Over the past few years National Audit Office (NAO) periodic reports have found councils as some of the government institutions where fraud, corruption and wastage of public resources have been largely reported. Our Staff Writer KONDWANI KAMIYALA caught up with ALUFEYO BANDA executive director of the National Local Government Finance Committee (NLGFC), the financing arm for local government structures on how the entity is moving to sanitise councils and improve on financial prudence. Excerpts:
Give us a background on what NLGFC is all about.
NLGFC is a constitutional body established under section 149  to mobilise, distribute and ensure efficient and effective utilisation of financial resources among Local Authorities for effective and efficient service delivery and development in Malawi.
The current NLGFC is a result of the Public Sector Reforms recommendations to merge the old NLGFC and the Local Development Fund Technical Support Team [LDF-TST]. The merger was effected on April 1 2018. It eliminated replications and overlaps.
How does your entity perform its functions?
We receive all estimates of revenue and all projected budgets of all local government authorities; supervise and audit accounts of local government authorities, in accordance with relevant Acts of Parliament, subject to the recommendations of the auditor general.
It is our role to make recommendations relating to the distribution of funds allocated to local government authorities and vary the amount payable from time to time and area to area according to, and with sole consideration of, economic, geographic and demographic variables.
NLGFC also prepares a consolidated budget for all local government authorities and estimates after consultation with the Treasury, which shall be presented to the National Assembly by the Minister responsible for Local Government before the commencement of each financial year. But we also make application to the Minister for supplementary funds where necessary and duty to provide adequate resources for local government functions among many others.
What are you going to do about the lack of strict adherence to public finance management protocols in many councils?
Recently, finance heads in all councils have been oriented on good financial practices and adherence to financial regulation including good corporate governance in accountability and reporting. A circular to controlling officers on adherence to financial regulation and discipline and surcharging on failure to comply was already issued. These have been done not only as a reminder but also to set the tone that things have changed and we expect great improvements in financial management. As NLGFC we have further frequently engaged, supervised and mentored councils to ensure that they provide timely financial reports. Due to the measures above we do not hesitate to carry out financial reviews, investigative audits and internal audits whenever such issues are brought to our attention and so far about five issues have been reported to appropriate offices and some are in court such as involving councils in Dedza, Mangochi, Mchinji, Nkhotakota and Ntchisi.
There were reports that some councils were not complying with the requirement to produce audited accounts and that as a result they would not be funded. Not much action has been recorded on this front, why?
You can see that through the tough measures in ensuring that councils produce financial statements and audits every year we will ensure that this malpractice is greatly minimised. However, we cannot outright stop funding councils due the community nature of the council business, so imagine if we stop funding a district hospital or school because some officer has mismanagement funds, how are we to assist the communities in such a cases? So we do our best, and with the new political will, failure is no longer a vocabulary in the councils. NLGFC has introduced and implemented the IPSAS accrual reporting to all councils as a basis of accounting and reporting to ensure compliance with international accounting standards and practices, and ensure standardisation of reporting and improvement of council accounting and financial management. We have worked on a number of stakeholder engagement to improve on coordination, reporting and mindset change in council financial management with NAO, Ministry of Finance, accountant general’s department, councils and development partners.
Common knowledge is that many councils lose a lot of revenue in mismanagement of market fees and licences, why have you not enforced automation of payments?
Automation of market revenue is not just as easy it may sound due to the nature of our designed markets where stands or businesses allocated places are not well demarcated, allocated and data maintained. But innovation is in place to automate. Same as business licences where now councils have been asked to have a proper and up to date business register data base for billing. And works are in place to streamline processes and reporting to bring about automation.
Finally, what is your vision for local government financing?
In as much as NLGFC is fulfilling its constitutional mandates, I personally think that there is a lot that is desired to be done in local governments in relation to financial management. I envision for the NLGFC which can best serve councils in areas of ensuring sound financial management to make councils corrupt and fraud free councils, councils which produces time financial statements and clean audits. I also want to see councils become financially dependent through the collection of local revenue. It is also my wish that there is equitable distribution of resources in councils through lobbying with GoM and development partners for more development funding.