The Controller and Accountant-General’s Department (CAGD) has directed all covered entities to obtain prior written approval from the Controller and Accountant-General before opening bank accounts with the Bank of Ghana or any commercial bank.

According to a press statement issued on August 17, the directive follows concerns that some covered entities have been opening bank accounts with commercial banks without first obtaining the required authorisation, a practice the Department says contravenes Ghana’s public financial management laws.

The CAGD said the unauthorised opening of bank accounts infringes Section 51(1) of the Public Financial Management Act, 2016 (Act 921).

The provision, according to the Department, gives the Controller and Accountant-General the sole authority to approve the opening of bank accounts for covered entities.

Under the directive, covered entities are required to obtain written approval from the Controller and Accountant-General before opening an account with either the Bank of Ghana or a commercial bank.

The Department stressed that the requirement applies to the opening of bank accounts and is not optional for entities covered by the public financial management framework.

The directive means that a covered entity cannot independently establish a new bank account with a commercial bank without first securing the requisite written authorisation from the Controller and Accountant-General.

The CAGD said the requirement is grounded in Section 51(1) of Act 921, which places responsibility for approving the opening of bank accounts for covered entities with the Controller and Accountant-General.

The Department's position is that bypassing this approval process constitutes a breach of the law and undermines the established controls governing public funds.

The CAGD has warned that failure to comply with the directive will have direct financial consequences for entities that open bank accounts without the required approval.

According to the Department, any bank account found to have been opened without the requisite authorisation will be closed.

More significantly, all funds held in such unauthorised accounts will be transferred into the Consolidated Fund.

The directive also signals a stricter approach towards accounts that operate outside the approval framework established under the Public Financial Management Act.

Beyond the closure of unauthorised accounts and transfer of funds, the CAGD said it would enforce appropriate sanctions against covered entities that fail to comply.

The Department said such sanctions would be applied in accordance with the provisions of the Public Financial Management Act and other applicable laws and regulations.

The CAGD has consequently directed all covered entities to take steps to ensure full compliance with Section 51(1) of Act 921.

The Department has also emphasised that existing accounts opened without the required approval are subject to action, including closure and the transfer of funds into the Consolidated Fund.

The Controller and Accountant-General’s Department said it was counting on the cooperation of all covered entities to ensure adherence to the directive and compliance with the relevant provisions of Ghana’s public financial management framework.