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FIRST REPORT OF THE COMMITTEE ON LOCAL GOVERNANCE, HOUSING AND

CHIEFS’ AFFAIRS FOR THE FOURTH SESSION OF THE TENTH NATIONAL


ASSEMBLY APPOINTED ON 23 SEPTEMBER, 2009

Consisting of:

Mrs R M Musokotwane, MP, (Chairperson); Dr K Kalumba, MP; Major R M Chizhyuka, MP;


Mr H M Malama, MP; Mr D Mwango, MP; Mr E M Sing’ombe, MP; Mr V M Mooya, MP; and
Mr J Shakafuswa, MP.

The Honourable Mr Speaker


National Assembly
Parliament Buildings
LUSAKA

Sir, following the guidance that your Committee should table the Report of your previous
Committee for the Third Session of the Tenth National Assembly, your Committee studied the
Report in detail on 11 November, 2009

Your Committee, Mr Speaker, now have the honour to present the Report.

R M Musokotwane, MP November, 2009


CHAIRPERSON LUSAKA

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REPORT OF THE COMMITTEE ON LOCAL GOVERNANCE, HOUSING AND
CHIEFS’ AFFAIRS FOR THE THIRD SESSION OF THE TENTH NATIONAL
ASSEMBLY APPOINTED ON 21 JANUARY, 2009

Consisting of:

Mr J J Mwiimbu, MP (Chairperson); Mrs R M Musokotwane, MP; Mr H M Malama, MP; Mr G


Mpombo, MP; Mr K Kakusa, MP; Mr D Mwango, MP; Mr C Kambwili, MP; and Mr E M
Sing’ombe, MP.

The Honourable Mr Speaker


National Assembly
Parliament Buildings
LUSAKA

Sir, your Committee have the honour to present their Report for 2009.

Functions of the Committee

2. In accordance with the National Assembly Standing Orders, the functions of the
Committee are to:

(i) study, report and make recommendations to the Government through the House on the
mandate, management and operations of the Ministry of Local Government and Housing,
departments and/or agencies under its portfolio;

(ii) carry out detailed scrutiny of certain activities being undertaken by the Ministry of Local
Government and Housing, departments and/or agencies under its portfolio and make
appropriate recommendations to the House for ultimate consideration by the
Government;

(iii) consider any Bills that may be referred to the Committee by the House; and make, if
necessary, recommendations to the Government on the need to review certain policies
and/or certain existing legislation; and

(iv) consider in detail the annual reports and any other reports of the Ministry of Local
Government and Housing, its departments and/or agencies under its portfolio.

Meetings of the Committee

3. Your Committee held twenty five (25) meetings to conduct business for the year.

Procedure adopted by the Committee

4. During the period under review, your Committee considered the Report of the Minister of
Local Government and Housing for the year 2009. Your Committee also considered the Action-

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Taken Report on your previous Committee’s Report for the Third Session of the Tenth National
Assembly. Principal Officers from the local authorities mentioned in the Minister’s Report were
invited to appear before your Committee at meetings held at Parliament Buildings. Your
Committee also received submissions from stakeholders on topical issues that were under
consideration, namely: 1) the establishment and management of cemeteries in Zambia; and 2) the
management of public parking spaces in Lusaka.

Further, your Committee received an update on the Decentralisation policy from the Secretary to
the Cabinet after which they undertook a five day foreign tour to Uganda to share experiences on
the subject.

PART I

CONSIDERATION OF THE 2009 REPORT OF THE HONOURABLE MINISTER OF


LOCAL GOVERNMENT AND HOUSING ON THE SUMMARISED AUDITED
ACCOUNTS OF LOCAL AUTHORITIES

MANSA MUNICIPAL COUNCIL

Statutory Audit Report and Audit Inspection Report (Constituency Development Funds)
for the period 1 January, 2006 to 31 December, 2006

Over expenditure on Capital Projects: Completion of Civic Hotel: K348,882,999

5. The assessment of receipts and payment accounts revealed an over expenditure on the
Civic Hotel project of K276,309,999. The budget provision was K72, 573,000 against the actual
expenditure of K348, 882,999 which was contrary to Regulation 9 of the Local Authorities
(Financial) Regulations No. 125 of 1992.

In reply, the Town Clerk informed your Committee that the Council had prepared supplementary
estimates that had been submitted to the Ministry of Local Government and Housing for
approval.

In noting the submission, your Committee resolve to await the Minister’s response on the matter.

LUANSHYA MUNICIPAL COUNCIL

Statutory Audit Report and Audit Inspection Report (Constituency Development Funds)
for the period ended 31 December, 2006

Unaccountable for Funds: K487, 539,291

6. The Council did not account for funds by way of providing receipts, acquittal sheets or
other relevant documents to justify the use of funds contrary to Regulation 12 (f) of the Local
Authorities (Financial) Regulations No.125 of 1992.

In reply, the Town Clerk reported that the Council had provided acquittal sheets and other
relevant documents totalling K308,494,493 which had since been verified by the Ministry of

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Local Government and Housing.

Your Committee advise the Town Clerk to observe financial regulations strictly in his Council’s
handling of public funds. They direct that the remaining supporting documents be found without
fail.

SOLWEZI MUNICIPAL COUNCIL

Statutory Audit Report and Audit Inspection Report (Constituency Development Funds)
for the Period 1 January, 2006 to 31 December, 2006

Missing Audit Document

7. It was discovered that forty-eight (48) receipt books were issued during the period
under review to revenue collectors and collection centers but were not returned to the strong
room for safe custody for external audit contrary to Regulation 28 (1) (b) of the Local
Authorities (Financial) Regulation No. 125 of 1992.

In reply, the Town Clerk submitted to your Committee that a search for the documents in
question had revealed that three (3) books were returned but were not signed for in the
register. This was as a result of negligence on the part of the officer who was in charge of
the issuance of the accountable documents. However, this had been addressed and the
issuing officer had since been dismissed from the service of the Council due to gross
negligence of duty.

Your Committee note that only three (3) of the missing forty eight (48) missing receipt
books have been located by the Council leaving a balance of forty five (45) still to be found.
Your Committee deplore this situation as it is a clear indication that the Town Clerk has little
control over his accounting staff. They direct the Town Clerk to ensure that all the receipt
books are found without further delay.

Over Expenditure: K341,106,455

8. An examination of the 2006 budget performance revealed that a total sum of


K341,106,455 was overspent by the Council contrary to section 39(2) of the Local Government
Act Cap 281 of the Laws of Zambia read together with the Local Authorities (Financial)
Regulation Number 10(1) as contained in Statutory Instrument No. 125 of 1992.

In reply, the Town Clerk informed your Committee that the Council had over spent on some
votes which led to the under-estimation in the 2006 General Rate Fund.

Your Committee direct the Town Clerk to prepare supplementary estimates and have them
considered for approval by the Ministry of Local Government and Housing. They await a report
on the matter.

Payment Made Without Supporting Documents: K221,115,738

9. An examination of records revealed that sixty-seven (67) payment vouchers amounting to


K221,115,738 were not adequately supported with relevant documents contrary to Regulation 86
(1) of the Local Authorities (Financial) Regulation No. 125 of 1992.

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In reply, the Town Clerk informed your Committee that the computations of the terminal benefits
were not attached to the payment vouchers but were on the personal files of each retiree.

However, from the auditor’s verification report, your Committee noted that out of the sixty seven
(67) payments without supporting documents, only thirteen (13) totaling K73,500,000 had their
supporting documents availed. The remaining fifty four (54) totaling K147,615,738 remained
unsupported.

Your Committee direct the Town Clerk to find the remaining supporting documents and report
progress to them.

Council Funds used on Electoral Commission of Zambia (ECZ) activities: K3, 400,000

10. An examination of payment vouchers revealed that the Council used K3, 400,000 on
activities of the Electoral Commission of Zambia. There was no evidence of refund by the
Commission to the Council.

In reply, the Town Clerk explained that the Council had used K3, 400,000 on an ECZ programme
and expected to recover the same from the anticipated savings from the by-election to be held in
August 2009.

Your Committee deplore the Town Clerk’s attitude towards the recovery of the money. They
direct the Town Clerk to be more aggressive in his approach by engaging the Electoral
Commission of Zambia on the matter instead of relying on savings from another election. They
wish to be updated on the issue.

Unaccounted for Cash Drawings: K16, 813,600

11. It was discovered that some officers were drawing cash for payment to various payees.
However, a check revealed that a sum of K16, 813,600 was not accounted for.

Your Committee were informed by the Town Clerk that the attachments on the six (6) vouchers
were misplaced due to poor filling on the part of the cashiers as could be seen from the torn
payments vouchers. This situation has since been normalised. However, the cashier involved
was on the run and the matter was under investigation by the Police.

Your Committee resolve to await the outcome of the Police investigation.

Payments Made For Unspecified Purposes: K31, 381,000

12. It was discovered that payments totaling K31, 381,000 were paid without specifying
the purposes for which the Council made the payments contrary to Regulation 79 of the Local
Authorities (Financial) Regulations No. 125 of 1992.

The Town Clerk explained that the findings of the Auditor were correct as the cashier involved
used to draw funds for payment of various Council needs. The cashier committed several
offences which resulted in management reporting him to the Police and he was on the run.
Unfortunately, the said cashier had no arrears thus making it difficult for the Council to make
recoveries from him. Your Committee further heard that the sum of K30,781,000 was paid to the
former Town Clerk who had since been dismissed from the Council. Your Committee also heard
that a total sum of K600,000 for spares for the repair of a vehicle was paid to a driver. However,

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the items were bought from an unrecognised dealer and this made it difficult to prove whether the
items were bought. The same had been recovered from the drivers unpaid salaries.

Your Committee urge the Council to continue pursuing the recovery of all the monies and report
back accordingly.

Non Maintenance of Assets Register

13. An examination of the register of assets during the period under review revealed that the
Council only maintained a listing of assets and inventory without a detailed register of assets
contrary to Regulation 25 (e) of the Local Authorities (Financial) Regulation No. 125 of 1992

The Town Clerk reported that a fixed asset register was in place even at the time of audit.
However, as stated by the Auditor, the Council had no record of details such as date of
acquisition of assets, cost price and the rate of depreciation. This made it difficult to adequately
maintain a fixed asset register with the required details.

In noting the submission, your Committee direct the Town Clerk to follow the Auditor’s advice
and maintain the said register as prescribed in the Finance manual. Your Committee direct the
Ministry of Local Government and Housing to supervise the Council closely to ensure that they
maintain the registers in questions as required.

Payments made from Cash before Banking: K2, 590,000

14. It was revealed that a sum of K2,590,000 was spent by the Council before banking
contrary to Regulation 19 of the Local Authorities (Financial) Regulation No. 12 of 1992.

In reply, the Town Clerk reported that the Council had noted the Auditor’s recommendation and
the situation had since been corrected.

In order to satisfy themselves that the practice has been discontinued by the Council, your
Committee direct the Ministry to carry out a further verification on the matter and report back
accordingly.

PETAUKE DISTRICT COUNCIL

Statutory Audit Report and Audit Inspection Report (Constituency Development Funds)
for the period 1 January, 2006 to 31 December, 2006

Irregular Credit Sales to Council management from the motel bar: K20,534,300

15. It was revealed that management staff was getting beer and drinks on credit almost on a
daily basis. The bar operated like a social club and yet it was a commercial venture.

The Council Secretary submitted to your Committee that the correct amount of credit sales was
K20,501,300 and not K20,534,300 as reported in the Minister’s report. Further, out of the
K20,434,300 credit sales, only K2,811,500 were for Council staff while the balance of
K17,689,800 were credit sales to other clients. A total of K12, 215,500 had been paid back
leaving a balance of K8, 288,000.

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In noting the submission, your Committee direct the Council Secretary to abide by the Auditor’s
advice to manage the motel as a commercial venture to avoid possible losses of funds. They
further direct the Council Secretary to ensure that the balance of K8, 288,000 is recovered, at
once.

CHIBOMBO DISTRICT COUNCIL

Statutory Audit Report and Audit Inspection Report (Constituency Development Funds)
for the period 1 January, 2006 to 31 December, 2006

Payment of Imprest to Officer with Outstanding Imprest K87, 251,463

16. It was revealed that the Council had paid imprests of K 87,251,463 to officers with
outstanding imprests in their names contrary to Regulation 119 of the Local Authorities
(Financial Regulations No 125 of 1992.

In response, the Acting Council Secretary submitted to your Committee that deductions for
unretired imprests in question were being effected from the salaries and wages of all affected
officers and the sum of K 81,606,709.66 had so far been recovered leaving a balance of K
5,644,753.34 still to be recovered.

Your Committee are concerned by the failure by the Council Secretary to recover all the
outstanding imprest and direct him to recover the outstanding sum of K 5,644,753.34 at once.

Over Expenditure on other expenses: K657, 717,176.12

17. It was noted that the budgeted expenses line, Other Expenses, had been overspent without
causing a supplementary budget contrary to Regulation 10 of the Local Authorities (Financial)
Regulations No 125 of 1992.

In response, the Acting Council Secretary submitted to your Committee that the Other Expenses
Vote was overspent because the Council had at the time received a grant of K125, 000,000 which
money was specifically meant to pay retirees who were budgeted for under the same vote (Other
Expenses). However, before receipt of the said money, the Council had started paying the
retirees using its own resources such that when the grant from the Ministry of Local Government
and Housing was received, it increased the expenditure since the said grant could not be diverted
to other uses. Included in the over expended figure was an amount of K31,000,000 which was
used as a top up on the procurement of a Council minibus. The Council had however prepared a
virement in order to normalise this over expenditure.

Your Committee wish to satisfy themselves that the over expenditure has been normalised as
required by financial regulations. They await a report.

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MKUSHI DISTRICT COUNCIL

Statutory Audit Report and Audit Inspection Report (Constituency Development Funds)
for the Period 1 January, 2006 to 31 December, 2006

Irregular Payment of Salaries and Wages on Loose Sheet of Paper instead of a Payroll Sheet:
K140, 530,799.86

18. A review of the payment details for salaries and wages revealed that there had been
weaknesses in the payroll system. This was evidenced by the fact that salaries and wages had not
been paid on officially recognised and acceptable payroll sheets but instead were being paid on
loose sheets of paper which were usually attached to payment vouchers as proof of acquittals.
Apparently, deductions and contributions were not reflected on the same loose sheets but only the
net amount were recorded.

The Council Secretary informed your Committee that the Council had since computerised the
payroll system which automatically captured all statutory deductions and contributions
accordingly.

Your Committee consider this a very serious audit query as a lot of money is being lost through
such omissions. They, therefore, direct the Ministry of Local Government and Housing to have
the matter verified again to ensure that the payroll system is functioning properly.

Payment of Imprests to Officers with Outstanding Imprests: K106,519,650

19. A review of imprests’ records revealed that management had paid imprests amounting
to K106,519,650 to officers with outstanding imprests in their names contrary to Regulation
115(1) of the Local Authorities (Financial) Regulations No. 125 of 1992.

In his submission, the Council Secretary informed your Committee that the imprests in question
were just misplaced at the time of the audit and had since been traced. Further, management had
written to imprest holders over the remaining amount of K21,108,800 who, unfortunately had left
the Council.

Your Committee censure the Council Secretary for poor record keeping which in most cases is
used to conceal malpractices. They direct the Council Secretary to ensure that outstanding
imprests for the staff that had left the Council are recovered from their benefits without fail.

Goods for the Motel bought by Imprests rather than direct by Cheque in the Name of the
Suppliers: K57,190,800

20. It was discovered that purchases for the motel amounting to K57,190,800 had been
paid to third parties in form of imprests rather than direct by cheque in the names of suppliers
contrary to Regulation 89(1) of the Local Authorities (Financial) Regulations No. 125 of 1992.

In his response, the Council Secretary informed your Committee that while management
appreciated the Auditor’s advice, the hospitality industry demanded cash purchases in most cases
because of the nature of goods needed for it to operate, such as foodstuffs and other small items
whose cost would be negligible to be paid by cheques. Management had however limited the
amounts of cash purchases to K400,000 and below while large purchases were bought directly by
cheques.

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Your Committee advise the Council to abide by the Auditor’s recommendation. They further
advise the Council Secretary to devise a petty cash system in order to complement cheque
payments. They direct the Ministry of Local Government and Housing to ensure close
supervision of the Council so that financial regulations are followed strictly in the management of
the motel funds.

No Receipt to confirm Payments of Rentals and failure to deduct withholding Tax: K35, 535,625

21. It was discovered that no receipts or cash sale had been obtained to support the
payments of rentals amounting to K35, 535,625 for Council employees in rented accommodation.
It was further found that there had been no proof that withholding tax had been deducted from the
rentals contrary to the Income Tax Act Cap 323 of the Laws of Zambia.

In his submission, the Council Secretary informed your Committee that management had since
written to all landlords over the deduction of withholding tax to ensure that the tenancy
agreements were adequate enough to facilitate deduction of withholding tax.

Your Committee direct the Council Secretary to find the receipts in respect of the rentals
amounting to K35, 535,625. They further direct the Ministry of Local Government and Housing
to ensure that the Council is complying with financial regulations.

Debts owed to the Motel not recovered: K54,407,592

22. It was discovered that among the outstanding debts at the motel were those accrued by
employees and councillors amounting to K32,283,092 and K22,124,500 respectively bringing
the total amount to K54,407,592.

In reply, the Council Secretary informed your Committee that the Council had paid K22,124,500
for employees who were accommodated at the motel while K21,409,500, owed by councillors,
was written off following a Council resolution. Further, councillors owing the motel had been
written to over the payments of their debts to the motel. The outstanding amount stood at K10,
872,792.

Your Committee urge the Council Secretary to ensure that the outstanding debt amounting to
K10,872,792 is recovered immediately.

Non Maintenance of Stores’ Records and Non Issuance of Goods Received Notes: K43,225,000

23. It was discovered that project materials worth K43,225,000 had neither been entered in
the stores records nor had Goods Received Notes (GRN) issued contrary to Regulation 145 the
Local Authorities (Financial) Regulations No. 125 of 1992.

