DISTRICT ASSEMBLIES COMMON FUND
In this session, we will discuss the functions and composition of the District Assembly, duties of members and administration and supervision of the District Assemblies Common Fund.
let start …
Objectives
By the end of this session, you should be able to:
- a) identify a District Assembly
- b) describe the District Assembly Common fund
- c) describe the functions of the District Assembly Common Fund Administrator
- d) prepare the accounts of the common fund
Now read on…
Introduction
A District Assembly is a body corporate with perpetual succession and a common seal and may sue and be sued in its own name. it has the power for the discharge of any of its functions to acquire and hold movable or immovable property, to dispose of such property and to enter into any contract or other transaction.
READ ALSO: FINANCIAL REPORTING IN CENTRAL GOVERNMENT
Functions of the District Assembly
Before we move on let us find out : What is common fund
A District Assembly exercises political and administrative authority in the district, provide guidance and supervise the other administrative authorities in the district.
A District Assembly shall also perform the following functions.
- a) Responsible for the overall development of the district and shall ensure the preparation and submission through the regional co-coordinating council of development plans of the district to the National Development Planning Commission for approval, and of the budget of the district related to the approved plans to the Minister responsible for Finance
- b) Performing any other functions provided for under any other enactment
- c) Initiating, sponsor or carry out studies that are necessary for the performance of a function conferred by the constitution or by any other enactment.
- d) Responsible for the development, improvement and management of human settlements and the environment in the district
- e) Responsible in co-operation with the appropriate national and local security agencies, for the maintenance of security and public safety in the district.
- f) Initiating programs for the development of basic infrastructure and provide municipal works and services in the district
Composition of the District Assembly
In accordance with article 242 of the Constitution, a district Assembly shall consist of
The District Chief Executive
- b) One person from each electoral area within the District elected by universal adult suffrage in accordance with Regulations made for the purpose by the Electoral Commission
- c) The member or members of parliament from the constituencies that fall within the areas of authority of the District Assembly, except that member or those members shall not have a voting right. Any other persons not exceeding thirty per cent of the total membership of the Assembly appointed by the President in consultation with the traditional authorities and any other interest groups in the district
Duties of Members
A member of a District Assembly in accordance with the local government Act 1993 shall, as appropriate
- Actively participate in the work of the sub-committees of the executive committee
- Bring to bear on a discussion in the Assembly the benefit of the members’ shill, profession, experience or specialized knowledge.
- Maintain frequent liaison with organized productive economic groupings and any other persons in the district and take part in communal and development activities in the district.
- Present the views, opinions and proposals of the District Assembly
- Draw attention in general debate to national policies which are relevant to the subject under discussion.
Presiding member
In accordance with article 244 of the Constitution, the presiding member of a District Assembly shall be elected by the Assembly from among its members. The District Chief Executive or a Member of Parliament is not qualified to be elected as the presiding member. The presiding member shall be elected by at least two-thirds majority to the total number of the members of the Assembly. The presiding member shall hold office for a term of two years and is eligible for re-election. The presiding member shall convene and preside over meetings of the Assembly and perform any other functions prescribed by law.
District Chief Executive
The District Chief Executive for each district shall be appointed by the President with the prior approval of not less than two-thirds majority of the members of the District Assembly present and voting at the meeting.
- The District Chief Executive shall be the chairman of the executive committee of the District Assembly. The District Chief Executive
- Shall preside at meetings of the executive committee of the District Assembly and in the absence of the District Chief Executive a member of the Executive Committee elected by the members present from among themselves shall preside.
- Be responsible for the day-to-day performance of the executive and administrative functions of the District Assembly
- Be responsible for the supervision of the District Assembly
- The District Chief Executive shall be the chief representative of the Central Government in the district.
Executive Committee
The executive committee shall consist of not more than one-third of the total number of the members of the Assembly elected by the members from among themselves. The executive committee of a District Assembly shall perform the executive and coordinating functions of the District Assembly. An executive committee shall
- Develop and execute approved plans of the units, area and towns and sub-metropolitan districts within the area of authority of the District Assembly.
- Coordinate plans and programs of the sub-committees and submit these as comprehensive plans of action to the District Assembly.
- Oversee the administration of the district in collaboration with the office of the District Chief Executive.
- Implement resolutions of the District Assembly
District Assembly Common Fund (DACF)
The District Assembly Common Fund is established by the District Assembly Common Fund Act 1993, (Act 455) under Article 242. The purpose of setting this fund is to provide resources to support the developmental activities of the local government. It is a fund created out of the consolidated fund to channel resources from the central government to the local governments for development.
