MINISTY OF FRNANCE REPUBLIC OF GHANA GHANA ECONOMIC MANAGEMENT STRENGTHENINi TECHNICAL ASSISTANT (GEMS-TA) AUDITED FINANCIAL STATEMENTS (202.1) • MANAGEMENT LETTER (2021) #PEER / Professino Ethica/ fi efficient I Responsive j Tra nsforming Gt ana Beyond AId TABLE OPCONTENTS CONTENTS PART ONE - AUDITED FINANCIAL STATEMENTS PAGE PROJECT BACKGROUND INFORMATION 1-3 GENERAL INFORMATION 4-4 INDEPENDENT AUDITOR'S REPORT 5-7 STATEMENT OF FINANCIAL POSITION 8-8 SOURCES AND USES OF FUNDS 9-9 NOTES TO THE FINANCIAL STAEMENTS 10-15 PART TWO -MANAGEMENT LETTER INTRODUCTION 1-1 AUDIT OBJECTIVES 1-2 AUDIT SCOPE AND METHODOLOGY 2-2 AUDITING STANDARDS 2-3 STATEMENT OF RESPONSIBILITY 3-3 STATUS OF INTERNAL CONTROL SYSTEM 3-3 KEY PERSONNEL 3-3 SUMMARY OF FINDINGS AND RECOMMENDATIONS 3-4 DETAILS OF FINDINGS AND RECOMMENDATIONS 5-9 ACKNOWLEDGEMENT 10-10 DISTRIBUTIONS 10-10 10-10 FOLLO UP ON PREVIOUS AUDIT REPORT 11-13 MINIRY OF FINANCE REPUBLIC OF GHANA GHANA ECONOMIC MANAGEMENT STRENITHENING TECHNICAL ASSISTANT CEEMS-TA) AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021 #PEER / Professional / Ethical / Efficient j Responsive I Transforming Glana Beyond Aid TABLE OF CONTIENTS CONTENTS PAGE REFERENCE PROJECT BACKGROUND INFORMATION 1-3 GENERAL INFORMATION 4-4 INDEPENDENT AUDITOR'S REPORT 5-7 STATEMENT OF FINANCIAL POSITION 8-8 SOURCES AND USES OF FUNDS 9-9 NOTES TO THE FINANCIAL STAEMENTS 10-16 GHANA ECONOMIC MANAGEMENT STRENGTHENING TECHNICAL ASSISTANCE (GEMS-TAJ PROJECT Introduction Ghan Econoio Management Strengthening Technical Assistance (GEMS.TA) Project referenced Credit Number 5896-GMH is fuinded through Credit by the international Development Association {IDA) at an estimated cast of U8$15 million, Th approval date as of Board presentation was August 30, 2016 and became effective iv January i, 2017. The Borrower is the Ministry of Finance on behalf of the Government of Ghana. Project Beneficiaries The beneficiaries of the project include the Ministry of Finance (MoF), specifically the Debt Management Division (DMD), Public Investment Division (PID), External Resources Mobilization Division (ERMD), Budget Division (BD), and the Monitoring and Evaluation (M&E) Unit; the Ghana Revenue Authority (GRA); the National Development Planning Commission (NDPC), five targeted SOEs; and selected Ministries, Departments, and Agencies (MDAs) The ultimate beneficiaries will be the citizens of Ghana, who will benefit from improved economic benefits of the GoG's domestic revenue mobilization reduced debt burden, prioritized capital spending program, and enhanced performance of SOEs. Project Development Objective(s) The Project Development Objective (PDO) is to strengther the Government of Ghana's institutional capacity for revenue and expenditure management. This will be achieved by improving the Government's taxpayer database and enhancing capacity for the management of public debt, public investments, and SEs. GEMS-TA Fina ncia/ Statemnen ts 2021 Pa2ge: Project's Components Component 1: Strengthening GRA's Business Intelligence System - US$4.Omillion The overall objective of this component is to improve taX compliance, integrate income assessment regardless of source and location, simplify the processes, and align with international tax rules. Component 2: Strengthening Debt Management- US$12million The objective of this component is to strengthen the MoF's capacity to manage public debt with a high degree of transparency as well as to improve treasury management and forecasting This component cOmplements Prior Actiens (PAs 4 and 5 of the Development Policy Operation (DpQ), Component 3: Strengthening Capacity in Public Investment Managemnt - US$4.0million The overall objective is to develop and institutionalize a ftnctional, transparent process for public investment programming that is applied across the Government. Such a process will help to improve the contribuion of public investment to growth and economic development in Ghana, It seeks to achieve this by supporting the establishment and implementation of a functional PIIV system.