A shocking forensic audit has uncovered a staggering GHS 303.48 million in unexplained “tax offsets” at the Electricity Company of Ghana (ECG), raising serious concerns about financial transparency and revenue allocation within the power sector. Apexnewsgh reports
The audit, conducted by PricewaterhouseCoopers (PwC), covered the period from October to December 2023 and revealed that ECG made these substantial deductions without providing supporting documentation or a clear rationale for the transactions.
The audit report shows that ECG recorded GHS 253.48 million in tax offsets in November 2023 and an additional GHS 50 million in December 2023. These deductions were made before calculating revenue available for Level B beneficiaries in the Cash Waterfall Mechanism (CWM), a system designed to ensure fair payment distribution across Ghana’s energy sector.
The PwC audit highlights several discrepancies, including unexplained tax offsets, weak reconciliation processes, and non-compliance risks. The report notes that ECG could not provide evidence supporting these tax offsets and the rationale for doing so, exposing the company to potential regulatory scrutiny and penalties.
The audit also reveals a troubling pattern in ECG’s statutory payment practices. Despite being required to allocate 12.5% of net collections for statutory payments, ECG made no direct statutory payment allocations in November and December 2023. Instead, the unexplained tax offsets reduced the pool of funds available for distribution to Level B beneficiaries, including critical power sector stakeholders.
Furthermore, the audit uncovered a GHS 500 million credit note issued by ECG to the Ghana Revenue Authority (GRA), intended to offset liabilities through April 2024. This arrangement affects the settlement of electricity bills by Ministries, Departments, and Agencies (MDAs), effectively depriving beneficiaries of the CWM of their share of collections.
The tax offset findings are part of a larger pattern of financial irregularities at ECG. The audit also revealed:
GHS 1.14 billion in underdeclared revenues
GHS 136.74 million in emergency fuel purchases, with only GHS 18.2 million declared
Operation of 84 bank accounts across 20 banks, contrary to Ministry of Finance and IMF directives
GHS 47.50 million in unauthorized vendor commissions
These findings pose a significant challenge to Ghana’s energy sector, already struggling with debt exceeding GHS 8 billion. Achieving financial sustainability and transparency will require addressing these irregularities and ensuring accountability within ECG.
Source: Apexnewsgh.com
