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23.06.2011 Feature Article

Promoting effective disbursement and utilization of DACF

Mr. Samuel Ofosu Ampofo, Minister for Local Government  Rural DevelopmentMr. Samuel Ofosu Ampofo, Minister for Local Government & Rural Development
23.06.2011 LISTEN

The allocation and disbursement of the DACF goes to confirm that district assemblies have not just been created and left to suffer in terms of sourcing funds and other forms of assistance required for development at the local level.

By Anthony Kwaku Amoah
'Mr. Chairman, the price paid for the poor disbursement and utilization of the Fund (referring to the District Assembly Common Fund) has been a major drawback on the MMDAs' development effort, as most of the MMDAs depend on it for development projects, poverty alleviation interventions and service delivery', said Hon. Anthony Egyir Aikins, MCE for Cape Coast on the occasion of capacity building and sensitization workshop for MMDCEs and parliamentarians at Elmina Beach Resort (April 9, 2011).

To accomplish the policy of participatory democracy, Section 252 of the 1992 Constitution of Ghana tries to create the enabling environment for the setting up of conditional grant by the central government to assist MMDAs with financial resources to effectively promote local level development which eventually gave birth to the District Assembly Common Fund (DACF) in 1993.

The DACF (fashionably called the Common Fund) came into being through an Act of Parliament (Act 455 of 1993) and officially became operational in 1994. According to Hon. Egyir Aikins, the DACF is a pool of resources (not less than 5%) of the nationally generated revenue that has been set aside to be shared among all the MMDAs and a development Fund for use to the benefit of all Ghanaians.

It is an indisputable fact that most MMDAs would have collapsed by now, if this DACF had not been instituted, considering the meagre nature of revenues generated internally by these assemblies and the demands of their communities.

Hon. Anthony Egyir Aikins made it clear that 'since 1993 the DACF has been the most important source of funding available to MMDAs in Ghana, and covers between 80% and 90% of any District Assembly's annual expenditure.

According to the Cape Coast MCE, the DACF was established purposely to encourage local governance and deepen commitment to the decentralization programme in general, and fiscal decentralization in particular, promote sustainable self-help development, make up for development deficiencies in deprived districts or communities, complement the Internally Generated Funds (IGF) of the MMDAs to undertake development projects, ensure equitable distribution of development resources among the MMDAs, support the creation and improvement of socio-economic infrastructure in the country, and improve the delivery of social services by the MMDAs.

The allocation and disbursement of the DACF goes to confirm that district assemblies have not just been created and left to suffer in terms of sourcing funds and other forms of assistance required for development at the local level.

On that basis, central government, which initially was providing 5% of Ghana's total revenue accrued (minus foreign loans, grants, non-tax revenue and revenues already collected by or for District Assemblies under any enactment in force) to the Fund, has in recent times increased the quota allocation to 7.5% to enable local authorities carry out more development projects.

The disbursement and utilization of the DACF involves the work of the DACF Administrator, who is appointed by the President, the Chief Executive who is at the receiving end and sees to its distribution, to the various sectors of the local economy and the Regional Coordinating Councils, together with the DACF Administration, who are responsible for the supervision and monitoring activities.

Prior to the disbursement of the DACF to various district assemblies, certain pre-determined instructions, as to which areas the Funds are to be expended are given, and these include -economic ventures (energy, private sector support, road, CT, services), social services (education, health, housing, sport), administration (HR, accommodation, office equipment, project management), environment (sanitation, waste management, environmental protection),HIV/AIDS/malaria prevention, youth employment and disability.

What must, first of all be understood here is that the district assemblies do not receive the real lump sums of the Fund from the DACF Administration and begin to utilize them in carrying out development projects.

Actually, 10% of the Fund has always been set aside as a Reserve Fund, which is deducted before the formula is applied to the remaining 90%. The 90% portion is shared among all the Assemblies using an approved formula; 5% shared among all members of parliament for projects in their respective communities; 2.5% shared among the Regional Coordinating Councils for supervision and monitoring activities; 2.0% used as authorised by the Ministry of Local Government and Rural Development.

To strengthen the disbursement and utilisation processes of the DACF in order to speed up local development, the following points must be taken seriously:

*    Government of Ghana must do well to release money into the Fund as early as possible for disbursement to the various Assemblies so that projects and programmes can kick start and get completed on schedule.

*    The DACF Administrator must endeavour to distribute the monies to the Assemblies following the laid down procedures and processes but should try to do away with unnecessary bureaucracies.

*    After disbursing the monies, the DACF Administrator, in collaboration with the Ministry of Local Government and Rural Development and also the Regional Coordinating Councils, need to carry out intensive monitoring and evaluation exercises to check any possibility of misapplication, embezzlement and malfeasance, in connection with the use of the proceeds of the Fund.

*    There should be education on the guidelines, disbursement, volume and utilization of the Fund to enable citizens understand issues clearly and to demand accountability and probity from the authorities in charge of the disbursement of the Fund in the district.

*    Assembly, unit committee members and the general public need to be informed about the disbursement and utilization of the Fund at town hall meetings, meet-the-press sessions and also displaying any information on the Fund on notice boards at vantage points in the Assembly and in the various communities so that stakeholders can make useful inputs and comments.

*    There should be institutionalization of contract signing ceremonies within the beneficiary communities to enable community members take active part in the awarding and implementation of projects. This will help avoid the situation of giving contracts to friends, relatives and party people, who are not necessarily qualified to execute those projects.

*    There should be periodic auditing of the system to ensure that the administration and management of the Fund meets the desired standard and specifications.

*    The chief executives of the various districts, municipalities and metropolis must ensure that the Funds are used for the purposes for which they have released. On that score, I oppose Hon Anthony Egyir Aikins' suggestion that Assemblies should be given the complete autonomy to decide on how the Fund should be used.

*    Members of Parliament (MP) should not appear to be authoritative when it comes to the disbursement and utilization of the Fund at the local level, especially with MPs who have their party in power and think they command more respect and recognition at the central government level than their chief executives and therefore feel they can use their strengths to influence the distribution and use of the Fund.

*    District assemblies should try to broaden their nets for hunting revenues internally other than relying solely on the DACF for development projects and programmes.

I believe when these points, together with other relevant ones, are strictly followed, we will be able to have effective and efficient disbursement and utilization of the District Assembly Common Fund (DACF) that will invariably bring about massive development to our country and also make the local government system more accountable and relevant to the people.

E-mail: [email protected]

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