Jospong's Sewerage Systems Ghana Limited paid GHS95million without contractual agreement — Audit Report

The 2020 Auditor-General's Report has cited the Administrator of the District Assembly Common Fund (DACF) for paying Sewerage Systems Ghana Limited a total amount of GH¢95,000,000.00 with no government ownership.

The report noted that GH¢19,000,000.00 was paid in 2019 without any contractual document.

It added that the GH¢19,000,000.00 was an outstanding amount for a GH¢95,000,000.00 support to complete the Accra Waste Treatment Plant, Lavender Hill and Mudor Facility.

This the Auditor-General noted that section 7 of the Public Financial Management Act, 2016 (Act 921) directs that a Principal Spending Officer of a covered entity shall ensure the regularity and proper use of money appropriated in that covered entity.

Now, this is what the report indicated, "the payment was only supported by a letter from the Office of the President referenced OP /CA.7 /V.3 of 15 June 2016, which indicated that the intention of Cabinet was to provide a credit guarantee for the completion of the Accra Waste Treatment Plant, Mudor Faecal and the old "Lavender Hill".

The report said in order to establish the basis for the payment of GH¢95,000,000.00 to Sewerage Systems Ghana, the Audit Service conducted a review of the transaction from inception and found that the letter from the office of the President specified that the intention of Cabinet was to provide a credit guarantee for the completion of the three facilities.

It also found that “the payments commenced in 2016 with annual provision in the Approved Formula, and the then Administrator did not obtain any contractual documentation to support funding to a Private Entity or enter into any legally binding arrangement to recover the support made to Sewerage Systems."

According to the Auditor General, “We could not establish the basis for the payment of the GH¢95,000,000.00 as support to a Private entity with no government ownership.

“It was also of the view that Article 252(3) of the 1992 Constitution does not permit allocation of the Common Fund to private entities and would be a loss to the Assemblies if not recovered,” the report indicated.

Therefore, the Auditor General recommended to the Administrator to recover the total payment of GH¢95,000,000.00 from Sewerage Systems Ghana Limited.

Sewerage Systems Ghana Limited, one of the companies owned by Jospong Group of Companies (JGC) operates a faecal treatment plant in Accra which treats massive tons of faecal and liquid waste.

Below is the portion of the 2020 Auditor General's report:

The story is part of series of publications ModernGhana News Team is running from the 2020 Auditor General's report. We will bring you more of these from the various sectors of the entire report.