A total of 15 local councils and one regional council failed to submit audited financial statements to the National Audit Officer, with only 30 per cent of all councils making the June 2022 deadline. 

"This is an alarming situation which raises serious cause for concern," auditor Charles Deguara said. 

In his annual report on the workings of local government published on Wednesday, Deguara said it was his duty to highlight that the audited financial statements of 15 local councils and one regional council had yet to reach his office. 

"Constituting the highest number ever of such defaulters, this state of affairs is surely unacceptable. Thus, this Office recommends that the Authorities address this deteriorating situation as urgently as possible, even through the application of reasonable sanctions, as deemed necessary," Deguara said. 

The number of councils that failed to submit audited financial statements for 2021, the year under review, was significantly higher than in the previous year when only the Vittoriosa council did not file its audited statements. 

This year, the NAO is still missing the statements from the councils of Vittoriosa, Floriana, Ħamrun, Luqa, Kerċem, Qala, Sliema, Swieqi, Birkirkara, Fgura, Gżira, Mosta, Qormi, St Julian's, Valletta and the Gozo Regional Council.

30% keep to deadline

Of a total of 74 local authorities, only 30 per cent (22 authorities) submitted the audited accounts by the June deadline. This figure increased to 58 by mid-October, the final deadline set by the NAO. 

According to Deguara, some of these delays were primarily a result of the previous year’s audit being either concluded "very late or not concluded at all".

"This, in turn, had a ripple effect on the audit for the financial year 2021 as the time available for audit fieldwork was not sufficient. This was in fact the case for half of the 16 defaulting Councils, namely, Vittoriosa, Floriana, Ħamrun, Luqa, Kerċem, Qala, Sliema and Swieqi," Deguara said. 

In the case of Vittoriosa, Floriana, Ħamrun and Luqa the audits for both financial years 2020 and 2021 were still pending by Wednesday.

In the case of Vittoriosa, the audit for 2019 was also still not concluded, demonstrating what the NAO described as "an absence of accountability".

Acknowledging that nine out of the 16 defaulting councils did not have a full-time executive secretary in the period under review, the NAO said the authorities should address this issue as it is not a "valid justification for not concluding the financial audit".

In fact, a number of other councils which only had a deputy acting executive secretary still managed to submit the statements. 

"This Office also noted that, in the majority of cases, the delays were the result of lack of cooperation on the part of each respective defaulting Council with the Local Government Auditor (LGA), leading to poor audit progress being registered, and at times also bringing the audit process practically to a standstill as related information was not provided to LGA on time," the auditor said. 

Only 22 local authorities get clean audit opinion

Meanwhile, the office also found that only 22 councils were given a clean audit opinion that confirmed the financial records fairly represent the financial position and have been maintained in accordance with International Financial Reporting Standard (IFRS). 

The remaining 36 were issued with a qualified audit opinion which reflects the fact that LGAs were unable to audit certain areas due to restrictions imposed that were beyond the auditors' control.

Independent journalism costs money. Support Times of Malta for the price of a coffee.

Support Us