- Component 4: Improving the Governance of SOEs -US$3.25million The objective is to improve S E governance, the project will support reforms aimed at (a) consolidating the state's ownerShip role thru-gh an equity study and preparatory work for setting up a single entity responsible for overseeing SOEs; (b) establishing the SOE single entity; and (c) piloting corporate governance improvements in five SOE3s. A brief description of each of the subcomponents is rovided below, including heeactiit torbe suprte the proposed project, This component complements PAs and 7 under the DPO. GEMS-TA Fiancia Statements 2021 Page 2 Component 5; Project Management - US$O.55million Although implementation of this project is being mainstreamed into the MoF and will make use of existing staff, implementation systems, processes, and procedures, there are likely to be recurrent institutional and operational costs, as well as the periodic need for consultancy services to ensure that project implementatiOn progresses smoothly, The key objcotive c-f this component is to provide resolurces, equivalent to approximately 3 percent of the overall project amount, to support and defray the costs to the Mo for coordinating the implementation of the project effectively and efficiently. including support to build the capacity of the MoF M&E Unit. GEFMS-A Financial Statements 2021 Page'3 General Information Name Designation Project Implementation Team Mr. Patrick Nomno Chief Director Mr- Michael Ayesu The Coordinating Director, Operations-MoF Mrs. Yvonne Quansah Direc-or, ERMERD Ms. Scz-uda Ahmed Project Coordinator Mr Abraham Tawiah Direcror, Account Mr. PaI Agbo Senior Project Accountant Mr Godwing Adapara Project Accountant Mr- Peter Donkor Procurement OHicer Address: Ministry of Finance Finance Drive, Accra. P. O. Box M40, Accra - ahana GA-144-2024 info@mfepgaov.gh Tel: +233 302-747-197 Auditors Ghana Audit Service Post Office Box M96 Accra Bankers Cal Bank, Independence Avenue, Accra GEMS- TA Financia/ Statements 2021 pa)ge 4 D[ ate TdERle Remr should be quofd 16 1e. No,-.CAD/PEN,ADM/21/152 .. .. .. . . ..'. P. }. q' M. 96 Q 3i)2 676492/28/29 vn:tr Accra CI HO75495 W.b... w w.hn i.r .... .......- - ......I... 12 July 22 THE CHIEF DIRECTOR MINISTRY OF FINANCE P. O. Box M40 ACCRA REPORT ON THE FINANCIAL STATEMENTS OF THE GHANA ECONOMIC MANAGEMENT S TRENGTHENI NG TECHiNICAL ASS ISTAN CE PROJECT FOR THE PERIOD 1 JANUARY TO 31 DECERBR 2021 We have audited the accompanying financial statements of the Ghana Economic Management Strengthening Technical Assistance (GEMS-TA) Project referenced IDA Credit Number 5896-CH, which comprises tle Stz tement of Financial Position as at 31 December 2021, Statement of Sources and Uses of Funds for the year ended 31 December 2021 as well as the Notes to the financial statements induding, list of material assets acquired with project fund and a summary of significant accounting policies as set out on page 8. Responsibility of Management and those charged with Governance for the Financial Statements The Project Implementation Team is responsible for the Preparation and fair presentation of these Financial Statements in accordance with International Public Sector Accounting Standards (IPSAS), and for such internal controls as Management determines are necessary to enable the preparalion of Financial Statements that are free from material misstatements, whether due to fraud or error, Those charged with governance are responsible 7r overseeing the Ministry of Finance's financial reporting process. Auditor's Responsibilities for the Audit of the Project's Financial Statements Our objectives are to obtain reasonable assurance abot whether the Project' Financial Statements as a whole are free from material mnisslatements, whether GtMS-TA Financia Statemen ts 2021 ?age S due to fraud or error, and to issue an auditor's report that includes our opinion. ReaSonable assurance is a high level of assuranc, but is not a gua-rantee that an audit conducted in accordance with International Standards of Supreme Audit Institutions (ISSAis) will always detect a material misstatement hen it exists, Misstatements can arise fromn fraud or error and are considered material if,, individually or in the aggregate, they could reasonably d expected to influence the economic decisions of users taken on the basis of these Financial Statemens As part of an audit in accordance with ISSAls, we exercise professional judgment and maintain professional skepticism throughout the audit. We also aIdentify and assess the risks of material Misstate--rents of the Financial Staemets,whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for o r opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations or the overridce of internal control. * Obtain an understanding of internal controls televar.t to the audit in order to design audit procedures that are appropriate in te circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Project's (Mo's) internal