Annual Report on the Workings of Local Government for year 2016

The Auditor General presented to the Hon. Speaker the Annual Report on the Workings of Local
Government, which is based on the audits carried out at the Local Councils, the Regional Committees
and the Local Councils Association. By end of October 2017, this being the final deadline given by the
National Audit Office, the audited financial statements of three Local Councils as well as one Regional
Committee were still not submitted. The original deadline for submission of the statements was 28
April 2017.

From a thorough review of the respective financial statements, as well as the related management
letters, it was observed that a number of concerns and weaknesses as reported in previous years
prevailed. Particular reference was made to a number of instances whereby procurement was not
carried out in line with pertinent regulations.

The National Audit Office also noted the following concerns:

a. Due to the various shortcomings encountered, an audit opinion could not be expressed on the
financial statements as presented by Birgu and Mosta Local Councils and Northern Regional
Committee.

b. The Audit Reports of another 45 Local Councils, two Regional Committees, as well as that of the
Local Councils Association, were qualified.

c. Seventeen Local Councils recorded a negative working capital in the Statement of Financial Position.

d. Eleven Local Councils, as well as three Regional Committee, registered a deficit in the Statement of
Comprehensive Income.

Notwithstanding that the nine Joint Committees were expected to be wound up after one year following
the set up of the Regional Committees, which took place on 1 September 2011, to-date the National
Audit Office has no indication that such process has officially commenced. Moreover, for the fifth
consecutive year, this Office did not receive the audited financial statements from any of the nine Joint
Committees; a situation this Office deems unacceptable.

The National Audit Office commends the continued efforts on the part of the Administration,
particularly following the recent restructuring of the Local Government Department, to better support
and monitor the performance of all Local Councils. However, more needs to be done to ensure that the
shortcomings mentioned in the Report are duly addressed.