Akufo-Addo Contracts Audit Firm To Probe SML Deal
The President of Ghana, Nana Addo Dankwa Akufo-Addo has contracted international audit firm KPMG to audit transactions between the Ghana Revenue Authority (GRA) and the Strategic Mobilization Ghana Ltd (SML).
The transaction between the two entities has been in doubt since the release of a documentary by the Media Foundation for West Africa (MFWA) and subsequent probes by some Civil Society Organisations (CSOs) over their revenue assurance mandate.
The firm has been given two weeks to submit their reports during which time the President has charged the Ministry of Finance and the GRA to suspend the performance of the contract, a communiqué by the Director of Communication at the Office of the President, Eugene Arhin, said.
The two have also been charged to provide KPMG with the needed assistance.
As part of the terms of reference, KPMG must conduct an audit to ascertain the rationale or needs assessment performed before the contract approval by GRA and assess how the arrangement aligns with specific needs.
Additionally, assess the appropriateness of the contracting methodology, verifying compliance with legal standards and industry best practices in the procurement process for the selection of SML.
KPMG must also evaluate the degree of alignment between current activities and the stipulated contract scope, identifying any deviations.
Furthermore, evaluate the value or benefit that SML has so far offered to the GRA through this engagement.
The audit firm must review the financial arrangements, including pricing structures, payment terms, and resolution of any financial compliance issues.
- Finally, it must submit a comprehensive report on your findings on the above, together with appropriate recommendations.
Background
The GRA has awarded three contracts to SML since 2019 to detect invoice fraud, fight under-declaration of fuel volumes and, by extension, taxes collected by the fuel marketers from consumers on behalf of the government and then an expansion to minerals exported by Ghana.
The contacts are reported to have been awarded through sole sourcing.
According to MFWA who first brought this to the attention of the public, investigations revealed SML is not tackling any of the problems and malfeasance that was identified in causing leakages in the sector.
It also established that SML by the contract will be paid US$100 million by the government of Ghana for the “revenue assurance” it provides.
The GRA in a statement in December 2023 denied SML was being paid for no work done.
“The work of SML over the period has led to a significant increase in the figures reported in the downstream petroleum sector, from an average of 350 million litres per month in 2018 and 2019, to 450 million litres per month from 2020/2021.
“This represents over a thirty- three per cent (33%) increase in volume reporting and an average of an extra 100 million litres per month at a levy rate of GHS1.44p. The extra revenue variance gained for the two (2) years will exceed GHS3 billion. This performance is attributable mainly to the introduction of ICUMS and SML systems.”
