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Report of the Auditor-General on the Management and Utilisation of The Our Vision To be one of the leading Supreme Audit Institutions in the world, delivering professional, excellent, and cost effective auditing services REPUBLIC OF GHANA REPORT OF THE AUDITOR-GENERAL ON THE MANAGEMENT AND UTILISATION OF DISTRICT ASSEMBLIES' COMMON FUND AND OTHER STATUTORY FUNDS FOR THE YEAR ENDED 31 DECEMBER 2016 This report has been prepared under Section 11 of the Audit Service Act, 2000 for presentation to Parliament in accordance with Section 20 of the Act. Daniel Yaw Domelevo Auditor-General Ghana Audit Service 30 June 2017 This report can be found on the Ghana Audit Service website: www.ghaudit.org For further information about the Ghana Audit Service, please contact: The Director, Communication Unit Ghana Audit Service Headquarters Post Office Box MB 96, Accra. Tel: 0302 664928/29/20 Fax: 0302 662493/675496 E-mail: [email protected] Location: Ministries Block 'O' © Ghana Audit Service 2017 TRANSMITTAL LETTER My Ref. AG.01/109/Vol.2./103 Office of the Auditor-General Ministries Block ‘O’ P. O. Box M96 Accra. Tel. (0302) 662493 Fax (0302) 675496 30 June 2017 Dear Hon. Speaker REPORT OF THE AUDITOR-GENERAL ON THE MANAGEMENT AND UTILISATION OF THE DISTRICT ASSEMBLIES’ COMMON FUND (DACF) AND OTHER STATUTORY FUNDS FOR THE YEAR ENDED 31 DECEMBER 2016 I have the privilege and honour to submit to be laid before Parliament, my report on the Management and Utilisation of the District Assemblies’ Common Fund and Other Statutory Funds for the financial year ended 31 December 2016. This report supplements my main report on the operations of the Metropolitan, Municipal and District Assemblies (MMDAs) covering the same period. 2. The report covers the management and utilization of the District Assemblies’ Common Fund (DACF) and District Development Facility (DDF) which were provided by the Common Fund Administrator and Ministry of Local Government and Rural Development respectively for mostly physical development activities of MMDAs. The report which has been compiled from unresolved and outstanding matters contained in management letters issued by my office during the 2016 financial year, highlights the significant cases and issues which came out of the routine (interim and final) and special audits carried out under my direction and supervision. 3. The outstanding and unresolved issues were attributed to deficiencies and weaknesses in internal controls in the operations of the Assemblies. Irregularities such as non-compliance with existing legislative framework and instruments, managerial lapses and weak monitoring procedures at both the ministerial, legislative and Auditor-General’s Report on the Management and Utilisation of DACF and Other Statutory Funds i administrative levels of the Assemblies were still prevalent as evidenced in the management letters. 4. The deficiencies noted in the operations of the Assemblies created avenues for some officials to mismanage funds and resources of the Assemblies to a financial value of approximately GH¢70,173.645.97. The lapses and deficiencies were identified in transactions under account areas such as cash management, contract, procurement and store, and tax irregularities which have been summarized and consolidated in this report. 5. I have in my previous report on the Management and Utilisation of the DACF, recommended to the Honourable Minister of Local Government and Rural Development to set up effective monitoring and follow-up mechanisms to track actions to be taken on conclusions and recommendations made in my audit reports and management letters. I also recommended punitive actions against management and staff of Assemblies who indulge in the mismanagement of resources brought under their care. The widespread instances of malfeasance and mismanagement of finances and resources of the Assemblies by public officials in this report may mean that the Ministry has not significantly implemented the admonitions and recommendations in my previous reports. 6. I therefore appeal to the Honourable Minister to use her good office to ensure that the recommendations in my reports are implemented to the letter by responsible officers in order to improve and step up the standard of financial administration in the Assemblies and forestall the avoidable financial and material losses which result from these anomalies and control weaknesses. 7. I wish to express my profound gratitude to the Chief Executive Officers, Coordinating Directors and staff of the respective MMDAs for the cooperation and support they gave to my field officers during the audits. 