The Ministry of Local Government is facing unfavourable reports from the Audit Office regarding the management of accounts in at least four local governments. The district councils of Grand-Port, Savanne and Rivière-Noire, as well as the town hall of Curepipe, are under fire for their financial management deemed to be deficient, with significant anomalies and shortcomings in their accounting practices.

The recent findings of the Audit Office concerning the Grand-Port District Council reveal significant anomalies. Market fees and bus tolls amount to approximately Rs 23.3 million and Rs 4.9 million respectively. However, the accuracy, existence and completeness of these figures cannot be confirmed due to several gaps.

First, no complete register of active occupants of the stalls with their dates of occupation was available and no list of actual debtors was provided. Also, 37 bus owners, who owed Rs 2,833,250, were listed as 'not found in the National Land Transport Authority's list', thus accounting for 57% of the debtors for the year's bus tolls, termed 'fictitious'.

The commercial costs, penalties and associated interests, estimated at Rs 2.2 M, cannot guarantee their completeness or accuracy, because the commercial operators who have ceased their activities and the newly registered ones have not been updated in the Council's database.

In addition, a payment of Rs 18.2 million made by the Registrar of Companies was not cleared with the individual accounts of traders as of June 30, 2023, due to lack of reconciliation. The opening balance of deposits, amounting to Rs 31.8 million, included a sum of Rs 8.2 million from balances prior to July 2020, without supporting documentation to confirm its accuracy.

Finally, other irregularities were identified regarding revenues from markets and fairs, as well as bus tolls, estimated at approximately Rs 18 million and Rs 1 million respectively. The absence of complete records of all active stall occupants and bus operators makes it impossible to confirm the accuracy and completeness of these figures. Another troubling element highlighted by the Audit Office concerns the pension fund of this local authority, which recorded deficits reaching Rs 499 million.

What about the Savanne District Council…

The Audit Office, which examined the finances of the Savanne District Council, identified problems with market and fair fees arrears. At the end of the year, these arrears amounted to approximately Rs 9,410,324. The accounting records indicated that debtors for these fees reached Rs 15,200,633 as of June 30, 2023. A difference of Rs 5,790,309 between these figures was not explained, and no detailed list of debtors was provided to justify the amounts recorded in the accounts.

…and Black River?

The Black River District Council was also heavily criticized by the Audit Office for its financial management. The report states that the existence of properties and facilities and equipment was not verified, with no physical inspections carried out by the Council. The fixed assets register did not always contain all the information needed to identify them.

Also, the Audit Office noted that the useful life and value of assets were not reassessed every year. Some property, equipment and plant worth a total of Rs 16,249,881 were recorded with nil book value and some at only Re 1 as on June 30, 2023, which does not reflect their actual value at acquisition. As regards the trading expenses receivable amounting to Rs 2,531,000 for non-trading transactions, the completeness and accuracy were not verified. The document received from the Registrar was not reconciled with the records of the Board.

Finally, the pension plan of the Black River District Council also presents the same shortcomings as those observed at the level of the Savanne District Council. It records a deficit of approximately Rs 345,383,438 as of June 30, 2023.

Irregularities in Curepipe

The Curepipe town hall was also not spared by the Audit Office, which also identified several anomalies in its financial management. The town hall's investments, amounting to Rs 54,992,925, were marked by irregularities, as the original investment certificates were not produced, making it difficult to verify their completeness and accuracy.

Also, the amount of Rs 24,395,599 received by the town hall as receivables and rentals of markets and fairs could not be confirmed by the Audit. It is mentioned that these figures are not supported by a report on the individual accounts of the Council's debtors as of June 30, 2023, nor by a conciliation report from the system of the Ministry of Local Authorities.

The Audit also observed that debits totalling Rs 38,168,536 wrongly included claims for family housing exempted under local regulations. The authenticity of some 700 claims sent by the municipality by post during the financial year was also not verified.

Finally, payments totalling approximately Rs 65.5 million were made to the contractors, but the Audit could not determine whether the contractual conditions had been respected and the services provided efficiently, as the original tender documents had not been submitted to the Audit.

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