Controversy over Common Fund deductions

The issue of deductions by central government from the District Assemblies Common Fund (DACF) continues to receive critical review, as a heated debate ensued on Tuesday as to whether the practice persists during a policy dialogue in Accra.

While some District Chief Executives (DCEs) pitched camp with their mother ministry -- the Ministry of Local Government and Rural Development -- to debunk the allegations of deductions from the fund, other local government practitioners and civil society actors insisted that the deductions are happening against the will of assemblies.

Some of the participants felt that the DCEs who are denying the deductions are only doing so to please the mother ministry.

The bone of contention was a report issued earlier in the year by SEND Foundation, a non-governmental organisation, which indicated that deductions at source continue to make it impossible for various assemblies to obtain the full complement of their share of the common fund, and to determine their own spending priorities.

Emmanuel Kwadwo Agyekum, a Deputy Minister for Local Government and Rural Development, started it all when he sought to “clarify some issues” contained in the research findings, saying, “...there is a mismatch between the conclusions of the report and the realities on the ground.” On the one hand, he admitted that variations in the amount of money allocated to assemblies “is a terrible fact” as a result of a shortfall in the actual release to the fund; and on the other hand he insisted that there are procedures for deductions, including a resolution from assemblies concerned.

“Neither the Ministry of Local Government and Rural Development nor the Common Fund Administrator has the authority to make deductions at source without such authorisation from the assembly,” the deputy minister said.

George Kyei-Baffour, a former president of the National Association of Local Authorities of Ghana (NALAG), insisted however that the deductions are happening without recourse to the assemblies.

“I am a presiding member of my assembly -- Asante-Akyem Central Municipal Assembly --and I am privy to all the information on transfers of the common fund to my district. And I am saying with emphasis that the deductions continue. Even last year, we were deducted GH?8,000 as exhibition fee without any resolution from the assembly,” he said.

Indeed, the SEND Foundation report, titled “Managing Public Finance for Effective Local Development: The District Assemblies Common Fund in Perspective”, noted several instances of deductions and called for moderation.

According to the report, of a total allocation of GH?799,301 made to the Jirapa District in 2011, GH?426,426 was deducted, representing some 53% of the amount allocated.

Some 47% of the GH?912,508 allocated to the Bole District in the same year was also deducted, and these were non-statutory deductions. “...In 2011, percentage deductions reached as high as over 80% for some MMDAs, while others recorded roughly 30% and below...,” the report said.

The report also noted that compliance with financial management standards by some of the assemblies themselves is low.

“Cash irregularities are the most committed, followed by procurement and contract irregularities, with tax irregularities being the least. It should be noted, however, that some of these irregularities are caused by administrative or procedural blunders and not only through corrupt practices,” it said of the assemblies.