CHIEF executive officers of several municipal corporations have argued that they are struggling to attract and retain the accounting talent needed to produce financial statements on time, which is one of many factors contributing to the perennial problem of overdue financial statements flagged by the Auditor General.

But Minister of Local Government Desmond McKenzie has vowed that measures will be put in place to reduce the number of overdue financial statements in short order.

According to McKenzie the municipal corporations need technological resources and the human capacity to deal with this challenge.

“And that is why, in the post upgrade within the local authorities, some of those positions which will be required to strengthen the capacity of the local organisations were put in place,” McKenzie said Wednesday during an interview on the Nationwide News Network programme This Morning.

He disclosed that the Government has already allocated $100 million to improve the technology available to municipal corporations and is prepared to offer them even more support.

“I want to say that when the next time comes around for the reporting mechanism to be done, there will be significant improvement in it because as minister I have taken a personal position on this matter,” added McKenzie as he vowed to take action if there is no improvement.

The minister was responding to concerns raised on Tuesday as Parliament’s Public Accounts Committee (PAC) reviewed findings from the Auditor General’s latest annual report, which revealed that 95 financial statements from municipal corporations remain outstanding, despite repeated attempts over the years to reduce the backlog.

Under the Local Government (Financing and Financial Management) Act, municipal corporations are required to prepare and submit annual financial statements to the Auditor General. However, the Auditor General’s Department has repeatedly highlighted delays in the submission of those reports, raising concerns about transparency and financial oversight in local government.

Municipal leaders told the committee on Tuesday that one of the most persistent challenges is the limited availability of accounting professionals to prepare the financial statements while also handling the day-to-day financial operations of the corporations.

Robert Hill, chief executive officer of the Kingston and St Andrew Municipal Corporation (KSAMC), said authorities have struggled to retain specialised accounting staff, forcing some corporations to rely on private firms to complete the work.

“When the structure would have been approved and the compensations would have been revised and updated, the market has shown that there is disinterest generally in professionals taking up these positions. Competitively, they have been brought closer to market to private sector offerings, but, from our own experience, there are several times that particular positions are advertised through the approval of the Services Commission and there was little to no interest,” he noted.

Hill told the PAC that the KSAMC has relied on external expertise to help move the work forward, while continuing efforts to recruit specialised talent.

“We have outsourced the services of a professional accounting firm, Mundle Assurance Services, to bring our records up to date, and we have therefore set out a project timeline to bring these up to date,” said Hill.

From the St Catherine Municipal Corporation, Chief Executive Officer Marvalyn Pitter said it has had to redeploy staff internally while it attempts to recruit personnel with accounting expertise.

“We are currently also doing 2021 because we have a member of staff who was in another department, and we recognised that that person has a finance background, so she’s currently doing the statements,” said Pitter.

She pointed out that the St Catherine Municipal Corporation has written twice to the Services Commission seeking approval to recruit a director of final accounts to oversee the preparation of financial statements.

From the Portmore Municipal Corporation, acting Chief Executive Officer Courtney Campbell told the PAC that limited staffing has slowed the corporation’s efforts to get fully up to date, even though it has managed to make progress.

“We are four years out, we haven’t outsourced, [and] I have been doing the accounts myself since inception of the municipality, and the difficulty with that was the paucity of my staff, but thankfully, now we have the structure in place, and that support staff should help us to reach where we want to reach,” said Campbell.

He added that the municipality has also struggled to attract applicants for key posts.

“The real difficulty that my other colleagues have mentioned is that I’m not seeing a great take up of the positions when advertised. We have been advertising for a cashier for the last three years, and up to today, no one has expressed any interest,” said Campbell.

Municipal leaders also pointed to weaknesses in record-keeping systems, explaining that many corporations still rely heavily on manual storage for financial documents.

That approach has left records vulnerable to damage from moisture, insects and natural disasters. The PAC also heard that delays in implementing modern accounting systems have contributed to the backlog.

The Auditor General’s report noted that municipal corporations are still not fully complying with accrual-based International Public Sector Accounting Standards (IPSAS), despite the legal requirement for the system to be adopted since the 2017 financial year.

IPSAS is intended to improve transparency and accountability by ensuring that public sector entities record financial transactions in a consistent and internationally recognised format.

However, officials said the transition has been delayed largely because municipal corporations lack the integrated financial management software required to generate IPSAS-compliant financial statements.

Permanent secretary in the Ministry of Local Government and Community Development Marsha Henry-Martin told the committee that the ministry is now moving to procure a centralised accounting system to support the reform, saying the process is already “very far advanced”.

She said the proposal had been sent to the Public Procurement Commission, but an adjustment in the GCT status of the proposed bidder changed the approval path.

“The system is a software that will be utilised within the accounts unit to allow for the inputs of data, the analysis of financial data, and to allow it to prepare the statements in a systematic manner,” she said.

Henry-Martin added that the system is expected to be implemented by the first month of the new financial year and that, after a decision is made, the roll-out will begin across the municipal corporations.

Despite the scale of the challenge, municipal leaders told the committee they are optimistic that recent recruitment efforts, outsourcing arrangements and the planned financial management system will help reduce the backlog of statements.

Several corporations said they have begun submitting older financial statements while working through multi-year plans to clear the remaining reports.

Minister of Local Government and Community Development Desmond McKenzie in discussion with permanent secretary in the Ministry Marsha Henry-Martin.