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Report of the Auditor-General on the Management 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 THE MANAGEMENT AND UTILISATION OF DISTRICT ASSEMBLIES' COMMON FUND AND OTHER STATUTORY FUNDS FOR THE YEAR ENDED 31 DECEMBER 2015 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. Richard Quartey Auditor-General Ghana Audit Service 14 September 2016 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 2016 TRANSMITTAL LETTER My Ref. AG.01/109/Vol.2/95 Office of the Auditor-General Ministries Block ‘O’ P. O. Box M96 Accra. Tel. (0302) 662493 Fax (0302) 675496 14 September 2016 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 2015 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 ending 31 December 2015. This report supplements my main report on the operations of the Metropolitan, Municipal and District Assemblies (MMDAs) covering the same period. The report relates to 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 2015 financial year, highlights the significant cases and issues which came out of the routine and special audits carried out under my direction and supervision. The outstanding and unresolved issues are 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 administrative levels of the Assemblies were pervasive as evidenced in the management letters. Report of Auditor-General on the mgt. and utilization of DACF & other statutory Funds – 31 Dec. 2015 i 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¢52,974,083.01. 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. 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 in my audit reports and management letters. I have further recommended punitive actions against management and staff of Assemblies which 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 as shown in my current report for review may be indicative that the Ministry has not significantly implemented the admonitions and recommendations in my previous reports. I therefore appeal to the Honourable Minister to use his good office to ensure that the recommendations in my reports are implemented to the letter by responsible officers in order to improve and raise the standard of financial administration in the Assemblies and forestall the avoidable financial and material losses which result from these anomalies and control weaknesses. I wish to express my profound gratitude to the Chief Executive Officers and the respective MMDAs and their staff for the cooperation and support they gave to my field officers during the audits. I finally, acknowledge the immense contributions made by my staff towards the production of this report. Yours faithfully RICHARD Q. QUARTEY AUDITOR-GENERAL THE RIGHT HONOURABLE OFFICE OF PARLIAMENT PARLIAMENT HOUSE ACCRA Report of Auditor-General on the mgt. and utilization of DACF & other statutory Funds – 31 Dec. 2015 ii 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 2015 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 17-95 8-23 Brong Ahafo Region 96-203 24-45 Central Region 204-254 46-54 Eastern Region 255-330 55-72 Greater Accra Region 331-378 73-81 Northern Region 379-417 82-89 Upper East Region 418-463 90-98 Upper West Region 464-485 99-103 Volta Region 486-589 104-123 Western Region 590-650 124-134 PART IV District Development Facility and the Local 651-781 135-160 Service Delivery and Governance Programme Report of Auditor-General on the mgt. and utilization of DACF & other statutory Funds – 31 Dec. 2015 iii Appendices 2015 District Assemblies’ Common Fund Allocations Appendix ‘A’ Summary of irregularities according to regions Appendix ‘B’ Summary of irregularities according to MMDAs Appendix ‘C’ 2015 DDF transfer Appendix ‘D' DDF irregularities according to MMDAs Appendix ‘E’ Report of Auditor-General on the mgt. and utilization of DACF & other statutory Funds – 31 Dec. 2015 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 2015 PART I MANDATE, SCOPE AND OBJECTIVES Introduction In accordance with Articles 187(2) and 253 of the 1992 Constitution of Ghana and 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 2015 to 31 December 2015. 2. Significant issues noted during 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 in this report. Matters raised 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; Report of Auditor-General on the mgt. and utilization of DACF & other statutory Funds – 31 Dec. 2015 1 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 are sufficient to safeguard and control 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. 4. My audits also ascertained the extent of compliance with applicable laws, regulations and guidelines. These included the Financial Administration Act, 2003 (Act 654), Financial Administration Regulations, 2004 (LI 1802), Financial Memoranda for District Assemblies, Public Procurement Act, 2003 (Act 663), Guidelines on the Utilisation of the District Assemblies’ Common Fund, and the Local Government Act, 1993 (Act 462). Report of Auditor-General on the mgt. and utilization of DACF & other statutory Funds – 31 Dec. 2015 2 PART II Summary of findings and recommendations Introduction 5. My report on the management and utilization of Common Fund and other statutory funds for the 2015 financial year has seen no difference compared with previous ones. The Assemblies continue to operate in disregard to existing rules, regulations, policies, procedures, and directives etc. to ensure effective and efficient use of resources made available to MMDAs. Despite our continued reminders with regard to compliance with the financial regulations the infractions witnessed a significant rise as against 2014 figures. Our management letters and annual audit reports which as usual formed the basis for our reports, revealed internal control weaknesses under our thematic account areas of cash management, contract administration,
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