The District Assemblies’ Common Fund (DACF) is a pool of resources created under section 252 of the 1992 constitution of Ghana. It is a minimum of 5% of the national revenue set aside to be shared among all District Assemblies in Ghana with a formula approved by Parliament. It is a Development Fund which enables the use of the nation’s wealth throughout Ghana to the benefit of all citizens.
Purpose of the DACF
- a) The Fund is to ensure equitable distribution of the national resources for the development in every part of Ghana. b) To Improve Housing Schemes.
- c) To support sanitation management
- d) It is to strengthen decentralization and to promote Sustainable self-help development communities. e) To improve upon primary health care delivery in all part of Ghana
- f) It is to improve the country’s educational facilities, and to ensure quality education g) The Fund support Community policing.
Sources of money into the fund
The District Assembly Common fund is financed from the following sources:
- a) A minimum of 5% of total tax revenue is transferred quarterly into the fund.
- b) Income from investment of the fund
- c) Donations and Grants
2.8.3 Expenditures Charged on the fund
- a) Disbursement to MMDAs/MPs
- b) Disbursement to RCCs
- c) Direct expenditures on behalf of MMDAs (reserves)
- d) Administrative expenses directly related to funding administration (audit fee, bank charges etc.)
Approved areas of spending the share of DACF by the MMDSs:
- a) Economic Ventures(Energy, Markets, Agriculture, Services roads etc.
- b) Social services(Education, health, Water, Sports and Recreation, Self-help projects, Educational Activities etc.)
- c) Administration (capacity building of DA staff and Assembly members, Accommodation, office Equipment etc.
- d) Environment(Sanitation, Disaster management)
- e) MPs common fund
Administration of the District Assembly Common Fund/ Functions of the Administrator
The fund is administered by the DACF Administrator appointed by the president. The DACF Administrator has the following mandatory functions:
- a) Propose formula annually for the allocation and distribution of the common fund to the MMDAs
- b) Allocate and distribute the common fund quarterly based on the approved formula to the various MMDAs
- c) Report in writing to the MOF on how the fund was distributed and utilized by the various MMDAs; and
- d) Perform any other functions required by the President of the Republic
Benefits of the District Assembly Common Fund (DACF)
- a) The fund aims at creating jobs for all through programmes such as cottage industries.
- b) It seeks to get more people to gain access to improved shelter through the housing.
- c) Through the fund, health facilities are expanded and improved to make health delivery accessible to many people
- d) Through the fund numerous school buildings and structures have been constructed for the increasing needs of the population.
- e) The fund encourages and supports communities that make effort to initiate their own development projects (Community Initiated Programme).
Challenges of the Administration of the DACF
- a) Delay in the release and disbursement of the fund to the MMDAs
- b) Government interference in the allocation and disbursement of the fund
- c) Inadequacy of funds
- d) Misappropriation and financial malpractices at the MMDAs level
- e) Over-reliance on the fund by some district assemblies. Retarding innovative financing.
Financial Report by the DACF Administrator
The Administrator of the common fund is obliged to submit to parliament, an annual report on the activities undertaken during the preceding fiscal year. The report should include information on the manner in which the monies lodged in the common fund has been distributed and the report of the Auditor-General on the accounts
The financial report of the common fund is basically made up of Income and Expenditure Account and then a statement of financial position showing the financial state of the fund.
ILLUSTRATION
The following trial balance was extracted from the District Assembly Common Fund as at 31st December 2017
District Assemblies Common Fund Act
ACT 455, DISTRICT ASSEMBLIES COMMON FUND
Arrangment of Sections
Establishment of the Fund
1. The District Assemblies’ Common Fund
2. Distribution to District Assemblies
3. The Administrator’s Appointment
Qualifications of the Administrator
5. Office tenure and conditions
6. 6. Removal of the Administrator
Functions of the Administrator
Financial Provisions
8. Financial investment in the Fund
9. Financial Liability of the District Assemblies
10. Staff of the Fund:
Accounts and audits
12. Expenses of the Administrator
13th fiscal year
Miscellaneous
14th Annual Report
15. Complaints.
16. Adaptation and modification of existing enactments.
17. Interpretation.
ACT 455
(1) DISTRICT ASSEMBLIES COMMON FUND ACT OF 19931
An Act to provide for the District Assemblies’ Common Fund, the appointment of the District
Assembly Common Fund Administrator, to provide for the functions of the Administrator and
related matters.
