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SML-GRA contract: Lawyer counters KPMG findings on parliamentary ratification

Local News

25 days ago
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A Private legal practitioner, Oheneba Adusei-Poku has, in a legal opinion, challenged the findings of audit firm, KPMG, that the GRA-SML contract was not ratified by Parliament, asserting that the deal was essentially ratified by Parliament through the approval of the budgets of the Ministry of Finance in line with the Public Financial Management Act, 2016( Act 921).

Audit firm KPMG had claimed that the revenue assurance contract between Strategic Mobilisation Limited (SML) and the Ghana Revenue Authority (GRA) did not receive parliamentary approval as provided for in section 33 of the Public Financial  Management Act. But Mr Adusei-Poku has countered such a conclusion contained in the report.

Lawyer Oheneba Adusei-Poku cited several companies that have gone through the same process without ratification from parliament after they signed deals with the government. To this end, he wondered why the issue of SML is different.

"This position is again emphasized in sections 21 and 22 of the Public Financial Management Act 2016, Act 921 which deals with the preparation of the Annual Budget by the Finance Minister in "consultation with the relevant stakeholders. 

" which include the GRA.  Section 22 then provides that the said Annual Budget is then submitted to  Parliament for approval and then the Appropriation bill is also passed. Section 25 (7) of the Public Financial Management Act, 2016 (Act 921) provides that subject to parliamentary approval granted under section 21, the Minister shall grant clearance before a covered entity signs a multi-year contract. 

“The import of this  provision is to reiterate the conclusive presumption that the estimated expenditure  commitment of every covered entity has been provided for in the approved Annual  Budget which should include expenditure commitments for multi-year contracts, like the SML contract.”

It must be noted that the main object of Act 921 is to regulate the financial management of the public sector within a macroeconomic and fiscal framework.

Therefore, any contention that a covered entity can spend or commit public funds by way of the purchase of goods or services outside its Approved Budget will not only defeat the  objectives of Act 921 but will also be absurd.

It is for this reason that Section 33 of the Public Financial Management Act, 2016 (Act 921) also provides as follows:

(1) A covered entity shall not enter into any agreement with a financial commitment that binds the Government for more than one financial year or that results in a contingent liability except where the financial commitment or the contingent liability," he explained.

Following a publication by the Fourth Estate to the effect, mainly, that SML was being paid for work already being done by other companies, the President ordered an audit of the contract. KPMG, as part of its findings, noted that the contract received no parliamentary approval as mandated by law. But lawyer Adusei-Poku has quoting extensively from Ghana's laws on the matter painstakingly pointed out that KPMG's position was inaccurate.

He also argued that the state has not in anyway lost money in the whole transaction, adding that it is only when revenue is generated as a result of the blockage of loopholes SML is paid.

source: Theannouncergh.com