The 2011 Auditor General’s report on the accounts of 117 District Assemblies, reveals that over GH¢12.1 million could not be traced, due to what the report says were internal control weaknesses and managerial ineffectiveness, leading to widespread irregularities in the financial administration of the various District and Municipal Assemblies.
Significant among the irregularities observed by the Auditor General in the accounts of the Assemblies for 2011 were misappropriation of revenue, direct disbursements from revenue collections, contract and procurement irregularities, tax irregularities, uncollected staff rent, unsubstantiated payments, unrecovered loans and advances, unretired imprests among others.
According to the report, these substantial losses were triggered by the low level of commitment shown by various accountants and Coordinating Directors towards ensuring and adherence to the provisions of the Financial Memoranda for MMDAs, 2004, the Financial Administration Regulations, 2004 and the Public Procurement Act, 2003, as well as the non-performance of the monitoring and supervisory functions of the Finance and Administration (F&A) Sub-Committees of the Assemblies.
The report also discovered that the failure of some key stakeholders at the Assemblies to exercise their monitoring and supervisory responsibilities over their subordinates to ensure compliance with relevant provisions played a part in the loss of the aforementioned amount.
The Auditor General disclosed that the misappropriation of revenue by Revenue Collectors in 25 District Assemblies cost the country GH¢210,411.66 as compared to GH¢287,299.21 observed in the accounts of 30 District Assemblies a year earlier.
Likewise, Poor supervision and ineffective internal controls at 10 Assemblies resulted in direct disbursement of GH¢158,715.06 from the total revenue collected, a practice the report says does not only contravene Part VIII Section 31 of the Financial Memoranda, but also “weakens expenditure controls, increases the risk of misappropriation, and encourages unauthorized borrowing of funds for private purposes and other cash irregularities”.
Laxity in revenue collection also saw three Assemblies in the Greater Accra and Western Regions not take any action against firms which owed them a colossal GH¢3,910,051.66 in property rates and business operating permits.
Another shocking revelation was that persons who issued dud cheques to these three assemblies were not even prosecuted as the law requires.
“In the Ledzekuku-Krowor Assembly, it was observed that the Assembly could not abrogate the contracts of three firms, which reneged on an agreement to collect property rate arrears of GH¢2,811,695.60 for the Assembly, but collected only GH¢207,816.16 or 11.8%”.
It was also identified that unearned salaries totalling GH¢346,054.31 were paid to separated staff (ghost employees) in 20 Assemblies due to delayed deletion of their names from the payroll.
Unpresented value books, unsubstantiated payments, unrecovered loans, advances, unretired imprests and unpaid rents were all forms of irregularities that contributed to the loss of the GH¢12.1 million in financial operations of the assemblies.
Assemblies in the Greater Accra region led the league table of losses with a whopping GH¢6,136,911.59 representing more than 50%; followed by Eastern region with GH¢1,358,899.98 and the Northern region with GH¢1,047,804.86.
Upper East region accounted for the least amount of losses totalling GH¢37,575.95.
To ensure that the irregularities noted are minimized, the Auditor-General Richard Q. Quartey, among other things recommended that: “desk officers for Assemblies are appointed at the ministerial level to monitor both internal and external audit reports, as well as any other internal monitoring or evaluation reports and to prepare periodic status reports on these matters for the attention of the Minister for Local Government and Rural Development (MLGRD) who would ensure prompt implementation of recommendations.
“I would also continue to urge the Minister, MLGRD to organise frequent training workshops for the staff of the District Assemblies on the applicable provisions in the regulatory framework on District Assemblies to ensure improvement in compliance with laws and other regulations governing the financial operations of the Assemblies”, he stated in the report.
