Wednesday, May 16, 2012


In my earlier submission, I defined Composite Budget as the integration of all the financial plans of decentralized departments into the Budgets of Metropolitan, Municipal and District Assemblies (MMDAs).

Composite Budgeting is an activity to give complete meaning to fiscal decentralization. Composite Budgeting has been on the drawing boards of successive governments since the implementation of the Local Government system derived from PNDC Law 207 of 1988.

This strategic decision taken by the current government became effective 1st January, 2012, as contained in a circular signed by the Minister of Finance and Economic Planning. This political will to implement Composite Budgeting in fulfillment of the promise made last year by the current government is an ample testimony that the current government is not only a listening government, it is also a government that keeps faith with the people. It promised the people of Ghana the increase in the capitation grant and it was fulfilled. The elimination of schools under trees was one of the promises and gradually it is coming into fruition. The distribution of free school uniforms and free textbooks have been implemented. The expansion of the school feeding program has seen the light of day and the massive improvement in infrastructural development has started in earnest. The recent Memoranda of Understanding among Ghana and two companies in the United States of America during the recent visit by the President, his Excellency, Professor J.E.A. Mills for the construction of drains in Accra and the construction of the Western Rail lines are living testimonies. The establishment of the Volta University and a University in the Brong -Ahafo Region are dreams come true . Hopes have been kept alive with the fulfillment of these promises and faith and confidence have been renewed for the current government.

PREPARATION OF WARRANTS: Warrants which are financial documents that carry authority to spend under the approved budget were hitherto prepared in Accra and transmitted through the Regional Directorates of the Controller and Accountant-General to MMDAs. With the new dispensation, Warrants are prepared by MMDAs locally. Metropolitan , Municipal and District Budget Analysts are now directly responsible for the preparation of these Warrants.

By this arrangement these Budget Analysts are now among the key players in the Financial

Administration of the MMDAs .Hitherto the work of these officers were restricted to the preparation of only the SUPPLIMENTARY BUDGETS of the MMDAs. All Warrants prepared are signed by the Metropolitan, Municipal and District Chief Executives (MMDCEs) This is to ensure that the Chief Executive is made aware of how each pesewa is spent under his jurisdiction.

Copies of these Warrants are given to Metropolitan , Municipal , and District Finance Officers (MMDFOs for processing and payment.

ADVANTAGES: The advantages to be derived from the preparation of Warrants at the MMDA level are numerous;.

A. DELAYS ,'Delays are reduced if not eliminated completely. Under the old system, sometimes Warrants for a particular MMDA found their way into another MDA in a different Region .It took time, money and all human resources to correct the anomaly. Payments unduly delayed under such circumstances.


There is now much more collaboration between departments and MMDAs regarding project implementation. Although departments of the MMDAs are under obligation to inform the Assemblies in their quarterly reports and briefings most of them did not adhere to this directive under the old dispensation.

C. CONTROL: The Control function by MMDAs are made stronger under the new system. Under the old system sometimes MMDAs were not aware of how much resource allocations were made to departments for the implementation of programs and projects. The new system provides the opportunity for MMDAs to exercise direct control over these departments of the Assemblies. Duplication of projects are now completely eliminated under this new dispensation and this development accounts for speedy implementation of projects and programs in the MMDAs.

D. DUE DELIGENCE : The new system allows for all processes to be completed before payment is effected .This is good for a better Financial Management System. When a payment system is allowed to go through all the laid down processes perfection is guaranteed and errors are minimized.


With every new system, there are bound to be challenges . The two main challenges imposed on MMDAs by the new system are the engagement of additional staff to assist the Budget Analysts and the additional cost of paper to prepare Warrants for all manner of payments. TO BE CONTINUED .

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