The Rural Initiatives for Self-Empowerment Ghana (RISE-Ghana) has formally recommended an increase in the administrative expenditure cap for Ghana’s Metropolitan, Municipal, and District Assemblies (MMDAs). The organisation proposes raising this limit from 5% to 10% of their District Assemblies Common Fund (DACF) allocation.
This proposed change aims to address recurring financial irregularities within MMDAs, which have been consistently highlighted in Auditor-General reports. The current 5% cap on administrative expenses is seen as a significant barrier to effective local governance and proper oversight. Inadequate funding for administrative tasks has directly contributed to these financial issues.
The call for this increase fits into Ghana's ongoing efforts to improve public financial management and local governance. The District Assemblies Common Fund is a crucial financial mechanism for local development, providing resources for infrastructure, sanitation, health, and education projects nationwide. However, the effectiveness of these investments depends heavily on the administrative capacity of the assemblies. Previous Auditor-General reports have repeatedly detailed widespread irregularities. These issues include poor cash management, procurement breaches, contract mismanagement, and payroll administration failures across local assemblies.
A statement from RISE-Ghana’s Executive Director, Awal Ahmed Kariama, explains the rationale. Kariama stated, “The continuous capping of oversight administrative expenditure for MMDAs at 5% of their District Assemblies Common Fund allocation is weakening local governance systems and contributing to the recurring financial irregularities repeatedly identified by the Auditor-General.” This statement underscores the direct link between administrative underfunding and accountability deficits. The Auditor-General documented MMDAs’ irregular management and use of the DACF, reporting over GHS 452 million in such irregularities between 2020 and 2024. The figure surged to GHS 205.9 million in 2024 alone, indicating a worsening trend.
This proposal carries significant implications for local government finance and accountability. Increasing the administrative cap would enable MMDAs to invest more in critical functions like project monitoring, record keeping, procurement compliance, and financial oversight. These functions are essential for ensuring that public funds are used efficiently and transparently. Moving forward, Parliament, the Ministry of Local Government, Chieftaincy and Religious Affairs, and other stakeholders will likely engage in discussions regarding this proposal. A positive response could lead to improved governance outcomes and a reduction in the financial irregularities that frequently impact local government institutions across Ghana. This change could also help MMDAs better implement audit recommendations and foster greater public trust.