Gov’t cash, ending up in private pockets
... As AMA overpays contractor by ¢1bn THE SUSPICION of the former Minister of Finance and Economic Planning, now Minister of Education and Sports, Hon. Yaw Osafo-Maafo, that 'a high percent' of the Accra Metropolitan Assembly's (AMA) revenue finds its way into private pockets, has been established by Chronicle investigations.
The Chronicle's intensive investigations have revealed that between September and December, last year, the Assembly overpaid one of its solid waste contractors (SWC), J. Stanley Owusu Co. (JSO), about ¢1 billion. For now, it is not clear why the AMA overpaid JSO by that amount.
Documents available to the paper indicate that as at 31st December 2003, the total AMA indebtedness to 14 registered SWCs was ¢16,773,871,128, incurred through their solid waste operations.
Hon. Osafo-Maafo made this accusation last year, when the Assembly went to plead with his Ministry for money to pay for the SWCs of the Assembly, after they had threatened to go on strike.
During their negotiations, Hon. Osafo-Maafo had stated in one of his letters: “It is common knowledge that a high percent of revenue meant for the AMA finds its way into private pockets. It is also common knowledge that AMA has weak capacity for collecting annual property rates.”
He continued, “If leakages in the revenue system of the AMA and the issue of collection of property rates are properly handled, AMA should have no difficulties in raising funds to pay its SWCs.”
The former Finance Minister continued by warning managers of the assembly, “I consider it morally unacceptable and unfair, for us to allow theses revenue leakages to go on while we take easier option of using taxes of poor nurses, teachers etc among others to support waste management in the city.”
While Hon. Osafo-Maafo was accusing and warning officials of AMA for their revenue leakages, they were rather mocking him because the total bill which they were seeking funds to pay, contained about ¢1 billion which would go into private pockets.
The ex-finance minister finally agreed to assist the Assembly to settle the debt of the AMA. However, the financial controller of the Assembly, Mr. K.K Bosompem, presented ¢17,731,138,988 to Hon. Osafo-Maafo, through the Ministry of Local Government and Rural Development for payment, instead of the actual debt of ¢16,773,871,128 owed the SWCs.
Documents available to the paper reveal that the difference between the two figures, which is about ¢1 billion, was credited to JSO.
The documents further reveal that as at 31st December 2003, AMA owed JSO ¢ 2,358,917,487 but this amount was increased to ¢ 3,314,185,027 by the financial controller of AMA, before payment was made.
In an interview with Mr. Bosompem, he admitted that he credited that amount to JSO, but explained that the Assembly decided to refund it to JSO after the Assembly had failed to deliver to them certain equipment the company had earlier paid for, from their Kumasi accounts.
He further explained that after City and Country Waste Limited (CCWL) trucks were distributed to the local waste contractors in 2001, there were some unserviceable ones left, which two SWCs put in bids to purchase in 2003.
The AMA financial controller added that, JSO was one of the two ompanies which put in the bids and paid AMA an amount of ¢ 643 million from their Kumasi accounts, but the Assembly could not deliver the trucks to the company so they decided to refund their money to them.
However, for whatever reason, JSO's amount of ¢643 million paid to AMA, when being credited back into their accounts, increased to about ¢1 billion!
¢1.7 billion of this amount was paid from the HIPC Relief Fund, while ¢1.614 billion was paid from the District Assemblies Common Fund.
Mr. Bosompem could however not justify what accounted for the difference between the two figures, saying that his department could rectify the anomaly when the two institutions carried out accounts reconciliation.
Another issue that is worth mentioning is that the former Finance Minister, Hon. Osafo-Maafo, was deceived into believing that he was paying for only waste collection operations, when in actual fact, some of the amount was meant for a different purpose.
The Chronicle can say categorically that Mr. Bosompem lied through his teeth when he claimed that the Assembly could not supply the unserviceable trucks to JSO.
Documents available to the paper suggest that JSO was supplied nine unserviceable trucks sometime in 2003.
In JSO's response to The Chronicle's questionnaire, signed by their General Manager - Finance, Mr. E. Adu Smith, the company admitted that the outstanding debts owed them by AMA as at 31st December, 2003 was ¢2.3 billion but his company had been paid ¢3.3 billion as at now.
Mr. Smith admitted also that, AMA supplied his company with nine unserviceable trucks.
The SWCs recently threatened to embark on a strike action, complaining that AMA, for over 15 months, had not paid them for waste collection services they had rendered.