A recent survey on financial irregularities among public boards, Ministries Departments and Agencies (MDAs), as well as other public institutions from 2012 to 2014 has showed that fiscal improprieties seem to be on the rise in Ghana even though power has been given to the Auditor-General to sanction recalcitrant public officials in the form of disallowances and surcharges.
According to the IMANI’s Fiscal Recklessness Index, management failure to adhere to the rules and regulations pertaining to debt management, as well as the absence of policies on granting loans led to a whopping GH¢3,933,608,067.52, which accounted for 66.21 percent of total irregularities.
Finance Ministry
The Ministry of Finance took the top spot for financial irregularities within this category- public boards/corporations totaled just over GH¢2 billion over the three-year period, representing approximately 46 percent of total irregularities within this category.
There were outstanding debts in 2012 totaling GH¢1.39 billion.
“These outstanding debts stemmed from excess borrowings over the expected limit of GH¢826 million set by the Banking Act. From here, outstanding debt dropped to just GH¢12.5 million in 2014, a decrease of more than 99 percent, culminating from the renegotiation of the Banking Act borrowing limit.
“This huge drop also resulted in a 99 percent reduction in the ministry’s total irregularities in 2014. Cash and Payroll irregularities, which made up more than GH¢200 million combined in 2012, drop to near zero as well. While these reductions in total financial irregularities were encouraging, more attention should be paid to minimizing the occurrence of these outstanding debts in the future.”
Energy Ministry
Following closely after the Ministry of Finance with GH¢1.95 billion in total financial irregularities, representing 43 percent of the category’s cumulative irregularities, was the Ministry of Energy.
The two Ministries, Finance and Energy (out of a total of 18 Ministries) made up a whopping 89 percent of cumulative irregularities within this category.
The Ministry of Energy had a different trajectory from that of the Ministry of Finance over the three-year time period, starting from just GH¢3 million in 2012 and ballooning to GH¢1.7 billion in 2014, representing an increment of 99.9 percent.
Similar to the Ministry of Finance, outstanding debts also made up the vast majority of irregularities for most of the years. It made up 99 percent of that year’s total, particularly in 2014.
The exception was in 2013, where improperly accounted stores and procurements made up the majority of the Ministry’s irregularities.
Nonetheless, the incredibly huge increment in outstanding debts illustrates the pressing need for debt reforms within this ministry.
MDAs
At a whopping GH¢1.1 billion over the period under review, total financial irregularities for MDAs were the second highest among the four categories.
There was the huge decrease of nearly GH¢215 million in total irregularities between 2013 and 2014.
This downward trend was primarily due to the drop in irregularities by the Ministry of Finance and the Ministry of Youth & Sports in 2014, which either separately or collectively made up more than 90 percent of the irregularities in 2012 and 2013 respectively.
Cash and tax irregularities represented 54.5 percent and 24.5 percent of total irregularities respectively, with contract irregularities following (11.7 percent of total irregularities).
The trajectory in irregularities for the Ministry of Youth and Sports was interesting, with GH¢63,557.98 in 2012, spiking up to GH¢316,576,235.31 in 2013 and dropping drastically to GH¢1,353,092.48 in 2014.
The huge amount recorded by the Ministry (Youth and Sports) in 2013 was largely made up of cash and contract irregularities.
Advice
IMANI has appealed to the Auditor General to exercise the powers of surcharge and disallowance in order to curb the wanton and intentional disregard for regulations, laws and procedures.
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