controle * Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by Management, * Evaluate the overall presentation, structure and cor tent of the Financial Statements, including the disclosures, and whether the Financial Statemcents represent the underlying transactions and events in a manner that achieves fair presentation. We communicated with those charged with governance regarding, among other matters, the planned scope and timing of the audit and sigicant audit findings, including any significant deficiencies in internal control that we identified during my audit. We also provided those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to GEMS- TA FnancIl Statements 2021 Page 6 communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards, Basis for Opinion An audit involves performing procedures to obtain audit evidence about the amounts and disclosure in the financial statement. The procedure selected depends on the auditor's judgment, including the asse-sment of the risk of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal controls relevant to the entity's preparation and fair presentation of financial statements in order to desigi audit procedures that are appropriate in the circumstances, but not for the purpose of expressing opinion on the effectiveness o' the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management as well as evaluating the overall presentaion of tme financial statements, Opinion In our opinion, the Financial Statements present fairly, in al material respect the financial position of GEMS-TA Project as at 31 December 2021 and the re-sults of its operations for the year ended in accordance with International Public Sector Accounting Standards (IPSAS) and provisions of the F-nancing Agreement referenced (IDA) Credit Number 5896-GH and the Accounting Policies set out in Note I of the Project's Financial Statements. BENJAMIN C COJOE DEPUTY AUDITOR-GENERA/CGAD for. AUDITOR-GENERAL Date: 12 July 2022 GEMS-TA FIncI Statements 2021 Page 7 MINISTRY 0F FINANCE GHANA CONØMIC MANAGEMENT STRENGTIENING TZCHNICAL ASSISTANCE (GEMSýTAI PRGJECT CREDIT No. 5S896-GR STATEMENT 0F FINANCIAL POSITION AS AT 31 DECEER 202 l 202 1 22 NOý1N CURENT ASýETrS ..........-oE s - Us$ tis$__ Invesment fil ýPrcjec 2 i0,8,776.64 82157 CURRENT ASSETS Bank E1-ces 3 4 151,4771' 376,450.32 Totad A"sets 75,72537iI3Så6o FINANCEDnY- -- IDA Designated Loain Account 4 150725.I 8,938,636.08 SIGNED NELLY miR.Eku PAUL KWESI AGRO PROJEæw COORDINATOR SENIOR PROJECT ACCOUNT MINISTRY OF FINANCE MINISTRY OP FINANCE DATE: Q .DATE: Jugg *) G5MS-TA Finoncial StaPements 2g21 Page 8 MINISTRY OF FINANCE GHANA ECONOMIC MANAGEMENT STRENGTHENING TECHNICAL ASSISTANCE (GEMS-TA) PROJECT CREDIT NO 5896-GIH SOURCES & USES OF FtTNDS FOR THE YEAR ENDED IDECEMVBER 2021 TCumuljative as SOURCES OF FUNDS Note 2021 2020 at 31 Dec. us$ US$ 2021 _____US$ Designated Dollar Accou 4 6,088,617-63 000 - _15,027,253.71 Net Interest earned - 0.0 - 0- otal Project receipts 6000 15,027,25371 USES OF FUNDS _+253.7 Component 1; Strengthening - Ghana Revenue Authority's 28,705.83 260,289.69 1,324,56,93 Business Intelligence System5 Component 2: Strengthening DbManagement, 181,959.45 250,606-20 995 552.55 Capacity in Public Investment 7 .35,793,20 737,86450 3 593,76270 Management, 9,7270 Component 4: Improving the Govrnance of State-owned 8 1,295,09394 795.20 4,151,433g4 Enterprises. Camponent 5: Project -92 Maaemn,9 272,038 61 88.6 4,2 0 810,458.51 Totlxpend`2,313,go 2,115 10,875,776.64 Income Surplus 3,775,026.59 f2,115,249.80) 4,151,47707 GEMS- TA Fifancia;StgtemenrcP202ge Page 9 MINISTRY OF FINANCE GIIANA ECONOMIC MANAGEmENT sTRENGTHENiNG TECHNICAL ASSISTANCE (GEMS-TA) PROJECT CREDIT NO 5896-GH NOTES TO THE FINANVCIL STATEMENTS I- Significant Accounting Policies The following are summary of the significant accounting Policies adopted ji the preparation of the Financial Statements: Basis of Accounting The Financial Statements have been prepared on IPSAS cash basis and under the historical cost convention This means that revenue and expenditv res are recognized in the Financial Statemnents. when they axe received and paid for respectively, Under the historical cost convetion asets and liabilities are refle:red or disclosed in the Financial Reports at the cos3t incurred or price paid at the timne of transaction, Property, Plant and Equipment All Property, Plant and Equipment acquired or constructed under all sources of funding have been stated at the actual payments made duringo the year and shaf