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Finance Ministry GYEEDA overspending was to prevent judgement debt

Ato Forson explained that GYEEDA asked for the money to pay Zeera Group, Asontagba Cottage Industries, Ghana Management Services and Craft Pro for services rendered to the agency. In addition, payment of allowances to some NYEP beneficiaries also accounted for the over-expenditure.

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Deputy Minister of Finance, Mr Casssiel Ato Forson play

Deputy Minister of Finance, Mr Casssiel Ato Forson

A Deputy Minister of Finance, Mr Casssiel Ato Forson, has defended the release of GHC199 million to the Ghana Youth Employment and Entrepreneurial Agency (GYEEDA) in 2012, saying it was to avoid running into judgement debt in case of default.

His comments came after members of the Public Accounts Committee of Parliament criticised the Finance Ministry for releasing the money to youth agency, which is about 2,000 percent above the agency's budget of GHC20 million.

Ato Forson explained that GYEEDA asked for the money to pay Zeera Group, Asontagba Cottage Industries, Ghana Management Services and Craft Pro for services rendered to the agency. In addition, payment of allowances to some NYEP beneficiaries also accounted for the over-expenditure.

According to him, these companies "were asking the Ministry of Finance to make a payment.

At that point the Ministry of Finance looked at the implications as to failure on the part of the Ministry, what it will mean for the overall fiscal management. It was then agreed that there are clauses in there that adds additional cost to the state by a pineal rate and a possibility of a judgment debt issues and others," he added.

He continued: "For that matter the Ministry had two options; failure to pay or wait until 2013 and make proper budget allocation for them and then pay that over the next year. That will actually mean that we would have to make provision for additional cost outside the total work done.”

Ato Forson told PAC that the money paid to the companies were from the centralized vaults that was available to the Finance Ministry, adding that the ministry did not exceed its approprations. "He [Finance Minister] decided to allocate part of the centralized vaults that is available to the Ministry of Finance to the Ministry of Youth and Sports for the purposes of paying for those expenditures. At the end of the day, we did not exceed the appropriations, the appropriations were intact.”

“The re-allocation only happened when we moved money from the centralized vaults to the Ministry of Youth Employment for the purposes of paying for this debt. Therefore the Ministry made a payment of GHc199 million to the Ministry of Youth Employment. "

"It is also important that I state that every single request the Ministry of Finance received came from the Ministry of Youth and Sport, they were verified and payments were made at a point.”

Ato Forson told PAC that the Finance Ministry now asked for commitment certificate from ministries, department and agencies (MDAs) before payments was made.

"We now have a handle on commitment. The MDAs can't sign a contract and bring it forward for payment," he said.

The release of the money to GYEEDA through the Ministry of Youth and Sports was captured in the 2013 Auditor General's Report.

The Auditor General questioned why GHC199 released to GYEEDA was not captured in the supplementary budget of the Ministry of Finace.

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