NDC threaten to sue government over ‘malfunctional’ District Assemblies Common Fund
The Minority Caucus in Parliament has said that actions of government towards the management of the District Assemblies Common Funds have compelled them to seek legal redress on the matter and have also described the funds as “malfunctional”.
It further laments in their press release the government’s persistent decision not to give the various districts their required funds to carry out their constitutionally mandated duties.
According to the caucus, “Amounts due to the DACF were under-provided for and owed to the Fund for 2017 and 2018. The debts were partly settled in 2020 with monies borrowed during the COVID-19 intervention period. An amount of GHS144 million was applied for that,” the Minority said in a release.
Also, it said this government introduced the “Earmarked Funds Capping and Realignment Act” under which the Common Fund was listed as those funds that should be capped so as to retain funds for the Central Government spending.
Incomes from petroleum resources were already excluded from total revenues from which DACF monies could be computed.
“If Government does not heed our calls, we serve notice that we will head to Court again very soon,” the group stated.
Read the full statement below.
PRESS STATEMENT ON THE MALFUNCTIONAL STATUS OF THE DISTRICT ASSEMBLIES COMMON FUND
Introduction
Article 252 of the 1992 Constitution which we apply in governing our dear Country provides as follows:
. There shall be a fund to be known as the District Assemblies Common Fund.
. Subject to the provisions of this Constitution, Parliament shall make provision for the allocation of not less than five per cent of the total revenues of Ghana to the District Assemblies for development, and the amount shall be paid into the District Assemblies Common Fund in quarterly instalments.
. The money accruing to the District Assemblies Common Fund shall be distributed among all the District Assemblies on the basis of a formula approved by Parliament.
The Local Governance Act (Act 936 of 2016) in Section 126 reiterates the constitutional provisions and gives greater details of how the Constitutional provisions should be implemented. Further to these provisions, the Supreme Court of Ghana has given orders as to what constitutes Total Revenues of Ghana and what moneys should be paid into the Fund.
The purpose of this Press Conference is to highlight and reveal to you and Ghanaians, in general, the mal-functional status of the District Assemblies Common Fund (DACF) and the suspected misapplication of the Constitutionally created fund by the government of Nana Addo Dankwa Akufo-Addo and Dr Bawumia. Indeed, the DACF is simply not working today, having been rendered impotent. The monies due to the Fund have not been given to the Fund to enable it to carry out its mandate as abundantly outlined by the Constitution and the relevant Act.
Difficulties for the Management of the DACF
Underfunding of the DACF
This Government has persistently done everything possible to deprive the District Assemblies Common Fund of the needed funds for the discharge of its constitutionally mandated duties. Amounts due to the DACF were under-provided for and owed to the Fund for 2017 and 2018. The debts were partly settled in 2020 with monies borrowed during the COVID-19 intervention period. An amount of GHS144 million was applied for that.
Prior to this, this Government introduced the “Earmarked Funds Capping and Realignment Act” under which the Common Fund was listed as those funds that should be capped so as to retain funds for the Central Government spending. Incomes from petroleum resources were already excluded from total revenues from which DACF monies could be computed.
In June 2019, the Supreme Court, in the case of “Benjamin Kpodo & Richard Quarshiga vs. Attorney General”, ruled that as a constitutional creation, the DACF could not be capped and that the receipts from petroleum sources should be included in the total revenues when computing funds due to the DACF. But the Ministry of Finance is refusing to properly comply with the directives of the apex Court. The Ministry of Finance deducts certain amounts from the total revenue before computing the 5% of the balance. These are revenues ceded to GNPC and GRA. They are agencies of State just like other MMDAs; so, their budgetary allocations should be made after the constitutional 5% is provided for the DACF. We consider this practice as a ploy to reduce the amounts due to the DACF. And we think it is unconstitutional. We ask the Ministry of Finance to provide the constitutional five per cent of total revenue to DACF before making budgetary allocations to MMDAs.
Timing of the Determination of Amounts Due to the District Assemblies Common Fund
The amounts due to the Common Fund are based on the total revenue generated within the relevant period, i.e., Quarter of the year. The Ministry of Finance has over the years refused to make known to the DACF and the general public how much is generated for each relevant period
When you go to the website of that Ministry one finds fluctuating figures for the same period. It appears the Ministry is concealing data from stakeholders. The effect of this is that one does not know the base figure upon which the five per cent is computed. This mystery allows the Ministry of Finance to release any amount they wish to give out to the DACF without any checks coming from the Fund.
Non-Payment of Monies to DACF in Quarterly Instalments
The 1992 Constitution is abundantly clear on how the Common Fund should be disbursed: Article 252 (2) mandatorily requires that monies for the DACF shall be paid by quarterly instalments. The issues which arise here are:
The Ministry of Finance has arbitrarily determined that the amount due to the DACF for one quarter of the year is not due until after the end of the next quarter. For instance, the first quarter of the year ends in March; but monies for the Common Fund will only be due after the end of the second quarter in June. The question is does it take three months to determine what revenue was realised in a particular quarter, especially in these days of computer technology? Again, we see this as a ploy to retain the monies due to the DACF at the centre.
The Ministry of Finance has failed to release funds to the DACF for several quarters over 2020 — 2021. This is a clear violation of the 1992 constitution, Article 252 (2). Indeed, payments have not been made in quarterly instalments.
The Ministry of Finance is very heavily indebted to the DACF. The amount has run to about two billion Ghana Cedis (GHS2,000,000,000.00+). This is made up as follows:
2019 — GHS700m (per the Auditor-General’s report)
2020 — GHS587m
2021 — GHS884m (Estimates for only 1st and 2nd Quarters).
Curiously a release letter issued by the Ministry of Finance indicated an amount of GHS434,587,416.00 for the fourth quarter of 2020; this amount was lower by GHS210,301,339 than the amount computed by the same Ministry of Finance by which the allocation should have been GHS644,888,755.00. During reconciliations, the Chief Director of the Ministry stated that the Ministry did not release the full amount because that would have exceeded the legally appropriated allocation to the DACF. We realise that that position is not acceptable because if even the correct amounts were fully released that would amount to GHS1,822,795,315.00, still lower than the appropriated amount of GHS2,312,706,550.00 for the 2020 year.
For the whole of 2021, not even a pesewa has been paid to the DACF. We have been informed that a release letter was issued for the first quarter for the amount of GHS434,291,958.21. But no money has been paid to the DACF as of today. Therefore, arrears have piled up for 2019, 2020 and 2021.
The consequence of all this is that the DACF is unable to release funds to the Metropolitan, Municipal and District Assemblies (MMDAs) for one complete year for their operations.
We are calling on the Government to determine the monies due to the DACF within a maximum of One Month after the end of each quarter and accordingly release the same to the DACF.
If Government does not heed our calls, we serve notice that we will head to Court again very soon.
By: Stella Annan | myactiveonline.com Twitter @activetvgh