not he depreciatede Revenue and Expenditure Revenue is recognised when funds are received from IDA and expenditures arc accounted for in the year when goods and services are incurred and paid for. Presentational Currency The Financial Statement is denominated in the United States Dollar (US$), GEA5lrA Hnoncio/ Stotemerrs 2021 Page 10 MINISTRY OF FINANCE GHAINA ECONOMIC MANAGEMENT STRENGTHENRING TECHNICAL ASSISTANCE (GEMS-TAI PROJECT CREDIT NO 5896-GH NOTES TO TH*E ]FINANCIAL STATIRMENTS 2. Investment i Project Investments are the total eligible expenditures incurred on the Project as at the date of reporting. They are recognied in the stateent of financial Dosition as assets of the Project at the total value of all eligible expenditures. IOpening Bal. Additions Cloalng - Component 1 Jan. 2021 during 202 Balance a1 US$ US$ December 2021 Component 1: Strengthening Ghana Revenue Authority's 1,295,863.10 28,70583 1,324,568,93 Business Intelligence System Component 2: Strengthening ebt Management 813,593.10 181,959.45 99555255 Component 3: Strengthening Capacity in Public 3,057,969.50 535,793.2 3,593,76270 Investment Management, Component 4: Improving the Governance of State-owned 2,856,340.00 1,295,093.94 4,15 1 433.94 IEnterprises. Comnponenit 5: Project Mongent. Pro 538,419,90 272,038.61 810,458.51 Total Expenditure + ,S6 2I o 21-5,oo31 - 28 46.,231.3,591.04 ,10,875i,77i6.64. 3, Bank Balance This represents available cash and cash equivalents in the IDA Loan USD Designated Account at Bank of Ghana. 4. Funds from International Development Association (IDA) This repreents portions of the Project's fund deposited into a dollar designated account at Bank of Ghana to finance eligible expenditures In 2021 financial year, was received and as of December 31 2021 a total of US$1 5,027,253.71 has been received over the life of the Project- GEMS- TA Finoco Sro temenPs 2021 page'll MINISTRY OF FINANCEn GHANA ECONOMIC MANAGEMENT STRENGTRjENING TECHNICAL ASSISTANCE (GEMS-TA) PROJECT CREDIT NO 5896-GI NOTES TO TRE FINANCIL STATEMENTS 5. Componentl: Strengthening GRA Business InteUigence System-US$4nillion sub-components -y 20 71 20201 __ _ Us$ U 17$ S1 Sub Component -Irnprovng the Business Intelligence fBI) System 28,705.83 260,289,69 12 lmplementation of Common Reporting Standards and Foreign Account Tax 0.00 LComphance Act To0-tal 28,7o5.ga- 260,289.69 6. Cmone 2 Stren ent Man ementUS$1.2mIIon Sub-components 202- j 0 2.1 Improved debt maniagemnt with credible annual borrowing plan(ABP) 95,8&37 19,39820 t,2 Strengthened Treasury Manement orecastng 29,61870 30,246 86 2.3 rnproved debt Reportinj - -1- Transparencv_ 505893.3 59 939.26 2.4 Irnproved Operational Risk management 5,761L75 141,021,81 Total -81 18- 19.45 250606.20 7. Component 3: Strengthening Capacity in Public Investment Mgt-US$4zmifilon Sub-components 2021 - 2020 -I Development of a comprehensive PlM j -5 reform strategy and action plan 000 16,298 3.2 Improvement of regulatory and nstitutional setting for PIM and creating 215,64182 152,92&72 the required Instruments1 3.3 inplementing a comprehensive and sustainable capacity building strategy for PIM in PID, MDAs/MMDAs and may be 137329,64 sorne SOEs. 3.4 Strengthened capacity for Public Investment Management (PIM). - 82 1 39 3 62 Total -53 73.2o1i7j64 50 GrMS-TA Finoncij/r,tements 2021 P age 12 MINISTRY OF FINANCE GHANA ECONVOMIC MANAGEMENT STRENGCTHENING TECHNICjL ASSISTANCE (GLMS-TA) PRo1ÆCT CREDIT NO 5896-GH NOT" To THE FIXANCIAL STATEMENTS 8. Conponent 4: Improving the Governance of SOEs- US$5,25 M 2021 202O Sub-components -38$-US- 4..1 Consolidating the State Oversight Role - Preparatory Activities for the 238,09707 Establishment of the Single Entity 4.2 Establishing the Sinle rntity for - - oversight 457,758-2 63,551,64 [4.3 Piloting Corporate Governance proveents 599238.59 364,051-76 E-?7Ti, Flnoncio Statemerits 2022 Page 13 MINISTRY OF FINANCE G}~AA EGNOMJC ~AAGBMENT STR nENN TECHNI EPROJEC C DIT NO 5896-GH NOTES TO THE IJNANWCIL STATEMXJ4NTq 9. List of material asset acquired DE~Øm,næI DAaO COST COST %~ryean 1LAPTOP (l)I 2 LAPTOP 2012/2019 00.0 4,0990 TDMD 3745293057 20/12/2019 3 LAPTOP 9518593357 201/09 1,0.o 3,272.73 TDMD 4 [LAPTOPE,0.0 3227 TDM- 84293057 20/12/2019 18,000.oo 3,272.73 5 LA PTOP 02635 20/12/20 g la180n ,227 TDMD 6 DESKTOP _60. 