Auditor-General reveals ECG has kept GH¢59m worth of prepaid meters since 2016

Revelations made in the 2020 Auditor-General’s Report indicates that the Electricity Company of Ghana (ECG), has locked up procured prepaid meters and conductors worth GH¢59 million for about five years without using them.

The 265 square meters and conductors were procured between 2014 and 2016, but at the time of the audit in 2019, the meters have not been deployed.

This is because of the failure of the management of ECG to issue the old stock before purchasing new meters, leading to the lock-up of huge investments, which could have been used for other essential needs of the company.

Based on the Auditor-General’s findings, the management of ECG has been charged to ensure that the prepaid meters and conductors are issued out to the general public, failure for which the amount involved should be recovered from the officers who engaged in the procurement.

It also came to the fore that ECG lost 2,649.08 Gigawatt hours (GWh), which represents 24.30% of power purchased from the power-producing companies to system losses.

Again, the report showed that the company incurred expenses to the tune of ¢182,576,235.15 as capacity charge by Cenit Energy for the 12 months in 2018. However, Cenit supplied only a small kilowatt per hour (kwh) fraction of what that amount correlates to in August and December of 2018.

More so, the audit pointed out that ECG has not established an internal Audit Committee, which is supposed to provide financial oversight.

Due to the developments above, the management has been told to determine losses that are due to technical and commercial challenges to help deploy measures to reduce those losses.

Regarding the incurred expenses from the Cenit Energy capacity charge, the Auditor-General charged the management of ECG to ensure that exit clauses are considered extensively before signing contracts.

Accordingly, the report has demanded that the management of ECG establishes an Audit Committee in accordance with the Public Financial Management Act, 2016 (Act 921).

Other disclosure made by the report was on electrical materials in which it was revealed that an amount of GH¢11,581,019.21 were given out on loan to eight beneficiary companies.

These materials were issued out between 2014 and 2018 without any specific terms of the agreement.

The Auditor-General called on the Management to ensure that these materials are returned before they become obsolete, or the parties concerned should be made to pay for the cost of materials as considered appropriate.

With regard to damage to transformers, the report noted that during the audit, 17 transformers were damaged between 2010 and 2013.

The auditors were, however, unable to ascertain the basis upon which the transformers, which have an average useful life of 35 years, could be damaged when they have not been used.

The auditors recommended that Management should safeguard assets procured and ensure that the faulty transformers are repaired, or the Procurement Officers and Operations Directorate should be held responsible.

In its response, the management of ECG indicated that it identified some technical challenges at the initial stages of installation, which made it unable to use the machines for its intended purpose.

Energy Minister goes hard on ECG

Meanwhile, the Energy Minister, Dr Matthew Opoku-Prempeh, has expressed his disappointments over the development at ECG, describing it as a case of irresponsibility on the part of management.

“The constituents are willing to pay for the services they consume, but we the management have been so bad at delivering something that Ghanaians want, and prepayment is one example.

They pay for the service before they use it, and if the people who pay the service before they use it are clamouring for meters and ECG cannot deliver the meters, such that it says, go to the minister, it is [an] abdication of responsibility,” he said.

READ ALSO: 10% ECG Revenue Unaccounted For — Energy Minister

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