Mayor objects to naming of councils with deficits

Santa Venera mayor Michael Caruana has called on Auditor General Joseph G. Galea to refrain from listing and naming councils with deficits in their income and expenditure accounts.

In a letter to Mr Galea, Mr Caruana said this was causing considerable damage to councils that used money saved up to carry out long-planned projects, because the public then voiced concern over the supposedly uncontrolled spending of funds.

Mr Caruana said he took exception to comments in the report by Mr Galea on the public accounts for 2003, which referred to local councils whose expenditure in the financial year 2003/4 exceeded their income.

Included in the list was the Santa Venera local council. The financial statements showed that its expenditure was Lm24,578 over the sum allocated to it by the central government.

Mr Caruana said this gave the impression that councils spent more than their income, in breach of financial regulations. The truth was that to carry out some project it had planned, the council would have spent the money saved in previous years.

Mr Caruana said a local council was in breach of financial regulations if it had a negative working capital - a situation where current assets were lower than current liabilities at any point in time. In fact, the Sta Venera council had a positive balance of Lm14,236 on its balance sheet as at March 31, 2004.

"It is felt that unless this is clearly explained in the report, the Auditor General should refrain from listing and naming councils with deficits because this is causing considerable damage to those councils that would have carried out a project after years of planning and preparation," Mr Caruana said.

The feedback the Santa Venera council received from the public was one of concern that the funds allocated to the council were being spent without any control, Mr Caruana told the Auditor General.

In another letter to the public accounts committee chairman Charles Mangion last year, Mr Caruana had suggested that part of the Auditor's report on local councils should be sent to each council to give them the opportunity to send in their comments before the report is discussed by the PAC.

Mr Caruana had told Dr Mangion he felt it was also important that mayors and executive secretaries of local councils should be invited to PAC meetings that discussed the local councils concerned.

This would make local councils more aware not only of the Auditor's report concerning the particular council but also of the council's financial responsibilities, Mr Caruana said.