Ministry of Finance delays release of GETFund - PAC
The Public Accounts Committee (PAC) of Parliament has cited the Ministry of Finance for delaying the release of money to the Ghana Education Trust Fund (GETFund) in breach of the GETFund Act.
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It said Section Four of the GETFund Act, 2000 (Act 581) required the payment of money accruing from the 2.5 per cent Value Added Tax (VAT) into the GETFund’s accounts within 30 days.
However, it indicated that from 2005 to 2013 monthly disbursement into the fund was usually in arrears between two and nine months.
This was contained in the PAC’s report on the performance audit report of the Auditor-General on GETFund-funded infrastructure projects in public tertiary institutions which was adopted by Parliament yesterday.
The report, which was presented by the Chairman of the PAC, Mr Kwaku Agyeman Manu, was adopted after debate by the Members of Parliament (MPs).
Increased project cost
The report stated that the delay in the release of the money to the GETFund by the Ministry of Finance allowed for price fluctuations of construction materials and interest, which shot up the cost of projects.
For instance, it said, payments to most contractors delayed between three and six months, contrary to the 28-day payment period provided for under Clause 43 of the Public Procurement Act.
“As reported by the Auditor-General, analysis of five projects completed on time showed that price fluctuations of projects could be achieved within the contract permissible range of 0-15 per cent.
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“However, due to delays in payment to contractors which resulted in extension of time, price fluctuations on some projects increased the original cost of the projects by about 44 per cent,” it said.
The report, therefore, urged the Ministry of Finance to ensure that “releases into the fund are made on time and in accordance with Section Four of the GETFund Act”.
It indicated that because payments to most contractors delayed between three and six months, contrary to the 28-day payment period, the institutions paid interest on delayed payment at a rate equivalent to the prevailing commercial rate.
For instance, it said, the Kwame Nkrumah University of Science and Technology (KNUST) paid GH¢96,560.55 as interest on delayed payment for the construction of an examination hall, while the Kumasi Polytechnic paid GH¢847,917 as interest on delayed payment for the construction of an academic complex.
Variations
The report observed that most GETFund projects underwent constant variations to add additional works without consideration to the original cost of the project.
“It was noted that most of these variations increased the contract sum between 16 and 44 per cent, which in the opinion of the committee was contrary to the acceptable level of 15 per cent,” it said.
The committee, therefore, asked the GETFund to put in place measures to ensure that no head of an institution or department was allowed to vary any ongoing project without the approval of project committees.
It recommended that projects to be varied should be justified and that availability of funds guaranteed before granting approval for the execution of such projects.
The report tasked the Technical Department of the GETFund Secretariat to monitor and demand from all consultants detailed progress reports on all GETFund projects “to ensure that they conform to technical specifications so as to promote quality assurance”.
Legislative Instrument (LI)
The report observed that the GETFund Secretariat, since its establishment in 2000, had been operating without an LI which would indicate the specific functions and activities to be undertaken by the secretariat.
It, therefore, urged the Ministry of Education to ensure that the recently developed draft LI on the GETFund Secretariat was presented to the Cabinet for onward transmission to Parliament for consideration and passage.
Speaker’s directive
The Speaker of Parliament, Mr Edward Doe Adjaho, directed that a copy of the PAC report and a copy of the day’s minutes be sent to the Minister of Education and the Administrator of the GETFund for appropriate action to be taken on them.
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