Business News of Monday, 12 March 2018
The Minority has accused the National Food Buffer Stock Company (NFBSC) of violating the public procurement amendment act in relation to food items supplied to Senior High Schools (SHS) under the free SHS policy.
According to Mr Peter Lortsu, Ranking Member for Education, the NFBSC has been engaging in certain procurement procedures which are fundamentally alien to the Public Procurement (Amendment Act), 2016, (Act 914) or any other law in Ghana.
In a press statement, Mr Lortsu said: “NFBSC selects companies to supply food items to Senior High Schools for first year students without recourse to any law.”
He listed a number of ways the NFBSC had breached the procurement laws and quizzed that: “The NFBSC gives its waybill to the selected companies as delivery vehicles for food items to the assigned schools – why?”
To this end, the minority, therefore, is demanding an immediate reversal of government’s engagement of the NFBSC to supply food items through selected companies to Senior High Schools as according to them, “the procedure adopted is in clear breach of public procurement laws and prone to abuse and corruption.”
The Minority also called on President Nana Addo Dankwa Akufo-Addo, to cause investigations to be carried out in relation to the breach of public procurement laws by the NFBSC and all culprits sanctioned.
Below is the full statement:
MINORITY PRESS STATEMENT ON THE VIOLATION OF THE PUBLIC PROCUREMENT (AMENDMENT) ACT, 2016 (ACT 914) IN RELATION TO FOOD ITEMS SUPPLY TO SENIOR HIGH SCHOOLS
Ladies and Gentlemen of the Media,
I would like to welcome you to this morning’s press conference which centre on the violation of the Public Procurement (amendment) Act, 2016 (Act 914) by the National Food Buffer Stock Company and by extension the Akufo -Addo led government. For purposes of clarity, we would set out in extenso the laid down procedure for procurement in the Senior High Schools as provided for under the public procurement (Amendment) Act, 2016.
SCHOOL PROCUREMENT PROCEDURE
Following the decision by the NPP government to implement the free senior High School policy, an announcement was made by the Director General of the Ghana Education Service, Professor Kwasi Opoku Amankwah on Monday the 11th of September, 2017 to the effect that the National Food Buffer Stock Company had been engaged by government to supply food to the Senior High Schools in the Country. Prior to this arrangement, Senior High Schools complied with the Public Financial Management (Amendment) Act, 2016 particular S. 14, 16, 20A and 20B. The procedure therein contained is as follows:
1. Senior High Schools are required to establish the revenue for boarding using the roll of student boarders and the feeding cost per term as approved by the Ghana Education Service i.e. (Number of boarders and boarding fee per term).
2. The schools then prepare the budget for feeding.
3. The budget prepared is approved by the school’s Board of Governors.
4. The school prepares a procurement plan as required by The Public Procurement (Amendment) Act, 2016 to anchor the approved budget. See S.16, 20A and 20B of Act 914.
5. The Procurement Plan is approved by the School’s Entity Tender Committee as required by Law. See S.20B(1)(a) and (b) of Act 914.
6. Food supply contracts are then executed as per the approved procurement plan and monitored by the Public Procurement Authority (PPA) and the Auditor General.
7. Prior to the implementation of the Free Senior High School policy in September, 2017 which for now covers only first year students contrary to what was promised Ghanaians; boarding schools in the south of the country received boarding fees from the parents (sponsors) of students whiles the scholarship secretariat accounted for funds for the schools in the north of the country.
NOW ENTER THE FREE SENIOR HIGH SCHOOL POLICY AND THE NATIONAL FOOD BUFFER STOCK COMPANY (NFBSC)
Ladies and gentlemen of the media, following government’s announcement at the instance of the Director General of the Ghana Education Service that the NFBSC had now been engaged to supply food to all Senior High Schools as part of the implementation of the free SHS policy, the following procurement procedure which is fundamentally alien to the public procurement (Amendment Act), 2016, (Act 914) or any other law in Ghana is applied:
1. The National Food Buffer Stock Company (NFBSC) selects companies to supply food items to Senior High Schools for first year students without recourse to any law.
2. The National Food Buffer Stock Company gives its WAYBILL to the selected companies as delivery vehicles for food items to the assigned schools – WHY?