7 DESKTOP T 20/12/2019 6,500.00 3,172.72 TDMO 7ccB341Sg 20/12/2019 6.00,00 1181.82 TDMD 8 DESKTOp -cc8f- 20---19 - 1,18182 TDMD 9 DESXTQp ScSf2120o1, 6500-00 1,181,82 TDMD 10 DESKTOP 8C83511 20/12/2019 1 12 CT CAR_s 20/12/2019 6 sc840 18182 TDM 12 DESKTOP 0/5.010 1481,82 TDMD 13 LAPTOP 3c840g5c 20112/2019 100000 9 1 1ESK18OP /834f6 209 650000 1,8182 TDMD 161 DESKTOP cc406 2/1209 6,500.00 '1,181,92 TDMD KG DESKTOp S~~cc8352cnb 20/12/2019 ,0.o 18Æ2TM 17 DESKTOp202 6,50.00 2 18 DESKTMO 8cC83811Gv 20/12/2019 f30 .81-82 -T-DMOD 19 DESKTOP8c8544 21 ý: ) 20 CCTV CAM ERA 8c8544 2/221 , «18182 TTViD 20/2/02 7A12P5,00 1,404.55 TDM 23REFR4GERAToR11000 193 PA 522 2,4001,o 4179 PIMU HP PAVILION 24 A0 (32GB DDR4 24RA M) 25 5/3/2020 20,891.40 4,017.62 Pim H ~ ~ ~ ~ ~ ~ ~ ~ 8 _4 4AV 11017A0 3 Ili' ý 1 2RAM) 5/3/2020 1,2-0.07.20ý HP PAVILION 24 A10 (16GB DDR4 29 RAM) -/3/2020 16,720,0 3,215,38 PIM 29 RAM ) 24A la e D4 /3l 1, 7000 3,2-15.38 PiM GEkS- TA Financial Sto tenents 2D21 Pagc14 l기 Pase 15 56 PROJECTOR 5/3/2020 25,08'000 4,823.08 Fp I - 57 PROJECTOR 5/3/2020 -25,OSO.CD 4,823,08 PIM 58 LASER POINTER 5/3/2020 418.Co 80.38 P.1 M 59 LA5ER POINTER 5/3/2020 418M 80.38 PIM 60 H D M I-TO-VGA CONVERT E R 5/3/2020 209.00 40.19 PIM 61 HDMI-TO-VGA CONVERTER 5/3/2020 209 11 PIM 621 TIV 51312020 -34,375.CG 6,610,58 PIM 63 SPEAKER/MONITOR 513/2020 2,50 0, (10 480,77 PIM 64 SPEAKER/MONITOR 5/3/2020 2,500ko 480.77 P IM 65 5/3/2020 1,337.60 257.23 P [ M 66 WHITE BOARD 5/3/2020 1,50mim 288.46 PIM 67 WHITE BOARD 5/3/2020 1 , 500 , 00 288.46 PIM WHITE BOARD 513/2-020 11500100 288,46 PIM 69 WHITE BOARD 5/3/2026 1,5M,)0 288,4r Pim 70 FILE CABINET 5/3/2020 2,508.M 482.31 PiM 71 FiLE CABINET 5/3/2020 2,508.30 482.31 PIM SX 2000 DIGITAL VOICE RECORDER 72 SY, SERIES 5/312020 83,.DC+) 1,60,77 P 1 1\4 TOTAL M,3221 11-1,562.06 GEMS- TA F nonciof Sto temen ts 2021 Page 16 S CG AD/GENLADM/21/151 M. 96 ~' 201 .(ti'cv fwrt Jr *.%4~~A.ccra w.... 12 July 22 THE CHIEF DIRECTOR MINISTRY OF FINANCE ACCRA MANAGEMENT LETTER ON THE AUDIT OF GHANA ECONOMIC MANAGEMENT STRENGTHENING TECHNICAL ASSISTANCE PROJECT FOR THE PERIOD 1 JANUARY TO 31 DECEMBER 2021 Introduction We have in accordancc with our mandate under Article 187(2) of the 1992 Constitution and Section 11(1) of the Audit Service Act, 2000 (Act 584), audited the accounts and other related records of the Chana Economic Management Strengthening Technical Assistance (GEMS-TA) project referenced IDA Credit Number $896-GH funded by the International Development AissAL. rnj the period I January to 31 December 2021. The audit was carried out by Evans Agyin-Kobina, Russell Owusu Asante, Charles Brown Ahlijah, Veronica Arthur and Sylvana Poziema Zuanah, 2. We wish to bring to your attention the following observations and recommendations nade during the audit for your information and necessary action. We have discussed these matters with the key personnel whose comments and responses have been incorporated in this report. 3. We shall be grateful to receive your formal response within 30 days after the receipt of tbi9 ltcer as required by Section 29(1) of the Audit Service Act, 2000 (Act 584). Audit Objectives 4. The audit objectives were to: GE.MS-TA Project Managemen Lerter 2021 Page I a Express an opinion as to whether the Project's Financial Statements present fairly in all material respects the financial position of the Project as at 31 December 2021 and the results of its operations for th 'pei'NO E-:I:mnance with the Provisions of the Financing Agreement referenced IDA Credit Number 5896-Gi and the International Public Sector Accounting Standards (IPSAS); b. Evaluate the system of internal controls related to the Ministry of Finance, assess control risk, and identify significant deficiencies, n lud ing Ie l e aknesses; and c. Perform tests to determine whether the Ministry of Finance complied, in all material respects, with the Financing Agreement, Project Appraisal Document (PAD), World Bank Procurement Regulations for Investment Project Finance Borrowers of July 2016 (revised 11 NOvember 2017 and August 2018), Public Financial Management Act, 2016 (Act 921), Public Financial Management Regulations, 2019 (LI 2378), Public Procurement Amendment Act, 2016 (Act 914) and Income Tax Act, 2015 (Act 896), Audit Scope and Methodology 5. We audited transactions undertaken by the Ministry of Finance for the period 1 January to 31 December 2021. We carried out the audit to obtain a reasonable assurance that the Project's Financial Statements were free of material misstaternents, in accordance with International Public Sector Accounting Standards, Public Financial Management Framework and rle vant provisions of other Public legal frameworks and the enabling terms and conditions set out in the Project Financing Agreement. 