Report by the Auditor General on the Workings of Local Government 2018

The Auditor General, Mr. Charles Deguara, today presented to the Hon Speaker of the House of
Representatives, Hon Anglu Farrugia, the annual report on the workings of Local Government for the year
2018.

Fifty-four (54) Local Councils and three (3) Regional Committees together with the Local Councils
Association delivered the audited financial statements by the established deadline of 30 April 2019. On
the other hand by mid-October 2019, being the final deadline set by the National Audit Office to analyse
the financial statements prior to publication, the audited accounts of Qrendi Local Council and the Gozo
Regional Committee were not yet received.

This Office acknowledges the excellent collaboration throughout the year with the main stakeholders
involved and believes that together with the continued efforts on the part of the Administration, it could
assist local authorities in addressing the shortcomings which have been repeatedly reported upon in
recent years.

Prevailing issues related mostly to accounting records that were not always properly updated,
procurement not in line with standing regulations and fixed assets registers not maintained.

Other concerns included the following:

a. due to lack of substantiating documentation, the respective Local Government Auditor could not
express an opinion on the financial statements as presented by Birgu, Kalkara and Valletta Local
Councils;

b. the audit reports of another fifty-one (51) Local Authorities were qualified with an ‘Except For’ audit
opinion, meaning that certain areas could not be audited because of restrictions beyond the auditor’s
control.

c. eleven (11) Local Councils recorded a negative working capital, indicating that they will not be able to
meet their financial obligations as they fall due; and

d. eleven (11) local authorities had not yet submitted their response to the management letter by midOctober 2019.

The Report in caption analyses in further detail these shortcomings, along with others, that were identified
during the audit carried out by the Local Government Auditors on the financial statements, as prepared
by the local authorities.