GH₵50m YEA fraud: My hands are clean – Former CEO

The former Chief Executive Officer of the Youth Enterprise Agency, Kobina Obu Beechem, has in a detailed report responded to claims of payroll fraud uncovered at the agency by the current administration.

The YEA on Wednesday confirmed that it had deleted 16,839 names from its payroll. The Agency said it took the decision after its internal audit showed that thousands of beneficiaries of YEA were being fraudulently paid. The agency stated that the rot amounted to over GHC50 million.

According to the acting Chief Executive of the YEA, Justine Kodua Frimpong, it initiated investigations into the payroll of YEA after it noticed some discrepancies in the report handed to it by the managers under the previous administration.

But in a detailed statement, Mr. Beechem said the rot did not occur during his tenure.

“The YEA Beneficiary management software after satisfying prescribed criteria, electronically signed all beneficiary appointment letters. My signature was embedded in the database and as and when the appointment letter was generated by the database, my signature was placed electronically on the appointment letter.

“According to the press statement/conference, these anomalies were detected in March and April of 2017. I handed over the management of the agency to the current CEO on Friday the 24th of February 2017, and so these anomalies occurred after my handing over. These are obviously fraudulent, and I would encourage the management to involve the appropriate authorities and apprehend those who forged our signatures.

“I commend the management for undertaking such an exercise. However in the interest of fairness and transparency, a detailed signed report from those management conducting the exercise would be very helpful and enable us to comment on the basis of empirical data. I would urge the publication of this report by management,” Mr. Beechem said.

Below is Mr. Beechem’s full statement

Introduction

The Youth Employment Agency has a mandate to create a World Class Public Service Organisation.

In consonance with HR Best Pratice globally, the YEA developed and adhered to a business process/workflow, in conformity with and existing wholly within the framework of the:

• Constitution of Ghana
• Financial Administration Act 654
• Youth Employment Agency Act 887
• Public Procurement Act 663
• Labour Act 2003
• ILO Decent Working Standards

and all other relevant enactments that relate to running a Public Sector Organisation in Ghana.

At a High Level, the Business Process consisted of the following Major Activities:

1. Recruit
2. Train
3. Employ and Deploy
4. Evaluate
5. Improve

This business process was underpinned by an online Beneficiary Management Software hosted in the NITA cloud which ensured strict adherence to the process.

Press Conference by YEA Management 7^th June 2017

A Press Conference was held by the YEA Management on the morning of the 7^th of June 2017. I would like to respond to the issues raised at this press conference.

HANDOVER

The outgoing Management left the following for the incoming Management of the YEA:

Over 100 million Cedis in the accounts of the Youth Employment Agency with

• The Bank of Ghana
• Agricultural Development Bank
• Guaranty Trust Bank
• Ghipps (Ezwich)

The outgoing Management also handed over Youth recruited or at various stages of being recruited :

1 – 2999 Beneficiaries who had vacated post

The Youth Employment Agency in meeting its mandate was always going to be one of Ghana’s biggest employers and HR departments. Vacation of Post and absenteeism is always a challenge in any HR endeavor and management evolved two strategies for dealing with it:

1. Employment of 200 Beneficiary Monitoring Assistants to visit beneficiary workplaces in all the 216 districts and collect data on beneficiary attendance.
2. Regular Monitoring and Evaluation exercise by Head Office Monitoring staff to complement monitoring by Regional and District monitoring activities

In line with #2 above, in January 2017, the Monitoring and Evaluation Department conducted the first part of a three stage Monitoring process. It covered the Eastern, Ashanti and Brong Ahafo regions and these are excerpts from the report submitted by the M & E department:

This report was handed over by the Director of M & E to the new CEO and new HR Director. She has been asked to proceed on leave.

I am supremely confident that the 2999 referred to are the 2374 that the M & E exercise conducted under the former management, submitted in its report to the current CEO. We are happy that their names have been taken of the payroll and hope that due process was leveraged.

Audit by Internal Audit Agency

In January 2017, officials of the Audit Service of Ghana were sent to the Youth Employment Agency to conduct a forensic Audit of the Agency’s activities. It is with surprise that I learn that the Internal Audit Agency was tasked to conduct a special audit in addition to the audit being performed by the Audit Service of Ghana.

