National Practical Training Institute (NPTI) was established in 2009 as a sub-vented Organization to give practical vocational training to selected University graduates.

Dr. Akwasi Awuah was appointed as the Chief Executive Officer (CEO) five years ago and reports to seven member board of Directors. Since his appointment he has dominated the Institute and was instrumental in appointing some of the current board of Directors some of them are his friends and associate. This was instrumental in the development of a lack of accountability by senior management members to the board and lack of independence within the board. Therefore, there was no independent assessment of performance even while the financial results deteriorated. As a dominant CEO, Awuah had no clearly limits in areas such as procurement and promotion of staff.

The institute outsourced most of its supporting service to the private sector. The CEO has ensured that all of these services are outsourced to companies owned by his close friends and relatives. In some cases, the services are outsourced to Companies in which the board chairman has significance interest. Unfortunately the board did not grasp the concept of conflicts of interest and its critical importance of in corporate governance. Some board members remained present even when their private interests were at issue in a way that might come into conflict with the interest of the institute. Related party transactions were entered into by almost all the directors and the CEO where they failed to declare their interest in the transactions because they considered it to be well known.

The board Chairman who is a close party friend of the CEO has clearly failed in a number of ways to carry out his role properly. The chair has general responsibility to oversee the functioning of the board, for the efficient organization and efficient and conduct of the boards function and to ensure that all appropriate matters are raised for discussion. Agenda items for board meetings are entirely involved matters brought forward by the CEO. The board chairman had no major involvement in the process of determining the information which went to the board. In effect, the Chairman has consistently failed to ensure that all important matters were put on the agenda and it was not controlled by management. The board meets fewer times that required by the Act that established the institute.

Remuneration reviews of management members are determine by the boards human resources committee of the board which meets annually. The terms of reference of the committee empowers it to review the remuneration of various officers and senior employees of the institute. In fact, all decisions about remuneration and performance were made by Mr. Awuah who, although not a member of the committee, attends all meetings by invitation.

It is the duty of the board to ensure that accounting reports prepared by the Institute were derived from systems that can produce accurate accounts. Accounts are normally submitted to the board very late contrary to the laid provision in the Institute Act. Though annual budget are prepared by management and submitted to the board, periodic variance analysis are not prepared for the attention of the board. Budgetary control as a strategic planning has therefor been ineffective in the institute. A recent special audit by the Auditor General revealed that the institute has consistently window dressed its accounts to disguise its poor underlying performance.

The Institute has an audit committee which is properly constituted in accordance with section 87 of the Public financial management ACT, 2016, Act 921. Mr. Awuah has a good relationship with all the committee members resulting from fat allowances and kind treatment he offers them especially the Chairman who is his classmate at the University. In view of this the committee has failed to pursue the implementation of annual recommendations by the internal auditor of the Institute.

Investigations has also revealed that the institute has not been able to meet information disclosure requirements due to the policy of the CEO to operate on the blind side of the public in order to reduce visibility and nose-poking behaviors of the media.

REQUIRED.

a). Identify and Discuss Symptoms of defective corporate governance that can be identified in National Practical Training Institute (NPTI). 20 marks

b). Discuss SIX Principles of corporate governance that will ensure effective accountability and value for money in National Practical Training Institute (NPTI). 20 marks