Thu | Aug 17, 2017

Stringent sanctions in place for the financial operations of local authorities

Published:Tuesday | December 13, 2016 | 12:00 AM

The mode of operations of the island's municipal corporations will be subject to greater monitoring and scrutiny due to the accountability mechanisms embedded in the Local Governance Act of 2015 and the Local Government (Financing and Financial Management) Bill of 2015.

The Local Governance Act requires that among other things, councils appoint a Local Public Accounts Committee to "examine the financial activities, transactions, and procurement practices of the Local Authority to determine conformity with applicable legal requirements, standards, and guidelines; and call on officers of the Local Authority to give account and to explain matters as specified".

According to the act, the committee shall either consist of one-half being council members and the other being non-council members, or one-third each from the majority and minority council members and one-third from the public. The committee is to be chaired by a non-council member and must not include the mayor, deputy mayor, finance committee chairperson, or the chief executive officer.

"The functions of the Local Public Accounts Committee shall be to review the performance of the Local Authority to determine whether accountability, transparency, and ethical standards are being observed; review performance of the Local Authority to assess whether service delivery standards and other obligations of the council to the inhabitants of the Local Authority are being achieved ..." the act says.

The act also requires that each municipal authority conduct community meetings at least once per year to present performance reports and plans, and that prior to submitting strategic plans and budgets to the minister for approval, that they ensure that these are also presented to constituents for consideration and feedback.

 

SUBJECT TO AUDIT

 

Each Local Authority is also mandated to submit to the minister of local government monthly statements of financial position; statements of financial performance; cash flow; actual expenditure versus budget; actual revenue versus budget and their bank reconciliation statements.

These documents are to be prepared based on the International Public Sector Accounting Standards adopted by the Government of Jamaica.

The municipal authorities are also required to submit annual financial reports, including audited financial statements at the end of each year, which are to be tabled in the House of Representatives and in the Senate within 30 days after receipt.

Their accounts will also be subject to audit by the auditor general. In fact, after the end of each financial year, municipal corporations are mandated to make all returns, books, papers or other information available to the auditor general as required, following which a report on the financial position of the Local Authority will be submitted to the minister.

"Any sum expended which is determined by the Minister, after reviewing the Auditor General's report, as not having been authorised in the estimates, or being in excess of the amounts authorised for the particular purpose, or as approved by the Minister; or as being an illegal payment out of the funds of the Local Authority, shall be recoverable from such of the persons who have incurred or purported to authorise the expenditure, based on the law. Liable persons include the mayor, the councillors, any member of a committee of the Council of the Local Authority appointed under the Local Governance Act; the Chief Executive Officer, and the chief financial officer."