BOST responds to Auditor General’s 2021 Report

The Bulk Oil Storage and Transportation Company (BOST) has responded to the Auditor General’s Report as captured in its 2021 annual Report.

Management Response

Generation Investment Co. Ltd VRS BOST

Observation famous. This may have been averted if BOST was financially sound on the time. Sometime in 2014, BOST commenced negotiations in a bid to purchase 16 acres of land from Generation Investments Company Limited (GIC) for the event of Natural Gas Infrastructure at the price of US$11,200,000.00.

Negotiations between the events stalled till June 2016 when a settlement cost plan was lastly brokered. By a professional forma bill from GIC to BOST dated June 9, 2016, a three-tranche cost choice was proposed. No particular dates or deadlines for the installment funds have been indicated.

Total funds made in respect of the land stood at US$5,360,000.00 as at December 2016. Due to money circulation difficulties suffered by BOST, it couldn’t meet its cost obligations within the method by which it initially envisaged after making cost of just about fifty % of the price of the land.

On September 20, 2018, when a requirement discover was obtained from GIC’s legal professionals for cost of the excellent steadiness of US$5,840,000.00. BOST subsequently met with the legal professionals to negotiate cost phrases after which it formally proposed to pay the steadiness in eleven equal month-to-month installments of US$500,000.00 every from January 2019 with steadiness of US$340,000 to be paid in December 2019 in a letter dated December 21, 2018, due to its money circulation constraints.

Meanwhile, GIC had proceeded to file a writ for restoration of the sums on November 14, 2018. 677. GIC nevertheless, refused BOST’s cost proposal in a letter dated January 18, 2019, describing BOST’s proposal to be “low instalment quantities over a reasonably “lengthy compensation interval” and proposed phrases which have been onerous to BOST.

Attempts at settlement failed as BOST couldn’t meet the calls for of GIC within the method they have been demanding. Due to its money circulation scenario, it was compelled to search a declaration for title of the portion of land commensurate with the funds made thus far on the time of the go well with amongst others. In the circumstances, the courtroom was left to make a willpower culminating within the judgment of November 6, 2020.

The workers who performed the important thing roles main to the scenario aren’t any extra within the employment of BOST. As at January 1, 2022, BOST has made full cost of its obligation and we’re within the technique of getting the land switch to BOST to use the land for the LPG challenge.

Hask Oil Company Vrs Bost

Sometime in July 2013, Hask Oil delivered petroleum merchandise in BOST’s storage tanks in its regular course of enterprise as with different BDCs. To confirm the precise portions of plaintiff’s shares in addition to the balances of the opposite BDCs in storage, BOST engaged Ernst & Young as exterior auditors to examine and validate all BDC claims. It duly knowledgeable the BDCs together with Hask in regards to the audit, on the finish of which it was established that the inventory balances in favour of plaintiff to which it agreed was 34,143 litres of gasoline and 1,341,571 litres of gasoil.

On May 4, 2016, BOST launched 74,824 litres of fuel oil valued at GH¢109,886.15 in addition to 2,350,225.42 litres of gasoline valued at GH¢3,755,648.47 to Hask on the prevailing worth on the date of launch. As far as BOST was involved, the volumes of merchandise have been totally refunded to Hask Oil to cushion them in opposition to any shortfalls, and it owed it no additional obligation. BOST place was that it was by no means a celebration to the credit score facility Agreement concluded between Hask Oil and the financial institution and ought not to be accountable for any prices related to identical.

Indeed, by the findings of a Product Loss Claims Committee arrange to examine BDC claims of merchandise loss in BOST’s system, Hask Oil ought to have refunded your complete quantity of 74,824 litres to BOST as identical had been made out there for lifting way back to April 2014. By a Judgement dated twenty first October 2019 the High Court present in favour of Hask and granted it all of the reliefs as endorsed on its writ. Management has taken applicable motion by sanctioning the authorized officer who was not current in courtroom and had the enchantment cancelled in favor of HASK Oil. The worker who was accountable for operation (B F Arthur) in the course of the interval was terminated.

West African Petroleum Company Ltd. (Wapco) Vrs Bost

On April 2, 2015, BOST obtained a requirement discover from WAPCO dated March 19, 2015, to the impact that it was owed an quantity of US$300,000.00 for the rental of storage tanks made in November 2008. Records out there indicated that there had been a sequence of different transactions tied to the cost which urged that WAPCO additionally owed BOST some amount of cash. It was agreed between BOST and WAPCO in a gathering held on June 13, 2016, on the problem that the reconciled sum due WAPCO was US$255,423.92.

