Report by the Auditor General on the Workings of Local Government for the year 2015

The Auditor General presented to the Hon. Speaker the Annual Report on the Workings of Local Government, which is essentially based on the audits carried out at the Local Councils, the Local Councils Association and the Regional Committees. In actual fact, by mid-October 2016, being the ultimate deadline set by the National Audit Office, the audited financial statements of three Local Councils, as well as two Regional Committees, were still not submitted despite that these should have been received by 29 April 2016.

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 prevailed from previous years. Particular reference has been made to a number of instances whereby procurement was not carried out in line with pertinent regulations and actual expenditure exceeded the budgetary allocation.

The following was also noted:
a. Due to the various shortcomings encountered, an audit opinion could not be expressed on the financial statements as presented by four Local Councils.

b. The Audit Reports of another 43 Local Councils, three Regional Committees, as well as that of the Local Councils Association, were qualified.

c. Twenty-three Local Councils recorded a negative working capital in the Statement of Financial Position.

d. Twenty-four Local Councils, as well as the Central Regional Committee, registered a deficit in the Statement of Comprehensive Income.

Notwithstanding that more than five years elapsed since the responsibility for the administration of the Local Enforcement System was shifted on to the five Regional Committees on 1 September 2011, the National Audit Office noted that the liquidation process of the nine Joint Committees has still not yet initiated. Although these were expected to be wound up after one year following the set up of the Regional Committees, to-date the National Audit Office still has no indication that such process officially commenced. Moreover, for the fourth consecutive year, this Office did not receive the audited financial statements from any of the nine Joint Committees. There is surely no need to emphasise that such situation is unacceptable.

On a positive note, the National Audit Office makes reference to the recent enhanced efforts on the part of the authorities, under whose responsibility this important area of local government falls, to ensure that, as much as possible, the issues raised in this Report are addressed in a timely manner. Ultimately, such remedial action will be in the best interest of the citizens of Malta and Gozo.