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[REPORT]: 2021 Auditor General’s Report: Financial Irregularities and Deficits in the Suhum Municipal Assembly

For context, the Suhum Municipal Assembly paid a total sum of GH¢51,880.05 to four collectors, who in their duties collected GH¢23,185.40 resulting in a deficit of GH¢28,694.65 to the assembly. The report suggests that deficits such as this, monumentally undermine the revenue targets of the municipal assembly. It also forces assemblies to use District Assembly Common Fund for operations instead of its intended development projects.

It is that time of the year again, when Ghanaians will go on a constant rant on the misappropriation of funds meant for development in the country. The Auditor General’s Report is arguably the country’s most revealing report, detailing corruption and rot; from state-owned agencies to metropolitan, municipal and district assemblies in Ghana.

Leaders appointed/elected to man these institutions either lack insights to supervise or are spearhead the deliberate intent to create loot and share of taxpayers money without remorse or an iota of patriotism. Every year, reports emerge of the canker in the system alongside names of perpetrators, yet there are little to no reports of prosecution or recovery of state funds misappropriated.

Lack of prosecution is a belief that has continually fueled the act of corruption and created an audacious aura of no accountability among men to whose hands the public purse is entrusted.

Just last year, while the debate to introduce the obnoxious E-levy was ongoing both in parliament and in the public space, Ghanaians kept reminding the government to direct its effort and energy towards plugging the leak in the public financial sector.  Instead of an obnoxious tax to rake in just about GH¢7 billion in 2022, the country could have saved over GH¢12 billion of money that went into corruption by instituting proper accountable checks and measures.

In this post, I look at the various deficits and loopholes on the accounts of District Assemblies for the 2021 financial year but with core focus on the Suhum Municipal assembly’s fund as audited and reported by the auditor general.

For someone that grew up in Suhum, and pretty much still living there, I think the potential of that town is endless but less exploited, albeit, the prospects of growth in agriculture and education while leveraging on its geographical location is pretty high. This is only possible if funds are channelled towards the right projects and executed judiciously by the assembly.

CASH IRREGULARITIES / REVENUE INEFFICIENCIES

For starters, Isaac Newton was onto something when he opined that, for every action done, one must expect equal reciprocity. This fundamental reasoning is enshrined in Section 7 of the PFM Act, 2016 (Act 921) which says, a Principal Spending Officer shall, in the exercise of duties under this Act, establish an effective system of risk management, internal control and internal audit in respect of the resources and transactions of a covered entity.

In essence, adequate measures are expected to be laid to control and ensure that the resources allocated have to be commensurate with output collection. However, the report notes that total salaries of GH¢1,579,721.61 dispensed to 87 collectors of 14 assembles, resulted in GH¢737,444.30 of revenue collected representing less than 50% of salaries paid.

For context, the Suhum Municipal Assembly paid a total sum of GH¢51,880.05 to four collectors, who in their duties collected GH¢23,185.40 resulting in a deficit of GH¢28,694.65 to the assembly. The report suggests that deficits such as this, monumentally undermine the revenue targets of the municipal assembly. It also forces assemblies to use District Assembly Common Fund for operations instead of its intended development projects.

Value Books Missing for Audit

The report indicates that some 98 collectors of five assemblies failed to present value books for auditing. These value books consist of 123 GCR booklets with no par value, and Market tolls and Lorry Park tickets are valued at GH¢108,800.00.

Regulation 147 of the PFM Regulations, 2019 (L.I. 2378) places a responsibility on the principal spending officer of an assembly to diligently take stock of valued books. Somehow, these officers failed to present the said value books for auditing.

For Suhum Municipal Assembly, neither market tolls nor lorry park tickets were made available for auditing, whereas 14 out of a total of 123 GCR booklets were presented for auditing.

Revenue Misappropriation

In 2021, 28 revenue collectors from six assemblies in the Eastern Region failed to account for GH¢51,300.99 of the money they collected. Without recourse to Regulation 39 of the PFM Regulations, 2019 (L.I. 2378) which directs that, where revenue and other money is received directly by a revenue collector or cashier, the cashier or revenue collector shall, within twenty-four hours after the receipt of the revenue and other money, deposit the revenue and other money into the designated account.

The Suhum Municipal Assembly employed five collectors to routinely collect revenue from points in the area of Sand winning, property rate, business operating permit, market tolls, building permit jacket and license. Evidently, the revenue collectors failed to account for some GH¢21,169.99 of money collected which resulted in the loss of revenue to the assemblies.

Payment Vouchers Missing for Audit

Per Section 11(2) of the Audit Service Act, 2000 (Act 584), “The Auditor General or any person authorized or appointed for the purpose by the Auditor General shall have access to all books, records, returns and other documents including documents in computerized and electronic form relating to or relevant to those accounts.”

However, two assemblies in the eastern region did not submit five payment vouchers with a total face value of GH¢10,100.00 for audit.
The Suhum Municipal Assembly inclusive failed to present three payment vouchers for audit resulting in the loss of some GH¢4,400 to the assembly.

Payments without due vouchers and certifications are breeding grounds for embezzlement and do not promote sound financial practices.

Total Income

The Suhum Municipal Assembly saw some reduction in the income generated in the year 2021 comparative the previous year of 2020. With 2020 seeing a total of GH¢8,642,852.99 income amidst covid, the assembly managed GH¢7,635,797.58 in 2021 with a deficit of GH¢1,007,055.41 between the two years.

CONCLUSION

I think very soon the Auditor General will run out of ink on his recommendations towards salvaging the situation on corruption and recovering taxpayers’ money if the necessary measures are not taken and institutions with prosecutorial powers do not pursue issues of corruption raised, because there will be no money left to refill his ink.

In 2017, when the president of the republic assumed office, hopes were high about his posture toward curbing corruption in the country. Unfortunately, it’s dwindled so bad every single metric on corruption has a negative telling on his image and administration.

In 2021, the corruption perception index ranked Ghana with a 43% score. In 2017, Ghana scored 40%, the lowest in the last decade. The perceived rot in the public sector is staggering and will need fierce measures and law enforcement to rid the country of that canker.

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