FINANCIAL MANAGEMENT PRACTICES OF THE

CHIEFTANCY: A CASE STUDY OF THE GREATER ACCRA

HOUSE OF CHIEFS

A RESEARCH PROPOSAL TO THE UNIVERSITY OF GHANA BUSINESS SCHOOL

IN PARTIAL FULFILMENT FOR THE REQUIREMENT OF THE AWARD OF A

MASTER OF BUSINESS ADMINISTARTION DEGREE IN

BY

Isaac Kwabena Kruh

 CHAPTER ONE

1.0 Introduction

Traditional authorities occupy an important place in African life, and historically, in the body

politic of Ghana. These authorities embody the preservation of culture, traditions, customs and

values of the African people, while also representing the early forms of societal organisation and

governance. Although traditional authorities represent earlier forms of governance, they have

also been found in contemporary democracies (Ayee, 2006). The existence of traditional

authorities in Ghanaian societies predates colonial periods in the form of chiefs, queens,

soothsayers, youth leaders and leaders of various age-sects. Even though colonialism found

chiefs in particular to be opponents of reforms, they were used to execute the indirect policy in

circumstances such as ensuring law and order, taxation and financial administration (Guri et al

2012).

The framers of the 1992 constitution of the Republic of Ghana, knowing the importance of

traditional authorities, enshrined the independence of the chieftaincy institution and its allied

divisions (Ayee, 2006). The Chieftaincy Act of 2008, Act 759, which is in conformity with the

1992 constitution, makes provisions for chieftaincy processes and procedures to guide the

institution by supporting various houses of chiefs with financial budget from annual budget.

The institution of chieftaincy has displayed extraordinary resilience to political change in the

periods before, during and after colonial rule in many parts of Africa (Odotei & Awedoba, 2006).

Before the inception of colonialism in the then Gold Coast (now Ghana), chiefs performed

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legislative, executive, judicial, financial administration and religious functions (Arhin, 2001;

Odotei & Awedoba, 2006). While maintaining law and order, adjudicating on cases and settling

disputes, chiefs also served as a link between the local Government and the people, the serve as

custodians to the stool lands and Government budget allocated to the community. They have an

apparent responsibility to account for financial allocation to their offices (Awedoba et al, 2006).

This study financial management practices of the Greater Accra Regional house of chiefs at

Dodowa.

1.2 Background of the Study

Financial administration has risen to central position in the talk about effective, efficient and the

current debate that governance has implications for development administration and poverty

reduction in particular has stimulated research for conditions under which traditional governance

could be improved. Crowder (2014) argued that because of the significant roles the institution

remained important instrument in development in Ghana; hence, the creation of regional and

national houses of chiefs under the 1969, 1979 and 1992 Constitutions. Chiefs, therefore,

continue to be very important in the development of their communities and managing financial

assets of their communities. The role of chiefs in local government has not been consistent over

the years. In an attempt to promote people's participation at the grassroots, the PNDC launched

the local government reforms of 1988 and its concomitant decentralisation program. The local

government law (PNDCL 207) was promulgated. This changed the structure of local government

administration in Ghana by introducing the District Assemblies. One result was that chiefs

became accountable to the people they govern. The local government law does appointment of

chiefs as DA members, since the central government power to appoint 30 percent of the DA

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membership. Under the 1992 Constitution, Article 242 (d) makes provision from the Regional

House of Chiefs to serve on the Regional Councils. Historical evidence about the contribution of

chiefs to local governance and development abound; the utility that is likely to be derived from

involving chiefs in local government administration has received extensive consideration. The

Coussey Committee Report on Constitutional Reform had this to say on Chieftaincy in Ghana:

'The whole institution of chieftaincy is so closely bound up with the life of our communities that

its disappearance would spell disaster' (Schiffer, 2014). The institution of Chieftaincy according

to some people 'is in itself sacred to us, because in it are reposed our traditions and culture.

The weakening of traditional leader ship and governance institutions has created a power and

institutional vacuum, which central and new local government institutions have failed to fill

adequately. This situation notwithstanding, past and present governments ignored traditional

leaders completely in national affairs. Thus the government has continued to provide some

financial support to chiefs in the hope of sustaining the institution. Budget allocations are

regularly made for them to supplement revenue obtained from their traditional sources such as

stool lands Since government over the years continued to provide some funding, how meager, to

traditional rulers, the latter are required by law to account for their financial transactions

annually (Abor, 2013)

This study evaluates the financial management practices of the greater Accra Regional House of

Chiefs.

