The Public Accounts Committee of Parliament (PAC) has directed the management of the Tamale Technical University (TaTU) to retrieve an amount of GH¢172,966 paid as compound interest to Automol, a private automobile company, for the purchase of a Land Cruiser vehicle for the rector of the university in 2013.
According to the committee, the management of the university risked being surcharged by the Auditor-General if it was unable to retrieve the money within 60 days, as the contract agreement breached the Public Procurement Act.
The management of the university, in 2013, purchased the vehicle at a cost of GH¢196, 000 but failed to pay the automobile company within the contract period due to the delay in GETFund’s approval of payment, which accrued 42 per cent interest rate in 2015.
The accrued interest and the cost of the vehicle, totalling GH¢369,826, were paid to the automobile company in 2015.
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At a public hearing in Tamale on Monday, members of the PAC could not understand why the governing council of the university approved the payment of the interest rate of 42 per cent, which was above the Bank of Ghana approved interest rate.
The Chairman of the committee, Mr James Klutse Avedze said the contract was wrongfully negotiated which did not ensure value for money.
“There are a lot of issues surrounding the contract negotiation, especially how they agreed on the 3.6 per cent monthly interest rate, which amounted to 42 per cent interest rate in two years, without broader consultation with the relevant institution. Management of the university has no jurisdiction to award contracts,” he explained.
He advised heads of public institutions to comply with orders of the Public Procurement Act in awarding contracts to avoid causing financial loss to the state.
The Auditor-General, Mr Daniel Domelevo, questioned the basis of the contract and advised management of the university to consider pursuing the automobile company to ascertain the required interest rate which would save them from facing the full rigorous of the law.
The PAC would be in Tamale for the next one week to review the expenditure of the various heads of government institutions in 2015 and 2016 to ensure value for money.