6. As part of the audit, we examined on a test basis, evidence supporting the amounts and disclosures in the Financial Statements, assessed accounting principles used, and evaluated the overall Financial Statements presented. Among the key areas covered in our report included Project governance and delivery, Procurements, Contract Management and follow tip on previous audit recommendation.s Auditing Standards 7. The audit was carried out in accordance with the International Standards of Supreme Auditing Institutions (ISSAls). The Standards require GEMS-TA Prfject MOnagement Letter 2021 Pavo that we plan and co-LdlAct the audit to obtain reasonable assurance that the Financial Statements are free from material misstatementE. Statement of Responsibility 8. It should be noted that 1he implementation and maintenance of systems of accounting and intnam Control are primarily the responsibility of lanagement. 9. Our responsibility is to plan and perform the audit work such that there is a reasonable expectation of detecting material missta:ements and control weaknesses. As a esH to report should not be regarded as a complete list of internal control weaknesses. Status of Internal Control System 10- In general, the control environment continues to be reliable, although we encourage Management to address the issues raised. Key Personnel 1. The following key officers were in charge of the financial and administrative duties of the Project during the period under review. Nu. Nanik Designation 1. Mrs. Yvonne Quansah Director, ERMERD 2. Mrs Nelly Mireku Head, World Bank Unit 3. Mr. Michael Yeinah Principal Economi: Officer 4. Mr Abirahamu Tawiah Director, Account 5. Mr. Paul Agbo Senior Project Accountant 6. Mr. Godwing Adapara Project Accountant T. Mr Peter Donkor Procurement Officer Summary of findings and recommendations 12. We noted that as at June 2022 and with one m-onth to contract expiration, the implementation of Data Warehouse, Data Analytics and GEMS- TA Project Manogement Let ter 2021 Page 3 related services is 40 nCr c01i complete with only the Inception Report and Solution DesiFn ai I milesrnes or deliverables achieved in the face of an imminent Project close out on 31 July 2022. We recommended that the GRA should impress on Ernst and Young Advisory Services Limited to endeavor to finish the implementation by 31 July 2022 us agreed, 13. We observed th,)[ ik V une 2022 and with one month to contract expiration, the implementation of the National ICT Based Monitoring & Evaluation system is only 70 per cent complete, whilst the consultant had been paid up to Output four in the face of an imminent project closure on 30 June 2022. We recommended that the NDPC should imprEss on GAIASOFT International to sp-Aed [he :-ilJementation process, and also urged the Project Implemwntaion Teamn :0 s idc funds to pay the Consiltant when the is task is fully execu ted. 14. We noted that the Project assets were distributed to Implementing Agencies, Project Management Unit and staff, however, the Project Appraisal Document did nof prwide guidance on how the assets are to be used or distributed at the end of the Project in June 2022. We reco-rnmended that the PIT should liaise with the Project Task Team Leader a nd Implementing Agencies to agree on modalities for the use or distribution of the Project assets. 15. We noted that the World Bank site had posted JS$965,375 as the total contract price for the implementation of Data Warehouse, Data Analytics and related services, whilst the signed contract document had an amount of US$978,630.02. We recommended that the Procurement Officer for the Project should liaise with the Project Task Team Leader of the Bank for the necessary corrections to be made on the World Bank site. 16. The Project Implementation Team paid a total of US$22,500 to two entities for consultancy services, but did not withhold tax of US$1,687.50 from the payments. We recommended that the PIT should pay the amount of US$1,687.50 to the GRA in accordance with Section 117(3&5) of Income Tax act, 2015 (Act 896), and consult on relevant public financial management laws, and ensure adherence. GEMS-TA Project Mnagemen Leue' .02. P Ag 4 DETAILS OF FINVINGS AND RECOMMENDATIONS Delayed implementation of data warehouse and data analytics services 17. The Government of Ghana represented by the Ghana Revenue Authority (GRA) on 1 October 2021, signed a contract amounting to US$978,630.02 with Ernst nd Young Advisory Services I irnited for the implementatiofn oi Df a iareho1e, Data Analytics and Related Services to be completed within a period of ten months ending 31 J-Ay 2022 with the following milestone: No Milestone % Payment 1 StatIs 1. hic p1' R:'nrtc 20% Achieved 2. Solution Design 20% Ach:evcd 3. Testing. 