

Equipment - 180,478

Furniture/Fixtures/Fittings - 5,640

Adm. & Operational

Expenses

- 814,420

Total 868,129 7,582,828

Balance - (19,179)

1297. Total Expenditure for the year 2009 amounted to US$868,129.

Prominent among the expenditure were cost of contractors fee which

represented 44.3% of total expenditure and cost of Farmers Support

Services which represented 50.4%.

Financial Position

1298. Presented in Table 125 is the Project’s financial position as at

31 December 2009.

Table125: Balance sheet as at 31 December 2009

Assets 2009

US$

2008

US$

%

Change

Project Expenditure 7,582,828 6,696,514 13.2

Current Assets 201 36,964 (99.2)


Net Current Liabilities (19,179) (994) 1,829.5

Net Assets 7,563,649 6,695,520 13.0


1299. Fixed Assets mainly made up of Project Expenditure at the

close of 2009 amounted to US$7,582,828 as against US$6,696,514

recorded in 2008 representing a 13.2% increase. This was due to

additions within the year.

1300. Current Assets decreased by 99.5% from US$36,964 in 2008 to

US$201 in 2009.

1301. Current Liabilities also decreased by 48.9% from US$37,958 in

2008 to US$19,380 in 2009.

MANAGEMENT ISSUES

Land Agreement

1302. We noted during our audit that land agreement had been signed

and sealed for all the various small farm irrigation schemes with the

exception of Doedorkope and Akurobi irrigation schemes.

1303. Without the completion of all legal requirements there could be

litigation on the lands in question which may affect the proper running

of the schemes.

1304. We advised management to speed up the process of having the

land agreement signed and sealed by all interested parties to avoid any

event that would adversely affect the projects.

Fixed Assets

1305. We observed that the fixed assets of the project were being

used by both Ghana Irrigation Development Authority (GIDA) and

Small Farm Irrigation Project (SFIP) but movements of the assets are

not well monitored, for instance a survey equipment belonging to

SFIP but used by GIDA was sent for repairs without the knowledge of

the management of SFIP.

1306. We also observed that some assets of SFIP had been embossed

by GIDA while others have not been embossed at all. Most of the

assets were not recorded in the assets register because they were not



covered with documents. We observed that six motor bikes financed

by BADEA in 2007 were still in stock at the time of the audit in

August 2011. The bikes were very rusty at the time.

1307. This situation can lead to assets being stolen. It would be

difficult to claim ownership of assets which have been embossed by

GIDA. It would encourage staff to mishandle and use the fixed assets

privately. The motor bikes might break down completely if it is not

maintained and put to use.

1308. We recommended that fixed asset register should be updated

by providing all the required information. Any asset not embossed

should be marked with an appropriate identification number. The

purchase and movement of asset should be recorded and monitored at

the store. The motorbikes should be maintained and distributed

immediately to the various schemes to enhance work.

Dordoekope

1309. We observed that the tractor for this scheme had not been

embossed with the Project identification mark. Although it is being

used commercially and had made a net revenue of GH¢2,845.00 as at

the time of our visit, we noted that no record was kept on monies

collected by way of receipts issued as well as invoices and receipts on

expenses incurred.

1310. There is the tendency for the tractor to be used for purposes

other than the required intent.

1311. We recommended that the Project Implementation Unit (PIU)

must ensure that proper records are kept on funds generated from the

commercial use of all assets on site. All fixed assets must be

embossed with the project identification mark.


MINISTRY OF ENVIRONMENT, SCIENCE AND

TECHNOLOGY

SOIL RESEARCH INSTITUTE (CSIR)

Introduction

1312. This report relates to the audited accounts of the Soil Research

Institute for the period 1 January 2009 to 31 December 2010.

Operational Results

1313. Operations for 2010 ended with an excess expenditure over

income of GH¢152,534 as against a deficit of GH¢59,440 in 2009.

This represented an increase of 156.6% over the previous year figure.

Table 126 is a summary of the Institute’s comparative performance

indicators for 2010 and 2009.


Income

2010

GH¢

2009

GH¢

%

Change

Government Subvention 4,172,082 3,294,508 26.6

Internally Generated Fund 149,412 154,923 (3.6)

Total Income 4,321,494 3,449,431 25.3

Expenditure

Employment Costs 3,883,582 2,996,521 29.6

Repairs & Maintenance 49,596 54,925 (9.7)



Administrative & General

Expenses

406,611 364,267 11.6


Surplus/(Deficit) ( 152,534) (59,440) 156.6

1314. Total Income for the period increased by 25.3% from

GH¢3,449,431 in 2009 to GH¢4,321,494 in 2010. This was due to an

increase in subvention from the Ghana Government by 26.6%.

Internally Generated Fund on the other hand fell by 3.6% due to

reductions in sale of maps, produce and laboratory analysis revenue.



1315. Total Expenditure also recorded an increase of 27.5% from

GH¢3,508,871 in 2009 to GH¢4,474,028 in 2010. Employment Cost

and Travelling and Transport expenses mainly accounted for the rise.

Survivor’s pension and gratuity and upward review of allowances

accounted for the increase in Employment cost. Vehicle running

expenses and Travelling Costs were the major items that contributed

to the increase in Travelling and Transport Expenses.

Financial Position

1316. Presented in Table 127 is the financial position of Institute as at

31 December 2010.


Item

2010

GH¢

2009

GH¢

%

Change

Non-current Assets 334,138 364,017 (8.2)

Current Assets 283,938 240,780 17.9


Net Current Assets (61,794) 60,861 (201.5)

Net Assets 272,344 424,878 (35.9)


1317. Non-current Assets of the Institute declined from GH¢364,017

in 2009 to GH¢334,138 in 2010, a decrease of 8.2% as a result of

depreciation charges.

