The Institute of Economic Affairs (IEA) research has shown that professional incompetence at the district assembly levels continues to cost the nation billions of cedis through misappropriation of the district assemblies common fund.

The IEA findings, which were based on the Auditor General’s report, named Greater Accra and the Volta regions as regions with the highest recorded cases of financial malfeasance. While Volta recorded misappropriation of $79,883.90 in 1993 alone, Greater Accra’s malpractice cost $511,543.35 in 1994.

Prof Bartholomew Armah, a senior economist at the IEA, who disclosed this at a policy forum held at the institute in Accra on Wednesday said almost 30 per cent of Brong Ahafo region’s revenue was siphoned into “dark abyss of malfeasance” in 1994, while 15 per cent of the Western Region’s revenue suffered a similar fate.

The study, which covered the period from 1994 to 1996, identified the key characters of financial mismanagement at both the district and regional levels.

At the regional level, it identified the Brong Ahafo region as bearing a disproportionate burden of financial mismanagement although in absolute value terms, the Ashanti region suffered one of the heaviest losses due to financial malfeasance, the IEA said.

Prof Armah said key areas of financial impropriety include misappropriation of funds, suppressed value books, outstanding revenue and misapplication of funds.

But Capt Nkrabea Effah-Dartey (rtd), deputy Minister of Local Government and Rural Development, debunked the study saying the IEA’s statistics is six years old and does not reflect the current realities.

He told The Ghanaian Chronicle: “The fact that Volta and Greater Accra regions had the total highest absolute malfeasance is six years history for us now. I believed those Auditor General’s reports were released far back in 1996 or thereabout and that Parliament at the time may have worked on them.

“I cannot be too sure on this matter,” he said, “but at least for us now the Auditor General’s report which he ought to have referred to, to give a greater balance and fair picture were not referred to. His latest statistics now is 1996 and I think that is a bit historical.”

However, Prof Armah maintained that the findings still reflect the realities of today because the same problems still exist. He told the paper, “Although, maybe the quantity of malfeasance may have changed, the issues that relate malfeasance have not.

“If you look at the 2000 report today, you will find that suppressed value books is a major area and that the areas I pointed out in the discussions are the same areas we still have malfeasance.”

The District Assembly Common Fund was introduced in 1994 to support the revenue base of the various assemblies. By constitutional provision (Article 252 of the 1992 Constitution) not less than 5 per cent of total government revenue must be paid into the fund in quarterly instalments.

The Ministry of Finance on the basis of revenue projections for the upcoming year, determines the statutory quantum of disbursement to the Common Fund. Prior to the end of the first quarter of the year, the Administrator of the common fund submits a formula to Parliament for sharing the fund.

Following parliamentary approval, the district level allocations are computed on the basis of the formula. But, according to Prof Armah, since the inception of the District Assembly Common Fund law, in July 1993, disbursements have not only fallen short of the stipulated amount but have also been characterised by delays in both stages of the release.

These, many participants at the forum identified as some of the basis of the mismanagement at the district levels. Prof Armah again told the paper that the only way to minimize corruption at the district and regional levels is to enforce compliance with financial management rules by vigorously prosecuting offending officials and holding district chief executives accountable.