In his submission, the Council Secretary informed your Committee that the stores records in
question were not presented to the Auditors because they were misplaced at the time of the audit.
These documents had since been found.

To ensure that the traced records have correct entries, your Committee direct the Ministry of
Local Government and Housing to have the matter re-verified.

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CHINSALI DISTRICT COUNCIL

Audit Inspection Report for the period 1 October, 2007 to 30 June, 2008

Utilisation of refuse Bay Grant: K42, 000, 000

24. The grant was deposited in the Chinsali District Council Development Account number
028810008008 held at Finance Bank on 3 January, 2008 and was recorded in the cash book on 7
January, 2008.

The findings are set out below.

a) The Council constructed three refuse bays at the New Market, Old Market and Bus
Station at the cost of K 24,830, 000 as per break down below:

Materials for the three refuse bays 18, 280,000


Design Costs 550, 000
Construction Labour Costs 6 000, 000
Total Cost 24,830,000

However, K3,000,000 for construction labour costs was not paid as at 30 June, 2008 but
was later liquidated on 15 and 16 August, 2008 on Cheque 00001217 (K1m) and
00001216 (K2m) respectively.

b) The sum of K17,170,000 was misapplied and illegally paid to a Mr Kennedy Chishala as
settling in allowance/salary on Cheque numbers 001074 dated 03/ 01/ 2008 (K6,533,000)
and 001080 dated 4 January, 2008 (K11, 533, 200) bringing the total of K18,066,200.

The seconded Principal Officer F N Nasilele approved the payments to Mr Kennedy


Chishala. The settling in allowance was K15,720,648 as reflected on the computation
attached to the payment voucher for Cheque number 001080 dated 4 January, 2008. The
other amount K2, 345, 552 was for his salary in addition to the K6,482,103.41 paid on
Cheque 000904 on 06/11/2007.

Mr Chishala was offered temporal employment as District Treasurer through minute


number MLGH /101/ 16/ 15 dated 27 September, 2007. The Ministry paid him
K10,482,103.41 which included subsistence allowance for ninety days.

The payment of settling allowance of K15,720, 648 was not applicable to Mr Chishala as
he was not appointed on permanent establishment of the Council and had already been
paid through the Ministry.

c) The scrutiny of the computation of the salary for management, which included Mr
Kennedy Chishala during the same period revealed that the following allowances were
paid contrary to non unionised Conditions of Service of 1996:

 personal to holder vehicle allowance paid to all Chief Officers at K720, 000 per month
contrary to paragraph 204 of non-unionised Condition of Service of 1996. Only Principal
Officers of the District Councils were entitled to personal to holder allowance;

 the Treasury Senior Staff and Council Secretary were paid 25% of basic salary as risk

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allowance, which was not enshrined in the Conditions of Service and to which they were
not entitled due to the nature of their jobs;

 furniture allowance was paid at 20% of basic salary contrary to paragraph 191 (b) which
stipulated 8%. This was determined by the Council as provided for in the Conditions of
Service; and

 commuted overtime allowance was paid at 30% of basic salary contrary to Conditions of
Service of 1996 paragraph 208.

The allowances were paid contrary to the Conditions of Service for non-unionised employees of
1996.

In reply, the Council Secretary informed your Committee that Mr K Chishala had been formally
written to asking him to pay back the monies to the Council as directed by the Auditor. The first
letter was written on 2 February, 2009 and a reminder on 11 June 2009. However, the Council
had not received any response from him. In view of this, the Council intended to write to the
Ministry of Local Government and Housing so that the Ministry could commence recoveries of
the K17,170,000 from his retirement benefits since he had retired. Further, all the other
allowances wrongly paid had since been recovered from the concerned officers.

Your Committee view this as a serious audit query as it has become common for many local
authorities to pay allowances that are not in accordance with conditions of service. They direct
the Council Secretary to ensure that the money that was paid wrongly is recovered. They also
direct the Council to ensure disciplinary action is taken against the officers who misled the
Council into approving the irregular allowances. They wait for a progress report on the issues.

Utilisation of Recurrent Grant: K200,000,000

25. The Council received the sum of K200,000,000 as general grant on 20 December, 2007.
It was found that there was no expenditure, which was channeled towards direct provision of
services. The resources which were supposed to go towards service provision were channeled to
pay back funds borrowed from Constituency Development Fund accounts (K21,000,000) and
Nkakula Rest House (K10,000,000). The scrutiny of Chinsali Finance and General Purpose
Committee minutes held on 29 November, 2007 revealed that the Council was owing
Constituency Development Fund Accounts and also approved the borrowing for operational
expenses.

In reply, the Council Secretary informed your Committee that the Council had since stopped
borrowing from the Constituency Development Fund. The funds in question had all been
disbursed to approved projects in the two constituencies, namely, Chinsali and Shiwang’andu.

Your Committee wish to satisfy themselves that the Council has paid back all the amounts it owes
the Constituency Development Fund. They direct the Ministry of Local Government and
Housing to provide a report on the matter.

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CHAVUMA DISTRICT COUNCIL

Statutory Audit Report and Audit Inspection Report (Constituency Development Funds)
for the Period 1 January to 31 December, 2006

Non Maintenance of Staff Personal Files

26. A physical check on personal files revealed that the Council did not maintain personal
staff files for thirteen (13) employees from 1998 except for six (6). Further inquiries revealed that
at the time of separation of Chavuma District Council from Zambezi District Council, members
of staff who were serving under Zambezi District Council had their files still in Chavuma.

In reply, the Council Secretary informed your Committee that at the time of audit some staff files
were still in Zambezi but had since been collected.

Your Committee note the submission by the Council Secretary but resolve to await the Auditor’s
verification report before the matter can be rested.

NAMWALA DISTRICT COUNCIL

Statutory Audit Report and Audit Inspection Report (Constituency Development Funds)
for the Period 1 January, 2006 to 31 December, 2006.

Use of Cheques to post to Cash Book

27. The Council posted expenditure transactions to the cash book using information from the
cheque books instead of paid payment vouchers. As a result, payees on the payment vouchers
and the cash book differed. The approach by the Council was contrary to the provision of the
Local Authorities (Financial) Regulations No. 125 of 1992.

The Council Secretary explained to your Committee that the Auditor’s recommendation was
noted and accounting officers were advised accordingly.

To satisfy themselves that the practice has been stopped, your Committee direct the Ministry of
Local Government and Housing to verify the current status.

Unaccounted for Cash: K25,357,345.33

28. It was discovered that substantial amounts of public funds amounting to K25,357,345.33
were not all accounted for contrary to Regulation 86(1) of the Local Authorities (Financial)
Regulations No. 125 of 1992.

In reply, the Council Secretary admitted that at the time of audit most of the missing vouchers
were not in the custody of the Council because Auditors from Grant Thornton had collected some
of the files for verification of the Council’s indebtedness. Further, some of the few vouchers
which were missing were just misplaced by the paying officer and efforts were made to find
them.

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However, the Ministry in their verification report to your Committee explained that the Council
had only produced supporting documents amounting to K21,273,845.33 leaving a balance of
K4,083,500 still unsupported.

Your Committee caution the Council Secretary against giving incorrect information to your
Committee. They direct the Council Secretary to ensure that supporting documents in respect of
the balance of K4, 083,500 are found at once. Your Committee wonder what disciplinary
measures were taken against the officer who misplaced the vouchers in question.

Unacquitted Payments

29. The Council drew Cheque Number 47 for K4,251,500 as payments of allowances to
councillors and was discovered that three of the councillors did not acquit against their payments
amounting to K765,000 contrary to Regulation 94 of the Local Authorities (Financial)
Regulations No. 125 of 1992.

In reply, the Council Secretary submitted that the Council had examined the books of account
and there was no proof that this money was paid to the councillors or re-deposited. This amount
would, therefore, be recovered from the Paying Officer’s emoluments.

Your Committee view this as a serious query and direct the Council to discipline the officer
concerned in order to deter such practices in future. They will await a progress report.

Non Preparation of Annual Financial Statements

30. It was discovered that the Council did not prepare its 2006 Annual Financial Statement
which was contrary to Section 43 of the Local Government Act, Cap 281 of the Laws of Zambia.

In reply, the Council Secretary reported that the Council was preparing receipts and payments as
provided for under Regulation 47 (1) of the Local Authorities (Financial) Regulations No.125 of
1992 but the Auditor’s recommendation to prepare a complete set of financial statements
including the balance sheet would only be achieved after the assets were valued by professional
valuation surveyors.

Your Committee resolve to await a progress report on the matter.

MPOROKOSO DISTRICT COUNCIL

Statutory Audit Report and Audit Inspection Report (Constituency Development Funds)
for the Period 1 January to 31 December, 2006

Accounting System and Internal Controls

31. A review of the internal controls and the accounting system revealed that both were weak
resulting in the ineffective and inefficient operation of the Council’s core business. The major
weakness was the absence of an internal auditor even though the position existed in the
establishment.

In reply, the Council Secretary informed your Committee that an Internal Auditor had been
employed and three officers in the accounts section had been oriented on how to run the accounts

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department by the Ministry of Local Government and Housing.

In noting the submission by the Council Secretary, your Committee resolve to give the Council
more time to implement the new internal controls. They direct the Ministry of Local Government
and Housing to closely monitor the Council and provide a progress report to them.

Maintenance of Accounting Records

32. It was observed from the books of account that:

a) the cash book had not been ruled off for all the months;

b) deposits and recorded collections had not marched due to weak controls on use of cash at
source;

c) the completeness and accuracy of the accounting records had been doubtful and
questionable due to multiple rubbing/ cancellations and corrections not signed for and
overwriting of figures; and

d) non maintenance of Goods Received Notes (GRNs) for all stock progressively had
compromised the accounting system in stores.

In reply, the Council Secretary informed your Committee that in order to strengthen internal
controls and the accounting system the Council did not renew the contract of the former District
Treasurer and replaced him with the Internal Auditor who was among the three who had been
oriented by the Principal Local Government Auditor.

In noting the submission by the Council Secretary, your Committee resolve to give the Council
more time to implement the new internal controls and maintenance of accounting records. They
direct the Ministry of Local Government and Housing to closely monitor the Council and provide
a progress report to them.

Inter-Account Advances reconciled K3, 736,276.65

33. It was found that no ledgers had been maintained to ensure that the inter-account
advances amounting to K3,736,275.65 had been reconciled and accounted for.

In reply, the Council Secretary informed your Committee that the Chief Accountant paid
K3,000,000 to District Fund Account while the District Fund Account paid K736, 275.65 to
Mikomba Rest House bringing the total to K3, 736,276.65. All the inter-account ledgers and
journals had been prepared and the documents verified. As for the K736, 275.65 which was from
the District Fund to Mikomba Rest House, a ledger had been done.

Your Committee direct the Ministry of Local Government and Housing to have the matter
verified to ensure that the situation has been normalised.

14
CHILUBI DISTRICT COUNCIL

Statutory Audit Report and Audit Inspection Report (Constituency Development Funds)
for the Period 1 January to 31 December, 2006

Unretired Imprests: K3,232,000

34. It was revealed that K3,232,000 in respect of imprests had not been accounted for
contrary to Regulation 119 of the Local Authorities (Financial) Regulations No. 125 of 1992.

The Acting Council Secretary explained to your Committee that a sum of K 2, 400,000 had since
been recovered leaving a balance of K 832,000.

Your Committee direct the Acting Council Secretary to ensure that the remaining K 832,000 is
recovered and this be verified by the Ministry of Local Government and Housing.

Cash Book Maintenance

35. It was revealed that the closing balance for the year ended 31st December, 2005 of
K12,696,238.15, differed with the opening balance on 1 January, 2006 which was
K8,718,238.15. Worse still, the closing balance for December was written in pencil.

In response, the Acting Council Secretary noted that the entry had been made through journal
entry and had been written in indelible ink. Further, the officer was cautioned to be accurate and
the senior officer also was reviewing the cashbook regularly.

Your Committee view this as a very serious audit query as the use of pencil in books of accounts
is not only unprofessional but is often motivated by intention to defraud. They, therefore, direct
the Ministry of Local Government and Housing to have the matter
verified.

Unaccounted for Imprest: K7,000,000

36. A Council official by the name of E. Sikazwe was paid K25,500,000 on cheque 3 May,
2006 for sundry supplies of which only K18,500,000 was retired at the time of the audit, leaving a
balance of K7,000,000 still unretired. This was contrary to Regulation 119 of the Local
Authorities (Financial) Regulations No. 125 of 1992.

In response, the Acting Council Secretary explained to your Committee that the Council had
written the officer to surrender the imprest of K 7, 000, 000.

Your Committee deplore the number of irregularities recorded by the Council, which is clear
indication of weak management at the Council. They direct the Acting Council Secretary to
ensure the money is recovered at once. They also direct the Ministry of Local Government and
Housing to place the Council under close supervision.

15
MUNGWI DISTRICT COUNCIL

Statutory Audit Report and Audit Inspection Report and (Constituency Development
Funds) for the period 1 January, 2006 to 31 December, 2006

Funding and Utilisation Details of Malole Constituency Development Fund Account:


K28,550,000

37. It was observed that the Council had failed to account for funds totaling K28,550,000
purportedly disbursed to cater for administration costs, water and electricity, footballs and
netballs and transport contrary to Regulation 86(1) of the Local Authorities (Financial)
Regulations No. 125 of 1992.

In reply, the Acting Council Secretary submitted to your Committee that the Council had not yet
traced utilisation details in respect of the K28,550,000.

Your Committee are saddened by the Acting Council Secretary’s response and direct the Ministry
of Local Government and Housing to ensure the matter is urgently resolved.

Missing Payment Vouchers: K1, 800,000

38. It was found that two (2) payment vouchers in respect of K1,800,000 were missing at the
time of audit contrary to Regulation 28 of the Local Authorities (Financial) Regulations No. 125
of 1992.

In response, the Acting Council Secretary informed your Committee that the Council was still
looking for the missing payment vouchers.

Your Committee deplore the failure by the Council to locate the payment vouchers in question
which clearly indicates that the Council Secretary is not in control of accounting staff at the
Council. They direct that the missing payment vouchers be traced or the matter be reported to the
full Council for a resolution.

KASAMA MUNICIPAL COUNCIL

Audit Inspection Report on the Council’s books of Accounts for the period 1 January, 2007
to 31 December, 2007

Irregular Expenditure of Government Expenditure without following Ministerial Guidelines:


K395, 000,000

39. The Ministry of Local Government and Housing disbursed a grant amounting to
K395,000,000 to Kasama Municipal with a circular containing guidelines on the utilisation of the
said grant. According to the circular the purpose of the funds was to enable the Council meet
some of the operational costs such as servicing of vehicles and equipment, preparation of
valuation rolls and provision of services. The Town Clerk reported a case of salary arrears to the
Establishment Committee which recommended that management be allowed to use K100,000,000
out of the K395,000,000 for payment of salary arrears. On 24 August, 2007 the receipt of the
grant in question was reported to the Finance Committee for their information. A full Council
meeting adopted the minutes of the Establishment and Finance Committees on 31 August, 2007.

16
Meanwhile the Town Clerk had started spending the funds on 24 July, 2007 the day of receipt, on
the basis of a recommendation from the Establishment Committee whose resolution had not yet
been adopted by Council. By 31 August, 2007 when the Council approved the expenditure the
Town Clerk had already spent K181,330,212, without Council approval.

In response, the Acting Town Clerk submitted to your Committee that this was an oversight on
the part of management at the time because it could have waited for guidelines from Ministry
Headquarters on the utilisation of the said grant. The Council had since retired the entire
management that incurred the irregular expenditure as a deterrent measure to officers who may be
found to be wanting in future.

Your Committee resolve to give the new management at the Council more time in which to
improve the work culture. They direct the Ministry of Local Government and Housing to closely
supervise the Council and provide a report to your Committee.

Misapplication of funds for construction of market: K 16,233,000

40. The Town Clerk transferred K 25,000,000 from the salaries account to the
Chambeshi/Chikumanino market account for the construction of a market on 18 December, 2007.
Upon trailing the funds up to 5 February, 2008 when it was completely utilised, it was discovered
that only K8,767,000 was used to procure pipes for the market ablution block while K16,233,000
was misapplied on other expenditure.

An inspection of the Chambeshi market on 17 April, 2008 revealed that the Council had not yet
fitted the pipes procured for the market. The pipes were bought on 5 February, 2008 at K8,
767,000 but by the date of inspection the pipes were still lying in stores because they did not have
funds to procure pockets of cement needed for the job.

In response, the Acting Town Clerk submitted to your Committee that management agreed with
the Auditor that the funds were utilised for other purposes. However, management had since
sourced funds internally to complete the project. The balance of K5, 619,515 was outstanding.
The pipes that were seen lying at the time of audit had since been fitted using other resources.

Your Committee resolve to await a report on the outstanding amount of K5, 619,515.

Project ledgers not maintained

41. The Council did not maintain project ledgers for projects such as market construction as
such funds for projects were easily diverted to other expenditure and progress monitoring was
difficult because of the absence of details of actual performance which would not be readily
available in ledger format.

In response, the Acting Town Clerk submitted to your Committee that the Council lacked
capacity to retain qualified staff and officers with no skills coordinated the functions of the
Finance Department. The Council had since filled some of the vacant positions with qualified
staff in the finance department. The project ledgers had since been written.

Your Committee disagree with the Acting Town Clerk’s view that preparation and maintenance
of project ledgers required the skills of highly qualified personnel. As a matter of fact, project
ledgers are not prepared by management but by junior staff. They urge the Ministry of Local
Government and Housing to closely monitor the Council and ensure compliance with regulations

17
on the matter. They await a report on the matter.

Failure to Maintain Expenditure Ledgers

42. The Council did not maintain expenditure ledgers for the whole year. The effect was that
the financial reports could be misstated and the values reported could not be trailed to the books
of prime entry.