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1.3 Statement of Problem

Accountability and transparency has been critical issue in financial management of the

Chieftaincy institution It has been hampering the performances of the institution and has been

and is still a yet problem to be solved. In government whether the state or local, the financial

management initiative has to be seen as progressing, developing and improved, for proper

reporting and accountability. In the Chieftaincy sector accounting and auditing, emphasis is in

terms of importance, scope and on the value for money, performance and accountability. Local

government financial management is concerned with reporting on the local governments wealth,

how the source of fund is derived collected and expended, since the size of revenue meant for

collection is limited like any other resources, financial management is therefore relevant and

very essential in Chieftaincy administration. It has become issue for discussion both in the

national assembly and in public service. This is because its importance to the overall

development of the state and the country in general.

According to Olsen (2015), accountability ensures transparency by providing an open flow of

information between the public and government. However, the demand for accountability from

Chiefs has attracted the attention of most governments as a means to deepened democracy and to

improve local government (Arneil, 2017; Crook, 2017; Olsen, 2015; Smoke, 2015; World Bank,

2017; Yilmaz et al., 2008).

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There is no published study of the financial administration of the Chieftaincy institution in

Ghana. The research work is to evaluate and investigate the problems associated with lack of

accountability and transparency in financial management of the Regional House of Chiefs.

1.4 Research Purpose

This study is aimed at appraising financial management in Chieftaincy institution. Specifically

the study aims at identifying:

1.5 Specific Objectives

1. The source of funds for traditional authorities in Ghana

2. The method employed in collecting funds due to the Chieftaincy institution and

effectiveness thereof.

3. Mode of accounting and authorized expenditure by Regional house of Chiefs and

mechanism of actual and estimated expenditure

1.6 Research Questions

1. What is the source of funds for traditional authorities in Ghana?

2. What are the methods employed in collecting funds due to the Chieftaincy institution?

3. What is the mode of accounting and authorized expenditure by Regional house of Chiefs

and mechanism of actual and estimated expenditure?

1.7 The Significance of the Study

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The significance of the research is illustrated in three dimensions. These are the research benefit

to policy formulation, practice, and future research. In terms of policy formulation, the study will

inform local authorities to formulate policies that will encourage participatory democracy to

ensure local government accountability. In terms of practice, the study will broaden

understanding among citizens, practitioners, government and policy makers on the challenges

faced by social groups in demanding accountability. Lastly, the study provides information

which will contribute to existing literature on vertical accountability at the grassroots level.

The purpose of the study is to examine the increasing erosion of the importance of traditional

authorities, particularly chieftaincy, by state structures; propose a defined role for chiefs in the

decentralisation process; and find out how best traditional authorities can be positioned to

contribute meaningfully to improve governance and development in Ghana. The complaints of

traditional authorities of neglect by the District Assemblies and state agencies in development

and governance matters at all levels in all major forums set the agenda for this study.

This study will provide the in-depth information that would be useful to the local government

and traditional authorities in their bid to bring the two institutions together to work towards the

needed development of the area and other traditional areas

1.8 Limitation of the study

This study is limited to an inquiry into the practice of vertical accountability by social audit

committee to improve performance and accountability among local public officials at the

Regional House of Chiefs. The empirical findings cannot be generalized in other contexts and

because the study was conducted in Ghana where the economic and cultural setting varies from

6
that of other developing countries. Nevertheless, findings from this study would contribute to

existing knowledge on the practice of vertical accountability by social audit committees.

1.9 Study Structure and Organization

The study is outlined in five main chapters. Chapter one is the introduction and it outlines the

study background, statement of the research problem, research purpose, research objectives,

research questions, limitation of the study and the significance of the study. Chapter two will

discuss relevant literature on Chieftancy system, accountability mechanisms, and a theoretical

and conceptual framework for the study. Chapter three will discuss the research methodology

which will include a research paradigm, the study approach, research design, study population,

and the sample size. Chapter four will analyze the data findings and chapter five will finally

present the summary of the findings, conclusion, and recommendations of the study.

1.10 Conclusion

This chapter introduced the study background, problem statement, objectives and questions

underpinning the research as well as the significance and limitation of the study.

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