There are five (5) financial institutions in the district. These include Ghana Commercial Bank at Akomadan, Fiagya Rural Bank at Afrancho, Otuasekan Rural Bank at Nkenkaasu, Offinso Rural Bank at Akomadan and Akomadan Rural Bank at Akomadan.
INCOME LEVELS AND ANALYSIS
The Assembly performs several functions which require funds. As a result, it has been mandated to raise revenue internally to meet its expenditure requirements to complement the District Assemblies Common Fund.
Major Sources of Internally Generated Fund (IGF) are as follows;
c. Fees and Fines
d. Investment ( markets)
The external sources of revenue include the following;
a. Central government transfers
b. Donors/Development Partners
The income of the Assembly can therefore be analyzed based on the following revenue components;
c. Fees and Fines
e. Investments and
Before 1994, the major sources of revenue to MMDAs were rates, fees, fines and licenses. However, with the coming into force of the 1992 Constitution the District Assemblies Common Fund was introduced as an enshrined provision. It was implemented in 1994 and has become the single most important and largest source of revenue to the Assembly. Its contribution to total annual revenue of the Assembly is in the region of 55%.
The rates are paid by the resident adult population and owners of immovable properties. The rate able population includes adults between the ages of 18-60 years. Students are however exempted. The property rate, on the other hand, is levied on immovable properties. These include residential, commercial and industrial properties. Temporary structures are also covered under property rate.
Licenses are charged on economic activities in the district. The license serves as the permit for undertaking any such activity in the district. Whilst some licenses are paid on annual or quarterly basis a significant number of them are paid on monthly basis. This thus increases the cost of collection.
The fees are paid by users of the services provided by the Assembly. These include market tolls, rent, and lorry park tolls. Interest accrues from monetary investments. Transfers are made up of revenue from the central government sources and the Lands Commission to the Assembly. Transfers from the central government include the District Assemblies Common Fund and wages and salaries of the local government staff at the Assembly. The Common Fund released to MMDAs is not less than 5% of the total national revenue. The purpose is to make available to MMDAs funds for development.
Administration of Revenue
The administration of revenue at the Assembly is of utmost importance. The success or otherwise of the performance in terms of funds depends very much on the effectiveness and efficiency of revenue administration to generate the required income. The billing and collection effort by the Assembly leaves much to be desired. A critical look must therefore be taken at the revenue administrative machinery, collection and structure.
The unit for revenue mobilization is solely the responsibility of the Accounts Department with technical support from the Planning and Budget Unit. Since its inception, the Assembly has been employing two (2) means to collect its revenue. They are;
a. Its own staff who collect property rate and a few other specific revenue items an
b. Commission collectors are in charge of about 80% of other licenses and fees including those from the markets. The collectors receive 10% commission on monies received and paid to the Assembly.
Source: District Finance Office, 2016
Analysis of table 6 indicates that in 2015, fees and fines contributed the bulk of the IGF. Its contribution stood at GH¢125,033.00 representing about 36% of total IGF. This was followed by Lands and forestry and rates with 32% and 14.5% respectively. Again, in 2016, fees and fines topped the contribution to IGF with an amount of GH¢129,767.50 representing 39%. It was again followed by lands and forestry with an amount of GH¢72,887.54 representing 22%. There is however more room for improvement in the collection methods of these revenue sources, especially in the areas of Rates.
EXPENDITURE ITEMS AND EXPENDITURE PATTERNS OF THE ASSEMBLY
From the table above it is observed that travelling and transport decreased in actual figures from 116,252.60 in 2015 to 114,413.43 in 2016. However, in terms of percentages it rather increased by 2.24 percent. This phenomenon came about due to the fact that, the total expenditure for year 2015 was much higher than year 2016.
PRUDENT FISCAL MANAGEMENT
The Local Government Act ,2016, Act 936 makes it explicitly clear that expenditure may be incurred only if that expenditure is included in the approved budget of the Assembly for the relevant year. Added to this is the fact that, expenditure is guided by the Financial Administration Regulations.
In adherence to the letter of the Local Government Act and the Financial Administration Regulations all payments must be authorized by the District Coordinating Director and approved by the District Chief Executive before payments are made by the District Finance Officer.
The Local Government Inspector who serves as an Internal Auditor, independently pre-audits every payment made by the Assembly and gives his/her opinion. He makes in each report such observations as they appear to him necessary as to the conduct of the financial officers of the Assembly during the period under review and finally sends copies of each report to the Local Government Minister, the District Chief Executive and the Regional Coordinating Council.
DISBURSEMENT OF COMMON FUND|
In disbursing the Fund, requests/memoranda are submitted to the District Chief Executive. Approval is then given and disbursement forms raised. The forms are then endorsed by the District Chief Executive, District Coordinating Director and the District Finance Officer as laid down by the Administrator of the Common Fund. Vouchers are raised upon submission of all relevant documents to support the voucher. Cheques are sent together with the disbursement forms to the Bank.
• Financing of Contracts
Contracts are financed mainly through the Common Fund and other interventions such as the Community-Based Rural Development Project, Social Investment Fund, Community Water and Sanitation Agency, GETFUND etc. Recurrent expenditure is financed from the Assembly’s own internally generated revenue.
• Income levels and Analysis
Revenue performance of the assembly over the period under review has not been encouraging. This is as a result of the following;
a. People’s unwillingness to pay their taxes and basic rates
b. Revenue collectors not paying all monies collected to the Assembly
c. Property owners avoiding the payment of property rates
d. Unwillingness of small scale business enterprises to pay their levies and fees to the Assembly
e. Absence of reliable data and adequate data on all economic activities in the district e.g. hairdressers, seamstresses, traders, etc.
If targets are to be met, then there is the need to block these revenue leakages. The Assembly could therefore generate enough money to meet recurrent expenditure and also undertake development projects.
Date Created : 11/25/2017 5:54:30 AM