"Auditor-General Indicts GNPC Over Misuse of Petroleum Revenues and Procurement Breaches"

The Ghana National Petroleum Corporation (GNPC) has been cited by the Auditor-General for financial and procurement irregularities in the implementation of its administrative and corporate social investment (CSI) projects, following the expenditure of over US$768 million in petroleum revenues between 2018 and 2023.

Per the 2024 Auditor-General’s report, GNPC received a total of US$1.6 billion in petroleum revenue within the six-year period, out of which US$768.35 million was disbursed on Level B activities, including capital investments, administrative expenses, and CSI projects.

Level B spending, as outlined by the Petroleum Revenue Management Act, is reserved for exploration, development, and related activities, including corporate social responsibility. However, public concern over the Corporation’s rising expenditure and stalled project implementation triggered a performance audit under Sections 13(e) and 16 of the Audit Service Act, 2000 (Act 584).

Unapproved spending and project neglect

The audit revealed that GNPC made a payment of GH¢4.9 million for the construction of the Royal Golf Club House, an unapproved project not captured in the Corporation’s budget endorsed by Parliament. While this project progressed, a number of Parliament-approved projects stalled due to lack of funds.

Furthermore, the report highlighted GNPC’s non-compliance with procurement laws, particularly in the use of restricted tendering without sufficient justification. The Head Office reportedly failed to meet the requirements of Section 38(A) of the Public Procurement Act (PPA), and the CSI Department, along with the GNPC Foundation, also violated internal procurement policies.

“We found that the CSI Department delayed project execution due to the late release of funds, causing several contractors to abandon sites,” the Auditor-General noted. “Many projects were left incomplete, not built to approved specifications, or provided with substandard fittings.”

The audit also uncovered that the GNPC Foundation spent GH¢2 million on projects that were left to deteriorate as a result of lacking ancillary infrastructure required to make them functional.

Recommendations to curb excesses

To address these inefficiencies, the Auditor-General recommended that all projects submitted to GNPC after parliamentary budget approval should be incorporated into the following year’s budget. The Corporation has also been advised to prioritise ongoing projects during budget allocation and refrain from implementing unbudgeted and unapproved initiatives.

On procurement, the Auditor-General directed the GNPC Chief Executive Officer to strictly comply with PPA guidelines and to avoid restricted tendering unless proper justification is provided.

In addition, the GNPC Board has been urged to ensure the CSI Department and GNPC Foundation actively participate in the procurement processes of implementing agencies, to guarantee alignment with internal policies and national procurement laws.

The findings raise serious questions about GNPC’s fiscal discipline and governance, at a time when the efficient management of petroleum revenues remains central to Ghana’s broader economic recovery agenda.