Government contributing to councils ‘poor performance’

Malawi’s central government has been accused of contributing towards the poor performance of local governments in the country, this is according to the Malawi Local Government Association (Malga).

The association’s Local Authorities Performance Assessment (LAPA) report for the 2019/2020 financial released last month established that the central Government has “ignored” the underlying causes for the poor performance of local councils.

Hadrod Zeru Mkandawire, Malga acting executive director

But Malga, an umbrella body for all local governments in Malawi, says it is regrettable that the central government wants to look “smarter” on the under–performance of the assessed local councils by “hiding” its shortcomings in respect of fulfilling its obligations towards the local councils.

The report exposes glaring public finance management gaps in 28 local councils, ranging from inefficiencies in development planning, budgeting and auditing to contract management and implementation.

Government conducted the LAPA for the 2019/2020 financial year as a precursor for the Performance Based Grant (PBG). Results of the assessment to determine eligibility and amount to be given from the PBG.

Mayor Wild Ndipo

A statement signed by Malga’s leadership, councillor Wild Ndipo and Hadrod Zeru Mkandawire–who are the association’s president and acting executive director, respectively says it expected the Central Government to come out and inform Malawians that it has consistently failed to meet its obligations to make the councils more effective.

“Although there has been tremendous progress in the assignment of expenditure responsibilities, MALGA observes that there are still some gaps that need to be addressed. We have observed that the transfers made by the government do not match with the expenditure responsibilities of the councils,” the two wrote in the statement.

Malga also notes that the development budgets of the sectors are still being retained by the respective government ministries and that government only transfers funds that cover the recurrent expenditures.

According to the 2019/2020 LAPA report, Balaka District Council has emerged the best performer after scoring 67 percent followed by Lilongwe (62 percent) and Mchinji (61). Kasungu and Rumphi are tied on position four with 59 percent.

Worst performers are M’mbelwa, Mangochi and Phalombe which have scored 25 percent each, Machinga (24) and Chiradzulu with 21 percent. On average, councils nationwide scored 41 percent.

On financial management, the report shows that 20 local authorities, representing 71 percent of the districts, registered below average performance with scores ranging from 18.1 percent to 45.5 percent.

The results follow numerous reports which show that councils are pathetic underperformers in some key governance areas that include finance management.

The report also shows that districts such as Chitipa, Karonga, Nkhotakota, Ntcheu, Dowa, Salima, Mangochi, Machinga, Phalombe, Chikwawa, Chiradzulu and Mwanza performed poorly on development planning and budgeting due to poor record keeping.

The situation is worse in procurement with the report showing that there are normally no procurement files, contracts, offer letters, acceptance letters, and the Internal Procurement and Disposal Committees work without proper mandate.

But Malga, in its statement, adds that all these issues in local councils are due to, among others, high vacancy rates especially in finance and procurement as the Central Government has “failed” to fill these vacancy rates.

“Further, the Decentralization Policy instructs the Central Government to transfer 5% of Net National Revenues (NNR) that is, excluding grants to Local Councils, as General Resource Fund (GRF) or Unconditional Grants. However, this requirement is not met due to a number of factors including lack of political will and lack of enforcement/compliance by treasury, among others,” further reads the statement.

It also alleges that all local councils are currently indebted with huge outstanding arrears for utilities, salaries, PAYE and suppliers as the current budgeting system “contradicts” with the matching concept principle and the accruals concept of accounting.

“Some debt herein referred date back 10 years or so thereby raising doubts of the councils abilities to clear the same using the yearly funding and local revenues which are already constrained. This has resulted in increased cases of litigations which are equally difficult and expensive on the part of councils and government. This therefore calls for the need for Government to intervene as a matter of urgency,” reads the statement.

Malga then recommends that central government should consider providing, among other things, a bail-out package for the councils in the 2021/22 financial year to enable them clear long-standing debts such as utility bills in public hospitals.

“Sector budgets and funding should match the devolved functions to councils for effective delivery of services at council level. The principle of funding should be strictly observed. The development budget for the various sectors should be devolved to the councils starting from the 2021/2022 National Budget,” adds the statement.

It also calls upon government to increase allocation to District Development Fund (DDF) and Infrastructure Development Fund (IDF) so that councils can implement development projects that are contained in their District Development Plans (DDPs) and Urban Development Plans.

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