Sunday, March 5, 2017

PURC Splashes GHS99k On Christmas Hampers

6:23:00 AM


The management of the Public Utilities Regulatory Commission (PURC) spent GHS99,663 on Christmas hampers for 2012, the Auditor General has revealed.

According to the latest Auditor Generals report (2014) on public boards, corporations and other statutory institutions, although the amount was released for the purchase and distribution of the hampers in 2012, the purchase of hampers was not retired nor adjusted to the personal advance account of the imprest holder in contravention of laid down regulations.

It traced the development to the absence of a mechanism in place to ensure that such advances were retired promptly.

Consequently, it recommended that management of the commission should devise a mechanism to ensure that advances were retired promptly.

The report mentioned PURC management as having indicated that the retirement of the imprest used in purchasing the hampers took place in 2013.

Investment interest

The Auditor General also faulted the management of PURC for failing to invest staff Provident Fund amounting to GHS2,843,595.05 in treasury bills as agreed on.

As a result, the Auditor General insisted that management of the commission should look for a better way to compensate the staff.

Giving the breakdown of the Provident Fund, the report said the first principal amount was GHS1,350,000 which should have earned an interest of GHS32,232.07 by the end of 2012.

The second amount of GHS896, 758 should have earned an interest of GHS25,507.22 by the close of 2012, while the third amount was GHS596,837.05 but the interest to be earned was not available.

The report said, Our checks revealed that the balance on the Provident Fund Account at the time of the investment was not enough to help the amount invested. It stands to reason, therefore, that the amount invested is the commissions own money and not that of the Provident Fund.

We therefore recommended that the interest earned on the investment was not for the Provident Fund and must be regarded as investment income for the commission, it said.

The report mentioned management of the commission as responding that its decision to add some of the interest earned on the commissions investment was to compensate staff for the loss of interest on their investments as a result of the non-investment of the Provident Fund contributions in treasury bills at an agreed time.

Software and ancillary service

The report further touched on a contract that was entered into between the Commission and Power Systems Energy Consulting of USA on June 8, 2012, for the supply of software for the commissions operations and to provide various ancillary services as detailed below:

We observed that only 50 per cent of the software cost (US$ 400,000) had been paid, leaving 50 per cent outstanding as at the end of 2012. We also noted that the total cost of the ancillary service (US$ 208,440) has been paid and expended accordingly.

However, the commission did not withhold taxes amounting to US$107,371.76 on the payments made to Power Systems and Energy Consulting of USA contrary to Section 84(2) of the Internal Revenue Act 2000 (Act 592), the report stated.

Against that backdrop, the Auditor General advised the PURC management to be abreast of the tax law and act accordingly, adding that, We also recommended that management should put in place measures to remit 50 per cent of the total sum of US$107,371.76 which is due to the tax authority and pay the outstanding amount immediately it falls due.

The report said, Management responded that the original contract of US$608,440 approved by the Public Procurement Authority (PPA) was net of taxes. This formed the basis for the 50 per cent payment net of taxes made to Power Systems Energy Consulting for work completed to date.

Subsequently, approval has been given by the Public Procurement Authority to revise the contract price of the procurement of the Dayzer Ghana Power model, ancillary services pricing and Equilibrium Capacity pricing from Messrs Power Systems Energy Consulting to include 15 per cent as the tax component to bring the total cost from US$608,440 to US$715,811.76. Therefore, the outstanding tax payments will be made for the 50 percent already paid and tax deductions made for the remaining subsequent 50 percent payments based on the new PPA approval which is inclusive of tax, it added.

Operational results

Generally, the report said total incomes to the PURC increased by 6.8 percent from GHS12,170,943 in 2011to GHS13,004,054 in 2012. That was due to increases in regulatory levies and donor funds among other inflows.

Total expenditure of the commission for 2012 amounted to GHS16,538,091 compared with GHS8,740,878 recorded in 2011, representing an increase of 89.2 percent. The major items which accounted for the increase in expenditure were personal cost which rose by 48.5 percent, commissioners allowances, 14.5 percent, administrative expenses, 39.6 percent and operational expenses 163.9 percent.

As a result of the significant expenditure incurred in the year under review as shown above, the commission recorded a deficit of GHS3,534,037 as compared to a surplus of GHS3,430,065 in 2011, a reduction of 203.0 per cent, it said.

Pro-poor water programmes

The report indicated that the pro-poor programmes undertaken by the PURC were not backed by Legislative Instrument (L.I.).

It mentioned total receipts of the pro-poor water programme as going up by 8.7 percent from GHS4,639, 238 in 2011 to GHS5,042,326 in 2012.

Total expenditure also increased by 409.8 percent from GHS927,848 in 2011 to GHS4,730,209 in 2012, it added.

Regulatory levy

According to the report, GHS25,163,214.15 was to be realised from levies for 2012 and applied in accordance with the PURC Amendment Act.

However, GHS10,761,277.11 of the above was not collected from GRIDCO as at the end of the year. As a result, the commission was not able to distribute the levies due to the beneficiaries in full, it said.

The Auditor General, therefore, recommended that management of the PURC should ensure that GHS10,761,277.11 is paid by GRIDCO.


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