LORRAINE NDEBELE GOVERNMENT’S erratic and unpredictable disbursement of devolution funds has affected effective implementation, planning and utilisation of money targeted at empowering local authorities in developing their areas, a Parliament report has revealed.
According to the 2nd Report of the Parliamentary Portfolio Committee on Local Government, Public Works, National Housing and Social Amenities, the flawed bureaucratic systems affected the procurement processes.
The report states that foreign currency exchange rates have been volatile resulting in complications in procurement prior to the introduction of the foreign currency auction system.
It says the lengthy procurement process raised by councils negatively impacted on the pricing of goods and services.
“The lack of a devolution legislative framework has resulted in widespread bottlenecks in the operationalisation of devolution and the subsequent utilisation of the devolution funds,” the report said.
The portfolio committee said the Finance and Economic Development ministry was supposed to receive invoices from suppliers for approval and disbursement of funds to local authorities for onward payment.
This process, the report said, takes more than a month adding that devolution funds were not exempt from the Intermediated Money Transfer Tax.
“Resultantly, with each Intergovernmental Fiscal Transfer (IGFT) received, council has to pay 2%.
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This is on top of other taxes and services charges which in most cases amount to 6% of the disbursement to the local authorities,” the parliamentarians noted.
Lack of capacity by local contractors to produce or provide various goods and services, the report said, resulted in local authorities who cannot access foreign currency to procure from foreign contractors who require foreign currency payments.
According to the committee’s observations, the absence of a devolution framework resulted in the lack of clear procedures in the implementation of devolution by local authorities.
“The lengthy procurement process as well as delays in the disbursement of funds greatly militate against efficiency of local authorities in implementing their projects,” the report said.
However, the report added that local authorities are either overcharged or they have to restart the procurement process.
It also blasted authorities at Mutare City Council and Kariba Municipality for not preparing for engagement with the committee adding that the latter’s report lacked detail on the utilisation of devolution funds even after they were tasked to send a comprehensive report.
In their recommendations, the committee called for the realignment of laws that govern procurement to ensure that there is clarity in the procurement process by June this year.
“The Ministry of Finance and Economic Development should efficiently and timeously disburse funds to local authorities for use within the budget year,” the parliamentary report said.
The committee also called for local authorities to be exempted from IMT Tax by June 2022 when the government comes up with a devolution framework that outlines the devolution financing model.
Government introduced devolution according to Chapter 14 of the Constitution although there has been little-to-no traction in its operationalisation.
Parliament, however, noted that President Emmerson Mnangagwa’s new dispensation emerged as champions of devolution with disbursement of funds despite the absence of a legislative framework in place.