In response, the Acting Town Clerk submitted to your Committee that the coding system that was
consistent with the budget was not followed such that expenditure that was meant for service
provision was spread across the various votes. The Finance Department had been staffed with
qualified personnel who were now doing the books of account to enhance the accounting system
and internal controls. An internal audit section had been established to ensure compliance.

As in the case of the above query, your Committee disagree with the Acting Town Clerk’s view
that preparation and maintenance of project ledgers required the skills of highly qualified
personnel. As a matter of fact, project ledgers are not prepared by management but by junior
staff. They urge the Ministry of Local Government and Housing to closely monitor the Council
and ensure compliance with regulations on the matter. They await a report on the matter.

Non maintenance of Internal Audit function

43. The Council did not maintain an internal audit section contrary to Regulation 25 of the
Local Authorities (Financial) Regulations No. 125 of 1992.

In response, the Acting Town Clerk submitted that the Council had established an internal audit
section. The Internal Auditor was producing weekly reports evaluating the internal controls. All
payment vouchers were validated on the day the cheque was paid.

In noting the efforts made by the Council, your Committee resolve to give the Council more time
to implement the internal controls in question. They direct the Ministry of Local Government
and Housing to closely monitor how the Council is instituting internal controls and provide a
progress report on the matter.

Payment of advances to Councillors

44. The Council paid advances to some councillors against their sitting allowances. The
practice was unlawful as the payments were not supported by any statutory provisions or
conditions of service as councillors were not full time employees.

In response, the Acting Town Clerk submitted to your Committee that management erred by
paying councillors sitting allowances in advance. The advances had been recovered through
subsequent meetings and allowances were only paid on the day of the meeting.

The verification report by the Auditor, however, indicated that though the concerned councillors
had been written to, the funds in question had not been recovered.

Your Committee urge the Acting Town Clerk to ensure that allowances that were wrongly paid
were recovered from the concerned councillors. They await a progress report on the matter.

18
CHIENGE DISTRICT COUNCIL

Statutory Audit Report and Audit Inspection Report (Constituency Development Funds)
for the Financial Year ended 31 December, 2006

Wrongful Award of Death on Duty Compensation: K42,992,980

45. A check on the payments of terminal benefits revealed that the Council paid the
administrator for the late Council employee James Chungu, a sum of K20,000,000 drawn on
cheque No. 000176 dated 30 September, 2006 against the total terminal benefits of
K53,374,263.86. The computation of the total sum included a component of award of death on
duty compensation amounting to K42,992,980. The conditions of service provides for award of
death on duty compensation for the death of an employee connected to the performance of work.
However, the investigations revealed that the cause of death was not connected to the
performance of work although he died at work.

The Acting Council Secretary stated that the Council would oblige with the recommendation of
the Auditors to recover the K42,992,980 and the administrator had been informed accordingly.

Your Committee are of the view that the matter should be subjected to further investigations since
the officer died at work. They wish to be satisfied that the recommendation by the Auditor to
recover the money from the deceased’s family was justified. They await a report from the
Ministry of Local Government and Housing.

Ineligible Claim of Talk-Time Allowances: K15,720,000

46. A check on allowances paid to senior officers during the period under review revealed
that the Council Chairperson, Principal and Chief Officers were paid K50,000 each per week as
talk-time allowances. The examination further revealed that this came about as a result of
management’s decision to convert the K60,000 monthly telephone allowances to K50,000 weekly
talk-time allowances. This action amounted to improvement in conditions of service by monetary
gain of K15,720,000 without authority from the Council.

In reply, the Acting Council Secretary informed your Committee that the Council had since
approved the talk-time allowance.

Your Committee are disappointed that management took the decision in question without
authority of the Council resulting in the loss of income to the Council. They direct the Acting
Council Secretary to ensure that the money that was paid before authority was granted is
recovered from the concerned officers. They also wish to be informed of the disciplinary action
taken against the officers who took the illegal decision.

Unsupported Payments Vouchers: K11,550,000

47. An examination of payment vouchers revealed that a total sum of K11,550,000


comprising eight (8) transactions had no supporting documents contrary to Regulation 86(1) of
the of Local Authorities (Financial) Regulations No. 125 of 1992.

In reply, the Acting Council Secretary informed your Committee that the Council had only
managed to attach supporting documents amounting to K1,000,000 leaving a balance of
K10,550,000.

19
Your Committee are disappointed that the Council has not dealt with the query with the urgency
that it deserves. They direct the Acting Council Secretary to find the supporting documents in
respect of the balance of K10,550,000, without further delay and report progress.

Excess Expenditure- Supplies and Services: K1,428,010

48. The review of receipts and payments accounts disclosed an over expenditure of
K1,428,010 on the Supplies and Services Vote to the detriment of other items in the budget such
as Provision of Services Vote which enjoyed only 23% against budget provision which was
contrary to Regulation 9 of the Local Authorities (Financial) Regulations No. 125 of 1992.

In reply, the Acting Council Secretary informed your Committee that the Supplies and Services
Vote was reported to the Council by presenting supplementary estimate for consideration.

In line with financial regulations, your Committee urge the Acting Council Secretary to submit
the said supplementary estimates to the Minister of Local Government and Housing for
consideration and approval. They await a report on the matter.

Unaccounted for Materials: K10,275,000

49. A sum of K10,275,000 was drawn in favour of Bornface Sinzala as imprest on 8 July,
2007 to enable him procure materials for rehabilitation of five (5) wells. However, there was no
bill of quantities nor quotations attached to establish what materials were being procured contrary
to Regulation 86(1) of the Local Authorities (Financial) Regulations No. 125 of 1992.

In reply, the Acting Council Secretary informed your Committee that the Council had presented
the bill of quantities to the Auditor at verification.

In noting the submission, your Committee direct the Ministry of Local Government and Housing
to carry out a verification of the materials that were procured and establish whether they were
delivered to the project sites.

KATETE DISTRICT COUNCIL

Statutory Audit Report and Audit Inspection Report (Constituency Development Funds)
for the Period 1 January to 31 December, 2006

Accountable Documents not presented for Audit

50. A total of forty seven (47) accountable documents were not presented for audit contrary
to Regulation 28 of the Local Authorities (Financial) Regulations No. 125 of 1992.

In reply, the Council Secretary submitted that the Council had managed to find thirty three (33)
out of sixty four (64) missing accountable documents leaving a balance of thirty one (31).
Further, the Council had built a strong room in the stores office to avoid misplacing accountable
documents.

Your Committee deplore the Council’s failure to keep accountable documents in safe custody
which clearly indicated that the Council Secretary is not in full control of accounting staff. They
direct that the outstanding documents be traced without fail and a report be made to them.

20
Outstanding Imprests K62, 701,175

51. The Council had not recovered outstanding imprests amounting to K62,701,175 contrary
to Regulation 119 of the Local Authorities (Financial) Regulations No. 125 of 1992.

In reply, the Council Secretary submitted that the Council had retired the sum of K12,266,200 of
the outstanding imprests. A total of K9,209,400 was deducted from salaries while K26,540,900
was deducted from long service bonus. Further, K1,913,000 was recovered from repatriation.
The total recoveries being K37,663,300 leaving a balance of K12,341,075. The Council also
wrote off the sum of K430,000.

Your Committee resolve to await a report on the retirement of the remaining imprests of
K12,341,075.

Unrecovered Advances to Councillors K950,000

52. The Council paid a sum of K950,000 to three (3) councillors as advance although they
were not full time workers and no recoveries had been made.

In reply, the Council Secretary submitted that the three (3) persons in question were no longer
councillors and the Council was still making efforts to find their whereabouts so as to recover the
outstanding advances.

Your Committee note the submission and urge the Council to recover the money in question,
without fail.

ZAMBEZI DISTRICT COUNCIL

Statutory Audit Report and Audit Inspection Report (Constituency Development Funds)
for the Period 1 January to 31 December, 2006

Payments made without supporting documents amounting to K9, 979, 169

53. It was revealed that twenty one (21) payments amounting to K9,979,169 were not
adequately supported with relevant documents contrary to Regulation 98 of the Local Authorities
(Financial) Regulation No. 125 of 1992.

The Council Secretary explained that some of the payment vouchers in question had no
supporting documents but were signed by the payees. This happened because a single payment
was made to one person who acknowledged receipt by signing on the receiving part. All the
required information, including name of payee, national registration card number, address and the
signature were provided. All the supporting documents had been attached to all the payment
vouchers.

Your Committee direct the Council Secretary to ensure that the remaining vouchers are supported
and provide a progress report accordingly.

21
NCHELENGE DISTRICT COUNCIL

Statutory Audit Report and Audit Inspection Report (Constituency Development Funds)
for the Period 1 January to 31 December, 2006

Non Receipt of Funds from Leasing of Tractor:K60,000,000

54. A review of the minutes of the Council revealed that the Council via minute No.
C.606/12/2005 resolved to lease the Council Tractor to Mount Phim Enterprises. According to
the contract agreement entered into and signed on 27 May, 2005, Mount Phim Enterprises was to
pay a total of K4,000,000 broken down as, K3,500,000 for transport and K500,000 for wear and
tear per month, bringing the total outstanding to K60,000,000.

In response, the Council Secretary submitted to your Committee that the Council resolved to
commence legal proceedings against the Company in question to recover the debt. The Council
tried to sue at the Magistrate’s Court in Mansa but were advised to seek redress in the High Court
in Kitwe or Lusaka as the Magistrate’s Court could not handle cases involving the amount in
question. Your Committee heard that considering the costs involved in travelling to Lusaka or
Kitwe the Council decided to write off the debt. Further, the person who hired the tractor
changed residence from Mansa to Lusaka and the Council had failed to establish his exact
residence.

Your Committee disagree with the suggestion by the Council Secretary to write off the debt in
question. They are of the view that the Council has not done enough to recover the debt and
deplore this negative attitude by the Council. They direct the Council Secretary to step up efforts
to locate the debtor and recover the money. They wish to be availed with a progress report.

Misapplication of Grant: K120,000,000

55. An examination of grants remitted to the Council revealed that a sum of K120,000,000
which was received from the Ministry of Local Government and Housing with express
instructions that 70% should go towards service provision and 30% towards general
administration was misapplied. Management instead resolved to pay K103,000,000 towards
salary arrears which accounted for 86% of the total grant contrary to the guidelines.

In response, the Council Secretary submitted to your Committee that the Council wrote to the
Minister of Local Government and Housing to seek ratification of the expenditure and a response
was being awaited on the same.

Your Committee resolve to await the response from the Ministry of Local Government and
Housing on the matter. They direct the Council Secretary to abide by laid down procedures, in
future.

Multiple issuance and non recovery of imprests: K 33,158,500

56. A check on special imprest to officers revealed that a total sum of K33, 158,500
involving four (4) officers remained long outstanding. Further scrutiny revealed that subsequent
imprests were advanced to the officers despite the fact that they had outstanding amounts to their
names contrary to Regulations 115 (1) of the Local Authorities (Financial) Regulations No. 125
of 1992.

22
In response, the Council Secretary submitted to your Committee that the correct amount of
outstanding imprest for the period under review was K15, 858,500 and not K33,158,500 as stated
by the Auditor. The K17,300,000 was imprest outstanding for the year 2007 which was not under
review. Further, the Council resolved to start making recoveries from the affected officers at
25% of their net salary/wage; starting, in the month of December, 2008. The Council also
resolved to write off the unretired imprest in respect of Ms Fridah Mtonga as the officer who was
only seconded to the Council from by the Nchelenge District Community Development office
had since passed away. The Council had since made recoveries amounting to K11, 898,727.

In noting the submission by the Council Secretary, your Committee direct the Ministry of Local
Government and Housing to advise on the correct amount of the unretired imprest. They, further,
direct the Council Secretary to ensure the remaining imprest is recovered and report progress.

Payment made against cash collection: K25, 504,614.30

57. A total sum of K25, 504,614.30 from the total receipt of K28, 843,000 was used directly
from collections contrary to the Regulation 19 (1) of the Local Authorities Financial Regulation
No. 125 of 1992.

In response, the Council Secretary submitted to your Committee that the Council had noted the
advice from the Auditor and would in future take action against such officers. Further, the
Treasury Department was being encouraged to follow financial regulations strictly.

Your Committee, in noting the submission by the Council Secretary, direct that to strengthen
accountability and promote transparency in the management of Council funds, action should be
taken against officers who facilitated the cash transactions in question.

They await a report on the matter.

Poor Payroll Management: K8, 000,000

58. The assessment of payroll management revealed that management did not keep or
maintain a reliable and transparent payroll records amongst other payments during the year. It
was discovered that a total of K8,000,000 cash payment comprising seven payment vouchers to
seven staff members was paid purportedly against nine (9) months salary/wage arrears.

In response, the Council Secretary submitted to your Committee that the advice was noted and the
Council had opened salaries/wage ledger accounts for all staff members which were being
updated on the monthly basis. Further, management had opened a salaries/wage account with
NATSAVE bank where money was deposited to allow it accumulate to pay salary/wage in full.

In noting the submission, your Committee wish to satisfy themselves that the Auditor’s advice
has been complied with in full. They direct the Ministry of Local Government and Housing to
ensure that the current status is verified.

Misapplication of Market Grant: K20,000,000

59. An examination of specific grants to the Council from the Ministry of Local Government
and Housing revealed that a grant amounting to K20,000,000 receipted on General Receipt No.
19836 on 16th September, 2006 was misapplied.

23
In response, the Council Secretary submitted to your Committee that it was not the whole
K20,000,000 that was misapplied. It was only K7, 574,775 broken down as K5,000,000 direct
transfer to the District Fund Account and K2,574,775 paid to a former Council Secretary. So far
K2, 000,000 had been re-imbursed to the Market Fund Account while the balance would be paid
back in installments of K1, 000,000 per month effective from July, 2009.

Your Committee direct the Council Secretary to pay back the money at once and provide an
update on the matter.

LUSAKA CITY COUNCIL

Statutory Audit Report for the period year ended 31 December, 2001 to 31 December, 2005

Strategic Plan

60. A review of the strategic plan for the period 1999 to 2004 revealed that the last strategic
plan of the Lusaka City Council lapsed in 2004 and it had never been revised.

In reply, the Town Clerk explained to your Committee that the process of reviewing the strategic
plan for the period 1999 to 2004 started in 2007 which culminated in the development of a
strategic plan for the period 2009 to 2013 which was in draft form.

Your Committee view this as a very serious query as it is a clear indication that the Council is
operating without a clear vision which could be followed and monitored by all stakeholders.
They urge the Council to ensure that the said plan is completed and approved without further
delay and provide a progress report on the matter.

Lack of an Integrated Accounting System

61. The Council did not have an integrated accounting system that ensured that all Council
activities and transactions were accounted for properly. The accounting arrangement comprised a
combination of stand alone manual ledgers, registers and microsoft excel spreadsheets.

In reply, the Town Clerk informed your Committee that the Lusaka City Council had procured a
pastel accounting system in the year 2007. The package included payables, receivable, fixed
assets and inventory. He noted that the said system was running on an independent domain on
the Lusaka City Council Area Network. The system was, however, only being implemented by a
selected number of accountants. The chart of accounts had been established in the system and the
integration was in the process. Data capture was also in the process.

In noting the progress recorded by the Council, your Committee urge the Town Clerk to ensure
that the accounting system at the Council is completely integrated and provide a progress report.

Retention of Records

62. It was observed that there was no effective records management and control. The
number of missing documents which were required for the audit indicated that there was no
documentation management and retention policy employed by the Council.

The Town Clerk informed your Committee that there was a filling system in place which was

24
convenient for the Council and therefore did not understand what was being recommended by
the Auditors.

In noting the submission, your Committee direct the Ministry of Local Government and
Housing to verify the matter and clarify to the Council what the Auditors were recommending.
They await a progress report.

Outdated Valuation Roll

63. The Council did not make adequate budgetary provisions to ensure that valuation rolls
and supplementary rolls were prepared in a timely manner to ensure that rateable values reflected
fair values of the properties.
The Town Clerk responded that the Council agreed with the Auditors’ view on the need to update
the current valuation roll. Currently the Council was conducting a main valuation roll. It was
estimated that the revaluation exercise would end by August 2009.

Your Committee resolve to await a progress report on the matter.

Ground Rent System

64. The Council implemented a new system in August 2004 to deal with matters relating to
ground rent income and debtors. The system had not been fully updated. The migration of the
ground rent system to the oracle system had only been in November, 2005 and most properties
had not yet been migrated.

In reply, the Town Clerk explained that the properties which were not migrated from the old
platform to the new platform, did not meet the requirements of the new system which meant that
some mandatory information on these properties was missing such as name of property owner
and the National Registration Card number. The updating of the new platform was a continuous
process.

In agreeing with the Town Clerk that the process is on-going, your Committee urge the Council
to step up the process of transferring data from the old system to the new one. They wish to
receive a progress report on the matter.

Fragmented usage of information technology

65. It was noted that the usage of information technology in the Council was fragmented with
IT only being used in limited areas of the Council.

The Town Clerk submitted that the Council’s cash inflow could not allow maximum provision of
IT infrastructure to all members of staff. Despite the given financial situation, the Council had
just completed the upgrading of the Local Area Network (LAN) spanning across the entire Civic
Center Building including peri-urban offices. This would enable the extension of all
computerised systems to all relevant users in the Council. At the same time, the Council had
embarked on a project to extend its computerised system to all the peri-urban site offices through
a Wide Area Network (WAN). This could also be appreciated through the provision of the pastel
system to the Accountants.

While recognising the work the Council is doing, your Committee resolve to await a progress
report on the full operationalisation of the information technology.

25
Fixed Assets Management

66. The Council did not have a fixed assets policy. Accounting practice required that fixed
assets management should include all the necessary information required for easy verification and
tracing of all fixed assets. The Council did not have a policy on disposal or replacements.

In reply, the Town Clerk informed your Committee that the Council did not have policy in place
on disposals and replacements of fixed assets but it was guided by the Local Government Act.
The cost benefit analysis undertaken revealed that the cost of hiring an external valuer was far
more than the proceeds realised from the sale of fixed assets. The Council had already engaged
the Government valuation department to undertake the valuation of fixed assets at a cost of K60
million. This cost would exceed the proceeds to be realised from the sale of fixed assets.

