LOCAL GOVERNMENT (AUDIT) REGULATIONS (audit)

SUBSIDIARY LEGISLATION 363.02

LOCAL GOVERNMENT (AUDIT) REGULATIONS

26th November, 1993

LEGAL NOTICE 156 of 1993, as amended by Legal Notices 135 of 2007

and 124 of 2019.

PART I

General Provisions

The title of these regulations is the Local Government

(Audit) Regulations.

In these regulations, unless the context otherwise requires -

"Act" means the Local Government Act;

"audit procedures" means the Local Councils audit procedures

issued by the Minister;

"auditors" means the local government auditors appointed under

article 65 of the Act;

"Council", "Councillor", "Auditor General", "financial year",

"locality", "Mayor", "Minister" and "Secretary" shall have the same

meaning as is assigned to them by article 2 of the Act;

"Council’s administrative office" shall have the same meaning as

is described in article 48 of the Act;

"the Director" means the Director for Local Government;

"financial procedures" means the Local Councils financial

procedures issued by the Minister to be followed by Councils in the

execution of their financial duties and responsibilities under the

Act and in accordance with the Local Government (Financial)

Regulations.

PART II

Financial Audit

(1) The accounts and financial operations of each Council

shall be audited by auditors at the end of each financial year.

(2) After concluding each annual audit, the auditors shall

prepare an annual audit report on the financial statements of the

Council, giving an opinion on whether or not -

(a) the Council’s accounts fairly present, in accordance

with the accounting policies applicable to Councils,

the income and expenditure and the retained funds of

the Council; and

(b) the Council’s financial statements were prepared in

accordance with the Act, these regulations and the

audit procedures.

(3)

The annual audit report shall be submitted to the Auditor

General not later than twelve weeks after the end of the financial

year for the first year and thereafter not later than the 30th June of

each year.

(4) A copy of the annual audit report shall be open for public

viewing at the Council’s administrative office during the Council’s

normal office working hours.

(1) The Mayor shall inform the Auditor General and the

Director whenever the Executive Secretary hands in his notice of

termination of employment or when the Local Council does not

intend to renew his contract.

(2) Whenever there is a change in an Executive Secretary, there

shall be prepared a set of Financial Statements which shall serve as

a handover and which shall cover the period from beginning of year

to the last working day of the Executive Secretary who will be

ending his employment with the Council. These Financial

Statements shall be prepared prior to the end of the employment of

the Executive Secretary in office and a copy thereof shall be

forwarded to the Auditor General and to the Director

Provided that this shall be without prejudice to the new

Executive Secretary’s right to request a mid-term audit if he deems fit.

(3) Whenever a mid-term audit is requested, the Auditor General

shall appoint an individual or partnership to carry out the mid-term

audit. The fee for this audit, which will be paid by the Local

Council involved, will be agreed beforehand between the Auditor

General and the Local Government Auditor appointed to audit that

particular Council. The fee shall not exceed the fee payable for the

Financial Year and Audit.

(4) After concluding each mid-term audit, the auditors shall

present to the Auditor General the financial statements covering the

p er i od from the beginning of the year t o t he l ast da y o f t he

employment of the outgoing Executive Secretary, and an Audit

Report thereon. The auditors are also to draw up a Management

Letter on the financial position of the Council pointing out any

errors, omission and, or shortcomings and weaknesses encountered.

The auditors are to supervise any adjustments and corrections that

might be necessary.

(5) The time limit by which the documents listed in sub-

regulation (4) are to be submitted to the Auditor General shall be

agreed upon between the Auditor General and the auditors carrying

out such audit.

(1) Auditors shall conduct interim audits during the

financial year at the request of the Auditor General and on topics

designated by him.

(2) After concluding each interim audit the auditors shall

prepare an interim audit report on the subject matter of the audit.

(3) The interim audit report shall be submitted to the Auditor

General not later than eight weeks after the conclusion of the

interim audit or by any other date requested by the Auditor

General, whichever is the earlier.

