Councils in spotlight over public funds

DODOMA: MEMBERS of Parliament have called for urgent reforms in Local Government Authorities (LGAs) following audit findings that have exposed weak oversight of council investments, stalled development projects and weaknesses in the management of public funds.

The recommendations are contained in a report by the Parliamentary Standing Committee on Local Authorities Accounts (LAAC) on audited LGA accounts for the 2023/24 and 2024/25 financial years, presented in the National Assembly by committee Chairperson Ado Shaibu.

The committee identified operational challenges affecting strategic investments, including markets, bus terminals and commercial buildings, warning that poor planning and inadequate supervision undermine their performance, service delivery and revenue generation.

It called for stronger government oversight of council investments and improvements to bus terminal infrastructure. Councils were also directed to address defects identified by the Controller and Auditor General (CAG) to ensure the facilities operate effectively and generate expected revenue.

The committee further urged the company managing Rock City Mall in Mwanza to comply with relevant laws so that Mwanza City Council and Ilemela Municipal Council can receive their dividends.

On development financing, councils were directed to account for or restore 36.92bn/- that should have been allocated from their ownsource revenue for development projects in the 2024/25 financial year by June 30, 2029.

Mr Shaibu said the government should provide funds to complete stalled projects, including Ngangamfumuni Bus Terminal in Kilimanjaro Region, an operating theatre at Tunduma Town Hospital, Mwanza City Council’s Health Department offices and Sikonge District Council headquarters.

The government was also directed to ensure SUMA JKT completes projects assigned under its contracts by June 30, 2029.

To improve revenue collection, councils were instructed to recover 8.52bn/- in outstanding service levies by December 30, 2027, while the National Food Reserve Agency (NFRA) should pay 2.916bn/- owed to seven councils and other authorities with similar claims by the same date.

The Ministry of Lands, Housing and Human Settlements Development was directed to remit 13.54bn/- owed to councils as their 20 per cent share of land rent by June 30, 2028.

Councils must also update taxpayer databases by January 30, 2027 and submit the information to the CAG by March 30, 2027.

The committee noted that some councils lack strategies to strengthen own-source revenue collection and remain heavily dependent on central government grants.

On the Women, Youth and Persons with Disabilities Fund, councils were directed to remit 13.88bn/- in statutory allocations by June 30, 2028.

The government was also asked to recover 120.48bn/- in loans issued to groups by the same deadline, with future loans following the 4:4:2 allocation ratio.

Other recommendations include filling vacant leadership positions in council departments and units, strengthening internal audit functions through adequate staffing and resources, and remitting 3.90bn/- in unpaid employees’ contributions to the Public Service Social Security Fund (PSSSF) by December 30, 2027.

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Councils were also directed to secure title deeds for their areas by December 30, 2027, while the government should pay 28.76bn/- in compensation to affected landowners.

The committee further called for public procurement in the 2026/27 financial year to be conducted through the electronic NeST system and urged the Public Procurement Regulatory Authority (PPRA) to audit areas where the CAG identified weaknesses.

Dodoma City Council was given until December 30, 2027, to address contractual irregularities in the leasing of Dodoma City Hotel. The Ministry of Finance was also directed to settle debts owed to public servants and suppliers that were questioned by the CAG.

“The councils should make adequate budgetary provisions to settle the debts, giving priority to claims according to how long they have remained unpaid,” Mr Shaibu said.

The government was also urged to review the rates at which councils allocate own-source revenue to development projects before the 2027/28 financial year, taking into account their financial capacity