1318. Current Assets, however, increased by 17.9% from

GH¢240,780 in 2009 to GH¢283,938 in 2010. This was mainly due

to increases in Cash and Bank balances.

1319. Current Liabilities increased significantly by 92.2% from

GH¢179,919 in 2009 to GH¢345,732 in 2010. Increases in Creditors,

Accruals and other Credit Balances accounted for the rise. Prominent

amongst the credit balances are superannuation fund, PAYE, SSNIT

and external audit fees.


1320. The liquidity position of the Institute stood at 0.8:1 in 2010 as

compared to 1.3:1 in 2009. This indicates its inability to meet its

short term obligations as and when they fall due.

MANAGEMENT ISSUES

Insurance of office building

1321. We observed that the Institute’s office building had not been

insured. We indicated to management that in case of any eventuality,

especially a fire outbreak, the Institute would incur a huge loss

without any compensation. We therefore advised that the office

buildings should be insured without delay.

SCIENCE AND TECHNOLOGY POLICY

RESEARCH INSTITUTE (CSIR)

Introduction

1322. This report relates to the audited accounts of the Science and

Technology Policy Research Institute (CSIR) for the financial years

ended 31 December 2010 and 2011.

Operational Results

1323. Operations of the Institute for the year under review closed

with a deficit of GH¢71,863 as compared with a deficit of GH¢70,492

recorded in 2010, showing a marginal increase of 1.9% in deficit.

Presented in Table 128 are the comparative performance indicators for

the period reviewed.


Income

2011

GH¢

2010

GH¢

%

Change

Government Subvention 681,884 625,867 9.0

Other Income 505,874 654,173 (22.7)

Total Income 1,187,758 1,280,030 (7.2)

Expenditure

Personnel Emoluments 678,951 535,731 26.7

Administration Expenses 181,412 164,570 10.2



Service Expenses 348,584 603,835 (42.3)

Depreciation 46,858 43,333 8.1

Audit Fees 3,816 3,053 25.0


Surplus/(Deficit) (71,863) (70,492) 1.9

1324. Although Government Subvention released to the Institute

increased marginally by 9.0% from GH¢625,867 in 2010 to

GH¢681,884 in 2011, Other Income, made up of project income,

auditorium hiring, exchange gain, interest received or investment,

dropped by 22.7% from GH¢654,173 in 2010 to GH¢505,874 in 2011,

resulting in a decrease of 7.2% in total income to GH¢1,187,758

(2010: GH¢1,280,030). The decline in Other Income was because

there was a total fall in project income from GH¢600,194 or 31.5% in

2010 to GH¢411,153.

1325. Total Expenditure also decreased marginally by 6.7% from

GH¢1,350,522 in 2010 to GH¢1,259,621 in 2011. Personnel

Emolument increased by 26.7% from GH¢535,731 in 2010 to

GH¢678,951 in 2011, whilst Service Expenses dropped to

GH¢348,584 in 2011 from GH¢603,835 in 2010, representing a fall of

42.3%. Administration Expenses however went up by 10.2%.

Financial Position

1326. Shown in Table 129 is the Institute’s financial position as at 31

December 2011.

Table 129: Balance Sheet as 31 December 2011

2011

GH¢

2010

GH¢

%

Change


Current Assets 455,501 254,714 78.8


Net Current Assets (5,885) 45,941 (112.8)



1327. The Non-current Assets of the Institute declined from

GH¢173,380 in 2010 to GH¢144,716 in 2011, representing a fall of

16.5%. The decrease was due to depreciation charged for the year.

1328. Current Assets on the other hand increased by 78.8% from

GH¢254,714 in 2010 to GH¢455,501 in 2011. The increase was due

to rise in Cash and Bank balances during the year.

1329. Current Liabilities also registered an increase of 121.0% from

GH¢208,770 in 2010 to GH¢461,386 in 2011. This was due to a rise

of GH¢253,157 or 125.7% in sundry creditors.

1330. The Institute’s liquidity position of 1.0:1 (2010:1.2:1) shows its

inability to pay its short term debts when they are due.

ENVIRONMENTAL PROTECTION AGENCY

Introduction

1331. This report relates to the audited accounts of the

Environmental Protection Agency for the year ended 31 December

2011.

Operational results

1332. Total income for the year under review increased by 20.4% to

GH¢10,711,862 from an amount of GH¢8,895,300 in the previous

year. Internally Generated Fund (IGF) and other income which

increased by 125.3% and 146.1% respectively accounted for the rise.

Prominent amongst the contributors in the IGF were receipts of EIA

permits fines whist increase in income from incentive package largely

accounted for the rise in other income.

1333. The performance indicators of the Agency for the review

period are shown in Table 130.



Table130: Income statement for 2011

Income 2011

GH¢

2010

GH¢

%

Change

Govt. Subvention 2.836,151 3,113,214 (8.9)

Grants 2,736,225 2,845,029 (3.8)

Internally Generated Fund 4,439,181 1,970,503 125.3

SBS – NREG Fund 427,395 855,657 (50.1)

Other Income 272,910 110,897 146.1

Total Income 10,711,862 8,895,300 20.4

Expenditure


Service Activities 2,919,794 2,102,351 38.9

General & Admin. Exp. 3,630,546 3,521,475 3.1

Financial & Professional

Chargers

44,200 37,624 17.5


Surplus/(Deficit) 1,027,848 148,738 591.0

1334. Total Expenditure for 2011, however increased by 10.7% from

GH¢8,746,562 in 2010 to GH¢9,684,014 in the current year. Service

activities shot up by 38.9% largely due to increases in the expenses on

Staff Training and Development, Vodafone Project, Monitoring and

Investigation, Advertisement, Travelling and Transport and Vehicle

Running. Financial and Professional charges also rose by 17.5% due

to a 34% rise in Audit Fees and expenses.

