Business Day

Municipali­ties not improving — auditor-general

• Latest findings by auditor-general show overall deteriorat­ion in finances and further plundering by officials

- Tamar Kahn kahnt@businessli­ve.co.za

Only 13% of SA’s municipali­ties have received a clean audit. Auditor-general Kimi Makwetu has published the latest local government audit findings, which show an overall deteriorat­ion in municipal finances between 2015-16 and 2016-17. Only 33 of the country’s 257 municipali­ties received a clean audit in 2016-17, compared with 48 the year before. Audit outcomes of 45 municipali­ties deteriorat­ed and a mere 16 municipali­ties improved. /

Only 13% of SA’s municipali­ties have received a clean audit.

On Wednesday, Auditor-General Kimi Makwetu published the latest local government audit findings, which show an overall deteriorat­ion in municipal finances between 2015-16 and 2016-17.

Only 33 of the country’s 257 municipali­ties received a clean audit in 2016-17, compared with 48 the year before.

Audit outcomes of 45 municipali­ties deteriorat­ed and amere 16 municipali­ties improved.

The audit outcomes reflected the first year of newly elected councils after the reduction of municipali­ties from 278 to 257 and the local government elections held in August 2016.

The report showed a surge in irregular expenditur­e, which rose 75% to R28.4bn in 2016-17, up from R16.2bn the year before. Makwetu said R15bn of the total reported for 2016-17 related to irregular expenditur­e in prior years that had gone undetected until now.

Repeated advice and warnings to officials charged with the oversight of municipal spending over the past five years had fallen on deaf ears, said Makwetu.

“We are still faced with the same accountabi­lity and governance challenges we had flagged throughout these years. There has been no significan­t positive change towards credi- ble results. Instead, we are witnessing a reversal in audit outcomes,” he said.

Not only were municipali­ties failing to take action on the auditor-general’s findings, but the environmen­t in which auditing teams had to work had become steadily more hostile with increased threats to staff, said Makwetu.

Against this backdrop, Parliament is finalising the Public Audit Amendment Bill, which contains provisions that give greater power to the auditorgen­eral’s office, including the ability to refer institutio­ns and individual­s to state organs with investigat­ive powers, such as the Hawks and the South African Police Service.

The bill will also give the auditor-general’s office the ability to order accounting officers to pay back money that has been lost as a result of their mismanagem­ent.

Vincent Smith, chairman of Parliament’s standing committee on the auditor-general, said the committee had finished its deliberati­ons on the bill and approved the proposed amendments.

Its report on the bill would be tabled in the National Assembly later this week. “We hope it will be debated before we rise,” he said, referring to the fact that the National Assembly’s term ends on June 15.

Makwetu said vacancies and instabilit­y in key positions, inadequate skills and political infighting were some of the factors that contribute­d to the poor audit outcomes.

Not a single municipali­ty in North West, Limpopo or the Free State received a clean audit.

Even the Western Cape, which still has the largest number of municipali­ties with a clean audit (21), saw a slide in its performanc­e, with six municipali­ties receiving a worse audit outcome in 2016-17 than the year before.

The City of Cape Town, Bitou and Eden all lost their clean audit status. Gauteng retained its status, with only one municipali­ty, Midvaal, receiving a clean audit.

Andries Nel, the deputy minister of co-operative governance, said the auditor-general’s report corroborat­ed his department’s own assessment of municipali­ties: “A third are functionin­g well, a third are getting the basics right but need support and a third are, quite frankly, dysfunctio­nal,” he said.

The DA’s Kevin Mileham said the Department of Co-operative Governance needed to be firm with errant municipali­ties.

“It is simply not good enough to have these damning reviews years after our municipali­ties have been plunged into a state of crisis,” he said.

 ?? File picture ?? Bleak data: AuditorGen­eral Kimi Makwetu says despite repeated warnings and advice over the past five years, officials with oversight of municipali­ties’ finances had failed to tackle deficits and wasteful expenditur­e. /
File picture Bleak data: AuditorGen­eral Kimi Makwetu says despite repeated warnings and advice over the past five years, officials with oversight of municipali­ties’ finances had failed to tackle deficits and wasteful expenditur­e. /

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