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2019 REPUBLIC OF GHANA CONSOLIDATED FUND Our Vision To become a world-class Supreme Audit Institution, delivering professional, excellent, and cost effective auditing Service. REPORT OF THE AUDITOR-GENERAL ON THE PUBLIC ACCOUNTS OF GHANA (GENERAL GOVERNMENT) FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019 This report has been prepared under Section 11 of the Audit Service Act, 2000 for presentation to Parliament in accordance with Section 20 of the Act. Johnson Akuamoah Asiedu Auditor-General Ghana Audit Service 28 September 2020 This report can be found on the Ghana Audit Service website: www.ghaudit.org For further information about the Ghana Audit Service, please contact: The Director, Communication Unit Ghana Audit Service Headquarters Post Office Box MB 96, Accra. Tel: 0302 664928/29/20 Fax: 0302 662493/675496 E-mail: [email protected] Location: Ministries Block 'O' © Ghana Audit Service 2020 TRANSMITTAL LETTER Ref. No. AG/01/109/Vol.2/140 Office of the Auditor-General Ministries Block ‘O’ P. O. Box MB 96 GA/110/8787 Accra Tel. (0302) 662493 Fax (0302) 662493 28 September 2020 Dear Mr. Speaker, REPORT OF THE AUDITOR-GENERAL ON THE PUBLIC ACCOUNTS OF GHANA (GENERAL GOVERNMENT) FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019 I have the honour to present my report on the Public Accounts of Ghana for the year ended 31 December 2019 to be laid before Parliament in accordance with Article 187(5) of the Constitution of the Republic of Ghana and Section 23(1) of the Audit Service Act 2000 (Act, 584) 2. The report highlights the outcome of the financial statements which comprise mainly the Balance Sheet, Revenue and Expenditure Statement, Receipts and Payments Statement Cash Flow Statement and the supporting schedules, with a view to expressing an opinion on the accounts. 3. In my opinion, except for the significant issues raised in paragraph 53 of this report, the financial statements give a true and fair view of the financial Report of the Auditor – General on the Public Accounts of Ghana for the financial 1 year ended 31 December 2019 position of the Government of Ghana as at 31 December 2019, and the results of its operations, cash flow and financial requirements for the year then ended. The accounts are in accordance with the stated accounting policies of the Government of Ghana. 4. I acknowledge the cooperation and assistance provided to the Audit Service by the Ministry of Finance, Controller and Accountant-General and Heads of Ministries, Departments and Agencies during the audit. 5. I also commend the courage and commitment of my staff in conducting the audit and reporting to Parliament even in the face of the imminent risks posed by the covid19 pandemic. Yours sincerely, JOHNSON AKUAMOAH ASIEDU ACTING AUDITOR-GENERAL THE RT. HON. SPEAKER OFFICE OF PARLIAMENT PARLIAMENT HOUSE ACCRA Report of the Auditor – General on the Public Accounts of Ghana for the financial 2 year ended 31 December 2019 Table of Contents Acronyms and Abbreviations ........................................................................................................ 4 Introduction ...................................................................................................................................... 6 Summary of Findings and Recommendations ............................................................................ 8 Discrepancies in Accounts Figures Reported .............................................................................. 8 Budget Overruns .............................................................................................................................. 8 External Debt Balance Reported .................................................................................................... 9 Details of Findings and Recommendations.................................................................................. 9 Discrepancies in Accounts Figures Reported .............................................................................. 9 Budget Overruns ............................................................................................................................ 11 Avoidable Penalty and Commitment Fees Payment on Loans – (GH¢38,294,627.27) ......... 16 External Debt Balance Reported .................................................................................................. 17 ACCOUNTING AND COMPLIANCE ISSUES ......................................................................... 30 Change in Scope ............................................................................................................................. 30 Financial Analysis .......................................................................................................................... 