2017 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 CONSOLIDATED ANNUAL ACCOUNTS OF GOVERNMENT FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 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. Daniel Yaw Domelevo Auditor-General Ghana Audit Service 25 June 2018 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 2018 TRANSMITTAL LETTER Ref. No. AG.01/109/Vol.2/115 Office of the Auditor-General Ministries Block ‘O’ P. O. Box M. 96 Accra GA/110/8787 Tel. (0302)662493 Fax (0302)675496 25th June, 2018 Dear Mr. Speaker, SUBMISSION OF AUDITOR-GENERAL’S ANNUAL REPORT ON THE PUBLIC ACCOUNTS OF GHANA, FOR THE YEAR ENDED 31 DECEMBER 2017 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) I have the honour to present my report on the Public Accounts of Ghana for the year ended 31 December 2017 to be laid before Parliament. 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, excepts for the significant issues raised in paragraph 146 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 (Consolidated Fund) for the financial year i ended 31 December 2017 position of the Government of Ghana as at 31 December 2017 and the results of its operations, cash flow and financial requirements for the year then ended. 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. Once more, I also acknowledge the efforts and commitment of my staff in conducting the audit and reporting to Parliament. Yours Sincerely, DANIEL YAW DOMELEVO AUDITOR-GENERAL THE RIGHT HONOURABLE SPEAKER OFFICE OF PARLIAMENT PARLIAMENT HOUSE ACCRA Report of the Auditor-General on the Public Accounts of Ghana (Consolidated Fund) for the financial year ii ended 31 December 2017 Table of Content Contents Acronyms and Abbreviations .................................................................................................................. 2 Introduction ............................................................................................................................................ 3 Summary of significant findings ........................................................................................................ 6 Details of Findings and Recommendations...................................................................................... 9 Management of Idle Cash Balances with Commercial Banks ....................................................... 9 Inconsistencies in the recognition of GoG Investments................................................................ 10 Non availability of records on Earmarked State Assets for Divestiture .................................... 11 Disputed ECGD loan Balances ......................................................................................................... 13 Under Lodgment of Tax Revenue - Gh₵7,327,771 ........................................................................ 14 Provision for Doubtful Debt ............................................................................................................. 17 Unsupported charges against the Treasury Main Accounts- GH₵11,969,395 .......................... 19 Un-reflected payment in the GIFMIS Sub CF Bank Statement- GH¢56,864,175.03 .................. 21 Irregular Mode of Payment to Some Suppliers - GH¢111,280,672 .............................................. 22 Multiple Ownership of Bank Accounts and duplication of Vendor details in the GIFMIS .... 24 Discrepancies between Public Accounts and MDAs cash balances ........................................... 25 Penalty Payment on External Loans GH¢ 1,236,420.52 ................................................................ 27 Non-compliance with Earmarked Funds Capping and Realignment Act 2017, Act 947 ......... 29 Payments made to suppliers without Purchase Order and Store Receipt Advice - GH¢14,145,119.43 ............................................................................................................................... 30 Payment outside GIFMIS GH¢66,387,161.08 .................................................................................. 32 Discrepancies in loan disbursement reported by DMD and PIUs .............................................. 34 Judgment Debt cost to the State ....................................................................................................... 36 Non Compliance with the Regulatory Framework ....................................................................... 38 Financial Analysis .............................................................................................................................. 40 Opinion of the Auditor-General ...................................................................................................... 72 Acknowledgement ............................................................................................................................. 74 Report of the Auditor-General on the Public Accounts of Ghana (Consolidated Fund) for the financial year 1 ended 31 December 2017 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) GBEs Government Business Enterprises GCB Ghana Commercial Bank GIFMIS Ghana Integrated Financial Management and Information System GIIF Ghana Infrastructure Investment Fund GoG Government of Ghana GRA Ghana Revenue Authority IGF Internally Generated Fund INTOSAI International Organization of Supreme Audit Institution MDAs Ministries, Departments and Agencies MoF Ministry of Finance NTR Non Tax Revenue PDI Public Debt and Investment PF Public Fund PFM Public Financial Management PFMA Public Financial Management Act, 2016 (Act 921) PID Public Investment Division PIMS Public Information Management System PIU Project Implementation Units SMEs Small and Medium Enterprises SOEs State Owned Enterprises TSA Treasury Single Accounts VAT Value Added Tax Report of the Auditor-General on the Public Accounts of Ghana (Consolidated Fund) for the financial year 2 ended 31 December 2017 REPORT OF THE AUDITOR – GENERAL ON THE PUBLIC ACCOUNTS OF GHANA FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 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 comment that I consider necessary. Audit scope and methodology 3. The audit covered transactions/events in 2017 which impacted on the Public Fund (PF). Our review of these transactions/events was carried out taking into consideration relevant provisions of the 1992 Constitution, the Public Financial Management 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 Report of the Auditor-General on the Public Accounts of Ghana (Consolidated Fund) for the financial year 3 ended 31 December 2017 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