20 March 2017

Zimbabwe: Compliance Audits for Councils

Government is set to carry out compliance audits of local authorities after realising that some councils were hiding some expenditures in their budgets in a bid to meet 70:30 service delivery to employment costs ratio.

In an interview, Local Government, Public Works and National Housing permanent Secretary Engineer George Mlilo said Government approved budgets for all urban local authorities, but was going to monitor to ensure that councils were not spending money outside their budgets.

"We approved all the budgets with the last being that of Redcliff. We ensured that the 70:30 ratio in favour of service delivery was observed. We noticed that some local authorities were hiding their expenditure to meet the requirements," he said.

"We are, therefore, going to carry out compliance audits to ensure that councils stick to the budgets they submitted. I heard at a portfolio committee on Local Government, Rural and Urban Development that Mutare had some anomalies. We are going to confirm that."

Eng Mlilo said since Government introduced the 70:30 employment costs to service delivery ratio, it has seen some semblance of service delivery.

Audits carried out in towns last year revealed that other payments made were outside submitted budgets.

According to the new guidelines for local authorities' budgets, councils are now required to present capital budgets of a minimum of 15 percent of total council budgets.

Circular minutes No 2, item 9 of 2016 on Capital Investment Programme (Capital Expenditure), says capital budgets should be a minimum of 15 percent and a maximum of 25 percent of the total council budget.

It is also the ministry's requirement that local authorities should bring employment costs in line with the 70:30 employment costs to service delivery ratio.

Government rejected the 2016 budget proposals from 26 urban councils that wanted to prioritise salaries ahead of service delivery.

Eighteen of these -- among them Harare, Bulawayo, Mutare, Masvingo and Gweru -- were ordered to revise their figures and some were approved after revision, while the rest were rejected outright.

Only Beitbridge, Chipinge, Gokwe, Kwekwe, Mvurwi and Rusape's budgets got the nod.

Service delivery has deteriorated in most local authorities over the years due to strained budgets occasioned by astronomical wage bills prompting residents to boycott the payment of rates.

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