The Auditor General has ordered the Takoradi Polytechnic to recover GH¢155,325.69 paid to some contractors.

The Polytechnic has also been ordered to reinstate GH¢65,325.69, which has been written as off bad debts, into the books of the institution, failure of which the officials would be surcharged.

The order was contained in a 2012 Auditor General Report sighted by The Chronicle.

According to the report, the tertiary institution advanced a whopping GH¢155,325.69 to three contractors working on various projects on campus, with the understanding that the money would be deducted from the contract sum, when they are being paid.

The report noted that midway into the execution of the project, the contracts were terminated as a result of slow progress of work without following legal procedures. The contractors have since failed to refund the money advanced to them to finance the projects.

The four contractors, as captured by the Auditor General’s Report, are Akaidoo Enterprise, Donajos and Jobeak Limited.

Akaidoo Enterprise was paid GH¢31,121.80, out of which GH¢10.000 has been refunded, leaving a balance of GH¢21,121.80.

For Donajos Limited, an amount of GH¢117,135.05 was advanced to the company to begin the project. The company has since refunded GH¢89,999.55, leaving a balance of GH¢27,135.50.

On the part of Jobeak Limited, a sum of GH¢32,068.29 was advanced to the company, which has since refunded GH¢14,999.90, leaving a balance of GH¢17,068.39 outstanding.

The AG’s Report chided the polytechnic for breach of the Regulation 104© of the Financial Administration Regulation (FAR), 2004, which states: “A head of department authorised to administer a class of advances shall ensure that advances are duly recovered in accordance with regulations or agreement relating to them.”

In spite of the regulation, the management failed to recover a total of GH¢65,325.69 advanced to the three contractors.

The Director of Finance of the polytechnic, in his response to the report, said the monies were advanced to the contractors, with the understanding that they would be deducted from the final payments due them.

According to the Auditor General’s Report, their validation to financial statements for the period under review, however, indicated that management of the polytechnic had written off the amount outstanding (GH¢65,325.69) as bad debt into the Income Statement, instead of taking steps to recover the amounts from the contractors.

This decision to write off the debt frowns on Section 12 of the Financial Administration Act 2003, which makes deletion from accounts the sole prerogative of the Ministry of Finance, subject to the approval of Parliament.

What the Auditor General’s Report found worrying was that another sum of GH¢90,000 advanced to the same three contractors and two others (companies) in 2011 had also not been recovered by the polytechnic management.

The AG noted that the decision of the polytechnic to write off the debt was taken by the Finance Committee of the Polytechnic Council.

The Auditor General observed that the failure of the management of the polytechnic to follow due process in terminating the contracts, coupled with the failure to recover the advances from the contractors, had resulted in the current negative state of affairs.

The Auditor General, therefore, recommended that the management of the polytechnic should reinstate the GH¢65,325.69 in the financial statement, as a matter of urgency, and initiate steps to recover the total advances of GH¢155,325.69 from the contractors, failure of which the officers who advanced the monies or terminated the contracts should be surcharged with the amount at the prevailing interest rate.