Yaw Appiah Lartey: Urges SIGA Reporting Distinction for Ghana SOEs

• Lawyer Yaw Appiah Lartey advocates for the State Interests and Governance Authority (SIGA) to distinguish between commercial and public service entities in its performance reporting.
• He argues that combining these entities distorts financial assessments, citing the Ghana Education Trust Fund (GETFund) as an example where parliamentary allocations, not commercial profitability, drive revenue.
• Lartey proposed separate reporting categories for profit-making organizations and public service institutions to ensure accurate evaluation.
• He commended SIGA for increasing audited financial statement submissions from 53 to 108 entities, indicating improved corporate governance.
• However, Lartey stressed that full corporate governance compliance requires more than just submitting financial statements, including holding Annual General Meetings (AGMs).

By clearly separating commercial performance from public service delivery, stakeholders can gain a more accurate understanding of how each type of entity is fulfilling its mandate.

Yaw Appiah Lartey, a prominent lawyer and partner at Deloitte, has called upon the State Interests and Governance Authority (SIGA) to implement a clear distinction in its reporting methodology for state-owned entities (SOEs) in Ghana. Speaking on JoyNews’ Newsfile on Saturday, September 5, Mr. Lartey argued that the current practice of consolidating commercial enterprises with public service institutions distorts the true picture of their financial performance and operational effectiveness. This proposed change aims to refine the Ghana state-owned entities performance assessment framework.

According to Mr. Lartey, approximately 90% of the entities currently covered by SIGA's reports are engaged in commercial activities, while the remaining 10% function as public service institutions or special-purpose vehicles. He emphasized that commercial entities should primarily be evaluated based on their profitability and operational efficiency. In contrast, public service institutions ought to be assessed on their success in delivering their mandated services, rather than on financial metrics typically applied to profit-driven businesses. This differentiation is crucial for accurate commercial vs public service SOE reporting Ghana.

Mr. Lartey highlighted that the aggregation of these disparate entities leads to "misreported" outcomes, obscuring genuine performance. He illustrated this point using the Ghana Education Trust Fund (GETFund) as a prime example. He noted that roughly 99% of GETFund’s revenue originates from parliamentary allocations, meaning its reported financial position largely reflects government funding rather than commercial viability or profitability. Merging such an entity with a profit-making enterprise, he contended, inevitably leads to a problematic and inaccurate assessment.

While advocating for these reporting distinctions, Mr. Lartey also commended SIGA and the government for significant improvements in the submission of audited financial statements by SOEs. He pointed out that the number of entities providing audited accounts had notably increased from 53 in the preceding reporting cycle to 108 in the most recent period, signaling an enhanced corporate governance framework. This positive trend indicates progress in adherence to Ghana corporate governance requirements SOEs.

However, Mr. Lartey cautioned that the mere submission of audited financial statements does not equate to full compliance with comprehensive corporate governance requirements. He underscored the necessity for these financial statements to undergo proper governance processes, including the holding of Annual General Meetings (AGMs). Without such crucial steps, he argued, an entity does not meet the overall corporate governance standards, irrespective of its financial reporting submission.

The proposed Yaw Appiah Lartey SIGA reporting distinction is vital for fostering greater accountability and transparency within Ghana's state-owned sector. By clearly separating commercial performance from public service delivery, stakeholders can gain a more accurate understanding of how each type of entity is fulfilling its mandate. This clarity is essential for effective oversight, resource allocation, and strategic planning.

Furthermore, Mr. Lartey's emphasis on comprehensive corporate governance, extending beyond just financial reporting to include processes like AGMs, reinforces the need for SOEs to adopt robust internal controls and transparent decision-making structures. Adherence to these broader Ghana corporate governance requirements SOEs is critical not only for compliance but also for building public trust and ensuring the long-term sustainability and effectiveness of these vital national assets.

Lawyers advising Ghanaian State-Owned Entities (SOEs) should monitor potential changes in SIGA's reporting methodology, particularly the proposed distinction between commercial and public service entities, as this could impact performance assessments and compliance requirements. Furthermore, they must ensure SOE clients adhere to all corporate governance requirements, including holding Annual General Meetings (AGMs), beyond merely submitting financial statements, to avoid non-compliance and ensure accurate representation of financial health.

Source: Original reporting via Emma Ankrah