3. The assigned schools receive the waybills and food items and issue their STORES RECEIPT ADVICE (SRA) to the company in the name of NFBSC.
4. The company sends the STORES RECEIPT ADVICE (SRA), waybill and the company’s own invoice to the NFBSC for payment. It is important to note that the waybill and SRA are in the name of the NFBSC whiles the accompanying invoice is in the name of the assigned company.
5. The Schools are not given a copy of the company’s invoice for food supplied. As a result, the school is unable to record the cost of the food items received.
6. Consequently, the school is unable to ascertain the cost of feeding the first year students and is also unable to determine the cost of food items at the close of December, 2017. Without doubt this is going to negatively impact on the annual accounts of such schools for 2017.
7. At the moment, the scholarship secretariat has released funds belonging to the Senior High Schools to the NFBSC for the payment of the food items supplied to the schools. The NFBSC has paid these suppliers without recourse to the affected schools.
Ladies and Gentlemen, the worrying issues that naturally have arisen and begs for immediate resolution are as follows:
1. Is the National Food Buffer Stock Company entitled to operate outside the remit of the Public Procurement Law? See Part Two: S. 14(1)(a), (b) and (2) of Act 914.
2. Is the National Food Buffer Stock Company (of MOFA) a procurement entity in law?
3. If yes, is it empowered to procure food supplies for schools under the GES?
4. Is there a supply contract between the selected companies and the NFBSC?
5. If yes, how was the bidding process done (e.g sole sourcing, restrictive tendering or competitive bidding). Any records to affirm?
Ladies and Gentlemen of the Media, we can confirm to you without any scintilla of doubt that there is no food supply contract between the National Food Buffer Stock company and any Senior High School in the Country. Consequently, basic principles which underpin contracts such as; the sense of responsibility, quality standards, late deliveries, penalties etc have been compromised, a situation which without doubt can only result in financial loss to the state.
Ladies and gentlemen, the crisis emanating from the dubious arrangement whereby the NFBSC has been engaged by the NPP government to supply food to Senior High Schools in flagrant violation of the public procurement laws of Ghana are as follows:
1. Some schools have not received any food items from the selected companies for the first term.
2. Some schools have received some food items – about 10 – 50% from the companies – some almost at the end of the first term.
3. These schools have had to buy food items on credit to feed the first year students as of necessity.
4. How will such schools pay for these food items since the funds are still held by NFBSC?
5. Are the schools to continue to prepare budgets and procurement plans as required by law while the NFBSC renders them inoperational?
6. As at the close of the first term of 2017/18 academic year, the schools do not know how much of the 80% of school funds (held in Accra) is available to them – to aid them in their planning and budgeting functions.
7. Is the scholarship secretariat right in disbursing funds belonging to the Senior High Schools to NFBSC?
8. The CONTROLS in the current financial management arrangements by the scholarship secretariat and the NFBSC are weak and subject to gargantuan abuse and fraud.
In conclusion, the summary of the present procurement arrangements under the free SHS policy is as follows:
(a) NFBSC selects food suppliers for some named schools as per official letters.
(b) The selected companies buy food items from the open market.
(c) They then supply these food items to the assigned schools using waybills of NFBSC.
(d) The recipient schools then issue STORE RECEIPT ADVICE OR VOURCHER (SRA or SRV) referencing the WAYBILL of NFBSC.
(e) The selected companies then submit their invoices to the NFBSC for payment – attaching the WAYBILL and SRA.
(f) NFBSC receives funds belonging to the Senior High Schools from scholarship secretariat.
(g) NFBSC then effects payment to the suppliers without recourse to such schools.
Currently all Senior High Schools have been directed to forward all invoices for the supply of school uniform, house vests, PE dresses, School cloth to GES for direct payment to the vendors. What is happening to the policy of decentralization?
From the foregoing, the Minority in Parliament demands an immediate reversal of government’s engagement of the NFBSC to supply food items through selected companies to Senior High Schools as the procedure adopted is in clear breach of public procurement laws and prone to abuse and corruption.
The Minority also calls on His Excellency, President Akufo Addo, to cause investigations to be carried out in relation to the breach of public procurement laws by the NFBSC and all culprits sanctioned.
Thank you for the attention. God save Ghana.
Honourable Peter Lortsu
(Ranking Member for Education)