10% Not Achieved 4, Operational Acceptance 20% Not Achieved 5. User Training 20% Not Achieved nnnfirniation 10% Not Achieved 18. We noted that as at June 2022 and with one month to contract expiration, the Implementation is 40 per cent complete with only the Inception Report and Solution Design as the milestones or deliverables achieved in the face of an imminent Project close out on 31 July 2022. 19. The project development objectives for the implementation of the Data Warehouse and Data Analytics is to integrate the data of Customs with Domestic Tax as well as third party data to allow for crass-referencing and identifying opportunities for compliance as far as tax payment is concerned. The delay in completing this implernentation is impeding Government efforts to achieve the integration by July 2022, 20. We recommended that the GRA should impress on Ernst and Young Advisory Services Limited to endeavor to finish the implementation by 31 July 2022 as agreed. GEMS-TA Project Managemnr iet:er 2021 Page 5 Management response 21. Management responded that the observation and recommendation is well noted, and efforts arerengmd to Push the firm to :Ieliv er on time. Delayed execution of National ICTbhased monitoring & evaluation system 22 The consultancy services to d0x elop a CoMprehlensive integra ted ICT- Based Monitoring and Evaluattion system between the National Development Planning Commission (NDPC) and GAIASOFT Internati onil was signed on 29 October 2018 to be initiall,; completed in] 4. Mon1[hs and wvas later extended to 21 months ending 30 June, 2022- The objective of the assignment is to support the efficient ond effecfiv'e management of the country's dev elopmnent efforts. The table below shows, the contract deliverables and timehines for execution- No. Oeiracf%tulDate aftCrsing Pamt __I cepinl Re2port pveJininai , assessmnent of End of week 4 10% L_ exisLig___ ~ a __________ Deailed assesstntont repn-rt on existiag M&EE End of week 1420 Svst(,ms in consultation with-stakeholders 3.Desi nelld NLfinna M&-E Fites nd of week 23 0 4. FuF-ijn~ iC -of -asr' eTz 2se tnd .f ....k 229- H ariware supplied, inista,liped and Endofwe352% 0__ oeainal ____ r6,1 0 One-year full post implementation support End, of week .33 1M% icluding training- Coimpleted with training 23. We noted that as -it tune 2022 and with one month to contract expiration, the implementation is only 70 per cent complete, Whilst the consultant had been paid up to Output four in the face of an imminent project closure on 30 Junr, 2022. 24. Upon closure ot the Project on 30 June 2022, there may not be funds available to pay for the remaining 30 per cent of the contra--ct sum when the Consultant fully executes the project. The delayed completion of the National ICT-based Monitoring and Evaluation system is hainp-.ring Government efforts in automnation of the coll ction and collation of Project and Programme GEMS-TA.IProject Managemejit Lettcf 2021. Page 6 level data as v-ell as rei'ortn{ n real time to support evid-ence-based decision- making and manmeenCt 25. We recommended that the NDPC should impress on GAIASOFT International to speed the implementation process We also recommended that the Project implement0n Team should set aside funds to pay the Consultant when the task is fully executed. Management response 26. Management responded that the observation and recommendation is w ell noted and efforts are be ing nmad to push the firm to celiver on time. Absence of guidance on use of assets at the end of the project 27. A Principal Spending Officer of a covered entity, state-owned enterprise or public corporation has the responsibility under Section 52 of the Public Financial Mamgement Art, 201f (o manage the assets of the institution under his care and ensure [hat proper control systems exist for the custody and management of the assets and preventive mechanisms are in place to eliminate theft, loss, or wastage. 28. We observed unde-r the Ghana Economic Management Strengthening FechnicaJ Assisaniv , olW jo ati various assets and equipment such as vehicles, office furniture, desktop computers and accessories, laptops, assorted office equipment, photo copiers & printers and tablets costing US$6,016,268.77 were procured for the purposes of administering the Project. 