Overspending on Christmas lunches, donations exceeding the threshold and payment of full allowance to councillors who did not attend all meetings are among the compliance issues flagged in the 2016 Local Government Workings report.
Published annually by the National Audit Office, the report comprises an analysis of the audited accounts of all 68 local councils in Malta and Gozo, whose total allocation from the central government last year was €33 million.
Apart from giving the full picture on the financial situation of every council, the NAO flags certain practices which are not in line with set regulations and could give rise to abuse. The following are some of the shortcomings found:
Councillors’ allowance
A recurring issue was that related to the payment of an annual allowance of €1,200 to all local councillors.
Introduced in 2010, the measure was meant as compensation for any council-related expenditures. This allowance is paid in proportion to the number of meetings attended. However, absenteeism on the grounds of sickness (if attested by medical certificates), duties abroad and other circumstances of which the executive secretary was previously notified, are justified.
READ: Local councils get an 'F' in accounting from NAO
In previous years the NAO had already flagged cases where the full allowance was given even though no justifiable excuses were given for the absence.
Nonetheless, such instances were once again encountered in 2016, the report says.
Moreover, some councils also failed to notify the minister of those councillors who were absent for four meetings, or in aggregate more than one-third of them within a six-month period.
Travel report
The NAO questioned certain procedures related to commitments abroad even when a significant expense was incurred from the council’s coffers.
It noted that in certain cases no report was given on the purpose of such visits, the benefits achieved, the delegate’s personal remarks, or issues to be followed up in Malta.
Christmas dinner overspending
Another issued which had been previously flagged, but cropped up once again was related to overspending on Christmas lunches or receptions.
According to regulations the maximum cost for each guest should not be more than €30.
This time around three councils, as well as the Local Councils’ Association, exceeded the stipulated limit.
The Ħamrun council registered the highest discrepancy, which was €182 above the limit, followed by the LCA, with €147, Gżira, €41, and San Ġwann, €33.
While the Ħamrun council accepted the auditor’s recommendations, the only instance where no explanation was given for overspending was by the Local Councils’ Association.
Furthermore, the NAO noted that the Gudja council held two Christmas events – a dinner and drinks, incurring a total expenditure of €533.
Though the council pointed out that €100 worth of drinks was left from the event, and stored at its premises for future events, this was still in breach of regulations which state that only one Christmas event may be held.
Jum il-Lokal activities
Other breaches flagged in the report were related to activities to commemorate the locality itself (Jum il-Lokal), which must not exceed €3,500 or 0.5 per cent of the annual central government allocation.
The highest discrepancy was recorded by the Swieqi council which overspent the budget by €6,553, followed by Victoria (€5,414), Żebbuġ (Gozo) (€4,465), Gżira (€2,627) and Mellieħa (€1,241).
While the Swieqi council justified the spending, saying the event was not all related to Jum il-Lokal and that most of the expenses were recovered from sponsorships, the Gżira council noted that it would not be paying more than €3,500 as the organiser had been advised from before not to exceed the budget.
Victoria council said it would be making an effort to keep the expense within budget.
No reply was received from Mellieħa and Żebbuġ, Gozo.
Donations in money or kind
Up to last year local councils were not even allowed to present mementos or donate educational material to schools as this would be in breach of the law in terms of donation to third parties.
It was only in November last year that the Local Government Department conceded mementos or financial assistance would be allowed as long as they did not exceed €200.
Nonetheless, in 2016, at least six councils, as well as the Southern Regional Committee, all incurred expenditure on items which constitute a donation.
The highest amounts listed in the report were two separate €300 donations by the Żejtun local council – one for the Ġieħ iż-Żejtun Medal and one for complimentary drinks at an unspecified political club.
The Żejtun council, however, insisted that no breaches in regulations were made, saying that the medal was a token of appreciation for voluntary work which had been awarded since 1994, and that the drinks were a part of Żejt iż-Żejtun annual activity.