Buffer Stock Engaged Unlicensed Firms To Supply Food Under Free SHS - Audit Report
The Auditor General’s Department has also indicted the National Food Buffer Stock Company (NAFCO) for also engaging the services of all the 99 firms not licensed by the statutory agency to supply the food items under the Free Senior High School program in 2017 and 2018. As part of the efforts to raise all internally generated funds,
the companies seeking to supply food items for and on behalf of NAFCO are expected to pay a registration fee of GH¢500 and another GH¢1000, as licence fees, if approved. According to a recent audit conducted by the Auditor-General’s Department, such processes were all bypassed. 43 and 56 firms engaged by NAFCO in 2017
and 2018 respectively. We noted from our review of the cost of sales and accounts payable that 43 entities to whom payments were made for the purchase of white maize and other supplies totaling GH¢12,347,402.97 [in 2017] were not on the list of the LBCs obtained from the company’s operations team. We noted from our review
of the cost of sales that a sampled of 56 Companies to whom payments were made for the purchase of white maize and food supplies totaling GH¢30,360,044.00 [in 2018] were not on the list of the LBCs obtained from the Company’s operations team. The report also noted that NAFCO was also deprived of internally generated funds
amounting to about GH¢148,500 in revenue as a result of not collecting registration fees of GH¢500.00 cedis and licence fees of GH¢1,000 cedis per supplier from the 99 entities in question. The Auditor General in the report also complained that all such transactions with unlicensed suppliers may be susceptible to fraud. This
was captured in the Auditor General’s report on public boards, corporations, and other statutory institutions for the period ended 31 December 2020. In response to the findings, Management [of NAFCO] explained that some suppliers were also engaged on an emergency basis. However, we [audit team] sighted no documentation
supporting the explanation and there was no indication of registration and licence fees being collected from the above entities prior to bringing them on board as suppliers. That notwithstanding, the Auditor-General recommended that Management should collect the registration and licence fees from the companies in question.
In the same audit report, Auditor General’s Department observed that although NAFCO expended an amount of GH¢333,050 in the 2018 for monitoring activities under the Free SHS program, and there were also no supporting documents to justify such expenses. We noted that amount totalling GH¢333,050.00 relating to
monitoring and the evaluation of the Free SHS activities GH¢129,500.00, payment for calendar and office wares (GH¢185,776.00), and training in respect of Fixed Asset Management GH¢17,774.00 were not adequately supported with third party documentation such as receipts and signed sheet to account for them. In
addition, we did not sight any reports on monitoring and evaluation of the Free SHS activities for the year. The Company may be susceptible to misappropriation of funds and/or fraudulent reporting as a result of inadequate accountability for funds advanced for varied activities, the report added, and recommended that
management of the NAFCO should ensure that activity reports for monitoring and evaluation and training are produced by personnel as evidence of activities carried out.
Role of NAFCO
The National Food Buffer Stock Company Limited was incorporated under the Companies Code of Ghana, 1963, Act 179 on 11th March 2010. It is also a limited liability company, wholly owned by the government of Ghana. The company is governed by a seven-member Board of Directors. The Chief Executive Officer (CEO) is
also responsible for the day-to-day operations of the company. The CEO is assisted by other Directors and Managers. Among other functions, NAFCO purchases excess produce of maize, paddy rice, and soya beans from farmers, preserves, sells, and distributes these foodstuffs to state institutions. It is also in charge of the government Emergency Food Programme.