156 tal-1993

I.. N. 156 01 1993

LOCAL COUNC ILS ACT, 1993

(ACT NO. XV OF 1993)

LoatI Councilii (AIId]!) RrtULaUons, 1993

IN exerci5e of tl!,e powers c:onferTtd by lI«Iions 66, 67 and n of the

Local Councils Act. 1993. the Prime Minister, in conjunction with Ihe

Minister of Finance, has made the: following regulations

PART I

I. ~ regulations may be cited as the Local Councils (Audi t) CIlMiooI

Regulations, 1993.

Dawn ir-regolamcnti jislgl'lu ji5.sejbu r-Regolamenti ta'I-I993 TIooIu .

dwar Kumilli Lakal; (Verifika).

I n these regulations. un less the context ot herwise requires _

MAa ~ mean s the Local Councils Aa , 1993;

MAudil Proeedures- meaDS the Local Councils Audit

Procedures issued by the Minister

Mauditors- means the local government audi tors appointed

under section 6S oftlle Aa ;

MCou ncil", "'Councillor-. " Director of Audit-. kfinancial

year ~, Mlocality", "Mayor". " Minister- and kSeeretaf)'- shall hne

the 5I.me meaning as is assigned to them by section 2 of the Aa ;

- CounciI's adminililrative offiee- shall have the 5I.me meaning

as is described in scdion 48 of the Act;

- Financial Procedures" means Ihe Local Councils Financial

Procedures issued by the Minisler to be followed by Councils in the

exCi:ution of their financial duties and responsibilities under the

Aa and in accordance with the Local Council$ (Financial)

Regulations. 1993.

PART 11

FiNlnciDI Audil

J. ( I ) The aCOOtlnts and financial operafions of each Council

shall be audited by auditors al the end of each financi al year.

(2) After c:oncIudilll each annual audit, [he audi,ors 1hlll

prepare an annual audi t report on the financial $I.lemenl$ of the

Council, givin,. an opinion on whethe r or 001 -

(a) the Council's a«ounts fairly pTC$enl, in accordance with

the accountillg policie$ applicable 10 Councils, the income and

expenditure and the remined funds oflhe CoullCil; and

(b)

the Council's financial §fatemenlS were prepared in

IICCOrdilllce with the Aa . these regulations and the Audit

Procedures.

(3) The annual audit report shall be submined 10 the

Director of Audit not la tcr thall t .... elve wee ks after t!le end of the

financial year for the first yeaT and thereafter not later than the 30th

June of each year.

(4) A copyoflh.e annual audit report shall beopen for public

viewing al the Council's administrative of rICe during the Council's

oonnal offICe working hoors.

(I) Auditors shall conduct interim audits during the financial

year atlhe request of the Di rectorof Audit and on topics designated by

him.

(2) Aner ooncludi ng each interim audit the auditors shall

prepare an interim audit report on the suh)ect malterofthe audit .

(3) The interim audi t report shall be submitted to the

Director of Audit not later tha n eight weeks after the conclusion oflhe

interim audit or by any ot her date requested by the Dire~tor of Audit ,

whichever is the earl ier.

(4) A cop)' of the interim audit report shall be ope n lor publi<

viewi ng at the Council's administrative office during the Council's

IlOrmal officz worioing bours.

(1) Councillors, the Secretary and other employees shall

cooperate with the audilors and their assistants and provide them with

oral or wnllen explanations, as the auditors may require. as well IllI

access 10 all Council property, documents and usclS.

(2) Councillors. the Secrellry and mher em~es shan also

afford all facilities to auditors to have accns 10.11 Council in formation.

records and reports deemed necessary in the execution of their duties

and responsibilities.

(I)

If the luditors -

(a) observe any serious wea kness in the Council's accounting

and financial operations which. in their opinion, C()uld lead fO I

breakdown in luch operations; or

form a .rospicion of fraud, embe:zzlement, or abuse of

(b)

offic:e by Iny Councillor or employee; or

(c) ~rvc any item which may affect their opinion on the

fairness of the Council's .{;COunts and financial statements.-

they shall register their findings in I special report submiucd 10 me

Minister and tbe Director of Audit .

(2) The Dircctorof Audit shall review the special report and

shall make recommendations to the Minister and the Minister

responsible for finance on any action that is deemed appropriate in the

cireumstances.

1. ( I) After concluding each ludi llhe audi tors shall submit. ","-_

management letler 10 the Mayor including a summary of the auditon' Ienu.

findings and recommendations on the acrountin& and financial

operations of the Council.

(2) The Council and the Secretary shall -

(a)

implement the audi tors' recommendatiOl'lS relating to

non~mpliance

with the Act , these: regulations and «her

regulations or procedures is.sued under the Act ;

(b) give due consideration to the implementation of the

recommendations made by the auditors to corn:ct any weaknesses

in the Council's a(:(:Qun ting and financial operations.

(3)

The Mayor shall submit a oopyof the management lener

10 the Minister and the Dire<.:torof Audit within twoweeksofil5 receipt

in the first year and thereafter by the ISth of July of each year.

(4) The Mayor shall submit, together with the management

letter specified in paragraph (3) of this regulation , a report uplaining

the actions to be taken by the Council as a result of the management

letter.

PART III

Value for Monty -S«uring COSI, EcOMmy, EffiCitncy and

EffUli~tnt.JJ

(I) At the end of each financial year the auditors shall

analyse and compare the Council's indicators 10 measure cost ,

economy, effidency and effectivenC$$ for tbe tufTent year against -

(11)

the Council's indica tors in the previous three years;

(b)

the average indiulOr5 0r measures for all Local Councils

in the previous year;

(c)

the standard indicators, where applicable, which are

specifIc 10 the Council;

(d) any other indicator or measure deemed fit by the

auditors or stipulated by the Financial Pr<:>a:durcs.

(2) 'The auditors mall repon to the Council on the analysis

and comparisons made acrordin,lo paragraph (I) of this regulation.

'The Mayor $hall submit a c:opy of the report 10 !be Min ister and the

Director of Audit together with Ihe management letter specified in

paragraph (3) of regu lation 7 oflhese regulations.

(3) The Secretary Ihall indude the comparison of the

Council's indialors to lMasure performance in the annual

administrative repon referred to in scdioo 52 of the Act .

(I) AI the request ofthe Di rector of Auditor a$slipuJaled in

the Audit Procedu reli, auditors shall conduct a Yalue for money audit 011

whethe r the Council has made the proper am.nge ments for seeuring

«O/KIfT\y. efficiency and effectivcl1C55 related to any or all of th e

following

(a)

Council organi1<ltion !i1rUC1Ure

(c) sync m! and procedures

(d )

huma n, fin aooal and physical rcsoorccs

(e) indicatOf1 to measurc performance of cost, cconomy.

cfficicncy and cffcClivene55.

(2) Based o n the fi nding~ resulting from the value for moncy

audit , thc auditon shall malr.e recommendations 10 the Council wi lh the

aim of improving overall operational performance and val uc of thc

Council to the public.

(3) Thc Mayor Shall submit a copy of Ihc value for money

audit (indings and rccom mendalions 10 the Mi nister and the: Director of

Audit within two weelr.$ from receipt.