The Auditor General, Mr Charles Deguara, has presented to the Speaker of the House of Representatives, Anglu Farrugia, the Annual Report on the Workings of Local Government for the year 2023.

The National Audit Office noted that a compliance audit exercise conducted by the Office at Qala Local Council highlighted concerns relating to “non-compliance with procurement regulations.” This can be found on page 39 of the Report onwards.

The Office explained that the main scope of the audit was to determine whether the operations of the Qala Local Council during 2023 were conducted in line with the relevant regulations emanating from the Local Government Act, as well as with the applicable regulations and guidelines issued by LGD. Moreover, the Office said that procedures were carried out to establish whether Government resources were used prudently and in a judicious manner.

Fifty-seven Local Councils, six Regional Councils and the Local Councils Association submitted their audited accounts to the National Audit Office (NAO).

The NAO, in a statement on Monday, said that “despite that these were expected to be received by end of June 2024, eleven Local Councils did not submit the audited financial statements to this Office by the ultimate deadline of mid-October 2024.”

To this effect, the Auditor General stressed “the immediate need for the Councils to submit their audited accounts, as required by law, in a timely manner. Non-submission cannot be tolerated any further.”

The NAO also once again emphasised the importance of “collective cooperation, which not only strengthens the local communities but also fosters good governance.”

The NAO added that it was also observed that “not all Councils demonstrated full commitment and collaborated effectively with the Local Government Auditors during the audit process, causing delays in completing the respective audits.”

NAO acknowledged that, with the exception of one, “all Councils managed to submit a reply to the Management Letter. However, the continued presence of significant shortcomings in these Management Letters is unacceptable.”

Indeed, NAO said it “strongly believes there is ample room for improvement in the Councils’ internal controls. The recurrence of certain issues, such as accounting errors and weaknesses in fixed asset management, reported consistently year after year, demonstrates lack of effective action to address their underlying causes.”

The NAO stated that “another issue commented upon related to the fact that the Councils’ allocation was not always utilised efficiently and economically, resulting in either budget overruns or, in certain cases, excessive savings of funds.”

It noted that other concerns included:

a. the qualification with an ‘Except For’ audit opinion of thirty-one Councils; meaning that certain areas could not be audited due to insufficient supporting evidence; and

b. four Local Councils had an Emphasis of Matter paragraph in the auditor’s report, highlighting a material uncertainty related to the going concern, implying that they might not be able to meet their financial obligations as they fall due.

The NAO went on to explained that this Report “analyses in further detail the shortcomings that were identified during the audit carried out on the financial statements as prepared by the Local Authorities.”

The full Report can be accessed by clicking here.

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