MPs, officials milk KMA dry
¢BILLIONS GO WASTE AT KMA
THE AUDIT Service has catalogued, upon detection, a number of financial improprieties for the attention of and rectification by management of the Kumasi Metropolitan Assembly (KMA).
The uncovered financial lapses and irregularities by senior auditors of the Audit Service, have led to billions of cedis going down the drain at the place.
The auditors have placed the blame at the doorsteps of officials described as key personnel of the Assembly.
Names given by the auditors as responsible for the financial lapses at the KMA are Mr. Maxwell Kofi Jumah, then Metro Chief Executive; Mr. Anthony Albert Ampong, Metro Coordinating Director, Mr. K. A. Attuah, Director of Finance, Mrs. Lucy Owusu, Planning Officer, Mr. Charles Ampomah-Mensah, Metro Engineer, Mr. P. F. Anokye, Metro Budget Analyst and Anthony Mensah, Director of Waste Management Unit.
With the exception of Jumah, who is now the Honourable Member of Parliament for Asokwa, the other six named key personnel are still at post.
The exercise, which eventually unraveled the rot at KMA, covered the period between January 2002 and December 2004, when Mr. Maxwell Kofi Jumah alias Kofi Ghana, was the Metro Chief Executive.
It touched on cash management, procurement, payroll and award of contracts as well as disbursement of District Assembly Common Funds, HIPC Funds and other special Funds including expendable and non-expendable properties.
In a 39-page special audit report, Assistant Auditor General, Mr. S. Aduamoah-Addo collaborated findings of a local audit team and offered a number of recommendations to arrest the recurrence of the situation, which had almost put the accounts of the KMA in the red.
Significant among the findings are a shortfall of ¢863.2 million in revenue collection as a result of lack of a reliable database.
For instance, during the three year period under review, the Assembly's Internally Generated Funds (IGF) recorded a net deficit of ¢476.9 million partly to inadequate control over expenditure.
The auditors had revealed also that various purchases amounting to ¢824.2 million were neither covered with Purchase Orders (P.O.s) nor Store Receipt Vouchers.
Referring to accounts and Financial reporting, the auditors disclosed that imprest holders failed to account for ¢289.5 million as at December 31, 2004.
Some of the imprest had been outstanding since 2002.
Similarly disbursement for various services totaling over ¢1 billion were not supported by adequate documents like receipts and invoices, raising doubts about the genuineness of the said disbursements.
The auditors as well established that large quantities of non-expendable items and equipment purchased for the residence of the former Chief Executive, Mr. Maxwell Jumah, were not recorded in the Assembly's assets register being maintained by the Estates Department.
The revenue collection in 2003 is also said to have fallen below that of 2002 by a whopping ¢863.2 million, an indication that no effort was made to maintain, at least the level of collection in the previous year, the auditors reported.
Analyzing expenditure, the report revealed that while the KMA recorded a total expenditure of ¢57,474,533,758.22 under the DACF, HIPC and other grants during the three-year period against a total revenue of ¢60,735,518,958.48, showing a surplus of ¢3,260,986,200.24 it (KMA) incurred an overall deficit of ¢476,967,258.18 from its traditional sources of revenue.
During the period under audit, ¢58,443,979,742.16 was expended against a total revenue of ¢57,967,012,483.98.
The auditors attributed the trend of sustained deficits in Internally Generated Fund accounts to inadequate control over expenditure and irregularities.
Contrary to section 72 of part IX of he Financial Memoranda for Local and Urban Councils, the KMA paid excessive mobilization to contracts. It states, “No advance payments shall be made to a contractor unless provided for in the terms of the contract and shall in no case exceed 15% of the contract”.
In most cases however, payments exceed the 15% mark provided for in the terms of contract of the FM.
Examination of payments made from the HIPC Fund to contractors revealed about 16 instances where advance mobilization payments exceeded 15% between May and December 2004.
There were few cases of payments between 38% and 77% from the DACF.
For instance, Cross Africa Co. Limited of Accra took ¢108,020,000 (77%) as mobilization for the New Asafo and Gyyinase MA Schools while G&A Construction Ltd and Agyewuss Enterprise received ¢60 million (38%) and ¢81 million (40%) for the completion of 10-unit classroom block for Buokrom and rehabilitation of he KMA Main Office Block respectively.
These cases of excessive mobilization, the auditors noted, were based on memos by the Metro Engineers to Mr. Maxwell Jumah, the former Chief executive.
With regards to disbursement of DACF, tests carried out by the auditors disclosed that vouchers raised were not supported with adequate documentation in accordance with section 7 of Part IX of the FM.
The first batch of vouchers covering eight months for ¢1 billion were not adequately supported by relevant payment vouchers.
Most of the cheques issued were in the names of the staff of the Assembly. The auditors also established an impropriety in the issue of cheques without payment vouchers.
Four cheques amounting to ¢136.8 million issued between June 17 and December 12, 2004 were not supported with payment vouchers although the cash book entries indicated payment voucher numbers against them, meaning the transactions were not authentic. Meanwhile, the report has disclosed that the KMA had failed to prepare up to date monthly bank reconciliation statements on three out of 27 bank accounts.
The last reconciliation statement for the three accounts was in October and November 2004.
It was further disclosed that three other bank accounts had not been operational since 2003.
Messrs N.K. Alomatu, assistant Auditor General, Albert Sam, Assistant Director of Audit, J. O. Atuaful, Shirley Sowah, both Principal Auditors, Herbert Prebi, Patrick Ocran, H. C. Hukporti and Miss Catherine Engmann, all senior auditors, constituted the inspection team whose findings were duly endorsed by the Audit Service before the report was issued last June. More about the lapses at KMA.