KPMG’s audit report on the Ghana Revenue Authority (GRA) contract with Strategic Mobilisation Ghana Limited (SML) has revealed the latter changed its name from Strategic Mobilisation Enhancement Limited (SMEL).
This according to the KPMG report was after the Public Procurement Authority (PPA) refused to approve its listing for a single source contract.
The report released by President Akufo-Addo on Wednesday, May 22 explained the PPA’s refusal was on three separate occasions in 2017.
The President on January 2 tasked KPMG to audit the multiple contracts between SML and the Ministry of Finance and GRA after an investigation by The Fourth Estate revealed several anomalies.
The company had claimed its services were curbing under-declaration, dilution, and diversion of petroleum products—the factors responsible for revenue losses in the downstream petroleum sector.
Page 11 of the KPMG report says: “SMEL was incorporated on 14 February 2017. During the period 16 June and 14 September 2017, GRA made three (3) unsuccessful attempts to obtain PPA’s approval to single source SMEL to provide transaction audit services. On 22 November 2017, SMEL changed its name to SML.”
The report said the approval was denied because the company lacked “capacity or prior experience” in the delivery of the services.
Page 14 of the KPMG report states that,
The GRA proceeded to award contracts to SML without the approval of the PPA.
The report added, “On 1 June 2018, SML was appointed a subcontractor to West Blue Ghana Ltd, then a service provider to GRA, to provide transaction audit services for seven (months) period ending 31 December 2018.”
It continued, “On 1 January 2019, GRA executed without PPA’s approval, and extended transaction audit services agreement with SML, renewable on monthly basis, following the expiration of West Blue’s contract and SML’s subcontract agreement on December 31, 2018. GRA entered into six (6) service agreements with SML, utilising the single-source method without approval from PPA, as outlined below:
- Transaction Audit Services— 1 June 2018
- Contract Extension— 1 January 2019
- External Price Verification Services— 1 April 2019
- Consolidation Services Agreement (Transaction Audit & External Verification Services) — 3 October 2019.
- Measurement Audit of Downstream Petroleum Products—3 October 2019.
- Addendum to Measurement for Downstream Petroleum Products Agreement—29 July 2020
The KPMG report said, “Evidently, GRA executed the above contracts with SML in breach of Act 663 [the Public Procurement Act] as amended.”