General News

The 6 Agreements GRA Entered with SML without PPA Approval

A report by international audit firm KPMG has revealed that the Ghana Revenue Authority (GRA) entered into six contracts with the Strategic Mobilisation Ghana Limited (SML) without the approval of the Public Procurement Authority (PPA).

The contracts were made between 2017 and 2021, the audit report reluctantly released by the Presidency found.

This, the report noted, breached Act 663 as amended.

The move by the GRA to award the service contracts took this trend after the PPA thrice refused requests by the former to contract SML- as SML was at the time known- under single-sourcing for transaction audit.

SML was contracted in 2018 as a subcontractor to West Blue Ghana Limited in 2018 in the provision of Transaction Audit Service.

In January 2019, the GRA awarded it a contract extension, an External Price Verification services contract in April 2019, Consolidation Service Agreement in October 2019, Measurement Audit of Downstream Petroleum Products in October 2019 and Addendum to Measurement Audit for Downstream Petroleum Products Agreement in July 2019.

The report found that the breaches were reported in July 2020, as a means of regularising all the contracts under a new leadership and sought the PPA’s ratification.

It added, “On 27 August 2020, PPA granted ratification to GRA to cover the contracts based on the recommendations from an internal investigation commissioned by PPA to understand the circumstances surrounding GRA contracting SML without prior PPA approval.”

Board Approval
The audit also found that these contracts did not go through the Board of Directors.

“There is no evidence that the contracts GRA signed with SML in 2018 and 2019 were submitted to the Board for deliberation and approval.”

This, the GRA defended stating the Principal Spending Officer holds the responsibility for approving contracts.

Parliamentary Approval
In the same spirit, the report reveals the GRA failed to get Parliamentary approval in its Revenue Assurance Agreement in breach of Section 33 of the Public Financial Management Act, 2016 (Act 921) (‘PFMA”) and Article 181 of the 1992 Constitution of Ghana.

“The Consolidation Services Agreement (3 October 2019), Measurement of Downstream Petroleum Products (3 October 2019) and Addendum to Measurement Audit for Downstream Petroleum Product Agreement (29 July 2020) were executed between GRA and SML, for a period of 5 years each.

“The Revenue Assurance Agreement signed on 25 October 2023, with a five (5) year term, identifies GoG as a party to the contract and refers to the Ministry of Finance (MoF”) (through whom GoG acts) and GRA jointly and collectively as the client. We noted that all financial obligations stated in the contract are the responsibility of the client.

“Consequently, the contract binds the GoG, and according to the PFMA, both parliamentary approval and the written approval of the Minister for Finance were necessary to enter into this agreement. However, we did not sight evidence of parliamentary approval for the contract as mandated by the PFMA.”

 

Related Articles

Check Also
Close
Back to top button