MMDCEs urged to ensure strict compliance with the Financial Management Act

Mr. Ken Ofori-Atta, Minister of Finance has asked Metropolitan, Municipal and District Chief Executives (MMDCEs) to ensure strict application of the Integrated Financial Management Information System (GIFMIS) in all financial transactions, to enhance accountability and transparency.

The Minister cautioned Metropolitan, Municipal and District Assemblies (MMDAs) to desist from procuring and using systems and software not approved by relevant institutions because such acts contravened Section 25(6) of the Public Finance Management (PFM) Act, 2016, Act 921.

Mr. Ofori-Atta said this in a statement read on his behalf at this year’s Composite Budget Hearing of MMDAs in Accra.

“It has come to my attention that some key officials involved in the financial management of some MMDAs have not been using the GIFMIS for the processing of financial transactions, accounting and reporting as required,” he said, adding, that failure by the Assemblies to strictly adhere to the financial management act would result in sanctions.

The hearings, instituted in 2011, forms part of the fiscal decentralization reforms and meant to inform the public about the activities of the MMDAs, in fulfillment of Regulation 17 (3) of the PFM Regulations, 2019, LI 2378.

Mr. Ofori-Atta urged MMDAs to adopt innovative and strategic ways to increase their internally generated funds, saying “Our decentralization process cannot continue with our traditional methods of revenue mobilization and maximize our revenue potential without the use and adoption of technology in recent times of Ghana Beyond Aid.”

The Finance Minister explained that the outbreak of the COVID-19 pandemic had impacted negatively on the country’s economy, prompting the Government to revise the 2020 macroeconomic indicators.

He said prior to the outbreak of the pandemic, the country’s economic indicators and performance pointed towards a path of sustained, consolidated, and robust growth, with an overall Gross Domestic Product (GDP) growth of 6.5 percent, end period Inflation of 7.5 percent, and an overall budget deficit of 4.8, in 2019.

“Fiscal performance from January to June 2020, indicated a lower than anticipated revenue performance and a higher than expected expenditures prompting a revision of the 2020 macroeconomic indicators as follows: Revised overall GDP growth of 0.9 percent, Inflation of 11.1 percent and overall budget balance of 11.4 percent of GDP, a breach of the threshold of the Fiscal Responsibility Act of 5 percent of GDP, thus, compelling suspension of the Act,”.

Mr. Ofori-Atta said initiatives such as the “HR-Capital Manager” had been deployed to help manage the human resources to facilitate accurate estimation of the country’s Compensation of Employee budget, to free fiscal space for other socio-economic development.

He urged MMDAs to ensure strict adherence to all the guidelines on recruitment, replacement, and the elimination of “ghost names” to save the country’s purse from corrupt activities.

Mr. Ishmael Ashitey, the Greater Accra Regional Minister, entreated the MMDCEs and budget committees of the MMDAs to ensure that adequate funds were allocated for social service, infrastructure delivery and management, and local economic development in their 2021 Composite Budget to facilitate local-level growth.

He said as part of measures to deepen transparency and accountability at the local level, the Regional Coordinating Council would hold periodic workshops for budget officers, finance officers, planning officers, and internal auditors on the revised PFM template to enhance their work.