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25 August 2017

IMANI Recall: How to Prevent a $72m State Pension Procurement Scam [Article]

This week, two sobering news items on abuse of public funds has necessitated revisiting IMANI’s solutions that went ignored.

  1. The first one –the state pension behemoth, Social Security and National Insurance Trust (SSNIT) has supervised yet another grand waste of pensioners’ funds in a $72 m software purchase scam. They bought the wrong software at an inflated cost. Intelligent software analysts have suggested the right software for digitizing pension records and its deployment should not have cost the poor pensioner more than $2m.  The state’s tender evaluation committee must have rigged the procurement process in favour of amateur software companies who were pliant in padding the contract sums whenever their superiors wanted. We have heard the present contract sums oscillated between $17m, $27m, $34m, $66m and now $72m all within three days when the matter became public.  We have seen too many of such in recent times.  Last year, the farce repeated itself at the Driver and Vehicular Licensing Authority (DVLA) -where a contract sum (awarded on a non-competitive basis) quoted at $3.6 million for the supply of equipment to print drivers’ licenses interestingly metamorphosed into $9.9 million is just one evidence in a long list of brazen abuse of public funds and the impotence of the procurement law. The DVLA boss blamed the anomaly on human error despite the fact that the state had allegedly overpaid for the contract.

While we need to punish public officials culpable and retrieve wasted or stolen money, what worries us greatly at IMANI is the fact that these stories of brazen abuse are only heard after a political party has lost political power.  We can only hope that our new government will prevent these from happening ever again.

However, we have to urge the new government to adopt habits that can curb the anomaly. We are aware a ministry has been created to deal with public procurement. We need more than that.  Last year, IMANI suggested that ‘’all government projects costing more than 10,000 units (with a unit equivalent to 1 GHS in 2016) will require a certificate of sound value before the award of contract.

A Value for Money report must accompany the certificate of sound value and should be published on a public website. Panel hearings should be open to the public. Where the panel has no expertise in a particular project domain at hand, a call for input from external assessors should be placed on the internet and published in leading dailies. If at the end of this extended period of evaluation the expertise remains unavailable, the matter should be referred to the Auditor General for pre-project auditing.

The provision of a certificate of sound value should be time-bound, perhaps 30 calendar days upon receipt of the notice of an intent to sole-source or award enter into negotiations with the winner of a public bid from the Procurement Committee of the public agency or enterprise. There should be room for extension if a referral becomes warranted as above.

Ghana has to start making progress towards such levels of transparency if we are serious about protecting the public purse. Details of contracts awarded, including sub-contracts must be public knowledge. It is also important that Ghanaians are aware of persons behind companies that win such contracts.

Such level of transparency allows the public to track where every cedi of public funds is going and for them to raise the necessary red flags. It goes a long way to also discourage corruption.

 

Read the full paper and recommendations titled “IMANI Alert: Institute of Public Projects Excellence; A Better Way to Fight Procurement-Inspired Corruption’’. ( http://www.imaniafrica.org/2016/01/22/imani-alert-institute-of-public-projects-excellence-a-better-way-to-fight-procurement-inspired-corruption/  )

 

  1. The second story–So, I heard this morning that outgrower sugarcane farmers who caught on the fever of a revamped sugarcane factory at Komenda in the Central Region of Ghana have now turned to local gin breweries or “akpeteshie” producers to sell their little produce. IMANI warned about this very pitfall and many others when the Komenda Sugar Factory was being championed. After spending $35m on it by the previous government, it is dead.

Folks, IMANI has never said any politician’s dream isn’t possible- we have simply asked that we quantify the ventures that public funds are applied. As the new government tries to bring the Komenda sugar factory back to life, and embark on its own littering of factories in each of Ghana’s 216 districts, it must be minded about the following risk factors IMANI shared with the previous government exactly two years ago this month but went unheeded.

By: Franklin Cudjoe

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