Your Committee are saddened by the Council’s view that they do not need to have a specific
policy on the disposal and replacement of fixed assets and that the Local Government Act was
adequate for the purpose. They direct the Ministry of Local Government and Housing to assist
the Council comprehend and implement what is being recommended by the Auditor.

Lack of Supporting Documentation

67. It was observed that there were missing supporting documentation including original
invoices for the majority of additions to fixed assets for the period under review in respect of
ABA 6809, AAX 4349, Ibex Hill Housing and furniture and fittings.

In reply, the Town Clerk explained that the documentation pertaining to the properties in question
were still being looked for.

In noting the submission by the Town Clerk, your Committee direct him to find the documents in
question and have them verified my the Ministry of Local Government and Housing.

The Council owned Properties not on the Title

68. It was reviewed that most Council owned properties did not have certificates of title such
as Civic Center, Chelston Shopping Complex, Northmead Shopping Center, Kabwata Sports
Complex, Sheki Sheki Warehouse and offices and 10 Ibex Hill Houses.

In reply, the Town Clerk explained that while it was correct that the Chelston Shopping Complex
and the Ibex Hills houses were not on title, the Civic Center and Northmead shopping complex
had title. Further, the Sheki Sheki warehouse and offices were sold off.

Your Committee deplore the queries regarding inadequate documentation for Council properties
which is a clear indication that the Town Clerk is not in full control of the staff handling legal
issues. They direct the Town Clerk to ensure that all Council properties are put on title without
delay.

Containers Debtors position

69. The debtors’ position on levies for containers in various parts of the City were
significantly overstated. The confirmations to the business that operated from containers
indicated that most of these containers were non-existent. The Council had continued to accrue

26
this income despite not having a comprehensive and confirmed database on the containers
operated in various parts of the city.

In reply, the Town Clerk stated that the Council took note of the recommendations made
regarding containers debtors position and thought that further verification was needed upon which
recommendation, the Council would write off those that were non-existent.

Your Committee note the submission and resolve to await a progress report.

Outstanding PAYE

70. The Council had not in the five years under review (2001-2005) remitted to Zambia
Revenue Authority (ZRA), PAYE deducted from the Payroll. The extent of the liability in the
books of the Council was K11, 511,336,206.55 as at 2005.

In reply, the Town Clerk noted that the observation was correct, as no remittance had been made
to ZRA due to financial constraints.

Your Committee sympathise with the position the Council has found themselves in but are
disappointed that the Council has not shown any determination to correct the situation. They
direct the Council to explore innovative ways of dealing with the matter, including entering into
debt swap arrangements with the concerned institution. They resolve to await a report on the
matter.

Stock Management

71. There was no robust stock management system that monitored consumption by each cost
center, condition of stock and age of stocks and audit trail for stocks transferred to outlying
regional offices. No stock-taking was undertaken in the stores department to determine the level
of stocks and condition.

In reply, the Town Clerk explained that the stores management system was developed in-house in
2007 to capture both stock and non-stock items. The system had attributes set out below.

 Able to capture the suppliers registered with the Lusaka City Council;
 Creation of catalogue numbers for each and every item;
 Receiving stationary and hardware items purchased from suppliers with their total value;
 Issuing stores items and at the same time reducing stock quantities after each issuance; and
 Able to generate reports such as stores ledger, list of suppliers.

The Town Clerk further submitted that the age stock was indicated in the annual stocking report.
Stocktaking was conducted every last week in the month of December with weekly stock counts
conducted as well.

Your Committee note that there is an apparent conflict in interpretation of what an ideal stock
management system is. They, therefore, direct the Ministry of Local Government and Housing to
assist the Council comprehend what is being recommended by the Auditors.

27
Procurement Policy

72. It was observed that the Council did not have a procurement policy or manual in place.
Reliance was placed on the general procurement guidelines from the Tender Board. These
guidelines set a general standard on procurement for all public institutions and were not specific
to the size of the operation of Lusaka City Council.

In response, the Town Clerk informed your Committee that the Council’s procurement policy was
based on the Zambia Tender Board Act. The internal procurements policy formulated by Council
derived its contents from the Zambia Tender Board Act which was not superseded.

Your Committee note that this is another matter that requires the Ministry to assist the Council to
appreciate what is being recommended by the Auditors. They await a report on the matter.

Amounts on Vouchers not on Daily Expenditure analysis

73. A random sample of some of the available vouchers for 2005 revealed that an amount of
K119,240,213 appearing on sampled vouchers was not reflecting on the daily expenditure
analysis report contrary to Regulation 96 of the Local Authorities (Financial) Regulations No.
125 of 1992.

In response, the Town Clerk explained that the observation was not correct as the daily
expenditure report represented the actual expenditure made on a particular day. The amounts
referred to in the management report were picked by the Auditors from purchase orders which
may not have been paid on those particular days for them to appear on daily expenditure report.
Orders prepared at a particular time may be paid later depending on the availability of funds.
Once paid, they were then captured onto the daily expenditure report on that particular day.

However, the Auditor, in his verification report, advised your Committee that the query still stood
as no documentation had been presented by the Council to address the concerns raised in the
audit.

Your Committee direct the Ministry of Local Government and Housing to have the matter
verified by a different auditor. Your Committee await a report on the matter.

KITWE CITY COUNCIL

Statutory Audit Report for the period 1 January 2001 to 31 December, 2005

Cobol System

74. The cobol system which the Council was using for its billing and payroll purposes was
obsolete and was no longer effective for the maintenance of information. The system was fraught
with considerable shortcomings in that data stored on the hard drive from the earlier years had to
be deleted and stored on floppy disks to create space on the hard drive for the processing of
information and data for the current years.

The Town Clerk informed your Committee that the Council was in the process of procuring a
modem accounting system in order to cope with the size of the billing requirements. The same
had been included in the Council’s 2009 budget estimates at a cost of K500 million.

28
Your Committee direct the Town Clerk to provide a progress report on the matter by the end of
December, 2009.

Accounting Controls and Records

75. The status of the accounting records for the three years under review was unsatisfactory.
There was no formal record management policy in operation in the Council. Accounting records
were manually maintained and there were no proper laid down accounting and control procedures
that would have assisted a conducive and reliable processing and production of financial
information. Supporting documentation were either mislaid or lost, a situation which had led to
the poor statement of affairs at the local authority.

The Town Clerk informed your Committee that the query was unfortunate and was as a result of a
prolonged strike action by unionised council employees in 2001 and part of 2002. However, the
requirements set by the financial regulations and other reporting standards always took
precedence in the daily processing of the transactions.

Your Committee direct the Ministry of Local Government and Housing to have the matter
verified to ensure the situation has been normalised. They will await a report on the matter.

Quality of employees’ records

76. It was noted that there were some inconsistencies between employee information
maintained in the personnel section and establishment section which was responsible for the
payroll function contrary to Regulation 28(d) of the Local Authorities (Financial) Regulations
No. 125 of 1992.

In reply, the Town Clerk informed your Committee that in the interim the Council had started
improving on the flow of documentation to the relevant sections that required such information.
As a permanent solution, the Council was in the process of procuring payroll software that linked
personnel records to establishment section operations and the same had been included in the 2009
budget.

In noting the submission, your Committee wish to satisfy themselves that the situation has been
normalised before the query can be rested. They direct the Ministry of Local Government and
Housing to provide a progress report on the matter.

Maintenance of a Fixed Assets Register

77. The Council only maintained an asset register for motor vehicles. It had not constructed
a comprehensive fixed assets register that encompassed leasehold land and buildings, motor
vehicles, plant and machinery, fixtures and fittings and furniture owned by the Council contrary
to Regulation 25 of the Local Authorities (Financial) Regulations No. 125 of 1992.

In reply, the Town Clerk informed your Committee that the motor vehicles asset register was
constantly updated except that it had not yet been computerised. The other fixed asset registers
were on listing level and a fixed asset module to computerise the same had been procured
although it needed upgrading.

Your Committee, in noting the work being done by the Council, resolve to await an update on the
matter.

29
Payment from daily cash collections: K88,684,850

78. A test check on the revenue cycle revealed that cash payments were made from daily
cash collections without authority from any of the standing regulations. The cash payments were
contrary to Regulations 89 (I) of the Local Authorities (Financial) Regulations No. 125 of 1992.

In reply, the Town Clerk informed your Committee that measures had been put in place to stop
the practice. The Council had introduced a K5 million weekly imprest system.

However, the Auditor reported to your Committee that although the imprest officer had been
identified, the imprest system was not yet operational.

Your Committee direct the Ministry of Local Government and Housing to have the matter re-
verified to ascertain the obtaining situation.

Standing Imprest limits

79. It was observed that the Council had no limits for the standing imprest. The operation of
standing imprest was not governed by subsidiary regulations to prescribe the value and nature of
payments to be made from the imprest contrary to Regulation 113 of the Local Authorities
(Financial) Regulations No. 125 of 1992.

In reply, the Town Clerk informed your Committee that the Council had set a K5 million weekly
cash imprest from which certain payments could be made in order to safeguard the use of imprest
and avoid cash payments from cash collections.

As in the above query, your Committee direct the Ministry of Local Government and Housing to
have the matter re-verified to ascertain the obtaining situation.

NDOLA CITY COUNCIL

Statutory Audit Report for the period 1 January, 2001 to 31 December, 2005

Pastel Accounting System

80. The Council was using the pastel accounting system for the processing of accounting
transactions. Only two staff in accountancy section were competent to use the pastel accounting
package. The inputting of income and payments transactions was not linked to the pastel
accounting system. The accounting system was not integrated. The billing system was done
using oracle system, block figures of income and expenditure were done in pastel accounting
system while the management accounts were done using excel spreadsheet.

In reply, the Town Clerk informed your Committee that the pastel provider, Classics Computer,
had trained staff on the use of pastel accounting for a duration of two weeks. The limitation of
the oracle system was integrating with the pastel accounting package. The Council had opted to
migrate to the palmsoft accounting package which had a revenue and payments integrated system.
The Council had planned to implement this by December, 2009.

While noting what the Council was doing to address the Auditor’s recommendations, your
Committee resolve to await a progress report on the matter.

30
Revaluation and disposal of Assets

81. The Council made revaluations of assets with no supporting documentation on how the
figures were arrived at. In 2001, motor vehicles were revalued at K1,299,328,000. Further in
2002, land and buildings were revalued at K2,621,225,000 without a valuation report to support
the figure. While in 2003, the Council disposed of 9 motor vehicles at the cost of K85,449,000
without following the laid down procedures in accordance with the Local Government Act CAP
281 of the laws of Zambia. The Council did not obtain a valuation of the motor vehicles from the
department responsible for valuation of property or a valuer approved by the Minister before sale
of any Council assets.

In reply, the Town Clerk informed your Committee that the current stock taking exercise on fixed
assets would enable Council to determine the adjustable value in the 2005 financial statements.

Your Committee observe that this is an important audit query and resolve to await a progress
report on the matter.

Maintenance of Payables Ledger

82. It was observed that payables ledgers for various suppliers were not maintained. Further
the ledgers were not updated for payments on outstanding balances and goods and services
received. For instance, important details of goods and/or services received as well as cheque
numbers for payments were not recorded in the ledger. Amounts included as payables balances
were obtained from the last payment vouchers for the years under review.

In reply, the Town Clerk informed your Committee that a migration to the palmsoft accounting
package would enhance the system of maintenance of the payable ledgers because payments
would be generated through the computerised system.

In noting the submission, your Committee direct the Ministry of Local Government and Housing
to verify the matter and establish what the current practice is.

NAKONDE DISTRICT COUNCIL

Statutory Audit Report and Audit Inspection Report (Constituency Development Funds)
for the Period 1 January, 2006 to 31 December, 2006.

Irregular Payment of Board Allowances to a Councillor for attending Board Meetings: K950,
000

83. It was discovered that a councillor nominated to sit on the District Education Board had
received sitting allowances amounting to K950,000 from the Council instead of the District
Educations Board contrary to Regulation 97 of the Local Authorities (Financial) Regulations No.
125 of 1992.

In response, the Council Secretary explained to your Committee that the Council regretted the
oversight and had since replaced the named councillor with another one who resided within
Nakonde to avoid such similar payment of allowances. However, the councillor in question was
no longer a member of the Council, making it difficult for the Council to recover the monies.

31
In noting the action taken by the Council, your Committee urge the Council to subject the matter
to a Council resolution for a decision. Your Committee resolve to await a progress report.

Advance not recovered from Kabompo District Council Secretary: K 400,000

84. It was discovered that the Council advanced a sum of K400,000 to the Council Secretary
for Kabompo District Council but there was no documentary proof to the effect that the advance
had been repaid.

In reply, the Council Secretary noted that a follow up had been made and the statement of account
to remind the said officer had been written and sent.

Your Committee urge the Council to ensure the said amount is recovered without fail. They
await a progress report on the matter.

Unjustified Payments of Subsistence Allowances to Councillors: K3,880,500

85. It was discovered during audit that councillors claimed five (5) nights each as subsistence
allowance twice in the same day for one (1) meeting. This was not only irregular but tantamount
to misappropriation and contrary to Order No. 14 of 2006 on the councillors’ allowances.

The Council Secretary reported that this was as a result of a postponement of the meeting.
Otherwise the management gave advice on this matter and would ensure that such an omission
did not recur.

In noting the submission, your Committee urge the Council to ensure that the payments that were
wrongly made were reversed by recovering the same from the concerned councillors. They
resolve to await a report from the Ministry of Local Government and Housing on the matter.

LUWINGU DISTRICT COUNCIL

Statutory Audit Report and Audit Inspection Report (Constituency Development Funds)
for the Period 1 January to 31 December, 2006

Anomalies of Recorded Information in the Accounting Records

86. It was observed from the books of accounts that there was no justification why
management had failed to update the valuation roll.

In reply, the Council Secretary informed your Committee that management had failed to update
the valuation roll because the exercise was too costly and the Council lacked capacity in terms of
funds to implement it. However, the Council had managed to solicit for funds from the Irish Aid
and Constituency Development Fund and some properties had already been surveyed and the
Council had appointed Government valuers for the exercise.

Your Committee resolve to await a report on the matter.

Unaccounted for Cash Balances or Partially Retired Imprests not recovered

87. It was noted that all cash balances in the sums of K21,441,940 and K15,977,070 from

32
partially retired imprests for Isandulula and Chulung’oma Rest Houses respectively had not been
recovered and accounted for contrary to Regulations 119 of the Local Authorities (Financial)
Regulations No.125 of 1992.

The Council Secretary informed your Committee that management had made a follow up on the
matter and most of the imprests had been retired and recoveries had been effected from officers
with outstanding imprests. For those imprest holders that had been dismissed or had resigned,
management had recommended to the Council to write off the imprest. Further, the Council had
employed two qualified accountants and one had been assigned with the responsibility of
handling the imprest register. Further, the position of the Internal Auditor had been elevated to
management level to make it more effective.

Your Committee express concern at the failure by the Council Secretary to follow financial
regulations pertaining to the retirement of imprests. They, therefore, direct the Council Secretary
to recover all outstanding imprests at once. They also direct the Ministry of Local Government
and Housing to closely monitor the Council to ensure that measures mentioned by the Council
Secretary were actually in place.

ITEZHI TEZHI DISTRICT COUNCIL

Statutory Audit Report and Audit Inspection Report (Constituency Development Funds)
for the Period 1 January to 31 December, 2006

Claiming Allowances for sponsored workshops

88. The audit revealed that officers claimed full allowances when attending sponsored
workshops amounting to K4,810,000.

In response, the Acting Council Secretary reported that the Council had effected deductions from
affected employees.

The Auditor’s verification report, however, indicated that there was still a balance of K4, 679,350
to be recovered.

Your Committee direct the Council Secretary to recover the balance of K4, 679,350, without fail,
and report to your Committee by December 2009.

Irregular Payments

89. It was observed that the Council paid school fees for the children of Council officers who
also received education allowances. Similarly the Council paid electricity bills for the District
Planning Officer amounting to K800,000 when he was also getting electricity allowance.

In reply the Acting Council Secretary reported that the amount in question had been recovered.

On the other hand, the Auditor’s report noted that the Council had not yet complied with the
Auditor’s recommendation.

Your Committee are disappointed that the Council Secretary’s responses contradicted the
verification report in most aspects. They direct the Ministry of Local Government and Housing

33
to verify the matter and report the current position to your Committee.

Non Maintenance of Fixed Assets Register

90. The audit also revealed that the Council did not maintain a fixed assets register contrary
to Regulation 25 of the Local Authorities (Financial) Regulations No. 125 of 1992.

In response, the Acting Council Secretary noted that the Council had complied with the Auditor’s
recommendation and had prepared the fixed assets register, however, the Council had not
assigned values to the assets.

Your Committee, in noting the submission, resolve to await a report on the assignment of values
to the assets.

Irregular Retirement of Imprest

91. A total amount of K13,034,400 was paid out to a Ms Josephine Kawama as imprest to
purchase stocks for the guest house between January and August, 2006 without a single
retirement reflected in the ledger up until 30th August, 2006 when the sum of K3,067,400 was
retired contrary to Regulation 119 of the Local Authorities (Financial) Regulations No. 125 of
1992.

In reply, the Acting Council Secretary informed your Committee that the receipts had been traced
and it had been revealed that there was an over-retirement of K2, 131,800.

Your Committee direct the Ministry of Local Government and Housing to have the matter
verified to establish the correct position.

Receipts not posted to the Cash book

92. A review of the cash book entries revealed that the Treasurer’s receipt No. 129620 valued
at K329,350 dated 28 June, 2007 was not recorded in the cash book which was contrary to
Regulation 22 (a) of the Local Authorities (Financial) Regulations No. 125 of 1992.

In reply, the Acting Council Secretary explained that the Council had established that the officer
entrusted to bank the money in question did not do so. As a result he had since been discharged
from the Council. The Council would recover the money from his outstanding dues.

Your Committee await a progress report on the recovery of the money in question.

