Let’s have balanced view on GRA-SML deal – Gyampo

After SML was engaged, a Chamber of Bulk Oil Distributors’ industry report, a 2021 Ernst & Young audit report commissioned by GRA and a report by the Revenue Assurance and Compliance Enforcement of the Ministry of Finance all found that there might be underreporting, under-declaration and potential revenue leakages.

“On three occasions (between June 2017 and September 2017), GRA sought approvalfrom the Public Procurement Authority (“PPA”) to use the single source procurementmethod to engage SML to provide transaction audit services.

KPMG also found that there was no evidence that the 2018 and 2019 contracts (transaction audit services, external price verification, and downstream petroleum audits) were submitted to the GRA Board for discussion and approval contrary to the GRA Act, Corporate Governance Manual for Governing Boards/Councils of the Public Services, and sound and accepted corporate governance practices.

The GRA Board approved the extension of SML’s services to cover the auditing of the upstream petroleum and minerals sectors, as specified in the 2023 Contract.

“Regarding the transaction audit services, KPMG concluded that SML partially delivered onthe service requirements.

Regarding the downstream petroleum audit services, KPMG determined that there was an incremental volume of 1.7 billion litres and an incremental tax revenue of GHS 2.45 billion for the period under review.

“There were also qualitative benefits, including a 24/7 electronic real-time monitoring of the outflow and partial monitoring of inflows of petroleum products at depots where SML had installed flowmeters.

Other qualitative benefits include six levels of reconciliation done by SML to prevent revenue losses to GRA and the sharing of discrepancy reports with GRA to follow up.

“SML had yet to implement the upstream petroleum audit and minerals audit services, and therefore, there could be no assessment as to whether GRA would derive value or benefit from that service.

The total fees estimated to be paid to SML under the 2023 Contract for five years is GH¢5,173,091,857.00, which averages to about GH¢1 billion per year.”

President Nana Addo Dankwa Akufo-Addo acted on the report presented to him by KPMG on the agreement between the GRA and the SML.

The President has made a number of directives following the reports.

A statement issued by the Presidency on Wednesday, April 24 highlighted the directives saying  “The upstream petroleum audit and minerals audit services have not yet beencommenced, and no payments have been made in respect of those services; therefore,they may be terminated.

However, given that the upstream petroleum audit and minerals audit services could prevent significant revenue leakages, the President has directed that the Ministry and GRA conduct a comprehensive technical needs assessment, value-formoney assessment, and stakeholder engagements before implementing such services.

“The transaction audit and external price verification services may also be terminated.According to KPMG’s findings, GRA obtained partial value or benefit for those services.This was also due to a lack of monitoring on the part of GRA to ensure that SML performedthe services as stipulated in the contracts.

The President has extended his sincere gratitude to KPMG for the thorough nature of the audit conducted.”

President Nana Addo Dankwa Akufo-Addo had appointed accounting and auditing firm, KPMG to audit the contract between the Ghana Revenue Authority  (GRA) and the  Strategic Mobilisation Ghana Limited  (SML).

This matter came uo after a year-long investigation by Evans Aziamor-Mensah, Adwoa Adobea-Owusu and Manasseh Azure Awuni of , it was discovered that the company (SML), with the help of a section of Ghana’s media, had made false and unsubstantiated claims of its operations that have served as the basis for the payment it received.

The Fourth Estate asserted that, it appears the Ministry of Finance and the GRA were aware the claims were false, for some officials of the GRA said they had confronted the company about its claims of savings and volumes on two separate occasions.

A few hours after the reporters confronted the management of SML with the findings of the investigation and asked for a response, the major services it claimed to render to the government disappeared from the company’s website.