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Introduction
You wake up as a businessperson to find a bank notification stating you owe GH¢1.24 billion more than you thought. You check your receipts, do the math yourself, and realise that the bank made a mistake. They recorded a huge bill but forgot to record the value of the new property they bought with that money. This is what the auditor-general discovered in Ghana’s national financial books for 2025.
To understand how this happened, think of service concession arrangements as a “build-now-pay-later” deal with the private sector. The government lets a private company build or upgrade something important, like infrastructure or ICT systems, and in return agrees to pay them back over time or to let them collect fees to pay off the debt the government owes.
In accounting, as cited in the Auditor General’s report, these deals are like a seesaw. If you record a debt (liability) on one side, you must record an asset of equal value on the other. However, the audit found that the government’s books were slanted. The Controller and Accountant-General (CAG) added a massive extra expenditure of approximately GH¢1.24 billion to the “debt” side but failed to update the “asset” side.
As a result, the national accounts showed a GH¢1.24 billion debt that shouldn’t have been there, undermining the reliability of the entire country’s financial reporting. This explainer provides a dive into the most significant accounting finding in the 2025 Auditor-General’s Report: the GH¢1.24 billion overstatement of service concession liabilities. This lapse was recorded in the Auditor-General’s report on the public accounts of Ghana for 2025.
What are Service Concession Arrangements?
To understand the finding, it is first necessary to understand what is being audited. A Service Concession Arrangement, often linked to public-private partnerships, is a contract in which a private company (the operator) builds or upgrades infrastructure, such as buildings or other public facilities, and uses that infrastructure to provide a public service on behalf of the government (the grantor).
Under paragraph 12 of the International Public Sector Accounting Standards (IPSAS 32), when the government enters into these types of deals, it must record both an asset (the infrastructure being used) and a corresponding liability (the obligation to pay the operator or allow them to collect fees).
The Finding: A GH¢1.24 Billion Discrepancy
During the 2025 audit, the Auditor-General discovered that the Controller and Accountant-General (CAG), the office responsible for preparing and managing public accounts, had significantly miscalculated these amounts in the national financial statements. The government reported GH¢40.35 billion as the service concession liability, but upon verification by the Ghana Audit, the amount was GH¢39.11 billion. This gives a difference or an overstatement of GH¢1.2 billion. This can be found on page 7 of the document.
This means the government’s books showed it owed over GH¢1.2 billion more than it actually did in relation to these private-sector partnerships.
Why did this happen? “The Accounting Error”
The Auditor-General identified two primary reasons for this massive error:
- Failure to adjust corresponding assets: The Controller and Accountant-General (CAG) added an additional expenditure of GH¢1.2 billion to the liability side of the balance sheet. However, under International Public Sector Accounting Standards (IPSAS 32), if expenditure enhances or relates to a service concession asset, the value of that asset must also be increased by the same amount. The CAG failed to make this corresponding adjustment to the assets, creating an inconsistency.
- Failure of systems: The audit revealed “inadequate reconciliation and review” before the accounts were finalised. There were also noted “weaknesses in the compilation and validation” of the documents used to track these multi-billion-cedi arrangements.
Why is this finding significant?
While GH¢1.2 billion is a fraction of the total national debt, its inclusion in the report as a top finding highlights several risks. Overstatements of this size undermine the accuracy, completeness, and reliability of the “whole-of-government” financial reports. A recent instance was when the Fourth Estate reported a story that a senior civil servant at the Ministry of Defence allegedly received GHS 427 million in unearned salaries over a 29-month period. Even though the data was clearly captured in the Auditor General’s report, the Ghana Audit Service released a statement apologising and clarifying that the massive figure was a “transpositional” error.
Also, such errors can mislead Parliament, international investors, and development partners about Ghana’s true financial position and its liabilities toward the private sector. The inability to trace reported balances directly to supporting records suggests a risk that other large liabilities might also be incorrectly recorded.
Response from CAG
The Controller and Accountant-General (CAG) formally acknowledged the audit observation and described the overstatement as an “error of commission.” The CAG stated that due to “time constraints” during the 2025 audit cycle, the corrective adjustment could not be made immediately. Instead, the government has committed to correcting these figures in the 2026 Whole-of-Government Accounts.
The Auditor-General has, however, demanded that the CAG investigate the source of the error further and strengthen the reconciliation processes to ensure that all future liability balances are “accurately measured” and “fully supported” by underlying agreements.
