The Chief Executive Officer of the Millennium Development Authority (MiDA), Mr. Martin Eson-Benjamin, has said completion of projects envisaged under the Millennium Challenge Accounts (MCA) would enhance the socio-economic transformation of the country, reduce poverty and help raise the living standards of the people.
He said the MCA had injected $547 million capital into agricultural transformation, transportation, rural development, water provision, electricity expansion and construction and rehabilitations of irrigations dams.
But when MiDA meets the press on Tuesday May 4, 2010 the more challenging questions might focus on the recent PricewaterhouseCoopers report on some expenditure categories and the controls surrounding use of these funds.
The U.S. Office of Inspector General (OIG) insists on an audit of the funds managed by the MiDA every six months. The latest report covers the period January to June 2009 for total expenditures of $35,495,020, which is approximately 67% of the total disbursements in 3 years. The audit was completed in January 2010.
The purpose of the Compact is to reduce poverty by raising farmer income through private sector-led agribusiness development.
The audit included: (a) expressing an opinion on MiDA-Ghana’s fund accountability statement (b) evaluating and obtaining an understanding of MiDA-Ghana’s internal control structure and (c) determining MiDA’s compliance with the Compact terms and applicable laws and regulations.
The auditors reported that, except for ineligible questioned costs of $25,193 and unsupported questioned costs of $25,519, the fund accountability statement presented fairly, in all material respects, program revenues and costs incurred for the period audited. On the back of $35.5 million this is a rather immaterial figure.
The ineligible costs are reported as an instance of noncompliance, which pertains to Value-Added-Tax paid to Sea-Freight Pineapple Exporters-Ghana.
The auditors also identified multiple material weaknesses in the internal control structure involving (1) inadequate monitoring of travel expenses given to staff and (2) overstatement of Expenditures
The OIG also reprimands and reminds MiDA that this is the second report containing a non-compliance finding and the weakness of internal control on inadequate monitoring of travel expenses. The same previous findings were reported in September 2009.
Based on the review, the OIG makes 2 recommendations to MiDA:
Recommedation 1. We recommend that MCC have Millennium Development Authority-Ghana correct the internal control deficiencies and the material instance of noncompliance described on page 20 of the Report on Internal Control and on page 23 on the Report on Compliance with Agreement Terms and Applicable Laws and Regulations. OIG further recommends that MCC verify the corrections have been made.
Recommendation 2. We recommend that the responsible MCC official make a management decision on the $25,192 ineligible questioned cost and $25,519 unsupported questioned cost described on page 11 of the Report on the Fund Accountability Statement and recover any amounts determined to be unallowable.
MiDA started operations in February 2007 should be complete in February 2012 operates in 30 districts with five in the Northern zone, 16 in the Southern zone and nine in the Afram basin zone. With this in mind, MiDA Ghana, will be spending $241 million to train Ghana’s farmers on modern methods of farming.
According to Mr Martin Eson-Benjanim, Chief Executive Officer of MiDA, the investment will also go to increase irrigation development, land tenure and improve post harvest handling services as well as linkages to farmlands and markets.
He said so far, 30 Districts have benefited from the Authority’s projects in the Northern Sector, Southern Sector and the Afram Plains and that 60,000 farmers were to be trained.
Since the inception of the program about $400 million has been committed to train 40,000 farmers to help improve their yield and livelihood.
MiDA will also allocate $143 million to transportation to enhance access to international air and sea ports, improved trunk road network in the Afram Plains and Lake Volta Ferry Services.
On rural development projects, Mr Eson-Benjanim added that $101 million dollars would be used to support community services such as energy for domestic and commercial uses, water and sanitation facilities, strengthen rural financial institutions and public sector procurement capacity.
Standard Bank and AGRA have signed an MoU for a US$100 million low interest loan to help assist African farmers. MiDA made a contribution of US$2 million to the program.
With this amount of expenditure MiDA will have to be more mindful of the OIG’s comments in order not to jeorpardise the next tranche of funds and even the next Compact for further development. For the average Ghanaian on the street, project visibility is key to convincing them of the benefits of this Compact.
By Sydney Casely-Hayford, Business in Ghana