29- We noed howve-, that although the items were distributed to Implementing Agencies, Pj)ct Management Unit anC staff, the Project Appraisal Document did not provide guidance on how the assets are to be used or distributed, especially as the Project ends in June 2022. 30 hence of eridance on 1he use or distribution of the assets and equipment could lead to ni)suse and theft of the items. Individuals with laptops or tablets may never return the items to the Project Implementation Team (Pi1) or Ileads of Implementing Agencies and the vehicles may also not be returned to the pool. The PIT and Implementing Agencies may also take unilateral decisions regarding 7ne use of these assets. GEMS-PeA l Page 7 31 We recommended that the PIT should liaise with the Project Task Tearn Leader and Implementing Agencies to agree on modalities for the use or distribution of the ProEt assets. Management response 32. Management stated that the Project Coordinating Unit will seek directives on how the assets should be used at the end of the Profect. Inaccurate Documented Contract Price on Procurement of Service Provider fox the Implementation of Data Warehouse and Analytics 33. The Government of Ghana represented by the GRA on 1 October 2021, signed a contract amounting to US$978,630.02 with Frnst and Young Advisory Services Limited for the implementation of Data Warehouse, Data Analytics and related services to be completed within a period of ten months ending 31 July 2022. 34. We however, noted that the World Bank site had posted US$965,375 as the total contract price as against the amount of US$978,630.02 on the signed contract document, resulting in difference of US$13,255.02. 35. We recommenied that the Procurement Officer for the Project should liaise with the Project Task Team Leader of the Bank for the necessary corrections to be made on the World Bank site, Management response 36. Management agreed with our observation and indicaLed that the inihal bid price of US$965,375 was the one recorded in the World Bank's Systematic Tracking of Exchanges in Procurement (STEP), but the re-evaluated amount of US$978,630.02 is what has been stated in the contract document. It added that management would initiate the process to have it amended in STEP, Non-deduction of withholding tax on contract sums 37. Section 116(2) of the income Tax Act, 2015 (Act 896) states that 'a resident person, other than an individual, shall withhold tax on the gross amount of the payment at the rate specified in the First Schedule when the person makes a payment to another resident person for (a) the supply or use GEMS-.IA oject Manngemc.t Lerter . Page 8 of goods, (b) the supply of any works, or (c) the supply of services, in respect of a contract between the payee and the resident person, 38. We noted that the Project Implementation Tearn paid a total of US$22,500 to Toraza 7enith Inc but did not withhold tax amounting to US$1,687.50 from the payments. The table below shows details of the payments: PV No. Details US$ Consultancy Svrvice to Oelivcr Training on Public Private CEMSTA/21/ MAY/014 Partnership 11,250.00 C:on Nhancy Foe to Deliver Training GEM1TA/21/ C .! n[ I n Public f'rivate Partnership. 11 250.00 TIotal 22,500.00 39. The PIT explained that the payments were course fees to enable staff of various MVTDAs participate in an online Public Private Partnership training progranne. 40. This has resulted in a loss revenue totalling US$1,687.50 to the Government for national development. 41. We recoimmle that lie PIT should consult cn relevant public financial management laws and ensure strict adherence. Meanwhile the PIT should pay the amount to the GRA in accordance with the Section 117(3&5) of the Income Tax Act, 2015 (Act 896). Management Response 42. The PIT agreed with the recommendation. Follow-up on previous audit recommendations 43. Action taken on previous report referenced CGAD/GEN-ADM/21/59 of 1 November 2021 is attached, GEMS-TA Project Morogemenrt Letter 2021 Page 9 Acknowledgment 44. We are grateful for the assistance and suppc rt of the Project Coordinating Unit during the audit. BENJAMIN d. COEJOE DEPUTY AUDITOR-GENERAI/CGAD for: AUDITOR-GENERAL cc: The Project Coordinator Ministry of Finance Accra The Coordinating Director, Operations Ministry of Finance Accra The Director, ERMERD Ministry of Finance Accra GEMS-TA Project Management Letter 2021 Page 10 ―더「 궈「 ri LD 71 ä: -t 2 0 4-, -7, KA k-A el. cm ýr ej å) 1- 5 .2 0 C33 -W CY