1335. The improvement in surplus registered by 591.0% at the end of

2011 was as a result of increase in internally generated fund and other

income.

Financial position

1336. Details of the Agency’s financial position as at 31 December

2011 are shown in Table131.


Table131: Balance Sheet as at 31 December 2011

2011

GH¢

2010

GH¢

%

Change


WIP 5,377,378 3,847,868 39.7

11,653,502 11,590,172 0.5

Current Assets 1,232,220 1,299,050 (5.1)


Net Current Assets 902,512 1,269,044 (28.9)

Net Assets 12,556,014 12,859,216 (2.4)


1337. Non-Current Assets which stood at GH¢7,742,304 in 2010

decreased to GH¢6,276,124 in 2011, recording a fall of 18.9%. The

fall was due to depreciation charge for the year.

1338. Work-in-progress on the other hand registered a rise of 39.7%

from GH¢3,847,868 in the previous year to GH¢5,377,378 in the

current year. This was attributed to construction of EPA hostel and

extension of Regional offices.

1339. Current Assets recorded a decrease of 5.1% to GH¢1,232,220

in 2011 from a previous year’s amount of GH¢1,299,050. A

reduction in Bank and Cash Balances resulted in the fall.

1340. There was a significant increase in current liabilities of 998.8%

from GH¢30,006 in 2010 to GH¢329,708 in 2011. The sharp increase

in Accounts payable and accruals was occasioned by the introduction

of SEA workshops and seminars and National Environmental Fund

which were not in the previous year’s balance.

1341. Though the Agency’s current ratio fell over the period from

43.3: 1 in 2010 to 3.7:1, it still puts the Agency in a position to meet

its short-term obligations when they fall due.



INSTITUTE OF INDUSTRIAL RESEARCH (I.I.R)

(COUNCIL FOR SCIENTIFIC AND INDUSTRIAL

RESEARCH)

Introduction

1342. This report relates to the audited accounts of the Institute of

Industrial Research for the year ended 31 December 2011.

Operational results

1343. Operations for the year under review ended with a deficit of

GH¢56,426 as against a surplus of GH¢281,410 in 2010. A summary

of the Institute’s performance for the year under review is shown in

Table132.


Income1 2011

GH¢

2010

GH¢

%

Change

Subvention from Govt. of

Ghana

2,548,687 2,481,700 2.7

Internally Generated Funds 314,623 65,722 378.7

Total Income 2,863,310 2,547,422 12.4

Expenditure

Personnel Emoluments 2,345,821 1,804,860 30

Repairs & Maint. Expense 48,728 16,396 197.2

Financial Charges 60 144 (58.3)


Administrative & General

Expenses

488,380 417,570 17


Surplus/(Deficit) (56,426) 281,410 (120.1)

1344. Total Income increased by 12.4% from GH¢2,547,422 in 2010

to GH¢2,863,310 in 2011. This was mainly due to a 378.7% increase

in Internally Generated Funds. Income from Material and

Manufacturing Programme, Environmental Management Programme

and Sundry Income largely accounted for the increase in IGF.


1345. Total Expenditure also rose by 28.8% from GH¢2,266,012 in

2010 to GH¢2,919,736 in 2011. This was as a result of increases in

Personnel Emoluments, Repairs & Maintenance, Travelling and

Transport and Administrative and General Expenses. Salaries and

Allowances accounted for the increase in Personnel Emoluments

whilst renovation on Laboratory, Office and Workshop buildings

contributed to the rise in Repairs and Maintenance Expenses.

Financial Position

1346. The financial position of the Institute is shown in Table 133.


2011

GH¢

2010

GH¢

%

Change

Non-Current Assets 295,033 347,013 (15)

Current Assets 977,735 625,781 56.2



Net Assets 489,497 545,923 (10.3)


1347. Non-current Assets decreased from GH¢347,013 in 2010 to

GH¢295,033 in 2011, registering a reduction of 15%. This was as a

result of depreciation charged for the year.

1348. Current Assets however increased by 56.2% from

GH¢625,781 in 2010 to GH¢977,735 in 2011. The increase was

mainly due to increases in accounts receivable and cash and bank

balances.

1349. Current Liabilities also went up from GH¢426,871 in 2010 to

GH¢783,271 in 2011 a rise of 83.5%, as a result of an increase in

Accounts Payable and a Deposit held in EDIF fund at the year end.

1350. The Institute’s liquidity ratio of 1.2:1 (2010:1.5:1) shows that

the Institute might not be able to settle its short term obligations as

and when they fall due.



ENVIRONMENTAL PROTECTION AGENCY

NATIONAL ENVIRONMENT FUND (NEP)

Introduction

1351. This report relates to the audited accounts of the Environmental

Protection Agency (NEP) for the year ended 31 December 2011.

