Nombe­mbe up­braids prov­inces

CityPress - - News - HOPEWELL RADEBE news@city­press.co.za

For­mer au­di­tor-gen­eral Ter­ence Nombe­mbe says South Africa has noth­ing much to cel­e­brate af­ter it emerged that 19% of mu­nic­i­pal­i­ties achieved a clean au­dit 22 years af­ter democ­racy.

This fol­lows the re­lease of a re­port by his suc­ces­sor Them­bek­ile Mak­wetu on Wed­nes­day, which de­tailed the dis­mal state of fi­nan­cial health at South Africa’s mu­nic­i­pal­i­ties. Some in the coun­try have lauded the fact that 54 out of 272 mu­nic­i­pal­i­ties have achieved a clean au­dit – up from 40 in the 2013/14 fi­nan­cial year.

Nombe­mbe, who is the CEO of the SA In­sti­tute of Char­tered Ac­coun­tants, said the fact that fruit­less and waste­ful ex­pen­di­ture had in­creased from R685 mil­lion in 2013/14 to R1.34 bil­lion in 2014/15 was not some­thing to cel­e­brate, and should in­stead be a se­ri­ous cause for con­cern and should im­pel gov­ern­ment to act.

“It is clear that mu­nic­i­pal­i­ties need to stop talk­ing about skills short­ages and start do­ing some­thing to grow them,” he said.

“It is un­ac­cept­able that 22 years af­ter democ­racy, our lo­cal gov­ern­ment au­dit re­sults con­tinue to re­veal in­ad­e­quate fi­nan­cial man­age­ment and a com­plete dis­re­gard for the pub­lic’s money,” Nombe­mbe said af­ter re­view­ing this week’s lo­cal gov­ern­ment au­dit re­sults.

He said there were sev­eral other wor­ry­ing fac­tors that came out of the Au­di­tor-Gen­eral’s re­port that peo­ple were not pay­ing at­ten­tion to. For ex­am­ple, the re­port re­vealed that 92% of mu­nic­i­pal­i­ties were us­ing con­sul­tants to han­dle their fi­nan­cial re­ports at a cost of R892 mil­lion. Not only was this spend­ing un­nec­es­sary, but last year, then co­op­er­a­tive gover­nance and tra­di­tional af­fairs min­is­ter Pravin Gord­han ex­pressed his sus­pi­cion that these con­sul­tants were not only col­lud­ing with mu­nic­i­pal­i­ties to get con­tracts, but were ac­tu­ally not qual­i­fied to do the work.

“There seems to be a lot of truth in this school of thought,” said Nombe­mbe.

He said the re­port also re­vealed a dire need for mu­nic­i­pal­i­ties to se­ri­ously con­sider “grow­ing their own tim­ber” by par­tic­i­pat­ing in skills de­vel­op­ment pro­grammes to build ca­pac­ity in ar­eas where they have been lack­ing for years.

“The re­port makes it clear that mu­nic­i­pal­i­ties need to stop talk­ing about the skills short­age and start build­ing their own skills pipe­line,” he said.

Ac­cord­ing to Nombe­mbe, this was a move some pro­vin­cial de­part­ments had al­ready be­gun to un­der­take.

Ear­lier this year, the trea­sury de­part­ments in the West­ern Cape and KwaZulu-Natal joined the City of Jo­han­nes­burg as SA In­sti­tute of Char­tered Ac­coun­tants-ac­cred­ited train­ing of­fices be­cause they recog­nised the need to build their own set of skilled ac­coun­tants who would be pro­fi­cient in manag­ing the fi­nan­cial af­fairs of the pub­lic sec­tor.

Belinda Fran­cis Scott, the MEC for fi­nance in KwaZulu-Natal, said the KwaZulu-Natal trea­sury be­lieved that it was im­per­a­tive to in­vest in train­ing and men­tor­ship of fu­ture fi­nance of­fi­cers be­cause there was “a dire short­age of pub­lic ser­vants in the prov­ince, with ad­e­quate fi­nan­cial skills and ca­pa­bil­i­ties”.

The re­port there­fore showed that a lot of money was be­ing wasted in mu­nic­i­pal­i­ties due to lack of fi­nance man­age­ment and re­lated lead­er­ship skills.

“Every cent wasted in gov­ern­ment is a cent taken away from the peo­ple,” Nombe­mbe said.

Mak­wetu’s re­port cau­tioned that the con­tin­ued re­liance on the au­di­tors from his of­fice to iden­tify cor­rec­tions to be made to the mu­nic­i­pal fi­nan­cial state­ments to ob­tain an un­qual­i­fied au­dit opin­ion was not a sus­tain­able prac­tice.

“Over the years, this has placed un­due pres­sure on the au­dit teams to meet leg­is­lated dead­lines for the com­ple­tion of au­dits, with an ac­com­pa­ny­ing in­crease in au­dit fees.

“The over­re­liance on con­sul­tants is a fur­ther warn­ing sign of a lack of ca­pac­ity and skills in lo­cal gov­ern­ment to pro­duce un­qual­i­fied fi­nan­cial state­ments,” his re­port con­cluded.

The move to start train­ing and build­ing ca­pac­ity was show­ing signs of suc­cess and had seen prov­inces in which it was im­ple­mented record the high­est pro­por­tion of mu­nic­i­pal­i­ties with clean au­dit opin­ions.

“They are cer­tainly tak­ing pub­lic sec­tor fi­nan­cial man­age­ment se­ri­ously,” Nombe­mbe said. He warned that un­til ev­ery­one re­alised it was up to them to act by grow­ing and ac­quir­ing these skills for the pub­lic sec­tor’s sake, “we are go­ing to con­tinue to see in­ef­fec­tive gover­nance at lo­cal gov­ern­ment level”.

Ter­ence Nombe­mbe

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