Policy Objective
To improve funding and financial management of DAs for efficient public service delivery.

Policy measures
a) Ensure the development and implementation of an updated Inter-Governmental Fiscal Framework.The transfer of decentralised functions has not been fully accompanied by sufficient financial resources. A study of the inter-governmental fiscal transfer system will be conducted to assess implementation status and associated challenges, while the Intergovernmental Fiscal Framework (2014-2018) shall be updated and implemented in line with the NDPS (2020-2024) and the PFM legal and regulatory framework. This will be done through streamlining expenditure and revenue assignments as well as fiscal transfers, establishing the right environment for DAs to borrow from the open market and deepening PFM for improved service delivery. Thus, the IGFF will address operational weaknesses of composite budgeting of DAs and the functionality of GIFMIS to improve accounting, financial reporting and performance auditing. Within the space of revenue assignment, the on-going processes of establishing fiscal cadastral by DAs for IGF will be deepened. This will include better revenue projection and fiscal efforts than current practices. The fiscal databases will cover revenue items including property valuation and revaluation. Thus, an inter-sectoral cooperation approach will be adopted to establish credible fiscal databases for use by DAs and central agencies like the Ghana Revenue Authority, Ghana Water Company and the Electricity Company of Ghana. This will contribute to automating the revenue collection systems of DAs such as District Local Revenue software (dLRev) in collaboration with the Ministry of Communication and National Communication Authority. By encouraging DAs to improve their IGF (which will reduce their dependency on central government transfers), alongside efforts to achieve LED (job creation and income growth), the NDPS will be localising the ‘Ghana beyond Aid’ agenda.

b) Strengthen PFM coordination and capacity within and between central government and local governments to improve efficiency and accountability.

Current PFM arrangements and capacities are weak. To address this weakness, the strategy is to strengthen PFM systems and processes of DAs, RCCs and relevant MDAs. A sub-national PEFA assessment will be conducted to contribute to the national PFM reform strategy. Furthermore, capacity of DAs and RCCs will be built on the financial, legal and regulatory frameworks for improved financial accountability and transparency.