Local Authorities funds misuse down to 8% of budget

Cases of fraud and misuse of funds in Local Authorities (LAs) have drastically reduced over the past years with officials estimating that by December 2011 the level of abuse was recorded at eight percent of the total budget.

This is a drop from 25 percent of the total budget of LAs when the National Local Government Finance Committee (NLGFC)—the financial regulator of LAs—was formed in 2002.

NLGFC executive secretary Wezi Mjojo told journalists in Liwonde, Machinga on Thursday  that cases of fraud and misappropriation have been plummeting because of the committee’s strong management team that has ensured fiscal prudence is adhered to.

“We institute investigative audits when there is financial misappropriation. We also organise fiscal review meetings and also fiscal decentralisation review meetings every year to look at the usage of financial resources,” said Mjojo.

She said the committee is actively involved in guiding the LAs on the budgeting process and monitoring to ensure that the funds allocated are used for the intended purpose and that they are properly accounted for.

According to the approved 2011/12 capital outlay and development budget, LAs were allocated K3.6 billion. Out of this, K772 million is for Constituency Development Fund projects whereas K360 million will finance road networks and other infrastructure development projects in the city councils with K460 million for the maintenance of primary schools.

In addition, LAs have earmarked K669 million for capital projects from their own revenue contribution, according to LAs approved budget.

On his part, NLGFC director of council financial management Silli Mbewe said to improve on transparency and accountability in the usage of council funds, government has deployed 30 qualified accountants in LAs.

He said for one year, the accountants were paid for by donors, but now they have been put on government payroll.

“The deployment of these accountants has borne results. They [the accountants] are being used as financial analysts and this is bearing fruits,” noted Mbewe, adding that  Standard Bank and United States Agency for International Development (Usaid) provided financial management and technical assistance for nine months which has significantly improved performance.

He said the LAs have also introduced tip-offs anonymous with the help of Delloite so that cases of fraud and misuse of funds are reported to the Anti-Corruption Bureau (ACB).

Over the past years, NLGFC has managed to produce consolidated council budgets on an annual basis since 2002.

The budgets are submitted to the Minister of Local Government and Rural Development for presentation to Parliament.

Councils now appear as votes in the national budget effective 2005/06 financial year with 14 sectors—health, education, agriculture, trade, water, social welfare and community development, housing, forestry, environment, labour, the National Registration Bureau, fisheries, irrigation and immigration— devolved.

NLGFC is also actively involved in guiding the local authority budgeting process and monitoring that financial resources are utilised for the intended purpose and that they are properly accounted for.

NLGFC is a constitutional body established under Section 149 of Malawi’s Constitution to regulate accounting and financial management systems of Local Authorities (LAs) or councils.