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Councils rocked with accounting indiscipline

Various district councils are embroiled in cases of non-compliance of basic accounting systems and failure to follow orders from the National Local Government Finance Committee (NLGFC), Weekend Nation can reveal.

This is outlined in reports from governance institutions highlighting how councils are abusing resources by flouting set procedures and guidelines for administration of funds under various baskets such as Local Development Fund (LDF), Constituency Development Fund (CDF) and District Development Fund (CDF).

Chimwendo: Bemoaned laxity

According to Weekend Nation findings, by June 2017 only five percent of councils,  had complied with the mandatory management requirement to  submit accounting reports to the NLGFC.

A nationwide auditing exercise which the Central Audit Office undertook raised several queries about expenditures. For example,  after the NLGFC asked 18 district councils to explain the queries by September 1—only one district council met the deadline.  As we went to press, no other council had responded to the querry.

In an interview, NLGFC senior accounts analyst and acting CEO, Syak’inongwa Mwamondwe, confirmed the high rate of non-compliance by the councils and promised the regulator would move to enforce disciplinary measures where applicable.

According to one DC, speaking on condition of anonymity, most DCs and council management teams have focused on curbing outright fraud but feel that most of the queries are purely about flouting of guidelines.

“When it’s about embezzlement or outright fraud we are worried, but when it’s about merely governance concerns, we feel some of these issues can be improved gradually through dialogue with all stakeholders,” said the DC.

Section 88 (1) (d) of the Public Finance Management Act says a person commits an offence if he or she refuses to provide reports under this Act.

According to Guidelines for Local Authorities: “Preparing and responding to Audit Queries” issued in February 2014 by the NLGFC, councils are supposed to respond to all audit queries through audit responses by the Audit Management Committee.

The DC must endorse the responses and send them to the NLGFC which forwards them to the Auditor General.

Another DC, who sought anonymity, said the DCs sometimes flout public expenditure rules because they are under pressure from NLCFC to complete their budget allocations or risk funds being withdrawn.

“Most of the time, the funding comes late and we are under pressure to deplete our allocation before the financial year,” argues one DC.

According to CDF guidelines on selection of projects, “priority must be given to short-term and immediate intervention micro projects or programmes whose benefits accrue to communities or groups of individuals.”

Some of the projects eligible for maintenance and rehabilitation under CDF include school buildings, health clinics, community buildings, boreholes, feeder roads and bridges and projects selected should be in line with priorities in the District/Urban Development Plan.

The guidelines stipulate that all non-project related expenditures having attribute of accruing personal benefit shall not be drawn against CDF.

“Members of Parliament shall not claim any sums against CDF,” while personal allowances other than those with direct relevance to approved tasks under CDF projects are also barred.

CDF guidelines further stipulate establishment of five-member project implementation committees (PICs) consisting a representative of the MP and four representatives appointed by the ADC plus respective ward councillors. For all education related projects, school management committees automatically serve as PICs.

Procurement is done through an internal procurement committee (IPC) which is tasked to ensure all bidders are qualified, open competition and right methods of procurement are followed.

Dowa East parliamentarian Richard Chimwendo, who chairs the Social and Community Committee of Parliament, in an interview, attributed on-going challenges in the implementation to tension between MPs and councillors, or councillors and MPs on one hand, and the council secretariat on the other.

“The current cohort of councillors has been undertaking an on job training. Councillors now have the mandate for accountability and monitoring. Some members of Parliament have challenges working with the councils.

“The gap when we had no elections contributed to stagnation and resistance by MPs and secretariat. But now we are seeing council committees seeking accountability, I am glad towards the end of this cohort, we are seeing a shift,” he said.

Chimwendo said there were also cases of MPs flouting procedures, despite clear guidelines for those responsible for procurement.

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