General News of Tuesday, 17 February 2015
The Ministry of Energy and Petroleum (MoEF) spent $1,745, 159 (GHS5,584,508 at current exchange rate) on 38 luxury vehicles when there was no budgetary provision for the purchases.
An audit report presented to Parliament by the Auditor-General, Richard Quartey, explains that the vehicles were bought from money meant for extending electricity to 1,200 communities under the Multi-Donor Budgetary Support Programme between 2010 and 2012.
The ministry also bought two heavy duty photocopiers for $33,226.40 (GHS106,324), four desktop computers with accessories for $10,522.28(GHS33,670), and three laptop computers with accessories for $8,008.71 (GHS25,627.87).
The report said, “The vehicles and office equipment were supplied by Weldy Lamont (contractor for the project) as part of the material supplied for the project.
The Director of power explained the acquisition of the vehicles and office equipment was for capacity building to enhance the service delivery of the Ministry. The audit team found no budget for purchase of vehicles and office equipment in the details of the contract.”
The auditors argued that “The process for the Ministry to acquire assets to enhance its service delivery is through the annual budget process. The Budget Committee of the Ministry prepares the expenditure estimates by costing programmes and projects, taking into consideration the ceilings set in the Budget Circular.
This is followed by the budget hearing scheduled by MoF where the Ministry defends the budget’s contribution to the economic growth of Ghana.
The Ministry also appears before the Parliamentary Select Committee of Mines and Energy to justify items in the budget.”
He Auditor-General said this laborious defence and justification process of the budget is meant to ensure that only necessary expenditures are made and those that do not add to economic growth are eliminated.
He said in the “In the procurement of vehicles and office equipment under the Weldy Lamont contract, the decision to purchase did not go through this stringent process that guarantees prudent spending. Although Parliament gave approval to the turnkey arrangement, through a resolution, the vehicles and office equipment were not in the proposal which was sent to Parliament for approval.”
The ministry acquired the vehicles and equipment which were not supported by any line item in the Bills and Quantities through the turnkey project.
Using project funds to purchase items not budgeted in the contract, according to the Auditor-General could: reduce the number of communities that would benefit from the extension of electricity, inflate the actual cost of the electricity project to include items that were not directly used for the project thereby affecting cost planning of similar projects in the future, be an incentive for officials likely to benefit from such practices to quickly approve sole-source procurement without in-depth analysis of the proposal, and motivate officials in other Ministries, Department and Agencies (MDAs) to devise similar strategies to by-pass laid down regulations and make frivolous spending.
The report concluded by stating that, “Although the Ministry asserted that, the vehicles were for supervision and should be of American make, vehicles, for example Lexus LX 570 and Chrysler 300 models are too expensive and luxurious for monitoring the project.”
The auditors recommended that Parliament must take strong exception to Ministries, Departments and Agencies acquiring assets “with project funds under international contracts for which those assets were not originally included in project budgets and/or did not seek parliamentary approval.”
Responding to the audit queries, the Ministry of Energy and Petroleum “explained that the ministry bought the vehicles and equipment with money from the loan facility to ensure the project is delivered on time. According to the Ministry, they did not ask Government for funds directly because that would have gone through a long process.
The Ministry also explained that the type of vehicles the Ministry acquired depended on the terms of the loan facility. As this project was procured through an American facility, the vehicles had to be purchased from the American market.
The Ministry further explained that, the Lexus is in the same range as the Land Cruiser and that is why they bought it for the Minister to use for site visits.”