Financial resource mobilization for local development: a study of Techiman District Council

Successive governments in Ghana have been attempting to decentralise political and administrative power to local government institutions. This is evidenced by the various reforms that local government has mergence in the country since colonial times. This attempt has boon enhanced by the promulgation other Local Government Law (PNDC 207), 1988 which focus the basis of the present Government’decentra1ization effort. By this law, the District is the basic unit of administration. District Assemblies, under this law, will perform administrative functions as well as act as catalysts or the development of their areas. The responsibilities entrusted to these bodies are enormous but the means of achieving thorn is limited. Limitations in manpower (skilled), material and financial resources are paramount, but are essential ingredients for their efficient and effective performance. The major problems many of those local bodies face including Techiman District, is how to generate sufficient financial resources for the accomplishment of their entrusted tasks including the provision of amenities for the welfare of their people. Problems of inadequate financial resources are a result of several interrelated factors but broadly include poor revenue collection system and the mismanagement of available funds. To be able to diagnose the real causes of inadequate financial resources of the Techiman District Council an in depth analysis of the existing and. potential sources of finance of the Council was undertaken; formal and informal interviews woo conducted, with a cross-section of the district’s population including public servants in the council and. other departments, and local residents to get first hand information on the district’s development problems and potentials. The revenue sources and eporij1jt pattern as well as the processes and relationship between planning and budgeting were examined to assess their adequacies for increased financial resource mobilization. The major findings of the study include the following:- — the District Administration has limited control over line agencies in the district, the result being poor integration and co-ordination, and the duplication of effort. — Techiman District abounds in both physical and human resources which can ho exploited for overall district development. Skilled personnel is however inadequate especially in the District Council. — The efforts of the Council are supplemented by Development Committees of’ the various settlements. — Planning is not done in the district, that is, perspective and. medium term plans which will provide a. framework for short-term action, are unknown. As a result, the selection of projects is adhoc. -Composite budgeting in the district is meaningless as its execution is soctoral without any co-ordination. — Only financial auditing is practised in the district, basically to - ascertain whether spending is within prescribed procedure, without any regard for performance auditing. — Tax administration is generally poor as it is characterised by under-collection of estimated targets. Tax administration system is shrouded with several problems including the misconduct of revenue collectors such as underin7oicing and misappropriation; unskilled revenue staff; unwillingness of the people to honour their tax obligations; the lack of reliable nominal rolls and tax registers. — The ratio between administrative and development expenditure is 87.0:13.0 per cent in favour of administrative expenditure at the expense of development. — There is poor expenditure control by the Council as it is characterised mainly by overspending of estimated targets. This is more striking in the area of administrative recurrent costs. Attempt has boon made to recommend ways of improving upon the financial resource position of the Council. Those are basically strategies for improving the present tax administration system, and also the development of potential revenue sources.

Source: KNUST