This section analyses revenue and expenditure of the Assembly from 2002 – 2005.
The two main sources of revenue are;
• Internal Sources and
• External Sources.
Internal revenues are those collected by the Assembly using it’s own existing collection machinery. These consist of rates, lands, (excluding stool lands), fees and fines, licenses, rents, investments and miscellaneous.External sources are mostly grants from central government, royalties and other external agencies like NGOs, and donor agencies like IDA, USAID, DFID, GTZ, DANIDA, JICA,
E U. etc
The revenue trend over the four – year period is indicated in table 1.9 below. Over the period 2002-2005, out of a total estimated internal revenue of ¢ 10,939,574,745 an amount of ¢ 9,064,602,587 was actually collected constituting 83% of the total projected internal revenue. Out this amount fees and fines accounted for ¢ 6,723,115,783 representing 74% of total internal revenue receipts over the period.
The estimated revenue for fees and fines over the period was ¢7,981,684,265 out of which an amount of ¢6,723,115,783 was realized, representing 84%. This indicates that fees and fines are by far the single most important internal revenue to the Assembly. It has a propensity to grow if well managed.
A further examination of the composition of fees and fines indicate that the major contributor was market tolls, especially from Techiman Market. Thus the bulk of internally generated revenue is derived from agriculture related activities, which to a large extent is dependent on natural climatic conditions. The implication is that any adverse weather condition may have serious repercussions on expected revenue. There is therefore the need to broaden and diversify the internal revenue base.
Additionally, is quite evident that markets play a very important role in internal revenue generation. Facilities at most markets are however poor. Efforts would be made to provide additional market structures and complementary facilities and services at marking centres.
Licenses recorded an actual collection of ¢ 776,161,353 representing 72% of the estimated target of ¢ 1,075,678,500. This constituted 8. 5% of the total internal revenue over the period. The potential of licenses as a key revenue source is yet to be fully exploited. Whereas a, number of economic operators are either ignorant of it, the Assembly also lacks an effective mechanism for it’s collection.
Rates recorded over the period a total collection of ¢526,941,780 (72.5%) out of an estimated target of ¢ 726,862,000. This represented 5.8% compared to total internal revenue of ¢ 9,064,602,587. From 2002 rates fell by 56% in 2003, it then sharply increased by 138% in 2004 and decreased again by 58% in 2005.
Unlike fees and licenses, rates fluctuated widely over the period. The poor performance of rates may be also be attributable to the ineffective mechanism for property rate collection and the undervaluation of properties. A re-valuation of rateable properties in the Municipality and adoption of an effective collection mechanism can greatly enhance this revenue item.
Out of the estimated total external revenue of ¢ 40,644,451,000 an actual amount of ¢ 35,111,660,709 representing 86% was realized. This constituted 79% of the overall actual revenue received by the Assembly over the period. Internal revenue constituted 21%. It must be noted however that receipts from external sources are sometimes irregular and unreliable. The common Fund which is an important source of funding was irregular over the period. Receipts from donor sources may also depend on the interest shown by funding agencies and specific projects in the Municipality. However grants receipts for salaries was regular and showed increases over the period.
Considering the erratic flow of the DACF and it’s associated restrictions regarding disbursement, both endogenous and exogenous revenue sources need to be vigorously mobilized. Advantage must be taken of the Public-Private Partnership policy of the government to explore the possibility of active private in revenue collection eg; property rate, as well as the development and management of facilities like market stores, public toilets, guest houses and water systems. Favourable conditions need to be created eg setting up of an Public-Private Partnership / NGO Desk to attract and facilitate NGO and private sector support to the Assembly. Existing links must also be strengthened with the Assembly’s development partners to expand their operations.
The expenditure of the Techiman Municipal Assembly is divided into recurrent and capital expenditure. The main expenditure items under the recurrent are personal emoluments, Travelling and Transport, general expenditure, Maintenance, repairs and renewals and Miscellaneous.
Capital expenditure consists of all expenditure made on development projects and programmes. This is presented in Table 1.10 above for the years 2002 – 2005. From the table, personal emolument increased from ¢1,639,516,192.00 in 2002 to ¢2,986,650,632.00 in 2005 representing an increase of 82% over the 2002 figure. For the under review personal expenditure constituted 20% of total expenditure for the four year period. However, for the year 2005, personal emoluments were 17% of total expenditure.
For Travelling and Transport, the trend indicates continued increase. From ¢407,588,205.00 in 2002 it rose to ¢1,037,287,236.00 in 2005 indicating an increase of 154% over the 2002 figure. Travelling and Transport constituted an average of 5.5% of total expenditure, over the four year period. The proportion of travelling and transport was 6% for 2005; the percentage increase from 2004 to 2005 was over 72%. This may be attributable to the general increase in the cost of travelling as well as rates of allowances. However, this expenditure sub item needs to be controlled.
Maintenance, repairs and renewals, however received a meagre 0.7% of total expenditure over the period. In 2005, this item constituted only 0.5%. This is an indication of the Assembly’s maintenance culture and the low premium placed on maintaining its assets.
General expenditure constituted 4.0% over the period. In 2005, this constituted only 3.2% of total expenditure and 38.0% of recurrent expenditure for 2005. This figure is high when viewed in efficiency consideration. Waste therefore needs to be identified and reduced in administration. Miscellaneous expenditure constituted 3.6% over the period.
Capital expenditure increased from ¢365,031,490.00 in 2002, to ¢12,291,421,489.00 in 2005. Showing an increase of ¢11,926,389,999.00. This figure however does not include receipts from donors sources. This gives a wrong impression of the Assembly’s actual capital expenditure since quite a significant amount of capital expenditure comes from donors. These need to be properly monitored and captured in the Assembly’s expenditure statement.
Capital expenditure continued to rise, demonstrating the continued injection of funds by government and other donor partners into the Municipality to support developments programmes. In anticipation of the increased development expenditures, adequate internal revenues need to be generated as counterpart funding. Part of the internally generated revenue need to be applied to development projects, to justify it’s continued payment by the people. This calls for prudent financial management.
Refer to the tables below in pdf file