The Ministry of Finance has embarked on an exercise to ascertain the exact number of both local and foreign accounts being operated by Ministries, Departments and Agencies (MDAs). Since the ministry started investigations in February this year, over 4,000 accounts have been discovered and the number is still rising. Indeed a large number of MDAs have not yet complied with the MOF’s directive to validate all accounts or face sanctions.
Prior to the commencement of the exercise, government was aware of only 2000 accounts. Finance Minister, Yaw Osafo Maafo told the Business and Financial Times that government has given MDA’s, which are yet to submit their lists up to the end of April to do so. The Ministry will place embargo on disbursement of funds to those MDAs that fail to comply.
An example of the current situation is the Ministry of Health, which alone operates 80 separate accounts. It will be recalled that in 1997, the Rawlings administration consolidated public sector accounts with the Bank of Ghana in order to stem the round-tripping of government’s funding and allocation to MDAs into treasury bills, which in turn finance government itself. Government, Mr Osafo Maafo noted, would close down over 80 per cent of the 4,000 accounts to ensure greater supervision.
Some financial analysts Business and Financial Times spoke to say for effective monitoring of state funds (revenue collection, procurement and expenditure), MDAs must operate three accounts. The office of the Controller and Accountant General (CAG), deals with only 300 of the estimated 4,000 accounts being operated in the name of government.
This, according to some financial experts is not the best practice because the Controller and Accountant General, which is the main organ responsible for managing the budget, must have a mechanism for monitoring all monetary transactions on behalf of the government, who must in turn account to the MOF. According to them, revenue leakage, misappropriation of funds and embezzlement of revenue collected could be rampant in many agencies, whose financial transactions fall outside the supervisory net of the CAG.
