Gov’t rejects GH¢8.1bn in contractor arrears after audit uncovers irregular claims

The Ghanaian government has rejected GH¢8.1bn in arrears claims submitted by contractors and suppliers after an audit uncovered widespread irregularities, including duplicated invoices, falsified records and requests for payment for work that had not been carried out.

The findings were disclosed in Parliament during the presentation of a report on the verification of government arrears and financial commitments outstanding as of the end of 2024.

The audit — conducted by the Ghana Audit Service with support from Ernst & Young and PricewaterhouseCoopers — examined GH¢68.7bn in claims submitted to the Ministry of Finance.

Of that total, only GH¢45.4bn was validated for payment. Auditors rejected GH¢8.1bn outright, while a further GH¢13.3bn remains under review because of incomplete documentation and the absence of third-party verification.

Officials say the findings reveal a pattern of weak financial controls across several government institutions and underscore the scale of contingent liabilities that have built up within the public sector.

Breakdown of arrears claims

The audit focused on two main categories of government obligations: unpaid Interim Payment Certificates (IPCs) and invoices issued by contractors, as well as Bank Transfer Advices (BTAs).

Out of GH¢50.5bn in IPCs and invoices submitted for verification, auditors validated only GH¢29.2bn. About GH¢7.1bn was rejected outright, while GH¢12.2bn remains pending justification before any payment can be authorised.

For BTAs, GH¢18.3bn in claims was presented. Auditors approved GH¢16.2bn for payment, rejected nearly GH¢1bn and flagged another GH¢1.1bn for further verification.

Officials told Parliament that a decision by the finance ministry to suspend certain payments in January 2025 helped prevent the release of questionable funds, including nearly GH¢1bn in pending BTAs that were later rejected by auditors.

Fictitious liabilities

Among the most striking discoveries was a GH¢89.4m claim submitted in 2024 by the Ministry of Trade and Industry relating to interest payments under the government’s One District, One Factory (1D1F) industrialisation programme.

When auditors contacted five commercial banks listed as beneficiaries, all denied that the government owed them money under the arrangement. The auditors therefore concluded that the liability was fictitious.

In another case, a purported GH¢10.5m payment to a “Buffer Account” at a commercial bank was found to be unsupported. The bank confirmed that the account number cited in government records did not exist and did not conform to its account numbering system.

The revelations have prompted calls for a forensic audit of the 1D1F programme, under which government records indicate that GH¢391m had been spent on interest subsidies by the end of 2024.

Discrepancies in food relief programmes

Auditors also uncovered inconsistencies in food relief programmes managed by the Ministry of Food and Agriculture.

Government records showed payment for 34,000 metric tonnes of rice intended for distribution following a dry spell. However, the audit confirmed that only 24,000 metric tonnes were received and distributed, leaving 10,000 tonnes unaccounted for.

In another instance, the ministry reported delivery of 100,000 metric tonnes of maize valued at GH¢771.2m, yet auditors confirmed that only 11,900 metric tonnes had actually been supplied.

Overpayments and unsupported transactions

Further irregularities were identified under a contract within the Farmer Food Relief and Recovery Programme to transport 134,000 metric tonnes of maize and rice to farmers across the country.

The contractor transported just 35,000 tonnes — work valued at GH¢30.9m — but received payments totalling GH¢50m. The company was also given 7,311 tonnes of rice worth GH¢11.7m in lieu of cash.

The total compensation of GH¢61.7m far exceeded the value of work done, leading the Auditor-General to reject a further GH¢65.2m payment request from the ministry.

Other irregularities were detected across several public institutions.

The Ministry of Education reported GH¢160m in unpaid allowances for teacher trainees through the Ghana Tertiary Education Commission. Auditors found that no such arrears existed, potentially preventing a loss of more than GH¢159m.

In another case, GH¢6.1m appeared on the ministry’s payment schedule despite having already been settled by a donor partner, raising the possibility of double payment.

Auditors also identified Bank Transfer Advices totalling GH¢293m from six public institutions — including the Judicial Service of Ghana and the Office of the Attorney‑General and Ministry of Justice — that lacked supporting contracts, invoices or documentation.

Recycled and inflated claims

Beyond these cases, the audit discovered GH¢4.4bn in claims that had already been paid between 2020 and 2024 but were resubmitted for settlement.

These recycled claims originated from several ministries, including the Ministry of Roads and Highways, the Ministry of Health and the Ministry of Energy.

Duplicated and overstated claims worth GH¢1.4bn were also detected across ministries and agencies. The National Service Scheme alone overstated allowance arrears by GH¢334.5m.

Auditors further identified GH¢161.98m in overstated claims from agencies including the Ghana Highways Authority and the Ministry of Foreign Affairs and Regional Integration.

Questions over Agenda 111 payments

Irregularities were also reported under the government’s hospital infrastructure programme, Agenda 111.

A total of $7.9m was paid to 35 contractors as advance mobilisation funds. However, auditors found that the contractors either failed to mobilise to project sites or carried out work not commensurate with the payments received.

The Auditor-General has since issued surcharge notices after advance payment guarantees linked to the contracts expired.

Economic implications

Economists say the audit highlights deeper structural weaknesses in Ghana’s public financial management system, particularly the accumulation of arrears and contingent liabilities within government spending.

Public sector arrears have historically placed pressure on Ghana’s fiscal position by creating off-budget obligations that later surface as large payment commitments. When these liabilities crystallise, they can widen fiscal deficits and complicate debt management efforts.

The discovery of fraudulent or unsupported claims, however, may provide some fiscal relief in the short term by preventing additional spending from entering the government’s already constrained budget envelope.

At the same time, analysts caution that the scale of irregularities could undermine investor confidence if it reinforces concerns about governance and procurement oversight within the public sector.

Contractors and suppliers, many of whom depend on government projects, could also face liquidity challenges if legitimate arrears are delayed during the verification process, potentially slowing activity in sectors such as construction, agriculture and public infrastructure.

Government response

Officials say the report exposes systemic abuse of the public financial management framework, including fabricated claims, recycled invoices and forged delivery documentation.

The findings have been referred to the Office of the Attorney‑General and Ministry of Justice for investigation and possible prosecution of individuals found responsible.

Authorities say stricter controls will be introduced to prevent similar abuses in the future, including mandatory verification before payments are approved and tighter rules requiring all financial commitments to be backed by budget allocations.

Government officials argue that the reforms are necessary to restore discipline in public spending and rebuild credibility in the management of state finances.