PAC refers ECG management to Attorney-General over financial infractions
The Public Accounts Committee (PAC) of Parliament has referred the management of the Electricity Company of Ghana (ECG) to the Attorney-General’s Department for possible prosecution over what it described as gross financial indiscipline, budget overruns and breaches of the Public Financial Management Act.
During its sitting last Tuesday, the committee, chaired by the Member of Parliament for Komenda-Edina-Eguafo-Abrem, Samuel Atta-Mills, said its investigations had revealed widespread irregularities in the ECG’s financial operations for 2023, involving expenditure far beyond approved limits without any board authorisation.
The committee stated that the company exceeded its approved budget in 13 expenditure items, resulting in an excess spending of GH¢189.2 million.
Mr Atta-Mills said such financial recklessness warranted sanctions under the Public Financial Management Act, 2016 (Act 921) and directed that the officials involved be referred to the Attorney-General for prosecution.
“Those managers who were involved need to face the Attorney-General for prosecution. It’s as simple as that,” Mr Atta-Mills stated.
The committee expressed concern that the ECG had spent beyond its means across multiple areas, including foreign training, cleaning, hotel accommodation, communication, consultancy and publicity, without board approval.
Audit report
The audit report presented to the committee showed that the ECG budgeted GH¢21 million for foreign training but spent GH¢91 million. Cleaning expenses rose from GH¢2.8 million to GH¢10.4 million, hotel expenses from GH¢9.3 million to GH¢12.2 million and consultancy costs from GH¢40 million to GH¢58.6 million.
Stakeholder engagement expenses jumped from GH¢3.1 million to GH¢49 million, while publicity costs climbed from GH¢5.7 million to GH¢21.8 million.
Tariff adjustment
The committee chairman described the figures as alarming and said the company’s management had violated financial regulations by committing funds without approval.
He added that such inefficiency undermined the ECG’s credibility and raised serious concerns about its continued calls for electricity tariff adjustments.
“If we manage our resources efficiently, there would be no need for continuous tariff increments.
The citizens of Ghana cannot continue to bear the cost of inefficiency,” the chairman said.
The committee also uncovered that the ECG failed to remit GH¢70.9 million in withholding taxes to the Ghana Revenue Authority (GRA) within the stipulated 14 days as required by law.
Additionally, auditors found that the ECG had underpaid State-Owned Enterprises (SOEs) and Independent Power Producers (IPPs) by GH¢1.29 billion under the Cash Waterfall Mechanism.
The chairman insisted those actions breached financial management laws and recommended that the Attorney-General investigate the matter further and take appropriate action.
ECG admits
The acting Managing Director of the ECG, Julius Kpekpena, admitted that the company had overspent in certain areas but explained that several corrective measures had since been implemented to tighten financial control.
He said part of the unremitted funds under the Cash Waterfall Mechanism had been used to pay contractors and purchase fuel for power generation.
However, he acknowledged that the decision was not in full compliance with the law.
“We are not saying that holding it was justified, but the ECG used part of the funds to pay contractors and buy liquid fuel for generation,” he told the committee.
Mr Kpekpena added that since assuming office, management had ensured full compliance with the Cash Waterfall Mechanism, with all allocations now approved by the Energy Sector Committee.
“We have now instituted full compliance and are committed to preventing future irregularities,” he assured the committee.
