THE Auditor General’s Report on the audits of accounts of local authorities for the financial year 2018 and 2019 has revealed that Ndola City Council misapplied K2,132,951 meant for capital projects to service a loan obtained to procure vehicles for directors, among other things.
The Report stated that the Council received equalisation funds in amounts totalling K43,964,852 out of which K8,792,970 was to be utilised on capital projects but contrary to the act, K2,132,951 was spent on activities not related to capital projects.
“The Local Government Amendment Act No 12 of 2014 requires that a Council should use at least 20% of its equalisation funds received in any financial year to finance capital projects. During the period under review, the Council received equalisation funds in amounts totalling K43,964,852 out of which at least K8,792,970 was to be utilised on capital projects. Contrary to the Act, amounts totalling K2,132,951; 2018 – K2,003,572 and 2019 – K129,379 were spent on activities not related to capital projects such as servicing of loan obtained to procure vehicles for directors, purchase of furniture and office equipment among others,” the Report stated.
“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, 28 payments in amounts totalling K1,000,342 were not supported with documents such as invoices, receipts and account statements.”
The Report stated that seven officers drew fuel from the council pool account totalling K143,718 during the period January to December 2018 despite being paid monthly fuel allowances through the payroll.
“Local Government Minute No MLGH/71/6/93 dated 15th October 2012, requires that employees above the salary scale of LGSS 03 be paid fuel allowance directly through the payroll. Contrary to the regulation, seven officers in salary scale LGSS 03 drew fuel from the pool account in amounts totalling K143,718 during the period from January to December 2018 despite being paid monthly fuel allowances through the payroll. In addition, fuel costing K28,550 was drawn by 24 motor vehicles which were not on the Council’s fleet without authority. Further, fuel coupons and fuel statements for the period under review revealed that fuel costing K164,923 was drawn by 12 non-runner motor vehicles,” the Report stated.
The Report stated that K10,629,165 of plot premiums for 1,015 commercial and residential plots which was offered to the public was collected by the Council.
“In 2018, the Council offered 707 plots of land in various areas to successful applicants from which amounts totalling K2,205,000 were to be collected within a period of three months. However, as at 31st October 2020, amounts totalling K2,102,177 were collected leaving a balance of K102,823 uncollected. Further, the Council was to collect amounts totalling K26,025,550 within a period of three weeks from date of offer as plot premiums for 1,015 commercial and residential plots offered to the public. However, amounts totalling K15,396,385 had been collected as at 31st October 2020 leaving a balance of K10,629,165.Local Authorities Financial Regulation No 52 (1) requires that all receipt forms must be checked as soon as they are received to ensure that they are complete and correctly numbered. Contrary to the regulation, the Council procured 943 receipt books that had the same serial number ranges from which revenue in amounts totalling K1,375,000 was collected,” the report stated.
“Local Authorities Financial Regulation No 28 requires that receipts of all types are preserved for a period of 10 years. However, a scrutiny of the register of accountable documents revealed that 412 receipt books; 23 – toilet, 158 – car park, 120 – market and 111 – bus levy fees issued during the period under review were missing as at 31st October 2020.In this regard, it was not possible to ascertain the amounts of money collected on the missing receipts. Local Government Terms and Conditions of Service No. 105 (d) requires that an advance of salary be repaid within a reasonable period of time but not exceeding six months. Contrary to the terms and conditions of service, salary advances in amounts totalling K103,100 paid to 23 officers during the period under review had not been recovered as at 31st October 2020.”
The Report further stated that as at 31st December 2019, the council owed former and existing employees amounts totalling K71,475,350
“As at 31st December 2019, the Council owed the Zambia Revenue Authority (ZRA), National Pension Scheme Authority (NAPSA) and Local Authority Superannuation Fund (LASF) amounts totalling K88,598,601 in respect of tax and pension contributions. As at 31st December 2019, the Council owed former and existing employees amounts totalling K71,475,350 in respect of accrued leave days, long service bonus and terminal benefits among others,” read the Report.