Financial Statements

93. A review of the accounting records and returns revealed that for the period under review
the Council did not prepare financial statements contrary to Section 43 of the Local Government
Act, Cap 281 of the Laws of Zambia.

The Acting Council Secretary acknowledged that the Council had not completed the preparation
of the annual financial statements for 2006.

Your Committee give the Council up to December 2009 to complete the preparation of the
statements in question and report to them through the Ministry of Local Government and

34
Housing.

MBALA MUNICIPAL COUNCIL

Statutory Audit Report and Audit Inspection Report (Constituency Development Funds)
for the Period 1 January to 31 December, 2006

Accounting System and Internal Controls

94. A review of the internal controls and the accounting system revealed that both were weak
resulting in the ineffective and inefficient operation of the Council’s core business as evidenced
by many lapses in the accountability procedures.

In reply, the Town Clerk submitted to your Committee that the accounting system and internal
controls had since been enhanced to address the lapses in the accountability procedures. The
system at that time could not provide for checks and balances because, in some instances, there
was no segregation of duties.

In noting the submission, your Committee resolve to give the Council more time to implement the
new measures. They await a report from the Ministry of Local Government and Housing on the
matter.

KAPUTA DISTRICT COUNCIL

Statutory Audit Report and Audit Inspection Report Constituency Development Fund for
the period 1 January 2006 to 31 December, 2006

Accounting Systems and Internal Controls

95. A review of the internal controls and the accounting system revealed that both were
extremely weak as was the case in 2005.

In reply, the Acting Council Secretary reported that the weaknesses in question existed and as a
result, the Council had established an internal audit office to enhance effective internal controls
and accounting systems. The Council had also sent two (2) officers to school to acquire more
accounting knowledge.

Your Committee resolve to await a report on the implementation of actual internal controls. They
direct the Ministry of Local Government and Housing to submit a report on the matter.

Anomalies in the Accounting Records

96. The audit revealed that the cashbooks had not been ruled off for all the months contrary
to Regulation 22(a) of the Local Authorities (Financial) Regulations No. 125 of 1992. Further,
the ledgers had not been updated consistently with the transactions as they had occurred or
incurred. The audit also found that the completeness and accuracy of the accounting records had
been doubtful due to multiple rubbings/cancellations and corrections not signed for and
overwriting of figures.

In reply, the Acting Council Secretary admitted that at the time of audit the cash books were not

35
ruled-off as a result of an omission on the part of management. However, the Council had
adhered to the Auditor’s advice and the cash books had since been ruled-off.

As regards the ledgers, your Committee heard that these had been prepared and updated and had
been verified by the Ministry. Further, following the Auditor’s advice, new cash books had since
been written. The old cash books could not be used because the cancellations and the multiple
rubbings rendered the figures unreadable.

Your Committee strongly caution the Acting Council Secretary against the practice of rubbing
and cancellations as it raises suspicion of fraud. They direct the Ministry of Local Government
and Housing to closely supervise the Council and ensure that the practice has completely stopped.
They await a report on the matter.

Unaccounted for Imprests

97. A Council employee by the name of Israel Frazer Mulemba was paid a sum of
K44,000,000 accountable imprest on cheque number 000155 dated 8 September, 2006 out of
which only K32,105,751.42 was retired leaving a balance of K11,894,248.42 unaccounted for
contrary to Regulation 119 of the Local Authorities (Financial) Regulations No. 125 of 1992.

In reply, the Acting Council Secretary reported that the Council had resolved to recover the same
from the concerned officer.

Your Committee view this as a serious query as a lot of public funds have been lost due to failure
to account for imprests. They direct the Acting Council Secretary to ensure that the balance of
K11,894,248.42 is recovered from the officer in question.

Non-Recovery of Salary Advance

98. The Council paid a sum of K400,000 in form of salary advance to a Ms Esnart
Nachilongo, an employee of Kabwe Municipal Council. She had not paid back the Council by 5
December, 2007. The Council had not even opened the debtor’s ledger to trail this transaction.

In reply, the Acting Council Secretary explained to your Committee that the Council had written
to the concerned officer on three separate occasions but no response had been received. The
Council had since written to the Town Clerk, Kabwe Municipal Council so that she could assist
in the recovery of the said money.

Your Committee resolve to give the Council up to December, 2009 to recover the money.

MPIKA DISTRICT COUNCIL

Statutory Audit Report and Audit Inspection Report (Constituency Development Funds)
for the period 1 January, 2006 to 31 December, 2006.

Accounting System and Internal Controls

99. A review of the internal controls and the accounting system revealed that both were
weak, resulting in the ineffective and inefficient operations of the Council’s core business.

36
In reply, the Acting Council Secretary submitted to your Committee that at the time of audit,
accounting system and internal controls were not effective. Following these observations, the
Council employed qualified staff and re-established the internal audit section. In addition, the
Council in liaison with the Provincial Local Government Office conducted a training programme
to assist in setting up of effective internal controls and efficient accounting systems.

While noting the efforts put in place by the Council, your Committee resolve to await a progress
report on the actual implementation and performance of internal controls. They direct the
Ministry of Local Government and Housing to provide a progress report on the matter.

Failure to exercise supervisory role by management officials

100. It was observed that the senior officials had failed to closely supervise their subordinates
and indeed to counter-check their own work. It was also noted that in all the accounting records
there was no evidence that the records were checked regularly.

In reply, the Acting Council Secretary submitted to your Committee that this was as a result of
the inappropriate staffing position in the Finance Department.

In noting the submission, your Committee resolve to have this matter verified by the Ministry of
Local Government and Housing to ascertain the Council’s adherence to financial regulations.

Cash Book Maintenance

101. It was observed that the maintenance of the cash books was irregular. This was so
because the anomalies discovered in the 2005 accounts spilt over to 2006. For example, running
balances had not been reflected /written in the cash books and closing totals for the months had
been written in pencil. As a result, management had always made imprudent financial decisions
which had resulted in payments by cheque being dishonoured at the bank. The Council had in the
process been penalised by the bank for defaulting in its payments obligations.

In reply, the Acting Council Secretary submitted to your Committee that accounting staff were
recruited to improve accountability and detection of anomalies. In addition the Council arranged
a financial management workshop for senior staff aimed at refreshing them in accounting skills.

In noting the submission, your Committee resolve to have this matter verified by the Ministry of
Local Government and Housing to ascertain the Council’s adherence to financial regulations.

Misappropriated Fund K4,970,975

102. It was found that a sum of K120,000,000 had been drawn with a view to make various
payments among others salaries, terminal benefits and many other outstanding obligations. A
reconciliation of the accounting records revealed that, out of the lump sum amount of
K120,000,000 only K111, 557, 191 was accounted for leaving a balance of K 8,442,200. The
analysis column of the cash book on the same transaction reflected a deficit of K4, 970,975
between the total amount drawn and the amount analysed. Therefore, the amount of K4, 970,975
was alleged to have been misappropriated as it had not been accounted for, both on the retirement
form and in the cash book.

In reply, the Acting Council Secretary submitted to your Committee that the Council agreed with
the observations of the Auditors. The officer involved was put on suspension, and later requested

37
to exculpate herself.

In noting the submission, your Committee resolve to await the recovery of the amount of K4,
970,975 which has not yet been accounted for. They also wish to be updated on the conclusion of
the disciplinary process.

Councillors owing Council Funds

103. It was observed that K5,128,300 was outstanding in respect of councillors who had
defaulted in settling their obligations to the Council. In addition, there had been no action taken
to recover the funds in the records provided.

In reply, the Acting Council Secretary informed your Committee that recoveries were made from
the serving councillors while those no longer serving had been written to with the view to recover
the funds failure to which legal action would be considered.

In noting the submission, your Committee urge the Council to ensure all outstanding funds are
recovered by the end of December, 2009. They await a report on the matter.

Un-recovered Collectable Debts for Services rendered on Account written on Pieces of Paper

104. It was noted that there was no action on record or any deterrent measure for debts
amounting to K3,974,850 accumulated over a period of one year for services rendered on account
at the rest house. Furthermore, there was no proof on record that the debts had been incurred with
the consent of the Council.

In reply, the Acting Council Secretary submitted to your Committee that considering the manner
in which the transactions were done, the officer who was involved was reprimanded for un-
pragmatic approach to issues. However the concerned institutions/individuals were contacted in
writing requesting them to settle their outstanding debts.

Your Committee note the submission and resolve to await a progress report from the Council on
the recovery of the outstanding K3,974,850.

KAWAMBWA DISTRICT COUNCIL

Statutory Audit Report and Audit Inspection Report (Constituency Development Funds)
for the Period 1 January to 31 December, 2006

Fraudulent Disposal of Injector Pump: K25,000,000

105. The inspection of the assets recorded in the register of assets revealed a recording of an
injector pump. Physical checks revealed that the injector pump was in fact not in existence.
Further examination revealed that the injector pump was collected from stores and sold at
K25,000,000 by the then District Planning Officer, a Mr Peter Tamba who had since left the
Council and joined Kasama Municipal Council. The Council resolved that the Officer should pay
back the funds but at the time of audit, the Council had not yet recovered the funds.

In reply, the Council Secretary informed your Committee that the Council had reported the matter
to the Police, who had already arrested the officer in question and the matter was in court.

38
Your Committee resolve to await the outcome of the court process.

Multiple Issuance and Non Recovery of Imprests: K33, 573,833

106. A check on special imprests advanced to officers revealed an outstanding amount of


K33,573,833 involving eighteen (18) officers. Further scrutiny revealed that management
approved additional imprests to officers with outstanding imprests to their accounts contrary to
Regulation 115 (1) of the Local Authorities (Financial) Regulations No. 125 of 1992.

In reply, the Council Secretary informed your Committee that two (02) officers had retired their
imprest while no recoveries in respect of the rest had been made since they had not received
salaries since February, 2009.

Your Committee are disappointed that recoveries have not been effected despite the imprest
remaining unretired for a long time. They are also disappointed at the failure by management to
take disciplinary action against officers that were responsible for abrogating financial regulations.
They direct the Council Secretary to ensure the funds in question are recovered even by making
journal entries.

Misapplication of Grant: K62,400,000

107. The audit of grants given to the Council revealed that the K120,000,000 which was
receipted by the Council on General Receipt No. 10919 on 20 April, 2006 with instructions to
spend 70% on developmental projects and 30% on administrative issues was misapplied.
Management instead proposed to the Council to overrule the guidelines and the Council approved
72% towards administrative matters and 28% to go towards developmental projects, 2006
contrary to the guidelines.

In reply, the Council Secretary informed your Committee that the Council directed management
to use funds internally raised for developmental projects as evidenced by the grading of township
roads.

In noting the submission, your Committee wish to satisfy themselves that the Council has indeed
been using local resources for developmental projects as recommended by the Auditor. They also
wonder what disciplinary measures have been taken against management for misleading the
Council on the matter. They, therefore, request a progress report on the matter from the Ministry
of Local Government and Housing.

Unsupported Payments: K10,133,000

108. A total of K10, 133,000 comprising sixteen (16) transactions was paid without supporting
documents contrary to Regulation 98 of the Local Authorities (Financial) Regulations No. 125 of
1992.

In reply, the Council Secretary informed your Committee that out of the sixteen (16) transactions,
the Council had only managed to find supporting documents for eight totalling K 3,433,000
leaving a balance of K6,700,000.

Your Committee are dismayed by the attitude of the Council Secretary towards addressing the
query and direct that the remaining supporting documents in respect of K6,700,000 are found
without fail.

39
Unauthorised Borrowings: K14, 297,000

109. A check on borrowings between accounts revealed that K14,297,000 remained


outstanding. A large proportion of the borrowing was from the District Fund Account to
Electoral Commission of Zambia (ECZ) Account towards electoral activities which were fully
funded by ECZ.

In reply, the Council Secretary informed your Committee that the Council had requested the
District Electoral Officer to ensure that funds were paid back.

Your Committee direct the Council Secretary to ensure that the funds are paid back by December,
2009.

Ineligible Claim of Talk-Time Allowance: K4, 320,000

110. The scrutiny of Council minutes revealed the award of K120,000 each as monthly talk-
time allowance to management. Further checks revealed that management continued to receive
telephone allowances which served the same purpose.

In reply, the Council Secretary informed your Committee that it was a lapse on the part of
management, however, management was now getting one allowance on telephone allowance.
Ledgers had been opened to facilitate the recoveries.

In noting the submission, your Committee direct the Council Secretary to ensure that the
recoveries are made and a report made to them by December, 2009.

Illegal Claim of Allowances by Management:K20,028,052

111. The scrutiny of payroll records revealed that management awarded themselves salary
increments without the authority of the Council and backdated the effective date to June 2002. At
the time of audit the part payments made totalled K20,028,052 comprising three management
officers.

In reply, the Council Secretary informed your Committee that the Council directed that a letter be
written to the Ministry of Local Government and Housing to get more information on circular no.
24/95 of 12 September, 1995 before further action could be taken.

Your Committee consider this as a very serious audit query as many Councils are being misled
into making uninformed and sometimes illegal resolutions by their managements. They direct the
Ministry of Local Government and Housing to investigate what happened and report back to
them.

Payments against cash collections: K40, 585,000

112. An examination of payment vouchers revealed that K40,585,000 was made as direct
payments by management from cash collections contrary to Regulation 19(1) of the Local
Authorities Financial Regulations No. 125 of 1992.

In reply, the Council Secretary informed your Committee that the cash payments made amounting
to K6, 602,600 and not K40, 585,000 was due to pressure although the practice had since been
stopped.

40
Your Committee direct the Ministry of Local Government and Housing to establish what figure
was queried by the Auditor. They also wonder why disciplinary action has not been taken against
the officers who authorised the payments as recommended by the Auditor.

Excess Expenditure, Premises: K34, 516,110

113. An analysis of the receipts and payments revealed that the Council overspent on premises
by K34, 516,110 which represented 165% above budget contrary to Regulation 9 of the Local
Authorities (Financial) Regulations No. 125 of 1992.

In reply, the Council Secretary informed your Committee that the Council had prepared
supplementary estimates to meet the over expenditure which was awaiting Council approval.

Your Committee direct the Council Secretary to ensure that supplementary estimates are quickly
submitted to the Ministry of Local Government and Housing for approval.

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PART II: CONSIDERATION OF TOPICAL ISSUES

THE ESTABLISHMENT AND MANAGEMENT OF CEMETERIES IN ZAMBIA.

114. Among social services local authorities are mandated to execute in Zambia is the
provision of cemetery services. However, in major cities and, particularly Lusaka, several
challenges have emerged including the shortage of land for burial sites and lack of facilities at
existing cemeteries. Further, the country has seen the emergency of private cemeteries which
need to be adequately regulated and supervised.

Concerned with this situation, your Committee resolved to undertake a study to examine the
adequacy of the policy and legal framework governing the establishment and management of
cemeteries in Zambia. Your Committee also wished to find out what challenges the local
authorities and stakeholders are facing in the management of cemeteries in Zambia.

The following witnesses were summoned by your Committee to assist them in the study.

 The Permanent Secretary, Ministry of Local Government and Housing


 The Town Clerk, Lusaka City Council
 The Town Clerk, Kitwe City Council
 The Town Clerk, Ndola City Council
 The Town Clerk, Kabwe Municipal Council
 The Council Secretary, Chongwe District Council
 The Council Secretary, Kafue District Council
 The Manager, Zambia Natural Heritage Services
 Mukono & Bilham Consultants

Consolidated summary of submissions by stakeholders

Analysis of the policy and legal framework

The legal framework regarding the establishment and management of cemeteries in Zambia is
provided for under the Public Health Act Cap 295 and the Local Government Act Cap 281 of the
Laws of Zambia.

The Public Health Act provides under Section 91 (1) that the Minister of Health shall select and
appoint within Zambia and notify in the Gazette sufficient and proper places to be sites of, and to
be used as, cemeteries. It also provides under the same section that it shall be obligatory, where
such cemeteries exist, to bury the dead in such cemeteries. Under Section 91(2) of the Act, it is
unlawful for any person to export any corpses from Zambia or to cremate within Zambia, without
the express permission in writing by the Minister of Health and obtained subject to conditions as
the Minister may impose or by regulation prescribe. The powers of the Minister under the Public
Health Act have been delegated to the Provincial Medical Officer of Health by Statutory
Instrument No. 36 of 1964.

The Local Government Act, on the other hand, under Part VII, Section 61 of the Act, mandates all
local authorities to establish and maintain cemeteries. The Second Schedule sets out the
functions of Councils in accordance with Section 61 of the Act and paragraph 41 provides that it
is the function of all local authorities in their areas of jurisdiction:

42
“To establish and maintain cemeteries, crematoria and mortuaries and otherwise to
provide for and control the burial of the dead and destitute persons who die in the area of
the council.”

All stakeholders that appeared before your Committee were in agreement that the legal
framework governing the provision of cemeteries in Zambia is inadequate. They pointed out that
the two pieces of legislation do not give stakeholders enough detail on the specific functions to be
performed by stakeholders. Secondly, the law does not provide adequate guidelines to new
players from the private sector who have started offering cemetery services.

As regards the policy framework, your Committee learnt that all local authorities were mandated
to establish cemeteries and maintain them in the manner that they may prescribe. There were no
prescribed guidelines in form of a national policy that outlined the manner the cemeteries were to
be managed and therefore, every local authority was at liberty to prescribe their own rules and
guidelines in running the cemeteries under their jurisdiction. There was no guidance on what
minimum standards of service were expected of the stakeholders.

This had resulted in fragmentation in the nature of service rendered to the public. Your
Committee learnt, for example that, as a result of the weak policy framework, there were about
ten burials per day at illegal cemeteries in Lusaka. Further, there were also illegal burials with
regards to depth, spacing and soil mound in both legal and illegal cemeteries. Other inadequacies
included poor record keeping and management in government cemeteries and poor security
resulting in appalling thefts.

Major challenges

As regards the major challenges in the management of cemeteries, your Committee were
informed that, in addition to the inadequate legal framework and the absence of a national policy
on cemeteries, other challenges were as set out below.

