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Introduction
Following the massive GH¢ 2.7 billion documentation gap, the audit of the 13th African Games revealed deep-seated issues in how contracts were managed and how cash was handled by the Local Organizing Committee (LOC) and relevant ministries, including the Ministry of Youth and Sports. These findings point to systemic weaknesses that led to significant potential overspending and high-risk financial operations.
In part two of the explainer, DUBAWA sought to bring to light the poor financial management issues with key focuses on the GH¢336.63 million “Fixed Sum” trap, GH¢39.53 million in overpriced contracts, and the cash management failures. The full report can be found here.
Contract management and pricing issues
The audit highlighted a breakdown in the structural integrity of contracts, where the sports ministry agreed to fixed costs for services that should have been billed based on actual usage.
- The “fixed sum” trap (GH¢ 336.63 million)
The audit findings revealed that contracts for services that are inherently variable, such as anti-doping tests, accommodation, catering, and transportation, were irregularly awarded as fixed predetermined sums. According to the report, a sample of 14 contracts reviewed indicates that the local organisation committee entered into and ratified a portfolio of contracts totalling GH¢ 336.63 million. Page 38 captures the details.
In standard practice, these are “ad-measurement” services, meaning the state should only pay for the actual number of tests conducted or meals served. By signing fixed-sum contracts, the government paid the full amount regardless of the actual consumption or headcount, creating a high risk of paying for services never rendered.
- Inflated and over-priced contracts (GH¢ 39.53mn)
Auditors identified specific instances where contract prices were significantly higher than market rates or justifiable costs (This can be found on page 61 of the report.)
Source: Auditor General’s Report infographic showing the top 4 overpriced services
These include,
- Vehicle Rentals: Approximately GH¢ 13.12 million in overpricing for hired vehicles for the game.
- Accommodation: Overpricing of hotel stays totalling approximately GH¢ 10.08 million.
- Anti-doping tests: Excess costs of approximately GH¢ 8.01 million.
- Sports equipment: Overpricing identified at GH¢ 3.87 million.
- Vehicle branding and debranding: Overpricing of vehicles identified at GH¢2.03 million
- Bloated invoice and overpayment for the Additional Vehicle Hiring Invoice at GH¢2.2 million
- Excessive rental costs at GH¢ 239,520 million
Recommendation
The report recommended the recovery of the amount from Mustapha Ussif, the former Minister of Youth and Sports; former Chief Director William Kartey; and Dr Kwaku Ofosu-Asare, the former local organisation chairperson.
- Financial and cash management failures
Beyond the contracts themselves, the actual movement of money was often handled in ways that bypassed national financial safety protocols, raising eyebrows.
- Bypassing official systems (GIFMIS)
Auditors found that GH¢20.37 million was paid to third parties outside of the Ghana Institutional Financial Management Information System (GIFMIS). (Page 83 provides further details). GIFMIS is the mandatory system designed to track government spending and ensure every cedi is accounted for. By circumventing these controls, leadership engaged in high-risk transactions that lacked a standard audit trail.
- High-risk cash withdrawals: The same GH¢ 20.37 million was flagged for being handled through irregular and high-risk cash withdrawals. (Page 81 provides further details.) Large-scale cash transactions in public procurement are considered a major red flag, as they are much harder to track and verify compared to electronic transfers (EFTs).
- Unaccounted merchandise: The Games produced a significant amount of merchandise, such as T-shirts and souvenirs. However, the audit found “poor accounting” for these items, totalling approximately GH¢ 27.24 million. (Page 87 provides further details). Specifically, the Local Organizing Committee (LOC) failed to properly account for the proceeds from the sale of this merchandise.
- Unrelated payments: The LOC made payments totalling GH¢ 15.09 million for purposes that auditors determined were completely unrelated to the delivery or hosting of the 13th African Games. (Page 78 provides further details).
