Half of councils in financial mess
Findings of a Local Government Accountability and Performance (LGAP) assessment show that half of the country’s 35 local government councils have serious financial issues and audit queries on their expenditures.
In an interview on the sidelines of a public finance management meeting in Mzuzu yesterday, LGAP technical director Phaniso Kalua said progress has stalled in most of the councils’ performance in terms of public finance management.
He said: “The councils have not been performing well according to audits done over the years. In general, we are struggling as a nation. There are serious issues in councils which need to be addressed. We should not be blind as a nation.”
Kalua mentioned inadequate personnel, knowledge gap and lack of seriousness by some senior officials in the councils as some of the contributing factors to the scenario.
He said: “From our perspective, there is a long way to go in terms of improving how resources are managed in the councils. More than half of the councils do not qualify for a cleaner audit. However, we have to understand that there are certain things that are out of their control.”
Kalua also said LGAP is dealing with issues of corruption and flouting of procurement procedures in some councils. In this regard, he said the project has taken a holistic approach in addressing the shortfalls.
The assessment comes against a background of reports from governance institutions which have been highlighting how some councils are abusing resources by flouting procedures and guidelines for administration of funds.
The affected funds include Local Development Fund (LDF), Constituency Development Fund (CDF) and District Development Fund (DDF).
Several recent reports have pointed to poor finance management in local councils with cases of non-compliance of basic accounting systems and failure to follow orders from the National Local Government Finance Committee on the rise.
According to a 2015 Tilitonse Fund Report, local councils face numerous queries bordering on fraud and accountability of funds which had progressively increased from K3 billion in the 2005/06 financial year to K34.2 billion in 2015/16.
Titled Political Economy Analysis of Accountability for Resources and Results in Local Government Councils, the report followed a research conducted by Asiyatu Lorraine Chaweza, a professor in the department of political and administrative studies at Chancellor College, a constituent college of the University of Malawi.
The Tilitonse report revealed that there was limited production of financial reports and attention to audit reports, abuse of locally generated revenues and politicised intra-district allocation of development resources, among others.
Commenting on the shortcomings in public finance management in councils, Ministry of Local Government and Rural Development director of administration Norman Mwambakulu said most staff lack knowledge and skills to manage finances in the councils.
He said: “Other councils are not performing well because they do not have the right personnel to manage finances. For example, some councils do not have accountants and they instead give accounting responsibilities to officers with no accounting background or training.”
Mwambakulu said such arrangements have led to the assigned officers not complying with basic accounting systems.
Mzimba district commissioner (DC) Thomas Chirwa, whose council is also affected by misappropriation of CDF in some constituencies, said the M’mbelwa District Council has a deficiency in the department of finance which only has two qualified personnel.
He said: “It is only the director and one other person who are qualified. The rest are not… This has created problems for us. The council is intending to send some of the staff to Mpemba [Staff Development Institute] for training.”
The DC also faulted some members of Parliament (MPs) who employ shortcuts in administering the CDF.
He said: “When auditors’ reports are out we then get audit queries because some of the documents miss due to the shortcuts and my office is affected.”
Participants to the Mzuzu meeting were drawn from Lilongwe, Kasungu and Mzimba.
The programme is part of the United States Agency for International Development (USAid) funded $22.9 million (about K16.4 billion) project to improve accountability and effectiveness in local councils
Last week, Treasury announced an extension of its audit exercise to all 28 district councils to examine management of CDF following revelations of abuse. Initially, Treasury audited 18 district councils in an exercise that revealed that about 20 MPs allegedly misappropriated the fund. However, a full report on the same is yet to be concluded. n
