MMDAs tasked to explore alternative funding sources 

Mr Frederick Danquah, a local governance researcher has called on government to encourage the Metropolitan, Municipal and District Assemblies (MMDAs) to explore alternative sources of funding for their operations.

He said the government should provide the enabling environment and build the capacity of the MMDAs to go out and explore other forms of funding to take them off government’s subvention.

However, government has said it is committed to deploying the Ghana Integrated Financial Management System (GIFMIS) to the 156 Metropolitan, Municipal and District Assemblies (MMDA) by March 2018, to crack down on financial malpractices and wasteful public spending.

The GIFMIS implementation, which started in 2012, has been deployed to 60 MMDAs to improve efficiency and achieve comprehensive and transparent management of public funds.

Mr. Kwaku Kwarteng, Deputy Minister for Finance, said this at a stakeholders’ forum in Accra that brought together representatives from the Local Government Service Secretariat; Metropolitan, Municipal District Chief Executives; and Presiding Members among others.

The forum was aimed at discussing the roadmap and major activities to ensure a smooth implementation, and also to establish stronger dialogue with stakeholders at the Ministries, Department and Agencies and MMDAs.

Meanwhile, Mr Danquah has said assemblies have the potential to source for funds in various forms but the challenge has to do with the regulatory system being put in place by government.

He said initially, the limit to borrow money was GHc2000.00 but with the introduction of the public financial management system, assemblies could borrow beyond that amount but only with approval from the Minister of Finance.

Mr Danquah said government did not see assemblies as  viable entities and they also faced the challenge of not putting their accounting systems right with their reporting system not the best.

He said MMDAs have the potentials to explore but these potentials have not been identified, just because they were satisfied with the traditional forms of funding from the Central government.

“MMDAs have been getting their source of funding from government on regular basis, so they do not see any need to go beyond what they used to earn but if they are challenged to embark on alternative source of funding, they will,” he added.

But, Mr. Kwarteng explained that implementation of GIFMIS is in line with government’s efforts to create a more business-friendly environment and invariably harness better opportunities for the country through improved fiscal discipline, containing the deficit, and eliminating corruption as part of concerted efforts to ensure good governance.

The GIFMIS, he indicated, is meant to replace all stand-alone legacy financial management systems at the MDAs and MMDAs, with the possibility of interfacing with other systems that need to be maintained.

This is to assist in achieving improved comprehensive, transparent and effective management of public financial resources.

“There is a need to review the progress of work to ensure that all policy, administrative, operational and technical issues are being addressed effectively to ensure an effective implementation of the IGFS on the GIFMIS.

“I encourage MDAs and MMDAs to accept the GIFMIS and adopt it to process financial transactions – including Internally Generated Funds transactions, which are exclusively in your domain, and to generate reports accordingly. We all have a role to play in making this a success,” he said.

The Controller and Accountant General, Mr. Eugene Ofosuhene, explained that the last two decades have seen an enormous transformation in public financial management, with a marked shift from manual to electronic systems.

He said it is in line with such developments that government entreats management of MMDAs to accord the team the needed cooperation to ensure a successful rollout.

“I dare say that strict adherence to the tenets of GIFMIS will lead to the elimination of corruption in MDAs and MMDAs in the country.

“I am convinced that successful implementation of GIFMIS throughout all MDAs and MMDAs in the country, in line with the Public Financial Management Act 621(2016), will go a long way to reduce external queries and render the Public Accounts Committee of Parliament redundant as regards public financial controls and management,” he said.

Dr. Nana Ato Arthur, Head of the Local Government Service, said the benefit of the GIFMIS cannot be over-emphasised.

The system, when fully implemented, will address problems concerning the lack of integration between budget preparation and execution systems, inadequate budgetary controls, and lack of interface between various public finance management systems across MDAs and MMDAs among others.

“Another key milestone ahead of us is to implement the electronic funds transfer and automatic bank reconciliation for public funds, fixed asset modules, among others.

“The success of all these interventions will depend on our solid commitment. It is our wish that we not only speak but demonstrate a high level of commitment to the process,” he indicated.

Source: Adnan Adams Mohammed





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