An independent audit conducted by PricewaterhouseCoopers (PwC) has uncovered significant financial discrepancies and procedural violations within the Electricity Company of Ghana (ECG).
The audit, which examined ECG’s accounts for the fourth quarter of 2023, highlights issues ranging from under-reported revenues to mismanagement of bank accounts.
Key Findings:
Under-Declared Revenues: PwC’s audit revealed that ECG under-declared revenues to the Cash Waterfall Mechanism (CWM) by 1.14 billion cedis compared to figures reflected in ECG’s bank accounts. The CWM is a system designed to allocate revenues equitably among sector players.
Underpayments to Sector Players: Despite the under-declared revenues, ECG also failed to fully disburse payments to sector players as mandated by the CWM. Over a three-month period, the company underpaid its partners by 609 million cedis.
Multiple Bank Accounts: ECG contravened directives to consolidate its revenue collections and disbursements into a single bank account. Instead, the company maintained 84 separate bank accounts across 20 banks.
Private Vendor Payments: A private vendor contracted by ECG to collect revenues received 47.5 million cedis in commissions over three months. The vendor’s payments were prioritized over those of the power generators, raising questions about financial governance.
Unsubstantiated Tax Offsets: ECG deducted 303 million cedis from its declared revenue over two months, citing “tax offsets.” However, the auditors found no evidence or justification for these deductions.
Concerns Raised
The findings raise serious concerns about ECG’s financial transparency and governance. The use of multiple bank accounts, in particular, creates opportunities for revenue leakage and complicates accountability. Additionally, the prioritization of vendor payments over sector players undermines the stability of the energy supply chain.
Calls for Accountability
Energy sector stakeholders are calling for immediate corrective action. “These findings are alarming and demand urgent reforms to ensure accountability and restore trust in ECG’s operations,” said an industry expert. The audit’s revelations come at a time when the power sector is grappling with financial challenges, making it imperative to address inefficiencies and irregularities.
PwC’s report underscores the need for stricter oversight and adherence to financial regulations within ECG. As the company faces mounting scrutiny, stakeholders will be watching closely to see how it addresses these issues moving forward.
