Ministries, Departments and Agencies’ (MDAs) inability to produce financial statements for the Auditor-General to audit and give his opinion on is an expectation-gap that has not been filled since 2003 - when the Financial Administration Act (Act 654) was passed. Section 40 of Act 654 considers MDA’s as individual entities that are required to prepare annual accounts, consolidated for each ministry on receipts and disbursements of funds through all districts and regional offices in the country. Consequently, the Auditor-General is unable to inform parliament - a core mandated function - as to the completeness of financial information, the principles and basis of accounting adopted, the truth and fairness of MDAs’ operations, and the valuation and state of their assets and liabilities; especially as they are essentially non-profit making institutions. According to the Auditor-General, Richard Quartey, an expectation gap occurs when there are differences between what the public expects from the auditor and what the auditor actually provides. It also exists when auditors and stakeholders hold different views and beliefs or understanding about the auditors’ duties and the information carried across by audit reports. Mr. Quartey, who addressed participants at the annual accountability lectures themed “Bridging the expectations gap in the accountability process”, observed that citizens of the country want to be informed and assured by the Auditor-General that government and all public-sector agencies have acted in a manner prescribed by the various laws and regulations that make up the public financial management systems of the country. Additionally, it has to be established that monies collected on behalf of the people have been applied in the proper manner, and that programmes and activities expected to be undertaken with the funds appropriated by parliament and disbursed by the Ministry of Finance and Economic Planning and the Controller and Accountant General have indeed been used for the stated purposes, and that these funds have yielded the desired results and expected impacts. He said this expectation has only been partially fulfilled over the years, because the Audit Service has not received sufficient funding to build the capacity required to close this gap fully and meet stakeholder expectations. Mr. Quartey bemoaned the absence of sanctions for offences and breaches of financial regulations, adding: “Such apathetical attitudes encourage the perpetuation of malpractices and irregularities in the public financial management.” The Auditor-General noted that the Audit Service is a member of the International Organisation of Supreme Audit Institutions, a world-wide body of the Supreme Audit Institutions (SAI) of countries belonging to the United Nations. Consequently, the body has established international standards on independence of the auditor and the conduct of audit work of SAI which are to be observed by all member-nations. Mr. Quartey noted that some of the gaps also concern the auditor’s independence and duty of care. Citing the principles and precepts enshrined by the International Organisation of Supreme Audit Institutions in the Lima and Mexico Declarations on Independence, Mr. Quartey said principle 8 of the Mexico declaration requires that the SAI must be able manage its own budget and allocate resources appropriately; however, this expectation has not been met in the country’s public accounts. Recent sittings of the Public Accounts Committee (PAC) of Parliament laid bare the financial management weaknesses of MDA’s, revealing among others instances of fraud and abuse of procedure. Members of the PAC sought responses from officials of MDA’s on grave issues raised by the Auditor-General in his reports on the public accounts of Ghana covering the period 2007 to 2009. Issues that came up related to the violation of procedures for accessing monies from the Consolidated Fund; delays in the lodging of revenues received into the accounts of the ministries; and lack of due diligence on the part of the Internal Audit Units in pre-auditing imprest payment vouchers. In one reported instance, an official of the finance ministry was alleged to have misappropriated GH¢351,900 from the ministry’s Contingency Fund Account through forgery. The Committee heard that the official was subsequently interdicted pending determination of the matter at the Fast Track Court. Committee members are worried that these violations and improprieties allow room for malfeasance and loss of revenue to the state. Various studies into public financial management in Ghana have revealed grave weaknesses in the internal control systems of MDAs. Among the problems that have persistently come up are included failure to follow laid-down procedures, poor record-keeping practices, and blatant fraud perpetrated by some public officials. Albert Kan Dapaah, the Committee’s chairman, noted that it is important to follow up audit queries with the appropriate sanctions against culpable officials, especially in the extreme cases of fraud, forgery and other financial crimes.