Establishment of the Fund
1. The District Assemblies’ Common Fund
(1) The District Assemblies’ Common Fund established by article 252 of the Constitution consists of
The money allocated by Parliament under section 2 of this Act and the interests and dividends accruing thereon
as a result of the fund’s investments
(2) The allocation made by Parliament under Section 2 of this Act shall be paid into the Fund in the following manner:
quarterly instalments
(3) The money accruing to the District Assemblies in the Fund is divided among the Districts.
Assemblies on the basis of a formula approved by Parliament.
For the purposes of determining the formula under subsection (3), the
Administrator appointed
Within six months of the appointment, and then within three months after that
submit proposals to Parliament for the formula for the
For Parliament’s consideration
(5) Nothing in this section or any other law prohibits the government or any other body or person from
making grants-in-aid to the District Assembly.
2. Allocations to District Assemblies
Parliament shall annually allot not less than 5% of the Republic’s total revenues to the
District Assemblies for development, in accordance with clause (2) of Article 252 of the Constitution.
3. The Administrator’s Appointment
Clause (4) of Article 252 of the Constitution says that the President, with the help of other people, will make decisions.
The District Assemblies, with the approval of Parliament, shall be appointed by the Council of State.
common fund administrator.
Qualifications of the Administrator
If a person is not qualified to be appointed as Administrator, that person should not be appointed.
(a) is not a citizen of the United States;
(b) has been adjudged or otherwise declared,
(i) is bankrupt under Republic law and has not been discharged, or
(ii) to be of unsound mind or be detained as a criminal lunatic under a law in force in the
Republic; or
(c) has been found guilty.
(i) for committing a high crime under the Constitution, high treason, treason, or an offense
Or involving the security of the Republic, fraud, dishonesty, or moral turpitude, or
(ii) for any other offense punishable by death or imprisonment for a term of not less than ten years
more than a decade;
D: Is someone who has been found by a commission or a committee of inquiry to be incompetent to hold public office. Or, if that commission or committee of inquiry found that while that person was a public officer that person acquired assets unlawfully or defrauded the Republic or misused or abused his or her position, and the findings have not been overturned on appeal or judicial review.
(e) has not paid the relevant taxes or made satisfactory arrangements for their payment to the appropriate authority;
(f) is serving a death sentence or any other form of incarceration imposed by a court; or
(g) is otherwise disqualified by law.
5. Office tenure and conditions
(1) The Administrator shall serve for a term of four years and shall be eligible for reappointment.
(2) the Administrator’s salary and allowances, as well as the facilities and privileges available to him or her
This shall be determined by the President in accordance with article 71 (1) of the Constitution.
6. 6. Removal of the Administrator
The Administrator may resign from office by writing an address to the President, and the President may
For a just cause, request the Administrator to resign from the office or remove the Administrator from the office.
Functions of the Administrator The Administrator has the following functions:
(a) to propose a formula annually for the distribution of money in the fund for approval by
Parliament;
(b) to administer and distribute the money paid into the Fund among the District Assemblies in
In accordance with the formula approved by Parliament,
(c) to report to the Minister in writing on how allocations from the Fund to the District were made.
Assemblies have been utilised by the District Assemblies, and
(d) to carry out any other duties assigned by the President.
Financial Provisions
8. Financial investment in the Fund
Until the money in the fund is distributed, the Administrator may invest all or a portion of the money in the fund in the securities or in the manner approved by the Minister in consultation with the Minister responsible for Finance.
9. Financial Liability of the District Assemblies
The Minister responsible for Finance shall, in consultation with the Minister, determine the category of expenditure of the approved development budget of the District Assemblies that shall each year be met out of amounts received by the District Assemblies from the Fund.
ten.
Fund personnel
(1) In accordance with Article 195 of the Convention on the Rights of the Child, the President of the Fund shall appoint
The Constitution, the staff that the Administrator may require for the effective performance of the functions of
the Administrator.
(2) The Fund’s employees are public servants.
(3) The President may delegate the authority to appoint under this section to the Minister or to the
Administrator
Accounts and audits
(1) The Administrator is required to keep proper books of account and records in relation to the
The accounts of the Fund are in the form approved by the Auditor-General.
(2) At the end of each fiscal year, the Fund’s books of account shall be audited by the
The Auditor-General
(3) The Administrator shall pay the audit fees that the Administrator and the auditor have agreed upon.
The Auditor-General may agree.
12. Expenses of the Administrator
(1) Subject to subsection (2), the Administrator’s expenses incurred as a result of this Act are a charge.
on the Consolidated Fund.
(2) The Fund shall be subject to charges, including bank transfer and interest charges.
