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KPMG Report: SMEL changed name to SML after PPA refused sole-sourcing request three times

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Strategic Mobilisation Ghana Limited (SML), formerly known as Strategic Mobilisation Enhancement Limited (SMEL), underwent a name change following its proposal for a sole-sourced contract, which was thrice rejected by the Public Procurement Authority (PPA) in 2017.

These details are part of the comprehensive KPMG report disclosed by President Akufo-Addo on Tuesday.
President Akufo-Addo commissioned KPMG to conduct a thorough review of SML’s numerous agreements with the Ministry of Finance and the Ghana Revenue Authority (GRA) after The Fourth Estate’s investigative reporting uncovered multiple irregularities.

SML had previously asserted that its services were instrumental in mitigating issues such as under-reporting, adulteration, and misdirection of petroleum products, which are known to cause revenue deficits in the downstream petroleum sector.

However, when The Fourth Estate presented evidence indicating that these services were actually being rendered by other entities and the National Petroleum Authority (NPA), Christian Tetteh Sottie, SML’s Managing Director, conceded that SML was not involved in any such activities. Subsequently, SML removed these erroneous assertions from its website.

In spite of these admissions and other unsubstantiated claims, in 2023, Finance Minister Ken Ofori-Atta began a process to broaden SML’s contracts into the gold and oil production industries, increasing the annual contract value to over $100 million.

Following The Fourth Estate’s exposé, President Akufo-Addo halted the contracts and assigned KPMG the task of auditing and compiling a report. Although a press statement summarizing the findings was issued by the president, the full report sheds further light on SML’s dealings in its contracts with the Ministry of Finance and the GRA, revealing more concerning details.

“SMEL was incorporated on 14 February 2017. During the period 16 June and 14 September 2017, GRA made three (3) unsuccessful attempts to obtain PPA’s approval to single source SMEL to provide transaction audit services. On 22 November 2017, SMEL changed its name to SML,” page 11 of the KPMG report stated.

The report says the approval was denied because the company lacked “capacity or prior experience” in the delivery of the services.

Page 14 of the KPMG report states that the GRA proceeded to award contracts to SML without the approval of the PPA.

The report says, “On 1 June 2018, SML was appointed a subcontractor to West Blue Ghana Ltd, then a service provider to GRA, to provide transaction audit services for seven (months) period ending 31 December 2018.”

The report continues: “On 1 January 2019, GRA executed without PPA’s approval, and extended transaction audit services agreement with SML, renewable on monthly basis, following the expiration of West Blue’s contract and SML’s subcontract agreement on December 31, 2018. GRA entered into six (6) service agreements with SML, utilising the single-source method without approval from PPA, as outlined below:

  1. Transaction Audit Services— 1 June 2018
  2. Contract Extension— 1 January 2019
  3. External Price Verification Services— 1 April 2019
  4. Consolidation Services Agreement (Transaction Audit & External Verification Services) — 3 October 2019.
  5. Measurement Audit of Downstream Petroleum Products—3 October 2019.
  6. Addendum to Measurement for Downstream Petroleum Products Agreement—29 July 2020

The KPMG report said, “Evidently, GRA executed the above contracts with SML in breach of Act 663 [the Public Procurement Act] as amended.”

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