In spite of repeated warnings and recommendations to rectify serious financial shortcomings in the daily running of local governments, the issues flagged years ­­­ago have persisted, the Auditor General said.

In his annual local councils report for 2013, Auditor General Anthony Mifsud said that in many instances, accounting records were not properly updated.

As a result, some of the financial statements drawn up “did not reflect a true and fair view of the actual financial situation”.

The report, which was tabled in Parliament earlier this month, flagged several other shortcomings such as the failure to issue a proper invoice or fiscal receipt to back some payments.

There were also cases in which expenditure had exceed the budget and procurement was not done in line with the pertinent regulations.

Concern was also expressed that the warnings issued by the National Audit Office were being taken lightly. Some of them were simply ignored, or just answered with a statement indicating that the point had been noted. In other cases, councils did not even bother to indicate the concrete actions taken or plans to implement the proposed recommendations.

“This indicates a total lack of accountability on the part of the respective councils,” the report said.

The main findings

• No opinion could be given on the Mosta and Valletta councils due to “various shortcomings” in their financial statements.

• Shortcomings were noted in the audit reports of 55 out of a total of 67 councils and in those of four of the five regional committees.

• The financial statements of 43 councils and four regional committees were not fully compliant with International Financial Reporting Standards.

• 37 councils and one regional committee registered a deficit.

• The local enforcement system, which is the main source of revenue for the regional committees, was not subject to a system audit, in spite of repeated requests from the Auditor General.

• As in 2012, 25 councils registered a negative working capital as their current liabilities outweighed their current assets, fuelling concerns that they may encounter difficulties in meeting their obligations.

• A number of councils failed to publish the minutes on their website, while in some cases these documents were not even endorsed by the mayor or the secretary.

• Councillors who failed to attend meetings with no justification were still paid the full yearly allowance.

• The minister was not notified of cases whereby councillors were absent for four meetings, or in aggregate more than one-third of the meetings, organised within a period of six months, in breach of the Local Councils Act.

• Nine councils exceeded the set expenditure limit on Christmas lunches or receptions with the amounts varying between €37 and €420. In some case individuals not entitled to attend such activity were invited and in others the expenditure per guest was higher than the established limit of €30 for lunches and €15 for receptions.

• By the end of last September a number of mayors had not yet refunded the honoraria increase given in January 2010 (amounting in total to €8,266) which had been revoked a year later.

• On a positive note, 10 councils rectified their position to a surplus by the end of the year.