13th fiscal year
The Fund’s fiscal year shall be the same as the Government’s fiscal year.
Miscellaneous
Annual Report 14
Within six months after the end of each financial year, the Administrator shall submit to Parliament a report of the activities of the Fund during the preceding financial year, including the manner in which the money lodged in the Fund has been distributed and the report of the Auditor-General on the accounts.
15. Complaints
A person or a district assembly who is dissatisfied with the performance of a function’s administrator
A person who is entitled to file a complaint under this Act may do so to the Commission on Human Rights and Administrative Justice.
16. Adaptation and modification of existing enactments.
The Local Government Act, 1993 (Act 462) and any other law that was in place when the act was passed.
The coming into force of this Act shall have effect subject to the modifications necessary to give effect to this Act.
17. Interpretation
In this act, unless the context otherwise requires,
“Administrator” means the District Assemblies Common Fund Administrator provided for under
Article 252 of the Constitution
An “auditor-general” includes an auditor appointed by the Auditor-General;
“Court” means a court of competent jurisdiction;
A “District Assembly” includes a Metropolitan and a Municipal Assembly;
“Fund” means District Assemblies’ Common Fund;
“Minister” means the Minister responsible for Local Government;
“Total revenue” refers to all revenue collected or accruing to the government that is not foreign revenue.
loans, grants, non-tax revenue, and revenues already collected by or for District Assemblies under an
Enactment
Endnotes
1 (Footnote-Popup)
1. The Act was assented to on July 6th, 1993.
Legal Reference Services Copyright-2003, All Rights Reserved.
Trial Balance as at 31st December 2017
| DR | CR | ||||
| GHS | GHS | GHS | |||
| Investment | 2,700.00 | ||||
| bank | 191,300.00 | ||||
| investments income | 1,300.00 | ||||
| common Fund | 367,500.00 | ||||
| Petty Cash | 700.00 | ||||
| Provision for Depreciation | 2,000.00 | ||||
| Depreciation Expense | 200.00 | ||||
| Utility | 800.00 | ||||
| Property, Plant and Equipment | 20,000.00 | ||||
| Disbursement to MMDA: | |||||
| Agona West DA | 22,000.00 | ||||
| Dangme West DA | 26,000.00 | ||||
| Biposo MA | 17,000.00 | ||||
| Kibi DA | 32,000.00 | ||||
| Gomoa Metro | 20,000.00 | 117,000.00 | |||
| Disbursement to RCC: | |||||
| Kumasi | 3,000.00 | ||||
| Accra | 3,000.00 | ||||
| Cape Coast | 3,000.00 | ||||
| Takoradi | 3,000.00 | 12,000.00 | |||
| 370,800.00 | 370,800.00 | ||||
Additional Information:
The balance of the Common Fund as at 1st January 2017 was GHS 67500
Required
- Prepare the statement of Financial Performance of the administrator for the year ended 31st December 2017
- Prepare the Statement of Financial Position of the administrator as at 31st December 2017
Solution
District Assemblies Common Fund Statement of Financial Performance for the year ended 31st December 2017
| INCOME | GHS | GHS |
| Investment Income | 1,300.00 | |
| Common Fund Received | 300,000.00 | |
| 301,300.00 | ||
| EXPENDITURE | ||
| Depreciation | (2,000.00) | |
| Utility | (800.00) | |
| Disbursement to MMDA | (117,000.00) | |
| Disbursement to RCC | (1,200.00) | (131,800.00) |
| Excess Income Over Expenditure | 169,500.00 | |
| Fund Balance b/f | 67,500.00 | |
| Fund Balance c/f | 237,000.00 | |
District Assemblies Common Fund Statement of Financial Position as at 31st December 2017
| GHS | GHS | |
| Property Plant and Equipment (20000-2000) | 18,000.00 | |
| Investment | 27,000.00 | |
| 45,000.00 | ||
| Current Assets: Bank Balance | 191,300.00 | |
| Pretty Cash | 700.00 | 19,200.00 |
| 237,000.00 |
summary
This session presented an overview of the District Assemblies concept in terms of functions of District Assemblies, sources of revenue and associated problems with raising these revenues.
The session further looked at sources of amounts of money into the common fund and expenditures charged on the fund, the functions of the DACF Administrator, benefits and challenges of the DACF.
Self-Assessment Questions
Exercise
- State Three (3) ways by which the District Assemblies are financed.
- What is a common fund? Describe four (4) functions performed by the District Assembly Common Fund Administrator.
- State Four challenges facing the administration of the common fund and suggests four ways of dealing with such challenges.
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