LOCAL COUNCILS (PROCEDURES) _g S.L.363.12 1
SUBSIDIARY LEGISLATION 363.12
LOCAL COUNCILS (PROCEDURES) 
REGULATIONS
20th September, 1996
LEGAL NOTICE 180 of 1996, as amended by Legal Notices 28 and 152
of 2000, 320 and 323 of 2002, and 319 of 2003.
Citation .
(Procedures) Regulations.
Compliance with 
procedures.
Amended by:
L.N. 28 of 2000.
Cap. 363.
2. In the exercise of their functions under the Local Councils
Act, Local Councils, their Secretaries and employees shall comply
with the procedures set out in the publications listed in the First
Schedule as may be amended in accordance with the provisions of
any subsequent schedule.
2 _g S.L.363.12 LOCAL COUNCILS (PROCEDURES)
L.C.P. 1/96 - Local Councils (Financial) Procedures, 1996
L.C.P. 2/96 - Local Councils (Audit) Procedures, 1996
L.C.P. 3/96 - Local Councils (Tendering) Procedures, 1996
L.C.P. 4/96 - Local Councils (Human Resources) Procedures, 1996
L.C.P. 5/96 - Local Councils (Prosecuting) Procedures, 1996
L.C.P. 6/96 - Local Councils (Bye-Laws) Procedures, 1996
L.C.P. 7/96 - Local Councils (Meetings) Procedures, 1996
L.C.P. 8/96 - Local Councils (Office) Procedures, 1996
Amended by:
L.N. 28 of 2000. FIRST SCHEDULE (Regulation 2)
LOCAL COUNCILS (PROCEDURES) _g S.L.363.12 3
The Procedures specified in the First Column of the Schedule shall have
effect subject to the amendments specified in the Second Column thereof.
SECOND SCHEDULE Added by:L.N. 28 of 2000.
Amended by:
L.N. 152 of 2000;
L.N. 320 of 2002;
L.N. 323 of 2002;
L.N. 319 of 2003.
(Regulation 2)
FIRST COLUMN SECOND COLUMN
PROCEDURES EXTENT OF AMENDMENT
L.C.P. 1/96 - Local
Councils (Financial)
Procedures, 1996.
1. P1.09 shall be amended as follows:
( a ) in item e.01, for the words "Lm100" there shall
be substituted the words "Lm500"; and
( b ) in item e.02, for the words "Lm 100" and "Lm
1000" there shall be substituted the words
"Lm500" and "Lm2,000" respectively;
( c ) in item e.03 for the words "Lm1000" there shall
be substituted the words "Lm2000".
2. In item c.09 of P1.14, immediately after the words
"must be deposited daily" there shall be added the words "or
not less than twice a week".
3. P1.01 shall be amended as follows:
Immediately after item h.06 there shall be added the
following:
"h.07 The depreciation of fixed assets is accounted
for through the month-end procedure on a monthly
basis. The rates of depreciation are established in
Appendix P1.XI.".
4. P1.02 shall be amended as follows:
Immediately after item a.02 there shall be added the
following:
"a.03 Ensuring that every payment and commitment
to pay, whether existent or in the future, is registered
as required in a cumulative and consolidated format
in terms of the established form in Appendix P1. XII,
which form shall immediately reveal and also provide
a projection of the emerging balance. When such
projected balance falls below the level of the
benchmark established in terms of regulation 4 of the
Financial Regulations, both the Council and the
Director shall be immediately informed in order to
lay the ground for the commencement of the relative
corrective procedure. A copy of this form (Appendix
P1. XII) shall accompany the minutes of every
Council meeting and shall be referred to Director.".
5. P1.05 shall be amended as follows:
( a ) Immediately after d.06 there shall be added the
following new paragraphs:
4 _g S.L.363.12 LOCAL COUNCILS (PROCEDURES)
"d.07 A copy of this report shall be forwarded to
the Director within fifteen days of its
presentation to the Council as specified in
the preceeding paragraph (i.e., by the 30th
July, 30th October, 30th January and 30th
April of each year).
Should the Council fail to submit such
report, the Minister shall, on the advice of
the Director, provisionally retain any
portion of the allocation of funds approved
to the Council, until the Council abides by
such obligation.
Provided that the Minister shall only retain
such funds following a period of time
prescribed in a written notice where the
Council is given the opportunity to rectify
its failure.
Provided further that the amount so
retained shall not exceed 1% of the funds
allocated to the Council during the
financial year.".
( b ) Immediately after g.05, there shall be added the
following:
"h. The Council shall forward to the Director
a copy of the approved minutes of its
meetings as well as the minutes of the
Finance Committee.
