The Auditor General’s report for the year ending 2020 has noted that cash management irregularities at the Bulk Oil Storage and Transportation (BOST) and lack of prudent planning led to the loss of $5,129,170
The report stated that Regulation 78 of the Public Financial Management Regulations, 2019, (L I. 2378) provides that a Principal Spending Officer of a covered entity is personally responsible for ensuring in respect of each payment of that covered entity, a) the validity, accuracy and legality of the claim for the payment; b) that evidence of services received, certificates for work done and any other supporting documents exists.
Contrarily, it said, BOST contracted America Tank and Vessel Inc. (AT&V) in July 2006 to supply storage tanks and pipelines and ship
same to Ghana. The contractor supplied and installed the tanks but failed to procure and ship the pipelines. Another team went back in 2018 to assess the status of the pipeline and reported that the pipeline be sandblasted and coated before it can be shipped because of the corrosion of over (13) thirteen years.
“As a result, Bayou Pipe Coating Company was contracted to coat the pipelines and ship to Ghana on January 25, 2019. The contract sum for the project was US$4,430,116.84 with an additional change order of US$653,254.61 and ancillary fees of US$45,798.60 bringing the revised contract sum to US$5,129,170.05 of which all have been paid.
“However, the audit team was not provided details and evidence of approval to the change order stated in the reconciliation with Bayou which was submitted for our review. Also, Management made payment of US$228,125.00 to C- Specs as part of its reconciliation without justification.
“As at the time of our audit in October, 2020, the pipelines have still not been shipped to Ghana, though the intended sandblasting and coating had been done as far back as June, 2019. Lack of proper financial planning to ensure that funds were made available for the completion of the project occasioned the loss.
“This resulted in loss of funds due to the inability of Management
Report of the Auditor General on the Public Accounts of Ghana – Public Boards, Corporations and Other Statutory Institutions for the year ended 31 December 2020 108 to ensure the completion of the initial contract between BOST and
AT&V and the abandonment of the pipelines in Houston, USA.
- BOST stands the risk of incurring another cost due to the delay in shipping the coated product to Ghana.”
The report said “We urged Management to provide the necessary information regarding the details of the change order and evidence of its approval from the approving authority for our audit purposes.
“Management should also provide justification for the payment of US$228,125.00 made to C- Specs for our review and again justify the delays in bringing the pipeline to Ghana for installation and take immediate action to prevent the further delay.
“Management responded that, the delay in bringing the pipeline to Ghana for installation was as a result of a dispute between the contracting parties (AT&V and BOST) due to frequent changes that occurred at the business front and lack of funds for the storage, sand blasting and the shipment.
“Management has since managed to complete the payment of the outstanding bill of US$5,129,170.05 for the completion of the sandblasting and recoating of the pipes to be completed. The next stage is to procure the services of a shipping agent to ship the pipes to Ghana. The internal processes for the procurement of the shipping service have begun.”
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