MINISTER of Finance, Ken Ofori-Atta, is challenging the Auditor General (AG), Daniel Yaw Domelevo, for appointing two of his staff onto a committee mandated to ensure proper and effective financial management practices of his office.
Mr. Ofori-Atta believes the AG does not have the power to make such nominations on behalf of the Audit Service since he was not the “Principal Account Holder”, as defined in Section 102 of Act 921.
In a letter dated May 29, 2020, the minister indicated that the Principal Account Holder was either the sector minister or political head of a “covered entity” and therefore, “the nominations by the AG, as the Principal Spending Officer, were not consistent with the provisions of Act 921 (sic).”
He has, therefore, directed the Audit Service Board to reconstitute the audit committee since the nominees ought to be “members of the governing board.”
The committee, which has representations from the Internal Audit Agency, Institute of Charted Accountants and the Principal Action Holder of the Audit Service, is mandated to ensure proper and effective financial management practices in accordance with Section 86 of the Public Financial Management Act, 2016 (Act 921).
The two persons appointed by Mr. Domelevo are Judith Kwaaku and Benjamin Codjoe. They are reportedly representing the Audit Service on a five-member audit committee to audit the accounts of his office, without recourse to the Audit Service Board (ASB), which has compelled the board to complain to the Finance Minister.
In a letter dated March 17, 2020 and signed by chairman of the board, Prof. Edward Dua Agyeman, the board accused the AG of breaching Section 18.2.3 of the Guidelines for the Effective Functioning of Audit Committees published by the Ministry of Finance in August 2017.
“When the AG was asked to explain the reason for ignoring the guidelines in making the appointment of representatives of the Audit Service onto the committee, he informed the board that his nomination was based on the Public Financial Management Regulations, 2019, L.I.2378, without quoting the appropriate section which he relied on (sic),” the letter indicated.
The board consequently requested the intervention of the Finance Minister to put things in order and stop Mr. Domelevo from fortifying the said “infractions.”
However, the AG insists he has done no wrong in nominating the two officers to represent the Audit Service on the committee, insisting that “it is within the right of the AG to appoint representatives of the Audit Service as the head of the ASB is not fit to be called a “sector minister or political head” as defined in Section 102 of Act 921.
“The ASB is appointed by the President and likewise the AG. If the appointment by the President makes an individual or a board a sector minister or a political head, then it may be argued that the AG by virtue of his appointment by the President in accordance with Article 70 is also a sector minister or a political head.
“I disagree with you on the suggestion that the board is the Principal Account Holder because it is neither the sector minister nor the political head of the Office of the Auditor General,” adding “my opinion remains unchanged and my view is fortified by the provisions of the 1992 constitution as stated above, as well as numerous provisions of the Audit Service Act.”
The AG continued, “Clearly, it means we have the office of the Auditor General, which is a constitutional independent public office; the Audit Service of Ghana, which is part of the Public Service; and the Audit Service Board.
“Furthermore, the functions of the Audit Service Board are not the same as those of other boards or councils created by the constitution. You may wish to compare Article 189 for the Audit Service Board to Article 186(2) for the Statistical Service Board and 202(2) for the Police Council and you will notice the difference.
“On the issue of the guidelines on the effective functioning of Audit Committees issued by your good self, I wish to say that these are guidelines, as so stated and not laws, so far as I know.
“I have not found any section(s) of Act 921 mandating the Minister of Finance to issue guidelines except (i) Sections 20 which provides that the minister may issue guidelines for preparation of annual budget and (2) Section 61(2) which provides that for the purpose of subsection (1), the minister shall, by regulations, or rules or guidelines published in the Gazette, regulate the format and criteria for the auction and the procedures for participation, bidding and allocation in auctions (emphasizes mine).”
With regard to directives, Mr. Domelevo said Section 4(2) (k) of Act 921 provides how directives and instructions are to be made by the minister and it states unequivocally that “for the purpose of subsection (1) and subject to the constitution and any other enactment, the minister shall issue directives and instructions necessary for the effective implementation of this Act.
“At the minimum, your directives and or instructions given in the letter and or the guidelines must meet the requirements of Article 11(7) in order to have the force of law as suggested.
“In the light of the forgoing, I urge you, honorable minister to ignore the complaints from the Service Board of whom I am a member. The Audit Committee will continue to function as a properly constituted committee.”
Animosity between the AG and the ASB has continued to rise at a time when cooperation is critical, with the growing rift spilling over to the Ministry of Finance.
By Ernest Kofi Adu