3 August 2017

Ghana: Minority Wants Finance Minister Probed

The Minority in Parliament is calling on the Auditor-General and Parliament to thoroughly probe the Finance Minister, Mr. Ken Ofori-Atta, over alleged doctoring of figures to make the economy look good.

According to the Minority, the alleged conduct of the Minister was a violation of a long-standing "cut-off" fiscal rule.

At a press conference yesterday, the Minority Spokesperson on Ffinance, Mr. Casiel Ato Forson, stressed that the Minister lacked the authority to make the adjustment he made under the Financial Administration Regulations (FAR) Regulation 193 on closure of accounts.

He quoted the regulations, which reads: "(1): At the close of business of the last working day of each month or financial year, whichever is applicable, the accounts shall be balanced off.

"(2): The receipts and payments that belong to a period of a financial year, other than the reporting period of financial year, shall be shown in the accounts, and the details shall be given in the NOTES, in accordance with regulations 187 and 188."

Mr. Ato Forson continued that checks on some Loan Agreement provisions indicated that where the last working day falls on a weekend, the "next working day" rule applies to interest and principal (debt service) payments.

"Given these rules, the NDC did not go back to adjust the 2008 Financial Year records with arrears arising out of policies and actions such as single spine, "gang of six" roads, subsidies, etc.

"As we aim to be law-abiding and responsible citizens, but not spectators, we all will be better served as a nation, if these issues raised are treated with a sense of urgency, fairness and dispatch by the Ministry of Finance, for the development and in the supreme interest of our dear country, Ghana," he stated.

The Minority, according to Mr. Ato Forson, was shocked to note that the Minister had reversed interest payment of a colossal amount of GH¢758.5 million and review of GDP (without a formal GSS Statement) at the end of Financial Year 2016 (Para 14 and 15).

"It is quite clear that the Minister made this reversal, which violates long-standing 'cut-off' fiscal rules for the sole purpose of making the government's dismal performance for the first half of Financial Year 2017 'look good'.

"The action also purports to make the performance for FY (Financial Year) 2016 worse.

"This 'doctoring' of figures is very shameful. This, to say the least, is very regrettable and cosmetic. From appendix Table 5A: Page 53 of the Mid-Year Fiscal Policy Review of the 2017 Budget Statement and Economic Policy, Summary of Revised Central Government Operations-2017, the Minister of Finance has reduced domestic interest payment by an amount of GH¢657,005,271 to create the impression that expenditure on domestic interest payment is being reduced.

"This is clearly artificially compressed and contrived. This is a blatant disregard for cut-off fiscal rules, in accordance to the Financial Administration Regulations (FAR), Regulations 193."

The Minority's allegation is in response to the recent Mid-Year Budget review presented to Parliament by the Minister for Finance.

The Minister indicated that all indicators were pointing to the right direction and responding positively to the policies of the NPP government.

However, the Minority took a strong objection in the review by the Minister, observing that the long-standing 'cut-off' fiscal rule was that expenditures and revenues that fall due on the last day of the month or year during a weekend, accrue to the next working day, Jan 2, 2017.

"Indeed, this rule also applies to situations where the last working day falls on public or statutory holidays. For this reason, when the last working day of the month or year falls on a weekend or holiday, BOoG also closes the books on the prior working day.

"Therefore, Ghanaians must be alarmed that the Minister will, unilaterally, change a long-standing fiscal rule (and indeed business rule) with respect to only one particular EXPENDITURE (interest payment), for the misplaced and selfish purpose of making the performance of the first half of 2017 'look good'. Ghanaians must be even more alarmed that BoG will ostensibly reopen its books to allow this to happen.

"Furthermore, we note with concern that the budget did not state that MoF and BoG applied the same rule to revenues that accrued on Saturday 31st December 2016, but were paid on the next working day on Jan 4, 2017.

"To be consistent, the Minister and Governor should have reversed all cash buffers that were carried over to Financial Year 2017.

"We call on the Auditor-General and Parliament to immediately conduct an investigation into this violation of [the] long-standing, 'cut-off' fiscal rule by the Finance Minister.

"Clearly, the Minister lacks the authority to make the adjustment he made, under the Financial Administration Regulations (FAR) Regulation 193 on Closure of Accounts."

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