Financial indiscipline rocks MMDAs - 10-year audit reveals GH¢242.84m in irregularities

There is no end in sight concerning the irregularities and general indiscipline on the books of metropolitan, municipal and district assemblies (MMDAs) in the country.

The Daily Graphic’s 10-year assessment of the Auditor-General’s reports on the accounts of the district assemblies showed that irregularities have built up to the tune of GH¢242.84 million and are still on the rise.

For instance, 66 MMDAs employed 366 people to collect revenue within their jurisdictions in the last three years and paid them GH¢7.82 million as salaries for the period, while they collected only GH¢3.99 million.

The assemblies include Birim North, Asene/Manso/Akroso, Birim South, Akyemansa, Kwaebibirem, Fanteakwa South, Fanteakwa North, Kwahu East, Kwahu Afram Plains North, Suhum, Ayensuano, Nsawam Adoagyiri, Lower Manya, Akuapem North, Agona West, and Abuakwa South.

Others are Asunafo South Afigya, Kwabre North, Ahafo Ano South East, Atwima Nwabiagya North, Ejura-Sekyedumase, Mampong, Offinso North, Old Tafo, Berekum Dormaa Central, Berekum West and Dormaa West.

The rest are Agona West, Abuakwa South, Upper Denkyira East, Nyiaeso (Sub-Metro), Kumasi Metropolitan (Subin Sub Metro), Antwima Kwanwoma, Kwadaso, Adansi, Asokwa, Sekyere Central, Bodi, Juaboso, Sefwi Wiawso, Amenfi West, Garu, Gushegu, Kpandai and Chereponi.

The accounts of the assemblies, supposed to be managed efficiently to support the development of local communities, have been awash with degrees of internal control weaknesses and managerial ineffectiveness, amounting to significant irregularities every year.

The irregularities, which covered the period from 2014 to the latest report in 2023, were in the form of misappropriation of funds, unearned salary payments, stores, procurement, contracts, cash, payroll and taxes.

Despite efforts by the Auditor-General and other institutions to tame this financial and administrative misconduct, the desired impact has been disappointingly limited.

Fluctuating irregularities

From GH¢9.13 million in 2014, the irregularities recorded by the MMDAs each year jumped to GH¢30.79 million in 2015, before peaking at GH¢72.86 million in 2016.

With a drop to GH¢12.22 million in 2017, the anomalies on the books of the assemblies rose again to GH¢29.74 million in 2018 and fell to GH¢19.53 million in 2019.

After dropping further in 2020 to GH¢12.88 million, the irregularities, which have become an annual national problem, rose from GH¢13.49 million in 2021 to GH¢19.99 million in 2022 and ended at GH¢22.21 million in 2023.

With an average of GH¢24.28 million per year, the report said the recurring irregularities were due to the lack of commitment by chief executives, coordinating directors and finance officers to enforce the provisions of relevant legislation, administrative instructions and the absence of sanctions against officers found culpable of financial and administrative indiscipline.

Assemblies’ operations

In 2023, the country had 261 active assemblies, made up of six metropolitan areas, 107 municipalities and 148 districts across the 16 regions. Cumulatively, the assemblies generate GH¢3.30 billion in income, compared to the GH¢956.68 million reported in 2014.

The income comprised internally generated funds (IGF), quarterly allocations of the District Assemblies Common Fund (DACF), government salary grants and budgetary support to decentralised departments, as well as donor funding.
Their assets also stood at GH¢143.71 billion, while their liabilities amounted to GH¢233.86 million.

Lack of accountability

The President of the Chamber for Local Governance (ChaLoG), a civil society organisation (CSO), Dr Richard Fiadomor, blamed the recurring irregularities on the lack of accountability of the assemblies to any supervisory authority.

He explained that the persistent irregularities stemmed from the fact that assemblies were not answerable to the people they served or their respective assembly members and for that reason acted with recklessness without incurring any sanctions.

“An amendment to the Local Government Act of 1993 (Act 462) has led to presiding members no longer chairing the internal audit committees, resulting in external individuals being appointed to oversee audited expenditure, which are no longer brought to the attention of the people's representatives in the general assembly and that was the main reason why only external auditors are able to detect these irregularities,” Dr Fiadomor said.

Turning blind eye

The president of ChaLog stated that some of the internal auditors also detected the irregularities, but kept quiet to save their jobs because the chief executives had been granted the authority to instigate the transfer of any person who raised concerns about their wrongdoing.

Dr Fiadomor said the consequence of that power dynamics was that internal auditors had been forced to adopt a culture of silence, turning a blind eye to wrongdoing and ignoring the warning signs of irregularities.

That, he said, had created a permissive environment where financial mismanagement and administrative indiscipline thrived, allowing irregularities to persist unchecked and uninterrupted.

“This undermines the effectiveness of internal audit mechanisms, enabling the perpetuation of corrupt practices and eroding trust in the institutions,” Dr Fiadomor observed.

To reverse the trend, the ChaLoG president proposed the establishment of a body such as the State Interests and Governance Authority (SIGA) to supervise the assemblies and their operations.

Be responsible

A former Director of Local Government Studies, Dr Esther Ofei-Aboagye, also commenting on the issue, said assemblies must take ownership of their financial management and demonstrate a genuine interest in overseeing their financial performance to restore public trust and establish their commitment to transparency and accountability.

She said that would enable them to identify and address potential irregularities, ensuring that public resources were utilised efficiently and effectively.

Dr Ofei-Aboagye explained that assemblies should strive to adopt international best practices in governance, financial management and internal controls.

That would enable them to benchmark their performance against global standards, identify areas for improvement, and implement reforms that promoted transparency, accountability and effectiveness.

“It is essential that we establish a culture of accountability and consequences for those who engage in irregularities.

This requires that individuals found guilty of financial mismanagement or corruption face swift and severe sanctions, including prosecution, fines, both or other disciplinary actions.

“The audit committee and internal auditors play a critical role in ensuring the financial integrity and accountability of assemblies.

It is essential that these entities function effectively, with clear roles, responsibilities and independence,” Dr Ofei-Aboagye, also a local government expert, added.

Actively involved

The Assembly Member for Tataana South Electoral Area in the La Nkwantanang-Madina Municipality, Abdul-Jalil Yakubu, said assembly members, who served as representatives of the people, should be actively involved in the audit process to ensure transparency.

He said, surprisingly, the La Nkwantanang-Madina Municipal Assembly (LaNMMA) had been operating without a presiding member since the last inauguration in February 2024, which had prevented the general assembly from convening.

“As a result, LaNMMA has been making expenditures without being held accountable for the past one year, highlighting a significant gap in oversight and transparency,” Mr Yakubu said.

Govt’s stringent measures

To tackle the pervasive irregularities plaguing the assemblies' accounts, the experts recommended that the government should implement stringent measures to ensure accountability going forward.

They said the Presidency should spearhead a collaborative effort among anti-corruption agencies, including the Internal Audit Agency, Public Procurement Authority (PPA), Office of the Special Prosecutor and Audit Service, to safeguard public funds and prevent corruption.

Dr Fiadomor and Dr Ofei-Aboagye also recommended that in Parliament, the Public Accounts Committee (PAC) must collaborate closely with other committees, such as the Government Assurance Committee, to track the implementation of its recommendations and assess their impact.

“Every parliamentarian has a responsibility to their constituents to take a keen interest in the financial management of their respective assemblies, ensuring that public resources are utilised efficiently and effectively,” they posited.