How a District Assembly’s debt of GH₵ 89,000 ballooned to GH₵ 1 million in “avoidable” judgement debt

The Ada East District Assembly will have to cough out more than GH₵1.1 million to pay for a street light project that was originally contracted at a cost of GH₵89,000 in 2016.

This is because, the assembly snubbed CELS-PA Ventures, the company that executed the project for two years after the Akufo-Addo-led administration assumed office in 2017.

This forced the Managing Director of the company, Isaac Akplehey, to go to court in March 2019 to demand payment for lighting up the streets of Ada in the Greater Accra Region.

An Accra High Court, which gave its verdict in February 2022, ordered the assembly to pay the GH₵89,000 debt at the prevailing interest rate valued at GH₵289,823, bringing the liability to almost GH₵ 400,000.

Despite the court’s decision, the district assembly failed to comply. Frustrated by the assembly’s posture, the contractor sought another court intervention to facilitate payment of his locked-up funds. The court granted a garnishee order to have the assembly’s bank accounts emptied to pay the contractor.

When the Assembly’s bankers appeared in court on August 31, 2022, they told the court that the Assembly’s only account with sufficient funds was its Persons With Disabilities’ (PWDs’) account.

The court considered it immoral to use the PWDs’ funds to defray the debt and reached a compromise with the parties. The Assembly had about GH₵ 370,000 in another account. The court ordered that GH₵ 200,000 from that account should be used to defray  part of the debt with the balance paid later.

The Ada East District Assembly was unhappy with the judgment and sought a stay of execution at the High Court.

However, Justice Eric Baah of the Court of Appeal, sitting as an additional High Court judge, dismissed the case on August 16, 2022, describing the Assembly’s actions as “wasteful litigation.”

The Assembly filed another stay of execution within two weeks, which was also dismissed.

With no other room for another legal manoeuvre, and with The Fourth Estate’s reportage on the issue causing disaffection for the assembly in the area, it paid the GH₵ 200,000 to the company.

However, weeks later, the assembly filed an appeal, seeking to overturn the High Court decision and also to recover the amount paid to the company. It also wanted the court to declare that the company has no contract with the Assembly.

While the Assembly engages in litigation, the debt has grown to GH₵1,150,629.50 by December 2024.

Data The Fourth Estate obtained through a Right to Information (RTI) request from the Ada East Assembly, paints a hanging by a thread situation for the Assembly.

Debt vs IGF

The Fourth Estate has compared the Assembly’s Internally Generated Fund (IGF) and its District Assemblies Common Fund (DACF) revenue to its accumulating judgement debt.

The IGF in the years 2017, and 2019 were insufficient to cover the debt.

The highest IGF amount the Assembly recorded in a year within seven years was GHS1,396,156.05. This was in 2022, indicating that it would take a year and/or more for the Assembly to use its IGF to offset the debt.

Source: Ada East District Assembly

The story is no different regarding the Assembly’s actual disbursement from its District Assembly’s Common Fund (DACF) from 2017-2022. It will take the Assembly a year of its DACF to pay the company.

Source: Ada East District Assembly

Serious questions

Meanwhile, the outgone DCE, Sarah Dugbakie Pobee, declined to speak to The Fourth Estate, indicating the matter was in court.

For Good Governance Crusader and Private Legal Practitioner, Martin Kpebu, the situation raises “serious questions” about the “management of public funds”.

He expressed concern over the country’s ability to address the issue before it spirals out of control, noting the severe implications of administrative negligence and legal non-compliance.

He stressed the need for immediate measures to ensure the payment of the debt to prevent further accumulation.

Mr Kpebu suggested that the plaintiff (CELS-PA) petitions the presidency and parliament to draw the attention of higher authorities to compel the Assembly to act, to prevent it from financial collapse.

“We can’t sit down and allow this to happen in the name of pursuing an appeal. As lawyers, we don’t even do this,” he added, emphasizing the urgency of the situation and the need for accountability in managing public funds.

Assembly Members of the Ada East District Assembly have expressed frustration over the Assembly’s failure to settle outstanding payments to the contractor for his work.

They called on the management of the Assembly to expedite the payment process, stressing that the delay is both unfair and damaging.

“The Assembly must pay the man because he has done the work,” said Eric Tetteh Otumfour, the Assembly Member for Ocanseykope Electoral Area.

Mr. Otumfour, who has served as an Assembly Member for over seven years, described the Assembly’s handling of the contractor as a “disgraceful and wasteful exercise.”

Despite the Assembly’s ongoing litigation on the matter since 2019, Mr Otumfour revealed that the legal battle had largely been kept from the Assembly members.

“Until The Fourth Estate brought attention to the issue, we were not even aware of it. Personally, it is disgraceful and unfair to treat the man this way.”

He also called on the courts to exercise their authority to ensure that justice is served and the contractor, Mr. Akplehey, is duly paid.