Two Ministers Embezzle State Funds

...Ministers dismiss report as red herring
.... $100,000 Spent On Vice President's House
An audit into Accounts and other related records of the Ministry of Works and Housing undertaken by auditors of the ministry has made damning findings about Minister of Information and Presidential Affairs, Jake Obetsebi-Lamptey and Minister of Private Sector Development Kwamena Bartels.

Obestebi-Lamptey is to account or refund ?150m while Bartels is to be surcharged with an amount of ?162m for allegedly causing financial loss to the state.

The two ministers however dismissed the report as without foundation in an interview with Public Agenda.

The report alleged that an amount of ?150m paid to Obestebi-Lamptey when he was Chief of Staff, for the renovation of the Castle has still not been accounted for and recommended that ?strenuous efforts should be made to have the money accounted for or refunded to ensure speedy completion of the project.? But Obestebi-Lamptey dismissed the allegation as red-herring.

The former Chief of Staff said he is unaware of any audit report. ?I have not seen any report and nobody has drawn my attention to any such report,? he told Public Agenda. ?The money was not paid to me. It was paid into the Chief of Staff account and disbursed accordingly. An account has since been rendered, so I don?t see how I come in. If the auditors or anybody has a problem with it, they can verify from the Chief of Staff?s Office. I asked at the Castle and was told the amount has already been accounted for. I have been given receipts of all payment.?

Given background to the allegation, the Special Audit Report said: ? A total of c150m was on two separate vouchers paid to the Chief of Staff from the Emergency Fund. The amount was meant to pay for variation cost on the renovation of the Castle.

According to the report, because the work had been awarded to 12 contractors and was being supervised by the AESL ?it is inappropriate for the Chief of Staff to have used memo to collect an amount of ?150m meant for the payment of the contract works.

"The Acting Chief Director is alleged to have sent a letter reminding the Chief of Staff to account for the money but no response had been received. The matter had therefore been referred to the Deputy Minister of Works and Housing to pursue the recovery."

The report said four of 50 bungalows renovated under a special scheme to provide accommodation for Cabinet Ministers and other officials of government no longer belong to government. Therefore, an amount of 162.5m spent on rehabilitating the four bungalows was money lost to the state and recommended that Bartels, who authorised the renovation when he was Minister of Works and Housing and the department in the Ministry that undertook the renovation ought to be surcharged with the amount.

?We are surcharging the CTA/Housing and the former Minister Kwamena Bartels for the loss of ?162,526,525 to the state.? Responding, an ebullient Kwamena Bartels said he has caused no financial loss to the state. ?The list of bungalows renovated was given to me by the Directors of the Ministry. I have no hand in their preparation. The tender was advertised as required by the law of the land and the contract accordingly awarded. I don?t see where I could be indicted.?

He told Public Agenda that before he left the Works and Housing Ministry for his new posting, he asked the auditors to clear everything he had done with them.

?Before I left, I called the auditors to verify and was told that the directors had answered all the queries raised. This particular issue has been resolved.? He directed Agenda to check up with the Chief Director at the Ministry of Works and Housing, Ohene Okai who collaborated the assertion by the Minister.

"As far as I am concerned, this matter has been dealt with already, Okai said. "The Auditor General Department sent us a query which we answered. He has not disputed our assertion, so where is this thing coming from?"

"In any case, there has been no loss to the state. If anything at all, the state of Ghana gained from the sale of the four bungalows. Following the rehabilitation, the value of the property on the open market appreciated," Okai told the Agenda. The Ministry of Works and Housing intends to hold a press conference early in the week to put the ghost of the allegations to rest.

Giving the background to the charge, the audit report signed for the Acting Auditor-General by Mabel Irene Krow, Assistant Director said: ?Under the Re-development of Government Residential Area Scheme, 25 bungalows were disposed of in the year 2000 and were therefore struck off from the ministry?s pool. Nevertheless, four of the bungalows were awarded contract renovation under the current rehabilitation of 50 Government bungalows at a total cost of ?162,526,525.?

The report said it noted lack of co-ordination among the key personnel at the Ministry of Works and Housing resulting in the error and loss of funds to the state. ?Similarly, monitoring and supervision was inadequate resulting in the wrongful renovation of the four bungalows.?

The report said the Chief Technical Advisor/Housing explained that the error occurred due to the rush that had characterized the award and execution of the contract. ?As stated in article 187 clause 7(b) of the 1992 Constitution which states among others that that ?the Auditor-General may disallow any item of expenditure which is contrary to law and surcharge?..the amount of any loss or deficiency, upon any person by whose negligence or misconduct the loss or deficiency has been incurred, we are surcharging the CTA/Housing and the former Minister Kwamena Bartels for the loss of ?162,526,525 to the state.?

The report said: ?Lack of co-ordination among key players at the helm of affairs at the Ministry, inadequate controls and, monitoring, supervision over Special Project Account (SPA) resulted in the loss of ?577,019,585 to the State. Apart from those attributed to the former Chief of Staff and ex-Works and Housing Minister, the report alleged that the ministry paid additional ?140m to renovate bungalows which were in ruins after an expenditure of ?59,374,750 had been spend rehabilitating them.

Non-adherence to directives on interior decoration resulted in the loss of ?68,867,125 and ?28,561,000. Landlords evaded tax amounting to c12,200,000. The report said an extra amount of ?36,790,025 was paid to one contractor, M/S Marios Construction Works in addition to the original contract sum of ?58,700,160 in respect of Bungalow No. 33 Patrice Lumumba Road, which is irregular.

?We recommend that strenuous efforts should be made to recover the total amount of ?577,019,585 from the officers and ensure that funds are used effectively, efficiently and economically.?

The report found that ?further indiscriminate violations of Rules and Regulations with regard to mobilization advances under contract as stated in FAR 612 triggered the danger of ?294,528,980.22 financial loss to the state.

?We urge Management to rectify the above anomalies to forestall the danger of financial loss to the state and to ensure that due procedures with regard to contract awards are followed.? It spoke of ?additional variations of ?533,771,296 in the contract of ?325,509,100 awarded to M/S Fulki Limited for the renovation of the Vice-President?s Residence being neither authorized no approved and recommended that approval be sought for the additional works done to allow the expenditure stand charged to the account. In addition to over ?112,609,138 being spent on rehabilitating three Non-Ministerial Bungalows, ?a total amount of ?917,334,640 was pre-paid to Carpertland Limited and Stepmen Furniture Centre without security guarantee.

The report urged management to ?regularize the anomaly and ensure that quality goods are delivered according to required specifications.?