The National Audit Office is sticking to the conclusions reached in a recent report in which Valletta and Għaxaq were among three local councils singled out for not submitting their 2016 audited reports.
The two localities, together with Kalkara, did not meet the deadline for submitting their financial statements for 2016, which expired last April 28. The NAO pointed out that the financial statements had not yet been filed by the end of last October.
The shortcomings were flagged in the Workings of Local Government report, which the NAO published a fortnight ago. Published annually, 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 for 2016 amounted to €33 million.
Read: Lunches, councillors’ allowance among ‘issues’ flagged by NAO
Following the publication of the report, this newspaper sought an explanation from the three councils on why they had missed this deadline.
Valletta mayor Alexiei Dingli noted that, a few years ago, the NAO had appointed an auditor for the council, even though the person had previously served as an accountant for the same council. “We immediately flagged this conflict of interest but the NAO insisted that the auditor should proceed with the audit,” he said.
The NAO-nominated auditor did not deliver the report and, consequently, the audit was not submitted, he added. “On our end, we did everything we should,” Prof. Dingli insisted.
He also pointed out that, on the council’s insistence, the NAO appointed new auditors who finalised the 2015 audit while that for 2016 was under way.
Noting that the council had submitted all paperwork, Prof. Dingli remarked that it was up to the auditors to finish the job. “If they don’t deliver, we cannot present the financial statements. The NAO is fully informed about this,” he said.
But an NAO spokesman told the Times of Malta the facts were quite different from that given by the Valletta council. However, he would not elaborate, saying the NAO felt it should not engage in “futile and unnecessary polemics”, though insisting they stood by their report.
The NAO felt it should not engage in “futile and unnecessary polemics”
The Għaxaq council said it had submitted the unaudited financial accounts but referred this newspaper to the NAO for an explanation on the reason behind the missed deadline.
According to information given by the NAO, the council’s unaudited accounts for 2015 were only submitted in January this year, almost 11 months after the set deadline.
“Obviously, it follows that the 2016 accounts could not be audited before those related to the previous year were finalised,” the NAO spokesman said.
Moreover, he added, by October 2017, the council had yet to give feedback on certain enquiries related to the 2016 financial statement. Such information was only received by the auditors towards the end of last month, the spokesman said.
The Kalkara council declined to comment and referred the questions to the Local Government Department, which, however, insisted that, by law, it could not speak on behalf of any council. Despite advising the Kalkara council to give their official position on the matter no reply was received at the time of writing.
Asked what sanctions could be taken for failing to file the audited accounts, a spokesman for the Local Government Department said not more than one per cent of the annual allocation could be retained until the documents were filed.
However, it was expected that the defaulting councils would be in a position to make their submissions on time next year, the spokesman added.