 Lack of land: In most cities and towns, the land that was originally earmarked for cemetery
sites had slowly been taken up and a need to identify new sites for establishing cemeteries
had arisen. The problem was compounded by the fact that most of the land that could
otherwise be identified for establishing cemeteries was under traditional tenure.

 Lack of financial resources: There were a number of support services which Councils were
expected to provide at the cemeteries including grave digging; mourners’ shelters; access
roads; kiosks; security services, record keeping and general maintenance of cemeteries.
However, most councils were not in position to undertake these functions adequately due to
lack of funds.

 Increase demand: The increase in population in most cities and towns had brought a lot of
pressure on the available burial spaces in the existing cemeteries. Most of the existing
cemeteries in these towns were designed for populations far below the current population
levels in these towns. Further, the advent of HIV/AIDS pandemic had increased the rate of
deaths in cities and towns than would normally have been the case. HIV/AIDS had
contributed to the depletion of burial spaces in most of the cemeteries in the cities and towns.

 Inadequate community involvement: General negative attitude of families to the


preservation of grave sites. Most families in Zambia do not feel obliged to maintain the

43
grave sites once they have buried their beloved ones. Further, most were also reluctant to
share costs with the local authorities so as to improve service provision.

Stakeholders’ views on the way forward

On the way forward stakeholders suggested that the Government should as a matter of urgency
undertake or facilitate the following:

 conduct a base line study to establish current position vis-à-vis cemeteries;


 review all cemetery laws;
 formulate a comprehensive national policy;
 design a national cemetery manual;
 create a national cemetery and burial services inspectorate to maintain minimum
standards;
 encourage public/private sector partnerships;
 develop community initiatives and awareness programmes; and
 encourage bereavement care and community burial savings schemes.

Observations and recommendations of the Committee

Cemeteries exist because every life is worth loving and remembering once it has passed on.
Cemeteries provide an environment for communities and family members to accord respect for
the departed. Your Committee are, however, saddened to note that the management of cemeteries
in Zambia is one of the most neglected areas of service provision. Most cemeteries have been a
subject of neglect and vandalism compounded with thefts. Firstly, the legal framework as
contained in the Public Health Act Cap 295 and the Local Government Act Cap 281 of the Laws
of Zambia, is too weak and fragmented to provide guidance to the stakeholders. Secondly, there
is no national policy in place, leaving individual local authorities to prescribe what level of
service to offer. Thirdly, there is widespread shortage of land for burial purposes which if not
urgently handled would drift into a crisis. This has resulted because of poor planning and lack of
prioritisation of the service by local authorities. Further, due to the general poor financial
position of most councils, burial services have been neglected as most local authorities do not see
them as a priority amid competing needs. As a result basic services such as grave digging;
mourners’ shelters; access roads; kiosks; security services; record keeping; and general
maintenance of cemeteries are almost non existent.

Your Committee, therefore, recommend as follows:

1. the Government should review the laws pertaining to cemeteries with a view to coming up
with a comprehensive and updated law to meet the current challenges in cemetery
management, especially given the entry of private players in the service; such a law would
address many cemetery management issues which are not adequately covered by the current
laws to ensure smooth operation of a cemetery.

2. the Government should consider establishing a national inspectorate on the management of


cemeteries that will ensure stakeholders, both public and private service providers, to
approved minimum standards;

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3. the Government should work closely with local authorities to secure land for burial purposes.
This could be either from traditional or state land. Further, local authorities that have
adequate land are urged to be futurist by reserving land cemetery purposes.

4. the Government should devise a grant to assist local authorities in providing support services
at cemeteries; and

5. the local communities should be encouraged to use part of the Constituency Development
Fund to provide relevant infrastructure such as mourners’ shelters; access roads; and general
maintenance of cemeteries.

THE MANAGEMENT OF PUBLIC PARKING SPACES IN LUSAKA

115. Population growth and the increase in economic activity in Lusaka has resulted in a
critical shortage of parking spaces for the public in the city centre. This has further been
aggravated by some sections of the private sector who have been reserving portions of gazetted
public roads for their own private parking. The public, through the Zambia Institute of Planners,
has complained about this practice and requested your Committee to undertake a study on the
matter.

Your Committee, therefore, undertook a study to find out whether there was any justification or
legal backing for colonisation of public parking spaces by the private sector. They also wished to
find out what measures were being put in place to increase parking space in Lusaka.

Your Committee invited the following witnesses to assist them in their study:
 The Permanent Secretary, Ministry of Local Government and Housing
 The Town Clerk, Lusaka City Council
 The President, Zambia Institute of Planners
 The Chief Executive, Road Transport and Safety Agency

Summary of submission by stakeholders

The President of the Zambia Institute of Planners

The President of the Zambia Institute of Planners informed your Committee that the decision to
write to Parliament was prompted by discriminatory practices by the Lusaka City Council who
had decided to sublet some parking spaces to the private sector for private use. The President
contended that there was no legal provision under the Road Traffic Act No. 11, the Public Road
Act No. 12 and the Road Fund Act all of 2002, which allowed private companies, such as banks
and other business houses in towns and cities, to cordon off portions of gazetted public roads for
their own private parking.

Your Committee were also informed that such a practice was illegal and discriminatory because
any parking facility connected to a gazetted public road was part of public space which could not
be usurped by any private concern. ‘Public roads’ meant thoroughfares which provided vehicular
transit to the general public, and that one of their special features was parking space easements to
serve the shopping public and anyone who was a motorist in the area.

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The Zambia Institute of Planners recommended as follows on the way forward:

i) the Government should develop measures to cause local authorities to work much more
closely with the Zambia Institute of Planners with a view to harmonising urban
planning and land use administration in this country;

ii) the Lusaka City Council should be directed to dismantle all illegally erected physical
barriers across public parking spaces, which they had mistakenly allowed within the
city;

iii) the Lusaka City Council should immediately commence updating the Master Plan for
the City of Lusaka;

iv) the Lusaka City Council should without delay begin planning how they can realise
revenue from parking places in a legal way without disadvantaging the general public;
and

v) the Lusaka City Council should plan for the erection of parking meters along the urban
streets and other critical traffic concentration points.

The Chief Executive Officer, Road Traffic and Safety Agency (RTSA)

The Chief Executive Officer noted that Zambia had experienced an influx of second hand
imported vehicles and Lusaka had accounted for the largest part of this number as evidenced by
the increase in congestion compared to other towns. He noted that this increase had not been
matched with a corresponding increase in the facilities such as road infrastructure and parking
spaces. Consequently, there was limited space for parking for those who wished to do business
in the Central Business District (CBD).

In addition, the Council in Lusaka had also allowed the use for other purposes of “back alleys”
and “service lanes” meant for delivery of goods. He cited Cha Cha Cha road where there were a
number of hardware shops whose back alleys behind their shops could not be used for making
deliveries. This had resulted in the main road being used for deliveries, which often led to
congestion and created more shortage of parking space for the general public.

Secondly, pirate taxis and illegal operators of light goods vehicles had taken up much of the
parking spaces while waiting for customers to hire them. This had put additional pressure on the
limited parking space in the CBD. He noted that the enforcement against pirate taxis and illegal
transport operators was made difficult in the absence of gazetted designated places for such
business.

The Chief Executive Officer also explained to your Committee that while the legal basis
governing parking spaces may be adequate, there was need to have a clear distinction between
client space (public space) and parking space for people whose offices are located in the CBD.
The reservation of parking spaces in the Central Business District had brought difficulties to the
general public.

The Chief Executive Officer explained further that the original plans for most buildings in the
Central Business District did not take into account the parking space for their clients. This meant
that the tenants together with their clients and others intending to do business in or visit the CBD
had to compete for the limited parking space along the already busy Cairo Road for their parking.

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He noted that this problem needed to be resolved urgently and proposed that in the short the term,
the Council could streamline the current management system which was subject to abuse by “call
boys” who had taken advantage of the situation and were charging unsuspecting motorists,
thereby unnecessarily holding spaces on the pretext that they were reserved. If the Council could
come in and be more effective, a lot of the parking spaces currently being managed by these
illegal people could be freed for the use of the general public. In the medium term, the owners of
high-rise buildings should consider some structural redesigns permitting transformation of the
ground floors of their buildings and dedicate them as parking lots. As for the long term, the Chief
Executive Officer observed that the Council needed to create more parking spaces in the city by
entering into partnership with the private sector to build parkades of several floors. The Council
could provide land while the private sector could build the parkades on a “Build, Operate and
Transfer” (BOT) basis.

The Acting Town Clerk, Lusaka City Council

The Town Clerk informed your Committee that the management of the public parking space in
Lusaka was the jurisdiction of the Lusaka City Council. In addition to the management of the
public parking spaces, the Council was also the Local Road Authority for the urban roads within
its boundary.

Your Committee heard that the original plans for most buildings in the Central Business District
(CBD) did not take into account the parking space for their employees/clients. This arose from
the lapse on the part of the Local Authority to strictly enforce parking standards as prescribed in
the Doxiadis Plan of the City of Lusaka, which was approved in 1978 and had not been renewed
since then. This lapse was clearly seen from a number of high rise buildings, namely, Findeco
House, National Pension Scheme Authority, Zanaco Head Office, Zimco House, lndeco House,
the Bank of Zambia and many others which do not have adequate parking spaces considering the
number of clients they attract. He noted that this scenario had resulted in inadequate parking
space for companies, their clients and those intending to do business in the CBD.

The Acting Town Clerk further submitted that the above developments depended on the
Council’s short-term parking provisions on road reserves. The short term parking spaces were,
however, inadequate given the rise in car ownership. The normal situation was that the
developers should have provided both short and long term parking within their premises in order
to supplement the short term parking spaces provided by the Council on the road reserves.

Regarding the measures the Council was taking to increase parking spaces, the Town Clerk
submitted that the Lusaka City Council was making an effort to increase parking spaces by
enforcing parking standards as per existing development plan. To this effect, all new construction
projects were required to provide both long term and short term parking within their properties.
The Acting Town Clerk noted that examples of new buildings that had incorporated such parking
included the new Anti Corruption Commission offices on Cha Cha Cha Road; the Central Park
(Farmers House); the COMESA Secretariat on Ben Bella Road; the building under construction
at former Food Fayre on Cairo Road opposite Zimco House; and the Finsbury Park at Kabwe
round about.

Further, the Council intended to create more parking spaces in the CBD by entering into
partnership with the private sector to build parkades on several floors. The arrangement could
enable the Council to provide land while the private sector built the parkades on a Build, Operate
and Transfer (BOT) basis. Alternatively, developers could purchase land within the CBD and
consider developing elevated parking to bridge the demand. Arising from the above, the Lusaka

47
City Council had granted authority in principle for the construction of the parkades with the
involvement of the private sector under the Public Private Partnership (PPP) initiative.
Consequently, land had been identified between Sapele Road and the current Zambia Railways
station. Negotiations were on going with the Zambia Railways who were the owners of the land
in question.

The Town Clerk submitted that another measure the Council was taking was to encourage change
of use of land where some business operations, especially offices, were allowed in residential
areas. Such changes, however, were strictly scrutinised so that the new use did not contradict the
approved use of the area in terms of character and amenity of the residential area. Further, the
development of many shopping centers like Manda Hill, Arcades and Cross Roads had also
attracted motorists who would otherwise be found in the Central Business District doing business
from there.

On the colonisation of parking spaces in Lusaka, your Committee were informed by the Town
Clerk that the Council had only sublet some public parking spaces in the Central Business District
but not all of them. Some business houses, both private and quasi-Government institutions had
reserved car parking slots for their employees and clients. These reservations had been
necessitated by the fact that the original plans of most high rise buildings did not take into
account the parking spaces in light of the influx of motor vehicles in the recent past.

The Permanent Secretary, Ministry of Local Government and Housing

The Permanent Secretary reported to your Committee that the Government was concerned about
the parking situation not only in Lusaka but in other growing urban areas, such as Solwezi,
Livingstone and Chipata.

The Committee heard that original plans for most buildings in Lusaka Central Business District
(CBD) did not take into account the parking spaces for their employees and clients. This was a
lapse on the part of the local authority to strictly enforce parking standards as prescribed in the
Doxiadis plan of the City of Lusaka which was approved in 1978 and had not been renewed since
then.

To mitigate the situation elaborated above, the Ministry had directed the Lusaka City Council to
strictly adhere to the parking standards as per existing development plans. The Council had also
been encouraged to change of use of land where some business houses were allowed to operate in
residential areas as long as they did not contradict the approved use of the area in terms of
character and amenity of the residential. This would lessen the number of clients going into the
CBD.

As regard Government’s position on the colonisation of public parking spaces by private sector in
Lusaka the Committee were informed that the colonisation of public parking spaces by private
sector was illegal and the Ministry had directed the Council to stop this arrangement and engage
both the public and private sector in finding ways of mitigating this problem. Private sector could
not be allowed to colonise public parking spaces for their own use thereby inconveniencing the
public.

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Observations and recommendations of the Committee

Your Committee observe that the matter under consideration is one of the symptoms of failed
urban planning and enforcement in the Lusaka City Council. They are saddened to note that the
Local Authority has failed to strictly enforce parking standards as prescribed in the Doxiadis Plan
of the City of Lusaka which was approved in 1978. They are also disappointed that this Plan has
not been renewed since then. They note that as a result of laxity on the part of the Council, the
original plans for most buildings in the Central Business District do not have parking spaces for
their clients. This means that the tenants together with their clients and others intending to do
business in or visit the CBD have to compete for the limited parking space.

Your Committee also agree with the observation by stakeholders that even the present parking
spaces in Lusaka are not being managed prudently by the Council. They note that the failure by
the Council to streamline the current management system has allowed illegal elements like “call
boys” to take advantage of the situation by charging motorists for parking thereby unnecessarily
holding spaces on the pretext that they are reserved.

Further, your Committee note that the Lusaka City Council’s decision to allow the use of “back
alleys” and “service lanes” meant for delivery of goods for other purposes has resulted in
congestion and created more shortage of parking space for the general public.

Your Committee, therefore, recommend that the Lusaka City Council:

1. with immediate effect, discontinues the colonisation of parking spaces in Lusaka by


removing physical barriers across public parking spaces. Further, the Council should
streamline the management of the available parking spaces by getting rid of the “call boys”
illegally managing some parking spaces;

2. in conjunction with stakeholders, immediately commences updating the Master Plan for the
City in order to address current land use challenges and future needs. Further, other
emerging local authorities should learn from the experiences of the Lusaka City Council by
developing plans that will carter for such needs adequately in future; and

3. engages the owners of high-rise buildings to persuade them to undertake structural


redesigning of their buildings to allow for the transformation of ground floors into parking
lots.

STUDY ON THE DECENTRALISATION PROCESS

Update by the Secretary to the Cabinet

116. Concerned with the Government’s failure to adopt the Decentralisation Implementation
(DIP) which has been before Cabinet since 9 July 2006, your Committee sought to receive an
update from the Secretary to the Cabinet to appreciate the challenges, if any, the Government was
facing vis-à-vis the approval of the DIP.

The Secretary to the Cabinet submitted to your Committee that the pace of implementing the
decentralisation process had stalled over the past three years on account of the non-approval of
the Decentralisation Implementation Plan (DIP), which was submitted to Cabinet in 2006. He
noted that the non approval of the DIP was being interpreted by most stakeholders as a sign of

49
waning commitment by the Government. He revealed that as a result many stakeholders
including Government ministries and cooperating partners had minimised their participation in
the process.

The Secretary to the Cabinet noted that the DIP was first presented to Cabinet on 9 July, 2006 had
not been approved because there were two schools of thought, those supporting and those
opposing the approval of the Plan. Those in support argued that decentralisation by devolution of
power was in line with the Fifth National Development Plan which emphasised the need for
improved service delivery. On the other hand, those against argued that decentralisation by
devolution of power was complex and its implementation required a lot of sensitisation,
advocacy and consensus building among key stakeholders particularly in the area of fiscal and
human resource decentralisation. It also required putting in place appropriate legislation and
legal instruments.

Your Committee were also informed that, Cabinet noting the lack of capacities and competencies
in local authorities to fully implement the Policy, directed the Minister of Local Government and
Housing to ensure that the issue of capacity building was a priority prior to the implementation of
the Policy. In view of the issues raised, Cabinet deferred consideration of the Plan and directed
the Minister of Local Government and Housing to discuss the matter with relevant stakeholders
taking into account the views raised by Cabinet prior to re-submission of the Memorandum.

The Secretary to the Cabinet further submitted that on 10 July, 2007, the then President called for
a meeting with the Secretary to the Cabinet on the Implementation Plan. Arising from the
meeting, the President decided to hold further consultations with the Hon Minister of Local
Government and Housing. Further progress on the matter was curtailed by the illness and
subsequent demise of the President.

The Secretary to the Cabinet observed, however, that a Cabinet Memorandum on the
Decentralisation Implementation Plan which had taken into account the various views raised by
Cabinet and stakeholders had since been submitted for circulation to ministries for comments.
Thereafter it would be placed on Cabinet’s agenda for consideration.

As regards the current position, the Secretary to the Cabinet stated that prospects for accelerated
implementation of the Decentralisation policy during 2009 were optimistic arising mainly from
the personal drive by His Excellency the President through the Presidential Address to the 10 th
session of the 3 rd National Assembly given on 9 January 2009 and the 2009 Budget Speech
presented to Parliament by the Honourable Minister of Finance and National Planning. Through
these two actions, the Government had reaffirmed its intention to apply decentralisation as part of
a package of reforms to transform the local government system into a key strategic partner in the
quest to realise overall national development and democratisation.

On the way forward, the Secretary to the Cabinet submitted that in order to provide clarity on the
next steps to be taken in the implementation of the policy, the Government had produced a road
map indicating all the key processes and their planned implementation timeframes over the next
twenty four months. The Government’s vision enshrined in this Roadmap was to implement the
Decentralisation reforms with the aim of bringing the Public Service to a level of preparedness to
commence the devolution of functions by the middle of 2010. This guiding document had been
shared with all ministries and cooperating partners. Secondly, the Cabinet Memorandum on the
Decentralisation Implementation Plan which had taken into account the various views and
concerns raised by Cabinet and stakeholders had since been circulated to ministries for comments

50
and thereafter would be submitted to Cabinet for consideration.