Should the Council fail to submit such
minutes within three working days after
their approval, the Minister may, on the
advice of the Director, provisionally retain
any portion of the allocation of funds
approved to the Council, until the Council
abides by such obligation.
Provided that the amount so retained shall
not exceed 1% of the funds allocated to
the Council during the fmancial year.
i. The Financial Situation Indicator of a
Council, as defined by regulation 4 of the
Financial Regulations, is calculated by
taking the total amount of current assets
(cash in bank and debtors) and deducting
from it the total amount of current
liabilities (payments/creditors falling due
in the short and long term), with the
exception of long-term financial
commitments approved in writing by the
Minister in terms of the Act.
LOCAL COUNCILS (PROCEDURES) _g S.L.363.12 5
In situations where the Council has an
approved loan arrangement, the long term
outstanding loan will not be taken into
consideration, when calculating the
Financial Situation Indicator. However,
both the Council and the Director shall
ensure that that the loan repayments are in
line with the original agreement when the
loan was approved and issued.
i.01 Should a Local Council have a Financial
Situation Indicator with a favourable
balance which is less than ten per cent of
the allocation which Government would
have approved to the Local Council for
that same Local Council financial year:
(i) The Director shall issue a notice in
writing about this situation to the
Local Council. The Council shall
thereby be bound to reply in writing
so as to state how the next quarterly
financial report will be drawn up,
how the Council would improve its
financial situation and which
expenditure cuts the Council was
about to effect to achieve the ten per
cent mark;
(ii) The Council shall be bound to
appoint a Finance Committee which
would include as members, the
Mayor, another Councillor and the
Executive Secretary, and should no
person from the Council or the
Executive Secretary be a qualified
accountant, a qualified accountant
shall be appointed by the Council.
Before any decision is taken about
any expenditure, the Council shall
request the advice in writing of the
Finance Committee which would
evaluate the proposed expenditure,
having regard to the financial
situation of the Council;
6 _g S.L.363.12 LOCAL COUNCILS (PROCEDURES)
(iii) Should the Council, by the second
quarterly financial report after the
Director’s letter, fail to make
provision for the ten per cent
benchmark, the Minister may, on the
advice of the Director, withhold the
release of such amount from the
allocation approved to the Local
Council which would be equal to the
difference between the actual
balance and the ten per cent
benchmark. The amount shall be
withheld for so long as in any
quarterly report made after the
withholding of such amount, the ten
per cent benchmark is achieved. On
such occurrence, the Minister shall
authorise the release of such amount
to the Council:
Provided that when a Council
consistently registers a positive
result, the Minister shall remove the
application of the requirement of a
favourable balance of ten per cent as
long as the Council continues to
register a positive financial position.
The Minister may at any time
reactivate the ten per cent
requirement in such cases where the
financial result or forecasts of the
Council would require such
measure.
i.02 Should a Council have a Financial
Situation Indicator with a negative balance
of less than five per cent of the funds,
which the Government would have
allocated to the Local Council for that
same Local Council financial year:
(i) The Director shall formally call
upon the Mayor and the Executive
Secretary within fifteen days from
the discovery of the negative
balance;
(ii) The Director shall request the Mayor
and the Executive Secretary to
prepare proposals regarding the
removal of the negative balance so
that the ten per cent benchmark of
favourable balance may be achieved
not later than twelve months after
such time:
LOCAL COUNCILS (PROCEDURES) _g S.L.363.12 7
Provided that, should the negative
balance in the Financial Situation
Indicator be registered at a time
during the last year of the term of
the Local Council, the ten per cent
benchmark of favourable balance
shall be achieved within two months
from the date of a notice sent by the
Director to the Local Council, and
by virtue of such notice, the
provisions of item (v) shall
immediately apply;
(iii) The proposals of the Mayor and of
the Executive Secretary shall cover
the method and the source of
financing of the negative balance,
which budget votes are to be used,
and which projects would be
minimised or terminated;
(iv) Should the Director approve the
proposals of the Mayor and of the
Executive Secretary, such approved
proposals shall in themselves
supersede the allocations made in
the Council budget and every
decision previously taken by the
Council;
(v) If the Director does not approve the
proposals made by the Mayor and
the Executive Secretary, the
Minister, on the advice of the
Director, shall have the power to
withhold from the allocation to the
Council an amount of money equal
to the difference between the
negative balance and the ten per cent
mark of favourable balance and to
start paying by such sum such
amounts as would be due by the
Council to third parties;
(vi) Should the Council, within a period
of twelve months, fail to achieve the
ten per cent benchmark, then there
shall apply the provisions of
paragraph i.03 of this provision,
whatever the favourable or negative
balance of the Council may be;
8 _g S.L.363.12 LOCAL COUNCILS (PROCEDURES)
Provided that wherever in this paragraph it
is indicated that a rate of ten per cent in
the case of a positive balance shall apply,
for the period between 1 October, 2003,
and 31 March, 2004, there shall apply a
rate of five per cent.
