Auditor-General Terence Nombembe’s latest report paints a bleak picture of the state of SA’s municipalities and municipal entities, writes Legalbrief.
There has been a sharp deterioration in financial management at municipalities. A report in The Star notes that only 17 of the country’s 278 district and local municipalities received clean audits for the 2011/2012 financial year – and big metros don’t even make the 5% that fared well in the Auditor-General’s books. In fact, says the report, Johannesburg, Tshwane, Ekurhuleni, eThekwini, Cape Town and Nelson Mandela Bay – which between them account for more than R170bn of the municipal budget – received qualified audits. None got clean audits, a trend that worries Nombembe who is quoted in the report as saying: ‘The metropolitan municipalities faltered in their crucial role of proving exemplary leadership to smaller municipalities.’ The Auditor-General took solace ‘in the exemplary results’ of the three municipalities that improved – George, Langeberg and Mossel Bay, all in the Western Cape – as well as the municipal entities that did better.
Full report in The Star (subscription needed)
The City of Cape Town failed to get a clean audit report this year, partly because it spent nearly R35m on contracts awarded to council employees or their close relatives, notes a Cape Times report. It states the Theewaterskloof Municipality had also contravened the Municipal Finance Management Act in this way by spending R600 000. Hessequa spent about R500 000 in the same way, Nombembe said, according to the report. It notes he found the City of Cape Town had spent R34.9m on 47 awards to employees or their close relatives. In 32 of these cases the official concerned had not declared an interest.
Full Cape Times report (subscription needed)
A lack of ‘committed’ leadership lies behind the poor audit results, according to Nombembe. A BDlive report notes only nine municipalities had clean audits. The report says total irregular expenditure amounted to R9.82bn, while fruitless and wasteful expenditure reached R568m – more than double that of the previous year. ‘Clean audits have remained at the low level of 5% for the past three years, and the overall audit outcomes regressed, as 41 auditees improved, but 51 auditees regressed,’ Nombembe said, according to the report. It notes Nombembe said improved audit outcomes for George, Langeberg and Mossel Bay municipalities in the Western Cape, were a result of ‘leadership commitment’. ‘They prove beyond doubt that clean administration is achievable where there is leadership commitment.’ Nombembe said the Mangaung metro in the Free State got a disclaimer.
Full BDlive report
Key officials who do not have the necessary competence, coupled with vacancies in vital positions, hamper the ability of 73% of the municipalities to deliver services, the report shows, according to a TimesLIVE report. It says chief financial officers, municipal managers and supply-chain managers are in short supply. According to the report, as many as 71% of the entities audited were dependent on consultants to assist with financial reporting.
Full TimesLIVE report
Article source: http://www.legalbrief.co.za/article.php?story=20130815103809366