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27.09.2005 General News

¢243.44 Billion Missing ....

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...MDAs To Be Summoned Parliament is to take action against civil and public servants whose actions cause financial loss to the state

The move is to forestall the colossal drain on the national coffers as a result of financial irregularities in the various ministries, departments and agencies (MDAs).

Consequently, the Public Accounts Committee (PAC) of Parliament has decided to request the presence of the police during its meetings with officials of the MDAs so that if the committee becomes satisfied that there has been an intent to defraud the state, the police will take over the matter for further investigations.

Mr Samuel Sallas-Mensah, Chairman of the committee, made this known yesterday when he held discussions with the Auditor General Edward Duah-Agyeman and his deputy, Kwadwo Akowuah in Accra.

The meeting was to help establish the way forward in dealing with the financial irregularities that had become a constant feature of the Auditor General's Report.

The meeting also discussed the implementation of the findings and recommendations of the Auditor General's Report and that of the committee.

At the meeting, it was revealed that the state lost ¢243.44 billion revenue as a result of financial irregularities in the various ministries, departments and agencies (MDAs) in 2003.

It lost the revenue through poor tax administration, unsatisfactory cash management, inadequate procurement and inventory control procedures, among others.

The PAC of Parliament has already sent letters to the various MDAs to respond to queries raised in their financial statements.

The MDAs have also been directed to appear on specific days before the PAC to answer queries with regard to charges of financial malfeasance.

Mr Sallas-Mensah explained that the decision to involve the police in dealing with the financial irregularities in the MDAs had become necessary because of the bureaucratic process that the reports had to be taken through before action was taken on them.

“We do not want a situation where people found to have intentionally caused the loss or defrauded the state abscond before the official report is out,” he stated.

Mr Sallas-Mensah said there had been many abnormalities with the financial reports of the MDAs and “we need to institute measures to serve as a deterrent to others, hence the need to bring offenders to book”.

He said the committee had such powers, rights and privileges of a High Court in relation to enforcing the attendance of witnesses at its meetings, examining them on oath, compelling the production of documents, among others.

Mr Sallas-Mensah called for an instrument for the committee to conduct independent investigations, apart from reports referred to it by the Speaker for investigation.

“The committee's work is invariably limited only to the Auditor-General's reports which are raised on the floor of the House. This limits the efforts of the committee to instantly address malfeasance anytime it occurs,” he said.

On his part, Mr Dua-Agyeman said, ¢204.71 billion represented uncollected taxes by the Value Added Tax (VAT) Service, the Internal Revenue Service (IRS) and the Customs, Excise and Preventive Service (CEPS).

He said the value of uncollected taxes rose from ¢1.03 billion in 2002 to ¢204.17 billion in 2003, representing “a very disturbing increase of ¢203.68 billion or 202.1 per cent.

He said the reasons identified for the non collection of the taxes were the lack of a regular review and monitoring the debts, the ineffective debt collection system of the revenue agencies, failure to apply prescribed sanctions on tax defaulters, among others.

Mr Dua-Agyeman said cash irregularities amounted to ¢17.53 billion, representing a significant reduction from ¢118.42 billion in 2002.

With regard to payroll irregularities, he said wrongful payments of unearned salaries was ¢3.25 billion, an increase of ¢1.18 billion of the amount for 2002.

“The increase was due mainly to payroll fraud, amounting to ¢2.75 billion detected by my staff which was caused by weaknesses in the internal control system and collusion among schedule officers.

He supported calls for the adequate resourcing of the committee if efforts to promote public accountability were to succeed.

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