CSOs sue govt over SML contract - Seek recovery of GH¢1 billion to state
Five civil society organisations (CSOs) have sued the government over the contract awarded to Strategic Mobilisation Limited (SML) for audit services and revenue assurance.
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The CSOs which include the Centre for Democratic Development Ghana (CDD-Ghana), the Africa Centre for Energy Policy (ACEP), the Ghana Anti-Corruption Coalition (GACC), and the Human Rights and Governance Centre, are seeking the recovery of more than GH¢1 billion paid to SML.
The lawsuit filed at the Accra High Court last Thursday is against SML, the Ghana Revenue Authority (GRA), the Attorney-General and a former Minister of Finance, Ken Ofori-Atta.
It is the contention of the CSOs that the seven contracts awarded SML were illegal as they breached the Public Procurement Act, 2016 (Act 663), while no assessment was conducted to ascertain whether the contract offered value for money for the country or not.
With regard to the procurement breaches, the plaintiffs averred that SML was not registered as a supplier with the Public Procurement Authority (PPA) before it was awarded the contracts contrary to the Public Procurement Regulations, 2022 (L.I 2466).
Again, the plaintiffs argued that although Act 663 required PPA’s approval for single-sourced contracts, the GRA failed to seek such approvals before entering into the contracts with SML.
SML also violated the Public Financial Management Act, 2016 (Act 921) due to the failure of the GRA to seek parliamentary approval, the plaintiffs averred.
Reliefs
The CSOs are seeking a declaration from the court that SML’s failure to register with the PPA as a supplier violated L.I 2466, while the failure to obtain PPA’s approval before the GRA awarded the contracts to SML also violated Section 40 of Act 663.
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Again, the plaintiffs are asking the High Court to declare the contract as void due to the lack of parliamentary ratification in line with Act 921.
The plaintiffs are further asking for a declaration that the ratification of the contracts by the PPA on August 27, 2020 was illegal as the authority did not have the power to retrospectively approve contracts.
Background
President Nana Addo Dankwa Akufo-Addo in a letter dated December 29, 2023, appointed KPMG to conduct an audit of the contracts and related transactions between GRA and SML.
That was after a brouhaha and public outcry over the contracts, which some argued were not beneficial to the country.
KPMG was tasked to review the work and activities of SML about the contracts with GRA, and assess the propriety of procurement and contracting processes as well as the appropriateness of cost value analysis in the performance of the contracts.
In May this year, KPMG released its report and recommended an “orderly resolution” in the contract between the GRA and the SML, including seeking parliamentary approval.
“The contract did not receive parliamentary approval as required by section 33 of the Public Financial Management Act, 2016 (PFMA Act 921). Parliamentary approval should be sought to regularise the contract to meet the existing legal requirement, if practicable,” it said, as part of its recommendations.
The firm said although the orderly resolution approach was more accustomed to the financial services sector, it was being recommended for consideration in the context of the State’s contract with SML because it “prioritises a review of the existing contracts with the view to addressing noticeable complexities and areas of concerns in a mutually negotiated and acceptable manner”.
While the Minority also insists on parliamentary approval, the Majority Leader, Alexander Afenyo Markin, said the specific contracts covering SML did not warrant parliamentary approval because although it was multi-year, it was between two local entities and not an international contract which required that approval from Parliament.
Writer’s email; emma.hawkson@graphic.com.gh