LOCAL COUNCILS (AUDIT) _g S.L.363.02 1
SUBSIDIARY LEGISLATION 363.02
LOCAL COUNCILS (AUDIT) REGULATIONS
26th November, 1993
LEGAL NOTICE 156 of 1993.
PART I
General Provisions
Citation .
Regulations.
Interpretation.
Cap. 363.
"audit procedures" means the Local Councils audit procedures
issued by the Minister;
"auditors" means the local government auditors appointed under
article 65 of the Act;
"Council", "Councillor", "Auditor General", "financial year",
"locality", "Mayor", "Minister" and "Secretary" shall have the same
meaning as is assigned to them by article 2 of the Act;
"Council’s administrative office" shall have the same meaning as
is described in article 48 of the Act;
S.L.363.01
"financial procedures" means the Local Councils financial
procedures issued by the Minister to be followed by Councils in the
execution of their financial duties and responsibilities under the
Act and in accordance with the Local Councils (Financial)
Regulations.
PART II
Financial Audit
Annual audit.
shall be audited by auditors at the end of each financial year.
(2) After concluding each annual audit, the auditors shall
prepare an annual audit report on the financial statements of the
Council, giving an opinion on whether or not -
( a ) the Council’s accounts fairly present, in accordance
with the accounting policies applicable to Councils,
the income and expenditure and the retained funds of
the Council; and
( b ) the Council’s financial statements were prepared in
accordance with the Act, these regulations and the
audit procedures.
(3) The annual audit report shall be submitted to the Auditor
General not later than twelve weeks after the end of the financial
year for the first year and thereafter not later than the 30th June of
each year.
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(4) A copy of the annual audit report shall be open for public
viewing at the Council’s administrative office during the Council’s
normal office working hours.
Interim audit. 4. (1) Auditors shall conduct interim audits during the
financial year at the request of the Auditor General and on topics
designated by him.
(2) After concluding each interim audit the auditors shall
prepare an interim audit report on the subject matter of the audit.
(3) The interim audit report shall be submitted to the Auditor
General not later than eight weeks after the conclusion of the
interim audit or by any other date requested by the Auditor
General, whichever is the earlier.
(4) A copy of the interim audit report shall be open for public
viewing at the Council’s administrative office during the Council’s
normal office working hours.
Cooperation with 
auditors.
5. (1) Councillors, the Secretary and other employees shall
cooperate with the auditors and their assistants and provide them
with oral or written explanations, as the auditors may require, as
well as access to all Council property, documents and assets.
(2) Councillors, the Secretary and other employees shall also
afford all facilities to auditors to have access to all Council
information, records and reports deemed necessary in the execution
of their duties and responsibilities.
Special reports. 6. (1) If the auditors -
( a ) observe any serious weakness in the Council’s
accounting and financial operations which, in their
opinion, could lead to a breakdown in such operations;
or
( b ) form a suspicion of fraud, embezzlement, or abuse of
office by any Councillor or employee; or
( c ) observe any item which may affect their opinion on the
fairness of the Council’s accounts and financial
statements,
they shall register their findings in a special report submitted to the
Minister and the Auditor General.
(2) The Auditor General shall review the special report and
shall make recommendations to the Minister and the Minister
responsible for finance on any action that is deemed appropriate in
the circumstances.
Management 
letter..
7. (1) After concluding each audit the auditors shall submit a
management letter to the Mayor including a summary of the
auditors’ findings and recommendations on the accounting and
financial operations of the Council.
(2) The Council and the Secretary shall -
( a ) implement the auditors’ recommendations relating to
non-compliance with the Act, these regulations and
LOCAL COUNCILS (AUDIT) _g S.L.363.02 3
other regulations or procedures issued under the Act;
( b ) give due consideration to the implementation of the
recommendations made by the auditors to correct any
weaknesses in the Council’s accounting and financial
operations.
(3) The Mayor shall submit a copy of the management letter to
the Minister and the Auditor General within two weeks of its
receipt in the first year and thereafter by the 15th of July of each
year.
(4) The Mayor shall submit, together with the management
letter specified in subregulation (3), a report explaining the actions
to be taken by the Council as a result of the management letter.
PART III
Value for Money - Securing Cost, Economy, Efficiency and 
Effectiveness
Comparison of 
indicators to 
measure 
performance.
8. (1) At the end of each financial year the auditors shall
analyse and compare the Council’s indicators to measure cost,
economy, efficiency and effectiveness for the current year against -
( a ) the Council’s indicators in the previous three years;
( b ) the average indicators or measures for all Local
Councils in the previous year;
( c ) the standard indicators, where applicable, which are
specific to the Council;
( d ) any other indicator or measure deemed fit by the
auditors or stipulated by the financial procedures.
(2) The auditors shall report to the Council on the analysis and
comparisons made according to subregulation (1). The Mayor shall
submit a copy of the report to the Minister and the Auditor General
together with the management letter specified in regulation 7(3).
(3) The Secretary shall include the comparison of the Council’s
indicators to measure performance in the annual administrative
report referred to in article 52 of the Act.
Value for money 
audit.
9. (1) At the request of the Auditor General or as stipulated in
the audit procedures, auditors shall conduct a value for money audit
on whether the Council has made the proper arrangements for
securing economy, efficiency and effectiveness related to any or all
of the following:
( a ) Council organisation structure;
( b ) policies and practices;
( c ) systems and procedures;
( d ) human, financial and physical resources;
( e ) indicators to measure performance of cost, economy,
efficiency and effectiveness.
(2) Based on the findings resulting from the value for money
audit, the auditors shall make recommendations to the Council with
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the aim of improving overall operational performance and value of
the Council to the public.
(3) The Mayor shall submit a copy of the value for money audit
findings and recommendations to the Minister and the Auditor
General within two weeks from receipt.
