Winter Reflections From Edmonton: A Tale Of Misuse Of Ghana Public Funds

Ishmael Yamson

Having worked in Corporate Finance for over eight years in the USA and in Internal Controls over Financial Reporting in Canada over the last year, my ears are attuned rather acutely to issues of abuse of corporate governance policy more than most.

I have read and listened to incredible stories in the Ghanaian media of public institutions making payments to individuals or groups with partisan interests.

Specifically, I am talking about the Ghana Investment Promotion Center (GIPC). This conduct, or rather misconduct, I believe is in contravention of the Financial Administration (FA) Act that governs disbursements by public institutions in Ghana.

Even if it does not contravene the act, does the reported conduct smell right? Emphatically no!

In much of the developed world where best practices are adhered to and not merely discussed at symposia, such an unfolding scandal would be heralded with resignations.

Let me provide an example here.
In August 2012, a story broke out in Alberta, Canada that subsequently led to the resignation of the Chief Financial Officer (CFO) of the Alberta Health Services (AHS). Shortly thereafter, a Board member of the AHS also resigned.

AHS is the single health authority for the Canadian province of Alberta. Alberta Health Services delivers medical care on behalf of the Government of Alberta's Department of Health through 400 facilities throughout the province, including hospitals, clinics, continuing care facilities, mental health facilities and community health sites, while providing a variety of programs and services.

The then CFO of AHS resigned over reports that parts of expense claims that he had submitted for reimbursement involved what one might call overly luxurious items. Such luxurious items included high-end restaurants, expensive wines, and a phone for his Mercedes benz.

It is note worthy that all these expense claims were duly approved by the CEO and subsequently paid . So on the face of it, there does not appear to have been anything out of the ordinary.

Why then did the CFO have to resign, you might ask? Why also did the Board member have to resign? The Board member here was the individual who in a previous capacity as CEO approved the expense cheques.

The resignations by the CFO and Board member (ex CEO) was over public indignation that public funds should not be used to satisfy the luxurious tastes of a public official.

Never mind that the company's policy did not explicitly prohibit those expenditures. The mere fact that the conduct of the CFO was considered insensitive considering that those funds were public funds was enough for the decent thing to be done: a resignation. The link to the foregoing AHS story is as published below:

http://www.cbc.ca/news/health/story/2012/08/02/edmonton-weatherill-resigns-merali.html

Back to Ghana.
The GIPC is reported to have made a donation to a pro-Mahama-for- president group. Again, the GIPC is said to have made a significant donation towards the 70th birthday celebration of its board Chairman.

I did not know whether to laugh or cry when I read the story. Can this really be happening in a country that is torn over whether we have enough resources to provide free SHS?

What is more regrettable than these shameful disbursements is the subsequent explanations we are being given.

Explanations to the effect that the cheque to the pro-Mahama-for- President group did not clear the bank. Explanations to the effect that the cheque to the Board chairman was subsequently returned to GIPC by the Board Chairman.

What has uncashed/unclearedcheques got to do with anything? The burning question is this. Does prevailing policy permit the approval of expenditures which are entirely outside the remit of GIPC (donations to political groups and funding birthday parties of Board members)? And if not, how was it possible that the disbursement process was able to progress past the very final checkpoint of actually cutting a cheque?

In the interest of Mother Ghana and good corporate governance in Ghana, refund of the aforementioned cheques to GIPC by the pro-Mahama group and the Board chairman should not end the scandal. The mere fact that these cheques are being refunded (or being asked to be refunded) suggest that the actors acknowledge the impropriety of the payments.

The question then is, are the actors going to salvage what is left of their dignity by being decent enough to resign? Even more importantly, is the President going to stop hiding behind his campaign team communications person by showing leadership in stopping this decadence.

The President may wish to act or not act. That is his prerogative.

And so is it the prerogative of the discerning Ghanaian electorate to put a stop to the wanton abuse of public funds come December 7, 2012. A word to the wise is enough.

Gilbert Adu Gyimah, CPA(US)
[email protected]
(c) 587 708 9915
Executive Member, NPP Alberta
Alberta, Canada

Former GIPC Boss, George Aboagye