SML defends contract
-Challenges inaccuracies in KPMG report
Strategic Mobilisation Ghana Limited (SML) asserts that it has fully discharged its obligations as stipulated in the Transaction Audit Service Agreement with the Ghana Revenue Authority (GRA).
In response to findings from the KPMG audit report, SML disagrees with portions of the report indicating that the company only partially met the service requirements.
The report raises concerns that GRA may not have realized all the expected benefits from the service, partly due to the absence of monitoring and evaluation processes within GRA.
Director of Support Services at SML Yaa Serwaa Sarpong, stated that SML delivered fully, leading to subsequent recommendation and awarding of the downstream petroleum audit contract.
She emphasized that the Transaction Audit contract includes provisions for monitoring and evaluation services as well as a value-for-money assessment, all of which were diligently adhered to by both GRA and SML.
She noted that SML observed similar findings regarding External Price Verification Services in the KPMG report.
Furthermore, SML rejects KPMG’s observation that the Integrated Customs Management System (ICUMS) has inbuilt capabilities for External Price Verification.
She clarified that SML is an independent assurance audit firm contracted to audit ICUMS, assess customs at Customs Technical Service Bureau (CTSB) on classification and valuation, and audit the values accordingly.
She emphasized that ICUMS cannot audit its operations, and SML’s services provide extra oversight when it comes to classification and valuation.
Ms. Sarpong disagreed with KPMG’s findings regarding the realized petroleum volumes and the tax revenue realized as a result of compliance tools that led to increased volumes.
She explained that KPMG used the National Petroleum Authority’s (NPA) / ESLA Volumes during the audit to evaluate downstream petroleum performance for determining GRA tax revenue.
She argued that NPAs / ESLA Volumes are lifting or trading volumes, not GRA taxable volumes, and therefore cannot be used for performance computation.
She asserted that the taxable volumes are properly evidenced in the Bank of Ghana’s petroleum tax revenue receipts in its Petroleum Holding Accounts.
According to her, supervision within the sector showed a drastic monthly average increase in taxable volumes over the specified periods, resulting in excess gained volumes and revenue.
Ms. Sarpong stated that SML, in collaboration with the GRA, presented to KPMG the assertion that taxable volumes are appropriately evidenced in the Bank of Ghana’s petroleum tax revenue receipts within its Petroleum Holding Accounts.
Additionally, she highlighted SML’s supervision within the sector, revealing a significant monthly average increase from over 207 million (207,885,058) to 450 million (450,175,163) liters in taxable volumes during the periods January to December 2019 and May 2020 to April 2021, respectively.
SML increased revenue by GH¢14.8bn
She emphasized that this translates into an excess gain of over 10 million (10,308,536,872) liters and excess revenue amounting to GH¢14.8 billion (GH¢14,844,293,095).
Ms. Sarpong underscored that this notable increase in monthly average taxable volumes of 450 million litres has been sustained over the past three years of SML’s deployment.
She emphasized a sustained significant increase in monthly average taxable volumes over the past three years of its deployment.
SML criticized KPMG’s reliance on incorrect data, suggesting it leads to inaccurate conclusions.
Regarding compensation, SML denied claims that it received over GH¢1 billion for the revenue mobilization contract with GRA.
She pointed out that KPMG’s report lacked reference to investments made and taxes paid within the contract period, resulting in an inaccurate representation.
She highlighted the omission of GRA taxes, interest payments, investment repayment, and other taxes/duties, which creates a misleading impression of the relationship between compensation and investment costs.
“SML finds that KPMG’s failure to state GRA taxes of 31.5% taken before payment, interest payments of 32% plus the investment repayment made by SML, and other taxes/duties over the period creates a very unbalanced impression of the relationship between the compensation and the investment and other related costs. This omission is highly misleading,” she added.
SML clarified that the KPMG audit debunked claims of a speculated $100 million payment to SML and refuted the alleged 10-year contract claim.
Ms. Sarpong disputed KPMG’s assertion that a needs assessment was not conducted prior to commencing operations, asserting that all contractual obligations were fulfilled.
SML reaffirmed its commitment to contributing to Ghana’s development by adhering to ethically acceptable standards and maintaining the quality of its work.
