The Ghana Revenue Authority (GRA) has terminated two of its contracts with Strategic Mobilisation Ghana Limited (SML).
These contracts include the Transaction Audit and External Verification Service Contract (AEVS).
This decision follows President Nana Addo Dankwa Akufo-Addo’s directive after audit firm, KPMG, submitted its report on the deal.
Additionally, the GRA has directed the suspension of the Upstream Petroleum and Minerals Revenue Audit portions of the contract pending further review of the contract details.
The Authority is also planning to revise the fee structure for the Measurement Audit for Downstream Petroleum Products Contract, transitioning it to a fixed fee structure.
Other provisions, including service delivery expectations, termination clauses, and intellectual property rights, will undergo review as well.
The GRA revealed this decision in a letter titled “Compliance with Presidential Directives on Recommendations in KPMG Report on the Transactions Between GRA and SML,” dated Friday, May 3, 2024which was signed by Commissioner General Ms. Julie Essiam, and addressed to the Managing Director of Strategic Mobilisation Ghana Limited (SML).
The GRA’s letter was copied to several key officials, including Vice President Dr. Mahamudu Bawumia, Chief of Staff Madam Akosua Frema Osei Opare, Secretary to the President Nana Bediatuo Asante, Finance Minister Mohammed Amin, the Director of Legal at the Ministry of Finance, and the Deputy Commissioner in charge of Legal Affairs at the GRA.
“Based on the review, the following actions are to be taken: First, The Transaction Audit and External Verification Services Contract will be terminated. Secondly, the Measurement Audit for Downstream Petroleum Products Contract will be amended,” the letter said.
The GRA explained that the fee structure will be revised to a fixed fee structure. In addition, other provisions such as service delivery expectations, termination, and intellectual property rights will be subjected to a thorough review.
“Thirdly, the Upstream Petroleum and Minerals Revenue Audit portions of the Contract for Consolidation of Revenue Assurance Services cannot take effect until a comprehensive technical needs assessment, value-for-money assessment, and relevant stakeholder consultations have been achieved,” the letter further read.
On January 2, 2024, President Nana Akufo-Addo instructed KPMG to investigate the contract between SML and GRA, following an exposé by the Fourth Estate.
The audit findings highlighted the need for a review of the revenue assurance contract to enhance its effectiveness.
It was revealed that no technical needs assessment was conducted before engaging SML, although it wasn’t legally required. KPMG concluded that SML only partially met the service requirements for transaction audit services.
Additionally, the estimated total fees to be paid to SML under the 2023 Contract for five years amounted to GH¢5,173,091,857.00, averaging about GH¢1 billion per year.
Calls have been made for the government to release the full report.
