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Auditor-General’s report, interpretative journalism

BY: Larweh Therson-Cofie

The Ghana mass and social media have reported that the Auditor-General has uncovered financial irregularities that added up to GH¢17 billion in the 2021 audit report.

That part of the Ghana Audit Service report for 2021 was for public boards and corporations and other statutory bodies.
Quoting from the audit report, the publications calculated the GH¢17 billion financial irregularities to be a 36 per cent increase over financial malpractices captured in the 2020 audit report which amounted to GH¢12.85 billion.

Total financial irregularities uncovered by the Auditor-General in his reports for the past five years were valued at more than GH¢50.8 billion.
According to the Auditor-General’s report for 2021, the GH¢17 billion financial infractions were partly caused by power sales offered on credit by the Volta River Authority (VRA) and the Northern Electricity Distribution Corporation (NEDCO).

Other infractions uncovered by the Ghana Audit Service for 2021 included those on tax, cash, payroll, debts and loans, stores and procurements, contracts and rent.
Customers of VRA and NEDCO owed the two institutions GH¢4.9 billion and GH¢1.2 billion respectively for power purchase.

The audit report revealed that Ministries, Departments and Agencies (MDAs) owed the VRA and NEDCO unpaid power sales debts.

According to the report, the huge debts could not have occurred if the VRA and NEDCO had established an effective debt collection policy and credit control mechanism to get debts paid.
Management indifference to loan recovery was also mentioned as one of the causes of accumulated debts owed by the MDAs to the two institutions.

Citing part of the 2021 audit report, the media stated that the Auditor-General requested the MDAs to create effective management policies that would enable them to minimise or avoid bad debts.
Misapplication of funds, budget overruns, payment of boards’ allowances to members without ministerial approval or authentication amounting to GH¢505 million were also cited in the report.

Failure to pay statutory tax deductions at the appropriate dates and non-deductions of applicable taxes that amounted to GH¢23.5 million were mentioned in the report as financial malpractices.
It is the constitutional duty of the Ghana Audit Service and its head, the Auditor-General, to audit all public accounts.

Article 187 (2) of the 1992 Ghana Constitution states: “The public accounts of Ghana and of all public offices, including the courts, the central and local government administrations, of the universities and public institutions of like nature, of any public corporation or other body or organisation established by an Act of Parliament shall be audited and reported on by the Auditor-General.”

Article 187 (5) stipulates: “The Auditor-General shall, within six months after the end of the immediately preceding financial year to which each of the accounts mentioned in clause (2) of this article relates, submit his report to Parliament and shall, in that report, draw attention to any irregularities in the accounts audited and to any other matter which in his opinion ought to be brought to the notice of Parliament.’’


In presenting his report on public accounts, the Auditor-General submits the report in a language and terms that are appropriate for that purpose.
His definitions are applicable and rest within their context and meanings.

For example, financial irregularities, infractions or malpractices do not necessarily mean that Ghana, as a nation, has incurred financial losses.
Mass and social media journalists are not accountants or auditors.
Most of them have not been exposed to how to properly interpret financial and audit reports, as well as national budget statements.

Lack of accounting and bookkeeping background compels the journalists to do verbatim reporting without understanding some of the terms and issues involved.
In old school journalism, there is a remedy for that.
Interpretative journalism offers conscientious journalists the opportunity to understand and interpret financial statements, budget presentations and audit reports in a way that will not amount to misreporting or misinformation.
However, the journalist cannot do so without some background knowledge in accounting and bookkeeping.

It is expensive for the mass and social media houses to employ accountants to report or write on financial and audit reports and budget statements for publication.
However, the media houses can employ and train persons with accounting and bookkeeping knowledge to handle sensitive specialist matters such as analysing and interpreting and reporting on financial subjects.

Such trained specialists should be able to explain financial terms to the readers, listeners and viewers properly.
Failure by the media to engage qualified journalists in the area of financial and economic reporting could create big problems for the country.
Already, the effects of misreporting budget and financial statements and audit reports have become apparent.

To the unwary reading, listening and viewing public, GH¢17 billion financial irregularities, infractions or malpractices mentioned in the 2021 audit report mean the country has suffered financial losses.
I heard a protester stating on a radio station on September 5, 2022 during a Civil Society Organisation (CSO) demonstration in Accra that one of the reasons for demonstrating was to call public attention to the GH¢48 billion that the State had lost in five years through financial irregularities as reported by the Auditor-General.

Bad reporting or misreporting financial matters can make the public form false perceptions about public account keeping and financial management.
Such perceptions can be captured unaware by public opinion sampling persons in their research.
False perceptions could impact negatively on Ghana’s reputation, the national currency and investor confidence.
Financial irregularities, infractions or malpractices are auditing expressions used by the Auditor-General in his report.

The Auditor-General reports are scrutinised by the Public Accounts Committee (PAC) of Parliament.
In many cases, the PAC has helped recover all or some parts of unpaid loans, debts and unclaimed taxes and improperly paid salaries or allowances.

Therefore, not all financial irregularities amount to financial losses to the country.
Besides, loans, debts and others not paid upon request by the PAC can land a public official in the court.
Failure to refund can result in sale of properties for recovery.
This point has been confirmed by a person described as a Ranking Member of the Finance Committee of Parliament, Kofi Okyere.

I heard him on radio stating that almost 90 per cent of irregularities in a recent audit report by the Auditor-General were found to have been rectified.
Some critics have partly blamed the Auditor-General for the misunderstanding or misreporting of the audit reports.

A lecturer at the Centre for Business Studies has observed that the Ghana Audit Service needs to improve the format of audit report presentations.
He added that sometimes, the Auditor-General did not go through some of the appropriate measures before publishing his report.

He asked the Auditor-General to put amounts of irregularities in the proper categories, structures and headings to avoid misinterpretation.
“If the GH¢17.5 billion financial malpractices were properly categorised, nobody would use the report to do mischief,” he added.

For example, he said of the GH¢12 billion financial malpractices in an audit report, GH¢8 billion was found to be budget overruns for the year 2020.
I must state that budget overruns and use of allocated funds for emergency purposes in other areas of the public sector are not losses to the State.
Budget overruns in national accounts are classified as deficit financing.

In his book, A Dictionary of Economic Terms (1968), PAS Taylor defined deficit financing as follows: “The attempt to alleviate a depression by deliberate spending by the State of more than it received in revenue. This spending will usually be on public works of some kind so that the State, as an employer, will increase the purchasing power of the community and generate economic activity.”

He concluded by stating that “the deficit in the national budget can be met by borrowing or by the printing of more money”.

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