Parliament must act on financial administration tribunal - Ghanaians are frustrated with the fact that time and again the mismanagement of public funds comes with little accountability. It is easy to see why. Besides the regular anecdotal accounts of misappropriation, year after year, the Auditor-General's reports provide evidence of corrupt activity involving misuse of public funds - often within the same government departments and District Assemblies (DAs). The amounts siphoned from public revenues paints a gloomy picture for the country's long-term economic development. So how can accountability be enhanced?

To begin with, we need to consider the existing framework to ensure accountability in public financial management. Central to this framework is the Auditor-General who is charged under the 1992 Constitution and the Audit Service Act, 2000 (Act 584) to review the accounts and management of public offices. In this respect, the Auditor-General's role is to a large extent limited to audits of government accounts and making recommendations to stem the recurrence of mismanagement.

Currently, the principal body charged with giving 'teeth' to the Auditor-General's reports and recommendations is the Public Accounts Committee (PAC) of Parliament. The PAC has the primary role of scrutinizing the audited public accounts presented by the Auditor-General and proposing remedial measures. The Committee, however, faces challenges in fulfilling its role and the lack of compliance with its recommendations has also been a cause for concern.

Recent efforts by PAC have sought to change this by bringing to account those who openly neglect rules and regulations; the Committee has taken to the road to hold local public sittings across Ghana. During these sittings, officials cited in audit reports and heads of institutions are invited to explain the financial malpractices attributed to their outfits often in the presence of key local stakeholders. In some respects, this naming and shaming process could be a powerful tool. Nonetheless what is evident from the offences detailed, which ranges from non-compliance with procedures and processes in the award of contracts, unauthorised payments and misappropriation of revenue is that checks and balances, particularly at the local government level, remain weak.

Whilst the PAC initiative is laudable, there clearly remains a challenge in ensuring the Auditor-General's reports and the Committee's subsequent recommendations do effectively contribute to better public financial management. One way to achieve this would be to increase the capacity and resources of the PAC. But another crucial initiative is the establishment of the Financial Administration Tribunal (FAT).

Section 66 (1) of the Financial Administration Act, 2003 (Act 654) stipulates the establishment of the FAT - an independent body with responsibility to enforce Parliament's recommendations on the Auditor-General's reports. In theory, this could complement the work of intra-departmental Audit Report Implementation Committees (ARICs) which are charged with enforcing the Auditor-General's proposals, but have struggled to make an impact. In fact ARICs do not exist in a significant number of government institutions and, where they exist, the Implementation Committees sometimes comprise the same officials the Auditor-General has made adverse findings against.

Under the Financial Administrative Act, the FAT has powers to make orders for the recovery of monies or other assets owed to the state. Indeed the Tribunal, which is to be made up of a Justice of the High Court as chairperson, a chartered accountant, and a management accountant or professional valuer, is granted enforcement powers of a High Court. Act 654, however, hands the responsibility for nominating the Tribunal members to the Chief Justice, with the President appointing.

Although over seven years have elapsed since Act 654 was enacted, the Tribunal has not been established. A key reason for this delay is that the Judiciary is, apparently, reluctant to exercise the power to nominate the Tribunal members, as it considers it to be a 'non-judicial' body. We strongly recommend that the Financial Administration law be amended to remove the judicial link. Parliament should be given the responsibility of nominating the Tribunal members.

Sound public financial management is crucial to Ghana's continued development but clearly the current system is not working and a rethink is required. The FAT has the potential to make a significant contribution to accountability, yet currently sits in limbo on the pages of an unimplemented statute. This need not be the case. Its establishment should be a matter of priority.

*The authors are with the Institute of Economic Affairs (IEA)

Dr. Michael Ofori-Mensah and Mr. Lucas Rutherford

Public Agenda/07/10/2011