Reverend Stephen Yaw Osei, Chief Director of the Ministry of Works and Housing says Consultants for the Saglemi Housing Project, Architectural & Engineering Services Limited (AESL) did not perform their duty to ensure that the country had value for money.
Per his account before Justice Dr Ernest Owusu, a Court of Appeal judge, with an additional responsibility of the High Court, the state owned enterprise, AESL, together with Vito-Hugo-Coordenacaoe Gesto De Projectos (VHM), virtually slept on the job.
According to him, it is the duty of AESL, per the Escrow Management Account (EMA), to verify and certify milestone reports and advance payments to the project Contractor, OAS, but did not do so.
He explained that AESL failed to ensure deductions of 40% of the contract sum, representing US$80 million and advanced mobilisation given to the Contractor, whenever it raised certificates for payments.
Rev. Osei, prosecution first witness (PW1), on Thursday, 1st February 2024, further blamed the sector ministry for not also conducting internal validation on the certificates to check whether they consolidate work done.
His testimony under cross-examination prompted Godwin Edudzi Tamakloe, Counsel for one of the two former ministers standing trial, Dr. Kwaku Agyeman-Mensah, to ask various questions.
The Counsel asked the Witness whether AESL was also charged before the court and the answer was absolute no.
Mr. Tamakloe further added that, neither the EMA nor the Public Financial Management Act or Regulations assigns any internal responsibility on the ministry in respect of the contract.
PW1 concurred and added that the ministry has a larger oversight responsibility to ensure value for money for the work done.
As it stands, five people, Alhaji Collins Dauda and Dr. Kwaku Agyeman-Mensah, both former ministers for Works and Housing; Ridge Management Solutions DEC-LLL (RMS), representative and Director of VHM; Nouvi Tettey Angelo, former Chief Director at the Ministry, Ziblim Yakubu and Andrew Clocanas, then Executive Chairman of Construtora OAS Ghana Limited. Andrew died in the course of the trial.
They have been charged for failing to construct 5,000 housing units with US$200 million, which was borrowed for that purpose, thereby causing financial loss to the Republic of Ghana.
Some questions and answer;
Court: How much more can you finish?
Counsel: I have a few rounds on the payments and maybe wrap up.
Cross examination
Q. At the last adjourned date you indicated to the court that you were concerned about works at the Ministry of Water Resources and housing and that what went on at the ministry of finance was not a matter that converts you?
A. Yes. I don’t have any jurisdiction at the ministry of finance.
Q. Now, you do know that as the current Chief Director of the ministry, when certificates are raised by the contractor working for your ministry the ultimate decision to Honour the certificate or not lies with the ministry of finance. Correct?
A. Yes.
Q. And in this specific case, I’m suggesting to you that the Director of Budget at the ministry of the Finance in the person of Patrick Nomoo was the person who, on August 19, 2015, wrote to the Governor of Bank of Ghana to effect payments to VHM Ghana Limited and Ridge Management Solutions?
A. I’m not aware of that. All that I know is that request is done at the ministry and then the honorable minister writes to his colleague at Finance for payment. I’m not aware.
Q. Reverend, this afternoon you are simply saying that you are not aware because you know very well that this is what pertains within the two ministries?
A. The usual thing that happen between ministries is that request for payment is to be sent to the finance ministry for payment. It is the duty minister who forward that request unless he is not there and …
Q. And so even from your testimony you will notice that the minister only forwards the request to the paying ministry, which is the finance ministry. Correct?
A. The minister will only forward the request for release of funds after the internal checks and the honourable minister will update himself with the process before he forwards same to the finance.
Q. So, I’m correct to say that the schedule officer at the Ministry of Finance can reject or accept the copies that have been forwarded if the conditions are not satisfied. Correct?
A. I have already said I don’t have jurisdiction of what happens at the Finance ministry or responsibility over the ministry.
Q. I’m suggesting to you that, the Finance ministry if not satisfied with the IPCs that have been forwarded, it can reject them?
A. I have already told this court that according to the EMA, the role of the stakeholders was clearly defined.
Q. The Ministry of Finance was the borrower?
A. The contractor was OAS.
Q. The ministry of water resources works and housing is the developer as well as the account holder?
A. The BoG was the Accountant. The project was a project of the Ministry of Water Resources, Works and Housing and, therefore, the ministry was to ensure that the project succeeds by observing all the rules for a successful implementation of the projects.
