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06 July 2017

EOCO investigates EC officials over missing GH¢480,000

The Economic and Organized Crime Office (EOCO) has begun investigations into the loss of over GHS480,000 from the Electoral Commission (EC)’s Endowment Fund.

The investigative body is said to be investigating three top officers including the commission’s Deputy Chairperson F&A, Georgina Opoku Amankwah, Chief Accountant Kwaku Owusu Agyei-Larbi and its Finance Officer Joseph Kwaku Asamoah over the missing money.

A letter dated July 4, 2017 addressed to EC boss Charlotte Osei from the Acting Executive Director of EOCO, ACP K. K Amoah(Rtd) said it is investigating “the loss of about GH¢480,000 from the Endowment Fund at the Electoral Commission,” with the suspects assisting in investigations.

The letter added that the officers while assisting with the investigation should be made to go on leave, while investigations proceed.

As a result of the request by the EOCO, Chairperson of the Electoral Commission, Charlotte Osei has directed the three officers to proceed on leave.

Below is the Audit report, the basis upon which EOCO has commenced investigations

TABLE OF CONTENTS

 

Content                                                                                                  Page

Background & Scope                                                                              2

Methodology and Objectives                                                                5

Schedule of Misappropriated Funds                                                  8

Key Audit Findings                                                                                 9

Conclusions

 

INTRODUCTION AND BACKGROUND

 

1.0     Introduction

The Electoral Commission Staff Welfare Schemes were inaugurated on 5th June, 2009 to cater for the welfare.  Consequently, a thirteen (13) member board of administrators was set up to administer the management of the Welfare Schemes namely:

  1. Endowment
  2. Retirement Scheme
  3. Funeral Scheme

 

The Board under the Chairmanship of the Deputy Chairman (Finance and Administration) and assisted by Commission member had its first meeting on 17th June, 2009 and members were appointed to serve on the various schemes.

The Board has a representation form the Commission, the Directors, Senior Staff Association and the Local Trade Union of the Commission and two other co-opted members.  The compositions of the three (3) schemes are as follows:-

  1. Endowment Fund
  • Director (Finance)
  • Chief Accountant
  • Local Union Representative
  1. Retirement Scheme
  • Director (Human Resource and General Services)
  • Senior Staff Representative
  • Local Union Representative
  • Co-opted Member
  1. Funeral Scheme
  • Director
  • Senior Staff Representative
  • Local Union Representative
  • Co-opted Member

The Board identified and invited five (5) financial institutions namely: Ecobank Development Investment Limited, Fidelity Bank, NDK Financial Services, Databank and Unique Trust Bank who came to make presentations on their business portfolio.  On the account of their presentation, the house decided to invest contributions made by staff with the NDK Financial Services.

It is important to state that the first deductions took effect from November, 2008 and the first investment was lodged with NDK Financial Services on 7th September, 2009 with an initial sum of ¢168,352.58.  This amount was an accumulation of staff deductions covering a period of ten months (November, 2008 – August 2009.

The initial amount of GH¢168,352.58 was deposited on 7th September at a rate of 31% p.a. for al period of three months.

The EC staff Endowment Fund among other was a 5% monthly deduction from the basic salary of members of staff.  In 2015, the deduction was raised to 10% and this has been so to date.

Since the first investment, periodic release of staff deductions have been invested with NDK Financial Services and principal plus interest have been re-invested as and when they fall due.

Investment Procedure

The Endowment Committee is supposed to receive monthly deductions of members of staff contributions from the cash office of the Commission, for onward submission to NDK Financial Services for investment purposes.

Payment of Benefits

Dis-investment of total amount due retired members are deposited into our account with Ecobank.  Cheques are written to individual retirees for payment of their benefits.  The signatories are the Deputy Chairman (Finance and Administration), Director of Finance and the Chief Accountant.  It is a mandatory that all three sign the cheques.

 

METHODOLOGY

The method used for the audit included:

  • Meeting with the then Director of Finance to discuss matters arising.
  • Capturing all deliberations held between the audit team and the Fund Managers.
  • Examination of all relevant documents, payments vouchers, data and available references necessary for the conduct of the audit.

 

OBJECTIVES

The objectives of the audit were as follows:

  • To establish the total amount of funds misappropriated.
  • To ascertain the circumstances leading to the misappropriation of funds
  • To establish the level of control mechanisms on the receipt and disbursement of funds.

 

Schedule of Cheques (Staff deductions) received from Cashiers officers for onward submission to NDK                          Financial Services for Investment purpose.

 

2011/2012
Month Cheq. No. Amount GH¢ Receipt No.                                                                                                            CertificateNo. Month Cheq. No. Amount GH¢ Receipt No.CertificateNo.
Jan. 11 117098 23,994.52 Jan. 12 523111 38,927.23
Feb. 11 117623 24,005.06 Feb. 12 523181 39,865.22
Mar. 11 _ 25,735.66 Mar. 12 _ 40,351.63
Apr. 11 Apr. 12 614070 41,836.36
May,11 254318 24,281.91 May, 12 614404 40,497.25 009782
June,11 254257 24,987.53 June, 12 615461 39,901.01 0005937
Jul. 11 378442 24.847.67 Jul. 12 614904 39,564.96 0006471
Aug. 11 378634 24,583.52 Aug. 12 614929 47,530.38 0006614
Sept. 11 _ 25,239.21 Sept. 12 816021 46,858.25 0000213
Oct. 11 378999 38,368.21 Oct. 12 _ 47,384.84
Nov. 11 379086 39,711.60 Nov. 12 922744 47,754.52
Dec. 11 522851 38,969.15 Dec. 12 _ 48,521.29

 

 

