BOST approves GHS30m in excess of contract sum – A-G report

The Auditor-General’s report on the public accounts of Ghana, public boards, corporations and other statutory institutions for the period ended 31 December 2020, has revealed that the management of the Bulk Oil Storage and Transportation Company Limited (BOST), contracted America Tank and Vessel Inc. (AT&V) in July 2006, to supply storage tanks and pipelines and ship same to Ghana.

As of October 2020, a total sum of US$5,129,170.05 had been spent on the project.

The storage tanks were supplied and installed leaving the pipelines yet to be shipped to Ghana.

The Auditor-General, therefore, want the management to justify the delays in bringing the pipeline to Ghana for installation and take immediate action to prevent further delays.

Also, the management approved the total payment of GHS30,442,551.00 in excess of the amount budgeted for and the auditor-general wants them to justify the misapplication and further advised them to desist from such acts and operate within approved budgets.

The report further disclosed that the management used Bulk Road Vehicles (BRVs) in conveying products from Akosombo to Buipe instead of making use of its Barges, which could have saved the company a total amount of GHS393,253.24.

Also, BOST was unable to collect debt amounting to GHS446,845.00 owed by four Bulk Distribution Companies (BDCs).

Other infractions contained in the report are:

1. Management awarded a contract amounting to US$39,000,000.00 to Rolider Company in June 2015 for the construction of its Head office complex prior to approval by PPA for a Restricted Tendering in December 2015. We recommended to Management to provide the supporting documentations and various approval letters from the appropriate approving authorities and further follow the procedures as enshrined in Section 90 of Act 663 as amended.

2. Management awarded contract amounting to US$5,129,170.05 through Restrictive Tendering method but did not seek approval from the Central Tender Review Committee (CTRC). We recommended that Management should regularise the transactions by seeking retrospective approval from the CTRC, failing which sanctions shall be applied

3. We noted that procurement activities totalling GH¢242,496.45 were not part of the approved and revised procurement plan of BOST. We recommended to Management to regularise the transactions by seeking retrospective approval from the Entity Tender Committee.

4. Management paid twenty-four (24) staff who were on secondment for more than a year a total amount of GH¢6,611,240.97 contrary to the Collective Bargaining Agreement of BOST. We entreated Management to justify the payment. Also, affected officers should immediately be recalled or cease payment of their salaries.

5. We noted that Management paid an amount of GH¢151,987.00 covering a period of 41 months. This payment was in respect of half salary paid to an interdicted staff. We recommended to Management to take steps in bringing the matter to a close to avoid additional cost to the Company.

6. Management seconded ten staff members to unrelated institutions contrary to the Collective Bargaining Agreement of BOST. We recommended to Management to justify their action and immediately recall the staff concerned or cease payment of their salaries.

7. We noted that two contract works with a total contract sum of GH¢6,582,731.55 were abandoned. Management should make funds available to the contractors, to enable them complete the projects.

8. Management did not occupy an administrative block completed and handed over accordingly by the contractor at a contract sum of GH¢1,785,419.60. We advised Management to immediately put the facility to use to avert any unforeseen circumstances.

9. We noted that, construction works on the Head Office Complex and seven other contracts with a total contract sum of GH¢43,454,345.00 were unduly delayed. We recommended to Management to ensure that funds and other needed resources are committed towards the completion of the delayed projects.

10. We noted that variation of GH¢1,291,613.00 on the Bolgatanga BRV car park was not approved by the Entity Tender Committee (ETC) and without formal contract amendments or addendum. We urged the Procurement Department and the Works Unit to seek retrospective approval from the ETC.

11. Management did not enter into contract agreement with 3 service providers despite their engagement with the company for the supply of services to the tune of GH¢1,207,991.62 and US$642,946.67. We recommended that Management should formalise the contract with these service providers and make available the contract documents for our review.

12. Management could not readily make available three Title Deeds covering BOST landed properties. We recommended that Management should obtain the title deeds for the affected landed properties.

13. We noted from our visit to Savelugu that ‘test boxes’ installed on the Buipe-Bolgatanga Petroleum product pipelines (B2P3) were said to be stolen or removed. We urged Management to resource the depot to enable them clear the ROW and replace the missing heads and the stolen test boxes.

14. Our visit and review of reports indicated that Savelugu depot has not transferred product as a booster station from November 2016 till date. As a result, PMS Products had been held in the pipelines for the period. We recommended to Management to make the Bolgatanga Depot operational to enable the product to be pushed.

15. We noted that barges 1 and 2 at Akosombo depot have been decommissioned for maintenance since June 2013. Management is encouraged to pursue the maintenance of the two (2) barges to further enhance the strategic agenda of products reserves countrywide.

16. A visit to the Akosombo depot disclosed that, the facility did not have discharge meters installed to efficiently measure the products discharged for onward distribution to Buipe depot. We recommended to Management to consider the installation of the meters at the discharge point to receive and measure products efficiently.

17. Our visit to six depots disclosed that no security surveillance unit was available whilst CCTV Cameras installed in some depots were not functioning. Management should review and factor the setting up of the security surveillance unit at the depots to enhance the overall security of the facilities.

18. We noted that all depots rely on manual processes in measuring stock levels in the respective tanks instead of automating the gauging system. We recommended that Management should consider the acquisition and automation of the Tank Gauging System with related accessories as part of the depot upgrade to facilitate efficient stocktaking.

19. We noted that all guest houses belonging to BOST need maintenance works. We advised Management to conduct structural integrity test on the buildings and take action on the outcome to make them habitable.

20. We noted during our visit to Mami Water depot that the facility has not been operational since June 2010 due to lack of maintenance works. We urged Management to expedite action on the maintenance works in order for the depot to be operational.

21. We noted that the Board of Governors did not approve six essential policy documents for the Company. We recommended to Management to impress on the Board to approve the policy documents for its immediate implementation.

22. Our interactions with the Head of ICT disclosed that the BOST has not registered with the Data Protection Commission as a Data controller. We urged Management to as a matter of urgency take the necessary steps to register with the Data Protection Commission as a data controller and consequently appoint a data supervisor to ensure data is protected from unauthorized use.


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