CHAPTER ONE INTRODUCTION
Introduction
This chapter provides an introduction to the study which examines Functional organizational Assessment Tool (FOAT) as a Performance Management (PM) tool. To achieve this, the chapter has been organized into six sections namely: background of the study, problem statement, the objectives of the study, methodology, the significance of the study, and the organization of the study.
Background to the Study
Ghana has been implementing a comprehensive local government and decentralization programme as a key national development strategy. Key inter-related pillars which underpinned the programme implementation include political decentralization, administrative decentralization, decentralized planning and fiscal decentralization. An additional pillar in the form of public-private partnerships has recently been introduced. Over the past two decades, 216 local authorities have been created and there have been transfer of authority and resource from the central government Common Fund and government’s development partners to the local government (Ministry of Local Government & Rural Development Report, 2010).
Local Government (LG) is a public administration system that exists at the lowest level of the state or country. Local government or local bodies act according to the legislation or directions of the central government. Different countries have different forms of local government such as district, city, township and village councils. The local government system reduces pressure from the central government to local authorities in providing development or welfare to the society.
The local government of Ghana consists of the Metropolitan, Municipal, and District Assemblies (MMDAs). The 1992 constitution of the republic of Ghana provides for decentralization and local government that creates a framework for citizens’ participation in decision making and local governance.
Local administrations all over the world are facing considerable difficulties in the provision of public services, as a result of falling revenues and greater limitations on borrowing (Lopez-Hernandez, Zafra-Gomez, & Ortiz-Rodriguez, 2012). In Ghana, the District Assemblies Common Fund (DACF) is said to be the solution to the problem of fiscal decentralization (Ahwoi, 2010 ), since it is the office established by the constitution to ensure that decentralized transfers are made to the DAs in a transparent, non-discriminatory accountable manner. But this is still hindered by political interferences since recent governments have changed the percentage of consolidated fund allocated to the DAs as well as the sharing of the common fund formulae. From the foregoing, the government, at all times, is required to make available a minimum of 5% of the consolidated fund for decentralization through the DACF. This percentage was changed to 7.5% up to 2016 by the immediate former president of Ghana, His Excellency President John Dramani Mahama and however reversed to 5% by current president His Excellency President Nana Akufo-Addo.
There is therefore the need for proper management and accountability of these resources disbursed to these MMDAs. This will help reduce costs and ensure efficiency, effectiveness, economy and accountability in the delivery of public goods and services. For this reason, local administrators are seeking new forms of organizing local public services and hence are increasingly adopting reforms in the spirit of New Public Management (NPM).
Key among them is Performance Management Practices (PMP) and accountability of which the FOAT plays a key role. FOAT is a tool used in assessing the performance of the MMDAs
in Ghana before granting District Development Facility (DDF) to those qualified under the Performance Based Grant System (PBGS). Also, another fundamental issue that require attention has to do with how to ensure that Performance Management Practices (PMP) of the MMDAs are consistent with statutory requirements and that, there exist sufficient measures to safeguard against mismanagement of funds allocated for development at the local level. PMP, which is an aspect of the NPM reform, has been variously described to include specifying which goals to achieve, allocating decision rights, and measuring and evaluating performance (Brickley, Smith, & Zimmerman, 1995; Heinrich, 2002).
Any organization, be it in the public or private sector, needs an effective performance management system (tool) to ensure efficiency, effectiveness and accountability in its operations to its stakeholders. In the public sector, this is more important since duty bearers have a statutory contractual obligation to provide services using resources from the public purse.
Governments normally recognise the important role the public sector plays in the provision of public goods and services that would not otherwise have been provided by the private sector. The private sector sometimes does have the capacity to provide these services or provide them to the public at higher cost of which only the wealthier people in society would be able to afford. This has encouraged governments across the globe to seek ways to improve on the outputs and outcomes of the public sector and to ensure accountability. Achieving the efficient delivery of public services is a major policy goal at every level of public administration. Managing public services in such a way as to ensure greater efficiency within public entities is one of the main ideas underpinning the development and implementation of NPM (Pérez-López, Prior, & Zafra-Gómez, 2015). According to Hood and Dixon(2013), NPM literature is extensive and covers many areas, including performance management, accountability, decentralisation, contracting out, public-private partnerships, e-government,
and collaborative networks all with the main purpose of improving the efficiency of LG originally interpreted from the perspective of cost reduction.
