Financial Audit report on ECG reveals missing billions

The Herald, has obtained the audit report conducted by PricewaterhouseCoopers (PwC) concerning the Electricity Company of Ghana (ECG) and its non-adherence to the Cash Waterfall Mechanism (CWM) established by the Public Utilities Regulatory Commission (PURC).

The audit uncovers substantial disparities between the reported collections and the actual disbursements by ECG, amounting to approximately GHS3.5 billion over ECG’s CWM allocation from July 2022 to September 2023, adding this is not in line with the Cash Waterfall Mechanism for month-on-month analysis.

The report, also mentioned that from its analysis performed on the bank statements received, a net difference of GHS1.9 billion, was noted between the total collections declared on the CWM-approved schedules and the inflows consolidated from the bank account statements shared.

This comes as PURC, continues to accuse ECG and its management of refusing to comply “with the guidelines of the new CWM as directed by the President, Nana Akufo-Addo in August 2023.

“This defeats the principle of fair and equitable allocation of revenue to sector players under Level B as approved by the CWM Standing Committee in line with the revised CWM guidelines. The Commission wishes to state that ECG should co-operate and allow the CWM to function as directed by the President. Additionally, MoF should also take the necessary steps to honor its obligation by paying for the shortfalls.”

The Cash Waterfall Mechanism Validation Report for November 2023 Payment, reported the same about the ECG management’s handling of cash collected and how they are distributed.

In the audit report, PricewaterhouseCoopers revealed frustrations including a lack of cooperation from the management of ECG in carrying out its audit saying the state company in many instances refused to supply it with information, especially documents as well as respond to queries on identified infractions.

However, PricewaterhouseCoopers audit said, “From our analysis of the disbursements made from the GCB collections account and the Fidelity Single collections account, we noted that for all the months, with the exception of February 2023, the disbursements made by ECG to Non-CWM beneficiaries were in excess of its allocated amount per the CWM”.


According to the audit findings, ECG made disbursements to non-CWM beneficiaries that exceeded its allocated amount per the CWM guidelines. This discrepancy highlights a significant departure from the intended distribution mechanism outlined by PURC.

The team said it observed that collections and corresponding allocations made by ECG were consistently different from what was paid, and this according to the CWM reports was due to overpayments/underpayments to beneficiaries particularly those with Tier 2 (Level B).

The international audit firm stated that “From our analysis of the disbursements made from the GCB collections account and the Fidelity Single collections account, we noted that for all the months, with the exception of February 2023, the disbursements made by ECG to Non-CWM beneficiaries were in excess of its allocated amount per the CWM.”


The audit, conducted at the behest of the Ministry of Finance, recommends strengthening the current CWM and enhancing ECG’s compliance with its directives. Proposed measures include process improvements in billing and invoicing, as well as the implementation of technology-enabled platforms to bolster transparency and accountability.

“We have identified and described in detail our recommendations for strengthening the current CWM and the inputs from ECG going forward,” stated the audit report saying “It is imperative that ECG and other stakeholders work collaboratively to implement these recommendations and uphold the integrity of the CWM.”

This includes: Establishing billing and invoicing Process improvements at ECG; Key considerations for the CWM disbursement process; Key considerations for the management of non-tariff revenue by ECG; Medium term redevelopment of the CWM onto a technology-enabled platform to strengthen the fundamental objectives of the mechanism; Key considerations for cyber security and data protection measures at ECG (including Implementation of a Disaster Recovery Plan/Framework, Integration of Cyber Defence Mechanisms and Processes at ECG and considerations for managing third party solutions/ collaborations).


It suggested engaging with the Ministry of Energy, PURC and the other relevant stakeholders to establish the critical process of retrieving the required data/information to complete our tasks. This will also establish the foundation for the relevant process and information requirements going forward for the quarterly reviews.

“We also look forward to discussing our recommendations as PURC, ESRP and the other stakeholders plan to work with ECG to implement them to help restore confidence and promote a transparent and strengthened CWM”.

“The total collections per the CWM were lower than the total collection per the two bank statements. We have raised this with ECG and requested for explanations and supporting evidence for these disparities. As at the date of this report, ECG management were yet to revert with these explanations and supporting evidence”.

“Disbursement to CWM beneficiaries from other ECG operational accounts post the MoF directive of 21 June 2023 effective 1 July 2023. The Ministry of Finance (MoF) issued a directive on 21 June 2023, effective 1 July 2023 that ECG should operate a single account from which all collections and payments will be made. In this regard, ECG designated Fidelity Bank Account number 1070006628289 as the single collections account.


“From our validation procedures performed, we noted that some payments totalling GHS 684 million to CWM beneficiaries for the period from July 2023 to September 2023 were made from other ECG operational accounts, escrow accounts and margin accounts. Payments through these other accounts were not in line with the MoF directive issued.

“We have raised this with ECG and requested for the bank statements for these operational accounts, escrow accounts and margin accounts to validate these payments to the CWM beneficiaries. We are still yet to receive them.

As part of achieving financial sustainability in Ghana’s energy utilities and value chain, the Government of Ghana (GoG) initiated the Energy Sector Recovery Program (ESRP) in May 2019. The ESRP is a comprehensive recovery program that sets out the roadmap of policies and actions required for the financial recovery in the energy sector.

The ESRP implemented a payment mechanism in April 2020, the Cash Waterfall Mechanism (CWM), to ensure transparent, equitable and timely payment of all revenues billed and collected by the Electricity Company of Ghana (ECG) on behalf of the entire electricity generation value chain.


