Ghc30m SSNIT money missing?


Speculations are rife within the corridors of
SIMNET that the Ghc30million paid by the
National Lotteries Authority (NLA) at the
instance of a Court has neither reflected in the
accounts of the ICT firm nor its parent
company, the Social Security and National
Insurance Trust (SSNIT).
The above-mentioned amount with interest
was advanced to the ICT firm for delayed
payment of invoices. Lawyers for SIMNET led
by Mr. Tony Lithur are currently in court
pursuing the NLA for US$45million as
damages for breach of contract between the
two entities.
The suspicion was occasioned by the
influential personalities behind SIMNET using
their political connections to maneuver their
way through. A former Board Chairman of the
NLA, Dr. Sali Agbozo, in an interview with Citi
Eyewitness News last week over the matter
said the management of the NLA might have
been intimidated by SIMNET because of the
political personalities behind the firm.
Dr. Agbozo insisted that the SIMNET contract
was never terminated and wondered why the
ICT firm was in court again pursuing the NLA
for additional $45million having already won
GH¢30 million with interest from the lottery
regulator.
He explained that when he took over in 2009,
they were supposed to complete an
automation of the lottery system with the aim
of halting the lapses in the system.
He said: “before we got there, there has been
various correspondences between NLA and
SIMNET to bring more portable point of sale
terminals for the lotto business,” adding that
“NLA before our tenure had already gone to
PPA to secure approval for the purchase of
2,000 point of sale terminals for the lotto
business.”
He said they later increased the number of
terminals to 10,000 “because we need to cover
the whole country. We actually corresponded
with them [SIMNET] on several occasions to
bring in more terminals, and we informed them
that we were ready to go and purchase
terminals…we didn’t hear from them so we
acted as such.”
He said even after securing the terminals, they
wrote a letter to SIMNET informing them of the
move “and for that matter, we assured them
that we will run our business whereby they will
operate their equipment and the NLA too will
handle their own business, so we never
terminated any contract with them.”
“What happened was that they were unhappy,
so they were using various means to frustrate
us,” he was quoted as saying by Citi
Eyewitness News. He added: “because they
owed SIMNET, they issued post-dated
cheques, which SIMNET was cashing”.
He said his outfit later told SIMNET to submit
an IT audit report, but the situation ended up
in court, adding that, “when we requested the
audit, they refused to comply and before we
realized they took us to court,” he lamented
adding, “we told the court that if they do the
audit we will pay them.”
According to our sources, sometime in 2011,
the Board of NLA, in keeping with best
practices, called for an audit of the SIMNET
process in order to ascertain that all was well
with the SIMNET infrastructure and that,
Ghana was not losing revenue.
This request was informed by a data analysis
performed by Ernst and Young on existing
sampled lottery data, which raised some
fundamental concerns, including training
machines, trading and paying wins and other
issues.
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However, SIMNET was said to have refused to
co-operate with the audit process as they
cited witch-hunting, among other concerns.
The Board of NLA, as a result, decided to
withhold payments from SIMNET in view of
SIMNET’s refusal to co-operate with the audit
process, which development led to a
significant bad-blood developing between
SIMNET and the NLA Board, which forced
SIMNET to proceed to court to seek redress.
Sources within SSNIT and NLA said both
parties agreed in court to recruit an
independent firm (a firm other than Ernst &
Young) to undertake the audit exercise, which
finally led to the granting of SIMNET’s request
of some payment of its overdue invoices to be
made by the NLA to enable them meet some
operational commitments, which this paper
learnt, was honoured by the NLA.
Our information is that, whilst the court
proceedings and the audit process continued,
SIMNET unilaterally shut down the lottery
system in the first week of October 2012,
informing first NLA via SMS followed by a
letter.
The Chronicle is well informed that this was
done to embarrass the NLA leadership and to
create a crisis situation for the NLA as the
INGENICO program was not yet fully
implemented to serve as a viable alternative, a
development which made the NLA’s revenue
suffering a dent.
The dip in revenue was short-lived, according
to inside sources, because the Board had
earlier initiated the implementation of the
LOTS-Services platform, which brought the
needed extra capacity to absorb the displaced
retailers from the SIMNET platform.
It would be recalled that, Dr. Agbodzo, Board
Chairman at the time, addressed a press
conference to explain and to apologize for the
disturbances in the services that were
occasioned by the shutdown and announced
that, the NLA would find alternative solutions
to the situation in the absence of SIMNET
platform.
Judgment on the lawsuit was not delivered
before the appointment of a new Board by
President John Dramani Mahama, when he
took over the Presidency.
As the matter progressed in Court, both
parties, the NLA and SIMNET, agreed on the
appointment of Price Waterhouse, as another
expert, to conduct another independent audit
following disagreements on some aspects of
the work done by KPMG.
Price Waterhouse was said to have extracted
data from the system to do their work and
after the completion of the first draft, SIMNET
protested that additional data was available
that needed to be taken into account and
requested another extraction of data by Price
Water House.
The Chronicle is informed that after this
second extraction, SIMNET became satisfied
and the final report submitted by Price Water
House favored SIMNET, while the judge ruled
that, the delayed invoices be paid with interest
and the NLA was believed to have paid this
amount to SIMNET estimated at thirty million
Ghana Cedis (GHc 30 million).
Included in this amount, this paper learnt, is
another two million Ghana Cedis (GHc 2
million) paid to SIMNET as the legal fees for
their lawyers.

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