THE Chipata Municipal Council has unearthed a scam in which some employees in the accounts department have defrauded the local authority of millions of Kwacha through non-banking and issuing of fake receipts.

This is according to the latest interim audit report on the operations of the council dating back to last year, which has revealed a number of glaring financial irregularities.

According to the report, some employees in the revenue collection team had forged duplicate receipt books which they were using to issue to clients.

Early this year, Dilika ward councillor Micheal Banda, who is also finance and general purposes committee chairperson, told the full council meeting that the local authority last year made a loss of K414 million due to poor revenue collection.

Mr Banda said yesterday that the audit report should be extended to the period before 2008 because the trend may have started a long time ago.

The audit report, conducted by auditor Matekenya Masoja, also revealed that a number of original licence receipt leaves had been pulled out in suspicious circumstances.

The report said some officers in the revenue team were not surrendering licence books because they were pulling out original leaves and selling them separately for personal gains.

"It was surprising to note that during the whole of 2008, the council only used seven trading retail licence books and seven stall licences books. It is doubtful that as big as it were, Chipata Municipal Council could only use the stated number of books," the report reads.

The report also revealed that officers were keeping the collected revenue for more than six months before handing it to the main cashier for subsequent banking.

Chipata Town Clerk Golden Banda admitted that there were a lot of financial irregularities and gross misappropriation of funds at the local authority before he took over as principal officer.

"We have just found some of the receipt books that were missing. I do not want to say much but it is evident enough that colossal sums of money have been stolen from the council," he said.