Auditor General Flags 72 Councils Over Revenue Failures

The Auditor General has cited 72 local authorities across the country for failing to adequately collect revenue from various local taxes, fees, charges, licences, levies and permits, raising concerns over the management of public resources at council level.

According to the Auditor General’s 2024 report on the accounts of local authorities, the under-collection of revenue has continued to affect service delivery and financial stability in councils, with significant amounts of expected income either not billed, not collected, or not remitted to the appropriate accounts.

The report states that the 72 councils were identified following an audit of local authorities nationwide, which revealed weaknesses in revenue administration systems, poor enforcement of payment mechanisms, and inadequate monitoring of collections. The Auditor General noted that these failures have contributed to financial constraints that undermine councils’ ability to meet operational obligations and provide essential services to residents.

The audit findings show that revenue sources affected include property rates, market levies, bus station fees, trade licences, parking fees and other statutory charges that councils are mandated to collect under the law. In several cases, councils failed to issue bills on time, while in others, billed amounts were not followed up, resulting in arrears accumulating over extended periods.

The report further indicates that some councils lacked comprehensive revenue registers, making it difficult to track amounts due, amounts collected, and outstanding balances. In other instances, councils did not reconcile revenue records regularly, increasing the risk of revenue leakages and misappropriation.

The Auditor General observed that weak internal controls continued to expose councils to financial losses, noting that cash collections were still prevalent in some local authorities despite policy guidance encouraging electronic and traceable payment methods. The continued use of manual systems was cited as a contributing factor to revenue losses and accountability challenges.

In addition, the report highlights cases where councils failed to enforce penalties on defaulters, allowing businesses and individuals to continue operating without settling outstanding obligations. This, the Auditor General warned, has the effect of discouraging compliance and weakening the revenue base of local authorities.

The Auditor General stated that the under-collection of revenue by councils not only affects service delivery but also increases reliance on central government transfers, placing additional pressure on the national treasury. The report notes that improved revenue performance at local authority level is critical to enhancing fiscal decentralisation and promoting self-sustaining local governance.

The report further points out that some councils recorded revenue shortfalls despite having significant economic activities within their jurisdictions, suggesting inefficiencies in revenue mobilisation rather than a lack of revenue potential. In such cases, councils were advised to review their revenue strategies and strengthen enforcement measures.

To address the challenges, the Auditor General recommended that councils strengthen internal controls, update and maintain accurate revenue registers, and ensure timely billing and follow-up on outstanding amounts. The report also called for increased supervision by council management and the adoption of electronic revenue collection systems to reduce cash handling and improve transparency.

The Auditor General urged the Ministry of Local Government and Rural Development to enhance oversight of councils’ financial management practices and to ensure that corrective measures are implemented where weaknesses are identified. The report emphasised the need for capacity building in financial management and revenue administration at local authority level.

The findings are part of the broader Auditor General’s 2024 report, which examines the use and management of public resources across government institutions and local authorities, with the aim of promoting accountability, efficiency and value for money in public administration.