GRA-SML DEAL: OccupyGhana urges Council of State to advise Akufo-Addo against KPMG’s audit

OccupyGhana, a civil society group, has called on the Council of State to advise President Akufo-Addo to revoke the appointment of private auditing firm, KPMG, in respect of the audit of the revenue assurance contract between the Ghana Revenue Authority (GRA) and Strategic Mobilisation Limited (SML).

The group said by so doing, the President will be complying with Article 187 of the 1992 Constitution.

“We urge the Council of State to seize the initiative and send its advice to the President forthwith. We also urge the President to revoke the appointment and mandate of the private audit firm, and to comply with Article 187 on the matter,” OccupyGhana wrote in a press release dated January 5.

The group further urged the Auditor-General that, “if the Council of State and/or the President fail(s), neglect(s) or refuse(s) to comply with Article 187, the Auditor-General should commence and conduct the special audit on his own motion as he is empowered to do under Section 16 of the Audit Service Act.”

It would be recalled that President Akufo-Addo appointed KPMG to conduct an audit into the transaction, which was entered into to enhance revenue assurance in the downstream petroleum sector, the upstream petroleum production and minerals and metals resources value chain.

Akufo-Addo suspends SML-GRA contract, directs audit into transaction

A press release dated January 2 and signed by the Director of Communication at the Presidency, Eugene Arhin stated that the Terms of Reference of the audit are as follows: “i. conduct an audit to ascertain the rationale or needs assessment performed prior to the contract approval by GRA, and assess how the arrangement aligns with specific needs; ii. 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;

iii. evaluate the degree of alignment between current activities and the stipulated contract scope, identifying any deviations; iv. evaluate the value or benefit that SML has so far offered to the GRA through this engagement; v. review the financial arrangements, including pricing structures, payment terms and resolution of any financial compliance issues; and vi. submit a report on your findings on the above, together with appropriate recommendations.”

The press release added that, “President Akufo-Addo has tasked KPMG to complete the assignment in two weeks.”

However, Occupy Ghana stressed that, “While we welcome both a public interest audit and the announced parliamentary inquiry into this matter, we are concerned that the President’s choice of a private audit firm to conduct this audit could be unconstitutional as it ignores a direct constitutional provision made and meant to address such situations.”

Here is the full press release:

OCCUPYGHANA PRESS RELEASE

Accra, 5 January 2024

DEMAND FOR AN ARTICLE 187(8) PUBLIC INTEREST AUDIT BY THE AUDITOR-GENERAL INTO GHANA REVENUE AGENCY AND STRATEGIC MOBILISATION LIMITED CONTRACT

OccupyGhana has seen and read a letter dated 2 January 2023 and emanating from the Office of the President that directs that an audit be conducted into the contract between the Ghana Revenue Authority (GRA) and Strategic Mobilisation Limited (SML). This contract has attracted a lot of public interest in recent days.

While we welcome both a public interest audit and the announced parliamentary inquiry into this matter, we are concerned that the President’s choice of a private audit firm to conduct this audit could be unconstitutional as it ignores direct constitutional provision made and meant to address such situations.

In article 187, the Constitution anticipates situations where public interest in the financial matters of public auditee institutions (such as through GRA) may require special audits. That is why article 187(8) specifically provides that when such matters arise, the Council of State should advise the President that an ‘Article 187(8) Public Interest Audit’ is required.

Indeed, and in practice, the President may seek and then obtain that advice. Then, the President would request the Auditor-General to conduct the audit. This provision in article 187 is so critical and significant, that the Constitution specifically sets it down as the only instance where a president has the power to request the independent Auditor-General to do anything.

It is said that ‘if a thing is worth doing, it is worth doing well.’ We should not spend time and money on an audit that may turn out to be unconstitutional and therefore worthless, leaving room for legal challenges. Ghana loses nothing but gains everything if the Auditor-General is allowed to conduct this special audit in accordance with article 187(8) of the Constitution.

The several advantages with complying with the constitutional provision include, critically, giving the Auditor-General the opportunity under article 187(7)(b) to disallow payments found to be contrary to law and then to surcharge (1) ‘any expenditure disallowed upon the person responsible for incurring or authorising the expenditure,’ and/or (2) ‘the amount of any loss or deficiency, upon any person by whose negligence or misconduct the loss or deficiency has been incurred.’

We therefore urge the Council of State to seize the initiative and send its advice to the President forthwith. We also urge the President to revoke the appointment and mandate of the private audit firm, and to comply with article 187 on the matter. We finally urge the Auditor-General that if the Council of State and/or the President fail(s), neglect(s) or refuse(s) to comply with article 187, the Auditor-General should commence and conduct the special audit on his own motion as he is empowered to do under section 16 of the Audit Service Act.

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