Operational results

1352. Total income which was made up of Income from Levies and

other income increased by 73.8% from GH¢6,265,247 in 2010 to

GH¢10,886,527 in 2011. The rise was mainly due to the approval of

increases in fees and charges by Parliament under the fees and charges

(amendment) Instrument, 2011 (LI.1986). EIA/Exploration Permit

which rose from GH¢3,968,262 in the previous year to GH¢8,553,653

in the year under review accounted mainly for the sharp increase.

1353. The operational results for the year ended 31 December 2011

are provided in Table 134.

Table 134: Income statement for 2011 Income 2011

GH¢

2010

GH¢

%

Change

Income from Levies 10,335,188 5,579,645 85.2

Other Income 551,339 685,602 (19.6)

Total Income 10,886,527 6,265,247 73.8

Expenditure

Monitoring and Investigation 649,850 218,660 197.2

Environmental Education 378,036 209,465 80.5

Human Resource

Development

327,532 50,852 544.1

Processing & Management

Fees

41,018,722 1,904,585 111.0

Administrative & Other

Expenses

799,030 161,640 394.3


Surplus (Deficit) 4,713,357 3,720,045 26.7


1354. Total expenditure increased largely by 142.5% from


due to general rise in all expenditure items.

1355. The fund registered a surplus of GH¢4,713,357 in the current

year as against GH¢3,720,045 in 2010; recording an increase of

26.7%.

Financial position

1356. Presented in Table 135 is the sumarised balance sheet as at 31

December 2011.


2011

GH¢

2010

GH¢

%

Change


Current Assets 13,632,602 8,321,624 63.8

Current Liabilities 913,305 36,722 2,387.1


Net Assets 13,534,013 8,820,655 53.4


1357. Non-Current Assets rose by 52.1% from GH¢535,753 in 2010

to GH¢814,716 in 2011. This was due to additions to capital grant

during the year.

1358. Current Assets also increased by 63.8% to GH¢13,632,602

from an amount of GH¢8,321,624 in the previous year. Additions to

investments accounted for the rise.

1359. Current liabilities recorded a sharp rise of 2,387.1% from

GH¢36,722 in 2010 to GH¢913,305 in the year under review. The

high increase was as a result of a rise in accounts payable, accrued

charges and Bank overdraft.



1360. The liquidity position of the fund as measured by a current

ratio of 14.9:1 (2010:226.6:1) remained above the benchmark of 2:1,

meaning it is in a favourable position to meet its short term


MANAGEMENT ISSUES

Debtors – GH¢2,350

1361. We observed that the following balances were outstanding at

the year end and no demands had been made on the customers to settle

their indebtedness:

Year GH¢

Biotech Centre 2008 100

Zoomlion 2009 1,000

CRSP Peanut Project 2010 1,250

2,350

1362. Consequently, working capital had been locked up.

1363. We recommended that these debtors should be contacted to

settle their indebtedness.

FORESTRY RESEARCH INSTITUTE OF GHANA

Introduction

1364. This report relates to the audited accounts of Forestry Research

Institute of Ghana for the year ended 31 December 2011.

Operational Results

1365. The Institute’s activities ended the year with a deficit of

GH¢87,073 compared with a 2010 surplus of GH¢344,349

representing a 125.3% decline. The details of the Institute’s

performance are provided in Table 136.



Income

2011

GH¢

2010

GH¢

%

Change

Government

Grant/Subvention

4,352,379 3,773,076 15.4

Other Income 429,425 341,521 25.7

4,781,804 4,114597 16.2

EXPENDITURE


General and Admin.

Expenses

368,809 316,515 16.5

Repairs & Maintenance 142,148 103,353 37.5


Research & Service Activity

Exp.

45,356 35,478 27.8

4,868,877 3,770,248 29.1

Surplus/(Deficit) (87,073) 344,349 (125.3)

1366. Total Income for the year under review was GH¢4,781,804

compared with the 2010 figure of GH¢4,114,597 thereby registering a

16.2% increase over the previous year’s figure. Government

Grant/Subvention which rose by 15.4% was made up of receipts for

Recurrent Grant and Service Activity Grant. The Other Income which

went up by 25.7% was income from Selling Activities, Services and

Other activities.

1367. Total Expenditure also increased by 29.1% from

GH¢3,770,248 in 2010 to GH¢4,868,877 in 2011. The rise was due to

increases in Personnel Emoluments, General and Administrative

Expenses, Repairs and Maintenance and Travelling and Transport.

The 29.6% rise in Personnel Emoluments was mainly due to increases

in staff salaries and payments of various allowances to staff. A 47.3%

rise in Travelling and Transport cost was due to increases in vehicle

running expenses and right subsistence allowance paid. Vehicle

repairs and maintenance of GH¢71,226 (2010: GH¢29,315) accounted

for 37.5% rise in Repairs and Maintenance cost.



Financial Position

1368. Summarised in Table 137 is the financial position as at 31

December 2011.


2011

GH¢

2010

GH¢

%

Change


Current Assets 1,769,784 1,202,677 47.2


Net Assets 1,376,223 1,463,296 (6.0)


1369. The Non-Current Assets which stood at GH¢564,892

registering an increase of 12.4% over the 2010 figure of GH¢502,734

was as a result of Deferred assets of GH¢64,865. This Deferred Asset

was contributions made for the establishment of Tropenbos Research

Project.

1370. Current Assets rose by 47.2% from GH¢1,202,677 in 2010 to

GH¢1,769,784 in 2011. A significant increase of 64.1% in Accounts

Receivable accounted for the rise.

1371. Current Liabilities also increased significantly by 295.9% from

GH¢242,115 in 2010 to GH¢958,453 in 2011. This was as a result of

deductions from salaries yet to be paid to various Sectors such as

Research Unit and State Institutions and others.

