Zoomlion, Auditor-General present arguments over GH¢184m surcharge
Waste management company, Zoomlion Ghana Limited, and the Auditor-General (A-G) have started presenting their respective arguments at the Accra High Court in a legal battle in which the latter has surcharged the former for over GH¢184 million.
The legal case is in relation to an appeal filed by Zoomlion at the court on December 5, 2018 against the surcharge and disallowance issued by the Auditor-General.
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It is the contention of Zoomlion that the Auditor-General erred in its findings and, therefore, the surcharge had occasioned a grave miscarriage of justice.
The company, therefore, wants the court to set aside the surcharge issued by the Auditor-General on October 27, 2018.
Surcharge and disallowance
The Auditor-General issued a surcharge and disallowance against Zoomlion for over GH¢184 million for a fumigation exercise it carried out for the Ministry of Health (MOH) but which was allegedly paid by the National Health Insurance Authority (NHIA).
That was after the Auditor-General’s audit conducted on the accounts of the NHIA made findings that Zoomlion had, between the year 2007 and 2018, allegedly been paid a total amount of GH¢184.9 million without due process.
The said fumigation exercise was under the National Mosquito Control Programme (NAMCOP).
Auditor-General’s response
In its response to the appeal, the Auditor-General accused Zoomlion of using fraudulent means to obtain the payments from the NHIA.
Among other infractions, the Auditor-General’s adverse findings indicted Zoomlion for receiving payment for the fumigation even when the said contract covering the exercise had expired.
The Auditor-General’s office said Zoomlion received payment for the fumigation exercise up to August 2018, even though the contract between the two parties was to last for four years, having started from August 2009.
The Auditor-General further accused Zoomlion of not showing proof of work done from 2009-2012, which was the period when the said contract was valid.
Also, the Auditor-General argued that when it notified Zoomlion about its intention to surcharge it, the company presented documents covering another contract it had with the Ministry of Local Government and Rural Development as proof of work done under the NAMCOP contract.
“The respondent (Auditor-General), upon a careful review of the documents tendered in support of the payments to the appellant (Zoomlion), is of the candid opinion that the appellant has at all material times, been fraudulent and has caused a drain on the scarce State resources,” it said.
Contract was still in force
At Wednesday’s hearing, counsel for Zoomlion, Mr Osafo Buabeng, refuted claims by the Auditor-General that the contract ended after the four-year period (2009-2013).
He argued that although the contract was not renewed after the four-year period, Zoomlion continued to work up to August 2018 and was duly paid by the NHIA.
It was his contention that the contract was still in force because both parties maintained a contractual relationship.
“It is our submission that by maintaining their respective contractual relationship, both the MOH and Zoomlion impliedly renewed the contract,” he said.
He backed his argument with a Supreme Court decision in 2007 between Social Security Bank Limited and CBAM Services Inc.
Miscarriage of justice
Mr Buabeng further argued that the Auditor-General did not give his client the opportunity to respond to the allegations levelled against it before issuing the surcharge.
He said a management letter written by the Auditor-General on June 19, 2018 to MOH and the NHIA, which detailed all the alleged infractions by Zoomlion, was not copied to the company, constituting a breach of Regulation 37 of the Audit Service Regulation, 2011 (C.I 70).
The counsel for Zoomlion further submitted that his client only saw the letter when the Auditor-General responded to its appeal at the court.
“The respondent (Auditor-General) erred in its findings that the appellant (Zoomlion) had between the year 2007 and 2018 been paid a total amount of GH¢184.9 million, devoid of due process without affording or giving the appellant the opportunity to respond thereto the allegations, thereby breaching the ‘audi alteram partem rule” of natural justice and this has occasioned a grave miscarriage of justice,’ counsel said.
Audi alteram partem is a Latin expression that means "listen to the other side", or "let the other side be heard as well", and it is applied in law to offer opportunities to parties to respond to accusations against them.
Adjournment
The court, presided over by Justice Georgina Mensah-Datsa, adjourned the case to July 15, 2019.
Lawyer for the Auditor-General, Mr Vincent Odikro Nyame, is expected to move the Auditor-General’s motion challenging the appeal filed by Zoomlion on that day.