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GH¢11.8 billion lost to procurement breaches in five years – Report.

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GH¢11.8 billion lost to procurement breaches in five years – Report. 45

 

 

A five-year analysis of procurement infractions in the public sector shows that the malfeasance cost the economy some GH¢11.8bn from 2015 to 2019, according to data obtained from the Ghana Institute of Procurement and Supply (GIPS).

The amount, based on audits of public expenses over the period, covers breaches affecting cash transactions, rent, contracts, loans and advances, payroll, stores, and tax irregularities.

Direct losses from stores and contracts over the five-year span was GH¢196.2m, with only those two items averaging a loss of GH¢39.2m each year.

General audit findings on the causes of the losses, according to the GIPS data, include failure to apply competition in procurement activities, poor or no inventory planning, shoddy works, and the non-execution of works after payment of funds for mobilisation.

Other factors were payment for undone projects and the lack of commitment from heads of institutions to ensure compliance and internal control.

From GH¢505m in 2015, total losses to procurement irregularities went up to GH¢2.2bn in 2016, before falling to GH¢892m in 2017.

The biggest loss over the five-year period was in 2018 when it hit GH¢5.2bn before it dropped to GH¢3bn in 2019.

Square pegs in round holes

The President of GIPS, Collins Agyemang Sarpong, attributed the phenomenon to the failure of both public and private institutions to allow trained procurement practitioners to supervise budgetary expenditure.

In a presentation at a professional seminar on “The Continuous Procurement Malfeasance in Auditor General’s Reports: Solutions and the Way Forward”, which underlined the gravity of the situation, he called for the licensing of the procurement practice to enforce ethical conduct.

“No square pegs in round holes. Non-procurement professionals should stay away from heading and working in the procurement department. Most of them become overwhelmed when faced with complex procurement of goods, works and services,” he said at the seminar, organised by the University of Professional Studies in Accra.

Also, to ensure the independence of trained procurement officers in their respective institutions, Mr. Sarpong mooted the setting up of procurement directorates—instead of units—in all institutions to allow officers to work ethically without fear of intimidation.

The GIPS boss further entreated heads of institutions to attach seriousness to the recruitment, resourcing and running of the procurement function of their institutions.

Licensing of the procurement practice

GIPS has been advocating the licensing of procurement professionals in the country to guide and control the conducts of its members.

A draft practising bill for procurement and supply professionals, which is currently at stakeholder engagement level, is set to be readied for parliamentary approval by the end of this month.

The bill, when passed, will allow GIPS to impose sanctions on members who violate ethical and professional standards in their line of duty whilst protecting them from undue influence and pressure from their superiors and influential persons.