KMA indicted for using Common Fund to pay GH¢670,000 judgment debt

The Kumasi Metropolitan Assembly (KMA) has been indicted by the Auditor-General for using monies allocated to it by the government for development under the District Assembly's Common Fund (DACF) to pay a judgment debt.

Kumasi Metropolitan Assembly

It said in some instances, the monies were used on recurring expenditure.

The Assembly used the Common Fund meant for developmental projects to settle judgment debts totaling GH¢670,720.78 to four contractors by the year ended December 31, 2020.

The audit report said: "In all the four cases, the Assembly defaulted in payment of contractual obligations which the contractors (Kerecom, Osbon, Sapsco, and Saboadu) sought legal action and the court awarded judgment debts in favour of the contractors."

It stated that the assembly had gone foul of section 7 of the PFMA, 2016 (Act 921) which notes that "a Principal Spending Officer of a covered entity shall ensure the regularity and proper use of money appropriated in that covered entity."

The four contractors named to have been paid are Kerecom Company Limited, Sapso Construction Limited, Saboabu Enterprise, and Osbon Enterprise.

"The use of DACF funds to pay judgment debts which were not budgeted for deprived the Assembly of funds to execute projects in the Metropolis," the report noted.

The Auditor-General also recommended that the penalty paid for the default should be refunded from the Assembly’s IGF account into the DACF account.

It added: "Management should in future negotiate for arbitration to resolve contractual disputes."

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