1372. The liquidity as shown by the current ratio dropped

significantly from 5.0:1 in 2010 to 1.8:1 in 2011, indicating that, the

Institute would not be able to meet its short-term obligations when

they fall due.


MANAGEMENT ISSUES

Fixed Assets Register

1373. We observed that, the Institute did not have a comprehensive

register for its fixed assets to indicate their locations, cost, useful life

and net book value. Some assets were without identification marks.

There was also no clear evidence of periodic verification of fixed

assets to confirm their existence.

1374. We noted that the assets could therefore be subjected to

unauthorized use or disposal, pilfering and theft without being

noticed.

1375. We recommended that management should take appropriate

steps to ensure that the fixed assets register is updated with relevant

information. It should be the policy of the Institute to conduct

physical verification of fixed assets to confirm their location,

existence and condition.

ANIMAL RESEARCH INSTITUTE

Introduction

1376. The report covers the audited accounts of the Animal Research

Institute of Council for Scientific and Industrial Research for the year

ended 31 December 2011.

Operational Results

1377. The Institute realized a Total Income of GH¢4,475,448 in

2011, representing an increase of GH¢1,375,255 or 44.4% over the

2010 figure of GH¢3,100,193. The sharp rise in Income was mainly

due to a 50.5% increase in Government Grants for the year, its major

component; whilst Other Income, the minor component went down by

25.7%. The decrease in other income was as a result of a fall in

Livestock Valuation from GH¢215,395 in 2010 to GH¢87,861 in

2011. The performance indicators are shown in Table 138.




Income

2011

GH¢

2010

GH¢

%

Change

Grants 4,290,166 2,850,662 50.5

Other Income 185,282 249,531 (25.7)

Total Income 4,475,448 3,100,193 44.4

Expenditure

Estab. & Admin. Expenses 275,869 229,055 20.4

Employment Cost 3,813,398 2,948,634 29.3

Repairs and Maintenance 56,738 26,924 110.7

Travel and Transport 119,651 87,085 37.4

Principal and Prof. Charges 6,195 8,658 (28.4)

Depreciation Charges 48,555 43,604 11.4


Surplus/(Deficit) 155,042 (243,767) (163.6)

1378. Total Expenditure also went up by 29.2% from GH¢3,343,960

in 2010 to GH¢4,320,405 in 2011. The rise was largely due to

increases in Establishment and Administrative Expenses, Employment

Cost, Repairs and Maintenance; and Travel and Transport cost. A

29.3% rise in Employment Cost was mainly due to increases in staff

salaries and allowances. Increases in repairs and maintenance of office

equipment, motor vehicle, office buildings and laboratory furniture

and fittings accounted for 110.7% rise in Repairs and Maintenance

cost. A 37.4% rise in Travel and Transport cost was due to high cost

of running the Institute vehicles and increase vehicle insurance

premium.

1379. However, the Institute’s operational activities for 2011 ended

with a surplus of GH¢155,042 as against a deficit of GH¢243,767 in

2010, a decrease in deficit of 163.6%.

Financial Position

1380. Provided in Table 139 is the sumarised balance sheet as at 31

December 2011.



2011

GH¢

2010

GH¢

%

Change


Current Assets 1,817,143 1,251,341 45.2



1381. The Non-current Assets dropped marginally by 1.0% from

GH¢220,350 in 2010 to GH¢218,170 in 2011. The decrease was due

to depreciation charged for the period.

1382. Current Assets, however, increased by 45.2% from an amount

of GH¢1,251,341 in 2010 to GH¢1,817,143 in 2011. The upward

movement in Accounts Receivable from GH¢385,558 in 2010 to

GH¢935,004 in 2011 resulted in the increase.

1383. Current Liabilities also registered a rise of 37.7% from

GH¢1,198,519 in 2010 to GH¢1,650,624 in 2011. An increase in

sundry creditors accounted for the rise.

1384. The Institute’s liquidity position did not change over the period

as indicated by the current ratio of 1.1:1 for 2011 (2010: 1.0:1),

indicating that the Institute cannot meet its short term obligations

when they fall due.

MANAGEMENT ISSUES

In appropriate treatment of Biological Assets

1385. We uncovered during our examination of clients’ accounts that

biological assets, i.e. livestock are included in other poultry products

and general stores as stocks.

1386. The International Accounting Standards (IAS 41) provides that

Biological Assets in so far as they relate to agricultural activity should

be disclosed separately on the face of the account.



1387. The treatment contravenes the requirements of International

Accounting Standards and also the given account fall short of showing

a true and fair view.

1388. We therefore recommended that, all biological assets, should

subsequently be disclosed separately on the face of the account and

the requirements of International Accounting Standards be complied

with.

CROPS RESEARCH INSTITUTE

Introduction

1389. This report relates to the audited accounts of the Council for

Scientific and Industrial Research’s (CSIR) Crops Research Institute

for the year ended 31 December 2011.

Operational Results

1390. Total Income for the period under review registered a growth

of 30.3% from GH¢4,324,801 in 2010 to GH¢5,637,166 in 2011.

Recurrent Grant of GH¢5,429,675 and Other Income of GH¢207,491

constituted the total income for the year. Whilst Recurrent Grant

recorded a growth of 32.9% over the previous year figure, the Other

Income registered a drop of 13.4% over the previous figure.

