Municipal councils under scrutiny

Municipal councils around the country have come under scrutiny from ratepayers and Government alike after a spate of activities and unfinished projects were brought under the spotlight.

And while some councils cover a larger area when compared with others – in terms of geography, population size and operations – the issues plaguing the organisations were essentially similar.

During this week’s Parliament sitting, Minister for Housing and Local Government Maciu Nalumisa spoke on the recommendations made by the Public Accounts Committee (PAC) calling for a review of municipal council annual reports.

His ministry oversees 13 councils – of two cities and 11 towns – and Mr Nalumisa said many of the issues highlighted in the PAC report were “legacy” issues, and practical strategies were designed to address those.

The minister said the Coalition Government was focused on making municipal councils more accountable, transparent and responsible to the ratepayers, something, he claimed, was missing for the past 15 years. “We want the ratepayers to be able to feel that the councils are for them and to address their concerns and needs,” he said.

“These issues or mess have been created by the past government’s wrong decisions and one was to undermine the municipal councils’ independence.”

Mr Nalumisa said the ministry was collaborating with municipal councils to ensure various issues outlined by the Office of the Auditor General (OAG) over the years were addressed to avoid recurrence of matters in future audit reports.

All council CEOs have been tasked to maintain appropriate internal control measures to keep checks and balances on the deficiencies identified.

Some of the issues and recommendations highlighted by the Public Accounts Committee include: financial statements delay, and numerous delays in delivering correct audit and financial reports remain a longstanding issue within municipal councils, something which Mr Nalumisa said required a need for the “right-skilled personnel”.

He said the personnel would assist the councils in complying with the legislative provisions as far as the finances of the councils were concerned.

“As such, most councils have recruited a manager of finance and filled in the positions in accounts department,” he said.

“Even some councils are still in their recruitment process of hiring accountants and finance officers with the right qualification and extensive experience which could ensure timely preparation of financial statements and having their accounts audited.

“The Ministry of Local Government has modernised the organisations structure of the municipal councils to be in accordance with the services provided by the small, medium and large councils.

“The ministry comprehends that the ‘one size fits all’ concept will not be practical in this situation considering the sizes of the municipal councils, hence, the councils have developed new organisational structures according to services provided by them and position titles at their respective councils.”

According to Mr Nalumisa, the new organisational structure and positions, as well as its role descriptions, would be modified in accordance with the position titles.

He also said some new positions were already advertised by councils that had already amended their organisational structures.

“This process will certainly allow the councils to recruit the best candidates for the job. “Furthermore, the councils have switched to International Financial Reporting Standards (IFRAS). The reports are statements prepared by these councils and aligned to the required international accounting standards.”

Establishment of Robust and Capital Audit Risk

The Ministry of Local Government’s finance team has carried out internal audits of various municipal councils while considering the audit issues highlighted by the OAG, says Local Government Minister Mr Nalumisa.

He said all reports had been compiled and highlighted the issues at the municipal councils and the recommendations to rectify those issues.

“These audits by the ministry will enable the councils to resolve the issues surrounding financial reporting and governance, and internal control deficiencies,” he said.

“The ministry is proposing to have a full complement of internal auditors that will be tasked to carry out timely audits of the council accounts. I am hopeful that with this team, the ministry will be able to resolve almost all the deficiencies and audit findings by the OAG.”

Mr Nalumisa also confirmed his ministry would set up an internal audit and customer service unit to undertake periodical and random audits of municipal councils for compliance with processes and procedures.

“This audit will also establish whether the councils are implementing the recommendations from OAG.” He said municipal councils had also recruited qualified accountants during its recruitments process.

“The ministry intends to have a team of internal auditors that will assist the councils to perform the accounting functions better. The councils are facing financial constraints to recruit suitably qualified accountants by virtue of the Local Government Act of 1972. These councils could share human resources services of other financially stable councils.

“The legislation allows for shared services between two or more councils.”

Strategic Planning and Risk Management Framework

Several strategic plans and annual workplans developed by Fiji’s municipal councils are aligned to the five-year and 20- year National Development Plan. This, Mr Nalumisa said, included the formulation of strategic plans and all additional plans, including risk management framework.

“The councils are prompted to adhere to the strategic plans and annual workplans which certainly determines the efficiency of the councils,” he said.

He said the ministry also organised training for the CEOs, finance and human resource teams of municipal councils.

“Consultations have been held with the municipal councils, Office of the Solicitor-General and the OAG on the relevant policies. This process was fundamental to have documents that could contribute towards good governance and efficiency in councils’ services.

“Together with the development of the policies and guidelines, the ministry has developed a staff policy declaration that needs to be endorsed after officers of the councils have read and understood the various policies and guidelines.

“The CEOs of the municipal Councils are mandated to ensure that officers sign the declaration for record purposes.

“The ministry is also working on new policies, standard operating procedures and guidelines in preparation for the election of new councillors and mayors. This will set the foundation for all municipal councils.” For this purpose, the ministry will partner with development partners like the Commonwealth Local Government Forum to develop training programs for staff and councillors.

Record management

Municipal councils around the country have strengthened areas of record management by implementing a register system. According to Mr Nalumisa, all municipal councils had fixed asset registers that were updated in a timely manner.

“The councils acknowledge the importance of such registers for accurate financial reporting,” he said.

“On the issue of the councils to maintain accurate and updated records and information. Municipal councils have strengthened their areas of record management through the implementation of a records register and have ensured that all accounting records are filed in a sequential order.

“The Ministry of Local Government has also been coordinating with teams of special administrators and CEOs towards strengthening financial accountability. Regular monitoring of the overall financial services is carried out.

“Special Administrators and all CEOs have specific Key Performance Indicators (KPIs) to ensure efficiency and accountability in the municipal elections.”