Government says there is need for Treasury to address causes behind huge debts accumulated by local councils before they are bailed out.

Minister of Finance Felix Mlusu said this is in Parliament in responding to a question by Machinga East lawmaker Esther Jolobala who asked the finance minister about government’s policy on bailing out District Councils that are failing to maintain and repair their assets.

In his response, Mlusu said there is need for auditing of such councils before they are rescued from the financial difficulties.

“We did ask all Ministries, Departments and Agencies (MDA) including district councils to submit to us their arrears that have accumulated because we know that the arrears have strangled their operations.

“So, we are paying out these arrears so that we can at least put these district councils and MDAs into some liquidity for them to operate,” said Mlusu.

He added auditors are currently in the councils to finish off the auditing exercise and once the numbers are agreed, Treasury will proceed to pay them.

“So, the process is before we can pay out their arrears which they have accumulated we have to audit them so at the moment we have been doing this exercise of auditing.

“We are in fact in the process of completing that exercise so as we finish each particular MDA, we are paying them whatever has been certified to be the correct amount of arrears that indeed the owe to their suppliers,” said Mlusu.

Recently, Malawi Local Government Association (MALGA) complained about the absence of funds allocated for bailing out local councils in the 2021/2022 budget estimates.

However, the finance minister has assured the House that Treasury has readily available funds to bail out the councils.

Jolobala cited that District Health Offices (DHOs) are failing to service the already available ambulances due to the huge debts incurred with different service providers.