The PNDC Law 207 passed in 1988 and its replacement, an Act of Parliament (Act 462) enacted in 1993 both concern demarcation of the country into districts for effective local governance.
Whereas the PNDC Law 207 created 110 districts from the existing 65, Act 462 (Local Government Act, 1993) made them 138, which is still the case.
Today, there are 138 district assemblies in the country.
Among other functions, the district assembly is charged with the responsibility of the overall development of the district, which calls for various sources of financing.
One such source is the District Assemblies Common Fund (DACF).
The DACF is established by the District Assembly Common Fund Act 1993 (Act 455) backed by Article 252 of the country’s 1992 Constitution.
The major source of funds into the DACF is a minimum of five per cent of the national revenue to be shared among all the district assemblies with a formula approved by Parliament, to support their development activities.
The DACF is thus a development fund which enables the use of the nation’s wealth throughout the country for the benefit of all the citizens.
Yesterday our lead had the headline ‘No funds for DACF for 2yrs … Finance Ministry fails to transfer 5 % oil revenue’.
In that story, it was captured that for two consecutive years (2021 and 2022), the Ministry of Finance failed to transfer five per cent of the Annual Budget Funding Amount (ABFA) of the country’s oil revenue to the DACF as required by law.
Anyone reading our headline and first paragraph may think that the Ministry of Finance did not transfer any monies at all in the two years in reference.
The truth is that the Ministry paid 1.74 per cent of the ABFA in 2021 and 2.39 per cent in 2022, which left shortages of 3.26 per cent and 2.61 per cent in 2021 and 2022 respectively.
Even with the picture made clear, we can say the payments give the impression that there were no funds to meet the required payments otherwise they would have been made; or was it the case that the Ministry chose to divert some of the funds for other purposes?
If the revised projected ABFA of GH¢6,126.17 million for 2022 is anything to go by, it means GH¢205 million was to be disbursed to the DACF for 2022 instead of the GH¢105,281,567.06 actually paid.
We do not suspect any mismanagement but rather misapplication, which deprives the assemblies of some strength to meet certain development obligations.
The funds to be paid into the DACF are statutory payments just as like the SSNIT contributions from employers whose payment default attracts sanctions.
Therefore, we suggest that even if the misapplication cases regarding the ABFA payments for 2021 and 2022 cannot be sanctioned, the Ministry of Finance must be made to pay the differences.
This will serve as a deterrent to other state institutions whose officials think by their administrative powers and authority they can even violate certain laws or regulations and go scot-free.
