The Krachie East District in the Volta Region is in dire financial crisis following the alleged misappropriation of a GHc2million loan contracted by former District Chief Executive (DCE).

Due to this, the District Assembly Common Fund is currently being used to service a loan that was allegedly contracted by the former DCE for the Dambai market project.

Mr Michael Gyato is alleged to have taken the loan in 2008 from SSNIT to construct a market and used the District Assembly’s Common Fund as collateral to repay the loan.

The market is yet to be completed and the current DCE, Peter Wuranyi Yao says the Assembly will collapse without external help.

“Part of the work has been done but the structures are still uncompleted. When I came I saw that we are paying from the District Assemblies’ Common Fund it means the market was mortgaged with the District Assembly Common Fund.

“When you look at it, our people within Krachie East don’t get development from the District Assembly Common Fund because the whole chunk of money is taken by SSNIT… as at now we are still owing GHc1.6million.”

He noted that he made a formal complaint during the Public Accounts Committee hearing in Ho where the Chairman of the committee instructed external auditors to audit the district assembly’s accounts.     

The former DCE, who is said to have contracted the loan, has denied misusing any funds. Mr Gyato told Joy News he went for the said loan but never used it.

He said the facility, which was contracted seven years ago, was not a bad one because “the essence of the facility is for us to build a market sell it to individuals, by charging rent on the market and then we release it to them and then we send the money back to SSNIT.”

Mr Gyato stressed that there was no way to get that facility without a mortgage and that is why they used the District Assembly Fund.

The former DCE for Krachie East said the money was given in tranches and the first tranche was released and they “had one year moratorium to do this project and dispose of it and get the money back to SSNIT.”

He accused the NDC government of awarding the project to a different entity at a higher cost which delayed the moratorium.  

In a separate development, Municipal and District Assemblies have been tasked to find ways of generating their own incomes and stop over relying on government to provide funds for their projects.

According to the Institute for Democratic Governance (IDEG) too many projects have stalled in the local assemblies because of the delay or lack of funds.  At a media briefing to reveal findings on citizens monitoring of projects by MMDA’s, speakers noted assemblies must find innovative ways of generating incomes.