Finance Minister Margaret Mwanakatwe yesterday told Parliament that the revelations emanating from the Auditor General’s report on local government make sad reading.

Debating on the report and recommendations from the parliamentary committee on local government, Mwanakatwe said there was urgent need for the government to effect punitive measures to deal with misappropriation of public funds in the councils.

She said the report accurately captured the challenges and problems on the operation and low levels of accountability and transparency in local authorities and that contrary to public perception, government was equally worried about what was obtaining in councils.

The report for financial years ended 31st December 2014, 2015 and 2016 revealed that most councils misappropriated about 20 per cent of equalization funds meant for capital projects.

In one instance, the report revealed that a named council secretary and workers had claimed about K350,000 in allowances whilst spending only K5,000 towards service delivery.

Commenting on the findings, Mwanakatwe said the report was an eye opener.

“I commend the work of the Auditor General in undertaking their expanded mandate under the revised public audit act of 2016 to audit local authorities. However, the Auditor General’s work demonstrates that there is need for significant reforming in the governance of local authorities if we are to achieve the vision of the decentralisation policy, enhanced response and accountable governance, and efficient equitable and accountable service delivery. Mr Speaker, I also wish to thank the committee for the work and production of this comprehensive report. I have taken note of the finding and recommendation in the report,” she said.

“The report has accurately captured the challenges and problems on the operations and low levels of accountability and transparency in local authorities. Mr Speaker, the report made very sad reading and I note by listening to both sides of the House that we are on the same page as regards to what are the implications should we do nothing about what’s happening in our local authorities. I want to give the House hope that there is light at the end of the tunnel, which was red, and now I believe it is umber. And Mr Speaker, I want to share the things that government is doing to ensure that the light turns to green. Mr Speaker, as government we are taking steps to address this state of affairs.”

Mwanakatwe said her ministry was working on identifying effective strategies to improve the leadership capacities of councils.

“In this regard, I wish to inform this August House that government has taken measure to address the poor service delivery and low levels of accountability and transparency in local authorities which include the following; firstly, in coordination with the Ministry of Local Government we are working to identify effective strategies to improve the leadership capacities of councils recognising that effective leadership is a cornerstone of good governance,” the minister said.

“Secondly, we are enacting the new enhanced Public Financial Management Act No. 1 of 2018, which will also apply to local authorities and provide punitive sanctions for financial misconduct, financial misappropriation. Thirdly, Mr Speaker, we are establishing a fully-fledged local authority finance department in the Office of the Accountant General to formulate policies on the financial management in local authorities as well as provide effective oversight. Fourthly, Mr Speaker, we are in the process of establishment of the inter-governmental fiscal unit, in the budget office. This unit will spearhead the formulation of policies and have oversight on revenue measures to enhance the capacity of local authorities to generate it’s own resources and support service delivery at local level.”

Mwanakatwe said the ministry would put in place more legal frameworks to regulate the local government administration.

“Mr Speaker, we have reviewed the legal and regulatory framework governing local government administration which includes revision of the local government act, and the rating act. A bill will soon be presented to revise the rating act in order that councils can implement efficient evaluation systems to establish buoyant revenue systems to sufficiently finance and improve service delivery. Mr Speaker, the Office of the Accountant General is working closely with the Zambia Institute of Chartered Accountants with the aim of improving the professionalisation of accountants across the public sector including local authorities. In 2017, ZICA introduced a specialised Diploma in Public Sector Financial Management and therefore, local authorities will be able to ensure that adequately trained professionally qualified staff are employed in critical finance positions,” said Mwanakatwe.

“Mr Speaker, the House may wish to note that government has also developed a risk financial management which is in the process of being operationalised and will also be applicable to local authorities to mitigate the risks. The government is also in the process of developing and finalising a comprehensive strategy to enhance local government management.”

Meanwhile, acting Local Government Minister Professor Nkandu Luo said her ministry was equally worried and concerned with the revelations of abuse of resources.

“Your report of the Committee on Local Government accounts before this House will not go without reaction and comments from my ministry. The committee report has highlighted concerns from the Auditor General regarding the view of operation of the local authorities. Contrary to assertions that government is not worried and concerned by what has been happening in the local authorities, I want to report this evening that my ministry is equally worried and concerned with the matters that have been revealed in this report.