THE Auditor General’s Report on the audits of accounts of local authorities has revealed that the Lusaka City Council (LCC) failed to remit statutory obligations totalling K912,769,625 in respect of tax and pension.
The Report stated that the Council further owed former and existing employees K54,889,742.
“As at 31st December 2019, the Council owed the Zambia Revenue Authority (ZRA), National Pension Scheme Authority (NAPSA), Local Authority Superannuation Fund (LASF) and Workers Compensation Fund Control Board (WCFCB) amounts totalling K912,769,625 in respect of tax and pension, ZRA K122,508,518, NAPSA K745,349,509, LASF K40,201,674, WCFCB K4,709,924,” the Report stated.
“As at 31st December 2019, the Council owed former and existing employees amounts totalling K54,889,742 in respect of terminal benefits, long service bonus and gratuity some of which had been outstanding from as far back as 2017; terminal benefits K18,965,338, long service bonus K34,843,457, gratuity 1,080,947. During the period under review, the Council budgeted to receive grants from the Ministry of Local Government and to generate funds from various sources in amounts totalling K851,250,595 against which amounts totalling K521,651,066 were received and generated resulting in a negative variance of K329,599,529.”
The Report stated 206 council staff at Intercity Bus Terminus were irregularly paid unspecific bonuses in amounts totalling K129,800 with no authority from the Council.
“Lusaka Intercity Bus Terminus is owned and managed by Lusaka City Council under the department of housing and social services. During the period under review, the Lusaka Intercity Bus Terminus collected income in amounts totalling K32,712,469 against a budget of K45,985,574 resulting in an under collection of K13,273,105. As at 31st December 2019, amounts totalling K32,417,075 had been spent,” the Report stated.
“A review of records, inquiries from management and a physical inspection of the station carried out in April 2020 revealed the following: Unaccounted for Gate Fees – An analysis of information obtained from RTSA on buses that loaded from Intercity Bus Terminus and exited through the gate revealed that a total number of 36,966 exits were recorded in 2019 which translated in bus gate fees amounting to K11,341,700. However, records from the InterCity Bus Terminus revealed that bus gate fees amounting to K10,909,705 were collected in 2019 resulting in a shortfall of K431,995. During the period under review, 206 staff were irregularly paid unspecified bonuses in amounts totalling K129,800 in that there was no authority from the Council.”
The Report further stated that Lusaka City Market did not account for revenue in amounts totalling K241,650 collected from various revenue collection points.
“During the period under review, the Lusaka City Market collected amounts totalling K28,248,548 against a budget of K29,084,815 resulting in an under collection of K836,268. Local Authorities Financial Regulation No. 53 states, ‘every officer who holds receipt forms shall keep a register in which the receipt and issue of all receipt forms shall be promptly entered’. However, Lusaka City Market did not maintain a register of accountable documents thereby making it not possible to ascertain the total number of receipt books that had been received and issued out,” the Report stated.
“Local Authorities Financial Regulation No 72 states, ‘the Treasurer shall ensure that collectors of revenue account for the amount of moneys collected by them on a daily basis’. Contrary to the regulation, Lusaka City Market did not account for revenue in amounts totalling K241,650 collected from various revenue collection points in that the funds were neither banked nor was cash found on hand as at 31st October 2020.”
The Report also stated that 65 payments in amounts totalling K1,071,527 made during the period under review were not supported with documentation such as receipts and purchase orders.
“Terms and conditions of Service for Local Government Officers No 105 (d) requires that an advance of salary shall be repaid within a reasonable period of time but not exceeding six (6) months. Contrary to the terms and conditions of service, salary advances in amounts totalling K55,000 paid to fourteen (14) officers during the period under review had not been recovered as at 31st October 2020. Local Authorities Financial Regulation No 98 (1) states, “all payment vouchers with supporting documents, and any other forms which support a charge entered into the accounts, shall be carefully filed, secured and be readily available for audit”.Contrary to the regulation, 65 payments in amounts totalling K1,071,527 made during the period under review were not supported with documentation such as receipts and purchase orders,” read the Report.
“‘Local Authorities Financial Regulation No 119 states, ‘imprest shall be retired immediately the purpose for which it is issued has been fulfilled’. Contrary to the regulation, accountable imprest in amounts totalling K126,204 issued to 35 officers during the period under review had not been retired as at 31st October 2020. Local Authorities Financial Regulation No. 145 states, ‘a treasurer shall keep proper records of receipts and issue of stocks and stores”. Contrary to the regulation, stores items costing K235,672 (general stores – K187,168 and fuel – K48,504) procured during the period under review were not accounted for in that there were no receipt and disposal details.”