Deficiencies in the operations of metropolitan, municipal and district assemblies (MMDAs) created avenues for some officials of the assemblies to mismanage funds and resources valued at approximately GH¢ 70.1 million, the 2016 Auditor-General’s Report on the assemblies has revealed.
The amount shows a 32 per cent (almost GH¢17 million) increase in the 2015 financial irregularities of the assemblies that the Auditor-General’s Report pegged at almost GH¢53.2million.
According to the 2016 Auditor-General’s Report titled: “Management and Utilisation of District Assemblies’ Common Fund and other Statutory Funds” for 2016, the management and members of staff of assemblies continued to violate measures put in place to safeguard the public purse.
“Management and staff of the assemblies continued to violate rules and regulations, policies, procedures and directives which had been put in place to ensure the economic, effective and efficient management of public resources made available to MMDAs,” the report, signed by the Auditor-General, Mr Daniel Y. Domelevo, said.
In what has become a ritual of malfeasance sent to Parliament by the Auditor-General annually with little to show in the form of punitive actions against offenders, the report laid the blame at the doorstep of the Ministry of Local Government and Rural Development and management of the various assemblies.
“The state of affairs in the management of resources by MMDAs again did show the lack of interest and dedication to duties and responsibilities, as well as commitment on the part of the Ministry of Local Government and Rural Development and management of MMDAs in the implementation and enforcement of my audit recommendations towards mitigating infringements of the laws.
“I also attributed the situation to the non-imposition of sanctions to minimise the violations. I reiterate that effective supervision, monitoring and enforcement of existing statutory and regulatory frameworks, together with imposition of sanctions should be made paramount to curb the infractions.
“I once again employ the Ministry of Local Government and Rural Development and management of the MMDAs to impose sanctions where necessary to serve as a deterrent to others,” the report said.
The 2016 Report was released yesterday on the heels of a recent announcement by the Auditor-General that the properties of even dead people who received or took funds from the public purse wrongly would not be spared, as it begins surcharging persons and organisations implicated in the annual Auditor-General’s reports.
Eleven people have so far been surcharged for their involvement in financial irregularities that drain the state’s coffers.
According to the report, the violations persisted in spite of the Audit Service’s recommendations with regard to compliance with the financial regulations and other existing public financial management laws.
It observed that the “management letters on the interim and final audits which formed the basis of this report, revealed recurring internal control weaknesses and lapses under our key audit areas of cash management, contract administration, procurement and stores management and tax administration all of which are highlighted in this report.”
Cash irregularities totalling GH¢32,684,459.20 was recorded by the 216 assemblies.
Under this category, 93 assemblies were involved in unsupported payments worth a little over GH¢21 million; 18 assemblies recorded unretired imprest of GH¢ 540,301; 12 misapplied funds worth GH¢1.5 million; 13 could not account for GH¢543,294; 11 could not present payment vouchers valued at a little over GH¢1.4 million; one assembly disbursed GH¢305,037 of a Member of Parliament’s (MPs) share of the common fund without the legislator’s approval and another paid GH¢ 626,655 without expenditure warrant.
According to the report, a total amount of GH¢26,839,675.97 was noted as contract irregularities from the audits.
Out of the amount, 11 assemblies spent GH¢ 7,030,573 on abandoned projects; completed projects not in use cost 12 assemblies GH¢3,726,675; delayed/unexecuted/ poorly executed projects cost GH¢ 9,224,876; 18 assemblies spent a little over GH¢1.5 million on maintenance and repairs without works orders; four assemblies made GH¢352,475 in the overpayment of contract sum, while four assemblies paid GH¢308,247 without monitoring reports.
Three other assemblies paid a little over GH¢1million for projects that were not in their annual action plan; two assemblies spent GH¢1 million on contracts in which there was no submission of contract documents or no contract agreement, while two assemblies paid GH¢150,776.90 for non-existing projects.
The report also stated that during the year, procurement and stores irregularity amounted to GH¢10,341,200.67.
It showed that 24 assemblies paid more than GH¢2.6 million on what the report described as uncompetitive procurement; 36 of them spent almost GH¢3million on purchases from non-VAT registered entities; 16 spent GH¢1,093,947.98 on unaccounted fuel; seven failed to account for more than GH¢1 million worth of items distributed, while two paid GH¢480,000 for single-sourced contracts not executed.
Tax irregularities with a total value of GH¢308,310.13 were identified in some assemblies, the report said.
Here, 18 assemblies failed to remit GH¢158,147 in taxes withheld; the failure of 26 assemblies to withhold taxes cost the state coffers GH¢122,401; seven assemblies were involved in the payment of VAT without VAT receipts valued at GH¢ 26,567.
District finance officers in trouble
Fourteen district finance officers of 14 assemblies—Asante Akim Municipal, Bekwai Municipal, Ejisu Juabeng Municipal, Offinso Municipal, Adansi South District, Afigya Kwabre, Asante Akim South, Atwima Mponua District, Bosome Freho District, Offinso North District, Sekyere Afram Plains District, Sekyere East District and Sekyere Kumawu District were reported to have violated Part IX, Sections 13 and 14 of the Financial Memoranda for Assemblies as they failed to substantiate payments totalling GH¢1,899,826.19 with the requisite expenditure documents such as invoices, receipts of payees and statements of claims.
The report recommended that in “the absence of the appropriate supporting documents, the amount involved should be recovered from the coordinating directors and finance officers of the assemblies.”
The report also indicated that the Kumasi Metropolitan Assembly (KMA) failed to enforce Section 39 of Part IX of the Financial Memoranda (FM) for MMDAs which demanded that all imprest should be retired at the end of the financial year.
However, the Director of Waste Management and the MP for Manhyia South failed to retire a total amount of GH¢43,908 in imprests three to five months after undertaking supposed activities on behalf of the assembly.
“The tendency that the amount was not used in furtherance of the assembly’s activities cannot be ruled out,” it said.
The report recommended that “failure to retire the imprest amount, advance accounts should be opened in the name of the two imprest holders and the amount recovered accordingly from any entitlements due them.”