In conclusion, the Secretary to the Cabinet stated that decentralisation by devolution was a
complex but implementable process. Success in its implementation required concerted efforts of
key stakeholders within and outside the Government. To this end the Government recognised the
importance of approving the DIP. It was clear that without the DIP, the core components of
devolution could not be implemented.

Summary of findings from the foreign tour of Uganda

117. Your Committee toured Uganda from 22 to 31 August 2009 in order to augment their
study on the Decentralisation policy. While on this tour, your Committee was privileged to
interact with the following offices and institutions:

 The Prime Minister of the Republic of Uganda;


 The Minister of Local Government;
 The Committee on Local Government Accounts;
 The Committee on National Economy;
 The Director-Local Government Administration and Inspection; and
 The Uganda Local Government Association.

Historical Perspectives of Decentralisation in Uganda

Your Committee learnt that the decentralisation process in Uganda had its roots in the activities
of the National Resistance Movement which, when it took over power in 1986, initiated a system
of elected “Resistance Councils” from village up to the district, which allowed the participation
of ordinary people in deciding on matters affecting them. These councils were the precursors of
the current local councils which are the pillars of the decentralisation process launched by
President Yoweri Museveni on 2 October, 1992.

Your Committee learnt that the objectives of decentralisation policy in Uganda was to achieve,
among other things, the transfer of real power to districts and thus reduce the load of work on
remote and under resourced central officials. Secondly, it was meant to bring political and
administrative control to the point of service delivery. Thirdly, decentralisation was intended to
free local managers from central constraints. Further, decentralisation was intended to improve
financial accountability and responsibility by establishing a clear link between payment of taxes
and the provision of services. Lastly, decentralisation was aimed at improving the capacity of
local authorities to plan, finance and manage delivery of services.

Your Committee were informed that as a major national policy, decentralisation was backed by
the National Constitution and the Local Government Act. The policy was legally entrenched in
the 1995 Uganda Constitution and the Local Government Act of 1997. The policy was also
supported by the President His Excellency Yoweri Museveni and other key stakeholders like
donors and ministries.

Structure of local governments

Your Committee learnt that local councils are classified in two categories. Firstly, there are Local
Government Councils. These comprise District and Sub-county Council, City and City Division

51
Councils, Municipal Councils and Municipal Division Councils and Town Councils. All these
councils have legal powers and are corporate entities that can sue or be sued.

The second category is comprised of Administrative Unit Councils. These comprise County
Councils, Parish/Ward Councils and Village councils. These are not legal entities and have less
power than Local Government Councils. Their functions include maintenance of law and order,
assisting government in monitoring implementation of policies and programmes and resolving
local problems and disputes.

Table 1: Uganda local government structures

Category Number

Local Government Councils


Kampala City Council 1
Districts 79
Municipalities 13
City Division Councils 5
Sub-Counties 935
County Councils 151
Town Councils 98
Municipal Divisions 34
Administration Units
Parishes and ward 5,500
Town Boards 144
Villages 45,000

As a result of decentralisation, local governments in Uganda have the following powers:


 Political- councils headed by popularly elected leaders
 Financial- councils collect and appropriate resources in their budgets
 Administrative- councils manage staff in councils
 Planning- councils make development plans
 Legislative- councils make ordinances and bye-laws
 Judicial- local administration of justice through local courts

Political Decentralisation

Your Committee learnt that one of the principles of decentralisation is to encourage local
communities to participate actively in programmes and projects executed in their local
governments. They were also informed that arrangements had been put in place to allow the
people to participate in choosing their political leadership through elections. The local council
system starts at the village level where all adult people of the village form a local council from
which they elect a committee of nine to run the affairs of the village on a day to day basis. At
district level, in addition to having local government councillors elected by universal adult
suffrage through secret ballot the mayor is elected by the people through universal adult suffrage.

52
Further, your Committee learnt that deliberate measures had been put in place to ensure
marginalised groups are not left out with respect to allocation of authority, power and resources.
As a result, the local government legal framework ensures that women represent at least a third of
every local government council; each council must also have two representatives of the youth,
one of whom must be female and two representatives of the disabled, one of whom must also be
female.

Fiscal Decentralisation

This is the core component of decentralisation. For local governments and private organisations
to carry out decentralisation effectively, they need adequate revenues. This can be achieved in
two ways either the Central government cedes the revenue base which local authorities can tap, or
Central government collects mandated revenues and transfers it to lower levels of government.

In respect of Uganda’s fiscal decentralisation efforts, your Committee learnt that a significant
amount of the national budget (over 21%) is spent through the Local Government system. Your
Committee also learnt that transfers to the local authorities started in the financial year 1993/94
when the recurrent budget was decentralised in a phased manner. In 1993/94 the first batch of
thirteen districts received funding under a vote system. In 1994/95, the thirteen districts that got
funding through the vote system in the previous year received a block grant and fourteen other
districts received their funding through a vote system. In 1995/96, the fourteen districts which
received their funding in the previous year through a vote system, received a block grant and the
remaining twelve districts received funds under a vote system. By 1996/97 all the thirty nine
districts in the country then were receiving block grants.

In the vote system, line ministries whose services were decentralised, identified the activities and
computed the amount of money spent on those activities in the fiscal year before decentralisation
and transferred it to councils. The local governments had to implement the activities of councils.
In the block system, councils received block grants which they had to allocate according to their
priorities.

Local governments in Uganda are mandated to perform several functions including the provision
of primary education, primary heath services, water services, local administration of justice and
feeder roads. To perform these functions, the Constitution of Uganda provided for three types of
grants namely:

(i) conditional grants;


(ii) un-conditional grants; and
(iii) equalisation grants.

The bulk of the grants (about 88%) transferred to local governments are conditional grants while
unconditional grants constitute only a small proportion (11%). The unconditional grant was made
available to local governments to run decentralised functions. It was determined according to a
formula well laid out in the Local Government Act. The conditional grant on the other hand was
made available to local governments to fund projects and programmes that are agreed upon
between Central government and local governments. Equalisation grant was given to local
governments in consideration of their level of development. It was made available to least
developed districts. It was based on the degree to which a district was lagging behind national
average standards. This was a grant given to some local governments lagging behind national
average standards of particular services. This grant formed a very small percentage of (about

53
0.5%) of total transfers. Currently it focused on key services namely, education, roads, water,
health and agriculture extension.

Your Committee were also informed that given the increase in the resources and responsibilities
given to local government, they had risen the need for strict supervision. As a result, Uganda had
instituted compliance inspections to ensure laws and regulations were being followed and
performance inspections to verify the quality of works done by local governments. For audit
purposes, your Committee were informed that each district had a district public accounts
committee whose reports were tabled before the Committee on Local Government Accounts in
Parliament.

Administrative Decentralisation

Your Committee were keen to know how issues of personnel were handled. They learnt that
councils employed all staff that worked in their respective areas of jurisdiction. This constituted
about 70% of the National Public Service workforce. Each district had a District Service
Commission with the mandate to appoint, confirm, promote and discipline all employees of the
council. It was, however, learnt that recently, the Government reverted the task of employing
principal officers to Central government. This was done to protect the controlling officers from
abuse and political interference by local leaders.

Your Committee also learnt that institutions had to be reformed in order to ensure they were
compatible with decentralised functions. Institutional decentralisation was concerned with
defining which formal government institutions were to be involved in a decentralisation program,
and the development of an appropriate legal framework that defined the relationships between
different institutions and actors. There should be a clearly established legal framework that
defines the decentralised institutions, how they were constituted and how they related to other
institutions.

In Uganda, your Committee learnt that structures and organs had been created under
decentralisation for effective delivery of services. These included District Service Commissions
whose functions were previously performed by the Public Service Commission, District Tender
Boards, which are the decentralised Central Tender Board, the District Land Board which
performs the functions of the Land Commission and the District Public Accounts Committee
which is the equivalent of the Public Accounts Committee.

Capacity Building in local authorities

Your Committee also learnt that at the time of launching decentralisation in 1992, local
authorities in Uganda were weak in terms of capacity, commensurate skills and requisite
attitudes. They did not have capacity both at political and technical levels to effectively execute
their mandates. At the time, Uganda had two options: either to wait for capacity of local
governments to come by or to proceed with decentralisation and they opted for the later. In
response various stakeholders, made varied capacity building interventions but in an
uncoordinated manner which was not sustainable.

In order to harmonise all local government capacity building efforts, the Ugandan Government in
2005 developed a capacity building policy. A capacity building unit was established to
coordinate and formulate strategies to coherently address capacity buildings issues in holistic
manner. The policy provides a framework in which elected and appointed officials in Local
government would receive training and acquire skills.

54
Major challenges highlighted by stakeholders

The challenges to the implementation of the Decentralisation process in Uganda highlighted to


your Committee are set out below.

a) Sector ministries had continued to develop policies and strategies as if they were the
service delivery agents. Further, most of them had maintained their own monitoring and
supervision systems instead of using the local government system. Your Committee
heard that this was as a result of the conditional nature of most sector-wise programmes
which put the responsibility of sector implementation under line ministries. This had
resulted into uncoordinated policies and strategies leading to overlaps and duplication.

b) There was poor local revenue collection partly because revenue sources had not been
fully exploited. Secondly, local revenues were low yielding and expensive to collect.
Thirdly, grant resources available to councils did not match decentralised responsibilities.
Fourthly, a large portion of grants were conditional limiting the discretion of local
governments and fifthly, administrative costs, especially salaries dominated the
unconditional grant instead of service delivery.

c) Technically competent staff, such as planners, engineers and accountants were lacking in
many local governments. Local Governments found it difficult to attract and retain
highly skilled staff, especially in hard to reach areas. As a result, most of them were
experiencing delays in accountability of resources sent to them.
d) Local representatives were not fully exercising their control over service delivery due to
inadequate capacity. For example, some councils did not hold regular meetings thereby
affecting downward accountability between the elected and the electorate.

Observations and Recommendations

Following their interaction with the Secretary to the Cabinet and their tour of Uganda your
Committee wish to make the observations and recommendations set out hereunder.

a) Decentralisation is a political process which requires high level political will and the
support of stakeholders. The Central Government must demonstrate political will to
engage in shared exercise of power and authority. Secondly, the civil service must be
willing to facilitate the transfer of power and authority, functions and requisite resources
to local authorities. Further, local authorities and communities themselves must have
enough civic will and capacity to take over the decentralised functions.

On this score, your Committee observe that the Ugandan leadership did very well as the
President Yoweri Museveni and key stakeholders such as donors and civil society
supported the process from inception. Further, a bold decision was made to quickly
embed the policy in the national Constitution and an Act of Parliament. This was a
serious boost to the process as all involved had little choice but to abide by the highest
Law in the land.

Your Committee observe that the Zambian Government has not demonstrated enough
political will necessary to move the process forward. Since the policy was launched in
2004 no significant work has been done. They are disappointed that the Decentralisation
Implementation Plan has not been approved despite having been submitted to Cabinet in

55
July 2006 for consideration. They note with sadness from the submission of the
Secretary to the Cabinet that, as a result of this, some key stakeholders, such as line
ministries and donors have reduced their participation in the process.

b) As regards political decentralisation, your Committee observe that in Uganda, the


principle is to ensure that all local governments, staring from the village level are led by
popularly elected leadership. Further, even the mayor of the district is elected by the
people through universal adult suffrage.

c) Fiscal decentralisation is a key component of any meaningful decentralisation process.


Your Committee observe that one of the success factors is to ensure responsibilities
decentralised match with resources coupled with enhanced capacity to mobilise local
revenue. In Uganda’s case, your Committee observe that although this remains a big
challenge, there is determination to achieve this. For example, there is a predetermined
formula embedded in the Act of Parliament to govern the disbursement of grants to local
government. Further, local authorities lagging behind in development receive an
equalisation grant to help them move faster in development.

d) Decentralisation of the human resources function is one of the difficult and contentious
issues that has to be dealt with in the decentralisation process. In Uganda, appointment
of officers is done by local government service commissions which exist in all districts
while the appointment of the principle officers had been taken back to central
government. Further, in Uganda the wage component of Local Government staff is
included in the unconditional grants sent from Central Government to districts. But the
districts add on the local revenues and pay salaries. Teachers’ salaries are paid from the
Treasury directly to their accounts.

e) Another issue is the lack of capacity by local government to handle the decentralisation
services. Your Committee observe that at inception, Uganda was faced with the dilemma
of whether to proceed with decentralisation even before building the necessary capacity
or to wait for capacity to be built. Your Committee note that a decision was made to
proceed with decentralisation while efforts continued to build the necessary capacity.
Due to such concerns, Uganda decided to implement the decentralisation process in phase
form.

f) Your Committee observe also that in Uganda the local council system was designed to
enhance participatory democracy. The system starts at the village level where all adult
people of the village form a local council from which they elect a committee of nine to
run the affairs of the village on a day to day basis. While at district level, in addition to
having local government councillors elected by universal adult suffrage through secret
ballot the mayor is elected by the people through universal adult suffrage. Your
Committee also note the affirmative action taken by Uganda to ensure representation of
marginalised groups at local government level.

Your Committee, therefore, recommend that:

a) the Government should demonstrate political will and make its position clear on the
status of the Decentralisation Implementation Plan which is gathering dust at Cabinet
Office. The cautious approach urged by some members of the Cabinet is appreciated by
your Committee but the concerns could better be addressed by adopting the phased way
of implementation as was done in Uganda. A few district councils could be selected and

56
piloted. Such an approach would allow the process to benefit from the lessons learnt
through possible modifications;

b) once a decision has been made by Cabinet, the Government should ensure that the
Decentralisation policy is entrenched in the National Constitution and the Local
Government Act in order to safeguard the process from arbitrary reversals. This should
only be done, however, after lessons from the pilot phase have been fully appreciated;

c) the Government should ensure grants to local authorities are made predictable and
consistent through the formulation of a predetermined formula for the determination of
grant to local authorities; further, the Government should be seen to encourage
mechanisms which foster the mobilisation of local revenues instead of acting otherwise
such as banning important levies as is the case with the grain levy;

d) the Government should develop a capacity building policy for local authorities that
should be implemented side by side with the decentralisation policy. Such a policy
would ensure councils are provided with standardised training and guidelines;
e) the Government should take concrete steps to support the participation of marginalised
groups such as youth, women and persons with disabilities; this would ensure that such
persons are not left out with respect to allocation of power, authority and resources; and
f) the Government should consider an equalisation grant regime that recognise the different
levels of development at which local authorities are; which would assist councils lagging
behind in development to catch up with the rest.

57
PART III: CONSIDERATION OF THE ACTION–TAKEN REPORT ON THE
COMMITTEE’S REPORT FOR 2008

CHIPATA MUNICIPAL COUNCIL

Statutory Audit Report and Audit Inspection Report on Constituency Development Fund
for the period 1 January, 2004 to 31 December, 2005

Non Acquisition of Title Deeds for Council Properties

118. Your previous Committee urged the Council to ensure that they obtain title deeds for all
council properties.

In the Action-Taken Report the Ministry explained that the Council had commenced the process
of acquiring title deeds from the Ministry of Lands for the properties not on title.
Your Committee resolve to await a report on the matter.

LIVINGSTONE CITY COUNCIL

Statutory Audit Report for the Period 1st January, 2004 to 31st December, 2005

Non Acquisition of Certificates of Title

119. Your previous Committee directed the Council to aggressively pursue the matter of the
remaining properties without title deeds with the Ministry of Lands.

In the Action-Taken Report the Ministry explained to your Committee that the Council was yet to
obtain title deeds for other properties and had since written to the Ministry of Lands.

Your Committee resolve to await a report on the matter.

MONZE DISTRICT COUNCIL

Statutory Audit Report and Audit Inspection Report (Constituency Development Fund) for
the period, 1 January, 2004 to 31 December, 2006

Non Acquisition of Title Deeds for Council Properties

120. Your previous Committee had requested the Council Secretary to make follow-ups with
the Ministry of Lands to ensure that duplicate copies for the remaining properties were obtained.

In the Action-Taken Report the Ministry reported to your Committee that the Council had not
obtained duplicate copies for title deeds as directed.

Your Committee resolve to await a report on the matter.

58
Irregular Transfer of 10% Administration Costs on Constituency Development Fund

121. Your previous Committee strongly urged the Council Secretary to strictly follow
guidelines on the utilisation of the Constituency Development Fund.

In the Action-Taken Report, the Ministry reported that the Council had since refunded a sum of
K6,000,000 leaving a balance of K12,000,000 to be refunded.

Your Committee are disappointed that it is taking too long to refund the funds, in question. They
direct the Council to ensure the remaining funds are refunded without fail.

KASAMA MUNICIPAL COUNCIL

Statutory Audit Report and Audit Inspection Report (Constituency Development Fund) for
the Period 1 January 2005 to 31 December 2005

Unaccounted for Cash: K14, 915,813

122. Your previous Committee directed the Council to account for the balance of K9, 201,693
and report progress to them.

In the Action-Taken Report, the Ministry explained that the amount unaccounted for was
K10,135,813 and not K9,201,693 as reported in the report. The affected officers had been
directed by the Council in writing to account for the money. However, two (2) officers involved
in this matter had since died and their outstanding amount of K7,763,693 shall be recovered from
their terminal benefits. The remaining amount of K2,372,120 unaccounted for by the other three
officers in service would be recovered from their pay.

Your Committee are dissatisfied that the Council has taken so long to address the query. They
direct the Acting Town Clerk to comply with the recommendation to recover the remaining K2,
372,120.

Unsupported payments: K69,753,450

123. Your previous Committee directed the Acting Town Clerk to find supporting documents
in respect of the balance of K39, 359, 450.

In the Action-Taken Report, the Ministry reported that out of an amount of K39,359,450 still
outstanding, supporting documents in respect of K7,490,000 had been found leaving a balance of
K31, 869,450.

