Rot at STC: GH¢81million used for bribery

A committee of inquiry set up by the government to investigate alleged financial malfeasance at the Intercity STC (ISTC) Coaches Limited has revealed that an estimated amount of GH¢81 million collected from passengers as clearance fees from 2000 to 2009 cannot be accounted for by the management. The clearance fees are paid by passengers to and from Abidjan, Cotonou and Ouagadougou, in addition to the normal fares charged by ISTC, to facilitate their smooth and quick movement through the many borders and barriers on the company's international routes. According to the report of the committee made available to the Daily Graphic in Accra yesterday, although the fees had been collected in the name of the company, there was no record of receipts, nor could the money be accounted for by the management. The three-member committee, under the chairmanship of Mr Abu Millah, a financial consultant; said the clearance money was "money used to corrupt international public officials along the company's international routes". "We believe the company can use other genuine means to get clearance on these routes and save passengers huge sums of money," the report stated. The committee identified some major areas of financial malfeasance, including the sale of tickets jn foreign exchange and their conversion into cedis, the purchase of second-hand engines and parts, the-use of management imprest and questionable payments by management between the period under review. Giving the breakdown of the estimated sums collected by management between 2000 and 2009, the report said GH¢2 million was stolen in 2000, GH¢4 million in 2001, GH¢4 million in 2002, GH¢6 million in 2003 and GH¢7 million in 2004. The rest of the collections were GH¢8 million in 2005, GH¢8 million in 2006, GH¢9 million in 2007, GH¢11 million in 2008 and GH¢12 million in 2009. The report noted that "the fact that these monies are not accounted for represents a serious control weakness which could facilitate fraud". The committee, which also had Mr Francis Sey and Mr Eric Tetteh as members, recommended that the collection of clearance fees from passengers should, be stopped immediately because it gave Ghana and the company a bad name in the international setting. It observed that the practice adopted by the company in respect of foreign exchange transactions also lacked transparency and accountability, which left room for corruption, which had resulted in the company suffering exchange losses. It said by virtue of its operations in Burkina Faso, Benin and Cote d'Ivoire, the company received foreign currency, mainly CFA, from the sale of tickets to passengers. From time to time, the company exchanged the CFA for local currency but did not keep records of the rates at which the exchange transactions were carried out, it noted. The committee further observed that due to lack of procurement and stores managers from 2000-2004 and in 2008 and 2010, there were no proper internal controls over purchases of stores and materials running into huge sums of money. It said the financial effects of the lack of an appropriate procurement arrangement at the ISTC could run into several millions of Ghana cedis. It recommended that the Managing Directors and General Managers of Finance and Administration of the company from 2000 to 2009 should be held liable for the lapses. On management imprest, the committee observed that all reimbursement made did not pass through pre-audit checks before cheques were written, a situation which was worrying. To enhance transparency on road clearance funds, it said tickets issued to passengers on international routes should be divided into two parts - normal fares and road clearance fees - on the same ticket issued, with separate bank accounts. For purposes of transparency and accountability in the handling of foreign currency, it recommended that all foreign exchange earnings or receipts should be converted through the banking system and that the company should open a foreign currency account for foreign currency earnings and receipts. "And any time local cedis are required for the company's operations the bank should be requested to convert the foreign currency into cedis for the country’s use,” it noted. Turning the spotlight on the SVANI contract which was entered into without a written agreement, the committee recommended that all transactions between the company and third, parties should have contracts signed to safeguard the company from embarrassment and unnecessary litigation. It expressed regret at the financial weakness of the ISTC and asked the management to find a more reliable means of generating additional revenue. When contacted, the Head of Business, Marketing and Public Relations of the company, Ms Gabriella Tetteh, confirmed that the Ministry of Transport had instituted an enquiry into the clearance fees being collected from the passengers by the ISTC,reports Emmanuel Adu-Gyamerah She conceded that the clearance fees were "bribes" paid by the company to officials at barriers and borders on the company's international routes. Ms Tetteh, who showed a copy of the report of the enquiry on her laptop, explained further that at first passengers on board the company buses used to pay those monies to the police and other officials themselves. Later on, she said, officials of the ISTC had to collect the monies from the passengers when the bus was full for onward payment to officials manning the various barriers and boundaries on the Abidjan, Ouagadougou and Cotonou routes. Asked whether the company was still collecting the clearance fees, Ms Tetteh said the system had now been streamlined. She said currently clearance fees, collected from passengers were indicated on their tickets and given to the drivers as imprest, which was accounted for on their return. Asked whether anybody had been punished as a result of the outcome of the enquiry, Ms Tetteh said she was not aware of any such action but indicated that senior management members of the company had been asked by the board to proceed on their accumulated leave. Source: Daily Graphic