According to the Auditor-General’s report for the 2023 fiscal year, a total of GH¢8.8 billion was identified as financial irregularities. The figure ballooned to GH¢18.4 billion for the 2024 fiscal year. These large numbers indirectly indicate forgone investment in infrastructure and other critical social amenities for the citizens.
What constitutes a financial irregularity
The Auditor-General and Public Accounts Committee (PAC) define “financial irregularities” as unpaid loans, unauthorised cash payments, payroll problems, procurement violations, tax under-remittances, and contract breaches.
The Macro View
From the late 1990s to 2023, Auditor-General reports show that these irregularities as prevalent and at a higher rate relative to their recovery rate. The 2003 Internal Audit Agency Act, GIFMIS implementation, and the 2016 PFM Act sought to modernise internal controls and reduce these leakages. Despite these reforms, the World Bank’s PFM reform diagnostics and project documents highlighted implementation issues and unfinished institutional activities. International assessors and program partners demanded more enforcement and transparency.
The Micro View
Yes, many MDAs, MMDAs and SOEs have weak internal audit systems. The Internal Audit Agency’s follow-up demonstrates unequal recommendation implementation and significant staffing, training, and investigation capability gaps in internal audit units. Internal auditors often report to the accounting officers whose systems they dispute, generating a conflict and managerial meddling. Audit committee recommendations frequently end in administrative drawdown rather than recoveries or sanctions. These operational shortcomings encourage recurring irregularities.
The foregoing points to three critical dimensions:
Weak enforcement. The Auditor-General can identify and report on financial irregularities. However, prosecutorial powers, surcharges and recoveries rest with the Attorney General, with support from PAC, and accounting officials. Due to delayed, inconsistent, and politically motivated law enforcement, these often yielded less than expected results and recoveries consistently below reported losses.
Institutional fragmentation and implementation issues. Lack of coordination, data fragmentation, and incentives to obey the regulations undermine GIFMIS, the PFM Act, and audit committees that were reforms meant to avert the menace. The foregoing is so because, according to the review reports by the World Bank (2021), on the above measures, the scope of these reforms often outpaces the government’s implementation capacity.
Patronage and aristocratic power. Senior appointments, procurement contracts, and party protection indicate the presence of patronage networks. Even though there are agencies with legal capacity under Article 187(7)(b) and other legislation, agencies, in most cases, shrink from sanctioning politically exposed appointees due to political ramifications.
Did the major reforms fail us?
Many of these reforms have failed largely due to their technocratic nature, and their enforcement has often been left for the same politically exposed actors. While GIFMIS and audit automation are important, digital controls just delay the bottleneck. Fast inquiry follow-up, legally binding consequence management, and public disclosure of their utilisation are needed. Civil society and the media have monitored public sector integrity more, yet perception indices and governance surveys suggest no improvement. This shows system distrust and insufficient enforcement.
The Four Pragmatic Measures to Combat Financial Irregularities
A mandatory consequence management plan: After the audit, the Attorney-General and accounting officials must enforce prosecution, surcharges, or administrative restrictions within the shortest time within the next fiscal year after the year to which the audit report relates
Public Audit Recommendation Tracker: A GIFMIS-based public site showing MDAs’ and MMDAs’ outstanding recommendations, recovery status, and delays. This makes audit reports valuable for monitoring. Internal audits need more flexibility and must report administratively to MDAs and functionally and professionally to the Internal Audit Agency to protect budget security and prevent arbitrary reassignment.
Empower the Auditor-General and Public Accounts Committee: Create a Resourced PAC for quarterly hearings with scorecards, give the Auditor-General more recovery power, and establish a small, independent prosecutions liaison office to help the AG expedite cases relating to financial irregularities from Auditor General’s reports.
Officialise citizen monitoring: Create official partnerships with civil society groups and investigative media to track recoveries and report on the “state of recovery.”
In general, even though internal audit issues are considered serious, they indicate deeper issues. The amount and frequency of infractions over the past 30 years reveal that the internal auditing systems in MMDAs and MDAs have been and remain flawed, with poor enforcement, vested interests protected, and modest reforms. To turn Auditor-General reports into reform tools rather than “documents of lamentation, “there must be a clarion call for accountability. This includes defining legal deadlines, clarifying implementation, strengthening oversight agencies, and building a civic environment that prohibits public fund targeting. The foregoing makes no other call but a deliberate and pragmatic re-structuring and retooling of all state institutions with oversight powers under the 1992 constitution to prevent and or detect financial irregularities, and where reported, prosecute, surcharge and ensure recoveries within a more reasonable timeline.
By Vincent Yao Dzadu
