Councils taken to task on funds

• Fail to explain expenditures between 2008 and 2010

Public Accounts Committee (PAC) of Parliament has turned back heads of city and town councils demanding that they provide clear explanations over misuse of billions of kwacha in public funds.

According to audit reports for the period between 2008 and 2010 for Lilongwe City, Mangochi Town, Mzuzu City and Balaka councils, Lilongwe City had uncollected debts in the region of K6.1 billion ($10.7 million) dating back to 2008/09, which have remained uncollected to date.

In 2009 and 2010, revenue collections were at K695 million ($1.2 million) and K970 million ($1.7 million) respectively.

During the meeting on Friday, Lilongwe City could also not sufficiently explain what happened to K21 million ($36 907) uncleared bank deposits that were eventually written off after deposit slips could not be traced.

A review of payroll records for 2007 to 2010 also found that Mangochi Town Council did not remit Pay As You Earn (Paye) amounting to K1.2 million to Malawi Revenue Authority (MRA) despite deducting the same from employees at source.

PAC concluded that during the period under review, the councils’ funds were “free-for-all” and members of management teams were helping themselves in the absence of councillors who were not in office for 10 years.

Lilongwe City Council (LCC) acting chief executive officer Julius Tsogolani told the committee that at the time there were no cashbooks maintained.

He said: “It was the bank reconciliations which were done after the years had already gone that revealed that cashbook had K21 million more than what was banked.”

On the uncollected city rates, Tsogolani said the increase was not because of a rise in the number of defaulters, but a four percent compound interest per month on unpaid bills.

However, the response did not satisfy the committee which demanded an explanation on how the council could misplace K21 million and fail to collect K6 billion ($10.5 million) after so many years.

“If we had such powers, we would have detained you. How can K20 million ($35 149) go missing just like that?” PAC chairperson Alekeni Menyani queried.

Former LCC boss Kelvin Mmangisa was also summoned to explain because the suspected misappropriation of funds happened under his watch.

In his explanation, Mmangisa told PAC he initiated the audit after noting anomalies, but did not take responsibility.

Mangochi Town Council CEO Andrew Misomali also faced the wrath of the committee when Auditor General Stephenson Kamphasa said he was seeing the documentation that the council paid MRA on the day of the meeting.

Misomali had said his council did not remit the K1.2 million ($2 109) to MRA due to shortage of funds, but it had since done so in January 2012.

Said Kamphasa: “The [Mangochi] CEO should have presented to me for verification before we came here, but I am just seeing the documents now.”

But Misomali insisted he personally dropped off the documents with National Audit Office (NAO), Parliament and National Local Government Finance Committee. He, however, could not mention the people who received the documents.

LCC management is expected to report back in two months while Mangochi Town Council has been given two weeks.

Local councils operated without councillors since 2005 when they stood dissolved. It was only in May 2014 that new councillors were ushered into office.