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Only 11 Assemblies in Ghana have good financial management systems

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MMDA’s and Directors
MMDA’s and Directors

Only eleven Assemblies out of the 261 Metropolitan, Municipal and District Assemblies (MMDAs) across the country have good financial management systems, a Public Financial Management Compliance League Table has revealed.

The number represents four per cent of the local government units for the 2022 financial year performance after they had scored 50 per cent and above pass mark.
This was revealed at the launch of the first ever Public Financial Management Compliance League Table (PFMCLT) for MMDAs which organised by the Internal Audit Agency (IAA) together with Centre for Local Governance Advocacy and funded by the World Bank.

Key areas of assessment were, compliance with the planning laws of the country, how the Assemblies’ composite budgets match the laws, how their budgets were implemented in terms of procurement and contracts and assessment on quarterly and annual accounting reports.

Other areas were the Assemblies’ internal audit reports, risk-based plan, annual performance reports and irregularities in the Auditor General’s report for the year 2022.
The overall best performing Assembly was the Weija Gbawe Municipal which had 59 per cent, La Dade Kotopon Municipal Assembly had 57. 5 per cent, Adenta Municipal Assembly had 57 per cent, Kwahu South Municipal Assembly scored 56.5, Effia Kwesimintsim Municipal had 55. 5 and Mfantsiman Municipal scored 53 per cent.

The rest were Ayawaso West Municipal Assembly with a score of 52. 5 per cent, Wa Municipal Assembly had 52 per cent, Assin Fosu Municipal Assembly had 51 per cent, Krachi Nchumuru District Assembly scored 50. 5 per cent and West Akim Municipal Assembly scored 50 per cent.

Whilst all six Metropolitan Assemblies failed to meet the 50 per cent pass mark, 20 Municipal and 5 District Assemblies performed better than the six. However, four out of the six Metropolitan Assemblies scored above the national average of 22 per cent
It was also shown that more than 80 per cent of the Assemblies could not submit adequate documents showing compliance with accounting and budgeting requirements in the PFM cycle.

To ensure good public financial management and accountable utilisation of resources, Section 16 (1&2) of the Internal Audit Agency Act, 2003, (Act 658) requires MMDAs and MDAs establish internal audit units which shall ensure an effective and efficient internal auditing.

Dr Eric Oduro Osae, Director General, Internal Audit Agency (IAA), said the Assemblies who refused to submit their documents for assessment would be reported to the Ministry of Finance and the Ministry of Local Government, Decentralization and Rural Development for action to be taken against them.

“The fact that they were not able to submit suggests that there is something going on in the system. If we don’t put the control systems in place, the Government will be transferring resources to the local governments but we will not see development because it is not being used well,” he said.

Dr Osae said: “If only four per cent of the local governments in Ghana have good financial management systems, then it is worrying. It basically confirms what the Auditor General’s report for 2022 said that there had been 48 per cent irregularity increment in the MMDAs from 2021 to 2022.”

He said the IAA would probe the issues and support the Assemblies with the Agency’s internal auditors to strengthen their control systems and build their capacity to bring those at the bottom of the development up.

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