The Auditor General, Mr Charles Deguara, today presented to the Speaker of the House of Representatives, Anġlu Farrugia, the Annual Report on the Workings of Local Government for the year 2023.
Fifty-seven (57) Local Councils, six (6) Regional Councils and the Local Councils Association submitted their audited accounts to the National Audit Office (NAO). Despite that these were expected to be received by end of June 2024, eleven (11) Local Councils did not submit the audited financial statements to this Office by the ultimate deadline of mid-October 2024. To this effect, the Auditor General stresses the immediate need for the Councils to submit their audited accounts, as required by law, in a timely manner. Non-submission cannot be tolerated any further.
The NAO once again emphasizes the importance of collective cooperation, which not only strengthens the local communities but also fosters good governance. It was observed that not all Councils demonstrated full commitment and collaborated effectively with the Local Government Auditors during the audit process, causing delays in completing the respective audits. Furthermore, a compliance audit exercise conducted by this Office at Qala Local Council highlighted concerns relating to non-compliance with procurement regulations.
NAO acknowledges that, with the exception of one, all Councils managed to submit a reply to the Management Letter. However, the continued presence of significant shortcomings in these Management Letters is unacceptable. Indeed, NAO strongly believes there is ample room for improvement in the Councils’ internal controls. The recurrence of certain issues, such as accounting errors and weaknesses in fixed asset management, reported consistently year after year, demonstrates lack of effective action to address their underlying causes. Another issue commented upon related to the fact that the Councils’ allocation was not always utilised efficiently and economically, resulting in either budget overruns or, in certain cases, excessive savings of funds.
Other concerns included:
- the qualification with an ‘Except For’ audit opinion of thirty-one (31) Councils; meaning that certain areas could not be audited due to insufficient supporting evidence; and
- four (4) Local Councils had an Emphasis of Matter paragraph in the auditor’s report, highlighting a material uncertainty related to the going concern, implying that they might not be able to meet their financial obligations as they fall due.
This Report analyses in further detail the shortcomings that were identified during the audit carried out on the financial statements as prepared by the Local Authorities.
The full Report can be accessed through NAO website www.nao.gov.mt as well as on NAO Facebook page www.facebook.com/NAOMalta.
