AESL Owed! …Due To Lack Of Contractual Agreement With Clients

The absence of contractual agreements with project clients has led to the accumulation of debt over the years, the Managing Director of the Architectural and Engineering Services Limited (AESL), Mr Isaac Adjei Marfo, has conceded.

To this end, he said the AESL had put in place measures to remedy the situation and also recover debt owed it for services it had rendered.

“We have put in pragmatic efforts to retrieve all outstanding debts. The debt collection unit or the claims department has been moved to the Ministry of Finance for effective management. We have ensured that the department is well resourced to carry out its activities effectively,” Mr Marfo added.

Appearing before the Public Accounts Committee (PAC) of Parliament in Accra on Monday, Mr Marfo said currently, the AESL signed project-specific contract with all clients before undertaking any work.

 The 2021 Auditor General’s report cited the AESL for keeping a huge debt portfolio and blamed the management for failing to put in place a clear debt recovery mechanism, resulting in the long-standing debt.

The lack of debt recovery mechanism, it said, had led to the company’s inability to retrieve growing debts owed by the government agencies, especially the Ministry of Education.

“Our review of client’s indebtedness showed an outstanding of GH¢ 22,035,533 as at December 31, 2020. The Ministry of Education’s indebtedness makes up 77 per cent or GH¢16,982,845 of the total indebtedness at the end of the year.

“Management’s inability to put in place a clear debt recovery mechanism resulted in this long-standing debt. This has resulted in the company’s inability to retrieve growing debts owed by the government agencies especially the Ministry of Education,” the report added.

He explained that the project contract would be used as evidential document to pursue the payment of fees for work done.

He said the company had also restructured its debt recovery unit under the Director of Finance to make the unit more effective in retrieving debts.

Mr Marfo said AESL had recovered GH¢6.6 million out of the GH¢22 million owed it for projects done in 2019 and 2020.

Of the total amount retrieved, the Ministry of Education which owes about GH¢17 million, representing 77 per cent of the debt, had paid GH¢4.4 million.

The remaining GH¢2.2 million was paid by other clients whose identities were not disclosed in the 2021 Auditor General’s report.

Times