By NQOBANI NDLOVU
BINGA Rural District Council (RDC) is violating a government directive for local authorities to channel 70% of their financial resources to service delivery and the remaining 30% to salaries, a new audit has revealed.
A 2015 ministerial directive provides that employee costs of local authorities should not exceed 30% of total expenditure with 70% channelled towards service delivery.
In a bid to enforce the directive, the Local Government ministry has been turning down budget proposals that do not meet the 30/70% ratio.
In 2016, the ministry turned down budget proposals of a total of 26 urban councils that wanted to prioritise salaries ahead of service delivery.
A report by auditor general Mildred Chiri for the financial year ended December 2017, however, exposed Binga RDC for violating the 30/70% salaries to service delivery ratio.
“The following material issue was noted during the audit. 1. Employment Costs 1.1. Employment cost ratios: Finding — The payroll costs totalled $792 404, consuming 79% of the council’s income of $1 006 729 for the year.
“Payroll costs also constituted 68% of total expenditure of $1 163 790.
“The council was not adhering to the government policy of 30:70 costs to service delivery ratio,” the audit report reads.
“Risk/Implication: Service delivery is compromised as most of the resources are channelled towards employment costs.
“Recommendation: The council should put in place measures to ensure that it achieves the required ratio.”
A number of Acts regulate operations of local authorities, chief among them the Urban Councils Act (29:15), the Rural District Councils Act (29:13) and the Public Finance Management Act (22:19).
By law, local authorities should be audited by the Office of the Auditor General on an annual basis but as at the end of 2017, a good number of them were still unaudited, the audit report reveals.
Analysts have, however, argued the 30/70% ratio is problematic for some local authorities with poor revenues, resulting in them failing to attract the right personnel.
“Low-income local authorities may then fail to attract the right personnel due to unattractive salaries and this will obviously lead to lower council efficiency,” a 2019 research titled: 2019 and The State of Local Government In Zimbabwe reads.
“The National Employment Council (NEC) also does not take into account the financial hardships of local authorities, but rather negotiates based on the performance of the economy in general.
“Councils are legally required to adhere to NEC rates. There may be a need to lobby for a change in regulation…”