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Local Councils perform poorly in revenue collection

February 7, 2019

By Jariatu S. Bangura

The 2017 annual Audit Report on the Public Accounts of Sierra Leone has revealed that the 19 councils registered low accounts on their own- source revenue generation for the period under review.

The report stated that the councils’ budgetary performance in the mobilization of own-source revenue in 2017 was poor.

The audit report which has been laid on the table of parliament notes that the comparative analysis between the budgeted and actual own-source revenue generated showed that the actual revenue was less than the budgeted amounts by approximately 42 %( Le16.7billion).

It states that the councils were only able to collect 58 % (Le23.5billion) of the own-source revenue that they budgeted to collect in 2017.

Similarly, the report says there was a 3% drop in own-source revenue generation in 2017, when compared to 2016.

“Revenue generated dropped from Le24.3billion in 2016 to Le23.5billion in 2017. It was however observed that even though there was an overall drop in revenue generation, 11 Councils increased their performance in the revenue mobilisation drive in 2017, when compared to 2016,” the report notes.

The report observed that poor performance in revenue mobilization could have been attributed to over-ambitious budgeting, emanating from the use of unrealistic basis of budgeting or it could be that controls were not in place for the proper collection, banking and accounting of revenue.

The Auditor urged that the councils should therefore embark on a massive campaign regarding taxes and other sources of revenue and restructure their  current workforce, or recruit the services of more collectors for greater revenue generation.

The report notes that it was important that the controls surrounding budgeting, collection, banking, and recording of own-source revenue are strengthened.

It suggested that the council should set up realistic targets using first-hand data, cumulative experience and instituting proper segregation of duties, carrying out spot checks, doing regular reconciliation and supervision of the entire process.

However, a comparative analysis between the budgeted and actual grants transferred to councils in 2017 showed that the actual grants were less than the budgeted amounts by approximately 53 % (Le79.5billion), thus the councils were only able to receive 47 % (Le71.1billion) of the total grant that they budgeted in 2017.

Meanwhile, the annual report notes that there was 24% drop in grants transferred in 2017 when compared to 2016, and that transfer dropped from Le94.2billion in 2016 to Le71.1billion in 2017.

The report attributed the drop to the setting of high unachievable targets and irregularity of grant transferred from central government.