Your Committee are saddened by the failure by the Council to find the documents in question
which is an indication that the Council does not take audit queries and your Committee’s
recommendations seriously. They direct the Council to find the remaining supporting documents
in respect of K31,869,450.

Illegal Advances to Councillors: K850, 000

124. Your previous Committee directed the Council not to relent until all the K850, 000
wrongly given to councillors as advances was recovered.

59
In the Action-Taken Report, the Ministry reported that although it was reported that the amount
advanced to the two councillors had been recovered, no such recovery was made as there was no
communication to the councillors. The Council would, however, effect a deduction from one
councillor who was still serving while the other one had been requested to settle the outstanding
advance.

Your Committee are disappointed with the Council’s apparent indifference to having the audit
query resolved. They direct the Acting Town Clerk to take appropriate action on the matter.
They await a report on the matter.

Unretired imprest: K63,975,350

125. Your previous Committee directed the Council to ensure that the balance of K40,
079,360 was retired.

The Ministry reported to your Committee that although the affected officers had been informed to
retire the imprests in question, no recoveries had been effected. Recoveries from the officers still
serving in the Council would be made from their salaries while deductions would be made from
the terminal benefits in respect of the officers who had retired or were deceased after the
Council’s decision.

Your Committee resolve to await a report in respect of the remaining K40,079,360.

CHOMA MUNICIPAL COUNCIL

Statutory Audit Report and Audit Inspection Report (Constituency Development Fund) for
the Period 1 January, 2004 to 31 December, 2006

Non Acquisition of Certificates of Title

126. Your previous Committee directed the Town Clerk to pursue the acquisition of title with
the Ministry of Lands.
In the Action-Taken Report, the Ministry reported to your Committee that the Council had
applied for the titles to Ministry of Lands.

Your Committee resolve to await a progress report on the matter.

LUANGWA DISTRICT COUNCIL

Statutory Audit Report and Audit Inspection Report (Constituency Development Fund) for
the Period 1 January, 2004 to 31 December, 2006

Non Acquisition of Title Deeds for Council Properties

127. Your previous Committee urged the Council Secretary to continue pursuing the matter
with the Ministry of Lands.

In the Action-Taken Report the Ministry reported that the Council was still pursuing the matter
with the Ministry of Lands

60
Your Committee resolve to await report on the matter.

MAMBWE DISTRICT COUNCIL

Statutory Audit Report and Audit Inspection Report (Constituency Development Fund) for
the Period 1 January, 2006 to 31 December, 2006

Non Acquisition of Title Deeds

128. Your previous Committee wished to be updated on the acquisition of the title deeds in
question.

In the Action-Taken Report, the Ministry reported that the plans for Mambwe District Council
had been submitted to Ministry of Lands for approval. However, the Ministry of Lands was
unable to process with the approvals immediately due to large volumes of plans they were
currently processing.

Your Committee resolve to await a report on the matter.

KASEMPA DISTRICT COUNCIL

Statutory Audit Report and Audit Inspection Report (Constituency Development Fund) for
the Period 1 January, 2005 to 31 December, 2005

Payment without Supporting Documents: Main Account and Constituency Development Fund
Account: K15, 040,000

129. Your previous Committee urged the Council to ensure that supporting documents in
respect of the balance of K6, 090,000 were found.

In the Action-Taken Report, the Ministry reported that out of the remaining balance of
K6,090,000 comprising two payment vouchers, only one amounting to K1,500,000 had been
adequately supported. The other payment voucher in respect of payment to CASAT
Technologies Limited had still not been supported by receipts leaving a balance of K4,590,000
still outstanding.

Your Committee advise the Council Secretary to bring the matter to the attention of the Council
for a decision.

Unretired Imprests: K28,274,100

130. Your previous Committee urged the Council Secretary to ensure that the outstanding
imprest of K2, 852,000, was urgently retired.

In the Action-Taken Report the Ministry reported that of the outstanding imprest, K1,542,500 had
been recovered leaving a balance of K1,310,000 relating to a deceased officer still outstanding.

Your Committee resolve to await a report on the matter.

61
KAOMA DISTRICT COUNCIL

Statutory Audit Report and Audit Inspection Report (Constituency Development Fund) for
the Period 1 January, 2006 to 31 December, 2006

Irregular Tender Procedure and Non Completion of Grader Repairs: K67, 701,900

131. Your previous Committee wished to be updated on the outcome of the Court case.

In the Action-Taken Report the Ministry reported that although the matter was being handled by
Council lawyers, it had come to the attention of the Ministry of Local Government and Housing
that the Contractor, Gold West Equipment and Parts (Z) Limited, could not be traced. However,
the Ministry would continue to make follows ups on the matter with the Council and a report
would be accorded to your Committee.

Your Committee resolve to await report on the outcome of the court process.

MASAITI DISTRICT COUNCIL

Statutory Audit Report and Audit Inspection Report (Constituency Development Fund) for
the period 1 January, 2006 to 31 December, 2006

Failure to Maintain an Internal Audit Section

132. Your previous Committee awaited the resolution of the Council on the establishment of
an internal audit section.

In the Action-Taken Report the Ministry reported that the Council had written to the Ministry for
authority to establish and recruit staff in the said section.
Your Committee resolve to await a report on the actual establishment of the section.

KABWE MUNICIPAL COUNCIL

Statutory Audit Report for the period 1 January, 2004 to 31 December, 2006

Non Acquisition of Certificates of Titles

133. Your previous Committee had directed the Town Clerk to ensure that title deeds for the
remaining properties were obtained and requested for a progress report from the Ministry on the
matter.

In the Action-Taken Report the Ministry reported that apart from the Mulungushi Motel and
House No.24 Uganda Avenue whose title deeds were obtained, for the rest of the properties the
process was on going as they were on block titles. To obtain individual titles for the properties
would take some time due to the financial requirements involved.

Your Committee resolve to await a progress report on the matter.

62
KAZUNGULA DISTRICT COUNCIL

Statutory Audit Report and Audit Inspection Report (Constituency Development Fund) for
the Period 1 January, 2006 to 31 December, 2006

Non Preparation of Annual Financial Statements

134. Your previous Committee directed the Council Secretary to ensure that training of staff
was completed in order for the new accounting system to be applied fully.

In the Action-Taken Report, the Ministry reported that the Council had since implemented the
new accounting system but had not finalised the annual financial statements.

Your Committee resolve to await a report on the preparation of annual financial statements.

MPONGWE DISTRICT COUNCIL

Statutory Audit Report and Audit Inspection Report (Constituency Development Fund) for
the Period 1 January, 2006 to 31 December, 2006

Non preparation of Annual Accounts

135. Your Committee wished to be updated on the preparation of annual accounts.

In the Action-Taken Report, the Ministry reported that the Council had partially prepared income
and expenditure accounts as no valuation of assets was done in order to prepare the complete set
of annual financial statements in accordance with the accounting standards.

Your Committee resolve to await a report on the matter.

Breached Contracts: K287, 200,000

136. Your previous Committee wished to receive an update on the completion of the project.

In the Action-Taken Report the Ministry reported that the Council bought two pumps which had
been installed on the two boreholes but the contractor had not completed the last borehole within
the agreed time frame.

Your Committee resolve to await a report on the matter.

MONGU MUNICIPAL COUNCIL

Statutory Audit Report and Audit Inspection Report (Constituency Development Fund) for
the Period 1 January, 2006 to 31 December, 2006

Non Acquisition of Certificates of Title

137. Your previous Committee noted the response and requested the Council to provide a
progress report.

63
In the Action-Taken Report, the Ministry reported that the Ministry of Lands was still processing
the title deeds for all Council properties.

Your Committee resolved to await a report on the matter.

GWEMBE DISTRICT COUNCIL

Statutory Audit Report and Audit Inspection Report (Constituency Development Fund) for
the Period 1 January, 2006 to 31 December, 2006

Non Preparation of Annual Financial Statements

138. Your previous Committee urged the Council to prepare the income and expenditure
accounts and balance sheet and provide a progress report to them.

In the Action-Taken Report, the Ministry reported that the Council had partially prepared the
income and expenditure accounts but no balance sheet and cash flow statements had been
prepared.

Your Committee resolve to await a report on the matter.

Outstanding Debts: K21, 000,000

139. Your previous Committee wished to be updated on the recovery of the outstanding
amounts.

In the Action-Taken Report the Ministry reported that the Council had sent last reminders to
defaulters.

Your Committee resolve to await a report on the matter.

MILENGE DISTRICT COUNCIL

Statutory Audit Report and Audit Inspection Report (Constituency Development Fund) for
the Period 1 January, 2005 to 31 December, 2006

Missing Receipts: K2,250,000

140. Your previous Committee urged the Acting Council Secretary to secure a full Council
resolution on the matter.

The Ministry reported that the Acting Council Secretary had not referred the matter involving
missing receipts with amounts totaling K2,250,000 to the full Council for a decision. The
Ministry had given the Council not later than 31 March, 2009 to normalise the query.

Your Committee deplore the negative attitude exhibited by the Acting Council Secretary towards
resolving the query. They urge the Ministry of Local Government and Housing to ensure the
Council obliges with the recommendation of the Auditor.

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Un-updated Imprest Ledgers

141. Your previous Committee directed the Acting Council Secretary to urgently start
updating imprest ledgers.

In the Action-Taken Report, the Ministry reported that the Council did not avail the updated
imprest ledgers for verification. The Ministry had ordered the Council to update the imprest
ledgers by 31 March, 2009.

Your Committee are disappointed that the Council has not taken corrective measures as guided by
your previous Committee. They urge the Ministry of Local Government and Housing to ensure
close supervision of the Council. Your Committee will await a progress report on the matter.

Un-presented Payment Vouchers: K15, 385,478

142. Your previous Committee directed the Acting Council Secretary to immediately find
supporting documents in respect of the remaining K11,185,478.

In the Action-Taken Report the Ministry informed your Committee that the Council had not yet
traced supporting documents for the remaining payment vouchers with amounts totaling
K11,185,478. In case of failure to find supporting documents, the Ministry had advised the
Council to refer the matter to the full Council for a decision not later than 31 March, 2009.
Your Committee resolve to await a report on the matter.

Non Maintenance of Creditor’s Ledger

143. Your previous Committee requested the Ministry of Local Government and Housing to
assist the Council apply relevant accounting procedures.

In the Action-Taken Report, the Ministry reported that your previous Committee’s directive to
assist the Council apply relevant accounting procedures was being adhered to. The office of the
Provincial Local Government Officer, Luapula Province would help the Council set up the
accounting system during the first quarter of 2009. Further, the Council had employed two
accounting officers who were expected to assist in the maintenance of accounting records such as
creditors’ ledgers.

Your Committee note the submission and resolve to await a report on the matter following the
application of the new measures.

Missing Council Benz Tipper Truck Registration No. AAG 90

144. Your previous Committee were saddened by the attempts by the former MP to sell the
truck in question, without Council approval. They requested the Ministry of Local Government
and Housing to verify the recovery of the truck and provide a report to them on the current status.

In the Action-Taken Report the Ministry reported that your previous Committee’s directive to
verify the recovery of the Council Benz Tipper Truck AAG 90 had not yet been implemented
because the Council had not provided the physical address of the location of the truck in Lusaka
in order to report the matter to the Police for verification. The Council had been given up to 31
March, 2009 to travel to Lusaka to retrieve the Truck Registration No. AAG 90 and present it to
the Ministry for verification.

65
Your Committee await a progress report on the matter.

Payments Without Supporting Documents: K13,976,916

145. Your previous Committee directed the Acting Council Secretary to find supporting
documents in respect of the outstanding amount of K13, 526,916.

In the Action-Taken Report the Ministry explained that the Council had not traced supporting
documents for payments totaling K13,526,916.

Your Committee resolve to await a report on the matter.

Un-accounted for Funds: K1,888,000

146. Your previous Committee directed the Acting Council Secretary to ensure that the
K1,888,000 was accounted for urgently.

In the Action-Taken Report the Ministry stated that the Council had failed to account for the sum
of K1,888,000 due to non availability of records on this matter. In case of continued failure to
trace records to account for the funds, the Ministry had advised the Acting Council Secretary to
refer the matter to the full Council for a decision.

Your Committee resolve to await a progress report on the matter.

Misapplication of K4,500,000

147. Your previous Committee directed the Acting Council Secretary to pay back the
K4,500,000 to the Constituency Development Fund Account, without fail.

The Ministry reported that the reimbursement had not been made to-date and the Ministry would
recover the sum of K4,500,000 from the Council’s grants at source.

Your Committee await a progress report on the matter.

MWENSE DISTRICT COUNCIL

Statutory Audit Report and Audit Inspection Report (Constituency Development Fund) for
the Period 1 January, 2006 to 31 December, 2006

Outstanding Debts: K36,973,000

148. Your previous Committee directed the Council to recover the K36,973,000.

In the Action-Taken Report, the Ministry reported that the Council had managed to recover only a
sum of K8,033,000 from the outstanding debt of K36,973,000 owed by water consumers. One of
the debtors who was a contractor owing K12,000,000 had passed away and legal action could not
be taken against him. The matter would be reported to the full Council for a decision. The
Council had not taken action on a water consumer owing K9,000,000.

66
Your Committee are disappointed with the Council’s negative attitude towards the recovery of
the money in question. They wonder whether the Council tried to pursue the matter with the
administrator of the contractor’s estate. They await a report on the matter.

CONSIDERATION OF POLICY MATTERS

Submission by the Acting Permanent Secretary, Ministry of Lands, on the challenges faced
by Councils in the acquisition of Title Deeds for Council properties

149. Your previous Committee recommended that the Ministry of Lands and the Ministry of
Local Government and Housing should urgently work out a capacitating relationship in which
local authorities will be sensitised on the standards and requirements for the processing of Title
Deeds.

In the Action-Taken Report, the Ministry reported that in order to streamline the processing of
title deeds for the Councils, the Ministry of Lands had outlined procedures that should be
followed by local authorities to speed up the processing of titles deeds.

In noting the submission, Your Committee wonder whether these procedures have already been
disseminated to the local authorities and what the immediate impact has been.

CONSIDERATION OF THE ACTION-TAKEN REPORT ON YOUR PREVIOUS


COMMITTEE’S REPORT FOR 2007.

KAWAMBWA DISTRICT COUNCIL

Audit Inspection Report on the Utilisation of the Constituency Development Funds for the
Period 1 August, 1998 to 31 December, 2004

Unsupported Payment Vouchers: K112, 941,340

150. Your previous Committee wished to satisfy themselves that the funds were used for the
intended purpose. They, therefore, directed the Council Secretary to ensure that the contractors in
question were traced and receipts retrieved.

In the Action-Taken Report the Ministry reported that the Council had complied with your
previous Committee’s recommendations and had managed to account for K109,440,000, leaving
a balance of K3,501,340 without supporting documents. The owners of the remaining receipts
could not be traced because they had died and the administrators could also not be traced. The
Council Management had reported this matter to the full Council for a decision.

Your previous Committee resolved to await the Council’s resolution on the K3, 501,340.

In the Action-Taken Report the Ministry reported that the matter was reported to the Council’s
Finance, Licensing and General Purposes Committee which met on 13th July, 2007 and
recommended to write off the outstanding amount since the payees died and their administrators
could not be traced. The minutes of the Committee were reported to the 5th Ordinary full

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Council Meeting held on 31st August, 2007 but no Council resolution for adoption of the Finance
Committee Minutes was presented for verification. The Council Secretary was advised to present
a Council resolution on the adoption of the Finance Committee’s Minutes to the Ministry for
verification.

Your Committee resolve to await a report on the resolution of the Council.

CHONGWE DISTRICT COUNCIL

151. Your previous Committee had urged the Council to consider establishing a Bus Station in
order to provide shelter for travellers and improve the Council’s revenue base.

In the Action-Taken Report, the Ministry reported that the bus station shelter had not been
constructed because the Markets and Bus Stations Board was not been constituted.

Your Committee resolve to await a report on the matter.

152. Your previous Committee had implored the Ministry of Local Government and Housing
to help the Council find land to expand its township boundary.

In the Action-Taken Report the Ministry reported that the Council had conducted an audit of
unused land and the Council had enough land except that most of land was not developed.

Your Committee are pleased to learn that the Council has now discovered that they have enough
land and wish to await a report on the expansion of the township boundaries.

CONSIDERATION OF THE ACTION-TAKEN REPORT ON YOUR COMMITTEE’S


REPORT FOR 2006

MKUSHI DISTRICT COUNCIL

Alteration of Council Minutes

153. Your previous Committee in noting the submission, resolved to await a progress report
on the matter.

In the Action-Taken Report the Ministry reported that the matter was taken to court by the Anti-
Corruption Commission (ACC) who were prosecuting the case.

Your Committee resolve to await the outcome of the court process.

Missing Ninety Pockets of Cement

154. Your previous Committee resolved to await a progress report on the matter.

In the Action-Taken Report the Ministry reported that the matter was taken to court by the Anti-
Corruption Commission (ACC) who are prosecuting the case.

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Your Committee resolve to await a progress report on the matter.

Conclusion

155. Your Committee are again this year disappointed with the manner in which the
Councils are being run. There are still a lot of financial irregularities despite there being
elaborate financial regulations and guidelines. The situation, if not controlled, will cripple the
operations of the Councils.

Your Committee are indebted to all Town Clerks, Council Secretaries and the Ministry of Local
Government and Housing for the support rendered during the consideration of the Report of the
Minister of Local Government and Housing. Your Committee are also indebted to the
Secretary to the Cabinet for the update he provided to them on the decentralisation process.
Your Committee thank the Parliament of Uganda for accepting to host them.

Your Committee further thank the offices of the Auditor-General and the Clerk of the National
Assembly for the advice rendered during their programme of work.

Finally, your Committee wish to record their indebtedness to you, Mr Speaker, for the guidance
given during the Session and for facilitating their study tour to Uganda.

October, 2009 J J Mwiimbu, MP


LUSAKA CHAIRPERSON

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