Local Councils’ Financial Audit Report, Rs 1.2 Billion in Question

The Ministry of Local Government is facing unfavorable reports from the Audit Office regarding the financial management of at least four local authorities. The Councils of Grand-Port, Savanne, and Rivière-Noire, as well as the Curepipe municipality, are under scrutiny for their financial management, which has been deemed defective, with significant anomalies and shortcomings in their accounting practices.

The recent Audit report on the Grand-Port District Council reveals notable anomalies. Market and bus fares amount to approximately Rs 23.3 million and Rs 4.9 million, respectively.

However, the accuracy, existence, and completeness of these figures cannot be confirmed due to several lacunae.

Firstly, no complete register of active stall occupants with their occupation dates was available, and no list of real debtors was provided.

Moreover, 37 bus owners who owed Rs 2,833,250 were classified as “not found on the National Land Transport Authority’s list,” representing 57% of the bus fare debtors for the year, deemed “fictitious.”

Commercial fees, penalties, and interest amounting to Rs 2.2 million cannot guarantee their exhaustivity or accuracy since commercial operators who had ceased operations and new ones registered were not updated in the Council’s database.

Additionally, a payment of Rs 18.2 million made by the Registrar of Companies had not been reconciled with individual merchants’ accounts as of June 30, 2023.

The opening balance of deposits totaling Rs 31.8 million included an amount of Rs 8.2 million from previous balances dating back to July 2020 without proof to confirm its accuracy.

Furthermore, other irregularities were identified regarding revenues from markets and fairs as well as bus fares estimated at approximately Rs 18 million and Rs 1 million, respectively.

The absence of complete files on all active stall occupants and bus operators makes it impossible to confirm the accuracy and completeness of these figures.

Another disturbing aspect highlighted by the Audit Office concerns the pension fund of this local authority, which recorded deficits reaching Rs 499 million.

Savanne District Council’s Finances Under Scrutiny

The Audit Office also examined the finances of the Savanne District Council and identified problems regarding outstanding market and fair fees.

At the end of the year, these arrears totaled approximately Rs 9,410,324. The accounting records indicated that debtors for these fees reached Rs 15,200,633 as of June 30, 2023.

A difference of Rs 5,790,309 between these figures was not explained, and no detailed list of debtors was provided to justify the amounts recorded in the accounts.

Rivière-Noire District Council’s Financial Woes

The Rivière-Noire District Council was also heavily criticized by the Audit Office for its financial management.

The report stated that the existence of properties and installations had not been verified, with no physical inspection conducted by the Council.

The fixed asset register did not always contain all necessary information to identify them.

Moreover, the Audit Office noted that the useful life and value of assets had not been reevaluated annually.

Certain assets, equipment, and installations worth a total of Rs 16,249,881 were recorded with a zero-value account or only Re 1 as of June 30, 2023, which does not reflect their true value at acquisition.

Regarding commercial fees receivable totaling Rs 2,531,000 for non-commercial transactions, completeness and accuracy were not verified.

The document received from the Registrar was not reconciled with the Council’s records.

Curepipe Municipality’s Financial Issues

The Curepipe municipality was not spared by the Audit Office either, which identified several anomalies in its financial management.

The municipality’s investments amounting to Rs 54,992,925 were marked by irregularities since original investment certificates were not produced, making it difficult to verify their completeness and accuracy.

Moreover, the amount of Rs 24,395,599 received by the municipality in respect of claims and rentals from markets and fairs could not be confirmed by the Audit.

It is mentioned that these figures are not supported by a report on individual debtors’ accounts for the Council as of June 30, 2023 or a reconciliation report from the Ministry of Local Government.

The Audit Office also noted that total payments totaling approximately Rs 38 million included incorrectly claimed housing allowance exemptions under local regulations.

The authenticity of around 700 claims sent by the municipality via mail during the financial year was also not verified.

Finally, payments totaling approximately Rs 65.5 million were made to contractors but could not determine whether contract conditions were met and services were provided effectively since original tender documents were not submitted to the Audit Office.

These findings highlighted significant concerns regarding the financial management practices of these local authorities and underscore the need for urgent action to rectify these issues to ensure transparency and accountability in public finances.

Source: Defi Media