(4) A copy of the interim audit report shall be open for public

viewing at the Council’s administrative office during the Council’s

normal office working hours.

(1) Councillors, the Secretary and other employees shall

cooperate with the auditors and their assistants and provide them

with oral or written explanations, as the auditors may require, as

well as access to all Council property, documents and assets.

(2) Councillors, the Secretary and other employees shall also

afford all facilities to auditors to have access to all Council

information, records and reports deemed necessary in the execution

of their duties and responsibilities.

(1)

If the auditors -

(a) observe any serious weakness in the Council’s

accounting and financial operations which, in their

opinion, could lead to a breakdown in such operations;

or

(b) form a suspicion of fraud, embezzlement, or abuse of

office by any Councillor or employee; or

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

fairness of the Council’s accounts and financial

statements,

they shall register their findings in a special report submitted to the

Minister and the Auditor General.

(2) The Auditor General 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 circumstances.

(3) The Auditor General may request the auditors to submit a

special report on any other matter which he deems may require

further review.

(1) After concluding each audit, the auditors shall submit

to the Auditor General the financial statements prepared by the

Executive Secretary of the Council, the Audit Report thereon and

the Management Letter by not later than the 30th June of each year,

or if this happens not to be a working day, the first following

working day

Provided that, if there are any adjustments to be carried out,

the auditors are to bring these to the attention of the Local Council

and return the financial statements so that the necessary

adjustments are carried out and approved by the Local Council and

revised financial statements drawn up. The final approved financial

statements duly signed by the Executive Secretary and the Mayor,

are to be returned to the auditors who will append the Audit Report

and Management Letter and submit them to the Auditor General by

not later than the 30th June of each year, or if this happens not to be

a working day, the first following working day.

(2) The Auditor General will then forward the financial

statements, the Audit Report and Management Letter to the Local

Council. The Mayor and the Executive Secretary in return are to

submit the Council’s response to the Director, the Auditor General

and the auditors by not later than August 14 of each year and if this

happens not to be a working day, the first following working day, or

six weeks after receipt of the Management Letter from the Auditor

General, after seeking the Local Council’s approval.

(3)

The Council and the Executive Secretary shall

(a) implement the auditors’ recommendations relating to

non-compliance with the Act, these regulations and

other regulations or procedures issued under the Act;

and

(b) give due consideration to the implementation of the

recommendations made by the auditors to correct any

weaknesses in the Council’s accounting and financial

operations.

PART III

Value for Money - Securing Cost, Economy, Efficiency and

Effectiveness

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

analyse and compare the Council’s indicators to measure cost,

economy, efficiency and effectiveness for the current year against -

(a) the Council’s indicators in the previous three years;

(b) the average indicators or measures for all Local

Councils in the previous year;

(c) the standard indicators, where applicable, which are

specific to the Council;

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

auditors or stipulated by the financial procedures.

(2) The auditors shall report to the Council on the analysis and

comparisons made according to sub-regulation (1). The Mayor

shall submit a copy of the report to the Minister and the Auditor

General together with the management letter specified in regulation

7(3).

(3) The Secretary shall include the comparison of the Council’s

indicators to measure performance in the annual administrative

report referred to in article 52 of the Act.

(1) At the request of the Auditor General or as stipulated in

the audit procedures, auditors shall conduct a value for money audit

on whether the Council has made the proper arrangements for

securing economy, efficiency and effectiveness related to any or all

of the following

(a) Council organisation structure;

(b) policies and practices;

(c) systems and procedures;

(d) human, financial and physical resources;

(e) indicators to measure performance of cost, economy,

efficiency and effectiveness.

(2) Based on the findings resulting from the value for money

audit, the auditors shall make recommendations to the Council with

the aim of improving overall operational performance and value of

the Council to the public.

(3) The Mayor shall submit a copy of the value for money audit

findings and recommendations to the Minister and the Auditor

General within two weeks from receipt.

The Minister or the Auditor General may request an ad hoc

audit of any Local Council’s operations, from any other entity

empowered to do so by any legislation in force.