BOST demonstrated good religion and paid this quantity to WAPCO on July 12, 2016, which was duly acknowledged by them. At the assembly referred to above, the problem of waiver of curiosity by WAPCO was broached. . However, due to a delay in cost, a subsequent demand was obtained from WAPCO demanding a steadiness in curiosity.

After negotiations BOST proposed to pay curiosity on the fee of 8% which was initially agreed to by WAPCO, which later modified its thoughts because of which Ecobank cheque numbered 0200461 within the sum of GH¢480,338.99 dated March 9, 2018, which was made out to them for assortment had to be returned to chest.

Subsequent to the submitting of a writ to get better their curiosity declare on March 29, 2018, each events agreed to the cost of curiosity on the fee of 10% as a substitute of the 12% WAPCO had insisted on which was adopted by the Court as a consent judgment.

As at Q2 2020, BOST had settled all obligations with WAPCO. We reiterate our audit advice.

Failure To Obtain Vat Invoices for Payments – GH¢127,115.86 687.

According to Management Maison Consulting & Solution and Refinitiv are non-resident firms and due to this fact not registered with GRA for VAT functions. A request was made to Professional Auto for VAT bill and is but to be obtained. We reiterate our audit advice. Maison Consulting & Solution and Refinitv being non-residence firms, BOST (the recipient of the providers) is remitted to pay the VAT quantity for the imported providers as per Section 2(1) of the VAT Act. ‘Section 2(1c) of the VAT Act (870) state that, besides as in any other case offered on this Act, the tax shall be paid ‘within the case of an import of providers, by the recipient of the service.

Failure to Obtain Prior Approval for TSL Logistics (Ghana) Limited Contract Extensions

Management notes this Observation and spot has been taken of the suggestions and steps have been put in place to ratify this by 2022 This fall.

Repaired Tanks Not in Use

Management is conscious that it’s in the most effective curiosity of BOST to operationalise all our income incomes property as we’re working around the clock to make {that a} actuality. From a paltry 18% in 2017, we’re presently at 91%.. This advice had already been recognized. That is the rationale why the contract retention quantity has not been paid until date regardless that it turned due in October 2021. This has delayed the handing over of the challenge to BOST. The contractor was engaged on December 10, 2021 and is but to substitute the inner floating roof of tank 102. We are presently going by the contract administration processes to shut the challenge.

Management included the revamping of the outdated depot loading gantry on the Buipe depot within the scope of works for the BOST depot improve challenge which is scheduled for implementation from 2022 to 2023. A contractor has been engaged by administration to restore tanks 101 and 102 that are related by product pipelines to tank 103 on the depot. It is due to this fact not advisable to recommission tank 103 whiles sizzling works are being undertaken within the adjoining tanks therefore the choice of administration to re-operationalise the three tanks collectively after the authorised works that are scheduled for 4 months. We reiterated our audit advice.

Unused/Idle Equipment at Debre Marine Port

At the suitable time Management will implement the commentary according to availability of assets and demand. For now, Management sees these property as spares for the present operational marine property

Absence of Signed Contract Agreement and Proper Procurement Process between Bost and Service Providers

From January 2020 to August 2021, an quantity of 11,717,815.09 was requested as cost for Volta Lake Transport Company Limited (VLTC) as freight fees. Contract is predicted to be signed by 2022Q4. PPA to learn as VLTC is an SOE.

With Professional Auto Centre ltd, an quantity of 185,211.57 cost for servicing of BOST autos was requested. Ratification course of is ongoing and is predicted to be resolved by 2022 This fall.

The Annual Renewal of Persol HR software program Ratification course of is ongoing and is predicted to be resolved by 2022 This fall. The Domain Registration & Email Hosting Ratification technique of Con-media is ongoing and is predicted to be resolved by 2022 This fall

..The absence of correct procurement engagement course of and signed contract paperwork evidenced the existence of ineffective monetary management mechanisms by BOST Management for contract administration of the corporate.

. Management is taking steps to appropriate the anomaly by This fall 2022.

..Avoidable and Excessive Contract Variations

Management has already recognized this weak point and has determined to outsource the Quantity Survey course of. Management has initiated the required procurement course of to have interaction a suitably certified Quantity Surveying entity to present Bill of Quantities (Engineer estimates) for all civil works in 2022.

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