1391. The operational results are shown in Table 140.


Income

2011

GH¢

2010

GH¢

%

Change

Recurrent Grant 5,429,675 4,085,154 32.9

Other Income 207,491 239,647 (13.4)

Total Income 5,637,166 4,324,801 30.3

Expenditure

Establishment & Admin.

Expenses

333,322 243,739 36.8

Employment Cost 4,620,004 3,582,242 30.0


Travelling and Transport 192,165 215,257 (10.7)

Repairs and Maintenance 124,484 127,240 (2.2)

Financial and Professional

Charges

37,366 11,307 230.5

Research Expenditure 95,907 41,388 131.7


Surplus/(Deficit) 233,918 103,628 125.7


2010 to GH¢5,403,248 in 2011. This was largely due to growth in

Establishment and Administrative Expenses, Employment Cost,

Financial and Professional Charges and Research Expenditure. The

36.8% rise in Establishment and Administrative Expenses was due to

high cost of electricity bill from GH¢82,632 in 2010 to GH¢116,028

in 2011.

1393. The 30.0% rise in Employment Cost was mainly due to

increases in staff (both Senior and Junior) salaries and their

allowances such as Car maintenance, Commuted Transport, Tools,

Risk and Height allowances.

1394. A 131.7% rise in Research Expenditure was due to open day

expenses incurred only in 2011 financial year.

1395. Excess of income over expenditure disclosed a significant

increase of 125.7% from GH¢103,628 in 2010 to GH¢233,918 in

2011. This amount had since been transferred to the Accumulated

Fund Account.

Financial Position

1396. The Balance Sheet as at 31 December 2011 is shown in Table

141.




2011

GH¢

2010

GH¢

%

Change

Non-current Assets 231,462 215,024 7.6

Current Assets 2,319,425 1,412,243 64.2




1397. Non-current Assets registered an increase of 7.6% from

GH¢215,024 in 2010 to GH¢231,462 in 2011. The increase was due

to additional payment for land and buildings, and furniture, fittings

and equipment during 2011.

1398. Current Assets of the Institute recorded a 64.2% increase from

GH¢1,412,243 in 2010 to GH¢2,319,425 in 2011. Increase in Cash

and Bank balances from GH¢343,050 in 2010 to GH¢1,127,805 in

2011 accounted for the rise.

1399. Current Liabilities also went up significantly by 292.8% from

GH¢235,583 in 2010 to GH¢925,285 in 2011. The rise was due to

increases in other credit balances of accounts during the year.

1400. The current ratio stood at 2.5:1 as against 6.0:1 in 2010.

Although the liquidity position registered a significant drop, the

Institute can meet its short term debts as and when they fall due.

MANAGEMENT ISSUES

Fuel imprest not retired: GH¢345.00

1401. We noted that between May 2011 and December 2011,

management gave a total amount of GH¢4,485.00 to Maxwell T.

Mensah, as fuel imprest for the operation of the Institute’s stand-by

generator.


1402. However, there was no evidence to confirm that an imprest of

GH¢345.00 paid on PV No. 0001362 with cheque No. 293096 of

2/9/2011, had been retired by Maxwell T. Mensah. There was also no

evidence by way of fuel receipt to confirm the purchase of fuel.

1403. Our observation also showed that, there was no register or log

book or any other documentary evidence to explain how the amount

of GH¢4,140.00 covered with receipts was utilized.

1404. This might result in fuel not used in furtherance of the

Institute’s programmes.

1405. Management should ensure that proper records are kept to

account for fuel purchased for the stand-by generator. Meanwhile,

management should request Maxwell T. Mensah, Transport Officer

in-charge of the generator to account for GH¢345.00 which was not

retired. He should also produce documentary evidence such as fuel

register or log book, showing how fuel totalling GH¢4,140.00 was

utilized or distributed.

OTHER AGENCIES

NATIONAL PENSIONS REGULATORY AUTHORITY

Introduction


Pensions Regulatory Authority for the year ended 31 December 2011.

Income surplus

1407. The Authority recorded a surplus of GH¢ 199,258.50 in 2011.

However comparative analysis could not be established as the

Authority failed to prepare financial statement from its inception until

in 2011. Table 142 shows details of the performance indicators:




Income

2011

GH¢

Subvention 1,099,067.98

Donation 107,510.60

Internally Generated Funds (IGF) 87,450.00

Total Income 1,294,028.58

Expenditure

Administrative Activities 412,716.47

Service Activities 292,213.66

Investment Activities 389,839.95

Total Expenditure 1,094,770.08

Income Surplus 199,258.50

1408. Income for the period reviewed totaled GH¢1,294,028.58.

Government subvention accounted for 84.9% or GH¢1,099,067.98 of

total income in the year under review. The rest comprises Internally

Generated Fund (IGF) of GH¢87,450.00 and Donation of

GH¢107,510.60, representing 6.8% and 8.3% respectively of total

revenue.

1409. Total expenditure for the period under review amounted to

GH¢1,094,770.08. Administrative expenditure came to

GH¢412,716.47 whilst funds released for the expenditure amounted to

GH¢312,608.00 resulting in over spending of the expenditure item by

GH¢100,108.47. Though the Authority’s budget for Personnel

Emolument was not approved, the Authority expended GH¢128,946.5

on Executive salaries and contract staff allowances which was

included in the Administrative expenses.

1410. Funds released to the Authority for Service activities

amounted to GH¢396,620.03 whilst actual expenditure was

GH¢292,213.66, leaving a balance of GH¢104,406.37 on subvention

received for Service activities. Included in the expenditure was an

amount of GH¢ 96,414.40 used without authority in the payment of


contract staff allowances awaiting reimbursement from the MoFEP.

