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Part I Part Ii Part REPORT OF THE AUDITOR-GENERAL ON THE ACCOUNTS OF DISTRICT ASSEMBLIES FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2008 TABLE OF CONTENTS Paragraph Page Transmittal letter - i-iv PART I Executive summary 1 1 PART II Summary of findings and 6 3 recommendations PART III Details of findings and recommendations Financial reporting 29 8 Management issues Ashanti Region 57 16 Brong Ahafo Region 94 24 Central Region 131 32 Eastern Region 174 41 Greater Accra Region 202 47 Northern Region 209 48 Upper East Region 237 54 Upper West Region 269 60 Volta Region 298 66 Western Region 323 72 Report of the Auditor-General the management and utilization of Internally Generated Revenue (IGF) of District Assemblies for the financial year ended 31 December 2008 Appendices Status of annual accounts and statements Appendix “A” Revenue performance Appendix “B” Expenditure performance Appendix “C” Operational results Appendix “D” Assets & liabilities Appendix “E” Summary of irregularities by regions Appendix “F” Report of the Auditor-General the management and utilization of Internally Generated Revenue (IGF) of District Assemblies for the financial year ended 31 December 2008 TRANSMITTAL LETTER Ref. No. AG.01/109/Vol.2/43 Office of the Auditor-General Ministries Block ‘O’ P.O. Box M 96 Accra Tel: (030) 2662493 Fax (030) 2662493 29 August 2011 Dear Madam Speaker, REPORT OF THE AUDITOR-GENERAL ON THE ACCOUNTS OF DISTRICT ASSEMBLIES FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2008 I have the honour to transmit, herewith, my report on the accounts of Metropolitan, Municipal and District Assemblies (MMDAs) for the financial year ended 31 December 2008, to be laid before Parliament in accordance with Article 187 (5) of the Constitution. 2. The report is a consolidation of significant findings and recommendations made from routine audits conducted under my direction during the period, which have formally been conveyed in management letters to the Assemblies. Unresolved and outstanding issues in management letters issued, which are of concern to me, have formed the basis for the compilation of this report. 3. Although the annual accounts of some of the Assemblies fell in arrears and therefore their financial statements for the period under review could not be certified by my office, financial transactions and related activities of these Assemblies were subjected to interim audits and issues arising from these audits have been included in this report. Report of the Auditor-General on the management and utilization of Internally Generated i Revenue (IGF) of District Assemblies for the financial year ended 31 December 2008 4. For those 114 District Assemblies who submitted their financial statements in good time and were validated by my office, the annual audit reports on their financial statements show that, generally, with the exception of matters raised in their management letters, their financial statements fairly present their financial positions as at the end of the 2008 financial year 5. This report portrays recurring internal control deficiencies and managerial ineffectiveness, which have continued, as reflected in my previous reports, to be the major causes of irregularities in the administration of the affairs of the Assemblies. 6. Key among these are misappropriation, direct disbursement from revenue, contract and procurement irregularities, unsupported payments, failure to recover outstanding loans, advances and imprest among others. These irregularities do not include the undetermined revenues linked to the outstanding 822 miscellaneous receipt books without face values which were not brought to account by Revenue Collectors. 7. A summary of the irregularities which were noted in each District Assembly are provided on regional basis in Appendix F1 to F10. The regions are arranged in alphabetical order starting with Ashanti Region as F1 and ending with the Western Region as F10. 8. These irregularities indicate that more commitment is needed from the management of the Assemblies to ensure that the identified lapses are not only corrected but also appropriate measures are put in place to avoid their continued occurrence in future operations. 9. To ensure that the irregularities noted are minimised, I would like to reiterate my advise that desk officers for Assemblies should be 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 to the Minister of Local Government and Rural Development (MLGRD) for further action. 10. Since non-compliance to financial administration regulations is one of the major causes of the persistent irregularities in the MMDAs, I recommend that the Accountants and ii Report of the Auditor-General on the management and utilization of Internally Generated Revenue (IGF) of District Assemblies for the financial year ended 31 December 2008 Coordinating Directors of Assemblies which are involved in instances of non-compliance to the provisions of the Financial Administration Regulations, 2004, the Public Procurement Act, 2003, the Financial Memoranda for MMDAs and other government financial regulations should be reprimanded by the Ministry of Local Government for failing to ensure compliance to government’s financial administration regulations and failing to exercise monitoring and supervisory control over the functions of subordinate staff which could be regarded as negligence of duty. 11. I would further like to urge the Minister to organise training workshops on the provisions in the regulatory framework for District Assemblies to ensure improvement in compliance with the laws and other regulations governing the financial operations of the Assemblies. 12. On the late submission of annual accounts, I wish to state that the timely preparation of the financial statements and their audit are some of the key triggers for budgetary support to District Assemblies under agreements signed between the Government of Ghana and the Development Partners. The Ministry, therefore, needs to strengthen its monitoring and supervisory roles over the Assemblies and ensure the timely submission of the financial statements of all District Assemblies for audit. 13. I am aware of how much I depend on others to produce my reports. In this regard, I would like to acknowledge the co-operation and assistance of the District Chief Executives of the various Assemblies and their staff during the audits. I would also like to express my gratitude to my staff for their invaluable contribution towards the production of this report. Yours faithfully, AUDITOR-GENERAL THE RT. HON. SPEAKER OFFICE OF PARLIAMENT PARLIAMENT HOUSE ACCRA Report of the Auditor-General on the management and utilization of Internally Generated iii Revenue (IGF) of District Assemblies for the financial year ended 31 December 2008 REPORT OF THE AUDITOR-GENERAL ON THE ACCOUNTS OF DISTRICT ASSEMBLIES FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2008 PART I EXECUTIVE SUMMARY Introduction We have audited the annual accounts of 114 out of 170 Assemblies for the financial year ended 31 December 2008, pursuant to the authority given me under Article 187(2) and 253 of the 1992 Constitution and Section 121 of the Local Government Act (Act 462). The annual accounts of the outstanding 56 Assemblies were either not submitted in good time to be validated or have not been submitted at the time of writing this report. 2. Preliminary audit observations made were compiled into management letters which were discussed with the Assemblies and formally communicated to them for their comments and necessary action. Responses received, where deemed appropriate, have been included in this report. Scope and audit objectives 3. The audit was guided by Section 13 of the Audit Service Act, 2000 (Act 584) and the auditing standards of the International Organisation of Supreme Audit Institutions (INTOSAI). 4. Section 13 of the Audit Service Act requires me to examine in such manner, as I think necessary, the financial operations of audited bodies including Metropolitan, Municipal and District Assemblies (MMDAs) to 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 an 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 authorised; Report of the Auditor-General the management and utilization of Internally Generated 1 Revenue (IGF) of District Assemblies for the financial year ended 31 December 2008 essential records are maintained and the rules and procedures applied are 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 utilised and results achieved. 5. The audit also ascertained the extent of compliance with applicable laws and regulations including the Financial Administration Act of 2003 (Act 654), the Financial Administration Regulations (FAR) of 2004, the Financial Memoranda for District Assemblies and the Public Procurement Act (PPA) 2003, Act 663. 2 Report of the Auditor-General the management and utilization of Internally Generated Revenue (IGF) of District Assemblies for the financial year ended 31 December 2008 PART II SUMMARY OF KEY FINDINGS
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