Editorial

An executive summary of the Auditor General's latest report starts off with an item that must leave the general reader somewhat puzzled. It reads: "Arrears of revenue as reported by ministries and departments per returns submitted to NAO totalled Lm412.4 million. Only an estimated amount of Lm80.6 million was reported as collectible as at December 31, 2005".

This is not the fist time the Auditor General is reporting such a huge amount of arrears but what is particularly galling is the fact that some ministries, departments and entities did not even deem it necessary to file the annual return to the audit office. It does not say much for accountability, does it?

In fact, much greater effort ought to be made by whoever is in charge of collecting revenue to do precisely that, collect the revenue due to the government in time. The Auditor General writes in his report that since the collection of monies due to the government is a fundamental need for the execution of the government's programme, accounting officers will be held responsible for any shortfalls. The question is: Have any been held accountable so far and if not, why?

A general comment by the Auditor General when he submitted his report to the House of Representatives is that proper and consistent application of internal controls and compliance with a number of rules and regulations needed to be strengthened. Again, this is not the first time the Auditor is making such a comment. Even though improvement has been made over the years, the very fact that the Auditor is raising the matter again suggests he is not happy with the situation as it stands today.

Local councils figure prominently in the report, not for good administration but for a string of shortcomings that ought to make the people of their locality drop them by the wayside at their councils' next election. Their financial statements cover the year ending March 31, 2006, during which the government allocated to them Lm10.2 million.

No fewer than 14 councils had a deficit in their income and expenditure account. Nine that had reported a deficit in the previous year have rectified their situation and reported a surplus. This is a point in their favour. Apart from highlighting the councils' financial situation, the report also gives a list of what the Auditor General describes as "material weaknesses".

These include: Transactions not accounted for or not accounted for properly; accounting not in accordance with international financial reporting standards and/or local councils' legislation; wrong classification of income; incorrect calculations of accruals and pre-payments; receipts not recorded separately in the accounts but in batch total when deposited; discrepancies between closing balances and opening balances, and reports not drawn up as required by law.

Going through the list, it is amazing, for instance, how some councils even fail to comply with the most basic of requirements. The part in the report dealing with tenders, contracts and quotations is equally revealing for glaring shortcomings. The list includes, for example, performance guarantees invalid, not available or incorrectly stated; works not certified by contract manager; expenditure made by direct order without obtaining three quotations or through the issue of a call for tenders; calls for quotations, instead of for tenders, for purchases/services exceeding Lm2,000 and overcharging by contractors for services already covered.

These and other shortcomings put the councils that are at fault to shame. They should put their house in order without delay and councillors held responsible for shortcomings ought to be shown the red card by voters in their localities.