GWCL made no effort to collect GH¢11.1m long-standing debts from customers, kept supplying them water – A-G’s report

Section 10 of the GWCL revenue manual stipulates that it shall be the responsibility of the Regional Customer Care Manager/District Commercial Officer/District Marketing Officer to collect debts by establishing efficient and effective systems which shall be based on GWCL’s debt management process as provided for under section 10.1 of the revenue manual and that recovery plans must be provided for all delinquent accounts (beyond three months after billing).

Also, section 19 of the GWCL accounting manual provides that accounts receivable must reflect the amount collectible; and an account receivable should be declared as a bad debt, closed and written off when it is duplicated, untraceable, repudiated and when it is legally not possible to collect as a result of the lapse of time.

The audit team, however, said: “Our analysis of customers’ debt balances in five regions disclosed that some customers who owed GWCL a total amount of GH¢11,187,580.04 had not made any payment over a considerable period, yet they continue to enjoy water supply and no effort was made to ensure collection of these debts owed to the region”.

The report noted that the failure of the management to institute “aggressive measures” to collect the debt owed by these customers “will put a strain on the liquidity of the regions and the company at large”.

“The accounts receivable balances would have been overstated or enhanced by this seemingly uncollectible amount and this ultimately inflates the size of the balance sheet”, the report noted.

“We advised the management to collect such debts immediately and ensure that all customers who have not been making payment on their bills are subjected, fully, to the company’s policy on delinquent customers”.

Find the response of the GWCL management below:

Management said Chapter 10.1 of the GWCL’s Revenue Manual 2019, 2nd Edition states that the debt management process can be broken down into the following:

• Monitor the account

• Present a bill

• Disconnect the service

• Send demand notices

• Send final demand notices

• Reschedule debt

• Take legal action

• Write off debt

There is, therefore, a clear-cut policy for managing arrears and this is carried out through:

• Monthly revenue mobilisation and daily disconnection exercises carried out to manage receivable

• Monthly electronic demand notices (SMS through the call centre) are served on customers with overage arrears, asking them to settle their indebtedness.

The company making it easier for customers to make payments through the electronic system, i.e. telcos, banks and third-party collectors

The status of long-disconnected customers is monitored monthly through:

• Disconnection and reconnection registers in the e-billing and the manual system.

• Physical monthly visits by GWCL’s monitoring team e.g., meter readers, loss control supervisors.

All the above measures ensure that the status of long disconnected customers is reviewed appropriately.

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