Therefore, issues of validation of certificates and other processes were part of the responsibilities of the ministry that the state get value for money for the projects executed.
Q. And it is this validation of certificates that the amount was ceded to AESL because the minister himself does not go to the field?
A. It’s not. This is issue of various responsibilities. According to the EMA, when certificates are raised by the contractor, OAS sent to the consultant and a copy is sent to the ministry. It is not for anything why a copy is sent to the ministry. It is for a purpose, so the ministry can do its internal purpose to ensure that the milestone raised by the contractor corresponds to the amount of money to be paid to the contractor.
Q. So from this very testimony, you kept using the ministry because the ministry has different departments with specific responsibilities on this matter? Correct?
A. Yes.
Q. So that, there is a Director of Housing who has ultimate responsibility on ensuring that this internal rules and procedures are fully complied with. Correct?
A. It’s not and the reason is that, all letters or mails are sent to the Hon. Minister and then the minister will direct the Chief Director to take further actions if the need be. So Director of Housing will only work on documents referred to him or her by the Hon. Minister through the Chief Director.
Q. Kindly show him Exhibit H. Please look at paragraph 9:3:6, can you read the content to the hearing of the court?
A. Duties of the project consultant shall be limited to verifying and certified milestone reports and advance payments…in accordance with EMA agreements.
Q. Is it your case as you testified now that the project consultant did not perform its duty?
A. The project consultant did not perform its duty in the sense that when the EMA was…that is when the contract is signed between the ministry and the contractor. 40% of the contract sum representing US$80 million was to be given to the contractor, it was done.
The consultant was to start deducting monies from certificates raised by the contractor and my lord, the consultant failed to deduct part of the advanced mobilization to the state. That’s why I said they did not perform their duties.
Q. And confirm this to the court, the consultant here is AESL, correct?
A. There are two Consultants, AESL and VHM
Q. Have a look at Exhibit J. Show him page 9 of Exhibit J. The very last paragraph numbered 3. What’s the heading?
A. Obligations of the consultant.
Q. Can you read to the hearing of this court paragraph 3.1.1?
A. It stated that the consultant shall perform the services and carry out their obligations with all professional standards, employ appropriate technology, act in respect of any other activities related to this project and shall at all time report…
Q. And in this case, the client you referenced in paragraph 3.1.1 is the Ministry of Water Resources Works and Housing?
A. Yes.
Q. Now as you testify now, AESL is not one of the accused persons here. Correct?
A. Yes. I have said that I’m not the prosecutor and I don’t determine who comes to court.
Q. You see, Rev from your own Exhibit J. Verifying and certifying milestone reports are the responsibilities limited to AESL form Exhibit J?
A. On the context of exhibit J, it is yes. I have already testified in this court that the EMA clearly stated that when milestones achieved by the contractor should be sent to the consultant and a copy is sent to the ministry.
Even though internal validation processes are not stated here, either on Exhibit H or J, it goes to a larger extent to ensure value for money for work done. As I have said earlier, if the internal processes have been followed, issue of deduction of advanced mobilization from the contractors …
Q. From your own testimony you have confirmed this internal validation processes are outside Exhibit J.
A. Yes. We are in this court because the internal processes were not followed. If the dictate of the EMA have been followed as prescribed, the issue of value for money would have been ensured.
Q. This internal processes you alluded to are not in the Public Financial Management Act or in the Public Management Regulations. Correct?
A. It’s not true.
Q. Now can you tell the court where in the Public Financial Management Act and Regulations made under it is this internal processes stated?
Court: You cannot ask the witness of what is in the law.
Counsel: the witness has not proven he lacks capacity to answer this question.
Q. I’m putting it you that this internal processes you alluded to are not in the Public Financial Management Act or Regulations, but purely internal matter?
A. PMFA 921 enjoins the account holder and spending officer to ensure that funds allotted to the entity or the ministry are well protected and accounted for. Therefore, the internal processes are all geared towards ensuring accountability and value for money for the state.
Q. You see the agreement between the ministry and the consultant (AESL) was signed in April 2013 but the PMFA Act was passed in 2016.
A. Yes
Case adjourned to February 6 at 1:30pm