Under Functions of the Internal Audit Agency Act Section 3 (8) “The Agency shall monitor, undertake inspections and evaluate the internal auditing of the MDAs and MMDAs”. I don’t know whether that can be interpreted as the Internal Audit Agency can undertake audits itself unless of course a really elastic interpretation is given to Sections 6 ( b, c & d )

That notwithstanding , a draft report is not a complete report and by definition is subject to modification. But in good faith , I will attempt to address each of the issues mentioned at the press conference.

Payments of unearned allowances to beneficiaries not at post

It would have helped if granular data relating to the above observation was made available to the public.

How many beneficiaries were paid GHC 1,247,300 cedis?

1. When did they start work, how long did they work for and when was their vacation of post noticed?
2. Is there a ranking by module ( Health, Education, Police et al ) that shows which modules had the highest occurences?
3. Is there a ranking by Region that shows the breakdown per region, which regions had the highest incidences and which regions had the lowest?
4. Within each Region, is there a ranking by District that shows the breakdown per district, which districts had the highest incidences and which districts had the lowest?

With this sort of information, we will all be able to determine the locations or modules to target and begin to determine what factors or which culprits to focus on.

I am limited by lack of access to the most up to date data but this is the data that I have been able to retrieve from my handing over notes regarding allowance payments and numbers.

Funds meant for official use paid into personal accounts

Under Level of Cash Holdings, Section 48 (2) of the Financial Administration Regulations states that:

“ A head of department shall ensure, as far as it is consistent with the convenience of the public and the control of transactions, that collections or payments are made by cheque, bank transfer or direct payment to bank accounts”

In compliance with the above, the former management of the YEA operated a largely cashless system and ensured that as much as was humanly possible, a complete electronic audit trail existed of all financial transactions from end to end. So from the Board right down to each employee, almost all payments were made either by cheque or Bank transfer and very rarely by cash.

As pertains with the Auditor Generals annual reports it would be extremely helpful to have a list and detailed breakdown of such funds for analysis.

In the circumstances, I am constrained from commenting but I would urge the new management to take the necessary and prescribed actions that the circumstances require if the evidence necessitates it.

Supporting Documents not accompanying payments

It would be extremely elucidating to have a list and detailed breakdown of such payments for analysis.

In the circumstances, I am constrained from commenting but I would urge the new management to take the necessary and prescribed actions that the circumstances require.

Procurement without adherence to due process

It would be extremely elucidating to have a list and detailed breakdown of these procurements payments for analysis. It would also be helpful to have details about the exact non-conformity with the procurement process.

In the circumstances, I am constrained from commenting but I would urge the new management to take the necessary and prescribed actions that the circumstances require.

Discrepancies between data generated from the YEA portal and data obtained from the District Offices

It would be extremely elucidating to have details of these discrepancies and their non-conformity with laid down statutes or enactments.

In the circumstances, I am constrained from commenting but I would urge the new management to take the necessary and prescribed actions that the circumstances require

Beneficiaries recruited without appointment letters

The Beneficiary Management System is designed to print appointment letters only when certain criteria have been satisfied. District Directors input information into the system relating to the beneficiary. The system does not allow District Directors to approve beneficiaries. Once beneficiary information is entered into the system, on Regional Directors can finally approve beneficiaries.

Once a Regional Director electronically approves a beneficiary entry, the system is designed to print an appointment letter. This appointment letter is generated with a unique YEA Number and a barcode.

By design, no beneficiary can be paid without an appointment letter being generated. Before a beneficiary is paid, his or her YEA Number is combined with his or her Ezwich number to form a unique ID for the Ezwich system. Without these two attributes, no payment can be made to any beneficiary. The Ezwich system simply would not allow payments to be made and before any payment is made, Ghipps conducts comprehensive validation checks on the payroll data to ensure that each beneficiary:

• Has an Ezwich number
• Has a YEA Number
• Appears only once in the YEA Payroll database (deduplication)

Physical Verification Exercise by Management

I commend the management for undertaking such an exercise. However in the interest of fairness and transparency,  a detailed signed report from those management conducting the exercise would be very helpful and enable us to comment on the basis of empirical data.

I would urge the publication of this report by management.

Pre-Auditing

Pre-Auditing , was adopted by the former management of the Youth Employment Agency. A detailed study of payment vouchers that I signed will evince the signature and stamp of the Internal Auditor at the time were present on the voucher before I signed then and payments effected based on the payment voucher.

