The Constitution of the Republic of Ghana, 1992, provides for the establishment of the District Assemblies Common Fund [DACF].
Article 252(2) “Subject to the provisions of this Constitution, Parliament shall annually make provision for the allocation of not less than five percent of the total revenues of Ghana to the District Assemblies for development; and the amount shall be paid into the District Assemblies Common Fund in quarterly instalments”
According to Section 2 of the District Assemblies Common Fund Act 1993 [Act 455] Parliament annually allocates a certain percentage of the total revenue of Ghana to District Assemblies for their local level development. A portion of the Fund is allocated to Members of Parliament (MPs) to be used in their various constituencies.
Mr Kennedy Kwasi Kankam, the former Nhyiaeso MP is alleged to have given instructions for an amount of GH¢500,000 to be transferred from his share of the District Assemblies Common Fund (DACF) to absa, which he shared as loans to 430 people in his constituency in 2020.
In a management letter on the District Assemblies Common Fund (DACF) and other statutory funds of Kumasi Metropolitan Assembly signed by the ashanti Regional Director Alhassan Mahama, the Auditor-General said that “upon the instructions of the former Member of Parliament for Nhyiaeso (Hon. Kennedy Kwasi Kankam) in collaboration with erstwhile Finance Officer (Mr Daniel Kofi Kamkam and Coordinating Director (Mr Samuel Donkor) GH-?500,000.00 was transferred in May 2019 from the MPs Constituency Labour Project Fund and Social Investment Fund to Barclays Bank Ghana Limited (currently Absa Bank Ltd.), Kroform Branch for onward disbursement to 430 persons of his constituency on loan fully recoverable by August 2020”
The money was the MPs share of the District Assembly’s common fund earmarked for the developmental project. The Auditor-General alleges that the money has gone out as a loan but no recoveries have been made.
According to audit report which covered January to December 2020, the Auditor-General’s “interaction with the Former Barclays Bank Manager, Krofrom Branch (Ms Ivy Agbemadzo) who signed a Memorandum of Understanding prepared by KMA Lawyer Patrick Adu-Poku and dated 26th April 2019 committing the Bank to do the recovery of the loan confirmed that no recoveries had been done as at 20th January 2021 thus exposing the Assembly to a high risk of losing the GH?500,000.00, which could have funded projects to the benefit of the entire community,” the report noted.
The report further indicates that the management of the Assembly has not expressly requested Absa Bank to perform its contractual obligation of recovering the loans. The Bank is reported to have deducted a service charge of GH?22.50 on each of the 430 persons totalling GH?9,675.00.
The report recommended that Kankam and the officials involved should “take steps to recover the amount into the KMA Member of Parliament for Nhyiaeso’s Common Fund account”.