Metropolitan Municipal and District Assemblies (MMDAs) have been cited for engaging in persistent financial irregularities leading to revenue loss and failure to provide essential services and execute projects.
The irregularities, manifesting in noncompliance with cash, tax, contract and procurement regulations, are caused by administrative and procedural blunders as well as through corrupt practices.
Reverend Dr Clement Owusu Sarpong made this known when presenting a report that examined the degree of transparency and accountability in the disbursement and utilisation of the District Assemblies Common Fund (DACF) from 2009 to 2011.
The study, conducted by Send-Ghana, a non-governmental organization, found variations in the amounts allocated, disbursed and actual receipt made to the MMDA’s.
Rev Dr Sarpong said the differences emanated from statutory and non-statutory deductions made by DACF Administrator.
He said the statutory deductions included the reserve fund and mandatory expenditures incurred on behalf of Assemblies based on the formula and upon directives from the Ministry of Local Government and Rural Development.
Rev Dr Sarpong said the non-statutory deductions have taken a greater (about 35%) proportion of DACF allocations to the MMDA’s, adding “there is evidence of unsubstantiated and un-receipted deductions by the DACF Secretariat over the years.”
He said there are also instances where monies paid to individuals, companies and agencies for the provision of services to MMDAs have not been executed or properly accounted for.
Cash irregularity covered unsupported payments, failure to properly account for funds, overdue advances, misappropriation of funds, unvouchered payments, unretired imprests, unpresented payment vouchers.
Other irregularities are overpayment of mobilisation, unapproved variation, failure to tender or unapproved contract, retention irregularities and contract register irregularities.
Abandoned projects, non-utilised completed projects and Monitoring and Evaluation irregularities are also cited by the report.
There rest are withholding taxes not deducted or remitted, purchases from non-VAT registered entities and payment without VAT invoices, failure to collect property rate.
At the inception of its implementation, the DACF was 5 percent of national tax revenue allocated to MMDAs for local development projects.
The DACF is now 7.5 percent and expected to increase to 10 percent from 2014 fiscal year.
After almost two decades of the DACF, several concerns including governance issues continue to hinder its effectiveness and therefore the derivation of its full benefit.
But, the report said the level of MMDAs compliance with financial management standards is low, leading to several irregularities.