The 2018/2019 Auditor General's Report on Municipal Councils which has been tabled in parliament has revealed that the audits for 11 municipal councils are in backlog.
The three municipal councils whose audits are not in backlog include Sigatoka, Rakiraki and Ba.
Auditor General, Ajay Nand says 44 financial statements are yet to be received from various municipal councils.
According to the Auditor General's Report, audits of municipal councils have been extensively delayed and is due primarily to the non-submission of financial statements annually to the Auditor General.
The Auditor-General says due to significant delays in the submission of draft financial statements for audit, the risk of fraud being undetected is very high.
The report further says that internal controls for 10 municipal councils have been assessed as ineffective and the municipal councils need to strengthen controls over cash and receipts management, journals and reconciliation, purchases and payments and payroll.
The report further says that other areas that require immediate attention by the Special Administrators/Chief Executive Officers for the municipal councils for priority and prompt actions include significant delays in submission of draft financial statements for audit, non-compliance with the accounting standards, limitation of scope due to insufficient supporting documents, poor records management, poor asset management, lack of documentation for key account areas such as general rates, loans and advances, policies and procedures not updated or non-existent, poor collection and recording of municipal rates, absence of proper reconciliations for cash, debtors, VAT, rates, and payroll expenses.
According to the report, modified audit opinion was issued on all financial statements audited which reflects negatively on the municipal councils and urgent and close attention should be given to address matters highlighted.
The Auditor-General has reported to the municipal councils and the Ministry of Local Government all significant matters concerning material accounting issues and deficiencies in internal controls.
