Malawi Local Government Association (Malga) is lobbying central government to consider merging multiple development funds at local level into one funding basket to enhance accountability and quality of projects.
According to Malga acting executive director Hadrod Mkandawire, the development fund should be modelled under District Development Fund (DDF) or Infrastructure Development Fund (IDF).
He said some funding windows such as Constituency Development Fund (CDF), Borehole Fund, Community Managed Social-Economic Project Fund (Comsep) and other ad hoc development funds are not aligned to the development blueprint of councils and that expenditure is not done in compliance with public finance management legal framework.
Audit reports have also revealed that most of the waste is due to poor workmanship, political interference, dubious procurement, project abandonment after budget busts, discarding of set guidelines and outright theft.
“The multiple funding windows for local development have proved to be unresponsive to the development priorities identified by the people as appearing in development blueprints of local governments, namely urban development plans and district development plans,” said Mkandawire.
He explained that as a result, at the expiry of these development plans, there is little achievement on the ground, after resources have been spent through the multiple funding windows.
“Now the question has been where are these resources trapped? The answer is the resources have been going to non-priority projects identified by political actors for their own personal convenience and political expediency,” said Mkandawire.
The Malga head added that such abuse of funds does not only disenfranchise the people, but also leads to frustration over the whole concept of decentralisation.
Currently, the National Local Government Finance Committee (NLGFC) 2019 report shows that at least K30 billion was funded to all 28 council in the previous five years for various development projects.
However, an audit of the projects under CDF’s K16.7 billion, DDF’s K10.2 billion and funding for boreholes pegged at K4 billion found that they were numerous uncompleted projects and council officers could not provide a detailed account of the expenditures.
A special audit report issued by Central Internal Audit Unit in June 2017 also showed that in 2014/15 and 2015/16 financial years, at least 20 parliamentarians in the last cohort of Parliament mismanaged about K80 million of CDF.
While a Local Authority Performance Assessment report for the 2019/2020 financial year as a precursor for the Performance Based Grant (PBG) released last week also exposed glaring public finance management gaps in all local councils, ranging from inefficiencies in development planning, budgeting and auditing to contract management and implementation.
According to the report, worst performers were M’mbelwa, Mangochi and Phalombe, which scored 25 percent each; Machinga (24 percent) and Chiradzulu (21 percent). On average, councils nationwide scored 41 percent.
On financial management, the report shows that 20 local authorities, representing 71 percent of the districts, registered below average performance with scores ranging from 18.1 percent to 45.5 percent.
Balaka District Council emerged the best performer, after scoring 67 percent followed by Lilongwe (62 percent) and Mchinji (61 percent).
Centre for Research and Consultancy director Milward Tobias said that is why Malga’s proposals may help to entrench decentralisation and accountability.
However, Tobias was quick to point out that caution should be exercised so that the specific intention for standalone funds such as Borehole Fund and IDF should not be lost by bringing all funds under one basket.
Catholic for Justice and Peace national coordinator Boniface Chibwana is also in agreement with Tobias, saying: “When funding modalities are put into one then there will be enhanced accountability for people and other stakeholders will focus on that one and it will be easy to internalise and popularise guidelines thereby enhancing compliance with Public Finance Management Legal Framework.”
But Parliamentary Committee on Local Authorities and Rural Development chairperson Horace Chipuwa trashed Malga’s proposals, saying stripping off powers of parliamentarians in the administration of CDF is a non-starter since they negotiated for the fund themselves.