The Auditor General’s reports for 2013 and 2014 have exposed serious financial irregularities amounting to GH¢45 million in the transactions of the 10 polytechnics in the country.
The cash, payroll, procurement, tax, contract and stores lapses were committed by the Ho, Tamale, Accra, Kumasi, Sunyani, Takoradi, Wa, Bolgatanga, Cape Coast and Koforidua polytechnics in 2013 and 2014, according to a copy of the report sighted by the Daily Graphic.
The report indicated that cash irregularities in the polytechnics, which stood at GH¢35,128,724, comprised misapplication of funds, non-retirement of imprest, unapproved expenditure and the non-payment of internally generated funds into the Consolidated Fund.
It said the cash irregularities occurred because there was laxity in expenditure control, flagrant disregard for financial regulations pertaining to disbursement of funds in the public sector and failure of heads of finance to control disbursement of funds and ensure that transactions were properly authenticated.
It said payroll irregularities totalling GH¢385,567 included the payment of salaries to retired or deceased employees and the payment of allowances without approval.
Procurement lapses, which emanated from intentional disregard for the Procurement Act, management’s failure to comply fully with the procurement law and a breakdown of procurement process, stood at GH¢1,686,231.
“These include excessive variation order, absence of a system to monitor works being executed, restricted tendering, procurement order divided into lots and lack of supervision,” it said.
On tax irregularities, the report said the lapses totalling GH¢672,259 were occasioned by the failure of finance officers to diligently act in accordance with the statutory law, resulting in non-deletion of withholding tax and delay in the payment of withholding tax to the Ghana Revenue Authority (GRA) (Domestic Tax Division).
Besides, it said, the tax lapses related to purchases from non-Value Added Tax (VAT) registered sources and failure to obtain VAT invoices or receipts from suppliers.
The report said the stores irregularities, which were in the region of GH¢646,649, were caused by the absence of an effective stock control system in place, inappropriate procedures in dealing with disposing of stores, as well as poor supervision over stores management.
Contract lapses totalling GH¢5,870,745 related to an unjustified review of contract process, excessive payment of mobilisation fees, payments made and failure to exercise due diligence in the award of contracts for project work.
“They were caused by management’s failure to adhere to provisions in contract documents, improper contract budgeting and commencing many projects at the same time,” it said.
The report disclosed that the internal roads construction contract at the Ho Polytechnic costing GH¢818,150 was revised to GH¢1,417,150, a variation of GH¢559,000 or 73 per cent, without approval.
It indicated that the contractor had been paid GH¢1,174,514, which exceeded the original contract sum by GH¢356,364.
One of the findings against the Tamale Polytechnic was that two deceased staff members were paid unearned salary of GH¢3,408 due to management’s non-compliance with Regulation 298 of the Financial Administration Regulation (FAR), 2004.
The report said the procurement of 20,000 answer booklets at an estimated cost of GH¢88,000 at the Accra Polytechnic was divided into lots which resulted in raising the actual cost to GH¢112,434, an increase of GH¢24,434 or 27.8 per cent.
A total of GH¢302,159, according to the report, was paid to Council Members of the Kumasi Polytechnic as allowances without ministerial approval.
Besides, it said, procurements totalling GH¢617,210 were made without recourse to the procurement plans of 2013 and 2014, while two contracts totalling GH¢357,445 were varied upwards by GH¢127,584 or 48.5 per cent without approval.
The report established that the Sunyani Polytechnic made payments totalling GH¢309,132 without adequate supporting documents such as signed statement of claim, original receipts, official receipts, memos or contract payment certificates.
It established that staff allowances and council expenses amounting to GH¢3,327 which was not budgeted for were made from the internally generated funds (IGF) of the Takoradi Polytechnic.
It indicated that tax penalty of GH¢48,522 was imposed on the Wa Polytechnic for failing to withhold taxes on payments made to some suppliers and individuals.
The report said the Bolgatanga Polytechnic paid salaries for work not done totalling GH¢47,416 to separated staff.
Cape Coast Polytechnic
It said disbursements amounting to GH¢44,762 were made by the Cape Coast Polytechnic without any documentary evidence of expenditure to acquit them, in contravention of the FAR.
The report said only GH¢18,850 or 20.7 per cent out of GH¢91,098 given to officers of the Koforidua Polytechnic as salary, rent and vehicle advance for the periods under review had been recovered as of March 2015, leaving GH¢72,248.