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Public Utilities Regulatory Commission (PURC) blows over GH¢ 99,000 on X’mas hampers

Mr. Samuel Sarpong,Executive Secretary,PURC.
The management of the Public Utilities Regulatory Commission (PURC) spent GH¢99,663 on Christmas hampers for 2012, the Auditor General has revealed.

According to the latest Auditor General’s report (2014) on public boards, corporations and other statutory institutions, although the amount was released for the  purchase and distribution of the hampers in 2012,  “the purchase of hampers was not  retired nor  adjusted  to  the  personal  advance  account  of  the imprest holder” in contravention of laid down regulations.

It traced  the development to  “the absence of a mechanism in place to ensure  that such advances were retired promptly.”

Consequently, it recommended that management of the commission should devise a mechanism to ensure that advances were retired promptly.

The report mentioned  PURC  management as having indicated that the retirement of the imprest used in purchasing the hampers took place in 2013.

Investment interest

The Auditor General also faulted the management of PURC for failing to invest staff Provident Fund amounting to GH¢2,843,595.05 in treasury bills as agreed on.

As a result, the Auditor General  insisted that management of the commission should look for a better way to compensate the staff.

Giving the breakdown of the Provident Fund, the report said the first principal amount was GH¢1,350,000 which should have earned an interest of GH¢32,232.07 by the end of 2012.

The second amount of GH¢896, 758 should have earned an interest of GH¢25,507.22 by the close of  2012, while the third amount was GH¢596,837.05 but the interest to be earned was not available.

The report said, “Our checks  revealed that the balance on the  Provident  Fund  Account at the  time of  the investment was not enough to support the amount invested. It stands to reason, therefore, that the amount invested is the commission’s own money and not that of the Provident Fund.

“We therefore recommended that the interest earned on the investment was not for the Provident Fund and must be regarded as  investment income for the commission,” it said.

The report mentioned management of the commission as responding that “its decision to add some of the interest earned on the commission’s investment was to compensate staff for the loss of interest on their investments as a result of the non-investment of the Provident Fund contributions in treasury bills at an agreed time.”

Software and ancillary service

The report further touched on a contract that was entered into between the Commission and Power Systems Energy Consulting of USA on June 8, 2012, for the  supply of software for the commission’s operations and to provide various ancillary services as detailed below:

“We observed that only  50 per cent  of the software  cost  (US$ 400,000) had been paid, leaving 50 per cent outstanding as at the end of 2012. We also noted that the total cost of the ancillary service (US$ 208,440) has  been paid and expended accordingly.

“However, the commission did not withhold taxes amounting  to  US$107,371.76  on  the  payments made to Power Systems and Energy Consulting of USA contrary to  Section 84(2) of the Internal  Revenue Act 2000 (Act 592),” the report stated.

Against that backdrop, the Auditor General  advised the PURC management to be abreast of the tax law and act accordingly, adding that, “We also recommended that management should put in place measures to remit 50 per cent of the total sum of US$107,371.76  which is due to the tax authority and pay the outstanding amount  immediately it falls due.”

The report said, “Management responded that the original contract of  US$608,440 approved by the Public Procurement  Authority (PPA) was net of taxes. This formed the basis for the 50 per cent payment net of taxes made to   Power Systems  Energy  Consulting for  work completed to date.”

“Subsequently, approval has  been given by the Public Procurement  Authority to  revise the contract price of  the  procurement of the Dayzer Ghana Power model, ancillary services  pricing   and   Equilibrium   Capacity   pricing   from   Messrs   Power  Systems Energy Consulting to include 15 per cent as the tax component to  bring the total cost from US$608,440 to US$715,811.76. Therefore, the  outstanding tax payments will be made for the 50 per cent already paid and  tax deductions made for the remaining subsequent 50 per cent payments  based on the new PPA approval which is inclusive of tax,” it added.

Operational results

Generally, the report said total incomes to the PURC increased by 6.8 per cent from GH¢12,170,943 in 2011to GH¢13,004,054 in 2012. That was due to increases in regulatory levies and donor funds among other inflows.

 “Total expenditure of the commission for 2012 amounted to GH¢16,538,091   compared   with   GH¢8,740,878   recorded   in   2011, representing an increase of 89.2 per cent. The major items which accounted for the increase in expenditure were personal cost which rose by  48.5 per cent, commissioners allowances,  14.5 per cent, administrative expenses,  39.6 per cent and operational expenses 163.9 per cent.

“As a result of the significant expenditure incurred in the year  under review as shown above, the commission recorded a deficit of  GH¢3,534,037 as compared to a surplus of  GH¢3,430,065 in 2011, a reduction of 203.0 per cent,” it said.

Pro-poor water programmes

The report indicated that the pro-poor programmes undertaken by the PURC  were not backed by  Legislative  Instrument  (L.I.).  

It mentioned total receipts of the pro-poor water programme as going up by 8.7 per cent from GH¢4,639, 238 in 2011 to GH¢5,042,326 in 2012.

“Total expenditure also increased by 409.8 per cent from GH¢927,848  in  2011  to  GH¢4,730,209  in  2012,” it added.

Regulatory levy

According to the report, GH¢25,163,214.15 was to be realised  from levies  for 2012  and  applied  in  accordance with the PURC Amendment Act.

“However, GH¢10,761,277.11 of the above was not collected  from GRIDCO as at the end of the year. As a result, the commission  was not able to distribute the levies due to the beneficiaries in full,” it said.
 
The Auditor General ,therefore, recommended that management of the PURC should ensure that GH¢10,761,277.11 is paid by GRIDCO.

Source: graphic.com.gh

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