ONLY 17 out of the 92 local authorities have had their financial results audited for the fiscal year 2022. This was revealed by acting Auditor-General (AG) Rheah Kujinga (RK, pictured) at the Local Authorities Convention held in Masvingo a fortnight ago. This came as government said this week it had rejected the City of Harare’s 2024 budget after failing to comply with several issues, such as lack of functional computer-based organisational systems. Government also said the City of Harare failed to provide solutions to address ‘recurring audit disclaimers’. But revelation that many more local authorities were behind in having their financials audited, exposed non-compliance of the laws by councils. During the convention, Kujinga noted that local authorities were struggling to submit up-to-date financial statements, with some five years behind. Further to that, the AG’s office discovered that some local authorities were not using their devolution funds as intended. Our business reporter, Tafadzwa Mhlanga (TM) caught up with Kujinga and spoke to her about various issues, including governance malpractices that have been found in local authorities.
TM: From your presentation at the Local Authorities Convention, you noted that only 17 out of 92 local authorities have had their financial results audited. What are the most common reasons for failing to submit financial accounts?
RM: In my presentation, I highlighted that as reported in the 2022 Auditor-General’s report, only 17 out of the 92 local authorities had their accounts audited up to the financial year ended December 31, 2022.
Resultantly, 75 local authorities were in arrears. The respective local authorities that failed to submit were in arrears, mainly due to the impact of Covid-19 restrictions.
In addition, inadequate information technology (IT) systems and high staff turnover also impacted negatively on clearing arrear accounts.
TM: You also noted that local authorities are not implementing your recommendations. Based on your assessment, what are the reasons?
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RK: Most of the local authorities with recurring findings are as a result of being in arrears, financial constraints in terms of human resources (HR), information technology software upgrades, and some issues related to inadequate IT systems (some processes are done manually).
TM: In her reports, your predecessor, Mildred Chiri, exposed rampant financial impropriety, corporate governance flaws, and illegal land allocations crippling the local authorities. Is this problem still persisting? If so, can you give more information?
RK: The issues raised previously remain a challenge.
Weaknesses in the maintenance of stand records and irregularities in stand allocations persisted.
TM: The former AG made recommendations which local authorities should adopt to address the challenges highlighted above. Based on your assessment, is there an appetite to embrace these recommendations? Can you elaborate further?
RK: Some local authorities are putting efforts into implementing the recommendations.
However, as highlighted above, due to constraints in terms of IT and HR, the progress in implementing the recommendations has been slow.
TM: What remedial action does the AG institute in cases where authorities fail to implement recommendations?
RK: My mandate is to audit and report to Parliament.
Parliament through the Public Accounts Committee (PAC) exercises oversight over issues that I raise and calls upon the local authorities to appear before the PAC to respond to the issues raised in the Auditor-General’s report.
I also follow up on prior year findings annually and report back to Parliament.
TM: In light of cases of corruption grappling local authorities, does the AG assist law enforcement agents in their effort to curb graft? If so, how much has been done?
RK: We publish our reports and share them with law enforcement agents. To a greater extent, the reports shared have assisted the agencies in pursuing issues of a criminal nature contained therein.
TM: What are some of the irregularities that you have identified that hinder local authorities to discharge their mandate?
RK: Governance issues in my report, weaknesses over revenue collection and debt recovery, procurement of goods and services compromise the ability to provide effective service delivery by local authorities.
TM: What is your take on local authorities operating on unapproved budgets? What do you think is the way forward?
RK: It is a statutory requirement that the budget be approved. The councils should continue to enhance their budgetary processes to enable appropriate approval turnaround time.
TM: Does the AG assist local authorities in terms of capacity building?
RK: The office carries out stakeholder engagements to provide feedback on audits and to share information on expectations on audit engagements.