The CWM and the Natural Gas Clearinghouse (NGC) mechanisms were put in place to ensure equity and transparency in the disbursement of energy revenues and equitable allocation of tariff revenue collected by the Electricity Company of Ghana to all parties in the energy value chain.

This engagement seeks to validate electricity sales in terms of kWh and amount billed and collected by ECG over a defined period to confirm if these sales, billings and collections align with the requirements and outcomes of the Cash Waterfall Mechanism and its related payments. The assessment will also validate the cycle of power delivered, corresponding billing and collection as well as the full transfer of these collected funds from the regional collection accounts into the Single Collections account.

The issues of ECG’s revenues/collections and the wider energy sector debt issues have contributed to Ghana’s economic constraints. This makes this engagement critical to helping set out measures to help identify and address the challenges to help strengthen the power sector value chain.

Amongst other things, it demanded some detailed revenue assurance and validation, an understanding of the key sources of revenue for ECG i.e., tariff and non-tariff and their detailed composition /breakdown, review of revenue/cash collections from the district level and how this flows to the Head Office from the customers’ billings.

It also recommended stakeholder engagement and buy-in to align with key stakeholders (IPPs, ECG, PURC, MoEn, GoG) on the outcome of the reconciliation/validation exercise and key actions required.

The CWM report does not state clearly why this happened and the PURC notes that the CWM Standing Committee indicated how this defeats the purpose of the CWM. We generally agree with this position as the guidelines for the CWM are quite clear.

It will be important to understand from ECG’s perspective why there is a continuous lack of cooperation to follow the guidelines and thereby raising a lot of questions on its use of its collections.

It was also identified that ECG used an unprotected Microsoft Excel spreadsheet (Data Integrity and Model Security): We observed that most of the submitted CWM models did not have protected cells to limit users’ ability to interfere with allocation formulas either intentionally or by error.

It was advised that going forward, PURC will need to reconsider the use of Microsoft Excel-based spreadsheets for the CWM. To promote the process of transparency and efficient management of the mechanism, the integrity of the data entered into the spreadsheet must be safeguarded.

Key cells must be locked with control access features and enhanced access log features programmed into the spreadsheet to track any attempted changes to the inputs in the model. As suggested in our recommendation, PURC together with ESRP should consider a shared platform approach to enhance oversight and accountability from ECG, beneficiaries and the key stakeholders of Ghana’s value chain to promote confidence in the CWM and its ability to meet its objectives.

“Currently, ECG is required to submit the CWM to PURC for review and validation. As mentioned earlier, the allocations and subsequent disbursement often do not completely follow the requirements of the guidelines. It will be useful for PURC to take advantage of technology-enabled solutions to facilitate a system that provides real-time data, independent validation and a stronger reconciliation system to support a more efficient monitoring and evaluation process in the CWM declaration process.

On validation of payments to CWM beneficiaries, the report said that “From our review of payments made to CWM beneficiaries, we noted that some payments were made through ECGs operational accounts, margin accounts and escrow accounts (ADB, Consolidated Bank, Fidelity Bank, GCB, Access Bank, Zenith Bank, Bank of Africa, First Atlantic Bank, GT Bank, Omni BSIC, Republic Bank, Ecobank, ABSA, Stanbic Bank, Societe Generale, CAL Bank and Universal Merchant Bank) As at the date of this report, the bank statements of these accounts have not been made available to us to validate these payments. As such the validation of these payments could not be performed.

“The list of documents reviewed as part of the validation exercise includes the following: CWM payments (from 2022 to 2023); ECG GCB Bank Statement for account number 1011130011277 for the period from July 2022 to September 2023; Fidelity Bank statements for account number 1070006628289 for the period from January 2023 to September 2023;

Cheque registers for payments to CWM beneficiaries for the period from July 2022 to September 2023; Bank Transfer advices to various banks for payments to various CWM beneficiaries for the period from July 2022 to September 2023.

Based on the data made available to us, we adopted the following approach to the exercise: Cash collections: We obtained the bank statements of GCB collections account (1011130011277) and Fidelity single collections account (1070006628289) and analysed all collections received in the account (credit transactions in the bank statement) on a monthly basis for the period from July 2022 to September 2023.

“We then compared the total monthly collections analysed from the bank statements to the amounts reported in the CWM, highlighting the differences noted for each month.

“We obtained the bank statements of GCB collections account (1011130011277) and Fidelity single collections account (1070006628289) and analysed all disbursements in the account (debit transactions in the bank statement) on a monthly basis for the period from July 2022 to September 2023. We then identified all disbursements on a month-by-month basis made to CWM beneficiaries by obtaining and analysing the cheque register and bank transfer advices from ECG. For those payments made through the fidelity and GCB accounts, we agreed these amounts to the bank statements.

“We then excluded the total CWM payments from the total disbursements to ascertain the non-CWM disbursements made by ECG and compared these amounts to ECG’s CWM allocation. Differences between Total Collections declared on CWM and the total collections consolidated from the bank statements of the GCB main account and Fidelity Single collections account. On a monthly basis, ECG is required to report their total collections for the month for input into the CWM, which would then be distributed amongst the CWM beneficiaries.

“To assess the amounts reported by ECG, we obtained and analysed all collections received in the GCB collections account (account number 1011130011277) for the period from July 2022 to September 2023 and the Fidelity Bank Single Collections Account (account number 1070006628289) for the period from January 2023 to September 2023).

“From our analysis performed on the bank statements received, we noted a net difference of GHS1.9 billion between the total collections declared on the CWM approved schedules and the inflows consolidated from the bank account statements shared.