The latest audit report on Metropolitan, Municipal and District Assemblies (MMDAs) has revealed that irregularities in the management of the District Assembly Common Fund (DACF) amounted to GHS396.62 million from 2016 to 2020.

According to the Auditor General’s report, these irregularities are in violation of laws and guidelines to ensure effective and efficient management of resources.

Based on the findings, total cash irregularities for the periods under consideration amounted to GHS143.65 million with the largest of these cash irregularities reported in 2018 (GHS47,139,747.82) and GHS23.51 million as cash irregularities in 2020 incurred by 179 District Assemblies.

With regards to contract irregularities, the report indicated that GHS256.36 million was the total amount representing irregularities for the series. For 2020, contract irregularities captured in the report totaled GHS45.69 million among 107 District Assemblies.

More so, procurement or store irregularities totaled GHS31.97 million for the series with such irregularities for 2020 amounting to GHS7.72 million. Also, tax irregularities (taxes deducted but not remitted to GRA and VAT payment not paid to prescribed VAT invoices) amounted to GHS1.48 million throughout these five years.

Particular to contract irregularities, the report finds that:

“…the Assemblies awarded fresh projects when earlier ones had not been completed leading to suspension of work because of non-payment of works certificates.

“In other instances, the Assemblies had completed projects that were not put to use as a result of non-availability of water and electricity connection, defects and lack of furnishing or siting of projects beyond easy access of the communities.

“We further noted that payments were made for unexecuted contracts, unjustified contingencies and shoddy works.”

Shortfalls in DACF Allocation by Ministry of Finance

Consequently, the report notes that the DACF allocations, in compliance with section 129(b) of the Local Governance Act, 2016 (Act 936) were followed through; Of which a total amount of GHS510 million was earmarked for the 260 Assemblies with onward deductions of GHS128.81 million at source for service providers. Thus, MMDAs received net inflows of GHS381.19 million or 74.74 per cent.

According to the report, the management of two Assemblies failed to allocate the required two per cent of GHS68,075.07 on the Assemblies’ share of DACF allocations received in 2020 for the activities of sub-District structures.

For instance, it was reported that the management of Asutifi South District Assembly misapplied funds meant for People Living with Disabilities (PLWDs) totaling GHS20,000.00 on various administrative expenses. An amount of GHS18,000.00 was transferred into IGF account whilst GHS2,000.00 was transferred into the DACF account.

Also, Article 252(2) of the 1992 Constitution mandates Parliament to annually make provision for the allocation of not less than five per cent of the total revenues of Ghana to the District Assemblies for development.

However, the Minister of Finance released a total amount of GHS1.98 billion or 3.79 per cent of Total National Revenue to the Administrator as Common Fund for 2019 as against GHS2.62 billion resulting in a shortfall of GHS634.62 million.

Similar shortfalls occurred in 2018 where the Minister of Finance released GHS1.58 billion or 4.07 per cent instead of GHS1.94 billion resulting in a shortfall of GHS361.53 million.

Undoubtedly, the DACF is a major source of revenue allocated to MMDAs for various developmental projects since the internally generated funds (IGFs) remain practically low. Whether these gross anomalies will become a thing of the past leaves much to be desired.

Thus, robust systems must be put in place to rigorously check in real time the use of these funds in order to protect the public purse and at the same time ensure that they are used for their intended purposes.