Blame the state for procurement breaches – Appiah-Kubi
If there is any procurement default in a contract between the state and a private individual the state is to blame for it, not the private investor, Asante Akim North lawmaker Kwame Andy Appiah-Kubi, has said.
He explained that it is for the state to investigate the proposal of the private investors against what the law says but if they neglect that duty, the problem will not be blamed on the investor.
He said on Saturday, April 27 “I don’t see anything wrong that the company has done, if there is any procurement breach I will blame the GRA, not the company.
“If procurement default occurs in a contract, I will blame the state, not any contracting party. When the whole machinery of government is available, and I am coming as a private investor to engage with you and you want to burden me with your negligence?”
He was contributing to a discussion on the KPMG audit report on the deal between the Ghana Revenue Authority (GRA) and the Strategic Mobilisation Limited (SML).
Mr Appiah-Kubi said the request for the publication of the KPMG audit is right.
If for nothing at all, he said, the publication will help in informed discussions on the matter.
“Whether there was a call or not to publish the report, reports are meant to be served on interested parties, it does not take somebody to call for the releases. If we are interested to know what is there, that is right.
“The call is appropriate, we spent money to produce the report, if for nothing at all for the education. It is important to publish. I am not aware that anybody is trying to shelve it. We must begin to interrogate the report,” he said.
The report issued by accounting and auditing firm, KPMG on the agreement between the GRA and the SML revealed that no technical needs assessment was done prior to the engagement of SML.
However, the report said, such an assessment was not legally required for engaging SML.
In a statement released by the Presidency on Wednesday, April 24, portions of the KPMG report were captured stating that “No technical needs assessment was done prior to the engagement of SML. However, such an assessment was not legally required for engaging SML. After SML was engaged, a Chamber of Bulk Oil Distributors’ industry report, a 2021 Ernst & Young audit report commissioned by GRA and a report by the Revenue Assurance and Compliance Enforcement of the Ministry of Finance all found that there might be underreporting, under-declaration and potential revenue leakages.
“On three occasions (between June 2017 and September 2017), GRA sought approval from the Public Procurement Authority (“PPA”) to use the single source procurement method to engage SML to provide transaction audit services. PPA did not grant approval.
Subsequently, GRA engaged SML as a subcontractor to West Blue which was already providing services to GRA at the port. SML eventually took over the services provided by West Blue when the latter’s contract came to an end on 31st December, 2018. GRA then added external price verification to the services offered by SML and signed a downstream petroleum audit agreement with SML.
“All these were done without PPA approval. Following a change of leadership at GRA, the new leadership sought to regularise the contracts with SML and on 27th August, 2020, PPA ratified the procurement processes used to engage SML. In 2023, the Ministry of Finance (MoF), GRA, and SML entered into a Revenue Assurance Services Contract (“2023 Contract”).
The 2023 Contract extended the scope of SML’s services to include upstream petroleum and minerals audit. PPA approval was obtained for this contract, which is now the governing agreement for the services offered by SML to GRA. Another issue raised by KPMG is the absence of parliamentary approval for the contracts, given that they are multi-year contracts. Under section 33 of the Public Financial Management Act, 2016 (Act 921) (“PFMA”), such contracts must have ministerial and parliamentary approval.
KPMG also found that there was no evidence that the 2018 and 2019 contracts (transaction audit services, external price verification, and downstream petroleum audits) were submitted to the GRA Board for discussion and approval contrary to the GRA Act, Corporate Governance Manual for Governing Boards/Councils of the Public Services, and sound and accepted corporate governance practices. The GRA Board approved the extension of SML’s services to cover the auditing of the upstream petroleum and minerals sectors, as specified in the 2023 Contract.