Finance Minister Joseph Mathyola Mwanamvekha has warned local councils against losing public trust following a decline in the number of councils achieving clean audit opinions, urging the National Local Government Finance Committee to strengthen financial management systems.

Mwanamvekha made the remarks in Lilongwe during the official announcement of the 2025/26 Local Authority Performance Assessment (LAPA) results and presentation of Performance-Based Grant cheques, where he acknowledged improvements in council performance while raising concerns over accountability gaps.

He said local authorities have made significant progress in financial management, reporting and service delivery, attributing the gains to strengthened accountability systems and support under the World Bank-funded Governance to Enable Service Delivery (GESD) project.

Mwanamvekha said improvements in the use of IPSAS-compliant financial reporting frameworks, compliance with statutory reporting deadlines and the quality of financial statements demonstrate growing capacity among councils.

He, however, warned that progress could be undermined by weaknesses in financial management, revealing that councils with unqualified audit opinions declined from 22 in the 2023/24 financial year to 18 in 2024/25.

Mwanamvekha further disclosed that Nkhotakota District Council received an adverse audit opinion during the period under review and is undergoing an investigative audit, urging the National Local Government Finance Committee to reverse the trend.

Local Government Minister Ben Malunga Phiri said LAPA has become a key governance instrument under Malawi’s decentralisation programme, allowing government to assess performance, reward excellence and identify areas requiring improvement.

Phiri said 27 out of 28 district councils successfully met the minimum access conditions, performance measures and triggers required to qualify for Performance-Based Grants.

He urged District Commissioners, Chief Executive Officers and council officials to maintain high performance standards, saying public resources entrusted to councils must translate into improved services for citizens.

Dowa District Council emerged as the best-performing council after scoring 98 percent, with Phiri attributing the achievement to visionary leadership, teamwork, prudent financial management and commitment to public service.

Maloto Joseph Chimkombero, representing the Malawi Local Government Association, hailed the disbursement of performance-based grants, saying the resources will help councils implement development projects and improve service delivery.

Chimkombero said councils will work to ensure all local authorities meet the required assessment standards in future, as they strengthen accountability and improve their performance.

The LAPA assessment, introduced in the 2019/20 financial year, evaluates councils in areas including financial management, planning, procurement, governance and service delivery, with successful councils receiving performance-based grants.