State Agencies now need Finance Minister’s approval to spend – Adongo

Isaac Adongo, the Ranking Member on Parliament’s Finance Committee, has called for stricter financial oversight. He emphasized the need to reform the auditing framework for state-owned enterprises, especially the Electricity Company of Ghana (ECG).

In an interview on GHOne TV, Adongo noted that the government is gaining control over commitment expenditures. However, more measures are needed for agencies that operate outside direct government funding.

“We are starting to manage commitment controls,” he said. “We have extended this to government expenditures.” He explained that some agencies spend from their own balance sheets.

Adongo highlighted ECG as a key example. These agencies can procure through the Public Procurement Authority (PPA) without enough financial scrutiny. New measures now require them to get clearance from the Minister of Finance.

He warned that these actions create contingent obligations for the state. If these agencies cannot pay their debts, they will rely on government support. “The government needs to know what is happening,” he stressed.

Adongo also criticized auditors who review these entities' finances. He questioned their ability to assess key operational risks effectively.

“How can you audit ECG without addressing major risks?” he asked. He pointed out issues with procurement and imported items in operations.

Discussions are ongoing with Parliament’s State Interests and Governance Authority (SIGA) and the Ministry of Finance. They aim to improve audit quality and hold professionals accountable for negligence.

“To what extent did the audit strategy address inherent risks?” Adongo queried. He underscored the need for reforms to enhance financial discipline and accountability in state-owned enterprises.