Auditor General urges local councils to fall into line

An air travel ticket issued on behalf of the wife of the mayor of Attard was paid out of public funds, Lm2,600 worth of phone calls were reimbursed to Valletta councillors without appropriate claim forms and the Vittoriosa local council accepted a rise in contracted rates from Lm1,105 to Lm5,000 by means of a simple e-mail.

In the Auditor General's report on the public accounts 2004, local councils topped the list of entities whose compliance rate with financial regulations "continued to deteriorate".

Auditor General Joseph Galea said in the recently published annual report that shortcomings he noticed and pointed out to local councils in previous years have been repeated in 2004. The report was tabled in Parliament earlier this week.

In various instances, the auditor points out "excessive expenditure" on mobile phone calls, fuel allowances and social events.

Only seven local councils had unqualified reports. Sixty one (90 per cent) audit reports were qualified because of omission of budget figures, incorrect accounting treatments, incorrect recording of balance sheets and the joint committees' failure to provide timely audited accounts for the local enforcement system (which deals with fines by wardens).

"Due to the absence of audited joint committees' accounts, local government auditors could not place any reliance on the correctness of LES income reported by each council," the Auditor General said, advising joint committees to request that their financial accounts are audited in time to ensure the correctness of LES income relative to each council.

In the 2004 report, the control issues highlighted by the auditors included the concurrent use of multiple receipt booklets for different sources of income, an insufficient audit trail in the recording of income, donations and sponsorships given in contravention to local councils' legislation and allowances to councillors and executive secretaries for the use of mobile phones and personal transport.

When it came to compliance with tendering regulations, the Auditor General pointed out that councils were making use of expired or invalid contracts and, sometimes, quotations were requested instead of calls for tenders for purchases or services costing more than Lm2,000.

Shortcomings were also identified in the workings of the Local Councils' Association, which holds a Visa credit card in the name of its president. Its credit limit was increased from Lm1,000 to Lm2,000 in 2004. "No approval by the Director of Local Councils was obtained for the use of this card and for the extension of the credit limit," the auditor said.

The National Audit Office has been advising the Department of Local Councils to amend the Local Councils Act, Regulations and Procedures, but though the department agreed to such a need, it was unable to make the changes "due to lack of resources".

The auditor advised that councils be supervised continuously to ensure that irregular practices are curtailed on time because all too often weaknesses are identified at the end of the financial year when it is too late to take corrective measures.

Noteworthy concerns

The Auditor General mentioned a number of councils where concerns were serious enough to merit individual mention:

Attard
Air travel tickets to the mayor's wife, a cleric and a person involved in commerce were paid out of the council's funds.

Vittoriosa
A contractor was allowed to change the rates quoted in his tender document in the process of adjudication due to "mistakes" made by the same contractor. The council accepted a change in contracted rates for the upkeep of "soft areas" from Lm1,105 to Lm5,000 per annum by means of an e-mail.

Ghasri
Tender fees received in November 2004 were neither accounted for nor deposited at the bank as at audit date but were kept in a drawer of the executive secretary's desk.

Kirkop
Expenses were incurred in connection with the repairs and upkeep of the local boççi club premises and the reception held on the inauguration of the same premises. The council is paying Lm60 a month to a professional PE coach engaged by Kirkop United FC.

Nadur
Thirty-one invoices, amounting to Lm21,003, for services and works carried out, were not included in the financial statements. The deficit of Lm8,233 reported by the council excluded the above invoices. Expenditure incurred by the council for the supply and laying of artificial turf at the football pitch belonging to the boys' section of the Christian doctrine society MUSEUM and Nadur Youngsters Football Club amounted to Lm7,121 and Lm16,887 respectively.

Paola
Ten full-time employees and one part-timer are employed with the council. According to article 53(1) of the Local Councils Act 19934, the council is overstaffed by about six employees. The council financed a Lm10,000 project for the construction of a synthetic football pitch. The legal title of the football pitch is in the name of A.S. Hibernians Ltd.

Pietà
Overtime to the tune of Lm80 a month was paid to the executive secretary for extra work carried out in relation to QMS ISO 9001:2000. No approval was granted by the Local Councils Department.

Qrendi
Environmental Landscapes Consortium contracted for the upkeep of parks and gardens was given an increase of Lm2,500 per annum in its contracted rates without a new tender being issued.

Victoria
A number of invoices amounting to Lm10,923 for services and works carried out were not included in the financial statements. The surplus of Lm29,612 in the income and expenditure account and the working capital reported by the council excluded these invoices.

Sta Lucija
A fax machine was purchased for each councillor to be kept by them throughout the duration of their term. Internet services were provided to councillors.

St Julians
Councillors and employees were reimbursed over Lm2,000 in phone calls and fuel but no details on mileage logging and call tracking were being kept in the reimbursement claim form.

St Paul's Bay
The council hires a motor vehicle throughout the year. However, it was noted that the vehicle is not parked near the council premises outside office hours.

Sannat
A total amount of Lm300 was paid to the executive secretary as qualification allowance for 2003 and 2004. This qualification relates to hotel, catering and institutional management (Institute of Tourism Studies). No approval has been yet granted by the Local Councils Department.

Valletta
A sum of Lm2,600 was reimbursed for telephone costs to councillors. No appropriate claim forms with the necessary details were prepared. The council hires a motor vehicle throughout the year. However, it was noted that the vehicle is not parked near the council premises outside office hours.