i.03 Should a Local Council have a Financial
Situation Indicator with a negative balance
in excess of the five per cent of the
allocation made by Government for that
same Local Council financial year:
(i) Within one month from the date of
the resulting negative balance, the
Director shall, after consultation
with the Council and its accountants
and auditors, prepare a financial
restructuring plan for the required
months or years, depending on the
magnitude of the negative balance,
which period, however, may not
exceed three years.
Should the Director incur any
expenses in the preparation of that
plan or in the required consultation
thereof, such expenses shall be
defrayed from the allocation which
Government would have made to
that Council;
(ii) The plan shall indicate the amount to
be used of the allocation to the Local
Council for the financing of the
financial restructuring plan and, in
general terms, which Council votes
shall be used for this purpose;
(iii) Prior to the implementation of the
restructuring plan the Director shall
inform the Minister about the plan,
and the Minister shall, before
confirming the plan, request and
hear the views of the Local Councils
Association;
(iv) During the restructuring period, the
Council’s accounts shall be
controlled by the Director who shall
have the right to refuse to finance
any undertaking of the Council
which adversely affects the
restructuring plan;
(v) The Council may not enter into any
financial undertaking without the
approval of the Director.
LOCAL COUNCILS (PROCEDURES) _g S.L.363.12 9
Appendix p1. XI
Depreciation Rates
The depreciation rates that will be applicable are as follows:
(vi) Any document relating to a call for
public tenders, and any
documentation of the Council,
including any correspondence which
the Council may send, shall include
a statement declaring that the
Council may not enter into any
financial commitment unless it has
an agreement to do so in writing
with the Director;
(vii) Such funds as are allocated by the
Government shall be held by the
Director in the name of the Local
Council and shall be spent according
to approved procedures;
(viii) Within the context of the
restructuring plan, the Director shall
have the right to pay such amounts
as may be due by the Council to
third parties.".
% Rate
Land 0
Buildings 1
Office Furniture and Fittings 7.5
Construction Works 10
Urban Improvements (Street Furniture) 10
Special Projects 10
Office Equipment 20
Motor Vehicles 20
Plant and Machinery 20
Computer Equipment 25
Trees 0
Plants 100
Litter Bins 100
Playground Furniture 100
Traffic signs 100
Road Signs 100
Street Mirrors 100
Street Lights 100
10 _g S.L.363.12 LOCAL COUNCILS (PROCEDURES)
Appendix P1. XII
1. Consolidated Details of Income and Expenditure
ACCT 
No.
DESCRIPTIO
N
QTR No. YEAR TO DATE (YEAR)
ACTUAL COMMITTED TOTA
L
BUDGET ACTUAL COMMITTED TOTA
L
BUDGET
Lm Lm Lm Lm Lm Lm Lm Lm
2 Income
0000 Government
0020 Bye-laws
0090 Investment
0100 General
TOTAL
1 Expenditure
1000 Personal
emoluments
2000 Operations and
maintenance
7000 Capital
expenditure
TOTAL
Balance
Opening Cash
and Bank
Balances
Less Future
Commitments
Add Balance
(Surplus/
Deficit)
Available
Funds
Allocation for
Council’s
current year
% Financial
Situation
Indicator
Notes: 1 The amounts entered in the actual column will be the figures extracted from the Sage Reports.
2 The amounts entered in the committed column will be those amounts not yet entered into Sage as Creditors or
Accruals in the case of expenditure and any accrued income or amounts due still outstanding.
3 Future Commitments will indude any tenders which have been awarded which have not yet commenced or
which are partly completed. The amount committed to the project (not yet utilised) will need to be entered in
this part and details given on the projects.
Declaration:
The Mayor and the Executive Secretary declare that the above statements show a true and fair view of the Council’s
position on the signing date and that all commitments have been induded in these financial statements.
Mayor Executive Secretary Date
LOCAL COUNCILS (PROCEDURES) _g S.L.363.12 11
1.1 Details of Income
1.1 Details of Expenditure
a b c=(a+b) d e f g=(e+f) h
ACCT 
No.
