Public Entities Face Scrutiny: Controller General Mandates Approval for Bank Account Openings
The Controller and Accountant-General’s Department (CAGD) has issued a stringent directive mandating all public sector entities to secure prior written approval before establishing any bank accounts, whether with the Bank of Ghana or commercial financial institutions. This decisive action stems from significant concerns within the Department regarding the unauthorised opening of accounts by various covered entities, a practice that has been identified as a breach of established financial regulations.
This directive underscores the critical importance of adherence to the Public Financial Management Act, 2016 (Act 921). Specifically, Section 51(1) of the Act vests the Controller and Accountant-General with the exclusive authority to sanction the opening of bank accounts for covered entities. The CAGD’s communication serves as a firm reminder to all affected institutions of this statutory requirement, emphasising that written approval is a prerequisite for any new account establishment.
The implications for non-compliance are severe. The CAGD has explicitly warned that any bank accounts opened without the requisite authorisation will be summarily closed. Furthermore, all funds held within such unauthorised accounts will be forfeited and transferred directly into the Consolidated Fund. This measure highlights the Department’s commitment to ensuring the integrity and accountability of public finances.
Beyond account closure and fund repatriation, the CAGD has also signalled that entities failing to comply with this directive may be subject to further sanctions. These penalties could be imposed under the Public Financial Management Act itself, as well as other pertinent laws and regulatory frameworks governing public financial management.
The CAGD’s call for strict compliance is aimed at fostering robust management and accountability mechanisms for public funds. For lawyers, compliance officers, general counsel, and corporate executives overseeing public entities, this directive necessitates an immediate review of existing banking arrangements and a rigorous adherence to the approval process for any future account openings. Investors and business leaders engaging with the public sector should also be aware of these enhanced regulatory controls, which signal a heightened focus on financial probity.
