KPMG hints at financial obligation risks if Ghana terminates GRA-SML contract

More interesting findings have emerged since the audit report on the controversial deal between the Ghana Revenue Authority (GRA) and Strategic Mobilization Ghana Ltd (SML) was made public.

According to audit firm KPMG, either party can terminate the revenue mobilization agreement.

However, the company noted in its report on the contract that such termination could have financial implications for both the government and the GRA.

According to the report, “upon termination, GoG and GRA remain liable to settle SML for services already completed but not yet paid. GoG and GRA are not entitled to a refund of any compensation already paid to SML, regardless of the cause.” of termination”.

“If GoG or GRA terminate without cause, they will be obligated to pay SML a return on investment equal to the fair value of SML’s investment in the contract,” it said.

The audit firm reported that government agencies ensure that all contracts involving the Government of Ghana are reviewed by institutional legal resources.

“For contracts that include the Government of Georgia as a party, it is recommended that the Attorney General, who acts as the government’s chief legal advisor, review the contract to ensure that the terms comply with all relevant laws and the interests of the government are in place. protected and not exposed to avoidable financial or reputational liabilities.

President Akufo-Addo on May 22 released the KPMG audit report on the controversial contract.

This release comes after weeks of pressure from Ghanaians, including civil society organisations, who demanded the full report be made public due to numerous breaches in the contract.

The President commissioned KPMG to audit the contract on January 2, 2024, with an initial deadline of January 16, 2024, later extended to February 23, 2024. Based on the audit results, SML received a total of GH ¢1,061,054,778.00 from 2018 to the present, partially fulfilling its obligations.

The report also noted that SML’s work had contributed to increased revenues in the downstream oil sector.

Contrary to the audit report’s claims, SML has disputed receiving GH¢1,061,054,778.00 for its contract with GRA, arguing that KPMG quoted the figure “without reference to investments made and taxes paid” during the period. review.

On May 8, the Presidency rejected a Right to Information (RTI) request filed by the Media Foundation for West Africa (MFWA) seeking KPMG’s full audit report.

However, on May 22, the Presidency reversed its decision and published the report.

However, according to the report, the GRA has disbursed a total of GH¢1,400,202,403.56 to SML between 2018 and 2023 for its contractual services.

These payments were made for three of the six service contracts executed by SML, despite not having approval from the Public Procurement Authority (PPA).

This disclosure is documented on page 31 of KPMG’s full report.

The reported payment figure is in stark contrast to the previously declared amount of GH¢1,061,054,778.00, the Director of Communications to the Presidency, Eugene Arhin, stated in a press release on Wednesday, April 24.

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