A bleak outlook for municipalities
The auditor general’s report started out on a positive note regarding the significant increase in the number of municipalities that received clean audits.
But that didn’t detract from the bigger picture: 92% of municipalities are either in need of an intervention or their financial health is of serious concern. Auditor general Kimi Makwetu put this down to poor revenue management practices, including debt collection. A dismal picture begins to form. According to Statistics South Africa, Maluti-A-Phofung is the most poverty-stricken area in the Free State, with about 60% of households earning less than R1 650 a month. It clocked up R958-million in unauthorised expenditure last year.
The picture is similar in Thaba Chweu in Mpumalanga, which garnered one of the most damning audit opinions — a “disclaimed audit outcome” — with fruitless and wasteful spend of R36-million.
The report also slapped the Ngaka Modiri Molema district in the North West with a disclaimed audit outcome. The area racked up R406-million in unauthorised expenditure and R3.4-million in fruitless and wasteful expenditure.
It’s the very same district whose council was dissolved two years ago because of a severe lack of service delivery — and it now faces allegations of not keeping proper financial records.
These municipalities are representative of the numerous municipalities that have been battling to account for their finances. But the issues plaguing many of the regions aren’t purely a result of financial mismanagement.
The provinces with the poorest audit outcomes, based on the number of municipalities with disclaimed and adverse opinions, are the North West, Northern Cape and Limpopo.
Yet, according to the most recent household survey, more than a third of the households in these provinces receive a social grant. This number is increasing, with fewer people working and more unable to pay their municipal bills.
According to Statistics SA, most people in the Northern Cape live in formal dwellings, yet a third rely on social grants for a steady income. —