LOCAL authorities failed to remit statutory obligations including taxes to the Zambia Revenue Authority (ZRA) and membership contributions to NAPSA amounting to a combined K1.7 billion over the two financial years of 2018 and 2019, says the Auditor General.
According to the latest Auditor General’s Report on the Audit of Accounts of Local Authorities for the financial years ended December 31, 2018 and 2019, all 60 local authorities countrywide failed to remit statutory obligations, including taxes to the ZRA and membership contributions to NAPSA, amounting to a combined K1.7 billion over the two financial years of 2018 and 2019.
“The Report has revealed failure to remit statutory obligations as the highest irregularity at K1,693,684,384; failure to settle staff obligations at K276,689,804 and failure to collect revenue at K108,885,954. The implication for failure to remit statutory obligations is that this may disadvantage employees of their benefits at the time of leaving service, while the implication for failure to settle staff obligations may result in low staff morale, ultimately affecting service delivery negatively and possible litigation. In the case of failure to collect revenue, this deprives government and respective institutions of the much-needed revenue for provision of social services for improved service delivery and operations,” Ellen Chikale, the AG’s head of public relations, stated in a press release, Wednesday.
She added that the report also exposed unusually high unsupported payments found at over K20.7 million, while missing payment vouchers were at nearly K19.3 million.
“The report also revealed unsupported payments which stood at K20,762,409, whilst missing payment vouchers were at K19,265,971. The implication of the unsupported payments and missing payment vouchers is that, they promote concealment of wrong doing due to lack of audit trail and supporting documents. other findings raised in the report are failure to develop integrated development plans, poor management of solid waste, failure to update valuation rolls, failure to control markets by the councils, weaknesses in procurement and contract management. The audit also revealed weaknesses in the management of Local Government Equalisation and Constituency Development Funds,” stated Chikale.
“The implications of the above findings range from, the country having Unplanned Settlements, Poor Management of Waste to Poor Service Delivery among others. The Auditor General is concerned that Local Authorities that are expected to provide service at local level have continued to exhibit poor governance in the management of public resources.”
The audit scope covered the accounts and records of Local Authorities for the financial years ended December 31, 2018, and 2019 and in some cases, observations that required updating were reported as at October 31, 2020.
Under the Constitution of Zambia (Amendment) Act No. 2 of 2016, a local authority is competent to levy, impose, recover and retain local taxes.
A local authority may make bylaws to impose a levy on leviable persons owning or occupying property or premises situated within the area of the local authority, leviable persons carrying on a business, trade or occupation within the area of the local authority or the purchase or sale of a commodity within the area of the local authority.
The Council also receives funding through national support in form of the much-sought-after Local Government Equalisation Fund (LGEF), Constituency Development Fund (CDF) and any other grants as government may issue.