Appointment Letters purportedly signed after my departure

The YEA Beneficiary management software after satisfying prescribed criteria, electronically signed all beneficiary appointment letters. My signature was embedded in the database and as and when the appointment letter was generated by the database, my signature was placed electronically on the appointment letter.

According to the press statement/conference, these anomalies were detected in March and April of 2017. I handed over the management of the agency to the current CEO on Friday the 24^th of February 2017 and so these anomalies occurred after my handing over.

These are obviously fraudulent and I would encourage the management to involve the appropriate authorities and apprehend those who forged our signatures

Conclusion

Leveraging article 199 2 of the constitution I voluntarily retired from the Public Service on the 13^th of February 2017. I intend withdraw totally from public life to enjoy my retirement

Thank you

Online Recruitment

Sections 3 (l) of the Youth Employment Act 887 mandates the Agency to maintain a database of all Ghanaian Youth engaged by the Agency.

In compliance with this directive the YEA operated a cutting-edge recruitment process. No paper applications were made or accepted. All applications had to be made via the internet through the YEA’s online database. This was strictly adhered to.

District Based Selection

The YEA operated a totally decentralized process. The YEA collaborated with other partner Government agencies to whom these beneficiaries were posted. In the selection process, the partner agency led the selection process in interviewing and selecting the applicants. So in the case of the Police, the District Police Commander led the process of interviewing and selecting applicants. Likewise in the Fire, Prisons, Health and Education modules.

Training

Ghana is a member of the ILO and has signed onto the Decent Work Initiative. In line with this, the YEA ensured that each and every beneficiary who applied and was accepted into a module, went through a training program. These training programs were designed in close collaboration with the partner Agency to ensure that each beneficiary was equipped with with job related as well as life skills.

Employment and Deployment

The YEA collaborated with the Agric Development Bank to go to the training centers in each of the 216 Districts to capture the Biometric details of each beneficiary.

All beneficiaries had ADB or Rural Bank accounts connected to the Ezwich system. So if they were indeed paid, then there is an audit trail to each and every bank account. The Ezwich system uses biometric deduplication to uniquely identify each beneficiary. So what they claim about two or three people using the same account to get paid is untrue.

Once successful applicants were interviewed, selected and trained, the YEA software system logged the fact and generated an appointment letter.

Monitoring

The M & E Directorate conducted regular monitoring during training and post training stages of recruitment for the various modules

Facts and Figures

As at the transition team handover we had made the ff payments:

Plea to New Management

I will plead with the new Management to take a second look at the following actions against members of my former management team and staff

1. Contracts of my two Deputy CEO’s summarily terminated. These were Public Servants who had gone through due procedure and been approved by the Public Services Commission. 16 Public Servants serving with the YEA have been summarily forced to proceed on leave. Once they proceeded on leave, their positions were replaced by new members of staff drafted in on contract. This is in direct contravention of Article 191 (b) of the Constitution which states: “A member of the Public Services shall not be dismissed or removed from office or reduced in rank or otherwise punished without just cause ”….emphasis on the just cause.
2. Compelling them to proceed on leave with a letter and replacing them with new people in my interpretation is tantamount to removing these Officers without just cause and the new management is encouraged to reinstate them
3. There is an Establishment Level prescribed by the Public Services Commission which stipulates exactly how many people should occupy each position in each Headquarters, Regional and District Office of the YEA. These movements run the risk of exceeding the establishment level prescribed by the Public Services Commission and the Management Services Division of the Office of the Head of the Civil Service which stipulates the organization chart, the directorates and the staff working within each Directorate.
4. Employing staff in direct contravention of the approved Scheme of Service from the Public Services Commission and without approval from a Governing Board
5. Circumventing laid down procedures for employing people into Ghana’s Public Service
6. Refusal to pay responsibility allowances since January 2017 for Directors who had been asked to proceed on leave

Conclusion

In conclusion, I hold the Youth Employment Agency very dear to my heart. We are all Ghanaians and I sincerely wish the new management well.

I took advantage of Article 199 (2) of the Constitution of the Republic of Ghana and I voluntarily retired from the Public Service of Ghana on the 13^th of February 2017. I intend to enjoy my retirement to the fullest and I wish to withdraw totally from public life and comments.

I will not be making any comments whatsoever on any aspect of the Youth Employment Agency henceforth and I will expect all and sundry to respect my wish to a private, quiet retirement.

For God and Country

Kobina Obu Beecham Jnr

7^th June 2017