THE government has strengthened its oversight of devolution funds usage by metropolitan councils and local authorities to combat widespread financial mismanagement.
The newly launched Zimbabwe intergovernmental fiscal transfers manual (IGFT) grants the Local government ministry authority to withhold or halt devolution fund allocations if misutilisation or non-compliance with regulations is detected.
The Auditor General’s Office has consistently identified financial mismanagement and non-adherence to accounting standards in numerous local authorities since the inception of devolution fund disbursements.
In her 2022 report for instance, acting auditor general Rhea Kujinga flagged the Mutoko, Norton, Umzingwane, Umguza, Harare, Hwange, Kusile, Mazowe, Mutasa, and Nyaminyami councils for irregularities relating to the devolution funds.
“The ministry responsible for local government may withhold the transfer of an allocation to a provincial/metropolitan council or local authority, or any portion thereof, for the reasons given below and after being given 30 days to justify or rectify; the provincial/metropolitan council or local authority does not comply with any provision of the act that guide intergovernmental fiscal transfers or any government regulatory provision,” reads part of the IGFT.
‘Failure by the provincial/metropolitan council or local authority to submit acquittal of any required reports on the utilisation of the previous transfer, if explanation is not given for significant under-expenditure on previous transfers during prior financial year, previous transfers have been used for ineligible expenditures, and failure to adhere to the provisions of the Act that guide public procurement.”
The manual highlighted that, in making the decision to withhold disbursement of an allocation to a provincial council or local authority, the Treasury through the ministry responsible for local government will communicate the reasons to the guilty parties.
This will be done to allow the guilty parties’ time to remedy the grievances raised.
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The manual also noted that funds can only be reallocated in the case of a national disaster and emergencies.
The fund’s disbursement will be categorised as capital and operational transfers to distinctively equip local authorities and central government with the tools to manage the fiscal grants to promote transparency and accountability.
The manual emphasised that any other operating costs associated with the general running costs of the local authority should be financed from the authority’s own source revenues.
The government allocates 5% of the national revenue to provincial and local authorities towards the devolution funds.
However, the Treasury will determine additional allocation beyond 5% for vertical allocation.
Since 2019, the government has sought to operationalise the provision of 5% of its revenues to its lower tiers in line with the constitutional provision for devolution.
