The Public Accounts Committee (PAC) of Ghana’s Parliament has urged the State to punish Metropolitan, Municipal and District Assemblies’ (MMDAs) Officials who are involved in the mismanagement and misuse of the District Assemblies’ Common Fund (DACF) and other Statutory Funds.
Presenting the Report of the Public Accounts Committee on the Reports of the Auditor-General on the Management and Utilisation of the District Assemblies’ Common Fund (DACF) and other Statutory Funds for the Financial Year ended 31st December, 2010, 2011 and 2012 on the floor of the House, the Chairman of PAC, Hon. Kwaku Agyeman-Manu informed Parliament that ‘the significant findings of the Auditor- General in his Reports bordered on Cash Irregularities, Procurement and Store Irregularities, Tax Irregularities, Contract Management Irregularities and Lack of Transparency in the Utilisation of DACF Deductions at source.
Touching on Cash Irregularities, ‘the Committee observed that in years 2010, 2011 and 20112, imprest holders in forty-eight (48) Assemblies failed to retire imprest amounting to GH 1,267,750.45 cedis.
On Unsupported Payment Vouchers, ‘the Committee observed that one hundred and forty-five (145) Assemblies made payments amounting to GH 15,477,097.40 cedis without attaching the relevant documents to authenticate payments made in years 2010, 2011 and 2012.
Shedding light on Unapproved Overdrafts and Loans/Interest, ‘the Committee noted that in year 2011, three (3) Assemblies overdrew their DACF accounts by a total amount of GH 2,392,892.33 cedis whilst in year 2012, four (4) Assemblies overdrew their DACF accounts to the tune of GH 398,911.24 cedis without the approval of the Hon. Minister for Finance.
Briefing the House on Unreceipted Deductions by DACF Administrator, ‘the Committee observed that the DACF Administrator deducted at source, a total amount of GH 43,630,888.29 cedis in years 2010, 2011 and 2012 from the Common Fund allocations of some Assemblies without issuing receipts in acknowledgement of the amounts deducted.
Mr Speaker, on Misapplication of DACF, ‘the Committee noted that sixty-three (63) Assemblies misapplied a total amount of GH 6,146,045.30 cedis from their DACF allocations to recurrent expenditure instead of developmental expenditure during the years under consideration, the Chairman said.
As regards Procurement and Stores Irregularities, ‘the Committee observed that fifty-nine (59) Assemblies made procurement totaling GH 2,812,723.71 cedis without alternative quotations or through competitive bidding (Non-Competitive Procurement) in years 2010, 2011 and 2012.
With respect to Unrecorded Store Items, ‘the Committee noted that sixty-two (62) Assemblies made purchases worth GH 2,724,548.29 cedis but failed to take them on store ledgers during the years under consideration.’
Hon. Agyeman-Manu also stated that on Fuel Purchases not accounted for, ‘the Committee observed that forty-one (41) Assemblies failed to record fuel purchases valued at GH 1,054,803.55 cedis in the relevant vehicle log books.
The Chairman further indicated that regarding Tax Irregularities, ‘the Committee observed that in years 2010, 2011 and 2012, fifty-two (52) Assemblies failed to deduct taxes totaling GH 140,888.40 cedis from payments made for goods and services thereby denying government, the timely inflow of revenue.’
On Withholding Tax not Remitted, ‘the Committee noted that in years 2010, 2011 and 2012, fifty-two (52) Assemblies failed to remit Withheld Taxes amounting to GH 345,347.52 cedis to the Ghana Revenue Authority (GRA).
The Public Accounts Committee also observed that in year 2012, thirty-five (35) Assemblies made purchases from Non-VAT registered entities to the tune of GH 353,970.09 cedis thereby avoiding the payment of VAT on purchases made.
Hon. Agyeman-Manu continued that ‘the Committee again observed that ten (10) Assemblies failed to obtain VAT invoices from suppliers to support payments totaling GH 26,254.22 cedis (Failure to obtain VAT Invoices).
The Chairman enunciated that as regards Contract Management Irregularities, ‘the Committee noted that in 2010, Suhum Kraboa Coaltar District Assembly overpaid a contract sum by GH 712.50 cedis. He added that in year 2011, Wassa Amenfi District Assembly also made an overpayment of a contract sum by GH 1,074.00 cedis whilst in year 2012, Sefwi Wiawso Municipal Assembly and Shai Osudoku District Assembly overpaid contract sums by a total of GH 31,726.70 cedis during the execution of contracts in years 2011 and 2012 respectively.
With respect to Unauthorised Variation of Contract, ‘the Committee noted that in years 2010, 2011 and 2012, eight (8) Assemblies varied contracts above 15% to the tune of GH 619,282.05 cedis, without authorisation as required by the Public Procurement Act 2003 (Act 663), Section 64 (1) and (2).
Touching on Payment without Monitoring Report, ‘the Committee observed that in years 2010, 2011 and 2012, a total of GH 690,052.90 cedis was paid by fourteen (14) Assemblies to various contractors without Monitoring Reports/Certificates to confirm that the work was satisfactorily executed.
Concluding the presentation of the Report, Hon. Agyeman-Manu said that ‘indeed, the infractions (Cash Irregularities, Procurement and Store Irregularities, Tax Irregularities, Contract Management Irregularities and Lack of Transparency in the utilisation of DACF deductions at source) as contained in the Reports of the Auditor-General on the Management and Utilisation of District Assemblies’ Common Fund and other Statutory Funds for the years ended 31st December 2010, 2011 and 2012 were repetitive in nature.’
The Chairman further stated that ‘the recurrence suggests that Management of various Assemblies have blatantly refused to perform their roles efficiently. The Auditor-General’s annual recommendation for effective monitoring and follow-up mechanisms have been ignored, adding that by implication, the various Audit Report Implementation Committees (ARICs) at the Assemblies are not working as the law requires.
‘In the opinion of the Committee, the repetitive nature of the infractions with regard to both financial and administrative lapses underscore the need for punitive sanctions to act as a deterrent to officials charged with the responsibility of protecting the public purse’, the Chairman said.
Hon. Agyeman-Manu added that ‘the Committee therefore urges the Ministry of Local Government and Rural Development to ensure that Assemblies implement the Committee’s recommendations as early as possible. The Committee also reiterates its recommendation that the Auditor-General should not accept posthumous regularisation of financial transactions. Any irregularity which is not sorted out during the audit period should result in an outright surcharge to the Officers responsible.
‘To this end, the Committee recommends to the House for adoption, its Report on the Reports of the Auditor-General on the Management and utilisation of Districts Assemblies’ Common Fund and other Statutory Funds for the years ended 31st December 2010, 2011 and 2012’, the Chairman entreated the House hence the Report was adopted after some Members had expressed their dissatisfactions on the Report.
The Public Accounts Committee (PAC) is made up of not more than twenty-five (25) Members and is chaired by a Member who does not belong to the party which controls the Executive branch of Government. The duty of the Committee is to examine the audited accounts showing the appropriation of the sums granted by Parliament to meet the public expenditure of the government as presented to the House by the Auditor-General of Ghana.