KPMG report uncovers six unapproved contracts between GRA and SML
The comprehensive KPMG report, released by the Office of the President on May 22, has revealed that the Ghana Revenue Authority (GRA) had entered into six contracts with Strategic Mobilisation Limited (SML), contrary to the presidency’s initial claim of only three contracts.
The audit report details that all six contracts were executed without the necessary approval from the Public Procurement Authority (PPA), a clear violation of procurement laws.
The contracts include:
- Transaction Audit Services (effective from June 1, 2018)
- Contract Extension (effective from January 1, 2019)
- External Price Verification Services (effective from April 1, 2019)
- Consolidation Services Agreement (Transaction Audit & External Verification Services) (effective from October 3, 2019)
- Measurement Audit of Downstream Petroleum Products (effective from October 3, 2019)
- Addendum to Measurement for Downstream Petroleum Products Agreement (effective from July 29, 2020)
The report states, “On 1 January 2019, GRA executed without PPA’s approval, and extended transaction audit services agreement with SML, renewable on a 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.”
KPMG concluded that these actions were in breach of Act 663, the Public Procurement Act, as amended.
The need for the audit arose from an investigation by The Fourth Estate, which uncovered multiple irregularities in the contracts involving SML, the Ministry of Finance, and the GRA.
These discrepancies pertained to SML’s claims of mitigating revenue losses in the downstream petroleum sector. Despite SML’s assertions that their services were curbing under-declaration, dilution, and diversion of petroleum products, evidence indicated these roles were performed by other companies and the National Petroleum Authority (NPA).
SML’s Managing Director, Christian Tetteh Sottie, acknowledged the inaccuracies and removed the false claims from the company’s website. Despite these revelations, Finance Minister Ken Ofori-Atta moved forward in 2023 to expand SML’s contracts to include the gold and oil-producing sectors, increasing the annual contract value to over $100 million.
In response to the findings and subsequent public outcry, President Akufo-Addo suspended the contracts and directed KPMG to conduct a thorough audit. The president’s press statement on the findings has been complemented by the full report, which provides a detailed account of the significant operational and contractual irregularities involving SML and its dealings with the Ministry of Finance and the GRA.