8. I finally, acknowledge the immense contributions made by my staff towards the production of this report. Auditor-General’s Report on the Management and Utilisation of DACF and Other Statutory Funds ii Yours faithfully, DANIEL YAW DOMELEVO (AUDITOR-GENERAL) THE RIGHT HONOURABLE SPEAKER OFFICE OF PARLIAMENT PARLIAMENT HOUSE ACCRA Auditor-General’s Report on the Management and Utilisation of DACF and Other Statutory Funds iii TABLE OF CONTENTS Paragraph Page PART I Mandate, Scope and Objectives 1-4 1-2 PART II Summary of findings and recommendations 5-16 3-7 PART III Details of findings and recommendations Ashanti Region 17-102 8-20 Brong Ahafo Region 103-182 21-33 Central Region 183-222 34-41 Eastern Region 223-293 41-54 Greater Accra Region 294-318 55-59 Northern Region 319-362 60-66 Upper East Region 363-418 67-76 Upper West Region 419-468 76-83 Volta Region 469-580 84-101 Western Region 581-625 102-110 PART IV District Development Facility and the Local 626-729 110-128 Service Delivery and Governance Programme Appendices 2016 District Assemblies’ Common Fund Allocations Appendix ‘A’ Summary of irregularities according to regions Appendix ‘B’ Summary of irregularities according to MMDAs Appendix ‘C’ 2016 DDF transfer Appendix ‘D' DDF irregularities according to MMDAs Appendix ‘E’ Auditor-General’s Report on the Management and Utilisation of DACF and Other Statutory Funds iv REPORT OF THE AUDITOR-GENERAL ON THE MANAGEMENT AND UTILISATION OF DISTRICT ASSEMBLIES’ COMMON FUND (DACF) AND OTHER STATUTORY FUNDS FOR THE YEAR ENDED 31 DECEMBER 2016 PART I MANDATE, SCOPE AND OBJECTIVES Introduction As stipulated by Articles 187(2) and 253 of the 1992 Constitution of Ghana and Part X, Section 121 of the Local Government Act, 1993 (Act 462), the Auditor-General has audited the management and utilisation of the District Assemblies’ Common Fund and Other Statutory Funds of the 216 Metropolitan, Municipal and District Assemblies (MMDAs) for the period 1 January 2016 to 31 December 2016. 2. Significant issues emanating from our management letters on the interim and final audits provided the materials and facts for the report. The issues raised during both audits were formally discussed with the management of the Assemblies and their comments and responses have been considered before concluding this report. Issues considered in this report are only those that came to our attention during the audits and so the weaknesses identified and recommendations made might not be exhaustive. Scope of audit and objectives 3. I applied the International Standards of Auditing (ISAs), INTOSAI and AFROSAI-E standards of 1992 in the conduct of the audits. My audits were also guided by Section 13 of the Audit Service Act, 2000 (Act 584) which required that I ascertain whether in my opinion: The accounts have been properly kept; All public monies collected have been fully accounted for and rules, regulations and procedures are sufficient to provide effective check on the assessment, collection and proper allocation of revenue; Monies have been expended for the purposes for which they were appropriated and expenditures made as authorized; Essential records were maintained and the rules and procedures applied were sufficient to safeguard and control the Assemblies’ assets and Programmes and activities of the Assemblies have been undertaken with due regard to economy, efficiency, and effectiveness in relation to the resources utilized and results achieved. Auditor-General’s Report on the Management and Utilisation of DACF and Other Statutory Funds 1 4. My audits also ascertained the extent of compliance with applicable laws, regulations and guidelines. These included the Financial Administration Act, 2003 (Act 654), Public Financial Management Act, 2016 (Act 921), Financial Administration Regulations, 2004 (LI 1802), Financial Memoranda for District Assemblies, Public Procurement Act, 2003 (Act 663), Public Procurement (Amendment) Act, 2016 (Act 914), Guidelines on the Utilisation of the District Assemblies’ Common Fund, and the Local Government Act, 1993 (Act 462). Auditor-General’s Report on the Management and Utilisation of DACF and Other Statutory Funds 2 PART II Summary of findings and recommendations Introduction 5. The issues in my report on the Management and Utilization of Common Fund and other statutory funds for the 2016 financial year are not significantly different from those of previous years. Management and staff of the Assemblies continued to violate rules and regulations, policies, procedures, and directives etc. which had been put in place to ensure the economic, effective and efficient management of public resources made available to MMDAs. These violations persisted in spite of our recommendations with regards to compliance with the financial regulations and other existing public financial management laws. As a result, the irregularities for the year 2016 of GH¢70,173,645.97 showed a 32 per cent rise of GH¢16,955,282.83 over the 2015 figure of GH¢53,218,363.14. 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. 6. The state of affairs in the management of resources by MMDAs did again 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.
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