The Parliamentary Select Committee on Finance has advised the government to fully resource the Audit Service to allow it to effectively carry out its audit role in the country.
The committee noted that the scope of operation of the audit service had expanded over the years following the creation of new districts and expected to further expand due to the creation of the six new regions, something which required that the government increases its allocation to the institution.
Furthermore, the implementation of a number of government policy initiatives, including the one district, one factory, free senior high school, planting for food and jobs and the transfer of US$1 million to every constituency will require that the Audit Service intensifies and extends its audit activities to cover the utilisation of these resources.
This was contained in the committee’s report on the 2019 budget estimates of the Ghana Audit Service (GAS).
“The expanding scope of the operations of the audit service must correspond with increasing budgetary allocation to allow the service to perform its mandate effectively,” the report noted.
The committee also observed that the audit service required allocation of additional resources to recruit additional staff.
This is to strengthen the human resource capacity of the audit service to efficiently scrutinise public expenditure.
The Auditor General, Mr Daniel Domelovo, when he appeared before the committee, said the service intended to recruit additional 100 staff to augment its staff strength and replace retiring officers in 2019.
Officials from the Ministry of Finance, however, told the committee that clearance had been given to the audit service to recruit 200 staff this year.
Budgetary requirement and allocation
The committee noted that the budgetary requirements of the audit service as submitted to the President for the 2019 year had not been fully met.
The committee stated that contrary to Article 179 (2) (b) of the 1992 Constitution and the Audit Service Act 2000, the Finance Ministry continued to give budget ceilings and restrictions to the audit service, resulting in the revision of the budgetary requirements of the service from GH¢387.93 million to GH¢316.44 million, leaving a shortfall of GH¢71.48 million.
The Government of Ghana (GoG) CAPEX requirement was also slashed from GH¢17.78 million to GH¢5million, leaving a funding gap of GH¢12.78 million which is expected to be financed by a capital expenditure support from KFW.
Unfortunately, the capital expenditure support from the KFW was also reduced from GH¢23.52 million to GH¢7.21 million, resulting in a cumulative capital expenditure financing gap of GH¢29.05 million.
Release of budgetary allocations
The committee also noted that inadequate and untimely release of the budgetary allocations hampered the timely execution of the planned activities of the service.
Out of an allocation of GH¢282.93 million allocated to the service in 2018, only GH¢202.27 million, representing 71.50 per cent was released.
Mr Domelovo informed the committee that the primary challenge was the irregular and untimely release of the funds which had been affecting his ability to effectively carry out his mandate and submit the required reports to Parliament.
He indicated that audits were seasonal in nature and this required that funds should be released timeously for the audit service to carry out its activities within specific periods in the year.
He added that quarterly release of funds affected the effectiveness and the ability of the service to complete its statutory audits and submit timely reports to Parliament.
The committee, therefore, advised the Ministry of Finance to release at least 50 per cent of the appropriation of goods and services, which were related to the core activity of the audit service upfront at the beginning of each year.