DESCRIPTIO
N
QTR No. YEAR TO DATE (YEAR)
ACTUAL ACCRUED TOTA
L
BUDGET ACTUAL ACCRUED TOTA
L
BUDGET
Lm Lm Lm Lm Lm Lm Lm Lm
2 Income
0000 Government
0001 Annual
0002 Supplementary
0003 Special needs
0004 Public/
government
delegations
0015 Others
0020 Bye-laws
0021 Community
services
0036 Contravention
of bye-laws
0056 Sponsorships
0066 General
0090 Investment
0091 Bank interest
0096 Government
securities
0100 General
0110 Donations
0120 Contributions
TOTAL
a b b - a c d d - c
ACCT 
No.
DESCRIPTIO
N
QTR No. YEAR TO DATE (YEAR)
ACTUAL COMMITTED TOTA
L
BUDGET ACTUAL COMMITTED TOTA
L
BUDGET
Lm Lm Lm Lm Lm Lm Lm Lm
1 Expenditure
1000 Personal
emoluments
1100 Mayor’s
allowance
1200 Employee
salaries and
wages
1300 Bonuses
1400 Income
supplements
1500 Social Security
Contributions
1600 Allowances
1700 Overtime
12 _g S.L.363.12 LOCAL COUNCILS (PROCEDURES)
2000 Operations and
maintenance
2100 Utilities
2200 Materials and
supplies
Repair and
upkeep
2310 Public
property
2311 Roads and
Street
Pavements
2312 Walkways
2313 Signs
2314 Road
markings
2330 Office
Furniture and
Fittings
2340 Plant and
Equipment
2360/
70
Sundry /
Other Repairs
& Upkeep
2375 Council
Property
2400 Rent
2500 National/
International
memberships
2600 Office services
2700 Transport
2800 Travel
2900 Information
services
3000 Contractual
services
3010 Street
Lighting
3020 Lease of
Equipment
3030 Insurance
Coverage
3035 Bank
Charges
3040 Waste
Disposal
3041 Refuse
Collection
3042 Bulky Refuse
Collection
3050 Cleaning
Services
3051 Road and
Street
Cleaning
3052 Clean. &
Maint. - Non-
urban Rds
3053 Cleaning of
Public
Convenience
s
3055 Cleaning
Council
Premises
LOCAL COUNCILS (PROCEDURES) _g S.L.363.12 13
3060 Other
Contractual
Services
3061 Clean. &
Maint. -
Parks &
Gardens
3062 Clean. &
Maint. -
Verges
3063 Clean. &
Maint. -
Beaches &
Coast
3064 Clean. &
Maint. - City
N.U. Areas
3100 Professional
Services
3200 Training
3300 Community
and hospitality
3600 Local
Enforcement
Expenditure
3400 Incidental
expenses
7000 Capital
Expenditure
7001 Acquisition of
property
7100 Construction
7200 Improvements
7300 Equipment
7500 Special
programmes
TOTAL
L.C.P. 2/96 - Local
Councils (Audit)
Procedures, 1996
Paragraph "e" of P2.05 shall be substituted by the
following new paragraph:
"e The local government auditors are to forward to
the Auditor General seven copies of their report on
the Councils’ financial statements. The Auditor
General will in turn distribute these copies as
follows:
e. 01 One copy to the Local Council.
e. 02 Two copies to the Minister, one of which is to
be tabled in the House of Representatives and the
other to be archived by the Clerk of the House of
Representatives.
e.03 One copy to the Minister of Finance.
e.04 One copy to be retained by the Auditor General.
e.05 Two copies to the Director (Local Councils),
one of which will be forwarded to the Director
General (National Statistics Office).".
14 _g S.L.363.12 LOCAL COUNCILS (PROCEDURES)
L.C.P. 3/96 - Local
Councils (Tendering)
Procedures, 1996.
1. In P3.03, a, for the words from "The Secretary" to
"of the tender submitted." there shall be substituted the
following:
"The Secretary is to ensure that bid bonds submitted
by Tenderers are in conformity with the following
table:
Estimate Value of Contract Bidbond requested
Up to Lm2,000  Nil
from Lm2,001 to Lm5,000 Lm200
from Lm5,001 to Lm15,000 Lm500
from Lm15,001 to Lm25,000 Lm1,000
from Lm25,001 to Lm50,000 Lm2,000
Lm50,001 and over Lm2,500.
