System-wide failures plague MMDAs financial management – CLGA

By Juliet ETEFE

The Centre for Local Governance Advocacy (CLGA) has flagged deep-rooted, system-wide weaknesses across Metropolitan, Municipal and District Assemblies (MMDAs), warning that persistent gaps in planning, budgeting, procurement and auditing continue to undermine public financial management at the local level.

This follows findings from the 2024 Public Financial Management Compliance League Table (PFMCLT), which showed that only 12 out of 258 MMDAs — representing just 4.5 percent — scored above the 50 percent benchmark nationwide, despite a modest improvement in the national average.

The report, unveiled in 2025, shows that local governance is still grappling with public financial management gaps even as the national compliance average rose to 32.8 percent in 2024, up from 22 percent in 2023.

The advisory noted that local governance is still grappling with public financial management gaps, which stem from weaknesses in planning, budgeting, procurement and auditing.

Weak planning

Under development planning, CLGA identified inadequate documentation of stakeholder consultations during the preparation of Annual Action Plans, with limited evidence of inclusiveness, gender sensitivity and citizen participation.

It further cited weak alignment between Medium-Term Development Plans, Annual Action Plans and Composite Budgets, leading to inconsistencies between approved development priorities and actual spending decisions.

Several assemblies were also found to have overstated implementation achievements without verifiable evidence such as completion certificates, monitoring reports or photographic records, while the absence of documented mid-year action plan reviews constrained effective monitoring and corrective planning.

CLGA warned that these weaknesses weaken results-based planning, undermine the credibility of reported performance, and reduce the effectiveness of development interventions at the local level.

Budgeting and procurement gaps

In composite budgeting, the advisory highlighted the absence of documented stakeholder engagement in budget preparation, lack of mid-year budget performance reviews, and unsigned Budget Committee and Finance and Administration Sub-Committee minutes — raising concerns over governance, accountability and audit assurance. Poor linkage between Composite Budgets, Annual Action Plans, and Procurement Plans was also widespread, contributing to fragmented planning and weak implementation discipline.

Procurement practices were equally criticised, particularly the non-use or limited use of the Ghana Electronic Procurement System (GHANEPS), untimely submission of procurement plans, unsigned Tender Entity Committee minutes, and prolonged delays between pre-award and award stages.

The advisory further noted that limited contract awards to local firms reduce opportunities for local economic development within assembly jurisdictions.

“These gaps increase procurement risks, delay service delivery and expose assemblies to audit queries and value-for-money concerns,” CLGA cautioned in a release signed by its Deputy Executive Director, Gladys G. Tetteh.

Weak controls and delayed audits

On accounting and financial reporting, CLGA observed weak internal control systems, poor segregation of duties among finance officers and internal auditors, unsigned payment vouchers, delays in monthly bank reconciliations and late submission of quarterly financial reports.

According to the centre, these deficiencies compromise financial transparency, heighten the risk of misstatements and weaken public confidence in financial reporting.

Audit performance also remained weak across several assemblies, with untimely submission of statutory audit reports, delayed implementation of audit recommendations, and a high number of administrative and, in some cases, criminal issues recorded in management letters.

CLGA said these trends reflect fragile accountability structures and limit the corrective role of auditing in strengthening public financial management performance.

Reforms

The findings point to deep-seated structural weaknesses in the country’s local government public financial management architecture. In response, CLGA has refined the PFMCLT assessment tool for the 2025 cycle to improve clarity of indicators, strengthen integration across the public financial management cycle, and promote measurable improvements in compliance and performance.

The centre urged assemblies to use the advisory as a diagnostic reform tool rather than a compliance exercise, stressing that addressing the gaps will strengthen fiscal discipline, enhance transparency and improve public confidence in local governance.

“The purpose of this Advisory Note is to help MMDAs understand the key gaps identified in their submissions, support self-assessment and encourage practical improvements to strengthen compliance and efficiency in future assessment cycles,” CLGA stated.

CLGA reaffirmed its commitment to supporting assemblies through dialogue, capacity-building and evidence-based advocacy to strengthen public financial management at the local level.

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