The Controller and Accountant-General’s Department (CAGD) has directed all covered entities to obtain prior written approval before opening bank accounts. This directive applies to accounts with the Bank of Ghana or any commercial bank. The CAGD issued this order on August 17, aiming to tighten control over public funds.
This move addresses concerns that some covered entities have opened bank accounts without proper authorisation. Such actions contravene Ghana’s public financial management laws. Specifically, the CAGD states that this practice infringes Section 51(1) of the Public Financial Management Act, 2016 (Act 921). This section grants the Controller and Accountant-General sole authority to approve bank account openings for these entities.
This directive fits into Ghana's broader efforts to strengthen public financial management and accountability. Previous audits and reports have highlighted weaknesses in financial controls across various state institutions. Ensuring all public funds are managed within a clear, approved framework is crucial for fiscal discipline. This measure aims to prevent misuse or misallocation of public resources, aligning with the government's commitment to transparency.
The CAGD emphasised that the requirement is not optional for entities under the public financial management framework. They stated that bypassing this approval process breaches the law and undermines established controls for public funds. The department expects full cooperation from all covered entities to ensure adherence to the directive.
Failure to comply will have direct financial consequences for entities opening accounts without the required approval. Any bank account found without proper authorisation will be closed. All funds held in such unauthorised accounts will be transferred into the Consolidated Fund. The CAGD will also enforce appropriate sanctions against non-compliant entities, as per the Public Financial Management Act and other applicable laws.
This stricter approach signals a commitment to enforcing financial regulations more rigorously. Decision-makers and financial markets will closely watch the implementation and impact of this directive. It could lead to greater financial transparency and improved accountability within public institutions. The move also underscores the importance of central oversight in managing the nation's finances effectively.
The directive applies to both new and existing accounts opened without the necessary approval. Existing non-compliant accounts are subject to closure and fund transfer to the Consolidated Fund. This comprehensive approach ensures that all public financial activities fall under strict regulatory scrutiny. The CAGD is counting on the cooperation of all covered entities to ensure full compliance with Section 51(1) of Act 921. This will help maintain the integrity of Ghana's public financial system.