University of Ghana’s GHS456,000 locked up in defunct financial firm – Audit report
An amount of GHS456,199.08 invested by the University of Ghana has been locked in a defunct Fund Management Company; Liberty Asset.
This was contained in the 2020 Auditor-General’s report, which revealed that the University’s College of Health Sciences and School of Medicine and Dentistry invested the money in contravention of the school’s own financial Regulations and Governance.
While the College of Health invested GHS377,003.00, the School of Medicine and Dentistry invested GHS79,196.08. Both investments were made in 2016.
“There was no evidence of due diligence report available to continue investment with Liberty Asset in terms of its risk profile”, the report mentioned.
“We noted that the College Administration and School of Medicine and Dentistry (SMD) invested a total amount of GHS 456,199.08 in Liberty Asset which, is not a commercial bank and does not meet any minimum capital requirements of Bank of Ghana”, paragraph 1009 of the audit report on Public Boards noted.
Liberty Asset was one of the companies the Securities and Exchange Commission (SEC) revoked their licences in 2019.
SEC, in a statement, explained that the revocation follows the companies’ failure to “return client funds which remain locked up and in a number of cases, has even folded up their operations.”
But the University of Ghana’s anomaly according to the report was a result of the failure of the College to develop a monitoring mechanism to ensure that all units adhere to the university’s directives.
It added that the situation has the tendency to increase the financial risk exposure of the university.
The Auditor-General has recommended to the management of the university to strengthen its investment oversight activities on treasury management and ensure strict adherence to the policy instruction on investments.
“Furthermore, any investment amount lost by the university may be disallowed and surcharged against the affected officers in accordance with Article 187 of the 1992 Constitution of Ghana and Section 18 of the Audit Service Act 2000, Act 584,” the report added.
Management response
Management of the University of Ghana in responding to this said that the investment was “made before the Vice Chancellor’s instruction issued on 4 October 2018. The investment was being rolled over as efforts made to call in the investment were not successful”.
The University insisted that due “processes were followed before the investment was made”.
“Liberty Asset is currently under receivership and follow-ups are being made. Investment Committee has been reconstituted and has issued guidelines on investments as of February 2020 pending the finalization of the investment policy. This is to ensure that such incidences do not recur,” University authorities added.
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