Auditor General lays bare financial deficiencies of local councils

Unsubmitted audited accounts, insufficient supporting evidence, inappropriate financial planning are only some of the issues brought up by the NAO

Only 30% of local councils submitted their audited accounts this year according to a damning report by the National Audit Office that lays bare the financial planning deficiencies of local councils.

The Auditor-General flagged several concerns with regards to the financial planning of local councils. Monies were not being utilised efficiently nor economically, meaning budgets were being overrun or excessive savings were being piled up.

By the time the Auditor-General’s report was ready for publication, sixteen local councils had failed to submit their audited accounts to the Office. Another nine councils failed to submit a Reply to the Management letter, whch the NAO said denotes “a sense of irresponsibility to act upon the weaknesses identified through the audit process”.

The NAO noted that certain councils made considerable progress, in part due to efforts from the Administration to make sure that councils are given the necessary support to reach their goals.

However, the NAO remarked  that not all councils gave their full commitment and some failed to collaborate in the best way possible with local government auditors, resulting in substantial delays to finalise their respective audits.

While the liquidity position of various councils improved, and only three councils registering a negative working capital, 11 authorities ended the financial year with a deficit.

The main weaknesses flagged by the NAO include account errors such as double-postings and omissions, inappropriate fixed asset management, and an improper administration of accounts payable and accounts receivable balances.

To combat this, the NAO recommended that the Local Government Division adopt a stricter stance against defaulting councils, including through use of sanctiosn against councils that repeatedly fail to fulfill their financial statutory requirements.

The full report can be accessed here.