The recent audit report conducted by PricewaterhouseCoopers (PwC) on the Electricity Company of Ghana (ECG) has brought to light significant discrepancies in the company's adherence to the Cash Waterfall Mechanism (CWM) established by the Public Utilities Regulatory Commission (PURC). The findings of the audit raise concerns about the reported collections and actual disbursements by ECG, amounting to approximately GHS3.5 billion over ECG’s CWM allocation from July 2022 to September 2023.
The report reveals that ECG's non-compliance with the CWM guidelines is not in line with the directives issued by the President, Nana Akufo-Addo, in August 2023. This disregard for Presidential orders undermines the principle of fair and equitable allocation of revenue to sector players, as approved by the CWM Standing Committee. The PURC has repeatedly urged ECG to cooperate and allow the CWM to function as directed by the President, emphasizing the need for the Ministry of Finance to honor its obligation by paying for the shortfalls.
Furthermore, the audit report highlights ECG's lack of cooperation in providing necessary information and documents, as well as its failure to respond to queries on identified infractions. The findings underscore a substantial departure from the intended distribution mechanism outlined by PURC, particularly in disbursements to non-CWM beneficiaries that exceeded the allocated amounts per the CWM guidelines.
In response to these findings, PricewaterhouseCoopers has recommended measures to strengthen the current CWM and enhance ECG’s compliance with its directives. These measures include process improvements in billing and invoicing, as well as the implementation of technology-enabled platforms to bolster transparency and accountability.
The audit report also emphasizes the importance of stakeholder collaboration, particularly with the Ministry of Energy, PURC, and other relevant parties, to establish a critical process for retrieving required data and information. This collaborative effort is essential for implementing the recommended measures and upholding the integrity of the CWM.
Moreover, the report calls for a medium-term redevelopment of the CWM onto a technology-enabled platform to strengthen its fundamental objectives. It also highlights the need for cyber security and data protection measures at ECG, including the implementation of a Disaster Recovery Plan/Framework and integration of Cyber Defence Mechanisms.
The findings of the audit report underscore the significance of addressing the challenges within Ghana's energy sector and ensuring financial sustainability. The implementation of the Energy Sector Recovery Program (ESRP) and the CWM is crucial for transparent, equitable, and timely payment of all revenues billed and collected by ECG on behalf of the entire electricity generation value chain.
As Ghana works towards strengthening its power sector value chain, it is imperative to address the issues identified in the audit report and take proactive measures to restore confidence in the CWM. This will require a concerted effort from all stakeholders to ensure compliance with directives and guidelines set forth by regulatory authorities.
In conclusion, the findings of the audit report shed light on critical areas for improvement within ECG and underscore the importance of upholding transparency, accountability, and compliance with regulatory directives. It is essential for ECG and other stakeholders to work collaboratively to implement the recommended measures and restore confidence in the CWM.
The analysis of the audit report serves as a valuable insight into the challenges facing Ghana's energy sector and provides a roadmap for addressing these challenges to achieve financial sustainability and transparency in revenue disbursement.
-source theheraldghana | curated by Aisha Yakubu | Ghana Crimes
