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Akufo-Addo Terminates GRA’s Upstream Petroleum and Minerals Audit Contract with SML after KPMG Audit

The President has asked that, the transaction audit and external price verification services be terminated because GRA failed to adequately monitor SML in the performance of their duties enshrined in the contract.

Following the audit findings of KPMG, President Nana Addo Dankwa Akufo-Addo has directed the Ghana Revenue Authority (GRA) to terminate the upstream petroleum and minerals audit services contract awarded to Strategic Mobilization Ghana Ltd (SML).

In a five-page release issued by the communication bureau of the presidency on Thursday, April 24, the president also indicated that the audit services have not yet commenced and no payments have been made.

“The upstream petroleum audit and minerals audit services have not yet been commenced, and no payments have been made in respect of those services; therefore, they may be terminated,” the report said.

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Based on KPMG’s recommendation which suggests that the upstream petroleum and minerals audit could be a major source of income for the country, the president has directed the Ministry of Finance and the GRA to conduct a critical needs assessment first before any form of implementation is done.

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“However, given that the upstream petroleum audit and minerals audit services could prevent significant revenue leakages, the President has directed that the Ministry and GRA conduct a comprehensive technical needs assessment, value-for-money assessment, and stakeholder engagements before implementing such services,” the report indicated.

He also asked that the transaction audit and external price verification services be terminated because GRA failed to adequately monitor SML in the performance of their duties as enshrined in the contract.

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“The transaction audit and external price verification services may also be terminated. According to KPMG’s findings, GRA obtained partial value or benefit for those services. This was also due to a lack of monitoring on the part of GRA to ensure that SML performed the services as stipulated in the contracts,” it added.

The president, through the release, has also directed GRA to put stringent measures in place to monitor and ensure absolute compliance with section 33 of the PFMA in any future dealings with SML.

These directives, according to the communique are to be adhered to by both the Ministry of Finance and GRA with immediate effect.

BACKGROUND

In 2023, the Ghana Revenue Authority (GRA) tasked the Strategic Mobilisation Limited (SML) to monitor and audit Ghana’s downstream petroleum sector, upstream petroleum production, and minerals and metals resources value chain.

For five years, GRA agreed to leverage the performance of SML in monitoring the downstream petroleum sector and the provision of instant reconciliation of real-time data in the sector.

However, contract probing by policy think tanks, IMANI & ACEP coupled with an investigative publication by the Fourth Estate, regarding discrepancies in facts presented by SML which influenced their contract win, would trigger an audit request from the President.

SUMMARY OF KPMG AUDIT FINDINGS

It was revealed that no technical needs assessment was done before the engagement of SML. However, KPMG admits that they were not legally bound to have an assessment done before engaging SML.

One of the key findings of the audit was that GRA sought approval on several occasions to engage SML through a single-source procurement, which was not granted by the Public Procurement Authority (PPA).

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