2. Immediately at the end of Appendix P3.V, there shall
be added the following:
"BID BOND - SPECIAL CONDITIONS
This Tender must be accompanied by a valid and
original Bid Bond issued by a Maltese Bank to the
amount of ................ Malta lira (Lm .........) in the
form of the attached specimen Bid-Bond. This Bid
Bond must be valid for a period of ................
calendar months from the date set for submission of
tenders. This Bid Bond is intended as a pledge that
the Tenderer will enter into a contract with the Local
Council on the terms stated in his Tender and will
furnish a Performance Bond (as per specimen
attached to the Tender Documents) covering the
faithful performance of the Contract and the payment
of all obligations arising hereunder. The Bid Bond
shall be forfeited if the Tenderer withdraws his
tender before the stipulated period of ................
months or if Tenderer fails to provide the
Performance Bond within seven (7) days of the
receipt of the Letter of Acceptance.
The Local Council shall have the right to retain the
Bid Bond of Tenderers until, either ( a ) the Contract
has been placed and Performance Bond has been
furnished, or ( b ) the specified time has elapsed so
that Tenders may be withdrawn, or ( c ) Tenders have
been rejected.
Offers which on the closing time and date fixed for
the submission of the Tender are not accompanied by
the mandatory Bid Bond, will be disqualified.".
3. Appendix P3.IX, A (Services), clause 47 shall be
amended as follows:
( a ) in the third paragraph thereof, immediately after
the words "performance of the service." there
shall be added the following sentence:
LOCAL COUNCILS (PROCEDURES) _g S.L.363.12 15
"Where the Local Council requires an increase
in the service which varies the Contract Sum by
more than 20%, the Local Council shall either
definitely terminate the contract awarded to the
Contractor and issue a fresh call for tenders, or
shall only issue a call for tenders for that part of
the variation, provided that if the part of
variation is less than Lm2,000 or 5% of the
financial ordinary allocation, the limitations for
direct orders or quotations shall apply."; and
( b ) in the fourth paragraph thereof, the words from
"When the method variation" to the words
"performance of the service." shall be deleted.
P3. IX General Conditions of Contract shall be amended
as follows:
1. In A. Services, for item 41 there shall be
substituted the following:
"41. Settlement of Disputes
Any dispute, controversy or claim arising out of
or relating to this contract, or the breach,
termination or invalidity thereof, shall be settled
by arbitration in accordance with the rules of the
Malta Arbitration Centre as at present in force.
( a ) The appointing authority and
administrator shall be the Malta
Arbitration Centre;
( b ) The number of arbitrators shall be one;
( c ) The place of arbitration shall be Malta;
( d ) The language to be used in the arbitral
proceedings shall be Maltese, unless
otherwise stated; and
( e ) The applicable substantive law shall be
the Laws of Malta.".
2. In B. Goods, in item 28 for the words
"Notwithstanding any other agreement or condition to the
contrary in case of any dispute the Maltese Courts shall have
exclusive jurisdiction to hear and decide on the merits of the
matter in dispute." there shall be substituted the following:
"Any dispute, controversy or claim arising out
of or relating to this contract, or the breach,
termination or invalidity thereof, shall be settled
by arbitration in accordance with the rules of the
Malta Arbitration Centre as at present in force.
( a ) The appointing authority and
administrator shall be the Malta
Arbitration Centre;
( b ) The number of arbitrators shall be one;
( c ) The place of arbitration shall be Malta;
16 _g S.L.363.12 LOCAL COUNCILS (PROCEDURES)
( d ) The language to be used in the arbitral
proceedings shall be Maltese, unless
otherwise stated; and
( e ) The applicable substantive law shall be
the Laws of Malta.".
3. In C. Leasing of Immovable Property, immediately
after item 20 there shall be added the following new item 21:
"21. Settlement of Disputes.
Any dispute, controversy or claim arising out of
or relating to this contract, or the breach,
termination or invalidity thereof, shall be settled
by arbitration in accordance with the rules of the
Malta Arbitration Centre as at present in force.
( a ) The appointing authority and
administrator shall be the Malta
Arbitration Centre;
( b ) The number of arbitrators shall be one;
( c ) The place of arbitration shall be Malta;
( d ) The language to be used in the arbitral
proceedings shall be Maltese, unless
otherwise stated; and
( e ) The applicable substantive law shall be
the Laws of Malta.".
4. In D. Management of Immovable Property,
immediately after item 18 there shall be added the following
new item 19:
"19. Settlement of Disputes.
Any dispute, controversy or claim arising out of
or relating to this contract, or the breach,
termination or invalidity thereof, shall be settled
by arbitration in accordance with the rules of the
Malta Arbitration Centre as at present in force.
( a ) The appointing authority and
administrator shall be the Malta
Arbitration Centre;
( b ) The number of arbitrators shall be one;
( c ) The place of arbitration shall be Malta;
( d ) The language to be used in the arbitral
proceedings shall be Maltese, unless
otherwise stated; and
( e ) The applicable substantive law shall be
the Laws of Malta.".
