District Development Authorities (DDAs) were established by Parliament in 2014 with the aim to improve local service infrastructure and delivery.DDAs are responsible for the spending of District Service Improvement Program (DSIP) and District Infrastructure Program (DIP) funds.

There also Service Improvement Program grants that are paid to Provincial and Local Level governments as shown in this diagram:

For 2023, each District Development Authority has been allocated a total of K20 million in DSIP and DIP funding in the National Budget.DSIP and DIP funds are distributed to the DDAs by the Department of Finance.

The DSIP funds are to be used by the DDA as follows:

♦  Infrastructure support services (30% / K3 million)

♦  Health support services (20% / K2 million)

♦  Education support services (20% / K2 million)

♦  Law and Justice services (10% / K1 million)

♦  Economic support services (10% / K500,000)

♦  Administration (10% / K500,000)

Each DDA is governed by a Board comprising all the local-level government presidents in the District. The Board is chaired by the local Member of Parliament (MP). The day-to-day operations of a DDA are managed by a Chief Executive Officer (CEO) who is also the District Administrator. Each District is required to have a 5-year development plan to guide their activities and spending.

“The decentralised nature of SIP funding arrangements means there is a requirement for sound corporate governance and accountability arrangements.” Auditor General, 2019

Each DDA is required to submit an annual report on the implementation of its previous years program and acquittal of its previous year’s spending.Reports are to be submitted to the Department of Implementation and Rural Development (DIRD) before 31 March each year.Each DDA Board is also required to submit an annual report to the Minister for Rural Development. A copy of the report is to be made publicly available.

The Finance Department is responsible for managing and disbursing DSIP funds and the DIRD is in charge of coordination, monitoring and reporting on DSIP performance and acquittals.The DIRD is required to review, monitor and report on the DDA acquittals and conduct project inspections to verify the expenditure.The DIRD has a Monitoring Unit, with regional offices, to conduct physical inspections and verification of projects funded through the DSIP.

Monitoring and Inspection reports produced by DIRD field officers should be consolidated into quarterly and annual management reports submitted to the Central Agencies Coordinating Committee and other government agencies.

Each DDA, as a statutory body is required to submit annual financial statements for audit.The Auditor General also has a responsibility to audit the financial records of each DDA.

1.   The DDAs replaced the Joint District Planning and Budget Priorities Committees. District Development Authority Act [2014]

2.  The Service Improvement Program was established under Section 95 Organic Law on Provincial and Local Level Government [1995] as amended.

3.  Doubling of PNG MP funds a bad move, DevPolicy Blog, 2013.

4.  The management and use of public funds is governed by Public Finance Management Act [1995] as amended.

5.  A 2019 Auditor General’s report 2019 says at 2.8 these allocation rules no longer apply and each DDA is free to decide itself how to use the funds but other documents still refer to the allocations.

6.  Section 33A (3) (d) Organic Law on Provincial and Local Level Government and Section 5(h) District Development Authority Act [2014]

7.  Section 4.3 of the SIP Administrative Guidelines states the disbursement of SIP is strictly upon receipt of the previous year’s implementation physical and financial reports (acquittals) and availability of funds

8.  Section 34 District Development Authority Act [2014]

9.  AGO Report 2019 at 3.10 ‘The Department of Implementation and Rural Development (DIRD) is the lead agency in charge of coordinating, monitoring and reporting rural development progress. It is responsible for the acquittal of DSIP, PSIP and LLGSIP funding and maintaining records relating to SIP for each fiscal year.’

10.  AGO Report 2019 at 4.6

11.  Section 63(1) and (3) of the Public Finances (Management) Act, 1995 (as
amended).

12.  Under Section 214(2) of the Constitution the Auditor General is required to inspect and audit all bodies set up by Acts of the Parliament for governmental or official purposes unless other provisions are made by law in respect of their inspection and audit. Under the Audit Act Section 8(2), the AGO is required to inspect and audit the accounts and records of financial transactions and the records relating to the assets and liabilities of public bodies and their subsidiaries, and to report to the Minister with responsibility for the public body and the Finance Minister any irregularities found during the inspection and audit.

Ref : Act Now DDA Watch 

             DDA System