Enhancing efficiency in the financial management at the local government level in Ghana

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Transferring roles and responsibilities to an organisation usually go with the transfer of resources to make that institution work effectively. The transfer of resources to the local level by the central government as part of the decentralisation process came about as a result of the functions that have been assigned to these local government institutions. The transfer of part of the taxes, which were hitherto collected by the central government to the local level and complementing these with extra financial transfer are noble achievement by the central government to enable these institutions perform their roles effectively. It is unfortunate when the local government institutions, which have been assigned by the central government to lead in the development efforts at the local level, mismanage the resources to the detriment of their citizens. The problems facing development administration at the local government level could among others be classified as being political, social, spatial, and environmental. As effective development policy are being formulated to solve these problems through the preparation of comprehensive plans, efforts must be made to enhance efficiency in the financial management, otherwise development is bound to falter. There will be little or no development at the local level as the financial resources are being mismanaged. This work has shown that in some districts the cost of mobilising revenue is even more than the revenue collected. Poor revenue mobilisation at the Assemblies is partly due to over dependence on the external financial transfers (mainly from the central government). Unfortunately, the revenue collected at the local level were utilised for local administration to the neglect of community needs. Ratepayers claimed that the Assemblies were insensitive to their needs. Local government administration must sit up and formulate financial policy that is sensitive to needs of the citizenry by using the taxes mobilised for development. This will not only engender the decentralisation process but also foster good relationship between the citizens and the local government institutions.
A Thesis submitted to the Board of Postgraduate Studies, Kwame Nkrumah University of Science and Technology, Kumasi, in partial fulfilment of the requirements for the degree of Master of Science in Development Policy and Planning, 2000