2013/2014
Month Cheq. No. Amount GH¢ Receipt No.                                                                                                            CertificateNo. Month Cheq. No. Amount GH¢ Receipt No.CertificateNo.
Jan. 2013 923299 47,465.65 Jan. 14 _ 61,290.99
Feb. 2013 024458 48,136.88 Feb. 14 082072 60,692.47
Mar.2013 035356 47,713.65 Mar. 14
Apr. 2013 035498 47,608.61 Apr. 12
May 2013 035730 55,857.16 0008274 May, 12
June 2013 035729 55,666.64 June, 12
Jul. 2013 035884 55,487.56 Jul. 12
Aug. 2013 035885/035700 56,107.16 Aug. 12
Sept. 2013 081854 60,635.93 Sept. 12
Oct. 2013 081855 60,538.07 Oct. 12
Nov. 2013 081853 60,503.75 Nov. 12 081971 59,009.27
Dec. 2013 081850 60,744.10 Dec. 12 082298 58,956.03

 

MISAPPROPRIATED AMOUNTS OF ENDOWMENT FUND

 

              DATE AMOUNT PV NO.
 MARCH 14 GHC 59,996.06 243/8/14
 APRIL     14 GHC 60,474.04 254/9/14
 MAY      14 GHC 60,210.53 337/10/14
 JUNE     14 GHC 59,191.44 344/10/14
 JULY      14 GHC 59,891.73 389/10/14
 AUG      14 GHC 60,351.57 470/10/14
 SEPT      14 GHC 60,102.63 516/12/14
 OCT      14 GHC 59,959.87 563/12/14
   TOTALS GHC 480,177.87  

 

 

KEY AUDIT FINDINGS

1.0     Non-Release of Funds

The audit team identified during the audit that there was non-release of funds (i.e. staff deductions) by the Commission to the Fund Managers for onward submission to NDK Financial Services for the period covering March 2014to October 2014 and this amounted to Four Hundred and Eighty Thousand, One Hundred and Seventy Seven Ghana Cedisand  Eighty Seven Pesewas .  This denied existing members and also retirees of interest on funds if it had been invested for the period stated.

Additionally, those on retirement received their benefit excluding theinterest on the un-invested funds and this left gaps in the computation of individual staff members contribution.

Auditees Response – “Indeed the Commission found itself in a very difficult financial situation from 2012 to 2014.  This crisis was characterized by non-payment of salaries, salary related allowances and non-payments to service providers. This situation necessitated utilizing funds available by transferring funds from the Commissions Main and Special Accounts to its Operations Accounts to cater for operationalactivities.  In addition to this, the Commission did not make any financial savings in year 2012 as a result, of costs associated with the implementation of the GIFMIS”.

Recommendation

The audit team would strongly like to recommend for the Commission to pay deductions covering the period in question plus any outstanding interest payments accruing on their investments to be made to the Fund.

2.0     Late Release of Cheques

The audit team also noted with great concern that monthly cheques to be issued to the Fund were released very late and in some cases were never released.  For e.g a cheque of Forty–seven Thousand, Seven Hundred and Fifty–four Ghana Cedis (¢47,754.54).  Fifty –two pesewas with cheques no. 922744 meant for payment into thefund for the month of Nov 2012 was issued on 31/12/2012, being one month after its due date.  Such late submission of cheques denied contributors to the fund the opportunity to earn any interest income had the monies been received and invested earlier.

3.0     Irregular Meetings by Trustees of the Scheme

As per the rules and regulations of the Endowment Fund, the scheme shall have four persons amongst the Board to act as Trustees of the scheme.  The essence of the Trustees group would be to meet reqularly to discuss issues and make resolutions on matters affecting the scheme.  However, audit checks revealed that it was very difficult to form a quorum to meet on a regular basis to deliberate on issues affecting the scheme.  Some members of the trustees cited failure to give early notices as reasons for their inability to show up at meetings.    Others also explained that they did not receive any notices of such meetings at all.

Recommendation

The audit team would like to all for strict adherence to the laid down rules and regulations governing the activities of the scheme to enhance its operations.

4.0     Procedural lapses

The Electoral Commission migrated onto the Controller and Accountant General Payroll in May 2013.  Consequently, the Controller and Accountant General’s Department resorted to releasing funds to the Commission for onward payments into the Staff Endowment Fund. There was no designated bank accounts of the scheme to cater for receipts releases from the CAGD. Regrettably, funds were released into the Commissions Main Accounts which was meant for a different purpose.  This practice presented a challenge, in that it was difficult for the trustees  to ascertain and monitor whether the releases had actually been received by the Commission or not especially as there were no prompts or alerts by the Commission to the fund managers.

The scheme only had an account to cater for payments to be made to beneficiaries but had no account to cater for receipts from CAGD.

Recommendation

Audit would like to strongly recommend for accounts of the Scheme before any subsequent disbursements are made to beneficiaries.  This will allow for easy monitoring of funds meant for the scheme.

5.0     Account Signatories

The staff Endowment Fund had three signatories to its Ecobank account meant to cater for beneficiaries of the scheme.  The signatories included the Deputy Chairman (Finance and Administration), Director of Finance and Chief Accountant.  However, Audit checks revealeded that, when any one signatory to the account was inundated with a busy schedule, it became difficult for beneficiaries to access their funds as all three signatories were required to endorse and sign cheques before monies could be retrieved.

Recommendation

The audit team would strongly like to recommend that all signatories to the schemes beneficiary account must avail themselves at all times in order for beneficiaries to access their funds without any difficulty.  Alternatively, the number of signatories to the account could be reduced to two to create more ease when beneficiaries have access their funds.

 

The post EOCO investigates EC officials over missing GH¢480,000 appeared first on Kasapa102.5FM.

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