E. FUNDING GYEEDA

i.        Receipts and expensive borrowing
GYEEDA receives funding directly from the Consolidated fund and statutorily sources such as the GET Fund, the NHIS Fund, the Road Fund and the Communication Service Tax (CST). These statutory funds were set up by various legislation to meet specific objectives. Funding allocation by Parliament for GYEEDA from sources such as DAs Common Fund without the requisite amendment of Act 455 amounts to a breach of article 252 of the 1992 Constitution and Act 455 establishing the DA Assemblies Common Fund. This is a dereliction of duty on the part of Parliament and the Administrator of the District Assemblies Common Fund.

The table below shows government's financial support to NYEP between 2009 and 2012.

As shown in the table above, from 2009 to 2012, almost nine hundred and fifty million Ghana cedis (GHS950, 000,000.00) million had been expended on the NYEP. These funding sources lack legal backing as no amendments were made to the relevant laws to allow funds to be transferred to GYEEDA.

In addition, based on available figures as of 30 June 2013, provided by the Finance Department of GYEEDA, GYEEDA was indebted to the tune of two hundred and fifty nine million Ghana cedis (GHS259, 000,000.00). About 47% or one hundred and twenty two million Ghana cedis (GHS122, 000,000.00) is owed to Better Ghana Management Service Limited (BGMS). The Committee observes that at its inception, virtually all the management team members of GYEEDA resisted the BGMS engagement. A fair estimate shows that given the pre-financing nature of the arrangement with BGMS, GYEEDA is paying financing cost of about 100% per month or 1,200% per annum.

The Committee observes with concern that Government with all its spending power should be borrowing at such a high "interest" rate. The Committee believes that with the right level of financial planning, GYEEDA should be able to borrow at 50% per annum at worst.

The Committee found that GYEEDA lacks the structures and systems to effectively manage the amount of national resources it receives as a result of several factors militating against effective management of the finances of GYEEDA.

ii.       Inadequate capacity of CFO
The current CFO (Deputy National Coordinator, Finance), the most senior finance person has no track record as a competent head of finance. Indeed, the CFO admits he lacks the training and experience to operate effectively as head of finance. Accordingly, he is not able to bring best practice influence to bear on GYEEDA in terms of demonstrating financial responsibility, transparency, accountability and ethical conduct in financial resource management. The DNC Finance did not seem to have full visibility of payments made to SPs as well as the obligations of GYEEDA under various MOUs. This lack of adequate capacity in the finance unit affected the financial governance environment of GYEEDA and introduced various risks such as:

a. Inability to supervise the operations of Agric. Development Bank (ADB) and relevant rural banks to effectively mitigate the risk of siphoning of state funds at the district level. Documentation reviewed by the Committee revealed allegations of complicity in the unauthorized opening of bank accounts in the name of GYEEDA at the district level. This facilitated the unauthorized withdrawal of unclaimed beneficiary allowances through the unauthorized operation of accounts at the district level. A case in point was the opening of account number 660 operated at the Agona Branch of Komfo Anokye Rural Bank to withdraw twenty three thousand four hundred and seventy three Ghana cedis (GHS23, 473.00). There was also an attempt to transfer one hundred and twenty thousand Ghana cedis (GHS120, 000) into an account number 123 at the Pankrono Branch of the same rural bank.

b. Inadequate cost benefit analysis of contract sums to ensure there was value for money of contracts with SPs as in the case of BGMS and Zoomlion Ghana Limited.

c. Budgeting and monitoring of actual performance against budgets is virtually nonexistent thereby overlooking an important responsibility of planning and making decisions for the future. The absence of effective planning has also resulted in haphazard signing of contracts and disbursement of resources. Indeed, it would appear that GYEEDA does not have a means of adequately reviewing its transactions to provide a clear route for achieving its aims and targets. It also lacks the ability to monitor and control income and expenditure during the budget period.

d. GYEEDA does not regularly prepare financial statements monthly, quarterly or annually. Accordingly, the Committee did not see a summary of funds received and how they were expended for instance, on an annual basis.

e. GYEEDA does not have a system whether manual, spreadsheet or an accounting software to record all transactions and to be able to understand what the records mean. GYEEDA cannot boast of a recording system that could produce a record that is both complete and accurate, thus capturing all transactions correctly arithmetically to facilitate the financial audit process.

f.   There is also evidence that a series of payments were authorised and made without the knowledge of the head of finance.

iii.       Inadequate financial oversight
The Committee found that there was inadequate oversight of financial matters. This is evidenced by the absence of an Audit Report Implementation Committee/Audit Committee or any similar arrangement or an internal audit function at GYEEDA. This is the situation even though the MOYS is involved in financial decisions (especially with respect to procuring SPs). MOYS plays no further role with respect to independent and unbiased reviews and checks. As a result, there were inadequate efforts to ensure that transactions were effected in a manner to enable GYEEDA's objectives to be realized. Additionally, some contractual conditions and performance measures were not adequately met and payment to SPs were not done after checks to ensure those payments were actually in respect of beneficiaries who benefited from the Programme.