GRA-SML deal: Akufo-Addo accepts KPMG’s advice to halt upstream audit services
President Nana Addo Dankwa Akufo-Addo has accepted a recommendation by the accounting and auditing firm, KPMG to discontinue the upstream petroleum and minerals audit services previously provided to the Ghana Revenue Authority (GRA) by Strategic Mobilisation Limited (SML).
A statement issued by the Presidency on Wednesday, April 24 on the KPMG report stated that “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 performed the services as stipulated in the contracts.
“KPMG’s investigation found that GRA has introduced external price verification tools as part of ICUMS, among its other functions. This renders the reliance on SML for external price verification redundant.”
GRA-SML deal: Akufo-Addo acts on KPMG report; orders review of upstream petroleum audit
President Akufo-Addo acted on the report presented to him by KPMG on the agreement between the GRA and the SML.
The President made a number of directives upon reviewing the report.
The statement highlighted the directives saying “The upstream petroleum audit and minerals audit services have not yet been commenced, 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 performed
the services as stipulated in the contracts. KPMG’s investigation found that GRA has introduced external price verification tools as part of ICUMS, among its other functions. This renders the reliance on SML for external price verification redundant.
“There is a clear need for the downstream petroleum audit services provided by SML. GRA
and the State have benefited from these services since SML commenced providing them.
There has been an increase in volumes of 1.7 billion litres and an increase in tax revenue
to the State of GHS 2.45 billion. KPMG also observed that there were qualitative benefits,
including a 24/7 electronic real-time monitoring of outflow and partial monitoring of
inflows of petroleum products at depots where SML had installed flowmeters and six
levels of reconciliation done by SML.
“This minimises the occurrence of under-declarations. However, it is important to review the contract for downstream petroleum audit services, particularly the fee structure. Given the experience and proficiency of SML over the last four years of providing this service, the President has directed that the fee structure be changed from a variable to a fixed fee structure. Other provisions of the contract worth reviewing include clauses on intellectual property rights, termination, and service delivery expectations. SML’s performance in any renegotiated contracts should be monitored and evaluated periodically to ensure that it meets expectations. Any renegotiated contract should be compliant with section 33 of the PFMA.”
Source link
