This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 02 ACCRA 002409 
 
SIPDIS 
 
TREASURY FOR OASIA/MDM J. FRANCO 
EB/IFD/OMA L. GALLAGHER 
AF/W FOR LAWRENCE JOHNSTON 
 
E.O. 12958: N/A 
TAGS: EAID EFIN
SUBJECT: GHANA: TRANSPARENCY OF BUDGETS/MILITARY SPENDING 
 
REF: STATE 239929 
 
The following responds to reftel request for a report 
indicating whether Ghana meets the standards set out in U.S. 
Transparency of Budgets legislation.  Post obtained this 
information primarily from officials from the Office of the 
Auditor General.  Answers provided below correspond with 
questions posed reftel. 
 
¶A. General Overview 
------------------- 
¶1. Are military expenditures audited? 
 
Deputy Auditor General Kwadwo Akowuah informs post that Ghana 
audits military expenditures, and has done so since 1996. 
For a long time the Ghana Armed Forces (GAF) and the Office 
of National Security resisted submitting to an audit of 
ammunition and aircraft, citing confidentiality and national 
security reasons. However, in 2004, Parliament asserted its 
constitutional authority and directed the Auditor General to 
conduct the ammunition/aircraft audit.  The Auditor General's 
office is currently preparing to conduct this audit. 
 
¶2. By whom are military expenditures audited? 
 
The Auditor-General's representative located at the Ministry 
of Defense audits the military expenditures on a routine 
basis. 
 
¶3. To whom are the audits reported? 
 
The Auditor General's representative at the Ministry of 
Defense prepares an annual report, which is reported to Unit 
Commanders, the Chief Director of the Ministry of Defense, 
Chief of Defense Staff, and the Minister of Defense.  It also 
goes to the Auditor General.  The Auditor-General submits 
annual audit reports on all Ministries, Departments, and 
Agencies, including the Ministry of Defense, to Parliament. 
(Note:  although it does not appear that either Parliament or 
the Auditor General publishes the annual audit for the 
public, portions of it usually show up in the national media 
and it is not difficult to obtains copies.  End Note) 
 
¶4. Are any of the people who receive the audits civilian 
authorities? 
 
Yes.  The Minister of Defense and Parliamentarians are 
civilian authorities.  Also, the Auditor General's annual 
report is provided to all Ministers on the Cabinet and to the 
President -- all civilians.  The auditors are also all 
civilians. 
 
¶5. Is there an existing framework for conducting annual 
audits of military expenditures? 
 
Yes.  The Auditor-General's representative, who is 
permanently stationed at the Ministry of Defense, audits the 
expenditures on a routine basis. 
 
¶6. Is there legislation or an instituted government policy 
that requires annual audits of receipts that fund the 
military? 
 
Article 187 of Ghana's Constitution as well as the Audit 
Service Act of 2000 (Act 584) provide the legal backing for 
the auditing of all public accounts, including military 
expenditures.  The Auditor-General submits its reports to 
Parliament, which then debates and, when necessary, appoints 
a committee to deal with issues arising out of the report. 
 
Prior to 1996, the GAF and national security authorities 
would not acquiesce to audits of military and security 
expenditures.  However, Parliament asserted its 
Constitutional authority and demanded the audits be allowed. 
Since 1996, the GAF and national security authorities have 
become more receptive to audits, and prescreened certain 
employees of the Auditor-General's Department to allow them 
to audit military spending.  Although access was limited to 
non-ammunition spending until 2004, the Auditor-General, 
through Parliamentary action, now has unlimited access to 
audit all military operations. 
 
Annual audit reports to Parliament were in arrears of 2-3 
years because the Audit Service lacked resources to conduct 
the audits.  The Audit Service mapped out a strategy to 
complete all backlogs, and is currently auditing the 2003 
budget. 
 
(Note:  Deficiencies do not appear to be intentional, rather 
are due to lack of resources and capacity constraints, and 
are not limited to the GAF audits.  Recent improvements are 
in part due to Parliamentary pressure.  Parliament is 
exercising more authority than in the past and is pressing 
the Auditor General to improve quality and speed up audits. 
End Note) 
 
¶B. Military Budget, On-budget/Off-budget Revenues and Expenses 
--------------------------------------------- ----------------- 
1) Does the country's budget include the armed forces and 
security forces? 
 
Yes. 
 
2) To post's knowledge are there significant off-budget 
military receipts?  Are they audited? 
 
Significant off-budget expenses are incurred on GAF's 
participation in international (mostly UN) peacekeeping 
operations, but the Auditor-General's Department could not 
provide figures.  However, the Audit Service recently 
conducted audits for the first time on some of Ghana's UN 
peacekeeping operations. 
 
¶C. The Military Component of the National Budget 
--------------------------------------------- 
 
1) Are productive development objectives prioritized over 
unproductive (e.g. military) objectives? 
 
Yes.  (Note:  Military spending is relatively minor in Ghana. 
 It makes up less than one percent of GDP and about 2.8 
percent of the budget.  (Note:  the combined budget for GAF 
and Office of National Security comprises 1.1 percent of GDP 
and 3.8 percent of the total budget.  End Note)  Ghana is 
under tough spending restrictions under its agreements with 
the IMF and World Bank.  Poverty-related spending is a much 
higher priority than military spending, and the IMF and World 
Bank (and other donors) monitor Ghana's budget carefully to 
ensure there is no unapproved transfers to the military 
budget.  End Note) 
 
2) Is there a mechanism for debate over budget priorities, 
such as through legislative assembly (e.g. Parliament)? 
 
Yes.  Parliament debates and approves the annual budget every 
spring.  In 2004, the budget for national security (including 
the GAF) was thoroughly reviewed and discussed when the 
minority party in Parliament was suspicious that the 
government (and majority party) might divert the budget 
increases allocated for 2004 to campaign activities.  (Note: 
Presidential and Parliamentary elections took place December 
7, 2004.  End Note) 
LANIER