Akufo-Addo orders amendments to GRA-SML contract

President Akufo-Addo has asked the Ministry of Finance and Ghana Revenue Authority to renegotiate the contract with Strategic Mobilisation Limited (SML) to ensure efficiency and value for money.

According to a statement from the Jubilee House Communications Directorate, the President took action based on the findings and recommendations made by KPMG and has since directed the Ministry of Finance and the Ghana Revenue Authority to implement key changes via a letter dated Thursday, April 18, 2024.

KPMG audited the contract between the Ghana Revenue Authority and SML, which was alleged by the Fourth Estate news portal to have been questionable. The contract was signed to monitor and audit the downstream petroleum sector, upstream petroleum production, and mineral and metal resource value chains. Accordingly, the President requested a suspension of the contract’s performance.

Per the statement from the presidency, the audit revealed significant oversight issues in transactions between the Ghana Revenue Authority (GRA) and SML, including a lack of due diligence and procedural lapses.

The audit revealed that GRA sought approval multiple times to engage SML through single-source procurement, leading to subcontracting and service expansions without proper approvals by the Public Procurement Authority.

Additionally, the audit highlighted governance deficiencies, such as a lack of parliamentary approval for multi-year contracts and board discussions. SML’s performance was found to be partial, with downstream petroleum audit services showing substantial revenue increments and qualitative benefits.

The Presidency reported that total fees paid to SML from 2018 to suspension were GH¢1,061,054,778.00, with an estimated fee of GH¢5,173,091,857.00 to be paid to SML for the 2023 contract.

Responding to the findings and recommendations from KPMG, the President directed an assessment of the upstream petroleum audit and mineral audit services of SML before commencement, considering their importance in sealing up revenue leakages.

He also ordered the termination of transaction audit and external price verification services due to partial value, a lack of monitoring, and the potential redundancy of external price verification services by GRA’s ICUMS platform.

The President emphasized the need for SML’s downstream petroleum audit services, recommending a fixed fee structure and periodic monitoring of renegotiated contracts to ensure compliance and performance.

“The Ministry of Finance and the Ghana Revenue Authority are to give effect to the above directives of the President immediately and provide the Office of the President with an update on the steps taken,” the statement added.