1411. Investment expenditure totaled GH¢389,839.95. An amount of

GH¢300,000.00 out of the Investment receipts was vired without

approval for the payment of rent for office accommodation. The rest

was used for the acquisition of motor bikes and computers. We

recommended that management in its future financial dealings should

comply with FAR 171(2c) which states that “virement between items

of expenditure can only be done with the approval of the Minister.

Financial position

1412. A sumarised balance sheet of the Authority as at 31 December

2011 is provided in Table 143.

Table 143: Balance sheet as at 31 December, 2011

Amount

GH¢

Current Asset 653,724.23

Current Liability 531,983.14

Net Asset 121,741.09

Accumulated Fund 121,741.09

1413. The Authority does not capitalize non-current assets. The

current assets were mainly bank balance of GH¢653,724.23 and an

advance of GH¢177,422.57 being payment in respect of executive

salaries and foreign travels yet to be reimbursed by MoFEP.

1414. Current liability comprised transfer of GH¢531,983.14 from

the Temporary Pension Fund Account (Second Tier) into the

Authority’s operational bank account for payment to fund

administrators.

1415. The liquidity position of the Authority as measured by a

current ratio of 1.2:1 is indicative that the Authority may not be in a

position to meet it short term liabilities as and when they fall due.



MANAGEMENT ISSUES

Unapproved retention of IGF

1416. Regulation 17(b) of the FAR states that “A head of department

shall ensure that all Non-Tax Revenue is immediately lodged in the

designated Consolidated Fund Transit bank accounts except in the

case of IGF retained under an enactment”.

1417. Our audit revealed that the Authority retained 100% of the IGF

amounting to GH¢87,450.00 realized during the period reviewed

without legislative approval. We also noted that the Authority did not

budget for the IGF before use, leading to non compliance with the

FAR and IGF Retention Act.

1418. The disregard of government regulation undermines controls

put in place, thus hindering effective planning and monitoring.

1419. We urged management to disclose all IGF to be generated in its

subsequent budget in accordance with FAR 159 and also seek

approval before retaining the appropriate portion of the IGF;

otherwise the revenue should be paid into the Consolidated Fund.

Meanwhile, the amount of GH¢87,450.00 realized during the year

under review should be transferred into the Consolidated Fund.

1420. Management responded that it intended to retain 100% and

had started the process with the Non Tax Revenue Division of

MoFEP.

Failure to withhold tax on allowances - GH¢3,382.50

1421. Contrary to Section 84(1) b of the Internal Revenue Act, 2000

(Act 592), the Authority failed to withhold the required 10% tax on

board members and sub-committee member’s sitting allowances.

1422. Consequently, a tax revenue of GH¢3,382.50 accruing to the

state was lost.


1423. We urged Management to comply with the relevant provisions

of the tax law in order to contribute to the revenue generation drive of

the state. Meanwhile, management should recover the amount in

default for remittance to the Domestic Tax Division of the GRA,

otherwise the Accountant be surcharged accordingly.

1424. Management agreed with our recommendations and stated that

henceforth, the Authority would ensure adherence to the Act.

Fuel coupons purchased not recorded in Fuel Register-

GH¢36,000.00

1425. Chapter 1604 of Stores Regulations 1984, states that “A

vehicle log book shall always be carried on the vehicle. Journeys

undertaken shall be recorded and full particulars of receipt of fuel, oil

and lubricants shall be entered up daily in the log book by the driver”

1426. On the contrary, our review revealed that purchases of fuel

amounting to GH¢36,000.00 during the year were not properly

accounted for in the Fuel Register and log books as they were not

maintained.

1427. As a result, we could not confirm whether the fuel was bought

and used for official duties. The lapse was due to management’s

failure to effectively supervise the drivers and ensure accountability.

1428. We advised Management to ensure that the schedule officer

enters all fuel purchased in the Fuel Register before issues are made.

We also recommended that management should ensure that vehicle

logbooks are maintained for all vehicles and the drivers made to

record all fuel, oil and lubricant issued whilst officers using the

vehicles certify journeys undertaken.

1429. Management however, explained that purchases were duly

recorded and that the coupon register was stolen on the 12 August,

2012.



1430. We further recommended that the Authority should liaise with

Ghana Police to obtain a formal police report.

NATIONAL DEVELOPMENT PLANNING COMMISSION

Introduction


Development Planning Commission for the year ended 31 December

2011.

Operational results

1432. The Commission realized a total income of GHȼ3,883,129.92

in 2011 as compared to GHȼ2,338,795.88 in 2010 representing an

increase of GHȼ1,544,334.04 or 66.0%. Government Subvention

remained the major source of income which contributed

GHȼ3,721,640.52 representing 95.8% of the total income. This went

up by 80.9% accounting mainly for the rise in total income. Donor

Funds, which represented 4.2% of the total income, however dropped

by 42.6% or GHȼ119,995.68 from GHȼ281,485.08 in 2010 to

GHȼ161,489.40 in 2011. The fall was as a result of the Development

Partners’ completion of the “Ghana Growth and Poverty Reduction

Strategy (GPRS II)” in 2009.

1433. Table 144 shows the comparative income and expenditure for

the period under review.