31 Acknowledgement ......................................................................................................................... 35 Report of the Auditor – General on the Public Accounts of Ghana for the financial 3 year ended 31 December 2019 Acronyms and Abbreviations ABFA Annual Budget Funding Amount ADF African Development Fund AOM Audit Observation Memorandum BBP Barclays Bank Plc BoG Bank of Ghana BTA Bank Transfer Advice CAG Controller and Accountant General CAGD Controller and Accountant General Department CF Consolidated Fund CS-DRMS Commonwealth Secretariat Debt Recording and Management System DACF District Assemblies Common Fund DIC Divestiture Implementation Committee DMD Debt Management Division EFT Electronic Fund Transfer EOCO Economic and Organized Crimes Office ERM External Resource Mobilization FAA Financial Administration Act, 2003 (Act 654) FAR Financial Administration Regulations, 2004 (LI 1802) GoG Government of Ghana GIFMIS Ghana Integrated Financial Management and Information System GRA Ghana Revenue Authority GCB Ghana Commercial Bank IGF Internally Generated Fund INTOSAI International Organization of Supreme Audit Institution MDAs Ministries, Departments, and Agencies Report of the Auditor – General on the Public Accounts of Ghana for the financial 4 year ended 31 December 2019 MoF Ministry of Finance PDI Public Debt and Investment PFMA Public Financial Management Act, 2016 (Act 921) PID Public Investment Division PIUs Project Implementation Units NTR Non-Tax Revenue VAT Value Added Tax ABFA Annual Budget Funding Amount SOEs State-Owned Enterprises SMEs Small and Medium Enterprises TSA Treasury Single Accounts PIMS Public Information Management System GBEs Government Business Enterprises GIIF Ghana Infrastructure Investment Fund PFM Public Financial Management Report of the Auditor – General on the Public Accounts of Ghana for the financial 5 year ended 31 December 2019 REPORT OF THE AUDITOR – GENERAL ON THE PUBLIC ACCOUNTS OF GHANA FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019 Introduction The Controller and Accountant-General (CAG) is mandated under Section 81(1) of the Public Financial Management Act, 2016 (Act 921), to prepare and submit to the Minister and the Auditor-General, within three months after the end of the financial year, the following consolidated annual accounts of Government: the consolidated annual accounts of Government including the accounts specified in the Schedule; the accounts of the Contingency Fund; and the accounts of the Petroleum Funds. Audit objectives 2. Section 15 of the Audit Service Act, 2000 (Act 584) requires that I examine the Financial Statements and certify whether, in my opinion, the statements present fairly financial information on the accounts in accordance with accounting policies of Government and consistent with statements of the preceding year in accordance with best international practices. I am also required to state any reservation or make any comments that I consider necessary. Audit scope and methodology 3. The audit covered transactions/events in 2019 which impacted the Public Fund (PF). Our review of these transactions/events was carried out taking into consideration relevant provisions of the 1992 Constitution, the Financial Administration Act (FAA), 2003 (Act 654), the Public Financial Management Report of the Auditor – General on the Public Accounts of Ghana for the financial 6 year ended 31 December 2019 Act (PFMA), 2016 (Act 921), enabling enactments on statutory funds and other statutes and regulations. The audit focused mainly on processes followed by the Controller and Accountant General’s Department to capture transactions/events for the preparation of the Public Accounts of Ghana. 4. To satisfy the audit objectives, the control environment within which the transactions/events were effected was assessed. This assessment included the review of application controls and data integrity of the GIFMIS system to gain assurance on the adequacy and consistency with government business processes as redefined. Inherent risks associated with significant transactions and events were also assessed with the aim of evaluating the adequacy of managements’ responses to these risks. On the basis of the outcome of these reviews, I evolved and executed audit procedures which, in my view were necessary to minimise audit risks. Systems supporting transactions/events were also reviewed and substantive tests as appropriate were undertaken. 5. The outcomes of my reviews were discussed with respective desk officers and their supervising officers, whose responses were considered in arriving at my conclusions. Observations derived from the reviews were communicated to the Controller and Accountant General (CAG) through Audit Observation Memoranda (AOM). The