Twenty of the country’s 30 local councils have managed to secure unqualified audit opinions for the year ending March 31, 2023, as shown in the Report of the Auditor General on the Accounts of Local Authorities.
An unqualified opinion is issued when the financial statements are deemed free from material misstatements.
This marks an improvement from the 2021-22 financial year when only 10 councils received clean audit opinions.
In 2020-21, only five out of 30 councils earned clean audit opinions.
Among the councils that received clean audit opinions in the 2022-23 financial year are Blantyre City, Blantyre District, Chikwawa District, Chiradzulu District, Chitipa District, Dedza District, Likoma District, Karonga District and Lilongwe District councils.
Also receiving clean audit opinions are M’mbelwa District, Mulanje District, Mzuzu City, Nkhotakota District, Nsanje District, Ntcheu District, Phalombe District, Salima District, Thyolo District, Rumphi District and Zomba District councils.
Auditor General Thomas Makiwa has, at the same time, issued 10 qualified audit opinions for the remaining councils.
“I also issued ten qualified (except for) opinions on the following councils: Balaka District, Dowa District, Kasungu District, Machinga District, Mangochi District, Mchinji District, Mwanza District, Neno District, Nkhata- Bay District and Ntchisi District,” Makiwa said.
He added that the audit findings revealed irregularities in expenditure management, receivables, payables, record management and financial statement preparation, among others.
He further said that most of the audit findings are recurring and indicated that councils should take issues of accountability seriously.
“The audit has revealed that most councils failed to manage expenditure in accordance with the provisions of the Public Finance Management Act and other financial regulations, such as Treasury Instructions, Desk Instructions, CDF Guidelines, DDF guidelines and the LA Accounting and FM Procedures Manual.
“This was observed through irregularities such as disallowable, unjustifiable, unaccounted for and unliquidated subsistence allowances; unaccounted for expenditures; expenditure made without following procedures and for non-existent projects; over-payments; and misallocation of expenditure,” the report says.
The audit also revealed that most councils faced difficulties in preparing financial statements in line with Generally Accepted Accounting Principles.
This was evidenced by irregularities such as assets not being revalued, assets not being included in the financial statements, discrepancies between the notes and figures presented on the face of the financial statements, failure to present supporting schedules for the figures and overstatements in the financial statements.
In an interview Wednesday, Malawi Local Government Association Executive Director Hadrod Mkandawire said that financial management in local governments has progressively improved over the past five years.
He attributed this improvement to the enhanced effectiveness and performance outcomes from the Local Government Authorities, as well as strategic, policy and technical support from central government and development partners.
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