Income 2011

GH¢

2010

GH¢

%

Change

Subventions 3,721,640.52 2,056,910.80 80.9

Development Partner

Support

161,489.40 281,485.08 (42.6)

Other Income - 400.00

Total Income 3,883,129.92 2,338,795.88 66.0


Expenditure


Administrative Activities 1,870,799.57 764,097.32 144.8

Service Activities 1,245,027.03 825,633.04 50.8

Investment Activities 148,762.73 155,973.13 (4.6)

Development Partners 160,896.36 260,795.26 (38.3)


Surplus/(Deficit) 4,433.88 34,605.99 (87.2)

1434. Expenditure incurred in 2011 totaled GHȼ3,878,696.04 as

compared to GHȼ2,304,189.89 in 2010 representing an increase of

68.3%. Administration Activity Expenses formed 48.2% of the total

expenditure and this rose by 144.8% from GHȼ764,097.32 in 2010 to

GHȼ1,870,799.57 in 2011. The significant rise was due to increases

in telecommunication, electricity charges, contract printing,

stationery, office consumables, refreshment, vehicle repairs &

maintenance, vehicle running cost, commissioners’ allowance and

office building maintenance. There was also a rise of 50.8% in Service

Activity which was attributed to increases in

workshops/meetings/conference cost, local consultancy fees and

contract printing expenses.

1435. The Commission ended 2011 with a surplus of GHȼ4,433.88 as

compared with GHȼ34,605.99 in 2010, representing a fall of 87.2%.

Financial position

1436. Table 145 shows the Commission’s financial position for the

period.


Item 2011

GH¢

2010

GH¢

%

Change

Current assets 4,781.99 111,416.80 95.7

Current liabilities - - -

Net current assets 4,781.99 111,416.80 95.7



1437. The Commission does not capitalize non-current assets. The

current assets of the Commission comprised bank balances which

stood at GHȼ4,781.99 in 2011 as against GHȼ111,416.80 in 2010, a

reduction of 95.7% as a result of a decrease in the Service and

NDPC/Donor account balances.

MANAGEMENT ISSUES

Virement without approval

1438. Section 171 (2c) of the FAR 2004, (L.I 1802) states that

“Virement between items of expenditure can only be done with the

approval of the Minister”.

1439. We observed that requirements for employment into the

Commission debarred management from engaging certain category of

staff though their services were needed. As a result, during the period

reviewed, management retained National Service Personnel as

temporary staff and a total amount of GHȼ53,275.50 being funds for

Service Activities were used without approval in paying them.

1440. The lapse decreased the financial outlay for Service Activities

which negatively affected the achievement of planned programmes.

1441. In view of the Commission’s operations and demands, we

advised management to institute an appropriate Scheme of Service.

We also advised management to consider in the interim the option of

dissociating the retained National Service Personnel from the

Commission and onto the National Youth Employment Programme

(NYEP).

1442. Management accepted our recommendation and stated that the

Commission’s Scheme of Service was being reviewed to enable the

temporary staff to be permanently integrated into the structures.


INTERNAL AUDIT AGENCY

Introduction

1443. This report relates to the audited accounts of the Internal Audit

Agency for the year ended 31 December 2011.

Operational results

1444. Sumarised in Table 146 is the income and expenditure account

for 2011.

Table 146: Income statement for 2011 Income 2011

GH¢

2010

GH¢

%

Change

GOG Subvention 2,714,757 2,815,471 (3.6)

Other Income 348,068 354,540 (1.8)

Total Income 3,062,825 3,170,011 (3.4)

Expenditure

Personnel Emoluments 1,083,984 1,427,554 (24.1)

Administration 1,186,584 773,955 53.3

Service 341,063 311,414 9.5

Other Expenditure 292,288 358,149 (18.4)

Depreciation 164,475 164,476 -


Surplus/(Deficit) (5,569) 134,464 (104.1)

1445. Total Income for the year under review fell by 3.4% from

GH¢3,170,011 in 2010 to GH¢3,062,825 in 2011. A decrease in

subvention for personnel emoluments for the year, a fall in income

from on-site support training programme and non-availability of

income from World Bank Project resulted in the fall in total income.

1446. Total Expenditure however rose from GH¢3,035,547 in 2010

to GH¢3,068,394 in 2011 registering a marginal rise of 1.1%. The

increase was due to an upward movement in administration and

services expenses during the year.

1447. The Agency made a deficit of GH¢5,569 in 2011 as compared

to the surplus of GH¢134,463 made in the previous year. This was

transferred to the Accumulated Fund account for 2011.



Financial position

1448. A summary of the Balance Sheet as at 31 December 2011 is

shown in Table 147.

Table147: Balance sheet as at 31 December 2011 2011

GH¢

2010

GH¢

%

Change


Current Assets 700,737 759,677 (7.8)



Net Assets 911,511 917,081 (1.0)


1449. Non-Current Assets at the end of 2011 was GH¢241,733

(2010: GH¢178,814), an increase of 35.2%. The increase was mainly

due to acquisition of motor vehicles, furniture & fittings, Plant &

Machinery and computers during the year.

1450. Current Assets however fell by 7.8% to GH¢700,737 in the

current year as against GH¢759,677 in 2010. A reduction in stock of

fuel coupons as well as Bank and Cash balances brought about the

decline.

1451. Current liabilities shot up by 44.6% from GH¢21,410 in 2010

to GH¢30,959 in 2011 due to nonpayment of Audit fees for 2010 and

2011 accounts as well as a 19.8% rise in Sundry Creditors.

1452. Net Assets fell marginally by 1% from GH¢917,081 in the

previous year to GH¢911,511 in the current year.

1453. The liquidity position as depicted by a current ratio of 22.6:1

(2010:35.5:1) shows that the Agency would be able to meet its short-

term obligations when they fall due.